ANNUAL BUDGET STATEMENT

Order read for Resumption of Debate on Question [5th March, 1982][2nd Allotted Day],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 1982 to 31st March, 1983."- [Dr Tony Tan Kong Yam, Minister for Trade and Industry].

Question again proposed. 3.30 p.m.

Mr Ng Kah Ting: Mr Speaker, Sir, I rise to speak in support of the motion by the Hon. Minister for Trade and Indus- try. The Budget proposals are well balanced and have been aptly presented by the Hon. Minister. These were predictable for they grapple with the realities of the world economy that press upon us. If the give-aways this year are marginal, it is simply because most of what were giveable were given away by the Minister's predecessor last year. To my lay mind, I am happy with the Budget, And the case to be met by the Hon. Minister in this debate was analysed in his characteristic fashion by my Friend, the Member for Whampoa, in the House yesterday. Whilst it is a hard fact that inflation is a phenomenon that no developing economy, in particular a fast developing one, can escape from, there must be cogent reasons to justify specific Government measures that had the effect of fuelling our high rate of inflation. These specifics were clearly dealt with by the Member for Whampoa in last year's debate, but there was no effective response. Therefore, we can anticipate an analytical reply from the Hon. Minister to the said Member's critical remarks this year.

Sir, with the exception of the hon. Member for Anson, and this we shall soon test and know as we go along, this House accepts the Government's philosophy underlining the Budget proposals. The criticisms in the House have been directed largely at questions of detail. This has been so over the years during which we, the PAP Government and the people of Singapore, saw Singapore through her worst periods of unemployment and social dislocation.

With the advent of Anson, however, its Member gave us notice both at the hustings and through the international press, that Singapore was henceforth going to be a different place and that the Workers Party was about to swing into a wide-ranging philosophical attack on the Government's policies.

Yesterday, the Member for Anson spoke for more than 45 minutes. It is unfortunate that he spoke immediately after my good Friend, the Member for Whampoa. A greater contrast in content, reason and argument could not have been revealed. The Member for Whampoa gave a reasoned argument supported by facts and figures. He was persuasive enough, even though I cannot agree to all he said. On the other hand, the Member for Anson waffled through his speech, setting out suppositions and conjectures which he was never able to substantiate. I think the trouble with the Member for Anson is that his opinions are always chasing facts which are non-existent.

Sir, the PAP Government has never claimed infallibility. Far be it for us to claim that we are always right. But we have been right most of the time and where we have not anticipated developments correctly we have had the courage and capacity to adjust. This financial policy as set out in the Budget Statement is based on a cold and sober assessment of our future and sets out a realistic plan. No doubt there can be improvements as can be seen from the deliberations and contributions made by my colleagues, the PAP Backbench, have suggested and will be suggesting. But, Sir, the suggestions and comments must have cogent reasons behind them. The Member for Anson had, however, decided that the financial policy must be opposed and made a pathetic attempt to find points that he could attack.

Sir, in his more tuan 45 minutes of verbosity, there was only one attempt by him, as I could discern, to support his argument by facts when he tried to show that the average NWC increase did not result in any increase in real income. But, Sir, unfortunately he came to grief because he does not seem to be able to add 2 and 2 and get 4.

Sir, he took the average NWC increase of 14% and deducted 4% CPF as if the CPF contributions were not the workers' money. This 4% belong to the workers which they have contributed. He then deducted further a cock-shy figure of 10% increase in food prices for the lower income group and then stated that it was possible that they suffered a cut in real wages. Sir, if a first year 'A' level student indulges in this kind of economic argument, he will find himself out of the class in double quick time. The hon. Member must remember, having been taught in school, that one cannot add apples to oranges. He has just mixed up apples, oranges, papayas and what-have-you and obtained not a fruit cocktail but a product, to use an euphemism, which if spread evenly on Parliament grounds will give a luxuriant growth of grass. My purpose in drawing attention to the Member's confusion is not to belittle him but to show the danger that he poses when he has absolutely no grasp of even simple economic concepts and yet he holds himself forth as one who can do a better job of managing the economy.

To give yet another example of his confusion, he lamented the fact that workers have been penalized for job-hopping. Sir, does he not realize the difference between incentives and penalties? Of course, there are incentives for workers to stay in a job and if they job-hop, they lose these incentives - they lose certain privileges. This is how it should be. No one is prevented from job-hopping but it would be insane to expect that people should be encouraged to job-hop. The Member talked of the need to motivate workers. Is not the incentive to stay and become skilled in a job a method of motivation? The trouble with the Member is that his mind works in such strange and mysterious ways that even he cannot understand the meaning of his utterances.

Sir, the Member made much of the fact that his party was the first to use the phrase "a caring society". I do not have to tell hon. Members that this is not true. But even if it were true and his party first used the "caring society" slogan, what does it prove? Does the Member think that leading a nation and solving its problems is a matter of finding the right slogans? One does not solve problems by coining slogans. We in the PAP have leaders who cared enough to put their lives on the line from 1954 to lead this nation. Where was the Member for Anson when the communists and communalists were running loose?

Mr Jeyaretnam: I was here.

Mr Ng Kah Ting: Not in the House.

An hon. Member: Not in politics.

Mr Ng Kah Ting: Not in politics. Sir, the Member for Anson, in his criticism of the Government's financial policy, has shown himself to be dangerously ignorant of what makes for our economic performance and success. If we follow him, far from having a caring society, we will have a scaring society. You are scared and you know what it is to be scared. There will be chaos in the nation and all that we have so painstakingly built up over the last 23 years, 1959 till now, since independence it is 17 years, will be destroyed.

Hon. Members may be aware that in the Workers Party publication Towards a Caring Society on the subject of defence, the party states that in the present-day context of relations between nations, the present expenditure on defence is wasteful and unnecessary. It further states that the party sees the main threat to our society is from within and therefore advocates the maintenance of a regular army (not a National Service army that we now have but a regular army) to meet the threat to our society and to maintain peace. Sir, it is clear that somehow in a confused way the Member for Anson has arrived at the right conclusion. The conclusion is that if his economic policies are implemented, there will soon be such a mess that it will require the army to intervene to maintain law and order. Sir, I cannot think of a more certain prescription for the demise of our nation.

On that note, I would like to add my support to the Motion moved by the Hon. Minister for Trade and Industry. 3.45 p.m.

Encik Saidi Haji Shariff (Kaki Bukit): Mr Speaker, Sir, I would like to join my colleagues, the PAP Members of Parliament who spoke yesterday and today in support of the Motion standing in the name of the Minister for Trade and Industry.

I am no economist and cannot adequately comment on the Budget Statement. But I dare say that the Minister has presented a kind and enlightened Budget which very few of us can quarrel with. The Budget Statement reflects the caring attitude of our Government and the great concern it has for the well-being of its citizens, the workers and management staff alike, the young and the old. He gave a brief and concise description of the Singapore economy in 1981, without leaving any stone unturned. He clearly spelt out the Government's economic policy which he concluded with a message to Singaporeans that the Government will continue to govern firmly and fairly but we must pull up our socks if we want to avoid being dragged into the quagmire of economic stagnation.

Yesterday two of my PAP colleagues who are prominent economics lecturers debated on the pros and cons of rapid economic growth. This gave me some insight and understanding of the formulation of economic policies. As a layman and non-economist, I believe that in our national development we should aim for achievement of political stability, economic growth, full employment and price stability so that we, the citizens, could hope and work for a reasonably decent and comfortable life, and seek opportunities to improve our quality of life. These four aims are closely related and interdependent of each other. There is, therefore, a need to set down priorities and strike a balance in our attempt to achieve all the four of them. What is crucial here is: who runs the Government? They must be men of upright character and conviction, and have the necessary qualities of leadership and are ready to discuss national issues frankly on the basis of facts, figures and reality, and not on baseless rumours. They must have the capacity and the courage to lead the people from one difficult period to another; and help them to help themselves towards improving a standard of living of their own, their families and children. There is need for the Government and the people to work together to achieve these objectives. There is no need for any opposition, if it is for opposition's sake, and use rumours to support its views.

With your indulgence, Sir, let me illustrate my point further by drawing my experience of working for the last one year in a shipping company whose business is to transport cargo from one international port to another by ship in the most profitable manner possible without jeopardizing future expansion. In deciding to buy or construct a ship, there is need to consider the following: first, the size of the ship so that as much cargo or containers as possible can be carried; second, the shape or design of the ship that will enable it to float and move fast through the waves and reach its destination safely in time; third, the type of marine engine for the ship which will ensure low consumption of oil. There are obvious constraints to a maximum achievement of all the three factors mentioned. Hence, the need for some sacrifice of one in order to have some achievement of the other. The most important thing to consider is that the transportation of the cargo by the ship should be done efficiently and in the most profitable manner possible, no matter what the size, speed and oil consumption is. In the long run, it depends upon the effectiveness of the captain and his officers in leading the crew to steer the ship safely to its destination with its cargo intact despite bad weather and stormy seas. There is need for teamwork and close cooperation between the captain, his officers and crew. There is no place for any member of the crew to act as a rebel without cause, opposition for opposition's sake, but is still interested to join the rest in reaching the destination safely.

Mr Speaker, Sir, we have enjoyed political stability for the last 16 years. This has made it possible for us to gain economic growth that generates employment opportunities for every citizen. The stability of prices is shaken considerably because of factors beyond our control. But what is important, in view of the gloomier years ahead, is to ensure that every citizen is equipped with an adequate capacity for employment in work of higher skills which will give higher wages to enable him or her to continue enjoying a higher standard of living. Therefore, we must continue to work hard to generate and sustain high economic growth at this opportune time and situation we are now in. At the same time, we must intensify consumer education among our people and take the necessary steps to combat inflation or control price stability. I appreciate the Chinese proverb quoted by the Member for Leng Kee that "A boat sailing against the current must forge ahead or else it will be driven back". Let me add here a Malay pantun which I used to sing at campfires:

Kapal kecil jangan dibelok

Kalau di belok patah tiangnya.

Gadis kecil jangan di pelok

Kilau di pelok patah pinggangnya.

Our small boat should not be turned around but must continue to sail forward no matter how bad the weather and strong the current is or else the mast will break and the boat will sink.

I therefore support the Government's economic policy as stated by the Minister for Trade and Industry but may I make some comments on certain areas of the policy, budget and tax changes. Let me first of all praise our Government for the commendable performance of the Singapore economy in 1981 despite the depressing economic conditions of the world, particularly in the West. This has been possible because of the forward-looking policies of the Government in the seventies. Whatever modifications, changes and concessions which have been made to the policies are due to the contribution of constructive criticisms, opposing views and suggestions from the majority of our Backbench Members of this House who have always the interest of their citizen constituents at heart. If this has been going on very satisfactorily for the last 13 years, I see no reason why we need anyone here to act as the so-called opposition. There is need for continued political stability and there is need to prevent the emergence of irresponsible opposition in this Parliament.

Manpower training and development has been pointed out as the key to our ability to sustain economic growth in the coming years to ensure employment of our people at higher wages. There is need for coordinated efforts by all Ministries and statutory boards in the public sector and companies/corporations in the private sector to adopt a comprehensive national approach in human resource development and management covering all sectors of our society. Facilities and opportunities for life-long education and training should be provided not only to upgrade our skills but also to better our academic qualifications and to enjoy life fruitfully, Workers should be grateful that the NTUC has prepared a comprehensive programme to help those who have missed the opportunity of a basic education. I notice that a sum of $6,849 million or about 55% of the total budget will be spent on development projects and $548 million of this development budget is allocated for the School and Junior College Building Programme, third phase development of the Kent Ridge Campus of NUS, new complex of NTI and expansion of the Ngee Ann Technical College. Our children can look forward to having the privilege of better opportunities and facilities for higher academic and professional qualifications at a cost which is highly subsidized by our Government. What about those adults, like myself, who have left school, worked and settled down but wish to improve their academic or gain professional qualifications? Is there a plan for the NUS to offer diploma or degree courses on a part-time basis to adult workers who can pursue their studies in the evenings or by correspondence?

Many companies have seized the opportunity of the availability of the Skills Development Fund training grants to send their staff for training. To meet this demand, many agencies or training institutes have emerged or mushroomed in Singapore offering all kinds of training at exorbitant fees because they are conducted in posh hotels which provide sumptuous lunches and dinners to the participants. The lecturers are normally lecturers with a string of qualifications from overseas universities. I wonder if there is need to check and monitor the effectiveness of these training programmes or seminars conducted by these agencies, so that companies will get the kind of training they really require for their staff and that they will be granted SDF grants eventually. For this purpose, there is need for courses to be conducted for senior management staff of companies to help them understand what and how to plan their manpower development strategy. This will help to ensure that all workers at all levels from junior, middle management executives and senior staff receive the necessary training required.

There is already present an increasing awareness of productivity among employers as a result of the thrust of the wage correction policy. This productivity awareness must be enhanced not only among workers on factory floors and offices but also among our people in their homes and students in schools. Let the concept of productivity be driven hard into the work-consciousness and philosophy of our people so as to ensure that at all times our products and services are of the highest standard. Automation and robotization will push further our drive for increased productivity but it must always be remembered that it is the people who make the organization or company tick. Hence, there is need for an effective personnel management approach being adopted by employers, including the Government. It is everyone's responsibility to develop a quality labour force in our natural resource-scarce Republic. It is important to stress that to achieve higher growth in our rate of productivity, we need to economize the use of labour, increase the supply of trained manpower, induce more people to join the labour force and give higher capital investment per worker. But I believe the most important factor to be considered seriously is human motivation at all levels, to increase output and strive for excellence. Apart from fostering team spirit, improving staff morale, implementing welfare schemes and incentive bonus payments, there is need to develop human relationship skills at all levels of the workforce in any organization. In view of the stress and strains of present-day living in an urban environment and a fast working pace, we need to develop a very informal and friendly social atmosphere where our people can live and work happily, and this goes a long way to motivating them to excel for higher output. Training in human relations should be part of our manpower training and development and it should be incorporated into our education system.

Let me now comment on the Budget itself. I fully agree with the three objectives which the Budget sets out to achieve. I wish to add that in addition to accelerating the public housing construction programmes to meet the rising demand for housing, we should include the social objective of upgrading and speeding up the process of community development towards the re-creation of a new community in the housing estates with stronger ties of friendship, a sense of belonging and a commitment to common destiny. There is need to develop in our people to respond readily and to rally cohesively in the face of hard and difficult times ahead and to cope with any crisis threatening their survival. For this consideration, there is probably a need to increase the allocation of funds for those ministries and statutory boards which are directly involved in community development and in providing community services. The future and survival of our Republic depends upon the success of our efforts to build a more cohesive society of people living in housing estates and who will be able to respond adequately in meeting hard times ahead and any serious crisis that may occur.

I fully appreciate the Government's move "not to levy any new taxes or raise the rates of existing taxes", and I support the rationale that "rates of income tax should never reach a level where they discourage hard work and stifle talent." Most people are now aware of the increasing PUB charges and I am sure they have, on their own, adopted various means to lower consumption. It is therefore long overdue that "tax should be levied on only those items in the PUB bill that vary according to consumption." There is need to enhance our people's, knowledge on how to save energy, particularly electricity, so that it becomes part of their life-style and hope that one day there is no need to levy a tax on PUB bills any longer. May I suggest that in order to get all residents indirectly involved and committed to the work of Residents' Committees, we should give them an opportunity to make monetary contributions to the RC fund or any community development project in their own estate and that this contribution be fully tax deductible.

Mr Speaker, Sir, I support the Motion standing in the name of the Minister for Trade and Industry.

4.00 p.m.

Mr Liew Kok Pun (Boon Teck): Mr Speaker, Sir, let me begin by congratulating the Minister for Trade and Industry for having presented the Budget Statement. It is one which could be described as a no-pain-now-but-heavy-weather-ahead Budget. Singaporeans must be relieved to know that our economy is on an even, steady keel, despite the downturn in the world economy and a deepening world economic recession. Here, Sir, I would like the Member for Anson to note this important point. We have, as a nation with positive political leadership, sound economic planning and a disciplined workforce led by the NTUC, weathered several world economic storms and we have also chalked up impressive economic records over the last two decades. We have not been haunted by the spectre of unemployment that looms so large over many developed countries. However, we cannot afford to be complacent or contented with our past achievements simply because we have become so used to progress and affluence. What we have built up over the last 23 years through sheer hard work, grit and perseverance, can crumble overnight if we do not put in sustained efforts in our drive for greater productivity in all sectors of the economy. A country devoid of any resources other than its manpower can survive only if it has a rugged, resilient and resourceful people. They are also usually a people who have forged for themselves an intense and dynamic culture. There are ample examples in modern history to support this observation. The north-eastern Asian countries comprising South Korea, Japan, Taiwan and Hong Kong, despite their scarce resources and inhospitable geographical terrains, have been chalking up good economic progress. What makes a country tick is, therefore, the quality and calibre of its people.

Sir, I would therefore like to focus my response to the 1982 Budget Statement on the most crucial and critical factor in the restructuring of our economy upstream, It is also the most decisive element in the survival equation for Singapore. This factor is the quality of our workforce, the quality of our people. My contention is that we can build a higher-quality economy only with higher-quality components. It is going to take more than physical investments to increase productivity. If this is so, we cannot afford to have manpower wastage in the labour force, much in the same way as we must minimize educational wastage in the education system. This point is significant in our labour-deficit economy, and it becomes increasingly crucial with a declining pool of indigenous workers caused by declining birth rates.

The 1980 Census of Population of Singapore has outlined, among other things, the educational profile of our workforce. It has revealed that in 1980 Singaporeans were generally better educated than in 1970 and have enjoyed greater social mobility than before. However, it has also shown that we are still short of trained and qualified manpower because of the rapid expansion and diversification of our economy in the past decade. A startling feature that emerges from the Census Report is that we have more than half a million persons aged 10 years and above who were without any qualifications. Those with primary level qualifications accounted for 68%. The proportion, however, decreased with each higher level of qualification. The proportion with secondary and upper secondary qualifications declined to 19.1% and 8.8% respectively. Only 4.1% had tertiary qualifications.

Our economy is not going to move upstream and thrive unless there is a massive effort to upgrade our manpower at all levels. We have to embark on a planned programme to upgrade human skills. Workers who are not trained or who do not even have basic education remain part of the society. In the era of microprocessor technology and robots, what is to become of an unskilled, premature school leaver 20 years from now? To do nothing will be to create a social time-bomb.

Human resource development is, therefore, the number one priority in the agenda of manpower and educational planners, personnel managers and teachers. Inputs into the labour market are from the education system. If there is a large number of premature school leavers who do not even have a good basic education with a minimum level of literacy, the quality of the workforce will be lowered. The problem of producing a higher-quality workforce must, therefore, be tackled at source, that is, in our schools. I shall take up this subject of how we can reduce educational wastage when we debate the Education budget tomorrow. If there is educational wastage in schools, there is also manpower wastage in the workplace. Manpower wastage is like a withered plant. If you take a plant, put it in the wrong type of soil and do not water or fertilize it, it will wither and die. In the same way, a worker may be given a job not suited to him. The work environment may deprive him of an opportunity to develop in his workplace; the management-style may stifle all his initiative. Each individual worker has an untapped potential in him which, in a labour-deficit economy, we cannot afford to ignore. Instead, we should find ways and means to maximize his potential. What is needed, therefore, is for us to formulate a recruitment-to-retirement plan for human resource development to maximize the contribution of each worker.

As for a manpower training and development plan for those in the labour force, I would urge the Ministry of Trade and Industry and the Ministry of Labour to initiate a comprehensive study of the training needs of major industries. Relevant training programmes can then be formulated and the training resources required to mount them provided. The sudden upsurge of interest in manpower training and development, triggered off by the restructuring of the economy and the collection of skills development levy by Government in 1979, has generated a great demand for different types of training courses, especially those relating to management and to computerization. In response to this demand, various training institutions, including the National Productivity Board and the NTUC, are stepping up their training programmes. There is, therefore, a pressing need for some form of coordination and planning in our efforts to provide for the continuing education of our workforce. In this respect, I would like to congratulate the Ministry of Labour for planning to set up an Institute for Continuing Occupational Development to retrain workers and upgrade their skills.

It is a mammoth task to cope with the demand for professional renewal or skills upgrading. There are simply not enough training facilities and trainers. A far more efficient delivery system, appropriate for adult learners, must be used to replace the traditional system of training. The traditional chalk-and-talk method of teaching in a classroom is ill-suited for adult learners. Moreover, it can train only a limited number of workers at any one time. We are now automating, mechanizing and computerizing our industries to bring about an increase in productivity. Surely we can think of a more productive delivery system of reaching out to more trainees at any one time. One of the more effective and efficient ways is through computer-assisted, self-paced learning which can even take place in the home or the work-place. The shortage of good effective trainers can then be compensated for by well-produced video-taped programmes which make use of the expertise of a master trainer.

Government should also consider the certification or accreditation of courses that can lead to the award of a professional qualification. Credit points can be given for the successful completion of a course and the accumulation of a certain number of credit points will qualify the worker for a recognized professional diploma. Other incentives for workers to upgrade themselves should be examined, including time-off for retraining. Giving time-off for workers to undergo retraining is not an unreasonable proposal. It is not uncommon for management staff to do so. A manager is expected to spend time reading, thinking and reflecting. He has to find more creative and innovative ways of managing his company. Sometimes he has even to take study leave for this purpose because it is recognized that doing so would benefit the company. In the same way, giving workers time-off for retraining will, in the long run, benefit the company. Management must be enlightened to see and apply the benefits of retraining within the work environment. Perhaps study room facilities and other training resources can be made available in the company for the benefit of our workers.

With rapid obsolescence and the explosion of knowledge and technology, we can expect everyone to, need to undergo retraining several times throughout his working career. In the light of this, we can consider learning and retraining to be a life-long process. However, in the last analysis, I believe the onus of human resource development rests with management. No amount of training and retraining will benefit the company and the employee if management is unable to draw out the best from him. Management should provide both the motivation and the job enrichment to develop the employee to the fullest. What I am saying is that the key factor in human resource development is a management culture based on a sound philosophy of managing people.

Mr Speaker, Sir, on this note I support the Budget Statement.

Mr Yeo Toon Chia (Ang Mo Kio): ( In Mandarin): Mr Speaker, Sir, when the Minister for Trade and Industry made his Budget Statement in this House on the 5th March this year, he said that in 1981 despite world economic recession and mounting unemployment in the Western countries, our economy achieved 9.9% growth. This is commendable indeed. The new financial budget provides $12.44 billion for expenditure. This is made up ,of $5.59 billion for recurrent expenditure and $6.85 billion for development expenditure. Our estimated revenue for the year is $7.64 billion. This alone is more than enough to meet our recurrent expenditure and there is a surplus of $2.05 billion to boost our development needs. On the resources estimates, the Development Fund will provide $1.74 billion, leaving a shortfall of $3.06 billion to be met by the Development Fund. As long as our annual revenue is enough to meet our recurrent expenditure, our economy will be in a sound state, because the development expenditure will bring more revenue when the various development projects are completed.

Since we have achieved 9.9% growth in 1981, in 1982 we will have a surplus in our revenue to meet recurrent expendi- ture. Therefore, the Minister for Trade and Industry could, with justification, announce in his Budget Statement that for this year there will be no new taxes or any increase in existing taxes. There are only some minor adjustments in taxes with some concessions or marginal reductions. This shows that our economic policy has been correct, and what has been achieved has been the joint effort of our people. We should be glad about it.

Sir, the end result of this adjustment in taxes with some concessions is that people in the middle and lower income groups do not actually benefit much, while those in the upper income group benefit more.

In principle, I agree to the measure that compulsory CPF contributions should not be taxed just as the total CPF contributions withdrawn by a person on retirement at 55 years should not be taxed. But under the present CPF regulations the year-end bonus and other allowances are being taxed. However, there are some loopholes in the announcement that all CPF contributions will be tax free. Through manipulation, those with higher income will be able to pay less personal income tax. For instance, a person who is earning an income of $5,000 per month could arrange to draw $3,000 per month, thus paying a maximum CPF contribution of $660 per month, while the balance of $2,000 per month, totalling $24,000 for the year, will be drawn at the end of the year as bonus, for which he pays 22% totalling $5,280 as CPF contributions. This amount being tax free means that he could make $1,000 to $2,000 per year. In this way, those with higher incomes will be able to evade even more tax. Employees in the Government departments could not do so whereas in the private sector the people could arrange in such a way as to evade or escape payment of tax. This will result in a reduction in Government revenue.

Sir, in 1979 estate duty exemption limit for a house was raised to a maximum of $200,000. This limit was further raised to $600,000 in 1981. The result is that the rich who could possess two or more houses with a total annual value of not more than $600,000 would stand to benefit, whereas those in the lower income group may not have any dwelling worth such a large sum of money. So it is correct to plug this loophole. I would only agree with the principle that in land-scarce Singapore every family should be able to own a house for posterity as implemented through our home ownership scheme, and that such a property should be free from estate duty.

More than 70% of our population live in public flats. How can they benefit? They never aspire to live in a house costing hundreds of thousands of dollars which the rich can now better afford to possess or even excel. To these people who live in public housing and another 10% who are waiting for public flats, their only hope is that the Government will not increase the prices of flats by 30-odd per cent in one year, particularly when they are still waiting for allocation. Even the announced 10-odd percent increase in prices of flats annually hurt them sorely. They only hope that the Minister for National Development could build more houses so that they may be able to buy the cheapest possible flat with their CPF contributions.

Mr Speaker, Sir, on 3rd March, the Minister for Trade and Industry announced in Parliament that the salaries of Administrative officers will be increased by 22 % to narrow the gap of 40% between their salaries and those of the executives and professionals in the private sector in order to curb brain drain. However, there are more than 60,000 civil servants whose salaries are much lower than their counterparts in the private sector. Their salaries should likewise be adjusted from 1st April, 1982 so that the Government departments would not be functioning with only the head without any limbs to support.

Mr Speaker, Sir, with the low morale of the subordinate civil servants, how are we to encourage team spirit and to increase productivity? No wonder the people in the middle and lower income groups comment that what the Government announced earlier this month is only adding wealth to the rich and is not giving assistance to the needy.

Sir, despite the global economic recession, we in Singapore enjoy political stability. We have excellent facilities in trans- portation and communications and other services. We have able and trainable technicians and craftsmen with suitable education. In 1981, the total investments was $1.9 billion. It is also heartening to know that 32% of the $1.9 billion, or $610 million comes from local capital. This is a record and a highly commendable achievement. This goes to show that we do have enough capital from local sources and that we have now built up in the commercial and industrial sectors stronger confidence and better recognition in our industrialization programme. From the Economic Survey, we note that in 1979 local investments were only $120 million, being $12.7% of the total investment, while in 1980 it rose to $226 million, being 14.4% of the total, Last year it was as high as $610 million. This is a vast improvement over investments in the 1970s.

We must continue to encourage our local entrepreneurs to industrialize. The EDB and other Government agencies should also attach some importance to our local investors, instead of focusing all their attention on larger foreign investors. They should also find some way to encourage local industries to go into joint ventures with foreign investors so that we would be able to absorb their experience in production, technology, management and marketing. We must realize that local capital is important in our long-term industrial plan and needs protection.

No advanced industrialists will invest in Singapore simply because we are a beautiful garden city. They do their calculations. They will study the various tax concessions available and whether the investment climate is favourable to them. They must make sure that their investments are well secured and profitable before coming here to set up factory and start production. In the meantime, our neighbouring countries are also moving towards industrialization. They are also trying their best to attract foreign investment by offering all sorts of tax concessions and establishing a favourable investment climate. These foreign industries, as pioneer industries, are now enjoying a five-year tax holiday here. Therefore, to take full advantage of the tax holiday, these industries keep working day and night to increase their production so as to make as much money as they can, but once the five-year period is up, they will probably leave for other places which can offer them better terms. Only our local industries will remain and be rooted in Singapore.

Mr Speaker, Sir, from the Economic Survey, although our foreign trade in 1981 was over $10.2 billion, the growth was only 10%, whereas in 1980 the growth was 34% and in 1979 it was 32%. What a big contrast. It goes to show that our foreign trade is slackening. Perhaps, this is due to the fact that in 1981 the United States and Western European countries were facing economic recession. Their factories had closed down and many people were unemployed and they tightened their policy of protectionism. Domestically, we were affected by unfavourable factors, such as the appreciation of the strength of our currency and the rise in our bank interest. However, we should not be discouraged because of these setbacks. Our Trade Department should establish more offices overseas at important centres to collect trade data and introduce our local products to the foreign importers through trade expositions and also to introduce our trade delegations to meet the importers of the foreign countries so that our products could be marketed there. Take, for example, Japan. When they feel that their own productions are priced beyond competition, they would use their trade offices in the various major cities in the world to look for cheap industrial products from Western countries. They would buy the products and sell them to other consumer countries so as to gain a lot of foreign exchange for their country.

Our National Productivity Board should also conduct courses in international market survey and management so that we could cultivate our marketing talents to help our industrial products to gain entry into more foreign markets, and thus help our country to gain more foreign exchange and increase our economic fibre.

Mr Speaker, Sir, over the last decade the Economic Development Board has been doing a great job in attracting foreign investments to our country. However, they seem to have neglected the smaller manufacturers and enterprises in Singapore who are suffering heavy losses or meeting with great difficulties. Under our open economic policy, many multi-national corporations have set up factories and offices in Singapore. With the setting up of these factories and offices, they have also brought in a good number of medium and small trading and service companies. These trading and service companies are backed by the factories here. They are also enjoying certain incentives from the Government and the financial aid of their national banks. They are virtually like tigers with wings. They have strong capital and very advanced management know-how. They came here fully prepared and very soon many of our local traders and agencies here would be overcome by them. So long as these foreign companies know that they can make a profit in Singapore, they will set up offices here and take over the agency rights from our local traders and agents, so that all the hard work of our local traders and agents over the years are lost and they will suffer great losses.

Mr Speaker, Sir, for the sake of industrialization and our survival, we welcome more foreign investments into Singapore to help us industrialize and give our youths more employment opportunities as well as to impart to us more advanced technology from the more industrialized countries. This is a move in the right direction. But we have to take note that these foreign companies are competing with our local traders for the same type of business, thus undermining the interests of local traders, although it makes no apparent difference to our national trading system because foreign companies also have to pay 40% company tax. But, Mr Speaker, Sir, the question is whether these foreign companies operating in Singapore are really paying taxes on their profits? Are they paying taxes to our Government? This is a big question. When many of these foreign companies make a profit here, they send down their own personnel to become Deputy General Managers or departmental heads and paying them big salaries, overseas allowance, car allowance, housing allowance, personal allowance amounting to $10,000-$20,000 per month, when indeed most of the work is done by the local people. And the so-called Deputy General Managers or departmental heads spend their time on the golf course playing golf, the most expensive game. If these companies make further profit, they will arrange with their parent companies abroad to make expensive purchases from them. Some of these items are so expensive that it is hard to believe. They will open letters of credit through their national banks, thus channelling the profits made in Singapore into their parent companies.

Sir, while we want to learn the technology and production methods of the more advanced and industrialized countries and emulate the good examples and practices in their management, etc., we should also look at the other more seamy side of the coin and try to foster and protect our local investors and enterprises so that their investment growth can keep pace with our economic growth. This is our duty so that they will not be at a disadvantage.

Economic reports and forecasts from the various countries conclude that 1982 is a more difficult year for the world economy - the United States, United Kingdom, Germany and other Western industrialized countries are faced with mounting unemployment and economic stagnation or depression. Even Japan reports a great drop in their overseas trade in the last quarter. Thus for the first time in seven years Japan will not be able to achieve the targeted growth of 4.1% for the fiscal year up to 31st March. Faced with this difficult economic situation, it is difficult for us to expect another near 10% economic growth.

We should not rest on our laurels of our past achievements and be complacent. On the contrary, we should pull up our socks and prepare for rainy days. We should brace ourselves up, work together, make concerted efforts in order to brave the stormy seas. If we can sink or swim together, we will be able to weather the storms ahead and we will b? forging forward according to our charted course in our task of economic construction and nation building.

4.36 p.m.

Mr Ho See Beng (Khe Bong): Mr Speaker, Sir, I would like to share the sentiments as expressed by the Member for Ang Mo Kio in regard to salary revision for the Administrative and Professional Services in the Singapore Government service. The Minister has proposed that the salaries of the Administrative and Professional officers in the Singapore Government service be revised since their emoluments are much less than their counter-parts in the private sector. It is said that if Labour is worthy of hire, his wages must be commensurate with his duties and responsibilities.

In reply to my query the Minister stated that a similar study will be made for the rest of the civil service. I am astonished, however, that the Minister has singled out a small category of public employees for priority for this remedial measure, He has chosen to treat as second class employees the other thousands in Government 'Service who are also performing equally important duties and shouldering responsibilities at different levels.

Sir, unlike the private sector which is made up of thousands of individual businesses and organizations, the Government is like a massive machine. Its employees at different levels are all parts of this machine. If any part of this massive machine is defective, then the whole machine or organization is affected, and I need only to make reference to the famous poem about how a war was lost for want of a horseshoe nail.

For the past few years, political leaders, management experts and academicians have been pounding away on the concept of teamwork for efficiency and higher productivity. Teamwork has been declared as the essence of operational cooperation and increased productivity. This requirement has been rammed down the workers' throats week after week and month after month. They have been asked to respond at functions as members of a team so as to enable management to achieve productivity goals. It has been stressed that team-work and the resultant higher productivity are essential for our survival.

I regret that the Minister has allowed the impression to be created that he is more concerned with nurturing only the top civil servants and that he is prepared to reward them with higher salaries and other benefits while the majority of the Government employees are treated as aliens who have to wait indefinitely while the top civil servants condescend to look into their plight. It is illogical for the Government to exhort and preach to the workers the spirit of teamwork while it treats the same members of the team in a different way. These employees are more badly affected by inflation and the high cost of living. They deserve improved salaries and conditions of service even before the already well-paid Government servants get better terms.

Mr Speaker, Sir, I was extremely gratified at the Minister's response to the Member for Moulmein's suggestion that civil servants should be given a 14th month interim bonus payment while the Government studies whether it should remove the one month ceiling of such payments. The Minister's reply that he would pass the suggestion to the Finance Minister, of whom he is confident would consider it seriously, is most encouraging. Sir, there does not appear to be any reason why the Government cannot pay a 14th month bonus. Some Government trading organizations have made massive profits over the years. The Port of Singapore Authority, for example, made a profit of more than $200 million last year; and there is no reason why its employees should not share in the profit which was, in part, a result of their own higher productivity. This 14th month payment will be a special benefit to the lower income employees who find it difficult to make ends meet because of the present high cost of living.

Mr Speaker, Sir, the Budget proposals of the Minister for Finance have been generally welcomed by the articulate and have been described in the press as a "breather" budget. The Minister himself noted that, and I quote:-

'I hope that Singaporeans will not look on this Budget as an occasion for rejoicing but rather as a respite to enable them to consolidate and improve their position'.

Sir, I would like to ask: to whom was the Minister addressing when he said this? Was he speaking to the majority of the people in Singapore? Or was he addressing a small minority - the elite, those with high incomes?

Mr Speaker, Sir, there are generally five tax concessions, but in the ultimate analysis the three major concessions are obviously meant for the wealthier people, while the other two, which concern the public at large, are minimal.

The first concession relates to the removal of the $5,000 tax exemption ceiling on CPF contributions. Mr Speaker, Sir, how many people in Singapore have incomes which result in CPF contributions exceeding $5,000 per year? The number is comparatively small.

Mr Jeyaretnam: Hear, hear!

Mr Ho See Beng: The majority of the workers in Singapore will not benefit from this tax concession. It is clear that this concession will benefit those with high income; the higher income the greater the benefit.

The second concession relates to raising the estate duty exemption limit for one residential property from $600,000 to the full value of the property. Mr Speaker, Sir, may I ask: for whose benefit is this exemption? Already 75% of our citizens live in HDB flats and soon the figure will be 85%. It is clear that none of these flats are worth anything near half a million dollars, let alone one million dollars.

So for whom is the tax concession made? Certainly not the workers. It would seem to be for the elite - the small percentage who can afford to live in large bungalows or luxury flats.

The third concession relates to the total exemption of CPF balances from estate duty. It is difficult to believe that this concession gives any major benefit to the working class, because workers use a large part of their CPF to buy HDB flats. When they retire, their balances with the CPF will be so small that they will attract only minimal estate duty. The obvious inference then, Mr Speaker, Sir, is that this tax concession is for the benefit of those who do not live in HDB flats, in other words the better-off members of our community who own luxury flats, bungalows and semi-detached houses, etc.

The concession by way of the removal of the 10% tax on fixed charges in PUB bills for domestic refuse, etc, if computed in dollars and cents, is clearly minimal. And it may well be asked: why were these taxes introduced in the first place?

The tax relief for those who support their aged parents whose incomes do not exceed $1,500 per year is also illusionary. The relief has been increased from $750 per annum to $1,000; in other words by about $20 per month, and at the present time of high living costs the concession makes a mockery of the concept of filial piety.

Mr Speaker, Sir, I do not know if any one of our decision-makers, be he a top-echelon civil servant, politician or manager, has tried to live on $1,500 per year and whether he will agree that $20 per month will take care of the impact of inflation!

Sir, on the one hand the Government pontificates Confucian ethics and urges the younger generation to take greater care of their aged parents and senior citizens. On the other hand, the Government gives very little tangible encouragement to those who wish to do so. Responsibility for parents is part of Asian culture and such virtues ought to be fostered by visible support from the Government. The impression, unfortunately, is being created that the Government is only paying lip service to this worthy tradition.

Mr Speaker, Sir, I would urge that the Government should be more concerned about bread and buffer issues which affect the ordinary people, ordinary people who comprise the majority in Singapore. It is a source of great amusement to the workers of Singapore to be told that they are not so badly off financially, because last year inflation was not so bad and the high cost of living is progressively going down. I do not know where the Minister gets his facts, but if he really believes that the high cost of living is going down, he ought to have a talk with the working class, people who can hardly make ends meet.

Mr Speaker, Sir, our Government has a good track record since it came to power in 1959. It is committed to certain goals and it has kept its promises of 1959, It has provided housing, education and equal opportunities and employment, higher incomes, a better quality of life, etc. Very few developing countries can boast of such progress, but let us not lose sight of our ideals and objectives, and what we stand for.

Mr Speaker, Sir, notwithstanding my criticism, I would like to assure the Minister for Trade and Industry that the Budget will get my wholehearted support.

Mr Speaker: Order. I propose to take the Suspension now. I suspend the Sitting and will take the Chair again at 5.20 p.m.

Sitting accordingly suspended at 4.50 p.m. until 5.20 p.m. Sitting resumed at 5.20 p.m.