ANNUAL BUDGET STATEMENT

[Mr Speaker in the Chair]

Debate resumed.

Mr Lai Tha Chai (Henderson) (in Mandarin): Mr Speaker, Sir, although I am not an economist, from the viewpoint of an ordinary person I feel that the world economic development is not very optimistic. However, we are performing well. This is a fact that everybody knows. Since 1959, the Government has performed well. Whoever says to the contrary is talking nonsense. You can judge the present Government from any angle and by whatever standard. The Government of Singapore is at least compatible if not better than any other government in the world. The good performance is not only dependent on the good leadership but also on the efforts of our people.

The Budget Statement made by the Minister for Finance and Minister for Trade and Industry on the 2nd March provides tax relief for individuals and for certain private establishments. This is an encouragement to them to work harder. It is good. But I have to point out one thing. Other than encouraging the people to work harder through fiscal means, I feel the Government should also mobilize cultural forces to inculcate in the people a correct attitude towards life, and to imbue in them a keen sense of patriotism, so that most of our Singaporeans if not all would not become mercenary or ugly Singaporeans but gratifying and righteous and upright Singaporeans.

Talking about cultural forces, or the strength of culture, allow me to pick out the Singapore Broadcasting Corporation as an example. In November last year, SBC produced a Chinese programme called "Learning from Liew Weng Cheng". Sir, I believe you do not know who Liew Weng Cheng is. I also do not know who he is. Among our colleagues here, I believe not many of them know who Liew Weng Cheng is. However, I know he is a foreign male singer of popular songs. Sir, what puzzles me is why should SBC not encourage our people to learn from somebody like you, the Speaker of Parliament, who is an internationally well-known surgeon. Why would SBC not encourage our people to learn from our Minister for Finance, a young leader who has given up a comfortable life of a millionaire to take up the onerous task of managing the economy of a country? If it is a difficult task or a delicate matter for the SBC to portray political leaders for emulation, it can leave them alone as this may be a difficult and controversial matter.

Why can't SBC encourage our people to learn from those who are working in our port, those who do not sleep at night? Why does SBC not encourage our people to learn from our soldiers who protect our country and provide security to our nation? Why should SBC ask our people to imitate those fancifully dressed singers on stage and follow them to sing "You are my sweetheart"? Sir, of course, I do not mean you are my sweetheart. Sir, when I sit before the TV set and watch popular song programmes which have been bought from foreign countries, I am more lighthearted than when I see similar programmes produced by SBC out of money allocated by the Minister for Finance. Watching this type of local programmes makes my heart heavy. It is very heavily weighted down. Therefore, after the Minister for Finance has made his Budget Statement, I made a very careful study of the allocation for the Ministry of Culture. Only then it dawned on me how much the Minister for Finance had allocated to the Ministry of Culture and for SBC. It dawned on me that the sum allocated is too little, very meagre. Perhaps it is too little for SBC, so much so that the people in charge of SBC have to push out their chest and say, "If you don't give us money, then we will have to embarrass you and make you lose face", as the slang goes. Therefore, I hope the Government, while paying attention to economic development, could also emphasize cultural development and accord it equal treatment so that the people may realize that after having food, clothing, accommodation, transportation and work, they should be contented and should try to be thoughtful people who can look after their families and can help other people and can become upright and proud Singaporeans who could dedicate themselves to the country.

On this note, I support the Budget as the Member for Serangoon Gardens has done. 5.55 pm

Encik Othman bin Haron Eusofe (Geylang Serai): Mr Speaker, Sir, I rise to join my PAP colleagues in support of the motion standing in the name of the Minister for Finance and Minister for Trade and Industry.

Sir, to ensure our continued economic growth and prosperity, we will have to maximize the potential of our people by giving them adequate opportunities for training and development. How well they respond to the training opportunities available and how well our workers are motivated to give of their best will determine our future progress and prosperity. I am therefore delighted that the financial year 84 Budget will set aside a bigger provision for education and manpower training to expand the pool of skilled, technical and professional manpower required for the upgrading of the economy.

Mr Speaker, Sir, I like to touch on the Skills Development Fund which was established in 1979 with the following objectives:

(a) the promotion, development and upgrading of skills and expertise of persons in employment;

(b) the retraining of retrenched persons; and

(c) the provision of financial assistance by grants, loans or otherwise for the purpose of the abovementioned objects.

I feel that the Skills Development Fund should do more and utilize the vast resources it has to provide opportunities for workers to be trained and to enable them to be equipped with the skills which are required to operate the sophisticated equipment and machinery of the advanced technology industries which we want to promote in Singapore. The question is how successful is the Skills Development Fund in meeting the abovementioned objectives. The Fund's Advisory Council should endeavour to give the workers the opportunity to be trained as well as to motivate them to want to be trained.

Looking at the Financial Statement for the financial year 82-83, it is observed that the balance in the Skills Development Fund as at 31st March 1983 stands at some $336.1 million. This is an increase of almost 46% over the balance as at 31st March 1982. The amount of grants in the FY 82-83 amounted to $26.4 million or about 23% of the total levy of $112.4 million collected for that year. The $26.4 million is only 7% of the total amount of money with the Fund.

I believe that at present the Fund's practice is to got companies and employers to come out with their plans for skills training or upgrading of the workers and to disburse the funds on the basis of applications made for such training programmes or plans. Although the Fund is generous in providing financial support to employers and industry groups to enable them to undertake training programmes and to set up training centres, the response from them does not appear to be very encouraging. I feel that it is crucial for the Fund to play a more active and direct role in the training and skill development of our workers. It should not just sit and wait for the employers and the industry groups to come out with their plans for the training of the workers. There is no point for the Fund to continue accumulating funds. Instead it should work out plans to ensure how more of our workers will be provided with opportunities to receive skill training and upgrading. If it is necessary, it should implement training programmes directly. I would like therefore to ask the Minister to review the operations of the Skills Development Fund to ensure that more workers will have the opportunity to receive skills training and development.

Mr Speaker, Sir, the FY 84 Budget is a very positive one. We have had a good year because our workers have come out to work hard and they have contributed to the best of their ability. I am glad that the Minister has acknowledged the contribution made by workers. He has stated that they have shown that they have positive work attitudes and are more self-motivated and proud of their work. They have demonstrated the will to want to do things better all the time. It is therefore only fair that the workers should have an equitable share of the fruits of higher productivity. This will indeed motivate them to perform better. As we move towards more direct wage bargaining between the unions and employers, the Government must see to it that the employers are fair and that the workers will receive a fair share for the efforts they have put in to attain higher productivity. 6.01 pm

Dr Augustine H.H. Tan (Whampoa): Mr Speaker, Sir, our Hon. Minister for Finance must surely be the envy of his colleagues worldwide. One has only to look at Table I of the Economic Survey to look at the growth rate of OECD countries, Asean and selected newly industrializing countries, to realize that we are a top achiever except for South Korea with 91%. And even in 1982, a year of deep recession, we did 6.3%. This, of course, has been due to hard work, very wise leadership, with the blessings of God on those who help themselves.

In his Statement and in the Economic Survey, the Minister mentioned that consumer prices rose by 1.2% on the average last year, as measured by the cost of living index. In cols. 531-2 of section 1 of his Budget Statement he says, and I quote,

'The strength of the Singapore dollar is a reflection of the Government's prudent financial policy and the soundness of our economy.'

I believe, Sir, that this is a true statement and it is something which every economics student ought to know. In fact, I am telling people, my colleagues at the University and my students, that many economic textbooks need to be re-written. I hope to show you why with the following points.

The countries in the world which are in trouble typically have the following scenario: government expenditure on items which do not bring any return whatsoever, largely subsidies and welfare payments which rob workers cts their incentive to work hard; high income taxes to support those subsidies and welfare payments which rob entrepreneurs of their zeal to work hard and to reinvest, The result is ballooning government deficits, high inflation, high unemployment. And govern- ments got locked in to the system because subsequent governments dare not remove the social welfare system. Witness, for example, President Ronald Reagan in America, Prime Minister Margaret Thatcher in Britain. Both of them, I think, have the right attitudes and policies but they are unable to implement their policies fully. They would like to restrain government expenditure, as we have been successfully doing so here. They would like to reduce taxes; they would like to reduce social welfare payments and expenditures and costly subsidies, but the political constraints are too great because the whole system has been corrupted to the point where everybody has a vested interest in the handouts. So it becomes an impossible situation. I see a no-win situation for both of these leaders. The American budget deficit not only threatens the health of the American economy but it threatens our health as well, and the health of the world economy. That's how serious the matter is.

But looking at our own situation, Sir, if we look at the proportions of Government expenditure, we find that over the years that proportion devoted to development expenditure has been increasing. This coming year the proportion is projected to be 54% as compared to 43% last year. Furthermore, what is not mentioned at all in the economic textbooks is the type of government expenditures, development projects, which are very important. If you just build for the sake of building, Without thought to the economic return or viability of a project in later years, then you need to finance the cost later with higher taxes. Secondly, you are eating up social capital in the process. So one thing which we have done over the years is to ensure viability of projects, the ability of our development projects to pay for themselves in the future. That is why our Finance Minister is in the happy position of being able to give income tax rebates for a number of years now. A lot of credit is due to him but it is really credit due to his predecessors, to the entire Government over 25 years.

Some people may query about the deficit that we have, and it is projected that we are going to have a deficit of $3.9 billion this coming year. But here again, the deficit is more apparent than real because it is meant to finance development projects which will have economic return. And secondly, it is higher than what it is because typically revenue is under-estimated and expenditure is over-estimated. It is a conservative policy, and I think we should continue. The overall public sector, if we take all the statutory boards inclusive of the CPF, generates a substantial surplus from year to year. And that is a hidden surplus in the sinking fund provision. Every year I notice that what we budget for by way of sinking fund provision we end up doubling at the end of the year. That is hidden reserve, hidden saving, all to the good.

Therefore, Sir, it is no mystery that the Singapore dollar goes on from strength to strength because what the Government does to the entire budgetary policy, inclusive of statutory boards and CPF, is to ensure that we have net savings every year. And these net savings are salted away abroad in terms of foreign exchange reserves. The Monetary Authority is in a very happy position to intervene to keep the Singapore dollar from being too strong. It is easy to run the Monetary Authority of Singapore compared to the Federal Reserve in America when you have to finance real government deficits and print money to do so. That is a different job altogether. The rise in the US dollar is only temporary. Now the correction is taking place and it must take place in the future.

Another feature which we may note about our economy is the very high savings rate of 40%. The gross national savings rate is 40%. Many people complain about the Central Provident Fund. They complain that Government is taking their money out and they prefer to spend and to have more money. But look at what it is doing to our economy. Look at what we are able to provide in terms of pUblic housing. Even private residential properties are now financed out of the CPF. Look at the savings which are generated nationally by the CPF and a substantial part of the money is used by the Government to finance development projects which will be good for Singapore in the future.

So it is not surprising at all to me, when I look at these figures, that our inflation rate is low, one of the lowest in the world probably at this point,1.2%. I am surprised that the Minister made a statement that we have got to watch out about the domestic trends of inflation. I mean if any other Finance Minister had to cope with 1.2% rate of inflation, he will be euphoric. If any other Finance Minister had to present this kind of budget, the whole country will be euphoric. Can you imagine what would happen in Britain or in America or Europe, or any of those countries in depression or struggling out of their depression to have 7.9% real rate of growth and 1.2% inflation and over-full employment and having to import labour? We do not know our blessings when we see them.

This is something which I believe we must teach the younger generation of Singapore. These are the principles which we have learnt over the years. It is so important because, as I tell my students, if you, as economics students, do not understand the fundamental basis of what makes Singapore tick as an economy, what makes it so successful as an economy, then how can the public at large understand the whole process? Any other government is likely to look at the figures and say, "Well, we have got plenty of reserves. We have got plenty of savings. Let's spend and spend, and let's give and give." In next to no time, I think within three years or even in two years you can turn this whole economy upside down. If you do not believe me, look at France. President Mitterand upon his election decided to reverse all the policies of Giscard D'estaing. He spent. He gave higher wages. He gave higher welfare payments. He tried to create jobs by government expenditure, any expenditure will do, not just good types of expenditure, development projects, but any expenditure. Within less than two years, what has happened to the French franc? It has been depreciating all the time. High rate of inflation, unemployment is even worse than before. And any Frenchman wanting to travel today has got to pay a special tax, and he is allowed to take out only a minimum amount of foreign exchange. Do we want that kind of country?

Some hon. Members: No!

Dr Augustine Tan: If you and I had to travel, there is no limit to the amount of foreign exchange that we can take out. But look at even neighbouring countries. Look at the Philippines, the same story is repeated. Look at Brazil, look at Mexico. Look at those countries which are in tremendous debt. Why are they in such difficulties? They are in such difficulties because of wasteful government expenditure. An economics friend of mine recently said, and there is truth in it, that what a good government can add on to economic performance may be that little but what it can subtract may be that much. In other words, any government has the potential to destroy an economy, and it can add a little to the strength of the economy. So I say that our rate of inflation is nothing to worry about. There is no cause for alarm at all. But having said that, one also needs to look carefully at sectoral impacts to see whether the lower income groups, lower income workers, have been affected more than the other groups. That is something which we have to pay attention to, and I am sure the Government will do so.

Next, let me comment on productivity and manpower. Sir, my students understand what productivity is all about. And I have no difficulty with the concept. And I have faith in the figures produced. I am sure the Minister can justify. In section 1, cols. 503-4 of his Statement, the Minister said that productivity increased by 5%. I would just like to add some words of caution here - that we should not be too euphoric over that because there is normal gain in productivity during an economic recovery. I believe the Minister mentioned the hoarding of labour in the last year or so by various enterprises. So as an economy picks up without too much addition to labour, there would be a more substantial gain in productivity. At the same time there were a number of measures which help to increase productivity. First, the efforts of the National Productivity Board which make people so conscious that they even complain about it in this House. Secondly, the successful restructuring of manufacturing going into higher value added, higher technology products which imply higher productivity. Thirdly, the success of the programme to automate and mechanize; again spelling higher productivity. Fourthly, more realistic wage increases in recent years which help the labour market to adjust, which help employers to be more realistic in their employment of labour so that they are not too wasteful. In fact, here I feel that in terms of utilization of manpower there is a lot more that we can do. If you just look at the Establishment List of the various Government bodies and the Government itself, you find that there is a lot of wastage in manpower. Too many peons are being employed, for example. Too many clerks. Maybe some of these can be phased out over the years through automation and mechanization.

Then there have been substantial efforts at upgrading of our manpower. The Minister mentioned the doubling of output by tertiary institutions by 1985 and within a space of five to six years. This is commendable. One only hopes that the standards are properly maintained.

I have, however, a few suggestions to add to these efforts. Firstly, the Minister mentioned the BEST programme last year which trained about 22,600 workers in basic English language and Mathematics. This year he would like them to train 40,000. I myself believe that this is one area where we really need to accelerate our efforts because it is one thing to upgrade the schools and the tertiary institutions and the vocational institutes. That takes care of the young pupils - the additions to the labour force. But we have a huge stock of labour and I believe a figure of half a million was mentioned by the NTUC of people who are quite illiterate and not numerate at all. If that figure is really correct - half a million - then I think we should have a five-year programme to really give them the basic skills of literacy and numeracy. We can train 100,000 a year and I believe we can do it.

So far, as I read the Economic Survey, we have relied upon PAP kindergartens. We have relied upon VITB resources and so on. But why cannot we open the schools at night? Why cannot we make use of the teachers that we have, give them special allowances and get on with the programme? And I believe returns are going to be real because until and unless our workers who do not have these basic skills acquire them, they are not going to be able to upgrade in terms of other areas of training. They are not going to be able to look after the machinery well. They are going to spoil the machinery. In fact, one of the things which I observe about Singapore and other developing countries is the poor state of maintenance of machinery and of buildings compared to America and Europe. If you ever travel to these countries, you find that people have a better sense of maintenance, better dedication to maintenance. Here, we allow things to rust. We do not oil. We do not service as regularly as we ought to and mainly it is because I think the workers cannot read instructions and they are not taught to be careful about these things and a lot of wastage of capital occurs as a result. So I hope something can be done in this direction.

The second suggestion I have is for training centres to be set up for service industries. I know ons or two have already been set up for the hotels and so on. I think we really have got to do it much more comprehensively and aggressively.

Thirdly, as I look at the grants and the use made of the Skills Development Fund, I suspect that quite a lot of these programmes are really substitutes for on-going programmes. In other words, employers would have provided training even without the SDF. Now we are just giving them bonus, cream as it were. They do not really need the incentive. So what we really got to do is to use the SDF much more imaginatively in order to get the results that we want.

Now I come to the service sector. Sir, I have long argued in this House for attention to the neglected service sector in Singapore and I am glad that the Minister is finally giving attention to this sector. Firstly, we do not even have proper data about much of our services sector. If you do not believe me, look at all the figures in this Economic Survey. All the net invest- ment figures and so on pertain to manufacturing. But there is nothing said about services and yet we are building hotels. We are building a lot of things in the service area and, as the Minister mentioned, services account for 70% of our gross domestic product and 60% of employment and net exports account for $12 billion in 1982. So it is a huge sector and quite neglected in the past.

The Minister is suggesting in his Statement that there should be greater promotion of investment in internationally tradeable services. I would like to support that idea and I believe that as protectionism gains momentum in the developed countries, perhaps it is in certain types of services that we can go in and have a comparative advantage and so be able to bypass some of these protectionist policies.

I welcome his policy now to give accelerated depreciation allowances within three years for all industries, whether they are services or manufacturing, and I believe this will allow the markets to sort things out so that the more efficient will survive.

The Minister also mentioned the need for energy conservation and he pointed out the doubling of the rate of increase of electricity consumption last year to 10%. I would like to impress upon this House that we should not be fooled by the declining oil prices of last year and this year. I believe this is a temporary phenomenon. I believe that as economic growth takes place in the advanced countries and population growth world-wide, the energy problem will rear its head again. We need to pay special attention to this area, perhaps helping industries when they are in the process of automating and mechanizing to choose the most energy saving equipment. And I think we are at a good juncture where we can do this because of the various incentives that the Minister is giving out to various industries.

Then in the area of Research and Development, I believe that the efforts we have done so far are really not good enough. The Minister mentioned that $1.9 million was given to the Product Development Assistance Scheme and $18.6 million for 23 research projects. I submit to you, Sir, these are peanuts in the R&D game and I think we have got to step up efforts accordingly. We did not even manage to spend the $50 million block vote. Of course, there is a Science Park which the Minister made mention of and I hope that becomes a success. We really need to go all out to stimulate R&D consciousness in our firms in Singapore.

Coming next to tax changes. The reductions in personal income tax are generous. But the question is: Will these reductions lead to higher consumption, especially on motor vehicles? If it does, it will be defeating what the Minister for Communications is trying to do. I have a suggestion. It is not going to make me popular but I will say it. Why not retain such future tax savings for housing and for education for the children? In other words, Government gives it to CPF in a special account and allow the people to withdraw for their needs in these areas, because I believe that if we give money back to the people there is a high marginal propensity to consume.

I welcome also the reduction and simplification of estate duty. Yes, I agree with the Minister that this will encourage greater savings but what he did not say was that it would discourage flight of capital from Singapore. Those who feel they are due to die begin to arrange their assets out of Singapore, and by lowering estate duty we will help to prevent this. Furthermore, I suspect there has been very substantial tax avoidance in the past already through the setting up of foundations and trusts so that the really rich have gotten away with it and it is only the middle class who cannot got away with it that have been taxed. So I really support this move. In fact, I would think that we should abolish it altogether.

Thirdly, on the enhanced child relief. Here I find myself with a problem. While I agree that we should encourage people to produce more gifted children, at the same time I feel that too many Singapore mothers are neglecting their children and therein lies the problem for our future generation. When children are farmed out to nannies and to grandparents, I think they feel a lot of rejection, a lot of hun. They transfer their affection to their grandparents, even to their nannies. They acquire the values of their nannies and their grandparents. I have had occasion to counsel some parents who have got problem children. One of them came with a child, five years old, and said to me, "My daughter is telling lies." So I said, "Is your nanny a liar?" She said, "Yes." Of course, if your servant or your nanny is a liar, your child will be a liar. If your nanny speaks broken English, your child will speak broken English. There are no two ways about it. The mother is the person who is supposed to transmit values and attitudes to the children, and I believe that in our over-eagerness to get an extra percent or so of economic growth, we are really mortgaging our future in this regard. I would urge the Minister to think of a more imaginative scheme to allow our women to withdraw from the labour force for a few years while they bear and nurture their children. This is fundamental for the good of Singapore, for the future of Singapore.

Our homes in Singapore are not really homes. It takes a woman to make a home. But when the woman goes out to work and both parents come back tired, there is no proper home. Many men are married to hawkers or hawker centres rather than to women or wives because their wives do not cook for them. Many women in Singapore, especially those with tertiary education, despise cooking and housework. These are traditional values we should keep. I may be called a male chauvinist something or other, but I do not care. I want women who are mothers. I want women who are home-makers. I want women who will transmit the right values to their children.

An hon. Member: How many?

Dr Augustine Tan: One each. I have another point on the relief for parents and grandparents which I raised sometime last year in this Parliament but the former Finance Minister told me it was inappropriate at that time, and I would like to bring this to the attention of the Minister. We are allowing relief of $1,500 a year to a taxpayer for maintaining a grandparent, a parent or a great grandparent who is living with him. But there are two conditions which are rather onerous. First, the parent or grandparent concerned has to live with the taxpayer. Secondly, he or she has to have an income of not more than $1,500 per year. I believe that many retired people would have $15,000 to $20,000 in the bank and the interest on this would give a sum of $1,500 or more. Therefore, if people are honest, not many would be able to benefit from this particular provision. So I urge the Minister to do two things. One, to be more generous with this relief because of the old-age problem that is looming on our horizon for Singapore and, secondly, to remove those two onerous conditions. Perhaps a third one would be to allow relief even in cases where the parent or grandparent does not live with their children because it is not practical to do so.

On the tax increases, last year, Sir, I provoked the wrath of some smokers and drunkards when I commented on tax increases then. This year I do not propose to add to their increased tax burden by adding to their burden of guilt. In other words, there is no increase in the moral tax this year.

However, Sir, I do wish somebody could resite the Turf Club to an obscure corner of Singapore. If I had my way, I would abolish it. Many non-gamblers, like myself, are regularly inconvenienced by the traffic jams generated by the gamblers. I for one do not see why gamblers should have more right of way compared to non-gamblers.

By way of conclusion, Sir, the Minister is right when he says that the real way to combat protectionism in the advanced countries is to raise our productivity levels here in Singapore. But there are two other dimensions which I would like to draw his attention to. One is the quality dimension. I am afraid that as we look at Singapore goods, services and buildings, we find that the quality is somewhat wanting. I am sure you will agree with me as you look around. We can do something and we must do something about it. It will affect our competitiveness abroad because if we want to reach out to markets which are more durable, markets which are less prone to protectionism, then we must be able to compete on the level of quality.

The second point is that Singaporeans tend to have a very short mentality, a very short horizon - a get-rich-quick mentality. In whatever area that you look at in Singapore, this is true. People do not invest in goodwill. People do not invest in the long-term and that is bad for us.

Mr Jeyaretnam: Who is responsible?

Dr Augustine Tan: We just grab whatever we can. But we do not build up the reputation of Singapore and it is important to do so if we want to carve a permanent niche for ourselves in the world economy.

I agree with the Minister that there is an over-hang given by the debt problem of developing countries of US$810 billion. Nobody knows when that balloon will burst. I do not think it is going to be this year because it is election year in America. So I think things will be quite rosy this year. There is enough momentum. So I believe 1984 will be a better year than 1983 for us. I think inflation will creep up somewhat, maybe interest rates, towards the end of the year. But it is beyond next year or beyond this year that the problems lie because then the problems of inflation, debts and so on will come to roost within two to five years. We have got to face the music.

Finally, Sir, I was talking with a businessman and he mentioned that Singapore is not really well-known in America and, I believe, in Europe too. Hong Kong has a higher profile than we do. I believe that maybe we can do something to shore this up. People still get letters addressed as "Singapore, Republic of China." I believe that a little public relations campaign will help. 6.35 pm

Dr Chau Sik Ting (Thomson): Mr Speaker, Sir, like my colleagues before me, I would like to congratulate the Minister for Finance and Minister for Trade and Industry for a Budget that is welcomed by all.

Sir, technological and economic changes are taking place rapidly in the world today. World attention is now focusing on the economies of the Asia-Pacific region which are among the fastest growing in the world today and the high rates of growth are expected to continue into the 90's. The underlying strength of the whole region is that the economies are complementary to each other. Each country has its own potential for development based on its own strength and resources in different economic sectors.

We, in Singapore, have to map out our own economic strategy taking into account our limited resources. When we encourage and promote economic restructuring more than three years ago, there were strong complaints and discontent among the business sectors. Today the complaints have lessened. Our economic restructuring policies have proved correct. If we had not restructured, Singapore would be worse off, having had to face stiffer competition in the world market. With the restructuring we now see industries being upgraded and some are diversifying into other areas of technology. New investments coming to Singapore are also moving into new areas of skills and technology better suited to our economy. Our investments in human resources and in upgrading skills and education have now provided Singapore with a larger pool of skilled work force to manage and man our new industries. Sir, we are aware that we have made progress but such awareness will be enhanced if we could have a progress report on our economic restructuring programme.

As to our Budget, we are optimistic that it is going to provide the necessary impetus for our future growth. It is a progressive Budget. It encourages the creation of wealth and hence the production of a larger national cake so that everyone can have a bigger slice of the cake. Furthermore, the Budget encourages savings and discourages the break-up of family businesses and family units. In the past, because of the high estate duty, family businesses and family wealth are likely to be divided and distributed early to avoid such payments, leading to the disintegration of family businesses and family units. With the reduction of estate duty to the new 2-tier system, many family businesses and family units are more likely to continue for decades. This will encourage people to save, to accumulate savings, to work harder and to continue to expand their businesses. Moreover, a taxpayer has been taxed directly and indirectly throughout his life. He certainly deserves such a break when he is dying so that he can die in peace. In fact, I am in favour of the abolition of estate duty altogether. Sir, the generous reduction of income tax will, hopefully, have the same effect of encouraging hard work and greater enterprise among the individuals.

Mr Speaker, Sir, the benefit of enhanced child relief has been extended to married women with five 'O' levels. By so doing, our Government is not only sensitive to the pleas of Backbenchers but is, in fact, pragmatic in its orientation. The emphasis is on the importance of education which is the key to upgrading our manpower resources.

As can be seen clearly in the Budget, it has all the ingredients to make Singapore a better place to work and to live in. It gives a fair share to those who are prepared to work hard and are enterprising. We have laid a strong foundation for Singapore to progress and expand into the 90's.

Mr Speaker, Sir, I support the motion. 6.41 pm

Dr Ow Chin Hock (Leng Kee): Mr Speaker, Sir, I have no quarrel with the Member for Whampoa that we should revise our economic texts. Probably this can be our second joint research project.

In last year's Budget debate, Sir, I observed that the year 1983 would be a decisive year for the recovery of the world economy and our economy. It is fortunate that 1983 turned out to be a year of economic expansion, led by the upturn of the US economy. The US economy grew at a rate of 3.5% per annum in 1983 and is expected to grow at the rate of 4.5% in 1984. If this happens, and with the continuing expansion of our construction sector, financial sector and the business service sector, our economy will be able to perform even better in 1984, with the possibility of attaining a double digit growth rate.

However, we cannot be complacent. We have no control over factors which determine the external demand for our goods and services and the inflow of investment. Moreover, we have a serious domestic constraint, namely, labour supply. I have more to say on this in the Committee of Supply on the Ministry of Labour's Budget.

Next, let me turn to the first objective of FY 84 Budget, namely, "restraining the increase in Government spending". Every year a huge proportion of the public sector's expenditure goes to statutory boards. In 1983, the seven major statutory boards accounted for 73% of the total development expenditure and 32.9% of the current expenditure of the public sector. Since 1960, our Government has through our statutory boards successfully implemented industrialization and public housing programmes and provided social overheads and economic infrastructure. The success of the statutory boards in the early years has led to an increasing reliance on statutory boards as instruments of growth. The number of statutory boards has increased rapidly. The success of statutory boards was partly due to the greater autonomy and flexibility in their operations. However, the question is, "Should greater autonomy mean lesser accountability?" Of course, these statutory boards are accountable to Parliament through their Ministers in charge. Also, they have to submit their annual reports and accounts to Parliament. However, the policies of some large statutory boards, eg, HDB and PUB, have serious effects on the livelihood of our people. These statutory boards should be brought under the closer scrutiny of our Public Accounts Committee.

Further, the Government has also directly entered into the productive services through equity participation. The number of Government's fully-owned and partly-owned companies has increased from 47 in 1972 to 52 in 1983. In a small economy like ours, such enterprises may have crowding-out and pre-emptive effects. The Member for Rochore, the Member for Whampoa and the Member for Jalan Kayu have aired their concern over these effects. They suspected that State companies enjoyed certain advantages over private enterprises. It has been pointed out that State companies are subject to the test of market forces. In other words, they are not subsidized. Indeed, I find that some public enterprises which had not done well were liquidated. For example, Saber Air (1973), General Leather (1972) and Singapore Aquarama (1972). However, the failure of these State companies has raised a serious problem, ie "is the Government smarter than the market?" Further, a related question is: "are civil servants appointed to the boards of directors and/or managerial posts in State companies better than entrepreneurs and managers from the private sector?" These questions are related to the central issue of the role of government in economic development. Should the Government confine itself to the provision of social overhead and economic infrastructure and a legal framework for growth? To what extent should Government participate directly in industrial, commercial, transport and even farming activities? Has our Government interfered too much with the market forces? The Minister may like to comment on this.

Sir, let me comment on the tax changes. The accelerated depreciation allowance has been extended to cover enterprises outside the manufacturing sector. This will provide a greater incentive for enterprises to purchase newer and more efficient machinery and equipment. Computer and office automation equipment will continue enjoying the 100% depreciation in the first year. I wonder whether the Minister will consider extending a similar tax incentive to encourage automation and mechanization in households. Expenses on labour-saving equipment and appliances such as microwave ovens, dishwashers, washing machines and dryers can be made tax deductible. This will relieve working mothers of some of the labour-intensive household work and thus enable them to devote more time to their children. Sir, child care and education at home have no substitute.

Personal income tax rates have been revised three times since 1978. The middle income group normally enjoys greater tax deductions from such revisions than other income groups. This year's tax rate changes are no exception. It seems to me that our Government is moving our society towards a middle income society. In this year's Budget, Sir, the enhanced child relief is extended to benefit working mothers with secondary education. This shows that the Minister is receptive to ideas and suggestions by the PAP Backbenchers. But this scheme also has a mitigating effect on the resentment and anger of non-graduate mothers caused by the Ministry of Education's admission priority scheme for children of graduate mothers. Now, working mothers with middle level education should feel better. Those working mothers who do not qualify for the enhanced child relief incentive will still be unhappy. However, I believe it is easier for them to accept the enhanced child relief than the priority admission scheme. This is because the enhanced child relief benefits the working mothers themselves based on their own merits and efforts. On the other hand, only a small group of children benefit from Ministry of Education's priority omission scheme, not because of the children's own merits but simply because their mothers happen to be graduates.

Sir, you may recall that immediately after the Minister's Statement, we had 20 hours of heavy rain. We had a lot of rain water. Hence we had the headline on the 4th of March, "Dismal Morning After". Sir, I have been associated with the Speak Mandarin Campaign but I do understand Cantonese. "Water" in Cantonese also means money. So it is a good omen. May a lot of money be showered upon our Singaporeans, particularly our workers.

The Member for Anson likes to bring up the point about workers' contribution. He repeatedly asked our Minister for Trade and Industry to include this in his Budget Statement. Sir, it is to be expected that the Member for Anson is more concerned about form rather than substance. What is the point of having an acknowledgement or a few sentences in the Budget Statement on workers' contribution if our workers have no jobs? What we should be concerned about is the substance, ie, to achieve a high GDP growth, to make our GDP pie bigger and bigger over the years and also ensure that our workers have a fair share of the fruits of our economic development. This is exactly what this PAP Government has been doing over the last 25 years, long before the Member for Anson came in here. We do not need him to tell us what to do. 6.51 pm

Mr S. Chandra Das (Chong Boon): Mr Speaker, Sir, the Minister for Finance and Minister for Trade and Industry has presented to us what might be called as a "citizen's budget". I use the term "citizen" because there is something for everyone: across-the-board income tax cuts, enhanced child relief, simplified estate duty for individuals and several concessions to the corporate sector as well.

It also seeks to return the initiative for economic growth to the private sector, specifically the individual. It seeks to reduce Government spending, to encourage efficiency and productivity in companies and to reward individual enterprise and hard work.

Mr Speaker, Sir, the Minister reported that the world economy had emerged from its deepest recession since the Great Depression of the 1930s. The current recovery led by the US economy should continue to pick up steam while the West German economy looks set to serve as a locomotive for the West European economies.

The Singapore economy nosedived in the first quarter of 1983 but bounced back to register a real growth rate of 7.9%. The major sources of growth were basically two-fold: external demand comprising exports of goods and services and Gross Domestic Capital Formation. The exportled recovery accounted for a hefty 55% of the growth in total demand.

On the domestic front, Singaporeans enjoyed a higher standard of living while several countries were reeling from the effects of the recession. The real per capita income went up by 7.6%. Singaporeans spent more on video tape-recorders, television sets, home computers, electronic organs and other domestic labour-saving appliances. This is in stark contrast to the jobless and homeless millions not only in the developing countries but in the developed countries as well. By any reckoning, the performance of the Singapore economy has been creditable in 1983.

Sir, our economic restructuring is beginning to bear fruit. Computer and computer peripherals such as disk drives underscored the recovery of the manufacturing sector in 1983. In fact, Singapore is reported to be the largest disk drive maker in the world outside the United States. However, I have been told that the value added in the assembly of disk drives are relatively low. Perhaps the Minister might want to enlighten the House on new steps taken to encourage such foreign investors to increase the local content or increase the value added in Singapore. One possible step could be to encourage firms to set up their R&D and product development projects in Singapore.

Mr Speaker, Sir, much has been discussed about the financial and engineering benefits to be derived from the use of robots. According to the Economic Development Board, the number of robots in use in Singapore is still relatively small. Industrial robots were first introduced in Singapore some four years ago. Today, about 70 companies are using 220 manipulators and about 30 reprogrammable robots. These are mainly confined to parts extraction in plastic injecting moulding, welding, spray painting and die-casting industries. It is obvious that our industries have yet to reap the full benefits of robotization and automation. It is therefore timely that the Government has taken the initiative to set up a robot leasing company to expedite the dissemination of robots and automation equipment in Singapore. However, I would like to caution that Singapore does not unwittingly end up being dependent on robots from any one particular country which could then dictate the pace of our robotization programme.

Mr Speaker, Sir, last year I mentioned that we should watch the changes in overseas investment patterns arising from technological changes. In particular, falling cost of ICs, emergence of relatively more intelligent robots and automation equipment would together serve to equalize if not neutralize erstwhile comparative cost advantages in developing countries like Singapore vis-a-vis the developed countries. The latter, we must remember are both the sources of investment as well as our markets. With automation, as I had mentioned last year, low labour cost is no longer a key consideration in overseas investment decision of multi-nationals. Rather it is productivity and the skill level of our people. Thus far, we appear to be on the right track. We must carve out a niche for ourselves in the global economic grid. The most viable option at the moment appears to be what is generally called the "knowledge-intensive niche".

The Minister in his Budget Statement had identified one key area in what he called the "new internationally tradeable services which can make use of modern telecommunications and other facilities.' Mr Speaker, Sir, with due respect, may I suggest that we should now prepare Singapore to act as the "International Data Crossroad" or "Digital Crossroad" for the region and the rest of the world.

Briefly, Sir, we could act as the "transmission", "relaying" and "data processing" cross road for the masses of data and information criss-crossing within the ASEAN region, within the Pacific Rim countries and with the rest of the world. Without going into details, I would like to suggest some "new services" which Singapore can actively look into. The areas could be, firstly, "Knowledge Dissemination Services" eg, legal, scientific, medical and engineering data bases. Secondly, Current Information Data-Based Services eg, commodity prices. Thirdly, Time-Sharing Computer Services, and lastly, Third-Party Communications.

Mr Speaker, Sir, it is quite clear that the next frontier of our economic growth lies in the emerging computer and communications (C&C) technologies. It is therefore imperative that we push ahead in our general computerization efforts. The National Computer Board (NCB), the Institute of Systems Science and the System and Computer Organization in MINDEF are to be commended for carrying out joint research in software engineering.

Mr Speaker, Sir, keeping with our status as a global financial centre, various initiatives have already been taken to lead us into what is known as the "cashless society". All these measures are indeed very commendable. However, I would like to suggest that the relevant authorities look into the question of data and transactions security seriously. Any "break-ins" or"computer-thefts"would destroy public confidence in a cashless society. Perhaps the Minister could tell us what special steps are being taken to counter computer frauds.

Mr Speaker, Sir, I am indeed pleased to note that one of the central themes of this year's Budget is to encourage Singaporeans to work hard, better themselves, invest in new ventures and to take calculated risks.

Sir, with your indulgence, I would now like to point out what I feel to be a logical extension of this strategy. The Minister has returned the initiative for growth to the private sector and, in particular, to the individual working within a team. A team is essentially a grouping of individuals. The higher the quality of the individual Singaporean, the better will be the quality of the Singapore team. In this context, I would like to suggest that the Minister consider measures including financial incentives to induce Singaporeans to embark on self-improvement programmes and studies. Here, I am referring to the efforts taken by individuals to improve themselves without the aid of the State. Sir, individual expenditure for attending courses conducted by the National Productivity Board, the Singapore Institute of Management, the Marketing Institute of Singapore, cost of textbooks and other forms of study do not qualify for tax exemption. Perhaps the Minister might want to review this. I understand that tax relief is granted for approved self-improvement courses in countries like Germany, Holland and the United States.

Finally, Mr Speaker, Sir, this Budget does not impose any sacrifices on the ordinary working man. Yet, the Budget has been labelled by the Member for Anson as a "rich man's budget". Perhaps these advocates of give-away economics should look at the Budget in some of the OECD countries when Budget Day means more taxes and expenditure cuts on health, housing, education and social services.

It might be instructive for the Government to work out a "social wage" per capita, ie the total subsidy the Government spends on each Singaporean in terms of health, housing, education and other social amenities.

Sir, I support the Budget Statement. 7.01 pm

Encik Saidi Haji Shariff (Kaki Bukit): ( In Malay): Mr Speaker, Sir, first of all, I wish to put on record my congratulations to the Minister for Finance and Minister for Trade and Industry who tabled the Budget in the clearest and most precise terms. This is most encouraging. In his easily understood speech he showed how healthy the state of our economy was but at the same time he drew attention to what we should do in facing present and future national problems so that our economic growth will be more rapid and our standard of living will continue to rise. It is the objective of any sovereign nation to achieve high economic growth, full employment, stability in the prices of daily necessities, and continued democratic government for the people. We should be thankful that since achieving self-government and subsequently independence we have succeeded in realizing the said goals although there is still room for improvement. Our successes depended on two important factors - an enlightened government and a hardworking people. And we succeeded in spite of adverse external factors over which we had no direct control.

The primary task of a democratic government should, firstly, be to give serious attention to the well-being and welfare of the people so that they will be able to live in peace and happiness. This fundamental responsibility of the government calls upon it to take firm action to ensure that every citizen will be a healthy individual and useful to the nation. In carrying out this task the government will, no doubt, face various problems. No government, no matter how good and efficient, is in a position to grant absolute freedom to its people. However, this does not mean that the government should not give freedom to the people. But it should be a limited and relative freedom subject to observance of public interest. The limitation of freedom requires the existence of laws and regulations essential for progress and advancement that are necessary in order to satisfy the people's basic needs.

In order to ensure the continued existence of a good, clean and sensible government, the involvement and participation of every stratum of the population in the implementation of development programmes and projects for the benefit of the people and the nation is necessary. Between the government and those governed there should be complete rapport which had put us in good stead in the past, enabling the government to so successfully implement projects to satisfy the people's basic needs. The first priority of a good government is the implementation of projects that will promote the well-being of the people. Human values should be acknowledged and advancement must be sought for the people if the government concerned wishes to make a claim of being a good and efficient government.

The fact that the people and the government have been playing their respective roles appropriately in this country is evidently seen in the economic success that we now enjoy. Symbiotic relations and effective communication are very necessary if government policies and actions are to be clearly understood by the people. Government policies such as economic restructuring, bilingualism, higher productivity, streaming in the education system, good employer-employee relationship, school admission priority for children of graduate mothers, higher road tax and vehicle registration fees, and TV licences directly affect every family in our society. The government wishes to see positive reaction and full support from the masses to ensure the success of these policies.

The people's attitude depends on their knowledge and understanding, although many are ready to give their views on national problems without first obtaining adequate information on them. What is most dangerous is wrong understanding or confusion in the minds of the masses in respect of the government's motives coupled with the presence"of irresponsible circles who try to confuse the issues the nation is facing. Effective communication with the grassroots is essential if we are to produce the type of society that we want, Grassroots involvement in the solution of national problems should be encouraged and widened so that the government's policies and actions would be accepted by the people, although some of them may be unpleasant as they require personal sacrifices. Meetings and discussions are necessary not only in parliament but also at grassroots level among community leaders, before decisions are taken on the implementation of any policy by any ministry so that an awareness will emerge that the people are directly involved with policy implementation for their benefit and in the interest of the nation.

In a democratic society, the process of government is determined by the majority of the people. Education should be used as a vehicle to enable the people to be involved in the process of government. An educated person will be more aware of not only his rights but also his responsibilities as citizens. Knowledge of current affairs and political education should be made an important part of the school curriculum so that students in their schooldays will be equipped for their role as useful and responsible citizens, prepared to be involved in the process of governing his nation. In addition, community leaders at the grassroots level should also be educated on government affairs and civics. All branches of the mass media can also play an active role. They can help to increase the number of people who are prepared to got involved. What is most important is that our people must be given sufficient and clear information on national objectives so that they can be translated into appropriate decision and action for the sake of national progress and the people's advancement.

At the end of his speech, the Minister for Finance and Minister for Trade and Industry said that we were facing serious problems of shortage of labour. The number of foreign workers must be reduced if we are to succeed in economic restructuring. This means we have to raise our productivity further. So we must continue to work hard in order to raise our productivity. That is why the Government has allocated large sums of money for training and education to produce more skilled manpower and to promote better employer-employee relationship. It is hoped that apart from the incentives mentioned in the Budget, a number of actions would be taken to provide other incentives so that workers would be encouraged to continue working under the concept of life-long employment. Training and education for workers should be made a compulsory condition for employers for the sake of a bright and secure future for all workers. Only with the upgrading of the quality of employers' management can workers be encouraged to work hard with undivided loyalty that is required to increase productivity.

On that note, I wish to record my support to the Budget Statement tabled by the Minister. 7.09 pm

Mr P. Selvadurai (Kuo Chuan): Mr Speaker, Sir, it is a simple straightaway Budget that the Hon. Minister has presented to this House. This was only possible because of the sound health of the economy and the less one tinkered with it through State intervention the better. Incidentally, the success that the economy has been registering year after year despite the world recession bespeaks the correctness of the economic strategy we have evolved since 1965; and the essential soundness of the proposition that in economic matters, having defined the targets and objectives of development and growth and having provided the incentives, it is better for the people to be left alone to go for their gains stands vindicated.

With the wealth thus created, one would have expected all areas of human distress to have been ironed out of our social fabric; but this is not yet the situation and increasingly one becomes concerned with the condition of the unemployable aged. It is not difficult to see that Singaporeans, like those of other affluent countries are fast becoming an aging population. Hitherto, the convenient assumption on which we had proceeded in this regard was that the problem of the aged must be solved by and within the family system evolved over many centuries by the Eastern civilizations. Hence, the latter day emphasis on values like filial piety and other aspects of the ethic that is concerned with the integrity and happiness of the extended family; in other words, the 2-tier, if not, 3-tier family.

Hon. Members would no doubt know that in the Singapore context, due to the impact of many factors, including, in particular, the physical environment in which the future generations of Singaporeans would grow up, the preservation of the integrity of the extended family system generally would be an impossibility and the enormous problem of caring for the aged would be upon us sooner than later.

This is a matter that successive Budget proposals have glanced at from time to time and made symbolic gestures of recognition but no conceded effort has been mounted to attack the problem in perspective in the manner in which the question of the genetic health of our society is being dealt with today. I would urge a good look at our social system in its totality by the time of the 1985 Budget proposals, and this brings me to the debate that has been generated in Singapore by the statistics that forecast the genetic profile of Singapore.

A close colleague put the problem thus: You have the situation in, say, the 1-room apartments with each family having three and four children and more, all growing up in the environment of those flats; and set it against the situation in the HUDC apartments where the only child per family is the centre of the universe of its parents. The national imbalance in the qualitative development of our people becomes apparent. The objective then must be to invite the HUDC families to have more children. Hence the enhanced child reliefs proposed by the Minister. Put in this way, shorn of all biological implications on which scientists are in more than two minds, the problem becomes intelligible and does cause concern. Why then the tardiness in the reliefs given? Why the limitation of the reliefs in each case to a maximum of $10,000 when the loss to revenue is only marginal? Further, why are the reliefs confined to married women only? Why not married men as well? There is no logic in the discrimination.

Sir, apart from these observations which I have made, I have no other critical remarks to make on the Budget proposals and I support the Motion. Before I sit down, however, I should say a few words apropos the amazing propositions about the requirements of parliamentary democracy advanced in this House by the hon. Member for Anson on the 2nd of March.

The record of the Workers' Party in supporting parliamentary democratic norms and traditions has not been an unsullied one, to say the least. Its role in the politics of Singapore has been that of a maverick and its present-day reincarnation in the shape of the hon. Member for Anson has only added to the confusion.

Mr Jeyaretnam: On a point of order, Mr Speaker, Sir.

Mr Selvadurai resumed his seat.

Mr Jeyaretnam: Mr Speaker, Sir, if the Member for Kuo Chuan wants a debate on parliamentary democracy, I am ready to take him on. But in this debate, we are talking about the Budget, Mr Speaker, Sir, and you reminded me of it. So I trust you will remind the Member for Kuo Chuan -

Mr Speaker: I will do so, now.

Mr Jeyaretnam: - that we are talking about the Budget.

Mr Speaker: Let him continue.

Mr Jeyaretnam: But if he wants a debate on parliamentary democracy, we can meet outside if he likes.

Mr Selvadurai: Thank you very much, Sir. It is a fairly important point which the Member for Anson -

Mr Jeyaretnam: I want a ruling from you, Mr Speaker, Sir.

Mr Speaker: Do carry on with the Budget debate, Mr Selvadurai.

Mr Selvadurai: I was saying, Sir, that the hon. Member was no doubt learning his politics the hard way and he should not expect the PAP to make things easy for him for we must continue to serve the national interest.

The Workers' Party is desperately in search of a cause in a Singapore where all the serious causes are already being dealt with by the PAP. So it must have been an act of frustration for the Member for Anson to have virtually asked PAP Members of Parliament to turn against the Government, and he quoted passages from the published opinions of Lord Hailsham and Sir Ivor Jennings. As the quotations, in the manner in which they were presented to this House, did not ring quite true, I decided to look up Ivor Jennings' book on Cabinet Government and discovered some pearls, which I should share with hon. Members. Contrary to what the hon. Member for Anson had asserted -

Mr Jeyaretnam: He does not touch on the budget. I said if you want it, then you will have it.

Mr Speaker: That is fair. Mr Selvadurai, stick to the Budget debate and do not deviate.

Mr Selvadurai: Just for the record -

Mr Speaker: No. You have got to debate on the financial policy of the Government for the financial year.

Mr Selvadurai: As you please, Sir. I support the motion, Mr Speaker. 7.17 pm

Mr Rohan bin Kamis (Telok Blangah): Mr Speaker, Sir, I rise to join my colleagues to support the Budget that has been presented by the Minister for Finance. It is a good Budget that brings cheers and not tears to the populace. I cannot imagine that anyone could possibly find any critical fault with such a Budget unless he is trying to nitpick.

To me, what is more significant is to look at the Budget on a macro scale because this year's Budget, especially the reduction of personal income tax, is the concluding pan of a four-part mini series beginning in 1980. Let me explain. In the Budget Statement of 1980, the Government boldly proclaimed that, and I quote:

'The aim of the Government is to reduce the levels of personal income tax in the next two to three years until the maximum effective rate is no more than the company rate of income tax, i.e., 40%. Then there will be no advantage for people to set up companies from which they draw low salaries for income tax purposes, whilst the bulk of their needs are paid by the company whose profits carry only 40% company tax. Such a reduction will be fairer on those wage earners who cannot hide their incomes, and on those professionals who cannot incorporate themselves into private limited companies because their professions disallow it.'

Sir, it was difficult to imagine any other government then in the face of impending world recession and slow growth being able to boldly promise that it would reduce the levels of personal income tax. We did so, and more important we delivered the promise. The inflation rate has been kept low, the standard of living has improved while the cost of living checked. All in all, that the population has benefitted, nobody could deny. If I may be allowed to paraphrase the words of a certain man: "We are better off today than we were in 1980."

The current Minister for Finance and his predecessors have no doubt guided the growth of Singapore's economy with the welfare of its people in mind through their prudent fiscal policies. Here, I would like to mention what he did in one of his Budgets a few years ago with regard to Government funds on loan to Sentosa Development Corporation (SDC). He knew that Sentosa should be developed, and develop it did, for the enjoyment of Singaporeans and tourists. In this respect, Mr Speaker, Sir, I must declare my vested interest because Sentosa is in my constituency although its facilities, amenities and attractions are enjoyed by people outside Telok Blangah and even outside Singapore.

A couple of years ago, the then Minister for Finance did a noble thing, and that is, with a stroke of his pen he convened nearly $100 million from a loan into a grant for SDC. He knew fully well that SDC could not pay back even the interest on the loan, not to mention the loan itself. However, he must have done it because it is a social obligation which the Government proudly accepts for the good of its people as well as to assist in the promotion of the tourist industry. That is why Sentosa island as well as its surrounding islands have been well-developed rapidly, much to the enjoyment of everybody.

I hope, Mr Speaker, Sir, that the same pen which the Minister for Finance used to convert the $100 million loan into a grant has still more ink because I am appealing to him in the same light for his future Budget to consider the plight of the Singapore Sports Council (SSC), that is, to convert the outstanding loan of about $16 million for the construction and improvements of the National Stadium into a grant.

In this instance, sir, the National Stadium, taken on its own, is a necessary social infrastructure in the promotion of sports in Singapore. It is used solely for the enjoyment of our population. I understand that the National Stadium has been cost-effectively run since it was built. Whilst it has produced sufficient surpluses for many years in order to service the $16 million loan, surely this is too big a burden for the SSC to bear. It is said that flowers do leave fragrance in the hands of the giver. So bearing in mind the noble objective of the SSC and the dedicated people running it, they would certainly appreciate very much a bouquet of $16 million grant. I could go on but I would not because I know that the Minister for Finance is a man not only with a good head but a heart to match. He has noted my point by the look of it, especially when he is fully aware that last year the SSC has again asked for a moratorium on the outstanding interest payments.

As can be seen from his Budget this year, the Minister is in a generous mood because Singaporeans have worked hard under the guidance of his fiscal policies aud have made the grade. For this reason, if he wants to give us a bonus, I would further appeal that he reconsider the request to build a decent indoor stadium in Singapore, one that we could all be proud of. If we could condemn a building such as the National Theatre because its structure is unsafe, I would suggest that the same engineers take a good look at the Gay World indoor stadium. Surely it should have been condemned a long time ago not only for its structure but also for its social disadvantages, especially when Singapore is known to be doing things in good taste and high standards. I understand that one of my colleagues would be speaking later and presenting his case on this matter of a new indoor stadium under the appropriate Ministry.

Sir, once again, I support the Budget and I do hope that in next year's Budget, my requests would have been favourably considered.

Mr Tang See Chim (Chua Chu Kang) rose-

Mr Speaker: Mr Tang, you only have five minutes. 7.25 pm

Mr Tang See Chim: Mr Speaker, Sir, I will try to meet your five-minute requirement. I just want to offer one small comment on the Finance Minister's Budget Statement. This is on estate duty. I feel that the Minister has not gone far enough. In simplifying the estate duty structure, the Minister has gone a long way in meeting the criticism that estate duty encourages consumption and discourages savings, but he has left unanswered the other areas of criticism against estate duty.

The loss of revenue as a result of the simplified structure of estate duty was estimated by the Minister at $22 million. The estimated revenue from estate duty for the financial year 1984-85 is $26 million. This is against an estimated revenue collection from direct taxes of $4,598 million. The estimated collection of estate duty works out to 0.55% of revenue from direct taxes. For this small percentage, the Government has to maintain the whole implement of estate duty collectors. Furthermore, all the annoyances and frustrations connected with estate duty still remain.

Estate duty is charged from the date of death, and on death interest at 3% is chargeable. This gradually goes up but it is 3% from the date of death. Yet at that date, the Commissioner of Estate Duty does not know what is the duty he is going to charge. Nor is there anyone who has the power to pay the estate duty even if the Commissioner of Estate Duty knows how much he wants because the deceased's estate is frozen on his death and nobody can touch that estate until the court grants probate or letters of administration. Furthermore, the whole process of tedious examination of the assets of the deceased in order to arrive at the estate duty payable will have to be gone through and t.hat takes time. In the meantime, interest is supposed to be payable.

The court cannot grant probate or letters of administration until a certificate from the Commissioner of Estate Duty certifying that estate duty has been paid or that it has been postponed. Therefore, irrespective of the rate of estate duty, so long as there is estate duty, all these tedium, annoyance and frustration will remain. If, therefore, there was a case last year for the abolition of estate duty, as the Minister admitted there was, I would submit that the case is so much more cogent this year. So why do we not do away with estate duty altogether?

On the question of enhanced child allowance, Mr Speaker, Sir, I wonder whether the Minister has any statistics to show that enhanced child allowance does encourage married women to come out to work. Personally I think it would be a much better inducement if a nurse maid was offered for every qualified married woman who continues to work. Offer her a nurse maid to look after the child.

Apart from these two points, Mr Speaker, Sir, I support the Minister's financial statement. 7.28 pm

The Minister for Finance and Minister for Trade and Industry (Dr Tony Tan Keng Yam): Mr Speaker, Sir, I would like, first of all, to thank all the hon. Members for their kind compliments on the Budget and for their valuable suggestions and comments in the Budget debate. I have about half an hour left in today's session, so I shall not be able to cover all the points that have been raised today.

In preparing the Budget this year, I cast my mind back to 1983 on how the form of the 1984 Budget would have been if the apprehensions which we had early last year have come to pass. Contrary to what many people may think, Finance Ministers do not have a completely free hand in framing budgets. They are constrained by the circumstances of the previous year and what they might reasonably look forward to in the coming year. As I said in the Budget Statement, last year 1983 was a good year for Singapore. But 1983 is 1983. It is past history. We are now in 1984 and as the Americans say, "We are in a new ball game."

The 1984 Budget, therefore, is a forward-looking budget. It seeks to prepare 'the ground for our further economic growth, for our further social growth in the coming decade. In the corporate sector, I have proposed a number of measures which are designed to reflect the present diversity of our economic activities and which I hope will lay the groundwork for our economy to build on in the rest of the Eighties.

As regards personal taxation, the revision of personal income tax rates which I announced this year completes the process which was first initiated by the late Mr Hon Sui Sen in his 1978 Budget. My colleague, Mr Goh Chok Tong, advanced this process considerably in his 1980-81 Budget, and I am happy that economic circumstances this year have enabled me to finalize this phase of our tax policy. In a way, Mr Speaker, Sir, the revision in the personal income tax rates throws light on one of the major strengths of economic management in Singapore, and that is, we are able to plan ahead four, five, six or ton years ahead. Then depending on circumstances, step by step, implement these measures until we reach our final destination. This, I believe, is responsible in a large pan for the success of our economic management.

As for personal income tax rates, so also for estate duty. Many Members have brought up this subject again, including the Member for Chua Chu Kang. Now, in theory, estate duty is the fairest tax. When you die the State takes away everything. Everyone starts with a fresh slate. In practice, estate duty falls heaviest on the mid- dle income group. It is very easy not to pay estate duty. I will tell you how. All you have to do is incorporate a private limited company, distribute shares to your wife, children, your other beneficiaries but retain a sufficiently large minority share holding so as to enable you to control the disposition of your assets. Then you are safe. When you die the assets will remain with your family and those whom you wish to benefit rather than benefit the State. The trouble is that this avenue is most easily exploited by those who are wealthy and those who have the capacity to engage tax lawyers and accountants. For the middle income group, they are the people on whom estate duty falls the heaviest. I hope that the simplification of estate duty which I have introduced in this Budget this year will make it unnecessary, as I have said, for the vast majority of our taxpayers, particularly the middle income group, to worry about estate planning. They will be assured that when they die their dependants and their loved ones will be well looked after.

Now, as might be expected, the proposal to improve the enhanced child relief brought forth a large number of views and comments from various Members, including the Member for Serangoon Gardens, the Member for Whampoa and the Member for Kuo Chuan. Some Members have praised the proposal. One or two felt that it was too little and too late. I also get the impression that some Members feel that the Government is a little bit confused and does not know what it wants: whether educated women should stay at home, have children, bring up their families, or go to work and contribute to the economy. The answer is, of course, we want both. And it will certainly not be disadvantageous if our proposals also highlight the value of education.

Now, to extend the enhanced child relief to all working mothers would be to defeat our purpose of sending clear signals to our population. So we have got to steer a middle line. We cannot be so strict as to limit it to a very small group. We cannot be so generous so that it becomes another form of child relief.

The Ministry of Finance together with the relevant authorities, the Ministry of Education and the PSC, will be drawing up guidelines to see what are the qualifications which would be equivalent to five 'O' levels. The guideline which I have given them is to steer between the two extremes: on the one hand, not to be so generous that every working mother gets the relief on the other hand, not to be so strict that only people with exactly five 'O' levels get the relief. Somewhere in between the two extremes should be acceptable. I hope that the enhanced child relief will go a little way towards recognizing the contribution of those mothers who are educated and are working and still managed to bring up their children. But I think it would be too much to expect that the enhanced child relief is the magic answer to the Great Marriage Debate. I think the measure is worth trying and I hope that it may perhaps turn the balance for some women when they are considering whether or not to have a second or a third child. But to expect more than that is to deceive ourselves.

Now, as regards the matters brought up by hon. Members, again it is somewhat difficult to draw a line between those matters which should be brought up in the debate on the Budget Statement and those which should be discussed in the context of the votes for the particular Ministries in the Committee of Supply. Nevertheless, I shall try to touch on as many matters as possible in the time that is left, and if I have left out some matters, well, this is the first day of the debate and there are seven days left.

The Member for Serangoon Gardens has brought up the matter of enhanced contributions to the Central Provident Fund. He has said that nowhere in the Budget Statement is it mentioned whether we are thinking of increasing the CPF contributions and if so, whether this will cut into the take-home pay. I have not said much about the CPF nor whether we shall bring it up or down because that is really the prerogative of the Minister for Labour. However, I am sure that at the appropriate time he will make a proper assessment and make it in such a way that workers' take-home pay will not be decreased.

The Member for Kebun Baru has suggested that we should give some tax incentives to encourage companies to set up child-care facilities. I agree with the Member that one of the main problems faced by many working women lies in the area of adequate child-care. There may be a reason, on the surface, to consider some tax incentives to encourage companies to set up child-care facilities for their staff. But we have to be careful about this because the cost of looking after children, for child-care facilities is not cheap. We want to be sure that we are not incurring a greater economic cost in setting up the child-care facilities so as to enable the women to go to work and earn a wage which is somewhat similar to the actual cost which is incurred in looking after the children in the child-care facilities. So this has got to be worked out. I think that where the working mother does not earn much more than the cost which is incurred in having a child looked after in a childcare facility, then it is probably better that she remains at home to look after her children and bring them up properly.

The Member for Jalan Kayu stressed the need to encourage the growth of entrepreneurship in Singapore. It is, of course, true that entrepreneurs are not in great supply in Singapore. However, this is not limited to Singapore. This is not unique to Singapore. Entrepreneurs are in short supply everywhere. The qualities which make a person an entrepreneur are somewhat difficult to define. But, of course, the results are easy to recognize. Why do people become entrepreneurs? The reason is simple. They want to make a lot of money. The main motivation which we have given them, the main spur, is to try and design the tax structure, the structure of personal income tax, estate duty, so as to enable them to make a lot of money and then pass it on to whoever they want. HoWever, the Government can play a role in helping to build the infrastructure so that those of our citizens who have got the spirit of entrepreneurship can take advantage of it. Here, I am not as pessimistic as the Member for Jalan Kayu because several of our Singaporeans have struck out on their own and have become very successful. Notably, I must say that many of the graduates of the EDB training centres, after working for a short spell with the multinational companies, have started their own supporting companies and are doing very well indeed.

We will continue to make available such incentives and support, such as the Product Development Assistance Scheme, the Skills Development Fund and the Small Industries Finance Scheme in order to make sure that where finance is needed, it will be made available to those of our citizens who would like to start their own companies. But beyond that we cannot force people to become entrepreneurs. I hope that there are enough Singaporeans here who still retain the urge to be rich. This is the best way to foster entrepreneurship in Singapore,

The Member for Alexandra has commented on the drop in tourist arrivals and asked what the Singapore Tourist Promotion Board is doing about it. Well, many things. First of all, the Singapore Tourist Promotion Board has restructured its marketing strategies so as to target at those countries that have recovered or are recovering from the recession. It has also worked more closely with the private sector in order to refine its role of tourist promotion. It is exploring new markets, for example, the Scandinavian market and the Canadian market to boost tourist arrivals to Singapore.

Then again, in the area of conventions, the Singapore Tourist Promotion Board is aggressively marketing Singapore as a prime convention destination. In 1983, the number of convention-type events increased by over 50% and the Singapore Convention Bureau is aggressively bidding for bigger meetings from 1985 onwards when we will have proper convention facilities in Singapore, for example, in the Raffles City complex. Some of these conventions are, for example, the American Society of Travel Agents in 1986, the World Congress for Food Science and Technology in 1987, the 12th World Congress on Fertility and Sterility in 1986 and in 1985 the International Bar Association Business Law Meeting.

Again, overseas promotion trips will be made in order to sell Singapore as a prime convention destination in the major markets of the United States, Australia, Europe and Asia.

I would like to say a word regarding the comment from the Member for Geylang Serai on the importance of the development of our human resources. I cannot agree with him more. It has always been the policy of our Government to ensure that everyone is trained to his or her full potential. Unless our people are trained in the right skills, in the relevant skills, economic restructuring is not possible. In the last few years, therefore, we have made a great effort to revamp our educational and training institutions and expanded their operations to ensure that every Singaporean will possess the right skills in order to enable him to find a job in the type of economy which we are developing. This means that the training curriculum has to keep pace with the advancement of technology. And here the Skills Development Fund is trying to emphasize employer-based training. It is trying to stimulate more employers to undertake comprehensive training schemes rather than ad hoc training schemes. Where the company can put forward a training programme which will benefit all its employees on a long-term basis, then the SDF is prepared to fund this training programme in advance rather than on a piecemeal basis.

The SDF will also support employer-sponsored training programmes even when this is not directly related to the job but where the programme will develop the potential of the staff and prepare them for advancement. The programmes also need not be initiated by the employer. The employee can initiate the programme but it must have the endorsement of the employer basically to ensure the economic relevance of the programme.

The Member for Thomson has asked about the progress of our economic restructuring. It would take too long for me to give a full report today but perhaps I will just mention one or two statistics. With regard to the new investment commitments which we have attracted to Singapore for 1983, the value added per worker was $41,300 at 1972 prices as against $24,000 in 1979 which means an increase of some 72%. In terms of expected fixed assets per worker, the value in 1983 was $34,600 as against $18,000 in 1979, an increase of 92%. So I think this goes to show that our economic restructuring programme is keeping pace.

Some Members have also brought up the point about the importance of our service sectors and the fact that we should pay greater attention to these service sectors in our present day economy. Here, I would say that the Government is making various attempts to enable all sectors in our economy to grow according to their ability and not to favour one sector against another. For example, the Skills Development Fund provides grants to employers in all sectors of the economy. And the amount of grants which are committed to any particular sector depends on how active that sector is in applying for grants and on the quality of the proposals for skills upgrading and for the upgrading of operations.

Let me just quote a few statistics. As at 31st December last year, the trade and service sector received a total of $64 million in grants from the SDF. This was made up of $57 million in training grants, $5.2 million in interest grants and $1.8 million in development consultancy grants. These amounts accounted for 36% of the SDF's total commitments for training grants, 15% for interest grants and 34% for development consultancy grants.

Members may be interested to know that the shares of the trade and service sector were larger than those of the manufacturing sector in respect of training grants. I would expect that the trade and service sector will continue to benefit from the SDF as it sets up permanent training centres by various associations. And I can assure Members that the SDF will continue to provide generous support for the setting up of such training centres and in addition will provide training grants for the programmes that are offered by these training centres.

Mr Speaker, Sir, I am conscious of the fact that I have only nine minutes more. Perhaps let me just go on to one or two specific points. The Member for Telok Blangah brought up the point about the conversion of Sentosa Development Cor- poration's $100 million loan into a grant and whether the loan for the establishment of the National Stadium could be converted into a grant. The basic answer is that it is not the same case. The National Stadium continues to achieve a healthy annual operating surplus every year. In FY 83, for instance, the surplus stood at over $1 million. This surplus can be used to defray the interest payments and the loan repayments. Therefore, I think there is no justification to convert the loan for the National Stadium into a capital grant.

Perhaps I should spend the last few minutes, Mr Speaker, Sir, in dealing with the comments of the Member for Anson. He has spoken a great deal but basically his message is still the same - that the policy of the Singapore Government is to take from the poor to give to the rich. It is the same refrain which he has spoken last year, the same refrain this year and therefore I shall distribute the same schedule (Cols. 885 - 886) again this year. [Copies distributed to Members.] schedule - STATISTICS OF PERSONAL INCOME TAX ASSESSED FOR YEAR OF ASSESSMENT 1982 (Cols. 885 - 886)

Sir, it is not quite the same schedule. I have updated it with more relevant statistics.

An hon. Member: You can bring out the same schedule again!

Dr Tony Tan Keng Yam: If the Member brings up the same points, I shall bring up the same schedule again. If you look at the distribution of the statistics for personal income tax assessed for the year of assessment 1982, you can see straight-away how false his statements are. In the lowest chargeable income groups, i.e. from $1 to $5,000, there are altogether 334,569 taxpayers. They comprise 55% of the total number of taxpayers. The tax that they pay amounted to $34 million, less than 4% of the total tax collected. The average tax assessed was $101.

At the other extreme, our biggest taxpayers, those with chargeable incomes above $100,000, there were only 5,800 of such taxpayers, less than 1% of the total number of taxpayers in 1982. Each of these taxpayers paid an average amount of tax of $55,569 which taken together total $322 million, over 37% of the tax collected in 1982. As I said, Mr Speaker, Sir, I can give similar statistics for the year of assessment 1981 but I think I will merely bore the House by producing more statistics and more facts. If the Member is determined to close his eyes and not see what is in front of him, then no one can help him.

Mr Speaker, Sir, in conclusion, may I just say a few general words on the Government's economic policy. How has the Singapore worker benefited from the policies of the PAP Government? Not through hand-outs here and there which are designed to earn applause, make good material for election speeches, not through empty rhetoric about fairness and equity, equal shares for all. The last three years since 1981 have not been easy years. The last three years have seen the worst recession the world has ever known since the second world war. What has happened in the other countries? Look at their unemployment statistics. Young men and women coming out of schools without hope of a job, without any future to look forward to. Here I am not talking about undeveloped countries in Asia or Africa. I am talking about countries which are acknowledged to be more advanced than us, countries in Europe and America.

What is the situation in Singapore? Our economic policies have enabled us to go through the recession without a single person being unemployed -

Some hon. Members: Hear, hear!

Dr Tony Tan Keng Yam: - or unable to find a job if he wants it. Our school leavers, our graduates from the Polytechnic and the University can find well-paid jobs, fulfilling, interesting jobs. We have made it possible for our people to support themselves and earn the money with which they can buy what they want and to spend as they like. The average monthly wage for Singapore workers was $925 in 1983, 26% higher than in 1981. And after adjusting for inflation, the average wage for Singapore workers increased by 11% in 1982 as against 1981 and a further 8% in 1983 as against 1982. Altogether a total increase of some 19% in real earnings in three years. I think this is surely something we can be proud of.

This is a tangible result which Singaporeans can look forward to under the economic policies which we have pursued, not a brief extravaganza of mindless, irrational spending financed by borrowings from outside the country which must end in a severe hangover, with no prospect for recovery. Is this what the Member for Anson is advocating? I am convinced that surely in spite of his grand standing and his long speeches, he must know in his heart that he is wrong and we are right. Perhaps one day he will admit it.

Much obliged, Mr Speaker, Sir. [Applause].

Question put, "That Parliament approves the financial policy of the Government for the financial year 1st April 1984 to 31st March 1985."

Mr Jeyaretnam: I ask for a Division, Sir.

Mr Speaker: You are not kidding, are you? I suggest a show of hands.

Mr Jeyaretnam: If you rule that it should be a show of hands, then I want my vote to be recorded.

Mr Speaker: Your vote will be recorded.

As many as are of that opinion, will the "ayes" put up their hands.

Hon. Members' hands raised.

Mr Speaker: To the contrary, put up your hands.

Mr Jeyaretnam's hand raised.

Mr Speaker: One vote against, and it will be recorded. The Ayes have it. The Ayes have it.

Motion accordingly agreed to.