HOUSING AND DEVELOPMENT (AMENDMENT) BILL

Order for Second Reading read. 5.17 pm

The Minister for National Development (Mr Teh Cheang Wan): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

At present, the Housing and Development Board is empowered under the Housing and Development Act to provide loans with the approval of the Minister to enable persons to purchase developed land upon a mortgage of that land. Clause 2 of the Bill extends the HDB's power to include the granting of loans for the purchase of vacant land belonging to the Board. A case in point would be the granting of loans to lessees of HDB sites for the development of petrol stations.

As the Act now stands, no trust in any form can be created in respect of an HDB dwelling or property. The original intention of this provision was to prevent abuse by persons not eligible for HDB flats from purchasing a flat in the name of nominees. Over the years, however, there has been increasing need for the HDB to permit the creation of trusts for legitimate reasons. For example, it is necessary to empower trustees to hold flats in trust for minor children who are citizens in the event of death of the lessee parent, and where the surviving parent is neither a citizen nor a permanent resident and therefore not eligible to assume ownership of the flat. Similarly, in some cases of legal separation or divorce, flats have to be held in trust for minor children until they reach the age of 21 years. Clause 3 of this Amendment Bill, therefore, seeks to allow a trust to be created in respect of an HDB dwelling provided such trust is approved by the Board.

The HDB may compulsorily acquire sold property under the circumstances prescribed in section 48A of the Act. The existing section 48C(1) empowers the Board to pay into Court any compensation payable for t"e compulsory acquisition of an HDB dwelling when any party refuses to accept the amount of compensation or where there is a dispute between interested parties on the proportion of compensation they are entitled to.

Clause 4 of the Bill seeks to amend section 48C(l) to enable the HDB to also pay into Court the compensation for any acquired dwellings in cases where the persons entitled to receive the compensation cannot be found with reasonable diligence. The amendment, like clauses 2 and 3, will provide greater flexibility and enable the HDB to carry out its functions more effectively.

The other important aspect of the Bill pertains to amendments to the financial provisions of the Housing and Development Act.

Since the HDB's inception, its annual accounts have been prepared on a "Double Account" system. This system was designed to reflect the results of the HDB's original objective of providing public housing for rental. With the HDB's major activity being shifted from rental to sale of flats, a new accounting system is now needed for the Board. Mr Deputy Speaker, Sir, hon. Members are aware that the HDB is currently designing a new accounting system. Certain amendments have to be made to the Act to pave the way for the HDB to implement the new accounting system. In this respect, clause 8 of the Bill seeks to amend section 59 of the Act by abolishing the "Housing and Development Fund" comprising a Capital Account and a Housing Account, as these are inherent features of the "Double Account" system which will be replaced.

Clauses 5 and 9 make consequential amendments respectively to section 52(1) and section 60(1) of the Housing and Development Act, as a result of the amendment to section 59 to abolish the Housing and Development Fund.

The amendment to section 55(2) of the Act as stated in clause 6 of the Bill is to enable the accounts of the Board to be kept by the Chief Financial Officer instead of a Financial Officer. The HDB has all along had a Chief Financial Officer and this amendment serves only to clarify and reflect the actual situation.

To provide greater administrative flexibility, clause 7 seeks to empower the Chairman and the Chief Financial Officer or the Chairman and another authorized officer of the Board to sign the audited statements of the Board.

Sir, I beg to move.

Question proposed.

Mr Jeyaretnam: Mr Deputy Speaker, Sir, before I speak on this, may I ask the Minister by way of clarification, two questions and then when he has answered them, may I speak on this. First of all, would the Minister say what exactly is comprised in this "any other land belonging to the Board"? Is this land which was acquired under the Land Acquisition Act for the Board and which the Board now does not propose to use for the building of flats or is this other land acquired otherwise than under the Land Acquisition Act?

The second question is this. Planning permission to develop has been obtained under the Planning Act. Does this contemplate the Board obtaining planning permission for the land that is being sold or is it the intention that the purchaser should obtain planning permission and the Board would sell the land to him when he gets the planning permission?

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, the acquired land was not originally owned by the Board and was acquired either from a private land owner or acquired by private purchase or by private treaty.

Mr Jeyaretnam: It may include land acquired under the Land Acquisition Act.

Mr Teh Cheang Wan: Yes, that is correct. The second point is about planning permission. The Board will obtain planning permission prior to the sale of the land. If the Board sells the land for the development of a petrol station, the Board must obtain planning approval before it can sell the land. Otherwise, if we sell the land for the development of a petrol station and the person applies for planning permission and his plan is disapproved, then the sale would be abortive. It will be a waste of time.

Mr Jeyaretnam: Mr Deputy Speaker, Sir, I am indebted to the Minister for clarifying the expression "any other land belonging to the Board." As I understand him now, it includes land which has been acquired for the use of the Board under the Land Acquisition Act and may also include land acquired by private treaty. I should have thought that most of the Board's land is acquired under the Land Acquisition Act but be that as it may.

Sir, as the Minister has said, clause 2 now extends the power of the Board to granting loans to purchasers of land acquired by the Board for a specific purpose under the Land Acquisition Act and he cites a case in point would be for the development of the land as a petrol station. In my view, it is a complete misuse of the Land Acquisition Act if the Housing and Development Board is now allowed to sell land acquired under the Land Acquisition Act to oil companies to be developed as petrol stations. Under the Land Acquisition Act, section 5(1) of the Act says:

"Whenever any particular land is needed -

(a) for any public purpose;

(b) by any person, corporation, or statutory board, for any work or an undertaking which,in the opinion of the Minister, is of public benefit or of public utility or in the public interest; or

(c) for any residential, commercial or industrial purposes,

the President may, by notification published in the Gazette, declare the land to be required for the purpose specified in the notification."

Mr Deputy Speaker, Sir, you will see from the tenor of that section that the power is to be exercised only when the land is needed for a public purpose or where a statutory board requires it for its undertaking and that undertaking should be of public benefit or of public utility or in the public interest. The example that the Minister referred to of selling the land to oil companies cannot, in my view, come within the ambit of section 5 of the Land Acquisition Act. It may, I suppose, in loose language be said that an oil company, which is developing the land by erecting a petrol station, is using it for a public purpose. But that is not what is intended by the Land Acquisition Act when it gave the power to the President to acquire land for a public purpose.

One must not forget, Mr Deputy Speaker, Sir, that when land is acquired under the Land Acquisition Act, it is acquired, at the moment, at the price prevailing in 1973. That is, even if the land is acquired after 1973. The point is this. These lands were acquired from the owners at prices which were far far below what they are today. They were acquired at a pittance.

Now we find that the Board may not need these lands or some of these lands which have been acquired from owners at a pittance and the Board proposes to sell these lands to oil companies, not at the price that they bought from these private owners - I am sure that cannot be the case - but at the prevailing market prices. That, to me, Mr Deputy Speaker, Sir, is a complete misuse of the powers of the Land Acquisition Act. Not only it is a misuse, I think it is positively amoral that you should acquire private land saying that you need it for a public purpose, construction of flats for the citizens, and then suddenly say, "Well, we don't really need this land. We are now going to give it to an oil company so that they can put up a petrol station." I think the only decent thing to do in such a case would be to return the land, if you do not need it, to the owners so that if an oil company wishes to build a petrol station on that site, they can approach the owners. I say this is positively amoral, if it is not a complete misuse of the powers given under the Land Acquisition Act. 5.33 pm

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, I am very surprised that the hon. Member for Anson does not even have an elementary knowledge of how the Housing Board develops a new town. He is the Member for Anson and most of his constituents are staying in HDB estates. I presume that he should know something about his own constituency.

When the HDB develops either a big housing estate or a new town, the HDB has to acquire all the private lands within the area for development. In fact, I want to emphasize that most of the HDB new towns were built on HDB's own land; that means the land was inherited from the former Singapore Improvement Trust. Some may be State land and some may be private land. It is a mixture. In certain cases, there may be more State land and in other cases, there may be more HDB land or there may be more private land. After the HDB gets all the land together, the HDB proceeds with the development. First of all, of course, we have to clear all the squatters and any encumbrances on the land. When the people have moved out, development takes place. We start earth works to level the place. Then we start the construction of the roads and we start the building of HDB flats. Then we start the development of swimming pools, the recreation areas. We build car parks. We build parks. We build children's playgrounds. We build shopping centres. We build all the other facilities.

Mr Jeyaretnam: We know all that.

Mr Teh Cheang Wan: You know that! I am very surprised. I thought that you did not know.

Basically, the land is acquired by the HDB for various purposes. If we follow the theory of the hon. Member for Anson, then what he is saying is that if the acquired private land is meant for commercial development - HDB has commercial development - it should be returned to the private landowners so that they can make a lot of money. For the land earmarked for the development of a swimming pool, do we return it to the private landowner and tell him, "Look here, please spend $12 million to build a swimming pool"? I suppose he will say that it is the Government which should spend the money to build the swimming pool.

For the construction of roads, we have to spend millions of dollars. Who is to pay for this? Basically, the accounting for HDB is very simple. The HDB is spending money for the construction of roads for which there is no return. The HDB is spending money for the construction of facilities like swimming pools and each swimming pool costs more than $10 million. The HDB is building children's playgrounds. There are no returns for all these facilities. There is no economic return for a swimming pool. In fact, the gate admission of 40 cents per entry is not sufficient even to maintain the pool. The HDB is building, for example, town gardens in various new towns. The HDB is spending millions of dollars for town gardens and admittance to town gardens is free.

So what the HDB is doing is that it is acquiring all the land for development. There are certain projects for public benefit, public recreation like swimming pools, town gardens, roads, children's playgrounds. The HDB is spending money for all these facilities. The HDB builds flats for sale which again is subsidized. In other words, the HDB is not recovering the full cost.

From commercial development, the HDB is recovering some money by building shops, factory premises and petrol stations.

The hon. Member for Anson gives the impression that he is really pro-landowner. I was under the impression that the hon. Member is a socialist. I did not realize that the hon. Member, in fact, is a very conservative capitalist. Where there is money to be made, the landowner should make the money. Where money has to be spent, the Government should spend the money. That is what he is advocating. As regards the piece of land which can be developed for a petrol station, why is it suitable for a petrol station? It is because the HDB brings the population into that area. The HDB develops the new town. The HDB develops the roads and therefore that piece of land can be suitable for a petrol station. Without the HDB spending all the money to bring the population into the new town, that piece of land is totally unsuitable for a petrol station because without the population, there are no cars. The hon. Member is suggesting that after the HDB has put in all these efforts, the landowner should be the one to benefit and not the HDB. I am very surprised.

Mr Jeyaretnam: Mr Deputy Speaker, Sir, may I by way of clarification say that the Minister seems to have completely missed the point. I am sorry but he has missed completely the point of my speech in this House on this Bill. He talks about HDB building this and building that. I was not talking about HDB building this and building that. I was talking about the Land Acquisition Act and that is quite specific. Land may only be acquired for a public purpose and may be acquired for a statutory board for its own undertakings.

The Board, I take it, is not going to operate the petrol station. The Board is going to give that land at an exorbitant price to a private company to operate the petrol station. That is not one of the purposes for which land may be acquired under the Land Acquisition Act. I am saying that quite seriously and I am saying that you are misusing, as this Government has misused a number of Acts, legislation. The Government is misusing the Land Acquisition Act if it now allows the Board to sell land to oil companies after having acquired them for a public purpose.

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, I think the hon. Member for Anson is trying to evade the point which I raised. But since he has raised this point, I will take on his point. In the planning of the land use of the area -

Mr Jeyaretnam: The Land Acquisition Act.

Mr Teh Cheang Wan: Yes. Land acquired by the Government has to be zoned for various purposes. That particular piece of land may be zoned for a petrol station. The land is still owned by the HDB because it is leased to the operator of the petrol station for a period of 30 years. After 30 years, this piece of land will revert to the State. The oil company actually has to pay a high premium for the use of the land for 30 years. It is not because of the land itself that has any significance; as I have said earlier, it is because of the HDB's development. There is a housing estate there. There are cars there and therefore an oil company is willing to pay the so-called exorbitant price for the use of the land as a petrol station for a certain period of time.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Teh Cheang Wan).

Bill considered in Committee; reported without amendment; read a Third time and passed.