ANNUAL BUDGET STATEMENT

11.24 am

Order read for Resumption of Debate on Question [8th March, 1985] (2nd Allotted Day),

"That Parliament approves the financial policy of the Government for the financial year 1st April, 1985 to 31st March, 1986.". [Minister for Finance, Minister for Education and Minister for Health).

Mr Speaker: Since I have allowed two days for the debate on the Budget Statement, I have decided that at 3.30 pm the Minister for Finance should be given a full hour to wind up the debate. This is only fair enough.

Question again proposed.

Dr Koh Lip Lin (Nee Soon) (in Mandarin): Mr Speaker, Sir, yesterday in Parliament, the Member for Khe Bong said that he had at first wanted to talk about road tax and the increase in diesel tax and taxi fares but since other Members have raised these matters, he did not want to talk about them. But I look at it differently. I feel that any important issue should be repeatedly brought up, so that the more people talk about it and giving more opinions, the more helpful it would be to the formulation of policies and measures. Moreover, these are matters which the people of Singapore are concerned about. Therefore, as representatives of the people, we must try our best to make use of every opportunity to talk about matters that concern the people.

While the reduction in certain taxes and levies, such as payroll tax, SDF levy and the like, are giving great relief and confidence to the business community, the increases in road tax, petrol tax and taxi fares have brought great burden to the general public. As some Members have mentioned, this would in turn bring about a chain reaction in a rising cost of living and higher prices in consumer goods and services. So this double-sided measure in both increasing and reducing taxes gives people the impression that the Govern- ment is just taking from one hand and giving it to the other. In Chinese colloquial, it is scooping out a piece of flesh to patch a wound, like you have some wound on the left arm and you try to scoop out a piece of flesh from your right arm to mend the hole in the left arm. So this is actually not a practical way to solve the problem. I wonder whether the Minister for Finance i? applying the same kind of medication.

The increase in road tax and petrol tax, I think is for the purposes of controlling the number of vehicles on the road and make the use of taxis more efficient. But I feel that the rates should not be so high and it could have been implemented over a period of years in gradual stages of small increases each time. If, all of a sudden, you increase the tax to a great extent, it would appear that you have not taken note of the situation all along and only until now, at the last minute, do you try to increase the tax all of a sudden, overnight. Or, you might have noted the situation but was unable to come to an early decision. I think this is not what an efficient government should do. I hope in future there would not be such a large scale increase of taxes, by 100% or 50%, particularly in the areas of income tax, price of HDB flats and other major matters. The increase in taxi fares will affect the commuters generally. It will perhaps affect certain people more, such as the old and those in the lower income group, particularly those who have to depend on the taxi as the means of transport for a livelihood. The increase in Road Tax and Petrol Tax will have some effect in reducing the number of vehicles, but after a few years the effect will be forgotten and there will be more and more vehicles on the road. Because in Singapore, owning a vehicle is a status symbol, whether it is a necessity or not. Some people must need a car in their job. The Ministers here cannot go about their business without cars, otherwise they would not be able to function properly. The Member for Bukit Ho Swee of the previous Parliament was perhaps the only one who went about without a car. Just like what the Member for Siglap has mentioned yesterday, the living standard of the people of Singapore has risen. So everybody wants to have a car. Although not everybody can afford a car, but car owners would like to retain their cars and those who are without cars now aspire to have a car of their own. Car possession has become a status symbol of one's standing in the society and one's wealth and success and symbolizes one's prestige. So, having a luxurious car is better than having an ordinary car; having a big car is better than having a small car; and having a smaller car is better than without any car. It has come to my knowledge that in some well-known elite schools pupils often discuss about whose parents' cars are bigger and more luxurious, and so on and so forth. After school, some pupils would go home and ask their parents to buy a better car because their classmates have bigger and more luxurious cars.

I would like to give another example. A young lady is being courted by some suitors. One suitor comes on foot, one by bus, another by trishaw, yet another by car. Who has got a better chance? If you come in a nice car, you are likely to stand a better chance, other things being equal. Most people, having got a flat, a spouse and children, would next aim to own a car. With a car, one will be able to take his family for an outing or for shopping. It would also give his children and wife some feeling of status.

Sir, I do not mean to say that the people of Singapore are rather vain and unrealistic. What I am trying to say is that unless our social value concept has changed, our aim of life is still to own a car, after having obtained other necessities of life. Some people are willing to save for a car at the expense of other things such as food and entertainment. There are many suggestions on how to prevent the number of cars from increasing. But I feel that the best and most important solution is to provide a good and efficient public transport system. Our MRT and bus systems should be able to provide our people with a safe, comfortable, convenient, economical and efficient transport service. Only then you can basically solve the problem of car ownership or the number of cars on the road. I hope bus companies or operators would not at this juncture try to increase bus fares to make money to take advantage of the time when taxi fares and petrol tax have increased. They should not try to make use of the opportunity to make too much out of the public, but should try to improve and provide a more efficient service to the public.

The other problem I would like to raise is about the Ministry of Culture. This year's budget does not relate to the Ministry of Culture because this Ministry has been disbanded. People in the cultural circle naturally feel that the Government does not give priority to matters of culture. Some people say that Singapore lacks culture, or the Government of Singapore has got no culture. Culture and Education are two pillars of nation building. Education prepares the people for their role in nation building and Culture ensures that the Nation will last long.

In this connection, I would like to mention about the abolition of Ministry of Science and Technology in 1981. At that time we were worried about the provision. Yet, for several years thereafter the Government has continued to spend a lot of money and effort in the promotion of science and technology. These facts have proved our worries to be unnecessary. For instance, in recent years the Government has allotted a lot of money for upgrading the building, facilities and increase in teaching staff of the National University, Nanyang Technological Institute and the two polytechnics. As a result more and more students have been enroled, more and more people are receiving science and technology education to provide the necessary manpower resources for our nation building.

The next item worth mentioning is about computerization. The Government has set up a National Computer Board to implement the promotion of computerization throughout the nation. It has made much impact on public and private sectors. The Government has also been active in promoting the development of advanced science and higher technology through the Economic Development Board and the Science Council. They have made great contributions. Other measures relating to promotion of advanced science and high-tech industries, include the setting up of the Science Park, R&D Assistance Scheme. Funds have been set up which have also given a great impetus to the rapid progress of our country in the fields of science and technology. So science and technology continue to receive the Government's support despite the abolition of the Ministry of Science and Technology. Therefore, I also believe that the Government will continue to provide assistance for the promotion of culture in our country, despite the dissolution of the Culture Ministry. But I am still a bit worried, perhaps unnecessarily, because the fund allocated to culture has always been very small. Last year, the allocation for promotion of culture was $13.5 million but the actual expenditure was only $8.8 million. This year, there is only $11 million to be spent on this item. Allocation to library and other culture related fields are similarly in the same state. The actual expenditure has been less than the budgeted figure. I do not know whether this trend will continue. I feel that the small sum provided is not enough for the promotion of culture. Divide it among the whole population, each Singaporean would get only a few dollars. I hope the Government could be more positive in the support and promotion of culture and try to help promote the traditional cultures of the various communities in Singapore in order to develop them into a Singapore culture. 11.37 am

Mrs Yu-Foo Yee Shoon (Yuhua): ( In Mandarin): Mr Speaker, Sir, the Budget announced by the Minister for Finance other than the question of an increase in tax for taxis has generally met with good response. Here, I would like to touch on two matters. One is about the contribution to SDF, now reduced from 4% to 2%. In the present circumstances when there have been some economic slow-down and frequent retrenchments the business circle generally feel that the reduction is very welcome.

The idea of SDF arose in the late 1970s and early 1980s when we reached a certain stage in our economic development which made it necessary for us to restructure our economy. To do this we need to upgrade the skills of our workers. At the same time we had to raise the wages of the workers to the extent of compelling employers to accelerate the process of mechanization, automation and to promote high technology industries. To implement this corrective wage policy the Skills Development Fund was then set up and a 4% levy was then imposed on employers. Although the Government could train about 20,000-odd workers in one year, there are 1.2 million workers in the labour market who need training. About 300,000 of them have only below Primary 6 education. When we talk of training, some employers may laugh because of the current spate of retrenchments. On the other hand at other times when the workers are busy, employers will say that they do not have the time to be retrained. However, in my view we should take the opportunity now that we have a slower economic growth to retrain our workers. In the long run, the training and retraining of workers will be beneficial to companies as they will then be better able to manage any new technology introduced by their companies. Thus without a skilled workforce, a company certainly cannot mechanise or automate smoothly. Why should we urge the companies to train their workers? Because workers are closely connected with the company in which they work. Therefore, it is only through the company that workers may be trained quickly and conveniently. Most companies or manufacturers know their businesses and market conditions well, but unfortunately often forget that it is equally important to train their workers for their own viability. An example is the BEST courses that we are promoting at present. Apart from the PAP branches and the NTUC, the BEST Courses Council has also encouraged more than 1,000 corporate employers to set up such courses. However, only about 20 over percent of companies responded to the call. Therefore, the best way is to make companies pay to the SDF so that the cost of training expenses can then be reimbursed from such fund. The small and medium companies may find it less beneficial to set up such training courses for their employees. However, collectively with assistance from the Fund they can provide training for their employees. I understand that the SDF has planned for more than 200 courses, including courses on cookery and fashion designing. People may say that the SDF has already collected a lot of money. However, it has to be pointed out that the contributions for 1984 has totally been committed to the various training schemes for 1984 and 1985. In other words, the funds which are available at present are accumulations from 1980, 1981 and 1982 because during those periods there were not many comprehensive training schemes that were formulated or proposed. Therefore, the money has not been spent. In order to move towards hightechnology development, the SDF should continue to increase its fund.

Another important point is that in order to minimise retrenchments we should look into ways of increasing productivity and raising the quality of our products to increase their competitiveness in international markets. We should put greater efforts into training our workers so that we could elicit the best from each individual. Without proper training workers may not be able to meet the challenge of high-tech development and this may be one of the contributing factors for retrenchment. This problem is greater for older worker. Therefore, when the economy improves I am of the view that we ought to restore the SDF contribution to 4%. In a period of economic downturn we understand the Government's rationale to help companies to overcome their present difficulties. But in order to meet future challenges in high-tech industrial development, we should restore the SDF levy to 4% in order to ensure that training schemes will continue.

Now I would like to touch upon the question of shortage of labour. Talking about this topic, it reminds me of the fact that there are 300,000-odd women who have not come out to work. Even worse, some 100,000 working women drop out of the workforce every year because of marriage or childbirth. Manpower is Singapore's only resource. Today there are equal opportunities for education and work for both men and women. To maintain a healthy economy those who are able must participate actively in it and it would indeed be a loss for Singapore if this tremendous potential in its womenfolk are not tapped. Only through economic progress and development can we realise the objective of raising the living standard of our people, Personally, it is thus my view that every human potential must be utilised and developed to ensure Singapore's continued economic progress and development.

From a social view point, to ensure social stability we should work towards having our own local workforce comprising entirely of Singaporean workers. That I believe is the aim of the government and this objective could somewhat be met by encouraging the 300,000-odd women who have not come out to work into the labour market. However at present of greater importance is how to retain the women who are already in the workforce. Before I suggest any solutions or proposals however, I would like to say that before trying to solve a problem we ought to be clear in our minds what our objectives are. We should then have the right perceptions and have confidence in achieving these objectives.

Why did I say that we ought to have the right perceptions? This is because there have been many views expressed on the pros and cons of women working outside their homes. There is of course some relevance in the view that the increasing rates of divorce and juvenile delinquency could be partly attributed to women working outside their homes. This is because with economic independence women may be less tolerant in their marriages and this may lead to higher rates of divorce. But the problem of divorce in a society actually related to many factors. One's perception towards this issue is usually moulded by the prevalent social norms, family values and cultural background, etc. For instance, in our conservative society, divorce is normally regarded as an unpleasant and even shameful thing and quite often because of this family members may also intervene to help salvage a marriage. But to the West, it is a personal matter, that is entirely a personal choice. Maybe the more divorces you have gone through, you will, perhaps, become the more popular.

Talking about women coming out to work, in Japan as in the United States 50% of them are in the workforce. In spite of this, the divorce rate in Japan is five times lower than that in the United States and juvenile delinquency cases are also fewer than in the US. Compared with the other ASEAN countries, the female participation rate in Singapore is higher, so also is the divorce rate. As regards social and crime problems, I think you all know the answer.

Finally, let me say that whatever measures we take to encourage women to come out to work, I still would stress on personal choice. I am not saying that every woman must come out to work otherwise she would be at fault. What I am saying is that it depends on the individual. But I feel that the Government and the social organizations have the responsibility and duty to take every possible measure to enable married women to make a better choice between looking after the family and coming out to work or even better to be able to take care of both so that all the people concerned will benefit.

On the question of working mothers in relation to child development, some say that when the mother comes out to work, it will affect the development of her children. But we have real examples as in the case just after the Second World War, when many married women and widows came out to work yet their children were brought up quite well or satisfactorily. Of course this may not necessarily be so in every case and is certainly debatable. But the point to note here is that there are two viewpoints on the matter. The more optimistic one stresses on quality parent-hood with working parents still able to provide good care for their children. Social organizations and the Government have an important role to play here. We must promote various measures to take care of the situation.

Let me just mention some measures that have been taken in Singapore to encourage women to come out to work and have a better social standing. The Government has contributed much in the past 25 years during which period many changes and reformations were made. First of all, in 1961 Parliament passed the Women's Charter and the next important reformation was when the Government implemented equal pay for equal work for men and women in the Civil Service. Before that, female civil servants after marriage would be treated as temporary workers. There were also other measures such as the setting up of creches in housing estates and family planning. In 1981 the Government implemented a half day working scheme for women and in 1983 it allowed female civil servants to have one year's unpaid leave to look after their children. In order to help married women the Government also implemented full-day schools for children and reduced their income tax contributions. Encouragement has also been given to three-tier families by HDB, and so on. You may say that since much has been done by the Government there is no need to do anything more. However, we need to review and assess the results of those measures in order to make adjustments, changes and improvements wherever necessary.

I would like to add that the Government should appoint one particular department as a coordinating body to coordinate the measures carried out by the various departments, such as the Ministry of Community Development, the Ministry of Education, and others which have been dealing with the related matters under their respective portfolios. This central coordinating body will be able to coordinate and promote all the various measures. Here, I would like to suggest some improvements. In respect of the half-day working system, for instance, we could make certain adjustments to allow for flexibility in the working hours or in the working conditions of the women.

On the question of setting up creches to enable women to work, although the Government has given financial assistance at the moment, there are only 37 creches in the whole of Singapore, compared with Japan, where there are 22,000 creches. In Japan, the creche accommodation ratio is as follows: For one out of 49 children under one year old, there is one creche that can accommodate him. The ratio is 1:49. One out of nine children between one and two years old can be accommodated in a creche. The ratio is 1:9. For children between three and five years old, one out of four can be accommodated in a creche. The ratio is 1:4. But in Singapore, out of 133 children between two years and six years old, the creche can accommodate only one child. The ratio is 1:133.

The HDB's three-tier family method can also be improved upon. Young couples living away from old parents after having children of their own should realize the advantage of staying together with their parents. When there is a flat available nearby for sale or resale, priority should be given to such couple or aged parents to stay together.

On the full-day school, it will be useful to parents and students particularly older parents. The full-day school should thus not be given up just because of failure in the first experiment. To make it attractive, we should consider the various factors like locality, transportation, teaching facilities, the contents of curricula and time-table. I would also like the Government to encourage private enterprises to respond to the Government's measure in giving married women one or two years' unpaid leave to enable them to look after their children. I hope that more systematic aid can be given to the womenfolk who intend to come out. to work, to guide them in lessening their psychological inhibition. There are certain women's organizations which are helping the womenfolk to come out to work but they lack human resource and financial assistance.

Let me quote some examples from Japan for reference. The rate of female labour participation is nearly 50%, slightly higher than ours. What is to be noted is that for those between 25 and 29 years old, the participation rate is also about 50%. That is to say, 50% of the mothers also come out to work. Those between 40 and 55 years old, the participation rate is 60% whereas in Singapore only 47% and 26% respectively. In Japan, 50% of the children of working mothers are being looked after in the creches, 47% by their grandparents or relatives while in Singapore 43% of children of working women are looked after by their grandparents or relatives and about 2% are looked after by the creches. Although women in Japan are working a half-day system, according to what I have read the so called half-day working system is actually a 6-hour day. Women in Japan, quite unlike what we think, play an important role in their economy. As early as the Second World War, women had played an important role in the Japanese economy while their men were in the armed forces engaged in the war. Here in Singapore, ours is an unique society where we may need to accept and absorb Western science and technology and management skills but at the same time continue to preserve our good traditional values and culture, that is the eight good traditional virtues of loyalty, filial piety, humanism, love, courtesy, righteousness, integrity and shame-consciousness. So we need not be worried about any undesirable consequences if we want to encourage our women to come out to work. If we want to increase our national productivity and economic progress and raise the living standard of the people and reduce the gap of wealth between the rich and the poor or to help those poorer people, I feel that the best way is to give them work. So I appeal to the Government to appoint a special department to coordinate, promote and implement various measures to encourage women to come out and participate in various kinds of work in the society. 11.53 am

The Minister of State for Defence and Trade and Industry (BG Lee Hsien Loong): Mr Speaker, Sir,l would like to address my comments today to the substance of the Government's economic policy. When times are not as good as they used to be and firms are not doing well, it is common for the finger to be pointed at the Government, and criticism to be levelled at its policies and what it has been doing.

The Member for Rochore yesterday made a very comprehensive critique of the policy. I shall refer to some of the things which he said for convenience, because these are arguments, lines of thought, which are common, and which we hear over and over again. He crystallized three arguments, which I would like to discuss.

First, the Government should not be in the private sector. It should confine itself to public business. It should not go into entrepreneurship, into enterprise. Secondly, Government surpluses are the cause of private sector deficits. Because the Government has kept its house in order, it has been able to spend within its means, and therefore the private sector is unable to cope within its means. And thirdly, Government expenditure has drastically increased over the years.

I would like to present an alternative view, because these are impOrtant issues, and therefore both sides of the argument should be heard. First of all, on the subject of Government in business. Why is this bad? Allegedly, it is bad for two reasons. (1) Bureaucrats are not entrepreneurs. They do not know how to make money. (2) Government exploits its position and squeezes out other private entrepreneurs. In other words, the bureaucrats are too clever at making money.

Let us examine this. Why did the Government go into business? The Government moved into business where private capital, private enterprise and experience, were lacking, where risks were great, where the contribution to the national economy was significant. These were areas which, if the Government had not moved into, nobody would have moved into. Some examples were given yesterday of Government companies. Let me give a few more - SIA, DBS and NTUC Income.

What sort of company is SIA? It is one of the best airlines in the world. It makes money. It is progressive. It is competitive. It is an airline which we are proud of, and whose benefits to us go far beyond the balance sheet and the profit and loss statement, which is very healthy, year after year, at a time when international airlines .in general, and airlines in the West in particular, have been having a very difficult time of making business. Lacking in entrepreneurship? They may be Government servants, but that does not mean they do not have brains, or initiative, or ideas. So that is SIA.

DBS. It is the only bank in Singapore, even today, which makes long-term loans for industrial purposes. Other banks make commercial loans, short-term. You take it, you do business, you return the money to me. The bank is safe - which is the correct thing for a private bank to do. DBS fosters long-term industrial development of the country. It is a role which DBS has played successfully and which, if any other bank wishes to fulfil, it is most welcome to do so. And DBS also pays dividends and makes money.

NTUC Income. Income has become one of the largest insurance agencies in Singapore. Why? Because it developed a brand new, vast, and important insurance market, a market of workers, of union members, of ordinary men-in-the-street, who previously did not make any precautions against ill-health, against death, against the unforeseen. NTUC Income came in and Yes, you have a need for insurance. Let us give it to you at reasonable, very competitive prices."

And our economy is that much better as a result of there being SIA, DBS, Income. Have we squeezed other people out? Far from it. We wish others would come in. Perhaps the problem is that these Government companies have become so successful, that rather than attribute it to business acumen, the explanation given is that they have cut corners, and exploited the Government's position. I do not think that explanation holds water.

Some investments have gone bad, of course. The Government is not infallible. The Government has never claimed to be infallible. When you are in business, you take risks. And when you take risks, you must know when to cut losses. One of the cardinal principles of this Government is that we do not throw good money after bad. If an investment which looks promising turns out in an unexpected, unfavourable way, well, that's that. It was a bad decision, we learn from it, but we do not throw good money in to rescue it.

What happens to the successful investments? Once it is built up, is there a strong reason for the Government to stay on? There is no strong reason, and in fact as the Minister for Finance has stated in his Budget statement, we are planning to move out of some of these activities, as the private markets have developed, and there is more capital available to finance these activities.

But I would just like to leave this thought with you: there is nothing sinful in the Government owning a profitable investment. Would you rather the Government own loss-making investments? Surely if there is a profit, it redounds to our credit, and we are proud of what we have done. So although we are moving gradually into an expanded private role in our economic development, and we hope the private entrepreneurs can move in as quickly as possible, nevertheless, we are not at all ashamed about what we have done in business.

The second argument is about surpluses: Government surpluses are bad because Government surpluses are financed by private deficits. This is a most remarkable argument. I consulted the Member for Leng Kee yesterday. He said he had never heard of it before. So I really could not figure out what it means. But surpluses, so far as orthodox economists understand them, are the result of a successful, growing, prospering economy, and prudent management on the part of the Government. Why do we have surpluses? Is it because we have been raising taxes year by year? Is it because we have been spending money like water? Neither. We have, in fact, been reducing our tax rates year by year, every year, with one exception, and that is, car taxes, for good reasons of public policy, not reasons of fiscal policy. And every year the Minister for Finance has come forward, and every year the Straits Times has published, "Another Painless Budget." You can read the records. So each year the burden on the economy has been less, each year we have lived within our means, and spent the money wisely on things which we need.

As a result of these surpluses, we have a strong Singapore Dollar, we have large foreign reserves, and we have a very low inflation rate. Last year, it was 2.5%. So all his talk about inflationary policies being out-of-fashion in this inflationary time, flummoxes me. I cannot figure out what it means. I tried to understand a bit more, and the argument was further elaborated into talking about deficit financing - that the Group of Seven, the most advanced industrialized countries in the world, have all gone for deficit financing. Why is it we are in surplus?

Is there something wrong with that? The United States for years has been struggling helplessly with its deficit problem. They have US$200 billion short a year, and there is no way they can solve this problem. They are extremely concerned, and they are hoping to wish it away. That is effectively what Congress is doing.

Would you wish that on us? Can we, as a government, spend money, put money into people's pockets, ask them to go and spend it, and that way fill up our shipyards, fill up our hotel rooms? What will happen to the money? It will be spent on consumption, it will be spent on imports. The Singapore Dollar will go down, prices will be driven up, inflation will be up. We will have the worst of all possible worlds. What is the sensible way to fill up the hotel rooms? Encourage tourism, is it not? How do you encourage tourism? Well, one way is to light up Chinatown, light up Orchard Road, and invite tourists to come. But somehow or other, yesterday morning, I remember during the Oral Questions the opposite argument was put forward, "Why are we lighting up Chinatown?" It is extremely strange. We light up Chinatown so that the tourists will come in, the hotels fill up, the retail trade moves, and everything is carried along. That is why we light up Chinatown.

We talked about overheads. What overheads are you talking about? Payroll tax has gone. Skills Development Fund - you heard what the Member for Yuhua said - that is for training, for upgrading, for improving our skills, for raising our productivity. That is what SDF is about. Cut it down? In order to stagnate? What is an overhead? CPF - is that an overhead? Is that something which the Government takes away from the workers? Or is it something which is part of the salary, which belongs to the workers, something which the workers use to spend for Medisave, for a house, and for old age? CPF is part of the worker's earnings, and we are proud that we are able to have such a large amount of savings put aside for a house to live in and for old age. Very few countries can do this.

Our payroll was supposed to have doubled in five years. (I do not know whether this is exactly so, I have not checked the numbers.) But if so, I think we should congratulate ourselves. What does it mean to have a payroll which doubles in five years? It means our high wage policy has worked. Workers' incomes have gone up. Inflation has stayed down, and that means real purchasing power has increased, We deliberately raised wages because the alternative is to go for low wages, low skills, and low standards of living - misery. Is that desirable?

Why has payroll gone up? Payroll has gone up because productivity has gone up, because workers are producing more, because it is more worthwhile for employers to employ workers. If it were not, workers would be unemployed. And despite everything which the Member for Anson and others say, there are no workers unemployed in significant numbers.

The third reason why payroll has doubled in five years is that this is the way to share wealth. This is the solution to the problem of the 10-15% of the population which we have been talking about. To have the whole economy booming, and to have all share in the income. Do you want to have a low-wage policy? Do you want to have a payroll that remains stagnant in five years? I do not think we would have Opposition Members criticizing us if the payroll remained stagnant for five years. I think we would be the Opposition, if payroll remains stagnant in five years. That is what we have done.

So the Government surpluses, financing private deficits, or private deficits financing Government surpluses - I do not know, but perhaps I shall have to seek some more advice after this from the Member for Whampoa. But I really cannot figure that one out. Least of all can I make sense of that, when we go on to the next argument that Government expenditure is up, and that is bad. I would have thought, if you said Government surpluses are bad, then Government expenditure should be good. If I am spending money, I am trying to get rid of the surplus.

On the contrary, Government expenditure was also criticized. What are we talking about? From 1979 until 1985, our GDP has expanded in real terms by about 70%, that means nearly double. And our requirements, our standards, our expectations, have correspondingly doubled. What does the Government spend money on? It spends money on defence; it spends money on health; it spends money on education. It spends money on investment in people, it spends money on providing the infrastructure for the wealth to be created. We are proud of what we spent. What have .we spent which we think we have wasted money on? There is none. We have spent money on universities, on investing in facilities for our people, on hospitals for our people, on necessary equipment for our defence forces.

If we disagree that Government expenditure should go up in this fashion, then I think a supplementary question would be in order. What would you propose the Government not spend the money on? Tell us. Do you prefer to give up NUS? Or would you rather prefer to give up NTI? Or perhaps, if neither of the above, you would like to sacrifice two junior colleges, one hospital, and half a dozen other teachers? What do we wish to sacrifice? I think we buy things which we need. We discuss the Budget which we spend. We discuss the items of expenditure. We shall be spending the next two weeks doing this, and if anybody believes that we should have a Budget which is half what it is, I think we have time to debate that. Let us hear which he wishes to do without.

Mr Speaker, Sir, the arguments are so self-contradictory that they only realize the absurdities of the business when they all come together at the same speech. Well, we are talking serious business here. This is not a court. This is a Parliament in which we debate. In court, you can do this, and there is a good reason you can do this. If a person is charged with murder, he is allowed to make incompatible lines of defence. My first line of defence, "Your Honour, I was not there." My second line of defence, in case you do not believe me, "I was there, but I did not hit him." And my third line of defence, in case you still do not believe me, "I was there and I hit him, but he did not die straightaway." I do not know how many people charged with murder get away with those lines of argument. I would not advise it in this House. 12.13pm

Encik Abbas Abu Amin (Pasir Panjang): Mr Speaker, Sir, Budget day has often been looked upon as "a day of reckoning" for the taxpayers and businessmen alike. With the exception of the motoring public whose fate will always be a foregone conclusion as long as Government is intent in its endeavour to curb the increase in car population through heavier taxation on related items, it has not been the case for the others in Singapore when the 1985 Budget was announced by the Hon. Minister. Sir, I agree with the hon. Member for Leng Kee that the Budget should be viewed in its entirety to realize its overall implications in relation to local conditions and the world economy which has always influenced our own.

It was indeed a well-prepared Budget, designed to motivate the private sector to accept a revitalized economic programme in which businessmen and employers must themselves play decisive roles. This "Businessman's Budget", as it has been enthusiastically hailed in a local press, serves as an open challenge to the private sector to take a leading role and steer Singapore's economy into a new phase of economic excellence. The cost-cutting incentives offered by the Minister have been exacting ones. They are realistic and timely, though some of them have been considered, in some quarters, to be long overdue.

Nevertheless, Sir, I am sure that the private sector will be able to accept with confidence and renewed vigour the Government's challenge to establish Singapore as an international centre for finance, tourism, sophisticated services and specialized products. With further Government encouragement and continued support, by way of a high-level economic committee to review the general economy, Big Business will be able to meet new challenges ahead and raise Singapore's economy to greater heights and achievements in the late 90s and beyond.

The Hon. Minister's decision to provide encouragement to those who take time, effort and expense to upgrade themselves by way of tax deductions is, in principle, an appropriate move and in keeping with present trends found in a highly sophisticated market.

In the face of economic restructuring to upgrade our industries to more highly sophisticated, brain-intensive industries, the quality of our workforce in terms of higher technology and modern methods of operations must be further enhanced.

For mechanization, automation and computerization to work successfully, our workers must be competent enough to operate them and operate them effectively so that the desired results can be achieved. They must therefore be trained and retrained to meet new demands.

However, Sir, in our keenness to promote the acquisition of higher skills among our skilled workforce, we must not lose sight of the plight of our unskilled and semi-skilled workers who are, by and large, at the lowest rung of our economic ladder. This group of workers, because of their low educational background, have often been side-tracked from this race to acquire new skills. Unless they are given the opportunity to advance to high level skills, they will not be able to contribute significantly and be more productivity. They will remain in lowly-paid, unskilled jobs, jobs which are bound to become obsolete with time. I do believe, Sir, that many of these workers can be upgraded if given the right motivation, encouragement and opportunity.

Just now we heard the hon. Member for Yuhua explaining the good work done by the VITB, the NTUC and a few enlightened companies to train their workers by organizing BEST classes. Perhaps more such courses could be organized in future.

Mr Speaker, Sir, the move to reduce the Skills Development Fund contribution and the suspension of the payroll tax is another move in the right direction that can reinforce the principle I have just outlined. However, it must not be seen by employers as only tax bonuses to boost their own profits without further regard for the basic principles that had prompted their introduction in the first place; ie, to impress upon employers and managers the need for skills training and manpower development for their own workers. Employers should now reciprocate the Government's gesture in these two areas by ploughing back the money "saved" to establish better relationship within their companies. They should initiate their own skill development programmes to upgrade the skills of their workers locally so as to enhance their company's productivity. There should be more welfare schemes for the workers so that better employer/ employee relationship can be established.

Sir, lest we forget the 2% reduction in the Skills Development Fund contributions, though useful, will not however help the smaller companies very much. They require more assistance from Government if they are to survive during this trying period.

Singapore, Sir, is a small country with a small market force. She needs supportive industries which are mainly operated by Singaporeans. The shift to higher technology which is good for Singapore will put a great strain on these supportive industries if special considerations are not given to them by way of lessening their financial constraints. For a start, Sir, it is my considered opinion that these smaller companies should be exempted temporarily from contributing to the Skills Development Fund.

Mr Speaker, Sir, the decision taken by the Hon. Minister for Finance to pay the 13th month NPAA on a pro-rated basis to those who leave the service under circumstances beyond their control, before completing the year, was a commendable one, and I fully support the sentiments and rationale behind this decision. This has been a long standing issue and I am sure Members of this House, especially the Member for Geylang Serai, are pleased to see that it has finally been put in its correct perspective.

Sir, allow me to comment on the tax increases. The same rationale has been used to justify increases in road tax, petrol and other related items. The Government has always been adamant that these measures would reduce the car population in Singapore. However, Sir, in actual fact, there has always been an increase in the car population. While the increase in such taxes did not produce the desired results, Government has profited by it through increased revenue. This has cast doubts among the motoring public as to whether the Government is serious in its intent to reduce the car population in Singapore. There is still much unhappiness among the motoring public because the measures taken and the policies governing the car industry are not really consistent. One example is that there is no restriction on the number of cars the public can buy as long as they can afford the price. This in no way subscribes to the Government's intention to curb the car population. Meanwhile, those who need their cars for want of better transportation, will have to tighten their belts and endure the burden until such time when they are completely overwhelmed by tax increases.

The Government has already announced that the MRT system will resolve road congestion problems and provide better public transportation so that there will be no necessity to own a car. Until that day comes, Sir, I feel that the motoring public should not be further burdened with heavy taxes.

The increase in taxi fares may, on the contrary, necessitate the lower income group car owners to continue to maintain their cars despite the heavy burden they are made to bear. Again, this would contradict Government's objective to reduce the car population. The increase in petrol price will not only affect the car owners but also the non car owners and non taxi users through indirect increases in food prices and other services. This chain reaction, Sir, will eventually hit the lower income group the hardest.

Mr Speaker, Sir, I would urge the Government to look into other areas for a more definite system to reduce the car population and congestion on our roads. The public transport system must be further improved to encourage more people to use them. During peak hours, more Scheme B buses should be put on the roads to ease the peak hour traffic. Perhaps school children should be provided with a special bus service to cater for their own special needs. I agree with the suggestions by some hon. Members that a complete re-think on the PARF and ARF schemes be undertaken, with a view to limiting the purchase of new cars without giving one for scrap in exchange.

Sir, I support the motion. 12.24 pm

Mr Chiam See Tong (Potong Pasir): Mr Speaker, Sir, it has been declared in the Budget statement that the aim of the Government is to have increased economic growth. It is a worthy aim. But this year is a year which is bad for business, and the most pressing problem for the Government to overcome is to make sure that the cost of running businesses in Singapore does not increase any further. Our GNP growth is predicted to fall from 8.2% last year to about 5-7% level. One Japanese market research institute has predicted that our GNP will drop to about 5.9%. Most businesses in Singapore therefore shall survive only on small margins. What is the reason for the rising cost of business in Singapore? Ask any businessman. Probably he will not tell you about the wages, but he will rattle off repeated familiar reasons: high cost of property tax, high cost of rentals, high CPF contributions and, up to last year, payroll tax, Skills Development Fund levy, high transport costs. Every one of these factors or pushing up costs in business is an act of the Government. Is the Government itself making attempts to bring down its own cost of running the administration? The answer is a clear no. We have heard from the Member for Rochore rattling off figures of increasing costs to maintain the Government administration. He was so concerned that he even advised the Government to make structural changes his year in the administration.

Sir, I have examined the Budget, and what do I see? Nearly all expenditures for all political appointments in all Ministries have increased except two. Two Ministries have jacked up their political appointment expenditure by 235%, increases from about $200,000 to over $500,000. On the average, the increased expenditure on political appointments was 65% more than last year's figures. This ever-increasing trend of Government expenditure is unhealthy. Government expenditure has risen sharply from $2.5 billion for fiscal year '79 to $6.1 billion for this year, an almost22 '-fold increase. This expenditure increase that I mentioned does not include (1) development expenditure, (2) servicing of public debt, (3) transfer made to the Development Fund Account. The Government expenditure increases are highly inconsistent with the present bleak economic outlook of the country, especially when all sectors of the economy, ironically, have been called by the Government to trim down their overheads to ride over the present slow business period.

This Budget is not free from blame for pushing up costs. The 25% absolute price increase in petrol, as a consequence of increased petrol tax from 50% to 60%, has made our petrol in Singapore so much more costly that our motorists are reported to be flocking to pumps across the Causeway. This trend obviously will continue. Each full tank paid for in Johor Baru will cost between S$20-$30 less. It is by our own Government's action that our local petrol pumps are losing business to those across the Causeway. This will prompt us to ask: is the Government really sincere in helping our local businessmen? It is time now for the local businessmen to tell the Government to bring down its own costs of high overheads. An increased Government expenditure will ultimately bring up costs in the private sector because Government expenditure is paid or by revenue. As we are all aware, the main source of revenue is income tax and indirect taxes. These two forms of taxes comprise about 65% of revenue collected. The fact that Government revenue increased from $4.1 billion for fiscal year '79 to the present $10.6 billion shows a substantial increase in the burden of tax borne by Singaporeans.

This increase in the burden of tax can be attributed to the increase in Government expenditure. Taxi drivers will, with effect from 1st October this year, have to carry an additional burden of tax when the $6,600 diesel tax is imposed, but ultimately the public, being taxi users, will bear this increase. Motorists are also subjected to a higher burden of tax, with the 15% road tax increase and the petrol tax increase from 50% to 60%. All this additional burden of tax, as previous Members of this House have said, will be passed on to the ultimate consumers, and inevitably bringing up another round of inflation. It should be stressed that our people are already subjected to a heavy tax burden. This is concretely evidenced by the hefty rise in Government expenditure from $4.1 billion for fiscal year '79 to the present $10.6 billion as mentioned earlier.

The rise of $6.4 billion in revenue to be collected will have to come mainly from income tax and indirect taxes. As mentioned, these two forms of taxes account for about 65% of the increase in Government revenue. Despite the fact that Government has announced concessions, such as the suspension of payroll tax and a cut in Skills Development Fund contributions by 2% to ease the burden of our business sector so as to tide them through this present difficult economic situation and there is a projected drop in revenue from income tax, the total projected revenue of the Government remains unchanged at $10.6 billion. The total amount of revenue remains unchanged, ie to be maintained. This would mean that the loss of revenue on the concessions given and the projected lower income tax receipts will have to be made good by increasing the burden of other taxes. It must be noted that however Government shifts the burden, it cannot be denied that the burden will still ultimately fall on the people.

It would appear that in this Budget the concessions given in suspending the payroll tax and the Skills Development Fund cut by 2% and the decrease in entertainment tax will have to a certain extent be made good by the diesel tax, petrol tax, car road tax increases, unless of course, as the Member for Rochore has mentioned, the Government does not spring surprises in customs and excise tax.

As regards CPF, it is heartening to note that the CPF rate of 50% will not be increased. I support the Member for Rochore's suggestion to cut the present rate down to 40%. At this rate of contribution, it will be enough to give workers their security in old age and to purchase a home and enough for their Medisave.

My Party in the last general election has already mentioned that the 50% contribution is too high. The massive accumulated CPF funds now stand at $22 billion. This massive accumulated amount will eventually cause a lot of problems to the Government, in particular, to paying back the money when a contributor reaches 55 years of age. The suggested postponement of repayment will not solve the problems. (t is time Government laid the bare facts regarding the intended postponement of the repayment of CPF to contributors before this House.

There is a question which everybody likes to ask: how is the Government going to fund the repayments of CPF to their depositors? Is the Government funding CPF repayments through taxation? I hope the Minister in charge of CPF will enlighten us on these important points.

It was stated in the Budget statement that "education and training is the cornerstone of our economic upgrading strategy and the key to a better life for our people." Mr Speaker, Sir, can we achieve this aim under our present education system? The Minister has now given a choice to parents to choose whether they want their children to be streamed at their third year of school. Is this not an admission that there is something wrong with streaming? I would say that streaming at the third year of school is bad; it is cruel and it is humiliating to a child. The child at that tender age is not fully developed. If we look at streaming from the point of view of the psychologist, or the educationist, or even from the sociological point of view, we find that there is no justification whatsoever.

Psychologists have told us that there is such a thing as a late developer. A child at eight or nine years of age is not fully developed. He may appear to be slow at that age but when he reaches 15 or 16 years of age, he may suddenly blossom. But if he were already streamed at that early age, then he would be deprived of an education. Members of this House would certainly know who are the well known examples of late developers. Sir Winston Churchill was one of them and, of course, the other one commonly cited is Albert Einstein, the greatest physicist the world has ever known.

Again, streaming is not based on general intelligence. It is based on language ability. A child may be good in other subjects, but if he fails in the second language he is sent to the Monolingual stream. Is that fair to the child? A child at eight or nine years of age is a very sensitive person. If he were told that he is a failure, a reject, no good, this traumatic experience may be irreversible, and it would do that child more harm than good. You put the child into the Normal Stream, and once his self-image, his self-confidence is shattered, how is he going to be able to learn? Teachers will tell you that students in the Normal class are, in fact, becoming unteachable. So there is no question that a child is able to learn at his own pace. The fact is that his self-image and self-confidence has already been shattered. Mr Speaker, Sir, I hope the Minister for Education or the Minister concerned would look into this question of streaming at greater depth.

Finally, I would just like to deal with this increase in diesel tax for taxis. Now, the Minister for Communications and lnformation over the TV and the press has stated that even if the fall in demand is 20%, the taxi driver will still not suffer any loss. But we are confident, having looked at the problem very closely and very carefully for a long period of time, we are confident that it would not drop below 15%. Then we get a very contradictory statement from the Secretary-General of the NTUC, who is also the Second Deputy Prime Minister. He is reported in the press to have said that the cab fare rise was too sudden and too high and that the Ministry of Communica- tions and Information would review taxi fare increases and the new diesel tax levy. The Member for Teck Ghee has said that this is not a court house. If it were a court house, this kind of contradictory evidence would have shattered whichever side the two Members are in.

Mr Jeyaretnam: Hear! hear!

Mr Chiam See Tong: We have got two clear-cut conflicting statements. Which one is correct? Is the Minister for Communications and Information correct? Or is the Second Deputy Prime Minister's statement correct? On the one hand, one Minister has said that they have studied the matter closely, very carefully, and for a long period of time, and all their calculations and all their feedback from the taxi drivers have shown that they are confident that despite a 15% drop in occupancy, of course no traffic jams, taxi drivers will still make a higher income when the $6,600 diesel tax is imposed.

I am sure, as my learned friend, the Member for Anson, has said, this matter has been brought before the Cabinet and the Cabinet must have viewed it in the presence of the Second Deputy Prime Minister. And if the Second Deputy Prime Minister was present, or at least he could have read the Minutes of Proceedings in the Cabinet, he would have known that the Ministry of Communications had looked at the matter closely and carefully and for a long time. And if that is the case, why does he come out and say, "Well, this thing has been introduced suddenly. This is a sudden hike." It is most unbelievable. If this Government is going to be credible, I hope they would not give out such conflicting reports.

Mr Jeyaretnam: That is what you call a slip.

Mr Chiam See Tong: So this matter has caused great unhappiness amongst the taxi drivers. There are about 12,000 of them, and the diesel tax increase will contribute to the Government revenue by about $79 million. This is no small matter. I hope that the Government will come out with clearer statements. And if they are not sure of the policy, I would urge that they should altogether either drop the idea of imposing the $6,600 diesel tax or, if that cannot be helped, to increase it gradually. Thank you, Mr Speaker. 12.44 pm

Dr Augustine H. H. Tan (Whampoa): Mr Speaker, Sir, historians looking back over current events in Singapore will rightly conclude that the 80's represent a crucial period of transition. The political transition is in evidence and I shall comment on it later. Allow me now to describe the elements of the economic transition.

First of all, let me comment on the world economic conditions. Let us never forget our role in the world economy, how small we are geographically, in terms of population, what kind of area in the world we find ourselves in, how close the nearest war is to our borders, how dependent we are on world trade and investment. It would be completely foolish of Singaporeans at this juncture to turn insular,to be so concerned with domestic problems that they forget the more basic fundamentals of our survival.

What are the trends in the world economy? First, despite the economic recovery in America, Europe is still lagging behind. Japan is recovering all right. But there is fear that overall world economic recovery may shortly be aborted. There are a number of reasons for this. Firstly, among the industrial nations, there is a fundamental shift in the structure of their economies to a service-oriented economy, away from manufacturing towards services. This must bring in train stresses and strains, the lowering of productivity, the threat to world trade. Already we have seen increasing protectionism. Even as tariffs have been lowered, non-tariff barriers have come to the fore, and these non-tariff barriers which are quantitative, like orderly marketing arrangements, voluntary export restraints and so on, represent very potent threats to the world economy, especially to the viability of developing countries like ours.

More than that, we are seeing an escalation of protectionism, escalation into services. Even tourism has been subject to exit taxes and other forms of taxes. It extends also to higher technology products, an area which we have been hoping to get further into. And because of these protectionist devices and their extent (of them) foreign investment has become much more limited and this is evident in our latest figures for Singapore. It has nothing to do or little to do with domestic cost conditions. It has everything to do with world economic conditions. And if Members of this House would want economic lessons, let them turn to proper experts and not quacks.

An hon. Member: Let them pay.

Dr Augustine Tan: Well, we would not charge a fee for Members of this House. Furthermore, Sir, the industrial countries are in the process of re-industrialization, as the Minister for Finance told us. It is a curious phenomenon. It is a phenomenon born of protectionism. Because the Americans and the Europeans have raised such high import barriers they are inducing the Japanese to invest in America, in Europe, otherwise Japanese exports will be shut out from those markets. It is a very inefficient form of investment and it is a kind of investment that threatens the viability of developing countries like ours, because not only do we have to compete with countries exporting to America but we now have to compete with Japanese investments in America and in Europe.

Then there are the debt problems of developing countries which the Minister for Finance has highlighted. It is now US$900 billion and by the end of this year it will get close to US$970 billion. The sheer cost of servicing these debts alone amounts to $90 billion or more a year, a staggering sum when you compare with our GDP. We need to ask ourselves: how did these developing countries get into so much debt, so much difficulty? The reasons are not far to find, and I find the reasons very instructive for us here in Singapore, especially in this period of transition.

Firstly, it is because those countries have low savings rate and I challenge any economist anywhere to dispute this: that the basic cause of the difficulties in many countries in the world, developed and developing, is because they are saving too little. They are consuming too much. They are living off the future. Not only private citizens but governments are doing this together. It is the blind leading the blind, and they all fall into the pit together. It is irresponsible government spending, wasteful government spending. It is governmental corruption that has added to the woes of these countries. If we compare with our own country, we have much to be thankful for.

We may gripe about our high CPF rates, our high rates of savings. I am not ashamed of them. As an economist, I would tell you in this House, Sir, and the Members here, that Singapore would not be where it is today without the high savings and investment that Government policies have engendered. Singapore would not be where it is today if we had irresponsible government expenditure. Do you know the surest evidence of irresponsible government expenditure? Where it is to be found? It is to be found in the rate of inflation. And we have consistently low rates of inflation compared to the rest of the world. We have 2.6% last year or an average of 4% over the last five years as compared with double-digit inflations or compared with a thousand per cent rate of inflation in Israel. I was in Israel in November of last year and you can see the kind of economy that has to cope with 1,000% rate of inflation a year.

Do you know what it means? People are having to make trips to the bank several times a day. They postpone their payments as long as they can. Why? Because with every delay in payment there is a gain in terms of inflation. People are trying to cheat other people, and there is a lot of expenditure on bank tellers and bank clerks just to cope with the number of zeros that the cash registers have to register. In no time at all, such a rate of inflation would bring any government down. We do not need an opposition to bring this Government down if this Government is guilty of misuse of funds. The rate of inflation will be so high. People will be out in the streets. It will be revolution. It will be riots. It will be mayhem. We would not be able to debate in an orderly fashion like this in this Chamber. So I say, let us count our blessings.

But more than that, the de the developing countries poses a severe threat to the world economy. It threatens to de-stabilize the international monetary system. It threatens to bring on a depression so severe that it will make the last Great Depression look like a minor recession. These are the facts of life that we have to face up to and if we want to reduce savings at this time, where are we going to get the wherewithal to tide over a world depression of long duration, of great depth?

Yes, supporters of the Member for Potong Pasir have written to the press and have supported his position on growing vegetables and rearing chickens. Yes, we have in a sense made fun of his proposal. But what is the reality? The reality is, we do not have the land. We would like to rear chickens. I like to rear chickens. I am growing vegetables in my garden for the information of the Member for Potong Pasir, but I do it as a hobby. We cannot be self-sufficient if we try to grow our own food. It is just impossible. Let us have a public debate. Let us have the facts and figures. Let us not beguile the public with simple statements that look good.

If we could survive a great depression by rearing chickens and growing vegetables, Mr Speaker, Sir, the world would be in a better position. It would be in a very blessed position. We would have no problems. We would not have to agonize over the possibility of a great depression. It is going to be that $22 billion worth of reserves that we have that is going to tide us over some years of a great depression. Make no mistake about it.

Associated with these problems are the currency gyrations that we see in a world economy today. These currency gyrations, instability in exchange rates, are threatening the world economy in ways which are not evident. They are bringing on added protectionism. They add to the cost of our exporters and our importers as well. When you export a good and you do not get payment until three months later, in the meantime, the exchange rate has moved against you, you have to bear the cost, the risks of the exchange rate change. These, Mr Speaker, Sir, are the real cost, real threats that our people have to face up to.

Let us not play shadow boxing. Let us not set up straw man to punch and so on. Let us not try to assign blame where blame is not due. Yes, there are certain things about Government policies that may need correction and I will come to some of those later but let us first put things in perspective, as the Member for Leng Kee exhorted us yesterday.

I was reading in the papers, Sir, that the United States, the economic super-power in the world, for the first time this year may become a nett debtor to the rest of the world. You think about it. Their government is in debt every year to the tune of US$200 billion. That has had the result of pushing up interest rates all over the world. They have had to borrow money from the rest of the world and paradoxically the US dollar has gone up in value. For how long, it is anybody's guess. The bankers and the currency traders will tell you that they are holding their breath. They never know when the dollar is going to come plummeting down. It is a fool's paradise people are living in. President Reagan would like to have a Singapore-style budget. He would like not to have to worry about a deficit of this sort. He would like to have a surplus that we have in Singapore. It is a much more pleasant situation, much easier to govern under such conditions. Given these difficulties, we have got to be aggressive. We have got to have initiative. We have got to be innovative in searching out new markets, new opportunities in the world economy.

Next, Sir, let me talk about the public sector here in Singapore. The achievements of full employment, low inflation, balance of payments surpluses, public sector surpluses, these are no accident. We come back to the same point that I made earlier. Because of high savings rates, because of responsible government expenditure, because of emphasis on development rather than on recurrent expenditure, we have gotten to the place today, a very blessed position, a position that many countries in the world would like to be in. We take our jobs for granted. Our people just move from job to job. I like to talk to my former students, graduates from the University. Three years after graduation, many of them have had three to four jobs and with each job they get promotion and they get a higher salary. That is not exactly desirable but that illustrates for us the opportunities available to our people here in Singapore. Again, opportunities that we take for granted. Perhaps we should send truck-loads or plane-loads of young people to Europe, maybe not in a little Volkswagen, but in a bus trip across Europe. It will open their eyes to see what unemployment means - the degradation, the shame of unemployment, having to live on the dole, on subsidies from the Government, on handouts. I thank God we are not that kind of country, not that kind of economy, and let us keep it that way.

When we want to advocate measures, like reducing CPF, if we are really genuinely concerned about the poor, the low-income group, let us be mindful that it is precisely the low-income group that need their CPF savings most of all.

An hon. Member: Hear, hear!

Dr Augustine Tan: They are the ones that depend completely on the CPF savings to finance their purchase of HDB flats. They are the ones that are in danger of not having enough CPF balances at age 55. I challenge anybody to contradict what I am saying and produce figures to show me I am wrong. And we are concerned. Government wants to help the lowest 15-20% of the population. And how can we uplift their standards of living if we want them to spend more and discourage them from saving? How can we do it? So I say, be careful what we advocate here in this House. It is superficially appealing but it is going to hurt a lot of people, the very people we claim we want to help.

Sir, the Government is moving towards what may be called privatization. I think this is all to the good and as the Minister of State for Defence and Trade and Industry ---

Mr Speaker: Order. It is 1.00 pm. This Sitting is suspended until 2.30 pm.

Sitting accordingly suspended at 1.00 pm until 2.30 pm. Sitting resumed at 2.30 pm