USE OF CPF SAVINGS FOR CHILDREN'S EDUCATION

Mr Leong Horn Kee asked the Acting Minister for Labour, as the Government is considering allowing Central Provident Fund savings to be used for various forms of investments, whether he will also consider allowing CPF savings to be used for children's education such as tertiary education or specialised technical/professional training which is a form of capital investment.

The Acting Minister for Labour (Mr Lee Yock Suan): Mr Deputy Speaker, Sir, this question was raised in the last budget debate. My reply then was that we should first look at other alternatives, such as more liberal granting of scholarships and bursaries as well as the possibility of providing interest-free loans to those who qualify for admission to our universities. This way we avoid eating into the low CPF savings of many parents who require the savings for their own financial security and for home ownership. This basically is still my position. We should not lose sight of the priorities of the CPF scheme which are to provide members with financial security and to enable them to own their homes. These priorities must first be met before we consider other possibilities.

Mr Chng Hee Kok (Radin Mas): Sir, will the Acting Minister consider the use of CPF savings for the contributors' own education in approved courses?

Mr Lee Yock Suan: Sir, my answer will apply to that situation as well,

Mr Leong Horn Kee (Thomson): Sir, may I ask the Minister whether he would consider certain arrangements which would help to alleviate the concern he has about the need to safeguard that there are enough savings for old age? For example, the amount that can be used for education can be limited to a certain percentage; or if the parent has used his CPF fund for the child's education, then later on when the child starts work he will be required to pay back that portion of the CPF from his own CPF contributions.

Mr Lee Yock Suan: Mr Deputy Speaker, Sir, I think the better approach would be to try not to touch the CPF savings if there are other alternatives. My position is that we should bear in mind the priorities. Having done so, and if they are satisfied, then we can look at other possibilities.

Mr Tang See Chim (Chua Chu Kang): Sir, if the CPF holder is now allowed to buy a second property with his CPF, why can he not use his CPF for the education of his children? And what better protection for old age than a well educated child who is prepared to look after the parents in their old age!

Mr Lee Yock Suan: Mr Deputy Speaker, Sir, I am not saying that we will not consider the various possibilities. I am saying that we will have to bear in mind the priorities and if they are satisfied, then we will look at other possibilities.

Mr Tang See Chim: Sir, is the Minister going to look into it right away, or just saying this and forgetting about it afterwards?

Mr Lee Yock Suan: There is a committee in my Ministry which is looking into the CPF question, and we will look at the various possibilities.

Maj Fong Sip Chee: Mr Deputy Speaker, Sir, this is an old question. From the answer given by the Minister on the question of priority, I would ask the Minister whether he would agree that at this moment the priority is to allow members to own a second property rather than allowing them to use the extra money for the education of his children. Does the Minister agree that in the situation where a member has no alternative, instead of putting the money in the CPF deposit he would rather use it to acquire a second property, since he cannot use it for his children's education? May I ask the Minister whether he has got his priorities correct?

Mr Lee Yock Suan: Sir, the answer is yes, we have got our priorities correct. The difference between investment in properties and education is, of course, that you are in fact transferring the benefit of the latter to another person. I am not saying that education is not a form of investment. It is. But there are various alternatives available, such as the one suggested by the former Minister for Finance, like interest-free loans. I think this should really be looked into because the CPF savings of a lot of the older members are, in fact, quite low. For example, about 68% have less than $20,000 each in their CPF balance. So we will have to examine all the various possibilities before considering what should be done.

Mr Heng Chiang Meng: Sir, is the Minister not aware that the losses of those CPF members who have used their balances to buy houses during the last two years have been very much more than they would have been had they (the members) used the money for their children's education?

Mr Lee Yock Suan: Sir, any form of investment carries some risks. But I think we should look at investment in properties over the long-term, and the expectation is that, over the long-term, they will be worthwhile investments.

Mr Heng Chiang Meng: Sir, is the Minister of the opinion that the probability of losing the CPF balances from education is very much higher than the probability of losing from property investments?

The Minister for Foreign Affairs and Minister for Community Development and Leader of the House (Mr S. Dhanabalan): Point of order. I think it is quite clear in the Standing Orders that Ministers cannot be asked to express their opinion. Supplementary questions must address very clearly to the original Question and not ask Ministers to express opinions on all kinds of unrelated matters.

Mr Heng Chiang Meng: Mr Deputy Speaker, Sir, I would like to raise a point of clarification. The Minister has said that it is a matter -

Mr Deputy Speaker: Can you frame your question, please?

Mr Heng Chiang Meng: Point of clarification, Sir, on the Leader of the House's point of order.

Mr Deputy Speaker: What do you wish to clarify?

Mr Heng Chiang Meng: I am not asking a question, but I would like to state a point of clarification on my question.

Mr Deputy Speaker: This is the time for supplementary questions. Could you frame your supplementary question, please.

Mr Tang See Chim: Sir, this supplementary question is directly related to the education of the CPF members' children, and I think it is a proper question to be put to the Minister and the Minister should really answer it.

Mr Deputy Speaker: The Standing Order provides that a question shall not contain arguments, inferences, opinions, etc. I suggest Members frame their questions in a proper manner. Any more supplementary questions?

Mr Tang See Chim: Yes, Sir. Arising out of the Minister's answer that Government has got to consider the priorities, would the Minister appreciate that surely the CPF member himself would know his priorities better than the Government as to how to put his money to better use?

Mr Lee Yock Suan: I do not know whether it is a relevant question because he is merely expressing his own opinion on the issue.