MAIN AND DEVELOPMENT ESTIMATES OF SINGAPORE FOR THE FINANCIAL YEAR 1ST APRIL, 1987 TO 31ST MARCH, 1988

Order read for consideration in Committee of Supply [5th Allotted Day].

[Mr Deputy Speaker in the Chair]

Head I -

Resumption of Debate on Question [20th March, 1987],

"That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IA-01 of the Main Estimates." - [Mr Lai Tha Chai].

Question again proposed. 11.23 am

Mr Chiam See Tong (Potong Pasir): Thank you, Mr Chairman. I said at the close of the last sitting of this House that our local journalists are a talented lot. They are good. But unfortunately, as I have mentioned, they cannot work objectively because of the difficult conditions in which they have to work and they have to work also under difficult constraints. I believe they are unable to exercise their own professional judgment, in particular on political and other sensitive matters. That is the very reason why they cannot be objective.

I was about to cite an example the last time when the time was up. This is the case of a very senior journalist. I believe he was also a sub-editor in the Straits Times. He specializes in political reporting. I came to know of him the first time only when I entered the political arena. But before that I was reading his articles and I thought that he had a high proficiency in his craft and I respected him for that. The first time I met him was when he attended our first press conference of my Party. In fact, I felt flattered to have his presence.

Then there was this bye-election in 1981. My Party and I were active at that bye-election and I believe this very senior reporter was also doing his work at Anson. And I am sure he knew the mood of the voters just as I knew the ground at that time. My assessment of the situation was that there was a 50-50 chance for the Opposition to win and I am sure that senior reporter also knew that. But on polling day, what did he write? Under his own name, he reported in the front page of the Straits Times under this headline, "PAP will win". That was his assessment of the situation. Of course, we know the result. The PAP candidate lost and that candidate has never been heard of since. But that is another matter.

Where was the objectivity of that reporter? Where was his professionalism?

Dr Yeo Ning Hong: Mr Deputy Speaker, Sir, on a point of clarification. If the Member is going to run down an individual outside of this House, I suggest he be man enough to repeat whatever he said outside the House.

Some hon. Members: Hear, hear!

Mr Chiam See Tong: What exactly do you want me to repeat that I have said in this House and I will repeat it, please.

Dr Yeo Ning Hong: Whatever you have just said.

Mr Chiam See Tong: What is it that you want me to repeat? I have said so many things. As you know, in a libel case you must state the exact words.

Dr Yeo Ning Hong: Mr Deputy Speaker, Sir, it is not honourable for the Member to stand in the House with all the immunity that the House provides him and for him to run down ---

Mr Chiam See Tong: I will repeat it if I know the exact words. Don't get me wrong.

Dr Yeo Ning Hong: The exact words can be read back to you rightaway.

Mr Chiam See Tong: All right. What is it that you want me to repeat? Let me know.

Dr Yeo Ning Hong: Can you please give us the words that have been said, the last portion about the senior reporter who is a sub-editor and did not report objectively? Mr Deputy Speaker, Sir, according to my recollection, the Member was talking about a sub-editor who had a point of view and then reported differently, not objectively.

Mr Chiam See Tong: If you will just repeat the words, I will take it down and I will repeat it outside.

An hon. Member: You said it.

Mr Chiam See Tong: I will repeat that. I have got nothing to fear.

Dr Koh Lip Lin: Outside this House, not inside.

Mr Chiam See Tong: Please don't show your temper.

The Leader of the House (Mr Wong Kan Seng): Point of order, Sir. I think we can easily ask the Parliamentary reporter to get those words out at the end of the day. And then we can ask the Member to repeat them, rather than spending so much time arguing about this now.

Mr Chiam See Tong: Mr Chairman, as the Hon. Minister would know, I must know the exact words what he wants me to repeat and I will repeat it outside this House, if they were my words.

Dr Yeo Ning Hong: Your words have been recorded.

Mr Chiam See Tong: Let me have the words that you want me to repeat. We cannot have some vague accusations in this House. I will not tolerate that. [Interruptions].

The Chairman: Order.

Mr Chiam See Tong: I am saying that there is no objectivity in our press reporting because they are working under certain constraints. And this reporter is an experienced reporter. He has been reporting on political matters for a long time and I am sure he knows of the ground at the Anson bye-election in 1981. And if he knows of the ground, why did he say, in the front page, that the PAP will win? Unless, of course, he is not proficient, which I am not saying that. I am sure he knows exactly what the situation is. I am saying that our reporters are not able to report objectively because of the constraints in which they have to work under. I believe up till today that senior reporter at the bottom of his heart, I am sure he still felt that Mr Jeyaretnam had a chance to win. But under the constraints in which he was working, he was unable to say that. There is nothing wrong with the majority of our reporters, I have said that.

The Chairman: Order, Mr Chiam. You are engaging in irrelevant repetition. Could you please proceed with something new or else return to your seat?

Mr Chiam See Tong: I have said this Government has got two standards. I do not think they will allow any newspaper companies to have an independent editorial policy. They will not allow that. We have seen examples of at least three papers which have suffered the wrath of this Government - Nanyang Siang Pau, The Singapore Herald and the Eastern Sun. But let us look at what the Prime Minister had to say when he was in the Opposition in the Malaysian Parliament. He asked of the Federal Information Minister this question. He asked whether the Minister's duty was to produce closed minds or open minds "because these instruments, the mass media, TV, Radio, can produce either the open mind receptive to ideas and ideals, a democratic system of life or closed limited minds. I know the open debate is a painful process for closed minds, but let me make this one point, that 5 million adult minds in Malaysia cannot be closed. Definitely, not in the lifetime of the people in authority. It is not possible because whatever the faults of the colonial system it generated the open mind, the inquiring mind."

Sir, let us have this standard here in our press and in our mass media. Let them have some leeway in their judgment. Let them have more independence in their editorial policies. Let us have real debates in the press and not the ones that we see which are only one-sided.

Dr Yeo Ning Hong: Mr Deputy Speaker, Sir, let me respond to the points raised by the Member for Henderson.

Mr Chiam See Tong: Member for Potong Pasir.

Dr Yeo Ning Hong: Henderson.

Mr Chiam See Tong: I am sorry. I thought I heard you say "Anson".

Dr Yeo Ning Hong: Mr Deputy Speaker, Sir, as the Member for Henderson has rightly pointed out in his comments on Friday, in today's interdependent world, good transportation and communication links between countries are extremely important. They are the basic essentials for growth, for trade, for the booming of economies. For us in Singapore, we have promoted close interconnection with as many countries as possible. We continue to receive inquiries for the starting of new air service agreement as well as for the liberalizing of air services agreement previously concluded. Many countries wish to establish closer links with us in order to encourage more trade and more tourist flow. A neighbouring country just recently has spoken to us on this subject. They are very keen to introduce air services between Singapore and their lesser known resorts so that the 2 1/2 million Singaporeans who are becoming progressively more affluent would be able to visit these resorts more easily. They are also at the same time, with these air services made easily available, able to tap the large pool of tourists that we have in Singapore, some 3 million tourists each year, some of whom make side-trips to these other countries.

Sir, we welcome this proposal and the officials of our two countries are currently working towards developing such air services linking the less well-known resorts to Singapore.

World-wide the trend is also towards much greater air links as well as towards much more liberal air service agreements, providing for the greater convenience for air travel and movement of goods.

Last year we liberalized six air services agreements and concluded a new one with another country. Seven countries have increased services and another one has started flying into Singapore. This year, and this is only the end of March, we have already concluded two new air services agreements. Indeed, Members would have remembered reading last week an air service agreement concluded with the United Arab Emirates.

As for the number of airlines flying into Singapore, there are at the moment 44 international airlines flying into Singapore from all parts of the world. They provide us with links to about 88 cities in 51 countries. These airlines must have good reasons for wanting to come to Singapore. One of the best reasons is the ease with which passengers can inter-connect between one airline to another and hence be able to go to practically every part of the world with the minimum of delay. We continue to welcome these airlines to Singapore. Many other airlines, both scheduled as well as chartered, have also expressed interest in wanting to start new services in Singapore. Members will also recall last month a domestic airline in Japan (Toa Airline) has also indicated great interest in flying chartered flights to Singapore.

Sir, our experience in the past with countries where air services were terminated has been very positive. Terminations invariably resulted in negotiations which led to greater number of flights for both parties under more liberal conditions.

Sir, I come now to the Member for Potong Pasir. For the greater part of 15 minutes on Friday, the Member was castigating the local press, attacking the local press, for being bias, being unfair, practising double standards and so on. That is to be expected. It is old tune that is sung on numerous occasions. He has got nothing new to say. He complained about the press not printing his letters and then later on when asked by the Minister for Home Affairs he told us that he did not write because he knew that they were not going to print anyway. So now we know. Sir, then suddenly two minutes before adjournment the Member jumped up and started praising the press. That was totally new.

Mr Chiam See Tong: Praising the journalists.

Dr Yeo Ning Hong: Praising the journalists, which is the same as the press.

Mr Chiam See Tong: Not the same. I would like to ask the Minister whether the journalists determine editorial policy in the newspapers?

Dr Yeo Ning Hong: Yes. Editorial policies are determined by the editors who are journalists. Sir, suddenly we have him praising the press.

Mr Chiam See Tong: Praising the journalists.

Dr Yeo Ning Hong: We have him suddenly praising the journalists, if that makes him any happier. And his praise was lavish. He was saying that our journalists can be compared with the best in the world. We see an example of a split personality. A moment ago, condemning the press and the journalists, a moment later praising them sky high.

Mr Chiam See Tong: Mr Chairman, Sir, can I just clarify?

The Chairman: Dr Yeo, are you giving way?

Dr Yeo Ning Hong: No, Sir.

The Chairman: Mr Chiam, the Minister is not giving way.

Mr Chiam See Tong: I always give way to him.

Dr Yeo Ning Hong: I give way to you too.

Mr Chiam See Tong resumed his seat.

Dr Yeo Ning Hong: Sir, what we are seeing is a display of somersaulting of views, representative of schizophrenia.

Mr Chiam See Tong: Repeat it outside of Parliament.

Dr Yeo Ning Hong: Sir, the Member is present in the House. If he wants to, he is well able to defend himself. Then this morning again, Sir ---

Mr Chiam See Tong: Can I have a clarification?

The Chairman: Dr Yeo is not giving way.

Mr Chiam See Tong: Are you accusing me of suffering from schizophrenia?

Dr Yeo Ning Hong: No, I am not accusing you of schizophrenia.

Sir, this morning we are back to the old Member for Potong Pasir again. The Member for Potong Pasir that attacked the Press. It is not at all unexpected. From the way he debates we expect that, from attacking the press generally, he will move on to attacking individuals. And a moment ago we have him standing up and telling us about a particular journalist who spoke to him, a sub-editor, a senior journalist in his words, who knew the truth about the situation and wrote an article, not conveying that same truth. Sir, I stood up a moment ago and pointed out that the Member should not be attacking individuals. If he wants to attack the press, let him do so. If he wishes to attack the Government, let him do so. The Government will reply. But when he attacks a specific individual, he should be man enough to repeat outside whatever he says in this House so that that particular sub-editor will have the opportunity to defend himself and defend his good name. That is what we expect of hon. Members in this House. He can continue to attack anyone of us in this House, whether he is a Minister or a Backbencher, we are here to reply. But he should not, (I repeat) he should not attack somebody outside of this House.

Mr Chiam See Tong: Mr Chairman, the Minister has accused me of attacking an individual of the press in this House. The thrust of my argument is that there is no objectivity amongst our journalists because they are working under certain constraints. I am giving this as an example. Does the Minister agree with me that our journalists are, in fact, working under certain constraints? They cannot exercise their professional judgment completely. Does the Minister agree with me on that?

Dr Yeo Ning Hong: Sir, the Member did attack a specific individual and we shall be looking at the records this evening. When the records are available, I would suggest that he would either apologize to the particular individual, the senior sub-editor, or he should repeat it outside of this House.

Mr Chiam See Tong: I have a question for the Minister. Can you please answer my question?

Dr Yeo Ning Hong: Mr Deputy Speaker, Sir, to the best of my knowledge, the journalists in the newspapers work together with the editors. What instructions they get from the editors is the business of the newspapers.

Mr Chiam See Tong: I would like to know from the Minister whether, in our present Singapore context, a local journalist is able to exercise his professional judgment unhampered. That is what I want to know. Can the Minister please answer this question?

Dr Yeo Ning Hong: In my view, yes, very much so.

Mr Chiam See Tong: All right.

Dr Yeo Ning Hong: Unless the Member is going to provide evidence that there are reporters who are not reporting the truth, as he claimed in this specific instance.

Mr Chiam See Tong: I am not saying the truth or not the truth. How are we going to know an election result before it is announced? We can only exercise a judgment and I am saying that this reporter has not exercised his professional judgment in that particular case. That is my point. It is not a question of truth. How can you know the truth when the results are not announced? I am asking the Minister that particular question: whether or not a local journalist is able to exercise his professional judgment unhindered. And he says yes.

Now I am going to ask him the next question. If that is the case, we were surprised on Friday to hear the Prime Minister giving me some kind of an assurance. He said, "Mr Chiam, we on this side of the House will ensure that whatever rebuttals you are going to make to the press it will be published accordingly." If that kind of a statement coming from the Prime Minister ---

Prof. S. Jayakumar: Mr Chairman, Sir, can I seek a point of clarification?

Mr Chiam See Tong: I am not attacking the Prime Minister.

Prof. Jayakumar: Because he is misquoting the Prime Minister.

The Chairman: Mr Chiam, will you allow the clarification to be made?

Mr Chiam See Tong resumed his seat.

Prof. Jayakumar: Mr Deputy Speaker, Sir, I was present when the Prime Minister spoke and, if I remember correctly, what the Prime Minister said was that the same right that we insist of replying to the Asian Wall Street Journal, we would also support the right of the Member for Potong Pasir. If he sought to exercise that right, we would support him. That is all that was said.

Mr Chiam See Tong: Sir, I think that amounts to plenty as far as I am concerned.

Prof. Jayakumar: Don't misquote the Prime Minister.

Mr Chiam See Tong: There is some kind of an indication given to a private company which has got nothing to do with the Government. An indication has been given to an entirely different body. Am I correct on that?

Prof. Jayakumar: Mr Deputy Speaker, Sir, there is a world of difference. It is a position of principle. The Singapore Government maintains a position of principle - that where Government policies are misrepresented, inaccurately reported or distorted by any publication, whether in Singapore or outside, the Government, as a matter of principle, insists that they should publish a right of reply. In the debate which took place a few days ago, the Member for Potong Pasir appeared to imply that the local press misquoted him or misreported him. He said the Prime Minister said the same position of principle which we adhere to, we would support if he wanted to adopt that as a principle also with regard to any publication, whether in Singapore or outside. It is a position of principle.

Mr Chiam See Tong: I agree with that principle.

Prof. Jayakumar: Good.

Mr Chiam See Tong: What I was saying was that I was never rightly reported in the press. You just look at the headlines. Will the Minister just give one instance where there is a headline, even of a very small report, that is flattering of the Opposition? Can you quote me just one instance?

Prof. Jayakumar: Sir, I rose to make one correction, and that is, the Member for Potong Pasir had misquoted the Prime Minister. That was the only reason I rose to make sure that this misquotation of the Prime Minister does not get off scot-free. Whether he wants the papers to flatter him or not, I leave it to the newspapers.

Mr Chiam See Tong: Sir, what I am saying is that the Prime Minister has in this House indicated to the press that if I should reply to the Straits Times or perhaps the Nanyang Siang Pau probably my reply would be printed in full. Is that not the correct position? Some kind of an indication to the press ---

Prof. Jayakumar: To support your right.

Mr Chiam See Tong: --- that from now on, whatever I publish they would not cut out.

Mr Tang See Chim (Chua Chu Kang): Mr Deputy Speaker, Sir, on a point of order. If a Member persists in telling a blatant falsehood, he must be made to withdraw it straightaway instead of being allowed to continue with it. May I suggest, Sir, that you direct that he withdraws the falsehood.

The Chairman: Mr Chiam, please proceed with your speech.

Mr Chiam See Tong: Sir, what am I expected to withdraw?

The Chairman: Proceed with your speech, please. Just avoid tedious repetition.

Mr Chiam See Tong: I am not speaking. I have already finished speaking.

The Chairman: All right, you have finished speaking. Dr Yeo.

Mr Chiam See Tong: I assume I was given only 10 minutes. I have got eight minutes left after taking up ---

The Chairman: Yes, your time is up already.

Mr Chiam See Tong: Unless you want to give me more time.

Mr Tang See Chim: Mr Deputy Speaker, Sir, point of order again. The falsehood is that he persists in misquoting the Prime Minister.

The Chairman: That has been clarified by Prof. Jayakumar. Dr Yeo.

Dr Yeo Ning Hong: Sir, the Member has been going round and round saying more or less the same thing. The only one point that has not been responded to is the so-called non-independent editorial policy of the newspapers. Again, I ask the Member for Potong Pasir if he is prepared to say outside of this House that the editors are not operating their own independent editorial policies. We are talking about small numbers of people now, no longer the press in general which we will allow the Member for Potong Pasir to get away with. He can smear the entire press. But when he starts narrowing down and starts smearing smaller and smaller numbers of people, and going on to individuals, then I think he owes it to the members outside of this House to repeat it outside the House.

Mr Chiam See Tong: Mr Minister, first of all, I would like to make an observation. You are certainly not up to the mark of the Prime Minister.

Dr Yeo Ning Hong: Thank you.

Mr Chiam See Tong: And, please, if you want to take that line of asking me to say anything outside this House, you must know what you are saying because under the law of libel, I am sure Mr Tang will bear me out, you must say the exact words that you want me to repeat. No court of law will uphold just some vague impressions or vague ideas. You must have the exact words. So if you want me to repeat the exact words, let me know.

Dr Yeo Ning Hong: Sir, my advice to the Member for Potong Pasir is that he be extremely careful with the words that he said because the more he says the more words will be quoted back to him tomorrow. I shall arrange for a copy of it to be made available to the House and then I shall point out the words that he ought to repeat outside the House if he wishes to continue.

Mr Chiam See Tong: Sir, if I repeat outside the House and if it is not libellous, what will the Minister say then? Unless you are sure of something, do not make me do it. You cannot ask me just to go and repeat something which is what I said in the House. Unless you are certain that what I said is libellous ---

The Chairman: Order. Mr Chiam. That is a hypothetical question. It is not allowed. Have you finished, Dr Yeo? We have a lot of amendments to go through.

Dr Yeo Ning Hong: Just one final word, Sir. What I am asking is that the Member give the members of the public the right to defend themselves if they so wish, and that is all that I am asking.

Mr Lai Tha Chai: Sir, I think we should change the topic now. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Dr Arthur Beng Kian Lam (Fengshan): Sir, I beg to move,

That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IC-01-1210 of the Main Estimates.

Sir, I wish to speak, first, on the subject of integration of land transport. Since the 1960s, the bus services have undergone a radical transformation. From inefficient, fragmented bus companies, integration and mergers took place. Today, we have two major bus companies with a modern fleet of buses providing an efficient bus service. This fleet is supplemented by the Scheme B buses.

The Minister for Communications and Information has stated in Parliament on 16th March 1987 that unless there is integration of bus and train services, when the MRT comes on-line in December, there will be serious wastage. Total public transport operating costs will go up by about 15% in Phases I and IA and 30% in Phase II of the MRT implementation unless there is integration of the two services.

Sir, one million people use the bus services every day. When Phases I and IA are fully operational by April 1988, the MRT is expected to carry about 12.5% of public transport trips. By 1990, the MRT will carry 25% of such trips. Moreover, many of these MRT passengers will be using more than one mode of transport for a trip. Thus, it can be seen that even after the MRT becomes fully operational in 1990, the commuting public will still be heavily dependent on buses. It is important to realize that one of the primary goals of integration must be to see that the viability of both the bus operators and the Singapore MRT Ltd are ensured, while also ensuring that a safe, convenient and affordable transport system is available to the public.

Sir, as the bus companies are private companies and it is the intention to privatize the MRT, we must realize that the managements of these companies will have an obligation to their shareholders to show good profits. So we can imagine that in the integration exercise, there will be conflicting interests. The operations of the MRT will mean a scaling down of bus services to reduce wastage. Will all these come about naturally and amicably?

Sir, I must congratulate the Minister for not only having built the MRT ahead of schedule and within budget but also for his foresight and insight to the problems that will arise with the MRT coming on-line. Sir, there is now an Integration Committee studying the problems of total integration of bus and rail services. The Committee consists of the three main operators - SBS, MRTC and TIBS and MCI officials. Under this Committee, there is a Technical Sub-Committee and an Integration Task Force. However, Sir, I would like the House to note:

1. That the consumer is not represented on this Committee and this is obviously undesirable; and

2. That the consultants to this project are paid for by the operators. This is also undesirable as the consultants may be in an awkward position of being answerable to three bosses and as the saying goes "He who pays the piper calls the tune."

Sir, up to the present time, from what has been announced by the Minister, we can assume that all the operators are cooperating amicably and that public interest has been well guarded. I will, however, feel more comfortable if there is a public transport authority that the operators are held accountable to. This authority will have members drawn from the Ministry of Communications and Information, knowledgeable experts in the field of transportation and representatives from the NTUC and even Town Councils to protect public interests. The operators should not be members of this authority but when disagreements arise (and they will as integration will be an on-going exercise) they can make representations to this authority. This authority will ensure that the process of integration will receive priority and continuing attention. This is crucial as negotiations for routes and fare-sharing are not a one-time decision but require continuing discussion.

Sir, in other countries, there are models of such authorities. In Victoria, Australia, there is a Transport Directorate attached to the State Ministry of Transport. This directorate plans and coordinates the work of four authorities covering both the private and public sectors: The Metropolitian Transit Authority (Bus and Rail Services), State Transport (Rail Services), Road Construction and Road Traffic.

In Hamburg, Germany, there is integration of three bus operators, the Federal railway, the local railway and 11 ferry routes under a supervisory board called HVV. HVV has established a system of interchangeable tickets and integrated services with an overall passenger information system and even a park and ride scheme. The Hamburg model is one which is being studied by authorities all over the world.

Sir, if the Minister will consider the setting up of a permanent public transport authority under the jurisdiction of the Ministry of Communications and Information with statutory powers to coordinate services, I will support any increase in budget that will be necessary to oversee this function. It is my firm belief that this is the best insurance to long-term price stability and an efficient transport system. This is too important an issue to be left to the discretion of public transport operators only.

Sir, as Singapore is a small city state, we should also try to include taxis into our concept of land transport integration as taxis have an important role to play. We have approximately four major taxi operators operating a very efficient taxi fleet. My colleague, the hon. Member for Bukit Timah, will elaborate on this further. If we can succeed in this, we would be the first in the world to have a really comprehensive integrated land transport service.

I wish next to make some comments on the privatization of the operations of the MRT. Sir, I support the privatization plan but I would like to suggest that privatization of the MRT should be deferred to a later date for the following reasons: (1) When the MRT trains come on-line, the bus companies will have to re-adjust the management of their fleets. Essentially, it will mean a contraction of their fleets. (2) The MRT trains will come on-line in phases and the whole system will only be operational in 1990. Will Singapore MRT Ltd make a profit on partial operations in 1988 and 1989? (3) We would be seeing a situation that SBS and TIBS will actually be shrinking while SMRT will be expanding. If all three companies are privatized, would not all three companies want to keep shareholders happy? Would this not impede integration or result in a higher cost to the public? Should we not wait till the whole picture is clearer regarding public transport before privatizing the MRT?

Sir, the Public Sector Divestment Committee recommended four other statutory boards for further study with a view to privatization. Three belong to MCI, namely, CAAS, PSA and Telecoms. It is noteworthy that the Committee did not recommend the privatization of HDB or SBC. Why? For obvious reasons. Because who will want to buy shares in a statutory board that is not making money.

Sir, while there are good reasons for privatization, we must also be cautious. This is because the money-making statutory boards are national assets. They belong to the people. Because they are viable businesses, they have been able to pass back savings to us, the users, time and again, but as statutory boards. Will a private company want to pass back profits to the public or to shareholders? Safeguards must be set in place to protect the public before we merrily privatize all our national assets. Let us also remember that henceforth the profits of statutory boards will be taxed and that these additional earnings may even lead to a postponement of consumption tax, as has been stated by the Minister for Finance. Let us not be hasty. Let us be cautious in privatization of the whole statutory board. Perhaps we should first start with the privatization of non-essential services of these boards. Would the Minister like to comment on the plans of privatizing the statutory boards under his Ministry as they are some of the most lucrative?

Dr Yeo Ning Hong: Mr Deputy Speaker, Sir, the Member for Fengshan touched on a number of points.

The Member suggested the possibility of setting up an authority to oversee the integration. Up until now, a Committee has already been formed. This is not the formal statutory authority, as suggested by the Member for Fengshan, but a closed Working Committee with representatives from the MRTC and the bus companies, in particular SBS and TIBS. The Member for Fengshan asked for names of the committee. I indicated that I would provide him with that. Sir, with your permission, I would like to circulate the names of the Committee (Cols. 903 - 904), together with the names of the Physical Infrastructure Integration Committee, made up of representatives from a large number of different bodies. [Copies of documents circulated to hon. Members.] Committee - MRT/BUS INTEGRATION COMMITTEE MEMBERS (Cols. 903 - 904)

Sir, up until now, they have worked together very closely with the common objective of ensuring that, having built the MRT, we will have it available and running soonest possible because we do not want to have a large amount of capital tied down, unable to have the trains start running, that we are delayed as a result of a lot of red tape, that we are delayed because many of the things that could have been resolved quickly and amicably have to go through a lot of processes at the different stages. Up until now, things have worked very well and I would like to state the Ministry's position that, if at all possible, we would like to have this continued without any disruption so that we will not delay the running of the MRT trains end of this year, in December. However, since the Member has raised it, my Ministry will take note of it and look at the issue very carefully, and if there should be advantages in formalizing this Committee or to convert it into one where there is much wider representation, the Ministry will certainly consider it.

The Member asked about taxis and how they could be integrated. As I mentioned in the reply to questions raised the other day, taxis do not operate fixed routes. They are a personalized service, more akin to cars than to buses and trains. However, the Physical Infrastructure Integration Committee has representation from the taxi operators, from NTUC Comfort. Their job is to ensure that there are all these physical facilities at the MRT stations, wherever possible, so that it would be convenient for commuters to switch from one mode of transportation, whether it is from buses or from taxis, over to the MRT trains.

The Member also raised the question of privatization, whether we ought to delay privatization of the MRT operating company. Sir, the objective is, if at all possible, to start off with a clean slate - have the company, have it listed, and have it operating the trains all from the very start. However, as I indicated the other day, we have only about nine months to go. The consultants have not completed their studies. They are about half way through. If they can complete it and if the company looks viable, that it is going to make a profit right from the word "Go", it is going to be possible to privatize it. If the consultants are unable to complete their studies because financial implications have not been completely resolved, then we may have to delay it for a while. But the Ministry's preference is to start off, if at all possible, on a clean slate.

Sir, I have indicated that economially, the trains would be viable. The important thing is to keep the costs down, and that is something that the consultants and the MRTC are working very hard at.

Talking about privatization in general: yes, the statutory boards in the Ministry of Communications and Information are the more successful statutory boards. They have been making reasonable returns and therefore have been indicated as candidates that are worthy of closer study. My Ministry will arrange for these statutory boards that have been recommended by the Divestment Committee to have these studied carefully.

Sir, I share the Member's point of view that it is extremely important that we move into this exercise very, very cautiously. As the Minister for Finance has indicated earlier on in the Budget Debate, the surpluses of the statutory boards will be taken back partially by the Minister for Finance. Other operating surpluses each year will also be charged at the corporate tax rate of 33%. This represents money available to the Consolidated Fund. If we do not carefully consider the consequences, the profits of the statutory boards which are to be converted into private companies, will not go to the Consolidated Fund (collectively the citizens of Singapore) but will go to the shareholders of the private companies. So we have to be extremely careful. I take note of the Member's advice that we should proceed with this particular exercise very cautiously.

Meanwhile, Sir, the statutory boards in the Ministry will continue the process of permitting the private sector to participate in as many areas of activity as possible. We have done that quite extensively. Collectively, the three major statutory boards in the Ministry, namely, the Civil Aviation Authority of Singapore (CAAS), Telecoms and Port of Singapore Authority, have already made available approximately a billion dollars of business to the private sector for participation.

Dr Wang Kai Yuen (Bukit Timah): ( In Mandarin): Mr Chairman, Sir, allow me to touch on the MRT and taxi services. First of all, I congratulate the Minister for his able leadership for the early launching of the MRT service at the end of this year so that the people will have a new choice of commuting which will cause fundamental changes to nation-wide communication services. Buses and taxis will supply supplementary services to the MRT in the service of our people.

The challenge posed by the MRT will have an increasing burden on the minds of taxi-drivers. Let me here reflect their feelings. Mr Chairman, running a taxi is a rather tough job. Taxi drivers have to drive about in their taxis all day long. The amount of money they get depends on their effort, diligence and they are also subjected to traffic conditions, the weather and market forces. Although in recent years the conditions of taxi service and their income have been stabilized, they still cannot reach up to the standard which they enjoyed prior to April 1985 when taxi fares were drastically adjusted, resulting in a great reduction in passengers and earnings, so much so that even now their income could not still offset their losses. With the imminent service of the MRT, taxi-drivers cannot help but feel worried about the effect on their income.

Mr Chairman, I am on the board of directors of COMFORT which is the largest taxi organization in our country. I understand it is taking positive steps to counter the adverse effects of MRT on the taxi-drivers when the MRT is in service. To overcome the resulting financial constrictions, COMFORT is, on the one hand, decreasing the pool of taxis by natural attrition to counter a drop in fares. On the other hand, it has drawn up a comprehensive plan of training to upgrade the quality of taxi service. It has also started a special savings plan to overcome any future financial problems taxi drivers may face in view of the MRT service. Taxi-drivers are particularly concerned about the Ministry's policy and plans on the prices of diesel fuel which will directly affect their daily living. So you can understand their concern and worry. At the moment the tax on diesel paid by the taxi operator is an indirect allowance given to the passenger, as the lower the diesel tax paid, the less taxi fare the passenger will have to pay. Therefore, the diesel tax should be hinged on the effective income of the taxi operator and should therefore be paid by the passenger. Therefore, I would urge that before the situation arises when the MRT comes into service, the Ministry should give the taxi operators a clear-cut assurance that it would not increase the diesel tax which will affect the livelihood of the taxi operators, so that they can have peace of mind now and feel safe when the national event of the commission of the MRT arrives.

Mr S. Chandra Das (Chong Boon): Mr Chairman, Sir, since the Member for Fengshan has already touched on the question of the MRTC, I would like to inquire from the Minister on the progress made, particularly on the joint venture contracts awarded by the MRTC. Firstly, I would like to know how many such joint venture contracts have been awarded so far. Secondly, what is the value of such contracts?

Sir, of late, we have read in the newspapers of one of these joint ventures running into some problems. So I would like to know from the Minister how many such joint venture partnerships have broken up or are in trouble so far? Lastly, and more importantly, how successful has been the transfer of technology from the foreign companies to these local partnerships, as this has been the main objective in encouraging joint ventures and the award of these contracts?

Dr Wan Soon Bee (West Coast): Mr Chairman, Sir, may I have your permission to join in the debate? I am the Chairman of NTUC Comfort and I would like to declare that I have no personal pecuniary interest.

(In Mandarin) Sir, the construction of MRT, besides improving the transport system, will also enhance our image and increase national productivity. To taxi drivers, although they are concerned about the ffect of the implementation of the MRT on their livelihood for the long-term interest of the country, they understand that it is necessary for the future transportation needs of the people and the nation. Furthermore, the setting up of the MRT will enhance the confidence investors have in Singapore that will make our economy more prosperous to the benefit of all our people. We can understand their psychological mood in spite of the fact that in their rational mind they understand the need for MRT. They are worried about the effect of the MRT service on their income and livelihood. We can understand their concern and worries.

At the moment, the income of taxi drivers has stabilized. However, they will have to meet with the increasing operational expenditure, due to the rising Yen, price increases of the spare parts, repair costs and others. The income of taxi drivers has been eroded relatively by all these costs since the fare adjustment in 1985 which benefitted them.

The other day the Minister announced in the House that the MRT and bus services will be complementing each other. And the MRT will have a joint ticketing system with the bus services for the convenience of mutual commuters. When planning for the MRT, the authorities have considered the complementary role of bus services. Likewise, when implementing the MRT services, I hope the authorities can also pay attention to taxi operators' interests and how taxi services can cooperate with or complement MRT services. Has the Government taken into consideration the complementation of taxi services with the MRT? This is what the taxi drivers are very concerned about. It is also a vital link with the whole communication system that the Government should not overlook in its planning.

I am glad to learn that the PWD is considering certain basic facilities around MRT stations to enable taxi operators to have some taxi stands at various MRT stations. This is good news to both taxi drivers and the commuters. I would urge the Ministry, before implementing any policy that would affect the livelihood of taxi operators, it should liaise with the taxi organizations concerned, relating to such matters as diesel tax, fare structure and number of taxis, etc. In support of the Member for Bukit Timah's suggestion, I would also urge the Government not to increase the diesel tax before the MRT's effect on taxis is clear. Here, I would like to make a few suggestions to the Minister:

(1) There should be half-hour parking coupons to allow taxis to park for durations of less than an hour so as to reduce their cost.

(2) To set up taxi stands at all the hotels to facilitate freer movement and provide a better taxi service.

(3) To review the car pool scheme, because the present car pooling is not in consonance with the original purpose of allowing four car owners to go into the CBD in order to reduce traffic congestion. Instead, three non-car owners are being carried into the CBD. Therefore, we should review the scheme of car pooling.

Mr Chairman, let me emphasize that taxis are providing a public service. Like others, they are also making their contribution to the country and to the people. They are working hard to provide the necessary services to the commuters. But they are subject to certain occupational risks. Recently crimes have been committed against taxi drivers on public highways. This has alarmed us very much.

The Chairman: Order. Your time is up. Mr Chiam.

Mr Chiam See Tong: Sir, I have only one point to make. Before I do that, can the Minister please tell me how many passengers the SBS carry in one day?

The point I would like to bring up is that I hope the Minister would urge the bus companies to reduce their maximum fare from 80 cents to 60 cents. I believe even at 60 cents, at the higher end of the ceiling, the bus companies would make a profit.

The savings would be fairly substantial especially for those who are in the poorer group. They can save something like 20 cents a trip. That means 40 cents to and fro in one day. I think they can save up to about $10 in a month. It means a lot for those people who can hardly make ends meet at the end of the month.

I believe the bus companies can still survive and make a profit if they reduce their bus fares, from 80 to 60 cents for the maximum charge.

I understand that individual bus operators are already charging only 50 cents and they can survive. So I am suggesting 10 cents above the maximum fare the individual bus operators are charging. The SBS has almost a monopoly. They have got choice routes. And I believe someone said that Singapore is a busman's paradise. So they got more than enough fares, no shortage of passengers.

I believe they also get Government assistance in infrastructure in terms of land. Even recently, we heard in this House that bus bays are built for them. I believe the Government also allows these bus companies to have one-man operation and that saves a lot of costs for them, although it is a strain on the drivers. But nevertheless it is cost savings on the part of the bus companies. I also believe fuel price has dropped drastically, from its 1979 levels.

So all in all, I would say that there is a case for bus companies to lower their fares despite the fact that they do promise their shareholders, I believe, 7 1/2 % dividend.

Sir, I hope the Minister will take note of that.

Dr Yeo Ning Hong: Mr Deputy Speaker, Sir, time is running out. I will try to be as brief as possible with the various points that were raised.

The Member for Bukit Timah and the Member for West Coast spoke about the concern of taxi drivers with the coming into operation of the MRT trains. Sir, I share the Members' concern for the taxi drivers. As I have indicated, the taxi drivers operate a slightly different system from that of the buses. The apprehension felt by the taxi drivers with the coming operation of the trains is quite understandable. The Government will do its best to ensure that the taxi stands are available so that it will be easy for people to travel by taxis if they so wish.

Sir, the problem is not so much the MRT trains. The greater problem is the unpredictability of our economy. When the economy does not grow, then people will have less money to spend. They will then save by travelling by buses rather than taxis. So the bigger concern should not be about the MRT operations because the MRT trains will be siphoning off, taking passengers off buses, more than taking passengers off taxis, though a certain number may probably occur. What is important is to ensure that our economy continues to grow and to continue to grow at a reasonable pace. That is the best insurance for all Singaporeans, including the taxi drivers.

We will allow the transport system in Singapore, the buses, the MRT trains and the taxis, some time to settle down to the new travel pattern. People will make the appropriate adjustments.

The diesel tax has already been announced way back in 1985. That is a policy to ensure that the tax anomaly between private cars and taxis will be corrected. Sir, the Government is sensitive and conscious of the desire of the taxi drivers that the diesel tax should not be increased if their collections do not go up. This is the reason why the Government, way back in 1985, decided to impose only $1,100 instead of the original proposal for $6,600. This gradual introduction of the diesel tax permitted taxi drivers time to adjust.

Sir, I am happy to note that the incomes or collections of taxi drivers have not stagnated at the situation when the introduction of new fares was made. I am happy to note that the collections of taxi drivers have indeed improved and improved quite significantly. Before the introduction of the diesel tax and the change in taxi fares, the figure given by me for 1984 was for taxi drivers operating one shift to have an average collection per month of $2,439. For the year 1985, when the economy was in a recession, the average collection after fare adjustments were made was $2,404. This represented a drop of about 1% of the collections by the taxi drivers. When the economy recovered in 1986, by only 2% or specifically 1.9% growth in the economy, the taxi driver's collection on the average per month increased by about 9%, relative to the 1984 figures, ie $2,656. So the taxi drivers are not in the difficult position that the Member for Bukit Timah has indicated. They are now much better off than they were before. And bearing in mind that large numbers of our workers in Singapore did not have significant increases in their wages in these last two years, the taxi drivers have been reasonably well off.

As for two-shift drivers, the figure for 1984 that I gave in 1985 was $3,482 for taxis operating two shifts. Even during the recession in 1985, collection went up by about 4% to $3,612 per month. Last year, with the economy moving steadily ahead, the collection was $3,894 per month. This represents a 12% increase over the figure for 1984. So our taxi drivers had been having a reasonable time over the last year and those operating two shifts over the last two years.

Sir, as I indicated earlier, I understand their concern and the Ministry will bear in mind the views expressed by the two Members of the House, the Members for Bukit Timah and West Coast. We will take that into consideration in considering the timing for the introduction of diesel tax.

Sir, the Member for Chong Boon raised the issue of joint ventures in the MRTC. Sir, there are a total of 33 joint ventures for MRTC contracts. Just for purposes of a comparison, there are a total of 40 contracts awarded to Singapore companies and 44 awarded to foreign companies. Out of the 33, because of the relative competitiveness, only 3 joint ventures were awarded with preferential margin available to the local company. The total value of the contracts awarded to the joint ventures is approximately $2 billion. So far the joint ventures have been reasonably successful. Only one joint venture, and this is the one where there was no necessity for any preferential margin to be invoked, had some problems. But it is not going to affect our construction at all because we will be proceeding with the Japanese partner who has undertaken to carry on with the contract. So the MRT construction would not be affected at all.

Concerning the transfer of technology, there has been transfer of technology. The extent depends obviously on the individual joint ventures themselves, the ability on the part of the local partner to assimilate the technology and the extent of the joint partnership. But in practically all cases there has been very serious attempts on the part of both the local companies as well as the foreign partners to work closely in order that there will be technology transfer.

I will just mention some of the things that are carried out in the different companies to give an indication of the extent of the transfer of technology that is taking place. Foreign contractors have undertaken to have training programmes for local employees. In many cases some professional and technical staff were sent overseas for training as soon as the contracts were awarded. In other cases, senior members of the local company were placed in positions where it was possible for them to learn on the job, working closely with the foreign partner. This includes areas like project management, site organization, tunnelling technology, diaphragm walls, underpinning and a whole range of other civil engineering activities. In other cases, junior workers in the local joint venture had training courses conducted for them, supervisory staff were brought in together with the foreign partner so that they worked hand in hand together on site,learning on the job and acquiring experience. There is a long list which I do not have time to go into at the moment.

Sir, I come now to the Member for Potong Pasir. The Member for Potong Pasir has indicated that the bus companies will continue to make money if they make a reduction of fares. Sir, let me emphasize before I go into the details that bus fares, just as taxi fares, are decided by the bus companies and taxi operators. We believe this is the best way. For them to be responsible for providing their commuters, with a reasonable service at a reasonable cost. Whether the fares ought to be reduced or not is a matter for them to consider.

But I would like to point out the erroneous way at which the Member for Potong Pasir looks at the situation. Sir, at the moment, for 40 cents a bus commuter travels any distance up to four fare stages. This is approximately 3.2 km. So for 40 cents he is entitled to travel any distance up to 3.2 km. But for 80 cents a commuter can travel unlimited, 14 or more fare stages. In other words, he is able to travel more than 11 km. So already we are finding some measure of cross-subsidy where the commuters on long distances are being subsidized and being subsidized heavily by the commuters on short distances. This is an anomaly and this is something that the consultants are currently looking into.

Sir, it is not a good idea to have fares organized in such a manner that one particular group of Singaporean is cross-subsidizing another group. What we should be moving towards is a situation where commuters pay the fare that is appropriate to the distance that they travel. That way, everybody will have a much more equitable system, everybody will be getting value for the money that they pay. Just as an additional illustration of aberration that we have in the present fare system. A person travels from A to C over a particular distance, say, 6 kilometres, pays 50 cents. But if he has to make a change from A to B and from B to C, then the commuter got to pay 40 cents twice, which makes his fare 80 cents. This is obviously very unfair to the individual who has got to make that change. The objective is to move away from this system, which is presently quite anomalous and not completely equitable, to a system that is fairer where individuals pay for the distance that they travel. The important thing, Sir, is to keep the cost low. The best way of ensuring that our bus fares are kept low is to make sure that our bus companies are efficient, and that there is high productivity and that cost is kept as low as possible.

Sir, the Member asked why the supplementary buses are able to charge only 50 cents. The answer is very simple. If anybody were to travel on scheduled buses they would have noticed that the state of these buses is very different from the state of buses on the supplementary bus network. Secondly, these supplementary buses operate only the high density routes. Furthermore, they operate only during peak hours.

The Chairman: Order. Guillotine time, Dr Yeo. Dr Arthur Beng, can you withdraw your amendment? Amendment, by leave, withdrawn. The time allotted for Head I having expired, the following amendments were not proceeded with: Mr Chiam See Tong: Land Transport (4) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IC-01 of the Main Estimates. Dr Ang Kok Peng: Land Transport Enforcement (5) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IC-04-1210 of the Main Estimates. Dr Wang Kai Yuen: Mr Tang See Chim: Encik Zulkifli bin Mohammed: Public Transport (6) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IC-05 of the Main Estimates. Mr Chiam See Tong: Information Division (7) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IE-01 of the Main Estimates. Mr S. Chandra Das: Media Relations (8) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IE-02-1210 of the Main Estimates. Mr Lau Ping Sum: Media Relations (9) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IE-02-2610 of the Main Estimates. Mr Lai Tha Chai: Publications (10) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IE-03 of the Main Estimates. Psychological Defence Unit (11) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IF-03 of the Main Estimates. Financing of the Civil Aviation Authority of Singapore (12) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IG-01 of the Development Estimates. Dr Arthur Beng Kian Lam: Mr S. Chandra Das: Mr Chai Chong Yii: Financing of the Mass Rapid Transit Corporation (13) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IH-01 of the Development Estimates. Mr Chiam See Tong: Financing of the Mass Rapid Transit Corporation (14) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead IH-00 of the Development Estimates. Dr Wang Kai Yuen: Mr Chiam See Tong: Financing of the Singapore Broadcasting Corporation (15) That the sum to be allocated for Head I be reduced by $10 in respect of Subhead II-01 of the Development Estimates. The sum of $39,002,800 for Head I ordered to stand part of the Main Estimates. The sum of $1,241,446,400 for Head I ordered to stand part of the Development Estimates.

Head Q -

Mr Bernard Chen (Clementi): Sir, I beg to move,

That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QA-01-1100 of the Main Estimates*.

Sir, by way of introduction the Members of the Government Parliamentary Committee on Home Affairs include the Members for Chua Chu Kang, Eunos, Jalan Kayu, Toa Payoh and myself. We will be concentrating our efforts in the coming months to examine the major policies of the Ministry and the legislations that govern the work of the Ministry rather than going into the minute details.

We have had several meetings with the Minister and his officials and I am happy to report that we are having a more cooperative approach rather than a confrontational one in these meetings, and we look forward to more productive work in the months to come.

Sir, one of the primary roles of the Ministry of Home Affairs is the maintenance of law and order. The Police Force is responsible, of course, for the implementation of preventive measures and also enforcement of the various Acts and legislations.

In Singapore the rapid economic and social development have tended to accentuate the crime situation and this has been the experience of most major urban centres in the world where rapid development brought about a host of problems. In Singapore we are afflicted further by the kind of high-rise living in densely populated HDB estates. They have contributed to specific crimes, including house breaking, car theft, motor vehicle theft and various crimes in lifts. Bearing in mind that more than 80% of our population now stay in these estates and with the prospect that this percentage is likely to increase in the coming years, one can assume that unless there are adequate enforcement efforts, the incidence of crime must increase at times.

In this regard, there are two major areas of policies that are of concern. Firstly, the effectiveness of our legislations to empower the Police to carry out their duties effectively. Presently there are 15 Acts covering criminal law, including the Penal Code, and another 12 Acts covering criminal procedures, including the Criminal Procedure Code, making a total of 27 Acts. We in Singapore have often been accused of having draconian Acts covering a wide variety of offences, some of which carry mandatory sentences. The issue we would like to examine is whether our legislations are adequate to provide the kind of deterrence and enable our Police Force to curb the increase or, even better, reduce the rate of various criminal offences. For example, the Criminal Law (Temporary Provisions) Act would appear to have succeeded in virtually wiping out our major secret society activities. Could a case be made out to justify, in most of these instances, the severity of the legislations, especially in serving as deterrence for serious crimes involving human lives? It would be useful if the Minister could give a brief review of the crime situation that we have in Singapore at the moment in so far as it relates to the major crimes and those which affect a substantial number of our citizens. There could be areas where legislation may have to be tightened or additions needed to make them more effective, especially in serving as a strong deterrent to potential offenders.

Secondly, the nature and the frequency of some of these crimes such as housebreaking, crime in lifts and even vehicle thefts, make it almost impossible for the Police to provide extensive coverage and protection to all unless one is prepared to accept the very high cost that comes with such protection. In fact, it is well-nigh impossible given the constraint of manpower in Singapore where the pool of labour is finite for the Police to do this role effectively. The alternative to this is public involvement and participation. One used to get away from the idea that crime prevention and detection and subsequent resolution is solely the responsibility of the Police. Experience in other countries, for example, in Japan, shows that contribution by the public is equally important, first, in volunteering information leading to the apprehension of suspects. It goes without saying that such volunteers themselves have to be protected from being intimidated. Secondly, to be the eyes and the ears of the police, especially in densely populated housing estates, both private and public, shopping centres and other areas where conditions are conducive for criminal offences, such as construction sites and so on, where the frequency of such crimes could be high. And thirdly, for the public to be watching on behalf of the neighbours and, in so doing, deter potential criminals from committing their offences. I believe this is one of the major reasons why the Government several years ago implemented the Neighbourhood Policing policy as well as the Neighbourhood Watch Scheme. Neighbourhood Police Posts have been established in many constituencies. The infrastructure is being laid and the required increase in Police personnel, I understand, is being made available. The question is how effective has this scheme been so far in fulfilling the objectives of reducing the incidence of crime. Is the Police Force getting the expected cooperation of the public as envisaged in the plans?

It is well-known that Asians, by and large, are quite shy of close association with the Police. Have we been able to reverse this trend? In other words, have the Police improved their image with the public? Judging by the survey conducted recently, it would seem that the Police came out tops among civil servants covered in the survey in the public relations image with the public. Have these results been translated into the fulfilment of objectives of crime prevention as well as detection? I would be grateful if the Minister can give an update on the various Neighbourhood policing schemes now being enforced as well as their effectiveness and of course he may well have to answer the Member for Jalan Kayu's request for a Neighbourhood Police Post in his constituency.

The Minister for Home Affairs (Prof. S. Jayakumar): Sir, I welcome the approach taken by the Chairman of the GPC for Home Affairs who said that he would concentrate on broad policy areas and on strategy rather than be bogged down by details. I think the best way I could express my appreciation is also to respond in a way which focuses on the broad policy approach to be taken by the Police and the strategy for law enforcement and crime prevention.

In dealing with the points raised by the Member for Clementi and Chairman of the GPC, perhaps I could start by outlining what are the main pillars of the Police's law enforcement strategy and then speak about the crime situation which he wanted some information. For the coming years, there would be three main pillars on which the Police's law enforcement strategy would be built. The first pillar would be the system of community-oriented policing. The second will be strengthening the capability of the CID, and third, would be maximizing and optimizing the limited manpower, and I would like to spend a few minutes to speak on each of these three main pillars.

First, community policing. Community policing will be the cornerstone of the Police's law enforcement strategy. This is because we cannot expect crime prevention to be described in terms of the criminal on one side and the Police on the other side. We would approach it in this way - the criminal on one side and, on the other side, the Police together with members of the public. Community- oriented policing was mentioned by the Member for Clementi and he asked whether this policy of harnessing the support and cooperation of the public is successful. Is it working? The answer is, Sir, yes, it is working. We may be Asians and traditionally reticent in openly identifying ourselves with the law enforcement agency. But, Sir, a major breakthrough and a significant turnaround has taken place in respect of the public support and cooperation with the Police.

I would ask Members to consider just two statistics. First, the arrests which have been made by the Police as a result of information and other assistance given by the public. In 1985, there were 592 such arrests. In 1986, one year later, it rose dramatically to 2,476 cases, more than 400% increase. Next figure is the arrests and apprehension which were made by members of the public themselves. In 1985, this was 177. It shot up in 1986 to 1,159. These figures are telling and they tell us a story. One could not imagine that 10-15 years ago, we would have such a level of cooperation and support from the public. Not only members of the public are willing to assist the Police and cooperate, they are even willing to come forward, participate in commendation ceremonies and be photographed. It shows a high level of confidence and trust in the Police. The Police's strategy, therefore, is to build on this as the cornerstone of our law enforcement strategy because public cooperation, Sir, is the biggest deterrent that we can have in fighting crime.

How do we build on this? There will be two main instruments - the Neighbourhood Police Post (NPP) system and the Neighbourhood Watch Scheme. With regard to the Neighbourhood Police Post, the mere fact that so many Members of Parliament have filed questions in the past week asking when they can have their NPPs, I think, speaks for itself, including the Member for Jalan Kayu. The question raised by the Member for Clementi is: has the NPP system been successful? I am glad to inform Members that it is successful. How do we know this? An independent study was conducted in Toa Payoh Division by two university academicians, Dr John Quah and Stella Quah, who made an evaluation study of the NPP in that area. Some of the highlights of the study are:

The level of friendly contact between the public and the Police rose by 12%. Crime prevention awareness increased by almost 10% after the NPPs were inaugurated. The level of complete trust in the Police went up by 44 percentage points. In almost every NPP that we have established, the number of reports which have been filed of various offences has increased. Clearly, Sir, the Neighbourhood Police Post system has heightened Police presence and succeeded in getting participation from the public and we are well on our road to harnessing public cooperation.

The second instrument in building this pillar of community-oriented policing will be the Neighbourhood Watch Scheme. It was launched in 1981 to increase crime prevention awareness amongst residents and we now have Neighbourhood Watch Groups in nearly all constituencies. What will be the future directions of the Neighbourhood Watch Scheme? The Police, Sir, will consider how the Neighbourhood Watch Scheme can be made more active than what it is now for, at the moment, we can describe it as a passive scheme where each neighbour keeps an eye on his neighbours in the immediate vicinity. We will see whether we can make it more active in approach.

Second, the Police will concentrate on the development of the Neighbourhood Watch Scheme, particularly in crime-prone areas. Thirdly, the Police will also involve the NPP system in coordination and in the consolidation of the Neighbourhood Watch Scheme. In other words, the NPP system will have a link with the Neighbourhood Watch Groups.

The second pillar for the Police's strategy will be the strengthening of CID's capability. This is the other side of the coin, Sir. Community-oriented policing means that we reach out to the majority of the population who are law-abiding and harness their support to deal with the minority who are criminals. When it comes to the minority of criminals, that is where the CID comes into play. There will be a no-nonsense and professional approach in dealing with the law-breakers who give trouble to the majority of the population.

May I mention now, Sir, some aspects which have already been embarked on by the Police. First, plans have been worked with manpower consultants to strengthen key components, namely, the Special Investigation Section and the Criminal Intelligence Unit of the CID. Secondly, areas where computerization will aid CID's work, this will be done. Later when there is a move to cut one of the Subheads on computerization, perhaps I will have an opportunity to elaborate. Third, CID's structure has been revamped from four Divisions to six Divisions this year and will facilitate command and control. Finally, upgrading of equipment. A separate radio network for CID has become operational since August 1986 and this will enable CID to have a better control of its operations.

The Chairman: Order. Prof. Jayakumar, your time is up.

Prof. Jayakumar: Sir, do I have 10 minutes or more, as Minister, to reply?

The Chairman: You have 10 minutes, and your 10 minutes is up.

Mr Bernard Chen: Sir, the Minister has not touched on some of the points which I raised and one of which is whether the legislation ---

The Chairman: Order. It is 1.00 pm.

Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House.

Mr Deputy Speaker: Order. I suspend the Sitting and will take the Chair again at 2.30 pm.

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

[Mr Deputy Speaker in the Chair]

Debate in Committee of Supply resumed.

[Mr Deputy Speaker in the Chair]

Head Q -

Mr Bernard Chen: Mr Chairman, just before lunch I was commenting that the Minister has not answered my question on the effectiveness of some of the legislations governing crime detection, prevention and resolution. He has also not answered the question on the situation of crime in Singapore with regard to the statistics of various major crimes. I would be grateful if the Minister could enlighten the House.

Prof. Jayakumar: Mr Chairman, Sir, I am grateful for the Member asking further questions as it enables me to complete my response to his earlier intervention.

Sir, I said that there were three pillars and the third pillar will be the optimum use of limited manpower. We will always have crime in Singapore. Our job is to keep it under control, to reduce it, and to apprehend the offenders. The Police cannot be everywhere at every time, which means that we will have to find ways and means of maximizing and making optimum use of our limited manpower. In this context, we have to remind ourselves that we can expect the number of reports of offences to increase because, judging from the experience of our Neighbourhood Police Post in almost every area where a Neighbourhood Police Post has been established, more reports have been forthcoming, which is an indication that the public are more encouraged to report offences with the establishment of the NPP.

In this regard, Sir, I want to mention that manpower management consultants at the moment are working very closely with the Police to see how manpower can be best utilised. Specifically, there is one objective, and that is, to deploy the existing manpower so that a greater percentage will be involved in front-line duties. At the moment, this is 60% of the Force and the objective is to increase it to 69% with no increase in manpower. Also, Sir, the use of modern technology and computerization will be resorted to, wherever possible, with the objective of ensuring speedy communication, speedy response and speedy investigation.

Finally, still on manpower. Police must and will continue to recruit good recruits to join the Force. I am happy to say that over the years they have been successful. For example, the number of Police recruits having four '0' levels or more - in 1981, they were 60.7% of the recruits; in 1986 it was 94.3% of the recruits. This is important because as we launch and press on with community-oriented policing, we need Police officers who are intelligent, able to communicate with the Police, able to explain as well as deal with members of the public on law-abiding, explain situations to them, explain the rules to them, and also Police officers who will brook no nonsense and deal swiftly with the law breakers.

Now I go on to the point raised by the Member about statistics on crime. I do not intend to go over all the ground which has been covered in public because the Police have, and I think it is a good idea on their part, regularly briefed the press on key crime statistics. What I intend to do is to highlight some of the encouraging areas and at the same time point out at least one area which will be of interest to Members of the House.

First, the areas which are encouraging. Sir, when we compare 1985 figures with 1986, I am glad to report that housebreaking figures came down by 17.1%. What is even more encouraging is that housebreaking in public residential areas came down by 14.1%. I think this is very significant considering that 86% of our population are in public housing. The credit goes to both Police as well as the public. The fact that housebreaking has come down, and has come down in public housing estates, shows, to my mind, the impact of all the crime prevention measures which the Police have carried out over the years. It shows the impact of the NPPs, it shows the impact of the Neighbourhood Watch Scheme and, overall, it shows greater crime prevention consciousness on the part of the Police and the public. Sir, another interesting figure is that snatch thefts have come down, 19.2%. This again shows the impact of public spiritedness and the publicity which has been given to members of the public who helped the Police in catching such people.

What is the problem area? Of all the problem areas, one which we will have to tackle and pay particular attention to in the future would be that of lift robberies. This is one area which has gone up, and it has gone up 37% compared to 1985. 98% of the lift robberies last year were committed in HDB areas. The majority, about 62%, were committed during the day and the majority of the victims were women. Sir, when we talk about lift robberies, this is an area which can also be tackled by cooperation and vigilance on the part of the public and their cooperation with the Police is essential. Basic do's and don'ts have been publicized in the press and on television. If all residents, particularly women, were aware of the do's and don'ts, such as not to enter lifts with total strangers, then we would be able to cut down the incidents of lift robbery. Neighbourhood Watch Groups (NWG) and grassroots leaders can also help by reporting immediately suspicious persons loitering in corridors, stairways and void decks. For example, in 1985, Neighbourhood Watch Group members and six residents in one constituency caught a lift robber. In other words, to summarize, of interest to residents in public housing areas, there has been a breakthrough. Housebreaking has come down. Snatch thefts have come down. We must now join hands in tackling the question of lift robberies.

Finally, Sir, about review of legislation. This is constantly being done. The Member will recall that in 1984 we made major amendments to criminal law statutes to enhance the penalties and even to provide for minimum sentences. It will take a few years before we see the effectiveness of these measures. A continuing review is carried out. But what is the most effective deterrent? Legislation and tough penalties have their purpose. But the best deterrent, Sir, is certainty of detection and apprehension of the criminal. This is why it is important to get the public to cooperate and give their support to the Police - the greater the public cooperation, the greater the certainty of detection.

Mr Bernard Chen: I thank the Minister for his reply. I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. The following amendment stood on the Order Paper Supplement - Mr Chiam See Tong: (2) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QA-01 of the Main Estimates.

The Chairman: Amendment No. (2). Mr Chiam is not here. Amendment No. (3), Mr Chen.

Mr Bernard Chen: Mr Chairman, I beg to move,

That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QB-01-1210 of the Main Estimates.

Mr Chairman, this follows up from some of the Minister's answers just now. The efficiency of policing requires manpower no doubt, but they must be supported by adequate equipment and facilities, especially, to enable them to react quickly and respond fast to calls by residents and citizens and at the same time to enable accurate retrieval of records for the purpose of detection and resolution. I understand the Ministry embarked on a programme of computerization in the early 1980s. And the computerization programme encompasses all the major departments in the Ministry, especially in the field of policing. I understand that some of the computerization projects cover the operational requirements of the Police Force. I would just like to know from the Minister whether the programme has been implemented on schedule and whether these equipment have been made available to help the Police in their work, have there been any savings on manpower and/or, to the worst, whether the Ministry of Finance has in fact stopped giving money for such projects. If the Minister can elaborate on these, I would be grateful.

Prof. Jayakumar: Mr Chairman, Sir, I take the point made by the Member for Clementi, which is that law enforcement and crime combatting cannot be effectively carried out without modern technology and computerization. The Police as well as the Ministry realize this and for this reason they have embarked on computerization of key areas. Some are still in the process of finalization of studies of the detailed requirements and some areas have already been embarked on. The areas which have been identified, Sir, are the following:

(1) A computer system for command and control of patrol resources, operational aspects.

(2) The requirements for new traffic police computer system.

(3) The possibility of computerizing automated identification of fingerprints.

(4) A crime information system to keep track of crime statistics and trends.

I do not propose to go into the details of areas which are still being studied because, in fairness, we will have to take these matters up with the Ministry of Finance and we must allow them to give their views on the matter. But I would like to spend a few minutes, Sir, to speak on areas which have already been embarked on so that the House will have an idea of how computerization will help the Police in transforming the nature of their operations.

First, let me refer to the command and control system which has already been embarked on and is being implemented. This computerization of command and control will greatly enhance Police operations in several respects. Let me give three examples.

The first example is that it will enable the Police to instantly monitor the status of all patrol cars and therefore have the ability to recommend the best patrol car at any one time for despatch to an incident. This means faster response.

The second example is that such computerization will enable records to be kept of all persons who are wanted or, to use the euphemistic phrase, who are "of interest to the Police." Likewise, it will capture information on all vehicles which are reported stolen or needed for investigation.

The third example, Sir, of the benefits that will accrue from computerization is that the system will also provide instantly a list of incidents of the same type that occur within a certain area in a specified time. Members can imagine how valuable such information will be to Police operations.

This system is expected to be fully completed in mid-1988.

Another aspect of computerization which has already been approved concerns the CID computerization. There are two aspects that I would like to draw Members' attention. First is the upgrading of CID's criminal history modules, ie, to computerize and upgrade our record of criminals, for this will help speedier investigation work. This was commenced in 1985 and is expected to be completed sometime later this year, hopefully in September.

The second aspect of this computerization is to keep track of what we call the case management module. It will keep track of the investigation of cases of interest to the Police and this will result in better management of investigations and will provide clues to investigators based on information which is captured. The requirements have been finalized and the development is to begin soon. We hope that this will be completed in mid-1988.

As I mentioned, Sir, there are other areas also being looked into and once our requirements have been finalized, these will be taken up with the relevant authorities so that we can get a further headstart on computerization for the Ministry. But there is no doubt about it, both the Police and the Ministry are convinced that, with limited manpower, this is the way we should go.

Mr Bernard Chen: Sir, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. The following amendments stood on the Order Paper Supplement: Mr Heng Chiang Meng: Singapore Police Force (4) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QC-01-1210 of the Main Estimates. Dr Koh Lam Son: Crime Control (5) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QC-06-1210 of the Main Estimates. Mr Eric Cheong Yuen Chee: Crime Prevention (6) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QC-07-1210 of the Main Estimates.

The Chairman: Amendments (4), (5) and (6) have been withdrawn. Amendment (7), Mr Chew.

Mr Chew Heng Ching (Kaki Bukit): Sir, I beg to move,

That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QC-09-1210 of the Main Estimates*.

Sir, the main task of the Traffic Police is to reduce the number of accidents on the road without jeopardizing the smooth and orderly flow of traffic. We are fully aware that the Traffic Police has done a great job in reducing traffic accidents in Singapore for their records are indeed impressive, with the fatality rate of traffic accidents at less than 1 per 10,000 population and casualty rate at less than 4 per 1,000. The stringent driver's testing criteria, demerit points system, road safety education programme and suppression of hell-riding activities have made these achievements possible. The use of BMW patrol cars, installation of traffic light surveillance cameras, use of breath analyser and moving radar guns have also helped to check speeding and reduce accident rates.

Sir, whilst the Traffic Police has been effective in reducing the number of road accidents, the general impression is that they are still slow in responding to traffic jam situations arising out of road accidents, traffic light breakdowns or floods. There were occasions in the past when motorists felt that had the Traffic Police been more alert and responsive, queues of cars building up at traffic jams could have been avoided. Directional signs could have been set up quickly at strategic locations way before the traffic jams to draw motorists' attention to the jams ahead and to divert them to alternative routes. The SBC too could play its role by announcing the jams more frequently over radio for travelling motorists, perhaps as often as an SAF mobilization or recall exercise. This will help the motorist to plan his travel route early before he is caught in the jam.

Sir, it was announced recently that the PWD is planning to install an electronic watchdog system at our expressways to ensure a safer and smoother ride for motorists. While this may be the longer term solution to the problem of traffic jams at expressways, the system will not help to alleviate traffic jams in other roads. Sir, may I ask the Minister what steps will the Traffic Police take to ensure better management of traffic jams?

The Chairman: Mr Eric Cheong.

Mr Eric Cheong Yuen Chee: I am not speaking.

The Minister of State for Home Affairs (Dr Lee Boon Yang): Mr Chairman, Sir, I thank the Member for Kaki Bukit for his observation that the Traffic Police has been doing a good job in so far as fatalities and casualties on our roads are concerned.

The Member has also observed that accidents along the expressways frequently lead to severe traffic jams. He asked about the preventive measures for minimizing such traffic congestion arising from accidents, floods or the breakdown of traffic lights.

Sir, the expressways are frequently patrolled by expressway patrols and mobile squads of the Traffic Police. Whenever the Police is informed of an accident along the expressway, the Traffic Police Operations Room will notify and deploy the nearest patrol car to the scene. At the scene of the accident, the officer will have to assess the situation and initiate action to minimize traffic congestion. If it is a no-injury accident, the vehicles will be moved to the side of the road. But in cases where there are injured persons still in the vehicle or where there is a need to retain the vehicles in the position of the accident to facilitate investigation, the vehicles cannot be moved.

The patrol officer will also inform the Traffic Police Operations Room of the traffic situation and, if necessary, the Singapore Broadcasting Corporation will make frequent announcements advising motorists to avoid this stretch of the expressway.

Sir, where a traffic jam is imminent or has already built up after an accident, the patrol officer will plan a diversionary scheme. Other traffic patrol officers on adjacent beat will be directed to divert traffic away from the affected expressway. SBC will again be informed to make frequent announcements advising motorists to use alternative routes.

Sir, it is not always possible to prevent a traffic jam from building up whenever an accident occurs especially during the peak hours. However, plans to implement a traffic surveillance and signalling system for the entire network of the expressways has already been announced by the Minister for National Development. As the Member for Kaki Bukit noted, this system should help to ease traffic congestion in the event of an accident on the expressway.

Sir, the Member also wanted to know about measures that are taken by the Police to ease traffic congestion in the event of floods. Whenever it rains incessantly over the island or whenever it looks as if a flood is imminent, the Police will direct all available manpower to monitor the ground situation, especially in areas which are known to be flood prone. If the situation gets worse, warning and diversionary signs are placed at suitable locations to forewarn motorists. Policemen will be deployed to direct traffic away from the affected areas. The SBC will make frequent announcements to warn motorists to avoid the affected stretch of road.

Whenever extensive floods occur during the hours of the restricted entry into the Central Business District, the Police will lift the restriction to ease traffic flow. The Traffic Police work closely with the Drainage Department of the Ministry of the Environment and the Road Division of the Public Works Department and other departments to improve the traffic diversionary scheme and advance warning system.

Sir, the Traffic Police Operations Room is the coordination centre which continuously monitors traffic situations. In the event of a malfunction of traffic lights as a result of a mechanical breakdown or as a result of floods, officers will be deployed to regulate traffic at junctions which are affected. And at the junctions that are passable to traffic, there will be officers there to guide traffic. At roads and junctions which are no longer passable to traffic as a result of floods, for instance, officers will be deployed at locations well ahead of these junctions to divert traffic.

Sir, in conclusion, I wish to reiterate that the Police share the Member for Kaki Bukit's concern with traffic congestion arising from accidents or floods. The Police have worked out operation plans to deal with such problems on our roads and expressways. For these plans to work smoothly, I would urge members of the public, particularly the motoring public, to follow traffic warnings displayed on roads or broadcasts over SBC from time to time. Their cooperation can greatly minimize inconveniences and disruptions to the smooth flow of traffic.

Mr Chew Heng Ching: I beg leave to withdraw.

Amendment, by leave, withdrawn.

Mr Tang See Chim (Chua Chu Kang): Mr Chairman, Sir, I beg to move,

That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QC-09 of the Main Estimates.

On traffic control, the Traffic Police should work closely with the Public Works Department. Last week, during the debate on the PWD, Members of this House have brought up various questions on traffic signs and road conditions and how these could be improved. Most of the traffic accidents are due to human error. A tree does not suddenly jump into the path of a motorist unless he loses control of his vehicle, though, of course, trees do obstruct when not properly planted. A car will not split into two unless the motorist decides to test it against a lamp post.

With the opening of more expressways on which vehicular traffic travels at a fast speed, traffic control becomes more urgent. I see that the Traffic Police has instituted measures and these have been referred to by the Member for Kaki Bukit, like patrolling the expressways by special units, camera surveillance at busy junctions, etc. But may I also mention that using the breathalyser to check drunken drivers has also resulted in a significant reduction of accidents. I believe that this reduction can be further improved by a sustained education of the motoring public.

Driving on the expressway requires a different technique and more alertness than driving on a deserted byway. The days when one can drive with one hand on the steering wheel and the other on the girl friend is over. This reminds me, Sir, of a black and white movie I saw of Laurel and Hardy. Old Laurel was driving along with one hand on the steering wheel and the other on the shoulder of his gorgeous girl friend, when a traffic cop drew alongside. It was a silent film, Sir, and there appeared on the screen "use both hands"; whereupon Laurel grabbed his girl friend with both hands and embraced her.

Of course, motorists learn the basics before they pass the driving test. Indicators should be used for turning, signals should be used for stopping, drive at a safe speed, etc. But all this is usually forgotten as soon as one passes the test. Maybe there should be a compulsory re-learning when one acquires a certain number of demerit points. In this connection, may I suggest for the Minister's consideration that he should establish an advanced motoring school to teach motorists the finer points of vehicle control. Even if one does not know how to heel-and-toe, or steer into the skid after the course, the terrifying experience of losing control on the skid-pan should teach one to be more careful in everyday driving.

I want to commend the Traffic Police for having now got out of the bad habit of hiding in bushes, lying in wait for the errant motorists. Their aim, of course, should be the prevention of traffic offences and not the conviction of errant motorists.

Sir, I think on the whole the traffic police have done a good job and I want to hand them a bouquet with this message: Well done. There is, however, room for improvement.

Dr Lee Boon Yang: Sir, I am happy to note that the Member for Chua Chu Kang has a bouquet for the Traffic Police. I am sure that all the Traffic Police officers will be very appreciative of his gesture.

Sir, the Member for Chua Chu Kang is also concerned with the behaviour of the motoring public, especially on the expressways. I agree that the motoring public needs to be educated on the proper use of roads, particularly the expressways. Sir, it is unfortunate that the number of Singaporeans who after having passed their driviing test promptly forget all the lessons about good driving habits. Many of them take their passing the driving test as a freedom to go out on to the road and to drive in any way they please. Sir, in 1986 the three major offences along expressways were speeding, careless driving and road hogging.

Sir, Traffic enforcement officers have been monitoring the situation along the expressways. Besides enforcement, on-the-spot counselling is carried out when traffic offences are detected. In 1986, 51,472 persons were issued with summons for offences committed on the expressways. In addition, 21,208 persons were counselled and asked to change and improve their driving habits.

Sir, measures are also being taken to improve road usage on the expressways. In fact, the emphasis has been on testing, training, re-training, education and enforcement. Sir, four important measures have been introduced to educate our motorists. Firstly, a new testing system and revamped driver's training syllabus have been implemented. Since 1985 learner drivers are required to undergo circuit training and testing. And to ensure that the standard of training is high, the driving syllabus has been revamped to emphasize on road safety and an additional theory test has been introduced. Sir, new drivers will be taught the important points of vehicle control and driving conduct.

Secondly, re-training is now part and parcel of traffic enforcement. Errant motorists who are identified under the drivers' improvement point system (DIPS) are required to undergo a re-training course. As an incentive, they will be given a remission from the suspension period if they successfully complete the re-training course.

Thirdly, Sir, road safety education. Sir, this is a continuous process and is done through publications, the mass media, campaigns and exhibitions. Some of the publications are the Road Safety Manual, published in 1979, the Expressway Etiquette, published in 1982, and the Do's and Dont's of Expressway Motoring, published in 1983.

Sir, on top of this publicity effort, road safety campaigns and exhibitions are organized once every few years to further inculcate road safety consciousness in our motoring public.

Last but not least, Sir, enforcement and counselling. Since 1985 the Traffic Police have been counselling traffic offenders on the spot. These violators are told the dangers posed by their unsafe and bad driving habits. In the same year, 1985, the Traffic Police also formed the Expressway Patrol. Eight fast patrol cars are manned by specially trained officers. They were deployed to patrol the Pan-Island Expressway. Sir, an evaluation study carried out six months after the Expressway Patrol was launched showed significant improvement in road safety on the Pan-Island Expressway. Traffic Police is monitoring the situation and, if necessary, consider extending the Expressway Patrol Unit to the other expressways.

Sir, the Member for Chua Chu Kang has also noted that Traffic Police have started to use new equipment, new systems, to enhance road safety. Traffic Police will indeed continue with the use of such equipment, for instance, breathalyser, moving radar gun and the traffic red light surveillance camera. All these equipment will help to reduce accidents and injury caused by drivers who flout traffic regulations.

Sir, in conclusion, I would like to point out that the Traffic Police will spare no effort to make our roads safer for all road users. New drivers will be put through a more rigorous and comprehensive training and testing. There will be appropriate public education to improve the standard of driving in our drivers. The drivers' improvement points system will be strictly enforced to improve driving standards. For those who are caught breaking traffic rules, I urge them to heed the warnings and advice of the Traffic Police. Sir, the next time they may not be so lucky as to be caught by a policeman. An accident may well result from the next instance of inconsiderate or careless driving on the road.

Mr Chiam See Tong: May I just ask the Minister of State two questions. The first one is more of a clarification. He said that there are many accidents because motorists after passing take on to the road. Is he implying that our training and our standard of testing in Singapore is below par? The other question is, I am encouraged to hear that there is a lot of education of the motorists in regard to road safety. This is an important area. Can he give an indication of how much money is spent on this particular area. I hardly see any TV programmes or advertisement in regard to road safety recently. Can the Minister please give an indication how much money is spent and is the police intending to have more TV programmes to educate motorists in regard to road safety?

Dr Lee Boon Yang: Mr Chairman, Sir, the Member for Potong Pasir wants to know whether our driver's training and testing is sub-standard. The answer is no, Sir. We have an excellent driver's training and testing system. We have just made improvements to the system which will enhance the training of drivers and the testing itself is made much more rigorous, as I have just said. What I meant was that there are some drivers, who after undergoing a course of training and after having passed the test, when they are on the road by themselves, choose to flout traffic regulations. It should not be taken as a suggestion that our drivers testing standard is below par.

The Member for Potong Pasir also asked whether we have put in any effort to publicize road safety, whether we have any money budgetted for this purpose? My Ministry do have a budget to be used for such publicity exercises. If the Member for Potong Pasir had watched SBC last year, he would have noticed that there were a number of occasions when we broadcast road safety messages. There was a specific road safety campaign carried out in which a series of filmlets were shown advising motorists and pedestrians on the proper use and the proper conduct on the road. As I have just mentioned in my answer to the Member for Chua Chu Kang, the Traffic Police conducts public education campaigns regularly. Road safety campaigns and exhibitions are organized regularly. The Traffic Police continues to update its publication on road safety which is distributed. The Traffic Police also conducts a Road Safety Park in the East Coast Park where school children are invited to participate in road safety games which help to enhance their consciousness of road safety.

So, in summing up, there is no shortage of effort to inculcate this message of road safety among all road users.

Mr Chiam See Tong: Sir, I have one amendment under this Head. May I be allowed to ask questions outside this present subhead?

The Chairman: No, you can only ask questions on Traffic Control.

Mr Tang See Chim: Mr Chairman, Sir, I am encouraged to hear the Minister of State said that errant drivers breaching minor traffic regulations are counselled and not booked. I only hope that the petite lady traffic police are more compassionate in their dealing with the driving public. Sir, I would also ask the Minister whether he would consider establishing an advanced school for motorists and I hope he would consider the suggestion.

Dr Lee Boon Yang: Sir, I am not quite clear about what the Member for Chua Chu Kang wants in terms of an advanced motoring school. Does he want an advanced driving training course to be made mandatory before a driving licence is issued? Is it necessary to make such advanced driving training a mandatory qualification for a driver's licence? If not, as I said in my main answer to him, the important points of vehicle control, proper driving techniques, road safety conduct, are all taught in the present safety driving school. The curriculum that is being used is being reviewed regularly. If there is any necessity to improve the curriculum or increase the type of skills that has been taught, it will be done through the present system of training.

Mr Tang See Chim: No, Sir, I was not thinking of compulsory attendance at the advanced driving school. What I was thinking of was teaching of techniques above what are being taught now. Driving could be a very terrifying experience when you get into a skid-pan and find that you have absolutely no control at all over the car. I have experience of that because I attended an advanced driving course. The very fact that you have had a terrifying experience makes you more careful in your every day driving. Anyway, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. The following amendments stood on the Order Paper Supplement:- Mr Heng Chiang Meng: Neighbourhood Policing Scheme (9) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QC-06-8102 of the Development Estimates. Mr Bernard Chen: Singapore Civil Defence Force (10) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QD-01-1210 of the Main Estimates. Encik Zulkifli bin Mohammed: Singapore Civil Defence Force (11) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QD-01 of the Main Estimates.

The Chairman: Mr Heng Chiang Meng, Mr Bernard Chen and Encik Zulkifli are not moving their amendments. Amendment No. (12), Encik Abbas.

Encik Abbas Abu Amin: Sir, I beg to move,

That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QD-02 of the Main Estimates.

Sir, since the introduction of national service Construction Brigade in 1981, two training schemes were introduced and several changes and improvements were made in the basic military training as well as in the skill or vocational training. I would like to ask for more details regarding the new training scheme and what improvements have been achieved to reduce or eliminate the earlier problems of poor work attitudes and absence without leave (AWOL) cases among the national servicemen.

Sir, I understand that there is still a need to improve communications or inter-personal relations especially between the national service trainees and the work site supervisors. Although steps are being taken for remedial action, I still feel that much more could be done by the work site supervisors or contractors or subcontractors to improve communication and human relations. Work site supervisors can play an important role to motivate the young national servicemen and to persuade them, if possible, to join the construction industry when they have completed their full-time national service training, especially when they are equipped with the necessary vocational training.

Sir, I feel that the employers should be enlightened in detail on understanding the Construction Brigade's scheme in detail so that they could contribute to the success of the whole Construction Brigade. I would like to know what further progress is made to upgrade and improve the working conditions of the Construction Brigade's national servicemen who are deployed at the various work sites. Are there plans to motivate the national servicemen to feel that they are contributing positively to the national service? They feel that the Construction Brigade is not as important as the Police or the SAF, but I feel that this is part of their contribution to the total defence and I think they should be encouraged to be more proud of their national service training.

Sir, what I can gather is that normally there are not many problems during the first three months of basic military training and also during the one-month skills training organized by the Construction Brigade in conjunction with the VITB. Problems normally occur after these basic courses. Perhaps more dialogue or discussions could be held with the contractors or subcontractors to help the supervisors understand the problems of our young national servicemen so that they can be positive in their attitude and contribute positively towards the national service training.

I feel there is a lack in publicity especially with regard to the second scheme that has been revised for improvement. Perhaps the Ministry could consider giving more publicity to the nature of this training scheme and also to inform the parents because most of them have this misconceived idea that the problems that occurred in the first 17 intakes still exist for this particular new scheme. I would like the Ministry to enlighten me on this.

The Senior Parliamentary Secretary to the Minister for Home Affairs (Mr Chin Harn Tong): Sir, the Member for Pasir Panjang has raised three points relating to the Construction Brigade. I shall now respond to him.

The Construction Brigade national servicemen are deployed at the various construction work sites after they have completed their construction trade training at the Construction Industry Training Centre (CITC). The purpose of deployment is to enable these national servicemen to gain practical experience and to further develop their trade skills. The Construction Brigade national servicemen work under the same general working conditions as other construction workers.

Sir, Construction Brigade men, like all other young national servicemen, need to be motivated and be convinced that they are contributing positively to national service. For this reason, the CB men are given attitudinal development training during the initial phase of their training in the Singapore Civil Defence Force (SCDF) camp. The attitudinal training seeks to make them realize the importance of national service, civil defence and total defence and the role and responsibilities as citizens. Besides, SCDF also involves CB men in various community projects to help senior citizens and other needy people in the welfare homes. Such community projects are aimed at making these CB men feel that they are contributing positively to the society as national servicemen.

Sir, the performance of CB men at the work site is principally influenced by two factors. The first is the attitude and skill level of the CB men and, the second, the effort of contractors in motivating these young CB men. Under the revised CB scheme implemented since December 1985 all the CB men undergo a three-month residential basic para- military training which is designed to build up the physical fitness and improve the discipine and attitude of the CB men. This has helped to better prepare the CB men for their subsequent training and deployment at the construction sites. The revised scheme also provides opportunities for these men to be trained up to the skill level as those recruited in the open market by CITC.

Sir, the revised CB scheme has resulted in lower absenteeism amongst CB men and also enabled some of these men to acquire higher level of trade skill. A recent survey on absenteeism among these men has shown that the percentage of man-days lost due to absenteeism has improved from 9.8% for CB men under the old scheme to 1.1% under the revised scheme. Also, of the 952 CB men who have completed their skills training under the revised scheme, 227 or 24% have attained the same skill level as those CITC trainees from the open market.

It is also important for contractors to make an effort to motivate these men at the work sites. HDB and the Singapore Civil Defence Force are constantly seeking ways to help contractors motivate these men. A course was introduced recently for work site supervisors of CB men to help them understand the CB men better and how they can motivate these men at the work sites to give of their best. Contractors have also been encouraged to reward the better performers among these men by paying them beyond the stipulated allowances. Indeed, 23% of these men under the revised scheme are already being paid higher than their stipulated allowances by the contractors.

Since the launching of the Construction Brigade scheme in 1981, there has been publicity on the various aspects of the scheme through the various media such as SBC, the press and newsletters, including that of the Singapore Contractors Association. My Ministry will continue to give publicity on the CB scheme to give contractors and parents of these men a better understanding of the scheme and to encourage them to help motivate these men which will ultimately benefit all parties.

Encik Abbas Abu Amin: Sir, I am satisfied with the detailed explanation given by the Senior Parliamentary Secretary and I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The following amendment stood in the name of Dr Koh Lam Son:-

Civil Defence Allowances

(13) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QD-03-1410 of the Main Estimates.

The Chairman: Amendment No. (13), Dr Koh is not here. Amendment No. (14), Mr Heng.

Mr Heng Chiang Meng: Sir, I beg to move,

That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QF-02-1210 of the Main Estimates.

Sir, I would like to speak on a topic which I think everyone of us is aware of but thinks that it is another person's problem, not ours. I am referring basically to the rehabilitation of our fallen citizens with criminal records. I am aware that organizations like SCORE are doing a marvellous job but I believe that that is insufficient. The task of forgiving and welcoming our prodigal sons back into the fold, Sir, should not be left to these organizations alone. It should be the responsibility of the whole of our society and, in that respect, Sir, I think it should start with the Government.

Firstly, I would like to ask why most, if not all, Government agencies ask for screening of applicants for all sorts of licences and passes, regardless of need? I am aware that in some situations security screening is necessary but now it appears that screening is a normal process. Almost all departments want a clean record, regardless of when offences had been committed and if they do not get a clean record the applicant will definitely be unsuccessful.

Secondly, Sir, the worst is for employment purposes. Unfortunately, the public sector has access to screening processes. Again in this area, with the screening facilities available to them and, in a way, the "kia-soo" attitude of the employers, applicants with criminal records for jobs in the public sector do not really have a ghost of a chance. I am aware that this is a social problem larger than the Government department's concern.

However, Sir, the solution to this issue must first start with the Government re-examining some of its policies. First, the Criminal Records Office should review its policy of giving information. Information should only be given to relevant departments so that only relevant information is given to those who need it for a relevant purpose. Sir, one method could be a strict classification of information according to the seriousness of the crime or when it was committed. Then all requests to this Office should be classified according to the need for information. The information released then can be appropriate to the need.

Sir, the second point is that departments issuing licences and passes should review the need to screen applicants and ask for a completely clean record from birth. Right now, it appears that there is no discrimination at all. What is required is some flexibility. Thirdly, I think the public sector should also be treated more like the private sector where screening process is not available to them, except, Sir, for some sensitive and security positions. Finally, I would like to propose that the Ministry of Home Affairs together with the Ministry of Community Development and perhaps relevant bodies form a committee to look into this issue.

Sir, before I give the Floor to the Minister, I hope he will not answer by saying that the Criminal Record Office only issues information and that he is not responsible for the utilization of this information. Sir, it is like a gun vendor saying, "I only sell the gun. But if the gun is used to kill somebody, please don't hold me responsible." In this respect, I would also like to remind the House that in the UK, I believe a shopkeeper was charged for selling glue indiscriminately to young kids. Although he pleaded the same type of excuse, I think the court ruled that he, in fact, was responsible because he knew that the kids were going to use the glue for sniffing.

Prof. Jayakumar: Mr Chairman, Sir, I will be brief because we are approaching guillotine time and quite a number of other items have still not yet been raised.

The Member for Jalan Kayu, if I could summarize him, has raised two points. One, a broad position or principle which is that in his view we should do more to enable those who have been convicted and have served imprisonment for various crimes to fit in to the society, to get jobs and to lead a straight path. The second is a specific point which is whether we should review the system of supplying information on criminal records to either the public sector or the private sector. On a general point, I would like to mention to him that this was more than adequately covered by the Minister for Community Development on 22nd September 1986 when he responded to an Adjournment motion made by the then Member for Anson. I think he gave a very comprehensive reply as to all the steps that had been taken by Government and voluntary organizations to assist convicted persons to lead a straight path. I would not therefore, by incorporation, repeat whatever the Minister for Community Development said on that occasion.

I will now proceed to his specific point. Here too I would like to point out that on several occasions in 1983 and 1985, both the Minister for Finance on behalf of the Ministry of Finance and I on behalf of the Ministry of Home Affairs had outlined the instances where we gave information on criminal records. If I were to summarize, basically the information is given to selected Government organizations and to a few statutory boards, and very rarely it is given to the private sector, except for certain companies which, because of the sensitivity of their work such as petroleum companies, we need to ensure that the persons who work there are persons whose integrity cannot be suspect.

The point made by the Member is that the Police ought to take on the role of determining whether information sought is or is not relevant. I do not agree, Sir. How would the Police determine whether a person who has been convicted of child molesting, whether this information ought or ought not to be given to a potential employer? It is up to the potential employer to decide; eg, in the Government service, it would be whether a person who has been convicted of embezzlement should or should not be employed in a position in Government? One might conclude, yes. Or one might conclude, no, if he is to work in the Board of Commissioners of Currency. These are decisions which are to be taken by the potential employer. But what the Criminal Record Office does is to make this information available to selected Government departments and it is for them to decide. So it is wrong for the Member to say that, in all cases, persons who have records are never employed. As pointed out by the Minister for Finance in a previous answer, and I quote:

'It is not the policy of Government to keep convicted persons out of employment in the public sector and an enlightened policy is adopted towards convicted persons who apply for jobs.'

And he went on to explain the details.

To summarize, the Police will continue to give information but it must leave the different Government departments and statutory boards to make the decision as to whether a person is or is not suitable for any particular job based on information supplied to them. I do not think that the Police should arrogate to themselves the decision of the suitability for the job.

Mr Heng Chiang Meng: Sir, may I reply to this? Whatever steps that the Government has taken, whether it is through the reply of the Minister for Community Development or others, I think we must realize that today those with criminal records are still treated like pariahs of society. I had some cases of people who came to see me. They had served and paid their due to the society. When a private company wanted one such person to be a messenger and he was required to have access to, for example, the air cargo complex, on the grounds of a record many years ago, he was denied a pass and thus he had to resign from the job. I have another case of somebody who was detained in 1959 for two weeks under the CLD, the Criminal Law Detention. Because of that he was refused a vocational driving licence. It was only after many appeals that I was able to convince the Senior Parliamentary Secretary for Communications and Information, the hon. Member for Jurong, otherwise; that he has to consider the fact that it happened in 1959, some 28 years ago. Sir, I think there is a lot in this area that still requires something to be done.

Another point, Sir, concerns the question of the responsibility of the CRO. I did not say that the CRO has to be responsible for the utilization of the information. All I suggest is that a strict classification be done so that, when departments ask for information, it should be strictly screened as to whether this information is required or not. And if it does not fall within the guidelines of the CRO, then I suggest the information should not be given or at least some type of information should not be given.

Mr Chiam See Tong: Mr Chairman, Sir, very quickly, I must bring this matter up. We are talking of people in custody. Mr Chia Thye Poh has been in custody for the last 20 years and I would urge the Government to review his case. The Government says that he is a communist, he advocates violence, but he denies that. He denies that he advocates violence. I hear that his health is failing and I think the Government should show some compassion. In a normal criminal case, 20 years' imprisonment as good as a lifetime imprisonment. In Mr Chia's case, he has not even been found guilty in any court of law. He has got no contact with the outside world for the last 20 years and if he were to be released today, how can he create problems?

The situation in Singapore has changed tremendously from the time he was arrested. We are now affluent. 85% of our population are now residing in HDB flats. People are going on holiday. And I say again, Communism has got no attraction in Singapore. What harm can be done if Mr Chia were to be released? Assuming he makes a statement and he is released, does it really make any difference to the Government? Or if he has not ---

The Chairman: Mr Chiam, we are approaching guillotine time. Would you like to shorten your speech so as to give the Minister a chance to reply?

Mr Chiam See Tong: Yes, all right. Singapore has always prided itself of its stability. So people tend to doubt whether or not Singapore is really stable, just because of one person. I think, if the Government releases Chia Thye Poh, its image will certainly be enhanced. As long as Chia Thye Poh is in prison, I think there is a mark against the Singapore Government. And I urge the Minister to review his case; perhaps it is time certainly to review his case and release Chia Thye Poh. It is certain he is not a security danger to Singapore.

The Chairman: Prof. Jayakumar, you have only 3 minutes left.

Prof. Jayakumar: Mr Chairman, Sir, first to deal with the point raised by the Member for Potong Pasir about Mr Chia Thye Poh. If he feels very strongly about this, then I suggest that he raise this at the appropriate occasion. It was done by the former Member for Anson. A full reply was given and I can give him the reference, 31st August 1985. A comprehensive answer was given together with documents listing out ---

Mr Chiam See Tong rose

Prof. Jayakumar: Mr Chairman, Sir, may I finish without interruption?

The Chairman: Mr Chiam, the Minister is not giving way.

Mr Chiam See Tong: I need a seconder to my motion.

Prof. Jayakumar: Mr Chairman, Sir, he should be told that he does not need a seconder for an adjournment motion.

Mr Chairman, a full reply was given and the gist of the reply is - it is not a question of image, it is a question of law, order and security. Whether Mr Chia Thye Poh wants or does not want to continue detention very much depends on Mr Chia Thye Poh himself, and that was stated here; his refusal to give a statement on renunciation of force and violence as a means of change in Singapore.

Mr Chiam See Tong: Because of security.

Prof. Jayakumar: That is for the Government to decide and if the Member wants to pursue it, by all means.

Secondly, Mr Chairman, Sir, to respond to the Member for Jalan Kayu, his point is that we should have some guidelines. Guidelines do exist. But to go beyond that? One of his suggestions was perhaps we should have a time limit, a 10-year limit, on criminal records. I am not sure whether that itself is a good and convincing answer. I would ask him, as he is in the banking sector: would he be interested to know if potential applicants to the banking sector who are going to be employed by his firm, would he ask them to disclose whether they had any previous convictions? And if a person had a previous conviction for counterfeiting or embezzlement of funds, 12 or 13 years ago, would he consider that irrelevant or relevant? He may consider it irrelevant if the person is going to be employed in a job in a bank which does not have access to money. But if the applicant is going to have access to money, he may consider it relevant. If a person was convicted of child molesting and rape, is that relevant or irrelevant? It may not be relevant in certain kinds of jobs. But it may be relevant if you are going to put him in charge of a child-care centre, even though he was convicted of child molesting more than 10 years ago. So these are the questions we have to ponder carefully, instead of arbitrary delineation of 10 years or 15 years. You have to leave it to the employer to decide. Thank you, Sir.

The Chairman: Order. The time is up. Mr Heng, could you please withdraw your amendment?

Mr Heng Chiang Meng: Sir, it looks like I am forced by procedure to withdraw because I would like to answer his questions. But I beg leave to withdraw. Amendment, by leave, withdrawn. The time allotted for Head Q having expired, the following amendments were not proceeded with:- Mr Eric Cheong Yuen Chee: Central Narcotics Bureau (15) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QG-01-1210 of the Main Estimates. Encik Zulkifli bin Mohammed: Drug Enforcement and Rehabilitation (16) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QG-01 of the Main Estimates. Dr Koh Lam Son: Drug Enforcement and Rehabilitation (17) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QG-00 of the Main Estimates. Mr Heng Chiang Meng: Immigration Department (18) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QH-01-1210 of the Main Estimates. Mr S. Chandra Das: Immigration Department (19) That the sum to be allocated for Head Q be reduced by $10 in respect of Subhead QH-01 of the Main Estimates. The sum of $363,321,550 for Head Q ordered to stand part of the Main Estimates. The sum of $64,323,000 for Head Q ordered to stand part of the Development Estimates.

Head N -

Dr Augustine H.H. Tan (Whampoa): Mr Chairman, Sir, I beg to move,

That the sum to be allocated for Head N be reduced by $10 in respect of Subhead NA-01-1100 of the Main Estimates*.

In moving this amendment, I have a number of issues to bring to the attention of the Minister for Finance. The first one has to do with our role as a financial centre. We know that we have done very well with the various tax incentives over the years and we have developed as a financial centre of some note and importance. But in recent years, other financial centres have emerged. Australia has developed its own offshore system. And lately Tokyo has emerged as a major financial centre because of the strength of the Japanese Yen, the sheer size of the Japanese economy and its attempt at financial deregulation. The question that surely must occur to us is: how does it affect our future as a financial centre? Are we nimble enough to do the adjustments? How are we adjusting to the new situation to ensure that there will always be some room for us in the financial area?

The second issue that I want to take up with the Minister has to do with exchange rates. Sir, we are witnessing today a replay of many of the things which happened in the years immediately preceding the last Great Depression. One of the things which was happening then was protectionism through competitive devaluation, when one nation devalued its currency and other nations did so in order to protect their own trading positions. We all know that in September 1985, the United States through the G5 meeting, the group of five most industrialized nations, met together and agreed to allow the US to force the value of the US dollar down vis-a-vis the Yen and the European currencies. But other nations like the Asian NICs, including Singapore, have had to adjust their exchange rates in the process. Two issues arise from this process. One is that the United States since last year have been pressing the Asian NICs to revalue their currencies. That means to up value their currencies in order to cut their trade surpluses vis-a-vis the United States. And among the countries mentioned was Singapore. What is the Singapore Government's response to this?

Secondly, our problem as with other countries is how to set our exchange rate policy in order to minimize imported inflation on the one hand and to maximize our export competitiveness. This is an area which we probably need to pay closer attention. Last year, as hon. Members who read the Economic Survey will note, we had negative inflation. The cost of living index went down 1.4%. The GDP deflator was minus 1.9%. The deflator of expenditure on GDP was minus 3.7% and the domestic price index went down minus 15.1%. I understand these indices take into account the oil prices as well, which we all know went down. But was there something more than that? In other words, did our exchange rate have something to do with it? Was the Singapore dollar over valued rather than under-valued, as the Americans are trying to persuade us that it is? And if it is really over valued, then we have unnecessarily penalized our exports.

As I look at the figures on exchange rates, Sir, we find that the Singapore dollar in September 1985 was worth S$2.2 to the US dollar but today it is probably S$2.14, ie, an 8-cent appreciation, roughly 4% appreciation of our currency vis-a-vis the US dollar. This is of some concern to me because the cost cutting measures which we painfully went through - the CPF cut and cuts in other areas - have succeeded in reducing the overall production cost of our manufacturers and others in the economy by something like 4%. So if our currency has appreciated vis-a-vis the US dollar by 4%, then it would appear that the effects of the cost cutting were vitiated in the process. I do realize that we export to Europe and to Japan in addition to the US. But Members would want to take note of the fact that so much of our trade as with international trade is denominated in US dollars. In other words, what we order from abroad is denominated in US dollars. What we sell abroad even though it is to Europe is also denominated in US dollars. So it does affect the profit margins of the firms concerned. Perhaps the Hon. Minister can enlighten us on his position in this regard.

Dr Ow Chin Hock (Leng Kee): Mr Chairman, Sir, our economy has been a market economy but the Government has intervened in a big way. The Government has also assumed the role of state entrepreneurship. This model of mixed economy has served us well in the last 26 years. However, the Government's direct involvement in productive and commercial activities through public enterprises has created a number of problems:

(a) crowding out effects through demand and supply sides;

(b) unfair competition with the private sector, whether this is real or perceived; and

(c) possible price distortions and misallocation of resources.

Moreover, as our economy becomes more mature and diverse and as most of the GLCs or Government-linked companies have withstood the test of market forces, it is wise for the Government to decide to reduce its direct role in economic development, to withdraw from commercial activities and allow the private sector to be the engine of growth. It is with this background that I welcome the decision of the Government to privatize and to divest.

On privatization, the report of the Public Sector's Divestment Committee has made some realistic, well-balanced and cautious recommendations, although some people regard the report as not very exciting and not specific enough with regard to some issues. There are two important issues on privatization which I would like to raise here: (a) efficiency and control of GLCs after they have been privatized; and (b) implications for capital formation and the flow of funds.

With regard to efficiency, it is generally believed that people from the private sector being profit motivated have greater initiatives and seize new opportunities and adjust to changing market and technological conditions more rapidly. The civil servant directors and managers tend to be more cautious, prudent, less flexible and generally they are risk averters. At the same time, however, we must realize that the public sector has absorbed a large pool of talent and trained manpower. The question is whether the private sector has sufficient management expertise and necessary financial resources to take over the GLCs, particularly the large ones. If not, whether privatization will create the so-called succession problem as pointed out in the report. I wonder when the GLCs are privatized, whether the civil servant directors and managers will also be privatized. In that case, we may have a peculiar situation where the ownership is transferred to the private sector but the control remains with the public sector.

On the question of capital formation, privatization means the transfer of ownership from the public sector to the private sector and the flow of funds from the private sector to the public sector. The mere intersectoral transfer of funds does not lead to capital formation. It does not lead to expansion of our productive capacity and it does not create wealth. While privatization will definitely benefit the stock market in the medium term and reduce the Government's role in the business sector in the long run, I wonder whether there will be liquidity contractionary effects in the short run because a large sum of money will be withdrawn from the private sector. What the Government will do to the financial resources released from the divestment is very crucial. Could we have the thinking of the Minister on this?

The second issue I would like to raise is the pricing policy and surpluses of statutory boards. The statutory boards were established to achieve certain economic and social objectives. This form of organization has also allowed statutory boards to enjoy autonomy and flexibility in their operations. But at the same time they are supposed to be accountable and subject to the control of Parliament. Over the years, the rapid economic expansion has increased the demand for their services. And in the process, some of these statutory boards have diversified into other activities and become more profit oriented. This can be seen from their pricing policy. As natural monopolies or near monopolies, they pass increases in cost, eg, rising manpower or fuel cost, to consumers. The operating rules of the statutory boards seem to be charging the rates which the market can bear and to build up their surpluses and reserves to finance their development projects.

Before 1985, surpluses were not passed on to consumers in the form of lower tariffs or charges. The Public Accounts Committee (PAC) has recommended in its 1985 Report that the surplus funds of the statutory boards in excess of their long term development needs be returned to the Government. I am glad that the Minister has agreed to the recommendation with respect to the accumulated liquid surpluses of the statutory boards.

The practice of charging higher rates than average cost and generating surpluses implies that the current consumers actually pay for the investment which will be enjoyed by the future generation as well. An alternative will be for the statutory boards to price their services on a cost recovery basis and borrow to finance their capital investment. In that case, future generations of users will have to repay this loan. In 1985, the PAC also recommended that the Government should issue some guidelines on the ways in which statutory boards are to finance their development projects. This will give the statutory boards certain flexibility in planning their future expansion but, at the same time, they will be still within certain controls. Just now I mentioned a second alternative and I hope this alternative is worthwhile considering as part of the guidelines.

Finally, certain statutory boards and their subsidiaries have to keep a certain amount of foreign exchange for their transactions. But not all of them have the expertise to deal with foreign exchange management. So it is desirable, in my view, for statutory boards to approach the MAS to cover their risk exposure in borrowing from abroad. Moreover, statutory boards should also be discouraged from foreign currency investment as far as possible. The Minister may like to make it mandatory for statutory boards which wish to make foreign exchange investment to have their funds managed by the MAS.

Mr Goh Chee Wee (Boon Lay): Mr Chairman, Sir, the Minister for Finance has taken great pains to explain to this House why consumption tax is necessary or inevitable when we are faced with the prospect of a permanent budget deficit.

Sir, I do not intend to raise the subject of consumption tax again for a debate. I am not arguing with the Minister for Finance about the rationale for shifting from direct tax, like income tax, to sales tax or consumption tax. In fact, I am very glad to hear from the Minister for Finance that a broad based consumption tax will only be introduced if the shortfall in Government revenue is substantial and a permanent deficit is inevitable. What I do want to point out, however, is that the timing of the introduction of such a consumption tax requires careful consideration. I would like to request that in a year when we are asking the workers to exercise wage restraint the Government should avoid introducing consumption tax, in particular, on those items which constitute the daily basic necessities of the workers. Whether we like it or not, and whether it is intentional or unintentional, introducing a consumption tax is to place a heavier tax burden on the low income group. We should not impose undue burden on the workers, especially the low wage earners, at a time when they suffer loss of income or loss of jobs.

Sir, we talked about exercising wage restraint last year in 1986 and again this year in 1987. It was right that the Government only talked about consumption tax last year without introducing it. I hope the Government will do the same again in 1987. So at this moment, at least for this financial year, the Government should not introduce any measures on new taxes which will negate our current effort to restrain or hold wages, reduce costs and keep inflation low. I hope the Minister will consider this suggestion.

The other matter which I would like to raise, Sir, is about the measures taken by the Government to accelerate the implementation of the public sector development project. I think in the last two years the Government has attempted to increase the development expenditures and to bring forward some infrastructural development projects. The purpose was to stimulate the economy. I would like to know to what extent our local industries and our economy have benefitted from such Government expenditures. I would also like to know whether the Ministry is able to measure the impact of all the Government expenditures, especially the development expenditures, on our economy.

Dr Tan Cheng Bock (Ayer Rajah): Sir, I move this amendment to make a very small cut. I want to ask whether the Minister for Finance shares the same vision as the Minister for Education. If he does, then he must be aware of the Minister for Education's dilemma of wanting to set up more secondary schools and the high cost involved. Would you, as the Minister for Finance, help him out of his dilemma by being more generous in your grant to the building of the 50 secondary schools he needs to carry out the programme of single session schools. I can assure you I did not collude with the Minister for Education. In fact, when I asked him, he was not too enthusiastic about it.

Dr Augustine Tan: Why not?

Dr Tan Cheng Bock: I suppose he was shy. Because being the past Minister for Trade and Industry and having presented Budgets, I think he was not too keen to tax too much on the Minister for Finance. I wonder if the Minister would also consider giving more grants to the Institute of Education because, if he remembers, the Minister for Education also indicated that in order to implement single session schools he needs more principals and he needs more teachers. So I do hope that the Minister for Finance will share his vision and make another grant to the Institute of Education so that they can train more teachers to implement the single session school project.

Sir, the last amendment I moved was actually a very small one, but it got hijacked by the Member for Queenstown and it turned out to be a free-for-all discussion on Chinese education. But you were wise and I must congratulate you. You did not stop the whole discussion.

The Chairman: Of course.

Dr Tan Cheng Bock: Because you knew the importance of it. Well, I do not see the Member for Queenstown here. So I can assure you that it will not turn out into a free-for-all discussion.

Mr Heng Chiang Meng: Sir, I would like to bring the House back to sometime in October 1980 when Dr Milton Friedman was here for the Singapore Lecture. At a forum he asked a senior Government policy maker about privatization and why the Government was so much involved in the economy. The answer given then was, "Yes, the Government is aware of it and, in fact, it is going to privatize some companies". An example of the Neptune Orient Lines was given. The next question asked by the good doctor was, "Who owns the NOL?" The answer given was, "The Government." He went on to ask "But who is the Government?" The answer given was, "The people." The good doctor then asked, "Does this mean that it is the people of Singapore that owns NOL?" The answer was "Yes." Then he asked, "Why should we be asking the people of Singapore to pay for the shares of NOL when they owned it in the first place?"

Sir, I do not think despite the logic of the good doctor's comment that I will be able to convince the Minister for Finance to distribute shares free of charge to the people of Singapore. Nevertheless the Minister for Finance has stated very clearly that the privatization programme should provide for the widest possible public participation. Sir, I hope when he said "public" he meant the Singaporean public.

However, if we look at two recent examples of privatization, that is, the listing of RDC (Resources Development Corporation) and that of SNP (Singapore National Printers), it was clear that the basis of allotment of shares showed many small applicants, most of whom I am sure are Singaporeans, ignored in the allotment. In fact, Sir, the small investors were left in the cold. In the case of RDC, three out of four applicants for 1,000 shares each were not successful. Only one-third of the total allotment of shares were given to this category. In the case of SNP, the ballot for those who applied for 500 shares, the minimum lot, led to eight out of nine applicants being left out. For SNP only about 15% of the share issue was given to those who applied for 500 shares.

Sir, privatization is nothing new. In fact, it has become the trend in the Western world. It is, however, interesting to note that in almost every case privatization makes use of the stock market as a vehicle by which to allot shares to the man in the street; hopefully, their own citizens. In contrast with Singapore's recent examples, the British case displays an enlightened approach. When British Gas was privatized, every one who applied for 500 to 10,000 shares was allotted shares. In Singapore, those who applied for large parcels of shares were guaranteed a minimum allotment. But those who applied for small lots had to undergo balloting. By contrast, in the British Gas issue, those who applied for more than 15,000 shares had to undergo balloting while those who applied for smaller lots were automatically allotted shares. Sir, if these are public companies belonging to the people of Singapore, I think it is only right that we return back to the people what is theirs in the first place.

Sir, if we want to achieve the widest public, Singaporean public that is, participation in privatization, it is essential that the basis of allotment be changed. I would thus like to suggest to the Minister to consider the following: Firstly, board lots should be as small as possible. In fact, why not as small as 100 shares? Secondly, the use of CPF funds for Government linked companies should be encouraged. This has already been stated and, apparently, will be the policy. But I do not understand why in the case of SNP, it was disregarded even though many investors would rate their investments in SNP as good as the one in RDC which was allowed. Thirdly, I would like to suggest that all citizens who apply for small lots be allotted shares while local and foreign institutions and those who wish to make large investments should undergo balloting. If the above were applied, Sir, I believe we would see many small investors participating in the privatization process. Also, those who use large financing facilities to apply for large amounts of shares would have fewer opportunities to speculate in the new listings. This obviously would lead to a very widespread ownership and a strong secondary market, since those who wish to make large investments would have to pay hefty premiums in the secondary market. True, Sir, there are some small investors who will obviously sell off their shares at a premium and make some money from the allotment. But then, Sir, these shares are theirs in the first place. These investments were made with their money. If the investments fail, as in the case of ECICS where I think they have taken a large amount of losses as evidenced by the supplementary budget estimates at the beginning of this sitting, such losses would have to be made good with Government, ie public funds. So if the Government has succeeded with some of its investments, I think the profits should accrue to the people of Singapore and not to foreigners or the large investors.

Sir, finally, I would also like the Minister to consider the issuance of partly paid shares because this means allowing the man in the street to save and pay for his shares in the beginning but over a period of time. That means even those with small sums of money can invest and pay for the shares over a period of time. Sir, if CPF funds are combined with this, it will surely encourage more small investors to be involved in the privatization programme.

The Parliamentary Secretary to the Minister for Foreign Affairs (Encik Yatiman Yusof): Sir, thank you for allowing me to join in the debate.

Sir, as a Singaporean, I am equally proud of the level of saving achieved by our citizens. The Government has inculcated the spirit of saving right from the beginning. As early as primary school, children are encouraged to save. As a result, Sir, the private saving and public saving in Singapore are considered to be one of the highest in this region. Some even comment that we have too much public saving that we tied our economy down.

Apart from savings, Sir, Singaporeans are also encouraged to invest their moneys. In this respect, Sir, I would like to touch on one small area of investment, that is, venture capital incentive which was introduced by the Government sometime ago. Sir, under this scheme, investing companies and individuals may deduct up to the full amount of their investment any loss arising from the sale of shares in an approved company. At the same time, the company or individual may carry forward its losses for write-off against future profits. What I would like to know, Sir, is: has this incentive introduced sometime ago been effective in encouraging investment? And, secondly, how was the response from companies and individuals towards this scheme?

The Chairman: Mr Yeo Toon Chia is not moving. Dr Richard Hu.

The Minister for Finance (Dr Richard Hu Tsu Tau): Sir, I would first deal with the questions raised by the Member for Whampoa about the role of Singapore as a financial centre. Undoubtedly, the development of Tokyo and Australia will impact on Singapore because we are in the same time zone and in the same region. But there are pluses and minuses. On the one hand, Tokyo, being a large industrial state with a large capital pool, is likely to attract a number of banks to set up in Tokyo as their regional centre and this might pose serious competitive alternatives to Singapore. Undoubtedly that is a possibility. Also, the increase in the number of foreign banks now operating in Tokyo since their liberalization will attract talent away from Singapore. These are two clear negatives which work against us.

Set against this, it is also true to say that there are some positive advantages to be gained from the growth of Tokyo as a financial centre in bringing more international business into our time zone. We have seen this spill-over effect in the very substantial increase in foreign exchange transactions in Singapore, particularly in Yen/US$ transactions. Currently, this amounts to some US$22 billion per day making us about half the size of New York and about the size of Tokyo, and one-quarter the size of London which is the largest. At the same time, there has been a substantial increase in the ACU markets as a result of activities of the Japanese banks and companies in Singapore. With the rising value of the Japanese yen, a number of Japanese companies are now moving overseas and locating in Singapore, and this brings with it banking activity.

So long as Singapore maintains its competitiveness in terms of infrastructural facilities and telecommunications and we maintain our efficiency of operations, I think we will have a continuing role as a financial centre in the region. Also, we have to ensure that our fiscal regime is more hospitable than in either Tokyo or Australia, which is indeed the case. So I am not pessimistic about our continued role as a financial centre.

Secondly, he has asked about the exchange rate of the Singapore dollar and its effect on the competitiveness of our exports. Exchange rate is not a simple problem. Ultimately, the exchange rate of a country's currency depends on a number of fundamental factors which include the political stability in the country, its balance of payments position, the growth of its economy, its inflation performance, the state of its fiscal balance, whether it runs a deficit or surplus, government's fiscal policy, whether it is contractionary or expansionary, the size of its foreign reserves, whether it needs to borrow money and therefore the debt burden, and so on. In a situation like Singapore where we do not have restraints on capital movements or foreign exchange controls, I believe the exchange rate is determined by the real economy, ie, by demand for our currency.

The policy of the MAS in this respect is confined to managing the fluctuations of the Singapore dollar so that it does not fluctuate wildly and therefore undermining the growth of the economy and also to ensure that the inflationary effects of currency changes do not impact on the economy. I do not believe it is possible for a small country like Singapore, without any controls on financial flows, to be able to manipulate its currency effectively against fundamentals. You will note that up to the end of 1984, whilst our economy was growing strongly and Government policies were contractionary amd running consistent surpluses, our currency was very strong. This is consistent with the fundamentals. Since the end of 1984, the Singapore dollar, has depreciated steadily against a basket of currencies of our main trading partners, principally the countries of the EEC and Japan by about 30-40%. It has maintained its rough parity with the US dollar largely because the bulk of our trade, as the Member for Whampoa has quite correctly pointed out, is transacted in US dollars and also because the US is our largest trading partner. Therefore, the US dollar weighting on our exchange rate is very significant. Hence, the Singapore dollar tends to track the US dollar. It has strengthened a bit against the US dollar but I believe not sufficiently to affect our competitiveness. I understand the Member for Whampoa's concern but I think our biggest policeman in this respect is the Ministry of Trade and Industry who are constantly watching the exchange rate and have not been hesitant in making their views known to the MAS. At the moment, our currency is approximately at the right level and should respond to basic changes in our fundamentals.

The Member for Leng Kee had asked questions on Government's participation in the economy and privatization. He has questioned whether, after divestment, Government- linked Companies (GLCs) will continue to be as efficient as they are now and on issues of management control. Indeed, these are matters of major concern to Government. I would like to restate the Government's privatization policy which is to withdraw gradually from involvement in private sector business. I emphasize the word "gradual" for a number of reasons. First, too rapid a privatization process will create indigestion in the stock market and will withdraw too much liquidity from the market leading to a depression of the economy. We certainly do not intend to do that. Secondly, perhaps of equal if not of greater importance, is the need to ensure an orderly transfer of management control so that companies which are divested do not collapse because of over-rapid removal of supporting management. By and large, therefore, we would prefer the route of partial privatization or privatization in stages to allow sufficient time for the transition to take place gradually. The GLCs, by and large, are run by full-time employees of the companies and I can see that when these are fully privatized the staff will simply be part of the new companies under private management.

The Member has also asked what is the money going to be used for. Government has many uses for money. It could go into the Consolidated Fund to avoid the possibility of increasing taxes elsewhere! It could be used as seed money for new investment ventures which the private sector is unwilling or unable to enter into, for example, in the biotechnical field. In between, it will be invested wisely. There are many options available to Government and I can assure the Member that it will not be squandered.

He has also asked a question on statutory boards; whether they will be allowed to retain sufficient surpluses for development. This will indeed be permitted and the Ministry of Finance will get together with statutory boards to determine their investment requirements over the long-term.

Finally, he has raised a question on the management of foreign exchange by MAS. This indeed is happening. A number of statutory boards, like the MRT, have their foreign exchange requirements entirely managed by the MAS. The PUB also works with the MAS on foreign exchange transactions. Some statutory boards prefer to do it themselves but so far as I am aware they have not got themselves into serious difficulties. The MAS is always available to give advice.

The Member for Boon Lay has raised the question of consumption tax. He has suggested that no new taxes should be introduced during a period of wage restraint. This is agreed to by Government. That is why we have not introduced any new taxes in this budget. I would make a general statement now because there seems to be a great deal of misunderstanding over the intent of Government as far as consumption taxes are concerned. There seems to be a belief that the tax will be imposed on top of taxes we already have. For some perverse reason, Government is thought likely to do this.

I have said that consumption taxes will only be introduced if it proves necessary and when we are convinced that there will be a permanent budget deficit direct taxes have been reduced to a level where revenue does not cover recurrent and other essential expenditures. To do otherwise would be silly, I thought. Also, if we should decide to introduce consumption tax, I can give the assurance that it will not be introduced in a way which will unfairly increase the burden on particular sectors, particularly the lower-income groups. Sufficient offsets will be found to ensure that the present distribution of tax is not unfairly shifted. I cannot give any specific assurances other than the general statement that whatever we do we will take into account the regressive effects.

The Member for Ayer Rajah has asked whether adequate funds will be available for the new schools which my colleague, the Minister for Education, has indicated would be needed. I can assure the Member that I am fully in favour of expenditure for education and where the Ministry of Education can put together a good case, funds will be made available. The amount is very substantial - $750 million for 150 to 200 schools or thereabouts but phased over a 10-year period. We can afford it and if it is necessary we will spend it.

The Member for Jalan Kayu has raised some of his usual questions which I will attempt to answer. He has said that generally the Government's policy on divestment does not seem to favour the small investor in Singapore or Singapore citizens and tends to favour the foreigner. That is not true. It may appear so on the surface but I will explain why. In the floating of shares, like the large capitalization shares of SIA, a certain proportion has to be reserved for foreign institutions as the nature of SIA's business is international. Therefore, it is important that foreign investors do have a stake in it as they will then tend, I hope, to support the airline. And equally important, they are price establishers. In other words, their participation in the flotation would tend to support the price which is good for the Singaporean who has the other shares. It would be wrong to make the categoric statement that all shares should always be initially offered only to Singaporeans with the residue distributed internationally because I do not think that necessarily is in the interest of the Singapore investor. Each case will have to be looked at on its merits.

In the case of the two companies where he has said that there was an unfair distribution - RDC and SNP - I think the first point to note is that both these share issues were very small and, because they were very small, they were grossly oversubscribed. In a situation like that, it is rather difficult to make a distribution of shares which will satisfy everyone. We could issue small lots of one hundred shares, but I think that these odd lots will be very difficult to sell subsequently. Therefore, I am not sure it is such a good thing.

In the case of RDC, CPF holders were allowed to use their funds because RDC is a trustee stock, and therefore, falls within the CPF usage guidelines. SNP is not a trustee stock, therefore it is disallowed. That was the reason. However, having made that general statement, I will take the Member's comments into consideraton and will commend to Temasek that the Member's views should be duly recognized in any future diversification flotations.

The Member for Kampong Kembangan asked whether the Venture Capital Incentive Scheme has been successful. We do not know, which is a good thing because the scheme is only applicable when ventures fail and the investor needs to write it off against their other profits. The fact that we have not heard anything is probably a good sign. I think that covers all the points.

Dr Augustine Tan: Mr Chairman, Sir, I thank the Hon. Minister for his kind answers. In one of his comments he raised something quite interesting, and that is, the problem of determination of exchange rate policy in our context. He said that essentially the exchange rate is determined by the real economy. I think there is more to it than that. There is a real part of the economy, there is a financial part. I think the problem for us, as for other countries, is that financial flows are now so overwhelming that they dominate exchange rate markets such that the exchange rates which are eventually set work to the detriment of the real economy. So it may have comparative advantage in production of certain goods where the exchange rate moves in such a way that it becomes uncompetitive. I think that is the nub of the problem.

If one looks at the economic history of the world since 1948, one can see a very interesting development. Initially the world economy started off with a lot of capital constraints, exchange controls, and so on. But trade was gradually being liberalized. During that era until 1973, exchange rates were, by and large, fixed under the Bretton Woods system. The reason why they could be fixed was that the world economy was doing well. There was sufficient growth in the world economy; but more fundamentally, because there were capital controls in place. But as the capital controls were eroding, countries in the world had no choice but to float their currencies. And now there is a dilemma. As the capital markets become more liberalized and more integrated, you have a paradoxical situation of a return to trade protectionism because there is no way to control or to ensure competitiveness of exports vis-a-vis other countries. I think that is the root of the problem.

And how we are going to fit in to this scenario of growing protectionism is something we have to face. We might have to study the case of South Korea and Taiwan and maybe introduce some form of constraints on capital movements so as to allow us the extra degree of freedom in manipulating our exchange rate, to ensure the competitiveness of our exports. As I mentioned earlier, you cannot cut your cost by 4% and allow your exchange rate to appreciate by 4%, you are vitiating the whole process.

Dr Richard Hu Tsu Tau: I thank the Member for Whampoa for raising the subject of exchange rates which I had overlooked.

What the Member for Whampoa says is true in general terms - that the exchange rate is now not always determined by real economy but by financial flows. This is absolutely true with countries like the United States which has a large international non-domestic holdings of their financial assets. The US has billions of dollars held by foreigners. So the movement of foreigners in and out of their financial markets can produce swings which totally overwhelm real economic developments. But this is not possible in the case of Singapore because we have always discouraged the use of the Singapore dollar as an international currency. That is why we have resisted this in the past. There are no substantial Singapore dollar denominated financial assets floating around the world. Therefore, large financial flows of this type which tend to negate real economic developments are not possible in Singapore. Large movements in financial flows in the case of Singapore are essentially speculative. And it is this which the MAS will resist. I think that answers his question about the need to impose additional capital constraints. I do not think we want to do that because in an open economy like ours, where we are inviting foreign investments, constraints on capital movements would be a retrograde step.

The Member has asked how we have responded to pressure from the United States about our currency being too weak and being lumped together with the other NIC's like Taiwan and Korea. We have spoken to the relevant authority in the United States and explained our circumstances. I think our situation is quite different and we cannot be compared with Korea or Taiwan. We have never had a significant balance of payments surplus with the United States except until 1985/1986 and the amount of surplus is relatively small compared to the enormous figures run up by the Koreans and the Taiwanese. Secondly, we have no import controls whatsoever. We have no tariff barriers to dismantle. These are the essential differences between ourselves and Taiwan and Korea. I believe that the US Government is aware of these differences and although they tend to include us in generalized statements about the NICs I think we merit separate treatment.

Mr Goh Chee Wee: Mr Chairman, the Minister has not answered my question about the measures taken by the Government to bring forward the public sector development project and the impact on the local industry or local economy.

Dr Richard Hu Tsu Tau: Sir, in 1985 and 1986 Government had, as part of its policy of stimulating the economy, accelerated and brought forward a large number of public sector infrastructural development projects. I think the total numbered about 220 with an aggregate value of about $4 billion. The Member should realize that these funds will have to be spent over a period of time. By the nature of these infrastructural projects, some of them have fairly long gestation periods. So it is difficult to ensure that the sums allocated each year will all be spent, but the intention is there.

The second part of the Member's question was whether local Singaporean companies had benefited from these infrastructural projects. I think the answer on a general basis must be yes. The Ministry of National Development and other Ministries have been careful in allocating funds primarily to projects which have the highest possible local content. We could easily spend vast sums of money simply by importing equipment and show a financial flow. It looks good but that is not the intention. This is one of the reasons why some of the expenditures have been slower than we would have liked. We want to ensure that money spent on stimulating the economy will be of long-term value to the economy. I believe, as far as local contractors are concerned, between 80% and 90% of the projects were successfully won by local contractors for the period up to the middle of 1986.

Mr Heng Chiang Meng: Sir, I hope that the Minister does not misunderstand me. I did not say that the British were fair to their public while the Singapore Government was unfair to its public. All I said was that in the British Gas method of allocation all the small lots were given shares, a minimum amount, whereas all the large lots or large applications had to be balloted. In doing so, it ensures, first and foremost, that there is a very widespread participation in the process. Secondly, it also takes into recognition of the fact that these shares which represent the ownership of the company belong to the people in the first place. However, I take heart that the Minister will speak to Temasek Holdings to consider this in future.

In this respect, I would like him, if possible, to refer the Temasek management to the share issue of British Gas, where the use of a claw-back arrangement allowed the issuer, ie, the government, to reduce the proportion reserved for UK and foreign institutions when the demand from small investors was good. Sir, it was originally planned for this issue that 40% of the issue will go to the British public, 40% to the UK institutions, and only 20% to the foreign institutions. However, as a result of strong demand by the UK public, in the event, the individual British public had 64% of the allotment, the UK institutions had 24%, and only 12% went to the foreign institutions. I think, Sir, this method is very much more enlightening than the two recent issues of RDC and SNP.

Dr Richard Hu Tsu Tau: Mr Chairman, Sir, I think there are distinct differences between these three cases. I repeat again. The size of the British Gas issue was so large that everyone could get his reasonable share, whereas in the RDC and the SNP cases, the total issues were so small that balloting was unavoidable. However, I am not disputing the principle, and again I would ask the Member to be more patient because in future we will certainly take into account some of his requests.

Dr Ow Chin Hock: Mr Chairman, the Minister has missed one point, and that is, about the development financing of statutory boards. I understand that they will be allowed to retain the accumulated surplus. But I have suggested two alternatives. One is to charge as high as possible or as high as the market can bear and generate the surplus. This surplus can be used for future financing of their development projects. There is another alternative, that is, to lower their price and charge on a cost recovery basis and borrow from the market to finance their development projects. This involves an inter-temporal choice. Whether the Minister will issue a guideline on which alternative would be better?

Dr Richard Hu Tsu Tau: I do not think we can be rigid in every case. I think statutory boards use a combination of both. In principle, statutory boards should avoid increasing their tariffs in order to get surpluses for investment purposes. They should strike a balance between the public purpose of keeping their charges as low as possible and the need to finance part of their development requirements through tariff with the balance coming from borrowings. I think the PUB is a good example of a statutory board which has struck a very reasonable balance. It borrows from the World Bank and from other multi-lateral institutions for their development needs. I do not think there is a single solution. But we would try and encourage statutory boards to recognize, by the nature of their activity, to try and keep their tariffs down. Telecoms is an example of a statutory board which has steadily brought its tariffs down. They have been persuaded to do so because of international competition, but their inter- nal telephone and telecommunication rates have also been brought down in order to support the development of Singapore as a communications centre. So they do exercise their judgment.

Dr Augustine Tan: Mr Chairman, Sir, I thank the Hon. Minister for his reply. And my Committee and I fully intend to continue to debate privately. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment (2), Dr Ang.

Dr Ang Kok Peng: I am not moving, Sir.

The Chairman: Mr Leong, amendment (2).

Mr Leong Horn Kee (Thomson): Mr Chairman, Sir, I beg to move,

That the sum to be allocated for Head N be reduced by $10 in respect of Subhead NA-01-1210 of the Main Estimates.

Sir, in moving this amendment, I would like to bring up a point which I made during the Budget debate, ie, why not backdate earlier the tax incentive for the $20,000 tax rebate and relief for the third child to a time when the Government first started the public discussion on the procreation of more children by our people. The Minister did not answer this point during the Budget debate and he suggested that Members could bring up specific issues during the Committee of Supply. So I would like to press this issue with the Minister. Also, some residents have again come to see me on the need for clarification from the Minister on this issue.

The question is: why did the Minister arbitrarily set 1st January 1987 as the effective date for eligibility? As we know, Sir, making babies is not a straightforward process. One cannot just order for a baby today and get one tomorrow. There is a gestation period of about nine months. So by making the effective date from lst January, the Minister is in fact awarding all persons who conceived their third child nine months earlier. This seems like a decision that is made more for administrative convenience.

Dr Augustine Tan: That prevents abortions.

Mr Leong Horn Kee: The Government should be more sensitive in deciding such matters as the eligibility date for tax incentives.

Sir, I feel there are two more equitable options which the Minister could have adopted. The first is to backdate it to a time, say, nine months after the Government first started the public debate or public discussion on the need for families to have more children. We can identify a time when a Government leader first raised this issue in public and then make it effective nine months from then.

The second option which is again to be more neutral is to make the tax relief effective nine months from the point of announcement, that means from the time when the Minister made the announcement in March. Between the two options, Sir, I would say that the first option is more equitable as people who have responded quickly and actively to the Government's call to have a third child should be amply rewarded.

Sir, I hope the Minister would consider my suggestion favourably and give us a good reply.

Dr Richard Hu Tsu Tau: The Member for Thomson said that I did not reply to his question during the budget debate. I also intend to avoid answering his question now, because financial incentives, its timing and other alternative measures are parts of a wider policy to stimulate procreation. So in consultation with my colleague, the Acting Minister for Health, we have agreed that he will respond.

Mr Leong Horn Kee: The fact that I am raising this point with the Minister for Finance is because I have raised this privately with the Acting Minister for Health. And he did suggest that I raise it with the Minister for Finance in this discussion. Now that it has been resolved that the Acting Minister for Health will answer the question, I would appreciate if he could give us the answer at the appropriate time.

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment (3), Encik Othman is not here. Encik Abbas.

Encik Abbas Abu Amin: Sir, I beg to move,

That the sum to be allocated for Head N be reduced by $10 in respect of Subhead NI-01-1210 of the Main Estimates.

Sir, I would like to raise two issues under this amendment. (1) Upgrading the lower income group of workers; and (2) the statement made by the Ministry of Finance on the 5-day work week.

Sir, under the present civil service technical scheme of service, including statutory boards, emphasis is given to paper qualifications. As a result of such emphasis, quite a number of long serving and loyal staff who do not have good education but have vast practical experience and exposure are not promoted. These lower level employees, namely, the daily-rated and Division IV officers are stagnated and disappointed at the maximum of their salary scale. I feel that more weightage perhaps could be given to practical ability, good performances and experience rather than paper qualifications.

I would also like to inquire from the Minister what efforts are being made to train or retrain these lower income group of employees and whether funds, such as the Skills Development Fund, can be readily made available to upgrade this category of workers.

I would now like to touch on the alternate 5-day work week. We all know that civil servants are expected to perform a minimum of 42 hours and up to 44 hours per week. There are many patterns of working hours, one of which is the alternate Saturday off. I understand that one statutory board has introduced this scheme for about 10 years now and have found it to be successful. The introduction of such schemes has improved the morale of the staff and it does not incur any additional expenses. In fact, productivity of the staff is known to have increased.

Sir, this 5-day work week has been well received, particularly by the working mothers who have been making a vital contribution at the time when the labour market situation was tight. On 16th February 1987, the Ministry of Finance issued a directive to all Government departments and statutory boards to cease the practice and to revert to the normal 5 1/2-day week by 1st April 1987. The Ministry of Finance should explain explicitly to the affected staff the rationale for such a move. A mere simple statement would not be able to clear misimpressions about the Government policy. I feel that statutory boards which have been given autonomy to decide on their personnel matters should continue to be given that flexibility to adopt their personnel policies as they are the ones who could understand their requirements well.

Dr Richard Hu Tsu Tau: Mr Chairman, Sir, the Member for Pasir Panjang has raised two issues. First, on the upgrading opportunities for lower level staff including the daily-rated. At the present time, upgrading opportunities are available to staff of these two categories. But the limitation is to a certain extent restricted by the availability of positions within the organization in which they can be promoted.

At the junior staff level, courses are available under the basic education programme or BEST programme. Under this programme, officers including daily-rated employees can be sponsored for studies up to the GCE 'N' level and the course fees are borne by Government. From March 1987, the Civil Service Institute will also be implementing a new training programme called Core Skills for Effectiveness and Change (COSEC). The programme is aimed at providing junior officers with a set of core skills to help them adapt to changes and to increasing work demands. The CSI intends to train about 2,650 participants per module per year. These two courses are subsidized by the Skills Development Fund.

In addition to the above, individual Ministries can also send their staff to courses conducted at the Civil Service Institute or local organizations like the Vocational Institute and Training Board, the training institutions of the Economic Development Board, National Youth Leadership Training Institute and the National Productivity Board.

The Member for Pasir Panjang can rest assured that Government will do all it can to upgrade the staff in this level and try to find adequate redeployment opportunities.

His second question is on the issue of the 5 1/2-day week. I am aware that this is a contentious issue. I think some background may be useful. Sometime ago, the Public Services Division of the Finance Ministry sought the views of all Permanent Secretaries on the proposal to introduce an alternate 5-day week system throughout the civil service. The majority of the Permanent Secretaries felt that the introduction of such a system would not be feasible in certain departments. However, a number of departments were allowed to carry out trials. Subsequently, the Management Services Department of the Ministry of Finance was asked to do a review of the whole exercise. Their conclusion was that the implementation of an alternate 5-day week system carried with it a certain risk of deterioration of public services because of the undermanning of offices on Saturdays. The risk will be particularly high for those departments which have a large interface with the public. The study also indicated that service-wide implementation will not be possible because of different work requirements and other considerations particular for individual departments or work units.

The Management Services Report was considered by the Permanent Secretaries and there was no consensus on the desirability of this scheme. Some Permanent Secretaries felt that departments which had dealings with the public should consider opening during the evenings with staff starting later in the morning. Their main concern was however that a change in working hours should not affect the productivity of the department as a whole. There was also concern that since Singapore was facing a severe economic downturn, it would seem inopportune to reduce the average work week or even introduce a modification in the form of alternate 5-day week although the total numbers are not changed.

On balance, therefore, the recommendation was made that this scheme should be withdrawn. Since this general policy decision was made, it was decided that it would be anomalous if certain departments which had carried out these procedures in the past would remain different. So in the interest of uniformity, the general ruling was sent out that even those departments which had previously practised this scheme should now cease this practice. I recognize, however, that this has created some degree of unhappiness and the Ministry of Finance is prepared to consider an appeal against this if it can be shown that the retention of this system by particular departments will not lower, firstly, productivity and will not create undue disruption of work and therefore be a detriment to public services.

The Chairman: Encik Abbas, can you withdraw your amendment as it is approaching guillotine time?

Encik Abbas Abu Amin: Sir, I would like to withdraw the amendment. Amendment, by leave, withdrawn. 5.00 pm The time allotted for Head N having expired, the following amendments were not proceeded with:- Mr Chew Heng Ching: Revenue Division (4) That the sum to be allocated for Head N be reduced by $10 in respect of Subhead NK-01-1210 of the Main Estimates. Dr Augustine H.H. Tan: Inland Revenue Department (5) That the sum to be allocated for Head N be reduced by $10 in respect of Subhead NN-01-1210 of the Main Estimates. That the sum of $169,395,000 for Head N ordered to stand part of the Main Estimates. That the sum of $852,092,300 for Head N ordered to stand part of the Development Estimates.

Head R -

Mr Lim Boon Heng (Kebun Baru): Sir, I beg to move,

That the sum to be allocated for Head R be reduced by $10 in respect of Subhead RA-01-1100 of the Main Estimates*.

Sir, the Government Parliamentary Committee on Labour does not consider that its role is just to articulate the views of workers. It must express the spectrum of opinion of both employers and employees, if it is to reflect the full picture.

We are agreed that labour policies must reflect the proper balance between the interests of employers and employees. We are also agreed that we should take care of the interests of Singapore workers, especially those of the lower income. We may not, however, agree unanimously on all matters. As such, the GPC members have been encouraged to speak their minds freely.

Sir, I wish to raise three issues for discussion. (1) There is a need for us to settle the question of the long term rate of CPF contribution. (2) Progress on raising the retirement age has been very slow, almost stagnant. More has to be done for us to achieve this very desirable goal. (3) The foreign workers' levy that was recently announced.

Sir, I propose to take the third item first, and for that I would appreciate if the Clerk would distribute a Table which I have prepared for Members' reference.

Sir, I have read with concern the press reports that some employers are unhappy with the new policy on foreign workers who have up to now been employed on the CPF scheme. The main complaint is that the $140 levy will raise wage cost for foreign workers.

I must express my unhappiness over this attitude of the employers. The Government's policy to reduce dependence on foreign workers was announced several years ago. Yet employers who have depended heavily on foreign workers have not taken concrete steps to wind down their dependence. They seem to take it for granted that it is Government's responsibility to ensure a ready supply of cheap labour. Indeed, I was amazed to hear in this House a few days ago the Member for Ayer Rajah saying that it is Government's responsibility to ensure a ready supply of cheap labour.

Dr Tan Cheng Bock: Can I make a clarification?

The Chairman: Mr Lim, are you giving way?

Mr Lim Boon Heng resumed his seat.

Dr Tan Cheng Bock: Sir, I heard my name being mentioned. I heard the hon. Member for Kebun Baru accusing me of --- what did you say?

Mr Lim Boon Heng: That it is Government's responsibility to ensure a ready supply of cheap labour.

Dr Tan Cheng Bock: When I brought up that point, I was thinking of two things. (1) a need, and (2) control. When the industrialists view the foreign workers' policy, they think that the objective of this policy is to ensure them a good supply of labour, foreign labour, and of course, cheap foreign labour. As I see it, and I am not going to be hypocritical about it, there is nothing wrong. The other thing is this. The industrialists are concerned because you ask them to bring in cheap foreign labour and yet you want to ensure tight control. The thrust of my argument then was to let the Ministry ---

The Chairman: Dr Tan, have you made your clarification? I see you are embarking on another long speech. Mr Lim, continue.

Mr Lim Boon Heng: Thank you, Mr Chairman. I quite understand the Member for Ayer Rajah's point. But I believe these were his exact words. He said:

'However, in implementation the objective must be to help our businessmen to get foreign labour cheaply and easily in order that industries and services can flourish.'

I do not want to debate the point but I think it cannot be Government's policy to ensure employers a ready supply of cheap labour. It should be Government's policy to see to it that there is a supply of skilled and productive workers whose wage costs are competitive. There is a subtle difference between cheap labour and labour at competitive prices.

Have the employers actually harboured hopes that Government will abandon the policy to phase out foreign workers? Do they see the Government's acceptance of a revolving pool of foreign workers as a weakening of will? Are they therefore wanting to exert more pressure so that Government will give in? I must tell the Minister for Labour the workers' view on foreign workers, in case he is wavering and considering giving in to the pressure that is being exerted on him by employers. After all, in the past two years, the power of employers has been considerable.

There has been a rumble of discontent among some workers that the ready availability of cheap foreign workers has depressed wage levels artificially, so that the lower income workers have suffered at low starting salaries. This complaint has been voiced from time to time in the past few years. Older workers, in particular, cannot compete with young foreign workers who are prepared to accept low salaries. Even when our older workers are prepared to accept the same low salaries, employers prefer younger workers.

Some employers advance the argument that the levy scheme is contradictory to the wage restraint policy. The unions' view is that it is wrong to use foreign workers to depress wages of Singapore workers. Singapore workers therefore see the levy scheme as a modification of the policy to phase out foreign workers. Foreign workers will not be phased out and there will be a revolving pool. The levy is seen as an instrument with which the Ministry of Labour can regulate the supply of foreign workers, to minimize the disadvantage to Singapore workers. Workers, especially those with lower incomes, are more concerned with their take-home pay. For this reason, I doubt that the employers' claim that the levy will raise the cost of foreign workers is valid.

I now refer to the Table which has been circulated. It can be seen that at a basic salary of $400, the total wage cost to the employer is $440. The take-home pay to the worker on the CPF scheme is $300. And if we assume the same wage cost to the employer, with a levy of $140, the foreign worker also takes home $300. But if we take salaries higher than $400, let us say $500, and apply the same principle that the same wage cost to the employer is applied, then it can be seen from this Table very clearly that the take-home pay of Singapore workers will be lower as compared to foreign workers. I think the percentage of reduction in total package for the foreign worker will be less and less substantial as the wages go up. This fact that the Singapore worker on CPF scheme will take home less as compared to a foreign worker on the levy scheme will pose problems for the unions. But the unions in Singapore are prepared to accept this and explain to the Singapore worker that he is better off because he has savings in CPF and he can use his CPF savings for housing, hospitalization and his retirement. So, in my view, the levy scheme is fair to employers.

Sir, now I turn to the long-term CPF rate. When the employers' contribution to CPF was cut from 25% to 10% last year, it was clearly stated that it would be restored when the economy recovers. The recommendation of the Economic Committee reads as follows:

'CPF. The problem of high wages should be tackled directly. As a large component of wage costs is CPF contributions, it recommends reducing the rate of employers' contributions to CPF by 15% points, from 25% to 10%, for two years in the first instance ... Meanwhile, the Government should study the appropriate long term rate of CPF contributions, one both adequate to meet the objectives of the CPF Scheme, and sustainable from the point of view of economic growth.'

When the First Deputy Prime Minister spoke to Singapore Polytechnic students in January 1986, he said:

'When the economic situation improves we can reinstate the higher CPF rate, step by step, and without upsetting investors' confidence.'

Then on the 26th February 1986, the First Deputy Prime Minister also disclosed, in this House, that a review was being made on the CPF scheme from a longer term perspective, "to decide on the appropriate long-term rate and structure of contributions that would meet the basic needs of the CPF scheme." He also gave an assurance to employers, and here I quote from Hansard Vol. 47, col. 240:

'When the employer's CPF rate can go up again will depend on the pace and strength of economic recovery. What the rate should be will take into consideration the basic objectives of CPF, the need to preserve jobs by keeping wage cost competitive, and the productive use of savings.'

The Chairman: Order. Mr Lim, your time is up. Dr Ow Chin Hock.

Dr Ow Chin Hock: Sir, just a few points. The unemployment rate in June 1986 was 6.5% and by the end of 1986 it was reduced to 4.6%. May I find out from the Minister some information regarding the profile of these unemployed people, whether they are young workers, or middle-aged workers, whether they are first-time job seekers or they are workers who have been retrenched, whether they are female or male workers.

Last year workers have made tremendous sacrifices. They accepted wage restraint and CPF cut. Their sacrifices have helped us improve our export competitiveness. These together with the increase in our external demand by 4% have helped our economic recovery. But the economic recovery has not been even and it is still fragile. Therefore workers have been asked to accept wage restraint for another one to two years. Here, I want to submit one point, that is, it is easier to convince workers to accept wage restraint if the price level is kept stable. Last year, the inflation rate was minus 1.4%. In other words, the price level in fact declined by 1.4% in terms of the Consumer Price Index. And the nominal wage increase was 1.6%. Therefore the increase in real wages was 3%. Therefore, could I ask the Labour Minister to convince his Cabinet colleagues not to raise any Government charges or fees, particularly on those services which affect workers during this wage restraint period? The increase in hospital charges, although the quantum is moderate, may create a psychological effect of resistance from workers to accept wage restraint. It may create some problems for our union leaders to convince workers to accept wage restraint.

Mr Philip Tan Tee Yong (Paya Lebar): Mr Chairman, some months ago when I conducted a public forum for my residents, some 200 people turned up. Amongst other issues, a lot of time was taken up on the issue of using CPF for education. Many of them voiced their dissatisfaction on the ruling against using CPF for education. They used a lot of emotive words and I do not think I want to repeat those emotive words here. They were not satisfied with the Minister's explanation as to why CPF cannot be used for education. The Minister has said that the objectives of CPF were home-ownership, old-age and Medisave. These people have said that, besides all these objectives, CPF has been allowed for stocks and shares and gold. Although an explanation has been given that their money is safe and sound in stocks and shares and they could reap it when they retire and they could get an increase in capital, the experiences in the past months and years gone by have shown that a lot of people who invest in stocks and shares have lost a lot of money and sometimes whole investments can be completely depleted. We have seen the case of a company that went bust, and if anyone has money in that company, including those who used their CPF to invest in that company, would not have even a cent left for their old age.

In order to minimize this risk, the Government has come out with a very ingenious way, and that is, to have some stocks and shares listed as trustee stocks and shares. They are very prudent and thereby give a certain amount of guidance to the general public to make use of their CPF wisely so that they can invest on these trustee stocks and shares. But, mind you, even for these trustee stocks and shares, there is no guarantee. Nevertheless, it provides some form of guidance.

What these residents said, amongst many other things, is that if the Government sees a danger in investment in stocks and shares and come out with this trustee mechanism to minimize the risk, then Government can also come out with what they call "trustee institutes of higher learning." In other words, the Government can go round to the universities or institutes of higher learning, both in Singapore and abroad, accredit them, look into their curricula and the soundness of their teaching, and so on and so forth, and then list them out and say, "These are the trustee institutes and thereby CPF can be used for education in these institutions." This is one way out. My observation of the emotional way they have expressed to me is that it merits some consideration. They could be a representation of a larger population who is very concerned over this issue of using CPF for education. Many of us would like to use this money for our offspring. I trust that the Minister will take this into consideration and maybe come out with something on these trustee institutes of higher learning.

Encik Abbas Abu Amin: I am not moving, Sir.

Mrs Yu-Foo Yee Shoon (Yuhua): ( In Mandarin): Sir, today I would like to touch on two questions. One is on the future trend of the use of CPF and the other is about wage restraint. Under the impact of economic recession, our Government has implemented various cost reducing measures in order to revive our economy. As a result, our economy is recovering slowly. However, there are people like the Member for Potong Pasir who are of the opinion that our wages are rather high and have even suggested to the Minister that part-time work should not be paid CPF by the employer. He claims himself to be the spokesman of the masses. But the eyes of the people are bright enough. When talking about CPF, is he thinking in terms of the people's pockets or his own purse? They are able to recognize that he is thinking in terms of his own purse and how to pay less CPF because he himself is an employer having some workers.

Sir, in order that the various measures on cost reductions can be effective in helping the recovery of the economy, we are not raising the CPF contribution rate this year. In order that employers could plan their costing and employees could plan their future livelihood, I hope the Minister could give us a plan or some inkling, for the coming three years at least, of the policy trend on CPF, because at the moment our policy on the reduction of CPF rate is on a two-year basis. After these two years, which ends with the present year, there should be some indication or a pointer to the trend of our CPF policy. In considering the future trend of CPF policy and in order that we may better dispose of this matter, the Minister should also take into consideration the people's retirement benefits, the housing need and Medisave scheme.

Let me touch on salary policy and economic development. With the reduction in CPF contribution and other cost cutting measures coupled with wage restraint, our economy is recovering its competitive edge. The Economic Survey pointed out that with increasing foreign demand our economic growth has been 1.9%. To reach the position of 1981, we have to continue with our wage restraint for one more year. Talking about wage restraint, some people including some Members of Parliament, confuse it with flexibility in salary system or wage reform. I think this concept is quite wrong and confusing. Some people are concerned that during the period of economic recovery, some workers may withdraw from exercising wage restraint or undergoing wage reform. We must not overlook or cast doubt on our workers' sincerity and reasonableness in exercising wage restraint or wage reform. We must be able to distinguish between what is a salary curb and what is flexibility in wage policy. Salary curb or wage restraint is a temporary measure to curb wage costs and help economic recovery. On this topic, our unions and our workers' attitude is that every year there should be a review of this salary curb. On flexibility of wages or wage reform, the view of our unions and workers is that we fully support wage reform on a long-term basis. We have expressed our attitude on this. In other words, we hope that our wage system would be linked up with the profitability and productivity and the performance of the workers and the companies. We should not doubt the sincerity of our workers in this respect.

But I have something to say on wage restraint for another year. In principle, in order to let our economy recover fully, in other words, to achieve our competitive position as in 1981, I agree to the wage restraint policy, but if you exercise it too stringently there could be some difficulty. At present, there is considerable volume of investment in our country. In the third quarter of this year, investment commitments increased by 36% over the same period last year, namely, $430 million. These new investments are to set up new factories and to recruit workers to begin production. At the same time, some companies are expanding their factories and recruiting more wokrers. The demand for larger factories is also unprecedentedly great, in fact, the second highest ever. All these factors will affect the supply and demand of our labour market.

We are concerned whether, under the pressure of this labour market situation, severe wage restraint can stand the test or not. Since the wage restraint policy was announced, the unions and the workers have been abiding by such agreements. But some irresponsible companies have begun to dispense with this agreement. For example, a textile company had concluded an agreement on wage restraint with the union after some great effort and under the auspices of the Labour Department. But less than half a year later, the company on its own volition asked to dispense with the agreement on wage curbs, giving the reason that it had to conserve existing workforce and to facilitate recruiting new workers. The company suggested higher wages and increasing the allowance for the second shift workers. There is another example, an oil refining service company which has signed a two-year agreement with the workers' union on wage restraint but, in less than one year, because certain non-unionized workers wanted to leave their service, the company started to readjust the wages. This action has also broken the wage restraint agreement.

There is another factor we should take into consideration. In implementing wage reform, as some companies are already discussing with the workers' unions about the link-up of wages to performance and profitability and productivity of the workers and the company, we should not be too hard and fast on wage restraint but be flexible by adjusting the wages according to changes in such factors. With such flexibility, our flexible salary system can be carried out well. Yet another factor that we should consider is the salary conditions of our neighbouring countries, such as those prevailing in South Korea and Taiwan. It has come to our knowledge that they have high economic performance this year, so they may be adjusting their workers' salaries accordingly. This will be to our advantage and beneficial to our competitive position.

Finally, to sum up, we support the broad principle of wage restraint, but it should be flexible, varying in accordance with different performances and conditions of individual companies. If we predict the growth rate at the end of this year to be higher than the present, then the National Wages Council should consider in its annual wage recommendations giving better treatment to the lower salaried workers. We should give consideration to such workers because in the past year their wage increase was -0.9%. What is fortunate is that our living costs have not been raised. Therefore, their purchasing power was not affected very much but this year there may be a 1% increase in the cost of living. Therefore, in considering wage increases I hope that the National Wages Council will give these workers a little bit of encouragement. Here, let me express my hope that with the tripartite cooperation and united efforts of the Government, the employers and the employees, our economy will recover soon.

Mr Goh Chee Wee: Sir, I would like to touch on three issues - the incentives for woman workers, part-time employment and employment of older workers.

Sir, the Government has introduced new incentives to allow working mothers in the civil service to take more time off to look after their children. The incentives include (1) up to four years' no-pay leave for child-care; (2) part- time employment for married women who have children below six years; and (3) full-pay unrecorded leave to look after a sick child. I would like to commend the Government for introducing the incentive scheme and hope that the private sector employers will follow suit. Of course, I can understand the reluctance of employers to grant four years' no-pay leave because the private sector enterprise faces greater uncertainty of their future than the Government as an employer. Nevertheless, I would like to see that as far as possible companies, particularly the larger ones, should keep the no-pay leave option open for the woman employees.

The Chairman: Order. It is 5.30 pm.

Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House.

The Leader of the House (Mr Wong Kan Seng): Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Main and Development Estimates for the financial year 1987/88, and ask leave to sit again tomorrow.

Mr Deputy Speaker: So be it.