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 [7th Allotted Day].

[Mr Deputy Speaker in the Chair]

Head V -

11.23 am

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

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

In moving this amendment, my committee Members and I are concerned with a number of issues relating to trade and industry. I will mention some of them and my Members will speak on the rest.

The first issue concerns our bilateral trade relations with different countries. As we all know, we are faced with increasing protectionism today. Last year, we had the case of our exports of tropical fish to the United States banned or restricted for a while. And, from time to time, various items of trade are subjected to scrutiny of various kinds on all kinds of pretexts. This happens not merely in the advanced countries but this happens in developing countries as well. But paradoxically or ironically, within the region of ASEAN, there have been recent moves towards greater economic cooperation or economic integration and there have been no lack of suggestions in this area. At the same time, we have been subjected to harassment, subjected to a lot of non-tariff barriers from various countries in the region. Hon. Members are aware of the existence of exit taxes imposed by some countries in the region. There was a threat to end our airline agreement with Malaysia. Last year, I believe, you, Sir, raised the question of milk powder and water jugs as problems that we have with Malaysia. I believe the water jug problem is still outstanding. And there have also been a number of restrictions on electrical goods which are brought back to Malaysia from Singapore. I understand the list is going to be extended very shortly. What is our Government doing about these measures which have been instituted against us? How can we have greater regional cooperation if our bilateral trade relations are so poor?

I come now to another issue that has to do with promoting the private sector in Singapore as an engine of growth. Sir, we all know that since 1960, our economy has been driven by two economic engines:

(1) The influx of multi-national corporations coming into Singapore bringing in capital, technology, access to markets, skills and so on; and

(2) The public sector itself responding to this or in anticipation of the new investments by providing the infrastructure and, of course, our huge public housing programme.

Both of these have spawned a number of other activities in transport, communications, information services and so on and so forth. But we are now at the stage where both of these engines are stalling or are not working as well as they used to. We know, for example, that the net investment commitments in manufacturing have been falling. And public spending on infrastructure and housing is declining and is expected to decline in the years ahead. Our fixed capital formation figures have also been declining in the last two or three years. So we need to have an alternative engine of growth. That means the promotion of services and the stimulation of local enterpreneurship, local enterprises, upgrading them, encouraging them. Government has taken the lead in these two areas. My question to the Minister is: from his monitoring of developments in these areas, is he satisfied and what other measures are necessary?

Quite recently, General Winston Choo in speaking to the SAF mentioned that a number of soldiers or many soldiers have this kia su spirit. And I believe that this spirit has also infected a lot of other Singaporeans as well, particularly businessmen. It is the fear of failure, the fear of being scolded. It is risk aversion, an attitude of risk aversion. We know the scions or the sons and daughters of many traders and entrepreneurs have now secured jobs in the professions and have become executives and managers. They prefer to do this rather than to become entrepreneurs. What can we do to overcome this? The Economic Committee Report had a good analysis of the problems and it was stated there that we should, through the educational process, inculcate a more creative spirit. I hope our independent schools that are going to be set up will be helpful in this regard. But then there may be laws and regulations that we have that may need adjustment. So that is one part of the problem of promoting local entrepreneurship.

The other part has to do with access to capital. The question is whether we have enough venture capital. I believe it was in 1985 that about $100 million was set aside under the EDB for venture capital. I understand from the Annual Report of EDB that very little actually has been spent. Is EDB the appropriate vehicle, the appropriate institution, to provide this venture capital? Should we not think in terms of a wider network? The problem is this, Sir, that when one goes to a bank for a loan for business or for anything else, one has to produce collateral. If one does not have the collateral, then very small amounts of loan are available on a personal basis, on the basis of your signature, and looking into the background, what kind of job you are doing. This inhibits a lot of businesses from expanding. They may be good entrepreneurs with good ideas, good projects, but they have great difficulty in finding funds for expansion or even for launching their business. Ironically, those companies that may have the collateral end up as colossal failures. We have no lack of examples - Pan-El and other companies that have failed. In other words, banks tend to look at balance sheets rather than to evaluate the character, the personalities of the people coming forward to apply for these loans.

At the broader level, Sir, I believe we need a very careful investigation of the whole savings, investment, intermediation process. In other words, to study the flow of funds in our economy. Britain has done it. I think there have been two studies. One, the Radcliff Report, and later the Wilson Report. I believe Australia has undertaken such a study too, recently. We need such a study to see how savings get into the hands of investors ultimately. And if there are impediments in the process, then these impediments should be removed. There have been no lack of investments in the property market; no lack of investments in financial markets. But we are lacking in investments, in manufacturing, in a lot of service areas that would do Singapore a lot of good.

Dr Ow Chin Hock (Leng Kee): Mr Chairman, Sir, the first issue I would like to raise is tourism.

In 1985, the then Minister for Trade and Industry and the current Minister for Finance promised that we would develop Singapore into a major tourist destination in his Ministry's Addendum to the Presidential Address. I asked myself at that time, that looking from the viewpoint of a tourist, what could Singapore offer? We do not have the Great Wall, Taj Mahal, Grand Canyon or River Rhine. We are supposed to be a City in the Exotic East, but some people observed that we have lost the oriental mystique and charm. We are supposed to be an Island in the Sun, yet we have inadequate beach resorts and sea sports facilities. Our world's tallest man-made waterfall in Jurong Bird Park and our third world's largest oil refinery impress no one except economists.

Hence, I welcome the proposed $1 billion tourism development projects. This package of projects represents the Government's first and major investment in tourism. This project, when completed, will offer a variety of tourist attractions so as to attract more tourists from different regions and different countries and to encourage them to stay longer and spend more. As I understand it, this $1 billion sum is supposed to be seed money. This is to attract the private sector's participation in the development of this tourism project.

I have three questions here for the Minister.

(a) What is the expected return on these investments over and above the 16% of foreign exchange earnings at present?

(b) Apart from F&N participation in the Haw Par Villa project, what are the responses from the private sector so far?

(c) The Raffles Hotel. This hotel is a unique asset to Singapore. It is an anchor project in the proposed Heritage Link. But the upgrading of the hotel, I was told, has encountered some difficulties because the lease period will expire only by the end of 1995 and is under the Rent Control Act. May I ask the Minister what is the present status and when will the restoration work of the hotel begin?

Apart from developing Singapore as a tourist destination and offering tourist attractions, we must also explore other possibilities:

(1) Promotion of Singapore as a convention and exhibition centre so as to attract high yield or high value added tourists.

(2) Cooperation with other Asean countries or other countries like China in promoting tourism.

May I ask the Minister what progress have we made in these two areas?

The second point I would like to raise is the retail trade. Here I have a complaint for the Minister. Our data on the retail trade and wholesale trade are outdated. The latest data I can get is 1983. In 1983 the retail trade sector employed some 66,000 people and had a turnover of about $10 billion. So it is a fairly large sector. Whenever I read in the newspaper about the opening of a new foreign departmental store, I could not help wondering whether our domestic retail trade market has expanded so fast. I also wonder how many young workers competed away from our manufacturing and other sectors. Do we really need so many foreign departmental stores? Could our local retailers compete effectively with these giants? Perhaps the Minister could give us an update on the demand and supply situation in the retail trade.

A related problem is counterfeiting of trade marks or fake goods. This issue is very close to your heart, Mr Chairman, Sir. You have raised it twice before. Not only counterfeiting is unfair to retailers and wholesalers who deal in genuine goods and their employees but it may also provide an excuse for our industrial trading partners to take protectionist measures against us.

I am quite sure the Minister is aware of a magazine in Taiwan called "Tian Xia" (Commonwealth). The "Tian Xia" ( ) magazine in its February 1986 issue referred to counterfeiting as the "world's second oldest profession". So may I ask the Minister what he proposes to do with this second oldest profession. We have passed the Copyright Law in January this year. Is it not a logical extension to cover counterfeiting as well?

Mr Goh Chee Wee (Boon Lay): Sir, under this amendment, I just want to ask the Minister for Trade and Industry whether the Ministry has made any progress in developing an econometric model which will provide a forecast of our economic performance. I would also like to know if a series of leading indicators for the economy have already been developed. If so, have the indicators been tested to be accurate and relevant? For instance, could we have predicted a recession in 1985 and a recovery in 1986 using those indicators? Assuming that these indicators are tested to be accurate and relevant, and looking at the indicators today, what would the Minister say about our economy for the next few quarters?

Encik Yatiman Yusof (Kampong Kembangan): Sir, I wish to join my other GPC colleagues in supporting the motion moved by the hon. Member for Whampoa.

Sir, since the acceptance of the Economic Committee Report, we have seen positive and constructive measures taken to give our economy a new push and a new momentum. If the latest figures concerning our economic growth are of any indication, then I believe, Sir, we have good reason to be optimistic. However, Sir, I share the concern expressed by many Members of this House on the imbalanced nature of our economic recovery. Sir, I am particularly concerned with the construction, service and retail sectors of our economy. These sectors have not been responsive enough, making our economic recovery appear to be a bit lop-sided. I do not wish to elaborate on the problems faced by our construction sector more than necessary as this has been sufficiently touched on by other Members of this House. However, I would like to join them in appealing to the Minister to consider ways and means to strengthen this sector.

Sir, construction is one of the sectors which contributed towards our double-digit growth in the past. It has tremendous potential which, if fully exploited, could contribute a great deal to our economy. While I agree that in some areas our local contractors are lagging behind compared to the big foreign contractors, I would like to join other Members of this House in questioning the wisdom of allowing big foreign construction companies to compete unfairly with our local firms.

Sir, I am not advocating protectionism in Singapore, but I believe that we need to review the cost benefit analysis of such practices when our local construction firms are facing severe beatings from the recession and major reductions in our public housing project. There is a saying that charity begins at home. I would like to add that opportunity must be created at home for our construction industries to survive and thrive.

Sir, many Members in this House who have spoken before me, including the Members for Whampoa and Leng Kee, suggested that the Minister seriously consider the possibility of repackaging the major projects in such a manner as to enable our local companies to participate. Breaking down big projects into smaller packages is one way. Another way is to institute joint ventureship between foreign and local construction firms to undertake local projects. Sir, this is important for the following reasons:

(1) To ensure that our local firms are given a fair share to various major public projects.

(2) To enable more rapid transfer of technology.

(3) To enhance the process of skills upgrading among our middle and high level construction workers and technicians.

Allowing unequal competition from among foreign firms in our local construction projects means encouraging the Japanese, the Koreans and others to bring in their technologies, their designers, their planners and their technicians to operate here, thus minimizing the chances of our local designers, technicians, workers and entrepreneurs from acquiring the desired knowledge and skill. In the long term, Sir, it undermines our capability of competing with foreign companies for contracts abroad. I hope the Minister would bear this in mind.

Another area, Sir, which I would like to touch on is the retail sector. The Member for Leng Kee has already spoken on the effect of giant foreign retailers moving into Singapore towards our local labour market. Well, we are aware that the growth for this sector depends on two major factors among others. First, the inflow of tourists from abroad and, second, the increase of our population's purchasing power. While I am glad that the Government is investing $1 billion to develop our tourist potential by upgrading and creating more diverse tourist attractions in Singapore, such efforts need time to bring about the desired results. With our wage restraint policy in full swing, there seems to be an extremely remote possibility of an immediate upsurge in the retail sector resulting from better purchasing power. Meanwhile what can we do? Sir, we cannot wait and see our local retail companies folding up, one by one. Some well-known firms have already been made oblivious because of cash flow problems. In their place we begin to see giant foreign retailers moving in, securing the market, and are poised for expansion when the economy returns.

Sir, big names in retail business, such as Yaohan, Isetan and Sogo, are rapidly eliminating our locally known firms. I am afraid if nothing is done we may see the growth of oligopolistic trend in retail business. They kill our local entrepreneurs. Again, Sir, I am not suggesting that we embark on protectionism. But I certainly believe, Sir, that something must be done before such big firms, after establishing themselves in our major shopping centres, start moving into the housing estate service centres.

Sir, we need to bring back the golden image of Singapore as a shopping paradise. We have to monitor, if necessary, control the over-expansion of our retail outlets that cause the retail glut and delay the introduction of consumption tax that would certainly affect the retail prices. While I totally agree that, as in the case with other sectors, we have to be competitive, there is a real need for us to, first, expand the market; second, improve our quality of services to customers; and, third, consolidate ourselves before we can make a quantum leap when the economy improves. Perhaps the Minister can look into the ways and means of providing services in retail research; (b) helping the local companies to identify new areas of expansion; and (c) to help rebuild the image of Singapore as a shopping paradise.

The Chairman: Mr Chng Hee Kok is not here. Mr Yeo Toon Chia.

Mr Yeo Toon Chia (Ang Mo Kio): Sir, I would like to touch on rice, sugar, petrol and diesel prices.

Sir, the fall in the cost of living last year came at the right time as this helps to offset the recessionary effects on households. Basic necessities like rice and sugar fell by 13% and 11% respectively. This substantial fall was due to better harvest from our suppliers. As we all know, prices of commodities fluctuate on the basis of supply and demand. As a consumer country that depends heavily on producing countries for our basic necessities, I feel that more must be done to ensure the stabilization of prices and an ample supply of basic necessities to meet our needs. Perhaps in the case of rice, we should not limit the number of importers but liberalize and allow all bona fide importers to import rice for local consumption. This, I feel, will not only bring the price of the commodity down but also encourage local importers to cast their nets wide and scout around for more suppliers for the cheapest and more varieties of different grades of rice. The keen competition among the importers will ensure that prices are kept down and that we do not have to depend heavily on a few suppliers.

Sir, with regard to sugar, I feel that since it is an essential commodity, could the Minister consider removing the import duty on sugar? Though the duty may be necessary because of long-term supply contracts made with suppliers by the Sugar Industry of Singapore to ensure that our consumers enjoy a stable price of sugar supply, I feel that the Ministry ought to review this policy especially when we are moving towards privatization and most of our consumers fail to understand why Government has to impose import duty on sugar. By removing the sugar duty to enable more bona fide importers to import sugar, the keen competition will compel our importers to look for alternatives and cheaper sources so that our consumers could have the cheapest type of sugar made available to them.

Sir, I would also like to bring to the Minister's attention regarding the adjustment of petrol and diesel pump prices. I feel there is a misconception amongst the public that pump prices are fixed by the Ministry of Trade and Industry as it seems to be the Ministry's job to announce the adjusted prices of petrol and diesel whenever there is an increase or fall in the price of crude oil. The Ministry of Trade and Industry does not buy or sell petrol and diesel. The oil companies are the importers and suppliers of these products and the price at the pump is a reflection of the cost of imported crude oil. As such, would the Minister consider correcting the misconception and leaving future announcements of pump prices to the individual oil companies and allowing market forces to determine the prices of the product?

Sir, I feel that as Singapore moves towards privatization, Government should allow free play and let market forces determine prices and let consumers have a say in their preferences and the price they want to pay for a product. What Government should do is to monitor the situation to ensure that there are sufficient supplies of all essential daily necessities and that the interests of our consumers are well protected.

The Minister for Trade and Industry (BG Lee Hsien Loong): Sir, let me first respond to the points raised by the Member for Whampoa. On bilateral trade relations, we do indeed face an uncertain and occasionally hostile environment. Last year, as Members are aware, there were literally hundreds of Bills in the US Congress proposing to impose protectionist policies in one form or another on different segments of America's international trade - steel, textiles, computers, cars, dairy products, farm products, all sorts of things. Each business had found a spokesman in Congress and had had its interest reflected in the Bills which were submitted.

Fortunately, when Congress dissolved in November last year for elections, most of these Bills died. Unfortunately, when Congress met again in January this year, some of these Bills were resurrected. It is inevitable. It is in the nature of the US political process that pressures do not just disappear for procedural reasons. If the underlying problems are not solved - in this case, the underlying problem at one level is the American trade deficit and at another more fundamental level is the American budget deficit which leads to the trade deficit - if these problems are not solved, then the pressures of protectionism will continue.

They affect us directly. The Member mentioned tropical fish. There are other cases. Our export of steel to America is negligible in terms of America's overall steel trade. ASEAN's exports of steel mill products to US form 0.05% of total US imports, or 0.01% of US domestic consumption. Yet we have problems, all kinds of complications about rules of origin. Is the steel product genuinely made in Singapore? Of course, the steel is not made in Singapore but the product is - the fabrication, the welding, the cutting and the putting together into what the consumer wants, that is made in Singapore. But never mind - we did not smelt the steel, therefore we must be subject to harassment, all kinds of restrictions.

The same is true even in services. There is an old Federal Aviation Agency rule which the Americans resurrected, which states that for aeroplanes flying domestic routes in America, all the parts and components have to be serviced within United States. Never mind how good your servicing shop is or how professional and how competent your team is. Never mind even if it is an American company operating overseas, exploiting our efficiency and our productiveness. If it is not done in America, it is deemed unsafe and the component cannot fly on the US aircraft. The Americans have some companies in Singapore which do the repair job, and then fly all the components back to Chicago, to be re-inspected, and then declared as an American-done job. And even that the American Government considers a loophole, and is trying to stop.

The environment is hostile. Of course, we raise our protest. We register our objections to Congressmen, to the Administration, to visiting US dignitaries. We try to make the Americans understand that this is not the way to treat allies, and that treating allies this way not only has trade ramifications, but will affect their entire strategic and political relationship, and in the long run will be very detrimental to the interests of the US. I think they understand. Whether they can act on that understanding, given the nature of their domestic political process, we are not so sure.

As the Member for Whampoa pointed out, we have trade problems even within the region. Last year, Mr Deputy Speaker, Sir, you asked me about re-exports of Australian milk powder and electric jugs to Malaysia. I told you that I would do my best to get these cases resolved. The milk powder has since been resolved amicably. The electric jugs, as you would have read in the newspapers recently, are still outstanding. We still hope to find a reasonable solution, but I do not wish to comment further on this open matter now.

It is important that ASEAN should find ways to cooperate better amongst ourselves on economic matters. We may not be able to solve all our trade disputes, but if there is an overall current of cooperation, an overall sense that we can all benefit from joint gains if we work together, then given the overall thrust of policy, eventually the smaller problems can be settled. Of course, the Singapore Government owes a responsibility to Singaporeans, including traders and businessmen, and we have to do whatever is necessary to defend these interests. Often, it is more effective to do this quietly, rather than to make strong public pronouncements on these subjects, but we will do whatever is necessary. Where we feel that international forums can be used for us to press our case more effectively, for example, in Geneva, at GATT, we will do so. Eventually our traders and businessmen will be able to benefit from the Government's actions.

As for the private sector, the Member for Whampoa mentioned that there were hitherto two engines of growth - multi-national corporations and the public sector, and both are now stalling. The first half of his sentence is right. I do not agree with the second half. Both engines have been important. Both remain important; they are not stalling. But we need to supplement them with a third one, namely the private sector. We discussed this in the Economic Committee last year. The Report explained the considerations, the educational and the institutional changes necessary to make people more eager to venture into new areas, and at the same time make sure that when they want to venture, they can get funds, they can get support and backing, that they have the know-how and skills to succeed.

We knew then, and I think we realize even more clearly now, that there is no quick solution to this problem. To create an entrepreneurial spirit, to create a whole entrepreneurial class, people who can venture a $100 million and from time to time lose it without batting an eyelid, because they have the confidence that the next time they venture they will win again - that is not done overnight. Neither is it done simply because the Government says, "Be bold, go forth and achieve the impossible." Of course the Government will give whatever encouragement it can. But the spirit, the confidence must come with time and with the right environment. I think we have put the correct environment in place - low taxes, better institutions - Sesdaq is one way in which funds can be raised for promising ventures - and privatization of Government enterprises. We have already served notice that these businesses are going to be sold into the private sector. The private sector has ample time to prepare itself, to be ready to take over these businesses. Not only sustain them, but to carry them forward another step onto another level. We hope that the challenge will be taken up and, perhaps not next year but five or 10 years' time when we discuss this subject again in the House, definite signs of improvement will be visible.

I should add one caution. It is not just the spirit of derring-do which leads to great success. You need derring-do, but you also need know-how - technical know-how, technological expertise, not only the desire to do things but also the competence to understand how to do things. In a modern industrial economy, this is hard to come by. You need a team - engineers, designers, people who understand the market, you need people who have kept up with the technology. This means fitting in their own contribution to this mainstream of technological developments taking place overseas. If you start from scratch to set up what is quaintly known as a Mom and Pop Shop, that means a grocer store on a corner, and hope to strike it rich and become a billionaire - I would not say that you will definitely fail, but I think it will be hard to persuade bankers to put any money on your project.

That, I think, meets the Member for Whampoa's point. Access to capital is not really the problem. Yes, we will improve access to capital, we will have Sesdaq. Bankers have a good sense of what projects are worth backing. But it is not lack of funds which is preventing us from taking off in bold new entrepreneurial directions. It is lack of ideas. Making more funds available will help a little, but it will not solve the problem. The Member has himself pointed out that there is no difficulty finding backers for property development projects and financial investments. But there are very few projects in manufacturing and services. So my conclusion is not that the funds are going the wrong places, but that the knowledge to do the manufacturing and service projects is simply not there.

The Member for Leng Kee mentioned tourism. We want to be a major tourist destination. There is no Grand Canyon, there is no Great Wall, there is no Boro- budur or Angkor Wat in Singapore. So what attracts people here? Well, while we do not have the Great Wall or Angkor Wat, Singapore does have its attractions. It is a unique city with a special history of its own and it would make an attractive addition to anybody's far eastern itinerary. I am not sure that an American will travel all the way out to Singapore just to have a look at Chinatown and Little India and Sentosa. But any American who is in this region, visiting Thailand, Indonesia, Malaysia, would find Singapore a worthwhile and interesting stop. We have to build on what we have. We cannot make Singapore what it is not. We cannot build Angkor Wat here, nor do we intend to try. The one billion dollar tourism development fund is for providing the infrastructure. It is seed money to attract entrepreneurs to come in to set up projects which will be individually viable, and cumulatively will make Singapore a more attractive place for tourists to stay one or two days more.

What returns do we expect to get on this investment? It is hard to say. We will judge each project on its merits and the funds will go to the best projects. We have some ideas. One was mentioned by the Member - Raffles Hotel. It is a famous landmark. I suppose next to Bugis Street, it is probably the most famous tourist attraction in Singapore. Many tourists come to Singapore may not stay in the Raffles Hotel, but they will visit it if only to have a Singapore Sling at the bar. We should capitalize on that and exploit it. We should not let the Hotel run down into desuetude but develop it, make it a pivotal attraction which anybody who comes to Singapore must not miss.

The Member has pointed out that there is some question about the status of the Hotel because the lease runs out within a few years. The Government is aware of this. In fact, the Government has discussed this matter with the owners of the Hotel, and I am happy to say that the owners have agreed to develop the Hotel. We are presently waiting to see their specific development plans. The Hotel has already been gazetted as a national monument, so it will not be torn down and you will not suddenly find an aluminium-clad skyscraper in its place.

What other ideas do we have, apart from Haw Par Villa? There are many projects outstanding. In Sentosa, we have received several proposals to build a resort hotel. The tender is not yet closed. There is some foreign interest. There is a proposal to build a Singapore entertainment centre and theme park. A substantial number of foreign firms and local firms also have shown interest. Submissions will close in the middle of this month. I am optimistic that something will come from this. And there are others.

In terms of infrastructure, one project is the link to Sentosa, which is covered in the Tourism Development Plan. It is important because for Sentosa to flourish, the connection to the mainland is crucial. Because to have to take a ferry across and then take a bus on Sentosa itself is sufficient of an inconvenience to deter many people from going there. With a link, we can have residential houses on Sentosa. It will be a very desirable suburb of the city. The value of the island will go up. The Government is actively studying how to build this link. It could be a causeway, a bridge, or a tunnel. Each has its advantages and disadvantages. It is a very complex decision to evaluate which one is best. We have not quite reached a decision, but we are quite firm that we will develop the island and we will build the link, in one form or another. And I hope the knowledge that this link will be built will encourage investors in Sentosa to proceed with greater confidence because it will make their projects that much more viable.

Retail trade and construction, unfair competition from foreigners - I will leave these to my Senior Parliamentary Secretary to answer. I should just say that if we want to be a shopping paradise, we have to let everybody come and do business here, whether it is Isetan, whether it is Sogo, Yaohan, Metro or Robinsons. It is up to them to offer goods which Singaporeans and tourists like to buy. And the more successful they are in doing so, the more tourists we will attract to Singapore. Competition has to be open. For the Government to decide that there is already sufficient competition and no more would not be desirable. I think it would be, to quote the words of some of our critics, "paternalistic in the extreme".

As for counterfeiting, the Member for Leng Kee informs me that it is the world's second oldest profession, and asks what I will do about it. Well, if it is the second oldest profession, it would be presumptuous to think that I could get rid of it altogether. But the Government will look into the matter. Tourists want to buy goods here. As long as there is a willing buyer and a willing seller, it is very hard for the Government to get in between. Yesterday, I received a group of American executives. They asked what I would do about counterfeiting. I reminded them that the trouble with yielding even to reasonable requests from friends, is that new demands rapidly follow. Their previous request was on intellectual property. We have taken action, the ink is barely dry on the new Act, and now another request to do something about counterfeiting. I then asked whether any of them had by any chance bought any counterfeited goods in Singapore. Indeed they had. Several of them had bought fake watches. You will be sorry to hear, Mr Chairman, Sir, that some of these watches had already broken down. So I think they understood the problem. We will try our best to deal with counterfeiting, but I think the problem will be here long after I am no longer Minister.

The Member for Boon Lay asked about econometric models and forecasting, and whether we have made any progress with our leading indicators. Yes, we have. We are not ready to announce our results yet because we do not want to lend a false sense of certainty to what we do. But MTI has been monitoring a tentative leading indicator for several months now.

A leading indicator, if I may explain, is a number which gives you some idea whether the economy is going up or going down. It does not tell you whether you are going up quickly or slowly, but it does tell you which direction you are moving. We do that by putting together various factors which seem to be relevant; for example, how many new businesses are formed, how many new orders manufacturing companies are getting, how big companies' inventories are, the wholesale prices of manufactured goods are, share prices and stock market activity, bank activities, loans and advances to individuals and to corporations.

The leading index seems to predict how we will be doing over the next five to 12 months. It seems to be able to tell whether the economy is growing or shrinking, although we cannot quite be sure when it is going to turn. So far, the economy still seems to be expanding although, as I have pointed out, at a slower rate than before. If the economy continues to behave as it used to behave, then we can expect further growth in the next six months. That is one aspect of prediction.

The other aspect of prediction is to try to get some idea of the amount of growth in different sectors over the next three to six months - manufacturing, finance and banking, you some idea.

Based on these rough estimates for the first quarter this year, we probably will get about 6% growth; for the second quarter this year, perhaps about 5% growth. More definite than that, I would be hesitant to predict. Crystal-ball gazing is always hazardous.

My Senior Parliamentary Secretary will deal with the points raised by the Member for Kampong Kembangan.

Now the points raised by the Member for Ang Mo Kio on rice, sugar and petrol. The Member suggested that we should not limit the number of importers of rice in Singapore. We should allow any bona fide trader who wishes to trade in rice to do so. In fact, that is our policy. We liberalized the scheme in April last year. We allow any trader now to import rice to sell in the domestic market. There is only one requirement: whatever the amount he is importing every month he should store double that in a Government warehouse, to contribute to the national rice stockpile. And should there be any unanticipated shortage or any crisis, we are prepared. It is one small aspect of Total Defence.

Previously there had been restrictions. Only a fixed number of approved traders who were allowed to do business. Since we changed the scheme, the number of traders has doubled from 15 to 30. And because there is keener competition, retail prices have declined. On average in the last year, prices of the popular grades of rice have fallen by 10%. So I think we have already done what the Member would like us to do.

On sugar, this is not the first time that the question has been asked. It was last raised in October 1985 by the Member for Radin Mas. I then replied that we would liberalize progressively. We had already taken several steps. We had removed the excise duty on refined sugar. We would remove the excise duty on raw sugar and sugar syrups. The last to be removed is the import duty on sugar which we would do by 1987 when the long-term contracts of the Sugar Industries of Singapore expire. We had to be fair to the Sugar Industries of Singapore because they were our assured source of supply. They entered into long-term contracts in order to give us a stability of sugar supply and sugar price. We should not cut them off half way.

The long-term contracts will expire by the end of this year. I do not foresee any difficulty in removing the import duty by then.

On petrol, the Member is correct. It is really a matter for the petrol companies to set the pump prices. Why should the Government take on the odium of revising prices upwards? For that matter, it is not right for the Government to take the credit when it revises the prices downwards either. I have asked my Ministry to look into this matter to see how we can liberalize control of petrol prices and let the oil companies announce petrol price movements, if not to set the prices based on the free market. We are studying some proposals. One way is to allow each oil company to set the petrol pump price based on its posted price, the price at which it sells petrol internationally to bulk buyers. That is a fair basis for the domestic price of petrol. We are still considering it, and will reach a decision within one or two months. It is a straightforward matter. And it is right for the Government to move out of such routine business where there is no need to interfere in the market.

Sir, my Senior Parliamentary Secretary will now answer the rest of the questions.

The Senior Parliamentary Secretary to the Minister for Trade and Industry (Mr Eugene Yap Giau Cheng): Mr Chairman, Sir, I will take the points raised by the Member for Leng Kee and the Member for Kampong Kembangan. Both Members raised their concern on foreign departmental stores in Singapore. They want to know if the huge presence of foreign departmental stores in Singapore would squeeze out the local departmental stores. They also want to know whether we are attracting too many Singaporeans into our departmental stores, hence starving our manufacturing industries of workers. And whether we would find some ways to help our locals in this particular area of trade and also to find ways and means to make Singapore a shopping paradise.

First, Sir, I am pleased to let both Members know that there is no fear of too many or a heavy preponderance of foreign departmental stores in Singapore. According to the 1985 survey on wholesale and retail trades, local capital accounts for more than 70% of departmental stores in Singapore. Whether we would do something about the presence of foreign departmental stores in Singapore, to explain this I think I will have to apologize for what I am about to do - they say in Mandarin, Ban Men Nong Fu. I do not pretend that I am an expert. But all I would say is that Singapore practises an open door policy in retail trade and most of our trade practices. It is good because it encourages healthy competition. It forces people to upgrade if they want to survive. It encourages automation. It encourages better packaging. It encourages better presentation, more convenient, one-stop shopping and so on and so forth. Those who want to survive, of course, will have to upgrade their productivity and their way of doing things, their management and so on. And I am very very sure that the Member for Leng Kee is aware of this. But I am not only talking to him, I presume, with the presence of television. We are also explaining to those who are concerned. Therefore, if I appear to be too basic, harping on the same tune all the time, I think the Member for Leng Kee will have to forgive me.

The presence of foreign departmental stores in Singapore has also a salubrious effect, in the sense that they have very modern ways of doing things. And when our locals patronize these stores and so on, they will learn something new. They will go back and they will implement it in whatever trade they practise. I think the idea of mini-supermarkets also has this as its origin.

The presence of foreign supermarkets and departmental stores in Singapore, whilst providing the competition, also provides competition in prices. The end result, of course, is that the prices become competitive and Singaporeans as well as tourists can enjoy cheap or reasonable prices.

How do we help our locals? We will do all we can to help our locals. It is not that we do not care. I think the important thing that Singaporeans ought to realize is that they must not have the attitude that the Government has to hold their hands from cradle to grave. The sooner they get rid of this mentality, of course, the better it is.

We are all PAP MPs.

Mr Chiam See Tong: Except one.

Mr Eugene Yap Giau Cheng: Except one. I did not want to say so but if you persuade me, I will say so.

I think we all care for the people who voted for us. And we have great concern for them, how they survive, how their children get their education and survive in future. But I think all that we can do as a Government is to provide the infrastructure for Singaporeans to take advantage of and to compete, not just among ourselves, but more so with the world. I think that is the key point. It is like a family. Parents can provide all the infrastructure, all the guidance, to bring up their children. But at the end of it all, whether the child passes his examinations depends on the child and not on the parents. Whether the child does well depends on the child. Whether businessmen do well in their business depends on them and not just on the Government.

I hope I have answered all the points.

Dr Ow Chin Hock: Mr Chairman, Sir, a few questions for the Senior Parliamentary Secretary and for the Minister. First, on departmental stores. I believe the Senior Parliamentary Secretary is really ban men nong fu ( ). We talk about not having a paternalistic type of government, and he is using the analogy of parents, children and so on. A few questions here: (1) Why can we not promote four or five big local retailers just as we have promoted four or five local banks? (2) Are we encouraging the foreign retailers, departmental stores or supermarkets to buy from local sources so as to help our manufacturing exports? (3) He mentioned that about 70% of our departmental stores and supermarkets are locally owned. Am I right? It is 70%. How big are these local firms compared to the giants?

Dr Augustine Tan: What share of the market?

Dr Ow Chin Hock: And what share of the market? (4) Has the Senior Parliamentary Secretary consulted our local retailers for their views on this? And if our retailers need to learn about modern retailing methods or other management skills, they can always do so by travelling overseas, or probably go on trade missions led by the Senior Parliamentary Secretary or the Minister and not by competition at their doorstep.

Let me now come to counterfeiting. I think, Mr Chairman, Sir, it is very close to your heart. I have to press on this point. I did not inform the Minister that this is the second oldest profession in the world. I simply quoted from Tian Xia. The caption of the article is shi Shang di er gu lao di hang ye ( ) in the issue which I quoted. I am very serious about this. We are gaining an increasingly notorious reputation of being a distribution centre for counterfeits and fake goods. Last Monday I attended a seminar on China's modernization. I have a story to tell also. I met an American scholar from the American Enterprise Institute. Some say that it is a Republican Party's outfit. He asked, "How come a decent country like Singapore also have so many fake goods, like fake watches, in Orchard Road area?" Other NICs, like Hong Kong and Taiwan, I was told, have enhanced penalties and have taken severe action against counterfeiters so as to clean up their image, as they realize the damage being done to their reputation and the USA has threatened to take certain measures against them. I understand that it is very difficult to prevent buyers from buying counterfeit or fake goods but there could be a penalty on the dealers and suppliers.

Encik Yatiman Yusof: Mr Chairman, probably the Senior Parliamentary Secretary decided to move to set a barrier between us. He is my neighbour. But, Mr Chairman, I would like to comment on the point made in his reply when he said that it is important for us to bring in the foreign giant in retailers to encourage healthy competition, to upgrade our skills so that we can survive, to increase automation through better packaging, and to provide one-stop shopping. And he attributed the success of our mini-market projects as a result of the contribution from these foreign big companies.

I would like to ask the Senior Parliamentary Secretary these questions: Is it safe to assume that since locals are holding 70% of the retail outlet in Singapore, we do not have to do anything to keep the status quo? Second, is the Senior Parliamentary Secretary not aware that most of the foreign contractors, I repeat, most of the foreign contractors, are not paying taxes in Singapore? Third, and more important, is to bring in the point raised by the Minister himself. The Minister has identified three major engines of growth, namely, the multi-national, the public sector and the private sector. I think, taking out the multi-national, the relevant point on private sector would be local entrepreneurs. Is the Senior Parliamentary Secretary not aware that before Yaohan, Sogo and even Marks & Spencer were able to export their skills in marketing and in retail, they were provided with a domestic market and which is being jealously protected by their own Government? Can't we do the same, to provide similar opportunity for our own local entrepreneurs to learn the skills, upgrade themselves and hence develop its capability to compete outside?

Another point raised earlier was that if we do not give encouragement - and I look at the reply as not giving sufficient encouragement in merely saying that we will try to do what we can, not that we are not doing anything, but Singaporeans must not have the attitude of having their hand being held from cradle to grave - we are not providing the help that the local retailers are asking for. If we apply the law of the jungle by allowing the well-developed, well-machined foreign big retailers to penetrate Singapore, then the survival of the fittest would mean the death of our local enterprise. If that happens, five years from now, we would be sitting here trying to find a formula on how we could encourage local entrepreneurs to survive.

Mr Chiam See Tong: Can I be allowed to bring up two points for the comment of the Minister? The first is in regard to the new harbour that is to be built at Batam Island. I did not know that Batam Island is so near to Singapore until I visited it. In fact, it is less than a 20 minute-ride by fast boat from Singapore, and from Batam Island you can see the skyline of Singapore. It was reported in the papers that the Indonesian Government has invited tenders for a new port to be built on that island. I am just wondering what effect it will have on the business of Singapore in the long term, because it is so near to Singapore. Much of the shipping business could be diverted over to the other side. If that is going to be the effect, what is the Government going to do about this?

The other matter is the basic change of policy in Malaysia, which has just been announced, that is, the Government across the Causeway is no longer giving or granting automatic business to bumiputras. That will mean that the bumiputras will have to compete on the same basis as the non-bumiputras. I am just wondering whether there will be business opportunities opened up for Singapore entrepreneurs, with this change of very basic policy across the Causeway. I do not know whether some kind of a joint venture or more joint ventures would develop in this new set of circumstances. Perhaps the Minister could comment.

BG Lee Hsien Loong: Sir, I will deal with all the points briefly otherwise the discussion will drag on.

Department stores. Can we promote big local retailers, and buy from local sources? What share do the locals have of the market? Have we consulted the locals what they feel? Can we protect our domestic market base? I think, in principle, department stores are not fundamentally different from the manufacturing business, banks or any other sector of the economy. We have our local companies. We also have foreign companies. Business is created by the success of the companies. It is not a fixed sized pie which everybody has to share from. If foreign bankers had not come here to do off-shore banking services, and set up ACUs, it would have been difficult for our domestic banks to expand, to have caused the same huge growth of the financial sector which we have witnessed in the last five years. If the multi-nationals had not moved in, and there had not been the Seagates and Hewlett Packards and Texas Instruments and General Motors and Matsushita Electronics, it is unlikely that Singaporean companies would be making computers, disk drives, hi-fi audio equipment, specialty chemicals, what- have-you.

It is the same with department stores and retail trade. Sogo or Yaohan, by setting up here, attract that many more tourists to come to Singapore, who will not only shop at Sogo and Yaohan, but also live in Singapore hotels, eat in Singapore restaurants, and enjoy the services of other Singapore establishments. That is good for us. Indeed it is good for the retail business, and even for the Singaporean shops here.

If we want to attract tourists, we need quality shopping. Of course, we would also like to encourage our locals to move into the same areas, establish the same links, set up joint ventures, and in time also develop into quality department stores. I think it is already happening. I do not have statistics but many of the department stores are joint ventures between foreign and local interests. And that perhaps is the way forward. Let us compete. Let us take them on. Having the competition at your doorstep is quite a different thing from going to have a look at potential competitors on a study mission in a foreign country. They are two different things. It is a real competition which will make us progress. Survival of the fittest will not mean the death of local enterprises because by having this competition our local enterprises will become more capable and more competitive.

The Member for Potong Pasir asked me two questions. One, am I not aware that Batam is so near to Singapore? Yes, indeed I am aware that Batam is very near to Singapore. We can see the Singapore skyline from Batam, just as he could see the Batam shore line from Singapore. They are developing a new harbour and port there. What effect it will have on Singapore in the long term? What will Government do? Our basic philosophy, whether in economic matters or in any other field of international affairs and competition, is that we cannot hope to win for lack of competition. There will always be competitors. If it is not Batam, it will be Pasir Gudang. If it is not Pasir Gudang, it will be some other port, Kaoshiung, Port Klang, Sri Lanka, whichever. The number of competitors is so large that to hope that no threat will appear is unreasonable. The way to prosper against competitions is to be more capable, more efficient to have a greater critical mass. Then people will say, "Yes, Singapore is a better place to go to than whatever the competitor for the time being may be". If the competitor does well, we will help him to do well because, as in department stores, the amount of business is not finite. The more parties prosper in Southeast Asia, the more vibrant, stable, conducive a region it will be for Singapore. So I would urge the Member not to be overly concerned at competitors. We have to work hard but I think we can help our neighbours in the region do well and that will do well for us.

The second question concerns how a new Malaysian Government policy will affect Singapore entrepreneurs. I hate to suggest it, but I would have thought this is a question more suitable for the Parliament House in Kuala Lumpur. And I am sure our Singapore entrepreneurs will make the best of whatever business opportunities arise in neighbouring countries, and indeed anywhere in the world.

Mr Chiam See Tong: Mr Chairman, I think it was about 15 years ago that the Indonesians decided to develop Batam and, if my memory serves me well, I believe that Singapore entrepreneurs were encouraged to put money in Batam. Now, with this new project coming up, building a new port, would it not be to the benefit of Singapore if the Singapore entrepreneurs were to be encouraged to put money there and when the port grows they could grow with the business there. And that is one way of perhaps safeguarding our situation here. Would the Minister comment on that?

Dr Ow Chin Hock: Could I just add one or two points? Retail business is not equal to banking business. In banking business we have licence restrictions. In fact, I asked the question earlier in my speech. Is the pie really growing? Is the retail trade market growing enough to support both the increasing number of tourists and local consumers?

On counterfeiting, I do not think the Minister has answered me. Could I have a firm commitment from him or consult his colleague, the Minister for Law, whether we can pass a law on counterfeiting?

Mr Goh Chee Wee: Mr Chairman, I want to raise a question on these leading indicators again. The Minister has made some prediction of our economy based on the models developed by the Ministry of Trade and Industry. Of course,the Minister was quick to qualify that economic prediction is hazardous. There is uncertainty. It is hazardous. Can I suggest that the Ministry encourages some private institutions, universities, or even some research units in enterprises to offer an alternative model so that there is competition of ideas. We can compare and over a period of time we can improve and refine the model?

BG Lee Hsien Loong: Sir, the Member for Potong Pasir says he remembers that 15 years ago when the Indonesians decided to develop Batam, Singapore entrepreneurs were encouraged to invest in Batam, and asks if we should do that again. He did not say who did the encouraging 15 years ago. It is the Singapore Government's policy to encourage all entrepreneurs to seek opportunities, evaluate them, make their own judgments and move in where they feel that there is business to be done and profits to be made. It is not the Government's policy to back specific projects, particularly when they are not projects of the Singapore Government, because that leads to possible misunderstanding later on. If the project does well, well and good. If the project does not do well, what responsibility does the Government bear for pushing the private sector to do something which perhaps was against its better judgment? We can leave this to the private sector. It is a development on Batam. It is not appropriate for me to advise the Batam authorities how to proceed.

I do not really want to discuss retail and banking again but I will give the Member for Leng Kee an answer on counterfeiting. We are aware that there are unscrupulous traders who sell counterfeit goods in Singapore and my Ministry is working closely with the Ministry of Law to tighten the Patents Act and the Trade Marks Act to prohibit such trade practices.

Dr Ow Chin Hock: Is it the goal?

BG Lee Hsien Loong: Yes. That is our policy, but it will take some time.

The Member for Boon Lay asked about leading indicators and whether we should not encourage private institutions also to make their own studies and therefore give us a better range of predictions. Yes, I think we should do that. Not only private institutions, but also the University. In fact, - I think the Members for Whampoa and Leng Kee will be aware of this - my Ministry has been in contact with the Economic Department of the University, to seek ways to tap their expertise, their judgment, their analytical powers, to develop models, to make studies of different aspects of the Singapore economy and produce more reliable forecasts and a better comprehension of how the system works. There are many advantages of doing this, not just to MTI, not just to the academics themselves, but to the economy as a whole.

From MTI's point of view, we get the benefit of a wider range of professional advice. From the point of view of the University, they get access, they understand our thinking better.

I think it will help the University to do more relevant, more insightful work on the Singapore economy and incidentally provide them more opportunities to publish useful articles in learned journals. From the point of view of the nation, this is the way to tap our talent to the fullest. If any other private organizations are interested in this sort of work, we will render them whatever cooperation is feasible.

Dr Augustine Tan: I thank the Hon. Minister for his confidence in NUS economists. Perhaps if his predecessor or predecessors had the same confidence, we might have avoided the recession.

With that, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

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

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

Sir, it was last year, also during the debate in the Committee of Supply, that the hon. Member for Mountbatten and currently the Senior Parliamentary Secretary of the Ministry of Trade and Industry who ably persuaded me to take over from him the chairmanship of the Singapore Quality Reliability Association (SQRA). Hence, I see it now as my duty to promote and champion the cause of quality promotion in Singapore. Sir, I hope that the objective of quality promotion will have good support in this House as, besides the Member for Mountbatten, we also have the hon. Member for Brickworks and Minister for the Environment who has formerly held the position of Chairman SQRA as well.

Today, we are seeing Government's businesses and professional organizations, in growing numbers, recognizing the importance of quality. Even the world's foremost industrial nation, the USA, has given due recognition to the importance of quality. They found that quality is the most crucial factor in the struggle against the fierce onslaught of foreign competition. In 1984, through a joint resolution of the US Congress and a proclamation by President Reagan, the US started a five-year campaign in quality promotion. They designated October as their National Quality Month. Since then, many countries in North and South Americas and Western Europe have also designated October as their National Quality Month. The movement is so strong that October is now recognized by many countries and their quality associations as the International Quality Month.

I would like to suggest that Singapore should also adopt October as our National Quality Month. I would also like to make the following suggestions for the Government to consider in promoting quality awareness in Singapore.

1. To launch a yearly quality promotion campaign. This campaign should preferably be in October so that it can coincide with the international quality improvement activities organized by other countries.

2. To give annual National Quality Promotion Awards to companies, organizations, QC practitioners and researchers in recognition of those who have made significant contribution to advance quality improvements in Singapore.

3. To designate one or several Government agencies to be responsible for quality promotion in Singapore. Two suitable Governmental agencies could be SISIR or NPB. Perhaps, if need be, I would venture to suggest that a completely new Government agency called the National Quality Institute be created to focus on this task of quality promotion.

4. Government and business leaders to give full support to the quality promotion drive as quality promotion should have top-level support.

5. The Government to provide ample funding for this effort.

As the Chairman of the SQRA, I would like to make the point that I lament that the Government has to-date not given ample support to quality promotion. So far, though the Government has been promoting quality awareness, often this has been subsumed under the productivity campaign. I do not deny that the promotion of productivity is important, but I do feel that we should also devote equal effort and attention to quality promotion. I would say that quality promotion is as important as productivity promotion. However, some people would venture to say that quality is more crucial than productivity. Douglas Danforth, the CEO of Westinghouse Electric Corporation, said that:

'Productivity is the by-product of improved quality. Commit to quality first. Then productivity and profitability will follow.'

Sir, between quality and productivity, I see that productivity is a more nebulous concept. It is difficult, year in and year out, to keep asking our workers to work smarter and improve their productivity. There is only so much more output that we can squeeze out from them. In any case, an increase in output may not necessarily be an increase in productivity for if the products are of poorer quality they are of no use. On the other hand, quality is a more tangible and measurable item. We can organize training courses to teach quality improvement concepts and practices and this can be aimed at all levels, from the top management down to the workers.

As far as I am aware, many countries have adopted a quality month, and mostly in October, but no country, except Singapore, has a productivity month. And yet we do not have a quality month! I would like to strongly urge the Minister to put more money and effort on quality promotion. To promote productivity, the NPB has a total operational budget of over $13 million for the financial year 1987 plus a brand new building costing about $68 million. In comparison, I do not see any specific provision being made in the Government's financial plan to promote quality. Perhaps the Government should put some money into future budgets to focus on quality promotion.

Sir, we are well aware that Japan has made tremendous strides in becoming a quality producer of a wide range of consumer and industrial products. South Korea, one of the four dragons and also a major competitor country to Singapore, is fast developing as a solid producer of high quality products. To be competitive against these other NIC countries, I would appeal to the Government to start a major quality promotion drive.

I do hope that the Ministry will give serious consideration to my suggestions.

The Senior Parliamentary Secretary to the Minister for Trade and Industry (Mr Eugene Yap Giau Cheng): Sir, I have taken note of the concern of the Member for Thomson. Some of the issues that we will have to spend some time thinking about, we will think about them. But I will reply to him in general first.

The Member for Thomson is concerned about which is more important, quality or productivity, and he laments that of the huge budget of the NPB nothing is seen to be spent on promotion of quality. I am pleased to inform him that he is wrong. First and foremost, the Member for Thomson has to realize that quality and productivity are actually both a pair of Siamese twins. It is very, very difficult to separate one from the other. In fact, properly nurtured, both working well together, it will produce a synergistic effect. So it is very difficult to say which is more important and to say the NPB has not given due importance to quality is really not very accurate. In fact, in the next productivity month, which will be in November, the focus will be on quality. Therefore, the Member for Thomson can rest assured that we will do all we can to promote productivity and quality together as inextricably intertwined entities.

In future, all our programmes will be focused thus. We will incorporate into our programmes the need to make Singaporeans quality conscious and this will be part of a total approach to productivity. To achieve this objective, the NPB and the Singapore Institute of Standards and Industrial Research together will have all kinds of activities to help us pave the way to this objective. We will have a mass training programme of workers. Of course, the funds will have to be found. The idea is to inculcate quality consciousness in our workers and to make sure they understand what quality and productivity is all about.

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 the Committee of Supply resumed.

[Mr Deputy Speaker in the Chair]

Head V (cont.) -

Mr Eugene Yap Giau Cheng: Mr Chairman, Sir, before lunch I was elaborating on the various activities that the two agencies will have in order to incorporate quality consciousness as part of the total approach to productivity. The other area of assistance that the two agencies can give to local businesses and companies is to help them upgrade their management practices and, of course, where there are problems of quality to be resolved, SISIR will take steps to see if they can provide the assistance, help them to upgrade their quality. And, of course, I did mention earlier on that November will be the Productivity Month and this year quality will be the focus of the Productivity Month. So for us to achieve this objective of being productive, to achieve productivity and to produce goods and services of acceptable levels which international consumers will accept, it is important that all of us play a part in the promotion of quality consciousness among our employers and our workers. And I know that the Member for Thomson will spare no effort to assist us and he will get his association to dovetail all its activities with the broader activities which NPB and SISIR will have for the year.

Mr Leong Horn Kee: Mr Chairman, Sir, I would like to make a point of clarification. I did not say that the Government did not promote quality. What I did say is that the Government has subsumed the quality promotion under the productivity campaign. What I do like to see is that the Government should, in fact, have a separate campaign or drive to promote quality and that the Government should provide a separate budget to put more focus and more emphasis on quality promotion.

Mr Chairman, I do not agree with the Senior Parliamentary Secretary that quality and productivity are Siamese twins. Siamese twins mean they are identical. Quality and productivity are not identical. There is a difference between these two issues. Productivity is more like a movement; a campaign to motivate the people. Whereas, quality is more tangible. You can train someone, a worker or manager, to practise and to adopt quality measures. So in that sense, I do hope that the Government would give more support in terms of training programmes and training grants for organizations like SQRA that conduct quality promotional activities and training courses. I also made a few suggestions with regard to having National Quality Awards every year for organizations and persons who have contributed significantly to quality promotion. I hope the Ministry will take some of my suggestions seriously. Perhaps I could henceforth invite the Minister, the Senior Parliamentary Secretary, or his other senior Government officials, to attend our dinners and functions that we hold to promote quality. During those occasions, they would make speeches and call for the nation and the business community to support quality promotion.

On that note, Sir, with the assurance that I will give to the Minister to invite him as well as his Parliamentary colleague to dinners and functions, I would like to beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The following amendment stood in the name of Dr Augustine H.H. Tan:-

(3) That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VA-01-3310 of the Main Estimates.

The Chairman: Amendment No. (3), Dr Augustine Tan.

Dr Augustine Tan: I am not moving.

The Chairman: Amendment No. (4), Mr Chiam.

Mr Chiam See Tong: Mr Chairman, I move,

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

Mr Chairman, we have heard the Minister saying that in America there are now many trade bills before Congress to impose further protectionist measures. We know that all these traditional markets are getting more and more difficult to penetrate and it is right that entrepreneurs in Singapore should be more innovative in their ideas to export their goods.

In the past, England was so rich because it had a captive market, it had colonies all over the world and they could export goods to all these countries and they became rich. After World War II, the rich countries like America, of course, gave grants to poorer countries. But in the end, the money comes back to them because they export capital goods and other goods. But in these days, how do we capture markets? What sort of ideas must we have? Perhaps we could look at how Japan does it.

Just now there was a lengthy discussion on retail trade in Singapore. There was much talk about the big departmental stores in Singapore. I would say that is one of the ways how Japan captures markets in the world. It goes all over the world, establishes some kind of an organization in which they can sell their own goods to these organizations. Like in Singapore, they have set up, or at least together with the local people, their departmental stores and these become markets for Japanese garments, cosmetics and other retail goods. And again, we see how they sell their musical instruments abroad. They capture the market by opening music schools. Like in Singapore, we see so many of them. They are good schools, teaching music, but they are selling their musical instruments like pianos, violins and other musical instruments, to these schools which are spread all over the world. I have been to Australia. I have seen similar types of schools opened by the Japanese in Australian towns. And, of course, in the heavier industries, perhaps in Singapore we see this Petrochem where they spend a lot of money; but there again they use their equipment. I believe they do use their equipment. Again, they are helping to export their own goods. If they go abroad, they capture contracts for constructions or whatever building projects there are. Again, they export their heavy machinery to these contractors who are working abroad. So in this way, they do capture markets all over the world by going abroad helping to build or to have projects, then they export their goods to those Japanese companies abroad.

Singapore traditionally is an entrepot. We are the hub of South-east Asia. We import manufactured goods and we export raw materials. That was the traditional role of Singapore - a distribution centre of imported goods to the neighbouring region and we collect from the neighbouring region raw materials and the like and re-export them. So perhaps for Singapore, of course the best is to convert all these raw materials like timber into furniture, or starches, sago into finished products like sweets and glucose and to re-export them to be higher added value products. Rubber is a traditional export raw material. Perhaps we could go one step further and establish furniture factories in other developing countries. I hear Brazil is one country, although it has debt problem. But I read in trade magazines that it is now developing at a very fast rate. It is a huge country, a continent by itself, and it is opening up. And perhaps Singaporeans could be adventurous, look afar. We could open up furniture factories there, export timber there to make furniture. Or in case of starches, we could open up factories there perhaps to convert the starch to other finished products. That is one way we can expand our trade. We have to go out and capture the marketsand export our goods to those organizations that are established abroad. This is one way we could learn from the Japanese.

Coming back home, our economy has been said to be lop-sided. We see that the construction industry provides a big chunk of our GNP. Perhaps we could learn from this downturn not to let this happen again. When one sector, for example, the construction industry is booming, I think the public sector should hold back and not to exaggerate the situation. But of course in the construction industry it is closely tied with CPF and then we just went on and on and when the construction industry collapsed, it almost pulled down the whole economy with it. Perhaps that is the lesson we could learn not to be too dependent on one sector.

I am glad to hear that the Government is assisting small businesses. Although it is said that something like 80% of the companies registered in Singapore are Singapore-owned, out of this 80% they only produce 20% demand whereas the foreigner is the other way round. But, nevertheless, small businesses in Singapore do need assistance. Some practical steps are not to enforce collection of arrears in rent but to give them an amnesty period of even up to a year in the case of small factories. Perhaps a concession could be given for car parking lots, and also in utilities because they work on very small margins and just because of a very small amount they collapse. So I hope the Minister could look into these areas.

Despite what the Minister for Finance has said in regard to taxation, I still think that there is room for reduction in our corporation and income tax. Because as the Yen rises, it is obvious that the Japanese will be seeking more and more places to do their business, and Singapore, I hope, will not be left out although I know that in recent months Japanese businessmen have come to Singapore to invest here. But if other NICs are more attractive, it is obvious more of the business will be given to the other newly industrializing countries.

Another area which I think is very important for a small country like ours is in the area of research and development. I think the Government should not be parsimonious in this area. Although I know R&D is a long-term thing, sometimes it can go on years and years and nothing seems to come out of it, but if you have got only one discovery it might pay for all the investments that you have put into it. Since we are a very small country with a small population, I think the Economic Committee has recommended automation. This is one area which is very important because we have a very small work force. We will always have to depend on the foreign workers and perhaps automation is one area which could be researched into to alleviate our problem of dependence on foreign workers. Of course, we have to find a type of business which is suited to the local context. We are a small country, small workforce, and therefore I think we should go into things like, of course, information technology is important, software, and I think the Government should institutionalize the process of reverse engineering. We must have some kind of an ongoing thing in this area. This is the shortest cut to progress.

The Chairman: Order. Your time is up.

BG Lee Hsien Loong: Mr Chairman, Sir, I agree with many of the things which the Member for Potong Pasir has said. Let me just make a few supplementary comments.

Firstly, that it is important for us to move beyond our traditional markets, because the scope may be limited, and go into new areas, new products, new countries, find new ways to do business. Like the Japanese, have shops which sell Japanese goods or teach people how to play musical instruments, which turn out to be Japanese musical instruments. Or encourage our construction business to go overseas in consortia so that they can use Singapore capabilities and some Singapore made products. I think the idea is a sound one. Indeed this is what the Government has been encouraging the private sector to do. It is harder for us to do than for the Japanese. Because if we had a complete department store, we might be able to fill it with products mostly made in Singapore, but many of the brand names would be multi-national brand names. It is a fact of life. But the idea is good. One way is to hook on to other people's department store chains, and get them to sell consumer goods made in Singapore. If they can adopt our brands, then we can use their sales network.

Setting up factories in other countries, I think this is also desirable. It is probably not economical to establish a factory in Singapore to make sago and starch into glucose and sweets, because Singapore costs are not appropriate to such a basic labour intensive factory. But where there are such opportunities overseas, I think our manufacturers should go and set up shop there and establish their plant there. And the stream of income or revenue which is generated from these overseas plants will flow back into Singapore, supplement our GDP, increase our GNP. So our gross national product will include not just what we can make within this country, but also what we can earn by being overseas. This is what the Economic Committee called "moving offshore".

I do not know about going to Brazil. There will be practical difficulties exploiting that far away and not altogether untroubled market. But the principle is sound within the region, within Asia.

Construction. Learn not to repeat the lesson of over dependence and not to overheat the economy because of one sector? Yes, I think we have learnt a bitter lesson. I hope the private sector will remember it for a long time. The difficulty with construction is that memories are short. It is like the stock market. In every country in the world, every couple of decades there is a stock market boom and a crash, because people forget that the last time fortunes were ruined, many lives were irrevocably changed by foolish gambling decisions in the stock market. The property market is something like that. When it hots up, there is a certain frenzy, a mood of the moment, which leads buyers of property to believe that they can always realize the capital gain by selling at an even higher price. And this leads the property developers to think that no matter how high their cost, by the time they have finished building they will be able to sell for even more money. We have seen the consequences in Singapore but it happens regularly around the world. In fact, even within Singapore it has happened several times since independence. There is a cycle of about 7-8 years. We hope that this lesson will postpone the next cycle as long as possible but I do not know whether it will never recur.

The public sector should be counter cyclical. It should not get in to heat up the market. In principle, that is true. In practice, it is not so simple. One of the reasons the public sector was building so furiously during the last property boom was because HDB was building a phenomenal number of houses to fulfill the desire of Singaporeans to own their own homes. That is why in 1983-84 the HDB was completing more than 60,000 flats a year. It is such a phenomenal number that it takes quite a while to understand exactly what it means. Only 40,000 babies are born in Singapore every year. If all of them get married and all of them want houses every year, you only need 20,000 new flats, even neglecting old flats which become vacant. We built 60,000 flats in a year, three years' worth of couples, and we were just meeting Singaporeans' demand. So it is easy to say we should be counter cyclical. I do not know what Singapore would be like if those Singaporeans who benefited from HDB's housing policy had had the benefit instead of a counter cyclical construction programme, and there were no houses and long queues, 5-10 years, before you can own your own flat. It is a fact of life. I think we have to be realistic and recognize it.

Small businesses getting help? Yes, we will help small businesses. We should not enforce rental arrears. We should give them lower car park and cheaper utility charges? That is more difficult. Rents are rents, debts are debts, they have to be paid. If the Government decides to be soft hearted and stops collecting debts, whether on utilities, rents or whatever, the Government will soon have the largest accounts receivable and the most uncollectable debts in Singapore. Because businessmen make hard-headed calculations. The debt collector who does not knock on your door regularly and demand to be paid is the one who never gets his money back. I am not the keeper of the public purse. But this Government has to keep the public purse and it has to enforce its dues.

We will help small companies in other ways, not to subsidize them, but to upgrade them. They want training courses, they get cheap training courses. They want mechanization, automation, consultancy, technical advice, quality improvement, as the Member for Thomson suggested just now, all will be forthcoming. If they have the will to upgrade, we will see to it that they succeed in doing so.

Cut corporate and income tax? The Minister for Finance has given his answer. The general point made by the Member for Potong Pasir is valid, ie, that we should always watch our competitiveness vis-a-vis other NICs and make sure that we never get out of line. Corporate and income tax is one of the factors. It is not the only one. It also depends on our wages. It depends on how stable the Government is. It depends whether the investors believe this is a PAP government with the confidence of the population, which will continue to have that confidence and remain in power for the foreseeable future, or whether this is a government which is pushed around, uncertain of what to do, maleable and yielding to temporary moods of the moment. If there is a stable government and if we are competitive, investors will come, as indeed I am happy to say investors have been coming, from Japan, as the Member pointed out, but also from other countries. In particular, this year potential investment commitments from the United States have also picked up most encouragingly.

R & D, information technology, software, request that the Government be generous? Yes, we are generous. The problem is not inadequate money to spend on R & D. We have lots of money to spend, but the problem is there are not enough bright ideas to spend them on. We have the Research and Development Assistance Scheme. The money is available to anybody who has a plausible project. We are prepared to give him a grant to match his R&D expenditures. If it succeeds, it is his good luck and he will reap the benefits of his imagination and his enterprise.

The amounts handed out have not been huge because we have not found enough projects to invest it on. I do not have the figures with me today but if the Member likes, I can provide them. It is not that we are turning away bad requests. There are just not very many requests. That is the reality of Singapore which we should not forget. We are small. It is very hard for us to generate the steam, the critical mass, which a country like Japan or the United States has, which means we have to try that much harder to do equally well.

Mr Chiam See Tong: May I just have a point of clarification? I am glad to hear that the Government has set aside huge sums of money ready for the taking for those people who have got bright ideas. Apparently there are at the moment very few takers. I think we should ask ourselves why this is so. I have heard, of course, not recently but sometime past, that anyone with a bright idea - he went to the EDB for assistance. And the officer there would take down all the details and before he knew anything, it was published in some EDB magazine. All his bright ideas would have gone overnight. I do not know whether this is a problem. To be fair to people with good ideas, I think there is such a thing as copyright. But sometimes they do not go and establish their copyright. They do not register it. They just have got an idea and they want to have a free discussion with an officer of whatever Government authority. I think this should be done in confidence, to be fair to the person with the idea. Until the idea is fully developed and marketed, I think it is not the time to circularize and publish the idea.

BG Lee Hsien Loong: Mr Chairman, Sir, after a general discussion, it is with reluctance that I deal with individual personal problems. But to be fair to EDB, I have not received any complaint that they have made free with other people's proprietary information, or that they have circulated bright ideas not yet copyrighted or patented. If the Member has any such case to his knowledge, I would urge him to let me have it. I promise not to leak the secret anywhere and I will look into the matter.

Mr Chiam See Tong: I was giving a reason as to why there are no takers. I was just assuming that probably this could be one of the reasons. If it is one of the reasons, perhaps the Minister could look into it. I am not very sure but it could be one of the reasons.

BG Lee Hsien Loong: Mr Chairman, I will look into all the reasons. But before a specific suggestion is made that EDB has made free with other people's ideas, I think it is only fair that we have some sense of whether this has ever taken place in real life.

The Chairman: Mr Chiam, are you withdrawing your amendment?

Mr Chiam See Tong: Yes. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The following amendment in the name of Encik Yatiman Yusof stood on the Order Paper Supplement:

Weights and Measures Office

(5) That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VD-01-1210 of the Main Estimates.

The Chairman: Amendment (5), Encik Yatiman is not here. Amendment (6), Dr Wong Kwei Cheong.

Dr Wong Kwei Cheong (Cairnhill): Sir, I beg to move,

That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VE-01-3110 of the Main Estimates*.

Sir, it was mentioned in the Economic Committee's Report that a sum of $100 million has been allocated by the Government to the Small Enterprise Bureau to help promising enterprises upgrade and take off. May I request the Minister to give examples of how companies have benefitted from this assistance and the amount that has been disbursed so far?

In view of the fact that the Skills Development Fund has reduced its assistance to management and supervisory development programmes, will the Minister consider the $100 million fund to be used also for training purposes by our local entrepreneurs.

Higher productivity depends very much on training. Many workers working at small enterprises have benefitted from training assistance provided by the Government. More workers are forming Quality Control Circles (QCCs) to help improve productivity and efficiency through better labour management relationships. The National Productivity Board should be complimented for helping to form some 4,600 QCCs by the end of 1986, with a total membership of some 33,000 workers. This is an increase of 27% compared to 1985. I am however concerned over the drop in the enrolment for courses conducted by the NPB. According to Table 6.2, page 57 of the 1986 Economic Survey, the enrolment for management and supervisory development courses dropped from 12,735 in 1984 to 10,809 in 1986; and the number of participants in seminars and workshops dropped from 23,172 in 1984 to 13,491 in 1986.

Mr Chairman, Sir, is this a result of the lack of Government support for training in Singapore? If this trend is to continue, the quality of our workforce will be seriously affected and productivity increases will be minimal.

What I find more distressing is the fact that the Skills Development Fund has withdrawn financial support for management development programmes conducted by many companies and other professional bodies. Many of our local entrepreneurs will be forced to forgo such management development programmes as they will not be able to afford the full fees charged.

Sir, I hope the Minister realises that productivity depends on trained workers as well as trained managers and supervisors. If the SDF fails to collect sufficient funds, the Minister should consider promoting training through tax incentives for companies as well as for individuals. If a tax incentive of $20,000 for the third child can be introduced, why not a similar generous amount for career development purposes?

I hope the Minister can take this proposal up with the Minister for Finance for next year's budget.

Finally, as our economy recovers, our local industries will once again be faced with the problems associated with labour shortages. Has the Economic Development Board any plans to help our manufacturers to employ more workers, perhaps by allowing them to take in workers from the non-traditional sources.

BG Lee Hsien Loong: Mr Chairman, I will be brief. We set aside a sum of $100 million for assisting small industries. In the first year of the Small Enterprise Bureau's existence, we extended a total of $7(r) million in grants. This is accounted for by $1.8 million in terms of small industries, technical assistance scheme and the local industries upgrading programme, and another $5.7 million in interest subsidies on a very large volume of SIFS loans. The pace has quickened this year. The quantum of $100 million is now subsumed under the Economic Development Assistance Scheme, the umbrella programme for all of the EDB assistance packages, and I am sure much more will be spent.

Courses run by NPB. The numbers declined last year because of two reasons. It was a recession, so many companies cut back on training expenditures which they felt they could postpone. This is regrettable but it was so. Secondly, particularly for courses on labour management cooperation and to some extent also quality control circles, in 1984 and 1985 NPB mounted a blitz. We went out of our way to saturate the market. In 1986, having saturated the market, we cut back on the volume.

As for the adequacy of SDF for funding training, the Member has a point. At the 1% contribution rate, SDF only collects $24 million a year. We are now spending about $80 million a year on SDF subsidies. At this rate, although we have presently some reserves, SDF will soon run out of money.

The Chairman: Order. It is 3.05 pm. Guillotine time. The time allotted for Head V having expired, the following amendments were not proceeded with: Mr Bernard Chen: Economic Development Assistance Scheme (7) That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VE-01-8201 of the Development Estimates. Mr Goh Chee Wee: Financing of the Joint Industrial Training Centres (8) That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VF-01 of the Main Estimates. Dr Ow Chin Hock: Financing of the Trade Development Board (9) That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VI-01 of the Main Estimates. Financing of the National Productivity Board (10) That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VJ-01 of the Main Estimates. Dr Koh Lam Son: Financing of the Sentosa Development Corporation (11) That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VK-01 of the Development Estimates. Encik Yatiman Yusof: Financing of the Jurong Town Corporation (12) That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VL-01 of the Development Estimates. The sum of $101,631,500 for Head V ordered to stand part of the Main Estimates. The sum of $892,395,400 for Head V ordered to stand part of the Development Estimates.

Head P -

Dr Aline K. Wong (Changkat): Sir, I beg to move,

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

On behalf of the members of my GPC, I would like to touch on several major policy issues while the other members may take up more specific problematic areas later.

Sir, as our population grows and ages, the demand for health care services will inevitably rise. With more education and higher income, people's expectations of better quality services also go up. But on the other hand, medical care is highly personalized, is labour intensive and modern medicine uses expensive technology. Therefore, the cost of medical services will also go up in future. So the two major challenges facing the Health Ministry are:

(1) How to provide a comprehensive, modern and efficient health care system at prices affordable to the population.

(2) How to plan and coordinate the development of the public and private health sectors so that Singapore can become a Centre of Medical Excellence.

Sir, we feel that it is important that the public should have a clear, correct understanding of what the goal of developing Singapore into a Centre of Medical Excellence means. A lot of misunderstanding as well as apprehension has been generated in the past because the word "privatization" has been used to describe the process of restructuring Government hospitals. The restructuring of Government hospitals primarily is to give hospital administrators more autonomy to develop a more efficient, more flexible and responsive system of delivery of services. Unfortunately, people's attention tends to focus on costs rather than the quality of service. Thus, as the Government is implementing its policy of gradually reducing the extent or the rate of subsidies for medical care, the restructuring of hospitals has been taken to mean the same thing as raising charges. In a way this is similar to the problem of people's perception of the issue of independent schools. But here the problem of the public's perception is compounded by the timing of the policy of developing Singapore into a Centre of Medical Excellence.

The recommendations of the Economic Committee on the growth potentials of the health industry, on its role in generating GNP, unfortunately led the people to jump to the conclusion that from now on medical services would not only be costly but also that a large part of them would be catered to foreigners who can afford to come and stay in hospitals dressed up like hotels. Sir, such misunderstandings must be corrected and apprehensions put to rest. Otherwise our people will feel neglected.

It is not only that the right message must be put across but that we ourselves must have the right objectives to begin with. We believe that our goals should be to provide excellent medical services to our citizens first and foremost. After we have developed the capability to render excellent services, then other people, for example, our neighbours, will recognize our capability and then they may wish to avail themselves of our resources and expertise. And they would be most welcomed. But let us be clear that this should be only a secondary outcome of our primary objectives.

Sir, the National Health Plan drawn up in 1983 places a great deal of emphasis on primary health care, preventive medicine and health education. This is in the right direction to reduce the future cost of health care to the nation because if the population stays healthy and fit, its need for medical care will be correspondingly reduced. But to what extent is the Ministry following this policy emphasis? It seems to us that the Ministry is still giving a lot more priority to hospital services and we think that its current efforts at improving the physical infrastructure must not be such as to neglect its manpower requirements within the primary health care services.

At the moment there is a shortage of doctors in the public sector, whereas in the private sector a point of saturation has been reached and this situation would be made worse very soon. Because the past few years of expansion in enrolment of medical students will soon bear fruit and we will see many more doctors coming out to practise. Will this situation lead to the under-employment of private practitioners? And if so, would this not mean a waste of national resources? So may we ask the Acting Minister what plans does he have to better coordinate and utilize the manpower available in the private sector? How can the resources of the private sector be better tapped to cater to the health needs of the entire population? As for the future, the Government has set a goal of achieving a doctor to population ratio of 1 to 700 by the year 2000. May we ask how is this target derived? Is this goal realistic in terms of catering to a population growth as well as achieving our aim of medical excellence? Specifically, what would the balance be like between doctors who are general practitioners and doctors who are specialists?

In connection with the question of manpower in the Government service, we not only need to look at the ways of improving the terms of service, the workload and career prospects for the medical officers, but we should also look at ways of providing them with further training. The need for continuous medical education is also imperative for private practitioners. For unless private practitioners and medical officers keep up with the latest knowledge and technology, they would remain stagnant and this would be detrimental not only to their career advancement but also to their job satisfaction, self-esteem and ultimately the quality of their service. So can the Acting Minister inform the House as to what steps are being taken to expand the programme of continuous medical education presently available only on a limited scale?

Bearing in mind that the National University Hospital is our premier hospital, much public attention has been focused on this symbol of medical excellence. While its operation as a private hospital seems to have been accepted by the public, there is some concern among the medical profession as to how NUH is able to balance its role of providing excellent service against its other role of being a teaching and research hospital. So could the Minister clarify on what mechanisms there are which ensure that the NUH does not become over-zealous in achieving financial viability to the possible neglect of its teaching and research functions?

Sir, some members of my Committee may want to touch on other issues such as the possibility of Medisave for use in private hospitals leading to over-investigation and over-charging by doctors and therefore raising medical costs as well as creating demand. But let me end on a final note on the problem of the health needs of an ageing population.

Mr Chairman, the year 2000 is only 13 years away. Very soon we shall come face to face with the health care needs of a large proportion of aged people. No doubt the Home Nursing Foundation has already been set up and a programme of senior citizens' health care centres is being implemented. These schemes, however, depend to a large extent on community participation, including finance and manpower. But my question is: is community support going to be adequate to meet the increasing health care needs of the aged? What further support will the Ministry provide, especially for those aged sick who require hospitalization?

It seems that the Government must begin to think along the line of planning for specialized hospital care for the aged sick as well as in terms of training specialists in geriatric care. All these take long-term plans and the planning, we believe, must start now. We would appreciate replies from the Acting Minister on the above seven questions. We have given him a lot of questions to answer but he can be assured that Members of my Committee are extremely interested in the work of his Ministry.

The Chairman: Mr Chandra Das is not here. Dr Arthur Beng.

Dr Arthur Beng Kian Lam (Fengshan): Sir, may I first declare pecuniary interest in that I am a medical practitioner.

Sir, the Ministry of Health must be commended for its efforts at upgrading the peripheral hospitals like Kandang Kerbau Hospital, Toa Payoh Hospital, Alexandra Hospital and Tan Tock Seng Hospital. There was a time when there was a fear that all the resources of the Ministry of Health were only being concentrated at the Singapore General Hospital and the National University Hospital. I must also commend the directors of these hospitals for their efforts at improving the relationship between private practitioners and the hospitals. Doctors from the private sector now meet at regular intervals with doctors from these hospitals.

Sir, there is still, however, a feeling that there are several grades of hospitals. At the top of the pyramid will be the National University Hospital followed by the Singapore General Hospital, then the others, the poorer cousins. My question to the Minister, Sir, is whether all hospitals have the same role or does he see different roles for the different hospitals. Will we be having certain hospitals which are considered superior, first-class hospitals and others that are second- or third-class?

Sir, two years ago in this House, other Members and I have brought up the question of privatization of Government hospitals. I know the Minister is averse to the use of the term "privatization" when it is used in reference to Government hospitals. He prefers to use the term "autonomous". In 1985 the Minister said and I quote from Hansard [Vol. 45, col. 1489]:

'The main objectives for incorporating NUH as a private organization are:

(1) To institute a new organizational and management system which will be fully autonomous and outside of the Civil service, yet within the guidelines set by the Ministry of Health.

(2) To allow the management to improvize and bring about innovative management systems which we believe can lead to greater economies and efficiency in the running of hospitals.

(3) To enable the Hospital to establish and maintain the highest levels of excellence in medical education and research and in the delivery of patient care. Through better staff remuneration systems, we hope that the Hospital will be able to attract and retain the best medical staff.'

Perhaps the Minister would like to state to what extent the NUH has achieved its objectives after these last few years.

Sir, I would like to bring to the attention of this House that though NUH is a private company, NUH is (1) receiving $20 million a year from the Ministry of Finance; (2) it is being staffed by doctors from the National University of Singapore; (3) it is the only private hospital which has house officers assigned to it; and (4) although it is a private hospital, practitioners from the private sector are still not allowed to admit and care for their patients in the hospital. Will the Minister consider allowing private practitioners the choice of admitting their patients to NUH?

Sir, I would now like to turn to the subject of manpower planning for the para-medical or supporting services, for example, the physiotherapists, occupational therapists, technicians and nurses. In many of these areas there is a shortage of trained personnel. The shortage is especially acute with nurses. The public sector now employs 5,500 nurses. There is an estimated shortfall of 800. In the private sector 2,500 nurses are employed and there is an estimated shortfall of 400. In this respect, I would like to ask the Minister whether he will consider relaxing immigration policy to allow foreign trained nurses of recognized institutions to be employed to alleviate the present acute shortage. What steps will the Ministry take to ensure that the long-term manpower needs of the para-medical specialties are met?

Finally, Sir, I would like to seek clarification from the Minister regarding the policy of registration of foreign medical specialists in Singapore. My understanding of this policy is that the original aim of opening our register to foreign medical specialists is to import expertise to upgrade the standard of practice in various specialties here. I would like to ask the Minister how successful this policy has been. Are these foreign specialists actually imparting their knowledge and skill to Singaporeans at the under-graduate or post-graduate level? Are these people actually participating in the training programme in the NUS? Or are they merely making a living in Singapore without contributing? Before a foreign medical specialist is registered, will the Academy of Medicine be consulted to ensure that his expertise will be an asset to Singapore? Perhaps the Minister would like to review this policy.

Dr Augustine Tan: Sir, recently the Acting Minister for Health announced increased fees for various hospital services. I am not here to question the right of the Government or the necessity to raise various fees and charges in order to make sure that the Government budget does not get out of line. But I do have a few questions for him in regard to whether or not his Ministry has been looking at the question of productivity and costs.

In the last few years, we have been upgrading standards of health facilities here in Singapore, especially rebuilding of Singapore General Hospital at tremendous cost. In the process of upgrading and modernization and the use of expensive equipment, costs tend to run up, sometimes beyond original estimates and the cost of maintaining the equipment and the facilities that we have established can be quite exorbitant. Is he taking the necessary measures in this regard? Another question is: are we not trying to raise our standard of health care too high, as a result pricing it beyond the reach of the lower-income group? I am rather concerned about this because I believe the Government should maintain certain minimum standards of health for people at affordable prices. What I am afraid is, with the availability of Medisave and now extended to one's next-of-kin or near-kin quite freely, there may be unnecessary tests, unnecessary services performed on patients, which use up the Medisave funds which ought to be saved for some other purposes.

Another issue that I would like to raise with the Minister is with regard to abortion. Sir, we know that we are short of some 15,000-16,000 babies a year to replace our population but we are aborting 24,000 or more each year. These are the ones which are reported. Can we not do something to restrict the number? We are prepared to pay $20,000 and more for a third child. Why cannot we do something to induce those women who are already pregnant and are aborting or who are planning to abort? Again, I read a while ago that the Ministry has introduced counselling, which is a good thing, counselling for women who wish to abort their babies, and a film was prepared for this. But under pressure from the doctors and nurses who are profiting from the abortions, the film was withdrawn. First of all, it is bad for Government or any Government Minister or Ministry to withdraw anything under pressure. Secondly, if the film is deemed to be educational and necessary, then you should persist in showing it, not only to those women but to the public at large and to the MPs here so that maybe they realize the horror of abortion and would be prepared to support a Bill to restrict it.

Dr Tan Cheng Bock (Ayer Rajah): Sir, I have spoken many times in this House about the implications of hospital centred health budget and the Ministry of Health has only paid lip service to this call. The percentage share of the health budget for this area of health care remains around 8-plus percent. This year, it is still 8.2%. To be more exact, last year its share was 8.9%. In 1985, 8.2% and in 1984, 8.6%.

Is it because hospital-centred health budget provides facilities and services that are more visible and glamorous whereas the services and facilities at the outpatient departments are so common, so insignificant that putting money here will have little impact on the public, no glamour? I hope this is not the thinking because we would be approaching the whole issue of health care from the wrong end of the stick. We must remember that primary health care is the first line of defence for the whole health service. I want to avoid another exchange with the Minister on this and would like to take this opportunity to put forward some views on our health care delivery system bearing in mind the aging population's health problems.

Sir, we can provide a cost-effective system because all the ingredients to make the system work are present. We have the hospitals. We have the outpatient clinics, the maternal and child health clinics, the school health service, Home Nursing Foundation and an active private sector of many generalist clinics, specialist clinics and private hospitals. The only trouble is that the two sectors - public and private - are moving in parallel. There is only a weak bond, a weak link, because of historical and other reasons. Historical because in the past doctors who moved out into the private sector were not thought of highly by their peers in hospitals because they were not the ones who became Registrars. The other reason could be envy because private practitioners do make a lot of money.

Putting aside all these prejudices, if the two sectors work closer together, we can give our Singaporeans a cost-effective health service that will be the envy of even the Western countries and Japan. For a start, more contacts between the two must be established to try to appreciate each other's problems and needs and the setting up of the Health Advisory Council is a good move. But above all this, we must educate our Singaporeans that the provision of hospitals by the Government and the private sector is not the answer to all our health ills. There is more to this. Hospitals may give us a false sense of health security and the Ministry of Health officials can help by not putting too much emphasis on what I describe as "glamour medicine", like the test-tube babies and heart transplants.

Expensive equipment like brain scans create demand and increase costs unnecessarily. If needed, we must buy, but expensive medical equipment especially must be carefully assessed because the purchaser has to justify its needs and therefore may encourage its use while it creates also higher expectations from patients. Then we must educate our Singaporeans on the proper use of our health facilities. The A&E department's health education programme shows how effective it can be if carried out properly. They should be extended to the proper use of our outpatient services, its relation to the hospital and the private sector. You will be surprised, Sir, how little Singaporeans know of our health care services and system.

These are simple but down-to-earth suggestions but require a lot of money, manpower, planning and careful implementation. That is why I ask that more money be put into this area. This is because if you teach a diabetic how to maximize the use of the outpatient facilities and the benefits he can derive from it, I am sure fewer diabetics will need hospital care. So also for the many chronic illnesses. We must remember that chronic illnesses will be on the increase - strokes, high blood pressure and hemiplegia. As our population ages, this will be on the rise. Proper education to this group of senior citizens would prevent early hospitalization.

Next, the Ministry of Health must upgrade the outpatient service. Do not take the outpatient dispensaries for granted. When I speak of upgrading, I do not mean only increasing the facilities through the expansion of the service. Yes, while it is necessary it is not the most important. The most important is the people who man the services. They work under stressful conditions, the doctors, the nurses, the amahs, the dispensers. It is not glamorous medicine. Improve working conditions by providing more adequate staff plus a career programme for the outpatient doctors, nurses and other members of the team. These are but a few steps to begin with.

Extension of involvement with the community at the home is one area that we can look into in the near future. It would be more challenging, Sir, and interesting if the outpatient doctor is perceived to be not only a cough-and- cold doctor but also a community leader of some sort, providing not only centre-orientated medical services but home medical services where patients discharged from hospital continue to be monitored by outpatient doctors at home. I hope the day will come when certain heart cases, diabetic cases, hypertensive cases that now require hospitalization can be managed by our outpatient doctors at the homes of these patients. Of course, this must involve special training, special mobile machines, special teams, paramedics, nurses. This is what I have been asking the Ministry of Health to do - to expand our outpatient dispensary to a second level of cost-effective health care system, complementing our hospitals and the private sector. We should open up our outpatient facilities to private clinics so that patients can benefit from cheaper investigation procedures. Duplication of facilities is wasteful and should be avoided.

There is a wealth of medical expertise in the private sector. A continuing exchange programme between the outpatient doctors, the private practitioners and the hospitals would benefit all. In this respect, I must congratulate Alexandra Hospital and Toa Payoh Hospital and the private Medical Association for running courses for the busy medical practitioners. This continuing medical education must be expanded to involve more doctors. This will upgrade medical practice and benefit Singaporeans. Then the training of our medical students must be community-based because most of our doctors finally end up in the private sector. I have spoken on this subject before and I do not intend to repeat it. In this respect, I am also happy to note that the Faculty of Medicine has at last a department on community medicine.

It is a shame, Mr Chairman, Sir, that some of our best clinical teachers end up being administrators. One of my best clinical teachers, the present Head of the Civil Service, was lost to clinical medicine, so also the present Director of Medical Services of the Singapore General Hospital and many others, including some in the National University Hospital. Perhaps they should be given time off to share their clinical experience and expertise with our medical students. Finally, I know it is difficult, Sir, to break away from traditional practices but I am asking the Minister to test out this simple approach to a better health care.

Sir, the Minister for Health is a reasonable man. I know. I had occasions to work with him. He is prepared to listen and that is important.

Think of what I have said, especially the changes I proposed on the level of health care at the Outpatient level, and Singaporeans will end up proud of a system that really takes good care of them - affordable and excellent. Thank you.

The Chairman: Dr Tan, would you like to declare your interest as a medical practitioner in what you have just said?

Dr Tan Cheng Bock: Yes. I am sorry. I am a private medical practitioner and all that I have said is for the interest of Singapore.

The Chairman: Thank you.

Mrs Yu-Foo Yee Shoon (Yuhua): ( In Mandarin): Mr Chairman, since the Ministry of Health is in charge of population, it is not too late for me to raise this question. When we are studying the demography of Singapore, it seems that we are only paying attention to the present statistics. I feel besides analysing statistics we should also pay attention to human factors. The Minister said a few days ago that in planning our population in the 1970s, we made two mistakes. One, we had not envisaged that there would be more and more singles who would not want to get married. The other, more and more married women who had higher education would not want to have more than two children. So in dealing with population planning, we must also study the attitude and trend of marriage and procreation of the people for which we have got to consider the following points. First point - whether single males and females will quickly change and improve their attitude towards marriage. Sometime ago the Zaobao published an article that some 2,000 years ago in certain monarchies if the male and female singles reaching marriageable age did not marry, it was considered an offence and their parents were fined. But in our present democratic civilized society, we cannot do this. I would like to ask the Minister besides the efforts and activities of the SDU and the PA, what better plan does he have to increase marriages and population because we do not implement any awards to encourage the singles to get married. Even in Japan, when singles staff get married, many companies would give them handsome awards.

The other question that we should consider is the reduction in the procreation of offsprings which is an all round trend as more and more women are receiving higher education and more and more of them are realizing the importance of a job and are actually going out to work so that they may augment the family income and help in raising the standard of living of their family. If working is a necessary part in one's life, what change and influence will it bring to one's married life and the procreation of children? We should consider this point.

The other point is about married couples. Many of them do not want to have children, according to a Ministry of Health survey. At the present there are more married women or couples who do not want to have children. The figure is double that of some years ago. So whatever the educational level of a family, the trend is towards fewer and fewer children. Judging from this, our measures should not only pay attention to cultural aspects or other aspects of the problem, but we must have an overall plan to deal with the situation. In other words, we should encourage 3-children family. In addition to that, we should also recognize and consider the fact that not every married woman would react to this encouragement. If you want to carry out a full scale programme, then I have certain suggestions. First of all, we must allow the working parent to have two months' paid maternity leave for a third child. Second, although the Minister for Labour yesterday has said that there would be a 15% rebate in tax, not every working mother could enjoy this tax rebate. The concession should not be limited only to mothers who have more than three '0' level subjects but should be given to all mothers. Third, although we are giving $100 allowance for child care in the creche, most of the creches are only looking after children under six years old. Many children who are in Primary One and Two should also be looked after. At the moment, there are 300 children who are under special care. I hope the Ministry would give some allowance or subsidy to organizations which look after such children who need special care. In Japan, the Government as well as civic organizations have done very well in this aspect. There is another method. Since our secondary schools are having single session system or full-day session, I hope this system will also be implemented in the primary schools, that is to say, in the morning the children can attend classes, in the afternoon they can take part in some activities which will be beneficial for the development of mind and body. This will also reduce the burden of the parents.

Fourth, as regards the number of couples who do not want to produce children is increasing. It is now 7%. As I have mentioned, although the $20,000 rebate appears quite generous on the part of the Ministry, it should not be limited to the third child. In other words, if our encouragement or concession is difficult to get because before that they would have to get the first and then the second child before they could think of a third child. So, they might as well give up. Therefore, you must also give some encouragement or award to the first and the second child, and then even more to the third child.

Fifth, on de-sterilization for procreation. As I understand it, at the moment the Government is not encouraging those who have been sterilized to de-sterilize in order to be able to produce again and has even rejected such requests from a few women. We should give a more gracious and magnanimous consideration to them, particularly those who are still young, having only two children or those who have abided by the previous policy of Stop-at-Two. As the cost of such operation is also quite high, we should also allow them to use their Medisave to pay for their de-sterilization operation cost.

The sixth point I would like to touch on relates to HDB. According to our survey, among the working mothers, 80% of them have their children looked after by their grand-parents or relatives. Although the HDB has allowed three-generation parents and children to have certain concession or special treatment to go and stay in new housing estate, I hope under our new population policy, we should also take into consideration cases where such children apply to stay in the area where their parents are staying or their parents have planned to go to the area where the children are staying, when similar consideration or concession should also be given to them.

There is another point, the seventh, which touches on immigrants. At present, when one of a married couple is a non-citizen who wants to be a citizen or permanent resident, our policy or condition is that after having two children, both of them must undergo sterilization. I hope under the new population policy, we would relax such policy in regard to such couples.

The eighth point relates to abortion. The Member for Whampoa just now touched upon the seriousness of abortion. The Ministry of Health has announced that it will help private practitioners to carry out consultation on abortion for such applicants. I think it is inadequate because to doctors, time is important, time is money. They do not have much time to give counsel to patients. Therefore, I think it is better to train their nurses and private paramedical personnel. Also, there should be legislation stipulating that doctors should not abort on the first application. More time should be given to the applicant for consideration, and only after more than two applications have been made can the doctor consider to abort.

The Chairman: Mr Heng Chiang Meng is not speaking. Mr Ng Kah Ting is not here. Mr Yeo Cheow Tong.

The Acting Minister for Health (Mr Yeo Cheow Tong): Mr Chairman, Sir, before going to the detailed answers, I will first present a brief overview of my Ministry's philosophy and goals. Some of these issues have been brought up before, but I feel that they are worth repeating as it will give Members a better idea of the future directions of our health care system.

Sir, good health and a high standard of medical care are important to all of us. Understandably, Singaporeans therefore demand the best. My Ministry is therefore committed to providing the best possible health care system but within the limited resources available to us. However, the philosophy that prevention of diseases is as important as its cure will remain a cornerstone of my Ministry's health policy.

The main thrust of my Ministry's programme has been to lay the foundation for medical excellence. As the Member for Changkat has pointed out, there is some confusion as to what this really means and what this would imply in terms of costs. The objective of achieving excellence is to provide a high standard of care for the benefit of Singaporeans. If in the process, foreigners come for treatment and make use of our services in the private sector, this will benefit the economy. However, it is not our primary objective.

Sir, in the last few years, we have strengthened the development of selected sub-specialities. More sophisticated procedures and treatment have been provided. Members may be interested to know that our Government hospitals performed 262 coronary artery bypass operations last year, and this represents a 40% increase compared to 1985. This indicates that Singaporeans are now more confident of the expertise and skills of our surgeons. Consequently, fewer are now proceeding abroad for this delicate operation compared to previous years.

Another area our specialists are gaining rapid prominence is eye surgery. Over 1,000 intraocular lens implants were done after cataract surgery last year. And this operation gives patients almost normal vision without the need for thick glasses. This particular operation was only introduced in the advanced countries just a few years ago. Our hospitals have also undertaken more reattachment operations for severed limbs, using highly precise microsurgical techniques with greater prospects of success.

We have also made increasing use of sophisticated medical equipment for the diagnosis and treatment of diseases. One example is the body scanner, a computerized X-ray machine which produces accurate images without the need for the insertion of catheters or other operative procedures which carry their own attendant risks. Another example is the linear accelerator, which is used in the treatment of cancer. It gives better and more precise penetration of radiation for the treatment of certain cancers. The laser is also now increasingly used and it allows surgery to be performed with a minimum of blood loss and scarring. The patient suffers less post-operative pain and recovers more quickly.

Unfortunately, such modern and sophisticated equipment are also extremely expensive. For example, a linear accelerator will cost almost $2 million to purchase and install. We must therefore make sure that the use of such expensive equipment are determined carefully and are controlled. We must also recognize that such equipment do have certain benefits because they allow the operations to be carried out faster, allows quicker recovery on the part of the patients and it also leads to cost savings. But I do take the Member for Ayer Rajah's point that we should be very careful and not allow such equipment to proliferate.

Sir, I also agree with the Member for Changkat that excellence can only be achieved when we provide not only for service but also attach sufficient importance to teaching, to research and training. Excellence cannot be achieved when teaching and research are placed lower in priority.

Sir, the National University Hospital is our leading teaching hospital. It has a sufficient number and range of teaching cases; highly-qualified, full-time, academic staff and they are there in appropriate numbers and sub-specialities. They also have an active research programme. This is reflected in the fact that six of the laboratories in NUH are currently recognized by the World Health Organization and have been accredited by the WHO as their Collaborating Research Laboratories.

Sir, over the years, in all our major Government hospitals, senior doctors have also shared with the University equal responsibility for undergraduate and post-graduate training. This will continue and it would complement and supplement the efforts of NUH in training our undergraduates.

Sir, we have trained many more doctors in recent years. In 1980, we had about 2,000 doctors in Singapore. Today, we have almost 2,800, an increase of about 800. Similarly, we have increased the pool of specialists from 720 to 1,090 over the same six-year period. This will help to lessen the load on the existing doctors and make medical care and treatment more accessible.

Medical science and technology is changing rapidly. To ensure that we keep abreast of the latest changes, many of our doctors are sent abroad for training. Each year, about 10% of our specialists have gone to prominent medical centres overseas for either advanced refresher programmes or higher skills training. We have also invited between 20 and 30 experts to Singapore each year to teach and demonstrate their skills. This emphasis on advanced training is well reflected in our training budget. Funds for the Ministry's Health Manpower Development Programme have increased from $(r) million in 1980 when we first started to over $3 million this year.

Sir, because medical science is advancing so rapidly, it is important for all doctors to update themselves on the latest developments. Here, I agree with the Member for Changkat that continuing medical education (CME) is very very important. This is the only effective way to ensure that our doctors, both in the private sector and the public sector, are able to keep in touch and update themselves on all the developments. It is very essential for CME to be emphasized and promoted if we are to continue to upgrade the quality of medical care. The Academy of Medicine, the College of General Practitioners and my Ministry have taken the lead in organizing such CME activities. Last year, 89 medical meetings were held in Singapore and more than 13,000 persons attended. This represents a 2 1/2 times increase over 1985. We expect the CME activities and participation by local doctors to intensify further in the coming years.

Sir, besides professional excellence, we also need to provide better facilities. Part of the reason is because as Singaporeans become better educated, their expectation also increases. They now do not like to make use of our C class beds and there is a tremendous demand for our B2 and B1 facilities. Should we deprive them of their needs and to force them to the C class accommodation? I think it is a difficult situation. My Ministry has therefore pressed ahead with the redevelopment of our hospitals and polyclinics. The Skin Disease Centre at Tan Tock Seng Hospital Complex will be completed this year. It will be the national referral centre for all skin and sexually transmitted diseases. The National Blood Centre at the Singapore General Hospital will also be completed in early 1988 and will provide for the blood needs of the nation and will be the centre for research in blood related diseases. We have also initiated the planning and design for the redevelopment of Tan Tock Seng Hospital, Toa Payoh Hospital and Kandang Kerbau Hospital in line with public demands.

Sir, my Ministry is committed to improving the overall quality of health care. Between 1980 and 1986, the number of doctors working in our various institutions have increased by about 50%. We now have 945 doctors and 445 specialists. The specialists therefore account for about half of our medical staff. The Member for Changkat has asked how do we see the numbers developing in the future years. My intention is to maintain this ratio and in line with this ratio, about 50% of each batch of graduating doctors are being selected for post-graduate training to be specialists.

Members may also be happy to note that we are paying special attention to the elderly. This is especially important as the number of old people in Singapore is expected to increase from 200,000 today to about 330,000 by the turn of the century. And as the Member for Changkat has pointed out, the turn of the century is not that far away. My Ministry has already assisted the Home Nursing Foundation to set up two senior citizens' health care centres. These centres offer day care, rehabilitative care, health education and health screening for the elderly. By the end of this year, another two centres will be established.

We are also planning to set up a department of geriatric medicine in one of our general hospitals. And this will serve as the referral centre for geriatric problems. It will specialize in geriatric assessment, diagnosis and treatment and will facilitate the return of the elderly to the home and the community.

As stated earlier, the promotion of health through prevention of diseases will continue to be a primary objective of my Ministry. Prevention of diseases, though time-consuming and at times difficult to achieve, is the long term and more cost effective treatment rather than curing them in the hospitals or in the polyclinics. We will continue to strive to reduce the incidence of our two major killers, namely, cancer and heart diseases. The key to the prevention of these two diseases lies in a way in the reduction of smoking. We will therefore continue our drive towards becoming a nation of non-smokers.

Sir, the foundation for a life-time of good health must necessarily be laid from young. In our National Health Plan, we have emphasized the crucial role of the individual in promoting and maintaining his own health. Health, unfortunately, cannot be imposed. It can only be attained through keeping fit and maintaining healthy lifestyles. The inculcation of such habits must begin at a young age. Consequently, under our maternal child health and school health programmes, screening for the early detection of physical and developmental abnormalities in infants and children will be stepped up. Diagnostic and treatment facilities for school children with eyesight, hearing and growth problems have been upgraded and health education for school children will be further strengthened.

Unfortunately, all good health programmes are expensive. Although the cost of providing health care has increased, my Ministry recognizes the need for continued subsidy, especially for the young, the old and the indigent. This is reflected in the overall health care subsidy which increased from $165 million in 1980 to $271 million in 1986. This subsidy is expected to increase by another $54 million this year, to $325 million despite the minor fee revision which will be carried out from 1st April this year. I hope Members and Singaporeans will understand the need for periodical but gradual fee increases. I can assure them that the little extra that they are paying is really a small price to pay for the very significant progress and improvements that are being achieved in our health care system in order to look after all our citizens well. However, Singaporeans can be assured that no one would be deprived of medical care because of financial hardship. Those who cannot afford to pay can always apply for a waiver of fees.

Sir, let me now move on to the specific questions raised by some Members. The Member for Changkat asked about the impact of privatization, saying that some Singaporeans relate privatization to the operation of private companies which are motivated towards making a profit and so they fear that thereby the hospitals will increase their charges. Sir, that is not the intention of our privatization programme. Our programme is, in fact, not to privatize the hospitals in the sense of selling the hospitals to private companies and let them try to survive as viable independent units. The whole objective of our programme is, in actual fact, to restructure the hospitals, allow it to operate as autonomous units free from the constraints of Civil Service regulations. In this way they will be able to plan their management system, recruit the necessary staff, remunerate them, come out with systems that are efficient, since they do not have to comply with very detailed regulations under the Civil Service. Although hospitals have been restructured, for example, the National University Hospital, there will always be subsidized rates to cater for the low income group in Singapore who cannot afford to pay the full cost of hospital care. In NUH the number of subsidized hospital beds is expected to exceed 60%. For those patients who go there and who still cannot afford to pay the subsidized fees, they are eligible to apply for a waiver as well. Sir, that is why we have provided NUH with a subvention or subsidy of $27 million this year in order to help pay for the subsidy for patients occupying those subsidized beds.

The Member for Changkat asked about the output of doctors and whether the Ministry can coordinate the output of doctors to ensure that they will be meaningfully employed, making sure that they will be employed in the right sectors, they will be trained properly and also ensuring that there will be no surpluses, as this will be a waste of very skilled talents. There is a need for us to have more doctors and since there is a need we have to train them. The need for more doctors arises because of the demand for more and better services from a better educated public. And if we are to take the suggestion of the Member for Ayer Rajah, I think the number of doctors that are required will be a lot more because if we are going to provide, as he has suggested, personalized service or have doctors visit patients in their home, I think the number that we are talking about will not be adequate. But I will go into his suggestion later.

We also need to cater for an increase in the population which is increasing at about 1.1% a year as well as to cater for the impact of the aging population. Today there are 200,000 persons aged 60 and above. In the year 2000 we expect to have about 330,000. The expectation is that the increase in the aging population alone, an increase of 127,000 aged, will lead to an increase of about half a million hospital patient beds.

In estimating the requirements for doctors, we are also guided by various factors, one of which, as I have mentioned, is the change in the age distribution in the population. The other one is the expected demand for health care. Thirdly, the economic performance of Singapore.

Sir, we also look at the doctor/population ratios of other countries to cross check and see how far out are we compared to their situations. There is no ideal doctor to population ratio. If there is, it varies widely, depending on the geographical aspects, depending on the sort of development that they are going through. And we expect that in Singapore by the year 2000, we will require a ratio of about 700:1 doctor. This compares with the 930:1 that we have today. That means today we have one doctor catering to 930 people in Singapore. By the year 2000 we would have provided for one doctor to cater for 700 people. The ratio in the developed countries varies from between 400 and 500 to 1 in the US, Australia and Germany. They are within that range. But we do not think that Singapore requires a doctor to population ratio as generous as that in these developed countries. Because geographically they are more spread out, they also have a much bigger proportion of older people than we have at the present moment. They have large rural populations. And this is a very important factor, they all have medical insurance which has led to a tremendous increase in demand for medical services.

Sir, I agree with the Member for Changkat that we should avoid over-producing doctors as the medical intake tends to be the top graduates from our 'A' level cohorts. So, it is important that the right number is taken and we do not unnecessarily waste the talent. We will continue to monitor the situation closely, the various factors involved in the demand and supply. For example, one of the things that could change will be the amount of research work that would be carried out in Singapore in the future. Research work in the microbiology, in gene-splicing technology, research into medicines, medications. If we can promote such research activities in Singapore, then the demand for doctors would be much higher. In that case, we would have to ensure that we have an adequate supply of doctors to cater for that sector of our economy.

The Member for Changkat talked about continuing medical education. I have replied to her on this. She has also talked about the role of NUH as a teaching hospital. I agree with her that NUH must serve its primary function, which is, to be the premier training or teaching hospital in Singapore. However, in being a teaching hospital, it also needs to ensure that it has the required patient load, in which case the service factor cannot also be ignored. However, the service factor in NUH should not dominate teaching or research. There must be a proper balance to ensure that it maintains its standard of excellence.

The Member for Fengshan has also asked a few questions. As regards hospitals, he asked whether all hospitals have the same role and whether some hsopitals are, in fact, second or third class. Sir, I do not think there is such a thing as first, second or third class hospital. All our hospitals have the same objective, which is, to provide the best possible medical care and services for our people. However, the role of hospitals may not necessarily be the same. We have limited manpower resources. We are also living on a very small island. Geographical distances are not a problem. Since all the hospitals are situated close to one another and we have a limited resource base of doctors, it is important for us not to duplicate the kind of specialties or the kind of facilities which require very highly developed manpower or very expensive equipment. In line with that, the Singapore General Hospital has been developed as the tertiary medical centre. Many of the sub-specialties will be provided in SGH and they would then cater for the highly complex cases which can be referred to it by the other hospitals. The regional hospitals, Toa Payoh, Tan Tock Seng and Alexandra Hospitals will also have their own specialties as well, but those will be specialties that have a high demand where it makes sense to allow them to be developed in multiple hospitals. When they have complicated cases, they can still be referred for treatment in Singapore General Hospital. Therefore, there is a two-tier specialization - a tertiary tier and a secondary specialization tier. It does not mean one is better or worse off than the other. They are all equally good in terms of treating the disease types that they are coping with.

The Member for Fengshan also asked about NUH as a private company and a private hospital, that it receives a subvention and it receives housemen for attachment. NUH has been incorporated as a private hospital but a private hospital that is fully owned by the Singapore Government. I have already explained the objectives as to why we have incorporated NUH as a private hospital and that although it has been incorporated as a private hospital it will still provide heavily subsidized beds. So in line with that, we have provided the subvention, and it is likely that the subvention will continue for as long as there is a need for subsidized beds.

In terms of allowing private practitioners to be allowed to admit patients and to perhaps practise in NUH, there is presently a scheme whereby private consultants in the private sector are allowed to practise in the Government institutions. They will have to put in a certain number of hours in order to teach as well as to provide service to all the patients. But in exchange for that, they will also be allowed to admit private patients. As to whether more will be encouraged or allowed to participate in this scheme, or perhaps even accredited as visiting consultants, I will ask my Ministry to look into the implications and see what we can do to accommodate the request.

The Member for Fengshan has also talked about the shortage of nurses. Yes, he is right, there is a shortage of nurses today. The figure he quoted of 1,200 is fairly close. He has asked whether the Ministry can relax regulations in order to allow foreign nurses to work in Singapore and what are the long-term measures that the Ministry will be taking to improve the supply of nurses. The Ministry has been facing the problem of the shortage of nurses for several years. There are few reasons for that. One is that the salary scheme for the nursing service has not improved much over the years. When you look at the working conditions for nurses, they are quite trying conditions. They are facing suffering. They have to face highly irritable relatives who visit patients. They have to work in shifts.

In terms of attractiveness when compared to the other new career possibilities that have cropped up or developed in Singapore over the past 10-15 years, I would say the nursing profession today may not be as attractive as it was, say, 15-20 years ago. The Ministry is now looking into how we can make the nursing profession more attractive in terms of image, in terms of work content and in terms of remuneration. We are looking into all that and we hope to come out with a plan which will allow us to attract girls and boys who are looking for a career in terms of serving people in the medical field. We hope to be able to finalize this scheme sometime this year.

Even if we can attract the fresh school-leavers to the nursing profession, it still takes three years for them to be trained. In the interim, we will also look into how we can relax the regulations in terms of allowing foreign nurses to work here on a temporary basis.

The Member has also asked about the presence of foreign specialists in Singapore, whether they are imparting their skills to the trainee doctors or are they here just making a living. My understanding of the presence of foreign specialists here is that they are playing a very vital role. Many of them have played a vital role in Singapore. As I mentioned earlier, we have been increasing our pool of doctors in Singapore very rapidly over the last six years or so, from 2,000 to about 2,800 today. It was not so long ago when we were facing serious shortages in all the higher levels of medicine. We had the specialists here but they were just not enough. There was a stage when doctors with higher degrees and with the necessary training and experience were allowed quite freely to come to Singapore. In recent years, because of the growing output of doctors and specialists, the Ministry has been more careful in allowing or accrediting foreign doctors to practise in Singapore. However, that should not be taken to mean that we will not allow foreign specialists to practise here. That must not be the case. Singapore has a very small resource base in terms of manpower. If there are good specialists with proven skills, proven knowledge, proven expertise, good reputation and who wish to practise here, I think we should still allow them to come here because it will be good not only for our own people but it will also be good for our own doctors who can then learn from them. We will be flexible but we will be more careful by ensuring only those who have the necessary expertise will be allowed to practise here.

The Member for Whampoa has asked about fee increases.

Dr Arthur Beng Kian Lam: Sir, can I rise on a point of clarification?

The Chairman: Are you giving way?

Mr Yeo Cheow Tong resumed his seat.

Dr Arthur Beng Kian Lam: Will the Minister agree to consult with the Academy of Medicine in this respect?

Mr Yeo Cheow Tong: Sir, there is an Accreditation Board that comprises representatives from Government and representatives from the private sector as well and they are all highly recognized specialists in Singapore. I am sure they will be in touch with the Academy and other members of the profession in Singapore in terms of knowing what is needed. Whilst they may not consult the Academy formally, I am sure they are aware of the situation as to what is needed in Singapore.

The Member for Whampoa talked about fee increases and asked whether the Ministry has been looking into productivity and the cost factor. He said that when we upgrade hospitals, costs go up, maintenance costs also go up and in trying to upgrade health care consequently the cost of delivering the health care is too high, thereby pricing it above what the lower income group can afford. I wonder whether the Member for Whampoa was here when the Member for Ayer Rajah was proposing that we should provide a home-based doctor service. Productivity in health care is a very complex issue, and it is very difficult to relate it to factory productivity. In factory productivity, if a worker produces 10 items in an hour, you can check the quality, measure it, check against its functionality and say that is his or her productivity. If another worker can produce 15 items an hour with the same quality, you can say the second worker is 50% more efficient, more productive than the first worker. It is easier to relate, but in the medical field, productivity, unfortunately, is a more complex issue. For example, whilst it is possible for a doctor to see and treat, say, 150 patients a day, can we say that he is actually more efficient than another doctor who is treating only 100 a day versus another doctor who may be treating only 70 a day? In terms of doctor to population ratio also, the US doctor to population ratio today is 1:500. Singapore is 1:930. Since our one doctor can cater for 930 Singaporeans, can we say that our doctor is actually almost doubly efficient as the American doctor?

It is difficult, and I would like to say that it is not possible for us to use simple indices because health care is highly personalized. The complexity of the case is also not standard. You do not have patients coming in through the door and you can quantify the complexity and say, "With that complexity, the doctor should take 20 minutes to diagnose and treat him. And if he takes more than 20 minutes he is not doing his job. If he takes less than 20 minutes he is very efficient." It is just not possible, but I think it is possible to show that we are trying to improve the level of care for Singaporeans. With the greater demand for services and the need for sub- specialization to deal with the greater complexity of diseases, we have been consciously recruiting and training more doctors in order to ensure that the workload on the existing doctors is lessened so that they can devote more time looking after the patients.

Some examples. In the hospitals, the daily doctor to patient load in 1980 was 1:36. Today, it is 1:30. Another area where we have tried to give better service, devote more time for patient care, is the Accident and Emergency Unit where the ratio was one doctor to 24 patients in 1980 compared to one doctor to 17 patients in 1986. In the A&E it is more self-contained. It is easier to find out what really has been the impact. Have we over-provided thereby resulting in waste or are we just making the requirements by ensuring that the service factor is being catered for? In the A&E, the average waiting time in the past was about 45 minutes per patient and 30% of all patients had to wait in excess of one hour, in most cases up to 2(r) hours. With the improvement in the doctor to patient ratio, we have now managed to reduce the average waiting time to only 12 minutes. 4.30 pm

The Chairman: Mr Yeo, you have less than 5 minutes left.

Mr Yeo Cheow Tong: And only one in 20 of the patients have to wait more than an hour. Sir, I can assure the Singaporeans that we will always be very cost conscious in all our programmes. On the administrative and managerial aspects, we have taken a number of measures to improve productivity and the efficient use of resources. For example, we have computerized and mechanized many of our administrative and operational procedures. We have also improved management systems and management capabilities to ensure that they are utilizing our resources properly through better training of the staff. We are also contracting out work which could be provided more efficiently by the private sector but which in the past was required to be provided by the hospital.

Another area that we are looking into is the re-development of the old sprawling hospitals where they cover large pieces of ground requiring a long distance to be travelled by patients, by doctors. We will re-develop them into compact units so that the services can be centralized and made more efficient. So all these measures would help to curtail the rising cost of health care.

The Member has also asked about abortion, whether we can do something about abortion as it would help to perhaps increase the birth rate. Sir, the Ministry introduced a counselling programme for all women seeking abortion in Government hospitals in the middle of 1986. The programme was a two-stage one - pre-abortion counselling and post-abortion counselling. It involves personalized counselling as well as the use of video-tapes and printed materials. The aim of the programme is to ensure that the woman fully understands the implications of abortion. During the counselling, with the aid of the video-tapes, the risks of abortion are explained so that the woman can then make a critical decision after examining all the options open to her. If she still chooses to have an abortion, she is counselled after the abortion, again through the use of video-tapes and personalized counselling, and she is told about the range of contraceptives that are available. The objective is to avoid a situation where the woman would require abortion again in the future because repeated abortions also have adverse effects on the woman's health.

An hon. Member: Even one abortion.

Mr Yeo Cheow Tong: Even one abortion, right. That is why we counsel her on the attendant risks of abortion. Sir, the tape has been withdrawn temporarily while a new copy is being produced and they will be used as soon as they are ready. As the private sector is responsible for about two-thirds of all abortions in Singapore, they will also be brought into the abortion counselling programme. As the Member for Yuhua had mentioned, doctors will not have time to do the counselling properly. We have trained many of the nurses of the private practitioners to do the counselling instead.

Sir, we feel that with this abortion counselling, some of those women who come for abortion can be counselled to think again and to retain the pregnancy. The reason is simple. We should not force any woman to try to retain an unwanted pregnancy. I think Members have read in the papers over the past few weeks about abandoned babies. We do not want more of this. All births must be births that have been planned and wanted so that the child can have a strong future.

Sir, the Member for Ayer Rajah has given quite a few suggestions which I have listened to very very carefully because being an experienced practitioner, he has a lot of good ideas to give to the Ministry which we would definitely consider.

Dr Tan Cheng Bock: Expensive ideas.

Mr Yeo Cheow Tong: But we will consider them very carefully as well.

Sir, the area of primary health care that the Member has spoken on, that is an area that the Ministry is also strongly focussing upon. But the role of the Government in terms of provision of primary health care needs to be seen in the context of present day Singapore. If we cast our minds back, 20 to 25 years ago, to the old Singapore when there were plenty of kampongs, very few GP clinics around and those that were around were also perhaps beyond the reach of many of the Singaporeans - in those days the role of Government in provision of primary health was a very very key one. Government was the primary provider of primary health care. Today, the situation has changed quite significantly. Today, 70% of all primary health care is delivered by doctors in the private sector, like the hon. Member for Ayer Rajah, and they are doing a very very good job. They are well located, strategically located mainly in the HDB estates, easily accessible, reasonable costs, personalized service which the Government, I think, would find very difficult to try to match.

The Chairman: Mr Yeo, your time is up.

Dr Tan Cheng Bock: The Minister has talked about the changing role of the Ministry's Outpatient Dispensary. He said that because there has been a proliferation of private medical clinics, the role of the outpatient dispensary has got to change to a certain extent. This is precisely what I am asking him to do. You have got to really change the role of the outpatient dispensary. You must upgrade it. You must put it at a higher level. You must not only provide centre services (that is what we are providing now) but you should also extend it to the homes. Because you must realize that the problem of the old is coming up, and we are going to get many chronic patients, patients who are house-bound who cannot come down, patients who are semi-ambulant and, of course, the recently discharged hospital cases. I think they need attention.

So I was thinking that perhaps you could use the outpatient set-up that you have now to provide this service to the homes. I know it is a highly personalized service but I think it is one area we should look into. I am sure that if you compare the cost involved and the cost of their having to stay in hospital later on, you will find that there is definitely some advantage. This idea that I have mooted is not new. Some of the advanced countries have put this into practice and I do hope that we can consider this. Don't close this option.

Dr Ang Kok Peng: Thank you, Mr Chairman, for letting me join in the debate. First, I wish to commend the Ministry of Health for having done an excellent job in improving the dental health of our population, in particular the young, through the Dental Health Education programme. I am, therefore, confident that the Ministry can also achieve similar success in other areas of health education.

I would like to refer, in particular, to health care in our primary schools. In most primary schools, there is a dental nurse in the school to cater to the dental needs of school children. I would suggest that the Ministry provide primary schools with health nurses. These nurses could deal with some aspects of total health care, for example, they could be put in charge of sick bays, provide first-aid in schools, monitor the general health of the children and maintain a close watch on the progress of children with special health problems, such as epileptic children and diabetic children. They could also teach children how to cope with stress and how to achieve a balanced diet.

There is another aspect of health care education which requires greater attention, and that is, eye care education. It seems to me that in terms of people wearing power lenses per capita of population, we must rank as one of the highest in the world. Poor eyesight is therefore a problem for us. I would urge the Minister to consider putting in more efforts in eye care education in our schools and other institutions.

Another matter of interest to me, Sir, is the labelling of medicine. The practice of labelling medicines dispensed to patients is now widely practised by doctors and pharmacies. This is good as it will enable subsequent identification of the dispensed medicines should the need arise. However, we have some clinics that are using proprietary or code names often known only to themselves, in labelling these medicines dispensed by them. I presume this is to keep the identity of these medicines to themselves. If this is so, then it defeats the purpose of labelling medicines. In this connection, I would like to raise two points. Would the Ministry ensure that either only proper generic names are used or, if proprietary names are used, full details of composition be deposited with the Ministry of Health? Two, should not these proprietary medicines which are exclusive to a clinic be subjected to product licensing under the Drug Registration Scheme?

The Chairman: Can I remind Members that we have 20 amendments under this Head and there are only 30 minutes left? Encik Sidek, please be brief.

The Parliamentary Secretary to the Minister for Trade and Industry (Encik Sidek bin Saniff): ( In Malay): Mr Chairman, firstly, I thank you for giving me the opportunity to speak. Secondly, I wish to congratulate the Acting Minister who has a close relationship with MUIS and the Minister for the Environment who is also the Minister in charge of Muslim Affairs in Singapore. Recently, both these Ministers have been able to resolve the important problem of kidney donation.

I wish to bring to the attention of the Minister concerned to another area which I think is equally important, and that is abortion. We all know that it is the responsibility of the Government to provide facilities to the citizens. However, I think the people should realize that they must not misuse these facilities. What I mean is that all the modern facilities that have been provided are intended to protect the interests of those who make use of them. No problem arises from married people who avail themselves of the facilities. But when non-married people use them, then we have a problem on our hands. It is my desire that when our girls and women have made a mistake, committed a sin which is considered big, they do not commit an even bigger sin by resorting to killing. Pregnancy out of wedlock is a mistake as well as a big sin. But to kill an unborn baby is an even bigger sin. They or their families must have the inner strength to face this risk which I know is not easy. This is not something one can be proud of. They should allow the pregnancy to continue and when time for delivery comes and if they wish to care for the baby, by all means do so. If not, I am confident that there is a list of people who are eager to adopt the baby who, both from the viewpoint of religion and the community, is innocent. The guilty and the culprit is none other than the woman herself.

I think this is important for the Singapore community as a whole because our values have undergone such drastic changes. In the old days when a young man decides to marry, he would settle for a virgin girl. But in our modern society, young girls and boys like to have dates first. But when it comes to marriage, they will settle for village girls. Human beings, however, are primitive when it comes to gut issues such as these. They would go out with 10 virgin girls but when they want to marry, they prefer the homely girl - the one that never if possible go out with anyone else. In the context of Singapore, such a possibility could not happen or near impossible. But the most important issue, Sir, is the risk to the family. When he marries, he sets up a home and the family institution is the most important institution that warrants utmost care.

Dr Koh Lam Son (Telok Blangah): Mr Chairman, first, as a private medical specialist, I would like to declare my pecuniary interest.

Sir, Singapore already has a high standard of health care and I like to congratulate the Minister and his Ministry for the good work done. Health care has always been costly and will be more costly in the future. And more and more is being spent every year to meet the escalating costs. I think it is right that if people want and expect a more sophisticated health care system, they should be prepared to share the responsibility of meeting the cost. Sir, I would like to know how important it is to the Minister that the subsidy level should fall every year. During a briefing by the Ministry officers, we were given a paper showing that the subsidy level has fallen year after year, from 1982 at 76% to 68% in 1986. For the two years, 1985 and 1986, there was, in fact, no revision of hospital charges. And the subsidy level was reduced because in 1985 there was increased demand for the use of higher class wards due to the availability of Medisave; in 1986 due to the cost-cutting measures introduced by the Government. In 1987, will there also be a reduction in the subsidy level?

The Minister recently announced the revision of fees which will be effective on 1st April. The Ministry, according to the Budget, will spend $64.32 million more this year. Will this announced revision of charges and the continued demand for higher class wards be sufficient measures to produce a reduction in the subsidy level for FY 87? If not, will the Ministry introduce another revision of charges before the year is out?

Sir, I am not against the reduction of subsidy level. In fact, I think it is necessary if we want a more efficient and sophisticated health care system. However, the reduction in the level of subsidy must be implemented in a more equitable way. When we talk of subsidy, we should consider first on the basis of the affordability of the user, ie, the socio-economic status, before we consider the share of cost of the services rendered. A distinction must be drawn between the C class users and the higher class ward users. Those who choose to go to the higher class wards must be prepared to pay more. The A and B1 class rates should be compared with the private hospital charges. And there is no reason why the users should not be charged above cost if it is still cheaper than the private hospital charges. The C class ward users should be treated differently. There are people who cannot afford. This is the ward for the poor. They are dependent on heavy subsidy and any general increase in charges are likely to affect them most. Those who can afford and who want to make use of C class ward facilities because they are cheap should be discouraged to do so and I encourage the Ministry to formulate a means test to prevent this misuse.

Sir, although the latest round of increase in fees is marginal, I am concerned with its effects on the poorer citizens, especially those who have no Medisave accounts. The increase is based more on the utilization of services rather than on affordability. The problem may arise, for example, if a senior citizen in a poor family falls ill and requires repeated hospital admission. I note that about 40% of hospital admissions do not make use of the Medisave account. I would like to know from the Minister what is the proportion of these non-Medisave users who are poor and have no Medisave account.

The Minister has said more than once in this House and he has said it again today that no one will be deprived of hospital treatment because he cannot afford it. I commend the Minister for his compassion for the sick. However, I would like to know how the Ministry actually assesses whether a patient can or cannot afford to pay his fees. If he or she is on public assistance, then it is a clear-cut case. But there are numerous examples of people who are faced with temporary financial hardship, eg, those who are out of work and those whose relatives simply refuse to help out or unfilial children. Will assistance be given to this category? I would be interested to know the criteria as practised by the hospital social welfare department.

Sir, since Medisave was touched on, I would like ---

The Chairman: Order. Your time is up, Dr Koh.

Mr Yeo Cheow Tong: Sir, I was replying to the Member for Ayer Rajah when my time ran out just now. So I would like to continue from there.

The Chairman: 5.15 pm is guillotine time.

Mr Yeo Cheow Tong: Sir, the role of the private sector is very important. And over time, I am confident that the role of the private sector in terms of providing primary health care will increase. As part of our efforts to increase their role, the hospitals are now giving discharged notes to our patients that will summarize the case and the treatment so that when the patient is discharged, he can then go back to his GP and allow the GP to carry on with the treatment. In this way, the role of the private sector can be improved.

As to his other suggestions, I will definitely ask my Ministry to look into them. However, there is one very stark impact in terms of his home service, ie, asking doctors to visit homes is not really the most efficient way of utilizing skills, although it may be saving on the hospitalization costs. I think there could be other intermediate forms of treatment and we will definitely look into them.

Dr Tan Cheng Bock: Mr Chairman, just a point of clarification.

Mr Yeo Cheow Tong: Could I just finish all this first?

The Chairman: The Minister is not giving way. Please sit down, Dr Tan.

Mr Yeo Cheow Tong: Sir, the Member for Yuhua talked about the population issue and I would like to address that on a broader basiss. Members are aware of the drastic drop in our birth rate over the past decade. As a nation, we are not producing enough babies to replace ourselves. If this trend is not corrected, our children will face very grave consequences in the years ahead. I think we owe it to our children and the future generations to reverse this trend of declining birth rate. And this is the crux of the whole population issue. It is not the fine details of what incentives are available. Nor is it how convenient or how easy we can make it for parents and mothers to care for their young children. It is much more than that. It is a kind of legacy that we, as Singaporeans and as parents, wish to leave behind for our children. It has to do with the type of future we wish to leave behind for them and for them to have.

Sir, I do not believe that any of us as parents wish to leave behind for our children a heavy burden to shoulder when they grow up. The new population policy aims to reverse the dangerous decline in our birth rate. We do not expect to reverse the decline overnight. And as the First Deputy Prime Minister said, he would be very happy if this goal can be attained by the mid-1990s. But we have to make a start now towards reversing that decline. And much would depend on the attitudes of Singaporeans towards marriage and family formation, as the Member for Yuhua has stated. Whilst encouraging singles to get married and for those married couples to have more children, we will also need to strengthen the concept of responsible parenthood. I hope Members of the House and Singaporeans outside the House will keep the broader objectives and the issues in mind. I hope that Singaporeans will not get so engrossed in the fine details that they lose sight of the grave dangers that lie ahead of us if the population growth rate decline is not arrested.

Sir, the policy of three-child norm is a fundamental change and so are the measures. Demography is not a perfect science. Mankind has not learnt to be able to predict accurately the behaviour of his fellow men. And I do not think we ever will. But that does not mean that we should do nothing. Can we predict to any degree of accuracy whether the new policy will succeed? I think the answer must be no. We can only hope that Singaporeans will look carefully at the statistics that we have compiled and presented to them and think about the statistics and I hope they will say, "Ah, yes, there is a problem ahead if I as a person do not do anything now and if I do not play my part, and worse, the problem is going to affect the ones that we love most, our children." So I hope that that is going to be the response because I believe that people will have children only because they want to have them. They want to have children for the joy that the children bring, for that little sparkle that they add to our lives.

I do not believe that many, or if any, Singaporeans will have a third child simply because we have provided some incentives. Our surveys have shown that many Singaporeans, in fact, would prefer to have a third child but for our previous stop-at-two policy and the number of disincentives we had against the third child. I hope such people will now proceed to have their third child, now that all the disincentives have been removed. And then they will look at the incentives as being a small bonus. So I hope that we can all focus on the importance of the new policy and give the package of measures which should be seen in its totality a chance to work.

Sir, a few points were brought up in the previous debates and the Minister for Finance has asked me to reply to them since they form part of the population measures.

Some Members have suggested that the special tax rebate for the third child is not socially equitable. I would like to stress that the special tax rebate for the third child does not discriminate against any person. In essence, it grants the vast majority of Singaporeans a tax-free period of five years. In fact, it can be deemed as being discriminatory against the higher-income groups as these people in the higher income group will be limited to a maximum of $20,000. So, in actual fact, people in the higher income group may only be enjoying a one, two, maybe three-year tax-free period. So they can deem it as being discriminating against them. So what in effect happens is that each couple gets back what they are actually paying. And we should not begrudge them their own money.

The Members for Thomson and Bukit Timah have also suggested that the special tax rebate should be backdated so that parents who had their third child two, maybe three years ago, will also be able to enjoy the benefit, if not in full, at least partially. Sir, I agree with them when they say that the setting of the deadline is arbitrary. Yes, there is a certain degree of arbitrariness in setting any deadline. We could have fixed it on 1st March 1987, the date on which our First Deputy Prime Minister announced the new three-child policy. So the date of 1st January 1987 was therefore chosen more for administrative convenience, a difference of two months. What we have to recognize is that incentives are to encourage new births. It is therefore appropriate for such incentives to apply to only new births that were delivered in 1987 and subsequent years.

Sir, to back-date the special rebate to the past few years would, in fact, set a very dangerous precedent. It could be applied to many other measures, much to the detriment of Singaporeans. So I would like to caution against it. For example, there is another population issue that we all know about because this is widely discussed. And that is the car population. The Minister for Communications and Information has always been warning about unrestrained growth in our car population. Should we, if the Minister should decide it and decide that it is necessary to increase the various taxes in the future, also use this same argument to say that "all cars in Singapore that are already existing should also pay the incremental tax because the issue has been widely discussed before?" I think that is a dangerous precedent and I would be the first to disagree with it, if it applies to the car population. Just as all our Members here would also disagree. Sir, I believe that all those parents who proceeded to have their third child in the last two, three years, did so because they wanted another child, and that is, in spite of our "Stop-at-Two" policy prevailing at that time. They have enjoyed the pleasure of watching the baby grow up, toddling around and I think they should not let this joy be spoilt by dwelling on what they have missed.

Sir, the Member for Yuhua also asked about non-citizens who are married to citizens and who have agreed to undergo sterilization. She asked whether that could be reviewed. Sir, this scheme is administered by the Ministry of Labour. The couples who were married under this scheme had offered to undergo sterilization in order to get married. So I will refer this issue to the Ministry of Labour.

The Member for Buona Vista asked about whether we could provide nurses in our schools, since we are already providing dental nurses. Sir, the provision of medical care for students, especially students who get sick in school, is best left to trained doctors. The schools normally adopt the practice of contacting the parents if the child is very ill so that the parent can come and bring the child home and bring the child to the doctor. Where there are accidents, the teacher then normally brings them directly to the polyclinic closest to the school or to the hospital's Accident and Emergency unit. So I feel that for such cases it is best to leave it to the trained professionals and having a nurse there in the school would not really help at all.

Sir, in terms of labelling of medicines, under the regulations relating to labelling of medicines, doctors have to label the actual generic name of the medicine or use the trade name. They are not allowed to use code names or whatever other indications. So under the regulations they have to use the proper names. So if they are using the proper medicines and they are using the proper names, there is no need in that case for them to be subjected to drug registration.

The Member for Telok Blangah asked about the subsidies for our hospitals. With your leave, Mr Chairman, statistics can be very misleading, especially in the hands of people who quote them out of context. I would like to inform Members that while the subsidy levels may have declined, the subsidy quantum has been increasing at a very, very rapid pace. Let me give a few figures. In 1980 the subsidy figure, if we just consider recurrent expenditure, that means if we do not consider the expenditure on facilities, which in most cases we really should be considering, if we just consider the subsidy on recurrent expenditure, the subsidy for the Ministry of Health came to $165 million. In 1986, this was $271 million. For this year, 1987, the subsidy after providing for the minor fee revisions that would be implemented next month, will still increase to $325 million. Sir, this is an increase of $54 million over last year, taking into consideration the fee increase. So I would not like to just look in terms of percentage and say, "Yes, it has gone up by 1%." But what is more important is the absolute quantum because if the subsidy level is increased just to take into consideration inflation, it means that the fee increases for 1987 would have to increase by not just the minor revisions, but by a significant enough sum to recover another maybe $50 million. So the subsidies for our hospitals, for all our medical care system, are very very significant. It has been going up at a very rapid pace. Over the last three years alone, in spite of the lack of inflation, or the lower inflation in Singapore, our subsidy in dollar quantum has been going up by 8% a year versus an inflation rate of 1% to 2%. So I dispute the Member's interpretation of what the subsidy is.

Dr Koh Lam Son: Mr Chairman, may I make a point of clarification?

The Chairman: Are you giving way?

Mr Yeo Cheow Tong resumed his seat.

The Chairman: Yes, Dr Koh.

Dr Koh Lam Son: Sir, I have not said that the quantum has not increased. In fact, in the earlier part of my speech I referred to the increase in the recurrent expenditure. What I am saying is that the share of the increase in the quantum has been reduced in terms of the contribution by the Government and the contribution by the users. The objective here is to reduce that share of the cost of health. That is the point I am making. I think it is quite right for the Ministry to aim to reduce this share of the increase in the quantum of subsidy and it appears to me that on the Table that was shown to us there was this objective to reduce the share on the side of the Government and to increase the share on the side of the users.

Mr Yeo Cheow Tong: Mr Chairman, I am glad he has clarified his stand and that he realizes that in terms of actual quantum it has increased. Sir, in terms of whether the fee increases take into account the affordability versus usage of the services, I think the principle of paying for usage is a good principle and we should try to adhere to it. But whilst adhering to the principle of payment for usage, we should always make sure that, for the low income group who have limited affordability, their affordability is taken into consideration. So both are important. In terms of the use of Medisave as to whether because the Medisave usage on the hospital basis is 40%, as to why 40% of the C-class patients are not using Medisave, Sir, I do not have the actual details here. But I think the data that we have on hand do not really give a breakdown in the usage by classes. They give the total usage in terms of the entire A to C ward accommodation.

Sir, the previous information I have seen suggest that for A class patients, in fact more of them are not using Medisave. The reason is more of them have company benefits and that those patients in the lower class wards really have a higher utilization of Medisave.

In terms of affordability, how do we assess affordability and ability to pay? I think one good measurement of affordability is the number of requests for waivers. If patients cannot afford, they do not pay up. Or knowing that there is a waiver system, they would come forward and inform the medical and social worker that they could not afford to pay up, and could we please help. We have been rather generous in that area, Sir. Let me give you some quick figures. Over the last five years, from 1982 to end of 1986, a total of 74,500 hospital bills were remitted and the amount remitted came to about $6.4 million. This represented about 2% of the total dollar amount of hospital bills raised. In terms of waivers, the waivers have been very small. But the important message behind this is that the low percentage of remission reflects that the hospital charges are within the means of most Singaporeans.

The Chairman: Order. It is 5.15 pm. Guillotine time. Dr Aline Wong, please withdraw your amendment. No speeches.

Dr Aline Wong: Sir, I really admire the patience of the Acting Minister for Health in having given us two lengthy lessons ranging from ---

The Chairman: Dr Wong, guillotine time. Are you withdrawing your amendment?

Dr Aline Wong: In view of the fact that the Ministry of Health really needs a budget of $462 million to start its work for the next year, I think I would withdraw my amendment. Amendment, by leave, withdrawn. The time allotted for Head P having expired, the following amendments were not proceeded with:- Mr Ng Kah Ting: Allowances (2) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PA-01-1410 of the Main Estimates. Staff Development (3) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PA-01-2510 of the Main Estimates. Mr Chiam See Tong: Administration (4) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PA-01 of the Main Estimates. Mr Chew Heng Ching: Administration (5) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PA-00 of the Main Estimates. Mr Ng Kah Ting: Minor Improvements for Health Services (6) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PA-01-8101 of the Development Estimates. Medisave Scheme (7) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PA-01-8103 of the Development Estimates. New Building for Department of Scientific Services and Blood Transfusion Services (8) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PA-01-8104 of the Development Estimates. Dr Ang Kok Peng: Mr Chew Heng Ching: Pharmaceutical Services (9) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PC-01-1210 of the Main Estimates. Dr Aline K. Wong: Singapore General Hospital (10) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PD-01-1210 of the Main Estimates. Dr Koh Lam Son: Financing of the National University Hospital (11) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PD-10 of the Main Estimates. Dr Arthur Beng Kian Lam: School of Nursing (12) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PD-11-1210 of the Main Estimates. Dr S. Vasoo: Hospital Services (13) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PD-00 of the Main Estimates. Mr Ng Kah Ting: Middle Road Hospital (14) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PD-09 of the Development Estimates. Development of Hospital Services (15) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PD-00-8100 of the Development Estimates. Dr Tan Cheng Bock: Primary Health Services (16) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PE-01-1210 of the Main Estimates. Dr S. Vasoo: Primary Health (17) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PE-01 of the Main Estimates. Dr Aline K. Wong: Dr Koh Lam Son: Maternal and Child Health Service (18) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PE-03-1210 of the Main Estimates. Dr Ang Kok Peng: Training and Health Education (19) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PE-05-1210 of the Main Estimates. Dr Ho Tat Kin: Encik Ibrahim Othman: Training and Health Education (20) That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PE-05 of the Main Estimates. The sum of $462,860,760 for Head P ordered to stand part of the Main Estimates. The sum of $64,487,300 for Head P ordered to stand part of the Development Estimates.

The Chairman: I shall now deal with the remaining heads of expenditure in respect of which no amendment stands on the Order Paper Supplement. In respect of the Main Estimates, they are Heads B, C, D, E, G, W and Y.

I propose to take those heads of expenditure en bloc.

Question, "That the sums stated for those heads of expenditure which appear in the last column of the Schedule of Estimated Expenditure under the Main Estimates on page 27 of Paper Cmd. 5 of 1987 stand part of the Main Estimates," put and agreed to.

The Chairman: In respect of the Development Estimates, they are Heads C and E.

I propose to take those heads of expenditure en bloc.

Question, "That the sums stated for those heads of expenditure which appear in the last column of the Schedule of Estimated Expenditure under the Development Estimates on page 28 of Paper Cmd. 5 of 1987 stand part of the Development Estimates," put and agreed to.

Question, "That the sum of $7,207,276,580 shall be supplied to the Government under the heads of expenditure for the public services shown in the Main Estimates for the financial year 1st April, 1987 to 31st March, 1988, contained in Paper Cmd. 5 of 1987," put and agreed to.

Question, "That the sum of $12,738,179,400 shall be supplied to the Government under the heads of expenditure for the public services shown in the Development Estimates for the financial year 1st April, 1987 to 31st March, 1988, contained in Paper Cmd. 5 of 1987," put and agreed to.

Resolutions to be reported.

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

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions.

First Resolution reported -

Question, "That the sum of $7,207,276,580 shall be supplied to the Government under the heads of expenditure for the public services shown in the Main Estimates for the financial year 1st April, 1987 to 31st March, 1988, contained in Paper Cmd. 5 of 1987."

Second Resolution reported -

Question, "That the sum of $12,738,179,400 shall be supplied to the Government under the heads of expenditure for the public services shown in the Development Estimates for the financial year 1st April, 1987 to 31st March, 1988, contained in Paper Cmd. 5 of 1987."

Dr Richard Hu Tsu Tau: Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions."

Question put, and agreed to.

Resolutions accordingly agreed to.