A NEW LAND UTILIZATION POLICY

5.24 pm.

Mr Heng Chiang Meng (Jalan Kayu): Sir, land has been, is and always will be the Achilles heel of Singapore. Because of the small area of Singapore, our economic survival and even our survival as a nation has always been a point of discussion. The small area of our land mass sets the parameters for many other factors affecting our nation's ability to survive - the population, water resources, economic activities, even social and recreational activities. However, Sir, the fact that we have had a very successful history since 1959 when we gained some form of control over our national destiny is proof that we have tackled this issue correctly.

The Land Acquisition Act and our policies regarding utilization of land are our very special brand of land reform. Unlike other countries where these have been sensitive and difficult issues, the people of Singapore have accepted our own unique way. For this, Sir, we must thank our Government leaders who have so painstakingly explained why the Government had to acquire land at low prices as well as our people who realize that the only way for Singapore to progress is for all Singaporeans to work in harmony and that income and wealth redistribution is an important ingredient in the maintenance of this harmony. But, Sir, given the fact that much of our infrastructural development has been completed, I think there is now a need to review our policy on land utilization.

In the context of today's Singapore and, more importantly, Vision 1999, perhaps the emphasis paid towards certain utilization of land in the past is no longer relevant today. What I want to say, Sir, can be briefly summarized into two broad categories: (1) the need for a new land utilization policy; and (2) the procedures of implementation which are just as important as the policy itself.

Need for a New Land Utilization Policy

Our current land policy appears to be governed mainly by demand due to (1) defence requirements; (2) housing, both private and public; (3) industry and commerce; (4) land transportation, such as those for MRT and roads; (5) various essentials necessary to serve the economic needs of Singapore, such as the Port of Singapore and the Changi Airport; (6) institutions for everyday living, such as schools and other educational facilities, hospitals, leisure and recreational facilities. While most of the demands are public sector in nature, there are some which are more like intra-private sector transfers. These are the land acquired by the Government and resold for private development.

Sir, let us examine some of these demands and see whether the demand for them can be justified in the context of our present situation as well as the future Singapore that we want.

Defence

Land for defence will never be enough. For defence training purposes, the more land, the more varied the terrain, the happier would be the Defence Ministry. If we accept this premise, then it is a matter of judgment to evaluate the amount of land that could be set aside for defence. How much must obviously be juggled with the other demands for land and not solely by how much the Ministry of Defence wants.

Housing

Eighty-five per cent of Singapore's population are now housed in public housing. There are also approximately 22,000 vacant HDB units. The HDB has said it will continue with its building programme, albeit at a slower pace. Taken together, Sir, these factors mean that the percentage of the population in public housing is likely to go up. How successful the new policy on population is going to be remains to be seen. However, based on available demographic factors which indicate a peaking of the population by the turn of the century, the demand for land for housing seems to be a declining one.

Industry and commerce

Our emphasis in this direction is in the services and high technological industries. Smoke-stacked heavy industries are apparently out. The demand for land by these new industries in the brave economic world of Singapore will be lesser than those favoured yesteryear such as shipyards and iron mills.

Hotels and other commercial needs may be the only exceptions in the more distant future as the tourist industry picks up. In this respect, may I specifically ask the Minister to reply to market allegations that the Government should be held responsible for Singapore's present hotel glut.

Land transportation

With the end of the road building programme in sight and the coming of the MRT, land demand for this requirement will diminish rapidly.

On intra-private sector transfers, my comment is whether the Govenment should be involved from now on.

What then, Sir, would be the major demand for land in Singapore in the foreseeable future? My guess is that it will come from the following areas: (1) land needed for social and recreational facilities; (2) land needed for hospitals, schools, libraries and the like.

Sir, these demands are no longer basic fundamental demands though there may be some who will disagree. Nevertheless, these are necessary to improve our quality of living index. However, I do not think that these demands will be as great as those for the fundamental needs of housing, transportation and industry. In the midst of this diminishing demand, there are also a number of factors which must surely influence the way land should be utilized in future and these are (1) a more affluent society and, hopefully, a growing tourist industry with increasing demands for better leisure and recreational facilities; (2) an aging population calling for redesigned housing facilities and amenities; (3) preservation and conservation of certain sites with historical links; (4) shortage of private land available for acquisition; (5) acquisition may have to be paid at current market values instead of the 1973 prices presently used. As more of Singapore population become property owners, the rationale for this policy is becoming less; and (6) Repeal of the Rent Control Act or at least amend some of its provisions. The reasons for this Act have faded into history.

From these comments, it can be noted that:

(1) A comprehensive policy for the utilization of land for Singapore in the coming years appears necessary at this juncture;

(2) Formulating such a policy will not be an easy task; and

(3) Whatever policy is framed, we must incorporate a built-in flexibility and ability to make early adjustments to changing market demands.

Sir, to summarize, I think that to develop such a land utilization policy, it is essential to air and study many aspects. What I believe is needed is a committee, perhaps not too large, but at the same time representative of as many related fields as possible, to bring forth the outlines of a policy conceived as necessary for Singapore in the 1990s and beyond.

Sir, I now come to Part II of my motion, and that is implementation procedures. I believe that our land policy has served us well, even though I think a comprehensive review is necessary at this stage. That the land policy has adversely affected many landlords is beyond dispute. It was necessary and in a way perhaps even beneficial to them as all could then share in a more prosperous and peaceful Singapore. Having said so, Sir, however, I think that its implementation could perhaps be better done so as to alleviate some of the adverse effects. In my amendments on the Budget estimates for the Ministry of Law during the Committee of Supply, I have already stated two examples. However, I must add that it is not that the officials in the relevant Ministries have some perverse delight in tormenting the affected persons but, Sir, it is more that in performing their duties to the best interest of their responsibilities, they sometimes do not see other conflicting interests, interests necessary for the progress of Singapore. For instance, in the example of land alienation, the tender system is sometimes a cold towel on the entrepreneurial initiative. But I agree that unless there is a better system, the tender system should stay. However, in order not to dampen initiative, I suggested a discount off the tender price for the originator of any proposal. I do hope that the relevant Ministry take this up. Again, in the example of land acquisition, I suggested that to help affected businesses to survive until the compensation award is given, perhaps a provisional award figure, not the provisional award itself, but a provisional figure could be given. This would help to keep the credit lines open, especially when the amount required to keep the business going may be lower than that provisional figure.

Sir, these are some examples of flexibility that will help those adversely affected by our land policy without affecting the policy itself. There are other examples but I do not suppose that this is the time nor the place to go into details.

Suffice to say, Sir, I wish that sometimes those responsible for the implementation of policies take a look from the other side. The view could be altogether different although we are in the same boat. Yet very often even those adversely affected can understand the need for the Government policies. But, Sir, what they cannot understand is why the implementation can sometimes be so inflexible even when it makes sense to be flexible. These are procedures devised by the departments concerned. If there is a will, procedures could be changed to suit the circumstances. In the final analysis, even the law could be changed if it is necessary to do so. I can only hope that in the review, Sir, if there is going to be one, the process of implementation would be given its due share of consideration.

The Minister for National Development (Mr S. Dhanabalan): Mr Deputy Speaker, Sir, there is not much that the Member has mentioned with which I can take issue. I agree with the broad thrust of his speech. We, of course, constantly review the land utilization policy and we do have a comprehensive land utilization plan. It is not as if the present land utilization policy is an ad hoc policy. There is a Master Plan which is regularly reviewed. And the Master Plan specifies for each plot of land the use and the density of development that can be allowed on that plot. In preparing the Master Plan which is constantly updated, planners here in Singapore face considerable constraints because of our very limited land resources. Nearly 50% of the Island is already built up. Much of the rest of the land may not be available for housing or industry because they are within water catchment areas. I was interested to note that in the various uses that the Member listed, he had left out this one very important use, that is, water catchment which takes up a large part of the land in Singapore.

Sufficient lands have to be reserved for defence purposes, airports and major utility installations, as the Member himself mentioned. Planners, therefore, have to balance competing demands for land in the overall interest of the community and optimize and intensify land use. Proper scrutiny and control of land use, careful siting of incompatible land uses and stringent controls on pollutive land uses are necessary to ensure that all our needs are catered for. Planners constantly review population trends, population shifts, economic trends and so on, and monitor these changes and make the necessary adjustments in the Master Plan. For example, although the rate of population increase has gone down and we are trying to reverse it, it has not and will not have an immediate impact on the land for housing because it will change the size of the family but it does not change the number of homes that will be required to house the population. Whether you have a three-child family or a four-child or two-child family, you still probably require a 4- or 5-room flat. So these changes will not have an immediate impact but planners do constantly, as I say, monitor these changes. Another example which the Member mentioned is the aging of the population as the population rate or growth decreases and, of course, an aging population requires different kinds of facilities. Similarly, the pattern of industrial development has changed. Demand for industries requiring large land areas, such as shipbuilding and heavy industries has decreased while demand for industries which are high-technology industries, such as those in the Science Park, has increased. I myself think that it is very fortunate that Singapore was not successful in being able to promote a steel mill. Despite many efforts in the past during the early days of our industrial development, we failed. And I think looking back on it now, we can be thankful that we failed, otherwise we would have an industry which would occupy a lot of land and which would probably be very pollutive.

We have tried to increase the amount of land available in Singapore through land reclamation. The extensive land reclamation that we have done so far has increased to some extent the degree of flexibility that we have. Marina South, for example, which was dealt with in a Question for Oral Answer this morning, has given us space to expand the commercial and business area of the City. As a result of this reclamation, we have a bonus in that we can afford to now conserve parts of the old city. Without the reclamation, perhaps we could not afford to do what we are doing in Tanjong Pagar or preserve parts of Chinatown or Little India or even Geylang. But there is a limit to land reclamation. It is increasingly costly because the shallows suitable for reclamation are running out and future reclamations will require more filling materials which are costly and scarce.

Planners adopt a very pragmatic approach to land utilization based on changing needs and requirements of the population. Planners have to ensure that all our present and future needs are met and carefully balanced so that there is a place for present as well as future generations to live, work, play and enjoy a comfortable and pleasant environment. But they can only lay down broad parameters and identify uses in broad terms. And having laid broad guidelines, especially for commercial purposes, they must leave it to the market forces to determine how exactly the land should be utilized and when it should be utilized.

The Member made a point that there are allegations that the Government, in fact, brought into being the hotel glut. This is not the first time that this allegation has been made both in the House as well as outside. Sir, the private sector is no less prone to making mistakes than the Government. Even in cities where commercial hotel or any other kind of commercial development is left entirely to the private sector, you do have these booms and busts. New York, Houston, Miami - they have all gone through this. Few hotels are built, they make money, everybody jumps in. Many hotels are built, the tourists do not come in as projected, hotels lie empty for years, and it takes some time for the growth in the tourist industry to catch up with the glut of hotel rooms.

The Government could not have taken a position before the event and said that only so much of land could be made available for hotels. Nobody asks the private sector to bid for these lands. Nobody asks them to pay the kind of prices that they paid. Nobody asks them to build hotels. They could have very well not bid for these plots of land. But suppose the Government had taken the view sometime in the late 1970s that no more land would be made available for hotels because the Government has projected that tourist growth would not be sufficient to absorb more hotel rooms, what would the Government have faced? I think there would have been very serious accusations against the Government - that it was favouring the existing hotel owners, that in some way it was trying to protect the interest of owners of Mandarin, Shangri-la, Hilton or whatever, because people were prepared to invest their own money and take a risk with their own money and the Government was telling them, "Look, don't take the risk because there will be no tourists coming to occupy your hotel rooms." I think we would have been under very severe attack. So we adopted a policy of allowing the private sector to make the decision. Well, they made the decision. Many of them have found that the timing was wrong. But the tourist industry will grow and hotels in time will be occupied. Of course, many of the investors would have lost quite a lot of money, in terms of profit forgone or interest costs accumulating which they cannot service. But this is an area which the Government cannot determine. It made available the land. It left it to the private sector to decide. And so it must be with other types of commercial developments. Even today we are still receiving applications from hotels which want to expand. In today's situation, with such a glut, are we to tell them that they should not invest their moneys to expand their hotels? Who are we to second-judge their judgment of the situation? If they are prepared to risk their money, I think we should allow them to risk their money.

So we can lay broad guidelines in a large part of our land utilization where it covers commercial and industrial uses. We will have to leave the private sector to make the final judgment as to whether they want to invest the money.

The Member also mentioned about the need to look again at the acquisition policies, particularly acquisition at current market values instead of pegging them at the 1973 values. And also the need to look again at the Rent Control Act. These matters are under consideration and I think at some point my colleague, the Minister for Law, under whose purview these matters come, will be able to make a policy statement.

On the committee on land utilization, I think the general point behind this idea that we should tap the knowledge, expertise and interest in the private sector in determining land utilization is taken. I do not think we should pretend that all the knowledge on land utilization rests or is only found within the Government, within the Planning Office. I will certainly, if it is not already being done, tell the planners that to the extent that it is possible, we should tap the knowledge and expertise in the private sector.

The Member also spoke about the implementation of the land acquisition policy. He has suggested again that the originator of an idea should be given some sort of special consideration and given a 20% discount. I do not know whether there is a real case in point which the Member would like to bring to my attention later where somebody's very bright idea has been taken by the Government and a public tender has been called. If somebody has an idea to develop, let us say, a recreational complex, the fact that the piece of land is let out for a recreational complex without specifying in detail what kinds of recreational facilities should be provided on that plot, does not mean that we have stolen an idea. Different people may have different ideas as to what kind of facilities should be provided. I think the present system is to allow them to make a bid based on their own ideas and the price that they will pay for the land. It is a novel suggestion that originators of ideas should be given a 20% discount. But I must say that it is unlikely to be accepted.

The other point that the Member made is about giving some sort of provisional award so that the businesses can continue. I think it is a good point especially when it takes a long time.

Mr Heng Chiang Meng: Sir, may I have a point of clarification?

Mr Dhanabalan: Maybe I will finish first.

Mr Deputy Speaker: The Minister is not giving way.

Mr Heng Chiang Meng: It is not the award. It is the figure itself.

Mr Dhanabalan: All right. I thought he was talking of the cash flow situation. I will have to look into what the problems are. I cannot react immediately. As I understand it, a figure is fixed. And if the owner of the land wants to challenge the figure, then of course he goes to a body for arbitration. Pending the final award, nothing is given or no figure is mentioned. But I do not know what problems there will be in giving a provisional award. I assume a provisional award will then enable the owner of the land to say that he expects a certain definite amount which can then be useful for him to raise moneys for his business. We will look into that.

Regarding flexibility in implementation, I agree that we should be flexible. But where is the line to be drawn between flexibility and inconsistency? Acquiring land is a very serious matter and we cannot allow too much flexibility. Because if we do allow too much flexibility, then it will appear that we are arbitrary and inconsistent in the way that we go about making awards or dealing with lands acquired for various purposes. If there are particular areas where flexibility can be exercised without in any way affecting the fundamental principles of our land acquisition policy, I am prepared to look into it.

Mr Heng Chiang Meng: May I have a point of clarification?

Mr Deputy Speaker: No, Mr Heng, you can only speak once on this motion.

Question put, and agreed to.

Resolved,

That Parliament do now adjourn.

Adjourned accordingly at Eight Minutes to Six o'clock pm. Table - RESERVISTS IN-CAMP TRAINING DEFERMENT CASES 1984-1986 (Cols. 1141 - 1142)