MAIN AND DEVELOPMENT ESTIMATES OF SINGAPORE FOR THE FINANCIAL YEAR 1ST APRIL, 1988 TO 31ST MARCH, 1989

[Mr Deputy Speaker in the Chair]

Order read for consideration in Committee of Supply [1st Allotted Day]. 11.04 am

[Mr Deputy Speaker in the Chair]

The Chairman: Main and Development Estimates of Singapore for the financial year 1st April, 1988 to 31st March, 1989, contained in Paper Cmd. 5 of 1988. For convenience, I shall take the totals for each head of expenditure in the Main Estimates and the Development Estimates as they appear in the last columns of the schedules of Estimated Expenditure under the Main Estimates and under the Development Estimates on pages 49 and 50 respectively, of Paper Cmd. 5 of 1988.

In addition to the "guillotine" times which have been fixed under Standing Orders 87(7)(a) and 88(5) for the heads of expenditure in the Main and Development Estimates, under Standing Order 87(7)(b) times have also been allocated for each amendment to the Estimates. These times will be announced by the Chair as we go along from head to head.

Even with the addition of 3(r) days to the seven days provided for under the Standing Orders for the Committee of Supply on the Estimates, the time available falls short of the times Members have indicated would be required for discussion of their amendments.

In view of the time constraints, hon. Members will endeavour to be short and precise in their speeches. Although the Standing Orders allow Members to address the Committee for up to 10 minutes at any one time, in speaking on their amendments Members are asked to take into account the time that would be needed by the Front Bench to reply.

Members on the Front Bench are also urged to keep their replies precise so as to allow as many Backbenchers as possible to speak on their amendments within the guillotine times.

A Member who has not given notice of an amendment cannot speak on it until the Members whose names appear below the amendment have spoken and the Minister concerned has replied, provided that there is still time left for the amendment and the subject he wishes to speak on is relevant to the matters raised.

A Member who has indicated that he wishes to speak on a matter affecting policy but speaks on a detail of expenditure will be ruled out of order.

Head B -

The sum of $7,726,850 for Head B ordered to stand part of the Main Estimates.

The sum of $74,600 for Head B ordered to stand part of the Development Estimates.

Head C -

The sum of $6,218,050 for Head C ordered to stand part of the Main Estimates.

The sum of $507,400 for Head C ordered to stand part of the Development Estimates.

Head D -

The sum of $373,800 for Head D ordered to stand part of the Main Estimates.

Head E -

The sum of $14,390,900 for Head E ordered to stand part of the Main Estimates.

The sum of $17,884,500 for Head E ordered to stand part of the Development Estimates.

Head F -

The sum of $6,678,800 for Head F ordered to stand part of the Main Estimates.

Head G -

The sum of $35,750 for Head G ordered to stand part of the Main Estimates.

Head H -

The sum of $14,002,800 for Head H ordered to stand part of the Main Estimates.

Head K -

The Chairman: The guillotine time for this amendment is 19 minutes.

Mr S. Chandra Das (Chong Boon): Sir, I beg to move,

That the total sum to be allocated for Head K of the Main Estimates be reduced by $100.

Sir, I am glad to note that the Defence budget is still within 6% of our gross domestic product. However, I would like to point out that we are getting very close to the 6% and it is incumbent on the Ministry to make sure that every dollar of expenditure counts. However, I am equally confident that the Ministry of Defence will achieve what the Minister once stated in this House, and I quote:

'We are talking about the competence of the SAF as one fighting force, making sure that we spend the money in the right areas, making sure that we buy the correct equipment, and having bought the equipment, to maintain it, to see that it is in running order, to have the training to use it properly, to define the doctrines to employ them to the greatest effect, and to have the intelligence to apply the devastating blow in war which will make our present investments pay off.'

Sir, with these preliminary remarks, I would like to confine my comments on the profile of the Armed Forces. Sir, national service and the activities of the Armed Forces are becoming an integral part in the lives of every Singaporean. I am convinced, Sir, that much more can be done to make it become a rallying point for a multi-racial effort, in fact, in total nation building. I would urge the Ministry of Defence to have more frequent open houses, visits to installations and bases, demonstrations of weaponry, jungle survival, etc, so that more Singaporeans, not only grassroots leaders, can become more informed about the activities of the Singapore Armed Forces.

Here, Sir, I would like to draw the attention of the Minister to the various passing-out parades held by the Ministry of Defence. Unfortunately, Sir, participation at these passing-out parades is confined to a selected few - parents, invited guests and VIPs. I have been privileged to witness a few of these passing-out parades and I must say I was greatly impressed on each occasion. One felt a sense of pride and admiration for the young officers in the Armed Forces.

Sir, my question to the Minister is: why confine such activities to only a privileged few? In fact, I would strongly urge the Minister to make at least one major passing-out parade a national event, possibly at the Padang. Televise the programme, if necessary, so that all Singaporeans can participate and take pride in such an event. It will also act as an additional boost to our young officers. This, in fact, could be institutionalized as an event in our national calendar. I hope the Minister will give some consideration to this recommendation from the GPC on Defence and Foreign Affairs.

Sir, again on the profile of the Armed Forces, I would like to refer to the role of the Navy. When the Government Parliamentary Committee on Defence, its members and resource persons paid a visit to the Navy earlier this year, we commented about the low profile of the Navy in connection with the other two wings of the Forces, ie, the Army and the Air Force. I have observed, Sir, the Army has a few Generals and I believe the Air Force has also acquired a General recently but the poor Navy, unfortunately, has no General and not even a Rear-Admiral. Maybe he is left in the rear. But I am not very sure. But I am not for a moment suggesting that you give quick promotion in the Navy. But from our point of view, the Navy seems to be treated like a poor third cousin.

Sir, in most countries the Navy is a premier service. And for an island State like ours, its role should be no less. The Minister himself has mentioned about the important role of the Navy in looking after seaward defence and the maintenance of sea lanes of communication. Maybe the Minister can correct our perception that maybe they were wrong perceptions about the Navy.

Sir, now I would like to turn on to the question of defence industries in Singapore. I raise this question on defence industries for two main reasons. Firstly, we always talk about Total Defence and in this connection, I would like to ask the Minister as to the capability of our defence industries, more importantly, do we have the technological capability? In the case of defence industries, Sir, are we trying to achieve self-sufficiency? Are the defence industries geared for domestic requirements or do they have an export capability as well? If they have an export capability, have we been successful in exporting to other countries? Maybe the Minister can inform this House of the state of our defence industries.

Sir, my second point refers to the question of defence industries' companies offering their services and wares in the general market place. To put it more strongly, encroachment of defence-related companies in the private sector. I have heard of complaints from private businessmen about one defence-related company selling personal computers in competition with other local companies. And another defence-related company vying for jobs in the construction sector, I believe building primary and secondary schools. Sir, I believe there would be no objections or complaints if our defence-related companies handle sophisticated big frame computers for defence industries or build military installations or barracks. But to sell table-top personal computers and build primary and secondary schools in the name of defence interests is a little hard to accept. Maybe the Minister has some answers for this.

Sir, my third topic really relates to bilateral and multilateral defence cooperation. I would like to ask the Minister for Defence on the importance of the Five Power Defence Arrangement and the Integrated Air Defence System with regard to our security and defence. Both these defence arrangements were established in 1971 together with Australia, New Zealand, Malaysia and United Kingdom. Is this arrangement still relevant in today's context or do we see changes in the role of the Five Power Defence Arrangement and the Integrated Air Defence System?

My second comment relates to Asean. Sir, although Asean is not a military alliance, I believe we have on-going bilateral and multilateral military relations with our friends. I think it is extremely important to promote bilateral as well as multilateral military cooperation among our Asean friends. This will help to foster better understanding among the Armed Forces in Asean and promote Asean political identity. Cooperation in this field will have both short-term as well as long-term benefits. In this respect, I would call for greater - what one might describe as - military diplomacy within Asean. Currently, contacts between political leaders in Asean is an on-going process and this can be easily extended to the military leadership as well. Contacts both at political as well as military level will go a long way to ensure peace, prosperity and stability in Asean.

The Chairman: General Lee, 10 minutes left.

The Second Minister for Defence (Services) (BG Lee Hsien Loong): Mr Chairman, Sir, the Member for Chong Boon's points have one common theme, and that is, the non-military aspects of Total Defence - the public profile of the SAF, the image of the Navy, diplomacy, multilateral and bilateral relations with friendly Armed Forces and countries, and also economic defence, our defence industries.

Let me take his points in turn. First, the profile of the Armed Forces. The suggestion that the Armed Forces should hold a good number of activities in the public eye is well taken. We are not a parade ground Army, but we are an Army whose reputation must be well earned and well known. And, therefore, the SAF and what it symbolizes can be a rallying point for the nation, for nation building. Those are our sons, our pride.

We have conducted a good number of activities in the public eye. For example, this year is the centenary of the Singapore Artillery, an occasion of some significance and some personal pride to me, maybe because I happen to be an artillery man and there are many of us in Singapore. We held a parade on the occasion of Artillery Day, 22nd February. We had an open house; the public was invited. We had a ceremonial firing of 25-pounder guns at East Coast Park. And this is not only for the Artillery to enjoy some sentimental pleasure, but is also a rallying point for the nation, to know something about the growth of the SAF. As the occasions present themselves, we will organize more such activities on the Padang, in the National Stadium, on Armed Forces Day. Some will be troopings of the colour, some will be commissioning parades. I do not think we can do it all the time because, otherwise, the SAF would be nothing more than a parade ground Army, but from time to time the SAF must keep in the public eye and rightfully so.

Secondly, the question of multilateral and bilateral cooperation - again, of importance to the SAF because we are not just a war-time Armed Force, but have a peacetime responsibility for maintaining diplomacy and also deterrence. We must be known. There must be no miscalculation, no misunderstanding, and at the same time there must be the closest possible links with our neighbours. It is not just a formality of exchanging visits between Chiefs of Services or Chiefs of Armed Forces, although that takes place all the time. It is also getting to work with one another, getting to know one another, both organizationally and at a personal level, so that between other CGS and the Malaysian Chief of Armed Forces, or the Indonesian Commander-in-Chief of ABRI, should any issue arise, a personal telephone call can clear any misunderstandings and nip any problems in the bud.

We have paid a lot of attention to this. We have bilateral exercises with practically all our Asean neighbours - with the Indonesians, with the Malaysians, with the Thais, with the Bruneians, not so often with the Filipinos but there will be. Air exercises, naval exercises, and with some of them also land exercises. As our relations expand, there will be more.

In multilateral terms, we have the Five Power Defence Arrangement and IADS (Integrated Air Defence System). It is a treaty linking Australia, New Zealand, Britain, Singapore and Malaysia, which obligates the treaty partners to consult one another should any threat arise to Singapore or Malaysia. It is no longer a new arrangement. It has existed since the early 1970s. But it remains a very useful one - useful at many levels. We take it seriously. Symbolically, because it commits powers outside the region to an interest within the region. As a matter of deterrence because there are real forces involved. The Australians have had two squadrons of Mirages deployed at Butterworth for many years. The Mirages are withdrawing in May, but they will be replaced by F18 Hornets, deploying periodically and being on station in Butterworth perhaps 16 weeks a year, a substantial presence. And the Commander of IADS is an Australian. So any potential threat to the region must calculate not on to dealing with the Singapore Armed Forces or the Malaysian Armed Forces or Air Force, but with the Australians and with whom the Australians are friends with. And that is a very useful imponderable which contributes to the stability of the region.

Thirdly, in terms of diplomacy because IADS also gives us an opportunity for contacts, for exchanges, for working under a common umbrella, and for establishing links in a non-sensitive way which might be harder to do if we were to confine ourselves strictly to bilateral relations. We have found it constructive. I think the Malaysian Armed Forces have also found it constructive, and I hope it will continue.

Finally, it is useful from the point of view of training, because the exercises which we conduct are realistic, practical exercises. They allow us to try out procedures, they enable us to work out a common language for interaction, and they give us confidence that what we exercise we can, in fact, carry out should the need ever arise. So the Member for Chong Boon can be assured we pay a lot of attention to this. It goes beyond exchanges of visits and golf games, although there is a lot of that too, which will also continue.

Lastly, the question of the defence industries. He has asked: do we have self-sufficiency, what is our objective? We are a small nation. I do not think it is feasible for us to go for self-sufficiency. What we need is a technical and industrial back-up which will enable the SAF to be sustained, supported and backed up in an operation, so that it does not stand alone. We cannot invent and design and build our own aeroplanes. But we must be able to maintain them, to make modifications to them from time to time, to understand how they function so that when we want to buy some new feature to fit on to an aircraft, we are knowledgeable and will not be taken for a ride. We cannot make everything which the Army uses, whether helmets, radio sets, guns, and missiles. But we can manufacture the basics - bullets, some artillery shells, some small arms, even a 155 Howitzer gun - so that we have a basic capability. If our supplies should be interrupted, we can sustain our position and produce what the SAF needs. Similarly, we cannot make everything which goes into a ship. But we can make the hulls, we can maintain the ship, and we will build up the Navy into a formidable force, the reservations of the MP notwithstanding.

If we have do this, we have better do it in the most efficient and most cost-effective way. We cannot afford to carry a huge incubus on our shoulders. Because if you run it inefficiently, it is a deep black hole. You pour in a lot of money and you get back a fraction of what you could get by buying things overseas. Therefore, we have to run the defence industries highly efficiently, almost ruthlessly. It means we sell overseas where we can. It means we must use the capacity we have to do even non-defence business. It means we must from time to time even operate in the private sector. It makes sense. If we have to have a construction company, because there are some defence installations which are sensitive and can only be built by a closed company, and we must set up a company to do it ourselves and the company has spare capacity, is it not better for the nation that this spare capacity be used to construct, as the Member says, primary and secondary schools than for it to lie idle and another set of resources to be engaged to construct primary and secondary schools? Mind you, I do not believe we construct primary and secondary schools any more; but just for the sake of example, if we needed to, we would do so.

Similarly, it makes no sense for us to go into the business of selling Apple computers. But if we must have a software house to develop defence software, is it not better that its capability is also used to provide services even to the private sector? And let the private sector know this and move into other areas of economic endeavour where there is no defence need and there will be division of labour?

The Chairman: Order. It is guillotine time on this amendment. Mr Das, can you withdraw your amendment?

Mr Chandra Das: Sir, I would like to thank the Minister for the clarification although I would not accept all his answers, particularly on the encroachment in the private sector. I was also not recommending that the SAF becomes ---

The Chairman: Mr Das, no more speeches. Please withdraw your amendment?

Mr S. Chandra Das: I withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), guillotine time, seven minutes. Mr Leong.

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

That the sum to be allocated for Head K be reduced by $10 in respect of Code KA 2000 of the Main Estimates.

In moving this amendment, I wish to gather some information from the Minister regarding open mobilization. Since the start of open mobilization a few years ago, it has become better accepted by the people. We understand that our concept of national defence is based on a reserve force. Therefore, it is critical to have in place a fast and efficient method of mobilizing our reserve personnel and civil resources. I believe that the open mobilization of reservist personnel has been quite well established and quite well tested. But the mobilization of civil resources is something which is much more complicated, more complex and therefore harder to achieve.

I would like to ask the Minister what is the progress made to date and what are the major problems encountered. If I may elaborate, I would like to ask the Minister whether he could address the following areas. First, have there been any further improvements in the percentage response rate of reservists and civil resources being activated? Second, what are the major problems and obstacles experienced by Mindef while conducting these exercises? Third, have any measures been contemplated or to be introduced to improve the open mobilization exercises, particularly in improving the percentage response rate and the speed of response?

BG Lee Hsien Loong: Sir, we have made a great deal of progress since the first open mobilization exercise was held in July 1985. In the 2(r) years since then, we have had 13 exercises, increasing sizes of units, increasing the complexity of activities, from reporting to equipping, to going out, loading up with ammunition full-scale into an exercise, cold off-the-street into battle. The system has worked well. We are now confident that what we wanted could be done. The responses have been very good, well over 90% of the reservists have been able to come back on time. And the problems we have discovered have all been solvable. There have been no fundamental difficulties.

Similarly with civil resources. We have held 19 exercises since March 1986, covering a wide range - aircraft, vehicles, even buildings, workshops, seacraft. The response has been encouraging and for that we are grateful to the owners and the companies who must sometimes have been considerably inconvenienced by our exercises.

Of course, it would be uncharacteristic of us if at that point we said all was well and sat down. Since all is going well, things will have to be made better. On mobilization of reservists in particular, we are planning some changes to the law, to do two things. One, to bring down the response time. Right now, once we have broadcast the notice of mobilization, a reservist is presumed after 12 hours to know about it. So once it is put on the television screen, we give him 12 hours before we presume in law that he knows and ignorance is no excuse. It has been shown that it does not take 12 hours before the news spreads. So we are going to reducing this legal period to 6 hours, and correspondingly trim the mobilization times.

Secondly, we are going to amend the law to make much greater use of telecommunications. The existing arrangement by law to serve a mobilization notice on a reservist - this is for silent mobilization, not an open one - requires a piece of paper to be delivered to his which he or his family must sign. Of if nobody is at home, the paper must be pasted on to his door and a notice must be gummed over his keyhole so that he cannot say, "I came home and didn't see the notice." He put his key through the paper. It is designed for a bygone age. Every household in Singapore has a telephone. Every other reservist in Singapore carries a beeper, pager. We had better use this telephone and pager network to get much faster response out of our reservists and upgrade our operational readiness. We have tried it. It works. The legal framework will be put in place this year.

Thirdly, for civil resource mobilization, we have done that only using documents, silent measures. We have not done the way we have recalled people with a flashing green man on the television screen. I think we should. If you can recall a troop unit, there is no reason why you should not recall a fleet of trucks by flashing, perhaps a little green truck on the television screen. When people see it, they will understand and report back faster and more expeditiously. That too will require a change of law and those amendments will be put through Parliament this year.

That is what we have in mind, Mr Deputy Speaker, Sir.

Mr Leong Horn Kee: Sir, I thank the Minister for the very detailed answer. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (3), four minutes. Encik Wan Hussin.

Encik Wan Hussin bin Hj Zoohri (Kampong Ubi): Sir, I beg to move,

That the sum to be allocated for Head K be reduced by $10 in respect of Code KA 2440 of the Main Estimates.

Sir, I note that the estimates for the National Day celebration expenditure is on the increase. I take it that this year's celebration promises us an even more spectacular event than before. I remember that the celebration at the National Stadium gave us a spectacular climax of light and sound presentation against the siloheutte of the descending night. And last year, the celebration ended with a mass participation of singing and dancing by the spectators. All these were aimed at involving community participation.

However, I would like to make some additional observations. In my view, whilst we are celebrating National Day, we should also reinforce the total defence concept. The military component and, in part, the social component have been incorporated in previous celebrations. But I observe that the civil defence component has not been given due emphasis. And also the economic and psychological components. These may be difficult to present. But I would like to offer my suggestions. In this respect, I suggest that the current expertise and achievements of our civil defence force be presented as an item by itself, to bring home the message of constant preparedness to our citizens.

As for economic and psychological defence, perhaps these could be enacted through a pantomime. The Ministry of Defence could well seek the assistance of the Cultural Division of the Ministry of Community Development in identifying talented people who could be commissioned for this presentation. I am sure that the aural and the visual effects of such a pantomime presentation, if creatively presented, could bring home the message to the spectators the equal importance of the non-military aspect of our total defence. This will help raise the morale of our citizen in the defence of our country.

BG Lee Hsien Loong: Sir, I take the points from the Member for Kampong Ubi. The National Day Parade is a function not just for the SAF, not just for the participants of the parade, not even just for the audience at the parade, but it is a national occasion. Because everybody turns on his television set watches the pageant and participates, particularly if we have a sing song session and the mood is created. I take the Member's points on projecting the message of total defence; civil defence, by trying to fit some items for them by themselves; economic and psychological defence, by putting together what he called a pantomime, effectively some sort of a pageant, a show. We have tried to do that and we will continue to look for ideas to do it better.

When it comes to economic and psychologial defence, the most effective way of putting across the message is the indirect one. It is not only watching someone saying that he is patriotic and loves his country which has the greatest effect. It is participating in a good parade, in a good emotional experience which strengthens our sense of togetherness, our feelings that we are Singaporeans, one nation. That is what we will try to create. It is a problem of rising expectations. We had a good parade in 1986. People asked for a better one in 1987. We satisfied that. Now the request is for an even more spectacular show in 1988. I think that is right and we will try and fulfil even your current expectations and if we can, even your expectations for the next two and three years to come.

I do hope that Members through their grassroots organizations will help to prepare a large number of Singaporeans to take part in this parade, so that when the moment comes it is not cold but it is warm, it is vibrant and it is Singapore. Make sure the lion roars loudly.

Encik Wan Hussin bin Hj Zoohri: Sir, thank you for the enouraging reply. I withdraw the amendment.

Amendment, by leave, withdrawn.

The sum of $2,424,338,460 for Head K ordered to stand part of the Main Estimates.

The sum of $200,000,000 for Head K ordered to stand part of the Development Estimates.

Head O -

Mr Chandra Das: Sir, I beg to move,

That the total sum to be allocated for Head O of the Main Estimates be reduced by $100.

Sir, Singapore being a small country, I think it is understandable that we are unable to have diplomatic representation in most countries. Sir, I believe our problem is not really money but getting suitable people to man our diplomatic mission. I can fully understand the plight of the Ministry of Foreign Affairs in getting suitable people to man our existing diplomatic posts, let alone open new missions. The post of Head of Mission in London is a case in point. Sir, notwithstanding the above, the Government Parliamentary Committee on Foreign Affairs and Defence and its resource panel members raised the question of appointment of Roving Ambassadors with the Ministry of Foreign Affairs at its meeting held on 3rd December 1987. We suggested the appointment of more roving ambassadors to be considered so as to widen the pool of potential ambassadors. The Ministry of Foreign Affairs has some experience with this arrangement, as in the case of our representation in Papua New Guinea and in Latin America. Sir, the GPC strongly urges the Minister for Foreign Affairs to appoint more roving ambassadors as this will certainly widen our worldwide coverage and at the same time get more suitable people involved in foreign service. In this context, Sir, I am pleased to inform the Minister that the GPC is prepared to help the Minister identify suitable people, if requested. Sir, I would like to ask the Minister for Foreign Affairs whether further thought has been given to this proposal and whether there are any immediate plans to appoint more roving ambassadors.

Sir, I move on to another area which is the strengthening of ties and relations with non-traditional countries. In moving this amendment, the GPC Members and its resource persons are calling for further strengthening of ties, both economically and diplomatically, with non-traditional partners. The countries we have in mind are the Soviet Union, Eastern Europe, Pacific Islands and some selected countries in Africa. Sir, although we have diplomatic relations currently with some or many of them, we believe more can be done in this area. This is all the more pressing because of recent events, particularly the proposed withdrawal of GSP which has cast some doubts on the wisdom if not the validity of our over emphasis on the so-called free enterprise economies. Our present diplomatic representation overseas so far has served us well. But on closer examination we seem to think that it is rather lop-sided. As a result, we believe we are unnecessarily reducing our foreign policy options and economic opportunities.

Sir, in this context, our policy stance with respect to Kampuchea raises some question. One recurring question is, have we locked ourselves in a position where we are in a no-win situation? Have we reduced our room for manoeuving or limited our degree of freedom? Sir, although fundamental political issues like territorial integrity, sovereignty, are important to us to uphold, there is very little Singapore can do politically to influence major events. Maybe as a small country with a limited role, we should take a strategic view of things. A military strategist once said, "There are no permanent allies but only permanent interests." I would like to hear from the Minister his views regarding opening up relations with our non-traditional partners.

Sir, the Government Parliamentary Committee on Foreign Affairs and Defence at its meeting also raised the question of a Foreign Service Commission for recruit- ment of Foreign Service officers in the same meeting held on 3rd December 1987. In making this proposal we felt that the needs of the Foreign Service are rather special and that the general recruitment currently practised under the auspices of the Public Service Commission is not the most appropriate for the Foreign Service. Sir, an independent Foreign Service Commission would operate like, I believe, the Legal Service Commission and the Public Service Commission can have its representative so as to ensure that proper rules and procedures are followed and leaving the Foreign Service people to really recruit the right type of people required in the Service.

Further, if a separate Foreign Service Commission can be established, we also believe that there will be only one Service in the Ministry of Foreign Affairs. This will eliminate the need to have a service within the Service, as I am told presently is the case. The present system has also caused unhappiness among existing Foreign Service officers.

Sir, I would like the Minister to let us know whether any progress has been made towards the establishment of an independent Foreign Service Commission.

Dr Lau Teik Soon (Serangoon Gardens): Sir, our basic foreign policy has served our national interest very well and will continue to do so. However, I feel that it is time for us to review certain aspects of our foreign policy, particularly our support for the US strategic interest and our strained relations with the Soviet Union and Vietnam.

Sir, Singapore has been identified as a strong supporter of the US interests in the Asia-Pacific region. At the same time our relations with the Soviet Union and Hanoi continue to be strained. I ask, Sir, is it in our long-term national interest to continue with this state of affairs, especially when the United States is not appreciative of the support we give to them? Is it in our long term interest to continue the strained relations with the Soviet Union and Vietnam, which may result in serious political and economic costs for us?

Sir, we view the US military presence in the Asia-Pacific as a positive factor for peace and security. But it seems to me, as I said just now, that the United States is not appreciative of this. On the contrary, the Reagan Administration and the US Congress in my view seek to harm our economic interests and interfere with our internal affairs. I cite such examples as the US decision to delete Singapore from the GSP list, the Congress criticisms of our domestic policies, including the detention of those involved in the Marxist conspiracy and the curtailment of the circulation of certain newspapers and journals. Other aspects of US policy, Sir, should concern us. The US is improving its relations with the Soviet Union. More significantly, the US seems to be moving towards normalization of relations with Hanoi, and the United States is lukewarm in its support for the ASEAN position on the Cambodian issue. The recent statement by the outgoing Thai Ambassador to the United States, which was reported in the recent Sunday Times, made the following points: that the US is no longer interested in the security of Southeast Asia as they have done in the past, that the United States has not done enough to help solve the Cambodian crisis and that the United States is moving towards the recognition of Vietnam.'

To the United States, the key problem with Vietnam is not the Cambodian issue, but the question of the US troops missing in action. If this can be resolved, then there is little constraint on Washington to proceed with the normalization of relations with Hanoi.

Sir, on relations with Vietnam, I would stress that we together with the ASEAN states remain firm on the question of the comprehensive political settlement of the Cambodian issue, including the withdrawal of Vietnamese troops from Cambodia and the establishment of an independent and neutral government in Phnom Penh. However, our firm position on the Cambodian issue should not be an obstacle to the improvement of our bilateral relations with Hanoi. We have to consider this because the other ASEAN countries have not allowed the ASEAN stand on the Cambodian issue to prevent them from strengthening their diplomatic and economic ties with Moscow and Hanoi.

Sir, Singapore has been singled out by the Soviet Union and Hanoi for very critical comments. The leaders of Singapore, the Soviet Union and Vietnam have not been able to exchange visits and conduct friendly discussions on various regional and international issues. I do not think that this is in our long-term national interest. Hence, my view, is that while our foreign policy has served us well, we should nevertheless begin to review certain aspects of it. The developments which I have outlined above should be looked at seriously and their implications for our national interest examined closely. In general, Sir, I feel that we should adopt a more balanced approach in our policy towards these countries.

The Minister for Foreign Affairs (Mr S. Dhanabalan): Mr Chairman, Sir, I want to thank the two Members for their suggestions and their views.

May I, first of all, take the question of wider overseas representation. We are quite aware that our present network of diplomatic and trade representation leaves out very large areas, especially in Latin America, Africa and in the South Pacific, as well as the Indian Sub -Continent. For example, we do not have a representation in Bangladesh, Pakistan, or Nepal, or some of the other countries in the Indian Sub-Continent. Some of the countries in these areas have potential for us in terms of political and economic interests. I agree that we cannot afford to continue to ignore them.

The Foreign Ministry has taken into account the suggestions by the GPC about appointing roving ambassadors. We have accepted this idea in principle and we are at the present moment looking for suitable candidates to appoint as roving ambassadors to Latin America, Africa, and the South Pacific. As was mentioned by the Member for Chong Boon, we already have such an ambassador to Papua New Guinea as well as to some of the countries in Latin America. Roving ambassadors will be able to establish links with leaders, with officials and businessmen in these countries and provide us with guidance, contacts and assistance for us to develop our politi- cal links as well as our economic and trade links. So we have taken his suggestion and we will be acting on the suggestion. I welcome the offer by the Chairman of the GPC to try and identify people who can perform this function, and I hope that I will be able to ask him for specific suggestions soon.

But the fact that we do not have or we have not accreditated ambassadors to countries in these areas does not mean that we do not have diplomatic relations or we do not have some diplomatic activity and contact with them. In 1987 alone, we had seven countries with which we established diplomatic relations - Liberia, Zimbabwe, Venezuela, Bolivia, Costa Rica, Uruguay and the Solomon Islands. In Africa, we have diplomatic relations with 12 countries, among them, Nigeria, Tanzania, Algeria, Tunisia and Zimbabwe. So we have contacts with a number of countries. In Latin America, I mentioned we have a roving ambassador who covers Argentina, Brazil, Chile and Panama. We also have an honorary consul in Chile. As I have mentioned, we also have a roving ambassador to Papua New Guinea. We have an honorary consul there and we have diplomatic relations with other countries in the Pacific, such as the Solomon Islands, Fiji and Vanuatu.

But this is not the only avenue of establishing or maintaining diplomatic contacts. We have, first of all, our mission in New York which is very active in maintaining contacts and exchanging views with the missions of countries with whom we do not have direct diplomatic or trade representation. Secondly, when I attend the UN General Assembly every year, I make it a point to meet my counterparts from countries in these areas, exchange views with them and develop contacts with them. Thirdly, we also work very actively with many of these countries in multi-national or international organizations like the non-aligned movement, GATT, the Commonwealth, the Group of 77 and so on. In all these various forums, we have identified countries which share our views and our interests and work very closely with them. Fourthly, even though we may not have missions in these countries, they do have missions here and in a number of cases they have accreditated ambassadors to Singapore from either New Delhi or Jakarta or other places. And lastly, even though we do not have diplomatic representation in these countries we do have visitors from these countries, officials as well as political leaders, who visit us and we also take the opportunity of visiting them. For example, we have visited a number of African countries with whom we do not have diplomatic representation. So in the coming years we will be increasing our contacts with these countries and our big problem, as has been pointed out by the Member for Chong Boon, is manpower, not money. We hope to solve that part of the problem with roving ambassadors.

On this question of contacts with other countries, the Member for Chong Boon asked whether our Cambodian policy has not restricted our options, and this was expanded on by the Member for Serangoon Gardens when he talked about our rather lopsided foreign policy at the present moment. We are very much aware that international relations are not static. They are constantly evolving and we have to monitor and not be caught unawares when there are new developments. So we are constantly reviewing our contacts and our relations with other countries. But we need to be quite clear where our interests lie and there is an important distinction that must be drawn between our relations towards the US, and the Soviet Union and Vietnam or the other socialist countries.

Our relationship with the US, in spite of all the differences that we have had with them on a number of issues, is fundamentally sound. The US is an important economic partner and we are quite aware that the US plays a very important stabilizing influence in the region. Our contacts with the US and our relationship with the US are close and broadly based. But we must also be aware that the US is going through a number of changes. This year particularly is a difficult year. It is an election year. They have many serious economic problems which they are reluctant to address because it is election year and, more importantly, the US is declining as a dominant power. It is still a super power. It is still a very important economic power but it does not dominate the international scene the way it used to in the past. All these, of course, give rise to problems in the internal policies in the US and sometimes to problems with us. But they do not threaten the core of US-Singapore relations. Though we will have problems from time to time, we should not be surprised that we have problems with them. As I said, there are internal problems which can give rise to problems such as the GSP or even the differences of views on our action on foreign press. In the case of the GSP, I think we have very good grounds and very good reasons for feeling aggrieved and we have made our views very, very clear. In the case of their interference in our actions against foreign media, we have made our position very clear - that it is an internal matter and that they have no business interfering in our internal affairs. And from the kind of statements and the attitude taken by the State Department, I think they are aware that they cannot influence us or pressure us into doing things which we do not consider to be in our interests.

But we must keep our overall long-term primary interest in mind. We must not allow immediate differences and problems to overshadow and spoil the overall relationship. Our relationship and our interests lie basically with the free market economies of the world, and the US is an important player in that market. We must bear that in mind. This is not to say, of course, that we should not develop relations with the Soviet Union. As has been pointed out, the relationship between the US and the Soviet Union itself is undergoing change. But it would be wrong to classify or describe our relations with the Soviet Union as strained. It is not strained. I think a more accurate term will be that it is narrowly based.

Our economic relation with the Soviet Union is very narrow. They sell us very little. We buy very little from them. There are, of course, obvious differences in our socio -economic systems and the Soviet Union, until lately, has not even been an active participant in the political and military developments in the region. It is only over the last 10 years or so since the fall of South Vietnam that they have become a major presence. Of course, the Soviet Union's support for Vietnam in its Cambodian policy is one of the problems and though we have tried to keep our relations with the Soviet Union correct, we cannot escape or forget the part that the Soviet Union plays in supporting Vietnam. Nevertheless, we are constantly exploring how we can expand our contacts and our relations with them. There has been a quiet and steady exchange of visits among the officials. Soviet Union officials from the Foreign Ministry have visited us and our officials have gone there and we are now considering how we can upgrade our contacts and our dialogue with them.

In the case of Vietnam, we have no specific bilateral problem. The problem really arises out of Vietnam's Cambodian policy. There is now some encouraging sign in Vietnam that, with the emergence of a new and more pragmatic leadership, there may be changes. We are constantly watching developments in Vietnam and we are not cutting ourselves off from all contacts with them. We maintain contacts with them and, as was pointed out, other ASEAN countries are considering or studying or exploring more economic contacts. And so are we. We are also studying to see how we can expand our contacts.

But I think it is important for us to bear in mind that we have together with ASEAN, a certain policy towards Vietnam arising out of Cambodia, and we must be very clear that we do not do anything that will undermine this policy. The reason why the Soviet Union and Vietnam have both been sometimes very vehement in their attack on us is that we have been more active in mobilizing support against them. I think this policy that we have followed is now beginning to pay dividends and we should not abandon the policy. But at the same time I agree that we need to watch the situation carefully.

On the question of an independent commission, I think the problem of recruiting the right people or the problem of two services does not arise out of the fact that we have to go to the PSC. The problem really is that we do not have a sufficiently large pool of people from whom we can drew, and until we solve this fundamental problem, creating an independent commission will not help.

Mr Chandra Das: I withdraw my amendment.

Amendment, by leave, withdrawn.

Encik Wan Hussin bin Hj Zoohri (Kampong Ubi): Sir, I beg to move,

That the sum to be allocated for Head O be reduced by $10 in respect of Code OA 1000 of the Main Estimates.

Sir, in view of the approaching guillotine time, let me just briefly pose to the Minister three points. Firstly, it is encouraging to note that the Ministry is appointing career diplomats as High Commissioners and as Ambassadors. But I note that the speed with which the appointments are made is rather slow. A case in point is the appointment of our High Commissioner to the United Kingdom. Since the death of the previous High Commissioner, to-date no announcement has been made regarding the replacement of the High Commissioner.

Secondly, whilst accepting my GPC's Chairman's desire for appointment of roving ambassadors, perhaps the current roving ambassador to Latin America has fulfilled his probationary roving period. Would he consider making him a permanent ambassador so that he can have more dealings permanently rather than roving all the time?

Thirdly, is the question of language proficiency for our High Commissioners and Ambassadors. It is encouraging to note that currently concrete steps are being taken for the foreign staff to learn Bahasa Malaysia or Bahasa Melayu or Bahasa Indonesia. But what about those who are posted to non-English speaking countries? Perhaps we should consider having staff proficient in languages of Middle Eastern countries, of Latin American countries and also of the non-English speaking countries. Briefly, those are the three points. May I have a response from the Minister.

Mr Dhanabalan: Sir, very briefly. We have already decided and informed the UK and have received agreement to appoint Mr Aziz Mahmood as our High Commissioner. So action has been taken on that. The delay was partly due to the fact that he was occupied with other functions and we were also casting around to see who would be the best person to be appointed. Roving ambassador - I think what the Member meant was probably not permanent but full-time. There are good reasons why we should for certain countries have roving ambassadors but as to full-time roving ambassadors rather than part-time roving ambassadors, that is something we can consider.

Language proficiency, yes, this is one of the items that is very high on the list of requirements for Foreign Service officers. We do encourage and, in fact, fund the training of officers to learn foreign languages. We try to give them enough time, before they take up their post, to learn languages and we do have officers who speak some of the European languages as well as Japanese and, of course, Chinese. We encourage this. This is an item that we have not forgotten.

Encik Wan Hussin bin Hj Zoohri: In view of the reply, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $56,813,800 for Head O ordered to stand part of the Main Estimates.

The sum of $32,500,000 for Head O ordered to stand part of the Development Estimates.

Head T -

The Chairman: Amendment No. (1), total of 188 minutes. Mr Ng Kah Ting.

Mr Ng Kah Ting (Punggol): Sir, I beg to move,

That the total sum to be allocated for Head T of the Main Estimates be reduced by $100.

I have got two topics to bring up for discussion. One is Towards a Better City.

Sir, in less than three decades, the PAP Government, with the support of the people, has transformed Singapore from slums and swamps into a modern City state. I do not intend to list our past achievements. I am looking towards an even better tomorrow, surpassing our achievements. However, I will confine my remarks to what my GPC on National Development and Housing and the Resource Panel discussed. We would like to make some proposals on the subject - "Towards a Better City". I shall deal with it in two parts:

(1) Land reclamations at the Marina South and the adjacent East Coast have been or will soon be completed. There are plans for their interim use over the next 10-20 years. However, we would like to ask the Government what are its long-term plans for development of such lands. We are concerned because in Singapore we have no choice but to make optimal use of our limited land resource. So we propose that the Urban Redevelopment Authority (URA) co-ordinate a project to invite architects, town planners and others in the private sector to submit their ideas and concepts for the building of a future city in the early 21st century on these lands. This, in our view, will give the people of Singapore an opportunity to take part in shaping their own city and to contribute to the kind of city that they want. We believe that such a common goal will foster national identity and such a common task will foster unity. The people of Singapore will naturally be proud of a city they helped to build and they will be quick to defend it also. Just as the MRT took many years of feasibility studies, public discussions and participation to become a reality today, so it is with the City of the Future. We propose that Government starts this project now and not delay.

Secondly, Sir, we support the Master Plan for the Civic and Cultural District, as proposed by the URA. We agree that some parts of Singapore, as described in the Master Plan, must be preserved. We support the need to have private sector participation in order to ensure realization. However, we notice that some of the buildings in these areas are deteriorating too fast. We are, therefore, of the view that URA should spare no effort to facilitate and hasten conservation work. We agree that in order to encourage pedestrian movement in this area, certain roads should be closed to vehicular traffic. More importantly, Sir, in our view, the proposed Civic and Cultural District will indeed serve as an historic link to remind posterity of their heritage.

Next, Sir, I come to the HDB, its core objectives. We believe that HDB, with its 27 years of public housing development, has fulfilled much of its objectives. However, it is now time to review HDB's core objective to provide public housing at affordable cost. Its role in public housing should now be re-examined and re- defined to take into account the needs of a better educated and younger generation looking for high quality HDB residences. Their expectations are high. They want better amenities and facilities like those provided for in the new towns like Yishun, and even those in private condominiums. In short, the HDB should strive to achieve zero defect by improving its quality of work in its building construction programmes. Similarly, Sir, those living in older estates and townships now may also want to have the improvements these new towns have. Therefore, we feel that the HDB should focus on ways and means to upgrade existing estates as the demand for new flats has now dropped. Maybe only some 12,000 to 15,000 units need to be built each year to meet this new demand.

But we talk of a gracious living environment. So in this respect, could not, we ask, the HDB encourage the private sector to play a role in our public housing development? This we think can be achieved by a two-pronged approach:

(i) allow the private sector and general public to express and submit ideas or designs of new estates, neighbourhoods and townships; and

(ii) set aside lands next to or within townships to allow the private sector to develop, as has been suggested by the Hon. Minister of State (National Development) recently. However, we feel that the terms must be sufficiently attractive, for example, the term lease of 99 years may need adjustments, should such semi-detached or terrace houses be built in those areas. The question of privatization was discussed, particularly on the Board's facilities like car parks, shopping complexes and other infrastructural facilities. But I shall leave such discussions to be dealt with in greater length by my colleagues in the GPC.

Lastly, Sir, we propose that industrial estates and workshops built by the HDB and managed by the HDB be handed over to the relevant authority, like the JTC, to manage. Also, estate management in the estates should be hived off. With the successful pilot scheme on town councils, particularly the Ang Mo Kio New Town, we propose that HDB's management exper- tise be made available to the town councils to assist residents in managing themselves.

Mr Chandra Das: Sir, I thank you for allowing me to speak. Sir, I am speaking in my capacity as Chairman of the Ang Mo Kio East Town Council.

Since the establishment of the three pilot projects, there is greater awareness and acceptance of town councils. We have conducted a survey in Ang Mo Kio East Town Council and have found that there is a very high level of awareness, in fact, well over 95% are well aware of the functions of the Town Council and the activities of the Town Council.

I am also pleased to report that there has been a general improvement in the level of service since the formation of town councils.

Sir, in speaking on this amendment, I would like to get confirmation from the Minister that after the setting up of town councils, HDB will continue to provide improvements and changes to town council constituencies if such improvements are made for non-town council constituencies. I am asking for this so that town council constituencies would not be disadvantaged vis-a-vis non-town council constituencies. A categorical statement by the Minister will help allay any such fears among the town councils.

Dr Koh Lip Lin (Nee Soon): Mr Chairman, Sir, I support the Member for Punggol for his motion of amendment. I also wish to support the Member for Chong Boon and to give some comments on matters concerning the town councils and public estate management.

Sir, the Town Council pilot project has been implemented for about 1(r) years. Despite some initial doubts on the feasibility of the project, all indications have shown that this project at Ang Mo Kio has been quite successful, as commented by the Member for Chong Boon earlier. This temporary success should not be taken for granted. The fact that the Town Councils are able to run the Ang Mo Kio Estate without much problem and are able to deliver as good as or better service than HDB is due to a number of factors which include the capable leadership of the three Chairmen, the dedicated service of the Town Council members and the efficiency and hard work of the Town Council staff.

I wish to commend in particular the Town Council members who are all unpaid and voluntary members and who have spent a lot of their time and energy in the service of town councils. Their enthusiasm and dedication have convinced me that the idea of letting residents manage their own estates is indeed workable.

Sir, the Government has indicated its intention of implementing the Town Council scheme to all public housing estates. In doing so, the duty of estate management will eventually be passed from HDB to the Town Councils. It is essential that HDB, with years of experience in estate management, should try to transfer its expertise in estate management to the Town Councils. As commented by the Member for Chong Boon, HDB should not regard Town Councils as its competitors nor should HDB regard the formation of Town Council as a good opportunity to relieve itself of various unprofitable parts of estate management to the Town Councils.

I would like to urge the Ministry and HDB to study the problem of transfer of estate management expertise carefully and come up with schemes which can ensure the smooth transfer of future management of the estates to the Town Councils.

Sir, Ang Mo Kio New Town is a relatively new but established New Town. The flats are not too old and public facilities are good. The management of Ang Mo Kio Estate is therefore easier than older estates such as Toa Payoh or Queenstown. These older estates are likely to face urgent problems in maintenance and upgrading later on. The future Town Councils of the older estates should therefore be given more generous grants and support. I wish to request the Minister to take this into consideration when finalizing the legislation and procedures of the Town Councils.

Mr Heng Chiang Meng (Jalan Kayu): Sir, the town council project, as my Town Council Chairman has said, was launched on 1st September 1986 in Ang Mo Kio New Town. This pilot project, I presume, will continue until the legislation on town councils is passed in Parliament. So I do not propose now to go into the benefits, the long-term objectives and the overall desirability of town councils. I think there will be ample time for such discussion when the Bill for town councils comes up for debate.

However, in the light of the Government's records in governing Singapore, surely one of the benefits of any new proposal and any new move must be that it should provide greater convenience to the people. Looking at the project in particular, the people living in Ang Mo Kio should have greater convenience and not inconvenience, with the introduction of town council into their lives. Sir, instead what do we have here? Let me list just some of the services to the people which previously were peformed by four HDB Area Offices located in four different parts of Ang Mo Kio and now are performed by either one HDB administrative office in Ang Mo Kio or at the HDB head office.

Sir, these are some of the services that were originally performed by the Area Offices before the introduction of town councils:

(1) sale of season parking tickets;

(2) payment of parking fines and surcharges;

(3) payment of rents, loans, service and conservancy charges;

(4) application for alterations and additions to premises;

(5) enquiries on HDB related matters, ie, policies and procedures relating to resale and transfer, subletting and various other policies;

(6) application and allocation of hawker stalls;

(7) matters pertaining to maintenance and repairs to the inside of both sold and rental premises.

Sir, for all these type of services, previously a resident could just go to the Area Office and as I said before, there were four in Ang Mo Kio. But now, for all these services, they have to go to one single office in Ang Mo Kio or, in the case of the hawker stalls, they have to go to the HDB head office. Surely, if nothing else, we can straightaway see that one office now to take care of all these functions that were previously performed by four offices seems to me that not only have extra travelling distance been added for the residents seeking these services but, more importantly, that the location or the place or the capacity of that one office is simply insufficient to cater for the services needed by the residents of the whole of Ang Mo Kio.

Of course, the HDB has introduced some measures to reduce these inconveniences, such as payment by Giro, by post and by cheque. But I would like to ask, does everybody in Ang Mo Kio or every resident in Ang Mo Kio have a banking account that they can either pay by Giro or by cheque?

An hon. Member: POSB.

Mr Heng Chiang Meng: POSB would be interested in that. But I would say that those people who can ill-afford to have all these types of payment systems or payment instruments of cheques and Giro can also ill-afford the bus fares required to travel now from various parts of Ang Mo Kio to the central office or to the HDB head office. Moreover, there is only a small spiral staircase leading to the Ang Mo Kio office. In fact, it is very difficult for various residents to go into the Ang Mo Kio office to pay for these services or to obtain these services because, as I said before, this office is simply not capable of catering to the large number of people now seeking these services.

Sir, there are also more important results. I believe that the splitting of these functions has led to lesser personal contact between the residents and the grassroots leaders of the constituencies on one hand and the HDB staff and the staff of the town councils on the other. The existing arrangement for these payments could have also contributed to the arrears problems, as the inconvenience of having to make monthly visits to the administrative office may encourage residents to pay at longer intervals. I think there is definitely a need to maintain some form of payment system at the town council offices, and I am very sure that the town councils will be prepared to do these services on behalf of the HDB albeit for a fee, of course.

Sir, the town council project has shown itself to be a success. But if I have a suspicious mind, I would think that such inconveniences were planned to ensure the failure of town councils. But fortunately I do not. I would like to believe that these inconveniences were made by some bureaucrats in airconditioned offices who were more concerned with the beauty and simplicity of their plans than the inconveniences bestowed on the people. Sir, I hope the Minister will rectify this.

Dr Arthur Beng Kian Lam (Fengshan): Sir, I wish to focus on only one aspect, and that is, on the formation of town councils. This has been touched upon by the Member for Yishun and I wish to support him on this.

I would like to ask for clarification from the Minister as to how funds and revenues will be allocated in view of the fact that the needs of the older HDB estates and newer HDB estates will be very different. With the establishment of town councils, the responsibility and maintaining the estates to the people's satisfaction within the limited budget will shift from the HDB to the town councils and community leaders. Will this be an easy task? The answer in my mind is that it will be a challenging task but by no means an easy one. Why?

Firstly, the residents will be comparing the task carried out by the HDB in earlier days when the estates were new with the task before the town council, ie, to manage ageing estates. Is this comparing like with like? The answer here is a definite no.

Secondly, the residents will be comparing their estates which may be an old estate with a new estate, especially those of their friends or relatives. Expectations will rise but may not be achievable. Because again, here we are not comparing like with like. Thus, right from the outset, the older estates will be disadvantaged. For example, the overhaul or changing of lifts over 10 years old will not only be a costly affair but it will also cause much inconvenience. Likewise, the maintenance of the roofs of the flats. Then there will be the inherited problems. The old flats were built at a time when quality control and design were inferior compared to the newer estates. As the years went by, HDB learned from its earlier faults. Town councils will have to live with these faults. If town councils, especially those in the older estates are to succeed, extra funds and expertise will have to be provided right from the outset. The HDB must be fair and provide a premium grant for this purpose. Money alone will not be enough. The various HDB Area Offices must do a block by block and even floor by floor assessment to identify problems so that a fair grant can be provided. For example, water seepage through the walls during heavy rains is a problem in the older estates. Water proofing is already underway in some blocks but not yet completed in others. Peeling of the ceilings in common areas is also increasing as the blocks get older. Provision must be made for problems such as these.

May I propose to the Minister that a block by block analysis be made before the transfer of responsibility is assigned to the town council. In areas of disagreement, an independent opinion may be sought and a realistic quantum worked out. Unless we are given a chance to start off on a right footing, the town councils especially those in the older estates will be doomed to fail. Given a fair chance, and I believe the Minister is a fair man, we will endeavour to do better. The PAP MPs together with the community leaders are ready to meet this challenge.

The Minister of State for National Development (Dr Lee Boon Yang): Sir, my Minister will reply and give his response to the hon. Member for Punggol later on. I would like to respond to the Members who spoke on town councils.

Sir, the Member for Chong Boon has asked that the HDB should not disadvantage town councils once the concept is applied more widely. I would like to reiterate that the objective of forming town councils is really to enable residents of public housing estates to participate in the management of these housing estates. The town councils will provide residents with the means of realizing their own ideas of improving their immediate living environment. The residents can decide on how the physical environment can be improved or upgraded according to their priorities and available resources. If town councils live up to this expectation and I have no reason, hearing the various comments of hon. Members, not to believe that they will do so, in time to come the different public housing estates may develop distinctive characteristics of their own. I think this will help to enhance residents' sense of belonging and also foster community pride.

Sir, differences will arise, not as a result of HDB disadvantaging town councils or other constituencies but they will arise purely as a result of the town councils' effort to improve their own housing estates. I would like to reassure the Member for Chong Boon that HDB will not work against the interest of town councils in continuing with its building and redevelopment programme. Town councils will not be disadvantaged in any way. When the Board embarks on a programme to rejuvenate and upgrade older estates, it will implement the programme whether the estates fall under town council management or it is still being managed by HDB. Similarly, if HDB finds that a particular project for improving public housing estates is necessary, it will implement this programme in both town council constituencies and also those constituencies which have yet to form their town councils.

Sir, I now turn to the Member for Yishun. I am glad to hear that despite the initial doubts, the Member for Yishun has concluded that the town council concept is workable and it has been successful so far in the context of the Ang Mo Kio pilot town councils. He asked that HDB should not regard town councils as competitors. I would like to once again reassure him that HDB does not regard town councils as competitors. On the contrary, HDB regards town councils as cooperators in tackling the task of managing public housing estates. The HDB will cooperate with the town councils in the management of the housing estates because it is in the mutual interest of both HDB and the town councils to do so. First, HDB as the land owner will continue to have an interest in the housing estates. It will be looking forward to a fruitful relationship with the town councils.

Secondly, the HDB as the housing developer will need feedback from the residents via the town councils in order to further improve the design and construction of public housing.

Thirdly, there is a reservoir of expertise and experience in estate management within HDB which can be made available to town councils.

The three pilot projects in Ang Mo Kio have shown how this concept can work in practice. The HDB is already preparing for the formation of more town councils in other constituencies. Practical measures to get newly formed town councils started are being drawn up. For instance, right after the formation of a town council, the board will provide each council with essential data and plans of the estate that are under their jurisdiction. Information on certain contract agreements will be supplied to help the council in tendering for the maintenance and service contracts.

Sir, if the town council wish to tap more directly HDB's expertise and experience in estate management they can do so. The HDB will form a private company to offer estate management services to the councils. The councils can hire this private company to carry out the management and maintenance works.

Sir, the Member for Jalan Kayu has raised the issue of a central area office in Ang Mo Kio. When the Ang Mo Kio pilot town councils were formed in September 1986, the management and maintenance functions of the housing estates were entrusted to the pilot town councils. Together with this, three out of the four HDB area offices in Ang Mo Kio were allocated to the three pilot town councils to be used as town council office. Since HDB has to retain the housing administration function, the Board centralized these functions at the Ang Mo Kio central area office to serve the entire Ang Mo Kio New Town. There was no plan despite the Member for Jalan Kayu's comment for the idea to ensure the failure of the town council concept. In fact, the centralization took place because of the need to rearrange the services of the town area office in line with the new functions to be devolved to the town councils.

The HDB has also used this rearrangement in Ang Mo Kio as a pilot project to test out the Board's plan to centralize and streamline its estate management function in other areas. HDB is aware that as a result of the centralization there were some initial inconvenience caused to the residents. In order to reduce this inconvenience the Board has introduced various measures. The Member for Jalan Kayu is aware of this. He has touched on this. For instance, the payment of rent and loan installments through GIRO, renewal of season parking tickets can be carried out by post, and also by the inter-bank GIRO. HDB is also encouraging residents to refer more of their requests and enquiries through telephone or correspondence instead of calling personally at the Ang Mo Kio office. Furthermore, residents can now also pay their current monthly rent and loan instalments at the town council office. So in Ang Mo Kio there is more than one office to serve residents in this regard.

With these measures, HDB expects to be able to improve the central area office concept. Ultimately the scheme will yield productivity gain and improve efficiency, which will also benefit residents of the housing estates.

Sir, I now turn to the Member for Fengshan on his remarks about the distribution of funds and support from HDB to the town councils and the differences between old and new public housing estates.

Sir, last year a working committee to look into the drafting of the appropriate legislation for the formation of town councils was set up. The Committee has almost completed its work and legislation will be presented to Parliament in due course. The Committee is aware of the differences between the maintenance cost of older housing estates compared to the newer housing estates. The Committee has recommended that operating grants be given to town councils to help to pay for day-to-day maintenance. The Committee has also recommended that these grants will take into account the age of the estate. The Committee also recommended that initially Government provide town councils with annual grants to cover expenditure on the periodic repair, maintenance redecoration work and that these grants will be dependent on the type of flats within the town council. This is to enable each town council time to build up sufficient sinking funds to finance future cyclical repair works.

I believe I have addressed all the points raised by the hon. Members.

Dr Wong Kwei Cheong (Cairnhill): The HDB ought to be congratulated for its successful housing programme. For by the end of 1986 about 2.2 million people or 85% of Singapore's population lived in HDB flats. However, there seems to be an area of neglect in the HDB's building programme which I hope the Minister will review. This concerns the old HDB apartment blocks. In Cairnhill, for example, the former SIT blocks at Winstedt Drive and Farrer Road have, at most, 50% occupancy. I have constant appeals from Singaporeans to rent these flats as they could not afford to buy the normal HDB flats. The answer is, inevitably, no. I hope the Minister can enlighten me on the number of such old HDB flats there are in Singapore and the plans he has made for the future usage. May I make two suggestions. Firstly, that these older apartment blocks be renovated and sold to the low income groups. Although many of these flats are more than 20 years old, they are structurally sound and should last for another 50 years or more. Secondly, why not convert some of these old apartment blocks to homes for the aged? Already, in many housing estates like Winstedt Drive, the aged prefer to live in the old housing estates. As reported recently in the newspapers, the granny flats have not been successful as the grannies prefer to live by themselves. Our population is fast ageing and there is a growing demand for facilities for the aged, in particular, housing facilities. The HDB should recognize this trend in their building programme and convert some of the older housing blocks to homes for the aged with facilities like driveways for wheelchairs, nursing and medical facililties and so on.

Sir, I would also like to draw your attention to the large number of new HDB and new HUDC flats that have been left vacant, some for more than two years. I hope the Minister can inform the House the number of such vacant flats and why they have been left vacant. Perhaps it is bad location. For example, the empty HDB flats at Nee Soon. Or because the location is too good, for example, the empty HUDC flats at Anthony Road. However, since it is the Government's objective to provide homes for the low income and middle income groups, the HDB should make every attempt to meet the housing needs of Singaporeans and not to wait for property prices to appreciate before selling the new HDB or HUDC flats.

Sir, I would like to appeal to the Minister once again to sell the HUDC flats at Anthony Road now when they are more affordable to most middle income Singaporeans.

Encik Othman bin Haron Eusofe (Geylang Serai): Sir, currently 80% of our population own the homes they live in. The basic aim of housing our people has already been achieved to a great extent. There is, however, a group of low income Singaporeans who do not have the ability to purchase their own homes. I would like to urge the Ministry to review the HDB Home Ownership Policy to help the low income group to purchase their flats. I know, Sir, that there are at present schemes to assist families with incomes not exceeding $800 per month as well as tenants in rental flats to purchase their flats. This scheme provides for an initial downpayment of 5% for purchase of up to 4S flats. For bigger flats, the initial downpayment is raised to 10% at application and the payment of an additional 10% on collection of keys. Additionally there is the ballooning repayment scheme which provides low initial instalment payments which progressively become higher in the later years. I would like, Sir, to ask whether the terms of these schemes could be modified to allow families with incomes, say, not exceeding $800 per month as well as tenants in rental flats, a loan of 100%, which in fact is the scheme which exists for existing sitting tenants and tenants affected by the relocation scheme. Alternatively, the initial downpayment could be a nominal 1 or 2%. Perhaps the loan repayment period can also be further stretched. I understand that there is a large number of 3-room vacant flats and perhaps these flats can be offered on these terms.

Next, Sir, I would like to deal with the allocation of HDB flats on purchase. At present the HDB allocate flats only when the blocks of flats are completed. Could the HDB examine the feasibility of marketing the flats in advance? Information could be provided on the HDB development programme and the types and number of flats which would be developed at various locations, say, in the next two to three years. Applications could then be invited for persons to apply to book these flats in advance, that is, similar to the way the private sector offer their residential projects for sale. This will help the HDB to know what is the demand for flats in certain areas and locations. Applicants can be asked to make a firm commitment to purchase the flats when they are completed and perhaps rules could be worked out to check abuses.

Sir, working in this way the HDB will have a better knowledge of the demand for different types of flats in various areas. This will help overcome the problem arising out of a mismatch of supply and demand of HDB flats in some areas. I understand that in some areas or zones there is a great demand for a certain type of flats but insufficient supply. Whereas in other areas there is a lack of demand ut a good supply of units. Perhaps working in this way, the HDB can overcome this problem of mismatch of supply and demand.

Sir, the Member for Punggol and Chairman of the GPC, National Development and Housing, has touched on the need to work towards a better city for tomorrow. May I take this opportunity also to discuss the development of Marina South on the 266 hectares of reclaimed land. I understand that the URA's aim is to develop this vacant land into a hub of recreational and leisure activities.

The Chairman: Encik Othman, you are digressing from your amendment.

Encik Othman bin Haron Eusofe: Sir, I have another cut on urban redevelopment. Can I take it at the same time?

The Chairman: You have to speak on what you have indicated under the Standing Orders.

Encik Othman bin Haron Eusofe: Can I come back to it later?

The Chairman: You can speak on this when you move your amendment later.

Encik Othman bin Haron Eusofe: Thank you, Sir.

The Chairman: It is approaching 1.00 pm. Order.

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 2.00 pm.

Sitting accordingly suspended at 1.00 pm until 2.00 pm. Sitting resumed at 2.00 pm

[Mr Deputy Speaker in the Chair]

Debate in Committee of Supply resumed.

[Mr Deputy Speaker in the Chair]

Head T (cont) -

Mr Eric Cheong Yuen Chee (Toa Payoh): Sir, the HDB's redevelopment programme has affected the older HDB estates. In my constituency, several blocks of 1- and 2-room flats are affected by the HDB's redevelopment programme. The problems arising out of the dislocation of residents and shopkeepers are matters which the HDB should give more priority and special attention. For instance, some tenants of 1-room flats who requested for a larger flat were rejected by the HDB, presumably on the grounds that a tenant of a 1-room flat can only be offered a similar type of flat and not otherwise.

Sir, in older estates like Toa Payoh, tenants have been residing in these flats for more than 20 years and the size of the family has increased over these years. Some have children in their late teens. Therefore, there is a need for such families to have a larger flat. Shopkeepers' businesses are also adversely affected because of the large scale reduction of tenants in neighbouring blocks. Can any assistance be given by the Board in the form of rental concessions or relocation to other estates without going through the process of public tender, thus giving them priority as in normal resettlement cases?

The next point I wish to make, Sir, is the blocks that are left vacant poses security as well as social problems. I am aware that the entrances and other openings have been boarded up but these can be easily dismantled. Therefore, there is a possibility of trespassers using these flats for unlawful purposes. Could these blocks be expeditiously demolished and in their place new structures be erected? If this cannot be done, whether additional security measures can be introduced so as to minimize these risks.

The last point I would like to make, Sir, is if these old blocks of 1- and 2-room flats are demolished, whether the Housing Board could advise the MPs in the constituencies affected of the future redevelopment programme, ie whether new blocks of flats or other facilities will be constructed on these vacant lots so as to ensure that the vacated sites are put to more useful uses.

The Chairman: Mr Tang See Chim is not here. Dr Wang Kai Yuen.

Dr Wang Kai Yuen (Bukit Timah): Sir, the topic of my presentation this afternoon is the impact of priority allocation on the waiting time for HDB flats.

Sir, the allocation of an HDB flat has always been based on a time-honoured system of first-come first-served. This system is fair and nobody can argue or will argue with it. However, through the years, the Government has introduced a series of incentives to promote desirable social behaviours through priority allocation. The result is that those on the queue for housing without priority tend to get pushed back, at a times seems ad infinitum and especially if the counter staff at the HDB reinforce that idea.

For instance, let us take the three-tier family scheme. By itself, it is a good scheme, promoting Singaporeans to continue living with their parents although at times due to basic incompatability between in-laws, getting them to stay together actually contributes to greater conflict among them. Nonetheless, the motivation is commendable. However, there are Singaporeans who, by turns of events, do not have parents to participate in this scheme. So these people, through no fault of their own, see themselves pushed back time and again from the queue, especially when highly desirable locations were put up in the market.

One recent allocation of this highly desirable location happens to be in my constituency in Bukit Timah and enough applicants have complained to me to make an impression. Would the Minister elaborate on the whole allocation procedure and on the impact of various current priority allocation schemes on the waiting time for those without priority? Would the Minister consider setting some maximum waiting time for those who do not enjoy any priority but who have joined the queue purely on the first-come first-served basis? I think the Minister will agree that for someone to see others continuously pre-empting him on this first-come first-served queue can be quite frustrating.

Mrs Yu-Foo Yee Shoon (Yuhua): ( In Mandarin): Sir, today what I would like to talk about is the system of shop tender by HDB. According to general feedback, at present there are some shophouses built by HDB which are still empty and unoccupied. Some have been vacant for more than several months or even one year without anybody wanting to take them. It is really a waste. It may be due to the problem of poor locality or the paucity of population in those housing estates so that reserved tender prices could not reflect market conditions. For instance, certain lowest tender rate is $2,000. Perhaps market price was even lower than this figure. Therefore, businessmen would not like to tender for such shophouses or sometimes giving them up after half way through. Therefore, there is this phenomenon of empty shops. I would request the authorities concerned to pay attention to this phenomenon and try to resolve the problem.

I suggest that the tender system by HDB should entirely depend on market conditions, ie, supply and demand. That is to say, we should not fix the minimum tender price and should allow the prevaling market to determine its prices and let the interested businessmen to tender for the shops. This is more flexible and can actually reflect the real condition of demand. Otherwise some shops could be vacant for months or a whole year. Market condition as determined by supply and demand is also in keeping with economic principles. Another point is if it depends entirely on market forces, sometimes the tender price could be high or sometimes low, then the existing method by the HDB allowing the person concerned to re-tender might solve the problem. Therefore, I would suggest that if we could make some modification and improvement to the tender system, then businessmen who are interested in such shops can make their own calculation and see under what kind of condition they can carry out what kind of business and not blame the Government for any consequence. So I hope the Minister will pay attention and give serious consideration to this matter.

The Chairman: Mr Chiam is not here. Mr Eric Cheong.

Mr Eric Cheong Yuen Chee: Sir, the number of tenants of flats and shophouses in arrears of rental has increased over the past three years. Most of these tenants are in genuine financial hardship caused by either job losses or a decrease in business opportunities. Sir, the HDB should look into the method of recovery of rental arrears with some compassion.

Sir, in some cases, the HDB has been very considerate but in others too over-zealous. When a tenant is in arrears of rentals, the HDB also takes into consideration the furniture and fittings in the flat, for example, the number of television sets, video-recorders, refrigerators, etc, in assessing the inability of the tenant to pay the arrears. I think this is unfair. I quote just one case to illustrate my point. In a family there were initially three members of the family working. The head of the family, a taxi driver, died of a heart attack. The elder son met with a serious motor accident and could not take on full-time employment leaving the younger son earning a salary of about $400. Minus CPF contribution, he has less than $400 to take care of the family needs. As a result of this, the family got into rental arrears.

When the Housing Board decided to assess their inability to pay, they commented to the widow and said, "Well, how is that you can't pay this rental? You have a television. You have a video-recorder and so on." The widow attempted to explain that this was acquired during good times. It is unfair when a family is in distress and you start to inquire into the family's circumstances about of the acquisition of furniture and fittings.

Another point I would like to raise is, besides the rental, those tenants who are in arrears have to pay other costs like legal costs, mesne profits, and so on. In most cases, the total amount of these costs is far in excess of the rental owed to the Housing Board. If the tenant is unable to pay the rental, it is obvious that he would not be able to pay these additional costs. So I would urge the HDB to look into this with more compassion, either by waiving these additional costs or allowing tenants to repay them over a longer period and not to add them on to the rental arrears because, if a family is in distress, it is difficult for such family to pay the arrears as well as the other costs even though these are being paid in monthly instalments. By doing so, the HDB will help such tenants of flats and shophouses to overcome their temporary financial difficulties. I wish the Minister will seriously look into this suggestion.

The Chairman: Mr Chiam See Tong is not here. Mr Das.

Mr Chandra Das: Sir, I would like to highlight one problem regarding the use of void decks. Sir, the parking of vehicles, particularly motor cycles in void decks, is becoming a serious problem, especially to us in Ang Mo Kio East Town Council. I am sure this is a problem for other housing estates too. Parking of motorcycles in void decks is fairly rampant and I am told now that current legislation which is available is unable to take care of this problem. I would like to ask the Minister whether he is aware of this problem. If so, does the Ministry have any plans to introduce necessary legislation to take care of this problem?

The Chairman: Mr Chiam is not here. Mr Dhanabalan.

2.15 pm

The Minister for National Development (Mr S. Dhanabalan): Sir, quite a wide variety of items have been raised under this Head, many of them pertaining to Housing Board and public housing policy. So I thought it would be useful for me to cover the main policy matters raised by recounting or informing this House of a review of public housing policies that has been conducted and the kind of new policies that would be followed in the future. And after I have finished that, then perhaps if I have the time I will tackle some of the more detailed points that were raised by Members.

As we were told by the Member for Punggol, the HDB has been successful in tackling our housing problem. We have, in fact, solved the housing problem. Over four-fifths of the population of Singapore now live in Housing Board flats. The housing problem is no longer a question of rehousing people in multi-family shophouses in the city or in urban and rural squatter areas. For example, of the 67,000 applicants who are presently on the waiting list to purchase HDB flats, 42,000 are already living in HDB flats which they purchased. These applicants are applying either to upgrade to bigger flats or are forming new nuclear families. Of the remaining 25,000 applicants, about half are living in HDB rental flats and the other half in non-HDB private premises. Again, these people are seeking to upgrade their accommodation.

Only a generation ago, people were very happy to accept 1-room self-contained flats. Now HDB has to offer 3- and 4-room Simplified flats to many applicants before they can find takers. Because of the many changes in our economy and society since the HDB was set up in 1960, a Ministerial Committee under the Chairmanship of the First Deputy Prime Minister was set up to review public housing policies. The recommendations of the Ministerial Committee on Public Housing will guide HDB in its policies in the future.

We recognize that while current public housing policies have served us well, the housing needs of Singaporeans have changed. Living conditions have changed and have improved. The economic condition of our people has also changed. Expectations and aspirations of our people are much higher now.

Housing policies must be revised and updated so that housing resources can be better allocated to meet these new and changing demands. But any new policy that will be introduced, will not deviate from the basic aim of achieving a full home-ownership society by 1999.

All Singaporeans who are prepared to make the effort can be assured that the construction programme and prices will enable them to afford at least a basic housing unit or a 3-room flat. Those who can afford something bigger and better than a 3-room flat will be encouraged to upgrade.

The policy on public housing is in this sense quite similar to the Medisave system. Our public health service is aimed at enabling everyone to at least enjoy C Class medical attention. This is a highly subsidized service with the user paying, in cash, only a small proportion of the cost. The Medisave scheme ensures that every one will be able to afford at least Class C service. If a person wants Class B service, which is less subsidized or Class A or private hospital service which is not subsidized, he is of course free to have it if he has enough in his Medisave account.

Similarly, our public housing policy will make at least a 3-room flat affordable for all. For those who can afford bigger flats, there will be incentives for them to buy bigger flats. Our economic and social system encourages people to work hard, save and upgrade their lifestyles. Keeping this dominant objective of a full home-owning society in mind, the HDB will gradually allow market forces to determine the type of flats it will build and the prices at which they will be sold. This will require HDB to ensure that the land sold to the Board is used by the Board to get the best value and yield within the aim of achieving a full home-owing society.

Land is finite in Singapore. I do not think Members need to be reminded. We have only 570 sq km of land on the main island of Singapore, of which only about 130 sq km will be available in the long-term for public housing and related facilities. I must emphasize "long-term" - this land is not not available yet. In order to make this 130 sq km available, there is a lot of resettlement and reclamation that has to done on swamps. More land reclamation from the sea can, at best, only make a very small marginal difference.

Our population at present is about 2.6 million. A

conservative estimate is that our population will increase to about 3.4 million by the year 2030. In land use we must constantly bear in mind that we have an obligation to ensure that our children and our grandchildren will be able to enjoy the quality of life that we now enjoy and even improve on it. Therefore, land for public housing must be optimally used. New town planning, building layout and design, and land use intensity must reflect the market value of land.

Similarly, the market value of land must be reflected in the pricing structure of HDB flats. The prices of flats in the Central Area must necessarily be higher than those in outlying areas or New Towns. HDB prices already reflect to a small extent these different values but the prices do not reflect sufficiently the difference in market value between the land in or near the City area and land in New Towns and outlying areas.

There are also different values for different locations within the same area. The HDB has already introduced the practice of premium and discount pricing within the same pricing zone. This concept has generally been well received. Further adjustment will have to be made to this system of differential pricing. As we allow market forces to determine prices, price differentials must be reflected over localities (ie. in different HDB towns and estates) and also over time.

This brings me to the important question of the pricing of HDB flats. I have asked the Clerk to distribute a table which I have prepared. [Copies of table (Cols. 867 - 868) distributed to hon. Members.] Regarding the pricing of HDB flats, I would first of all like to restate the basic thinking that has determined the pricing of HDB flats in the past and which will continue to be the basis in the future. table - NUMBER OF HDB FLATS PRICED BELOW COST IN FY 85/86 AND FY 86/87 (Cols. 867 - 868)

The term "subsidy" has been used very loosely. I want to make the definition very clear so that there will be no misunderstanding and so that we will all use the word in the same sense. When the Government provides a service or sells an asset at a price lower than what the consumer or buyer will have to pay in the market, the Government gives a subsidy. As long as HDB sells its flats at a price lower than what they can fetch in the market, the purchasers enjoy a subsidy. This is the only reasonable and rational definition. It is demonstrated by the fact that an HDB purchaser, if he is allowed to do so, can sell his flat immediately after he gets his keys, at a higher price than what he paid the HDB. He does not have to even wait for five years, which is now the period he has to wait, before he can sell. So he is, in fact, getting the flat at a price lower than what it will fetch on the market and he is being subsidized.

The cost to HDB of building a flat is the land cost and the construction cost which includes development and infrastructural costs. To make clear the real value of land or the market value of land, HDB buys the land from the Government at market value as assessed by the Chief Valuer.

Since the HDB introduced the new accounting policy in 1985, it has been able to build up its accounting system to show more details of the subsidies involved in its various operations. I have circulated a table showing, in summary, the number of HDB flats priced at subsidy levels. The table shows in Column 1 that almost 98% of all HDB flats completed for sale in fiscal year 1986/87 were sold or will be sold at subsidized prices. In the year 1986/87, that amounts to 38,864 flats. In other words, the prices of 98% of the flats do not recover construction and land costs. Column 2 shows that even if land costs were ignored or excluded, which of course would be absurd, about 40% of the flats were in fact priced below construction costs. That is, in the accounting year 1986/87 almost 16,000 flats were priced below construction cost. Construction cost, of course, includes development and infrastructural costs.

As a matter of interest, since this has been the focus of so much discussion in the past, I asked HDB to give an estimate of what it cost the Government to acquire the land - that is, the Government's book value of land at historical cost.

Land that the Government sells to the HDB comprises:

(a) Land that has reverted to Government at the end of a lease. This was the case with areas within the City. At the end of 99 years' lease, they revert to the Government. So they came back into Government books at zero cost. So cost in this case will be zero.

(b) Land which has been Government land for many decades and which has been used by Government for various purposes and hsd now brrn released for public housing. Cost in this case will also be zero, that is, cost in the Government books.

(c) Land acquired from the public under the Land Acquisition Act. Cost in this case will be the compensation paid and will depend on when the land was acquired and what the Master Plan zoning of the land is. Where the land is zoned for agricultural use, the compensation will be lower than where the land is zoned for residential, industrial or commercial use. In addition, in many cases, the Government incurs resettlement costs but in some cases, of course, the land may be unencumbered.

(d) Land reclaimed from the sea or swamps. The cost in this case, of course, is obvious. It can be seen that the land used for public housing is a composite of many types of land. The proposition that has been made in the past - that the price of an HDB flat should depend on what it cost the Government to acquire the land - is absurd. It would, first of all, mean that what the purchaser pays will depend on the luck of the draw. If his flat happens to be on what was formerly Government land, he would pay nothing for the land. If it happens to be on residential land acquired by the Government or reclaimed from the sea, he would pay more. Prices will fluctuate widely and from area to area and from year to year.

Column 3 of the table that I have distributed shows the HDB price compared to the land at historical cost, together with construction cost. It can be seen from column 3 of the table that there is very little difference between the number of flats priced below construction cost, ie, column 2, and the number of flats priced below construction cost plus land at historical cost. This is because the total historical cost of land is very low compared to the construction cost. Government has accumulated this land over a long period of time using acquisition laws that have kept costs low. To use historical cost will, in fact, mean giving away the land almost free.

If land is not an important cost component, the price of flats will not vary according to location because there will be no land cost component and it does not matter whether the flat is in the city or in an outlying area. And price will also only vary very little according to the size of the flat because the amount of land that the flat occupies will have little bearing, since land value is a very small component, almost zero. In such a situation, everybody will then want the biggest type of flat, ie, Executive type flats in the best location. How do we then allocate flats in such a situation? By ballot? And how will Singaporeans who work hard, earn more and who can afford better flats be able to upgrade? Obviously, using the market mechanism, which means giving a market value to the land, is the fairest and most efficient way of allocating the flats.

It would be very easy for the Government to be popular and give away the shop by pricing land at historical cost. When all available residential land is given away, what will there be left for future generations, for those who will be starting their own families in the coming years? We cannot shirk our responsibility to our young people who will be entering the market for housing in the future. I have already stated that we must plan for a population of about 3.4 million. We must do all we can to safeguard land for our children.

The only way we can be fair to our present as well as future generations is to value HDB land at market rates and use this as a basis for pricing HDB flats. HDB prices have always been below the level required to cover the market value of land. Flats have, therefore, always been subsidized. But using the market value of land for costing purposes will at least tell us how much we are deviating from the market practices and what is the target that we should aim for.

The market value of land is also the best guide to the pricing of flats in different parts of Singapore. The price of a flat in or near the Central Area relative to the price of a flat in a New Town or outlying area can only be fixed in relation to the market value of land.

The HDB has, in fact, used the market value of land in structuring its selling prices. But the level of subsidy allowed in fixing the prices has not been consistent. This is, of course, apparent from the table that I have circulated where some HDB flats are priced below construction cost while others are priced above construction cost but below full cost including land cost.

In theory, the best way to allocate a subsidy would be to give every family that qualifies for public housing, a public housing subsidy voucher - a kind of cash voucher which can only be used to buy an HDB flat. The value of the voucher which can be determined according to various criteria will be enough to enable everyone who qualifies for public housing to buy a 3-room flat at very affordable prices. Having given such a voucher, we should then price all public housing at full market value (or at least the land at full market value) and leave it to the holder of the voucher to use the voucher to decide what kind of flat and in which location he would like to buy his flat. Those who can afford to top up more can go for bigger flats and better locations. The choice can be left to the purchaser but everyone will get a predetermined subsidy. This, I think, is the best approach in theory to adopt. I am not sure whether it can, in fact, be implemented because there are many difficulties, as our public housing programme has also many social objectives that we would like to achieve. But in the pricing of public housing, we should always keep the compass pointing in the right direction, ie, at the market value of land. If we deviate from this, I think we can run into all kinds of problems.

Using market value of land will also mean better decisions about the type of flats to be built in different areas. Good quality housing will translate into different things for different areas of Singapore. Better housing does not necessarily mean bigger and bigger flats and more generous spacing between blocks. For example, in or near the Central Area where land values are high, good quality housing may mean smaller flats with better design and better internal finishes but less open space within the estate or less space between the blocks. The trade-off, of course, is proximity to the City and the amenities that the City provides. On the other hand, in outlying areas or New Towns, there will be more scope for spacious neighbourhoods or town gardens, more open spaces and other facilities. These are trade-offs that Singaporeans must recognize and must learn to accept.

I have dealt at some length with the price of HDB flats. But I must emphasize that what I have stated is the broad philosophy. It is a philosophy that may not have been spelt out in the past. But it is one approach which anyone who has had any dealings with real estate will recognize immediately and understand immediately as fair, reasonable and realistic. This approach has always been used by the HDB in determining the relative prices of its flats. It is therefore not a new philosophy. What I have said should not, therefore, be taken to mean that there will be an across-the-board increase in HDB selling prices this year or next year.

The objective of achieving a full home-owning society remains. As long as HDB can hold down tender prices of construction and there is no increase in the price of fuel, materials or wage costs and inflation remains low, there is no reason for an across-the-board increase in the prices of HDB flats.

Let me now turn to some other aspects of introducing market practices in public housing. The HDB is now studying a system to obtain prior commitment from potential buyers before commencing to build. This is a system that was already suggested by the Member for Geylang Serai. This will enable the Board to build according to real demand. In the past, HDB tried to estimate the demand pattern based on past experience. With fast changing tastes and expectations, the past is not a very good guide for future demand. The HDB now has 3-room and 4-room flats, for example, in stock. People can literally buy flats off the shelf. It means less waiting time but, of course, high holding costs for the public housing programme. A system of prior commitment will mean a slightly longer waiting period for people who want flats but it will mean generally lower public housing costs because of lower holding cost.

The HDB will continue to build at least up to 5-room improved flats, as long as it is more efficient for the HDB to do so than the private sector. We do not rule out the possibility of getting the private sector to compete with the Board in the building of larger flats such as the Executive flats. The Board will also set aside land within existing estates and New Towns for the private sector to construct private apartments and conventional housing. This should result in a better mix of housing and residents in the HDB estates. Furthermore, the HDB will allow greater participation by the private sector in commercial development in HDB New Towns. For example, the private sector can be invited to design and develop sections of a Town Centre or the Neighbourhood Centre in a New Town. So there will be more scope for private sector participation in HDB developments.

Over the next few years, the HDB will demolish many of the older rental blocks especially in the central areas. In so doing, the stock of rental flats will be reduced gradually. But HDB will retain enough rental flats to cater for those who require transitional housing, ie, those who have to rent first and can only afford to buy flats later, and for the few in our society who may never be able to purchase their own flats.

On the question of HDB shops, the HDB will sell its new shops in phases, and will consider selling existing rental shops in the future. This policy has already been announced. In the meantime, rental shops will be let out on fixed-term tenancies rather than on a month-to-month basis. The details of this have also been announced. HDB will also allow the private sector to build and develop shops for the retail trade, once it goes ahead to sell land in New Towns for comprehensive commercial development.

The HDB will from now onwards concentrate on developing public housing only. HDB has therefore decided to hive off all its industrial buildings and estates to the Jurong Town Corporation, its parks to the Parks and Recreation Department, its swimming and sports complexes to the Sports Council, and bus interchanges to SBS and TIBS. This transfer will take place over the next year or so. When Town Councils are formed, the HDB will transfer the bulk of its estate management functions to the Councils. Housing Board residents, through the Councils, will be directly involved in running the common areas of their estates. The Town Councils will also be given the option to manage the HDB carparks.

In the last 28 years since the HDB was established, the HDB has done a superb job in housing our citizens and giving the majority of our citizens a stake in owning a part of Singapore. From the very beginning of the housing programme, the Government was aware that the problem required quick solutions and the emphasis was on numbers. The Government was also aware that successful public housing means more than building high-rise apartments. All the other facilities that go to make a thriving community had to be put in place. Town and neighbourhood centres with shops and markets, bus interchanges, recreational facilities like parks and stadiums and industrial parks for clean, labour-intensive industries to provide jobs for the residents in the HDB estates all these were built by the HDB as part of its responsibilities. The Government had also to take action to encourage the emergence of leadership at the grassroots level by establishing Citizens' Consultative Committees, Residents' Committees and build- ing community centres so that an HDB estate is not just a collection of flats but a living, thriving, cooperating community. The HDB has been deeply involved in all these attempts and efforts at community building.

The services provided by the HDB have not always been at economic rates. The emphasis was to build in large numbers and put all the ancillary facilities in place quickly. Less attention was paid to making accurate economic calculations. Less attention was also paid in some instances to quality. We have now entered a new phase where we can put more emphasis on quality and price our services more accurately. The overall economic and social environment has changed. It will be the task of the HDB to address this new environment effectively in discharging its functions of providing public housing.

I have covered some of the main policy areas of public housing. Perhaps I can now take, if I have the time, some of the more detailed points that were raised by Members.

First of all, I think it will be useful - since the Member for Punggol has raised this question of building a better city and planning for a more gracious and attractive city - if I inform the House about some of the thinking of the Ministry on planning and conservation. As with public housing, so with urban planning - the emphasis is optimum use of scarce land resources, within limited resources, to achieve a City of Quality and a City of Excellence. This is a very complex and difficult process.

First, as I have already mentioned, land supply cannot be increased significantly. Reclamation is currently done on an estimated contour depth of 5 metres. We are fast exhausting these areas, and as we move into deeper contour depths, the cost of reclamation will increase and we will also be encroaching on available anchorage areas and shipping lanes which, of course, are very important if Singapore is to continue to be the kind of port that it is today, the leading port in the world. Secondly, with our limited land resources, we must satisfy many competing needs for housing, industries, transportation, recreation and defence. In fact, just now when I was speaking about market value of land for public housing, there was one aspect that I did not touch upon. It is not just merely a question of determining what is the market value of residential land but what is actually the economic value of the land. What are the alternative uses that the land can be put to? Should it be put to defence uses so that we can be assured of our security? Should it be put to water catchment areas so that we can increase our self-sufficiency in water? Should it be put to industrial use? These are all questions which any responsible government has to grapple with. So we have needs for housing, industry, transportation, recreation, defence: all these needs to be met within a very small area that we have. Because these are needs of a nation. As I have mentioned in the past, there may be cities in the world with the population and area of Singapore, but these are cities in a larger nation and uses such as defence and others are found outside the city. But we are just a small island, we have to find land for all these uses. This creates a very difficult and complex problem.

To achieve our objectives, we have set up in the Ministry a Strategic Planning Division. This Division, which was set up in October last year, will play a coordinating role in meeting land needs of the various Government departments and Ministries as well as the private sector. There will be a proper system of land allocation which will take into account the planning evaluation of the Chief Planner, the operational requirements of requesting departments as well as budgetary considerations. The Strategic Planning Division will also oversee the review of the Singapore Concept Plan which will set the long-term development strategies for the whole island so that land for major development needs can be safeguarded. We have to think long-term. We have to think in terms of the population size that we will have in the years to come. And we have to think, as I mentioned just now, in terms of our future generations.

The Concept Plan is developed in greater detail into development guide plans for each area. In working out such a plan, our planners take into account the objectives and desired land use for the area while preserving the special assets and characteristics of the area. An example of such a plan is the draft Master Plan for the Civic and Cultural District that we announced recently. This is now open for public comment and for public suggestions. To give another example. Our planners are currently looking at the Rochester Park/Ayer Rajah area, which will be of interest to the Member for Pasir Panjang. The assets of the area, like the attractive residential estates, ie, Rochester Park, Nepal Park, Wessex Estate and so on, and the proximity to Kent Ridge Science Park and the NUS Complex as well as the NUH, all lend themselves to alternative development options rather than extending the HDB estate. If we had followed the old thinking, we would just expand the HDB estate and put more public housing there. But because we are now looking at the possible alternative uses for the land in the long-term perspective, we can now begin to think of other options.

Similar plans for conservation areas and reclaimed land, like Marina South, are being reviewed. Such plans take into account the need to phase development in accordance with our needs, including interim use. In the case of Marina South, I would like to take the opportunity to inform the House, since the Member for Punggol raised it, our long-term plan for the area. The long-term plan is really to expand the City centre, Shenton Way, Raffles Place into Marina South to form a commercial core. It will form an enlarged Downtown. The area south of the Expressway will have a mix of commercial and residential uses. There will be a coastal park a nature park, for leisure and recreational activities. In addition, there will be a substantial zone for institutional use, such as cultural and civic uses. Two MRT stations will serve the Marina South, around which intensive commercial developments are planned. But these are long-term plans. There is, of course, an interim plan. In the interim plan, most of the land will be used for recreational and leisure uses. We are selling the land on 20-year leases so that they can be put to interim use and at the end of the 20 years we will be more ready to build the long-term city in Marina South.

Regarding conservation, which was also a subject touched on by the Member for Punggol, the Strategic Planning Division will also oversee the conservation programme. The objective of the conservation programme is to preserve our heritage and give Singapore a distinctive character as an Asian city. Under the conservation programme, we have identified about 100 hectares or some 4% of the City centre as historic areas which should be preserved. The Government's role in conservation is to designate the areas to be conserved, stipulate the conservation guidelines, initiate pilot projects and provide the infrastructure, such as pedestrian malls and car parks. To this end, the Government has appointed the URA as the National Conservation Authority. Since the conservation plan at the end of 1986 was announced, the URA has initiated the Tanjong Pagar Conservation Project. I think Members who have driven past the area will see work in progress. The URA has announced a draft Master Plan for the Civic and Cultural District which I referred to just now. It will soon be announcing the Draft Guidelines for Chinatown, Kampong Glam and Little India, which are all identified as conservation areas. Pilot projects in these areas will be launched this year and in the next few years. The involvement of the private sector is a key requirement for the success of the conservation programame. This is because 75% of the areas identified for conservation are in private ownership. The response from the private sector so far has been encouraging. How quickly the conservation programme will progress will depend on the continued participation of the private sector.

Another key component in developing a City of Quality is the active involvement of people in the planning process, not just people in the Government and the Planning Department but of citizens as a whole. It is with this reason in mind that my Ministry has started a programme to consult the people before the more important plans are finalized. The Civic and Cultural District area is the first such plan. In this way our development plans can reflect the aspirations of our people and the way we want to shape our physical environment. The public consultations programme provides the opportunity for members of the public, developers and professionals, and others who have an interest in our City to contribute their ideas and to make their comments.

Can I now take some of the other points? The Member for Toa Payoh raised the problem of upgrading the old HDB estates. As the old Housing Board housing estates are demolished, the intention is, of course, to build new flats, but the actual schedule and programme has not been finalized. It is important, as I said just now in my statement on the pricing of HDB flats, that we put these areas to good use. It is important that we know what is the actual relative value of these lands that will be available. Therefore, the Housing Board will have to take some time to work out the programme and test the market slowly, as it builds new flats in these areas which are cleared. So there will be no quick building of flats in areas where we have knocked down the 1-room flats. I think we need to take our time, we need to plan well, and we need to get the maximum out of these areas. Therefore, Members here should accept that they cannot expect to see a sudden sprouting up of new blocks in the areas where 1-room blocks have been knocked down.

The Member for Cairnhill asked about the SIT flats in Farrer Road - that there are vacancies there and they are not being rented out. This area again is a very valuable area. It is now occupied by old rental flats and it is necessary that we put the land to good use. We would like to redevelop the area and, if we want to redevelop, of course, we should not fill the area with new tenants. So as and when the flats are vacated, the intention is to leave them vacant so that, as people move out and upgrade and buy their own flats, we will be able to knock down the blocksand redevelop the whole area. That is the reason why we have not been renting out these flats to those who want them. For the same reason, we cannot convert them into old folks homes, as was suggested.

As for Anthony Road flats, again the Member for Cairnhill asked:when are we going to sell them? I think Members are aware that the rentals of these flats have been brought down to market levels. There is now a higher occupancy. As soon as the market is right, they will be sold. As a developer we have the responsibility. As a Government we get the best. This is in the interest of the people as a whole and I do not think it is in the interest of our society that we should just get rid of the flats as quickly as possible.

The Member for Toa Payoh raised a question of renting 2-room flats to those who are now being relocated from 1-room flats. The problem here is that we do not have enough 2-room flats. As a general policy, where certain criteria are satisfied, we are prepared to allow some of them to be relocated in 2-room rental flats. But Members must be aware that there are very few 2-room rental flats that are available for us to offer to those who are affected by relocation.

Regarding shops which are in areas which are being cleared, naturally their business is affected. But I think these shopkeepers have to make their own commercial decisions. It is impossible for the Government to assure business for the shops in any one particular area. In the commercial world, for example, we all know what happened to High Street. It was the premier shopping centre of Singapore at one time. As it ceased being the premier shopping centre, of course, the remaining shops had very little business and they had to go somewhere else where there was business. The same rule must apply to shopkeepers in the HDB estates. They are just tenants of HDB. They have to make their own commercial calculations. If the business is not there, they should give up the shops and go somewhere else. The question of resettlement priority does not arise. It does not arise because they are mere tenants on a month-to-month basis at the present moment. Later they will be converted to term tenants - one, two and three years. They must be allowed to make their own commercial calculations. I think it is important for Singaporeans to be allowed to do these calculations for themselves.

We are constantly being told that the Government is interfering too much in the calculations and in the lives of Singaporeans. But when we allow them to make their own calculations and their own estimates and to act on their own, they want Government assistance. I think you cannot have it both ways. They must make their own calculations.

As to whether we can advise MPs of the redevelopment plans for areas which are now the subject of relocation, as I said, the HDB is now working on these plans. As and when the HDB is ready to build, we certainly will be able to advise the Members of Parliament.

The Member for Bukit Timah raised the question of priority allocation affecting the waiting time for flats. Priority, by its very definition, means that some people are going to jump queue. In fact, that is the whole intention, and the more successful the priority scheme is the more people are going to be affected. When we decide the kind of cases that require priority, we have to consider very carefully whether the particular social objective that we want to achieve is important enough for us to give priority. Having said that, we are also aware, of course, that we should not allow priority cases to hog or take up the whole allotment when a particular block comes up for sale. There is a limit. The limit is 50%. Not more than 50% of any one particular allocation will go to priority cases. But, of course, this can still give rise to unhappiness because there are people who have been on the waiting list who will be affected. As I said, this is something inevitable. But the problem is not as serious as we may think it is. For example, in the case of the multi-tier family housing scheme, out of the 65,941 sales applicants only 1,870, that is just about less than 3%, come under this scheme who will have priority when HDB flats are ready for allocation. There is some displacement of normal applicants but it is not as big as Members may think it is.

The Member for Yuhua raised the question of tender of shops. It is true the Board does establish reserve prices, as is the practice with any real estate owner when he sells or rents shops. But, in fact, the reserve prices in most cases, which are fixed at about 80% of what the market price is, are a guide to tenderers not to tender too high. They will know then what is the market price. Very often they tender at many multiples of the reserve price, which surprises me. But there are very few cases where they do tender less, and then of course we do not sell the shops or rent the shops. But where the reserve price is higher than what the tenders are, the Housing Board will re-tender at lower reserve prices. The Member mentioned that some shops have been vacant for a long time. If she were to give me the details, I would be able to inquire and give her a direct answer.

The Member for Toa Payoh talks about the financial difficulties and the problems of rental arrears and whether the HDB could be more compassionate. To be very honest with the Member, my fear about the HDB is not that they are not compassionate enough, but that they are too compassionate, because when I look at the figures of rental arrears, I do get somewhat concerned. Those who owe HDB rentals fall into two categories. The first category are people who are very poor at financial management or who think that the HDB should be the last to be paid; and this is not unusual. We even have cases where people have submitted plans to renovate their flats but who have not paid the HDB their monthly instalments. Some people tend to think that they can pay HDB last, and the majority of people who are in arrears belong to this category - they either cannot manage their finances well or think they can put off HDB. But there is a small minority who truly have either temporary financial problems or even long-term financial problems. Of course, each case must be looked at on its own merits.

The Member mentioned the story of somebody who died of a heart attack, and the son got crippled, and only one son is working. I do not know the details. If he were to give me the details, I might be able to look at it. But I must say this. I have received many hard luck stories which are very convincing. After all I am also a Member of Parliament and I have my own constituents who come and see me and, as a Minister, many people write to me. In some cases, HDB investigates, and if HDB is persuaded that they have a case, we send it along to the Ministry of Community Development because they have the experts, the social workers, who know how to question and how to investigate and how to find out whether the story is true. When they go through the case, it often comes back with quite a different story. Only a very small percentage are confirmed to be really cases worthy of assistance.

While we are prepared to look at every case - I am not saying we will dismiss the cases put up to us by the MPs - I think we have to take a very hard look at these cases to determine who really requires assistance. But as a landlord, and in a wider context, if we want our public housing programme to continue to succeed the way it has succeeded, people must realize that the HDB, like any other landlord, must be paid. People who buy flats must pay their instalments on time. People who rent flats must pay their rentals on time. They cannot think that they can get away by not paying the service and conservancy charges, or their rentals, or their instalment payments. We must vigorously enforce financial discipline on those who are HDB residents, either purchasers or tenants.

Then we have this very important problem of motor cycles parking in the void decks, raised by the Member for Chong Boon. Yes, I am aware. It is not that I am not aware of this problem. I am aware of this problem and the HDB will be making rules under the HDB Act to empower the Board to take enforcement action against the owners of such motor cycles. If these rules are not sufficiently strong and sufficiently effective, certainly we will consider amending the Act to make the rules effective. So this matter is in hand.

I think I have covered all the points, Mr Chairman.

Mr Chiam See Tong (Potong Pasir): Mr Chairman, may I be allowed to ask two questions on what the Minister has said?

The Chairman: Mr Chiam, you have three amendments standing in your name.

Mr Chiam See Tong: Yes.

The Chairman: And I notice you left the Chamber earlier on.

Mr Chiam See Tong: I did not expect the proceedings to proceed so quickly.

The Chairman: As you were absent when I called your name on the three occasions, you have deprived yourself of the opportunity to speak.

Mr Chiam See Tong: I am going to ask him two questions on what he has said.

The Chairman: Can I make my ruling first?

Mr Chiam See Tong: All right.

The Chairman: If you wish to speak now, you will be accorded the same status as any other Member who has not given notice of amendment and who would like to join the debate. That means, in accordance with my ruling this morning, you can speak but only after Members who have given notices of amendments have made their speeches, after the Minister has replied, and if there is still time left on this amendment.

Mr Chiam See Tong: That is fair enough.

The Chairman: All right. So please resume your seat.

Mr Chiam See Tong: Can I ask two questions arising from what he has said?

The Chairman: Mr Chiam, I do not understand you. I have just made my ruling.

Mr Chiam See Tong: I am not speaking but I am asking questions.

The Chairman: I have made the ruling and I said you cannot speak. You told me that is fair and you still insist. Encik Othman.

Encik Othman bin Haron Eusofe: I think the Minister has not answered one point which I raised, ie, about giving 100% loan to the lower income families. Maybe I should let the Minister answer first.

Mr Dhanabalan: Sir, as the Member himself pointed out, the special incentive is either 5% downpayment for flats which are smaller than 4-room Simplified or 10% for those which are bigger. This is a very low figure. In fact, if I may just give some figures, in the case of 3-room Simplified flats in the New Town, the price is $26,800. Let us say, a person were to buy a 3-room Simplified flat, a 5% downpayment is only about $1,300. It is a very small figure and normally he should have it in the CPF and, if he does not have it in the CPF, anybody who wants to commit himself to such a long-term commitment should at least be able to raise the $1,300. For those who have to be relocated, in other words, they do not voluntarily want to move but because we want to knock down the block of flats we have to move them out, we have waived even this downpayment. But for the others we have kept it very low, and I am not sure whether reducing it to zero is really going to help in such cases. So unless a very good case can be made out, I would not look into it. Unless Members from their own experience can make out a good case that this incentive can really help and that this will not mean that people will enter into obligations which they cannot keep, I will not reopen the issue.

Encik Othman bin Haron Eusofe: I would like to thank the Minister but I would come back to him again on this matter at another time. But let me now speak on the question of urban redevelopment policy and the role of the private sector.

The Minister, in his reply, has mentioned that the URA will invite the private sector professionals to participate in drawing up concept plans for Marina South and other areas in the City. I welcome this statement and I hope that the private sector will take this opportunity to participate. It is not just a question of drawing up concept plans and designs but also the question of the land tenure policy and the type of uses which could be put on this land. We will have to invite them to give their opinions on how they can ensure that there will be investors who will come in to develop lands which are available in the City. The idea is to make the City an interesting place, a City of Excellence, a city of quality, as the Minister has said, and if the public could join in with the URA in looking into ways to develop, to bring culture and to bring leisure and recreational activities in the City, we will bring life into the City. And with the MRT stations which are planned to go into this area, I am sure that this can be done. So my only hope, and I see that the Minister has already made this statement, is that the private sector professionals, the public will be allowed to participate and give ideas and share ideas on how we develop our city. And if they do so, and we can hope to see a better city in the future.

Mr Tang See Chim (Chua Chu Kang): Mr Chairman, Sir, may I take up a few points raised by the Minister on his HDB policy statement.

The Chairman: Mr Tang, you were also absent earlier on when your name was called. The ruling I have made in regard to Mr Chiam's request also applies to you.

Mr Tang See Chim: That is correct, Mr Chairman. But I am notspeaking on my amendments. I just want to take the Minister on on the points he raised in his policy statement on HDB.

The Chairman: You can take the Minister on at the end of the amendment, if there is still time left. Dr Koh.

Dr Koh Lip Lin: Sir, I just want to make some comments on the role of the Urban and Rural Services Committee (URSC).

For many years, the URSC has been known to the MPs and the community leaders of various rural constituencies as the Committee which gives grants to construct or improve the basic facilities of rural areas. In the past, the major part of the URSC budget was spent mainly on projects such as upgrading of kampong roads, providing street lights, electricity and water, improvement of drainage, etc. With the gradual disappearance of rural areas in Singapore, the need for these projects is also disappearing. There are now very few kampongs or villages where such projects are needed. I therefore wish to ask the Minister what will be the future role of URSC.

Sir, URSC has served a very useful purpose in the past. With only a small budget of a few million dollars a year, it has succeeded in providing the basic facilities in rural areas. I have the honour to be a member of the URSC for nine years and I can say that it is one of the most pragmatic, down-to-earth and most effective government committees that I have ever seen. The little money spent each year has contributed so much to the convenience and welfare of so many people in the rural areas. I hope the Ministry will not dissolve the URSC or reduce the funds given to the URSC. Instead, the role of URSC can be widened to include projects which previously do not come under the jurisdiction of URSC, for example, upgrading of facilities in public housing estates, improvement of environment of housing estates, and so on. I am sure the few million dollars each year given to URSC will bring about most fruitful results.

Mr Ng Kah Ting: Sir, under this subject, Road Networks, it also features an important aspect of the overall concept of land use, as what has been explained by the Minister earlier on in his statement. With our limited land available for transportation needs, we have to ensure a very good road network system. Our present road system provides good links between major population centres and the commercial and industrial areas.

Sir, the MRT has now also come in to enhance our transportation facilities. But, nevertheless, we think we can further improve on our road network. For example, our New Towns can be planned with road linkages and this is to minimize the need for major road widening or realignment of existing roads which can be very inconvenient and destructive and can also be quite costly and it can also mean more land to be used.

A case in point, Sir, is the widening of Upper Serangoon Road to Punggol Road. It is being covered under the road development. The row of shops abutting Upper Serangoon Road will have to make way for road widening. That reinforces the point that I made earlier on. We need a more integrated road network and perhaps with a major road system which would inter-connect our New Towns. It can be seen that the New Towns are not close to one another, but certain of these main expressways inter-connect them. I hope we could realign and devise a system whereby these New Towns can be inter-connected through a better network of road system so that transportation time to these New Towns will be reduced.

Mr Ng Kah Ting resumed his seat.

The Chairman: Mr Ng, I notice you have two more amendments. Would you like to continue?

Mr Ng Kah Ting: Yes, Sir. On this question of the Master Plan, I was happy to note that the Hon. Minister has taken us through this in response to my GPC's proposals and that he enlightened the House on the setting up of the Strategic Planning Division which will be most welcomed. Because at least we have a unit that is charged with a central responsibility to coordinate the master planning of the entire Singapore, as was mentioned, with only 570 sq km of land, at the most with reclamation another 50 sq km or so will be added. So every inch of land is worth more than an inch of gold as the saying goes. But what is more important, Sir, as was already pointed out in the Master Plan for the future. What I hope to see is that the planning will take a period of not less than 50 years or more, beyond the year 2030, so that our responsibility will not be undischarged for future generations. The public may make suggestions, recommendations or conceptual planning to this overall Master Plan. But, nevertheless, I am of the same view with the Hon. Minister that we should take this very seriously as nation building belongs to the people of Singapore. Every one has an important role. This is our land, this is our country.

Mr Ng Kah Ting resumed his seat.

The Chairman: Mr Ng, you have a third amendment on agrotechnology.

Mr Ng Kah Ting: Yes, Sir, I will take on the subject of agro-tech. Yesterday, the Minister for Finance in his reply to the suggestion that I proposed that agro-tech will play an important role besides increasing food production and developing agro-tech expertise. And the Minister has accepted our suggestion that perhaps a pioneer status could be considered and he has informed the House that he will be asking the EDB and MTI to look into this. So here we are moving in the right direction in agro-tech, given our very limited supply of agricultural lands.

Sir, we went to the Primary Production Department (PPD) for a visit and we were told that there were some agro-tech parks comprising lands at Sungei Tengah, Murai, and Loyang, with some 2,000 hectares of land and which forms about 3-3 1/2% of our total area of 60,000 hectares. But what we were disturbed to hear was that the lease for such agro-tech would only be for some 20 years. We would like to suggest that 20 years is not sufficient. As I put the case before the House two days ago, the R&D, apart from setting up the agro-tech farms, will also have to be set up, with this, there is tremendous scope for the development of agro-tech. And surely this will increase the productivity, production, quality and so on, so that we will not have to be dependent on imports. And having developed this expertise, we may sell our expertise. For example, in the field of intensive pig farming, with pig farming to be phased out by 1989 as I was told, there is this reservoir of expertise which could be exported. We could use Singapore as a centre of such expertise and pass on this expertise to our neighbouring countries. We could even encourage, as the Hon. Minister for Finance in reply to the Member of Jurong, the Senior Parliamentary Secretary (MCI), that our nearest neighbour, Johor state in Malaysia, would be a very important area where we can encourage investment. So it is with this in mind that I raise this subject and, therefore, the Primary Production Department should help to develop such expertise so that we become the services centre in this region.

The Chairman: Encik Othman. He is not here. Dr Koh Lip Lin.

Dr Koh Lip Lin: Sir, the decision of the Government to phase out pig farming in 1989 has some important consequences. First, it means that Singapore will have to depend entirely on imported pork or pigs from 1989 onwards. I would like to know what measures have the Minister taken to make sure that Singapore will continue to have adequate supply of pork of good quality and at reasonable prices.

My second question concerns the future of pig farming and pig farmers. The phasing out of pig farming means the pig farmers have lost their last frontier in Singapore. It was only a few years ago that these pig farmers from places such as Nee Soon and Chua Chu Kang, were encouraged by Primary Production Department to pool their capital and resources together to invest in pig farms in Punggol. And they are now asked to cease their operations by next year. The Government has indicated that they will be compensated according to a scheme, details of which have yet to be announced. I hope the Government will be sympathetic in deciding on the terms of compensation because the Government is to be blamed for leading or misleading them into this dead end.

Finally, I would also like to ask the same question as asked by the Member for Punggol, that is, whether the Government will be taking steps to encourage export of our expertise in pig farming which we have acquired during the past few decades, whether Singapore can provide consultancy and technical services in the field of pig farming to pig farms in neighbouring countries.

Mr Tang See Chim: Mr Chairman, Sir, under the Primary Resources Programme in this Budget, it has got a very grand sounding objective of:

'To ensure the adequate supply of primary produce to meet local consumption requirements.'

Previous to this, Singapore was adequate in the supply of pork, poultry and eggs. But since the Primary Production Department implements its policy, we are now neither adequate in the supply of pork nor in the supply of poultry, nor in the supply of eggs. We have a policy for everything but somehow we do not seem to have a policy for our agricultural sector. We have very high-sounding names like agrotechnological parks. Why can't we call a farm a farm? In fact, we did away with the farms. We were adequate in our supply of some farm produce but we resettled the farmers. And now we are trying to replace the farms. It is just like Bugis Street, Mr Deputy Speaker, Sir. We had a Bugis Street that was good for tourism. But for public environmental health reasons, we disbanded the whole place and now we are trying to recreate Bugis Street. It is the same thing here.

I would like the Minister to announce a definite farming policy. My colleague from Yishun has just spoken and I associate myself with his sentiments. We asked farmers to go into a piece of land to do farming, and overnight, in mid-stream, policies changed. There is really no point having very grandiose sounding policies when what we need are actual down-to-earth policies. I would commend the Minister to look seriously into this problem and to announce a definite policy and to stick to such a policy instead of changing policies like we change clothes.

Mr Ng Kah Ting: Sir, I would just like to touch on resettlement policy. This is in regard to land that has to be urgently cleared. I must say that one such piece of land which is in Punggol has to make way for the expansion of Woodbridge Hospital.

Many people have been resettled, some not in areas, of their choice and some others, if they want flats in areas of their choice, will have to vacate from the site first and to rent flats elsewhere as an interim measure so that development can be speeded up. In this respect, my question is: will the Government consider helping these people who are greatly inconvenienced as a result of urgent clearance? After all, in the case that I mentioned, there are not more than 100 families.

Secondly, on the question of non-priority of allocation of shops as a result of clearance. We accept that. But can we not ask of the Government to consider raising the preferential margin for tendering of shops, say, from 10% to 30% to help shopkeepers relocate into HDB shops? Earlier on, the Hon. Minister in his reply said he was surprised why tenders were not put at the reserve price of the tender but were actually put at a much much higher price. The answer is very simple. There is a demand for these shops. Let us say, there are 5 or 10 shops for tender but we have got 100-200 wanting to apply. So only 5 or 10 applicants will be successful. Naturally, Sir, I submit, everybody will want to put up a higher tender price. It is as simple as that. I am quite sure if this suggestion can be favourably considered, it will go some way to help alleviate the trauma of resettlement of our shopkeepers.

Sir, as regards resettlement of farmers, I am talking of farmers who have large families. These families will have to be broken up. These families have been in the farms for, perhaps three or four generations. I think the hon. Minister of State for National Development himself is aware of this because he comes from an area where I and a few other MPs come from. So although the farmer is compensated with quite a sizeable amount of ex gratia compensation, he faces the prospect of not getting any employment simply because he and his family has been farming for generations. Another case in point is to be found in the Lim Chu Kang area, in the constituency of my good friend, the Member for Chua Chu Kang. So the cash grant together with other enhanced compensation that this farmer receives will have to go towards the payment of a few HDB flats, on average, 2 or 3 because, as I said, of the break-up of these large families.

The other difficulty they face is that their prospect of employment is practically nil. Let me elaborate. In addition to encountering this problem, they have to adjust themselves to living in the flats. And whilst adjusting themselves in a new environment and trying to get analternative trade or a job, they have to make use of whatever cash grants and resettlement benefits that they have received. The net result is that their cash vaporize rather too soon. So post-resettlement problems arise. They come back to us and ask for assistance to help them obtain hawker stalls, lock-up shops. I do not think we should turn them away. In fact we should try to help them. After all, Sir, we have been elected to serve our constituents. They come to us for help and we try our best to help them. In this respect, could I ask the Government to, at least find a way to look at the predicament and assist these resettled farmers.

Dr Koh Lip Lin: ( In Mandarin): Mr Deputy Speaker, Sir, in the past 20 years, our various development plans involving the building of new towns, industrial zones and new network of roads have all been very successfully carried out. It has been mainly due to well conceived resettlement planning and its execution. But many people have been affected by resettlement. Although there have been various schemes of compensation and concessions for them. Following changing times and circumstances and consequential amendments to compensations and concessions and changes to rules and conditions, these have resulted in some people being happy and some other people being unhappy and dissatisfied, the details of this I would leave to the Member for Chua Chu Kang to let us know.

Now I would like to direct my attention to the point of shop compensation. In the past, shop owners affected by resettlement could get priority allocation of shops and also five years' rent rebate concession. Since last year, the rental concession and priority allocation was cancelled and was replaced by $26,000 cash compensation. Some shop owners accepted this scheme while others felt certain dissatisfaction. The dissatisfaction of those shop owners affected is mainly because for many years in the past, their business had been quite all right. Since they came to know they are affected by resettlement, they have been hoping to be allocated a new shop so that they could have a new chance to start all over again. But now they are very disappointed because under the new scheme all their hopes are dashed and their many years of dreams could not be realized. What a great blow to them! Many of them had only one trade or one kind of career all along for many years. Some people have been in the same traditional type of business or shop-keeping for years. Therefore, they could not adjust and adapt to new situations and new jobs. So I hope the Government will understand their difficulties and give such people more concessions where possible, particularly those shop owners who have before the new scheme been subject to notice to resettle. There are many ways to give concessions. Certain concession could be like what the Member for Punggol had earlier suggested, for tender concession increasing the 10% margin to 30%, at the same time, reserving certain shop houses for such shop owners who have been affected by resettlement to tender for them.

Mr Tang See Chim: Mr Deputy Speaker, Sir, I would like to associate myself with the sentiments expressed by the Member for Yishun on resettlement. I would like to appeal especially to the Minister to consider the hardship faced by people affected by resettlement. To the Resettlement Department, they may be one digit, a number. But to the person affected, it is his livelihood. It is really very important. While it is, of course, theoretically correct to say that the best way of allocating scarce resources is to leave it to market forces and the best way is by tender, but I say, let us be a bit more compassionate, not just be desiccated, economic, calculating machines. Let us use the heart a little bit and consider the livelihood of these people, the farmers, the shopkeepers, who are affected.

Sir, I would like specifically to supplement my colleague's point on the payment and assessment of compensation. You know, the Resettlement Department is very efficient when it comes to counting trees, shops and other items that count for compensation. But when it comes to paying the compensation, it takes a long time. In the meantime, people are asked to move out. People in the rural areas who are affected, have got no money to pay for the flats that are allocated to them. They dare not take the keys to the flats. Because as soon as they take the keys, they have to pay rent. But they have no money. Yet at the same time they have a sum of money to their credit with the HDB because they are entitled to compensation. With the facilities of the computer these days - and Ministers are now talking of a cashless society - why can you not pay them by Giro? Why can the Resettlement Department not establish a Giro system? There is this number; okay, so much compensation is due. Just input the figure and it will appear on the computer in the Sales Section. So you know that this person has a credit, and you could just allocate a flat to him. Instead, he has got to wait for a long, long time for compensation. In the meantime, various notices are given to him to go and select a flat. After the third notice, he is deemed not to be interested in the selection of a flat and he is supposed to look for his own alternative accommodation. How could that be? He has got a sum owing to him by the Resettlement Department. Here, you are asking him to pay for the flat. He dares not take the flat. And if he does not take the flat after three letters asking him to go and select a flat, he is deemed not to be interested. How could you deem such a thing? Of course, he is interested. It is most unreasonable to deem that he is not interested.

Sir, I would appeal to the Minister not to allow the bureaucrats to deem this sort of thing. Let us be compassionate. Let us look at the matter carefully and let us treat the resettlement problem with compassion and not just purely on economic theory. I cannot gainsay the economic theory but I would really appeal to the Minister to be a bit more compassionate.

The Chairman: The two amendments standing in the name of the Member for Pasir Panjang cannot be discussed as these concern details of expenditure and are not appropriate to the on-going discussion on policies. Dr Lee.

Dr Lee Boon Yang: Sir, I will take up the point raised by the Member for Nee Soon concerning the future role of the Urban and Rural Services Committee (URSC). It is true that the rural areas are rapidly shrinking in Singapore. In fact, most rural constituents who used to enjoy the services provided by the URSC are now actually residing in public housing estates. It is therefore timely for URSC to look into extending its services to cater for the needs of residents in public housing estates.

I would like to assure the Member for Nee Soon that my Ministry will not dissolve the URSC. In fact, my Ministry has set up a Sub-Committee under the URSC to study and review the existing role and function of the Committee. The Sub-Committee will also recommend the future directions for the Committee. It will consider the future roles to be played by URSC after the establishment of town councils to manage public housing estates. One suggestion under study is a proposal that town councils be allowed to apply for URSC funds for projects which are similar to those currently being funded by the URSC. Projects which will help to enhance town council estates and benefit the residents may also be considered. The study is still in progress and Members will be informed of the outcome in due course.

May I now turn to the points raised by the Member for Punggol. The Member has suggested that we should capitalize on the progress that we have made in farming, agriculture and that we should consider exporting our services. He has also agreed that we are moving in the right direction in promoting agrotechnology.

Sir, one of the objectives for developing agrotechnology parks is to develop Singapore into an agrotechnology service centre in this part of the world and also for other tropical areas. This includes providing consultancy services for farm design, construction and management, turnkey farming projects, farming machinery and equipment and veterinary drugs and biologics. To achieve this objective, the Primary Production Department has been working closely with EDB to attract investments in hi-tech demonstration farms which can also carry out some R&D in agrotechnology. These farms can help to spearhead our efforts to become an agrotechnology service centre.

The incentive scheme that is being worked out would include pioneer status, investment allowance incentives, double deductions of R&D expenses, and industrial building allowances to such companies. At the same time PPD will continue to provide supporting services to agrotechnology farms.

I agree with the Member for Punggol that there is scope for us to export our farming expertise. In fact, some of the services are already being provided by companies operating in Singapore. A group of companies are already providing pig farm design services, aqua-culture development services and animal feed advisory services to other farms and companies in the region and as far off as the People's Republic of China.

The Member for Punggol also raised the point about the tenure of land in agrotechnology parks. He asked: why only allow a 20-year lease for such an intensive development?

Sir, the land within the agrotechnology parks can only be committed for a period of 20 years in the initial period, as it is not possible at the present moment to foresee the use of such lands in the future. PPD has looked at the length of time required for the development of economically viable high technology farms. It has found that 20 years will be a reasonable period. However, the Government will continue to review the lease of land and will consider extending the lease whenever it is possible and desirable to do so.

Sir, the Member for Nee Soon asked what is being done to ensure an adequate supply of good quality pork. The Primary Production Department has embarked on a programme to diversify its sources of supply of pigs and pork to Singapore. The Department has currently accredited 73 pig farms in Malaysia, 17 farms in Thailand and eight farms in Indonesia for the supply of live pigs to Singapore.

Mr Tang See Chim: What about our pig farms in Punggol?

Dr Lee Boon Yang: They are in the process of being phased out.

These farms have a combined capacity to export 1.2 million live pigs a year to the Singapore market. As our demand for live pigs is estimated at about a million pigs a year, the potential supply will be more than adequate even after all the pig farms, including those in Punggol, have been phased out by the end of 1989.

In addition, the Primary Production Department has approved the import of frozen pork from 17 countries. Notwithstanding all these new sources of supply, the Primary Production Department will continue in its effort to explore and identify other sources of supply.

Sir, the Member for Nee Soon also asked what is going to happen to pig farmers with the phasing out of pig farms. The answer is simple. If pig farms are phased out, pig farmers will have to look for other areas for their employment or for other business development. Phasing out of the pig farms is necessary to protect our precious environment from the pollution caused by these farms. Government cannot be blamed for wanting to protect our environment. My Ministry is aware of the difficulties faced by farmers as a result of this decision. So pig farmers who are due to be phased out will be adequately compensated when they are required to stop pig farming. For those who wish to take up other forms of farming, such as non-pollutive farming, the Primary Production Department will continue to assist them with the necessary technical advice. They can take up land within the agrotechnology park or even other State lands which are not required immediately for other development. This land can be made available to farmers on short term leases for them to continue farming provided it is of a non-pollutive nature. Some pig farmers who are facing a closure of their farms have gone into other food-related business, such as trading in pigs, setting up of food retailing outlets. Others have also taken up to joint venture with farmers in neighbouring countries to develop pig farming and other forms of farming.

Sir, the Member for Chua Chu Kang refers to the objective of the Primary Resource Programme to "ensure adequate supply to meet local consumption" as a high-sounding objective. Let me say that it is not high-sounding objective. It is a pragmatic realization that while we cannot produce all the food that we need, we can supplement the little that we produce with good quality imports. So in anticipation of a reduction of local food production due to resettlement of farms to make way for other development, as I have said earlier, the Primary Production Department has been actively identifying and exploring alternative sources of food supply. This together with our open market policy has helped to facilitate more imports of food to meet domestic consumption. Together with the development of agrotechnology farms to go into more intensive forms of farming, we should be able to produce a significant proportion of the food that we need in the future. We envisage that we will be able to produce a significant proportion of the poultry, eggs and vegetables which are needed for domestic consumption if we develop these agrotechnology parks fully.

Sir, I now turn to the points raised on resettlement policies. The Member for Punggol asked whether the Government will consider helping those people who are greatly inconvenienced as a result of urgent clearance programme. Sir, under the resettlement scheme those people who are affected by resettlement are given priority to select flats and as far as pos- sible they will be offered choices of flats in the areas which they prefer. From the time they receive the clearance notice, they are invited to select flats in the HDB allocation sessions. These selection sessions may stretch over several months until they finally select the flat of their choice or one which is as close to their choice as possible. However, when flats they prefer are not available, the Resettlement Department normally allows them more time to consider other suitable flats. In some cases where they need rental flats as an interim measure where they are unable to purchase a flat, HDB will also assist them by providing such rental flats.

The Member for Punggol, and I believe the Member for Nee Soon also, touched on this question of preferential margin for tendering of shops which is granted to those shopkeepers who are affected by resettlement. Sir, the new resettlement policy which was announced on the 28th July, 1987, provides for this preferential margin on the tender sum to be given to a resettlement shopkeeper who is tendering for an alternative shop. This is 10% for sole occupiers and 5% for tenants. The margin is valid for 18 months after payment of cash grant. Eligible shopkeepers are issued with a letter which identifies them as being affected by resettlement and they will be able to submit a copy of this letter along with their tender.

Just to give Members an idea of the result of this tendering exercise. Between October 1987 and January 1988, HDB conducted five shop tender exercises in various housing estates. The responses from the resettlement shopkeepers - 197 of them tendered, number of resettlement shopkeeper who were successful, 18 out of the 197. The number of successful shopkeepers ---

The Chairman: Order. It is 4.00 pm. Moment of Interruption.

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

Mr Dhanabalan: Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made progress on the Main and Development Estimates for the Financial Year 1st April 1988 to 31st March, 1989, and ask leave to sit again tomorrow.

Mr Deputy Speaker: So be it.