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

Order read for consideration in Committee of Supply [10th Allotted Day].

[Mr Deputy Speaker in the Chair]

11.08 am

Head R -

Resumption of Debate on Question [28th March, 1988],

"That the total sum to be allocated for Head R of the Main Estimates be reduced by $100." - [Mr Lim Boon Heng].

Question again proposed.

The Minister for Labour (Mr Lee Yock Suan): Mr Deputy Speaker, Sir, when we adjourned yesterday, the Member for Leng Kee was clarifying what he meant by "factor intensity". I was not quite clear about the meaning. What he explained was whether we tend to allow more foreign workers to work in capital-intensive industries and less in labour-intensive industries. My answer is no. We allow foreign workers in each approved company in the manufacturing sector up to 50% of its workforce. If a company employs 400 workers, it can employ up to 200 foreign workers. So there is a corresponding relationship to the workforce. The more labour-intensive industries would tend to have more foreign workers.

Mrs Yu-Foo Yee Shoon (Yuhua): Sir, I would like to speak on the use of contract workers.

In the past year, feedback from our unions indicate that there is an increase in the use of contract workers. This practice is not limited to one or two areas but appears to be more widespread. At present, contract workers are employed in the shipbuilding and shiprepairing industry, the construction industry, the electrical and electronics industry and even in statutory boards and Government departments.

We can understand that in some cases, the use of contract workers is beneficial to both employers as well as full-time permanent employees. This is because when there is a downturn, retrenchment of full-time permanent employees can be made a measure of last resort. However, there appears to be other reasons for the use of contract workers. Some companies which have been unable to recruit sufficient workers have resorted to labour supply contractors to meet their shortage.

Other companies appear to use contract workers because of lower costs. Some of them do not pay CPF or provide medical and other fringe benefits. Because of this, they attract workers by offering higher take-home pay.

I am concerned with the abuses that go with the use of contract workers. Contract workers are not required to conform to the basic rules of the companies. They are not required to record their attendance with the punch-card system which apply to other employees. In cases of misbehaviour, they are not subjected to the company's disciplinary regulations. These differences must and have affected the morale of the direct employees. If the practice becomes more widespread, workers in general will also be adversely affected.

It is therefore necessary for the Ministry of Labour to monitor the situation and check abuse. We should also be concerned that the use of contract workers will have an adverse effect on skills. There will be little incentive for employers to provide training for such workers.

I am also surprised that even statutory boards and Government departments are increasingly using contract workers. Some of them may be doing so to circumvent the directive of the Ministry of Finance to trim the public sector staffing strength.

The NTUC received a complaint that one statutory board actually pressurized long-serving employees to transfer to another subsidiary on contract terms. This is unfair treatment. I would strongly urge the Ministry of Labour to look into the matter urgently.

Mr Lee Yock Suan: Sir, I would like to thank the Member for Yuhua for bringing up this problem.

The use of contract workers has been a common practice for some time now, especially in the construction and shipyard industries. The reason is that it is a convenient means of meeting the cyclical demand pattern of these particular industries.

What is new is that they are used recently by some electronics firm and, as the Member has just told us, maybe also by some Government departments. Following complaints, my Ministry has been studying the practice more closely and we are still looking into the matter. Our studies show that it is not entirely true that all contract workers do not have protection. Many are paid CPF contributions and other statutory benefits as stipulated in the Employment Act. However, they are unlikely to be given any retrenchment benefits when their services are no longer needed.

In many instances, contract workers are direct employees of labour suppliers. The labour suppliers act as the employers. The workers could be either local workers or foreign workers. They are deployed to work at the premises of the labour suppliers' clientele which are usually shipyards, construction firms and, lately, also some electronics firms, and maybe even garment firms. These workers are normally daily-rated employees and, like regular workers, enjoy annual leave, sick leave, public holiday pay and so on as well as transport and accommodation provided by the labour suppliers. Many labour suppliers also make CPF contributions for local contract workers and pay the levy for foreign workers to the Government.

However, I understand the Member's concern. I think my Ministry is equally anxious to make sure that there are no abuses and that the use of contract workers is not a means to circumvent the Government's policies, for example, on controlling foreign workers or to avoid paying the levy, and so forth. We also want to make sure that the workers are adequately protected, that their interests are protected.

As for the case of the Government department involved, I think the Member should bring up the particulars to the relevant Ministry, and maybe the Minister for Finance, for his attention.

Mr Lim Boon Heng (Kebun Baru): Sir, two weeks ago the Member for Ayer Rajah introduced in this House a Report supporting the use of CPF funds for the tertiary education of CPF members' children. I think it was a well-documented report and a persuasive document. Certainly the issue is a popular one. We all know it through discussions with our grassroots leaders in our constituencies and it is quite natural for us to come to this House to press the case.

In our GPC for Labour, I was against pursuing the matter after the Minister's comprehensive reply to this House last year and also in other forums. So I thought to pursue the issue would be like flogging a dead horse. However, the issue is such a popular one that I acceded to a re-examination of this issue in my GPC.

My GPC is divided on the issue. There is a majority view, however, that the proposal should be supported. My GPC members would therefore speak their own minds. I have had further reflections on the subject and must regrettably tell my friend, the Member for Ayer Rajah, that I am not in favour of allowing CPF to be used for education. Let me explain why.

As Members of this House, we should not merely articulate popular feeling on an issue. Certainly we should to so. But we should give our considered opinion, our own individual considered opinion on the issue. What the people want may not always be the right thing to do.

Take the case of allowing investment of CPF funds in shares and gold. What was the origin of this idea? I recollect that at a time of high interest rates, the CPF interest rate was fixed, I believe, at 6ª%; people were unhappy. They said that the CPF interest rate ought to be higher. Many said that they could do better if they were allowed to invest the money themselves and no amount of explanation - that we should take a long-term view, that we should consider the difficulties of investing large sums of money - would satisfy the public. And if my recollection is right, Members of this House pressed the case of the public very assiduously to the Minister for Labour. So the Government acceded and pegged the CPF interest rate to the average rate of the four big banks. Government also allowed CPF holders to invest their CPF money within certain limits.

Then what happened? When the stock market crashed, what do we hear? Some who lost their monies blamed the Government. In fact, I recollect that there were people outside who said, "You know the risks. Why did you allow me to lose my money investing in the stock exchange?" I agree people are now wiser about investment in stocks and shares. The lesson is learnt that it is not easy to invest money. And the Government's original policy on CPF interest rate was not wrong. In fact, now I think many would have preferred that we had left the CPF interest rate where it was, at 6ª%.

Once CPF was allowed for investment in what is described as the Stock Exchange Casino, the arguments for allowing the use of CPF for tertiary education became stronger.

The fact that we have also introduced the Minimum Sum Scheme has weakened somewhat the Government's case for not allowing the use of CPF for education because it is very easy to argue that investment in education is sounder and more valuable than investment in stocks and shares. I have my reservations because CPF for education means different things to different people. We are talking about tertiary education here. But in the homes of the lower income group and among workers, they are talking about CPF for primary education and secondary education, not tertiary education.

If we allow CPF for tertiary education, then on what basis are we to deny the low-income parents the right to use his CPF to put his children through school? To him it is far more important that he should be allowed to use his CPF savings in order to ensure that his child or children get through primary and secondary school. In our dialogue with trade unionists, we have been from time to time urged to ask the Government to allow them to pay from the CPF the bills which they are unable or find difficulty to pay. For example, PUB bills. Have we not, as Members of Parliament, received appeals from our constituents to help them obtain release of their CPF funds to pay for PUB arrears, rent arrears, service and conservancy charge arrears? How are we to explain to them that we can allow the high income earners to use the CPF savings for education of their children but not to allow the poor the use of the CPF for schooling of their children?

I think we will be opening Pandora's box if we proceed with the suggestion. More requests will be made. More items will be loaded on to the CPF. It reminds me of the loading of the social security systems in many Western countries. To fund the increased demand, more taxes have to be raised but Western governments find they cannot easily raise taxes as the effect of raising taxes has other consequences. So some of the governments in the West have begun to try to unscramble the mess that they are in, to simplify their social security systems. In our case, if we proceed on that road, one bright fresh young Member of Parliament will at a future date be telling us in this House the urgency of reforming the CPF.

Is there a pressing need here that we cannot meet through other means? After all, what is the problem? The problem is that people want to have funds to put their children through university. It is only 10-20% who may be in a position to use their CPF funds for sending their children to university. So I think there are other options available. Let us tackle the problem where it is, that is, the availability of funds for putting their children through university. One possibility is to encourage young parents to plan ahead. Have children, plan ahead for your children, set aside some savings regularly so that when they reach the age to go to university there is a sum for them to meet their expenses. They could set up this savings account in the names of their children. There is also another alternative, and that is, to buy insurance policies for the education of children. Many of these policies are available now, including NTUC Income. For those whose children are already grown up, the time is past to talk about buying insurance policy or saving up. But what is the alternative? They can take up loans. We have a tertiary education loan scheme implemented last year. I was in the United Kingdom recently and they are talking about a loan scheme for their own education system. From what I understand, in our own loan scheme, so far the number of people who have to take loans is very small. Maybe the Minister could let us know how many people have taken loans and what amounts have actually been taken up. But the amount has been very small. Therefore, it shows that there is no real difficulty of parents to send their children to university.

I hope that Members who favour using CPF for education will reconsider their position. But I do not think the Member for Ayer Rajah would take "No" for an answer easily. It is not in his nature and I would be very disappointed if he did. So I hope he will say his piece, listen to the views of other Members, the reply of the Minister and, if he is still not convinced, then go back, take a re-look at the issue, then come back again to this House next year if he is still persuaded that we should allow the use of CPF funds for tertiary education.

Dr Wong Kwei Cheong (Cairnhill): Sir, I am afraid I do not agree with my Chairman of the GPC as I will be speaking on CPF for education.

Sir, the CPF was established by legislation in July 1985 with the aim of providing financial security for wage earners in their old age. Although old-age security remains the main objective of the CPF, it also has schemes that enable members to use their CPF savings for many purposes, such as to buy flats from HDB and Mindef, for home protection insurance, to invest in approved residential properties, to invest in approved commercial properties, to meet hospitalization expenses for themselves and their dependants, and to invest in shares and in gold. Since the CPF is working out more schemes for public benefit, it should seriously consider a CPF scheme to pay for education expenses.

Sir, education is an investment for the future. Since CPF monies can be used for so many forms of investment, including shares and gold, it is difficult to justify to the public why CPF cannot be used for the education of our children, especially for tertiary education. Education expenses can be classified into two categories: (a) for local education, and (b) for overseas education.

As nominal fees only are charged for primary and secondary education locally, Singaporeans have no financial problems in sending their children for such education. The problem lies mainly in tertiary education, which is expensive, especially for household incomes of less than $1,500 per month. Currently, university fees in Singapore are at $2,000 per year for an Arts degree, $2,400 per year for a Science degree, and $3,900 per year for a Medical degree.

According to the CPF 1985 Annual Report, there are 717,817 or 80.7% of active CPF members as at 31st December 1985 drawing salaries of $1,499 and below. These will be the people whose children will benefit if CPF funds can be used for tertiary education in Singapore.

For overseas education, fees are very much higher and the Minister should seriously consider the use of CPF monies even for overseas education. There is, of course, the danger that some of the overseas graduates may prefer to work overseas for a few years before returning to Singapore and the parents may not be able to depend on them for support in their old age.

For this reason, may I suggest to the Minister to consider allowing CPF members to use their own CPF for higher education. Many Singaporeans today are keen to acquire a second degree, especially after they have worked for a few years. The Government should encourage Singaporeans to upgrade themselves by using their own CPF to study for higher professional qualifications. These are older and more mature Singaporeans and are very likely to return to Singapore immediately after their overseas education. As a security measure, for all monies withdrawn the beneficiary can sign an undertaking with the CPF Board to return the amount to the account holder, once he is gainfully employed, through monthly deductions from his own CPF account. There is strong grassroots demand for the use of CPF for education and I hope the Minister will reconsider this issue.

Encik Abbas Abu Amin (Pasir Panjang): Sir, the various measures introduced by the Government, including the CPF cut, to overcome the recession in 1985 and 1986 were clearly understood by our workers. They have no objection to the new wage policy on wage restraint and wage reform. They have accepted wage standstill for two years now. The workers have accepted all the measures knowing that they are temporary measures to increase the competitiveness and to improve the marketability of goods and services. All the sacrifices, the concerted efforts and other concrete measures taken by the Government have revived our economy.

Now, the question which is always in the minds of our workers is: when will the CPF rate be restored and by what percentage? Even though the Minister has given the assurance that the CPF rate will be reviewed after the first quarter of 1988, the workers feel that the objectives of wage restraint and CPF cut for two years have been successfully achieved and therefore the temporary measures should not be taken longer than necessary.

While measures such as wage restraint and wage reforms are long-term strategies, the Government should consider gradually increasing the CPF rate so as to assist our workers in having sufficient savings to service their HDB flats' monthly instalments and increase savings for old age requirements. This is indeed a test of trust and confidence. The workers cooperated with the Government for two years and made the necessary sacrifices. Now that the economy has recovered and the two-year period is over, the Government should therefore honour its part of the bargain. I am sure the workers will understand and continue to give further cooperation in the future should further sacrifices are needed to overcome impending national crisis.

Finally, I would like also to ask the Minister whether a definite plan has been made on the implementation of the long-term CPF rates of contribution, especially on the various steps to be taken to gradually reduce the CPF contribution for older workers, ie, those in the 55-60 years age group and 60-65 years age group.

Mr Chng Hee Kok (Radin Mas): Sir, like the Chairman of the GPC for Labour, I rise to express similar views. It seems rather unfair that the Member for Ayer Rajah who has done a good job of putting up a very good report is now not able to speak up first on this particular amendment. My name was included in his report as I raised at one time a supplementary question to the Minister to see if he will allow CPF to be used for a member's own educational needs. At that time, I was sympathetic towards the idea. I was also trying to test the resolve of the Minister to see how firm was his stand on not allowing CPF to be used for education.

Sir, CPF for Education is a very popular issue, as the Chairman of the GPC on Labour has just said. But it will also raise many more questions and problems than answers if CPF is allowed for educational purpose. Therefore, I will like to assure the Minister that he has my full support if he stands firm on this issue. If there is a shortage of places in our University I think the CPF is the wrong place to look for solutions. Sir, in this Chamber, on the few occasions that I spoke on the subject of CPF, I have argued for caution and reasoned why we must be very careful in handling the question of CPF, especially on how it may be used.

When the CPF investment scheme was discussed, I argued against it because I felt that there was no need for the scheme as it will raise several new issues. As a result of Black Monday in October - the big share market drop - I am sure Members have heard of investors who regretted the Government's implementation of this scheme, although I am not so sure that they blamed the Government. I am not so sure that they will blame the Government for it.

I have also at one time argued for the reactivation of the Special Account. My main point for the reactivation of the Special Account was that some liquid funds should be locked up in the CPF. Too much money has been channelled into housing and investments. The Special Account,or more liquidity in the CPF, serves many purposes. It can serve as a buffer - a device for us to adjust when we have economic problems. It will also come in very useful in the event of a major world-wide economic or financial disaster or disorder.

CPF for educational purpose means many things to many people. Education is a very emotionally-charged issue, foremost of which is the question of what level of education should be supported by the use of CPF funds. If we allow it for university education, then we are denying many other members whose children may be able to get only professional qualifications or diplomas. To take it a step even further down - how do you justify to a person who feels that his son who just makes it to 'O' levels and although he may never make it to the university, considers 'A' levels in the United Kingdom, for example, as a suitable qualification? His argument will be that his son is going one step up and therefore he should be allowed to use his CPF for his son to get his 'A' levels.

Setting up limits means answering the question of what to allow for - should it be the first degree or the second degree and so on. This will result in reducing this to a question of morals. It is a moral question, Sir. Why should we allow one person the use of his funds for his children's education against someone else, as the Member for Kebun Baru has mentioned, who may only see his son suitable for secondary education? Although the proponent of this issue has argued that safeguards can check some of these problems, there are still many imponderables. How do you handle a suitation of a change in tuition fees? Should those additional fees be allowed? Should the student be allowed to change a course of study which he considers more appropriate? Must we demand that he remain in the same course he has registered for? How can we be so harsh as not to allow a student who has already spent so much time and effort overseas to repeat a final year? Do you say then that his funding must stop and he must come home?

Sir, with all these imponderables, I think the end-result will be that the CPF Board will be embroiled in all sorts of controversies. It has to be a policeman to handle a great number of subjective questions. Sir, the basic problem with the CPF is that many members still see this as an untouchable bank. They have money locked up in the system which they feel they are unable to lay their hands on. Despite the advantages and benefits of the CPF schemes, the tax-free savings and the many avenues which are presently available for use of the funds, members want the cake and eat it.

My point is supported by the fact that the Minimum Sum Topping-Up Scheme is gaining popularity. The Minimum Sum Topping-Up Scheme, just to remind Members, was set up whereby a member may transfer some of his funds to his parents to create a minimum sum for the latter. As I understand it, it is gaining popularity because this is an indirect way in which funds may be withdrawn. A member may use the parent's name to set up a scheme and the money actually goes back into the member's pockets.

Since CPF is increased at a relatively high rate, perhaps we should do something about it. I will like the Minister to initiate a study to determine if we should not set an upper limit or capping on the amount of savings needed to be kept in the CPF. Presently, we have determined that the Minimum Sum requirement upon retirement is $30,000. Should we not look into setting an upper limit, say, 10-15 times the minimum sum? The idea is that when a member has made sufficient contributions to build up his fund to that level, which could be anything from $300,000 to $450,000, then the member should be given an option not to contribute his portion of the CPF. This scheme will take a lot of pressure off the need for members to find uses for CPF savings. The idea behind this scheme is useful if we can convince members that they should contribute as much money and as quickly as they can to build up to the upper limit. When the upper limit is reached, they may opt not to contribute the employee's portion. That portion of course is taxable but the member has discretionary use of that income.

Although I have argued for keeping CPF as it stands at the moment, ie, keeping to the basic objectives, nevertheless, we need some fine-tuning of the scheme. I have three schemes to suggest to improve on what we have at the moment. The first involves the use of a member's CPF savings for the parent's flat. The second and third involve insurance schemes - one for the member's dependants and another one in the event of catastrophic illness.

Sir, on the first scheme to allow a member to use his CPF for his parent's flat. A number of unmarried young people have used part of their CPF savings when they purchased a flat with their parents. Upon marriage and if they wish to live on their own, the present rules dictate that the funds which they have transferred into the parent's flat must be credited to the CPF. This poses many problems for the parents, especially those who have retired and are unable to return this money. Sir, as we now have the Minimum Sum Topping-Up Scheme, I think this rule could perhaps be relaxed.

The Chairman: Order. Your time is up. Dr Ow is not here. Dr Aline Wong.

Dr Aline K. Wong (Changkat): Sir, I rise in support of the draft proposal on the CPF for Education as drawn up by the GPC on Education. I find that its recommendations do not disturb the present CPF contribution rate and I do not think it is necessarily true that the rate of future contribution to the CPF may be raised because of this demand, as put forth by the Member for Kebun Baru. If he reads the proposal carefully, I am sure he will find that, in fact,this proposal does not disturb the present rate of contribution to CPF.

I support the view that education should be considered as an investment in human resources rather than as a form of consumption. The proposal has some safeguards and no doubt these safeguards still require some further refinement. But I feel that if the Minister and his officials put their minds to it, these safeguards can still be further fine-tuned and therefore I think the option should not be closed.

Sir, the root of the demand lies in the high premium which both our population and our Government put on educational qualifications. By educational qualifications, again, I do not agree with the Member for Kebun Baru that people take that to mean that their children must get primary education first or secondary school education first. To many of us, educational qualifications in today's society mean getting a university degree. Since NUS cannot --

Mr Lim Boon Heng: Join the union.

Dr Aline K. Wong: I am also an advisor to the HDB union.

Since the NUS cannot accommodate all those students who pass their 'A' level examinations and who wish to have university education - please get me right, please listen to me carefully that is, I support that NUS should uphold its high standard of academic achievement, that it should have its own rather high standard of admission criteria - but I am talking about those students who have passed their 'A' level examinations and who wish to have a university education and therefore cannot have any recourse but to go overseas for education. It is a fact that students who have gained admission to reputable tertiary institutions abroad can do well, have done well and, in fact, have returned to have successful careers. So what can we do for this group of students?

An hon. Member: Not all of them.

Dr Aline Wong: Not all of them, yes. But some of them want to invest in their own education this way. If we do not allow the use of CPF for education, I am afraid more and more young people and their parents will feel frustrated. It is correct that the well-off will have enough funds to go overseas on their own. They do not need to use the CPF funds. But what this proposal suggests is to enable actually those less well-off to use CPF for supplementing their other sources of funding. This is not going to be enough, like releasing this CPF amount up to 40% of the investible savings is not going to be enough for overseas education for its entire financing. This proposal only calls for the release of that fund for supplementing their other sources of funding for those who cannot afford, for those who have not enough funds for their children or themselves to go overseas otherwise.

Before I read the proposal, actually I had some misgivings and I must be frank with you. I do understand that the CPF, after all, is meant for purposes of old age security, housing and medical care. I had also feared that parents and students would become vulnerable to some institutions which would adopt aggressive and even unscrupulous tactics in attracting a share of our students. Even with the safeguards, the releasing of the CPF funds for approved courses or accredited institutions, there is still that dubious glamour - I emphasize "dubious glamour" - of obtaining an overseas degree. But, finally, I concluded that the choice must be left with the individuals. They should be trusted to make such major decisions as investing in a university education for themselves or in their children. Nobody can guarantee the returned graduates a well-paid job, just as we cannot guarantee the NUS graduates a well-paid job.

The Government has hitherto defended its Approved Investments Scheme on the ground that it is no different from the CPF Board making investments on behalf of the contributors and giving them a return. Only in this case the individual is taking his own risk. According to his view then, education is a very different kettle of fish. It is considered as a form of consumption. But, I submit, this kind of definition is a very fine-line technocratic argument which does not square with the popular definition of education, which is a form of investment, especially when the expenses are used for upgrading one's own skills. Where the money is used on one's own children, parents do not even consider this as an investment in the sense that they do not expect monetary returns. Parents nowadays are sanguine about the so-called "returns" from their children. It is out of love and out of a sense of duty, parental duty, to give their children the best education to start life with. They only hope their sons and daughters will likewise do for their own sons and daughters. And so one generation is repaying for the previous generation.

I know the Government is worried over whether liberalization of CPF for education may create undue pressure for the parents who may find it hard to refuse the demands from their children to take out the funds. This is one of the Government's worries. Again, I believe the parents should be trusted to make their own decisions. Besides, the proposal contains a safeguard - the fund must be put back into the CPF balance upon completion of the study, hence, the parents' old age security would still be protected.

I find the several references to the word "popular" used by the Member for Kebun Baru to be very strange or unacceptable to me. The way he implies it, the word "popular", almost means a rather forbidden word. In my opinion, we should consider every proposal to see whether it is reasonable or not, and not whether it is popular or not. I am sure some Members of this House, if not all, actually will find the proposals contained in this draft paper are most reasonable. Whether they are popular or not, is a separate issue. And in any case, the word "popular" is not a forbidden word.

The Chairman: Before the next speaker takes to the Floor, can I just urge Members to be concise and brief as we are running out of time? If we continue at this rate, we will reach the guillotine time before the Minister has a chance to reply. And I am sure we all want him to reply. Dr Tan.

Dr Tan Cheng Bock (Ayer Rajah): Sir, I did not open up Pandora's box. The Pandora's box was opened by the Ministry of Labour a long time ago when they allowed CPF to be used for many other schemes. Time does not permit me to rebut some of the points raised by the Member for Kebun Baru, but if there is time I will rebut him.

CPF for education is an emotive issue. It is emotive because it involves the sentiments and feelings of people. Education to many people is their hope for a better future. When my Committee and I discussed this issue, we had to be objective, because CPF is originally meant for old age and, as our population ages, its purpose becomes clearer. However, the issue cannot be ignored as just a popular call. It is now a need. It has become a need because the cost of education has gone up, especially tertiary education. Only last year the Minister for Education announced a rise in University fees and Polytechnic fees. In fact, the Parliamentary Estimates Committee also noted that the cost of tertiary education per student has risen significantly from 1983 to 1985. At NUS, it went up from $13,709 to $15,515; while at NTI it is more. It rose from $17,421 to $18,696. Loan schemes are not attractive because of the high interest rate compared to CPF. More fundamental, it goes against the Asian tradition to borrow for education.

When drafting the scheme, we went through the Hansard, as many Members of this House had spoken on the subject since 1980. The Feedback Unit also provided their views of the grassroots community leaders and public requests/reactions on the subject, both written and oral. We did not ask, "Do you think that CPF should be used for education?" That is a guided question and it would not be fair to the Ministry of Labour.

The Ministry of Labour may like to know that between 1986 and 1987 more than 50 grassroots organizations, through the RCs and the CCCs, made requests on the use of CPF for education, and these included the RCs from Marine Parade, Kim Seng and Kuo Chuan. It was unsolicited feedback. Even in this House, as early as 1980 when I first entered this Chamber, veteran MPs like the Members for Toa Payoh, Chua Chu Kang, Bukit Batok, Chai Chee and Leng Kee brought up the issue. Their call was reinforced by the newer Members for Thomson, Jalan Kayu and Paya Lebar.

We shared the Ministry's concern about the possible abuse, possible leakage of the CPF funds, children not returning parents the money taken from the CPF and whether there was enough CPF for use. In this respect, we were guided by the information we obtained from the sources I have mentioned. Let me illustrate.

The idea of approved courses came from none other than the Member for Radin Mas who just spoke. The requirement to pay back came from the Member for Thomson. Also, he proposed that there be a limit to the sum withdrawn. The Member for Paya Lebar came up with the idea of approved institutions. And above all, the Member for Chua Chu Kang spoke strongly against the use of CPF for stocks and shares and gold. It was from this strong stand that the idea of offering education as an option in the investible portion of the CPF came about. All suggestions and ideas were reinforced by grassroots organizations, especially the Suburban East District CCC. The fear that CPF contributions may be raised as a result of allowing education as another CPF use was expressed by the Member for Boon Lay in an article in the NTUC newsletter. In it, he also warned that there might not be enough funds. His view was shared by some members of the public like Mr Chia Shi Teck of Paya Lebar and Mr Razali bin Dollah of Ang Mo Kio, who wrote to me expressing their fears. They prompted my Committee to look even harder at the issue and this resulted in our choice for an existing scheme rather than creating a new one with all its implications.

Therefore, I want this House to know that my Committee sought many views before drafting the proposal. We wanted to know the extent and the depth of the issue. We have finalized the report which, in our view, is workable and with enough safeguards. In a nutshell, the proposal can be summarised as follows. Allow education as an extra option in the Approved Investments Scheme. This will allow the CPF member a choice - to put his money in education or to put his money in stocks and shares.

Since Independence, this nation has put education as one of our top priorities. Most of our parents saw this as a top priority. Today, the priority is the same except that the goals are higher. It is no longer a Cambridge School Certificate or a GCE '0' level or an 'A' level but a diploma from the Polytechnic or a University degree. Money spent to achieve this is surely more beneficial in the long run than putting money in the stock market. Even if his child were to fail, no parent would grudge his child the opportunity for higher education even at the expense of his own CPF savings. Anyway, the failure rate at our University is only 3%. Let not a few isolated cases of misuse of the CPF deprive the majority of its use. If a child neglects his ather after using his father's CPF, then he has his own conscience to contend with. We need to have more faith in our children. Strenghtening our Asian values is the answer. We cannot force or even legislate filial piety.

Finally, I trust the Minister will look into this proposal. There is no need to make a decision now. Let us hope he will discuss this with his Cabinet colleagues and let us know as soon as possible.

The Member for Kebun Baru called this a popular move, a popular issue. Is it because it is popular that he thinks it is wrong to bring it up?

Mr Lim Boon Heng: I didn't say that.

Dr Tan Cheng Bock: Are all popular decisions wrong decisions?

Mr Lim Boon Heng: No. I didn't say that.

Dr Tan Cheng Bock: The Member for Radin Mas actually questioned details about my scheme. Sir, I assume that he agrees in principle.

Encik Othman bin Haron Eusofe (Geylang Serai): Sir, it is very difficult not to join in this debate. I think the score is now three in favour and two against. I am trying to even up the score. I have reservations on the scheme.

Let me explain why. Any scheme to use CPF for education must be fair to everybody. The proposal which has been put foward by the Chairman of the GPC for education is one-sided. It only helps the high income contributors.

An hon. Member: Yes.

Encik Othman bin Haron Eusofe: We should be fair to everybody. And if we want to think out a system, we must make sure that everybody will be able to get the same benefit.

The proposed long-term CPF rates have now been set at 20% for employers and 20% for employees. This is for workers below 55 years old. Even at 20%, I think the low-income worker would feel that the contribution is rather excessive. And if we were to increase the contribution, it will severely reduce the employee's take-home pay. What I fear is that as soon as we allow CPF to be used for education, because of the structure of the CPF, there will be pressure later. Whether we like it or not, there will be pressure to raise CPF rates. And because the structure is such that employers have to contribute an equal amount, there is some gain for the employee's contribution to be increased. So I think there is going to be pressure for CPF rates to be increased. I think this is something which is not acceptable to the workers.

The pressure on the liberalization of the use of CPF for education has become stronger now because of the difficulty of our students to enter the NUS. These are students whose results are good enough to enter universities overseas which are equally good universities, but they are still not able to enter the NUS. I think there is a problem here. We should try and solve this problem. We should not create another problem. We should ask the Minister for Education to consider ways of finding places for more of our students without relaxing standards.

An hon. Member: Yes.

Encik Othman bin Haron Eusofe: I think the tuition loan scheme could be further improved upon so that we can help all those who want to get tuition loans. And even for students who are able to enter overseas universities with high standards, we may want to look for a way to have a loan scheme to help them meet their supplementary expenditure. I think this would be one solution which we should consider.

Sir, the word "popular" has been used. I am not against popular schemes. But I do not want a scheme which is popular now to become unpopular later because we have to raise the CPF rates. I would just like to say that we should examine all alternatives before we touch on the issue of CPF for education, especially when the long-term rates have been worked on the basis of old age, Medisave and housing. I think we should keep it at that.

Mr Philip Tan Tee Yong (Paya Lebar): Mr Deputy Speaker, Sir, I rise to support the proposal that CPF be used for education.

Sir, as a developing country, education ensures that we have adequate necessary manpower to service the ever-changing technology related requirements. It is within this context that Singaporeans place so much importance on education. We see parents frantically searching for tutors for their children even though they may be in Primary 1. This parental concern is unlikely to change. It has become a way of life. Tertiary education has been added to the end-goals of parents. The reason is simple. They want their children to excel so that the children can care for them in their old age.

There is another group of Singaporeans, who, for some reasons, are not able to go for higher education. They enter the employment market straight after secondary school or junior colleges. After having worked for a number of years, the need to be relevant to the changing economic needs becomes acute. In the West, opportunities for further education are plentiful for this group. But it is not so in Singapore where they have the drive but not the means. This desire to upgrade and the parental concern for their children's further education are beneficial to Singapore in the long run. But, Sir, further education not only demands hard work but it is also a very expensive affair. Against such a scenario, I would urge the Government to consider the following points:

(1) Since parents are prepared to sacrifice for their children's further education and those who went to work straight after school are prepared to commit themselves to the rigours of study, CPF fund for education will make their ventures less onerous financially.

(2) They are not asking the Government for grants or subsidies. They are merely requesting for permission to use their own funds to invest in further education. Why borrow when you have the funds? In this respect, I want to refute the Member for Kebun Baru when he referred to the welfare state situation in the West. May I remind him that here we are talking about our own funds, not a central fund. We are talking about a fund like the Medisave scheme which, I think, he has no quarrel with.

(3) I appreciate the Government's concern that old age should be taken care of. But is it not true that these people will have enough for their old age if one were to compute the high CPF contributions and the various safeguards preventing the depletion of funds?

(4) The Government, in emphasizing the need to save for old age, may unconsciously make people become indivi- dualistic, to each his own. Is this not contrary to the Government's aim to foster family ties as taught in the Confucian ethics where it is the duty of the children to care for the parents, whether they have CPF or not? I thought that we should emphasize on the young to care for the parents.

(5) I have confidence that Singaporeans who have gone for further education with their parents' financial support will not forget the gift of love.

(6) By allowing parents to make use of CPF funds for their children's education, the available cash on hand will allow these parents to enjoy part of their fruits of their own labour now.

(7) CPF for education has always been used as a scapegoat to promote the fear that other uses for CPF will be forthcoming. May I suggest that CPF for education is not the culprit. If we reflect for a while, we will realize that the earlier schemes have started the ball rolling, not CPF for education.

(8) We should realize that for certain matters, we cannot have a standard rule for all. Hence, we have different rates for CPF contributions. The CPF funds used for investment in stocks and shares and gold is one example. And the scheme is open to all. But the statistics show us that only 3% of the eligible members have used the funds.

My colleague said that we must look after the poor. True. The scheme for investment in stocks and shares and gold is meant for all. But the statistics show that only 3% made use of it. Similarly, by allowing CPF funds to be used for education, it is also open to all CPF members in Singapore, the rich, the middle income and the poor.

As regards raising CPF rates, I do not think it is a fear. Because we are talking about CPF for education as an option. If it is an option, we do not need to raise CPF contribution rates. I trust that with these points in mind, the Minister will consider the proposal favourably.

Mr Heng Chiang Meng (Jalan Kayu): Sir, I spoke on this topic in 1985 and 1986. In 1987, I gave the Minister some breathing space by not bringing up this topic. Despite his brilliant exposition in 1987, my views today still remain the same. I think CPF should be allowed to be used for education.

Sir, from what I heard Members who spoke against the proposal earlier, there appears to be two very strong arguments. One is that it is not fair to the poor who are more concerned with primary and secondary education for their children. It seems to me that this is, in fact, popular politics; every time speaking for the poor. But, Sir, look deeper. It is a very spurious argument.

As the Member for Cairnhill has said earlier, the cost of primary and secondary education in Singapore is not a problem. Tertiary education is a problem. We have not heard of primary school applicants being rejected because of lack of spaces in the primary schools or PSLE students who have passed their PSLE and denied a place in a secondary school. But we know what is the rejection rate of those who apply for entry into our NUS. In fact, I would say that the facilities for the primary and secondary education in Singapore, thanks to the Minister for Education, are superb.

Sir, another argument against the use of CPF for higher education is that of possible abuse and pressure on the Government to provide more. This Government is well known for its forte in preventing abuse. Surely, if the Minister is willing to consider this proposal, the methods and procedures of preventing abuse are very well known to those in the civil service and can be easily implemented.

And pressure? Sir, this is really a laugh. Has this Government ever given in to any form of pressure when it is not in the long-term interest of the country? So let us not have this type of spurious arguments like saying that if we do this and that, others will follow. It does not necessarily follow.

Before I go the next point, I would just like to say that I support the Member for Paya Lebar when he spoke about people who want to further their education. After all, although we provide good facilities for those who continue with education from primary school onwards, we do not really provide good facilities for those who want to further their education after a break.

Sir, I now come to one conclusion that could be drawn from in respect of various policies that have been announced or discussed in this Chamber.

Sir, factor A is that about 50% of university applicants who qualify are not accepted in the NUS. Factor B is that the number of places in NUS is dependent on manpower projections. Factor C is ministerial comments that multi-national companies find it easier to employ university graduates in Singapore than qualified technical workers. Sir, factor D is still the current "no" to the proposal to use CPF for education. Sir, the equation seems to be this. Factor A plus Factor B plus Factor C plus Factor D equals ---

Some hon. Members: "No".

Mr Heng Chiang Meng: It is more serious than no, Sir. It equals to the fact that the bulk of our population, of our citizens, will remain hewers of wood and drawers of water for the multi-national corporations.

Some hon. Members: True.

Mr Heng Chiang Meng: It is true, is it not? Those who want to educate themselves cannot do so if they cannot get into NUS.

Futurologists are saying that today's world of nation states would give way to tomorrow's world of trans-national corporations. Sir, if the Minister wants to ensure that Singapore has its share of trans-national corporations in the brave new world of tomorrow, I think the first step is to ensure that our citizens are given every opportunity, including using their own money in their CPF, to educate themselves or their children to their full potential. Only then can we have the base necessary to dream of our own local trans-national corporations. Japan, South Korea, and Taiwan, with higher percentages of tertiary educated population, have shown the way. We can do no better than to follow these examples.

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

Mr Chiam See Tong (Potong Pasir): Sir, unfortunately, we cannot take a vote on this issue of whether or not to use CPF for education. The tally up to date is five for and three against. Even those two who are against, the Member for Kebun Baru and the Member for Geylang Serai, I believe they objected because they feel that, under the scheme proposed by the GPC for Education, it is rather limited only to tertiary Education. If you expand to include both primary and secondary education, they might want also to agree. So we have got, in fact, seven against one. Sir, I am for the scheme, in fact all the way, both primary and secondary as well as tertiary. Sir, it has been said that primary and secondary school education does not cost very much but, in fact, there are parents who cannot even afford to pay some of the fees for the secondary school. I am sure Members would know that.

Sir, it has been said that probably one of the reasons why the Government is unwilling to allow use of CPF for education is that you are going to extend the scheme further. But I think education is, in fact, the key to nation building. It is the cornerstone and I am surprised that education is given even lower prority than schemes like buying of SBS shares and the Approved Non-Residential Properties Scheme, where money is used to buy commercial properties. Of course, the other one is the Approved Investments Scheme, the buying of approved stocks and shares, gold, silver and diamond. Sir, I really cannot understand. I think education certainly has a higher priority than these schemes I have mentioned. CPF should be allowed to be used for education.

Sir, the CPF scheme was started in 1955. I believe the contribution was 10%, 5% from employees and 5% from employers. Of course, we know that by 1985 the rate has gone up to a massive contribution of 50%, 25% from the employers and 25% from the employees. With this high contribution rate, the Government has accumulated massive funds and the Opposition has said that these funds are, in fact, cheap funds for the use of the Government. The CPF in its report has said that it has helped to meet social and economic goals. The role of the CPF in supporting national social, economic goals has been very evident in 1986. This is the report given in 1986 of the CPF Report.

Sir, it has been said that Singapore is reaching a very high stage of its physical development. The Minister for National Development has said that most of the roads that are needed to be built have already been built. So in this respect the need to use the funds from the CPF Board for national development perhaps will not be as urgent as before. Of course, the other use of CPF is to lock up loose cash so that our inflation can be kept very low. The annual inflation rate for consumption, I believe, increased by only 0.5% last year. In 1986 there was, in fact, a drop of -1.4%.

Sir, this CPF is a forced savings scheme. The Government has accumulated a lot of funds through CPF but the people are not cash rich. That is probably one of the reasons why they are in need of money for their education. It has also been reported that the CPF Board are the trustees of the money of CPF contributors. It has also been said that the CPF savings are the workers' salary, but in reality is that the case? It does not appear to be so. Because if the CPF Board are the trustees, then they should take instructions from the owners of the money, but they are not. It would appear that the funds are certainly not the workers' money because, as it can be seen, if it were their money, now they have to come before the House and plead with the Minister for an additional use of their CPF. So the Government still has the control, no ownership, but very much in control of the money. Of course, it sounds good to say that Government are trustees of the money and the money belongs to the people. It sounds good politically. But in reality the CPF money does not truly belong to the contributors.

The Minister for National Development (Mr S. Dhanabalan): Who does it belong to?

Mr Chiam See Tong: Because they are told what to do with the money and they cannot decide for themselves.

I agree to use of CPF for of old age, home ownership and for taking care of the health of its contributors. I am for this additional use of CPF for education.

Sir, as we can see in the case of approved uses, not all the money is locked in by the Government. In the case of buying houses and property, if you sell it, you will have to return the money back to your CPF account together with interest. So in this way the money is held by the CPF Board. But there are two schemes, Medisave and the Home Protection Insurance schemes, where the money is paid out and you do not get them back. So there is already a precedent set by a scheme in which you say there are leakages to the CPF. So if the additional use of CPF for education brings fear that there might be a leakage in CPF funds because the contributor himself or his parent might be unable later on to repay the money into the CPF account, I say that a precedent has already been set. So it should not be used as an argument against the use of CPF.

Sir, as regards whether or not there is need to raise the CPF rate, I believe there is already enough contributions. The issue is whether or not a contributor has enough money. If he has got enough money in the CPF, I do not see why it should not be used for education. This is what the Prime Minister said in December 1984:

'I think having set up this fund which has been of great value to Singapore's stability, not only because it is good for our economic development, it has also changed the thinking and the actions of the people. Because if you are having 20, 30, 40 or $50,000 in the CPF plus your house, you are not going to act stupidly or recklessly. And by the year 2000 people are going to have $100,000 in the CPF. Some of the executives will have $200,000 to $300,000 in the CPF, if not more. Clerks may have over $150,000 to $200,000. A young man who starts work now, say, age 20 or after national service, let us say, 21, starts at $800. In 16 years he is going to have about $150,000 plus a house on which he is paying installments. So it is really up to him.'

He ends up this particular topic, and he says:

'And I think it is important that they should be given the chance if they think they can do better, well you invest it.'

So there is really ample funds in the contributors accounts, according to the Prime Minister, and so there is really no need to increase the CPF rate. So this argument that we have to increase the CPF rate really does not hold water.

Perhaps I am just looking from the Government's end. The reason why they are afraid to have an additional use is because ---

The Chairman: Order. Your time is up, Mr Chiam. Yes, Mr Lim?

Mr Lim Boon Heng: May I make a suggestion, Sir. I know that a number of Members are interested in speaking on this subject. I am prepared to forgo all the other cuts that I have left on this Head, if you will agree.

The Chairman: I am sorry, we are running well behind schedule. Let the Minister reply, then we will consider your request later.

Mr Lee Yock Suan: Sir, this issue on education has generated so much heat that it makes my mouth dry just to listen to the debate. I think there will be some time left if Members do not speak too long on subsequent issues after item (l) to debate after lunch.

I must start with CPF for education since it is obviously the most important topic this morning, although various other issues were raised. One point is clear: there is no unanimous view in Parliament on this issue, and I think all of us have to consider it very carefully. If Members will bear with me, I would like to take you through the rationale for the CPF scheme and the thinking on this issue.

In discussing the CPF, we must never lose sight of its original and basic objective, that is, to provide for each member's old-age financial security. I think this point is not in dispute. Even the Member for Potong Pasir agrees with this point.

Apart from some civil servants, Singaporeans generally do not have pensions. They have to save up in CPF and manage their savings carefully, both before and after retirement, to ensure that they have sufficient money to live on after retirement. The older Singaporeans now can depend on many children to support them. In future, our generation will have to depend mainly on our own savings because there will be very few children to support us.

Over the years, several improvements have been made to the CPF scheme. A very important change was to allow CPF for the purchase of homes. It enables Singaporeans to own their homes which also serve as a valuable investment for old age. If necessary, a member can sell his house and buy or rent a smaller one. Then came the Home Protection Insurance Scheme to protect the home. After that, Medisave was introduced to provide for hospitalization expenses. A member is more likely to fall sick when he is old and the bulk of Medisave funds are meant for old-age use.

The CPF scheme is designed for the vast majority of members who do not draw high incomes. It is to enable them to achieve three sub-goals of CPF. Firstly, to own a home according to his income level. For most people, this means an HDB flat. Secondly, for Medisave, and thirdly, to have a cash balance at retirement which will enable him to spend at the rate of about one-third of his last-drawn pay. These - I want to emphasize - are all meant for old-age financial security.

Members are well aware that the CPF rate was previously 50%. It was reduced to 35% about two years ago. The Government is now targetting for a long-term rate of 40%. At the 40% rate, an average CPF member will find that he has only enough to pay for the HDB flat, for Medisave, and for old-age needs. There is no excess fat. Any CPF scheme that we consider must therefore not deplete his CPF savings. This is a very fundamental point.

In 1986, the Minimum Sum Scheme was introduced. So long as the minimum sum of $30,000 is secured, a member can withdraw his entire CPF savings, excluding Medisave, at age 55. Unfortunately, the Minimum Sum Scheme has given rise to some misconceptions. Please do not misunderstand the Minimum Sum of $30,000. It is only a minimum safety net. A member will find it very difficult to survive with only $30,000. He needs much more, in fact the entire 40% CPF savings, to maintain his living standard after retirement.

With the minimum sum secured, the Government has decided to allow CPF members to progressively invest their CPF savings on other bankable assets. Properties, shares and gold - these are all bankable assets in the sense that they can be pledged as security for bank loans and are easily tradeable. Risks can be spread by having a diversified portfolio of investments. To preserve the entire CPF savings for the member's old-age needs, it must be possible to sell the investments and return the money to his CPF account.

It should be noted that properties, shares and gold are not objectives of the CPF scheme. They are avenues of investment open to those CPF members who feel that they can make a better return by investing in these assets. They must be prepared to accept the risks involved. Most CPF members are cautious and choose to leave their savings with the CPF Board to earn a guaranteed return.

In contrast, education does not have some of these characteristics I mentioned. For example, I think it must be difficult to borrow money from a bank for overseas education if a student has no other collateral but merely promises to pay the money back after graduation. Therefore, in that sense, education is not bankable.

The proposal from the GPC for Education is basically a loan scheme, that parents lend their CPF to their children to pay for tertiary education fees. This introduces a whole new principle into the CPF scheme - that CPF savings can be taken out as loans.

The loan concept needs to be carefully studied as it could lead to many other ramifications. One main concern is, of course, how to ensure repayment to the member's CPF account. Is an undertaking to repay good enough? What happens if the borrower is unable or refuses to repay? Do we take him to court?

Hon. Members should realize that by the time the child graduates from university his father will be close to or past the CPF withdrawal age of 55. How do we ensure repayment? If too many refuse to repay, the whole loan scheme breaks down. This is what is happening in the US with its education loan schemes. Each year, thousands of students refuse or are unable to repay their education loans. This year, about US$1.6 billion or 16% of the annual loan volume is expected to be in default.

As Minister for Labour, my main concern with the CPF scheme must be to ensure the old-age financial security of the CPF members. However, as some MPs have been lobbying hard for CPF to be allowed for education, I am prepared to restudy the issue thoroughly.

Some hon. Members: Hear, hear!

Mr Lee Yock Suan: It concerns not only CPF but also education policy. The Education Minister is here.

First, we should be clear that we are talking about CPF for tertiary education. Parents can generally afford primary and secondary education for their children. This is not to say that there will be no pressure for its use for primary and secondary education once we allow it for tertiary education. But I think for the purpose of discussion on this report, we should clearly specify and understand that it is for tertiary education. Next, we should distinguish between local and overseas tertiary education.

Local education. Tertiary education in Singapore is 85% to 90% subsidized by the Government. The tuition fees are affordable. Half the tuition fees at NUS or NTI can be borrowed by any student from the Government and is interest-free before graduation. The students may pay back after graduation and there is no need to touch their parents' CPF accounts. For those who are in financial hardship, bursaries and other study loans are readily available. It would appear that most parents can afford to send their children to NUS or NTI or the polytechnics. Last year, only 16% of the students applied for the soft loan. This is the point mentioned by the Member for Kebun Baru. Only half of the NTI and NUS students who were offered PSC scholarships and bursaries accepted them. In other words, the PSC was willing to give them scholarships but half of them said, "No, thank you. I will just do it on my own parent's account." The important point is that no student who can qualify has been denied admission on financial grounds. This is a very basic point. No student who can qualify has been denied admission on financial grounds because of all these facilities which are available and because of the importance the Government places on education.

Some parents would still prefer to use their CPF for local tertiary education. It is not difficult to understand their reasons. Firstly, it will help to lighten their household expenditure and some parents may be feeling the strain of supporting their children through university. Then there are others who cannot wait to make use of their CPF savings even though it may be at the expense of their old-age financial security.

Other than those who may be in financial hardship, I think parents should ask themselves whether the present arrangement is not the one most advantageous for them and their children. Under the proposal of the GPC for Education, firstly the CPF money carries interest at the CPF rate whereas the Government loan is interest-free until graduation. Secondly, if the children fail in their studies or are not filial, the parents' CPF savings may be lost whereas at present they are preserved intact.

Most parents have low CPF savings because past salaries and CPF rates were low. I can well understand the Asian mentality of parents who are prepared to sacrifice for their children's education. My question is: why should they have to make the sacrifices when present funding arrangements make it unnecessary?

I come next to overseas education. Tertiary education in Singapore is affordable because it is highly subsidized. The same cannot be said of overseas education. The cost is prohibitive. It ranges from about $60,000 for a 3-year Arts course in Australia to as much as $300,000 for a 5-year Medicine course in the USA.

Excluding Medisave and housing commitments, 85% of active CPF members have less than $40,000 in their CPF accounts. Many are still servicing their housing loans. Clearly, the vast majority of Singaporeans cannot afford to send their children for overseas education even with supplementary funds from their CPF accounts. Overseas education only concerns a very small number of CPF members who are relatively well off. Each year, probably no more than 2,000-3,000 Singaporeans enrol in foreign universities. So we are really talking of an issue which concerns 2,000-3,000 Singaporeans, although the emotional appeal is obviously very strong for the rest of the members.

Some parents send their children overseas for either of two reasons. Firstly, they prefer overseas universities and can afford it; or secondly, their children could not qualify for NUS or NTI or their preferred courses, eg, Medicine.

The first group does not really need help from CPF. They would most likely have invested their CPF in properties and have spare cash. For the second group: is using up the CPF the answer? Or is it not better to expand tertiary institutions in Singapore? This concerns education policy.

Last week, the Minister for Education explained to Parliament that the real problem is that there are insufficient students with appropriate 'A' level results who can make it successfully through NUS or NTI. The admission into NUS has already been expanded by 50% over the past six years. As the number of students who can qualify for admission increases yearly, his Ministry will increase the number of university places so that all qualified students who apply will be admitted. There you have the assurance from the Minister for Education.

Two out of every three Singaporean applicants who sat for 'A' levels in 1985 and 1986 were accepted into NUS or NTI the following year. For the remaining one-third, they could have benefited more by enrolling in the polytechnics or commercial courses with more practical orientation.

We want more graduates but they must be of the right calibre, qualified by reputable international standards and able to obtain jobs when they graduate. Otherwise our degrees will be devalued and there could be problems of graduate unemployment.

However, a student who can obtain admission into good established overseas universities should have no problem in getting a place in NUS in the first instance. Those who are not able to get into these universities should consider seriously if university education is appropriate for them.

The GPC proposal suggests that overseas universities and courses be publicly listed as approved or accredited for use of CPF. Much unhappiness and controversy will be generated if certain universities and courses are not approved, especially if they happen to be in neighbouring countries.

Once CPF is allowed for overseas education, it will be extremely difficult to limit it to students who cannot qualify for NUS or NTI. More students will want to go overseas even though they can qualify locally. There will be tremendous pressure on parents to sacrifice their old-age security so that their children too can study overseas.

With more students going overseas, the risk of brain drain will increase. There is evidence that students trained overseas have a higher tendency to emigrate. This will be compounded if there is graduate unemployment in Singapore.

To sum up, I would like to emphasize the following points:

(1) The fundamental objective of the CPF scheme is old-age financial security. Any new scheme that we consider must be consistent with this objective.

(2) The concept that CPF savings can be taken out as a loan is an entirely new principle which requires very careful study as it can lead to other implications.

(3) Most parents can afford Singapore tertiary education as it is highly subsidized and there is a Government soft loan scheme.

(4) Overseas education is terribly expensive and few parents can afford to send their children overseas, even with supplementary funds from CPF. Students who can qualify for good universities overseas should qualify for the NUS or NTI. Those who cannot should consider whether it would be better to enrol in the polytechnics or commercial schools rather than risk their parents' life savings on degrees which may not be highly valued.

As I have said, I will ask my Ministry to study this issue more thoroughly. We need to investigate carefully the implications of a loan from CPF for education purposes. A comprehensive study will take some time and I hope Members will bear with me. We cannot rush into a decision on such an important issue.

Mr Chairman, shall I stop here and allow Members to debate or carry on with the other issues?

The Chairman: We have a little time to spare. So if you like, I can allow Members to make brief clarifications. Mr Sia.

Mr Sia Khoon Seong (Moulmein): Sir, I welcome the Minister's announcement that he will review the issues involved behind the proposal by the GPC (Education). He mentioned that he saw the GPC proposal as nothing more than a loan scheme and he was concerned that it might be difficult to enforce the repayment part of it, and this might deter him from taking a decision in favour of allowing CPF to be used for education. If he were to see this purely from a banker's point of view, purely as a commercial proposition, perhaps that is a valid argument. But this is much more than that. This has got social implications. It is just like the Government, through the HDB, rents out HDB flats. There are a lot of HDB flat dwellers on rental who are in arrears of rental to HDB. Does that prevent the Government from renting out HDB flats? The answer is surely no because there is a social objective behind this.

As he has said, the fundamental objective of CPF is for old age. On that score I think every one of us agrees. The question is to allow CPF to be used for education, is it in some way consistent with this policy? In my view, I think the answer is yes. If CPF is used for old age, if we were to interpret it in a rigid and a straightforward manner, it must only mean that CPF savings can only be withdrawn after the age of 55. But the fact that the Government has devised schemes like allowing the CPF contributors to withdraw their savings well before their retirement age to purchase properties - that itself is meant for old age. The Government has come up with a scheme to allow the CPF contributors to invest in shares and gold so that the savings can be enhanced when they retire - that is consistent with its fundamental policy for old age. So why can it not be that education also be one of those schemes which the contributors can make use of, so that when their children grow up they can be in a better position either to look after their parents or to be less dependent on their parents? If you look at the proposal from the GPC (Education), there are safeguards and the safeguards include:

(1) That this is to come from the investible portion of the CPF, not from the whole CPF savings;

(2) There is a list of approved institutions and safeguards which the contributors must satisfy before they can be allowed to withdraw from the CPF; and

(3) That some arrangement be made where the children will return whatever they have taken from their parents from their own CPF savings.

I think the Minister has got to look at the proposal in that light when he is reviewing the whole policy again.

Dr Tan Cheng Bock: Sir, I did not start a new scheme. All that I ask for is an option to be given to Singaporeans to decide for themselves whether they want to put their money in stocks and shares or whether they want to put their money in education. When we looked into the issue, we really took into account so many factors, as I just spoke earlier. We studied the danger of abuse of the CPF, the leakage of the CPF. All these we have put it in our proposal. We have got all the safeguards. And above all, this fear of the Minister that we will be having a brain drain as a result of allowing more of this CPF fund for education, I think Members should not get detracted by this sort of argument because it has happened many, many times.

I am quite glad also that the Minister has decided to study this proposal carefully. But I would just like to remind him that sometime ago in this House - I think in 1985 - he did mention that he would be studying this proposal carefully. And this is 1988, and he is still studying it. I think he has taken a long time.

Mr Lee Yock Suan rose ---

Dr Tan Cheng Bock: Just one clarification. He mentioned something about this interest-free loan. This was one point he brought up in 1985 and he took the cue from the Minister for Finance on this. I remembered the Minister for Labour quoted the Minister for Finance on this point. And later on we heard from the Minister for Education that there would be a loan scheme for the Univeristy students and the interest was pegged at the commercial banks. So can the Minister please clarify this point?

Encik Wan Hussin bin Haji Zoohri (Kampong Ubi): ( In Malay): Sir, having heard some very encouraging opinions expressed so far, I rise now in support of the proposal to use CPF for education. I think the debate would not be complete if I do not convey the views of the majority of Malay parents. We know that in the rat race in Singapore, education is a key to success, more so for the Malay community where educational levels are still rather low in comparison to the other communities.

We know that enrolment at the National University of Singapore is rather small and this in turn of course affects the number of Malay students. So a logical way out for Malay parents would be to send their children overseas. Due to the role played by the Government in particular and Malay Muslim organizations in general, the Malay community's desire to educate their children to the highest level has been realized. There now is another means to enable them to send their children overseas. As the Executive Secretary of Mendaki, I am aware of this pressing need. Every year, our Awards and Financial Assistance Department receive applications from parents for loans to send their children overseas. Every year we spend about $300,000 and even this amount finances only part of their children's needs. So this would be another source of finance which could, as the Member for Changkat said, cover not the whole expenditure but at least supplement whatever is lacking.

The need, particularly in the Malay community, of parents to send their children overseas is very pressing indeed. I would not repeat the other arguments that have been raised, but I am most impressed by the draft proposal put up by the Member of Parliament for Ayer Rajah and his colleagues, which incorporates safeguards to ensure that this would not turn out to be a wasteful effort. Allow me to say then that with these safeguards, everyone would be able to make use of this source of finance in a careful and safe manner.

On that note, I once again support the proposal to use part of CPF for education.

Mr Leong Horn Kee (Thomson): Sir, I am very pleased to hear from the Minister that he would consider extending the scheme on use of CPF for education. But so far what I heard from him is that he is going to consider using CPF for the education of the children. Can I ask him whether he will also consider using CPF for self-education? A person may miss a chance to go to University. After working for a few years, when he has some savings and there is some more money in the CPF, he may feel that it is time for him in his early 30s to go for a tertiary education. And the savings in the CPF, ie, his own savings, would help him towards paying for his expenses, especially when he has to go overseas for his university education because probably he would not be able to enter into a local university.

So I would like the Minister to include in his review whether he should consider allowing the use of CPF for self-education as well.

Dr Augustine H.H. Tan (Whampoa): Sir, much of the heat of the debate, I think, has arisen from the increased demand for higher education. I think that is really the root of the matter. As a society grows richer, higher education is demanded not only as an investment in human beings but it is also demanded as consumption because of the status symbol that comes from acquiring a piece of paper or a Bachelor degree or a Diploma of whatever kind. So we have got to clearly isolate that increased demand and determine how to satisfy it.

In the Education Ministry's debate, much has been said on the issue. I think the main thing is: should we satisfy that demand locally, or should we allow large numbers of students to go abroad, and how many students overall should we allow to have tertiary education? The consideration must be that whoever gets educated at tertiary level will eventually find a job. I think that is a duty of the Government. And as long as that is the consideration, we have to look at the quality of the education. I think the Minister for Labour rightly pointed out that foreign education is a very expensive matter nowadays. The Government could very well say yes to the use of CPF funds, but the parents are in for a rough time if they have to foot most of the bills. I am against the use of CPF for education abroad.

The Chairman: Order. Time for the Suspension.

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 o'clock.

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 R (cont.) -

Dr Augustine Tan: Sir, before the lunch break, I said that I was against the Education GPC Chairman's proposal despite his persuasiveness. I pointed out that the real problem is not the use of CPF for education but the increasing demand for higher education. It would be unwise to satisfy that demand by using CPF funds to send students abroad. Individual CPF balances will be inadequate and parents would have to supply private funds. Why not allow the setting up of one or two private universities? These could be branches of foreign universities. Government could help by supplying the land and the buildings. And the graduates from such universities would have to be prepared to accept lower starting salaries and prove themselves eventually. CPF funds could then be considered for use in a limited and carefully controlled way to finance such tertiary education in Singapore.

Mr S. Chandra Das (Chong Boon): Sir, I think this has turned out to be an interesting debate among Backbenchers rather than a debate with the Frontbenchers. I would like to congratulate the Chairman of the GPC on Education, his Members and his Resource Panel for an interesting and persuasive proposal. However, I am not persuaded. I tend to agree more with the views expressed by the GPC Chairman on Labour, the Member for Kebun Baru, in that we will be opening up the Pandora's box if we accept this proposal. There will be other requests.

Sir, I do not want to go into the arguments except to say that if we accept this proposal, only a few will benefit. The figures have already been given by the Minister for Education. The last time we introduced a proposal to benefit a few, the graduate mother policy, you know what we had to do. We had to withdraw the policy. Do we want to do the same?

I think the main problem has been identified - the problem of fewer places in the universities. The main problem is not basically financial. The Minister for Education has assured this House that he is looking at the possibility of expanding NTI to take in more students. And I think we should await the outcome of measures taken by the Ministry of Education before we seriously look at the GPC proposal.

Dr Tan Cheng Bock: Sir, can I make a clarification?

The Chairman: Dr Tan, you had many chances. Dr Ow wants to speak.

Dr Ow Chin Hock (Leng Kee): ( In Mandarin): Sir, I would like to ask the Minister a few questions.

First, is education consumption or investment? To me it an investment; to the nation, it is investment in human resources. So the Minister for Labour cannot deny this fact. To the Oriental people, education is "a century of human cultivation planning".

Second, if education is a kind of investment, of course, there will be risks. I would like to ask the Minister for Labour whether the risk of investment in education is the same or even greater than investment in shares and in gold? Last October, the collapse of the stocks and share market caused great losses to investors. But investment on education would not lead to that kind of general losses.

Third, does the Minister agree to the proverb which says that "Nobody knows the son better than the father". So the father, a CPF member, should know his son's ability and the risks involved in investing his money on his son's education better than anyone else. He should also know his son better than he knows the stocks and shares markets.

Fourth, the Minister earlier said that the use of CPF for education would cause a brain drain. If this argument could be held, then you should cancel all scholarships and bursaries for studies abroad. You should forbid our young students from going abroad to study.

Fifth, this is a question of priority. At the mement, the CPF is allowed for investment in shares gold and properties, but not allowed for investment in education. Will this not give people the impression of an upside-down policy of the Government, and the feeling that you allow some CPF members to play with fire but do not allow others to light up a lamp?

There is another question. Does the Minister agree that 40-50% of our 'A' level students cannot enter NUS every year, if they were to go abroad to study; the expenses required would be much higher than for studies here? In that case, will CPF not help our young to materialize their aspiration? We use the world as our market for our goods and services, why not allow our young people to go out and make use of the world also as a training ground?

The next question. Recently our political leaders have been calling on our people to exercise their own judgment, make their own decision and take their own responsibility. One example is to let the residents to manage their own housing estates. Why is the Government then taking protective stand in the use of CPF for education, while in other aspects the Government is not?

The last point is that there may not be many beneficiaries to CPF for education scheme. There are about over 110,000 people who have savings in the CPF above $80,000. But the qustion is, is it because not all the CPF members concerned can benefit from this scheme and therefore it would not be implemented?

Mr Heng Chiang Meng: Sir, the Minister earlier reiterated the objectives of the CPF. He said that the investments in gold, shares and housing are not actually the main objectives but instruments of investment. I do not think this is wrong. What is wrong is that he did not include investment in education as an investment.

Sir, let me say, very breifly, what is an investment. If I put some money now into something with the hope of getting something back in return in future but with a risk of losing that money, then obviously that is investment. This applies to shares, to gold, or even to a house. I think the same definition can also apply to investment in the children's education. Sure, my child may not pass. My child may not even support me in my old age. But that is a risk I take when I go into any form of investment.

For argument, he also said that the scheme of using CPF for education is not bankable. I agree with him on this point, Sir. It is not bankable. But how can he compare the relationship of a parent and a child to that of a banker and a client? Obviously, it is not bankable. I may not know my client well but I know my child. It is not bankable but it is "parentable".

Sir, I am prepared to take the risk of being parentable. And as a parent, I want to decide for my child. This is the crux of the matter. Although the Member for Chong Boon did compare this to the graduate mother scheme, it is a wrong comparison. In the graduate mother scheme, we are talking about competition for scarce resources, ie, places in good primary schools. But here we are not talking about competition for scarce resources. We are talking about allowing CPF members to use their own money.

Dr Arthur Beng Kian Lam (Fengshan): Sir, I wish to make only three brief points. Firstly, I would like to commend the Minister for his fair attitude on the issue of CPF for tertiary education. He has stated categorically that he is prepared to study the paper submitted by the GPC for Education. He has taken Members' concern expressed in this House seriously. I give my support to the GPC for Education.

Sir, the Minister mentioned the figure 2,000-3,000 students going overseas annually for studies. He considers this as a small number. I beg to disagree. I feel strongly that this is a large number for we are talking of 2,000-3,000 lives. It is the future of 3,000 people that we are talking about.

Finally, Sir, I echo the views of the Members for Changkat and Ayer Rajah as regards the labelling of this issue as a popular issue. May I respectfully remind the Frontbench and some Members of the Backbench that Backbenchers have on many occasions supported unpopular but correct Government policies. Just because a much discussed issue is brought up in the House by a Backbencher should not be seen as Backbenchers lobbying the popular line or even playing to the Gallery. After all, are we not representatives of the people?

Mr Tang See Chim (Chua Chu Kang): Sir, I want to quote, for the Minister's consideration, the Chinese saying, Yang Er Fang Lao, which loosely translated, means bring up your children to safeguard your old age.

Mr Lee Yock Suan: Mr Deputy Speaker, Sir, I would like to thank the Member for Chua Chu Kang for making a very brief contribution. It is true that we are running out of time. So I will try and wrap up the discussions on this issue. The speech by the Member for Fengshan which preceded the one by the Member for Chua Chua Kang has raised the temperature in this Chamber by a few degrees!

In wrapping up, may I just briefly respond to some of the points made by the Members. I think we have had a very interesting debate. Members have put across their views forcefully and sometimes emotionally. The Member for Thomson asked whether we could study the use of CPF for a member's own education. The Member for Cairnhill also raised this point. Yes, we will look into this aspect as well. Apart from the fact that the funds are for the person's own use, some of the other considerations I mentioned in my statement are similar. So we have to look at the overall policy.

The Member for Changkat made the point that we should allow the members more individual choice. I think this is true and accepted by the Government up to a point. We have allowed them, for example, more freedom to manage the funds. But if you push this point to the limit, then the question is why have a CPF scheme at all? Why not allow the member just to keep his own savings? I think all Members of this House will accept that the CPF scheme is a good scheme. We need such a scheme for old-age security.

The same point was made but in a different vein by the Member for Potong Pasir. He said that the CPF is supposed to be the trustee of members' funds but members have no say on how the funds are used. The basic point is that the CPF is a compulsory savings scheme. If you leave it to the individual, he may not save enough for his own old-age needs. Therefore, the Government has to implement the scheme and make sure that the purposes are kept to its original objective as far as possible; and that the schemes are beneficial to the country as a whole, not just because many people want to have them.

The Member for Jalan Kayu made a very good point. He said the Government normally does not give in to pressure. I agree with him fully. Perhaps this is one issue on which the Government should not give in to pressure.

The Member for Potong Pasir quoted the Prime Minister's speech and gave some figures on how much people would have in their CPF in future. The important point he needs to mention is that this is for future young CPF members who are starting work from now. If the economy continues to do well and there is no world crash, this is what will be the final position. But as of now, most of the CPF members have very low savings. I mentioned the figure of 85% having less than $40,000, and these are the parents who are being asked to support their children through local university or through overseas universities. Concerning local university we already know the position. It is very affordable to most parents. This is shown by the fact that very few of them need to apply for the Government loan. In fact, I do not know how many parents realize that the loan is interest-free before graduation. Previously when the loan was introduced by the Ministry of Education, the announcement was that it would be pegged to a certain bank rate. Subsequently the Ministry reviewed the policy and decided it would be interest-free. So it is, in fact, a very attractive scheme that is available for all those who can gain admission to the local university.

As for the ones who have not been able to make it to the local university, the question is one of a broader issue of education policy, which is not my purview. The Minister for Education has assured the House that so long as we have good quality students, as we raise the standard of secondary education and as more and more of them are able to make it through university, he will expand university places to cater for the number. So if that approach is taken, then the question arises: should we tap the meagre CPF savings of the parents in order to risk it on the children on overseas education which may cost as much as $300,000 for some courses?

The Member for Whampoa has introduced an interesting idea. His idea is that perhaps we should allow a few reputable and well recognized foreign universities to set up branches, to set up private universities, as it were in Singapore. This, to my mind, is a good suggestion which the Ministry of Education should consider seriously. [Laughter] I am not trying to pass the buck to him. Let me explain why. The reason is this. I hate to say this but I think a lot of people go overseas for education because there is a lot of glamour in it. They are not really concerned whether it is a good degree or not a good degree. They come back and say, "Look, I have been overseas for education. This is my piece of paper. I must be better than all of you because I got it overseas."

Some hon. Members: No. It's not true.

Mr Lee Yock Suan: It is true. We can examine the data to see whether it is in fact so, as part of our study. The point is this. If that is the main reason why people want to go overseas, why not establish some such universities in Singapore, with standards equal to world standards so that there will no longer be this reason to go overseas simply for the glamour of it? So if you cannot make it to the NUS or NTI, there are other alternatives. I would recommend to the Minister for Education to seriously consider this point.

I think several Members and I myself have mentioned this point. Although the issue has generated a lot of heat, it really concerns very few people. Granted 2,000 to 3,000 persons are 2,000 to 3,000 lives. But in making a policy decision, the Government must decide for the vast majority of people. By opening up CPF for education, as I have said, especially for overseas education, there will be tremendous pressure on the parents to send their children overseas. It will be very difficult for a parent to say, "No, I don't want to send you overseas because CPF is for my own use." This is the basic problem. Do we want to put the parents into that kind of a position? Or should not our children, being filial children, recognize the limitations of their parents and perhaps go to the polytechnics and commercial schools where they can learn skills that are useful in future and where they can get similarly well-paid jobs when they graduate?

The Member for Leng Kee asked a few points. He asked whether education, to my mind, is investment or consumption. I think I have been misunderstood on this point. On no occasion have I said that education is not an investment. I have not said that. But I have said that if you are to take out the CPF from a member's fund and use it for some purpose, be it for education or some other purpose, and the money is not returned to the CPF, then from the point of view of preserving the funds for the old-age security of a member, it is money gone, in that sense. I think nobody in his right mind, and certainly not the Government, will deny that education is a very important investment in human resources. We are proving it by the amount of funds we are spending on education.

The Member asked the point whether we are concerned about the brain drain and if so, why not disallow all the scholarship holders? I think there is an essential difference, namely that the scholarship holders are bonded to serve the Government. So the point is, perhaps there is a need for overseas education. We really want our better students to go overseas and mix around in the top universities. But do we want to open up a scheme where we allow those who cannot make it to our universities, to go to some probably unknown university and come back with a piece of paper?

To conclude, I would like to repeat once again that I will ask my officers to look at this issue thoroughly. Up to now I have looked at it mainly from the point of view of the Ministry of Labour. We are responsible for CPF as a scheme for old-age financial security. So the position we have taken has been consistent with that point of view. I think it is unfair of the Member for Ayer Rajah to ask why, after having studied this matter for so long, I have not given my position. My position has been clear all along - I am against it. But the Member has pressed me into studying it further, so I shall! But I would like to remind the Member of what the Member for Jalan Kayu said: the Government should not give in to pressure unless we are convinced that it is good for the nation.

May I now just turn briefly to the other issues that were raised this morning. The Member for Pasir Panjang raised a very important issue, and this is when are we going to restore the CPF rate. All of us seemed to have forgotten this issue in the heat of the debate on education. This is a much more important issue really: whether and when the Government is going to restore the CPF rate to the 40% rate. The Government has made a firm commitment on this point and I can assure you there will be restoration to the long-term rate of 40%. But we do need some time to look at the first quarter results and then the Cabinet will have to decide, in view of the economic uncertainties, when is the best time to make adjustments and how big an adjustment to make. But the commitment is there and it will be honoured.

The Member for Radin Mas suggested that we should have a ceiling or cap on the CPF. It is a fact I think that there is already a cap but in an indirect way, in the sense that we have a salary ceiling. Anybody who earns above $6,000 per month does not pay CPF the amounts above $6,000 per month. Neither does the employer contribute on his behalf. And if we pursue his idea to its conclusion, the question is, should we reduce the ceiling from $6,000 to say $3,000? I see him shaking his head. So what is it really that he wants? We need to have a system that is fair and a quantum may be one way. The fact is that we already do have a ceiling. But this is something that can be looked into further.

He asked the question whether a CPF member under certain circumstances could be allowed to help the parent buy an HDB flat. For example, a young girl who marries out and previously she has used her CPF for her parent's flat. This issue has been raised before. The problem is that we do not want to encourage a splintering of multi-tier family units and increase the demand for HDB flats. This is one consideration. This would happen if CPF members are allowed to use their CPF to buy a flat for their parents and another flat for themselves. This will also mean transferring CPF from the member to his parents. Such transfer is only allowed at present under the Minimum Sum Topping-Up Scheme for parents. So perhaps my Ministry should consider whether we could extend the Topping-Up Scheme to such cases that he has mentioned. The rules of the scheme will have to apply. For example, the member must have at least $60,000 in his CPF account before he can top up his parent's account and the parent must not have any CPF at age 55. If he does, we only top up the difference between that amount and $30,000 for a single parent or $45,000 for a couple. I will ask my Ministry to examine this possibility.

The Member also asked about the various insurance schemes. I think he has in mind a scheme that was mentioned some time ago, namely the Dependants' Protection Insurance Scheme. This matter has been under consideration for some time. Its implementation has been delayed by more urgent matters, for example the CPF withdrawal age and also other studies related to this scheme. It is in a sense complementary to the Home Protection Insurance Scheme which insures the member or his dependants against the loss of the HDB flat in case of death or permanent incapacity of the insured party. The Dependants' Protection Insurance Scheme (DPIS) is intended to insure the CPF member for a small sum of, say, $30,000 in case of his death or permanent incapacity before age 55. The annual premium will be payable from the CPF account. It will be extremely small and will have a negligible impact on his old-age savings.

Both the HPIS and DPIS are complementary. They are, as it were, two legs of the same concept, which is to have a minimum social insurance scheme for the benefit of CPF members. The details of the DPIS are being finalized and will be announced as soon as they are ready.

Sir, I think I have covered all the points on CPF.

The Chairman: Mr Chng, would you like to move on to your next subject?

Mr Chng Hee Kok: Sir, the question I raised earlier about putting a cap on the total amount of CPF funds has nothing to do with the present ceiling. My suggestion is to encourage a contributor to contribute as fast and as much as he can to the fund so that when it reaches an upper limit, he can slow down the contributions. In other words, by the age of 45 years old, he may have already accumulated something like ten times his Minimum Sum.

The other point I mentioned this morning is this scheme to transfer funds for the parent's flat. This has no consumption element under the Minimum Sum Topping Up Scheme because when the parent sells the flat the money has to be returned to the contributor.

The Chairman: I take it that you are not moving on to your next two subjects?

Mr Chng Hee Kok: You are talking about the next amendment? Sorry, Sir, I was expecting the Member for Yuhua to move that.

Sir, I must compliment the CPF for the service that it provides to members. One of the most interesting services that is presently available to all active members at the end of last year is the personal auto-link or PAL scheme. Sir, the PAL scheme at the moment allows a member to check on the balances in his account, the Medisave balance, the date of the last contribution and so on. I think there are two other areas which the CPF PAL scheme may be extended. The first relates to allowing a member to request for a statement of accounts by telephone. Presently about 35,000 to 40,000 transactions are done every year at the CPF office by members, requesting statements from the CPF. On average, a member takes half a day off from work to get a statement which actually, to my mind, could easily be implemented through the PAL scheme. A member needs only to dial the number on the telephone, indicate that he wants his statement, and it is done. That will also help to improve the productivity whereby less people will be needed to man the CPF counters.

The second area which the CPF PAL scheme may be useful is to allow a member to check on whether he is or is not covered under the HPIS, the Home Protection Insurance Scheme. As I understand it, some widows have found that on the demise of their husbands they are not fully covered under the HPIS because there were insufficient funds to pay for the premium. If members are able to check on the telephone it will be another useful feature of the CPF PAL service.

Mr Lee Yock Suan: Sir, I would like to thank the Member for Radin Mas for his suggestions. I think the proposals sound feasible and I will ask the CPF Board to look into them and if they are feasible, to implement them as soon as possible.

The Chairman: Dr Aline Wong.

Dr Aline K. Wong: I am not speaking.

Mr Chng Hee Kok: Sir, there is another cut.

The Chairman: We have covered this already.

Mr Chng Hee Kok: No. There is another issue which I mentioned earlier and I think the Minister can look into it. This is the insurance scheme relating to catastrophic illness. Presently, when a person suffers from a catastrophic illness, the members of the family will have to find ways and means to provide medical support. Since we are going to have the Dependants Insurance Protection Scheme, perhaps we can also extend this to include catastrophic illness. In the case of catastrophic illness, it should not be confined to the CPF Member alone. Perhaps immediate members of the family can also be covered. Will he Minister ask the CPF to look into this?

Mr Lee Yock Suan: Sir, the CPF Board, the Ministry of Labour and the Ministry of Health are already working out the details of the Catastrophic Illness Insurance Scheme (CIIS). It is quite a mouthful in its original form. The premiums will be payable from CPF funds. I believe once the details are ready, the Ministry of Health will announce the scheme.

Encik Othman bin Haron Eusofe: Sir, I would just like to ask the Minister to explain clearly the way in which his Ministry considers applications by Singaporeans to marry persons who are presently holding work permits or persons who have previously been on work permits. Are there any conditions which the applicant must satisfy before approval is given? I would like to ask the Minister to be more flexible in considering applications for permission to marry work permit holders. For example, where the applicant wants to marry a work permit holder whose family members, or the majority of them, are either Singapore citizens or permanent residents, could such application be more sympathetically considered?

Sir, there is great unhappiness about the way applications by Singapore citizens to marry persons who are on work permits are being processed. Rejections not only affect the applicants but also their family members, especially their parents and, in this connection, most of the persons who have seen me during my meet-the-people sessions are the parents of the applicants. In some cases, the work permit holders are no longer working in Singapore for many years. Perhaps there should be a cut-off period and those who have not worked on work permits, say, for a number of years, five years or thereabouts, should not be required to apply to the Commissioner for Employment for ermission. Could the Minister please clarify?

The Chairman: Mr Heng and Mr Lai are not here. Mr Lee.

Mr Lee Yock Suan: Am I to understand the Member for Changkat is not speaking this time?

The Chairman: No.

Mr Lee Yock Suan: Sir, Singapore is a small country. We are short of workers. Therefore, we have to import large numbers of foreign workers who are mostly unskilled and unqualified. If you leave it to the Ministry of Home Affairs, under its normal immigration rules, it will not allow these people to come in for long-term stay. But because we need them to come here to work, we have therefore allowed them in in large numbers. Having done so, we have to be cautious and make sure that not too many of them eventually sink roots in Singapore. Otherwise they would just swamp us. In so doing, we are protecting the interests of the vast majority of Singaporeans. We have to be selective in the kind of people we admit.

In looking at the applications, of course we consider a lot of factors. How long have they been working here, what are their qualifications, do they have any skills, do they have family members here and so on? But suffice it to say, approval is granted if the foreign worker has skills or qualifications of value to Singapore and has adjusted to our social and work ethos.

Over the years, we have approved at the rate of about 70% of the applications. Members may have the impression that we are very strict as most of the cases are turned down. It may be because the cases that go to them are the more difficult ones. In fact, as I said, 70% of cases have been approved. Of course, I want to add a word of caution here in case the public misunderstand me and expect all their cases to be approved. We cannot afford to make this process simple. We have to be stringent with our controls in order to avoid cases that we cannot allow wanting to come in. So the process has to go on and it has to be selective, but where they are deserving we have approved up to the rate of 70%.

He asked the point about those who have gone back after working here for some time. I think it is necessary that those who have worked here before must come under the same scheme, otherwise it is very easy for them to give up their work permits and then they are out of our controls. The question is, if they have been away for a long time, should the criteria still apply? I think in general terms the answer has to be yes, because some of these people are very patient. They keep applying years after we have said no. But whether there should be a cut-off point, it is something we can consider.

Mr Chiam See Tong: Sir, can I seek a clarification on this application to contract marriage between a Singaporean and a work permit holder? Is it not true that the practice of your Ministry is that, as soon as a work permit holder attempts to apply for marriage, he or she is sent out of the country? Is there such a policy?

Mr Goh Chee Wee (Boon Lay): Sir, on this question of marriage of work permit holders, I would like to give an example to show how a person can be utterly confused by the various policies of the different Government departments. In fact, this involves the Ministry of Labour (Work Permit Department), Ministry of Community Development (the Registry of Marriages) and the Ministry of Home Affairs (Immigration Department).

I have this constituent of mine who applied for permission to contract marriage with a work permit holder and, of course, the application was rejected. Approval was not granted and this constituent met somebody who claimed to be a middleman who could arrange for the marriage to be approved, of course, on payment of certain fees. And it turned out that this person was a big swindler. True enough, he brought this person to the Registry of Marriages and got the marriage registered. Of course, this constituent was very happy. In spite of the rejection by the Work Permit Department, the marriage was registered by the Registry of Marriages. Of course, the happiness was short-lived because, soon after, the Immigration Department sent a letter and wanted to deport the wife, saying that she had already breached the work permit regulations and had to be deported. This person was confused. On the one hand, you have one Government department which refuses permission for the marriage, a second Government department registers the marriage, and a third department tries to break up the marriage.

So he came to see me and asked what could be done. In fact, after realizing that this marriage was illegal, he went to the Registry of Marriages again and said, "No, no. Since this is an illegal marriage, I want to have the marriage nullified." But the Registry of Marriages said, "Oh, no. Although it is illegal, it is legally binding as far as the Registry of Marriages is concerned. If you want to divorce your wife, you must go through the normal legal procedure to break off the marriage." What is the person supposed to do? He came to see me again and said, "In the first place, I want to get married, the Government said cannot. Now I want to divorce my wife, also cannot." Can I ask the Minister what advice should I give to my constituent?

I think there must be some coordination. I suggest that if, in the first place the Work Permit Department rejects the marriage, the Registry of Marriages should not solemnize the marriage. Under the policy of the Registrar of Marriages, they just solemnize marriage on application. I suppose there should be some coordination. It does not make sense to me that if the Work Permit Department rejects the marriage, yet the Registry of Marriages goes ahead to solemnize the marriage.

Encik Othman bin Haron Eusofe: Sir, I just want a clarification from the Minister. Where the applicant wants to marry a work permit holder whose family members, in some cases many of them, are Singapore citizens but for one reason or another the work permit holder is not a Singapore citizen, could such an application be considered more sympathetically?

Dr Vasoo (Bo Wen): Sir, can I be allowed to join in because I have got a cut under this subject. So I will take this up.

There is a real need to look at this matter as a while. Applications to contract a marriage should be organized and coordinated. This is because there is a lot of confusion and uncertainty, and other related problems have resulted from the application to contract marriages. I am concerned about the plight of the older workers who are applying permits to contract a marriage. Most of them are in their late 20s or near 30s, and this group of people cannot expect to wait indefintely and in a limbo for a long time because they generally want to get married. I see no reason why these older workers should not be considered for marriage permits and be eventually not allowed to settle down with a family. I am wondering whether this problem could be looked at more sympathetically by the Ministry, particularly the problems of those who are in the older age group.

Mr Lee Yock Suan: Sir, I can see from what the Member for Boon Lay has told us that there has, in fact, been some confusion and I must say he is not the only one confused because, from the line of questioning of the Member for Potong Pasir, I think he too is confused. I do not blame any of you because there are different departments dealing with this matter and so I should try and explain clearly what the situation is.

Firstly, there are two kinds of foreign workers. One kind is from what we call traditional sources, basically Malaysia, because for many years we have this to-ing and fro-ing of workers from Malaysia and to Malaysia. So that is a traditional source. For these workers who apply to get married, the Ministry will not turf them out as soon as they apply. They are allowed to continue working. Many of them do keep trying to get approval.

The other group of foreign workers are known as the non-traditional source. These are workers from the Philippines, India, Sri Lanka and so on. These people are only allowed to work in the construction sector and as domestic servants. One of the conditions of their work permits is that they should not apply to get married. If they do, then they will be asked to leave. So it is only in respect of that category of workers that the Government is stricter.

Concerning the other question by the Member for Geylang Serai, I have mentioned in my earlier response that family roots are considered. So it is one of the factors we look at.

There are two kinds of foreign visitors to Singapore. Some come here to work, they apply for work permits. Some come here as visitors, they are on social visit passes valid for two weeks or longer, and they are allowed to stay here for 60 days out of a period of 90 days. Then they must go back to Malaysia, for example, and renew their passes.

The work permit restriction on marriages applies to work permit holders, whether applicants, current holders or past holders. All these come under the scheme administered by my Ministry. It is a condition of their work permits that, if they want to get married, they must seek approval from the Commissioner for Employment. If they get married without approval, then the foreign spouse will be banned from Singapore permanently and the Singaporean spouse will not be allowed to buy HDB flats, and so forth. The Government has been very strict on this point. These are the work permit holders.

Then there is the other group of social visit pass holders who are not here to work. It is a different matter if they are working illegally. If they are found to be working illegally, then the same rules governing work permits will apply to them, because otherwise they will escape our controls. But if they are only here as visitors and not for purposes of work, then of course work permits do not apply to them. If they wish to get married to Singaporeans, they will have to apply to the Ministry of Home Affairs. They will, of course, apply to the Registry of Marriages first. The Registry of Marriages will check with the Ministry of Labour for confirmation that this applicant has not applied for a work permit, so that the work permit rules do not apply to him. In that case, the Registry of Marriages will register the marriage because, as far as they are concerned, marriage is okay if they want to carry on. But they are informed at that point of time that marriage does not entitle them to permanent residence. These are two separate matters. If you want to marry a foreigner, by all means. But the Government does not promise you that the foreigner would be allowed to live in Singapore. This position is not uncommon in other countries. For example, the UK also has the same rule - you can marry, but whether or not you are allowed to come in is a separate matter. In fact, in some countries there are even marriages of convenience, where they get married and then after getting the permanent residence, they break up. I am not saying the same thing happens here. That is one reason why permanent residence rules and marriage approval are different matters.

Unfortunately the Ministry of Community Development has also been dragged into the picture because the Registry of Marriages is under MCD. Actually they have no say on these policies. The controlling authorities are the Ministry of Home Affairs and the Ministry of Labour (Ministry of Labour in respect of work permit holders).

One other point from the Member for Bo Wen. He asked whether we can give special consideration to older workers. It is a factor that we consider. But from the point of view of population, actually we should be attracting younger workers, not older workers. I mean, if they are above 40 or above 50, is it wise for them to get married and have children, especially if the woman is so old? From the point of view of population also, as I have said, age is not an advantage, but we do look at the factors.

Dr Vasoo: Sir, on a point of clarification. I am not talking about older workers. I am talking about those who have applied when they were young. They have applied for such a long time that by the time they are given permits they are already old. I am talking about this group of people, and so I think that consideration should be given to them, especially when they reach 30 years old. When they pass 30, you may argue that they are of no more use. But I think it is important that some value or some consideration should be given to this criterion of age.

Mr Lee Yock Suan: What I can say is that I will try to be as sympathetic as possible. I can tell you that this business of marriage approvals is one of the least pleasant aspects of my job in the Ministry. The Government does not like to do this. I do not like to do this. But it is necessary for the benefit of the vast majority of Singaporeans. So we are just discharging our responsibility.

Mr Chiam See Tong: Sir, may I just be allowed to say that in fact the reason why we are confused is because this is the first time I am hearing Government's policy on marriage of work permit holders. So perhaps this point can be more highlighted, especially among the workers. I think we in the Meet-the-People session would have less of these cases.

Mr Lee Yock Suan: Sir, this policy has been in existence since 1973. And you will be surprised that most of the foreign workers are well aware of the policy. But of course the Member for Potong Pasir has been here for only about three years. We cannot expect him to know all the policies. So gradually we will have to explain to him.

Mrs Yu-Foo Yee Shoon (Yuhua): Sir, I would like to speak on some problems faced by the workers.

If a unionized employee is dismissed without just cause or excuse, he could appeal through his union to the Minister for Labour under section 35(2) of the Industrial Relations Act for reinstatement. This reinstatement is provided under the law but for the past 10 years or so no such directive against an employer has been issued by the Minister for Labour, although there have been cases which merit reinstatement. The Minister has instead ordered payment of compensa- tion, a power provided under the law. This causes frustration to unions and affected the workers because they feel that employers will not be sufficiently deterred by just an order of compensation. In some cases, compensation may not be adequate to offset the losses, particularly if a worker has a long service, earns a fairly high salary and thus finds it difficult to get alternative employment. The Ministry's point of view, however, is that where there has been a wrongful dismissal, an order of reinstatement does not help because relationship between the employee and his employer would have broken down. The present practice of paying compensation to the victim is acceptable if the victim is not prepared to be reinstated. However, if the victim is prepared to be reinstated, then the Ministry should consider the case carefully and section 35(2) pertaining to reinstatement should be applied.

Another problem concerns the unfair dismissals of union organizers. Under the Industrial Relations Act, although there are provisions against the discrimination of union officials and members, these only apply if the union has won recognition. There have been cases where union organizers have been dismissed when the union has lost the secret ballot or even before a secret ballot is conducted. Where the union has not obtained recogniton, then the affected employee will have to appeal against the dismissal in his personal capacity under the Employment Act. Unions thus feel that there is inadequate protection for union organizers, which may thus discourage some workers who are keen to play an active part. The unions also find that registering the names of union organizers with the Ministry of Labour is not sufficient protection against the unfair dismissals of organizers.

The other area is pregnant female workers. There are many female workers who prefer night work because it enables them to be with their family at home during the day. Because of this, some of them deliberately hide their pregnancy from employers so that they can continue to do the night shift. Some have turned to the union for help to continue with night work.

Employers too face the problem of keeping to the law, because of the tight labour market and because of the requests to do night work. The other problem for them is what to do with those female workers who are employed on permanent third shift in the first place.

I would like to urge the Minister to look into this regulation under the Employment Act.

Mr Lee Yock Suan: Sir, firstly, this question of dismissals without just cause or excuse. As the Member herself is aware, the Ministry has been reluctant to order reinstatement because very often the relationship has been strained. By the time it comes to the Ministry, there are bad feelings between the employer and the worker concerned. As a matter of practice, the Ministry tends towards awarding compensation rather than reinstating the worker. I think this has a good basis because there are a lot of jobs available and the Government does not want to worsen the relationship. However, over the years we may have tended to go too far in the sense that there could be cases, as mentioned by the Member, where employers may be tempted to take advantage of this rule to dismiss, for example, union organizers to prevent the workers from being unionized. I will re-examine this policy to see whether there is indication that we have gone too far towards the payment of compensation. And if there are good reasons, for example victimization of union organizers, then perhaps my Ministry should seriously consider reinstatement. I will get my officers to study this matter thoroughly and if it tilts too far one way, we will try and do a correction.

The question of pregnant female workers working on night shift has been raised. This has been one of the subjects studied by the Committee on Third Shift, which I have appointed sometime ago, and its report has been completed. Unfortunately, this point has not been highlighted by the press. After thorough discussions within the Committee which comprises the Government, employers and unions, the feeling is that the present regulation on pregnant female workers working the night shift is perhaps a bit too rigid. We have done a survey and found that, out of 13 electrical and electronics companies, there were 15 cases of pregnant women who had to resign as a result of this regulation that pregnant women should not work the night shift. The intention of the regulation is very good. It is meant to protect pregnant female workers. But we should not overdo it and in cases where the woman herself is healthy, and she is willing to work night shift and the doctors have not certified that she is unfit, then we should not prevent her from having this means of livelihood if the woman simply cannot work in the day. So the Committee has recommended that the rule be amended somewhat, such that those pregnant women (1) who are willing to work night shift and have given their written consent and (2) who are not certified medically unfit for night work, will be allowed to do night shift on their own choice.

But I must caution employers that they should not take advantage of this rule because the intention still is that employers must try as far as possible to arrange for pregnant female workers to work the day shift. I think it is fair to the women workers. Even though there is no medical evidence of ill-effects of pregnant women working at night, nevertheless I think it is fair to them that they should be allowed a less taxing shift. But where the woman herself wants it and gives her consent in writing, and is not certified medically unfit, then I think we should give her the choice.

Mr Lim Boon Heng: Sir, we have a long and lively debate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2). Dr Vasoo is not moving. Amendments (3) and (4). Mr Lim is not moving. Amendment No. (5). Encik Abbas.

Encik Abbas Abu Amin (Pasir Panjang): Sir, I beg to move,

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

Sir, I would like to touch on the need to review the safety and health provisions of the Factories Act.

Safety and health standards of workers in a country should be consonant with the state of its economic development. During the last two decades of our industrialization, we have managed to achieve a balance between the benefits of industrialization and the control of industrial hazards. This must continue. As the spectrum of health and safety hazards changes with the industry, the legislation needs to be reviewed and amended from time to time to keep up with the changes and meet new problems that may arise.

Sir, the last revision of the Factories Act was made in 1973. During this revision, two important new provisions requiring certain classes of factories to employ safety officers and form safety committees were included in this new Act.

The Factories Act is the main legislation that governs the safety and health standards of workers at the workplaces. Presently, the Act only covers those places that are classified as factories as per definition of the term "factory" as listed in the Act. I understand that the Act is therefore not enforceable in other workplaces that are not classified as factories even though there may be workers employed in these workplaces.

In view of the various changes I mentioned just now and the advancement in technology bringing about new work operations and new working environment, I would like to ask the Minister what further steps the Ministry has taken to keep track of this new development and continue to review the Act to ensure its adequate coverage to maintain very high standards of safety and health of our workers.

Mr Lee Yock Suan: Sir, I would like to assure Members that my Ministry is conscious of this problem. In fact, we have been looking into the question of how wide a coverage the Factories Act should extend to, in terms of protection of the workers' safety and health. As new activities come into Singapore and as we upgrade, we will have to examine the new activities to see whether they are hazardous and whether they should be covered in one form or another.

Here, I must also clarify that there are certain other situations where it is not totally under the purview of my Ministry. For example, there are a lot of workers who die from traffic accidents on their way to work. This comes under the Ministry of Home Affairs. There could be other cases where workers get drowned, for example. They fall off the wharf in the harbour areas and so on. In those cases, my Ministry works closely with the PSA to enforce safety and health. But the authority in such places is basically the PSA. And it is also the case with some shipping lines because people do fall overboard and get drowned. So we have to be quite clear about the areas which are the responsibility of my Ministry and make sure there are no gaps in the coverage, as far as possible.

Areas we can look into will be, for example, warehouses and new industrial testing facilities. But manpower resources are limited. The best approach for us will be to monitor the accidents in all sectors where people are at work and zero-in on those areas where the accident rates are high, especially resulting in death and permanent incapacity. For example, we have concentrated our efforts on shipyards and construction where the hazards are very high. So in extending our coverage, we will have to channel our resources to those areas that most require our attention.

Encik Abbas Abu Amin: Sir, I am happy with the assurance given by the Minister. I would like to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (6), Mr Lim is not moving. Mr Chng is not here. Amendment No. (7), Mr Lim.

Mr Lim Boon Heng: I am not moving, Sir.

Mr Goh Chee Wee: I am also not moving, Sir.

The Chairman: Dr Wong is not here. Amendment No. (8), Dr Arthur Beng.

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

That the sum to be allocated for Head R be reduced by $10 in respect of Code RK 1500 of the Main Estimates.

Sir, here I would like to speak on the topic of work permits for the stevedoring industry. Before I speak, I would like to declare pecuniary interest as I am on the panel of doctors of some of the stevedoring companies. Sir, I would also like to express my thanks to the GPC Chairman for Labour for withdrawing his amendments and allowing me to speak.

Sir, stevedores are workers carrying out vessel operations, berthing and unberthing, godown work, lashing and unlashing, stuffing and unstuffing, at PSA gateways. Singapore is the world's busiest port. Although a very high percentage, 75%, of PSA's cargo are containerized, stevedores are still needed to handle the residual volume of conventional cargo and perform some manual work associated with container handling, especially the lashing and unlashing and the stuffing and unstuffing of cargo.

Sir, there are 5,500 stevedores licensed by the PSA. 40% of these stevedores are foreign workers and the rest are Singaporeans. One can thus see a heavy dependence on foreign workers in this industry. Stevedoring is gradually being privatized, with PSA playing a smaller role as a direct employer. Stevedoring work is not attractive to young Singaporeans. This is understandable because of the rigorous nature of the job and the fact that it involves servicing the ships at port 24 hours a day, 7 days a week, throughout the year. This problem is compounded by the fact that the majority of the Singaporean stevedores are in the older age group, above 40 years. 61% of the Singaporean workers are above 40 years compared to 37% of the foreign workers in the same age group. The younger and more robust workers are therefore foreigners.

Sir, I understand that since last year, PSA and the Ministry of Labour have been discussing the question of issuing more work permits for stevedores due to the acute shortage of workers. What is the outcome? It is important to resolve this problem speedily. The problem of a shortage of stevedores is more acute as the stevedore can be considered as a semi- skilled worker. Before anyone can be allowed to work in the port as a stevedore, he has to undergo a one week orientation course by PSA. Only after this course will he be issued with a pass. Thus, a stevedoring contractor cannot just hire any available odd-job worker and put him on the job. I hope the Ministry of Labour will issue work permits more liberally so as to ease the acute shortage of labour in the stevedoring industry.

Mr Lee Yock Suan: Sir, I have taken careful note of the Member's request and I will ask my Ministry to discuss it with the PSA and come to an early conclusion.

I agree with him that port services are very essential for Singapore and that stevedoring is a heavy and difficult work. I would not say that it is a skilled or semi-skilled job just because a person has to go for one-week's orientation. But it is definitely a very difficult and heavy job. In fact, my Ministry has allowed some approved stevedoring companies to recruit Malaysian workers. But the question is whether the numbers are enough. Fortunately, with the containerization and mechanization of port activities, I do not think the number will go up very fast. On the other hand, we still need some of them for the conventional cargo handling. So I take his point. My Ministry will look into this matter and come to an early decision.

Dr Arthur Beng Kian Lam: Sir, I beg leave to withdraw.

Amendment, by leave, withdrawn.

The sum of $20,792,700 for Head R ordered to stand part of the Main Estimates.

The sum of $11,512,700 for Head R ordered to stand part of the Development Estimates.

Head S -

The sum of $69,486,140 for Head S ordered to stand part of the Main Estimates.

The sum of $19,409,000 for Head S ordered to stand part of the Development Estimates.

Head P -

The Chairman: Amendment No. (1), 60 minutes. Dr Aline Wong.

Dr Aline Wong: Sir, I beg to move,

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

Sir, my GPC benefited a great deal from the meetings we had with the Ministry officials over the last year, from our visits to the various health institutions as well as from the dialogue sessions with the medical professionals during the debate on the National Agenda throughout last year. Most recently, in late February, a Seminar on Economic Issues in Health Care was conducted by the Faculty members at the NUS, in response to a suggestion made by the GPC. From all these discussions, it is clear to us that primary health care should be the cornerstone of our health policy and that health education and preventive medicine are effective ways to contain health costs. Since other Members of my GPC would be speaking on such aspects of our health policy, let me start the debate by calling on the Minister to review the manpower policy with regard especially to the current shortage of nurses and therapists.

Sir, the shortage of nurses has recently received much public attention. The Minister has already assured the House that he is working with the Minister for Finance on an active and favourable review of the nurses' salaries. Again, since a couple of my GPC Members will be speaking on the problem of nurses, I should like to say a few words regarding therapists. It seems to me that, by comparison with the nurses, the current shortage of therapists has been relatively neglected. According to the FY 88 estimates, there are 72 established posts for health therapists and three for speech therapists. I am not really sure about the exact rate of vacancies in the past, ie, the number and the proportion of vacancies which have been left unfilled by therapists. But I believe the situation is not as serious as that of the nurses. A quick look at the black volume (estimates) suggested to me that perhaps the vacancies could be as much as about 12%, but I stand to be corrected by the Minister. I think this situation should be put right as soon as possible. In my view, the shortage of therapists is likely to continue unless the Ministry reviews the salary scale for the therapists also.

According to my understanding, and some group of therapists had seen me informally on this, part of the problem is that local training opportunities for therapists are grossly inadequate. As a result, those who are interested in pursuing this career have to go overseas. When they come back with a university degree or diploma, they find the local salaries very unattractive indeed. In my opinion, since we are going to face an ageing population soon, our need for more therapists will certainly rise. Furthermore, the Government has just made a commitment to do more for the handicapped and the disabled and an advisory council has been announced to focus on this group of unfortunate people. But without the required number of trained therapists, I do not think it is possible for us to provide the necessary support services for the elderly or the handicapped. Thus, I would urge the Minister to review the situation of therapists alongside his review of nurses' salaries. Otherwise, the quality of our medical services as a whole is going to be compromised and we shall not be able to realize our goal of medical excellence.

Mr Chew Heng Ching (Kaki Bukit): Sir, for some years now we have been facing a shortage of nurses in Singapore, in both the Government hospitals as well as private hospitals.

In FY 87 alone, statistics in the Budget document show that the Ministry of Health has only 3,134 nurses against an approved establishment of 3,888, giving a shortfall of about 750 nurses. Nursing Assistant's actual strength was only 1,460 against an approved establishment of 1,824, giving a shortfall of about 400 Nursing Assistants. Sir, this problem of shortage of nurses is compounded if we include the shortage experienced in private hospitals. In fact, the problem in the private hospitals is so serious that a local newspaper carried a report sometime ago that a private hospital is even prepared to pay its nurses $100 for every additional nurse that they bring in.

Sir, the problem of shortage of nurses can be attributed to what we call the "push" and "pull" effects. Push effects are long working hours, graveyard shifts, low salary and prospects, stressful work environment, low image and the low status given to nurses. The pull effects unfortunately are taking place because our economy is expanding very fast. A lot of school leavers and even existing nurses are looking towards jobs in other types of service industries where the rewards are better and working environments are far superior.

Sir, what is worrying is that both these effects are pulling in the same direction, actually making the problem of nurses shortage much worse. Nurses, as we know, play a very important role in building a healthy nation. Unless we very seriously and earnestly address the effects around the shortage of nurses problem, it will ultimately have an adverse impact on the standard of health care services rendered in our hospitals. Of course, ultimately this affects our efforts to become a Centre of Medical Excellence.

Sir, the Acting Minister for Health mentioned in this House more than two weeks ago that the salary of nurses in the public sector will be increased. Indeed, Sir, this is great news. But salary is only one factor. By itself, I do not think it can solve our problem. More should be done to try to enhance the status and image of nurses. More attention should be paid on the training and education of nurses. Career prospects must be enhanced. Working conditions in hospitals must be improved. We cannot use nurses to peform clerical work in order to save on clerical manpower. I think this is a waste of nursing resources.

The Ministry of Health recently spent $150,000 on a publicity campaign to attract more people to join the nursing profession. Again, it is a good effort by the Ministry. But, Sir, publicity campaigns and salary revisions, by themselves, are just piecemeal approaches to the problem. What is likely to happen is that we may be able to, through these campaigns and through salary revisions, solve our problem in the short term. In the longer term when school leavers become better trained and experienced nurses in Government hospitals, they are likely to be poached by private hospitals because the problem is not solved at the private hospital end.

I think there is a need to take a comprehensive view of the problem. There is a need to adopt a total approach to the problem. There is a need to get the private hospitals involved in helping to address and solve this problem. There is also a need to get professional nursing bodies involved in order to tap their feedback and ideas to address and solve this problem. May I therefore suggest to the Acting Minister that the Ministry of Health consider forming a task force comprising officials from the Ministry of Health, Ministry of Finance, Ministry of Labour, Ministry of Education, private hospital representatives, nursing professional bodies and others to come and look at this problem in toto and to put up recommendations to solve it.

The Chairman: Dr Wong, your next subject.

Dr Aline Wong: Sir, I would like to speak on the use of Medisave for the catastrophic health insurance scheme.

Sir, Medisave scheme by now is very well accepted by the people and I think many people also feel that it is a very good scheme as it enables them to pay for their hospitalization. However, the $15,000 limit may not be sufficient to meet more than a few times of hospitalization, especially if the person falls sick seriously. Some of these illnesses are catastrophic in nature which can hit anybody, whether one is young or old.

At present Medisave can be used for family members, including parents. What this means is that there is a certain amount of pooling of funds and therefore pooling of risks. But the pool formed by the family members is very limited. It would therefore be better to introduce a catastrophic health insurance scheme so that the pool becomes much, much bigger. Also some catastrophic illnesses hit older people more often than younger people. But I notice from the information supplied to us by the Ministry that the amount of Medisave balances held by the older age groups is smaller than that held by the younger age groups. In view of these facts we feel that the catastrophic health insurance scheme should be started as soon as possible as a supplement to Medisave. Ideally, the scheme should be made com- pulsory for everybody and the premium should be paid through Medisave.

With the entire population forming the pool, the premium per person can be brought down to as low a level as possible. However, there are also some people who have already been covered for medical benefits by their employers. So if we make the whole scheme compulsory for everybody, there might be a small number of people who might be made unhappy because of this. We have received some suggestions from members of the medical profession that perhaps the Acting Minister might like to consider. They suggest that perhaps we should allow for an opting out clause, much in the same way as we have an opting out clause in the Kidney Transplant provision. My own guesses are that although there are some people who are already covered by medical insurance or for medical benefits in other ways, the number who may want to opt out from this scheme would be small, especially if the premium is low enough.

Apart from this question of whether the scheme should be made compulsory or not, there are three other questions which I would like the Acting Minister to pay some close attention to. These are the question of deductibles; secondly, of renewability, and thirdly, the role of private companies. Whether Medisave can be allowed to pay for the deductibles as well as the premium has to be considered carefully in the light of the small balance of most Medisave accounts at present. If deductibles are allowed through Medisave, the payment will be made convenient and painless. But there is the possibility of abuse of Medisave funds, and again the concern is over the possibility of overcharging and over-investigation by both the consumers and the suppliers of medical services.

However, since people are already allowed to pay for hospitalization through Medisave for any kind of illness at present, I think the case for not allowing Medisave for deductibles under a catastrophic health insurance scheme is not very strong. So what I would suggest to the Acting Minister is that instead we must find every way and means to control Medisave abuse. Our present system of auditing, our present mechanism for containing any possibility of overcharging, over-investigation, must be further strengthened.

The Acting Minister has assured us in an answer to an oral question that, in fact, so far the Ministry has discovered no case of medisave abuse through the hospital auditing system. But apart from this mechanism, I think there should be other ways also instituted to safeguard against the possibility of Medisave abuse, and in connection with this question of deductibles it is also an additional reason for strengthening these mechanisms.

The second question pertains to the question of renewability. Because any commercial insurer will adopt the principle of risk aversion in order to stay financially viable, there is the danger that those who need the insurance coverage most would not be included in the scheme. A recent report in the Straits Times on 13th March, 1988, that the Insurance Corporation of Singapore has had to revise its hospital and surgical policy for retirees is a good example of insurance companies having to avoid risks and raise premiums or cut benefits because of its financial loss. So if a universal catastrophic health insurance scheme were to be implemented, the Acting Minister would have to inform the public very clearly whether everybody would be allowed to join at the same premium or would there be differential rates according to age or other risk factors and would the premiums be revised periodically.

The third point is about the role of private companies. As far as possible, some competition among insurance companies will raise efficiency and provide some choice to the people. The Government could require that everyone must carry an insurance policy, allowing Medisave to pay for premiums up to a limit but leaving the individual to choose whichever company he prefers. Alternatively, the Government can settle on a scheme which would meet the needs of the greatest majority of people and whose premiums could be kept low through a system of public tender, which could be called once every few years. In this way, insurance companies can compete for the contract, thus raising efficiency as well as providing some choice in the hands of Government on behalf of the people.

I hope the Acting Minister will give some thought to the above points I have raised. These points are not only reactions from Members of my GPC but they are also comments gathered from the medical professionals, health economists as well as private insurance companies whom we have talked to.

The Chairman: Dr Augustine Tan is not here. Dr Wong, can you continue with your next subject?

Dr Aline Wong: Allow me to move on to the subject of community hospitals.

The FY 88 estimates have just committed a capital grant of $30 million to building our first community hospital in Ang Mo Kio. On the whole, we like the concept of the community hospital. The idea is to provide a lower cost alternative for intermediate level of hospital care, particularly for the elderly sick, the terminally ill, and patients convalescing from operations or serious illnesses. However, we would like to urge the Minister to think about certain points, ie about the financing and management of the community hospitals, before the final plan is implemented.

I have here three major sets of questions. One is the location of community hospitals. Sir, since a significant proportion of the patients to be catered to will be the elderly sick, it would seem that community hospitals should be located in those HDB estates with an ageing population already, such as the HDB estate in Queenstown or Toa Payoh; whereas Ang Mo Kio is still a relatively new town. So what are the reasons behind the Ministry's decision to locate the first community hospital in Ang Mo Kio, and in future, what are the considerations that the Minister will have in building additional community hospitals and in which parts of Singapore?

The second question is with regard to the participation by the private doctors, or GPs. Again, we welcome the idea of participation by GPs in taking care of the patients. If the GPs can make the rounds of patients at the community hospitals, then it would certainly help them establish the family-doctor type of relationship with the patients and their family members. We have some feedback from the GPs that they feel that, once they refer their patients to the general hospitals, they lose touch with them, and they feel that this is not conducive to maintaining a close relationship with the patients and their families. By allowing the GPs to make rounds in the community hospitals will also yield another kind of benefit to the country, ie, the Ministry or the Government will be making use of the resources available in the private sector. Specifically, the private doctors in their own practice are a kind of resource upon which the community hospitals can draw on in order to reduce the heavy workload among the medical officers in Government hospitals at present.

But we have a question on the Ministry's plan to tender out some office space in the community hospital. Is it really a good idea? Has the Ministry thought carefully about the impact of this kind of scheme for the GPs in general? Since the private doctors who will be invited to tender for the office space may keep in mind the captive clientele, so to speak, which is available at the community hospitals, they may tender for the office space at a high price. But in the end this means that the patients in the community hospitals may have to pay more for medical services at the hospital, although they enjoy the convenience. And what about the impact on the other GPs who maintain clinics in and around the area of the community hospitals? So my question for the Minister is whether his Ministry has carefully considered the implications of this kind of plan on doctors in general practice as well as the patients in the hospital.

The third question is on management and finance. Again, we are told that GPs, volunteers and other members of the community, will be invited to participate in the board of management of the community hospitals. May I ask if it is also the plan of the Ministry to let community hospitals be run autonomously, in the same way as Government hospitals will be run autonomously through the process of restructuring? If so, then an additional question in the minds of the public would be whether the rates charged at community hospitals will also be subject to the same rate of decreasing subsidy as we have now in the restructured Government hospitals?

At this point, allow me to touch on the question of subsidies in general before I relate this to the community hospitals in particular. Whatever the Government may say or in whatever way they may explain to the population that the present policy of restructuring of Government hospitals is not the same as privatization, the fear still remains in the minds of the people over the rising charges at Government hospitals. The widespread perception of the public is that the Government is not only cutting the rate of subsidies but it is at the same time reducing the number of Class C beds. The Government argues that nowadays people want and can afford to have higher quality services, as seen in the increasing demand for B1 and B2 beds on the one hand and the less than 100% occupancy rate of C Class beds on the other. My GPC members, however, feel that the increasing demand for B1 and B2 beds is at least partially due to the introduction of Medisave. People think that Medisave is their money locked up by the Government and they are therefore tempted to draw on it liberally for better quality services. In the process, the health cost for the nation will be raised and people may be using up their Medisave funds prematurely. So I wonder if the Ministry is trying its best to discourage any unnecessary demand for high quality services.

In connection with the community hospitals, may I urge the Minister to consider allowing a higher proportion of Class C beds at the community hospitals than is available at present for the Government hospitals on the average. The reason is, except for terminally ill cases, I suspect the kind of patients who would use the community hospitals will be staying in the community hospitals for a relatively long period for chronic illness, and even though the cost per bed at the community hospitals may be lower than at the acute hospitals, in the end the bill to the patient may still be quite large. Therefore, I urge the Minister to consider allocating a larger proportion of C Class beds in community hospitals than is presently available in the Government hospitals.

Dr Arthur Beng Kian Lam: Sir, I would first like to declare my pecuniary interest as I am a medical practitioner.

Sir, in an answer to a Member of the House last week, the Acting Minister for Health announced that a community hospital will be set up as a trial project in Ang Mo Kio. May I respectfully suggest to the Minister that further study of the concept of the community hospital is needed. I fully agree with the need to release beds in acute hospitals for the acutely ill which are presently occupied by the chronic-sick or aged sick. But is the setting up of a separate hospital necessary or cost effective?

Sir, once a hospital is set up, a whole medical team together with ancillary staff and equipment will be required. For example, laboratory and X-ray services, a department for rehabilitation, including physiotherapy and occupational therapy and, of course, an accident and emergency department and outpatient services will be required. Would it not be more economical to provide these services as a separate chronic sick wing of a general hospital? For example, I understand that Toa Payoh Hospital is undergoing an extensive upgrading exercise. Will it not be better to include in Toa Payoh Hospital a wing for the chronic sick? If I heard the Minister correctly, this is what is envisaged for the community hospital in Bedok that they will have a wing for the community hospital. Adjustments can be made to the staffing ratio in the various disciplines and with much less expenditure. The same aim can be achieved. Mount Alvernia Hospital will be doing exactly this but, of course, for a hospice, something quite different from a community hospital.

Furthermore, the Minister, I am sure, is aware that even a chronic sick patient can suddenly develop an acute medical problem or complication. Transporting an ill patient from one hospital to another is dangerous and undesirable. Transporting ill patients from Toa Payoh Hospital to Singapore General Hospital while I was a medical officer in Toa Payoh Hospital is still very fresh in my mind. If the chronic sick ward is within the same hospital compound, this problem is lessened considerably.

My final comment, Sir, is with regard to the status of the hospital. Being by nature less than glamorous, it may be regarded as a second-class hospital. Many may shun it. Staff morale will be affected and not many doctors and ancillary staff may want to serve in it. There is no question of right or wrong regarding this. It is a reality that we had better realize before we spend millions of dollars for a project that few, neither patients nor professionals, may want.

The Acting Minister for Health (Mr Yeo Cheow Tong): Sir, first, I would like to thank all the Members for their views. There are many proposals and questions. The Member for Changkat raised the question of the manpower resources in my Ministry. Members will be aware that in health care the level of labour intensiveness is very high. Manpower resources therefore are very important and to continue providing a high standard of health care, my Ministry will strive to ensure that all the essential services are not only adequately staffed but are staffed with appropriately qualified and trained personnel. However, the achievement of this objective of providing a high level of service must take into consideration Government's policy of restraining manpower growth on the one hand and on the other hand, the need to cap the very rapid increases in health manpower expenditures experienced over the last 10-15 years. It is important therefore for my Ministry to ensure that the available staff that we have, whilst we are shorthanded in many places, are still able to perform effectively and efficiently.

We can help them do this by providing them with adequate training. In this regard, we have been sending more of our staff for training in management and supervision. We will be holding more inhouse courses to ensure that a broader level of supervisory staff are trained. This will help us strengthen the administrative capabilities in the Ministry and also will help us to take short-term measures to overcome whatever manpower shortages we face.

With regard to the specific shortages of nurses and physiotherapists, as I have informed the House recently, we have been taking several measures to overcome this problem so I will not repeat them. With regard to therapists, the Member is wrong in quoting the number in terms of percentage of vacancies. Actually the vacancy rate is much higher. I am sorry to inform the House that in the area of therapists, the vacancy rate is actually about 40%, not 12%. There are many reasons as to why this has happened.

The Member for Changkat has put her finger at the right place, namely, there is no local training available. Therefore, Singaporeans who wish to take up this career or profession have to be trained abroad. But if they are going to spend so much money in being trained overseas and on coming back, finding that their salary is equivalent to that of a General Science graduate, they may find that it is not really worth their while to invest that much money and not be able to get an equivalent pay-back. They might as well stay in Singapore and do a Science degree at the local university.

Most of our physiotherapists and occupational therapists have been sent abroad under scholarship and even today we have a number who are being trained abroad under scholarship. The PSC has been offering scholarships every year. Unfortunately, the take-up rate is rather low. The reason is that the qualifications criteria imposed by PSC in the past have been much too high. Therefore, many of those who applied did not qualify, whilst those who did qualify were not prepared to accept the scholarships because they could opt to take up scholarships in other more lucrative professions. So we are caught in the bind in terms of our ability to train the required number of therapists.

I am glad to report to the House, however, that after consultations with the Ministry, PSC has recently agreed that the qualification requirements for applicants applying for these therapist scholarships will be lowered so that more will qualify and hopefully the available scholarships can be taken up. Consequently, we should be able to overcome the shortage within the next six to seven years.

We are also looking into the possibility of establishing a local college for therapists. We have been discussing with various parties abroad and we have also been discussing with the Ministry of Finance in terms of financing for this project. It is still at a very exploratory stage, so I would not like to give Members any false hope in this area.

The Member for Kaki Bukit has suggested that the Ministry should perhaps form a task force to study the problem and come out with an integrated approach to solving this problem. I wish to inform the Member that we have studied this problem quite extensively. We have identified a multi-pronged approach that must be taken towards resolving this problem of shortage of nurses as well as therapists. We have been able to proceed with actions that are within our control. For example, the examination of the work content of the nurses. How do we make sure that nurses are more efficiently occupied and are doing mainly nursing work? How do we make sure that non-nursing functions which can be removed are being removed so that the nurses can be more effective in their work? All those have been going on for the past few years as part and parcel of the process of internal improvements. How to improve the working conditions, how to ensure that the night shift roster which is very, very unpopular, is more evenly distributed so that we do not cause more nurses to resign or to retire? How do we improve the status and image of the nurses? All that we are able to do on our own, we have done, quietly without fanfare.

With regard to the private hospitals, I agree with the Member that the private hospitals have not been playing their part in solving this problem of shortage of nurses. They too have been very badly hit, although not as badly as the Government hospitals. As far back as 1985 I had, in one of my speeches, called upon the private hospitals to undertake their own in-house training. This way they can be guaranteed of their own supply of nurses and they do not have to pinch from the Government to meet their future needs. Sad to say, there was no response, no reaction at all until recently.

We have now tied the training of nurses by the private hospitals to the supply of nurses from non-traditional sources. This has resulted in some interest on the part of private hospitals. Now, several of them are discussing with my Ministry on how to implement training programme for their own nurses so as to meet their own future needs. Over time, this problem of private hospitals' participation will be overcome.

In terms of the needs of private hospitals and why the nurses have been resigning or retiring from the Government service, I think it would be useful for me to give Members some additional information. Sir, from 1984 to 1987 1,502 Government nurses either resigned or retired from the Government Nursing Service. The bulk of them resigned, as only 40 or 50 retired during that period. In contrast to this figures of 1,502, the number of nurses in the private sector actually increased by only 734. Of these 734, 455 were absorbed by NUH. So Members will see that out of the 1,502 nurses who resigned or retired, only 279 of them joined the private sector other than NUH. The needs of the private sector has not been that great and it has not been a significant pull factor in terms of the resignation rate.

In terms of the number of private nurses in the private sector, that is, those who do it on a contract basis - I think they charge between $80 and $100 per session - that number has only increased by 40. So the number that joined the private hospitals would be around 220 to 230. It is very, very small compared to our overall turnover rate.

Sir, with the restructuring of the hospitals and with the hospitals being given more autonomy in management, in manpower deployment, in career development, I think our Government hospitals would be able to come up with more attractive career schemes, better scope for promotion, for training. And I am sure our ability to retain the nurses that we have on hand as well as to be able to recruit new trainees will be far greater than at present. So I urge Members to be a bit more patient.

With regard to Medisave, the Member for Changkat is very correct in stating that although the Medisave scheme is very commendable, unfortunately it probably would not be adequate for those account holders who have serious catastrophic and long-term illnesses. My Ministry has been looking into this catastrophic illness insurance scheme or CIIS for quite some time, in fact, since late 1985. It is a fairly complicated scheme with tremendous long-term implications. We want to be sure that whichever scheme we embark upon does not land us 20 - 30 years down the road where the US and the other developed countries have landed today. Their schemes also started on very good grounds, very good premises. Unfortunately today, if you look at their schemes, there is great unhappiness for everybody.

My Ministry has been working with the CPF Board on a scheme that will automatically cover all Medisave account holders. However, we will take into consideration the Member's suggestion that opting-out be allowed. In fact, that provision has already been built in to the present proposal. Also, the immediate dependents of account holders will be covered on a voluntary basis. This scheme will be designed as a very basic and low-cost scheme and will be underwritten and managed by the CPF Board. Those who require a more comprehensive coverage can purchase supplementary coverage from the private sector. I am sure the private insurance companies will be very happy to compete among themselves to get all this coverage. In fact, those who prefer to be fully covered by a private company's CIIS will be allowed to opt out so as to purchase coverage totally from the private companies. In fact, there are already a few companies that are offering CIIS and, as the Member mentioned, ICS already has a system in place. I think many other insurance companies also have similar proposal in place.

Sir, we are still looking into the details of the scheme as well as the long-term ramifications. When the full details are finalized by my Ministry and by the CPF Board, I would be very happy to make them available to this House.

Sir, with regard to deductibles, I agree with the Member for Changkat that it would be difficult not to allow deductibles from Medisave funds because Medisave account holders are already able to draw on their Medisave at the present moment for whatever disease-type it may be, so long as they are hospitalized. We will definitely check to see whether there has been any abuse or misuse of the Medisave scheme. Although I have told the House that my Ministry and the CPF Board have to date found no evidence of any abuse, misuse or overuse of Medisave funds, I must however qualify this statement a little bit, because it is only recently that the CPF Board and my Ministry have started to audit the Medisave claims. Even then only Medisave claims from Government hospitals have been audited. The tools that we have available at our disposal for analyzing such claims are also very basic and limited. To correct this administrative weakness, we will be sending a team of officers to several countries which have already had many years of experience in handling either national medical insurance claims or medical reimbursement claims. We hope to learn from their experience and to be able to implement our own monitoring and assessment systems in the near future. With such systems, I can have a higher level of confidence when pronouncing on whether or not there has been any abuse.

In the meantime, we will of course continue to advise Medisave account holders that they should use their Medisave funds carefully. They must never fall into the trap of believing that they or their family members will never fall seriously ill or be involved in a serious accident at any time. By using theirMedisave funds carefully and only when their medical conditions warrant it, they will have adequate Medisave reserves when they grow old. That is the time when their need for medical care will increase very dramatically and, in line with that, the funds required for such medical care.

Doctors also have an important role to play in safeguarding their patients' Medisave funds. Doctors are responsible for deciding on whether and for how long a patient should be hospitalized. They are also responsible for the number and type of tests to be carried out and on the need for a surgical procedure to be performed. A doctor will not be true to his profession and himself should he allow the easy availability of Medisave funds to influence him into causing his patient to spend more than is necessary. Sir, it is my belief that most doctors do take this responsibility seriously. We will continue to monitor and ensure that the long-term objectives of the Medisave scheme are safeguarded.

Sir, with regard to renewability, the thinking at the moment is that for those Medisave account holders who are already insured with the CIIS, renewability would be automatic. There should be no need for them to undertake annual medical check-ups. So as long as they are in the scheme, it would be automatically renewed. We have not decided yet on whether there should be differentials according to the age group. Most of the schemes offered by the private sector do take into account the age group of the policyholders, and for good reason because the older the patient is, the more likely he is to be hospitalized. Therefore there appears to be good grounds for a differential scale of premiums. But we have not decided on that. It is still under review.

As to whether premiums would be revised periodically, I think the answer to that must be yes. Costs go up. The insurance scheme is for the good of everybody. No one will be in a position to subsidize the systems. Therefore premiums must go up in line with the number of claims being made and in line with the costs. That is why it is important that there must be adequate safeguards to ensure that costs do not run away because of over-usage. In the case of private companies, yes, we will allow private companies to participate in terms of offering supplementary coverage.

The Chairman: Order. Moment of Interruption.

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

Mr Wong Kan Seng: Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Main and Development Estimates for the financial year 1988/89, and ask leave to sit again tomorrow.

Mr Deputy Speaker: So be it.