CONSTITUTIONAL AMENDMENTS TO SAFEGUARD FINANCIAL ASSETS AND THE INTEGRITY OF THE PUBLIC SERVICES (Motion)

[Mr Deputy Speaker in the Chair]

Order read for Resumption of Debate on Question [11th August, 1988],

"That this House supports the principles set out in the White Paper 'Constitutional Amendments to Safeguard Financial Assets and the Integrity of the Public Services' which was presented to Parliament as Paper Cmd. 10 of 1988 as the basis for preparing a Bill for an elected President.". - (Mr Lim Boon Heng).

Question again proposed.

Mr Ong Pang Boon (Telok Ayer): Mr Deputy Speaker, Sir, as early as April 1983 when the subject of an elected President with certain executive powers in a certain given situation was raised in discussion, I had grave reservations then. My views on the subject have not changed since.

Although in certain respects the proposal has now been refined and harsh edges polished, for example, the choice of the Presidential candidate has been widened and that the President is not to be an executive one, nevertheless the crucial substance remains the same. In fact, the intention of the proposal as contained in the White Paper has gone even much further than originally mooted, which was to protect the country's financial reserves from being raided by a profligate government elected to office. The reserved powers of the elected President now extend beyond financial reserves to cover all assets of the government and key public service appointments.

In the nature of power politics, another centre of power will emerge around the President, especially if the elected President has been a towering political leader for a long time. Ipso facto, the power and status of future Prime Ministers would correspondingly be reduced.

For a Prime Minister to carry out his government's policies effectively, he must have the power over key public service appointments. That was what the PAP did in 1959 when it appointed the late Encik Yusof Ishak (who later became the First President) to head a new Public Service Commission, and so also other key appointments as and when they fell vacant. He must also have the wherewithal to pay for the administration and implementation of government policies. In an economic recession (through no fault of the government) when money is most urgently needed to prop up the economy, the future Prime Minister, if he is without even the power to borrow, would have to go on bended knees. A strong President, given the wide ranging powers, would be able to secure compliance to his views without having to have the executive powers and take the rap for exercising it. On the other hand, an equally strong-willed Prime Minister will render the system very difficult to work. Constant friction and endless arguments, even if eventually resolved through a compromise, makes the process of policy-making and implementation time-consuming and inefficient. In practice, either one has to recognize and accept the other as the de facto power in charge. The question then arises: under a dominant PAP President, can a second- or third-generation Prime Minister ever come of age as to be able to govern independently without having to lean on the President's crutches?

One underlying assumption in the Government's argument so far appears to be that the elected President is a good guy and the Prime Minister may be a bad guy and, therefore, requires the President to keep a check on his or her actions. This may be so; but can we always ensure that the subsequent Presidents would be of equal calibre? If not, how would the stronger Prime Minister be restrained from raiding the reserves?

The proposal as contained in the White Paper, whichever way one looks at it, would ensure the election of a Presidential candidate from the PAP. Should by some freak election results (which the Government claimed to be possible), an Opposition government were elected to office, it would be logical for the PAP President to work to undermine and bring down the Opposition Prime Minister and his government, even if the Opposition wants to act responsibly.

In a Parliamentary democracy, peaceful transfer of power, whether intra-party or inter-party, is fundamental to the system, and must be seen to be so. Once this possibility appears closed, then violent revolutionary means would loom large. I do not think this is what we want.

The PAP was founded on the Parliamentary system of democracy without a President endowed with wide-ranging powers. We defended this form of democratic system of government against powerful enemies. The system has worked well so far with material progress unsurpassed by others in Southeast Asia. We have gone through seven Parliamentary elections and the voters have always voted wisely by returning the PAP to power. The present second-generation leaders, by the Prime Minister's account, have acquitted themselves well, have worked as a team, and the future Prime Minister-elect is well placed to take over the reins if the Prime Minister decides to step down. Neither have they exhibited any profligate tendency to raid the country's reserves, to spend on generous subsidies, or dispense largesse to bribe the electorate. So why is there the need for such a fundamental change to the political system of government in Singapore?

The best means of preventing an irresponsible government from coming to power is to take positive measures to persuade and convince the people that your policy and actions are in their best interests. At the same time, our shoulders should be broad enough to accept criticism and even admit mistakes if need be, and be prepared to make the necessary changes. This does not mean pandering to the baser instincts of the people. Tinkering with the Constitution and the established political system which have proved workable is not the best long-term solution.

After 30 years of political tutelage under the PAP rule, with universal education and the mass media on the Government's side, the electorate today cannot be less well-informed and responsible than in the 50's and 60's when, despite the poverty, widespread illiteracy and squalor, the people had consistently voted for the PAP in every election.

I am, therefore, not convinced of the need to amend the Constitution to provide for an elected President with certain duties and power as contained in the White Paper. The proposed changes are so fundamental in nature that I feel compelled to reiterate my reservation in this House.

11.10 am

Dr Tan Cheng Bock (Ayer Rajah): Mr Deputy Speaker, Sir, I rise to share some of the sentiments expressed by the Member for Telok Ayer.

Singaporeans were told of the idea of an elected President with powers over our reserves some three to four years ago. When the White Paper was presented to this House some two weeks ago, the elected President would have powers not only over our financial assets and reserves but also over key appointments in the civil service and the statutory boards. In other words, the powers of the President has widened considerably and this has resulted in questions being asked whether such a move is necessary. The general thrust of discussion among professionals and grassroots leaders is whether this would make a lame-duck Prime Minister. The initial reaction of some Singaporeans on the issue is clouded by personalities. They see Mr Lee Kuan Yew as the next President and Mr Goh Chok Tong as the next Prime Minister and ask, is not everything the same except in name? They accept the proposals at face value, trusting in Mr Lee Kuan Yew and Mr Goh Chok Tong. They fail to see beyond these personalities. If this combination will sustain forever, then indeed we have nothing to fear. But what if in future things change? We need to separate the issues at hand from the personalities involved. We need a system that will accommodate changes, players in the political scene will change and in years to come Singaporeans may find themselves embroiled in a constitutional crisis, the Prime Minister and the President disagreeing on the issue of various assets and on so many appointments.

Therefore, whatever system we want to introduce must be able to survive the change of personalities. I do not envisage this being put to a test for as long as the present leadership is in power, but they must look further down the road for eventualities that we cannot assume will not happen, like the electorate voting a non-PAP President to check on the PAP Government or vice-versa. It is important to be sure that future Singaporeans will not blame us for handing them a Constitution that blocks rather than checks the government. For example, in the White Paper at page 6, paragraph 28, when the President vetoes, what happens? There is no simple solution. The government of the day will have to spend much effort trying to get out of a Presidential veto rather than governing the State. Imagine when the President vetoes the appointments. Paragraph 26 says that the provisions for an elected President "will be similarly entrenched" with the provisions on Protection of the Sovereignty of the Republic. In other words, a two-thirds majority in Parliament and two-thirds of the votes in a national referendum. What is this Protection of the Sovereignty of the Republic? Let me refer you to page 3, paragraph 16. It reads:

'In 1972, the Constitution was again amended to protect the sovereignty of the Republic of Singapore. There shall be no surrender or transfer of the sovereignty of Singapore as an independent nation, or relinquishment of control over the Singapore Armed Forces or the Singapore Police Force, unless this has been supported at a national referendum by not less than two-thirds of the votes cast.'

I think that was a very, very serious issue and we should rightly entrench those requirements. The provision therefore on the protection of sovereignty, as I said, is rightly so protected by making it so very difficult to attain. Imagine this condition having to be applied to the many issues which the wide powers now being proposed for the President. It must mean that the Prime Minister will have to give in to the President all the time or else his government will fall, though he has the majority to govern. In effect, the Prime Minister will have to look at the President and ask, "Who do you want?" instead of arriving at the best decision with his Cabinet. Will this mean that a compromised candidate instead of the best candidate will result? And this will surely erode our system of meritocracy.

Para. 35 of the White Paper limits the choice of a President to a select group of Singaporeans with relevant experience. But as the candidates have to be approved by an impartial body, it does seem that the people have no free choice. First, who appoints this so-called impartial body? As they are appointed, can they be impartial? It is good that people are to be made aware of the qualifications and experience a potential President needs to have. I suggest that the potential Presidential candidates should then be made to declare their experience, qualifications, assets to the people directly and let the people decide. This will help Singaporeans develop their power of judgment and their sense of self-confidence as a voter.

Para. 36 deals with the removal of the President. I refer you to para. 36:

'He may not be removed before his term of office expires, except upon a resolution passed in Parliament with a majority vote of at least of the total number of Members of the House upon a finding by the Supreme Court that he is incapable of discharging his functions by reason of mental or physical infirmity or that the President has been guilty of intentional violation of the Constitution, treason, misconduct involving abuse of his powers of office and any offence under the law involving moral turpitude.'

In other words, the removal of the President will depend on the Supreme Court's finding of incompetence and a three-quarter vote in Parliament. For paragraph 36 to be invoked, who will have the authority to convene the Supreme Court to sit? Does this also mean that paras. 26 and 28, ie, two-thirds of the votes in Parliament plus two-thirds of the votes in a referendum, cannot be applied for the removal of the President if there is a Constitutional crisis in the middle of a Presidential term?

Imagine there is a disagreement over the use of $5 billion reserves. The Prime Minister, even having two-thirds majority in Parliament, may be refused by the President and has to go to the people for a referendum. He gets two-thirds of the votes in a referendum. Does this mean that (1) the Prime Minister can change the Constitution to do away with the Presidency or limit the powers of the President; or (2) remove the President and call for fresh Presidential election; or (3) the decision of the President and of Parliament and the referendum is binding on the President? As it stands, there is no provision for the decision of two-thirds of the votes in Parliament and two-thirds of the votes in a referendum to be binding on the President. Instead the Prime Minister would have to invoke para. 36, ie, the decision to remove the President will rest only on the Supreme Court and three-quarters' majority vote in Parliament. It will be well nigh impossible to remove the President under such circumstances. The whole exercise, as I see it, only reviews his Presidential powers but not his decision.

I shall now touch on financial assets and reserves. Para. 45 deals with the President's concurrence in the use of our financial assets and reserves. The definition of "assets" is indeed very wide and may in practice mean every cent and every square centimetre of Government land in Singapore. Singaporeans want to know if this means that every parcel of land sale must be approved by the President? Must the sale of HDB properties have his assent? Will the sale of every HDB unit or every block or every defined estate have his assent? What about resale? Does it mean that if Temasek Holdings wants to sell 100,000 SIA shares, the President's signature must be sought? And does this mean that if PSA wants to sell a vacant lot of land or a tugboat the President has to concur? These seem to be absurd questions but such a situation may arise to paralyse the Government unless the definition of "financial assets and reserves" is properly thought out.

In the White Paper, the Presidential jurisdiction covers assets defined as assets which the government itself has not accumulated. In a democracy such as Singapore, there are possibilities of change in government, not probable in the foreseeable future but certainly possible down the road. After successive government changes, how will the assets be defined as those accumulated by each government? There will be disputes. It will be an accountant's nightmare.

I come to appointments. The number of key appointments requiring concurrence is so extensive that it reaches every facet of government. If the Prime Minister and President disagree on even one appointment, say, the Chairman of the PUB, we may face a Constitutional crisis or otherwise a paralysis of that department if the Prime Minister does not take the issue to the people. Is it right to so encumber the Cabinet? Singapore's competitiveness and advancement depend so much on our being able to respond quickly to external changes. Will this mean that our ability to respond quickly be diminished?

Mr Deputy Speaker, Sir, I am not able to cover in this short time all the misgivings of the people. Some members of my Feedback Unit have already expressed some of the views on the Vice-President and on many other matters. But I have prepared a report for the First Deputy Prime Minister and since he is not here I will give it to him later. I suggest that he go through this report very thoroughly.

But for the moment the people need to ask themselves a few questions. Do we want an elected President to check the Prime Minister? What extent of our reserves need to be protected? What are the key appointments that are so critical as to require concurrence? We need a system that will assure the people of a better government, not paralysis of our political system. I propose that this House give the people and its Members the opportunity and time to examine all consequences and alternatives. The issues should be thoroughly aired, including a Select Committee, and also a referendum held so that Singaporeans know that they themselves are responsible for their own destiny.

11.25 am

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Deputy Speaker, Sir, I rise to support the motion proposed by the Member for Braddell Heights.

Although Members who have spoken this morning have expressed reservations about the proposal set out in the White Paper, my general impression is that, of the Members who have spoken so far, most have supported the need to introduce additional Constitutional safeguards to protect the reserves and savings of the country and the integrity of the civil service. Where contrary opinions have been expressed, these have generally been confined to questions on alternatives to an elected President and on the need for the President to be involved in as much detail as might seen to be required under paragraph 45 of the White Paper.

I do not propose to enter into a debate on the merits or demerits of the alternatives proposed although my personal view is that the most efficient way to achieve our objectives would be via an elected President, one of the considerations being that it places the least call on our limited resources of qualified people. I will also not touch on the general question on what powers should be vested in the elected President and details on the areas which require Presidential assent, as I am sure that the views which have been expressed by Members will be taken into consideration in the drafting of the final legislation. I am also confident that a modus operandi can be worked out whereby the responsibilities of the President and the Prime Minister do not conflict. Even now under existing legislation Presidential assent is required for a range of matters, including a matter as mundane as a need for Presidential approval to alter the list of foreign countries in which the Monetary Authority of Singapore's external assets can be held.

Instead I will confine myself to an explanation of the financial and other safeguards needed to preserve the accumulated savings of Singapore. I think it might also be helpful to Members of this House and to the public at large if I give some background on the nature of our savings and assets which need to be protected, the institutions which manage these reserves and savings and the key people who run these institutions. I will also in the process give my views on why I think Constitutional changes are needed to protect our reserves and why an elected President is the most efficient way of achieving this objective.

Under the unicameral parliamentary system which we now have in Singapore any elected government of the day with an effective command of 51% or more of the votes in Parliament will have unrestricted powers to spend the State's funds and to sell the country's assets. It also has unlimited powers to borrow and to enter into contractual obligations which will commit future generations of Singaporeans. There is no separate Constitutional institution available to check the powers of the Executive and Parliament, such as is available in the Upper Houses in Malaysia, Australia, the United Kingdom, the Congress in the United States, the elected President of France and so forth.

Members have expressed concern that the change from our present parliamentary system will lead to endless conflicts between the Prime Minister and the President leading to paralysis of government and dictatorial imposition of his will by the President under this proposed change to our Constitution. I would suggest, Mr Deputy Speaker, Sir, that this is precisely the situation faced by many existing governments who have two Houses where they have the President together with the Prime Minister and they have learned to live with it and a form of accommodation exists. So it is not something which is totally unique or unparalleled in this world. There are many precedents existing in forms of legislature where of checks and balances are introduced which indeed may well slow down the passage of legislation. But it provides the necessary checks and balances.

Perhaps we have, as a result of many years of peaceful PAP rule, become so used to a system of government whereby a responsible Government has been able to manage without the necessary checks and balances. But can we be certain that this will continue forever into the future? I think this merits serious consideration. Because of the large size of our country's savings and assets which have been accumulated, future governments may be seriously tempted to tap part or all of these resources in the face of popular pressure. The risk of this happening will be greatly increased if the government of the day has only a tenuous majority. Although it would appear that there is little risk of this happening in the near future, it can be argued that this is precisely the best time to introduce the necessary safeguards as it can be done in an environment free of immediate pressures.

At this time I would like to digress by describing the scope of the savings and reserves we are seeking to protect. Singapore's public sector savings consist of three components:

(1) Public savings held in the CPF Board. This consists essentially of CPF balances not paid out to retiring members who have reached 55 years or otherwise withdrawn for the purpose of purchase of housing and other approved investments. Current CPF balances are around S$31 billion.

(2) The Government's own reserves or savings consisting of the accumulated Budget surpluses of past years and the earnings from investment of these surpluses in assets in Singapore or overseas.

(3) The surpluses and assets of statutory boards and government-owned companies. Because of prudent management, all three components of the public sector savings have grown substantially over the years. As a result, Singapore's liquid assets per capita are amongst the highest in the world, exceeded only by the richest industrial nations and a few oil-rich countries.

I would also like to clear up some common misconceptions over what we mean by Singapore's savings and reserves. The $31 billion in CPF funds is often spoken of as if it were the totality of Singapore's public assets. This is not so, as the assets of the Government, statutory boards and government-owned companies are entities separate from the CPF balances. Singapore's officially published foreign reserves of around $31 billion are also often mistakenly thought to represent Singapore's total external assets. Since the two figures are so coincidentally similar, they are often thought to be the same. This has led to the confused belief that either the Government or the CPF has no funds. I should point out that money is fungible. The CPF's assets are invested in the form of loans to other Government institutions and in Government bonds. These bonds are backed by the Government's assets in Singapore and overseas.

Although the size of Singapore's savings and reserves I have described would appear to be large, the need to preserve these assets must be seen in the context of Singapore's complete lack of natural resources and its very limited land resource. We have nothing to fall back on in the event of a severe and prolonged world recession. We cannot grow our own food or find our own oil. We cannot even collect enough water for our own needs. Practically everything has to be imported and paid for. Our financial reserves are our safety net and should therefore only be drawn down to tide us over periods of severe economic downturn. In addition, the Government's large holdings of external assets underpin the stability of the Singapore dollar and lends credibility to Singapore's status as a financial centre. The Government's healthy balance sheet also provides foreign investors with the assurance that the value of their investments will be preserved. Citizens of Singapore will also be reassured that their savings will not be debased in the future.

Mr Deputy Speaker, Sir, I believe there is no general disagreement by Members over the need to introduce constitutional safeguards to protect Singapore's savings, although there is some difference of opinion on how it should be done. My belief is that an elected President with clearly defined powers provides the most effective route. These powers need not be large nor extensive but should include Presidential assent for the following:

Budget proposals to draw down on reserves and to borrow externally and appointments of the Chief Executive and members of the Board of key public sector financial institutions which have responsibility for the management of public sector funds.

This combination of powers is needed for two reasons - to exercise control over the use of reserves and borrowing powers directly through the Budget process and to ensure that the right people are placed in charge of the key public sector financial institutions. I believe that Presidential assent for appointments to key positions is necessary because the management of large sums of foreign assets is a complex process, and control over these assets by incompetent individuals or persons of doubtful integrity could easily lead to loss of assets before there is even a chance to spend it.

The key public sector financial institutions involved are, firstly, the Government Investment Corporation (GIC) which is responsible for the management of Singapore's longer term external assets. It is overseen by a Board of 10. The Prime Minister is the Chairman, and the Board includes four other Cabinet Ministers, the Deputy Chairman and Managing Director of the Monetary Authority of Singapore and three members from the private sector.

Secondly, the Monetary Authority of Singapore (MAS) which is responsible for the management of Singapore's cash and short-term external assets. It is also responsible for the supervision of all financial institutions in Singapore. It has a seven-member Board chaired by the Minister for Finance.

Thirdly, the Board of Commissioners of Currency (BCCS) which is responsible for the issue and printing of Singapore currency notes and coins. Under the Currency Board system every dollar of Singapore currency or notes issued must be backed by one dollar or more of gold or convertible foreign currencies. BCCS is supervised by a six-man Board which includes four private sector bankers and is chaired by the Minister for Finance.

The CPF Board which is supervised by a Chairman and 10 Board members. It is responsible for the administration of the CPF system, housing loans and other investment schemes. Its balances are invested in Singapore government bonds.

Government-owned companies. Government also owns substantial assets in fully or partly-owned companies. These are held through three holding companies, namely, Temasek Holdings, Sheng-Li Holdings and MND Holdings. These holding companies are chaired by the Permanent Secretaries in the Ministry of Finance, respectively responsible for Revenue, Budget and Public Services.

Finally, Mr Deputy Speaker, Sir, I have no hesitation in supporting the need for the constitutional changes to create an elected President with the necessary powers to oversee the nation's savings and assets and to safeguard the country's key institutions. With such a President in place, citizens of Singapore will assuredly sleep more peacefully and future generations of Singaporeans would not be born to find that their government has hung a huge financial millstone over their necks.

Mr Chiam See Tong: Mr Deputy Speaker, Sir, I am glad that the Minister for Finance has given many answers which I am sure members of the public and Members of this House here would certainly like to know. But I hope the Minister can still tell us how and in what manner some of the investments are made. I think we were given a rundown or an insight into some of the financial assets and savings of Singapore.

Sir, after having heard the Finance Minister speak for the need to safeguard our financial assets and savings, I think we all agree with him. There is no doubt about that. I think they are all our hard-earned money and we have got very good reasons to preserve our savings. They are not only our safety net but also our life-blood because we do not have natural resources and we have nothing to fall back on in case of a crisis. I think the issue before the House then is a balance between what steps we should take to safeguard our financial assets and, on the other hand, also to safeguard our parliamentary system.

I think uppermost in the minds of the public and professionals who were recently interviewed by the paper, without exception, everyone said that there was a need for a referendum. I think the fear expressed is that if we have these far-reaching amendments to our Constitution, we might end up in a situation where power is vested in one person and we would lose the system that we have tried so hard to preserve. In fact, there is also a danger if we go too far with the amendments by handing over too much power to one man because we might in the end defeat the very purpose for which the amendments were intended for, and that is, the preservation of financial assets and our savings.

Now, as we can see, we are going to hand over executive powers to the President. Although the White Paper says that the President is only a custodian, in reality we are handing over executive powers to the President because the President can block, in fact, you can even use the word "veto", the spending of our national financial assets. Also the President is given another very important portfolio, and that is, the selection of Judges and civil servants. I think that power is a very important power. In fact, before this White Paper was introduced, I have heard friends say that there might be an amendment to give the President powers to select Cabinet members. But it is not so. If the President has the power to select Judges, members of the PSC and public servants, then, as one Member has said, they may be beholden to him. If they hold key positions, I think the President will have an influence on them. It is possible that a future President may abuse his power and influence them.

The other thing is that we have noted that even under our political system, many Ministers and key Government politicians have been selected from the civil service. So in that sense, the President will have an influence on the selection of politicians and key Cabinet members. And if the President gets his own men into Cabinet, of course, they will do what he wants them to do. And if it so happens that, by chance, we elect a bad President, then of course he will try to influence the Cabinet members to hand still more powers to him.

It has already been mentioned in this House that the list of the President's concurrence for the selection of important persons could be extended. Similarly, the powers handed to him can also be enlarged. In that sense, if the President accumulates more powers than the original amendments intended to, then he may become even more powerful than the Prime Minister. As the Member for Chong Boon has stated, he might even say that he has the moral authority because he has also been elected by the electorate. So if that day comes, if we do get a bad President, there is a danger of him squandering our financial assets. I think this is the real danger.

Members may laugh but they have mentioned in the House of future governments squandering the assets. And there is this possible scenario of getting a bad President by chance and he may, in fact, defeat the purpose for which we have been asked to amend the Constitution.

Sir, we have been told by the PAP old guard leaders that they have assembled the best team possible. The ground has been combed during the last 12 years to select the best men possible to take over the Government. It is now clear to everybody that this is not the case. They are not to be trusted completely and that there is a need to have an elected President to look over their shoulders in regard to two areas - spending of the financial reserves and appointment of certain key public servants. This system is akin to a pilot after having spent many hours learning to fly a plane, he is not allowed to fly solo. He is always required to have a co-pilot, sitting either beside him or behind him. In time to come, the co-pilot becomes his crutch so that if he were given a chance to fly solo, he might not have the full confidence to do so.

Paternalism, Sir, in Singapore can be carried too far. The people of our nation must be allowed to mature and look after themselves and their own affairs. They cannot be forever treated like children. The government elected by the people should be given a free hand to govern the nation. The people trust their Members of Parliament whom they have voted in. Why is there a necessity to go for another election, to elect another person to check on their elected representatives in Parliament?

Yesterday the Member for Kebun Baru said that there was a need in the case of CCCs and organizations and companies to have two persons to sign a cheque. I think that analogy cannot be used to compare the protection of the financial assets of a company or CCC with those of a nation. Of course, we do not trust any single person to deal with money. I think that is not a wise thing to do. That is the reason why there is always a Chairman or another executive to countersign the cheque. I think that is natural. But in the case of a government, I do not think the Cabinet depends on the Prime Minister or any one person to make a decision. There is always a collective decision. So there is that safety there. It is not always that one single person will have to make any decision in regard to money matters. The Prime Minister must consult his Cabinet on any important decision he wants to make. So that is the difference. Cabinet now comprises, I believe, 15 persons or thereabouts. So there are always 15 wise persons to make the decision and not any one single person.

Sir, the motion before the House, as we look at it, to my mind does not convey the real purpose for which the proposed amendments are to be made. The real thrust of the amendments is not really to protect our financial assets but, in effect, to appoint an elected President. There must be two-thirds majority votes in Parliament in any event to have an elected President. Of course, it is important to protect our financial assets.

To my mind, the protection of the assets and appointment of our civil servants are more procedural matters. I do not think it is wise to change our political system. Of course, we have to make provisions to safeguard our financial assets.

Mr S. Chandra Das (Chong Boon): How?

Mr Chiam See Tong: This money belongs to the people. And, of course, we have to protect the integrity of our public service. We do not want it to decay and degenerate and have nepotism and corruption. I think they are important. But if we go along and amend the Constitution to such an extent that we change our political system, then I think we are going too far. Not long ago last year in May/June, 22 of our professionals were arrested and detained. Amongst other things, they were accused of wanting to change our political system. I do not know in what way the Government has accused them of wanting to change our political system. But we are to be asked to change our political system. I think that is why there are so many professionals who are really concerned with the amendments. It is not just to protect the national assets alone or to protect the integrity of the public service.

In fact, our present system is the Westminster parliamentary system. And the President has only a ceremonial role. His term of office is four years. When we have an elected President, he no longer acts on a ceremonial basis but he will have executive powers, veto powers. And his term is not four years but it is extended to six years. So if he is elected for two terms, it will be 12 years and that is a long time.

The White Paper says that the President is just a watchdog of our financial assets. But I tend to disagree. If the President can block the spending of the financial assets, how can it be said that he is just a watchdog? In fact, if anyone could prevent the Cabinet from acting in any way, he would be exercising certain executive powers. You can even say that the President on certain occasions would be exercising executive powers jointly with the Cabinet.

Sir, if the President has executive powers, then Parliament is no longer supreme. Parliament will no longer have a completely free hand to act as it likes. For now at least, the proposal is in the areas of spending of the financial assets and appointment of key public servants. If Parliament is no longer supreme, it cannot be said to be truly representative of the people because it cannot completely exercise the will of the people whom it represents.

It may be argued that the President is also elected by the people. But then there is a difference. The two types of elections are different. One is where the candidacy for the Presidency is limited. Only certain people can offer themselves for election as President. That, is, in a sense, not a true representative of the people because the choice of candidacy is not open. But in the case of parliamentary elections, almost every Singaporean above the age of 21 and who is not disqualified under the provisions of the Constitution can stand for election. Therefore, it can be said that Members of Parliament here are true representatives of the people. So although the President is elected, he is not the real representative of the people because the selection is limited. There will be three or five persons appointed to assess a candidate.

The White Paper is silent on one point, ie, the choice of candidates. What happens if this committee of three or five persons refuse to approve even one one single candidate got? What remedy has that candidate got? What can he do? It is not stated whether he could go to court or to appeal to any Minister.

Again, it is interesting if there is an election for a President. The candidates are so limited. A candidate must have at least three years of some kind of executive experience and he must be either a Minister, Chief Justice, Judge, Auditor-General, Attorney-General or Chief Executive of a statutory board or publicly listed companies.

The other thing is whether or not this candidate can still be a member of a political party. If there is a contest between a candidate from a political party and any of these officers who are non-political, who do you think will win? These people or officers wanting to stand for election do not have the machinery behind them. They have got an uphill task. So right from the start they already are of a disadvantage. They are not used to electioneering. They do not know how to go about campaigning. Whereas a candidate from a political party would have all the machinery behind him. It is most likely that his chances are certainly be better than those which I have just named. So it would appear that under this system the President will always come from the ruling party.

I think the candidacy of the President should not be limited. It should be open. If there is going to be any limitation, the only limitation could be his age. Maybe he should be a person who is more mature, say 35 years and above, because by then he should have experience. From his maturity people will know whether or not he would make a good President. After all, it is the people who are making their choice. I think we should trust the people to exercise their wisdom in choosing a President. So perhaps the Minister in charge of this matter could enlighten us whether or not the President, after he has been elected, could still remain a member of a political party. I would imagine he should not because there will be a conflict of interest. But this White Paper is silent and has made no mention about it.

Sir, what the proposed Bill wants this House to do is to hand over power to the President.

Mr S. Chandra Das (Chong Boon): What Bill are you talking about?

Mr Chiam See Tong: The Bill that is to come. You surely should know. The Bill to hand over political power to the President. That is essentially what we are asked to do.

Sir, many people are concerned because we are handing power to a single person, and the manner in which the handing of power as spelt out in the White Paper seems rather easy. In order to have an elected President, we require only a two-thirds majority to amend the Constitution, and he will have to stand for election. But since the member of candidates is so limited, it will probably be a candidate from the ruling party who will be elected. In fact, the post of President will be perpetuated in the sense that the candidacy of the Presidency will always come from the ruling party because the choice is so limited because of the manner in which the elections are to be carried out.

Sir, it is so easy for the President to get important power in regard to finance, appointment of key positions, and more powers will be given to him in the sense that he can refuse to give assent a Bill in respect of those Bills which would take away his powers, in regard to his concurrence to spending of the financial assets of the country and appointment of key public servants. And also, all Bills which he thinks are important are placed before him for his vetting; and he can also get information from the other government departments. So it is not really an automatic assenting of Bills as the President is at the moment when he is advised to do so by the Prime Minister. The fact that he can vet Bills shows that he will put his influence to bear on Parliament. Also, he can come to address Parliament. So his role appears to be very, very wide. In fact, by the powers that are to be given to him, the President will have political influence in Parliament. So there is a possibility that one day, in the future, as I say, if we get a bad President, he may just abuse his powers and enlarge his powers because his influence probably on a weak Cabinet or a weak Parliament will be translated into giving him further powers.

Sir, in this sense, this is the danger. Although we are trying to prevent a so-called irresponsible government from squandering our assets, we may be putting in something which in the future is more dangerous for our country because the essence of democracy is really checks and balances. I think that is the reason why the founders of the American nation, the early fathers of the nation, who drafted the Constitution, made sure that power does not repose in one single person or in one single group of people. There is a separation of powers and we all know that. Also, if you look at Japan, they make sure that their Prime Ministers are rotated regularly and no one Prime Minister holds office for too long. This is also seen in Germany. We know Mr Helmut Schmidt was a very capable man. He could continue to perform his duties because he is still young and strong. But the German people said, "Look, you have had your chance. Let Mr Kohl take over."

Mr Chandra Das: He lost the election.

Mr Chiam See Tong: That is the way they go about changing their Prime Minister. I think in Germany they have got the bitter experience of giving too much power to one person. I think this is the whole danger of our amendments. We cannot give power to one single person whereby eventually he will become so powerful that he will eventually usurp the functions of Parliament. We may all one day be reduced just to Town Councillors, doing municipal jobs, and the President will be the sole person who will take charge of the affairs of the nation. The future Prime Minister might be just the Mayor of Singapore, in charge of municipal matters. This scenario is certainly in the minds of other people because I have heard people speaking to this effect.

What we actually should do is to increase more democracy and freedom in our country if we hope one day to reach the standards of Switzerland. We need to have a vibrant and dynamic society so that we can take off and become truly prosperous instead of stagnating as an authoritarian, paternalistic, elitist type of government. If we go along with this provision for the election of a President with the powers to be given to him, we will stagnate, although the intentions appear to be good. The way we are nibbling away at our Constitution is not a good thing. The Constitution must be distinguished from the other pieces of legislation we have. It should be treated close to being sacrosanct. There must be some kind of permanence in our Constitution to give us the direction in which our nation will take.

If you look at the American Constitution (I am not saying that we should follow the Americans, but if you look at the American Constitution), it has lasted 200 years. In fact, it is the cornerstone of the American nation, its prosperity, its power, its greatness. But in the last four years we have seen there were three major amendments to our Constitution. First, we have the non-constituency Member of Parliament, trying in fact to erode democracy by trying to put Members who are not true representatives of the people. So the people of Singapore rejected the NCMPs. Then we have the GRCs (Group Representation Constituen- cies). In that amendment to our Constitution, we have really entrenched divisive matters in our society. We have highlighted race. We have highlighted the communities. Our aim should be to build a Singaporean Singapore. We should aim for one people rather than a division of our people. So that is, I believe, a step forward. Now we are going to be asked to amend the Constitution to have an elected President. Of the three, this one is the most serious because we are going to take away our present system of Parliamentary democracy. The Government may not agree. The Government has said our Parliamentary system still continues. But I do not agree, and I think many people do not agree. Can the Government say that Parliament is still supreme? If the answer is no, then we have eroded our Parliamentary system.

As the last Member who had just spoken said, we need to refer it to a Select Committee. I agree that we have to air this whole matter fully. Not only should we refer it to a Select Committee but also a referendum. This referendum must not be based on a simple 51% majority. If the people of Singapore wants an elected President, then they must give two-thirds of their votes. I think this is reasonable because to remove the President we require a two-thirds majority. So there must be reciprocity. So if you want to have an elected President, we must also have two-thirds of the people's vote at a referendum. It is important that the amendments to the Constitution must not come before the next general elections. The general elections should come first and the elected President should be made an issue at the elections. But the Member for Kebun Baru ---

Mr Chandra Das: We do not need a referendum.

Mr Chiam See Tong: --- and now I hear the Member for Chong Boon saying that we do not need a referendum. The Member for Kebun Baru has said that if the elected President is made an issue, then we would be killing two birds with one stone. We are not. At a general elections the people go to elect ---

Mr Lim Boon Heng (Kebun Baru): Point of clarification.

Mr Deputy Speaker: Mr Chiam, will you allow Mr Lim to clarify?

Mr Chiam See Tong resumed his seat.

Mr Lim Boon Heng: I do not recall having said what the Member for Potong Pasir accuses me of saying.

Mr Chiam See Tong: Then it must be his seconder. Anyway, one of them said so. If it is not the Member for Kebun Baru, then it must be his seconder.

Sir, at a general election people go to elect their representatives in Parliament. They do not go to elect an elected President. So at a general election, there is a specific purpose of returning a new government. But in the case of a referendum the question is put before them whether or not they want an elected President in Singapore. I think that is very important and that question must be put to the people. If there is no referendum, there is a possibility that in our first Presidential election there may be only one candidate. I do not think any of the Judges, Accountant-General or Auditor-General, or any of the business people in town would want to stand as a candidate. So we might have only one candidate and he will be returned unopposed. If that happens, we still do not know whether the people of Singapore want an elected President. That is the reason why it is necessary to have a referendum.

The First Deputy Prime Minister and Minister for Defence (Mr Goh Chok Tong): You can stand.

Mr S. Chandra Das: Not qualified.

Mr Chiam See Tong: Now that the First Deputy Prime Minister has said that I can stand, under the stringent rules, I do not think even Mr Ronald Reagan, if he were here, will qualify. As far as I know, before he was elected to be the Governor of California, he was an actor and a radio broadcaster. I think there can be a comparison between the election of a President in Singapore with that of a Governor of a State in the United States, because many of the States in the United States have got budgets bigger than ours, and they have got a far bigger land area and a bigger population. I think election to the post of Governor is almost equal to or, if not, as important as that of election of a President of Singapore. Mr Ronald Reagan was elected, first, as a Governor and then later on stood for election to become the President of the United States. He was elected not once, but twice.

The point is that the intended amendments to the Constitution try to limit the candidates and in that way it might, in fact, exclude many good eligible candidates who, if they were not elected, could be a detriment to the nation.

Dr Toh Chin Chye (Rochore): Mr Deputy Speaker, Sir, I do not wish to cover ground that has already been laid by Members yesterday and this morning. I would like to bring to the attention of Members para. 28 of the White Paper. It states that if the President does not concur with the government on the use of reserves or assets, then the government in the event that it does not have a two-thirds majority will have to resign and make it an election issue. But at the same time it does not state what would happen if Parliament, not the government, by a two-thirds majority, passes the Finance Bill? Will the President then yield to Parliament? It is not stated clearly in para. 28. Here it stipulates it is the government that must have the two-thirds majority to change the Constitution. But according to our practice, Parliament in order to change the Constitution will have to have a majority of two-thirds.

Assuming that an impasse takes place, there are three steps for the government to take. First, it must resign. Then it must win the elections and come back to Parliament with a two-thirds majority. Then having got the two-thirds majority, it proceeds to amend the Constitution to modify or remove the powers of the President and then subject that revised Constitution to a referendum. These are three steps that have to be taken. Logically then, if we are going to have this procedure of modifying the President's powers, it would appear that before we give the President such powers a referendum should be held. It should not be made an election issue. In a general election, there are multifarious issues that crop up. Speeches are made by candidates unrelated to the central point of whether or not we need an elected President, and if we do need an elected President, what should be his powers.

I would like to remind Members that from our own experience a referendum can produce results quite different from the results of a general election. In 1962, in a referendum on merger with Malaysia, we secured 71% of votes approving merger. One year later, in 1963, in the general elections, the PAP obtained only 46% of votes. I do not think that this Parliament is in a position to make a radical change to Singapore's Constitution or to commit future governments to a line which will hamstring that policy. And nowhere in the White Paper has it been clearly spelt out: what is the line of authority of the President to Permanent Secretaries, Chairmen of statutory bodies, to heads of financial institutions? There is a division. To whom will these civil servants be responsible? To the Prime Minister or the President? There will bound to be a conflict of views between the Prime Minister and the President.

Not all of us are going to be here in the next Parliament. At least 20 of us are going to leave but we feel that it is our duty not to bind future generations of Singapore to something which is obscurum, not clearly defined, subject to multifarious interpretations. The White Paper is inexact and its inexactitude will lead to different legal interpretations.

If there should be a referendum, it should not be on the White Paper as such. It is too complicated a paper for the layman to understand. The multifarious facets of this White Paper cannot be presented on a simple piece of referendum issue - vote "Yes" or "No". On the other hand, the White Paper should be broken down into separate parts and debated in Parliament. The terms of the referendum will have to be debated in Parliament before a referendum is carried out.

Much has been said by Members yesterday and this morning on the powers of the President. I am in sympathy with the Government in finding a President. Having been a member of the Cabinet before, I know it is quite difficult for us to find someone who can be nominated as Presi- dent of Singapore and who can present an image of the people of Singapore that is non-partisan, above party politics, and Singapore does need a man. Because we are too small we need to have a person who is not divisive, a person who can integrate different communities, different people with different political views. We do not have a King. We are not exactly copying the American style of presidency. The American President has executive powers. The American Vice-President has executive powers. He is a member of the Cabinet. The President appoints his own Cabinet. But there is a check and balance. The check and balance is through the two Houses - the Upper House, the Senate, and the Lower House, the House of Representatives.

As it stands in this White Paper, there is no check and balance. I think it is unwise indeed to suggest that a Vice-President can be a Member of Parliament or be a Minister. In effect, the Vice-President is extending the President's presence in Parliament, and if he were a Minister the Vice-President is extending the President's presence in the Cabinet. So the invisible hand of the President can be seen in Parliament and in Cabinet. I do not feel it dignified if an opposition Member were to attack a Member of Parliament who is also the Vice-President because he will feel that he is attacking the Presidency. I think the Presidency is such a serious affair that more weight and more thought should be given to this problem of how do we go about appointing a President who is above political party interests and who can represent to the Singapore people and to the world that he is a figure that is not caught in politicking.

The important reason given for this elected President is that he will be able to control our reserves. My understanding of reserves is that if a company, Singapore incorporated, makes profits and these profits are not distributed as dividends, what is left over goes into reserves. Does this mean, let us say, the government of 1989 cannot spend the reserves of the government of 1984? And does it also follow that subsequently the government of 1994 cannot spend the reserves collected by the government of 1989? It is so inexact that it leaves us questioning whether this White Paper has been thoroughly gone into from its practical aspects. The most important part is missing. Obviously, to get the Financial Bill through, the President has got to give his assent.

May I remind Members that it was the experience of the Labour Government in Australia - Gough Whitlam was then Prime Minister - what was fixed by the Governor-General, John Kerr, because the Governor-General refused to give his assent to the Financial Bill. The Labour Party had to go back to the people to seek a fresh mandate and it lost the elections. It lost. This is a precedent which the Australians have faced. Likewise down here, para. 28 also provides that if the Government is going to change the Constitution in order to modify the powers of the President, he must go and seek a mandate from the people twice (not once, but twice) - first,in a general election and win a two-thirds majority, come back to this House, change the Constitution, and then take the amendment back to the people in a referendum.

It is a very complex and messy piece of legislation if this ever becomes law either in the Constitution or by a separate enacting Bill. I would suggest indeed that this suggestion deserves our full attention. We should not hurry. We should not bulldoze this because we are committing future generations of Singapore to a scheme which may not be workable. I do not know how many Ministers have a great yen to be the President in future. They may not. They may want to leave the Istana and have a ---

An hon. Member: An escapade.

Dr Toh Chin Chye: --- And meet their friends. I do not know. How do we go about it? Supposing we have an impasse. We cannot find anyone who is willing to take on the job of the President. It is a lonely job, yes. I have no ambitions to be called "His Excellency". I feel that we are committing future generations to a plan which is very difficult to put into practice.

How do we go about it? The details will have to be spelt out before we can fully understand the implications. An elected President is a good idea if we can make it quite clear or if we agree what his powers should be and the line of authority. There should not be any conflict between the civil service and the President, and the civil service and the Prime Minister. This is a major point which I would like to bring up, and since other Members have very usefully brought up their own ideas and views, I do not wish to enlarge upon what they already have said.

The Minister for Trade and Industry and Second Minister for Defence (BG Lee Hsien Loong): Mr Deputy Speaker, Sir, I would like to respond briefly to some of the points made by the Member for Rochore and the Member for Potong Pasir.

The Member for Rochore raised several valid points - these are major changes to the Constitution and therefore must be fully debated; we must have a complete commitment of the population; and he proposes a referendum. Maybe. I would not rule out making this the key election issue in the next general election if, indeed, it becomes controversial. It would be unnatural for us to say, "Let's put the elected President aside. Elect a new government. And when the new government is safely in place, we will raise the subject again." The proposal must be formally entrenched. Also, there are significant details which must be worked out - how do you know what are the reserves, who can spend them, how do you know when you are touching them? In fact, what is this year's money? What is last year's money, what is this Government's money, what is last Government's money? It is not so easy to define. A government bent on bending the rules will find it very easy to fudge the definition and touch a lot of funds without ever having to pass a Supply Bill in the House.

The Member for Rochore said that Mr John Kerr (in his words) "fixed" Gough Whitlam when he refused to pass the Supply Bill, called an election, and Gough Whitlam therefore lost the election and was out. I take it that the Member for Rochore considers this a miscarriage of justice. But I put it to you, perhaps that is democracy at work. Isn't it right that when the Prime Minister wanted to do something which the Governor judged did not have the support of the population, the Governor forced the Prime Minister to go to the country and get a mandate? The fact that the Prime Minister of Australia did not get the mandate showed that he did not have the support of the population to do what hewanted to do. So it is just as well to have safeguards, isn't it?

Now, for the Member for Potong Pasir. It is a great joy to listen to him because every 45 minutes or so he hit the nail squarely on the head, for the rest of the time he hit his thumb squarely on the nail. He hit the nail squarely on the head when he said that the essence of democracy is checks and balances. In other words, how to distribute power and provide a self-checking system which makes sure that when you need to move, you can move; when you need deliberation, balance, consensus, there is some way to prevent one madcap from running away with the system. That is what an elected President is about - providing a check and balance to the power of the Cabinet.

The key point of the elected President proposal is this. We have built up billions of dollars of reserves, in fact, tens of billions of dollars of reserves. Some foreign exchange, some assets within Singapore; others in gold, treasury bills; others; goodwill, even the fixed capital of your statutory boards. How do we prevent somebody from raiding this company, which is Singapore? In America when a company is cash-rich, people buy up the shares and then strip the company of its assets. How do we prevent a government from doing that to Singapore?

Some years ago the Member for Potong Pasir made great play of the possibility that the Government might not be able to pay CPF depositors their money back when they retire, that CPF has no money and cannot pay. He has not said that recently. But what is the way which would lead to CPF being unable to pay? It is the Government taking the money, which is really CPF depositors' money, and spending it quietly, without telling you. It is your cash. CPF assets are $30 billion. They are matched against CPF liabilities, namely, your deposits. $30 billion is kept with the Finance Ministry. Finance Ministry buys Singapore government bonds. The pro- ceeds are invested overseas, prudently. If somebody touches that money downstream, when you reach the age of 55 go to CPF Board in Robinson Road, and try to withdraw your savings, what do you think will happen? They would not turn you away because this is not a private bank. They will give you money. What money? Paper money. What can it buy? Can you convert it, 2:1, into US dollars and go on holiday to Los Angeles? If you go to the bank, they say, "No, no. This is non-convertible money. Do you want US dollars? If so, on the sly, I offer you black market, maybe 15:1." Because the Singapore dollar will be devalued; the paper will not be able to buy anything. So the simple question is: do we want to take some precautions to make sure that CPF can pay? If so, an elected President is one good way to do it.

The Member for Potong Pasir said later that "with an elected President this Government will never have a chance to fly solo. With all these years of training, co-pilots never have a chance to fly solo." He pays us a great compliment because he assumes that we are going to win the next election and the ones after that. We make no such complacent assumption. We fight to win elections, but we do not assume we will always win. For that matter, we do not assume that the winning government will always be a capable, honourable one.

I know Mr Chiam has said in Parliament that he has no aspirations of becoming a Prime Minister. Mr Jeyaretnam has said no such thing. The Workers' Party has said they wanted to field large numbers of candidates in the next General Elections, so that they could credibly present themselves as an alternative team. Now, supposing they win by some freak, maybe in coalition with the Member for Potong Pasir, who will be re-elected. Will that government be trustable with all the money which has been accumulated over 30 years? Does he have thousands of hours of flying time and can go solo? I would not get on to that aeroplane if he were flying solo. But we are already on the aeroplane. We cannot get off. So we had better make the requirement that before anybody climbs into the cockpit, he shows us his credentials. Let us examine his certificate carefully, and better have two pilots. This is a jumbo jet, not a 757. That is why you need an elected President.

As for Cabinet being already a collective decision-making body and, therefore, there is no need to have a further check on the Cabinet, the problem is Mr Chiam has not been in Cabinet, and therefore does notunderstand. Cabinet is collective because by convention we work it that way. There is no law which forces Cabinet to be collective. The Cabinet is appointed by the Prime Minister. If he does not like you, he sacks you. He appoints another Minister. Ministers are not confirmed by Parliament. It is not like a Secretary of State in the United States. In fact, the way Cabinet works, there is no statutory check and balance. The Prime Minister need not consult the Cabinet on what he does. He does so because otherwise he will lose their support. But he is not, by law, compelled to when he advises the President.

The Ministers, by law, need not consult Cabinet when they decide things. I give you two examples. Statutory boards. The Minister in charge can appoint the Chairman and the members of the Board, which oversees its operations. We settle this in Cabinet routinely, because that is the way the PAP works. But the law does not say so. If the Minister wants to, he can change the Chairman and all the members of Telecoms tomorrow. Telecoms has about $1 billion in cash. It is accumulated reserves. He can spend them the day after tomorrow. There is nothing to stop him, except good sense. Do we want to continue to fly like that?

I give you another example, the SAF. The Minister for Defence can appoint, promote, demote, and dismiss any officer - General, Admiral, Commanders of the Air Force, Navy, the Chief of the General Staff - without consulting the Prime Minister or the Cabinet or the President today. No other country in the world does things like this. Do we want to continue to operate like this? It is not just flying solo. It is living dangerously without a safety net. And the approach of saying, "We have not crashed yet, so why not continue to live dangerously?" Hell-riders talk like that, but I would have thought it is four years since we last advocated hell-riders in Potong Pasir.

Finally, Mr Chiam's point that maybe there is a bad President. Possible. Well, precisely! It is possible to have a bad President. It is also possible to have a bad Prime Minister. Now, which is safer? To have two people whom you must vote independently, and at least one of them will turn out to have good sense? Or depend on one person and risk it all on one throw of the dice? In Chinese they say, (Guzhu yi reng) ( ) - put all your money on one gamble and throw, your entire fortune. I think we had better take precautions, and we will do so in good time after a full debate.

Mr Chiam See Tong: Mr Deputy Speaker, can I be allowed to ask for certain clarifications from the Minister for Trade and Industry?

Mr Deputy Speaker: You have made your speech already.

Mr Chiam See Tong: No. Can I have your permission?

Mr Deputy Speaker: Yes, very briefly. What do you want to clarify?

Mr Chiam See Tong: I have said that the issue is really the balance between how we are going about to preserve our reserves and also the danger of giving too much power to one person, and that power can be abused. He says that it is better to have two options, there is no possibility of getting a bad Prime Minister and a bad President. Is there not a possibility that if you get a bad President, the bad President will accumulate so much power that he cannot be removed? And then he can easily -

BG Lee Hsien Loong: How?

Mr Chiam See Tong: There is a possibility.

BG Lee Hsien Loong: How?

Mr Chiam See Tong: I have already elaborated. So I think that is the fear of the people of Singapore too much power being given to a single person, or if he acquires it on the way. In that sense, if you have got a person having too much power, then where is your check and balance? Then we would have lost our democracy.

As regards electing a bad government, I think sooner or later you have to trust the people of Singapore. You cannot always hold them by the hand. I do not think the people of Singapore will vote in a bad government. There is no evidence ---

Mr Deputy Speaker: Mr Chiam, can you seek your clarification? I think you are making another speech.

Mr Chiam See Tong: All right. My question is: do you really think that the people of Singapore cannot be trusted? The third point is: I have said that I have no aspirations to be the Prime Minister. What about you?

BG Lee Hsien Loong: We are discussing future Presidents, not future Prime Ministers.

First of all, if a President is given these reserve powers, can he amass further power and become so great that he is irremovable? How? Unless Parliament becomes supine and does his will. But why should Parliament become supine? Parliament is a supreme body in the land. It votes. Unless it passes legislation, no powers can be granted. If Parliament in its wisdom wants to create a presidential form of government, that is for the future Parliament to decide. I do not think so. I do not see any reason why this first step should make it more likely.

As for trusting the people of Singapore, we have full trust in the people of Singapore. But that does not mean we have to live dangerously.

The US Constitution, which Mr Chiam has such full praise of, is full of checks and balances. The President, the Senate and the House of Representatives, the Supreme Court, they regularly stymie one another. They regularly fight one another, veto Bills, side-track, circumvent. It is an amazing system. Some people say that is why it has worked 200 years. I am not proposing to do what they are doing. But while the Americans in their Declaration of Independence says "We The People", even they think it prudent to have checks and balances. Are we such superstars at political balancing and equilibrium that we can do without?

Dr Augustine H.H. Tan (Whampoa): Mr Deputy Speaker, Sir, I rise in support of the motion standing in the name of the Member for Kebun Baru.

First, may I dispose of certain points raised by the Member for Potong Pasir. In the first place, this man is full of fears. And my recommendation to him is: do not act out of fear because the more you fear something, the more it will come to pass. In expressing his fears, he also expressed a number of contradictions. He wants more democracy. But when we have provided two measures that are going to create greater democracy because there is greater decentralization of powers, namely, the Town Council and now an elected Presidency, he claims that both of these are anti-democracy. And he does not like the idea that an elected MP would also be responsible for the affairs of Town Councils.

He also made the point that the Government has detained people because they wanted changes in the system. And here we are advocating some fundamental change in our system. He should bear in mind that there is a very real difference between trying to change the system via subversion, via revolution, via violent means, and changing the system through the open political process. The Member for Potong Pasir would not be here if we did not have a system that allowed for open political discussion. In fact, he organizes public rallies freely. He was extolling the American Constitution. But as the Minister for Trade and Industry pointed out, the American President himself is an executive President. And you have so many checks and balances in that system. In fact, it is a system which is really proving itself to be impossible for any government to exercise any authority or to govern the country successfully.

He said that under the proposal for an elected Presidency, all potential candidates have to be screened rather carefully. And in the light of the proposed qualifications, President Reagan himself would never have qualified to be President of the United States or to be Governor of California. But, Sir, look at the mess the man has made to his own country. And that mess is threatening the stablity, the viability, of the world economy. Yes, because he was an actor. He did not have administrative experience.

Sir, when MPs debate this White Paper, some of them appear to be confused or appear to take the view that this White Paper is already a Bill before the House. And they debate the provisions in minute detail as though we are about to implement a Bill on the presidential election. It is a White Paper meant for discussion. The issues ought to be discussed widely and I support the proposal by several MPs that this White Paper and its provisions be made an election issue. The Member for Rochore wants a referendum instead. But I suggest that the best way is to discuss the issues during this coming election. Because behind this White Paper are issues that go beyond the question of electing a President and I shall refer to them very shortly.

The Member for Ayer Rajah made a very significant point earlier this morning. He said we should distinguish between personalities and principles. And I suspect that those who love the Prime Minister may be blinded to some of the provisions in this White Paper and those who hate him may similarly be blinded as well. I would suggest that whether we love him or hate him, let us all love Singapore. And let us debate the issues as to whether they are the best provisions for the viability of Singapore. Let us address the questions such as: are the safeguards necessary? Are the safeguards sufficient to achieve the objectives that they purport to do? And, thirdly, what is the best mechanism for achieving the objectives?

The Member for Telok Ayer made the point that our system of government has worked over the last 30 years. So why change? But it is precisely because of what the Member for Braddell Heights said yesterday that no matter what system of government we devise, whatever checks and balances we build into the system, the best constitution in the world cannot guarantee that the right type of people, incorruptible, honest, able to govern, are elected by the people, whether it be the Prime Minister and his Cabinet and Members of Parliament or an elected President. Ultimately, it is the people of Singapore that must decide.

Sir, when a Singaporean travels abroad, he comes home realizing a lot of things about Singapore in comparison with other countries. When you queue up at an airport to get your ticket checked, your bags checked, you realize at once that there are very few countries in the world where we can virtually get the ticket checked in a matter of minutes. In many countries, we have to wait half-an-hour, one hour. When you arrive at an airport, it may take you an hour, two hours, to get out of the airport. In Singapore, in a matter of minutes you are out.

Singapore works. It is an efficient Government. It is an efficient system. It is a Government that has dared to take a long-term view and there is virtually no patronage in Singapore. Pork-barrel politics does not exist in Singapore. I find this to be a very unique feature of our system. And the question is: how do we preserve these features for future generations? Has the system worked because it is a good system? Or has the system worked because history has thrown up a group of men with that integrity and the ability to govern, the farsightedness to govern and to govern well? And that is why we must examine this White Paper and the issues very carefully in this light.

There is a lot of debate as to whether the provisions will end up paralyzing the Government or whether they merely delay and exercise a moderating influence on the Government. This is something we can debate and we should debate. But we already have checks and balances in our system. We have the Judiciary, we have the Executive and we have Parliament. So it is a matter of giving more power to one or to the other and altering the balance as we go along. And other countries are doing the same thing. They have to make changes to their system of government from time to time. But ultimately, as I said earlier, no matter what system we devise, we have to have the support of the people and the people themselves must want to do the things and to accept the policies that the Government is trying to sell. That means building consensus. This is what the Government has set out to do in the last few years through the Economic Committee, through the National Agenda, through the Feedback Unit, through the Government Parliamentary Committees and the resource panels, through the Advisory Councils and through various grassroots organizations. The attempt has been to build a consensus, to instil certain values which are sufficiently common that will enable us to proceed as one nation with distinct objectives.

When we look at what has happened to many countries throughout the world, what do we find? You read the IMF reports. You read the World Bank reports. It is very depressing. So many countries in the world, developing and developed, have got huge government budget deficits. They have borrowed huge sums from abroad. They have high rates of inflation, low savings, low investment. They have currencies that are continually being devalued. How would the hon. Member for Potong Pasir like to be a Burmese, where for 30 or 40 years, he would have experienced an economy not only stagnating but going backwards. And it was only last year or a few months ago that the government ordered that the currencies above a certain face value would no longer be legal tender. By one stroke, the government wiped off millions of dollars.

Mr Chiam See Tong: Sir, may I be allowed a point of clarification?

Mr Deputy Speaker: Dr Tan, are you giving way?

Dr Augustine Tan: Yes.

Mr Chiam See Tong: Does the Member for Whampoa agree that the Burmese had a one-man or one-party rule for the last 26 years? That was probably the reason why the country went down.

Dr Augustine Tan: Mr Deputy Speaker, Sir, whether it is one man or several men, the point is you get many governments in such a situation. And we are trying to devise ways and means to prevent such a situation from occurring. I invite him to visit Rangoon and other parts of Burma to see for himself the decadence, the decay that is there, the inflation, the stagnation, the external indebtedness.

The point is this, Sir. The power of any government to destroy the economy is enormous unless proper checks and balances are built in. And we are not unique in this, Sir, in seeking some new mechanism in order to ensure the viability of our country. Many countries are seeking similar mechanisms. The United States Congress a couple of years ago passed a special Bill to force the President to balance his budget. And over the course of a number of years, the Executive would have to balance its budget and the provision is automatic. If the President failed to trim his budget deficit, the law itself would do it for him. And he would find himself with no funds to pay salaries of civil servants. That is even more drastic than what we are proposing here.

What is important for us to realize, Sir, is that we have to ensure that Government economic policies will benefit the country and not the reverse. We need to ensure that governments, unless there are special exigencies and for a very short time, should always have a balanced budget. Because to have an unbalanced budget, to have a budget deficit, means that the government will have to borrow. And I am very glad that one of the provisions of the White Paper is that the elected President will be able to block the power of the government to borrow, whether internally or externally. It was a point which I brought out much earlier when a similar matter was debated here in Parliament. Because the government could borrow on the basis of the reserves even though the President has one key to the reserves because there is such a thing as credit-worthiness of the country. So with $31 billion worth of reserves, we are credit-worthy and any government of the day can borrow from abroad. But our assets can be attached by foreign governments and by foreign banks, even though the government has no right to withdraw the reserves by itself.

Next, we also need to be conscious or aware that the size of the Government in relation to the GNP is critical to the health of the economy. When the size of the public sector is too large, even though you have a balanced budget, it could be to the detriment of the economy. So that may be something which the Government would like to look at for the future.

Mr Deputy Speaker: Order. I suspend the sitting and will take the Chair again at 2.00 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 resumed.

Dr Augustine Tan: Mr Deputy Speaker, Sir, before the lunch break I was talking about financial prudence. That is one of the strong points of our Government, and I see this White Paper as an attempt to institutionalize policies relating to financial prudence. Another equally important pillar of our country is an efficient and incorrupt civil service and towards this end too, I think the White Paper is an attempt to make sure that in the future Singapore will continue to enjoy such a civil service.

Sir, I would like to suggest, regarding this proposal for a Presidential Committee for the Protection of Reserves, that this Committee be enlarged to assume the role of a Council of Economic Advisers that will provide the Government with an independent overview of the economy and to make recommendations accordingly that would benefit the country. At the same time too, regarding the role of the Corrupt Practices Investigation Bureau: we might consider whether they should be vested in the Presidency as well because if the President has the power to deny appointments in the civil service, then equally he should have some safeguard powers over the incorruptibility of the civil service. Furthermore, since we are also discussing the prequalifications of Presidential candidates, we might also usefully discuss whether we should not have prequalifications for Members of Parliament. At the moment anybody can stand as a Member of Parliament, whether they have got police records or not, and is it desirable for this to continue or should we not have a special committee that will screen candidates for public office at all levels, including Members of Parliament. In that case we can rule out bicycle thieves and people of undesirable character.

The Parliamentary Secretary to the Minister for Education (Mr Tang Guan Seng): ( In Mandarin): Mr Deputy Speaker, Sir, when the White Paper was announced, I discussed with my friends this topic of an elected President. They thought that there should be no controversy about the safeguarding of the reserves. In other words, they agreed that an elected President should have a role in the safeguard of the reserves. But on the second function of the elected President, they did not seem to understand well. On being asked about it, their reaction was that if the candidate for President is to be Prime Minister Lee, then there will be no problem. But I feel that this kind of perception is wrong because we should not look at the issue by the choice of the candidates. We should judge the matter on its merit. On the candidate. On the contrary, some people disagree with the proposal also because of the candidacy. Their reasoning is since Prime Minister Lee has been the head of the Government for some 30 years, his influence over the future Government would be very great if he were to be the President. They are of the view that the power of the second generation leadership would be eroded if the PM is to be the elected President. This view is the same as the earlier one. I have said that we should judge the matter on the system itself and not on the candidate's personality.

I remember that at the last general election there was the suspicion expressed by Opposition candidates about the sufficiency of CPF funds for the refund of CPF savings to retired people, especially when the Report on the Problems of the Aged was published. This question of whether there was enough CPF funds to refund to the retirees became an issue at the election. After four years, now we are convinced that we have enough reserves. So, not only is there no such problem, we even need an elected President to safeguard the reserves. About four years ago when we debated on the problem whether we had enough CPF money to return to the retirees, the Government found it difficult to produce all the accounts to show whether there was enough reserves or not, whereas under the present proposal there is a means to prove whether the reserves are intact.

There is another advantage in the proposal. That is to say, if we have an elected President to safeguard the reserves, then Opposition candidates cannot make use of the reserves as an issue in the general elections. They would promise the electorate that the reserve funds can be used to subsidise them or for their other benefits. there would not be grounds for sduch promises to be made if it is known that the elected President has to approve of such use before the reserves can be touched.

There is the second function, that is, the safeguarding of the integrity and efficiency of our civil service. It is very important because a clean, incorruptible and efficient civil service is our national asset. We have the system of civil service for a long time. It takes a long time for us to build up, with much effort, such a civil service. Recently I read from the newspapers that China is also now implementing a kind of civil service system. In the past, they mixed the Government and the party together and the party cadres had been doubling up as Government officers. Now, they are trying to implement a system of civil service and to separate the Government from the party. This shows that they also value the integrity and efficiency of the civil service.

From the debate yesterday and today, I feel there is a question which is very important. That is, under the elected President system, there may be conflicts between the President and the Prime Minister. If we can delineate clearly the powers respectively of the President and the Prime Minister respectively, then such conflicts may be avoided. It can be just like the Judiciary being independent. In other words, we could stipulate that the civil service should be entirely independent and free from interference of Party politics. We all know that Singapore is a small country without any natural resources. The two proposals of the elected President system are for the safeguard of these two assets, our reserves and the integrity of our civil service, which are very important to the survival and long term interest of our country. Thank you.

Mrs Yu-Foo Yee Shoon (Yuhua): ( In Mandarin): Mr Deputy Speaker, Sir, I support the motion by the Member for Kebun Baru. In discussing this question, we do so in a serious mood and in a comfortable environment. We are discussing how to safeguard our reserves and maintain a clean, upright and efficient civil service. When we look around at other countries, we see them talking about how to solve the problems of corruption and poverty in their organizations, civil service and in their systems. So today we are able to discuss this question in a better condition and situation, and we should be glad about this good fortune. At the moment we have already accumulated some $30 billion of reserves and we have built up over 23 years of independence a civil service with integrity and efficiency. Therefore, now is a very opportune time for us to review this question as to how we can ensure we continue with this good system in future. While we are having a good life now we should also think of possible perils of the future. We are discussing the question of future safeguard, not for the present but for the future, for generations to come, as to how to preserve Singapore to be a stable, safe and prosperous country.

On the face of it, $30 billion seems to be a large sum of money. If an irresponsible government should turn up, within the short space of four or five years, it can squander away this sum of money. So now the most important question before us is how we could devise a system of balance between the government's power and the elected President exercising curbing power. When the Government thinks of touching the reserves it will have to consider that the elected President has this power. Some people say that there is the worry that the elected President may interfere with the government's use of the reserves, so that the government may be paralysed. But I would say that such fear need not arise because if there is a government like the PAP, which is able to create new avenues of income and able to spend $5 billion on the building of the MRT without resorting to the use of the reserves, it would be proof that if a government is capable and efficient, it would be able to create new revenues of income and need not resort to the accumulated reserves which are mainly CPF savings from the people. Should there be a natural disaster or when there is worldwide economic depression, then for the survival of Singapore when there was no other recourse, I suppose the President and the people would concur with the government's use of the reserves to overcome the difficulties. But if the President does not concur, then the government can apply pressure on him or resort to the people's decisive voting for a decision. So I feel there should not be such worry.

Another reason is that this proposal arose because in a democratic country where everybody has a vote, usually an irrresponsible political party or an opportunistic politician would use sweet words and blandishments to snare befuddled voters who may make the wrong choice. Perhaps during the general elections opportunist politicians may use the reserves and giving of subsidies and tax free as a kind of political bait to win votes. If there should be such a possibility or situation then the elected President's exercise of curbing power will be very important because the Government formed by such candidates may not be able to carry out their schemes and cannot play their political games as their resort to the reserves would likely be blocked by the President. With such provisions, opportunists may not have an opportunity at all.

Just look at the general elections of some industrialized countries such as USA. When the candidates are having a Presidential election, they dare not touch on some touchy problems such as tax increase to meet budget deficit or reduction of welfare handouts, while they may raise certain policies in order to bait the voters. But such a country like USA could survive even in difficult times when they spent their reserves because they have large land masses, bountiful natural resources and huge population of some two hundred years of nationhood. They will be able to survive as they are strong and sound, whereas Singapore is a small country without natural resources, if one day our reserves are squandered away when we want to raise loans or borrow from others they may not want to lend us.

The other point is about the second function of the elected President, ie, approving the appointment of key personnel, safeguarding the integrity of the civil service. Some people even the newspapers have understood wrongly that the President may appoint key officers of the civil service. In fact, according to the White Paper, the President only consents to the appointments recommended by the Prime Minister. Even if the President does not concur on the nominations of the Prime Minister, say, after once or twice, then the government can announce this position and ask the people to decide.

Therefore, I feel that there are two main factors why Singapore can survive and progress. We should not take these two main factors for granted and think that the future generation will also be enjoying our present progress and prosperity. What two major factors to our advantage are that we have good political system, independence of the judiciary, the rule of law and clear-cut demarcation of division of power. In some countries, even big ones, there is no rule of law or system of law, no clear-cut independence of the judiciary. So they cannot prosper. The merchants cannot even do their business because there is no commercial law. Secondly we have a just, capable, clean political leadership of integrity and efficient civil service to serve us. So, the elected President can supervise over and enhance these two kinds of assets of ours. Therefore, for the sake of the future of the future generations of Singapore, I support this proposition to amend the Constitution.

Dr S. Vasoo (Bo Wen): Mr Deputy Speaker, Sir, the issue of elected President has attracted much of the community's attention. The various people that I have spoken to are interested in this matter and I feel that we should generate more discussion on a topic of such importance. Some people have asked why we are bringing up this issue of an elected President at this stage. Why not earlier? Some others have suggested that perhaps there may be doubts amongst the older generation leaders that the succeeding younger generation leaders are not capable of managing the assets. These issues together with other viewpoints seem to concentrate around three main areas.

One group of people that I have spoken to think there is no need to change the present Constitution. They argue that things are doing well. "Why should we tinker with the Constitution when things are going on fine? We have an honest and capable government to look after the assets and to plan for the nation as a whole." Given the context, they say that it is predicted that an honest government will continue because we have instituted a good democratic system. They have doubts that the system that has been emplaced will be eroded. This is the notion of one sector of Singaporeans but this notion seems true so long as we continue to get honest people to run the government. It is based on the assumption that things are still carried out efficiently through government service and government programmes. This assumption need not hold true in the years ahead. It depends on the type of leadership. It depends on the of mettle and character of the people who will be entrusted to run the government. It is difficult to predict whether future governments will safeguard the reserves. It is an issue which my colleagues and myself are not able to answer at this stage whether the reserves will be there for us to live on when we age or when we retire.

The other second popular main viewpoint centres around the extension of the role of our present nominated President. It is argued that there is no need for an elected President. The veto power that is to be used for our reserves and key appointments to public institutions can be embedded into the role of the present President. The enlarged role of the present President will then enable us to achieve the same objective as that of having an elected Presidential System. So in this way we are not really bringing about a major Constitutional charge but strengthening the existing system.

This argument seems to be realistic to some extent. But on the other hand, if you examine this suggestion and viewpoints closely, you will find that under the current system the President can be removed by the Cabinet and a new President appointed, and he does not have the right to veto if he wants to. Therefore, in a crisis he is not able to discharge his role. In this context, what else can be done to make a safer governmental system through which our national reserves can be safeguarded.

Sir, under the extended role provided for in our current Presidential system, if the government needs to use the resources but is frustrated because it is unable to gain access to it, then I think it is possible for the government to remove the President in order to gain access to such resources. There is no fool-proof protection. Hence, there is some inherent weakness in the suggestion to extend or enlarge the role of the current Presidential system.

Sir, the third popular viewpoint supports the need for implementing some form of Constitutional change for an elected President. Most of the people I have spoken to advocate this viewpoint. They are concerned about their CPF. They want to make sure that their money will be there for them to gain access to when they retire. Having worked hard for all these years, the ultimate analysis is that they need to be assured that when they retire their savings will be safe and accorded to them.

Many of my constituents are Chinese and they speak to me in Hokkien. They say, "Eng kai poh wu lan hui kuan ai gong chay kim lui". The translation is that we must protect our sweat-and-blood CPF money for which we have saved so hard. We must protect it. I strongly agree with them because that is their life-line. They have worked hard and at the end of the day, they look forward to a happy retirement and have the money to spend in their twilight years to meet their welfare and other needs. They told me that there are a lot of loopholes in the current system. They say, "Chin chuay k'ang." There are a lot of holes. All these need to be plugged and one has to take serious action to see how CPF could be protected. They are very insistent. They are very vehement about this, and I agree with them because having worked so hard to save, they will indeed be in a dilemma if they were to find their savings misused.

The best way in which their savings can be protected is through a Constitutional change through which we have an elected President with veto powers to ensure that any misuse of national reserves, particularly the CPF savings, will be curtailed or prevented. This is supported generally by many people and the ordinary working people in my community. They see that if we have an elected President, he will be able to monitor the government because basically he represents the nation as a whole. Being voted on a popular mandate, he is expected to look after the common good of the community. He will be above politics and therefore he can ensure that the national reserves and funds are appropriately safeguard.

Sir, I have several observations to make with regard to the White Paper that has been published. I suggest that both the Presidential and Vice-Presidential posts be elected. This will ensure the credibility of the respective offices. It will give these elected persons, i.e. both the President and Vice-President, the role of custodian of public interests and they will be able to provide whatever support required to safeguard public funds and our public institutions.

Secondly, what will be essentially necessary, Sir, is that we need to have a clearer definition of the role and functions of the elected President. As presented in the White Paper, the ideas are there but there is no clear definition of the roles and functions. These should be specifically detailed. I hope this will be clarified in subsequent legislation.

Thirdly, Sir, the Presidential role should be confined to the protection of reserves and appointments to some key institutions which have to deal with the assets of the country. If this is the major role and thrust of the elected President, then I think there will be adequate safeguards for him to monitor the use of the reserves.

Fourthly, Sir, there is a need to institute some checks on the elected President. A Presidential Council comprising five to seven nominated persons with outstanding public service contributions could be formed to advise the President on matters of national concern where veto powers need to be exercised from time to time. With the group of nominated council members to advise him, the President would be in a better position to exercise his veto powers. He will probably have the best inputs from people who have the best experience as Chief Executives in various organizations or businesses.

Sir, in conclusion, I support the concept of an elected President in so far as it would strengthen our system of government. This is unique to ourselves, and I think we should give careful consideration as to how this could be instituted. Sir, even if there are no signs of cracks in our building, we must take steps to examine the foundations to ensure that these foundations last for a long time more. With that note, I would like to thank you, Sir.

Mr Leong Horn Kee (Thomson): Mr Deputy Speaker, Sir, this White Paper on the Constitutional Amendments to provide for an elected President to safeguard the financial assets and the integrity of the public service is a piece of important legislation that is going to be introduced by the Government. Earlier two major legislations that have been passed in this House are the GRC or Team MP concept and the Town Councils Bill. All these three new concepts are bold and imaginative moves by the Government. These are measures that have been conceptualized after many years of thinking.

The manner in which these new proposed legislations are introduced tells us very much about the style of the new generation leaders. First, I see them as being prepared to explore new ideas and new concepts for the interest of the country. Secondly, while they are bold in trying out new ideas, they do so with much caution and deliberation. Much time is spent in thinking through the implications and repercussions before the proposed legislations are made public. Thirdly, the second generation leaders take a truly participative and consultative approach. Views are collected from a wide spectrum of the public before they are put in the final form.

The proposed concept on the elected President is an important safeguard as I see it. I agree that so far the present system of the full executive power resting with the Prime Minister and the Cabinet has worked well for us. So the question is, why make the proposed change? My view is that some form of check and balance on the Executive is useful. In fact, our present system, which is copied from the British Westminster system, confers much power on the Government as they hold both the Executive power as well as the Legislative power. An irresponsible government can easily abuse such extensive powers. We have not seen this happening so far because we are fortunate to have a capable and responsible PAP Government for the last 23 years. But there is no safeguard what a future government, PAP or otherwise, can do or will do. Therefore, I support the concept of having an elected President who serves to check on the use of our financial assets and integrity of the Civil Service.

There are a few concerns which have been expressed in this House. I shall not go into them. But I would like to point out one area which I have particular concern. There is a potential area of conflict in the matter of annual fiscal and financial policies of the Government. Each year the Government may introduce new tax and fiscal measures to stimulate certain sectors of the economy. These sectors may require certain incentives to grow. The Government may introduce measures which could then lead to incurring a deficit financing in the annual budget. For the Government to pay for this deficit financing, it has to raise external loans or domestic loans, and this is subject to the approval of the President. Therefore, the President has the blocking power to the Government's annual fiscal or financial policies. These policies formulation and implementation are matters obviously under the charge of the Cabinet and the Government. So should a conflict arise, how do we resolve it?

I have another query on the Presidential Committee for the Protection of Reserves. I see this as a useful idea to have a Committee to advise the President. However, as proposed, I am not sure what role this Committee will play in assisting the President, because in fact the President has the full discretionary powers to accept or reject the recommendations of this Committee. Moreover, the Committee of three to five members will consist mainly of what I would call "the President's men". Only one member will be appointed by the Government. Perhaps, one form of check on this Committee's work is to provide for public hearings of the deliberations of this Committee or at least to make public the views and recommendations of this Committee. In case the President chooses not to accept the Committee's recommendation, he has to come out with good reasons for doing so. I believe another role we can give to this Committee is to make it a Committee with some expert advice as well as a mediating role in case of any conflict between the Government and the President. Here it may be useful to recommend that the Committee should comprise people who are experts opinion in terms of economic or financial matters.

Sir, in the final analysis, I think the principle of the introduction of some form of check and balance between the President and the Executive Prime Minister is sound. The integrity and efficient operation of such checks rest entirely on the integrity of the President himself as well as the Prime Minister, and their ability to put the interests of the nation above the interests of their own political or personal gains. Both the President and the Government are elected by the people. For the system to work, the people must choose carefully and wisely.

The final form of check actually on both the President and the Prime Minister is that their actions and decisions are subject to close scrutiny of the public. They are ultimately answerable to the people for whatever action they take.

Mr Deputy Speaker, Sir, although I agree in principle with the concept of the elected President, I feel that there are many details to be worked out and that it should be subject to a Committee, at least a Select Committee, that can take views from a broad spectrum of people and therefore come out with a final form which is most ideal for Singapore.

Dr Dixie Tan (Ulu Pandan): Mr Deputy Speaker, Sir, I support in principle the proposal for the election of a President and a Vice-President. I would urge Members to look at these proposal not in terms of the next 10 years or 20 years, but in terms of the next 100 years and more. In this way, we will avoid the pitfalls of thinking in terms of possible personalities that might be involved and allow us to focus on the advantages or disadvantages of the system that is proposed. If we consider the system of Parliament that we now have, there can be no doubt that our present system could be improved by having an independent body to provide a mechanism for checks and balances. As pointed out in the White Paper, this function is commonly exercised by an Upper House. However, given the small size of our population, I do not propose that we have an Upper House. I propose that the role of the President and of his Committee be extended to include refusal of assent to Bills that have passed through the House. And why is this? Well, I think bad Bills could discourage economic growth, cause economic instability and flight of capital and, perhaps, flight of professionals and people with expertise, and in that way bring our country to bankruptcy. True, the President could refuse assent to use the reserves and force the government to go to the people in a general election. But with empty coffers, the President will have to give assent to the next elected government to dip into the reserves in order to rescue the economy. Would it not be better that the President had the powers in the first place to block the passage of potentially damaging Bills through the House? The President and the Presidential Committee would have the expertise, the time and the resource help to comb through Bills in a way that Backbenchers like myself do not have. I think most of us wish that we had more resource help and wish that we had more time, but we do not.

Therefore, I have this proposal, Sir, to put to the House that the power of refusal of assent of the President be extended to include all Bills which have passed through Parliament, that this blocking function be modelled on similar function of the House of Lords in Britain in that the President would be able to block Bills three times, after which Parliament could still carry these Bills. In other words, we will give him the opportunity to delay the passage of Bills to attract attention to their possible disadvantages. But not having a veto will allow Bills to pass through even though there is dissent without having a referendum or general election to be called for every disagreement.

I also propose, in view of the increased workload and responsibilities of the Committee, that it be elevated into something a little grander; it might possibly be called the Presidential Supreme Council. I also propose that this Council should have 12 full-time councillors, that these councillors should be appointed from a broad spectrum of the community, that councillors should serve for a term of six years, that half of these councillors should be appointed every three years. This will give us at any one time a number of councillors who have experience in the Council.

Now, I should like to refer to remarks made earlier by the Member for Whampoa on the USA. I think the USA is still a great nation with a very great heart. It is still giving vast amounts of aid to other nations. Its economy is buoyant and it has promise of further growth. And the proof of all this is in the pudding, and the pudding is that large numbers of people are still wanting badly to emigrate to the USA.

The First Deputy Prime Minister and Minister for Defence (Mr Goh Chok Tong): Mr Deputy Speaker, Sir, I want to make a couple of general points first before I deal with the major specific questions which Members of Parliament have raised.

In 1959 when the PAP took over the Government of Singapore, our external reserves were less than half a billion dollars. Today, nearly 30 years later, our external reserves have gone up to over $30 billion. When we discuss the proposal of elected President, we are discussing the problem of managing success, not failure. Had our reserves been less than half a billion dollars in 1988, then this question of an elected President to safeguard our reserves would not be an issue.

Second, Singapore has no natural resources. This point has been touched on by the Minister for Finance earlier this morning. The reserves represent our equivalent of natural resources. They are like forests. If we allow uncontrolled cutting down of the forest and do not reafforest the barren land, then we are depleting our wealth year by year. We therefore cannot allow, as in the case of countries which depend on forestry for their revenue, uncontrolled exploitation and depletion of our reserves.

The third point which I want to make is that we are not talking about reserves in an impersonal sense, that these reserves belong to the government, they are revenues of the State, they do not belong to us. These are your CPF funds, your CPF deposits backed by external reserves. We are therefore talking about a very personal issue, your money, not just some vague large sums of revenue being controlled by the government.

We are here to debate the principles of the proposals as contained in the White Paper, not details of a Bill. I would therefore not answer in detail every query that has been raised. There will be plenty of time later on to debate the issues. But for today, let us focus on the principles.

The principle is a simple one. Do we want or do we not want to make changes to our Constitution in order to safeguard two key assets - our reserves and the integrity of the government as reflected in the integrity of the civil service? If we want to do so, how do we do so? Is the elected President proposal the best way to safeguard these two key assets? Are there better ways? We have considered other ways like an Upper House, or a Committee to control your reserves. All these are contained in the White Paper, paragraph 18. But we believe that the elected President is the most workable proposal and also the most effective and responsive to changes of events or to meet the urgency of the situation. If Members of Parliament or others outside this House have better ideas of how we can safeguard these two key assets, we will be very delighted to hear from them.

If we settle on the proposal of the elected President, how can this proposal be improved upon? What are the pitfalls of the proposal? How do we avoid them? These are issues which we want to have a thorough debate so that when we come to drafting the Bill, we can take all these contributions into account and have a Bill that will be more exact, more specific, with details for a debate in this House.

Listening to MPs, I believe all Members of Parliament agree that our reserves represent our natural resources. They have to be protected for the sake of ourselves and our children and that we need to have a two-key mechanism. One key is held by the government and the other key held by somebody else, whether it is the elected President or an Upper House. I do not think there is disagreement on this. Mr Chiam has also agreed that it is necessary for us to safeguard our reserves.

The concern of Members of Parliament appears to be over the blocking powers of the President over appointments to key positions in the civil service and statutory boards. Reserves are not a problem as far as I can detect and therefore I do not think we need to spend too much time to discuss how to safeguard that. But there is concern as to whether the President will take on over the years some executive functions because he can block nominees by the Prime Minister in key appointments. It is important for us to discuss this question of integrity of the civil service because we cannot really talk about the protection of reserves without looking at the integrity of the civil service. Both are two sides of the same coin.

To illustrate that the integrity of the civil service and the reserves is actually one, let me give the example of the Monetary Authority of Singapore (MAS). MAS manages our cash and short-term external assets. The Chairman is the Minister for Finance. He is assisted by six other board members. If the board members are not appointed on the basis of integrity and ability, our external assets will be lost, even if the board of the MAS has the best intentions in the world of safeguarding the external assets. If a government abuses its position by rewarding its political supporters on the board of MAS, I think our reserves will be lost very quickly. And if the government has the authority to appoint executive staff of the MAS, not based on competence and integrity, but based on what the staff can do for the government in terms of political support, then our external reserves will vanish even more quickly.

Here, there seems to be a misunderstanding of what the position is. It is not the intention of our proposal to vest authority in the President over recruitment, transfers and promotions of civil servants belonging to the public service. In other words, the promotion of an Assistant Secretary to Principal Assistant Secretary or the appointment of a Director of a Government department, does not have to go to the President for his concurrence. This is the situation even now where the Government does not have the authority to decide who gets promoted and where. That job belongs to the impartial Public Service Commission. When we talk about key appointments, we are actually talking about the bodies that are responsible for recruiting, promoting and transferring staff on the basis of integrity and ability. These bodies are the Public Service Commission, the Armed Forces Commission when it is set up, the Legal Services Commission plus a few others which I will go through in some detail later on.

This proviso to have another body, in our case another person in the institution of the President, to help approve nominees to important positions is not new. The US has it. In their case, the President cannot appoint his executives, the Secretaries of State or Judges, without having them ratified by the Senate. The President is elected by the people but he is not given the full power to appoint Judges on his own or to appoint his various Secretaries. All these principal officers have to be ratified by the Senate. Remember the case of the two nominees of President Reagan to the Supreme Court, Justices Bork and Ginsbrug. They were not ratified by the Senate. One was not ratified. The other withdrew because he had a past history of consuming marijuana. The third candidate was approved. In our case, we think that certain key positions in certain key bodies should not be left just to the Prime Minister or to a future government alone to appoint. There should be a check. And the check we have in mind is the elected President.

I also sense that Members of Parliament do not disagree in principle with the need to safeguard the integrity of the civil service. What some Members appear to be unhappy over is the extended list as contained in the White Paper, and they fear that this list will grow longer and longer. I think the best way to resolve this is for us to go through the list in the White Paper and see which are the ones Members of Parliament would like to take out. This is contained in paragraph 45 (b), page 9 of the White Paper.

The Chief Justice and the other Supreme Court Judges - should we just leave it to the Government or do we think it is useful to have an elected President to concur?

Mr Chandra Das: Agree.

Mr Goh Chok Tong: Yes, Mr Das agrees with this. Chairman and Members of the Presidential Council for Minority Rights - I think it is useful to have two bodies to nominate and concur.

The Attorney-General - no quarrel over that.

Chairman and Members of the Public Service Commission?

Mr Chandra Das: Members not necessary.

Mr Goh Chok Tong: I think it is wiser to have Chairman and members, otherwise the Chairman can be outvoted by the members. I can see the Member for Bukit Batok nodding his head.

Chairman and Members of the proposed Armed Forces Services Commission - I think it is wise for another person to approve the nominations. As of now, I can tell you I am most uncomfortable at the authority which I have as Minister for Defence. As the Second Minister explained this morning, I can appoint the Chief of Staff, Chief of General Staff, Air Force Commander, Navy Commander, Army Commander. I can promote, I can transfer, I can demote, without legally having to consult the Prime Minister. We have an Armed Forces Council comprising the Service Chiefs plus the senior staff of Mindef. That Armed Forces Council is chaired by the Minister for Defence. We have always run promotions on a most impartial basis. Recommendations are put up not by the Ministers because we think that should be left to peer rating and to careful appraisal by the professionals and the staff of Mindef. Then as Chairman, I have to decide whether the officers recommended are deserving of promotion or not. But I do not feel comfortable because the potential for abuse is there. It is very easy for a potential mischief maker who is a Defence Minister to build up the military behind him. I do not think we want that to happen. So on my own I have always sent the promotion list to the Prime Minister for his information, and also to the President. So we introduce a convention of check and balances even though there is no legal requirement to do so. But I would feel happier if there is an Armed Forces Service Commission comprising people from outside Mindef as well to ensure that politics do not get into promotions in the Singapore Armed Forces.

Auditor-General and Accountant-General - no quarrel.

Chairman and members of the Monetary Authority of Singapore - no quarrel. For statutory boards, we can divide them into two categories. The statutory boards responsible for looking after our finances and the non-financial kind of statutory boards.

Monetary Authority of Singapore - I think we all nod our heads. I think we should have a check and balance over here.

Central Provident Fund Board -

Some hon. Members: Yes

Mr Goh Chok Tong: It is your money. Yes.

POSB - I am not so sure we need to have the President concurring to the appointment of Chairman and members of the POSB because if you have no faith in the Board of POSB you can take your money out. So maybe there is no need for us to insist on the full board being subject to the approval of the President. But I would still recommend that the Chairman should be. But this is a matter of detail which we can discuss when we deal with the specifics.

Goverment Investment Company - Yes.

Board of Commissioners of Currency - Yes.

PSA?

Some hon. Members: No need.

Mr Goh Chok Tong: Maybe. Point for debate. It may not be necessary. SBC?

An hon. Member: No need.

Mr Goh Chok Tong: Maybe. Civil Aviation Authority of Singapore?

Some hon. Members: No need.

Mr Goh Chok Tong: Agreed. Telecoms?

Some hon. Members: No need.

Mr Goh Chok Tong: No need. HDB - I think we had better have a good board on HDB because if you do not have a good board on HDB your houses will not get built in the first place. Then what is going to happen to those applying for homes? I think maybe for HDB it is wise to ensure that all board members are approved by the elected President. My own view is this. For some of the boards we do not have to insist that all members need to have the approval of the elected President. But my own view is that it is wise for the Chairman to require, first, the nomination of the Government, and secondly, the concurrence of the President. I think it is a safeguard which costs us nothing. And it does not interfere with the executive decisions of the Prime Minister or the Government.

So what else is left? Appointment of civil servants in the civil service? It does not come under the list. That is left to the Public Service Commission. In other words, there is no genuine reason for worrying about the so-called executive interference of the President. Perhaps Members of Parliament and also members of the public have been confused by public discussions. The professionals who met the Chairman of our Feedback Unit were under the impression that all key appointments, individual civil servants, individual officers in statutory boards, have to require the concurrence of the President. Such is the value of public discussion when one has not read the papers thoroughly or understood it. I think it has caused some confusion and I welcome the opportunity here to be able to explain them. It is not the intention of the proposal to have an elected President to approve each and every single appointment in the civil service.

Members are concerned that there could be conflict situations between the Prime Minister and the elected President. I see four possible scenarios in terms of relationship between the Government and the elected President or the kind of Government that we will have and the kind of elected President that we will have.

First scenario - what I call the best case scenario. A competent, dedicated government and a strong benign President. Then no trouble at all. The competent government will not have to raid the reserves in order to run the government. If it need to use the reserves, that government should be able to put up a good case to justify the use of reserves. For example, to defend the Singapore dollar if there is a temporary run on the dollar, but not when there is mismanagement. The President being wise, benign, would not check a competent government because there is no need to.

Second scenario - A competent, dedicated government and a weak opportunistic President. Then it is quite troublesome, or it can be troublesome, because your opportunistic President may want to interfere unnecessarily with the day-to-day running of the government, even though he does not have the right to do so or should not do so. But the problem should not arise if the Committee that vets eligible candidates for President does its job properly. Or it should be a minimal problem because not everyone can stand for election to be a President.

Third scenario - a weak and/or opportunistic government together with a weak opportunistic President, and both belonging to the same party. Under that scenario, I think it is hopeless. It is hopeless because your opportunistic government will want to use the reserves. If it is weak, it will allow the reserves to be spent. If you have an opportunistic President, I think your reserves will not be safe. This is the worst case scenario. But having an elected President, it is no worse than not doing anything at all. If you have two persons conniving, well, I think you cannot protect your reserves or your bank account. But it is a no-worse situation than not doing anything at all.

Fourth scenario - A weak and/or opportunistic government and a strong benign President. This is the scenario in which we think sometime in the distant future it may be a possibility. And if it does not turn out to be the case, well, then we are lucky. Having an elected President again is not making matters worse. But should we end up with a weak and opportunistic government, we thank ourselves, we thank this House, for having changed the Constitution to allow a strong benign President to be elected who can block the reserves, who can block wrong appointments to the key positions in the various commissions. In fact, it is this possible scenario that prompts us to exercise our minds as to the best way to ensure that the two key assets are never squandered away.

Now, some replies to specific points raised. The President should not be partisan. He should be above politics. This point was raised by several Members in this House. He should not belong to a political party. Our view is that the President can belong to a political party. But once he is elected as a President, he should rise above the political frays. It is not his job to engage the next government in political frays or battles, even though that government does not belong to his party. He should look after the interests of the nation in the two areas earmarked for him. Even if he belongs to a political party, it is not expected of him to play party politics. It is like a star player in a football team. If that star player becomes a referee, his role changes. He can still be a member of a football club which the team belongs to. But he is a referee and the public respect him to be the referee.

Should the Vice-President be required not to be a Minister or a Member of Parliament? In other words, should Ministers and Members of Parliament be disqualified from holding the position of Vice-President? Unfortunately, our political talent pool at the top is quite limited. If we exclude Ministers and Members of Parliament, I do not think we can find potential Vice-Presidential candidates in abundance. If we can find them, we should be able to find them to stand for elections in this House. The anomaly is also more apparent than real. It is an anomaly on the surface. Again I would use this football analogy. If the Vice-President becomes the President, or even if he is a Minister and he becomes the Acting President for the time being, his role changes. And the public can see that he now has a different role and he is expected to play the role of the President, not the Minister, when he becomes the Acting President. If the President has no full confidence in the Vice-President when he goes on long leave, well, he can always ensure that important Bills are passed before he goes away or he can leave instruction that the Bills should not be cleared without his permission. These are matters of detail which we can deliberate further when the specific is spelt out in the Bill.

The Member for Tanah Merah, I think it is easier now to use the new form of address, Mr Ibrahim Othman, believes that the criteria for eligibility to be a President or Presidential candidate are too stringent. In my view, it is not stringent enough. If you want to leave open a big hole in which all kinds of candidates can slip through to stand for election, then we are in fact having a worse situation because all kinds of people can become President. It is not an improvement over the present system where all kinds of candidates can stand for elections in a general election. I think this is one of the more innovative features of this elected President which some Members might not have noted, ie, the quality control over potential candidates for important positions. I wish it could be extended to all candidates standing for election to Parliament. But we do not want to do that because that will cause all kinds of misunderstanding that we are going to change the system. So we have no intention of doing that. But if you compare the qualifications required for someone to stand for election and the qualifications you would insist upon before you appoint a person an accountant, a SAF officer, a doctor or a lawyer, you will be shocked at the slack and totally non-existent control over eligibility to stand for election to be a Member of this House.

Will the elected President weaken the position of the Prime Minister in future? This appears to be a concern of Members of this House that a future government may be in extremis crippled by a strong interfering President. If we have a scenario of a competent, dedicated, honourable Prime Minister and Cabinet members, I do not think the question will arise, especially if both the President and the Ministers come from the same party.

It is like having two signatures on a cheque in a way. A competent financial controller will not feel that his powers are being diminished just because there is a managing director who has to sign the same cheque. So a competent, dedicated government, I think, will not worry too much about the presence of a President who has safeguard powers over reserves and appointments to key positions in the civil service.

The Member for Telok Ayer is quite explicit in his view. He is against any change to the Constitution. That is one point of view - the belief that the system has worked, it is better to have one centre of power, otherwise it will confuse the public or it may lead to potential conflict situations. I think it is for Members to decide whether we do nothing or whether we make some changes to our Constitution. The assumption there is that the electorate will always return a government that is all-knowing, that is wise, that is dedicated, that is honest. If you think that assumption is correct and all future Prime Ministers will be wise, good, knowledgeable, competent, totally honest, then, yes, perhaps there is no need to change. But can we be sure? Again, I go back to the analogy of the financial controller and the managing director - two signatories required for a cheque. Nobody assumes that all financial controllers are honest and if they are honest, well, so be it, no difficulty in having a second signature. If they are not, then you have got to worry and better have a safeguard.

There seems to be some desire to have a referendum to resolve this issue. I do not believe in governing through referenda. As an elected government, we must have the courage of conviction to make improvements to our Constitution, if necessary, to implement difficult policies, if necessary. In our history of some 30 years from 1959 as a self-governing and later on independent nation, we have only conducted one referendum in 1962 and that was over the issue of merger with Malaysia - a matter of life and death for Singaporeans. If you look up the Constitution, it is clearly spelt out where referenda should be conducted. These are issues over ceding of our sovereignty to another nation, over the disbandment of the Singapore Armed Forces. On these two key issues, you must go to the people because life and death are involved, a matter of survival for the country. I think we should take one step at a time. Perhaps after the Bill is out, after the election is over, it may be clear to all that there is no need for a referendum. The support I think for the proposal is so clear.

The hon. Mr Chiam See Tong (I think he likes to be addressed that way) insists that the proposal should be made an election issue. That, of course, depends on when the elections will be held.

Mr Chiam See Tong: Next month.

Mr Goh Chok Tong: We let the legislative process takes its course. First, a White Paper, resolved today. Then the Bill will be prepared on the basis of the discussion today plus any other new ideas which we may gather from outside this House. The Bill will then have to be presented to this House, debated and, if necessary, we can have a Select Committee.

Election issue. If election is held this year, then I think it will be an election issue because I do not think we expect the Bill to be ready for presentation to Parliament before the end of this year. But am I right, because the Member for Potong Pasir was not here, that he is not opposed to our making some changes to our system in order to ensure that our reserves are not depleted? Am I right?

Mr Chiam See Tong: Yes.

Mr Goh Chok Tong: That is right. Am I right that he would agree with us that the integrity of the civil service should be protected?

Mr Chiam See Tong: Yes.

Mr Goh Chok Tong: Thank you. Of course, he may not necessarily agree with the details as proposed in the Bill. I think that is fair enough. We can have a debate later on on the detailed mechanism.

If the Member for Potong Pasir agrees with the principles as embodied in the White Paper, I think that is enough for us for today.

Mr Chiam See Tong: Not with the elected President, please.

Mr Goh Chok Tong: I know that several other points have been raised by MPs. These points will be considered when we draft the Bill and they can be debated further when we present the Bill to this House.

In conclusion, I would say this. Whether we have an elected President or not depends finally on the wishes of MPs and the wishes of the people. It is their money, it is their reserves, it is their civil service, it is their future. We are trying to make the system of governing safer for the people, but whether they want it or not is a matter for them to decide. [Applause].

Mr Lim Boon Heng (Kebun Baru): Mr Deputy Speaker, Sir, I wish to thank the many speakers who have spoken on the motion. I think most have spoken with feeling and after much thought on the subject. The valuable contributions that Members have made, as the First Deputy Prime Minister has said, would help the Government to draft a Bill for the purpose of an elected President and also the various points on how it would operate, the difficulties that Members foresee, would have to be ironed out when the Bill is being drafted.

In summary, I think we can say that the House agrees that there should be safeguards for our reserves and that we agree that there should be safeguards for the integrity of our civil service. We all agree that we should find some form of mechanism to build these safeguards into our Constitution. Most Members agree that an elected President is one method of achieving this objective whilst some may prefer to explore other means further. The main concern has been the worry over the balance of power between the President and the Prime Minister and, if I read the views of Members of this House, if these powers could be clearly defined, if the inexactitudes could be removed, then the system can work. These and other operational details would have to be debated further when the Bill is presented to Parliament and I am sure that the public would also join us in the discussion on the proposed Bill.

Finally, I would like to thank you, Mr Deputy Speaker, for allowing me to move this motion and to thank everyone for participating.

Question put, and agreed to.

Resolved,

That this House supports the principles set out in the White Paper 'Constitutional Amendments to Safeguard Financial Assets and the Integrity of the Public Services' which was presented to Parliament as Paper Cmd. 10 of 1988 as the basis for preparing a Bill for an elected President.