CUSTOMS (AMENDMENT) BILL

Debate resumed.

Dr Lee Siew-Choh: Mr Speaker, Sir, I follow up some of the remarks made by Mr Chandra Das who has expressed his concern. It would appear that sometimes the Government's right hand does not really know what its left hand is doing. Recent events have confirmed that. The Government often says that we should strengthen ASEAN solidarity. And in this respect, our First Deputy Prime Minister has gone to Indonesia to cement friendly relations. That is good. Yet, on the other hand, the Government amends the Immigration law, and abruptly and unceremoniously sends packing thousands of so-called illegal Thai workers, all going home bitter and resentful. And in the process, the Government has soured relations between Singapore and the Thai people. That is no good.

And now even before tempers have really cooled down, we have this Customs (Amendment) Bill, which will certainly cause a great deal of unhappiness in Johore and throughout Malaysia. The Minister has said that it is not meant to discourage people going into Malaysia, and even cited examples of Singapore promoting tourism in Johor. But questions have already been asked, and the Singapore High Commissioner to Malaysia had to make conciliatory statements in an attempt to allay apprehensions of the people in Malaysia. And similarly, our Minister for Trade and Industry had to speak of incentives for Singapore businesses that expand into Johor in order to appease injured feelings.

But the damage has already been done, and it may well be some time before the damage is repaired. Is that how Singapore hopes to improve and strengthen friendly relations with ASEAN countries, and especially with Malaysia? By doing something that would harm the interests of friends and neighbours as well as the interests of Singapore motorists? It sounds so unbelievable as some of the speakers have already said. It is as if our Government has been afflicted with schizophrenia, saying something nice and good in its saner moments, but doing something bad and irrational when it becomes moonstruck and wacky.

What other explanation is there forsuch a Bill that is both irrational and absurd, contrary to what Dr Hong Hai has said? Is it intended merely to save $2 million a month revenue that Government says it has been losing? However, since the Bill makes it an offence to cross the Causeway without at least half a tankful of petrol, the motorists from Singapore can buy at most another half tankful of cheaper petrol. Therefore, the revenue loss is halved, to only $1 million. And if we deduct also the extra expenditure incurred for the manpower and machinery needed to check the petrol gauges of vehicles, it can be seen that the sum saved by this Bill will be much less than $1 million a month. Surely that paltry sum saved is nothing compared to the goodwill that would be lost if such a half-tank rule Bill is passed and becomes law. Is the Bill really worth it?

Another aspect of this Bill is that although our Ministers often speak of the benefits of free enterprise and free market forces against the harmful effects of protectionism, Government is nevertheless actively pushing a policy of protectionism. That is what many people in Singapore are saying, and I agree with them.

Protectionism, Sir, comes in many forms, in the form of tariffs, quotas, import controls, non-tariff barriers, export self-restraint and so on. The Bill before us proposes a form of import control, by way of legal or administrative restriction to the free flow of goods, namely, the free flow of cheaper petrol bought by motorists returning from Johor. It wants to protect the sale of petrol in Singapore.

In defence of its action, Singapore may well say that it is merely adopting measures in connection with Singapore customs and duties. But what's in a name? They say that a rose by any name smells as sweet. And so protectionism via the Customs (Amendment) Bill is still protectionism. We must not forget that in the past Malaysia had adopted analogous measures that had prevented or discouraged the development of the free flow of goods across the Causeway. Would the Government be able to assure the House that this half tank rule will not trigger off another round of retaliatory measures taken by the Malaysian government in the future? If not, should we then legislate something that can and probably will provoke retaliation from our neighbours and friends in ASEAN?

Our policies are certainly irrational. Also irrational is the statement by the Minister for Trade and Industry. While in Johor, he said:

'When they [ie, the motorists] buy cheap petrol in Johor to bring back to Singapore, they are circumventing the traffic congestion control policy and [almost as an afterthought I think] a loss of revenue [that is unimportant].' So the Government's excuse for the Bill would be that cheap petrol from Johor causes traffic congestion in Singapore. We must remind the Minister, as the Minister himself has also said, that people have been going to buy cheap petrol from Johor ever since 1985, after the big increase in petrol duties in Singapore. When it realized that it was losing revenue because motorists were buying cheaper petrol in Johor, the Government was forced to reduce petrol taxes in 1986 by about 40 cents or so. After that, of course, fewer motorists went to buy cheaper petrol in Johor.

But since one year or more ago, the exchange rate in favour of the Singapore dollar has been rising steadily. Today, the exchange rate is around 70 cents to one Malaysian Ringgit. In the circumstances, it is only natural that motorists would like to take advantage of the favourable exchange rate to buy much cheaper petrol in Johor. Yet, during all these years, from 1985 to 1989 today no one has suggested that cheap petrol from Johor has caused traffic congestion in Singapore. And this is simply because cheap petrol has nothing to do with traffic congestion in Singapore. But now when the half-tank rule is being introduced, such an illogical argument is suddenly being advanced.

Common sense tells us that we cannot easily follow such PAP logic. It is very difficult. Common sense tells us that if the average motorist goes to buy cheaper petrol, it is because he hopes to save money. He would certainly want to conserve and economize on the use of petrol, and not foolishly waste it by unnecessary use of the vehicle on the road. But now the Minister wants us to believe that the motorist would waste his money by using the vehicle on the road, and so cause congestion in Singapore. I wonder if the Minister is really serious. And does he really believe in such illogical logic?

If there is congestion, it is already present before the motorists go to Johor to buy cheaper petrol. And topping up half a tank with cheap petrol cannot add to such congestion. So how does filling half a tank with cheap petrol "circumvent the traffic congestion control policy", as the Minister claims? If it is congestion on the Causeway, that is another matter. But if the Bill is passed, checks on the petrol gauges on the Causeway is certain to worsen congestion. It is the Bill that will cause congestion, not the cheap petrol.

Lastly, Sir, I must point out, as has already been pointed out by Mr Chandra Das, that the restriction imposed on motorists going across the Causeway is a grave violation of the basic right of freedom of movement enshrined in the Universal Declaration of Human Rights. He does not believe in it! I say that the people have a right to travel freely inside and outside the country, whether they have half a tank or full tank in their vehicles. But now the Bill takes away that right. What other rights may be taken away the next time? Today, the restriction is on the buying of cheap petrol. Will it mean that tomorrow a person will not be able to cross the Causeway to do shopping, to do marketing or to enjoy a cheap seafood meal? Is this Bill intended to be a forerunner of more restrictions on human rights and freedoms in the days ahead? One can never be certain with the PAP Government, Sir, with its shocking record of violations of human rights in Singapore.

Sir, the Straits Times Forum Page published a letter from a reader not so long ago. He asked: A motorist may go across the Causeway with less than half-tankful and return to Singapore without buying any petrol. Is that an offence under the law? The reader concludes that the Bill is illogical. We must ask: what is the Minister's answer? If the answer is yes, it shows that such a law is an ass. If the answer is no, it shows that the proposed Bill is also an ass.

To conclude, Sir, the Bill is both illogical and irrational. It is a reflection of the illogical and irrational thinking of a Government afflicted with schizophrenia. It must be remembered that the Causeway is not a barrier but a bridge - a bridge that facilitates a free flow of trade, goods and movement of friendly peoples between the two territories. Imposing any form of restriction on the Causeway will certainly harm the interests of the people of both countries. The proposed Bill should be scrapped.

The Senior Parliamentary Secretary to the Minister for National Development (Mr Lee Yiok Seng): ( In Mandarin): Mr Speaker, Sir, I support this amendment Bill because it helps the Government to effectively control the increase in the number of vehicles. It is not designed to restrict singaporeans from going to Johor Bahru.

Mr Speaker, Sir, as our people get more affluent, their desire to enjoy material things is also greater. Everybody wants to possess more material things, enjoy a better living and to be comfortable. Therefore, when the people want to join the car owners class, it is a good sign. It is not wrong. Therefore the Government should not prevent them from doing that. But Singapore is a small island state with limited land space. We cannot allow the vehicles to occupy too much of land.

At the moment, 10% of our total land area is used for transportation purposes. In addition to this, land is also used for the building of car parks and other related facilities. So this is a problem every Singaporean should be concerned with. If from now we do not have a good plan and measures to control the increase in the number of vehicles but allow the people to freely possess cars, then there will come a time when people with cars will not be able to move.

I used to visit Woodlands Checkpoints as it is within my constituency. I cannot help noticing the traffic congestion at that place. If there comes a day, in Singapore, where there is a widespread traffic congestion, I think we will be be very disappointed and will be confronted with a lot of problems. The future of Singapore will also be adversely affected if there are traffic jams everywhere. Singapore will no longer be as good, as beautiful and as attractive as it is now.

Controlling the increase in the number of cars is something that nobody is actually willing to do, but to a responsible Singaporean it is something that he has to do.

At the moment, the measures taken by the Government do not restrict Singaporeans from owning cars. The taxes and regulations are to make the prople pau when they use their cars. I personally feel that these measures are not all the measures that could be adopted. In future, depending on the actual development of the situation, ney measures may be intorduced. I really do not know what they might be.

Sir, singaporeans want to become a middle class society. to do so, they must learn to always balance their family income and expenditure. The monthly budget should be well planned. Middle income people like to acquire material things. They must know that to acquire an extra item, they have to prepare for its monthly maintenance and expenses. If the budgetting is wring they may be tempted to ge more income through some other means. But such methods are not reliable. Some may even bing about financial problems upon their family. Some people have to go to Johor Bahru to buy cheaper petrol in order to be able to maintain a car.

Sir, if we want to become a middle class society, we must have our principles and we must stoutly uphold them. If we want to enjoy more material benefits, we must depend on our own ability and our own efforts to acquire and maintain such material things. We should never try to depend on luck or manipulate any loopholes or expect the Government to give some subsidy to acquire such things.

If we accept this principle, after the amendment is passed, the Bill will be seen, not a punishment, but as a lesson in principled living.

I hope the Minister for Finance will remind the officers under him to implement the law fairly and not to take every driver to be a criminal, quibbling over minor differences with him and taking him to court to be fined heavily, thus making the Bill a new means of revenue for the finance Ministry,

Sir, when the bill is passed, it may help relieve traffic congestion at the woodlands Customs Checkpoint. As more and more Singaporeans like to go to Johor Bahru or other places in Johor for sight-seeing or to spend their holidays, this measure will help to increase more tourist establishments at these places to attract them. Of course, there are also many people from Johor who like to come over here for a vacation. This movement of people across the Causeway will be mutually beneficial. The availabiliy of cheaper petrol in Johor Bahru has worsened the traffic congestion at Woodlands Checkpoints so much that people who want to cross the Causeway to spend their holidays there are put off by the congestion. So they simply do not want to go over there and the people in Johor Bahru are also reluctant to come over here. Tourist business facilities over in Johor Bahru are also reluctant to come over here. Tourist business facilities over in Johor Bahru are also affected adversely, not being fully utilized. On both sids of the Causeway normal business arrangements are also upset because of changing sizes of visiting crowd. The traffic congestion has also caused inconvenience to the residents of Woodlands New Town.

I feel that after this amendment Bill is passed, people who go over to Johor Bahru just to fill up their petrol tanks will no longer be interested to go over there because it may not be worth the effort. We need not worry too much for our Johor friends, because other than petrol kiosk operations, the business community there generally do not benefit from and so do not welcome these petrol purchasers because these people go over to Johor Bahru only to buy petrol. Besides, they add to the traffic in Johor Bahru.

After the passage of the bill, they will not go there any more. This will reduce the traffic pressure at the Checkpoints' vicinity so the traffic situation will be improved and people who want to go over to Johor Bahru or the other way round will find it more convenient to travel. Everybody will benefit from this Bill.

Sir, I would like to remind the Minister that in carrying out the inspection and checking of petrol tanks, the methods used should not add to the traffic congestion at the Woodlands Customs Checkpoint. If it does, it will cause even more unhappiness to many people.

Dr Augustine H.H. Tan (Whampoa): Mr Speaker, Sir, we can speculate about how effective this Bill will be. But it appears to have caused Dr Lee Siew-Choh a lot of indigestion already. I do not know whether indigestion leads to fantasy, but I do know that if one proceeds on certain assumptions about the behaviour of the Government, one can certainly fantasise about all kinds of motivations and ill-effects of policies and I can see why it is so easy for Dr Lee then to assume that the Government is stupid, inconsistent, schizophrenic, illogical, and so on and so forth. I believe, Sir, it is safer, easier and saner to assume a rational Government. If one proceeds on that basis then let me suggest a hypothesis why this Bill is being presented to Parliament.

If the $2 million loss of revenue per month is acknowledged by everybody to be a small amount, then surely that loss by itself cannot be the real reason for the introduction of this Bill. But if one can look further down the road and see a further strengthening of the Singapore dollar vis-a-vis the Malaysian dollar or an increase in petrol tax in Singapore, then one can see why such a Bill might be put into effect. I think the Minister hinted at this when he referred to the earlier experience when we did put on too big a petrol tax and the price differential between Singapore petrol and Malaysian petrol was so large that it led to long queues at the Causeway. So I do not believe that the intention of the Bill right now is to prevent people from going to Johor Baru because all the other attractions of Johor Baru are still there. It is still possible for motorists to go across the Causeway even with slightly more than half a tank and fill up there and refill there many times as long as they are motoring throughout West Malaysia. They can still enjoy the seafood regardless of the indigestion. They can do the shopping and do other things in Johor Baru. I believe that what is important for us is that we do not preclude ourselves the option of setting our own national policies.

One may agree or disagree with the petrol price increase to curb the use of motor vehicles in Singapore. But if that is deemed to be necessary, then it would be logical to have such a Bill to ensure that should such a tax increase come, then there will be no real congestion at the Causeway and real and very serious loss of revenue consequent upon that.

Dr John Chen Seow Phun (Hong Kah GRC): Mr Speaker, Sir, I think Dr Lee Siew-Choh was trying to deceive this House and the people of Singapore when he said that the price of petrol has got nothing to do with traffic congestion. It is obvious to everyone that when petrol is cheaply available one would tend to use the car more. How can he then say that the price of petrol has got nothing to do with traffic congestion?

Mr Speaker, Sir, our land transport policy seeks to maintain the congestion-free mobility of people and goods in Singapore through the control of car usage and the growth of car population. This policy requires that a combination of a number of measures, such as road tax, registration fee, ARF, road pricing and petrol tax, etc. be adopted. I believe Singaporeans have come to accept the necessity of such measures and are convinced of the benefits they will bring to Singapore. However, the use of petrol tax cannot effectively serve its purpose if Singaporeans can continue to buy cheaper petrol in Johor. Any increase in petrol tax would, in fact, attract more Singaporeans to do so. This Bill therefore seeks to ensure the effectiveness of the petrol tax measure.

The estimated revenue loss of $2 million per month at present is an indication of the extent to which the petrol tax measure is compromised. This amount can expect to increase, as Dr Augustine Tan has mentioned, should the Singapore dollar appreciates in value against the Malaysian Ringgit or should the Government decide to increase the petrol duty.

Sir, I therefore support the objective of this Bill because it would otherwise deprive us of an useful measure to control car usage. However, Sir, I am not comfortable with the means adopted in this Bill for two reasons. First, why should it be an offence when a person leaving the country has without more than half a tank of petrol in his motor vehicle? How can the law presume that he is going to buy cheaper petrol in Johor without giving him the opportunity to prove that he is not? Second, the Bill does not prevent a person from buying up to half a tank of petrol. As such, it is only half effective as far as achieving the objective of the petrol tax is concerned. The revenue loss can,in fact, increase substantially depending on any future increase in petrol tax. Thus, the Government may have to look for alternative measures if the problem continues to exist.

Sir, I know that administrative problem in implementing this Bill is one of the main considerations by the Government, including not to cause traffic congestion at the Causeway. In this respect, it seems that levying a tax on every vehicle leaving Singapore is the most effective means with the least administrative problem. This measure, however, will have the following drawbacks.

First, we will be seen to be discouraging Singaporeans from going to Malaysia. Second, it will have an adverse effect on our business cooperation with Johor and, third, one may ask why he should be made to pay the tax if he does not intend to buy petrol in Johor. Sir, I suggest that the Government look again into the feasibility of adopting the universal practice of customs declaration. There are ways to streamline the operation and keep the administrative problem and traffic conges- tion at the Causeway to the minimum. Every Singapore registered vehicle leaving Singapore can be given a card on which the person in charge of a vehicle will be required to mark the petrol level of his vehicle. Random checks can be done to enforce that no false declaration is made. When the vehicle returns from Malaysia, the card can be collected back and again random checks can be made to ensure that the petrol level of the vehicle does not exceed what has been declared. For those who lose their cards or do not wish to display their cards, a tax can then be levied on them. A heavy penalty can be imposed on those who violate the law. Sir, I hope that the Minister will consider this suggestion when he looks for alternative solutions in the future.

Dr Tan Cheng Bock (Ayer Rajah): Mr Speaker, Sir, the Minister thinks that people want to go to JB to buy cheaper petrol. He may be correct to a certain extent but I believe most Singaporeans disagree. The majority of Singaporeans going to JB are actually taking advantage of the lower Malaysian Ringgit and this is beyond our control. I think buying cheaper petrol is a fringe benefit. If the dollar differential is small then more Singaporeans will flock across and in turn will bring back cheaper but higher grade lead content petrol. What if the revenue loss is more than $2 million, say, $3 million? Will you then change the law to say that Singaporeans will have to fill up to three-quarter tankful before leaving the Republic?

I see the different grades of petrol as a more serious problem because it will negate your anti-pollution effort to bring down the lead level in the atmosphere. This perhaps is a more valid and acceptable reason in disallowing Singaporeans to buy petrol in JB. I hope the Minister for the Environment will agree with me.

Apart from the many points raised by my fellow Backbenchers, like traffic jams, administrative headaches, and our relationship with Johor, I want to ask a very fundamental question. Is it a crime to have less than half a tankful of petrol? The imposition of a fine means it is a crime.

Mr Dhanabalan: It is an offence.

Dr Tan Cheng Bock: An offence has been committed. If I can prove to you that my tank was not topped up in JB, will I be excused? If you want to impose this rule, then you must be prepared to implement this in a fair manner. Your assumption that Singaporeans going to JB to buy petrol may not be totally true. Why should I inconvenience myself to pump up my petrol tank just to satisfy you?

An hon. Member: It is inconvenient.

Dr Tan Cheng Bock: Yes, it is inconvenient. My purpose of going to JB is to enjoy myself, so why should I have to go and fulfil a requirement by the Ministry? How can you assume that I am going to commit a crime of buying cheap petrol? You are assuming that I have the intention to cheat.

Mr Speaker: Dr Tan, please refer to the Minister.

Dr Tan Cheng Bock: I am so sorry. I was thinking of the Minister for Finance. But this is serious. I am asking for a fairer implementation of this rule. If you can conceive such an idea, you must be able to implement this fairly. If your idea of introducing this Bill is to curb usage of cars, I think it is not going to work well. It is only a half-measure. Singaporeans, if their intention of going to JB is to buy cheaper petrol, can still continue to bring in half-tankful of petrol. Many think that this is a revenue-orientated move. If this is so, how significant is the $2 million loss in revenue in terms of the percentage of the total petrol used? Is it significant enough to have such an impact that this Bill must be introduced?

Mr Shanmugam: Mr Speaker, Sir, I think the Member for Ayer Rajah has already pre-empted me in my basic views on this Bill but I would set them out anyway. I can see the principle behind the amendments to the Customs Act. The basic philosophy is that petrol sold in Singapore is taxed so anyone bringing in petrol also has to pay the tax. But the problem with the proposed amendment is that it seeks to achieve administrative efficiency at the expense of some basic notion as to what ought and ought not to be an offence under our legal system.

It was not long ago that this House was reminded that we should perhaps be more careful in our pursuit of administrative efficiency at the expense of some perhaps fundamental values. There is obviously an automatic reaction to this Bill because it is seen as a further imposition of Governmental control on the way people order their lives. I can see that $30 million tax is lost per year. But could we not achieve the same purpose in imposing some form of tax on cars leaving the country with less than half a tank without making it an offence? What I would suggest is having a separate avenue for cars which leave Singapore to Johor Bahru or elsewhere where they declare whether they have half tank or less and if so pay a surcharge. I do not see that it imposes a greater administrative burden and, if it does, it causes a queue among cars queuing up in that lane where they have to pay a surcharge and that will be a motivating factor for people to top up anyway before they leave the country. The principle is that it is not made an offence. That is all. You can have the same effect but do not make it an offence because if you start making relatively simple things like having half a tank or less of petrol an offence, then there could be the question arising as to what else would be made an offence.

We have to distinguish between tax measures and offences and if people queue up in the wrong lane and purport to say that there is more than half a tank of petrol when they have less than half a tank, that can be made an offence because there they are attempting to cheat. So subject to that, I would ask the Minister to consider whether he should not reconsider this Bill and ensure that we have a mechanism not to lose out in tax revenues. In fact, the surcharge payable by cars leaving can be left to the discretion and not put in the Act, so that the Minister can increase the surcharge as and when the differential between the Ringgit and the Dollar varies or the petrol prices in Singapore go up, and there is no offence created.

Subject to that comment, Sir, I would support the Bill.

Mr Peh Chin Hua (Jalan Besar GRC): ( In Mandarin): Mr Speaker, Sir, I support this Amendment Bill. Some of my colleagues in this House have given their views; likewise some Singaporeans say that Government loses only $2 million per month on petrol tax, so it is not necessary for the Government to implement this half-tank oil requirement. Some Singaporeans even say that it shows that the Government is very stingy and also ungentlemanly and this regulation will also affect Malaysia/Singapore's friendly relationship. But I would say that this kind of view is very superficial and subjective!

By implementing this half-tank measure, just as what the Senior Parliamentary Secretary, Mr Lee Yiok Seng has pointed out, it will not only save the Government $24 million a year's loss in revenue, but also help in our effort in checking traffic congestion and what is more important is that it will help promote the spirit of cooperation amongst Asean countries and the mutual good relationship between Singapore and Malaysia.

Sir, for the reasons that I am going to give, I support this amendment. Half-tank measure is based on the principles of equality and mutual benefit between Singapore and Malaysia and also in keeping with the cooperative spirit of Asean countries. When there is benefit or revenue, each country shares one-half. What we will implement is only half-tank stipulation and not full-tank stipulation. Therefore, we are not what Dr Lee Siew-Choh said, implementing protectionist measures. Moreover, Malaysian citizens coming to Singapore will not be affected by this stipulation. This is another expression of good relationship between Singapore and Malaysia.

The second point is: Travelling, sight-seeing and shopping in Malaysia should not be concenrated solely on Johor Bahru but should be extended to places such as Penang, Ipoh, Kuala Lumpur and Kuantan. In this way, we would be helping in the overall development of tourism in Malaysia.

By congregating at Johor Bahru, we have caused a steep rise in their rate of inflation. Malaysia citizens residing in Johor Bahru have in fact, complained to their Central Government as it is affecting their living standard. As such, it could be seen that more problems have been created and those who have been actually benefitted are the minor group of businessmen and shopkeepers only.

The third point: The stipulation of half-tank petrol will not affect Singaporeans who genuinely go to look up their relatives or to do business there. Filial and warm-hearted Singaporeans and serious businessmen who have businness perspective and acumen will not be deterred by this half-tank stipulation. This measure will have no effect on such bona fide people.

The fourth point: it is a known fact that petrol with a high level of lead content is detrimental to vehicles and also causes air pollution. This is only a small matter. However, some have used "filling up petrol" as an excuse for them to frequent the night-spots in Johor, thus endangering their otherwise happy families and also lowring their morals. In no time, Johor Bahru would become a second "Haadyai". This would be unethical to Malaysia and to the residents in Johor Bahru, as well as dis-respectful to a Muslim state. The half-tank petrol measure will have great effect on such people. I think this measure is necessary. This does not mean that the Government is petty or being ungentlemanly, but because we understand a Chinese proverb which means "Do not do unto others what we ourselves do not want others to do unto us" which means what we do not want, do not give to others.

Mr Philip Tan Tee Yong (Paya Lebar): Mr Speaker, Sir, I have no doubt that this amendment Bill will fulfill the Government's desire to reduce the revenue lost through Singapore motorists buying cheaper petrol in Johor Baru. Because of the good relations we have with Malaysia, we must ensure that the decision is not based on economic considerations alone. I have a hunch that this amendment Bill may bring about a series of consequences which may be unfavourable to us if this decision is based purely on economic considerations.

Singapore has always spoken against protectionism in any form. This is understandable because we started with entrepot trade and we will continue to depend on it. This policy has made Singapore what it is today. I have no doubt that this policy will still be with us. To require our citizens to have half a tank of petrol before entering Johor Baru can be misunderstood as a subtle form of protectionism. This misunderstanding is already confirmed by Dr Lee when he said that it is a protectionist policy. We must address this issue very carefully, otherwise it will weaken our position when we next speak against protectionism.

Another area that we should be concerned with is the possibility that this amendment may spark off a series of subtle measures and counter-measures by both countries. Malaysians travel to Singapore and spend their money in our shopping centres and restaurants. We must be prepared for the day to come when the Malaysian government may impose some form of restrictions on their people's spending power in Singapore. If this materializes, the net result is one which will not be good for all of us. It will be good for us even at this juncture to imagine how we will feel if the Malaysian government were to impose this measure. What will we do if this happens? A vicious cycle of counter-measures can exist.

Malaysia is our source of natural produce, such as vegetables and fruits, not forgetting water. We must not assume that because they have vegetables in abundance and there is a big market in Singapore, vegetables will keep on coming to Singapore. If relations are affected because of this caption amendment, there can come a time when they may stop the supply of vegetables on political grounds. This has already happened in other countries where natural foods were not allowed to be exported on political grounds.

I personally think that we ought to be mindful and be more long-sighted when we come up with measures such as this. Sometimes to pay a small economic price may be in the longer interests of Singapore. As it stands now, it seems like we may win the battle but we may lose the war.

Dr Wang Kai Yuen (Bukit Timah): Mr Speaker, Sir, I shall be brief.

Mr Speaker: Good.

Dr Wang Kai Yuen: As the Minister has recounted, cheap petrol in Johor Baru puts a cap on the petrol tax the Government can impose. Thus the Government has been unable to use the petrol tax as one of the measures to regulate car population and car usage effectively. I would like to point out another side effect.

Over the past few years, the monthly fuel cost of operating a car in comparison with the car price, insurance cost and road tax has remained relatively low. One of the reasons is, of course, the soft crude oil market and the other is the petrol tax which has remained unchanged. This relatively low fuel cost has led to a growing trend amongst Singaporeans to buy bigger cars with higher capacity engines. While the drivers obviously enjoy greater comfort, such cars consume more petrol for the same distance travelled compared to smaller cars. They spew out more pollution, poison our air more, and eventually making the Singapore environment a poor place to live in for all of us, the majority of whom do not own cars. Furthermore, bigger cars also mean greater dependency on imported oil. When the price of oil increases in future, Singaporeans will find it very difficult to give up a luxury that they have become accustomed to, namely, bigger and more comfortable cars.

Thus, Mr Speaker, Sir, I support the Government's intention to raise petrol tax in future. Of course, before the Government can do so, it must plug the escape route via the Causeway. However, there are several things about this Bill I have reservations about.

To begin with, under the Bill, leaving Singapore in a car with less than half a tank of petrol becomes a punishable offence when it was not so in the past. On top of that, to remove the temptation to tamper with the fuel measuring system, the Minister for Communications and Information will be moving the Road Traffic (Amendment) Bill imposing substantial punishment for doing so. Before this amendment Bill, no one in his right mind would ever think of fooling around with the fuel gauge. After all, it is always better to drive around with an accurate meter than one that shows more fuel in the tank than otherwise.

But after the Bill becomes law, there are two more things in life that Singaporeans should not do. These things are not serious by themselves but they do nag at the subconscious, and this is a matter highlighted by my colleague, Dr Hong Hai. As such, I am in favour of the levy system mentioned by the Minister which will produce the same result without creating and imposing these two additional punishable offences. I am glad the Minister has agreed to keep the option open.

Mr Lew Syn Pau (Tanglin): Mr Speaker, Sir, I will also be brief.

When I first heard about the intentions of the Government to make it mandatory for all cars leaving Singapore for Johor to have at least half a tank of petrol, I was at first incredulous. The reasons have already been outlined by my colleagues such as, it seems like an unfriendly act towards our neighbours. It also seems like an intrusion into the privacy of motorists. And thirdly, inconvenience to motorists crossing the Causeway to Johor.

However, as one thinks about the basic objective of this Bill, which is to alleviate the problem of leakage of petrol tax and allow the Government to continue to use the petrol tax to control the usage of cars, there seems to be no better alternative. On second thought, therefore, this law seems to be another one of those creative, novel but nevertheless effective way of resolving our traffic problems which our Government is now known worldwide.

Let me now deal with the initial reservations I had, and probably most motorists in Singapore have, regarding this policy. Most motorists agree that the move away from high taxation solely on ownership of cars towards more taxation on usage is in the right direction. In principle, therefore, we must accept that a high petrol tax is preferable to higher ARF, road tax or registration fee, as it is a better proxy for usage of our vehicles. Greater usage, however, does not necessarily mean greater contribution to congestion on the roads in Singapore.

In the absence of electronic road pricing and other technology that will enable us to tax users based on the congestion they cause, a higher tax on petrol seems to be the next best alternative.

In order to allow the use of petrol tax to be effective, the two markets of Singapore and Malaysia must be kept separate. The half-tank measure is one way. A toll at the Causeway seems to be another simpler way. This toll can be adjusted accordingly when the need arises. However, the toll may be more costly to motorists who do not go to Johor Baru with the sole intention of filling up their tanks. And from the feedback I have received so far and the press reports I have read, this seems to be the case, ie, most motorists do not go to JB just to fill up their tanks, except for some people I hear living in Marsiling or Woodlands New Town. If this is the case, then this new law would not be such a deterrence to tourism in Johor. It would also not unduly penalize tourists and businessmen who visit Malaysia for all the other kinds of things she can offer.

As for the intrusion into privacy and further inconvenience to motorists, I am glad to hear from the Minister that only spotchecks would be conducted and this would be done as unobstrusively as possible. And also in case of doubt, the benefit would also be given to the motorists. But what I would like to suggest is that the authorities should also consider allowing motorists the option to pay a fee. The fee can be $5 or $10 or it can be varied as and when changes in the tax is introduced, in the event that some motorists genuinely forget to fill up at least half a tank before leaving for the Causeway, or for those who are in too much of a hurry to do so. To qualify for this payment, motorists must declare this before the spotcheck point.

Mr Speaker, Sir, road congestion in Singapore is caused by all motor vehicles, irrespective of whether they are registered in Singapore or in Malaysia. The measures the Government has introduced so far, however, apply mostly to Singapore cars. I would like to take this opportunity to ask the Minister how many Malaysian vehicles visit Singapore regularly, whether they contribute significantly to the congestion on our roads, and whether the Government plans to introduce new measures to control their usage in Singapore, especially by Malaysians working in Singapore.

Sir, I realize that this Bill is not going to be a popular one. However, if the Government is receptive to some of the suggestions Members have brought up, there should be minimal inconvenience and misunderstanding between the motorists and the Government.

Mr Davinder Singh: Sir, what I intend to say has already been covered. So I will be extremely brief.

It appears to me that if one makes an economic choice in the purchase of goods which are not illegal, the consequences must be economic. But in this Bill, we have gone beyond that. We are making it an offence to purchase products, the purchase of which is not illegal, if that purchase is not made where and when the Government dictates. Where I buy my petrol is my business. If I make that choice by buying cheaper petrol outside Singapore, then I must bear the consequences for it, which is, the payment of duty. If I evade that duty, then I must bear the consequences of the evasion, which is, I must pay a fine or go to prison for tax evasion. But to turn into potential offenders everyone who drives out in a motor vehicle but who has no intention to purchase petrol outside Singapore is something which I am concerned with.

Offences are created to deal with behaviour which is socially and morally wrong. At this stage of our development in Singapore, I do not believe that the purchase of petrol in Malaysia can be considered to be morally reprehensible. But if one goes beyond that and evades duty, then it is wrong and there ought to be an offence for that as there is.

In this regard, I have reservations even on the suggestion that a levy be introduced because it does not distinguish between those who do actually purchase and those who do not. In those circumstances, may I recommend a system which may entail some administrative hassle, may I recommend a system of one declaration. That means upon every car leaving Singapore, the person makes a declaration that he either has in his tank less than half or more than half. If he makes a false declaration, it is proper to make that an offence. If he returns with more than half, then he pays a flat rate. If he returns with less than half, there is no need to impose any duty on him. And it is an honest system. You do not have to check every car against every declaration, just one declaration. People driving off will know that there is a possibility that their declarations will be checked against the tank when they come back. And the risks of non-compliance are minimal.

The advantage with this system is that only those who leave with less than half a tank and come back with more than half a tank pay a duty, and that duty is a flat rate. I would ask the Minister to consider that.

The Minister for Foreign Affairs (Mr Wong Kan Seng): Sir, some Members have expressed concern about the effects of this Bill on our bilateral relations with Malaysia. I would like to address this concern.

The Government is not about to do something that will affect bilateral relations with Malaysia. Our relations with Malaysia have not been warmer or better now than in the past. People, I think, should give us credit for working out a scheme or a Bill like this to deal with a specific problem, and, at the same time, preserve the relationship that we have established so painstakingly over the last so many years.

What is our problem? Our problem is the car population and how to regulate the usage of cars in Singapore. Today, the differential in petrol price between Singapore and Malaysiamay be 30%. But if and when we use petrol duty as an instrument to regulate car usage, that differential will widen. And as the Singapore Dollar/Malaysian Ringgit exchange rate also widens, that differential will be wider still. Therefore, the price difference of petrol between Singapore and Malaysia will be much wider than what it is now. and if we allow it to continue, it would definitely defeat a policy that we want to establish, ie, the control of our car population.

Sir, our relationship with Malaysia must be seen in a wider context. It is not just narrowly based, and on one issue. Our relationship is much broader based, wider in scope. Singaporeans have had business dealings with their Malaysian counterparts for years. Singaporeans have relatives in Malaysia and there are other forms of contacts. Politicians and Ministers have exchanged visits also over the last few years. Sensitive to the fact that a Bill like this may be misunderstood by the Malaysians, whether the leadership in the government or the people, during the last few months when there were Ministerial visits between Malaysian Ministers coming to Singapore or Singapore Ministers going to Malaysia, we have taken the opportunity to explain our intent, so that when we introduce a Bill like this in Parliament, it will not be misunderstood.

When the Deputy Prime Minister of Malaysia, Encik Ghaffar Baba, came here with his colleague, the Housing and Local Government Minister, Mr Ng Cheng Kiat, our First Deputy Prime Minister took the opportunity to explain to both of them why and when we are introducing this Bill. The First Deputy Prime Minister also explained the intent of the Bill to the Mentri Besar of Johor because Johor will be the most affected state when this Bill is introduced. When Minister Rafidah came to Singapore a couple of months ago on a visit programme, she met the Minister for Trade and Industry, BG Lee. On that occasion, the Minister for Trade and Industry also explained our purpose of introducing this Bill. When the Education Minister, Encik Anwar Ibrahim, came, the purpose of introducing the Bill was also explained. When there was a comment heard by our High Commissioner from the Defence Minister in Kuala Lumpur, our High Commissioner also took pains to explain to the Minister why we are introducing a Bill like this.

Sir, we are fully aware of the effect on bilateral relations this Bill will have between Singapore and Malaysia. Therefore, we are not so stupid as to do something to hurt this relationship that we have built up. All these Malaysia Ministers have expressed an understanding as to why we are doing this. They understand. They also understand that every government has a right to introduce laws to deal with the specific problems of the country. We have done so in this particular Bill to deal with a problem, and that problem will continue to grow in time if we do nothing about it.

Our relationship will continue to grow with Malaysia because we continue to encourage our businessmen to invest in Malaysia. We have joint projects to develop the tourism potential in Johor. And we have also improved our links with many of the Malaysian leaders. So let me assure this House that this Bill will not affect the bilateral relations between Singapore and Malaysia.

Dr Richard Hu Tsu Tau: Mr Speaker, Sir, first, I would like to thank my colleague, the Minister for Foreign Affairs, for disposing of some of the questions which have been raised on the impact of this Bill on our bilateral relations with Malaysia.

I think there were 14 speakers. Obviously, this is a subject of great emotional interest. I therefore propose to take a little more time on it than I would normally do because of the large diversity of subjects which have been raised. But before doing so, I will dispose of one main misapprehension which has been raised by Dr Lee and several other Members here. This is that this half-tank regulation - I think that is going to be a common name now - will in fact result in restriction of the trade and is against the rules of free trade which we ourselves support. This is totally untrue and I will explain why.

Practically every country in the world levies substantial excise taxes on products like petrol, tobacco and liquor, for reasons either to control its usage or in most other cases for revenue collection. Therefore, practically all countries in the world restrict the duty free import of these products. I think everybody knows that. In the case of liquor and tobacco there is a limitation on how much you can bring in duty free into every country in the world. I think it is 200 sticks of cigarettes and one bottle of hard liquor or the equivalent. And that applies equally to the case of Singapore for imports of these goods from countries other than West Malaysia. In the case of West Malaysia, duty free imports of these goods are totally disallowed by mutual agreement with the Malaysian Government because of the large numbers of people who move between Singapore and West Malaysia daily, by car and by plane. Neither country can afford the massive duty loss which will result if there were even a token allowance of duty free imports of these products. Therefore, this practice of restricting duty free imports of these specific three classes of products is universally practised and in no way represents restriction of free trade or choice. No one has the right to buy tobacco from the United States because it happens to be very cheap there and import it freely into Singapore? What is the difference between that and petrol? So this red herring should be totally disposed of right from the outset. In the case of Singapore, other than these three products, we do not levy import duties or excise taxes on, practically anything else, which is not the case for most other countries in the world, including Malaysia. And we do not object because every country has a right to impose excise taxes for its own internal reasons and these have to be respected.

I will now deal with the individual remarks. Mr Chandra Das was concerned about relations with Johor but this has been adequately answered. He has asked: why should we not impose a three-quarter or full tank requirement. That seems more logical. Why half-tank? The reason is a practical one. The fuel gauge is not a very accurate instrument, except in the middle. Therefore, a three-quarter tank rule would be very difficult to implement because the three quarter point mark is either missing altogether or very near the full mark. Why not a full tank? I have explained earlier in my speech that a full tank rule will require topping up or using a dipstick because there is no way you can tell from the reading of the meter whether it is full because between three-quarters and full the meter reading is almost the same. So the half-tank rule was chosen for practical reasons.

He has asked whether we are not being petty? Is the revenue loss serious? I have said at the outset that the reason for the Bill is not revenue. Revenue is important but not the primary reason. The primary reason is to allow Government to control car usage through petrol pricing and we cannot allow motorists to avoid this by merely nipping across to Johor. I think the Malaysian Government recognizes this.

However, on the question of revenue, our estimate is a revenue loss of $2 million a month and I will explain this because it answers Dr Hong Hai's question: how do you arrive at this figure? Is it a reasonable figure? Or is it perhaps exaggerated? The estimate is based on actual Customs checks on Singapore registered cars crossing the Causeway over extended periods. The Customs does this regularly to monitor the position. I have explained in my speech that the current level of car crossings is about 6,000 per day, peaking at over 10,000 to 15,000 on holidays. We can assume that the typical car which crosses the Causeway is of 1.6 litre engine capacity (which is the average car in Singapore) with a fuel tank capacity of 52 litres. I think the average Singaporean is a logical person, if he is going to be there anyway, why not buy. This is perfectly legitimate. So if we assume that, he buys 40 litres and about half the people who cross over would buy, ie, 3,000 a day. 3,000 times 40 litres times a duty of 50 Singapore cents per litre times 30.5 days, which is the average month, comes out to about $1.8 million. Round it up, about $2 million. So that is how the figure is derived. So it is neither a hypothetical nor an exaggerated figure. It is not unreasonable to assume that half of the cars which cross the Causeway do buy petrol, because any sensible Singaporean who happens to be going there for whatever reason, would arrange to buy some petrol and not to do so would seem to be quite insensible. So I think the assumption is not invalid. About 50% would buy about 40 litres each.

Is the sum significant? Well, everything is relative. $2 million a month is roughly the tax which we would collect if we increased the PUB bill tax by 15%, or is also equivalent to the tax we would collect if we increase Telecoms bills by 15%. I leave it to you to decide which is preferable.

I think I have answered most of the questions put by Dr Hong Hai. He was supportive in other areas but he was more concerned about the grouses which he has picked up. Indeed there are many grouses which I have picked up myself from my talks with my community leaders. These are fairly common. I think they are grouses which arise partly because we have not been able to fully explain the application of these regulations. The reason for this has been explained, but Dr Hong Hai has suggested that it may be helpful if we spend some time now to explain to Singapore motorists why we are introducing these rules so that they may be more willing to accept the regulations. I am suggesting that the best way to convince the motorist is for him to actually experience this at the Causeway. He will find that it is not inconvenient at all.

I would like to suggest that if the regulation works effectively, there should be no concern whatsoever. In fact, the regulation need not be applied at all. Why do I say this? Because all that it involves is for anyone who wants to go to Johor Baru merely to glance at his petrol meter occasionally. If it is less than full, top up along the way, pick up one or two gallons; it is petrol that he is going to use anyway. So what is the inconvenience? Once he has done that, the regulation does not exist any more. So what is the problem? I really do not understand.

I now come to Dr Lee Siew-Choh now. I am afraid his performance is pretty typical of him, except he was smiling most of the time. So I have to assume that he really meant it tongue-in-cheek because what he said was totally absurd. He is the one who is irrational, schizophrenic, absurd, illogical and so forth. I can only presume he made all these statements because he was not listening to my speech and it appears to me he was reading from a set piece which he had written before my speech. Therefore, he was in no position to react to what I said because most of what I said directly contradicted everything he was charging the Government with. He even mentioned the fact that the duty loss somehow works out to be $1 million a month from the $2 million we have announced previously. I am not quite sure how he manages this division of 2, but that is typical of the Opposition's handling of statistics, don't you think? He has attacked the Government on principles of free market flow of goods, protectionism, and so forth. I have already explained this. I shall not go into it again.

He has asked whether this might not trigger retaliation by the Malaysian Government. My colleague has already explained this but I will elaborate slightly on this. I do not expect any retaliation because the Malaysian Government has been enforcing rules on the import of dutiable goods all along. We have never retaliated because it is their perfect right. I will give you an example. A few years ago, smart Malaysians were coming down to Singapore to buy tyres because Singapore tyres were very much cheaper than Malaysian tyres. They came down in cars fitted with the oldest tyres they had and switched to a set of brand new tyres and brought them back to Malaysia tax free. This soon came to the attention of the Malaysian Government. Thereafter, tyres on cars returning to Malaysia were inspected visually. If they looked new they were deemed new and were taxed as if they were new. This was a perfectly legitimate reaction on the part of the Malaysian Government to stop a duty leadage. We never complained. Why should we? Furthermore, the Malaysian Government imposes import duties on goods bought in Singapore by their citizens who visit Singapore and return to Malaysia. This is applied universally against all products which are dutiable. Again, it is a perfectly legitimate operation. We have no objections and it has not created any problems. So I think this measure we are introducing now ought not to excite the Malaysians who should understand. They have a larger problem in that they have many more dutiable goods than we have.

Mr Lee Yiok Seng has been supportive. He has suggested, however, that the regulations should be applied with discretion so as not to annoy our motorists. I entirely agree and the Customs officers have been told to act as inconspicuously as possible. Very few Customs officers will probably be deployed because we do not want to spend a lot of money policing this Bill. The Bill, a relatively high fine as a deterrent. We are hoping that no motorist need be caught at all. The intent of the Bill is for motorists to observe an honour system similar to the green lane at airports where if you have nothing to declare you merely drive through. I think it is no inconvenience at all because, if motorists have no intention of buying petrol in Johor, what is the harm in topping up beyond half a tank? If all Singaporean motorists enter into the spirit of the regulation, there should be no problem whatsoever. We might even be able to withdraw the Customs officials eventually!

I now come to the suggestion by some Members for an alternative system whereby motorists declare their tank contents before they leave and declare again when they return. The objection to this proposal, which may be legally more logical than the method we are proposing is that it is likely to cause more problems in practice. I would emphasize, that the method of regulation proposed was chosen for practical reasons because it is likely to cause the least inconvenience to motorists. The reason why a declaration is difficult difficult is because it involves two operations. You have to fill in a form, hand it over. When you come back we have to check you. How do you check to ensure that the form is correct? You will have to dip the tank. And you cannot dip it effectively. In fact, you have to drain the tank in order to establish the quantity, otherwise the Customs officers will be forced to accept the declaration on face value with no means of checking.

Dr John Chen Seow Phun: Fuel gauge.

Dr Richard Hu Tsu Tau: Fuel gauge, no. I said earlier that fuel gauge is not accurate enough and therefore there will be endless disputes on the quantity of we are talking about. The problem, I assure Members, has been thoroughly argued within Cabinet. We accept that it is not a perfect system and we would like to suggest that Singapore motorists should accept the Bill in the spirit in which it is intended and allow it to work and see how effective it is. If it does not work, we will be forced to introduce other more stringent and more painful measures in order to ensure that the use of petrol pricing as a method of controlling car usage is not bypassed. I would therefore ask Singapore motorists to allow this rather painless procedure to work, in which case, we need not do anything more.

Mr Davinder Singh and Mr Shanmugam have raised questions on the legal implications of the bill. Whilst I recognize their concern I have explained that the bill was drafted to provide a practical solution to a difficult problem. I believe I have covered the majority of points raised by Members except there was a final question on how many Malaysian cars visit Singapore. I do not have the exact figures but my recollection is that more Malaysian cars cross the Causeway into Singapore than the other way round. They are here mainly on business, holiday and so forth.

Finally, Sir, I would urge, all Singaporeans to accept the Bill in its spirit, check their meters before they cross the Causeway and there should be no need to apply any of the sanctions as there would be no offences. For the benefit of Mr shanmugam and Mr Davinder singh, I would say that it is not an offence if you do not commit the offence.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House. - [Dr Richard Hu Tsu Tau].

Bill considered in Committee.

[Mr Speaker in the Chair]

Clause 1 ordered to stand part of the Bill.

Clause 2 -

Dr Richard Hu Tsu Tau: Sir, I beg to move,

In page 2, line 7, to leave out "with less" and insert "without more".

Sir, the amendment is to make it clear that the amount of petrol a vehicle must carry should be more than half the contents of its fuel tank.

Amendment agreed to.

Dr Richard Hu Tsu Tau: Sir, I beg to move,

In page 2, after line 12, to insert -

"(a) where a motor vehicle is driven past the Customs gantry before the departure bay of the Immigration Checkpoint at Woodlands, the person in charge of that motor vehicle shall be presumed, until the contrary is proved, to have attempted to leave Singapore in that motor vehicle;".

May I explain the reason for this amendment? The amendment is to assist in the enforcement of the new law and to remove any possibility of any argument as to when a person has attempted to leave Singapore without more than a half tank of petrol. It will also be useful to motorists who will be able to know exactly at what point the law will be enforced against him.

Amendment agreed to.

The Chairman: Consequential amendments to be made to the marginal note and to re-letter paragraphs (a) and (b) as paragraphs (b) and (c) respectively. These will be done.

Clause 2, as amended, ordered to stand part of the Bill.

Bill reported with amendments; read a Third time and passed.