MAIN AND DEVELOPMENT ESTIMATES OF SINGAPORE FOR THE FINANCIAL YEAR 1ST APRIL, 1991 TO 31ST MARCH, 1992

Order read for consideration in Committee

of Supply [1st Allotted Day].

[Mr Speaker in the Chair]

The Chairman: Main and Development Estimates of Singapore for the financial year 1st April, 1991 to 31st March, 1992, contained in Paper Cmd. 6 of 1991. For convenience, I shall take the totals for each head of expenditure in the Main Estimates and the Development Estimates as they appear in the last columns of the schedules of Estimated Expenditure under the Main Estimates and under the Development Estimates on pages 47 and 48 respectively, of Paper Cmd. 6 of 1991.

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

I must add that we only have the seven days provided for under the Standing Orders for the Committee of Supply on the Estimates. The time available falls short of the times Members have indicated would be required for discussion of their amendments.

I will apply the same rules this year as I did in previous years. Members should therefore refer to the Hansard as I have no intention of repeating the rules here.

I will also apply the principle of equal time which will enable Members of the Backbench and the Opposition on the one hand, and Members of the Frontbench on the other hand, to have more or less an equal amount of time to discuss a matter. This will mean that Members of the Backbench and the Opposition should have enough time to raise their questions, while giving sufficient time to Members of the Frontbench to give satisfactory replies.

A total of 258 notices of amendments have been received. Members will appreciate that because of time constraints, speeches should be kept short so as to enable as many Members as possible to raise their amendments.

I am pleased to read that the GPCs have agreed to focus their attention on specific issues and I am confident that if the Members of the Frontbench will also likewise focus their answers on the questions raised, we can complete our agenda satisfactorily.

I shall deal first with the heads of expenditure in respect of which amendments stand on the Order Paper Supplement.

Head V -

Dr Lee Siew-Choh (Non-Constituency Member): Sir, this is not intended to be a controversial issue. This amendment is intended not to argue -

The Chairman: Dr Lee, would you like to move your amendment first?

Dr Lee Siew-Choh: Yes. Sir, I beg to move,

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

There are two amendments and I shall deal with them one after the other. As regards the Non-Constituency and Nominated Members of Parliament, I have said that this is not meant to be controversial at all. This amendment is intended not to argue the pros and cons of the issue but to inquire into what Government's intentions are on the matter. In fact, I have already told the Prime Minister that. The Constitution presently provides for a number of NCMPs and NMPs. Presently, we have one NCMP and two NMPs. One NCMP has been disqualified by Parliament under controversial circumstances. We would like to know what the policy of the Government is on these NCMPs and NMPs.

As regards proportional representation, this amendment is also not intended that we should have proportional representation straightaway. As I have said during the debate on the President's Address, there is a need for electoral reform in Singapore. It must come some time or other. It might as well come sooner.

If only 61% of votes allows the PAP to gain 80 out of 81 seats in Parliament, and 39% of votes allows the Opposition to win only one seat, then there is certainly something very, very wrong with our electoral system. As we know, the first-past-the-post system is no model of democratic procedure. It may even be said that it is one of the most unrepresentative electoral systems hitherto devised by our old colonial masters.

A general election under this system could well produce a result which is the exact opposite of the intentions of the majority of the electorate. This has happened in Britain quite a few times. Any reasonable system of proportional representation would easily provide a more accurate reflection of the voters' intention in Parliament. In Singapore, the results of the 1988 elections, to quote that most recent example again, produced a most unrepresentative Parliament, ie, our present Parliament with its unjust, unequal and unfair representation. But I can understand why the PAP Government, with its huge majority in Parliament, is most unwilling to institute any change to this present first-past-the-post electoral system.

If we should have proportional representation, then the PAP, even if it should continue to form the Government in future, will certainly find that it will no longer have such an overwhelming majority of seats in Parliament. But Government has its Vision 1999 and the Next Lap. And the PAP has repeatedly said that it sponsors an open government with participatory democracy in Singapore. That is progress. And this progress should also embrace progress in the promotion of justice and democracy in Singapore. Proportional representation would just fit into the bill. I do not intend to discuss the pros and cons. But it is my hope, and that of wide sections of our people in Singapore, that we have a just and fair representation in Parliament. Maybe the Prime Minister does not fully agree with me today. But I do hope that he will not reject electoral reform out of hand.

Today, European countries all practise some form of proportional representation. Japan is seriously considering electoral reform. Prince Charles has also called for electoral reform in Britain. Since the former Prime Minister laughs, it must be a good thing. I believe that the least that the PAP Government can do is to form a committee to study the matter of electoral reform and make recommendations. Would our Prime Minister be prepared to do that?

The Prime Minister and Minister for Defence (Mr Goh Chok Tong): Sir, in 1984, the Workers' Party rejected the proposal when we decided to introduce the NCMP scheme in Parliament. In 1988, the Workers' Party accepted two positions. In 1991, from Dr Lee's inquiry, I take it that he wants the Government to increase the number of NCMPs in Parliament. That is real progress.

The Government intends to have more NCMPs after the next elections, at least four, and perhaps six.

On his request to have electoral reform so that we can move to some form of proportional representation, I want to say here that I disagree with any suggestion that we should have proportional representation. The reason is this. If we have proportional representation, we are, in fact, concocting a brew that will blow up the multi-racial harmony in Singapore. Very quickly, political parties will be organised along narrow communal lines, even along linguistic lines and perhaps even also along religious lines. We are going to have a Malay-based party going for as high a percentage of the Malay votes as possible; a Chinese-educated party catering mainly to the Chinese-educated in Singapore; perhaps a Buddhist party catering to the Buddhists; a Christian-based party hoping to gain Christian votes; and an Indian party hoping to garner the Indian votes.

Under that situation, you can imagine how politics in Singapore will become. Each party will campaign vigorously along linguistic, religious and racial lines and that is the perfect concoction to blow up the harmony which we have in Singapore. It is against the very concept of GRC whereby we try to force political parties to adopt a multi-racial approach in gaining voter support.

We have, in fact, recognised the phenomenon mentioned by Dr Lee Siew-Choh and, that is, under the first-past-the-post system, the result could be that a party with 60-70% of the votes can win almost all the seats. It is because we recognise this phenomenon that we have introduced our concept of Non-constituency MP. If we have six NCMPs in Parliament, six out of 81 seats in Parliament will give us 7% of the total number of seats in Parliament. That is a fair representation for a party that could gain a seat in Parliament under the first-past-the-post system.

No Commonwealth country has introduced the proportional representation system. Yes, some European countries have done so. But look at the result. Look at the result in Italy where they have proportional representation. Italy ends up with a weak government because many small parties can gain seats in Parliament and the result is a coalition of parties forming the government and the government on the whole has proven to be unstable over the years. We see them changing government almost every one year or two years. That is not the kind of system that we want for Singapore. If we end up in such a situation where government changes frequently because government comprises a coalition of parties, I do not think that will benefit Singapore at all.

The point made by Dr Lee Siew-Choh has, in fact, been taken into account when we introduced the NCMP concept.

Dr Lee Siew-Choh: Mr Speaker, Sir, the Prime Minister's argument centres around two or three points, but they are all the same old arguments. The same old record is being played again and again. He talks about racial disharmony and a concoction of parties formed along religious lines. So far, this has never happened. The PAP has boasted that it could win in Geylang Serai, a Malay majority constituency. So what is there to worry about?

The other worry that the Prime Minister now thinks about is an unstable government. Well, we need not have a total proportional representation all through. We could have it half-half. We could have a first-past-the-post system for half the number of seats and proportional representation for half the number of seats. Then that would allow us to have stable governments at all times. In European countries having PR although some have so-called unstable governments, there is no dissatisfaction about uneven and unequal representation. And that is what we want. We want justice. We want to make sure that everybody's views will be represented in Parliament. At the present moment, as you can see, Sir, there is only one elected Opposition MP for nearly 40% of the opposition votes in the last elections. Surely under no stretch of the imagination would you say that this is fair representation of the votes and the views of the people in Singapore.

The Prime Minister and Minister for Defence (Mr Goh Chok Tong): Mr Speaker, Sir, we do not need to give 40% of the seats to the Opposition just because they won 40% of the votes in order for their views to be articulated in Parliament. One person from such a party will be sufficient to articulate all the views that need to be articulated over here.

How would the proposal of half the number of seats based on the first-past-the-postm system and the other half of the seats based on proportional representation be superior to the system that we have, which is to elect a government in an election? The whole idea of having an election is for the people to decide decisively on a party to form the government. And under our system we make provision for those voters who do not see their candidates returned in Parliament to have a certain number of seats so that their views could be articulated over here.

He has now shifted ground from the suggestion of a proportional representation to half-half, but this still does not solve the problem of parties being organised along racial lines, along religious lines, to win the other half of the seats. By compromising his proposal, he is in fact recognising that his proposal is a weak one.

Dr Lee Siew-Choh: Mr Speaker, Sir, I do not recognise it as a weak proposal at all. As I have said, I do not intend to argue this case today. If the Government should really be serious about the matter, let it form a committee and let the committee go into the matter and make recommendations accordingly.

To answer the point which the Prime Minister has just made, that only one Opposition MP is sufficient to speak for 40% of the voters, may I ask: do we need 80 out of 81 MPs to speak for 61% of the voters? Do we? Surely not. Maybe you need only two PAP MPs.

He keeps on talking about parties organised on racial lines. I think we could devise means whereby it would be difficult for those people who want to canvass on racial lines not to be voted into Parliament if we have proportional representation. There are ways and means. Let them look into the matter and investigate. In fact, Japan is doing this very seriously. Let them study what is happening in Japan. They have gone to Japan. I have not, but I have read a little about it.

The Prime Minister and Minister for Defence (Mr Goh Chok Tong): Sir, the matter has been looked into some years ago. That is how we ended up with the concept of the NCMP and also Nominated MPs. There is no need to have another electoral reform committee to look into it.

The GRC is also an innovation to take into account the unique situation of Singapore, and there is no need whatsoever for us to have another committee to look into electoral reforms. We are clear that proportional representation is the wrong system for Singapore.

Dr Lee Siew-Choh: Sir, true, the Prime Minister has said something about the matter some years ago. Well, we are progressing. We are now in 1991, and the PAP now talks about 1999. So, why do we not improve on the past? Certainly this is time for change.

The Prime Minister and Minister for Defence (Mr Goh Chok Tong): Mr Speaker, Sir, if the Opposition MP, Dr Lee Siew-Choh, can come up with a superior idea, we will certainly consider it. But his proposal is far from superior.

The Chairman: Dr Lee, are you withdrawing your amendment?

Dr Lee Siew-Choh: I am not withdrawing, Sir. I still hope that Government will consider the matter and form a committee to go into this matter more seriously. Call Prof. Tommy Koh to do that.

Question on the amendment put, and negatived.

The sum of $19,297,680 for Head V ordered to stand part of the Main Estimates.

The sum of $1,067,100 for Head V ordered to stand part of the Development Estimates.

Head K -

The Chairman: Head K - Ministry of Defence. Amendment No. (1), we have 40 minutes, Mr Ng Pock Too.

Mr Ng Pock Too (Nee Soon Central): Mr Speaker, Sir, I beg to move,

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

Sir, many instructive lessons can be learnt from the six months Gulf War. First, no one can assume that the world today will always remain a community of peace-loving nations. For the naive, there can be deadly surprises behind the facade of warm words like cooperation and co-existence. Regional and world peace can never be taken for granted, even though global tensions have eased. With the withdrawal of US presence as a stabilising force from many regions in the world and hence a reduced commitment to world security, potential conflicts among regional powers can suddenly erupt. We must remember that for a small nation like Singapore, our security depends on the stability of the region and in the world. Without global stability and respect for international law and order by the world community, our economic progress will falter.

Second, in the last resort we are on our own. We can only rely on ourselves to protect and defend Singapore. We cannot pay others to defend us. Without a strong defence capability of our own, we can end up like Kuwait on 2nd August 1990. The most excruciating scene I have witnessed recently was the statement made by the Kuwaiti Ambassador to the United States who was interviewed on CNN. The interviewer had asked him whether he regretted the action by the US in supplying arms to Iraq in its war with Iran and which were now used to invade and occupy Kuwait. The Ambassador put it this way. He had double regrets, because Kuwait had paid for the supplies of military equipment thinking that Iraq would defend her in any conflict with Iran.

Third, technical superiority of equipment and proper defence training are crucial determinants in giving us the ability to defend ourselves in modern warfare. We saw this vividly on CNN. This means heavy expenditure on high technology defence equipment to run an effective army, navy and air force capable of defending Singapore against external threats.

Fourth, the good life which we enjoy through sustained economic progress can make us complacent and lower our guard, so much so that we run the danger of taking the soft options when we face a crisis. This is particularly relevant to reservists who sometimes question the need for serious defence training and mobilisation exercises for which they were called up when there are no visible external threats.

Before the invasion, Kuwait did not perceive Iraq as a military threat. It was totally unprepared for any external incursion. When it realised that 100,000 Iraqi troops supported by 350 tanks and heavy artillery had overrun the border, Kuwaiti resistance was too little and too late. As a nation enfeebled by the easy life, Kuwait paid an enormous price in terms of loss of lives of its people, permanent damage to its social fabric, devastation of its infrastructure and looted of its national wealth.

This brings me to the Report of the Committee to Recognise the Contributions of Reservists to Total Defence (RECORD). In my view, the key sentence in the Report is to be found in BG George Yeo's letter to the Deputy Prime Minister. And I quote:

'... we thought it most important that in addition to recommending ways to recognise the contribution of reservists, we also recommend ways to enhance the contribution by reservists to Total Defence'.

In other words, recognition through rewards must go hand in hand with contribution. The more a reservist contributes, the more he gains in terms of rewards. From past experience in the SAF, a reservist who excels in his unit normally ends up shouldering more than his fair share of responsibility. This is unfair. So the principle of positive discrimination will differentiate those who contribute more from those who contribute less.

While I agree with the principle of positive discrimination, I must, however, alert RECORD to the dangers of over-emphasising material incentives to motivate reservists. There must be a proper balance struck between reward and commitment. And unless our reservists possess the will and commitment to defend Singapore with their lives, they will melt away in the heat of a crisis.

This draws an interesting parallel to NTUC's experience of increasing their union membership. In 1985, alarmed by a rapid decline in union membership, NTUC undertook an indepth analysis into the factors that led to the drastic drop in union members. It made the recommendation, firstly, that it had to exercise positive discrimination to differentiate union from non-union members and, secondly, that it had to provide a range of tangible union benefits to be enjoyed only by members while ensuring that it did not lose sight of its objective for which it was set up to accomplish - the protection of workers' rights. This led to the provision of benefits in the form of NTUC Club membership, discounts for purchases at various departmental stores, and now golf club memberships. SAFRA is approaching the problem the same way.

So, in recognising the contribution of reservists, we must never lose sight of the SAF's mission. It is to defend Singapore through the commitment of our citizens and in particular our reservist soldiers. President John F. Kennedy once said: Ask not what your country can do for you but ask what you can do for your country. In Singapore, I would put it this way: Ask what you can do for your country; but also ask what your country can do for you. The right balance of commitment and reward has to be found.

1.00 pm

Over the past few years, the SAF has increasingly undertaken humanitarian missions in countries which have asked for our assistance. For instance, a SAF medical team was in the Philippines in July 1990 to render medical assistance to casualties from a serious earthquake disaster. In August 1990, a combined Singapore and Bruneian evacuation team went on a rescue mission to Jordan to ferry Sri Lankan refugees affected by the Gulf War. And most recently, the SAF medical team was sent on a humanitarian mission to Riyadh, Saudi Arabia, to treat war casualties of all nationalities in the Gulf War. I might also add here that the Singapore Police Force also sent a team to Namibia last year to supervise the election in the country under the United Nations transitional assistance programme.

Such missions are not holiday trips for our men. They are exposed to dangers and risks of death and injury. Their lives are on the line. In view of the likelihood that we may be involved in many more such missions in the future, I would like to ask the Minister whether those sent on such missions are volunteers or are they chosen by a set of criteria. Can the SAF respond to more similar requests by nations affected by unfortunate natural disasters or national crises?

The common thread that runs through the three issues I have raised is voluntarism. It is this core value that commits one's life to the nation over one's own material well-being. Placing nation before self gives the will to fight to survive when threatened. The majority of Singaporeans understand the survival imperatives. They will have to convince the minority who mistakenly think that the responsibility to defend the nation should be done by those other than themselves. RECORD will do justice to those who care for our national survival.

Sir, my GPC members will elaborate in greater detail on these three issues I have raised.

Mr Lew Syn Pau (Tanglin): Sir, first of all, let me declare my interest as a reservist.

Last year, at the debate on the same topic in the Committee of Supply, the general sentiment among MPs who spoke was that there was not enough recognition given to reservists who sacrificed time, family life, and sometimes, career and business setbacks during the three to six weeks of reservist raining every year. In addition to the inconvenience of being away from the office during reservist training, there are other inconveniences outside the training period which they encountered, such as mobilization and the one year validity for their passports. In positive response, the then Second Minister for Defence, BG Lee Hsien, Loong, announced that MINDEF would extend the validity of their passports from one year to two years with effect from 1st June 1990, when the Immigration Department computerised immigration procedures. He also said, "If the new system works well, and reservists keep their units posted of their whereabouts when they go overseas, then MINDEF will review the passport validity to see if it can be extended further." I would like to ask the Minister how the computerised immigration procedures have fared so far, and whether MINDEF will consider extending the validity of reservists' passports to 10 years, the same as for non-reservists.

Last year, the Second Minister for Defence also announced the formation of a Committee chaired by BG George Yeo to study and recommend ways to recognise and reward the contributions of reservists. Today, the report of RECORD has been released. I would like to congratulate the Committee for a job well done. The recommendations are comprehensive, bold and innovative. In fact, much more than what I would have dared to ask as a reservist without appearing too mercenary.

I support the two underlying principles of the recommendations, that is, firstly, we must recognise the contributions of reservists in general, and recognise more those who contribute more; and secondly, in recognising reservists we should not unwitt- ingly discourage the immigration of foreign talents into Singapore. In this respect, therefore, I support the case for a slightly more favourable income tax rate of, say, 1 to 2 percentage points for citizens as opposed to non-citizens. We should emphasise that citizenship has its privileges, not just obligations of National Service.

As for the in-camp training allowance over and above the rank pay and make-up pay, personally, I do not think it is necessary, although it would be a bonus to have it. More important to the reservist than in-camp training allowance are the support of the employer and the understanding of his reservist commanders. When a reservist goes for reservist training, he worries about the outstanding work in his office and whether his boss will penalise him for any delays or other setbacks that may subsequently affect his promotion. At the same time, he worries about the transition from civilian to army green and whether his reservist commanders will make it difficult for him to make that transition. Employers and reservist commanders can make reservist training either a chore to be dreaded, or a welcome change from the office. MINDEF, therefore, should spend more resources educating employers and reservist commanders.

I am also happy to note that the Government will build a Country Club for reservists. I support the concept of term membership rather than transferable membership for active reservists. In this way, the scheme will not deny further generations of reservists access to the Club. I would like to ask the Minister when the Club will be ready for use by reservists and their families.

Dr John Chen Seow Phun (Hong Kah GRC): Sir, let me first declare that I am a reservist and also a member of the RECORD Committee which has recently submitted to MINDEF its recommendations for recognising the contribution of reservists to Total Defence.

Sir, yesterday I spoke about the need to have a preferential tax rate for citizens. This is one of the key recommendations by RECORD. I am glad to know that the Minister for Finance is now considering it and I hope to hear good news from him.

To many reservists, however, preferential tax rate for citizens represents a general and broad recognition for the role of citizens. While they welcome such a recognition, they feel that it should not stand alone and should be only the first tier of a multi-tier structure of benefits. For those who shoulder a heavier reservist burden, more recognition should be given. Otherwise, it will be difficult to motivate reservists to perform their best and take on heavier responsibilities after that.

Sir, the recommended In-Camp Training (ICT) allowance for reservists as a second-tier financial recognition should therefore be seen in this light. Many reservists will argue that the ICT allowance is even more important and meaningful and should also be given through the tax mechanism. This will send a strong and effective signal to all reservists of the public recognition accorded them for their annual contribution to the security of the nation.

Sir, the fact that the RECORD Committee existed shows that MINDEF recognises the problems reservists are facing. I therefore urge the Minister to approve this important recommendation on ICT allowance. The amount for this allowance should not be too small as to become insignificant. It should also be commensurate with the responsibility a reservist is holding. I think the existing reservist rank pay for the period of his in-camp training is a good guide for ICT allowance. Such a scheme can then be reviewed once in three to five years. If we take the existing rank pay as a guide, a private soldier will get an ICT allowance of about $100 for a 21-day ICT, and a Lieutenant, about $400. On the average, I estimate that ICT allowance will then amount to about $20 million a year. This is only about 0.5% of the budget allocation for security expenditure. I believe this amount to reasonable. The ICT allowance should not amount to only peanuts. Reservists are also not asking for cashew nuts, but at least give us big peanuts.

Mr Charles Chong (Sembawang GRC): Sir, like the two speakers before me, I would like to declare my interest as an SAF reservist.

Sir, the reduction of super-power rivalry, closer regional cooperation and the absence of any apparent security threat to Singapore may lead some Singaporeans to feel that we should ease up on our defence priorities. Such sentiments are understandable , if we do not have a clear view of the underlying trends and implications of world and regional events that could have an immediate and significant impact on us whether or not we are participants of such events. If all our reservists understood and fully appreciated the realities of the situation around us, it is likely that more would be motivated to accept the temporary inconveniences associated with reservist training without calling for more monetary rewards and more perks to accomplish the task of ensuring our own survival. The more able must accept the fact that it is likely that they would have to contribute more, just as the rich would have to pay more taxes compared to the lower income groups. They should also try not to demean their contributions by putting a price tag on it.

Sir, the SAF, being a citizens' army, is likely to have its talents dispersed through the various ranks. I understand that only 600 of each cohort of approximately 20,000 national servicemen each year are selected for officer training. Consequently, many other capable citizens who may now hold responsible civilian positions will invariably serve in the reserves classified as "Other ranks", a military term for non-officers. This has to be so and it should be accepted by all regardless of their educational qualifications or their appointments in civilian life. Because of this situation, when we promote positive discrimination, we must guard against widening the gap of perks and privileges between reservist officers and reservist "Other ranks", under the guise of providing more recognition for those who contribute more. To do so would only risk creating unnecessary tensions and resentment within the ranks. However, we must also address the problem of over-taxing reservists who are Key Appointment Holders. Giving them monetary rewards and additional privileges will not lessen the heavy burden they now carry.

The SAF should tap from its massive rank of reservists more able and talented people who can help to share the load. I am certain that there are many capable reservists, especially from the NCO ranks whose reservist responsibilities are not commensurate with their abilities. If more of these people whose potential is yet to be exploited by the SAF come forward to take on more responsibilities, then the burden for all will be lessened.

Sir, training of our reservists should also emphasise a sense of purpose in what they are doing and an awareness of possible eventualities and scenarios their training is preparing them to encounter. Only then will reservists be able to regard their training as necessary and meaningful despite the seemingly secure environment we now enjoy. 1.15 pm

I believe the SAF already has a national education course that is designed to promote awareness among our servicemen and reservists on the realities and trends that could directly impact our security and survival. However, I understand that attendance at this course has been limited mainly to officers and a small proportion of very senior NCOs. Sir, I can understand the previous thinking on why the national education course should be confined only to Senior Appointment Holders. But we must realize that the educational level of our population, and consequently that of our reservists, has risen tremendously over the years. I have been told that already more than 80% of our university graduates are reservist NCOs and below. I would therefore like to urge the Minister to extend this course, or a modified programme, if necessary, in order to cover reservists of all ranks.

MINDEF should also constantly upgrade and adapt its training programme in order to suit our increasingly better educated soldiers. The number of dry runs and repetitions of non-complex manoeuvres during reservist training often makes one wonder if the ordinary soldier is ever credited with any degree of intelligence. Enthusiastic reservists who perceive that their intelligence is called into question by the training programme often develop very negative attitudes towards their training.

Sir, I am aware that MINDEF has been very innovative over the years in raising productivity and efficiency in reservist training in order to ensure that the time spent in in-camp training is not wasted. I am able to contrast the full day it took for me to be fully equipped during my first in-camp training many years ago to the mere two hours for the complete in-processing to be accomplished during my in-camp training last year. However, there are still areas that can be improved.

I would like to stress that in attempting to be more productive, we should never compromise quality by taking short cuts or attempting to force too much training into too short a time.

An area I would like to see very much improved is the shooting sessions at the ranges. A range exercise normally involves only a total of 15 to 20 minutes firing time and many hours of travelling time and waiting for your turn to shoot. Perhaps MINDEF should look into the use of suitable range simulators that could be installed in every camp.

I would also like to see the number of routine reportings that reservists have to endure reduced to an absolute minimum. Many a time these routine reportings involve only the receiving of a notice of the next in-camp training or the updating of personal particulars. This task can and should be accomplished by mail, fax, or telephone. Requiring reservist to report in person is not only inconvenient for the reservist but it is also unfair to his employer who has to release him from work for a non-essential purpose.

Finally, Sir, I am aware that there are de-briefing sessions at the end of every in-camp training. Feedback from these sessions are supposed to be collected, evaluated, and follow-up action initiated. However, some reservist commanders have complained that they seem to be raising the same issues at the end of every in-camp training and are beginning to question whether any follow-up action is ever taken on the feedback. MINDEF could perhaps look into ways of providing information on the follow-up action to those that have highlighted the deficiencies. In this way, we can encourage more to provide suggestions and feedback so that the system, massive as it is, can be constantly refined and improved.

The Chairman: I would like to inform the House that Backbenchers have used up all the time I have allotted to them for discussion of this amendment. Mr Chew, could you be brief?

Mr Chew Heng Ching (Eunos GRC): Mr Chairman, Sir, the SAF Scholarship, like the President's Scholarship, is among the most prestigious scholarships awarded by the Government. SAF scholars are specially selected based on their academic results, leadership qualities and participation in ECA. These scholars are specially groomed for leadership position in our Armed Forces.

Sir, in recent years, we have seen a brain drain of the SAF scholars to the private sector while a few have opted to join the Administrative Service or statutory boards. My concern, Sir, is the loss to the SAF with the resignation of these SAF scholars. This will affect the morale of our regular soldiers. It will be a waste of state money training and grooming these scholars to assume leadership position in the SAF, only to find that they are not interested in a military career when their bond expires and they resign to join the private sector.

My question to the Minister is what is MINDEF doing to try to arrest the brain drain of SAF scholars.

Dr Lau Teik Soon (Serangoon Gardens): Sir, recently, Singaporeans watched the extensive coverage of the Gulf War. We saw first hand the sufferings of the Kuwaiti people, the destruction of buildings, and overall damage caused to the country by the occupation of the country by the Iraqis.

Sir, I do not think we want to have such sufferings, devastation and foreign occupation. As the Chairman of the GPC has just stated, we need to learn lessons from the Gulf War, and he has stated some very important lessons that we need to learn. I would just like to add some more lessons, particularly those relating to regional defence arrangements.

The first lesson is that a country must have a strong defence system. Do we have it? Sir, our total defence strategy, our efficient and capable Armed Forces, our strong commitment to reservist training, all assure us that our defence will be strong, alert, and capable of meeting any contingency.

The second lesson is a country must have some kind of security arrangements with its neighbours in the region. Sir, would Iraq have invaded Kuwait if Kuwait had been a member of a regional defence arrangement? And would Iraq invade Kuwait if it had been a member of such a regional security arrangement? Whatever the answer is, now we can see that the Gulf states, together with Syria and Iraq, have come together to form a defence pact. My question is: Will Singapore consider some kind of security arrangement with our neighbours? We have very good security cooperation with our neighbours on a bilateral basis, especially between us and Indonesia, and between us and Malaysia. We of course have very good cooperation with Malaysia in the context of the Five-Power Defence Arrangement (FPDA). But beyond the bilateral cooperation and the FPDA, is it not timely to consider some kind of multilateral security arrangement among ASEAN neighbours?

The third lesson, Sir, is that there must be a balance of power in the region. Iraq was a dominant military power and there was no deterrence or countervailing force against it. In any balance of power, the role of the major powers, especially the United States, would be crucial. Hence, I think we should continue to encourage the United States to continue its military presence in the region. The provision of certain facilities to the US military naval and air forces contributes to that objective. Further, we should do whatever we can to encourage both the United States and the Philippines to come to a mutual satisfactory agreement to extend the military bases agreement.

The fourth lesson is that the United Nations, especially the Security Council, must play a key role in deterring aggression. In the Gulf War, if the Security Council had not taken such a united stand against Iraq, the war would not have ended the way it did. In this connection, Sir, I would like to congratulate the SAF for contributing to the multi-national force, although it was just a small medical team. By the way, I understand that the medical team returns today. I would like to say a big "thank you" to the military officers and to say how proud we are of them for their courage and for their dedication in the service of their country. Their presence reflects our strong commitment to the UN's efforts to resolve the conflict. We should look for more opportunities to contribute to this kind of effort.

Mr Chiam See Tong (Potong Pasir): Sir, can I clarify one point?

The Chairman: Mr Chiam, the Minister will give his reply first.

The Second Minister for Defence (Dr Yeo Ning Hong): Sir, I want to thank the Chairman and Members of the GPC on Foreign Affairs and Defence for their comments and for their concern for the welfare of the reservists.

Sir, I share their emphasis of the importance of defence and of the important roles played by our reservists. I would like also to place on record MINDEF's gratitude to the Chairman and committee members of RECORD for having done a marvellous job. They spent about a year brainstorming, consulting with other reservists, before they came up with the list of recommendations which are wide-ranging and thoughtful. Sir, the appointment of the RECORD Committee last year reflects the Government's commitment and encouragement of greater participation, and we would like to see more examples of such committees at work.

Sir, I want also to mention that over the years MINDEF has been implementing many policies to recognise the contributions of reservists and to help them better carry out their duties. RECORD's contribution on this specific occasion is most welcomed because it fits with this on-going effort.

Sir, some of the proposals put up by RECORD are fairly straightforward. These MINDEF intends to implement in the immediate future over the next few months. These proposals include the increased recognition for those who are in command appointments. MINDEF is currently looking at providing a special reservist command allowance in addition to that which has already been given to Key Appointment Holders.

MINDEF will also increase the circulation of periodicals to reservists. We have already started with the Pioneer magazine. We will look at other possibilities, including two other publications, namely, the Pointer and NewsPoint, to see if these could be circulated to the relevant reservists.

Appeals Board - another proposal put up by the RECORD Committee - MINDEF supports this proposal. We are currently looking at names of possible candidates to sit on this Appeals Board to give advice to the Minister in ensuring that our reservists are adequately compensated. 1.30 pm

Another proposal was for greater public recognition for reservists by appointing them to specific positions either in statutory boards or in Government-owned companies. This we intend to do. This would be in addition to what we are already doing, namely, the appointment of Senior Reservist Officers as Honorary Aide-de-Camp or ADCs to His Excellency, the President of Singapore. There are other administrative measures recommended by RECORD such as unbundling individual training from unit training so that the burden on reservists can be reduced. That is a good proposal. MINDEF has done some work already in that direction. At the moment, reservists come in for separate individual training and then later on for a longer period of up to ten days in unit training to ensure that there is unit cohesion and esprit de corps.

Sir, the other recommendations of RECORD will require a little more time. I want to mention briefly two other points made by RECORD because I believe there is a lot of public interest and three Members have earlier spoken on these subjects, ie, the preferential tax rate for citizens and also some token in-camp training allowance. Sir, RECORD has correctly pointed out, and as has been indicated by the Members earlier on, that in approaching this subject of a token allowance for reservists, we should be careful in order that we do not in any way diminish the status of the very important duty that Singaporeans have to bear, namely, to look after Singapore in their role as reservists.

Sir, RECORD has recommended that the tax rate should not be too wide and that the in-camp training allowance should be a token. Otherwise, we develop a mercenary flavour as a result of this recommendation. MINDEF is currently working together with the Ministry of Finance to look at these recommendations and to work out token incentives in such a manner that we would be able to make these token incentives in the spirit in which they have been recommended.

Sir, another proposal is for the development of the SAFRA Golf and Country Club for reservists. The concept plan for this Club is now in the final stages. The Government has allocated SAFRA a piece of land next to the Tanah Merah Garden Course. The land will be adequate for a 27-hole course. I have looked at the plans and I think the golf course is going to be very attractive. There are quite a number of beautiful holes, with landscaped lakes, that should present a challenge to many reservist golfers. But not all reservists are gol- fers. We have to look after those who are not. We intend to have a large clubhouse, providing all the facilities that have proven to be popular in our three other SAFRA clubhouses, so that non-golfers, together with their families, can enjoy the scenery of the golf course on one side and the sea on the other.

Sir, I have asked the Management Committee of SAFRA to look into ways of keeping the cost of membership of this SAFRA club as low as possible, and also to work out mechanisms such that we are able to allow as many of our reservists to enjoy our facilities. Of course, those who contribute more should enjoy more privileges too.

Sir, the well-being of our reservists and their welfare is always foremost in MINDEF's mind because, in the SAF, the reservists make up 80% of our front-line soldiers. Therefore, all MINDEF policies and practices take their welfare and well-being into account. Sir, because of shortage of time, I intend to ask the Clerk of Parliament to circulate a list (Cols. 487 - 488) of some of the policies that we have at MINDEF, ie, policies that recognise the contributions of reservists and help make them more effective soldiers. list - EXAMPLES OF SCHEMES/POLICIES INITIATED BY MINDEF TO RECOGNISE AND ASSIST RESERVISTS OVER THE YEARS (Cols. 487 - 488)

Sir, RECORD's contributions on this occasion will dovetail with all that we have been doing and will add to the continuing efforts of MINDEF to do what is best for reservists without in any way compromising on our defence.

Sir, I now move on to deal with some of the procedural items raised by Members in their speeches. The Chairman, Mr Ng, asked about the criteria for selecting the medical team that went to the Gulf. Sir, we have a system where we encourage our regulars to undertake such missions and, as a general rule, the criterion selects the people who can best perform the mission in question. For national servicemen and for reservists, we invite volunteers from people who will have that ability, people with the correct skills and vocations who can make a contribution. And out of the volunteers we then apply again the criterion to select the best.

Mr Charles Chong asked about the possibility of national education for all reservists. It is a good suggestion. The only problem is the number of reservists. We have approximately 200,000. It takes a fairly long time to conduct seminars for such a large number. I would ask MINDEF to consider the possibility of using videos so that a much larger number of reservists can be reached. We can also consider the possibility of Singapore Broadcasting Corporation Enterprises putting together a film and airing it over SBC. The idea of reaching out to all our reservists is a good one.

Mr Chong also mentioned the problems of repetition in some of the training courses. To a certain extent, repetition is inevitable because skills that are not practised tend to diminish. Therefore when the reservists come back the skills have got to be refreshed. What is also important to remember is that reservists should learn the skills until the skills are almost a reflex. To illustrate: if you want to have an athlete run the 100 metres in 11 seconds, you require a lot more practice, a lot more repetition than if you require him to run that same distance in 15 seconds. We want that sharp edge and therefore some repetition is important.

Difficulties at rifle ranges - we will look into the matter. We will try wherever possible to streamline the process but again some delay is inevitable because of limited facilities. Singapore has limited land and, therefore, limited rifle ranges are available because ranges take up a lot of land.

Routine reporting - we will reduce this to a minimum. I believe we have already reduced this to a minimum. If the Member can bring me specific examples where time is wasted for no specific purpose, I will ensure that this is addressed and remedied.

Sir, Mr Chew Heng Ching has spoken of his concern for the SAF scholarship scheme and asked whether there is a brain drain of SAF scholars. Sir, I want to assure him that there is no brain drain from the SAF scholarship scheme. The gradual, systematic departure of the SAF scholars from the SAF is something that we have planned for. I am sure Members know that SAF has lost two very good officers to this House. The SAF's loss obviously is the nation's gain.

Sir, so far, the SAF scholarship scheme has worked well. The scheme, if I could refresh Members' memory, is to groom a significant number of able Singaporeans for dynamic leadership in senior command and staff appointments in the SAF. So we reach out to get those with excellent scholastic performance as well as high officer quality to join the SAF. Then we send them to some of the best universities overseas. These people, Sir, represent our national resource and MINDEF has no desire whatsoever to hoard this very valuable resource and not sharing it with the rest of the nation.

What is important is that enough SAF scholars, particularly those that are among the best, should be retained in the SAF long enough for them to acquire the experience of command and to be able to assume the key top positions, in due course. To make it attractive for these officers, at the appropriate point, these officers are invited to go for further education in areas of relevance to their future posting at universities such as Harvard, Stanford and other top universities. Other officers are also sent to prestigious defence colleges to give them valuable experience and interaction with senior officers in other countries.

Sir, out of the 64 scholars who have completed their 8 years of bond with the SAF, 28 of them are still with us. Indeed, we have officers with us from every batch (from the first SAF scholarship in 1971). So I want to assure the House, together with Mr Chew, that the programme is working very well. Our experience is that the rate at which the officers are leaving us is very satisfactory. The officers who leave us go to other appointments in Singapore. About two-thirds of them have gone to Government Ministries and statutory boards. And about a third have gone to the private sector. Regardless of where they go, their performance and success reflect well on the SAF. They reflect well on the experience and exposure that we have given them. And, Sir, here I am happy to note that many of the former SAF scholars have moved up very smartly in both the private as well as the public sectors. They have assumed positions of senior responsibilities, testifying to the success of the SAF scholarship scheme.

Sir, I turn now to respond very brief to Dr Lau Teik Soon. Regional Security is a very big subject. I intend to go through it very briefly to discuss hoe regional and global security impinges on Singapore. Sir, over the last two years, the world has seen tremendous changes of historic proportion, the most important of which I believe is the total collapse of communism, symbolically marked by the collapse of the Berlin Wall. With the end of the Cold War, many thought that a period of global tranquillity will descend upon us, and there would be spectacular economic growth arising from the so-called peace dividend. Peace and prosperity is supposed to be the norm from now on. Sir, such beliefs, were rudely shattered last year in August when Iraq invaded Kuwait. Such blissful dreams turned out to be completely untrue. The Iraqi invasion of Kuwait reminds us and the rest of the world that countries still resort to naked aggression to further their own territorial ambitions or to redress imagined grievances. We should be under no illusion that the world will be a much safer place just because Communism has collapsed. For our region, we have to temper our optimistic outlook for the future with a measure of realistic caution. The end of the cold war may have brought some measure of relaxation of tension for Western Europe, but for South East Asia there are still unresolved border disputes. There are still conflicting claims, particulary over areas potentially rich in mineral resources, such as the Spratleys and the islands in the vicinity. The situation in Kampuchea is still unresolved, and awaits some satisfactory resolution that will ensure a stable government with appropriate representations from all parties concerned. 1.45 pm

Sir, for us in Singapore, the fundamental consideration for security will always be the same. Small countries like us are destined to take our defence seriously at all times. We cannot afford to relax. We cannot afford to let our guard down even when the world is euphoric about peace. The alternative is to go the way of Kuwait, to risk being destroyed in a matter of hours. Put very simply, the defence doctrine of Singapore is to achieve peace through being strong and friendly at all times. We have to be strong in defence, and friendly in diplomacy.

Sir, the Gulf War demonstrates the importance of both strength and friendliness. Kuwait was weak. She did not have the ability to defend itself and so was overrun by Iraq in less than seven hours. Kuwait may have thought that friendliness itself together with very generous foreign aid would be enough to deter aggressors. Their defence policy failed and failed miserably. The result is a country devastated and a people brutalised, raped and slaughtered.

Our two-pronged defence policy has served us well over the past 25 years. First, Singapore must be strong. Singapore must be able to resist aggression at all times. This is fundamental. A strong SAF with committed and dedicated reservist officers and men is the foundation of our security policy.

The Chairman: Dr Yeo, we need time for the other amendments.

Dr Yeo Ning Hong: Sir, I will go through very quickly just two more points.

We have to involve all citizens in total defence because our population is small and every individual Singaporean must play his part in defence.

As for close cooperation with our neighbouring countries and ASEAN, we have many areas of cooperation and joint exercises that we are carrying out regularly with our neighbours, we put our friendliness into practice through regular land, sea and air exercises with our ASEAN neighbours.

The Chairman: I would like to urge Members to stick within the times that I have allocated. Otherwise I will have to exercise the guillotine very often. We may have saved some time on the previous Head, but the time saved could be used for the tea break, so that we need not eat into the times of the other Ministries that are coming up. Mr Ng, would you like to withdraw your amendment?

Mr Ng Pock Too: Sir, I thank the Minister for his comprehensive answers and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), Encik Wan Hussin.

Encik Wan Hussin bin Hj Zoohri (Aljunied GRC): Sir, I beg to move,

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

Sir, the training of our national servicemen requires adequate training areas. In this land scarce island of ours, there are competing demands for the use of this precious land. Land is needed to build public houses and for other economic developments. Inadequate and unsuitable training areas can affect the quality of our military training. We also need training areas which do not cause any public inconvenience. Related to this are our training facilities in friendly countries overseas. May I ask the Minister how his Ministry is addressing this problem? What steps are being taken to identify new training areas locally and overseas? To make up for certain types of training, how does the SAF go about improving the use of simulators? Sir, what should be uppermost in our mind is that the combat readiness and effectiveness of our national servicemen should not be compromised.

The other aspect which is tied to the training of our national servicemen is the question of safety. Occasionally, we hear reports of accidents involving our national servicemen. Some of these accidents were fatal. Our national servicemen are our precious assets. We cannot afford to lose them prematurely. Can the Minister enlighten this House on the number of accidents that occurred during military training for the past few years? I hope the Minister will also assure this House that adequate safety measures are being taken to prevent similar accidents from happening?

Sir, I would now like to focus my attention on an emerging trend amongst our national servicemen. This is the question of obesity. We read reports of a growing number of young children in primary schools who are obese. This problem is now affecting some of our youths who are enlisted for national service. May I ask again of the Minister whether this trend is on the increase? What remedial steps are being taken to redress this? I hope this area of concern will not be targeted only at the first-time enlistees but also at many of our reservists who have over the years shown remarkable change in their physical contours.

Mr Chiam See Tong (Potong Pasir): Sir, before I go on with my speech, I would like the Member for Serangoon Gardens to clarify one point.

The Chairman: Mr Chiam, we have already disposed of that amendment. Could you please get on with your speech?

Mr Chiam See Tong: All right. I will get on with my speech then.

Sir, I have called for the reduction of full-time national service (NS) since 1987. I am making this same plea to the Minister again. My view is that for the majority of our NS boys, there is no need to spend so much time on their first instance military training. In Switzerland and Germany, full-time national service periods are 19 weeks and 1 1/2 years respectively. For many years, German male youths need only to do nine months in full-time national service. A few years back, they extended the period to 1 1/2 years, but it is still a much shorter period than ours. Switzerland, a country which is so intent on national security, can manage with 19 weeks of full-time national service period.

Sir, at this point, I would like to make it clear that I am not for a moment advocating that we do away with national service or for not building a credible defence force. National security must always be on the top of our list of national priorities. But there are merits for a call for the reduction of full-time national service for the majority of our male youth citizens. There may be some NS intakes who may need to spend more time in full-time national service if they man the more sophisticated weapons. It is perhaps justified for them to spend a little bit more time, if it is needed to train them to use modern, complicated and sophisticated weapons. The Gulf War has illustrated quite clearly that future wars have to be high-tech wars. But for the majority, if they are only to be infantry soldiers, there is no real need to spend up to 2 1/2 years for full-time training. A shorter full-time NS period will definitely help our male youths in both their higher studies and in their job careers. Many male youths have complained that their female classmates have a two-year headstart on them in the university. Their female classmates graduate earlier. They start work earlier. They also get income earlier and they are more senior in their jobs. A shorter full-time NS period can mitigate this situation. Some of the school leavers need to help their family immediately and they are required to start work perhaps to supplement the family income to help their sick parents or their brothers and sisters who may still be in school.

One of our major economic problems in Singapore today is the acute shortage of workers. There is therefore a crying economic need to release may of our male youths into the labour market rather than tie them up doing longer full-time NS than is necessary. In the early days when national service was first introduced, there was perhaps justification in rounding up all our male youths to make them do lengthy periods of NS training. There was mass unemployment at that time. Therefore, national service was a good means to keep male youths off the streets. If not, they would surely create social problems.

Times have changed. There is full employment today. Our economy is kept going by massive imports of foreign workers. Therefore, it does not make sense to keep our male youths off the labour market at great cost to our nation. Two hon. Members last year pointed out that we are in fact spending more than 6% of GNP on our defence. The country has to spend more than that if we take into account the great number of foreign workers we have to import to take the place of our male youths who could have entered the labour market if not for the necessity to do full-time national service for longer periods.

The Chairman: Mr Chiam, could I ask you to speed up because we are approaching the guillotine time and we still have another amendment.

Mr Chiam See Tong: Yes, Sir. There is a good case for shortening the full-time national service training period and I urge the Minister to look into this seriously, perhaps with the SAF think-tank boys. 2.00 pm

Dr Lee Siew-Choh (Non-Constituency Member): Sir, defence expenditure has increased by leaps and bounds over the last 10 to 15 years. I need not give you the figures. But there is a great disproportionate expenditure on defence today as against all the other expenditures. The sum provided for Defence alone covers more than that for Education, Health, Community Development, Information and the Arts all put together. Apart from the expenditure on manpower, quite a big sum is also meant for the purchase of overseas equipment. All such increases will continue year after year if Singapore continues with its overseas purchases. And what do we purchase? Equipment which is largely obsolescent, and which after a few years at most becomes totally obsolete.

There is great emphasis on high-tech equipment these days. Speakers have mentioned this before me. But high-tech also becomes comparatively low-tech after some time. And they all get out of date with time. So excessive spending on defence ultimately leads to considerable wastage of funds which could be much better spent on improving the welfare of the people.

It is not necessary to arm ourselves to the teeth. In South-east Asia, we are surrounded by friends. We have bilateral exercises with Indonesia and Malaysia. We still have the Five-Power Defence Arrangement. We also have US troops stationed in Singapore. And we carry out bilateral air-defence exercises with them. What need then is there to spend such huge sums on defence?

It must not be forgotten that our purchase of high-tech equipment will encourage others to do the same. This leads to an arms race which ultimately benefits no one but the arms merchants themselves.

Mr Chiam has mentioned national service. May I ask: Would a reduction in the time, spent for national service to a shorter period help to reduce defence expenditure? Has Government formed a Committee to look into the defence expenditure, as I advocated not so very long ago, and to make recommendations as to how we could cut down defence expenditure? So if the Government should look into this, maybe that would help.

A little while ago some speakers said something about stability, security arrangement with the neighbours and high-tech. What I would like to say is that for a small country like Singapore, whatever defence we put up will not be of great use against a big power like the United States, or any big power that has more equipment and a bigger army. We may have high-tech, other people may also have high-tech. We may have a strong army, other countries may have a stronger army. So the real lesson, Sir, for us is not so much to have high-tech, or a bigger, stronger army, as to be truly non-aligned. We must have foreign relations based on mutual respect, mutual advantage, non-interference.

The Chairman: Dr Lee, would you allow some time for the Minister to reply.

Dr Lee Siew-Choh: Yes, I will allow. Thank you very much. I have much more to say, but never mind, we will give the Minister a chance.

The Senior Minister of State for Defence (Dr Lee Boon Yang): Sir, let me first take up the point raised by Encik Wan Hussin about training areas for the Singapore Armed Forces.

Sir, in order to achieve the required level of preparedness, the SAF has to maintain a standing army, air force and navy. SAF is a citizens' defence force, and therefore there will always be recruits to be trained. There will always be company, battalion or brigade level exercises for active servicemen. We have to conduct manoeuvring exercises involving troops, artillery and tanks. We also have to prepare our soldiers for battle, in which case they have to be subjected to live firing exercises before which they must train to use their rifles at rifle ranges. For all these exercises and the housing of the standing forces, SAF needs land.

Over the last 15 years, SAF has grown from a 35,000 to 250,000 troop strength armed force. But SAF is not the only growth area in Singapore. The economy also grew. Land has to be set aside and developed for industry, port, airport and other economic uses. The population also grew. HDB had built many new towns and housing estates in the last 15 years. More roads have to be built for areas that have been newly developed. The net result is that while the SAF's need for training areas has increased, the land area for SAF training has actually shrunk considerably over the years. 15 years ago SAF had 206 square kilometres of land to train in. Today, it has only 98 square kilometres.

The SAF has been able to achieve this apparent miracle of doing more with less land by adopting several measures. Camps are built to a higher plot ratio; where possible they are co-located and designed to share certain common facilities. Training facilities are more intensively developed. Rifle ranges are now provided with buffers so that the land surrounding the rifle ranges which used to be sterilised can now be released for other military training, or even released to the private sector for alternative uses. Despite all these measures, the SAF is still short of training areas. So training has to go on during the weekend to make better utilisation of available areas and facilities. Sometimes SAF even have to train in areas that are not normally used for such training purposes. In which case, we will try to minimise any inconvenience caused to members of the public.

We face the same constraints with our air space. We have very limited air space. So we have to sometimes fly over built-up areas. We may create some noise nuisance to the residents. Let me assure Members of this House that we would try to minimise such a situation. We will try to minimise flying over built-up areas and we will take all safety precautions necessary to ensure the safety of the residents living in these areas.

We will also use more computer simulations, computerised war gaming, in order to reduce the need for actual training on the ground. But whatever we do, we will still not be able to meet the total training needs of the SAF. We will still need to have training facilities overseas in friendly countries. Here, I must say we are very fortunate that we still have several friendly countries who allow our troops to be trained on their territory.

The Member also asked whether there is an increasing obesity among SAF enlistees. Yes, there is a rising trend among new enlistees coming into the SAF each year. Over the six-year period from 1984 to 1989, the number of these enlistees has doubled from 5.9% to 10.4%. At this rate, 14 out of every 100 enlistees will be obese by 1995. This is a conservative estimate. Because among the 1988 Primary 6 male students, who will form the 1995 NS cohort, nearly 18 out of 100 are obese today. Fortunately, among full-time national servicemen, downgrading due to obesity is minimal. NS men are able to keep fit during their service period. However, for reservists, there is a rising trend of downgrading due to obesity.

In order to tackle this problem, SAF has in January 1991 introduced a 5-month basic military training (BMT) course for obese enlistees. Obesity is not a disease, nor is it permanent. In most cases, it can be reversed with some effort and discipline. The 5-month BMT course enables these obese enlistees to shed excessive kilograms. They get a more progressive physical training programme. This will minimise training injuries without compromising combat training standards. A total of 197 recruits are currently undergoing the first 5-month BMT. From initial feedback, the progress of the course is good. I am told that the recruits are quite pleased with their battle of the bulge. In the case of servicemen who fail their IPPT, they must join their units' fitness programme. For reservists who fail their IPPT, they will be recommended to voluntary SAFRA-based fitness programme by their commanding officers. I would like to add here that every male Singaporean of NS age has a duty to maintain his physical fitness. SAF will help by providing facilities and fitness programme for NS men and reservists.

Sir, Encik Wan Hussin also asked ---

The Chairman: It is guillotine time, Dr Lee. I am sorry. Encik Wan Hussin, would you like to withdraw your amendment?

Encik Wan Hussin bin Haji Zoohri: I have no alternative, Sir, but to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $3,425,000,000 for Head K ordered to stand part of the Main Estimates.

The sum of $275,000,000 for Head K ordered to stand part of the Development Estimates.

Head W -

Mr S. Chandra Das (Cheng San GRC): Sir, I

beg to move,

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

Sir, I have three amendments. I intend to take all the three together.

The GPC (Finance, Trade and Industry) notes with satisfaction the progress made so far on the subject of the "growth triangle". The concept when it was first mooted by Prime Minister Goh Chok Tong now has the fullest support of the Governments of Malaysia and Indonesia. I would like to ask the Minister the following questions:

Firstly, how much money has the Singapore Government directly invested in this project? Secondly, Sir, are operational problems faced by Singapore businessmen being solved quickly as a result of this cooperation in the growth triangle? For example, Sir, congestion at Johor Baru Customs. I am also told by businessmen that there are insufficient lorry bays and also the limited hours of operation of the Johor customs. Can these problem areas be alleviated very quickly as a result of the cooperation through this growth triangle?

I also want to ask the Government whether it has plans for allowing the training of workers from Batam and Johor in Singapore to be made much easier.

Sir, on my second amendment regarding maintaining the competitive edge, I would like to state that there are four key concerns of business generally in Singapore. Firstly, Sir, is the rising cost of business. Secondly, we have to contend with intense competition. Thirdly, there is the appreciating Singapore dollar vis-a-vis the neighbouring countries. Fourthly, and more importantly, the question of shortage of labour.

For the first nine months of 1990, unit business cost rose by 7.6%, unit labour cost rose by 8.5%, service charges rose by 6.5% and Government indirect taxes and fees increased by 11.4%. These figures were obtained from a survey conducted by the Singapore Manufacturers Association in December 1990. Sir, having listed out the above problems, I would like to touch on two specific items. These are the two controllable elements in the question of cost. Firstly, there is the question of the labour cost; and secondly, there is the question of land rental. Sir, as far as labour is concerned, it is Singapore's key resource, and a scarce one at the same time. To rectify shortage, the Government has allowed employers to hire foreign workers. Here, I have to declare my interest. The company I am involved with employs foreign workers. This policy has enabled the economy to achieve the GDP growth above 6%. I think it is time for the Government now to review the current foreign worker policy. Feedback received indicates that there are certain rigidities in the present system.

Firstly, the current dependency ceiling of 40% is somewhat rigid. Companies occasionally need to breach this limit to cater for surges in business conditions, but this they cannot do under the present system, even if they are willing to pay additional fees for this privilege. 2.15 pm

Secondly, Sir, the present levy payment over the two-year period of work permit can be made more certain. At present, the levy is subject to regular revisions. Employers would like to see more certainty in payment of this levy.

Sir, to overcome these problems, the Government may wish to consider introducing what I call a two-tier system. The levy for the first tier could be as at present, while that for the second tier could be at a premium. Companies which require more foreign workers can then employ them as they are willing to pay the additional premium. Again, to overcome the uncertainty of levy changes, employers should be given the option to pay a fixed levy for every two-year period, rather than wait for off-budget announcements of increases in levy.

I hope, Sir, the Government can consider the above suggestions.

The next question refers to land rental. Land rental has been increasing steadily over the last few years. Land rental constitutes about 8.3% of controllable cost of production. As such, Sir, I believe there is some need to control this increase. Here it may be worthwhile to point out that the industrial land is largely controlled in Singapore by Jurong Town Corporation (JTC). Maybe it is appropriate for Government at this stage to allow the private sector to get involved in the development of industrial land in Singapore. It may be feasible for Government to parcel out industrial land to private sector companies, as it does to JTC. This, apart from providing competition to JTC, could also eliminate the perennial problem of pricing.

Sir, now I turn to my third amendment which relates to the Gulf War. Now that the Gulf War has ended, I believe there will be opportunities for new businesses in the region. It is an opportunity, I believe, that we in Singapore should take advantage. I would like to ask the Minister whether there are any plans by the Government, particularly by the Trade Development Board, to assist Singapore companies to take advantage of the situation. Sir, I am raising this because Government support and assistance is vital for Singapore companies to get a piece of the action.

Mr Chew Heng Ching: Mr Chairman, Sir, I have two cuts. Can I take them together?

The Chairman: Yes.

Mr Chew Heng Ching: Sir, labour shortage is a constraint to economic growth. While we have in place long term solutions to overcome this constraint, for example, greater automation, promotion of higher value-added industries, the growth triangle, and so on, we are faced with a very tight labour market situation in the short term. As long as there is a continuing demand for our goods and services, this tight labour market will drive wages up.

Sir, I believe the best short term measure is still to liberalise our foreign worker policy. Currently, the main mechanisms used to regulate foreign workers are the foreign workers levy and the dependency ceiling which places a limit on the number of foreign workers that each company could employ. The levy is $250 for foreign maid, $300 for the manufacturing and services sectors, $250 for skilled workers in the construction industry, $350 for unskilled workers in the construction industry, and $350 for workers in the shipyard industry. The dependency ceiling is generally 40% for manufacturing sector and 20% for the services sector.

Sir, the whole mechanism appears very complex. Mr Chandra Das has proposed a two-tier system as an alternative. I am suggesting a simplified multi-tier system as an alternative to be applicable across all economic sectors based on the following example:

$250 levy for dependency ceiling up to 25%;

$300 levy for dependency ceiling between 25% and 30%;

$350 levy for dependency ceiling between 30% and 35%; and

$400 levy for dependency ceiling between 35% and 40%.

So the minimum levy is $250 and the maximum dependency ceiling is 40%.

I hope the Government will consider these suggestions.

I move on to the next cut. This is with regard to the strength of the Singapore dollar.

Sir, in 1990, the Singapore dollar appreciated against all major currencies except the Deutschemark and the Pound Sterling. The Singapore dollar appreciated by 8.6% against the US dollar and 2.4% against the Yen. The Singapore dollar also appreciated against Asian currencies, strengthening by 8-9% against both the Hongkong dollar and the Malaysian Ringgit, and 12-15% against the Korean Won, the Taiwan dollar and the Indonesian Rupiah.

Sir, I am aware that a strong Singapore dollar has its merits. It guards against imported inflation. In terms of economic management, we have done very well in controlling inflation. On the other hand, by keeping our Singapore dollar strong, it affects our international competitiveness. There is a need for a trade-off.

Already the rapid increase in the cost of doing business is a cause for concern. Further strengthening of the Singapore dollar may worsen the situation. And if we lose our international competitiveness, the external demand for our goods and services will drop, affecting economic growth.

I would like to ask the Minister if he shares the same concern about the current strength of the Singapore dollar affecting our economic growth and, if so, whether the Government will do anything to try to check further appreciation of the Singapore dollar.

Mr Philip Tan Tee Yong (Paya Lebar): Sir, local companies have been urged to upgrade very frequently - a call made by Government officials and Ministers. The local companies face financial problems and to some extent these have been helped by the various incentives given by the Government. But the fact is that these incentives come from various statutory boards - the TDB, the Enterprise Development Division, FPC, NPB, NCB, and so on. For a local company to get incentives, sometimes you have to go through and sort out which statutory board you have to go to get the respective incentives. I think it will be very helpful to local businessmen to have a one-stop centre for all these incentives so that he need not go through so many areas to look for incentives. I hope the Minister will consider looking into having a one-stop centre for these incentives.

The local companies have been urged to upgrade, but there are also other problems in addition to financial problems. There could be peculiar needs of each industry. For instance, in engineering, labour shortage could be a very big problem. In the fashion industry, a display-cum-exhibition centre could be of great help to them. So you will see that each industry has its own peculiar needs in addition to the financial needs they have. I would ask the Minister to consider a study of each individual industry to see what are their peculiar needs, so that they can be addressed, in addition to the financial incentive.

Sir, the third area that local companies have problem in when they upgrade is that Singapore is a small domestic market. There are a lot of Government-owned companies and these companies have made the market even smaller. I think more Government-owned companies will be formed in the future. There is already on the table an amendment to allow NPB to go into commercial activities by incorporating commercial outfits. Sir, this will also further hamper the local companies in upgrading themselves because they need very much the revenue from businesses that they can obtain in Singapore. I would like to urge the Minister to consider asking Government-owned companies to concentrate on businesses outside Singapore, so that they could really pave the way for local companies to go to these countries.

Sir, local companies have also been urged to go overseas. It is nice to hear the advice, but going overseas is a very, very difficult effort. It is not only expensive but also we do not know how to go about it, especially we are so used to the small nature in Singapore when we do business, and the style of doing business is also very different from overseas. I think one way is to offer attractive incentives for local companies to join forces. I personally believe that size is of great importance here. Unless and until the companies here have a certain size to go overseas, it is really an impossible venture. Another way is to really ask the Government-owned companies to join forces with local companies to go on overseas contract. This is easier in the sense that the Government-owned companies could make use of local companies as either sub-contractors or go into joint venture with them on big projects in the overseas market. I personally believe that going overseas is one of the most important things that our local companies must take upon themselves in order to survive in this part of the world.

The Minister of State for Trade and Industry (Mr Mah Bow Tan): Sir, I would like to just deal with the comments made by the Member for Paya Lebar, Mr Philip Tan, regarding local companies.

His sentiments regarding local companies are shared by Government in the sense that they do have an urgent need to upgrade. At the same time, Government has in place quite a few incentives to encourage and to promote such upgrading programmes. But I do not quite agree with him that they face a difficulty in the multitude of agencies which offer such incentives. I think it is much more preferable for as many agencies as possible to offer different kinds of incentives to help local companies. But the point is taken that where there is a possibility of confusion or difficulty for local companies to avail themselves of these incentives, then we should try and minimize such confusion. It is for this reason that he may be aware that the Government has set up within the EDB a Division known as the Enterprise Development Division (EDD) which is supposed to serve as a one-stop centre for local businesses, both small and large. The officers in the EDD are well familiar with all the incentives, the whole plethora of incentives that are available and have got excellent contacts with all the agencies that offer such incentives. So there is already available such a one-stop centre which the Member has suggested. If there are any difficulties encountered, I would be very happy to receive any further suggestions as to how we can improve the work of the EDD. 2.30 pm

He has also quite rightly pointed out that different industries require different solutions to the problems. They have different needs. Again the Economic Development Board has, within its organisation, specific industry officers who have available to them the various contacts within each particular industry and who also have years of experience in their own particular industry. In actual fact, they are specialists in these industries. Again, the reason for doing so is, as the Member has mentioned, to concentrate on specific problem areas within specific industry groupings.

The other comment that the Member has made is a point that he has raised before and this is the question of Government-owned companies competing with local companies. So long as these local companies compete fairly with the other local companies, I do not see any reason for them to restrict themselves to just one part of the market and leave the other part of the market. Such segmentation is not really done in the business world, as he is very well aware. The main point to be taken note of is that such competition is fair and that the playing field is level.

The last point that the Member has mentioned is to ask what sort of incentives the Government has in place to allow or to encourage small local companies to team up with larger ones. Again, I wish to inform him that the EDB set up a programme in 1988 specifically for this purpose. The programme is called the International Direct Investment (IDI) programme and there are several incentives which have been specifically formulated to get this programme off and running. I just want to mention three of them.

The first incentive is what is known as the Overseas Investment Tax Incentive. This incentive allows for any financial losses that have been incurred as a result of their overseas investment to be written off against their local income. The second incentive is the Investment Study Grant Scheme. This, I must add, is a very popular scheme. What this scheme does is to defray part of the cost of looking for opportunities overseas, whether this be in the form of hiring experts or merchant banks to advise on potential acquisitions overseas. Yet another incentive under the IDI programme is that under section 13(7) of the Income Tax Act, the foreign sourced income that is earned can be exempted from Singapore taxes when this income is repatriated back to Singapore. I must add that these incentives apply to large as well as small companies and I am sure that where these local companies have a good business reason to do so, they would naturally team up and such incentives would be made available to them.

Of course, there are other incentives that are available. TDB and EDB organise missions, operate other incentives like the Product Development Assistance Scheme, Market Development Assistance Scheme, and so on. And many local companies have used these schemes to good effect. I have had the opportunity to visit some of these local companies and I must say that I am very encouraged, both by the optimism and dynamism of the management of these companies and their staff. They do appreciate the little help that we can give to them and they also appreciate that ultimately it depends on themselves.

The Deputy Prime Minister and Minister for Trade and Industry (BG Lee Hsien Loong): Mr Speaker, Mr Chandra Das asked about Singapore's role in the Growth Triangle and how many dollars we have spent directly on the projects. The Singapore Government's commitment to the Growth Triangle is through the involvement of agencies like EDB, TDB and JTC. The projects are conducted on a commercial basis. For example, Batam Industrial Park is being undertaken by BatamIndo, which has both Singapore and Indonesian partners. The companies which sign up in the park do so on a commercial basis, and even the developers would not proceed to develop the project unless there is a return on their investment. I think that is the soundest long-term basis for proceeding.

But although we do not provide direct grants, we do have an interest in the long-term prosperity of our neighbours. Therefore we provide technical and financial assistance to encourage businessmen to take advantage of the opportunities and the abundant resources in our neighbouring countries. For example, EDB gives incentives to companies which are moving offshore as part of an overall business plan to upgrade the operations in Singapore. EDB's investment allowances and other training allowances are more generously forthcoming if, when the companies submit their plans for upgrading, one component involves moving offshore to Indonesia or to Johor.

Secondly, companies which train Indonesian workers in Singapore to work in Batam can receive a training subsidy, which amounts up to half the foreign workers levy, for up to six months. So we are prepared to cover part of the cost of companies setting up in Batam.

With Johor, we are discussing the possibility of jointly setting up a Technical Training Institute and a Technology Park. We are in contact with the Johor State government, and have written to them to propose setting up a high level working committee to get these projects going. We are optimistic that particularly the Technical Training Institute will be lounched within the year. That is not all, because as the activities expand, we will need to do more to promote the Growth Triangle. Take, for example, the training subsidy scheme which is presently enjoyed by industries in Batam. We are developing an industrial park on Bintan as well. When Bintan is ready, the training subsidy scheme will be extended to cover Bintan, because that is a joint project, just like Batam. And even with Johor, once we have similar joint projects with Johor, we can extend the same scheme to these Johor projects as well.

We will also gradually move towards projects which involve all three of the partners of the Growth Triangle. Last week, the Prime Minister of Malaysia, Dr Mahathir, visited Batam. You may have seen on television that Prof. Habibie and Mr Mah Bow Tan were on hand to greet him and showed him around. Dr Mahathir then suggested that we should hold discussions among all three partners in the Growth Triangle. Singapore will be happy to take part. We hope there will soon be more activities which involve all three partners. Last year, Singapore and Indonesia did a joint industrial promotion mission, promoting investments in Tokyo and in Osaka. Johor has expressed its keenness to do a similar operation with Singapore. Perhaps for the next mission, we should bring all three together, Singapore, Johor and Indonesia. We should be able to do that within the year.

The problems like traffic jams, customs clearance, also mentioned by Mr Das, are being studied by a joint Singapore-Johor Committee on Business Cooperation. They have been brought to the attention of the Malaysian Government. I am confident that the Malaysian Government is as anxious as we are to solve the problems, because these are unnecessary hindrances which will slow down the development of Johor and retard the growth of the Growth Triangle.

Secondly, land and labour. Mr Das and Mr Chew Heng Ching have talked about the problems of labour shortage, the inflexibility of the foreign worker policy, some of the problems with revising industrial land prices and rentals from year-to-year, because we always dispute what the correct revision should be. They have suggested a more flexible, market-oriented approach to deal with these scarce resources. I agree with them. We need to allocate these scarce resources efficiently and fairly so that the people who need it, get it, and the people who are best able to make use of it, get the chance to do so. The present arrangements are workable, but they are not perfect. The MPs have pointed out some of the shortcomings.

We should make use of market forces as much as possible. The allocation of foreign workers is subject to many non-economic considerations. We have to worry about the social cost, about foreign workers holding back upgrading, the impact on NTUC members and Singapore workers. It is not an entirely free market. But, nevertheless, given that we are going to bring in 200,000, 300,000 or whatever number of foreign workers, it is possible to use the market to distribute this number of workers fairly, to the people who need them most.

Presently, we have a foreign worker levy. That is already partially a market test, because if you are not able to pay the levy, then you probably should not be hiring a foreign worker. But the levy is inflexible. We cannot change it every month, otherwise employers would be unable to plan ahead. Besides the levy, we have a 40% cap on the dependency ratio. So if you have 100 workers, then no more than 40 may be foreign workers. That is a further restriction because if there is a sudden burst or spurt in business, you may want to hire more than 40% foreign workers for a short period of time, and then go back down again.

One way to do this, as Mr Das suggested, is to have a 2-tier levy system. First-tier can be up to 30% or 35%, lower than the present 40%. It can be arranged as at present. Second-tier can go beyond 40%, to 45% or 50%, but at a higher price. Either we set a higher foreign worker levy or, alternatively, we can have a tender system to tender out entitlements to hire foreign workers. We are studying these possibilities. It is not purely a MTI matter. The Ministry of Labour is principally responsible. We are discussing it with them and I am sure if you ask the Minister, he would have some more to add in due course.

Similarly, with industrial land. The Government owns nearly all the land and allocates it direct to JTC. JTC develops it, and leases it to tenants. How do we know what the price should be? There is some comparison. You can look at Hong Kong, you can look at Malaysia. You can tell that land for flatted factories in Ang Mo Kio cannot cost as little as land in Tuas, which is further away and is meant for lower density development. But can we be certain of our price estimates? It is very difficult because despite the best efforts of the valuers, in the absence of actual transactions, it is only a guess, as to what the land ought to be worth.

What we should do is instead of giving all the land to JTC, to provide certain chunks for the private sector to develop. For example, if each year we put up 150 hectares, one-third can go to the private sector. We tender those sites, the private sector develops them, markets them, promotes their own industrial estates. You have JTC Industrial Estate, you can have DBS Industrial Estate, or OUB, or Hong Leong, or whoever. And then we will know what is the land worth, what are the differentials, whether we are allocating too much or too little land to industries, whether we are being fair to our tenants when we tell them, "Next year, the rentals must go up by 20% or 25%." There will be a basis to decide. We are studying this. It will take some time to do but I think it is workable.

Thirdly, Mr Chew Heng Ching asked about the Singapore dollar. This is the responsibility of MAS and the Minister for Finance. The Singapore dollar has an impact on business cost in Singapore because when it moves up then all your Singaporean factors of production become more expensive - labour, land, rentals. But our position has always been that the Singapore dollar is not an instrument for short-term management of domestic demand. When we go into a recession, we do not depreciate the dollar. When we have a strong economy, neither do we deliberately push it up. It is the market which decides the value of the Singapore dollar in the long term. And in the short term, the fluctuations in the currency values reflect underlying forces which are not really within the control of the Government. The Government can moderate and dampen the movements, but we cannot prevent them.

If the market believes that the Singapore dollar should be at an exchange rate of $1.50 with the US dollar, and the Government believes that it should be $1.70, then the Government cannot continue to buy American dollars on the market and sell Singapore dollars. It will accumulate billions of dollars of hot floating reserves, which can move out the moment the market changes its mind, or, perhaps after we have failed in our forex operations, and the exchange rate has shifted against us, so that when the money leaves we have lost out. If the Japanese cannot maintain the Yen value, the Germans cannot maintain the Deutschemark value, against market pressures, neither can the Singapore Government support and defend a Singapore dollar exchange rate which is not justified by the underlying fundamentals, and by the market assessment of what the dollar is worth. 2.45 pm

Last year, in 1990, the exchange rate of the Singapore dollar went up, by about 10% against the US dollar. Despite this, we have remained broadly competitive, as I shall show in a moment, although I concede that companies which did not allow sufficiently for currency movements have probably found the adjustment painful. Because when you have a long-term contract valued in Singapore dollars, there might be some variation for exchange rates, but it is unlikely that it would have allowed for as wide a variation. This is unfortunate, but it happens whenever an exchange rate moves. When the Yen went from 230 to the US dollar to 170 and then briefly to 130, the Japanese called it the endaka, high Yen shock. All the Japanese companies which had overseas contracts, which means many of them, were hurt. But they tightened their belts, squeezed themselves, upgraded their productivity and they became competitive again. I am confident that Singapore companies will in due course become competitive again.

There is a benefit from a higher Singapore dollar, ie, lower imported inflation. For example, last year, inflation was 3.4%. That was with the Singapore dollar's appreciation. If the Singapore dollar had not appreciated, then inflation would have been around 5%, but that would not have been the end of the story. Because the 5% will feed through higher wage increases, other domestic costs will go up, and eventually exports will become less competitive.

In recent months, the exchange rate of the Singapore dollar has stabilised. Inflationary pressures overseas have eased because of lower oil prices. Domestically our growth rate has moderated. Therefore, major shifts in the exchange rate against the exchange rate of major trading partners in the near future are unlikely.

Finally, the cost of doing business. Many Members have expressed this concern. I think the statistics will tell a clear story. I have prepared some charts (Cols. 489 - 494) which I would like the Clerk to distribute. [Copies of charts distributed to hon. Members.] charts - GROSS RATE OF RETURN IN MANUFACTURING vs REAL GDP GROWTH, NOMINAL GDP GROWTH, PROFIT SHARE AND CHANGES IN PROFIT BEFORE TAX OF COMPANIES, SINGAPORE'S RELATIVE UNIT LABOUR COST AGAINST THE OTHER NIEs AND UNIT BUSINESS COST OF MANUFACTURING (1980=100) (Cols. 489 - 494)

While they are being distributed, let me say that this is not a new subject. Every year we discuss this. Every time any costs have to be revised, predictably people say that business costs are going up. Every time the CPF adjustments are made, a chorus is an inevitable concomitant. So after a while we have to work harder to distinguish which are genuine cries of pain and which are standard expressions of regret. The greatest danger for a Trade and Industry Minister is to mistake one for the other, because then he not only makes a wrong decision but the economy will go into a nosedive. But I think that this year we are not badly off.

Let me show you the charts. Business costs are important, but the bottom line worry of businessmen is not costs per se but the impact on profitability and competitiveness. Look at Chart 1. Chart 1 shows three lines. First, GDP growth just as a base line from 1980 onwards, healthy, down to zero in 1985, back up to good levels in 1987, 1988 and 1989. Secondly, look at the gross rate of return in manufacturing, in other words, how profitable our companies are. It is a proxy because we do not have figures for banks and the financial sector and so forth. They were very profitable in 1980. The profitability steadily declined, reaching a bottom in 1985, and then went up sharply again in 1988, down slightly in 1989. We do not have the 1990 figures. The 1989 and 1990 profitability figures are not very far from the levels of when the economy was doing very strongly, in 1980, 1981, or for that matter, 1986, 1987 and 1988. Profits were strong.

Furthermore, our profitability levels are much higher than those in the US, Japan or West Germany, shown by the dotted line on the chart. When our profitability dived, it went down almost to the level of the developed countries. At that point, Singapore cannot compete. Unless we have an edge, nobody is going to leave America, Japan and West Germany and come to Singapore. But the gap now is 12 percentage points. The American gross rate of return is around 15%. Singapore's figure is around 27%. So whatever the business costs, this is how it impacts the bottom line.

May I then take you to Chart 2 which gives you similar data, but this is broader. These are companies listed on the Stock Exchange of Singapore. The top chart shows the profit share of GDP, meaning the percentage of GDP which is accounted for by profits. The rest goes to wages and to the Government. The profit share was very high in 1980 - 54%, more than half of GDP. Then it went down steadily. In 1985 where it reached a bottom of 43 1/2%, before it began to come up again. In 1986, 1987 and 1988 it reached a peak. In 1989 and 1990, the profit share was still around 48.4%, quite a lot higher than in the trough of the recession. So profits have not been squeezed.

The second chart at the bottom shows the growth of profits of companies over time, how much better they were doing year on year. You can see again that profits before tax have been growing by about 20% per year. In addition, corporate tax has been going down year by year, so profits after tax have been increasing even faster. So companies have been doing well.

Finally, costs themselves. Chart 3 shows two lines there. The dotted line shows the unit business cost, ie, comparing Singapore alone, over time. It shows that unit business cost reached a peak around 1985, declined in 1987 and has gone up again. In 1990, they were now near 1985 levels, but that is in absolute terms. What is more important to us is how in relative terms, our business costs compare with the other NICs and our competitors. For that, you look at the solid line, relative unit labour cost. The peak was in 1985 when the index was about 162. It went down steadily year by year to reach about 110 in 1989, and in 1990 it was back up, but still below 120.

I concede that the NICs are not our only competitors, we also have to look at Malaysia, which is coming up very rapidly, Indonesia and Thailand. Then the picture becomes more complicated. But as a first approximation, the economy is strong. We forecast 3-6% growth for the year. That was before the Gulf War broke out, and the Gulf War ended. We are quite confident that we will make this. We have some preliminary figures for the first quarter. They have not been published yet, but they are positive. I therefore fully agree with Mr Lim Boon Heng, who said on Monday that the 1% in employers' CPF contribution is the least that we can do, in order to keep faith with the workers whose sacrifices and contributions have brought us thus far.

I concede that not all companies will be equally affected. Local companies may be more severely impacted. We may need to give more help to the SMEs, as Mr Philip Tan has pointed out. We will continue to do that, through the Small Industries Financing Scheme, the Business Development Schemes, feedback meetings, discussions and, most of all, through healthy, bracing, strong competition, including fair competition from Government companies. Because it is only through competition that you can make a living abroad. If you cannot compete with a few puny Government companies in Singapore, you have no chance when you go overseas. I am quite confident that many of them will do well. I have met them. We talked to them and they are on their own and prospering.

Mr Chandra Das: Sir, I would like to thank the Deputy Prime Minister and the Minister of State for their very detailed and positive answers.

On that note, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), Mr Leong has withdrawn.

The sum of $114,305,240 for Head W ordered to stand part of the Main Estimates.

The sum of $634,623,500 for Head W ordered to stand part of the Development Estimates.

The Chairman: Order. It is time for a suspension.

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

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.15 pm.

Sitting accordingly suspended at 2.56 pm until 3.15 pm. Sitting resumed at 3.15 pm

[Mr Speaker in the Chair]

Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

Head U -

The Chairman: Head U - Ministry of National Development. Amendment No. (1), Dr Tan Cheng Bock. We have 15 minutes for this discussion.

Dr Tan Cheng Bock (Ayer Rajah): Sir, I have two amendments here. Can I take them altogether?

The Chairman: Yes, I have said so.

Dr Tan Cheng Bock: Sir, I beg to move,

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

In moving this amendment, my GPC hopes to sell the idea of private participation in public housing estates. Sir, on 27th July 1989, the Minister for National Development at the opening of the Second International Convention on Urban Planning, Housing and Design, said the following when he touched on the subject of private sector participation, and I quote him, in case he has forgotten:

'Another area where we hope the private sector can provide new ideas is in the architectural design of housing forms. The present planning guidelines have served us well, but the strict enforcement of boundary requirements and other parameters have left little room for architects to be creative. We would like to see whether some planning parameters could be reviewed so that new forms of housing design and layout can be tried.'

Sir, nowadays administrators are more often required to judge the qualities of housing plans and to evaluate untried areas. This call by the Minister for change in our appraisal of housing plans is timely. However, the question is whether our administrators are prepared to accommodate this new development, as the old system is extremely effective, at least during the earlier quantitative phase of our construction. To be fair to the Ministry of National Development, I see steps being taken with the introduction of the Development Guide Plans. Initially, the public were invited to give their comments and to make suggestions to the two plans, ie, the Civic Centre and the Kallang Basin projects. From just making comments and suggestions, the Ministry of National Development took a step further by inviting private planners and architects to prepare the development guide plans for two areas, ie, Simpang, 900 hectaren new town by the sea and an 80-hectare site at Kampong Bugis where new forms of high density living were tried. My GPC would be watching to see whether the private sector ideas in the two projects will be accepted, or at least some of the ideas incorporated.

Sir, unless some experimental housing programme is tried, we will not be able to get some of the ideas proposed in the new housing forms in our public housing. An experimental housing programme is the only way to demonstrate a new housing environment. For example, how can spontaneous neighbourliness be speeded up in the design of the social spaces in a community? Do we really know the priorities and how internal spaces in households of different needs are established, if flexibility in internal planning is not available for the testing? And what will be the effects of having smaller but better planned flats on the quality of social life in the community? Will the use of community spaces be better? Is it true that smaller flats will make for more lively community life? If so, for what segment of society? What will be the effect of introducing a different ratio of mix between residential and retail, commercial or offices, including other mixes, on the vitality of an area, and on the quality of life to the rest of it? What kind of town centres can increase the potential scope of commercial and social transactions?

Sir, I have asked a lot of questions. I am not expecting the Minister to answer each and every one. I am merely taking his point further, in response to his call for some planning parameters to be reviewed so that new forms of housing designs and layout can be tried.

Sir, nearly 87% of our people live in public housing. As our economy progresses, we need our people to be more creative and innovative. They in turn need to be stimulated by the environment. However, HDB architects monopolise the entire environment of public housing, including HDB town centres, shopping centres, food centres, markets, etc. The monopoly of public housing in its entirety inhibits the development of new forms of public housing and planning, by excluding contributions from the entrepreneur private sector.

The HDB has been constrained for a long time by a formula that works. Public housing used to be monotonous and labelled pigeon-hole flats. In recent years, there have been some attempts to give a little individualism to each neighbourhood, by a triangle here and a curve there. But this is not enough. Thus, if some public housing projects can be privatized, basic rather than superficial differences in the layout and unit types can be achieved. Thus, I am proposing that an experimental housing programme be carried out in one HDB township development. Let it be farmed out partially to the private sector.

Sir, if each neighbourhood is planned and developed by different architectural teams, some from the private sector and some from HDB, it would be a town rich in character and colour. Sir, it is through such a programme that different sets of guidelines, rules and regulations relevant to quality construction be evolved, and outdated rules relevant to the days when we were talking about quantity rather than quality be modified or discarded. Moreover, such a programme can be put to test some of the questions raised earlier in my speech.

Sir, the Minister for National Development has taken two bold steps with private sector involvement in the Civic Centre and the Kallang Basin projects and the Simpang and Kampong Bugis projects. To me, these involvements are superficial. The real test is making basic changes to the public housing programme. That is the next lap for the Ministry of National Development.

Sir, I do not expect the Minister to give me an answer now. He could advise his administrators to study this proposal and my GPC members are prepared to discuss with him.

Sir, on the second amendment, I am asking the Minister to give an update of the Public Works Road Programme and whether there is a coordinating committee overseeing road excavation. If there is, then why is it that some roads are still being dug out and paved so many times over?

The Minister for National Development (Mr S. Dhanabalan): Sir, I crave your indulgence to go beyond the 15 minutes. I will take some of the time from my other answers.

First of all, on housing form. We had a competition on new housing forms. We had quite a few suggestions but unfortunately the competition did not throw out many creative ideas. From the competition we have been able to modify some of the planning guidelines and we will be announcing them soon. But as the Member has pointed out, we want to try out private sector ideas in public housing. We have already done this to some extent in the sense that we have sold parcels of land in HDB estates for both commercial as well as private housing development. This will create more variety in HDB new towns. But the idea of getting private sector architects to actually design public sector housing or HDB flats is a good one and I will ask HDB to examine this idea, and perhaps we can study the idea of a design-and-build approach. In other words, we mark out a parcel of land within an HDB estate and ask the private sector, a combination of maybe architects and contractors, to design and build public sector housing within certain parameters which we will have to lay down, not only some planning parameters but also, most important, cost parameters. Because whatever is the final product, it must meet the demand or the affordability of those under the HDB booking system. So I will ask HDB to look into this. As the Member has pointed out, we are involving the private sector in the Development Guide Plans of new areas, including HDB estates.

The HDB itself has tried to introduce a greater variety of designs into public housing. In fact, the internal organisation of HDB now, in the Architectural Department, is to divide the teams into four design studios, and each studio is like a private sector architectural firm. They design quite independent of the other studios and of course there is an element of competition and a desire to out-perform each other, which I think is good. So we will do everything we can to introduce a greater variety into public housing.

On the question of roads, Members will have noted that, in the past, the average that PWD has spent on roads is about $230 million per year. Over the next five years this will increase to $390 million a year. So there is a greatly expanded road building programme. Over the next five years we will be doing the following: We will build new expressways, extend the present expressways, improve the capacity of the present expressways; we are introducing new interchanges, as well as building a series of semi-expressways. The other important idea that we will be studying in some detail is the feasibility of an underground road tunnel network. There is a lot of excitement about this idea, but I must sound a note of caution that this is not a panacea for our road traffic problems. But in certain instances, tunnels can be very effective in getting traffic through a part of the city to another part.

The major expressways that we will be constructing will be the following: Kranji, Tampines, Seletar Expressways. Pan-Island Expressway will be expanded and realigned, and parts of the PIE which are now narrow would be widened, especially the part between Kallang Bahru and the Bukit Timah Expressway.

I mentioned about the construction of semi-expressways; roads like Dunearn Road, Bukit Timah Road, Adam Road, Farrer Road will be improved by the building of vehicular interchanges. We also intend to do the same in Holland Road, Queensway, Yio Chu Kang, Ang Mo Kio Avenue 3 and Hougang Avenue 2. So these are the various detailed items in the next 5-year programme of the PWD. 3.30 pm

On the question of road opening, this is in fact an old problem. It comes up every year - why our roads are opened up so often? We do have a Coordinating Committee that is chaired by PWD with all the various agencies that have reasons to open roads, such as PUB, Telecom, Ministry of the Environment and HDB. They all sit on this Committee. There is some coordination. They meet every month and try to coordinate all matters relating to what we call "road openings" in order to lay services. But there are practical difficulties. A normal layman's idea is why can we not open the road once and lay all the services in that trench and cover up, and not open up again for a long time. It cannot be done. For example, we cannot lay a sewer pipe and a water pipe in the same trench. And we cannot dig two trenches for both purposes at the same time, because that will cause tremendous traffic jams. So we dig first for the sewer, and after it is closed up, then we dig for the water pipeline. It has to be done that way. There is no other way to do it. Similarly with electricity and gas lines, we cannot lay them in the same trench.

We try to minimize the inconvenience to public by asking the various departments concerned to think about their programmes in advance so that we can have a proper schedule of road openings. But sometimes even this is not possible because certain emergencies or immediate demands come up. For example, I have got a letter from a company saying that they want electricity, and PUB has been told that they cannot lay the cable because they were asked before the road was re-surfaced whether there was a cable to be laid, and they said no. And now a cable has to be laid which requires a road that was re-surfaced just last month to be opened up now.

So we have that kind of situation, and we do face a situation where people seem to see the road being been opened up almost every week. We try to avoid it by coordinating, but I must say it is not one hundred per cent; it does not work all the time. We will try to improve the system. I think forward planning can help a lot in cutting down the inconvenience arising from frequent opening of roads.

Dr Tan Cheng Bock: Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2). We have 26 minutes. Mr Lew.

Mr Lew Syn Pau (Tanglin): Sir, I beg to move,

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

The issue of car parks is related to the car quota problem, and it is an emotive one. Recently, the supply of car parks has been gradually shrinking, especially within the CBD. I have been told that when the supply is limited, drivers become aggressive and fight for space, and drivers of the fairer sex usually suffer.

I would like to ask the Minister what is the long term strategic policy on the construction of car parks and how is it going to be related to the vehicle quota system. Secondly, is the Ministry s waiting bays at MRT stations are usually congested with private cars resulting in traffic jams, for example, at the Buona Vista MRT station. (I would like to declare my interest at this juncture.) Traffic enforcement at such places seems insufficient. Will the Ministry address the congestion problems at such MRT stations?

Finally, will the Ministry consider erecting shelters for all taxi stands? This will make waiting for taxis much more pleasant, rain or shine.

The Chairman: Mr Davinder Singh is not here. Mr Chng Hee Kok.

Mr Chng Hee Kok (Tiong Bahru GRC): Sir, the issue I wish to raise with the Minister concerns the problems faced by buyers of residential property.

Presently, a buyer takes over a house or apartment upon the housing developer receiving a TOP (Temporary Occupation Permit). But having taken over the property, the owner is then confronted with poor workmanship and a lot of problems related to water seepage. The buyer finds out that there is a leakage in the water pipe or in the sanitary pipe, and water seeps through the walls. From here on I think the buyer seems to have very little recourse. The buyer in fact becomes most irate when he finds out that not only is his problem not satisfactorily resolved by the housing developer but that the developer is finally given a Certificate of Statutory Completion (CSC). I have such a problem in my constituency. There is a private development in which many years after the owners have moved in, there are a number of problems relating to water still not resolved.

Sir, the buyers can easily discern the problem of poor workmanship relating to poor finishes like poor paint work, poor laying of ceramic tiles, and so on, before they take over the property. But on water and piping works and their belated problems, such problems only surface after the property is occupied. But by then it is already too late. Will the Minister consider some measure to protect property buyers in such cases like holding up the issuance of the Certificate of Statutory Completion or perhaps apply some other administrative measures to coerce the developer to resolve these problems before the CSC is issued?

Dr Ho Tat Kin (Toa Payoh GRC): Sir, I notice that the unit cost of road construction increased from $1.07 million per lane kilometre of road in FY 90 to $9.62 million per lane kilometre of road in FY 91. And this nine times increase is attributed mainly to the high construction cost of the CTE tunnels.

Sir, I would like to ask the Minister when will the CTE project be completed and usable? Was the tunnel the most cost-effective method for the CTE? And did the PWD consider the alternative of two-level roads and more flyovers?

Sir, I also notice that $4.9 million has been budgeted for a central computer control system for traffic signals. What I want to know is when will the entire traffic control system be fully operational, and how much improvements will road users be able to experience?

Sir, just now my GPC Chairman spoke about road digging and the Minister gave some explanation. What I want to suggest to the Ministry is to ask PWD to consider, when building new roads, implementing some form of conduit system underneath the roads so that when new wirings or new pipings need to be done, they can be done through the conduits, and you do not have to dig up the entire road from the surface.

Mr Peh Chin Hua (Jalan Besar GRC): ( In Mandarin): Sir, I would like to urge the Ministry of National Development to look into the possibility of setting up a private housing estates' complaints bureau. Many residents of such private housing estates feel that they are a group of neglected children because they do not have the town council or the management corporation to look after their interest, unlike those who live in HDB estates and private condominiums. Their maintenance and other complaints are not taken care of.

Take, for example, my constituency, Geylang West. Those living in the private housing estates and shophouses along Geylang Road and Sims Avenue do not come under the management of the town council or any management corporation which represents them. In other words, if they have any grievances about dirty and choked drains, mosquito breeding, uncivic acts of burning of incense and joss papers along the roads, illegal and indiscriminate parking, they have nowhere to take up the problem. Residents would have to take up their complaints to the various authorities concerned like the Traffic Police for illegal parking, the Ministry of the Environment for mosquito breeding and burning of incense and joss papers, and the Public Works Department on faulty street lightings. On most occasions, the residents are unsure of the right department to approach. This has caused some residents to remark that "it's better and luckier to live in public housing estates than in private housing estates."

During my Meet-the-People sessions I have handled a case known as the "coconut tree crisis". There was a coconut tree on state land outside the compound of a private estate. Sometimes the coconuts fall from the tree and pose a danger to passers-by. When complaints were made to the relevant authorities, URA referred them to PWD and PWD in turn referred them to the Ministry of the Environment. It took more than two months before the tree could be cut down.

Based on these cases, I would like to urge the Ministry of National Development to look into the possibility of setting up a private housing estate's complaints bureau to handle their grievances.

Mr Dhanabalan: Sir, I was asked to give a very brief idea of the long-term strategy on car parks and how they will be related to the transportation system or transportation planning.

It is true that in the past we tended to look at the parking problem as quite distinct and separate from transportation problem, and very often the building authority, in requiring the number of car parks to be built, did not take into account the transportation problem. But that has been resolved. PWD, which is now in charge of car parks, has come up with a new policy on car parks. Singapore is divided into various zones and the car parking requirements vary from zone to zone according to the road system and the intentions under the transportation policy. For example, buildings around MRT stations do not have to provide as many car parks as other buildings because the intention is that

people should use the MRT. Similarly, buildings within the heart of the restricted area will have to provide less car parks than buildings in the rest of the restricted zone or buildings in the rest of the island.

So there is now a graduated system of car parking requirements in buildings which is tied very closely with the overall transportation system. Perhaps one of these days I will have an opportunity to make a more detailed statement. At this time I just want to give this broad outline in that car parking is now tied to the transportation system, and the development control and building control requirements are tied together with the transportation system. 3.45 pm

On the question of half-hourly car parking, I am very pleased to announce that from 2nd May, PWD will be introducing half-hourly parking coupons for all car parks. So people who now have to pay for one hour, even though they want to park for just 10 or 15 minutes, will find that they have to pay only for half an hour. This will be introduced from 2nd May. As to the other types and forms of controlling or managing car parks, the present system has been found to be the most effective in terms of cost, manpower saving and efficiency. I think Members will remember that we had a different system in the past where we used to go to the booth to pay. Now you just buy a book of coupons and you tear the coupons and use as required. Nevertheless, both URA and HDB are exploring the feasibility of using new types of systems and the Smart card system is one of the systems that is under consideration. When such a system is proven to be effective, we will certainly introduce it.

Regarding private car pick-up points at MRT stations, all stations have been provided with taxi stands and taxi bays, but not all have the space near the stations to provide private car pick-up points. At stations where there is space, such as the Novena or Bishan station, PWD has provided a place for private cars to pick up or drop off passengers. In new towns, where there are car parks near the MRT, we use such car parks for this purpose. I will ask PWD to try its best to prepare spaces or pick-up points as close to MRT stations as possible. But it may not be possible in all cases.

Mr Chng Hee Kok raised the question of the plight of purchasers of private housing and the poor quality of some of this type of housing. There is a misunderstanding that the departments in the Ministry of National Development which are in charge of construction or development are also in charge of the quality of buildings. And, in fact, the old Certificate of Fitness (COF) reinforced this mis-impression that somehow Government went to examine the building and found it to be fit in the sense that it was of good quality. But when a COF was issued, what the department concerned really said was that the building was constructed according to the plans submitted. The basic thing that the Building Control Division (BCD) was concerned with was the structural aspect, the soundness of the building, the structure was built according to plans, and all the spaces, ventilation, and so on, were according to plans. Whether the tiles used were the right tiles, whether the roof has cracked tiles and whether it leaked from the wall or from the roof, really are not the problems of BCD. It is a matter of quality, which is governed by the Purchase and Sales Agreement between the buyer and the developer, and there are sufficient clauses in this Agreement for the purchaser to take action against the developer. But of course he has to take action through his lawyers. He cannot just go and appeal to a Government department.

It is because of this wrong impression that we have changed the title of COF to a Certificate of Statutory Completion. It is very clear in that the building is completed according to the plans but it does not make any comment on the quality of the building except the quality of the structure, in other words, the safety aspects. Buyers have to take action and the period within which they can ask the developer to make good any defects is determined by the date of notice to the purchaser to take possession. It has got nothing to do with the Temporary Occupation Permit (TOP). The clock does not start running from the date of TOP but from the date that the developer asks the purchaser to take possession. So buyers must take legal action on their own.

When I say this, it does not mean that the Building Control Division in the PWD does nothing. When we receive complaints and purchasers appeal to us, we do take up with the developers and with the architects concerned and, in most cases, the developers do respond positively and they put right whatever needs to be put right. But there are some developers who do not take action or who really are unable to take action because the buildings are of such poor quality. In such cases, legally, we cannot take immediate action on that particular development, but when we receive complaints and our investigations show that the developer has, in fact, put up very poor quality buildings, we will take action to suspend the developer for a period of anything from one to four or five years. And during the period of suspension, that developer, or any other developer in which the directors of that particular company are involved, will not be given a licence to sell his development in advance of completion. As you know, developers now sell even before the ground is prepared. But where the developer does not get a licence, he has to complete the building so that the purchasers can go and see the completed building, the quality of the building, before they buy. We have, in fact, suspended some developers because they produce poor quality buildings and where we have had many complaints. So if there are any such specific cases, maybe the Member can write to me and we will see what can be done.

The next question was raised by Dr Ho Tat Kin and it has to do with the CTE tunnels. He asked me when the CTE tunnels would be completed. The CTE tunnels will be completed by September this year. As to whether PWD considered alternatives before building the CTE, it certainly did. Let me just give him some of the considerations that went into the choice of a tunnel as against other forms of roads. There was a long and detailed study on the cost and benefits of building a tunnel as against alternative solutions and the tunnel alternative was selected because it has many advantages over the alternative of surface expressways or elevated expressways.

First of all, there is better development potential for land near the tunnel as compared to land near an expressway. Because an expressway even with buffer setbacks and strict vehicular access controls, has high noise nuisance and dust nuisance. But this does not apply to tunnels. Tunnels also enable better use of the land above the tunnels. Once, of course, you have a surface road, you cannot use the surface for anything other than for cars and vehicles. In the case of tunnels, you can landscape, and you can even build on the tunnels.

Thirdly, the land required for a tunnel is much less, compared to surface expressways. In the case of CTE, we calculated that we will save more than 10 hectares of land as a result of using the tunnel alternative than a surface expressway. The other advantage is that most of the surface traffic will not be affected. This allows major roads, bus routes, and so on, to continue as they were before, whereas the construction of an expressway would, in many cases, require changes to bus routes and other surface use of the roads. Then the last and very important factor, with our population becoming very conscious of environment, is that the tunnel enables the environment along the route to be preserved or even improved. Surface expressways in the city will have very severe adverse environmental effects along the route, both in terms of noise, visual intrusion, air pollution, and so on.

The other question has to do with the glide system, the use of computers to tie up the traffic signals at different junctions so that you get a green wave and not just a static green wave but a system that reads the volume of traffic at the junction coming from different directions with traffic lights that are able to react to the changes in traffic volumes. The glide system is now one that ties up the traffic lights within the city. We intend to extend the system to include another 119 sets of traffic lights outside the city and, ultimately, we hope to tie up all the traffic lights in all parts of Singapore, where there is significant traffic, to the system. And the entire system is scheduled to be completed in about seven years.

On road openings, he asked why we cannot have a conduit or some sort of trench which can be permanently laid and into which we can put in new services, or change services. It is very difficult to do this in the old parts of the city. But for the new parts of the city, that is Marina South, we intend to introduce some such system. It is being studied, and if we can do it economically, we shall certainly do it.

Then Mr Peh raised the woes of private housing estates that they do not have one particular body to turn to. Well, private housing is private housing. It is not HDB. There is no one authority to deal with them. Some private housing estates have organised themselves into associations. They should do so if they want to take up matters which are of common interest and if they cannot do so and they have particular problems, they have to learn to approach the Government department concerned. I do concede that sometimes they may not know which department to approach. And this is where I think our Service Quality Improvement Unit can help. For example, PWD has standard instructions that if they get calls on any matter which do not have to do with PWD, then they should direct the caller to the specific department concerned. But, of course, if the officer concerned does not know which department to direct the enquiry to, then the public would be given the run around. So we have to educate our civil servants. But I think the present system is the best system and I do not see the need for MND or any other Ministry to set up a special unit to deal with the complaints of private housing dwellers.

Mr Lew Syn Pau: Sir, I withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (3), 5 minutes. Dr Koh.

Dr Koh Lip Lin (Nee Soon South): Sir, I am not moving.

The Chairman: Amendment No. (4), 9 minutes. Dr Ho.

Dr Ho Tat Kin: Sir, I beg to move,

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

Sir, I am referring to the Tree Planting campaign, which has been going on for many years. It has good objectives and I support it. But today, with a very efficient Parks and Recreation Department, we have very little space left for tree planting, especially in the older estates. Last year, in my constituency, we have around 50 to 60 community leaders coming down and we only have space to plant 10 trees. So this becomes very unproductive.

Sir, I would like to suggest to the Ministry to maybe reorganise the annual Tree Planting Day. Instead of doing it at constituency level, concentrate it in a few areas where it can be done on a massive manner, and this will be more productive.

Mr Chiam See Tong: Sir, I have made enquiry of the development of the hot spring in Sembawang in 1989. At that time, I asked whether the Government intended to develop the Sembawang hot spring into a tourist and recreational facility. Up to now, the Government has been very quiet. There is no news that any development has been intended or carried out. I should like to ask the Minister what decisions have been made, if any, in respect of the Sembawang hot spring.

In the early days, the spring was opened to the public. It was a popular spot and it is the only hot spring in Singapore. Many Singaporeans visited it regularly and even visitors from Peninsular Malaysia came to use its water. It was reputed to be able to cure skin diseases. The area, unfortunately, in which the hot spring is situated, has been sealed off for many years now. The public cannot have access to it. It is regrettable that many young Singaporeans do not even know that a hot spring exists in Singapore. I would like to say that since the hot spring is the only natural phenomenon that we have, it should be converted to a public park and made accessible to members of the public. I would urge the Government to quickly develop it so that it can be used as a tourist and recreational spot.

Mr Dhanabalan: Sir, regarding the Tree Planting Day, it may appear that this campaign that we have every year is very unproductive because many people are involved in planting a very few trees. But I would like to point out that the Tree Planting Day is not an attempt to get cheap labour or to get the maximum productivity from the people involved. It is an educational programme. And as an educational programme, we want to try and get maximum public participation. So even if we have 10 people involved in the planting of one tree, the act of going there and seeing the tree being planted is part of the exercise to make people aware of the importance of tree planting. In fact, most of the trees planted in Singapore are not planted on Tree Planting Day, they are planted throughout the year by the Parks and Recreation Department (PRD). And even on Tree Planting Day, most of the actual work is done by PRD. They have to bring the saplings. So it is an educational programme to involve the public. [Interruption.] Some may plant their own trees, cut their own trees, but they are free to do that. But I am talking about the Tree Planting Day which is basically an educational exercise.

I think it is worth continuing with it and even if there is just space for a few trees to be planted, we should continue with it. It is a symbolic act which reminds the people every year of the importance of trees, greenery, and so on. So we intend to carry on with it. And the idea of having one site where everybody can turn up, that would mean even more effort in mobilising 81 constituencies to come to one spot. I do not think there is any one constituency that has a space for everybody to participate. So we will continue with the present scheme. 4.00 pm

Regarding the hot spring in Sembawang, I mentioned the last time that the land had to be acquired for MINDEF's use. I mentioned that MINDEF had been asked to study carefully to see whether it could release any part of the land that it had acquired so that the land it was prepared to release could be used for recreational purposes. I am pleased to announce that MINDEF has agreed that some of the land which it acquired previously can be released for other kinds of development. The URA is now studying this particular site to see how it can be fitted in with the overall recreational and leisure master plan. And once we know exactly what we can use the site for, we will get potential developers to make their proposals.

Dr Ho Tat Kin: Sir, I withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (5), Dr Low Seow Chay. You have eight minutes to talk about birds.

Dr Low Seow Chay (Chua Chu Kang): Mr Speaker, Sir, I beg to move,

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

Sir, the success of tree planting has made Singapore a haven for migrant birds. Having some wild birds in the housing estates add more natural flavour to our daily life. But if thousands of wild birds gather in a housing estate, the excessive contribution of this natural ingredient becomes a nuisance to the residents. Many of our housing estates have now become the night resting place for a kind of bird called mynah. Every night thousands of such birds gather in the housing estates. They make a high level of awful and unbearable noise. The noise is so loud that it affects students who are studying or doing their homework. The intermittent loud and shrill noise at midnight deprives our residents from having their nice peaceful sleep. The droppings from the birds leave permanent stains on the paintwork of cars. The accumulation of bird droppings becomes very smelly and it is a potential hazard to our residents in housing estates.

From research, these birds feed on insects in animal farmyards and also refuse dumping grounds in Singapore and neighbouring countries. The association of the birds in such unhealthy feeding grounds makes them a source in the spread of animal diseases and they also potentially threaten the health of the residents.

Sir, because of the nuisance from these migrant birds, the quality of life in housing estates suffers. I have a feeling that if we do not take action now to contain the problem, very soon this problem may become a nation-wide issue. To completely eliminate the problem is not an easy task. It involves manpower, equipment, research and financial resources. What the individual housing estates have done in the past are all short-term measures. In the long term, we have to create an environment such that it would be unfriendly to the mynahs. I feel that there should be a national effort to coordinate and pool the resources to solve this particular unpleasant problem. I would like to ask whether the Minister is aware of this problem. If so, what measures has he taken in the past?

The Senior Parliamentary Secretary to the Minister for National Development (Mr Lee Yiok Seng): Sir, I am answering the question on behalf of my Minister.

Sir, the Primary Production Department (PPD) has chaired an inter-Ministry committee comprising the National University of Singapore, the Parks and Recreation Department, the Housing and Development Board, the Ministry of Health, the Ministry of the Environment and the respective Town Councils to study the nuisance caused by mynahs and other birds and to find solutions to eliminate the nuisance.

The PPD has found that a combination of the following methods can be used to drive away the pest birds: distress calls, pruning of trees, water jets with chemicals, reducing sources of food for birds. The PPD can give advice to the public or estate management agents on the methods to control the birds. Sustained efforts are needed to control the problem. Meanwhile, the PPD will search for better and more effective control methods.

Dr Low Seow Chay: Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (6), Dr Low.

Dr Low Seow Chay: ( In Mandarin): Sir, I beg to move,

That the sum to be allocated for Head U be reduced by $10 in respect of Code UG 5100 of the Development Estimates.

Sir, I wish to talk about the resettlement of farmers. Recently, the Government introduced some new regulations to the effect that compensation will be given to farmers only if both the husband and the wife are full-time farmers. Only then will they be entitled to this compensation.

Sir, in Singapore most of the farming activities are carried out in a small scale, particularly, the fruit farmers. The income of some of these farmers is hardly sufficient for them to meet their expenses. So in order to make their ends meet, they have to undertake other work, such as hawker assistants, etc, to help them pay for their household expenses. I believe that some allowance should be made to them so that when their income is within a certain ceiling and the main income comes from the farm activites, they should be entitled to the compensation. This regulation has also affected those farmers who are singles, widows or widowers, because they will not be entitled to this compensation. I feel that this regulation is very unfair to them. Farmers are farmers. We should not discriminate against them simply because they are single. They should be entitled to the compensation. In fact, those farmers who are single or widowed are doing the same thing. They are also affected by the resettlement. They are working to earn a living. Since they are affected by the resettlement, they suffer the same hardship as the other farmers. So I think they should not be deprived of this compensation. I hope that the Minister would enlighten us on this.

Mr Lee Yiok Seng: ( In Mandarin): Mr Chairman, Sir, farmers who are affected by resettlement can be compensated with a cash grant of $26,000. In order to ascertain that the farmers are full-time farmers and who are genuinely dependent on farming for a livelihood, payment is only given to those who are actively engaged in farming prior to the resettlement cut-off date.

To be eligible for the cash grant, the farmer must be farming on site prior to the resettlement cut-off date, and his level of farming activity must exceed PPD's minimum farming criteria. Also, the farmer must not be holding another full-time job.

Government is aware that some farmers need other jobs to supplement their income from farming, and it may not be realistic to expect all farmers to depend solely on farming as a source of income. However, it is not acceptable that those who have reasonably well-paying jobs could also claim for farmer's benefits, when farming is actually a secondary activity.

Cases which do not satisfy the eligibility criteria are referred to my Ministry's Resettlement Appeals Committee, which is chaired by me. This Committee has, since July 1990, approved cash grant to 106 farmers who held secondary jobs. For all these claimants, farming was their main source of livelihood, and the other jobs that they held were largely casual and low-paid in nature. Actually, the Resettlement Department has compassionately considered the plight of these farmers.

As for the point brought up by Dr Low on why both husbands and wives are required to be farmers before they are entitled to the compensation, and why a single person is not entitled to cash grant compensation, I wish to clarify that this is not the existing resettlement policy. I hope Dr Low would explain our policy to the farmers, and if he has any problems in specific cases, he can bring them up to us, and we will consider them on a case-by-case basis.

Dr Low Seow Chay: ( In Mandarin): Sir, I thank the Senior Parliamentary Secretary for his reply and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (7), Dr Koh.

Dr Koh Lip Lin (Nee Soon South): Sir, I beg to move,

That the sum to be allocated for Head U be reduced by $10 in respect of Code UI 5200 of the Development Estimates.

Sir, I just want to raise one point which I believe is a matter of concern for many people. This is the escalating cost of operating shops in HDB new town estates. Here are some examples to show how expensive shop prices and rents these days.

At the new neighbourhood centre, ie, Neighbourhood 8 in Yishun New Town, the tender price for an ordinary shop was about $600,000. The tender price for a coffeeshop, or what they call eating house now, was about $3 million. And one small supermarket is paying a monthly rent of over $30,000. Shops are being let out at $6,000 per month, while hawker stalls in a coffeeshop at $3,000-$7,000 per month, and you can imagine how much one plate of char kway teow costs in those coffeeshops. 4.15 pm

Because of the high cost, shopowners and stallholders have no choice but to charge more for their goods and services. This in turn leads to higher living cost. We therefore have complaints from residents about expensive prices, complaints from shopkeepers about the difficulty in running their business, and even shopkeepers of nearby neighbourhood centres have complained because the higher prices of the new neighbourhood centre have jacked up the so-called market price of shops. So when the shop tenancy is up for renewal, HDB now asks for an increase in rents, about as high as 30% increase. The only one who is happy is HDB. HDB must have reaped a huge profit because these shops were constructed when the construction cost was quite low.

Why do shops become so expensive? A number of explanations can be given. The first explanation is that there is a short supply of shops. HDB does not think so. Otherwise it would suggest poor planning on the part of HDB. The second explanation is that the bidders of the shops are speculators who had tendered too high. Whether this is true or not, I do not know. Perhaps time will tell. The third explanation is that the higher prices of shops were due to HDB's clever marketing policy, ie, holding on to the shops when the market was weak, and releasing them slowly so that the supply was limited.

There seems to be some supporting evidence in this third explanation. The shops in Yishun Neighbourhood 8 were completed in near-1989, or even earlier. I raised a question in Parliament in 1989 asking for the reasons for the delay in releasing the shops. The answer given was that they were undergoing conversion. I was a little bit puzzled at that time because I was wondering why should new shops need conversion? Was it another case of bad planning by HDB again? Being a nice fellow, I did not press on them. Or was it a tactic employed to delay the completion of the shops? The conversion which was carried out was really not essential, for example, change of partition, knocking down walls here and there, erection of the roof facade, which was supposed to give the place a bit of character, digging holes on walls for decorative purposes and so on. In fact, I would like to take this opportunity to point out that HDB had overlooked some real need for improvement, for example, the provision of adequate electrical power supply. I have already received complaints from a market, a coffeeshop, and a finance company about the inadequate power supply and the delay they have to suffer in applying for upgrading. This is perhaps one area where HDB's planning department should take note of.

Coming back to the topic of expensive shops, I do not know what can be done at this stage. Selling and renting out shops by tender has been accepted as a fair practice. Speculators are supposed to blame themselves if their business fails. Meanwhile, my town residents have no choice but to live with higher prices. Perhaps the Minister may be able to give his comments on this topic, in particular, whether the high tender prices for shops really reflect the market price, or whether they were the result of speculation. Since the cost of operating shops in HDB readily affects the cost of living of the residents, the Ministry has a role to play in moderating the cost.

Mr Chin Harn Tong (Aljunied GRC): Sir, in August last year, the Government announced a scheme to upgrade the old HDB flats. Six demonstration precincts were selected to start off the scheme in 1991. Dialogue sessions were held in December 1990 with the residents to explain the scheme and to obtain feedback. Models of the six precincts were supposed to be exhibited from February this year onwards. However, since the dialogue sessions in December 1990, nothing more has been heard, and the exhibition has not yet been held. Could the Minister inform the House what is the reason for the delay in the demonstration exercise?

Sir, in my house-to-house visits, some residents in the older HDB flats have asked me when the Government would be upgrading their flats so that they can decide whether or not to renovate their flats. Could the Ministry indicate the approximate starting dates for the respective estates to be upgraded?

Sir, the intervening space between some older blocks of flats is the minimum distance to enable each block to receive adequate sunlight. The proposed construction of service balconies jutting out from the rear side of each block of flats will result in the blocks of flats being even closer to each other than ever before as well as resulting in the greater loss of privacy. Could the Minister indicate how the floor space of each flat in these blocks can be extended in a more desirable manner?

Sir, the estimated cost of upgrading a 3-room flat is $26,000; a 4-room flat $28,500, and a 5-room flat $34,000. The flat owners in the demonstration phase have been told they need pay only 10% of the cost, ie, between $2,600 and $3,400. Could the Minister confirm that this estimated range of costs continues to apply, or do the flat owners have to pay larger sums than previously announced?

Dr Low Seow Chay: Sir, under the current HDB booking system, an applicant has to place his booking at least one to 1 1/2 years before he can take possession of his flat. Since the allocation process requires a lead time of more than a year before a flat can be physically allocated to an applicant, it has caused some problems to the resettlement re-housing process. Now the Resettlement Department has to plan well in advance and invite all the resettlers to book their flats more than one year before the targeted demolition date of the affected premises. From past experience of the various resettlement projects, we know that not every one of the projects was given sufficient time for advanced arrangements to be made.

In addition, in the process of allocating priority to the resettlers, sometimes it would take the Resettlement Department a few months before they could decide whether or not to allocate re-housing priority to the resettlers. If the selected flat cannot be ready on time, the current arrangement and the proposal by the Resettlement Department is to house them in HDB rental 1-room, 2-room or 3-room flats.

Sir, this temporary re-housing arrangement is unacceptable to the kampong folks affected by resettlement. Imagine having to move house twice within a short period of time. It is certainly a very troublesome matter. No logical person would consider doing it for himself unless for very special reasons. Furthermore, the transfer from a kampong house to a rental flat, and eventually to a purchase Executive flat, you will need completely different set of furniture. More importantly, many of these people affected by resettlement have acquired a certain social status and some wealth and they would not like to live in a rental 1-room, 2-room or 3-room flat.

I feel that the Government should be more sympathetic to the resettlers, because it has acquired their land and their livelihood is also affected. In fact, we should try our best to pave a smooth path for all these people to be re-housed in a HDB estate, instead of creating more man-made problems for these people. The Resettlement Department should do its best in ensuring that the re-housing process is not hindered by the current new booking system of the HDB.

Sir, sometimes, circumstances are beyond one's control. If the circumstances are beyond the control of the Resettlement Department, then the HDB should consider keeping some completed HDB flats of different types. These could be used for allocation to those people who could not book their flats in advance due to acceptable special reasons.

Sir, I would like the Minister to comment on these matters.

The Chairman: Mr Chiam See Tong. We still have time. Are you speaking?

Mr Chiam See Tong (Potong Pasir): No, I am not speaking.

Mr Chng Hee Kok (Tiong Bahru GRC): Sir, I have two topics to bring up under this amendment. The first relates to the present housing allocation scheme. I think there is quite a bit of press coverage as well as complaints by my residents on the present housing allocation scheme. Perhaps I will just summarise a few points for the Minister to look into.

The first point is that under the present scheme, unlike the old one, there is a great deal of uncertainty. Under the old scheme, the applicant knows that at some future point he will be allocated a flat if he is on the waiting list. Presently, unless he is in the ballot, he will not be able to get a flat and when the ballot is over, he has to wait for the next ballot.

The second problem with this scheme is that there is an inordinate time taken between the registration, the ballot, and the applicant being informed. I have a letter here from a resident who told me that it took him 10 months from the time he registered to the time that he was informed that he was not successful in his ballot. Ten months, in my view, is too long.

The third point is that the eligibility criteria must be established in each and every ballot. This, to my mind, perhaps can be easily changed because when the person first registers for a flat, he is eligible, but subsequently his income may change and this makes him ineligible. I think this is a simple matter and the scheme should be modified.

Another point which applicants are not happy about is the $10 registration fee. It seems to be a bit of a lottery here. Every time they want to get a flat, they put down $10 for the ballot. I think this again should perhaps be waived. The $10 should apply only for the first time applicant and for subsequent ballots there should be no charge.

The last point is that despite the very efficient system which we have, or claimed to have, we are not able to inform the prospective buyer on the scheduled ballot. This results in a great deal of anxiety and much time is wasted, both by the applicant as well as by HDB officers. Residents are naturally very keen to know the outcome of the ballot. They call up the HDB and the officer will tell them this: you will know next month. This resident of mine who wrote to me said that he called up the HDB at least several times over 10 months and each time he was told that he would be informed the next month. So with all these problems, I hope the Minister will perhaps look into fine-tuning or modifying some of the problems associated with the present allocation scheme.

Sir, the second topic I wish to raise is a matter relating to the allocation of shops for the different trades in HDB estates. In the private sector, the owner of a shopping complex, in marketing his shops, will go for a certain mix of business or trades. By doing so, it enhances his shopping complex. He hopes that by doing this, ie, when it enhances his complex it will maximise the value of the complex. This enhancement is achieved when the traffic flow is increased, the shops are patronised and business improves. And also more importantly, the complex will then serve the needs of those who patronise the shops.

Using the example of the private shopping complex, we can see the problem of the present system of shop allocation. There is no designation of trade and because of the tendering system, they do not designate the use of the shops. It is not uncommon to find that we have several video-tape rental shops and also provision shops in one particular HDB shopping complex. We all can agree that certain service trades or businesses like general practitioners, clinics, barber and hair dressing saloons are not only useful but also necessary to meet the needs of residents. On the full tender basis, certain trades may not be able to compete with some of the other more lucrative businesses, as has already been mentioned by my hon. colleague, Dr Koh. In view of this, will the Minister consider modifying the policy and set aside a certain number of shops for the service trade so as to better serve the residents in the HDB estates.

The Chairman: Order. Moment of interruption.

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

Mr Dhanabalan: Mr Speaker, Sir, I beg to report that the Committee of Supply has made progress on the Main and Development Estimates for the financial year 1991/92, and ask leave to sit again tomorrow.

Mr Speaker: So be it.