CENTRAL PROVIDENT FUND (AMENDMENT) BILL

Order for Second Reading read. 3.43 pm

The Minister for Labour (Dr Lee Boon Yang): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the Action Committee on Indian Education has recently proposed establishing a fund to assist needy Indian Singaporeans to upgrade the educational attainment of their children and to improve their economic and social conditions. Contributions by the Indian community to the fund will be through an opting-out scheme, similar to that for MENDAKI. The fund will be administered by the Singapore Indian Development Association (SINDA). To assist SINDA in collecting these contributions, my Ministry has agreed to the proposal for the Central Provident Fund (CPF) Board to act as the collecting agent. This will allow employers of Indian Singaporeans to deduct contributions from the wages of their Indian employees and pay them to SINDA through the CPF Board.

In the case of contributions to MENDAKI from Muslim Singaporeans, the opting-out scheme was effected through amendments to the Administration of the Muslim Law Act. However, there is no parallel legislation for the Indian community. Hence, the scheme for SINDA has to be effected through amendments to the CPF Act.

Sir, the amendments are to be made to section 76 of the Act. A new subsection (2) will empower an employer to deduct the specified amount from the monthly wages of an employee who belongs to a particular community and contribute it to an approved fund set up for the educational, social and economic advancement of that community. An employee who does not wish to contribute can opt out by notifying his employer in writing. Subsection (3) will empower the CPF Board to make the necessary rules for the collection of the contributions.

Sir, I beg to move.

Question proposed.

Mr R. Sinnakaruppan (Kampong Glam GRC): ( In Tamil): Mr Speaker, Sir, I wish to speak in support of the Central Provident Fund (Amendment) Bill.

Last year, the Action Committee on Indian Education, headed by Mr J.Y. Pillay, reviewed the statistics relating to the educational performance of Indian students who were under-performing at all levels. It released a 20-year programme to correct the educational under-performance of the Indian students.

Funds are essential for the successful implementation of the educational programme. The Action Committee has estimated that for the Singapore Indian Development Association (SINDA) to fully implement its educational programme, it will require $3.75 million annually. From this sum, the expenses for various projects such as tuition classes, parent counselling sessions, bursaries for students from lower income background, administrative costs of SINDA and the costs of publicity shall be met. Although a sizable sum may be obtained from tuition fees, the remaining $2 1/2 million can only be sourced through fund raising activities.

It will take many years for SINDA to achieve its long-term goals in education. It would be difficult to embark and implement new and innovative fund raising activities each year. If fund raising methods are too erratic or inadequate, then there may be a situation, in some years, of not being able to implement the planned programmes. Therefore, in order to achieve the long-term objective of SINDA, a stable form of fund raising mechanism is necessary. For these reasons, the Action Committee on Indian Education had recommended that the Government gives approval for all Indian Singaporeans who are members of CPF to contribute monthly to the SINDA fund under an "opting out" scheme. The Indian organisations wholeheartedly suppported this suggestion.

Acceding to the request of the Action Committee, the Government has come forward to extend this scheme, which is currently implemented only for the Malays, for the educational, social and economic advancement of any community in Singapore. This gesture by the Government is indeed very laudable.

The Central Provident Fund (Amendment) Bill provides for employers to deduct from their employee's monthly take-home pay, a prescribed amount, according to their level of income, to a fund, approved by the Government, for the advancement of any community living in Singapore.

In a multi-racial Singapore, the under-performance of any one community would inevitably affect the progress of Singapore as a whole. The Indian community has made an important contribution to the development of Singapore from the early years. For it to continue to exist as an important community, all Indian Singaporeans must contribute their share towards this end.

There are 68,000 Indians who are CPF contributors. I am confident that Indian Singaporeans would come forward to contribute, according to their means, for the advancement of the Indian Community. I wish to urge the professionals to contribute more than the prescribed amount to the fund.

Sir, I support the amendment Bill.

Mr Chng Hee Kok (Tampines GRC): Mr Speaker, Sir, I just want to raise one question with the Minister. This relates to the opting out scheme contributions. There is a prescribed penalty for employers if they do not make the necessary deductions or contributions from employees, but it is incumbent upon the employer to decide whether a particular employee belongs to a particular community. If an employee does not opt out, then the employers can be left with the problem of trying to decide whether certain employees are members or not members of a particular community. I just want to know what is the experience of MENDAKI and whether the Minister has considered how employers can be protected in the event that there may not be a very clear-cut case of whether certain employees belong or do not belong to a particular community.

The Minister of State for Information and the Arts and Education (Dr Ker Sin Tze): ( In Mandarin): Mr Speaker, Sir, I am aware that the Chinese Chamber of Commerce and Industry and the clan associations are in the process of forming a council to help the Chinese community. I would like to ask the Minister for Labour whether this amendment Bill will be applicable to the fund raising campaign of this proposed council.

Dr S. Vasoo (Tanjong Pagar GRC): Mr Speaker, Sir, I would like to thank the Minister for moving the Bill to amend the CPF Act. The amendment will provide a new lease of movement for the Indian community, particularly the Singaporean Indian community, to organise various activities and programmes to enhance the educational aspects of the children of the Indian community. I do not have any queries but to thank the Minister for the support. I hope that the Indian community will be able to get itself organised because, as you all know, there are various Indian groups in the community. And with this amendment, I hope that the various dialect speaking groups and the various Indian organisations, be they social, cultural or educational, will be able to get together to do the best they can to promote education for the children of Singaporean Indians.

Sir, I would like to thank the Minister for moving the amendment Bill.

Dr Lee Boon Yang: Mr Speaker, Sir, I would like to thank Mr Sinnakaruppan, Member for Kampong Glam GRC, for supporting the Bill. I certainly agree with Mr Sinnakaruppan that in a multi-racial Singapore, the under-performance of any one community is most undesirable. And we should always try to help any community which is not performing up to the national standard.

With this amendment, I believe that SINDA would be able to reach out to the whole of the Indian community to get its support. SINDA has estimated that it would be able to raise $2 1/2 million per annum with this CPF check-off system, and I would urge all Indian Singaporeans to support this scheme.

I also want to take this opportunity to point out that SINDA is not just depending on the CPF check-off scheme to raise funds in support of its activities. SINDA has also set up, as a long-term target, an effort to raise an endowment fund of $30 million from among the more well-to-do Indians in Singapore. And I would again urge that the more successful Indian Singaporeans to also support SINDA's effort to build up an endowment fund.

Sir, on the question raised by Mr Chng Hee Kok, in the implementation of the CPF check-off system for MENDAKI, both the CPF Board and the employers have not encountered any difficulties in deciding whether a person belongs to a particular community. I do not envisage that such a problem will arise following this amendment to the CPF Act to enable the Indian community to make their contribution through a check-off system. But I would like to remind Mr Chng that should there be any doubt, the employee is always entitled to notify his employer that he does not want to make the contribution. So there is a full protection for the employee in this instance.

Mr Speaker, Sir, on Dr Ker's question of whether the amendment before us will apply in the case of the Chinese Development Assistance Council's desire to set up a similar fund to develop programmes in support of the lower-income Chinese, since the objective of the CDAC is very similar to what has been discussed here, I would support CDAC's application to avail itself of the CPF check-off system to raise funds from among the Chinese community.

I want to thank Dr Vasoo for his support and I also agree with him that at this juncture it is imperative that the Indian community, particularly all the community organisations, get together to give their full support to SINDA.

Mr Chng Hee Kok: Sir, I am afraid the Minister misunderstood my question. I wish to seek a clarification from the Minister.

Mr Speaker: Order, Mr Chng. The debate is over. I am sorry I cannot allow you to seek a clarification.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Com-mittee on the Bill. - [Dr Lee Boon Yang].

Bill considered in Committee.

[Mr Speaker in the Chair]

Clause 1 -

The Chairman: Mr Chng, you may seek your clarification now.

Mr Chng Hee Kok: Sir, my question to the Minister earlier in the Second Reading was that the Bill makes it incumbent upon the employer to determine that a certain member belongs to the Indian community. And in the event of a doubt, the employer does not make a deduction from that person who happens to be a person from the Indian community, then he is guilty of an offence. My question is: what is the protection for the employer in the case when he is not sure whether an employee is an Indian or not an Indian?

Dr Lee Boon Yang: Mr Speaker, Sir, I think the problem can be very easily resolved. If the employer is not sure whether or not his particular employee belongs to the Indian community, he can just ask the employee, "Are you a member of the Indian community and do you wish to contribute?"

Mr Chng Hee Kok: Sir, I do not think it is as simple as that. Unless the employee signs a statutory declaration to say that he is not, the employer is still not protected, because at the end of the day, the employer can still be charged as he has relied upon the statement of the employee. I think it is an important point for employers to resolve. In the Malay community, I do not know how it is done. Maybe there is less of a problem. But in the Indian community, there are many denominations and so on. I wonder whether the Minister has really considered this in full.

Dr Lee Boon Yang: Mr Speaker, Sir, as I have mentioned earlier on, in the implementation of the MENDAKI check-off system, both MENDAKI and the CPF Board have not encountered any such difficulties. As I said, although the responsibility is placed on the employer to make the deduction, if there is any doubt he can always check with his employees. And if his employee should feel that he is not a member of the Indian community and does not want to contribute, there are forms that will be made readily available for such employees to just fill up, and the forms can be returned both to the employer and SINDA.

The Parliamentary Secretary to the Minister for Information and the Arts (Encik Mohamad Maidin B P M): Sir, at this juncture, maybe it is worth mentioning that there is a group in the Indian community who also belongs to the Muslim community and who has, for the past 10 years or so, been making monthly contributions to the MENDAKI Foundation. Sir, if I am not mistaken, there are roughly about 50,000 of them in Singapore. With this new Bill, which deserves all our support, this group of Indian Muslims may be faced with the question whether they should contribute to SINDA or MENDAKI, or both. I do not know how the Ministry of Labour or the CPF Board will look into this question. Of course, we hope that those who can afford it will do whatever they can to support both the movements. I think this question is in the minds of many Indians who believe in self-help projects but who may be having some difficulty, especially those who are not so well-off, to contribute to the two groups. But at the same time, the MENDAKI Foundation is also in need of monthly contributions. So I hope the group of Indian Muslims in Singapore will try to balance their support between these two groups. I think many of them are asking how best they could help and what is their position after the passing of this new Bill.

Dr Lee Boon Yang: Sir, in response to Mr Maidin's comments, let me assure Members of this House that although the scheme is structured as a CPF check-off scheme, it is not a mandatory scheme. It is up to the Indian Muslim worker to decide for himself who and how much he wants to contribute. An Indian Muslim is fully welcomed to contribute both to Mendaki and to SINDA at the same time. But if he is earning such a small salary and is unable to make contributions to both organisations at the same time, he is also entirely free to just submit a form to his employer saying, "I am not making a contribution to SINDA or, for that matter, to MENDAKI". That is his choice. So Indian members of the community are free to decide which organisation they should donate to. So there is no compulsion. The opting-out scheme is structured purely for the convenience of the donors and the employers and SINDA.

Clauses 1 and 2 ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.