ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1992 TO 31ST MARCH, 1993

Order read for consideration in Committee of Supply [3rd Allotted Day].

[Mr Speaker in the Chair]

Head Q (cont.) -

Encik Zulkifli bin Mohammed (Jalan Besar GRC): Sir, I beg to move,

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

Sir, not many of us know at close quarters what it takes to be an ambulance officer with the Emergency Ambulance Service. I am told it is not uncommon to see an ambulance crew attending to four to five cases a day, ranging from a rush-hour road accident to a suicide attempt. Despite being subjected to tremendous work pressures and sometimes the most trying of situations, I am also told that the ambulance crew demonstrate a high level of commitment and dedication.

Sir, the integration of the Singapore Civil Defence Force and the Singapore Fire Service took place two years ago and one desirable outcome is the efficient Emergency Ambulance Service that the public is able to have access to. I am happy to read from recent newspaper reports that most emergency calls were responded to within eight minutes. Given the present traffic volume on our roads, this is no mean achievement and something that all Singaporeans can be proud of. However, Sir, I am concerned that it may be difficult to maintain such fast response at all times. For example, during peak hours, our ambulances may get held up and may not be able to keep within the eight minutes norm. The situation may worsen when our roads become more congested in future. Accidents may also increase, and of concern here are accidents involving pedestrians as our population becomes older. Thus, I can foresee a scenario where lives may be in grave danger which could result in unnecessary loss of lives.

Sir, I would like to ask the Minister whether the SJCDF is taking measures to further improve the Emergency Ambulance Service to ensure that high standards can be maintained at all times in the future.

Another point I wish to raise, Sir, is regarding the comfort in our ambulance fleet. I understand that only some of our ambulances are air-conditioned. Could the Minister inform the House whether there are plans to air-condition the whole ambulance fleet or, if not, what steps are being taken to make our non-airconditioned ambulances more comfortable.

Sir, since I have another cut, may I proceed with it?

The Chairman: Yes.

Encik Zulkifli bin Mohammed: Thank you, Sir. One of the main reasons for the high incidence of death in buildings when a big fire breaks out is the lack of fire safety features. It need not be over-emphasised that buildings must be designed with adequate fire safety features so that in the event of an inferno people have a reasonable chance to escape and firemen have a fair chance of fighting the flames and protecting people and property.

Fortunately, in modern Singapore, with its many high-rise buildings, there is a high level of fire safety consciousness. Last year, there were over 5,000 fires and the total value of property lost was over $20 million. Some lives were also lost. Some of our older buildings, because they were built long before we have our current fire safety laws, remain fire hazardous.

I am aware that the SJCDF has imposed stringent and high standards upon themselves to ensure that they run an efficient fire service and have very sound contingency plans to deal with major fire disasters. But I believe more can be done. For example, we need to constantly review the fire safety standards in our laws, and focus particular attention to the role of management of public buildings in ensuring that fire prevention measures are carried out.

In this regard, Sir, I recall that in 1989, the Senior Minister of State for Home Affairs mentioned about the need to review our fire safety legislation by giving more powers to the Singapore Fire Service to deal with, among other things, offences such as causing obstruction to fire escape routes. Since then, I would like to know whether there has been an increase in the number of offences detected amongst building owners or occupiers and what enforcement action has been taken.

Could the Minister also tell the House what progress has been made so far with regard to additional measures being taken to further improve fire safety in Singapore and what has been done to tighten our fire safety standards.

The Minister for Home Affairs (Prof. S. Jayakumar): Sir, let me first respond to Encik Zulkifli's remarks and questions on the ambulance service. I share his concern over the response time for emergency ambulance and if the response time is not satisfactory, there will be a delay in arriving at the site and to attend to casualties. In particular, I take his point that the emergency ambulance responses during periods of peak traffic and during periods of congestion are matters which have to be looked into.

Over the last three years, the response time for emergency ambulance service has, in fact, improved from 10.17 minutes to 8.7 minutes last year. Moreover, the percentage of ambulance calls which were responded to within 11 minutes increased from 64% to 74% last year. One of the reasons for this achievement was the introduction of computer-aided despatch system, known as the Singapore Ambulance and Fire Emergency System (SAFES). This is a good achievement, but it is difficult to keep this response time of eight minutes when we are talking of peak hours or when there is tremendous congestion on the roads, particularly when an accident occurs. This can delay the arrival of the ambulance.

Last year, our survey showed that of a monthly average of 800 road traffic accidents where ambulances were called, about 150 cases, or 19%, the response time was more than 11 minutes and this, we found out, was mainly because the ambulances had been delayed in traffic congestion. This works out to about five accidents per day in that kind of situation. So we have, in fact, been studying this problem and figuring out what is the best way to tackle it.

What we have decided to do, Sir, is to introduce what we call Fast Response Medics on Motor-cycles, similar to the UK and Hong Kong. For a start, we will test on a pilot project where there will be four teams of medics, each having two medics on motorcycles. They will be deployed in two shifts during peak traffic hours. They will respond to road traffic accidents, to render first-aid to victims and we believe that these medics on motorcycles will be able to get through traffic even more speedily and arrive ahead of the ambulance which will be despatched at the same time. These fast response medics are not a substitute for an ambulance but they can reach an accident victim faster. They will administer first aid to the victim and the ambulance that will come later will convey the injured person to hospital.

With a faster response time, this idea that we are going to implement will save lives and faster attending to injuries. When introduced, the Civil Defence aims to reach a road traffic accident victim within seven minutes even in bad traffic congestion. This pilot scheme of fast response medics on wheels will be launched in the last quarter of this year. Selected medics will be trained by the Ministry of Health and Civil Defence. The pilot scheme will run for about a year, after which we will evaluate the results and, if successful, more medics will be trained and deployed and the scheme can then be formalised and be more extensive. 12.45 pm

As for Mr Zulkifli's points about airconditioning of ambulances, I will have to look into this and give him a situation report on some other occasion.

Next, his points about fire safety. I wish to assure the Member that we take fire safety and fire fighting very seriously, in particular in high-rise buildings. I can be quite frank in this House about the main preoccupations of Civil Defence and the Ministry as to what peace-time civil defence disasters that we are worried about. We do not have the kind of disasters that other countries have - earthquakes, typhoons, floods on an extensive scale. I think it is also very unlikely that we will get many incidents like the Hotel New World collapse. So what is the peace-time civil defence disaster that we worry about most? It is that of a major high-rise fire.

Fortunately, we have very strict building controls and fire safety requirements. But then, even in Singapore with these controls, because of a human error or a lapse in judgment, we can have a towering inferno. And when a big fire takes place, everyone, the building management, the occupants, as well as Civil Defence and other Government agencies which respond to the incident must know exactly what to do. That is why we take fire prevention and fire fighting seriously. And that is why we also place such importance on exercises. Exercises are important because our CD fire fighting and rescue personnel must be fully equipped and ready to tackle any fire. We must be prepared for the worst while hoping for the best. That is the motto of the Civil Defence.

With so many high-rise buildings in Singapore, Civil Defence has to be geared to fight even the biggest and the worst fire in a high-rise building. For this reason, Civil Defence and the Police have organised and conducted a high-rise fire exercise at Raffles City last year which involved more than 1,000 people from some 10 Government agencies. This helped the various emergency authorities coordinate and improve their plans to cope with high-rise fires.

The value of such exercises is also to remind the public to be constantly vigilant and to be alert and to react correctly in such fire situations. Periodic exercises to test CD's contingency plans to fight major fires are therefore necessary and will be carried out.

As for Mr Zulkifli's questions on fire safety, we have been reviewing the fire safety legislation. The fact is there are many inadequacies in our existing laws. For example, what do we do when the management of a building ignores basic requirements like making free access to the fire exits? What happens if they lock it up? Or they obstruct it with heavy equipment which cannot be moved in a fire? Civil Defence needs additional powers to abate fire hazards and to place more responsibility on building managements and owners to maintain fire safety systems. Managements and owners of public buildings will also be given added responsibilities to ensure that fire preventive measures such as evacuation drills are carried out. Therefore, we have completed the review of the legislation and new laws concerning fire safety will be introduced in Parliament.

As regards a Fire Code, the Fire Safety Bureau has completed a review of the Code in November last year and the new Code incorporates changes to fire safety requirements such as provision for exits from residential units, smoke control systems for atriums and so on. This Code was reviewed with the active participation and contribution of both practitioners such as architects and engineers as well as Government authorities such as PWD, Building Control Division, URA and HDB. They contributed their experience and knowledge of fire safety design in this review process. The professionals have been given a six-month grace period to comply with this new Code.

But it is not enough for the Fire Safety Bureau to vet building plans for fire safety. Regular checks have also to be carried out by Civil Defence. Such checks would ensure that all fire protection systems are serviced and properly maintained. And the fire escape routes are kept clear for quick evacuation during an outbreak of fire.

We also conduct surprise checks on premises where managements have previously flouted the fire safety rules. During festive seasons when shopping complexes are packed with shoppers and shops stocked with goods, sometimes blocking fire exits, surprise checks are also intensified.

Sir, I hope that answers Mr Zulkifli's queries on measures which are being taken.

Encik Zulkifli bin Mohammed: Sir, may I just ask the Minister when will these amendments be completed?

Prof. Jayakumar: The Bill is now being drafted and I expect to be able to introduce the Bill some time in the second half of this year.

Encik Zulkifli bin Mohammed: Sir, I am satisfied with the Minister's answer and I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Mr Kenneth Chen Koon Lap (Hong Kah GRC): Sir, I beg to move,

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

Sir, drug addiction is the most deadly social disease that can be inflicted upon a society. It destroys a person's mind and body, breaking up families and its cause for increase involves syndicated crimes as well as crimes committed by desperate drug addicts, not to mention the spread of the deadly disease AIDS. In Singapore, we are fortunate that this horrendous problem has been under control due to the relentless effort by our Central Narcotics Bureau and also our stringent laws dealing with drug traffickers.

Nevertheless, I wish to express my concern on two aspects of drug control. The first is in prevention. Once a person is addicted to drugs, recovery process is both difficult and at times futile. Therefore, every effort should be concentrated on reducing, if not eliminating, the supply of drugs into our state. In this respect, I welcome the law of seizure of the assets of drug traffickers which was recently introduced into Parliament. When it becomes law, it will reinforce our already tough law against major drug traffickers. But we must also constantly be vigilant against small-time traffickers who can slip drugs into Singapore by various means. For example, at the moment, those who cross into Singapore by train have ample opportunities to dispose of the drug they bring in along the way to Keppel Station where the Customs is situated. I would therefore like to know what is the CNB's assessment on the new trend in the drug situation and what plans the Bureau has in monitoring and taking action against drug traffickers.

I am also equally concerned about the new drug called "ice" being brought into Singapore, as I understand that "ice" is equally, if not more, deadly than heroin, and I believe it is more difficult to detect. I would like to know what steps the Ministry has to ensure that "ice" does not take root in Singapore.

The second point is in rehabilitation. Although the Ministry has spared no effort in reviewing and improving its programme for drug addicts, the relapse rate, I believe, is still very high. I would like therefore to know whether the Ministry has enough facilities and manpower to cope with the rehabilitation of drug addicts.

The electronic monitoring system has been introduced recently. I would like to know how effective is the system and whether it has caused any side-effects to the users' families and employers.

Finally, I would like the Minister's assessment on the contribution of half-way houses, and whether enough half-way houses have been provided for the drug addict population and what more can half-way houses themselves do to complement the Government's efforts in rehabilitating drug addicts.

Prof. Jayakumar: Mr Speaker, Sir, in response to Mr Kenneth Chen's comments on the drug situation, I am glad to tell him that the drug situation last year was in fact quite satisfactory. We have to view things in context. What is the global situation, and how does Singapore's situation compare to it? As regards the global situation, in fact, the UN agency, the International Narcotics Control Board, reported that there was a world-wide increase in the production, smuggling and consumption of drugs last year. But viewed against that, in Singapore, we managed to contain the drug problem. For example, last year, we had a drop in the number of drug offences detected. Some 5,085 drug offences were detected compared to 5,500 in the previous year, which was a decrease of about 7%. There was also a drop in the number of newcomers or new addicts to the drug scene. There were 860 newcomers compared to almost 1,000 the previous year. This was a decrease of more than 12%. Furthermore, there were fewer drug traffickers who were arrested last year, 241 compared to 374 the previous year, a decrease of about 42%.

On the international drug scene, I would say that Singapore is being used increasingly as a transit centre. There was some publicity on this in the newspapers recently. A transit centre in the sense that the drugs which are coming in at the airport are destined for other countries. For instance, heroin trafficking is conducted through networks involving Nigerians now who act as couriers for drug syndicates. To counter this, Customs and CNB officials are deployed at the airport to frisk and check suspected passengers arriving from drug-producing countries.

The most effective way to deal with these international syndicates really is through very close liaison, exchange of intelligence, coordination and cooperation between the CNB and other international agencies in other countries. So CNB is enhancing its intelligence network so as to help identify the leaders of drug syndicates and distributors. With these measures, we think the drug abuse problem can continue to be under control.

1.00 pm

He asked about "ice" which is amphetamine. Although the abuse of this drug appears to be quite widespread in countries like Japan, Hawaii, Philippines and Taiwan, fortunately, we do not have much of it in Singapore. In fact, there are very few reports of this. The CNB detected a case recently where a small quantity of the drug was seized. It was an isolated incident and the drug was not meant for local consumption. But amphetamine, which is a stimulant drug, is already covered by our laws as a Class B drug under the Misuse of Drugs Act. The CNB is monitoring the situation and if there is an abuse of this drug, we will introduce harsher penalties to prevent widespread abuse.

As far as the electronic monitoring system (EMS) is concerned, which was introduced in 1991, it has been extended to drug addicts discharged from the day-release camps. Actually, before we introduced it, Prison officers themselves wore the electronic bracelets so that we have hands-on experience. I am glad to say that the EMS system appears to be effective because when we compare two cohorts, cohort under the EMS and the cohort not under the EMS, the relapse rate for those wearing the electronic bracelets was very much less. From interviews with families of drug addicts, we know that they were receptive to electronic monitoring. They have reported improvements in the behaviour and relationship with the ex-drug addict, because it is helpful to the drug addicts' rehabilitation. He is able to return to the family, he is able to go back to work and provide income for the family. Yet electronic monitoring enables us to keep track of him, and when he defaults we can take measures. Later on, as we have more experience with the EMS, we will extend it to include those on police supervision as well as female drug addicts.

As for half-way houses, we now have seven half-way houses. I think they provide a very useful adjunct or complement to the CNB's and Prisons' efforts to rehabilitate. We will consider whether we can extend the use of the half-way houses. For example, we are considering a proposal to allow suitable half-way houses to take in day-release inmates as residents. We will work with CNB and Prisons to consider this suggestion. If feasible, those who are released on day-release can be allowed to stay in certain halfway houses subject to the normal conditions, which are: he must be employed, subject to surprise urine tests and there must be curfew hours. But we will work this out after evaluating the experience of the existing half-way houses.

Mr Kenneth Chen Koon Lap: Sir, since the electronic monitoring system is so effective, would the Minister consider using that on other lesser criminals so as to relieve our already over-crowded prisons?

Prof. Jayakumar: We have in fact tried the various possibilities of extending the electronic monitoring system, but I want to be very sure that what we are trying out now is fully evaluated - what are the problems and what measures we can take to overcome the problems before we make extensive use of it in other areas. We must be sure that it is feasible and practicable.

Mr Kenneth Chen Koon Lap: Having got a very satisfactory answer to my questions, I wish to withdraw my amendment.

Amendment, by leave, withdrawn.

Dr Arthur Beng Kian Lam (Bedok GRC): Sir, I beg to move,

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

Sir, I would like to ask the Minister what new measures will be introduced at the Woodlands Checkpoint to more efficiently clear the heavy traffic of railway travellers and the measures that he intends to introduce to curb drug trafficking via this route.

Prof. Jayakumar: Sir, my Ministry is very concerned over the problems which we have encountered in drug trafficking and illegal entry due to the fact that the passengers arriving by rail are not cleared at the checkpoint, and they are cleared only after they have arrived at the Keppel Station. Although CNB and the Police main tain vigilance, it is really not possible to station officers all along the very extensive line from Woodlands to Keppel Station. The fact that there is no prior clearance at Woodlands gives rise to many opportunities for passengers to throw out of the window enroute to Keppel Station prohibited goods, particularly drugs, as well as it is possible for persons who are illegal immigrants to pass Woodlands, but before the train arrives at Keppel Station, to jump off the train.

As for drugs, for the last two years, CNB has detected at least 15 cases of drugs, either on board the train, or being thrown outside on the railway track. It is very difficult to catch the offenders, although we have caught some of them. Recently, one has been sentenced to death.

As for illegal entry, since 1989, we have detected at least 11 cases of illegal entry jumping off the trains after entering Singapore and reaching Keppel Station. Those are the instances where we have detected, but because we cannot station people at every segment of the railway, I suspect the numbers are very much more.

The Government has therefore decided that we cannot allow the situation to continue. Therefore, we intend to shift Immigration, Police and Customs clearance for rail passengers and cargo from Keppel Station to Woodlands Checkpoint. Not only would we be able to deal with the drug and illegal entry problems, but there will be better utilisation of manpower at the Woodlands Checkpoint for clearance of both rail and road passengers. This centralised clearance of rail and road passengers will enable us to check all rail passengers immediately upon their entry into Singapore at the Woodlands Checkpoint. This was mentioned in the Ministry's Addendum to the President's Address.

At the moment, PWD is finalising plans for the redevelopment of Woodlands Checkpoint to incorporate Immigration and Customs clearance for all land entries, ie, by road and rail for passengers as well as cargoes. New railway arrival and departure platforms will be built. Railway cargo clearance facilities will also be provided. We plan to complete these facilities in 1994 or 1995 so that Singapore Immigration and Customs clearance for rail passengers and cargo can be then relocated from Keppel Station to the Woodlands Checkpoint within two to three years. I might also add that we have informed the Malaysian Government of our intention and our officials will discuss with their counterparts from Malaysia the details concerning the implementation of this shift of clearance from Keppel Station to Woodlands.

Dr Arthur Beng Kian Lam: Sir, I am glad that the Minister has a permanent solution to these problems. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $603,056,900 for Head Q ordered to stand part of the Main Estimates.

The sum of $208,414,800 for Head Q ordered to stand part of the Development Estimates.

Head N -

Dr Ow Chin Hock (Leng Kee): ( In Mandarin): Sir, I beg to move,

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

Under this amendment, I would like to talk about the Singapore Dollar Exchange Rate. In discussing whether the exchange rate of the Singapore dollar is on a high side, we should carefully weigh the pluses and minuses of the strong dollar before we can come to a conclusion. People, in general, welcome a strong Singapore dollar. If the Singapore dollar is stronger, then the imported food and so on will be cheaper for Singaporeans. Also, when they go overseas or travel in neighbouring countries, a stronger Singapore dollar will give them higher purchasing power. I know that many individual Singaporeans and community organisations have organised tour groups to our neighbouring country to buy Chinese New Year goodies during the festive season. This is the advantage of a strong Singapore dollar.

On the other hand, people in business and industry feel that a strong Singapore dollar is unfavourable to our export competitiveness. If the Singapore dollar is allowed to weaken, then our export prices will be correspondingly lower and this will increase our export competitiveness. Personally, I feel that if the Singapore dollar is allowed to weaken, it may increase our volume of exports, but it will not necessarily increase the value of our exports. This will depend on the price elasticity of demand for our export goods. Furthermore, if the Singapore dollar is allowed to weaken, then the prices of our raw materials, spare parts, machinery and equipment, will be increased. Therefore, our value-added per unit will correspondingly be lower.

Another impact of a weak Singapore dollar is that if there is an increase in our volume of export, then the demand for labour will also increase. Given the present tight labour market, this will further result in higher wages. Furthermore, if the Singapore dollar is allowed to weaken, then the inflation of imports will cause a rising cost of living for Singapore workers, who will then ask for higher money wages to maintain their real income. In this way, the profits of our export business will be lower and it will affect our export competitiveness in the long run. If Singapore wanted to adjust the exchange rate of Singapore dollar, then as far back as 1985 or 1986 when we had economic recession, the Government could have devalued the Singapore dollar to avoid the painful measures of lowering the employers' CPF contribution rate and wage restraint.

Over the past five years, Sir, our steady economic growth shows that the painful measures adopted at that time were correct ones. On the question of maintaining the exchange rate of the Singapore dollar, I am in full support of the Minister for Finance. Here, I would simply ask him two questions: (1) I notice from the capital accounts in the balance of payments, that our surpluses have dropped from $12 billion in 1990 to $5.4 billion last year. I think the main reason is the outflow of capital. I would like to ask the Minister for Finance if we want to maintain the strength of the Singapore dollar, whether the MAS will adjust the interest rates to reverse the trend of the capital outflow. (2) We forecast an economic slowdown this year. The financial surpluses of the Government will also be lower. Will this cause any speculative activity in the expectation of a weakening Singapore dollar to force the Singapore dollar exchange rate down?

Mr Chew Heng Ching (Eunos GRC): Sir, I am not speaking.

Mr Leong Horn Kee (Thomson GRC): Sir, I am not speaking.

Dr Ow Chin Hock: Sir, the second issue I would like to raise is Manpower in the Civil Service.

Last year, in the Committee of Supply, during the debate on the Ministry of Finance, the Minister observed that job-hopping was likely to persist, as long as the unemployment rate was below the national rate of unemployment, which was then estimated to be about 3%. The Minister also admitted that the job-hopping problem was serious. At that time, he was referring to the job-hopping problem of the whole economy in reply to a question by Mr Chandra Das. 1.15 pm

Today, I would like to ask him about job-hopping among civil servants. How serious is the problem of job-hopping among civil servants? What is the overall turnover rate of the civil service? In his view, what is the acceptable rate of turnover? What are the characteristics of these job-hoppers among civil servants in terms of age, sex, education level and length of service?

In some departments, such as Inland Revenue and Audit, where experiences command certain premium market values, are turnover rates higher than the overall rate of turnover for the civil service? Is the quality of services in these departments compromised in any way?

The second question I would like to raise is about the conversion of civil servants on the pension scheme to the CPF scheme. I am raising this on behalf of the ex-MP, Mr Sia Khoon Seong. Last year, Mr Sia asked the Minister a similar question. The question was whether another exercise will be mounted to convert the civil servants on the pension scheme to the CPF scheme, and whether civil servants will be given an option. May I know whether the conversion scheme has been finalised and, if so, when will the exercise be implemented?

Final question, Sir. In view of the rising health cost, will medical benefits of civil servants be adjusted?

Mr Chew Heng Ching: Sir, I raised an observation in the debate on the Budget Statement on Tuesday, 10th March, that the civil service appears to be understaffed by about 10%. The Minister has not responded to this observation. I would like to raise this subject again under this cut.

I would like to bring the House's attention to a chart on page 19 of the Budget document which shows the manpower strength in the civil service -- approved establishment versus actual strength. If one studies the chart, one will notice that every year the actual strength is below the approved strength by about 10%, and this went as far back as FY 86. My question to the Minister is: Does it mean that the standard of our public service has suffered all these years because of this under-strength problem? And if not, and if the contrary is true that indeed the level of public service has remained as good as before, then my question to the Minister is: Why the need to retain so many unfilled vacant posts all these years? Should not the zero-base manpower exercise conducted after the last recession have actually deleted all these posts? This will make our public sector services even more efficient and keep Government expenditure even lower and also divert our financial resources to more productive use elsewhere within the public sector. I would like the Minister to comment on this observation.

Dr Ow Chin Hock: Sir, with your permission, I will not move Amendment (c) on Costs of Doing Business. Instead, I will speak on Amendment (d).

The Chairman: All right.

Dr Ow Chin Hock: ( In Mandarin): Sir, the next issue I wish to raise is the tax incentives for individual taxpayers.

In 1987 and 1989, the Minister for Finance granted what he called the procreation tax incentives to encourage more babies to be born. In 1989, the Minister for Labour also announced that a career woman who employed a foreign maid could also enjoy tax relief equivalent to twice the annual levy. In 1990, the Minister for Finance announced that this incentive would be extended to female divorcees with children and also to widows. This was a measure which was much welcomed by the people. Here I would like to ask the Minister for Finance whether such tax incentive could also be extended to two other categories of taxpayers. One, widowers or male divorcees who have to engage maids to look after their children or aged parents or handicapped members of their family. Secondly, the singles who have to engage maids to look after their aged parents or their handicapped members of family.

The next issue is that the present tax relief for foreign maid levy favours those women in the higher income group. Furthermore, each time the foreign maid levy is adjusted upwards, working women in the lower income group will find their burden heavier. I will give you one example. In the present upward revision of $50 in foreign maid levy, to those who earn only $1,000 a month, after tax relief, they have to bear an additional burden of $45. But to those women who earn $6,000 and above, they need only pay an additional $29. Furthermore, those women who earn only $1,000 a month are mostly office workers like clerks, typists, cashiers and blue-collar workers. These female workers are in short supply in many cases. So we should continue to encourage them to work instead of encouraging them to give up their jobs because of the continuous increase in the foreign maid levy. Therefore, I would like to ask the Minister for Finance, apart from the tax relief equivalent to twice the foreign maid levy, whether he will consider an additional tax rebate to offset each increase in the foreign maid levy. This will help those in the lower income group.

The third issue, Sir, is that in 1989 the Minister for Finance increased the tax relief for aged parents from $1,000 to $2,500. In 1990, this was further increased to $3,500. The idea is to encourage members of the family to look after their aged parents and the handicapped members of their family. Many taxpayers welcome this measure. But here I would like to ask one question, and many people have also asked this question, and that is, why can't the tax relief be applied to those who do not live together with their parents, or the handicapped members of the family? After all, they are looking after their parents all the same. This issue has been raised in Parliament on several occasions. In 1989, the Deputy Speaker and other Members of the House also raised this issue. But the Minister for Finance was not moved. He insisted on the condition that the taxpayers must live together with their parents to claim this tax relief. I do not agree with the Minister for Finance on this decision. Does he not mean that those who do not live with their parents do not care about their parents or the handicapped members of their family? Why can't they qualify for the said tax relief?

Mr Chew Heng Ching: Sir, because of the tight labour market situation, the Inland Revenue Department (IRD) faces problems in recruiting and retaining staff. As a result, a backlog of tax cases collected and not assessed has actually built up. I would like to ask the Minister how serious is this problem. Would he be able to give us an indication of the magnitude of this problem? Would he able to tell us how much tax revenue has actually been outstanding because of this manpower shortage problem faced by IRD? And how much additional revenue in terms of interest income foregone arising from this revenue not collected?

Sir, presumably, the solution lies in giving the Commissioner for Inland Revenue full autonomy and greater flexibility over personnel matters. Indeed, the policy announced in the last Presidential Address to decentralise the personnel functions of the civil service to the respective Permanent Secretaries will actually help address this problem of shortage of manpower. In this case, I presume that the Commissioner for Inland Revenue will also be given this power to hire and retain staff by paying market rate salaries.

Sir, if this decentralisation process is successful, it would mean that IRD could actually solve its problems without converting itself into a statutory board, if indeed the shortage of manpower problem is the main reason why IRD is considering converting into a statutory board. Perhaps the Minister may wish to enlighten the House the full rationale behind trying to statutorise IRD. Are there other reasons, besides personnel, which prompted the Ministry to consider making IRD into a statutory board?

Sir, I am not against IRD becoming a statutory board. If indeed it can follow the route or the path taken by the Central Provident Fund (CPF) which became a statutory board some years back, then I am confident that it can provide a more efficient and professional service to the tax paying public. I would like the Minister's comments on this observation.

Mr Koo Tsai Kee (Tanjong Pagar GRC): Sir, Singapore inherited the income tax system from Britain and for very good reasons. In the 19th century, Britain was the leading industrialised nation. She led the world with its taxation reforms. The three principles embodied by the British income tax system -- equity, simplicity and efficiency -- became the hallmark of all good income tax systems worldwide. Her system flashed across the Atlantic, the Washington people lapped it up and incorporated it into their income tax system, Europe incorporated much of the British system.

But, Sir, the world today is very different from the world of the 19th century. It is far more complex. And the system that was good for the 19th century is now difficult to service the needs of the 20th century and increasingly the needs of the 21st century. All governments -- Britain, Sweden, America -- realise this problem. So they develop various techniques, basically a hybrid of the wealth, income and the consumption tax system.

Sir, the present system has defects. But Chancellors, Finance Ministers and Treasurers in every country are trapped and are unable, sometimes unwilling, to institute fundamental tax reforms. So what do they do? They tinker here and there; a rebate here, a relief there, an increase here, and a removal there. No matter how they tinker, the pressure for tax cuts is ever present.

There is a saying in America, "There is always a good time for tax cuts." Norman Lamont delivered his budget on 10th March 1992, two days ago. He was under great pressure to cut taxes. He did, but did not cut it enough to please enough people, even though cutting of taxes is against the grain of most economists in the city of London. The Economist magazine cuts a sharp remark. It says, "It is too late for Norman Lamont to use his budget to revive the economy before the election [which will be held on 9th April], but he still has time to bribe the voters." Bribing the voters, of course, is nothing new. And John Major must be inspired by the American President. In the 1988 election, President Bush turned the tide against Michael Dukakis largely perhaps, maybe, and I think definitely, because of his, "Read my lips, no new taxes" bribe.

Views necessarily differ, Sir, but I concur with the school of economic thought which subscribes to the philosophy that for the long-term health of the nation, of the economy, fiscal tools like income tax rates must never be used as a counter-cyclical measure, unless the structure of public spending has changed, and that no increase in taxes will be needed when the economy recovers. In fact, indeed, in Singapore for the last 25 years the tax rates have come down because the structure of public spending has changed and I hope that, as we corporatise more, the tax rate can come down further.

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But cutting tax rate is the most powerful political tool, especially in an election year, like Britain and America are facing now. It is also the cheapest legal political bribe available to politicians, perfectly legal. So long as the PAP is in power, I am convinced that this would not be a weapon here.

But like the reasons for instituting the Elected President, we must also institute fundamental reforms in taxation so that we will dull this fiscal tool, make it less attractive. Why? I would explain later. Apart from this possible abuse of income tax rates, there are other defects to the present system. First, it sends money in the wrong direction, into spending instead of saving. Savings are penalised and expenditures are encouraged. Indeed, the malice now afflicting the developed countries comes from a spending culture which income tax explicitly and implicitly promotes and encourages.

Over the last decade, savings have fallen in every country - in America, as a percentage of GNP, from 9% in the 60s to 3% in the 80s; in Japan, the thriftiest nation on earth, experienced similar decline from 26% in the 60s to 20% in the 80s, a sharp drop of 6% over a period of about 20 years. The appetite for more consumption in Singapore is also on the rise. It is quite clear and evident.

The second reason why we should move against the present income tax system, Sir, is that income itself is hard to measure. Wages and salaries are easy to measure. But ask an accountant, an economist and a taxman to agree on fringe benefits and the task becomes a little more difficult; ask them and the consensus view on income from profits, from businesses and investment transactions becomes even more difficult to achieve.

Sir, the Government's intention to introduce consumption tax is a move in the right direction. Consumption tax shifts the burden of taxation from direct to indirect taxes. Clearly, the receipts from sales tax or the value-added tax would better reflect aggregate demand than receipts of income tax which tend to lag behind according to changes in employment.

But, Sir, to my mind, a better system is to shift the burden of income tax from the source of income to that of expenditure, in other words, from income that is saved to that which is spent. For companies, we should tax their "cash flows". If Britain were under an expenditure tax system, as it nearly did in 1986 under Margaret Thatcher and Nigel Lawson; John Major and Norman Lamont need never agonize so difficult over a tax cut, because in a recession, like they are facing now, the savings rate will rise with a corresponding fall in expenditure. Tax receipts will, therefore, fall correspondingly under this system. So there is no need to bribe the voters with a tax cut. You do not have to bribe them in any way because your expenditure is already coming down.

But if the expenditure tax is so superior, the Minister may rightly ask: why is it that no developed country has tried it? To this question, I like to pose a model question: since when have we in Singapore waited for a good idea to be implemented overseas before we convert ourselves to it? Because if we did, there will be no Area Licensing Scheme, there will be no COEs. Indeed, our economic strategy of riding on the back of MNCs in the early 60s was largely untested. But then the Minister may say, "This is a big scheme, it affects everybody." As far as the taxpayer is concerned, he is concerned whether he is paying more or not. As far as the Government is concerned, it wants to reflect aggregate demand. Under an expenditure tax system, the majority of Singaporeans would still not pay more taxes than they are now. Today, 60% pay 6%. Under the expenditure tax system, maybe 60% would still pay more or less 5% or 6%. It depends on how you structure it.

Coming back to the first question on why is it that most developed countries have toyed about it, talked about it, but did not implement it, like Britain, Sweden and America. The short answer is that they do not have the political system, the vision and the courage to go for it. With their confrontational and adversarial style of politics, it is very difficult, Sir. Who has tried it? In the 50s, Sri Lanka and India, following Kaldor's advice, tried it, but they failed. They failed for reasons that they were totally different from what Singapore is now; their economy was not sophisticated, not monetised and their tax office was not computerised. Whereas our system is quite different. Our tax office is as computerised as it can be.

Can the expenditure tax be implemented? The British and the American economists of every political stripe and persuasion say they can, uniting both Keynesian and non-Keynesian. The Meade Committee thinks it can. The American Treasury in a report in 1977 thinks it can.

The Minister may ask: will it be a massive invasion of privacy, the principal reason why it was not implemented in many countries? Not at all, Sir. Like it or not, we have embraced the credit card culture. Our expenditure pattern is already open to the credit card companies who document every cent we spend. In five to 10 years' time, when I suggest that we should implement the expenditure tax system, most Singaporeans would be spending every cent with their card. Those who do not qualify for the card would probably, I say "probably", not be taxed under the expenditure tax system anyway. When we expose ourselves to the American Express, to Visas, do we not trust the taxman even more? I do.

Will it spawn a massive tax avoidance racket, the Minister might ask? I do not think so, Sir. In fact, it would be easier to avoid taxes under the present income tax system. We are all familiar with tales of seemingly poor people who pay no income taxes but who spend conspicuously. Under the expenditure tax system, these people have no escape. Money, Sir, is only good for spending. Few people are keen on making all the money and then locking them away. One day we will spend them, they will spend them and when they do, the Minister's taxmen will be able to catch them.

Finally, discussion on expenditure tax usually excites iconoclasm, like Mr Heng Chiang Meng and myself, but send politicians to sleep. I notice that most Members are still awake and I think there is hope yet.

The Parliamentary Secretary to the Minister for Foreign Affairs (Encik Yatiman Yusof): Sir, after hearing the question of dollars and cents, taxation and expenditure, some of us may ask what have street names and residential building names got to do with the Ministry of Finance. Sir, the answer lies with the Property Tax Division under the Ministry which is responsible, inter alia, for deciding the names of streets and residential dwellings, with the assistance of an Advisory Committee in which I am one of the members. I, therefore, declare my interest.

Sir, naming of streets in both public and private residential places is a serious business. To an ordinary buyer and man-in-the-street, the name must strike a harmonious link with his taste. So their preference for something which is pleasant, warm, friendly and accommodative must be reflected. For some, especially those who spend a lot of money to buy a private property, the name must reflect some economic and social status. For some who believe in luck, the name must provide satisfaction in this area, and if possible, a lucky one. That is the reason why we have Lucky Heights, Lucky Plaza, and so on and so forth.

For our developers, Sir, the name is very important indeed. In fact, it is not an over-statement to say that whether a private housing project would succeed or fail in reaching, or being marketed, to the people will depend on how creative the pitching of the name is done.

As the concept of integrated or total development becomes more acceptable, more and more projects are evolved, involving the architects, the planners and designers that come together with the name of the project. So you have a combination of the architectural concept, the location and landscape, and the target group of potential buyers for such a project. As a result, Sir, we have names which are quite alien to us, such as, to name a few, Allsworth Park, The Aspine, Bullion Park, Casa Contendere, Palais Renaissance, or are difficult to pronounce, such as Casa Esperanza, The Collonnade, Juniper At Ardmore, La Ventura, just to name a few.

But some are good examples where the developers are able to creatively mould the local element with the sophistication of the modern life. Such examples can be found in names such as Bedok Court, Balestier Tower, Arang Court, Pasir Ris Garden, Peranakan Place, Kismis View, Lengkong Court. As the target group of the buyers are young, well travelled, English-educated professionals with big salaries, the naming of residential estates becomes an even more delicate operation.

Sir, the Advisory Committee tries to set guidelines to assist in a rational and systematic way of naming the streets and projects, to preserve historical names of the places, and, most important, to reflect Singaporeanness of such projects. Sir, upmost in our mind is the question of nation building and how this concept of nation building could be presented through naming of the streets, projects and buildings, so as to reflect our creative endeavour of preserving and enhancing our national identity.

If market forces and popular taste are to be allowed to dictate the market, one day we will have California, Aspen, and some Japanese names appearing in the middle of Singapore landscape because the developers and those educated in such places are more interested in buying places with special names. Because of this, Sir, we risk losing our real identity and also risk losing a precious instrument in which we are able to educate and build a framework of mind among the young to know their own country first before the other places.

We have learnt from the past that Singapore has been accused as one of those metropolitans with tall, glass, modern towers and lacking in identity. Following that, we are working hard to preserve those that remain as ours - Tanjong Pagar, Little India, and so on. My point is that we have to learn from this, and in terms of names, it is critical for us to preserve our identity and to make sure that Singapore remains unique and known throughout the world.

Mr Leong Horn Kee: Sir, before I speak on this subject of Singapore as a Financial Centre, I wish to declare my interest in that I am working in a merchant bank.

Singapore has established itself as an international financial centre. It has all the necessary credentials which include a strong domestic economy, stable currency, strategic location, a broad base of international and domestic financial institutions, established financial and banking expertise; and finally active stock markets. The financial sector has been chalking up double digit growth of about 15% per year for the last 10 to 15 years. However, last year the sector suddenly slowed down to only 2.9%, versus about 19% in 1990. In fact, it registered a negative growth, or a decline of 1.4% in the third quarter of 1991. Is it a symptom of Singapore losing itself and its edge as a financial centre? 1.45 pm

About two years ago, when the Malaysian and Singapore stock markets split up, we lost a large chunk of Malaysian stocks to trade in. However, the formation of the Central Limit Order Book or CLOB International helped to partially offset the loss. Last year, Malaysia announced that it would eventually convert its trading of shares in the stock market to scripless trading like Singapore. This may have an adverse effect on the trading of CLOB International.

We are aware that our neighbouring countries such as Malaysia and Thailand are trying to build up Kuala Lumpur and Bangkok as financial centres, thereby posing some competition to us. These are natural developments to expect. In this regard, the financial sector in Singapore is very heartened to hear from the Minister about the proposed double tax deduction scheme for financial institutions undertaking financial engineering or finance-related activities of an R&D nature. The objective of the scheme is very sound as it serves to advance Singapore's financial engineering expertise and thereby reinforcing Singapore as a financial centre. Its introduction is also very timely.

The question I have is that although we pride ourselves as an established financial centre, most financial engineering and financial R&D activities are undertaken by international banks in their headquarters in London or New York. Then these new financial concepts are passed on to lesser centres such as Singapore.

The aim of the proposed double taxation deduction scheme is very laudable. But I do wonder whether the incentive to be given is strong enough to induce financial wizards from London and New York to undertake such financial engineering activities in Singapore. Do our financial markets have the sophistication and maturity to test out and accept new concepts?

Mr Speaker, Sir, if you allow me, I will ask the Clerk to circulate a table which shows the comparative stock markets around the world measured by the total market capitalization or total worth of all the local companies listed in the respective stock markets. Looking through the chart, the largest stock market obviously is the USA which has US$3,696 billion worth of market capitalization. Japan is next with about US$2.6 trillion or US$2,600 billion. UK is next with about US$967 billion. When we compare ourselves, Singapore has only US$50 billion, you can see the comparison of the size of ourself as a financial centre versus these world markets. The US is about 73 times our Singapore market; Japan or Tokyo is about 51 times; and London is about 19 times.

Even if we compare the various markets listed in the Far East, Singapore is only listed number 8, behind markets of Malaysia, even India, Korea, Australia, Hong Kong and Taiwan. But the differentiation may not be just a matter of numbers, compared to our neighbouring countries. We must also take into account the qualitative measures in terms of number of companies and financial institutions we have in Singapore and the kind of activities we provide as a financial centre.

Sir, I think this chart is very stark in that it shows that for us to promote financial engineering, the market we have to play in, which means the playing field we have, is relatively small. If we have a bigger playing field, we have more room for innovations, more room for a variety of games and different types of activities. When the playing field is small, perhaps we can only do table tennis and badminton, and not games like golf, skiing or football. Our limitation is actually our size, to promote Singapore as a financial centre. I think the key for us in the next stage actually is to go for sophistication, or what the Minister calls financial engineering. We already have the basic infrastructure of companies, both local and foreign, in Singapore. The way to progress and improve ourselves is on a regional basis. To promote ourselves, at least as a regional financial centre, is to aim for financial sophistication of the Singapore centre. This is also a more difficult objective to achieve.

Sir, I feel that the people in the financial sector fully support the Finance Minister on the proposed scheme and would like to know more details of the scheme. If the Finance Minister can announce the details early, perhaps they can offer suggestions on how to make the proposed scheme more effective and thereby helping Singapore to be a better financial centre.

Mr Low Thia Khiang (Hougang): ( In Mandarin): Sir, I notice that our expenditure on manpower seems to have been over-budgeted. Of course, this over-budgeting has got to do with the manpower planing strategy in our civil service. I think Mr Chew Heng Ching has already mentioned this when he spoke earlier on. Take figure 1 of the Table. In 1990, the budgeted manpower expenditure was $137 million more than the actual expenditure. In 1991, the budget for manpower expenditure was $158 million more than the revised expenditure. So, there appears to be an increasing trend in over-budgeting. If we compare the actual manpower expenditure of 1991 to that of 1990, the increase was only 5%, whereas in this year's budget the Minister for Finance predicted an increase of 11.4% in manpower expenditure. In this way, would our budget for manpower expenditure not appear to be getting more and more over-budgeted? What I do not understand is that, basically, changes in manpower expenditure can normally be predicted quite accurately. For example, the annual wage increase, bonuses, adjustment in CPF, promotion, and even if you want to engage more people, you can always predict and project. Furthermore, as far as I know, the various Government Ministries and departments have already attained its target of "zero growth" on manpower. By right, expenditure on manpower should be estimated more accurately than any other type of expenditure.

More importantly, Sir, if our budget can be more prudent and accurate, then the substantial amount that has been over-budgeted every year can be used on more meaningful areas in improving the livelihood of the people or to lighten the burden of the people. Alternatively, if this over-budgeted amount is used for investment, we will be able to earn quite a handsome profit.

Another point I wish to raise is that in the Government's budget for manpower expenditure in the civil service, the Administrative Service takes up the largest share. Let us take a look at figure 2. In the 1992 budget for manpower expenditure, the Administrative Service which has the least number of officers in the various Ministries seems to have the highest average expenditure per person. Take the Ministry of Finance, for example. In the Ministry of Finance, there are only seven officers in the Administrative Service, but when I calculated their manpower expenditure, it works out to an average of more than $100,000 per officer. Whereas for the other categories of officers, totalling 4,150 in all, the average per head is only about $20,000.

Now, let us look at figure 3. On the average, the increase in manpower expenditure in the Administrative Service is generally much higher and faster than the others. In fact, it is double that of the other services. So if we allow this kind of increase in manpower expenditure to persist, then the Administrative Service will continue to have the fastest and highest increase in terms of manpower expenditure. Will this result in a lopsided development in the Government's manpower expenditure? May I ask the Minister for Finance whether this is a healthy state of affair?

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Speaker, Sir, first, I would like to thank Dr Ow Chin Hock for his support of our policy on the Singapore dollar exchange rate. I have said enough in my Budget response on Tuesday. So I shall not say any more about our policy on this matter.

Dr Ow has, however, expressed concern about the capital outflow position last year in which there was a decline in our capital account due to an outflow. However, I like to point out the apparent decline in Singapore's surplus on the capital account in the balance of payments last year merely reflected the unprecedented level that it had reached in 1990. The capital account surplus was a record $11.7 billion in 1990, exceeding even the total surpluses of the preceding six years taken together. It was therefore not possible to sustain this extraordinary capital inflow. The inflow reflected both a strong inflow of foreign direct investment and portfolio investments by foreigners in 1990, as well as substantial borrowings by the domestic banking system. Banks borrowed from abroad because of strong credit demand and tight liquidity due partly to several new share issues and a buoyant share market in the first half of the year.

In 1991, the capital account surplus was lower at $5.4 billion, but still remains far higher than in preceding years. It was more than twice the average for the period 1988 to 1989. I believe we should not be overly concerned with the swings in the short-term capital flows in response to interest rate movements. What matters is the underlying strength of our overall balance of payments, including the current account and both long-term and short-term capital flows. Singapore recorded a balance of payments surplus of $7.3 billion last year which was well above its average of the preceding three years.

Dr Ow also expressed concern that the slowing down of the Singapore economy may induce speculators to try and raid the Singapore dollar by attempting to force it down. I do not think this is likely to happen because speculators in 1985 were very badly beaten when they tried to take a negative position against the Singapore dollar because of the weakening of our economy. With the immense resources at its disposal, I think the MAS stands ready to clobber any attempt to do this again. I can assure Dr Ow that I think it is unlikely to happen.

Dr Ow has also expressed concern about manpower in the civil service and the question of job-hopping and wants to know what is the overall turnover rate in the civil service, what are the characteristics of job-hoppers and so forth, whether there are particular departments in the Ministries where these problems were especially severe. I can say that the overall turnover rate in the civil service as measured by the ratio of employees resigning from the service to the average civil service population base was around 3.8% last year. I think this is an acceptable and quite reasonable rate for an organisation as large as the civil service, especially considering our very tight labour market. 2.00 pm

We do not have a policy on what is an acceptable turnover rate, although naturally we would like to keep this as low as possible. But some degree of turnover, I think, is inevitable, particularly in Government Service, nor do we target any particular level which is comfortable. However, it is true that in certain Government departments, and in particular the Inland Revenue Department and the Auditor-General's Department, the overall rate of turnover was much higher. The reason for this is the strong pull from the financial sector which has been growing very rapidly over the last few years, attracting experienced accountants, tax specialists and so forth. The turnover rate in the Inland Revenue Department in 1991 was 11%, whereas it was 10% in the Auditor-General's Department. In the case of the Inland Revenue Department, a separate question has been asked about IRD's problems which I will deal with in greater detail later. But the high turnover was one of the reasons why we are proposing to convert the Inland Revenue Department into a statutory board.

Within Government itself we try to maintain levels of pay which are comparable to the private sector as far as it is feasible, and currently we are reviewing the whole compensation package for civil servants. And from time to time, we will see what needs to be done to ensure that the civil service will at least be able to attract and retain a sufficient number of high quality staff to ensure that the public service does nordsuffer.

The Member has also asked about the progress made in the conversion exercise from the pension scheme to the CPF scheme. This matter is still under review and when it is ready we will announce it. But I would like to emphasise that whatever proposal is introduced, civil servants will continue to have the option to elect to remain or take on any new scheme which they choose.

Dr Ow has also asked whether the Government is prepared to adjust medical benefits of civil servants in view of our rising costs. I believe that this is probably unnecessary because the existing package of medical benefits which the civil servants enjoy is quite generous; it is tax free and there are really small co-payments required. However, the issue of medical benefits for the civil service as a whole would be looked at periodically in the context of a total remuneration package.

Mr Chew Heng Ching has asked for some figures on why the Government continues to maintain establishment figures which are consistently, year in year out, larger than the actual staff numbers. I would like to explain that this arises because the establishment figures are reviewed periodically by the Auditor-General's Department and by the Ministries themselves to establish a desirable level of establishment for each Organ of State or Department. But the actual numbers which appear yearly reflect the actual numbers which can be filled. Government has for some years now been unable to fill a significant number of these vacancies because of the general pressure on staff in the economy as a whole. However, we are obliged to maintain the establishment figures in the hope that eventually these vacancies can be filled. Removing them permanently, even though our review ascertains that they are desirable and necessary posts, would mean that we are deliberately cutting out manpower positions which would result in the deterioration of services. So there is always going to be a gap between the establishment numbers and the actual staff numbers because of firstly, our inability to fully recruit to fill these gaps, and, secondly, it also provides a cushion for resignations and retirements and so forth.

Dr Ow has also asked whether the Ministry can extend the relief for maids to different categories of persons. I do not propose to respond to this in detail because the Minister for Labour has already discussed this in quite great detail a couple of days ago. However, I will take up his recommendation for consideration by my Ministry and by the Ministry of Labour again. Of course, the position is never static. We will look at it from time to time.

Mr Chew Heng Ching has asked a specific question about the Inland Revenue Department, whether it faces a particular problem, how serious is it, what is it costing Government, and what are the reasons underlying the conversion of the Inland Revenue Department into a statutory board. First, I would like to clarify that it is going to be converted into a statutory board, and not into a company. It is not being corporatised. The Inland Revenue Department faces a particular problem because of the attraction by the private sector for its experienced tax staff. They are very valuable and marketable people, and with growth in the financial sector tax specialists and accountants are in great demand. So it has suffered the highest degree of attrition of any Government Department or statutory board. As a result, this has caused serious problems in the Inland Revenue Department's ability to collect taxes. At the end of 1990, 35,000 or 50% of corporate tax cases remained unsettled. 380,000 or 40% of individual taxpayer cases also remained unassessed. 52,000 or 45% of small business cases also remained unassessed. The tax shortfall of uncollected tax due is about $1 billion, or 20% of total tax collectable. So the interest lost on this sum is very substantial and therefore something has to be done to correct this situation.

The intention is to introduce legislation some time this year to convert IRD into a statutory board. The advantage of being a statutory board is that the IRD will be able to hire and reward and remunerate the staff in accordance with market demands and the extra cost of new manpower which is required to catch up with the backlog of cases plus the extra remuneration they will have to pay will be more than covered by the foregone tax which we are unable to collect at the present time.

Mr Koo Tsai Kee gave a very passionate exposition in defence of the expenditure tax proposal. Whilst I do not disagree with him on the conceptual attractiveness of an expenditure tax proposal, unfortunately, it is extremely difficult to introduce it in practice. Many countries like India and Sri Lanka, which have tried it have given up. I do not propose to go into a lengthy rebuttal about what Mr Koo has put forward but merely to say that in the absence of general acceptance of the expenditure tax proposal worldwide amongst our trading partners, it is not practical for us to convert to that system, simply because we have a large network of double tax agreements. Any conversion to a tax system which is significantly different from our trading partners' will create major cross country problems, apart from the fact that there are many internal complications, not the least of which is the resistance on the taxpayer to have to divulge all his expenditures to the IRD. Although Mr Koo has said that he himself does not mind because he would be making most of his purchases with credit cards. Unfortunately, that is not the case for many people who would, I think, inherently object to further scrutiny by the tax authorities, not only on what he earns, but also on what he spends. I do not think I need elaborate on the consequences of such a move.

Lastly, we have a tax system here where our tax collectors are familiar with the various methods of evasion. Can you imagine the problems that they will have to encounter if they have to re-learn or at least learn a new system of catching evaders under a completely different tax system? I think the whole idea will horrify IRD who cannot even collect the taxes as they stand now. So it is a good idea, it is fundamentally sound, theoretically desirable, but not practical in the present circumstances. I think we had best wait for other countries to convert before we follow.

Mr Yatiman has said that the street names should reflect the local flavour. I totally agree with him. I support the Committee in which he is a member and it is something that we should encourage.

Mr Leong Horn Kee has spoken at length on the development of Singapore as a financial centre. Based on the statistics last year, it would look as though as a financial centre we are slowing down quite rapidly. So this may be an area of concern. However, in my Budget speech I did mention that the statistics in themselves do not really reflect the true picture. Conventional statistics used internationally tend to place emphasis on the volume of transactions which, in the case of Singapore, particularly on the lending side, has declined last year. But Singapore's financial sector has in fact diversified into many other areas of value-added activities which are not captured by our current system of statistical collections so that, although volume-wise, the level of activity has declined, profit-wise the financial sector is still doing quite well. We are in the process of working out a new system of statistical collection for the financial sector, which we hope would better reflect the actual performance of this sector in the future.

Whilst it is true that our stock market is small in relation to other financial centres, I think it speaks well of our financial people that they have recognised this fact and have been actively trying to expand into other areas of activities which will allow the centre to grow, notwithstanding our small internal market. Examples are the development of the forex market in which if you were to simply take the Singapore domestic Forex Market, we will have a negligible share. Nevertheless, over the last 10 years we have grown into the fifth largest forex centre in the world, with a turnover in the forex market amounting to over US$80 billion per day, overtaking Hong Kong. We have also developed a very active financial futures market through Simex. We are expanding into the commodities futures market through the Commodities Futures Exchange, and we are actively trying to get foreign companies to list their shares here.

The new incentives of double tax deduction for the creation of new financial instruments is a step in the same direction. We do not know whether it will work, but we will certainly give it a try. I do not propose to go into details now, as the MAS will be issuing detailed guidelines very shortly, and any questions can be referred to the MAS.

Mr Low Thia Khiang has said that we tend to over-estimate our manpower expenditures. I think there is a simple answer to that. As I mentioned earlier, the manpower figures reflect the establishment and since the establishment is always larger than the actual, so the cost would reflect this. I have given the reason to Mr Chew why we do this, and it is not due to a lack of ability to forecast. It is the lack of ability to fill these positions. We could remove them of course, but I have explained why we do not want to do that. 2.15 pm

Mr Low also suggested that since we consistently over-estimate and under-spend, that this money be spent for all purposes like subsidising the poorer sectors of the population. But this is an over-simplistic approach. We generally end up with a surplus. So whether we under-estimate or over-estimate and under-spend or over-spend, it does not really affect the basic balance sheet. We will subsidise and spend on the things which are necessary and we will provide for it. And we do not just take money which is under-spent in other departments to spend in these areas.

Mr Low Thia Khiang: May I clarify with the Finance Minister. The moment you estimate more for this, it means that we have less to spend in the budget estimates for the other sectors.

Dr Richard Hu Tsu Tau: No. That would be only true if your revenue is unable to support the total budget. Since we generally have a surplus, this problem does not arise. So it does not really affect expenditure elsewhere. I hope this satisfies him.

I do not quite follow his comments on the cost of administration. But I will try and answer him separately because we are running out of time. He seems to suggest that the cost of administration per staff is very high relative to other programmes. I do not have figures for the other programmes. So I cannot really comment now, but I will give him a separate answer.

I believe I have covered generally all the questions raised by Members. But I have a few minutes left. I would like to make a general statement on a matter which I raised in the Budget debate which was not adequately explained.

In the Budget debate, I said that the Government is comfortable with a growth rate of between 4% and 6%. Some Members have said that we should not try and constrain the growth of the economy. Where the wind is blowing, let us use the sail and catch the wind. I entirely agree. What I meant was, on a macro level we are comfortable with the 4% to 6% increase. However, if individual companies can grow at 20%, 50%, 100%, please do so. But do not expect the Government to give you incentives to do that. You must do it within the constraints of manpower, levies on foreign workers and the current levels of income tax. At 4% to 6% we do not want to stimulate the economy. But those who can do better by automation or by any form of ingenuity, please do so, and there is no suggestion that I want you to cut back to 4% to 6%.

Dr Ow Chin Hock: I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2). Mrs Yu-Foo.

Mrs Yu-Foo Yee Shoon (Yuhua): Sir, I beg to move,

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

Sir, I would like to speak on a subject that has been raised many times both by my parliamentary colleagues and myself. I would not bore the House with all the details or the arguments which had been sufficiently dealt with on previous occasions.

The issue is the extension of medical benefits to the family of female civil servants. Surely the Minister will agree with me that our female civil servants work as hard as and as competently as their male counterparts. I am sure the Minister would also agree with me the principle that the civil servant or any employer for that matter should employ and reward staff based on their ability and performance, and not by their sex.

The last time this issue was raised, the Finance Minister did give the indication that he may look into this matter at an appropriate time. I do urge the Minister to give some serious thought and consideration to the request. This time, I hope the Minister would not give me a "no" for an answer, and I look forward to a favourable reply.

Dr Richard Hu Tsu Tau: I understand the concern of the Member for Yuhua. I can only say "maybe" in the sense that we are reviewing the whole remuneration package of the civil service, and this is one aspect which we will consider.

Mrs Yu-Foo Yee Shoon: Sir, I think the answer is better than "no". I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (3). Mr Heng Chiang Meng.

Mr Heng Chiang Meng (Cheng San GRC): Sir, I beg to move,

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

Sir, under our current system of corporate tax, losses of companies are allowed to be carried forward to offset subsequent years' profits. But if there is a substantial change in ownership, these tax losses are not allowed to be carried forward.

In 1988, the rule was modified to allow certain situations of substantial change of ownership in which companies could continue to make use of these tax losses. These situations were mainly those of forced mergers, such as changes as a result of nationalisation or privatisation or the company's shares being widely traded on a recognised stock exchange, and provided that such changes are not made for the purpose of tax benefits or advantage.

Sir, although this concession in 1988 was better than nothing, it still falls short of what is required in the market. I do agree with the Finance Minister that there is merit in not allowing loss-making companies to be tax shelters. But I do feel that there are some groups of companies that require some form of relief from this rule, in particular, the young start-up companies. These are companies started by enterprising, daring entrepreneurs with good ideas and with little money, mainly from their own savings as well as support from their friends, but with lots of guts and belief in themselves and their ideas.

Sir, for such companies it is quite usual for them to suffer losses in the earlier years, especially when they are small, having difficulty getting finance, and trying to develop their ideas into marketable products and services. Often, after a while, new capital is necessary. At this stage the poor entrepreneur will normally try to interest a large company to buy a part of the company. Large companies normally will want a controlling interest; provided the price is right. Tax losses then can become an issue. For if the losses could be carried forward, it might be worthwhile for the company to take over the majority of the ailing company. Because of this issue, sometimes the deal falls through. But even if the deal gets carried through, often the entrepreneur has to sell it off at a very paltry price.

My question is this: Should we not help such enterprising Singaporeans, considering that we are trying to promote entrepreneurship? Should he not be allowed to recoup some of its losses via a better price, if the tax losses can be carried forward even if there is a change in ownership? Sir, in such cases, if we do allow the tax losses to be carried forward, I think we will definitely encourage more entrepreneurship and perhaps more struggling companies with a good future may be saved. And who knows, some of these companies may become our future SIAs and Keppel Corporations.

Sir, I would like to ask the Minister to consider my proposal of waiving the substantial ownership rule for such companies. And in case he is fearful of abuse, I can think straight away of a number of controls for him. For example, tax losses could only be offset against profits in the same trade. Another one could be that the qualifying companies should be smaller companies like what I have described above, say, for companies of $10 million of shareholders' fund or below. And the third could be that the limit be for the tax losses incurred for the past few years prior to a substantial change in ownership for three years. I am very sure that there are many others. But my purpose of my bringing up these few controls is to show that there are ways of controlling tax loss companies from becoming general tax shelters, because I think that is the main fear of the Minister.

Sir, may I continue with my second cut?

The Chairman: Yes.

Mr Heng Chiang Meng: On the second cut, first, I would like to say that in my constituency, besides HDB estates, there are also quite a number of private residential estates, some new but many old. The Government is giving assistance for the upgrading of older HDB estates and the sale of HDB shops to sitting tenants. Some of my private estate residents have asked me whether the Government would also help them to renovate; in other words, to upgrade their capital assets, their residential properties, especially with respect to the older properties built in the 50s and 60s. Any assistance in this area means either higher expenditure by the Government or lesser revenue to the Government. As the Finance Minister holds the purse strings, I think he is the best person to answer such queries, whether or not the Government would help.

Sir, the question is this. Should he entertain requests for financial assistance from sources other than HDB residents? The HDB residents are today highly subsidised by the Government in terms of the price they paid for their flats, the maintenance and running of their estates. Soon, this subsidy would include the upgrading that the Government is going to do, and even the sale of shops to the sitting tenants. As one of the private estate residents remarked, "If the Government wishes to distribute some fat, surely we should get a teeny weeny bit." Moreover, I would like to add that not all private property dwellers are rich, not all private properties are sparkling new bungalows or full-facility condominiums. There are many old developments, some even along the major roads. Perhaps the Minister can consider their request for some assistance.

In fact, if I remember, from 1970 to 1978 there was a garden tax remission for the maintenance of gardens in line with the Garden City concept. So here, if these old developments are an eye-sore, it might be worth helping in a similar way. To prevent abuse, it could always be limited to those properties above a certain age and below a certain market value. I shall leave the actual numbers to the Minister since he has the necessary information to have the correct cut-off, provided of course he agrees with the idea.

Dr Richard Hu Tsu Tau: Sir, on the question of carried forward losses, we have been satisfied that the arrangements introduced so far work satisfactorily. The reason for this is up to now, we have received 34 applications for such approvals, and half were approved. The ones which were not approved were rejected because there were suggestions or indications that these companies were bought over for tax reasons. However, Mr Heng has brought up a different category of companies. He talks about new small companies which face problems peculiar to themselves, where a general application of rules applying to all companies, big and large, might work to their disadvantage. I am prepared to consider this as a special case and I will ask my officers to examine it and we will ask Mr Heng for details.

The idea is not to penalise companies but to ensure that in the process of granting these concessions the Government is not taken advantage of. But if there are ways in which we can ease the problems of companies by administrative changes, I am quite prepared to do so. 2.30 pm

The second point he raised is tax relief for upgrading of private residential properties. This is a problem which always arises when we give something to some sectors of the population, and the question arises: why not extend it to some one else? But I think it is a fair question. I would like to point out that the HDB upgrading scheme is essentially directed at persons who are living in HDB flats and who therefore need the subsidies which the Government grants via the HDB flat scheme. Without the upgrading process, it is likely that many HDB home owners would not have the resources to upgrade some of the older flats, both internally and externally. Some of them are quite old and we have areas of significant urban decay which is undesirable.

The Government's programme is to create several things at the same time. First, upgrade the quality of urban housing in HDB estates, and, secondly, provide help to HDB residents to increase their asset values. Whether such a programme can be applied to private residential housing is something which I think we need to consider very carefully. The general assumption is that people living in bungalows or private housing are usually better off financially and, therefore, owners of landed properties cannot justify Government's help or subsidy in any form, other than the beautification, greening attempts made some years ago. However, if Mr Heng can let me know the type of houses that he has in mind in his constituency which are in such a bad state of repair, where the residents are so poor that some form of upgrading is necessary, I am sure we would be happy to consider.

Mr Heng Chiang Meng: Sir, in view of the rather positive answers given by the Minister, I am very glad to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $369,695,290 for Head N ordered to stand part of the Main Estimates.

The sum of $318,792,900 for Head N ordered to stand part of the Development Estimates.

The Chairman: Order. It is time to take the tea break.

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 2.55 pm.

Sitting accordingly suspended at 2.34 pm until 2.55 pm Sitting resumed at 2.55 pm

[Mr Speaker in the Chair]

Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

Head L -

The Chairman: Head L, Ministry of Education, Amendment No. (1). Mr Lew Syn Pau.

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

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

In Singapore, the percentage of each cohort graduating from university is still small, at about 12%. Our target is to raise this to 20%. Many workers in Singapore have missed out from an university education. Some did not go on to university because of financial hardship in the family. Others who were qualified could not find a place in NUS or NTU because of keen competition. There are still others who develop the interest and desire for a university education later but found the doors of NUS and NTU firmly shut to older working people. Hence, the announcement of an Open University in Singapore was welcomed by many.

According to the 1990 census, the possible target group (that is those who have completed post-secondary schools) of the Open University is about 187,000 people. Even if just 10% of this group wants to go on to Open University, we still have about 19,000 people. With an enrolment of about 1,000 a year, it would take 19 years just to clear this backlog. If we include a portion of each new cohort, with just 'A' levels or polytechnic degrees, who might want to enrol, which is another about 30% to 40% of each cohort, then the number becomes quite staggering. So the point is this: we are going to be short of places in the Open University. What priority scheme would the Ministry use to admit these students? I would like to suggest that priority be given to people who have been working for some years. The Open University should not become a third university for fresh 'A' level students who have not been able to gain admission to NUS or NTU. Therefore, a minimum age of, say, 25 years should be imposed.

Secondly, admission should not be based entirely on 'A' level results. Workers without 'A' level results but with many years of working experience should be given special consideration. For example, a matriculation examination could be set for such applicants in order to ensure that standards are maintained.

Lastly, since most students would be working people with CPF savings, would the Minister also consider allowing them to use their CPF funds to pay for their school fees?

Mr Chew Heng Ching: Sir, the Government, in a move to provide more opportunities for Singaporeans who have missed the chance earlier to acquire a degree, has proposed the setting up of an Open University. This is, indeed, a welcome move as the development of our human resources must continue to remain at the forefront of our developmental effort to prepare for the challenges that will face us in the Next Lap.

Sir, I noted that a grant of $11 million in the Ministry of Education's budget has been set aside to finance the Open University. This sum is not small. I am for more university graduates in our economy. I have said it before, I wish to say it again, we should not raise the expectations of Singaporeans aspiring to be university graduates. I hope the Open University will conduct courses which are practical and relevant to the economy. 3.00 pm

The Ministry of Education has indicated that, for a start, two types of courses will be conducted, namely, the humanities and the sciences, and these courses are targeted mainly at teachers who do not have university degrees. I think this approach is good, as a targeted audience or group has been identified early before the courses are designed and conducted.

Sir, I mentioned that degrees or courses conducted at the proposed Open University must be relevant to the economy, as otherwise the graduates will not be able to find jobs relevant to their training. We have to take a cautious approach here. If many graduates from this Open University have problems looking for jobs, it may give the impression that this Open University may be a second class university, and this is something which we have to be cautious about. We should avoid this happening or else it will be a waste of state resources training Singaporeans to obtain second class degrees.

I therefore have this advice to the Ministry of Education. By all means, start the Open University, but better to progress slowly, rather than to rush into producing many graduates. I think the essence of this Open University should be on quality and not on quantity. I therefore agree with what Mr Lew Syn Pau has said that the entry criteria should be reasonably high, so that the right type of Singaporeans are enrolled in this university.

Mr Peh Chin Hua (Jalan Besar GRC): ( In Mandarin): Sir, I am disappointed that the Department of Chinese Studies is not one of the first to be included in the Open University. In Singapore, there are a lot of people in our population who are purely Chinese educated. Like those who are English-educated, they did not have the chance or financial means to go to the University during their younger days. Therefore, when selecting the subjects to be offered in the Open University, due consideration should be given to the needs of these Chinese-educated people of the past.

I understand that the Singapore Chinese Teachers' Association has, in conjunction with the Xiamen University, China, conducted some external study courses with Chinese as the main medium of instruction. Some 300 Singaporeans were attracted by the opportunity given to them and enrolled for the courses. Regrettably, the external degree obtained through these courses has not been recognised by our Government. Therefore, I would suggest that our Open University should give priority to the establishment of a Department of Chinese Studies to enable members of the public who are knowledgeable and interested in the Chinese culture to pursue their studies in this field. This is particularly so for those who were Chinese-educated in the earlier years, and because of their lack of proficiency in the English language may again run the risk of being denied entry into a university. This is unfair to them. I feel that the establishment of the Open University is meant for the working people who did not have a chance to go to the university in their younger days. Therefore, we must also consider the large group of Chinese educated people. They should be given the opportunity to pursue university studies in the language that they are proficient in.

At the same time, the setting up of a Department of Chinese Studies in the Open University will also provide an opportunity for teachers who teach Chinese as a second language, to further their studies and produce better qualified Chinese language teachers for Singapore. This will not only benefit the existing Chinese teachers, but also serve to improve the standard of teaching of Chinese as a second language. It will also provide an opportunity for the working people who are interested. This will not only be good for the country but also good for the individuals. So I hope the Ministry will give this suggestion its due consideration. In addition, if it is possible, I hope that the Open University may even consider conducting some courses, such as Chinese History and Business Management, in the Chinese language for the benefit of the Chinese educated.

The Chairman: Mr Chng is not here. Mr Peh, you may continue with your next subject.

Mr Peh Chin Hua: Sir, following the introduction of the full-day school, I hope that more and more schools could convert to full-day schools. However, there might be a shortage of teaching staff or the workload of the present teachers will be increased indirectly. I therefore hope that the Ministry of Education will consider reappointing retired teachers. The retired teachers could assist the full-day school teachers in coaching the students in their school work and other ECA activities. The advantages are as follows:

Firstly, retired teachers are professionals who have gone through educational training. In dealing with students, they have in-depth knowledge and vast experience. They are the most suitable candidates to be the tutors. Moreover, the retired teachers will form a better pool of teachers to help run the school than relief teachers who have no formal training and experience.

Secondly, with the increase in the greying population and a longer life expectancy, we can give the retired teachers a more significant life after retirement. Therefore, to reappoint the retired teachers not only benefit them but is a great help to the nation in the field of education. Besides this, the job of a tutor is not very heavy and is very suitable for retirees.

Thirdly, employment of retired teachers is a good method to maximize the use of manpower. This is in line with the policy of the Ministry of Labour and NTUC to extend the retirement age of workers. With the continuing tight labour market, the employment of more staff in the full-day school would also affect the economy of the nation. Therefore, retired teachers are a source of labour supply and a workable way to maximize the use of manpower.

Lastly, most retired teachers are made up of the older cohort of the population, and are therefore more versed in traditional culture. In allowing them to undertake the job of a tutor is the best opportunity for them inculcate the fine points of traditional values. This will allow the young to learn how to get along with the teachers which will be an additional benefit in inculcating moral education.

Mr Speaker, Sir, based on the above advantages, could the Ministry employ more retired teachers to manage tutorials in full-day schools?

Dr Arthur Beng Kian Lam: Mr Speaker, Sir, the recent decision by principals of junior colleges to block out their 'A' level results from the press is an expression of their concern of the image of their schools. There is an impression that neighbourhood schools are inferior in standards and facilities to the traditional premier schools. Today's press highlighted the fact that parents are changing homes just to get their children into the so-called correct schools. This is an unhealthy state of affairs, as it makes good sense that the child should not waste precious time and money to travel to so-called good schools a long distance away from home.

Sir, on 9th February 1992, the Senior Minister mentioned the need for a good school in every ward. The Senior Minister also mentioned that the target was a good school in every ward in 5-7 years. He mentioned that more responsibility for the running of schools could be given to principals, parents and grassroots leaders.

Sir, grassroots leaders are ready and willing to play their part. In my discussions with them, they even mentioned that they would like to see a good primary school, a good secondary school and even a good junior college in their ward. This makes good sense, for the children would then be able to progress without having to move to a school a long distance from their homes.

What does the Ministry have in mind to allow for more involvement of grassroots leaders in schools, so that grassroots leaders can play a positive role to help these schools achieve these standards in 5-7 years?

The Chairman: Mr Lew, you can take your three subjects together.

Mr Lew Syn Pau: Sir, it has been announced that the Edusave fund will award scholarships to the top 25% of students going to independent schools based on their PSLE results, and these scholarships will be valid for the entire four years duration of the students' stay in these schools. While this gives financial security to each student who opts for independent school at the point of admission, it is unfair to other students who work hard and do well later in the school.

I would like to suggest some fine-tuning of this scheme to achieve both objectives. We could break down the Edusave scholarships into two groups. The first group of scholarships, say, 15%-20%, could be awarded on admission using the PSLE results. The second group of 5%-10% should be awarded on a yearly basis to those not already receiving these scholarships, using the year-end examination results. In this way, our students in the independent schools would be motivated to continue to perform their best every year. This same concept can also be applied to Edusave scholarships for the Government schools. The schools should be given the discretion to administer the yearly scholarship awards.

Next, Sir, I would like to move on to my next cut regarding preparatory year in primary schools. The preparatory school pilot project was such a success that the demand far exceeded supply. The Government has decided to stop running preparatory schools and let the private sector take over the provision of pre-school education. Doing this will enable the Government to focus its attention on the 10 years of formal schooling for all children in Singapore. I support this decision. However, we have been told that $1.3 million has already been invested in the development of school curricula for this pilot project. I would like to ask the Minister how they plan to share the development of this pilot project with private kindergarten providers, so that our pre-schoolers can continue to benefit from this investment already made by the Government. Has the Ministry any other plans to help upgrade the private kindergartens?

Sir, I move on to the next cut on the promotion of healthy lifestyle in schools. A healthy lifestyle is important as it not only makes us more productive and alert, it also cuts down on expenditure on health care. A healthy lifestyle should be inculcated in our children from young, both at home and at the schools. I would like to ask the Minister how is healthy lifestyle being promoted in our schools. Will the Ministry, for example, require all school children to take up one sport as an ECA? I have been told that many school children are leaving school without learning any sport at all. Running and swimming, for example, are essential skills for our boys going to national service. How are the schools helping to prepare our boys for their stint in the Army?

The Minister for Education (Mr Lee Yock Suan): Sir, I would first like to respond to the comments and queries made about the Open University. My Ministry is having further discussions with the Open University of the UK to make available appropriate Open University courses in Singapore. This, as previously announced, will give working Singaporeans opportunities to pursue a degree through open learning and part-time study. Instead of creating a new statutory organisation to run the programme, my Ministry is exploring with well-established institutions in the private sector on how best to make available Open University courses in Singapore. This means that the launching of the Open University courses will have to be deferred by one year to January 1994 to enable us to work out a suitable arrangement with a private sector institution for the successful implementation of the Open University programme. 3.15 pm

Let me explain the reason for this change in plan. The courses in demand by our working population appear to be mainly in Business, Management and related disciplines. A preliminary study has shown that the degree programmes in Science and Arts, which the proposed Open University was planning to start, are not so popular except with the teachers. It suggests that Singaporeans will go for courses which have a strong market value. There is already a well-established and growing private sector that offers such distance-learning and part-time programmes in collaboration with reputable overseas universities. The Government should not duplicate what the private sector is doing well in this field. It is better for the Government to assist a well-established private sector institution to offer additional tertiary level courses beyond its existing programmes. The courses can lead to degrees awarded by a foreign university. In this way, we do not start from scratch in offering Open University courses.

The one year delay will give us more time to assess the market demand for various courses more accurately and to adapt the course content and instructional materials of the Open University of the United Kingdom to suit our local environment. For example, the UK Open University's Geography and History courses are oriented to the European context. They will have to be re-oriented to suit our local needs. Later, when it offers Engineering and Technology courses through the Open University mode, suitable laboratory and workshop facilities at our tertiary institutes will have to be made available.

In providing the Open University programme, the Government should be careful not to raise unrealistic expectations which cannot be fulfilled. On this point, I agree entirely with Mr Chew Heng Ching. The programme has to be rigorous to make it a worthwhile investment for Singaporeans. However, the academic standards of the Open University programme cannot be strictly matched with the NUS and NTU because of the less stringent admission criteria, different course structure and the part-time distance-learning approach. The Open University programme cannot require the same admission criteria as the NUS and NTU or else few working adults will qualify. Instead, it will cater to working adults who have the advantage of maturity and work experience. They will require perseverance and determination to pursue a degree through intensive self-study over a prolonged period which may average about six years, on top of their career and family commitments.

Also, if the Open University programme were to set its course structure and examinations at too high a level, the drop-out and failure rates will be very high. Many students will be disappointed after they have put in tremendous effort and sacrifices to try and pursue a degree. Nevertheless, an acceptable standard must be achieved for the investment in the programme to be of value to its graduates and to Singapore.

By the end of this decade, about 20% of each cohort of students will make it to NUS and NTU. Another 40% will go to the four polytechnics. This makes a total of about 60% of each cohort. Polytechnic graduates will also have more opportunities to enrol in the NUS and NTU. Many Singaporeans are also pursuing university education overseas.

The proposed Open University programme will cater mainly to polytechnic graduates who want to work for university degrees on a part-time basis as well as to a smaller number of Singaporeans who did not make it either to NUS or to NTU or to the polytechnics, even though they had the ability to do so. It should add to our workforce qualified graduates with skills the economy is eager to absorb, not merely to promote an expensive and ultimately delusive paper chase. This is more likely to succeed if the Government works with the private sector to build on what they have already achieved and give them the support they need to expand the programmes and widen access to tertiary courses for working adults.

Sir, you can see from my statement that most of the points raised by Mr Chew have in fact been considered and answered. I think we share the same concerns that he has expressed.

The approach taken is therefore a cautious one. We are in the process of discussing with the private sector to see how best we can add on this Open University programme to what they already have, and not to compete with them.

Mr Lew Syn Pau asked a few queries concerning the admission criteria and so on. This will have to be discussed with the private sector institution as well as with the Open University of the United Kingdom. But I think we will basically have to consider a number of factors such as relevant working experience and the age of the applicant. Previously, we announced the applicant should be at least 21 years old. Mr Lew has suggested 25 years old. This is a point which has to be clarified in due course.

As far as the use of the CPF is concerned, I am no longer the Labour Minister. So I think it is fair to leave it to my colleague, Dr Lee Boon Yang, to answer that point. Mr Lew might like to pose that question to him in due course.

Mr Peh Chin Hua raised a number of points concerning offering the Open University courses in Chinese. If the courses come in from the United Kingdom, obviously they have no Chinese courses. So it will take some time to see whether it is feasible to do it. In principle, there is no objection, but it takes time and there must be an adequate demand. Also, we have to make sure that there will be adequate tutors to provide the teaching, and also maybe lecturers, if we adopt the lecturing mode.

I should explain that with the Open University concept, there will be a central office and a place where you develop the materials. But there is no central place where you offer lectures. They just take home their package of materials, like you learn foreign languages, telling you what are the materials, what are the exercises and so on. We will have to find a number of centres where the students can be taught and helped by tutors. Also, the programme of the Open University will have to be out of phase with our University and Polytechnic year so that, if need be, we can make use of the facilities in our tertiary institutions. So much for the Open University.

I would now move on to the points raised about the Edusave scholarships. The Edusave scholarships for the six independent schools, eventually eight, will have to be tied to the PSLE results because this is a national level examination. Because the fee level ranges from $70 to $200 per month, it is necessary to assure the scholars that once they go in they will be able to continue for the four years. That is the reason why the scholarships are valid for four years. I accept the point that some of these scholars may subsequently not do as well as some of their classmates. Unfortunately, this is also a practical problem. The same arrangement in fact also applies to university scholarships, that they must do well at the point of qualification and thereafter, even if they do not do as well as the others, so long as they do not fail, the scholarship will remain valid.

The point suggested by Mr Lew is an interesting one. I think it can be considered, but there are also other practical considerations. For example, in the Secondary 1 to Secondary 3 examinations, these are really school-based and not national examinations, unlike the PSLE. So we cannot really compare students from one school with students from another school because the scholars will be free to choose whichever school they want to go to. So some of the students who do better than the scholars in School A may in fact not be as good as the scholars in School B. So there are these practical considerations. Whilst it is an interesting idea, my own preference is to stick to our original plans first, and to award to the top 25% of the students who enrol in the independent schools and subsequently, depending on the experience, we can modify and make improvements as we go along.

As regards the Preparatory Year materials and programme, these materials will not be wasted. They will be applied widely to as many private kindergartens as possible. The $1.3 million was spent on developing the course materials, in developing the teaching techniques, the methods and so on. All these will be made available to the private sector and whoever wants to make use of them. The course materials are in our four official languages. They are already being applied by some private kindergartens and if there is interest from other private kindergartens to make use of the materials, my Ministry will be very happy to advise them on the proper use of the materials, on the facilities needed and so forth. Ultimately, there will be wide benefits for all our pre-school children to enable us to uplift the quality of pre-school education.

Mr Peh Chin Hua, Dr Arthur Beng and also Mr Lew have raised a few other points. I will leave it to my colleague, Dr Tay Eng Soon, to answer these points.

The Senior Minister of State for Education (Dr Tay Eng Soon): Sir, I would like first to reply to Mr Peh Chin Hua's point about retired teachers. He has given good reasons why we should try to encourage retired school teachers to come back into the teaching service as supply teachers or as relief teachers. I fully agree with him on that. In fact, we are not trying to keep away any retired teachers. The problem is to encourage enough of them to want to come back to teach. We do get a few. For example, in one of the day schools, St. Michael's Primary School, they are making use of retired teachers for tutoring and looking after the children after the school day is over. But in order to attract retired teachers to come back as relief teachers and as supply teachers, I think we have to look into the rates of payment for such people, and this is a subject that is being investigated at the moment.

Dr Arthur Beng has raised the question of the neighbourhood schools, the image that they have and what can be done to improve the image and to improve the neighbourhood schools. Let me say to him first that we are committed to the neighbourhood schools. We will always support them because that is where the majority of young Singaporeans are going to school for education. So he can be assured that the Ministry will never neglect the neighbourhood schools. In fact, most of our neighbourhood schools, especially the ones located in new towns, have some of the best facilities today. They are new schools, they have been built to the latest specifications and their building facilities are better than some of the older established schools you can find in the older parts of Singapore. Not only that, they are getting a fair share of good teachers and principals from the NIE. That is really the heart of the matter - the school is as good as the principal and the teachers that it has, and all our neighbourhood schools are getting their fair share of the graduates from the NIE.

Sir, his speech raises a more basic question: what is a good school? I think many people today judge a school quite simply by the results that the school achieves, either at PSLE or at 'O' levels. And if they do well at PSLE or 'O' levels, that is considered a good school.

Sir, I think it is much more than that. If it is simply a matter of good examination results at the end of the four years or six years in school, then it is very easy to develop a good school. All you have to do is to take a group of very bright students, put them in a school, in any school, and in a few years' time the results of the school will shoot up to be very good and automatically you have a good school. 3.30 pm

Sir, it is obviously not the way to do it. In other words, a good school is much more than just the good results they get. If a school merely receives very bright students and produces good results at the end of the day, it may or may not be a good school. What is in fact more important is for a school to be able to take in average students, students who are average in their performance, and at the end of a period of time to improve their performance to help them to do better than they would otherwise. That I would say is value-added, and that is the approach that the Ministry is taking in evaluating our schools, how much value-added are you giving to the children who come to a school.

We should also look at the non-academic side - the tone of the school, how well run the school is and how effectively it is being managed. If you take all this together, then I think you can say that that school is giving good, or even above average, education for the children that are under its charge. Many of our neighbourhood schools are meeting these criteria. They are able to take average children and they are able, in the course of four or six years, to help them acquire a good education with high success in their examinations.

What are the key factors that go to make a school a good school or an effective school? I prefer to use the word "effective" rather than "good". Firstly, all the studies have shown that it is the Chief Executive Officer of the school that is crucial -- the principal of the school. A school that has a good CEO with good leadership, professional and managerial ability will have a team of teachers that are motivated and are willing to mobilise the children to do well.

Secondly, a team of well-trained and motivated teachers. The National Institute of Education (NIE) is doing its best to train teachers. It has been receiving good quality applicants -- applicants with good qualifications and good motivation. I think that is the best assurance that education will continue to improve in Singapore with teachers of that calibre.

Thirdly, any effective school should receive support from its community, from the parents, from the community leaders that live around the school. In Singapore, unfortunately, I think the level of community support is not good compared with, say, the community support that schools get in the United Kingdom or even in the United States. Many parents in Singapore will leave the responsibility of education of their children to the school and get on with their business, and expect the school at the end of the day to do something remarkable for their children.

What we are saying is that parental support must come in. They must come in and lend their hand to the school in the ECA programme of the school, in the annual activities of the school, and even in the library activities of the school. I know it is going to take up time. But if you want to have a school that is effective and good for the children, community support is very important. So I would welcome the point made by Dr Arthur Beng that grassroots members, community leaders and parents should come forward to help schools.

Mr Low Thia Khiang: Sir, may I clarify with Dr Tay? He mentioned that value-added in schools is a criterion for assessing whether it is a good school. How does the Ministry of Eduction ensure that good pupils are equally distributed in all schools, and not concentrated only in independent schools?

Dr Tay Eng Soon: I will come to his point later when there is another cut and I will touch on this subject.

The point made by Mr Lew Syn Pau concerns sports in the schools and the necessity for young students to develop themselves, especially for those who are going on to do national service later. Earlier this year, I announced that the schools are starting a new scheme called the Trim and Fit Scheme, or the TAF scheme. The purpose is to help school children to be more physically fit and also to reduce obesity, a problem which is beginning to affect more and more children in our schools. But that aside, Sir, there is a process going on to implement physical education in all our schools by providing them with trained PE teachers. This is taking time because we need to have the PE graduates from the Institute of Education. With a good PE programme in school, children will benefit in two ways. Firstly, physical fitness will improve because they will have regular physical exercises. Secondly, they will also acquire sports and games skills -- these are life-long skills --- in swimming, basketball, football, etc. This is something which we hope they will carry into adult life. So I can assure him that everything that can be done is being done to enable young people in school to acquire sporting skills.

The Chairman: Mr Umar, we have about two minutes.

Mr Umar Abdul Hamid (Ang Mo Kio GRC): I just would like to clarify a few points with the Minister regarding the engineering courses that will be offered in the SOU.

Sir, I think SOU will be the first or among the few universities that will be offering engineering courses in the world. My question to the Minister is this. I have a great concern that if we are going to make use of the facilities in the polytechnics for engineering courses, will it be perceived as a qualification below that of the NUS and the NTU? Because when NTU was introduced, its engineering degree was perceived to be lower than that of NUS. If we are going to make use of the facilities in the polytechnics, will the degree offered by the SOU be seen or perceived as a standard lower than NUS or NTU?

Mr Lee Yock Suan: Sir, first, I would like to suggest we drop the term "S" from "OU" because there will be no SOU. It will be just "OU", probably run by the private sector, but with the Government assisting the private sector to set it up. So maybe we should stop using the term SOU as if there is going to be a university called SOU.

There will be OU courses and the Government is committed to helping to bring about those courses. But the idea is to let a well-established private sector organisation run those in addition to its normal courses. I think this is a better approach.

As far as the use of polytechnic facilities is concerned, I think this is something we have to study. And it is in fact a problem if you want to introduce engineering and technology courses for those who missed out on these courses earlier on. I do not think that just using polytechnic facilities will necessarily mean that it is of a lower standard or a lower quality of degree. It depends on so many factors. As I said before, it depends on the admission criteria, whether these people can really make the grade or they are somewhat different and what is the course content. And ultimately the market will have to assess these people, just like you assess people who come back with foreign degrees, because the degrees of the Open University will be awarded by a foreign university in this case.

Mr Lew Syn Pau: Sir, I thank the Minister and his Minister of State for their replies, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2). Mr Lew.

Mr Lew Syn Pau: Sir, I beg to move,

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

Sir, I think we all know the critical role that teachers play, not only in imparting knowledge to the students but also in inculcating in them desirable social values. They are very important role models for our young. We must have good teachers in our schools. We must improve the working conditions of these teachers so that we can attract good teachers.

Every year, Mr Lawrence Sia, the former MP for Moulmein, raised two issues regarding improving the morale of teachers in schools. The first one is regarding the employing of non-teaching staff for schools to relieve teachers of administrative work so that they can concentrate on teaching. The reply last year was that the Management Services Department had just finished its report and the Ministry of Education was still awaiting their response. Could the Ministry tell the House the progress made on this matter?

The second issue is regarding the air-conditioning of school facilities. In such a humid climate in Singapore, air-conditioning of offices is a necessity, not a luxury. I do not know of any Government office which is not air-conditioned, except perhaps the military camps. The Government should therefore provide a budget for air-conditioning school facilities such as staff offices, library, music rooms, AVA rooms, and so on, and not leave this to the School Advisory Committee to raise the money to do so. The money raised by the School Advisory Committee should go towards better facilities in the schools and more enrichment programmes for the students. Could the Minister comment on this?

Mr Chin Harn Tong (Aljunied GRC): ( In Mandarin): Sir, the Ministry of Education faces a very serious problem, that is, the shortage of qualified teachers. Many university graduates with good results are not willing to join the education service. And for this reason, the Ministry of Education has spent a lot of money advertising over the mass media. This is a very good way of recruiting teachers but we do not know what is the effectiveness of such advertising.

The unwillingness of university graduates to join the education service is influenced by the market forces. But if we were to compare the salaries of our teachers with those in the other professions, we will find that teachers are paid quite well. In fact, our teachers are paid better than their counterparts in Taiwan. Their salary is comparable to that of the teachers in Japan. With such good remuneration, why is it that we cannot attract enough graduates to join the education service? There must be some very special reasons for that.

Teachers today have not only to teach well, but they also have to take charge of ECA and other miscellaneous duties. As such, the workload of the teachers is rather heavy. Apart from this heavy workload, a more important reason is that the teachers have to face tremendous pressure. The Ministry of Education fixes a very high standard for the schools to meet. They want the schools to have good examination results. For that reason, very often the results of one school are matched against those of another. The schools have to face tremendous pressure. The principals, in turn, will exert pressure on the teachers. Many teachers who cannot cope with the stress develop a fear for the teaching job. Then the teachers will exert pressure on the students and when the students go home, they bring the pressure home with them. As a result many parents, who are afraid that their children might not do well in their examinations and be streamed to the normal stream, take leave during the examination time to supervise their children in their studies. Some even give up their jobs to stay at home and help their children to revise their lessons. All this pressure is created by our education system.

Every time the '0' or 'A' level results are released, the teachers are very nervous. Because when the results are not good, they would have to write reports. They would be asked to analyse the reasons for the poor results and to draw up plans to improve their teaching. Of course, administratively speaking, these are good measures. But if we over-emphasise the results of the examination as a criterion for the performance of the school, then this would exert tremendous pressure on the teachers.

Many university graduates are not willing to join the education service. There is another reason for that. The social status of our teachers in Singapore is very low, unlike their counterparts in Taiwan or in Japan. In Taiwan and Japan, teachers are held in high esteem and command great respect. Many parents respect the teachers who teach their children. I think we should conduct a thorough study into this problem so that our teachers can have the same type of respect and social status as given to the other professionals in our society.

I believe if we could improve on the points that I have raised above, we would be able to attract more graduates into the teaching service. 3.45 pm

Mr R. Sinnakaruppan (Kampong Glam GRC): Sir, the primary responsibility of our teachers is to provide effective teaching instruction in schools. We find that, increasingly, teachers are loaded with a number of non-teaching responsibilities.

There are about 330 Government schools and junior colleges in Singapore. These schools and junior colleges employ about 15,000 teaching staff and about 500 clerical staff. This works out to an average of 45 teachers per school supported by one or, in some cases, two clerical staff. This ratio of teachers to clerks, even by private sector standards, is very low. As a result, school teachers get very little administrative support in preparing their teaching materials. I am told that teachers have to spend a lot of time in mundane activities, such as printing, photostating, stapling of stacks of notes, and having to draw even their own charts and diagrams.

Sir, in addition to class administration, teachers also have to shoulder other responsibilities, such as ECA, participating in school project committees, fund-raising projects, and so on. All these activities, though necessary for the proper administration of the school, inevitably divert teachers' time and focus from their primary responsibility of teaching. As Mr Chin Harn Tong has pointed out, there is already a shortage of teachers in our schools and the inefficient use of available teachers would only make the situation worse.

In recent years, the Ministry of Education has embarked on publicity programmes to enhance the professional image of our teachers. However, publicity alone is not enough. Teachers must be accorded professional treatment in their day-to-day work. Proper administrative assistance would allow teachers to put more time and energy into honing their teaching skills, developing new teaching methods and to pay more attention to the weaker students.

I would like to ask whether the Ministry would consider introducing more clerical and administrative support for teachers. As many Members have mentioned, the former MP for Moulmein, my predecessor, Mr Lawrence Sia, had also raised this issue at last year's Budget debate, and he was told that the proposal had been submitted to the Ministry of Finance. I would like to know from the Minister the outcome of this proposal.

Dr Tay Eng Soon: Sir, I would first take the points made by Mr Lew Syn Pau and Mr Sinnakaruppan, both of whom spoke on the load that teachers have to carry which is outside the normal teaching load, and the need for non-teaching staff, clerical staff and others who should help in the schools.

I agree with them that the main task of teachers is to teach. But that does not mean that they should not do some administration. In fact, they do some administration, especially administration connected with class management. I think that is also part and parcel of the role of a teacher. They also take on ECA responsibilities, taking children in ECA programmes. Again that is part and parcel of teaching. Because that gives the teacher very close contact with students and through that approach, in fact, builds up rapport between the teachers and the students, and the students pick up attitudes and values during their ECA.

In fact, a study has been done by the Management Services Department that was mentioned earlier. This study has recommendations which are now being examined. One of the interesting findings of this study is that the teachers have indicated that there are three administrative chores that they most dislike and they would like these to be taken over by administrative or clerical staff in the school. These three chores are, first, collection of school fees. As you know, every month, teachers are involved in collecting school fees from their school children. If there are any late payments by the students, as this does happen, the teachers have to then bring the accounts up to date on the next day, or the day after, so there are delays. This is an administrative chore which teachers feel could be done by somebody else. The ideal would be for school fees to be paid through GIRO. Then everything is remitted through GIRO to the school or to the Ministry of Education, and there will be minimum handling of sums of money by the teachers, counting and making sure that the right amount is there. And this is something which we would like to work towards. Already quite a lot of parents are paying school fees through GIRO, but the point is to persuade more and more of them to do so.

Secondly, teachers have indicated that they have to type examination papers; they have to type test papers for use in their classes, and they would prefer that this typing duty, or word processing task, be given to clerical assistants or clerical staff who can do the typing. I can totally understand the unpleasantness of having to do a lot of typing. If there are enough clerical staff, I think this can be moved to them. But there is also a security problem with examination and test papers. If this is assigned to a clerical staff, the school will have to take appropriate security measures, to make sure that there are no leaks from these examinations and tests. But, nonetheless, this is one of the chores that could be devolved to somebody else.

Lastly, teachers have indicated that they have to do quite a lot of photocopying, and even stapling of the same examination papers and test papers. Again, these could be assigned to clerical staff. But the security measures must be put in place to make sure there are no leaks of the examinations. So the Ministry is aware of these problems.

The current position is that the Auditor General is now checking into the adequacy of administrative and clerical staff at our schools. This is part of the zero growth policy that the Government has. But he is checking to make sure that schools are adequately provided with administrative and clerical staff. And if they are not so, he should make his recommendations. I believe that this study will be finished by the end of the year and we would then follow through with the study.

The final point made was that of airconditioning of staff rooms and staff offices in schools. In this respect, I am completely in sympathy with Mr Lew Syn Pau. Teachers have to spend long hours in schools, not only in teaching, but in preparation, in the marking of exercise books, in the marking of test papers, and so on. They should work in better working conditions, physical conditions. With the support of Members of this House, we will approach the Ministry of Finance. The budget has to come from them, but this is one area which I feel is worth pressing for.

I turn now, Sir, to the points made by Mr Chin Harn Tong. He has pointed out that there is a shortage of teachers in our schools and he has tried to give reasons why there is this shortage. First of all, Sir, let me say that the shortage situation in our schools is improving significantly. In other words, many schools now are having a full complement of teachers. The reason is that in the last five years, due to publicity campaigns, due to the stepping up of recruitment efforts, the Ministry of Education has been successful in recruiting more and more teachers each year. Let me give this House some figures. In 1988, we recruited 527 teachers; in 1989, 717; 1990, 843; last year, 1,130. In other words, between 1988 and 1991, we doubled the number of teachers that were being recruited into the teaching service.

This is very encouraging. The effort will continue but, for this year, when the fresh graduates come out from the NIE in March, the primary schools will have a full complement of teachers. The Ministry officials have indicated to me that every vacancy will be filled, and there should not be any problem. But there will still be casual vacancies due to illness, maternity leave, and so on. These will have to be filled with relief teachers or supply teachers. The position in secondary schools is not as good as in primary schools. There are still unfilled vacancies. So they will have to rely on relief teachers. But with the recruitment that has been coming in very positively, I believe that we should also be able to remove the vacancy situation in secondary schools.

Sir, the campaigns that we have launched have influenced public perception of the teaching service. One question was posed to a large number of people by an opinion survey organisation. The question was to rank different kinds of professionals on the contribution they make to society. Six professions were listed for them to choose. I am glad to say that teaching was ranked first, even before doctors. In other words, the public perception is that teachers render a significant contribution to society through their teaching of young people. Doctors rank second. At the bottom of the six are bankers, financial and marketing people. So I think the perception of teachers is not bad. Our task must be to continue to attract, encourage young people who have a sense of social responsibility, who want to do something for other people and who are also interested, have a liking for young people, for children, to come into teaching.

On the question of stress that is being put upon teachers in schools that was raised by Mr Chin Harn Tong, I agree that there is a degree of stress that teachers experience in schools. Some of this stress comes from parents who have very high expectations of their children's performance. The Ministry of Education does not go out of its way to apply stress on teachers in schools. There is no reason to do that. But let me just cite you a very recent occurrence - the junior colleges. They were asked to give their results so that the press could rank them according to who was number one, number two, number three, and so on, based on their 'A' level results. I am glad that the junior college principals decided not to release the results while the results fever was on. Public ranking of junior colleges or, for that matter, public ranking of secondary schools or primary schools by their PSLE results or, worse, kindergartens, I think, is undesirable. What will it do? In the case of junior colleges, the collective results of one junior college compared to another may differ by as little as 0.5%. If you were to rank junior colleges according to this, and to say that somebody is ahead of another because there is a 0.5% difference in their overall results, this is absurd, this is nonsense. 4.00 pm

But when you publicly rank institutions like this, what is the effect? The effect is that it will raise the tension and the stress that parents feel. It will feed on the kiasu spirit that is in many people, that their children are in a junior college or in a school that is slightly lower than the next one. I do not think this improves education at all. It does not improve the education of our children to have all these institutions ranked publicly every year for everybody to marvel at.

What is more important is that each of these schools sets out to make its programme as effective as possible. I spoke on this just a moment ago, that a school can take its task, its programme, and achieve a great deal from that, and much depends on the principal and the team of teachers in the school. I think we should leave the schools to do their best, support them positively, encourage them, but we should not sit on top of them, applying pressure on them to be ranked number one, number two or number three, as the case may be.

Mr Chiam See Tong (Potong Pasir): Thank you, Sir, for allowing me to speak.

Sir, I am heartened to hear that the recruitment of teachers has improved to over 1,000 last year. The Minister could perhaps enlighten us as to the attrition or drop-out rate of teachers from their jobs. I am always concerned. In fact, every year, I bring up this subject of shortage of teachers in our secondary and primary schools. When there are not enough teachers to go around, the teacher-student ratio will naturally be high. I complained of this many times in this House of the class size in nearly all Government and Government-aided schools. If the class size is too large, when they are between 40 and 43, pupils in such a class can never get effective teaching, in particular, in these days, when the workload imposed on our school children is so heavy. The teachers are given a very wide syllabus to cover and they have to go very quickly through them. And of course the average pupils would find it difficult to cope up. Then they do not do so well in the examinations and the parents get very worried. Working mothers are left in a dilemma whether to continue working or to stay at home, stop work and help out their children in their studies.

In the past, normally only those who could afford would employ private tutors to coach their children. But in these days, when academic qualifications are so important to get good jobs, even those parents who really cannot afford to have tutors, tighten their belts, make sacrifices and save money to employ tutors to help out their children in their studies. Of course, this will cause a great financial burden on these parents.

The Government wants to encourage the learning of mother tongue in our schools. This is something which I support. But the standard of the teaching of mother tongue has been dropping in our schools. Why? Because there is an acute shortage of teachers and there are too many pupils in a class. The shortage of teachers is a very basic fundamental flaw in our schools. The Government says that it is trying hard to solve this problem. In fact, I think the Government has no choice. The Government should solve this very basic fundamental educational problem. Otherwise, all the talk about Edusave and the full-day schools will be of little use.

Last year, the Minister said that the Institute of Education was not producing enough teachers. I know the Ministry is doing everything it can, but I hope this will not be seen as an excuse.

The Chairman: Mr Low, can you seek your clarification now?

Mr Low Thia Khiang: What is the turnover rate of teachers in the Ministry of Education?

Dr Tan Cheng Bock (Ayer Rajah): Sir, I just want to seek a clarification from the Senior Minister of State. I know that there is this policy of not accepting graduates who do not have two teaching subjects as teachers. I am wondering whether the Ministry would like to review this policy, because I am sure there are some graduates who may not have two teaching subjects. For example, a graduate in history and politics, would the Ministry consider accepting such a graduate as a teacher?

Dr Tay Eng Soon: Sir, I will first turn to the points made by Mr Chiam. I have already spoken quite extensively about the recruitment of teachers to try to meet the shortage situation, so I will not repeat myself.

His point about class size is something that he brings up predictably almost every year. Mr Chiam has the opinion that to have good education, you must keep your class size small, the smaller the better. I do not know where he has obtained this information from. I suspect he has obtained it from his Western contacts, because it is true in the UK and the United States. One of the key points that has been made by many people is that they must keep class sizes small, the smaller the better, 20-25 per class. But does Mr Chiam know that in these two countries, the UK and US, there is a great deal of unhappiness about education. In fact, there are a lot of criticisms about the dropping standards of education in these two countries. And this is a subject which will affect the elections in Britain in April and possibly the American presidential elections in November. So I do not think he should just simply quote or ape something which is being widely touted in another place and say that this is the solution for Singapore.

I think this class size issue is over-rated. If you look at Japan, Korea, Taiwan, their class sizes are bigger than ours. On a regular basis, it is between 45 and 50 per class. I remember visiting a very good school in Seoul, Korea, and their class sizes were 60 per class. They manage to do quite well. Their students, in fact, excel and are held up by the American educationists as examples of students who are doing so well and of a system that is far better than theirs.

I think we should see these things in balance. We have a class size of about 36 and it varies from year to year depending on the number of classes that are created. It has served us well. I do not think there has been any worry that because of the class size of 36 our school results are suffering. In fact, each year, to the amazement of many people, the results seem to be improving. This year's 'O' and 'A' level results have been the best ever.

I think what is more important ---

Mr Low Thia Khiang: I do not believe that class size has nothing to do with the quality of education. Because if you have a small class size, the teacher will pay more attention and he has more time to cater for individual students.

Dr Tay Eng Soon: It is not as simple as that, my friend.

I was going to come to this next point. What are the key factors for success in schools? Since Mr Chiam and Mr Low are very concerned about this, what are the key factors for success in schools? I think, first, the basic ability of the child is very important. A child is endowed with certain abilities. That is very basic and important. Secondly, the motivation of the child is important also. The child may be very bright in terms of his endowment. If he is unmotivated, he will not do well, he will not pay attention to his studies. So motivation is important.

What are the avenues of motivating the child? The school is definitely an important avenue, and that is why I said the principal and his team of teachers are really the core, the heart of the school. By doing a good job in running the school, they are motivating the children under their charge to concentrate on their lessons, to do well in their ECA, to do all kinds of things they want them to do. But beyond the school, motivation by parents is perhaps even more important.

Let me explain why I say this. I have just come across a study. This is a study of children of Vietnamese refugees who are studying in American schools in California. To the amazement of everybody, these children who speak hardly any English when they started school are doing very well in their neighbourhood schools, compared with American children who are not doing well at all in these schools. Studies have been done on this. Why, in the same school, different children, one does well, one does not do very well? There must be some other reasons. The reason is outside the school. They found in the studies that the Vietnamese parents of these children pay a great deal of attention to what their children do. They may not be highly educated themselves. Many of them are, in fact, not rich at all. They are refugees. But they pay attention to what their children do, they encourage them, they supervise them where they can, and as a result of that kind of encouragement, the children concentrate on their work and they do well in the American system.

What is true of the Vietnamese children is also true of children in Singapore and anywhere else in the world. If there is parental interest, if there is warmth and encouraging support from parents, even if the parents are not rich, even if the parents do not have a high education, but they are interested in what their children are doing, the children will do better in school. That has been proven again and again from many studies.

Mr Low Thia Khiang: Is the Minister implying that for those students who are not doing well, their parents are not interested?

The Chairman: Mr Low, in future, before you rise, can you please ask for my permission first?

Dr Tay Eng Soon: I think the Member should take the whole thing in context, and not just pick on one point.

On the other hand, it is true that there are parents who, unfortunately, are very nervous about their children's education. They are negative in the way they deal with their children. I think this discourages the children. It shakes up their self-confidence and, in fact, the children do worse. So my advice to parents is to take a positive attitude, to be very encouraging and not to use the opposite, which is to scold them, to criticize them and to compare them with other children and say, "Why is it you can't do better than them?". I think this discourages the child. The reason may be to help them to do better, but the result is the opposite.

On the subject of turnover of teachers in our schools, in fact, the turnover rate in our schools is not high. We have a turnover rate of staff of about 2%-3% a year. If you compare that with the turnover in many other economic sectors, I think the turnover rate of teachers is quite low. 4.15 pm

Dr Tan Cheng Bock has asked a question about graduates who do not have two teaching subjects. I think I will have to refer this to the Public Service Commission or the Education Service Commission because they are responsible for the recruitment of teachers and they also lay down the rules on what is the minimum requirement. But the reason why two teaching subjects have been put in for graduates is that most teachers can be expected to teach two subjects, not just one. So it is quite necessary for them to have two teaching subjects.

Mr Chiam See Tong: Can I just have one more question? I want to ask the Minister this. Assuming that the schools under all conditions are similar, in one school you have got a class size of 25 and the other with a class size of 60, which school would you send your child to?

Mr Lee Yock Suan: May I just supplement what my Senior Minister of State has said in answer to Mr Chiam's question. I understand it is his favourite question and it is something worth debating.

Mr Chiam See Tong: You are right.

Mr Lee Yock Suan: In looking at the education system, we have a tendency in Singapore to look towards the West, USA, the UK, and so on. Some of the Opposition Members might have been teachers before. So they have certain philosophies built in them. If you have been following the press, in the UK, for example, recently their Education Secretary has come out with a new study to show that in fact they were for many years, for generations, influenced so much by this so-called Plowden Report, which says that you should never teach a child, you should let him discover by himself, and you should not even have structured learning and so on. As a result of this, the education system in UK has been blighted for generations and now they are trying to recover. So we must see this in perspective if you want to study and try to improve the education system. We must also compare the situation in Japan, Korea, Taiwan and so on.

As has been mentioned by Dr Tay, in fact the class sizes in Japan and Taiwan are 40, 50 and even above. In Singapore's case, our standard class size is 40; some schools have less. In fact, the average figure for secondary schools is about 36 pupils per class. Those schools that are less popular tend to have smaller classes. The popular ones tend to have big classes, sometimes as big as 44, and their results are better. So it is not so much the class size alone. Let us not over-emphasise this point. If you want to reduce class size, for example, you go from 40 to 20, as advocated by Mr Chiam, you will have to increase the number of teachers by a factor of two. Instead of 20,000 teachers, you need to have 40,000 teachers. Where do you find that number of teachers? And what is the value of so doing? If you teach in front of a class of 20 or a class of 40, what is the difference? You are teaching, right? Of course, if you want to have an interactive method, then it is better to have a smaller class size. But you must remember that sometimes when you interact with the pupils, in fact, you may be spending more time with one pupil at the expense of the whole class. That is a problem that is discovered in the western system.

The problem with the western system is that their children tend to be very indisciplined. While the teacher is teaching, the class will be playing basket ball behind or doing something. Our situation is very different. Our pupils are very disciplined and they want to learn, and their parents want them to learn. So we have discovered that, in fact, with a class size of 40 we are doing very well, and should be proud of the results that we have been achieving year after year. I think they compare very well with international standards. Personally, I am amazed at the number of students who score straight A's in 'O' level and 'A' level.

Studies have been done of the education system in Japan as compared to, say, 2America, and it has been found that, in fact, the Japanese tend to score the highest rates in any common test, say, mathematics, as compared to the Americans. The Japanese have a larger class size, as compared to the Americans who have class sizes of 20 or 25. I would like to quote here an example of some recent publication by the London Sunday Times, 12th January 1992, by a person called Norman Macrae. Some of you might have read this article. I quote from the article:

'Recent US computer studies of educational achievements started in America in the 1960s and 1970s ... Computers checked the development of verbal and other skills in more than 1 million mainly American youngsters, and correlated these with the things educationists had said mattered most, such as greater state spending per pupil [put more money in] and on themselves [on the teachers], smaller classes, [Mr Chiam's favourite point], more modern buildings. They found nil or negative correlation, almost each time.'

This was a detailed computer study done by experts in America and in the UK.

Again, I quote from the same article:

'The most successful Japanese schools have classes of about 55 while the schools in America and Britain that breed most juvenile delinquency have twice as many teachers per pupil. The school districts in Britain that spend most taxpayers' money tend to have the worst exam results.'

So, let us be careful when we advocate small class sizes. One reason why the independent schools have been forced to raise the school fees has been that they cut down the class size. If you go down from a class size of 40 to a class size of 30, it means that you need one-third more teachers. As a result, you need more spending. But is it worth spending that money? This is the main point.

As Dr Tay has said, the key factor which determines whether a school is a good school is the quality of the principals and the teachers. This is the area where you should pay the most attention. I think we should not be overly optimistic about the situation. There are a lot of career opportunities amongst the young and wedo have to compete very hard to get good teachers. Although Dr Tay has quoted figures to show that we have been able to increase the recruitment rate, at the same time the older teachers are also retiring. So we have to keep at it and make sure that we get the best people, and let them do their professional job in educating our children.

The Chairman: Order. We have run out of time on this amendment already. Mr Lew.

Mr Lew Syn Pau: Sir, I am happy to note the progress made on many of the issues raised. I thank the Minister and the Senior Minister of State for their replies, and I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (3). Mr Peh, can you take the three subjects together.

Mr Peh Chin Hua: ( In Mandarin): Sir, I beg to move,

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

Sir, I would like to raise an issue of great concern to the parents, that is, the much too heavy school bags which are being carried by our primary school students. Every morning, I see these poor children carrying their heavy school bags on their way to school while it was still dark. Like other parents, I am very concerned with this matter. As we all know, students in Primary 1 and Primary 2 classes are still very young. How could they find the strength to carry their very heavy bags, especially when they have to squeeze themselves into the buses? Just look at how top-heavy they appear and it is enough to make you feel uncomfortable. When it rains and the road surface becomes very slippery, with one hand carrying the umbrella and the other supporting their spectacles, they have to make their way in a flurried and staggering manner like a drunkard. This is indeed a sight that worries me! I was told that, on the average, the bag of a primary school student weighs between 4.5 kilograms and 5.5 kilograms, which is about a quarter of his weight. The present Primary 1 workbook alone weighs about half a kilogram.

Although some doctors have commented that up till this date, there is no medical evidence to show that the heavy school bags have, in fact, adversely affected the future development of the children's physical health, I believe the parents are still very concerned about this problem, particularly when the Ministry of Defence is now taking action to reduce the weight of haversacks carried by our soldiers in their training. A study conducted by the Ministry of Defence reveals that the weight to be carried by a soldier while marching should not be more than 40% of his body weight, and in combat, not more than 30% of his body weight. All the more, we should do something for our poor little school children!

As such, I urge the Ministry of Education to look squarely at this problem. I suggest that apart from ensuring that the school textbooks, supplementary teaching materials and workbooks do not grow thicker and thicker, the Ministry of Education should consider providing a locker for every student in his own classroom to keep his textbooks and workbooks which are not immediately needed for home revision. In this way, all a student needs to bring home are the homework and textbooks which need to be revised. In this way, it will greatly reduce the students' fear of being scolded by teachers for not bringing certain books to school and, at the same time, reduce the weight of their school bags. Also, with the availability of these lockers, the primary school students can be taught how to tidy and manage their own school bags, without having to wait until they go to national service to do all these basic skills.

Sir, I hope the Ministry of Education will actively study this matter and take positive action on it.

Can I go on to the second cut, Sir?

The Chairman: Yes.

Mr Peh Chin Hua (In Mandarin): Sir, the next issue I want to raise concerns loyalty to the school. Over the past few years, the Ministry of Education has been making a number of changes with rather significant results. However, with regard to the effort to cultivate the students' loyalty to their Alma Mater, which was a traditional virtue of students in the old days, there seems to be no great improvement. I hope that the Ministry of Education would, apart from encouraging the various schools to establish their own Old Boys' Associations, also consider the following points:

In order to upgrade the facilities of the schools, very often the Ministry of Education would either demolish the old school building and build a new school building on the existing site, or move the school to a new site and let others make use of the old building. The effect of this practice is that when old boys go back to their Alma Mater, they find that the entire environment, including the classrooms, library, sports field, etc., strange and unfamiliar to them and they just do not have any nostalgic feeling towards their Alma Mater. If a school has to move because of dwindling enrolment, that is understandable. But, if there are students seeking enrolment to the school, and yet the Ministry keeps on moving it, then it simply makes no sense at all! Take my Alma Mater, I Tong School, for example. It was moved from Amoy Street to Ang Mo Kio, and again from Ang Mo Kio to Bishan.

I feel that to upgrade the facilities of a school it is not necessary for the entire old school building to be demolished. We can upgrade it by altering its structure or design, just like the mammoth upgrading project for HDB flats in Marine Parade. We should try, as far as possible, to preserve the facade of the school building. In the recent expansion project of the Chinese High School, they preserved their old clock tower. To my knowledge, many famous universities in the world have very old-fashioned and outmoded buildings, but they have lost their glamour and reputation because of these changes. They do not fail to catch up with the times just because their premises are old and outmoded.

The frequent changes of teachers and principals is another area of great concern to us. These frequent changes have resulted in the teachers and the principals losing their sense of belonging to their schools. Some teachers are transferred so frequently that they have taught in three different school, within five years of their teaching career. As a result, when the old boys of the school return to their Alma Mater, they find that not only the physical environment has changed, even the human environment is not the one that they could identify themselves with. So, how do we expect our students to have feelings and sentiments for the physical and human environment which is totally unfamiliar to them? How can we cultivate in them the love and loyalty to their Alma Mater, which was the tradition in the old days? In short, human beings are sentimental beings. If you cannot even bring out the traditional sense of loyalty from the old boys in the past, how do you expect future graduates to love and remain loyal to the old school?

I therefore urge the Ministry of Education to review all these factors which stand in the way of cultivating the sense of loyalty and belonging for the school among its past and present students. The manifestation of students' loyalty to their school will lead to the citizens' loyalty to their nation. This is important to Singapore's education in the future.

Shall I go to the next amendment, Sir?

Mr Chairman: Yes, please do.

Mr Peh Chin Hua (In Mandarin): Sir, here I would like to raise my third issue which is a sensitive issue, that is, on sex education. I feel that in our education system, sex education is seriously lacking in our secondary schools. This is clearly evidenced in the response from the students at a Pre-University Seminar held in June last year. For this reason, I welcome the Ministry of Education's announcement that it will start to introduce sex education in the curriculum of the Secondary 1 and Secondary 2 classes, and to attach more importance on the teaching of sex knowledge. However, I hope that the Ministry of Education, while implementing the teaching of sex education, will tie up with the inculcation of a complete set of correct values. If you teach sex education as a science subject or health science, then it will not achieve its expected results. Therefore, we have to inculcate in our students the proper values so that they will realize ---

The Chairman: Order. Moment of interruption.

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

Mr Lee Yock Suan: Mr Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates for the financial year 1992/93, and ask leave to sit again on Monday, 16th March 1992.

Mr Speaker: So be it.