ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1992 TO 31ST MARCH, 1993 Order read for consideration in Committee of Supply [6th

Allotted Day].

[Mr Speaker in the Chair]

Head P (cont.) -

Resumption of Debate on Question [17th March, 1992],

"That the total sum to be allocated for Head P of the Main Estimates be reduced by $100." - [Mr Loh Meng See].

Question again proposed.

Mr Loh Meng See (Kampong Glam GRC): Sir, yesterday, before the adjournment, I spoke on the subject of consultancy fee scheme. After almost two years of experience in operating the existing consultancy fee scheme, I have no doubt that the Ministry of Health will be able to come out with a fair, equitable and competitive revised remuneration system for doctors and specialists. I would like to hear from the Minister on the revision that he suggests.

Sir, there is a wide gap and difference in the recovery rates of the B2 and B1 wards. May I suggest that the Ministry consider providing an in-between category, say, with 50% recovery rate. This will provide for a continuum of recovery rate and the middle income group would be taken care of.

Sir, can I move on to the next subject?

The Chairman: Yes.

Mr Loh Meng See: Sir, I would like to know, under this heading "Voluntary and non-medical participation" what kind of help the Ministry of Health is extending to the St. Andrew's Community Hospital and the St Luke's Home for the Elderly Sick to be opened at Bukit Batok. Sir, what about Kwong Wai Shui Hospital, an example of a community hospital run for many years by a clan association? Can the Ministry not give grants to refurbish and put to the hospital to wider use? I understand that there is still capacity at Kwong Wai Shui Hospital to take in more patients. I hope to see more clan associations coming forward to extend their resources to help look after the elderly sick.

Finally, I suggest that the CPF Board set up a medical insurance corporation to pool the resources of contributing CPF members. If we have a direct pooling of insurance premiums through CPF medical insurance, we can find some ways to help those unfortunate fellow Singaporeans who need hospitalisation.

Also, may I know from the Minister what are the measures that will be taken to implement the recommendations of the Review Committee because ultimately, what is important is that we have the will to implement all the recommendations suggested in the Review Committee's Report.

Mr Peh Chin Hua (Jalan Besar GRC): ( In Mandarin): Sir, I support the recommendation by Dr Ow Chin Hock yesterday, that the Ministry of Health should attach more importance to the role of traditional medicine. Now, I would like to urge the Ministry of Health to conduct a National Examination on Chinese Medicine to regulate and promote the practice of Chinese Medicine.

According to information given by the Chinese Physicians Association, there are more than 1,500 Chinese physicians, more than 800 Chinese medicine shops, and more than 30 charitable Chinese medical clinics operating in Singapore. This illustrates the esteem given to Chinese physicians and Chinese medicine by the people of Singapore. It also confirms the curative effect of Chinese medicine. As such, I feel that the Ministry of Health should not ignore the need to control the practice of Chinese medicine in Singapore.

Today, government leaders in China, such as Deng Xiaoping and Yang Shangkun, live up to 70-80 years old, and are still enjoying good health. It shows that Chinese medicine does have its curative effect.

In Singapore, during the examination period, parents would give their children ginseng solution or boil chicken soup with some Chinese herbs to strengthen their bodies and improve their mental alertness. This again shows that Chinese medicine does have some curative effect.

Presently, in order to prevent some "quack" doctors from cheating and carrying out improper practice, thereby tarnishing the reputation of Chinese medicine and damaging the health of the people, the Chinese Physicians Association has exercised some self-regulatory measures such as the issue of Practising Certificates for its members to display at their clinics. However, without the involvement of the Ministry of Health and the statutory effect that would follow, this measure may not achieve its desired result. As such, I would once again urge the Ministry of Health to legislate the control of Chinese physicians and the basic facilities required of their clinics for them to practise Chinese Medicine, so as to avoid a repeat of incidents such as the misuse of western medicine by the Chinese physicians.

I suggest that the Ministry of Health invite "National Grade" Chinese physicians from China and Taiwan to come over here to discuss the matter, and together with the established local bodies of Chinese medicine, form a "Chinese Medicine Examination Board" to conduct a national examination for all the Chinese physicians in Singapore. This will prevent those who have received just two or three months of training from practising and passing off as qualified Chinese physicians. In order to give the practising Chinese physicians more time to prepare themselves, psychologically and professionally, the Ministry of Health may consider implementing, after a certain date in a few years' time, the ruling that only those who have passed the National Chinese Medicine Examination may practise Chinese medicine, and recognizing the medical certificates issued by these qualified Chinese physicians. I am sure those bona fide and experienced Chinese physicians are supportive of the move to uphold the reputation of traditional Chinese medicine. They will not be afraid to undergo this examination process to prove their worth, and to enhance the image and reputation of Chinese medicine. At the same time, I would suggest that this examination be conducted in Chinese for the convenience of the many Chinese physicians.

In addition, the Ministry of Health should conduct regular checks on Chinese herbal and patent medicines, with proper regulatory measures, so as not to hamper the development of Chinese medicine.

I hope that the Ministry of Health would treat this as a matter of importance.

Dr Michael Lim Chun Leng (Cheng San GRC): Sir, in view of the time constraint, I will withdraw my amendment and raise the issue on another occasion.

Dr John Chen Seow Phun (Hong Kah GRC): Sir, the Government's cost recovery target for B2 and C wards has been fixed at 40% and 25% respectively. The actual cost recovery reached by Government hospitals in 1991 was about 25% for Class B2 and 15% for Class C. Sir, medical costs would continue to rise due to increases in manpower cost, the use of high medical technology and life expectancy. Therefore, even if the recovery rates are fixed at the current level, subsidised patients would already have to pay for such increase. The raising of recovery rates will further add to their burden. Take Class B2, for example. Assuming that the recovery rate is to be increased from 25% to the targeted 40% by the year 2000 and that unit hospitalisation cost increases at the rate of, say, 6-7% per year, which is a conservative figure, the annual rate of increase in charges for Class B2 is estimated to be about 14%. That is a fairly large annual increase and will appear contrary to the Government's concern for the lower income groups.

I therefore urge the Minister to consider reducing the targeted cost recovery rates for both Class B2 and C wards to at most 35% for Class B2 and 20% for Class C.

The Chairman: Mr Yeo. We saved some time during Question Time, so you have some extra time. "Guillotine" time will be 1.33 pm for this amendment.

12.45 pm

The Minister for Health (Mr Yeo Cheow Tong): Sir, first, I would like to thank my many colleagues who have spoken on the health budget. Many views have been expressed, comments made, and also many suggestions.

Sir, Members have covered a very wide range of topics. I will respond to the key issues raised before going on to answer the other questions raised by individual MPs.

Sir, let me first explain the Government's philosophy on health care.

Government's philosophy

Sir, health spending is rising in many countries. In developed nations, health spending has exceeded economic growth, and absorbed an increasing share of the nation's resources. As societies grow more affluent, they tend to place more emphasis on the quality and the value of human life. Aging populations, rising manpower costs and the greater use of expensive medical equipment and drugs all exacerbate the problem.

Whichever way we choose to finance the cost of health care, we must recognise that the burden ultimately falls on the people. This is true regardless of whether patients pay directly for their own medical treatment, buy medical insurance to cover the risk, get employers to provide them with medical benefits, or pay taxes to fund medical subsidies from the state. Insurance premiums have to be paid by the insured, employee benefits form part of the wage costs, and taxes have to be paid by everybody, ie, the taxpayers.

The question is therefore not how Singaporeans can enjoy good health care without paying more. It is how best to structure the health care system, and the means of financing it, in order to make it efficient, economical, accessible to all citizens, and at fees that they can afford.

Where countries have provided "free" medical services funded out of general taxation, eventually the services deteriorate in quality, and the financial burden on the state becomes unbearable. When the individual enjoys health benefits unrelated to his own contribution, he feels no responsibility to stay healthy and use medical resources only when he needs them. Such services appear to be free to the user, and demand inevitably becomes insatiable. Subsidies, no matter how large, will always be insufficient. Sweden, after 70 years of state welfare, plans to reform its system of government-funded free health care. Canada and Britain also face problems. Even Communist China intends to start charging state employees for medical care.

Singapore must learn from the lessons of these countries. Our medical system is based on individual responsibility, coupled with state subsidies to keep basic health care affordable to all. No Singaporean expects to enjoy health services for free. When he is hospitalised, he pays part of the bill, more if he is in B2 and B1 class wards, and less if he is in a Class C ward. His Medisave is his own money. This gives him the incentive to be healthy, minimise his need for medical treatment, and save on medical expenses.

Recommendations of Health Review Committee

Sir, I will move on to the recommendations of the Health Review Committee which Mr Loh has also asked about and which Members have commented on.

Sir, the Review Committee has published its findings. In its first Report, it emphasised preventive medicine and healthy living. The final Report reviewed the current health care policies, in order to contain health care expenditure and Government subsidies, and to keep basic health care accessible and affordable to all Singaporeans.

The Government has accepted all the Committee's recommendations. The six key ones are:

(1) Priority Health Care Programmes to improve the health of the elderly, strengthen the management of cancer, heart diseases and strokes, enhance child health, and improve medical services and health education;

(2) Measures to contain health care costs - These would include public education; avoiding over-supply of doctors, duplication of expensive medical technology and excessive sub-specialties; encouraging development of more economic alternative facilities; and carrying out medical audit programmes;

(3) Government's role to be reviewed to allow part of its market share as a provider of hospital services to be taken over by competitive providers and other organisations running not-for-profit hospitals;

(4) Restructuring of hospitals to continue, to produce maximum cost efficiency. The level of service to be pitched at what the public can afford;

(5) Health care financing - To review the various mechanisms to curb excessive demand and restrain increases in health care costs; and

(6) Health subsidy policy - I will elaborate on this.

Subsidy rates

The Committee proposed that the Government should continue to subsidise 80% of C Class costs, and to raise co-payment levels for Class B2 patients gradually together with improvement of service. The Government agrees. Dr John Chen has also raised that just now. The Government has decided to set the following target subsidy rates for the ward classes in our hospitals: A Class ward, there will be no subsidy. Patients will pay the full cost for delivering such services. B1, the subsidy rate will be 20%; B2, the subsidy rate will be 65%; and C, the subsidy rate will be 80%.

In addition, the Government intends to provide a new 5-bedded ward, intermediate between B1 and B2 wards. It will be subsidised 50%.

Sir, this scheme enables the Government to focus health subsidies on those who need them most. The Government does not intend to phase out medical subsidies, except for A Class wards. The C Class subsidy will not be reduced below 80%. That is an assurance. An 80% subsidy means that for each dollar that the patient pays, the Government in effect pays $4 on his behalf. In the B2 Class wards, the Government pays twice the amount paid by the patient.

Fee increases

Sir, despite these large subsidies, Government and restructured hospitals will still have to raise fees regularly in order to attain the target subsidy rates and maintain medical standards. They have been doing this for the last few years. Further fee revisions can be expected this year. Our policy is to revise fees regularly by smaller amounts, rather than infrequently in big jumps. Whatever the fee increases, the percentage level of subsidies which I have just mentioned will be maintained.

Some of the restructured hospitals, for example, Singapore General Hospital, are already close to the target subsidy rates. Their fee revisions can be smaller, sufficient to cover the annual increases in wages and other costs. Other hospitals are still below the target subsidy rates. They will gradually raise the recovery rates until the targets are reached. They therefore must make larger fee revisions for the next few years.

Medisave

Sir, let me move on to Medisave. To help Singaporeans save enough to pay for their part of the medical bills, the Government instituted Medisave in 1984. Each person contributes to his Medisave account to meet future medical expenses of himself and his immediate family. This arrangement has helped most Singaporeans to meet their hospital expenses.

The Medisave is not meant to cover the entire cost of a person's medical needs. It only covers that part which the individual has to bear - 20% if he goes to C Class wards, and 35% if he opts for B2 Class. The rest of the cost is covered by the Government subsidy. The Medisave contribution rate of 6% of income was set to enable the average middle income family to save enough to cover treatment in B2 Class wards, and the average lower-middle income class family to pay for the C Class charges. The savings should be enough not only to meet ongoing expenses, but also to accumulate a sum for medical needs after retirement.

In the long term, Medisave should assure all Singaporeans of access to good basic medical care. However, the Medisave scheme was introduced only eight years ago. The scheme has not yet reached steady state. Meanwhile, three transitional problems have arisen, which have contributed to the worries of Singaporeans that they will not be able to meet rising health care expenses. The three transitional problems are:

(1) The 6% contribution rate was an initial estimate of the amount necessary. It has to be adjusted as we gain actual experience of usage and cost trends.

(2) Most self-employed Singaporeans have not yet been brought under Medisave. The hospitals all report that this group has greater difficulty in meeting their hospital bills.

(3) Older Singaporeans have not accumulated enough Medisave in their earlier working years to meet their post-retirement needs. Many rely on their children, but their children may have just started working, and may not have sufficient Medisave to support aged parents.

The Government will tackle these issues by raising contribution rates for older Singaporeans, extending Medisave coverage to the self-employed, and through Medifund.

Medisave contribution rate

The experience gained since the introduction of Medisave shows that the 6% Medisave contribution rate was conservative. The Review Committee has confirmed this. To enable Singaporeans to save enough for their hospitalisation needs after retirement, the Government will raise the Medisave contribution rate for older Singaporeans in two stages. From 1st July 1992, the rate for those above 35 years of age will increase from 6% to 7%. From 1st July 1993, the rate for those above the age of 45 years will be further raised to 8%. These increases will be achieved by correspondingly reducing contributions to the CPF Ordinary Account. The overall CPF rate will remain unchanged, at 40%.

The approach of increasing Medisave contribution rates for older Singaporeans means that workers will channel more of their savings to their HDB flat while they are young, and more towards Medisave as they grow older, when their flats are largely paid for, and their own and their families' medical needs increase. 1.00 pm

Some Singaporeans aged above 35 will still have mortgages outstanding. HDB estimates that the reduction in contributions to the Ordinary Account will have minimal impact on their HDB mortgages. However, HDB has agreed that in cases where there are difficulties, it will extend their loan repayment period.

The Government will review the trend of medical expenses and Medisave contribution rates over the next few years. If the rates of 6%, 7% and 8% still prove insufficient, further adjustments may be necessary.

Medisave for the Self-Employed

So far, Medisave has not been extended to the self-employed. The self-employed can contribute voluntarily to Medisave, but only very few, about 200, have done so.

The Government will extend Medisave to self-employed Singaporeans earning more than $200 per month from 1st July 1992. The contribution rates will be phased in gradually, so that the self-employed do not suffer a sharp drop in their take home pay. The initial rate will be 3% for self-employed of all age groups. The rates will be raised gradually by 1% point per year, until they are level with those for other employees, that is, 6%, 7% and 8% depending on the age of the contributor. Sir, I will now ask the Clerk to hand out the table (Cols. 1271 - 1272). [Copies of table distributed to hon. Members.] table - New Medisave Contribution Rates (Cols. 1271 - 1272)

Sir, the Government will verify Medisave contributions through personal income tax returns. When the self-employed file their tax returns, IRD will assess their Medisave contributions for the year based on their declared income.

In addition, from 1st January 1994, the Government will also require those who apply for licences, for example, taxi drivers, hawkers, or shop proprietors, to show proof that they have contributed to Medisave before it issues licences to them.

Medifund

Medisave and MediShield should cover the medical expenses of nearly all Singaporeans. But in the minority of cases where they are insufficient, Medifund will supplement them. Government will give Medifund an initial endowment grant of $200 million. Subsequently, it will contribute up to $100 million each year to Medifund, provided the economy does well and there is a budget surplus, until a sufficient amount is built up in Medifund. Only the income from the endowment fund will be used.

Medifund will act as a safety net. It will assist citizens who cannot afford to pay their hospital bills, either by themselves or with the help of their families. It will cover patients in C and B2 Class wards in Government and restructured hospitals. Patients in both classes of wards will receive the same dollar amount of support from Medifund.

Depending on the need in individual cases, Medifund will pay all or part of their bills. In cases where the patient or his family members are still working, Medifund may instead give loans which they can repay out of future contributions to Medisave.

Singaporeans eligible for Medifund support will include, firstly, the destitute and the indigent, who presently apply for hospital fee waivers; secondly, younger Singaporeans who have not worked long enough to accumulate sufficient Medisave, but who are unexpectedly faced with high medical bills; and thirdly, older Singaporeans with no Medisave, or who did not accumulate enough Medisave before retiring because the scheme was implemented too late for them.

Medifund will give greater support to those who have contributed regularly to their Medisave accounts, and who are covered by MediShield, but, despite this, have run into difficulties. This will be an added incentive for the self-employed to contribute regularly to Medisave, and for all Medisave account holders not to opt out of MediShield.

Medifund will be supervised by an Advisory Committee which will include com- munity leaders. The administration of the scheme will be decentralised to hospitals.

It will take some time for the Government to draft and pass legislation to set up Medifund. This should be done by 1993. Meanwhile, the Ministry of Health will continue its existing fee waiver scheme, but it will apply the new Medifund rules in approving requests for fee waivers.

Other Providers of Health Care

Today, the Government provides 80% of hospital beds in Singapore. However, the trend is for the private sector to play a bigger role and to compete against Government hospitals as in obstetrics. While the Government will always retain a major role in health care, it also encourages more competitive providers to enter the sector, to give Singaporeans more options to choose from.

There is room for the unions and other civic organisations to run hospitals on a not-for-profit basis. Such hospitals will be given the same subsidies as Government and restructured hospitals, and their patients will be eligible for Medifund on the same basis. They should provide a full range of wards, from unsubsidised Class A wards to the heavily subsidised C Class wards.

The Government has been discussing with the NTUC on the possibility of the unions taking over and running a major hospital. The NTUC has expressed interest in taking over the Tan Tock Seng Hospital. The Government intends to redevelop Tan Tock Seng Hospital with modern facilities, and hopes that the NTUC will operate it as an integral part of our national health care system.

Sir, let me conclude by saying that as a percentage of GDP, our health spending has not risen as sharply as in other countries because our population has been young and our economic growth has been high. But the population is aging. We cannot assume that economic growth will continue to outpace health care spending as the economy matures. Expenditure on health care, currently at 3.1% of GDP, is likely to rise steadily over the next two decades.

Every Singaporean has the duty to stay fit and healthy. A healthy lifestyle will reduce his chances of falling sick. He should save up for future medical needs by contributing regularly to Medisave. And he should use his Medisave prudently, by choosing the class of ward which he cancomfortably afford.

The Government will implement the measures contained in the Review Committee's Report to restrain the rise in health care costs. The subsidy policy for the different classes of wards, the changes to Medisave contribution rates, the introduction of Medisave for the self-employed, and the creation of Medifund will help to keep our basic medical care affordable and accessible to all.

Sir, I now move on to some of the other points raised by Members. Various Members have expressed the fear of the public, as well as their own fear, as to whether our hospital charges are affordable despite the high subsidy rates. Sir, it is very understandable. But the fact is that the hospitals are expensive operations to run. The hospitals are highly labour-intensive and, not only that, the labour that is required in hospitals is all highly skilled. Nurses, doctors, therapists, radiographers, all of them require long periods of training and, therefore, they command high salaries. As a result, labour costs make up about 70% of hospital costs. Added on to that, hospitals also require medical equipment, many of which are high tech, very expensive, as well as a full range of drugs, some of which are again very expensive. These equipment, drug cost, maintenance cost, make up the remaining 30% of the hospital costs.

To give Members an idea of what is really involved in running a hospital, I will give you the example of the Singapore General Hospital. The hospital requires over 4,000 staff to operate it round the clock. It requires a budget of $270 million a year, that is, about three quarters of a million dollar a day to run. I believe this is more than what it costs the whole of the MRT to run. So the costs are high and because of that, Government has made available very generous subsidies, depending on the class of wards that the patients choose. The patients are allowed to choose based on what they can afford. In fact, some may choose to go to wards which they cannot really afford. We would like to encourage all patients to choose the class of ward wisely. Sir, Encik Haron Eusofe has asked how affordable those fees are, and Dr Wan Soon Bee has also stated that even if patients pay 20% to 25% of Class C costs, the charges can be crippling. We have to focus our mind on what really are the actual charges faced by our patients. I will quote what the patients have to pay in the Singapore General Hospital. 75% of Class C patients in the Singapore General Hospital pay less than $400 each time they are hospitalised. That means from the day they go in to the day they come out, including the cost of the ward, medication, doctor's fees, operation fees, if they have an operation, 75% of the patients pay less than $400. Let us convert that to Medisave contributions. Using the 1990 census, the 20th percentile income of individuals is $730. Based on the 1990 figures, it would take a person, if he is paying for himself or his family, nine months of Medisave contributions if he goes to a Class C ward.

If they choose to go to Class B2 in the Singapore General Hospital, 75% of the patients will pay less than $635 as a total bill. If we assume that patients going to Class B2 are at the 40th percentile income, then their salary is about $1,000. This is equivalent to about 10 months of their Medisave contributions. The Class B2 and Class C bills in the Singapore General Hospital, being a tertiary hospital, a more expensive hospital, are actually quite affordable. If patients choose to go to the other hospitals, like Toa Payoh Hospital, Tan Tock Seng Hospital or Alexandra Hospital, being secondary hospitals, the costs are much lower and the bill sizes will be even lower. It will also require fewer months of Medisave contributions to pay for the bills. The bill sizes are affordable and they are not crippling. And we must also remember that for those who cannot afford even these subsidised bills, we have a safety net of waivers. Now that safety net will be provided by Medifund. 1.15 pm

Mr Othman Haron Eusofe appealed to the Ministry to keep health costs down, especially hospital costs, and asked what are we doing with regard to that. Various MPs have also asked about this. I will go through it quickly. Sir, labour cost is the primary cost factor. So we must address the labour cost. The hospitals will try to improve the systems and procedures so that they can use less people. We will use less expensive staff, where possible. For example, instead of using nurses to do clerical work, we recruit clerks, who are less expensive, to do clerical work.

A very important area and one which Dr Wan also asked is: are we giving Singaporeans a level of service that is too high for them to afford? Singaporeans want better service. They do not want to wait half an hour. They prefer to wait only 10 minutes. It can be done by putting in more people. To do that, it increases the cost. When they call for a nurse in the ward, they want the nurse to respond immediately when they press the button. It can be done. You put in more nurses. That again raises the cost. So we will have to re-examine our service levels and see whether we can actually afford those service levels.

Secondly, technology related. Mr Loh has also mentioned that. We will have to control tightly the purchase of high-tech expensive equipment. Some scarcity may be useful, and I agree with Mr Loh on that. We also have to tighten on the use of drugs, especially the more expensive non-standard drugs. We will have to audit our operations properly, both in the public and the private sector, to ensure that there is no unnecessary admission and investigation. So all these, we feel, will help us to address the issue of rising health care costs and how to control them.

Sir, I will now ask my Minister of State to reply to some of the other questions.

The Minister of State for Health (Dr Aline K. Wong): Sir, I will answer the questions and points raised by Dr Vasoo, Dr Tan Cheng Bock and Mr Loh Meng See.

I agree with Dr Vasoo that the best strategy to keep health care costs down is to build a healthy nation through health promotion and disease prevention. My Ministry has always placed a great deal of emphasis on this. And now with the recommendations of the Review Committee, we will put even greater efforts and resources into these programmes and promote healthy lifestyles.

Dr Vasoo suggested that we should provide some incentives to those aged 40 years and above to encourage them to remain fit and healthy. Specifically, he mentioned the use of IPPT test as a criterion for rebates into Medisave accounts. Fitness testing is actually more than testing for health related fitness. It also tests for things like muscular endurance, power, agility, coordination and speed. We need to be clear what we are testing for. If we are only reviewing to see if a person is free from illness, then this is different from testing for fitness. And when we say that a person is healthy, we usually mean that he is able to carry out daily tasks with vigour and alertness and that he is free from illness. But the most important question we must ask ourselves is this: what are the reasons for us to stay fit and healthy? Should we do it only because of incentives? I should think not. The benefits of a healthy lifestyle are enjoyed directly by the individuals themselves. They stay fit and healthy because they can eat better, sleep better, work better and feel better. In other words, the benefits of healthy life style are to raise the quality of life.

Medisave itself already has a strong incentive for people to stay healthy. Medisave is their own money. It is also tax exempt. If they stay healthy and do not fall sick, their Medisave accounts will remain intact. If they manage to stay healthy throughout most parts of their life, then they will have enough Medisave left for the hospitalisation needs during their old age. Therefore, I think there is already a big incentive in the Medisave scheme for people to want to stay healthy. Employers, if they want, may consider giving, say, rebates on the medical benefits given to the employees if such benefits are not used up annually. But this is up to them.

With the commitments we have made to promoting healthy lifestyles on a national scale, and we are going to sustain this effort over the entire decade, I should think the message would sink in and people would be motivated enough to make healthy living part of their daily life.

Dr Tan gave us some very constructive comments on primary health care. I agree with him that we should emphasise it because this is the first line of defence in medicine. And if we do it well, it will help us to cut down health care costs. This is why over the years, we have upgraded our primary health services through improving our facilities, staffing levels as well as providing better training for our personnel.

Let me, first of all, point out that the figure of 30% of the health budget that Finland spends on primary health care refers to the national health expenditure. Because Finland has a national or state funded health system. There is no private sector, so to speak. The national health expenditure is equivalent to the government health expenditure.

It is true that in Singapore, we spend 12% of the Government health budget on primary health care. But if we look at the national level, private individuals also see primary health care doctors, GPs, etc, and they also spend on primary health care. Overall, judging from what we know on the household expenditure and the items people spend on health and within that, the amount spent on hospital care as compared to, say, primary health care, our overall national expenditure on primary health care is quite comparable to Finland, if not surpassing it.

Secondly, I want to point out that the Government's 25% share of primary health services actually covers a lot of the health modalities that Dr Tan mentioned, such as health education, immunisation, maternal and child health services and rehabilitation. In other words, we are not doing just curative care. We are not just giving outpatient treatment. We do all these other things that Dr Tan referred to.

In recommending the Government to maintain the present share of primary health care, my Review Committee realised that the bulk of the work in health education, health promotion and disease prevention must be done by the Government. GPs do some of it but the bulk of their work is in medical treatment. So the big responsibility falls on the Government and we realise that. All of the elements of primary health care that Dr Tan mentioned from preventive care to curative care to rehabilitative care are already found in our polyclinic system. No doubt, these are large clinics. They serve a large number of patients and their service may not be as personalised as that provided by GP clinics, but this is unavoidable.

For those who have chronic illness and require continuous care, perhaps the polyclinics at the moment are not providing the ideal type of continuous care to them also. So Dr Tan's suggestion is for some of the services to be decentralised, to be brought down from the polyclinic level to the doorstep of the people, so to speak. There is merit in this proposal, especially where the continuous care of the chronic sick or the elderly sick patients, people with diabetes, are concerned. We have actually thought about this concept, only that we are calling them multi-service day care centres. To do it well, we need more nurses, therapists and volunteers. Right now, we are still short of nurses and therapists, even for existing services. So it will take time. But if it takes Finland 10-15 years to do it, then I think we should be heartened.

The cooperation of doctors is highly necessary in community health services and I think Dr Tan will agree. If he has some good ideas about how to encourage GPs to participate, such as in providing domiciliary care, in referring patients from the clinics to go to the community health centres for follow-ups and so on, I will be most happy to hear his ideas. We do not have a system where all the doctors are salaried or are employed by the Government in Singapore. So that is one of the problems.

Meanwhile, we have already started to bring primary health care to the community level. For example, the Home Nursing Foundation nurses have been going out to visit patients at home. They use the senior citizens' health care centres at our polyclinics as the base from which to go and visit the patients. We also have stroke rehabilitation, ie, rehabilitative services for stroke patients. We have day care as well as therapy provided at the polyclinics. Some senior citizens' health care centres have started involving volunteers to help in the work, and we are looking into working with voluntary welfare organisations to provide home help service to the elderly patients. So you can see we are already working in that direction of reaching out to the community from the polyclinics. But let us be very clear in our minds, at the polyclinics we already have a lot of the elements that Dr Tan refers to and, in fact, we have started and we will be giving more effort to reach out to the community.

As for Dr Tan's concept of referral centres, I think it is akin to our specialist outpatient clinics. These are located at our hospitals and they provide ambulatory care. So Dr Tan's idea that these referral centres should provide ambulatory care including day surgery, we are already doing that. We have been putting more emphasis on ambulatory care, day surgery, etc, in order to free the hospitals of the space and the facilities that are required for other kinds of conditions. So Dr Tan's suggestion for specialist referral centres in fact already exist.

A very quick response to Mr Loh Meng See's suggestion that we should involve more voluntary organisations in the provision of health care services. Yes, indeed, this is my Ministry's policy and intention to involve more voluntary organisations. Because they are able to bring support from the community and in this way, we can foster a society of compassion with many helping hands. We plan to encourage and facilitate greater participation of the VWOs in the setting up of community hospitals, in the building of nursing homes, in providing day care centres and other home support services for the elderly and the chronic sick also.

These voluntary organisations, if the plans are approved by us, would be eligible for capital funding of up to 80% and recurring funding of up to 50% of the operating expenditures. For the St Andrew's Community Hospital, we have provided them with $1 million capital grant and we are also providing them with the recurrent subsidy. We will do the same for other nursing homes and community hospitals. St Luke's Home for the Elderly Sick has been approved. A site has been reserved for them at Bukit Batok and we are still working on the details of the proposal. As for Kwong Wai Shiu Hospital, they have done a very good job in providing services which are akin to nursing home services at some level and akin to community hospital services at another. We have been providing them with an annual grant of $50,000 per year. They still have some operating surplus, but we are looking into how we can help them further.

In short, we would like very much to work with voluntary welfare organisations in providing community health services to our people.

Dr Tan Cheng Bock (Ayer Rajah): Mr Speaker, Sir, I would like to respond to some of the comments made by the Minister. I think the Minister has mentioned the health philosophy of our country. I would like to question whether we still subscribe to this philosophy that health is an industry. Because I believe that in health planning, there are actually two facets - financing and health care delivery system. My worry is that we are so concerned about financing that we have actually not paid much attention to the health care delivery system. And I think the two are very closely linked. We can have a very beautiful financing system, but at the end of the day, if your health care delivery system is not efficient, then we are in trouble. 1.30 pm

I feel that we might have over-provided some of the facilities at the high cost area and have got ourselves into a spiralling cost. The hospital is a high cost area. So when we advertise the facilities of the hospitals, when we talk about the good equipment that we are putting into all these hospitals, we are creating demand, we are creating high expectations, and therefore all these people will go to this high cost area. So we will again get into this vicious cycle. You have to put more money into this area and, at the end of the day, you will find that more and more of your health budget will have to be put into this high cost area. As a result, you have to increase your Medisave and create Medifund as a safety net for the patients.

What I am hoping to do is this. I am asking the Minister to get out of this cycle and change the health philosophy. Health care is a service to the people. We should move more into this primary health care area and the proposal that I have made on the primary health care is primarily to see if I could help the Ministry to get a more structured primary health care and, at the end of the day, we would have brought health cost down and Singaporeans will benefit.

The Chairman: We are running out of time. Mr Loh, make your point very quickly.

Mr Loh Meng See: Sir, I would like to differ from Dr Tan. The problem is not really with the primary health care. I think we have got a wonderful record as far as primary health care is concerned. Here, the problem is with regard to hospitalisation needed for the sick. But I would like to ask why the Minister has not commented on the revised consultancy fee scheme.

Dr S. Vasoo (Tanjong Pagar GRC): Sir, I am not really convinced that in giving incentives to people it does not help the nation to save on health costs. By encouraging people to be on a programme to keep themselves healthy, the nation will, in a way, save cost on expenditure. In many companies where they have this wellness programme, results have shown that there are less absenteeism and less people taking medical benefits. I think the same philosophy could be applied by giving people incentives so that in the longer term we are encouraging a healthy and proactive behaviour.

Mr Peh Chin Hua (Jalan Besar GRC): Sir, I have not received any reply from the Minister to my questions.

Mr Yeo Cheow Tong: Sir, Dr Tan has given us a very long discourse yesterday on primary health care. I would urge him to please pay more attention to what we are doing so that he can better understand the whole philosophy because ---

Dr Tan Cheng Bock rose --

Mr Yeo Cheow Tong: Sir, let me finish first.

The Chairman: Order. Dr Tan, the Minister is not giving way.

Mr Yeo Cheow Tong: Sir, he has taken a lot of time yesterday, more time than he could have.

The Chairman: Order. Dr Tan, can you resume your seat.

Dr Tan Cheng Bock: Sir, he has spent about 10-15 minutes on his Ministerial statement.

The Chairman: Dr Tan, resume your seat, please.

Dr Tan Cheng Bock resumed his seat.

Mr Yeo Cheow Tong: Because all that he has described are precisely things that we are already doing. It is just that he has managed to call them under a different name. He has quoted a Finnish model, saying that we are underspending, without realising from the data that actually we are spending more than what Finland is spending on primary health care.

Sir, Mr Loh is correct. I think for primary health care we are very well established. But, nonetheless, I appreciate his concern and I can assure him that in our future studies and planning for primary health care, I will definitely call on him to volunteer his time in helping us to further improve the primary health care service.

Sir, with regard to hospital services, I can assure him that we also share his concern that we do not over provide medical services in the hospital area. That is why we have been freezing the number of beds for many, many years. In fact, we had a freeze for the last seven years on hospital beds. We will continue to gauge the demand very carefully, and ensure that only those who require hospitalisation are being hospitalised. More importantly, to ensure that only those who require investigations are being provided investigations. Otherwise, if everybody comes in for all those tests unnecessarily, we must invest more in equipment, and that will be very adverse.

Sir, on the point about the Consultancy Fee Scheme, I understand, looking at the amendments, that some other MPs may also be talking about it. So I would reply to it later.

Do I have the time to reply to Mr Peh?

The Chairman: We are running out of time, but I will allow you to reply to Mr Peh.

Mr Yeo Cheow Tong: Sir, Mr Peh has brought up the same issue last year too. My reply then was that currently there are no requirements for Chinese physicians to be registered. Since the Government is not involved in the training in any way, my Ministry will continue this practice of not registering them. Nothing has changed in the one year to warrant a shift in our position. But I understand his concern. The question is, how do we help Singaporeans to differentiate between Chinese physicians who have undergone some formal training versus those who have not, but who have obtained their skills either through apprenticeship or knowledge which has been transferred from one generation to another.

The Chinese Physicians' Association has started to issue certificates to their members. I think that is to be encouraged and they should find more ways to publicise this so that when Singaporeans visit a Chinese physician, they can look for that certificate. Also, there are two main schools of traditional Chinese medicine (TCM) in Singapore. For a start, they may wish to consider amalgamating so that there is no question on the standards and the curriculum that they are using. By speaking with one voice, I think the public will be less confused.

Sir, Mr Peh suggested that we get Chinese physicians from China and Taiwan to establish an examination council and to conduct examinations. I think that is a good idea. We should encourage the two TCM schools, after they have amalgamated, to explore this. My Ministry can help them to get in touch with the relevant reputable TCM schools in China or Taiwan and we can also help to clear immigration and work permit requirements. The two local TCM schools should have the expertise to assess TCM practitioners and to assess whether the herbs are genuine and of the correct quality. Unfortunately, my Ministry does not have such expertise. It is therefore better for such programmes to be carried out by the private sector rather than for them to wait for my Ministry to develop such expertise which is very difficult to develop.

Yesterday, Dr Ow also suggested that we explore the possibility of carrying out some research on TCM with Taiwan or China. I am happy to inform him that we are actually doing that. We are exploring the possibility of working with the Chinese on using TCM to complement western treatment for diseases, for example, cancer.

Dr Tan Cheng Bock rose --

The Chairman: Dr Tan, we have run out of time already.

Dr Tan Cheng Bock: Sir, I just want to ask the Minister one question.

The Chairman: All right, one quick question.

Dr Tan Cheng Bock: I just want to know whether the Ministry is on the way to recognise these traditional doctors that the Minister has just talked about.

Mr Yeo Cheow Tong: Sir, I have just said that we have no means of registering them, since we are not involved in their training.

Mr Loh Meng See: Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2). We have 40 minutes. Mr Loh.

Mr Loh Meng See: Sir, can I move on to the second amendment because the Minister has touched on Medisave?

The Chairman: I would prefer you give Dr John Chen a chance to make his speech on the same subject. Are you speaking on your first subject?

Mr Loh Meng See: No.

The Chairman: Dr John Chen.

Dr John Chen Seow Phun: I am not speaking, Sir.

The Chairman: All right, Mr Loh, your second amendment.

Mr Loh Meng See: Sir, I beg to move,

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

Sir, on the question of the manpower situation with regard to health professionals, there has been much debate on the correct number of doctors for Singapore. But the point that I would like to make, Sir, is that we have got an ageing population and we have also to take into account the large expatriate and foreign worker population in Singapore, not counting the number of patients that come from neighbouring countries and tourists who come to Singapore for medical treatment. I hope that the Ministry will recognise that there is the other large portion of patients that needs to be looked after besides Singaporeans, and that an adequate number of doctors should be available.

The point I would like to comment is that, with the restructuring of hospitals and many voluntary welfare organisations manning the institutional care, I hope the Ministry will not reduce its fervour to try to have as many health professionals being trained and recruited, because I am concerned that once the Ministry has less direct control of the manpower, they may leave it entirely to the private sector or to the non-Ministry sector on this matter.

Mr Choo Wee Khiang (Jalan Besar GRC): Sir, the shortage of nursing and paramedical staff is not new to us. Could the Minister enlighten the House on the current manpower situation of the nurses and the paramedical staff? How would this impact on the situation with the restructuring of hospitals and the opening up of more polyclinics and community hospitals? How do we make up for the gap in our supply and demand of nurses and paramedical staff? My concern is whether we are over-stretching our nursing staff and paramedical staff at the expense of good patient care.

Attrition is natural of any occupation. As the majority of the nurses and paramedical staff are female, it is not surprising that some will eventually leave the profession due to domestic reason. This is understandable as nurses who have to work shifts, will have more difficulties in juggling their families with their career.

In order to attract more trained female nurses to stay in or return to the workforce, the Ministry should consider various schemes to allow nurses to work part-time either on certain days of the week or certain hours of the day. Moreover, if we can tap on the part-time nurses or even the paramedical staff to meet the demand of peak hours, without having to increase the number of permanent staff drastically, this would also help to curb the rising health costs.

We should also ensure that optimum use of nursing resources is applied in order to keep down expenditures. Experienced skilled nurses should not be over-burdened with non-nursing functions and paper work. It is too expensive to utilise their services in this manner based on their salary and experience.

Sir, I also think that our nurses should be trained to deal compassionately with sick people. Training in communication skills should therefore form part of the training for nurses and paramedical staff alike.

Despite MOH's commitment to control expenditure on expensive and sophisticated medical equipment, I have no doubt that technology will continue to make its inroads into the health care services. The nurses training programme should therefore equip them with the skills to cope with advanced technology. More retraining opportunities should also be given to the older staff to cope with the changes.

The quality or calibre of the nursing and paramedical staff should also be progressively upgraded to meet the changing needs and rising expectations. I welcome the fact that we are now offering nursing diplomas in our polytechnics. This is a move in the right direction. But in addition, Sir, the nursing profession should also commit to a regular review of its basic training programme to match the changing time. One good example that the nursing training is responding to the changing needs is the fact that they are now offering a gerontological nursing course, or a course on care for the aged. I would like to suggest that MOH consider incorporating this training as part of the basic training for all nurses, if they have not already done so. 1.45 pm

Mr Yeo Toon Chia (Ang Mo Kio GRC): Sir, the perception among the public is that patients in the non-subsidised wards are often attended to by the best specialist doctors and enjoy better medical attention, while those in the subsidised wards, especially C Class, are usually seen by housemen and minimal attention is given to them. It is also common knowledge that some patients are discouraged by their surgeons and consultants to go to the subsidised wards if they want to be sure to be operated on by the surgeon of their choice. And there are also some people who feel that since their Medisave savings cannot be taken out, they might as well make full use of them with whatever Medisave fund they have.

Sir, all these factors have led patients to choose to go to the private wards even when some of them could hardly afford to do so. While we respect the choice of the patients, I feel that efforts must be made to persuade those with low Medisave funds to choose to go to the class they can afford. In this respect, I would like the Minister to enlighten the House on:

(1) Whether his Ministry is taking any measure to bring public awareness that Medisave funds belong to each individual and should be used wisely with a long-term approach.

(2) Whether there are any plans to improve the image of Class C wards so that patients have the confidence that when they opt for the subsidised wards, they are not in an inferior class in terms of medical care and treatment.

(3) What plans does his Ministry have to prevent surgeons and consultants encouraging their patients to be admitted to the private wards in order to schedule their patients' operations to fit in with their operation time so as to charge the surgical and consultation fee. To ensure that surgeons and consultants are not preoccupied with only the private patients, perhaps the Ministry should consider extending the Consultancy Fee Scheme (CFS) to cover subsidised patients as well. In this regard, I would like to hear from the Minister what plan does his Ministry have to modify this CFS scheme.

Sir, Government must not be seen to be catering to a sector of the population with only the private patients having access to the care of the best surgeons and consultants. We must clear the public's doubt that only the rich can buy the best medical treatment and we must ensure that those in the middle and lower income groups feel comfortable that they are also able to afford and to get the best medical care and treatment should the need arise.

Sir, may I move on to my second topic?

The Chairman: Yes.

Mr Yeo Toon Chia: Sir, I would like to suggest the Ministry look into the following areas to ease the shortage of nurses:

(1) Uplift the image of the nursing profession. The recent introduction of a diploma course for the nurses is a very much welcome move by the Ministry. This is definitely one way of uplifting the image of the profession. Perhaps the Ministry should also consider sponsoring or arranging for serving nurses to pursue polytechnic diploma course for their career advancement. Will the Minister inform the House whether there are plans on this?

(2) Revision of salary with better job prospects. Every year, more than 10% of our nurses resign to join the private hospitals and clinics. To stem the flow of resignations, the Ministry should look into the problems of the nurses. Though money is not the only factor, I believe that a better salary scale with better job prospects would be able to attract more people to join the nursing service and at the same time help to reduce the number of resignations. In this respect, I strongly feel that the Ministry should set up a Manpower Division to look into the shortage problem.

Sir, as with any career, job satisfaction and monetary rewards are very important. There must be incentives for nurses who are hardworking to be rewarded. We must give them overtime allowances, night shift allowances or any other forms of recognition for the hardworking and dedicated nurses. More importantly, there must be job satisfaction and avenues for their work to be appreciated and respected by the general public. Perhaps the Ministry should consider coming up with plans to bring public awareness to the rewards and satisfaction of a nursing career, with more opportunities for further training and promotions.

With our aim to be the centre of medical excellence, the challenge for the Ministry is not only to acquire all the latest medical technology, medical equipment and the best doctors, but also to be able to produce friendly, dedicated and compassionate nurses. For the nurses are the ones who are in constant contact with the patients and they are the ones who spend the most time with the patients and leave lasting impressions on them. The Ministry must therefore be able to come up with plans to attract not only good people to join the nursing profession but at the same time be able to retain the services of the trained and experienced ones.

Mr Lau Ping Sum (Ang Mo Kio GRC): Sir, today there is a mistaken belief on the part of some Singaporeans that Class C patients are not entitled to specialist treatment even if their conditions require it. This misconception could have arisen from the fact that only Class A and B1 patients could choose particular consultants and that these specialists get to retain a portion of the fees paid by the patients. I would like to ask the Minister whether there are plans to fine tune and perhaps modify the system to remove any inherent bias, whether real or perceived, in favour of the more well-to-do users of the health care service.

Sir, in our drive towards a medical centre of excellence, it is important that the number of specialists providing support services is adequate. At present, apparently, there are significant shortfalls, for example, in the area of pathology, radiology and health therapy. I was surprised to read in the main report of the Review Committee on National Health Policies that even Hong Kong has a much higher health therapist to population ratio than Singapore. Hong Kong has a ratio of 100 physiotherapists and 65 occupational therapists per million population as against Singapore's corresponding ratio of only 20 physiotherapists and 8 occupational therapists per million population.

Sir, in this day and age, it is important that we continue to explore different means of addressing this problem of shortfalls in these significant disciplines. We also read that the Ministry plans to set up a local School of Health Sciences in the fourth polytechnic. In addition, I think it would be necessary for the Ministry to ascertain the reasons for the small number of Singaporeans who have decided to take up a career in these disciplines. The terms and conditions of service, the training opportunities and career development should be made more attractive to ensure that the targets of 200 physiotherapists and 150 occupational therapists by year 2000 will be met.

Sir, may I move on to the next topic on Psychiatrists?

The Chairman: I should think so. There is no one else after you.

Mr Lau Ping Sum: Thank you. Sir, in an increasingly competitive society, certain behaviour of a small number of Singaporeans gives cause for concern, for example, the excessive aggression of some drivers who resort to physical violence over minor traffic accidents. And there are cases of press reports of child abuse or maid abuse. In fact, this topic was also brought up in the meeting at the ASEAN Inter-Parliamentary Organisation (AIPO) Conference last year where our friends from some ASEAN countries referred to such press reports. We know that such cases are few and far between and yet the fact that these problems are mentioned is cause for concern.

In our pursuit of material success, sometimes we may forget that cooperation with and consideration for other people could well be more important for collective well-being than individual flair and flamboyance.

From our discussions with the Resource Panel for GPC (Health), it seems that there is a shortage of psychiatrists in both the public and private sectors. I would like to know if the Ministry has plans to increase the number of psychiatrists and psychologists, and what plans there are to improve the career development and technical expertise of the existing staff. I believe this is an important area, and I wish to seek the Minister's views on how to safeguard the mental health of our population.

Mr Yeo Cheow Tong: Sir, many of the MPs have asked about the consultancy fee scheme, so I will answer that now.

Sir, let me clarify that when the scheme was implemented, there were safeguards because the specialists were only allowed to spend four sessions or four half-days out of the five-and-a-half days that they have on looking after private patients, ie, patients in A or B1 class wards. We have been monitoring and in actual fact the vast majority of the doctors do comply with this guideline. But it is understandable that from the point of view of the public, the risk is high, that some doctors may be motivated by the ability to earn more money and therefore be discouraged against looking after them.

Sir, the Ministry has been looking into this problem and we will be implementing a scheme within the next three to six months, whereby the specialists will earn the same amount for a particular service, whether he provides a service to a private patient or to a subsidised patient. So this way, there should be no incentive or disincentive for the specialists to look after one patient or the other. It is all neutral. We will be implementing that in the next three to six months.

Sir, Mr Yeo Toon Chia has asked whether it is true that because of all these operational systems, the subsidised patients are actually getting poor services. He has mentioned about waiting time. Let me assure him that in terms of medical quality, there really is not any difference. There is difference, yes, but in the level of comfort in the wards. Class A and B1 wards are more comfortable because they are air-conditioned. B2 and C wards are not air-conditioned. You would have to depend on the fans and natural ventilation. 2.00 pm

Sir, in terms of waiting time, we have done surveys. We do surveys regularly. And our surveys show that the waiting time in the Specialist Outpatient Clinics is actually shorter for subsidised patients. The median waiting time for subsidised patients is 29 minutes, shorter than even if you go to a GP clinic. The median time for the private patients in A and B1 is 40 minutes. You may ask, why is that so? The reason is that for the private patients, they specify a particular doctor. Quite often, when the doctor is away because of some emergency case in the ward, the patients then have to wait until he comes back. Whereas for the subsidised patients, because they are seen by a team of doctors, if any particular member of the team is away, another member takes over, so, therefore, there is no delay in his appointment.

In terms of elective surgery, ie, patients who have some problems and require to be operated on but is not an emergency case, he can, therefore, choose his time. For such elective surgery cases, the waiting time for a subsidised patient is eight days and the waiting time for a private patient in A and B1 wards is seven days. There is not much difference. Of course, whether you are a subsidised patient or a private patient, if it is an emergency case, all patients are operated on immediately, there is no waiting time at all.

Sir, the fear of the subsidised patients that they are only seen by non-specialists is not true. This is because all patients are managed by a team of doctors, comprising specialists as well as non-specialists, and in charge of the team is a senior specialist. Upon admission, all patients are clerked, that means their details are recorded by either a medical officer or a houseman and, subsequently, he is then reviewed by a Registrar or a Senior Registrar; these are doctors with higher degrees and they are specialists. After that, the senior specialist in charge of the team will then review each case within 24 hours. For a subsidised patient, he actually goes through three levels of consultation and examination by the doctors. The only difference between the subsidised patient and the private patient, as I mentioned just now, is that the private patient can choose the particular specialist.

Sir, in reply to what Mr Yeo has said about subsidised patients being encouraged to go to the A and B1 wards, we have been doing surveys for the past few years and our surveys show that for the first few months of this year, only 3.3% of the patients who went to A and B1 wards told us that they were influenced by doctors and nurses. In comparison with last year, our surveys show that 7.5% of A and B1 patients were being influenced. When we asked them what they meant by "influenced", the answer was that they asked the nurse or the doctor what was the difference and the doctor explained to them that the ward was better, airconditioned and so on. Based on what they were told, they then opted to go to the higher class wards, and not because the doctors told them, "If you don't go to the A or B1, I won't look after you." That is the result of our survey.

Sir, I would like to assure the House that subsidised patients do get very good medical treatment in our hospitals.

Dr Aline Wong: I will reply briefly to the questions about the shortage of health care professionals raised by Mr Loh Meng See, Mr Choo Wee Khiang and Mr Yeo Toon Chia, as well as Mr Lau Ping Sum. Let me assure Mr Loh Meng See that by encouraging the private sector to take up a larger share in the provision of health care services, the Ministry will, by no means, be relinquishing its responsibility the training of health care specialists. In fact, the training of specialists is still within the domain of the Ministry of Health. We coordinate and we keep track of what are the areas of shortage, we create traineeship posts, we select the candidates and we post them to the various hospitals. So we are not relinquishing any of these responsibilities at all.

As for the shortage of nurses, I am happy to inform the House that, in fact, the situation is much better than a few years ago, especially since our restructured hospitals have been given the flexibility to recruit their own nurses. The situation will be further improved, as we will meet the requirements for nursing manpower once the Nanyang Polytechnic produces its first batches of graduates. In fact, the response received, in terms of applications, has been quite overwhelming. I am pleasantly surprised that for 260 places for 'O' level graduates, we have received 313 applicants. We still have to select the 'A' level graduates and there will be 90 places for them. Allowing for some attrition, the overall intake would be about 320 this year and, next year, we aim to have an intake of 400. We have also been doing a lot to encourage school-leavers to take up nursing as a career, eg, by organising exhibitions, career talks and so on. We are continuously negotiating with the Public Services Division for their salary reviews.

As for Mr Choo's concern about the quality of our nursing training, I can also assure him that the School of Health Sciences at the fourth Polytechnic is teaming up with the Cumberland College of Nursing of Sydney University, which is one of the oldest established university in Australia and which has been accredited with WHO commendations. Whether there would be a component on communications skills in the curriculum, I have to check. If we are going to link up with the Cumberland College, it will definitely be up to international standards.

As to his suggestion for geriatric training for nurses, this has been done definitely. Last year, when I was the guest of honour at the Nurses' Graduation Day, I congratulated a batch of nurses who had just gone through their geriatric nursing. We will continue to do so and we will take care of this kind of concern.

On therapists, yes, we are short of them. We are not up to the standard that Hong Kong has and that is why we are beginning to have local training for therapists, including physiotherapists and occupational therapists at the fourth Polytechnic. Our annual intake is targeted to be 30 per annum and, again, with future batches of graduates, we will be able to meet our local needs.

As far as psychiatrists are concerned, we have been giving postgraduate degrees in psychiatry ever since 1985. We are working together with the School of Postgraduate Medical Studies of NUS and ever since then the average number of psychiatrists trained or taken in every year is about five. In fact, the number of psychiatrists in our health services has been increasing since 1980. In 1980, there were only a total of 22 psychiatrists, but now there are 60 already. So there has been a tremendous increase, to the tune of a three-fold increase. In the public sector, we have 45 psychiatrists compared to 17 in 1980.

On psychologists, yes, we also have some vacancies. But there are already nine scholars studying overseas and when they return between 1992 and 1994 we will be able to fill our vacancies. With this kind of planning and monitoring, I can assure Members of the House that the shortage of our health care professionals would be satisfactorily met and, thereby, we can maintain the quality of our care to the patients.

Dr Tan Cheng Bock: Sir, can I ask the Minister for a clarification?

The Chairman: All right.

Dr Tan Cheng Bock: The Minister mentioned that there were some patients who, for some reasons, had been admitted to Class A by the influence of the doctors. What happens if these patients would like to downgrade to Class C? Would they still have to pay the Class A rates, or do they now have to pay the Class C rates?

Mr Yeo Cheow Tong: Sir, before I answer, let me also explain that there are certain safeguards. When a patient chooses to go to A or B1 class wards, all our hospitals now have a counselling service where they explain to them the expected bill size. So although the ward charges may be, say, $200, the bill size may actually come up to $400 a day. First of all, before they even bring them to the wards, they will explain to them the expected bill size for their hospitalisation. So when the patient finally goes to, say, A class ward, he knows what is his likely bill size. With that mechanism, very few of the patients now ask to be downgraded. But if they want to go back to Class C, he is allowed to do so.

Dr Tan Cheng Bock: What about the charges?

Mr Yeo Cheow Tong: The charges for Class C service that they receive will start from the day they go back to Class C.

Mr Choo Wee Khiang: Clarification, Sir. The Minister has not replied to my point on whether the Ministry will consider employing part-time nurses and para-medical staff and also whether he will provide ample retraining opportunities to the older staff.

Dr Aline Wong: The answer is, yes. The restructured hospitals have actually been trying out scheduling of the shift work of nurses, giving out overtime allowances and also providing further training to nurses. We have been doing that.

Mr Loh Meng See: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (3). We have 23 minutes. Mr Leong.

Mr Leong Horn Kee (Thomson GRC): Sir, I beg to move,

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

Sir, a community hospital fills the gap between the private nursing homes and the general hospitals. At the top end of the scale, we have the expensive private hospitals and the general hospitals which offer specialised health care. They are very well-equipped with sophisticated equipment and have renowned specialists and surgeons to attend to their patients. Therefore, their charges can be high. At the other end of the scale, we have the private nursing homes or private clinics which are generally very small and provide very limited medical facilities.

We read recently about Singapore's first 60-bed St Andrew's Community Hospital. The Government is planning to build a 200-bed Ang Mo Kio Community Hospital which will be ready by mid-1992 and I understand that one more is being planned at Simei.

The Health Review Committee chaired by Dr Aline Wong, Minister of State for Health, has recommended that the Government build more community hospitals and encourage private groups and civic bodies to manage them.

Sir, I fully support the recommendation that more community hospitals be built. The community hospitals can be affiliated to the large general hospitals. The general hospitals can concentrate on major cases while minor cases can be dealt with at the community hospital level. It will be more cost effective as community hospitals can be operated at a lower operating base. I see these hospitals as fulfilling two main objectives. One, it will help to lower hospitalisation cost for the community, and two, it will cater for the increasing hospitalisation needs of our aging population.

In view of the above objectives, I would like to ask the Minister the following questions. First, what are the Ministry's plans to expand the number of community hospitals? Second, what are the capital grants or operating grants that will be offered to these community hospitals, especially for those that are privately operated, to ensure that the hospital charges are affordable? I presume that the Minister plans to have only Class B2 and Class C beds in these hospitals. Third, what criteria will be used to select the operators for these community hospitals, if they are not run by the Government? I understand that the Government may wish to call for tenderers to run these hospitals. Here, I would like to caution that price should not the sole criterion in the selection of the private operators. The community hospitals should not be profit-oriented. Other criteria such as the background, experience and social objectives of these private operators should also be considered.

Dr Michael Lim Chun Leng: Sir, can I take this cut and my next one together?

The Chairman: Yes.

Dr Michael Lim Chun Leng: Sir, I want to declare that I am a medical doctor working in the National University Hospital.

Sir, restructured hospitals are often misconstrued as costly. In reality, the quality of medical care provided in the subsidised wards is of good quality and at an affordable cost.

We must, however, be constantly vigilant and curb the escalating cost in restructured hospitals. We must decrease the pressure for beds, optimise utilisation of manpower, increase productivity and efficiency, and reduce operating deficits. The end result will be more cost effective health care. Towards achieving this end, I propose the following three measures: 2.15 pm

(1) Development and expansion of ambulatory day services

The Ministry must encourage the development of ambulatory procedures in addition to the current day care procedures. With the development and improvement of technology, procedures such as laparascopic surgery, endoscopic procedures and angiograms may perhaps be performed on an ambulatory day care basis on certain patients.

I would like to ask the Minister if these ambulatory procedures were found to be safe on a routine basis, either presently or in the near future, will he allow deduction of Medisave for these procedures? This will encourage patients to opt for such ambulatory services and it will also result in a decrease in bed requirement and lower cost for patients.

(2) Optimise utilisation of ICU beds

We must control the number of ICU beds available in each hospital. The cost to the patient and to the hospital is enormous. Unfortunately, relatives often put a tremendous amount of social pressure on doctors despite being told of the poor prognosis and doctors have to do all they can for the patients. This has resulted in patients with severe stroke, terminally ill patients with end stage multiple organ failure and patients who have suffered severe irreversible anoxic brain damage being admitted into ICU. The usual course for such patients is to have their life prolonged in a comatose state only to reach their expected outcome of death in weeks and, in certain cases, months. When the bill comes, they will seek assistance from the MP. Sir, this scenario is often repeated in our hospitals.

Hospitals should help to bear the social pressure and have strict guidelines for admission into ICU so that doctors can exercise good clinical judgment without having to write long explanation letters for not bowing to social pressure. If the beds are limited to the projected patient load, doctors will have to exercise careful clinical judgment and prioritise the needs. We must guard against providing more ICU beds without good medical grounds. Otherwise, ICU admissions will not only be dictated by medical indications but also social indications.

(3) Accountability of cost centres

A percentage of the surplus made by departments in hospitals must be ploughed back to the department. Departments must then be made to manage their cost centres. This will encourage productivity and reduce unnecessary demand for more staff and equipment. Departments should be made to pay for clinic time and operating theatre time to ensure that those limited resources are utilised efficiently. Subsidised patients who are managed will be offset against the cost imposed by the hospital for utilising the facilities. In this way, departments that want to acquire more staff, more clinic time, more operating theatre time and more equipment must be able to cost for them and show that they can balance accounts. This will definitely result in more cost effective running of the hospital. In certain situations where large capital expenditure is required for common user equipment, this can be costed differently.

Sir, if restructured hospitals were to be the main provider of hospital services, the Ministry must constantly strive to make our restructured hospitals more cost-effective. With these proposals, I hope that I would have contributed to the Ministry's effort. I will appreciate the Minister's views in these areas.

On research, the main Report of the Review Committee stated that the Ministry will spearhead medical research. To do good medical research, we need large financial resources, full-time research scientists and many research laboratories. I want to ask the Minister: (1) as the sum allocated is not large, how will funding be done? Will there be private funding? (2) How does the Ministry ensure that the emphasis on research does not translate into increased cost for patients?

Sir, I would like the Minister's views on these two points.

Dr Wan Soon Bee (Brickworks GRC): Mr Speaker, Sir, I also would like to fully support the decision of the Ministry of Health to set up community hospitals around Singapore in the next few years. There is definitely a need for community hospitals that complement existing hospitals by catering to the needs of patients with minor ailments, those who are convalescing or the aged sick. There are those patients who still need some medical supervision and care but who do not require the specialised care provided by the existing hospitals. But I hope community hospitals would really present a much cheaper alternative to existing hospitals. For many, it is often too expensive to remain in hospital while recuperating from an illness. On the other hand, it may not be wise to send them home especially since they may not have anyone to take care of them. Community hospitals are the ideal solution in that they will provide basic medical care at a much lower cost. This way, patients can convalesce under the care of properly trained staff without constantly worrying about the hole that is being made in their pockets. Families of patients can also feel secure in the knowledge that their loved ones are receiving the care that they require.

I should like to point out that the aim of the community hospitals is to provide good, though less sophisticated, hospital care at affordable prices. Therefore, I hope that such community hospitals will be built with the minimum of frills to ensure that costs are kept to a minimum. We must make community hospitals within the reach of all Singaporeans, even for those who require long periods of hospitalisation.

Finally, I would like to ask the Minister when will the Ang Mo Kio Community Hospital be officially opened and how many such hospitals are planned and what time-frame is envisaged for their completion. I urge the Minister to proceed with speed in building these community hospitals as I am convinced that they will provide a valuable service to the country.

Mr Low Thia Khiang (Hougang): ( In Mandarin): Sir, the original Government hospitals are now known as the Singapore General Hospital Pte Ltd, Tan Tock Seng Hospital Pte Ltd and Toa Payoh Hospital Pte Ltd. We all know that private limited companies operate on a fixed amount of capital and strive to make the maximum amount of profit from it, yet they are limited in liability. Even if they run into a loss, their liability is only limited to their registered capital. So when we call our hospitals "private limited", does it mean that the private limited hospitals will henceforth be responsible for their own profit or loss, and relieve the Government of its burden on medical costs? Does it also mean that the hospitals will have a free hand in fixing their charges in order to make the maximum profit?

On the other hand, will the Government reduce its subsidy, causing the hospitals to increase their charges, thereby transferring the burden of increased operational cost of the hospital to the people?

Moreover, once these hospitals are privatised, and if they were to increase their charges resulting in an increase in medical cost, then how is the Government going to curb this increase? The Government is presently subsidising 80% of the hospital bills for C class beds, and the patients are paying 20%. Would it come a time when the cost is so expensive that Singaporeans cannot even afford the 20% of the medical charges that they have to pay? So if the Government hospitals are still being completely controlled by the Government after privatization, then why are the hospitals known as private limited companies? By so doing, is the Government trying to confuse the public?

Sir, to provide medical care to the people is a duty which the Government should never shirk. The Government should ensure that medical charges are affordable by all the people in Singapore. For those who cannot afford, their medical charges should be borne by the Government. I think nobody would want to deliberately get sick and get himself admitted to hospital just to be subsidized by the Government. By naming the Government hospitals "Hospitals Private Limited", it loses the spirit of "succouring the poor and saving the distressed" which a hospital should possess. Is this yet another ill-trend of a modern prosperous society that the Government is taking the lead in promoting?

The Chairman: Mr Yeo, you have until 2.35 pm.

Mr Yeo Cheow Tong: Sir, in that case, let me answer Mr Low Thia Khiang.

Sir, I would advise Mr Low to please go to the Library and refer to the Hansard. We have debated many, many times here on why we restructured the hospitals. But for his benefit, I will just give him a very quick summary. We have restructured the hospitals, not privatised them. We have restructured them to enable the hospitals to operate more cost effectively, more efficiently. For example, as Government hospitals, all their procedures, all changes, have to be approved by the Government. As restructured hospitals, they can innovate, they can improve, they can, for example, recruit different categories of people. Instead of using nurses, they can recruit clerks and reduce costs. So restructuring has helped the hospitals become more efficient, more productive.

Mr Low Thia Khiang: Sir, can I clarify with the Minister?

The Chairman: Do you want to give way, Mr Yeo?

Mr Yeo Cheow Tong: Yes.

Mr Low Thia Khiang: The fact is that the hospitals are called "Private Limited". I wish to draw the Minister's attention to how Singaporeans describe the state of health care here as one that is haw see, mor pan, which means that one can die but cannot afford to be sick. Will the Minister assure this House that the Government will pay the medical bills of Singaporeans who cannot afford and who are admitted to C class wards?

Mr Yeo Cheow Tong: Sir, obviously, he has not been listening to what we have been saying the whole day, ie, for Class C patients, we will subsidise 80%. And for those who cannot even afford to pay the remaining 20%, we have Medifund to help them. Medifund would either help these patients to pay for the remaining part in full or partially. So the safety net is there. I have been stressing that many times just now.

Sir, on his statement that Singaporeans cannot afford to get sick but can afford to die, I can assure him that if that is the case, our life span in Singapore would not be 75 years today. Singaporeans today are living to a ripe old age because, firstly, the environmental health conditions are very good. So they stay healthy. But we can help them stay healthier by adopting healthy lifestyles. Secondly, when they fall sick, we have a very effective health care system that helps them to recover and at a cost that they can afford. So everybody who is sick can get a cure and that is why they all live to a ripe old age. That is why today we have a good chance of living to the age of 75 which puts us amongst the developed countries.

Mr Low Thia Khiang: Mr Speaker, Sir, I take that as an assurance.

Mr Yeo Cheow Tong: Sir, the other question he asked is: why is it a private company? This is a legal term. The hospital has to be out of the civil service, and the only way to get the hospital out of the civil service is to form it as a private company, but a company which is owned by the Government and also supervised and monitored by the Ministry of Health. So we coordinate. We also monitor them to make sure that they are cost effective. Because, as he has rightly pointed out, if they are not effective, who pays? Yes, patients pay 20%, but remember, Government has to absorb 80% of the cost of inefficiency. The Government does not want to do that. So we will make sure that our restructured hospitals remain efficient, fees are affordable to both the patients as well as to the Government in terms of subsidies and ultimately to the people. The subsidies are paid through the Government, but actually these are funds which we collect from taxpayers. So it is in everybody's interest that we continue to make sure that they are cost-effective and efficient.

Mr Low Thia Khiang rose -

The Chairman: Mr Low, I suggest that you allow the Minister to finish.

Mr Yeo Cheow Tong: Sir, Dr Michael Lim has raised a few points. Firstly, ambulatory care. I agree with him that we have to strongly promote ambulatory care, because it is a very cost-effective way to reduce hospital costs. And because of that, many of our hospitals now have a significant percentage of their operations done on an ambulatory basis. For example, Singapore General Hospital, in 1987, only 17% of the operations were done on an ambulatory basis. In 1990, the percentage had gone up to 33%. Toa Payoh Hospital, before restructuring, in 1987, only 6% ambulatory surgery. In 1990, after restructuring, that number went up to 24%. So we will look for all ways to do operations on a day surgery basis rather than hospitalise them. 2.30 pm

He also asked whether Medisave would be allowed. Sir, Medisave is allowed for most of the day surgeries and most of the day procedures. We will be prepared to consider any new procedures which have been found to be able to be carried out on a day basis. If those are valid, we will be prepared to allow Medisave to be used.

Optimise ICU, yes, I agree with him. ICUs are very, very expensive. We need to ensure that strict guidelines which exist are being complied with. Because we have good guidelines, the number of ICU beds in our hospitals has been maintained at only 3% of total hospital beds. In comparison, in the developed countries, most hospitals have between 5-10% of their beds as ICU beds. So we are keeping a tight control on those beds.

Cost centre accountability, I agree with him again, it is a good idea. Restructuring has allowed the hospitals to introduce cost centre accounting and we would definitely try to stretch the advantages and benefits under this system to the maximum.

Dr Tan Cheng Bock: Sir, can I beg your indulgence to be more lenient on the timing and let the Minister explain on this issue of community hospitals? I think it is very important for Singaporeans.

The Chairman: I did not stop the Minister.

Dr Aline Wong: Sir, the first community hospital at Ang Mo Kio Avenue 9 would be ready in the middle of this year, and it is expected to be operational by the end of the year. It will have a capacity of 203 beds with subsidised beds comprising more than 75%.

As Members of the House have expressed, the community hospital is meant to be an intermediate level hospital, providing a cheaper alternative to patients who do not require the highly specialised care which is given at the acute hospitals.

We would like the voluntary welfare organisations or the private sector to run the hospital. This is because they can promote a greater participation of the community in supporting the services of the hospital. As the name implies, a community hospital must have the support of the community. General practitioners are also encouraged to utilise the services for their own patients. They can visit the patients there, they can do their investigations and treatment there. We would like to see community and voluntary groups come forward to assist in giving help, care and companionship to the patients.

The Ministry will provide the necessary capital as well as assistance with the operating expenditure. The Ministry of Health will regulate the charges for subsidised patients and will ensure that they are lower than those at the acute hospitals. We have invited proposals from the private sector and we are still examining them because it is a very complicated matter. But I can assure Mr Leong that the criteria considered will include, not just capital investment or capability, but also experience in running this kind of hospital and also the subventions they require from the Government while remaining within the charges that we set for them. So with this, I can assure the House that the community hospital will meet the social objectives as well as the medical objectives that we have set them.

As for future community hospitals, a reserved site, next to the General Hospital to be built in Simei, has been made. But we would like to monitor the response to the Ang Mo Kio Community Hospital before deciding to build more community hospitals. Meanwhile, voluntary organisations have been receiving assistance from us, such as St. Andrew's Community Hospital, to set up their own community hospitals, perhaps on a smaller scale. We have given them the necessary capital and operating financial assistance.

Dr Michael Lim raised a question about research. Yes, we have a department of clinical research within the MOH, which has an operating grant of about a million dollars a year. But actually we spend more on research each year than this because we receive donations from charitable and philanthropical organisations and grateful patients. For the year 1990/91, a total of $30 million was donated from various sources. We have used them mainly on clinical research. I can assure him that the kind of research we have done in the past as well as in the future will focus on the diseases that are the leading causes of ill health in Singapore. They will benefit the patients directly. We will concentrate on clinical research, epidemiological research as well as research on the needs of elderly patients, in view of our ageing population. We will also encourage research to study the outcome and effectiveness of different techniques and procedures of treatment so as to arrive at the most cost-effective method in order to contain our health care cost.

As to what kind of research the University is carrying out with NUH, perhaps the Member is in a better position to answer this.

Mr Leong Horn Kee: Sir, can I just make two quick remarks?

The Chairman: We are running out of time. A quick one.

Mr Leong Horn Kee: Sir, first, is the comment made by Mr Low Thia Khiang on why the Singapore General Hospital is called Singapore General Hospital (Private) Ltd. As the Minister has said, it is actually a technical matter, because for a company that has less than 50 shareholders, it has to be called a private limited company. Whereas, if it has more than 50 shareholders, then it will be just a limited company and the word "private" is dropped from the name. So there is no distinction as to why it should be called "private" or otherwise by the Government, except for technical reasons.

Secondly, I would like to ask the Minister of State for Health, Dr Aline Wong, about the community hospital in Ang Mo Kio. Is it the intention of the Government to actually introduce also A class wards in this hospital? Because that may seem to be not in line with the concept of a community hospital, which is low cost base.

Dr Aline Wong: Yes, we have stated in the House a couple of years back already that the community hospital at Ang Mo Kio will have a whole range of wards, including A and B1 class. But even for those A and B1 class, the charges would be lower than the private wards in the acute hospitals. As I have just stated, the proportion of subsidised beds will be 75%.

Mr Leong Horn Kee: I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: It is time for 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 3.00 o'clock.

Sitting accordingly suspended at 2.39 pm until 3.00 pm Sitting resumed at 3.00 pm

[Mr Speaker in the Chair]

Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

Head P (cont.) --

The Chairman: Amendment No. (4). Dr Lim.

Dr Michael Lim Chun Leng: Sir, as I understand that the matter at hand has been resolved, I will not move this amendment.

The Chairman: Amendment No. (5).

Dr Michael Lim Chun Leng: Sir, I beg to move,

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

Hospitals are being redeveloped. We should learn from the lessons of existing hospitals. We must cut down on unnecessary fixtures and minimise staff requirements. We must differentiate what is needed from what is good to have. We must veer away from conventional thinking. I will cover five areas briefly.

(1) Ward categorisation. In building new hospitals, we should consider dividing the hospitals into three main wings housing acute care, elective and convalescence wards.

Patients with acute illness or acute exacerbation of chronic illness which requires substantial medical and nursing care should be managed in acute care wards which have more wall fittings for suction, oxygen delivery and power points for auxiliary medical devices, and these wards will also have a higher staff to patient ratio.

Patients who are admitted for day care procedures, short stay elective surgery and diagnostic or therapeutic procedures, such as tissue biopsies, angiograms, endoscopic procedures should be admitted to elective wards which should be open concept wards. The staffing situation and physical installations in such wards should be minimal.

Convalescent patients such as those recuperating from uncomplicated surgery, undergoing rehabilitation for mild stroke or undergoing stabilisation for diabetic control do not require much medical or nursing care. The cost of building, maintaining and staffing such a ward will be intermediate between that of the acute care and elective wards.

(2) Beds per cubicle. In deciding on the number of beds per ward cubicle, we must also consider the practical staffing situation. Often, one nurse may be assigned to each cubicle. Hence, the less beds you have per cubicle, the more nurses you will require. Hence, in class B2 ward, you may have a six-bed cubicle in an acute ward, whereas in an elective ward, perhaps a 10 to 12-bed semi-enclosed cubicle will suffice.

(3) Outpatient clinics. We should expand the outpatient specialist clinics in the hospitals to allow walk-in referrals from the Emergency Department. Hence, if the Emergency Department doctor is uncertain, he can refer the patient directly to the specialist clinic for an assessment, instead of admitting the patient. This will reduce the number of admissions to the hospitals where the indication for admission is uncertain and eventually also reduce the pressure for beds.

(4) Expensive new equipment. In redeveloping hospitals, one must temper the zeal to acquire all the latest available expensive new equipment with the reality of what is required for the hospital to function as a secondary or tertiary hospital. For example, if a new MRI machine is acquired, there will be a tendency to use this instead of a CT scan or other imaging modalities. Worse still, a patient with stroke may end up with both MRI, which is magnetic resonance imaging, and CT scan, which is computerised tomographic scan. Singapore is a small country and we already have three MRI machines. In the end, my fear is that more patients may be put through the test on the basis that it is good to know, rather than on the basis that it will affect the eventual outcome of the patient. The appetite for new technology is insatiable and therefore it is necessary that the Ministry institutes safeguards to ensure that there is optimal utilisation of expensive new equipment.

(5) National Medical Centres. I am concerned about the development of National Medical Centres. In Singapore, the pool of specialists within each field is limited. We should be careful about spending large sums of money so that doctors can practise in a large building designated as a National Medical Centre and yet continue to practise in their own hospitals. This does not result in optimal utilisation of time and resources. Furthermore, many patients have multiple medical problems which often require a multi-disciplinary approach. It may be better to build on existing infrastructure within a general hospital which is designated to develop a chosen speciality. This will also prevent duplication of expensive medical equipment.

Sir, the Ministry has always been wise and prudent in health expenditure. In spending large sums of money in the redevelopment of hospitals, we must not only exercise prudence but we must also explore avenues to restrain cost escalation. What we need are not the frills of classy lobbies or the thrills of latest medical technology, but really what we need is to cure the ills with affordable pills.

With this, I seek the Minister's comments on these suggestions and concerns.

Mr Yeo Cheow Tong: Sir, I totally agree with Dr Michael Lim that we have to be very prudent and careful when planning new hospitals or new centres, and we have to learn from existing hospitals.

Sir, all the things that he has talked about are generally acceptable, and we definitely are already paying attention to those details. He has not been involved in hospital planning. So I will explain to him that in planning all the new hospitals, we rely on existing specialists and doctors to be in the planning team as well as bring in consultants from abroad to ensure that our plans are correct, and they are not excessive.

In terms of beds per cubicle, in our subsidised wards we do have a different number of beds in each cubicle. As to whether it is mandatory that there should be only one nurse per cubicle, the answer is no. If the cubicle has only two beds, I would have expected the hospitals to ensure that the nurse looks after three cubicles, and not just say that each nurse is only in charge of one cubicle, and therefore it is a fixed ratio. It cannot be.

Expensive equipment - yes, we need to avoid unnecessary duplication. In fact, like in the case of the MRI machine, in 1986 we were under strong pressures from NUH and SGH to purchase MRIs for them. We refused because we were not convinced that the time was right and that the demand and the requirement for MRI was justified. So we sat on the requests until 1991 before NUH was allowed to buy one.

Sir, I can assure the Member that we are concerned about unnecessary duplication. My Ministry, endorsed by the Review Committee, would be responsible for approving the major purchases of equipment in Government and Government-owned hospitals to ensure that there is no what you call "arms race", which was observed in the US, where every hospital tried to outdo the other in the purchase of expensive equipment.

Medical centres - because we are small, it is important that we do not duplicate specialties in all hospitals, especially in cases where the number of specialists in the country is limited, for example, in skin. It is actually more cost-effective for us to group them into one centre, so that the required equipment can be based in one location and not duplicated in all the other locations.

Sir, we would definitely give consideration to all the relevant factors before deciding whether or not a medical centre is required.

Dr Michael Lim Chun Leng: Sir, I thank the Minister for his reply and beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment (6). Mr Das.

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

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

Sir, I agree with the Government's philosophy that there is need for preventive measures to help one remain healthy. And what better way to do this than to start at the school level.

Sir, I would like to point out to this House that there are far too few doctors looking after the School Health Service. I am informed that there are four doctors at the clinics and 11 doctors in the field taking care of 450,000 pupils in our 350 primary, secondary, pre-university and junior colleges. These doctors are ably assisted by 30 staff nurses and 18 assistant nurses.

Only primary one and secondary four students are screened by doctors. Screening at primary six is done by nurses. Is this because of shortage of doctors? And what about the quality of screening for these children at primary six? Is the Ministry satisfied with this level of screening? Are other programmes being sacrificed because of lack of doctors?

Sir, I would urge the Minister to use his good offices to persuade the Finance Minister not to apply the zero-growth in the case of School Health Service.

Dr Aline Wong: Sir, I am glad that Mr Chandra Das supports the Ministry's philosophy that prevention is better than cure and he also supports the objectives of our School Health Service.

With regard to the number of doctors in the School Health Service, actually it has increased from 10 in 1988 to 14 this year, and that is in spite of our zero-growth manpower policy.

On the number of nurses in the School Health Service, I think he has got the figure wrong. In fact, we have now 104 nurses in the whole School Health Service. The entire staff complement is 186. So it is by no means a small staff complement. Our expenditure has increased from $5.4 million in 1988 to $7.3 million.

Whether medical screening should be done by doctors all the time, it is a matter of expert opinion and also a matter of the end result, the outcome. It is true that medical screening carried out in primary one and secondary four is done by doctors, while those at primary six is done by nurses. But our nurses are trained. Besides, our children also get to have visual screening every year. They also get spinal screening intermittently. So it is not just the medical screening at primary one, primary six and secondary four.

Our children are actually very healthy, and they are among the healthiest age group in our population. If by the time they enter primary school, they get any severe medical condition, they would have been picked up by our medical services before they enter school. And even during the school years, those who require specialist's attention would have been sent to the Specialist Outpatient Clinic in the Institute of Health.

Attendance figures in our polyclinics actually show that the proportion of school children seeking medical treatment at polyclinics is much lower than the other age groups. So all indications are that the present kind of medical screening services we give in our schools is adequate. It is better to utilise our scarce services in other programmes. But of course I welcome his support for our programme to be receiving more funds from the Ministry of Finance. But please be rest assured, Sir, in the opinion of medical experts, our School Health Service is doing a good job.

Mr Chandra Das: Sir, since the Minister of State welcomes my suggestion, I think the Ministry should work harder to get more staff. On that note, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Dr Michael Lim Chun Leng: Sir, I beg to move,

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

Primary health care is currently considered a poor cousin to hospital services, but I believe that it is as important, if not more important, as secondary and tertiary health care. A good primary health care service will result in early detection of diseases and prevention of complications. In developing new polyclinics, we must not only continue to make it affordable but we must strive to improve the level of primary health care. I have certain proposals which I would like the Minister to consider. 3.15 pm

(1) Install X-ray facilities in all new polyclinics. The Ministry should consider installing X-ray facilities not only to improve the diagnostic capabilities but also by allowing general practitioners to use the X-ray facilities, the level of primary health care in that area will be enhanced. Furthermore, with a higher throughput, it will result in more cost-effective usage of the facility.

(2) Set up rehabilitation facilities at all polyclinics. This will allow patients with stroke, orthopaedic injuries and other physical disabilities to have easy access to such facilities. Otherwise, the physical disabilities alone will discourage them from travelling to the hospitals for rehabilitation. Early rehabilitation will allow the patient to integrate back into society and will relieve the social burden on family members.

(3) Medication. Patients seen at hospitals are discharged to polyclinics for follow-up when they are stable. However, in certain instances, these drugs are not available at the polyclinics; and there is no alternative drug within the same class of action available in the polyclinics. As a result, CSC card holders do not want to be discharged from specialist clinics, as they are unable to get the medication required.

I propose that the Ministry allow polyclinic doctors to make an inventory for non-standard drugs for CSC card holders who require medication currently not available in the polyclinic pharmacy. These requests should only be allowed if the patients are sent to the polyclinics from specialists in Government and restructured hospitals. This will make it unnecessary for such patients to be seen at the specialist clinic in hospitals just for the sake of being able to obtain the required medication.

(4) Quality of medical care. At this point, I would like to agree with Dr Tan Cheng Bock who said that there were certain problems about the primary health care system. One of the weaknesses, and a very important weakness, of our current system in the polyclinics is the lack of continuity of medical care. Patients with chronic medical conditions like diabetes mellitus are often attended to by different doctors at different visits. At each visit, the harassed doctor scours the medical notes and makes a hurried assessment as he has a large pool of patients waiting in line to see him. Fighting against the problems of unfamiliarity, limited time and a large patient turnover, he can only do his humanly best and would not be able to give optimal care. For the diabetic patient, he can only try to adjust the medication to control the blood sugar level; there is no time to look for eye complications, kidney complications, vascular complications and there is definitely no time to give proper counselling. How does the Ministry intend to improve the situation? I would like the Minister's views on these points?

Dr Aline Wong: Sir, all our large polyclinics have a laboratory on site. These laboratories are also open to the general practitioners. However, the general practitioners' utilisation of our polyclinics' laboratories has been poor, comprising less than 2% of the laboratory workload. This is because some private laboratories are providing a special service to the GPs, collecting specimens from them at no additional charge and so GPs find it not necessary to send the patients to the polyclinics' laboratories.

Currently, only one polyclinic at Tampines has an X-ray service which is also open to GPs but, again, its utilisation by GPs is very low, comprising less than 5% of the X-rays taken. Patients, CSC card holders or other people, who are discharged from Government or restructured hospitals can obtain non-standard drugs at the polyclinics if they are patients of the polyclinics. The idea is that they should be followed up in the polyclinics and if the use of non-standard drugs is warranted, then an application would be made for the drugs to be supplied at the polyclinics.

On the lack of continuous care, we have covered this subject quite well when I responded to Dr Tan Cheng Bock's proposal about the community health care system.

Dr Michael Lim Chun Leng: Sir, just one last point. The reason why laboratory facilities in polyclinics are not well-utilised is not just the convenience but the cost as well. In fact, it may be more costly to do a laboratory test in the polyclinic than at a private laboratory.

Dr Aline Wong: Is that so? I will look into it.

Dr Michael Lim Chun Leng: Sir, I thank the Minister for her reply and I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $640,521,120 for Head P ordered to stand part of the Main Estimates.

The sum of $299,441,300 for Head P ordered to stand part of the Development Estimates.

Head I -

The Chairman: Head I - Ministry of Communications, Amendment No. (1), Mr Heng. We have 23 minutes.

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

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

Sir, under this amendment, I have two cuts. May I speak on them at the same time?

The Chairman: No, please stick to the schedule.

Mr Heng Chiang Meng: Sir, from the feedback from residents and issues brought up by other MPs in this House, it is quite evident that there are many areas in Singapore that are not adequately served by the two bus companies. Each time this issue is brought up, we always get a stock reply - there are insufficient commuters and these routes are not profitable. Of course, these routes will not be profitable because if they are profitable, the bus companies, because of profit motive, will want to run these routes as soon as possible and not because of a public service. It is true that bus companies, both SBS and TIBS, do run some unprofitable routes as a public service. But the question is: are these routes sufficient? In this respect, I understand that the bus companies, being privately owned companies, need to balance between the need to be profitable and the need to run a public service.

Sir, the question is: are they fulfilling their public role to the best of their abilities? It is very difficult to know because when issues like these are brought up, the bus companies always show you certain figures and certain things that explain why these routes are not profitable based on some sample surveys that they have. They know the internal costing, but we do not, and it is difficult to question those figures. Therefore, I would like to look at the overall profitability of the bus companies. So if you look at such figures, they are not too bad. In fact, I would say they are very good in view of the safe business that they are in, which is relatively riskless, and also, a very much protected industry.

Sir, I would like to look at SBS, the major of the two bus services. Over the past three years from 1988 to 1990, the average return on assets was about 8.5%. This is a very good figure. The average return after tax on shareholders' equity was 14.5%. This is a better figure, especially given that it is in a protected industry. I will ask the Clerk of Parliament to distribute some charts. [Copies of tables distributed to hon. Members.]

Sir, you can see clearly from the charts that both SBS and TIBS have actually out-performed the stock market. Both charts have the words "Cross Rate", the top one for SBS, and the bottom one for TIBS. You will see that there is a gradual trend upwards. This means that basically their share prices have out-performed the stock market. The Singapore stock market investors are a shrewd lot of people and they know a good thing when they see one. They know the companies have been performing well.

Sir, my point is: are the bus companies making such good profits because they have smart businessmen, they have smart managers, or are they making these profits because of their special status of being monopolists in a protected industry? Their profits are, therefore, mainly due to profits of protection and profits of monopoly. Why do I say monopoly? Because both SBS and TIBS try to be complementary rather than competitive. We cannot really take the Scheme B buses as competitors because of their sizes. If you take the two bus companies together it is a monopolistic situation. So whatever the reasons for their profits, I think that with their special position and their profitability, the bus companies can be more generous with the unprofitable routes. I am not suggesting that we bankrupt them by insisting that they respond positively to all requests. But the point of contention is their profitability clearly shows that they can afford to run more unprofitable routes as a public service. And the Government being responsible for creating the current situation should be more vigorous in ensuring that the two bus companies fulfil these public service commitments.

Now, Sir, we have the MRT network. The network, as we know, is fixed, with fixed lines and fixed stations. Therefore, when we talk about MRT-bus service integration, we obviously mean that the buses must come to the trains, and not the trains to the buses; meaning that buses must be used to transport people to and fro the MRT stations. There has been some progress made in this area but, unfortunately, it is too slow and not sufficient. The bus companies appear to be dragging their feet. However, this is not surprising because if you look at the operations of the bus companies before the MRT came into operation, we will find that they provide both what is known in the business as the short feeder bus services as well as the long haul sector. In the long haul sector, the buses are in competition with the trains. Therefore, the better their feeder services to the MRT stations, the lesser the number of passengers will there be for their long haul sector. This means that in one area, if they are complementary and provide very good service, they suffer in the other area because it is competitive to the trains.

Sir, the Minister should quickly come up with an economic comprehensive integrated MRT-bus service network for all Singaporeans. In such a network, the bus companies must be made to fulfil their public duties. The protected status given to them demands such a role. Their profitability, due in no small part to such protection, makes it imperative that this role should be fulfilled as soon as possible.

Dr Wang Kai Yuen (Bukit Timah): Sir, with our naturally endowed deep water harbour and our geographic location straddling the main sea lanes between Asia and Europe, Singapore has grown to be an important sea port in this region.

On the contrary, Singapore does not have any inherent advantage to emerge as the air transport centre for this part of the world. Not too many years ago, other airports in the region were more prominent than we are. So as recent as the 1970s, when one travelled to the US, one had to fly first to Bangkok for transit. In other words, Bangkok was the regional hub for many airlines serving this region.

Despite the early start of other airports in this region, Singapore has emerged as the regional air transport centre, directly linked to 110 cities in 52 countries. Changi Airport has emerged as the transit hub for millions of transit passengers. The growth of our air cargo sector has also been just as impressive as that of the air passenger sector. This achievement is a testimony of the foresight of our air transport policy. This also demonstrates the value of a consistent air transport policy pursued with dogged determination over more than two decades.

Our success comes from pursuing the twin objectives. Firstly, freedom of the sky policy, and secondly, the development of a super airport. The Civil Aviation Authority of Singapore (CAAS) has been granting landing rights to foreign airlines liberally, including hubbing rights to foreign airlines without necessarily asking a reciprocal arrangement to SIA. I understand that in fact more foreign airlines operate into Singapore and out of Singapore than the countries Singapore Airlines and Tradewinds taken together serve. This is at variance with the practices of other countries.

I support this air transport policy. My only regret is that some countries, including those who preach free trade, do not always necessarily practise what they preach. In this respect, I recall the recent disputes with Indonesia and Canada. While the issue with Indonesia has been settled amicably, the dispute with Canada, a main supporter of free trade, regrettably remains an issue of contention. So I would like to urge the relevant Canadian authority to shed its protectionistic attitude and truly uphold the spirit of free market.

It goes without saying that the concurrent development of Changi Airport goes a long way into fulfilling the potential of our air transport policy. I am impressed that immediately following the commission of Terminal 2, Terminal 3 is on the drawing board. Furthermore, there is a plan to expand Changi to meet the needs of the 21st century. Land reclamation for the expansion has already been approved by Parliament and there is a provision of $6 million in this year's budget to carry out this programme. As a result of this tradition of long-term planning, Changi Airport continues to have ample capacity for growth. Contrast the smooth development and expansion of Changi Airport versus the controversy and traumas faced by other airport authorities in dealing with their congested airports, then the achievement of Singapore in this area is truly amazing.

In this respect, the CAAS has played a key role in carrying out the Government's air transport policy. It is regrettable that its former Director-General, Mr Lim Hock San, has left the service and joined the private sector recently. To ensure the continued success of our air transport policy, we must ensure that CAAS continues to be able to retain its talented staff. 3.30 pm

The issue of privatisation of CAAS has been looked into currently, and if privatisation could help this matter, I would urge the Minister to review this matter with some urgency. As I have noted earlier, SIA and its subsidiary, Tradewinds, could not truly and fully utilise the potential offered by the unused reciprocal landing rights of our air services agreements. I am not certain whether all those unused routes are unprofitable or they are not used because SIA does not have the capacity to serve them. Perhaps it is time that we considered fostering another Singapore-based international airline to fully realise our potential.

In order for us to grow as a transport centre, a world-class meteorological service is essential. Even though there is a provision of $0.72 million for development expenditure for the service, I believe more needs to be done in this area, so that airlines operating out of Singapore could have better weather forecast to plan their flight time.

Sir, Changi Airtropolis faces aggressive competition now and in the future. Business Times on 11th March reported on the front page that the Malaysian Airline System, in a bid to make Senai a regional hub, is offering cheaper fares by up to 39% when the airline starts international service in April this year. Other airports in the region are also being rebuilt or being upgraded. In this competition among nations, we cannot slacken our pace. I urge the Government to continue to pursue its proven air transport policies with vigour and determination.

Mr Heng Chiang Meng: Sir, I just want to say that if we accept that COEs are a means of implementing the quota system and a means of allocating the quota by monetary terms, then if there are other systems of allocating cars amongst various categories of potential car owners, there is no need for COEs. In this respect, taxis have their own control system. The number of taxis is already controlled. If a person has a car and wants to convert it into a taxi, it is not permitted. Since the Government has taken great pains to emphasise that the price mechanism is only used to control the allocation of cars under the quota system, in the case of taxis, there is justification in saying that the price mechanism is really not necessary. It may be good as a means of raising revenue, but then it is really not necessary as a means of allocating taxis.

Sir, I must add that even though I say this, I have my doubts that the Minister will be so overwhelmed by this line of reasoning that he will waive the COEs for taxis. Therefore, I think taxis will still have to pay COEs.

But a more inequitable fact is that taxis are being made to pay COE premia at private car levels. Why do I say this? Because if you look at private cars, bids are mainly made by the public who are potential car owners at particular premium levels. There are a number of non-economic factors in this premium, eg, the status of being a car owner, because it is a scarce commodity and normally a scarce commodity gives a certain amount of status to the owners.

Sir, the ownership of a car can also be an expression or proxy for personal freedom of movement. There is also the convenience for car owners. However, taxis are not private cars. My question, of course, is: why should they be made to pay the premium for COEs which include these non-economic factors? I would like to suggest perhaps that there should be a different category for taxis.

There is also another group of taxis, and here I want to include other vehicles which are up for COE renewals. The owners need to pay a prevailing quota premium based on the COE prices of the past 12 months. Again, this is not fair because the COE prices for the past 12 months are high due partly to the reduction of the ARF from 175% to 150% of the open market value. I would like to give an example here. If the ARF were to be reduced to zero and the demand for new cars remains the same, then logically, COE prices would increase by the same amount as the drop in the ARF. For the new car owners, the overall price remains the same, but for those who are asked to renew their COEs for the second 10 years, they would have to really pay an arm and a leg for the privilege of using the car for the next 10 years.

Perhaps I would like to ask the Minister whether, for this reason, he could reduce the prevailing quota premium for COE renewals for all vehicles, including taxis, by the 25% drop in the ARF, where it is applicable.

Dr Wan Soon Bee: ( In Mandarin): Sir, I would like to declare that I am the Chairman of NTUC Comfort. However, I have no personal interest arising from the issue I am going to raise here. Although the issue that I am going to raise here involves members of NTUC Comfort, it is an issue of great concern to all taxi drivers who are also voters.

Sir, the question of COE has been discussed on many occasions in Parliament and I am very glad to note that on this question, the Government has responded positively to the views of the people by giving the non-transferable COE system a try. The Government's positive response to constructive views of the people and the willingness to try out their recommendation, clearly reflect our Government's esteem and respect for the views and reasonable suggestions of the people.

I sincerely urge the Government to carefully reconsider the question of COE for taxis, because taxis are being included in the COE system. When taxi drivers change their taxis, they have to bear the ever increasing cost of the COE premiums. This month, when a taxi driver changes his taxi, he has to pay the prevailing premium of $9,099. One year ago, in March 1991, the prevailing premium was $4,016. As such, over the past 12 months, the cost of COE premium has doubled. And the rise in COE premium for taxis has been very unpredictable over the months. During the period from March 1991 to March 1992, the lowest COE premium was $909 in March 1991 and the highest was $16,602 in January 1992.

In recent years, because of the appreciation in value of the Japanese Yen and the increase in diesel tax as well as the increase in spare-parts and maintenance cost, the operational cost for taxis has been rising again and again. Coupled with the unpredictable rise in COE premium, there is a tremendous rise in the operational cost of taxis, and the taxi drivers are finding it extremely difficult even to survive.

Although I have raised these points several times in Parliament, I would like to reiterate that the taxi is a means of public transport. Under the Road Traffic Act, taxis are classified as public service vehicles. So as public service vehicles, taxis should also be excluded from the COE system like public buses and MRT. I think the taxi drivers find the explanations given by the Ministry of Communications unacceptable, because taxis play an equally important role in providing public transport to our people.

Sir, taxis make 700,000 passenger-trips per day. So it is very clear that taxis are a very important means of public transport. In the public hearing on the land transport system in 1989, our economist and former MP for Whampoa, Dr Augustine Tan, argued that we should take into consideration the important economic service provided by the taxis. Our fleet of taxis makes up only 2% of the car population in Singapore. Yet, they make 700,000 passenger-trips every day.

Sir, I would like to once again urge the Minister for Communications to exclude taxis from the COE system, because taxis are public transport vehicles. At the same time, taxis play an important economic and social role in Singapore. If the Minister for Communications is not inclined to exclude taxis from the COE system, then I hope that the Hon. Minister would consider setting up a separate category for taxis under the COE system.

Mr Lew Syn Pau (Tanglin): Sir, first of all, let me declare my interest because I am the GM of NTUC Comfort, a taxi operator.

For the purpose of taxation, a vehicle has always been classified according to the function it performs and not its physical shape. For example, not all buses are public transport and hence do not pay the same taxes. A scheduled bus pays a different tax compared to one used for school children or one used for private hire. A scheduled bus is regarded as public transport and hence exempted from the need to have a COE. A car can be a taxi, but a taxi may not be a car. Some countries allow mini-buses, jeeps and even motorcycles to be used as taxis. Hence, a car should also be taxed according to its function and not simply because it is a car. To be consistent, therefore, taxis, being public transport, should also be treated like scheduled buses and be exempted from COE. Furthermore, the number of taxis on the road is already controlled by the issue of licences to taxi operators. Is there a further need therefore to control them through COEs?

Next, the diesel tax of $6,600 a year on taxis is also another inequity which cannot be and has never been satisfactorily explained. Factories and buses also use diesel, but they are not required to pay this tax. So this tax is really a taxi tax and not a diesel tax.

Next, the Government imposed a statutory life span of seven years on all taxis. This means that all taxis must be scrapped or replaced with a new car by the end of seven years. Yet, when the COE system was imposed upon taxis, taxi operators were told that they have to pay a prevailing quota premium valid for 10 years, and get a refund of quota premium for the remaining three years when they scrap their taxis after seven years. I find this regulation extremely inequitable. It appears that this regulation was made more out of administrative convenience rather than equity. I would like to suggest to the Government to change the regulation and allow taxi operators to pay only 70% of the quota premium when they replace their taxis.

Finally, I would like to urge the new Minister for Communications to do a comprehensive review on the taxation of taxis. There are many inequitable anomalies which need to be removed.

The Minister for Communications (Mr Mah Bow Tan): Mr Speaker, Sir, first of all, may I know how much time I have left?

The Chairman: Why do you not just carry on?

Mr Mah Bow Tan: First of all, let me address the point that was made by Mr Heng on public transport. Mr Heng spoke at some length about the special protected position of our two bus companies. He is correct in saying that the Government was responsible for creating such a situation. Some Members of this House may be wondering why this is so, especially why, amidst so much discussion of the virtue of the free market, we do not allow more competition in this particular area of public transport. Perhaps it would be useful for me at this stage to bring Members back to how and why the situation came about. 3.45 pm

First of all, I must add that we are not alone in this situation. Hongkong practises the same philosophy in so far as public transport is concerned. It grants a franchise to a few bus companies, guarantees them a certain rate of return, and in return asks for certain obligations. In fact, Kuala Lumpur is thinking of doing exactly the same thing.

Sir, Members of this House will recall, in the 1960s and the early 1970s, bus services were operated by something like 11 bus companies, none of them having any special privilege or special protection. Indeed, at that time, anyone who wished to operate a bus company could do so. So there was no lack of competition. But there was also no lack of wasteful duplication and a total lack of coordination of services. Bus companies went all out to undercut one another, profit margins were squeezed, operators were not able to upgrade, buses became run down, poorly maintained, services infrequent and inadequate. I could not help thinking at that time that when people were talking about catching a bus, they literally had to run and catch a bus. And after they had caught it, they would have to cling on for dear life, otherwise they would not be able to get to school or to work on time. At that time, what we were talking about was a need for reorganisation and for more regulated environment. So the 11 bus companies were merged into four, and even that was not enough. In 1973, the four had to be merged into one to form today's SBS. Even that was not enough because the infrastructure was sadly lacking, the management could not cope.

It took a massive effort on the part of Government to get our public transport going again. A Government team of officials was seconded to help reorganise SBS. Basic infrastructure had to be put into place and slowly, but surely, SBS regained public confidence. In 1978, SBS became financially strong enough to be publicly listed. CPF holders were allowed to purchase the shares and the Government assured the public that SBS would be managed well enough to be able to pay not less than 7 1/2% dividend to its shareholders. In return for this, SBS had to fulfil its obligation. This obligation was to provide a comprehensive route network at a good level of service and at reasonable fares. The result was that when SBS was listed, shares were over-subscribed by something like 27 times. Once SBS had settled down and the bus service had stabilised, we recognised that its monopoly position was not desirable. We needed some basis for comparison. So we had to inject some competition to allow us to make such a comparison.

In 1983, Trans-Island Bus Service (TIBS) was formed. It was given its own territory to operate. The Member is correct in saying that there was no direct competition in terms of routes, but there was certainly competition in terms of the management. We now had a basis to compare the managements of two different bus companies operating in two different areas; how well they were doing in terms of service level, how they did in terms of utilisation of their buses, manpower, human resource management, fuel consumption, maintenance, etc. Because of this competition, both companies strove to keep their management trim and efficient. They introduced double-deckers and one-man operation, and as a result the two bus operators were able to keep fares constant during this period. There was no fare increase during this period, as a result of the savings and competition. It was a creditable achievement. I have mentioned in this House before that due credit should be given to the bus operators.

Sir, I come to the question that Mr Heng asked on whether SBS, because of its monopoly position, is making too much profits. Mr Heng gave some figures to allude to the fact that SBS was making excessive profits. I believe the operative word here is "excessive" because I do not think he begrudges the fact that SBS is making a profit. So what is considered "excessive"? It might be better if I let Members form their own judgment on this. In the last 10 years, SBS made a return on capital employed, averaging something like 9%-9 1/2%. In the last 10 years, it paid out dividends, for the first eight years 7 1/2%, and for the last two years 10%.

As a comparison, the China Motor Bus Company in Hongkong, which has a monopoly franchise to operate in a particular part of Hongkong, is guaranteed a return of 15%. It is not for me to defend SBS in this House. I thought I should put these figures to Members to bring across the fact that while it has enjoyed this position, it is my belief that it has not either declared excessive dividends nor, as far as I know, paid out excessive salaries or perks to its management and staff.

Sir, the Member has also spoken about the need for a bus/MRT integration exercise. I am pleased to note that the Member supports this exercise. In fact, this exercise is really a result of the need for all the operators, and by "all the operators", I am talking not just of the bus operators but also the SMRT, to cut their cost in the face of wasteful duplication and excessive capacity that came about when we introduced the MRT in 1987. When the MRT was introduced, it ushered in a new era of public transportation in Singapore. But it also resulted in an overnight increase in the carrying capacity of our total public transport system by something like 30%. There was no way that the demand could correspondingly increase by a similar margin to match that new capacity. So we had two choices. The first choice was to do nothing. If we did nothing, it would mean a wastage of resources. It would mean excess capacity in the public transport system. It would mean higher operating costs. The operators would eventually come to the Public Transport Council for fare increases. Everyone would be affected. The other option was for the operators to come together to work to reduce their operating costs by reducing this surplus capacity, and, therefore, to delay the need for fare increases. This option meant that only some commuters would be affected, not all. The three operators are very clear in their minds that they cannot expect any hand-outs from Government. They are aware that unless the Public Transport Council is fully satisfied that they have done their best to keep their cost down, they have been told, "do not come to the PTC for a fare increase".

Given these factors, the three operators have decided to go for the second option. They decided to get together and to work towards this integrated bus/MRT system. The PTC accepted their proposal in 1990. The implementation commenced from 1991.

In improving these changes, the PTC would take pains to ensure that the interests of the majority of commuters are protected and if there is a disruption, and it is completely unavoidable, it is kept to a minimum. As the Member has rightly pointed out, integration is the way to go for public transport in Singapore. I will ask the PTC to ensure that the operators do not lose sight of this fact.

Sir, I would like now to turn to Dr Wang's comments on air transport policy. Sir, I only need to say, after listening to Dr Wang, that I agree entirely with what he has said. We will continue to pursue our tried and tested air transport policy with, if I may use his words, "dogged determination". I can assure him that we will continue with our open sky policy in spite of some setbacks to our bilateral air rights negotiations. In the case of Indonesia, we have managed to resolve it amicably. In the case of Canada, the talks are still going on, but we will pursue our case, which is a strong one, to the hilt.

He will also be pleased to know that we will continue to upgrade our airport. The fact that Changi Airport is consistently ranked as No. 1 in the world is not an insignificant achievement. But it requires constant maintenance, it requires constant effort and planning. As the Member has rightly pointed out, there are other airports in the region which are hot on the heels of Changi Airport, as it were. It gives the Changi Airport authority even more reason to continue to do what it has been doing and doing well. It has done a first class job. It has been able to continuously draw in the talents to keep up its performance.

I am glad that Dr Wang has taken such a keen interest in the Meteorological Service. The Meteorological Service plays a very quiet but important role in aviation and I can only assure him that the development in recent years, in so far as acquisition of hardware and software and training are concerned, allows the Meteorological Service to continue to keep up with the state of the art and to provide a comprehensive service to support our efforts to be the communications and air hub for the region.

3.58 pm

[Mr Deputy Speaker in the Chair]

Mr Mah Bow Tan: Sir, I turn now to the points made by Mr Heng on the COEs on taxis. Sir, I think the point has also been made by Dr Wan Soon Bee and Mr Lew Syn Pau. Let me reiterate once again what the purpose of the Quota System is. The Quota System is meant to control the number of vehicles on our roads. By "vehicles", I am referring to all vehicles, including public transport. Strictly speaking, we should also impose a quota and require public buses to bid for the COE. But public buses are very efficient carriers of people. So we make a concession. They are not required to bid for the COE.

On the other hand, the taxis are no different from a chauffeured car. They provide a personalised door-to-door service for passengers, a useful and essential service, if I might add, but nevertheless, a personalised chauffeured car service. They too contribute to congestion, like the private cars. Unlike buses and MRT which carry large numbers of people, taxis are not efficient carriers of people. Therefore, because they provide a service, we grant them a concession. We group them under Category 2, which is a large category, so the pressure on COE prices is not too high. And secondly, we allow taxi operators not to bid for COEs when they replace their taxis. These are two concessions which I think the Members of this House must recognise as concessions because of the special nature of taxis. 4.00 pm

Dr Wan has proposed a separate category for taxis. I am not so sure whether by having a separate category it will work out. And the simple reason is that there are only so many players in the taxi market. If you take NTUC Comfort as operating some 60% of the taxis in Singapore, and you look at SBS, TIBS, SAABS, you are looking at four or five different players. With only so many players, any tendering under a separate category for taxis would be quite meaningless.

Sir, Mr Heng has also brought up an interesting point about the prevailing quota premiums being inflated by the fact that the ARF has been reduced. I think, conceptually, I can agree with him that there has been some shift or some pressure on the COE prices because the ARF has been reduced by 25 percentage points. But I must point out that it is not the only factor that impacts on COE prices. In fact, the evidence suggests that a more dominant factor on COE prices is simply the market demand for new cars.

Let me just take a simple example. During the Gulf crisis we had the ARF being reduced twice, once by 15 percentage points and once by 10 percentage points. We reduced 15 percentage points in November 1990, the quota premiums for cars fell. The logic of it is that it should go up. But it fell simply because there was no demand; or very low demand for cars during that time. And then again in February 1991, there was another reduction, a further 10% reduction in the ARF. The quota premiums of cars in February 1991 were lower than in January 1991. Again, they fell.

Sir, in view of this very uncertain linkage, I do not think that we are in a position to accede to the Member's suggestion at this stage.

In view of the time constraint, I will only reply very briefly to Mr Lew Syn Pau's point about diesel tax. I think we have debated this matter in this House many, many times. Whether we call it a diesel tax, or a taxi tax, it is not material. The point of the exercise really is that as a result of a review, and indeed we have done this review, of the role that the taxi plays in the scheme of public transport in Singapore, there was no legitimate reason for it to be paying the taxes that it was paying at that point in time. We have done the review and the Ministry feels that there is justification for this tax, call it whatever you like, but without this tax the whole tax structure for the taxis would have been quite unfair.

Finally, the point about the prevailing quota premiums (PQPs) being valid for 10 years while the taxi is only valid for seven years. I think the Member has a point here. I will ask the Registry of Vehicles to look into this and to see how we can fine-tune the system further.

The Chairman: Can I remind Members that at the rate we are going, we will not be able to finish all the items by tomorrow's "guillotine" time. I would urge Members to practise some economy in their speeches, please. Mr Heng.

Mr Heng Chiang Meng: I would like to thank the Minister for his reply. But I just have one point before I withdraw the amendment.

The Minister compares the profitability of SBS to that of China Motor Bus Company in Hongkong. Does the Minister not know that due to the special situation in Hongkong, because of 1997, the pay-back periods of all businesses in Hongkong are much shorter, which means that returns of capital employed in Hongkong must be much higher? And the best proof of this statement is in the price earning (PE) ratio of the Hongkong stock market. The PE ratio is very much lower in Hongkong than in Singapore. Hence, it is not correct to compare with Hongkong because of the special situation in Hongkong, but you must compare SBS profitability in relation to business risk in Singapore.

The Chairman: Two minutes, Mr Chiam.

Mr Chiam See Tong (Potong Pasir): Sir, I would like to seek a clarification from the Minister in regard to a point brought up by the Member for Cheng San GRC, and that is, in fact there is already a mechanism to control the number of taxis on the road. When ROV limits the number of taxis on the road, does it take into account the overall car population? So why is there a need to get the taxis into the quota system when their numbers are already controlled in the first place?

Dr Wang Kai Yuen: Sir, may I get the Minister's comment on the privatisation of CAAS?

Mr Mah Bow Tan: Sir, in reply to Mr Chiam, it is the intention of the Ministry not to control the number of taxis on the road and to actually leave them free to decide how many taxis they want, depending on how much they are prepared to pay for the quota premium. I think we would like to reach that situation as quickly as possible. With the quota system, we are now in a position to do so. It is up to the taxi operators to decide how many taxis they want to put on the road.

On the point raised by Mr Heng, I just want to say that it was not my intention to compare SBS with China Motor Bus, but to make the point that in terms of dividends paid out, not in terms of profitability, the numbers that we are looking at are not unduly excessive.

Finally, just quickly to respond to Dr Wang, CAAS is looking at privatisation. We have a consultant looking at the feasibility of a privatisation exercise. The report is just in, and we have not had the chance to study it. But I just want to say that if privatisation helps CAAS, helps the airport, and helps Singapore to maintain its position as the air hub of the region, then we will consider it.

Mr Heng Chiang Meng: Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2). Mr Charles Chong.

Mr Charles Chong (Eunos GRC): Sir, I beg to move,

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

Sir, I note that the Minister for Communications on 20th February this year released figures to indicate that our sea port is the world's No. 1, three times over. The figures, announced by the Minister, showed that the Port of Singapore Authority (PSA) was the world's No. 1 container port. According to the Minister, Singapore is also No. 1 in terms of gross registered shipping tonnage, and yet again No. 1 in terms of the number of vessel movements.

Sir, we have just heard the Minister reminding the House a few moments ago that Changi Airport is also No. 1 in the world. I would like to ask the Minister how important or necessary is our apparent obsession with the No. 1 position.

I do not think many Singaporeans would dispute the fact that in order to survive and to prosper, we need to constantly strive to be better. However, this obsession with the No. 1 position, in some cases, may be completely unnecessary. For example, being No. 1 for rules and regulations and fines is definitely unnecessary. In other cases, being No. 1 may just not be good enough. Although the Singapore worker has been rated No. 1 in the world for more than a decade, it does not mean that we have arrived. In fact, there are still many areas that must be improved, as pointed out by my hon. friend, Dr Ow Chin Hock, a few days ago in this House.

Sir, if in striving to be the best we can be, takes us to the top position, should we not enjoy being No.1 in the world a little more modestly and quietly? Blowing our own trumpet, whenever any survey, no matter how insignificant, rates us as being No. 1 in the world, may not have very many beneficial effects. It may mistakenly convey the impression to our people that we are already the best that we can be. However, more significantly, it may make us more prominent targets for protectionist measures taken by the less competitive and the more envious, who may perceive us to be bigger competitors than what we actually are. Perhaps the Minister could give us his views on this subject.

Sir, with you kind permission, could I now take my second cut?

The Chairman: Yes.

Mr Charles Chong: However, before speaking on Singapore's Air Services Agreements, I would like to declare my special interest on this subject as an employee of Singapore Airlines.

Sir, in recently concluded Air Services Agreements with other countries, we appear to be giving away more liberal traffic rights to other carriers than what we receive for Singapore carriers. It also appears that despite this very liberal air policy, Singapore carriers still face apparent protectionist measures taken by other countries. Could the Minister comment on this issue and let us know what advantage our liberal air policy has on air carriers in Singapore and also on the country as a whole?

The Chairman: Encik Harun Ghani. You can take both cuts, one after another.

Encik Harun bin A. Ghani (Hong Kah GRC): Sir, when Telecom introduced the new pricing system for charging usage of telephone, all levels of society felt that the action caused inconvenience to the public. Sir, the Ministry of Communications became a target for this unhappiness. However, through a survey conducted in December 1991 and feedback received, 73% of the users would pay lesser than before. This relieved the public and less unhappiness heard. Sir, indirectly, Telecom has succeeded in educating the public to be thrifty. My compliments to the Minister for Communications.

Further to this, I would like to know the information pertaining to the public usage of telephone in the months of January and February this year. If it is invariable with the findings in December and feedback received, then the public would be more relieved.

Sir, the time-based charging system may indirectly reduce the profit or may not be profitable to Telecom. Therefore, how would Telecom reconcile the reduction in revenue earned with its expansion plan of employing high technology?

Sir, it seems that there is one more point which causes unhappiness to factory employees who want to use the office telephone. Those who work in the factory will not be able to use the office telephone. It would be better if Telecom provides card telephones in factory offices so that they can be used by the employees. I raise this point because there are factories which want to install card telephones but their applications were rejected by Telecom.

This year, Telecom is entering the privatisation era and definitely it has big programmes which require high technology equipment and services. Besides requiring a large amount of investment, the services of skilled labour would also play an important role in determining the excellent services provided by Telecom. In view of this, will the employees be given skills training or have they been trained and are ready to excel in providing such services in future? What about those who are not able to adjust themselves to the rapid expansion of Telecom, especially long service employees? Either their services are no longer required or they would be transferred to do tasks which are different from their usual jobs. And if their services are no longer required, what sort of compensation would Telecom provide them?

Sir, Telecom's intention is to sell its shares to the public, and I think the Deputy Prime Minister has already mentioned that he would not float TAS. It is indeed a prudent move and should be commended. My sincere hope is that its employees should be given priority in purchasing the shares through CPF savings so as to boost the morale of the employees. I am saying this not because my wife is working with Telecom. It is just coincidental. For those who do not have CPF savings, this is the time for them to start saving and learn to be thrifty for their future and old age. 4.15 pm

Sir, my hope is that if Telecom wants to reap large profits through privatisation and increase capital expenditure on high technology and sophisticated equipment, the burden of bearing the high cost should not be shifted to the consumers.

Mr Mah Bow Tan: Sir, Mr Charles Chong asked why we are so obsessed in always being the best in the world. It is my fervent belief that we must maintain this obsession and I use the word "obsession" without apology. Maintaining the number one position for us is not an end in itself but the means to an end. If I can use our sea port as an example, ie, why do we push and strive to keep the Port of Singapore the number one container port, in terms of shipping, and so on. To remain as the number one port is not just a matter of collecting accolades which all Singaporeans can be proud of. Surely we are proud to be the number one port in the world. But more importantly is that with this achievement comes not only pride but also very, very tangible benefits.

Economically, the port creates jobs and it creates wealth for our people. There are 7,000 workers directly employed by the PSA. There are another 38,000 workers employed in industries which are related to the port. In 1990, the PSA contributed something like 2% to the national wealth and if we add the port-related industries, warehousing, ship chandlering, etc, the contribution rises to something like 3% to 4% of the national wealth. This is something like one quarter of the transport and communications sector's contribution to the national economy. It is not just a matter of being number one for its own sake but striving to be the best and, in the process, finding that we are the best in the world, we are number one in the world, and trying to maintain that position. There is no reason for us to feel apologetic about it.

If we can do it, we should continue to strive for it. But I have to add that this is not going to be plain sailing. There are other ports that are coming in the region, they are also, believe it or not, trying to be number one. They have all upgraded their facilities in the last few years. In terms of the kind of business that the Port of Singapore carries out, we have to continue to make sure that we are more cost-competitive than them, more efficient and we provide the best supporting services. If we can continue to do this, we will continue to remain as the number one port in the region and in the world and we will continue to reap the benefits.

Sir, the Government is aware that the PSA must have the necessary support, particularly, in the area of port capacity. We must be able to provide sufficient capacity to handle the amount of cargo that is going to come our way. PSA is now working closely with the relevant Government agencies to plan a new container port which will meet the needs of Singapore beyond this century and keep us as number one.

Sir, Mr Charles Chong also asked about our liberal open sky policy. It is a well-known fact that we have consistently adopted such a policy. Basically, what it means is that while we negotiate air rights on a bilateral basis with different countries, we want to have as many of these bilateral agreements as possible. Once such an agreement is concluded, we allow the other countries' airlines to fly to Singapore, even if our national carrier has no immediate plans to fly to that country. Why do we do this? The reason is very simple. It brings us many benefits. It enhances tourism, business from all parts of the world can get in and out of Singapore quickly and conveniently, encourages investment, it benefits trade. And most of all, consumers will benefit from a wider choice of airlines and more convenient itineraries. Sometimes, I would like to think of our airport as a huge bus interchange with flights coming in and out at such frequent intervals that people would rather come to Singapore, catch a flight and then go on to their final destination rather than go directly because it is faster and maybe even cheaper to do it this way.

While we continue to adopt this open sky policy, I must mention the fact that it does not mean that Singapore is prepared to give away more than what we actually receive. In this respect, whenever we have air services negotiations, it is the overall package of exchange that must be an equitable one. When I say "equitable", I am talking about there being a balance of opportunities, not a balance of benefits, for both sides. And the reason why we ask for a balance of opportunities is simply that we know, under such a situation, we can compete with the best in the world.

Sir, I turn to Encik Harun Ghani's points. I thank him for his concern that Singapore Telecom's profit will be reduced because of the introduction of time-based charges. He asked for some latest statistics on telephone usage under the time-based charges. Sir, in January 1992, 69% of the people paid less under the time-based charges than under the flat rate system. So 69% of the people benefited from this conversion to the time-based charges. The corresponding figure for February 1992, last month, was 72%. The figure for December 1991, which was the first month that the time-based charging system went into operation, was very close to this, 73%. In fact, Singapore Telecom collected less revenue, $4.6 million less in the three months, December 1991 to February 1992, compared to what it would have collected under the old system.

Sir, Singapore Telecom, as I have stated, is in the process now of reviewing this time-based charging system and all the views and options that have been expressed will be taken into account in this review and an announcement of the outcome will be made in due course. When Singapore Telecom is privatised, the TAS will be reconstituted as a statutory board and the activities of Singapore Telecom will be overseen by this statutory board. I wish to assure the Member that the interest of consumers will be safeguarded under the new situation when there is a separate statutory board.

On the point of unhappiness of private factory employees not being allowed to use the telephones, I am sure Telecom will be pleased to install additional coinaphones for them if they wish to do so. I think I have addressed the points that have been raised.

Mr Charles Chong: Sir, I thank the Minister for his answers and I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Mr Leong Horn Kee: Sir, I beg to move,

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

Sir, I raised this topic of whether the evening ALS should be lifted with the completion of the CTE tunnel with the Minister previously in this House. The Minister replied that there was no drop in the number of vehicles entering the CBD in the evening before and after the completion of the CTE. Sir, I would like to flog this horse one more time through the Minister.

Sir, the impression of those motorists who enter the CBD in the evening seems quite different from what the Minister told us in this House. There appears to be less traffic congestion in the CBD after the completion of the CTE. I would like to ask the Minister whether he would wish to reconsider the suggestion of lifting the evening ALS for a trial period of, say, one week. This trial is to establish whether there will be any sharp increase in the traffic in the CBD in the evening, without the ALS. If the traffic situation is, in fact, tolerable, which means that the evening ALS can be lifted, or at least can be shortened, then this would be beneficial to all. The Traffic Police will save on manpower to man the gantries, there will be more convenience to motorists and residents and, perhaps, businesses in the CBD in the evening will improve.

Sir, I move on to my second topic which is on the status of the Electronic Road Pricing system project. I wish to ask the Ministry for more details on this particular project. The Ministry of Communications has stated that the proposed Electronic Road Pricing (ERP) project is an integral part of the long-term land transportation plan of Singapore. This ERP is targeted for introduction in mid-1990. I notice that there is a provision of $5.37 million in the next financial year's budget for the ERP project.

I would like to express some areas of public concern on the proposed ERP. There are three main areas of concern. First is the expected cost and complexity of the project, ie, the cost to the motorists. At the moment, there are about 300,000 motorcars in Singapore. If each car has to be affixed with a measuring device costing, say, $200, the total cost to all motorists in Singapore will be about $60 million. Second, there will be the cost of the R&D of the project, infrastructural cost, cost of the computerised system, manpower cost and administration cost. All this would add up to a very huge bill for a very complex system in Singapore. And this cost, of course, will be borne by taxpayers.

The third area of concern is the common fear of invasion of privacy of the motorists. Most people will be concerned about the Government knowing where they went during the day, and where they have been for the past month or past year. This invasion of privacy is, in fact, a political issue which should be taken at the point when this system is being introduced.

Sir, I wish to make the point that at present, we already have a very excellent traffic system in Singapore. In fact, one of the best traffic control systems in the world, the best flowing with the least congestion. Is there really a need to change the present system and to introduce an Electronic Road Pricing system instead? I understand from a press report that in Hongkong, they actually aborted the ERP system in 1985, and in the UK, there was a report in 1990 that "UK drops plans for Electronic Road Pricing system". For us in Singapore, we are going ahead with this very complex system. I would like to ask the Minister what is the latest plan with regard to the system and whether he will actually reconsider critically the need for such a system in Singapore.

The Chairman: Order. Moment of interruption.

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

Mr Mah Bow Tan: Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates of Expenditure for the financial year 1992/1993, and ask leave to sit again tomorrow.

Mr Deputy Speaker: So be it.