LAND ACQUISITION (AMENDMENT) BILL

Order for Second Reading read. 2.37 pm

The Minister for Law (Prof. S. Jayakumar): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, compensation for land acquired before 30th November, 1987 was assessed at 30th November, 1973 value and land acquired on or after 30th November, 1987 was assessed at 1st January, 1986 values, or the market value at the date of Gazette Notification, whichever was the lower.

Sir, this Bill seeks to amend the Act to further revise and update the compensation for land acquired under the Act, namely, to pay market value as at 1st January, 1992 or the market value as at the date of Gazette Notification of the acquisition, whichever is lower.

Compared with the current position where compensation is pegged to 1st January, 1986 values, this amendment will certainly improve the compensation award for lands which are acquired in the future.

The amendment, therefore, is a recognition of the fact that land values have appreciated over the last few years. With the compensation awards being pegged at no higher than 1992 prices, the proposed amendment will address concerns that the Government should pay a fair compensation whenever lands are acquired compulsorily.

So the Government will continue to review periodically the compensation for land acquired for public purposes as it has done so in the past.

Sir, I beg to move.

Question proposed.

Mr Kenneth Chen Koon Lap (Hong Kah GRC): Mr Speaker, Sir, I support the Bill.

First, I wish to declare that I am a practising architect. In order to achieve the national objective of providing public housing for the majority of Singaporeans and put in place the effective infrastructure to enable us to achieve rapid economic growth, great extent of land has to be acquired for this purpose. Because of the rapid progress we make, the compensation paid to the land owners of those acquired lands may sometimes not be in congruence with the prevailing market rate. Now that the housing objective has been achieved and most of the infrastructure in place and, more importantly, land value fluctuates at a much faster rate, it is therefore timely for the introduction of this amendment to enable the Government to pay adequate and fair compensation to those affected by land acquisition. However, because of the rapid rate in the increase in land prices, I would like to request the Minister, barring any administrative difficulties, to consider revising the date in which the market value is based upon to a much closer interval. From 1986 to 1992, it is a very long period of time. Land costs must have increased manifold. Therefore, it will be fairer if this interval be cut short to, say, two to three years so that a fairer assessment of the market value can be reflected.

I support the Bill.

Assoc. Prof. Walter Woon: Mr Speaker, Sir, I support this Bill too, and may I fully support Mr Chen's statement that, in future, the period of time be reduced. May I also express the hope that the Minister will consider eventually going towards paying market value for the land. After all, in the past, when we were first developing the necessity to redistribute land and to build infrastructure it was very great but that necessity has diminished quite a bit now. The price of public good was very often private injustice and it was a great hardship on people to have their land acquired.

The other point I would like to make, although strictly not concerned with this Bill, is that the Act is connected to the Local Government Integration Act. Under the Local Government Integration Act where land is acquired for road widening, the Government can acquire the land. The cost of widening the road can be charged, ironically, to the people whose land has been acquired. May I suggest that there is very little comfort to the people to raise the quantum of compensation on the one hand and, on the other hand, to charge them the cost of widening the road, which they did not ask for in the first place. So may I ask the Minister to look into the possibility of amending the Local Government Integration Act as well? Do we really need the money that badly? That is really the question. After all, not every person who has land is rich and the Government correctly recognises that ownership of property is one of the keys to building loyalty to Singapore. I think we should not lightly deprive people of their property which they have worked very hard to obtain.

Dr Kanwaljit Soin: Mr Speaker, Sir, the philosophy of the marketplace has been the motivating factor of most of our economic and other decisions. We should, therefore, not shirk to apply the same philosophy to land acquisition. Principles of equity and the free market demand that when land is acquired by the Government, the compensation must be at market rate and not at some value of the past which may be lower. If one's property is acquired by the Government at market rate, that in itself can be a traumatic experience if one does not wish to part with one's property for whatever reason, but imagine the added injury if the value paid is below the market rate.

Thankfully, due to the hard work of our people, and the honesty, prudence and foresight of our Government, we have a country with no budget deficit and, in fact, we have consistent budget surpluses. There is, therefore, no moral or economic justification for taking land away from our people and not paying them their rightful due at the market rate. I, therefore, urge the Minister to provide that the compensation payable for any property acquired shall be pegged at its market value as at the date of the notice of acquisition.

The other matter that I want to draw the Minister's attention to is section 5 in the Land Acquisition Act. Subsections (1)(a) and (1)(b) are reasonable. The need for the acquisition is stated as public purpose, public benefit, public utility or in the public interest. However, subsection (1)(c) states that land can be acquired for any residential, commercial or industrial purposes. It does not indicate any public purpose. There have been instances of land being acquired and then sold to other private developers at commercial rates for commercial purposes. This seems very unfair and arbitrary to me and this practice should be stopped. If there is no immediate public purpose for acquiring a piece of land, then it must not be acquired at that time.

With that, Sir, I support the Bill.

Mr Chiam See Tong: Sir, I must declare my pecuniary interest. I am a practising lawyer acting for clients whose lands have been compulsorily acquired.

Land acquisition is big business for the Government. The Government, under the Land Acquisition Act, is given massive powers to compulsorily acquire land. Compulsory acquisition of land is a very profitable activity of the Government. Last year, the Government reaped $4.1 billion from land sales, which lands are mostly compulsorily acquired under the Land Acquisition Act. This year, the Government is expected to make $3.8 billion from land sales. The receipt from land sales this year is about 7% less than last year, probably indicating that land that would be acquired is becoming less. But, nevertheless, the sum of $3.8 billion is still very substantial.

Last year, the receipt of land sales was about one-third of the amount collected from tax revenue. This year, it is about a quarter of the tax revenue. It is quite clear that Government capital receipts from land sales contribute substantially to Government income which, when unspent, goes into the reserves. Therefore, much of our reserves are revenue derived from the sale of lands which are compulsorily acquired by the Government. I cannot support the present amendment to the Land Acquisition Act. I say that it is unfair and inequitable. A new formula for compensation should be worked out.

Speakers have already brought up the idea of market value. It is quite common knowledge that the Government acquires land for all kinds of reasons, not necessarily bona fide for a public purpose or for public interest. When land is acquired for building public housing, a hospital or construction of roads, no one will quarrel that they are for a public purpose. What happens when land is acquired by the Government for resale at a hefty profit or when land is acquired just to plant a few trees there or land is acquired to be re-rented out by the Government for a profit? Can we say that those lands are acquired for a public purpose? I do not think so. I would say that a more equitable mode of compensation could be one in which it depends on whether the land is generally acquired for a public purpose or for a quasi-public purpose or just outright acquisition for resale by the Government for a profit.

I suggest that there should be different rates of compensation depending on the purpose for which the land is acquired. If such a formula of compensation were to be adopted, then the land owner will not unduly suffer too much loss.

It has also been pointed out that not all land owners are wealthy people. I must say that we must remember that all these land owners are not wealthy people. I know of one case where a man had put all his savings in a piece of land as an investment. He had hoped eventually to sell it for a profit and use the profits of sale to tide him over in his old age. Suddenly, the land was acquired by the Government. The compensation he received was so low compared to the prevailing open market value at that time that the shock just killed him. He is one of the many victims of the low rate of compensation paid out under the Land Acquisition Act.

Other untold stories concern the way the Government takes possession of compulsorily acquired land. I have only just been informed last night at my Meet-the-People session of a case at Kheam Hock Road adjacent to Bukit Brown Chinese Cemetery. This case concerns a wood and zinc house. It is situate on land that has been compulsorily acquired by the Government. There were five people residing there at the material time including one old lady and a teenage girl. On Wednesday, 24th February, at about 11.30 am, a horde of HDB enforcement officers came to that house together with two Thai workers and an escort of two armed policemen. On instructions, the Thai workers broke the windows of the house and used crowbars to pry loose the main door. When the main door was detached, it was thrown on the nearby grass. The family was alarmed. The teenage girl cried and begged the HDB officers not to tear down her house. This is the sort of way the Government forcibly evicts tenants of houses on land that has been acquired.

Prof. Jayakumar: Sir, before I reply to the other points, with your permission, perhaps you might allow Mr Lim Hng Kiang to answer the point about the Local Government Integration Act (LGIA) because, I believe, it comes under the Ministry of National Development and he would be able to shed more light.

Mr Speaker: That was what I was about to do.

Mr Lim Hng Kiang: Mr Speaker, Sir, can I respond to Mr Walter Woon's point on the LGIA? He said that the Government acquires land for construction of roads and besides acquiring it and not paying the full market rate, it forces the owner to pay for the cost of building the road. That I say is no longer true.

The LGIA is intended for building local roads which benefit the owners of the land fronting the road. It was passed in the early days when many roads were made of sand and laterite and the LGIA was introduced when these owners wanted a proper road made. And the Government came in, built the road and charged the cost of building the road to the land owners according to the frontages, ie, according to the benefit that they gained from building the road.

Today, such a practice still happens for local roads where the Government builds a road that benefits the owners of the frontages there. The Government will acquire the land based on market rate, build the road and charge the owners who benefit from building the road according to their share of the benefit. And for the owner who has to give up his land, the cost of the land is then deducted from his cost of building the road. So, as far as the building of local roads to benefit such owners is concerned, it is done in a very equitable way.

Where the Government acquires land to build roads that serve the national network, the Government pays market rate for the land according to the Land Acquisition Act and does not charge the land owners for the cost of building roads in the national road network.

Prof. Jayakumar: Sir, I thank the Members who have spoken. First, for those Members who have asked for more regular intervals of updating, yes, this can be considered. I am sure they have noted that this latest updating is at a shorter interval than the previous updating, from 1973 to 1986. So, this is something that we can consider for the future.

Other Members have talked about going market rate completely - Mr Walter Woon, Dr Soin, and to some extent, I guess, Mr Chiam. If I may make a general point, Sir, especially for those who have said, "We have probably acquired all the land that we have wanted to acquire. Most of the public projects are completed." The impression is given that it is hardly ever likely that we will acquire or need to acquire any more land. Can we be so absolutely sure? I cannot be sure. If I ask the Chief Planner whether he can tell me that there will never be a need to acquire land ever again, I am sure he cannot give me that assurance. And how can we tie future governments down?

Let us not forget, when we talk about going market rate, that we are not in the United States or Australia where they have vast open tracts of land. Land in Singapore has been a special case, a special situation. It is a special situation and will always be a special situation. And very few other countries faced with this scarcity of land, with such high density of population have had so much success in public housing or industrialisation, port facilities or social and recreational facilities. And one of the important legal and social instruments which has enabled this Government to do this has been the Land Acquisition Act. It has been a crucial instrument of policy in achieving what has been achieved thus far. It may be the ideal to pay full compensation. But bear in mind what that means. It means more costly public projects and public development. Therefore, land acquisition policies and procedures that we have must ensure that the overall public interest and the interest of the majority must be taken into account and must promote housing, industrial, economic and other purposes. It must serve these interests efficiently, effectively, and not at a cost which will impede national development and not at an exorbitant cost.

Mr Chiam See Tong has attacked the Land Acquisition Act and said that the Government has reaped huge profits and so on and so forth. And therefore it is something highly immoral, unfair, inequitable. If it was unfair and inequitable, would we have achieved a situation today where more than 90% of the people are housed in public housing? It would not have been possible if not for the Land Acquisition Act and the cost of those HDB flats would not be what they are if not for the mechanism and the criteria for compensation in the Act.

He has said that some of the acquired lands are not bona fide and not genuine. That is a serious charge. He or others should bring up and challenge it in the courts if that is not so.

He mentioned a specific case of a family being unfairly evicted. He must give us more details about this case so that it can be investigated. He has given the impression that out of the blue, HDB officers came and descended on them. He should let us know. Were they or were they not served with notices in advance? And did they comply with the notices? If they refused to comply with the notices, how many reminders were they given and so on and so forth? Let us get both sides of the story before presenting a picture of a draconian action by the authorities. I am sure my colleague, the Minister for National Development, will look into it.

Dr Soin raised the third limb of section 5. I do not think she should interpret it as enabling acquisition for matters other than for public interest or public projects, because that too would be used mainly for comprehensive development, as far as I understand. In fact, I do not think we have used that provision for many years. 3.00 pm

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. - [Prof. S. Jayakumar].

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