CENTRAL PROVIDENT FUND (AMENDMENT) BILL

Order for Second Reading read. 4.14 pm

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

At present, a CPF member is allowed to use his CPF savings to buy private residential property or one under construction by a developer licensed under the Housing Developers (Control and Licensing) Act. He may also use his CPF to repay a loan taken out for the purchase.

However, he is not allowed to use his CPF savings to finance the construction of his own house. This is because of the risk that CPF savings sunk into the project may be lost if it is not completed. On the other hand, the use of CPF savings for properties developed by licensed developers had been allowed because the Ministry of National Development regulates and enforces the Housing Developers (Control and Licensing) Act to protect the interest of house purchasers. A CPF member building a house for himself does not come under the ambit of this Act.

Mr Speaker, Sir, the Bill before the House seeks to amend the CPF Act to enable CPF members to withdraw their CPF savings to finance construction of their own house with safeguard for the CPF fund invested in the self-construction project.

Sir, the main features are in clause 3 of the Bill. It empowers the Minister to make Regulations to allow CPF members to withdraw their CPF savings to, first, repay any loan taken to finance the purchase of any land and the cost of constructing a house on the land and, secondly, to reimburse themselves the cost for the purchase of any land and the construction of a house on the land. As a safeguard, no such withdrawal will be permitted unless the construction has been completed and a Temporary Occupation Permit has been issued for the house. This will ensure that CPF savings invested in the project can be recovered since the house would have been fully completed and marketable by the time the CPF savings are released.

Sir, the other clause of the Bill which I would like to highlight is clause 2. It introduces a new subsection 21(1)(ba) to enable the CPF Board to place a statutory charge on the house whose construction has been financed by CPF savings withdrawn by the CPF member. The charge is to secure the refund of the CPF savings withdrawn in the event that the member sells the house.

Sir, I beg to move.

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. - [Dr Lee Boon Yang].

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