PRESIDENT'S ADDRESS (Debate on the Address) (Second Allotted Day)

Order read for Resumption of Debate on Question [13th January, 1994],

'That the following Address in reply to the Speech of the President be agreed to:-

"We, the Parliament of the Republic of Singapore, express our thanks to the President for the Speech which he delivered on behalf of the Government at the Opening of the Second Session of this Parliament.".' - [Mr Loh Meng See].

Question again proposed.

Dr John Chen Seow Phun (Hong Kah GRC): Mr Speaker, Sir, one major factor for Singapore's success is our ability to learn from the experience and expertise of other nations. We formulated our policies by combining the good points that we have learned and avoiding the pitfalls that we have seen. Today, we have evolved a uniquely Singaporean system which others are now learning from us, because of our success. Our system is one which emphasises competition based on market principles to maximise results but maintains a strong sense of cohesion and fairness. This balance between competition and cohesion is the basis for a dynamic, just and progressive society. It underpins the principles, policies and methods in all our Government functions, be it education, health care, workers' welfare, housing or transportation. It seems to me that this is perhaps the only model that will prevent wealthy nations from declining which we have seen it happened too often in history.

So if Singaporeans want to have more of the good things in life, they will have to compete to get them. This is the only way. But as competition becomes more intense, and as differences of achievements become more stark, greater efforts will be needed to maintain cohesion.

The cohesion which we have developed among our people over the last 30 years has also enabled us to compete better against other nations. In our country, the Government works with the people. In our companies, the management works with the unions and the workers, and among the people, different races work in harmony. All these may not be true in other countries. So we need to maintain this advantage. The question is: how? Maintaining cohesion requires the effort of everyone -the Government, the employers, and the people.

The Government has done well to provide equal opportunities for every citizen to learn, to compete and to succeed in life, and a safety net to those who need it. It has also started an asset enhancement programme for Singaporeans. However, the Government could do more to strengthen its bond with the people. This can be done through paying more attention to the feelings of Singaporeans when implementing policies. While it is true that Government has always considered a wide range of reasons before deciding on a policy, it must remember that the ordinary citizen does not have the same perspective and he usually looks at it narrowly from his point of view. There must therefore be proper explanations, consultations and discussions to see whether any genuine problems, however small, can be resolved.

A case in point is the recent changes in medical benefits and salary revisions for public sector employees. Up to today, there are still some unresolved issues. For example, if we accept that those who opt for the Co-payment on Ward Charges Scheme should forgo their salary revision this round, why should they be denied future revisions? There is also the unresolved issue of whether there should be a minimum increase of salary in dollar terms. How can the offer be attractive to some officers if it works out to be just $20-$30 a month?

Under the Comprehensive Co-payment Scheme, while it is true that MediShield can help look after the co-payment when one incurs a substantial hospital bill, very few people understand fully how it works. Some workers have enquired at the CPF, but their apprehensions have not been removed because of the complexity of the scheme involving limits to daily charges and operation charges, etc. The Government should come out with the improved MediShield as quickly as possible and as simple as possible, and explain what a patient can expect from his bill with the intended lowering of deductibles and limits.

Sir, for employers, I believe that they must also do likewise. There should always be consultations and discussions before any policy of the company is implemented because workers do not usually see it from the management's point of view. As for the people, they need to be more objective in their criticism of Government policies. I have held discussions with many of my friends, many of whom are professionals and highly intellectual people, but I can observe that they do not see things as widely as they should. They look at it usually from a narrow angle and sometimes their views are coloured by their own personal interests.

Take the case of COEs (Certificates of Entitlement), for instance. Today, many still argue that since we have COEs, we can take away all the other taxes in the form of ARF, road tax, and so on. They think that because we have COEs to control the number of vehicles, it alone should therefore work. But they fail to understand that if you do that, then all the savings that you can have from other taxes like ARF will be transferred to the prices of COEs. In the end, who is going to suffer? The people who buy smaller cars are going to suffer. Why? Because at the moment the ARF works against those who buy huge cars. When a person does not have to pay his ARF any more, and assuming he is buying a big car, the amount that he saves would naturally be transferred to his bidding in order to ensure that he gets a COE. But there is no guarantee that he will get a COE. If he does not get a COE, of course, in the last resort, he will downgrade to a lower category. When that happens, the people who are bidding in the slower category will lose out. In the end, you will find that you have a situation where the COE prices could become unmanageable and those who intend to renew their COEs after 10 years would find it too expensive to do so. By spreading these taxes across-the-board on a number of measures, it is obvious that the situation is more manageable.

I am just giving examples to show that Singaporeans must also take note of their biases and that they should try to find out more for themselves the reasons why a particular policy is implemented. I believe that cohesion is the key for us to continue to have intense competition and progress economically. But unless and until all three parties - the Government, the employers and the people of Singapore - realise their roles and understand that they should not always insist on their views, we will not be able to continue with our objective of generating wealth through competition in a sustained manner.

On the subject of the Minimum Sum Scheme, I support the scheme because I can see the problem coming. There are many people who now retire without enough cash and it is very difficult for them to sell away their house. Even if they do so, I have seen many cases where their cash quickly disappears because of demands from family members, relatives, friends and so on. We need to have the Minimum Sum Scheme in place and we also need to ensure that there is enough cash when the people retire so that they could continue to enjoy a decent living. But we need to be careful on how we implement the scheme. At the moment, we have a Special Account in our CPF and we can use this Special Account to form part of the cash requirement in the Minimum Sum Scheme. But we should not force people to cough up cash to top up to the amount that we think is necessary because, if we do so, there will be people who will find it difficult to meet the requirement.

With these remarks, I support the motion.

Mr Koo Tsai Kee (Tanjong Pagar GRC): Mr Speaker, Sir, thank you very much for allowing me to join in this debate.

Sir, the most significant event which has direct impact on the Singapore economy in 1993 is the successful conclusion of the Uruguay round of GATT. The last-minute packaging of the Uruguay round in time for the fast track approval by the US Congress has given Singapore some breathing spell in its ability to compete in a free and fair trading world. In fact, Sir, ironically, the impetus to the conclusion of GATT came not from a belief in free trade per se but from a growing fear of regionalism, tribalism and the formation of trading blocs. GATT was concluded in the shadow of NAFTA and the US threat of retreating from Europe into the embrace of APEC. In other words, the world is at once becoming more global because of GATT, and more local because of all the regional groupings. Singapore must therefore operate within this new world order.

The President is right to urge Singaporeans to work overseas, to venture abroad, to be more internationalist, because obviously that is where the markets are. But at the same time, the President has exhorted us to be more Singaporean to face the world as one people.

What did the President's Address touch on? He touched on many issues. But to me, the basic message is that the world has changed. So some policies must keep pace with these changes like, for example, we are all living longer, and the demographic pattern is changing. So I think it makes sense to secure our retirement by keeping more money in the CPF. We should all support the proposed revision to the CPF Minimum Sum Scheme. I think some of this should be in cash because when we retire we may have our HDB flats, but we cannot eat our assets even though we may enjoy in their comfort.

Sir, change is frightening. It will always be resisted. That is why we must reaffirm our commitment to the tripartite arrangement between all three parties - the Government, the management and the union. We must work together to explain the need to change and cushion some of the harsher impact of some of the new policies to come. For example, some policies that are good are not very clearly explained. Dr John Chen, my colleague, has already pointed out some of these policies. It does no harm for me to repeat in a different manner what he has just said.

The new health care policy to be put in place is a welcome one. But some schemes, like the co-payment scheme, the MediShield scheme, are not very clearly explained to the ordinary man-in-the-street. I was just told this morning that one civil servant went to the CPF Board to collect some MediShield forms. The counter staff told this civil servant that there was no need to apply. Why? He was told MediShield does not apply to civil servants. This is wrong because MediShield is a safety net for all of us who have not opted out. I think such simple policies which we all need to know in very clear simple terms are not made explicit to some of the counter staff, some of the civil servants. The task of explaining the new impact of new policies should be the task of Government, employers as well as the unions. I think I need to repeat this point because in the last few months many new policies have come on stream. Some are very difficult and complicated policies that cannot be made too simple, yet we must try to make them simpler.

The President has told us that some things have changed. So we must respond quickly. But the President is also telling us that some things should not change and must not change, things like family values, using the free market to drive the economy or tempering the system with a compassionate hand and avoiding the welfare trap that has impoverished once proud and rich nations.

Sir, the apparent collapse of the Russian free market system has renewed protectionist voices to stop the free market from rolling on. But in fact, on closer analysis, the biggest mistake Gorbachev has made was to liberalise prices before breaking up the monopolies of cartels which had dominated the Soviet economy. But at that time, of course, Gorbachev's hands were tied because he needed to fill the shelves with goods very quickly. But critics of the free market should look to China to see the success of the system there. They cannot be so dense to ignore how much happiness, how much joy, how much prosperity, the free market has brought to the Chinese.

Sir, the free market is the final arbiter of who earns high income, who earns low income. The market is not the best judge, but in an imperfect world like ours, the market offers the least imperfect solution. Sir, we should never envy the rich remisiers or the rich estate agents because they earn more money than some of us. Everybody likes to talk about them these days because we have just experienced the crest of a property and stock market wave, notwithstanding the fact that in the last few days it has gone down. But when the market crashes, who cares about these remisiers and property agents. We should never be so arrogant to assume that street-smart people have low IQs. Indeed, I have a university colleague, a Ph.D in Electrical Engineering or in Mathematics - I cannot remember - who resigned from his job as a lecturer to become an ordinary real estate broker. I do not know about his IQ, but if you equate degrees with IQ, I think his IQ cannot be so low.

Sir, the President's call to reaffirm our future in a free market is correct. It is an unbiased system, not the fairest, but the best available so far. It is therefore refreshing to hear the President play new music and sing familiar old songs. It is this constant fine-tuning of old policies and steadfast adherence to the basics that will secure our future in the 21st century. Sir, we should never need to go back to the basics, something which John Major is urging the British to do so, because we should never leave the basics.

Sir, for all the things the President has said, to my mind, the most important message is the one embedded in the last paragraph. If I may quote from the Address, the President said:

"So long as we are prepared to learn and to work our best, we can continue to be ahead. But we need the cohesion and determination to excel. Then we will thrive and prosper."

Sir, the key word in this paragraph is "cohesion". How do we tackle the issue of cohesiveness? Indeed, what is cohesiveness and whether it is at all necessary. Dr Wang Kai Yuen is concerned that with the growing income gap there will be less cohesion, all things being equal among Singaporeans. Over the last 10 years, the income gap in Singapore has naturally narrowed, but in the future there is indeed a danger that the gap will widen. But this is not because the Government is skewing the salary structure to reward the rich. The real reason why income gap will grow in the future is because the world is becoming more global, more porous and, sooner or later, borderless. The mercantilist days where labour was only mobile within national boundaries are over. So are the unskilled who will have to compete with the unskilled in China, in India and in Mexico, to manufacture the same product.

It is also naive to assume that a lesser income gap will make a nation more cohesive. If it were so, the experience in China and elsewhere is instructive. With a porous world economy, a widening income gap is, as I have said, inevitable. Robert Reich devoted a major portion of his book, The Work of Nations, to explaining why nobody can stop this phenomenon. The alternative is, of course, equality of income where everybody is equally poor. Mr Speaker, Sir, Mr Robert Reich is a Democrat whose whole life has been devoted to narrowing the income gap. He has told the Americans in no uncertain terms that the income gap will widen and he cannot stop it.

Before China opened up her closed economy, there was equality of income. Everybody was equally poor, but were they happy? I do not think so. Now, in China, the income gap has really widened. The rich and the poor are quite obvious. I can tell you, Sir, that not all are happy. I think most are happier. In fact, Jiang Zemin, at the 14th National Congress, told the Chinese that they must widen the income gap so that everybody will become more prosperous. So the challenge is really to accept this inevitable outcome and build social cohesion around the growing income gap. One way is to structure policies and programmes so that everybody, including the lower income group, is better off with the new policies than with the old policies. We would have succeeded, Sir, so long as our poor is richer than the rich elsewhere. I think that is the key - so long as our poor is richer than the rich elsewhere.

The Japanese have shown us what cohesiveness is and what it can do for the society. Japan always has income inequality. The rich eat gold-plated leaves, the poor sleep in the subways. Sir, you and I do not see the destitutes in Japan so easily because they move into the subways after the last train has rolled off and they clear up quickly before the first train rolls in. It is wrong to conclude that cohesion in Japan is weak in spite of this income gap. The Japanese are a cohesive lot and with it they have leap-frogged from a poor, underdeveloped country into the ranks of the G7 - the club for the richest in the world. But luckily for the Japanese, cohesiveness comes easy because Japan is a very homogenous society.

I learn recently that new Japanese expatriates in America were astounded by the fact that Americans greeted each other on the streets, even among strangers, "Good morning, Sir", "Good afternoon" and "Good day". Sir, the need to appear polite and reassuring, I am told, is not of paramount importance in Japan. Why? Because apparently in Japan they are so homogenous that they know their feelings every morning, every afternoon, every evening. I think this must be an exaggeration. But it says something about the Japanese culture and their cohesiveness. If nothing else, they think they are alike. That is important.

Unfortunately, Sir, Singapore is not a homogenous society and it will never be. We are a land of immigrants consisting of Chinese, Malays, Indians and others. Instead of this inherent natural cohesiveness, the possibilities of friction and conflict are enormous. Even within the same ethnic groups, many of us have different loyalties. Sir, Japan did not become a developed nation because of the plurality of individualism and a diversity of opinions, and neither will Singapore. But can Singapore follow Japan's footstep to become the second country to leap-frog from the ranks of the very poor into the ranks of the very rich? I think we are very close to there, but we are not quite there yet. I think we are 10 to 15 years behind the very rich. In order to reach that position, the club of the very rich, the G7, or the G8 eventually, we need a goal, we need a mission, we need a purpose, we need an objective, to work as a team. But right now, what is that mission? We have "Vision 1999", and we have several other missions. We have this national ideology being toyed around.

To me, Sir, our mission must be to fulfil our forefathers' dream of making it big in Singapore. When our forefathers came to Singapore from afar and braved the unknown seas, they came with visions of hope, they came with dreams of finding that pot of gold at the end of the rainbow. We are almost there, we are very close to it, but we are not quite there yet. We can do it all together if we heed the President's call for more cohesion.

Mr Chay Wai Chuen (Brickworks GRC): Mr Speaker, Sir, I wish to speak in support of the motion of thanks for the President's Address.

Sir, the President's Address has correctly identified one of the most glaring problems in our society, that of the ageing population. Closely tied to this is the problem of health care for the aged. It is reassuring to hear that the Government is looking into this problem now, although it is a problem more of the longer term. The President's Address mentioned that it will raise the Minimum Sum in the CPF gradually and will decide in the next few months which is the best way to do so. I think there is very little choice in this matter. People's life expectancy is longer these days and good public health has lengthened the people's life span. $36,000 may be able to buy an annuity for about $300 per month for perhaps 15 years, depending on the interest rate. However, that is very unlikely to provide a very decent livelihood at today's cost of living. Hence the amount for such a livelihood provision has to be higher. Whilst we can sort out the arithmetic and decide on the increase in the Minimum Sum, the section of the people who will be affected by this would be those who are currently working. For the other section of the people who have already retired long ago and who have limited savings, it is a struggle to make ends meet. Many of them, especially in the lower income bracket, cannot rely too much on their children to support them fully because their children also have families of their own, and these children also need to be provided at today's cost of living.

Sir, in my first speech in Parliament in January 1989 I had addressed this issue. I had also urged the Government to adopt policies which can allow our elderly to achieve more financial security and flexibility. At that time I had urged the Government to examine a reverse mortgage scheme for the elderly who own HDB flats. Two of my colleagues had also made the same point yesterday. Under this scheme, an elderly couple who own a HDB flat can reverse mortgage the flat for a stream of income payments by the HDB or a properly constituted re-financing body for a term period. In this way, the couple can still remain in their flat but at the end of the term period they would no more own their flat. In the meantime, they receive a stream of income for their livelihood. Then at the end of this term period, they can rent the flat from the HDB possibly.

Sir, this proposal was first made in the Howe Yoon Chong Report. I think there are many good suggestions in the Howe Yoon Chong Report on the Aged which we should study deeply for implementation. Unfortunately, it was torpedoed prematurely, and we all know the history of it.

I urge once again the Government to examine this policy. Many aged Singaporeans in HDB flats own only one asset - their flat. Some viable way can be found to liquidate this saving. This reverse mortgage proposal is much better than asking them to sell off their flats and move into rented ones. Over time, through this reverse mortgage instrument, the HDB can acquire back the flats for redevelopment or for rental. And the cycle of life savings for many Singaporeans can then be better deployed for their needs and the needs of society.

Dr Kanwaljit Soin (Nominated Member): Mr Speaker, Sir, I rise in support of the motion in the name of Mr Loh Meng See.

We should be proud to be Singaporeans. The unrivalled success of our tiny island nation has assured us a place in history. We can list all the advances we have made in our economic and material progress and these indicators continue to impress the rest of the world. The sceptics have been converted.

The President in his Address said:

'Our short term issues are well in hand. My Government's focus is therefore on long term policies to position ourselves for the next stage of nation building.'

It is therefore time for us again to look at ourselves and examine our ethos and our values and our responsibilities towards some long term trends in our country.

Mr Speaker, our supreme goal cannot just be the quantity of money we have, our GDP and our rate of economic growth. What should matter as well is the quality of our life and the morale of our society. We will have to address these long term concerns if we are to continue as a successful and cohesive society.

If we do not, crass materialism will take over resulting in the breakdown of our values of motivation, self-regulation and self-awareness. In the quest for material gains, there is the tendency to believe that nothing succeeds like excess. Lavish dinners, flashy new cars, expensive club memberships, branded goods and excessive consumerism cannot sustain for long the spirit of our people.

Unfortunately, at this stage, we and our youth seem to be vigorously aspiring only towards these material goals. Most of us try to achieve these with hard work. Others have already begun the downhill slide where the end justifies the means.

Let me give you the sorry example of some young women whose material cravings have persuaded them to offer sex for sale in order to sustain a high spending life. This was reported in our media. We also hear of some other young people who have been devoting their energy and time to making money single-mindedly at the stock market at the expense of their study and even work. Community and public service is the last thing on their mind. Who are the role models for these young men and women? People whose worth is measured in dollars and practically nothing else.

Economic success is of course of paramount importance to Singapore and has brought about considerable economic security, happiness and social development but the danger now, Mr Speaker, is to see most things in terms of only dollars and cents - we know the price of most things and the value of very few. The ethos of this world view was captured well by a Straits Times journalist under the caption: "No Money No Talk".

Well, we have to talk about this aspect of our lives now. We have to put the economic imperatives at the upper end of our scale of priorities but not as the raison d'etre of our lives. If we do so, then after the initial euphoria of monetary rewards, there will be a backlash. Remuneration alone cannot continue to motivate people and money cannot buy happiness. After a certain period, money can, if misapplied, kill a worker's desire to do his or her best. According to the work of dozens of social scientists, when we do something only for monetary reward, we tend to become less interested in what we are doing.

Besides our growing obsession with material success, there are other long term concerns that will affect the future of our nation and, Mr Speaker, I am going to address them under three headings: active citizenship, family values and old age security.

Active citizenship

The Prime Minister has expressed his concern over the reluctance of people to take up positions in the political arena. This is a serious worry. How do we overcome this? How do we get our young people to understand how our social and political system works and imbue in them the motivation and capacity to participate meaningfully and constructively in public affairs?

At present, among the young people there seems to be a combination of ignorance, apathy, and some cynicism about political participation and public service. This retreat from public service, Mr Speaker, is opening the way for a victory of self-centredness over a sense of community responsibility. An editorial in the Straits Times noted that "the brainy ones and the super achievers of today's generation, those the PAP wants in, feel no compulsion to enter public service." One can also detect the despair which a chairman of a Residents' Committee felt when he talked to the press on motivating young people for community affairs:

'I do not know how I can reach out to this group of people. Most do not even respond to our request for feedback.'

This may be because for the majority of young people, ignorance has led to apathy. After that, powerlessness sets in as young people feel that their views and needs are not being taken into account and they feel that there is nothing they can do about it.

One area of change will have to be our education policies which appear to stress narrow labour market requirements and underestimate the importance of a capacity for critical analysis of social and political issues. We are therefore ending up with a technologically trained but politically illiterate young citizenry.

The President voiced his concern when he said:

'Only the people can make sure that the government pursues prudent and responsible policies, by electing honest and competent Members of Parliament to form a good and clean government.'

Another way of encouraging active citizenship is by the strengthening of civil society. Some progress has been made - we have the full implementation of the NMP scheme, the registration of private think tanks and citizen groups and public debate in the media. We need to encourage more community-based organisations interested in social issues. We also have to carry out some surveys to assess the degree of understanding of Singapore's political process among young people in the community and take appropriate action.

At the level of secondary schools and junior colleges, we need to re-examine our civic and parliamentary education courses. In these courses, we should not be force-feeding students with facts but with the skills and understanding necessary for effective participation in society. I propose, Mr Speaker, that we have a "Youth Parliament" which could involve about 70 to 80 delegates from the junior colleges. These delegates could select party leaders, conduct party room meetings and debate Bills in this Chamber over two to three days. This event would give participants a valuable insight into parliamentary procedures and a further opportunity for young people to air their views on issues that they felt were vital and important to them. Subjects covered in the Bills could include motor vehicle licence age, ethnic integration, paternity leave, anti-smoking laws, compulsory community service for students, etc.

The Youth Parliament would promote involvement in the community and a heightening of awareness about people and their concerns. It would promote rational debate and a tolerance of other people's opinions. Most importantly, it would be an invaluable educational experience for young people who will one day have to elect honest and competent Members of Parliament.

Family values

Mr Speaker, we have talked endlessly about the importance of family and how it forms the basic building block of society. We have also talked about what we do not want in families, that is, divorce and single parents.

We have raised often the spectre of single mothers and the deleterious effects on society, eg, crime, unsocial behaviour, state dependency and the creation of an underclass. I think we should look at this problem of single parents more insightfully and analytically. The term "single parenthood" covers a variety of social situations - from the unmarried young mother to the middle class divorcee and the middle-aged widow. All these single parents cannot be tarnished with the same brush. It is the illegitimacy rate and the children born out of wedlock that give rise to the attendant culture of welfare dependency, crime and social despair. Many children in single parent families, for example, children brought up by widows often do better than those in two-parent families.

In Singapore, we have to ensure that children are not born out of wedlock. Fortunately, it is highly unlikely that we will go the way of some western countries with soaring illegitimacy rates because of the following reasons:

(1) Social stigma.

(2) Lack of welfare for these children and mothers.

(3) Non-qualification and therefore non-availability of HDB flats for women with illegitimate children. So where will these single parent families live?

(4) Availability of abortion unlike some other countries.

Let us, therefore, not get agitated with this phenomenon of single mothers with illegitimate children and worry that this will mushroom in Singapore.

However, we will continue to have some single mothers with children, caused either by the death of the spouse or by divorce, even if we institute measures to mend marriages and not to end marriages. In most divorce cases, the mothers want custody of the children because women tend to be more family-oriented. In these cases, the family composition has changed but it is still a family. Some of these families (about 4,000 in number) live below the minimum household expenditure, that is, a family of four living in a 1-room flat with a disposable income of $510. These families deserve a hand to help them to become self-reliant. Such subsidies should not be considered as hand-outs. These well-deserved subsidies could consist of:

(1) low cost childcare to enable the mothers to work;

(2) help in buying small HDB flats;

(3) arranging schemes for work to be done at home by these mothers who may be looking after the children and the aged at the same time; and,

(4) the Small Families Improvement Scheme should be extended to some deserving families where the fathers have deserted the family.

Now, let us look at another aspect of family values. In 1989, a survey of 2,115 Singaporean men by the Ministry of Health, the National University of Singapore and the World Health Organisation showed that one in 10 men had engaged in casual sex during the previous 12 months, mostly with prostitutes. Many of the men visiting prostitutes had unprotected sex.

In last year's Budget debate, Mrs Yu-Foo Yee Shoon brought up the issue of men venturing abroad for business and also having casual sex and even starting second families.

All these concerns need to be addressed as they have deleterious effects on the family. We should not just sweep them under the carpet and pretend that these problems do not exist. We need a coherent and consistent family policy which strengthens families and goes beyond maintaining the status quo. The President also mentioned demographic changes that have serious social and economic implications.

Mr Speaker, we will not be able to solve the problems of fewer marriages and low birth rates until and unless we accept and promote a new understanding of marriage as a more equal relationship. Some of the social research shows that the long-lasting marriages that are really happy and satisfying are the egalitarian ones, where both husband and wife share in the major decisions. The family is changing and it is important to allow for growth for every member of the family. Let us not build a family system which depends on the subordination of women. These families will not be strong and self-reliant and our daughters will reject marriage if that is the model forced upon them. Our daughters want marriages with interdependence between the husband and wife for mutual benefit of the family. Let us consult our daughters for their views on marriage.

A survey was done in Singapore in 1990. 90% of a representative sample of 1,464 women with secondary or higher education stated that the most desirable life situation for them was to be wives and mothers. For a modern society like Singapore, the result of this survey is a good indication that family values still prevail and, therefore, let us not make it difficult for these young women to enter marriage by insisting that the most desirable life situation for them is a subordinate role in that marriage. That is one reason why women who want to marry decide not to marry.

Questions asked about married life should not centre on whose responsibility it is to take care of the children or old parents, or whose entitlement it is to be given medical benefits for the children but, rather, on what are the needs of the children and the aged, and how a couple can best meet these needs.

The other vital area for strengthening the family and its values is the integration of work and family responsibilities. According to Japan's Youth Crime Department, fathers who spend long hours at work and who are regularly absent at dinner tables create problems for the family. Men then have to re-evaluate their position at work and at home. They must consider coming to the centre stage and seriously taking their roles as fathers and husbands. Simply designating them as "heads of households" is not going to change family values for the better. That is wishful thinking.

In last year's Budget debate, I made an appeal to the Prime Minister to initiate and institute a national strategy for the integration of work and family responsibilities. If we want strong and good family life to go hand in hand with our spectacular economic growth, then I request the Prime Minister to reconsider the appeal this year which happens to be the International Year of the Family.

Old Age Security

Now, Mr Speaker, I shall speak on old age security. According to the CPF Board, members retiring at 60 who have contributed continuously for their full working lives (which is about 35 years) at the rate of 40% of net wage can expect a retirement income of 20% to 40% of the last take-home pay, a property commensurate with their income level and health care under the Medisave scheme. This augurs well for the young generation and, therefore, we will not have to worry in the future for the young people who are in the labour force today.

However, for those of us who were over 20 in 1975 (and I am one of them), we will not be able to meet even the modest levels of retirement benefits estimated by the CPF Board. This is because before 1975, the CPF rate on net wage basis was below 40%. It has been estimated that in the year 2015, those over 20 in 1975 will constitute 0.6 million people which will add up to about 20% of the population.

Also, there is a gender difference in CPF balances. For women below 45 years of age in 1989, average balances were closer to that of their male counterparts. After the age of 45 onwards, males have nearly twice the CPF balance as compared to the women. For the present cohort of women aged 55 and over, they may face financial difficulties in old age, given the average low CPF balances they and their spouses have. This situation will become accentuated with time as women are expected to outlive their spouses by at least five to eight years on the average.

According to one estimate, Mr Speaker, in the year 2000, which is not too far away, 19% of men and 34% of women reaching 60 years of age will not have any CPF to depend on. A report by the Advisory Council on the Aged puts the figures much higher.

At the present time, according to one estimate, about 20% to 25% of the people in the labour force are not covered by the CPF scheme. A certain proportion of those not covered, that is, unpaid family workers, contract workers and some of the marginal hawkers are likely to be faced with inadequate resources to finance their old age. Thus, for the next 15 to 20 years, we will have an interim situation where old age security is not assured. This applies to the older men and women, the poor self-employed and home-based workers. We have to make provisions for this fairly serious social and economic situation. The recommendations that the Government should consider are:

(1) Compulsory gradual CPF contributions for all self-employed.

(2) Encouragement of home-makers (most of whom are women) to start CPF accounts in their own names to which their working relatives can contribute. The Minister for Labour has promised that he is agreeable to making this scheme known widely.

(3) The setting up of a Senior Citizens' Endowment Fund from the budget surplus. In my opinion, it is even more necessary than the Edusave account for each student. The old people of Singapore have literally contributed their sweat and toil to make this country successful and we are reaping the fruits of this success. Acknowledgement of their unselfish efforts and a little dose of filial piety make it mandatory that we should do something tangible for their old age. Thus, I suggest that all those over 65 should have a Senior Citizens' Endowment Fund started for them with annual contributions from the budget surplus. In 1992, only 46% of CPF members who withdrew their CPF at age 55 years had set aside the full Minimum Sum and this indicates the gravity of the situation for the present group of senior citizens. Also with these statistics, that is, only 46% had the full Minimum Sum, raising the Minimum Sum at this stage is not going to have a great deal of practical relevance until more people have built up bigger CPF balances.

Furthermore, with the present trend of longevity, there will be a significant increase in the proportion of those who are frail aged. Generally, the onset of frailty can be considered at age 75 or over and thus we have to consider extending MediShield cover to the aged until the end of their lives and not have a cut-off point as at present.

Mr Speaker, in conclusion, we have achieved a great deal in the 30 years since independence but we cannot rest on our laurels. The road ahead is even more challenging and this needs our combined efforts and commitment using our hands, minds and, especially, our hearts.

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

Singapore's economy has done well over the last 30 years. But there is no guarantee that Singapore's economy shall continue to grow as it has done before. The President in his Address has warned that:

"The international environment is becoming more competitive. Fast growth in the region means more opportunities but also formidable challenges. Countries with abundant land, low wages and hardworking, intelligent workers want to plug into the world economy."

Indeed, the challenge to Singapore shall be formidable, in particular, from China and then Vietnam. The people of China and Vietnam have great similarities in culture and believe in discipline, hard work and thrift to those in South Korea, Taiwan, Hong Kong and Singapore. Now that they have discarded their Communist system and embarked on the free market economy, there is no reason why they cannot catch up and even overtake those countries. Indeed, the challenge to Singapore shall be formidable and Singapore can rise to the occasion. But old tested methods, such as having a good infrastructure, stable government, attractive tax regime, are not enough. China and Vietnam's costs shall always be lower than that of Singapore. They have more abundant labour and land. Investors shall go to the places where they can make the most profit. In the future, Singapore may not be the favoured place to invest for foreign investors. They shall be looking towards China and Vietnam and other countries in the region. Singapore must ultimately fall back on its people to meet the challenge and earn the income for Singapore.

In this respect, Singapore must produce abundant intelligent risk takers, entrepreneurs and leaders in industry and business. I have contended in the past that under our present authoritarian style political system, it is difficult to produce the great numbers of intelligent risk takers, entrepreneurs and leaders in industry and business. Our society at the moment is too closed, too strict, too much fear and too much control.

The Government wants almost absolute control in every area of life in Singapore. The Government has made it a point that they must be seen to be the one who can take the initiative. The problem under the present system is that the Government wants almost absolute control in politics. It does not want the Opposition if it can help it. And if it can help it, it also does not want anyone to criticize its policies. The Government tells the people of Singapore: you can go on earning a living, a good living if you can, but do not interfere in politics.

Is this kind of policy good for Singapore? I say, no. This kind of policy creates an environment which does not encourage growth of any kind of leaders, whether it be political, in the economy or otherwise. The Government should allow people to speak up, especially those in the universities. It is only when people feel that they are not restrained in their minds that they can be more creative and can take the initiative and become entrepreneurs. It is not possible to tell the people, on the one hand, to close their minds to issues on politics and be very productive, creative and show initiative in business. Our human minds are not built that way. Either you allow people to think freely, to be creative and show initiative or not at all. I hope the Government will consider opening up the society a little bit more, have more democracy and freedom. We do need such an environment to nurture more abundant business leaders and entrepreneurs. Ultimately, it shall be the people who are creative, innovative, risk takers, leaders in business and industry and adventurous who shall keep the Singapore economy going at high rates of growth.

Under a more open society, I do not think that there shall be political instability. The people can be educated on the importance of nation building and to only elect good, honest men to be their political leaders.

I applaud the Government for finally recognising that sports is an important activity in our national life and must be substantially supported. I refer to the $10 million grant given by the Government and private bodies towards the Sports Excellence Programme.

Four years ago, when I was in the Sports Review Committee, I suggested that the Government contribute a sum of $4 million a year towards improving sports. But at that time, the Government was reluctant to support sports in a substantial way and that suggestion was not accepted. I am happy that there is a change of policy. With such good financial support, I hope athletes, the national associations, MINDEF, schools, parents and the public can pool together to produce more home-grown champions at the Asian Games and the Commonwealth Games upwards. The strategy must be to identify talent in our schools at a very early stage. Put some specialists and dedicated coach to nurture and train that talent to win a gold medal at the Asian or Commonwealth Games. Once that breakthrough is achieved and the psychological barrier is breached, other local athletes will quickly follow the example that has already been set. The important thing is to achieve that first breakthrough. Then subsequent tasks of winning at the Asian Games, Commonwealth Games or even the Olympics shall be more possible. I hope that day will come.

The Government's style has always been to tell the people of Singapore to do this or to do that. Recently, the Government encouraged Singaporeans to invest in the stock market. The NTUC has also taken an unprecedented step to get workers to take part in the very risky business of investing in the stock market. The stock markets of Singapore and Malaysia have over the last two days taken a sudden downturn. Since the Government is responsible for encouraging Singaporeans to go into the stock market, it not also has to bear some responsibility at this point of time, like the leaders across the Causeway, by telling the public that the fundamentals in the economy are sound and that there is no need to indulge in panic selling? The public announcement of Dr Mahathir has to some extent halted the downward slide of the stock market. The big investors and foreign syndicates do not need such announcement. They know exactly what they are doing. But many of the local small investors' savings may be wiped out by a sudden free fall of the stock market if it is left unchecked. I think if Singapore's economy and its fundamentals are perfectly sound, there is nothing wrong in the Government or one of its Ministers making such a public statement at this very crucial point of time when the stock market took a sudden tumble downwards. I should even say that the Government owes it to the hordes of small investors who have been encouraged by the Government to invest their savings in the stock market.

Mr Umar Abdul Hamid (Ang Mo Kio GRC): Mr Speaker, Sir, at the previous Opening of Parliament, I started my speech by reminding Mr Chiam See Tong about his duty as the unofficial Leader of the Opposition and the need to maintain his integrity as the Leader of the Opposition. I must admit that today he must have taken my heed and, in fact, he has spoken on some of the points which I would like to speak on. However, I have forgotten that today Mr Chiam is not the unofficial Leader of the Opposition, but Mr Ling is actually the unofficial Leader of the Opposition. Can I take this opportunity to again remind the unofficial Leader of the Opposition, Mr Ling, that he must take his elevation to the leadership role of the Opposition seriously and join in the debate. Otherwise Singaporeans will not be able to know his position or his views or his stand on the important issues facing Singapore and Government policies targeted at various long-term challenges.

Mr Speaker, Sir, I rise in support of the motion standing in the name of Mr Loh Meng See. I would like to take this opportunity to thank our first elected President for his Speech.

The content of his Speech reflects his vision for future Singapore. As we set our pace to move towards the next stage of nation building, we must prepare ourselves for future uncertainties and greater challenges. In solving our domestic, social, education and economic problems, we must not lose sight of the larger problems and opportunities surrounding us. The Asia-Pacific is said to be the next region with great economic potential. Singapore must position itself to capitalise on this potential by optimising our scarce resources to the fullest. If these scarce resources are not optimised to the fullest and diverted to solve only our short-term domestic problems, Singapore will face the consequence of losing its competitiveness vis-a-vis other regional countries.

Mr Speaker, Sir, one of the greatest challenges that Singapore has to face is the problems of our greying population. Something has to be done now. If not, the burden will be shouldered by the future generation. The extension of retirement age will help ease the weight of manpower exiting the job market and the bringing in of foreign talent will help replenish the number that has left the job market. We must at least maintain, if not expand, the steady state of our manpower level in order to move forward.

The proposal to urge Singaporeans to set aside enough for old age is a laudable one. Singaporeans must learn to ensure their own financial independence when they retire. An appropriate sum of money must be kept in the CPF for their old age. Though there is no strong disagreement from the younger generation to support the elder citizens, it should not be taken for granted. I have the privilege of sitting in the National Youth Council and I also have the privilege of meeting some of the young people. I would like to inform this House that the younger people today do not resent supporting the older people. But the question is how long should they shoulder this burden?

Moving on to the health care system, civil servants are given three options - the MSO, the CCS and the CPW. In view of the differential pay rise which is given to the various divisions in Government service, I would like to propose that various levels in the civil service be given various options. For those in the Superscale and above, they should only take MSO, while those in Division I should only be given the option of MSO or the CCS, while those in Division II and below should be given the option of the MSO, CCS or the CPW. The reason is that the differential pay rise for those in the Superscale is relatively higher in terms of absolute number as compared to those in Division II and below. So I would suggest that those in Division I and above set the example by either opting for the MSO or CCS.

The second thing which I would like to point out is that I remember vaguely in the CRC Report that one of the proposals made was that the various Ministries or Government bodies should coordinate future increase of fees. But I am sad to say that such a proposal has not been carried out by the various Ministries because recently, before the introduction of GST, there seems to be a common behaviour among the Ministries to increase fees, namely, TV licence by SBC, and to a certain extent, I was told by some of my constituents that the price for a cup of coffee has been increased by 10 cents. Although this has got nothing to do with the Ministries, the shopowners have blamed that it is because of the increase on various fees by the Government that has impelled them to increase the price of a cup of coffee by 10 cents. So I hope something can be done to ensure the CRC proposal is carried out and that there is proper coordination among the Ministries and Government bodies on future increases of fees.

The last point which I would like to bring up is on the training of older workers and women who had previously stopped working to have children. I would like to inform the House that the Skills Development Fund is depleting and replenishing must be carried out soon to cater to the bigger training needs of workers. If nothing is done now, the Fund would be used up within less than five years and it would not be enough to cater to the needs of our workers. I would like to suggest that the contribution to the SDF Scheme be raised from $750 to $1,000 so that more can be contributed to our SDF.

With that, I support the motion.

Mr Bernard Chen (Brickworks GRC): Mr Speaker, Sir, I join my colleagues in expressing my thanks to the President for the Speech which he delivered on behalf of the Government at the Opening of the Second Session of this Parliament. It is of historical significance that it is the first speech made by a President elected by the people.

Innumerable policies spanning a wide range of subjects and issues have been evolved and implemented in the past 29 years since the People's Action Party Government assumed power in 1965. In each Presidential Address, the respective Cabinet had presented policies and proposals for consideration of Parliament. Invariably, they have been successfully implemented. As a result of the targets achieved, Singapore has been able to record consistent economic growth which has led to sustained improvement in the standard of living of all Singaporeans.

If we were to examine the evolution of these policies and measures over the years, we could discern changes in the types of policies as well as the style of presentation to the people. More important, we would be able to see how Singaporeans reacted to the changes.

In the late 60s and 70s, many of the policies were of the "bread and butter" types. We were striving to provide the basic necessities in housing, education and health. We also spent considerable efforts to build up our defence capability in the midst of regional uncertainty and instability. To finance all these massive spending programmes, we pushed relentlessly for high economic growth, paying special attention to maintaining political stability and industrial peace and harmony. We were able to achieve most of our goals mainly because we had no other alternatives. It was a "do or die" situation. The Government of the day was able to carry the people through by explaining the imperatives. When our people's stomachs are not full, they are less inclined to argue the merits of measures as long as they were satisfied that all would come good in the end. The Government was also able to convince the people by its track record that it meant what it said. The results speak for themselves. Singapore stands out in the region as a place that good things can happen and difficult problems can be solved.

As we enter the 90s, the journey towards sustained growth has become more arduous. Increasingly, policies are becoming more complicated. Trade-offs have become more frequent. We have to pay a price for whatever we want to do. Worse, the price is becoming heavier. Take the example of regionalisation. We had spent the better part of the last two decades promoting investments at home and operate overseas businesses from our home base in Singapore. However, there comes a point of saturation and we are all being forced to venture abroad to find out not only markets but also employment opportunities. Regionalisation does not only mean that we move out of Singapore. It means that we have to work outside of Singapore to create an external wing. It requires a change of life styles and habits that we are not used to in the past. This attitudinal change is difficult to achieve, given the relative good times that we had in the past in Singapore. The increasing risks of working abroad also mean that failure rates will be high and Singaporeans are not used to accepting failures. They in fact frown on them. Those of us who work in companies with a stringent board of directors will attest to this fact. As a result, less people are willing to venture out. But go out we must, if we are to survive in this competitive world.

Another manifestation of the increasing complexity of policy is our car ownership restraint measures. We all agree that there is a limit to which we can allow the car population to grow. We do not want to wind up like Bangkok. Hence, we have high car taxes and exorbitant COEs. Despite the vast sums of money spent on roads, and the investment in MRT and the Electronic Road Pricing Programme, we are likely to see traffic congestion for a long time to come. What is the answer? Cheaper cars and more congestion or more expensive cars and smoother traffic. We can only choose one option and in each option, there is a heavy price to pay.

A third example is health costs. Our population is ageing. Look around the Chamber and you will find that many of the MPs are more than half-way through their lives. Some of us are more than three-quarters. We are going to get sick more often. Our illnesses will become more serious as our bodies experience more wear and tear. There is no limit to the level of health care that we can reach. The only constraint is our ability to pay. The problem is that this ability to pay varies among Singaporeans. Subsidies just mean that someone who is more well off pay for those who are not. There comes a time when everyone's pockets will be squeezed when Government has to increase taxes to finance these subsidies. Hence, the Government has said that those who can afford should as far as possible pay for their own medical care. For Singaporeans who are unfortunate enough not to be able to pay, the Government will look after them. Again, there is a substantial trade-off here. There can never be free medical care without someone else paying for it.

We can go on citing more examples to illustrate how complex our problems have become and the increasing trade-offs that we have to accept in order to fulfil the long term objectives of our policies. If we look back to the 60s and 70s, the Government did not seem to have much difficulty in convincing the people that the tough policies were necessary. What was not obvious is that considerable ground work was done by the Ministers. Beginning with the Prime Minister, Ministers, down to the MPs, they explained the policies and carried the people along each step of the way. The job was not easy as the people's political awareness was not as keen as today. One advantage was that the people had faith in the Government's ability to go through with the policies for the benefit of Singapore.

The situation today is vastly different. We are no longer in a "life and death" situation. In fact, we are doing rather well. Our people are becoming more discerning in their political outlook. Worse, many of them do not want to pay the price. They want to participate and do not want to blindly follow the Government. In other words, it is going to be a harder job to convince them of the need of increasingly complex policies for which they have to pay a price.

In the recent past, several major policies have come to the fore. The proposed GST system, basic health care, COE and even Telecom share flotation have generated much heat, if not confusion. Despite the elaborate explanation in the mass media and seminars held to explain the policies, the people do not seem to be enlightened. I heard of one old man approaching a bank with a bag of money and he told the bank officer that he wanted to buy the A, B, C and D Telecom shares! Others took the opportunity to increase prices in multiples above the 3% GST which has yet to be implemented. Confusion and rumours are symptoms indicating that the people may not have understood fully the implications of the policies. They may also point to deficiencies of policy implementation. For example, the limited ALS, which is $2, or the whole day ALS, which is $3. Would it not have been easier to have a flat rate for the whole day, rather than wondering at what time we go into the CBD and how much we have got to pay.

We can conclude that more explanation is necessary. The question is how do we go about doing it. As Dr Henry Kissinger said at the recent forum, the American people have become a nation of viewers rather than readers. The mass media has turned decidedly to visual means via the television and the radio. I am afraid Singaporeans are going the same way. One can in fact say that Singaporeans do not read much these days. We would therefore have to reorientate our approach to the people through TV and radio, apart from going to the ground to meet them. The President of the United States has regular radio talk shows where he would even take questions from listeners.

One interesting fact is that the Government Cabinet has also undergone a dramatic shift. In the present Cabinet, only two Ministers, the Prime Minister and the Senior Minister were appointed before 1980. By July this year, when Dr Yeo Ning Hong leaves the Cabinet, there will only be six Ministers appointed in the decade of the 1980s, and half of them were appointed after 1987. Four Ministers were appointed between 1991 and 1993, and two Acting Ministers were appointed at the beginning of this year. I have full respect for all the young Ministers' ability to handle their Ministries without much difficulties. But they will have to work much harder than their predecessors who have more years behind them to explain to the people their Ministries' policies, convince them of the need and carry them through implementation. If, in the implementation of major policies, the Ministers can manage to minimise the confusion and the numerous interpretations these policies generate, then they would have succeeded to carry the people with them.

To illustrate this point, I could remember when I was working in the Economic Planning Unit in the Ministry of Finance in 1974, we had to prepare the first Annual Economic Survey to accompany the Budget Statement to be delivered by the late Minister for Finance. We came up with a 120-page document, very detailed in economic explanation, some will call them jargon, and sent it to the Prime Minister for approval. Back came the reply the next day, too long. The second draft went in at 80 pages. The Prime Minister sent the draft without looking at it. "Too long," he said. The third draft was reduced to 60 pages. The Prime Minister sent the draft back and said, "Give you one last chance to shape it up", three days before the Budget Statement. He said we should write it so that even an "A" level student can understand it, because that is what the Survey is for. If the majority of the people do not understand what it is all about, the whole exercise would have been futile. The final survey went in. It was published and was reduced to 35 pages in simple layman's language.

I have never forgotten the Prime Minister's advice to this day. Our Ministers can take some lessons in this regard. The best of policies will fall by the wayside if the people do not see the need and therefore refuse to accept them as necessary and good for them and for the country.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.00 pm.

Sitting accordingly suspended at 2.00 pm until 3.00 pm. Sitting resumed at 3.00 pm

[Mr Speaker in the Chair]

Debate resumed.

Mr Lau Ping Sum (Ang Mo Kio GRC): Mr Speaker, Sir, I rise to support the motion moved by Mr Loh Meng See thanking the President for his Address.

In his Speech, the President pointed out that in economics our major thrust was to venture abroad and develop trade and investment links with neighbouring countries. He referred to the fact that we were familiar with both East and West, with the region as well as the developed countries. This is indeed a strength we should nurture for maximum advantage.

At the same time, it is true that a number of Singaporeans are more conversant with the ideas and institutions of the West than our own cultural heritage. Their perception of Asian traditions may have been coloured by the Victorian, Euro-centric view that China and India were down-and-out civilisations, cowering in servitude to the ascendant West. When Confucianism was taught in the schools a few years ago, there were serious reservations about its relevance. Perhaps they saw Confucianism as a straitlaced and blinkered rejection of modernity instead of a means to reconcile tradition and change and, more importantly, as a source of strength which contributed to the dynamism and vitality of the economies of East Asia.

A number of Singaporeans until recently had questioned the need to give learning of our mother tongues due emphasis. It was only after China opened up its economy that Singaporeans realised that vast opportunities existed in that country. For the businessmen and officials who have a solid foundation in Mandarin, they can better understand the nuances and subtle meanings of the words and phrases used by their counterparts in China. Even the best interpreter can only attempt a feeble translation of the expression into English.

Whilst most young Singaporeans are able to speak some English and their mother tongue, our friends across the Causeway, the Malaysians, in some cases, are effectively trilingual - English, Malay and Mandarin. At present, some of our secondary pupils take German and French as a third language. I hope the Minister for Education will encourage our pupils to take up Malay or perhaps the regional languages like Vietnamese and Thai, or perhaps a higher level of Chinese language as well, for this will help Singapore as we expand trade and investment links in the region. A knowledge of the languages and cultures of these countries will be a tremendous advantage as we venture abroad.

The President stressed the need for Singapore to master new technologies and promote key industries in the manufacturing sector. As we develop as a knowledge and services centre, the productivity of our knowledge and services workers must be raised. In manufacturing, working smarter is one key to increased productivity. But in knowledge and services work, it is the key. The greatest productivity gains come from not only re-defining the tasks but also from eliminating unnecessary tasks. Call it what you will, scientific management, system engineering, business process re-engineering or office automation, working smarter has been behind the productivity explosion. Are our information and services workers spending too much time on unnecessary tasks? Can some of these be eliminated? Re-engineers start from the future and work backward, unconstrained by the existing methods and boundaries. The aim is to achieve major gains in cost, service or time.

When Marx predicted the inevitability of the proletariat revolution, it seemed reasonable to many people. What defeated the Marxist prognostication was the rising productivity of the working class with the use of better tools and technologies. The working class has become the middle class in income and status. Productivity gains per se are not the only benefits. The self-respect and pride of the workers will be raised.

Mr Speaker, Sir, whilst we criticise rightly the West for its flawed welfare policies, we should be mindful of the fact that there is a great deal we can learn from certain aspects of western society. In Melbourne, for example, I understand that the garbage collector only comes by twice a week. Bottles are collected only once a week. But each household would carefully arrange its garbage bags neatly. Bottles would be collected and taken out once a week. They do not need hefty fines to keep their suburbs clean and tidy. Yet in Singapore it is sad to say that it is not uncommon to see old furniture and boxes left next to the lifts of HDB flats despite many reminders to residents to bring them to the ground floor for disposal. Littering still occurs. Road bullies have to be dealt with severely to protect innocent motorists.

Mr Speaker, Sir, although we have achieved remarkable economic growth in the last 30 years, we have some way to go before we can be considered a gracious people, a society of distinction. It is the social responsibility of all Singaporeans and not just the Ministry of Community Development to encourage good behaviour and civic-mindedness amongst all Singaporeans. 3.08 pm

The Senior Minister, Prime Minister's Office (Mr Lee Kuan Yew): Mr Speaker, Sir, in the last three years the Prime Minister and his younger colleagues have found their stride. This Government has found its rhythm and is keeping up a steady pace of economic growth and social change.

Basic policies for health and education are in place. If we make adjustments of fees yearly following each NWC increase, we will avoid big increases every three or four years. However, people continually want better quality health and education services. This requires better qualified and so better paid health and education workers. Therefore people will have to pay more for the higher cost of better health and education services.

Other items are in place, like GST which is set for April 1994. It will not cause lower income families to pay more because of the offsets already worked out. Those in the upper income brackets will get their income tax reduced and Singapore's economy will be better placed to meet future challenges. Members will have noticed that even the People's Republic of China has decided on GST or VAT (value-added tax) at 17%. Governments the world over recognise that they need this most cost-effective system.

Our aging population with low birth rates will mean a slower growing economy in 15 to 20 years' time. We will not have enough young people to keep both the economy vibrant and to take care of the old. We have to begin solving this now by getting families who can afford it to have more than two children, and by selective immigration of people who can contribute to our economy, and by increasing also the CPF Minimum Sum.

The significant change that will take place in the next five to 10 years will be the wealth or the assets of individual Singaporeans. There are the Upgrading and Interim Upgrading Programmes for HDB blocks and these should be in full swing in two years. The Government's asset enhancement programme which the Prime Minister announced last August as our way forward, our road to competitiveness and high growth and fair shares, and not welfare, means that before April 1997, when this Parliament is to end, every Singaporean will have increased his assets through higher values of his homes, bigger POSB and CPF accounts, more shares purchased with his CPF, more share issues, PUB, PSA, SMRT, at special discounts.

Of course, one nagging issue is the rising cost of COEs. If, as is likely, we achieve 6-8% growth per annum for the next three years, and incomes increase at the same rate, then by 1996, COEs at $60,000 would look quite reasonable. Three percent is the maximum increase at the moment we can have in any one year without jamming up the roads. Therefore the increase in the number of COEs is 3%; incomes up 8%, which means, as has been for the last two years, a three-fold increase in demand and a one-fold increase in supply. More and more persons who did not expect to own a car but with the increased incomes and rise in asset values, whether of HDB homes or CPF-bought shares, it means more and more people want to buy a car, and so prices of COEs must go up, because more people want to buy cars than there are COEs.

The position can be eased but it cannot be completely solved. We can improve the road traffic system and the traffic control; we can fine-tune the system like converting unused COEs for motorcycles into COEs for cars. We have just started the whole day Area Licensing Scheme (ALS) in the Central Business District and it has shown promise. We are studying the possibility of introducing the ALS to other congested areas like Jurong, and in three to four years we should start to install the electronic road pricing to relieve congestion along specific roads at peak hours. These measures taken together will make it possible to increase the number of COEs available, but the increase is unlikely to be enough to satisfy total demand.

One hallmark of a good government is its willingness to tackle problems which are over the horizon, before they become large and intractable, which is one reason why we are dealing with problems of the future. They could be postponed but at a price. But when it becomes impossible to avoid them, it also becomes impossible to solve them without grievous harm to the electorate and the Government. One important instrument of good government is the high standards it must have in the civil service. In an era of rapid growth, private sector wages inevitably move in tandem with the economy and Government wages inevitably have lagged behind.

I have chosen to speak on this debate because the history of many of these problems lies in the past and their solutions were initiated in the past. The Public Service Division has established private sector benchmarks for the pay of civil servants in each major service, eg, the professional services, the executive service, teachers and the clerical service. We will peg the pay of Permanent Secretaries to private sector benchmarks, for instance, Superscale `C' will receive 70% of the average income of the second man in each of the six major groups of professionals, bankers, lawyers, engineers, accountants, MNC manufacturers and local manufacturers. The Prime Minister and his colleagues are studying the matter to decide the appropriate formula.

This is not a new development. For many years, the Government has moved away from deferred benefits, like pensions and non-money benefits, like housing, quarters, leave pay, and so on, in order to match the market. As early as 1972, I agreed with Hon Sui Sen, then the Finance Minister, that we had to replace pensions with CPF for Division III and IV officers. Otherwise, we could not match the market. And if we match the market, then the pension is completely not in proportion with the services being rendered. He also urged me to convert Division I and II officers into CPF. I disagreed. I did not want to upset a long established system of keeping public officers in the service for long periods of time until pensionable age is reached. But by 1985, some 13 years later, the trend was irresistible and I had to agree. I decided I was old-fashioned and he was facing realities of the market. Because he was in charge of Finance, he had to meet the establishment requirements and the recruitment just was not there. I decided the tide was not going to change for a very long time. The younger generation then already wanted the rewards of the private sector. They were not interested in pensions and health benefits 20-30 years into the future. But I decided it was necessary to continue pensions for core officers of key services, where it was critical to have continuity and expertise and where it is difficult to induct talent from the private sector in mid-career to make up for officers who leave.

This recent pay revision, together with the medical benefits revision, is another major step towards competitive market rates. It was a trend which I had to agree to in response to a different attitude, and expectations of that generation starting as early as 1972. I know many civil servants, including my daughter and my younger son who have put in some 16 and 18 years of service already, are not happy that their medical benefits are going to be altered, and that they now have to opt, either to stay on the old scale and medical benefits, or take the new pay scales and co-pay a larger share of their medical expenses than before. Everyone, and I, if I were a young man in the service, would want the new pay scales and old medical benefits. But whether the offer is fair or not will be tested by the market. If it is unfair and not competitive, recruitment will go down, resignations will go up and there is no escape for the Government. We either offer something competitive or talent drifts out.

We have decided that civil service salaries have to match market attitudes, which means immediate cash benefits, not deferred substantial service benefits in the future. Changes in Singapore's economy and the employment market compel us to adjust our policies. But to be competitive, the Government cannot freeze in perpetuity every single component of its benefits package. Morally, the civil servants can expect the standard of medical services prevailing at the time when they joined the service, that is, the kind of hospital, doctors, equipment available. The problem is that the Government cannot stay on these standards and not upgrade. Upgrading, however, requires adjustments, increased costs and, if we are to prevent wastage, co-payments.

Furthermore, the old civil service medical benefits were introduced at a time - this predates me and it goes back to British days - when civil service salaries were low and they did not have to compete with the market because the largest single employer in Singapore was the Government, and the Government set the pace. They paid low wages and they gave benefits in kind, eg, subsidised quarters, transport, medical services, and even home leave pay for expatriates back to either Britain or India. Senior officers were given servants, drivers and leave passage.

When we move towards market rates, we cannot move towards cash parity and also keep these benefits. They have to be trimmed. More important, benefits in kind, we know in this very cost-conscious age, lead to distortions and overuse. 16% of admissions to Class A beds in restructured and Government hospitals are by those with CSC cards, ie, civil servants and pensioners, and they are only 4% of that income group and they use 16% of the beds. In other words, because the payment has been arranged in this way, the user is four times that of the average population. It does not make sense.

The changes that the Government is proposing are not going to save the Government any money. What is different is that the money, instead of being paid to the hospitals, will be paid individually to each officer and he decides whether he wants to go into Class A or B1, or whether he needs to go to hospital at all for such a minor complaint. It is his cash benefit. This will avoid the buffet syndrome which everybody knows. This is what happens at restaurants when somebody has paid for, or believes he has earned it, and he can take whatever he likes, often wastefully.

The Government recognises that serving officers have certain expectations of the medical benefits they and their dependants will receive, especially after retirement. The change is, therefore, smaller for serving officers than for new recruits. Serving officers will continue to receive medical benefits in kind, but with a higher co-payment. New recruits will be completely on a new scheme. They will get an additional 1% of Medisave, out of which they can buy medical insurance (MediShield) if they wish, and which will cover them for catastrophic illnesses. And the Health Ministry is working out MediShield II which will ensure that, if you buy MediShield I and MediShield II, you will be as well covered as if the old medical benefits obtained. They must, of course, bear all their in-patient medical expenses either through MediShield or Medisave or the new MediShield II. The Government will co-pay part of their outpatient expenses (including visits to private GPs) but only up to a maximum of $350 per annum. The figures are not capricious, they are not arbitrary. It has been worked out on what the average person would spend and it is revenue-neutral. We neither spend more nor do we save more. We have just given what we have been paying to the hospitals, to the Government officers individually.

Retired officers, in other words, pensioners are not affected by these changes.

To set an example, the President, the Prime Minister and Cabinet Ministers are being treated not like serving officers. They can, in all fairness, say that they are serving officers and therefore only newly-appointed Ministers will face this dilemma. They have moved themselves into the category of new recruits, therefore new scheme. They will no longer be entitled to any medical benefits, but will receive the additional 1% of Medisave, a maximum of $70 per month, like other new recruits.

The Public Service Division is satisfied that the salary revision coupled with the new medical benefits scheme leaves the vast majority of civil servants better off than before. But some serving officers believe that despite the salary revision, they are worse off with the new medical benefits than under the old terms. Therefore, although the Government is under no obligation to do so, PSD has agreed to allow civil servants the choice of staying on the old salary scheme plus the old medical benefits scheme. These civil servants will receive future salary revisions, like other officers, but they cannot expect the same increases as those who have converted to the new medical benefits scheme because they will receive more medical benefits than those on the new schemes. As I have said, the final test is the market. A wrong decision must mean resignations plus low recruitment.

Mr Speaker, Sir, a younger generation of leaders has taken charge of the Government without any gears crashing. They are taking the PAP Government into its 35th year and as honest and effective as it was 20-30 years ago. This is no mean achievement. In Britain, after only 14 years of Conservative Government, the media and the opinion-makers are bored with the Conservatives, whose Ministers they dismiss as tired and worn out. I was listening to BBC at lunch time and they were quoting what the newspapers were saying about the latest rumpus, not only the sexual mores not living up to a return to basics, but the rigging, or the contrived selling of council houses in Westminster in order to make sure that the voters are Tory and that they will have Tory seats.

But it is not only in the West that governments get tired and tainted. In Asia, once revolutionary governments, like those in China and Vietnam, are also bedevilled by corruption and nepotism. And these are men who led very tumultuous revolutions and are still alive and in charge. What is perplexing is that the first generation Communist revolutionaries, men whose dedication and sacrifice were never in doubt, are still alive and in charge, some of them have allowed their children to grow up undisciplined. They use their powerful connections for personal gains and, worse, are unable to keep the system from becoming tacky.