ANNUAL BUDGET STATEMENT

Order read for Resumption of Debate on Question [1st March, 1995],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 1995 to 31st March, 1996." - [Minister for Finance].

Question again proposed.

Dr Ow Chin Hock (Leng Kee): Mr Speaker, Sir, I support the motion standing in the name of the Minister for Finance.

The Feedback Unit held a dialogue session on 7th March 1995. Let me summarize the main points raised in the session: (a) Most participants were happy with the personal income tax rebate, HDB rental and service and conservancy (S&C) rebates and the CPF top-up; (b) There was no objection to the increase in water conservation tax, although it was suggested that the minimum 20 cubic metres of water consumption level should be adjusted according to the household size; (c) Representatives from the Chambers of Commerce and other business associations were disappointed because there was no cut in corporate tax rate and no tax incentive to small and medium-sized enterprises (SMEs). The retail sector is facing some difficulties; (d) SMEs also requested for incentives and assistance from the Government, the suggestions ranged from training of sole proprietors to setting up of a research centre; (e) Most participants also realised the importance of training and retraining of workers; and (f) Other participants also expressed their concerns about the high expectation, including the expectation from the Minister for Finance, to hand out goodies every year in the Budget Statement, and stressed the importance to inculcate in young Singaporeans moral values. Sir, our GPC has met the resource panel. We will be raising some of these issues and other matters in this debate and in the Committee of Supply. Let me now focus on three main issues.

First, business costs. The high expectation, particularly among businesses, was due to the excellent performance of our economy in the last two years, and another reason was that many also expected 1995 to be an Election year. Apart from disappointment over no tax concessions, businesses are also concerned with the rising business cost. This is a more valid concern as a cut in corporate tax rate benefits only profitable companies whereas rising costs affect all businesses. While the unit labour cost for the whole economy rose by only 1.9% last year due to fairly strong labour productivity growth, other costs such as rent and the foreign workers levy continue to rise. The cut in property tax by 2% point is welcome, but businesses are concerned that the valuation of properties will be adjusted upwards. The Minister for Finance has urged landlords to share the tax savings with their tenants but businesses wonder whether JTC and HDB will do so. Sir, rising domestic costs will erode our economic competitiveness. May I ask the Minister: if the economy is over-heating, where are the coolants?

Second, water consumption. Among all tax changes, the increase in water conservation tax by 5 percentage points is most significant. This increase sends a signal to remind Singaporeans that water is precious. If Singaporeans do not make an effort to conserve water now, they will face even more painful measures in future. There were some concerns expressed about the impact of the increase in water conservation tax on low-income households, particularly those with more family members. I suggest that the Minister for Finance work out the additional tax burden of different households living in 1- to 5-room flats, based on the water consumption patterns of these households. I believe the additional tax burden of water conservation will be more than offset by the savings in personal income tax, HDB rental and S&C rebates.

Sir, I have an amendment in the Committee of Supply on the Ministry of Trade and Industry. The Minister for Trade and Industry may also want to give an analysis on water consumption by domestic users by different types of households and non-domestic users in terms of industries and activities over a period of time.

I also suggest that MTI and PUB launch another public education campaign to encourage Singaporeans to conserve water. The previous public campaign was a success. Sir, you may recall the slogan "Every Drop Counts" and the cartoon character Bo-Bo. I think this slogan and the cartoon character are still vivid in the minds of those Singaporeans who are above 35 years old.

Another suggestion is that PUB should give more information on the supply side of water, for example, the full capacity of the reservoirs, water work projects and the long-term plan to maintain water supply including desalination plant and its cost. This will help Singaporeans to have a better understanding of the current and future situations on the demand and supply of water.

Mr Chiam See Tong was quoted as saying "at the moment, there is really no danger of shortage of water as in the past. I think we have got the local reserves in place, and actually the alarm bells have not sounded yet." [The Straits Times, 2nd March 1995.] I am disappointed with Mr Chiam's reaction. I think he is wrong. He is learning the Chinese language. Perhaps he should learn two Chinese proverbs: wei yu chou mou [ ] and lin ke jue jing [ ]. Wei yu chou mou [ ] simply means save for a rainy day'. And ling ke jue jing [] means dig a well only when you are thirsty'. Water consumption is a national issue concerning all Singaporeans, now and the future. It also reflects our vulnerability. All Singaporeans should take this long-term issue seriously. I am glad that the Prime Minister chose to discuss this issue openly. Sometimes it is desirable for the Government to share its worries and concerns with our citizens.

Third, long-term competitiveness. More important than tax changes is the long-term competitiveness of our economy. Last year, for the first time, the World Economic Competitiveness Report presented one consolidated ranking of the competitiveness of all the 44 countries or areas, and ranked Singapore Number 2 in terms of overall competitiveness, second only to the United States. We should be very happy with this assessment. However, the question is whether we can sustain our competitive edge in the face of global competition.

The emergence of large Asian economies such as China, India and Indonesia has intensified the competition for capital and markets. Capital has no national boundaries; it flows to places and projects with higher returns. Ample supply of labour and land in these large Asian economies offers low cost production bases. Their large domestic markets are added advantages in attracting foreign investments. This creates a capital diversion effect. Further, products from these countries are exported and they compete with our products in the international markets. All this means that unless we can constantly maintain our competitive edge and upgrade our products, jobs will be lost. The threat is particularly serious for unskilled workers as labour in these large Asian economies is much cheaper.

One key response to this challenge is manpower development. As the Minister reported in his Budget Statement, Singapore has invested heavily in education, training and retraining. Manpower development will help to maintain our competitiveness in three ways:

(a) attract foreign investments with higher level of technology to Singapore;

(b) raise labour productivity to ensure that our products can compete effectively in international markets; and

(c) carry out R&D activities and management restructuring benefitting both domestic operations and ventures abroad.

The heavy investment in education and training has raised the proportion of young Singaporeans going into post-secondary education from 19% in 1980 to 71% in 1994, and the aim is to raise this proportion further to 85% by the year 2000. The entry of each cohort of better educated, better trained young Singaporeans will raise the education profile of our workforce. However, as the backlog of less educated workers remains large, 53% of the workers had primary or lower education in 1984, the overall quality of our workforce cannot be upgraded too rapidly. Greater efforts must be put on retraining of existing workers. Many workers are not inclined to go for retraining because of inertia and also because they have to forgo part of their already low income during training. Some employers are also reluctant to train their workers because these workers may job hop after training.

Retraining of existing workers, particularly those with lower skills, is important. These workers should not allow the present tight labour market to blur the potential danger of unemployment in view of the keen global competition. Government, employers, trade unions and workers themselves must put up a concerted effort in retraining. In this context, may I ask the Minister for Finance whether he will consider channelling part of the collection of the foreign workers levy to enlarge the resources of the Skills Development Fund so as to provide more incentives and programmes, particularly on-the-job training.

Sir, increasing the proportion of young Singaporeans going into post-secondary education will no doubt enhance our economic competitiveness. However, at the same time, it will put pressure on the second challenge, ie, of Singapore becoming a more middle-class society. Even if we assume the aspirations for material well-being of each successive cohort of better educated young Singaporeans remain unchanged, the sheer increase in the number of such middle-class members will mean higher demands for properties and cars which will be increasingly difficult to meet as our land area is finite.

I agree with the Minister for Finance that Singaporeans should take the quality of life as a package, including a vibrant arts scene, a safe home, and efficient amenities, and not just material rewards such as a car and landed property. To do so, the Minister himself should be prepared to allocate bigger budgets for the arts and sports. More importantly, we should instil a sense of belonging and inculcate moral and family values among Singaporeans from young. This will help the more successful Singaporeans to adjust their aspirations for a better life to a more realistic level as defined by Singapore's long-term realities and constraints, and also to develop a sense of obligation to help the less successful fellow citizens. Only then can we meet the future challenges, and build a cohesive and gracious society.

Mr Ling How Doong (Bukit Gombak): Mr Speaker, Sir, this year's Budget provides only about 1.2% of the GDP for health care cost. To me, this is too little. Recently, according to the World Bank's ranking, Singapore is ranked one of the 10 richest countries in the world. Out of these 10 richest countries in the world, we have a number of countries like Hong Kong and Japan. Hong Kong is providing about 5.7% of its GDP towards health care cost. Japan is providing 6.5%. Of course, the United States is exorbitant, 12.7%, and Germany, 8%. But we are only making a provision of 1.2% of the GDP for health care. This is clearly way, way below what the country can afford to provide. Even among those countries which were not within these 10 countries, like Malaysia, 3% of the GDP was given for health care.

I am saying that it is not too much to ask that the percentage point be increased by between 1% and 2%. Instead of 1.2%, it probably should be increased to 2.8% or 3%.

Government should do more for the needy and the poor and also look after the welfare of the geriatric citizens of Singapore. And we have the chronic prolonged illness among us. The Government should provide more to look after this unfortunate lot. As it is now, we could look at the Government hospitals and the private hospitals. If one goes to a Government A&E department as an outpatient, he pays $25. This is excluding medicine. And if one goes to a polyclinic, he pays $7 per visit and this is also excluding medicine. If one adds the cost of medicine in the polyclinic, he pays about $12. But if he goes to a private clinic, he pays about $14. In terms of market price, one can say that for the Government hospital, you pay about $2-$3 less. But one must not forget that the profit aspect of a private clinic has not been factored in. Therefore, in this respect, the Government, in fact, should reduce this to reflect more equitable fees and charges for the poor and the needy.

Also, in respect of ward charges like A class ward charges, the difference is around $10-$20 between the private hospital and Government hospital. Here again, one has not factored in the profit that a private hospital makes. Therefore, in health care, the Government should not adopt a profit-oriented and cost recovery approach. The Government should not adopt this approach. Government should consider comparing with the fees and charges of private hospitals and clinics and adjust them accordingly.

The Government should consider the fees and charges paid by those with chronic, prolonged illness and the geriatric patients to be GST-exempt. My understanding is that when kidney patients attend dialysis treatment, they have to pay GST. Some of these patients, even if they go to the National Kidney Foundation, have to pay about $600, and to a lot of sole breadwinner Singaporeans, even with an income of $1,500, they are not able to cater to these high charges and fees for their dialysis treatment. The Government should consider all these things.

Recently, I read in the newspaper that in Penang if you go to a Government hospital for an open heart surgery, you pay $275. And if you go to a first-class ward, you pay only $1,700. I call this real subsidy. This amount is inclusive of ward charges. It is not independent of the ward charges.

Next, I come to education. The school fees in the independent schools have escalated dramatically. Some of them have already charged $200 per pupil while others are charging $175. It has become prohibitive to a number of poor students to pay the fees of these independent schools. The Government should consider granting more scholarships. In granting scholarships, the Government should take into consideration the financial background of the parents of the students who are in the independent schools. As I have suggested before, and I am reiterating it now, for the well-to-do families whose children perform well in school, the Government can just award them with honorary book prizes so that the money can be channelled to the poor students for them to continue in the independent schools. I am quite sure that the well-to-do families would not object to this. But, of course, when you come to the university level, they should be given full scholarship irrespective of their financial background. The simple reason is this: when you are in the independent school, you can get all the scholarships you want and you are not bonded. You owe the Government nothing. Later on, if you do not accept a scholarship in the university, you can send the children overseas independently, whereas if you accept a university scholarship, you are bonded to the Government, you have to serve the Government. Therefore, there is the return to them. So this should not apply to university scholarships.

My next point is the public assistance scheme. From statistics, the number of Singaporeans receiving public assistance is coming down. Until the last two years, probably we have about 2,700 Singaporeans receiving public assistance. Now, even with GST, a single person is only receiving $155. This $155 is inclusive of rent and food, which is clearly way, way below subsistence for these people. If we want to assist these poor Singaporeans, it is only fair that they are given a fair subsistence level and not just pay them $155 and $455 for a family of four and above. With the present system, it involves the Government only about $10 million. So if you increase this by 100%, probably it will cost the Government $40 million. The Government has raked in $752 million from betting and sweep stakes. Can this money not be channelled to help the unfortunate? Alternatively, can the Government not organise another lottery, the proceeds therefrom could be channelled to help these poor and unfortunate?

I would like to appeal to the Government here to reconsider granting medical benefits to children of women civil servants. They are doing the same job and we profess equality. Why can we not give them the same privilege and benefits accorded to male civil servants? The amount involved is only $8 million. Why can the Government not reconsider this and give the same medical benefits to the children of the women officers in the civil service?

At the same time, the Government is encouraging more housewives to work. We have a lot of housewives who have no choice but to work simply because their husbands may be their only sole breadwinner and the wives may not be educated. The fact is that because the income of the husband is insufficient, the wife has been forced to work in order to augment the income of the husband. With the imposition of a levy of $330 a month, it is just not worth the while for most housewives to work at all. If you have a low education, and the income of your husband is low, you just cannot work because with the levy of $330 with effect from 1st April 1995, it is just not worthwhile for some of these housewives to work anymore. Because if you work in a factory you are paid $900. If you have to provide the maid food and pay the levy, it is not worth the while for the housewife to work even if her income is $1,200. I hope the Government will seriously consider reducing the maid levy so as to enable the wife to earn extra income to augment the low income of the husband.

In respect of the sale of Housing and Development Board flats, I would similarly urge the Government not to adopt the profit-oriented and cost recovery approach. There must be a subsidy. When I say "subsidy", I mean below cost subsidy and not below market price subsidy. There is a vast difference between these two. "Low cost subsidy" means the Government is building the property and selling it to members of the public at below cost. So the difference is the amount of subsidy, and not below market price. If you do a comparison here, you pay $330,000 for a HDB executive flat and $600,000 for a private flat. If you look at it that way, it is subsidy because in the open market you pay $600,000 and the HDB is only selling it at $330,000. The subsidy difference is $200,000 to $300,000. If you go on this theory, HDB in fact is making a profit out of it. When private developers sell at $600,000 they easily make 50% of that. So the actual cost is only $300,000. In fact, the HDB is selling more than the private sector when they sell at $330,000. These are factors one must seriously consider. When you acquire a piece of land for a song, you do not sell it out to your own citizens and tell them the market value is so much. That is wrong. You are dealing with your own citizens whom you are duty bound to look after them. In areas like health, education and housing, the Government is duty bound to subsidise in every way.

Lastly, I would like to touch briefly on the Elected President. It may sound a bit out of place but, to me, I think it is relevant to this budget session in the sense that the People's Action Party introduced the Elected President as a mechanism to check against a drawdown on our reserve as hand-outs or to subsidise social services. With the constitutional amendment, this is taken out. In other words, in respect of certain matters, the concurrence of the President is removed, ie, any matter relating to defence and security, we do not need the concurrence of the President. I suggest here that we are back to square one. This is simply because there are no more checks for a drawdown on the reserve.

In fact, the Defence budget, like all other budgets, comes to Parliament every year for scrutiny. But the difference is that in the case of any other Ministry, we have a breakdown of the expenditure. We know how much is spent for a particular programme. For example, for Education, you would say it is for the building of new schools. But in the case of the Ministry of Defence, there are certain areas, for reasons of sensitivity and security which the Government claims, they do not let you know. What is there to prevent a future Government, in order to circumvent the provision, from couching in the Defence budget a certain amount of money which is meant for subsidising social security? Parliament would not know because we have no chance to ask questions. A certain amount is put aside. It is spent on ground of security and none of us would know. I think it is a very dangerous thing to happen when the provision is taken out of Parliament. At first, with the amendment, we thought it is vested in the President. Now the latest amendment has made an exception to this rule. I think the danger is there. We are back to square one. All we are driving hard to get at can be circumvented.

The Parliamentary Secretary to the Minister for Information and the Arts (Encik Mohamad Maidin B P M): Mr Speaker, can I ask some clarification from the Member? Mr Speaker: Is there something in his speech you do not understand?

Encik Mohamad Maidin B P M: Yes.

Mr Speaker: All right.

Encik Mohamad Maidin B P M: I want to know more from Mr Ling with regard to his comparison of the health care provision in Singapore and Hong Kong. Mr Ling mentioned 1.2% for Singapore and 5% to 6% for Hong Kong. In his research, can he inform us what is the figure of the per capita allocation for the residents in Hong Kong as compared to Singapore? What I mean, Sir, is that 1.2% or 5% can be misleading in the sense that if I have $100 and I distribute among 10 persons, each one would get $10. But if I distribute $1,000 among 1,000 people, each one would get $1. That is the difference I wanted to understand.

The second question is this: Can the Member inform us what are the causes for them to allocate a lot more from their budget for health care? Is it because of high cost of manpower, high cost of medicine or is it because too many people get ill too often in that country that they require a lot more money for the service?

The third question is whether the Member can inform us whether the people in those countries also have a kind of savings scheme to help them to pay for medical bills, like what Singaporeans are doing now through Medisave and MediShield.

Mr Ling How Doong: Mr Speaker, Sir, as far as the United States is concerned, the reason why they spent about 12.4% of their GDP is that it is a litigious society. So invariably the practitioners there, in order to prevent being sued, increase their fees, resulting in this sort of subsidy going up. We do not have a situation over here where doctors are being sued left, right and centre. No. That is why their expenditure has gone up so high. And, in fact, as the hon. Member has just mentioned, we have other schemes, like MediShield and Medisave. Whether other countries have these schemes or not, I think the point here is if in fact the Government can afford it, it should subsidise more for the poor and the needy. MediShield does not come free, you pay premium. So it really makes no difference whether we come out from our own pocket to get back from the Government, which I think is wrong.

Mr Wong Kan Seng: He was asking about Hong Kong.

Mr Ling How Doong: Hong Kong now, I believe, is about 5.7% and Hong Kong's income tax is also about 16%. Offhand, I think the corporate tax is about 18.5%, much lower than here. And yet the difference between Hong Kong's corporate tax and personal income tax rate is around 2 percentage points.

So we are using only 1.2%; Hong Kong is 5.7%, much, much higher. What I am saying here is that if we can really afford it, we should do more for the unfortunate by increasing their subsidy. Even if we increase by 1 percentage point, it involves about 3 million people.

RAdm Teo Chee Hean: Did they live longer?

Mr Ling How Doong: That is not the point. The point here is, as the Government, you have a duty to subsidise these people. You can afford it, you give them tuppence. That is what I am driving at. It is not a question of how long. Singaporeans have a longer life-span of 74 years. Do you mean the Government make us have a longer life? I do not think so. Look at Japan. The Japanese are known to have a longer life-span in the world and yet the government is giving them more than 8% of GDP. So the amount of percentage of GDP given is not in any way relevant to one's life-span. It is not relevant.

Encik Mohamad Maidin B P M: Sir, unfortunately, the Member did not reply to the questions I asked, that is, the per capita allocation, why is it that they have to spend more money for health care there, and in what way is it more superior to Singapore.

Mr Ling How Doong: I really do not understand what the hon. Member, Encik Maidin, was saying. Whether you are superior or not superior, what difference does it make to the question of subsidy? Is he suggesting for a moment that in Malaysia, there are all the bomohs treating the patients and we have all specialised people treating the patients? Is he suggesting that? Is he suggesting that across the Causeway there are bomohs or the witch doctors or quack doctors treating them? We have first-class medical treatment here no doubt. But what I am saying is that we should channel more to subsidise those poor and the needy. For the well-off, they can pay. But we should help a lot of these poor and needy - those who are suffering from kidney ailment and chronic diseases. Government can do more for these people in the present circumstances. That is what I am driving at.

Mr Loh Meng See (Kampong Glam GRC): Sir, may I seek further clarification from Mr Ling? He asked for more Government expenditure. Maybe he can tell us specifically what will be the objective he hopes that Singapore will achieve with more health care expenditure, because he seems to suggest that a longer life-span and lower infant mortality are not the standards. He just painted with a very broad brush by saying that we want to spend more on the unfortunate and the poor. But I think the Government needs to be guided as to what will be the objective. Maybe he can point out to us specifically what are the objectives we should be achieving.

Mr Ling How Doong: As I mentioned earlier, the purpose of this increased subsidy is to get the poorer and unfortunate people to pay less for their treatment. One example is a kidney patient. Now he is paying about $600 a month. With Government subsidy, perhaps he pays $300 a month. And for those who have prolonged illness and have to stay in hospital for a long time, instead of charging them ward charges, like C or B2 class, of $60 or $85, they pay $40. Is that not a way to help our poor and unfortunate brethren? It is very simple. I am not asking the Government to help the well-off. I am asking the Government to help the less well-off, those unfortunate brethren of this society. That is what I am asking for.

Encik Mohamad Maidin B P M: Sir, Mr Ling has not replied to my questions about per capita allocation and whether the money, as he said, is good to provide health care there in Hong Kong and other countries, and why is it that they have to allocate a higher percentage of their GDP to provide health care to their population.

Part two of his reaction to my point is regarding the bomohs in Malaysia. I wonder whether the Member knows the number of bomohs in Malaysia who, he said, were somewhat involved in the health care service. I do not know about this, Sir.

Mr Ling How Doong: Mr Speaker, Sir, I replied to him simply because he is insinuating that the standard of our medical practice is much superior to that across the Causeway. That is why in reply I was even suggesting about bomohs across the Causeway, because he was insinuating that if you pay more, you have first-class medical treatment. That is my reply. It is impossible for me to tell him the number of bomohs over there.

The next point is Singapore's per capita income is about $2,000-plus. Of course, in Malaysia, it is about $300-plus. [Interruption.] No. I am sorry. It is the amount they spend. In Malaysia, the amount they spend is about $300 per patient; in Singapore, it is about $2,000 per patient at the hospital. I am drawing this comparison here. The point here is that we may be one of the richest countries in the world, but that does not follow we have no poor people. You know very well how it works. You get an amount there, add to the value below, you divide, that is your answer. I mean, you may be in a rich country, but you may be drawing $500. In Singapore, we have people drawing $300 a month. We may have a very high per capita income, but it does not mean that you are earning a lot of money. I am appealing to this Government to look more into the welfare of the few poor and needy. No more, and no less.

Encik Mohamad Maidin B P M: I still did not get an answer to my clarification from the Member. But anyway this is the first time I have heard that we are one of the richest countries in the world.

Encik Othman bin Haron Eusofe (Marine Parade GRC): Mr Speaker, Sir, can I also ask a clarification? He said that in Singapore, there are people drawing less than $300 per month. Maybe he can give us data on this. I would like to take a look at it.

Mr Ling How Doong: Mr Speaker, Sir, he is in the labour movement. Perhaps he can tell us.

Mr Speaker, Sir, I am drawing this point simply because at the last debate we said that we had about 4,000 or 5,000 people drawing about $300 a month. Can he tell me that it is completely eradicated and no more poor people are earning this amount?

Encik Othman bin Haron Eusofe: Mr Speaker, Sir, I suggest he take a look at the Labour Force Survey. The figures are there. It is not $300 per month. It is very much more than that.

1.40 pm

Mr Chew Heng Ching (Eunos GRC): Sir, the issues which Mr Ling has brought up are not new in this House. I am sure these issues have been brought up in the past over and over again. I am sure Members of the GPCs for the various Ministries will again address these issues in the course of their speeches. But I would like to add one comment. As an economist, I know it is always difficult to use statistics to compare inter-country achievements, expenditure patterns and tax structures because statistics can be misleading. When we quote statistics, are we quoting them in real terms, in current terms, in what currency? I think this has to be made known before we disclose any statistics.

Sir, true to what has been predicted, the Budget in my view is a painless one, generally much welcomed. However, for some Singaporeans, the hand-outs were below their expectations. It was to them a non-event. They had expected more good news given the fact that Singapore celebrates its 30th Birthday this year. But this has not happened yet. Perhaps the Government is holding back the best news for release in the month of August when we celebrate our National Day.

Sir, the business sector is said to be somewhat disappointed with the Budget. This need not be so if it remembers that a number of incentives would be introduced to boost R&D activities and to further promote the financial services industry. Businessmen understandably perceived this Budget as less than ideal. They said the Budget only benefited certain segments of the economy. They have wished for another reduction of corporate tax, but I think they cannot really feel disappointed as the last corporate tax reduction of 3% was made only last year and businesses generally are still benefitting from it. The business outlook remains cautiously optimistic despite a number of unfavourable developments since the beginning of this year, ie, the Kobe earthquake, the Mexican peso crisis, the collapse of Barings, and now the weakening of the US dollar.

Sir, this `pro-people' Budget appears to be an expansionary budget with development expenditures projecting to reach a high $6.7 billion in FY95, an increase of 46% over FY94. Sir, one must remember that the economy grew by 10.1% last year and foreign investments in Singapore reached an all time high of $5.8 billion. All these expansions will put a further strain on our limited resources, particularly manpower and land. These will drive up wages and rentals. My concern, Sir, is that our economy may be in danger of overheating. Unless we manage our growth prudently and with caution, cost inflation will rise and this will add further pressure on the cost competitiveness of our existing industries. We cannot allow what happened in the mid-1980s which led to an economic recession in 1986 to repeat itself in the near future.

Sir, talking about our limited resources, water is a precious but scarce resource. It is therefore timely for the Government to send an amber signal to Singaporeans to conserve water. The high water conservation tax has to come at a time when water consumption remains high and increasing. We must develop a habit to conserve water. But, Sir, I would ask that due consideration be given to manufacturers who use water as a basic ingredient, such as those in the food and beverage industry. It is the wastage of water which should be discouraged. By the same token, there should be incentives when efforts are made to conserve water and, for that matter, other forms of energy. I therefore fully agree with Dr Ow Chin Hock that we should launch a campaign to conserve water.

Sir, allow me to come to the Budget surpluses. Whilst many countries, including once economic powers, are grappling with budget deficit problem, we are blessed with another year of budgetary surpluses. Sceptics, especially those who are jealous of our success, are throwing mud at us. They said the current budgetary surplus is the direct result of the PAP Government's "pay and pay" policies. Is that really so? The truth is our budgetary surplus is largely the consequence of our strong economic growth from which wealth is created and some returned through tax collections to the State for spending on infrastructure, defence, education, health care and other social services. Indeed, the Hon. Minister for Finance has shown this fact through Table 1 of his Budget Statement, which shows that tax revenue forms a large 80% of total revenue collected in 1994. Non-tax revenue which is a consequence of Government's non-fiscal policies forms the other 20%.

Sir, we should not be embarrassed by our budget surpluses. There is this temptation to want to spend the surpluses more liberally. I am glad that the Government has again resisted clamours for free handouts without considering whether it would weaken the will to work hard for Singaporeans. Neither should the Government be tempted to spend more than is necessary in order to narrow the budget surpluses. Doing so, Sir, is likely to have dire consequences and will overheat the economy and lead to inflation. Instead we should look at how best to use the budget surpluses to achieve our long term national objectives. In particular, we should use our budget surpluses to address the likely structural problems we will face in our economy.

It is my view, Sir, that we should channel more of our budget surpluses to the field of education and for the retraining of Singaporeans. I am glad therefore that the Government has decided to channel another $1 billion to the Edusave fund to allow students to participate in a larger variety of educational programmes to maximise their potential. But the Edusave fund, Sir, only benefits our younger Singaporeans. The adult population does not benefit from it. Sir, as our industries regionalise and expand overseas, Singaporeans have to be properly trained to manage our overseas investments. Many Singaporeans today are ill-equipped to do such tasks. May I therefore suggest that a small part of the surpluses be channelled to a fund to be set up to be called the Regionalisation Training Fund, or RTF, to train Singaporeans in the necessary languages and management skills, in order to better equip them in their work overseas as we expand regionally.

Sir, still on education and retraining, we should also seriously look at channelling part of the surpluses to the Skills Development Fund, or SDF. I think there is a need to retrain our workers, particularly those in non-executive positions who are in their 30s and 40s, who did not receive much education and skill training in the past, and this is a point which has also been put forward by Dr Ow. The recent spate of retrenchments in the electronics industry resulting in thousands of workers being out of job is, indeed, a warning sign. This pool of workers is lucky to be able to seek alternative employment when our economic growth is still buoyant and the electronics industry robust at the moment. The scenario may be different if circumstances change within the next one or two years. This would also apply to non-electronics industries as we become less competitive due to cost pressures and businessmen relocate their operations to neighbouring countries. And when this happens, more and more Singaporean workers without the necessary skills would be out of jobs.

Sir, I am therefore proposing that we channel part of the surpluses to the Skills Development Fund for the training, education and the retraining of our older Singaporean workers to better equip them for employment opportunities as our economy gradually transforms to a more skill intensive and higher value added one in the years ahead. Coupled with this, I am proposing that we step up our efforts in encouraging this group of Singaporeans to go for retraining and upgrading to cope with the challenges ahead. I can understand why these Singaporeans do not feel a pressing need to undergo retraining now because current economic conditions are favourable and jobs aplenty. But we cannot wait for doomsday to happen. We must do something now. I therefore suggest that a special committee headed by either a Minister or Minister of State and comprising specialists from the public and private sectors be formed to address this problem and mindset, and come up with solutions and recommendations as quickly as possible.

Sir, in the Budget debate last year, I proposed that the Government set aside a small amount of its surpluses to a fund to help the needy in our constituencies. This proposal has certainly not been taken up by the Government. I would like to propose this concept again this year. The point here is that the needy in our constituencies needs the money more than anyone else. And the best people to identify which households deserve a little more to meet immediate and pressing needs are none other than our community leaders in the constituencies.

I am therefore suggesting that we set up a "Constituents Hardship Relief Fund or Needy Fund" using part of the budget surpluses to be administered by the Ministry of Community Development for spending on the people at the constituency level. Applicants for this fund will have to have a deserved cause to be supported by the constituency Citizens' Consultative Committee and endorsed by its Advisor. Applicants will have to be people with a dire need for financial support caused by unforeseen circumstances. Some money may also be put aside to help deserving students from these needy families to pay for their school fees and textbooks. It may not cost a lot but it will go a long way to touch the hearts and assuage the worries and fears of these constituents. In this way, Sir, the Government would not be mistaken as a Santa Claus to all and sundry. The people will also see that part of their money will go back to them in a use that touches their hearts more deeply. Even if he is not the direct beneficiary of this fund, I am sure he will still see and feel the joy of his neighbour's plight assuaged by financial assistance through the State.

Sir, it is important to remind ourselves not to take the budget surpluses we enjoy year after year for granted. We must remember that this sharing of wealth is only possible if we as a nation continue to work hard to prosper and the economy continues to perform creditably. It is equally relevant to remind ourselves not to take a robust economy for granted, that it will and can carry on thriving indefinitely. Without good planning and astute vision, as has been the hallmark of this Government, all this wealth creation will just be a pipe dream.

On that note, Sir, I join my fellow Members of the House to voice my support for this Budget.

Mr Teo Chong Tee (Changi): Mr Speaker, Sir, undoubtedly, Budget 1995 must be one of the most generous, yet prudent and farsighted one in the world. Indeed, how many governments today, whether in the developed or developing world, are able to present such a healthy and sound budget? Certainly, Finance Minister Dr Richard Hu must be the envy of his contemporaries in other countries. Today, it is becoming increasingly harder, if not rare, for finance ministers the world over to present a balanced budget, not to mention one with a huge surplus. So Singapore must be doing something very right - accolades and kudos to the Finance Minister.

Sir, enjoying a healthy economic growth which in turn generates a budget surplus is one thing. How the surplus is spent is another. It will be ruinous to just give away the surplus in the form of ready cash for the people to spend as they like, or to give them over generous subsidies. It is human nature that a people used to free handouts will always ask for more. Once their appetite for free handouts has been whetted, it will be insatiable. Sooner or later, the government will find itself unable to cope with the demand of the people. This is when the trouble begins. Even a rich and powerful nation can go downhill once its people's psyche is cast in a spendthrift mould.

Sir, take the United States, for example. From a recent BBC broadcast entitled "Letter from America" by Alistair Cook, it was said that the USA, though being the richest nation in the world, is estimated that it may go bankrupt in the year 2010. Its current budget deficit is US$200 billion a year. And its world debt stands at US$800 billion. The yearly interest it pays to its creditors amounts to more than the nation's annual expenditure on defence. All this woe is brought about mainly by its populist fiscal policy, and the popular philosophy of a people who believe in enjoying life today rather than worrying about tomorrow. Three-fifths of its annual budget are spent on entitlements, in other words, on lavish subsidies for its citizens. This means the future generations will have to pay for what the present generation is enjoying. But is this morally and politically right? To us Singaporeans, I must say, it is very irresponsible behaviour on the part of the present generation. And it must never be allowed to take root in Singapore.

Sir, I am saying all these because there are already unhealthy signs that complacency has begun to rear its ugly head in Singapore, especially among many of the younger Singaporeans who are used to many years of continued prosperity. Our fiscal policy must therefore be able to arrest this trend, lest we fall into the same trap that many Western economies are in today. We must also constantly remind ourselves that it is a persistent feature of the history of migrant people that the immigrant drive seldom survives into the second or third generation. Can Singaporeans be different? Can we prove history wrong? Well, Sir, it all depends on us. But for survival and continued prosperity in a more and more competitive global economy, we Singaporeans, living in a tiny island state without any natural resources to speak of, have really got no choice but be made of sterner stuff.

No thinking and rational citizens can deny that the Budget presented in this House on 1st March is a generous, balanced, fair and forward-looking one, which will help take Singapore into the next era without hiccups. Some people have aptly described the budget allocation to how a wise farmer divides his income derived from a bumper harvest, into three parts. The first part he spends giving all those who have contributed to the success of the bumper harvest a feast; the next part he stacks away for a rainy day; and the third part he invests in more advanced farming equipment, as well as sending some of his farmhands for training. All this is done to ensure more good years.

However, Sir, despite the fact that Budget 1995 is a painless and generous one, it seems that we still have quite a bit of explanation to do before we can convince all Singaporeans that the PAP Government is doing the right thing. And this explanation must be done in simple layman's terms, not couched in technical jargon, so that all Singaporeans can understand and think long term rather than just to have more money in their pockets now. We must not forget that at the moment, almost 50% of our workforce have not had the opportunity to receive education beyond the primary stage.

Sir, I mention this because some citizens have commented that with so much surplus in the kitty, the Government should be more generous. Some argue that there should have been a reduction in their personal income tax. Others say that there should be a cut in corporate tax. It may sound rather far-fetched, some even think that the Government should declare a tax holiday for all wage earners, regardless of their income for FY95 to reward them for their contribution in the economic growth. Some, though disappointed, are accepting the budget philosophically that something is better than nothing.

Sir, the Government's $200 contribution to the ordinary CPF accounts of all Singaporeans aged 21 and above, and the $300 to CPF SOTUS do not seem to mean very much to these people. Firstly, it is not ready cash which they can spend straightaway. Secondly, the amounts do not mean much to each individual although it translates to the tune of $360 million and $380 million respectively on the part of the Government. Some even question the rationale of imposing the age limit of 21 to qualify for the CPF top-up. They think it could be because only those who are 21 and above are eligible to vote in an election; so 1995 must be the General Election year!

Although in the main I am happy with the Budget, I would still like to tinker with a few ideas for the Minister to ponder, maybe for the next Budget, if adjustments cannot be made this year. First, when our economy is doing exceptionally well, whether the Minister would consider giving retirees, especially those who retired many years ago, and whose pension is very small and has been badly eaten into over the years by inflation, a one-off payment. Call it a bonus, or whatever suitable name. After all, former MPs who retired some years ago have recently petitioned to the Prime Minister for a revision in their pension.

Second, whether the Minister would make some changes to the CPF top-up scheme. As it stands now, only those who are economically active are entitled to the benefit. Those who are not, for example, housewives, are being left out. But is not bringing up children and doing household chores considered important activities? Mr Speaker, Sir, surely they are.

Also, a blanket payment to all and sundry who are considered economically active, thus contributing to our economic growth, does not seem very logical. A few hundred dollars to a rich man means hardly anything, and certainly he does not need it. Whereas the same amount means a great deal to a person earning only a few hundred dollars a month. Therefore, Sir, would the Hon. Minister consider fine-tuning the present CPF and CPF SOTUS? Maybe a cap on income could be used to decide the eligibility of the recipients of the top-up. Granted, this method may be cumbersome and tedious in practice, because of the sheer numbers involved. I have, of course, no intention to question the rationale behind the Government's good intention in returning some of its accumulated savings to the people. I am only suggesting that maybe the money to be given back to the citizens could be more fairly distributed.

Sir, with these comments, I support the financial policy of the Government as presented by the Finance Minister.

Dr Wong Kwei Cheong (Kampong Glam GRC): Mr Speaker, Sir, I rise to support the motion standing in the name of the Minister for Finance.

Much has been said on this year's Budget Statement, both in public and in private. Many people have described the Budget as prudent, cautious and forward looking. The Budget has addressed short-term and long-term objectives.

The immediate short-term concern is that there should not be overheating of the economy. The long-term objectives are the competitive challenges coming from the emerging nations, and internally, the problems of coping with rising middle class aspirations.

Some people have also described the Budget as an election budget, with rebates for the people, a 10% tax rebate, a CPF top-up of $500, and for those who do not pay tax, the Government has give-aways in terms of S&C charges and rentals. 1995 could indeed be an election year!

Mr Speaker, Sir, I now have a few personal observations of my own to make on this year's Budget Statement. Firstly, the Government should consider reducing the personal income tax to the level of the corporate tax. The 10% tax rebate on individual income tax is equivalent to a 3 percentage proportional cut in tax rates. Sir, may I propose that the Government consider making this 3 percentage cut in individual tax rates a permanent feature for the Budget Statement of 1996. After all, it must be remembered that the ordinary individual taxpayer has no recourse to tax planning or other devices.

Sir, my second point concerns the rising labour cost and the strong Singapore dollar. According to the Economic Survey of Singapore 1994, real wage growth increased from 1.4% in 1993 to 5.2% in 1994. Although the manufacturing sector registered strong productivity growth of 11%, for the rest of the economy, productivity growth was lower, and wage growth higher in 1994 compared to 1993. This resulted in unit labour cost for the overall economy rising by 1.9%, in contrast to the slight decline of 0.2% in 1993.

In addition to rising labour costs, the Singapore dollar appreciated against the currencies of the NIEs, namely, Hong Kong, Taiwan and South Korea, by a range of 8-10%. It strengthened against the Malaysian Ringgit by 4.3%, the Thai Baht by 8.4%, and the Indonesian Rupiah by 15%. It registered a stronger 10% appreciation against the US dollar and closed the year at S$1.46 per US dollar.

Mr Speaker, Sir, we are rapidly losing our competitiveness and I hope the Government is fully aware of the problems faced by our manufacturers and exporters as a result of rising labour costs and an appreciating Singapore dollar. The Budget did not address these issues and I hope the Minister can provide some means to help restore our competitiveness.

Finally, Sir, the Minister has stated in the Budget Statement that funds have been allocated to the Economic Development Board for venture capital funds to assist local SMEs to take advantage of regional opportunities. Funds have also been made available for EDB to make strategic investments and to assist local SMEs through various economic development schemes.

May I ask the Minister to give more details of the funds allocated, and a progress report of the schemes set up to assist local entrepreneurs to expand into the region.

Sir, on this note and with these comments and suggestions, I support the motion.

Mr Peh Chin Hua (Jalan Besar GRC): ( In Mandarin): Mr Speaker, Sir, the Finance Minister's Budget Statement this year seeks to adjust our tax system in order to strengthen the long-term competitiveness of Singapore. This is indeed praiseworthy.

This year, the Minister is giving a 10% rebate on our personal income tax, and rebates on service and conservancy charges and rentals for residents of HDB flats. A sum of $500 million will be credited to the Edusave Fund, and another sum of $1 billion into the Medifund. $380,000 will be spent on a second round of CPF top-up for all Singapore citizens above the age of 21. About 71% of the people of Singapore will not have to pay any income tax. The Government is, in fact, paying back its budget surpluses to the people of Singapore, especially those in the lower income group, so that they can have a share in the benefits of our economic prosperity. I think these measures are very important and this Budget is an important one too.

I do not agree with Mr Ling How Doong. From the political and economic point of view, the Government has begun to implement the scheme of sharing the fruits of our economic development with the people. This is a very humane touch on the part of the Government. But I am beginning to worry that the good intention of the Government to share the benefits of economic development with the people may result in the younger Singaporeans forming the wrong impression that such handouts are to be taken for granted and thus forgetting about the vulnerability of Singapore and the increasing competition from the region.

I am raising this point because after the announcement of the Budget Statement, a lot of young people said, "Very good, we too have some hong baos to collect!" Some young people even said "What a disappointment, only a small pittance." Therefore, I feel that if the Government were to continue sharing the economic fruits among the people, it must first understand the mentality of the young people on this kind of handouts before implementing it, so that this benefit sharing will not be wrongly considered as a kind of welfare scheme.

Mr Speaker, Sir, I heard the proposal of Mr Ling How Doong about giving more of this and more of that. I think maybe the motive and intention are good but it is certainly not realistic. He quoted Malaysia as an example. We cannot compare Singapore to Malaysia. Malaysia is a large country with lots of natural resources like rubber, tin, palm oil, etc. But in Singapore, we have none. We do not have any natural resources, not even water. Our land area is very small. The circumstances are different between the two countries. We cannot even use Hong Kong as a comparison. Hong Kong is not a sovereign state. It does not need to spend on defence and foreign affairs. Hong Kong saves a lot of money on these two areas. I feel that we should be more realistic.

Mr Speaker, Sir, another point I like to raise is on the respect for the old and the aged. I think this is a traditional virtue of Singaporeans. However, there seems to be no provision in this Budget for the pensioners. I feel that the pensioners need to be looked after. At a time when our national economy has performed well, we should not forget that there are many people who retired in the 1950s and 1960s who had made considerable contributions to the society and the country. These are the older Singaporeans. Especially in the 1950s and 1960s, when ex-ministers, ex-MPs and ex-civil servants retired, they did not have the benefit of NWC recommendations or CPF savings. All they received was just a miserable sum of pension. These people who had made contributions to Singapore in the past cannot depend on the small pensions computed then for the living in the 1990s. Many of the ex-MPs who retired told me that when they retired they received only a pension based on the then MPs' allowance of $500. They had made valuable contributions to the country and the Party but they are left with almost nothing. I hope that the Government can consider the contributions made by these people, and make appropriate adjustments to their pension. I believe that the number of such people is very small and it would not add on to the burden of the present and future taxpayers. Maybe we can use another method, ie, to use the surpluses from the budget to look after them. I hope the Minister for Finance will consider this suggestion sympathetically.

Sir, the Minister for Finance also said that through its fiscal policy the Government will make Singapore's economy more competitive, such as reducing the tax burden of the businessmen to the minimum, and providing for relatively tax-free repatriation of their funds. I welcome the statement from the Minister for Finance, but I hope that he would also consider helping the small and medium enterprises (SMEs) in their overseas ventures by giving all of them the necessary assistance.

First, I would like to declare my interest. I am a businessman. The Government should consider setting up a development bank to provide loans for the SMEs in the establishment and building of factories and plants overseas and thereby using such factories as mortgage thereof. At least, give them loans of 30% to 50% of their total overseas investments so that the SMEs would be able to develop properly in their overseas ventures.

Secondly, consider the use of CPF savings for certain selected investment scheme overseas so that the SMEs will be able to have a share in the regionalization programme.

Thirdly, provide the avoidance of double taxation and simplify the procedure for the benefit of the SMEs. Give them more information so that these people will be able to send their money back to Singapore.

Finally, with regard to male citizens who go out to work outside Singapore, if they bring their wife and children with them, they should be able to enjoy higher tax rebates and other tax incentives so as to enhance family cohesion which is the tradition of our people, and that will prevent the establishment of second homes outside.

Sir, the Government is going to allocate $500 million to Edusave Fund. This will enhance the opportunities for our people to receive training and retraining to maximise their potential. Our students will be able to get scholarship from the Edusave fund. But there is one thing which I fail to understand, that is, why is it that our clan associations, which provide scholarship and bursaries to the students, cannot be granted any tax incentive from the Government. If the Minister is concerned that these clan associations cannot manage their finances properly, then if the school principals can certify to the effect that scholarship and bursaries are being given, we should allow the clan associations to receive tax exemption on their bursary and scholarship funds. I believe that the able ones should help the less able ones. I think this is one of our core values. Since the Chinese clan associations are actively promoting bursary and scholarship schemes, I think it is playing the same role as the Edusave scheme. The Government should allow them to enjoy tax exemption. I hope the Minister will consider this seriously.

On that note, I support the Budget statement by the Minister for Finance. 2.23 pm

Mr Chin Harn Tong (Aljunied GRC): Mr Speaker, Sir, I rise in support of the Minister for Finance's budgetary statement for 1995. As we have learned to expect from the Minister's past performances, he has expertly and deftly put together a package which manages to accommodate the competing and, sometimes, conflicting needs of different interest groups.

The 1995 Budget was praised in the press as a far-sighted one. However, some businessmen seem to think the Budget would have been better with more tax cuts or tax breaks. Nevertheless, the message underlying this year's Budget is that Singapore prospers because we make it so.

Implicit in this message is that the 1995 Budget is meant to help all those who are economically active. As I see it, that is the rub of this year's Budget. The Budget is silent about the Singaporeans who are not gainfully employed and are not welfare recipients.

When we glibly talk about the economic success of Singapore, we tend to forget that not all Singaporeans benefit from this economic success. This is because Singapore does not function like a giant lift. If it were so, we would be all in cloud nine, because when a lift rises upwards, all the persons would automatically rise up with it.

Unfortunately, in real life, it would be apt to liken Singapore to a nimbus-cumulus cloud or rain-storm cloud. As Singapore soars upwards on free market forces, the dynamic or enterprising Singaporeans will soar much higher than the rest of their fellow Singaporeans, while some hapless Singaporeans may even drop below the bottom of the cloud.

Sir, I am not suggesting we give them golden parachutes like those the multi-national CEOs give themselves. Singaporeans have to find whatever handholds or safety straps they can to hang on for their dear life as Singapore rises even higher in the sky.

We have always prided ourselves on our guiding principle of self-help. We had plumped for a wholly contributory provident fund scheme rather than a fully or partly state-funded pension scheme. While our Singapore Government may pat itself on the back for avoiding a potentially fiscal nightmare, some Singaporeans see only a nightmarish future when they retire.

Whether we like it or not, money loses some of its value over time. Our currency, fortunately, is relatively stable. Nonetheless, even a slow but steady rate of erosion of monetary value over several years must adversely affect those who are dependent on frozen incomes.

People who are economically active have incomes, that is, profits or wages, that rise or are adjusted to compensate for the shrinking value of money. Retirees and others with frozen incomes have to tighten their belt.

I know our Government has been urging Singaporeans to hedge against their retirement by wisely investing their CPF money. But it is easier said than done. The recent report by the CPF Board shows more CPF investors lose than gain by trying to increase their CPF savings.

While the factors responsible for monetary depreciation are not all necessarily within the control of our Government, I hope our Government will be able to find a way of keeping up the progress of Singapore without unduly reducing the purchasing power of our currency. Otherwise, the future will be bleak for our senior citizens who will form an increasingly larger component of our population.

Sir, this year's Budget similarly refers to our need to conserve the use of fresh water without touching upon a non-fiscal solution. Even before the Budget was announced, this need to save water has been publicly stressed and voiced. The Mentri Besar of Johor seized the opportunity to reassure Singaporeans, since Johor is our main fresh water supplier at present.

Sir, I do not doubt our Government has reason for being overly anxious that we use up more water than we really need to, as Singapore has very limited fresh water resources. Understandably, the public may be at first puzzled why the intention of our Government, as reflected in the Budget, does not match its vocal concern on the subject of water.

The local press reported the Minister for Trade and Industry has now informed us that the desalination of sea water has been actively canvassed. I only wish an indication should have been given in the Budget of our Government's efforts to find alternative sources of fresh water. Our water supply is a matter that concerns the whole nation and not merely a statutory body.

Singaporeans who have visited Hong Kong may be aware that one of its solutions to the problem of limited fresh water supply is to have separate plumbing systems for flushing toilets and for drinking, cooking and bathing purposes. By using sea water for flushing toilets, Hong Kong cuts down on the use of fresh water. Of course, an objection to the use of sea water for this purpose is that we in Singapore do not flush raw sewage into the sea and we recover the toilet-flushing water for industrial use.

Undoubtedly, we have to do more research and study to find ways of cutting down on the use of potable water that are suitable in our circumstances. Our Government has set aside about $740 million for crediting the CPF accounts of eligible Singaporeans. I should think that, in the long-term interest of Singaporeans, setting aside another sum of money for water research would be very much in order.

For that matter, our Government should channel the water conservation tax into water research and not the general revenue. Even if the levy imposed on consumers using more than 20 cubic metres of water a month does not yield much, the fact that our Government finances water research will serve to underline the seriousness of our water situation.

Notwithstanding my comments, I support the 1995 Budget.

Dr Kanwaljit Soin (Nominated Member): Dr Richard Hu's Budget Statement has been described in various ways. Mr Speaker, I found it comprehensive and visionary.

He spelt out the short-term and long-term challenges facing Singapore. In my opinion, where short-term issues are concerned, the Government has its finger on the pulse and is reading it correctly. We can confidently look forward to more good years in the short-run and we can commend the policy-makers for this.

However, it is the long-term challenges that are more problematic and we should be focusing on them now so that we can take pre-emptive measures. As outlined by the Finance Minister, these long-term challenges are both global and local and to a large extent they are inter-related.

Mr Speaker, the key challenge for Singapore is to develop its only resource - its people. Much has been done for the education and training of our people and more is planned. By the year 2000, we should see 85% of our population with post-secondary education. This is very impressive. It will give us a workforce equipped with the knowledge and skills needed for value-added and competitive economic effort.

But, Mr Speaker, there is one problem. A good number of these workers - possibly as many as half of them - will have to hold two jobs: they will have to shoulder the double burden of earning an income to ensure their families have the best possible in life while also taking on the bulk of the responsibility of caring for the children, the home, the aged, or the disabled relatives.

I am speaking, Sir, of a matter that has been raised in this House and in general public discussion time and again in recent years. It is the question of how we are to help working Singaporeans, and especially the women, find a better balance between the demands of the workplace and the home.

That we need our women in the workforce is undeniable. Singapore's labour shortage is so great that a sizeable chunk - almost 20% - of our workforce comprises foreigners. The economy needs all the womanpower it can find.

Singapore women, meanwhile, need to work not just because they want to apply the education and training they have received but because their income is, in many ways, vital to the family economy.

The Statistics Department found that in the decade from 1980 to 1990, the number of dual income couples doubled. In 1993, there were 260,000 dual income couples out of a total of 550,000 couples in Singapore.

In his report on dual income couples in Singapore, the Chief Statistician Dr Paul Cheung said the working wife contributes on average 41% of a couple's income. Among lower income couples, the wife's salary is even more important - as many as 43% of the lower-income couples derive at least one-half of their combined income from the wives.

Dr Cheung summed up the implications of women's participation in the workforce by saying:-

(a) because the supply of young workers in the labour force is expected to dwindle with decreased birth rates, married women will play a critical part in meeting demand for labour. It is therefore important to look at work arrangements.

(b) A second income will put a middle-upper class lifestyle within reach of many couples and help ensure financial security after retirement.

I would like to add a third implication, and that is, for the lower-income families, the loss of a wife's income will cut family income - and thus the standard of living - by half. The wife's income is, in other words, crucial if the family is to have any hope of keeping pace with the material progress of the rest of Singapore.

Mr Speaker, the dual-income couple is both a reality and a necessity of life in modern Singapore. Unfortunately, attitudes have not kept pace with the very real changes we have seen in our society and economy. Too many of us appear to be caught in the mental quagmire of seeing the man as the breadwinner and the woman as the home-maker and the care-giver. And so, even when both the husband and wife go out to work and may well bring home similar pay packets, it is the woman who looks after the home and on whose shoulders is placed the responsibility of keeping the family together.

Mr Speaker, Dr Hu in his Budget speech said Singapore must become even more of a middle-class society. I wholeheartedly support that goal.

Our leaders, and especially the Prime Minister, constantly remind us that we must preserve the family unit as it is this that will hold together our society. I agree completely.

But we must stop and ask ourselves whether these two goals are compatible given certain conditions and attitudes in our society. In order to have the income that allows a middle-class society, most families will need the wife and mother to work at a job.

She is, in other words, joining her husband in the breadwinning task. It would seem logical - and would augur well for the family - for her husband to join her in the home-making and care-giving task.

Is this happening? And if it isn't - and the evidence is that it isn't - why is this so? More importantly, what are we going to do about it?

Sir, the debate on the issue of the dual burden on women and the attitudes about the role of men and women in society has unfortunately sometimes been depicted as a tussle between so-called "liberated" women and men and families.

When women's groups call for steps to be taken to change attitudes which are lagging behind social and economic realities, policy makers tend to respond by suggesting that these are the shrill cries of a minority of women who are selfishly demanding doctrinaire equality and symmetry for their own ends. And then they warn of the dangers of aping the ways of the West, pointing to the high rates of divorce and single motherhood and general social decay there.

Just last week, Mr Speaker, we had another such reminder when the Minister of State for Finance and Defence spoke at the Woman of the Year gala dinner. The Minister listed the progress Singapore women have made in many areas and then pointed to the Nordic countries where women almost match men in many areas of life - and where there is also the greatest evidence of a crumbling social fabric.

Sir, our policy makers do Singapore women an injustice when they suggest that those of us who press this matter are mindlessly riding the wave of western feminism, that we cannot see the dire implications of certain social trends, that we care naught for the security and the sanctity of the family and social cohesion.

Sir, we see these implications - and more. We see the strains being placed today on Singapore families as they seek to cope with their rising aspirations and with the ever higher standards in the school-room, at the office, in the factory and shop floor. We see Singapore women struggling to play both their modern and ancient roles - and in so many cases, it is a silent and solitary struggle, the man and society generally, choose not to recognise.

It is essential that all of us - the Government, unions, employers, women's organisations and voluntary organisations, and each individual, and all of us in this House - look afresh at this question of women's and men's roles in the family and in society generally, and consider how best we can make those adjustments in attitudes and in work conditions that will allow for a better balance between the demands of family life and economic activity.

This is not "just a woman's issue". It is a national issue, one that affects men and women and families, and it calls for serious attention and action instead of the polite murmurs we have had so far.

I have made two appeals in the last two years in this House to the Prime Minister to take under his personal charge the task of finding a better balance for Singaporeans of the twin demands of family and work. I appeal to him once again. Finding this better balance is at the heart of achieving both economic progress and social cohesion.

Mr Speaker, if I could now turn to another aspect of what constitutes the quality of life in Singapore. Dr Hu spoke of the need to retain "high premium" individuals in Singapore who will create wealth for the country. He talked about the role of Government in satisfying their material, psychological and emotional needs.

The Government has gone a long way, as measured materially, to give our people a good quality of life. Singapore has the highest home ownership rate in the world and the Acting Minister for National Development is formulating even more creative and equitable means of increasing this.

We also know that the Minister for Communications is working very hard to make public transport a viable and attractive alternative to cars. We wish him luck and we should try to help him. I look forward to the time when our MPs, senior civil servants, highly-skilled professionals and well-heeled executives will either sell their cars or leave them at home and instead use public transport for their daily journey to and from work. Cars will then become necessary only for week-end travel.

However, despite the material progress, the upper middle class and the so-called "high premium" individuals seem to be unhappy. The Government is understandably frustrated by what it considers the unjustified griping of these people.

What is the problem? I would like to venture to make a diagnosis and suggest a prescription that could make for a healthier populace.

Material rewards are not the end-all and the be-all of human endeavour. It is in the area of psychological and emotional needs that the Government needs to do more. The Minister for Information and the Arts, BG Yeo, pointed to this lacuna when he spoke so eloquently in 1991 about the development of civil society, but since then the efforts to carry out this goal have been patchy. Indeed, when there have been attempts to take on an active citizen's role in matters involving policy-making and affairs of the state, the response of the Government has been seen sometimes as one of discouragement. People start to feel that the Government is over reacting to their participation and they become defensive. The message sent is that "the leaders know best" and they should trust their judgement. This may well be true. But if well-intentioned Singaporeans end up feeling they are being discouraged from entering the arena of policymaking, from offering a view on the trends in their society, they may well conclude that they are not an integral part of the fabric of our society. For them, Singapore becomes just a place to make money. Their bodies will be in Singapore but the battle for their minds and hearts will have been lost.

If we want Singaporeans to work hard and achieve excellence, and able to cherish their families and help the less fortunate in society, we have to let them feel they belong to Singapore. They must feel they have a right to participate in debates about policies and trends.

Of course, they should respect the integrity and authority of our leaders and the institutions of society, but this should be a respect granted willingly and whole-heartedly. A sullen silence or sycophantic smiles in the presence of authority do not make for a healthy society.

Singapore's socio-economic changes in the last 30 years are mind-boggling. The changes have been so rapid that it would be no surprise to find some underlying tension as people strive to make sense of these changes. There are bound to be stresses with high growth. And because the ruling party has been, in these 30 years, instrumental in achieving the Singapore socio-economic miracle, some of this underlying tension is directed at the Government. This tension has to be managed with understanding.

Respect for authority and established institutions is vital for our economic and social progress but, like all human emotions, respect should be a two-way process. Many concerned citizens feel that more should be done for this two-way process because the country has reached a critical point in its social and political development. I think it is important for this House to recognise this unmet need and to respond to it creatively.

Now, Mr Speaker, I would like to address another concern that may be forgotten in our celebration of being the 10th richest country in the world.

In the 10 years from 1982/1983 to 1992/1993, Dr Hu has told us real household income for the bottom 20% kept pace with those of the middle 60% and the top 20%. This is good news but it could be better. The bottom 20% should, ideally, be catching up with the middle 60% who in turn get nearer the top 20%. In fact, although income disparity has not increased in the last 10 years, wealth disparity has, because of asset inflation. This does not augur well for social cohesion.

Let us look at some statistics that show how far we have to go before we become a real middle-class society.

The 1990 census found 26,600 households, or 4%, of total resident households who received income below $500 per month and had no working member in the household. The source of income of these families was not known. There were only 2,000 odd families on public assistance. 30% of these families with less than $500 income per month had three or more persons in the household and they must have been in dire poverty.

The 1990 census also found 38,900 households with income between $500 and $999 with four or more household members. There were another 8,800 households with income between $1,000 and $1,499 with six or more members.

These statistics suggested that about one in 10 households, or 10%, in Singapore was either in poverty or vulnerable to poverty.

There is another vulnerable group - the aged. From the monograph No. 1 (Census on Population) by Dr Shantakumar, the findings were:

(1) Singapore's aged population is growing at 3.8% per annum - among the fastest in the world.

(2) Compared to other age-groups, the aged form the largest proportion with incomes below $1,000.

(3) Most of the non-working aged may depend upon personal savings (if any), allowances from children, interest, rents or dividends - this information is not captured adequately in the census.

(4) Females have increased in number throughout the older population and more older women would be widowed in frail old age. Current provident fund savings are rather low for women aged 45 to 54 and this would be reflected among the future aged women. Widowed, divorced and single aged women presently make up to 80,000 persons.

(5) Some further worrying statistics about the aged show that 9,000 aged persons live in single person households and 11,000 aged persons live in non-family households.

These 20,000 aged people may require financial and social assistance. The critical group will be those who do not own their homes, are disabled, non-working and have no savings or other means of support. What financial and social plans do we have for this sector of our society? I would like to hear Dr Hu's response to this.

Mr Speaker, the part of the Budget that I found especially meaningful was the CPF Top-Up Scheme. I think it is a very progressive and equitable step taken by the Government to give $200 to each and every Singaporean over the age of 21 and to put this money into their CPF account.

I hope that the Government will take the necessary steps to open CPF accounts for those who have not done so yet and deposit the money for them and then tell them of their newly acquired wealth. If this is not done, then the old, the infirm and those unable to open their own accounts may miss out on their share.

And, Mr Speaker, how about taking the CPF Top-Up Scheme even further? Why not convert the CPF Share Ownership Top-Up Scheme (SOTUS) into the plain CPF Top-Up Scheme. SOTUS only benefits those who are actively contributing to CPF accounts or those who are wealthy enough to contribute the required minimum sum into their accounts. SOTUS thus excludes the poor and many of the aged whose need for the money is far greater than those who qualify for SOTUS.

2. Instead of putting $200 for the CPF Top-Up Scheme into the ordinary CPF accounts of citizens, the money should be put into the retirement accounts which will give 1.25% higher interest rate. At present, the interest on the ordinary CPF account is 3.1%, I think, while inflation has been calculated at 3.6% and so in effect there is a negative return. If we can slowly build up the CPF retirement accounts of all Singaporeans over the age of 21 from budget surpluses, we will be moving towards self sufficiency and self reliance for each and every aged person.

3. The Minister for Finance is renowned for his prudence and his innovative thinking - would he thus consider creating a CPF Endowment Scheme starting with $1-2 billion and building it up with budget surpluses slowly? The annual interest from this Endowment Fund could be distributed to the retirement accounts of all Singaporeans over 21 years of age. This should not be thought of as a handout but as part of the asset enhancement programme for Singaporeans. It will also help Singaporeans to be self reliant in their old age. Older citizens would then be able to hold their heads high and depend on themselves for their financial security. We would then truly become a developed nation without becoming a welfare state.

I sincerely hope that Dr Richard Hu will consider the CPF Endowment Scheme and we will then have another instrument of social policy like Edusave and Medifund that works in the interests of equity and social cohesion.

Mr Speaker, in concluding, I would like to congratulate the Finance Minister for a great job done for yet another year and I support the motion.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.20 pm.

Sitting accordingly suspended at 2.55 pm until 3.20 pm Sitting resumed at 3.20 pm