ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1995 TO 31ST MARCH, 1996 (Paper Cmd. 3 of 1995)

Order read for consideration in Committee of Supply [1st Allotted Day].

[Mr Speaker in the Chair]

The Chairman: Estimates of Expenditure for the financial year 1st April 1995 to 31st March 1996, contained in Paper Cmd. 3 of 1995. I shall take the totals for each head of expenditure in the Main and Development Estimates appearing in the last columns of the Main and Development Outlays for FY95 on pages 43 and 44 respectively of the Command Paper.

Besides the "guillotine" times for heads of expenditure, which I have fixed under Standing Order 89(7)(a), I have also allotted the time for the discussion of each amendment in the Estimates. I shall announce these times as we go along. Although the sitting time of the Committee of Supply has been extended by one hour each day, we will still be hard pressed for time as a total of 330 amendments has been received.

It will therefore not be possible to allot to Members the time they have requested for discussing their amendments. I shall confine speeches to certain time limits wherever it is necessary to do so. I would ask Members on both sides of the House to keep their speeches short and sweet so that we can keep the debate going at a brisk pace.

I shall deal first with the heads of expenditure in respect of which amendments stand on the Order Paper Supplement.

Head T -

Dr Arthur Beng Kian Lam (Bedok GRC): Sir, I beg to move,

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

Sir, the administration of justice needs to meet two main criteria from the public's viewpoint: (a) it must be fair; and (b) it must be speedy. Implicit in fairness is that it must be accessible, affordable and of a high professional standard.

In Singapore, over the last two years, the Judicature has implemented changes to make the administration of the courts more efficient. This has resulted in the clearing of the backlog, which is bedeviling to many courts in other countries. For this, the Chief Justice and his team, the Attorney-General, the Ministry of Law and of course the legal profession must be congratulated.

However, efficiency has a cost. It is not disputed that legal cost taken as a whole has risen. I do not intend to dwell on this issue as it has been debated both in the profession, in the media and even in this House. Suffice it to say that it is multifactorial, and sometimes not within the control of the administrators or the profession.

There has to be evolved a delicate balance between efficiency and a fair administration of justice. Neither do we want to encourage a litigious society - no one wins.

Sir, one solution is to look into alternative methods of dispute resolution (ADR). In Singapore, some avenues of ADR are already in place: The Singapore International Arbitration Centre (SIAC) is one such example. This centre trains and educates the professionals in ADR, and some insurance companies are already using the SIAC. In these proceedings, lawyers may or may not be involved. The SIAC is backed by the International Arbitration Act passed in this House in October 1994 and has both a domestic and an international role.

The Small Claims Court is another avenue of ADR, and the courts have initiated Court Dispute Resolution schemes and the Family Court is another example of this.

I would like the Minister to consider giving two other groups a role in ADR. Firstly, professional bodies. As the public becomes better informed ---

The Chairman: Dr Beng, the "guillotine" time is 12.45 pm. Can you ask your question?

Dr Arthur Beng Kian Lam: Yes, Sir. I would like to ask the Minister whether he can give the professional bodies another role to play and that he will also give the Consumers Association of Singapore (CASE) a larger role to play.

The other regulatory bodies such as the CIDB and HDB should also have a bigger role. Can I ask the Minister for his views on this and also his views on the role which the Small Claims Courts can play.

The Minister for Law (Prof. S. Jayakumar): Sir, let me say that the keyword in "Alternative Dispute Resolution" is "alternative". Alternative to what? It is alternative to the established or common method of dispute resolution in the legal system which is adversarial recourse to the courts. The courts will always have a place in our legal system. But the Government believes, like Dr Arthur Beng, that we should explore and encourage more use of ADR because it is less costly for the people having disputes. It is less contentious and simpler because it focuses on mediation and conciliation.

We will work together with the AG's Chambers, the courts and other agencies to encourage greater use of ADR. But the Government's role must be that of facilitator. Just as we cannot compel two parties to settle their dispute peacefully or amicably, we cannot compel them to go to ADR. But we can encourage it. It is in our interest to encourage it not only to save cost but also to reduce the burden on the court's time. It will also prevent us from taking the road down to a very litigious society.

The courts have already taken steps, particularly in the CDR (Court Dispute Resolution) which has been given publicity. I believe the Family Court system, with its restructuring, will also focus heavily on mediation and conciliation. The Singapore International Arbitration Centre is uniquely placed because it is also concerned with domestic arbitration and conciliation. We will work with the SIAC to see how it can work with other agencies, including the agencies that Dr Arthur Beng mentioned. Once the infrastructure is in place, the onus will be on private organisations, like the Association of Small and Medium Enterprises, the General Insurance Association of Singapore and other bodies, to put in place ADR as a first or preliminary step before the final decision is taken whether to go to the courts. I think the associations can play a role here. It will be welcomed particularly by disputing parties who would like to avoid costs of engaging lawyers and paying court fees.

The Small Claims Tribunals, in my view, also offer a useful avenue to encourage ADR because the Small Claims Court itself is a form of ADR. The procedures are simplified and the lawyers do not have a locus standi, unlike in the courts. We will explore ways and means of improving and expanding the Small Claims Court system. We are thinking particularly of a scheme whereby there can be regional centres of the Small Claims Courts in various places, perhaps located in community centres or town councils or elsewhere which will bring this method of resolution of conflict nearer to the people.

Dr Arthur Beng Kian Lam: Sir, can I have the Minister's view on the role of CASE?

Prof. Jayakumar: CASE, which is involved in consumers' interests, also has a role to play. But it should work together with SIAC and the Ministry of Law to see how it can facilitate the growth of ADR.

Dr Arthur Beng Kian Lam: I thank the Minister for his reply and beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Mr Low Thia Khiang (Hougang): Sir, I beg to move,

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

(In Mandarin):

According to feedback I have received, the service of the Legal Aid Bureau has fallen short of expectation. I was told that the Bureau was slow in rendering its services and handling of cases. From the workload and performance indicators shown in page 535 of the Budget book, the number of cases completed was reduced from 79% in 1990 to 67% in 1994. Is this an indication that the efficiency of the Legal Aid Bureau has gone down? Or is it because its workload has increased?

I wish to remind the Government that there are many low-income people in Singapore who cannot afford the lawyer's fees when they require legal assistance. Although the Law Society provides legal aid to Singaporeans, the Government has the responsibility to help those who are earning less, and are in a less favourable position in society. I would like to know ---

The Chairman: Order. Mr Low, could you please ask your question because we are running out of time.

Mr Low Thia Khiang: ( In Mandarin): I would like to know whether the Ministry of Law has any plan to improve the services of the Legal Aid Bureau. At present, a person's income must be less than $500 per month to be eligible for legal aid. Will the Government consider relaxing this condition, particularly to one whose income exceeds this limit but is the sole breadwinner in the family?

Prof. Jayakumar: Briefly, it is not true that the Legal Aid Bureau takes an inordinate time or delays in responding to cases. We have done a study and found that in divorce and separation cases which form a large part of the Legal Aid Bureau's work, in fact, the matters have been disposed of in a reasonable time. The perception amongst people who apply to the Legal Aid Bureau that it takes a long time is there in some cases. But the trouble is that many laymen do not understand the intricacies of the law. They go to the Legal Aid Bureau, they make a claim and they think that the matter will be resolved within a matter of days. But the legal process has to be complied with. If the wife wants a divorce, the papers have to be served on the husband and sometimes the applicants themselves do not give information that is required in order to process the case.

There is a perception and this perception has to be rectified. I have looked into the matter and I can assure him that there is no unjustified or inordinate delay. But of course the Legal Aid Bureau will endeavour to do even more to see if the speed with which cases are dealt with can be expedited. 12.45 pm

The Chairman: Order. It is "guillotine" time.

Mr Low Thia Khiang: Sir, I beg leave to withdraw my amendment although I am not quite satisfied with the Minister's reply.

Amendment, by leave, withdrawn.

The sum of $151,523,600 for Head T ordered to stand part of the Main Estimates.

The sum of $205,463,000 for Head T ordered to stand part of the Development Estimates.

Head B -

The Chairman: Head B - Attorney-General's Chambers. Mr Singh.

Mr Davinder Singh (Toa Payoh GRC): Sir, I beg to move,

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

The main sentencing options that the courts have are imprisonment, caning and fine. The type of sentence that is handed down depends primarily on what the law provides, the extent of judicial discretion and the nature and gravity of the offence. Of all the sentences, fines feature most prominently.

In some countries, a new form of sentencing has been introduced and this is called the Community Service Order (CSO). It has been introduced in the United Kingdom and it is also an option that is available in Australia.

In essence, the CSO requires an offender to perform unpaid work on behalf of the community and for its benefit. It can be imposed in England on anyone over the age of 16 who is convicted of an offence punishable with imprisonment. The nature of the work to be performed is left to the supervisors. The question is whether we consider that the CSO has a place in our sentencing policy and that depends on whether our philosophy embraces the concepts of reparation and rehabilitation.

There can be no doubt that for serious offences, there can be no substitute for death, imprisonment and caning. However, there are a range of non-violent offences which can more effectively be dealt with by CSOs or by a combination of CSOs together with fines or imprisonment.

The idea of CSO is not new to this legislature. We have given courts power to make corrective work orders for littering offences. Day release prisoners are employed during the last phase of their prison term. And we have implemented a system of supervising drug addicts. We can therefore go further in this direction.

The advantage of a CSO is that the offender is required to do work for the society. He pays for his crime by contributing in a tangible way. CSOs lower the administrative costs associated with custodial sentences, prevent disruption to the family of the offender, prevent disruption to work commitments and go some way towards protecting the offender's sense of worth. In most cases, CSOs strike a better balance between punishment and rehabilitation.

Sir, CSO may, in certain circumstances, be very constructive, not only for the offender but also for the community. Instead of being stuck in prison and losing his job, the offender can carry on working to support his family and do community work in the evenings and on weekends.

There are many types of work which offenders can be required to do, eg, maintaining facilities for or looking after the handicapped, the disabled and the elderly. Some of them have skills that society can usefully tap. CSOs have the advantage of giving the offender an opportunity to make amends for the harm that he has done and to rehabilitate himself.

In some cases, Sir, we find that offenders have no difficulty paying fines. To them, a fine is no deterrent. They learn nothing from the experience. But they will very quickly understand the consequences of their action if they have to spend their precious leisure hours doing work for others for free. We should consider changing the law to give our courts power to impose CSOs in cases where the courts feel that the offender needs to be taught a lesson in responsibility to society but does not deserve the stigma of being sent to prison.

Sir, I would like the Minister's views, please.

Prof. Jayakumar: Sir, in reply to Mr Davinder Singh, as he himself pointed out, the Government, when it introduced corrective work orders for littering offences, in fact, made a policy decision that we would consider this system of punishment. I would take his question to mean: will we consider extending this kind of punishment to other offences? I think the answer to that is yes, Government is receptive to considering such an extension. Why? For many of the reasons which he has mentioned.

But I would add that it is unlikely that we would introduce it as a blanket form of alternative punishment. Because, in my view, the community work order is not a suitable solution for all offences. Obviously, as he pointed out, for some of the serious offences, we may want a penalty like jail or some such harsh punishment to carry out the deterrent effect of the penalty. It may be more suited for offences where the mischief is more anti-social in nature, and it may be more suitable for juvenile offenders. Another principle to be borne in mind is that we must not let the alternative of corrective work order become a soft option. It should not be regarded as a soft option. The third point which we have to bear in mind and which has been conveyed to me by administrators of such systems in other countries is that it is very labour intensive and requires considerable supervision. In fact, I have been cautioned by people in charge of Ministries of Justice where they have such systems to be careful not to go into this in an omnibus or general way.

Our approach will be that we will be selective in the types of offences where such a system of penalty can be introduced. We will go step by step. As we gain more experience in administering, in policing and supervising such CWOs, I think we will have greater confidence in its extension.

I should say in response to juvenile offenders, my understanding is that last year a committee was formed under the aegis of the subordinate courts to review the Children and Young Persons Act. One of its terms of reference was to examine if the existing sentencing options under the Act are sufficient. The committee is inclined to the view that the adoption of community service orders as a sentencing option for young offenders should be considered. This is one area where we can look at.

Sir, with that response, I hope the Member will be satisfied.

Mr Davinder Singh: Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $19,417,200 for Head B ordered to stand part of the Main Estimates.

The sum of $721,200 for Head B ordered to stand part of the Development Estimates.

Head E -

The Chairman: Head E - Judicature. Dr Soin.

Dr Kanwaljit Soin (Nominated Member): Sir, I beg to move,

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

Sir, the Women's Charter provides for maintenance payments to wives and children after divorce and many husbands fulfil this duty. Also, the newly established Family Court will help further with the mediation of such disputes. However, there are husbands who fail to pay maintenance. Some of these men change employers and do not disclose this to their wives and, therefore, when they default on their maintenance payment, the wives are unable to locate them or trace their employers.

Would the Minister please introduce rules and regulations so that the CPF Board will disclose the name of the husband's employer to the courts or to the wife or her solicitor to enable the maintenance payments to continue?

Here, it will be instructive to heed the recent warning of the Chief Justice who was reported in the Straits Times of 26th February this year as saying that the court's "integrity will be severely diminished when summonses or orders such as payment of fines or spousal support orders are routinely ignored."

The Parliamentary Secretary to the Minister for Law (Assoc. Prof. Ho Peng Kee): Sir, as the Member has said, there are essentially no problems in the issuance of maintenance orders. It is, however, true that some wives may find difficulties in enforcing these orders.

I think the Member will agree that in terms of the procedures of getting the order issued, the processes have been adapted such that they are expeditious. In fact, no lawyer needs to represent the wife and in terms of time frame, it can be done quickly. Also, in terms of the law, the law has bite where, if there is a recalcitrant husband who does not want to appear or who refuses to pay, a warrant of arrest can be issued against him. Even on pain of imprisonment. That sanction of the law can be imposed on him.

However, it is true that in some cases wives face difficulties. For example, the wife may be unable to trace the husband to serve the summons on him. Or he may refuse to attend court. More problematic is when an attachment of earnings order is made but the husband deliberately resigns from the job to defeat the order or to enable him to apply for a downward revision of the order.

As I have said, if there is a recalcitrant husband, the law is there to ensure that he complies with the order. Very often, the problem arises because husbands themselves feel aggrieved at the order itself, at the time when the order is made. Sometimes they want to pay up but he needs more time to work out his finances.

The point I want to make is that this is not necessarily a legal problem because social and other considerations are involved. As the Minister had mentioned earlier, and the Member also has said, the Family Court has just begun its work recently. This court and its processes are eminently suitable to help distressed wives. Its procedures are further simplified. And because of the important point that mediation takes centre stage in the processes of the Family Court, the manner in which an order is reached will very often also have the input of both husbands and wives. So unlike in the past where a husband may feel unhappy because he feels an order is hoisted on him, I think here the important point is that mediation will help distressed wives in a way which has been proven. For example, since the court started its processes, I understand that many cases have been resolved after a complaint was lodged without the need for a hearing. As I said, basically, it is because of the consensual nature of these orders.

I take the Nominated Member's point that we should be mindful of how to help the small number of wives who may have difficulties in enforcing the orders. My reply to her is: let us wait for the Family Court to settle down and do its work. I think any review of the law should be done later on, bearing in mind, as I said, that this is not purely a legal situation, but one where social and other considerations are involved.

Dr Kanwaljit Soin: Sir, I beg leave to withdraw my amendment but I am not completely satisfied with the reply.

Amendment, by leave, withdrawn.

The sum of $36,781,400 for Head E ordered to stand part of the Main Estimates.

The sum of $10,397,800 for Head E ordered to stand part of the Development Estimates.

Head O - 1.00 pm

The Chairman: Head O - Ministry of Foreign Affairs. Mr Chen, take your two cuts together.

Mr Bernard Chen (Brickworks GRC): Sir, I beg to move,

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

Sir, the ending of the cold war several years ago with the consequential de-escalation of confrontation between the super powers raised the hope for world peace to be realised for the balance of this century. There was euphoria all round boosted by most countries' preoccupation now with getting on with the economic and social development programmes. The reality, however, produces quite a different picture. Global tensions have given way to regional conflicts by civil wars waged in countries in several continents. With the super powers on the side lines, the United Nations has been increasingly called upon to send peace keeping missions, especially to the countries where ethnic conflicts have gotten out of control.

In this year, which happens to be the 50th anniversary of the United Nations, it will be timely for us to review its role in the post cold war era and how Singapore's membership in this organisation can remain relevant. We belong to the category of small countries. There have been observations that the United Nations is dominated by the big countries which have considerable influence over the way in which the organisation operates. The question before us is whether Singapore, with its limited influence, can derive maximum benefit from its membership in the UN. We have to look at both political and economic considerations.

The sovereignty and security of small countries are crucial to our survival. Recent events have shown that the UN has a critical role to play. The issue is how effective this is being done. On the economic front, there is an increasing number of regional trading blocs being established. How this regional arrangement can work to the benefit of the respective members and yet promote free trade for the whole world is one key area where the United Nations can exercise its role as a world policeman that it is often trying to do in the political sphere. We will be interested to hear the Minister's comments.

On regionalisation, the Government has put in a lot of emphasis on the drive to regionalisation to create a second wing to our economy. Our own Prime Minister has given his personal support by making extensive trips to the region.

In the past year, the Prime Minister has been to many countries, including Vietnam, India, Myanmar as well as ASEAN. I would like to know how the Prime Minister's visits are supported by our missions in these countries, especially in the area of follow-up required to realise the objectives and programmes agreed between our Prime Minister and the leaders of these countries whom he met during the visits.

Last year, we discussed about the role that Government organisations such as the EDB, TDB and our foreign missions can play in regionalisation. Could we be informed of the progress made so far?

Dr Ho Tat Kin (Toa Payoh GRC): Sir, Indonesia last year, as the APEC host, took the initiative of liberalising foreign direct investments in June. Its action helped generate the atmosphere that led to the adoption five months later of the Bogor Declaration with its objective of free trade and investment. The outcome of the 1994 APEC meeting was a declaration that trade and investment within APEC would be completely liberalised by the year 2020. But specific measures to achieve this objective were conspicuously absent from the declaration, leaving the details to be worked out at this November Osaka Summit.

The advancement of APEC really now depends on how the Japanese would manage the meeting. Sir, may I ask the Minister: Is there a likelihood that Japan will follow Indonesia's example? Or will Japan, notorious for its restricted markets, drag its feet in pushing for the important objective of trade liberalisation and instead push this issue to a back seat?

Following closely will be the ASEAN Summit scheduled for December this year in Bangkok. May I ask the Minister what is the progress of the ASEAN Regional Forum?

Then there is the idea of an Europe-Asia Summit which was first mooted in October 1994 when the Prime Minister visited France and proposed the establishment of a link between Europe and Asia through a summit meeting of Asian and European leaders. Sir, may I ask the Minister what progress has been made since? What are some of the problem areas Singapore will face in launching this Europe-Asia summit? Will ASEAN represent Asia in this case? Or will the other economic powers such as China, Japan and South Korea be invited to take an active part?

The Minister for Foreign Affairs (Prof. S. Jayakumar): Sir, I will deal with the points in the order in which they have been raised.

First, Mr Bernard Chen talked about Singapore and the United Nations. Sir, the UN is a much criticised and often maligned organisation. Sometimes, the criticisms are valid, sometimes, they are not. They are not because its critics do not understand how it operates and they do not realise that the United Nations can only be as effective as the members are willing it to be. We all know its shortcomings and imperfections. But having said that, we cannot escape the fact that despite its imperfections, the United Nations remains the only truly global collective security effort that we have.

Mr Bernard Chen asked how can small states, like Singapore, with its limited influence, derive benefits from our membership. I would first say that for small countries like Singapore, the United Nations is very important. The principles in the United Nations Charter on non-use of force, respect for sovereignty of member states, non-interference in the internal affairs of member states, are all vital principles for the conduct of international relations.

The rule of law is particularly critical for small and law-abiding states like Singapore. Countries like ours will have much to lose if there is no United Nations to promote international cooperation and uphold international law.

The UN enters its 50th year now. During this period, Singapore has been a member for some 30 years. It is a political reality of the international system that bigger countries have greater influence in bodies like the United Nations, But that does not mean that there is no room for countries like Singapore to play a useful and constructive role and help to strengthen the United Nations. As a responsible member of the international community, we have, within our limited resources, tried to play such a role in the UN. Let me give some examples.

First of all, we have strongly supported the role of the United Nations in peace keeping efforts. We have very limited personnel to spare but yet we have participated actively in several UN peace keeping operations, including in Namibia, Cambodia, Angola and currently in Kuwait.

Secondly, a big problem for the United Nations is the failure of countries to pay their dues on time. Singapore makes our financial contributions in full and on time. We have also participated actively in the discussions to resolve the financial crisis of the UN which amounts to some US$2.2 billion in arrears. Singapore is a member of a very important Committee of experts known as the Committee on Contributions.

Thirdly, we have also played an important role in the on-going discussions in the United Nations on the reform and expansion of the UN Security Council and we will continue to play this role in other areas as well.

Fourthly, our representatives at the United Nations and their staff have played a very constructive role in several UN forums and I would say they have done Singapore proud. Our previous Permanent Representative, Ambassador Tommy Koh, was President of the United Nations Conference on the Law of the Sea and later on he also served as Chairman of the Preparatory Committee on Human Environment which led to the Rio Summit in 1992. Our current Ambassador, Chew Tai Soo, was until recently one of the two Vice-Chairmen in the Working Group on Security Council Reform. Our Permanent Representative in Geneva was elected as the first Chairman of the General Council of the WTO earlier this year.

I would say that our approach to the United Nations is not an uncritical or blind approach. We have not, for example, hesitated to express our views when we felt there were trends which did not really advance the interests of the United Nations as an organisation. For example, last year, at the UN General Assembly, Singapore together with many other countries, opposed a draft resolution on capital punishment because we felt it was wrong in principle to use the United Nations' body to adopt a position which reflects the views of one group of countries on a matter on which there was divergent international practice.

Sir, this year marks the 50th anniversary of the founding of the United Nations and we have set up a National Committee under the chairmanship of Ambassador Tommy Koh to celebrate the event here. This will provide a very timely reminder to all Singaporeans about the importance of the United Nations and its relevance to Singapore. Singapore will continue to play its part as a responsible member of the international community by supporting the activities of the United Nations wherever possible and within the limited resources that we have.

On regionalisation, Mr Bernard Chen asked how my Ministry and our overseas missions will follow up on the many visits made by the Prime Minister and other Ministers during the course of the year. Since he himself recounted the countries which have been visited, I will not repeat them.

My Ministry recognises that the goals of regionalisation can best be achieved if the public sector plays a strong supportive role to the private sector. The investments and trade must be private sector driven, but we must give the supportive role. In particular, my Ministry and its overseas missions have gone beyond their traditional roles to provide the necessary support to our regionalisation policy and we will continue to do so. The Ministry of Foreign Affairs therefore takes on a large responsibility in ensuring that the overseas visits by our leaders are effective in laying the groundwork for greater private sector cooperation. Our missions work together with other economic agencies of Government, like EDB, TDB, to ensure the necessary follow-up is carried out. All these have led to concrete progress. In addition, our overseas missions are constantly on the look-out for opportunities for our companies, and would facilitate visits by business delegations and contacts between businessmen.

My Ministry also lends support to managing the Singapore Cooperation Programme (SCP) or Singapore's programme of technical assistance to other countries, which is also important in this regard.

In view of the limited time, let me quickly touch on the points raised by Dr Ho Tat Kin. On APEC, yes, the Bogor Meeting was a landmark meeting. He asked whether in following up we are optimistic about Japan's chairmanship. I have no reason to doubt that Japan, in the Chair, will work earnestly with all other members of APEC to ensure a successful follow-up. In fact, I would say that Japan, as Chairman of APEC, is now developing an action agenda for trade and investment liberalisation, trade facilitation and development cooperation. For Singapore, APEC is, and will continue to be, a major foreign policy priority. We are confident that Japan, whatever its predispositions and its own preferences may be, as Chairman, will do its best to sustain the momentum that has been achieved in Bogor and pave the way for APEC to implement the action agenda. Singapore works closely with Japan in this regard.

On ASEAN, we have attached great importance to ASEAN and the major highlight for this year which we will concentrate on is the ASEAN Summit later this year, and that is important because it enables the leaders to take stock of where ASEAN is now, and what are the challenges for ASEAN in the 21st century due to changing international scene and, secondly, due to the enlarged membership of ASEAN, with the entry of Vietnam and with the possibility in the not too distant future of other countries like Cambodia and Laos coming in to join ASEAN, thereby realising the dream and vision of the founding fathers that ASEAN will represent all the countries in Southeast Asia.

As regards the Europe-Asia Summit, I am glad to report that the European Union has confirmed that they have endorsed the idea. ASEAN is fully behind the idea and there is ASEAN consensus. The job now is to discuss the details and this will be done this weekend when ASEAN officials are in Singapore and they will get down to discussing the details such as the timing, agenda and participation. 1.15 pm

Mr Speaker: Order. It is "guillotine" time.

Mr Bernard Chen: I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $115,404,600 for Head O ordered to stand part of the Main Estimates.

The sum of $39,137,800 for Head O ordered to stand part of the Development Estimates.

Head Q -

The Chairman: Head Q - Ministry of Home Affairs. Amendment No. (1), 75 minutes. Dr Beng.

Dr Arthur Beng Kian Lam: Sir, I beg to move,

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

Sir, the Ministry of Home Affairs has the onerous responsibility of ensuring law and order and internal stability in Singapore. These are the pre-requisites for the economic and social development and progress of our nation.

Last year, our crime statistics showed that Singapore is even safer today. Significant declines were noted for snatch theft, housebreaking, robbery, motor vehicle theft and murder, ranging from 17% to 25% for these offences. I congratulate the Ministry and the Police for their achievement without being unduly restrictive.

Sir, this year, the GPC will concentrate on three specific areas: crimes in construction sites, the Traffic Police and drug enforcement and rehabilitation.

We have not forgotten the problem of juvenile crimes, but have decided to await the Committee Report from the MCD on this problem. This, I understand, will be ready in June this year.

The problem of crimes in construction sites has been highlighted with increasing frequency in the last two years. There is cause for concern because:

(a) they are of a very violent nature;

(b) they often involve groups of people, though not amounting to "gangs"; and

(c) some of these problems can spill into the residential neighbourhood of the work sites.

Therefore, it is not only problems like theft, but consists of more serious crimes like violence, rioting and even murder. Furthermore, the investigation is often made difficult because of cultural and language problems. To compound the issue even further, illegal immigrants or overstayers (immigration offenders) may also be involved.

I know that the Police have been working closely with the construction industry to manage this problem. The construction industry is also anxious from the crime viewpoint. In addition, they are also anxious from another two viewpoints:

(a) costs; and

(b) the problem of sub-contracting, which is widely used in the industry, which makes control difficult.

I would like to ask the Minister, firstly, on the status report on this problem. Secondly, what are the steps being taken to manage this problem? We know that we will always need foreign workers in the construction industry, therefore, the problem will not go away. Lastly, I would like to ask the Minister to give the House an update regarding other crimes of a serious nature that have been linked to foreign workers.

Mr Peh Chin Hua (Jalan Besar GRC): ( In Mandarin): Sir, according to Police statistics, the number of juvenile cases is on the increase in Singapore. In 1993, 1,878 young persons between the ages of 7 and 16 years were arrested for involvement in various kinds of criminal offences. This was an increase of some 400 cases or 27% as compared to the 1,478 cases in 1992. If we take the figure of 983 in 1984, then the number of juvenile cases had increased by some 91% in the past decade. This is indeed very alarming!

Over the years, home education has slackened because in most families, both parents are busy working and tend to neglect in the supervision over their children. In the school, teachers are deprived of the right to use the cane, thus losing control over their charge. Furthermore, the establishment of Neighbourhood Police Posts and the promotion of good Police-resident relationship has been so successful that the policemen are now being publicised as "friends" rather than "law enforcement officers". Parents today can no longer use the "Police is coming" trick to frighten the disobeying children - one of the most effective deterrents in the past! It is good that the image of the Police Force is no longer one of intimidation and fearsome, but the side effect is that people nowadays seem to have lost their respect for the "men in blue". Young people no longer fear the Police and I think this is one of the important factors contributing to the rise in juvenile cases.

We should withhold the dignity of the Police and teach our young people to respect the law enforcement officers, and hence to observe law and order. I think this is very important.

With our economic development and a tight labour market, we have attracted a lot of foreign workers to Singapore, and with the heavy influx of foreign workers we face some serious social problems. In the past few years, there were quite a number of murder cases in Singapore which remain unsolved. Many people are suspicious that hit men from foreign countries are being employed to operate in Singapore. I hope the Ministry of Home Affairs will look seriously into this matter.

The Chairman: Mr Choo Wee Khiang is not here. Dr Soin.

Dr Kanwaljit Soin: Sir, from the statistics for the four years from 1990 to 1993, some alarming facts about the rate of crime by ex-convicts are disclosed and should be of concern.

Sir, with your permission, I will ask the Clerk of Parliament to distribute the relevant Table. [Copies of Table distributed to hon. Members].

I will give the average for four years. For the offence of robbery, ex-convicts comprise 55% of offenders. For the offence of housebreaking, ex-convicts comprised 53% of offenders. For motor vehicle theft, the figure was 52%. For murder, the figure was 49%; and for rape, 42%. Thus, for these offences and from the statistics for four years, half or nearly half the offenders were ex-convicts. The other half were presumably non-convicts.

Thus, it appears that there is a high rate of serious crime being committed by ex-convicts. These ex-convicts have been punished by imprisonment and may have been fined and caned as well for their previous offence and yet they comprise 50% of the offenders for the offences I have enumerated.

I am sure the prison authorities have a programme of rehabilitation and reformation for them but from the statistics, the reformatory part is not effective. Ex-convicts are making a second or even a further strike against society by committing another serious offence. Theoretically, if we could prevent ex-convicts from committing these serious offences against property and person, we would he halving the number of offenders.

Would the Minister please explain this high rate of crime by ex-convicts and also what appears to be an ineffective reformatory process, and what can we do about it?

Mr Zulkifli bin Mohammed (Jalan Besar GRC): Sir, most Singaporeans welcomed the good news that the overall crime rate continued to drop for the sixth consecutive year since 1989. But, like Dr Beng, I am alarmed at the detection of crimes committed by illegal immigrants and also at the degree of lawlessness at construction sites which house foreign workers which, I believe, has not abated.

Certainly this is the price Singapore has to pay for our dependence on foreign workers and for having a buoyant economy that attracts illegal immigrants. Like Dr Beng, I am interested to know what measures the Ministry intends to take to prevent the situation from worsening.

Sir, another crime that is perturbing is the increasing number of molest cases. Although more victims are coming forward to lodge a report, can something more be done to educate our women folk on preventive measures to protect them, particularly against aggravated outraging of modesty? I feel there is a need for the Police, in cooperation with the other community groups, to step up a public education programme and other relevant strategies to combat this heinous crime.

Can the Minister please comment?

Dr Arthur Beng Kian Lam: Sir, for the first time since 1991, the number of persons killed and injured in traffic accidents dropped as compared with the previous year. There was a 11.3% drop in the number of accident fatalities and casualties. For this we want to congratulate the Ministry of Home Affairs and the Police, and in particular, the Traffic Police. Sir, I would like to highlight some areas of concern:

(a) Problems of motorcyclist. Sir, in Singapore, we take the loss of life and limb very seriously. As I look at the accident statistics for motorcyclist, I feel that we have to do something very proactive to curb this loss of limb and life. Some statistics: motorcyclists form 46.5% of fatal accidents and 55% of serious accidents. There is furthermore a definite relationship with age. Age 16 to 19 years - 1,144.5 casualties per 10,000 motorcyclists; age 20 to 24 years - 683.1 per 10,000 motorcyclists, compared to the national average of 242.3 per 10,000.

Sir, parents are very anxious. Spouses are anxious. All of us are very anxious. It is the youngest drivers who are the most vulnerable.

In a GPC visit to the Toa Payoh Training Centre, I am glad to note that at source the competence of new drivers is being addressed. However, this is obviously not enough. As the highest risk groups are those youngest, age 16 to 19, five times the national average; age 20 to 24 years, three times the national average, I would like to put forward some ideas for the Minister's consideration:

(a) Should these persons only be allowed to ride a motorcycle of smaller capacity? The Traffic Police should do a study to see whether there is a correlation between machine capacity and fatality or accident rate.

(b) Should the age limit of holding a licence per se be increased?

(c) What other methods do the Traffic Police have in mind to manage this problem?

Sir, on a wider issue of road safety, we see that the Traffic Police have been tackling head-on the problems of speeding, illegal parking, and drunken driving, amongst others. On the problem of using speed-trap cameras, I would like to ask the Minister to give the House an update of the effectiveness of this.

Some members of the public have expressed the view that the 50 km/hour restriction at certain sites is ridiculously extreme. What is his view? Recently, the PWD has also announced a plan to install video cameras at busy junctions to ensure a smoother flow of traffic. The control centre will be located at the Ministry of National Development. It was stated in the press report that a law enforcement role will also be introduced.

I am concerned here on two counts:

(i) PWD engineers should not be in the business of law enforcement. Traffic enforcement should be with the Police and the ROV.

(ii) Should there not be a more comprehensive management by Government as a whole to use IT (an expensive though effective tool) in road traffic management? There must not be a confusion of roles, and there must not be wastage.

Sir, the next point is the issue of drunken driving. The penalty for drunken driving is severe, and rightly so. However, to tackle this problem, society as a whole ought to be involved. There must be more awareness and education. Hosts of parties and dinners should not put social pressure on drivers to drink. Establishments serving alcohol must also take a responsible approach. I am glad to note that some establishments are already installing breathalysers (to measure alcohol content) for their clients. Should this be made compulsory in certain categories of such establishments? Friends must also play a role, as peer pressure is effective. The final responsibility is, of course, personal - ultimately personal responsibility. Will the Minister give us an update on this problem?

The issue of illegal parking has been discussed in this House recently, and though a problem, I will not pursue this further at this time.

Mr Zulkifli bin Mohammed: Sir, the issue I wish to address is hit-and-run accidents that hit the newspaper headlines recently.

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Sir, in 1993, there were three fatalities but this had jumped to eight in 1994 and it shows an increasing trend and therefore a great cause for concern. Although the statistics may appear small, what is of more importance is the untold suffering and misery that befell on the families of those who died from such accidents, especially if they are sole breadwinners.

Sir, I have read recently that the Traffic Police have set up a hotline to facilitate information from witnesses regarding such accidents. But I feel this is not sufficient and I would like to call on the Traffic Police to recommend enhancing the existing penalties so as to send a strong signal to these cowardly drivers that it does not pay to flee the scene and to accord more justice to the aggrieved families who lost their loved ones.

Dr Arthur Beng Kian Lam: Sir, in a seminar in the second half of last year, the resurgence of the drug problem and the problem of relapses in treatment were discussed. Many new measures were put in place. New programmes were introduced, and high amongst these were the Naltrexone programme and the management of half-way houses by community groups. I would like to ask the Minister to comment on the effectiveness of these new programmes. As the management of half-way houses is very important in the overall drug rehabilitation plan, can he tell us how many new half-way houses were established, what are the community groups involved, and is he satisfied with the level of community support for the programme?

Mr Zulkifli bin Mohammed: Sir, I also fully support this move to involve the community in the form of participating in half-way houses to tackle the drug problem. But from what I know, the response to this half-way house scheme has been lukewarm despite the financial support, both capital and recurrent, that will be forthcoming from the Ministry of Home Affairs. Why is this so? I would like to ask the Ministry: is it because running a half-way house is a daunting task that brings with it prickly problems? Or is there insufficient expertise in the voluntary organisations? I suspect this is so and would like to know what are the Ministry's views and what further steps it intends to take to involve more organisations in this matter?

Mr Low Thia Khiang: ( In Mandarin): In page 22 of the Budget book, it shows that the manpower expenditure of the Ministry of Home Affairs has increased by $92.6 million, mainly to fill up 552 vacancies. My question is, firstly, since when did these 552 posts become vacant and what kind of posts are they? Secondly, why did the Ministry of Home Affairs feel there is a need to fill such vacancies? Thirdly, the EOM expenditure has increased greatly and is it not against the Government policy of maintaining zero manpower growth?

Mr Koo Tsai Kee (Tanjong Pagar GRC): Sir, last year, I raised this issue in the Committee of Supply debate. I am raising it again because I think the matter is important. I would like to ask the Minister why is it that new citizens are not required to take a test before they are granted full citizenship. There are citizens who know little or nothing about our culture, our shared history, our National Anthem and our mission. If these citizens do not know our mission, then how are they going to understand our national policies. If they do not know our culture, how sensitive can they be to our racial and religious tolerance? If they do not know our history, how does the Minister expect them to understand the rationale for some of our tough policies? If they do not understand what our National Anthem means, how are they going to appreciate Total Defence? I put it to you, Sir, if they have no reason to die for Singapore, they have no reason to live for Singapore. If the Ministry says no to a test for citizenship, then the Ministry is saying that all the components that make up nationhood are irrelevant and not important.

The Chairman: Dr Soin, you can take your two topics together.

Dr Kanwaljit Soin: Thank you, Sir. Singapore men are among the growing number of Asians flocking to child prostitutes (some as young as 10 years old) in places such as Thailand and the Philippines. From reports in the New Paper, these Singaporeans range from middle-class professionals, on regular weekend visits, to retirees. Children, whether they are Singaporean, Thai, or Filipino, are the weakest victims in any society. What can we do to deter our men from child sex tourism? Our value system must abhor this type of behaviour and so we have to send the right message to our errant Singaporeans who commit this perversion.

Two countries in the Asia-Pacific region have done something about this problem. They are Australia and New Zealand. The Australian government has recently passed laws making it punishable in Australia for citizens or residents to engage in sexual activities with children under 16 years whilst overseas. These new laws cover individuals and organisations and include the crime of engaging in, encouraging and profiting from child sex tourism. The penalties range from 12 to 17 years imprisonment for persons and fines up to A$500,000 for corporations. Australia has amended its rules of evidence to allow child victims to testify by a satellite video link.

We, in Singapore, could be the first ASEAN country to introduce similar laws. The effect of these laws would be to make those persons or organisations who commit sexual crimes against children overseas responsible for their actions. After the legislation is passed, pamphlets on the offences and penalties should be available at airports, railway stations and other departure points from Singapore.

The head of the Manila arm of the organisation, "End Child Prostitutes in Asian Tourism" has been quoted as saying, "Westerners tend to go for young boys but when it comes to the girls, Asian men are just as guilty." The head of the Bangkok based "Centre for the Protection of Children's Rights" has been quoted as saying, "Many Asians have the wrong idea that only Westerners go to child prostitutes. The truth says that there are many Asians who go to child prostitutes and the numbers are increasing." Does the Minister agree that child sex tourism is unacceptable and something has to be done about it?

The Chairman: Dr Soin, do you wish to continue with your next topic?

Dr Kanwaljit Soin: The Police management of rape in Singapore has greatly improved and the Police have to be commended for this. Some reasons for the improvement are:

(1) The establishment of a violent crime squad by the Police Land Division. This squad specialises in the investigation of rape and thus the standard of rape investigation has improved. The squad has a good mix of men and women officers and this gives greater depth to Police investigation of rape.

(2) There are regular liaison meetings between the Police and affiliates of the Singapore Council of Women's Organisations (SCWO) and other VWOs. These meetings have not only improved the VWO's understanding of Police procedures but with the training provided by SCWO for Police officers in victim counselling and rape management, our officers have become more responsive to victims' needs and improved the Police standard of service.

Sir, this is an excellent example of how non-Government organisations and Government organisations can work together to fulfil a community responsibility. Now, I would like to quote some statistics on offences against women and this is what is happening in Singapore. Two cases of rape reported each week; 50 cases of spousal violence each week; 20 cases of molest each week. Therefore, the problem on offences against women is a worry and a concern. Understandably, after a woman has been raped or molested by a man, the last person she wants to face, especially in rape cases, is another man. To respond to this with sensitivity, I would like to suggest that every police station ought to have one or two appropriately trained woman Police officers on duty. It is especially important for the victim that the first contact and the first person to whom the statement is made by the victim should be a woman Police officer.

I hope that the Minister will be sympathetic to this request as it is in the interest of the victim of the crime and it may also help to encourage more victims to report to the Police so that the offenders will be brought to justice. This will reduce the number of crimes against women in Singapore and improve the quality of our life further.

The Minister for Home Affairs (Mr Wong Kan Seng): Sir, I thank the Members for their comments and questions which I shall try to deal with.

First, on the question of crime in construction sites and crime by foreign workers. I am very concerned about the impact on society caused by the illegal influx of foreigners into Singapore. Last year alone, almost 10,000, to be exact 9,846, illegal immigrants and overstayers were arrested and this is 18% higher than the figure a year before. The majority of these immigration offenders naturally came here to work, not for holiday. As long as the economic disparity between Singapore and the countries where these immigration offenders come from remains wide, then the temptation for foreign workers to seek jobs in Singapore will be high. These workers consist of those who enter illegally, those who enter legally and overstay, as well as those who abuse their social visit passes or their student passes to work illegally.

Let me, in the first place, say that legitimate foreign workers, ie, those who come here and apply for permits and employment passes, play a very important part in our economy. Many of the buildings we live in or work in were built with the help of these foreign workers. We welcome the contribution made by these legitimate foreign workers to our economy as long as they do not flout our laws.

Singapore is small. We cannot afford to have large numbers of foreigners entering Singapore illegally or overstaying to work illegally. The situation at construction sites is of particular concern because large numbers of these immigration offenders have been found at these construction sites. Many construction sites have been used by illegal foreigners to seek shelter or to seek work. Some of these illegal foreigners also turn to crime. So the two problems of crimes at construction sites and illegal immigrants are related.

To quote some figures, in 1994, 151 illegal immigrants and overstayers were arrested by Police for committing various crimes, such as murder, robbery and rioting. This is a sharp increase from the 42 arrested in 1993. The related illegal immigration and crime situation at construction sites are viewed very seriously. Part of the reason for the worsening situation is the poor security at the construction sites which allows unauthorised persons to enter and to use the sites without any control. The principal and main contractors have the responsibility to keep out such illegal immigrants and to prevent crime by implementing adequate security measures at their worksites.

Police have recommended to these worksite contractors some minimum security measures which contractors should adopt to control the access of these worksites to people who have a legitimate reason to be there. My Ministry has also taken various other steps to reduce the inflow of immigration offenders, including equipping our Police Coast Guard with higher speed craft to police our shores. But these measures alone are not enough. There is a limit to which we can use persuasion to get contractors to be more security conscious and to keep out illegal immigrants and overstayers.

The problem will remain as long as there are unscrupulous employers willing to hire illegal foreign workers. If there is no opportunity for illegal work, then there will be no reason for these foreign workers to overstay, or to try to come to Singapore illegally. 1.45 pm

Sir, let me be very clear and very blunt about this, and I am sending a clear and strong warning to every employer who is thinking about employing an immigration offender to work illegally, not to do so. If he has already hired an immigration offender, then he must stop immediately.

If employers need to use foreign workers, there are legal means of securing them. If employers resort to illegal means, then they must be prepared to face the consequences. And I wish to remind this House that there is already in place the provision for mandatory caning and imprisonment for employers of immigration offenders.

Singapore has a reputation of being a relatively safe and secure society. It is my responsibility to ensure that this continues so that all of us and our children can walk on our streets and can sleep in our homes safely. We cannot allow foreigners to evade immigration controls and remain illegally in Singapore. If our borders remain porous, then all kinds of characters can and will come to Singapore and equally we cannot condone employers who flout the law and abet the inflow of illegal immigrants and overstayers by giving them jobs.

My Ministry will amend the Immigration Act to require the principal or the main contractors to put up security and other access control measures by making them fully accountable for immigration offenders found at their worksite controlled by them. We will also be working with the other relevant Government agencies on the measures needed to deter contractors from offering illegal employment to foreign workers.

On the question of crime by foreign workers, we do not detect any organised groups of foreign criminal syndicates coming here to commit crime. What we see are individuals, maybe sometimes they are loosely related groups of foreign workers, who prey on illegal immigrants or the overstayers. Because the victims are either illegal immigrants or overstayers themselves, the foreign criminals have exploited them as the matter is less likely to be reported to the Police. In some cases, the foreign criminals threatened reprisals against the families of the victims if the matter was reported to the Police.

Dr Beng asked what about the other serious crimes committed by foreigners. The number of foreigners arrested rose by about 30% from 1,443 in 1993 to 1,879 last year. Of these foreigners who were arrested, 60% were social visitors, dependant pass or student pass holders. The remainder were foreign workers, either legal or illegal foreign workers. Most of the offences committed by them were minor offences such as shoplifting, but there are more serious crimes committed by foreigners and some of these include murder. For example, in 1993, 13 murders were committed by foreigners but last year there were 19. For rape, in 1994, 11 foreigners were arrested compared to 6 in 1993. For rioting, the Police arrested 29 in 1993 compared to 67 last year. For robbery, the Police arrested 57 in 1993 compared to 100 in 1994. For serious assault, the number increased from 22 to 58 in 1994.

While the Police take a very serious view of all these offences committed, whether they be by Singaporeans or by foreigners, and when they are arrested or when they are caught, I am sure that they will be brought to book and brought to court and we will definitely ask for a deterrent sentence to make sure that they do not come back again if they are foreigners, and if they are Singaporeans, they do not repeat their crimes.

Sir, Mr Peh Chin Hua talked about juvenile delinquency and the high incidence of juvenile crimes and he said that there was an increase of almost 91% in the last 10 years. The Police have also noted this and indeed juvenile crime has continued in the upward trend last year. And this is a matter of concern not just to my Ministry and the Police but also to the Judiciary, the educators, the social workers and MCD. But I do not think it is right to attribute this rising juvenile crime figures to the new approach of community policing by the Police. Community policing is to make people more aware that the Police are there to help them and the Police are their friends and they should not be afraid in approaching the Police if they have a problem. But that does not mean that the Police will lose their authority. The Police authority will be there. If you run foul of the law, I am sure you know what Police authority really means. So it is not true that community policing leads to an increase in the juvenile crime situation.

I also said last year that the increase in juvenile crime or juvenile delinquency is a larger social problem that we are facing today. Law enforcement alone will not be enough to deal with this problem. We must understand the root causes of this larger social problem and one of which would be the erosion of family values. Members would know that last year, an inter-Ministerial committee on functional family was set up and chaired by the Acting Minister for Community Development. They are now addressing this issue. Several sub-committees have been formed and are looking into the specific issues including the question of juvenile crime and delinquency, and I will leave it to my colleague to answer this question.

The Chief Justice has also asked for a committee to be set up to review the Children and Young Persons Act. The committee has completed its study and presented its report and it is now being studied by MCD and the Home Affairs Ministry.

Dr Soin showed us some figures which I provided last year about ex-convicts returning to crime. I must say that no country has succeeded in rehabilitating every prisoner. In fact, no prison programme can be so successful as to ensure that prisoners do not go back to crime. There will always be some recalcitrants who go back to crime after their release from prison. The present prison regime is designed primarily to punish and deter these offenders so that they will think twice about going back to crime.

For those who are responsive to the prison programme, the Prisons Department will give them rehabilitative opportunities through training, education, through work in the prison, to enable them to reintegrate into society. For those who persistently go back to crime, then it will apply progressively harsher regimes with each re-admission to prison to reinforce the deterrent effects of repeat offenders. And I also know that our courts will take a harsher look at ex-convicts or ex-prisoners who repeat offences and when they have a history of convictions, the courts do give them heavier sentences.

The percentages may seem large that 45% of ex-convicts go back to crime, but the number relative to the number of people who are admitted to prison is really not that significant. So if we can think of and find a better way of rehabilitating them and ensuring that no one goes back to crime after he was convicted, then I would like to know what these better ideas are. And if Dr Soin has ideas on how to make the system better, I would also be very pleased to hear from her.

On molest cases and aggravated outraging of modesty, Mr Zulkifli noted the increase in outraging of modesty cases. Yes, indeed, there has been an increase despite the decrease in many of the other types of crimes committed by Singaporeans and foreigners. Outraging of modesty cases seem to be on the increase. Molest is a crime of opportunity. You may laugh but when I asked the Director of CID, "Who is the likely victim of outraging of modesty?", he said, "Any woman, any age." I asked him, "Who is the likely perpetrator of this?" He said, "Any man, any age." "And where will it be committed?", he said, "Any time, anywhere." So it is really a crime of opportunity. But we must not exaggerate this, neither do we want to take this lightly. More than 80% of these cases were simple outraging of modesty. This does not mean that we take it lightly. I take this very seriously and we are very concerned and I am sure our courts are also very concerned.

Recently, it has been suggested, and we are now implementing this with the blessings of the Chief Justice, to allow the televising of court proceedings on molest cases when the accused pleads guilty. The Police "Crime Watch" programme this month will show the first of such cases. And the Police will launch a publicity campaign together with MCD and the Singapore Council of Women's Organisations later this year to encourage victims to report such cases. The Police will also work with the CDIS of the Ministry of Education to introduce crime prevention education on sexual abuse in the health education for schools. And we are hopeful that these measures will help to deter some of these would-be offenders, and if they do not, I am sure we will find other ways of dealing with them.

On the question of road safety, Dr Beng raised the high casualty rate among motorcyclists. Yes, I also share his concern. In fact, I brought this up last year. The problem has not improved very much despite the major public education campaign or programme that we launched last year. Motorcyclists and pillion riders continue to be the most vulnerable group of road users, accounting for more than 45% of the accident fatalities. Members will recall that when this issue was raised in this House last year, I said that the Traffic Police will be studying the issue and several measures were being considered. Specifically, three proposals were suggested: firstly, to require by law that motorcyclists switch on their headlights during day-time; secondly, to tighten the motorcyclists' training and testing programme; and, thirdly, to raise the minimum age requirement for motorcyclists from 16 to somewhere beyond that.

We have now decided to implement these three measures. We will amend the law this year to require motorcyclists to switch on the headlights when they are riding during the day. At present, this law only requires all motorists to switch on the headlights from 7.00 pm to 7.00 am. We will impose the requirement for motorcyclists to switch on the headlights during the day. This will make the motorcyclists more conspicuous on the roads and such measures have also been successfully implemented in a number of other countries.

We have been encouraging this practice through the "Ride Bright Campaign" since 1989 and I am pleased to see on the road nowadays that more motorcyclists are indeed switching on their headlights during the day.

Related to this, we are also requiring all newly registered motorcycles to be equipped with automatic headlight switch-on devices and this device will activate the headlight when the engine is switched on, so that this will be quite useful to forgetful riders when this new law is in place. I think sometime later this year the law will be amended to require new motorcycles effective from, say, 1997 or so, to have this automatic switch-on device.

The second area is in the area of testing for learner motorcyclists. Today, our motorcyclists are trained and tested in the circuit and later this year we require all these learner motorcyclists to be trained and tested on the roads before they are issued with a riding licence. This measure will help to expose motorcyclists to the actual road condition and help to build their confidence. And this will also make Class 2B test consistent with Class 3 test where drivers are already being tested on the roads. 2.00 pm

The third area is in the area of raising the minimum age limit for motorcyclists from the present 16 years old. Accident statistics have shown that indeed the younger motorcyclists are more vulnerable to accidents than the older ones. As to what age this would be, we are still thinking about it. But I have received feedback from others that even for motorcars, we should also raise the age from 17 years to somewhere higher.

The Traffic Police will announce all these details for these measures later this year. Besides these measures, the Traffic Police will continue its public education efforts. Last year, the Traffic Police organised a first "Ride Safely Stay Alive" campaign to educate the motorcyclists on safe riding. There are signs that the motorcyclists are now becoming more aware of their vulnerability. This year, another campaign will be mounted and it will be aimed at getting the motorcyclists to cultivate good road safety habits and to avoid dangerous practices. At the same time, the campaign will also ask other motorists to look out for motorcyclists and be more considerate on the road.

Dr Beng also asked about drunk driving. Indeed we take a very serious view of drivers who are drunk and when they are drunk they should not be driving. As the Member has noted, the Chief Justice has recently announced jail term for drunk driving and I hope that this message will be a deterrent to those who want to drive after they are drunk.

As to whether we should get other establishments, particularly when they serve drinks, to put on breathalyser test equipment to warn their customers, I think the Police will consider this suggestion. If it is practicable, we may want to recommend that it be implemented.

On speed cameras and regulating speeds, the Parliamentary Secretary will answer them afterwards.

Mr Zulkifli was concerned about hit-and-run accidents. Indeed, I am also very concerned about hit and run accidents. But according to the Police, there has been no upward trend in the number of hit-and -un accidents. Over the last four years, the number has averaged between 110 and 130 each year. But indeed this hit-and-run behaviour is really irresponsible and, in fact, sometimes it endangers the life of the person being hit. Under the law, a hit-and-run motorist is liable to be charged for failing to stop after an accident, for failing to report an accident within 24 hours, and for failing to render assistance after an accident. In other words, he can be charged on three counts. If convicted, he could be fined up to $1,000 or jailed up to three months for each of these three offences. The punishment may appear to be light compared to the potential damage, and this could include the loss of life caused by this irresponsible behaviour. In serious accidents, especially in secluded or quiet areas, it is important for the other party to stop and render help to the person being hit or to call for help.

As to whether we should enhance the penalty, I think we must also make sure that by enhancing the penalty, we do not deter more people from reporting a hit-and-run accident. Nevertheless, I have asked the Traffic Police to study this.

Besides toughening the law, I must say that it is equally important that the Police are able to track down and arrest the culprits. If the culprits know that there is certainty of detection, then the chances of them wanting to run away would be less. So the Police will welcome any public responses, in particular, when they notice a hit-and-run accident they should report such an accident to the Police. They should note down the vehicle number of the person who hits and runs and ensure that the information gets to the Police as soon as possible so that they can apprehend the culprit.

Dr Beng asked about the drug situation and what we are doing, in particular, how we are helping the drug addicts and how we are helping the half-way houses, and the progress of the Naltrexone programme. Similarly, Mr Zulkifli is concerned whether we are giving enough help to half-way houses which may be short of expertise and so on. Before I answer these questions, let me update the House on the extent of the drug problem in Singapore today.

Although the drug situation in Singapore remains relatively under control compared to many other countries, our average daily DRC population has increased by 62% over the last five years, from 5,350 in 1990 to 8,700 last year. Despite intensive efforts by the police department to rehabilitate them, the relapse rate of these drug addicts has continued to rise. The overall relapse rate now stands at 81% last year compared to 70% in 1992. Consequently, the majority of these addicts admitted to the DRCs are now repeat cases. But at the same time, the number of new addicts admitted to the DRCs each year for the first time has also increased from 912 in 1992 to 1,488 last year. This is an increase of 63%. All these figures show that indeed we do have a problem, and a serious problem which I mentioned last year, and we will definitely have to do something about it.

If no new and tough enforcement and rehabilitation measures are introduced, then I fear the drug addict population will continue to rise. What then happens? When that happens, we will need to put in more resources, such as employing more Prison Officers and building more DRCs to house these drug addicts.

Currently, the Government is already spending $50 million a year in operating cost in its drug programme and this amount will increase if the rising trend in drug abuse is not checked. In addition to the financial cost to the Government, drug addicts also impose a high social cost on society. We must make a more concerted effort to try to break this problem once and for all. This calls for a drastic change in the way we treat drug addicts. We need to take a tougher and a more drastic stand against drug addicts to deter them from relapsing. We must also discourage new addicts from joining them. Drug addicts must be made to realise that they are not blameless victims who cannot help themselves. They must be held responsible for their addiction. Indeed, it is their families and society as a whole who are the real victims if they remain addicted to drugs.

My Ministry is now in the process of finalising the details of the tougher approach that we intend to take against these drug addicts. We will be introducing amendments to the Misuse of Drugs Act in Parliament later this year to put this new approach into effect. I am now serving notice to all drug addicts that if they did not kick their drug habit early they will face very severe consequences, such as the penal-like DRC regime for even first-timer addicts and the prospect of imprisonment and caning for those who relapse.

I am also considering locking away recalcitrant addicts on preventive detention for a very long period of time. I repeat, recalcitrant addicts will be detained for many, many years. This will help them stay away from drugs. It will save them from the clutches of the drug pushers and, more importantly, it will prevent them from contaminating others in the community. Such drastic measures are necessary if we want to bring down the relapse rate as well as to deter others from taking the first step down this slippery road to drug abuse.

The package of tough measures will be complemented by more intensive, preventive and rehabilitation measures. My Ministry is stepping up its efforts at preventive drug education, especially in our schools, to educate our students on the dangers of drug abuse. A national campaign will be launched in June this year to raise public awareness of this drug problem. We are also upgrading the after-care support for DRC inmates who are responsive to our rehabilitative efforts in the DRC so as to prevent them from relapsing. The Naltrexone programme is one such measure that we will eventually give to as many ex-drug addicts as possible. But looking at the results of the first two batches of drug addicts on the Naltrexone programme, the results seem to be very promising. Indeed, the relapse rate of these ex-addicts on Naltrexone programme has gone down significantly. We are now trying out on more ex-drug addicts.

The Prison Department will also be launching a half-way house scheme in April this year to allow inmates to stay in selected half-way houses towards the end of their treatment in the DRC so as to facilitate their re-entry into society. SCORE, our rehabilitative enterprise, is also planning to employ full time aftercare officers to counsel and guide these ex-addicts after their release from the DRC.

I am happy to inform Dr Beng and Mr Zulkifli that since the drug abuse situation among the Malay community was highlighted at the national seminar last October, a number of Muslim community organisations have indeed come forward to suggest that they are prepared to run half-way houses. Some of these are Perwanit, Jamiyah and the United Indian-Muslim Association. In fact, a new half-way house for female Muslim addicts will be set up by Taman Bacaan. It will be operational from 1st May 1995. This is in addition to the existing two Muslim half-way houses. This is very encouraging and I would like to see more such Malay organisations coming forward to set up half-way houses to help the Malay addicts. Because, as I have informed Members, the Malay addict population in our DRCs comprises 54% of the DRC population.

I would therefore like to urge those Malay organisations, which are still considering whether to set up half-way houses, such as AMP and Mendaki, to put aside their reservations and come and help us combat this problem of drug abuse among the Malay community. We will do as much as we can to help them set up the half-way houses. Our leading organisation, SCORE, will provide the assistance to help them get the management expertise, the professional training as well as financial support to cope with the task of setting up these half-way houses.

Since I am talking about drug addicts, I think I should also inform the House that there is an over-representation of Indians in the drug addict population. It is well known that the Malays constitute a significant percentage of drug addicts in our DRCs. I have just mentioned 54%. But what is not so well known is that the Indian population in our DRCs is also very significant. It is 15%, which means it is more than double the number of Indians in our population. But what is more alarming is that 18% of the new addicts admitted to the DRCs for the first time in the last two years (1993 and 1994) were Indians. That means it is also an increasing number. If the trend continues, then there will be more and more Indians in our DRCs. Therefore, I think the Indian community as well as Indian community organisations must come forward and help us to fight this problem. We have been talking to some of them, SINDA, for example, to interest them to set up these half-way houses to help the addicts to cope with the re-entry into society after their release from the DRC.

Sir, the Government's tough measures to deal with drug abusers will be tempered with preventive efforts to educate the young. There will also be concerted rehabilitative efforts through half-way houses to help addicts who really want to turn over a new leaf, but the Government alone cannot tackle this problem. I look forward to the continued support of the community and the self-help groups to help us resolve this problem.

There are the other issues on the expenditure of manpower, tests for new citizens, child sex tourism and rape management which I will ask my Parliamentary Secretary to answer.

The Parliamentary Secretary to the Minister for Home Affairs (Assoc. Prof. Ho Peng Kee): Sir, Mr Low Thia Khiang has asked about the Ministry of Home Affairs' manpower expenditure, in particular, what he thinks are 552 new posts created. Sir, there has been no increase of the 552 posts. The Ministry of Home Affairs managed to increase the actual strength by this number of 552 in financial year 1993 and financial year 1994 by filling existing vacancies. In 1994, we were able to fill most of our vacancies with high calibre officers by intensifying our recruitment campaign. These newly recruited officers have been deployed to handle new tasks like guarding our coastline in the Police Coast Guard (PCG), security screening and immigration clearance at the Immigration checkpoints and to support existing staff in our penal institutions and drug rehabilitation centres.

As a result of the zero growth policy and manpower reviews carried out regularly by the Ministry of Home Affairs, we were actually able to reduce our authorised establishment by 20 posts in FY93 and FY94. However, this cannot be sustained in view of our increasing workload and new areas of responsibilities. We have asked for additional posts for the upgrading of the PCG and to meet the manpower demands for intelligence work in CNB, drug prevention education and the immigration checkpoints at the Tanah Merah Ferry Terminal. Our manpower requests for additional posts in FY95 are still being considered by MOF. 2.15 pm

Sir, MHA has been taking on additional workload and new activities since 1986 without the creation of additional posts. Posts that were approved in principle by the Ministry of Finance were frozen until last year when we managed to bring our vacancy position below 5% as a result of the successful recruitment efforts.

463 posts were released for programmes that had already been approved and implemented by MHA and its departments. Sir, my assurance to the Member is that MHA will continue to strive for greater productivity and efficiency so that we can cope with increased workload and new activities with minimal increase in staff, without compromising standards and security.

Sir, the next point is the point raised by Mr Koo Tsai Kee. It is a continuation of the debate last year, because he raised it last year in the Budget debate. After our exchange last year, we had asked the Registrar of Citizens to look at the booklet again, ie, the booklet that is issued to all new residents. In fact, they have further improved it by incorporating a suggestion that Mr Koo raised. Now there is a new chapter on the history of Singapore.

Sir, the current requirement of minimum residential stay, this booklet which incorporates essential background information on Singapore, together with a simple and dignified ceremony at the City Hall chambers, when an audio-visual show on Singapore is screened, the Singapore pledge is recited and the National Anthem sung by all attending the ceremony, are adequate for the purpose of ensuring that our new citizens have adequate basic knowledge of Singapore and are initiated into the Singapore family. Administering a simple test like the one in the United States may not serve much practical purpose but add cost and red tape to the process.

Mr Koo overstates his case when he says that by saying no to the test, MHA is saying that the essentials that make up nationhood are not important. Let me say that this is far from the truth. MHA does consider it is important that our new citizens do know the essentials of nationhood.

The next point is the point raised by Dr Soin who has asked whether we would consider laws to punish Singapore men who go overseas and have sex with child prostitutes. Sir, first let me say that MHA does not condone nor would it tolerate any form of child abuse, what more sexual abuse through prostitution. Committing such acts outside Singapore does not make it any more acceptable. It is possible that there are some Singaporeans who go for child prostitutes when they are overseas. Such activities when carried out in Singapore would be considered statutory rape. However, according to the Police, there is no evidence that such activities are being promoted by any local tour agents. If there is, Police will take action against such agents and tour operators. If Dr Soin knows of any such sex tour promoters, she should report them to the Police.

Dr Soin has suggested that we follow Australia and New Zealand by enacting laws to make having sex with child prostitutes abroad an offence. Sir, my answer now is no. Besides the question of jurisdiction, there will also be substantial practical difficulties in enforcing such a law. She has alluded to the examples in Australia and New Zealand. These are current legislation. So let us wait and see how they implement these laws.

The next point that she raises is on rape management. She asked whether we can have in each police station a female woman officer dedicated to looking after rape victims. I agree that rape victims are under tremendous stress and every effort should be made to minimise their ordeal when they make a report and during the police investigation. We recognise that rape victims are generally more comfortable dealing with female police officers. Dr Soin will be pleased to know that my Ministry has asked Police to consider training more female officers to handle and investigate rape cases.

Dr Soin has suggested that we have a female officer in every police station to attend to rape victims when they come to make a report. In a sense, this is already the arrangement. Police's current practice is for a trained female counsellor from the Police Division to be activated immediately to attend to the victim once a report is lodged. While we would like to do better, by deploying a female officer round the clock in each of our 91 NPPs to handle the initial reports of rape, this is not practical from the resource utilisation point of view.

But let me assure the House that the Ministry is committed to improving the management of rape cases so as to be more sympathetic towards the victim. In this respect, as the Member has mentioned, Police works very closely with the Singapore Council of Women's Organisations (SCWO). I am told by Police that SCWO has been very helpful in providing training for our police officers in the Police Academy on victim counselling and victim management in rape cases. The SCWO has also been an effective channel for the Police to obtain feedback on the standard of service the Police provides to rape victims. As mentioned by the NMP, Police and the SCWO have an excellent working relationship and I believe that through this partnership we can work together to further ameliorate the plight of rape victims.

Let me take the point mentioned by the GPC Chairman on speed limits. Sir, this issue on speed limits has been fully debated in this House only recently and MHA's position has not changed. But having said this, let me also add that our speed limits are not cast in stone. They are constantly reviewed. For the moment, the professionals have advised that our speed limits should not be changed. So let us abide by their judgement.

Dr Beng also asked for an assessment of the effect of speed cameras. Based on results so far, speed cameras are effective. At the six locations where the speed cameras are installed. The number of motorists detected for speeding has shown decreasing trends. Compared to December 1994, we saw a daily average of 175 motorists detected for speeding. In January 1995, an average of 109 summonses were recorded, representing a drop of 37.7%. This dropped to 63 summonses in February 1995. This shows that more motorists are complying with speed limits on these roads on account of the presence of a speed detection camera.

One other point that Dr Beng has mentioned is his concern that PWD has confused its role by engaging in law enforcement. Sir, PWD designs, builds and maintains roads and traffic control systems. To ensure the safe and efficient movement of traffic, the CCTV system that was announced by PWD recently is an extension of this role. The cameras will be used primarily for traffic management to ensure smooth traffic flow. Traffic Police will work with the PWD to formalise an arrangement in the event that illegal parking or other traffic offences are detected by the cameras.

Let me assure Dr Beng and this House that PWD officers will not be directly involved in any enforcement action. There is therefore no confusion of roles between Traffic Police and PWD.

Sir, as for Dr Beng's suggestion for a more comprehensive road traffic management by Government, the Minister for Communications yesterday announced the formation of the Land Transport Authority. Traffic Police will not be part of this body but will work closely with it.

Dr Arthur Beng Kian Lam: Sir, I would like to seek two points of clarification from the Minister.

Firstly, he mentioned that for those foreign workers who are found to have committed crimes they will not be allowed to re-enter Singapore. But we know that in many of these foreign countries they can actually change their passports and names and then try to enter Singapore. Are we addressing the problem in this respect?

Secondly, I raised the question about the capacity of vehicles for motorcyclists who have just passed. This arose out of my visit to Toa Payoh Training Centre. When I asked an instructor what sort of vehicle capacity new riders would choose or select and whether he is in a position, as instructor, to advise them to go for smaller capacity vehicles before they go up to bigger capacity vehicles, his answer perplexed me. Because he said that most of them have already come with a fixed view that they want a very big bike. Sometimes, they may be small in physical build but they want a big bike.

Can the Minister comment on this?

Mr Wong Kan Seng: Sir, foreigners who come to Singapore and commit a crime will eventually serve their sentence, be punished and repatriated and they would be on our black list. In other words, we know who they are. And when we spot them, they will not be allowed to re-enter. But we know that some do sneak in through other ways, for example, having a new passport, having a new name, etc, and sometimes it is not easy to detect every case. But the Police and Immigration Department will do their best to detect them. We have to think about how to do this without loading too much onto the system. But we know that many who try to come in have been detected and are sent back.

On the question of new riders wanting to ride a bigger bike, I think it is not possible because all new riders are required to take a class 2B licence, which is a light motorcycle licence, and it is only until they have passed the class 2B and have been on the road for a period before they are allowed to take on a class 2A and a class 2 licence. So those who want a heavier bike, because they think it can go faster, will of course have to go through the early stages of getting a class 2B licence.

Dr Arthur Beng Kian Lam: Sir, I thank the Minister and the Parliamentary Secretary for their replies and beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2). Mr Cheo.

Mr Cheo Chai Chen: Sir, I beg to move,

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

(In Mandarin): Sir, last year, the Traffic Police spent $500,000 to install speed detection cameras in six areas - Holland Road, Yishun Avenue 2, Bukit Batok Road, CTE, PIE and Boon Lay Way - in order to catch the motorists who drive at excessive speeds. The Traffic Police believes that this will help to prevent accidents in these six areas which are accident-prone.

On 23rd January this year, the Parliamentary Secretary to the Minister for Home Affairs cited a study in America to support his reasoning for the installation of these cameras. Personally, I support the installation of speed detection cameras in accident-prone areas. But I do not agree to the speed limit of 50 km per hour along the two stretches of road in Holland Road and along Yishun Avenue 2.

I feel that the 50 km per hour speed limit is too low. It is a well known fact that traffic is very slow in these two areas during the peak hours. In other words, the flow of traffic is affected because of the heavy volume of traffic.

Although speeding may cause accidents on the road, there are also many other factors contributing to road accidents. For example, the attitude of drivers, the lack of safety-consciousness of the pedestrians, those who drive after drinking, impatience and fatigue of the drivers all these are human factors which can lead to accidents on the road. At present, the vehicles on the road and the conditions of the road are all very good. But, because our people are very time-conscious, they fight for every second. The Government has built highways and expressways and the MRT system for this reason - to save time for the people. Although we cannot allow vehicles to speed along our expressways, I think we should not set unreasonable speed limits on the roads. I would therefore suggest that the Traffic Police increase the speed limit in Holland Road and Yishun Avenue 2 to 70 km per hour which I think is more appropriate. Increasing the speed limit from 50 km to 70 km per hour in these two areas will not necessarily lead to an increase in road accidents. 2.30 pm

As I have said earlier, on 23rd January 1995 the Parliamentary Secretary used the American study to support his argument that the increase in speed limit would lead to more fatal accidents. I do not think that was an appropriate example because in the 1990 study, the speed limit used was 55 miles per hour which, when converted to kilometres, would be 88 km per hour.

The Chairman: Order. Mr Cheo, would you like to allow some time for the question to be answered?

Mr Cheo Chai Chen: I am going to finish. Can you allow me to ---

The Chairman: But we need time for reply and we have another amendment. Would you like to finish off?

Mr Cheo Chai Chen: ( In Mandarin): Sir, the highest speed limit in our expressways is even lower than the 55 miles per hour because our highest speed limit is only 80 km per hour. So in the American study, the speed limit was increased from 88 km per hour to 105 km per hour. I feel that the best thing to do is to instil road safety-consciousness among the people, to improve the road conditions such as widening the roads, realignment of roads or creating more fly-overs, overhead interchanges, etc. I hope that the Minister for Home Affairs would consider raising the speed limit in Holland Road and Yishun Avenue 2.

Assoc. Prof. Ho Peng Kee: Sir, the short reply to the Member's point is that this issue has been fully debated in the House just recently. As I have mentioned to the GPC Chairman, the speed limits are not cast in stone. The professionals have considered a lot of factors, including the nature of roads, how they are built, the number of accidents on particular roads, the volume of the traffic and so forth, and the considered view is that the speed limits should stay. But as I have said, they are not cast in stone. Over time, there will be reviews and should conditions permit the raising of the speed limits, that will be done.

The Chairman: Mr Cheo, would you like to withdraw your amendment?

Mr Cheo Chai Chen: Sir, I am not very satisfied with his reply. But I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (3), Mr Zulkifli.

Mr Zulkifli bin Mohammed: Sir, I beg to move,

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

Sir, it is almost a year now since the Fire Safety Act came into force to counter some common fire hazards in public buildings. What I would like to know is whether the SCDF is satisfied that its public education programme is achieving the desired objectives, bearing in mind that the new procedures still require some time for people to be familiar with and also whether there are any serious problems encountered in implementing the Fire Safety Act?

Assoc. Prof. Ho Peng Kee: Sir, I think the best way for me to answer the Member is to recount the implementation of the Fire Safety Act. The Act came into operation in April 1994. It was introduced to impose new fire safety requirements and to enable SCDF to deal more effectively with fire safety related offences.

Sir, the Act is working well. There are four aspects to the Act. The first is the Fire Emergency Plan (FEP). The scheme was introduced in April 1994 and involved 422 public buildings with an occupancy load exceeding 200 persons. This scheme requires buildings to have a plan for the safe, orderly and efficient evacuation of occupants in case of fire. The plan also includes the conducting of fire safety programmes and fire drills. So far, 418 buildings, or 99%, have prepared the Fire Emergency Plans. The remaining four buildings which did not comply were fined $200 each. They are still being monitored for compliance.

Sir, the second phase will commence in the second half of 1995. This phase will involve landed industrial premises with an occupancy load of more than 200 persons. Building owners will be given six months' advance notice.

The second aspect of the Fire Safety Act is the implementation of the Fire Safety Managers (FSMs) scheme where owners and management of designated buildings are required to appoint FSMs to assist them in looking after fire safety matters in the buildings. Currently, there are already 570 FSMs.

Sir, in the first phase, all of the 87 buildings affected complied with the requirement to employ FSMs. These buildings exceeded 19 storeys in height. The second phase which will start in September 1995 will cover about 200 buildings. These are commercial buildings exceeding eight storeys with a gross floor area of 5,000 square metres or more with an occupancy load of 1,000 persons or more. The owners have been notified of this requirement in February.

Sir, the third aspect of the Act is the Registered Inspectors (RI) scheme introduced in August 1994. Up to end February 1995, 571 inspections have been carried out by RIs. The Fire Safety Bureau (FSB) was able to issue temporary fire permits and fire safety certificates for these inspections within three to 14 days. This is a vast improvement over the former situation when it took 14 to 30 days. Spot checks by FSB are carried out to ensure that the standard of fire safety is maintained under the scheme.

Sir, the fourth aspect is that FSB has also stepped up its enforcement action against people who are responsible for the creation of fire hazards in buildings. Building owners and tenants are now more aware of the offences and punishments that will be imposed on them. Most have heeded the warnings issued by FSB for offences such as the locking of fire exits and obstructing of common corridors. In addition, overcrowding at public entertainment places is now under better control, as owners are taking steps to limit the admission rate to the permissible level.

The bottom line, Sir, is that so far the Fire Safety Act has worked well and the beneficiaries of course are Singaporeans who can now feel safer.

Mr Zulkifli bin Mohammed: I thank the Parliamentary Secretary for his reply, and I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $811,420,500 for Head Q ordered to stand part of the Main Estimates.

The sum of $220,000,000 for Head Q ordered to stand part of the Development Estimates.

Head V -

The Chairman: Head V - Prime Minister's Office. Amendment No. (1), Mr Das.

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

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

Sir, there are many reasons for the success of Singapore as it stands today. The contribution of the Singapore civil service is an area which should not be underestimated. We are indeed very fortunate to have an efficient and committed civil service. Everything should be done to keep it this way. Young graduates join the civil service for many reasons. But one main reason, I believe, is security of tenure that the civil service offers as compared with the private sector.

Sir, I am informed that, recently, about 30 to 40 senior civil servants have been told, in one way or another, about changes in their career in the Administrative Service. This, I am also told, involved personnel from the middle level as well as fairly senior level. Apparently, this exercise has caused some unhappiness and uncertainty. So I would like to know the reasons for these swift changes and also if there are any long term implications as a result of these changes.

The Deputy Prime Minister (BG Lee Hsien Loong): Sir, the Member asked about the effect of the changes of the civil service on several Administrative officers whose careers have had to be shifted.

To put it candidly, the officers affected are naturally disappointed because they expected to continue to serve, and we have had to tell them that we have to make adjustments to their careers. But the Member may rest assured that the civil service is not casting good officers aside. Not everybody is suited for Administrative Service appointments. When you interview, you take people who are promising. Some turn out well, some do not. If every one who comes in turns out well, that means there must have been many promising ones whom we turned down and passed by because we were too stringent in our selection. So we will have to continually evaluate the Administrative Officers who are working with us, decide who is moving up, who is not performing and is to be chastised, who is performing but not suited to an Administrative Service career and should be channelled into other paths in the civil service.

I emphasise that the difficulty is not a lazy officer or an under-performing officer. That is very easy. You court-martial him, you cashier him. He is finished. The difficulty is a good officer whose aptitudes and talents and interests do not fit the requirements of the Administrative Service job. What do you do with him? I think our responsibility, both to the officer individually and also to the service, is to deploy him where he can perform best. And the cases which the Member has mentioned, PSD has spoken to each one of them individually. In quite a number of cases, we have worked out deployment plans, posting plans, conversion into other services so that they continue to have fulfilling, challenging careers suited to their skills and where they can continue to make a contribution to the civil service and to Singapore.

I do not believe the service as a whole is demoralised. It is natural at the time of rapid change for people to feel uncertain, to feel concerned that familiar landmarks are shifting. But we have urgent reasons to move fast. We discussed them here before, and I have explained to Members why it has been necessary for us to compress into a few months changes which, if we have had the foresight and the luxury, we would have preferred to have made over 4-5 years.

I am confident that as the effect of the new policy sinks in, faster promotions, better recognition for deserving officers, more realistic pay in line with market rates, more flexible management, decentralised to Personnel Boards and more authority for senior civil servants, for superiors over subordinates, and therefore more power to get their job done, I am sure that morale will rise and performance will improve.

Mr Chandra Das: I thank the Deputy Prime Minister for his answer and feel assured that the service is not demoralised. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), Mr Das. 2.45 pm

Mr Chandra Das: Sir, I beg to move,

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

Sir, it was stated in this House in 1989 by BG Lee Hsien Loong that top talent is a national resource which must be properly managed. We must be able to deploy them anywhere we need them in the public sector or even in the private sector, and not just within the narrow confines of the service which they belong to.

Sir, our bright students win President's Scholarships, SAF Scholarships, Overseas Merit Scholarships and are bonded to serve the Government after completion of their courses. This policy has resulted in the over concentration of talent in the public sector. While the public sector has benefited from this, I think it may have also created some problems of overcrowding and bunching. I would like to ask the Minister whether the Government has any plans to share this talent pool with the private sector. Especially with the regionalisation drive, there is a need to re-examine this policy.

Mr Lau Ping Sum (Ang Mo Kio GRC): ( In Mandarin): Sir, we have entered the information age. All kinds of information have been pouring in. This great amount of information sometimes makes it very difficult for people to handle. Some people say that information, and not land, labour and capital, has become the key competitive factor in the world today.

Singapore is a small country. We have been sending our students to be trained overseas. It is a good policy. But the trend so far has been to send students mainly to the English-speaking world. Every year, the PSC has been awarding many scholarships to our young people to foreign universities for undergraduate studies, mainly in the United States and the United Kingdom. Of course, some European countries like Germany, France and Asian countries like Japan and China do offer university places for our scholars. But the numbers are small.

I feel that we should offer more scholarships tenable in universities in Asia, because this will be of increasing importance to our young. If our better students are receiving university education only in the West, they would gradually lose a sense of the history and culture of Asia. The success of Japan must have quite a lot to do with her traditions and culture. Their quality control, their work attitude and company loyalty are important success factors. The economic reform in China has caused many people to start learning Chinese. Although we have been promoting the bilingual policy in Singapore for many years, most of our students can only handle simple, daily conversation in Chinese. If they were to engage in more technical and profound discussions or business negotiations, they would, more often than not, find their command of the language inadequate.

I feel that the PSC should offer more scholarships for our students to go for further education in the universities in the Asian countries.

BG Lee Hsien Loong: Sir, Mr Das asked whether there is an over concentration of scholars in the public sector. I regret to report that there is no such over concentration.

The number of students scoring outstanding 'A' level results has gone up year after year, as our students get better prepared. The JCs do a good job of teaching them, 'A' level results improve. Numbers scoring three As, four As, by the hundreds. And yet the number of students whom the PSC has awarded their top level of scholarships - the Overseas Merit Scholarships, the SAF Scholarships, SPF Scholarships or the President's Scholarships - has remained constant, about 50 a year.

The students have so many alternatives to PSC scholarships that, in fact, the PSC has to struggle to get students to be interested in their brand of scholarships. And if you read the special feature in the Straits Times last week, I believe, on two days, you will see the enormous menu of choices which pupils have available, including, not least, parents' scholarships, for thousands of Singaporeans.

The problem is not an over concentration of talent. Our worry is the opposite one. Are we still getting the best in on the PSC scholarships so that the public service starts off with a fair share of outstanding talent and later on they can bloom and go wherever they are needed in the private sector, in the statutory boards, GLCs, civil service, politics, whatever?

We are not sure. We ask ourselves this question every year. We try to study the data. Data show that their examination results are as good as ever. And we know that at the entry point, when people first join the civil service, they show a lot of talent and promise. But will we have the same outstanding civil servants whom we produced a generation ago who are now Permanent Secretaries? We are not sure and we will have to wait and see. We are concerned.

Even after we get people in, we have a hard time keeping them there. Only 70% of scholars complete their bonds. We post draconian bonds, but 30% find ways to pay them off.

Mr Chandra Das: Good employers pay for them.

BG Lee Hsien Loong: Good employers do so. Generous employers do so.

PSC estimates the long-term attrition of scholars at 50%. In other words, by the time they reach their 40s or 50s, half still remain. I think this is optimistic because, from my experience of Administrative Officers, there have been many years where the whole cohort has disappeared, long before they reach their 40s or 50s.

The basic question is: are we better off with too much talent inside the Government or too much talent outside the Government? Or to put it in another way: do you prefer a Permanent Secretary who knows more than his job requires and therefore can keep control of the overall situation? Or do you prefer the private sector person to be smarter than the Permanent Secretary, running rings around him, because the private sector is where the wealth is being created? My preference, which can only have been confirmed by the Barings' experience, is to have a Permanent Secretary who knows better than the private sector. And if there are too many such Permanent Secretaries, I can tell you that talented young Singaporeans are very sensitive to over crowding, and if they see that there are other very bright people around who are already occupying key posts and not in danger of imminent retirement, they will make their own plans and movements, and deploy themselves into the private sector, as many have been doing.

So I think, overall, we do not have a bad situation. Our challenge is to keep it like this and to strengthen the public sector as much as we can. In this respect, I believe the private sector can look after itself.

Mr Lau Ping Sum suggested giving more scholarships to the Asia Pacific region, because this is where the boom is. This is where we must understand our neighbours, how they succeed, what their values are, what their thinking is. I agree with him.

The PSC has been granting scholarships for undergraduate studies to universities in Japan since 1961, now more than 30 years. In 1978, they started sending students to Taiwan and since 1993, we started sending students to the PRC. Now we send more than 10 students a year to these countries.

Mr Lau is completely right that we have an over concentration and emphasis on British and American universities because of our heritage, because of our English-speaking background. It is a problem. But the problem is not that the PSC is not giving enough scholarships or willing to award them. The problem is to find enough students who are willing to study these languages and to be channelled into these other systems to study what still appears to them something alien, and have the confidence that they will come back, first, with as good an education, second, with career prospects undiminished from having gone to another course, taken longer and maybe not as familiar or prestigious a university. This is a problem. I think that as more students in the schools study Japanese, German or French, third languages, the supply will increase. It is the right thing for them to do individually, because if you know who are the peoples who are going to be the wave of the next century, you want to have a fair proportion of Singaporeans who know Japan, China or Taiwan as closely as overseas graduates know Australia, New Zealand, England or the Ivy League universities in America.

The PSC will continue to encourage students who are suitable to take up scholarships in these non-English speaking countries. There were some hindrances. For example, last year, I spoke to Administrative Officers and one of them stood up and said, "I went to Germany and I graduated at the age of 28, because the course is long and I have to learn German. By the time I came back to start work, national service and so on, I was quite old. And you say that I will make Superscale G by the age of 32. I calculate that even if I get a promotion every year, I won't make it there. What say you?"

I reassured him. First, if he is good, he will get there. Second, if for technical reasons he cannot make it at 32, then at the next promotion after that, he will catch up and we will not hold it against him. In fact, we should reward him for having gone on a more adventurous, more arduous, course and come back with a tale to tell. So we hope more will follow his example.

Mr Chandra Das: Sir, I would like to thank the Deputy Prime Minister and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The sum of $106,748,280 for Head V ordered to stand part of the Main Estimates.

The sum of $24,315,700 for Head V ordered to stand part of the Development Estimates.

The Chairman: Order. I propose to take the tea break now.

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

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

Sitting accordingly suspended at 2.58 pm to 3.20 pm. Sitting resumed at 3.20 pm

[Mr Speaker in the Chair]

Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

Head N -

The Chairman: Head N - Ministry of Finance. Amendment No. (1), Dr Ow.

Dr Ow Chin Hock (Leng Kee): Sir, I beg to move,

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

Sir, under this amendment, I wish to focus on Goods and Services Tax. Based on the first year's experience, the implementation of GST can be said to be successful. The much feared increase in inflation rate did not materialise. It was kept at 3.6% last year. I agree with the Minister that credit should be given to retailers, other businesses, CASE and grassroots organisations for their efforts and cooperation in containing increase in prices and guarding against profiteering. However, we must acknowledge that the low inflation last year was partly attributable to the strong Singapore dollar, which checked imported inflation at 0.7% level. However, both the GST collection and the GST offset package are much larger than the originally estimated figures. The Minister attempted to explain the variance yesterday, but I am not totally convinced. So I am moving this amendment to give the Minister another opportunity to explain.

Sir, the GST revenue collection has been revised to $1.5 billion, 56% higher than the originally estimated $0.96 billion. The much larger GST collection cannot be explained away just by "unexpectedly high economic growth" alone. GDP at current market prices increased by 14.5% in 1993 and 14% in 1994. These are higher than the projected growth figures, but this cannot explain the 56% under-estimation of GST revenue collection. GST is a tax on consumption. So the more relevant figure is private consumption expenditure (PCE), but PCE increased by only 11.4% in 1993 and 8.4% in 1994. GST collected at every stage of the value-added chain - from the raw material supplier to the manufacturer to the wholesaler and finally to the retailer - should add up to GST paid by the final consumer. If we use the 1994 private consumption expenditure of $42.3 billion as a base, then the GST revenue should be $1.27 billion, and not $1.5 billion. At 3%, $1.5 billion revenue has to be collected from a PCE base of $50 billion.

May I ask the Minister what are the other reasons for these discrepancies, say, between the original estimate of $0.96 billion and the revised figure of $1.5 billion and between the $1.5 billion and $1.27 billion? There are several questions here, Sir: (1) Has the PCE been consistently under-estimated? (2) Have some businesses ended up in paying GST themselves, even though they are supposed to be mere collection agents? (3) Are there any outstanding claims for tax refund at this point which has not been provided for because of time lag? (4) Has the revised estimate of $1.5 billion GST collection attempted to include the multiplier effect of the income tax cut and the non-tax offset? Both will increase the disposable income and the PCE, and hence GST collection. Finally, is GST imposed on bills, inclusive of tax, for example, tax on PUB charges and water consumption tax? This is tax on tax.

Sir, similarly, the GST offset package has been revised upwards to $1.7 billion, 41.7% higher than the original estimate of $1.2 billion. I am glad that the Minister has given a breakdown of the revised package into revenue forgone for income tax cut, property tax rebate and increase in subsidies for education and health services. But what is the amount of HDB rental and S&C charge rebates? Such a breakdown is important as it shows the incidence of the tax, ie, who eventually bears the tax burden. From the figures given by the Minister, it appears that those with higher income or higher purchasing power have ended up better off because of income tax cuts in this tax reform. There is nothing wrong with that if we wish to provide incentives for wealth creation. But the more important questions are: (1) Have the rebates offset the GST burden of the lower income households which had paid little or no income tax before? (2) How many of the retirees and pensioners who are not living in HDB flats have made claims from the so-called CCC Assistance Scheme?

Finally, Sir, one significant fact that arises from the larger than projected GST collection is that if economic growth continues at a steady rate, the Government should be able to keep the GST rate at 3% even after five years as the tax base will be much larger and growing. In this context, may I ask the Minister to clarify one statement he made, ie, "making GST revenue neutral in the long run". Is this an ex-ante concept or ex-post concept? Another question is whether the Government has accepted the 1986 Economic Committee's recommendation that "the Government should shift from direct to indirect taxes as its main source of revenue"? If the Government has accepted this recommendation, how will these two long-term objectives be achieved at the same time if the income tax rate is brought down only to 25%, and given the fact that direct taxes still constitute the main source of tax revenue now? Are these two long-term objectives consistent?

The Chairman: Mr Chng Hee Kok and Mr Heng Chiang Meng are not here. Mr Leong Horn Kee.

Mr Leong Horn Kee (Thomson GRC): Sir, the Minister has said several times that the GST was not intended to increase overall tax collections. If I could quote from his Budget Statement, the Government is committed to making GST revenue negative in the short run and revenue neutral in the long run. Sir, I would like to raise a query whether in fact the GST is tax neutral to corporations at the moment.

Allow me to explain further. Corporations have to pay 3% GST on their sales on a value-added basis. Then they get relief by enjoying a 3% cut in the corporate tax. I understand that for some corporations, the net effect is not revenue neutral. Corporations may be in fact paying more tax than the tax relief that they are enjoying. Let me illustrate by giving a very simple example. Let us say a company bought a product for $80 and it has to incur a GST of 3%, which is $2.40. If he sells this product for $100 and charges the GST of $3, which is 3%, therefore his net GST payment is $0.60. It is $3 - $2.40. If he can sell this product for $100, he makes a profit of $20. But if he has to pay, in addition to the net profit, for salaries and other charges of, say, about $10, his net profit actually would be just $10. On this $10, his tax relief of 3% is only 30 cents. So therefore 60 cents minus 30 cents, he has actually incurred an additional tax via GST of 30 cents, because he has to pay 60 cents for GST and he gets only 30 cents back from the corporate tax relief. 3.30 pm

With this illustration, I think we can see that the GST could pose a heavier burden for corporations and not tax neutral. In fact, there are some companies which mentioned to me that they are checking through their accounts and perhaps wait for a whole year's account to be prepared to see whether the total GST paid versus the total tax relief they earn would in fact be tax neutral or not.

I would like to urge the Minister to also look into this matter. If it has been the case on an overall basis and there has been a heavier tax burden on corporations as a result of GST, the Minister can then seriously consider further cuts in corporate tax rates.

On another matter of the GST now being charged on individuals, I have made a proposal in the Budget debate that the Government can consider allocating some form of community fund to each constituency, say, of $250,000 per constituency. This only amounts to $20 million a year nationwide. This fund can be administered by grassroots organisations for use as direct relief to the poorer and the under-privileged people within the constituency. The Minister has not replied to this proposal. Perhaps he may want to consider this or ask his colleague, the Minister for Community Development, to consider the proposal.

Mr Chay Wai Chuen (Brickworks GRC): Sir, I share the views expressed just now by Dr Ow on the discrepancy in the estimates on the GST collection and offsets. The Minister attributes this over-shooting of the estimates to the strong growth of the economy. However, the economy only grew by 10%. And if you take consumption tax revenue, it can be estimated from the national account figures by multiplying the total consumption by 3%. This total consumption figures are found in page 104 of the Economic Survey of Singapore.

Can the Minister explain why there is such a big discrepancy in the initial figures given to Parliament on the estimate on GST revenue?

He explained yesterday that only private consumption expenditure was used in the estimation of the revenue from GST. Can the Minister explain why Government consumption expenditure was excluded in the first estimate, since Government spending is an important feature of the economy?

This discrepancy is interesting to me because given the usual thoroughness of our officials, it could imply some discrepancy in our national account figures. The Minister has also said in his reply yesterday that private consumption expenditure may have been under-stated. As total consumption is an important component of our national income accounting, does it also mean that our national income accounts have also been under-stated? Is the Singapore economy much bigger than what has been revealed so far in our Economic Survey? It would be interesting to know from the Minister whether this GST exercise will also be used to benchmark our national income accounts and whether any adjustment in our national income accounting is necessary.

Mr Koo Tsai Kee: Sir, there are no price-tagging laws in Singapore. But in most developed countries there are laws on price tagging. Even Malaysia has such a price-tagging law.

Sir, I think price tagging of every item in every shop is certainly not justified because it adds to the administrative cost of the retailers and it may even detract from the joy of bargaining from the consuming point of view.

But I think price tagging in GST-registered shops should be made compulsory. Why? Because these are relatively big retail outlets where the adminstration can back up the price-tagging exercise. Also, a 3% GST on a big ticket item can come to quite a substantial amount and consumers need to know at the outset how much the product costs and how much he or she needs to pay on the GST.

Price tagging will also help tourism in Singapore and I note that the global tourism seminar is still currently being held. Tourists need transparency. Shopping in Singapore is no longer cheap, but it can be pleasant. Big spenders, high value-added consumers, are not so much concerned with price per se. What they want is efficiency, transparency, service. Price tagging prevents misunderstanding between the retailer and the consumer and it can be a significant part of the shopping experience.

CASE - Sir, I am the President of CASE - receives many complaints from tourists because they have some misunderstanding on the prices. And I think many of this misunderstanding can be prevented if we ask GST-registered shops to price tag their products.

I hope the Minister will consider my proposal.

Dr Kanwaljit Soin: Sir, first, I would like to ask the Minister about his intention that GST should be revenue neutral in the medium term. How many years is "medium term"? And secondly, if GST has been implemented to change our tax philosophy and system, then why do we want it to be revenue neutral in the medium term, considering all the trouble that we are going through to implement GST?

Next, I would like to say something about GST and voluntary welfare organisations (VWOs) and here, Sir, I would like to declare my interest as a Board Member of the National Council of Social Service (NCSS).

I am aware that there is a Government grant on GST for VWOs. The Ministry of Finance has allocated $163,000 to MCD to help NCSS and VWOs offset the input of GST. For this, I would like to say thank you.

However, I wish to point out to the Minister that these voluntary welfare organisations which are mostly run by dedicated volunteers have to do a great deal of paper work to get the offset for the GST. Would the Minister be able to implement procedures so that the administrative burden is minimised and thus, the volunteers or staff of the VWOs can concentrate their time and energy in serving the needs of the community and not doing so much paper work?

Mr Chew Heng Ching (Eunos GRC): Sir, the Minister had announced last year that the property tax rate for industrial, commercial and let-out residential properties will be gradually reduced to 12% over four to five years. The rate was reduced from 23% to 16% in 1990. Last year saw a further reduction of 1% to 15%. And in this year's Budget, the Hon. Minister has further reduced it to 13%.

Sir, this shows that the Government is concerned about the increasing cost of doing business in Singapore and the need to enhance our competitiveness vis-a-vis our neighbouring countries. But this reduction in property tax will achieve its objective of reducing business cost only if landlords pass the reduction to the tenants. But is this the case in practice?

Sir, based on feedback I have gathered from businessmen, particularly those in the retail trade, this is seldom the case. The Minister had said yesterday in the House that the Government will demonstrate and take the lead by ensuring that the JTC, and subsequently the HDB and other Government agencies owning properties, pass on the property tax reduction to the tenants. I think, Sir, this is indeed a very good move on the part of the public sector.

The question is: how does the Government ensure that the private sector landlords do likewise? Will the Government consider making it compulsory or even passing legislation to ensure that the latest reduction of 2% in property tax be passed on to tenants to help reduce the cost of doing business in Singapore?

Sir, I move to one more point on property tax, ie, the withdrawal of property tax exemption for land under development, as announced by the Minister in the latest Budget Statement.

At present, land under development is exempted from property tax for a period of up to five years and this exemption was introduced in 1987 to help businessmen tide over the economic downturn in 1986. The Minister has said that in this year's Budget, given the current strength of the economy and the property market, this tax exemption is no longer necessary.

Sir, I feel that the withdrawal of this tax exemption for land under development is untimely. It should have been withdrawn, say, two years ago in 1993 when the property market reached its peak, and not now. The market is already softening and many property development companies are quite apprehensive about the business outlook in the next one to two years.

May I therefore ask the Minister why the oversight, if any, in not removing the tax exemption earlier and why do it now? And by doing it now, will it add further fuel to the already high prices of properties in Singapore?

Dr Ow Chin Hock: Sir, under amendment (c), I wish to raise some issues on tax and non-tax revenue.

In this year's Budget Statement, the Minister has explicitly recognised both tax and non-tax burdens. In Table 1 of his Budget Statement, Singapore's tax revenue was estimated to be 17.7% of our GDP, which ranked the third highest among the eight ASEAN and NIEs, after Korea and Malaysia. Singapore's non-tax revenue was estimated at 4.4% of our GDP, again the third highest after Taiwan and Malaysia. Based on Singapore's GDP of $105.3 billion in 1994, the non-tax revenue was $4.6 billion. This is a sizeable amount, about 3.1 times of the GST revenue and 57% of the corporate and personal income tax revenue in 1994.

Sir, non-tax revenue is collected from various fiscal measures which allocate scarce resources, for example, the COE allocates scarce land and the foreign workers' levy allocates labour. For businesses, the non-tax and tax measures are costs, and whether these items appear above or below the bottomline is immaterial. Similarly, for households, both tax and non-tax measures are a fiscal burden that reduces household disposable income. Thus, the fiscal burden, whether from tax or non-tax measures, on businesses and households must be taken in totality. The overall level of this fiscal burden must be kept low so as to (a) check rising business costs, (b) attract foreign investment, and (c) provide maximum incentives for wealth creation.

In this context, the Minister may wish to consider two suggestions: First, changes in non-tax measures should be coordinated in terms of their effect and timing. While each non-tax fiscal measure may be justified in terms of its specific objective, but taken together, the burden of non-tax measures can be substantial and they need to be monitored. In terms of timing, as far as possible, changes on non-tax measures should be announced together with tax changes in the Budget Statement so as to facilitate business planning and provide a greater degree of certainty.

The second suggestion, Sir, is that as non-tax revenue also represents withdrawal from the macro-system, it may be desirable to inject part of the revenue back into the system in the form of contributions to specific funds rather than into the Consolidated Fund. For example, part of the COE revenue can be channelled into a public transport improvement fund, and part of the foreign workers' levy collection can be siphoned off to the Skills Development Fund. While tax revenue is put into the Consolidated Fund, from which expenditure on administration, defence, infrastructure and public goods can be met, non-tax revenue should be linked to the expenditure on activities which help to reduce the demand for and/or improve the efficiency in the use of scarce resources, such as land and labour. I know the Minister is not in favour of such linkages. However, I wish to persuade him by pointing out that, (1) economically, such linkages do not compromise on economic efficiency, and, (2) politically, they are desirable. Such linkages enable payers of non-tax revenue to see the external benefits of their contributions and, hence, make the non-tax fiscal measures more acceptable or at least less painful. 3.45 pm

The Chairman: Mrs Yu-Foo is not here. Mr Leong.

Mr Leong Horn Kee: I am not speaking.

Mr Chay Wai Chuen: Sir, once again, the Minister is pleased to report another surplus of $7 billion before transfer to the various funds. This represents 6.8% of the GDP in 1994. For 1995, it is expected that the surplus will be $5.75 billion. Looking at the Singapore economy over a period of 35 years, one can say quite certainly that budget surplus years are good years and budget deficit years have been bad years for the economy. One can therefore only fault the Minister at one's peril over the budget surpluses. The Minister has also quite correctly said that the budget surpluses have been the result of good economic growth. However one defends this, one cannot run away from the fact that too high budgetary surpluses over an extended period must represent a net withdrawal of private sector funds which otherwise could go to raise private sector's disposable income.

When the budgetary surpluses are persistently large, as in the last few years due to higher collection in revenue and statutory charges and fees, over an extended period private sector demand and investible resources must be affected. The dynamism of the private sector economy can be affected which, over time, can affect the growth and efficiency of the overall economy. True, the overall national savings rate and reserves can go up or remain high because of this diversion. But at the time when we are hearing so much about private initiative and effort in the free market, the Government should consider moderating the high budgetary surpluses and allow more private sector decision-making in the economy.

Mr Chew Heng Ching: Sir, I applaud the Minister for introducing the Budgeting for Results (BFR) system in the civil service. Under the BFR system, funds are allocated and greater managerial autonomy granted to Government Ministries in exchange for clearly defined objectives and outputs.

Sir, the BRF system will make the civil servants more productive and cost conscious and, hopefully, enhance the performance of the public sector. I strongly advocate the BFR system for it makes the public sector more productive and civil servants more careful in the use of public funds. And, hopefully, with this new system, inefficient, wasteful and unproductive activities will be phased out and scarce financial and manpower resources better deployed to areas more responsive to the public demand.

Sir, my concern with this system is with its implementation. My question to the Minister is: will the Minister ensure that, in the implementation of the BFR system, it will not inadvertently result in the public sector passing on the higher costs of public administration to the public, ie, will the Minister ensure that civil servants do not resort to cost recovery measures in their effort to boost their output performance and hence charging a higher price for the services rendered to members of the public? Will the Minister also tell the House the time-frame for implementation of this system and when will this system be fully implemented throughout the civil service?

Mr Low Thia Khiang: ( In Mandarin): Sir, on page 25 of this year's Budget book, under the heading of Other Miscellaneous Revenue, a sum of $246 million was returned in FY93 to the Ministry of Finance because of overpayments in the development expenditure. I would like to ask the Minister for Finance, firstly, how did this overpayment come about? Secondly, in approving and disbursing development expenditure, is there any control procedure? Thirdly, to which Ministry was this excess payment of $246 million made? What was the development project and when were these overpayments discovered? Fourthly, since such a big sum of money was returned to the Ministry of Finance in 1993, why was it not mentioned in the 1994 Budget?

Mr Koo Tsai Kee: Sir, during the last few years, the Government's sterling economic performance has been spectacular. Its budget surplus has consistently been under-estimated. My quarrel is not with the budget surplus which I think is not a bad thing. In fact, it is needed contrary to what many of my colleagues think because we should build up the budget surplus now so that our reserve as a percentage of our imports, is roughly about 80%. Right now, that position is about 45%. My quarrel is that the Ministry of Finance has consistently under-estimated the surplus.

When the Minister delivered his Budget speech last year, he estimated that the budget surplus could be $2.18 billion. In fact, that target was achieved within the first three months of the financial year. The revised budget surplus is now $7.06 billion. The margin of error is over 200%. Similarly, receipts over expenditures estimated last year at $6.33 billion has now been revised to about $12 billion. The margin of error here is about 88%. Certainly, and unexpectedly, the economy grew at a higher than expected 10%. But this alone could not account for the huge variance between revenue and expenditure and receipts and outlays at the estimation stage. After all, last year, the Minister forecast that the economy could grow by up to 8%.

Forecasting is always a difficult science. I understand the difficulty of getting good economic data one year ahead of time, and the economic weather is not a tame animal to predict. However, to consistently undershoot the target for so many years implies that there is a philosophy of excessive conservatism in our estimates. This could be a virtue and not a bad Asian culture, to be modest, to be a little bit pessimistic.

But after a while, economists, bankers, financial analysts begin to discount Government estimates and add on spurious constants, something plucked from the air, and add on to the Government estimates and this could be dangerous. In their enthusiasm to project a different figure, because they think that Government's figures are under-estimated, they could project an overly optimistic picture of the economy and Singaporeans might be lulled into a party and think that the night is still young.

I hope the Minister will ask his staff at the Ministry of Finance to be more accurate in forecasting revenues and expenditures, receipts and outlays. By all means, undershoot but he should set a target for his staff, ie, maybe, plus or minus, X%. I am suggesting that X to be within 5% to 10%, under-estimate it by 10%. The science of forecasting is never difficult if you overshoot or undershoot by 200% or 300%. Anybody can forecast. The key to accurate forecasting is to shoot within the target, within a certain defined range.

Mr Leong Horn Kee: Sir, my first cut is on the implications and objectives of a strong Singapore dollar. Over the last two days, many Members in this House have argued passionately on the several difficulties companies faced in running businesses with a strong Singapore dollar.

Yesterday, the Finance Minister has put up a very spirited defence of a strong Singapore dollar. I am not sure whether everybody is convinced but I feel that there are truly several difficulties that we face in operating under an environment where the Singapore dollar is very strong. I would like the Minister to review the many arguments that have been put forward by various Members on the operating costs, cost of imports and cost of doing business outside Singapore as well as the impact on our retail and tourism trade. So I would like to urge the Minister to look into these factors and give a sympathetic ear to these arguments about how difficult it is for businesses to operate in Singapore where the Singapore dollar is very strong.

I wish to move on to my next cut, which is on the privatisation of statutory boards and Government-linked companies. Here, I would like to ask the Minister what are his plans on the privatisation of statutory boards and GLCs. Since the Minister has generously given a total of $500 to top up the CPF accounts of Singaporeans, I believe many Singaporeans are now very keen to know what are Government's plans on privatisation. They can now use the money to buy shares in Government privatised companies which are always offered in the initial public offer stage at preferential prices, under very special schemes.

On the point about privatisation, I would like to also ask the Minister to consider, when GLCs are being privatised or sold, selling the GLCs preferably to the private sector. There have been instances in the past where GLC shareholdings of listed companies are just being transacted between themselves, instead of being sold to the public. That is not privatisation. So, if there are any future plans to privatise GLCs through public listing, I believe the public would prefer to see that the shares are being sold to the private sector, instead of being sold within the GLCs.

Mr Koo Tsai Kee: To-date, the Government has privatised Singapore Telecom. In the pipeline are other statutory boards, like PUB and maybe PSA. There are also companies in the market, like Singapore Bus Services and TIBS, which are guided in their operations by their regulator, the Public Transport Council.

I think it is time to make explicit to consumers how our regulators guide the pricing policy of our operators, like ST, SBS and TIBS. I am suggesting that this task has a new urgency and purpose because our operators are good operators. In other words, they are profitable companies and they make lots of money. And critics have unfairly charged that they are making excessive monopolistic profits.

What consumers do not understand is that profits per se may not be a bad thing. We must look at how the profits are earned. But in order for our consumers to make an informed judgement, to be fair to consumers, regulators must set clear pricing guidelines, not just for the operators but for consumers to understand and digest. But one may ask: this is a free market and are operators not allowed to set their own prices? The answer is "yes" and "no". Yes, operators must be allowed to set prices within limits because they are accountable for their operations. But no, they cannot set prices at their whims and fancy because they have been granted the privilege of maintaining either a monopoly, like the power and gas to be, or a duopoly, like SBS and TIBS, or oligopoly of sorts through public mandate. You take away the mandate, they are out of business.

Apart from benchmarking, that is, comparing the prices of similar services provided by operators overseas, there are two distinct models for regulators to follow and, perhaps, the Government might want our operators to accept one or the other or a hybrid of the two.

The first model is what I would call the American model. The American regulators cap the operators' profits. In other words, they tell their gas companies, their telecommunication operators, that they can only earn so much profits in a certain year. What they are saying politically to the consumer is that the US regulators do not allow US operators to make obscene profits through their privileged position.

4.00 pm

Unfortunately, this model runs into some problems. The first is that it retards management's incentive to work hard. After all, if you cap my profits, then why should I work hard and push efficiency to a level where my profits are capped?

The second problem is a spin-off from the first. Capping the operators' profits may not result in low prices which is what consumers want. Prices can still be high and profits still low because of inefficiency. But politicians in America like this model, because they go round their constituencies telling the people, "Here you are, I've told the operator not to make X million dollars. They cannot make more than X million dollars." This model needs to be modified if the Government wants to adopt it for our regulators.

The second model, Sir, is what I would call the British model. The British set a certain formula. That formula is called the RPI +(-) X for their operators. Operators cannot fix prices of their services like gas, water, telecommunications, beyond what is allowed by this formula. The RPI is the relative price index, like our CPI. It is the average of the CPI over a period of two to three years. The CPI is set by the economy. The regulators will then determine what the value of X is on a regular basis. They review the RPI formula once in every two to three years.

This formula is good because it is transparent. Consumers know the basis for the pricing and, second, it allows operators to keep their profits if they maintain efficient and lean operations. On the one hand, consumers understand why their bus fares, their gas rates, their water rates are charged so much based on the formula. And the operators are happy because they can keep their profits.

To me, the most important attribute of the British model is that the price mechanism is simple to understand. But whether the Government wants to adopt the British, the American or a hybrid model, I think the Government should make it clear to consumers which system we want to follow, so that the issue of profits earned by our operators will not be politicised by politicians out to become popular. Already we hear people saying that SBS is making obscene profits and why are they removing services. Why are they curtailing services? Charges like this will come on and off and I think there must be a clear, transparent, defensible policy, both for the operators to keep their profits and for consumers to understand that the profits are not obtained through monopolistic positions.

I hope the Minister could tell the consumers what is the policy in Singapore.

Mr Low Thia Khiang: ( In Mandarin): Sir, in the Budget book, page 95, there is a loan of $303,992,000 granted to Temasek Holdings. According to my understanding, the loan was given in 1991 to enable Temasek Holdings to take over the National University Hospital. But up to now, not a single cent has been repaid. My question is: why should the Ministry of Finance give such a loan to Temasek Holdings?

Secondly, what are the conditions under which the Government can grant loans to Government agencies and Government companies? Is interest chargeable? Is there any fixed repayment period and how is repayment to be made?

Thirdly, under what circumstances can such loans be granted? Which agencies are eligible to apply for such loans?

Mr Koo Tsai Kee: Sir, consumers in Singapore need legislation to compel all banks and financial houses to give full disclosure on information regarding loans. All developed countries have consumer credit legislation. The USA has its Truth in Lending Act. Britain and Australia have their Consumer Credit Acts.

Essentially, these consumer credit Acts ask banks and financial houses to disclose all relevant information which will impact on the consumers adversely upfront, not when consumers ask bankers. This information includes:

(a) The annual effective interest rates, which I would refer to as the Annualised Reference Rates (ARR). And a statement in the Act as to what the ARR means, so that nobody is in doubt as to how it is interpreted.

(b) The Act should include the total amount financed and total cost of the interest charged in dollar terms for the entire duration of the loan, including all hidden transaction costs.

(c) The method and timing of calculating the interest rates.

(d) The early repayment penalty.

(e) The repayment schedule, the frequency and the commencement date.

(f) Any other legal and financial liabilities which would normally be encountered by the consumer during the period of the loan.

Among this information, the most important figure is the Annualised Reference Rate, because it is a simple number that can be immediately digested by almost all consumers.

On 1st March 1995, the Minister for Finance said in this House that he would ask the Monetary Authority of Singapore to remind the Association of Banks Singapore (ABS) and all the other financial institutions to volunteer such information.

Unfortunately, Sir, the problem has not been arrested. On 10th March, a full-page advertisement placed in the Straits Times by the Citibank - the Minister can take a look at this advertisement - nine days after his speech in this House, Citibank proudly touted its low auto repriceable car loan of 3.75%. There are no clear explanations as to what the 3.75% means, except an asterisk - the Minister cannot see this but I will send this advertisement to him - trying to explain what the 3.75% means. It says "subject to prevailing market rates". I do not understand what that statement means.

What that means is really ambiguous. But I am extremely doubtful if the 3.75% quoted in the advertisement is the Annualised Reference Rate. Citibank is offering much higher ARR on time deposits. How could it offer car loans below the ARR? Certainly, if the 3.75% was the ARR, Citibank would have said so. Perhaps Citibank should explain itself. And I think the Minister should ask the MAS to ask Citibank for a written explanation. This is one example where the Minister's moral voice has been ignored and totally kicked aside. And this trend is dangerous. If the Minister's moral guidance is ignored, it is dangerous.

To be sure, Sir, Citibank has not done anything wrong at law. But should we allow such practices to carry on? The fact is that most banks in Singapore, including financial institutions, are rather honest about disclosure. But honesty may not pay, because innocent and financially illiterate consumers could be fooled and have been fooled.

Let me contrast Citibank's advertisement to DBS Finance's honest advertisement on 14th March 1995 in the Straits Times. DBS Finance's advertisement is honest because it states clearly in one column the "special rates" and in the next column the "effective annual interest rates". Note that the DBS Finance's car loans are priced from 6.77% to 7.8% on an ARR basis. So it is much higher than Citibank's 3.75%. I am suggesting that DBS Finance's honest and transparent advertisement is commendable. But by allowing Citibank to quote non-ARR rates, the playing field is not level, because consumers could be fooled into thinking that the Citibank's rates are low, and DBS Finance's rates are high. DBS Finance's policy of stating its ARR carries a cost.

Sir, the Association of Banks, Singapore (ABS) has written to CASE, of which I am the President, and the Finance Houses Association of Singapore to set a date to discuss the matter of information disclosure by banks and financial institutions. But the important thing here to note is that the ABS in a letter to the Straits Times' Forum page, dated 28th February 1995, has admitted that the problem of less than full disclosure exists. The ABS wants self-regulation, not legislation. Understandably so. But, Sir, self-regulation has failed, will fail and will continue to fail.

Sir, I would like to point out to the Minister again that the ABS had circulated a note to its members on 21st February 1990 asking them to state their interest rates in ARR. Clearly, self-regulation has not worked. It will not work because there is always the temptation to use creative marketing techniques to seduce borrowers into thinking that non-ARR rates are low.

Legislation will help. In fact, legislation will help all banks and finance companies in Singapore, because then they can promote their loans on a level playing field based on quality of service, based on information and based on other attributes other than non-ARR rates. In fact, quietly, many bankers have told me that they prefer legislation because it makes their job easier.

I urge the Minister to compel banks and finance companies to provide full disclosure through legislation quickly. Similar legislation already exists in Britain, in Australia and in the United States of America. Why are we behind? We are trying to be a developed country by 1999. I think we are way back as far as the Consumer Credit Act is concerned. Consumers need protection. I need protection, Sir. We all need protection.

Sir, if a bank can openly defy the Minister only nine days after he has suggested in this House that banks should volunteer information, I think the Minister should start wielding the big stick.

Dr Kanwaljit Soin: Sir, there have been some recent developments that are worth noting in the tuition classes of SINDA and CDAC. According to press reports, 16% of students left SINDA's tuition classes in 1994; 8% of students left CDAC's tuition classes in 1994.

Both these figures were given in August 1994 and the attrition rate may have gone up further. Some of the reasons for the attrition were distance from home and inconvenient times. Because of the attrition rate, SINDA will now start tuition classes for students in their own schools either before or after their sessions. A spokesman of CDAC said that many of its students left because their own schools conducted compulsory remedial classes and students could not therefore attend CDAC classes.

[Mr Deputy Speaker in the Chair]

4.12 pm

Dr Kanwaljit Soin: Sir, it would appear that it is now time to look at the whole system of tuition classes for students, how we can integrate the classes of SINDA, CDAC and other self-help groups with the remedial tuition classes offered by the schools themselves and under the wing of the Ministry of Education.

I think the self-help groups and the MOE should work out a coordinated plan for their tuition classes so that students can have the required tuition in their own schools, instead of being confused and having to go all over the island according to the ethnic base. We may be stressing the students and their parents with the various tuition efforts of the self-help organisations and those offered by MOE. Also, the cost effectiveness of all these efforts comes into question.

Furthermore, although I understand the history of the ethnic based tuition classes and how they came about, I still feel that students should not be segregated for tuition according to their ethnicity but according to their academic weakness.

Activities like marriage preparation talks, family disputes, drug addiction and skills development of older workers may need an ethnic-based approach. But I cannot understand why we want to extend this ethnic approach to tuition classes for our young generation. We are courting the danger that the cumulative result may be the formation of racial and religious enclaves.

Even if SINDA, CDAC, etc, think that their tuition classes have helped their students, there is no reason to believe that school and subject-based tuition classes which are not ethnically segregated will be less academically effective and may even be more cost-effective.

Integration of young people in all their activities strengthens social tolerance and harmony and this is what we should be working towards, and not spending our money to segregate them in educational activities. So I do hope that the Minister will look into this matter.

The Minister for Finance (Dr Richard Hu Tsu Tau): Sir, Dr Ow Chin Hock has raised some questions about the large variance between GST collections originally forecast and what was actually collected. He has asked several questions in connection with this issue. He wanted to know whether the PCE which forms the basis for the estimation of GST collections has been consistently under-estimated.

I understand from the Department of Statistics which prepared the PCE that there is an element of under-estimation which they are examining. I should like to point out that PCE is based on estimates and there are no definitive figures. We will only accurately know the structure of our consumption expenditure after we have completed a full year of GST collections, by which time we would have a very comprehensive database to update, if necessary, the structure of our PCE. So it is entirely possible that it has been under-estimated. As for the scale of under-estimation, I am not able to say at this time.

He has also asked whether some companies may have paid GST inadvertently, although they do not have to. I do not think this has actually happened and probably unlikely to be a reason for the variance. He asked whether the variance could also be due to sizable amounts of unclaimed refunds. The estimated GST collections for FY94 are still estimated, because we have not completed the fiscal year, but IRAS has in fact provided some estimates of the likely refunds which might be due up to 31st March this year. So I do not think that again is a factor which explains the variance. I think these were the three questions he asked in connection with the variance.

He has also asked for a definition of what Government means by introducing GST in a tax negative way initially and tax neutral way subsequently. I think Mr Leong Horn Kee asked the same question. In the first year of the GST implementation, the Government's stated intention was to over-estimate or give more back to the population from the GST collections in order to cushion the initial effects of GST and to allow for some degree of error in the estimates. So in the first one or two years, or maybe more, we expect the actual collections to be less than the actual pay-outs in the form of rebates and tax cuts. This is done deliberately to cushion the introduction. We expect the tax negative aspect to be phased out within three to five years, by which time the intention would be that whatever is collected in the form of GST would have been entirely refunded in the form of tax offset or direct offset or rebates. That is what we mean by tax neutrality. In other words, the intention of Government is that in the introduction of GST it was not intended to create new revenue. It is a reform of a tax system where we are going to reduce the level of direct taxation and replace it with an indirect taxation in the form of a very comprehensive goods and services tax. In the process, since we do not need new revenue, the introduction is intended to be tax neutral. That is the basis of our definition.

Mr Chay Wai Chuen asked whether Government expenditures are included for GST purposes. The answer is no. Government expenditures are taxed but the entire tax is fully recovered because the nature of GST is that it would be passed through ultimately to the final consumer and Government, in this case, as a service provider, is merely an intermediary in collecting this tax, like any other intermediary company.

Mr Koo Tsai Kee has proposed that shops should price tag all goods to include GST in the price tag or the GST-free price.

Mr Koo Tsai Kee: Right now, they have no tag. Something is better than nothing.

Dr Richard Hu Tsu Tau: Not every shop is required compulsorily to tag. But I think the majority of large companies do. Is the Member suggesting that there should be legislation to compel everybody to do so? I am not clear on this point.

Mr Koo Tsai Kee: Sir, I am suggesting that GST-registered shops should be compelled to price tag their goods, especially on big ticket items like television and jewellery.

Dr Richard Hu Tsu Tau: I believe the majority do that, but of course this is left entirely to the shops. I think this is something I can consider.

Mr Koo Tsai Kee: Thank you.

Dr Richard Hu Tsu Tau: Dr Kanwaljit Soin has also asked what we mean by tax neutrality over the medium term. I have already explained this. She has also asked about the GST tax on voluntary welfare organisations. I would like to explain that the GST system has been designed to be as comprehensive as possible. With the exception of certain financial services and the sale or lease of residential properties, the provision of all other goods and services is subject to GST without exception. In line with this principle, Government's position is that charitable organisations should be treated no differently from commercial ventures for GST purposes. I would like to explain why. If we want offsets, they should be given outside the GST system. To provide some form of assistance, non-GST registered voluntary welfare organisations can apply to the Ministry of Community Development for a grant to offset their GST payment on purchases which are incurred in the course of providing direct welfare services. Dr Soin believes that this is a cumbersome process and the procedure could be streamlined. We will certainly look into this problem.

However, I should point out that this grant is not extended to GST-registered charitable organisations as they can claim the input-GST incurred on their purchases. Donations from fund raising activities in the form of cash do not attract GST. For donated goods, however, only donors who are registered for GST need to account for tax on the goods. The IRAS would treat such donation as a sale at nominal value provided the charity and the donors are not connected persons. An example is a bakery donates surplus bread. These would probably be charged or accounted for, say, at one cent for GST tax purposes, to maintain the principle but without actually charging much.

As for charity events, such as fund-raising projects, GST-registered charities are only required to account for GST on that portion of the proceeds relating to the value of the taxable supplies associated with that event. The balance will be treated as donations for which no GST need be paid. For example, IRAS would only require GST to be levied on, say, $50 out of a $500 ticket for a charity dinner. That sum of $50 being the amount paid to the hotel, which is a taxable supply. The balance is tax free. We will ensure that IRAS is always flexible in its application of GST, particularly in relation to charitable organisations.

Mr Chew Heng Ching has raised two points in connection with property tax. He says that the property tax reduction generally is not passed on by landlords. I think this is probably true for a significant number of private landlords although, in the case of Government landlords, like JTC and HDB, the tax reductions are passed through. We do not want to compel people to treat this tax as a mandatory pass through. For the time being, we prefer to use persuasion but, if it does not work, we may have to consider tougher measures.

He has also asked why we have withdrawn the property tax exemption at this particular time because a number of property developers have complained that this is the wrong time and it is unfair. I would like to point out that property developers should remember that the tax exemption is a concession and not a right which was introduced in 1987 to help the property sector get out of the recession. It was never intended to be a permanent feature and it has been left in place for quite a long time. The property market has clearly come out of the recession and its withdrawal, in fact, is well overdue.

Mr Chew has asked why it was not withdrawn two years ago during the peak of the property market. The explanation is that if the tax was withdrawn during the peak of the market where there was a strong demand for property, it was very likely that the extra cost to the developer would have been immediately passed on to the consumer because demand was so strong and people were quite prepared to pay whatever prices were asked. Indeed, the right time to withdraw it is when the property market is softening and fewer people are chasing properties. Therefore, it is more difficult for the property developers to try and pass on these costs. We believe that property developers have made substantial profits in the last few years and can well afford to absorb the withdrawal of this concession.

Dr Ow Chin Hock has mentioned a point on non-tax revenue and suggested that this should be announced together with tax measures during the Budget. We try to do this as much as possible. The few deviations which have taken place in the past have usually been related to CPF changes, for example, or some changes which could not await the Budget. But ideally, I agree with him, all tax and non-tax changes of significance should be announced together in the Budget so as to allow businesses to budget for these costs. We will try to pursue this as far as possible.

He has also suggested that some of the non-tax revenues like COEs and levies, for example, should be paid into a dedicated fund for use related to the reasons for introducing the levies in the first place. He has quite rightly said that I dislike this form of dedicated use of funds simply because it inevitably leads to the use of funds for projects which may not stand up to scrutiny on their own. In other words, if all Government revenue goes into the Consolidated Fund, projects which are desirable and viable have to stand on their own merits in competition with other projects. If you have a series of dedicated funds where specific revenue streams go into, a situation would arise where quite often money is spent simply because it is there and this leads to waste and unnecessary expenditure. I am not saying that no dedicated funds should be created at all. In fact, one of the areas where some dedicated funds may in fact be necessary is to provide funds for the Land Transport Authority which has been proposed by the Minister for Communications. Clearly, it will need a source of revenue and we are now examining what motor-related income streams should be given to this Authority to allow it to operate, but with close scrutiny, so as to reduce the risk of over-funding. 4.30 pm

Mr Chay Wai Chuen has expressed concern that continuous collection of budget surpluses may eventually affect the viability of the economy. In my speech yesterday I explained some of the reasons for the origin of these budget surpluses. But since both Mr Chay and Mr Heng Chiang Meng yesterday expressed such concern over the size of the surpluses, I think I should explain again.

Let me say again that the large surpluses we have accumulated in recent years were the direct result of the very strong growth of the economy and our careful control of costs. We should not forget that surpluses have only begun to accumulate from 1990 onwards, after the economy recovered fully from the 1985/86 recession. In fact, we had budget deficits in the years of 1986 and 1987, near-balanced budget in 1988, and a small surplus in 1989. It was only from 1990 onwards that significant surpluses have been accumulating.

If the economy is over-taxed because of budget surpluses, as is inferred, the usual consequences will be a rise in interest rates, a fall in economic growth, a decline in asset values and a slowdown in the availability of money for infrastructure spending. In Singapore, we have in fact seen just the opposite happening over the last five years. If anything, we have been growing too fast and not too slowly and there is therefore real risk at this point of time of igniting wage inflation which will be very damaging for the economy over the long term.

During the debate of the last two days, some Members have asked what is Government's target level of reserves. Should it be three months of imports? Maybe six months? Or, as Mr Koo has suggested, 80% of total imports? My answer is that there need be no upper limit set on the level of reserves. The reason for this is I see no reason that we should set a target for an upper level so long as we are not taxing the economy and causing it to be damaged. Because we have pursued a low tax regime, we are attracting more investments, both local and foreign, and the economy has responded by growing faster which in turn has generated more revenue and therefore more surpluses. And we should be able to do this provided we keep our expenditures under control. Our policy therefore is to accumulate as much surpluses as we can during periods of strong economic growth, provided we do not over-tax the economy.

We should also not forget that although we may be cash rich and have larger reserves than many other countries, we are not a wealthy nation because we have a very poor resource base. For example, while we may have larger cash reserves than our neighbours like Indonesia and Malaysia, they are much wealthier countries in terms of total resources which include oil and gas under the ground, timber above it, and vast areas of land. To give you an example of how poor we are in certain resource areas, just take land. Indonesia, Malaysia and Singapore have land masses of 1.9 million, 330,000 and 640 square kilometres respectively. If you divide these by the population base of each country, it works out that each Indonesian citizen owns, if you like, 9,500 square metres of land. Malaysia is even richer in this resource. Each Malaysian owns 17,000 square metres. Each poor Singaporean owns only 220 square metres. I think that illustrates the size of our problem. All we have is cash reserve and practically nothing else. That is why we need it more than anybody else.

Mr Koo Tsai Kee: We have human resources.

Dr Richard Hu Tsu Tau: Well, everybody has that. Hopefully, the value is higher and that is the only thing really which saves us. But do not forget that we are not that rich. All we have is cash reserve and we have nothing else or very little.

Mr Chew Heng Ching has asked questions on Budgeting for Results (BFR). The Budgeting for Results procedure is a shift in our budgetary process from one which is largely input driven to an output based one. By focusing on outputs, the BFR will bring about better accountability and more entrepreneurial thinking and thus provide better value for money in the public sector. All Ministries are supportive of this approach. Many in fact have offered to implement BFR in their departments and statutory boards, and several have already begun to identify their outputs and set appropriate targets.

BFR is a major exercise aimed at ensuring that Government agencies are structured to deliver the outputs efficiently and effectively within available resources. However, some concerns have been raised whether this would result in higher cost being passed on to the public. I would like to assure the House that this will not be so. On the contrary, proper identification of outputs, performance targets and cost will help to deliver greater value for money and therefore the implementation of BFR should not mean higher cost.

Mr Low Thia Khiang has asked some detailed questions on development expenditure over payments. I am afraid I do not have the answer to that because it is a matter of detail. I will get it for him and give the answer a little later.

Mr Koo Tsai Kee has expressed concern over the very large variance in our estimating process, both for revenue inputs and for expenditure. I agree that the accuracy of our estimates could be improved on. On the revenue side, for the last few years the problem has been the very large change in our growth rates. This is not entirely excusable but, nevertheless, it is a problem. The main reason why budget surpluses have been under-estimated is that not only has the revenue side increased beyond estimates but because development expenditures have fallen substantially short of estimates. And the reason for this are multiple. Most of the development projects, particularly large ones, incur a lot of gestation time. In between, changes are made because the process may have been improved, tenders are called and prices have been much lower than originally estimated. The cumulative effect of this is under spending on the development side which accounts for a good proportion of the budget surpluses. Officials are working desperately to try and improve its accuracy. But whether one can meet his target of 10%, plus or minus, is something we will have to see.

Mr Leong Horn Kee has asked whether the strong Singapore dollar may eventually be harmful to the real economy. I have explained at some length yesterday the reasons for the Singapore dollar being strong, and perhaps I should just go over them very briefly. As I said yesterday, the value of the Singapore dollar relative to other currencies is not determined by the MAS. In the absence of capital controls, no government, no central bank, can fix currency at a rate which it desires. What the MAS does in fact is to try and avoid large fluctuations upwards or downwards in the exchange rate by intervening in the market to buy or sell Singapore dollars to level off changes so that the real economy is not affected. Companies which do export trade can manage appreciation, given sufficient notice. But if there are large variations within months, it will be very harmful. So MAS' primary role is to try and manage currency so that large fluctuations do not take place.

I will explain one of the reasons. Let me give an example. Supposing we decide that the Singapore dollar is going too fast, we would like to depreciate it by 10%. What do you do to achieve that? Firstly, you can install capital controls, but installation of capital controls will be disastrous for the economy. So we do not do that. The other tool we have is to intervene. Intervene, say, vis-a-vis the US dollar. The MAS will go into the market to buy US dollars, using Singapore dollars and therefore releasing Singapore dollar liquidity into the market. What is the consequence of that? Interest rates in the domestic market will fall very sharply as we buy more and more US dollars and inject funds into the market. All savings rate will fall. If it falls too low, it damages savings patterns. So that is a negative effect. Eventually, massive intervention will result in massive liquidity in the market which is undesirable.

On the other side, if you want to strengthen the Singapore dollar artificially, there are two ways of doing this. You can raise domestic interest rate to make it more attractive for foreigners to bring money in. But that will damage the economy obviously. The other way to do it is to intervene the other way - go into the market and sell US dollars and buy up Singapore dollars, using our reserves to buy up Singapore dollars and reduce its supply. Even with the very generous reserves we have, if the market does not agree with you, all your reserves can disappear in no time, whatsoever, as very much larger countries have found. So, effectively, if your fundamentals of the economy do not support your exchange rate, there is nothing you can really do to force it in the wrong direction.

I will ask RAdm Teo to take over the response to the other questions. 4.45 pm

The Minister of State for Finance (RAdm Teo Chee Hean): Sir, Mr Leong Horn Kee has also asked what are the privatisation projects in the pipeline. The companies and statutory boards being considered for privatisation in the next few years are PUB, Pidemco Land and SMRT. It is an objective of the privatisation programme to increase the assets of Singaporeans through share ownership in the privatised companies. Where a former statutory board is privatised, as in the case of Singapore Telecom, Singaporeans are given priority and encouragement to own shares in the privatised entity. However, not all GLCs are necessarily suitable candidates for privatisation. This is the other point that Mr Leong raised. For example, Temasek Holdings may divest ownership in the GLC for other reasons of a purely commercial nature and the companies that are divested may be of a size and nature which are not suitable for sale to the general public.

Mr Koo Tsai Kee has raised a number of points on the role of regulators. I thank him for bringing to the attention of the House the various methods available. These, I think, are well published in the literature. The Government will certainly take these possible avenues for regulating public utilities into account and also any other method that may be available whenever the Government decides on privatisation and how to set and regulate prices for these utilities.

Mr Low Thia Khiang has asked about Government lending to Government-linked companies. Our policy for Government-linked companies is that they should approach their own parent companies or, better still, go to the capital market to source their financing requirements. This latter option is in line with our recent policy to further develop Singapore as an investment and risk management centre. GLCs as well as statutory boards have therefore been encouraged to raise funds through the capital market.

Occasionally, Government may provide a loan to a GLC in order for Government to meet certain national objectives. One example is the loan to Temasek. The need for the loan arose from the transfer of the National University Hospital's ownership from the Health Corporation of Singapore to Temasek. The transfer is part of a restructuring exercise to enable the NUH to develop into an academic medical centre of excellence. The loan to Temasek was provided free of interest as it was to achieve the national objective of restructuring and not for the commercial advantage of Temasek. The loan will be repaid once the restructuring exercise and details, such as the transfer of NUH land and buildings, are finalised.

Mr Koo raised a question of consumer credit and legislation. The Minister for Finance informed the House in his answer to Mr John De Payva's question on the disclosure of effective rate of interest by financial institutions on 1st March this year. While MAS agrees that the level and standard of consumer credit information in Singapore can be improved, it is of the view that it would be better for such standards to be implemented by self-regulation rather than through legislation. Self-regulation would make it easier for such standards to be updated, to take into account changes in market practices and the introduction of new consumer financial products. The enactment of legislation will result in less flexibility in making such changes and unduly increase the cost of operation for financial institutions. The ABS and the Finance Houses Association of Singapore (FHAS) have contacted CASE to work together in setting such standards and requirements for the financial industry. ABS and FHAS hope to be able to introduce the standards before the end of this year. ABS and FHAS are confident that CASE's objective of providing adequate information to borrowers can be achieved via self-regulation. And MAS will work with ABS and FHAS to ensure compliance with such standards once they are introduced.

In the meantime, ABS and FHAS are preparing a brochure for the purpose of educating consumers on the types of loans available as well as the terms and conditions. The brochure which is expected to be ready within two months would be made available free of charge to all customers of banks and finance companies. I hope that the cooperation between ABS and FHAS with CASE demonstrates the commitment of the financial community to achieving the objective of providing adequate information on consumer credit and I would like to urge CASE to work closely with ABS and FHAS in achieving this objective.

Dr Soin has raised some questions about tuition classes by community self-help organisations. The points raised by Dr Soin about racial segregation and racial integration have been addressed before, both in this House and outside, and I do not propose to go through them again. The Government has provided resources by a matching grant for these self-help groups and these self-help groups have demonstrated remarkable results. The money has been well spent. We should commend these self-help groups for their achievements.

I am not in a position to comment whether it is possible or not to further integrate the tuition classes conducted by self-help groups with other remedial classes conducted in schools. But I would just like to add that the pride and the satisfaction which these self-help groups derive from having made these remarkable achievements is a major factor in encouraging these communities to continue improving and making progress.

Dr Ow Chin Hock: Sir, could I clarify a few points? Firstly, I believe the Minister has not answered my question on whether GST has been imposed on tax. I have with me a few bills - PUB and restaurant bills. I just want to make this point quickly. This particular household has consumed water and electricity amounting to $174.81, domestic refuse was $16.50, but there was a 2% Government tax on PUB charges amounting to $2.68 and the 10% water conservation tax of $1.60. So the total bill was $195.59. The 3% GST was imposed on $195.59 which included the two taxes which I mentioned, ie, the Government tax on PUB charges and the 10% water conservation tax. In other words, it is tax on tax.

Secondly, Sir, I am more concerned about the regressive nature of GST. I have asked two specific questions: one, whether the HDB rental rebates and S&C rebates have offset the GST burden of the lower income households which have not paid any income tax, or they have paid very little income tax before the introduction of GST. Second, are there many retirees or pensioners who are living in non-HDB properties who have made claims from the CCC Assistance Scheme?

Finally, I am glad that the Minister agreed that the private consumption expenditure (PCE) could be under-estimated. Let me point out to him that in page 106 of the Economic Survey, there are two adjustments to the PCE figures. First, residents' expenditure abroad of about $4.5 billion in 1994 was added to the PCE. This expenditure was not subject to tax because Singaporeans spent it abroad. The second adjustment was non-residents' expenditure locally. This was subtracted from the PCE. That amounted to $11 billion in 1994, a very sizeable figure. I believe that these non-residents include tourists. Tourists can claim GST refunds. But other than tourists, there are large numbers of non-residents working in Singapore and their expenditures are subject to tax. The question is whether the subtraction of these non-residents' expenditure from the PCE has led to the under-estimation of PCE which should form the base of GST collection.

Dr Richard Hu Tsu Tau: Sir, I will answer the last question first. The PCE figures do include expenditures of foreigners who live and work in Singapore. So I think that has been adjusted, but it does not include tourist spending. This is confirmed by the Department of Statistics.

Dr Ow Chin Hock: I do not think that is correct. In page 106, Table A1.5, the last entry "Less: Non-Residents Expenditure Locally" is subtracted from the PCE.

Dr Richard Hu Tsu Tau: Several adjustments have been used in the collection of GST. So there have been several adjustments to the PCE figures for the purpose of GST collections.

Dr Ow has also asked why is GST levied on Government taxes and fees. The reason is that GST is intended to be levied on the final value of the goods and services consumed. Where there is an indirect tax or levy imposed in the course of supply, the levy is included as part of the final value of the good or service for the computation of GST. It is included for a specific purpose. This is also the practice not only in Singapore but also in the United Kingdom, New Zealand and other countries with value-added tax. The Government and statutory boards have to charge GST and fees when it supplies goods and services to the public in competition with the private sector. This is to ensure that there is a level playing field between the public and private sectors.

However, the following fees are not subject to GST. Firstly, we have regulatory fees. Since there is no similar supply of such services in the private sector, there is no need to level the playing field. Secondly, deterrent fees, since there is also no supply of such service in this case.

The other question which I have not answered is whether the rebates for HDB dwellers have offset the GST burden of the lower-income families. When the rebates were fixed before the introduction of GST, family groups at different income levels were calculated based on estimates of their consumption patterns, and the rebates were structured to ensure that all of them would end up with a positive gain after the introduction of GST. And this was, in fact, published and printed in last year's Budget book and it is available. After one year of actual operation, and based on actual or updated data from GST collections, we will have to update and recalculate these figures to see whether the original assumptions were correct. But up to now, we believe that this is so, that is, families at different income groups would have ended up with a positive gain as a result of GST. But we will ensure that this happens. If necessary, we will make adjustments.

In the case of people who do not live in HDB flats but live in private housing, such as retirees, they were therefore not able to take advantage of these rebates for HDB dwellers. But there is this facility of the CCC Assistance Scheme. Up to now, our information is that the number of people who have applied to the scheme is not large. It only runs into several hundreds. We are trying to establish the reasons. They are either living with families which would benefit from the rebates and would therefore not require them to come forward or there may be personal reasons. We do not know. But it is a fact that claims under this scheme are not large. 5.00 pm

Mr Low Thia Khiang: Sir, has the Minister got the answer to my question on the overpayment of $246 million?

Dr Richard Hu Tsu Tau: I have not yet obtained the figures. If necessary, I will give him a written reply.

Dr Ow Chin Hock: Sir, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), Mr Chiam.

Mr Chiam See Tong: Sir, I beg to move,

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

Sir, when I looked at the Budget book this year, I was surprised to note that the whole of Appendix D, which normally appears at the end of it, was taken out. Appendix D gives salary scales of political appointees and all Government employees from Superscale, Division I to Division IV employees. I am just wondering why such relevant and important information has been deleted from the Budget book.

I find the information in Appendix D very useful, because I use them as a guide to fix some of my employees' salary scales in the Potong Pasir Town Council where I am the Chairman. So when I looked at the Budget book this year, I was disappointed that the salary scales, which normally appear in that appendix, are no longer there. It seems rather coincidental that last year this House debated and agreed to fix Ministers' salaries to top earners in the private sector. I hope that it is not because of the Ministers' new salary scales or high salaries that have prompted the omission of Appendix D from the Budget book.

Will the Minister in charge restore Appendix D in the next Budget book?

RAdm Teo Chee Hean: Sir, Mr Chiam need not be surprised because Appendix D was left out from the 1994/1995 Budget book also. It is again excluded for the 1995/1996 Budget book. In fact, it has been excluded for two years already.

Appendix D of the Budget book contained the basic salary scales for each and every grade of civil servants, as Mr Chiam has pointed out. In addition to the basic monthly salary, officers receive the monthly variable component, the non-pensionable variable payment and the non-pensionable component. Furthermore, officers on the same grade but on different medical schemes are on different salary scales. To reflect all these would require a considerably enlarged and modified Appendix D. In its place, a salary manual with all the details was prepared for administrative use. It is available in the Parliament Library. It is a document of some substantial size.

The Chairman: Mr Chiam, do you wish to withdraw your amendment?

Mr Chiam See Tong: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (3), Mr Lau.

Mr Lau Ping Sum: Sir, I beg to move,

That the sum to be allocated for Head N of the Development Estimates be reduced by $10 in respect of Code NG 5200.

Sir, in the 1970s, before NCB was formed, there were only two data centres in the Government service, one at the Ministry of Defence and the other at the Ministry of Finance. After NCB was formed in 1980/81, it decided to increase the number of data centres in order to expedite computerisation. In due course, the number of data centres proliferated. By now, I think we have data centres in most of the Ministries in the civil service.

In the last few years, however, there has been a fundamental shift of computing from mainframe computers to much smaller, more compact, and yet very powerful platforms such as PCs and network computers. For large mainframes, the overheads are high. Not only have they to pay considerable maintenance costs, they also need specialists to maintain these centres, people like database administrators, system programmers, who are in short supply in Singapore.

Sir, I agree with the decision to rationalise the data centre operations in the civil service and reduce the number of data centres in the civil service. What I like to know is: what would be the estimated cost savings that we have achieved as a result of this exercise? And over the next five years or so, what would be the optimum number of data centres in the civil service?

RAdm Teo Chee Hean: Sir, with the consolidation of the mainframe operations of the Ministry of Finance, Ministry of Health, the Judiciary and IRAS' data centre, the Government was able to achieve an estimated manpower saving of 58 staff or 38%, and a cost saving of $8 million or 32% in 1994. These savings have come about without any deterioration in the quality of service. The migration of MTI's mainframe to the data centre is in progress and it is expected to be completed in 1995. This will bring about further manpower and cost savings.

The data centre will have to respond to the needs of its civil service customers. It has to evolve its services to stay useful as Government Ministries and departments move towards down-sizing and newer technologies. However, over the next 5-6 years, mainframe computers operated by the data centre will continue to be used by the civil service as large processing and information centres in a client-server architecture. During this period, the data centre must move into network management, mid-size servers and other areas to stay relevant as the relative importance of mainframe computers declines. Indeed, the civil service is now a very heavy user of local area networks and microcomputers. In short, market forces will shape the evolution of data centres.

Mr Lau Ping Sum: Sir, I wanted to know whether the Ministry has any numbers over the next five years. What would be the optimum number of data centres?

RAdm Teo Chee Hean: As to the precise number of data centres that we have, I do not have an answer for Mr Lau. This is something which is constantly under review. The trend in the technology is towards distributed computing client-server networks. As these evolve, we will evolve as well.

The Chairman: Mr Lau, do you wish to withdraw your amendment?

Mr Lau Ping Sum: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (4), Mr Das. Please take your two subjects together.

Mr Chandra Das: Sir, I beg to move,

That the sum to be allocated for Head N of the Main Estimates be reduced by $10 in respect of Code NP 2000.

Sir, this subject on estate duty has been raised in this House before and the Minister is also on record as saying that the property prices have gone berserk. As such, the $3 million exemption for residential property may not be adequate.

In May last year in this House, the Finance Minister stated that there are only about 11,000 or 1.7% of all houses and properties in Singapore worth $3 million and above. I suspect this number is much more today.

The Minister also stated that it is a small group and this group is generally wealthy and they do not need additional help. The group may be small, but there are people in this group who are not wealthy. Many have bought their homes in the late 50s or early 60s for very small sums of money and it is the only house that they have. Some of them even tell me that they are afraid that if anything happens to them, the family will be in real trouble.

Sir, the aim of the $3 million limit was to prevent families from disposing of the property. I would like to ask the Minister whether he will consider raising the $3 million limit.

On the second subject, I have residents in my constituency who are female singles and working full-time. This particular single lady looks after her two aged parents, both about 80 years old. And the parents are not in good health. This particular constituent has no choice but to employ a foreign maid to look after her sick aged parents.

However, Sir, this constituent is not entitled to the foreign maid tax relief. The relief is only given to married, divorced and widowed persons. The Government is encouraging children to look after aged parents. The number of singles is also not declining. Singles will also have a responsibility to look after their aged parents. Is it fair to omit this group from the tax relief? I hope the Minister will review the position of the singles in this area.

Assoc. Prof. Low Seow Chay (Chua Chu Kang): Sir, for working women with 'O' level education and above, they are given tax relief for their earned income for having children. The tax relief works in this way. For children below 12 years old, the first child is entitled to 5% of the earned income; the second child, 15% and the third child, 20%. However, for children 12 years old and above, the tax relief for the first child is the same; for the second and third child, tax relief will be reduced by 10% and 15% respectively.

Sir, in my view, it will cost the parents more for having an older child than a younger child. Therefore, I would like to ask the Minister why is it that the tax relief for a child 12 years old and above is less than the tax relief for having a younger child. Would the Minister consider granting the older child a similar tax relief?

Dr Tan Cheng Bock (Ayer Rajah): Sir, the Minister has earlier explained the tax policy for fund raising projects. I would just like to seek a small clarification. Why are donation draw tickets, for example, subject to GST?

Dr Kanwaljit Soin: Sir, I would like to echo Mr Chandra Das' plea for singles to get relief for their maid levy. I recognise that the tax relief for foreign maid levy was originally introduced to specifically encourage married women to join the workforce and, at the same time, to have children. But this is no reason not to extend the ambit of the maid relief to other worthy situations. This will in no way diminish the original purpose. As Mr Chandra Das has said, there are many single men and women who look after a sick elderly parent or relative at home with the help of a foreign maid. Without the maid, one option would be to put the sick elderly person in a nursing home and this would necessitate more nursing homes to be built. And we would be propagating the ethos of devolving the care of the elderly to institutions instead of caring for them within the family. Thus, if we want to propagate the philosophy that the young should continue to look after the old and in the home, then let us give some fiscal encouragement to the filial son or daughter who is single. I know that there is an income tax relief available for dependent parents but the maid relief will help a little further.

RAdm Teo Chee Hean: Sir, first, on the question of maid relief raised by Mr Chandra Das and Dr Soin. The tax relief for foreign maid levy was introduced to encourage married women to join the workforce and, at the same time, have children. It is not meant to help all employers of foreign maids. However, the Ministry recognises the difficulties which singles face in taking care of their aged parents. Singles who maintain their aged parents are allowed a tax relief of $3,500 for each dependent parent. The savings from this tax relief would partially offset the cost they incur in looking after their aged parents. If they have two aged parents, then of course the relief is doubled. 5.15 pm

Prof. Low's point is why a higher quantum of enhanced child relief is allowed for the second, third and fourth children only below the age of 12. The enchanced child relief was introduced in the Year of Assessment 1974. The objective was to encourage highly qualified and professionally-trained women to work and to have children. Up to the Year of Assessment 1989, the quantum of relief was the same for all eligible children regardless of age. The relief was also subject to the same maximum cap regardless of age.

However, as the fertility trend was declining in the 1980s, there was an urgent need to encourage married Singaporeans to have more than one child and the quantum of enhanced child relief for the second, third and fourth children below the age of 12 was raised from 10%, 15% and 20% of the mother's earned income to 15%, 20% and 25% respectively with effect from the Year of Assessment 1990. The maximum cap for the relief per child below 12 years was simultaneously raised from $10,000 to $15,000 and both measures formed part of the Government's comprehensive package of procreation incentives. The increase in quantum was confined to children below 12 years because mothers are more likely to give up their jobs to stay at home to look after these younger and more dependent children. Hence, the incentive was made larger for this group. In view of the tight labour market in Singapore, it would not be desirable for these highly educated and skilled women to withdraw from the labour force at this time. So the higher quantum was intended as an encouragement to married women to raise a larger family and at the same time to continue to work.

Dr Tan also asked about donation draw tickets being subject to GST. Basically, as the Minister has explained, GST is a comprehensive tax on all consumption. Therefore, donation draw tickets would fall into the same ambit.

Dr Tan Cheng Bock: Sir, for donation draw-tickets, which category does it fall into? Goods or services?

RAdm Teo Chee Hean: Sir, it is a Goods and Services Tax.

Mr Chandra Das: Sir, the Minister of State has not answered on the estate duty.

RAdm Teo Chee Hean: I am sorry. On the question of estate duty, in Singapore we do not levy any capital gains tax and estate duty is a form of wealth tax which the Government uses to moderate the distribution of wealth in Singapore. Residential properties up to a certain value are exempt from estate duty and the intention is to give relief to beneficiaries in the lower and middle income group. The exemption protects the dependants of the deceased who would otherwise have to dispose of their property and family home to pay estate duty.

At present, the exemption limit for residential properties is $3 million and this is irrespective of the number of residential houses owned by the deceased. Despite the recent increases in property prices, the existing ceiling remains adequate to cover all HDB and HUDC flats and there are only 11,300 properties, ie, about 1.6% as at the end of February 1995, which are worth more than $3 million. So only the more wealthy in the population need to pay estate duty on residential properties. Based on IRAS's experience, to-date, those in the wealthiest segment of the population who have had to pay estate duty on residential properties had not experienced any difficulty doing so.

Mr Chandra Das: Sir, I hope the media does not dub RAdm Teo as also "Mr No" from tomorrow. On that note, I withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $518,536,590 for Head N ordered to stand part of the Main Estimates.

The sum of $769,080,900 for Head N ordered to stand part of the Development Estimates.

Head L -

The Chairman: Head L - Ministry of Education. Amendment No. (1), Mr Peh.

Mr Peh Chin Hua (Jalan Besar GRC): ( In Mandarin): Sir, I beg to move,

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

Sir, I understand that an average of 400 teachers with less than three years of service leave the teaching profession every year. This figure does not include those who have retired at the age of 55 years or have requested for early retirement. This figure is almost equivalent to the total number of new teachers attracted to the teaching profession by the very aggressive advertising campaign. Upon meeting with the teachers, practically all of them voiced that they have entered the wrong profession. They were rather disturbed by the behaviour of not only the students but the parents as well. I therefore urge the Ministry of Education to address the issue and find solutions to the problem. Feedback from the educational field reveals that the following problems are the factors contributing to the low morale of teachers:

First, there is no provision for students to be retained even when their results are bad. It is only up to Primary 5 when students in the EM2 stream do not do well that they are allowed to be retained. Even then, the number is very small. I would urge the Ministry of Education to consider allowing students who are not performing well to be retained in the class, particularly in Primary 1 and Primary 2. With the cooperation of the parents and with counselling from the school, they could be given an extra chance to catch up with the others. On the contrary, if they are simply promoted each year, right up to Primary 5 and Primary 6 and if you retain them at that time, the lessons are more difficult. It would be more difficult for them to catch up and also at this age, the students tend to be more rebellious and they do not want to study.

Secondly, there are some notorious students who are consistently breaking the school rules, using vulgar languages, smoking, coming to school late, playing truant, sleeping in class, not handing in their homework and having no respect for the teachers. The teachers have to spend most of their time and effort to deal with such students. Numerous reports on these students have been made and kept in the files just in case the teachers are confronted by unreasonable parents and officials from the Ministry of Education. In the end, all the efforts by the teachers are futile. Some students have gone to the extent of assaulting the teachers. One such example is the much publicized case of St Hilda's Secondary School.

Thirdly, as teachers do not have the authority to discipline the students, the only thing they can do is either to try and counsel these notorious students or simply adopt an indifferent attitude towards them. To these notorious students, the teacher is merely a "Paper Tiger". The very most that the school could do is to pass the buck by transferring the students concerned to other schools so as to avoid questioning from the Ministry officials.

Fourthly, no doubt, children from broken homes are often found to be psychologically imbalanced, the lack of good and proper family environment also contributes to the bad behaviour of the students concerned. Home education and school education do not go hand in hand. Some children are being pampered by their parents. They could go to the extent of questioning the authority of the teachers in school - one of the reasons for the low morale among teachers. Last year, in a secondary school, a parent used a broom to attack the disciplinary master, causing him to fall into the drain and be injured. Instead of standing behind the teacher, the Ministry of Education official advised the disciplinary master not to report the matter to the police in an attempt to tone down the whole matter, and for fear of antagonising the parent. This act of condonation serves to encourage the cultivation of such misbehaviour. If the fate of a disciplinary master is such, then what will it be for the ordinary teachers? There is an old Chinese saying: "Even if he is your teacher for just one day, you must respect him for the rest of your life as though he is your father." The mention of this saying has made me sad.

Fifthly, promotion prospects for teachers are few and limited. Teachers do not receive support from the parents, neither are they appreciated by the Ministry of Education. This is especially so for those good teachers who have put in more than 10 years of service. They have regarded the teaching profession as their career for life. But, their promotion prospects are slim, and they get increments of only $20 to $30. Gradually, the teaching career is no longer regarded as a career with a promising future.

Sixthly, the present allowance for a Head of Department is only $300. This is not commensurate with the long working hours, heavy workload and great pressure they have to face as Heads of Department. Moreover, some teachers are merely made to act as Heads of Department without official appointment by the Ministry of Education. As a result, many capable teachers do not want to be made Heads of Department. They feel that the Ministry of Education is just exploiting them, with no real intention of promoting them. This has indirectly given rise to doubts and strain on the employer-employee relationship.

Seventhly, as it is not easy to employ clerks and administrative staff, many teachers have to undertake the extra burden of administrative work. Many teachers are complaining of the heavy administrative duties that are affecting their teaching work.

Eighthly, to the teachers who are responsible for the teaching of academic subjects, apart from teaching and attending to administrative duties, they have to take care of extra-curricular activities as well. All these extra duties are certainly going to affect their normal teaching.

Based on the above eight points, I suggest that the Ministry of Education take the following actions to resolve the problem of low morale among the teachers:

Firstly, we should have a reasonable system of retention for the poor performers.

Secondly, to re-establish the former institutions like the Boy's Town and the SAF Schools to accommodate misbehaved students with professional counsellors to counsel them.

Thirdly, to return the "cane" to the teachers and give them the authority to use it. Appropriate caning, such as applying it on the palm, can be effectively carried out only if the Ministry of Education gives its support to the teachers.

The Chairman: Order. It is 5.30 pm. We will continue tomorrow.

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

Dr Richard Hu Tsu Tau: Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made progress on the Main and Development Estimates for the financial year 1995/1996, and ask leave to sit again tomorrow.

Mr Deputy Speaker: So be it.