ANNUAL BUDGET STATEMENT

Order read for Resumption of Debate on Question [28th February, 1996],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 1996 to 31st March, 1997." - [Minister for Finance].

Question again proposed.

Dr Ow Chin Hock (Leng Kee): ( In Mandarin): Mr Speaker, Sir, I support the motion moved by the Minister for Finance.

The Budget this year has been popularly received. In a dialogue session conducted by the Feedback Unit on 1st March, 1996, all participants, including the few who asked the Government to give more assistance to the local SMEs, supported and welcomed this year's Budget.

Personally, I feel that there are two main characteristics in this year's Budget. First, it is very generous. Through tax deductions, rebates and asset enhancement, the Government has proposed to increase the disposable income and assets of the people to enable all its citizens, including those in the lower income group living in 1-room and 2-room HDB flats, to have a share in the fruits of economic growth, thereby encouraging our people to be more hardworking and to actively increase their savings. This is the philosophy advocated by the supply-side economists. Here I would like to suggest that the Minister for Finance release some facts and figures to illustrate the various benefits enjoyed by the people of different income levels and living in different types of HDB flats after taking into account the tax reductions and the various rebates so that they can make a comparison. In 1994, when the Government implemented GST, such facts and figures were released.

The second feature of this year's Budget is that it is pro-growth. On the one hand, it cuts corporate tax and property tax rates to increase the after-tax profit and to moderate cost increases. On the other hand, through tax concessions and other incentive schemes, it selectively promotes the growth of certain industries and activities. The financial service, high-tech creative service, knowledge-intensive industry, and environmental friendly activities which conserve energy and water, as well as activities which raise capital fund from overseas, will benefit from these incentives. However, the effectiveness of these incentives to enterprises would depend on how well they can make use of such incentives and concessions.

The local SMEs face many limitations and difficulties. These difficulties can be further discussed in the Committee of Supply. I urge the Government to give special consideration to the local SMEs in the proposed Development and Expansion Scheme to give comprehensive assistance to their development. I also hope that the Government will announce the details and procedures for applications for the incentive scheme as soon as possible.

Generally, the companies and the people are more concerned with the tax changes. However, in this year's Budget Statement, the Finance Minister has also highlighted two important issues. Firstly, the Government's policy on the supply-side fundamentals. Secondly, the substance of the reform of the civil service management and control system.

On the first issue, the Government's policy on the supply-side fundamentals is correct. Many scholars of planned economies are very clear that the former Soviet Union and China (before its reform and liberalisation) had wasted a lot of resources. These scholars will surely praise the Singapore Government's supply-side policies. One such policy is the pricing of the factors of production. If the factors of production such as land, labour, electricity, fuel and telecommunications are not correctly priced, it will result in the distortion of allocation of resources and even wastage of resources. I agree with this economic principle. However, when the Minister for Finance used this policy to explain the proposed increase in electricity tariffs, it is not convincing enough. Some scholars and the more educated people would ask: (1) What should be the adequate rate of return on investment in power supply? (2) Would the rate of return consider economic externalities? (3) What are the differences in accounting principles and methods of calculations between the World Bank's acounting system and the commercial accounting system that have resulted in different rates of return on the investment in power supply?

However, the main worry of ordinary folks is whether the increase in electricity tariffs will affect their cost of living directly and indirectly. Are the proposed utility rebates enough to offset the increase in their cost of living due to the increase of electricity tariffs? Enterprises, particularly those in industries which use a lot of water, are concerned whether their cost will increase. A more important question is whether the other factors of production, such as land and labour, are priced correctly because of the Government's interference with their markets and levies are imposed on these factors of production. I suggest that the Minister for Trade and Industry give the House a more detailed explanation in the Committee of Supply.

On the second issue, I support the proposed reform of the civil service. This would enable the civil service to be more flexible, to have more initiative, and to move towards the target of being service-oriented. However, there would be difficulties in its implementation. For Government departments which deal with various applications, issue of identity cards and the treatment of outpatients, although their output can be quantified, the output is time-based. In formulating the performance indicators, quality should not be sacrificed for more output. On the other hand, the output of services in many Government departments is extremely difficult or even impossible to quantify. The Minister has suggested that the GDP growth be used as the proxy for the output growth of these departments. In national income accounting, the normal practice is to estimate total output of the public sector by its expenditure, but the present suggestion of the Minister is to use the GDP growth as the proxy for the increase in the budgeted expenditure of these departments. Is there a contradiction between these two approaches?

The two Opposition Members, Mr Ling How Doong and Mr Chiam See Tong, have described this year's Budget as generous. One of them said that it is an "Election Budget". This is wrong and misleading; the rebates, tax cuts and the asset enhancement programme are not unique in this year's Budget. They were implemented before. This is the Government's policy of sharing the fruits of economic success with the people. Returning the wealth to the people so as to encourage the people to work harder and to save more is both correct and desirable. However, some skills and art are required when giving away ang pows. On the one hand, we want to avoid raising the expectations of the people too high and take the ang pows given by the Government for granted. On the other hand, we must not give the people the feeling of being at the beck and call of the Government ( ). Giving of ang pows has to be done with more compassion. For example, at the end of last year, the advisors to grassroots organisations personally presented the Edusave Merit Bursaries to outstanding students from the lower income families and this was a very wise thing to do. This sort of personal touch is certainly more sincere and more personal than to simply credit the amount to the beneficiary's account through the computer. It also makes the people who have received this award feel more humane. So we must have the proper art and skills in distributing the wealth. We should not sacrifice compassion for efficiency when we distribute wealth, even diminishing the meaning of giving away ang pows. I do not know how the Minister for Finance feels about this.

In last year's Budget Statement, the Finance Minister mentioned about the building of a cohesive society. As far back as 18th February 1981, I mentioned in this House the undesirable consequences resulting from an imbalance between the cultural development and economic development. At that time I mentioned that when we entered the 1980s, we should look back at our achievements over the past two decades. We must review in the process of rapid economic development and rising standards of living, what have we lost as a nation and a people? My view at that time was that the trends of materialism, utilitarianism and individualism had eroded our moral values.

Mr Speaker, Sir, in the past few months, the anti-social and ugly behaviour of some Singaporeans are clear symptoms of such an imbalanced development. This has resulted in our political and community leaders suddenly having to ask themselves: What kind of a society is Singapore turning into? What kind of people are we Singaporeans? Allocation of more funds for the building of arts centres, sports stadiums and the financial support for the arts and sporting activities are necessary. However, how are we going to cultivate the individual culture-ness, the moral values and social behaviour of Singaporeans and to enhance the cohesiveness of the family is a very difficult but absolutely necessary task. It is one of the keys to the future survival of Singapore. During an economic recession or a national crisis, can our people cooperate with the Government to face challenges together without panic (

)? Or will everybody seek his or her personal paradise and disregard the national interest? We must always remember that men do not live on bread and butter alone.

I do understand that this is beyond the jurisdiction of the Minister for Finance. It is a challenge that the Government and the people would have to face together. However, can the Minister for Finance consider giving some incentive schemes or take measures to promote the effort in this field to balance the economic development and cultural development?

Can the Minister for Finance consider the following suggestions:

(1) As the Senior Minister has suggested, to impose tax on the basis of families so that members of a family could share in the various benefits and social services provided by the Government. This will help to enhance the cohesiveness of the family.

(2) To allocate more funds to assist volunteer organisations so that they will not waste too much time and energy on fund-raising, instead they can focus their attention on how to organise more charitable and social activities and also to attract more young people to participate in these activities to help the poor, the old and the less privileged people in society, thereby indirectly cultivating their moral values.

(3) To allocate more funds to TCS and RCS to produce and telecast more current affairs, documentary and drama programmes to enhance the cohesiveness of the family, and to inculcate moral values and enhance the culture-ness and social behaviour of the individuals. TV and radio programmes have great influence on the silent majority.

Mr Speaker, Sir, I support the motion.

Mr Ling How Doong (Bukit Gombak): Mr Speaker, Sir, the Government talks of creation of wealth. To me, creation of wealth would mean either to make or generate wealth by doing business, investment or by putting money in the bank to get interest. Presently, Singapore has accumulated more than $90 billion in our reserves. It will come to $100 billion very soon. If this amount is invested, and there are returns from this money invested, then I would say it is creation of wealth. As far as we are concerned, neither this Parliament nor the people of Singapore really know where our money has been invested and how much. Nor have this House nor the people of Singapore been informed what are the returns on thse investments so far. We have no information about the returns or investments in every year's Budget. And if indeed we do have returns on these investments and if this money is returned to the people, then you can say it is creation of wealth. As it stands now, it is the Government's policy that if it collects more and in the end there is any surplus, it will be returned to the people.

To me, the Singapore Government is like a sheep farmer. Every year they shear the sheep for their wool and at the end of the year, they return one strand of the wool to you and say, "There you are! We created wealth for you." And you must not forget that out of the revenue of the Government, nearly $4 billion came from non-traditional sources. I give you an example - COE. COE is created as a temporary measure to curb the increase of the car population. Similarly, ARF and the foreign workers levy. These are non-traditional sources of revenue for the Singapore Government.

An hon. Member: Non-traditional?

Mr Ling How Doong: "Traditional" means the usual source where you get the money from every year. The Government is collecting this revenue year in and year out. But this is an interim measure introduced for a certain purpose. So we call it "non-traditional" source. There is a Mandarin saying "Yang mao chu zai yang shen shang" ( ). It means that whatever you are given, you pay for it.

Various measures had been introduced in the past to curb car population. You have the COE, the ARF, very steep road tax, diesel tax and ad valorem duties on petrol. We have succeeded in curbing the growth of the car population. And very soon there will be implementation of the electronic road pricing which is a very equitable measure to penalise the road users. The more you use the road, the more you pay for using the road. Therefore, in view of the present position, I would suggest that the Government should do away with ARF and reduce the road tax. In Australia, they do not have such a thing as road tax, but they call it a licence or registration fee. In other words, you pay every year. Irrespective of the cubic capacity of your car, you pay about $300 a year. And in the United States, the last time I heard it was about $98 for vehicles on the road. But here it depends on the cubic capacity of all the vehicles. I would also suggest that the Government should do away with diesel tax and also reduce the ad valorem duties on petrol. Of course, if you do away with all these, it will cost the Government at least $5 billion from this non-traditional source.

Presently, taxis are paying about 70% of the COE and they pay a flat rate of $2,000 as far as ARF is concerned. Of course, when this was introduced, the Government said it was a way of curbing or controlling the number of taxis on the road. But I disagree fully simply because it is not open to anyone who can just drive or ply a taxi on the road. One must apply for a licence. The Government can control by way of restricting the number of taxis that can be on the road. Therefore, the reduction of all these would benefit the taxi drivers and the commuters.

Singapore has got a duopoly in the transport system. I would say not even duopoly, it is monoploy in fact. Why do I use the word "duopoly"? Because we have two main bus operators - TIBS and SBS. But I would explain later that, in fact, it is monopoly, not duopoly. Duopoly would mean that it is like a competition in any sports. You have two athletes running. One is running a 50-metre race at one track; the other is running at another, say, a 100-metre track. This is not competition. Why I say this is simply because we have SBS and TIBS. But they are not running the same major routes. So it is not competition. And it is not healthy when you have monopoly because commuters have no say. We are completely at the mercy of the bus operators.

Public transport should serve a public purpose. Of late, we have seen some bus companies just withdrawing from some of the routes because they say they are non-profitable. And who suffers? The people suffer. Why can we not follow, eg, Hong Kong? They have more bus services to compete. In fact, they have smaller bus companies to augment or supplement the bigger companies and because the smaller companies have lower overheads, they therefore can afford to run the minor routes and thus benefit members of the public. In fact, it would appear that the bus company is slowly converting more and more of their routes to air-conditioned bus services and invariably the bus fares would go up. If the intervals of non-air-conditioned buses are not reduced, it is fair enough. But it would appear that with the introduction of air-conditioned bus service, the non-air-conditioned services are automatically staggered. You have to wait for a longer time. In other words, those who are used to travelling by non-air-conditioned buses to save 10-20 cents may miss their classes or may be late for work because the waiting period is longer. Instead of having one bus every five minutes, you now have a bus about 10-15 minutes later because of the introduction of air-conditioned bus services. So it is very unfair to a lot of the working population or students who have to rush to the university, college or school. It is very unfair to them because you are imposing this on them, and giving them no choice. If you have more bus services, at least they are given a choice. So if you want, you have got money, you want to travel in comfort, travel by air-conditioned bus. If you do not want that, you travel by non-air-conditioned bus. The Government should seriously consider getting other bus services to compete.

The Government should stick to its original objective when the CPF scheme was first introduced. The intention and spirit of the CPF scheme was that the money will be put aside, and when you reach the age of 55, you would be allowed to withdraw your money. Now, it appears that you cannot withdraw the total amount when you reach the age of 55. The Government has started off with the Medisave scheme where we have to put aside a certain amount for Medisave. With the introduction of the Minimum Sum Scheme, you have to wait until you reach the age of 60, then you are allowed a monthly withdrawal of $230, that is to say, if you have sufficient funds in the Minimum Sum. If you do not have this amount, you will not be able to get $230 a month. The Minimum Sum is divided into cash and property. If you are the owner of a flat, you can pledge your flat and you have to pay cash of about $36,000 into the Minimum Sum. May I suggest that if the amount is not allowed to be withdrawn at the age of 55, the Government should allow owners of HDB flats to pledge their flats without having to pay cash to top up the Minimum Sum.

In fact, I accidentally met a person about two months ago, who told me that he would be reaching the age of 55 and he would be withdrawing so much money. He was very happy as his flat is worth about $110,000. So he had calculated that he could withdraw so much. When he went to HDB to find out how much he could withdraw, he got a shock of his life when he discovered that the amount was much less. He asked the HDB officer and was told that when he calculated the amount that he could withdraw under the Minimum Sum Scheme they did not base it on the market value of the property. They base it on the time of the purchase. He bought the property at $19,000, but now it is worth $110,000. What happens is that he must make up the difference between $19,000 and $40,000, in other words, he gets much less. That is what happens. The Ministry can confirm this or otherwise.

The Singapore Government has been encouraging women to work so as to increase the workforce in Singapore. On the one hand, it is encouraging more and more housewives to work. On the other hand, it is increasing the foreign workers levy. In Singapore, I think we have at least 500,000 people whose income is less than $2,000 a month. With $2,000, minus CPF of $400, you get $1,600. If you have two school children attending independent school, or for that matter attending kindergarten, and the fees are between $85 and $180, I really do not know how they can make ends meet. There are a lot of housewives who have not much education and who want to work in a factory to assist their husband. But they have found it not worth their while simply because if they work in a factory, they are paid about $800-$900 with overtime. With the foreign maid levy taking away $330 and provision of food for the maid, they can hardly get back $300-$400.

Dr Tan Cheng Bock (Ayer Rajah): Mr Speaker, Sir, can I seek a clarification? Is the Member saying that those who are earning about $2,000 can afford a maid?

Mr Ling How Doong: No. Mr Speaker, Sir, in fact, my understanding is that if your income is $2,000, you are qualified for a maid.

Dr Tan Cheng Bock rose ---

Mr Speaker: Order. Mr Ling, would you give way to Dr Tan?

Mr Ling How Doong: Yes, of course.

Dr Tan Cheng Bock: If I get it correct, if you earn $2,000 you can still afford to have a maid. Maybe the Minister can clarify.

Dr Lee Boon Yang: Mr Speaker, Sir, my Ministry looks at all applications for foreign domestic workers on the basis of whether the household income is able to sustain the payment of the foreign workers levy and also the domestic worker's wages plus all the other expenses. We do not have a hard and fast rule. It may well be $2,000. It may well be $3,000. It depends on the circumstances of the application.

Since I am on my feet, Mr Speaker, Sir, would you allow me to seek clarification from Mr Ling? I heard him saying that people have been asked to pay cash to top up their Minimum Sum. I would like Mr Ling to produce evidence that we have asked people to pay cash to top up their Minimum Sum because that is not how the Minimum Sum is being operated and that is not my understanding of how the revised Minimum Sum Scheme is being implemented.

Mr Ling How Doong: Mr Speaker, Sir, I did not say I have evidence of someone who was asked to pay cash to top up the Minimum Sum. What I have cited was someone who wanted to withdraw his money. That was my example. But what I am saying is that for the CPF Top-Up Scheme, the amount for the Minimum Sum is through CPF. You are paying back through CPF. In that sense, it is cash. If your CPF is deducted, you will get less. Is it not as good as you are paying cash? Of course, it is over a period of time. If my income is $1,500 and I have to top up the Minimum Sum, I will take back $1,200. Is it not cash every month? I will get $300 less. In that sense, it is cash.

One more point which I would like to make here is that the foreign maid levy and the foreign workers levy are imposed, as explained by the Labour Ministry, to curb or control the influx of these workers. I mentioned earlier about controlling the number of taxis. Similarly, workers and maids are not allowed to come here at any time they want. They must apply for a permit from the Labour Ministry. In the same way, the Labour Ministry can impose a quota on the number of maids or foreign workers coming to Singapore. Therefore, I am suggesting that they should reduce the foreign maid levy and foreign workers levy. Some of them are paying about $350 to $400 a month. And it is because of this payment of levy that you find property prices have gone up because overheads and costs have gone up. If you reduce the levy, you will be able to stabilise the property market. In fact, quite a substantial part is being paid.

Mr Speaker, Sir, I would urge the Government to do more for the poor and the disadvantaged. There ought to be more subsidies in medical treatment, ward charges and operation fees for the poor. As it is now, the amount of subsidies is just not sufficient. I suspect that the so-called subsidy by the Government is not below cost subsidy but below market price subsidy. Let me cite an example. If you go to a polyclinic, you pay $7 per visit excluding medicine. Formerly, you may have paid $12 including medicine. It varies. So you can say, on average, you probably pay $13-$14 per visit to the polyclinic. But if you visit a private practitioner, you pay about $16. But you must not forget that when you go to a private clinic and they charge you $16, the doctor must have made at least 50% from there. He must have made $8 from there. So the actual cost is only $8. [Interruption.] Please tell us whether doctors make less than this.

An hon. Member: How about lawyers?

Mr Ling How Doong: Do not mention about lawyers. It is not because I am a lawyer. But let me tell you one thing. In Singapore, there are so many lawyers who can hardly earn a living and there are lawyers who are earning about $200,000 or $300,000 in certain months. So do not compare it that way. It is as simple as that. In any profession, it is not necessary the best that will make the most money. It depends on your contacts. It depends on your clientele. You may be a lousy lawyer but if your contacts are good, you can engage a good lawyer to work for you, which is what happens in Singapore. So do not compare it that way. I am talking of medical health care. If the Government is serious about subsidy, the subsidy should be below cost and not below market price.

I cite a simple example. In Singapore, C class ward charges are $25 per day, excluding food, toilet paper, medicine, etc. For a C class ward, the Government claims there is a subsidy of 80%. So without subsidy, it comes to $125 per day. If you compare with a private ward outside - we have a number of hon. Members here who have clinics outside - you will find that, for $180, you stay in a two-bedded ward with an air-conditioner, telephone and TV. So is this subsidy? In a private hospital, in a four-bedded ward, you pay $157, with air-conditioner, colour TV, etc. Bearing in mind all the infrastructure and equipment, everything in the hospital is paid for from the taxpayer's money. Therefore, when you talk of subsidy, the Government should make sure it is below cost subsidy. It is very easy to work it out this way. If the private hospital charges $200, how much do they make from this amount? If they make $100, that means their cost is $100. So if members of the public are asked to pay $80, that means the subsidy is $20. It is very simple. We do not have to go beyond that. The Government should do that. Then I will agree that it is really subsidising Singaporeans.

As regards kidney dialysis in Singapore, I was told that a patient has to pay a minimum of $500-$600 per month for treatment. There are some members of a family who just do not have this amount. Their income is about $1,200. If they take away $600, they can hardly survive. I think the Government should be more flexible on these poor and disadvantaged people. The unfortunate part is this. No one knows what is the cause of kidney trouble. We cannot take preventive measures. It comes out of the blue. And believe you me, I had a friend who died about six months ago. When he first contacted the disease, he sold his private house and he spent $250,000. Later on, he went to the National Kidney Foundation for treatment. But because of the regularity of the treatment, it affected his work. So he staggered the treatment. Instead of going twice or three times a week, he went once a week for treatment. Then he was admitted into hospital in a very serious condition and he passed away not long ago. He was a good friend of mine.

I think we should have a heart for these unfortunate brethren of ours. Unless, of course, if a man smokes and drinks and he suffers from kidney trouble, there should be no subsidy at all. He deserved it. He asked for it. But if a patient suffers from kidney disease and it comes from nowhere and cannot be prevented, I think we should have a heart for our fellow brothers or sisters.

I also urge the Minister for Finance to seriously consider exempting hospital charges from GST. In other words, whatever hospital bill a person pays, he does not have to pay 3% GST.

Similarly, I will also ask the Minister for Finance to consider granting medical benefits to the children of women civil servants. At present, only children of male civil servants are covered but not the children of women civil servants. I would urge the Minister to consider granting medical benefits to the children of women civil servants. Because this involves about $8 million a year only.

The fees for independent schools have increased. In some of the independent schools, the students have to pay about $200 per month and some pay $175 per month. It varies from school to school. To me, I feel that this amount is beyond the ability of many Singaporeans. I therefore urge the Government to really consider granting more scholarships or bursaries to the poor. At the secondary level, it should be based on the ability of the students to pay. In other words, those from well-off families, and in recognition of their performance in school, they should be given book prizes. In terms of money, the Government should give those who really need the money for them to advance their education.

I now come to community development. If I am correct, in the whole of Singapore, we have only one home for the aged and the destitute run by the Government. The rest are all run by voluntary organisations, churches and clan associations. Of course, I know that they are subsidised by the Government. But what I am saying is that the Government is in a position financially to build at least one or more homes for the aged.

Mr Speaker: Order. Mr Ling, your time is up. Mr Leong.

Mr Leong Horn Kee (Thomson GRC): Mr Speaker, Sir, the Minister for Finance has been extremely generous this year. Adding up all the numbers, I have counted that he is giving away a total of $1.86 billion in 1996 in the form of tax cuts, incentives and rebates announced, and another $1.07 billion in 1997. Therefore, I think that Mr Ling How Doong is dead wrong in giving the example that the Singapore Government is like a sheep farmer, meaning that it has taken all the wool and giving only one strand of wool back to the people. If he sees one strand of wool to be worth $1.86 billion, this must be a very long and thick strand of wool! It can go round and round the world and create a lot of woollen clothing for Singaporeans as well. And even the $1.07 billion announced this year is for 1997. In 1997, it could even be a bigger figure. Indeed, like Dr Ow Chin Hock, I can call this a very generous Budget. During this year's Lunar New Year festive period, the Finance Minister has become the " " or God of Fortune. In Chinese, cai zheng bu zhang cheng wei cai shen ye [

] He is bringing huge hong baos and good tidings to all Singaporeans.

Even though this is a generous Budget, I agree with Dr Ow Chin Hock that it is quite mean of the Opposition MPs, such as Mr Chiam See Tong and Mr Ling How Doong, to debase the Finance Minister's generosity by calling this an "election budget". This creates an unfair impression that the Government is giving out incentives just to win votes.

Let me give a few reasons why. First, it is as a result of the 37 years of good PAP Government that our country is doing so well, attained international recognition and achieved excellent economic results consistently year after year. The Government has accumulated surpluses no doubt, but it has also built excellent physical infrastructure, industries and, at the same time, lowered taxes, given rebates and made CPF Top-Up contributions.

Secondly, the various rebates and tax reductions have also been given in the previous years. Most of the goodies are not only given for the first time this year. The Prime Minister announced today that the Government has in fact returned $1.65 billion of surpluses last year. So we must be the envy of many governments. Many Western countries have not been able to even balance their budgets, not to say any attempt to put up election budgets during election years.

Thirdly, if the Government had wanted to win votes, it could easily have introduced many give-aways and set up many social welfare schemes to dole out millions, maybe even billions, just to win votes. We have seen the perils of such social welfare programmes especially in the Western countries. I am sure Singaporeans do not want our Government to adopt such welfare schemes that will lead the country down the slippery perilous path of doom.

If we were to examine the Budget very closely, we can see that this year's Budget is not really a rampant free for all. It is a very carefully prepared Budget. As I have said, the Minister is generous no doubt. But the incentives are not given away freely and mindlessly. There are several incentives, rebates and measures being introduced that are set to achieve certain specific objectives. These are tax incentives to encourage industries to promote energy and water conservation, rebates on utilities, rental and S&C charges to assist the low-income group, and tax relief to reward National Servicemen and their families in recognition of their national service contribution.

However, in comparison, there are only a limited number of incentives given to the business sector. The Budget can be deemed to be not overly stimulative to the business sector. I would remark that this approach is quite appropriate this year, since the economy is doing relatively well. Any unnecessary over-stimulation of the economy may well lead to further cost increases, wage increases and inflationary pressures.

The Government is giving away many incentives and rebates which total $1.86 billion in 1996. It is remarkable that after spending this amount in "hong baos", the Minister for Finance will still have a $7.1 billion surplus in the new financial year 1996/97. Moreover, this surplus is attained after paying for both operating and capital expenditures.

If such healthy surpluses are continuously achieved in future years, I would like to suggest that the Finance Minister should try to continue to give rebates on S&C charges, rentals and utility bills. These rebates are particularly meaningful to the low-income group. In addition, I would also like to urge the Minister to consider further reduction of direct taxes such as corporate tax and income tax. These rebates and tax reductions serve as a counter balance to the increasing contributions being made to other indirect taxes, such as GST, COEs and maids' levy.

However, I think it is also worthwhile to remind Singaporeans that these numerous rebates and tax reliefs can only be given by the Finance Minister if our economy continues to do well. If any unexpected events were to occur or the economy suffers a setback, then Singaporeans should know very well that there will be a cutback on the rebates and reliefs. In the worse case, even our HDB Upgrading Programme and Edusave Programme will have to be scaled down if the Government cannot generate enough surpluses during the current financial year.

At present, we have a happy problem of how to spend the surpluses. Many people are clamouring to suggest how to spend this extra money earned by the Singapore Government, the PAP Government. Many ideas have been suggested and more will be proposed by both Government MPs as well as our Opposition MPs who are eyeing these surpluses and telling us how to spend them.

I would like to suggest that the Government should focus on channelling the surpluses into two main areas: (1) on physical infrastructure; and (2) on education and training.

On physical infrastructure, I wish to suggest that the Government can spend more and advance the development plans for the MRT system, light rail system, roads, industrial parks, land reclamation and power stations. In fact, more Government spending on physical infrastructure is beneficial directly to the Government, as the State owns 52% of the total land in Singapore, while statutory boards own another 21%. Any appreciation in land value will see the State as the largest benefactor, as it is the owner of 73% of all lands in Singapore.

On education and training, I feel that the Government can afford to be more generous in upgrading our education system and the school infrastructure. For example, schools get grants for the basic standard items. However, for extras such as video facilities, computers and others, the schools are expected to raise their own funds via fund raising. As a result, we often hear of calls for donations or fund raising projects by schools. While there are some positive effects in getting the schools to mobilise teachers, pupils, parents, alumnis and well-wishers to raise funds, I think it can also be very taxing, disruptive and time-consuming for all concerned. Principals, teachers and pupils should be allowed to devote more of their time to teaching and learning, rather than to fund raising. Hence, I would call on the Government to be more generous and allocate more funds to schools to pay for the useful supplemental expenses such as computers, video libraries and enhanced sports facilities. Government can also consider giving more overseas scholarships, Government-sponsored retraining programme for workers, expansion of technical institutes, polytechnics and universities. Along this vein, I would like to say that more funds can also be allocated for the highly commendable Edusave Merit Bursary Awards Scheme that was introduced last year. This is a brilliant scheme.

Mr Speaker, Sir, I wish to raise a few specific issues and suggestions. It is a kind gesture of the Government to increase the tax relief for National Servicemen to $2,000 and give tax relief of $500 each to their parents and wives. However, I understand that about 75% of the population do not pay income tax. This means that three out of every four parents or wives do not enjoy this tax relief. This is particularly true for the low-income group. I would like to suggest that the Government consider offering an equivalent amount in the tax payable (say, they are taxed 10% average nationally) in the form of a direct payment into the CPF accounts for those who do not pay income tax. Hence, for this incentive, the National Servicemen, their parents and wives can have a choice to opt for either the full tax relief or an equivalent amount (say 10%) as direct payment into their CPF accounts. This way, the relief offered can become a real and meaningful one, so that it can be enjoyed by the lower income groups who do not pay tax.

I would like to suggest that the Government can also do more to upgrade the common areas in the private residential estates, such as constructing more footpaths, jogging paths and even covered linkways and more play equipment and landscaping in the private estates. These expenses form only a relatively small amount compared to the $1 billion to $1.5 billion being spent on HDB estates on the Main Upgrading Programme, Interim Upgrading Programme and other CIPC-funded projects. Since comparatively a smaller amount of money is spent on these private estates, I think the Government should not be stingy to help private estates to upgrade a little.

Although the Government has given explanation and clarification on the proposed privatisation of Singapore Power, I am afraid there is a need to explain further. I do not know whether this is a case of the Government not explaining clearly enough or the people not listening carefully.

Fundamentally, I believe we can understand the Finance Minister's clarification in his Budget Speech that we need to raise electricity tariffs so as to price our factors of production, such as electricity, at the true economic value. This is to avoid distortion in consumption and wastage. This part I believe the people can understand and accept.

What needs more explanation is the rationale for privatisation. There is also a need to justify the target rate of return of 10-11%. The people's perception is that the electricity tariff increases are linked to the plan for privatisation and listing of Singapore Power. The question is then asked: Why not just corporatise and abort the idea of listing, and then aim for a lower rate of return?

As a general policy review, I would like to suggest that the Government can also do a review of the overall policy and strategy of privatisation of Government agencies. The public perception created so far is that corporatisation and privatisation appears to lead to increases in rates and charges. Other instances that come to mind are the restructuring of Government hospitals that leads to higher hospitalisation bills, rationalisation of MRT and bus routes that leads to more inconvenience and higher charges for those affected. Of course, there were good explanations for these policies. It appears that there is a need to explain further and remind the people of the wider objectives of these privatisation programmes. And more needs to be done to conduct talks and seminars, and provide publicity materials to enable the overall purposes and intentions to be put across clearly to the people.

One excellent example of a well planned exercise conducted to explain a new Government initiative is the introduction of the GST. We may take a leaf or two from this example. Another need is to do a review of the progress made in the past privatisation exercises such as hospital restructuring, Singapore Telecom, MRT/bus rationalisation, to demonstrate or substantiate whether the original objectives have been achieved.

Mr Speaker, Sir, please allow me to round up my comments by referring two other subjects to the Minister. One is on the subject of promotion of water and electricity conservation. I am pleased that the Government has introduced further incentives to promote water and energy conservation in industry. Water and electricity are two very important scarce resources. I would like to suggest that the Minister should give an update to the House on the status and success in water and electricity conservation campaigns and the future plans for these campaigns.

The second topic is on the woes of the retail industry. The retail industry currently is facing acute problems of poor business arising from excessive competition and rising costs. These problems are encountered by both large and small retailers. I would like to ask whether the Government can do something to assist them.

The Minister for Trade and Industry has said previously that the best thing to do is for the retailers to refuse higher rentals or simply not start the retail business if costs are too high. But I think more can be done. The Government should look into whether less retail space should be added to the current over-supply by releasing fewer tenders of land for shopping centres and retail spaces. Another idea is to provide retailers with more information of the current stage of the retail industry so that new entrants can be better informed as to whether they can well afford to start viable new retail shops.

Sir, I wish to conclude by congratulating the Finance Minister for his generous Budget this year. Let us hope the economy can continue to do well in future so that he can be equally generous in future Budgets, if we can afford it.

2.38 pm

Dr Lee Tsao Yuan (Nominated Member): Mr Speaker, Sir, in this era of globalisation where capital is mobile, labour, both skilled and unskilled, moves freely across borders, and information is transmitted almost instantaneously via the Internet, there is one factor which is not mobile. The quality of this factor varies from country to country and has become an increasingly crucial ingredient in determining a country's competitiveness. This factor is governance, in particular, economic governance.

We in Singapore are fortunate that our economic governance has, by and large, been right. The formulation of economic policies has been according to sound economic principles and have been efficiently implemented at the appropriate time.

I would like to categorise Singapore's principle of economic governance into two categories. The first category pertains to policies which had been put in place since the beginning of our process of economic development in the 1960s and has remained essentially unchanged for the last 3 1/2 decades and is likely to remain so in the foreseeable future. Among these principles are, first, openness to international goods and capital and selective openness to labour - selective because there are political and social considerations to be taken into account. Second, a taxation and expenditure system that has minimum dampening effects on the incentive to work, save and invest. Third, the practice of meritocracy in the labour market and in the educational system. Fourth, emphasis on capital formation, both in terms of physical infrastructure such as roads and airports as well as human resource development. This set of policies is broadly similar to those practised in other rapidly growing East Asian economies and are more or less the East Asians' recipe for economic success. A fifth principle is that of fiscal prudence. I would like to comment on the operation of this principle.

One of the first figures which catch the eye when examining the Budget book is the size of the surplus - an estimated $7.1 billion for fiscal year 1996 or 5.4% of GDP, the estimated excess of receipts over outlays is $12.8 billion or 9.8% of GDP. These are not small figures. I was therefore curious as to the extent to which these surpluses are planned and the extent to which they are unanticipated and occurred because of shortfalls in expenditure and unexpectantly high revenues. I therefore checked the figures for the estimated, revised and actual surplus figures for 1990 to 1995. This is what I found.

Let me cite the figures for the surplus which is defined as "Operating Revenue Less Expenditure". Surpluses Year Estimated Revised Actual $ Billion $ Billion $ Billion 1990 1.5 3.2 2.5 1991 1.4 1.8 3.9 1992 1.0 3.7 5.6 1993 1.7 4.1 7.8 1994 2.2 7.1 9.7 1995 5.8 6.3 (Not available)

In short, except for 1990, the story is very consistent. The actual surplus is invariably much higher than the revised figures, which in turn is also higher than the estimated figures. For example, for 1994, the estimated surplus was $2.2 billion, while the actual surplus was $9.7 billion. The story is similar for both the budget surplus which nets off the contributions to Edusave and the various CPF Top-Up and Share-Ownership Schemes as well as for the excess of receipts over outlays which includes net investment income and net capital receipts and excludes net lending. For example, for 1994, the estimated budget surplus was $1.6 billion, the revised figure was $6.0 billion while the actual amount was $8.6 billion. For the excess of receipts over outlays, the estimated figure was $6.3 billion in 1994, the revised figure was $11.9 billion, and the actual amount was $15.3 billion.

It is no mean accomplishment for the Government to turn on a surplus budget every year when other countries had difficulties keeping their budget deficit from increasing in size. It is far better to have surpluses than deficits. I can also understand the difficulties in the budget process. No one can plan perfectly. When economic growth is stronger than expected, revenues go up. However, the discrepancies in the figures are really quite large. Perhaps this is one area where some tightening up can be made. While I understand the preference to err on the side of conservatism, there is a difference between being cautious and being too cautious. Moreover, there are macro-economic effects of unanticipatedly high withdrawals from the economy.

The second category of principles of governance comprises those which have undergone significant modifications over time. I can cite four. The first is that of the payment of competitive market index salaries to Ministers and key civil servants. Although ministerial and civil service pay has been raised on an ad hoc basis from time to time, 1994 was the first time that such an indexing formula has been introduced. The second is that of the corporatisation of a number of key statutory boards in recent years to become Singapore Telecom, Television Corporation of Singapore and Singapore Power and Gas. A standard format is adopted where two organisations are established, the regulatory agency and the corporatised revenue-generating body, which may or may not be subsequently floated on the Stock Exchange. While revenue-generating service providing statutory boards have been a feature of Singapore's economic institution building, this is the first time that such a wave of corporatisation has occurred. Because of the significance of these two modifications, it is important that there be an assessment of their effectiveness.

I would like to suggest that a review be given by the Government regarding the implementation of, first, the market indexing of salaries of Ministers and civil servants and, second, corporatisation. Such a review could incorporate the following elements: for the market indexing of salaries, has it led to an increase in the number and quality of applicants to the Administrative Service, fewer resignations, happier and more satisfied Administrative Service officers? As for the corporatisation review, the key questions are: (1) Does the newly organised body deliver services better and more efficiently? (2) If it does, then who benefits? Shareholders in terms of higher rates of return? The public who gets more value for money, or both? I would like to further suggest that these reviews be made public not only for the sake of public accountability but also to generate full awareness of the consequences of these two important policy modifications.

The third principle of governance in this category pertains to the correct pricing of factors of production, as mentioned by the Minister for Finance. The recognition that Singapore Power's electricity tariffs are too low means that there was an under-pricing of at least one factor in the past and that this would be rectified in future. I understand that a similar process of accounting for full cost has been in place in the Government for a few years now.

As an economist, I agree that in order for the market mechanism to allocate factors efficiently, factored prices should reflect their true scarcity. In order to have optimal effect, correct factor pricing should be implemented across the board throughout the economy. This will then result in the correct pricing of output and if there is a subsidy, the true extent of subsidy in each activity. But I wonder whether this has indeed been implemented across the board. I refer in particular to the pricing of land. For land-intensive projects under the public sector, has the full price of land been factored in, for example, for HDB housing and for roads? I suspect that if this were indeed done, the extent of subsidy would be higher than what the public realises.

A fourth and final principle that I would like to touch on pertains to the fundamental reforms to the civil service that the Minister for Finance described in his Budget speech. Credit goes to the Government for recognising the need for change to keep up with our stage of economic development and for implementating "PS 21". I agree with the Minister that, "On the domestic front, the emergence of a generation of better educated Singaporeans and an ageing population means higher expectations of and demands on all aspects of public services." A more educated population is one which is more aware of public policy and would like to know why certain policies are implemented the way they are and why others are not. The days are past when the population would merely accept the Government's word that it knows best what to do. A more educated population will ask questions, and I think that it is the Government's responsibility to answer.

It does not mean that there need be any change in Government policy per se. Rather it does mean that public communication becomes more important for the Government. Public communication of Government policy is by and large the domain of politicians. This is rightly so. However, this is not enough. There are many occasions where briefings and speeches are done not by Ministers, Ministers of State or Parliamentary Secretaries, but by senior Government officials. I would therefore like to suggest that public communication be part and parcel of the skills package of senior civil servants. In other words, in order to rise through the ranks, a civil servant should not only be able to manage well but also to be able to communicate well, orally as well as in writing. Public communication is a skill that can be developed. I believe that articulate Permanent Secretaries and Deputy Secretaries would greatly enhance the public communication ability of the Government.

In conclusion, I have attempted to distinguish between two categories of principles of economic governance - those that have remained essentially unchanged over the years and those which have undergone significant modification. I have also attempted to offer some suggestions as to improvement of a few of these principles. Just as a company succeeds by adapting its products to changing demand, a nation succeeds by adapting and refining its policies in response to the changing international and domestic environment. Singapore has succeeded these last 30-odd years by doing so, and I hope that Singapore will continue to have the creativity and boldness to do so in the future. 2.50 pm

Mr Goh Choon Kang (Braddell Heights): Mr Speaker, Sir, despite what the unofficial Opposition leader had said, I think he could not find any solid argument to fault this Budget. And the simple fact remains that we are able to have a surplus budget year after year. I think we should continue to do so if we can. Make hay while the sun shines and also save as much as we can for rainy days.

Sir, for lack of a better term, the Opposition has labelled this year's Budget as an "Election Budget". It is truly regrettable that a pro-business, pro-family and pro-people Budget should warrant such negative remarks. One need not look far to discover that this comment does not have the concurrence of the general population. In fact, the response from average Singaporeans has been very more gracious and constructive than the Opposition's. They appreciate the hong bao given by the Minister and the sharing of fruits of another year of economic success. Indeed, there are many good points about this Budget. Deserving particular mention is the one-off tax rebate of 10% and a top rate cut from 30% to 28% which will lighten the tax burden of middle-income families. In fact, this group has been hardest hit by non-tax measures such as the COEs, foreign maid levy and rising property prices. I am glad that the Government has taken care of this group in this Budget while continuing to keep its focus on lower-income families. On the whole, all groups have gained from the Budget.

Sir, the family has been given particular focus this year. But I believe we can do more. I am particularly drawn to the idea of a family as a tax unit. It would be ideal if our tax policies and future Budget goodies continue to maintain the family focus and explore ways and means to expand it. Recently, the Senior Minister has also briefly touched on this issue at the Tanjong Pagar GRC's Lunar New Year cum Hari Raya gathering. Some participants at the feedback session with the Feedback Unit had also given their support for this idea. I think this is an idea worth pursuing since families are the main building blocks in our society. Although the current income tax structure has already incorporated some reliefs for supporting the various members of the family, such as the parent relief, spouse relief, child relief, we should explore further on how the family can be reinforced as a cohesive and self-reliant unit. I think this is a more positive approach.

Of late, we have seen the passage of the Maintenance of Parents Bill which is, from my point of view, too legalistic and litigious an approach to the issue of maintenance of parents. The House had also debated the Family Violence Bill. These two Bills, though litigious, have the good intention of ensuring that the members of family are well taken care of. The Government has also taken great pains to promote family values and national core values through extensive public education and campaigning programmes. So we have an additional approach and option, and that is, tax incentive to encourage family members to help and take care of each other. The demands and needs of a greying population will eventually put a tremendous burden on the family. They must be supported to meet the cost of living and health care needs of the elderly in the household. The medical bills especially will pose a big burden to the working persons. Allowing Medisave deductions from the children's accounts to pay for the medical bills of their parents or grandparents are inadequate in view of the rising health care costs. The account will be easily exhausted in cases of, say, major operations, chronic sickness or complexities.

Thus, the Government should consider giving more tax reliefs or incentives or rebates for children who continue to pay for the maintenance and medical bills of their retired and aged parents. I am sure that with continuing education, moral persuasion and tax breaks, we can continue to preserve the cohesiveness of the family.

Let me now move on to another area of concern, and that is, giving greater autonomy for higher efficiency in the civil service. I welcome the Minister's announcement of giving greater autonomy for higher efficiency in the civil service. It has introduced the concept of BFR, or Budgeting for Results, whereby resource requirements by the Government departments will be linked to output levels. In addition, every Government unit has to specify its output and set performance targets annually. This will encourage more accountability, responsiveness and effectiveness. However, there is a nagging fear among the general populace that once the Government departments become autonomous like the independent schools, restructured hospitals, charges will go up.

In fact, when Dr Richard Hu launched the first 14 autonomous agencies, it was reported that the Registry of Marriages will up its fees - $15 for faster retrieval service, up $3 from the current fee. Therefore, faster service has come with an increased cost. Another example is the Tampines Polyclinic which has also announced that following autonomy, the waiting time will be shortened. That is good. But what I fail to understand is why must these agencies become autonomous before they can increase efficiency. I am also concerned that for the same need, people have to pay different fees to buy different levels of service, regardless of individual circumstances. And if these departments are measured on how well they look after the bottomline, then the increased service and customer orientation will come at a painful cost for the people. In fact, the corporatisation of Singapore Power is now viewed less favourably due to the announcement that electricity tariffs will soon be increased by 12% to 14%. The Government should tread very cautiously where the corporatisation of state enterprises or the granting of autonomous status to Government agencies is concerned. These agencies serve the people and the economy alike. If these are increased at will without a system of checks and balances, there will be adverse repercussions at all levels. Unscrupulous businessmen will use this as an excuse to trigger off another round of price increases, thereby increasing the burden of the people. Therefore, the Government must still remain in control over the fee charges even though the particular department has been granted autonomous status.

Sir, the final point which I would like to bring up concerns the issue of training. Despite our heavy emphasis on training and upgrading of skills, I am disappointed to note that no fiscal incentives have been announced to encourage the training process. Although the Skills Development Fund (SDF) has been tasked to disburse funds for relevant training, the training process is not happening.

First of all, the application for SDF is tedious. Second, for some reasons, the awareness is not there. The small and medium enterprises are not tapping into the many schemes subsidised by the SDF. As a result, SDF ends up subsidising the training programmes of big companies who would have their own internal training with or without SDF grant. Third, some firms, which are most in need of training and skills upgrading, continue to face the difficulty of sending people for training. Fourth, those who are prepared to go for training are hampered by the lack of know-how and the requirement that they be proficient in English and/or Chinese. This is a problem for those who are older and lowly educated but are prepared to upgrade themselves. Because they do not understand English or Chinese, they are stuck at their level, condemned to working in odd jobs and living from day to day. Eventually, this group will become very frustrated because they would be left behind as our economy becomes more sophisticated.

In fact, if we are talking about equipping an individual with a skill in carpentary, construction, renovation, electrical system, and so on, there is really no need to conduct the course in English or Chinese. So long as there are people who are willing to sign up, the course should be conducted maybe in a dialect or language which is comprehensible to them. In my view, the training for these people is more urgently needed. Perhaps, the Minister can consider tangible incentives to motivate these workers to complete the training course to upgrade themselves. Tax concessions should also be considered for small and medium enterprises which invest on training their employees.

In conclusion, Sir, the budget surplus should continue to be used to reinforce the fundamentals of our society. It should be used generously but prudently to encourage certain ideals, values and principles. More importantly, it should be used to reward those who have contributed and give a helping hand to those who have lagged behind.

With that, Sir, I support the motion.

Mr Teo Chong Tee (Changi): Mr Speaker, Sir, I would like to take this opportunity to congratulate the Finance Minister for presenting to the nation such a glorious budget in which every Singaporean is so generously rewarded for their contribution to the nation's economic growth. Without doubt, the Minister must be again the envy of all his contemporaries in other governments around the globe.

Sir, the budget has been extremely well-received by both the public and business sectors, as well as by private individuals. For the majority of Singaporeans, the announcement by our Finance Minister to give away about $2,450 million in the form of tax changes, rebates and asset enhancement schemes is certainly welcomed. In particular, income tax changes, rebates and asset enhancement for the individuals and households amounted to about $1,722 million which is a whopping 70% of the total amount given. In addition, Government agencies will also be streamlined to be more accountable and responsive under Budgeting for Results. Therefore, the people are the biggest beneficiaries in this budget.

However, Sir, this has also sparked off, quite unjustifiable, the negative perception of the give-aways as an "election budget". Frankly, I am surprised by such scepticism. The Government has a track record of sharing its budget surpluses through creative measures, such as rebates in HDB service and conservancy charges and rent, Edusave, Medisave grant, Pre-Medisave Top-Up, CPF Top-Up grant and asset enhancement schemes, such as SOTUS. And this is made possible only because the economy has consistently done well and the redistribution of surplus will, in no way, erode the competitiveness of Singapore's economy nor compromise the discipline of its people. These are no free handouts. Instead, they will encourage and motivate Singaporeans to strive harder, to ensure that the economy will continue to be robust in future years. And so long as we get the fundamentals right, we will continue to progress and enjoy prosperity for many years to come. Singapore is on the right track and we will progress by leaps and bounds so long as we stay on course under the PAP Government.

Sir, the Opposition politicians may tell the people that it is after all an "election budget". Therefore, these goodies are only to sweeten the ground, in other words, to buy hearts or to buy votes - to put it crudely. This assertion cannot be further from the truth. The fact is many of the pro-people schemes to enhance Singaporeans' assets or to reward them for their hard work are not really new. They have already been either planned or implemented. It is most naive for them to suggest that our voters can be bought with budget goodies when there are so many factors which they will invariably take into account in electing a good government. Singaporeans through their hard work deserve the tax changes, rebates and asset enhancement schemes.

So intelligent Singaporeans know that the budget is not an election budget although this year may well be an election year. They are fully aware that the Singapore Government never plays to the gallery in order to gain votes, it does not have to do so. And it will never stoop so low as to resort to gimmicks or money politics to please or hoodwink the people for political gains. Singaporeans are too smart to be hoodwinked anyway. The PAP Government is honest and its policies transparent for all to see. Its proud track records speak volumes of its achievements over the last 30 years.

Sir, a few years ago, an expatriate by the name of Cedric Serpes, who with his wife has lived in Singapore for eight months, wrote in the Straits Times, and I quote:

`We believe sincerely the average Singaporean is blessed with everything good to the point of being spoilt.' Among many other accolades, he says that the Singapore Government is a government that really cares for its people.

Sir, now let me move to a few areas of concern. Firstly, the impending higher electricity tariffs. Despite a budget that is generally welcomed by all segments of society, the euphoria is cut short by news of impending high electricity tariffs. The Minister for Trade and Industry has disclosed that the raise would be about 12% to 14% over the next three to four years. This will mean an increase of about $1 to $2.50 more a month on electricity bills for the people. The Ministry has also maintained that the proposed increase is a result of a stringent audit of PUB's profitability and the eventual realisation that it has been posting lower returns by commercial standards.

It is unfortunate that the proposed increase is made in the context of the privatisation of Singapore Power. The timing in announcing the proposed increase of Singapore Power tariffs may not have been the most appropriate. And this lends itself to be exploited by those who always like to find faults with the government. It has also led to the perception, rightly or wrongly, that the tariffs are increased to make up for the profitability of Singapore Power and its viability as a privatised institution. Of contention is the emphasis on a reasonable rate of return, ie, 10%. Why 10% return and not 5% or any other quantum? While the people can accept paying full cost for the production of electricity plus marginal profit, they find it difficult to understand the rationale for paying rates which will ensure a market average return for a state enterprise.

Viewed in this light, one can understand the apprehension of the man-in-the-street in relation to the rebates on utility bills ranging from $100 to $150. Although the Finance Minister has assured that the rebates will far exceed the likely increase in annual utility bills, there is still some uneasiness. People may cry foul, complaining that the Government is taking dollars from their right pockets and putting cents into their left ones. Certainly, this issue would warrant further clarifications by the Minister. Nevertheless, the rebate on utility bills is certainly welcomed by the majority of the households as the family now has more cash for other purposes.

Secondly, Sir, the point I want to raise is family as a tax unit. Measures such as rebates on HDB service and conservancy charges and rent and utility bills are particularly welcomed because they benefit the family or household and also reach out to the majority of Singaporeans staying in HDB flats. These household-based measures to redistribute the surpluses should continue to be incorporated in future budgets. If the economy continues to do well, may I request the Minister to also consider giving rebates in household bills such as telecommunications, TV and radio licences, property tax, foreign workers levy, taxi diesel tax and so on. These rebates will relieve the family's burden immediately and free more cash for basic consumption.

The Budget, through its fiscal policies, should also promote family cohesiveness by providing incentives to encourage families to stay together and for the children to support their elderly parents. Although legislation is already in place to ensure that children do look after their parents, we should explore additional avenues whereby people who have done so are rewarded. Besides revising the existing parents' relief to take into account the cost of living, the Minister should perhaps consider allowing children to claim tax concessions for paying the hospital bills of their parents. Although Medisave currently does allow children to pay for their parents' medical needs through CPF, they are inadequate in the long term in view of the rising healthcare costs and an ageing population. They should then be given the option to pay their parents' medical bills either through the Medisave account or by cash up-front, after which they can claim tax concessions. Through this measure, the Government is extending its support to individuals who are taking care of their elderly parents in the family. In this respect, the Government's pro-family policy will undoubtedly promote family cohesiveness and the retention of the right Asian family values, so vital to us in a multi-racial nation.

Finally, Sir, it remains for me to also commend the Minister for doubling the tax reliefs given to NSmen and for extending the scheme to their parents and wives. The NSmen I know and have spoken to have expressed appreciation for the Government's care, concern and generosity shown towards them. The parents and wives of the NSmen, on the other hand, feel a sense of deep gratitude to the Government for finally recognising their role in the total defence of Singapore. However, they also call on the Government to revise upwards their monthly NS allowance as a further recognition of their contributions to the nation.

Sir, I fully support the motion moved by the Finance Minister.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.40 pm.

Sitting accordingly suspended at 3.20 pm until 3.40 pm. Sitting resumed at 3.40 pm