PURCHASE OF PROPERTIES BY SENIOR MINISTER AND DEPUTY PRIME MINISTER BG LEE HSIEN LOONG

[Mr Speaker in the Chair]

Resumption of Debate on the Prime Minister's Statement [21st May 1996].

Question again proposed.

Mr Kenneth Chen Koon Lap (Hong Kah GRC): Mr Speaker, Sir, yesterday, the hon. Member, Mr Chiam See Tong, brought up the issue of Ministers' pay again although this has already been debated extensively in this House. Unfortunately, Mr Chiam is not in the Chamber. Once again, he said that because the Ministers earn many more times than the ordinary worker, therefore, they would lose all moral authority to govern.

Before he engages in the politics of envy again, I would like to request Mr Chiam to do a simple mental exercise. Compare his income to the income of the despatcher in his office. "Income" means his earnings from his practice, his assets which we understand yesterday that he owns a few, and any other incomes such as his MP's allowance, maybe Town Council's allowance, and find out how many times his income is compared to that of the despatcher. I will help him out in this simple calculation. If his despatcher earns $1,000 a month and if his income is $20,000, he will be earning 20 times more than his despatcher. If it is $30,000, it is 30 times, and so on. Perhaps he should reflect on this and tell the House if he, by his own definition, still has the moral authority to sit in this House as a Member of Parliament for Potong Pasir.

Sir, while I appreciate and respect the reason for Senior Minister and the Deputy Prime Minister making their statements in this House to make absolutely clear that there are no improprieties on their part in the purchase of the private properties in Nassim Jade and Scotts 28, I find it difficult to understand the necessity for them to do so, especially after they have volunteered the information through the press statement when the issue of the sales of these two developments by HPL was made public.

The purchase of private properties for investment or otherwise lies with the prerogative of every individual. It is the basic right of all Singaporeans, be they Government leaders or private citizens, as long as they conform to the rules and regulations applicable to everyone, or in the case of elected Members or Government officials, that they do not compromise their position in any way. Therefore, I totally disagree with the hon. Member, Mr Cheo's suggestion yesterday that each Minister be permitted to purchase one property only and likewise his immediate family. Does it mean that a Minister who has no children is entitled to one property and a Minister with four children is entitled to five properties? His sense of logic is most simplistic and naive and if that is the only contribution from the Opposition Member in this debate, I am extremely disappointed.

Sir, during my 30 years of practice as an architect, I have been closely associated with the practice of property development and I can categorically state that it is a usual practice for any developer to offer units for sale to those related with the development, ie, the architects, engineers, lawyers and sometimes associates and friends and even contractors before they launch for public sale. Usually, they would enjoy the same discount given to the subsequent buyers but very often they may even get a slightly bigger discount as an incentive to be the first to make the purchase. But more often than not, personally, I have to decline the offers since I am so intimately connected with the project. I would have known the cost and usually find it difficult to accept the prevailing selling price as I would not have the benefit of hindsight.

Members must have heard that in the case of Nassim Jade, the cost of the project per square foot was $700. It would be difficult for the architect of the project or anyone connected with the project to pay $1,500 per square foot for the purchase. Therefore, it is not necessarily a privilege offered to this group of people. The developers do it for various reasons: very often, as an incentive to ensure the proper execution of the project and, more importantly, to give the subsequent purchasers a sense of confidence by showing that the project is being supported by all those connected with the development.

One other important reason for this practice is for the developer to ensure that during the official launching they can be sure that a certain number of units have already been sold in case they do not receive the desirable response during the launch, otherwise it would greatly hamper the confidence and saleability of the project.

One should not assume that purchasing of properties is a sure profitable investment. As we have experienced in the past, there are many cycles of ups and downs in property prices and it can be a high-risk undertaking. I can recall that around 1979 my own practice was involved in a commercial development in Beach Road. When it was first opened for sale the commercial area was sold for $160 per square foot and was subsequently transacted at a high of nearly $1,100 around 1982-83, but dipped down to $280 per square foot in 1986 during the recession. I do not know what is the current market value. But you can appreciate that during these cycles, many have made tremendous gains but many have also borne astronomical losses. I am sure, if not because of the recent buoyancy in the property market, the issue of purchase of private properties by Senior Minister and Deputy Prime Minister would be a non-issue.

I feel saddened having to witness two distinguished leaders, especially the Senior Minister, who has proven beyond any doubt his dedication, integrity and uprightness, having to so painfully explain to this House, involving even the privacy of all their family members, a perfectly normal undertaking because of the rumours and suggestions going around that they may have acted improperly. It is most unfortunate, especially in the context of the role they have played in making Singapore what it is today and that even the most cynic cannot deny that in some way they have benefitted by their immense contributions.

In a way, I am glad that this debate has given everyone the opportunity to have an insight into all the details of what has transpired and once and for all leave no doubt in anyone's mind that there is absolutely no impropriety on the part of the Senior Minister and the Deputy Prime Minister. But, more importantly, one positive outcome of the whole episode demonstrated once again the readiness of our Government to investigate any possible wrongdoing by any person, be they Ministers, elected Members or Government officials, so as to uphold the highest standard of integrity, incorruptibility and transparency. Ministers no less than the Senior Minister and the Deputy Prime Minister were subjected to the same rigorous scrutiny by the Prime Minister once public disquiet has arisen on this issue. It must be comforting to all Singaporeans to know that the Government of today upholds such high standards of governing and that it lives up to the reputation of being one of the most efficient, stable and clean Government in the world.

Dr Ow Chin Hock (Leng Kee): ( In Mandarin): Mr Speaker, Sir, the purpose of this debate on the issue of property purchases by Ministers is to let Senior Minister Lee and Deputy Prime Minister Lee state the circumstances under which they purchased the condominium units concerned, and for the Prime Minister to explain why he was satisfied that there had been no impropriety in the said purchases.

Before I make my observations, I would like to show the House an advertisement. I agree with SM. Many developers and car dealers would like to make use of the names of Ministers and MPs to advertise and promote their sales, canvass for business for their own benefit. In Singapore, this is done discreetly. But in other places, this is done openly. This advertisement is one of the examples. This is an advertisement published in a Taiwan magazine Common Wealth ( ). It was about a Tasi Villa. There is one sentence in the advertisement which reads "The Tasi Villa made President Lee's heart went pit-a-pat. Now at the age of 40, you can move in and be a neighbour of President Lee." In other words, you can buy a unit and be a neighbour of the President.

Sir, to me, the purchase of properties by SM Lee and DPM Lee is a non-issue. It is also proper for them to get discounts. This is a strategy of developers to sell their units. I feel there is no need for them to donate their discounts. According to my feedback results and the reactions from the grassroots organisations, there is no one who doubts SM Lee's and DPM Lee's honesty and integrity. I personally also feel that Ministers, MPs, judges and civil servants have every right to purchase properties. There is nothing illegal, improper or irrational for them to do so. These are their individual and family choices.

However, this very common transaction has attracted the attention of the public not just because it involves SM Lee and DPM Lee. But also there are two other inter-related factors. (1) Singaporeans' interest in owning and buying properties; and (2) influence of the politics of envy. In recent years, investment and speculation in property market have become very popular. Buying and selling properties is often a hot topic among citizens. With economic prosperity, increase in income and higher purchasing power, more and more people, particularly the yuppies, aspire to own private property. As such, these people are unhappy with this incident, not because of the discounts since they know that this is commonly practised by the developers as a strategy to test the market, but mainly because they feel that Ministers, MPs, civil servants, Judges, etc, are enjoying priority over them, thereby reducing and depriving their chances of purchasing certain choice properties. With the spiralling prices of private property, their unhappiness becomes more intense.

In addition, some people, intentionally or unintentionally, advocate the politics of envy, resulting in this property transaction issue being more emotionalised and politicised. Not only the yuppies, but even many middle and lower income residents of HDB flats are influenced by this kind of talk. They even link this property transaction with the "pay increases for Ministers and civil servants" and "Members of Parliament going into business". People with ulterior motive will surely make use of this matter to insinuate and stir up the emotion of the people, thereby creating an impression that members of the Establishment enjoy a lot of benefits because of their positions. This has led some to query the integrity and honesty of the Government. With regard to the "politics of envy", we need not be too concerned over it. Neither can we do anything about it. However, we must look at the people's confidence in the "integrity and honesty" of the Government very seriously. We must not allow our people's confidence in the Government to be shaken, nor can we allow some irresponsible arguments to swerve the focus of our people.

On 8th May, the Workers' Party called on the Government to appoint a Commission of Inquiry to look into all sales of property at discounted prices by listed company, Hotel Properties Ltd. I hope Mr Low Thia Khiang will state his and his Party's stand on the property purchases by SM Lee and DPM Lee, and make clear whether he and his Party consider there is any impropriety in the transaction. The next day, on 9th May, the SDP further widened the scope and called upon the Government to set up a public hearing committee to look into investment and spiralling property prices. It also urged the PAP Government to require all its Ministers and MPs to openly declare their incomes, investments and assets. The statement also pointed out that in Japan, Korea and Taiwan, all political candidates were required to openly declare their wealth.

Sir, Parliament is the place for discussion of national affairs. Members of Parliament are the elected representatives of the people. The three Opposition SDP Members can move motions in the House on the issues on investments and property prices for separate debates. But they should take this opportunity to query and cross-examine SM and DPM Lee to see whether there is any impropriety in their purchases and state their stand clearly.

Yesterday, Mr Chiam See Tong said that, "As the newspaper editor mentioned, there is no question of illegality, or improper behaviour by the two Ministers." He quoted the statement by a newspaper editor. But he did not state his stand. I would like him to state his own stand clearly whether the Ministers involved in this transaction have done anything wrong or improper.

Mr Cheo Chai Chen evaded the issue and said that he had no views on this matter. He would leave it to the people to judge for themselves. Does it mean that he does not have a stand, or no view on this matter?

Mr Ling How Doong has not opened his mouth up to this moment. I do not know whether he would speak on this matter. He is the Chairman of the SDP and he is the Leader of the Opposition. Singaporeans will be interested in his views and the SDP's stand on this issue.

The SDP had asked that Ministers, PAP MPs, and PAP candidates for the coming General Election be required to publicly declare their incomes and assets. Mr Cheo also suggested yesterday that Ministers must reveal their assets and incomes to Parliament and be gazetted in the Government Gazette annually. The motives and practical effects of SDP's and Mr Cheo's suggestion are doubtful.

Singapore is such a small nation. The incomes and properties of Ministers and MPs are no secret. Even taxi drivers know which Ministers stay in which houses. But is it really necessary for them to declare to the whole world, and make them the "talk of the town"? Also, we must weigh the pros and cons of such a suggestion. Singaporeans are increasingly concerned with their personal and family privacy, and they value their privacy. Therefore, requiring all the candidates to declare their incomes and assets may deter some talented people with good character and integrity from entering politics. This will be a great loss to the nation, and it does not benefit the people at all. Furthermore, such an exercise will not guarantee clean and uncorrupt politics. The countries and regions cited in SDP's statement, namely, Korea, Taiwan and Japan, where there are laws which require the candidates to declare their assets and wealth, have seen corruptions and scandals in their political arenas. One former Prime Minister of Japan and two former Presidents of Korea were convicted on charges of corruption and sentenced to imprisonment.

In Taiwan, its local magazine, Common Wealth, lamented that "black society and money power" was flowing all over the political arena in Taiwan ( ). On 19th May, the Lianhe Zaobao carried a survey report by Taiwan's China Times which revealed that the people in Taiwan wanted President Lee Teng Hui to treat the elimination of "black society and money politics" as first priority after his inauguration. These examples clearly show that the open declaration of the candidate's wealth will not help in ensuring clean politics, and in maintaining the integrity of the government.

For more than 30 years, one of SM's most important contributions to Singapore was the establishment of an honest and upright Government and civil service, and a society where nobody is granted any special privilege. As such, the positive and significant dimension of this incident is that Singaporeans are taking for granted that everything should be transparent and nobody shall be given any special privilege. This concept is already deep-rooted among the people. The Prime Minister has ordered an investigation into the matter. Even the Senior Minister and DPM Lee are subjected to and not exempted from scrutiny. Furthermore, the Senior Minister and DPM Lee initiated that this matter be debated in Parliament and for Members to raise their queries. Singaporeans should feel proud and honoured in having such political leaders and, more importantly, having such a system of honesty and integrity.

Yazhou Zhoukan ( ) in its 19th May issue featured an article entitled: "Housing Affairs to Test the Politicians" ( ) and lumped the property purchases by Senior Minister Lee and DPM Lee of Singapore, Lee Teng Hui of Taiwan and Anson Chan of Hong Kong. One particular paragraph deserves our special attention. I quote:

`Different people have different views on the ways the Governments and parties concerned handled the matter. However, the Government and politicians today have to give consideration to the feelings of the people, and know how to make their choices. The Lees, father and son, "mended the fold after losing a sheep" ( ). Their response was prompt, and they have decided to face a parliamentary inquiry on May 21, good enough to eliminate any doubt and suspicion of the people. The Director of the Tax Department in Hong Kong declined to state his stand on Anson Chan's tax evasion matter. The party concerned claimed that what she did was legitimate and reasonable. However, being the Chief Secretary and resorting to dubious shifts, she has attracted much criticism from the public and the media. She wins some, she loses some. Lee Teng Hui has yet to clarify his matter in accordance with judicial procedure. There are various versions to the matter. The official unit in charge has been keeping quiet, out of fear. It is therefore difficult to shut out the mouths of people who oppose him.'

This article implies that the Singapore Government is most open and frank in facing the people. Reading between the lines, the article seems more inclined to agree with the Singapore concerned parties' transparent, open and courageous way in facing reality.

As such, the main focus of this debate is not on the property transactions of SM and DPM Lee, but on how to re-affirm the system of integrity, honesty, transparency and no privilege, established by the PAP Government. Under such a system, the people have great confidence in the Government. This confidence is an intangible asset of Singapore. It not only propels our economic growth, ensures our political stability, enhances our international competitiveness, but also forms the basis for the continuous increase in our property prices. As such, this political system should be supported and defended by everyone throughout the nation. The change of political leadership has not affected the system. In fact, for more than 30 years, in order to maintain this system, the PAP had not only exercised great care and caution in selecting its candidates, but also required all MPs to declare their personal and family assets to the Prime Minister immediately after each General Election. Now, the Prime Minister is considering requiring all Ministers to clear with him before proceeding with any purchase of property.

SDP's request and Mr Cheo's suggestion that candidates openly declare their income and assets is neither necessary nor sufficient condition for keeping politics clean. (Those who know mathematics know this phrase -- necessary and sufficient conditions). Character and integrity of the candidates are not necessarily in direct or inverse proportion to their incomes and assets. If an outstanding billionaire banker with an impeccable character is to enter politics and to run the country, then it is indeed a blessing to the country! Similarly, a trade union leader who may not be wealthy, but has a noble character, dedication, and the ability to mix well with the people can also join politics and make contribution to his country. On the contrary, if a proletarian candidate whose personal integrity is found wanting, but through his glib tongue, deceit and sophistry ( ) happens to win a seat in Parliament, then it is certainly not a blessing to the country. In other words, income and assets are not the indicators of the quality of a candidate.

If the Opposition is really concerned about our nation's interest, the Opposition parties should do two things: First, critically assess the character of the candidates, exercise better quality control, and stipulate a code of conduct for their candidates. Secondly, and more importantly, they should take the long term national interest at heart, bury their differences and biases, and work with Singaporeans to cherish and defend this system of honesty and integrity which has been built up laboriously for more than three decades by the PAP Government. If they can do so, it will be a great blessing for our nation.

Mr R. Sinnakaruppan (Kampong Glam GRC): Mr Speaker, Sir, a few weeks ago, to be specific, on 2nd May 1996, the Prime Minister called a meeting of the PAP MPs. The meeting was possibly called at the request of Senior Minister and DPM Lee to explain the details of their property purchases at Scotts 28 and Nassim Jade.

As SM and DPM went on to narrate the details of their purchases very meticulously, I, together with other PAP MPs, felt very uncomfortable and very uneasy. Firstly, because SM was looking very pale and he was going to New York the next day for the second angioplasty operation. Secondly, because all of us felt that there was absolutely no need for Senior Minister or DPM to explain the circumstances of their property purchases which was a very private matter. We all have full confidence and full trust in our esteemed leaders and we felt very awkward about the whole matter.

I was personally emotionally upset to see the fatherly figure of our nation, the architect of Singapore's success, a man who has sacrificed his own betterment for that of Singapore, being put through such a situation, one that he or DPM Lee does not least deserve.

I was gravely concerned when it was pointed out at the meeting that the public disquiet on the matter was possibly steered largely by yuppies and young Singaporeans who in their earnest desire to own private properties had cast their green eye of envy over the purchase of two units by the Ministers in two different developments. I think that it is important to separate the two issues, ie, the Ministers' purchase of the properties and the desire of young Singaporeans to own a private property.

First, let me take the property purchases of SM and DPM Lee. We all know that DPM Lee and SM Lee had gone through difficult times in recent years. DPM Lee had to put up with a physical and mental battle with lymphoma and SM Lee had to receive two angioplasty treatments within a very short period of time.

Like all of us, they have their own families to think about and to take care of. So what is the problem when a father or grandfather buys two or more properties as an investment for them, their children or grandchildren. This is something that is most sensible and it is something that you or me would do for our siblings or kins. Even if they had been well, there is nothing wrong in buying properties for investment. They bought it with their own money and there is absolutely nothing wrong with that. So people, especially, young people, should not insinuate about buying more than one property.

Sir, I belong to a generation of young professionals in their 30s who have either paid very high prices for their properties or who have not been able to make that leap into owning private properties. So like many young professionals, I too feel the heat of having to pay hefty mortgage monthly payments. Yes, there is some frustration all round, but that is life. We did not choose to be born on a particular year. We had no choice. So we have to accept. But this frustration gives no reason for us as young Singaporeans to gripe and show our envy towards others, people of an earlier generation, because they have one or more than one private property.

Sir, yesterday, Mr Chiam talked about younger Singaporeans being unhappy because of the high salaries of Ministers. But let us not forget that young professionals are paid very well too. According to the Labour Force Survey 1994, only 42% of the Singapore's monthly wage bill went towards paying the rank and file workers who make up 67% of the workforce and the remaining 58% of the wage bill went to pay professionals, managerial, and technical people, who only make up 33% or one-third of the workforce. And Singapore's senior managers are commanding world class gross wages which are 11% higher than Paris, 50% higher than London and 66% higher than Sydney. So, let us not think that only Ministers are being paid well. Professionals too, especially our senior professionals. But of course, the younger professionals have to be a bit more patient to get there. But you will probably get there if you work hard. So let us not cast that green eye at others who are better off than us. And especially let us not gripe at how many properties Senior Minister Lee or DPM got or how much Minister's salary is. We have benefited tremendously from the system that Senior Minister and his generation of leaders have set up for Singapore. Mr Goh Chok Tong and his team are continuing the good work of their predecessors. Yesterday, Senior Minister said that his wife, Mrs Lee, was so uncomfortable about the whole issue that she felt that Singaporeans were ungrateful. I urge all young Singaporeans, please let us not be regarded as an ungrateful generation.

Sir, I think if young Singaporeans approach the issue and the arguments rationally, they would understand that there is nothing wrong with the purchases by the Ministers. Initially, they may not have gathered the details of the purchases and might have unnecessarily read between the lines and came to wrong conclusions, and hence the insinuations and innuendoes. Now that they are aware of the details after the debate yesterday, they must be reassured that nothing was amiss. Even the SDP and the Workers' Party who are never slow to challenge the Government, have so far made no accusations at Senior Minister or DPM Lee. They know that nothing was amiss. As such, they want to dwell on peripheral issues. The SDP made a press statement asking PAP candidates to declare their assets at the next general election and the Workers' Party wanted HPL to review its price policies. These issues have no direct linkage whatsoever to the matter at hand.

Sir, Senior Minister and DPM Lee have forthrightly decided to bring this matter here for public scrutiny. The Opposition MPs in this House must come up and speak on the issue and state their position and their Party's position clearly. Mr Cheo spoke yesterday, but he has not stated his position or his Party's position. Obviously, he has no position and he is not sitting in his position today. I hope he comes because the Leader of the House has said that speakers can speak more than once in this debate. So I hope Mr Ling, who is here, will convey this. I hope that Mr Ling, being the unofficial Leader of the Opposition, will state his position. I challenge him and Mr Cheo to come out and make their position clear, or forever hold their peace.

On the second point that is of concern to younger Singaporeans, I am happy to note that the Government has decided to curb property speculation by introducing tax, stamp duties and tighter loans on the purchase of private properties. I am also happy that the Executive Condominiums would cost nearly 10% less.

Mr Low Thia Khiang (Hougang): Mr Speaker, may I seek clarification from the Member?

Mr Speaker: Is the Member giving way?

Mr Sinnakaruppan: Yes.

Mr Low Thia Khiang: Sir, the Member mentioned that the Workers' Party's statement has called to look into HPL, and he says that the issues are peripheral and not directly related. If they are not directly related, why is there a need for the Senior Minister to meet the management of HPL and ask them to hold a press conference before 10.00 am yesterday? Would he explain that?

Mr Sinnakaruppan: Sir, I think the Member has missed the point completely. The issue here is whether there was anything amiss in the purchases by Senior Minister or DPM, and the Workers' Party has not come out with a position on this. They are looking at the peripheral issue of prices of property of HPL, which is not the issue here.

Sir, I would like to proceed. I am happy to note that the Executive Condominiums would cost nearly 10% less than advertised before. All these measures would help to remove the heat from the market and make private properties affordable for younger professionals. I had said during the last Budget debate that property prices are slipping further and further away from the reach of younger Singaporeans and had asked the Government to introduce measures to control the situation. I am happy to note the swift action of the Government and I am confident that these timely measures would be effective. But even with the curbs on speculation, not all young Singaporeans can afford to own private properties. Younger Singaporeans must be realistic and moderate their aspirations according to their attainable incomes. They must continue to work hard to achieve their realistic goals and aspirations.

Finally, I urge all Singaporeans, especially young Singaporeans, to put the issue of the purchases of the private properties by Senior Minister and DPM Lee behind them, and concentrate on more important matters, such as continuing to show their full support to the PAP Government to take Singapore into the 21st century.

Mr Leong Horn Kee (Thomson GRC): Mr Speaker, Sir, I wish to declare my interest as a director of a company actively involved in property development. Yesterday, we heard very thorough and clear explanations by the Senior Minister and DPM Lee Hsien Loong on the background and circumstances on their purchases of properties.

I would like to draw upon my experience as a property developer to substantiate the points raised regarding these property purchases.

Sir, there has been widespread misunderstanding over the discounts given for the purchases. As a director of one of the largest property development groups in Singapore, I can affirm that discount off the list prices is a standard market practice. We initially prepare a price list for all the units on sale. Then, we offer various discounts to reflect the actual market prices.

Allow me to quote examples of some recent residential projects: In West Bay Condominium, discounts were given ranging from 6% to 16%. In West Cove Condominium, 15% to 20%. In Seasons Park Condominium, 9% to 13%. These are projects that were all or almost sold.

Discounts given for the above projects are even higher than those given for Nassim Jade and Scotts 28.

From the above examples, the first conclusion that can be drawn is that list prices and discounts have no meaning. Discounts are mere marketing ploys of developers,. The discounted prices are the real market prices. Therefore, no special favours were accorded to the Senior Minister and DPM Lee when discounts were given to them. This is an industry practice.

From the industry's practitioner's point of view, my unreserved conclusion is that no impropriety has been committed by Senior Minister and DPM Lee. I believe this opinion is shared by my fellow industry colleagues. I also agree that since nothing wrong has been done, there is really no need to return the discounts to the Government.

The second conclusion is that discounts can vary between different units in the same development. Varying discounts are given to reflect differences in factors such as facing, level, unit size, unit configuration and collective purchases.

In the above examples that I have mentioned, there were between 4% and 10% differences between the lowest and the highest discount rates. Therefore, there should also be no misunderstanding as to why DPM Lee actually received 12%, whereas Senior Minister received 7% for their units at Nassim Jade. The key figure to focus on is, in fact, the net price per square foot. I note that DPM Lee's unit's net price per square foot is $1,568, which is only marginally 1% lower than the $1,583 per square foot paid by Senior Minister. This slight 1% lower price for DPM Lee's unit is, in fact, very understandable as it is larger and irregular in shape.

It is also a very common practice for developers to conduct soft launches before the official launches. The objective is to test the market. Developers normally invite staff, staff's relatives and friends, business associates and others who have indicated prior interest to select units at soft launches. This is a mechanism for us to eliminate the risks and test market reactions before the official launches. Moreover, it is a common practice to invite prominent persons, including politicians, professionals and media personalities, if they are interested, to soft launches to purchase units. This is a form of product endorsement.

Sir, the question is: should Ministers be allowed to invest in properties? My view is an unequivocal yes. We have heard some comments outside, which are also repeated by Mr Chiam See Tong yesterday, that since Ministers earn huge salaries, why should they be so greedy as to want to invest in properties. I feel that Ministers, like us, need to invest for the future, plan for their children and plan for their eventual retirement. Therefore, it is only fair that Ministers be allowed to invest in properties.

Yesterday, we heard Mr Cheo Chai Chen propose that Ministers should be allowed to own only one private property each. This is what I call "beggar thy neighbour" ideal. This type of unrealistic, communistic concept has long gone out of fashion. Our meritocratic system, with fair rewards for fair work, has worked better for us. Mr Cheo's other proposal that Ministers should seek Parliament's approval when they want to sell properties is even more impractical. Do we want to have a debate on every sale by a Minister? After all the debate, who should finally decide? Maybe the Speaker should.

I think the pertinent question really is: should Ministers participate in soft launches that are not open to the public? Some people feel that Ministers should not take advantage of having the inside track. This is actually a very difficult issue. A Minister may have a genuine desire to purchase a property at a particular project because of its proximity to his parents' home, or maybe to his children's schools, or other factors. Therefore, it is not fair to deprive them by saying a blanket "no". I think it is better to be more flexible.

The Prime Minister has said that he will devise rules on property purchases by Ministers, top civil servants and MPs. Whatever are the rules, developers must be careful that they should not offer special prices to Ministers. Of course, Ministers themselves must guard against receiving such favours.

In our small and closely-knit society, if there are any wrongdoings by Ministers to use their position to procure favours or any unfair advantage, rumours will quickly spread. This is more so for property purchases, where transactions are in public records, and property brokers and agents are fast to pick up the news and spread news of purchases by prominent persons.

I feel that the wider and more important issue is the integrity of our entire political and moral value system. While we are sad that Senior Minister and DPM Lee are subjecting themselves to such close public scrutiny; at the same time, I am actually gratified to see that the very system that the Senior Minister has created allows it to question the integrity of anyone, even such personages as Senior Minister himself and Deputy Prime Minister Lee. More commendable is that Senior Minister and DPM Lee have willingly subjected themselves to public inquiry by the MPs here.

We used to be extremely proud to quote instances when Ministers and civil servants refused to accept even a cup of coffee from contractors. The integrity of our system is intact, or has remained very much the same, although we have become a bit less rigid. But I believe Ministers and civil servants are still uneasy with having a free cup of coffee or a free meal.

The final verdict, I believe, Sir, is that Senior Minister and DPM Lee have established beyond doubt that they have not taken any advantage, whether knowingly or unknowingly. I note that the Opposition MPs have not asked questions on the purchases and have not said or hinted that they are improper. This speaks volumes for the stringency and strength of our political system.

Sir, I wish to conclude by urging the people to remove the emotional reactions to the above issues. The rational conclusion to the property purchases by Senior Minister and DPM Lee is that they are clearly above-board.

Assoc. Prof. Walter Woon (Nominated Member): Mr Speaker, Sir, as the Finance Minister said yesterday, the problem is really one of perception. Perhaps I have been mixing with the wrong crowd, but no one I have talked to thinks that either Senior Minister or the Deputy Prime Minister did anything wrong, morally or legally. For those of us who felt like this from the start, nothing that has been said in this House yesterday or today changes anything.

But the Prime Minister has told us that some people were disgruntled at what they perceive to be a lack of equity in the market. This is a feeling borne of envy and nurtured by frustration. In the last couple of years, the property market has gone crazy. The Germans have a very evocative word for such a phenomenon - Torschlusspanik - door-closing panic, the feeling that the door is closing, and if you do not grab something soon, the door will be shut, and you will get nothing. This panic is no doubt encouraged by developers who can then sell their properties at unheard of prices.

I do not believe that the crux of the problem is the Senior Minister or Deputy Prime Minister's property transactions per se. I am sure that most people would not begrudge the Senior Minister any discount, whether it is 5%, or 100%, because of who he is, and because of what he has done for the country. But there are some who are frustrated because they cannot afford private property. Someone wrote to me complaining that a graduate couple cannot be expected to live in an HDB flat. I think some other Members may have received that same letter. Where is it written that a graduate couple cannot live in an HDB flat? But it is people like this, I think, who resent the fact that others can afford private condominiums. They feel that the rich people, and amongst these will include top civil servants and Ministers, are spoiling the market for the rest.

There is no use pointing out to them that this is the way the market works, because this is not a logical problem, it is an emotional problem. Intellectually, I think people understand that prices will go up when affluence increases, but it is very hard for them to accept that they are not within that band of top earners that can afford private properties. So you have a problem, an emotional problem, that is very hard to get through. And this is why we have this debate today.

Those who are resentful over the high property prices and envious of those who can afford them will not be mollified by what the Senior Minister said yesterday. Indeed, I think his explanation of the realities of the market may very well serve to exacerbate their resentment. For this group, the debate in this House will also change nothing. So, what have we achieved in two days of debate?

To my mind, there are two positive effects of this episode. Firstly, it affirms that no one in Singapore is above the law - not the Senior Minister, not the Deputy Prime Minister. This is very important. Because there is a residual perception amongst some people that the influential will not be booked for their sins. It is crucial that this perception be banished completely. In any country with strong leadership, there is a danger of sycophancy. You have sometimes civil servants who try to please their masters. They are patted on the head by their master, they wag their tails. They imagine they hear their master's voice, they try and please him. I think it is very important to establish very clearly that the top leadership does not want sycophants in civil service. I think Mr Koh Beng Seng of MAS should be commended for his uprightness in pursuing this matter, despite the fact that the allegations involved figures like the Senior Minister and the Deputy Prime Minister. Every public servant, from Permanent Secretaries downwards, should be assured that the Government expects every allegation of impropriety to be investigated, no matter how influential the person is. And more than that, I think that those who demonstrate their conscientiousness in this matter should be publicly commended, so that there is no feeling that they are putting their careers at risk by bringing up something like this to the powers there be.

The second positive effect is it signals to the public at large that it is not necessary to curry favour with politicians and civil servants by giving them favours and discounts. It is not expected. An influential politician should not, as a matter of course, get special treatment.

Focusing on the question of discounts here, there are several reasons why developers give discounts. Senior Minister has explained one reason - because it is good for a businessman that his products should be associated with the successful and the famous. It reflects well on the product; it is good for business. But there are other reasons. Sometimes, it is goodwill, because they are grateful for what you have done for them, for what you have done for the country, and therefore they give you discount, or something tangible, as a good gesture of thanks. Sometimes it is good public relations to give discounts to people whom they think may be influential, so that you create positive impression, so that there will be recommendations to other people, creating a demand. Sometimes it is just pure sucking up, the desire to get into the good books of someone who may be potentially of help.

I do not think it is reasonable to expect politicians and civil servants to refuse all discounts. I speak as one who has never been offered even an extra fishball, much less attended a soft property launch. We should never solicit for such favours but it is expecting too much that they should have to give back the extra fishball. I think that is beyond reasonableness. It should be made clear that favours are not expected, that there would be no reciprocal back-scratching and that not giving favours to politicians and civil servants will not prejudice anyone in his dealings with the Government. As long as this is crystal clear to the public, I do not think we have to over-react by ruling that politicians and civil servants should never get discounts, should never attend soft launches, never be given special treatment, to declare all their assets. I think that would be an over-reaction to something that is not a problem.

Remember that a director of a property company has a fiduciary duty to his company to get the best price possible. If he makes the habit of giving discounts to his cronies, he will have to account for it to his shareholders. Unless he has got a jolly good reason for doing what he is doing, he would be in breach of his fiduciary duty. He can be prosecuted under section 157 of the Companies Act and we should weep no tears for him.

Sir, one final point, if I may. The Prime Minister has taken on himself the burden of clearing property purchases by Ministers. As long as the present Prime Minister is in office, I am comfortable with this. But we cannot speak for future Prime Ministers. In 10 years, 20 years, who will be the Prime Minister? Will he be beholden to some king-maker in Cabinet? To make a good system better, may I suggest, if this is not already done, that the President be kept informed, as a matter of course, of all these transactions, because we have an Elected President and it is part of his brief to keep check on the integrity of the civil service. Keep him informed. In that way, in future, if we have a less conscientious Prime Minister, we will have some assurance that there are no shenanigans.

The Prime Minister has also referred to the code of ethics that Ministers subscribe to. I think it would be helpful if this code were made public, so that we can see the high standards that are expected of those in high office.

Some people have commented to me that this debate is redundant. In a sense, it is. I do not think that most Singaporeans have considered that the Senior Minister or the Deputy Prime Minister has done anything wrong, even without this debate. But the debate is invaluable if it establishes two points. Firstly, you do not have to give favours to civil servants or politicians because it is not accepted. And, secondly, if there is any impropriety, no matter how high up, it could be rooted out, and will be stamped on. If it achieves these two aims, I think we will have spent our time very well.

Mr Davinder Singh (Toa Payoh GRC): Sir, I declare my interest as my firm acted for HPL in the sale of the units in Nassim Jade.

Sir, this episode has thrown up issues much larger than the question of property purchases. The questions that we are confronted with are:

(1) What are the implications for future commercial transactions entered into by Ministers?

(2) What do these events say about our system of government?

The speeches of Mr Cheo and Mr Chiam yesterday raised another issue. Mr Cheo argued that Ministers are under a duty to serve the people and not make money. Mr Chiam says that there is a perception that Ministers who purchase properties are not sacrificing.

These arguments are superficially attractive but are wholly untenable. Mr Cheo and Mr Chiam have either ignored or confused the principles which determine the duties and obligations of Ministers. Let me deal with this issue first, and I begin from first principles.

A Minister is a fiduciary or a trustee. He is very much like a director in a company whose standards of conduct have been clearly defined by the law.

Directors, as Mr Woon says, are fiduciaries for various reasons. First, they are custodians of assets belonging to others, secondly, trust is reposed in them by the people who have an interest in those assets, and thirdly, directors have the power and the ability to deal with these assets.

The law is very clear. Directors, trustees or anyone in a fiduciary position must act legally, honestly, bona fide in the interests of those whose assets they have custody of or power over. They must act for what they honestly believe to be in the corporate benefit. They must not place themselves in a position where their interests collide with the interests of those they are duty bound to protect.

Directors are accountable for their actions: to the board, to the shareholders, to the creditors, to the Exchange in the event it is a listed company. But the existence of these onerous duties and the fact of accountability does not, for one moment, disable a director from pursuing his private interests, where those interests do not conflict with the interests of the beneficiaries and where they are pursued legitimately and honestly.

Ministers are likewise fiduciaries because they control public assets worth billions of dollars. They have the power to devise or influence policies which can have a significant effect on the financial position of a great number of people. They are therefore duty bound to act lawfully, honestly and bona fide in the public interest.

Using the analogy of directors, Ministers must avoid conflicts of interests. Also, they cannot actively promote their own interests by using their status. This is a corollary of their duty to use their powers for the benefit of others, and not for themselves.

Ministers are guardians of the State and its assets. Their policies must be crafted with the object of advancing the public interest. Does it follow from this, whether it is a matter of principle or common sense, that Ministers should be required to refrain from acting in their own economic interests even when they can do so without compromising their fiduciary obligations?

Are we entitled to impose on Ministers a duty to act against what they honestly believe is their own and their family's interests in circumstances where there cannot, on any view, be a breach of their fiduciary obligations? There is absolutely no suggestion that, in this case, in purchasing the properties in question, SM or DPM Lee acted illegally or in a manner which compromised their fiduciary duties to the people.

Yet a concern has arisen because of what is obviously an unarticulated duty which some people perceive Ministers to be under: a duty which, I suggest, is manifestly unreasonable and unfair to impose on honourable men who have done nothing to impair their status as honest guardians of the State's assets and future, and who have done nothing to advance their own interests by using their office or position.

It is worth remembering that every member of the Cabinet and every senior public servant is likely to be a husband or wife, father or mother with family obligations. They have to look after the interests of their own families. There is absolutely no logic or sense in the argument that because they are the guardians of the people, they are bound, upon becoming Ministers, to relinquish their role as guardians of their children's future.

Let me cite an example: lawyers are trustees of their clients' money. Some of these clients are developers. Developers often invite their lawyers to soft launches of their developments, giving them discounts or preference in terms of selection of units, or both. Yet there is and has been no suggestion that the lawyer's standing as trustee or his ability to perform his duty as trustee is compromised because he accepts the invitation to select a unit.

Any uneasiness over a Minister's right to accept similar invitations is the result of a confusion between two distinct propositions, a confusion which regrettably Mr Cheo and Mr Chiam had fed in this House. There are two propositions. The first (which is true) that Ministers are trustees of our assets and hold positions of influence, and the second (which is untrue) that they should, while looking after the future of the people, not plan for their own children's future even when the integrity of their trusteeship is not compromised.

It is vital that these concepts are not confused because the upshot of the second proposition, taken to its logical conclusion, is that people who are honourable, honest, talented and have the ability to improve the wealth of the public should not and cannot honestly apply these skills and talents for the benefit of their families.

Indeed, this is what Mr Cheo and Mr Chiam appeared to be saying. Mr Cheo said that Ministers are under a duty to serve and not make money. The same point is made by Mr Chiam who argues that there is a perception that Ministers who purchase properties are not sacrificing. There is no excuse for either of them to obfuscate the issues.

Yes, a Minister has a duty to serve the country. But he has a parallel duty to his family. Where the two duties do not conflict, the Minister is fully entitled, indeed obliged as a good parent, to secure his children's future. So what if a Minister can influence policies? Yes, that makes him a trustee. Yes, he cannot use those policies to enrich himself. But why cannot he buy properties if he can do so without compromising his trusteeship where the policy under his responsibility is not involved?

Consider what it will mean for the future of this country if these confused arguments ever take root. Which one of the honest and highly intelligent, with these constraints, will aspire to public office?

The principle is the same whether or not money is involved. Take, for example, the case of education. Take the hypothetical case of a prestigious foreign university which has limited places but is inundated with applications by Singaporeans. The administration of the university chooses, for its own reasons, to make an offer to a limited group of people which includes, to the knowledge of the administration, the son or daughter of the Minister in charge of, say, Education.

Many other Singaporeans do not obtain places. But the Minister did not make any special request nor did he offer any favours. In the true sense of the word, the university has preferred the Minister's son and daughter because they were selected out of a larger group of people with the knowledge that he is the son or she is the daughter of the Minister. Is there any sense in the argument that the Minister should not take up the offer because other Singaporeans were not successful?

Should he be required to forego the opportunity offered his child even where it is indisputable that he has not breached his fiduciary obligations? Why should the Minister not give his son or daughter the opportunity of the best education? If we accept that it is perfectly legitimate for a Minister to plan for his family's future, then there is absolutely no distinction in principle between my hypothetical about education and the purchases of properties.

If the premise is that Ministers are entitled to enter into private arrangements which they have not solicited by using their position and which do not undermine their status as fiduciaries, the next question is whether the trusteeship of SM or DPM Lee was in this case in any way compromised. It is fundamental in the determination of this issue to understand the different and distinct roles and obligations of the parties involved.

In the case of a sale of an asset by a company, it is crucial to understand that it is the directors of the company who must determine whether any particular sale is in the corporate interests of the company and its shareholders. They alone are privy to their own deliberations and conclusions. They must justify the sale to their shareholders in accordance with the principle of corporate benefit.

Corporate benefit means many things: it can mean immediate monetary returns or it can mean a bargain which brings goodwill to the company and its product. Goodwill, broadly speaking, is anything which adds value, which in turn draws custom. Take the example of lawyers. Developers offer their units to their lawyers because if they take it up, goodwill is generated which in turn can be used to sell the product to a wider market and for a better price. It is thus a plus for a developer to be able to say that his lawyer, who acts for numerous developers, chose his development over others. There is a corporate benefit. But we must be very clear that this is an issue for the directors of the company. It is a vendor issue.

Purchasers are not obliged to determine whether directors have acted for the corporate benefit. Indeed they cannot. They are not privy to confidential corporate information. They are fully entitled to assume that the directors know what they are doing.

In the absence of manifestly suspicious conduct, purchasers do not have to concern themselves with how directors determine the price or the discount. So long as a Minister who purchases does not actively procure an offer or dispense any favours, he can and is fully entitled to accept the offer.

The upshot of the concerns that have been expressed is really this: that a Minister should not accept an offer which carries a discount. This is a flawed proposition: first, a purchaser has often no way of knowing if a discount is being given; secondly, even if he is told that he is being offered a discounted price, he has no way of knowing if it is a discount to the true market value or a gimmick which does nothing more than dress up the market value at the time.

Those who say that the Minister should make inquiries are really suggesting that Ministers should stand in a special category of purchasers who are required to conduct a kind of a due diligence on the pricing scheme of the developer. A due diligence is a process where the purchaser of, say, a company, goes behind the warranties that are given to him, goes into the corporate information, the books to open up everything, to verify for himself the accuracy of what he is told. Quite apart from the fact that Ministers do not have access to such confidential information, they have, with the greatest of respect, no business to pry into the internal affairs of companies.

In this case, HPL has decided to go public on its pricing and sales strategy. But that does not mean that vendors in other cases are happy, much less obliged, to disclose similar information. It is not public information, and a Minister, with all his powers, has no right to it just because he is a buyer.

The last and, in some ways, the most important issue in this debate is: what do the events leading up to this debate tell us about our political system? It has been said that we have an authoritarian government. The suggestion is that, despite the Constitution, the Government is, in truth, not accountable. It is a cosy arrangement. The PAP dominates the House. Ministers are not really called to account.

Are our critics right? There was nothing which required either SM or DPM Lee to come before the House and explain in the way they have. PM was satisfied that there was no impropriety. MPs did not table any questions on this issue. No one initiated an adjournment debate. In other words, the Parliamentary procedures which ensure accountability were not invoked. Yet SM and DPM Lee asked to have this debate. They knew that they would be scrutinised by the House, the public and the press.

This debate was not called because of any law which required it or because of any Constitutional requirement. SM and DPM Lee voluntarily chose to account for their acts for the reason that there is in Singapore a system of political morality which dictates that the conduct of Ministers must always be consistent, not only with the law, but with good conscience.

The concept of Ministerial responsibility in this country is not limited to answering for one's department or the legality of one's conduct. Our concept embraces accountability for the conscionability of one's conduct.

It is this morality, together with the willingness to be examined, that underpins the strength of our system. In the final analysis, the strength of a political structure should not be judged by the numerical majority of the ruling party or the frequency of amendments to the Constitution. It should be judged by the morality of the guardians of that Constitution.

Dr Tan Cheng Bock (Ayer Rajah): Mr Speaker, Sir, I sensed that both SM and DPM must be very hurt and astonished by the reactions. However, I wrote to SM and in spite of what has been said, I believe him, I believe DPM and I stand by them on this matter. I disagree with SM on some policy matters, but I never doubted his honesty and his integrity. That is why I stayed with him and the PAP. I have time and again similarly disagreed with DPM on issues. His manner has always been very direct. But as with his father, I never have cause to doubt the honesty and integrity of his actions. And the fact that SM and DPM wanted this issue to be debated in this House is testimony to their belief that this country must always be run by men of honour and integrity and no one, not even SM who has set the highest standards of personal behaviour for MPs and Ministers, will be above scrutiny. So also DPM, his son, will not be exempted from scrutiny.

Many Singaporeans were disappointed when they learned that SM and DPM took discounts for their purchases and were even more confounded when they gave away the discounts. It is easy to point fingers, but we must try to be more objective in our judgment and put aside the emotional element in this issue. From what SM. and DPM have said, I think no one can doubt that they have anything to hide. Their statements are one of frankness, openness, honest and even anxious efforts to clarify these purchases.

SM has bared himself concerning the most intimate dealings of his family. He has not spared members of his family from public scrutiny. Like many of us, he puts all his attention on his job and let his wife handle the details, once he has given his approval of the purchases. Again, like many of us, his respect and trust in his wife is quite absolute, for she has never let him down in the past. He was sure she will get fair market value. Therefore, these purchases, as you can see, were given very little of his personal attention, while he continued to focus full attention on his demanding job. He was not in direct contact with the sellers of the property.

I was told by my CCC Chairman that sometime ago when his brother sold SM a car, SM was adamant that he received no special favours and that the price offered must be what the other buyers were getting. My CCC Chairman's brother was very impressed by his no-nonsense deal. This is very illustrative of the acute sensitivity of SM's sense of integrity when he is personally involved in negotiating a purchase.

As for DPM, those who have worked with him will testify to the intensity of his devotion. Did he buy his second house for speculation, as insinuated by Mr Chiam? I do not think so. As a family man, when you are struck down by illness at a young age, what do you do? You worry about your wife, you worry about your children, and you must quickly make plans to cater for their future. And he did just that. To him, property is the best option requiring the least attention. Property is tied to the future of Singapore's well-being. And he has tied the family's future to the future of Singapore. I can sympathise with him on that.

I am glad that SM asked HPL to tell their side of the case, so that all facts can be clearly established. From HPL's account yesterday, it is clear that SM and DPM acted properly, perhaps too trustingly, in a matter they view as a simple transaction. Certainly not on the scale of the billions of dollars and matters of state which they handle in their respective portfolios, and for which they reserve their intense scrutinies.

I asked SM why he decided to return the so-called unsolicited gifts if there was no impropriety. His reply was what he told you yesterday, that he and DPM sought and was counselled by his friends and some colleagues that they should give back the discounts to the Government. With the benefit of hindsight, if SM and DPM had listened to Dr Tony Tan's argument and had stuck to the original stand and not give up the discounts which were in line with market practice, then this will have pre-empted Singaporeans from thinking that there was indeed some underhand deal. But deep down I felt different. To me, it was out of a very acute sense of honour that SM felt he must return anything that will taint his reputation. He has a very strong sense of pride and shame, as you have heard him in yesterday's debate. Over the years, we must have observed his acute sensitivities to matters concerning corruption and impropriety in government.

Yesterday's debate addressed two very important concerns: First, Government's role and private sector practices. This is tied up with the issue of invitation to soft launches to men of influence and men of means. The practice of soft launches, price list with differing discounts, selected launches of different phases of a development, these are tactics of marketing. There is no way that the Government can dictate the workings of the private market or legislate this private business market to level the playing field. Again, this was touched on by the Senior Minister yesterday.

Business thrives on free competition of ideas. Government can only advise, step in when things become excessive, as the Prime Minister has done. When the competition hots up, as in cars, houses or even hamburgers, who knows what new innovations the marketing man can come up with.

The second concern that was addressed yesterday was integrity and honesty of the Government. And from PM's statement, we can see that this was well addressed. Because as soon as the Prime Minister heard of the adverse effect, he went about quietly investigating, gathering the facts and ordered the investigation of the purchases. Finally, even putting the questions directly to SM and DPM. He exercised his powers and responsibility without fear and favour. This shows that the system of checks which are essential for a clean and honest government is able to respond to allegations against the highest officers. All transactional details are well documented by private and public sectors. There is no hidden or lost information. There is complete transparency. This augurs well for Singapore's future. The present and future leaders of the PAP are well prepared to uphold the strong traditions of honesty and forthrightness which the party absolutely demands.

SM is a pillar of our political stability and his reputation transcends Singapore. I feel we do ourselves a disservice if his reputation of incorruptibility and integrity is tarnished unjustifiably. All Singaporeans must make an unbiased fundamental decision in our hearts with regard to SM's integrity and DPM's integrity, for SM has been the standard bearer of clean government in Singapore since independence. We do well to take account of all the facts regarding these transactions.

The Deputy Prime Minister (BG Lee Hsien Loong): Mr Speaker, Sir, I believe that the concern about SM and my purchases at Nassim Jade and Scotts 28 arose partly because people have misunderstood what the discounts we received meant, particularly the 12% discount which I got in the case of Nassim Jade. Some people thought it was a special privilege which was somehow improperly gained. Yesterday, we made full statements explaining how these discounts came about, and why despite these discounts, we paid normal, fair market prices for the properties, in normal, proper commercial deals. We neither asked for nor have we received any favours from the developer, HPL.

The Workers' Party asked for a commission of inquiry into all the discounts given by HPL. It did not ask for a commission to inquire into purchases by the Senior Minister and by me. Neither has it suggested that either SM or I had done anything wrong. The Workers' Party, as you all know, is hardly slow to accuse us of wrongdoing, even when there is none. In other words, in this case, even the Opposition parties know that we did nothing wrong, but the Workers' Party lacks the political courage and the honesty to say so, unlike Mr Chiam who stated clearly yesterday "that there was no question of illegality or improper behaviour." I say Mr Chiam because we do not know what the SDP's position is. We will learn later. We did not learn yesterday from Mr Cheo.

The Senior Minister explained yesterday how he and I decided to treat the discounts as unsolicited gifts, and to give them to the Government. When the Prime Minister said the Government will not take it, we decided to give it to charity. I think it has caused some confusion. SM explained some of it yesterday. Let me explain for myself why, after listening to the pros and cons, I decided to give the money away.

It was not because I felt embarrassed about the so-called discounts. No developer or seller would do us a favour by selling us houses worth several million dollars at discounts below market levels, least of all in Singapore.

I give you examples. In 1986, when I remarried, my wife and I went house hunting. She came across a suitable property. I went to look. I agreed that it was suitable. Then she bargained, obtained the best price, agreed. Then the seller rang up and said, "I want to sell to you. I very much like to sell to Mr Lee, but I have found another buyer who is prepared to pay more and please will you match him so that I can sell it to you." We walked away. We had a budget. We had decided what we were going to spend and we stuck to it. What we did is no different from how many Singaporeans make decisions about major investments, whether they are upgrading HDB property, whether they are buying a new set of furniture.

Even for the house which we now live in behind Marco Polo Hotel, which we eventually bought, my wife bargained before we settled with the seller. I have no idea what discount I got on that house, unlike my mother who knows what discount she got on the old Mercedes. Because for this house, it is a landed property, every landed property is different and there is no standard "list price" to compare against. You ask for a quote, he gives you, you bargain, you knock it down. Finally, you either settle or you do not, and no deal.

For reference, my wife knew the advertised asking prices of various similar properties. She also checked with knowledgeable friends. So she bargained for the best price she could get -- this was 1986 -- and so did the seller. Because we were in a deep property slump, I got a good price. The whole development was unsold, a dozen or half a dozen units. I was the first one to buy. I suppose you would call me an early-bird at a soft launch. I got a good price - $11/2 million. In today's market, it looks like a tremendous bargain, but at the time, it was a perfectly fair price.

This time round, house hunting for three years since 1992, my wife got into serious bargaining once. The seller again said that he was very keen to sell to Mr Lee, and tried to persuade her that his final offer was a good price. She did not think so, and we did not buy.

But for Jade and Scotts, we were buying from a reputable developer. These were not completed properties being sold by individuals. So we assumed that the prices which we were offered were also the prices which would be offered to other buyers. We did not bargain. Because in this case, we felt that if we had bargained, it would have put us into a more awkward position. I suppose as the years pass, that is more and more likely to be my predicament.

In the case of Nassim Jade, as I said yesterday, our concern was that we might have been paying too much, because there was only one other development anywhere in Singapore where the resale market was asking for prices in that range. But because we had confidence that the developer would deliver the quality, we agreed to his asking prices.

The point is, as Davinder said, when buying a property, it is not my business to do due diligence on the developer's price. I do not assume that the vendor is doing me a favor. If he gives me a discount, that is for serious business considerations. It is not just one extra egg in the char kway tiao. It could be a straightforward, above board consideration, or it could be a crooked one, as SM said, "an investment in the young man." I have to decide at the time when I buy, whether it is a straight deal, or whether it smells off. If having made the decision, the matter comes out later, as it has done in the case of Jade and Scotts, then the facts and the circumstances will be unearthed. Many things will come to light, which I did not know at the time I bought, in order to determine whether I had in fact made the right decision. But either way, discounts or premiums are normal part of doing business.

So I was not at all embarrassed about keeping the so-called discounts, which in any case I had not asked for, and which in one case I was not conscious of, and in the other case, I was totally unaware of when my wife and I made our decision to buy. So why did I give it back?

When SM and I announced that we had bought properties from HPL and received the discounts from them, as PM said, our statement caused "quite a stir", I think he was making an understatement. Two days later, the PM called me. I had just come back from my meet-the-people session. He said he was concerned about the market place and coffeeshop talk. He was convinced himself that SM and I had done nothing wrong. But he was worried that it would be more difficult for me than for SM to weather this little rumpus, because SM had a much longer track record with Singaporeans. He told me that Richard Hu had suggested that if I gave back 5% of my 12% discount, maybe it would be helpful. He asked what I thought.

My immediate reaction over the phone was quite negative. I had not done anything wrong. Why should I give anything back? It would be misconstrued as an admission of guilt. The PM accepted that. He did not press the point. He was leaving it to me.

Then I discussed it with SM. He was also instinctively against it. But after that, I thought it over. I thought that perhaps there might be merit in making a gesture, to re-emphasise that I did not buy because of the discounts I was given, whether I knew them or did not know them. Although there was merit in making a gesture, I wanted to make sure that the gesture did not set a precedent that Ministers should not in future accept any discounts, however legitimate in buying properties, the precedent which Mr Chiam sought to draw yesterday. I knew that the PM intended to make rules for Ministers to clear their purchases with him beforehand, for future purchases. So I thought that one way would be for me to voluntarily subject myself to the PM's proposed new rules, and then to put the matter beyond doubt that if the PM has had to look at my purchases under the new rules, and decide whether to approve them, we give the discounts away. Then he looks at it as if we are buying without receiving any discount whatever, there is no reason for him to say, "This is a doubtful case. Disapprove." We did not want to presume on an ex post acceptance of a deal which was already done.

So I called the PM back and proposed this to him. He thought that it might be helpful. The next day he called the meeting, including Senior Minister, me, Tony Tan, Richard Hu, Wong Kan Seng and Teo Chee Hean, with the outcome which the Senior Minister has already described.

The reaction to our gesture was mixed, as we had expected. The Chinese educated, particularly, did not think it was helpful. Their reaction was like my wife's, when she first heard of it. My wife is English educated, but she comes from a Chinese educated family, and her values are those of the Chinese educated. That is part of the reason I married her. She was against the idea. She thought it would look like I was feeling guilty. Ow Chin Hock quoted the Chinese saying to me afterwards. He said: (ci di wu yin san bai liang). It is as if you put up a sign post in front of your house to say: in this place, I do not have buried 300 taels of gold. Why would you say that unless you put something away under the kitchen sink? So that is one reaction. Nevertheless, I still believe it was the right decision for me. I was making clear to Singaporeans that I did not seek the discounts. I was not conscious of them, and I did not need them.

It was a difficult decision. Not because the sum involved was large, in my case, about $600,000-plus, although it was large. It is not the end of the world. I can still take out a mortgage. I can ask my parents for more help. I am fortunate. Or I can sell one of my older properties to pay for what I am buying, something which in fact my wife and I had considered doing earlier when we were looking at properties. For me, the real issue here is not the money. It is what signal to give, what tone to set for the Government, for the country, for the future.

Mr Chiam believed that the fuss is because the sums involved in these properties seem so large and beyond comprehension to somebody earning $2,000 a month. Does he agree then with Mr Cheo Chai Chen that Ministers should not buy properties to invest in, and should only be allowed to own the single house which they live in, and come back to Parliament every time they want to sell? Is it wrong for Ministers to buy property in Singapore openly, using money which they have earned, and with help from my parents, in my case? It is a vote of confidence in our own Government and in the future of Singapore. It gives the Ministers a big stake in getting their policies right, so that their investments are protected for the long term.

I have houses here. I am rooted here. I make sure this place works. I buy, in 10 years' time or 20 years' time, it is far better than having shares in Microsoft or IBM, or General Motors. If I flip and churn the property market, and watch the property index, as it goes up, I sell, then knowing that some policy is coming, I get out, we will be in deep trouble. But if you buy for the long term to invest and hold, that is what companies do with their key executives when they give them stock options and shares, not just for remuneration, but to make sure that they tie their fortunes to the company they are working for, and which they ought to make it succeed.

Mr Chiam thinks there is something wrong in Ministers buying properties in Singapore. Surely, I would have thought it would be much more worrying if the Ministers did not have any properties in Singapore at all, and then took their savings and parked or hid their money in the Cayman Islands or the Bahamas, or numbered Swiss accounts, or they bought properties overseas. If this happened, what confidence could Singaporeans have in the commitment of the Ministers to Singapore? How can they be sure that in a crisis, the leaders will not be up and off in the next aeroplane with their families? What will happen to the 600,000 HDB households who bought flats in Singapore, instead of houses in Sydney or Vancouver, or chalets in Whistler Mountains in Canada? Would we really be better off?

I have been lucky in my choice of parents. Their most valuable gift to me is not the properties they have helped me to buy. It is the upbringing and the education they gave me, which has made me what I am. Because my mother was a successful lawyer, so in material terms, I have had an easier time than perhaps many other families. But what they have done is no different from what many other parents in Singapore do, planning, saving, sacrificing, guiding, all for the sake of the children, and finally taking pride in their progress and success as the children grow up and stand on their own.

I agree with Mr Chiam that money is not everything. There is honour and there is the ideal of public service. There is also integrity and individual dignity. You worry about your family, your country. That is what PAP politics in Singapore has been about, and what all politics in Singapore should be about.

Mr Chiam has shown that he has this honour and commitment. But he will agree with me that he has not found it easy to find similar people, of the same upright quality, to join his party. Witness Dr Chee Soon Juan. In July 1992, before the Marine Parade by-election, Mr Chiam promised that Singapore would be amazed at the quality of the slate. We were, and I think so was Mr Chiam. Mr Chiam must agree that the harm that Dr Chee did to him and to the SDP is nothing compared to the harm which Dr Chee would do Singapore, if one day, by some awful accident, he leads a motley gang of less than honest people like himself to win a majority in Parliament and form a coalition Government. Then I would support Mr Cheo's plan - one property per Minister is enough.

I believe Mr Chiam when he said that he cares for Singapore. But surely he is not the only one in this House. If we did not care, why should SM and I have brought our purchases of Nassim Jade and Scotts 28 out into the open? Why should we be spending time and energy to explain, discuss and debate this issue? Mr Chiam did not move a motion to debate this issue. He did not file a question to ask the Prime Minister for an explanation. Neither did Mr Ling How Doong, neither did Mr Low Thia Khiang. But the Prime Minister called this meeting, after the Senior Minister and I suggested it to him. It is not what you say, but what you do, which proves whether you really care for Singapore.

To continue to succeed, Singaporeans must have the commitment, the sense of mission, to disprove the odds and do what others believed impossible. It requires idealism, but it also requires a hard-headed, pragmatic approach to realities, both the realities in the world around us and also the realities of our own society, our strengths, our weaknesses. What sort of people can we get? What are their values? How can we make the system work, for example, by getting good men to be Ministers? Not by paying them market wages, but two-thirds of market wages. This combination has helped Singapore to succeed over the last 30 years. We need this same combination to move forward over the next 30 years, and not collapse back into a sleepy fishing village.

I would like to thank the MPs who have expressed their views. I am naturally grateful to the MPs who have expressed support for me. But the issue is not personal support for me, because I deserve to be supported only if I have done the right thing. The issue is to make the correct judgment on the facts of the case, and settle it in a way which strengthens our political system for the long run.

Mr Low Thia Khiang: Mr Speaker, Sir, may I seek clarification from the Deputy Prime Minister?

Mr Speaker: Yes.

Mr Low Thia Khiang: Sir, the Deputy Prime Minister said that he did not know whether there was any discount when he bought the property. But did the Deputy Prime Minister, by virtue of the fact that he is a Deputy Prime Minister, think or expect at that point of time when he was offered the price, that he probably would have got some discount from the developer? As the Senior Minister said yesterday, because they know you are Lee Hsien Loong and you are the Deputy Prime Minister. Did that sort of thought arise?

BG Lee Hsien Loong: I expected the developer to give me a proper price and I would decide whether I would accept the price. As I have explained, for Nassim Jade, I knew that there was 7% discount when he first offered me a unit. When he changed the unit, he quoted me a dollar price which I accepted. The discount was irrelevant. I worked it out later on. For Scotts 28, no discount was ever mentioned. There was no reason for me to ask. I expected him to look after his interest. I look after my own interest to get the deal at a fair price and without any hanky-panky.

Mr Low Thia Khiang: Further clarification, Sir. The Deputy Prime Minister mentioned about the return of the discounts to the Government. How did he weigh between the possible perception of the deal and against the discounts which he had issued a cheque and returned to the Government? How did he weigh that?

BG Lee Hsien Loong: I do not understand. How do I weigh the perception against the money? They are two different things. I have to judge what would be a reasonable thing to do in the circumstances. Firstly, preserving my position that this was a perfectly legitimate, open deal; secondly, to demonstrate and achieve a political objective, to show that we are not in this for small money; money was never part of the consideration. We took views - some said, yes; some said, no - we weighed them out, I decided. How do I decide? I did not have a pair of daching to weigh. You do it in your head.

Mr Chiam See Tong (Potong Pasir): First of all, may I clarify what DPM has said about Ministers buying houses. I am not at all against Ministers buying houses but I think there must be a proviso. I think DPM has mentioned it himself that if there is going to be a ruling with regard to Ministers buying houses, they should not buy them for speculation. I think that is important. If they buy it, as DPM has said, for long term investment, I think that is fair. The Ministers have got privileged information. There is no doubt about that. They cannot join in the crowd and try to make quick money out of purchase and sale of properties, especially in the hot market. If the DPM could tell us whether or not the Government is going to have this kind of a ruling amongst themselves, I will be very glad to hear that.

BG Lee Hsien Loong: Mr Speaker, Sir, I think we should keep our thought categories clear. If you buy and sell, and churn the market, that is speculation. It is not illegal. If you use ministerial privileged information , tomorrow I am going to impose a new package of property measures, today I sell Nassim Jade, then I am doing something greatly improper, and probably should go to jail. If I as a Minister spend my time trying to second-guess the property market and buy and sell and trade, and make money, it is not illegal, but I think I should lose my job too. Because it is not my job to go and make money on the property market. It is my job to look after my portfolios and my responsibilities as a Minister.

He asks whether it is wise, it is necessary for the rules to say that Ministers shall not speculate in the property market. There are many things Ministers should not do. This is one of them. There is no need to itemise all the foolishness in the world which Ministers should avoid. Many books will not be sufficient.

Mr Chiam See Tong: So that is the position amongst the Ministers that they shall not speculate in the property market. Well, I am glad to hear that.

I think the Deputy Prime Minister has also mentioned about me and other Opposition Members not asking the Prime Minister to explain the discounts given to the Senior Minister and the Deputy Prime Minister. I am not very sure whether it is our duty to do so. Because the onus of proof is on the Government. I think if the Government has kept quiet, it would be worse for them. But in this particular case, I do not think it is the duty of the Opposition to bring up these questions because the fingers are all pointing at the Senior Minister and DPM. I think the onus is on them to come out forthright and explain, which they have properly done. I do not think they should depend on the Opposition to help them out, or to bail them out on this matter. We do not feel at all guilty about not bringing up this matter in Parliament. If we did, probably we will be accused of trying to make aspersions and insinuations. I think we have taken the wise move and kept quiet about the whole thing.

Dr Tan Cheng Bock: Mr Speaker, Sir, I think Mr Chiam has made a fairly serious allegation. Hearing him, I would conclude that he has been thinking that some of our Ministers are in fact doing what he said, ie, speculating.

Mr Chiam See Tong: No.

Dr Tan Cheng Bock: That is exactly what I heard.

Mr Chiam See Tong: DPM has talked about me mentioning yesterday that Ministers should not buy properties or something to that effect. But my position is that Ministers should be allowed to buy property freely but with a proviso that they should not purchase property with a view to selling them and making a quick dollar.

So my view is that if Ministers want to buy property, as the Deputy Prime Minister said, they should be for long term investment. I think that should be the correct position.

BG Lee Hsien Loong: Mr Speaker, Sir, I thank Mr Chiam for his very clear clarification and I hope he and his party, and also the Workers' Party (WP), stick to that, at least beyond the general election.

As for Opposition duties, it is not for us to lay down in a book what Opposition Members should do and should not do. But I think Mr Chiam has been confused by our practice all these years where the PAP, whenever there has been a delicate, difficult issue, has on its own, and without waiting for any Opposition, brought the matter out, discussed and debated it, and therefore really marginalised and rendered them irrelevant. And as he says: what use is an Opposition? Well, I can only agree.

Mr Chiam See Tong: Can I have further clarification from the Deputy Prime Minister? This is with regard to the return of the discounts which he has received. All the time I thought that there was a Government ruling that if Ministers or MPs receive unsolicited gifts in relation to their position, they should return the unsolicited gifts to the Government, and it is for the Government to decide what to do with those gifts. I remember I attended one of the AIPO conferences and we were each given quite a beautiful batik shirt. And we all had to surrender the batik shirts to the Clerk of Parliament and then later on, he told me, "Mr Chiam, this batik is worth $12.", if I remember correctly, and we had to pay for it to get the batik shirt back. So in this particular case, all the time I thought that the return of the discounts was an unsolicited gift and it was in line with this practice.

But the point is that Ministers are well known in Singapore. Whatever they do, you cannot say that you are buying as an individual. The fact is that he is a Minister in Singapore, and as HPL's Managing Director has said, I think the words he used were "a big fish"; "illustrious", and something else. The fact is that he knows that he is a Minister coming to buy. So that is the reason why I say probably a precedent has been set and if, in future, Ministers purchase property, and they knowingly get an unsolicited discount, then it is their duty to surrender it to the Government, unless, of course, they are unaware at all that there was a discount. That is what I meant. All the time I have this impression that the discounts returned were an unsolicited gift. And as a Minister, you return it to the Government.

BG Lee Hsien Loong: Can I clarify Mr Chiam's position? This is very important. Because yesterday he said clearly that there was no question of illegality or improper behaviour in the two purchases SM and I made. So they were done deals. Full-stop. So he is now saying that from the very start, I should have given the discounts back to the Government.

Mr Chiam See Tong: When I read in the newspapers, I thought the reason that he returned it was because of this ruling. If it is not, then --

BG Lee Hsien Loong: Are you saying that I should have returned it in the first place, last year?

Mr Chiam See Tong: In my mind, there is no doubt that --

BG Lee Hsien Loong: So there was a question of illegality or improper behaviour?

Mr Chiam See Tong: These discounts should not be returned at all, I mean.

BG Lee Hsien Loong: I agree with Mr Chiam.

Mr Chiam See Tong: It is a matter of honour, as he says, that he has returned it, and I believe that.

BG Lee Hsien Loong: Can I clarify?

Mr Chiam See Tong: The point I am trying to clarify now, as I earlier thought, is that the reason why DPM and Senior Minister had returned this "unsolicited gift" - as the words were reported in the papers - was because of this ruling. If I am wrong, then --

BG Lee Hsien Loong: Can I explain? Mr Chiam has said and I repeat, for the record, that there was no reason whatsoever for me and the Senior Minister to return the discounts at all.

Mr Chiam See Tong: Of course.

BG Lee Hsien Loong: Okay, that is so. We decided to do it not because it was an unsolicited gift. But because we decided to treat it as an unsolicited gift and therefore give it to the Government. The Prime Minister said, "No. It is not an unsolicited gift. Period. There is no basis to accept it." He has returned it to us. We gave it to charity. I think that is clear. I do not know if Mr Chiam wants some clarification.

Mr Chiam See Tong: I think that is clear enough for me.

BG Lee Hsien Loong: Thank you.

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

Sitting accordingly suspended at 2.27 pm until 3.00 pm. Sitting resumed at 3.00 pm