SINGAPORE TELECOM SHARES

Mr Cheo Chai Chen asked the Minister for Finance whether Government will help those citizens, especially the elderly, who have no CPF account, or insufficient funds in their accounts, or no children to top up the accounts to acquire the Singapore Telecom shares, and, if so, what are the Government's plans and whether such plans would include fully subsidising the cost of 300 shares.

Dr Richard Hu Tsu Tau: The second offer of Singapore Telecom shares (ST2) was a huge success. 1,530,000 people took up the offer, 120,000 more than the first time round. ST2 was part of the Government's Share Ownership Programme. The aim is to encourage Singaporeans to own shares in blue-chip Singapore companies, and thus take a direct stake in the growth and prosperity of Singapore. Share ownership also provides an additional means for Singaporeans to invest their savings and broaden their range of assets. To help Singaporeans take up the ST2 offer, the Government implemented a SOTUS scheme to top-up the CPF accounts of citizens. Furthermore, it sold the ST2 shares at a large discount to their market value. The Government also encouraged children of senior citizens to top up the CPF savings of their parents, so that their parents can afford to take part in ST2. These schemes enabled many older citizens to participate in ST2. 290,000 citizens aged 60 and above were offered ST2 shares. 60%, or 175,000, of these took up the offer, including 94,000 who topped up their CPF to buy the shares. 115,000 did not buy ST2 shares, of whom 98,000 did not have enough money in the CPF. Elderly Singaporeans enjoy several benefits and concessions which other Singaporeans do not enjoy. These include the Pre-Medisave Top-Up Scheme, tax exemption for annuity income under the CPF Minimum Sum Scheme, and special subsidy on outpatient polyclinic charges. As for the poor in Singapore, they can benefit from Government subsidy programmes which were specially set up for them such as the Public Assistance Scheme, Medifund, and the Rental and Utilities Assistance Scheme. ST2, like most of the asset enhancement programmes, was targeted at a broad group of Singaporeans, particularly those who wanted to invest their CPF savings in shares, but not necessarily at every citizen. Those who participated in ST2 had to make a co-payment, to show that they valued the scheme and prevent a handout mentality. ST2 alone could not cover 100% of the population. But taken together with the other asset enhancement schemes, like HDB home ownership, upgrading, or Medisave Top-Up, every citizen can expect to benefit in one way or another from the whole package of asset enhancement measures.