TOWN COUNCILS (AMENDMENT) BILL

[Mr Speaker in the Chair]

Debate resumed.

Mr Chng Hee Kok (Tampines GRC): Mr Speaker, Sir, I rise in support of the Bill, particularly in two areas. The first one is this Amendment Bill enables the Town Council to carry out agency work on land not belonging to the Town Council. I think this will help the Town Councils greatly to improve their services to residents of HDB estates. There are instances in which minor works such as grass-cutting, paving of muddy footpaths and even repair of drain covers and gratings, have to be carried out so as not to present a hazard to residents. I think this could not be done expeditiously under the present Act.

The second area I welcome is the proposed change in which 100% of the accumulated operating surplus of a Town Council will be transferred into the sinking fund after a general election if the elected MP is from a different political party. This change is equitable as it applies to both ruling party and opposition controlled Town Councils.

The most important outcome of this mandatory move is that it will prevent political opportunists from making election promises to win votes. The financial performance of every Town Council is publicly available. May I have your permission to distribute a table of some eight Town Councils showing the level of surpluses as at the fiscal year 1994/95. [Copies of table distributed to hon. Members.] Sir, on the high end, we see that Sembawang Town Council has some $14.8 million of surplus funds and Cheng San has $16.5 million. On the extreme, Potong Pasir, which is a single constituency, has $500,000. Therefore, prudent Town Councils have large surpluses and hence vulnerable during an election as all kinds of promises, including service and conservancy charges rebates, can be easily made.

Sir, what I fail to understand from the Amendment Bill is that 80% of the surpluses will still have to be transferred to the sinking fund should the elected MP come from the same party as the incumbent. I think, Sir, this is wholly unnecessary and I will like the Minister to give a fuller explanation, especially when certain commitments for expenditure have already been made by the incumbent just before an election.

Sir, another question I will like the Minister to clarify is that under clause 3(a), the declaration of a "Town" is mentioned as a result of a general election. But does this present Bill cover the effects of a by-election?

Sir, although I support the changes in the Amendment Bill, I feel that it has not gone far enough. As Town Council is becoming an important part of our national landscape, the elected MPs must be made accountable for its performance. This should not stop at cleaning and maintenance and development projects. It must also encompass how Town Council funds are being managed. Hence, the Act should be further amended to remove controls over the management and investment of Town Council funds. In this way, Singaporeans will realise that an elected MP can make an even greater difference to their lives. We must all understand that the mere casting of a vote can have national as well as local significance.

Mr Chew Heng Ching (Eunos GRC): Mr Speaker, Sir, I rise to support the Amendment Bill.

Sir, the amendments to section 19(2) of the Town Councils Act afford flexibility for Town Councils to cooperate and work with other authorities to provide better services to residents, thereby optimising efficiency and minimising cost. Work duplication has sometimes caused inconvenience to residents. Thus, with better coordination, grass-cutting, for example, by the Parks and Recreation Department could be done once so that residents would not have to bear with the noise and perhaps be hit by flying stones twice.

The new section 33A comes timely. It again shows the Government's foresight to ensure that money collected from residents will not be squandered by persons who happen to inherit the money. This Government once again shows its concern and commitment that residents' hard-earned money will be protected and will only be used for the benefit of residents. Looking back in time, residents will be happy that there will always be funds available to maintain their homes and amenities even if the economy were to really slow down.

Sir, it is also a challenge to the incoming Town Councillors to ensure that they will do just as well, if not better, than their predecessors or themselves in the last term. Without this luxury of inheriting accumulated surpluses, any mismanagement of funds will become immediately apparent to residents, like when a Town Council continually runs into cash-flow problems and is unable to pay its suppliers on time. It will be most absurd for anyone to suggest that this amendment is political because the challenge to perform will come afresh after each election and will apply to all without exception. It removes the cushioning and the spillover effect if accumulated surpluses are available and ensures accountability by each MP or group of MPs in charge of the Town Council.

Sir, whilst I support the principle behind the Amendment Bill and notwithstanding what I have said, I have two suggestions for the Minister. These two suggestions relate to the new section 33A of the Act which is the use of surplus funds. While it is acknowledged that this amendment in section 33A of the Bill serves a laudable purpose of safeguarding residents' money, will it not be more productive and prudent for the use of this surplus money to be channelled to some kind of safe investments like the purchase of premises for the Town Council's own office? Most Town Councils currently rent offices from the HDB. Perhaps, part of this surplus fund could be used by the Town Council to purchase premises for its own use. The Government can still have control here by stipulating guidelines on the use of these surpluses on investments in properties.

Sir, the other suggestion I have is that most Town Councils are able to implement a lot of improvement works, for example, construction of walkways, linkways, landscaping, residents' corner, study corner and the lot, through the use of operating surpluses accumulated over the years and, of course, with the help of CIPC. Because of this, most Town Councils, particularly Eunos/Pasir Ris Town Council, have developed a 5-year development plan to provide additional improvement facilities that will further enhance the ambience and environment of the town. Sir, with this amendment, 80% of these accumulated surpluses go to the sinking fund and this will affect the implementation of the ongoing 5-year development plan as less funds will be available to the Town Council. May I therefore ask the Minister if he will make an exception to a Town Council which has basically the same team of MPs from the same political party running the Town Council after the next general election, that is, allowing them to retain 100% of the accumulated surpluses to ensure continuity in the implementation of the 5-year development plan.

Sir, I offer these suggestions to the Minister for his comments.

Mr Low Thia Khiang: ( In Mandarin): Mr Speaker, Sir, this is another example of the PAP Government disregarding the wishes of the people. When the constituents vote in a Member of Parliament, they are also giving him the mandate to run the Town Council. Yet, the PAP Government is saying that the elected MP cannot be trusted. We must lock up the money!

There are three purposes to this Amendment Bill. First, it is to stop the Town Council run by an Opposition MP from making use of the accumulated surpluses to develop the town or to improve its facilities. The Bill provides that at least 80% of the accumulated surpluses must be transferred to the sinking fund after each election. This Amendment Bill, of course, will not have much effect on the PAP Town Councils because the PAP Town Councils can obtain 80% to 85% additional subsidy through the CIPC from the Ministry of National Development to improve the facilities in the town.

On the contrary, the Town Councils run by the Opposition parties are unable to obtain additional subsidies from the Ministry of National Development. They will also not be able to retain the total accumulated surpluses, even if the MP is re-elected, to improve and provide facilities such as covered walkways, recreational facilities, illuminated signboards, etc.

When Town Councils were first established, the PAP threatened voters in the 1988 General Election that if the voters were to cast their votes for the opposition and the elected opposition candidate was unable to manage the Town Council, there would be nobody to clear their garbage, and maintenance of flats would be a problem. But eight years later when the PAP discovered that the Opposition parties were able to manage the Town Councils and to make good use of the available resources, it makes use of the power vested in the Government to provide more funds to the Town Councils run by the PAP, to create the wrong impression that the PAP MPs are managing their Town Councils better than the Opposition MPs. Now it is going one step further by making it mandatory for the accumulated surpluses to be transferred to the sinking fund so as to restrain the Town Councils run by the Opposition parties, in order to attain the political objectives of the People's Action Party.

Secondly, the Amendment Bill restrains the power of the Town Councils, causing the Town Councils to take orders from the HDB when they want to enhance the facilities within the town. This Amendment Bill takes away the rights given to the Town Councils as provided for under section 19(a), (c) and (d) of the original Act. With this amendment, prior approval of the HDB shall be required when the Town Council wants to carry out any improvement to their facilities.

I recall that at the time when the PAP Government wanted to set up the Town Councils, the then Prime Minister said in the 1988 mass rally that the duty of the HDB was to build flats, and not to manage or to control the local government. But this Amendment Bill has put the Town Councils under the control of the HDB. Does it mean that with a change of the Prime Minister, the duties of HDB are also changed?

Thirdly, this Amendment Bill makes it impossible for the Town Councils to manage the towns effectively. For example, it provides that the Town Councils must provide, free of charge, facilities to agents appointed by the HDB and the Minister can prescribe that any person or community-based organisation can make use of common property under the management of the Town Council without having to pay any fees or charges In the beginning, the Government said that the concept of Town Councils was to allow the people to have a say in managing their own housing estates. But now, with this Amendment Bill, the system of Town Council will eventually become an effective tool for the PAP to use against the Opposition, and the Town Councils will be reduced to slaves of the Housing and Development Board.

Mr Lim Hng Kiang: Mr Speaker, Sir, let me first thank Mr Chng Hee Kok and Mr Chew Heng Ching for their support of the Amendment Bill.

Let me first reiterate what I said about the proposal to transfer the accumulated surpluses to the sinking fund. I do not want to conjure the picture of impending crisis in the sinking fund. But my Ministry has done a cash-flow analysis for the next five years, ie, the commitment that is needed by the Town Councils to do what is necessary for cyclical works and there will be a shortfall in the sinking funds. So we need to find some ways to top up the sinking funds.

At present, many Town Councils enjoy large accumulated surpluses primarily because of the grants being given by the Government to the operating funds. So the best way to top up the sinking fund is to transfer these surpluses to the sinking fund. The other way is of course to impose a higher percentage of S&C charges into the sinking fund. We raised this to between 30% and 40% in 1993. We can always raise this further but I think that would limit the flexibility of the Town Councils even further. So the whole idea of transferring the surpluses to the sinking fund is not political in nature. It is sound, prudent financial management. Because when the crunch comes and the Town Councils have to change the lifts or undertake major repairs and the sinking fund is not sufficient, the Government will not come in to bail out the Town Councils. The Town Councils will have to levy a one-time charge on the residents and that is something which I am sure all of us, as MPs, want to avoid. So this is a prudent change.

Why transfer 80% to the sinking fund if it is the same party, and not 100%? We recognise that if the MP from the same political party is re-elected, that political party should have some credit for its work done in the previous term. Therefore, we propose that 80% should be locked up and 20% should be carried over to the next term. In a typical 5-year term, 20% is equivalent to almost one year's surplus. So that gives the MP of the same political party a good start, whether it is the ruling party or the Opposition party. It gives him a reasonable start. In the new term, he gets 20% of his previous surpluses, which is one year's worth of surplus. Also, the amendment only locks up the accumulated surpluses as of the fiscal year before the writ of election. For example, if an election is called between now and April, ie, before the next fiscal year, in fact, he will be enjoying the surpluses of this current year plus 20% of his accumulated surpluses, which is one more year's worth of surpluses. So if he is re-elected from the same party, he goes into the next term with two years' worth of accumulated surpluses. I think that is enough to start him off on any improvement projects for his town.

I would also like to assure Members here that when we finalise the regulations for this amendment, we will recognise contractual obligations of each town for the various improvement projects that the town has embarked upon at the time the Act comes into effect. I am sure many of you have medium term plans of improving the towns and some of you have entered into contracts on some of these improvement projects. We will recognise these commitments and these will be taken out from the surpluses that have been locked up. So this will be implemented reasonably so that every Town Council will continue to be able to do the improvement projects that they have undertaken. When he goes into the next term, he will still have a reasonable start to do the various projects he wants in his town. But the primary objective of safeguarding as much of the accumulated surpluses in the sinking fund must be maintained. The commitments to cyclical works will be very heavy in the years to come and we want to set aside the funds for it

In response to Mr Chew Heng Ching, I will say that although the Ministry of National Development encourages every town to have a 5-year improvement programme so that we can work closely together to dovetail the development projects in the town, the priority for the Town Council remains the cyclical works and the sinking funds. Only when enough funds have been put aside in the sinking fund should we then undertake the improvement projects. So I think all of you should strive for the same priorities by making sure that sinking funds are catered for first so that our future requirements for cyclical works are met, and whatever is in surplus of that, we can undertake improvement projects.

Mr Chng Hee Kok asked about clause 3(a) and whether that would apply to a by-election. Clause 3(a) is intended as an addition to the existing sections in the principal Act whereby the Minister has the powers to allow recomposition of the Town Councils at any time, as we did when Nee Soon South decided to join up with Ang Mo Kio Town Council. So the Act already allows the Minister to recompose the Town Council and therefore whether it is in a by-election or any time during the term there is flexibility for us to reconstitute the Town. So the amendment here is to make a special provision for a general election. We would like the elected Members to constitute themselves in a Town Council within eight days so that we minimise the period in which parts of the estates are run by the previous Town Council.

I agree entirely with Mr Chng Hee Kok that over time the sinking fund will affect the resale value of HDB flats. I hope Singaporeans will become more sophisticated when they do a resale transaction and they not only look at the improvements within their flat and the estate around the flat, but they should also call for the annual report of the Town Councils to find out how much is in the surplus and how much is in the sinking fund. This is because if the sinking fund in the Town Council is not sufficient, when the time comes, you have to cough up the one-time contribution. So I agree with him entirely that the balances in the sinking fund would affect the resale value when Singaporeans become more sophisticated in their transactions.

Mr Low Thia Khiang made three points and argued that this amendment ignores the voters' view to give the MP the mandate to run the Town Council. This is not true. The Town Councils would still be run by the elected MPs in the way that they deem fit for the benefit of their residents. What we would like to do is to make sure that we do a medium term projection and make sure that every Town Council has enough sinking fund balances to pay for impending cyclical maintenance works. Beyond that, you can run your Town Council, you can do improvement projects and, as I have explained earlier, there is enough funds for you to do so. The Act will be implemented for both the ruling party and the opposition party. If anything else, more money would be locked up from the ruling party. If you look at the annual reports of the various Town Councils, the Town Councils run by the PAP MPs have accumulated significant surpluses, many of them ranging beyond $15 million and we are locking this up and putting it aside in the sinking fund.

The whole purpose is, in fact, to depoliticise some aspects of the Town Council operations. As Mr Chng Hee Kok pointed out, by locking this up, it would prevent candidates from offering all kinds of promises on the basis of the past surpluses. So it would not be possible, for example, in the run-up to the general election, for candidates from any party, to say, "Look, this XYZ Town Council has $15 million accumulated surpluses. If I am elected, I would do this, that or the other." If he is elected, he would have to demonstrate that he can do this, that or the other on his own merit, not on the $15 million accumulated by the previous management. So this will depoliticise the process and do away with empty promises.

Mr Low Thia Khiang asks why improvements to facilities need HDB's permission. This is a long standing principle. HDB is the landlord of HDB estates and any changes to the estate will require the landlord's endorsement. HDB does this fairly quickly. As long as it is within the prerogative of the Town Councils, you can be assured of the cooperation of HDB.

The other point that Mr Low made is: why is it necessary that some of the activities that the Town Council carries out no charges should be levied on HDB or agents appointed by HDB. These are some of the teething problems that we have in the past where HDB, as the landlord and developer, wants to go back to the town and undertake improvement projects. So we want to make it clear that the Town Councils have no authority to levy charges on HDB because the Town Councils are only managing the common property. They do not own the common property. The common property remains the property of HDB.

Mr Low Thia Khiang: Clarification, Sir. The Minister mentioned that there was a study done on the sinking fund projection. I want to know whether the Minister will agree to release the study to the public or to the Town Council concerned. We would like to look at it in detail.

In his reply, the Minister also mentioned that there is nothing different in the sense that Town Councils need to seek approval from the HDB for things that they do. But I wish to refer to the Act. Section 19(1)(a) says "establish and maintain places and facilities within the Town" whereas the amendment says "with the prior written consent of the Board establish and maintain places and facilities". This makes a lot of difference in terms of the power of the Town Council and the right to establish and maintain places and facilities.

The Minister also assures that the HDB would be cooperative. I am not very sure of that. I would like to know whether the HDB contractor would be considered as its agent. If it is, and the Town Council is not allowed to collect any payment or if the HDB were to exempt the contractor from payment to the Town Council, would it be fair to the Town Council if the contractor who occupies the common area uses water and electricity from the Town Council or even sometimes damages the common property, and the Town Council has to foot the bill? Is it fair to the Town Council by not allowing it to levy any charges or the HDB just exempts these contractors if they are its agents? The Bill also says that the Minister may xempt certain organisations from paying charges. What are these organisations that the Minister considers fit to be exempted and on what principle would these organisations be exempted from paying charges?

Mr Ling How Doong (Bukit Gombak): Some of the amendments are clearly politically motivated.

Mr Speaker: Mr Ling, are you rising to make a speech or are you seeking a clarification?

Mr Ling How Doong: I would want to speak on the amendment.

Mr Speaker: The debate has, in fact, been over already. You should have risen earlier. The Minister has already given his reply.

Mr Ling How Doong: I thought I could ---

Mr Speaker: But you were in the House.

Mr Ling How Doong: Yes, you moved on so fast and you asked the Minister to reply. In fact, I signalled that I wanted to speak.

Mr Speaker: I did not see you.

Mr Ling How Doong: I wanted to speak.

Mr Speaker: I am sorry. The debate has ended. You could have stood up. Do you want to seek any clarification?

Mr Ling How Doong: Yes.

Mr Speaker: All right, I will allow you to seek clarification, but not to make a speech. Get to the points immediately.

Mr Ling How Doong: I want to seek clarification in respect of clause 6 of the Bill. The amendment has now required the written consent of the Town Council in respect of improvement to existing facilities. I am wondering why there is the necessity to have this amendment. The second point is, why is there the necessity to have written consent from the HDB?

The third matter is, from my past experience in running a Town Council, when we apply for something, invariably there is delay. For example, when we applied to have a wishing well in a piece of vacant land in our Town Council, it was delayed for a long time and finally the answer came, "Permission is not granted because it is going to cause traffic jam". A wishing well can cause traffic jam! That was the answer from the HDB. Another example: we applied to construct a covered walkway. Similarly, the reply was, "We give you in principle approval." There has been no reply until now.

Another clarification that I would like to seek is in respect of exemption of charges for the use of Town Council land by the Board's agent or any agent or any civic body, which is all-embracing. As it is now, we have the State land there. In other words, the RCs and the CCs could mean the State land now. It appears that with this amendment, they could also make use of the Town Council land. The responsibility of running and maintaining the Town Council land is on the shoulder of the Town Council and the facilities would have to be extended to the agents of the HDB. It has such a wide coverage as to who are agents of the HDB. Could they ultimately lease out to other people to run the whole place and they are exempted from paying the Town Council any charges? After that, the Town Council has to keep the whole place clean. Is this fair?