GOVERNMENT-OWNED AND GOVERNMENT-LINKED COMPANIES (Annual accounts of investments to Parliament)

Mr J. B. Jeyaretnam asked the Minister for Finance why there are no accounts made available to Parliament annually of all investments made by Government-owned and Government-linked companies.

Dr Richard Hu Tsu Tau: The Government is not required under existing legislation to present the accounts of the Government-owned and Government-linked companies to Parliament.

The Government-owned and Government-linked companies are set up under the Companies Act. Like all companies, they operate on a commercial basis, and have to respond and react quickly to changes in the business environment. It would therefore be difficult for these companies to operate if they were to be made accountable to Parliament for their every action. Like any other companies, they are subject to the same reporting and disclosure requirements under the Companies Act.

In addition, companies which are listed on the Stock Exchange are accountable to their shareholders for their performance and operations. They have to circulate their annual reports to their shareholders.

Strategic companies which are owned by the Government, such as Temasek Holdings and Government of Singapore Investment Corporation, are included in the Fifth Schedule of the Constitution. These companies are subject to the provisions of the Elected President in the use of their accumulated reserves. They are also required to submit yearly financial statements to the President.

The existing system is adequate in monitoring the investments and performance of the Government-owned and Government-linked companies, and we should not make it unnecessarily more onerous for them to operate as purely commercial entities.

Mr Jeyaretnam: May I ask the Minister how does this answer reconcile with his earlier answer on Micropolis about the accountability of Government-owned companies because they are dealing with public funds?

Dr Richard Hu Tsu Tau: I do not see the contradiction in it. These companies are commercial companies. They have their own reporting requirements. Just because they incur a loss, are we going to change their reporting relationships?

Mr Jeyaretnam: Does the Minister not realise that the taxpayers remain in the position of shareholders of these companies because it is their monies, and is there not a duty to report to Parliament?

Dr Richard Hu Tsu Tau: As I explained before, it is the overall returns which we should be concerned with, not individual companies. What is the objective of reporting just pure losses without taking into consideration the overall profitability of these companies? To make sure that they do not operate as companies at all? Should we just get rid of them? When you are running a business, I assume that Mr Jeyaretnam has never run a business, ---

Mr Jeyaretnam: No, I have not.

Dr Richard Hu Tsu Tau: Exactly. This is the problem. He does not really understand business and that is precisely why he asked the question.

Mr Jeyaretnam: But I am concerned with protecting the public's monies.

Dr Richard Hu Tsu Tau: Protecting the public's monies is the function of the Government, and the Government is adding to its reserves every year. That is the best way of protecting it, not the way that you are suggesting.

Dr Toh See Kiat (Aljunied): I would like to ask the Minister whether it is not true that some kind of reporting has already been made to the Public Accounts Committee of this House.

Dr Richard Hu Tsu Tau: Indeed, that is true.

Mr Jeyaretnam: He talks about overall reporting. Is there any overall reporting to Parliament?

Dr Richard Hu Tsu Tau: Government accounts are presented to Parliament every year. You are quite free to question it. The Budget is coming up. Why do you not do your homework and ask proper questions at the proper time?

Mr Jeyaretnam: Is the Minister saying that the accounts of these Government-owned companies are reflected in the Budget?

Dr Richard Hu Tsu Tau: The accounts of the companies are reported in their annual reports. Please read them.