WEST MALAYSIAN WORKERS' CENTRAL PROVIDENT FUND

Mr Seng Han Thong asked the Minister for Manpower (a) what exactly was the Malaysian Government's call on the return of West Malaysian workers' Central Provident Fund; (b) what is our official response to the call; and (c) if there is any official response, what are the conditions attached.

Dr Lee Boon Yang: Mr Speaker, Sir, several Malaysian leaders have made statements, questioning why Singapore chose to treat East and West Malaysians differently with regard to CPF withdrawal conditions.

There are reasons for the distinction between East and West Malaysians. West Malaysian CPF members are distinguished from other foreign CPF members because of the historical links between Peninsular Malaysia and Singapore. Geographic proximity enabled many West Malaysian workers to shuttle frequently between Peninsular Malaysia and Singapore. West Malaysians often returned to Singapore to work after a period of absence from Singapore. This was unlike other foreigners, including those from East Malaysia, who were fewer in number and seldom returned to work after they had left.

West Malaysian CPF members, in fact, are given preferential treatment over Singapore members. Apart from enjoying the privilege of tax-exemptions on their CPF savings, West Malaysians can withdraw their full CPF savings from age 50, without having to set aside the minimum sum, provided that they have not worked in Singapore for at least two years prior to the withdrawal request. Singaporeans can only withdraw their CPF at the age of 55, and after they have set aside the prevailing minimum sum.

Sir, CPF funds belong to individual account holders and not to governments. There is no question that the CPF savings of West Malaysians will always belong to the West Malaysians themselves. Only individual West Malaysians can withdraw their own CPF savings when they meet the age criteria. Their contributions were made in accordance with the prevailing rules and withdrawal conditions that have been in place since 1971. All workers in Singapore, including those from West Malaysia, were well aware of these rules upon assuming employment in Singapore. They are therefore bound by the withdrawal rules that they had accepted when they first came to work in Singapore. From 1st August 1995, all foreigners, including West Malaysians, were not required to contribute to CPF. However, West Malaysians who have savings accumulated before this date must continue to be subject to the prevailing withdrawal rules.

In January, Prime Minister Goh Chok Tong and Prime Minister Dr Mahathir Mohamad discussed a framework for wider cooperation between Singapore and Malaysia, including changes in CPF withdrawal criteria for West Malaysians. Although they have held further discussions since then, they have not yet reached an agreement on the framework for wider cooperation. Once an agreement is reached, this issue will be resolved.

Recently, the Malaysian Minister of Human Resources wrote to me to enquire on this matter. I have replied to the Malaysian Minister to explain that the matter should be left to the two Prime Ministers when they resume their discussions on bilateral cooperation.

Mr Seng Han Thong: Sir, did the Ministry receive any feedback from West Malaysian workers that they prefer to leave their savings with the CPF?

Dr Lee Boon Yang: While my Ministry did not receive such direct feedback, I understand that there had been calls made to the NTUC by West Malaysian workers who have expressed the sentiment that they prefer very much to leave their savings with the CPF than for it to be repatriated back.

Dr Toh See Kiat: Sir, I would like to ask the Minister what the Government's response would be to Malaysia's attempt to bring this matter to the International Labour Organisation (ILO).

Dr Lee Boon Yang: Mr Speaker, Sir, there is a Question for Written Answer on this subject. Nevertheless, if they do bring it up to the International Labour Organisation, we will respond accordingly, because we believe that there is really no basis for the ILO to adjudicate in such a bilateral issue. This is not within the charter of the ILO. 1.30 pm

Mr Speaker: Order. End of Question time.

[Pursuant to Standing Order No. 21(3), Written answers to Question Nos. 9-14, 16-18, 20-27 and 29 on the Order Paper are reproduced in the section, "Oral Answers to Questions Not Reached" (Cols. 953 - 972). Question Nos. 15, 19 and 28 have been postponed to the next sitting of Parliament.]