CONSTITUTION OF THE REPUBLIC OF SINGAPORE (AMENDMENT NO. 2) BILL

Order for Second Reading read.

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Bill before the House deals with the amendment of the Constitution to delete POSBank from the Fifth Schedule to the Constitution. The Fifth Schedule lists six key statutory boards, which are MAS, BCCS, HDB, CPF Board, JTC and POSBank, and three Government-linked companies (GLCs) and these are GIC, MND Holdings and Temasek Holdings, whose past reserves are protected by the Constitution. These statutory boards and GLCs are required by the Constitution to ensure that their past reserves are not drawn down without the approval of the Elected President. POSBank is presently in the Fifth Schedule. With its privatisation and subsequent dissolution, POSBank will have to be deleted from the Fifth Schedule.

In keeping with the spirit of the Constitution, the Government will remove POSBank from the Fifth Schedule only after all of POSBank's assets have been transferred back to the Government and safeguarded in accordance with the requirements applicable to Fifth Schedule entities. The President has agreed to this arrangement. The transfer will be done in the followings steps:

(a) Two Bills have been tabled before Parliament, which are the Post Office Savings Bank of Singapore (Transfer of Undertakings and Dissolution) Bill and the Constitution of the Republic of Singapore (Amendment No. 2) Bill. Both Bills are to be read for the Second and Third time at today's Parliamentary sitting.

(b) Once the President has assented to the Bills, the Government will bring into force the Post Office Savings Bank of Singapore (Transfer of Undertakings and Dissolution) Act first, but not the Constitution (Amendment No. 2) Act.

(c) The Government will then set the date for the transfer of the undertakings of POSBank to DBS at 16th November 1998. This is the closing date for the transaction with DBS.

(d) POSBank will still be in the Fifth Schedule on this transfer date. As the Government and POSBank are satisfied that the transfer of POSBank's undertakings to DBS is at fair market value, and thus will not result in any drawdown on past reserves, the President's approval is not required for the transaction. Nevertheless, given the size and importance of this transaction, the Government has kept the President's Office fully informed of the details of the transaction. It has also informed the President's Office that it will treat all proceeds received from the sale of POSBank as the past reserves of the Government.

(e) On the transfer date, POSBank will receive new DBS shares as consideration for transferring its undertakings to DBS. It will also still have residual assets that have not been transferred to DBS.

(f) On or after the transfer date, all of POSBank residual assets and DBS shares will be transferred to the Government, in a manner consistent with the constitutional safeguards. I, as Minister for Finance, will give an undertaking to the President in accordance with Article 22B(9) of the Constitution to transfer assets, (including all the new DBS shares) which comprise POSBank's past reserves to the past reserves of the Government. These past reserves will comprise the new DBS shares, and part of POSBank's residual assets.

(g) POSBank's current reserves will also be returned to the Government. The Government will voluntarily treat these assets received from POSBank as past reserves of the Government.

(h) We expect to finalise the audit of POSBank's residual assets, seek approval from the President's Office for their transfer to the Government and effect the transfer by December 1998 or January 1999.

(i) This will leave POSBank as an empty shell.

(j) The Constitution (Amendment No.2) Act will then be brought into force through a Gazette Notification, thereby deleting POSBank from the Fifth Schedule. As a final step, a day will also be appointed under the Post Office Savings Bank of Singapore (Transfer of Undertakings and Dissolution) Act to dissolve POSBank.

Sir, I beg to move.

Mr Speaker: The Question is, "That the Bill be now read a Second time."

A Division will be taken to ascertain that the Second Reading of the Bill is supported by the votes of not less than two-thirds of the total number of elected Members of Parliament, which is 56 Members, pursuant to Article 5(2) of the Constitution. The Clerk will ring the Division Bells.

Question put, "That the Bill be now read a Second time."

Division taken: Ayes, 74; No, 1; Abstention, Nil. Ayes Ayes (cont) Abdullah Tarmugi Mah Bow Tan Ahmad Mohd Magad Neo, Lily Ang Mong Seng Ong Ah Heng Chan Soo Sen Ong Chit Chung Chay Wai Chuen Ong Kian Min Chen, Bernard Othman bin Haron Eusofe Chen, Peter Ow Chin Hock Chen Seow Phun, John Peh Chin Hua Chew Heng Ching Ravindran, R. Chin Tet Yung Seng Han Thong Chng Hee Kok Shanmugam, K. Chong, Charles Sidek bin Saniff Choo Wee Khiang Sin Boon Ann Goh Chee Wee Tan Boon Wan Goh Chok Tong Tan Cheng Bock Goh Choon Kang Tan Keng Yam, Tony Harun bin A. Ghani Tan Soo Khoon Hawazi Daipi Teo Chee Hean Heng Chiang Meng Teo Ho Pin Ho Peng Kee Toh See Kiat Ho Tat Kin Vasoo, S. Hu Tsu Tau, Richard Wan Soon Bee Ibrahim bin Othman Wong, Aline K. Inderjit Singh Wong Kan Seng Iswaran, S. Yaacob Ibrahim Jayakumar, S. Yao Chih, Matthias Ker Sin Tze Yap Giau Cheng, Eugene Koo Tsai Kee Yatiman Yusof Lim Boon Heng Yeo Cheow Tong Lim Chun Leng, Michael Yeo Guat Kwang Lim Hng Kiang Yeo, GeorgeYong-Boon Lim Hwee Hua Yu-Foo Yee Shoon Lim Swee Say Zainul Abidin Rasheed Lim T. E., David Lee Boon Yang No Lee Yock Suan Leong Horn Kee Chiam See Tong Lew Syn Pau Loh Meng See Abstention Low Seow Chay Low Thia Khiang Nil

Mr Speaker: The Second Reading of the Bill has been carried by the votes of not less than two-thirds of the total number of elected Members of Parliament.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau ].

Bill considered in Committee; reported without amendment.

Third Reading

Dr Richard Hu Tsu Tau: Sir, I beg to move, "That the Bill be now read a Third time."

Mr Speaker: The Question is, "That the Bill be now read a Third time."

A Division will be taken to ascertain that the Third Reading of the Bill is supported by the votes of not less than two-thirds of the total number of elected Members of Parliament, which is 56 Members, pursuant to Article 5(2) of the Constitution. Ring the Division Bells.

Question put, "That the Bill be now read a Third time."

Division taken: Ayes, 74; No, 1; Abstention, Nil. Ayes Ayes (cont) Abdullah Tarmugi Mah Bow Tan Ahmad Mohd Magad Neo, Lily Ang Mong Seng Ong Ah Heng Chan Soo Sen Ong Chit Chung Chay Wai Chuen Ong Kian Min Chen, Bernard Othman bin Haron Eusofe Chen, Peter Ow Chin Hock Chen Seow Phun, John Peh Chin Hua Chew Heng Ching Ravindran, R. Chin Tet Yung Seng Han Thong Chng Hee Kok Shanmugam, K. Chong, Charles Sidek bin Saniff Choo Wee Khiang Sin Boon Ann Goh Chee Wee Tan Boon Wan Goh Chok Tong Tan Cheng Bock Goh Choon Kang Tan Keng Yam, Tony Harun bin A. Ghani Tan Soo Khoon Hawazi Daipi Teo Chee Hean Heng Chiang Meng Teo Ho Pin Ho Peng Kee Toh See Kiat Ho Tat Kin Vasoo, S. Hu Tsu Tau, Richard Wan Soon Bee Ibrahim bin Othman Wong, Aline K. Inderjit Singh Wong Kan Seng Iswaran, S. Yaacob Ibrahim Jayakumar, S. Yao Chih, Matthias Ker Sin Tze Yap Giau Cheng, Eugene Koo Tsai Kee Yatiman Yusof Lee Boon Yang Yeo Cheow Tong Lee Yock Suan Yeo Guat Kwang Leong Horn Kee Yeo, GeorgeYong-Boon Lew Syn Pau Yu-Foo Yee Shoon Lim Boon Heng Zainul Abidin Rasheed Lim Chun Leng, Michael Lim Hng Kiang No Lim Hwee Hua Lim Swee Say Chiam See Tong Lim T. E., David Loh Meng See Abstention Low Seow Chay Low Thia Khiang Nil

Mr Speaker: The Third Reading of the Bill has been carried by the votes of not less than two-thirds of the total number of elected Members of Parliament.

Bill accordingly read a Third time and passed.

Mr Speaker: Order, I suspend the Sitting and will take the Chair again at 3.55 pm.

Sitting accordingly suspended at 3.28 pm until 3.55 pm. Sitting resumed at 3.55 pm