ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1999 TO 31ST MARCH, 2000

Order read for consideration in Committee of Supply [5th Allotted Day].

[Mr Speaker in the Chair]

Head I -

The Chairman: Head I - Ministry of Communications. Amendment No. (1), Mr Chay.

Mr Chay Wai Chuen (Tanjong Pagar): Sir, I beg to move,

That the total sum to be allocated for Head I of the Main Estimates be reduced by $100.

Sir, the Government Parliamentary Committee has submitted the review of the Vehicle Quota System and we have made some specific recommendations with the terms of reference set by the Minister. I will not go into the details of this report which have been variously carried in the press.

One of the most impressive statements that I heard during all those hours of discussions and dialogues came from a freight forwarder. After all the feedback and complaints, as usual, during a 3-hour session, he stood up and confessed that in all his more than 30 years of the freighting business in Singapore, only today, in spite of so many vehicles on the road, can he really be confident to plan and execute a freight operation from one end of Singapore to the port, to time it such that there is a minimum of delay and time loss, and in the shortest possible time, in order for his goods to go up the container vessel berthed at the port just in time. He does this every day in his business. He attributed this to the VQS and the Government's forward looking systematic policies on land transport in Singapore. It is the power of technology and system and political will. This was the greatest compliment I heard for the Minister and his Ministry. Unfortunately, the Minister was not there, and it is not in the report.

The Report made several recommendations which I will just highlight in order to give other Members the chance to have a go at it. We recommended to retain the system, although we went into it with an open mind. We found large support for the retention of the system with the lowest successful bid approach as against the pay-as-you-bid approach. We recommended that the Government should consider raising the cap of 3% in view of the ERP system which can address usage costs more efficiently.

We also recommended the merging of Categories 1 and 2, and 3 and 4 into two classes, the line being drawn at the 1,600 cc. Ideally, we believe there should be one category of cars. We do not recommend loading the already complicated COE system with all kinds of social equity reasons and factors, so that the value, benefit and costs are transparent and clear to all. Of course, we cannot completely dismantle the present system, but the Minister should be clear of our direction.

By giving a bigger category size, ie, a larger number of COE quota with the merged category, we should find more competition, choice and a more stable outcome. In fact, too small a category size leads to a high possibility of an anomalous outcome. Merging the categories also gives wider choice of cars, and a more competitive environment for business benefiting the larger number of consumers.

We also recommended to even out the surge in COE in the year 2000 by distributing it over two years, namely, 2000 and 2001. For everyone who owns or successfully bids for a COE, the Government must also be able to justify to the larger population who use public transport and pay taxes, that the road infrastructures are put to good use and social benefits and costs must also be weighed against private benefits and costs. The Government must be fair overall and not just please or bow to one section of car dealers or population who may have their own preferences or legitimate interests.

We are for a more dynamic mechanism with a revised formula that collapses the time lag and allocates the distribution to reflect changing preferences of the car buying public, instead of being locked into a distribution function of COEs that reflect preferences 10 years ago.

We also made a recommendation for a trial out of an open-bid system in the open category. I will go into this a while. After all these recommendations, we ended with a prayer. We hope the dealers will provide a more transparent and arm's length, above-the-table engagement with customers, especially those who bid on their own. We do not believe all the unfavourable comments we have received on the dealers are justified, and we do not agree to the call to ban them from bidding. We believe they perform a service in the economy. The solution is to make the system more transparent and even out the information discrepancies arising from knowledge of market and experience in bidding or collusive power. Ten years ago, the technology and processes did not allow such a wide area open bid to be possible but today with information technology and computing power, electronic bidding goes on all over the world, every minute of the day.

There are many ways in which an auction can be conducted. It puzzles me how before the model is even specified or developed, a writer to the Straits Times yesterday can talk of the flaws of an open-bid system. Caricatures of it appeared in the press, like frenzied bidding for some rare art piece or the seventh moon or-kim. However, it will not be the first time an electronic real time open bid auction is done in Singapore. The pig auction in Singapore is done electronically on a real time open bid basis daily. It has been done so for more than 10 years. Do we find the prices of pork unduly higher because of some cornering of pork for market share or some frenzied consumption of pork over the last 10 years? The person responsible for developing this open bid real time electronic auction system for pigs more than 10 years ago is sitting very comfortably in the front bench as Minister and Government Whip. Of course, the technology was different but the fundamental concept is the same.

Naturally, rules apply for such bid processes. Hence, I am confident the study will come out with a model, which can overcome the many fears expressed. I wish to thank all for the feedback. No one can give you the outcome of a bid process, whether it is going to be high or low. If he can, it has been fixed. The COE allocation or bidding mechanism can only take care of the supply side. We should make it more stable and predictable, more transparent. The demand side depends on the buyers. It depends on rationality, information power, income, economic outlook, expectations and the value perceived by buyers.

The open-bid system gives a more transparent model with information to the buyers. The mandate to bid can also be given to a dealer but the mandate is transparent between the buyer and the dealer. This way the buyer knows exactly what the dealer is bidding on his behalf or whether it is within the mandate. Alternatively, the buyer bids on his own. In a close bid system, the information is not revealed.

There are many kinds of auction systems that are practised by businesses all over the world. For example, there is the one-sided auction, the two-sided auction, the Dutch auction and the English auction. However, unfortunately, what we are more familiar here is only the seventh moon auction.

The open bid model we are advocating that fits our system is the one-sided open competitive bid auction, with the lowest successful bid. It can be coupled with a Dutch auction where you bid down, or an English auction method where you bid up. I suggest we leave the details and the process to the study committee, which will come out with the proper model that can address the real nitty-gritty issues.

The field of experimental economics is full of such case studies. There is a wealth of literature to draw on.

All over the world today, consumers want to have the information and the power to choose and decide. Companies with hundreds of billions of dollars of sales are studying ways and means towards a more efficient consumer response using IT, with more rational processes. They are all re-evaluating and re-constructing their supply chain using IT for efficient processes. All over the world, electronic bids are done on the Internet, for example, E-bay dot.com. Business process will have to change to a more efficient way of doing things for the open world. The same goes for the bidding system.

Singaporeans deserve and should be given the information and the responsibility for their decision and action. The consumers will have an important say in this and will determine the outcome of the bid which will reflect the social market value.

The Chairman: Order. Your time is up, Mr Chay. Dr Toh. 12.45 pm

Dr Toh See Kiat (Aljunied): Sir, I sat on the VQS Review Committee as a member of the GPC for Communications. Unavoidable, of course, I brought in my experiences as a consumer advocate, being the President of the Consumers' Association of Singapore.

The VQS is not a consumer issue directly. It is a mechanism to allocate scarce resources. It is a mechanism whereby the Government decides that the growth of vehicles has got to be controlled, and this control mechanism means that the quota is fixed as to who will get cars from this quota. It is what the VQS is all about. In the process of buying a car which is, of course, a consumer issue, the consumer wants to be able to buy with a free choice. In other words, in an ideal system he should be able to get a COE and then go round to shop for his car. And if he leaves the COE with the dealer that does not satisfy his needs after maybe one, two bids, and one month or two months, he can take back the COE and go to another organisation that deals with a different car.

The problem that the consumer faces is that at this moment, he feels that the system is stacked too much against him, and too much for the dealer. For example, COE, even though it can be bidded in the name of an individual, IC number is given, but the c/o address is always the dealer's address. So the COE goes to the dealer and stays with him. And that means that the dealer has got quite a few COEs in his command. He can command and manipulate prices, and he can hold on to the COE, and tell the consumer, "Look, you go to another dealer, you are not going to get another car, because I have the COE."

Another situation is where the consumer says, "I will get the COE myself." And he brings this COE to the dealer, and the dealer says, "Hey, you got your own COE, I am not going to sell you a car." Or he says, "Yes, I will sell you the car, but I am not giving you my special offer prices." And this would mean that ultimately the consumer says, "I have no choice." You say I have a choice, but it is a Hobson's choice, it is not a real choice. So it would be good. And I think, having sat on the VQS Committee, argued all these points, I have come to the conclusion that actually, as many consumers do realise, the VQS is a good system and it should be kept. But I think we need to address some of these issues so that ultimately the consumer, for example, knows that he really has a choice. I personally feel, of course, that if you ban dealers from bidding, it is not an answer. Because then we will create actually a new class of professionals called car brokers, car dealers, COE brokers, who will then do what the dealers are doing. Because ultimately some consumers do not have the time, they do want to pay somebody to do it for them.

I would like to urge the Government when it considers the review of the open bidding system that we build in some measures to make sure that frenzied bidding, cornering of the market and this whole idea that consumers cannot bid because they have no information. all these will be taken care of, so that ultimately, even if there is a bid, the consumers know that it is a fair and level playing field.

As for suggestions like scaling and pay-as-you-bid system, I would ask the Government to even consider if these things can be worked into the open bidding system.

Mr Chew Heng Ching (East Coast): Sir, there has understandably been much concern and anticipation over the proposed changes to the COE and the Vehicle Quota System. In general, I am supportive of the recommendations made by the GPC Committee on revising the Vehicle Quota System. However, I have my reservations regarding the proposed open bidding system.

The present Vehicle Quota System is not perfect. We all know that. However, there are merits to the system, and it has served our purposes very well all these years. The present system of limiting vehicle growth through a quota system should stay. However, refinement or fine-tuning may be necessary. Changes towards more transparency, as recommended by the Committee, whilst beneficial may impact greatly upon existing users and consumers. Hence, I believe the Committee's recommendation of progressive change by trying out the open bidding system with only one category of vehicles at the moment is useful, as it allows consumers and participants in the car market to adjust progressively towards a new system, if it works. This also allows for refinement to the system should open bidding for the open category be subject to abuse and manipulation later on.

Sir, besides the principles of transparency and gradual change, I am pleased to note that the Committee is also recommending collapsing the two categories down to two broad ones. This is sensible in my mind, as congestion costs for vehicles are not directly correlated with the size of engine capacities for cars. There had been occasions in the past where due to affordability of the smaller capacity vehicle owners, COEs for these smaller categories were higher than those for larger categories. Consumers who have no choice but to purchase less powerful cars unfortunately end up paying more for their COEs, compared to consumers who are able to afford the larger cars.

I believe the proposal to streamline the categories into two will in part address this anomaly and flatten the spread across the categories, not to mention the freak result of a $50 COE. However, I would like to raise a matter of serious concern - the underlying assumptions of open bidding. Firstly, consumers are rational. We assume that they can make informed decisions that best reflect their self-interest. Secondly, the transparency of the system in itself would cancel out possible abuses since the free market competition will set the price. Sir, the failure of any or both of these conditions may disadvantage the majority of Singaporean car owners. It is inevitable that there would be asymmetry in information accessed by both the laymen and the specialists in the motor trade. If buyers are allowed to bid and withdraw at will, which may happen in an open bidding system, there could be manipulation of prices by concerted parties who may have an interest in maintaining vehicle price at a particular level.

Further, Sir, the kiasu mentality of Singaporeans could result in extensive tendering, leading to misallocation of resources. Since, in order to ensure that one gets the COE, it is more likely that competitive bidding may lead to higher prices, which may not necessarily reflect an efficient market pricing for this reason, as well as the potential manipulation of prices by interested parties. This is a matter of serious concern to many Singaporeans who have voiced objection to the open bidding system, considering the difficult economic period that we are all going through.

Therefore, Sir, I would strongly recommend that along with greater transparency and open bidding, we also try out the pay-as-you-bid system. This would ensure responsible bidding and it would not result in artificially raising the average price through the possible anomalies highlighted above, benefiting all users and consumers in the long run. With a combination of open bidding and pay-as-you-bid system, it is unlikely that the "winner's curse" situation, as argued by the Committee, would result, as consumers would be making bids responsibly based on up-to-date information, and can best reflect their own interest and demand.

Sir, neither system is without its merits and flaws. I would like to strongly recommend to the Minister that we use the proposed refinements of the categories to test the pay-as-you-bid system which has a lot of support from the public. For a start, we can continue with the status quo arrangement for the 1,600 cc and below category. We can also take up the Committee's recommendations for open bidding to be experimented with the Open Category. My proposal is that we use the same period in assessing the open bidding system for the Open Category to test the pay-as-you-bid system for the 1,600 cc and above category. This will ensure that we can have a gradual approach to change while evaluating all three systems together, in order to best decide once and for all which is the best system for us. Let us try out the three systems simultaneously among the three categories of vehicles and review them, perhaps, in a year's time, to decide which is an ideal system for us.

I hope the Minister will take up these suggestions.

Dr Tan Cheng Bock (Ayer Rajah): Sir, I was one of the members in this Committee. I rise to lend support to my Chairman. And I would like the House to know that we did deliberate very seriously on this matter. We invited so many groups of people to come, representing people of many varied interests, including the individual car owners. So I would say that we did a very thorough study on this matter. And I thought that at this juncture, after having heard Mr Chew Heng Ching mentioning the pay-as-you-bid system, maybe I would like to state our Committee's reasons why we did not accept the pay-as-you-bid proposal.

The Committee actually received several suggestions to replace the current single strike price system, with the pay-as-you-bid system, or its variations such as asking the top 10% or 20% successful bidders to pay their bid amounts. We have given these suggestions due consideration in the course of our review. The Committee is of the view that the pay-as-you-bid system is not superior to the current system. It has its own shortcomings. But some of the feedback received by the Committee had expressed the following concerns about the pay-as-you-bid system. There could be an additional source of discontent among the successful bidders as no one likes the idea of having to pay more for the same item. Only the ones paying the lowest premiums would be happy. Some laymen might have difficulties in deciding on the right price to bid, for fear that they might be penalised for bidding too high. This could lead to greater reliance on motor vehicle dealers.

The pay-as-you-bid system will cause confusion in the motor vehicle trade and vehicle financing industry. Some economists and academics have expressed the view that the pay-as-you-bid system could establish a stronger incentive for collusion among motor vehicle dealers to ensure that they bid close to the lowest successful price. The Committee also felt that it was not fair to always penalise the top 10% or 20% bidders, especially if their bids are close to the lowest strike price. Based on the statistics of past tender exercises, the Committee noted the trend that bids were converging towards the low as you bid. Generally, the successful bids clustered around the 20% to 30% above the lowest strike price.

Taking the above into consideration, the Committee decided that the current method based on the price of the lowest successful bid should be retained. I may not have given him the best answer he wants, but maybe later on in the course of the debate we could discuss further. But I do hope the Minister will really take into consideration all the proposals that we have made, and perhaps give them a try, especially the open bidding system for the open category. 1.00 pm

Mr Ong Kian Min (Pasir Ris): Sir, I read with great interest the Report of the Vehicle Quota System Review Committee and can appreciate the difficulties faced by the Committee as it tried to grapple with and balance the various conflicting issues about social equity, car categories, quota size and the myriad of factors that make the subject of vehicle ownership in Singapore such a talked-about and emotive one.

The Vehicle Quota System was introduced 10 years ago. For all its flaws and inadequacies, I believe the system is working reasonably well. Prices of COE have stabilised at a level that is appropriate in the light of the present state of our economy. This shows that buyers are rational and notwithstanding the initial fears, prices of COEs had not shot through the roof except for a brief period in the midst of a booming economy, rife speculation and material excesses. Over the last 12 months, prices have been moving within a band of between $20,000 and $40,000. There was resistance when prices hit the high 30s and when prices came down to the low 20s, buyers entered the market.

The Vehicle Quota System is maturing. We should give it some more time and let it stabilise further. At this stage, we should not make drastic changes merely for the change alone. As far as possible, we should not introduce any more uncertainties into the system. Uncertainties leading to wide fluctuations in prices are detrimental to dealers, owners, aspiring car buyers and the financial institutions which finance them. It can also be a source of discontent. How many of us have experienced situations where after we have bought an item, the price of that item dropped the very next month because of some changes in Government policy. A recent example is the prevailing quota premium which fell significantly as a result of the change in computation from a 12-month to a 3-month moving average. The converse is when we have not bought the item yet and the price shoots up because of a change in policy.

Sir, I would now like to touch on three of the Committee's observations which I have reservations about. They are (1) the distribution of COEs among the different categories, (2) merger of Categories 1 and 2, and (3) the proposed open tender system.

Regarding the first issue, in principle, I agree that vehicle quota should be distributed in such a way as to better reflect the latest preference of motorists. There must be a built-in mechanism to let the system respond in a timely manner to market trends and consumer demand. If the system is rigid and based on quotas fixed by the authorities from a top-down approach, drastic corrective action will have to be taken from time to time, like the one-time adjustment made in May 1994 when unused motorcycle COEs were redistributed to other categories. This is undesirable.

However, I do not agree with the Committee's suggestion for two half-yearly quotas and the distribution among the categories to be based on the proportion of vehicles registered in the respective categories in the preceding six-month period. How can the quota in any category change substantially over time when the number of new cars registered in that category has been fixed in the first place by the quota? For example, even if there is the demand for 5,000 Category 1 cars, but if the quota is only 2,000, then only 2,000 Category 1 cars can be registered subject only to those registered using Open Category COEs and perhaps those COEs from higher categories if this option is allowed in the future.

Perhaps the Government should study the feasibility of allowing COEs from any category to be used to register cars in another category subject to payment of the appropriate transfer fees and an additional levy. The additional levy should be equal to the positive difference between the quota premium paid for the COE and the corresponding quota premium for the category under which the car is eventually registered.

Second, quota categories. While I agree with the Committee that some segmentation of the total COE quota is necessary, I do not agree with its recommendation to merge the current Categories 1 and 2 together. Categories 3 and 4 could be merged into one. But for social equity reasons, I believe the current Category 1 should be retained. This category caters to those who would like to buy an inexpensive car or a small car. This gives the low-income group the opportunity to own a car. Furthermore, there is a trend towards smaller cars especially for getting from place to place in an urban environment like Singapore. To group them into one category would mean that a buyer of a 800 cc sub-compact has to compete and bid in the same category as buyers of four-door saloons. I think the gap is simply too wide.

I believe Option 3 as presented in the Committee's Report, where there would be three categories comprising lower, middle and upper, would result in a more equitable distribution of COEs.

In regard to the quota size, the undesirable effects of a small quota in the lower category can be mitigated by allowing COEs from the two bigger car categories to be used to register cars from the lower category but, if the premium for the lower category is higher, then an additional levy equal to the positive difference between the quota premium paid for the COE and the corresponding quota premium for the lower category should be paid.

On the third issue of the bidding mechanism, while a pay-as-you-bid system may lead to "winner's curse", there is a danger that an open bidding system will lead to the "don't-want-to-just-miss-it" syndrome, where bidders increase their bids by a bit more so as not to miss it. If bidders are aware of the current lower strike price, they will put in a slightly higher bid price, thereby driving up the strike price. On the other hand, under the present closed system, bidders have shown that they are rational and have placed bids at a level that is appropriate under prevailing market conditions. If he is not successful, the bidder has one whole month to cool down and rethink his next bid which may or may not be higher as market conditions could have changed significantly in the meantime.

Sir, in conclusion, I would say that the man-in-the-street is suspicious that the underlying purpose of the review and any consequential changes to the Vehicle Quota System is to increase Government revenue from COEs. This perception, if untrue, must be corrected. If the objective of the review is to fine-tune the system to prevent freak results, like the $50 COE, I hope we will only tinker with that aspect and not disturb the rest. Why burn the house down to kill the rat?

Mr S. Iswaran (West Coast): Sir, let me first start by complimenting the GPC for Communications for a thorough and comprehensive Report on the Vehicle Quota System. As one who is not intimately involved in the process, I would, however, like to raise some questions regarding the Committee's findings whilst I agree with the spirit and thrust of its general approach.

First, there is a general question that arises: what is the objective of this review? What prompted the initiation of this process? The COE system has been in existence for nearly a decade. Singaporeans, in general, have grown accustomed to the vagaries of the COE process and, at the same time, dare I say that they have even grown accustomed to the levels of the COE prices, although there may be some unusual occurrences from time to time. So the question is: why a review? Why now? And I think the more cynical have suggested that it might even be an effort by the Government to conserve revenue sparked by the freak $50 COE incident. I would urge the Minister to vigorously and comprehensively rebut such erroneous misconceptions and draw attention to the true and meaningful purpose of this review.

Secondly, Sir, perhaps we could understand better the objective of this review if the Government was able to share with us how it would gauge the success of any changes that are implemented. Would we measure the success of this new review and the recommendations by a lower variation in COE prices from month to month? Would we regard it as a success if more individuals participate directly in the bidding process bypassing middlemen? Certainly, for Singaporeans in general, it would be a success if COE prices were lower.

Thirdly, Sir, the recommendation on combining COE categories raises a question which my colleague, Mr Ong Kian Min, has also raised. What is the impact likely to be on the buyers of smaller cars at the lower end of the spectrum that is merged? Intuitively, it would suggest that the clearing price would be raised. There would be a drag effect upwards given that people tend to bid for COE prices in relation to the proportion of their car price. That being the case, the intuitive conclusion one comes to is that this would have a detrimental effect on those who buy smaller cars. I would like to hear from the Minister and the Ministry on evidence to the contrary in order to reassure buyers of smaller cars that this is not indeed the case.

Sir, on the open bidding system, I have great sympathy for the recommendation of the Committee. To me, trained in economics, I think any system that introduces a process where more information can be captured before a price is submitted should work to the advantage of all. However, given the vast interest in the process and the sensitivities of many parties involved, I fully endorse the recommendation of the Committee that this be tried out in a small measure first, its effectiveness evaluated thoroughly before the system is extended to all categories.

Finally, Sir, a question on the general issue of car population. A fundamental premise underlying our entire COE system is that our vehicle population will be increasing on an annual rate of about 3%. Given our finite space for roads and a limited capacity to increase the road space in Singapore, the question is: can this 3% be sustained in the long term and, if not, what plans are there from the Ministry to adjust this percentage?

Mr Goh Chee Wee (Boon Lay): Sir, the Vehicle Quota System Review Committee has completed its deliberations and has submitted its Report to the Minister. I am a member of the Committee and would urge the Minister to endorse the recommendations of the Committee.

Sir, after the release of the Review Committee's Report and in fact even before the release of the Report, there has been numerous public debate over the merits and the shortcomings of the current system. There was no lack of ideas of how the current system can be further refined and improved upon.

Members will recall that when the idea of the Vehicle Quota System was first mooted, there were outcries from some quarters that the scheme was ill conceived and it was designed to enrich the Government's coffer. Today, after the system has been in place for a number of years, it has proven to be effective in controlling our vehicle population. Bidding for COE has become a way of life for Singaporeans.

Sir, today, when the idea of a revision to the VQS is mooted, we heard comments like, since the present system has served us well, why change it. And true enough, many are apprehensive of the impact of any proposed changes.

Sir, I would say that what the VQS Review Committee has proposed is a refinement of the current system. It has not proposed a fundamental change in the vehicle demand management strategy. It has reaffirmed the principle of allocation of COEs, which is to allocate a scarce resource through a bidding process. While there were specific suggestions to fine-tune the quota formula and to merge some categories of vehicles under the quota system, what catches the attention of the public is the recommendation to review the allowable vehicle growth rate and to try out an open bidding system. To determine the allowable vehicle growth rate, the Government will have to be more precise in its projection of the expansion of the road network, the travelling pattern of the population and anticipated level of road congestions and other factors.

I say that we need a more accurate projection as we should not go off the mark like the way we project our population growth. We were told that we have a population of three million but all of a sudden, we were told that we are reaching four million soon. I wonder which Ministry is responsible for this unplanned and unanticipated fortune or misfortune. Similarly, for the open bidding system, the authority can make the system work by thinking through all possible pitfalls and devise a bidding mechanism which would minimise abuse and minimise anxiety among the bidders.

Many people think that the open bidding system is inflationary. It pushes up prices. The Review Committee has suggested that the Government try out an electronic on-line open bidding system in the Open Category before extending it to the entire VQS. I suggest that in trying out the open bidding system, the Government could introduce a number of measures to check the inflationary tendencies. For instance, the authority can limit the number of times a person can up his bids during the bidding process. This will prevent him from raising his bid to outdo others, and this point was raised by Mr Ong Kian Min. Another way is to increase the frequency of inviting bids. For instance, instead of calling for bids once a month, we can spread out the quota allocation and call for bids on a weekly basis. So, those who miss out this week can bid again next week. There will be no need to panic and rush to secure COEs at all costs and this will address the kiasu syndrome expressed by Mr Chew Heng Ching earlier on. 1.15 pm

In short, the authority must lay out clear rules and regulations and devise a fair and workable system. Only then can we assess more objectively the feasibility or otherwise of an open bidding system.

Mr Chairman: Mr Sin Boon Ann is not speaking. Dr Wang.

Dr Wang Kai Yuen (Bukit Timah): Sir, one of the features of the existing Vehicle Quota System is that there are four categories for cars. Based on the road space occupied and the congestion caused by cars, there is actually not much difference between a car of one size and a car of a different size. Why then did we have a system of four categories? Perhaps, we should take a moment to think about it. I believe that a lot of political wisdom has gone into that particular decision.

Basically, I believe the society as a whole finds it socially acceptable to isolate the small car owners from the stronger purchasing power of the buyers of the bigger cars. It is also socially acceptable for larger cars to pay for its COEs. So, if Ministry of Communications will do a survey, it will find that almost every Singaporean, including those who have to pay more, will grudgingly agree that it is a fair system, that it is fair for big car buyers to pay more. Fundamentally, I think without these four categories, perhaps it would have been very difficult for the public to accept the VQS as they did. I would like to remind the House that many Backbenchers in this House have asked, for instance, to create a separate motorcycle category and this is to segregate the big leisure motorcycles like Harley Davidson from the workhorse individuals use for transportation. Segregation of the weak from being over-run by the rich is the characteristic of a sense of social justice imbued in the typical Singaporean. Therefore, as such, we should not modify the VQS system without revisiting this very fundamental rationale.

Yes, the present VQS system has some weaknesses. It has shown up and reflected by the freak result of this $50 COE, but that freak result was a convergence of many factors, the economic recession being one of them. The VQS Review Committee's Report has pointed out that the current system allows for too large a fluctuation in the yearly COEs released for ballot. I can identify one other weakness, and that is, the Open Category, which, by and large, favours the big cars or luxury car buyers. Why do I say so? If you look at how the Open Category COEs were used, I believe the majority of them were used for the registration of big and luxury cars. So, in effect, the Open Category increases the number of COEs available for these car categories. To address some of these problems I have identified, my preferred proposal would be to merge all the car categories into one but with one condition, and that is, a strike price of the COE is meant for the registration of a small car. To use that COE to register a car of a larger size, a fixed premium for the different classes can be pre-determined. For instance, we could establish a premium of 40% more for the registration of medium-size cars, 60% more for a big car and 100% more for a luxury car. This will address the problem of the freak tender result that I alluded to earlier, and yet retain the segregation of different classes of car purchases that we have found to be so desirable.

The GPC Review Committee proposed two major changes on changing the open tender system to open bid system and merging the four categories into lower and upper categories. I understand the GPC actually carried out many sessions with many users and stakeholders in the transportation industry. So I think the recommendation does carry some weight. I have no major philosophical difficulty with the open bid system. The major reservation I have is with the merger of four different classes into two and in so doing, giving up the social need to segregate the buyers of the different categories, the same problem that my colleagues have alluded to earlier.

Hopefully, the Minister will take my point into consideration. I believe once we give up this fundamental principle to segregate buyers of different categories of cars, we have actually brushed off the political consideration that I have alluded to earlier. Once we have accepted this, in future, there is actually no reason why we should have two categories of lower and upper. In fact, we might very well end up with one altogether. I think it is important for me to reiterate this social equity factor and sometimes, it is this factor that separates a successful policy from one that fails.

Mr Ang Mong Seng (Bukit Gombak): (In Mandarin): Sir, it has been 10 years since the Vehicle Quota System (VQS) was first implemented in Singapore. During this period, the Ministry of Communications, through the Feedback Unit, grassroots organisations and various people, have collected feedback and suggestions on ways and means to improve the system, and has actually acted upon some of these suggestions to fine-tune our VQS.

I feel that the present VQS is quite sound and has effectively controlled the vehicle growth at an annual rate of 3%. The tender prices have been stabilised, and our people are already used to the system, and are familiar with the way it is operated. As such, if we want to make major changes again, people will have to start all over again to get used to it.

As we are now facing an economic recession, some people feel that if we adopt an open bidding system for COE, it would turn out to be like the bidding at the Seventh Month Festival bidding, where prices keep going higher and higher. They are very concerned with this possibility. I hope that the Minister will be cautious in studying the recommendation of the Committee to change the bidding system so that it would not cause too much inconvenience to the people.

I would like to give my suggestions on the bidding system. First, increase the transparency of the tender system. Some unsuccessful bidders suspect that the Ministry of Communications conducted the tendering procedure under cover and manipulated the bids to raise the strike price. They claim that transparency is lacking in our tender procedure. I would suggest that the Ministry post all available information and data on the Internet for all to see, so as to increase the transparency of the system and give potential bidders more information to rely on.

Secondly, under the present system, car owners have to either scrap their old cars when they reach 10 years of age, or to renew the COE. Now that we are facing an economic recession, car owners find it difficult either to buy a new car or renew the COE by paying the prevailing premium. It has become a great burden to them. I would suggest that the present 10-year period for COE be extended to 12 years or even longer. This will lighten the burden of existing car owners.

Thirdly, many people have suggested the pay-as-you-bid system (PAYB) in order to prevent the kiasu people from submitting unreasonably high bids. But the Committee feels that this may cause confusion among the finance institutions as the values of cars will be too diversified. I think, if possible, the PAYB could be pegged to the present system of lowest successful bid. In other words, taking "you pay as you bid" as the basic principle, and then tie it up with the principle of the lowest successful bid. For example, if A bids $22,000, B bids $50,000 and the strike price is $20,000, then both of them will pay $20,000 for the COE, and donate the difference between the bidded price and the strike price to charity. I feel that this will be in line with the PAYB principle, and at the same time, it can also achieve the objective of a uniform lowest successful bid. This will not cause any confusion to the second-hand car market or to the finance companies. It will also equitably reflect the market value of cars and at the same time, kiasu bidders will be forced to exercise more caution in submitting their bids.

Mr Chairman: Hon. Members will please note that Dr Michael Lim's name was inadvertently omitted from this list and also that of Mr Sin Boon Ann under item (b) of the Order Paper Supplement. I now call on Dr Michael Lim.

Dr Michael Lim Chun Leng (Cheng San): Sir, thank you for allowing me to join in the debate. A land transport policy affects the daily lives of most Singaporeans and hence it is not surprising that changes in land transport policies are watched closely by most Singaporeans. The report of the Vehicle Quota System Review Committee was released recently. I was also a member of the Committee. In view of the concerns that have been expressed on some of the changes, I would like to take this opportunity to further expand on the proposed open bidding system.

The Committee recommended an open bidding system but it was after a long debate within the Committee that we finally agreed to try the open bidding system in the Open Category. The reality is that although the open bidding system is more transparent and provides more information to bidders, the playing field is not level as motor dealers have an edge over ordinary Singaporeans.

In fact, if there was collusion, they could control the outcome of the bidding, having been given more information. They have the experience, the time to monitor the bids, a large number of COEs to have an effect on pricing and the ability to buffer COE prices with the profit from the sale of the car. For a motor dealer, it is better to have a sale with a lower profit margin than no sale and no profit.

The Committee had long debates on the merits and demerits of the open bidding system and there was genuine and real concern that if manipulation can occur to the detriment of the ordinary Singaporean, it would have defeated the aim of the exercise, which is to have a more transparent and level playing field for everyone.

Hence, I wish to take this opportunity to stress to the Minister that safeguards against manipulations must be implemented. Several possibilities were discussed but the only way we can prevent market manipulation is to have a formula to penalise those who manipulate the market by running up the COE prices.

Of course, the Ministry may argue that we must let the market determine the prices of the COE. This, I agree but with caveats. Unfortunately, despite the transparency, the odds are stacked against the ordinary Singaporean and therefore, the outcomes can still be manipulated. My fear is that if uncontrolled, the open bidding system can only lead to a running up of COE prices unnecessarily. The Government must consider some schemes to prevent this from happening.

Since the release of the Report, I have also given more thought to this and I have a suggestion. One suggestion which I would like to recommend is that for each quota category, let there be a two-tier scheme with a lowest successful bid for each tier. Hence, for example, the top 10% of the successful bidders will have to pay the price of the lowest successful bid among the top 10%, and the other 90% will pay the lowest successful bid. However, if there was no manipulation, it is likely that the bids will be within a narrow band. To avoid penalising bidders if the band is narrow, the system may incorporate a clause which can state that if the difference between the two lowest successful bids is not more than 10-20% of the lowest successful bid, then the entire category will only pay the lower of the two lowest successful bids. This scheme will penalise those who run up COE prices and yet will not penalise buyers if bidding is done within a narrow band. This will also reduce the likelihood that COE prices will run up. It will also dispel the misconception that the exercise is meant to increase Government revenue. 1.30 pm

Just now one of my colleagues, Mr Goh Chee Wee, has suggested that another way is to have frequent perhaps fortnightly, weekly or monthly COE bids. My only concern is if you do that, each time the category will be quite small, and we would have defeated the purpose of merging our categories, which was to have a greater COE pool. Because, as we discussed, if we have a very small COE pool in each category, then there is increased risk of manipulation.

The recommendations have been agreed and thought through carefully. Most of these measures can only be successful if the Ministry of Communications not only adopt the recommendations but devise and set up the necessary administrative safeguards to ensure that these recommendations can be implemented successfully. Ultimately, I believe that if the Ministry of Communications follows the recommendations and adds the necessary safeguards, the VQS will evolve into a fairer and better system for all Singaporeans.

The Minister for Communications (Mr Mah Bow Tan): Sir, first, I would like to thank all the speakers who have given very valuable inputs and suggestions on the VQS review. As Members will recall, we implemented the Vehicle Quota System almost nine years ago. That was in May 1990. At that time, the Government was faced with a dilemma of how to control the vehicle population. We had previously relied on vehicle taxes to do this. Before 1990, from 1975 onwards, the vehicle taxes like ARF, registration fees, customs duties and so on kept going up. Every time the vehicle population went up unduly high, you could be sure that in the next budget, the car taxes would go up. But in spite of all this, the vehicle population reached double digit growth of something like 12% per annum in the period 1982-1983. Three years prior to 1990, the net growth was almost 7%. Obviously, we could not carry on like this. We either had to keep on raising taxes and ARF drastically in order to bring the growth down, or we had to fix an acceptable growth rate, and let motorists decide how much they want to pay to own a car.

The Government decided to go for the latter option. We settled one key parameter of the transport equation, which was the vehicle population and, at the same time, we provided a more flexible and market driven solution to the perennial question of how much should we tax car ownership.

Sir, the VQS is quite unique to Singapore. We were the first to implement such a system and up to today, we are still the only country in the world to do so. Many people come to Singapore and study our system and they say, "Oh, what a wonderful system you have. This solves all our problems." But when they go back, nothing happens.

So, we had no other experience to rely on. We had to learn as we went along, as it were. Over the last nine years, there were many changes in the system. These changes took into account the views of the public as well as responded to the changing environment. Earlier on, we were pressed to make COEs non-transferable. From the economic point of view, Mr Iswaran will tell you that this is not the most ideal solution, because COEs as a commodity should, strictly speaking, be transferable, and there should be a market for it. But people felt that non-transferability was making COE prices go up too high. We made COEs non-transferable for cars and motorcycles. Of course, as expected, this brought about other consequential problems. We had to make the cars themselves non-transferable. When COEs could not be transferred, people decided that they would take the COE, register a car and then transfer the car. So we had to plug that loophole, and we did.

From time to time, there have been many other suggestions made to further modify the system. Pay-as-you-bid is a constant refrain. There have also been calls for the Government to prevent dealers from bidding.

With the introduction of the ERP, there have also been renewed calls to abolish the VQS, because with the ERP in place, why do we need the VQS? Although the VQS is working well and although the prices have been relatively stable over the last year or so, as many Members have pointed out, I decided that it was timely, after almost 10 years of operation, to take stock and to do a thorough, comprehensive review of the system.

Some of the suggestions that were put to the Ministry earlier, we had kept in view because we did not want to keep on making changes every year. But we decided that after 10 years, after watching the system and seeing what are the merits and demerits of the system, this was a sufficiently long time for us to sit back and take stock.

To answer Mr Iswaran, the objectives of the review were two-fold. One is to review whether the VQS is still needed in view of the ERP, and whether it is still effective in meeting our traffic management objectives. Two, if the VQS were to be retained, how can it be further improved in order to make the system fairer and more objective.

To undertake the review, my Ministry turned to the GPC for Communications for assistance. The GPC is well qualified to conduct the review because its Members are familiar with the current system. Moreover, they have recourse to a group of resource persons who would be able to provide expert views on the subject. Last but not least, I felt that it would be good to have a party other than the Ministry conduct the review, so that they can take a fresh look at the issue.

I am glad that the GPC has undertaken their task in earnest. I have been following their deliberations and I know that they have actively sought the views of various interested parties as well as members of the public. I understand that almost 100 written representations were received via fax, mail and the Internet. This is excluding the pile of feedback that the Ministry had earlier collected which we dutifully handed over to the GPC Review Committee. They also conducted three dialogue sessions with interest groups, with academics from NUS and NTU, with the Feedback Unit's transport group and also with the general members of the public. They spent a lot of time and effort in arriving at their recommendations, and I would like to place on record in this House my appreciation and thanks to the GPC, especially to its Chairman, Mr Chay Wai Chuen, and to the resource persons for undertaking this important task.

Sir, let me now give the Government's response to the recommendations of the GPC. First of all, on the VQS itself. My Ministry agrees with the GPC that the VQS should remain, as it is one of the key pillars of our traffic management strategy. I note that many other Members who have spoken today, Mr Ong Kian Min, Mr Ang Mong Seng, among others, also share this view.

The system has allowed us to effectively manage the growth of the vehicle population at a level that can be sustained by our road infrastructure and given the overall constraints of our limited land. I am gratified that almost all who gave feedback to the GPC agreed that the VQS should be retained, despite the introduction of the ERP. This is a significant vindication and reaffirmation of the system. As the Lianhe Zaobao editorial a few days ago put it, motorists both love and hate the system. They love the system because it works, and when they travel to other cities which are gridlocked, they really appreciate the quota system. But they are not so keen when it comes to paying for COEs. So this love-hate relationship, I think, is going to be a fact of life. But I am heartened because when we first implemented the quota system, I do not think there was any love in sight at all. If anything, it was a hate-hate relationship. Now, people are beginning to appreciate the benefits of the quota system and see the impact and recognise that it works. I think it shows that we are making progress. It demonstrates that Singaporeans do appreciate the need for Government to take tough but necessary measures from time to time to tackle intractable issues such as traffic congestion.

Sir, our land constraint, as many Members have heard me say many times in this House, means that the amount of space that we can devote to roads must be limited. The vehicle population grows at 3% per annum compounded, but our land is not growing at 3% per annum. In fact, between 1995 and 2000, we anticipate that our road network will only grow something like 1/2% per annum, in terms of lane kilometres. Already, 12% of our land is set aside for roads, the same amount of land set aside for roads as for housing, 12%. So there is not much room for us to build more roads. We can reclaim at the margins. We can build interchanges, flyovers, even underground roads, but our road capacity will expand at the most by something like 2%.

It is not possible to rely solely on the ERP to manage congestion. If we did so, ERP charges would be many times higher than what it is today. Therefore, maintaining a balance between ownership and usage management measures through VQS and ERP is the most prudent approach to manage our traffic. But the GPC feels that with the Government's ongoing improvements to the public transport system, expansion of road network, greater reliance on the ERP, the allowable vehicle growth rate, which is currently set at 3% per annum, could be reviewed upwards. This is a recommendation which has created some excitement.

Sir, the growth rate of 3% was set at the time when the VQS was first introduced, taking into account our long-term road-building programme, our public transport developments as well as developments in traffic management systems. To the extent that these factors have changed since the growth rate was set nine years ago, the GPC's recommendation to review the rate is accepted.

The LTA recently carried out such a study/review using its transportation model, and it simulated the impact of a 3% growth rate on the congestion levels of our roads, taking into account the various improvements in public transport, road network as well as the introduction of ERP last year. The study concluded that if the ERP coverage and rates are maintained at today's levels, the congestion level on our road network will worsen significantly over the next five years. However, if we were to implement a more extensive coverage of ERP and, if necessary, higher ERP charges, we can sustain this 3% growth rate, and manage the congestion at localised bottlenecks. To increase the growth rate further at this stage would be unwise.

The Government has therefore decided to maintain the 3% growth rate until the year 2005, because we take a 5-year planning horizon. We will review this growth rate regularly after that. If congestion eases following the expansion of ERP, the Government will release an additional 10,000 plus COEs. My Ministry will further assess the situation after we have implemented phase 2 of the ERP.

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Now I come to methods of COE allocation. The Government agrees with the GPC that the market mechanism is the most efficient means for allocation of COEs. COEs should rightly go to those who value the right to own the car the most. Competitive bidding is the best way to achieve this. It also ensures that the scarcity value of COEs accrues to Government and therefore to society as a whole rather than to each individual if we were to use other allocation methods, whether it is queuing, lucky draws, or whatever. How do we know whether the VQS system is efficient? Is it by allocation of COEs? Is it by COE prices? This is what Mr Iswaran wanted to know. Some other Members have mentioned that there is a view, among some people, that the changes are to maintain Government revenue from COEs by ensuring that freak results such as the $50 COE do not recur. Members have asked that we dispel the perception that these changes are to increase Government revenue.

Sir, I have said on a number of occasions that the VQS is an instrument to manage traffic. It is not a tax instrument. Although COE revenue has become a significant part of Government revenue, it is not a tax instrument per se.

COEs are a scarce commodity and they are a national resource, like land. Having decided that the best way to allocate this scarce resource is through the market mechanism, we must ensure therefore that the bidding system is an efficient one, which sets a fair price for the COEs. We should not over-price COEs but, on the other hand, neither should we accept a price which is below the fair market price of the COEs, because COEs belong to Singapore and Singaporeans ultimately.

Members will recall that the $50 COEs occurred in December 1997. Did that reflect the true value of COEs in that month? Obviously not. If that were the case, then that would have been the benchmark price for the next few months. But the next month, the price bounced back to its original level. If people knew that $50 would be the price for COEs in that category that month, I can bet my bottom dollar that everybody would be rushing to the nearest ATM to put in their bid. But this $50 COE did happen. It is a weakness of the system. This weakness is something that needs to be addressed. This is the reason why I set for the GPC the other objective of seeing whether the VQS can be improved to make it fairer and more objective.

Sir, let me now respond to the specific recommendations made by the GPC to improve the mechanics of the VQS system. First, the quota system. The existing quota formula is based on the number of vehicles deregistered in the previous year. The GPC has proposed to change the formula to base it on estimated deregistrations for the current year instead of the previous year. This will remove the one year lag between deregistration and recycling of replacement COEs. What this means effectively is that it will better match the supply with the demand of those who are scrapping their vehicles. This is a sensible suggestion. The Government accepts this recommendation and will implement the new quota formula for this quota year, beginning May 1999.

So the 1999 quota will be based on projected deregistration this year plus 3% growth of the vehicle population as at 31st December 1998. LTA will estimate the deregistrations for each year based on the trends of the last few years. If there is any discrepancy between estimate and actual, this will be accounted for in the following year.

Next, smoothening out the peaks in COE supply. The Government agrees in principle with the recommendation to smoothen out the surge in COE supply in the year 2000 and the troughs that would take place before and after. Major fluctuations in the year to year COE supply is likely to lead to instability in COE prices, if not matched by corresponding demand. The actual figures will be announced when the LTA determines the quota for the year 2000 and 2001.

Next, distribution among categories. The GPC recommended that the Government consider a more dynamic and responsive mechanism to distribute COEs to the different categories. The aim is a laudable one which is to reflect the changing preference of motorists for different kinds of vehicles. We agree that the current system is not flexible enough for this purpose, but some of the projections that we have made suggest that any such proposed mechanism will have a major impact on the vehicle mix. So my Ministry would like to study the implications of this proposed mechanism and other alternatives, if possible, to the current distribution method with the objective of making sure that it is more responsive. In the meantime, we will retain the current distribution method.

Merging of quota categories. I think this is a recommendation that has generated quite a lot of interest. The GPC recommended that the number of categories for cars be reduced to two while the commercial vehicles and motorcycles remain in their separate categories. Mr Ong Kian Min and Dr Wang Kai Yuen, among others, have expressed concern that this merger will result in the buyers of smaller cars in each category being squeezed out by the buyers of the larger cars. Both Members have also recommended in one form or another, some kind of a scaling factor so that big car owners will pay more than small car owners.

I think there is no question that when the COE system was first formulated there was this need to address some of the social equity considerations. But from the land transport point of view, it is also clear that there should only be one category of COEs from which all vehicle buyers will bid. The reason is very simple. As far as congestion is concerned, it is the same whether you have a large car or a small car, so the COE as a proxy for the cost of causing that congestion should be the same.

Having a single category will also provide maximum flexibility to cater to the changing preference for different types of vehicles. Having a large category, as Dr Wang pointed out, would also reduce price fluctuations. But there are compelling social and business considerations to suggest that we are not ready to implement a single quota category system. So the recommendation to keep, for example, commercial vehicles and motorcycles separate is an acceptable one. The reason is because they have different tax platforms from cars and they also cater to different groups of motorists.

With regard to Mr Ong's and Dr Wang's suggestion to introduce scaling factors, I think this suggestion was also considered by the GPC, but it was not accepted after the Government gave its view that the VQS is not intended to be a progressive tax measure. Progressivity is already built into the cost of owning a vehicle, especially into our motor car tax structure. For example, when you buy a big car, you pay a higher ARF and more customs duty because these two elements are based on the Open Market Value of the car. So we are already charging a wealth tax on the large car owners via the ARF and the customs duty mechanism. Furthermore, we charge higher road taxes when these cars are put on the road. So the Government feels that there is really no need for us to introduce another progressivity element into another aspect of the land transport tax structure or cost structure, which is in this case the COE. This is a deliberate decision that we have taken. Yes, I agree that people would not mind if Government were to say, "Okay, we are going to have a progressivity element into the COE structure as well." But is it necessary? After all, when we first mooted the COE system, we said that this is to tackle traffic congestion. Let us just leave it at that.

Yet, having said all that, it is true that a single car category will result in buyers of big cars squeezing out small cars. So as an interim measure, the Government accepts the GPC's recommendations to reduce the number of car categories from four to two. We merge Categories 1 and 2 together, and then we merge Categories 3 and 4 together. Buyers of small cars, by which I refer to Categories 1 and 2, will not have to compete with buyers of bigger cars, those in Categories 3 and 4. If you look at Categories 1 and 2, you will see that the quota premiums have in recent months started to converge. There is still a difference but the difference has come down very sharply. In fact, there was even one occasion when, as Mr Chew Heng Ching pointed out, Category 1 COEs were actually higher than Category 2 COEs. One of the reasons for this was because there was a mismatch of supply and demand, and the supply of Category 1 COEs is very small every month. In that particular month, when there was a surge of buyers for very small cars, Category 1 COEs went up sharply. Having a larger category for small cars, whether it is below 1,000 cc or between 1,000 cc and 1,600 cc, will help to moderate upward pressure on the COE price for the small cars. For Categories 3 and 4, I think it is much less controversial because the two COE premiums are generally similar and so the merging of these two categories makes sense.

Next, I come to the Open Category. The Government agrees with the GPC that the Open Category should be retained. This mechanism of the Open Category was implemented when we segmented all the car categories into various compartments. Ideally, as I said earlier, they should all be one. But because of various considerations, we split them up into six. The COE Open Category is a mechanism to cater for changes in the market place. If there is a change in demand for different types of vehicles, the Open Category can cater for this because it can be used to register any type of vehicle.

As several Members have pointed out, including Dr Wang, the Open Category COEs have been used mainly for the bigger cars. But this has not always been the case. In fact, in recent months, and last year especially, about 40% of Open Category COEs were used to register smaller cars. And in the past, these COEs had also been used to register commercial vehicles. So it is not clear cut. It is not preordained that Open Category COEs are used for the larger cars. Things do change as the market changes. In conjunction with the review of the quota distribution mechanism, my Ministry will review the proportion of COEs to be allocated to the Open Category. At the moment, it is 25%. We will continue with the 25%, but in the review, we will see whether this figure should be changed. 2.00 pm

Sir, taking all these factors into account, the GPC report, the Government's response, and based on this new quota formula, I would like to announce that the total number of COEs available for the next quota year from 1st May 1999 to 30th April 2000 is 68,191. This quota is about 42% higher than the quota for 1998. As there is unlikely to be much change in the month-to-month quota, there is no need to announce the quota every six months, as the GPC suggested in its report. Details of the distribution will be announced by LTA shortly. I just want to further add that with the merger of the car COEs, the five categories of COEs will be renamed Categories A to E.

Sir, if we had used the existing formula, the COE quota for this year would have been slightly over 70,000. This is about 4% higher than the quota based on the new formula that we are going to use. In its report, the GPC had suggested that we do a one-time adjustment, that means, we add the difference to the quota to make up this difference. I have considered this. But since this year's quota is already significantly higher than the 1998 quota, I have decided not to make this adjustment. We will monitor the situation and, if necessary, inject additional COEs after the implementation of the ERP Phase 2 later this year.

I come now to the auction method, again another relatively controversial subject.

The current system used is the lowest successful bid (LSB) method. The GPC recommended that this method be retained but also recommended that an open bidding system be considered to give more responsive information and greater transparency. And it recommended that we try this out in the Open Category. As Members are aware, there are many, many different auction systems in the world and in Singapore. Some are used to auction hogs, some are used to auction cars, some flowers, others stocks and shares, which is a very common example. Each of these systems has its strength and weakness. So we need to look for a system that can suit our specific situation, a system that people generally accept to be fair and transparent.

There have been many calls from Members in this House as well as members of the public to implement a pay-as-you-bid system. The main reason behind such calls is the belief that a pay-as-you-bid system will result in lower premiums. The thinking is that with the lowest successful bid, people are encouraged to bid high because they do not have to pay. In the pay-as-you-bid system, everybody is more responsible and therefore you bid responsibly. However, if you take a closer scrutiny of the results of the tenders for the last months, if not years, I think you will find that this is not the case, that actually in the current lowest successful bid system, people do not generally bid irresponsibly. Dr Tan Cheng Bock had given some details earlier about some of the bidding patterns. These results are available to members of the public. In fact, they are released to members of the press. Anybody who is interested can go to the LTA and get all these details. My Ministry has analysed the numbers and we do not see any evidence that there is this very irresponsible bidding pattern that people have attributed to the lowest successful bid system.

So the Government agrees with the GPC's recommendation that we do not implement the pay-as-you-bid in the closed bidding system. There is no evidence to suggest that the pay-as-you-bid system is superior to the lowest successful bid system. On the other hand, there are several disadvantages of the pay-as-you-bid system. These are cited in the GPC report and I will not repeat them here, except to say that I agree with the reasons.

The Government also agrees with the GPC that the open bidding system merits serious consideration. With greater transparency and more information, individuals will be able to make more informed and rational decisions based on the full knowledge of the prevailing market situation. Many Members in this House, including Dr Toh See Kiat and Mr Chew Heng Ching, as well as many others outside, have expressed fears that an open bidding system will irrationally drive up prices, leading to higher premiums. I think all of us attend Seventh Moon auctions. Most of us do anyway. We all cheer when the prices go up. The organisers are happy. The beneficiaries, whether a charity or a grassroots organisation, are also happy. The successful bidders are also happy. Because he is a willing buyer of a product that is being sold to him. It is a scarce commodity. Whether it is "or kim", a piece of black gold, or whether it is an engraved plaque that somebody has put up for auction, this scarce commodity has been sold to the highest bidder. Nobody twisted his arm to bid for it, but he was happy. So it is with COEs.

In an open bidding system, people who value or who want that COE in that particular month will go for it. They will bid high for it. That is what an auction system is all about. And the revenues from COEs also go towards a good cause, whether it is for roads, MRT, schools, or other public projects. So I think we should not get carried away. The bidding system, whether it is a closed system or an open system, is essentially an auction for a scarce commodity. In itself, any auction system, whether it is an open or closed bidding system, should not lead to higher prices. The price, in this case the COE premium, ultimately will be decided by the bidders, based on information that are available to them, the supply of COEs, the market economy, or their own situation, as Dr Wang pointed out.

In a closed bid, such information is not readily available. So there is that element of luck involved. You put your bid in. If you are more informed, you tend to have a higher probability of success. If you are less informed, chances are that you would not get your COE. But in an open system, the bidders will be fully aware of what the prevailing bids are. Their own bid will also be a deliberate one. Every one will have easy access to the same amount of information. So in that respect, I support the view of the GPC that an open bidding system will result in better informed and, hence, more rational and more responsible bidding. I think this is a worthwhile objective which every vehicle buyer will support.

I understand and it is natural that there will be some anxiety and apprehension about new systems. Some Members including Mr Ong Kian Min have asked: why change, why not stick to the same thing, why introduce uncertainty? The answer is, if we can have something better, why not? So is it better? I think that is a key question. Is it better than what we have today? Is it really a new system? People are anxious because they say this is something new. I think Mr Chay did point out that this is not a new system. Share markets, currency markets trade daily on stock and monetary exchanges on an open bidding system. There are many, many sites on the Internet where open electronic bids are quite common. E-bay is one that comes to mind. I think there are many others, both overseas and in Singapore.

Cars are now being sold on an open bidding system electronically. Traders in New Zealand buy second-hand cars from Japan, and they bid for them on an open electronic bidding system, a system which incidentally is managed and operated out of Singapore. Second-hand motor traders in Singapore, I know, are now thinking of using a similar system to allow people to buy and sell second-hand cars, again using an on-line auction system.

So I do not think there is really that much to fear about an open bidding system transacted on-line. However, I do agree that there are many technical issues that need to be settled before we go ahead with this system. We need to settle things like how to prevent last minute bidding, how to prevent manipulation, and so on. My Ministry will study the mechanics of this open bidding system in greater detail. And we hope to introduce a trial of this system within a year. While the Government is accepting in-principle the trial, we have not finalised whether this will be held in the Open Category, and we are open to suggestions on how to implement the trial. I would like to assure Members that the Government will carefully consider all the possible pitfalls of the open bidding system before we go ahead with it. As Dr Toh See Kiat mentioned, there are many reservations or possible pitfalls in such a system. In the meantime, we will stick with the current closed system, based on the lowest successful bid price. We will not change that.

As far as information is concerned, Mr Ang Mong Seng asked for more information. We will gladly give members of the public all the information that is already available at LTA. We will try to put them onto the LTA web-site. In fact, many members of the public who were involved in the dialogue sessions with the GPC were not even aware that information of the tender results, including their own tenders, with their IC numbers and their tender price, were available at LTA. Such information was available to members of the public but they were not aware. So we will make this information more available on the LTA web-site.

Sir, let me conclude by saying that the review of the VQS has been a worthwhile exercise. There is a general consensus that the VQS should be retained. It is serving its purpose. Nevertheless, there are several recommendations to improve the system. The Government has accepted most of the recommendations. Others would be considered for possible implementation at a later date, such as open bidding. I am confident that these changes will result in a system which is fairer and more efficient and which, hopefully, we do not need to tinker with for quite a long while.

The Chairman: Mr Chay, would you like to continue?

2.15 pm

Mr Chay Wai Chuen: Sir, I would like to raise a question on Electronic Road Pricing. The Government intends to extend this ERP system. I have received feedback from a member of the public. According to this gentleman, he agrees that ERP and COE systems are necessary features. But what are the criteria the Government sets for evaluation before it extends the ERP? By what performance indicators do we measure whether the extension of the ERP is justified? When traffic flow in a certain location is below the standard set, his question is: who is at fault? Is it because the authority did not build enough egress or ingress roads to relieve the choked points? Or were there not sufficient improvements to public transport so that people have to continue to drive along that patch of road? Should there therefore not be a built-up or a monitoring period when information is transparent to the public as to the traffic flow situation and the alternative measures that are in place before raising the ERP charges once the traffic flow in that area drops below a certain target? I hope the Minister can enlighten the House.

Mr Chew Heng Ching: Sir, I would like to reiterate my support for the COE and the ERP. Both measures are necessary to control our vehicle population and restrain road usage in the long term. Indeed with the ERP, motorists are now more careful in planning their roads. Some have even shifted to taking MRT and buses.

Sir, I would like to raise two concerns by Singaporeans arising from the ERP. The first concern relates to the loss in revenue to the Government as a result of the ERP. It was reported recently in the local press that the Government road revenue actually dropped to $5.8 million a month on the average under the ERP system as compared to a revenue of $9.3 million per month under the ALS system. Some motorists are of the opinion, Sir, that because of this drop in revenue, the LTA may have to quickly adjust the ERP charges upwards as well as install more gantries to collect more revenue. In doing so, the Government will recover the shortfall in road revenue. I would like the Minister's clarifications on this observation and reassure the House that the ERP exercise is not driven by revenue.

The second concern, Sir, relates to the congestion on the CTE despite the introduction of ERP there. There has been a lot of concern from the public that one of the reasons why pricing on the CTE has not had a significant impact in reducing congestion is mainly due to the lack of a better alternative or alternatives. I believe the North-East MRT Line when completed will present a fairly good alternative, but that is some time away. In the meantime, Sir, demand for use of the CTE appears to be very price inelastic. Sure, at each level of price increase, some motorists would be priced out. However, we have to consider, Sir, at what cost, especially in the light of the current economic difficulties faced by motorists and businesses.

Sir, the CTE is inevitably a crucial part of our road system and we should perhaps avoid the regressive use of price as the only consideration. Any further hike in ERP charges along the CTE could lead to increased cost burden to our motorists and businesses if there are no better alternatives or transport options. I think we could afford some degree of tolerance for some form of congestion along the CTE until a better alternative transport system is made available. I therefore urge the Minister to go slow on increasing the ERP charges along the CTE.

Mr Iswaran: Sir, the general understanding of the rationale of the ERP system is that it is a device, a mechanism, to manage traffic flow to keep it smooth in order to not hinder productive activity and facilitate economic growth. So the logic of the focus of the scheme in the past was geographic focus in terms of CBD areas and the arterial roads leading into the CBD and its focus on time in terms of peak hours and office hours was quite apparent. And I think in general, Singaporeans have come to regard the ERP as a system to redistribute road usage in space and time in support of an economic objective. But recent announcements and progressive changes in the system appear to suggest that there has been a deviation from that original purpose. For example, the system has been extended from the morning peak to the evening peak to the intervening office hours to the CTE and the ECP.

The Minister has also announced that the scheme may be extended to areas fringing the CBD areas and also to the AYE. This suggests that the focus has now become purely on optimisation of road usage. It may be measured in terms of the traffic flow, speed of traffic, etc, but without regard to how important regulation of road usage in these areas is to the overall economic objective. I would venture to suggest that as we move further away from some of the core economic centres, the economic rationale diminishes and it becomes more of optimising a scarce resource, in this case, roads. If we take that logic to the limit, then we would have 24-hour coverage island-wide for the ERP system and I assume that is not the objective.

Sir, I would ask the Minister for a clarification on what basis the ERP system coverage will be extended and an assurance that it will not indeed be a 24-hour coverage island-wide.

Assoc. Prof. Chin Tet Yung (Sembawang): Sir, the ERP system has been well-received. The Ministry and the LTA deserve to be congratulated for the smooth implementation of the system.

No one now doubts the usefulness of the ERP in regulating traffic. Of course, it can be improved, as some Members have already pointed out. For example, in the case of the CTE, some serious thoughts need to be paid to the heavy built-up of traffic in expressways around 7.00 am or around 5.00 pm or 6.00 pm near the Braddell areas where vehicles virtually crawl along for about a kilometre. But on the whole, one may be satisfied with the general effectiveness of the ERP.

Recently, we read of complaints about ERP and the in-vehicle unit (IU). Specifically, there were complaints about the time it takes for the cashcard to be readable before reaching the ERP gantries. Quite a few people remain unhappy even after LTA has replied.

I wish to raise two issues. The first is by treating defaulters who did not insert their cashcards in time as having committed a criminal offence. The second related issue is fining them $30 for the offence. This was, I understand, already reduced from $70.

Sir, the use of the criminal law should be carefully controlled. In the case of traffic offences, the primary reason for using the criminal law is to protect the public from speeding or drunk drivers where road safety is an issue. We can and should contrast that with the ERP, which is solely for the purpose of regulating traffic. It is one of those victimless crimes where no one is seen to be suffering directly from the act in question. In such a case, I believe that it is wrong to criminalise such conduct. No one with any sense would be trying deliberately to cheat a sophisticated electronic system such as the ERP, at least not with a simple method of not inserting a cashcard. In other words, I believe that the few hundred drivers who are booked daily for not having cashcards in their IUs are just careless. Should such carelessness attract a criminal sanction? I think not.

I would like to suggest that the solution lies in treating such cases simply as deferred payment cases. The ERP system already takes a record of the so-called offending vehicle. The details of the driver, etc, are easily obtainable from the records of the LTA. The driver can be billed later and an additional administrative surcharge can be made. Interest can be charged on outstanding transactions. For example, one could say that LTA has to take steps to recover the minimum sum payable with at least $5 plus an entry charge. I have to say that I look forward to the day when drivers can choose to pay either through cashcards or, if not, through a billing system, say, at the end of each month. To minimise inconvenience, LTA may wish to stipulate that any such person choosing this method has to do it by GIRO and subject to an administrative charge. At least, one would have a good idea of the monthly cost of using a car in the various ERP zones.

To take the argument further, anyone who defaults on a deferred payment may not be permitted to renew the car licence without full payment plus interest, some other surcharge, such as that applied in credit card transactions. In the case of foreign cars without IU devices, it may indeed be a preferable way of charging them. They can pay when they leave or the next time when they enter the country, if they come back at all. I do not think that there will be an enormous problem with this. As it is, foreign cars coming into Singapore have to do with temporary units, which are costly, and I believe unfriendly. It follows from what I have said before that I think the $30 fine is too much. Once again, we are not really dealing with the road safety issue. We need not fine drivers so heavily for the so-called offence. The fine should be immediately reduced to a lesser sum which I think should be the entry fee plus administrative charge.

Finally, I believe that had LTA taken this view that we are not talking about criminal sanctions, it would not have generated the somewhat heated exchange between LTA and those who have written to the press.

Sir, one acquaintance of mine referred to the ERP as standing for "Excessive Recurring Penalties". I hope that it can instead stand for "Effortless, Reasonable Pricing" and I urge the Minister and the LTA to consider this seriously.

Mr Yeo Guat Kwang (Cheng San): (In Mandarin): Sir, since its implementation, the Electronic Road Pricing (ERP) system has been proven to be significantly effective in changing the travelling pattern of road users and in alleviating road congestion. I can remember that prior to the introduction of the road pricing system, driving along CTE between 8.00 am and 9.30 am was a nightmare. Now, we can even accurately forecast the number of minutes we need to travel from the north to south to get into the city area. As such, I agree with the Government's intention to continue developing this scheme and to expand the area of coverage of the ERP.

However, I hope that the Government will not treat the ERP as a panacea for all ailments. In my view, the ERP is only a convenient and inexpensive "Po Chai Pill". If the problem is not very serious, it can be taken for some quick relief. But for the heavily congested bottlenecks, we have to think of something else.

Sir, let me give you an illustration. Blockage of cardiac blood vessel is quite common nowadays in Singapore. During the initial stage of blockage, it can be cured by medication, just spend more money and take the more expensive special medicine for it and the blood vessels may be cleared. However, if the condition turns worse, then the patient will have to go for surgery and the specialist will insert a metal stent in his blood vessel. If our roads are in such a situation, LTA should consider building some viaducts or tunnels to clear the congestion. As for total blockage where the blood vessels are beyond remedy, a bypass cannot be avoided.

Sir, consider the Northeast part of Singapore where my constituency is situated. With the rapid development of Hougang, Sengkang and Punggol 21, some 1,000 residential units are being churned out every month. What we need there is a bypass. Apart from the NEL (North-East Line), we need also a NEE (North-East Expressway) because the CTE is fast becoming a totally blocked artery which is beyond remedy. 2.30 pm

Mr Sin Boon Ann (Tampines): Sir, thank you for allowing me to join in the debate at this point of time. Since the introduction of the ERP, we have various successes with the implementation. In some cases, the ERP has an effect of smoothening traffic flow and in other cases, the situation seems to have worsened. At the sitting of Parliament in October last year, the Minister for Communications did mention that since the implementation of the first phase of ERP in September 1998, the CTE traffic congestion had worsened with the average speed falling to 35 to 50 kilometres an hour which is below the optimal level of 50 to 55 kilometres an hour.

The Minister has also said that the LTA would be looking at the CTE problem closely and would make the necessary adjustments on ERP rates in order to smoothen the traffic flow. Since then, the ERP rates to the CTE have been revised. Goods vehicles have had their charges increased because it was discovered that the goods vehicles were primarily contributing to the congestion at the CTE during peak hours. Since the revision of rates, it does not appear to me that traffic flow along the CTE during peak hours has improved substantially. I do not have the relevant data or statistics. However, based on my empirical observations, I notice that between 8.30 am and 9.30 am, traffic is at its peak despite the revised ERP charges. Traffic along the CTE is at times bumper to bumper, and it stretches all the way from Ang Mo Kio Avenue 1 to the Balestier turnoff.

I would like to ask the Minister for Communications whether the traffic situation along the CTE has remained the same despite the revision of the ERP rates and, if so, whether further measures can be taken to smoothen the flow of traffic along the CTE. And like my colleagues before me, I certainly hope that the further measures taken by the Ministry would not result in additional or greater charges to the motorists using the CTE.

Mr Mah Bow Tan: Sir, when we were discussing the Vehicle Quota System review, I mentioned that the Vehicle Quota System is one of the key pillars of our traffic management strategy.

Now we are talking about the second pillar of our traffic management strategy which is electronic road pricing. I think the difference between what we introduced last year and what we have been practising for the last 24 years is simply that we have mechanised it. We just added the "E" to the "RP". Road pricing is something that we have practised since 1975. With 24 years of experience in road pricing, there is no doubt in anybody's mind now that it works. Motorists who use our roads now are more conscious about planning their journeys and those who do not find it worthwhile will either change the time of the journey or they change their routes. There is something else which the Ministry would like to see more of, that is, shift to public transport or car pool. Those who are prepared to pay enjoy a relatively smoother and faster ride. But is that sufficient?

First of all, I would like to take Mr Chay's query on how we are going to assess the criteria of adjusting ERP, whether it is the rates or the locations. As far as the rates are concerned, the objective of ERP is really to smoothen traffic flow, that is, to optimise the usage of our roads. I use the word "optimise" because this means that we do not want the roads to be under utilised, as much as we do not want it to be over utilised.

Last October, LTA mentioned that it will be reviewing the ERP rates on a quarterly basis and this will be done based on the prevailing traffic conditions. LTA has finalised the criteria governing ERP rate changes and will be announcing them shortly. The first rate adjustment will be made on 1st April, next month. As I said earlier, we do not want roads to be under utilised, neither do we want it to be over congested. So, if roads are under utilised in this review, rates will go down. Conversely, if congestion has worsened, rates will go up.

Mr Chew and indirectly, Mr Iswaran, also expressed some concern about the side effects of the ERP. For example, will it move congestion away from those roads that are priced to those that are unpriced outside the CBD area? With road pricing, motorists have a choice. They can either choose a smooth journey or they can use the unpriced roads and tolerate some congestion or some delays. Whether that congestion level is tolerable or not, really depends on the individual motorists. Some are prepared to tolerate very high levels of congestion, others do not want to see a single traffic light. So, this is what was taking place in the early stages of road pricing. However, over time, we must expect that the unpriced roads will become more and more congested. Our vehicle population continues to grow, 3% on the average per annum compounded over the last nine years, more than that earlier. According to LTA's traffic surveys, the traffic conditions outside the city, between the CBD and the outer ring zone, have been deteriorating. In fact, the roads just outside the restricted zone have become more congested than those within the zone. Currently, the traffic in the region between the CBD and outer ring roads --- a series of roads which include Queensway, Farrer Road, Adam Road, Lornie Road, all the way to Braddell, Upper Aljunied, Mountbatten and Fort Road --- areas like Thomson Road, Upper Serangoon Road, MacPherson Road, Rochor Road, these areas are all beginning to experience more and more severe congestion during peak hours. LTA has measured some of the travel speeds in these areas and some of them have actually fallen below 20%.

If you project the situation forward, if you do a simulation, you will see, and this is what LTA has done, that the congestion level of these roads will worsen significantly during the next few years if nothing is done. What does this mean? Even if you have a very congestion free CBD, if you are driving into the CBD from outside, you will find that it will take you longer to get to your destination. You have got to battle through the jams on the outer ring roads before you can even get to the CBD. And obviously, this is going to completely nullify the positive effects of the various measures that we have taken to keep the CBD congestion free.

Our experience with road pricing and with traffic congestion tells us that we have to nip this problem in the bud before it gets worse. So, we have to move away from the idea that ERP is only for the CBD and expressways. Indeed, if we look back at our history of road pricing, as Mr Iswaran pointed out just now, it was clear that as vehicle population grew, congestion slowly but surely spread from the CBD onto the ring roads, and the expressways. We started out with ALS in the CBD in 1975 for the morning peak only. As traffic grew, we extended the ALS to the evening peak in 1989. In 1994, traffic started to build up again in between the two peaks, so we had to implement ALS throughout the day. Then, the expressways became congested. So we implemented road pricing on the expressways, first, on East Coast Parkway in 1995, then on the CTE and the PIE in 1997.

It is almost unavoidable that we will have to tackle the increasing congestion problem on the ring roads. To answer Mr Iswaran, while the policy objective of the ERP has not changed, it remains one of optimising road space. We will have to extend ERP to tackle congestion where and when it exacts a toll on road users, and consequently, on the economy and our way of life.

Congestion has moved beyond the CBD and the expressways to the ring roads. We have to expand ERP in tandem. Whether there will be a 24-hour coverage of the ERP throughout the island is not for me to say now. But if we had traffic congestion for 24 hours a day, do you think we should also have ERP 24 hours a day? I think that is an interesting question, which I will not answer now. But if the situation arises where we have intolerable traffic congestion and our roads are clogged and there is a cost associated with that, should not we make use of all the available measures to tackle the problem?

For the second phase of the ERP implementation plan, LTA has recommended implementing this additional cordon outside the CBD. This will be done progressively with effect from September 1999. The cordon will include the existing congested bottlenecks like the PIE at Adam Road in the direction of Changi, Thomson Road, Bendemeer Road and Kallang Road towards the city. The exact gantry locations and the ERP rates are still under study and will depend on the prevailing traffic conditions at those points during morning peak periods. This cordon, to answer Mr Iswaran, will also include a point on the AYE. I previously indicated that the AYE would be the next place where road pricing could occur because of the deteriorating traffic conditions on the CTE which is at present the only major expressway into the city not subject to ERP. We have tried to delay it for as long as possible but the traffic situation there has reached a stage where it has become necessary to introduce ERP on the AYE as well. LTA will announce details of the gantry positions and the rates to be applied for the ERP Phase II in due course.

I turn now to the problem on the CTE. It appears to be a peculiar problem. It has generated interest among Members of Parliament whose constituencies are in the north and north-east areas. Mr Chew Heng Ching, Mr Yeo Guat Kwang and Mr Sin Boon Ann pointed out correctly that the ERP on the CTE alone is not solving the problem. The LTA is aware of the problem. The congestion is caused by several factors. Firstly, in the early stages, because of the pricing that we introduced, many more taxis and commercial vehicles made use of the CTE relative to the number of private cars. That was resolved last year when the ERP rates for these vehicles were raised. This has alleviated, but not solved the problem because there are other reasons for the congestion on the CTE. It is an expressway with many entrances and exits and serves very huge housing estates in that part of Singapore - Sembawang, Yishun, Ang Mo Kio and even Tampines and Pasir Ris. These are all in the north and north-east. CTE also links a number of major material roads.

What happens is that many motorists exit the CTE before the ERP gantry point at Braddell and this causes a big tail back. The exit at Braddell Road is also a very congested and narrow exit. LTA will, first of all, expand that CTE-Braddell Road interchange. Tenders have been called this year, work is starting middle of this year and should be ready by the year 2002. But Mr Yeo Guat Kwang is correct to say that there has to be a whole series of solutions. It is not just one solution alone. The longer-term solution is to provide more public transport options for people living in north-east and this is where the north-east MRT line is going to be useful. The north-east MRT line will be ready in 2002. In the meantime, before that is ready, before the CTE-Braddell Road interchange is implemented, some other solutions will have to be found and this will include increasing ERP rates for all vehicles and implementing additional ERP gantries along the CTE. 2.45 pm

Mr Yeo also suggested an additional expressway, which he called the North East Expressway. He will be pleased to know that there is indeed a plan for such an expressway in the long-term transport plan to serve the north east area. In fact, there will be two expressways. One will be called the Kallang Expressway and the other will be the Paya Lebar Expressway. The Kallang Expressway will connect the East Coast Parkway to the Pan-Island Expressway. So it will divert traffic down this route. The Paya Lebar Expressway will be a continuation of the Kallang Expressway northwards to link up with Tampines Expressway. Alignments of these expressways are being finalised and are expected to be completed by 2006.

Let me now turn to a very interesting proposal by Prof. Chin on ERP violations. Yes, I agree that ERP violations are mainly due to forgetfulness or carelessness on the part of motorists. I do not think anybody wants to cheat the ERP system. In fact, they know that there is a very low chance of success if they want to do that, which is a testament to the technical integrity of the system.

Originally, when we had the ALS system, paper licence system, the fine for going through the gantry without displaying a licence was $70. We reduced the ERP composition fine to $30 in May last year. Prof. Chin thinks that $30 is still too much.

Since the full implementation of ERP in September last year, the number of cases has dropped from about 1,200 cases daily to less than 800 cases a day now. If you look at these 800 cases, this is something like 0.3% of the total number of transactions we have every day going through the gantries. More than 99% of motorists have no problem in ensuring that their cashcards are properly inserted. I am sure that over time, the habit of inserting cashcards into the IU before beginning a journey will be well formed. But I do sympathise with the point of view of Prof. Chin. If we can come up with a fair system which does not take up too much administrative effort or resource, to allow motorists who forget to insert the cashcard to somehow pay for the outstanding ERP charge plus an administrative surcharge - I am glad he mentioned that - then I think it is an idea worth looking at. I will ask the LTA to look into this.

On the other option he suggested of having a monthly billing system, I am not so sure whether this will be a very popular option. We did discuss this when we first designed the ERP system and we toyed with the option of having a monthly billing system where everybody gets a monthly bill, and no worries about inserting the cashcards or forgetting and being fined. But we opted for the smartcard system because of several reasons. First, we wanted to do away with this very expensive and elaborate central accounting system, because this is what we need in order to keep track of all the 700,000 motorists going through the gantries.

Secondly, and this is an important point, we wanted to make motorists aware and more conscious of the cost of motoring, that every time you pass through a gantry, you are aware that it is costing you something.

Thirdly, it helps us to move towards a cashless society by encouraging the use of smartcards.

Lastly, and this is not a trivial consideration, with a monthly billing system, privacy could be an issue if motorists are concerned about having details of their movements being recorded. According to some accounts, the main reason why road pricing was rejected very early on in Hong Kong was because of the privacy consideration.

Given the complexity of the system, we did not want, in the initial stages, to complicate the system further. But I do not rule out the fact that as motorists become more aware of the system, as they become more used to it, as the system beds down more, we can consider introducing some of these refinements that Prof. Chin suggested.

In conclusion, Sir, we have achieved a major milestone in land transport policy when the ERP system successfully replaced the manual ALS and RPS systems last year. Technically, it is working to our satisfaction. From the transport perspective, it is achieving its purpose of spreading traffic and keeping our roads free flowing. And, most importantly, 700,000 motorists, who have IUs fitted, have become familiar with the system and the majority have no problems with the system.

Although our vehicle ownership and usage management measures may seem harsh at times, motorists understand that they are necessary if we are to keep our goods and people moving, our economy buzzing, our quality of life improving. These two traffic management tools must not be seen in isolation. They go hand in hand. The 3% per annum compound growth in vehicle population for the next five years can only be sustained - and this is for Mr Iswaran's note - if we expand the ERP. I hope that motorists will not simply divert their trips from ERP roads or ERP hours but seriously consider alternatives such as public transport and car pooling.

Mr Chay Wai Chuen: Sir, I would like to ask the Minister what is the rationale for allowing the bus transport companies to bid to operate the North East Line when the SMRT is not. The bus companies will have to bring in foreign train operators to run this service. Is it a kind of discrimination on SMRT? And how are we so sure that SMRT will not be able to provide a better low-cost service on rule-based competition compared with the foreign operators?

Mr Gerard Ee (Nominated Member): Sir, I am urging the Minister to consider the setting up of a classic cars category so that there will be a population of home grown older cars as a record of our heritage. Currently, there is a category of vintage cars. These are cars manufactured prior to 31st December 1939. There are 92 such cars in Singapore, and most of them are on special terms of restricted use to enjoy a lower cost of keeping them in Singapore. Vintage cars on restricted use can be put on our roads 28 days per calendar year. In return for the restricted use, they are exempted from the VQS, ie, owners need not pay the PQP to retain their registration. Road tax is paid on a day basis to cover those days when they are on the road, and the fee to register a vintage car is only $140. But the car cannot be sold or transferred in Singapore.

In recent years, there has been much emphasis placed on reclaiming our heritage. Much effort and money are allocated to the conservation of buildings. Very often, when there is a need to showpiece the history of motoring in Singapore, members of the vintage club are approached to participate and to parade their cars. Sadly, nothing is being done to enable people to retain better old cars. In wanting to keep our population of cars young and therefore relatively trouble free, we overlook that there are people who maintain their cars in excellent condition. Enthusiasts spend a lot of energy and money to keep their cars in pristine condition. To quote an example, I refer to the 130 Minis owned by 135 members of the Mini Car Club. All the Minis are in extremely good condition, their members having made great effort to trace and import original parts to preserve their Minis in almost as good as new condition. It is merely their enthusiasm that keeps them going.

I would like to propose the establishment of a classic car category. The definition should be based on age, and I would suggest an age of 40 years. No car can survive that long without proper care and attention. Thus, there is no danger of such cars breaking down frequently and causing congestion on our roads. To help the enthusiasts with the cost of maintaining such cars in good condition, I would like to suggest that for a restricted use of 90 days per calendar year, they be exempted from paying the PQP and the road tax be paid only for the days of use. The registration fee should also be retained at $140. The restricted use for vintage cars should be revised on the same basis as that for the classic cars.

Sir, as motoring is clearly an important subject for Singaporeans, it is right to allow the creation of a living record of our heritage in motoring. As in our historic buildings, before we lose more of our classic cars, we should take immediate steps to preserve what is left.

Sir, I urge the Minister to give this proposal serious consideration. Only the enthusiasts and people willing to invest time, effort and money would bother to keep such cars. It is safe to say that there are sufficient measures such as the PQP and premium on road tax payable in the initial years to ensure that only the better cars will be kept up to and beyond 40 years. In the hands of enthusiasts, these cars will be better maintained than a much younger car in the hands of the average motorist.

Mr Yeo Guat Kwang: (In Mandarin): Sir, we have clearly seen a marked improvement to our public transport system over the past decade. Our people are now enjoying more comfortable and convenient services. Our bus services have been continuously improved, and the MRT network is expanding all the time. The "Star of Tomorrow" - the LRT will be making its debut soon. For all these, credit must be given to LTA and all our transport workers.

In our strive for excellence and our spirit of wanting to do better than the best, I hope that the Ministry of Communications will continue to explore ways and means to further improve our public transport system, particularly on how to enable our commuters to reach their destinations faster and let our workers reach their places of work in a shorter time. We have to work harder on this. Between comfort and shorter travelling time, I think I will choose the latter.

From a random survey I conducted on our workers, I discovered that they have to spend a lot of time on the road going to and returning from work. Let me give you an illustration. A worker who goes from Choa Chu Kang to Tuas will need about 1 hour and 30 minutes (including waiting/transfer time). From Jurong East to Tuas, it takes about 1 hour 20 minutes. For those who live in Yishun and if they want to go to Ang Mo Kio Industrial Park, or for those who stay in Bedok going to Loyang or Upper Changi Industrial Estate, they will need about an hour on the road. I hope that the authority will seriously explore more effective ways to shorten the time needed by our workers on the road.

For the sake of the welfare of our workers, I would again earnestly urge the Ministry of Communications to build MRT stations at industrial estates along the MRT lines, such as the Sungei Kadut Industrial Estate.

Mr Shriniwas Rai (Nominated Member): Sir, before I move on to my amendment, I would like to associate with the sentiments of Mr Gerard Ee. I hope the Minister will give him due consideration.

Sir, on public transport, I applaud the Ministry for having given Singapore one of the best public transport in this part of the world. Having said that, let me say that there is further room for improvement. I agree with Mr Yeo earlier. We must devise means and methods to shorten the time of travel on bus. Sir, I would urge the Minister to give consideration to one area, ie, perhaps the bus companies could work out a schedule so that passengers who are sitting in the office could find out from the Internet what time a bus would reach its destination. If we know this, Sir, it will save travelling time. 3.00 pm

The second matter is a more difficult issue, but I would urge the Minister to consider. At the present moment, we have a duopoly, TIBS and Singapore Bus Service. May I ask the Minister to give consideration to the possibility of having a third bus company or a fourth bus company. We know monopoly is not a healthy sign and it will be good for Singapore in the long run to have more bus companies.

Another area which has not been explored is that we should help the public transport. To relieve congestion from the roads, cycling should be encouraged for short distance. Going to the wet market or buying something in the provision shop, even for a short distance of half a kilometre, or two hundred metres, people still go by car. I see my good friend, Mr Yatiman Yusof nodding his head. I hope he is supporting my suggestion. He is championing the cyclists' cause and I think it is healthy to cycle. Many of us, when we were young, used to cycle to school. I think that is not done now. We should encourage cycling. It is also a way to save the environment as well. If we have less pollution, it will be better for Singapore.

The Chairman: Order. I propose to take the break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.25 pm.

Sitting accordingly suspended at 3.02 pm until 3.25 pm. Sitting resumed at 3.25 pm

[Mr Speaker in the Chair]

Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

Head I (cont.) -

Mr Chiam See Tong (Potong Pasir): Sir, I would like the Minister to give us an update of bringing the Woodlands MRT line to Johor Baru. It was reported in the Straits Times in March 1991 that the Woodlands MRT line was designed to make it easy for the authorities to build an extension to Johor Baru. It was also further reported that the possibility of expanding the MRT from Woodlands to Johor Baru was endorsed and agreed to in principle by Malaysian and Singapore Ministers and the then Johor Menteri Besar Tan Sri Muhyiddin Yassin. The Woodlands MRT line has since been successfully constructed and has been in operation.

I personally think that bringing the MRT line into Johor Baru and beyond, say, to Scudai is a very good idea. If not for anything else, this MRT line shall alleviate the traffic jams at the Johor-Singapore Causeway. The traffic jams at the Causeway of late appear to be on the Singapore side of the Causeway. Last Saturday, 13th March, at about 4.30 pm, I personally was caught in a nasty traffic jam for one-and-a-half hours at the stretch of road from the exit of the BKE to the Singapore Immigration Checkpoint. I noticed that at the Singapore Immigration Checkpoint, only about six or seven booths, out of about 28, were in operation. What astounded me was that, despite the heavy traffic, the Singapore authorities did not deploy enough traffic police to direct the flow of traffic. I saw only two uniformed policemen were on duty at the point of entry into the immigration area. At that point of time, it was utter chaos at that stretch of the road leading to the Immigration Checkpoint. Cars were vying with each other to inch their way forward. Five rows of them were packed on the stretch of road which was only designed for four rows of cars at the most. On top of that, there were hundreds of motorcyclists weaving their way forward between cars and in full throttle with each of the motorcycles emitting thick black smoke. The atmosphere there was filled with black fumes. I pity those two policemen who were on duty there. They were subjected to breathing the unhealthy air filled with smoke. They were breathing without any protection. Their health will surely be affected.

Yes, I do think that an MRT line going into Johor is a good thing. It not only helps to solve the constant traffic jams, but it shall surely increase the business between Johor Baru on the one hand and the Woodlands Town Centre and Singapore as a whole on the other. It shall also bring the people of Malaysia and Singapore closer and the relationship between the two countries can further be strengthened.

I would like to ask the Minister whether there are steps taken since 1991 to construct the MRT into Johor Baru.

Mr Seng Han Thong (Ang Mo Kio): (In Mandarin): Sir, over the last one year or so, many Singaporeans who were retrenched or who were worried of being retrenched have been taking up taxi-driving for a living. Therefore, the taxi-driving profession has many "new talents" coming in. Many of them were former managers or professionals. These "new talents" are somewhat different from the foreign talents that we were talking about the last few days. Although the entry of these newcomers has created competition against the old-timers, our existing taxi drivers sympathise with them because they understand that these ex-managers and ex-professionals too need to earn a living to support their families. On the other hand, the commuters are happy because there are now more taxis available to them. Talking about foreign talents, our taxi drivers do sincerely welcome them to Singapore, because most of these foreigners do not drive and they take taxi all the time, giving our taxi drivers more business. With more taxi drivers available, it also resolves the previous problem of matching taxis with drivers.

But there is one thing we need to improve upon. This is the time when the taxi service industry is undergoing a major reform. We should take away some of the old regulations which are becoming obsolete by now, so that our taxi drivers can also contribute towards our move towards a world-class public transport system.

The existing rule requires every taxi driver to undergo a refresher course once in every 10 years. I think this ought to be reviewed now. The taxi service industry is moving towards more high-tech operations, such as computer-aided distribution of service, satellite calls, etc. Taking a course once in ten years cannot keep the drivers abreast of the latest technology. Moreover, taking a refresher course once in 10 years means the driver will have to go for courses five nights in a row. It is very inconvenient to the taxi drivers. Perhaps, we could have it once every five years for two nights in a row, or maybe once every two years for a one-night course. I think this taxi-driver refresher course should be treated as part of the "Lifelong Learning Scheme" so that taxi drivers can enjoy some sort of subsidies. At present, they have to pay the full course fees on their own. I feel that our taxi drivers should be allowed to take up the various training courses like the other Singaporeans. Actually, in driving a taxi, you have to use your brain too. You have to map out the route which is less congested and drive your passenger to his destination in the shortest possible time. As a matter of fact, the taxi service industry is one of the first industries to be computerised. It is the philosophy of the taxi drivers that with the combination of the "electronic brain" (Chinese expression for "computer"), and the human brain, we can provide better services for our commuters.

The Chairman: Can I urge hon. Members to be brief so that we can take the replies from the frontbench before the "guillotine"?

Dr Wang Kai Yuen: Sir, by and large, the bus service in Singapore is very good by international standards. Most of the complaints tend to centre around the crowded buses during peak hours. But what prompted me to speak on this cut is the perceived poor responsiveness of the system with respect to population shift, especially when new HDB precincts are completed and the population moves in. I am not referring to new town development but precinct development.

Let me relate my experience in Toh Guan Estate in my constituency. In that particular estate, about 5,000 families have moved into the 30-plus HDB blocks. During my house visit in August last year, almost every family in that block complained about the lack of transportation service from their home to the nearest market. After that, during the block party, more than 100 housewives surrounded me and said, "We have this problem." Experienced though I am, as an MP, I think any one who is faced with 100 angry housewives would find it difficult to handle.

So when I brought up the issue with SBS, it came back with a very polite reply, saying, "There is no problem. Residents can take this bus, that way. They can change bus at that location to get to their market." When I brought up to the Public Transport Council (PTC), PTC came back with a very polite reply, again, saying, "All the established standards have been met and residents will have no problem taking the bus from where they want to go to where they are." Finally, after a lot of to-ing and fro-ing, I am grateful to report that a new bus service has finally been introduced on 7th March this year. What I would like to do here is to urge the Minister to, maybe, communicate with the PTC to establish a new standard to anticipate new demands rather than the Members of Parliament bringing up the problems and then the system responds to these problems.

Mr Peh Chin Hua (Jalan Besar): (In Mandarin): Sir, I am going to speak on what would appear to be a small matter, something concerning a difference of 30 cents only.

I am aware that most of our NUS students use public transport to get to their campus, in particular, many of them use SBS bus service No. 96 from Clementi Bus Interchange to Kent Ridge. Whether it is an air-conditioned service or not, the minimum charge is 60 cents. Many students feel that the fare of 60 cents is very expensive and unreasonable because the distance is so short. They are asking for the fare to be reduced to 30 cents, as in the feeder service. Although it is just a difference of 30 cents, to the NUS students 30 cents per trip, when accumulated, can mean a lot of money.

They have made representation to SBS, but the company had turned them down and the explanation given is unconvincing. SBS's justification for sticking to the 60-cent minimum fare is that bus service No. 96 is operated from Buona Vista Interchange and not a loop service from Clementi Interchange to Kent Ridge. Technically, it is not a feeder service. It cannot qualify as a feeder bus service.

In this current economic crisis, the Ministry of Education has already frozen the incremental university tuition fees. I hope the Ministry of Communications would take up the matter with SBS so as not to give our NUS students the feeling that SBS is operating on a monopoly and any hope of fare reduction is out of the question!

Dr Lee Tsao Yuan (Nominated Member): Sir, I have more or less the same issue as Mr Peh and, that is, the issue of whether deregulation of bus services would indeed lower the costs to commuters and also encourage enterpreneurship as well.

At the present moment, there are two bus operators, SBS and TIBS, together with some Scheme B operators and private shuttle services. But as far as I understand, there are no private operators running services along trunk routes or along selected routes which are not feeder services. It would seem to me that selective allowance of private operators would improve services to commuters without severely affecting the profitability of the present bus companies. I am aware that bus companies use the profitable routes, such as the trunk services, to cross-subsidise unprofitable routes. However, I am not convinced that deregulation of selected services would, in effect, result in a loss of financial viability of the two major bus companies.

A service precisely in point is the one from the Clementi Interchange to the NUS campus that Mr Peh talked about. One specific suggestion I have is to open up the route from the Clementi Interchange to the NUS campus at Kent Ridge to private operators and see whether this would indeed result in a fall in bus fares and an improvement in service.

I would also like to seek clarification regarding the Minister's statement that the longer term plan is to have at least two main operators running both rail and bus lines, together with several smaller bus operators, and whether this plan in effect means a deregulation of bus services.

Mr Shriniwas Rai: Sir, the present bus structure is such that the minimum one passenger pays for four fare stages is 60 cents. But I urge the Minister to reconsider the position. We should possibly allow two or three fare stages for 40 cents and then go up gradually. Now, it is actually 60 cents for the first four fare stages and another four fare stages. Could we have two fare stages at one fare and then the other two fare stages? So it would be equitable and fair. I share the sentiments of both my colleagues, Dr Lee and Mr Peh. It is most unfair to travel a short distance and pay so much. Why do we not follow telephone usage? The longer you use, the more you pay. It is only fair and equitable.

Mr Mah Bow Tan: Sir, in the interest of time, I will give a very brief response to an issue which, I think, really requires much more time. This is the issue of multi-modality. Both Dr Lee and Mr Chay Wai Chuen touched on this issue in their questions. The purpose of this move towards multi-modality is really to improve the overall public transport system. I use the words "public transport system" because, right now, what happens is that we have operators that run buses and we have operators that run trains. We do not have operators that run both. This is really not ideal from the point of view of the commuting public. And, indeed, neither is it sustainable from the point of view of the industry as a whole.

If Members will recall, as we extend our rail network, what happens is that the buses will lose their market share. Over time, as we envisage a more extensive rail network, the buses will gradually lose more and more of their market share. Eventually, what we are going to see, if we do not do anything, is that the bus operators will lose their ability to cross-subsidise. In fact, there is a lot of cross-subsidisation that goes on within the system. But if all the major routes are taken over by trains, the bus companies will lose their so-called lucrative services, the cream of their services. Eventually, the ability to provide those services which Mr Rai and Dr Lee talked about and which are losing money, that ability to cross-subsidise will be gone. So that is another reason why we are moving towards this system of multi-modal environment.

In this environment, buses and trains will be operated by a single operator. There will be better integration, synchronisation of timing, and, hopefully, integration will also lead to better fare systems. These changes in the fare systems that we are talking about today can be looked at in a more comprehensive way.

To move towards this structure, the first step is that we have invited SBS and TIBS, who are both bus operators, to tender for the operation of the North-East MRT Line as well as the Punggol and Sengkang LRTs. This is not to suggest that the SMRT, as Mr Chay asked just now, is not doing a good job. On the contrary, it is doing a good job. However, we are taking this opportunity to look at a new structure for the industry and taking this opportunity, with the advent of the North-East Line, to encourage bus operators to go into train operations. And vice versa because we will also be encouraging the train operator to do likewise.

Is this a step towards deregulation? This will allow us to deregulate because once we have a multi-modal environment and we have two or more multi-modal operators, I envisage that we will also have room to accommodate smaller single mode operators, essentially bus operators. We already have private bus operators. Scheme B operators are already covering or plying some of the routes. But they are not sufficient to give that competitive push to the major operators. I recognise that. And in this multi-modal environment, I hope that we will be able to further deregulate bus routes and allow more direct competition amongst single mode bus operators and multi-mode operators. But this has to be done in a managed and sustainable manner and my Ministry will be reviewing the regulatory and licensing framework to achieve this.

I will ask my Minister of State and Parliamentary Secretary to answer the other questions. 3.45 pm

The Minister of State for Communications (Dr John Chen Seow Phun): Sir, Mr Yeo, Mr Rai and Dr Wang commented positively on the development of our public transport industry. Nevertheless, they asked that we continue to improve and shorten the travel time. Let me say that, in fact, there are a few things that we are doing to improve public transport. Firstly, the Minister has mentioned about the public transport industry restructuring, which we have started. That will bring in more competition. Secondly, the Minister has also announced that LTA is embarking on a comprehensive development of rail systems. If we have a comprehensive rail network, it will help to reduce travel time as we rely more on rail and less on bus services which have limitations due to routing and traffic jams. Thirdly, we will do all we can in using technology to improve the services for bus commuters. One good example suggested by Mr Rai is to have the bus schedule and bus arrival times to be made available to commuters. For his information, LTA is currently developing a system called the Travel Information System (TIS). LTA will work with the bus operators and use satellites, GPS, and so on to estimate accurately bus arrival times at every bus stop and we can display them at bus stops and over the Internet as well. All these will work towards improving the bus services.

Let me also answer the question by Dr Wang Kai Yuen about whether PTC can be more responsive to the needs of residents for bus services in new towns. Let me inform him that before the people move into a new town, the bus operators, LTA, HDB and JTC will come together and draw up a conceptual plan for the town. These plans will have to be approved by PTC and, in the beginning, the services will be such that it will cater to a smaller population in the town. But as the town develops and more and more people move into the town, the bus operators and PTC will monitor the transport needs very closely and upgrade the bus services accordingly. That is why as the Member has pointed out that on 7th March, a new bus service was introduced in the Toh Guan Estate. That was because of this procedure. But I would ask PTC to see whether we can improve on the responsiveness and whether we can provide bus services earlier. Undoubtedly, in the beginning, because the population is small, there will be some inconveniences and you cannot introduce bus services in very fine increments and so there is this problem. Nevertheless, I will ask PTC to see whether we can be more responsive.

Mr Peh talked about bus service No. 96 from Clementi Interchange to NUS and asked whether it could be changed to a feeder bus service and reduce its fare to 30 cents. Feeder bus services are generally for travel within the town and this is the definition that the bus company and PTC agreed to and, therefore, this service, as Mr Peh has pointed out, is not considered as a feeder service. We should not arbitrarily convert trunk buses to feeder buses because feeder services are generally not viable and heavily subsidised by other commuters. If we change that, there are many other short distance services that can also be changed to feeder service, and that will have a serious impact on the viability of the bus companies. NUS students who use buses frequently could consider purchasing concession bus stamps, which offer unlimited travel of SBS and TIBS buses for a monthly fee of $44 to $50, and they can travel as much as they want on all the trunk and feeder bus services. And to help the commuting public during the economic crisis, the transport operators have offered a 5% rebate for all farecard top-ups and concession bus stamps are also given a 5% discount.

Lastly, to answer Mr Rai's point about distance-based fares. Yes, in fact, we are moving towards distance-based fares, but the bus fare structure is based on two components. One is the upfront component and the other is the distance-based component. The reason why we need to have an upfront component is because whether you travel a long or short distance, there is a certain amount of overheads bus companies have to incur. Therefore, it is unreasonable to ask the bus companies to charge very small bus fares for a very short distance because the overheads incurred are much more than that. That is the reason why we have these two components. For longer distance travel, we have increased the number of fare bands from 5 to 7 and that is in line with Mr Rai's suggestion of a distance-based concept.

The Parliamentary Secretary to the Minister for Communications (Dr Yaacob Ibrahim): Sir, on classic cars, we take note of the request but we will address it in view of our greater emphasis on usage rather than ownership measures. On taxi-driver's refresher course by Mr Seng Han Thong, I will ask LTA to study how we can incorporate some of his suggestions. On the question by Mr Chiam, it was a suggestion by Malaysia but we have not received any formal proposal. Hence there is nothing on the table yet for us to discuss.

Mr Chay Wai Chuen: Sir, I would like to thank the Minister for all his answers to our queries and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The sum of $325,505,650 for Head I ordered to stand part of the Main Estimates.

The sum of $1,776,515,900 for Head I ordered to stand part of the Development Estimates.

Head M -

The Chairman: Head M - Ministry of the Environment. Amendment No. (1), Mr Heng Chiang Meng.

Mr Heng Chiang Meng (Cheng San): Sir, I beg to move,

That the total sum to be allocated for Head M of the Main Estimates be reduced by $100.

Sir, first, let me thank the Minister for the amendments to the Environmental Public Health Act relating to heavier penalties for illegal dumping. The Bill is due for second reading later this week and I am very sure that we will welcome the enactment of heavier penalties for illegal dumping.

Illegal dumping is not only against the law but also a crime against the community and environment. Such crimes against the environment sometimes may have long-lasting effects, especially when the wastes illegally dumped contain toxic matter and/or heavy matter. As a community, we must never tolerate illegal dumping. We should not take this as a small petty offence. However, for the law to be effective, the perpetrators of these illegal acts must be caught. Unfortunately, the authorities cannot be in all places at all times to catch these offenders. The authorities need the help of the community to catch these people.

I would therefore like to suggest that the Ministry of the Environment look into some form of empowerment to be given to the community to assist them catch these offenders. Right now, I do not have any concrete ideas of what type of empowerment would be needed. Certainly, I do not propose empowering our average Singaporeans to personally confront these offenders. It will be just too risky to do so. All I am suggesting at this point is for the concept to be studied and accepted, and if needed, I will be most pleased to help contribute concrete ideas on the form that such empowerment should take.

Assoc. Prof. Low Seow Chay (Chua Chu Kang): Sir, illegal dumping of construction and other waste materials has been repeatedly reported in the local newspapers recently. This takes place in vacant lands near residential housing estates, lorry parks or any places where illegal dumping could be done without being caught. I observe that there are mainly two types of dumping behaviour. One is the small-timer who just wants to save some money by not disposing their waste at the official dumping ground and indiscriminately disposing their wastes as and when it is available. Usually, the truck drivers just unload the wastes and they carry it to any vacant land where they could be undetected.

The second type, I think, is more important and deserves some attention. There are illegal dumpings which are planned and well-organised. They could be operating as illegal waste collectors and landfill operators for significant financial gains. One example where this could happen is when a company or individual tenders for a piece of land which is of low lying and can be used for agricultural purposes, and the operator can use the premises as an illegal landfill and for the collection of construction wastes.

The second example is that a company can disguise itself as a town council or private estate conservancy contractor and make use of the rubbish bin centres and facilities provided by the Ministry of the Environment for illegal disposal of their wastes collected either from a commercial or industrial waste collection service. In other words, the company is making money from the collection of wastes from other places and the people living in housing estates and the Ministry of the Environment are made to bear the cost of the final disposal of the wastes.

Irresponsible waste disposal will cost much more money for the people who subsequently have to put in the effort to clear the mess created by such illegal dumping. In the illegal landfill situation, the problem resulting from illegal landfill could cause pollution to our water resources. As the Chairman of the GPC has mentioned, sometimes, illegal dumpings of wastes contain traces of toxic or hazardous material and it could cause our environment greater and, long-term damage.

I would like to ask the Minister how many such illegal dumpings have been detected in the past one year. For illegal landfill activities, like the one I have described where it is carried out in certain low-lying areas which could be used for agricultural purposes, what would the Ministry do in controlling such unauthorised landfill activities? Under the current law, in what ways could such an environmental culprit be effectively dealt with?

Mr Heng Chiang Meng: Several countries in the region had been hit by very unusual food-related diseases. A notable example in the past few years were:-

(i) in 1996, an outbreak of food poisoning in Japan caused by E-coli resulted in about 9,000 cases and 12 deaths. School children were also implicated and schools had to be closed and disinfected to contain the outbreak;

(ii) in 1997, Hong Kong had the chicken flu. 18 persons were infected and 6 of them died. To break the chain of transmission, the authorities had to destroy about 1.5 million chicks;

(iii) in 1998, the fish farming industry in Hong Kong was hit by the algae bloom known as red tide. About 1,500 tonnes of toxic farm fish had to be destroyed;

(iv) currently, Malaysian pigs have been hit by a virus outbreak known as Japanese encephalitis. At least, 34 human deaths have been attributed to infection by this virus since the outbreak last October;

(v) only yesterday, I read a newspaper report about the use of growth stimulants in pigs in Malaysia. According to the report, the residue of stimulants used could damage the health of consumers. Perhaps it is worth reading a part from the report. I quote, "We want to tell the world our experience with pigs, fed with growth stimulants. We can distinguish pigs fed with such chemicals from the deformed reproductive organs of the female pigs. We can imagine the harm it could do to humans who consume pork contaminated with growth stimulants."

Again, sometime ago, there was a spectre of the mad-cow disease in the United Kingdom. The funny thing is that these viruses affecting cows and chickens were not supposed to affect humans. But, somehow, some form, perhaps mutated because of the drugs and chemicals given to the animals, had managed to jump the inter-specie gap. It is enough to make a person go vegetarian. But even so, it may not be of much help seeing the E-coli outbreak was partly caused by contamination in white radish sprouts, a vegetable. Also, what new diseases or outbreaks the introduction of laboratory altered genes into our food would generate is beyond anybody's guess at this stage.

My questions to the Minister are these: What is the Government's policy on these issues? If outbreaks occur in Singapore, are we truly prepared for them? Should we not legislate for the labelling of genetically altered food? With labelling, at least the consumers have a choice. To take this point further, should we even stop the import of such genetically altered food? Would the Ministry promote an on-going programme to educate the public on these matters? 4.00 pm

Mr Peh Chin Hua: (In Mandarin): Sir, I endorse the Ministry's measures to assess the hygiene standard of food stalls. But many hawkers are unhappy with the grading criteria. I think the Ministry of the Environment should review the criteria so that we can reach a standard acceptable by both hawkers and the consumers, as well as the Government.

Right now, I observe that not many stalls are graded A or B. Under the present grading system, not only the hygiene aspect is considered, but the display of food, attire of the hawkers, general cleanliness of the stall, layout and other factors are also taken into consideration. If we compare the hawker stalls with fast food outlets, restaurants, air-conditioned food courts, we find that it is unfair and biased against the poor hawkers. Because of their favourable conditions, the operators of fast-food outlets and food-court stalls are in a better position to secure A or B grades from the authority. But to the neighbourhood hawker stalls, to get A or B grades is not so easy. It is unfair. Unlike the fast-food chain or restaurants, these hawker stalls do not have the financial backing, neither do they have the advantage of advanced technology to help them with their chores.

Most of the hawkers have to do everything by themselves, from dawn to dusk. They are the bosses as well as the cooks. They have to serve the customers as well as to wash the dishes and clean the stall. So if you want the ordinary hawkers to do everything to qualify for a A grade, it is almost impossible.

Let me tell Members about the Whampoa Hawker Centre, a hawker centre in my Constituency, which is generally regarded as one of the best in Singapore. During my visit to the hawker centre, I found a lot of people queuing up in front of a certain stall which was graded C. The stall has attracted a great number of patrons. It enjoys the best business in the whole hawker centre. I discussed this phenomenon with my grassroots leaders and they told me that business is so good for this stall that the stallholder simply cannot find time to keep his stall in the conditions favoured by the Environment officials. There is no way he is going to earn himself a A or B grade. On the other hand, those stalls where business is not so good, the stallholders have a lot of time to clean up and dress up their stalls to the delight of the officials, and they get their Grade A certificates.

My grassroots leaders told me that this is an irony. When the customers come to the hawker centre, they look at the stalls which are graded C. Their business is so good that there is always a long queue. The logical conclusion is that the food at these stalls must be good. But when you look at the A-grade stalls, there is no queue and, therefore, the food must be lousy. Do not buy from them. Do not patronise them. This defeats the whole purpose of the grading exercise.

It is even puzzling to note that the stall at Block 90, #01-171, which was recently adjudged by the Town Council as the cleanest hawker stall in Whampoa Drive Food Centre, has been given only a C grade by the Ministry of the Environment. Frankly, I do not know how the Ministry officials derive at the A, B or C grading.

I have also visited the hawker centres in Queenstown, Bukit Ho Swee and some other places. I observe that some hawker stalls which are very dirty are awarded B grade, while some stalls which are cleaner get only the C grade. I do not know how the standard is fixed.

I hope the Ministry of the Environment can look into this question and see whether we can do away with the A, B and C grades. Since A, B and C are all "pass" grades, a P grade is good enough. For those who do not make the pass grade, just give them a "F" for failure. The customers would know.

Sir, I hope the Ministry of the Environment can look into the matter.

Mr Heng Chiang Meng: Sir, last year, we were spared the haze of previous years, not because the problems at source were resolved but because of two factors. The first was the effect of La Nina, which accounted for a very wet period during what otherwise would be a dry season. The other was that large-scale burning of forested land by plantation owners did not take place, not because they realise that it was criminal to burn the forest, but because they were not investing in new planting areas. We certainly cannot depend on these two factors for the prevention of future occurrences of the haze.

Perhaps the Minister could tell the House what steps have been taken to prevent future occurrences. Are the Indonesians cooperating on this issue? Have we been able to rope in international agencies and non-Government organisations to help Indonesia, Malaysia and ourselves to tackle this problem?

Mr Simon S C Tay (Nominated Member): Sir, like Mr Heng, I am speaking about the haze. It is clearly a problem that is not within Singapore's exclusive control. This demonstrates the interdependence of the environment. This also becomes a larger problem because our neighbour, Indonesia, is implicated in this. The problem has gone for now. The skies are blue. But the roots of the problem remain. And as indicated by the return of the fires at the end of November/December, the problem at root is still there. This problem at root is the incapacity or unwillingness to enforce laws made by Indonesia in Indonesia. It is tied not just to the air but to forestry and to agriculture, and to the profit motive that those who clear the land for forestry or agriculture save money by using fire and this, of course, is tied up to the problem of KKN - corruption, cronyism and nepotism in Indonesia. And it may indeed worsen given the lack of controls in Indonesia today.

I would ask the Minister to advise the House on how we are working with the Indonesian authorities to-date, and how we are engaging the Indonesian government to give attention to this problem; even today, given the other challenges Indonesia faces. I would ask the Minister particularly to consider that we need to work with whatever and whoever rises in Indonesia after the coming elections. Whoever they may be, we should work with them as long as they are genuine in the desire for change and to tackle the challenge of the haze.

On the other hand, I think that we should do more to hold responsible those who are indeed guilty and relentless in flouting the Indonesian laws. More specifically, I would suggest to the Minister that in the coming year, we should continue to work to strengthen ASEAN as well as to work with international agencies. By these, I do not mean just United Nations Environment Programme we have worked with before, but also the World Bank and the IMF to tie together the change in the economics of Indonesia together with the environment to genuinely search for sustainable development. Otherwise, Sir, I think we will see the return of the fires with the economic changes and the environmental changes.

Sir, the disaster is not just for Singaporeans or Malaysians affected by the haze. This has been disaster for the Indonesian themselves. It is moreover not a natural disaster, but a man-made one. Disasters can spur action to prevent future recurrence. Or when the skies are clear, we and our neighbours may forget. I therefore ask the Minister to look to the long term and to continue and indeed strengthen and widen our efforts in this regard.

Assoc. Prof. Low Seow Chay: Sir, I am speaking on the topic of diesel vehicle pollution.

Sir, the diesel technology has advanced, and all well-maintained diesel vehicles should not emit any visible diesel smoke from the exhaust. Every now and then, when we travel on our roads, smoky exhausts from lorries could be easily spotted. If one is a bit more observant, he should be able to spot one or two of such cases on every trip when he goes to work. I would like to ask the Minister whether we have relaxed the vehicle emission standard for diesel smoke in this period of economic downturn.

Lately, the oil companies announced an increase in the diesel price. The reason given was that the sulphur content in the diesel had been further reduced. I would like to ask the Minister what is the impact on the improvement in the environment when the sulphur content in the diesel fuel is reduced. Does the increase in the diesel price add any burden to the fleet operators during this economic downturn?

Sir, there are many diesel engine technologies aimed at the post-treatment of the diesel engine exhausts to reduce pollution. This includes the diesel particulate traps and the diesel catalytic converter.

The petrol car owner has been asked to compulsorily install the 3-way catalytic converter and also use unleaded petrol in lowering exhaust pollutants. However, diesel cars and truck owners are quite favourably treated by the Ministry for continuing to emit the much higher level of pollutants into our environment. In view of the available technology, would the Government consider a stricter emission standard for diesel vehicles, like the implementation of the compulsory catalytic converter and diesel particulate trap for all newly registered diesel vehicles in the future?

Mr Ong Ah Heng (Nee Soon Central): (In Mandarin): Sir, my views on the detection of black smoke from vehicles is different from my other colleagues. First, I would like to declare my interest as the Executive Secretary of the National Transport Workers' Union and Adviser to three taxi operator associations.

I would like to bring to the notice of the House the unhappiness of many drivers of diesel vehicles with regard to the penalties for emission of black smoke.

In the past, vehicles which emitted black smoke with Hartridge Smoke Unit (HSU) reading of 84 and below, the fine was $150 each for the driver and the owner. Since 1st August 1998, the Ministry of the Environment has revised the penalty for black smoke emission. The current penalty for offenders with HSU reading of 84 and below is $150 for the driver and the owner in the case of a first offender. For repeat offender within two years, the driver and owner have to face fines of $500 each. For HSU reading of 85 and above, the fine for a first offender is $300 each for the driver and owner, and $500 each for a repeat offender within two years.

This is a big amount to the taxi drivers. They feel that such a penalty is too stiff. They have remarked that the fines for speeding and other traffic offences which may result in loss of lives are not as severe as the penalty for emission of black smoke. Why is the penalty for such an offence more severe than the other life-threatening traffic offences?

On the other hand, they feel that poisonous gases such as nitrogen oxide, hydrocarbon and carbon monoxide which are emitted by petrol-driven vehicles are more harmful than the black smoke. These toxic gases are not visible to the naked eye, and that makes detection difficult. Even at the statutory roadworthiness inspection for vehicles, these defects are classified only as minor faults that require no rectification and no fine will be imposed.

Sir, can the Minister enlighten the House on what are the practices of other more advanced countries such as Japan, Europe and the USA with regard to the enforcement of the rules on black smoke emission? What are the rationale, standards and practices adopted in imposing the penalty fines? How many countries are using the Hartridge smoke meters? 4.15 pm

Mr Heng Chiang Meng: Sir, the Chicago Convention on International Civil Aviation has established April 2002 as the deadline for the world-wide withdrawal of larger, older civil aircraft for use by operators. The main reason for this move is noise. The larger older aircraft are much too noisy. However, the United States has set its own deadline at 31st December 1999, that is, end of this year. As most of these larger older aircraft are currently used in the US, there is fear that these aircraft may be sold for use outside the US after the end of this year, ie, after the US deadline but before the Convention-set deadline of April 2002. Sir, the fear is so real that the European Union has acted to prevent the transfer of these aircraft from the US to the EU. Although this appears to be a Ministry of Communications' issue, the real issue here is noise. I am concerned with the noise pollution which would be generated should these aircraft come to Singapore. Since noise pollution comes within the purview of the Ministry of the Environment, I would like to ask the Minister the following questions:

Are the noise pollution standards set by the Ministry of the Environment stringent enough to prevent these aircraft from using Changi International Airport? If not, should we not take preventive measures to stop these aircraft from coming here? My question must be taken within the context of the following: There are many of these aircraft. If they are not allowed or not permitted for operations in the huge first world markets of the US and Europe, then there is a strong likelihood that they would be used in the third world market, including Singapore. I think we should take some preventive measures.

The Chairman: Mr Shriniwas Rai, can you take your two cuts together?

Mr Shriniwas Rai: Sir, Mr Heng Chiang Meng earlier spoke of illegal dumping. I am coming to the problem of keeping our rivers clean.

Sir, the Ministry of the Environment has spent millions of dollars and it has done a good job in keeping our rivers clean. We no longer have the foul smell we used to get. But what is happening now? We can see discarded furniture and everything one can think of being thrown into the river. I live near the Whampoa River where I go for a walk almost every morning. Sometimes, the river is clean and sometimes it is dirty. I think public education plus penal provision would be good. May I suggest to the Minister that a Community Watch Group be formed? It should also consider appropriate legislation to punish the culprits. In contrast to the Whampoa River, the Singapore River is cleaner. I do not know why but the Minister could probably explain to this House.

It is very important for us because I hope to urge the Minister to allow boating in the river. But as it is now, I do not think it would be feasible. Can we one day, like many other cities in the world, have boats in our river?

Next, I move to littering. Despite many years of effort, littering still exists and it is a social disgrace to see people throwing papers and bus tickets. Last year, the Senior Minister of State explained to this House the efforts of his Ministry. I am glad that the Ministry takes this seriously. Here again, I have a novel suggestion which the Minister may want to consider. Authorise some of our national servicemen, especially those who have served in the Police Force, to book these people because only when it hurts their pockets will Singaporeans learn their lessons. No amount of campaigns, Sir, after so many years since SM Lee Kuan Yew started the campaign will help. I am saddened to say that we have progressed but we are retarded because of these social culprits. May I ask the Minister to use his power to see that this social evil is eradicated once and for all.

Mr Heng Chiang Meng: Although I have been bringing up this issue of tax incentives for pollution prevention and control and for environmental protection for several years already, I want to do so again this year.

The Minister is well aware of this issue and the arguments for it. I just want to remind him that he is not doing enough to encourage the move towards greater environmental protection. Compared to the tax and other financial incentives given annually to promote the financial centre, the Green Sector is not even getting peanuts. Yet, environmental issues are the most pressing issues facing mankind today. By actively and aggressively promoting the growth of the green industry in Singapore, we can achieve two desirable goals. One is the growth of the industry and its related clusters to serve the region and, of course, to serve Singapore. We can become the green hub of the region. It will add another layer to our industrial base, thereby adding diversity to our economy. Given the worldwide trend towards environmental protection, the economic and business benefits to Singapore would not be small.

The other goal is the encouragement of our companies to invest in environmentally friendly machinery and processes in their operations. This can only result in a cleaner and greener environment for all Singaporeans.

Surely these are desirable goals to strive for. However, there is a need to have a champion, just like that for the financial centre. I truly hope that the Minister will be the green champion.

[Mr Deputy Speaker in the Chair]

4.24 pm

Mr Ang Mong Seng: (In Mandarin): To solve the problem of acute shortage in refuse collectors, the Government has decided to award the tender to private refuse collectors in Tampines Constituency as a pilot project.

The private refuse collector has already been in operation for a few months now. I would like to know whether the job has been carried out to the satisfaction of the Ministry of the Environment. Has the Ministry set out any criteria or standards to avoid manipulation by the private companies? Will the Ministry consider allowing more private companies to take part in future tender exercises?

Can the Minister tell us whether privatisation of refuse collection would result in a cleaner environment in our HDB estates and private residential estates? Will it cost the residents more for the disposal of their refuse? If this scheme works out to be more efficient, I hope the Minister can quickly extend it to the whole of Singapore for the benefit of all the residents.

The Minister for the Environment (Mr Yeo Cheow Tong): First, I would like to thank all the Members who have spoken for their views and suggestions.

I will take the first two speakers' points on illegal dumping. I totally agree with Mr Heng that illegal dumping is something which is totally irresponsible and which is something that we should do our best to stamp out. It is not just costly to remove the illegally dumped materials but in the process, quite often, the culprits end up damaging the environment quite badly.

To solve this problem, we really need to address two challenges, both of which Mr Heng has also touched on. The first is catching the culprits red handed. This, as Mr Heng pointed out, is difficult because they tend to work late at night and usually in deserted areas. Mr Heng has suggested empowering the community to help us solve this problem. It is definitely an attractive suggestion. I would get my staff to work with him because the more eyes and ears we have within the community, the easier would it be for us to catch them. Not only that, knowing that there are more people on the lookout for them, the culprits would be also more deterred from engaging in such activities.

The second challenge that we have to cope with is how to make sure that the gains are dwarfed by the penalties. At the present moment, the penalties are actually quite low because, for the first offence, the maximium fine is only $10,000. Typically, the courts have been imposing fines of about $1,000 to $7,000, which means that the penalty is actually very much dwarfed by the potential gain.

We have already tabled the Bill for amending the relevant Act. Once the Bill is passed, the penalties for the first offence would be increased from the current $10,000 to $50,000 plus the possibility of imprisonment of up to 12 months. For those who are caught for the second and subsequent offences, the fines would be increased from a maximum of $20,000 today to $100,000 plus a mandatory jail sentence. The mandatory jail sentence would be not less than one month and not more than 12 months. The law would also be amended to allow us to more effectively seize the vehicles that are being used. With the enhanced penalties and with the more effective feedback mechanism, we should be able to better contain this problem.

Prof. Low Seow Chay has also asked about illegal dumping activities and he asked how many cases of illegally dumped materials on agricultural sites were caught last year. We mounted ambushes at several sites last year and caught 21 offenders. They were fined between $900 and $8,000 each and two vehicles were seized.

As to what are the other penalties, the Land Office will normally repossess the site. There were seven cases last year that were repossessed. It is not only that. The Land Office will also forfeit the three months' rental deposit as a penalty. The culprits will also be asked to reinstate the land. So with the enhanced penalties under the new Bill, plus more regular inspections, we should be able to contain this problem as well.

Next, let me move on to the issue of haze. Mr Heng Chiang Meng and Mr Simon Tay have spoken on this. As Mr Heng has rightly pointed out, the La Nina phenomenon has given us a slight reprieve because with the wetter than normal weather, which is expected to last until mid year, we should be fairly free from regional haze. The normal weather pattern is expected to return in the second half of this year and this would coincide with the dry weather as well. With the onset of dry weather, we can expect to see burning activity starting again in Indonesia and therefore we should be prepared.

What have we been doing to get ourselves ready for this? The key activities have been taking place in the regional setting. We have finalised the regional haze action plan and Indonesia's role is to establish a proper fire fighting procedure as well as to ensure that there are appropriate enforcement procedures against the illegal burning. Because of the economic crisis, we fear that there is a lack of political will in the Government to ensure that these two roles are being catered for. For example, in working with the Indonesians, what we have found is that there is really no clear organisational structure in terms of both enforcement and fire fighting. So when a fire breaks out, there is confusion as to which body is responsible for first spotting the fire and, secondly, taking action to fight the fire. Thirdly, who will now step in to investigate, find the culprit and charge them in court? There is no proper structure. Also, in our dealings with the Indonesians, we realise that there are actually many people who are quite concerned about this. They are in charge of departments and they want to do something. But unfortunately, because of the economic crisis, they are short of funds and therefore they are unable to purchase the necessary equipment.

We have been working with the ASEAN members on this issue. We will continue to urge Indonesia to strengthen their efforts against illegal burning and to urge them to set up the proper organisational structure. We have also proceeded to help them purchase some of the equipment. For example, we have over the last year supplied them with communications equipment which will enable them to spot where the fires are burning and relay the information down to the ground. All the communications equipment are now in place. We now have to see how do we get them to make good use of this equipment. This is where the political will comes in. 4.30 pm

In terms of the funding, we have been working with various international agencies, like UNEP. And I understand that UNEP will be working with other UN and international bodies as well on the funding, and to work with the donor countries to assist Indonesia to enhance its ability and capacity. So we will continue to work through all the various organisations and with our neighbouring countries to ensure that there is enough pressure being exerted on Indonesia to take this problem seriously, because this is a problem which affects not just us but, more importantly, it affects themselves to a much greater degree.

On diesel emissions, it is interesting to see the two opposing views. One is from Prof. Low Seow Chay who firmly believes that we should take firm action to ensure that this pollution problem is being tackled effectively. And the other view from Mr Ong Ah Heng who asks us not to be too harsh. Let me start with the points raised by Mr Ong Ah Heng first, because I think it is important for us to understand why this problem is an important one that needs to be tackled.

Fundamentally, diesel smoke contains very fine particulates of less than 2.5 microns, or what we call PM2.5. The studies in the US and elsewhere have linked PM2.5 to an increase in respiratory diseases and mortality. So contrary to what Mr Ong believes, PM2.5 diesel particulates are actually dangerous to health. Therefore, it is prudent for us to keep the diesel smoke to as low a level as possible in order to protect the health of our people. This problem is not a difficult one to overcome because this diesel smoke can be minimised if the engines are properly maintained. And therefore we have put in place penalties to act as deterrence against irresponsible behaviour by owners and drivers of diesel-driven vehicles. Yes, the penalties may be harsh, but the penalties can be avoided, and I think that is a key point. The taxi drivers and the lorry drivers can avoid paying these penalties by ensuring that their vehicles are maintained regularly and properly.

Sir, Mr Ong also mentioned about the penalties being enhanced. Actually the enhanced penalties are still lower than what the courts were imposing, because the courts were imposing penalties from $600 to over $1,000. Whereas now by compounding the offences, the offenders do not have to appear in court, so actually we are saving them time. Secondly, the compounded penalty is only $500. In actual fact, the penalties have been reduced rather than increased.

Mr Ong also asked why petrol-driven vehicles are not required to go for a re-test, if they fail the emission test. Contrary to what he believes, the carbon monoxide test is a mandatory one. And if petrol-driven vehicles fail the carbon monoxide test, it is mandatory for them to go for a re-test.

He has also asked what is the practice of the advanced countries. The advanced countries, in fact, have more stringent emission standards than ours. And because their standards are more stringent, the likelihood of the vehicles emitting black smoke is also reduced. Also, I understand that they have very strict controls on maintenance of the vehicles. As to how many countries use the Hartridge smoke meters to measure the density of smoke emission, I am happy to let him know that all the developed countries use the same Hartridge meters as we are using.

Prof. Low Seow Chay has asked whether we have relaxed the vehicle emission standards because of the economic slowdown. I would like to assure him that we have not. In fact, we have recently moved to reduce the allowable sulphur content in diesel from 0.3% previously to 0.05% since 1st March this year. This lower sulphur content would reduce the emission of sulphur dioxide, which is another very undesirable pollutant. It reduces SO2 by 80%, and the particulate emission from the engines by 50%. So this reduction of sulphur has got benefits.

He has asked about the impact of the price increase. In fact, owners of diesel-driven vehicles are having a price reduction. Because even though the price of diesel has gone up by 2 cents, we have removed the tax on diesel. So net, the owners still have a saving on the price of diesel.

Is the Government considering stricter emission standards? Yes, with the introduction of the 0.05% sulphur in diesel, we are now able to consider stricter emission standards. These standards have, in fact, been in place in Europe since 1996. As Prof. Low has mentioned, the new vehicles, in order to meet these standards, would need to be fitted with a catalytic converter and a particulate trap. As to when we are going to introduce the new standards, we are still studying them, and we will be announcing the decision shortly.

Mr Heng Chiang Meng asked about the noise pollution from aircraft. He asked whether the noise pollution standards are stringent enough for us to prevent these aircraft from flying here. I would like to assure him that the likelihood of the older aircraft being diverted to Singapore is very, very low, because today more than 90% of the aircraft using Singapore Airport are the newer aircraft classified under Chapter 3 of the Convention. This is because most of the airlines that serve Singapore Airport are the major airlines, and these are the ones that are in the process of continually upgrading their aircraft and using newer aircraft. So despite the move by the US to phase out the older aircraft by end of this year, the likelihood of these aircraft being moved here is very, very low.

Mr Shriniwas Rai has talked about littering and clean rivers. Sir, I will take both of them together.

Sir, I totally agree with him. I share his concerns about the littering that is taking place in Singapore, despite several decades of Keep Singapore Clean Campaign. We have done surveys amongst the teenagers. And what we find is that the awareness of the need to keep Singapore clean and the need to not litter is very wide. That means all teenagers know about it, because through the schools and public campaigns, they have been made aware.

When we look at the data on litterbugs, what surprises us is that two-thirds of the litterbugs are aged below 30 years old, ie, these are the ones who have gone through the school education and the public education programme. So it is not lack of awareness. I think it is a lack of social responsibility. The fortunate part is that litterbugs are still the minority. The majority of Singaporeans are very proud about the clean environment and they do take efforts not to litter. The question is how do we deal with the negative attitude of this small group of dirty Singaporeans. Our approach, as has been mentioned by Mr Rai, is education. I think we have to reach out not just to educate Singaporeans but to create peer pressure on those who are inclined to litter. And what we are looking now is how do we involve the community in a much greater way. For example, the Keep Singapore Clean Campaign, which has been driven by my Ministry primarily, I have asked my officials to make that into a civic movement, and to let the community leaders drive this campaign from now on, rather than to let it continue as being a Government campaign.

We have also taken steps to enhance the penalties, which I think is important. We need both the carrot and the stick. Currently, the offenders are only given the Corrective Work Order. Under the revised penalties, the recalcitrant would be liable to both the CWO and a fine. And the maximum duration for the CWO would be increased from three hours to a maximum of 12 hours.

He talked about the dumping of bulky items like furniture. We are also increasing penalties for illegal dumping of bulky items like furniture on the roadsides and void decks.

On his unhappiness about the Whampoa River being dirtied, I also share his concerns. We have spent 20-over years to clean up the rivers. Today, one can actually swim in the rivers. And yet people still do litter. How big is the problem? To ensure that the litter does not get into our water resources, because 40% of Singapore is a catchment area, and the drains and canals in this part of Singapore drain into our reservoirs, we have placed float booms and gratings to collect the litter. I think it will surprise Members to know that each day, we collect over 40 tonnes of litter from the canals and the rivers, enough to fill 10 truck loads.

Again, I would like to join Mr Shriniwas Rai in urging Singaporeans to exert peer pressure, because we cannot be around everywhere all the time to spot the litterbugs. Singaporeans can. Let us all join together in this exercise.

Sir, tax incentives - this is a perennial subject. I am glad we have a champion in Mr Heng Chiang Meng on tax incentives to promote the environmental protection industry. I would like to assure him that all the incentives that are available for the manufacturing sector and the service industries are also available to the environmental protection industry or environmental technology industry. Indeed, EDB also keeps a look-out for potential companies to bring to Singapore. I do not have the data here, but I was given a briefing recently and was told that, in fact, the number of large companies in the environmental technology field that are now operating in Singapore has been steadily increasing. So we are seeing more companies moving to Singapore to serve not just Singapore but also the region. And I think in the process, our own local companies will also benefit from the technology transfer.

We are also encouraging companies to invest in pollution control equipment. For example, we have now introduced the accelerated depreciation allowance scheme to companies that purchase such equipment. This year, the Finance Ministry has supported my Ministry's proposal to extend this accelerated depreciation allowance to the purchase of new commercial vehicles that are being used to replace the old diesel-driven vehicles. So we will continue to look for more ways to help the industry and we will continue to work with the key players in the industry on how ENV can assist them further.

I would now like to ask my Senior Minister of State to answer the other questions.

The Senior Minister of State for the Environment (Encik Sidek bin Saniff): Sir, first, let me thank Mr Heng Chiang Meng for his valuable observation regarding food safety or food hygiene.

Sir, the recent incidence cited by the MP has highlighted how inadequate control on food safety can give rise to serious problems even in developed countries with good public health services. While Singaporeans today enjoy a food supply that is among the safest in the world, we are constantly facing new threats of massive outbreaks of food-borne diseases. Our emphasis in Singapore is on vigilance, control and public education that range from checking the source of food from overseas suppliers to the education and enforcement of local food manufacturers and food handlers in our food centres. This is backed by a system of infectious disease notification so that we can act swiftly to contain any outbreak should it occur. Firstly, my Ministry closely monitors the food situation and emerging food-related diseases in the region and worldwide. Officers in my Ministry also keep in close contact with their counterparts in the region. 4.45 pm

Secondly, the PPD is also very stringent in its control on the import of meat, fish, vegetable and other primary products. Only produce from approved sources is allowed to enter into Singapore.

Thirdly, my Ministry and the PPD has a structured system for surveillance and regular inspection of food manufacturers and retailers to ensure that food is prepared under clean and hygienic conditions. Through public education, training courses for food handlers, food factory programmes and enforcement action, a high standard of food hygiene is maintained. We are vigilant on high risk food and we would not hesitate to act if there is an unacceptable risk to our public health.

Sir, finally, in spite of all that we can do, on the preventive side, we must make preparations should an outbreak occur. ENV has therefore established an inter-agency response procedure involving MOH and PPD to handle food-related incidents. This will enhance our level of preparedness, as a nation, to handle any contingency. Because of our high standard of environmental sanitation and food hygiene, our risks are low. Our environmental health surveillance capabilities have gained formal international recognition when the World Health Organisation designated the Ministry's Epidemiology Department as a regional coordinating centre in 1995.

Sir, Mr Peh Chin Hua is a very hardworking MP. I must say that the criteria used in the assessment are strictly based on hygiene-related matters such as (1) housekeeping and cleanliness, for example, whether the storage cupboards are clean and not infested with cockroaches and other vermins; (2) food and personal hygiene, for example, whether raw and cooked food is properly stored and whether the food handler observes personal hygiene and cleanliness.

Non-hygiene related matters are not part of the assessment criteria. For example, we do not assess how the hawker is dressed but he must be clean. If he wears clothes that are filthy and dirty, then of course this would not do. How the goods are displayed and how the stall is organised are also not factors that will determine the grade of the outlet so long as food hygiene is not compromised. Ultimately, we would like to see all our food vendors committed to a high standard of food and personal hygiene regardless of the type of food and the way that they are selling.

There are several questions that are asked. I would like to congratulate his colleagues for having their own assessment. But I must say to Mr Peh that that is more for local competition. Most probably, everybody knows the time, and so forth. Whereas as far as ENV is concerned, we assess over the whole year. If I am not mistaken, Mr Peh also suggested that there should be a category "P" and "F". Sir, it was a remarkable coincidence that when we embarked on our scheme, the County of LA was also having the same grading system. They extended this system to the City of Los Angeles. Nevertheless, I will ask my officials to look into Mr Peh's suggestion.

The Chairman: Order. There is still another amendment, Mr Sidek. Do you need some more time?

Encik Sidek bin Saniff: I have one more answer.

The Chairman: Can you finish it quickly?

Encik Sidek bin Saniff: Let me assure Mr Ang Mong Seng that we have eight waste collection companies, five from overseas, and three locally, including Semac Private Limited. We are now looking into the next exercise. As of now, we just have reached the Tenders Board level. We will finalise it and give him the answer in another 10 days' time.

Mr Heng Chiang Meng: Sir, I thank the Minister and his Senior Minister of State for their replies and beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), Mr Kenneth Chen.

Mr Kenneth Chen Koon Lap: Sir, I beg to move,

That the sum to be allocated for Head M of the Main Estimates be reduced by $10 in respect of Code MC 1500.

Sir, year after year, I have spoken on this subject. But unfortunately, the dengue fever cases are always on the increase. Once again, I would be brief. I wonder whether we should accept this because I have been assured that the Ministry has done its best and this increase is a world phenomenon. I would like to make two points. One of the more effective ways to reduce the breeding activities is by fogging. Nowadays, the Ministry only does it when there is a complaint. Can I ask the Ministry whether it can have a fixed schedule to do it regularly?

The second point I would like to make is that the increase in dengue cases reported in Singapore is mainly in the HDB estates nowadays and it seems that the trend is going upwards. I understand that the Town Council of Marine Parade is working very closely with the Environment Ministry and they have achieved some success. Does the Ministry have a plan to involve all the town councils in Singapore so that they can benefit from this close cooperation? I hope that, next year, I do not have to bring up this subject again.

Encik Sidek bin Saniff: Sir, I will make it short. We will most certainly take up Mr Kenneth Chen's suggestion. We will have a more coordinated approach with the town councils on dengue control in the town council estates. In fact, there is already a standing arrangement where the town council officers are invited to join in on inspections or ground surveillance carried out by officers in my Ministry. During this joint inspection, my officers will show the town council officers where to look for potential breeding grounds and, in the process, train them on vector control.

Sir, my Ministry will also work with the Contractors' Association and the professional bodies to get them to pay close attention to housekeeping in the construction worksites and to consider features in their design that will not unwittingly create potential breeding places. We will also upgrade the pest control industry so that they can help us by being more effective in their vector control work. Most importantly, we will continue to get the community behind us to give support and help us eradicate the Aedes mosquitoes.

Sir, greater attention is also given to boost research in vector control. We are working closely with the tertiary institutions to better understand the diseases and vector. My Ministry will also continue to invite world renowned scientists to review and discuss with our professional staff the strategies that we are adopting.

Sir, the long-term success of dengue prevention and control demands the full support of every one in the community.

The Chairman: Order. "Guillotine" time.

Mr Kenneth Chen Koon Lap: I wish to thank the Senior Minister of State's assurance. I hope we can sleep better. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $348,608,210 for Head M ordered to stand part of the Main Estimates.

The sum of $976,441,200 for Head M ordered to stand part of the Development Estimates.

Head J -

The Chairman: Head J - Ministry of Community Development. Amendment No. (1), Dr Vasoo.

Dr S. Vasoo (Tanjong Pagar): Sir, I beg to move,

That the total sum to be allocated for Head J of the Main Estimates be reduced by $100.

Sir, at the outset, I would like to state that the Ministry of Community Development has been given less budget than other Ministries. I hope that the Minister for Finance can be persuaded next year to allocate more budget to the Ministry so that it could carry out more programmes in the people care sector. This is very important because, in the new millennium, we will be meeting new challenges related to the dual career families, the aging population and the immediate concern is the problems of the older retrenched workers. So I hope that my parliamentary colleagues will be able to join me to persuade the Ministry of Finance to allocate more funds to the Ministry of Community Development.

Sir, may I take the two cuts?

The Chairman: Yes, carry on.

Dr Vasoo: Sir, it is time to set up a central body to mobilise more volunteer manpower to be involved in our social and welfare service organisations. Such a central body can help to coordinate, inform and promote volunteerism in Singapore, especially to meet future demands for volunteers and to help run many social programmes in the neighbourhood of various housing estates.

Sir, as you know, the profiles of our neighbourhood are changing. Some are ageing and there are mobility and transitions in these neighbourhoods. We need to examine and study them in greater detail to see what we can do to respond to the new service needs in these areas and the types of programmes that we can get people to organise and tackle them. As you know, Sir, your neighbourhood is also ageing as well as mine. It is very important that we appreciate and understand this so that we will be able to persuade more people to join in the volunteer work for the care of the people sector.

Our volunteer participation, at this moment, is only 1:10. We should try to increase this participation level to at least 2:10 in the next five years. In many advanced countries, the participation rate is about 3:10. So we have a long way to go. A central body to mobilise people of various social, ethnic and religious backgrounds to volunteer helps to achieve a few objectives. First, it promotes social integration and prevents social division. This is very important in the context of Singapore. We are living in a multi-racial society. We have different social classes living in different housing estates, and therefore it is very important that we examine this issue very carefully and see how we can manage these challenges. Failing to do this may have unintended consequences in terms of social division, tensions and other related problems that we may meet. 5.00 pm

I suggest that the establishment of a central body, where we can mobilise volunteers to participate, is crucial and important to us. At the same time, this central body is able to involve people and strengthen the bonds among people living in the various neighbourhoods. People bonding is critical and therefore we should try, through this central body, to enhance it.

We can encourage self-help and community problem-solving. I see we are always being accused that by providing funding support to the people care sector, we are moving towards welfarism. I do not think so. By encouraging people to play a role to organise themselves, to participate in community problem-solving, in fact, helps prevent social problems from arising. I feel prevention is better than cure and I hope that we all believe in it, and if we believe in it, we should deploy resources to the very area that we can build participation of people to be involved in building a caring community.

In short, by having such a central body, it will reduce human barriers and human barriers can be broken down by encouraging more people to volunteer and help one another. And this is what we want of Singapore and I hope that we can help to promote it.

There are many calls by voluntary organisations for the establishment of such a central body because at the moment the mobilisation and recruitment of volunteers, and the information to people about where to volunteer are very much segmented. The need for a central body is very crucial and important in trying to get more people to be involved in the people care sector. When we do this, in the long run, we will be able to promote the social help of our community and we would be able to enhance more effective problem-solving in the various neighbourhoods of our housing estates.

The second issue is related to the grants to voluntary organisations. Many requests have been made to the Government to review grants to voluntary welfare organisations. The appeals are loud and clear and I am sure many of you have heard this in the course of your work with the various voluntary bodies in your own constituency. We should send a message to the Ministry of Finance to see whether more funds could be allocated to this aspect of work. I am afraid that it has not been heard for some time and I hope that this time round, the Government will hear and accede to the appeals. We cannot expect voluntary organisations to do more without additional financial grants. To do more they will, if they are persuaded, encouraged, but you cannot do anything without funding and other related support, both capital and operational costs. And I feel this is essential if you are going to encourage more voluntary organisations to be formed and to take an active interest in community problem-solving.

More time is spent by volunteers and staff on fund-raising and by doing so at the sacrifice of managing the service delivery of organisations and be able to think ahead on how to respond more effectively. Although they may be able to know the new problems, they are unable to respond as quickly as possible because of the limitation of funds. At times, the efficient running of the organisations is sacrificed at the expense of spending a lot of time on fund-raising, which is necessary. But too much effort spent on fund-raising during a very competitive period means that there is less time for people who manage organisations to plan ahead in terms of what needs to be done.

The fundamental question that we should ask is: do we want more voluntary welfare organisations to be established and to take on additional functions? If it is positive towards this question, then the answer is how do we go about to enable them to take on additional responsibilities? At this juncture, the Ministry of Health wants these organisations to do more with the new health care programmes for the elderly. The Ministry of Home Affairs, on the other hand, has started programmes of neighbourhood policing and community focus programmes. This would also require the mobilisation of help from various social organisations, and this is also demanding. Finally, the Ministry of Community Development is moving towards more neighbourhood care and programmes. This will also require the participation and efforts of many social and voluntary organisations.

I must say that we need to examine this question of providing grants to voluntary organisations more seriously. I would like to state that it is no fun not to be given more funds, and yet asked to do more by Government. I state that fund raising is trying, competitive and time-consuming and I hope that the Deputy Prime Minister would be able to persuade the Ministry of Finance to release more funds to the people care sector because we could be more proactive and be able to meet the needs of the families, the aging population and the older unskilled workers that were retrenched.

We want our voluntary organisations to be viable and responsive to the emerging needs of the neighbourhood. I am sure you all agree with me that this is the thrust that we should take. It is necessary to revise the funding formula for government grants because the Ministry of Health has a different formula. The Ministry of Community Development gives a different funding formula to the Community Development Councils and it gives another funding formula to the voluntary sector. There are a number of funding formulas. But, none of these help the voluntary organisations at this juncture. We should look at the revision of the funding formula seriously. By doing so, we can generate more enthusiasm for the voluntary organisations to improve and extend their services. I suggest that a 75% grant for programme cost would be reasonable and realistic.

In granting more support to the social and voluntary organisations, we can prevent social divide amongst various ethnic groups and the community. We can reduce ethnic tensions from surfacing in future when we have more voluntary welfare organisations to mediate and solve problems faced by various disadvantaged groups. I foresee this can be a serious issue that we should avoid. There are other new issues and challenges and we do not want to have a wider social divide in the community in our society. And therefore, the support to voluntary organisations would be useful and important. Social abrasions can be reduced with some generosity from the Government. We should not be just seen as taking, but also giving where and when necessary. This should be the thrust, both giving and taking, and it is essential. I am sure through this process, we will be able to build a more cohesive and progressive community.

Mr Ahmad Mohd Magad (Pasir Ris): Sir, the point that I wish to actually speak about has, in fact, been advocated by the MP for Tanjong Pagar, Dr S Vasoo, and that is the creation of a centralised body to promote volunteerism. It is a recognised fact that in spite of vigorous upliftment efforts by the Government and the respective ethnic communities in Singapore, there would always be people who have difficulty to cope. I believe it is therefore important that we cast the net wider to help the less fortunate improve themselves. This is especially important as we continue to push towards a knowledge-based economy. There would be emerging social problems, contributed primarily by structural unemployment. If these problems are not properly identified and strategies carried out at an advanced stage, these problems could multiply, sap our resources and limit our capacity for further progress.

I am glad that Singapore 21 was launched to cast new ideals for the 21st Century Singapore, consistent with Prime Minister Goh's desire to have all Singaporeans join hands to make Singapore our best home. To make his vision a reality, I believe that a strong spirit of volunteerism must also prevail, and what is more important is that it must transcend good and difficult economic times. The strong and the successful must be prepared to come forward to assist the weak and the less fortunate. Beyond Singapore 21, we need to also ensure that there is always a dedicated pool of volunteers who are committed to the cause of the community and who will readily be around, no matter what the economic conditions may be.

Therefore, I would like to, once again, reiterate and echo what Dr Vasoo had earlier on advocated, that is, the formation of a centralised body, who could devise schemes to build, encourage and support a strong volunteer movement. This body's primary objective should be to promote and inculcate the spirit of volunteerism that is resilient and that will complement Government's and other civic organisations' effort so as to develop a more cohesive and gracious society in 21st Singapore.

Dr Michael Lim Chun Leng: Sir, the range of social and welfare services provided by many well meaning voluntary welfare organisations is commendable. The allocation of these resources is currently performed by the Ministry of Community Development. The question we have to ask ourselves is whether the availability and the demand matches. The question is all the more important as it is more difficult to get funding in this current economic climate. Are we allocating scarce resources efficiently? I am of the view that this is not always so.

Look at the Before-and-After-School-Care Centres (BASC) that have closed down, day care centres that are underutilised and the long queues and waiting period for childcare centres, and one will begin to understand why such resources are not optimally allocated. It is the norm that the GRO advisors get a letter from MCD informing them that they have decided to set up a certain service at a location without asking the advisor whether the service is required and whether the location is appropriate. It is frustrating to VWOs that having spent considerable effort raising funds, time and energy developing the centre, only to find that the service is not required. It is not only a waste of resources but also very disheartening to VWOs.

It is time for MCD to work more closely with the GROs. The advisor of the GROs will be familiar with the needs of the people in his estate and will be able to advise on not only the type of service required, but also the quantity of services required and where the optimal site will be. I would urge the Minister to look at the way that such resources are allocated and perhaps work more closely with the advisors of the GROs to have optimal allocation of these scarce resources.

5.15 pm

Mr Sin Boon Ann: Sir, our Government has always believed in the principle that members of the community must play a part in helping to care for the less fortunate members of our society. This is to ensure that the social problems which we encounter are not conveniently passed on to the State. This would include, for instance, caring for the elderly citizens and those who are handicapped. In adopting this principle of co-sharing the responsibility, the Government has had, amongst other things, to work with voluntary welfare organisations in funding some of these programmes. Customarily, our Government would match the sum of money raised by these voluntary welfare organisations to increase the resource pool available for the social programmes.

Towards this end, therefore, many VWOs are engaged in fund raising exercises in order to increase the resources available to fund the programmes. The NCSS, which is the umbrella organisation covering many of these VWOs in Singapore, is one of the largest recipients of public donations and Government funding for social programmes. One has no doubt that the money that has gone into the NCSS is well used and well managed by the NCSS to assist its member organisations in its various activities. The sums received by many voluntary welfare organisations are not small. However, following the recent episode wherein a member of the public had wrongly accused the CEO of NKF of misusing the Foundation's funds, many Singaporeans have indeed begun to ask whether there are proper guidelines as to how the money that is given by members of the public and the Government should be spent, and whether there is an audit system in place to ensure that these guidelines are adhered to. These guidelines must surely be based on the principles of achieving greater effectiveness and efficiency for the VWOs, so that every dollar given can be stretched longer. If there is assurance that taxpayers' money and donations by members of the public would be made to good use, I am sure that it would serve as an encouragement for many more people to put in money into the organisation for a useful and proper cause.

On the other hand, if it was discovered that the money donated to an organisation is not very well managed, then the organisation concerned should change its principal officers or suffer the consequence of not having any public support for its activities. MCD should therefore perform this watchdog function in ensuring that the money granted to these organisations would be put to proper use.

I would like to ask the Minister for Community Development whether the Ministry would consider implementing a system of audit control on all voluntary welfare organisations to ensure that these organisations are administered in accordance with the guidelines and standards set by the Ministry, and that the grants given by the Government and donations by members of the public are properly used. 5.30 pm

Mr Low Thia Khiang: (In Mandarin): Sir, social workers work quietly and spontaneously, sacrificing their time to serve the unfortunate people in society and bring them warmth. Their spirit is worthy of our emulation. But social workers in our society have not been given due social status, and the Government's recognition for their contributions is also very limited. Of course, social workers do not expect the Government to give them any benefit, neither do they work as volunteers for the so-called benefits. But I feel strongly that it is unfair to these noble voluntary workers not to be given the due recognition from the authority.

In comparison, grassroots leaders enjoy free parking facilities in their constituency, whereas social workers do not get such concession. Sometimes, because of their work commitments, they are fined because the validity of their coupons has expired. They work for free, and yet they have to incur out-of-pocket expenses. The Government has given money for the construction of the Grassroots' Club, so that grassroots leaders can have the prestige of having an exclusive club of their own. On the other hand, the Government does not even give a thought to provide similar facilities to the voluntary social workers, so that they can mingle together and exchange experiences and information and strengthen their determination to serve the society.

I would suggest that the Ministry of Community Development consider building a similar club for social workers. Why is there such a difference in treatment? Is it because the grassroots organisations are serving the interest of the PAP and are therefore given these special privileges?

Mdm Claire Chiang See Ngoh (Nominated Member): Sir, in my maiden speech in November 1997, I called for the need to give greater recognition to professional social workers to enhance their image and standing, and to invest resources at the tertiary level to develop competent professional social workers to meet the long-term need of the social service sector.

In the past year, a number of initiatives were undertaken which gave the sector a boost. Inviting social workers to have tea with the President at the Istana was a huge success. The Outstanding Social Worker award was yet another recognition. Giving scholarships to students studying social work was a great incentive to attract more students into the field.

Please allow me, Sir, to highlight my continued concerns on skills development and professionalising the service delivery. First, what is the progress in reviewing the status recognition, remuneration and benefits of social workers?

Second, the shortage of qualified social workers is still a problem. The Family Court, for example, currently has nine counsellors. There are six more vacancies to be filled, but there are no takers. I was told that it was difficult to find suitable counsellors. This seems to be a common story for most VWOs and the inadequacy became more apparent when specialised care is needed, like speech therapists for the mentally challenged, specialised treatment programme for the autistic, trained placement officers to help integrate the disabled in employment situations, trained social workers for rehabilitating men in jail who are coping with violent behaviour. The list goes on. My question to the Minister is: has the Ministry carried out an in-depth study to address the manpower shortage of the social service industry as a whole?

My third concern is skills development, an ongoing concern due to the increasing need for a continuum of services to attend to the problems of the young, the youths, the elderly and the disabled. Could the Minister inform the House what is the progress in developing the formalised and specialised training for social workers as well as volunteers? Is there a broadening of post-graduate social work training modules at the polytechnic and university levels?

Last, having nine months more to go before the new millennium comes, would the Ministry seriously consider setting up Social Services 21 and identify urgent service gaps whereby grassroots social service professionals could make recommendations and propose an integrated programme for the sector? This could help minimse some of the frustrations felt by VWOs, earlier mentioned by Dr Michael Lim.

Sir, I believe that social work development is a critical component in our overall perspective of managing and enhancing social cohesion in Singapore. As we invest huge resources in training and retraining of workers in the manufacturing sector, we must continue to also adopt a development perspective by investing resources on short-term strategies and long-term programmes in professionalising the social services delivery. I hereby support Dr Vasoo's call for more allocation for MCD.

Mrs Yu-Foo Yee Shoon (Bukit Timah): (In Mandarin): Sir, as we step into the new millennium, we are likely to face the impact of a new economic system. With globalisation, regionalisation and the challenges of the new information technology, how are we going to enhance the social cohesion of our multi-racial society? What type of changes can be expected in our family lives? How do we sustain and pass on our traditional values from generation to generation?

No doubt our social and legal structures are very good. However, we need to instill some kind of catalyst in our families and society to strengthen human bonding, ie, to make our families and society more humane, and also to strengthen family ties and friendship among our people.

When we participate in nation building, it is the duty of every one of us, first, to keep our families in good order. Every one of us should play a part in it. There is a saying in Hainanese to the effect that if you have money, you contribute money. If you have strength, you contribute your strength. If you have no money and no strength, you just donate aerated water. In the good old days, provision shop owners may not have the money to donate or time to spare, but they had plenty of soft drinks or "aerated water", as it was then called.

We often hear our friends complain that the CDC has not done enough, or that the voluntary organisations have not done enough. It is easy to point an accusing finger at others. However, when we ask our friends to take part in the activities of these organisations, they would say, "I am very busy. I have to work overtime. I have to look after my children. I have to go for training, etc." But if we look at it seriously, if everyone can contribute, say, one or two hours in a week, or at least in a month, to participate in social work, it will make a lot of difference. In other words, since they can afford to play 9-hole or 18-hole of golf every week, borrow so many video tapes to watch, or watch so many TV programmes, I am quite sure they can arrange their time and set aside a few hours to do social work.

First, the family as the fundamental building block of society. Because of very busy work schedule or other commitments, our parents, brothers and sisters may not have met even once in a year. So we can start, first of all, from the family activities. Whenever there is a function or some celebration, we have to eat. So, why do we not take the opportunity to eat together? We can also observe the various religious or cultural rites and rituals. If we are not restricted by our religious beliefs, we can participate in activities in the churches, mosques or temples. We can also participate in the various cultural activities. We can also visit our relatives during the Chinese New Year period. Nowadays, we are quite used to celebrating the various festivals together.

Second, participation in community organisations. Now, we have CCCs, RCs, CCMC, Senior Citizens' Clubs, Youth Groups, Women's Group and all that. We have the whole set up. The important thing is whether or not we have the time to participate in their activities.

Another point that I wish to raise is that when we participate, of course, it is best if we can do it on a voluntary basis. But we can also set up a points system with the help of the computer. In Japan nowadays, some townships are already adopting the points systems where the organisers would record the number of hours a person participates in their activities. These points would be accumulated to give him credit for any service that he may require in future. For example, if he needs to go to a day-care centre, he will enjoy priority or concessions if he has accumulated a certain number of points through his previous voluntary services rendered. This will serve as a form of reward for his past contributions. Of course, the reward is not the ultimate objective, but a sort of encouragement or incentive. Perhaps, the Ministry of Community Development could consider adopting this points system to encourage and reward the voluntary welfare officers, so that social service will become a norm rather than an exception in our society.

Nowadays, we are all pursuing the 5 Cs. But we should also pursue the 6th C, which is community work. In the old days when we had the family planning campaign, there were advertisements with catch-phrases : "Boy or girl, two is enough" or "More children less to share". In our society now, everybody wants to live a good life. Maybe the Ministry of Community Development should start a "Family Life Planning" campaign along this line. We should reach out to the people. We should teach our people how to live harmoniously with their spouses, how to live together with their families and neighbours, and how to enjoy the company of their friends of different races.

Very often, we criticise our younger people and tell them "You must not do this, you must do that." But, in fact, we are not doing what we preach. We should set an example ourselves. The Japanese say, "You are a mirror to your children". So we have to teach by example.

The other day Dr Aline Wong was talking about AIDS. In America there are certain sects which say that they can have casual sex so long as they use condoms. But I tend to agree with Mr Bernard Chen. He said that we must set the example ourselves. AIDS can be prevented so long as you do not have casual sex. We must inculcate in our youths the right values and moral obligations to do what is right and to avoid doing what is wrong.

I hope that when the year 2000 arrives, we can be fully prepared, on the one hand, to enjoy the economic benefits brought about by high technology and, on the other hand, provide more comprehensive "Life Education" and "Family Life Planning" to our people, so that everyone will become active participants in our family and social activities; everyone will optimise our "human bonding" to make Singapore a more humane, friendly and compassionate society.

Mr Ang Mong Seng: (In Mandarin): Sir, in his Chinese New Year message, Prime Minister Goh mentioned the importance of community bonding. In this current economic recession, the people of Singapore have demonstrated the importance of community bonding as they go along with the cost-cutting package to save our economy. In one heart, they are prepared to make sacrifices for the country.

Community bonding does not come by itself. It has to be cultivated through education and nurtured through active participation in grassroots activities.

On how to enhance our community bonding, I have the following suggestions:

(1) In the various constituencies in Singapore, we have different levels of grassroots organisations. I do not think many people would know how many grassroots organisations there are in our constituencies. Nowadays, we have often heard people talking about their aspirations to have 5Cs or 6Cs in life. . In my constituency there are 12Cs - the CCC, CCMC, RC, WEC, YEC, CSC, CDEC, CDC, SCEC, MAEC, IAEC and NC. Yes, we have 12 different kinds of grassroots organisations. These organisations are actively organising all sorts of activities to bond our people together and in the process build up our social cohesion. When I speak to our young people about kampong spirit, they find it to be a very abstract concept. They do not understand the meaning of kampong spirit. When I asked them whether they have the spirit of solidarity, they understand. So we must find some different ways to educate our young generation. If we can bring all these grassroots organisations together to build a "Unity Circle", it will help to further enhance our community bonding. We can also build our national bonding. If the People's Association can give some incentives or awards, like what we have been doing in companies and work places to encourage our workers to enhance their productivity and efficiency. I hope the Minister will consider some kind of incentive schemes for such activities.

(2) When the National Day Parade is held at the National Stadium, because of the limited number of seats, we can accommodate only a small portion of the people in Singapore. Although we have direct TV telecast, it is like watching a football match on TV. The viewers cannot feel the atmosphere in front of the television set. National Day is a most important day in our country's calendar. To enable all our people to take part and to inculcate patriotism in them, I suggest that all the constituencies in Singapore organise their own National Day Parade or at least a National Day Observance Ceremony, so that more people can come forward and be part of the celebration of our National Day.

(3) In the past, at our National Day Parades, apart from the programme at the parade ground, there were also processions of uniformed groups marching into the city and to the various housing estates. This will enable our people to feel the festivity of our National Day. I hope in future National Day Parades, there could be displays of some of our defence facilities and weapons, to strengthen our people's confidence in our defence capabilities.

The Chairman: Dr Neo, could you take your two topics "Role for the future" and "Eldercare" together? The Minister wants to reply after the topic "Eldercare".

Dr Lily Neo (Kreta Ayer-Tanglin): Caring for the elderly in Singapore needs a new approach if we are to cater for the fast-increasing numbers of a very expectant group of senior citizens. Sir, the emergence of this new group and a very different trend in requirements will dawn on us very fast indeed. Only through good foresight and fast planning will the Ministry of Community Development (MCD) stay relevant in the new era.

Sir, the MCD should serve as a centralised body in Singapore to effect a coordinated plan towards care of the generally well elderly. Care of the elderly is no more a question of simply providing necessities like food and lodging. Care of the elderly is about quality of life provided through a holistic approach or total care concept of catering for the physical, social and mental aspects of life.

The majority of our elderly, 95% of them in fact, are ambulant and in reasonably good health. Only 5% of them require institutional care either because they are disabled from illnesses, or because they are too frail. Our aim, therefore, is to try and keep the 95% of elderly who are "relatively well" remain happy and healthy. Programmes need to be revamped to achieve these targets. The success of these new trends of care will not only make our elderly happier and healthier, but they will also:

(1) reduce the burden on many family members who would otherwise have to look after the elderly themselves; and

(2) benefit the nation through reduction on use of high cost care in the healthcare institutions.

The Ministry of Community Development should just focus on the ambulant and relatively well elderly and leave the dependent elderly to the Ministry of Health. Sir, I believe that MCD should go this way in order to stay even more relevant and cope with the changing social trends and changing demographic profile in the future.

I would like now to go on to my next cut.

Sir, there is an increase in the life expectancy of our people now to about 80 years in age. The majority of elderly will now have about 20 years more to live after retirement. This is very much the resultant effect of modern science and technology. Sir, to most of the elderly folk, the quality of life rather than longevity becomes the issue that matters to them. It will be good, therefore, to revamp our system so as to enable quality living for our elderly. The Ministry of Community Development could aim towards promotion of quality lifestyles so that as many elderly can stay happy and healthy in the community for as long as possible.

I would like to propose that we set certain broad guidelines to achieve our objective:

(1) Promote positive attitudes towards ageing through public education targeting a change of mindset in both the young and the old in our society.

(2) Help the elderly to be engaged within the community for as long as possible. This can be achieved by (a) getting them involved in the neighbourhood CARE (Centres of Activity for Retired and Elderly); (b) encouraging a buddy-system type of caring for each other; (c) involving them in new hobbies, and (d) getting the various voluntary care groups coordinated in their efforts. Ideally, every constituency should have at least one of such centre.

(3) Limit and delay the onset of disabilities in old age, which more often than not are due to diseases. It is important to have healthy lifestyles and preventive healthcare. Watch their daily food intake, ensure them daily exercises, and give them enough mental stimulation. All these, together with early detection and treatment of diseases, will dictate the numbers of the sick dependent elderly in the future.

(4) Provide financial, personnel and logistical support to achieve our aim. The MCD should support grassroots organisations, non-profit organisations and other self-help groups run CARE. A lot of people may have the interest but they need the know-how and the financial help. Providing care for the elderly can be rather expensive because the elderly frequently do not have enough funds when they retire. The elderly, as a socio-economic group, also do not get much in terms of priority for their well-being and general care.

(5) Provide elderly-friendly features in their habitat to enable them to stay for as long as possible in their own homes. Here, the MCD can help by providing the information, the advice, and the expertise to those who need the help.

5.45 pm

Sir, it is important that we succeed in this area of eldercare. It will be a big task because we are expecting to have about one million sixty-plus citizens by the year 2030. The MCD would have succeeded in this area if the quality of life amongst the elderly has been improved and the number of dependent elderly has been reduced. The rewards for society from the multiple effects of good health, quality lifestyle, and less expensive healthcare will be enormously significant. Sir, I urge the MCD to prioritise this area and make good eldercare a success.

Sir, could I move on to my last cut?

The Chairman: Yes.

Dr Lily Neo: Sir, for six years, Mr Lee Tan Lim (not his real name), aged 96, faced a wall of silence from his son, his daughter-in-law and their three children. For six years, his wife was slapped on the wrists each time she failed to follow her daughter-in-law's orders. They fended for themselves with money saved from "hong bao" given by their daughters and friends. They bought their own food and paid for their medical expenses with money they have saved. Their son and his family abused this elderly couple in both emotional and physical terms.

The immediate response from most people would probably be that the aforesaid is a rare and unusual situation. Is it really that rare and unusual though? Statistics from Subordinate Courts show that one out of every 34 police protection order (PPO) applications filed here between 1st May 1997 and 30th June 1998 is from a parent. It works out to be 86 cases. According to Tsao Foundation's Hua Mei Mobile Clinic, a non-profit organisation devoted to the care and well-being of the elderly, they see about 10% of "elderly abuse" patients in their practice. Research has found that almost one out of 26 people aged 60 and above in the United States is an abused person. Studies in Japan show that those most vulnerable to abuse are in the over-75 age group, and the most common type of abuse is neglect.

It has been said that "elderly abuse" is a silent tragedy in Singapore because most people shy away from making their problems known. In Singapore, "elderly abuse" is definitely under-reported. It is Asian culture to cover up family problems, to avoid being stigmatised and to spare themselves or their families from public embarrassment. The other reason is that the present generation of elderly is also a "hardy breed" and some do not see such behaviour as abuse. Sir, "elderly abuse" can be physical, with injuries; psychological, with anguish and emotional trauma or material, with neglect of the elderly who are left with no comforts, funds or resources. Tell-tale signs of abuse would be poor hygiene, malnutrition, dehydration, unexpected injuries, depression, physical as well as social isolation.

Sir, we must not treat "elderly abuse" as a non-existent issue. We need a national effort in tackling this problem. The law, Part VII of the Women's Charter, has been amended in 1997 to address the relevant provisions for the protection of abused parents. The Ministry of Community Development could spearhead the next move by:

(1) making concrete plans and creating a body to promote public awareness of "elderly abuse"; and

(2) coordinating the activities of various organisations, including hospitals, voluntary organisations, social and legal service providers, as well as programme and research resource centres to facilitate assistance to the abused elderly.

Sir, it is of paramount importance that a civilised country like ours does not turn a blind eye to this social ill.

Dr Ho Tat Kin (Bishan-Toa Payoh): Sir, according to the United Nations, the number of people aged over 60 will increase from the present 550 million, or 10% of the world population, to 1.2 billion, or 14% in 2025. Singapore society is also rapidly aging. Projections are that our proportion of the aged, defined as persons aged 60 and above, will increase from the current 10% to 26.1% in 2030, or one in every four persons. This makes Singapore the fastest aging society in Asia, after Japan.

The effects of this demographic change will be pervasive. The needs of the elderly in the areas of the employment, financial security, healthcare, community support and housing will be all the more accentuated and urgent. The aging population will not be an issue which just concerns our senior citizens and the families but every aspect of our society. As senior citizens grow to be an even larger portion of our population, we must ensure that senior citizens are able to lead meaningful and fulfilling life in their own age. Family ties must be strengthened so that this becomes the primary source of support for senior citizens.

We must ensure that senior citizens are able to live productive and active life so that they continue to be an integral and contributing part of society. Employers must recognise that senior citizens can be as productive as younger workers can, particularly in a knowledge-based economy. The retail industry must make available accessories and implements that can help the elderly remain independent. Developers and town planners must make home and public facilities elderly-friendly. Together, all sectors of our society must prepare for an aging population.

Sir, the Government has realised the need to prepare for the challenges of an aging population. In October it set up a high-powered Inter-Ministerial Committee on the Aging Population. May I ask the Minister what progress has been made so far? In preparing the master plan of service for the elderly, I hope the Government can take into consideration the different needs of different groups of senior citizens. The needs of the senior citizens in the next millennium will be very different from those of the senior citizens that we know today. They will be healthier, better educated with bigger and buying power because of CPF savings and investments.

I hope the Government in its deliberations does not just concentrate on material well-being but also consider the spiritual and intellectual well-being. Keeping busy, both physically and mentally, is important for senior citizens' well-being. There should be opportunities for many of them to go back to school to study subjects of interest which they could not pursue in their younger days due to the need to earn a living. Along this line of life-long learning, I hope the Government can consider setting up a Senior Citizens University.

Sir, the aged must not be seen as a problem. They present opportunities and challenges and these must be identified and taken up.

Mr Ang Mong Seng: (In Mandarin): Sir, the trend of an aging population in Singapore has already attracted our attention. By year 2030, 20% of our population will be above the age of 60. Of course, we cannot wait until it happens before we do our preparation work. We must immediately make all plans to cater for this situation. Recently we have set up a Committee to look after the aged. Although this is a new organisation, I hope that when the Minister formulates any policy, he would consult the grassroots organisations of the various constituencies and collect more feedback from the ground. Only then will the policies they formulate be more relevant.

When people grow older, their mobility will become more and more difficult. For those who live far away from the community centres, they will have problems getting there. However, in our housing estates, we have one Residents' Committee in every 10 blocks. So can I suggest that the MCD work out some plans with the Ministry of National Development to set up a Senior Citizens' Corner or Senior Citizens' Club near every RC centre, so that our RC members can look after the senior citizens and encourage them to participate in the activities of the RC. In this way, we can prevent the old folks from being cut off from the community.

Presently, 85% of the population live in HDB estates. Recently, I heard from the Minister for National Development that he was going to reduce the prices for studio apartments for senior citizens. That is a piece of good news. But even then, we cannot ensure that every senior citizen could afford to buy this studio apartment. While we are considering the problems of the senior citizens, the Government should also study the purchasing power of the senior citizens for these studio apartments. Perhaps some of these senior citizens could not afford to buy the studio apartments. Will there be other ways to help them purchase these apartments?

Now, we are always talking about moving towards a knowledge economy where the emphasis is on high-tech industries. We all know that when the senior citizens get older, their memory is not so good and they may not be able to react so quickly to the changing technology. So on the one hand, we want to develop high technology, but on the other hand, we must also consider that with our aging population, more and more people may have problems coping with advanced technology. I think we have to strike a balance there.

When we are studying the problems of our senior citizens, one important point is their mental health. There are many things which senior citizens could do but younger people cannot. So when we are setting the rules, we should also consult the senior citizens, because if we leave it all to the young people to plan the activities for the senior citizens, it may not be appropriate. Of course, we have just started this Committee to study the problems of the elderly. I hope that when we are planning future activities, we should have more consultations with our grassroots leaders and the Committee members of the Senior Citizens' Club. Only then, can we come out with better development plans which are relevant to the needs of the elderly.

The Minister for Community Development (Mr Abdullah Tarmugi): Sir, before I reply to the specific Members' questions, let me acquaint the House with how MCD is positioning itself for the future.

Sir, in the past week in this House, several Members have expressed concern about whether we are doing enough to help retrenched workers and their families. Let me assure Members that the Government and the community will help these Singaporeans get back on their feet. The present safety net is adequate and there are many existing schemes offered by MCD, voluntary and community organisations to help retrenched workers and their families who are in financial difficulties. Should the situation worsen and we need more funds, my Ministry will not hesitate to request for supplementary budget. But, Sir, the best approach, as has been mentioned quite often today and in the past week, is to equip them with the necessary skills continually, so that they remain employable and are able to provide for themselves and their families.

Sir, many Members have also noted that we must look beyond the current crisis, to address broader trends and challenges which could unravel our social fabric. My Ministry shares these concerns and has repositioned itself to meet the challenges ahead. 6.00 pm

Complex demographic and socio-economic trends are reshaping our society. We must anticipate and manage the risks that they bring. Instead of dealing with social problems downstream, we must proactively shape the nature of the society we desire upstream. We need to build and accumulate social capital to see us through the ups and downs on our journey to make Singapore "Our Best Home".

But how can we do this? My Ministry will pursue three strategic thrusts to enable each and every Singaporean to contribute to our social capital. We must:

(1) Support and strengthen the traditional roles of the family in care giving and inculcating values in our young;

(2) Anticipate and prepare for an ageing population; and

(3) Build up a dynamic and vibrant people sector.

MCD has restructured itself to provide focus and direction to deal with these new challenges. Let me elaborate.

Strengthening the Family

First, strategic thrust in strengthening the family. Society cannot be strong if the family is weak. Today, the Singapore family, though basically healthy, is under increasing pressure. You are familiar with the trends - dual income families, increasing nuclearisation of families, smaller families, rising divorce rates, rising juvenile delinquency. Parents do not spend enough time with their children. The extended family is in retreat. This has led to an erosion of the traditional role of parents and the extended family in shaping the character and values of their children.

MCD is taking a proactive and developmental approach to develop programmes to inculcate family values and provide social infrastructure to support families. Our approach is two-fold, developing our "heartware" through family life education and building up the "community infrastructure".

Family life education is three-pronged: helping couples strengthen their marriages, imparting parenting skills and inculcating family values. And MCD's family life programmes will equip couples, parents and the young with the values and the skills for healthy family living.

Busy families need strong community support to help them manage the many competing demands and pressures of urban life. While the family has primary responsibility for care-giving, it should have access to good and affordable care options for their children.

Last year, my Ministry reviewed its child care policy. We will develop more child care centres, improve the standards of programmes and manpower and provide more help to low-income families.

This year, Sir, my Ministry will review Family Service Centres and Before-and-After School Care Centres to enhance their effectiveness and increase supply.

Anticipating the Ageing Population

Let me now move on to our second strategic thrust, which is to prepare for the unprecedented ageing of our society. With the number of older Singaporeans set to triple by 2030, the baby boom of the 1950s and 1960s will now become the seniors' boom. We must plan ahead to minimise the potential downsides and even capitalise on the opportunities that an ageing population will bring.

The issues of our ageing population demand focused attention, coordinated action and creative solutions. My Ministry recently formed the Elderly Development Division to provide focus and direction to MCD's role as the lead Government agency on ageing issues.

My Ministry will also review existing programmes for the elderly with a view to developing a five-year services master plan for the years 2001 to 2005. We want to strengthen public education, help the elderly to lead active and fulfilling lives and develop a strong, well coordinated network of community-based services to support the elderly.

At another level, the Inter-Ministerial Committee on the Ageing Population, chaired by Mr Mah Bow Tan, Minister for Communications, with Mr Yeo Cheow Tong and myself as Deputy Chairmen, was formed last October to set national directions, and to ensure a comprehensive and coordinated approach across the public, private and people sectors. MCD's Elderly Development Division will coordinate the implementation of the IMC's recommendations. Developing the People Sector

Let me now come to the third strategic thrust, that of developing the people sector. A vibrant and dynamic people sector is an important pre-requisite for community bonding and nation building. When people come forward to serve and contribute to the community, they develop a sense of belonging, ownership and national identity, in other words, the "social glue" that bonds Singaporeans. My Ministry's new Community and Social Sector Development Division will promote and nurture the growth of the people sector.

A key initiative is to establish a national body to promote volunteerism as a way of life in Singapore. I would elaborate on this later. It will be a promotional and resource centre for Singaporeans and corporations who want to be part of the volunteer movement. It aims to increase the level of volunteerism in all areas - social service, the arts, sports, etc.

We will work with the VWOs and community organisations to identify and implement new social services, improve service delivery, set appropriate standards and provide manpower development and training programmes.

For the people sector to take a quantum leap forward, it has to attract strong and able leaders. Like the private sector and also the public sector, the people sector too must have its share of top talent.

Sir, what I have described are MCD's new initiatives in the area of community development. When Singapore first gained independence, the social challenges facing us were stark - racial tension, communal strife, poverty and unemployment. These problems have largely been addressed. Today, the new social challenges facing us are far more complex and no less consequential.

Members of the House, we must deal with these new challenges as decisively and as wisely as the first generation of Singapore leaders. What I have sketched out for you so far today, is my Ministry's approach to address these challenges. We believe that social capital is accrued by developing socially responsible individuals, building strong, stable families and by fostering a caring and compassionate community. By working together, I am confident that we can achieve these desired outcomes and build a cohesive and resilient society.

If I may now address the specific questions raised by Members. Dr Vasoo and Mr Ahmad Magad asked whether an institution would be formed to promote and develop volunteerism. In October last year, I mooted the proposal for a national body to promote volunteerism as a way of life in Singapore at a seminar organised by the IPS. When I mooted the proposal, I asked for suggestions and feedback on how the setting up of a national organisation could be facilitated. I believe that Mr Ahmad Magad and Dr Vasoo are referring to such an institution when they suggested the creation of a body to work out schemes to encourage volunteerism and inculcate the spirit of volunteerism among Singaporeans.

NCSS conducted a survey in January this year and focused group discussions last month among volunteer youth organisations. Members may be pleased to know that there has been a lot of interest in support of the proposal to have a body to promote volunteerism more widely among Singaporeans. It will be a resource and information centre that will facilitate networking and encourage more people to volunteer by providing information and advice on volunteer opportunities with further consultancy for volunteer initiatives. The centre will provide training and research and develop good volunteer management practices. It will serve both the volunteers and the volunteer user organisations. The body will be volunteer-driven. But the Government will not let it flounder because it will give its support and the resources required, especially to start it off.

Mdm Claire Chiang asked about improving our social service sector. Two events have marked the increasing significant role that social workers are playing. The first was the tea hosted by the President of Singapore at Istana last year, as the Member has mentioned in her speech. The second was the launching of the Outstanding Social Worker Award, singling out those with distinctions in the service to the profession, the community and the public. The Member was also involved in this project.

Training for both professionals and volunteers is important. In the past year, MCD organised specialised training for the sector in the areas of child abuse and juvenile delinquency. These are specialised courses. At another level, the Executive Directors of agencies attended a first ever Directors' seminar of the sector in October last year. Earlier this year, the staff in the social sector also began the post-graduate diploma in social work. These courses were over subscribed. I am told that 133 people vied for the first 50 places in the post-graduate courses and the rest would be trained in subsequent courses. There was training for volunteers, and MCD organised two workshops last year, one in May and another in November, which were jointly organised by IPS and the NCSS. In December last year, MCD, together with NCSS, also launched two handbooks on volunteerism. One is a guide for volunteer coordinators to emphasise guiding principles in good volunteer management. The other is a handbook on motivating and sustaining volunteers.

We will look into ways to professionalise the social service sector and ensure that we get the top people to join the sector so that they can give better service to the public. I was told that in the US, in fact, MBAs join the people sector and they give the kind of quality, push and drive that the people sector requires.

Dr Vasoo asked for more funds. By the way, I would like to thank Dr Vasoo and also Mdm Claire Chiang for their spirited appeal for more funds for my Ministry from the Finance Ministry. I agree with Dr Vasoo that the VWOs should focus more on providing service and looking after the needs of the disadvantaged Singaporeans rather than spend too much time and effort in raising funds. Fund raising by itself is not undesirable, and I am sure the Member would agree, because it could tap on donors who prefer to give to their favourite charities and educate the public on worthy causes to support. It also rallies the community effort and creates a rich civil society.

Fund raising by charities has been affected with the current economic downturn. But it is heartening also that some agencies are still successful in their fund raising efforts by organising novel and creative activities and events.

Sir, the Inter-Ministerial Committee on Health Care for the Elderly has recommended a review of the Government subvention to VWOs. This takes into consideration the growth in social service required because of our rapidly ageing population and the lower ratio of working persons per elderly in the future. My Ministry will be working with the Ministry of Health to follow up on this recommendation. The Members can be assured that we are addressing the funding requirements of our VWOs, and the IMC will also be looking into this issue more comprehensively.

Can I carry on, Sir?

The Chairman: There is one more minute left.

Mr Abdullah Tarmugi: Can I stop here then?

The Chairman: Yes. Do I have the consent of the Members concerned?

Hon. Members indicated assent.

Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House.

Mr Abdullah Tarmugi: Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates of Expenditure for the financial year 1999/2000, and ask leave to sit again tomorrow.

Mr Deputy Speaker: So be it.