HOUSING AND DEVELOPMENT BOARD FLATS

Mr Simon S C Tay asked the Deputy Prime Minister and Minister for Defence why there have been more lapses in his Ministry's financial procedures and accounts, as revealed in the Report of the Auditor-General for the Financial Year 1998/99 (Paper Cmd. 8 of 1999).

Dr Tony Tan Keng Yam: MINDEF has given a detailed account of each of the cases cited in the Auditor-General's Report of 1998/99 during the recent Budget Debate on 14th March 2000.

Just to reiterate, in all the breaches raised by the Auditor-General, there is no loss of funds due to misuse of funds or frauds. All the lapses have been rectified and all funds accounted for.

MINDEF has also taken further measures to ensure that similar lapses do not occur again.

Mr Tay Beng Chuan asked the Minister for National Development if the Housing and Development Board will relax and simplify its policies and rules governing the resale of HDB flats to enhance their market value and make it easier and faster for flat owners with changing needs and circumstances to shift their place of residence between HDB estates or between HDB estates and private residential estates.

Mr Mah Bow Tan: HDB flats are built to meet the housing needs of Singaporean households. They are highly subsidised. Thus, there is a need to have rules and conditions for the purchase and use of these flats to ensure that they are for owner occupation.

At present, the minimum occupation period for new HDB flats and resale flats purchased with the CPF Housing Grant is 5 years, while that for other resale flats is 2.5 years. These rules are intended to prevent rapid churning of HDB flats for speculation purposes. They are not so onerous as to prevent genuine cases of upgrading to take place, whether to a bigger HDB flat or to a private property.

Annex 1

Table 1: Salary System Based on Salary Ranges Salary Points Salary Political Ranges Appointments Staff Grade IV, V MR1 DPM/Minister MR1 Staff Grade III MR2 Minister MR2 Staff Grade II MR3 Minister MR3 Staff Grade I MR4 Minister MR4 Superscale B SR5 Senior Minister of State Superscale C SR6 Minister of State Superscale D SR7 Senior Parliamentary Secretary Superscale E SR8 Parliamentary Secretary Superscale G SR9 Senior Principal Assistant R10 Secretary* Principal Assistant Secretary R11 Assistant Secretary R12 Senior Administrative R13 Assistant Administrative Assistant R14 *:Newly introduced range.

Annex 2

GDP-related Bonus

The GDP-related bonus will directly link the pay of political and statutory appointment holders and senior Administrative Officers to the state of the economy.

The size of the bonus will depend on the real economic growth of the economy. The bonus will be 1 month if the Singapore economy grows by 5% in the calendar year, the mid-point of its estimated long-term growth potential (4 - 6%). It will be 0 month (the minimum) if the economy grows by 2% or less, and 2 months (the maximum) if the economy grows by 8% or more. In between, it will vary linearly with GDP growth.

The intention is to eventually build up this bonus to an average of 3 months, with a range of 0-6 months.

Performance Bonus

Performance bonuses were first introduced for Superscale officers in the Administrative Service in 1989. Since then, they have been extended to timescale Administrative Officers as well.

The performance bonus norms will be raised as follows:

Political and statutory appointment holders and Administrative Officers in Superscale C and above presently receive performance bonuses averaging 4 months of salary. This will be increased to an average of 5 months for those in Salary Range SR6 and above.

Administrative Officers up to Superscale D1 presently receive between 1 - 2 months of performance bonus on average, depending on their grades. This will be increased to an average of between 3 - 4 months.

How many months of performance bonus an officer actually receives will vary from person to person. Those with unsatisfactory performance will receive no bonus at all, while an outstanding officer will receive much more than the average quantum.

Several appointments currently receive fixed bonuses instead of a performance bonus: the President, PM, SM, Chief Justice, Speaker, Chairman PSC, Attorney General and Auditor General. This will continue under the revised framework. Their fixed bonus rate will be set at the average rate for senior officers.

Bonus Pool

Under the bonus pool system, an officer will be paid half his performance bonus for the year immediately. The Government will contribute the other half into a bonus pool. The officer will be entitled to receive the amount in the bonus pool in two equal instalments 12 and 24 months later, provided he continues in Service.

Officers who resign or are dismissed from the Service will not be allowed to withdraw any balance in the pool. However, officers who retire from the Service will be allowed to withdraw the balance.

The bonus pool system will not apply for the President, statutory appointment holders and judicial appointees.

Annex 3

Table 2: Pay Comparison Before and After Salary Revision Current Revised Grade Monthly Annual Ranking Range Monthly Annual Ranking Prime $85,000 $1,699,000 85 -- $85,300 $1,940,000 63 Minister MR3 Max $55,700 $1,422,000 137 Minister $49,800 $1,134,000 239 $49,900 $1,274,000 180 (SG II + 12%) MR3 Min $44,600 $1,138,000 239 MR4 Max $47,400 $1,210,000 206 Minister $37,800 $861,000 491 MR4 Min $37,900 $968,000 367 (SG I) SR5 Max $39,800 $1,016,000 318 Superscale B $28,000 $638,000 929 SR5 Min $28,800 $736,000 699 (Significant Grade) SR9 Max $18,800 $390,000 >1000 Superscale $13,400 $242,000 >1000 SR9 Min $17,500 $363,000 >1000 G Member of $9,100 $137,000 -- $11,900 $176,000 Parliament