SUPPLEMENTARY SUPPLY (NO. 2) BILL

Order for Second and Third Readings read.

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

The purpose of this Bill is to make provision for additional expenditure of $5.2 billion which was not foreseen at the time of the FY2000 Budget when it was prepared.

Of the additional provision, about $1.9 billion is required by the Ministry of Communications and Information Technology for payment to SingTel and StarHub, to compensate them for potential loss of revenue arising from Government's decision to bring forward the introduction of full market competition in the basic telecommunications sector by two years, from 1st April 2002 to 1st April 2000. The net of tax compensation sum was arrived at using the discounted cash flow approach, which is the mainstream approach used by the financial and investment community to value businesses, to determine the difference in net present value terms for the two telcos under the duopoly and the accelerated liberalisation scenarios. The telcos have agreed to the compensation offers.

The balance of $3.3 billion is required for the Head of Expenditure on Financial Transfers. Of this, $2 billion is for transfer to the Developmental Investment Fund which came into operation on 1st April 2000. The Fund was established to finance investments with developmental objectives so that such outlays would be properly treated as investments and not as straight expenditure, which would be the case if the outlays were funded through the Development Fund.

Another $1 billion is required to fund the first tranche of the CPF Top-Up Scheme, part of the budget surplus sharing package announced by the Prime Minister in his National Day Rally Speech for this year. Under this scheme, Singapore citizens aged 21 and above on 31st December 2000 will, depending on their income levels and NS status, receive top-ups of $500 to $1,700 in their CPF Ordinary Accounts if they have contributed at least $100 as CPF contributions during the qualifying period between 1st January 1998 and 31st December 2000.

The budget surplus sharing package also included a contribution of $300 million to the ElderCare Fund which was established in March this year as an endowment fund for Government funding of the entire range of elderly and continuing care services by voluntary welfare organisations. This contribution will bring Government's contribution to the Fund to $500 million, one-fifth of the targeted amount of $2.5 billion.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time.

Third Reading

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

Question put, and agreed to.

Bill accordingly read a Third time and passed.