USAGE OF MANPOWER IN THE PUBLIC SECTOR (Optimisation

The following Question stood in the name of Mr Tay Beng Chuan -

Mr Tay Beng Chuan: To ask the Minister for Finance (a) whether there is any conscious and concerted effort in the public sector to optimise the use of manpower and other resources and eliminate wastage and inefficiency which will lead to accelerated increases in Government spending; and (b) how will he ensure that the large wage rise for the civil service will not lead to successive increases in Government charges, fees and taxes as in the case of the recent increases in Government hospital charges and university fees, and bearing in mind, Second Minister for Finance's assurance in Parliament, on 25th August 2000, that Government will not have to impose tax increases to pay for the wage rise for the civil service.

Mr Simon Tay: Question No. 9, Sir.

Dr Richard Hu Tsu Tau: Mr Speaker, Sir, the Government's policy has always been to keep the public sector as small as possible, consistent with the need to deliver quality services to the public. This is to allow the private sector to retain the bulk of the nation's resources and serve as the engine of growth.

To this end, there are built-in mechanisms to curb the growth of recurrent Government expenditures. Budgets for existing functions are allowed to increase at less than the GDP growth rate, and Ministries must, therefore, deliver the same services with constant productivity improvements. They must continually improve their efficiency and effectiveness in the use of manpower and other resources.

To ensure good governance, the civil service must retain a fair share of good people. Civil service wages must, therefore, be reviewed from time to time to keep them in line with those of the private sector. In making these adjustments, civil service salaries will always lag, and not lead, their private sector equivalents.

Hospital charges and university fees have to be adjusted upwards periodically not only to reflect rising wage costs but also to provide for increasingly sophisticated medical services and advances in university education.

Both hospital charges and university fees are heavily subsidised and the Government will continue to do so. Patients in C class wards in restructured hospitals are subsidised at a hefty 80%, while those in B2, B2+ and B1 wards are subsidised at 65%, 50% and 20%, respectively.

In our universities, undergraduates pay only about one quarter of actual costs.

Finally, may I reassure Mr Tay that the Government will not raise taxes on account of civil service wage adjustments.