ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 2002 TO 31ST MARCH, 2003 (Paper Cmd. 3 of 2002)

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

[Mr Speaker in the Chair]

Head T (cont.) -

Resumption of Debate on Question [18th May, 2002],

"That the total sum to be allocated for Head T of the Main Estimates be reduced by $100." - [Dr Teo Ho Pin].

Question again proposed. 1.05 pm

The Minister for National Development (Mr Mah Bow Tan): Mr Chairman, Sir, my time has been slimmed down considerably, so I will get straight to the point.

On Saturday, Dr Teo Ho Pin raised his concern about promoting family members' desire to stay together. I agree that it is a very laudable objective. That is the reason why HDB gives higher housing grants for couples who want to buy resale flats near their parents. Also, I think he may be aware that in our balloting exercise for new flats in mature estates, we give a higher weightage to these couples so that they have a higher probability of success. So, as a result of these pro-family measures, HDB estimates that around 40% of HDB residents with married children live with the married children, or within the same estate. This is based on the findings of a survey that HDB did a few years ago.

On the question of shorter tenures, I think Dr Michael Lim, as well as Dr Amy Khor, raised the possibility of shorter tenures for HDB flats so as to enhance affordability.

The first point I would like to make on this is that even with 99-year leases, currently HDB flats are already affordable. As Members may recall last Saturday I cited the fact that the typical four-and-five room flat applicants last year needed to use only about 15% of their household incomes for their monthly mortgages. That attests to the affordability of flats currently even on 99-year lease, so there is really no need for us to introduce shorter leases on the basis of affordability. But we do have shorter leases for specific purposes. For example, we have 30-year leases for studio apartments for the elderly. So the question is whether we want to expand this to other flat types.

One of the fundamental objectives of our housing policy is, of course, home ownership. Should we shorten the lease period significantly, as some Members have suggested, this would actually make housing a consumption item, rather than investment. So how different would that then be, for example, from rental housing? Would that not run counter to our objective of home ownership? And, of course, there is also the question of acceptability. Will such short tenured HDB flats be acceptable to members of the public? So these are some of the issues that we would need to consider, if we are going for shorter tenures.

Sir, a few Members have also highlighted the issue of the housing needs of the singles - Mr Ang Mong Seng, Ms Indranee, Dr Michael Lim, among others. Sir, let me remind Members of the House, that public housing is subsidised housing. So the subsidies have to be justified because it promotes some social objectives. And, in this case, the social objectives in question would be the promotion of social cohesion and family values. And that is the reason why public housing comes with many rules and regulations, as some Members have pointed out. We, of course, try to keep such rules down to the minimum. But even then I must admit that the rules are quite bewildering, even for me. But I would like to assure the House that such rules are necessary.

Sir, coming back to the question of housing for singles, let me state upfront that our public housing policy is pro-family in orientation, and this is to support our social objective of promoting family formation and bonding. But, at the same time, we also recognise that single citizens have housing needs, and that they have made valuable contributions to our society and to our economy. And that is the reason why we have reviewed the rules and we have allowed singles, age 35 and above, to buy 3-room resale flats, on their own.

Contrary to Ms Indranee's claim that they are not eligible for subsidised housing, in fact, they are. Singles can apply for a housing grant of $11,000, if they buy a resale flat. And, if they combine with another single to buy a resale flat jointly, the grant is double, it goes up to $22,000.

Why the minimum age of 35? We have to have a cut-off, to be consistent with our pro-family approach. We do not want to inadvertently encourage singles to live away from their parents at too early an age. So we checked with other agencies, and the advice was that marriage rates for singles tend to be much lower after this age, and this is the reason why we chose 35 years as the cut-off.

Why are they eligible only for 3-room flats and not larger ones? Sir, anyone who is familiar with a 3-room HDB flat, which has got 2 bedrooms, about 70 square metres, would agree with me that this should be more than adequate for the housing needs of a single person, particularly in land-scarce Singapore.

Members have also suggested allowing singles to rent HDB flats on their own. Our current policy on this is to reserve HDB's heavily subsidised rental housing for lower income families who cannot afford home ownership. There is always a certain segment of the population who will never be able to own their own homes, and for them, they will have heavily subsidised rental housing. We do not encourage singles to rent HDB flats on their own, partly because of the limited stock of such rental flats, but mainly because we want them to look first to their family for support. We do not want them to look to the State in the first instance.

Mr Ang Mong Seng has suggested that we build HDB flats purely for singles to encourage social interaction. Is that correct? That was what I think I heard him saying. Sir, many Members of this House have actually asked the HDB to review its roles. Some have said that HDB is actually doing too much and it should be doing less. Sir, even while we review the role of HDB, I can categorically say that HDB will not take on this role of providing more opportunities for singles to meet. I think there are many other agencies and many other organisations which are much better placed to play such a role, organisations like SDU, SDS, and so on.

Sir, let me take up a point which Ms Indranee and others have raised, and that is that it is difficult to obtain a waiver of policy from HDB. Let me state at the outset that policies are set by the Government, and HDB is the implementing agency. The rules and regulations are put in place to support existing policies, and for good reasons. Nevertheless, as with all rules, there are always gray areas at the margin, and this is the reason why we have got mechanisms in place which will allow HDB to exercise judgement and discretion on a case by case basis. Exceptions to the rule do take place. Camels do get through, quite a few of them, in fact, and big ones too. But they are not the norm, I must admit. In fact, there are not as many as maybe Members of this House would like, and it must be so. Because, if there were too many camels getting through, then surely there is something wrong with the policy in the first place, in which case, we should review the policy.

Sir, policies are not cast in stone. Members recall that the housing policy for singles, in fact, was revised, and reviewed, only last year, whereby we allowed the purchase of 3-room resale flats in all estates, not just in the suburban estates. This, I believe, has been very popular with the singles. We will continue to review and refine our policies, when necessary.

Sir, MPs sometimes raise specific cases in the House, on behalf of their constituents, and to illustrate their point. There is nothing wrong with that. In fact, that is to be encouraged because they are doing their job. However, I would like to point out that sometimes, there is often more to each case than what MPs are told. And it is only when HDB interviews their residents, to see how it can assist them, that all the facts surfaced. So, my advice is, do not listen to one side of the story before you make up your mind.

Sir, let me now go on to the other issues that were raised, particularly the one about the review of public housing. This is a matter which many Members have raised, and I would like to take some time to touch on this.

Sir, the budget landscape for the Government in the future will not be the same as before. Our public housing expenditure would have to adjust according to what the Government can afford. In the past five years, we spent about 1.1% of our GDP, or more than $1.5 billion annually on public housing. This includes things like the subsidised flat prices, the housing grants, upgrading and so on - 1.1% of GDP, which is considerable. In the future, we will have to be more prudent and more efficient in the way we spend the public housing budget. For a start, we have already embarked on a review of the way our public housing budget is managed. We will be looking at all options pertaining to the financing of HDB flats, taking into account, amongst other things, our budgetary and financial position. We are also reviewing the roles and functions of HDB, in particular, its role in the development of public flats. HDB has been spectacularly successful in building affordable public housing. The expertise, the experience, and the achievements of HDB in this area, have won world-wide recognition. For example, in 1991 it was conferred the World Habitat Award for developing Tampines Town, and my residents are extremely pleased about that. This was done against strong contenders such as Vancouver and Boston. 1.15 pm

Today, however, property development is a much more mature industry. And recognising this, HDB has, over the years, been gradually increasing the involvement of the private sector through, eg, its premium apartments. We can further increase private sector involvement to enable us to respond faster and better to changing needs, and the changing preferences.

As a first step, we are looking into the feasibility of corporatising HDB's Building and Development Division (BDD). Since the inception of HDB 40 years ago, the Building and Development Division has accumulated a wealth of experience in the design and development of HDB flats. It has gathered considerable expertise in various areas, from surveying to architectural design, from engineering to project management. It is especially strong in comprehensive township development. All the HDB estates - the new towns - have been conceptualised and drawn up in the drawing rooms of the BDD in HDB..

MND and HDB are currently studying the implications of such a corporatised BDD. A key consideration is to ensure that corporatisation does not bring about any adverse impact on the delivery of our public housing programmes.

The benefits of corporatisation include giving them the autonomy and flexibility to build on their current strengths, to venture overseas and to establish an external market leveraging on the HDB brand name. It will enable them to unlock their value and potential, because they have a skill and track record that few organisations around the world have. At the same time, the public housing building programme can be gradually opened up to private sector developers.

Whatever the outcome of the review, let me reassure Members that there will be minimal impact on the public. We would ensure that the fundamentals of public housing are preserved. Singaporeans will continue to enjoy high quality housing at affordable prices.

At the same time, I would like to assure Mr Othman Haron and Mr Iswaran that the Government appreciates the valuable contribution of HDB's staff. They have given loyal and sterling service to HDB and the public, and their interests will be looked after in the review.

Sir, I have announced some changes to our public housing policies and programmes. I have also outlined some of the key areas that MND will be addressing and the considerations that we will bear in mind. We will weigh the various options before us carefully, keeping in mind the impact that fundamental changes in public housing policy will have on Singaporeans.

Mr Steve Chia Kiah Hong (Non-Constituency Member): Sir, the HDB introduced lift upgrading in the last few years as a special upgrading work that will benefit only certain residents in HDB flats. These residents are required to co-pay part of the lift upgrading cost. Yet, as I understand it, in the sales and purchase agreement that lessees sign with the HDB, it is clearly stated that any external works to be done outside the flat at the block will be borne solely by the HDB. Lift upgrading is clearly external works. Can the Minister kindly explain if it is violating a legally signed contract by demanding that the affected residents co-pay for the upgrading works?

The Chairman: Dr Tan Cheng Bock is not here. Mdm Halimah.

Mdm Halimah Yacob (Jurong): Sir, I am indeed very glad to hear the Minister say that there are no policies which are cast in stone; therefore, implying that policies can be revisited. Most certainly, there is one policy which I hope that the Minister will revisit, and that is the current policy of the HDB of not installing lifts in 4-storey HDB flats.

Sir, when the flat dwellers purchased these flats 15 or more years ago, they were much younger. There was a spring in their step. They were definitely much more nimble in running up and down four storeys of the HDB flats. But now, after many years, there is less of a spring in their step, the knees are getting a bit wobbly, and I think it is extremely difficult for them to climb up and down the staircase, particularly for the women who have to go marketing in the mornings. They have to carry heavy baskets and climb up the staircase; it can be quite a difficult problem.

Sir, I really hope that the Minister will revisit this particular policy, taking into account the fact that the population has aged considerably. I also hope that in his reply, the Minister will not just cite economic arguments, but will also look into the social aspects of the issue that I have mentioned.

Sir, on a related issue, which was raised by two of my colleagues, Mr Othman Haron Eusofe and Mr Iswaran, on Saturday, the Minister had kindly given a very good assurance in this House that the restructuring efforts in HDB will not affect the interest of the workers. I am very glad to hear that. I am also happy to inform the House that the HDB management is in close contact with HDB staff union and NTUC on this matter. And I am very glad to say that it is none other than the Minister himself who had instructed the management to work closely with the union on this issue. As a labour MP, I appreciate his concern and I am confident that with his personal interest in the issue, we will be able to face changes without much disruption.

Sir, for the information of the House, in our discussions with the Board, the NTUC has conveyed the following:

First, the need for adequate notice to prepare workers;

Second, effective communication to ensure that everyone understands the rationale and basis for the change, and how it affects them; and

Third, appropriate assistance must be given to workers who are affected, particularly in relation to training programmes for the affected staff. In this regard, the NTUC Skills Development Department is currently working out a programme with the management to put staff on training programmes. So, I am very glad to say that we are working very closely.

Sir, coming back to my first point, I would appreciate a response from the Minister.

Dr Amy Khor Lean Suan (Hong Kah): Sir, like my colleagues before me, I am raising an issue on the lift upgrading programme.

The lift upgrading programme, which was launched last year, is indeed a laudable project. I suspect that it may have overtaken covered linkways as the single most coveted upgrading item by residents.

Every time I visit my residents, the question of when there will be lifts at every floor inevitably crops up. A resident who has a wheelchair-bound father asked if we can speed up this programme, so that it will be more convenient to bring his stroke stricken father out. Many other elderly residents also appealed for the lifts to be upgraded, so that they stop at every floor. Arthritis and rheumatism have made it increasingly difficult for them to climb stairs.

Sir, indeed, we have a fast-ageing population, and facilities which enhance mobility and accessibility, such as lifts stopping at every floor, are not only welcomed but indispensable. Such facilities are also much needed by the handicapped whose interest sometimes we tend to overlook.

Sir, one of my precincts in Hong Kah North was fortunate to have been selected last year for the lift upgrading programme. All the residents in this precinct are eagerly awaiting their new lift system, except those in the four blocks of 4-storey walk-up flats.

My first question to the Minister relates to the 4-storey blocks of walk-up flats which have been excluded from this programme because, I am told, they are very costly and too few residents benefit from this, compared to the high-rise blocks. My question to the Minister is: what medium and long-term plans does the Ministry have for these flats? This is because residents living in such blocks have expressed their concern regarding the lack of lifts. Some, especially those living on the top floors, say that they are thinking of moving out. In fact, during my block visits, I noticed that some flats have been vacated, and I was informed by residents that the flats have been empty for some time. Sir, I am worried that, over time, these blocks of flats may become urban slums when the residents move to other flats with lifts stopping on every floor.

Sir, within the Bukit Batok division of my Hong Kah North constituency alone, I have a total of 30 blocks of 4-storey walk-up flats with 603 units. Many older estates would have such blocks of walk-up flats interspersed with high-rise blocks, and would suffer the same fate with regard to the lift upgrading programme.

Sir, I would like to ask the Minister to seriously look into and resolve this issue with a definitive plan soonest. Although it may be costly to provide such lifts to such blocks, the Ministry could look at providing, say, only one set of lifts and using a cheaper lift system for such blocks.

Sir, I also submit that since these residents have been paying the same conservancy charges as similar sized flats in high-rise blocks all these years, they should also be entitled to the same upgraded facilities. Alternatively, the Ministry could look into selective en-bloc redevelopment for these blocks as clearly, over time, such flats will become increasingly unattractive.

Additionally, Sir, I would also like to request that the Minister consider giving the lift upgrading programme priority over the general interim upgrading programme, as having accessibility and mobility with lifts stopping on every floor appears to rank highest on the wish list of HDB residents in the older estates.

Mr Ang Mong Seng (Hong Kah): (In Mandarin): Sir, with the launch of the Interim Upgrading Programme, the Government is also considering upgrading lifts and installation of lifts to blocks of flats which have no lifts. This has received very popular response from the residents, particularly the aged residents. During my visit to the residents, many of them said to me in Teochew that our Government and Ministers are very good. They said, "They understand our problem and they have installed lifts for us. This is very good. I will vote for them." This response shows that installation of lifts is very important to them, particularly to the elderly.

The HDB has also installed lifts to three blocks of 4-storey apartments. These blocks are among the first to be installed with lifts, and the residents are very happy with the lifts. They were very happy when I visited them, particularly the old folks. However, under the new Lift Upgrading Programme, the 4-storey blocks are not included. Two of my parliamentary colleagues have raised concerns about this matter. I think this is a very important issue where the residents are concerned.

On the installation of lifts, why is the cost so high? In Bukit Gombak, there is a practical example. When I appealed for the installation of lifts, they said that there must be at least 60 units in the block before they could be considered under this scheme. Under the prevailing policy, ie, linkways have to be built to link the three blocks together and this costs a lot. However, if there are common corridors, these linkways need not be built, and we could save two-thirds of the cost. For high-rise flats, so long as there are 20 units, they qualify for lifts to be installed. Why is the standard different for 4-storey blocks? Also, there may be other considerations if the Government is not willing to install lifts for 4-storey blocks. There could also be redevelopment plans for the block of flats. If this were so, we should announce well in advance so that the residents can decide whether to move out or to stay on.

Sir, I hope the Government will look into this matter.

Mr S. Iswaran (West Coast): Sir, like several of the preceding speakers, I want to raise a plea on behalf of those who have, as Mdm Halimah Yacob put it, lost the spring in their stride. It makes me wonder whether there is a statutory board they can turn to for help!

Sir, the Minister has pointed out, quite accurately, that we have a financial constraint going forward, and we need to ensure that the dollar we spend is spent well. In that regard, I want to raise two points for the Minister to consider. The first is whether we can indeed prioritise the Lift Upgrading Programme over the Interim Upgrading Programme. Because, essentially, the Interim Upgrading Programme has lift upgrading plus covered linkways, and then an assortment of other general municipal works, many of which can be undertaken by Town Councils on a progressive basis from money they generate through the S&C charges. That being the case, the big ticket item is the lift upgrading, and it is also one that is heavily sought. The Minister has overseen the study on the ageing situation in Singapore, and he is well aware of the pressing needs on behalf of those who are getting on in age, and they need this facility, in terms of the lift stopping on every floor. 1.30 pm

The second point is whether the programme can be accelerated. In other words, quite apart from prioritising it over the IUP, whether we can, in fact, allocate even more resources to ensure that more flats benefit from this.

Sir, it is of scant consolation to a 65-year old to say that the lift upgrading programme is a 10-year programme and it will come to his flat or block in the fullness of time. I hope the Minister can consider this request.

Mr Zainul Abidin Rasheed (Aljunied): Sir, where I come from, Eunos in Aljunied GRC, we have a relatively high percentage of senior citizens. Eunos is a relatively old HDB estate. However, I am sure I speak for other similarly old estates and older flats built before 1990 where we did not have lifts on every floor.

I understand why HDB did not build the older flats with lifts on every floor, as the priority then was to build flats fast and cheap. But now, when that generation of residents has grown older and some aged, this consideration for lifts on every floor is now more urgent, especially when we want to ensure that more of the elderly continue to play an active part in our lives.

In Eunos, only one block of those flats built before 1990 has been given a Lift Upgrading Programme (LUP) programme. There are 64 more others waiting. Every visit I make to the older flats, invariably, I get this question asked: when do we get our LUP?

I realise that there are 4,000 such flats in Singapore awaiting LUP, and during these days of downturn and expected slow GDP growth, MUP/IUP/LUP could be far from the Government's priority. But can the Minister indicate when we can expect LUP for more of the older estates and flats, including those at Eunos? I urge the Government to expedite the process, as soon as we are ready to LUP.

Mr Mah Bow Tan: Sir, it is evident from the Members' comments that upgrading is very popular, particularly lift upgrading. But let me point out that upgrading in general, whether it is Main Upgrading or Lift Upgrading, is very expensive and very heavily subsidised.

So, to make the best use of the limited budget that we have for upgrading, MND has to constantly review the scope of these upgrading programmes in order to make sure that we can bring these programmes to as many residents as possible, and also to provide improvement items which residents value.

Last year, we introduced the Lift Upgrading Programme (LUP), and this is to allow lifts to be provided on every floor, where feasible. The feedback has been very positive and I can understand why, because it does fulfil a real need, particularly for those who have lost the spring in their steps.

But let me also stress that the Lift Upgrading Programme, which we introduced last year, does require a lot of resources. Mr Steve Chia asked why residents have to co-pay. It is precisely for this reason. It is a very heavily subsidised programme. The number of blocks which still requires lifts on very floor numbers something like 4,000. This is not inconsiderable. And he must appreciate, and I am sure every other Member here must appreciate, that, given the limited resources that are available for upgrading, there must be a certain level of priority. I think Mr Chia wants to say something.

Mr Steve Chia Kiah Hong: Sir, I want to clarify. I understand that it is very expensive and that maybe there is a need to co-pay. I appreciate that the residents have to co-pay, but I am asking whether the Ministry did actually violate a legally signed contract in this case. What is the Minister going to do about this violation of a contract, if there is a violation of contract? That is my main concern.

Mr Mah Bow Tan: The short answer is there is no violation of any contract. He can rest assured of that. Of course, external works which are of a general benefit to the residents, Government will subsidise, and residents will have to co-pay. In the case of lift upgrading, it is even more clear that the benefit is to the residents, and this is the reason why we have asked them to co-pay. That has been made clear to residents. I think it is well accepted by our residents. In fact, all the precincts that have polled for the Lift Upgrading Programme have given us full support for this programme. So, it is well understood. It does not violate any legal contract whatsoever. That much I would like to assure Mr Steve Chia.

Concurrently with the lift upgrading, of course, there is the Interim Upgrading Programme which preceded the Lift Upgrading Programme. What the Interim Upgrading Programme does is to provide some kind of upgrading works for precincts which are not yet eligible for the main upgrading. Interim upgrading centres more on block and precinct works. But all Members who have spoken have expressed a desire for more resources and more priority to be given to lift upgrading. I do share that sentiment. Within the resources that we have available, we will try to do so. For that reason, my Ministry has decided to combine the IUP and Lift Upgrading Programme (LUP) into a new programme which we will call "IUP Plus". What IUP Plus does is that it will bring IUP and LUP works together at the same time to residents. It would be offered to residents at the same time. It will be carried out at the same time, so that we would no longer have to have two separate programmes, one interim upgrading and one lift upgrading.

By combining these two programmes into one, hopefully, we will enable more flat owners to have the lift upgrading works done earlier. At the same time, they will also continue to enjoy interim upgrading works which will be done at the block and the precinct level, including things like linkways, etc, which, I think Members also agree, are well appreciated by residents. So, we will try and have the best of both worlds, as it were.

A total of 138,000 flats, which were built between 1981 and 1986, will qualify for this new programme. There will be no change in the polling and co-payment arrangements. HDB flat owners, who will stand to benefit from the lift upgrading works, will be required to poll and pay for such works under the IUP Plus. As for the interim upgrading works, it will continue to be fully funded by Government, and no polling is required. IUP Plus will be introduced later this year.

In addition, the Lift Upgrading Programme itself will continue to be available for all high-rise blocks which are not eligible for the interim upgrading type of works, in other words, a separate LUP programme for those which are not eligible for this IUP Plus. These will be flats that were built after 1986 or flats that were in the earlier IUP batches which did not enjoy lifts stopping on every floor. So those that have already been done are still eligible, and they can be nominated as well.

Sir, quite a few Members have touched on the issue of lift upgrading for low-rise 4-storey blocks. Again, I must explain to Members that there is a real need for prioritisation. We do not have unlimited funds. Given the circumstances, we need to see where the Lift Upgrading Programme can give more value and more benefits to residents. The Lift Upgrading Programme was introduced last year. We still have about 4,000 high-rise blocks, as I said earlier, which do not have lifts on every floor. Lift Upgrading for high-rise blocks will benefit more residents than low-rise blocks. Furthermore, the provision of lifts to low-rise blocks is expensive, as Mr Ang Mong Seng realised, and I think he has cited some figures. But if there are low-rise blocks with redevelopment potential, as Mr Ang mentioned, we will certainly consider them for en-bloc redevelopment.

Sir, I come now to the Main Upgrading Programme. To provide better value for money under the MUP, MND will concentrate on providing improvement items which are of tangible benefit to HDB flat owners. What we are going to do is to classify the upgrading improvement works into two categories - the "core" and "non-core" categories. HDB flat owners, through the MUP Working Committee, will be given greater flexibility in choosing the works which they value most. When I talk about core items, I am referring to things like upgrading of toilets, covered linkways, etc, which are very well appreciated by residents. Certain items, like toilet upgrading, will be enhanced to include the replacement of wash basins. As for non-core items, the list will be expanded to include, for instance, the replacement of refuse hopper. Again, this is based on feedback from MPs where some flat owners have suggested that we include this item as part of the MUP. But we will put this under the non-core category because not everybody would like to have it.

Sir, the revisions I have just highlighted reflect the feedback, as I said, from MPs as well as from residents, but also from our own experience with past MUP projects. The changes will give us value for money and optimise the use of our upgrading resources. I am pleased to inform Members that, despite the economic downturn, the Government will be able to sustain the same pace of upgrading this year as we had done for the last five years. In terms of the number of precincts, we are going to announce the number of precincts later. But the number of precincts for this year will be similar to the number of precincts for the last few years.

Sir, the Government remains committed to upgrading. We are facing quite significant changes in our social and economic landscape. So, we will have to review our upgrading programme continuously, taking into account our economic performance. The Government's financial position will also have to be taken into account. Of course, as Members will realise, we will also need to look at the competing needs for funds and other priority areas, like healthcare and education.

Ms Irene Ng Phek Hoong (Tampines): Sir, in the Minister's reply earlier, he said that the housing policy is pro-family. Many singles are pro-family and indeed take care of their aged parents almost single-handedly. Often, the parent, usually the mother, is the co-owner of the flat with a single. But when the parent passes away, a traumatic experience in itself, the single finds herself or himself ---

The Chairman: Ms Ng, are you making a speech or are you asking a clarification?

Ms Irene Ng Phek Hoong: No. It is a clarification. The single is faced with the possibility of losing the flat, unless she can find another single to share the flat. But it is not because the single is not pro-family that she finds herself without a mother or a father. Can the Minister consider reviewing this policy? In fact, many singles tell me that HDB has been quite compassionate in their appeals. But I thought if it can remove the uncertainty, and reconsider this policy, it would be good.

The Chairman: I think that is another question. Mr Mah, you do not have to answer it. Mr Iswaran.

Mr Iswaran: Sir, may I seek a clarification from the Minister? The IUP Plus initiative is in addition to the $43 million Lift Upgrading Programme that has already been indicated in the Budget book for the coming financial year. My main concern is whether the LUP will cover more flats as a result of this initiative, or whether it is just a redistribution.

Mr Mah Bow Tan: It is partly a review of both the LUP and the IUP programmes. By combining these, we hope that we will be able to get better value for money and therefore more flats will be eligible for lift upgrading.

Mr Zainul Abidin Rasheed: Sir, before I come to my next cut, can I ask a clarification from the Minister? On the limited resources that we have, and he said that he is lumping together LUP with IUP, in terms of priority, should we not be giving more resources to LUP first, because IUP can wait? LUP is more urgent because of the senior citizens.

Mr Mah Bow Tan: Sir, what we will do is that we will have a total block budget for lift upgrading and interim upgrading, but we will combine the two into one. In this way, we will be sharing some of the overheads, etc. This is what I mean by getting value for money. In the process of doing so, I expect that there will be more opportunities for lift upgrading to be done. Of course, in terms of prioritisation, specifically which blocks will get it first, this is ultimately left to the Members to recommend and nominate to the Ministry.

The Chairman: May I remind Members that when asking for clarification, you may ask the Minister something which you do not understand or something you want to be clarified, but not to raise a new question. I do not want to let too many camels in.

Mr Zainul Abidin Rasheed: I thought that was a clarification I was seeking. My next cut is on economic downturn and home ownership. Much of what I wanted to ask has been answered in the Question for Oral Answer and also the new policy of HDB. But I just like to add one more point and, that is, I agree with the Minister that, sometimes, at MPS, we do get all kinds of sad stories and they may not be the complete stories. But I would like to urge the Minister to take MPS cases seriously and we have more than 80 MPS cases and feedback from MPS cases would serve as an indication about the kind of problems faced by residents, the kind of policy changes that are needed. In the case of downturn and home ownership, it is not just a matter of rescheduling payments but also people who are asking to change, in terms of application for flats, from 5-room to 4-room, 4-room to 3-room. I would like to get clarification from the Minister whether the new policy in fact would take care of that kind of problem without much penalty being faced by the residents.

The Chairman: Mr Ong Kian Min is not moving. Mdm Ho Geok Choo.

Mdm Ho Geok Choo (West Coast): Sir, in the last few days, many cries were heard of need to do more for the jobless. Suggestions ranged from rebates to training to job placements. We all know too well that, for some, the jobs lost are gone forever. We are not just battling with structural unemployment. Increasingly, we will be faced with under-employment.

In light of the fact that there are a number of our people who have been displaced by the current recession, I feel it is necessary to help some of them to tide over their temporary difficulties by providing them with the opportunities to earn some income in the informal economy. Despite the proliferation of national efforts expended to train and retrain displaced personnel, we have to contend with the fact that there are pockets of our workforce who are not trainable and therefore not employable, and pockets who despite being trained are not able to find jobs.

From what I understand from the ground and from my experience at the MPS, many displaced employees attempt to try another means of living. Many have applied to be hawkers and canteen operators, but since the number of stalls in our hawker centres and schools is necessarily limited, they find themselves waiting a long time for their licences to be granted, only to find out that they may not get a licence after all.

There was this Malay single mother who came crying with four young children to see me over her plight. She has been seeing me in the last six months and earlier my predecessor for not less than six months, so I was told. She could not go on living on the charity of MUIS, public assistance and the EDRS, so she said. She has only Secondary Two education and finds difficulty in looking for a job. She needs to earn money for a more definite future. But there is hope. She can bake and cook. If she cannot operate a hawker or canteen stall, can she do some home-based cooking and baking as an alternative?

As raised by Mayor Yu-Foo Yee Shoon, it is appropriate for an informal sector to be established in Singapore. This sector can also be a spawning ground for the under-employed to unleash their potential, remembering that the giant HP started from the home garage and, closer to the food business, Colonel Sanders of KFC also started from his home kitchen after his retirement.

Sir, I am well aware of the possible consequences of nuisance, disturbance and unsightly cluttering of utensils and cartons along corridors. All these could lead to complaints by neighbours. However, such concerns are not good reasons for not exploring ways to address these concerns. Working in concert with the town council and the CDCs, conditions can be spelt out to ensure good housekeeping and orderliness. Vigilant spot checks can be carried out through the CDCs, or town councils, whose set-ups have been premised on the ground as decentralised units. They can therefore be more flexible in serving the needs of constituents under their charge. In fact, to better manage such small-scale food operators, can they not be registered under a central registry for easy access to them? The town councils and CDCs could mount a briefing to inform them of the dos and don'ts. After all, with HDB being an expert in regulations, they should have no difficulty coming out with further rules, except that this time round, the rules may win them better support since they are meant to help create temporary jobs.

Sir, I understand that HDB is in the business of housing, and not jobbing. But, Sir, if you wish to nurture entrepreneurial spirit, we must surely allow for MOM and top entrepreneurs to mushroom readily and spontaneously from their homes without their often feared cost of capital of doing business. In fact, that was how Bengawan Solo started years back and it was after it had sufficiently built up its reputation and accumulated gains that it turned into a roaring business.

Should not the remaking of Singapore stretch the courage and imagination of the HDB to bring spring to the drab weather that we are now in? And let those who have plucked up enough courage to start something on their own so as to spring forward to reach their dreams. Without being disrespectful to one of our MOSs in this Chamber, I recall reading of his mother's food enterprise of satay prepared from her flat dwelling. I have no doubt that that enterprise had contributed to the nurturing and shaping of one of Singapore's sons who, today, is contributing to the nation. I urge HDB to open up its regulations to accommodate such a worthy request to help the needy and remove the OB markers that may snuff out the entrepreneurial spirit, instead of uniting it.

Sir, at this juncture, I will not labour over the issue of food preparation, hygiene and standards, which the HDB may raise as concerns and reasons for not supporting my request. I shall be addressing that with the Minister for the Environment. Sir, I will request that the HDB consider granting temporary permits of 6-12 months to unemployed people to operate small scale food business of a specified approved type from out of their homes. In the meantime, these people will have to work hard to look for an alternative job or eventually transfer their home-based business to proper locations once they are successful.

Dr Michael Lim Chun Leng (Pasir Ris-Punggol): Sir, I like to raise the issue of heavy vehicle parking. Owners of heavy vehicles often face the problem of finding parking space near their homes. As a result, many of them get fined very frequently and these fines eat into their meagre income. It is not uncommon to find many of the heavy vehicle drivers who have a parking lot which is very far away from their homes. So someone who lives in Jurong may have his parking lot in Tampines, and vice versa. The Ministry may want to consider a once-off rationalisation exercise to allow heavy vehicle owners to change their parking lots so that they can opt for a space nearer their home. This will go some way towards alleviating the problem for these drivers.

In the new towns like Punggol New Town and Sengkang New Town, it is surprising that there are no plans for heavy vehicle parks even though there are plans for a light industrial estate on the southern fringe of Sengkang town. Furthermore, there are large tracts of land which are not likely to be used for the next 10 years. Surely, it is better to put a piece of empty land to productive use, rather than to leave it idle for the next 10 years. If the MPs in Pasir Ris-Punggol GRC and Ang Mo Kio GRC cannot be convinced by the reasons given by HDB and URA that there is no space available for heavy vehicle parking in Sengkang or Punggol, how can we convince our residents that that is so?

Mr Tan Soo Khoon (East Coast): Sir, Government's policy has been that the cost of ownership of cars would be reduced over the long run, but the cost of usage will increase. Hence, we have increases in ERP charges. We have ERP almost everywhere, or soon to be everywhere, that we are going to have ERP day and night. I think very soon, ERP will mean "every road pay". Sir, the day will be quite soon when the only safe place to leave your vehicle is at home, if you are lucky enough to own a landed property. You can well imagine that, one day, if I drive out of my house, the first thing I hear would be this "beep" sound coming from the little device on my dashboard, and everywhere you go, you will be hearing "beep, beep, beep", instead of car horns.

Sir, the Minister of State for National Development was quoted as saying that HDB is going to suffer $99 million loss a year in running the car parks. Therefore, it needs to increase its car park charges to cover this deficit. Whereas his Minister was quoted as saying that the reason why HDB wants to raise the car park charges is that it would have more money to build more car parks in future in order to anticipate the increase in the number of cars in Singapore. So I would like to know which is which, and to be more precise, I would like to hear from the Minister how much does it cost for HDB to build one car park lot, uncovered and covered. I hope we will have enough time so that I can follow up with more questions after we get the figures.

Mr Low Thia Khiang (Hougang): Sir, in this Budget the Finance Minister announced that car park charges would be revised, and he said:

"Where HDB residential parking is concerned, the existing charges do not cover the costs of building the car parks, leaving HDB with a large deficit."

This, I assume, is the justification for the increases in HDB season parking charges. Of course, I do not know whether the HDB will take this opportunity to revise the hourly parking charges as well.

Sir, I have checked from the HDB's Annual Report and found that in 1994/1995, the deficit from car park activities was less than $6 million. In 2000/2001, the deficit went up to $99 million. The bulk of the increases in expenses resulting in deficit were interest expenses and depreciation which formed $62 million in 1995, increased to $140 million in 2001, and interest expenses went up from $84 million in 1995 to $186 million in 2001.

Sir, I would like to know how these changes in the financial position of HDB car park activities came about. Is the HDB dumping the cost of building multi-storey car parks in the new estates and upgraded precincts into the account? If this is the case, is it fair to increase all HDB parking charges across-the-board, including those old open car parks in HDB estates built in the 60s and 70s? Is the deficit incurred as a result of HDB building more multi-storey car parks, bearing in mind that HDB continues to collect parking fees even for car parks they already have, probably, zero depreciation value? Building of car parks is therefore equivalent to a long-term investment. And if the depreciation is zero and the cost of building the car park has been recovered long ago, I suppose, those built in the 60s and 70s, where is the justification to increase the parking fees in these car parks by reason of HDB incurring a huge deficit? And if the justification is to recover the huge deficit in car park operations, then is the HDB prepared to just break even for car park operation in the long run?

Sir, the other issue I want to bring up is whether the HDB has a cyclical work plan to improve the car parks. I wish to inform the Minister that car parks in the estate in Hougang constituency have not undergone any major improvement by the HDB since they were built together with the flats in the 70s. The condition of most of the access roads and parking lots has been bad. I would like to ask the Minister whether the HDB would pay for improving the car park access roads and the parking lots in Hougang constituency.

Dr Michael Lim Chun Leng: Sir, the new towns, such as Sengkang and Punggol, are lovely to look at. However, like all new towns, they were initially beset with the problem of lack of physical facilities and social services. On this note, I must commend and thank the Minister for the town development task force which he set up in Sengkang. This pilot project, which has brought together more than 20 Government agencies and different community organisations, has made it possible for residents in Sengkang New Town to have significant improvements made to their living environment, and a rapid response time to many of the problems that they have faced. The improved coordination and better understanding between the different organisations have vastly improved the quality of life of the residents in Sengkang town. There are two other areas where further improvements can be made. 2.00 pm

Firstly, better designs. One of the problems of the new town is that although the facade looks beautiful, there are many problems with the designs which have become regular irritants to many of the residents. The block signs are so aesthetically designed and well concealed that they cannot be easily seen by visitors or residents. The sheltered walkways are bright, airy, with beautifully-designed roofs, but leave the user with little protection from even a gentle drizzle. The drop-off points are strategically placed with arching canopies that invite rain to fall into the shelters, making one wetter than if one stood under an umbrella. The lift lobbies are so cosily designed that you can hardly see each other in the day time, unless the lights are switched on. The lift buttons blend so well that you cannot figure out the numbers.

I am all for creativity and aesthetic designs. However, more importantly, we must take into consideration that functionality and practicality must not be forgotten. Much money will have to be spent to correct these design problems. In future, the Minister may wish to consider a feedback committee formed from the community organisations or town councils, which will give feedback to HDB before these designs are approved in the new estates. This will ensure better designed public flats which are both beautiful and functional.

Secondly, designation of land use. In this age of increased transparency, URA and HDB should openly state the designated use of land, eg, for churches, temples and mosques. Flats next to a designated religious site may have less appeal for many but at least those who choose these flats do not feel that they have been given a big surprise and will be better adapted to the environment. The Ministry should pre-designate religious sites in advance of flat selection. This transparency will bode well for new flat owners.

Mr Ang Mong Seng: (In Mandarin): Sir, in the early days, the HDB always provided for wet markets in the old estates so that the residents could go and purchase their food and market produce. The wet markets have all sorts of produce offering the residents very good choices. The residents enjoy buying their food there because they can pick and choose, and can even bargain for cheaper buys. But, in the supermarket, there are no such facilities. The choice is limited and the prices are fixed and not bargainable. Most importantly, at the wet market, residents can mingle with one another and talk about anything under the sun, even national issues.

But, recently, in all the new towns, the HDB has stopped building wet markets. They have only the so-called dry markets which are actually housed in shops. These are very small and there is hardly any space for the residents to move about. The situation is even worse when it rains. These shops, when they are operating as markets, are not hygienic and people are not very happy with them. Residents, particularly housewives, would prefer to go to the wet market because they like this concept of wet market better. For example, in Boon Lay, Jurong or Chong Pang, all these wet markets are very popular with the people and the business there is very good.

I have asked the officers in HDB why they have stopped building wet markets, and they told me that the wet markets were very messy, and that was why the Government had stopped building wet markets. I do not believe that the wet markets are messy. Perhaps, they were referring to the great number of people moving about in the area, and the wet markets were always bustling with activities. So, if these officials think that they should not build wet markets because they are messy, then I am afraid they are terribly wrong. I hope that HDB will reconsider this matter.

Nowadays, a lot of people queue up to buy HDB flats in the mature estates. When Channel News Asia interviewed these people why they were flocking to buy flats in these old estates, the spontaneous response was, "Because there is a wet market, it is very convenient here. That is why I am applying to buy a flat here."

Since most residents like the wet markets and they are popular with the residents, I hope that HDB will consider building wet markets in the new towns like Sengkang and Punggol, and provide better services to the residents. I hope that HDB could conduct a survey among the residents, and find out whether they would welcome the provision of wet markets in the estate, before they formulate their policy. I think that would better reflect the wishes of the residents.

In Mr Yatiman's constituency, HDB has built a new wet market to replace the dry market. I would like to find out what is the residents' response to this wet market. I understand from Mr Yatiman that the residents like this wet market very much. If that is the case, would the Minister consider building more wet markets in the other estates, to fulfill the wishes of the residents?

Mr Mah Bow Tan: Sir, first of all, let me take the points raised by Mr Zainul Abidin Rasheed on the question of helping residents cope with financial difficulties. He suggested specifically allowing the residents to downgrade or to buy another flat in order to help them with their difficulties. There are certain rules about this but, by and large, there is no difficulty for residents to actually downgrade in order to get some money from their existing flat to cope with their difficulties. However, there are requests from time to time concerning the interest rates that will be charged, and these are considered based on the appeals by the MPs. I would like to assure him that HDB will continue to take a sympathetic attitude to such requests.

But it need not necessarily be so. They do not have to sell their flats if they do not want to. In fact, there are many schemes put in place by HDB to actually help residents to cope with their difficulties without having to give up or lose their flats. These have been quite successful. There are quite a number of residents who do take advantage of these schemes. For example, the reduced repayment scheme whereby residents pay a certain percentage of their instalments. Instead of 100%, they pay 75%. Or they can defer their instalment for six months, or they can actually extend the loan repayment period.

So all these measures do help the residents cope with their financial difficulties. They are actually very generous measures that have been put in place. In fact, HDB will refine one of these measures even further, to make it more helpful to the residents, namely the reduced repayment scheme. Currently, they can pay 75% of the instalments, but HDB will, effective 1st July 2002, allow mortgagers to pay between 50-75% of their monthly instalment. In this way, the residents will be able to pay something and not have to defer their loan repayments totally. This will be for a period of two years. There will be a 6-monthly review by HDB, because HDB would like to ensure that residents, once they can afford to pay, will actually restart their instalment payments. This will be of help to the residents.

But, over and above all these financial assistance measures, the greatest comfort to HDB lessees is really the fact that they are protected from third-party creditors, even if they are made bankrupt. So whatever happens, eg, if they lose money, they are sued by other creditors and are made bankrupt, they will not lose their flat. This is probably the greatest comfort to our residents. Why? Because we have, since we started the public housing programme, made sure that home ownership is one of the cornerstones of our policy. It is a very important social objective. I wanted to make this point because there have been recent calls to allow HDB flats to be used as collateral, in order to provide funds for business. It is an interesting proposal, but I just want to add a word of caution here because, as I said, home ownership is a fundamental principle of our home ownership policy.

There are many questions that we need to answer and many issues that we need to look into before we consider this issue. One of the first questions that we ask ourselves is how do we ensure that the funds that are derived from mortgaging the flat is actually used for business and not used for consumption, eg, buying a car, going on holidays, etc. And what if the business fails and they lose their flat? Are they prepared to bear the consequences if things do not work out, or do they look to the Government to provide them housing as a last resort? These are some of the questions that we need to ask ourselves, and we will have to study this proposal carefully before a decision is made.

I will just take this opportunity to respond to a question that Ms Irene Ng asked just now. She is not here. This is concerning the issue of singles or other people, who as a result of the demise of a family member suddenly find themselves without a family nucleus and are worried that HDB would turf them out. I wish to assure Members of the House that HDB will adopt a compassionate attitude to such cases, especially where one member of the family passes away because, obviously, this is not by choice. So, in such a case, the family nucleus requirement is waived, and the remaining occupant can retain his or her flat.

Let me now touch on the issues raised by various Members on parking. Let me take Dr Michael Lim's first about heavy vehicle parking. This is a perennial problem in our HDB estates, and there are two contending forces here. On one hand, residents are extremely upset when they have heavy vehicle parks next to their homes. They create traffic hazards and noise and smoke nuisance to the residents. Sir, all Members who have heavy vehicle parks in their housing estates can bear me out. Trucks and buses start up at six o'clock in the morning, and residents get woken up from their sleep. As a result of that, we get constant complaints about siting of heavy vehicle parks in their housing estates. On the other hand, of course, there is a demand from heavy vehicle owners or drivers who want to park their heavy vehicles right next to or near their homes.

Sir, heavy vehicle parks are popular in HDB estates precisely for this reason - because they want to park their heavy vehicles near their homes. But let me stress that the heavy vehicles that are being used are not meant to be used as their private transport. They are meant to be used for business. As such, HDB cannot provide enough parking lots for heavy vehicles, because there is a real shortage of suitable land in the housing estates. Even if they did find a suitable piece of land, inevitably there will be competing uses or there will be housing blocks nearby and, therefore, MPs will complain, if these empty plots were used for heavy vehicle parks. There are actually enough heavy vehicle parks island-wide for heavy vehicles. In the past, URA and HDB tried to accommodate the demand for such parking lots on an interim ad-hoc basis on vacant lands which are close to HDB estates. But, as I have said, this is no longer sustainable. The existing interim parking lots will be phased out when the land is needed for development, and more parking lots, if these are needed, will be made available near workplaces like Jurong, Kranji, Senoko and so on. In fact, the LTA tells us that there are actually adequate parking lots island-wide for such heavy vehicles. So I would urge Members to understand the constraints that are faced by HDB, and also to help HDB to balance the interest of heavy vehicle drivers on the one hand and residents on the other. 2.15 pm

May I now turn to the questions raised by Mr Tan Soo Khoon and Mr Low Thia Khiang on our car park charges. The first question raised is: why are we raising our car park charges? Is it justified? The point is that HDB residential car parks are heavily subsidised. The current charges are way below the cost of providing these car parks. The extent of the subsidy for last year, FY2001, for example, was something like $115 million from the car park operations.

Mr Low asked where this deficit comes from. Basically, the cost incurred in running the car park includes the land cost, because HDB has to buy the land to build a car park. It is not given away free of charge. It is charged based on residential rates, because if we do not use the land for car parks, we can use it for housing. The land is sold in one piece. The other cost involved includes construction cost, obviously. Then, there is the cost of maintaining the car park. Finally, there is interest cost, which is the cost of funds used for building and buying the land. All these elements make up the cost. There is a certain depreciation period, and the cost is depreciated over this period.

On the other hand, the income from car parks includes the parking charges, which is the bulk of the income. It also includes some fines, but that is a relatively minor amount. If you take the cost and the revenues into account, you will note that there is a heavy deficit, something like $100 million. Even after we have raised the car park charges, the deficit will still be quite considerable.

The fundamental principle is this. Government will subsidise the housing needs of Singaporeans in order to enable them to have a roof over their heads, but Government will not and should not subsidise car owners who live in HDB flats. This is simply not fair to all the non-car owners in HDB estates. I would like to inform Members that the majority of HDB lessees do not own cars. If we do not price the car parks properly, what is happening is that HDB will be carrying a deficit in its books as a result of subsidising car owners. Eventually, one way or another, this subsidy is going to be borne by all HDB flat owners. As a matter of principle, it is best for us to make sure that car owners pay what is fair and what is adequate for the provision of car parks for them to use, and not to have this cost lumped to the non-car owners.

Why are we doing this now? The reason is because with the new car policy, with the reduction in car taxes, with the increase in the number of COEs which has been announced, we can expect our vehicle population to go up. If we do not reduce the deficit on car parks, and if we continue to have a deficit on car parks, and if we have to build more car parks, the deficit is going to increase in the future. It is not going to get smaller. It is actually going to go up. This is the reason why we have to raise the car park charges in order to recover the cost of providing the car parks. And the reason why we are going to raise it in September this year, is to coincide with the reduction in car taxes, with the implementation of lower road taxes. We are mindful of the impact of these increases on HDB car owners and this is the reason we are timing it for 1st September.

Just to give Members some idea. If a person is an owner of a 1,500 cc car, his road tax rebate will be something like $225 a year, which works out to $18.75 a month. The increase in the monthly season parking charges for a sheltered car park lot is $15, which is less than the $18 rebate that he is getting for car taxes. If we are talking about surface car park lots, the increase would be $10, again lower than the reduction in car taxes.

Finally, this revision in HDB/URA car park charges is part of the larger package of measures that affect car owners, where the intention is to match the cost of driving with usage, rather than ownership of cars. So, it is inevitable that motorists, who use their vehicles a lot, will have to bear the higher cost of usage.

Mr Low also asked whether we will eventually go for breakeven in the charges for car parks. We do not have plans at the moment to reach breakeven level. Let us explain to the public and get the public to accept that the increases that we are going to implement on 1st September are reasonable and acceptable, and also get the message across why we have to raise car park charges come 1st September. We are not looking for breakeven at this point in time.

In so far as maintenance of car parks is concerned, in Hougang constituency, if Mr Low has any specific complaints about the car parks in his constituency, he may let the HDB know. As for certain parts of the car parks, I do not know which part he is referring to. Some parts may be under the Town Council, and some under HDB. But if he can let the HDB know, I am sure they will look into it. The point is that there is a need for car parks to be maintained. We do not just build a car park and then after that, we let it be. There is a cost incurred in maintaining car parks, and this cost of maintaining car parks is also part of the cost which I have just cited earlier, which is the reason for the deficit in car parks.

I will ask my Minister of State to deal with the other questions on wet markets, as well as on the use of HDB flats for food business.

Mr Low Thia Khiang: Sir, may I seek clarification from the Minister? We have now heard another reason for the increase in car park charges because there is a road tax rebate. So the Government is giving money in one hand and taking back from the other hand.

Sir, first, I do not see any Government subsidy reflected in the accounts. The amount of deficit, I believe, is a total reflection of the cost. I wonder whether the Minister will agree that if the depreciation of the construction cost is taken over a longer period of time, it will not incur so much deficit and thereby, we can afford to charge lower car park fees. My other question is whether are there cyclical plans for car parks, just like HDB flats and not so much on the maintenance.

Mr Tan Soo Khoon: Sir, the Minister did not answer my question about the cost to HDB of an open surface car park and a covered carpark.

Mr Mah Bow Tan: First of all, Mr Low is quite disingenuous to say that the reason for us to raise our car park charges is because the road taxes have come down. I did not say that. What I said was that the timing of the increase is such that the increase of car park charges will be defrayed somewhat by the reduction in the road taxes. We could have raised it earlier, but we did not do so. The timing of 1st September is precisely for that reason, to make sure that the impact on motorists is minimised. It is not a reason for doing so. I hope Mr Low will not get the wrong impression.

Secondly, on the issue of depreciation, yes, we do depreciate over the life of the car parks. I am not sure exactly what the life span is. But the cost, under normal accounting practices, has to be depreciated over the life of the car parks, and I believe this is being done. On cyclical works, yes, of course, the car parks will also have to undergo cyclical works. If we are talking about a multi-storey car park, some of these works would not come under the Town Council, but come under the HDB. As for surface car parks, the cyclical works involved will be minimal, but it still needs to be done. Resurfacing, for example, needs to be done. The more critical work that needs to be done is the replacement of these surface car parks with multi-storey car parks. The demand for car park space is very high in HDB estates, and we have to constantly look for ways of increasing the number of car park lots. One of the ways of doing so is to replace surface car parks with multi-storey car parks.

Let me answer Mr Tan Soo Khoon's question about cost. The estimated cost of providing a surface car park lot is something like $11,000, and this includes land cost as well as construction cost. But the construction cost, obviously, is much lower than the land cost. Then, for the covered car park, it is about $20,000. In this case, the construction cost is much higher. The land cost, of course, can be split up over more car parks. These are roughly the ballpark figures at the moment.

Mr Low Thia Khiang: Does the HDB do cyclical works such as resurfacing the access roads to open surface car parks?

Mr Mah Bow Tan: Yes, I believe they do.

Mr Low Thia Khiang: What is the timeframe, Sir?

Mr Mah Bow Tan: Sir, I am afraid that I do not have the answer. I would imagine that it is done as and when it is necessary. I do not have the answer, but if the Member wishes to file a Question, I will give him the answer.

Mr Tan Soo Khoon: Sir, in 1989, the then Minister for National Development told the House that the cost of an open surface car park lot to HDB was $14,443, and $32,581 for a covered car park lot. Based on what the Minister has just told us, it would appear that the cost of providing car parks to HDB has dropped by quite a lot in the last 10 years. Can he still justify the increase in charges if it is based on cost?

Second, if it is $11,000 for building an open air car park lot, and if the size of the car park lot is about 60 square feet, that works out to almost $200 per square foot, and this is providing something without four walls, no roof, no water, no power supply. Is this not a very expensive piece of real estate?

Mr Mah Bow Tan: Sir, first of all, I cannot comment on the figures that were cited earlier. I will go back and check. But these are the figures that have been given to me now and they are, I presume, the current figures. Even with these figures, there is still a deficit. To answer his question whether we are justified, the point is, based on this cost, we still run a deficit of over $100 million a year. And even with the increase, we are still going to run a deficit close to that amount. The answer to his question is yes, we are justified in raising the charges.

On cost of the real estate, yes, land cost is very high. As I have said earlier, the cost of the land for car parks is treated the same as the cost of land for housing. The justification for this is very simple. If we do not use the land for car park, we have to use the land for housing. So we better make sure that we make good use of the land.

The Minister of State for National Development (Dr Vivian Balakrishnan): Sir, let me answer the points raised by Mdm Ho Geok Choo on promoting the informal sector in HDB flats. In her speech, she mentioned the possibility of coming up with more rules and registration procedures to facilitate this. I am glad to inform her that there is no need for registration and additional rules in this area. HDB already permits various small-scale business activities to be conducted from HDB flats, and these activities will include making satay, tarts, baking cakes, music, tuition and so on.

However, HDB's foremost priority is to preserve the residential nature of these flats. As long as these activities do not contravene and change the fundamental nature of these residences, HDB does not require them to even register with us. 2.30 pm

With respect to the public health standpoint, I think she can take it up with the Minister for the Environment, whether they will permit food prepared within these flats to be sold to the general public. With all the concerns now on public health, especially after Question time today, I think all Ministers will be a lot more cautious on that note.

I want to move on to Dr Michael Lim's points about new towns. In particular, he talked about having beautiful designs, which are not necessarily the most functional. All of us in this House are realistic enough, and practical-minded people, who do want beautiful designs to be, first and foremost, practical. We are mindful of this. We are also mindful of the fact that it is not enough to just have something beautiful, but we want it to be easily maintained, because in the long run this affects our cost.

I take his point that the people who have a greater stake in this are the professionals and the residents on the ground. That is why before HDB embarks on any upgrading programme, it will always consult advisors and grassroots organisations, as to the form and the structures which need to be put up. However, I just want to add a cautionary note that it is impossible to please all-comers and to make everybody happy with all the different perspectives. At the end of the day, we have to come out with a design which is workable, and which addresses as many needs as possible.

Dr Michael Lim also brought up his perspective about pre-designating religious sites. Let me assure the House again that planning is a most difficult process. We have to trade off sometimes between flexibility and being overly specific at a premature point in time, in which case, we actually constrain flexibility. But having said that, wherever possible, if we are certain on the specific use of a site, the HDB will seek to transmit that information to the advisors and to the grassroots organisations as soon as possible. But I think Members will have to appreciate that sometimes we do not have all the answers at that point in time.

I want to move on to Mr Ang Mong Seng's point on wet markets. Prior to 1982, the HDB built wet markets in HDB towns. However, sometimes these things became a bit messy and unhygienic, and I take his point that this, to some extent, would have been caused by the fact that there was relative overcrowding, or too many people using it. But after 1982, a policy decision was made to stop building wet markets, and instead to build dry markets. These dry markets really consist of a cluster of market produce shops and a supermarket. But, in reality, what happened was that the shopkeepers and the residents started treating these like wet markets. This became neither fish nor fowl, and it ended up becoming a hybrid, which was just as messy.

After 1992, the HDB stopped building these dry markets and moved on to a new concept, which we called the "new market". These were similar in character to the wet markets, but there was a key difference. They were designed to be more hygienic, easily maintained, better drainage, wider aisles, and there were larger market stalls. These new markets are usually co-located with other retail and eating facilities in stand-alone neighbourhood centres. Such integrated facilities provide a better marketing and shopping environment for the residents. Examples of these would include Rivervale Plaza in Sengkang Town and the Yew Tee Shopping Centre in Chua Chu Kang.

Since October 2000, the HDB has also started tendering out designated sites in new towns to the private sector for the provision of retail marketing and eating facilities to meet the needs of the residents. The successful tenderer is allowed to decide whether he is going to construct a new market or a supermarket. But, obviously, this will have to take into account the residents' needs on the ground. We think that, in this way, we will evolve forms of markets which will address the needs of the residents, whilst at the same time being practical and hygienic.

The Chairman: Dr Teo Ho Pin, we are running behind time.

Dr Teo Ho Pin: Sir, despite contributing about 5-8% to our GDP yearly, the construction industry is not a sunrise industry. It faces problems of sustainable workload, shortage of labour, lack of innovation, low productivity and a poor public image.

To date, not much attention has been paid to the development of the construction industry. The recent failures of some large construction firms, which affected various public projects and many industries, clearly show signs of possible collapse of the industry.

The Construction 21 plan does not provide key strategies to develop our industry. There is a lack of focus to nurture local consultants and contractors to be world-class players. I would suggest that the Ministry set up an International Advisory Panel to develop our construction industry. Sir, I wish to ask the Minister the following questions:

(1) What are the key strategies in developing the construction industry? (2) What are the plans to nurture local consultants and contractors to be world-class players? (3) What are the strategies adopted by BCA to export construction services?

Mr Othman Haron Eusofe (Marine Parade): Sir, when construction companies, which are undertaking the MUPs or the IUPs in our housing estates, are not able to meet the project schedules, the residents staying in the MUP and IUP precincts are greatly inconvenienced. This will be more so where residents want to renovate their flats and cannot proceed because the internal upgrading works to be done by the MUP contractors are delayed. Further, the delay in the completion of the external works can also create problems of safety and security in the precincts.

Sir, I therefore would like to ask the Minister whether his Ministry or the HDB can assist where the contractors have some problems. Their problem may be of a temporary nature - sometimes it is just a cash-flow problem. Could the HDB come in to assist so that the work can be carried out without undue delay?

Sir, the other feedback we got is that the cause of failure of companies to complete the projects is because of the way we have selected these contractors, which is on the basis of the lowest tender. Sir, I agree that cost is an important consideration, but there are also other critical considerations if we want to ensure that the project can be completed in time. Sir, sometimes the companies that are selected are overstretched and, therefore, they cannot carry out the project in the way that it should be done. Sometimes, the way they manage the projects is also not what we had hoped for.

Sir, I hope that the Minister and the Ministry can look into these problems, so that our HDB MUP and IUP projects, which are actually good projects, can be done with the least inconvenience to the residents.

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 3.00 pm.

Sitting accordingly suspended at 2.40 pm until 3.00 pm. Sitting resumed at 3.00 pm

[Mr Speaker in the Chair]

Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

Head T (cont.) -

The Chairman: Dr Teo Ho Pin, you have three cuts which you can take together.

Dr Teo Ho Pin: Sir, first on sustainable construction. Sustainable construction is hardly practised in Singapore. To achieve the vision of our Green Plan 2012, we need to promote sustainable construction practices in Singapore. This will ensure a balance between sustainable development and maintaining a quality living environment.

Sir, there is not much incentive for sustainable construction practices in Singapore. As such, the impact of construction operations on the environment can be undesirable in the long run. I wish to ask the Minister the following questions:

(1) What are the initiatives taken to encourage sustainable

construction?

(2) How many construction firms are ISO 14000 registered?

Next, on construction technology. The incentive schemes by BCA have not been successful in encouraging technology innovations among contractors. As a result, many local construction firms have not developed any capability or niches to be globally competitive. Sir, I wish to seek the following clarifications from the Minister:

(1) What is the state of technological advances in our construction industry?

(2) How does BCA facilitate the introduction of new construction technologies in the industry?

(3) What are the R&D efforts by BCA to encourage technological innovations in the industry?

Next, on contractors' registry. The existing and proposed new contractor registration system by BCA has some fundamental flaws. It provides protectionist mechanism for consultants and contractors. This contradicts the Ministry's plan to promote self-regulation in the industry. At the same time, it restricts open competition among contractors based upon performance and track records. At present, the BCA registration scheme forces contractors to procure contracts at unrealistic tender prices and adopt substantial sub-contracting of their work to meet the registration requirements. This has resulted in the liquidation of firms causing delays of projects and loss of jobs to many Singaporeans. All these hamper efforts to develop the capability of our contractors and consultants.

Sir, I wish to seek the following clarifications from the Minister:

(1) Why do we need a contractor registration system while other industries do not?

(2) In the proposed contractor registration system, why is there a requirement to have one-third architects or engineers running a construction firm?

(3) How will it help in nurturing world-class construction

firms?

Mr Low Thia Khiang: Sir, precast concrete is now widely used for the construction of HDB flats. It has become important components of flats. I understand that in the past, HDB required the presence of inspectors before the casting was done. However, presently, the system has been changed to that of merely conducting random spot checks on the plant, and testing of the precast concrete.

In the light of the above, I would like the Minister to address two concerns. One, how does HDB ensure that the precast slabs are of acceptable quality and do not inherently contain potential problems, such as spalling in the future. Two, will the Minister explain and evaluate the current system of inspection and supervision of precast plants, and how the quality of precast concrete components in HDB flats is determined and assured?

The Senior Parliamentary Secretary to the Minister for National Development (Assoc. Prof. Koo Tsai Kee): Sir, on behalf of the Minister for National Development, I would like to thank all the Members for the questions. They raised important questions on an important sector of the economy. Sir, I would like to reassure Members that the Ministry is fully focused on the rehabilitation of the construction industry. Contractors in Singapore have made significant contributions to our economy without which our first-class economy could not have been built.

The MND is determined to help contractors ride out this very severe recession, at least as far as contracting is concerned. But like other sectors of the economy, Sir, contractors also have to restructure their business. The BCA is there to help them along. The BCA in Singapore is not just a regulator, but is also a promoter of the construction industry.

Sir, with your indulgence, I would like to answer Mr Low's question first, just in case I am guillotined by your samurai sword! Mr Low raised a point about the structural safety of precast components, ie, the strength of precast and prefabricated components used in constructing buildings. Essentially, he has asked how assured are we that there is no cutting of corners, there is no collusion and corruption in the precast yards.

Sir, all precast components used in buildings have to be certified by a professional engineer. In the trade, we call him or her PE. This PE is personally liable for the structural safety of buildings he or she designs, and this professional liability is a life-time liability. This liability cannot be extinguished until he or she dies. So long as the building stays, his or her liability is there. So, it is unlikely that a PE will treat the matter of safety lightly.

In all cases, we require a PE to certify that the structural component precast in the yard is safe; in other words, it is precast according to the working drawing. The working drawing is designed according to the loading of the building. If he or she cannot perform the supervision personally, then he or she can reassign the task to a clerk-of-works.

Sir, I come now to HDB, because HDB is the biggest developer in Singapore, and is a concern of the Ministry. Out of the 32 precast yards in Singapore, 28 of them are HDB-approved yards. In other words, we only buy from these HDB-approved yards. These yards provide precast components to HDB buildings. Because HDB is the biggest developer, it has even more stringent layers of checks. First, HDB will require a professional engineer or his clerk-of-works to certify the components before the parts are delivered to the building site. In other words, the checks must be done in the precast yard. This is on top of the requirement that these HDB-approved yards must have a resident engineer to supervise the overall casting procedures. So we have a resident engineer to oversee the yard; then we have a PE to certify each and every beam that comes to the site. If he or she cannot do it, he or she assigns that responsibility to a clerk-of-works.

Second, on special production lines, HDB requires that the casting and checking procedures be recorded 24 hours for validation purposes. In other words, the precast procedure is recorded.

Third, on site, HDB engineers will also do checks to make sure that the precast components delivered to the site before installation are of certified quality.

So, there are three layers of checks. Members can be assured that all buildings in Singapore are safe. If Mr Low knows of any collusion or corruption in any precast yard, please alert the Ministry, or he can report the matter to the CPIB. This is a very serious matter.

Sir, I will now go on to the questions raised by PAP MPs. I humbly disagree with Dr Teo that C 21 does not provide any strategic objective to uplift the ailing construction industry. In 1999, a comprehensive review of the industry was carried out. This review was jointly led by the Ministry of National Development, the Ministry of Manpower and all the related consultants, associations and contracting bodies in Singapore. Together, we agreed that the C 21 is the solution, not a problem to the construction industry. Sir, I will be happy to ask the BCA to update the GPC on the progress made by C 21.

Sir, one of the key strategies of C 21 is to raise the overall performance of the industry in terms of productivity and capabilities of our firms. After several years of negative productivity, the industry registered a humble but very encouraging positive productivity of 0.2% last year. Measures to raise productivity, including promoting buildability, raising minimum skill levels and cut in foreign man-year entitlements - what we call the MYE - are making good progress. However, it will take quite a while for the true benefits of these measures to be harvested.

Sir, to upgrade local capabilities, BCA works with EDB and SPRING to offer a broad range of schemes to encourage the industry to adopt new technologies. Since 2000, about $12 million worth of funds have been disbursed to almost 200 firms under the Industry Productivity Fund, Innovation Development Scheme and the Construction Jump Start Programme. The perception that there is a lack of innovation and technological applications in our industry is not quite correct. In fact, Dr Teo may be pleased to know that, in the last two years, BCA has invested something like $9 million for 20 R&D projects in four strategic areas, namely, IT, buildability, technology, building performance and high-performance materials.

Sir, in Singapore, both foreign and local construction companies can compete for our projects. The presence of these foreign companies - many of them with world-class capabilities - have, over the years, set new standards and challenged our local industries to upgrade themselves technologically and to remain competitive. HDB's precast technology, for example, has attained quite a reputation world wide. Some local specialist companies have also developed niche skills such as reclamation technology and marine engineering which can also be exported.

Sir, it will be unwise to pick winners and offer them contracts over and above contractors who offer good bids for us. Instead, the Government will provide a conducive environment to enable local firms to grow and upgrade to global standards.

Another key strategy to raise standards and benchmarks for contractors is to revamp the Contractors Registry System (CRS). From 1st July this year, companies registering for CRS will have to meet higher firm requirements for financial capacity, personnel and track record to reflect current market conditions. The requirement of one-third of professional personnel be registered engineers or architects with the Professional Engineers Board or the Board of Architects has been introduced to strengthen the technical expertise of construction companies. Given that most projects are getting larger and more complex over the years, the more stringent criterion in the CRS will move firms to upgrade and pool their resources with others.

Besides CRS changes, the Government will also be making legislative amendments to facilitate the formation of firms with multi-disciplinary capabilities to allow them to provide the full suite of services from design to build. At the same time, more projects of an integrated nature like design-and-build will be pushed out to allow our local industry to gain experience in this area.

Sir, while companies have strengthened their capabilities at home, BCA and IES will also actively encourage them to grow their businesses as a long-term strategy. There is a long-term export plan within C 21 to grow our industries and export them to the region. BCA is concentrating its efforts in cities like Beijing, Shanghai, Sichuan in China, and Bangalore and Hyderabad in India. In March last year, Chairman of BCA led a promotion mission to India. Later this month, the Minister for National Development, Mr Mah, will personally lead a business mission to China to promote the capabilities of our companies. 3.15 pm

I would like to thank Dr Teo for his idea of an international advisory panel to develop our construction industry. Indeed, the Economic Review Committee is looking into such ideas. They are looking at reputable construction companies in countries like South Korea, Japan and France, and try to learn from them as to how to remake our industry. The Working Group is still deliberating. I am sure some interesting ideas will come out of this report.

Dr Teo raised a point about sustainable construction industry. I am happy to note that this is something the BCA has been looking into in the last few years. In two years' time, all companies on the top two grades of the new CRS would have to be ISO 14000 certified. To-date, something like 32 companies are already ISO 14000 certified, and one-third of the companies on the top two grades, ie, the A1 and A2, are already ISO 14000 certified.

Public sector tender - this is an important subject raised by Mr Othman Eusofe and various MPs. The concern that HDB awards tenders to the lowest price, regardless of the performance of the contractors, is not quite correct. It is precisely for this reason that we have the Contractors Registry System. It is to sieve out unscrupulous contractors who have a bad track record with any of the Government agencies. Price is an important consideration, but there are other considerations, like track record, performance record, and also recommendations from other Ministries. It is not necessary for any Ministry to award a contract based on the lowest price. But since we already have a CRS, companies on that list are already pre-qualified. In other words, they are not so bad companies; very often, quite good companies. So there is no reason for us to strike them out, unless there is a very firm body of evidence to suggest that in the last few months, this company has gone bad.

On the state of the construction industry, the industry has suffered from the downturn in the economy. The demand for private and public housing has gone down. So the construction industry is at its crossroads. But we are sure that as the economy picks up, the construction industry will rise from the ashes. The revamped CRS is one approach taken by the BCA to make sure that when good times come again, we have good contractors ready to catch the wind.

Mr Zainul Abidin Rasheed: Sir, I will be brief but flowery. We all are very proud of our Garden City. Having done a successful job in greening our country, we have added more colours and we have also gone fruitful. I think one of the best drives of any airport in the world is the ECP, and we are proud of that. Recently, I was invited to the launching of "Adopt-A-Park" by the Telok Kurau Primary School. I gladly accepted the invitation and went there, but only to find out that the park actually belonged to another GRC. Although I have the beautiful Bedok Reservoir Park at neighbouring ward, belonging to BG George Yeo, and I am still proud of it, I miss the Punggol Park from Punggol East where I came from, from the last term. I really miss Punggol Park as a landmark area.

My question here is, coming from Eunos, which is a very old estate, there we have more of a concrete jungle rather than green. So I would like to see the National Parks Board and Ministry of National Development spend some effort to see how they can help old estates, where they have a lot of concrete but less green, add some element of green lungs. If they can look at even small corners here and there, and get the National Parks Board to inject some freshness, some green, some colour and some fruits, I think life will be a lot more meaningful.

Dr Michael Lim Chun Leng: Sir, URA is one of the most important land utilisation agencies in Singapore. In addition, there are other agencies such as JTC, HDB and SLA which have land utilisation programmes as well. Very often, more than one agency is involved with regard to the utilisation for the very same piece of land. This has caused problems for those who have purchased land from Government's land sales programmes or tenders. As land is an expensive resource which will tie down the capital of many investors, there is a need for Government agencies to coordinate their requirements and not be a hindrance to investors.

As such, a single Government agency should be formed for the purposes of land utilisation so that there can be better coordination between URA, JTC, HDB and SLA. This will allow smoother processing of administrative requirements and better management of the supply of land.

Next, Government should also consider reviewing development charges. The glut in commercial and industrial space has resulted in much space that has been left idle. To improve productivity and efficient utilisation of space, companies may have to reconsider change of use of space to improve space usage and increase the chances of viability of the business. Whenever there is a change of use, they have to apply to the relevant bodies like URA or SLA, which may then charge them hefty development charges. This will discourage the commercial space from being put into better use.

Bodies like URA and SLA should not be overly concerned about trying to squeeze the maximum out of every business as this will only accelerate the demise of these companies and thereafter, result in a loss of jobs. They should exercise appropriate professional judgement, taking into account that they are not there to make as much money as possible from commercial companies, but rather they are there to ensure that planning norms are adhered to and act according to the prevailing market situation without unduly burdening the companies. To incentivise companies to utilise idle economically inactive space, URA or other land agencies should, in fact, consider giving them a discount on the development charges and allow these charges to be paid over a period of time.

Lastly, there is a need to increase transparency and accountability. Land utilisation bodies must also be more transparent and accountable and must not change development charges unilaterally. They must tell the companies that the development charges are for proposed building plans and they should continue to revise development charges after approval has been given. Additional charges must never be an afterthought. A professional body, whether it be the URA, SLA or any other land utilisation agency, must refrain from piling charges. We need a body beyond the land utilisation agencies which can react quickly to resolve disputes whenever they arise. This dispute resolution body which hears appeals should be empowered to act quickly so that it will not increase the cost of business of a Singapore company.

In a globalised environment, where the economic challenges to Singapore are significant, our land agencies must be able to act professionally, be transparent, have high service standards and not be obstacles to business growth. It is time for the agencies to adopt a new mindset.

Dr Teo Ho Pin: Sir, I would like to seek the following clarifications from the Minister:

(1) What measures have been taken to increase the production of fish, eggs and vegetables in Singapore?

(2) What is the status and production output of our deep sea fish farm?

(3) Can the Ministry support high-rise farming in Singapore?

The Chairman: Prof. Low, we have less than six minutes for your speech and the reply.

Assoc. Prof. Low Seow Chay (Chua Chu Kang): Thank you, Mr Chairman, for the long time given.

Sir, food supply in Singapore depends almost fully on external sources, except only a small percentage on the high-tech farms in Singapore. Vegetables come mostly from Malaysia; fresh pork only from a small island called Pulau Bulan in Indonesia; fresh chickens only from Malaysia; and rice from Thailand. Due to the dependence on limited sources of supply, our food supply, in terms of quantity and price, fluctuates. The famous case was the ban of pork from Malaysia due to the Nipah virus. The price then increased by almost double. The increase in vegetable prices quite often could be due to the shortage of supply from Cameron Highlands because of bad weather, or it could be due to the ban of imports because of the high level of pesticides being used.

Sir, one of the ways to ensure less fluctuation of food supply and also their prices is to depend heavily on the diversification of the sources of supply that we can develop. I notice that there were businessmen following the Minister's visit to Pekan Baru sometime ago, and the objective of the visit was to develop a vegetable growing industry. Singapore also signs a pact with Thailand to ensure priority of supply of rice to Singapore. The Minister also visits Sichuan in order to secure pork supply from China. Recently, during the visit of our Prime Minister to Thailand, it has also been announced that there is a certain degree of agricultural food supply collaboration.

We have heard so much and are excited about all this publicity, but we see very little from the results of all these initiatives in diversifying our food supply. Could the Minister enlighten us on the progress of all these projects?

The other issue I would like to raise is regarding local farming.

The Chairman: Prof. Low, I presume you do not want a reply.

Assoc. Prof. Low Seow Chay: Let me talk about one important point. In the recent case of a murder in a Lim Chu Kang farm, the authority then realised that the farm hired a large number of illegal foreign workers. The question is: why did it hire illegal foreign workers? In fact, MND, or the former PPD and the current AVA, knew about the problem of shortage of labour. MND has either failed to convince MOM that such a project is important or it is, as what other people have commented, that the existence of all these high-tech farms is just to keep a pool of veterinary and agricultural experts to be hired by AVA.

I would like to ask the Minister whether the Ministry is serious about the development of all these local farms and what assistance the Ministry will render to expedite and develop all these projects announced.

The Chairman: Dr Balakrishnan, you have 21/2 minutes.

Dr Vivian Balakrishnan: As the sickle is about to be wielded, I am only going to talk about farming. Given our land constraints, it is impossible for us to be self-reliant. Our key is diversification. I just want to remind the House that we import vegetables from 32 countries, meat from 25 countries and fish from 89 countries. So we have multiple sources of food. The AVA seeks out and is continuously on the lookout for new sources of food. As we identify new sources, we try to transfer technology into these places. As we try to transfer technology, we also look to match-make them with our private sector so that funds from the private sector can invest in these agricultural expeditions, for instance, shrimp and fish processing in Myanmar, Malaysia and Vietnam, shrimp farming in Malaysia, vegetable farming in Indonesia and China, sea food processing and, of course, fresh pork supply in Australia. You can see the nice photos of that in yesterday's newspapers.

With respect to local farms, our objective is to provide technical advice to our farms because our farms cannot be the low-tech wide expanses of farms which you see in overseas countries. They have to be high-tech and high-productivity farms. There are no current commercial deep net cage fish farms in Singapore. However, the AVA has just completed a four-year pilot project to show that it is feasible to have good quality tropical fish in deep net cages in Singapore waters. The main constraint, however, is the absence of a reliable supply of fries. In this respect, I am glad to say that AVA has demonstrated that unlike human fertility, we are pretty good at fish fertility and we have been able to produce commercial quantities of fish fries which will be essential ingredients for our deep net cage fish farming. So, Dr Teo, take heart from that.

As regards high-rise farming, there is obviously a limit as to how much we can do. We cannot put the farms on top of our HDB blocks. They cannot take the weight of the irrigation systems which will be needed. However, if such high-rise farms indeed are economically viable, and the private sector is willing to bet and put money into it, MND will certainly facilitate this. 3.30 pm

The Chairman: Order. "Guillotine" time. Dr Teo, would you like to withdraw your amendment?

Dr Teo Ho Pin: Sir, I would like to thank the Minister, the MOS and SPS for their comprehensive and concise replies. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The sum of $350,428,120 for Head T ordered to stand part of the Main Estimates.

The sum of $9,150,268,900 for Head T ordered to stand part of the Development Estimates.

Head F -

The Chairman: Head F - Parliament. Mr Zainul, you have 10 minutes plus the reply.

Mr Zainul Abidin Rasheed: Sir, I beg to move,

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

My topic is on the global image of the Singapore Parliament. We have a very new Parliament House and also a new Speaker. I was fortunate enough to be sent by the Singapore Parliamentary Society (SPS) to the IPU Conference. There, I remember, at one session, the head of a delegation from Croatia stood up and started off by apologising and said, "I apologise to the gentlemen who are present here today. Next time, we will bring some male members to represent Croatia." It so happened that all the three members of the delegation were female. Sir, I expect that more and more of such conferences will be attended by female parliamentarians. I would like to see that Parliament be given more resources to prepare itself for this role. We suffer from bad breath from time to time. I think it is important that we are adequately represented in many of the international conferences. We have the IPU, AIPO and the Commonwealth Parliamentary Association. I hope that necessary resources should be given due attention, so that we can get more of our Members to attend such meetings and conferences, and our image be enhanced.

We also use this opportunity to show that we have democracy. Many of the conferences are also represented by Members of the Opposition. Mr Chiam was with me in Morocco, and Mr Low Thia Khiang too had been with the former Speaker to many other conferences. I hope Parliament will consider the necessary resources in order to play an effective role at overseas conferences.

The Deputy Leader of the House (Mr Mah Bow Tan): Sir, the point that Mr Zainul Abidin made is a very important one, ie, we should take every opportunity to enhance the image of our Parliament in international fora. But let me assure him that this is indeed being done and Parliament is well aware of this.

For the last 12 months, for example, 48 MPs actually participated in 16 overseas conferences, seminars, official visits and committees. I have a list here which indicates that the conferences included those in Cuba, Burkina Faso, New Zealand, Barbados, KL, Beijing, Marrakech in Morocco and many, many others.

Sir, the expenditure that is incurred in respect of participating in these conferences and seminars is budgeted for in the Parliament vote. And if there is a need to have more funds for such a purpose, I am sure that Parliament will allocate more funds for this purpose. True to Singapore's style, we have not been extravagant in such expenditure, as we are not prone to giving MPs junket trips, but neither have we skimped on participation. When we are invited, we assess whether we can make a contribution and if we can make a contribution, we have a role to play, we will go.

Our contribution has not been insignificant, if we judge by the role that we are playing in these conferences, considering the fact that we are a small state. At many of these conferences, we are represented in many of the committees. We sit on the committees, for example, in the Association of Asian Parliaments for Peace (AAPP) meeting in Beijing. At the Annual Meeting of the Asia Pacific Parliamentary Forum (APPF) in Honolulu, we were represented on the committee. In fact, we are also represented on several Standing Committees, and this includes the Commonwealth Parliamentary Association (CPA), the Commonwealth Speakers' Standing Committee and the Southeast Asian Regional Branch of the CPA.

Sir, we will do our best, even though we are a small Parliament, to be represented in as many parliamentary conferences and committees as we can. Our MPs are very busy people. They have their own jobs to do, they have to look after their constituencies, and they have to carry out their parliamentary duties. Having said all that, I think our Parliamentarians acquit themselves creditably in all these overseas conferences, including our MPs from the Opposition parties, Mr Chiam and Mr Low.

Mr Zainul made special mention of the role of women MPs. Here, I am pleased to inform him that the calibre of our women MPs has indeed been recognised by parliamentarians in other countries. If I may cite several examples, recently, Mdm Ho Geok Choo served on one of the committees at the AAPP. And likewise, Ms Irene Ng had served on a committee at the APPF. At the AIPO Conference in Thailand, two women parliamentarians, namely, Mrs Lim Hwee Hua and Dr Lily Neo, served on several committees and panels, including WAIPO, which is the Women Parliamentarians of AIPO.

When we are talking about the global image of the Singapore Parliament, there is the website that we maintain on the Internet. There are also the Parliamentary Reports that we put up on the Internet and LawNet, and all these are accessible world wide. We also hosted many attachments and study tours for Members and officials from foreign Parliaments. We have Parliamentary Friendship Groups with many other countries like Australia, China, Japan, Korea, Peru, etc, and many of our Members here are involved with such groups. We also have Regional Groups - West Asia group, Africa group, Asia Pacific group, Southeast Asia group, Europe group, Americas group - which also involve many other MPs. And, finally, of course, what Mr Zainul mentioned just now, the Singapore Parliamentary Society (SPS), which is a society which fosters relations with members of the CPA and IPU.

Sir, let me just say that we appreciate the Member's concern about upholding the global image of the Singapore Parliament. I would like to assure him that we will bear in mind his suggestion for more women MPs to be adequately represented at the relevant conferences.

The Chairman: Mr Zainul, would you like to withdraw your amendment?

Mr Zainul Abidin Rasheed: Sir, I am very grateful for the long reply given by Mr Mah. I am sure by that reply alone, the image of the Singapore Parliament is enhanced. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $27,787,800 for Head F ordered to stand part of the Main Estimates.

The sum of $3,972,700 for Head F ordered to stand part of the Development Estimates.

Head O -

The Chairman: Head O - Ministry of Health. Dr Lily Neo.

Dr Lily Neo (Jalan Besar): Sir, I beg to move,

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

Sir, the current quota of 33% on the admission of female students into the Faculty of Medicine, NUS, was introduced in 1979. No other faculty in NUS has such a quota. There is no other highly ranked university in the world that denies entry to qualified people on the basis of gender. The reason for introducing the quota for female medical students was that the attrition rate for female doctors prior to 1979 was 12-15%, and women doctors could not be assigned duties as freely as their male counterparts. However, these reasons are not valid any more. Currently, the attrition rate for male doctors is 2.8% and for female doctors is 4.2%. As for duties for doctors, women doctors have been assigned duties as men have, without distinction. They share night calls equally, attend to the same number of patients and perform the same medical and surgical procedures.

Sir, it is time to review the female quota for medical students now for the following reasons:

(1) The latest statistics reveal that the attrition rate is not significantly different for male and female doctors. The figures show that 95.8% of female doctors are still working compared to 97.2% of male doctors.

(2) The percentage for women part-time doctors is 13.5% and for male doctors is 4.1%. However, part-time practitioners are still contributing to Singapore's healthcare system and the use of part-time is an entirely arbitrary and self-declared status. Women who work four full days each week may well declare themselves as part-timers whereas men who take two or three afternoons off a week will still consider themselves working full-time.

(3) Women live longer than men. Therefore, the higher number of non-working female doctors may be accounted for in part, by the higher number of retired women doctors. This may also mean that the working life of women doctors is longer and hence total productivity over their lifetime may equal or exceed that of their male colleagues.

(4) Both male and female doctors serve their compulsory five-year bond for newly qualified doctors. This should count as partial fulfilment of their responsibilities for their educational subsidy. Even allowing for the greater social responsibilities of doctors whose training is subsidised, it seems illogical that doctors should be singled out and expected to be "serving" in the medical profession for life. No other professional faculty, or Government scholarship programme, has a similar quota on women. Thus, the quota appears to rest on an unreasonable "moral" obligation on all doctors.

(5) Studies in other countries have shown that due to better communication skills of female doctors, mothers prefer to take their young children to see women doctors whom they feel may interact and empathise better with children as well as with themselves, as women and mothers. Since women comprise more than 50% of the population in Singapore, they should not be denied access to sufficient women doctors to cater to their needs.

(6) Many of the qualified female students who were rejected by NUS have gone abroad to study medicine. Many of them get married and stay on to work there. As a result, we lose highly skilled talent.

(7) With the strong push for the life sciences industry, Singapore needs better trained personnel who can bridge the gap between the pure scientist in the industry and the medical practitioner. Women doctors would be well placed to take up these jobs, as such jobs have more regular working hours.

Sir, Singapore prides itself on being a meritocratic society. On this issue, our women are only asking for equal treatment in the competition to enter medical school.

Sir, my next cut is on ElderShield. It was announced last year that ElderShield, the national insurance plan to help older people who become disabled, will start in September this year. While I welcome help for the older disabled, I would like to raise some of the inadequacies of this proposed national insurance plan. 3.45 pm

This opt-out scheme will entitle a subscriber to draw $300 a month for up to five years if the subscriber is unable to carry out unaided at least three of the following activities: eating, bathing, walking, dressing, getting up and going to the toilet. I would say that application of such criteria means that the subscriber is, in fact, totally dependent on another person daily. Sir, may I ask then how such a person can survive with $300 per month? The situation will be even worse for those who are less well-off and have no other savings. Those who do not look into the details of the plan may, in fact, get a false sense of security and think that their old age woes will be taken care of by this national insurance.

The majority of cases of severe disability are the result of diseases, such as stroke and so on. Sir, usually this means that the dependent elderly will also need long-term medications on an outpatient basis. At the moment, patients can only claim from Medisave or MediShield for medical care if they are warded in hospitals. A tendency for patients to opt for institutional care, costing as much as $120 per day, therefore arises. It is really a pity if any national insurance scheme does not address this issue.

There is always the argument that higher disbursements and coverage will mean higher premium at the outset. I accept this argument, but I also feel that it is not much good having an insurance plan that cannot adequately serve the purpose it is intended for. I am sure the Ministry of Health has the statistics and resources to better plan and package a really sound scheme. The probability of our Government subsidising the premium, especially for the poor and/or non-working, must be on the cards. Sir, in view of our fast-aging population, it is better to help with a small outlay in terms of insurance premium at the outset than to carry the heavy burdens later. A Government subsidy will also reduce the percentage of those opting out. More attention should be paid to the less well-off in our society. In relation to family income, some sort of cut-off point, below which a subsidy for higher disbursements may be given, would also be a reasonable consideration.

I hope the Ministry of Health can reconsider the implementation of ElderShield with the above-mentioned points.

Mdm Halimah Yacob: Sir, I agree that the ElderShield scheme is a good scheme, and it will help older Singaporeans who truly deserve something in return. But I have a couple of issues to raise with regard to the application of this scheme.

Firstly, I find that the scheme has too many conditions and appear to have restricted application. To benefit from it, an elderly Singaporean will actually have to be almost bed-ridden. This is because it applies to those who cannot do at least three of the following: they cannot move, feed, transfer, dress, wash or go to the toilet unassisted.

Secondly, the elderly person's claims can be disputed by a joint panel of assessors and, if there is a dispute, then the elderly person will have to engage his own doctor, at his own expense, to dispute the assessment made by the insurance company's panel of doctors. Most of the elderly disabled will not be able to afford paying for this extra cost. In order to ensure greater objectivity, I would like to suggest that MOH appoint the assessors instead of leaving this to the insurance companies.

Thirdly, those with pre-existing disabilities and those above 69 years of age will not be covered. True, they will be covered under the IDAPE, but this scheme covers only those with household income not exceeding $700-1,000 per month, which is very low.

Fourthly, Sir, the scheme provides payment for only up to five years. Beyond that, the disabled elderly will be unprotected.

May I ask the Minister to be more flexible and to review all these restrictive qualifying conditions, so that the ElderShield scheme can be more effective and can cover more elderly Singaporeans.

I would also like to ask the Minister what more can be done to facilitate the development of step-down care in Singapore, so that disabled elderly Singaporeans can have more proper home care and community-based services; in other words, providing this ElderShield scheme should be but one facet of a holistic scheme of caring for the needs of elderly Singaporeans.

Finally, Sir, as the ElderShield is an opt-out scheme, I would like to know what measures the Ministry would take to educate the public not to opt out of the scheme, as they may not need it now but will do so as they grow older.

Mr Yeo Guat Kwang (Aljunied): Sir, our healthcare system is based on Medisave, MediShield and Medifund. They reflect the principles of individual responsibility through Medisave savings, shared risk-pooling through MediShield, with the Government providing a universal layer of safety net through Medifund. These three schemes ensure that Singaporeans will have access to quality medical care.

Sir, in a way, the MediShield scheme is a portable scheme that has a wide coverage. Although it has been continuously fine-tuned and improved after it was implemented in July 1990, I would like to find out if the Ministry plans to enhance the scheme further. I have four specific suggestions.

First, bring more Singaporeans under MediShield coverage. The scheme is voluntary and Singaporeans can opt out of it. I understand that quite a big number of people have actually opted out. Should we make it compulsory? What is the number of Singaporeans who are not covered by MediShield or any of the approved CPF medical insurance schemes? What more can be done to bring more Singaporeans under such coverage?

Second, include enhanced coverage of non-working spouse and children. This will allow a CPF account holder to cover his wife and the whole family under the insurance scheme.

Third, under the present system, the older members have to pay a higher premium. Would the Ministry consider pre-funding features for the MediShield scheme?

Fourth, enlarging the pool of approved medical insurance schemes, so that more insurers can build portable features into the basic schemes. This will facilitate the implementation of portable medical benefits. Apart from MediShield, would the Ministry consider more Medisave-approved medical insurance schemes offered by private insurers to make the proposed portable medical benefits scheme more responsive to their needs?

Mr Gan Kim Yong (Holland-Bukit Panjang): Sir, the MediShield scheme was introduced in 1990 to complement the Medisave scheme in helping Singaporeans meet their medical expenses from major and prolonged illnesses, which the Medisave alone may not have sufficient balances to cover.

Sir, MediShield is an important safety net to ensure that Singaporeans will not be denied critical medical treatment when they are suddenly struck by chronic illnesses which may require protracted and costly treatment. It is a risk-pooling mechanism to reduce the overall cost of obtaining medical treatment for those who are unfortunate enough to need it. It is, therefore, crucial that all Singaporeans are covered under the scheme. I, therefore, share the same sentiment as Mr Yeo Guat Kwang that we should encourage all Singaporeans to come under this scheme. Otherwise, when they cannot afford the medical treatment they need, they will invariably turn to the Government for help. I would, therefore, like to ask the Minister whether his Ministry has plans to encourage those who are not yet covered under the scheme to sign up for the scheme as soon as possible.

One of the main setbacks of the MediShield scheme really is that it is an insurance scheme and, as such, the premium that is paid is not recoverable. For a person who remains healthy, he actually gets nothing in return. Perhaps one could argue that his greatest return is his health. This perspective is not wrong. But we should still ask: is the scheme cost-effective? Therefore, I would like to ask the Minister whether he could let us know how much premium has been collected over the last five years and how much has the total pay-out been. If there is a significant surplus, then would it be possible to either reduce the premium to encourage more Singaporeans to sign on, or to enhance the scheme without increasing the premium?

Sir, as we continue to enhance the MediShield scheme, I am not sure we can afford to always do so without raising the premium. I believe that there is no free lunch and we will need to raise the premium at some point in time. However, it is important that the premium remains affordable, especially for the lower income group, as they need it most. I would like to urge the Minister to ensure that future increases in the premium, if any, should take into account affordability.

Mdm Halimah Yacob: Sir, in 1993, the Government published the White Paper on affordable healthcare in Singapore. Despite this, Singaporeans today remain concerned about the affordability of healthcare. There is some basis for this concern as, on average, healthcare costs have been increasing at the rate of 6% per year. Singaporeans are asking what are the main causes for the increase, and is there no control on such increase in costs? Is the increase in costs due to the increased salaries and fees of doctors and specialists due to the need for the Government and restructured hospitals to catch up with the private sector's pay scales and fees? If so, then, surely, some long-term solutions will have to be found, such as increasing the supply of such specialists or providing more competition for specialist care in Singapore.

Or is the rising cost of healthcare in Singapore due to improvements in medical technology? If new technology is the culprit, then I am a little bit puzzled as to why the logic that prevailed in the case of new technology in other sectors did not apply in the medical services. If we look at technology in other sectors, such as computers, for instance, we will see that, over time, the price of such technology invariably goes down. So, should not one expect the same for medical technology? The new products will be expensive but, over time, the same product should be cheaper, and this should translate into cheaper medical costs. At the very least, it should not be cited as a reason to justify the increasing medical costs. Also, on the point of technology, is there any control over new technology that is being used to determine whether they are really necessary, or just good to have?

Sir, Singaporeans are also asking, and they want to know, whether all these big hospital buildings that we now see are adding to the increasing costs. For instance, will it not cost more to maintain these buildings and keep them clean, compared to the minimalist and spartan hospitals of old? After all, what anyone who goes to the hospital wants is good and affordable medical care, and he/she will be too sick to appreciate the wonderful ambience.

Sir, I hope that the Minister could throw some light on this very fundamental issue of why our healthcare costs are increasing, and what productivity and control measures have been put in place to prevent the spiralling of healthcare costs in Singapore. Would the Minister consider setting up an audit committee, a body, for instance, comprising health economists and members of the public, to audit increases in healthcare costs in Singapore similar to the role played by the Public Transport Council?

I would also like to ask the Minister whether with the average 6% yearly increase in healthcare costs, the current Medisave contribution rate will be sufficient to meet the medical needs of Singaporeans. The Ministry of Health has explained before that the Medisave amount is sufficient for Singaporeans to pay for about 10 or 11 bouts of hospitalisation. Could the Minister enlighten the House as to whether in making this estimation, the Ministry has taken into account the fact that many Singaporeans today are not taking care of only their own hospitalisation needs, but they also have to provide for elderly parents who do not have Medisave savings of their own?

Sir, the truth of the matter is also that, today, those who feel the most pressurised are those in the middle income, as the poor and the lower income have a lot of assistance in the form of grants and subsidies from the Government. I would appreciate a response to these issues which I have raised for the Minister.

Dr Ong Seh Hong (Aljunied): Sir, I share the concern of rising healthcare cost, as highlighted by the hon. Member, Mdm Halimah.

Sir, healthcare cost is rising because of several factors, such as aging population, introduction of new medical technology, use of newer drugs which are still under patents and, therefore, the cheaper generic drugs are not available, increasing demand of better-informed customers, ie, the patients themselves or their family, and rising labour costs. May I urge the Minister to look at the ways to contain the rising cost before passing them on to the patients and their family?

When it comes to paying bills, our healthcare financing policy has always been to rely on co-payment to minimise abuse and wastage of our healthcare resources. This is well and good. However, I am concerned that in our haste to recover costs and to balance the budget, perhaps we have been pricing our healthcare costs too high to the patients, beyond the affordability of some of them. I feel that a bigger burden has been passed on to the patients and their family, sometimes more than they can afford.

One point to note is that MOH has actually introduced means testing for step-down care services, such as nursing homes and chronic sick hospitals. It will apply to community hospital patients in July this year and I understand that, eventually, all acute hospital patients will also be means-tested. Here, I must first declare my interest as the Medical Director of Ren Ci Hospital, which will be opening its 200-bedded community hospital this year. I agree with the principle of means testing, so that the poorer patients actually get more subsidies while the better-off should bear a bigger burden of their medical bills. However, I find that our policy to subvent only the poorer half of the population's healthcare will make it unaffordable to many who are caught in between. Under the means-testing for a community hospital, for example, only the poorer half will get the Government's subvention between 25% and 75% of the cost. The cut-off is per capita household income of about $1,000. 4.00 pm

Let me illustrate my point using a very simple example. The norm cost of a "C" class in a community hospital's stay is about $200 per day, and the average length of stay is about four weeks. The average cost per hospital stay will therefore be about $5,600. Using our national statistics, the median household income is about $3,600. So if one is unlucky and probably has about $5,000 household income, most likely, he would not pass this means test and he would have to bear the whole amount, which is more than one month's income of the whole household.

Even for those who just pass the means test and are eligible for 25% subvention, 75% of $5,600 would mean a hefty bill of $4,200. Compare this to the existing system which allows the patients to choose the class they wish to stay, if they stay in "C" class, they will get 80% of the subsidies. I feel that more people will be left out with this new means test.

Therefore, I would like to urge the Minister to reconsider the policy of subventing only the poorer half of the population. Precisely because the healthcare cost is rising, more people are in need of subsidised healthcare. I would urge the Ministry to grant more subventions to patients and to make our healthcare more affordable. Otherwise, I am afraid the coffeeshop talk of "can die, cannot sick" may one day come true, which I certainly do not hope to see.

Mr Ong Ah Heng (Nee Soon Central): (In Mandarin): Sir, the points I wish to raise on this amendment are somewhat similar to what my parliamentary colleagues before me have just mentioned.

Singapore has been said to come a long way in improving the standard of health and providing good medical and healthcare services to its people. Today, the state of health of the people in Singapore has attained international standard. In 1993, a White Paper entitled "Affordable Healthcare" was published, spelling out the Government's commitment to provide good affordable basic healthcare to Singaporeans. This is done through the provision of heavily subsidised medical services in Government hospitals and polyclinics.

In the early 1990s, the Government hospitals were restructured with the objective of providing quality medical services comparable to the private hospitals. In 1999, the public healthcare delivery system was reorganised into two vertical groups - National Healthcare Group and the Singapore Health Services.

One of the suggestions of the Remaking Committee is to develop Singapore into a medical hub. This kind of foresight and spontaneity is a driving force in sustaining our long-term survival. As our colleagues have said, we have been constantly introducing more advanced medical technologies to Singapore to further enhance our healthcare standards. However, my concern is whether this will cause our medical cost to go up even further.

Of course, rising expectations of our people for better medical and healthcare services may also be a contributing factor to our escalating medical cost. But a lot of people are saying that the Government is trying to recover its cost, even the cost of building hospitals, and that is the main reason for raising the medical fees!

Sir, I am raising this issue because our healthcare delivery system is based on individual's responsibility plus Government subsidy to make the basic healthcare service affordable. The medical expenses keep going up, very soon the lower-income group and the elderly in our population will not be able to afford them.

One resident in my Constituency, who is a hypertension patient, told me that when he was taking the medication from the polyclinics in Singapore, it would cost him $1-2 per day. But when he bought the same medicine from Johor Baru, he paid only 60 cents for it. He told me that he had been taking the cheaper medicine he bought from Johor for the last two years. He is happy and he is still alive and kicking.

I would like to ask the Minister whether there is some form of control on the prices of medicine sold in Singapore. Since we are controlling the type of medicines that can be sold in Singapore, can we not also check on the prices at which they are being sold to the end consumers? If these medicines can be sold at Johor Baru at much lower prices, why cannot something be done to ensure that our retailers sell these medicines at comparable prices?

The rich people, of course, can go to expensive, air-conditioned hospitals and enjoy the comfort there. For the poorer patients, they can only go to a third-class hospital. The rich people take expensive ginseng and bird's nest, but a poor man can settle for an inexpensive glass of soybean drink. Can we not allow some form of generic medicines with the same therapeutic effect to be sold in Singapore, so that the people in the lower income group could find them more affordable?

Dr Ong Seh Ong has just mentioned that Singaporeans like to say, "you can die, but you cannot afford to be sick here". We should give the people the impression that in Singapore, even when you are sick, you will not die.

Dr Michael Lim Chun Leng: Sir, affordable healthcare has been a key policy of the PAP Government. Medisave, MediShield and Medifund (3M framework) have been the three main pillars of our health payment schemes. I am glad that the Ministry will be improving on the 3M framework, a review that is long overdue.

Primary healthcare services continue to be affordable for most Singaporeans due to the significant presence of general practitioners in the HDB heartlands together with the polyclinics. This has resulted in a very affordable primary healthcare system. It is when Singaporeans go to hospitals that their cost start to escalate. This is not unexpected in hospitals where highly-trained staff, expensive up-to-date equipment, well-trained specialists and branded drugs are commonly used. What the Ministry needs to do is to review the 3M framework to help Singaporeans meet the cost of hospitalisation and outpatient specialist care.

Medicine has come a long way, where in the past, heart disease, kidney failure or cancer spelt a dismal outcome or even death for many Singaporeans. Modern medicine has enabled many to be treated, with a good quality of life. The only problem is cost. As such, the Ministry should consider allowing the use of Medisave for diagnosis or management of major chronic illnesses, on an outpatient basis. This should include conditions like heart disease, kidney failure, cancer and diabetes.

The Medisave withdrawal limit, for many of the procedures done in the hospitals, has not been revised for a very, very long time. As a result, many of these procedures that have become routine, have not been adequately covered by the Medisave withdrawal limit. It is time for it to be reviewed. For most patients, the last six months of their lives is the period when their medical bill will be the highest. MediShield should be revised to provide adequate coverage for major catastrophic illnesses and to take into account this fact as well.

Finally, it is important that our public health institutions must realise that their aim is not to make money from Singaporeans. I wish to quote a case which has troubled my heart greatly. A resident had come to see me at the meet-the-people session because his child was born premature in Mount Alvernia Hospital and required intensive care and surgical treatment. He sought my assistance to have the child transferred to KK Hospital. KK Hospital's specialist told him that the child needed surgery that could not be performed in Mount Alvernia but only in KK Hospital. After their appeal, KK Hospital agreed to have the patient transferred to them provided that the family put up a $20,000 deposit to the hospital. The young couple was at their wits' end and had to borrow the $20,000 from friends and relatives. Just when they thought they had solved the problem and they went to the hospital, they were told by the hospital's administrators, "No, no, not enough. Now we need $60,000 as a deposit before we are willing to take your child". They came to see me, utterly devastated. Finally, the patient was taken only when Mount Alvernia Hospital had given a guarantee.

I wonder how this event would have turned out if Mount Alvernia Hospital did not provide a guarantee. Our public hospitals have rallied to the cause of foreign patients with poor prognosis, such as in the widely publicised surgery of the Siamese twins and the Indonesian child with hydrocephalus. Would our public hospitals let the Singaporean baby suffer and perhaps, even perish, as long as the parents were not able to raise the money or no one was able to provide a guarantee? Are Singaporeans to be denied access to our public activities because they are unable to meet the high fees demanded of them?

The final letter I got from the hospital was that if I wished to pursue the case further, I should know that the hospital was a cost centre, and economic consideration was an important factor. I am extremely saddened by the entire incident and I hope it does not signal a policy shift in our public hospitals. Can the Minister reassure all Singaporeans that they have a right of access to taxpayers' funded public hospitals and affordability will never be the reason for denying them admission to a public hospital?

Mr Gan Kim Yong: Sir, the Medifund was an endowment fund set up by the Government in 1993. With an initial capital of $200 million, the fund has now grown to $800 million.

A total of $27 million has been disbursed in 2001, out of $30 million available. This represents a 90% utilisation rate. This implies that the fund has been well utilised and has served its purpose of helping the lower-income families cope with their healthcare cost.

However, I am rather concerned, like other MPs before me, with the consistent increase in healthcare costs. If we look at the Economic Survey which was distributed last week, at page 98, there is a table showing the consumer price index, broken down by categories. First quarter 2002 saw the overall CPI decline by 0.9% over the same quarter in the previous year. In contrast, healthcare cost increased by 2.4% over the same period. The healthcare category has the highest rate of increase. If we take the whole of 2001 compared to the year 2000, the overall CPI increased by 1%, while healthcare costs increased by 3.3%, more than three times. Again, it is the highest category. If we take a longer time horizon and compare 2001 with 1997, the overall CPI increased by 2.1%, while healthcare costs went up by 10%, almost five times, over the last four years. Again, it is the highest category. Perhaps, the quality of healthcare services has improved. But we need to keep in mind the affordability of healthcare cost.

Sir, even when the economy recovers, the job situation will remain weak for some time, as the same Economic Survey has already pointed out. Unemployment will worsen before it improves. Wages are likely to be further reduced. Given this likely scenario, Sir, our people would be very concerned with the rising healthcare costs. I am glad that the Government has promised that it will absorb the proposed GST increase for healthcare services. But if healthcare cost continues to rise, it will negate the goodwill gesture of the Government. I would, therefore, like to urge the Government to monitor the situation and take steps to contain the rise in healthcare costs.

The increase in healthcare costs over the last few years, coupled with the unemployment and wage reduction, may also result in more people needing help for their basic healthcare services. It is, therefore, important for us to ensure that our basic safety net, such as the Medifund, is adequate in responding to the needs of the people. The fact that the utilisation rate of Medifund is high is also evidence that perhaps more people would need help.

Therefore, I would like to ask the Minister to consider expanding the Medifund scheme to meet the greater needs arising from higher healthcare costs.

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