SARS: A NATIONAL RESPONSE (Statement by the Deputy Prime Minister and Minister for Finance)

Mr Chiam See Tong asked the Deputy Prime Minister and Minister for Finance in the light of the difficult economic situation, whether he is willing to allow property tax to be paid by instalments rather than the full tax be paid in one lump sum.

Dr Amy Khor Lean Suan asked the Minister for Trade and Industry (a) what is his Ministry's assessment of the impact of the Iraq war and the outbreak of Severe Acute Respiratory Syndrome on the various sectors of our economy and the overall estimated economic growth rate for Singapore for 2003; and (b) what measures may be taken by the Ministry to help counter some of these negative factors.

Mdm Halimah Yacob asked the Minister for Trade and Industry (a) to what extent has the outbreak of the Severe Acute Respiratory Syndrome affected our economy; (b) will it have an impact on Singapore's economic growth forecast for this year; and (c) what measures are being taken to counter the adverse impact on our economy.

Ms Olivia Lum asked the Minister for Trade and Industry if the Ministry will take any specific interim measures to ease the burden and cushion the adverse impact on businesses in the retail sector, in the event that the outbreak of Severe Acute Respiratory Syndrome (SARS) is prolonged further.

Mdm Ho Geok Choo asked the Minister for Trade and Industry, in view of the statistical study which showed that the financial liabilities of Singaporeans soared from 118% of personal disposable income to 174% in 2000, (a) what are the implications on the indebtedness of Singaporeans in the present economic downturn which will be further paralysed by microbe economics, ie, Severe Acute Respiratory Syndrome (SARS); (b) if the economy contracts further and over a longer period, what assistance will be considered to ease the financial debt burden of these household borrowers; and (c) how will Singapore combat the perception and fears of foreigners with regard to SARS in Singapore which has already set in motion a drastic drop in tourist arrivals, students from China returning for studies and businesses holding their meetings in Singapore.

Mr Gan Kim Yong asked the Deputy Prime Minister and Minister for Finance in view of the adverse impact of the Severe Acute Respiratory Syndrome outbreak on the businesses of Housing and Development Board commercial tenants, whether the Ministry will consider providing some temporary relief such as rental reduction or rebates, especially for those directly impacted by the crisis such as student care centres, tuition centres, child care centres and kindergartens which have to be closed as a precautionary measure.

Mr Low Thia Khiang asked the Prime Minister (a) what is his assessment of the current standard of living or quality of life of Singaporeans in view of SARS and the economic situation; and (b) whether there is an immediate need to introduce measures to help Singaporeans mitigate the difficulties.

Dr Mohamad Maliki Bin Osman asked the Prime Minister what is the Government doing to boost the morale of Singaporeans given the current climate amidst the end of the Iraq war, the SARS outbreak and the gloomy employment forecast.

The Deputy Prime Minister and Minister for Finance (Mr Lee Hsien Loong): Mr Speaker, Sir, with your permission, I will answer all the Questions under my name, as well as the Minister for Trade and Industry's name, on the Order Paper, in my Ministerial Statement. With your permission, I will begin my Ministerial Statement now.

Mr Speaker, Sir, the Severe Acute Respiratory Syndrome (SARS) is a grave threat to Singapore. It has taken a heavy toll on our public health, our economy and our society. We have to muster all our resolve and resources, in order to fight SARS. Then we can bring the SARS outbreak under control, restore confidence, boost morale, and get the economy moving. If we fail to do so, and allow the disease to overwhelm us, the consequences will be catastrophic.

Tackling SARS calls for an effective and comprehensive plan, rigorously implemented, with the full support and cooperation of Singaporeans. We have mobilised the whole Government machinery for this purpose. The Ministry of Health and the hospitals are fully engaged in the medical measures to combat SARS. In addition, we have set up a Ministerial Committee, chaired by Mr Wong Kan Seng, to coordinate all the ministries and departments involved, to support the Ministry of Health and to direct the broader response.

Mr Lim Hng Khiang has just presented the public health measures. Let me now explain the overall action plan. There are three battlefronts - public health, the economy and the society.

Battlefront 1 - Public health

Firstly, public health. Besides medically treating those who have caught the disease, we must take public health measures to stop the spread of the illness, and to minimise the number of people who fall ill. We need to set up lines of defence around three groups of people. First, those who are already infected or who might be infected; second, those who are not infected; and third, those entering Singapore who might bring in the virus.

Detect, isolate and contain

For those who are already infected or who might be infected, our strategy is to "detect, isolate and contain". This means sending those who are ill with SARS promptly to the Tan Tock Seng Hospital, contact tracing - to identify and locate those who have had contact with SARS patients, and issuing Home Quarantine Orders (HQOs) to those who are at risk. The HQOs are to put their health under close monitoring, and also to prevent them from spreading the virus to others. This way we can break the cycle of infection and spread, and bring the outbreak under control.

The most stringent precautions are taken at the hospitals. That is where most of the SARS patients are. They must be prevented from infecting other patients or healthcare workers. If doctors and nurses get infected and fall victim to the disease, our healthcare system may collapse, and SARS will spiral out of control. Hence healthcare workers are required to don protective gear and to monitor their own temperatures closely. We have also severely restricted visits by family members and friends to patients in hospital. These stringent measures are working. Because of them, since 31st March, no patients in Tan Tock Seng Hospital have fallen ill from SARS as a result of being infected in the hospital.

In the community, we must trace all the contacts of SARS patients quickly and comprehensively, and place them on home quarantine. For this strategy to work, patients and their families have to cooperate with the authorities, to tell fully and truthfully where the patient has been and whom he has had contact with. And, if there is somebody or some place you have been to, and you do not want to tell us about, well, that is big trouble. Also the quarantine system has to be watertight. It takes only one undeclared contact, one irresponsible breach of an HQO, to start a whole new cluster of infections. It is therefore absolutely essential that those served with HQOs obey the orders and stay at home, and not put many others at risk. Thus we have acted firmly against HQO defaulters. We have installed electronic cameras in their homes, and implemented tougher enforcement measures such as electronic tagging. While most people on HQOs have complied and cooperated, a minority are recalcitrant and incorrigible, and I think the public understands that we have to take serious measures. I received a fax today from a member of the public who says, "When you ring them up, better make sure that they are not using call forwarding." I have asked the Minister in charge to fix that.

This is why the Minister for Health is amending the Infectious Diseases Act, on a Certificate of Urgency, to give additional powers to the Ministry to take action against persons who breach HQOs, refuse to cooperate with health officers to take SARS control measures, wilfully hide medical information related to SARS control, or fail to comply with any directives or regulations related to SARS control. Violators can be levied composition fines of up to $5,000, instead of being charged in court. Furthermore, the general penalty for committing an offence under the Act will be doubled, to a maximum of $10,000 or 6 months' imprisonment for a first offence, and $20,000 or 12 months for a repeat offence.

These public health measures to "detect, isolate and contain" the disease are all the more necessary because there is not yet a diagnostic test for SARS, which can tell quickly and reliably whether or not a suspected case has the disease. Scientists in A*STAR research institutes in Singapore have been working flat out as part of a worldwide effort to identify and understand the SARS virus. They have successfully mapped the genome of the SARS virus, confirming and extending the results of mappings done elsewhere. The Genome Institute of Singapore is developing new diagnostic methods, and several other diagnostic methods are becoming available from other laboratories. We will be testing these out over the next weeks and months, to identify the best methods to use, and I believe the methods will improve over time, as the scientists work at it. The ultimate goal of the scientific research is to develop a treatment and a vaccine for SARS, but this is not going to occur overnight, and may take several years or even longer.

Protect and Monitor the healthy

For those who are not infected, we are taking vigorous measures to prevent them from contracting SARS. We need to pay special attention to public areas with heavy human traffic, and mass institutions such as schools and military camps.

The Ministry of the Environment (ENV) has taken preventive actions to raise the overall standard of public health and hygiene, to minimise the risk of environmental transmission of SARS. ENV will clean and disinfect public areas, check for and eliminate pests, ensure that waste disposal and collection is done properly, and make sure our sewerage systems are in proper working order. We will also ensure that our environmental workers are properly equipped and protected, so that they do not inadvertently become a mode of transmission. Within the next week, ENV will work with market stallholders to spring-clean all wet markets. Food handlers in all food establishments will be required to take their temperatures twice a day.

The Ministry of National Development, together with HDB and Town Councils, has instituted several measures to improve the cleanliness of our housing estates. These include stepping up the general cleaning of HDB common areas and implementing an SOP to respond to complaints of sanitary pipe leaks within 24 hours. The Building Control Authority (BCA) has reminded all Management Corporations of private buildings to maintain the sanitary pipes in their buildings in good working condition.

The Ministry of Education (MOE) has also introduced a series of measures. Schools are educating students about SARS, issuing every student with a personal thermometer, and teaching them to check their own temperatures daily. Students and staff are also required to regularly declare their travel history. The institutes of higher learning are segmenting their large campuses into smaller sections, to reduce movement across the campus and to facilitate contact tracing should a SARS case occur.

The Ministry of Education and the Ministry of Community Development and Sports (MCDS) have implemented standard operating procedures for child-care centres and kindergartens, to screen and manage the children.

The Ministry of Defence (MINDEF) has instituted all possible precautionary measures. It has disseminated to all Singapore Armed Forces (SAF) units information on SARS, tips on personal hygiene, travel advisory, and procedures for handling suspected SARS cases. Critical units are working in shifts to ensure that operations continue seamlessly in case there is an outbreak in the units. All recruits and NSmen undergoing in-camp training will be screened for SARS daily. By the end of this month, MINDEF will issue personal thermometers to all MINDEF and SAF personnel to do twice daily temperature checks. These measures will keep the SAF SARS-free, while maintaining its operational readiness.

It is a useful practice for Singaporeans to take their own temperatures daily and, if they have a fever, to stay away from work or school and see their doctor. Temperatures are already being taken at many workplaces and large gatherings, and Members had their temperatures taken before coming into Parliament House today. It reassures everyone who is there that the group is less likely to contain an infectious SARS case, and it helps to detect early anyone who is ill, before he can infect too many people. Even if this measure is only partially effective, it will still reduce the chances of SARS spreading from one person to many others, and thus help us to bring the outbreak under control.

Every home should have a thermometer. Every Singaporean should know how to take his temperature, so that he can take personal responsibility for his own health, and monitor his own and his family's temperatures. It will take a month or two to obtain the supplies, distribute the thermometers to homes, and teach Singaporeans how to use them. Our first priority is to provide all pupils in schools, and SAF personnel, with thermometers. After that we will progressively supply the homes with thermometers, and each home should have one. By June, every student and every household should have a thermometer, and should use it.

Safeguard borders

A third major concern is to prevent fresh cases of SARS from being introduced into Singapore by travellers, and Singaporeans infected with SARS from going abroad and infecting other countries. SARS is a major problem in China and Hong Kong, and cases have been reported in nearly every country in the region, including Malaysia and Indonesia. We must expect new index cases to enter Singapore from time to time. This was, in fact, how the SARS outbreak in Singapore started.

We cannot shut our borders, and stop the movement of people and businesses completely. But we must institute effective border controls, to identify people with fever so that they can be examined more thoroughly by doctors. We have built thermal scanners that enable us to scan the temperatures of large numbers of people efficiently and without intrusion. If you walk past the scanner and your face looks green on the monitor, that means you are in the pink of health. If your face looks red, the Chinese say the kuan kong face, then you better see a doctor.

We have already started screening all inbound air passengers from SARS affected areas. This includes passengers coming into Changi Airport for transit. As soon as we acquire more scanners, we will extend the screening to inbound passengers from all areas.

We have also started screening all passengers departing from Singapore. At the airport, when you go from the land side to the air side through the barrier, you will be screened. These measures make Changi Airport both a safe transit point for passengers from all round the world, as well as a safe place to visit. There is no reason for either locals or foreigners to avoid Changi Airport.

We are also paying close attention to the Causeway and the Second Link, where more than 100,000 travellers move in and out daily. We have installed thermal scanners at both the Woodlands and Tuas land checkpoints. Singapore and Malaysian health and immigration officials have been meeting to discuss the SARS problem, and will work closely together to draw up measures to screen for SARS at the Causeway and the Second Link.

Newly arrived work pass holders coming from SARS affected areas are being required to undergo a 10-day quarantine to minimise the risk of their bringing in SARS to the workplace.

ASEAN leaders recognise the seriousness of the SARS problem, and the need for a collective response. They are holding a Special ASEAN Leaders' meeting in Bangkok next week, to coordinate our efforts and collectively respond to SARS as a region. We need to work out measures to manage the movement of people across ASEAN borders, so that we can stop SARS from spreading between countries while we maintain the flow of commerce.

Plan for the unexpected

Besides taking immediate steps to keep the SARS outbreak under control, the Ministerial Committee has also been working out contingency plans to deal with various scenarios that could arise. These include measures relating to health, the economy, transport, border control, childcare centres, kindergartens and schools, emergency housing and social support, and public communications. For example, we are working out the housing and social support plan should a large number of people need to be quarantined, all at once. We hope that we will not need these arrangements, but should any such situation develop we will be prepared.

Battlefront 2 - The Economy

The second battlefront is the economy. The Government is working with the Singapore Business Federation and business chambers to encourage businesses to adopt business continuity plans, so that they can continue to operate even if their staff fall ill. Special attention has been placed on essential services, such as utilities, to ensure uninterrupted services.

At the industry level, firms in the tourism trade are working with the Singapore Tourism Board to devise ways to bring tourists back when the SARS situation stabilises.

It is also important that investors and analysts understand the true SARS situation in Singapore, and what we are doing to get things under control. Our policy is full and transparent disclosure, so that there is no doubt of the true picture and people can trust our statements. The Ministry of Foreign Affairs has been briefing the heads of foreign missions here, while EDB is in contact with the multi-nationals as well as their corporate headquarters, to keep them updated on the situation.

Impact of SARS on the economy

At the beginning of the year, Singapore's economic outlook was mainly clouded by the impending Iraq War and its impact on oil prices. The war in Iraq has now ended, and oil prices have fallen, lifting some of these uncertainties. However, SARS is now putting a strain on our economy and creates a new and greater uncertainty for us.

The tourism and transport-related industries, such as hotels, restaurants, retail, airlines, cruise ships, travel agents and taxi services, have been most severely hit. Air travel has been reduced sharply. Tourist arrivals have fallen by 61% in the first 13 days of April and are expected to fall sharply for the second quarter of 2003. A number of events, conferences and conventions scheduled for April and May this year have been cancelled or postponed. China, which is our fastest growing source of tourist arrivals before the outbreak, has banned organised travel to Singapore, Malaysia and Thailand. Arrivals from Japan, South Korea and Hong Kong have declined sharply. I was in one hotel a few days ago and I talked to a worker there, and he said, "We have five lifts. Three are closed. There is nobody to ride up and down. We are only operating two to save electricity. The workers have been put on leave. When their leave runs out, they will be asked to go on no-pay leave." Times are tough for the industry.

So far, the manufacturing sector has not been affected. But if the SARS situation deteriorates in the region or in the major industrial countries, it will affect our export markets and important trading partners. It could shake global confidence, and disrupt production and new investments. Then the impact on us will be broader-based, and more severe.

We cannot predict exactly how the situation will unfold, but MTI has lowered the GDP growth forecast for this year to 0.5% to 2.5%. This is on the assumption that the outbreak does not spread worldwide and become a global pandemic. The unemployment rate is expected to increase beyond the 4.2% last December. While we will try to preserve as many jobs as possible, we have to expect more retrenchments this year, especially in the tourism and transport-related sectors.

Relief measures

The Government recognises the economic hardship brought about by SARS. To help alleviate the immediate problems, we announced on 17th April a relief package worth $230 million. These measures were targeted at the sectors most affected by the SARS outbreak, namely, the tourism and transport-related sectors. The measures will not fully offset the impact on these businesses, but they will help them tide over the difficult period and save jobs, wherever possible.

Home Quarantine Allowance Scheme

There is another group who need help. People who have been placed under Home Quarantine Orders (HQOs), have so far not been given any allowance or assistance. We have left it to employers to work out their own arrangements, for instance, by putting employees on HQOs on medical leave. As the HQO cases were initially dispersed and the number manageable, this did not pose a problem.

However, the closure of the Pasir Panjang Wholesale Centre and the imposition of HQOs on about 2,400 stallholders and workers at the Centre showed that HQOs may need to be imposed on large numbers when a business establishment is ordered to shut. Furthermore, if the Government can mitigate the financial burden of the HQOs on the quarantined persons, it will reduce the incentive for people to breach the HQO in order to continue working. Also, people will be more willing to be identified and quarantined when they are traced as the contacts of a SARS case.

The Government will therefore implement a Home Quarantine Order Allowance Scheme, to be administered by the CDCs. Under the scheme, the Government will pay an allowance to self-employed persons who are serving HQOs, to make up part of their income. It will also give the allowance to establishments whose employees have been affected by HQOs. In other words, if you are working for a company, then we will pay the HQO allowance to the company who is paying your salary. This will defray part of their manpower costs for the duration of the HQO. It will be especially helpful to smaller businesses, which may otherwise be unable to survive.

For a small business establishment, in other words, one with fewer than 50 full-time workers, the assistance will be more generous. If the whole establishment is ordered to shut for a period on account of SARS, then the firm will receive this ex-gratia payment for all its employees, including those who are not on HQOs. Because the firm is closed, it has to carry its manpower costs; and we will help it to carry some of these. The cut-off of 50 full-time workers covers more than 90% of business establishments in Singapore.

For self-employed persons, the allowance will be a flat rate of $70 per day, for the duration of the HQO. For employees, the allowance will be his daily salary, up to a maximum of $70 per day. The allowance will be paid to the employer. We will leave it to the employers to make their own financial arrangements with their employees. However, newly arrived work-pass holders who are required to undergo a 10-day quarantine will not be eligible for the HQO Allowance. This allowance will also be payable to all persons previously or currently already on home quarantine.

Through the HQO Allowance Scheme, the Government will be bearing a good part of the wage cost of the businesses affected. MOF will provide full details of this scheme later on.

Specific Issues

Let me now address specific economic issues raised by the MPs in their questions.

Rental rebates: Mr Gan Kim Yong asked about rental rebates for HDB commercial tenants. All HDB commercial tenants are already enjoying a 20% rental rebate that lasts until 31st December this year. These include operators of student care centres, tuition centres, childcare centres and kindergartens. Some are also receiving additional rebate of up to 20% to bring their rents down to the prevailing market rent. In addition, HDB will pass on to its tenants the full savings from the recently announced property tax rebates. HDB will monitor the situation closely and will consider providing additional assistance to its commercial tenants, if necessary.

Giro instalments for property tax: Mr Chiam See Tong asked whether property tax could be paid by instalments. The answer is yes. Taxpayers have been able to pay their annual property tax in 12 interest-free monthly instalments since 1989, provided they do it via GIRO. More than 50% of taxpayers are already taking advantage of GIRO to pay their property tax in monthly instalments, and the Government encourages more to do so.

Indebtedness of Singaporean households: Madam Ho Geok Choo asked about the indebtedness of households. A study by the Department of Statistics showed that household financial liabilities have increased from 118% of personal disposable income in 1995 to 174% in 2000. If the economic downturn continues, it could lower disposable income and further increase the ratio of household financial liabilities to income.

However, we have to view this ratio in perspective. First, 72% of the liabilities are in the form of housing loans. This reflects the high housing ownership in Singapore, which is 92% compared to 60% to 70% in the developed countries.

Second, residential property assets, even after accounting for the weak property prices, stood at $343 billion in 2001. Compared to housing mortgage loans of $106 billion, households still own about $237 billion of net housing assets - a huge amount. If we include other household wealth, such as bank savings and shares, the total net wealth of households represents 670% of disposable income, which is comparable to OECD countries.

Furthermore, most households service their housing loans through their CPF savings and contributions. So long as they keep their jobs, the impact is manageable. This is why the Ministry of Manpower (MOM) is trying its best to minimise job losses, through enhanced training grants, skills upgrading and other measures.

Retail sector: Ms Olivia Lum asked about measures to help the retail sector. Domestic consumption has been affected as the initial fear of SARS has kept consumers away from all crowded places, including retail shops and restaurants. However, not all retail outlets are equally badly affected. And I believe, as confidence gradually returns, the restaurants will be filling up again. Those outlets in HDB estates fared better than those in the Central Business District which cater primarily to tourists. The property tax rebates are intended to help such establishments, and I strongly urge property owners to pass on the rebates to tenants. HDB itself will be doing so. These retail outlets can also send their workers for training and make use of the absentee payroll scheme for MOM and STB approved courses.

Battlefront 3 - The Society

The third battlefront against SARS is in our society, the way each Singaporean responds to the problem, and cooperates with the measures which will help us to solve it. This is the most critical battlefront. If we lose this front, we will lose all the other fronts, and lose the war.

Government is doing everything possible. But for these policies and measures to succeed, every Singaporean must play his or her part.

To support the public health measures, all Singaporeans should follow the daily precautions recommended by the Ministry of Health to protect ourselves and those around us. We need to be keenly aware of our social responsibility to our families, friends and fellow citizens, in containing the spread of SARS. See a doctor if you are unwell, telling him the truth, and heeding his advice. Go to Tan Tock Seng Hospital if you suspect that you have contracted SARS, and abide by the Home Quarantine Orders if you are in quarantine. Do not travel to SARS-affected areas, unless you really cannot help it. Take personal responsibility to measure your own temperature and the temperatures of your family daily.

To deal with the economic problem, we also need to work together. The tripartite partners have rallied to help affected companies stay viable and preserve as many jobs as possible. The NTUC, the Singapore National Employers Federation and the Ministry of Manpower have issued a joint statement recommending temporary cost reduction measures, including a shorter work week, layoffs and wage cuts. They have also acknowledged that, despite these measures, retrenchments will be unavoidable in the tourism and transport-related sectors, and advised employers to treat fairly workers who have to be retrenched. This realistic and constructive approach will help companies to stay afloat, and help as many workers as possible to keep their jobs.

One group that is bearing the heaviest burden is our doctors and healthcare workers. They are on the frontline of the fight against SARS. Despite their heavy workload, the extreme stress, and the risk that they are exposed to daily, they have not compromised on their professionalism or their dedication to duty. We can all be proud that in such a difficult situation, these doctors, nurses and hospital attendants, who include non-Singaporeans, have shown the steadfast courage and commitment to do their best to overcome this national problem. They are an inspiration to all of us.

The Courage Fund is a tangible way for Singaporeans to show their support for the healthcare workers. I am sure that all Members of this House will join me in adding our gratitude and support to the sentiments that have been expressed publicly by many Singaporeans over the last few weeks. But, more importantly, the healthcare workers need our cooperation, because whether their jobs become easier or harder in the coming weeks and months, depends on whether everyone is doing his part to contain the spread of the virus.

Conclusion

SARS will be a long-term problem for us. Now that it has spread to so many countries, scientists believe that it is not likely to be eradicated from the world. We have instituted effective measures to contain the outbreak in Singapore. As we discover more about the virus, we will modify and improve the arrangements to minimise the risk of infection. But every Singaporean must adopt sensible precautions and socially responsible habits, while carrying on with our normal day-to-day activities. We have to learn as one society to cope with the virus.

Life will not be the same as it was before SARS. We must adjust our habits and behaviour patterns so as to tackle this new threat and adapt to the changed environment. Doing this [indicating] - Nemeste, instead of a handshake - that is easy. Watching your temperature, keeping yourself healthy; sequestering yourself, if you are not - that takes more discipline. But with precautions and changes in habits which protect ourselves and especially other Singaporeans, we can continue to make a living, bring up our families, and maintain our social and community activities.

SARS is a grave challenge. But we have an effective public service, a cohesive and cooperative population, and the resources to deal with the problem. We are mobilising all these to tackle SARS. I am confident that together we can overcome this problem, restore confidence, and get Singapore back to normal again. [Applause.]