GOVERNMENT SECURITIES (Motion)

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GOVERNMENT SECURITIES:

(Motion) The Minister of State for Finance (Mrs Lim Hwee Hua): Mr Deputy Speaker, Sir, I beg to move,

That this Parliament, in accordance with Article 144(1)(a) of the Constitution of the Republic of Singapore and section 11(1) and (1A) of the Government Securities Act (Chapter 121A of the 2002 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Government securities in Singapore under that Act, from time to time except that the aggregate amount borrowed (whether before, on or after the date this motion is passed) and outstanding at any one time must not exceed Two Hundred and Fifty

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Thousand Million Singapore Dollars (S$250,000,000,000).

Sir, on 4th May 1999, Parliament resolved in accordance with section 11(1) of the Government Securities Act (Chapter 121A, 1993 Revised Edition) that the Minister be authorised to borrow by the issue of Government securities in Singapore a sum not exceeding S$220,000,000,000. This limit applies to the growth sum of all Government securities issued, regardless of whether they have been redeemed.

On 2nd September 2004, Parliament resolved to change the borrowing limit under the Government Securities Act from a growth limit to a revolving limit which is based on the amount of Government securities outstanding. With this change, the existing growth limit of S$220,000,000,000 is no longer applicable.

Sir, as at 31st August 2004, a total of S$144,000,000,000 worth of securities is outstanding. It is estimated that the maximum outstanding securities would reach about S$250,000,000,000 in five years. An estimated 58%,

ie, $145,000 million of these outstanding Government securities, would be for the CPF Board. The remaining 42%, ie, $105,000 million will enable financial institutions, such as banks, finance companies and insurance companies, to meet the requirements for liquid asset, as well as to meet the demand from financial institutions' fund managers and other investors.

I propose, therefore, that the quantum of the revolving borrowing limit be set at $250,000 million.

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Sir, I beg to move.

Question proposed.

Mr Low Thia Khiang: Sir, I would like to ask the Minister of State:

1. whether she is sure that $250,000 million would be enough;

2. when the Government would need to come back to the House again to ask for more; and

3. why the Government needs to borrow so much money.

I understand the Minister of State has said that some of it is for the CPF Board, etc, but what about the others. I thought the Government has a lot of money. Why does it need to borrow so much money?

Mrs Lim Hwee Hua: Sir, I wish to clarify that the amount that I am seeking to move in this motion is $250,000 million, which is estimated to be the amount outstanding, based on the projection by the MAS for both the financial services' need as well as for the CPF Board. This is really a prudential limit that has taken into account the respective demand streams.

Resolved,

"That this Parliament, in accordance with Article 144(1)(a) of the Constitution of the Republic of Singapore and section 11(1) and (1A) of the Government Securities Act (Chapter 121A of the 2002 Revised Edition), resolves that the Minister for Finance be authorised to

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borrow, by the issue of Government securities in Singapore under that Act, from time to time except that the aggregate amount borrowed (whether before, on or after the date this motion is passed) and outstanding at any one time must not exceed Two Hundred and Fifty Thousand Million Singapore Dollars (S$250,000,000,000).