Gerald Giam

Hong Kong drops plans to introduce GST

Just as the GST debate in Singapore seems to be petering out, Hong Kong — the very economy that Singapore is often trying to emulate — yesterday shelved its plans to introduce a 5 per cent GST in the face of strong public opposition. It is notable that this decision was reached after a long 9 month public consultation. In Singapore’s case, there was no public consultation at all. Just an announcement in Parliament which Singaporeans are expected to meekly accept. Perhaps it is not just the government that is to be faulted, but us citizens as well for too easily accepting whatever will be, will be.

Hong Kong shelves controversial sales tax plan

HONG KONG (AFP) – Hong Kong is to drop plans to introduce a goods and services tax (GST) after it failed to win enough public support for a change in the city’s famously low tax environment.

Financial Secretary Henry Tang said the decision was reached after an ongoing public consultation showed that the controversial plan lacked public support.

“It is clear from the views collected that we have not been able to convince the majority to accept GST as the main option to address the tax base problem,” he said.

“So we accepted that at this time we do not have the public support nor the conditions for introducing a GST. For the remainder part of the consultation we will not be advocating GST as the only option,” he told reporters.

Tang did not take questions nor clarify whether the government will re-consider the policy in the future.

He said the government will stop promoting the plan over the remainder of the nine-month consultation period and urged citizens to continue to provide their views on the other possible ways to widen the tax base.

Hong Kong leader Donald Tsang said the decision has complete support from him and the Executive Council, or cabinet.

“We believe that the decision (Tang) has made respects fully the wishes of Hong Kong people that we should seriously consider widening our tax base,” he said.

“At the same time he has paid full regard to the strong opposition of the people to the introduction of GST at this time,” he said.

Tsang Yok-sing, Executive Councillor and the founding chairman of the pro-Beijing Democratic Alliance for the Betterment of Hong Kong (DAB), also welcomed the move.

“We opposed the GST but also believe that we should find other ways to widen the tax base … we welcome that the government has listened to the public views,” he said.

The proposal has met public hostility with protests denouncing the plan throughout the consultation period. All major political parties opposed the measure.

Activists had accused Tang of robbing the poor to pay the rich, with protesters saying a sales tax would decimate the booming tourism industry by making shopping in Hong Kong — one of its biggest draws — less attractive.

Is a GST hike the only solution?

The Singapore government seems to have concluded that only way to decrease income and corporate taxes while increasing funding for social assistance to help the poor is through a GST hike. Although I have no doubt that the Ministry of Finance and the Cabinet went through much deliberation before arriving at this conclusion, it seems to be a less-than-ideal solution to helping the poor, for the reasons I explained in Part I and Part II of this series.

But if the GST isn’t increased, how are we going to find the money to “tilt the balance in favour of the poor”? I explore a few possible alternatives, and I invite readers to comment on them and add their suggestions.

1. Use the capital gains from Net Investment Income (NII)

Currently, the Constitution defines Net Investment Income (NII) as the dividends and interest earned from investing past reserves. Just before announcing the GST hike, PM Lee announced that the government will amend the Constitution and seek the President’s approval to re-define NII to include capital gains.

The NII for this year is projected to be almost $2.4 billion. Citigroup economist Chua Hak Bin told TODAY (15 November) that he “won’t be surprised if the NII doubles once you incorporate capital gains”.

This could mean an additional $2.4 billion into the government coffers — almost 60 per cent more than the extra $1.5 billion that the GST hike is expected to reap. It is almost 3 times the entire operating expenditure of the Ministry of Community Development, Youth and Sports in 2005. Is $2.4 not enough to help the needy?

2. Further increase vice taxes

Although smokers know that each budget speech usually brings bad news for them, they may not be aware that Singapore actually has a lower cigarette tax burden than many other developed countries. In Denmark, Ireland, the UK and Portugal, the cigarette tax is upwards of 80 per cent, while in Singapore it is just over 50 per cent. [Note: These were 1999 figures. The cigarette tax has probably gone up across the board since then.]

Cigarette taxation has been proven to be one of the most effective ways of preventing young people from picking up the habit and helping smokers kick the habit by making cigarettes less affordable.

There is also scope to increase liquor duties further, especially for hard liquor. The Singapore Armed Forces (SAF) should also abandon its provision of duty free beer to servicemen.

In the same vein, betting taxes on 4-D, Toto, Singapore Sweep, soccer betting, private lotteries and fruit machines in private clubs should also be increased to discourage people from gambling away their family money.

The annual revenue gain from the 2005 increase in tobacco duties was about $158 million. Similarly, the increase in liquor duties in 2003 resulted in an annual revenue gain of $9.4 million.

Given the benefits of vice taxation to Singaporeans’ health, the savings on healthcare and social service expenditure, the reduction in drink driving and the increase in government revenue, there is no reason why Singapore should not aim to top the world with its taxation on vices.

3. Collect more taxes from tourists

Currently, just 1 per cent cess tax is levied on cessable items sold by tourist hotels, tourist food establishments and tourist public houses. Cessable items include hotel rooms charges, food and beverage, corkage charges and cigarettes sold at hotels.

Cess could be increased to at least 3 per cent or more. In addition the number of cessable items could also be increased to include telephone and Internet charges, the hire of vehicles, tour guide charges and services of dance hostesses (yes, the last item is currently non-cessable!).

The government collected $30.46 million in cess last year. A threefold increase in cess could therefore net an additional $60 million, even without factoring in the increase in tourist arrivals envisaged in the coming years.

Currently, tourists may claim a refund of the GST paid on their purchases under the Tourist Tax Refund Scheme. The government should also eliminate this scheme. Although GST refund schemes are practiced by several other countries, there is no pragmatic reason for Singapore to follow suit. Canada recently announced that it will end its GST refund programme next April.

Some may argue that these moves could discourage tourists from coming to Singapore. But isn’t the main benefit of tourists the money they bring? If some el cheapo tourists were to really shun Singapore because of excessive cess or no GST refunds, then I don’t think they are the kind of tourists we should be courting.

4. Impose a luxury tax

A luxury tax is any tax on the sale of items not considered to be essential to a reasonable standard of living. Items such as high-end cars, fine dining and expensive entertainment could be subject to this tax. Compared to income tax, this would be a fairer way of taxing the rich, yet not penalising those who work hard but are prudent in their spending on luxuries.

5. Stop giving election handouts in cash

On the eve of the last two elections, the government saw it fit to disburse a total of $7.8 billion in cash to Singaporeans through New Singapore Shares (NSS), the Progress Package and Economic Restructuring Shares (ERS). Although less well-off Singaporeans were given larger packages, high income earners still received at least $200 to $400.

Several ruling party MPs had questioned the fiscal prudence of this generous give-away. For the rich, a few hundred dollars did not make much of an impact on either their bank books or their voting patterns. A friend of mine who is a successful investor in the financial services sector even asked me last month, “What is the Progress Package?”

These handouts were given in the form of cash deposits in one’s bank account or CPF account. Although they were meant to cushion the impact of economic restructuring, many less frugal Singaporeans saw it as ang pow money to be spent immediately on luxuries. The longer-than-usual queues at ATMs all over town and the extra long store hours in Orchard Road on the day the Progress Package was disbursed were suggestive of where many “struggling” Singaporeans had spent this money.

The government should have been more prudent in this respect. The money should not have been wasted on giving to the rich, who have no need for cash assistance from the government. It would have been better if it spread out and given in the form of vouchers for essential items rather than in one lump sum cash payment. This would have ensured that the money was not frivolously spent.

6. Reduce government administration expenditure

The government wants to reduce the tax burden for the rich (including MNCs) so they won’t pack up and leave. However it will be impossible to increase revenue without taxing the rich more, either directly or indirectly. This is because most of the tax burden in Singapore already falls on them. If the government wants more money to spend but does not want to make life more expensive for the rich, the best solution would be to reduce on government administration expenditure.

This is not a new
proposal, and indeed the government has already set up a Cut Waste Panel to look into this matter. The Panel has received almost 3,700 suggestions from the public but has agreed to implement just 91 of them – a 2 per cent take-up rate. For the remaining suggestions, government ministries have claimed that they are either already being done or “have been addressed in current policy/practice”.

Assuming that most Singaporeans who wrote in to the Cut Waste Panel had genuine observations and concerns, it is surprising that only 91 suggestions were deemed implementable.

One of the most politically contentious issues is salaries. Manpower costs make up the largest component of government administration expenditure.

Even if one were to completely accept the government’s anti-corruption and talent retention arguments for paying our ministers and top civil servants the highest public sector salaries in the world, is it really necessary to pay them so much more than their counterparts in the richest countries? (The Singapore President earns 3.7 times more than the US President, and the Singapore Prime Minister earns 6.4 times more than the British PM.)

Recently Minister in charge of the civil service Teo Chee Hean said that civil service salaries would rise next year in order to retain talent. Senior Minister Goh Chok Tong also hinted at a rise in ministerial salaries. KTM has pointed out that increasing the Staff Grade salary benchmark will mean that the salaries of the hundreds of Superscale officers will increase. This would cost taxpayers millions of dollars, on top of the already sky high salaries that the ministers and top civil servants earn.

Is this really the most effective way to retain talent and prevent corruption? Human resource practitioners know that salary is not the most important reason why talented employees stay on the job. In fact, a high salary often succeeds in retaining non-performers while having a marginal influence on retaining talent. Having previously worked in the civil service, I know that there are many other reasons besides salaries that result in such a high turnover rate. The government cannot keep throwing money at a problem without solving the root cause.

And if exceedingly high pay can prevent corruption, why is it that so many African dictators continue accepting bribes even when they already have billions stashed away in Swiss bank accounts? Greed knows no boundaries. The Singapore Civil Service has managed to stay relatively corruption-free not because of its very high salaries, but because of the very heavy penalties imposed on offenders.

You see! The GST spin is working!

If you need proof that the government’s spin is working, look no further than the Straits Times Forum page!

Nov 21, 2006
‘No’ to minimum wage, ‘ Yes’ to GST hike

I REFER to the proposed GST increase from 5 to 7 per cent, to provide for those who are poor. There is indeed a pressing need to help lower-income Singaporeans caught in the globalisation tide.

Being a small-business owner, I can attest to this. I have many employees who earn less than $1,000 in basic salary and are the sole breadwinners (One such staff member hails from a family of 11). It is heart-rending hearing them bemoan the cost of living, utility bills, household expenses, etc. Much as I would like to pay them more, it is not possible to do so without affecting cost and the business’ survival.

The minimum-wage argument is not tenable. Should employers be forced to pay a minimum wage, many like myself would choose either not to hire because we cannot afford it, or not to set up shop in Singapore. This will result in lesser employment.

I am glad the Government has heeded the call to take care of the lower-income. Workfare is unique to Singapore and is a far better principle than welfare. Under workfare, hardworking Singaporeans are given a chance to level up whereas welfare destroys all incentive to work.

It will take some time for Singaporeans to accept the GST increase. I urge everyone to take a measured and rational approach and to support it as it is designed primarily to help poorer fellow citizens. In order to make the reason for the GST hike more persuasive, I suggest the Prime Minister gives a full account of the two-point increase by Budget 2007 – what is the exact dollar value and how much of each dollar will go into workfare.

Theodore Yeo Guan Huat

The GST spin and the whole truth

Part 2 of the series on the GST hike

Continuing from my previous post, this post will highlight some of the spin that the government and the mainstream media has been putting out to soften the blow of the GST hike announcement. It will also explore some other possible reasons for the government’s decision, not all of which have been publicised.

In most other developed countries, a two per cent increase in consumption tax – which will impact every single resident in the country – would be cause for a huge public outcry. In Hong Kong, the government’s mere proposal to introduce a 5 per cent GST sparked huge protests in August by 3,000 to 10,000 Hong Kongers, including local businesses operators, traders and retailers.

Unsurprisingly in Singapore, where street protests are banned, the shock announcement has been met with meek acceptance by MPs and the mainstream media, and a sense of resignation by the general population.

The spin

The government and the mainstream media are fond of comparing figures with other countries to show how much better off Singaporeans are. TODAY’s report (15 November) dutifully did a “consumption tax comparison” between Singapore and other countries. It cited how Australia, Europe, the UK and New Zealand have GSTs of between 10 and 17.5 per cent.

The sales tax in the US was listed as being “up to 9.4 per cent”, but the report conveniently omitted the fact that some states like Oregon, Delaware and Montana don’t even have sales tax. In New York city, although the sales tax is 8.325 per cent, essential items like groceries and clothing under US$110 are exempt.

The report also failed to mention that these countries are all welfare states (to varying degrees) which spend a higher proportion of government revenue on public assistance and health care than Singapore. Australia, for example, spent A$17.1 billion or 2.3 per cent of its GDP on just welfare services in FY2002-03. In contrast, the Singapore government’s total expenditure on health and community development, youth and sports in 2005 took up only 1.28 per cent of that year’s GDP (assuming that all of it goes to public assistance, which it certainly doesn’t.)

On the other hand, Japan, a developed economy just like Singapore, has continued to maintain its 5 per cent consumption tax. Hong Kong, which has a corporate tax rate that is 4 per cent lower than Singapore’s, has yet to even implement their proposed 5 per cent GST.

Local blogosphere hasn’t been so acquiescent in its reaction to the GST hike announcement. It is one of the hottest topics on local blogs, with article after article (some say too many) slamming the GST as a regressive tax which will hurt the poor.

The mantra that the government is singing to Singaporeans is that the GST hike is about “tilting the playing field in favour of the poor”. Coming hot on the heels of the tragic suicide by a Singaporean in financial crisis and the Wee Shu Min affair, the government has probably calculated that the best way to sugar coat this bitter pill is to emphasise that most of the additional revenue collected will go to help the poor.

The whole truth (well, at least some of it)

The actual reasons for the increase are not as clear cut as the sound bites portray. Firstly, the government is trying hard to balance the budget, which is currently in deficit. Between FY2002 and FY2006, the government accumulated a net overall budget deficit of $4.23 billion. (Note: This figure does not factor in additional inflows like capital receipts from statutory boards – more of this in my next post.) In certain circumstances, a large and prolonged budget deficit could lead to higher inflation and interest rates (although not necessarily so).

Secondly, the GST hike will give room for the government to further lower corporate and top bracket personal income tax rates to increase economic competitiveness. As globalisation and Singapore’s high operating costs are resulting in more and more multinational companies (MNCs) relocating to lower cost countries like China, the government is desperately trying to boost the incentives for these entities to remain in Singapore. Slashing direct taxes for high income earners and MNCs is seen as key to achieving this.

Thirdly, with the elections over (but not too recently) and the PAP receiving its “strong mandate”, there is no better time than now to feed Singaporeans the bitter medicine so they will have more time to forget its unpleasant aftertaste before the next elections in 2011.

Lastly (and this is what the government is emphasising), with an ageing population, growing income inequality and more populist pressure to increase social spending, the government is embarking on a policy shift to provide a little more financial assistance to the needy. Someone will have to pay for this “Workfare” assistance.

However, it is unlikely that the entire $1.5 billion expected windfall from the GST increase will be used to fund social assistance programmes. Institute of Southeast Asian Studies researcher Terence Chong told TODAY (15 November) that he “doubt(s) the full amount will be used purely for assistance programmes. Some of it may go into research and development costs, some may be used to fund education.”

Conclusion

Despite the concerted efforts by the government and the media to paint a rosy picture behind the GST hike, it is clear that the announcement is not going down well with most Singaporeans, except the fiscal conservatives who dominate the Establishment. Keeping in mind that it is still three months before Budget 2007 is officially announced, I would not exclude the possibility that the government might back down slightly under pressure on the GST hike. Singaporeans might either see a very gradual increase in the GST rate or generous offset packages to help them cope with the hike.

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Coming up next….Some suggestions on how the government could balance the budget without hiking the GST.

Is GST really a fairer tax for the poor and SMEs?

This is a first in a three-part series of commentaries about the impending GST hike. In this first part, I will examine the impact of GST on the lower income earners and small businesses. Part 2 will analyse the government’s and media’s “spin” accompanying the announcement of the hike. In Part 3, I will explore some of the alternative sources of revenue that can be used to increase social assistance to the poor yet balance the budget, as well as ways to cushion the impact of the GST hike for the poor.

On Monday, Prime Minister Lee Hsien Loong announced that Singapore’s Goods and Services Tax (GST) will be increased to 7 per cent in 2007, from the current 5 per cent.

The decision to increase in the GST requires much greater scrutiny by the public, consumer groups, small businesses and the Opposition. The government needs to stop its political spin and be fully transparent with Singaporeans on this issue. It needs to explain clearly why the GST hike is necessary, whether any alternative solutions have been explored, and outline exactly what it intends to do with the increased revenue from this tax increase.

So far Singaporeans have been told by the government and the media that the extra revenue will be used to fund increased social assistance programmes that will benefit the lower income groups.

While it is laudable that the government intends to increase public spending to help needy Singaporeans, it is disingenuous to put out a message that this tax increase will benefit the poor.

The GST, unlike income tax, is widely recognised as a regressive tax. This is because it taxes both rich and poor for all items, including essential goods and services such as clothing, food, utilities and transport. Since the poor have less disposable income, the GST effectively takes a higher percentage of income from the poor than the rich.

Impact on businesses and the economy

The GST hike will also negatively impact the bottom line of small businesses. Currently, businesses with less than $1 million in revenue a year cannot pass the GST costs of their goods purchases (their “input GST”) to their customers if they are not GST-registered (which most aren’t). So a mama shop owner (a small sundries retailer) will be paying 7 per cent tax for all the goods he purchases from wholesalers, but will not be able to collect any of it back from his customers.

An increase in consumption tax will also reduce consumer spending. While this may be good for individual savings, will be bad for many businesses and could impact the overall economy of the country.

The Singapore Chinese Chamber of Commerce & Industry (SCCCI) issued a statement yesterday expressing “great concern and disappointment” at the impending GST hike. SCCCI added that “the proposed hike is likely to have an immediate and detrimental effect on local spending, and add to the cost burden for many local companies. Our long-term competitiveness will also suffer.”

The GST has been pitched in the past as “a fairer tax”. But fairer to whom? If the government is really keen on improving the lot of the poor and small businesses, a GST hike is certainly not the best way to go.

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Coming up next…Putting the “spin” on the GST hike.

PAP MP calls for less restrictions on mainstream media

PAP MP Baey Yam Keng, in his first speech in Parliament this week, urged the government to amend Singapore’s media legislation so as to promote greater media freedom in the mainstream media (MSM). (Extracts of his speech are reproduced below.)

In his speech, Baey noted that new media’s impact on the young has been “massive”. He pointed out that the government should not hold itself responsible for what the people see or read, otherwise Singaporeans may lose the ability to think, evaluate and judge for themselves. In observing the vastly different viewpoints put out by the MSM and new media, Baey wondered if they were from two different populations talking about two different countries. He went on to state that he did not think that the reality is “mostly positive” as portrayed in the traditional media nor is it as negative as what the new media describes it.

In contrast to what the Second Minister for Information recently said, he called on the government to relax regulations on traditional media to allow people to vent grouses and frustrations, without always demanding for constructive suggestions. He said this would enable Singaporeans to then engage openly in meaningful, level-headed discussions without fear of prosecution.

This is probably the first time that a ruling party MP has so openly advocated greater media freedom — tight media restrictions are a sacred cow for the PAP. Equally significant is the fact that he was a former director in the Ministry of Information, Communications and the Arts (MICA), the very ministry in charge of regulating – or some say censoring – the media.

It is heartening to note that at least one MP is listening to issues percolating from the ground by reading blogs, rather than just believing everything the Straits Times and Zaobao put out.

Baey gave a good example of Wikipedia’s self-policing mechanisms as the way of the future. Journalist Thomas Friedman had also cited community-driven websites like Wikipedia as one of the “ten forces that flattened the world” in his book, The World Is Flat. He compared how Microsoft Encarta, the world’s “best-selling encyclopedia” had just 36,000 entries, while Wikipedia had almost 900,000 articles by end 2005. The Singapore government cannot afford to be stuck in its traditional mindset of how information is disseminated and digested if they desire to see our country progress and keep pace with this globalised world.

Baey pointed out that unlike the MSM, new media often portrays issues in a negative and critical manner. There are good reasons for this. Bloggers try to find a niches that are not covered by the MSM. Because the MSM in Singapore is so skewed towards the ruling party’s viewpoints, it doesn’t make sense for the bloggers to echo the praises the MSM heaps on the PAP and the government. If the MSM were to be a bit more balanced when reporting on local political issues, perhaps bloggers would start see less of a need to play an adversarial role all the time.

Having said that, it is important to point out that the new media contains very diverse viewpoints – both for and against the government. Many are just independent analyses, which when compared to the Straits Times, naturally appear “anti-government” when they are in fact simply independent. It is unhelpful for political leaders to constantly paint the new media as being full untruths, because this may become a self-fulfilling prophesy. (More comments on this issue in my earlier post, From broadsheets to blogs.)

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Extracts of Parliament speech by MP Baey Yam Keng, 9 Nov 06. Original speech is on the P65 blog:

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Now, I would like to move on to the subject of new media, another means of self and cultural expression. New media’s impact on the young, to say the least, has been massive.

Compared to traditional media, new media is much less structured; it is more informal and also more difficult to control. It is a virtual world with its own parameters, rules and regulations. Its estate or space is both private and public. It has both advantages and disadvantages. It presents new opportunities and solutions as well as new problems. It is a force to be reckoned with and most people in the developed world cannot envision a future without it. We are beginning to see its social, political and economic powers.

It was reported recently that Google UK is poised to overtake UK’s main TV channels in advertising revenue within the year. It is therefore a wise choice that the government has identified interactive & digital media as a new sector to grow. We should harness the power of both new and old media, for instance, in using them for cross communications and marketing to different audiences. The popularity of Singapore Idol and the Idol format around the world was largely due to its ability to leverage on both the traditional TV media and the new mobile media. It manages to engage the audience and turn them into fans who like the power to be able to pick their winner.

The global media scene will continue to evolve. From the ancient days of using smoke signals, pigeons, to print, radio, television, fax, telephony, mobile and now the internet, it does not mean the emergence of one new media will always replace another. The radio continued to survive in the advent of the TV. In fact, it became more accessible with the emergence of the portable radio, then the car radio, followed by the mobile phone radio.

It is a media ecosystem when many can co-exist and will co-evolve. Even The Straits Times has launched STOMP and vodcasts, and Channel News Asia has its BlogTV.sg. One thing is certain, with technology advancement, the speed of evolution will be faster and people’s lifestyles and expectations will also change at a quicker pace.

The convergence of media can pose problems for the conscientious censor. On the other hand, the good citizens of the world can now also play a bigger role in helping to police our virtual space. For example, the Wikipedia is a self-regulating resource. As reported in The Chronicle of Higher Education in Oct 2006, Alexander M.C. Halavais, an Assistant Professor with the State University of New York at Buffalo, slipped in 13 errors in Wikipedia. In less than three hours, all of his false facts had been deleted, thanks to the vigilance of Wikipedia editors who regularly check recently updated entries. On Dr Halawi’s “user talk” page, one Wikipedian pleaded with him to “refrain from writing nonsense articles and falsifying information.”

The differences between new media and traditional media call for different treatments from the authorities. We can allow different platforms for responsible and less responsible expression of views, eg 全民乱讲 is for all citizens to talk nonsense, 全民开讲 allows all citizens to speak their minds，and 全民好好讲 calls for all citizens to have a good discussion. I believe people will know which programme is meant to serve what target audience. What the government should ensure is that there is no masquerading.

The government should not and cannot hold itself responsible for what the people see or read. Otherwise, Singaporeans risk losing the ability to think, evaluate and judge for themselves. The Mr Brown incident illustrates too clearly how new and old media could have engaged each other better. Having driven negative comments or untrue information about the government underground, into the labyrinth of virtual space, the government loses an opportunity to engage the propagators and dispel the erroneous statements.

As I read comments in the newspapers and compare them with those in bl
ogs and online forums, I sometimes wonder if they are from two different populations talking about two different countries. I do not think that the reality is mostly positive like in the traditional media or like what the new media is portraying, mostly negative and critical. I believe the real world is somewhere in between.

We have to accept that it will be very difficult, in fact, impossible to monitor and rebut all negative online comments against the government. We should also consider relaxing regulations on traditional media to allow people to vent grouses and frustrations, without always demanding for constructive suggestions. Singaporeans can then engage openly in meaningful, level-headed discussions without fear of prosecution. Erroneous assumptions, wrong ideas, narrow mindsets, prejudices and biases, loyalties, tolerance and wisdom can all be brought to the light of day and seen clearly for what they are. I believe in the Singaporean’s ability to discern wisely. Even if we may not be able to do so accurately, that is our judgment and that judgment should be given the opportunity to be sharpened.

A few months ago, Lianhe Zaobao and My Paper featured articles about the “strawberry generation”, a description of “soft”, young people with little determination, weak wills and dependent mindsets who are unable to take the slightest of hardship. They are adults but they still turn to their parents for pocket money. They have difficulties holding down a job. I wonder if this reflects, on a micro level, a side effect of our government’s parental style towards its citizens. If our government trusts the general public’s ability to refrain from uncontrolled gambling by allowing casinos, she should also trust its ability to tell right from wrong, black from white, or even grey, on other issues. Thus, I urge the government to consider amendments to our media legislation so as to promote greater media freedom.

This, I believe, would encourage greater creativity in this sector, leading to spill-over effect in other sectors and professions in Singapore. Creativity exists in all sectors and industries. As we nurture creativity in every aspect of our lives, it would become part of ourselves, our DNA, our lifestyles, our identity. Creativity is doing things in a different way which adds value and benefits, which no one else has done before. Creativity is working smart. Creativity is the new cutting edge. Creativity is that which will provide us with the lead over our competitors.

I look forward to the day when creativity is synonymous with the Singapore national identity, the Singapore brand. When that day comes, we can be assured that our survival as a nation is secure and the future, ever the brighter.

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S’pore, M’sia need to work more closely to pressure Indonesia on haze problem

Indonesia’s testy reaction after Singapore raised the haze issue at the United Nations (UN) highlights the difficulties that the “little red dot” faces in getting its giant neighbour to clamp down on culprits starting the forest fires which cause the choking haze in the region every year. In order to buffer Indonesia’s negative reaction, Singapore will need to cooperate more with its other suffering neighbours, particularly Malaysia, to apply the necessary diplomatic pressure on Indonesia to do something about the problem.

Speaking at the UN in New York on 25 October, Singapore’s deputy permanent representative Kevin Cheok said that the haze problem “can be permanently resolved only if there is effective and sustained action on Indonesia’s part. Indonesia will need help. Singapore, like other affected countries, is prepared to assist…”

The senior diplomat added that that “the scale and severity of the problem means that Asean will require international assistance, including from the UN”. He pointed out that the annual forest fires have global consequences and require global action, but the “Indonesians themselves must muster the political will to take the crucial first steps to address this problem”.

Mr Cheok’s Indonesian counterpart, Adiyatwidi Adiwoso Asmady, reacted angrily, saying that “no substantive cooperation” in dealing with the problem has been achieved so far (as if Singapore was somehow at fault). She then proceeded to call Singapore’s statement “disparaging” and suggested some “malice” behind Singapore’s motives.

Indonesia continued to show its displeasure by démarching Singapore’s ambassador in Jakarta to demand an explanation for the remarks. Industry Minister Fahmi Idris also skipped last week’s bilateral meeting on the Indonesian special economic zones (SEZs) in protest. (Singapore has made – and continues to make – huge investments into the SEZs to help Indonesia develop them, a fact obviously ignored by the Minister.)

This hyper-sensitive reaction is nothing new. Years ago, then-Indonesian President B.J. Habibie, derided Singapore as being just “a little red dot” in response to a slight from Singapore.

As I wrote in an earlier article, I believe that bilateral pressure is the most effective way of getting the Indonesians to act against the fire starters.

Singapore is justified in raising the issue at the UN, as the air pollution caused by the Indonesian fires affects not only Southeast Asia, but the entire world, as it contributes to global warming. However, by sticking out its head and telling it plainly as it is, Singapore is now suffering from the wrath of a neighbour thousands of times its size.

Singapore’s other neighbours, Malaysia, Brunei and Thailand, have also been suffering from the haze. Malaysia hasn’t exactly been suffering in silence. The Malaysians have, in many ways, been more vocal in their frustration with Indonesia’s lackadaisical approach to this problem. Malaysian politicians from both the ruling party as well as the Opposition recently staged protests outside the Indonesian embassy in Kuala Lumpur.

Singapore does not have the strength to pressure Indonesia alone. If Singapore and Malaysia – and perhaps Thailand and Brunei – could coordinate more effectively with each other, Indonesia will find it harder to distract from the issue with rhetoric. It will also not be so easy for them to sneer at Singapore being an impertinent little “adik” (little brother) telling their “abang” (big brother) what to do. With a warming of bilateral relations since Abdullah Badawi took over as Prime Minister of Malaysia, there is no reason why the two countries cannot work together more effectively to tackle this problem. For a start, Singapore and Malaysia could issue joint statements and defend each other on this issue, rather than just act individually.

There is more than just national and regional pride at stake here. Meteorologists are predicting a “super El Nino” next year, which could lengthen the dry season and result in the haze continuing until February the following year. This would surely result in far greater economic and health damage than the $7.2 billion that the 1997-98 haze costed the region. Stakeholder countries will need to mobilize all the technical, economic and diplomatic resources they can to tackle this problem before next year. It will be no easy task, and time is fast running out.

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Technorati: Singapore, politics, haze, UN, Malaysia, Indonesia, El Nino

Is justice served in Iraq with Saddam’s conviction?

After 24 years of tyranny and hundreds of thousands of deaths to his account, former Iraqi dictator Saddam Hussein has been sentenced by an Iraqi court to death by hanging for his role in the killing of 148 people in 1982. However, there are differing reactions to the verdict from his victims, supporters and various members of the international community as to whether justice has indeed been served.

The court found that Saddam and his fellow defendants had ordered the villagers’ murder after members of a Shi’ite political party tried to kill the former president in the town of Dujail in 1982. Saddam was found guilty of the torture, illegal imprisonment and executions of the 148 men, as well as the arrest and torture of others and the confiscation and razing of their farmlands. Nine people were killed during the destruction of orchards, and many of the 399 people who had been detained were either killed or remain missing. In a speech at the end of a day of hearings in March 2006, Saddam admitted ordering the Dujail trials and said that he alone as head of state should be held accountable for the charges. Some documents indicated that about 50 of those sentenced to be executed had actually died during interrogation before they could go to the gallows. In the first months of the trial, a series of Dujail residents testified that they were imprisoned and tortured and that their relatives were killed. Several women related how they were stripped naked, beaten or given electric shocks.

According to Iraqi law, Saddam is entitled to an automatic appeal against his conviction. His case will be sent to the appeals court tomorrow, where it will be reviewed by a panel of judges, who will decide whether or not to allow a retrial. If the judgement stands, however, Saddam must be executed within 30 days of the appeals panel delivering its verdict.

This is just the first conviction in a series of trials lined up for Saddam. Next Tuesday, Saddam returns to the dock for a much larger trial in which he is accused of killing as many as 180,000 Kurds in the late 1988 in Anfal. However, he is likely to be executed before this next case is completed.

Although the news of Saddam’s conviction was welcomed by many Iraqis and world leaders, Saddam’s supporters in his hometown of Tikrit, defied a curfew to voice support for him and to denounce the verdict.

Since, Iraqi law states that an executed criminal cannot be tried for other crimes and the charges must be dropped, some Kurds might feel they have been denied justice because the court will not find out the truth about Saddam’s alleged genocide against them.

Human rights organisation Amnesty International, which opposes the death penalty, issued a statement that they “deplore the verdict of the death penalty” on the basis that it was not a fair trial.

Some countries which oppose the death penalty appeared torn between on one hand applauding the guilty verdict and on the other hand condemning the death penalty. Spanish Prime Minister Jose Luis Rodrguez Zapatero, who withdrew Spanish troops from Iraq following his election, said that Saddam had to “answer for his actions”, but reiterated the European Union’s opposition to the death penalty.

– Al Jazeera, BBC News, CNN and agencies

MPs’ parliamentary speeches during casino debate in 2005

As mentioned in my post on Thursday, I am disappointed to learn of the strong (albeit possibly inadvertent) official endorsement of gambling by our leaders by way of their attendance and participation at the upcoming lottery convention, as well as the financial support our government is pouring into this event.

I think it is timely to highlight some of the speeches made by a PAP MP and two Nominated MPs during the parliamentary debate on the proposal to develop integrated resorts in Singapore, which I have extracted from the Hansard. [Note: This debate took place after Cabinet had made its decision to proceed with the casinos.] Emphasis below is mine.

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Thursday, 21st April, 2005
Parliamentary debate on proposal to develop integrated resorts

Mr Loh Meng See (Jalan Besar): Mr Deputy Speaker, Sir, this year we will be celebrating Singapore’s 40th year of independence. The Government has on Monday, 18th April, announced its momentous decision to develop two integrated resorts with casinos at Marina Bayfront and Sentosa.

I have listened carefully to the Prime Minister and Ministers who have spoken on the subject. Indeed, I can sense the ambivalence they held and the moral dilemma they faced in arriving at this very difficult decision. I respect their decision, as I have been taught to submit to those in authority who have been empowered and who will be held accountable for the decisions they made. We will render to Caesar what is Caesar’s, and to God what is God’s.

But I wish they had decided differently, as I disagree strongly in having a casino in Singapore. As I reflect on the matter, the question that plays in my mind is: why are we faced with such a Hobson’s choice today? Minister Mentor has said that “the cost of not doing it is even greater”. We have been told that not to proceed with the development is worse than proceeding with it. We have been asked to pay the perceived minimal cost in human suffering to enjoy the larger economic benefit. My view is that, after three and four generations, the costs will outweigh the benefits, and many of us here today will not be around to see the consequences, but our children and grandchildren will be.

Is this the way to measure policy outcomes? Have we fully explored all alternatives before we ask only casino operators to put the proposals? Are we sure that we want to put our destiny in tourism and a not insignificant part of our economy in the hands of two foreign casino operators? Are we sure that the novelty of integrated resorts would not wear out? Are they fully recession-proof? Would it not hollow out the other businesses in Singapore if one-third of the casino income is to come from Singaporeans?

After 40 years of independence, we must adjust our thinking from being fixated with the idea that economic prosperity is all that matters. There is a very high cost that accompanies with the single-minded pursuit of wealth and prosperity. We are already a developed economy enjoying a higher average per capita income. To have an annual economic growth of an average of 3-6% is not insignificant.

We need the cultural ballast and strong national values and social graces to provide the balance in the way we live. The world wants us to seek instant gratification and temporary pleasures, but if our people are too stressed out and not having the happiness, peace and joy in their hearts, then it counts for nothing. What our people need is healthy relationships with their family, neighbours and the community. Instead, we see dysfunctional families and quarrelling neighbours. In the lexicon of Thomas Friedman, we are forsaking our olive tree by trading it for a newer and bigger model of Lexus.

Personally, I am all for economic growth and prosperity. But I am not so sure whether, if we keep on going the way we are, our communities will not fall apart. Switzerland and the Nordic countries I hear earlier, have been held as excellent examples of how the Swiss work, live and play. I like some of what they do. We should follow the Swiss in keeping the Sabbath in not washing the cars and mowing the grass on Sundays, not flushing the toilets in the night as it could disturb the neighbours, buy and support locally-made goods even if they are more expensive than foreign goods. For every issue that affects the whole community, they hold a referendum to decide. The Swiss possess the maturity, strong cultural and social values that we Singaporeans lack.

We have read the document written by Mr Chia Teck Leng on the casino escapades. He feels that we ought to go ahead with the casino. I am not so sure how much weight we want to place on the opinions of a man who has been imprisoned because of his addiction to gambling. Unfortunately, we do not have a chance to hear the feeling of his wife and two teenage sons. If we were to hear their side of the story, we would have a different perspective of the untold harm that has been caused. My real concern is that we will not know whether we have made the right or wrong decision until perhaps 10 to 20 years later. By that time, the situation in Singapore would have deteriorated beyond recognition.

I cannot understand the argument put forward that, as gambling is already in existence, the harm is incremental in nature. Do we not know that two wrongs do not make a right? The damage and harm to society could be compounding and cumulative in nature and rising exponentially. With the proliferation of vices, we will be like frogs in hot water, and we do not know that we will be boiled to death.

The Government has made the decision. I will respect it. But I will discourage Singaporeans to contribute their expected one-third share to the casino income and, instead, contribute the money to charity to help the needy and disadvantaged. When political leaders share their stories of “little” gambling experiences in this House, unwittingly and subtly we are telling the young that it is all right to try and play 4-D and jackpot machines and have some fun. That, to me, is the thin end of the wedge, the beginning of disaster.

It is exactly what I am afraid of. Over time, our people’s guard will go down, slowly but surely. We can explain and rationalise our actions, we get into a mode of denial. Gambling and other vices become the norm in our society. Slowly, warm water turns to hot water, then to boiling water. It is a matter of degree, but it is also the difference between life and death.

This surely cannot be. Our young should be taught good moral ethical values. Gambling is like smoking, something not to be tried in the first place.

Therefore, I urge the Government to have a Code of Conduct for Ministers and MPs, civil servants and even directors of listed companies to be barred from gambling in the casino. Other associations, like the teachers’ unions, can also make voluntary pledges.

We require good records to be kept on the patronage of the casinos and we have a law that considers unexplained wealth to be ill-gotten gains. It is not just gambling that we should be concerned about, but the related effects of corruption, money laundering and organised crimes that come with it. We must protect and safeguard the integrity and reputation of Singapore’s financial centre status.

I would like to see the rules on casinos to be legislated rather than merely regulated. No flexibility should be given to the Government of the day to decide. I am confident of the present Government to manage and run the system, but as a safeguard for future generations, appropriate legislation should be instituted so that we can delay the ill-effects of gambling and ot
her vices breeding its ugly head on our society.

As we are proceeding to the next step of Requesting for Proposals, I would like the Government to have the ability to walk away and say “no” if there is a huge discrepancy between the concepts and the proposals submitted. Many house buyers would have experienced this – the house they receive at the end of the day is not what the one they saw in the drawings and design models. Therefore, we have to be alert and vigilant.

Remember, if we enter this realm, we are at the mercy of expert gamblers. On our side are politicians and civil servants who are, I think and hope, novices in this game.

Sir, I rest my case.

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Assoc. Prof. Ong Soh Khim (Nominated Member) (In Mandarin): Mr Deputy Speaker, thank you for allowing me to join in the debate on the proposal for the establishment of integrated resorts with casinos. The Government announced on 18th April 2005 that it will develop two integrated resorts with casinos. In the past three days of the Parliament debate, many Ministers and MPs have raised many points. I have declared that I do not support the building of casinos in Singapore during the debate on the Presidential Address. Now, I would like to declare that I do not support the proposal for the development of two integrated resorts with casinos in Singapore. I have a few points to raise here for discussion.

In the debate on the Presidential Address, I mentioned that the setting up of a casino will be a source of all evils and this will be very bad to our social ethos. Where gamblers gather, there will be prostitutes, illegal moneylenders and drug traffickers. Incidents of drug-trafficking, kidnapping, vices and other forms of crime will be doubled, tripled or even quadrupled. In the past three days of the Parliament debate, many of the Ministers and MPs agree with this point.

As analysed and agreed by the media, the arch crime is the setting up of a casino. It will bring about a whole lot of social problems, such as broken families, increased number of suicides and many children may have to stop their study, etc. In last month’s Budget debate, the Minister for National Development introduced regulations to prevent people from cashing in by reselling their HDB flats, so as to ensure that they have enough money for their old age. Does the Minister know that in many of these cases, these people have cashed in to pay for their mounting gambling debts? These social problems will increase manifold. In the debate over the past few days, we all agree that such problems will increase.

In the past three days, some Ministers and MPs have talked about their own gambling experience, and they said that they could exercise restraint or choose not to place any bets at the casino. Some MPs have also said that with the development of the integrated resorts with casinos, Singaporeans can choose not to enter the casinos as nobody forces them to enter the casinos to gamble. As mentioned earlier by an MP, if you lead a horse to a river and the horse does not wish to drink the water from the river, you cannot force it to drink the water from this river. However, it is easier said than done. For people who have lived a comfortable life and have strong will power, they can exercise self-control. However, for those people who may have slightly weaker will power, they may not be able to resist the temptation of going into the casino and become addicted to gambling. Why is this so? This is because for the poor and the lower-income group of people, this is a dream-seeking world. With the escalating cost of living, besides working on a few jobs to pay for the living expenses, the people in the poor and the lower-income group can only put their hope on gambling. The poorer they are, the more they would want to gamble, with the hope of changing their destiny. Whenever they buy a 4-D or Toto ticket or play at a gambling table, they are buying a dream – a dream to clear up their housing loans, a dream to provide for their children’s university tuition fees, a dream to give their parents a better life. Every time when the 4-D or the Toto result is out, thousands of dreams were shattered.

During my younger days (I was born after 1965, which was different from the generation of MM Lee, but I do know what is “chap ji kee”. I also know what is “four-colour cards”, the “si sek bai”), I have seen and experienced for myself the damage done by gambling of this nature. When I was small, I always wondered why we had to have porridge with soy sauce vegetables for our meals and I really could not understand the causes of this. Those people who have not experienced or seen such gambling would not be able to understand that feeling. They could say very lightly, “The people are free to choose whether to frequent the casino or not, nobody is forcing them to go to the casino!” I would not say that. With the casino just a few minutes’ drive away, the poor and the lower-income group of people would want to go and try their luck there with the hope of winning some money from the gambling tables.

The Ministers said that the Government is confident that we could build world-class integrated resorts with casinos and, at the same time, keep the social cost and crime rate at a minimum. Are we being too optimistic?

I have said before that some people are commenting why Singapore is always pushing to be the “first” in the world in everything we do – Number One airport, Number One sea port, Number One medical centre in Asia, etc. Do we really believe that Singapore is a superman, and we could excel in everything we do? Even before building the integrated resorts, we are already claiming that they are going to be world-class. Are we too optimistic and over confident in ourselves?

Mr Deputy Speaker, Sir, I am a worrier, I am not so optimistic. The Government has considered and would implement a series of measures, such as the MCYS would set up all kinds of councils to prevent Singaporeans from going into the casino, and the Ministry of Home Affairs has also various measures to reduce or minimise crimes arising from gambling. All these measures would be set up as a safety net. However, all these measures and safety net are purely theoretical, that is, they are just on paper. Whether these measures will prove to be effective or not, nobody knows!

Based on various reports, the Government speculated on how the social problems and crime rate will increase if the integrated resort with a casino is built. However, these speculations are just purely theoretical. The ill effects of casinos are like an octopus with all the 10 tentacles reaching out to every node and corner of the society. At this moment, we do not really know the actual and full extent of the negative impact the casino would bring about.

One thing is certain: the casino will definitely bring with it negative impact on our society. However, we cannot be certain that the integrated resorts will really create 35,000 new jobs. This is just a theoretical speculation. We can be sure that Singapore will have to pay a price but we cannot be sure whether the so-called “huge” economic benefits will outweigh the social cost that we have to pay. At the moment, all these economic gains are mere theoretical speculation.

Hence, Singaporeans want to know whether the Government has any contingency and back-up plans to deal with unforeseen consequences.

At a lunch that SM Goh hosted for the NMPs, I spoke to SM Goh on the question of building a casino. I told him that as we take the first step, we should have already thought of the 10th step. He agreed with me. As such, I hope that the Government would share with the people the contingency and back-up plans. For example:

(1) If the number of people addicted to gambling is many times more than what the Government has predicted, what is the Government’s back-up a
nd contingency plans?

(2) If the crime rate is increased many times more than predicted by the Government, what will be the Government’s back-up and contingency plans for that?

(3) If the gambling ethos cause such adverse impact on our young people that many do not continue to pursue their education or career, and try to make a quick buck from working at the casinos, what kind of a contingency plan do we have? This is already a hot potato in Macau.

(4) At the same function, I also raised the point that we have to deal with the social cost arising from the opening of the casino. We agreed that we need to look into the incremental cost involved. Yesterday, SM Goh said that the social cost will not be too high. I am very worried, as I am a pessimistic person. I would like to know, if the cost for these measures to deal with the crime and social problems is an exponential increase, the Government has formulated any contingency and back-up plan to deal with this possibility.

Further, can the Government assure Singaporeans that the Government will stand firm on the restriction of Singaporeans to enter the casinos? After some years, if the operators tell the Government that they cannot make ends meet, and request the Government for liberalisation and relaxation of rules to allow more Singaporeans to go into the casinos so as to maintain the integrated resorts, will the Government succumb to such a request from the integrated resorts’ operators? Can the Government assure us that it will not compromise on its stand?

Finally, I would like to reiterate that I do not support the construction and development of the integrated resorts with casinos. If the Government introduces casinos into Singapore, then Singapore will and must pay a price for it. This reminds me of a classic phrase in the movie “Infernal Affairs II”, which is: “Chu lai hun de, zong you yi tian shi yao huan de.” I hope the price that Singapore has to pay for the economic gains and development that would be gained from the integrated resorts with casinos will not be too high. I hope our younger generation, our children, our grandchildren will not, in the next 20-30 years, pay this kind of “debt” incurred by the Government. I do not wish to see the Government being accused of leaving behind a heavy load of social debts for our future generations of Singaporeans.

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Prof. Ivan Png Paak Liang (Nominated Member): Thank you, Mr Deputy Speaker, Sir, for allowing me to join in the debate. I just have two calls and a question. First, my call.

The call is that for the next big issue that we face as a country, would the Prime Minister and the Government please reverse the sequence – first debate in Parliament, then decide in Cabinet.

The present debate, which I have been following for the last four days, has all the flavour of a post-mortem. We have heard many moving speeches from senior Cabinet Ministers, honourable colleagues, but a decision has already been taken. I recall several years ago, the then Deputy Prime Minister Lee, gave an inspiring speech at the university. He urged our students to take an active role in the movie, not just sit back and be in the audience. So, next time, please, Sir, let us take an active role as actors and actresses in the movie, not just be the first audience. So my call for the next big issue is to let Parliament debate the issue before, and not after, the Cabinet’s decision.

Sir, my second call. On this point, I echo hon. Members Mr Chiam, Mdm Halimah, Mr Loh Meng See and Prof. Ong. Will the Government please commit to the House that in the future it will not relax the conditions on admission of Singaporeans to the casino? We have heard from the Prime Minister, the Senior Minister, Minister Mentor, and others, that there are many plans for integrated resorts with casinos. If they do not come here, or even if they come here, they may set up elsewhere – Bangkok, Phuket, we have heard many places. When this happens, all these would be competing for the same tourist dollars from China, India and elsewhere. It may be that the business for our integrated resorts will slacken, then the management may come back to the Government to say, “Oh, our business is not going so well. Please give us some concessions.”

Sir, my call is, please, would the Government commit that there would be no concessions?

Third, my question, Sir, which is related to my previous call: who, if any, will regulate the quality of the other features of the integrated resort? On this point, I also echo hon. Member Dr Loo Choon Yong. Initially, as the Senior Minister has said, we will get Celine Dion, Norah Jones, one of my favourites. We will get Cirque du Soleil. But what if business is not so good? The integrated resort might downgrade. We will get second-rate singers, third-rate circuses. My question is: will the operating franchise specifies standards of performance to ensure that we get only the top-class?

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South Africa’s magnanimous reaction to apartheid leader’s death a lesson in forgiveness

Former white South African President P.W. Botha died in his home in the Western Cape province on 31 October. Botha had ruled the country with an iron fist for nearly two decades during the apartheid period from 1978 to 1989. Thousands of blacks were detained without trial during his presidency, many of whom were tortured and killed. After the end of apartheid, he was found guilty of gross human rights abuses. However, he refused to apologise for apartheid.

Despite all his wrongdoings, the current black majority South African leadership has shown remarkable magnanimity in its reaction to Botha’s death. President Thabo Mbeki ordered all flags to fly at half mast and the government offered Botha’s family a state funeral for him, which they wisely turned down. The governing African National Congress (ANC), which was outlawed under Botha, was among the first to offer its condolences to his family and friends. Former president and liberation hero Nelson Mandela, whom Botha refused to release from jail, also issued a statement paying tribute to Botha for taking steps towards an “eventual peacefully negotiated settlement” in the country.

South Africa had previously shown the world a wonderful example of national reconciliation through its Truth and Reconciliation Commission (TRC), whereby victims of racist violence during the apartheid era could come forward and be heard at the TRC. The perpetrators of the violence could admit their guilt in front of their victims’ families, seek forgiveness and request amnesty from prosecution. Several other countries have adopted the approach of the TRC in their process of dealing with human rights violations after extensive political change.

The lessons behind the TRC are probably best captured in a touching memoir by the chairman of the TRC, Archbishop Desmond Tutu, titled No Future Without Forgiveness. The world will certainly be a better place if more countries learned from South Africa in this aspect of national reconciliation.