Interview by SM Goh Chok Tong with The Straits Times on Town Councils (Jun 2009)

The Straits Times: What are your general thoughts on Town Councils? It has been almost 24 years since the idea was mooted in 1984/85. How have they evolved? How do you see Town Councils going forward?

PM Lee Hsien Loong: First, let me give you the big picture and why Town Councils were formed. Town councils are part of this process of the maturing of our political system. Before Town Councils were formed, we had, of course, the elected government. HDB is a statutory board. But in time to come, HDB did not just build public housing but also managed the public housing estates. HDB was functioning like a municipal government looking after municipal interests, which if you have a two-tier system of government will be run by a municipal government. And that municipal government would normally be elected.

But when HDB was running this, what prompted me and the others to come up with the idea of Town Councils was that we did not quite like the uniformity of decisions taken by HDB. Uniformity meant slowness in the implementation of new ideas. As an MP, I experienced that. We had certain suggestions to make, went to the HDB branch office, and then the HDB branch office referred us to its HQ. HDB HQ will say, ”This idea is good but we can't do it for you because if we do it for you, we must do it all over Singapore.”

So Town Councils would give us that flexibility to do different things for our housing estates. This means that over the whole of Singapore, each Town Council would have its own way of doing things. The political part came in because we tied this in with the elected representatives. So, the MPs would provide the chairman. The MPs would be responsible. So in a way, the MPs became the elected representatives of this municipal aspect of government. But more importantly, we also believed in the devolution of powers downwards. This is to give a stake, first, to the MPs, then next to the grassroots leaders, and of course, very importantly, to the residents. This is your Town Council. This is your estate. You have to do something to keep your estate clean. Don't just depend on the central body - HDB. It also served as part of the larger process of forming the community development councils, and in a sense, also the elected president. So, all these were moves to create stable long-term institutions which would support the whole system of government. This is not just about electing the people and then you have a central government, which works in tight control of everything. This is part of the process of devolving responsibility to more people, to give them a stake in the process of governance. So that's the bigger picture for the formation of Town Councils.

Since the formation of the Town Councils 20 years ago, I think the main changes which I saw were Town Councils moving into the provision of facilities for housing estates. When we first started, Town Councils were primarily looking after the maintenance and cleanliness of the housing estates: the routine maintenance, the painting of HDB flats and so on. But later on, they moved into the provision of facilities like walkways, linkways, and then corners for recreation. I think these were useful measures taken by the Town Councils. It gave them more flexibility. If the job was done by HDB, HDB would have to decide on the kind of, say, sports corner to be built, and the size of it in relation to the size of the population. And they might not be the people who know best. If HDB were to put up facilities and linkways, HDB must ensure that every linkway would look alike all over Singapore. Otherwise, if yours is better than mine, some may ask, “How can that be?” You can see when you go to the housing estates now that linkways are of different designs. Some are better than others, but generally you have variations. So 20 years on, I see that move as a major change in Town Councils.

ST: Would you say that the objective of giving more power to residents as well as letting them see the link directly between MPs & the municipal as being successful?

PM Lee: I would not say that the direct link has been forged yet between residents and the Town Councils. But Town Councils have been successful in getting the grassroots leaders to understand the linkage between what Town Councils can do and what the people must do. One example is the S&C, or service and conservancy charges. Before we had Town Councils, each time S&C charges were revised by HDB, even grassroots leaders would join in the chorus to criticise the increase. They would not look at the costs and benefits. They just asked why? Why do you increase the charges? So they would join in the chorus. But having to decide with the Town Councilors whether S&C charges must be increased, the grassroots leaders began to understand where the money was going to, where it would be spent, what provisions you were making for sinking funds and so on. Is the increase justified? Can we convince the residents that the revision of S&C charges is justified? So that link between Town Councilors and grassroots leaders in the housing estate has been successful. But for the residents themselves, that's the next stage - how do we get them to take a greater interest?

But residents, in a way, are happy that their grassroots leaders are there. Grassroots leaders are not PAP members necessarily. When they live in the housing estates, they have a stake in it. They are affected by the S&C charges. Say, if the grassroots leaders agree, then of course most residents can then go along with them. But we’ve got to look for ways to create more links between Town Councils and the residents. This was when we started the cleanest housing estate in Singapore. We began to award plaques and so on to housing estates, then to housing blocks and so on, so that the residents could feel that they must play a part.

I was very interested in tying up S&C charges with the state of cleanliness of a precinct. But it was difficult to implement, so we never quite implemented it. In other words, if the Town Council spends much less on a particular precinct because that precinct is better looked after by the residents, for example there is less litter, then that precinct's residents should get a discount on S&C charges. But it is a little complicated and it could lead to a lot of dissatisfaction, more than satisfaction. So I think we didn't quite implement it. But we’ve got to look for ways to give residents a stake. If I play a part, my charges are lower on a precinct basis. Then you can see the link.

ST: There are some people who say that private estates like condos can afford to charge slightly lower maintenance fees precisely because the residents help to keep the estates clean.

[section section_speaker_id="1" section_short_name="0"]Private estates are smaller, so you can do it. But HDB is a much larger outfit. Within an estate, there are many precincts. But it's not an idea to be cast aside. I think looking into the future, maybe it's an idea which we can consider.

ST: Should Town Councils be given more autonomy? How do you think Town Councils might further evolve in the next 20 years?

PM Lee: I think the basic functions will remain the same. It would be good if they can identify more activities to be passed on to the Town Council. But I would hesitate to let the Town Council do the enforcement of certain breaches of services, which are now being done by the government, for example, by the National Environment Agency. If you let the Town Councils do the enforcement of, for example, traffic violations within the estate, I think it's too close. Some of the Town Councils might want to be a little lenient on people whom they know. Others might not be lenient and then their friends would say, "Look, you're my friend. How is it that you don't overlook these little breaches here and there?" And then worse, the pressure will be on the elected representative, on the MP. They will say, "You're my MP. Please don't fine me. If you do, I'm going to vote against you." Now we can be very objective. We could say, "Sorry, you've breached the rule. You're fined by the environment ministry. I can write to the environment ministry, but I do not make the decision."

Another issue which I feel uncomfortable about is you may get into a competition of having “no government”. Some people say, I'm more lax in enforcement of laws and regulations, and some Singaporeans may say, look, that's the way to go. I can park everywhere and I don't get fined. This is a good MP. An MP who is strict in enforcing, they would say this MP is too strict. I think there are certain constituencies in Singapore, which people say “bo cheng hu” (Hokkien for “no government”). In the market, illegal hawkers are all over the place. Some Singaporeans say it's good. With illegal hawkers, I can get durians, mangos and watermelons that are sold very cheaply. So if you start enforcing against that, well, you will lose support.

I think it is right to see what more can be devolved to the Town Councils. But my own view is that on certain enforcement issues, where the linkage between the Town Councilors and the residents may be too close, we should leave it to a national agency to do so. The national agency can be more objective and can implement policies without having to worry about the impact on the political scene.

ST: Maybe now we can move on to the TCMR itself. Why is there a need for the report now? When we asked SMS Grace Fu last year whether this was linked to the financial report, she said no.

PM Lee: No, it is not. HDB has been doing some kind of evaluation report for some years now but the reports were internal to MND and HDB. You’ve got to remember that HDB is the property owner and landlord of the estates. I did ask Minister Mah Bow Tan this question before. You own the estates and you cannot just leave it to the Town Councilors and elected MPs without worrying about the state of your property. Initially, because HDB wanted the Town Councils to have more autonomy, they just left it to the Town Councils. So they did not take a very keen interest in the state of the property until it became obvious to them. But as a landlord, as an owner, you’ve got to be sure that the property is well taken care of. So HDB started to have internal reports and the process predated the financial crisis. But of course, they were looking for indicators for the report to be objective. And I think after some years, they felt that maybe it's time for us to take the next step, which is to publish a report. And this is tied in with my earlier remark, that you want residents to take an interest in your housing estates.

So when the reports are published, initially anyway, I think the residents would take an interest. After a while they may begin to lose interest. Every year, what else is new? But I hope this will stimulate interest in the residents as to how their own Town Council is doing regarding certain key indicators on the management of housing estates. So the timing of the TCMR is just coincidental to the revelation of financial investments of certain Town Councils. They could have done it earlier or they could have done it later. I think this is not a material point.

ST: So the idea that residents can take a keener interest is one of the benefits of this TCMR. But do you see potential pitfalls of such a report?

PM Lee: Yes. I think the first potential pitfall will be perception of objectivity of the marking. Whilst the evaluators could be as objective as possible, the people who read the report may not always agree that the report is objective. So that's a potential pitfall.

Secondly, after some years, you're not likely to see marked changes in the benchmarking or in the marks accorded to each housing estate. So after a while people will say, well, there is no scandal; nothing else is new. Then they begin to lose interest. If you have an exercise in which people don't pay much attention, then you're just wasting resources.

ST: When you talk about objectivity, there is a worry that the opposition wards may be ranked much lower than the PAP’s. Will this issue become politicised?

PM Lee: You must look at this in a dynamic state. I think from what I know, from what I've seen in the visits to the opposition wards during the last elections, as of now, I think the opposition wards may be ranked lower, but they may not necessarily be the last. There could be some PAP Town Councils which would be in the same band more or less. That's a possibility. I mean I haven't seen them ranking the opposition wards as yet. So when that happens, of course, some people may say, the HDB is not being fair. But this is for people like yourself, the Straits Times chaps, to go around to verify the rankings and the markings with your own criteria. Then they can know whether it's fair or not fair. So it's useful to have somebody else to check on the HDB who does the ranking. And, of course, I would expect some disagreement here and there. But by and large, I don't think anybody should come away with the conclusion that this is a biased report. I hope not. In some areas, people may disagree but I don't think they will see this as politically biased. If that happens, then it's very bad. Even the perception that it's politically biased is very bad for us.

But my other point is this is a dynamic situation. If the opposition wards discover that they are right at the bottom and they know that their election, their re-election as MPs, might be affected by this ranking, they are going to put in a lot of effort. And they may decide to raise S&C charges to match the PAP Town Councils so that they can employ more and better resources to make their estate clean. So there is a trade-off. PAP Town Councils are prepared to charge more in order to have more resources put into the maintenance, into the facilities and so on. However, the opposition wards prefer to win support on the basis of lower S&C charges. It's a conscious decision. So they look at what PAP Town Councils are charging, they charge lower and then the trade-off will be a poorer estate in terms of maintenance and cleanliness. And it shows. So the opposition in future may decide that they want to match PAP Town Councils. They may charge the same or slightly below PAP Town Councils, but they match PAP Town Councils in cleanliness. When that happens, then some PAP Town Councils will say, “My god, I'm now at the bottom, I'm going to make sure I'm not at the bottom.”

ST: So will this lead to a race to the top?

PM Lee: Yes, a race to the top is okay. My worry is whether there will be a race to the bottom. Beyond a certain point, the chaps may say, I don't need that kind of cleanliness. The S&C charges are too high. You're cleaning five times a day. I don't need it. They may say I need you to clean only once a day or two at most. So these are possibilities.

But you shouldn't anticipate all these potential pitfalls to prevent us from having an audit. And we'll learn. This is not a process which would be frozen. We'll learn. We will think of how to improve the system, and make it more objective. And of course hopefully the media will take an interest and then the residents will take an interest and interpret the information given to them in the right light.

ST: This Town Council assessment exercise could also spawn more citizen journalists, residents going round the estates, taking photos and doing their own ranking.

PM Lee: That’s alright. They can do their own ranking. I think this will come and some of them will do their own ranking but can they sustain it for years? Yes, they may say, “I disagree with the HDB. You say the estate is clean, but I can show you it’s not so clean.”

ST: Would then one of the categories be residents’ own sort of assessment of their Town Council? They could say, I’m satisfied with a less clean estate because I pay lower charges? Should that also be part of the report?

PM Lee: I think in time to come they may decide to extend the report to cover residents’ perception. It's just the beginning. So you cannot now try and anticipate the kind of criteria that would go in. I would say, looking into the future, residents may have dissension over many things. Residents’ perception can be a criterion to be considered.

ST: What about lift upgrading? As you know this is something that a lot of HDB residents want but I also understand that most Town Councils don't have the money to do it, whether in opposition or PAP Town Councils.

PM Lee: Exactly. But that’s a national policy. The Lift Upgrading Programme is a national policy and it will be extended to Hougang and Potong Pasir. We have given an end date. I think by 2014, it will be done in all housing estates regardless of whether they are in opposition wards or PAP wards. But the town councils must make some co-payment which, I think, is between 5 to 12.5 percent depending on the flat type. I think all PAP Town Councils have sufficient money in their sinking funds for the LUP.

ST: One of the issues that will surely come about as a result of this is scrutiny of the Town Council’s finances. What is your view on this?

PM Lee: I think Town Councils should be given the autonomy to invest their finances, but there are some guidelines given by MND, because not all Town Councilors are savvy investors or would be able to engage professional investors to help them. So certain guidelines will have to be in place. But you want the Town Councils to have a certain flexibility to decide on how to maximise the returns on the funds which they have, because sinking funds are in the form of cash. If you just put them into fixed deposits or into the banks, that's the safest way; but even then, can you be sure the banks won't fail? I'm not referring to local banks, which we supervise very closely, but you can never say for sure that no banks will fail. Even the biggest banks in the world have collapsed. So what do you do?

I think it must be the duty of the Town Councilors to decide how they can maximise the returns. So they may have to start to buy some shares. I think we should allow them to do so with a long-term investment in mind, but cap it, so that they won't put more than a certain percentage of the funds into shares. In case the market collapses, they can hold. They are not forced to sell. These are long-term investments. And even if they lose money, it's a small percentage. Some Town Councils invested in CDOs (collaterised debt obligations) and structured products, but the percentage of investment was very small. Of course, to the residents, it is a lot of money. But when we take it in the totality of Town Council funds all over Singapore, it's not very big. I think it's less than one per cent. So the question is, do you want them to have that flexibility? My thinking is yes, but we should have certain guidelines, certain limits.

Let’s be realistic. Let's say that I allow the residents to advise me on how to invest, can you get an answer? If I ask, tell me how to invest, then we go by majority vote, the residents will say, what did I elect you for? You are my elected representatives, you decide. If you do a good job, I am not bothered. If you do a bad job, I will criticise you.[section]

[section section_speaker_id="2" section_short_name="0"]ST: So isn't this also one of the biggest problems with coming out with a transparent report. You open yourself to criticisms.

PM Lee: Yes, but as I said, this is part of the maturing process of our system of government. So we must be prepared to be criticised by the residents and we have got to be able to sift through the criticisms. Some of the criticisms are constructive. Some may be just critical but nevertheless, if there's some truth in what they say, you’ve got to take those views into account. Many others, you just ignore. You can explain, you know, but they are out there just to slam you. Ignore that.

ST: What is your take on the latest changes to the political system? How significant are they?

PM Lee: Your smaller GRCs and your SMCs - they are part of the political process. We have run this system well, but nevertheless many Singaporeans feel that this system disadvantages the opposition. They have some 30 per cent to 35 per cent of the votes but they end up with only two representatives in Parliament. That’s a valid argument. So we looked for ways to ensure that there'll be a better representation of different views in Parliament. So the question is, how to do it? PM had explained all this in Parliament, so there is no need for me to do so. But the objective is to ensure that different viewpoints can be represented in Parliament. That is an attempt to ensure that more people will have the chance to participate. And in a way, it makes it easier for the opposition parties to contest.

There is a misperception that big GRCs result in no contest just because of the system. Actually, the fault lies with the opposition parties in not being able to find enough candidates to contest. If they can find 84 candidates, they can contest in all the GRCs, but they can't find them in the first place. So when you can't find them, you decide how to deploy the limited candidates you have. You put them in SMCs and the smaller GRCs.

ST: Mr Chiam See Tong has declared his intention to step out of Potong Pasir and contest in a GRC. Is the time ripe for Potong Pasir to be won back by the PAP by the next election?

PM Lee: I hope Mr Chiam can contest. I hope his health will be good enough for him to contest. And if he wants to contest in a GRC, I would also encourage him. That means his health is good enough for him to want to lead a GRC. You see, we have come to the view that Singaporeans always want some opposition in Parliament. The question is, how many. So if Potong Pasir is still won by the opposition, I think so be it, because if it’s not Potong Pasir, it will be somewhere else. I don’t think Singaporeans have changed their views about wanting a few opposition members in Parliament. So it’s either Potong Pasir or somewhere else, so why not let it be Potong Pasir, if Mr Chiam contests? But of course, Mr Sitoh Yih Pin will not be very happy to hear that, but that’s the reality. And we are realists.

ST: You can always give him a walkover.

PM Lee: [laughs] No, I think that’s bad. We’ll contest. It’s always good for our branch and good for our candidate. And in fact, we should get some fairly young and good candidate who will cut his teeth in the ward. He may lose, but then, the next time it’s better for him. He can stand somewhere else.

Explore related topics

• Governance