Goh Keng Swee
Singapore
“Sir, since that was not a supplementary question, may I be allowed to comment briefly on that. When we form a Committee of the House to inquire into an activity of the Government, the assumption must be that there has been something improper. In this instance, where is the impropriety?”
“The career of Brig-Gen Lee is well-known to the public. It has been published in the newspapers. Why then does he come out with all this drivel, other than to impute improper motives? Mr Jeyaretnam: Sir, I object to the term "drivel" as spelt out by the First Deputy Prime Minister. He should know better as a Member of this House.”
“Sir, this is getting most tiresome. So I will just say this - that Brig-Gen Lee Hsien Loong has proved himself in so many ways, both inside the Army and outside the Army, to be a person of outstanding quality. When the Member for Anson says the public are worried, he is again talking nonsense.”
“Sir, I rise to clarify. Actually, the limits are not set by me. I do not have a heavy hand. I regard the MAS as the implementing agency of Government, and in this respect I have to listen to the Minister for Finance and the Minister for Trade and Industry.”
“How you set them, how restrictive or how liberal, would determine two things: (1) the degree of imported inflation from abroad via goods and services from abroad, and (2), the degree of capital inflow from abroad which will affect our money supply in Singapore.”
“Sir, if the land could be more profitably used, say, for commercial or residential purposes and if the Minister for National Development requires such land, then, of course, the land will be acquired and the generous terms will apply.”
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“Harvey entered into their lengthy deliberations on the salary structure and conditions of service in the civil service. This, of course, was not their fault, but nevertheless their recommendations must be considered in the light of changed circumstances. The principal and perhaps the most valuable work of the Commission relates to variable allowances. The Commission has recommended that the time has arrived to abolish variable allowances. The Commission arrived at this view on the basis of two considerations. First, the permanent pensionable pay of civil servants should be based on long-term considerations, but in times of instability, it is necessary to add a temporary, non-pensionable, addition to this pay. Second, wages and salaries should depend on services rendered and not on the marital status of the employee. In other words, the rate for the job. The Commission, taking into account the stability in the cost of living since 1961, considered that retention of variable allowances is not justified, nor should marital status of an officer decide how much pay he or she should get. Accordingly, the Commission recommended that the whole of variable allowances be consolidated into basic pay. This would mean an increase in the pensionable emoluments of civil servants. It will also mean an increase in the annual cost of pensions which is estimated at $1.3 million a year. The Government accepts this recommendation of the Salaries Commission. I want to stress that it is not an exercise in general pay increase but of consolidating a temporary allowance into total pay. The Salaries Commission further recommends that officers transfer into the new salary scales on the basis of their present total pay. The Government does not accept this recommendation.”
“It cannot be said that extensive unemployment among teenagers and youths, however regrettable it may be from other viewpoints, imposes acute hardship on these unemployed, for they will be living with their parents and at least will have their regular supplies of the necessities of life - food, clothing, shelter and so on. But in the case of unemployment of laid-off base workers, the majority will be the prinicipal bread-winners of their families. Prolonged unemployment will cause distress not only to the unemployed; such distress will extend to their dependants, including, of course, their children. This gives a new twist to the problem of unemployment, grave and difficult though it already is. In recognition of this fact, the Government has introduced legislation whereby lump sum benefits payable to laid-off workers will be paid into a Central Fund from which monthly payments will be made to ensure that the imprudent do not squander the capital sum in a spending spree. But these are palliatives. The solution is to get them new jobs and if need be, to train them for new jobs. I will not deal with the steps which Government is taking in various fields to meet this challenge to our economic stability. I need only emphasise what my colleagues and I have been saying all these months. The crucial years ahead will demand from everyone a considerable degree of exertion and even sacrifice. It will be a long and difficult period, but if we can see through the years up to 1973 or 1974, with our economy on an even keel, we can then look forward to a resurgence of growth and prosperity after that. These difficulties were not foreseen in 1967 when the Commission under the chairmanship of Mr G. J.”
“Mr Speaker, Sir, I would like to set out the views of the Government on the Report of the Salaries Commission which is now tabled before Parliament. The Government accepts most of the principal recommendations of the Commission. It also accepts most of the recommendations in regard to less significant matters. But before I set out the Government's position in detail in regard to recommendations of the Commission, may I first deal with the general background against which the recommendations of the Commission have been considered by the Government. First, it is clear that the present time is not the appropriate moment to introduce a general increase of emoluments payable to the civil service. Nor has the Commission attempted to do this except for Division I posts. There are grave problems ahead for all of us following upon the withdrawal of the British military presence planned for the end of 1971. My colleagues and I have commented on this subject on innumerable occasions in the past, but because of the crucial nature and the magnitude of these problems, they will bear repetition. The first impact of British military withdrawal will be a substantial increase in the volume of unemployment. This is known to everybody, but what has not been emphasised is that it is not merely the number of unemployed that will go up. There will also be a change in the nature of persons unemployed. Hitherto, the bulk of unemployed - in fact, more than three-quarters - are teenagers or youths of 20 or 21 looking for their first jobs.”
“Sir, I beg to move, "That the Bill be now read a Third time." Question put, and agreed to. Bill accordingly read a Third time and passed. INSTITUTE OF SOUTHEAST ASIAN STUDIES BILL Order for Second Reading read. 2.36 p.m.”
“MrSpeaker, Sir, I beg to move, "That the Bill be now read a Second time." The purpose of this Bill is to provide a supplementary estimate of $300,000 to meet the administrative expenditure of the new Bases Economic Conversion Department which has been set up early this year. This department will provide a central point in the Government machinery with which the British Government can liaise in all problems relating to the run-down of the United Kingdom bases. The Bases Economic Conversion Department will have, as its main functions, to conduct negotiations with the British Government on mitigatory aid to overcome the effects of the rundown of the British bases, and on the taking over of lands and other assets relinquished by the British Services. The department will also negotiate with the British Government and other interested parties on the conversion of the facilities, such as the naval dockyard, air bases and workshops, to civilian management and commercial use. The department has also been entrusted with the responsibility of organising the training, re-training and possibly re-deploying of workers discharged from the bases. The supplementary estimate of $300,000 to be provided will cover the 1968 expenditure for Personal Emoluments, $160,000; Other Charges Annually Recurrent, $92,510; and Other Charges Special Expenditure, $47,490. The amount has been advanced from the Contingencies Fund in view of the urgency to establish the Bases Economic Conversion Department. The Supplementary Supply Bill is to clear this advance in accordance with clause (2) of Article 87 of the Constitution of Singapore. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“ADJOURNMENT Resolved, "That Parliament do now adjourn." - [Mr Barker]. Adjourned accordingly at Nine minutes past Four o'clock p.m.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Financial Procedure Act, as it now stands, does not enable Parliament to approve expenditure for extraordinary or unspecified purposes. In Britain and a number of Commonwealth countries including India, Pakistan and Malaysia, there is provision for the approval of expenditure which on account of the magnitude or indefinite character of the service cannot be stated with the details given, as in ordinary estimates of expenditure. In the United Kingdom, such needs for expenditure are brought before Parliament by an application based on the estimate of the total sum required for a vote of credit. The form of a vote of credit is a demand for a lump sum with the objects stated in very general terms. It is accounted for by the Treasury which issues monies to the departments in accordance with their requirements. Recourse to these procedures takes place only in exceptional times. Nevertheless, no one can say that they will never be necessary, and it is prudent that we make provision for all eventualities as other Commonwealth countries have done. The necessary amendments to the Constitution have been brought to the House under the Constitution (Amendment) Bill. The proposed amendment to the Financial Procedure Act is complementary to the amendments to the Constitution to enable Parliament to approve expenditure for extraordinary or unspecified purposes. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. -[Dr Goh Keng Swee]. Bill considered in Committee; reported without amendment; read a Third time and passed.”
“These amenities will no doubt develop in course of time. In fact, it will be one of the principal objectives of the Corporation to improve social amenities in Jurong. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. -[Dr Goh Keng Swee]. Bill considered in Committee; reported without amendment; read a Third time and passed. CONSTITUTION (AMENDMENT) BILL Order for Second Reading read. 3.40 p.m.”
“I beg your pardon. Yes, but I find it difficult to believe that it is consistently worse than in other places. It may not be the freshest you can get in Singapore simply because the demand is rather small compared with, say, the bigger markets in town where stallholders will find it worth while to bring first quality goods because people are prepared to pay good prices for them.”
“They find it is more economical to live off their parents than to move on to Jurong and set up their own homes. But no doubt as these young workers advance in age and mature, they will get married and then they will want to find their own homes. When this happens, we shall find more and more workers living in the flats that we have built in Jurong. As regards complaints of fish and vegetables not being fresh, I do not know to what extent these complaints are justified. No doubt there may be some justification.”
“I thank the Member for Sembawang for his very kind words on the efforts of the Economic Development Board. As regards the Member for Kallang, he has made a number of constructive suggestions and criticisms and I would like to comment on some of them. He has asked for an assurance that trade union representatives should be appointed to the Board of the Jurong Town Corporation. Actually it is my intention to appoint equal numbers of trade union representatives and employer representatives. In fact, we have written to the N.T.U.C. for nominations, but so far we have not received any reply. So if the hon. Member can exert some pressure on his colleagues in the N.T.U.C., I would be most grateful. He made the observation that there is an immense amount of commuting between Jurong and the city. He said that the reason for this was that the amenities in Jurong were not as good as in the city. Actually the vast amount of commuting is not because amenities are inadequate. Amenities are inadequate because there is this amount of commuting. In other words, so long as small numbers of workers live in Jurong, you will not get the amenities coming up. For instance, there must be a certain minimum population before anybody thinks it worth while to set up, say, a cinema. This problem has been exercising our minds for some time. We wonder why workers prefer to spend nearly one and a half hours to two hours a day riding on buses or lorries or private taxis, or whatever method of transport it is they use, to go to Jurong and come back to work. We did a social survey of this problem some years ago. We found that the vast majority of workers employed in Jurong are people getting their first jobs. They are mostly youngsters living with their parents.”
“The object of having a large number of members is to enable more participation by members of the public, especially those who are actively involved in the development of the Jurong Industrial Estate and other industrial sites. It is necessary to establish the Jurong Town Corporation as soon as possible to enable a smooth take-over from the E.D.B. In welcoming this new institution, we should not forget the past contribution of the E.D.B, which has so ably carried out its complex tasks with much drive and imagination. Sir, I beg to move. Question proposed. 3.19 p.m.”
“The Government considers that the present time is appropriate to make a change in the structure of industrial promotion agencies and the advantages of creating a separate agency to look after industrial estates outweigh the advantages of retaining the present system of concentration of functions. The industrial estates, sites arid flatted factories to be transferred from the E.D.B, to the Jurong Town Corporation will include those in the Jurong Industrial Estate, Tanglin Halt, Redhill, Tiong Bahru, Kallang Basin, Kallang Park and Kranji. It is expected that the finance of the Corporation will be on a sound basis, but any financial shortfall, after taking into consideration its revenue from rentals, leases, and so on, will be made up by Government by way of grants and loans. Subject to Government's approval, the Corporation may also borrow money from the market. With adequate resources, the Corporation can provide for amenities for the well-being of the people working and living in the various industrial estates and sites to the extent which was not possible with the E.D.B. So far as the staff are concerned, they will be employed by the Corporation on the same terms and conditions as they have enjoyed with the E.D.B., and service with the E.D.B, will be deemed to be service with the Jurong Town Corporation for the purpose of determining seniority and of any pension or provident fund scheme to be established by the Corporation. The Corporation will consist of a Chairman, a Deputy Chairman and 15 other members all of whom will be appointed by the Finance Minister.”
“Sir, I beg to move, "That the Bill be now read a Second time." The Bill seeks to establish the Jurong Town Corporation which will take over from the Economic Development Board all the latter's responsibilities in regard to the provision of facilities for the management of industrial estates, sites and flatted factories in Singapore. The Corporation will, in addition, provide amenities for the advancement of the well-being of the people living in such estates and sites. Upon its establishment, the staff of the Industrial Facilities Division, the Civil Engineering Division and other relevant Divisions of the Economic Development Board will be transferred to the Corporation. In taking over the property of the E.D.B., the Corporation will also be responsible for its liabilities. The Economic Development Board was formed in 1961 as the principal agency of the Government in promoting industrial growth. It was a novel and pioneering venture. We decided at that time - and events showed that the decision was a right one - that the E.D.B, should undertake a large number of functions related to its work of industrial promotion. One such function was the provision of industrial sites equipped with all the facilities needed by modern industry - roads, railways, wharves, industrial water, electricity, telephones and so on. One advantage of concentrating diverse functions in ore organisation is the convenience this offers to the potential investor. He need see only one agency to settle a large number of problems. The rapid expansion of the Economic Development Board and the experience its staff has gained over the years make necessary a review of this policy of concentration as against the dispersion of specialist functions into specialist agencies.”
“Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. -[Dr Goh Keng Swee]. Bill considered in Committee; reported without amendment; read a Third time and passed. JURONG TOWN CORPORATION BILL Order for Second Reading read. 3.14 p.m.”
“Sir, I beg to move, "That the Bill be now read a Second time." This Bill seeks to amend the Development Loan Act, 1967, to allow the Government to raise loans in the domestic market by the issue of bearer bonds. The bonds will be issued in such denominations and under such conditions as may be decided by the Government. Hitherto, the Government has been issuing only registered stock which requires registering on purchase and whenever the ownership of the stock is changed. Such stocks, therefore, appeal to a limited market and we have found that our past issues have been mainly subscribed by institutions who hold such stocks till maturity. To increase the attractiveness of our loan issues, the Government proposes to issue bearer bonds as well. These bonds are payable to bearer and transferable by delivery without endorsement or registration. The names of stockholders will not appear on the stock certificate, neither will a register of stockholders be kept, so that anonymity of subscribers will be preserved. Interest coupons will be attached to the bonds, and on each date when interest is due, such coupons may be cashed at the nearest bank or with the Registrar of Loans. It will be clear from this brief description that the administrative work involved will be reduced considerably. The provisions of the Development Loan Act, which require sinking funds to be established to meet redemption of a loan floated, will however continue to apply to bearer bonds issued under this Act. So, once a loan is floated, money to meet its redemption is automatically set aside each year. Such bearer bonds, when issued, will become negotiable instruments and we hope this will encourage greater public participation in the mobilisation of capital for development. Sir, I beg to move.”
“Interest rates in continental money markets are slightly lower, but not all that much lower. In Frankfurt, we may be able to borrow at about 6¾ per cent, and in Switzerland possibly at 6¼ per cent. But these loans are not for the asking, because very prolonged and delicate negotiations have to be entered into between the Government and the lender or a consortium of lenders. What I intend to do really is to raise a small loan at an opportune time either in America or in Europe, not so much to use the money - because when you borrow at these rates of interest, it is going to be very difficult to justify expenditure on development on infrastructure at 7½ per cent, 8 per cent or even 6¾ per cent - but to introduce ourselves to the financial community of the world. I have been advised by various people that it is best to borrow money when you do not need it, because when you really need the money desperately you are unlikely to get it. At this time, when we are reasonably flush, it may be a good thing to raise the money either in New York, Frankfurt or Geneva, and to re-invest the money there possibly at a higher rate of interest. Actually, this is our plan and we are waiting for the right opportunity to put it into operation. Mr Lim Soo Peng rose -”
“I think the hon. Member really raises issues which are largely of theoretical and academic interest. First of all, he says that the Finance Minister can raise any amount of money in the overseas money markets. I think he is aware of the fact that most of the developing countries are not able to raise any loans in these overseas money markets because nobody will lend them any money. It is true, of course, that our credit rating is much better than that of the general run of developing countries, and one hopes that this credit rating will continue to be good. I do not think there is any advantage in raising any limit on loans that may be raised in overseas markets, for the simple reason that I do not expect these loans would be substantial and, in any event, any legislation on the limits of quantum of loans that may be floated does not really confer on Parliament any real control over the financial activities of the Government. When the limit is reached, then the Finance Minister will come to Parliament and ask for it to be raised. In fact, in regard to the limit on Treasury Bills which has been set by Parliament at $500 million, I shall soon be introducing a Bill to raise this limit to $1,000 million because we are fast approaching the limit of $500 million. As regards interest rates, here again this is determined by the rates of interest prevailing in money markets and by the credit rating which the borrower enjoys in the market. Rates of interest are at the moment pretty horrendous. For instance, if we are to borrow money on the New York market, say, a short-term loan of about five or six years, it is unlikely that we can borrow at an interest rate of less than eight per cent per year.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Mr Speaker, the Bill seeks to empower the Singapore Government to float loans in markets outside Singapore. Such loans could be floated either for the purposes of the Development Fund or for amortisation of another external loan. The maximum amount or amounts of the loan that may be floated will be approved by the President on the recommendation of the Minister. This is provided under clause 2 (3) of the Bill. For raising these external loans, the Minister is empowered under clause 4 (1) of the Bill to create and issue such securities as he thinks fit. The Minister may also determine under clause 4 (2) the terms and conditions as to repayment, redemption and other matters, including provision for a sinking fund to which the securities will be subject. Sir, this Bill seeks to provide Government with the enabling powers to borrow in external markets should the need arise. We have up till now floated loans in the domestic market to meet our development expenditure. With the accelerated British military withdrawal, our development expenditure will need to be increased in the years ahead. This necessitates increased borrowing and it is clearly in our interest to widen the market to include external ones. Having increased our range of options, it is then up to the Government to take advantage of money market conditions internally or externally, or both, in the best interests of the country. Sir, I beg to move. Question proposed. 2.54 p.m.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, this Bill is an omnibus Bill which seeks to rectify the restrictive nature of existing legislation which limits the types of investments that may be made from funds of the Government. The existing legislation is over-restrictive on the types of investments that may be made so that the bulk of our funds have to be invested in trustee securities, and these are mainly fixed price gilt-edged securities. Under the current legislation we are not in a position to provide any long-term hedge against endemic inflation in countries where these funds are held. Under the proposed amendments, investments may be made in any form as may be approved by the President. This will allow greater flexibility in our investment policy, as it will be possible to attract investments which would not fall strictly within the category of fixed price gilt-edged securities to be held by the Government. The earlier outmoded restrictions on the investment of Government funds must be removed if Government is to follow a realistic and more effective investment policy with surplus funds. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. -[Dr Goh Keng Swee]. Bill considered in Committee; reported without amendment; read a Third time and passed. EXTERNAL LOANS BILL Order for Second Reading read. 2.51 p.m.”
“Mr Speaker, Sir, I beg to move that Parliament doth the agree with the Committee on the said resolution. Question put, and agreed to. Resolution accordingly agreed to. STATUTES AMENDMENT BILL Order for Second Reading read. 2.47 p.m.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to a certain resolution. Resolution reported - "That the sum of $300,000 shall be supplied to the Government under the head of expenditure for the public services shown in the First Supplementary Estimates of Expenditure for 1968 contained in Paper Cmd. 3 of 1968."”
“The shipping or airline agent concerned will then forward the declarations to the Import and Export Office. All declarations will not have to be approved by the Import and Export Office. No fees are payable on these declarations. In this way, very little delay and no inconvenience will be caused to the traders. We have already consulted the various Chambers of Commerce, shipping associations and the Airline Operators Committee, and they have agreed to the procedures proposed. Sir, I beg to move. Question put, and agreed to. Resolved, That Parliament, pursuant to subsection (3) of section 5 of the Registration of Imports and Exports Ordinance (Cap. 261), resolves that the Registration of Imports and Exports Rules, 1967, published as Notification S 244 in the Gazette Subsidiary Legislation Supplement No. 76 of 14th December, 1967, as contained in Paper S.L. 60 of 1967, be approved. ADJOURNMENT TO A DATE TO BE FIXED Resolved, "That Parliament do now adjourn to a date to be fixed." - [Mr Barker]. Adjourned accordingly at Six minutes past Seven o'clock p.m. to a date to be fixed.”
“Mr Speaker, Sir, I beg to move, That Parliament, pursuant to subsection t3) of section 5 of the Registration of Imports and Exports Ordinance (Cap. 261), resolves that the Registration of Imports and Exports Rules, 1967, published as Notification S 244 in the Gazette Subsidiary Legislation Supplement No. 76 of 14th December, 1967, as contained in Paper S.L. 60 of 1967, he approved. Sir, the Registration of Imports and Exports Rules, 1967, embody the Imports and Exports Rules of 1935 together with a new provision for the documentation of trade between Singapore and West Malaysia. Until now, imports and exports to and from West Malaysia do not require Singapore per mits or Singapore documentation. The proposed documentation is to enable us to compile our own statistics of trade with West Malaysia. Such trade statistics are now compiled and supplied by the Statistics Department at Kuala Lurnpur. Documentation of our trade with West Malaysia is also made necessary by the export incentive scheme which is to be effective next year. Under the amended Rules, importers and exporters will be required to submit documents to cover goods imported from or exported to West Malaysia. In the case of imports by road or rail, the document required will be submitted to the Customs and will merely be an additional copy of the export permit which the exporter in West Malaysia submits to Malaysian Customs. For exports to West Malaysia by road or rail, the document required will be a copy of the Malaysian Customs import permit. In case of imports or exports by sea or air, the trader will submit one copy of the Singapore Inward Declaration or Outward Declaration to the shipping or airline agent.”
“Sir, I always thought that tontine operators were small-time people, domestic servants and such types. This is the first time I hear that they have formed a limited company. If, in fact, they have formed a limited company, then they will fall under section 38 of the Companies Ordinance provided, of course, the Member for Bukit Panjang is not correct in saying that these activities are illegal in law. Assuming that they are legal and they are registered, then they will come under section 38. Subsection (7) of section 38 gives the Minister authority by notification in the Gazette to specify terms and conditions subject to which subsection (6) of this section shall have effect. In other words, the activities and terms upon which these transactions are conducted can be regulated by the Minister; in this case, the Minister for Law. So the Member for Farrer Park need not despair. Of course, all this is on the assumption that these activities are legal. If they are illegal, then such companies cannot be registered. Question put, and agreed to. Clause 28 ordered to stand part of the Bill. Clauses 29 to 45 inclusive ordered to stand part of the Bill.”
“Sir, the Companies Act, which has just been passed by Parliament, provides under section 38 certain obligations in respect of com panies which invite the public to deposit money and there are certain obligations laid down under this Act to ensure that some control is exercised over them. I am not sure whether the companies referred to by the Member for Farrer Park would not come under the provisions of this Bill, because finance business is defined as borrowing money from the public, and this is exactly what these tontine companies do. They lend money to the public. I would have thought that it could be that these `companies would fall under the provisions of this Bill. This is really a rather legal technical point and perhaps the Minister for Law and National Development may come to the rescue again.”
“- then I am prepared to reconsider the matter. But my colleague and predecessor, the Minister of Defence, under whose skilful hands this Bill was produced, says none. He is also an experienced banker. All the same, we will give the benefit of the doubt to the Back-benchers who claim that small traders will be affected and, if that is the position, we will have a second look at this particular clause. In the meantime, this Bill must go through and controls must be imposed. Mr Rajoo rose -”
“My Ministry tried to get some information and asked for returns. These com panies refused to give any returns, so we just do not know what they are doing, and how they are investing their assets. Once this Bill becomes law, it is my intention to call upon all these companies to furnish me with the fullest details of how they have been investing their money. If it so turns out that a small trader or small manufacturer will suffer considerably by the limitation of unsecured loans -”
“I think he has repeated the points made by previous speakers, and I think the Member for Havelock and the Member for Choa Chu Kang have adequately answered all his points. There is one point raised - that there is fear that there will be unemployment as a result of Government control of finance companies. Why should there be unemployment? Unless, of course, some of these finance companies are found to be unsound, then they have to close down. If that is the case, it is better that they close down early so that fewer depositors lose their money than that more people are stung. The Member for Mountbatten, I think, has made some valid points. He says that we must ensure that the small businessmen who go to finance com panies for credit are not endangered. I have already given this assurance. Then he mentions housing investments and says that many finance companies invest in housing projects, and that this practice is disallowed in the Bill. Precisely so - you cannot take other people's money and invest it in long-term projects, money which the lender is entitled to have back, it is difFerent if you use your own money. If a group wants to invest in housing so that there can be better and more houses, the proper way is to use its own money to float a company and invite public sub scriptions for shares and use the capital to build the houses. You cannot use short-term deposits in building houses. Unsecured loans have been limited to $1,000, and many Members, both critics and supporters, think that this may be too small. I am prepared to look into it. But at present you cannot say to what extent the finance companies are, in fact, helping the small traders or small manufacturers. We just know nothing about the way these finance companies operate.”
“I can give an assurance that we will do everything to safeguard the interest of small borrowers from finance companies, be they small traders, fishermen, or small industrialists. What we want to prevent is the wrong or inappropriate investment of other people's money either in non-liquid or in speculative ventures. The Member for Tampines says that the Commissioner for Finance Companies is a powerful man. Of course, he is a powerful man. He needs the power to control finance companies. How are you going to ensure that adequate control is exercised over these people if the Commissioner does not have these powers? But what the Member for Tampines has not said is that these powers are unnecessary. He says that civil servants cannot tell finance companies how to make a profit. I agree with him. But we can tell finance companies how their assets can be secured so that when their depositors want their money back, it can be forthcoming. The Member for Tampines also asks: do other countries have similar powers in their legislation? The answer is: in other countries finance companies are not allowed to be established. You have to establish a properly-run bank, which is subject to all the controls which a central bank exercises over people who take in deposits and lend out deposits. It is only here, due to a lacuna in the law, that these finance companies have been allowed to be established. We cannot get them under the Moneylenders' Ordinance. We cannot get them under the Banking Ordinance. Therefore, it is necessary to introduce new legislation to control them. The Member for Jalan Kayu has not made any new points.”
“I have stated in my speech on the Second Reading that they do perform a useful role in society and that we should try to allow them to fulfil this useful role. The Member for Have-lock and the Member for Choa Chu Kang have so clearly and so forcefully put the case for control of finance com panies that there is very little for me to say, without repeating what they have already said. But I do wish to refer to the points made by the Member for Havelock. He said that we should not try to control how people should lend their own funds. That is not the case. We are trying to control the means by which people lend other people's funds. It is all right if you speculate and make money; or if you speculate and go bankrupt. No one is going to stop you one way or the other. But we must make sure that you do not endanger other people's money, and that when you borrow money from the public, you invest it wisely and securely, and that abuses of various kinds whereby directors of companies can make use of other people's money to get rich, must stop. This is the cardinal principle underlying this Bill. Critics of the Bill have said that it will bear very harshly on finance companies and many of them may close down. On the one hand, they say that these companies are essential to the economy and that they are being well run. In fact, the Member for Ulu Pandan claims that in many cases their liquid position is even better than that of the banks. If that is so, what have they got to fear from this control? Many Members have stressed the need to safeguard the interests of small borrowers who are traders or small industrialists and have to go to finance companies for finance.”
“Sir, the Member for Choa Chu Kang was quoting from the proceedings of the Select Committee on the current Companies Bill in which the topic discussed was finance companies which are subsidiary companies of banks, and it was regretted that banks had only a moral obligation and not a legal obligation to support the finance company, so that the finance company could use a bank's name and in that way attract deposits. Here, Sir, in today's Straits Times there is an advertisement, presumably inserted by one of the big local banks, which disclaims all connection with a finance company with a similar name. May I read you excerpts from this advertisement which appears on page 20 of today's Straits Times? `THE OVERSEAS UNION BANK LTD, and the OVERSEAS UNION GROUP offer to their customers a comprehensive range of services ... etc. OVERSEAS UNION BANK LIMITED and its wholly-owned subsidiaries: OVERSEAS UNION BANK NOMINEES LTD. OVERSEAS UNION INSURANCE LTD. OVERSEAS UNION ENTERPRISE LTD. OVERSEAS UNION GARDEN LTD. To save confusion, may we point out that THE OVERSEAS UNION BANK LTD, and the OVERSEAS UNION GROUP have no connections whatsoever with the OVERSEAS UNION FINANCE LTD. of Singapore.' Sir, when things have reached such a pass, that finance companies resort to this kind of dubious practice, I think it is absurd to suggest that we refer this Bill to Select Committee in order to allow more scope for rather dubious characters to engage in this kind of dubious practice. So I am afraid I cannot agree with the proposal from Mem bers to refer this Bill to Select Committee, as there is urgent need to see that control is instituted forthwith over finance companies. In so saying, may I repeat again that I do not regard all finance companies as of a doubtful character?”
“I give them an assurance that an extension of this period will be granted to' finance companies which have genuinely been attempting to liquidate these liabilities within the six-month period of grace. Sir, I beg to move. Question proposed. 3.54 p.m.”
“Many of these were of dubious character and in the process of liquidation, large numbers of innocent persons who had placed their money with these insurance companies suffered losses. I am not suggesting that all or any of the finance companies now in operation are of the same class as the insurance companies. I know for a fact that a number of finance companies have impeccable backgrounds. Unfortunately, I cannot say this for all of them. In view of the very rapid growth in the number of new companies, it is necessary to pass this Bill without reference to Select Committee so that proper control may be established and that future proliferation can be checked. Since the introduction of this Bill, I have received a number of representations from finance companies and these are being studied. Every consideration will be given to the representations and, if necessary, this legislation can be amended in an amending Bill. I must say, however, that I am not in sympathy with all the representations that I have received. We cannot have finance com panies encroaching into territory which properly belongs to banks. It is not an accident that the growth of finance companies took place at a time when control and supervision of banks were tightened. Having said this, I acknowledge that different kinds of finance institutions are needed to mobilise our capital resources and that a proper role must be defined for finance companies. This Bill is the first attempt at the definition of such a role. Some companies have expressed alarm that `they would have to liquidate some of their liabilities within six months.”
“The Bill provides for periodic inspection by the Commissioner of the books and accounts of a finance company. The Commissioner is also empowered to obtain such information and data as he may require for the proper discharge of his functions. If a finance company contravenes any provisions of the Bill or carries on its business in a manner detrimental to the interests of its depositors or becomes insolvent, the Commissioner may revoke its licence. There is also provision for appeal to the Minister on the Commissioner's decision to revoke a licence. In the event of a winding-up of a company, the depositors shall be deemed to be holders of debentures secured by a floating charge over all the property and undertaking of the company. The liquidator of the company is enjoined to inform every debtor of the company and to require him in writing to redeem within three months any property he had deposited with the company as security. Co-operative societies, banks, and the Post Office Savings Bank are exempted from the provisions of this Bill. This Bill has been drafted with the assistance of an expert sent by the International Monetary Fund. It was the intention of the Government to send this Bill to Select Committee so that the views of the public and those whose interests are directly affected by the Bill may have opportunity of expression. Unfortunately, in the last few months there has been a very rapid increase in the number of finance companies. This proliferation of finance companies can hardly be looked upon with equanimity. Members will recollect that in 1962 it was necessary to legislate for the control of mushroom insurance companies.”
“It also allows the licensing of unincorporated firms, such as pawnbrokers who are now engaged in financing business, on condition that they incorporate themselves into public companies within three months. A finance company is prohibited from engaging in trade or investing more than 25 per cent of its capital and reserves in other undertakings. Nor can it acquire immovable property otherwise than for the purpose of conducting its business. Unsecured advances are subject to a maximum of $1,000. There is also a prohibition on a finance company dealing in its own shares. Existing finance companies who have so entered into any of these prohibited transactions are allowed six months, subject to extension by the Commissioner, in which to liquidate such transactions. Every finance company is required to maintain a reserve fund. This Bill imposes restrictions on the declaration of dividends to shareholders until a company builds up its reserve fund equal to its paid-up capital. A prescribed percentage of a finance company's deposit liability shall be held in liquid assets comprising legal tender, bank balances, money at call, and Treasury bills. Here again, existing finance companies are allowed a six months' period of grace to meet this requirement. The Minister is empowered to prescribe maximum rates of interest payable on deposits and chargeable on advances, the maximum amount of advances which may be made to any person or class of persons, the maximum percentage of total assets that a company may hold in particular types of advances, minimum down payments and maximum maturity periods for loans or advances. The Minister may also prescribe reserves to be maintained with the Accountant-General.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." This Bill seeks to license, and impose minimum standards on, finance companies which accept deposits from members of the public. Heretofore, such companies did not have to comply with any requirements, save those under the Companies Ordinance. Inasmuch as these companies are custodians of the savings of individuals, it is imperative that their operations should be subject to Government supervision in much the same way as banks and insurance companies are. As a rule, the role of finance companies as financial intermediaries is limited to the mobilisation of domestic savings to finance the purchase of consumer durables. In the absence of proper supervision, however, these companies could turn into vehicles for risking household savings on speculative ventures of the directors. There are two limbs to the definition of "financing business" given in clause 2 of the Bill - (i) borrowing money from the public by acceptance of deposits and issuing documents acknowledging indebtedness and undertaking to repay the money on call or after an agreed maturity period; and (ii) lending money to the public or to a related company. With the coming into force of this Bill, no financing business shall be transacted by a company unless it is a public company and is in possession of a licence granted by the Commissioner for Finance Companies who shall be appointed by the Minister. One of the conditions for the issue of a licence is that the paid-up capital of a company shall not be less than $500,000. The Bill contains transitional provisions enabling exemption of existing finance companies from this requirement.”
“Sir, I beg to move, "That the Bill be now read a Third time." Question put, and agreed to. Bill accordingly read a Third time and passed. LABOUR (AMENDMENT) BILL Order for Second Reading read. 2.40 p.m.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The purpose of this Bill is to provide statutory authority in accordance with clause 2 of Article 85 of the Constitution of Singapore for additional provisions for expenditure in excess of the pro visions for expenditure authorised in the Supply Act, 1966. These additional sums have been scheduled as Supplementary Estimates and laid before Parliament. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“Sir, I beg to move, "That the Bill be now read a Third time." Question put, and agreed to. Bill accordingly read a Third time and passed. SUPPLEMENTARY SUPPLY BILL Order for Second and Third Readings read. 2.38 p.m.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Main Estimates of Revenue and Expenditure for the year 1968 have been considered and approved by the House as Cmd. Paper 26 of 1967. Under section 85 of the Constitution of Singapore, Heads of Expenditure other than statutory expenditure to be met from the Consolidated Fund have to be included in a Bill to be known as the Supply Bill. The purpose of such a Bill is to provide for the issue from the Consolidated Fund of the sums necessary to meet the expenditure and the appropriation of these sums for the purposes specified therein. The Supply Bill before Members is to give legislative approval for the issue of funds from the Consolidated Fund to meet the sums of expenditure for 1968. In the Schedule to the Bill are shown the various Heads of Expenditure and the sums that may be incurred in respect of each Head. These have been approved by the House in the Estimates of Expenditure for 1968 and appear in pages 53 and 54 of Paper Cmd. 26 of 1967. Once the Supply Bill is approved, I will be empowered to issue warrants authorising expenditure up to the amount under each Head as shown in the Bill to be paid out of the Consolidated Fund. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“Sir, a total of 1,075 civil servants retired on reaching the age limit since 9th August, 1965. Of these, 73 persons or 6.8 per cent have been re-employed. The hospitals and primary schools employed ihe largest numbers. The hospitals le employed a total ef 16 pensioners, 14 of whom are medical ancillary staff and 2 are medical officers. The primary schools re-employed 12 retired teachers. Twenty-nine retired officers have been re-employed for more than one year. A re-employed pensioner is normally paid four-fifths of basic salary and variable allowance or the difference between his last drawn salary and his pension, whichever is the lesser. The Government does not re-employ retired officers without good reason. The number of retired officers re-employed for more than one year, namely, 29, will not make any difference to the level of unemployment.”
“Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolution." Question put, and agreed to. Resolution accordingly agreed to.”
“The general position about the supply of consumer goods produced by our industries is that the supply is ample and quite adequate to meet domestic demand. Should any shortage develop temporarily, the action to be taken by the Ministry is to abolish quota restrictions or otherwise increase the imports of such goods. This has happened, as I explained to Parliament some time ago, in respect of a number of commodities. As regards the increase of prices, I do not get the impression that there has been a general increase in prices since the devaluation of Sterling. The market was greatly upset about a week or two because of this wretched coin business. This has sorted itself out. As I have often informed Members, some prices do go up and other prices do come down. And by selecting prices which go up or prices which come down, you can prove any point you want. But as I have said, I do not get the impression that there is an abnormal increase in prices. Rather, at about this time, the festive season, there is nothing much to justify increased prices. But that is what one suspects when people are buying more for Christmas and the New Year. And I would say that for this year prices have not gone further up than in previous years. Madam Chan Choy Siong: I beg leave to withdraw. Amendment, by leave, withdrawn. The sum of $1,620,460 for Head 0809 ordered to stand part of the Estimates. Head 0901 -”
“Sir, it is never possible to eliminate corruption completely. Corruption always exists even to a minor degree. What is important is that every effort should be made to detect corruption and to prosecute the culprits. In this instance, the C.PI.B, investigations into the Import and Export Office have been concluded and, as I said in reply to earlier questions, the result of the investigations is that 12 officers have been interdicted. Charges have been preferred against some of these officers, while charges of arrest are being cleared with the Solicitor-General. The Public Service Commission has also appointed Committees of Inquiry and they will be holding disciplinary proceedings under the Public Service (Disciplinary Proceedings) (Procedure) Rules, 1964.”
“I think this is really a matter for the Minister for Labour who is going to introduce a scheme which will cover persons retrenched not only from the British Bases, but also employees retrenched as a result of cessation of business, or because they are redundant, or for one reason or another. I think that is entirely a separate matter and should be dealt with in the ordinary course of income tax administration.”
“The Member for Bras Basah wants to know whether retirement benefits paid to people now employed by the British defence forces will be liable to income tax when they are retrenched. The answer is that special provision will be made to exempt such payments from income tax. This is a matter which concerns the Minister for Labour who is now working out a comprehensive scheme to help these people through their period of difficulty. So far as I am concerned, I can say that the gratuities paid to the Base workers retrenched from the British armed forces will not be taxed. As regards tax exemption for tax-dodgers, if they bring out their assets and invest them in a way which commends itself to us, I do not really like to give a snap decision now. I would like to think this matter over. There are obvious pros and cons to it. But the Member for Telok Blangah will rest assured that I will give consideration to his proposal. I cannot say at present whether it will be favourable or otherwise.”
“$6. Maybe these people have two pigsties. The Health Department render services to farmers so that their pigs are healthy. There is no collection of any sort for poultry pens. 6.45 p.m. As for farmers being worse off, farmers in every country say this thing. The Member for Jurong should be very fortunate that there are fewer farmers there and more workers. So I would have thought that the reduction in the number of farmers is really to the advantage of the hon. Member. I think what he has said about hardship in resettlement cases should be taken seriously. I am sure that hardship could have arisen in some individual cases but not generally. I think there should be some machinery for detecting these cases of hardship so that action can be taken to mitigate the effects. This is really a matter for the Minister for National Development. I suggest to the hon. Member to bring it up before him.”
“Sir, Members appeal for a reduction in property tax in respect of pigsties and chicken pens. For their elucidation, there is no property tax on pigsties and chicken pens, because I entirely agree with the Member for Sembawang that pigs and poultry cannot pay tax. We do not tax them. What happens is that the Health Department levies a fee of $6 a year on every pigsty. An hon. Member: $12.”
“This tax must have been laid down in the reign of Queen Victoria and has not been changed since. Some years ago the Land Office, which was then in charge of collecting these revenues, had an enormous backlog and they were fighting very hard to reduce it. It was not until this work had been transferred to the Inland Revenue that much progress was made. I think the Member should congratulate the owner of this house on having escaped an upward revision for so long.”