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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“Sir, I will look into this matter and see whether or not we can simplify proceoures. As regards $1.98 property tax, I will accept the Member's word for it. It just shows that the person in question had been under-assessed before. [Laughter].”
“Surely this is a proper reason why the Property Tax Division has to be most careful about who is the real owner. Otherwise more owners might be missing! In spite of all that, the Member has talked about delays in getting numbers. My information is that the number of applications received for house numbers and which is still outstanding as of this moment is 347. So it cannot be all that large, considering the number of attap huts in the rural areas. It may be 30,000 or more. As regards the reduction of annual values, there are set procedures laid down. No doubt these procedures entail a lot of difficulties and trouble which are beyond the rural folk to comprehend. But here again I must remind hon. Members that the annual values attached to these properties are very low. $300 a year would be an exceptionally high figure. Most of them would be in the region of $150 to $180 a year. So it cannot really be said that this involves great hardship on the rural folks. On the question of whether we should simplify our procedures, I think the opinion of Members from the rural constituencies is that we should simplify them. I am willing to listen to any reasonable suggestion for simplifying procedures. if hon. Members have any good proposals, I will give them the fullest consideration.”
“Sir, the rate is considerably lower. How can you say $6 is slightly lower than $48? It is considerably lower. Owner occupiers of attap dwellings pay $6 property tax a year. There are 12,000 owner occupiers enjoying this concession. So I think Members representing the rural constituencies might have a kind word for the Finance Ministry when discussing property tax. Now, of course, the point is why 18 per cent if they rent out the dwellings? Why not 18 per cent? They are landlords; they are not farmers. They are all renting out their property. If they have built a stone or concrete building, they pay 18 per cent. So if they build a wooden structure with attap roof, why should they be exempted from property tax? The Member for Punggol has brought up a number of points about transfers of ownership and applications for house numbers. I must say that his knowledge of this business is quite encyclopaedic, and I cannot claim to rival his knowledge of this subject. I am not, of course, being subject to so many applications at "Meet the people sessions". This is a vexatious problem. I do not pretend that it is not a vexatious problem. These people are often not well educated and not educated in the law and administrative processes. This is a subject which I think really does not fall within the province of the Property Tax Department. This is, if I am right, something which concerns the Registrar of Deeds. Or is it the Land Office? When it comes to matters of ownership of property, naturally the Property Tax Division must be careful about recognising who is the owner of any particular property. In the instance mentioned by the Member for Punggol, the original owner is missing.”
“There was a reduction, maybe before the Member was elected. I cannot be wrong. It happened in this House. This $1.92 is not property tax. It is quit rent or something like that. We are renting out land in the rural areas at ridiculously low prices. Our rural folks are really spoilt. If they were farmers, say, in other countries, the landlord would take over half of their produce to start with, and the Government would take half of the balance. This goes on in all agricultural countries. And here, what do we charge them - $1.92 a year - not a month - quit rent. Then the owner occupiers pay $6 instead of $48. We are giving them a present of $42 a year. Far from being grateful, they ask, why are we charging so much for those who are renting out their houses? If they are poor farmers - men who are that poor - how can they build a house to let out? They become landlords. They are not poor farmers.”
“Sir, there is no gratitude ever in these matters. Only - when was it? - three years ago, maybe four, we reduced the rate of property tax on owner occupiers of attap huts to $6 per year. If they are owners -”
“The Member is quite correct in his assumption that this expenditure is to be incurred in respect of administration of the economic expansion incentives schemes. As Members know, this scheme provides for a reduction of 90 per cent of income tax on profits earned from certain types of exports, namely, exports to new markets. In order to prove this kind of export performance, a manufacturer will have to submit to the Comptroller of Income Tax, Customs certificates certifying that these goods, in fact, have been exported. So it can be seen that this scheme will involve the Customs in a considerable amount of additional work, and this sum is to provide for the additional expenditure required. The $350,000 is made up as follows: Staff $302,000, Other Charges Annually Recurrent $12,000, Equipment $36,000.”
“Sir, I am afraid I must give the same reply which I gave the Member for River Valley when he raised his first inquiry. This vote appears under the Public Service Commission. I think there has been a slip-up in the transmission of responsibility for answering these matters. My Ministry was under the impression - quite erroneously as it has turned out - that these questions would have been answered by the Minister responsible for the operation of these allowances. Apparently it is not so. So I do apologise to the House for being unprepared to answer matters which, strictly speaking, do not fall within my responsibility. I think this is a thoroughly bad show. I hope that next year somebody will make sure that when it comes to considering this particular head of expenditure, the Minister who is in charge of actually operating this vote will be present to reply to hon. Members.”
“No, I do not think it is equitable to require some hotels, who are really no better than lodging-houses, to pay this tax, because under no conceivable circumstances would international tourists be patronising them. The Tourist Promotion Board makes up a list of tourist hotels and these are the hotels that benefit most directly from the promotion activities of the Board. So it is fair that these hotels pay their contributions. The other hotels do not. It is true that some second-rate hotels may benefit from the present shortage of hotel rooms, but this can be regarded as only a very temporary phenomenon. But I must ask the hon. Member not to believe that the tourist hotels are only the very big hotels like Goodwood, Raffles, Inter-Continental, and so on. Some of the smaller hotels are also paying cess. The Mayfair Hotel, for instance, is paying tax.”
“Mr Speaker, Sir, although charitable allowances appear under the heading of my Ministry, in fact, individual items are the responsibility of other Ministries. In this case, I suspect it is either the Ministry of Health, since this is a physicians' institute, or it might even have been at the instance of the Prime Minister who spoke to some medical institute yesterday. So I am afraid I cannot enlighten the hon. Member.”
“Sir, this is an obligation which we have inherited from the distant past. In fact, we have to go back to the foundation of Singapore itself, back to the year 1819 when Sir Stamford Raffles landed at the mouth of the Singapore River. In that year, some 66 acres of land in Kampong Glam were allowed for the use of the heirs of Sultan Hussain and his descendants. The Sultan occupied the land until he died in 1835 and this property had been passed on from generation to generation. In the year 1897, the Courts of Singapore ruled that the land belonged to the Colony of Singapore and not to the Sultan's descendants but that they were allowed to make use of it. So in the administration of the properties under the Sultan Hussain's Ordinance, provision is made for an annual payment to be made to the family and descendants of the late Sultan, and throughout the years the net revenue has been paid out to the descendants and this amounted to $63,379.99 in 1964. In 1965, it was $60,422.38. In 1966, it came to $61,005.85. There are now 23 beneficiaries and all payments are made in accordance with the provisions of the law. There is no way of reducing this payment and I think we should honour this historical obligation which we have inherited from Sir Stamford Raffles.”
“Sir, let us not go for this kind of propaganda stunt. Price control will be ineffective in Singapore. The only way to keep prices reasonable is to have a lot of competition so that nobody monopolises anything and is in .a position to exploit the public. Foreign loans, so far as the Singapore Government is concerned, amount to only $12 million. They consist of an interest-free loan granted by the United Kingdom Government in 1953 to help us over war damage compensation. $11,580,000 of this loan is still outstanding. Then there is the Colonial Development Welfare Loan granted in 1954 and $� million of this is outstanding. So Government has borrowed something like $12 million. On the other hand, we have about $1,200 million invested abroad or, in other words, lent to other countries. So we are a net lender of capital, not a borrower. Of course, the Public Utilities Board, the Port of Singapore Authority and the Telephone Board have borrowed money from the World Bank. These are for what people call self-liquidating projects. In other words, they are not Government loans, as the term is understood, but are loans to pay for actual economic projects which will pay for themselves, like the loan to build a power station or extend the power station, to extend the supply of water, to expand the port and to expand our telephone services. All this means more money is earned to enable the loans to be repaid. But as for Government loans as such, they amount to only $12 million. Madam Chan Choy Siong: I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. The sum of $57,776,690 for Head 0801 ordered to stand part of the Estimates. Head 0803 -”
“As for rudeness to M.P.s, I shall be grateful if any Member of Parliament, who has been so treated by civil servants, will report immediately such an occasion either to the Minister of the Department or to me and I will undertake to make immediate investigations into the incident. As regards waste of public funds, it is no use pretending that public property or public funds are not being wasted. I will give you an example. The T.V, cameraman dogs Ministers on public occasions and eventually we get about six seconds on T.V. To take these six seconds, I suspect they shoot about five minutes of film, thereby wasting not only film - that is not so important - wasting not only developing solutions to develop this film, wasting not only the contact prints that have to be made, but also the time of the editor and the splicer. I hope something can be done in this respect. This is just one occasion --- An Hon. Member: Resign! Dr Goh Keng Swee: No, no, heaven forbid. These things do happen and all I can say is that everybody should keep a sharp look-out for these things and put a stop to them when they are detected. The Member for Sembawang says we should have price control because other countries are having price control. I ask him to name one country in South-east Asia where price control has been introduced and is effective. Let us forget about it. It is all right for propaganda purposes to say "Let's control prices." But everybody knows that if an open economy like Singapore's, you cannot have that.”
“The Member for Delta has raised three important points. First, corruption. She says that although there have been improvements since we took office, there are no grounds for complacency and we should always be vigilant in stamping out corruption. I entirely agree with her. We cannot afford to relax the slightest in the maintenance of a vigilant attitude towards corrupt officials. We have the Corrupt Practices Investigation Bureau which is doing a good job of work. For instance, in my Ministry they have investigated into alleged corrupt practices in the Import and Export Office, as a result of which 12 officers have been interdicted and they are going to be charged in court. We cannot be too vigilant in searching for more offences and weeding out corrupt officials. The final responsibility, of course, rests with the public. If they know that corrupt practices are going on, they should report them forthwith to the C. P. I. B. The Member's second point was about the bureaucratic attitude in the civil service. She said that after 1959 we effected a great improvement and that lately there has been a gradual reversion. Public officers are more prone to be rude not only to members of the public but also to M.P.s. I do not know what the truth is, but I will not be surprised at all if there is a lot in what she says. All I can say is that every Minister, and every Parliamentary Secretary for that matter, should look out for examples of discourteous conduct by civil servants towards members of the public. And when they come across such instances, the persons concerned should be subject to disciplinary action. I cannot agree with her more that we must not allow any relaxation of the high standards of courtesy we expect from civil servants and employees of statutory authorities.”
“Sir, the following properties have been purchased. In Australia a chancellery has been bought at 8 Mugga Way, Canberra. In the United Kingdom a residence for the High Commissioner has been bought at 62 Redington Road. In Australia a residence for the High Commissioner has been bought. In New Zealand a residence for the High Commissioner has also been purchased. This is a property at 12 Tensing Place, in Wellington. We have also bought a residence for our High Commissioner to Malaysia at 42 Jalan Perkeliling in Kuala Lumpur. A residence for our Ambassador to the United States has been purchased at 2205 Foxboro Place, Washington. There are still other properties to be bought, a chancellery in Washington and a chancellery in London. We may also have to buy property in Djakarta, Hong Kong, Bangkok and Tokyo. In addition to buying these properties, there is the cost of furnishing both the chancelleries and the residences of our Ambassadors abroad.”
“This vote has a long history, going back to 1961. In July 1961, there was held in Singapore the Eighth Regional Conference of the Commonwealth Parliamentary Association where the then Minister for Education announced the offer of ten special scholarships each year for students from Sabah and Sarawak. These were to be given special treatment by way of training places and the awards were to be known as "Malaysia Scholarships". A separate vote was created in 1963 to finance them. But when we joined Malaysia, the territories of Sabah and Sarawak also joined Malaysia simultaneously with us and technically it was not possible to award scholarships to these scholars from the Colombo Plan vote. So to overcome this difficulty the Malaysia Scholarship scheme was introduced in a separate vote made up for them. Since we left Malaysia in 1965, scholars from Sabah and Sarawak were again eligible for Colombo Plan scholarships and, in fact, this would be the way in which they would receive their training in Singapore. So the present vote is really meant for the 15 scholarships awarded and expected to be outstanding in 1968. The amount of this vote, of course, will diminish in course of time as the scholars complete their studies and return to Sabah and Sarawak.”
“This $300,000 is really for participation in rather modest trade exhibitions in various countries, not in any way up to the standards of the Osaka Expo or that kind of trade fair. 4.45 p.m. This $300,000 is really peanuts, but I am afraid that is all we can afford.”
“The Member has asked whether we are going to hold a trade fair in Singapore next year and whether the $300,000 is for this purpose. I think that is his point. The answer is no. We are not going to have any trade fairs in Singapore, and if we did, it would cost much more than $300,000. Let me inform Members of the House what is involved in organising trade fairs. Last year a trade fair was held in Bangkok for the ECAFE region. Singapore was given the first option to hold this trade fair. I was then in the Finance Ministry, and I made inquiries into the cost of holding such a trade fair. Experts from other countries were called in and they had a look at the possible trade fair ground which was the old Kallang Airport. Estimates were made of the different kinds of facilities which would be required of a world trade fair for the ECAFE region and of a standard which ECAFE had in mind. The cost was something in the region of $90 million - the whole lot to be borne by Singapore. We do not have that kind of money and so we passed off this option, and the trade fair was held in Bangkok. Sir, either in 1969 or 1970 there will be the Osaka Expo, or an Exposition in Osaka. When I was last in Japan, I got in touch with the organisers of this Expo and asked them what, in their opinion, should Singapore spend on its pavilion in the Osaka Expo, assuming that we do participate in it. I explained to them that we are a small poor country and what I really wanted from him was an idea of the minimum sum that we would have to spend in order not to disgrace the Republic. And he said, "$15 million". This kind of money, Mr Speaker, Sir, I am afraid we do not have.”
“Sir, the answer is in the affirmative. In fact, I am haying negotiations with two organisations who can provide the know-how and management to run football pools in Singapore. Mr Lim Cheng Lock: Sir, I beg leave to withdraw. Amendment, by leave, withdrawn.”
“I have been unwittingly drawn into this controversy as I have been pointed out as the villain of the piece. When people want to build markets and they want the Government to fork out the money to build them, may I ask them, how many vacant stalls are there in the existing markets'? You will be astounded to know that in some markets three-quarters of the stalls are vacant. So what is the point of building more markets when you cannot even fill up the stalls in the existing markets? 4.30 p.m.”
“I do not know; I am not an expert on growing seaweeds or growing anything for that matter. But I think as a pie in the sky, this really takes the cake! Question put, and agreed to. Resolved, That Parliament approves the financial policy of the Government for the year 1968. ADJOURNMENT Resolved, "That Parliament do now adjourn." -[Mr Ong Pang Boon]. Adjourned accordingly at Thirty-three minutes past Seven o'clock p.m. Appendix to Mr Speaker's announcement(Col. 545) (Cols 0621-0624)”
“I can assure the Member that the refineries, if they cannot sell their products to the U.S. Forces in Vietnam, can sell them elsewhere. So to the Member for Farrer Park, I say do not fear. All will be well. He need not have any guilty conscience about our making money out of other people's miseries and misfortunes. Some Members have come forward with suggestions of how we can get round our economic problems. I do not want to appear ungenerous or ungrateful, but I must say that some of these proposals are just non-starters. I regard them as quite illusory. For instance, a common market was proposed. Who does not want a common market? But are you going to get it? This is a pie in the sky. So let us keep our feet on the ground and not bank on very speculative propositions. Then some Members said that we should help everybody - the hawkers, taxi-drivers, small shop-keepers, the unemployed, and so on. Of course, we should try to help everybody. This is the most proper attitude to take. But does it mean that the Government must dish out money just because somebody is in trouble? I do not think so, because if we were to engage in this kind of activity, I assure you that the Budget would not be balanced and we would have to get taxes from somebody to pay these people. So I do urge these hon. Members - mind you, I grant that their hearts are in the right places and that they are very dedicated and genuine socialists - that this is not the way to get our economy on the move. The objective is not to get money from somebody and give it to others. This is charity. The real objective is to create new wealth so that everybody will have more of it and useful work to do into the bargain. Finally, on the proposal to grow seaweeds.”
“As the Latin tag says, "caveat emptor". Why should people not develop more self-reliance? Why should they not make these calculations themselves? I make this point because in my previous stint as Finance Minister I did have this subject studied, and a draft on control of hire purchase was sent to me. But it was such an enormous document that I never went beyond the first page. So in view of what I have said, quite frankly, I do not think this deserves priority. Although, mind you, if public opinion is so strongly of the contrary view, then I am prepared to change my mind. As regards unemployment insurance, I am afraid this has really come on the rocks. The Member asks, "What has been done?" Actually we have not allowed the grass to grow under our feet, and there is in the Labour Ministry today an expert from the International Labour Office. But I must ask Members to consider that in the next few years many thousands of people would be thrown out of job from the military bases and, quite frankly, this kind of unemployment is going to wreck any insurance scheme. My view is that conditions have changed and it may well be that we may have to wait quite some time before the normal situation arises which will enable us to proceed with unemployment insurance. Now, a number of minor points and I am through. The Member for Farrer Park has asked what will happen if the war in Vietnam comes to an end. I, for one, will cheer very hard and, quite frankly, I do not think any great calamity will befall our economy for the reasons which I have explained in my Budget Speech, namely, that of the $300 million worth of exports to Vietnam, 80 per cent of them consist of petroleum and petroleum products.”
“Yes, the Member for Telok Blangah. No one, of course, has given any undertaking that we will introduce legislation for export insurance. There has been thinking and some research on this subject in the Ministry. We have studied what other countries are doing and we probably will continue to study for some time. I am not sure that we can take the scheme as it is being worked out in England or in Germany or in Holland and apply it here. The reason is that I want a fairly safe system whereby the Singapore exporter and the importer, who is somewhere else in a country which I will not name, will not come to some collusion to rook the Government. If that kind of difficulty can be got over, then maybe there is something in this. Now on rent control, the Member for Choa Chu Kang asks. "Have we passed the thinking stage?" So far as I am concerned, the answer is I have not even reached the thinking stage. Nevertheless, I promise to apply my mind to this subject, but I give no assurance whatsoever that any action will be taken on this so that the Member may not be able to quote me at the next Budget session. Hire purchase and finance companies. The Member for Choa Chu Kang wants legislation to regulate hire purchase. I really wonder, Mr Speaker, Sir, whether this deserves any priority. There is a lot of work to be done. II a consumer is thriftless and wants to buy a car or a refrigerator or a motorbike on iniquitous terms, why should we help such people. An hon. Member: That is robbing!”
“Let us give the tourists a jolly good time and hope that they will come in increasing numbers. The Member for River Valley had the wrong notion on this subject. He said that we did not get good tenders for the "Golden Mile" projects because people were not sure where the coastline would be along Beach Road. As my colleague, the Minister for Law and National Development, had explained to this House, the reason why there were no good bids for the "Golden Mile" projects was that they are very large investments. People did not have the time to form consortiums to bid. In other words, there just was not enough money for that. And my colleague is taking action to form or encourage the formation of consortiums. Two Members have drawn attention to a very vital part of our future effort if we are to meet the challenges ahead, and that is the need for thrift and the need to mobilise domestic savings. This was the point made by the Members for Sembawang and Delta. I will underline what they say. I have taken note of the suggestion by the Member for Delta that we should find some means of absorbing the savings of the small man and channel them into useful and productive lines. I think it will be possible to do this. The Member for Choa Chu Kang has made a number of points. He has referred to past statements made by me and my predecessor about considering certain measures. He wants to know what is being done. He has mentioned four items, namely, export insurance, rent control, unemployment insurance, and hire purchase legislation in relation to the control of finance companies. May I deal with these subjects in turn as they are of some importance? Export insurance was brought up by an hon. Member in this House. I cannot recollect who. An hon. Member: The Member for Telok Blangah.”
“In the last ten years there has been a reduction of something like 10,000 workers in agriculture. So I am afraid I find it difficult to be convinced that there is a great future in agriculture so far as the creation of new jobs is concerned. I would agree with the Member for Mountbatten that there are good prospects in deep-sea fishing. In fact, in the last few years there has been quite a considerable expansion in the fishing fleet of Singapore. As regards horticulture, i.e., the planting of fruit trees, I think that occupies a lot of space. I do not know whether it is economic to justify it. The growing of orchids, of course, is a very good industry to expand. Many people have touched on tourism. Unfortunately, there seems to be some misunderstanding on this subject. The Member for Changi, for instance, said that building hotels does not attract tourists. That is absolutely true. The mere fact that you build hotels does not mean that people will go there and occupy them. In fact, in Singapore what has happened is that it is because so many tourists are coming here that hotels are being built. So the idea is not merely to create jobs. People do not put $5 million into a new hotel just to give jobs to unemployed people. They put up that amount of money to make big profits, and profits will be forthcoming only if the tourists turn up. And for various reasons, tourists have been coming to Singapore in increasing numbers. No one really knows why they come here. The Tourist Promotion Board has given no convincing reasons. If I am asked why are tourists coming here, I would say it is for the same reason that some people climb Mount Everest - because it is there. I cannot think of any better reasons. But let us not look a gift horse in the mouth, as the saying goes.”
“They are spent on providing more and better services to the public. So this aversion to paying more taxes, one hopes, will gradually diminish as rationality in human thinking increases. Now, Sir, to the points raised by hon. Members. First, I think I have to clarify the statement which I made in my Budget Speech. The result of great effort in promoting industry in Singapore has been 5,000 additional new jobs. That is what I have said in my Budget Speech. This, of course, depressed many hon. Members. The Members for Bukit Merah, Thomson, Sembawang and Punggol, in particular, said that only 5,000 additional jobs is not good enough. It would not help us. Where are we going? Now, what I should have said is this. Members should bear in mind that these are 5,000 new jobs only in the modern sector of industry, the bigger firms. There are more jobs generated in the smaller sector of industry which has to support the operations of the bigger firms. And, of course, there are jobs generated in the service industries, in buses, in consumer goods and retail shops, in cinemas and so on, where these 5,000 people spend their money. So, in fact, when you get 5,000 new jobs in the larger industries, you might end: up with a total of 15,000 jobs perhaps when all the repercussions of their expenditure are worked out. Because so many Members were depressed with the prospects of creating more jobs in industry, they thought that agriculture might provide the solution. This is the point of view taken by the Members for Changi, Sembawang, Thomson, Bukit Merah and Anson. I find it is rather odd because the whole history of the last ten years has shown that agriculture, far from increasing, had been the diminishing sector of the economy.”
“Sir, from all accounts of what hon. Members in this House have been saying and from what the newspapers have been writing, this has been a popular budget. Under the shower of congratulations which it has been my embarrassment to receive, I would have liked to think that the pleasure over my performance was the result of a logical and penetrating analysis of our problems and the clear-cut recommendations for their solutions, but I suspect that that is not the real reason. The real reason why people are happy is that there has been no increase in taxes. In a long career as Finance Minister, I have come to the conclusion that (a) people do not like to pay taxes, and (b) they dislike paying increased taxes even more. Sir, while this attitude is understandable and, in fact, one can sympathise with it on occasions in a non-professional capacity, I must confess that this kind of thinking is illogical. I do not pretend that I can convince all hon. Members or convert them to my point of view. But I will do my best. People do not mind spending more money on motor-cycles, scooters or cars or presents for their girl friends, this, that or the other. They do not mind this because they get something in return. And yet they object to paying more taxes. When they pay more taxes, they are merely spending more. It is a collective expenditure on services that are provided by the Government - more education, more health services, more defence measures, more post offices, this, that and the other. While it may be true that the best things in life are free, in the practical affairs of men they have to be paid for. And when people pay more taxes, it does not mean that the taxes go into my pocket or the pockets of my colleagues.”
“, to establish a new council which will be concerned with educating workers on the need to improve productivity and the methods of so doing; and the need to educate employers on how greater productivity should lead to greater pay; and also the possibility that this new council can formulate some system whereby they can investigate complaints, presumably either from workers or employers. The Member, of course, has long experience in trade unions and I think what he says on the subject should be taken seriously, as also his proposal that we should set up trade missions in our export markets, a subject which I have dealt with in my Budget speech at some length. I think the hon. Member can rest assured that the coming year will see important developments in this field. For the rest, I only want to say that I am very glad that he has made the remarks that he did. And if this kind of spirit permeates through the whole of the labour movement in Singapore, I have every confidence that we can surmount the difficulties ahead and I do not fear that we will not be able to succeed in competing in our export markets with all corners. Question put, and agreed to. Resolved, That Parliament do now adjourn. Adjourned accordingly at Fifteen minutes past Four o'clock p.m. to Thursday, 14th December, 1967.”
“Sir, I am afraid the Member for Anson has got it all wrong. People do not import raw materials at high cost. They try to import raw materials at the cheapest cost, otherwise they will go bankrupt because they cannot sell the finished products anywhere. So, far from Government introducing any form of control on imports of raw materials, I think Government is well advised to let the businessmen do their own buying. I am not quite sure whether the interpreter did a correct job of interpreting what the hon. Member has said. I must confess I cannot make much sense out of it. The Member for Sembawang says that it is wrong to pay workers $2 and $2.50 a day because they cannot maintain a family at that wage. He must remember that these rates are really rates paid not to workers as their normal wages, but are rates of pay given mostly to girl workers during their initial period of training. Of course, these girls are unmarried, and this really means paying them money while they acquire skills which will enable them to earn more when they have completed their training. I now turn to the speech by the Member for Bras Basah. I think this is a very well thought-out piece. Obviously the Member has spent a lot of time and a lot of thought on it. He has made many valuable suggestions which deserve to he seriously considered not only by Government but also by unions and employers. I would not like to comment in detail on the various useful suggestions he has made, except perhaps to say that his speech, I think, deserves to be produced and printed in a special booklet for circulation to interested parties. I will give him a firm promise that I will look into the two suggestions he has made, i.e.”
“Mr Speaker, Sir, I beg to move, That Parliament do now adjourn. Question proposed. EFFECT OF DEVALUATION OF STERLING ON THE STABILITY OF LABOUR AND CAPITAL IN PIONEER INDUSTRIES 3.48 p.m.”
“Mr Speaker, Sir, I beg to move that Parliament doth agree with the Committee on the said resolutions. Question put, and agreed to. Resolutions accordingly agreed to. ADJOURNMENT TO A LATER DAY MOTION Resolved, "That at its rising this day Parliament do stand adjourned to 14th December, 1967." -[Dr Goh Keng Swee]. ADJOURNMENT MOTION”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. Resolutions reported - "That the sum of $5,882,710 shall be supplied to the Government under the heads of expenditure for the public services shown in the First Supplementary Estimates of Expenditure for 1967 contained in Paper Cmd. 25 of 1967." "That the sum of $11,424,652 shall be supplied to the Government under the heads of expenditure for the public services shown in the First Supplementary Development Estimates of Expenditure for 1967 contained in Paper Cmd. 24 of 1967."”
“Sir, I am speaking as the Member for Kreta Ayer and not as the Finance Minister. May I remind the hon. Member that for the last five years, not one cent has been spent in Kreta Ayer for this kind of thing and the worst pot-holed roads are, in my constituency.”
“In the case of the Culture Division of the Ministry of Culture, this has been the practice all along since the establishment of television, when they had to recruit many grades of staff which were never found in the public service before, such as T.V, cameramen, newsreel editors, writers, directors -that kind of personnel. And for many years, it has been the experience of the Ministry of Culture to be unable to fill these posts to a very considerable extent. So it is based on past experience that the sum of $2 million had been entered as "probable under-expenditure". Fortunately for us, the Ministry has been able to recruit more successfully this year than in previous years. Hence, the estimate of "probable under-expenditure" proved to be wrong. We, therefore, have to give out the money that they need. I hope this explanation makes the matter clear.”
“Sir, this is really a technical Treasury point, and so I am answering it on behalf of the Minister for Culture because it deals with methods of estimation and why the Head has been under-estimated and who is to blame, and that sort of thing. Of course, Members must understand that these estimates were passed by hon. Members last year. They cannot, therefore, entirely escape responsibility for it. I do not think the Member for Choa Chu Kang got it right when he said that this amount of money is like bargaining between the Ministry and the Treasury. This is about deductions on account of probable under-expenditure. And, of course, if hon. Members have studied the Estimates for next year which are now before them, they will find that this item is entered in respect of all estimates of expenditure. There are various reasons for this. First, in the case of personal emoluments, where it is the custom to enter the full amount for the year January to December, quite often where this relates to new posts - when you have to fill new posts there are various procedures to follow to ensure that there is no fiddling and that the most qualified persons are appointed to the public service - this, of course, means that you have to advertise in the newspapers. Before you advertise in the newspapers, the qualifications and the terms of the office must be agreed between the Public Service Commission, the Treasury and: the Ministry concerned. This takes time, and as often as not, when you have the time, you find that in many cases you cannot get the people with the requisite experience and qualifications.”
“Sir, the Member is quite right in saying that there will be further Supplementary Estimates next year. There are Supplementary Estimates every year, and for this year we are lucky to have only one set of Supplementary Estimates. As regards the under-estimation, I have said that 80 per cent of the retirements were compulsory retirements. The other 20 per cent were optional retirements and this is the element that is very difficult to estimate from year to year. Of course, it is also not always possible to allow for more higher paid civil servants retiring in one year as against another year. I assure the hon. Member that we are doing our best to have the most exact estimate possible, but in spite of this, mistakes do occur and underestimates do take place, as a result of which this House will certainly have to consider Supplementary Estimates next year.”
“Sir, the details requested by the Member for Punggol are as follows: There were 394 retirements as against 211 the previous year. Eighty per cent of the retirements were due to officers reaching the compulsory age of retirement. The balance were retirements on optional or medical grounds and two officers were retired in the public interest. As regards compulsory retirements referred to by the Member for Choa Chu Kang, retirement is compulsory on reaching the age limit - 55 years in most cases; 60 years for those who entered the service more recently. Of course, it does not mean that once an officer retires, he will be lost to the service. In some cases of officers of exceptional merit, we do re-employ them on contract terms, but this again is a very exceptional procedure. The Member for Bras Basah suspects that the large number of people retiring may be due to poor pay. I can assure him that the civil service pays very good salaries. Our difficulty is that whenever there is an advertisement for vacancies, the number of applicants is usually 100 times the number of vacant posts. So I do not think the hon. Member can claim that we are paying poor salaries.”
“He suggests that this might tempt the older industries to create subsidiaries or to disguise themselves as separate legal entities in order to obtain the benefits of tax exemption. I do not think this is possible because what determines whether a particular product will enjoy tax exemption is not whether the firm producing it is new or old. It is whether in the past such goods have been exported in continuing amounts to a certain established market, and if that is the case, then neither the old firm nor, if it is disguised as a new firm, it will get this benefit. The only people who will get this benefit are the old firms who have improved on their previous performances, and if it is a new firm, then they will have to improve on the old firm's performances. As regards the provision of bona fides in Part V of this Bill, I would have thought that this is a very simple matter. This is to ensure that no fictitious loans or transactions are created to enjoy exemption from tax and bona fides really means that the transactions or the loans on which tax exemption is being asked for represent genuine business transactions, subject, of course, to the minimum limits laid down in the law. I do not expect that there would be much trouble about this. But if this is a matter which still disturbs the Member, I would be very glad if he could let me know exactly what is causing him anxiety. There may be a real point which is causing anxiety among businessmen, in which case I would be very glad to give any further clarification on this, but it should be on rather concrete proposals. I think these remarks would cover most of the points he has raised.”
“But, unfortunately, continuity of employment sometimes depends on factors outside the control of the enterprise in Singapore. I think the Member for Telok Blangah is confusing the early days of the textile business when it is true that Singapore firms were using quotas or unused quotas of their Hongkong main companies. But this was very soon settled when countries like Britain and America gave separate quotas for Singapore manufacturers. As soon as this arrangement came into effect, the production in Singapore plants was related to the quota allowed for the plants, and not related to the quota given to the Hongkong principals. I now come to the comments of the Member for Havelock. I think he has made a study of this Bill. He says that it does not introduce any fundamental change in the tax system of the Government. Of course, this is true - this Bill is not intended to introduce any basic changes. It only makes certain concessions in order to promote industrial growth. Whether the present time is appropriate for commission of the tax system is a matter on which I think people can have different opinions. It has been urged upon me that our tax system needs an overhaul. If so, this is a subject which must be considered on its own merits and not in relation to whether a better tax system would promote economic expansion. I would have thought that one of the main objectives of having a better tax structure would be the more efficient collection of revenue. On the subject of export incentives, the Member for Havelock makes the point, which has already been put to me by other people, that this Bill would unduly favour the new industrialists as compared to established firms with a long record of export performance.”
“Nevertheless, he has given us to understand that these are the people. The point is this: is he suggesting that if Hongkong or other industrialists want to establish a subsidiary in Singapore which can provide useful employment for our unemployed, we should turn down their applications? Is that his proposition? I doubt if he means that. I think his main objection is the manner in which some of these enterprises are carried on, namely, that work is irregular, that workers are laid off from time to time. May I suggest to him that this does not really depend on whether the local plant is a subsidiary of a foreign firm, or whether it is run by a local board of directors, irregular demand is the result of irregular market conditions, and whether you have one form of enterprise as against the other, so long as market conditions are erratic, it is unavoidable that you get irregular periods of employment. This is true not only in the textile industry but also generally in other industries subject to very wide fluctuations in the export market. I would have thought that one of the great merits of Hongkong industrialists is that they not only bring their capital and their know-how to Singapore, but they also bring their export market. It is all very well to say that the Singapore management can develop export markets which are more steady and more reliable. There are very few Singapore manufacturers with much experience in overseas export markets. And the great contribution that Hongkong industrialists have made to Singapore is that this problem of marketing is virtually solved by them. Of course, I would agree that it would be a good thing if there could be a greater continuity of employment. No one would dispute that.”
“At the same time, I am conscious that further consideration may bring about improvements and I am open to suggestions and proposals from manufacturers and other interested parties, which, if they are of sufficient merit, can be incorporated in a future amending Act. Sir, I beg to move. Question proposed. 5.28 p.m.”
“Part VI of the Bill provides that approved royalties, technical assistance fees and contributions to research and development costs payable to non-residents shall be taxed at 20 per cent instead of the regular non-resident tax of 40 per cent. Such royalties, fees or contributions, if used to acquire ordinary share capital in the company from which such payments are received, shall be exempt from tax. In special cases, the Minister may also exempt such royalties, fees or contributions from tax even if they are not used to acquire share capital in the company. Tax concessions on royalties, fees and contributions are given subject to the condition that they do not result in an increase in liability to tax in the non-resident's country. Part VIII of the Bill relates to consequential matters such as repeal of earlier legislation, transitional provisions, penalties and so on. The Minister is empowered to make regulations for carrying out the provisions of the Bill. I venture to suggest that this Bill, which consolidates and expands our industrial incentives, heralds a new and bright phase in our industrial progress, one which holds out hopes that our efforts to overcome the serious, unemployment problem of our time will eventually succeed. May I close with a word of assurance to our manufacturers? I would have liked to send this Bill to Select Committee if this course of action were at all feasible. But it is necessary that export incentives promised a year' ago become law now and this rules out consideration by Select Committee.”
“But as the incentive will encourage many more manufacturing industries to be established in Singapore, there will soon be an increase in employment and income and eventually an increase in tax revenue from all sources. Also, as exports increase, the loss of tax revenue from export profits will decrease. To aim at maximum market diversification and to reduce partly the loss of existing revenue, the Bill provides that in the case of established markets for certain products, the tax relief will apply only to the increase of exports of these products to such markets. In order not to offset too greatly the export incentive, and to reduce the work of tax administration, the condition of established markets will be applied only to cases where a given product has been exported continuously for a minimum period of five years. With tax relief on export profits, a company qualifying for such relief shall no more be entitled to the double reduction of overseas marketing expenditure for tax purposes. Part V aims at reducing the cost of manufacturing companies which borrow from abroad for the purchase of machinery and equipment. Provided that the amount of the loan is not less than $200,000, the interest on such approved foreign loans shall be exempt from tax, subject to the condition that such exemption does not result in an increase in liability to tax by the foreign lender in his country of residence. Since tax liability has hitherto been borne almost entirely by the local borrower, this concession will reduce the borrowing costs and facilitate foreign loan investment in Singapore. Manufacturing industries depend not only on capital but also on techniques.”
“The domestic market in Singapore is too small for many manufacturing industries to achieve the optimum scale of production, and therefore production for export is necessary. In most developing countries and in many of the developed countries, the domestic market is protected by high tariff barriers so that domestic consumers may absorb completely overhead costs while exports are priced at variable cost only. With a small or in some cases non-existent domestic market, this is not possible in Singapore. It follows that industrialisation depends very largely on the incentives given to the export of manufactured goods. The Bill provides that profits of approved manufacturing companies from the export of their manufactured goods will be subject to a rate of company tax of four per cent instead of the regular tax of 40 per cent. The same tax relief is given to companies engaged in deep-sea fishing. It is understood that separate cost accounting for exports and local sales is not practicable for many manufacturing concerns. Moreover, it is difficult for the Inland Revenue Department to assess the exact export profits. The Bill, therefore, adopts a simplified formula which assumes that the rate of profit from export sales and domestic sales is the same. To the extent that actual profit is usually smaller than profits from domestic sales, the simplified formula gives some additional advantage to exporters, but it also saves a lot of administrative work in the Inland Revenue Department. Since the present exports of manufactured goods other than those produced by pioneer industries are subject to the full 40 per cent tax, the tax incentive given to exports will somewhat lower the total revenue from company tax for the first few years after the adoption of the Act.”
“Besides export incentives, the Bill seeks to offer tax concessions on payments for foreign royalties, technical assistance and research and development, as well as on interest liabilities arising from foreign loans utilised for the purchase of productive equipment. The Bill also provides for a tax holiday in respect of profits from sales of approved manufactured products resulting from an expansion of approved enterprises. Finally, the Bill provides for the repeal and re-enactment with minor amendments of the well-known Pioneer Industries Ordinance. I set out below details of each significant part of the Bill. Part II is essentially the same as the Pioneer industries Ordinance of 1959. Its incorporation into the present Bill is to place all incentives together in one piece of legislation so as to assist investors. Part III gives incentives to manufacturing enterprises which expand their productive capacity. Any manufacturing company which incurs new capital expenditure for the purpose of manufacture or increased manufacture of an approved product may be entitled to such benefit provided such expenditure exceeds $1 million, or exceeds $100,000 as well as results in an increase of not less than 30 per cent of the value of existing productive capacity. The tax concession which is computed on the basis of a formula set out in clause 19 is available for a period of three or five years, depending on the amount of capital expenditure. The purpose of this provision is to encourage enterprises to expand their capacity in order to improve their economies of scale. This is an important supplement to the tax relief for pioneer industries. Part IV provides tax relief for the export of domestically manufactured products and deep-sea fish.”
“Sir, I beg to move, "That the Bill be now read a Second time." The active promotion of manufacturing industries has been a cardinal feature of this Government's economic policy since 1959. At that time the Pioneer Industries Act had just been brought into effect. It had served its purpose over the years in introducing a wide variety of manufacturing activities into the island. Today the number of pioneer certificates issued stands at 243 and the number of pioneer firms at 224. 155 of these firms have commenced production. Since our separation from Malaysia, which has put a seal on the still-born Malaysian common market, it has become abundantly clear that only through a rapid increase in domestic exports of traditional products in traditional markets as well as of new products in new markets that Singapore can attain salvation. The first tentative steps were made by the Government in late 1965 through a special tax deduction for export promotion activities. Then in his Budget speech last year, my predecessor outlined a range of fiscal concessions on profits derived from the export of domestic products. It has taken us a full year, however, to grapple with the legal and administrative complexities of these proposals. I am, nevertheless, satisfied that the time has been well spent. The Bill before the House seeks, inter alia, to provide the maximum incentives to exporters without, at the same time, allowing them too much fat. In respect of old companies with established export markets, it is only those who improve on their export record who will benefit. Exporters who prefer to rest on their oars will get nothing, as befits members of a thrusting and dynamic society.”
“4 million ====== The development expenditure authorised in the Development Estimates comes to $296 million as against $249 million authorised last year. $178 million of this year's development expenditure will be incurred in the Government sector and the balance. $118 million, will be by way of loans to statutory authorities. Of the $178 million provided for as Government Development Expenditure, the classification by sectors is as follows: (i) Economic Development $80 million (ii) Social Development $39 million (iii) Defence and Public Administration $59 million By contrast with recurrent expenditure, most of which is spent on the social services, the emphasis in development expenditure lies in economic development. The preponderance of expenditure on economic development will be even larger if we take into account that nearly all the expenditure of statutory authorities is to improve our economic strength; this is as it should be. Mr Speaker, Sir, I will content myself with this brief version of the aggregates contained in both the Ordinary and the Development Estimates before Parliament. Sir, I beg to move.”
“The average human mind unfortunately does not have a high degree of perceptivity in respect of numbers, and I am afraid that it is the misfortune of Finance Ministers in their Budget presentation to labour under the misapprehension that their audiences are eagerly and intelligently digesting the outpouring of numerical data. I have come to the conclusion that this is a waste of time both on my part and on the part of hon. Members. [Mr Speaker in the Chair] 4.33 p.m. Next year, I intend to present, as an attachment to the Ordinary and Development Estimates, a written statement setting out the Finance Ministry's account of the sums entered under various heads of revenue and expenditure. This year, I suggest that these matters of detail are best dealt with in Committee stage and I, therefore, propose to do no more than to allow the figures to speak for themselves. The main aggregates to take note of are that expenditure has been estimated at $646.4 million, and revenue at $646.7 million. Both represent an increase of $56.2 million over last year's estimates. Since there is no increase in taxation, the additional revenue accruing to the Republic will be the result of economic growth. The percentage growth in this instance is estimated at 8.7 per cent. The expenditure of $646.4 million is distributed as follows: (i) Social Services, i.e., Education, Health and such like items $281.3 million ( by far the largest figure ) (ii) Economic Services $ 82.2 million (iii) Statutory expenditure, i.e., Pensions, Funding of public debts, etc. $ 90.6 million (iv) Police and Defence $100.8 million (v) Others $ 61.5 million (vi) Transfer to Development Fund $ 30.0 million ------ Total $646.”
“We came to the conclusion in the Ministry of Defence that we could not depend on the continued presence of British Forces in this area beyond 1975. 4.30 p.m. [Mr Yeoh Ghim Seng in the Chair] In the event, this planning assumption turned out to be virtually identical with the intentions subsequently announced by the British Government. So provided there are no further changes of mind on the part of Her Majesty's Government, the build-up of our Defence Forces on land will continue as planned. The additional money provided for in the Estimates is to pay for the implementation of this Plan, now in its third year. As I had informed the House in m previous capacity as Defence Minister, the Plan provided for the establishment of a total of seven Infantry Battalions which, with supporting arms and services, would provide the elements of two infantry Brigades. In our estimate, this Force should be sufficient for our protection in normal times. I make this point lest the modest increases in our Defence spending occasion unnecessary speculation as to our intentions. It has been the practice not only in this Parliament but also in those of other countries for Finance Ministers to discuss in detail the totals of expenditures under the various heads and subheads of the Budget and to discuss the expected yields of various items of revenue. In the past, I too have taken to this practice. This year, however, I intend to introduce an innovation by not entering into a statement of this kind. The reason is that I have long suspected that nobody pays the slightest attention either in this House or when they read the proceedings in tomorrow's newspapers or in Hansard nobody pays the slightest attention to the interminable series of figures involved in an exposition of this kind.”
“With these comments I turn to the Estimates that now lie before the House. The main point is that the considerations which I have discussed at such length and in such detail have placed certain constraints on the policy that has to be followed in the allocation and raising of funds for next year. Because the detailed items of the accelerated growth policy which I have outlined have yet to be worked out into an operational programme, it has not been possible to quantify actual requirements by way of funds and resources. For this reason, I have adopted what virtually amounts to a normal continuation budget with no major innovations or changes both in the Ordinary Estimates and the Development Estimates. In the first place, I have not provided in this Budget for an increase in taxes next year. So the Estimates of Expenditure have to be framed within the expected yield of existing taxes. Secondly, a large proportion of the additional revenue resulting from normal economic growth will have to be allocated for Defence expenditure. This is not the result of any increase in our Defence programme, but merely the normal implementation of `the Defence Plan worked out in previous years. This point is of some importance, and perhaps I may be allowed to elaborate on it. The planned withdrawal of the British military presence by the mid-70's has happily no effect on our Defence expenditure for next year. The reason is that in framing the original Defence Plan of the Republic, some two years ago, one of the crucial elements which had to be taken into account was the probable duration of the British military presence in Singapore and in the region.”