Hon Sui Sen
Singapore
“Sir, I must inform the Member for Rochore that the companies are run on the basis of private sector companies, i.e. their budgets are drawn up by their boards of directors. I do not know to what extent their budgets follow Government budgets but they are certainly not regulated in the sense that Government budgets are rigidly enforced.”
“Perhaps the Member is referring to PIE's operations with respect to the Armed Forces. PIE provides some of the supplies for feeding our army and other armed forces. If the private sector is equally viable, equally able to supply foodstuffs, I see no reason why they should not also compete with the PIE.”
“Jeyaretnam asked the Minister for the Environment and Minister for Communications if he will request the Port of Singapore Authority to consider providing transport alternatively paying a transport allowance to all employees of the PSA who have been moved out of the PSA Staff quarters in Blair Plain and as a result of which have been put…”
“INTRACO is a company in which the Government has some equity. I believe the proportion is somewhere around 20%. So in a sense it is not exactly a Government controlled company, although 20%, of course, is a fairly considerable share. In the case of PIE, the answer is yes, it is a Government company.”
“The dividend yields for the three holding companies were nil, The yields for the operating companies were nil for 34 companies (including eight which have yet to commence operations), 1% to 10% for five companies, more than 10% but less than 20% for 10 companies, and at least 20% for nine companies.”
“Sir, the simple answer to that is no, for the purpose of this Bill. This Bill merely enacts legislation to implement the 1982 Budget concessions.”
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“This request was unacceptable to the Stock Exchange as their sole purpose in asking the questions was to keep the general public, including the shareholders of the company, fully informed. Mr Gammell also asked for a waiver of the requirement imposed by the Stock Exchange that the information to be furnished to shareholders by Chartered Merchant Bankers Ltd, who had been appointed to advise outside shareholders, should include an Accountant's report on the business of the company and all its subsidiaries. This request too was turned down by the Stock Exchange. While the Securities Industry Council was examining the terms of the proposed deal between Haw Par and PERNAS and the Stock Exchange was scrutinising the accounts of Haw Par, my Ministry received information which strongly suggested that there might have been misapplication of company funds in the past. The information was about transactions which took place well before, and did not appear to be related to, the proposed deal between the company and PERNAS. Preliminary investigations tended to confirm the suspicion that there may have been serious wrongdoing on the part of some of the company's officers. There was evidence of the existence of a company in Hong Kong known as Spydar Securities (Hong Kong) Ltd, which was formed in 1972 for the purpose of share dealing for the personal benefit of directors. The parent company, i.e. Haw Par, would sell quoted securities of its subsidiaries to this Hong Kong company at cost which was well below prevailing market prices. The Hong Kong company would in turn sell these securities in the market and distribute the profit to directors participating in the scheme.”
“However, the Panel considers that for such a partnership to be successful, it should arise as a result of an association entered into willingly by all shareholders in accordance with normal commercial practice.' On 19th June the Securities Industry Council ruled that PERNAS, having failed to advance any reasons to justify a waiver, had an obligation to make a general offer to the shareholders of Haw Par at $2.42 per share, and that the proposed issue of 70.413 million Haw Par shares to PERNAS should also be at that price. The London City Panel had already ruled that Haw Par and PERNAS had acted in concert in acquiring a 51% interest in London Tin and that they should make or procure a bid for the remaining shares of London Tin at 197 3/16 pence per share. There has been no significant development since these two rulings were published. The Stock Exchange was unable to verify the claim made by the company that 57% of the group's assets was situated in Malaysia. Nor could Mr Watson, Mr Tamblyn or Mr Gammell explain the diminution in the value of shareholders' assets to the extent of over $112 million - from $234.4 million, as stated in the offer document for the takeover of Motor & General Underwriters Investment Holdings Ltd in January 1974, to $121.6 million, as stated in the company's Press statement of 28th May 1975 - all in the course of less than 18 months. Queries from the Stock Exchange produced replies from the company which merely led to further queries. Finally, at a meeting with the Committee of the Stock Exchange, Mr Gammell, the Chairman of the company, requested the Stock Exchange to query the company on a confidential basis.”
“The Securities Industry Council ruled on 3rd June that the Takeover Code applied to the proposed transaction. On 4th June, the Council informed PERNAS of its ruling and enquired of PERNAS what steps it proposed to take to comply with the provisions of the Code, in particular Rule 27. This Rule laid down that partial offers, though generally undesirable, may be contemplated on the grounds of special circumstances but even then only with the prior approval of the Council. In the light of Tengku Razaleigh's statement at his meeting with me that he realised that PERNAS would have to have the approval of the Council before it can proceed with its deal with Haw Par, the Council had expected to hear representations from PERNAS as to why approval should be given under Rule 27 of the Code. However, in its reply to the Council dated 10th June, PERNAS argued that none of the provisions of the Code applied to the proposed transaction except the general rule to give the fullest possible information to shareholders. PERNAS must or should have been aware that the Companies Act provides that the rulings of the Council are final. The letter from PERNAS went on to say that PERNAS wished to see maintained on a lasting basis the present liberal policy of enabling investors in our respective countries to participate in the economic development of both countries. The partnership with Haw Par investors would be an important milestone in that direction". Four days earlier, on 6th June, the London City Panel had this to say on the concept of partnership: `The concept that there should be a partnership between British industrial and commercial interests and those of Malaysia is to be welcomed.”
“Nevertheless, it was not until the 11th of June that the Council even received a copy of the Agreement executed by Haw Par and PERNAS. On 29th May the Stock Exchange suspended the quotation of the shares of Haw Par and invited the company to justify the proposed issue to PERNAS of 70.413 million shares with a market value of $169 million in exchange for Tradewinds whose assets had a market value of only $114.4 million. This was the first of a series of queries by the Stock Exchange. The directors of the company were not able to give satisfactory answers to any of these queries. I am tabling as an Annex (See cols. 1161-3) to this Statement a summary of these queries and the answers received. On 3rd June I saw the Chairman of PERNAS Securities Sdn Bhd, Tengku Razaleigh Hamzah, in Singapore at his request. I assured him at this meeting that the Singapore Government had no objection in principle to PERNAS or any foreign company acquiring an interest in a Singapore company. I also told him of my concern that the proposed deal with PERNAS would result in the small shareholders' interest in Haw Par being diluted from 74% to 44%. It was important therefore that the Securities Industry Council, which was responsible for safeguarding the interests of small shareholders, should have the opportunity of examining the proposed deal in the light of the provisions of the Takeover Code. Tengku Razaleigh for his part acknowledged that the proposed deal was subject to the approval of the Securities Industry Council and indeed of the London City Panel, in addition to the approval of the regulatory authorities of Malaysia. After our interview, my Ministry issued a Press statement, the text of which was agreed to by Tengku Razaleigh.”
“It was a brief interview and I did not have time to elicit any details regarding the transaction. After the interview, I made enquiries in my Ministry and was told that it had no previous knowledge of the proposed transaction. But my Ministry was aware of a local newspaper report which appeared on 3rd May over three weeks earlier to the effect that turnover in the shares of Haw Par on the Stock Exchange was exceptionally high and that there was speculation as to whether any major development affecting the company was afoot. The Press statement announced that agreement had been reached between Haw Par and PERNAS Securities Sdn Bhd whereby Haw Par would issue 70,413 million shares to PERNAS in exchange for the entire issued share capital of Tradewinds (M) Sdn Bhd, a wholly-owned subsidiary of PERNAS. The principal assets of Tradewinds were: 20% of the issued capital of London Tin Corp Ltd 19% of the issued capital of Island & Peninsular Development Bhd 10% of the issued capital of Sime Darby Holdings Ltd and other quoted securities valued at M$l2 million. PERNAS would thus acquire a 40% interest in the enlarged Haw Par, while London Tin and Island & Peninsular would become subsidiaries of Haw Par. The Securities Industry Council was informed of this transaction by Haw Par on 28th May, the day on which the company's Press statement was issued. There was no prior consultation whatsoever. The then Managing Director, Mr Ogilvy Watson, appeared before the Council on 30th May, at the invitation of the Council, and argued that the Singapore Code on Takeovers and Mergers did not apply to the transaction. This was an argument Mr Watson was to abandon on the 4th of June.”
“These and other measures which I have taken are by now well known to companies whose shares are listed on the Stock Exchange of Singapore. Companies have also become familiar with the new procedural requirements imposed by the Code and the rules of the Exchange. The Securities Industry Council, in which members from the private sector outnumber those from the Government, has so far discharged its responsibilities in a conscientious and efficient manner. Together with the Committee of the Stock Exchange, the Council has exercised close supervision of the securities industry and ensured maximum protection for the small shareholder. In the past few weeks the Securities Industry Council and the Committee of the Stock Exchange have had to deal with an important transaction involving a leading quoted Singapore-registered company, namely, Haw Par Brothers International Ltd. In view of the large number of shareholders involved and the very considerable publicity which has been given to the transaction in Singapore and abroad, I deem it my duty to make a full report to this House on the Council's decision on this transaction and also on my decision to appoint two Inspectors to investigate the affairs of the company. On 27th May this year, the then Managing Director of Haw Par, Mr Ogilvy Watson, asked my secretary for what he said would be a brief ten-minute appointment with me. He would be leaving for Kuala Lumpur the next day, he said, and he would like to see me about an important and rather urgent matter before he left. At the interview he handed me an advance copy of a Press statement which he said his company would be issuing the next day. The statement was about a proposed exchange of shares between Haw Par and PERNAS Securities Sdn Bhd of Malaysia.”
“Mr Speaker, Sir, honourable Members will be aware of the efforts of my Ministry to encourage the further development of Singapore as a major regional and international financial centre. The success we have achieved has been due in large measure to our policy of welcoming the free inflow of all capital, whether regional or international, and whether for use directly in trade, industry or construction or merely for portfolio investments. Few if any restrictions are imposed on such investments which, when so desired, may be and often are in wholly-owned locally incorporated companies as well as in branches of foreign or multi-national companies. The presence of many old and new trading houses, manufacturing industries, banks, insurance companies, merchant banks, discount houses as well as holding companies and conglomerates is sufficient evidence of the effective operation of our policy. However, to ensure orderly conditions and fair terms of competition - and where many investors are concerned, fair treatment of minority interests - it has been necessary, here as elsewhere, to provide by law for the regulation of company operations. Over the last five years I have paid special attention to the question of im- proving the system of regulation of the securities industry and of enforcing high standards of conduct on the part of companies operating in Singapore. Honourable Members will be aware of the many legislative measures introduced during this period in the form of amendments to the Companies Act and the Securities Industry Act. A Code on Takeovers and Mergers was enacted and the Securities Industry Council was entrusted with the responsibility for administering it. The rules and bye-laws of the Stock Exchange of Singapore were made subject to my approval.”
“The House immediately resolved itself into a Committee on the Bill.-[Mr Hon Sui Sen]. Bill considered in Committee; reported without amendment; read a Third time and passed. ADJOURNMENT Resolved, "That Parliament do now adjourn to a date to be fixed."-[Mr E. W. Barker]. Adjourned accordingly at Five Minutes to Six o'clock p.m. to a date to be fixed.”
“On safety and health grounds, it is required that certain goods be of stipulated minimum standards. This is not a new requirement as we already have minimum standards set for certain goods, for example, crash helmets, industrial helmets, hair-sprays and the like. It is only after careful examination of the need for minimum standards for consumers' safety that they will be required. The Bill includes provisions for the Minister to make regulations for the purposes I have mentioned, i.e., to require informative marking and to impose safety requirements and also to allow exemptions of goods from the operations of such regulations. It is the intention that in such regulations, exemptions will be given for goods for export or re-export in any particular case, or in respect of the particular categories of goods. Members are therefore assured that it is not the intention of the Government to restrict regional or international trade. In the enforcement of the law, the ability to take prompt action will gain favourable consumer reaction and will also act as a deterrent to the commission of offences. The Controller of Consumer Protection is therefore vested with the authority to compound offences for a sum not exceeding $2,000. Such an enabling provision will make administration of the Act less costly as well as help to impress on the traders the need to adhere to the law. Members may also like to know that under the Act, the Court convicting a person for an offence may, at the same time, award damages to the injured party up to $1,000 without prejudice to the right of the party to take civil action to claim damages beyond this amount. 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.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." It is already an offence to apply a false trade description to goods under the Merchandise Marks Act. However, this Act, which was first enacted in 1917, has many shortcomings and is out-of-date for our present day needs. It is considered therefore that the Merchandise Marks Act should be replaced by new and more comprehensive legislation. The provisions of the Consumer Protection Bill have been drafted in consultation with the Consumers' Association of Singapore (CASE) and are on lines similar to the Trade Description Acts of Malaysia and the United Kingdom. The more extensive provisions in the Bill prohibiting false and misleading description of goods will not only protect the interests of consumers, but also those of honest traders. The coverage of the Bill is not limited to descriptions appearing on products, but extends also to false information given in the course of enquiries or advertisements or oral statements. The Bill also provides for the disclosure of additional particulars of goods where such information is lacking and of importance to consumers. It is not intended, however, that the disclosure provisions will require the publication of trade secrets or formulae. Indeed, the Bill makes it an offence for any person to disclose to any other person such information if he has obtained them in pursuance of the Act. Further, the Bill provides that advertisements are to be regulated so as to prevent misleading statements in relation to the goods being advertised. The consumer is entitled to expect that the goods purchased fit the description given in the advertisements. The Bill also relates to the safe composition, design and construction of goods for the protection of consumers.”
“Bill considered in Committee; reported without amendment; read a Third time and passed. CONSUMER PROTECTION (TRADE DESCRIPTIONS AND SAFETY REQUIREMENTS) BILL Order for Second Reading read. 5.47 p.m.”
“The textiles and garments, electrical and electronic, and woodworking industries have played and will continue to play a significant role in Singapore's industrialisation. Value added by these three groups of industries rose from 21% in 1970 to 31% in 1974 of total value added by the manufacturing sector. They have been able to do this because, these industries have been continually improving their design and quality through heavier investment in machinery and technical training. Value added per worker in the textile and garment industries more than trebled from $1,960 in 1965 to $6,900 last year. Similarly, value added per worker in the woodworking industry, which progressed from simple sawmilling to wood-moulding, almost doubled from $4,170 in 1965 to $7,100 last year. Value added per worker in the electronics industry rose from $7,000 in 1965 to $18,000 last year as the industry advanced from component assembling to instrumentation and testing. I have quoted these value added figures at some length because of a tendency to dismiss the so-called cheap textile and electronics industries. These industries far from declining should, in fact, grow even stronger. In future, all manufacturing industries spurred on by the higher price of oil would have to compete on the basis of organisation and equipment rather than simple unskilled labour. A relatively earlier start and nearness to energy sources would enable Singapore to compete on equal, if not better, terms with countries further away from Southeast Asia. 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.-[Mr Hon Sui Sen].”
“Industries in Japan, Europe and North America, which find that they can no longer compete if they continue manufacturing in their own countries, will seek to locate their operations overseas in countries where the factors of production are more in their favour. Singapore, located in the midst of a rapidly growing region of great mineral and agricultural potential, is one of perhaps no more than a dozen countries in the world in which multi-national and even smaller-sized companies will consider it in their interest to position themselves to face the future, changed irreversibly by the oil producers of OPEC. The oil producers' successful change of the terms of trade so much in their favour and so swiftly marks an economic watershed. It presents Singapore with immediate as well as long-term opportunities. The more urgent search for oil has greatly benefited Singapore's marine and offshore-oil-rigs construction and logistics industries. In recent months, the Economic Development Board's investment centre in Houston, which is noted for the number of US oil industry companies located there, has been most active. In the long-term, the higher price of oil will raise the cost of sea or air transportation substantially. Energy and mineral intensive industries would have to be located nearer the sources of raw materials or nearer the markets for their products. Singapore, with its well-developed human and physical infrastructure in the midst of a resource rich and populous region, is well placed to compete for such industries. The relatively higher price of energy should help also to improve the competitive position of our established industries.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." This Bill seeks to amend the Economic Development Board Act so as to provide for:- (a) the appointment of two Deputy Chairmen instead of one Deputy Chairman at present; (b) the appointment of a member of the Board to act on behalf of the Chairman outside Singapore in relation to any matters or class of matters; (c) the appointment of not less than four and not more than ten members of the Board (apart from the Chairman and the Director) instead of six as at present; and (d) the manner in which the fixing of the common seal of the Board is to be authenticated. The Bill also makes clear that the Annual Report of the Board will be based on its operations of the preceding financial year. These organisational changes are necessary to enable the Economic Development Board to step up its industrial promotion efforts at home and abroad. Since its establishment in 1961, the Economic Development Board has been able to attract considerable foreign investments into industry in Singapore. Foreign investments and fixed assets in the manufacturing sector rose from $10 million in 1964 to $2,930 million by the end of 1974, an average annual increase of 40%. High oil prices, inflation and massive unemployment, even in industrialised countries, have slowed down our ability to attract foreign investments in industry into Singapore. Industrial investment commitments in 1974 amounted to $829 million, less than the figure of $957 million the year before. Though the prospects of foreign investments into Singapore are currently less encouraging, the international division of labour will go on inexorably.”
“Sir, I would be prepared to accept suggestions for administering this particular section which would satisfy both the professional bodies and my Ministry as to the ability to make representations. Question put, and agreed to. Clause 2 ordered to stand part of the Bill. Clauses 3 to 5 inclusive ordered to stand part of the Bill. Clause 6 -”
“On this matter, may I give the assurance that we will take the greatest pains to prevent any revelation of tax matters relating to taxpayers. But we will in fact only do it to the extent that complaints can be laid against certain professional men in the discharge of their duties.”
“Sir, I think this is a matter of principle. I believe that if the Member takes the view that making a complaint means that we must reveal information, then it means that we cannot make a complaint of misconduct. My point is that the complaint can be laid, the name of the taxpayer suppressed, and the details of his tax affairs need not be revealed except to the extent of that particular piece of misconduct. At the moment the interpretation of the Comptroller is that he cannot even lay a complaint because of the prohibition in the Act which provides that there should be nothing which would indicate that a taxpayer's affairs have been dealt with in such a complaint. I think we want to relax it to the extent that a complaint can be laid but we would, as we have done previously, be quite scrupulous in trying to omit details which would give information to other people about the affairs of the taxpayer. I do not know whether we can resolve it by just postponing consideration in Committee. It is not a matter of drafting. It is a matter of whether, in fact, the principle must be preserved - that nothing should be revealed at all so that we cannot even lay a complaint.”
“Sir, it is a question of interpretation. The Comptroller has been very scrupulous in believing that he cannot even lay a complaint. But this clause will enable him to lay a complaint in a way which will not reveal very much of the taxpayer's financial affairs. We want to be sure that we can, in fact, lay a complaint. We thought that at the moment this was debarred because of the secrecy provisions.”
“Sir, since that is a desirable amendment, I do not have any particular comment then. 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.-[Mr Hon Sui Semi]. Bill considered in Committee. [Mr Speaker in the Chair] 5.31 p.m. Clause I ordered to stand part of the Bill. Clause 2 - Question proposed, "That clause 2 stand part of the Bill."”
“To simplify procedures, clause 17 proposes to vest the Minister with powers to amend the First, Third and Fourth Schedules to the Income Tax Act. The First Schedule deals with income tax exemption for statutory boards and other institutions. The Third Schedule concerns tax on income held by the Custodian of Enemy Property. The Fourth Schedule lists the Government loan stocks where interest earned therefore will be subject to half the tax. As the Minister is already empowered to reduce tax or give exemption in the main Act, it would simplify procedures to vest in him the powers to amend these three Schedules as well. It is intended that the remaining two Schedules in the Act, the Second and the Fifth Schedules, which deal with the rates of income tax and amount of child reliefs respectively should continue to be amended only by Parliament as these two Schedules would affect a great number of people. The remaining amendments are either consequential in nature or are meant to tidy up procedural matters. Sir, I beg to move. Question proposed. 5.18 p.m.”
“In the past, provisions in the Income Tax Act regarding the general secrecy of income tax matters prevented the Comptroller from making a complaint to any Professional Body even if he is aware of blatant unprofessional practices. This is an obstruction to the course of justice. Clause 2 will take out this fetter on the Comptroller to allow him to make a complaint to the appropriate Professional Body of professional misconduct against a person in his professional dealings with the Comptroller. Finally, I come to those amendments which are intended to streamline procedures and improve existing legislation. Clause 18 will restrict the double child relief given to taxpayers whose children are studying abroad. It has been found that a number of parents want their children to be "expatriates" at an early age by sending them to expensive school abroad. In the past, double relief could be claimed for these children but there seems no reason why Government should continue to doubly subsidize such unnecessary expenditure. Clause 18 therefore provides that double relief will only he allowed where the course of study abroad pursued by the child is either not available in Singapore or the child is unable to gain admission to an institution of higher learning in Singapore. Income of public entertainers is exempted from tax if their visits are supported from public funds of foreign governments. Sometimes, the financial support from foreign governments is purely nominal. Clause 4 (b) proposes to make it clear that exemption will apply only if the visits of public entertainers are substantially supported from public funds of foreign governments.”
“It is now proposed that if the conviction is a second or subsequent conviction relating to the same year of assessment, the taxpayer shall be made to suffer a further penalty of $50 a day for every day that the offence is continued after conviction. It is also proposed to remove the requirement of a possible minimum of six months' imprisonment in addition to a fine for taxpayers who are convicted for omitting or making false returns without reasonable excuse or through fraud. A minimum six months' imprisonment seems too harsh in this case and invariably this has led to offenders being let off with only a fine. Clauses 14 and 15 of the Bill will allow for the length of imprisonment to he decided by the Court. However, for cases of fraudulent evasion for more than three years, a minimum six months' sentence will remain. At present, only the High Court may impose the full penalty in respect of offences under the Income Tax Act. As a good number of income tax cases are dealt with in the District or Magistrate's Court, clause 16 will empower the District or Magistrate's Court to impose the full penalty as well. Clause 10 will require a married woman to sign and furnish a return in respect of income assessable in her husband's name, if deemed necessary by the Comptroller. This will make it possible for the Comptroller to take action against the wife where she derives unearned income which is assessable only in her husband's name and which has not been declared to the Comptroller. Hitherto, it was not possible to prosecute the husband since he may genuinely be unaware of the wife's undeclared income. At the time it is not possible to prosecute the wife since she is not assessable on this income. The amendment will plug this loophole.”
“I am pleased to see the number of trade missions organised recently to visit potential markets to push exports of Singapore-made goods. To assist these efforts in export promotion, I announced that double deduction will be allowed for expenses incurred in approved overseas trade fairs, exhibitions or trade missions organised to promote the exports of Singapore-manufactured goods. This concession, however, will not apply to enterprises which are already enjoying export or other incentives under the Economic Expansion Incentives Act. Clause 6 of the Bill provides for the double deduction concession which will have retrospective effect from 1st April, 1973. I now come to the amendments in the Bill designed to tighten the law against income tax offenders. Income tax is the mainstay of our revenue structure accounting for more than one-third of total revenue. Compliance by taxpayers is therefore of paramount importance and Government must see to it that every person who is liable pays his fair share. The design of a penalty system for tax evasion which without excessive harshness would yet be punitive enough to deter would-be offenders is no easy task. Some guidance is provided by experience in the day-to-day administration of the law. And such experience has shown that certain modifications in the law dealing with offenders should be made. Clause 13 of the Bill provides for modification of the penalty for failure to make an income tax return or furnish particulars. There have been too many cases where a fourth, fifth or sixth conviction has not had the desired effect of getting the taxpayer to submit his returns or accounts. The present penalty of a maximum fine of $1,000 appears ineffective.”
“Because of our desire to consolidate the development of Singapore as a maritime centre, it has been our policy to give fiscal incentives to encourage shipowners to register their ships in Singapore. I announced previously that the balancing charge which may arise on the sale of a Singapore ship will not be subject to tax and that there will be income tax exemption for crews working on board Singapore registered ships. Clauses 3 (a) and 4 (a) provide for these concessions. In addition, I am proposing a new concession under clause 5. Hitherto, although income from a Singapore ship is exempt from tax, depreciation allowances on the ship are still required to be charged against the exempt income. The effect is to reduce the amount of tax exempt dividends that could be declared by shipping companies. I propose to lift this requirement and allow Singapore ships the option to claim or not to claim depreciation allowances. However, should a ship leave the Singapore registry and become liable to Singapore income tax, any unclaimed depreciation allowances accumulated during the period of its Singapore registration will not be allowed. At the same time, it is also proposed that tax exempt shipping income be separated from other taxable income or losses of the same company. In the past, shipping losses may be used to offset against non-shipping taxable income which is undesirable. Clause 7 is also concerned with depreciation allowances and provides for accelerated depreciation over three years on capital investment in antipollution devices. This concession is in keeping with Government's policy to promote a cleaner and healthier atmosphere in industrial estates and in the community as a whole. The export of our manufactured goods is the basis of our industrial strategy.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." This Income Tax (Amendment) Bill is necessary, first, to give legislative authority for a number of income tax concessions; second, to further strengthen the law against income tax offenders; and third, to streamline procedures and improve existing legislation. A number of tax concessions were announced by me previously in Parliament. These included income tax relief for supporting parents and grandparents and child relief for supporting handicapped children over 16 years. Clause 8 of the Bill provides for these concessions which need no further elaboration. Another announced concession was that with effect from the year of assessment 1975, annuity payments will be taxed only on that portion deemed to be income, the balance being considered capital and not taxable. Clause 3 (b) will provide for this using a simple rule adopted by actuaries in some countries to determine the income portion of an annuity payment. I will not trouble Honourable Members with details on how this rule works except to say that the method of apportionment is reasonable and is favoured because of its simplicity in calculation both for the Inland Revenue Department and the annuitant. Clause 3 (b) will also provide for the method of taxing gains from Negotiable Certificates of Deposits (NCDs) which I hope will soon make its appearance in the Singapore money market. An announcement on this will be made very shortly. Because of the current uncertainty in the financial world, the introduction of NCDs in Singapore has been delayed but I am confident that eventually NCDs will be an instrument commonly traded in the Singapore money market.”
“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. CLEAN AIR (AMENDMENT) BILL Order for Second Reading read. 6.20 p.m.”
“Sir, I beg to move, "That the Bill be now read a Second time." Sir, the purpose of this Bill is to provide statutory authority in accordance with clause 2 of Article 85 and clause 2 of Article 87 of the Constitution of Singapore for additional provisions to meet expenditure in excess of the provisions authorised by the Supply Act of 1974. These additional sums have been scheduled as Supplementary Estimates which have been considered and approved by the House as Paper Cmd. 2 of 1975. Sir, I beg to move. 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. 6.17 p.m.”
“Sir, I beg to move, "That the Bill be now read a Second time." In accordance with Article 85 of the Constitution of Singapore, heads of expenditure to be met from the Consolidated Fund, other than Statutory Expenditure, have to be included in the Bill to be known as the Supply Bill. The purpose of the Supply Bill before Members is, therefore, to give legislative approval for the appropriations from the Consolidated Fund to meet expenditure in the financial year 1st April, 1975, to 31st March, 1976. The heads of expenditure and the sum that may be incurred in respect of each head are shown in the Schedule to the Bill. These have been considered and approved by the House in the Main Estimates of Expenditure for the financial year 1st April, 1975, to 31st March, 1976, and appear on page 41 of Paper Cmd. No. 3 of 1975. The Supply Bill, when approved, will empower me to issue warrants authorising expenditure up to the amount for each head as shown in the Bill to be paid out from the Consolidated Fund. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“Deputy 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. SUPPLY BILL Order for Second and Third Readings read. 6.15 p.m.”
“Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has come to certain resolutions. First Resolution reported - "That the sum of $2,202,770,190 shall be supplied to the Government under the heads of expenditure for the public services shown in the Main Estimates for the financial year 1st April, 1975, to 31st March, 1976, contained in Paper Cmd. 3 of 1975." Second Resolution reported - "That the sum of $2,188,216,900 shall be supplied to the Government under the heads of expenditure for the public services shown in the Development Estimates for the financial year 1st April, 1975, to 31st March, 1976, contained in Paper Cmd, 3 of 1975."”
“BILLS INTRODUCED WATER POLLUTION CONTROL AND DRAINAGE BILL "to make provision for effectual drainage of inland areas and for maintaining or restoring the cleanliness of rivers and watercourses and to regulate and control the collection, treatment and disposal of sewage and for matters connected therewith; and to repeal certain provisions of the Local Government Integration Act (Chapter 210 of the Revised Edition) and the Environmental Public Health Act (Chapter 155 of the Revised Edition)", presented by the Minister for the Environment (Mr Lim Kim San); read the First time, to be read a Second time on the next available sitting of Parliament, and to be printed. MAIN AND DEVELOPMENT ESTIMATES OF SINGAPORE FOR THE FINANCIAL YEAR 1ST APRIL, 1975 TO 31ST MARCH, 1976 Order read for resumed consideration in Committee of Supply [7th Allotted Day]. [Mr Speaker in the Chair] 2.35 p.m. Head W -”
“Mr Speaker, Sir, I understand from Singapore Airlines that there are 166 Licensed Aircraft Engineers employed on national terms on 18th March, 1975. As for the facilities that exist for training them, apprentice engineers serve a five-year period of education and training at the Polytechnic, the SIA Engineering Training School and on the shop floor gaining practical experience. They spend the first year full-time at the Singapore Polytechnic; from the second to the fifth year they spend one day and two evenings a week at the Polytechnic. Their theoretical education is supplemented by instruction at the SIA Engineering Training School. The training is rounded off by on-the-job shop floor experience, chiefly in the last two years of apprenticeship. By the end of the fifth year they should be in possession not only of a Singapore Polytechnic Diploma but also of two professional licences issued by the Singapore Director of Civil Aviation. Thirteen Licensed Aircraft Engineers on national terms have resigned since SIA was formed on 1st October, 1972. There are now 38 vacancies for staff at all levels required to hold aircraft engineer licences. The number of apprentice engineers is 257, of whom 12 will be completing their training in July of this year, 27 in August of next year, 37 in 1977, 113 in 1978 and the remaining 68 in 1979. S1A's manpower development plan provides for the recruitment of 85 apprentice engineers this year and thereafter 50 a year. 2.33 p.m.”
“Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Main and Development Estimates of Expenditure for the financial year 1st April, 1975 to 31st March, 1976 and as leave to sit again tomorrow. Mr Deputy Speaker: So be it. ADJOURNMENT Resolved, "That Parliament do now adjourn."-[Mr Hon Sui Sen]. Adjourned accordingly at Eight o'clock p.m.”
“Sir, the JTC executive flats are not purely for our citizens. The idea was that the executives living in Jurong should be enabled to apply. So the conditions of the JTC executive fiats are quite different from those of the HUDC. However, I will be prepared to look into this matter to see if anything can be done.”
“In Neighbourhood Ii, where about 3,500 fiats have been completed out of a total of about 10,000 fiats, provision is being made for 136 shops of which about ten will be set aside for eating houses. In addition, a hawker centre with a total accommodation of 162 stalls will be ready within the next three to four months.”
“Sir, the purchaser of an executive flat in Jurong Town is not at present allowed to use his CPF to purchase the fiat. I realise that purchasers of HUDC fiats have only recently been allowed to use their CPF contributions. I have not yet considered whether purchasers of the executive flats in Jurong Town should be given the same privilege. I think there are certain conditions in the HUDC scheme which would be quite different from the JTC one. At present, CPF money can only be used for the purchase of low-cost fiats in Jurong. Regarding tile second question on the hiring of sports facilities, these are already subsidised by the Corporation as the football field, sports stadium, swimming pool and other courts are built at high cost with public money. I understand that the Corporation follows the similar practice on the comparative rates set by other bodies which provide for concession rates for schools and registered sports bodies but they charge higher rates for commercial users. On the third question regarding refuse collection from blocks of fiats to the bin centre, I understand that this is now being carried out every day by a contractor appointed by the Jurong Town Corporation. A competent contractor was appointed recently to provide the service and with effective supervision the work is being carried out efficiently. The refuse removal from the bin centre to the dumping ground is carried out by the Ministry of the Environment, and this is also done daily. On the fourth question regarding coffee shops and eating houses, I understand that in the residential area Neighbourhood I, which is virtually completed, there is provision for eight eating shops together with four other hawker centres.”
“Sir, the Member for m Keat has been talking of capital values and the drop has been in capital values. The annual value of a property, however, is based on rent, the annual .value being the gross amount at which e property can reasonably be expected be let from year to year. These rents have not fallen, although the prices of properties may have declined in certain localities. In some cases, indeed, they have risen. So there is no justification for a general reduction in the annual values of properties. In specific instances, it may be that rents have fallen, it is therefore open to the owner in any individual casa to object when the Valuation List for the ensuing year is open for public inspection annually in August. The tax system allows annual values to be revised regularly both upwards and downwards. So I would suggest that the violent shaking be applied by the owners of the properties.”
“Sir, I do not know what is the difficulty. In fact, if the Education Ministry approves the building obviously it will receive very strong support from the Education Ministry, and the Income Tax Department will, as a matter of course, approve them for tax exemption. There are so many examples of such applications and exemptions being given that I think it has now become a kind of routine. There should be no difficulty at all, if the Member for Jurong has any particular difficulty, perhaps he can get assistance either from the Education Ministry or even from my Ministry.”
“Sir, the existing procedures for application for tax exemption by educational institutions in respect of donations for school building funds are fairly simple. I am not aware that there has been any difficulty in complying with them. The necessary information to be submitted includes purpose for which the funds are required, amount of donations to be collected, details of grants, if any, from the Ministry of Education towards the building project, and whether building plans have been approved by the relevant authorities. For proper control of the donations, it is also required that separate accounts be kept for tile building project and the auditors of the funds will have to be approved by the Inland Revenue Department. If the relevant information is supplied and requirements met, an application could be approved and gazetted within two weeks. I do not think therefore that I need consider the Member's suggestion that funds for all such educational buildings should be exempted from taxation. It is very necessary that there should be proper accounts kept and that these donations should be also considered for eligibility for exemption from income tax by people who make tile contributions.”
“Sir, I made it clear that some of the price reductions have been the result of the Trade Department calling in the traders and suggesting to them that in view of the fall in food commodity prices there should be reductions in the prices of essential foods, like bread, rice and so on. The result has always been a reluctance on the part of these traders. The reason why the falls have not been in multiples of five cents is that they try to get away with as little as possible -- one cent, two cents and so on. In some cases, like cooking oil and so on, there has been a greater success on the part of our persuasion. If CASE thinks that it can help in persuading them to reduce a greater extent, we will be only too happy to accept any assistance it can give.”
“Sir, these price tags have not been imposed by regulations, many cases they are the result of efforts of CASE and perhaps persuasion by the Trade Department officials. They have not been imposed by regulations. I do not think that they are of much value because prices change so rapidly that the traders can always suggest that they have not had the time yet to indicate a change of prices from previous rate to the prevailing rate. Mr Ivan Baptist (Potong Pasir): Sir, whilst I agree with the Minister that it is the duty of the consumers to ensure that prices of commodities go down as fast as they go up, he must consider this very important point. The consumer needs commodities like bread, rice, kway teow, bee hoon and so on. These are commodities that they cannot do without. So if consumers were to boycott retailers who jack up their prices to an unreasonable extent, it is, I feel, the duty of Government to ensure that such exorbitant price increases do not occur in the market place. In more times than one the retailers have sought the permission of the Trade Department to raise the prices of commodities, and the Consumers Association of Singapore has also been involved. But at each time they came up with arguments which somehow won over the Trade Department people and left the Consumers Association in a position where it was impossible to bargain for lesser increases in prices. Therefore, I do not see any reason why, when the Trade Department notices that prices of commodities in world markets have dropped, they do not call up these retailers and CASE and come up with very strong arguments as to why the prices of these commodities - I am talking about staple commodities especially -should not fall in the same proportion as the fall in world market prices.”
“But may I suggest that in the end, it is duty of consumers themselves to be sure that the prices will fall, and by larger amounts if they so desire. 7.30 p.m.”
“Sir, I wish to congratulate the Member for Aljunied for noticing a greater tendency for prices to increase than to reduce. I cannot claim any direct responsibility for this curious economic phenomenon. The Government, as represented by my Ministry, does not have any formal control over the prices of foodstuffs in Singapore, although we would like to be satisfied that price increases of essential commodities are justifiable on economic grounds. I think in most cases, maybe in all cases, we are consulted. I can only suppose that the reason for this tendency is that it is bad marketing strategy for a company to have a series of small price increases, however justifiable, for its products. This could give consumers the impression that the company's prices are continually rising and generate more ill-will than necessary against the company. As a result, e is a tendency to hold back small eases until justification can be prod for an increase to the nearest round figure, say, 5 cents, 10 cents or even 50 cents, depending on the value the products concerned. On the other hand, when prices of commodities fall, the Government has often urged upon companies that the benefits be immediately passed on to consumers. Consequently, in some cases, price reduction which they reluctantly concede could be less than five cents ending on the prices of the items concerned. It may also be that we would not as yet expect price reduces to be as large as price increases, world commodity prices have not always fallen as rapidly as they have risen. Members may, however, like to that there have been some cases of reductions in quanta of 10 cents, instance, prices of cooking oil in consumer packs of various sizes have falls ranging from 20 cents to $1.50.”
“Sir, my first comment on the remarks of tile Member for Moulmein is that I accept his statement that there is always room for improvement. In regard to the Member for Telok Blangah, I will give some consideration to put the actual staffing position at particular dates if it is relevant. I think December may be suitable. But, as I say, we continually keep on recruiting. We will try and see whether in presenting tile format next year we can put in an extra column. We will also see whether it would be helpful to show as at any particular date how the actual staffing relates to the establishment of posts. I will certainly consider it for next year.”
“Another senior officer has attended an overseas course, and yet another is presently overseas attending a six-month course with special emphasis on industrial relations. 7.15 p.m. The Member for Telok Blangah raised two matters. He also paid my Ministry some compliments on the improved format of the Budget. But he suggested that there should be one further improvement and that is the actual number of posts filled should also be shown in the Estimates. This is somewhat difficult to adopt because the number varies from day to day depending on recruitment, transfers and resignations. Since time is required to print and check the Estimates, the position shown on any particular day when we prepare the Budget will be out of date by the time these Estimates are presented to Parliament. Nevertheless, I am grateful for having given thought to this subject and made the suggestion. Regarding the provision shown in the Estimates for the Senior Minister, Science and Technology, the explanation is that the appropriation represents the difference between his salary of $7,000 per mensem as Senior Minister and his salary of $3,500 per mensem as Vice-Chancellor of the University of Singapore. I will certainly consider for next year, if, in fact, it is still relevant, the suggestion of the Member that in special cases like this an appropriate note explaining the position should be given in the Estimates.”
“Sir, I am sorry to hear the Member for Moulmein's comments on the poor state of our industrial relations. I had the impression that our relations with the union representatives representing civil servants were of the best, and most harmonious. This is certainly so over the last few years when, I think, the question of wages was not of very great relevance in our discussions because we give regular increases in salary. I would have thought that under these circumstances there would be very few complaints. Of course, our officials in charge of industrial relations ought to be quite flexible in outlook and not at all rigid. They are, of course, bound by certain terms of reference when they go to the negotiation table, in the same way that union representatives must be given certain terms when they negotiate. But if, in fact, there were cases where we have been too rigid and inflexible, I would like to know the particular instances. The Member for Moulmein must forgive me if I do not always accept general criticisms made on my officers by persons who may sit on the opposite side of the negotiating table. In the same way, I do not always accept complaints from the employers' side that union negotiators are too rigid and inflexible. I agree that industrial relations is a very specialised field and that there should be a special aptitude or training so that negotiations will proceed more smoothly. I think some of my officers have had such experience. The Member for Moulmein may wish to know that one of the senior officers dealing with industrial relations in my Ministry had been seconded to the NTUC Research Unit and served there for seven years. So he should not be insensitive to union thinking in industrial relations.”
“Sir, under the special scheme offered to Municipal Provident Fund members to withdraw from. the Municipal Provident Fund, 1,005 out of a total of 1,297 officers opted to join the CPF scheme and to have their MPF contributions transferred into their accounts with the Post Office Savings Bank. In view of the large number of officers involved in the exercise, some delay in processing the MPF contributions for credit of the accounts of the officers is unavoidable. Each payment has to be computed by the Accountant-General's Department and verified by the Audit Department. The position is aggravated by the fact that the conversion date coincided with the closing date of the financial year of the Municipal Provident Fund. The MPF rules do not provide for interest to be credited to a member who has withdrawn from the MPF. Interest, therefore, cannot be paid under present rules on contributions which have not been paid into the officer's POSB account, but my officers will do their best to cut down on delays.”
“Sir, I do not think this is the particular place for me to make a decision of this nature. I am quite aware of all these representations. In fact, this is not the first time that a representation has been made and I do not think this is the place for me to change the decision. I have no doubt that the matter raised by the Member may be considered again, hut I do not promise that any consideration will lead to a positive result.”
“As regards the merit increment scheme, I recollect explaining in the last Budget debate that merit increments are awarded to deserving officers in the basic grades in the administrative and professional services. It is meant to give recognition to outstanding officers who are not yet ready for promotion but who deserve a faster increase in their salary than the normal increments would allow. For 1974, 62 civil servants were granted merit increments as follows: two were given one increment; 59 were given two increments; and one was given three increments. In addition to the merit increment scheme, outstanding officers in the administrative and professional services may be considered for accelerated promotion. This will help to enhance the quality of the civil service by attracting and retaining every bright and capable officer. Finally, I would like to thank the Member for his suggestion regarding income tax forms. I assure the Member that in designing the income tax forms convenience of the taxpayer is always borne in mind. The Inland Revenue Department is continually striving to improve and simplify the form as this not only benefits the taxpayer but also facilitates processing by the department.”