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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“However, because of higher overheads and a faster turnover of stocks, there may be isolated cases where goods are sold at higher prices in supermarkets as they have to pay higher prices for new stocks. In the end it is the consumers who must make every effort to help themselves and make more use of the information of prices supplied daily by the Department of Trade. They should refrain from buying from shops charging higher prices and instead patronise those selling at fair prices. 6.45 p.m. The Member asked questions regarding the civil service. On leave allowance, I would like to say that the allowance is fixed according to the divisional status of the officer and not his grade. An increase in leave allowance is only given if the officer is promoted to a higher division, for example, a promotion from Division IV to Division IH. This is because under the old leave scheme an officer's eligibility was based on his divisional status and his leave would be revised to a higher rate on his promotion to a higher division. The leave allowance' compensates officers for the number of days' leave which they gave up, and it is therefore not logical to allow a revision in leave allowances except when there is a change in the divisional status of the officer. On the Member's question regarding the 13th month allowance, it was quite clearly stated when the allowance was introduced that it was not to be confused with bonus. A bonus is uncertain in amount and it may or may not be paid. But the 13th month allowance, like the National Wages Council payment, is a wage supplement. These are orderly adjustments of wages pending a comprehensive revision of salaries. I see no reason why the 13th month allowance should not be maintained.”
“At the Savings Bank counter in a Post Office a depositor can now withdraw up to $2,000 once a day, whereas previously the limit was $500 once every three days. At any Post Office Savings Bank branch the amount that can be withdrawn is higher, namely $5,000 in cash once every day. The Member also enquired as to the activities of the Neptune Orient Lines and Intraco. Neptune Orient Lines' success should not be judged solely by the record of its profits. The Government is not disappointed at the progress made by the national shipping line. It is not the Government's intention to curb the freedom of shippers for the short term benefit of Neptune Orient Lines by making it compulsory for our exports to be carried on the national line. As for Intraco, its principal activity remains in international trading. Export sales account for 60% of the company's turnover. I am pleased to say that, since its inception in 1968, Intraco's turnover has increased from $11 million to $63 million. The Member asked about export promotion efforts of the Government. I have made quite a detailed statement on export promotion during the Budget debate. I also mentioned the re-discounting of export bills just now in reply to the Member for Thomson. The Member for Anson also touched on the higher prices being charged by consumer supermarkets. Consumer supermarkets provide a valuable service in stabilising prices of goods, particularly when there are unfounded rumours of shortages of goods due to hoarding in anticipation of price increases. These supermarkets help to force the private dealers to sell at reasonable and even at lower levels.”
“It is anticipated that a second and final dividend for the two big chit funds will be paid sometime towards the end of the year. I assure the Member that the Government is as keen as he is to see an early conclusion to matters connected with the closure of chit funds. The Member also expressed concern over recent fluctuations in interest rates. Movements in our interest rates have been to a large extent influenced by international events, and it is difficult for us in Singapore to insulate ourselves from movements in the international monetary markets. However, there is no indication that fluctuations in interest rates in Singapore over the past year have produced adverse effects on the level of deposits placed with banks and finance companies. On the contrary, these deposits continued to increase and at the end of February 1975 fixed deposits with banks and finance companies stood at $5,179.7 million compared to $4,601.2 million in July 1974. For the same period savings deposits increased from $746.7 million to $792.5 million. I would like to emphasise, however, there is not much that the Government can do if individuals, in their hope for quick gains, take unnecessary risks. The Member for Anson also asked why the Post Office Savings Bank cannot maintain sufficient funds to meet withdrawals. This Savings Bank always ensures that there is sufficient cash at its various counters and branches to meet withdrawals. But like any prudent banking institution it tries not to overstock liquid funds at counters, since such funds do not earn interest but only add on to costs. With the installation of computerised on-line banking, the Post Office Savings Bank has in fact increased the amount that may be withdrawn.”
“If extravagance is allowed, and if departments are permitted to spend as they like, it would mean that the burden of extravagance would have eventually to be placed upon the shoulders of the public in the form of heavier taxation. While I hope that my Ministry of Finance officers are sufficiently capable of distinguishing 50-cycle generators from 50 cycles and one generator, I agree that they should always be given additional training. In fact, they have been sent to the Staff Training Institute even before any notice is taken of any particular officer who requires special training. But if particular officers do make blunders of the nature which had been described by the Member for River Valley, I certainly would consider that perhaps they could improve by undergoing a course at the Staff Training Institute. I now come to the comments of the Member for Anson. He touched on such a variety of subjects that I will only answer those which come under my own jurisdiction. He mentioned about chit funds. The position is that since August 1972, 26 chit fund companies have been wound up. Time is required to adjudicate on claims and recover as much assets as possible, and the interim dividends can only be declared as and when there are sufficient funds. The public is always informed of such payments through press releases. The delay in declaring funds was caused by difficulties encountered in the collection of debts owed by debtor subscribers. In some cases court action has to he taken to recover such debts. To-date the Official Receiver has declared interim dividends totalling $9,264,638.15 to 43,026 subscribers of 14 chit funds. Between April and September this year another 5,575 subscribers of 10 other chit funds will be receiving their dividends totalling Sl,950,527.”
“I have been trying to trace these two particular instances in my Ministry. I am afraid we have no record of them. I must assume that perhaps these examples are, if not classical, apocryphal in nature, and they probably sprang from the mind of the Member for River Valley. (I am sorry he is not here.) In fact, it is like the fishermen's tale where the fish grows bigger and bigger. These blunders appear to have been magnified. I would, however, say that in particular matters of this nature, technical officers have a tendency to try and blind the Ministry of Finance officers with scientific verbiage. They use a description to try to frighten my officers in regard to their ignorance. My Ministry has a part to play. We are guardians of public finance and we must see that money is spent in the way it should be spent without any extravagance. So even where we fear we may be ignorant, we still ask questions which we think are necessary. We should not be frightened of being thought ignorant by asking questions which we feel must be answered before we can be satisfied that expenditure should be approved. This is probably analogous to the patient and the doctor (since doctors are mentioned) - the doctor probably knows better about his patient's condition. The doctor can probably suggest that an operation is very necessary to protect the health of the patient, but finally it is the patient who must decide whether or not to undergo an operation. In the same way it is the Ministry of Finance which must decide whether or not money may be allocated for any particular purpose.”
“In the 1975 Budget, I thought I explained that there was a gap between the revenue we had and the total expenditure, including development expenditure, and therefore I had to place greater emphasis upon the revenue-raising aspect of the tax. I did explain that the effect on the car-using public was a secondary objective, and hoped that there would be some psychological effect on people against using their cars - some encouragement would be given to them to adopt the Park and Ride scheme, and also adjust to the limitation on people going to the Central Business District during peak hours. 6.30 p.m. As to whether or not there would be further taxes, this would depend upon the traffic situation and perhaps upon the need for raising further revenue. I thought the tax imposed this year was modest but would have a psychological effect. Anyway I hope that there would be an upturn in the economy and it may not be necessary for me to come again for taxation for the purpose of raising additional revenue. The Member for Serangoon Gardens also mentioned the civil servants and the desirability that there should be no smugness or complacency among the civil service. I quite agree that our civil servants should be as polite and as helpful as possible, and if they cannot deal with any particular request of the public at a particular counter or in their own office then they should try and indicate where additional help can be obtained and perhaps even help them in referring the matter to the particular office that deals with the problem. The Member also mentioned my comments on the civil service and the way in which they dealt with problems. He also quoted the two instances which had been raised by the Member for River Valley.”
“We shall not be able to train sufficient numbers of such professional and skilled personnel from our own citizens, and we shall therefore have to continue to recruit non-citizens if our development programmes are not to be adversely affected. It is not possible for me, therefore, to set any target date by which the civil service will be entirely staffed by Singapore citizens, nor do I consider it desirable that any target should be set. Singapore has benefited from recruitment of non-citizens into our public service in the past through the system of open competition. I would favour continuing to leave the door open. However, the Member for Thomson may rest assured that, all things being equal, a Singapore citizen takes and will continue to take preference over non-citizens in appointments to the civil service. The Member for Serangoon Gardens touched on a number of points. He gave me a lecture on the way I should present my Budget and explain the revenue raising measures to the public. Well, I am much obliged for this little lesson on explanations on tax problems. I realise, of course, that the explanations on why taxes have to be imposed should be fair and coherent. If I am lacking in this particular quality on this particular Budget on the 3rd March and 17th March, I hope that these shortcomings will be excused by Members. But the circumstances in which I made the statements on taxes on cars in October 1972 and in March 1975 are quite different. In the first instance, we were in the rather happy position that we were not really short of money, even for development purposes.”
“The final suggestion which the Member made was in relation to the Customs office in Jurong which, he says, deals only with non-dutiable goods. I am not familiar with this particular division of work in Jurong. But it seems a reasonable suggestion that there should he officers there who could also deal with dutiable goods, and I will refer his very useful suggestion to the Customs Department for consideration. The Member for Thomson asked questions on recruitment of Singapore citizens into the civil service and would like to know the number of Divisions I and II officers in the civil service as at the end of February 1975. The figures for February 1975 are not yet available, hut figures as at December 1974 show that there was a total of 21,160 officers in Divisions I and II in the civil service, of whom 19,932 are Singapore citizens and 1,228 or 5.8% are non-citizens. Of these 1,228 non-citizens, 606 officers are in Division I and 622 are in Division II. These civil servants may be considered for citizenship after five years' permanent residence, instead of the normal requirement of 10 years. There are, I suppose, sonic advantages in having a civil service staffed entirely by Singapore citizens. But it is not possible at this stage of Singapore's development for the Singapore civil service to be so staffed. A manpower survey conducted jointly by my Ministry and the Economic Research Centre of the University of Singapore suggests that the manpower shortages of engineers, architects, surveyors, doctors, dentists, lawyers and technicians will continue in the l970s.”
“Beyond that, I do not think that it is our intention that real estate should be bought up even by investors. The Member also asked three questions. First, how is the Minister going to encourage and subsidise industries, and what industries would be subsidised in the present situation? The answer to this is that all industries are welcome although those which are more viable under present circumstances, such as shipbuilding, shiprepairing, oil rig building, and machine tool industries which service these industries, would be given some priority. The assistance which has been given has been clearly made available in the form of tax incentives, export incentives, assistance with loan financing, assistance in industrial buildings and infrastructure. In the matter of export financing, the Monetary Authority of Singapore is finalising arrangements to enable banks to rediscount export bills with the Authority. This facility will provide a cheaper source of finance for exports. Details of this arrangement will be announced very shortly by the Monetary Authority. His second question, I think, is whether there is any further relaxation on money supply. In the case of money supply, we have relaxed all credit controls and the banks are quite free to lend money without any limit to any particular industry or industrial sector. His third question is on the difficulties of the timber industry and he mentioned that I had stated that I would take note of the difficulties and refer them to the Timber Export Industry Board. This matter has been noted as promised and the particular section of his comments has been referred for action by the Timber Export Industry Board. I have not had any reaction as yet.”
“Sir, the Member for Sembawang has asked quite a number of questions. I do not know whether I have got all of them down. I think he complained about guidance to investors not being adequate and that they were not told what industries were being promoted. He also complained of delays in processing applications, some of which took two to three years. On this particular comment, I am a bit surprised because the Economic Development Board is one of our most efficient institutions. I think its record over the last 10 to 15 years has been quite good. It has had a reputation of being able to reply very promptly to applications and, in some cases, it has given guidance to investors within two or three weeks. If there is any particular instance which has been brought to the Member's notice, I would like to know and I am sure the EDB also would like to know what particular inefficiency has resulted from their efforts to promote investment in Singapore. The Member also complained about investors having difficulty in purchasing property and when notified by the Land Office that their app1ications for purchase of property have been rejected, they have been to a lot of trouble in recovering their deposits. On this matter, while I take general interest in it, the Land Office is not under my jurisdiction. But I would say that in many cases, where the investors are going to reside in Singapore, a high proportion of their applications has been approved. For those cases which have not been favoured by either the Land Office or by the Ministry of Finance, it may be that the property applied for has very generous land areas. I think the idea is that the investors should be enabled to settle in some place which would give them peace of mind and ability to concentrate upon their industries.”
“The Expenditure on Manpower provisions voted for the Staff Training Institute for Financial Years 73 and 74 and the portions spent were as follows: FY 73: Voted $216,970.00 Spent $198,535.71 FY 74: Voted $492,760.00 Spent $321,400.00 (up to 28th February, 1975) $350,390.00 (estimated up to end of FY) $18,434.29 for FY 73 was not spent because the two new posts for 1 HEO and 1 Despatch Rider were not filled. For FY 74, $142,370 was not spent because suitable staff including Training and Senior Training Officers and Language Education Officers were not recruited despite several attempts to do so through circulars and advertisements. One of the Senior Training Officer posts is being filled by a Lecturer on secondment from the University of Singapore. The vacancies of Language Education Officer will all be filled in the new financial year when three Language Education Officers assume duty. The other posts comprising 1 Language Laboratory Technician, 2 Clerical Assistants, 1 Assistant Technician and 8 Division IV staff have not been filled because the new premises for the Staff Training Institute at Heng Mui Keng Terrace off Pasir Panjang has not been completed. MINISTRY OF EDUCATION: RESEARCH AND STATISTICS UNIT 5. Mr J. F. Conceicao asked the Minister for Education if he will state the titles of research reports on projects completed by the Research and Statistics Unit of his Ministry and the expenditure incurred in the projects, and whether the reports are available for perusal by interested individuals.”
“I will take their suggestions into consideration and hope that our Timber Industry Board can remedy the mistakes which have been pointed out. I am glad that there was general support for the education and manpower training which we shall have to maintain or initiate so that we can improve the skills of our workers and prevent a brain drain overseas. I am conscious of the need to provide sufficient opportunities for our own people in the kind of industries which will make the fullest use of these skills. There were other matters mentioned by the Member for Aljunied, such as the Road Transport Action Committee and pollution measures. These are matters not really within my competence, and I hope he will raise them with the particular Minister in charge of these matters. Finally, I would like to comment on the need which one or two Members have expressed for tripartite cooperation in connection with the National Wages Council and the National Productivity Board. The need for such cooperation is the reason why, in my Budget statement and in this particular reply, I do not propose to offer any suggestions or guidelines for the National Wages Council, as was suggested by one Member. It would be presumptuous of me to provide what is really within the functions of a tripartite body. I agree entirely with Members that cooperation of this kind is very desirable. Sir, I think I have answered most of the points raised. There are various other matters which I have notes on, but at this stage perhaps they may not be necessary for me to reply. 7.52 p.m.”
“In my early years in the civil service, I think I was regarded as a fairly competent land officer; at least I hope so! I am quite aware of the problems of farmers -having served in the Land Office from 1939 until 1959, at least when I ended up as Commissioner of Lands. So I may be said to have had some experience of the problems relating to farmers. Unfortunately with the development of the economy in Singapore, the amount of land that will be left for agriculture will be very limited, and there is no redress that I can see. There is no possibility that we can find enough land for all the farming desired. All of us, I think, are in some respects farmers at heart. We like to own a piece of land. We like to see things growing but we all cannot fulfil our ambition to be farmers. Nevertheless, I am filled with admiration by the achievement, under very great difficulties of our farmers in making us self-sufficient in pigs, poultry and eggs, in supplying so much of our table vegetables and in many other ways. As I say, I cannot, as Minister for Finance, see any way in which we can increase the supply of agricultural land and I am afraid that we may have to look to other areas for the supply of these vegetables. On the kind of farming which is possible in the future, I think what we are trying to do is to finance the industrial type of farming - the very capital-intensive type of pig and poultry farming which is really a kind of industry rather than the old type of farming which we are accustomed to in the past. There is one other point which was made - the question of timber and the warning which the Members for Katong and Sembawang gave against the reputation for the quality of our timber industry being spoilt by exporters with rather unsatisfactory practices.”
“And the reason why they have not been able to do this is that there have been considerable movements of staff which have meant that the people responsible for these reports had unfortunately not been able to complete their work before leaving the Board. There was the comment by the Member for Bukit Ho Swee that tourists were being fleeced. This and other defects are all, I think, being remedied and I hope that the situation will be much more satisfactory in the future. The Member for Jalan Kayu thought that in view of the contribution which tourism has made to our economic development the increases in costs which have been imposed upon the hotels and upon the tourist industry generally have been rather adverse in their effects. Unfortunately, due to the greater cost of oil, electricity and other costs, like increases in wages and so on, have to be recovered. I do not think there is any remedy for this. Our only consolation is that these higher costs also affect our competitors in the tourism industry, and therefore we should be able to maintain our competitive edge. These are the matters on which I have some responsibility. There were other matters raised by Members but they really concern other Ministries and might perhaps better be raised when the debate on the Estimates takes place. I should like, however, to comment on the representations of the Member for Jurong, who generally at this time of the year speaks on agriculture and of my neglect of this particular sector of the economy. I think I have responded at some length in previous Budget debates. But I always listen to the Member for Jurong with sympathy because my early years were spent on a farm. I was born on a farm.”
“This was, in fact, the policy we adopted in the early years of the 1960s - that tourism was not important and that if the tourists wanted to come to Singapore, the natural advantages would be such that there was no need for further promotion. I think we have abandoned that particular practice or policy. We decided that certainly in the years when the British were having a military rundown from their Singapore bases the earnings from tourism would be very helpful in improving the balance of payments by earning foreign exchange for Singapore. And I see no particular reason why we should depart from a policy which has paid such dividends over the `last few years. There was a further comment that the Singapore Tourist Promotion Board had not been paying enough attention to, or that some of the revenue which they obtained from cess on tourist establishments, restaurants and so on, could be used to finance the arts or culture. The Tourist Promotion Board, in fact, has spent money in sending troupes overseas for cultural shows. Perhaps this is not the very best way in which funds of the Tourist Promotion Board can be applied because much of the money that is being used has gone into the payment of fares for the people who travel overseas. The Tourist Promotion Board has also started a project to promote arts and craft in Singapore. There will be a centre for arts and craft which will be near the Board's offices in Orchard Road. I think a very considerable amount of money will be spent on this arts and craft centre. There was the comment by the Member for Jalan Kayu that the report of the Tourist Promotion Board has not been produced as rapidly as it should be. I have pressed the Singapore Tourist Promotion Board to produce their reports more expeditiously.”
“However, there are certain other types of vire ments which require approval from the Treasury, because they are subject to Treasury sanction or to certain regulations which prevent, say, expenditure on manpower being vired to a special expenditure. These requirements are, I think, only to be expected. Nevertheless, I welcome the suggestion of the Member for River Valley that the Estimates Committee should try and improve on our methods and procedures, and I will be very happy to receive suggestions from the House or the Estimates Committee on how our procedures can be improved. I would like to make one formal comment in regard to the civil service, and this is a matter on which I thought Members would have expressed some appreciation. This is on the presentation of the Budget. But the only comment I had has been, in fact, an adverse comment - that we have classified the Estimates so that we now can tell what appropriations are made for various economic purposes, but the emphasis should really be on performance rather than on cost. I ought to say that performance budgetting is one other aspect of budgetting procedures which we are trying to improve. But in view of the work which we were already doing on the manner of presentation of the Budget, we thought that that should have priority before we went into the new method of performance budgetting. Now I would like to deal with the matter of tourism. A number of Members in this House thought that the natural advantages of Singapore would be sufficient to attract tourists without our having to spend any money on the Singapore Tourist Promotion Board.”
“This is really necessary as a measure of efficiency, and the problems to he dealt with should be dealt with at as low a level as possible. Only when these problems are not capable of solution at these lower levels should they be referred upwards. So the problems such as those of compliance with financial regulations or authority for expenditure and so on are, in fact, devolved upon the clerical service and perhaps the executive service. These officers ought to be able to implement the regulations and the people who submit requests for authorisation ought to be able to deal with them without too much difficulty. The Member for River Valley also mentioned a few instances which are obviously ridiculous. For example, the approval of a 50-cycle generator accompanied by the query that there should be justification for the purchase of 50 bicycles is rather an extreme case. In my own experience of matters which have come to me, I do not think that there are many instances of such ridiculous requests by the Budget Division of my Ministry. If there were such examples, again I would like these to be brought to my notice and perhaps those who perpetrated these blunders can be sent to our Staff Training Institute. There was also the comment that virements could not be approved by the higher civil servants of other ministries. I do not think that is particularly true. This is really a misunderstanding or misconception. Authority for certain virements have already been delegated to Permanent Secretaries of other ministries and there is really no need to refer any of these virements to us.”
“He mentioned the implementation process, the difficulties of the professional and medical services and the bureaucratic way in which matters were being dealt with in the Ministries, particularly the Ministry of Finance with regard to the authority on expenditure of funds, virements and so on. It is very easy for the civil service to be the target whether of Members here or of the people who write to the Press. Civil servants are prevented by regulations from making any reply themselves and so, as the Minister in charge, perhaps I can in a very small way reply on their behalf. I am grateful, of course, for any suggestion which may be made to improve civil service standards, and I am obliged for one or two expressions of satisfaction for the efficiency of our civil service generally. I think there is no question that, at least in this particular region of the world, our civil service is regarded as being perhaps as efficient, if not more efficient, than those of other jurisdictions. I think members of the civil service are justified in being a bit proud of their reputation and standing. They should not, of course, carry this pride into their relations with the public, and I do not think they do except for a few black sheep. I certainly do not accept the general truth of any criticisms of this nature, and if there are any particular instances I hope Members will not just make general remarks but refer particular instances to me. The civil service is so constituted that there are various spheres of responsibility and those in the higher levels of the service, of course, should be concerned with matters of higher administration and policy, while the administration generally of rules and regulations must remain with the lower ranks of the civil service.”
“There are a number of other suggestions for new taxes, and I am very grateful to Members for even thinking about them. Some of these are for capital gains tax (capital gains in the stock market perhaps) and increased taxes on companies. I need only say that these are among the very hardy perennial suggestions which have been made to us and which we have consistently rejected because they are against our ideas on how our economy should develop. If we really do want to have multi-nationals and to have them manufacture in Singapore, and if we want to compete in the way that we have done in the past, then these ideas are not really feasible. There was one further variant of the suggestion that tax relief for workers over 55 years should be changed, and this is that the income tax relief for parents or grandparents ought to be increased. This was also examined. I thought that having regard to the fact that we were already giving $750 relief per parent or grandparent living with the taxpayer, this was adequate. I see no reason to change my mind on this at the moment. I do not think there are any other ideas on taxation, but if there are I will examine them when I have the time to look over the very voluminous notes I have taken this evening. I now come to the civil service. There were two comments. One was by the Member for Katong. He mentioned that while in Fullerton Building he saw a number of civil servants sauntering and lounging and enjoying themselves. I would appreciate it if he had come to me and told me about this particular department instead of just mentioning it here. I hope, after the meeting here tonight, he would do so. The Member for River Valley also dealt with the subject which, I think, he originally spoke on in the debate on the President's speech.”
“This is obviously what they are worth and, therefore, they should receive the full pay which they deserve. In place of this relief for workers of over 55 or 60 years I think there was a very impassioned plea - I am not quite sure which Member made it for extending reliefs for young couples rather than for those over 55 years. There was another suggestion that the relief which I am giving to people over 55 years should be extended also to all workers below that age. It is simply not possible for any Minister for Finance to do that because it really comes back to the question of whether I should give additional tax relief to every taxpayer. I am afraid that would not be possible. There are very few people who can avoid taxes. There are two things we cannot avoid -- death and taxes! At least those who are in the comfortable class of being able to come within the provisions of the Income Tax Ordinance certainly cannot escape, not even hawkers. There were some criticisms to the effect that the Inland Revenue Department had not been taking action against hawkers. The reason was that the return or yield from action against hawkers was not adequate, and in some cases we spent much more than what we collected. I think I need not have to assure Members that where cases of flagrant violation of income tax laws are brought to our notice we are prepared to prosecute offenders to the full extent of the law even if it means that we will have a negative return on our efforts. But last year I suggested that if Members knew of any particular hawkers who were making extraordinary amounts of money they should bring them to our notice, and we would be very happy to make the investigations and to collect whatever was due to the Government and to the people.”
“In fact, we are now issuing work permits to people who are non-citizens, which means that there is a demand for additional labour. We have tried to encourage greater female participation from our own population with some success. But I am afraid that the possibilities of extending this beyond the present position are not very good. In any case, some of our women would be better off looking after the children. We are trying our best to try and get as many people, who are not at present economically active, into employment. For example, I think the employment of crippled or handicapped people in certain jobs has been tried quite successfully in the Government service, and there is all the reason in the world why people who are still fit after 55 or even after 60 years should be induced to carry on working for as long as possible. There was a suggestion that employers are not prepared to maintain employment for people who are over 55 years. Of course, this may be true in particular cases, but if those over 55 years have skills, as we hope they will increasingly acquire skills over the next few years, then they will be valued employees, and I am sure employers will want to retain them. There may be a possibility that the wages obtaining at 55 years would be higher than may be justified by the skills; in which case, of course, the regard for seniority will have to be cast aside and the employee over 55 or 60 years must merely get the rate for the job he is doing. This also happens in the Government service. There are some people who get the rate for the job. In the past the Government paid three-quarters of the salary for people who came back into the Government service. In the last few years there have been others who have come back on full pay.”
“I now come to the tax concession which I made for people who work beyond the age of 55 or 60 years. I think very few Members welcomed this particular tax concession. The Member for Potong Pasir was an exception. But most of the Members thought the relief for workers over 50 was purely token. The cost of the tax concession is going to be $4 million, and certainly no Minister for Finance would regard this as purely token. If I did not consider it necessary that this should be given for a very definite purpose, I would not have agreed to do so. The Member for Paya Lebar was particularly ironical about this particular tax concession. He is perhaps unusually suspicious, but that may be the result of his own environment and experiences. Maybe he has had a harder life than most of us and that accounts for his rather jaundiced view. But I hope he will live long enough to continue working until well over 55 or well over 60 years so that he can enjoy this particular concession. There are many other countries where people work over 55. In fact, the retirement age in some countries is 65. As to the suggestion that we should have a retirement age of 60, that is already in force at least for new Government servants. If there is a request by those who were engaged before a certain date, and who are covered by safeguards under the Constitution, to opt for a new retirement age instead of 55 without wanting to keep their safeguard, I think the Government would be most happy to consider an extension of their retirement age. The reason is that there is or was until recently a manpower shortage and in giving this particular concession I am hoping that we will soon come again to that happy position.”
“After saying all this may I say that I am totally unrepentant about having imposed this rather modest tax. I thought that the increase of $60 per annum for the 1000 cc and under cars is very modest. Sixty dollars a year is merely $5 a month. I am sure that anyone who goes to the Orchard Road Car Park, Albert Street or Bugis Street area and does not spend $5 for one good meal with his friends or members of the family would be rather unusual. So if it is true that a 1000 cc car is now a standard possession, then the $5 increase per month for that particular possession is a very reasonable price to pay. Some Members thought that my objective of increasing the road tax was to prevent a greater number of new cars getting on the road. That was a secondary objective. I did not put forth this objective as the reason for imposing this particular tax. In fact, if Members had read my Budget statement carefully, I made it quite clear that I wanted more revenue and this was one method. The amount of tax for individual cars is rather small - $5 a month - but collectively it comes to a respectable sum. In fact, I did not think that this is the solution to the congestion problem nor would this be the answer to making a success of the CBD scheme or the Park and Ride scheme. It is purely a psychological reminder that these schemes are coming, and that some influence should be exercised upon persons to try and use more public transport. In order to make a success of the schemes which we are proposing, there may be a need for further tax provisions in the future. Therefore, I do not want Members to think that this is the final round of tax, and that having imposed this tax, this is the end of all taxes as far as road transportation is concerned.”
“May I assure that Member that I am also a beer drinker but I would not grudge the extra that I have to pay for the bottle of beer that I consume. I hope that he and members of the public will feel the same. I noted that quite a number of Members have been somewhat critical about the way in which I `have framed the increase in road tax. Some Members thought that the emphasis was perhaps on the lower or at least the middle group of cars. I should explain that while it is true that the burden of this particular taxation has been on the 1000 cc to 2000 cc cars, that on these the burden is heaviest, when you look at the whole range, starting from cars below 1000 cc to those over 3000 cc, the burden of taxation has been relatively fair. Therefore, I would ask them to look at the whole package rather than on particular aspects of the package. I have noted the names of Members who spoke on this, but they are so numerous that I think there is no need for me to repeat them here. But I have taken note of those Members who are particularly unhappy about a particular part of the package. Most Members believe that the tax is not what I said, i.e, that it does not affect matters basic to life for the average family. The general feeling is that the average family is now in a position to afford a car, perhaps even a car in the 1000 cc to 2000 cc group. I am very happy that this is the general impression because it really reflects the growing affluence of our community. If it is true that it is no longer a luxury to own a car but a standard possession of the average family in Singapore, then I think it is also true that "there is a chicken in every pot" in Singapore. Maybe we have achieved this particular objective. I doubt it myself, but after hearing Members I get that impression.”
“Let me first deal with the problem of taxes which has perhaps aroused most emotion in the House, so that I can get it out of the way before making my comments on other criticisms. It is always very difficult to balance the needs for additional revenue (and these needs are more evident this year than last year) against the concessions which Members think should be given because of the inflationary or recessionary effects which we are experiencing at present. These recessionary and inflationary effects have influenced the population and have, of course, affected the way in which matters of taxation, such as those I have introduced in this House, have been regarded. At the same time there is a great need for recognition by all citizens in Singapore of their responsibility of paying for some of the services, which are afforded by the Government and which cost the Government a considerable amount of money, which must be financed. I `have previously stated, as being the opinion of some international experts, that perhaps the burden of taxation is not being spread broadly enough to bring home to the people of Singapore the realisation that the Government is there not only to spread benefits but also to provide the means to pay for these services. I think the matter which raised most excitement was the increase in road tax on cars. There has not been a dissentient voice on the taxes for tobacco. In fact, there was even one Member who was in favour of increasing the taxes on tobacco. There was general support on the tax on liquor, although one Member, who thought that I was not a beer drinker, suggested that it was unfair generally to beer drinkers who are increasing in number and therefore this measure is `likely to affect a major part of the population.”
“Mr Deputy Speaker, Sir, this has been a rather long day and I have listened very carefully and patiently to all the remarks which have been made by all the Members who have spoken this afternoon. First of all, I would like to thank Members, almost all I think, for their congratulatory remarks upon both the performance of the economy and for the responsibility which my Ministry has borne in regard to the results which have been achieved over the past year. I thank them also for the many suggestions which have been made for improvements either in the economy or in the various Ministries and departments. I even thank them for the brick-bats which have been hurled at me, because these critical remarks may be valuable in dispelling any smugness or self-complacency which may affect Government Ministries and departments in the success which we have had over the past few years. I think the slowing down of the growth rate may have been to some extent salutary in warning us that we cannot presume upon success all the time and that we need constantly to increase our efforts to improve the economy. This smugness and complacency is felt not only in the civil service, which has been singled out for critical mention here and to which I will refer later, but also perhaps even in our own House, in the nation as a whole, and in the way in which they seem to regard success as being natural and likely to continue. I hope that this very false impression can be disabused of and that there will be a greater effort to try and continue growth in Singapore at the very high rate which we have experienced in the past and to which I hope growth would return, if not this year, at least in the following year. I would now like to deal with the comments of Members.”
“With our rapid economic development in the last few years, it has become apparent that we need our skilled and experienced people to go on working beyond their normal retirement age. And our equally rapid development in medical facilities has made our people capable of working beyond 55 years old, the old retiring age or even 60, the new retiring age. But it must be recognised that such people will need to spend more money staying healthy and getting to work. With effect from the 1976 year of assessment, therefore, the earned income relief will be increased from the present $1,000 to $2,000 for those over 55 years old and to $3,000 for those over 60 years old. It is estimated that the cost of this tax concession will be some $4 million. Mr Speaker, Sir, I should like, in conclusion of my remarks on the financial policy of the Government for the financial year 1975, to stress once again the crucial importance of worker-management co-operation and their working in with Government policies to ensure Singapore's continued progress and prosperity. If our efforts are united, we should be able to face this troubled future with cautious optimism. Sir, I beg to move. 3.34 p.m.”
“Additional revenue expected is about $6 million. The Annual Licence Fee (or road tax) on petrol-driven motor vehicles, including station wagons, will be revised with immediate effect as follows: Revised Old rate rate per cc per cc 1000 cc and under 20 cts 14 cts 1001 cc to 1600 cc 25 cts 17 cts 1601 cc to 2000 cc 30 cts 22 cts 2001 cc to 3000 cc 40 cts 35 cts 3001 cc and above 65 cts 60 cts Thus, a 3000 cc car will now have its road tax increased by $150 from $105O per annum to $1,200 per annum as against the 1000 cc car which will have its tax increased by $60 from $140 per annum to $200 per annum. Private hire cars will also be taxed on this basis, but there will be no change in the road tax payable on taxis. Cars registered in the name of companies will be taxed at twice the rate applicable to those owned by individuals. Diesel tax on private motor vehicles based on six times the road tax on petrol-engine vehicles will increase proportionately. In addition, under income tax legislation, the capital allowance allowed for company cars registered after today will be restricted to a maximum of $15000. There will, however, be no change in the Additional Registration Fee on new vehicles, whether owned by individuals or companies. Additional expected is about $26 million. The increases I have announced will yield additional revenue of only S4l.5 million, compared to the expected deficit on the Development Estimates of $245 million. Four-fifths of the deficit will thus have to be financed by drawdowns from the Development Fund. As against these tax increases, perhaps Members will welcome the slight tax concession I now propose to offer.”
“Beyond this limit, expenditure on further improvements will not yield a commensurate increase in revenue. We thus have to introduce new taxes or increase the rates of existing taxes in the coming fiscal year. I have decided against introducing any new taxes for the time being. As for increases to existing taxes, at a time when rising world prices are forcing a reduction, or, at best, preventing any improvement, in our living standards, I am reluctant to increase taxation lest it should raise the prices of essential goods and services, especially food and clothing, public transport and housing. So additional revenue will have to come from increased taxes on tobacco, liquor and cars, not basic to life for the average family. Members are aware of the various measures introduced by the Government over the last few years to discourage smoking. During calendar year 1974, the total consumption of cigarettes showed no increase over 1973 hut there was a marked shift of consumer preference in favour of the more expensive imported brands. The duty on tobacco and cigarettes will he increased, with immediate effect, as follows: Per Kilogram From To Leaf tobacco $29.10 $32.00 Imported cigarettes $32.50 $38.00 Locally manufactured cigarettes $ 3.00 $ 3.50 Pipe tobacco $25.40 $28.00 Cut rag $27.60 $30.00 Allowing for a possible drop in consumption, which will not be unwelcome, the increased duties are expected to yield additional revenue of about $9« million. Customs and excise duties on liquors will also he increased. On beer and stout, the customs duty will be increased by 15% and the excise duty by 8%. On brandy and whisky, the customs duty will he increased by 3%. Full details of the increases will be announced by my Ministry later today.”
“5 million for FY 75 represents a meager 5% increase over the revised estimate for FY 74. Revenue in FY 73 was 27% above that in FY 72, and in FY 74 it was 13.6% above revenue in FY 73. Members will note the appreciable slowdown in the rate of growth of revenue. The estimated recurrent expenditure of $2,646.3 million for FY 75 is 6½% higher than the revised figure for FY 74. It includes the $500 million which I propose to transfer to the Development Fun d. Apart from the $500 million to be transferred from the Consolidated Fund, the Development Fund will be augmented by the proceeds of new loans, both domestic and foreign, which I propose raising in the coming year. The Fund will also benefit from investment income and from repayment of loans made to statutory boards and companies in the past. Even so, the estimated development expenditure of $2,188 million, which is 60% higher than the revised figure for FY 74, will exceed what is available from all these sources by $245 million. This then is the gap that has to be bridged, partly by new taxation and partly by a drawdown from the Development Fund. Taxation Policy and Changes I have on many occasions, and in previous budget statements, stressed that it was the Government's policy to give priority to economic growth, which in turn would bring increased revenues to finance growing public expenditure. At the same time, we would improve our tax collection machinery so as to maximise the yield from existing taxes. I have referred to the marked slowdown in the rate of growth of revenue since FY 73. In the coming fiscal year, recurrent expenditure is expected to increase by 6½% as against a growth of only 5% in revenue. We are also approaching the effective limit for improving the collection machinery.”
“The allocation of funds is, however, only the first step in the development programme. The more important step is to get the accelerated programme implemented. This will be the concern of the Economic Activation Committee which has been recently set up for this purpose. Before passing on to the next part of my Statement, I should like to comment briefly on the presentational changes that have been incorporated in the Estimates documents. Honourable Members are aware that improvements have been made to the Estimates format in the last two Budgets. Further to these earlier efforts, my officers have introduced more improvements which rationalise the way in which Heads of Expenditure are established. Each Ministry is now given only one Head of Expenditure, thereby facilitating inter-Ministry comparisons of total allocations. The subhead codes have been refined to enable Government Expenditure to be classified according to the economic impact of the expenditure. These changes should provide useful information to the Government data bank and enable a more effective evaluation to be made of the efficiency and utilisation of our monetary allocations. With these improvements in presentation, the Treasury Memorandum on the Estimates which must be considered part of the Budget documents has also been improved in coverage and analysis of each Ministry's total expenditure. As it also explains in detail the provisions under each Head of Expenditure, it makes it unnecessary for me to repeat in this Statement what has already been said. Revenue The Treasury Memorandum also shows in detail how the revised yield from individual items of revenue has varied from the estimated yield in FY 74. It also shows the yield we expect in FY 75. The total estimated revenue of $2,647.”
“Mindful of a similar need for productivity in the public service, I have asked my Ministry to place continued emphasis on developing greater administrative skills, adopting innovative ideas, improving work procedures and methods, and making greater use of machines wherever practicable. Admittedly, productivity is not as easily measurable in certain services as it is in others. But to enhance efficiency and performance, a simple principle is to insist always on output of a high quality. Manpower increases have been supported selectively and only in cases where the needs have been clearly demonstrated. Such increases have, by and large, been confined to Ministries and Departments with major development programmes under implementation. As a result, the net increase in the permanent establishment for FY 75 including those posts created by Establishment Warrants during FY 74 has been kept down to 1,689 posts or 2.7% of the establishment level in FY 74. In contrast, the total provision in the Development Estimates has been allowed to grow from $1,561.6 million in FY 74 to $2,188.2 million in FY 75, an increase of 4O.l%. This emphasis on development I earlier indicated as being responsive to needs and changes in the economy in the Budget's increasing role as an instrument of policy. Statutory boards and Government companies providing the main thrust of development and economic infrastructural activities take up more than 70% of the provisions under the Development Estimates. Direct development expenditure by Government Ministries and Departments also show a substantial increase of $193.8 million or 44.4%. Such increases are consistent with the policy of accelerating public development activities during the recession.”
“Traditionally, the Budget outlines the Government expenditure for the year against its expected revenue and upon Parliamentary sanction, remains as the control document for the financial year. The Budget, however, also plays an increasingly important role as an instrument of economic policy. Budget proposals not only reflect the requirements of Government business. They can also respond to needs and changes in the economy. Thus, the Budget for FY 75 is counter-recessionary in its allocation of more funds for development purposes. At the same time, its usual restraint on recurrent expenditure can be exercised also to increase productivity in Government operations. The total provision for recurrent expenditure in FY 75 under the Main Estimates, excluding the transfer of $500 million to the Development Fund, is $2,146.3 million. This has increased by $326.8 million or 18 per cent over the provision for FY 74. The increase is spread between Other Operating Expenditure accounting for $220 million and Expenditure on Manpower accounting for $106.8 million, The need for the increased provision for Other Operating Expenditure is due to the increasing volume of Government business and the general rise in prices of supplies and materials. In the case of Manpower costs, the main reason for the increase is the National Wage Council award in 1974 and the consequent increase in CPF contributions. These alone account for $86 million. To offset this sizeable increase in Manpower costs, stringent control has been exercised over increases in new .posts. I have continually exhorted the private sector to increase productivity to improve our competitive position in the international market.”
“Wage increases must, wherever possible, be pegged to productivity. Employers should, therefore, continue to improve their methods of working, to use less labour by putting in more equipment and machinery. Productivity increases depend as much on workers as on employers. Both sides must play their parts for the Government's plans to establish more skill intensive and higher value added industries in Singapore. Concluding Remarks on Economic Policy Our anti-recessionary measures within the coming year would probably have inflationary effects. To counter these effects, we have some spare capacity at present for production to meet any additional demand for goods and services. Declining world demand has meant generally stable or lower prices for most raw materials required for production. By buying our raw materials from as many sources as possible, we can in any case ensure that we buy where we are the least affected by price increases. The Government will also continue to ensure that insofar as the domestic sector is concerned, there will be as little profiteering as possible. Our people should also conscientiously cut out wasteful consumption. The aim is for our economy to recover from recession without setting off another bout of inflation. In taking anti-recessionary measures, we shall at the same time keep to our long-term objectives and policies. We have the advantage of a diversified economy. Next our sound foreign exchange reserves position. We should still be able to achieve economic growth, though probably at a lower rate than in the years 1969-1973. The FY 1975 Budget Let me now turn to the Budget Estimates for the financial year 1975-76. These should be examined against the economic background discussed in the Economic Survey and my preceding remarks.”
“We should use this vacant period in the lives of our workers for more industrial training so that our labour force will be ready for more qualified tasks when the economy recovers. As a start, the Industrial Training Board has increased its industrial training capacity. Enrolment in 1975 is up at 6,890 from 5,150 in 1974. The number will be further increased later this year when we take in more trainees. Training will be improved in quality by lengthening the training period and changing the course content to meet future industrial needs. Private sector training will be similarly improved by better use ofour Joint Industrial Training Centres. In addition to the present two centres, with RolIei and TATA, the third Joint Industrial Training Centre with Philips will begin training by July 1975. The Government has provided $10.5 million for industrial training in 1975. Of this, $8.5 million will be for more industrial grants and Joint Industrial Training Centres and $1.9 million will be used to send trainees overseas. One aim in our manpower training is to change work attitudes. For the higher skill industries, workers must be prepared for longer and more intense training periods. Our workers must increase their productivity, through higher skills which can only come by hard work and diligence. We can continue to achieve more economic progress only if our workers are prepared to tackle difficult tasks with greater "value added", rather than go for "cushy jobs". The ultimate limits to our productivity are the technological standards we can achieve, which in turn means the standards of technological skills our workers are prepared to exert themselves to achieve. To promote industries requiring more skills, better wage rates will be paid by these desired industries.”
“6 million, an increase of $193.8 million over the previous year. Special emphasis will he placed on the provision of industrial infrastructure, utilities, transport and communication and housing. As for private sector construction, the Government has so far introduced two measures to stimulate it. Banks are now allowed to include, for up to 2% of their statutory liquidity reserve requirements, amounts lent on mortgages of new properties. The restriction on the purchase of properties by foreigners has also been amended to allow them to buy flats and apartments in buildings of not less than six storeys. This in practice means the more expensive apartments for which there is less demand by local residents. Private developers should play their part to stimulate demand by lowering the present property prices which appear to be still excessive. Monetary Policy For the coming year, monetary policy will continue to be directed at maintaining monetary stability and the promotion of economic growth. Our main instruments, the variation of the minimum cash balance, which banks and finance companies have to maintain with the Monetary Authority, and adjustments in interest rates will continue to play important roles. The development of Singapore as a financial centre will continue to receive special attention. Manpower Development Policy Let me now make a few remarks on our manpower training which is by its nature, long-term. Our economic strategy recognises the need to increase skills in our labour force, to assist us in promoting industries requiring more skills, as well as to make the best use of our workforce. We should expand training and re-training programmes during a recession, when workers will be less fully employed.”
“We shall strengthen the existing centres through more experienced staff and set up centres in new areas including West Asia and Eastern Europe to assist our manufacturers and traders to explore new markets by providing them with information and contacts. Second, the Government has agreed in principle to establish an export credit insurance guarantee scheme in conjunction with the Banking and Insurance Community. Detailed discussions on the implementation of the scheme are now being held. Third, to help our exporters, arrangements are now being finalised to enable banks to rediscount export bills with the Monetary Authority. There should therefore be a cheaper source of financing for exports. Fourth, we are studying various ways to build a stronger organisation for export promotion. Meanwhile, our usual export promotion activities will continue. These include the organisation of seminars and workshops on export promotion for our local industries as well as the organisation of private trade missions and trade fairs. It is our intention to encourage a greater degree of participation from the private sector, although the Government may still play a leading role in the organisation of such missions. Construction Policy Under world recessionary conditions, we shall step up construction activity to offset the expected fall in output and employment in other sectors. New construction will also help to meet infrastructure demands when the economy recovers fully. The major Statutory Boards and Ministries will press on with their development plans. For financial year 1975, Public Sector Development Expenditure is programmed to increase by almost $1,290 million to $3,080 million. The Government's direct development expenditure is expected to amount to $630.”
“These centres will have top-level staff and be directed from our headquarters in New York to ensure proper attention to all investment inquiries. My Ministry is also examining our tax incentives legislation to see whether any additional incentive is required to further assist the promotion of desirable industries. One such area is the tax exemption period for pioneer status which in suitable cases may need to be extended from the present five years to a maximum of 10 years. This extension may make it sufficiently attractive to industries to set up here which require substantial investments and have long gestation periods before profitability can be achieved. It would also help to resolve a problem of our present export incentives scheme which gives an export certificate holder the tax incentive when he exports his product but not when he sells it to a local manufacturer who needs to incorporate it in an, export product. At the same time, I am removing the $1 million fixed asset requirement for pioneer status for small but especially high quality product industries to provide supporting services. The Economic Development Board has often been asked to find joint venture partners by both foreign and local parties. It will now establish a Bureau for Joint Ventures which will collect and distribute information to interested parties and provide all necessary assistance for such joint-venture projects. Export Promotion Policy Our present export promotion efforts need to be improved during this recessionary period when demand the world over has declined substantially. First, our Commercial Secretaries Service will be expanded so that the new export markets can be identified. We already have representatives in 13 countries.”
“Our only requirement should be that such facilities are put to the best use. In times of recession, there may be a greater need for financing on preferential terms. Our efforts to promote supporting industries would be helped by such financing. I announced sometime ago a special fund to assist skill-intensive industries bearing higher risks than those normally acceptable to financial institutions. The Capital Assistance Scheme, for which $100 million has been provided in the Budget for the financial year 1975, will be administered by the Economic Development Board. The assistance to such industries will include Government taking up shares which the industrial venture partner can buy back at his option, long-term loans or Government guarantees for such loans, as well as shorter-term loans for working capital. For other industries, long-term loans are available at preferential rates from the Development Bank of Singapore (DBS). In addition, a separate export financing scheme with an initial provision of $100 million has also been set up and administered by the DBS to assist our export industries. I should, however, emphasise that such assistance is given mainly to industries which have higher skills or technology and, as far as possible, have established markets and proven performance In addition to financial assistance, we shall be making greater efforts to promote investment. The Economic Development Board has been reorganised to do this more vigorously. Our efforts will now be concentrated where they should be, at the investment centres. In addition to the nine centres already in operation, two more promotion centres are being established in Houston and Copenhagen.”
“Major Elements of Economic Policy Despite the present recession, we should stick to our long-term objective of maintaining a relatively high rate of growth. We should consolidate the policies of our Economic Strategy launched in 1971. Growth should still he spearheaded by industrialisation. We should continue also to make Singapore a services centre for technical know-how, tourism and finance. Similarly, we should give high priority to the training of workers in skills needed for our future industries. Measures should, of course, he introduced to counter and mitigate the effects of the present recession. But as far as possible, these measures should be in keeping with our long-term strategy. We should take advantage of the present slack conditions to prepare for full economic recovery. High growth rates may still be achievable because the base from which we are climbing is low compared to Japan, and also because Southeast Asia, as a whole, may well develop faster as a result of increased oil prices, especially Indonesia. Industrial Development Policy Our industrial development policy would be to get industries to increase the degree of local manufacturing in their products by workers doing more and more skilled jobs. The success of the policy can be measured by the value added by each worker in that industry. Investment commitments for the past few years indicated a growing trend in the value added per worker from $14,000 in 1972 to $32,000 in 1974, reflecting the increasing sophistication and higher skills required of industries that would be set up in the near future. To meet the needs of such industries, we shall have to make sure that the required facilities (land, utilities, buildings if necessary) are developed and readily available.”
“For 1974, a total of ISO concerns employing 9,030 persons were registered as permanent new factories compared with 190 concerns employing I 1,140 persons in 1973. As a result, our unemployment rate remained stable at 4%. In the meantime, employers began to learn how to work equally well with less labour. In addition, there is now less job-hopping. Our industries are therefore leaner and more efficient. So far we have been more fortunate compared to some major industrial countries where greater unemployment has resulted in considerable social strife. Prospects for Singapore How will Singapore fare in 1975 in the midst of international uncertainties? Most economic forecasts indicate that the major industrialised economies are unlikely to achieve any significant upturn until at least the second half of 1975. Taking into account the normal time lag before such economic revival affects the rest of the world, I would think that a marked improvement all round in Singapore's economic condition will not he apparent until the latter part of 1975 or even early 1976. However, our economic structure, strengthened by the diversification of our industries and services, should be able to withstand, as in the past year, the impact of some further recession provided the American and Western world economy does pick up by the first half of 1976 at the latest. To make assurance doubly sure, however, the recently appointed Economic Activation Committee will speed up the implementation of any anti-recessionary measures. The task is therefore one of designing policies that will help to get us out of the present recession without too much suffering while pursuing and fulfilling our long-term economic objectives.”
“Construction activities which suffered a setback in 1973, due to high prices of materials, have also bounced back, registering a positive growth of 5.5%. Although private sector construction has declined, this was more than offset by the acceleration of public construction which rose substantially by 22% in real terms. As a result, the construction sector has once again contributed to the continuing health of our economy. The beneficial effect of a diversification of activities was amply demonstrated in 1974. Although manufacturing activities slowed down considerably, trade and services remained buoyant, accounting for more than half of the increase in our Gross Domestic Product. Healthy Balance of Payments Our vulnerability to external influences has also been lessened by our continuing sound balance of payments which will enable us to pay for the raw materials we need for both growth and consumption. Further, our export-oriented industries, services and tourism have all helped our balance of payments to end the year with a comfortable surplus. In spite of the openness of our economy, we have been able to implement our monetary policies effectively while at the same time maintaining a high degree of monetary discipline. Stable Employment With these advantages, we have managed to maintain reasonably full employment. As a result, unemployment so far has not yet become serious. Of a total of 16,940 workers retrenched in 1974, 79% were females who were mostly secondary wage earners and only 3% were skilled workers. Most of these retrenched workers moreover have found alternative employment, many in new industries.”
“As a result, we have now these new industries in addition to our main manufacturing activities: shipbuilding and ship repairing (14.8% of total value added), refining of petroleum (20.3%) and electrical machinery (21.6%), resulting in an even spread with no single industrial group accounting for more than 22% of total earnings in manufacturing. Other economic sectors, notably trade and services, `have also helped in our plan for diversification. Although entrepot trade's share of GDP has fallen, its nature has gradually changed from trading in mainly traditional products to trading in capital goods, such as machinery, telecommunications equipment and industrial raw materials which in 1974 accounted for 22% of total re-exports. Domestic trade has of course gained from increased industrial production, a substantial portion of which is exported. In our trading activities, we have had also an increasing diversity of markets. This has been partly due to the multi-national companies who have set up industries in Singapore and bring with them the international markets to which they are suppliers. Partly also, this has been due to our own efforts in seeking new markets, such as those in West Asia and Eastern Europe. In the services sector, tourism has become increasingly important. The relatively slower growth of tourists from Australia, US and UK in 1974 was corn-pen sated by the high growth of tourists from ASEAN countries. In the services sector also, we have been actively promoting our financial centre activities and the centre, with foreign banks from a large number of countries, now provides an even wider range of financial and banking facilities.”
“Mr Speaker, Sir, I beg to move, "That Parliament approves the financial policy of the Government for the financial year, 1st April, 1975 to 31st March, 1976." Sir, I have distributed in advance to Honourable Members my Economic Survey of Singapore in l974. (See Appendix, cols. 195 - 356.) This Survey and, I might add, the (Paper Misc. 2 of 1975.) Memorandum on the Estimates and the (Paper Cmd. 3 of 1975) Estimates themselves, have been the result of considerable efforts by my Ministry to improve our statistical data and to present them to Honourable Members in as complete and informative a way as possible. We are conscious of the many great defects still remaining in these documents and shall continue to improve on them. Nevertheless, they will at least have this immediate benefit, that Members need no longer hear me, even in brief recapitulation, on the statistical details of our economic performance in 1974 or of the international events which affected them. They are dealt with in extenso in the Survey and for those who have not the time or convenience to read it all at once, an adequate summary has also been provided. I need only remind Members that our real rate of growth in 1974 was 6.8%, although at current prices, it was 26.2%. Members need not be told that for a non-oil producer, a real rate of nearly 7% growth in the circumstances of 1974 is not unsatisfactory. Appendix - ECONOMIC SURVEY OF SINGAPORE, 1974 (Cols 195-356) Diversification of Economic Activities Our economic strategy puts great importance on diversification of our economic activities. We have tried to widen the base of our manufacturing sector by introducing new skills and products particularly in metal and precision engineering, chemicals, electronics and transport equipment.”
“That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 52), resolves that the Schedule to the said Act be varied by deleting the figures "$56,320", "$686,720", ~`$220,344" and "$14,773" appearing in the second column thereof and substituting therefore the figures "SI 87,050", "$823,250", "$200,170" and "$13,750" respectively. ANNUAL BUDGET STATEMENT 2.50 p.m.”
“Mr Speaker, Sir, I beg to move the motion* standing in my name under item No. 4 in the Order Paper. * The motion reads as follows: That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 52), resolves that the Schedule to the said Act be varied by deleting the figures "$56,320", "$686,720", "$220,344" and "$14,773" appearing in the second column thereof and substituting therefore the figures "$187,050", "$823,250", "$200,170" and "$13,750" respectively. Sir, it is proposed to increase the provision for the Privy Purse, which includes the President's salary, the NWC supplement and the annual non-pensionable allowance, because of certain decisions concerning the President's emoluments. The House will recall that on 20th March, 1973, the Prime Minister announced that the President's official emoluments would be raised from $4,000 per month, which is tax-free, to $12,000 per month, with $4,000 tax-free. The House was informed then that the President did not wish to make use of the increase in his salary. It has been decided, however, that as from FY 75, the President will be paid his full salary of $12,000 per month, but the entire amount will he subject to income tax. Action will be taken to amend the Income Tax Act which specifically provides that the official emoluments of the President shall be tax exempt. The increase under Class II expenditure is required largely to meet increasing expenses such as the 1974 NWC wage supplement, normal increments and the higher rate of CPF contributions for the President's personal staff. For Classes Ill and IV, however, lesser provisions are now required. Sir, I beg to move. Question put, and agreed to. Resolved.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to a certain resolution. Resolution reported - "That the sum of $22,068,400 shall be supplied to the Government under the heads of expenditure for tile public services shown in the First Supplementary Estimates of Expenditure for the 1inan~ial year 1st April, 1974 to 31st March, 1975, contained in Paper Cmd. 2 of 1975." Mr Hon Sui Sen: Mr Speaker, Sir, I beg to move "That Parliament doth agree with the Committee on the said resolution." Question put, and agreed to. Resolution accordingly agreed to. 2.38 p.m. HIGHWAY CODE”
“ADJOURNMENT Resolved, "That Parliament do now adjourn to a date to be fixed."-[Mr E. W. Barker]. Adjourned accordingly at Fourteen minutes to Seven o'clock p.m, to a date to be fixed. WRITTEN ANSWER TO QUESTION TEST FOR ELECTRICIANS 1. Dr Tan Eng Liang asked the Minister for Education if he will give (i) the number of candidates who sat for the Skill Evaluation Test for Electrical Fitting and Installation conducted by the Industrial Training Board since 1st January, 1974, up to the latest convenient date; (ii) the number who have been awarded the full certificate; (iii) the number who failed in the theory paper; and (iv) the number who failed in the practical paper.”
“Mr Speaker, Sir, I beg to move the motion* standing in my name, as it appears under item 9 on the Order Paper. * The motion reads as follows: `That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 52), resolves that the Schedule to the said Act be varied by deleting the figures "$667,020", "$145,060" and "$14,050" appearing in the second column thereof and substituting therefor the figures "$686,720", "$220,344" and "$14,773" respectively'. Sir, the provision approved under Class II of the Civil List is insufficient to meet increasing expenses such as the 1974 National Wages Council wage supplement and the higher rate of Central Provident Fund contribution. The increase under Class III is mainly for the purchase of household requisites for "The Lodge" which is the proposed official residence of the President and for increased costs of maintenance of grounds and public utility services. Under Class IV, a small increase in provision is required to meet the cost of a deep freezer and the increased cost of a swing-fog machine to be used in outdoor vector-control work, particularly against mosquitoes. It is, therefore, necessary to augment the provision for "Salaries of Personal Staff" from $667,020 to $686,720; the provision for "Expenses of Household" from $145,060 to $220,344; and the provision for "Special Services" from $14,050 to $14,773. Sir, I beg to move. Question put, and agreed to. Resolved, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 52), resolves that the Schedule to the said Act be varied by deleting the figures "$667,020", "$145,060" and "$14,050" appearing in the second column thereof and substituting therefor the figures "$686,720", "$220,344" and "$14,773" respectively.”
“Mr Speaker, Sir, I can assure the Member for Jalan Kayu and this House that the intention of the Development Loan Bill is not to impose a credit squeeze upon the economy. I am quite aware that there has been some anxiety in the past, whether or not this Bill, in fact, has that intention. But this Bill is quite clearly of the same nature as the Development Loan Act, 1972, which enables us to raise money for development purposes. The idea is that we will require this amount of $5,000 million over the next five years on the basis that we will want to keep the growth rate of the Singapore economy at over 10 per cent per annum, which I hope it will be possible to achieve. The point has been raised that the cost of servicing is on the high side. 1 should like to explain that this includes not only interest but also repayment of capital. Most of our loans are of five years' duration and also of longer terms, so that if the interest rate is of the order of six or seven per cent, then the balance is only about six or seven per cent which represents a repayment of capital over the period of the loan. 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]. Bill considered in Committee; reported without amendment; read a Third time and passed. NATIONAL POLICE CADET CORPS BILL Order for Second Reading read. 5.32 p.m.”