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.”
The complete record
Every one of 1,492 lines we hold for Hon Sui Sen, in date order, each linked to its source. Free to read, in full, without an account. Page 22 of 30.
“Sir, I beg to move, In page 24, line 24, after "exchange", to insert "from". This amendment is to improve the language. Amendment agreed to. Clause 51, as amended, ordered to stand part of the Bill. Clauses 52 to 64 inclusive ordered to stand part of the Bill. Clause 65 -”
“Sir, I beg to move, In page 20, line 33, to leave out "the authority thinks proper it" and insert "it thinks proper, the relevant authority". This is just to improve an awkward construction of the sentence. Amendment agreed to. Clause 43, as amended, ordered to stand part of the Bill. Clauses 44 to 47 inclusive ordered to stand part of the Bill. Clause 48 -”
“Sir, I beg to move, In page 20, line 19, to leave out "constitutes" and insert "may constitute". The phrase "or constitutes" is inappropriate as at that point it is not an adjudged issue that the matter actually constitutes a breach. Therefore, the phrase "may constitute" is preferred. Amendment agreed to. Clause 42, as amended, ordered to stand part of the Bill. Clause 43 -”
“Sir, I beg to move, In page 15, line 40, after "person", to insert "authorised by or under subsection (1)". Sir, this is just to correspond with subsection (1) which states that the Registrar or any person authorised by him may require any person to produce for inspection the register required to be kept pursuant to section 25. Amendment agreed to. Clause 28, as amended, ordered to stand part of the Bill. Clauses 29 to 41 inclusive ordered to stand part of the Bill. Clause 42 -”
“Sir, I beg to move, In page 15, lines 13 and 14, to leave out "If he fails or neglects to give notice as required by this section he" and insert "A person who fails or neglects to give notice as required by this section". Sir, this is similarly an improvement to the arrangement of words. Amendment agreed to. Clause 26, as amended, ordered to stand part of the Bill. Clause 27 ordered to stand part of the Bill. Clause 28 -”
“Sir, I beg to move, In page 15, to leave out lines 9 to 12 and insert "(4) A person who ceases to be a person to whom this Part applies shall, within fourteen days of his so ceasing, give notice of the fact in the prescribed form to the Registrar.". Sir, this amendment is merely an improvement to the arrangement of words. Amendment agreed to.”
“Sir, I beg to move, In page 12, line 19, to leave out "specifies" and insert "may specify". This is just an improvement to the wording of the clause. Amendment agreed to.”
“May I seek your advice, Sir? Do we go through these amendments clause by clause?”
“Sir, I beg to move, In page 2, line 32, to leave out "value" and insert "price". This amendment is to improve the wording of the clause. The word. "value" is somewhat ambiguous, and the word "price" is more appropriate. Amendment agreed to.”
“Mr Speaker, Sir, in view of the fact that there is really nothing but support from the House, I do not think there is very much for me to answer. Let me first take the enquiry of the Member for Jalan Kayu. He asked whether there were any arrangements made for an effective implementation of the Bill. I hasten to assure him that we will make all the necessary arrangements to ensure that staff will be adequate to deal with the very essential problems of administration. I believe the Registry of Companies will be moving into new premises in the newly erected building behind the City Hall, and the Monetary Authority of Singapore will also have in that same building some of their offices dealing especially with companies. I think the combination should be sufficient to allay any doubts or anxieties about our being serious in implementing the present legislation. As to the question of more companies going public, I believe I have expressed my views on this matter, in asking as many companies as possible to go public. As far as Government-owned companies are concerned, I think a number of them will be examining the position after the end of the year. It is necessary in order to enable the companies to be floated to prepare the accounts so that public issue prospectuses can be prepared. I do not think the Member for Bras Basah requires any answer, but I am glad to note that he is for the Bill and it does not matter whether he owns any shares or not. I agree with him that an active Stock Exchange is very necessary for the development of Singapore. 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.”
“The Malaysian Government's views on insider trading and other dishonest and unfair share trading practices coincide with the Singapore Government's views, and provisions on most, if not all, of these matters appear in the Malaysian Securities Industry Bill in much the same form as in the Bill now before Members. It is expected that further meetings with representatives of the Malaysian Government will shortly take place to discuss matters of common interest relating to the whole field of the securities industry and, inter alia, to decide what further measures should be taken to ensure that the stock market is maintained in a fair and healthy state. In this connection, I would like to draw the attention of Members to the wide powers conferred upon the Minister, in clause 95 of the Bill, to regulate the stock market. Some, if not all, of these regulatory powers appear in the Malaysian Bill. Sir, I beg to move. Question proposed. 4.05 p.m.”
“It may not often be necessary for prosecutions to be launched under these sections, as in the United States similar provisions have been used with great effect to inhibit those wrongful practices which do so much to destroy a true market in securities. The Government believes, and I must repeat, that it is important that Parliament should clearly state its abhorrence of such practices, which already appear to have become widespread in the market, and that every effort should be and will be made to stamp them out. On the subject of insider trading, I should also add that in a new Companies (Amendment) Bill the existing section l32A dealing with trading by officers of a company in their company shares will be considerably expanded and tightened up. Not only will power he sought to enable the Stock Exchange to conduct a full enquiry into these matters but also regulations will be made designed to restrict the dealings of officers of companies, members of their families, their legal and financial advisers, in the shares of their companies during certain periods of the financial year of the company when they are or are likely to be in possession of confidential information likely, if generally known, to affect the prices of their company's shares. Furthermore, the recently established Securities Industry Council will, amongst its other functions, be operating as a watchdog in market trading and, with the active co-operation oc the Committee of the Stock Exchange, it is anticipated that steps will be taken to punish and publicly expose those persons who indulge in insider trading.”
“Again, licensed dealers who are not stockbrokers will be required to enter into a fidelity bond. The reason for this is that the fidelity fund provisions in the Bill apply only to stockbrokers who are members of the Stock Exchange. With regard to the latter, they will find little that is unusual about those provisions, for under the existing Stock Exchange Rules a Fidelity Guarantee Fund was created to compensate persons who suffer loss by reason of the default of members. The provisions in the Bill therefore merely give statutory force to the establishment of such a fund. The amount of capital in the existing fund will form the basis of the fund established under this Bill. The existing fund will be merged with the new fund established under this Act. Another significant feature of the Bill is to be found in Part IX where new offences are created in relation to market dealings. The first offence relates to false trading and markets; the second offence to market rigging activities; the third offence to inducing the sale or purchase of securities by the dissemination of false information; the fourth offence which is drafted in the widest possible terms to deal with inter alia insider trading by officers of a company, their legal and financial advisers and even by any other person who may acquire confidential information. This provision together with the more specific provision in section 132A of the Companies Act should provide an adequate framework to proceed against insiders. The latter offence, like the other offences, carries a maximum penalty of $30,000 or five years' imprisonment or to both.”
“However, I would like to emphasise again that the Bill does not merely pay lip-service to, but acknowledges, the principle of self-regulation of the Exchange by the Committee and is not intended to interfere with the day-to-day control by the Committee of normal share trading on the Exchange, nor with the traditional form, of control that the Committee exercises over members of the Exchange except on such matters as the licensing of dealers in securities, the reduction to statutory form of existing Stock Exchange Rules with regard to the maintenance of brokers' trust funds and the fidelity fund, together with the keeping of records and the conduct of securities business to which I have referred. The Bill, for the first time in Singapore, proposes to license dealers in securities and their representatives and investment advisers and their employees who are engaged in negotiating investment in securities. The Government believes that a system of control by licensing of dealers in securities is necessary at this time and this is particularly so as regards dealers in securities who are not stockbrokers. For while stockbrokers have always been subject to certain traditional forms of control by the stock exchange, other dealers have not been subject to any real form of control. The provisions in the Bill should ensure that only persons of good character and reputation and in a sound financial position will be permitted to be licensed as dealers in securities under the Act. Licensed dealers will be required to keep trust accounts and have them audited. This will not prove too burdensome to stockbrokers, for under Stock Exchange Rules they have been required to maintain trust accounts.”
“The Explanatory Statement describes in sufficient detail what this Bill seeks to achieve and I need not deal with the provisions in any detail. However, I think it would be useful if I repeated what was said on the Second Reading of the earlier legislation with regard to the objects and scope of this proposed legislation. While the Bill covers the whole of the securities industry in Singapore, I would like to reiterate that the Bill does not attempt to prevent speculation as such. Some speculation attends every anticipation or expectation of short or long term price trends which induces trading activity on the Exchange. It is and always must remain the responsibility of the individual investor to decide as to the advisability of any particular investment. What the Bill actually does is to attempt to see that the stock market operates in a fair and open way and that people do not manipulate the market by illegal means for their own profit. The Bill, together with the new rules that have recently been passed by members of the Stock Exchange, will, it is considered, go a long way to achieve these objectives.”
“If speculation becomes excessive, or if for other reasons the market becomes or is likely to become disorderly or unhealthy, appropriate corrective and remedial action will be called for. The delay in bringing our earlier Securities Industry Act into operation was due to the desire to reach full agreement with the Malaysian Government on this uniform approach. As things have turned out, the delay has been fortuitous for it has given us an opportunity to propose further measures with regard to regulation of dealers in securities and share trading in the context of the existing booming share market. These, like the earlier provisions, are designed to protect the interest of investors to the extent that this is practicable. The Malaysian Bill corresponds very closely with the Bill now before Members. We decided to introduce a consolidating measure on this subject rather than an amending Bill including the additional provisions I have mentioned since it was considered important that references to Parts and sections in our legislation should, for the convenience of the financial public and the administrators of the legislation, correspond with the same Parts and sections in the Malaysian legislation. The new proposals that distinguish this Bill from the earlier Act are mainly concerned- (a) with the keeping of records by dealers, investment advisers and their representatives and employees of stockbrokers and financial journalists to show their interest in securities (Part V); (b) with the conduct of securities business (Part VI); (c) with the expansion of the provisions dealing with unlawful or dishonest forms of share trading (Part X).”
“In this and in other ways we anticipate that the Stock Exchange will justify the Government's policy in relying upon self-regulation on the Stock Exchange rather than imposing the strict forms of control implicit in a statutory body similar to the Securities Exchange Commission in the United States. In my earlier speech to which I have referred, I reminded Members that Singapore and Malaysia enjoy a common Stock Exchange which over the years has existed to the undoubted economic benefit of both countries. I went on to say that Members would be reassured to learn that it was the intention of both Governments that this common Stock Exchange should continue in existence, and to enable this to be done it was essential that Singapore and Malaysia should have a uniform approach in legislation dealing with the securities industry and share trading. To this end, consultations have taken place between us and the Malaysian Government, and I am most pleased to record that these consultations have come to a happy and fruitful conclusion. Members are aware that Malaysia introduced a Securities Industry Bill into their Parliament on the 22nd January, 1973. This Bill has been modelled on our earlier Securities Industry Act, but it also contains important additional provisions which were agreed to by the two Governments and which have been incorporated in the present consolidating measure. Since I last spoke to Members on this subject, I am glad to record that the Committee of the Exchange has implemented new rules to limit excessive speculation. Nevertheless, careful watch will need to be maintained to ensure that a resurgence of market euphoria does not carry speculation beyond reasonable bounds.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Members will see from the Long title of the Bill and the Explanatory Statement that this Bill amends and consolidates the law with respect to the securities industry and repeals the Securities Industry Act, 1970 (No. 61 of 1970) which was passed by Parliament on 30th December, 1970, but for reasons which will be given later on, was not brought into operation. In my Second Reading speech at the time that that legislation was before Members, I dealt in considerable detail with the background to and the reasons for bringing in legislation to control the securities industry and trading in securities. This speech appears in the Hansard, Volume 30, cols. 461-7. I do not need to repeat at any great length what was said at that time for neither the reasons for, nor the background of, the proposed legislation have changed. The need, however, for such legislation being made operative has, if anything, become more pressing with the passing of time. We are continually being made aware from happenings in the market that investors need to be protected, so far as is possible to do so, by legislative intervention from unscrupulous manipulation and share rigging on the Stock Exchange. These are matters which stockbrokers with the best will in the world as a body are unable or not agreeable to control voluntarily. Needless to say, statutory provisions on these matters will not provide the universal panacea. The Government will still look to the Stock Exchange for its co-operation in exposing dishonesty and malpractices in share trading.”
“Mr Speaker, Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions." Question put, and agreed to. Resolutions accordingly agreed to. LIGHT DUES (REPEAL) BILL Order for Second Reading read. 2.40 p.m.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. Resolutions reported - "That the sum of $987,000 shall be supplied to the Government under the heads of expenditure for the public services shown in the First Supplementary Estimates of Expenditure for the financial year 1st April, 1972 to 31st March, 1973, contained in Paper Cmd. 4 of 1973." "That the sum of $33,200,000 shall be supplied to the Government under the heads of expenditure for the public services shown in the First Supplementary Development Estimates of Expenditure for the financial year 1st April, 1972 to 31st March, 1973, contained in Paper Cmd. S of 1973."”
“But I am very conscious that the success of any policy in maintaining and furthering progress in Singapore will depend also upon the private sector, upon not only the response but also the effective co-operation of both workers and employers in such sector. It is important that we seek to maintain the present very healthy climate in industrial relations in Singapore. Harmony between unions, employers and the Government has been clearly evident in many fields of coordinated activity, for example, in improving labour productivity or in maintaining the highest quality in our products. In the National Wages Council also, it has been heartening that despite strongly competing interests, our unions and employers could so readily come to agreement last year upon how much of the growth of wealth in the Singapore economy should be distributed in the form of percentage wage increases, and how much accordingly retained for further growth in business. It is not unreasonable to expect that for 1973, recommendations for another equitable sharing of rise in national income will again be agreed. With an effective development plan, and assured collaboration from management and workers, I think that we may face 1973 with some confidence in achieving a very rapid growth rate, perhaps at our targeted figure of 15 per cent per annum. Mr Speaker, Sir, I beg to move.”
“50 per net ton and the annual tonnage fee was reduced to 20 cents per net ton. An undertaking was also given that these fees could not be increased for a period of 20 years from the date of the initial registration of the ships. Further, when a ship is sold to another person without a change of flag of the ship, the initial registration fee would be further reduced to 50 per cent of the fee subject to a minimum of $1,250 and a maximum of $6,000. A refund of 50 per cent of the annual tonnage fee would be granted if at least 25 per cent of the crew are Singapore citizens. Shipowners, who wish to transfer the ships to the Singapore flag, need not have them resurveyed if the ships possess valid certificates. In addition, income tax has been exempted on the profits derived by a Singapore registered ship with effect from 1-1-69. These incentives have been successful in attracting foreign ships to Singapore. In January 1969, there were 357 ships with a total of 252,940 gross tons. Now the number of ships is 782 with a total gross tonnage of 1.75 million gross tons. To enhance Singapore's status as one of the busiest ports in the world, it is felt that further impetus must be given to the registration of more ships. Apart from direct employment, the registration of more ships in Singapore is likely to bring other benefits such as from bunkering and repairs. Therefore, it is proposed to give exemption from income tax to crew working on Singapore registered ships with effect from 1-1-74 (based on 1973 earnings). The loss of revenue resulting from all these tax exemptions is estimated at approximately $2 million. Mr Speaker, Sir, the financial policy which I have outlined in this Budget Statement has necessarily laid stress upon public sector programmes and expenditures.”
“It is now proposed to extend this exemption from stamp duty also to promissory notes issued by customers in favour of banks. This is to increase the variety and availability of money instruments and to promote greater sophistication of our money market. This exemption will come into effect immediately. (f) Non-collection of Withholding Tax on Negotiable Certificates of Deposit in Local Currency This does not, strictly, represent a tax concession, but I have included it here for completeness. If withholding tax on interest were collected at source, the introduction of the Negotiable Certificates of Deposit (NCDs) in local currency would not be possible as the marketability of this instrument would be affected. The NCDs could play an important role in the development of the money market and would be welcomed by both the financial sector and corporate investors. By purchasing NCDs, investors would be able to maintain liquidity and, at the same time, earn income. The NCDs will therefore be attractive for discount house business. The Monetary Authority of Singapore will allow financial institutions to issue NCDs in the local currency, with effect from 1-4-73, on the following conditions: (1) The issuing banks and discount houses will keep records of purchasers and sellers of NCDs. (2) The taxable income will be taken as the difference between the sale and purchase price of the NCDs. (3) The NCDs will have to be deposited with an authorised depository. (4) The issue of NCDs will be subject to Exchange Control Regulations. (g) Exemption of income Tax to Crew employed on Singapore Registered Ships In January 1969, the Singapore Registry of Ships was opened to foreign vessels. In order to attract such vessels, the initial registration fee was lowered to $2.”
“I propose therefore to remove the limit of one-sixth of assessable income with effect from 1-1-73. The limit of $4,000 will remain. This measure should encourage the public to save more either in private approved provident funds or in life insurance policies, in line with the Government's policy of encouraging savings. (d) Reduction of Stamp Duty on Marine Hull Insurance Policies At present, sea insurance policies are subject to stamp duty at a flat rate of 50 cents per policy except for hull insurance policies which are subject to ad valorem rates of 20 cents per $1,000 insured if the insurance is for less than three months; 30 cents per $1,000 if the policy is between three to six months and 50 cents per $1,000 if the policy is between six to 12 months. Hull insurance on a fleet of any substance will run into large sums and an ad valorem stamp duty can be very substantial. Singapore insurance companies are handicapped by the high rate of stamp duty here in competition against London insurance companies which do not have to pay stamp duties on sea insurance policies. To promote Singapore's development as a maritime centre able to provide essential facilities and services including sea insurance at reasonable cost, I propose to replace the ad valorem stamp duty by a flat rate stamp duty of $1 per policy for all sea insurance policies. This new rate of stamp duty will be implemented with immediate effect. (e) Exemption from Stamp Duty of Promissory Notes issued by Customers to Banks In my last Budget Statement, I announced the abolition of stamp duty on Negotiable Certificates of Deposits (NCDs), bills of exchange and promissory notes transacted from or through banks to promote money market activities.”
“With effect from 1-1-74 a taxpayer may claim a tax deduction from his income of $300 per dependent parent or grandparent. A taxpayer may claim up to a maximum of two dependent parents or grandparents, who are over 55 years of age, are supported by the taxpayer and are staying in the same household. If a parent is below 55 years but handicapped physically or mentally, he will also qualify for tax relief. (b) Tax Relief for Taxpayers who support Handicapped Children At present, the deductions allowed from assessable income in respect of children cease for those over 16 years old. This is so even when they are physically or mentally handicapped children who do not earn any income and who continue to depend on their parents. As it is fair that taxpayers should get some tax relief for supporting such children, I propose to provide that with effect from 1-1-74 taxpayers can claim allowance for handicapped children although they are over 16 years. (c) Income Tax Relief for Provident Fund Contributions and Premium on Life insurance Policies Under the Income Tax Act, an individual is allowed to deduct from assessable income contributions to approved provident funds and premiums on life insurance subject to a maximum of one-sixth of assessable income or $4,000, whichever is the less. With the increase in compulsory CPF contributions, it has been found that the one-sixth of assessable income limit has become restrictive, particularly for the lower middle income group. With the compulsory CPF contribution rate at 12 per cent, there would be left for deduction from assessable income only 4.67 per cent of his income from the amount paid for other approved private provident fund contributions and life insurance premiums.”
“Tax Policy and Changes Now I come to the tax measures I propose for this Budget. I have stated in the past that so long as the economy continues its robust rate of growth, it will be unnecessary to impose major or painful increases in tax rates although changes in such rates and additional taxation may from time to time be necessary or desirable to effect social or economic policies. Members, who are aware of this principle and who have looked at the balance of revenue and expenditure in the Main Estimates and noted the modest surplus of over $20 million which has been planned, will no doubt have already come to the conclusion that to provide sufficient funds to meet the current as well as part of development needs of Government there is little or no need for additional taxation. I am happy to be able to confirm them in this conclusion. In fact, the only changes I propose to make are in connection with the grant of the following tax exemptions or tax reliefs: (a) Tax Relief for Taxpayers who support Dependent Parents and Grandparents Last year, many Members suggested that reliefs should be given for the maintenance of aged parents and handicapped children on the grounds that the Eastern concept of filial piety requires, among other things, that children should look after their parents in old age. I recognise that with greater urbanisation and more limited living space, the Asian family unit is threatened with disintegration and that aged parents may be left on their own when they most need care and attention. I am therefore prepared to give some tax relief as an encouragement to taxpayers who look after their parents and grandparents where they are without work or income.”
“The healthy performance of income and payroll taxes reflects the growth in the economy with nearly full employment, with most individuals earning more and with most companies maintaining their profit margins. Revenue from property tax is expected to be $190 million during FY 1973 as against the revised revenue of $166 million. The high growth of this item reflects the robust growth of the construction sector and higher rentals. Revenue from indirect taxes and taxes on outlay in FY 1973 is expected to yield $545.0 million which represents an increase of $71.0 million or 15.0 per cent over revised estimates for FY 1972. This substantial increase is partly due to normal growth and partly due to the tax revisions introduced in October last year. The main increases are expected from customs duties on liquors, tobacco and petroleum products, other import duties and taxes on motor vehicles. Non-tax items are an important source of revenue; collectively, they contribute $570.7 million or 30.4 per cent of the total estimated revenue for FY 1973. Included under this category are the revenues from sales of goods and services of Government departments, land sales, investment of Government assets and currency surplus and other administrative fees. The main increases would be from land sales and sales of urban renewal sites, which together are expected to yield $102.0 million, due to more land being leased to the Housing and Development Board, the Jurong Town Corporation and the private sector for development purposes. The Special Aid of �50.0 million from United Kingdom will be fully disbursed by the end of 1973. The decline in revenue from Special Aid will, however, be compensated by anticipated increase in earnings from Government financial investments.”
“Health Whilst we may expect preventive measures against all sorts of pollution to result generally in a healthier people, we know that there will always be patients requiring diagnostic and treatment facilities. In FY 1973, additional provision has been made to strengthen and improve such facilities on two fronts. First, the medical specialities, namely, Nephrology, Plastic and Reconstructive Surgery, Neuro-Surgery and Cardio-Thoracic Surgery will continue to be developed. Some 130 new posts are provided for these. Secondly, hospital facilities will be extended. A small hospital will be opened at Changi, whilst the Alexandra and Sembawang Hospitals which were taken over from the British Armed Forces will be developed further. For FY 1973, the total outlay for the Ministry of Health including the Hospitals Division is 12.4 per cent of the total allocation for the Social Services sector. Revenue Estimates How is the Government expenditure to be financed? Details of the Revenue Estimates are given in the supplementary Memorandum* (*Paper Misc. 1 of 1973) to the Estimates. I need to give only a brief overall picture. For FY 1973, revenue is estimated at $1,874.9 million. This represents an increase of $199.7 million or 11.9 per cent over the revised estimates of $1,675.2 million for FY 1972. If the residual of $45.8 million from the former Currency Board's assets is excluded from the revenue for FY 1972, the revenue estimates for FY 1973 show a growth rate of 15.1 per cent. In FY 1973, income tax and payroll tax are expected to yield $554.0 million which is $110 million or 24.8 per cent more than the revised estimates of $444.0 million for FY 1972.”
“A substantial grant is provided to start the Board on a sound basis. At the same time, as I have mentioned elsewhere, Government will participate in joint-training schemes with well-established industries which have the know-how. A total of $8.7 million is provided in the Estimates for the recurrent and capital costs of such schemes. Environment Unfortunately, industrialisation and urbanisation can affect our environment adversely. Experience in some industrially-advanced countries shows that unless parallel action is taken to safeguard the quality of the environment even as industrialisation and urbanisation take place, anti-pollution action will be an uphill task. In the case of Singapore, the smallness of our land area makes avoidance of this problem all the more urgent. With the establishment of the Ministry of the Environment, greater attention can be directed towards this problem and measures to combat it can be better co-ordinated. One major anti-pollution programme undertaken by the Ministry of the Environment is the resiting of hawkers from backlanes and side streets to proper markets and hawkers centres so that proper health standards and cleanliness of hawkers can be enforced. This accounts for the substantial allocation for the construction of market/hawker centres and the traditional number of enforcement personnel for the Ministry. The limited land area in Singapore is again evident when we think of the great volume of refuse that has to be disposed of each day, using the existing method of dumping. The construction of an incinerator and a compaction plant will no doubt help alleviate this problem. For these, it is estimated that $1.20 million will be required in FY 1973.”
“This accounts for the substantial increase in provision for the building of new schools in the next financial year. Education and industrial training The construction of schools is only one aspect of the Government's investment in education. Last year I mentioned the revision of the terms and conditions of employment of various services including the Education Service. Following this revision, a major promotion exercise for school principals and teachers was launched and is nearing completion. It is hoped that this will give a welcome boost to the morale of the efficient officers and improve the quality of teaching. However, the shortage of manpower in schools persists. To alleviate the situation, the Ministry of Education has started a scheme whereby teaching cadets are recruited to study at the proposed Institute of Education and, in between, take on a teaching load in schools as a means of acquiring practical experience. Eventually, it should be possible to cut down on the use of relief teachers and achieve a more uniform level of competence amongst teachers. Substantial sums are provided for the development of new campuses for the University of Singapore and the Singapore Polytechnic. For works and buildings in FY 1973 it is estimated that the University campus at Kent Ridge will require $12 million and the Polytechnic Campus at Dover Road $2.5 million. As I said earlier, an increasing supply of skilled industrial workers is required to sustain and accelerate industrial growth. The Industrial Training Board will play a major role in this area. Not only will training at vocational institutions need to be expanded and upgraded but proper apprenticeship and trade-testing programmes will have to be planned and implemented.”
“The needs of economic development have therefore been fully taken care of. Of the remaining $1,953.0 million, Statutory Expenditure takes up $307.4 million. Defence and Internal Security take up another $632.1 million. This is 9.4 per cent less than the provision for FY 1972 reflecting the consolidation in the Singapore Armed Forces after the rapid build-up in recent years. Housing One key area of development is, of course, low-cost housing for the people. Despite the rapid rate of construction of low-cost apartments there is a long waiting list for such accommodation. The Housing and Development Board is stepping up its Third Five-Year Building Programme (1970-1975) to 30,000 units, a year. To finance this programme, substantial loan funds are required and have been provided in the Estimates for the next financial year. Of the total provision of $820.6 million of loan funds to statutory bodies and commercial and industrial enterprises, 5349 million or 42.5 per cent goes to the HDB. The development of low-cost housing estates also entails the provision of other basic facilities such as sewerage, schools and post offices. A number of sewerage schemes for which provision is made in the FY 1973 Development Estimates are specifically to meet the requirements of public housing estates. These include the Bedok Sewerage Scheme, Telok Blangah Sewerage Scheme, Kallang Basin Sewerage Scheme and the Woodlands Sewerage Scheme. With an increasing proportion of our population residing in large public housing estates, it becomes necessary to relocate schools so that our young students residing in such estates will not have to travel long distances between home and school.”
“The revised terms and conditions announced for the administrative and professional officers have not been incorporated in the Budget because they were finalised too late for entry, but Members should bear them in mind when considering the Budget. Mechanisation and improvement in work methods The increase in the volume, quality and scope of services provided by the Government sector requires an additional 2,154 posts for FY 1973. However, the search for manpower-saving methods of work has not been in vain. For example, the use of mechanical road sweepers made it possible to reduce the daily-rated work force in the Sanitation Services by 198. Similarly, through a change in work methods at offstreet car parks, it was possible to abolish all the 211 vacancies of car park attendant in the Car Parks Division. In addition, requests involving 1,038 positions, mostly of the clerical and daily-rated grades, were turned down. The departments which made those requests were either asked to redeploy their existing establishment through improved work methods or given provision to purchase labour-saving equipment. Estimates of Expenditure, FY 1973 The Memorandum* (* Paper Misc. 1 of 1973) on the Main and Development Estimates gives the detailed breakdowns of expenditure. I would like to underline briefly the major areas of Government endeavour, in providing a framework within which the individual provisions under each Head of Expenditure may be discussed later. The total outlay for the FY 1973, excluding the transfer from the Consolidated Fund to the Development Fund, is $2,773.6 million. Of this amount $820.6 million or 29.6 per cent is earmarked as loans to statutory authorities and industrial and commercial enterprises in which Government has a stake.”
“As a first step, I am presenting the FY 1973 Main and Development Estimates as a unified whole in one document. A common set of Heads of Expenditure is used for both types of Estimates. Further, the grants and contributions in the Main Estimates which were previously grouped under one Head of Expenditure such as Contributions and Charitable Allowances are now distributed to their respective Heads. I hope that with these rearrangements Honourable Members will have a clearer and more complete picture of the provisions under each Head of Expenditure. I should add that for the FY 1974 Estimates, my officials are exploring the possibility of restructuring subheads with the aim of streamlining and rationalising their presentation. At the last sitting of this House, I made a statement on revision of salaries and terms and conditions of service in respect of the upper echelons of particularly the administrative and professional officers in the public service. These changes are part of the overall effort to keep men of quality and integrity in the administrative machine so that it will be in trim and able to respond to the increasingly complex demands on the business of Government. Higher rewards, either monetary or otherwise, can only be justified for high performance and efficiency. The over-riding principle of award in the service will remain that of merit. I am confident that the civil service will continue to maintain its high degree of devotion and integrity and increase its level of performance, with more of the talented officers remaining in the Service.”
“Though there is no need to amend existing legislation on tax incentives because these by and large are adequate, I intend to apply existing legislation to give optimal advantage to industries which can introduce new technology to Singapore and are willing to train our workers in the skills demanded. Training costs may be regarded as investment in the same way as fixed assets for purposes of tax exemption periods for pioneer companies. For industries with high capital Costs and long gestation periods, the Government would apply the provision of the existing legislation with some flexibility in order to enable the companies to reap fully the benefit of the pioneer status granted to them. Together with the better performance I expect in 1973 from 1972's major growth sectors, i.e. construction, tourism, banking and port activity, the measures I have outlined should be sufficient to offset any uncertainties caused by the new international currency realignment, and to restore the rapid growth rate of Singapore in 1973 to its 15 per cent level. Budget And now we come to the Budget for the financial year 1973-74 which I shall hereafter for brevity call FY 1973. There are certain changes in the presentation of this Budget which I should like to explain. In my last Budget Statement I emphasised that the changing needs of the economy in the 1970s called for occasional reappraisal of the policies and priorities of allocation of funds, as well as a review of the administrative machinery including the present system of government budgetting and financial control. To facilitate the appraisal, action has been taken to modify the format of the Estimates so that the recurrent and development expenditures of various Ministries and departments can be examined in a coherent way.”
“In addition, negotiation is in progress with several multi-national firms to train jointly an even larger number of skilled workers. The Government on its part has earmarked $8.7 million for industrial training for the next financial year. These various training programmes, where necessary, would be streamlined further and modified to take account of changing needs from year to year. Our target is to reduce our present dependence on foreign workers for growth to more modest and manageable proportions by 1977. In a situation of nearly full employment, a goal of economic policy must be to upgrade the quality of the work in our enterprises by modernisation and expansion with higher investment per worker. Industries which do not carry out investment of more capital per worker, change production to higher quality products and improve their organisation, must expect to lose their workers to industries which do. Such industries will not be able to meet their wage increases every year which will be recommended by the National Wages Council because of their low productivity. Our National Wages Council must estimate the effects of their guidelines for last year's wage increase, and consider the increase appropriate this year inter alia, to achieve this objective and to induce a structural transformation in our industrial and other sectors. Too high an increase in wages, taking productivity into account, will cause unemployment. Too low an increase will increase the tightness of our labour market, and starve the flow o workers into the higher technology industries we want either by upgrading of present firms with lower technology, or by new firms from abroad being established.”
“The EDB will identify these firms and the Development Bank of Singapore Limited (DBS) will manage our investments. A fund of $100 million will be provided for this purpose to serve as a catalyst to use to best advantage our vast expenditure on training. Unfortunately, the still inadequate supply of skilled labour slows down the setting up of higher technology industries. In the interim, highly skilled foreign workers are, therefore, being admitted under our liberal immigration scheme and granted permanent residence for the economic benefit they are likely to bring to Singapore. The Government will continue to allocate a large part of its resources to technical education. Since 1962, and more actively in recent years, the Government through the Economic Development Board has been engaged in a multiple-programme approach to develop industrial training in modern manufacturing skills. Besides the Industrial Development Scholarship Scheme, we now have the Overseas Training Programme, the Joint Training Programme, the Apprenticeship Training Scheme and the Training Subsidy Scheme for sophisticated industries. The essence of all these schemes is that the Government is prepared not only to meet fully or partly the training costs of workers required by industries but also to create a poo1 of skilled workers available for future high technology industries setting up in Singapore. I am glad to report that at least two large multi-national firms, which have recently set up substantial operations in Singapore, have taken advantage of the joint training programme to train over 1,000 skilled machinists and toolmakers over a period of five years. This number is in excess of their own immediate requirements.”
“This is due partly to the pause in the investment commitments of the petroleum refining industry which amounted to $285 million in 1971. Investment commitments on shipbuilding and repairing yards also dropped sharply from $142.2 million in 1971 to $66.9 million last year. Electrical and electronic products, however, appear to be growth industries of the future, accounting for nearly 40 per cent of the new investment commitments made last year. Investment commitments in low technology industries dropped because no incentives are now being offered to such industries as a result of our more selective policies. Investments obviously require to be further stimulated but we would expect that so far as the petroleum and transport industries are concerned, we can be relatively confident that the decline is only temporary. Our projections based on the industries' own figures are for increase in investment in the former, to produce 1,000,000 barrels a day by 1974 or 1975, and in the latter, to produce by 1975 over $600 million in value of output. For these two industries our locational advantage will continue to favour maximum development. The future of Singapore is correlated to its being considered an ideal offshore manufacturing base for multi-nationals and their subsidiaries. In our overseas investment promotion, the Economic Development Board (EDB) will not overlook the smaller but no less important manufacturing firms. To encourage them to diversify their activities to Singapore, my Ministry will be prepared to invest equity up to 50 per cent, with the option for them to buy back a substantial portion later. The criterion will largely be whether these firms are able to make in Singapore, technology products which have not been made here before.”
“As regards Singapore trade, it may be of some interest to note the very mixed effects last year's currency realignment had on Singapore's external trade during the year. The revaluation of the Yen affected the size of Singapore's imports from Japan because these became dearer. On the other hand, the Yen revaluation did not lead to any increase in Singapore's exports to Japan. In fact, exports of petroleum products and rubber declined. The reason may be due partly to a dock strike in Japan which affected trade between Singapore and Japan adversely. The uncertainty of the Pound Sterling resulting in its eventual floating retarded Singapore's trade with Britain. The revaluation of the Mark led to a moderate increase in trade between Singapore and West Germany. The devaluation of the US Dollar resulted in an appreciable increase in trade between Singapore and the USA. Total trade for the first 11 months of 1972 increased by 28.3 per cent to $2,069.2 million. Imports from the USA increased by 20.7 per cent while our exports to the United States rose by 41.5 per cent due mainly to the export of semi-finished products back to the United States by subsidiaries of American companies in Singapore. Multi-national companies with their assured markets can surmount tariff and currency and other difficulties. Manufacturing Secondly, earnings from manufacturing which now constitute some 23.5 per cent of our economy, as measured by GDP figures, grew by only 20.1 per cent as against 25 per cent in 1971 and 27.5 per cent in 1970. The decline gives cause for some concern as to whether it evidences an adverse trend. Manufacturing investment commitments certainly fell from $716 million in 1971 to $252 million last year.”
“But some improvement in the prospects for international trade in 1973 should not be impossible. What are these prospects? Before the recent currency crisis, the economic outlook for the major industrialised countries for 1973 appeared bright. A forecast made by the Organisation for Economic Co-operation and Development (OECD) indicated that Japan should lead the group of industrialised countries with a real growth rate for 1973 of nearly 11 per cent, followed by the United States with 6.25 per cent, France and Canada 6 per cent, Germany 5.2 per cent, and Italy and the United Kingdom 5 per cent. These are high rates of growth compared with previous years. The recessionary tendencies which plagued economic conditions in early 1972 were therefore absent for 1973 and international trade seemed due for a correspondingly vigorous revival. Confirmation that 1973 would be unlike 1972 appeared in the form of high commodity prices for sugar, wheat, and other cereals, and also in a smaller but more important way for South East Asia, in rubber, rice and tropical products. While the prospects have now become dimmer because of possible disruption from parity changes and floats in world trading currencies, it is not unlikely that the international trading community has learnt how to live with such monetary disturbances. Trade will be much less affected than with the first unfamiliar realignment of currencies. For example, trading firms in Japan had for some time before the recent float been accustomed in their trading commitments to discount a 10 per cent revaluation of the Yen. They should adjust without difficulty to any higher rate.”
“I am asking the Securities Industry Council (SIC) to give the most careful scrutiny to all proposals for take-overs and mergers, particularly those where settlement is partly or wholly by an exchange of scrip. The SIC jurisdiction will cover public listed companies incorporated in Singapore as well as non-listed subsidiaries of these companies. In addition to these two specific measures, as Members are aware, on 16th February 1973, I introduced a Bill in Parliament designed to give the Government more effective control over the securities industry. The new Bill will replace the Securities Industry Act passed in 1970 but never brought into force. The Bill was drafted in consultation with the Malaysian Government and contains several improvements over the 1970 Act. The new Act will give the Government wide powers to investigate manipulations and other abuses in the market, which at present go unchecked, and to punish the offenders appropriately. Trade and Manufacturing A further distressing symptom is the unevenness in development of the economy. While almost all sectors grew satisfactorily, the development in the two largest, trade and manufacturing, has not been large enough for their effect upon total growth to have been most pronounced. Trade First, trade earnings now constitute 27.1 per cent of our GDP. It grew by only 7.3 per cent as against 7.2 per cent for 1971 when world monetary conditions were equally troubled. But the average growth under more settled conditions from 1966-1970 was 17.5 per cent. An extra 10 per cent growth in trade, which represents the difference between the 1972 growth rate and the 1966-1970 average growth rate, would have added some 2.7 per cent to our GDP growth rate. Continued stagnation, if not decline, is likely in the entrepot trade.”
“While the Government has no desire to cause a precipitous fall of the market, I wish to outline certain measures which could lead to an abatement of the feverish tempo. These measures are expected to have a speedy, effective and persistent impact on the market. One measure concerns credit facilities provided by banks and other financial institutions to operators in the stock market against the collateral of scrip. It is the practice of banks to offer credit limited to a certain percentage, varying with the philosophy of each bank, of the prevailing market price of scrip offered as collateral. Needless to say as the market spirals upwards, shareholders enjoy the use of additional funds to propel the market forward even faster. I am therefore asking the Monetary Authority of Singapore to draw up guidelines to ensure that prudent lending limits are observed. There will, of course, be consultations with banks and finance companies to consider lending criteria that are more realistically based and applied by prudent bankers and financiers. Obvious risks arise if unrestricted loans are made on the basis of inflated share prices in an overheated market. Should this measure be implemented, a large volume of funds available to operators will be immobilized. A feature of the current bull market, not only in Singapore and Malaysia but in nearby territories as well, is the spate of take-overs and mergers involving the exchange of paper. Not surprisingly, this paper merry-go-round is uncritically accepted when the market roars along. When the market is depressed, corn-panics practise the old-fashioned virtue of offering hard cash for acquisitions.”
“These measures will freeze about $250 million in the financial system and increase the cost of credit; they will also circumscribe the banks' capacity for credit creation. We have tried to organise our banking and money sector into external (Asian Currency Unit) and domestic operations, but it has not been possible to isolate Singapore entirely from the international money and price inflation which has such deleterious social and economic effects upon our people. The will to work hard and to save a large part of one's earnings can be sapped by a continual lowering of the purchasing power of hard-earned money, coupled with the belief that the ways of the speculator and the spiv with his get-rich-quick gimmicks bring easy returns. The increase in the money supply has partly contributed to the increase towards the end of the year of food and other commodity prices. But the main causes were more the vagaries of the weather and the sharp increases in costs of imports. But internal liquidity certainly has been responsible for the boom in land and property prices and the very unhealthy speculation in shares on our Stock Exchange. While public confidence in the performance and progress of the economy was an underlying factor, the steep climb in share prices in recent months was fuelled largely by strong speculative demand which was stimulated in part by the international currency problems. Some speculative interest can contribute to the growth of a healthy market. But excessive speculation will lead to disruption of the development of the Stock Exchange as an institution for funnelling private savings into productive investments. The Stock Exchange shows all the signs of an overheated market.”
“A number of symptoms call for particular attention. Inflation The first is that of increasing inflation. With its relatively strong currency, Singapore has had inflows of speculative funds which increased domestic liquidity beyond desirable limits. Domestic money supply increased by $76 million in the first quarter of 1972. Another $98 million was added to the money stock in the second quarter. The rate of monetary expansion for the year ending June 1972 was 24 per cent, which was unusually high as growth in money supply in previous years had been less than 20 per cent. In the third quarter, there was again a large increase of $115 million, bringing the total money supply to $2.1 billion in September. By the end of the fourth quarter in December 1972, total money supply had increased to $2.4 billion. While some expansion of money supply in Singapore must be expected and indeed would be required to meet the expanding needs of a fast growing country, it was necessary that measures be taken to prevent overheating of the economy. The Monetary Authority of Singapore (MAS) therefore tried in August 1972 to curb excessive liquidity by raising the minimum reserves requirement of banks from 3 1/2 per cent to 5 per cent. In December 1972, the MAS had to impose a 5 per cent special deposit requirement on the net foreign liabilities of banks. On 13th February this year, the reserves requirement has had to be raised again from 5 per cent to 9 per cent of their deposit liabilities. The Special Deposit - which banks have to place with the MAS against their net foreign liabilities was similarly increased from 5 per cent to 9 per cent.”
“This high growth rate was attributable mainly to the high level of banking activity, a feature of which was the inflow of funds from abroad. Total deposits showed an unprecedented increase of 26.5 per cent from $3,745.8 million in 1971 to $4,736.7 million in 1972. Bank loans and advances increased faster by 36.3 per cent from $2,615 million to $3,565.2 million in 1972. Total assets and liabilities of the Asian Currency Unit (ACU) rose steeply by 180 per cent to reach $8.4 billion at the end of December 1972. Hitherto, funds from the Asian Dollar Market were used mainly for short-term financing. A new phase of development occurred in December 1971 when the Development Bank of Singapore Limited (DBS) floated a 10-year Asian Dollar Bond for US$10 million. This was followed by an Asian Dollar loan of US$27.5 million to the Brunei LNG Company Limited. In October, the Singapore Government itself floated a 15-year US$20 million Asian Dollar Bond. The Institutional framework for operations of an active money market in Singapore was further strengthened last year. Three reputable London money broking firms were given approval to set up operations in Singapore. In November, three Discount Houses were also established, comprising joint ventures between local and foreign interest with majority participation by local banks, including the Post Office Savings Bank. Two new foreign banks were admitted into Singapore, broadening international connections of the banking system. Singapore banks also organised themselves for the more competitive banking environment ahead by merging into bigger groups. From the external and domestic economic situation in 1972 outlined in the Survey, what conclusions can we draw as to the possibilities for 1973?”
“Ownership of Dwellings The value added by ownership of dwellings to GDP increased substantially during the past two years. In 1971 the value stood at $275.6 million, an increase of 35 per cent. In 1972, the value increased to $362.3 million, a growth rate of 31.5 per cent. As a result, its share composition rose to about 5 per cent of GDP. Tourism The tourist industry continues to enjoy rapid growth. In 1972 an estimated total of about 780,000 tourists visited Singapore compared with 632,000 in 1971 and 522,000 in 1970. The rate of growth for 1972 was 23.4 per cent, as compared with 21.1 per cent in 1971. Earnings from tourism continued to increase to S 397.7 million in 1972, an increase of 21.4 per cent over $327.5 million for 1971. This resulted in a marginal increase in the share composition of tourism to GDP from 5.1 per cent in 1971 to 5.4 per cent in 1972. The average number of days the visitors spent in Singapore remained at about 3.9 days during 1970-72. Foreign Military Expenditure The withdrawal of the British military services in 1972 resulted in a dramatic reduction by 51.4 per cent in the preliminary estimates for foreign military expenditure to $204 million. The expenditure in 1971 was $420 million, which was the same level as in 1970. However, owing to the rapid growth in the other services sector, especially in banking and financial services, and transport sector, the dampening effect on domestic demand and employment had been partly compensated. Banking and insurance Banking and insurance services continued their increasing trends. By 1972 its contribution to GDP rose by 26.6 per cent to $152.3 million, as compared to 22.9 per cent in 1971.”
“From 1967 to 1971 the overall surpluses have been averaging about $500 million a year. In 1972, our preliminary estimates indicate a surplus of about $566 million which compares closely with the surplus of $578 million in 1971. Net earnings from services declined further to $624 million in 1972 from $660 million in 1971 and $738 million in 1970. The decline was attributable to the increase in payments for freight and insurance on merchandise, travel and other transportation and other services as well as to the reduction in receipts from government transactions as a result of the British military pullout. With the expansion of the tourist industry, receipts from travel and other transportation have been rising steadily. It increased by $237 million to reach $1,161 million in 1972. This has more than compensated for the adverse effect of the reduction of British military expenditure. Net non-monetary capital especially private long-term capital inflow has increased considerably by $111 million to $580 million in 1972. Government Services and Public Utilities In 1972, government services contributed $482 million to GDP, an increase of 12.8 per cent over $427.3 million for 1971. This rate of growth was slightly higher than the previous year's rate of 9.6 per cent. It is close to the average annual growth rate of 13.4 per cent for the past 12 years. The share of government services to GDP was maintained at 6.6 per cent for 1972, about the level maintained during the past decade. The main increases were in respect of expenditure on defence, education and health. Public Utilities had a steady growth rate of 15.2 per cent higher than the 9.8 per cent increase for 1971. The contribution of this sector was $175 million in 1972 and its share to GDP was maintained at 2.4 per cent.”
“2 per cent achieved in 1971. Exports rose at a faster rate of 14.3 per cent to $6,139 million, imports at a relatively lower rate of 10.1 per cent to $9,541 million in 1972. The corresponding rates in 1971 were 12.9 per cent and 15 per cent respectively. It is interesting to note that for the first time since 1966, the rate of growth of exports surpassed that of imports. This slow-down in the growth of imports was mainly on account of less imports of fixed vegetable oil, textiles, industrial machinery and road motor vehicles. Domestic exports, which rose by 29.7 per cent to $3,078 million in 1972, was again the primary cause of the increase in total exports. The comparable figure was $2,373 million in 1971. With the continued expansion in the local manufacturing industries and the efforts being made to open new markets overseas, this upward trend is expected to be maintained. On the other hand, re-exports or entrepot exports increased only marginally by 2.1 per cent from $2,998 million in 1971 to $3,061 million in 1972. Re-exports are expected to further decline in the future. Trade and Payments Balance In 1972, the recorded trade deficit amounted to $3,402 million, larger than the deficit of $3,293 million for 1971. The widening gap particularly in recent years has been aggravated by higher prices for imported goods. Singapore has run a persistent trade deficit which has been largely financed by earnings from `invisible' items and large capital inflows. Whilst there may be some concern for the consequences of our growing trade deficit on the balance of payments, there is basically no cause for alarm. Since 1966 our overall balance of payments has been registering surpluses every year.”
“9 per cent in 1968 to a low rate of 2 per cent in 1972. Domestic trade also registered a decelerating growth rate especially after 1970, from 18.1 per cent in 1970 to an all time low rate of 10.3 per cent in 1972. As a result of these decelerating growth rates, the ratio of entrepot trade to total GDP fell from 12.1 per cent in 1970 to 9.5 per cent in 1972 while for domestic trade the ratio fell slightly from the 18 per cent in 1971. Within the trade sector, the shift in emphasis in favour of domestic trade against entrepot trade may be noted. In 1960 entrepot trade constituted a larger share of 18.6 per cent of GDP as compared to a share of 13.2 per cent for domestic trade. However, the relative share of entrepot trade soon decreased to 10.4 per cent in 1966 whilst that for domestic trade increased to 15.7 per cent. By 1972, entrepot trade was further reduced to 9.5 per cent whilst domestic trade advanced to 17.6 per cent. In value terms entrepot trade contributed $694 million to GDP in 1972 compared with $1,288.5 million for domestic trade. The opposite was, however, the case in 1960 when entrepot trade amounted to $381.1 million and domestic trade $269 million. The growing importance of domestic trade has been the result of the rising purchasing power of the population and the increased earnings from the distribution of domestic export which has shown substantial growth during the past few years. As the economy further expands in the future, entrepot trade is expected to decline further in importance and this decline will be offset by the growth in the domestic trade sector. Total External Trade The total external trade expanded to $15,680 million in 1972, an increase of $1,645 million or 11.7 per cent over 1971. The growth rate, however, was lower than the 14.”
“8 per cent in 1966 to 7.5 per cent in 1972. This rapid growth rate was the second highest for the six-year period 1966-72-the highest growth rate was in 1971) when a rate of 47.2 per cent was registered. The industry continued to face the shortage of labour and materials which had a restraining influence on its expansion during 1971. Despite this, the industry managed to achieve a high growth rate which ranked as the highest of all major sectors making up the GDP. The slight acceleration in its growth during 1972 was primarily in respect of non-residential buildings in the private sector comprising mainly of shopping and office complexes which registered an increase of $79.1 million or 25 per cent. In the public sector, the high growth was mainly on account of the construction of public housing which recorded an increase of $133.4 million or 109.6 per cent. Trade The entrepot and domestic trade sector which had been growing at a decreasing rate since 1968 contributed $1,982.5 million to GDP in 1972. The contribution from this sector increased by only 7.3 per cent or $134.1 million in 1972 which was comparable to the rate in 1971 but slower than the average rate of 14.8 per cent for 1968-70. The causes for this were the pursuit of direct trade policies by neighbours, the general decline until the latter part of the year in produce prices especially rubber, the de-escalation of the Vietnam War and the uncertain trading conditions particularly in the first half of the year because of the recurring international monetary crises. Of the total increase in the trade sector, entrepot trade accounted for a mere $13.5 million while domestic trade accounted for $120.6 million. The entrepot trade component registered a decelerating growth rate from 31.”
“During the year 1972, increases in output and value added were registered in the major industry groups, such as manufacture of textiles and garments, electrical machinery, apparatus and appliances, and manufacture of transport equipment. Other industries recording favourable growth were the manufacture of other plastic products, and precision equipment and optical goods. The largest individual industry is still petroleum refining which accounted for 30.7 per cent of total output for the manufacturing sector. During 1972, however, as I have already mentioned, the growth in output and value added slackened to 7 per cent and 2.6 per cent respectively. The corresponding growth rates in 1971 were 27.2 per cent and 33.6 per cent, respectively. Although petroleum refining is a major activity in terms of output, in terms of value added the contribution of this industry to total value added is only 17.5 per cent. A marginal decrease of 6.3 per cent in output of the food industries was noted. This was largely on account of the slight drop in the production for export in cooking oil and coffee processing. In terms of value added, the electric machinery industry ranked the highest with 20.6 per cent of total value added, followed closely by the petroleum refining (17.5 per cent) and the transport equipment industry (which included shipbuilding and shiprepairing) with 14.9 per cent of total value added. The more traditional industries, namely food, beverages and tobacco, jointly accounted for another 9.4 per cent. Construction The construction industry has been growing rapidly since 1967. In 1972 the contribution by this sector to GDP increased by 36.4 per cent to $551.9 million as compared with 33.8 per cent in 1971. Its percentage share of GDP was thereby almost doubled from 3.”