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 25 of 30.
“Mr Speaker, Sir, may I, in concluding this "painless budget" Statement, pay a tribute to those who made it possible the workers of all ranks and occupations who so spiritedly and undauntedly met the challenges of the years since independence and by their constancy and adaptability to new circumstances, changed the difficulties and uncertainties caused by the loss of neighbouring markets upon separation from Malaysia and the loss of employment and foreign exchange upon the British military rundown into economic opportunities, opportunities which have now produced our present healthy financial situation. I am sure that in taking some of the fruits of our economic success for present consumption, they will all want to -do so with an eye for future consumption and with an appreciation of the need of investment for long-term returns. Sir, I beg to move.”
“This will ensure that poor beneficiaries inheriting small estates do not suffer by having to sell or mortgage their modest dwellings and possessions on the death of the bread-winner. Based on 1970 statistics, this remission would have benefited about 293 families out of 732 who paid estate duty. There will be no change for persons inheriting an estate worth more than $25,000 because it remains Government policy to narrow the income gap between the poor -and the wealthy. (6) Accelerated Depreciation for industrial Anti-Pollution Devices In promoting industrial growth, the Government has to keep in mind also the wider interest of the community. Though we want more industries and the job opportunities they bring, we do not want the pollution which is sometimes a by-product. Legislation for -control of various kinds of pollution has been enacted and the Government is now intensifying enforcement of its provisions. Though the onus lies with the owners of industries to control pollution, the Government is prepared to assist them by allowing accelerated depreciation over three years on capital investment in approved anti-pollution devices. With the introduction of this incentive, industrialists should also accelerate their plans to install pollution control equipment. The above measures are expected to cost the Government a total loss of revenue of approximately $3.5 million, but would bring compensatory benefits to Singapore.”
“Such exemption will give avoidance from payment of additional income tax to the large majority of owners who live in their own houses. Even the small minority who own and live in very large residences will enjoy a reduction in income tax which they can well afford to pay. (4) Increase in the remission of income tax on cost of maintaining of garden In 1970, the Government decided to remit income tax on expenditure up to $100 incurred by taxpayers for maintaining well kept gardens as part of the national campaign to make Singapore a clean and green city. This remission is confined to individuals; companies can already treat expenditure incurred on gardens like any other expense. The Government spends considerable sums of money in planting trees, flowers and bushes along roads and in public places. The public has responded to the campaign and Government's example by improving their gardens through planting flowers, bushes, hedges and creepers. As the garden city campaign must be further encouraged I propose, for the purpose of giving a remission of income tax, to increase the maximum from $100 to $300 per annum for the expenditure on gardens. Whilst the conditions of eligibility for remission would remain the same, I am prepared to consider easing the procedure for making such claims. (5) Remission from Estate Duty on Estates between $10,000 and $25,000 For the first $10,000, there is now no duty on the estate of a deceased person. As duty is payable on the market value of the assets, the appreciation in recent years has made even terrace houses and Housing and Development Board flats often worth more than $10,000 and, therefore, liable to estate duty. I propose to restore the position by remitting the estate duty between $10,000 and $25,000.”
“This relief is, however, limited to 20 per cent of the earned income, and subject also to a maximum deduction of $1,000. For the small taxpayer earning less than $5,000 per annum, however, the maximum deduction is determined only by the first limit of 20 per cent of the earned income. I propose to remove this 20 per cent limit so that the deduction will be of full earned income subject only to the maximum deduction of $1,000. This will benefit about 33,000 taxpayers. The proposal will be effective from this year of assessment. (3) Increase in the exemption from $6,000 to $12,000 in the Net Annual Value of owner-occupied residence for Income Tax purposes The rapid progress of the economy has resulted in an escalation in prices of landed property, particularly in the last two to three years, which, in turn, has brought about a general increase in rentals of houses. Following these increases in rentals, the revaluation of the annual values of properties has been undertaken by the Property Tax Department, but has been the cause of much complaint by owner-occupiers, some of whom have claimed that it may soon become too expensive to live in their own houses! The reason is that although no additional Property Tax is payable by owner-occupiers, some of them have become liable to income tax on the imputed income taken as the net annual value of the house in excess of $6,000. (The net annual value of the house is derived by deducting property tax, maintenance cost and interest charged on mortgage loans from the annual value of the house.) As it is the policy of the Government to encourage greater home-ownership in the Republic, it is proposed that the existing exemption of net annual value be increased from $6,000 o $12,000 for the purposes of income tax.”
“They will be tax reliefs relating to the following:- (1) stamp duty on certain negotiable certificates of deposits transacted through financial institutions: (2) income tax allowance for earned income for low income salary earners; (3) income tax on the imputed income of owner-occupied houses, other than toe largest homes; (4) income tax deduction of expenditure on maintenance of gardens; (5) estate duty on small estates; (6) income tax depreciation allowance on expenditure by industries on antipollution devices. Details of the tax reliefs are as follows: - (1) Abolition of Stamp Duty on Negotiable Certificates of Deposits and Bills of Exchange It is the Government's intention, as-part of the plan for assisting the development of Singapore into a regional financial centre, to promote a short-term money market. This is at present non-existent because the stamp duty on Bills of Exchange and Negotiable Certificates of Deposit is inordinately high. In the leading international financial centres, either there is no stamp duty, or the rates are nominal. I propose therefore to remove the stamp duty on Bills of Exchange, Negotiable Certificates of Deposit and allied forms of promissory notes which are transacted from or through banks. The expected reduction in revenue from such removal is estimated at $2.5 million per year, but it is hoped that it will be offset by returns in increased economic activities and in earnings of the financial institutions. (2) Earned income Relief up to $1,000 under the Income Tax Act At present, in addition to personal allowances, the Income Tax Act allow a taxpayer a deduction for earned income which is defined as including income from salaries, partnerships and other sources except income from capital such as rents, dividends and interest.”
“The main chances affecting the yield from "Other Sources" are due to variations in the group of items covered. The main items that have been excluded from this category are receipts from Telecommunications Services and Japanese Special Aid, both of which accounted for the substantial amount of $54 million in revenue last year. The decline in revenue due to this has been partly compensated by an increase in revenue from interest on investments and currency surplus which will jointly yield an additional revenue of about $33.1 million in 1972-73. Tax Changes Finally, we have to consider the question of what additional taxation should be imposed. In the past, our tax policy has been very simply the stimulation of rapid economic growth to lay a wider tax base which would provide increased revenue sufficiently to meet new requirements for Government expenditures. This has been almost completely successful. Since independence, we have had need, in our direct taxation, only in 1966 to increase the maximum rate of personal tax from 50 per cent to 55 per cent for incomes above $100,000. In indirect taxation, only four minor taxes were introduced and three existing ones were revised, these being duties on tobacco, beer, stout and samsu. For the next financial year also, I propose to continue this policy. No new taxes are, therefore, being introduced. There will, however, be a number of changes which will assist Government's economic and social policies.”
“7 million which is an increase of $106.7 million or 22.5 per cent over the estimated revenue for 197 1-72. The main items in this category are income tax and property tax. The yield from income tax is expected to increase by about $70.0 million and from property tax by $31.7 million. This represents an increase of about 25 per cent over the estimated revenue for 1971-72, and is largely the result of the satisfactory growth rate of the economy by about 14 per cent in 1971. Revenue earnings from indirect taxes and other taxes on outlay are expected to bring in an additional yield of $26.0 million. The main items included under this category are customs and excise duties and revenues from motor vehicles' registration and licensing fees. Revenue from customs duties is expected to yield an additional amount of $18 million or an increase of 6.4 per cent over the estimated figure for 1971-72. The growth in earnings from this group of items is dependent on the overall growth in consumption of petroleum, liquor and cigarettes, and reflects largely normal growth rates. Protective import duties which accounted for part of the increases in previous years have declined in importance due to the revision of duties and the removal of tariffs on many items. The other main sources of revenue include sales of goods and services by Government Departments, sales of land and land premium, income from property and from investments, and earnings from currency surplus. This group of items is expected to bring in some incises in revenue in the new financial year. The changes in yields from these intern, however, vary significantly from item to item and are dependent on actual plans of operations rather than on normal growth patterns.”
“This includes the park developments at Mount Faber, Central Park and East Coast Park. The provision for urban and rural-services has increased to $3.25 million this year, as compared with $2.48 million for 1971-72. More funds are required in 1972-73 so as to provide kampong roads, street lighting, drainage and extension of public utilities supply in the rural areas. An interesting project of immense educational value is the construction of the proposed Science Centre at Jurong. This Centre will be opened throughout the year and should stimulate and educate our students in the science and technical streams. The greater portion of the loans to the statutory boards in the social sector goes to the Housing and Development Board. The Board has embarked on its Five-Year Building Programme with the target of building 100,000 units of flats during the plan period. For 1972-73, a total of 20,000 housing units is expected to be built. To achieve this target, an amount of $180 million has been set aside as a loan to the Board in 1972-73. The provision for defence and public administration amounts to $145.21 million, of which $11.23 million is for public administration. We must defend what we have built. The main share of the provision for public administration goes to the development of the Subordinate Courts New Building at Havelock Road, and improvements to other Government buildings. Estimates of Revenue I come now to the Estimates of Revenue. Without additional taxation, or changes in present rates, the estimated revenue for the financial year 1972-73 is $1,449.1 million. This represents an overall increase of $142.1 million or 10.9 per cent over the estimated revenue of $1,307.2 million for 1971-72. The estimated revenue yield from direct taxes is $537.”
“The relatively low level of expenditure for Health development projects in the past few years has reflected the emphasis on industrialisation and defence. The 1972-73 provision will cater for more sophisticated health services as well as improved environmental health services. The Government has decided to provide highly-skilled medical specialists with the necessary facilities to make Singapore into a medical specialities centre in this part of the world. The first phase of this programme is the implementation of the interim development of four medical specialised units, Nephrology, Neurosurgery, Cardio-Thoracic Surgery, and Plastic and Reconstructive Surgery. Work on them will be completed in two years. Funds are also provided under Public Health for a pilot project for mechanisation of street cleansing operations and for additional vehicles required to provide efficient refuse collection services. A considerable sum is also being provided to develop hawker -centres and markets to resite the unhygienic stalls and markets now proliferating in various places in the city. The development of sewerage facilities in 1972-73 accounts for $20.05 million. Modern sanitation and better-sewerage facilities are necessary for better environmental health to check pollution and increase our water resources. The system will be extended throughout Singapore as soon as possible. Government has, under the Garden `City Campaign for the past two years, developed a great number of open spaces into beautiful parks and spots. Trees and shrubs have been planted .along the main thoroughfares. Government is continuing its efforts in its Garden City Campaign for which a sum of $6.30 million is earmarked for 1972-73.”
“This is attributable to the fact that as more of these enterprises become well established, they are better able to draw upon their own resources and require less external finance for their development programmes. A total sum of $263.33 million is provided for the social sector as compared with $161.74 million provided for 1971-72. Of this provision of $263.33 million for 1972-73, $77.33 million is for direct expenditure on development projects and $186.00 million is for loans to statutory boards in the social sector, including $180.00 million for the Housing and Development Board. The distribution of $77.33 million for direct expenditure by Government Ministries is as follows:- $ million Education 23.95 Health 12.71 Sewerage 20.05 Community & Welfare Services 20.62 -------- $ 77.33 ======== Though the provision for Education has dropped slightly from $27.14 million for 1971-72 to $23.95 million for 1972-73, emphasis continues to be placed on expanding the level of technical and vocational education in order to meet the increasing demand for skilled, technical and professional manpower. The past few years have seen the restructuring of secondary education towards technical and vocational education. This emphasis will be extended to education at the tertiary level. Thus a great portion of this year's provision is for development of the new University of Singapore campus at Kent Ridge in Pasir Panjang, development of the new campus for the Polytechnic, and expansion at the Nanyang University and the Ngee Ann Technical College. The provision for Health projects has increased by more than two-fold from $5.57 million in 1971-72 to $12.71 million for 1972-73.”
“In the intermediate phase, a new passenger terminal, a freight terminal, a Boeing hangar, the extension of the runway, new parking aprons and various navigational and landing aids will be provided. This phase is scheduled to be completed by 1976. It will require a sum of $105 million. An Asian Development Bank Loan of $60 million has already been obtained. The increasing volume of vehicular traffic is a never-ending problem, not -only of traffic flow, but also of availability of parking space particularly in the city. This necessitates improvements to existing roads and construction of new roads and car parks. Thus, a substantial provision is made for the vote on Transport and Communications for 1972-73. Land development constitutes a sizable part of direct expenditure by Government Ministries in the economic-sector. With limited land resources, it is imperative that we should put them to utmost use. Part of the provision for land development is for the acquisition of land required in connection with various public development projects. Our major reclamation scheme, the East Coast Foreshore Reclamation Scheme, is now in its third phase of development. We seek to build what we have not been endowed with by Nature. Loans to statutory boards falling under the economic sector amount to $221.10 million for 1972-73. These comprise mainly loans to the Jurong Town Corporation, the Public Utilities Board, the Singapore Telephone Board and to industrial and commercial enterprises wholly or partly owned by the Government. The provision in respect of this -for 1971-72 was $248.55 million. Loans for industrial and commercial enterprises, however, show a reduction amounting to $96.10 million for 1972-73 as compared to $198.55 million for 1971-72.”
“Development Estimates I now come to the Development Expenditure for 1972-73. A total amount of $750.77 million is provided as compared to $635.96 million and $442.59 million provided for 1971-72 and 1970-71 respectively. The major portion of the provision for 1972-73 goes to the economic sector amounting to $342.23 million or 45.6 per cent of the total provision. Out of this, 35.4 per cent or $121.13 million is for direct expenditure by the various Ministries on development projects. The remainder is for extending loans to the statutory bodies and companies wholly or partly owned by the Government. For the financial year 1972-73, the provision for direct expenditure on development projects in the economic sector is distributed as follows:- $ milllion Tourist Infrastructure Development 10.26 Transport and Communications 44.32 Land Development 64.90 Primary Production 1.90 ------ $ 121.13 ====== Work at Sentosa on the Golf Course,. Swimming Lagoon and Gun Museum are now well underway. The next financial year will see the development of the Coral and Shell Museum, the Open Air Theatre, the Cable Car Landing Plaza and other amenities. An amount of $10.26 million is provided to finance the development of Sentosa. In transport and communications, a major development project is the expansion of the Singapore Airport. Since its inception in 1955, the Singapore Airport has seen tremendous increases both in number of passengers and volume of freight. To cater for the rapidly increasing number of passengers and volume of freight the Airport has to handle, a development plan has been formulated. The immediate phase involves the extension and renovation of the existing passenger terminal building. It has now been completed.”
“The Public Health Engineering Branch will also undergo some fundamental reorganisation and the scope of its work will be extended to cover additional areas of environmental control. The Public Cleansing Service has been provided with additional funds so as to extend its coverage to the former British Armed Forces areas. Home Affairs The Ministry of Home Affairs is now responsible for the additional Departments of the Singapore Citizenship Registry, the National Registration Office and the Registry of Births and Deaths which were formerly under the Ministry of Labour. The Prisons Department will also be transferred to the Ministry of Home Affairs in the new year. Further, a reorganisation of the Police Force, after the Lee Soo Ann Report, has been undertaken. This will improve the quality of the rank and file of the Police Force. There will also be a substantial increase in the use of modern methods and techniques for combating crime and an increasing use of vehicles, radio and electronic equipment for the routine patrol system. The Vigilante Corps has also been expanded to provide for the establishment of a Civil Defence Organisation and the Auxiliary Fire Fighting Service and to undertake the training of National Servicemen in these disciplines. Defence Under the Ministry of Defence, the increase in the block provision for Armed Forces is based on the need to continue the build-up of the Services, particularity that of the Air Force and the Navy. A general review is being undertaken of the administration of the Ministry. The aim is to provide a permanent corps of Administrative and Executive Officers to replace the military personnel now engaged in administrative duties and who could be better used in military functions.”
“In order to provide an efficient and co-ordinated programme of training of technical personnel for the industries, it is proposed to set up ,in the new financial year the Industrial Training Board, with the responsibility for all matters relating to industrial training and the administration of industrial training institutions including the vocational institutes and the industrial training centres. Greater emphasis will be placed on the upgrading of skills through apprenticeship schemes and joint industrial training programmes particularly for skills relating to precision industries. Ministry of Health Under the Ministry of Health, a total provision of $114.4 million has been made as compared to $98.2 million in 1971-72. Of the increase of $16.2 million, $7.6 million has been allotted to the Hospitals Division and $3.6 million to the Public Health Division. The major increases in the Hospitals Division are associated with the implementation of the first phase of fostering medical specialities, the general improvement of Medical Services and a gradual expansion in the services provided by the Alexandra Hospital and the Sembawang Hospital which were recently taken over from the British Services. The training of Medical Officers in the various specialities has also been stepped up and an annual complement of about 50 doctors will undergo a two-year training in selected specialities. Under the Public Health Division, the general emphasis is on the provisions of improved environmental health services and the extension of the coverage of such services to all parts of the Republic including areas formerly occupied by the British Services.”
“Ministry of National Development The main changes in the allocation for the Ministry of National Development have been the result of the expansion in the functions of the Primary Production Department and the increase in area of responsibility of the Public Works Department. The Primary Production Department has embarked on a scheme for farm licensing and control of farm structures as part of its overall programme for more intensive agricultural development and as a means of farm sanitation and pollution control in the rural areas. The Public Works Department has now taken over the responsibility for the maintenance of the Jurong Industrial Water Treatment Works and the three aerodromes at Changi, Seletar and Tengah. As a result of the takeover of the areas previously occupied by the British Armed Forces, there has been a substantial increase in the work of upkeep and maintenance of grounds and buildings and in maintenance costs. The Sewerage Branch has commissioned three new sewerage pumping stations and has expanded the treatment works at Serangoon. The Parks and Trees Branch will also be expanding its area of activity with the opening up of new parks and wooded areas. Ministry of Education The provision for the Ministry of Education has increased from $191.03 million for 1971-72 to $209.7 million for the coming year. The main changes of significance are the restructuring of the Education Service, the continued expansion of the technical stream of education and the proposed separation of the functions of vocational and industrial training from that of the general stream of school education.”
“A study has been made by the newly appointed Labour Adviser to the Ministry of the scope and functions of the Labour Exchange and his recommendations that the Labour Exchange should be expanded to play a more effective role in the deployment and utilisation of labour force as well as in the provision of labour market information and vocational guidance have been accepted in principle and will be implemented during the course of the coming year. Ministry of Communications The main Departments under the Ministry of Communications where significant changes have been made are the Postal Department, the Registry of Vehicles and the Telecommunications Department. A general review of the overall working of the Postal Department has been undertaken with the assistance of the National Productivity Centre and a series of studies on the reorganisation and modernisation of the Postal Services has been completed. The recommendations of the initial reports for the mechanisation of the delivery services, and the use of mechanised means for the handling of mail and parcels as well as the resiting of the mail handling sections have been partly implemented in 1971-72 and will be completed in 1972-73. In the Registry of Vehicles, the work of computerisation of drivers' licences has been completed and plans for the computerisation of motor vehicles' records have been finalised and will be implemented in the new financial year. Although the cost of computerisation and conversion of records is estimated at $206,650, this will result in some saving of manpower and the provision of a more efficient service to the public. The Telecommunications Department has been reorganised and will be converted into a statutory authority on 1st April, 1972.”
“14 million as compared to $131.42 million for 1971-72 for Economic Services is due to the deletion of the provision of $19.4 million for the Telecommunications Department which is to become a statutory authority early in the new financial year. The main Heads of Expenditure which have been allotted sizable increases in funds are: Defence ($72.8 million), Education ($18.7 million), Health ($16.2 million), Home Affairs ($7.1 million) and National Development ($3.3 million). There has been an increase of $12.9 million for Statutory Expenditure and the Contribution to the Development Fund has also been increased by $20 million. At this stage, I would like to mention some of the significant changes in the allocation to the major Ministries resulting from increases in the level of activity. Ministry of Labour A proper assessment of our man-power needs and resources and the formulation of an effective plan for the optimum utilisation of available labour will need to be made by the Labour Ministry. A general revision of its scope and functions is now in progress. For the coming year, additional provisions have been entered for the setting up of regional offices in Alexandra, Toa Payoh, St. Michael's Estate and Jurong Industrial Estate. The Factory Inspectorate will also be expanded and its staff augmented for more effective supervision of the factories and establishments to ensure compliance with industrial safety regulations. The Industrial Health Unit at present shown under the Ministry of Health would also be transferred in the new financial year to the Ministry of Labour.”
“A Management Services Unit has been formed in the Treasury which will systematically study Government Ministries and Departments and will suggest improvements in organisation and methods. It will do this in co-ordination with the Electronic Data Processing Unit in the Ministry of Finance which has been reorganised and reconstituted as the Computer Services Department to cope with the increasing demands for computerisation from all Ministries. Where necessary, existing computer facilities will be further augmented. The present overall system of budgeting is also being reviewed. Some of the more useful and desirable features of what is known as the Planning, Programming Budgeting System may be introduced. The P.P.B.S, provides a more systematic means of assessing requirements and evaluating performance in terms of effectiveness and costs. A feasibility study has been made. The service of a U.N. Technical Assistance Expert is being sought to work out a programme of implementation in stages. Ordinary Estimates of Expenditure The overall Budget provision for Recurrent Expenditure for 1972-73 is $1,448.69 million which is $141.88 million or 10 per cent more than the provision for 1971-72. In comparison with the estimated revised expenditure for 1971-72, the provision is only 6.1 per cent higher. Of the total provision, 38.9 per cent is for Defence and Internal Security, 26.6 per cent for Social Services, 15.1 per cent for Statutory Expenditure and 7.8 per cent for Economic Services. The allocation for Defence has increased by 16.5 per cent compared to the provision for 1971-72 while that for Social Services has increased by 12 per cent. The total allocation for Economic Services does not show any significant change. The somewhat lower figure of $113.”
“If our economic growth has been sustained in recent years at an unprecedented high level, if our economy today is buoyant and full employment is a reality, a major part of these achievements can be attributed to our efficient public service. If we do not wish to see a collapse of this service, an improvement in terms and conditions of employment must be made. At the very least, therefore, we must do what we can to prevent the gap in pay from widening. The payment of a non-pensionable annual allowance which the Prime Minister has already announced two days ago is the first step towards this end. In addition to this allowance, it is intended that the process of rationalisation and restructuring of the salary scales of the Civil Service will continue. Some of the disparity in wages between daily-rated skilled workers in the private sector and in Government has been under examination for some time by a Review Committee on Daily-Rated Employment. We shall effect necessary adjustments in wages, taking into account the - annual allowances - already -announced. The Public Service Commission will, moreover, continue to conduct regular and frequent promotion exercises in order to ensure that the brightest and most promising officers will receive accelerated promotion. Now, the day-to-day operations of Government. The Government intends to gradually introduce more modern and efficient systems and methods of operation. Greater emphasis will be placed on mechanisation. Budgetary support has been given for the increased use of office machines and other mechanical aids in the day-to-day operations. Increases in personnel have been kept to the minimum. Consideration has also been given to the computerisation of operations of Government Departments.”
“A systematic reappraisal has been made of the terms and conditions of service of various services, notably the Technical Services, the Education Service and the Police Service. There has also been a general reorganisation of the Administrative Service under which, in future, all recruits will be appointed as Cadet Trainees for a period of two years during which time they will be given specific postings covering different spheres of Government administration and operations. A scheme for the training of Medical Officers in the various medical specialities has also been introduced. Provisions for overseas scholarships, training and study awards have also been substantially increased in the new financial year. All these measures are designed to bring about not only an improvement in the quality of Civil Service personnel, but also to ensure a permanent Service with a lower turnover of experienced staff. However, in an expanding economy and with a manufacturing sector, particularly, growing in size and complexity, managerial talent is in short supply. Handsome inducements are often offered to attract the best. Consequently, what appear to be fresher and greener pastures often tempt some men of experience and promise from the Civil Service to the private sector. Whilst some mobility must be expected, the public service is already suffering from an acute shortage of experienced administrators and professional cadres, and the continuing loss of trained men must be checked. The Government is aware that one difficulty in retaining them is due to the widening gap in pay between the private and public sector for men of comparable grades. Our public service is widely recognised, and rightly so, as second to none in this part of the world.”
“The changing needs of the economy in the 1970s will require the Government to reappraise, from time to time, the policies and priorities for allocation of funds as well as manpower resources to the various sectors. Further, there is a need also to review our administrative machinery including the present system of Government budgeting and financial control. The emphasis in the present system has hitherto been on the balancing of the budget and the diversion of more of our resources towards economic development and, latterly, also towards defence. This system has served us well in the 1960s during the initial phases of our economic development. In the l970s, however, with rising labour costs in a situation of full employment, the budget should be used also to effect mechanisation and introduce other labour-saving methods, and generally to modernise and improve Government administration. Set up originally to provide minimal services at least cost, many of the departments are not equipped for developmental activities or for active interventionist policies and are unable to cope with the increasing new demands for their services. During the current financial year, therefore, a number of organisational and structural changes have been introduced in several Ministries. In addition, the following statutory authorities have been or are in the process of being set up by legislation -the National Sports Promotion Board, the National Stadium Corporation, the National Statistical Commission, the Post Office Savings Bank Board, the Telecommunication Authority of Singapore and the Commercial and Industrial Security Corporation. Various measures have also been introduced for the general improvement of the terms and conditions of service in the Civil Service.”
“Hence, measures are being introduced to stimulate our banking sector and the capital and money markets. To bring international participation in our financial centre, we have approved a number of licence for foreign banks to operate in Singapore and will be liberalising our exchange controls further. These elements comprise our development plan for the l970s. In broad terms the goal is to transform Singapore within ten years, at an economic development growth rate of 15 per cent per annum, into a regional centre for brain services and brain service industries. Success will depend upon the quality of our people, their capacity to improve themselves through education, training and experience. This is an expensive process which can only be carried out if population growth is kept down to almost Zero Population Growth. Then we can the better afford to attract expertise and technology from outside. Budget Estimates 1972-73 Let me now turn to the main business of the Budget proposals for the financial year 1972-73. The detailed estimates are contained in two documents*(*Papers Cmd. 3 and 4 of 1972.) - the "Estimates of Revenue and Expenditure" and the "Development Estimates". As in past years, a Treasury Memorandum+(+Paper Misc. 1 of 1972.) on each of the Estimates with detailed explanatory notes on the various Heads of Expenditure has also been circulated to Members. It is unnecessary therefore for me to do more than make general observations on those areas of expenditure which involve changes in policy and comment on broad policy measures for greater efficiency and effectiveness in government administration.”
“Under the development plan, emphasis will be placed on developing tourist infrastructure with the aim of developing Singapore into an "entrepot" centre for tourism, and as a centre for regional - and international conventions. The development of Sentosa will be the major undertaking under this heading. Over the coming 10 years, 31 Government projects and eight projects by the private sector are planned for the island. A corporation to be known as the Sentosa Development Corporation will be established shortly to undertake the entire development and to turn Sentosa into a resort of quality in a tropical setting. As for the promotion of conventions, the Tourist Promotion Board has set up a special conventions unit specifically for this purpose. Our plan to develop as a centre for brain services will require the examination and modification of present taxation laws. This will help the overall development of Singapore as a financial and monetary centre. A committee of taxation experts has already been convened to look into the possibility of using tax measures to attract cram service industries and industries with very high-level technology and to promote the growth of a regional money market. The present promotion programme of the Economic Development Board is geared to attracting high-level technology industries. This will be indemnified. Besides this, we are promoting a! types of brain services in Singapore -engineering and consultancy, marketing, physical planning and development, international sales and servicing, education, medicine and especially, banking and financing services. Under the programme, Singapore wilt develop into an international banking and financial centre.”
“As to infrastructure, much has already been accomplished in the last few years. Under our development plan, further improvement and expansion of infrastructure for efficient distribution of goods and services from Singapore is vital. The transport and communications sector in our economy will have to be strengthened. We have already taken steps in this direction. Capital expenditure for port development will amount to $153 million in 1972 and this will be spent on development of containerizations at the East Lagoon, warehousing at Pasir Panjang and the Ocean Terminal at Tanjong Pagar. With regard to air communications, Mercury Singapore Airlines will be taking over, on payment, substantial assets and facilities from Malaysia-Singapore Airlines and will continue to expand and maintain their services. We are also looking into improvements and developments of the airports and related services. As regards transportation on land, a feasibility study on a Mass Rapid Transport System will be undertaken shortly with the United Nations Development Programme and World Bank assistance. It is hoped that the study will provide the guidelines in solving the increasing congestion on our roads. In the electronics and telecommunications sector, an autonomous statutory corporation will be set up this year to take over the functions of the Telecommunications Department, A 10-year programme has been formulated to meet the Republic's telecommunications requirements, particularly for telex machines and telex services. Further - development in the telephone services is also envisaged.”
“Mr Speaker, Sir, just before the tea break, I was saying that arrangements with three other international companies for similar joint industry/Government training centres-are also expected to be concluded within the next three months. These centres, will be located either within the premises, of other vocational institutes or adjacent to the plants themselves. The total annual intake of these three centres will initially be 268 trainees. Under the-scheme, the Government will contribute 50 per cent of training costs provided the organisation assisted, trains twice-its requirements and releases 50 per cent, of the trainees to Government for upgrading skills. In this way, we hope to produce sufficient numbers of well-trained persons. As for immigration, our procedures are undergoing streamlining to ensure that persons who can contribute to the economy are not turned, away. As regards science and technology,, the aim is to promote practical research and development both at the universities-and by international and multi-national companies. The Universities of Singapore and Nanyang as well as the Polytechnic-and Ngee Ann Technical College will, under our strategy have a major part to play in research and development. We will further develop the Singapore Institute of Standards and Industrial Research. We are now considering the setting up of a Centre for Applied Research under the auspices of the Ministry of Science and Technology whereby the best of our scholars from the institutions of higher learning and private industry can be drawn upon to, provide research and consultancy services, both within and outside Singapore. Through selective use of taxation, we hope, too, to encourage international companies to conduct their research and development here.”
“The Technical Education Department will be finalising arrangements for the apprenticeship schemes to be implemented in co-operation with the longer established firms in Singapore. With regard to overseas training schemes, some are sponsored by international companies with operations in Singapore. 412 trainees have already completed their training and returned to Singapore. Today, there are 316 such trainees, mostly in Germany and Japan. It is expected that, in the course of this year, the companies will send a further 400 abroad. Apart from these, which are sponsored by the manufacturers, we have also emplaced 53 trainees in precision engineering and other metal trades in apprentice programmes in Europe, while the Economic Development Board has received firm offers for a further 206 to be sent this year. For training at home, under the joint industry/Government training programmes, the first centre will be located at the Jurong Vocational Institute and is expected to have its first intake of 50 trainees in a few months' time, with the intake increasing to 100 a year from the third year. Arrangements with three other international companies for similar joint industry/Government training centres are also expected to be concluded within the next three months.”
“With full employment, a goal that seemed unattainable in the 1960s, labour will become an increasingly scarce resource, and the development plan will also seek to maximise the income derived by the use of labour through the expensive development of high skills and productivity. The development plan will be supported by a programme for public sector action, which will not be to a rigid framework but will be flexible enough to accommodate contingencies and unforeseen circumstances. Five basic elements or components to the plan have been identified for special attention and for implementation in the public sector programme. These are manpower, science and technology, infrastructure, taxation and promotion. With regard to manpower, the intention will be to build up a large pool of professional and technical personnel through upgrading of local talents and skills, and selective immigration. Our industrial training policies will be geared towards producing the necessary skills, while our immigration policies will be more liberal in selected categories of skilled workers. We shall presently be setting up an Industrial Training Board to co-ordinate and rationalise all industrial training. Industrial training would be both institution based and industry-based. The institution-based industrial training will seek to improve technical teaching in primary and secondary schools, vocational and technical institutions as well as to provide technical teacher-training. The industry-based training programme will include apprenticeship schemes, off-the job industrial training, overseas training schemes and joint industry / Government training.”
“However, the achievement of higher levels of sophistication in industry is correlated to a diligent and disciplined striving for higher productivity. This requires not only management efficiency as well as labour productivity, but also an equitable sharing of the fruits of greater efficiency and upgraded skills in an orderly manner. Among other matters, the determination of equitable shares will now be the concern of the National Wages Council which has been set up with tripartite representation from labour, employers and the Government. The Council's role will include assisting in the formulation of general guidelines on wages policy, recommending necessary adjustments in wage structure, with a view to developing a coherent wage system consistent with long-term economic and social development, and advising on desirable incentive systems for the promotion of operational efficiency and productivity in various enterprises. The promotion of higher technology and the work of the Council both fall within Singapore's long-term objective or strategy for the promotion of modernisation in all sectors of our economy and its transformation into an increasingly outward-looking cross-roads of international economic activities. Such a long-term objective would be assisted by a plan for long-term development. I have accordingly asked my Ministry to formulate such a plan for the l970s. In order that targets for the plan should be set which are sufficiently ambitious and yet perfectly capable of realisation, the plan would project a sustained rapid economic growth of 15 per cent per annum with a doubling of the per capita income by 1975, on a population growth checked by sensible small families.”
“In the face of the general uncertainty and of the more restricted trade and economic growth rates in other countries, sustained growth for Singapore in 1972 may, as during the last year, lie largely with our manufacturing sector and its ability to export its products. Our hope is that our vulnerability to these adverse influences has been avoided, to some extent, by our selection and promotion, in accordance with our optimum investment policy, of multi-national manufacturing companies having a scope for progressive growth in technological content in their manufactures, and, consequently, a greater capacity for development of modern skills at all levels. Unlike simple manufacturing or assembly-type industry depending upon low cost labour, these industries are less likely to be displaced by sudden competition in their export markets from new manufacturers from other countries. In any case, by their nature, multi-national companies have diversified and established markets overseas and can operate also, when necessary, largely independently of foreign exchange requirements and variable currency rates, or are even able to take advantage of them. Perhaps partly for the reasons mentioned above, our leading growth sector, manufacturing, managed to grow by 30 per cent in 1971, a faster rate than in 1970, in spite of the rather more adverse international trading conditions in 1971, which according to the Survey of Business Opinions covering a sample of industrial establishments, curbed the growth of some manufacturers during the fourth quarter. In short, we shall do well to press on with the promotion and establishments of more, progressively higher, technology and export-oriented industries.”
“The success of the domestic policies of all these countries and, in particular, of the United States, in solving their problems and - stimulating growth would give a powerful uplift to other economies. It is to be hoped therefore that, notwithstanding gloomier predictions since then, the forecast by most U.S, economists during the beginning -of the year of a 5.5 to 6 per cent real growth to about $1,150 billion or twice as much as last year, with a price rise of some 3.1 -3.4 per cent only as measured by the G.N.P, deflator, and a reduction of unemployment to under 5.5 per cent, can be realised. Certainly the presently buoyant market in U.S. Stock Exchanges and the resumption of consumer spending are favourable signs of recovery in the U.S, economy. It is to be hoped also that the optimistic estimate of the Organisation for Economic Cooperation and Development (O.E.C.D.), which includes most developed countries including Japan, will be correct for a 5 per cent growth rate for 1972 as against 3 per cent for 1971. The international trade picture is, however, obscure. The G.A.T.T, prediction of world trade for 1972 contented itself on 15th February, 1972, with the statement that: `It is difficult to forecast developments in 1972 in terms of value with any confidence. It seems likely, however, that the rise in export prices expressed in U.S, dollars will be greater in 1972 than in 1971.' In volume terms, however, it was prepared to forecast a 5 per cent increase at best against the 8.5 per cent increase in 1970, and the 5 per cent increase in 1971.”
“The D.B.S, loan was oversubscribed, two-thirds of it being allotted to principal institutions in Singapore, Hong Kong and Japan. It is intended to encourage further borrowings in the Asian Dollar Market by reputable financial institutions of good standing in Singapore, the ASEAN region and even other countries in Asia. Future Prospects Now future prospects: what is the ,outlook for 1972 and beyond? We have seen from our survey of the international economic setting and our analysis of the main economic indicators and their growth rates that the performance of the Singapore economy was affected last year and will depend again this year partly upon the turn of international events. It is, therefore, of some concern that in spite of what was thought at the time to be a valid settlement of international monetary problems, we should still have continuing uncertainty, with weakness in the U.S. Dollar and volatility in exchange markets in all the major financial centres. The ability of world trade to expand will be reduced if the domestic problems of high unemployment at the same time as inflation persist in many major economies; or if the dollar reflow is delayed and the balance of payments problem continues in the United States; or if the uncertainty and exchange restrictions arising from the currency crises and the possibility so soon after the realignment of December of yet another revaluation continues to affect even the strong economy of Japan; or if its slower growth rate, which only it could call a "recession", results in reduced imports of petroleum products from the Middle East (and Singapore as a refining centre) and of raw materials such as iron ore and other minerals from Australia.”
“Banks have gradually moved into industrial financing though a large proportion of total loans and advances is still made to trade and commerce. The latest data available shows that by December 1971, out of a total of $2,615 million in loans and advances, 31.3 per cent was made to the commercial sector, while 31.4 per cent was made to the manufacturing sector. Another indicator of the growth of banking is reflected by the increasing share of demand deposits to the total money supply. On average, about 55 per cent of the total money supply, which is a significant ratio by international standards, was raised out of demand deposits. The fact that it forms slightly more than half of the total money supply shows that banking facilities are being increasingly made use of by the public. The Asian Dollar Market continued to attract foreign funds. There are now 19 banks authorised to deal in Asian Dollars as compared to 16 at the end of 1970. Total liabilities of the Asian Currency Units by the end of 1971 aggregated to nearly US$1 billion as compared to US$400 million at the end of the previous year - an increase of l� times. Interest rates on Asian Dollar deposits have fallen in sympathy with world interest rates and are now earning depositors 6.5 per cent for one-year deposits, 5 per cent to 6 per cent for three to six months and 4.75 per cent for one month. To stimulate its further expansion, the Government will encourage the development of an Asian Dollar Bond Market. Two bond issues have so far been made, one floated by the Private Investment Company for Asia (P.I.C.A.) for $10 million and the other by the Development Bank of Singapore (D.B.S.) for a similar sum. The first loan was underwritten by Singapore banks and constitutes an important development for Singapore.”
“When the expenditure for this sub-sector is reduced to less than $100 million in 1972, it is hoped that any dampening effect on the economy particularly on domestic demand and employment can be counteracted. Since the major growth sectors of the economy, namely, manufacturing, construction, tourism, banking and port activity, are expected to forge ahead with sustained efforts at expansion, the delayed effects of the complete British military withdrawal in the current year can be fully mitigated and the economy should -continue to grow, though perhaps at a lower level than in the past year. (c) Banking and Insurance I should now like to conclude this sectoral analysis with a reference to that sector of the economy - banking and insurance - which embraces the financial operations of the economy. The contribution of banking and insurance to the G.D.P., which has consistently shown a rising trend, further expanded by 15.0 per cent to $112.6 million in 1971. The share in G.D.P, has been maintained at around 1.7 per cent throughout the past decade. Banking continued to grow in 1971 along the lines of Government policy which is to encourage Swiss type banking procedures as part of the overall programme of developing Singapore into a financial centre for Southeast Asia. By the end of 1971, the number of banks totalled 42 with 192 branch offices. Total deposits rose from $3,194.9 million in 1970 to $3,745.8 million, giving a growth rate of 17.2 per cent. Of total deposits, fixed deposits comprised 57.9 per cent, indicating that banks have funds to lend on a long-term basis. During the same period, bank loans and advances increased from $2,167.7 million to $2,615 million, an overall growth rate of 20.6 per cent.”
“A more intensive programme is required to attract tourists to Singapore especially from those countries whose nationals are now providing the major share of world tourists. By these, I mean Japan, Australia, the United States, and the richer European countries. The occupancy rate for hotels has fallen from 73.5 per cent in 1969 to 70.7 per cent in 1970 and 65.4 per cent in 1971. One of the objectives of tourist promotion will, therefore, be to get the occupancy rate back to something like the level of the late sixties, and the hotel industry and the Tourist Promotion Board will each have to play its part to achieve this end. On the infrastructure side and the provision of amenities and facilities the proposed Development Budget for the financial year 1972-73 makes provisions for the development of a large number of projects which should go some way to encouraging tourists to increase their length of stay in Singapore. Thus, with greater promotional efforts, I expect that the tourist industry will increase its earnings in the current and ensuing years. (b) Foreign Military Expenditure Preliminary estimates for foreign military expenditure in 1971 covering both British military expenditure and expenditure by A.N.Z.U.K. (Australia-New Zealand-United Kingdom) Forces indicate that there is practically no change in the level of expenditure from that registered in 1970. The expenditure remained at around $420 million. The phased reduction in British military expenditure, which was only completed by the later part of 1971, was counterbalanced by a corresponding increase in A.N.Z.U.K. Forces expenditure during the year. The full impact of the withdrawal has not therefore been felt in 1971.”
“7 per cent for the year under review and its share to G.D.P, has been maintained at around 2 per cent since 1966. The contribution of this sector to G.D.P, stood at $157.3 million in 1971. (v) Other Services (a) Tourism As I told you in the last Budget Speech, it is our intention to develop the tourist industry to increase the flow of foreign exchange earnings and strengthen the balance of payments position. However, care has to be exercised to ensure that the investment is in those facilities and amenities which do not tax the already short supply of labour resources. To this end, the massive hotel building programme of the last few years has had to be slowed down to provide for a more balanced development and the reallocation of building construction and other capacity to development projects of higher priority. The encouraging signs of success in our efforts in promoting tourism is evidenced by the growing number of visitors who come to Singapore each year. In 1971, 632,000 tourists visited the Republic, as against 522,000 in 1970 and 409,000 in 1969. Although the growth rate for 1971 of 21.0 per cent is lower than the 27.6 per cent for 1970, which was partly due to the post-Expo `70 influx of tourists, the growth rate of tourist arrivals is a fairly respectable rate by international standards. Earnings from tourism continued to grow and reached $323 million in 1971 compared to $275.6 million in 1970, or an increase of some 17.2 per cent. This was ten times higher than 1960, thereby raising the share composition from 1.5 per cent in 1960 to 5.0 per cent in 1971. The average stay of visitors also rose slightly from about 3.3 days in 1967 to about 3.9 days in 1970 and 1971. However, despite our past efforts to promote tourism there remains much to be done.”
“In the coming year or two, however, it is felt that unless large capital inflows continue and increase, the balance of payments position may be strained as the Republic would be faced with the total reduction of British military expenditure in Singapore which would undoubtedly have a big impact on Singapore's external financial position. Also, payments for machinery and equipment and materials for industrial development as well as for the public sector infrastructure development are expected to increase in the next two to three years. Thus, the pressure on the balance of payments may, in certain circumstances, be expected to continue till such time when new industries are fully operational and have established export markets for their products and when the anticipated larger earnings from tourism and other "invisibles", such as ship-repairing, materialise. Thus, it is of utmost priority that efforts should be made to increase our domestic exports and invisible earnings and Government's policy is aimed at fostering this. (iv) Government Services and Public Utilities The contribution by Government services in 1971 to the G.D.P, increased by 15.9 per cent, which follows the trend of growth for the past decade where an annual average growth rate of about 14 per cent was registered. The contribution of this sector to G.D.P, in 1971 was $452 million. At this level, Government services accounted for about 7 per cent of the G.D.P. It is interesting to note that the share composition of this sector to the G.D.P, has been maintained at a steady 7 per cent throughout the entire period. The main increases are in respect of expenditure on defence, education and health. As in the case of Government services, public utilities showed a steady growth i-ate of 13.”
“The rising trend in domestic exports is expected to continue as increasing promotional efforts are being made to establish new markets overseas. Re-exports or entrepot exports, however, stagnated at the 1970 level of around $3,003.1 million which may be attributed to the general slump in prices of primary commodities, primarily of rubber and the increased participation in direct trade by our neighbours. To the extent that our neighbours continue to pursue their direct trade policies and world prices of primary produce remain at low levels, it can be expected that re-exports will decline in the years ahead and accordingly the contribution of the entrepot trade sector to the G.D.P, would also decline. The recorded trade deficit in 1971 amounted to some $3,283.7 million compared to $2,778.0 million in 1970. The ever-widening trade deficit as recorded, particularly in recent years, has been aggravated by higher costs of imported goods. Unlike other industrial countries such as Japan and Germany, which have accumulated large trade surpluses, Singapore has run a persistent trade deficit and this has been largely financed by earnings from "invisibles" and large capital inflows which have gone into meeting the costs of substantial imports of machinery and equipment. Whilst there may be concern at the consequences of our growing trade deficit in the balance of payments, I have explained in the Budget Speech last year that there is basically no need for alarm. Our preliminary estimates of balance of payments indicate that the balance of payments surplus would amount to $844.6 million, which far exceeds the surplus for 1970 by $383.3 million.”
“0 million, The declining trend of entrepot trade may be largely attributed, as mentioned earlier, to an increasing participation of direct foreign trade by neighbouring countries and the low level, of produce prices. On the other hand, the rapid growth in the domestic trade sub-sector has been propelled by the rising purchasing power of the population and increased earnings from the distribution of domestic export which has shown a substantial growth during the past few years. Continued expansion of this sub-sector can be expected in the next few years in line with the general economic growth. On balance it is envisaged that the declining importance of the entrepot trade in the years ahead will be offset by the growth of the domestic trade sector and the trade sector as a whole can be expected at the minimum to maintain the trend of growth rate recorded for the period 1970 and 1971 of around 11.1 per cent per annum. The total external trade reached a record level of about $14,026.3 million in 1971, an increase of $1,736.7 million or 14.1 per cent as against 11.9 per cent in 1970. Exports rose by 12.9 per cent to $5,371.3 million in 1971, while imports advanced at a faster rate of 14.9 per cent to $8,655.0 million, compared with the respective rates of 0.3 per cent and 20.7 per cent for the previous year. The most substantial increase was observed in imports of capital goods and materials to meet the increased pace of development in the industrial sector. In the case of exports, the increase came primarily from domestic exports which rose by 29.6 per cent to the level -of $2,368.2 million as new markets are found for the products manufactured by local industries.”
“This lag could be attributed to, among others, the pursuit of a direct trade policy by neighbouring countries, the general decline in produce prices primarily of rubber, the de-escalation of the war in Vietnam and, last but not least, the-uncertain trading conditions which prevailed during the recent international monetary crisis. Of the total increase in the trade sector, entrepot trade accounted for 3.6 per cent and domestic trade for 6.0 per cent. The entrepot trade component, which showed a declining trend in growth over the past decade, virtually maintained the same low rate of growth of 3.0 per cent. The domestic trade sector increased by 13.8 per cent which, though higher than the entrepot trade was below the level recorded in 1970 of 20.2 per cent. The increase in domestic trade sector was however close to the overall rate for the G.D.P. As a result, the ratio of the entrepot trade to total G.D.P, declined further from 12.0 per cent in 1970 to 10.9 per cent in 1971, whereas for domestic trade the same ratio of around 18 per cent as in the previous year was maintained. It is interesting to note that within the trade sector there has also been a shift in emphasis with domestic trade gaining in importance as compared to entrepot trade. Entrepot trade, which in the earlier sixties formed 18.6 per cent of the trade sector, dropped to only 10.9 per cent in 1971, while domestic trade gained in importance, particularly from 1968. In value terms, entrepot trade amounted to $703.6 million in 1971 against $1,206.0 million for domestic trade, and this is in sharp contrast to 1960 where entrepot trade amounted to $381.1 million and domestic trade to $269.”
“Suppliers of construction materials were also hard put to meet demands and temporary shortages on a number of occasions in 1971. The situation was aggravated by speculators moving in to corner the market, and Government had to step in on a number of occasions to authorize controlled imports of restricted building materials to meet the shortage. The deceleration of the growth in this sector during 1971 was primarily in respect of non-residential buildings in the private sector due largely to the curtailment of sales of sites for urban renewal projects. Construction of non-residential buildings comprising mainly shopping and office complexes undertaken by the private sector registered a relatively small increase of 21.9 per cent compared to 121.6 per cent in 1970. On the other hand, construction of residential buildings forged ahead with a higher growth rate of 32.6 per cent compared to 28.4 per cent in 1970. The increase has been primarily in respect of public housing and, to a lesser extent, private housing. (iii) Trade The growth rate for the entrepot and domestic trade sector, which formed nearly one-third of the G.D.P., reflected a slight declining trend during the past decade, except for 1968 and 1969 when the accelerated growth reflected the resumption of trade with Indonesia. In line with this trend, the contribution of this sector increased by only 9.6 per cent or $166.7 million in 1971, representing a slower rate of growth compared to 12.6 per cent in 1970.”
“Singapore's position as the fourth largest port in the world is ship building and ship repairing, which is included under transport equipment industry. The transport equipment industry ranked a close second with 15.4 per cent of total value added, and this in turn was followed by the electrical machinery industry, which contributed 14.2 per cent of total value added. Of the more traditional industries, food, beverage and tobacco industries jointly accounted for another 9.4 per cent of the total. value added. (ii) Construction The contribution by the construction industry, which has been growing rapidly since 1967, rose by about 16.6 per cent, to $352.5 million in 1971. Although the growth rate was much lower compared to the previous year of 47.1 per cent, it was nevertheless among the highest rates-registered by the other sectors and was-well above the 14.0 per cent for the-overall G.D.P. As a result, its share in G.D.P, was maintained at about the same level as in the previous years of around S per cent or eight times over 1960. The lower growth rate for 1971 compared to 1970 can be largely attributed to the shortage of capacity faced by the industry both in terms of labour and contracting skills and materials which have been developing for some time now. The building boom over the last two to three years has been caused by a combined demand from the massive public housing programme; the boom in hotel and office construction stimulated by the urban renewal programme; as well as construction associated with the burgeoning industrial expansion. This has exerted excessive pressure on all resources associated with the construction industry, including labour.”
“The fastest growth was recorded by the petroleum refining, manufacture of electrical machinery and apparatus, and ship building and repairing industries where increases in value added averaging around 40.0 per cent were recorded. In addition to these industries, other sub-sectors also registered favourable growth during 1971 as compared to 1970. One of the major obstacles in industrial growth experienced in 1971 was the acute shortage of skilled labour for specific industries. Up to 1971, increases in output were matched by increases in employment. The average labour productivity in manufacturing appears to have risen very little and rapid industrial expansion has been wholly dependent on a growing labour input. However, this is not likely to continue since the rapid restructuring of the economy and the raising of the technological level of the labour force through retraining and the acquisition of new skills are now being actively promoted, as I shall describe later. The growth of the industry will also-have to depend on higher productivity and Government's policy is aimed at achieving this target. Data from the Census of Industrial Production showed that the largest industrial sector in the economy is petroleum refining which accounted for about 33.4-per cent of total output for the manufacturing sector in 1971. By the end of 1970, total refining capacity in Singapore amounted to 368,000 barrels daily. In 1971 the capacity was increased by a, further 250,000 barrels per day. However, 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 of manufacturing is only 20.2 per cent. Associated with the oil industry and.”
“The manufacturing and construction sectors registered rapid growth particularly during the last five-year period whereas the trade and other services sectors had a relatively lower rate of growth. The net result was that the share composition of the manufacturing and construction sectors jointly rose sharply from 11.2 per cent in 1960 to 25.5 per cent in 1970 and 28.5 per cent in 1971. On the other hand, the ratio of the trade and other services sectors to the G.D.P, has slipped from 70.7 per cent in 1960 to only 58.6 per cent in 1970 and 55.5 per cent in 1971. I should now like to review the development of the major sectors, primarily manufacturing, construction, trade, Government services and utilities, and other services sectors, of the economy and their impact on the overall growth of the Republic. (i) Manufacturing Sector In 1971, manufacturing industries generated an income contribution of $1,490.9 million to G.D.P., an increase of 30.3 per cent compared to 27.5 per cent in 1970. This was nearly eight times as much as in 1960, while G.D.P, grew by three times over this period. This rapid development has raised the share composition of the manufacturing sector to total G.D.P, from 9.2 per cent in 1960 to 23.0 per cent in 1971. Our manufacturing industries are becoming increasingly characterised by orientation towards exports and by the higher quality of their products. Overall, some 40 per cent of our domestic manufactures is exported. Among pioneer companies, exports account for some two-thirds of their output. Last year, more than one-third of our domestic exports went to developed countries, as compared with less than one-fifth five years ago.”
“5 per cent, whereas for private consumption expenditure it was below the 1970 level of 13.5 per cent. The net result of these changes is that the share composition of private consumption expenditure fell from 64.3 per cent in 1970 to 60.4 per cent in 1971, whilst that of Government consumption expenditure and Gross Domestic Capital Formation rose from 11.8 per cent and 23.9 per cent to 13.6 per cent and 26.0 per cent respectively. It is significant that the share of consumption expenditure (both private and public) to total -expenditure fell from 93.4 per cent in 1960 to 74.0 per cent in 1971, whereas for Gross Domestic Capital Formation it rose markedly from 6.6 per cent to 26.0 per cent, an increase of nearly four times. The largest increase in private consumption expenditure in 1971 was registered in expenditure on clothing, furniture and durables, housing and transport, which was in line with the trend experienced during the past few years. The outcome of this is that the share of expenditure on basic necessities, primarily food, has fallen from 32.3 per cent in 1960 to 25.4 per cent in 1971, whilst the shares for other items have risen accordingly. This is a reflection of the rising economic well-being of the population. With respect to public sector consumption, the sharp increase of 35.1 per cent in 1971 as well as for the previous two years of over 20 per cent was largely for the defence build-up. Gross Domestic Product by Industrial Origin Before we turn to review the Republic's performance in the various sectors of the economy in 1971, it is perhaps in order to mention that the rapid growth, particularly during the past five years, has been accompanied by some degree of structural transformation of the economy.”
“Further, a relatively smaller growth rate in expenditure on machinery and equipment was also registered compared to 1970, and this has also contributed to the smaller growth rate in the Gross Domestic Capital Formation during the year. This was due to the establishment in 1970 of a number of large industries where expensive plant and machinery have been set up. The substantial expansion in Gross Domestic Capital Formation in 1971 reflected the increased pace of development efforts in both the public and private sectors. Private sector investments increased by 29.3 per cent to $1,304.3 million and public sector by 23.9 per cent to $455 million. As in previous years, the private sector's share of capital expenditure was maintained at a high level, accounting for about 74 per cent in 1970 and 1971, as against 26 per cent for the public sector. The increase for the private sector was mainly in respect of expenditure on transport equipment and construction of non-residential buildings, primarily of offices, shopping complexes and factories, whereas for the public sector, it was mainly in respect of machinery and equipment and public housing. Expenditure on transport equipment by the private sector increased very substantially from $108.2 million to $271.5 million, giving an increase of 150.0 per cent, and this comprised largely of purchases of ships and air--craft by Neptune Orient Lines and Malaysia-Singapore Airlines. In the case of consumption, public sector expenditure rose much more sharply by 35.1 per cent than did private consumption expenditure (10.2 per cent). The increase in Government consumption expenditure, which has been expanding rapidly since 1969, far exceeded the rate achieved in 1970 of 25.”
“The increase was contributed by both components, namely, consumption and gross domestic capital formation. Capital formation rose substantially by $383.6 million, or 27.9 per cent, to reach a high level of $1,759.3 million, which consumption rose more moderately hut still at a sizable rate of 14.1 per cent to reach $5,000 million. The rise in capital formation, though somewhat less than that achieved in 1970 of $421 million, or 44.2 per cent, was still substantial, and it can be said with confidence that Singapore's political stability and its potential for profitable economic development continue to be recognised by investors both local and abroad. Economic Development Board estimates of commitments for additional foreign investment in new industries or for expansion of existing ones indicate that this will total $930 million, not much less than the $1,000 million for 1970. Gross Domestic Capital Formation, which registered a growth rate of 27.0 per cent per annum for the period 1967- 69, rose sharply to a peak level of 44.2 per cent in 1970 over 1969. Although the growth for 1971 of 27.9 per cent was noticeably below the rate experienced in 1970, nevertheless it measures up to the trend of growth for the earlier period 1967-69. The lower growth rate of new investments in 1971 can be explained partly by the slowing down of construction activity, due primarily to the shortage of capacity - labour and material resources - in the industry generated by the boom in building activity during the past two to three years. This lack of capacity has also led to the control of urban renewal development.”
“553-588) I have previously mentioned the figure of 14 per cent in connection with our preliminary figures for G.D.P, growth in 1971. The more commonly used indicator of overall growth, the Gross National Product (G.N.P.) has also been calculated this year. Preliminary estimates of G.N.P, at current prices for the year show that it rose by $860.8 million to reach the level of $7,000.8 million. In percentage terms, this represented an increase of some 14.0 per cent which, though somewhat lower than the 17.2 per cent recorded for 1970, nevertheless compared favourably with the average growth rate of around 14.1 per cent per annum for the period 1966-70. Estimates of G.N.P, at constant prices are not yet available at this moment. However, since the general price levels except for certain lines of consumer goods have been observed to show mild increases, it can be expected that the real growth in G.N.P., discounting price increases, would not deviate significantly from the current price estimation. Growth was, therefore, in the main non-inflationary. With the population growth of nearly 2 per cent in 1971, the per capita G.N.P, at current market prices advanced by about 12.1 per cent from $2,960 in 1970 to $3,317 in 1971. At these levels the per capita G.N.P, is the second highest in Asia after Japan. Another interesting indicator is that for Gross Domestic Expenditure (G.D.E.) representing resource use. Preliminary estimates of G.D.E, also registered a comparable high rate of increase. The expenditure on all goods and services for 1971 amounted to $6,759.3 million, which is about $1,000 million, or 17.4 per cent higher compared to the 1970 estimates. As for G.N.P., the G.D.E, growth rate was slightly below the level experienced in 1970 of around 21.0 per cent.”
“(International Monetary Fund / International Bank for Reconstruction-and Development) meeting in Washing-, ton last year favouring S.D.Rs or some, new form of it as the num�raire in the new international monetary system. In that event, since we do not regard S.D.Rs, as at present constituted to be a satisfactory substitute for the Pound Sterling,, we may have to consider how we can, safeguard the value of our external. reserves. By an agreement signed between the-British arid Singapore Governments, not less than 36 per cent of Singapore's, external reserves are at present required, to be held in Sterling. In consideration of this obligation, 90 per cent of such. Sterling reserves are guaranteed by Britain against a devaluation of the British Pound by more than 1 per cent from its old parity of US$2.40 to 1. The currency realignment after the recent international monetary crisis resulted in. Sterling having a parity or central rate-of US$2.6057 to the Pound and a wider margin of 2� per cent on either side of parity, which clearly renders the Sterling Guarantee Agreement inapplicable without major amendment. To meet the new situation, therefore, I propose to initiate discussions with the British Government for the cancellation or amendment of the Sterling Guarantee Agreement in order that some further diversification of our external assets may, if necessary, be considered. Singapore's Economy in 1971 I would now like to discuss in some -detail the performance of our economy. I am again distributing, for the convenience of Members, a number of statistical tables (See Appendix, cols. 553-88), upon which I shall partly base my remarks. Appendix to Annual Budget Statement(Cols.”
“The ultimate situation will be the eventual elimination of preferential tariffs enjoyed by Commonwealth members in their trade with Britain in the past. While our entrepot trade may be affected in volume and our earnings reduced on the export of entrepot trade commodities to the E.E.C., it is mainly our domestic exports into Britain which will be affected by the difference between the Commonwealth preference rates and the E.E.C, common external tariff. Less than one-third of Singapore's present exports to Britain are of domestic origin, but this is likely to increase considerably in the future. Singapore would benefit from freer entry into an enlarged E.E.C, market for its goods. It is therefore our intention, by establishing an official representation to the E.E.C, in Brussels, to investigate the possibilities of negotiating an associate member status or a trade agreement with the E.E.C, which will facilitate such entry. This could be done bilaterally and also, as has been suggested, in a common approach with other ASEAN (Association of Southeast Asian Nations) countries, on the 1ineX of the South American Andean Common Market talks with the E.E.C. Secondly, there is the question of Singapore's Sterling reserves. After Britain's entry into the E.E.C., she is.; committed to Sterling playing a diminishing role as an international reserve currency, and consequently, I assume, to the running down of the Sterling area reserves and its replacement by some other international currency in general trading use, or by funding in some form of created reserve asset, such as the I.M.F. Special Drawing Rights (or S.D.Rs). The latter is the more likely in view of the British Chancellor of the Exchequer's Speech at the I.M.F./ I.B.R.D.”
“The volume of trade grew by a mere 5 per cent - well below the average annual growth of the sixties. In dollar values, the increase in trade was close to the average of 9.3 per -cent for the last decade. However, the value figures are inflated by the parity changes during the year and even so, the rise remains well below that recorded in 1969 and 1970. The British Government's decade-long quest to join the European Economic Community (E.E.C.) on acceptable terms has finally succeeded. The British Parliament endorsed by a sizable majority in October 1971 the principle of Britain's entry into the E.E.C. In spite of the narrow majority recently on the Second Reading of the legislation to effect such entry, we must expect that Britain will be in the European Common Market in January 1973. Britain's move to identify herself more with the European community of nations will have major effects on her relationship with other Commonwealth countries and on the role and status of the Pound Sterling as an international currency and the monetary reserve assets of other Sterling Area countries. Singapore will now, therefore, like other members of the Commonwealth and of the Sterling Area, have to consider her position in relation to these two matters. First, in regard to the change in its trading relationship with Commonwealth countries under the present system of Commonwealth preferences, the British entry into an outward-looking E.E.C, should not have too serious effects on Singapore's trading position. The main dislocation is likely to arise from the application of the common external tariffs of the E.E.C, which the United Kingdom will have to implement in stages on imports from non-E.E.C. countries.”