Hon Sui Sen
Singapore
“Sir, I must inform the Member for Rochore that the companies are run on the basis of private sector companies, i.e. their budgets are drawn up by their boards of directors. I do not know to what extent their budgets follow Government budgets but they are certainly not regulated in the sense that Government budgets are rigidly enforced.”
“Perhaps the Member is referring to PIE's operations with respect to the Armed Forces. PIE provides some of the supplies for feeding our army and other armed forces. If the private sector is equally viable, equally able to supply foodstuffs, I see no reason why they should not also compete with the PIE.”
“Jeyaretnam asked the Minister for the Environment and Minister for Communications if he will request the Port of Singapore Authority to consider providing transport alternatively paying a transport allowance to all employees of the PSA who have been moved out of the PSA Staff quarters in Blair Plain and as a result of which have been put…”
“INTRACO is a company in which the Government has some equity. I believe the proportion is somewhere around 20%. So in a sense it is not exactly a Government controlled company, although 20%, of course, is a fairly considerable share. In the case of PIE, the answer is yes, it is a Government company.”
“The dividend yields for the three holding companies were nil, The yields for the operating companies were nil for 34 companies (including eight which have yet to commence operations), 1% to 10% for five companies, more than 10% but less than 20% for 10 companies, and at least 20% for nine companies.”
“Sir, the simple answer to that is no, for the purpose of this Bill. This Bill merely enacts legislation to implement the 1982 Budget concessions.”
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“The cost-of-living index was framed in 1960 or thereabouts - quite a long time ago - so there is no question of our having designed it - there was some accusation that my statisticians perhaps designed it - so that we can mislead the House as to the actual rise in the cost of living. The basis on which the cost-of-living index was formed, as was rightly pointed out, is as shown in the Digest of Statistics. If anyone is interested, he can see the weights in the consumer price index. The weights were designed so that the basket of goods belonged to the workers in 1969 and at that time, there was considerable unemployment. The conditions then were quite different from what they are today. The basket of goods, therefore, consisted mainly of foodstuffs. Naturally, when you are from the lower income group this is the range of commodities you buy most rather than furniture, T. V, sets, refrigerators or other things which have risen greatly in prices. Even on this basis the foodstuffs have not really increased in prices. The figures are in the Digest of Statistics. They can easily be compared by anyone who goes to the market place. Of course, if standards of living have increased, as Members have emphasised, it may be considered whether our present cost-of-living index is really appropriate to the conditions of today, in which case we should consider whether we should change the whole system and construct a new cost-of-living index with different weights. If you are one of the overseas personnel who come to Singapore, for example, if you are one of those who are concerned with offshore oil exploration and you want to get a house in the Tanglin area, you cannot expect to pay the same rent that you would pay in 1960. That is quite clear.”
“In this respect, I think we are rather fortunate in not having large areas in which to start the "green" revolution. The price of rice has fallen in spite of what may have been said about the cost of living by certain Members of the House. With the miracle rice that is available for planting in many countries in this region which have an economic advantage, the price of rice is likely to fall further. Beyond this, the feeling of the House appears to be that the policy which we have suggested is acceptable and that the emphasis on export-oriented manufacturing is correct and that we should proceed with this emphasis on the very dynamic sector. I will now try to deal with the various points of criticisms by Members. The first is the rise in the cost of living. I was accused of dismissing the rise in the cost of living in a very few sentences in my report. This is correct. My remarks, of course, apply to 1970. It is correct that the cost of living index for 1970 has shown very little rise over 1969. The prices which Members have most in their minds today are really connected with 1971. For instance, the price of bread was mentioned; also the price of sugar which was recently raised; the rise in bus fares and perhaps taxi fares - all raised in 1971. I am not saying that this is not important. It is very important. The two paragraphs in my report are related to 1970. I did say that in certain respects there have been increases. In the case of housing, for example, there has been an increase in price. But in the case of rice and foodstuffs, there have been some decreases in price. I would now like to deal with the nature of the cost-of-living index.”
“I am, of course, aware that China is a very powerful country and that it will have a very considerable effect upon the economies of the area. I do not, however, consider that at the moment it will play a very great role. As far as Singapore and perhaps Malaysia and other countries in this region are concerned, I am afraid the effect is one of being ignored. We are not recognised. However, if the Member for Crawford has a line to China, we shall be happy to pursue the connections which might benefit the economic development of Singapore. I think we can possibly ignore the effect that China has upon the progress of Singapore in the next one or two years. There was also some criticism by the Member for Whampoa of Mr Okita's criteria for fast economic development. I think he singled out the criterion for agricultural development as one which was not applicable to Singapore. I am not quite sure that that is so. Although we have a very small agricultural sector, I believe it is a fairly efficient sector. At one time, we were exporting pigs, poultry and eggs until certain barriers were placed against our exports of these commodities. If I have not given very much emphasis to agriculture in my statement, it is not because I do not consider it very important but because I consider its scope for future expansion limited and, therefore, it is not one of the most dynamic sectors. The Member for Jurong raised certain points about agricultural development. The estimates do show that we have given the Primary Production Department adequate provision for improvement to our animal husbandry, fisheries and even agriculture of the kind which will be economic. I do not think there is any land which we can use for rice cultivation.”
“Mr Speaker, Sir, I am very appreciative of the great interest shown by all Members in the financial policy of Singapore. I would like to thank them not only for the kind remarks which have been addressed to me, but also for the remarks which are critical, though in most cases constructive. I am embarrassed by the riches - I think there is a French phrase for it: embarras de richesses - which have been disclosed by the volume of information and comments which have come from the House. If I do not answer all the questions raised, it is because, in reading through my notes, I have found that some of them are indecipherable. I shall, therefore, take the opportunity of reading the Hansard when it comes out and give the most thoughtful consideration to all the suggestions made. I therefore propose to answer only the main points brought up. I think many of the suggestions, questions and criticisms have been answered by the other speakers, so that some of the load has been taken off me. One of the main points appears to be the rise in the cost of living. I shall deal with this in some detail, and also with the workers and the conditions under which they are placed. There was also some comment on the protection of local entrepreneurs and the encouragement of national capital. Criticism was levelled at tourism, and some questions were raised on whether the investments which are being made on tourism would, in fact, bring an adequate return. There were, of course, other general remarks. On the main policy, I sense that there is general support although Members have some criticisms on the details. For example, I was accused of having left out one very important factor. That factor was China and its effect on the development of this region.”
“Mr Speaker, Sir, I beg to move. "That Parliament doth agree with the Committee on the said resolutions." Question put, and agreed to. Resolutions accordingly agreed to. ADJOURNMENT Resolved, "That Parliament do now adjourn." - [Mr Barker]. Adjourned accordingly at Six minutes past Four o'clock 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 530,594,000 shall be supplied to the Government under the heads al expenditure for the public services shown in the Third Supplementary Estimates of Expenditure for the financial year 1st April, l970, to 31st March, 1971, contained in Paper Cmd. 5 of 1971." "That the sum of 53,099,600 shall be supplied to the Government under the heads, of expenditure for the public services shown in the Second Supplementary Development Estimates of Expenditure for the financial year 1st April, 1970, to 31st March, 1971, contained in Paper Cmd. 6 of 1971."”
“Some of the needs in the coming years for projects like the Mass Rapid Transit System or for renewal of urban areas will be for sums beyond anything we have been accustomed so far to consider. The balances remaining in the Development Fund and the present sources for replenishing these balances are unlikely to be sufficient to meet all these future needs. Some of the development projects are, however, self-financing or can assist in producing better economic returns on other projects. For such projects, borrowing would be appropriate and public authorities or companies concerned could probably tap additional sources of funds such as suppliers' credits or borrowing in international markets. The Government itself can borrow more externally. Singapore's public debt at present stands at only $1,168 million and sinking funds are available to offset these by some $438 million. Our debt servicing charges at $181 million represent only 13.7 per cent of our total ordinary budget appropriation, or 3.7 per cent of our Gross Domestic Product. Our credit worthiness is, therefore, high. When opportunity occurs, it will be our intention to float loans in the international money markets. New taxation or higher rates on existing taxes appear to be unnecessary. For 1971, therefore, unless tax yields fall very considerably below our expectations or sudden large calls for contingency financing are made, no new measures are being proposed. I must, however, add that from time to time over the year, it may still be necessary to remove anomalies in taxation, improve tax procedures or, where a case is clearly established, accord protection in the earlier stages of industry being established. Sir, I beg to move.”
“2 million. Since we have planned for an expenditure of $1,306.8 million on current account, there will be a small surplus of $0.4 million, even after taking into consideration a contribution of $80 million to the Development Fund for expenditure on development account. The Development Estimates for the financial year 1971 - 72 provide for a total expenditure of $636 million, which, as Table VIII indicates, is expected to be financed largely from domestic loans amounting to $250 million. This is expected as usual to come mainly from the Central Provident Fund. The appropriation from current revenue already mentioned of $80 million and debt service repayments of $115 million added to the $250 million loan will together total $445 million, leaving a balance of $191 million. Part of this can come from external loans, interest and other receipts totalling some $91 million. If all disbursements take up the full provisions, which is unlikely, the overall deficit will be about $100 million. This can be financed, if necessary, by new taxation or borrowing or by running down the balances in the Development Fund which it is estimated will stand at about $500 million at the beginning of the financial year 1971-72. The question which now remains to be considered is whether, on current needs both for ordinary and development expenditures, new taxation or higher rates on existing taxation should be imposed. The Government's policy of promoting fast economic development has paid off. Existing tax yields have increased so that they have been sufficient in recent years to meet the needs for ordinary expenditures. A modest contribution to development expenditures has also been possible. Development expenditure requests, however, have been increasing in size from year to year.”
“5 per cent of the total estimated revenue for the next financial year. The transport sector is expected to yield $16 million more next year than the previous year, consisting of $2.8 million from road tax, $3.9 million from special tax on diesel vehicles, $2.9 million from ad valorem registration fees, $3 million from petrol, $2.5 million from import duty, and $0.9 million from passenger vehicles seating fees. The other increases are expected from tax on Public Utilities Board bills ($2.4 million), tax on Singapore Telephone Board bills ($0.9 million) and Customs duty on sugar ($1.3 million). The estimates show a decline in the revenue from Customs duty on liquors and tobacco, two of the oldest sources of revenue. In the case of liquors, the expected decline is due to the large stocks being available arising from speculative releases in the first quarter and the last quarter of 1970. If the ban on advertisements of cigarettes and smoking of cigarettes in designated places has the expected salutary effects, the revenue from Customs duty on tobacco will decline. Other Sources The sale of goods and services by Government departments will yield $10.1 million more, consisting of $5.4 million from the Telecommunications Department, $1.9 million from the Postal Department and $2.8 million from other departments. Regulatory charges (administrative fees) are expected to yield $19.1 million more; interests and dividends are expected to yield $9.9 million more; stamp duty is expected to yield $4 million more than last year. The estimates show a decline in the revenue from land sales and premium by $15.4 million and $8.2 million from Japanese Special Aid as compared with the previous year. On existing taxation, therefore, the revenue yield from all these sources will be $1,307.”
“Direct Taxes The four direct taxes, namely income tax, property tax, payroll tax and estate duty are expected to yield $430.8 million, which represents 32.9 per cent of the total revenue estimates for the next financial year. Income tax, which forms a little over done-fifth of the total revenue, is expected to yield $280 million. This is $28.5 million higher than the previous year. As the income tax is based on the previous year's income, and 1970 has been a good year for the manufacturing, building and commercial sectors, the growth of revenue from this source will be maintained. The administrative capacity of the Inland Revenue Department has been improved with recruitments during the past year and the operations of the Anti-Evasion Unit during the course of the year. The revenue from property tax is expected to increase by $16.6 million to $124.8 million, reflecting the rapid ,growth of the building industry. The revenue estimate for payroll tax is $17 million. Here I have news which employers should welcome. The proceeds of the payroll tax will be used to lighten the burden of employers in two areas. Firstly, the proceeds will be used to compensate employers for the "make-up" pay when national servicemen are called up for their annual training exercises with the Singapore Armed Forces and they do not work in their factories and offices. Secondly, it is proposed to allow reimbursements to industrialists for approved training or apprenticeship schemes in skills, of which there is a critical shortage in the Republic. Details of the approved schemes will be worked out by the Economic Development Board and the Ministry of Education. Indirect Taxes The revenue estimate from indirect taxes is $385.2 million, which represents 29.”
“9 million will be extended to Neptune Orient Lines Ltd, to enable the national shipping line to purchase more ships and tankers. Jurong Shipbuilders (Private) Ltd., a joint venture with the Singapore Government, Jurong Shipyard (Private) Ltd., and the Ishikawajima-Harima Heavy Industries Ltd., will be given a loan of $20.8 million for its shipbuilding programmes. The COMFORT Co-operative, established by the National Trades Union Congress to operate mini-buses and taxis, will be assisted with a loan of $4 million. With regard to other development projects administered by the Finance Ministry, the development of the tourist industry will cost $13.5 million, of which $11.0 million will be spent on providing tourist amenities and infrastructure facilities at Sentosa. A sum of $2 million will be required for works on Jurong Park. An amount of $1.6 million is allocated for various economic and technical feasibility studies, including an air mapping survey, and studies on oil pollution off-shore. Estimates of Revenue I now turn to the subject of how all the expenditures can be financed. In the Estimates of Revenue for the next financial year, total receipts are expected to be $1,307.2 million, which represents an increase of 10.6 per cent over the actual receipts for 1970. All the increase is expected from the normal growth without any changes in existing taxes or the imposition of new taxes. While all the major sources of revenue are expected to perform better, it is anticipated that the annual increase may not be as buoyant as in the last two years in view of an expected slowing down of world trade and the massive run-down of the British Armed Forces in the Republic.”
“Improvement to other prisons will include the construction of a Cellular Block for Changi Female Prison to provide maximum security cells for female prisoners who are at present accommodated at Changi Remand Prison. The Prison Industries will be provided with a sum of $250,000 to purchase additional equipment. A creche will be built in the Jurong Industrial Estate for children of workers as a means of encouraging more married workers to live there. The building of a fire station at Jurong to meet the increasing need for fire services has been proposed for which a sum of $247,100 is provided for works to be carried out in 1971-72. The Ministry of Finance will require $364.4 million, of which $150.0 million is for loans to statutory authorities, $198.6 million for loans to industrial and commercial enterprises, and $15.8 million for various Government development projects. The Housing and Development Board, in implementing its Third Five-Year programme, will increase its target of building from 13,000 to 20,000 housing units per annum by 1975 and is expected in the present budget to incur a development expenditure of $159.0 million, of which $100.00 million will be in the form of loans from Government. A loan of $50 million is provided for the Jurong Town Corporation to finance its development projects, including the reclamation of swamp lands east of Jurong River, construction of marine channels and improvements to Jurong Port. More housing units and other social amenities will also be provided by the Corporation. Of the loans provided for industrial and commercial enterprises, $96.0 million is intended as a further line of credit to the Development Bank of Singapore. Another loan of $67.”
“A University of Singapore Development Unit was set up in September 1970 to take charge of the planning and designing of the new University campus at Kent Ridge. This Unit has completed its preliminary studies and plans for the buildings earmarked for the first phase of the development. It is expected that more groundwork will have to be undertaken during 1971 before construction works can commence in early 1972. A sum of $1.24 million is provided for these preliminary expenses. The proposed Science Centre will be situated on a 10-acre site in Jurong. The centre will be run by a board which was formed in 1970. Construction work on the centre has not commenced yet but earth works are scheduled to begin soon and building is expected to commence at the end of 1971. A sum of $1.78 million will be required for this purpose during 1971-72. The whole project will probably take two years to complete. Construction works on the proposed subordinate Courts Building at Havelock Road is expected to start in mid-1971. The total cost of the project is estimated at $6.62 million. The building will house all existing subordinate Courts which are affected by road-widening and urban renewal projects. The Ministry of Social Affairs is budgetting for a total expenditure of $1.01 million for the development of welfare services, prisons and fire brigade services in 1971-72. Before the end of this year the Junior Approved School is expected to be completed, part of the cost of which will be provided under the United Kingdom Financial Assistance Scheme. The original proposal for an open Prison at Ulu Bedok has been shelved pending the results of a Colombo Plan expert's study of the establishment of a penal institution.”
“The Government Printing Department requires $95,300 for the purchase of printing machinery which will increase its printing capacity as well as inject greater efficiency into the Department. As a result of shortage of storage space, the shelving capacity of the National Library will be enlarged at a cost of $300,000. It is also proposed to build a library at Toa Payoh to cater for the large number of people in this densely built-up area and $400,000 is provided for work to start in 1971-72. All the projects to be undertaken by the Ministry of Home Affairs are new ones except for the proposed improvement to the Police Academy at Thomson Road, for which $770,000 is provided for its completion. Among the new projects, a Divisional Headquarters will be built at Grange Road to replace the existing one at the junction of Orchard Road and Paterson Road. Another important project expected to be implemented in 1971-72 is the purchase of additional vehicles and equipment for greater operational efficiency of the Police Force. These will include motor cycles, patrol cars, scooters, outboard engines and ancillary communications equipment. A sum of $1.50 million has been provided for this. A marine substation, estimated to cost $445,000, will be constructed near the Jurong Landing Pier to replace the present substation at Tanjong Kling which is affected by the Jurong Town Corporation's industrial land development. Under the Ministry of Science and Technology, two important development projects are expected to get off the ground in 1971 - 72: the resiting of the University of Singapore at Kent Ridge and the proposed Science Centre in Jurong. The total cost of these two projects is estimated at $100 million and $9 million respectively.”
“The Ministry of Health will spend $2.1 million for hospital services. The major project is the development of specialist units. This is a follow-up of the Report by the Committee on Medical Specialisation. A sum of $1.0 million will be required for building facilities and equipment. Other new projects include the proposed plan to centralise the kitchen and the Sterile Supply, Unit at Outram Road General Hospital and the establishment of a rehabilitation centre for paraplegics and hemiplegics at Tan Tock Seng Hospital. A total of $400,000 will be spent on improvement of wards and other services in various hospitals and clinics. The Public Health Services will require $1.5 million to purchase more refuse collection vehicles to improve the public cleansing service. Another $300,000 will be spent to complete works on a new Environmental Health Depot for the Eastern Urban Division. The new depot will house the Public Cleansing and Vector Control Services vehicles. The present dental clinic at Outram Road General Hospital is to be extended to provide more space, and three dental clinics are proposed at various areas to meet the increasing demand for dental treatment for outpatients. The Ministry of Culture, which is responsible for the Department of Broadcasting, the Government Printing Office and the Library Services, requires $3.4 million. A provision of $1.7 million is for the new Radio Studio and Offices Building, work on which is expected to commence in June 1971. When completed in early 1973, the building will replace the series of old buildings presently occupied by the Radio Section of the Department of Broadcasting. A sum of $153,300 will be spent to install modern fire-prevention equipment at Caldecott Hill T.V. Centre and several other transmitting stations.”
“41 million is provided for the further development of the vocational institutes, a technical institute and workshops in secondary schools. The proposed Singapore Technical Institute will require $1.8 million. This institute, situated in MacPherson Housing Estate, is expected to be completed towards the end of 1971 and will have facilities to train craft-technicians for Singapore. The proposed building will also house the Technical Teachers' Training Department. Emphasis on technical education will be extended to the institutions of higher learning. Provision of $1.60 million is' being made for the purchase of equipment for the Faculties of Engineering and Architecture and Building at the University of Singapore. Expansion and resiting of the Singapore Polytechnic at Dover Road is now under way. This new campus, on completion by 1973 - 74, will provide for an enrolment of up to 10,000 students. An amount of $6.0 million is provided for this development in 1971-72. The expansion of Ngee Ann Technical College will take place during the next three to four years. The whole expansion for which an Asian Development Bank loan has been obtained will cost some $10.5 million. It will increase the enrolment capacity to 3,000 students. A sum of $2.2 million is required in 1971--72 for this expansion. An additional sum of $468,000 is provided for the purchase of equipment for the Mechanical Engineering and Industrial Electronics Departments of the College. A sum of $1.25 million is required for the completion of the Hotel and Catering Training Centre. The proposed centre, which will also accommodate a hotel to be opened in 1971, will turn out some 1,000 trained personnel a year to meet the acute demand for hotel and catering workers in the Republic.”
“00() will be spent to purchase radio transmitting and receiving equipment. As in previous years, contribution will be continued to be made to international projects such as the SEACOM (South-east Asia Communications Cable) project and the International Telecommunications Satellite Consortium. The total cost of providing all these telecommunication services is expected to be $12.4 million. Other proposals under the Ministry of Communications include the setting up of the Motor Vehicle Inspection Centre at Sin Ming Road off Upper Thomson Road, for which $800,000 is required. The new Mass Transit Planning Unit to be set up for further investigation into the feasibility of a mass rapid transit system for Singapore, requires a sum of $500,000. The study will be carried out with U.N.D.P. (United Nations Development Programme) assistance. The Ministry of Education will be provided with $27.17 million $8.97 million for General Education and $18.20 million for Technical Education. Expenditure on academic education involves mainly continuing projects. The new Raffles Institution at Grange Road, which is provided with a sum of $2.85 million, will be completed by the end of 1971. With the resiting of Raffles Institution, the development of its existing site for the proposed Raffles International Centre is expected to commence in early 1972. Another junior college will be erected on a 15-acre site on the reclaimed land at Siglap. For the initial works on this College, $500,000 is provided. A sum of $1 million is required as Government contribution for the construction of other junior colleges planned by private organisations. For technical education, a sum of $5.”
“10 million has been obtained, will be implemented over a period of five years and will include a new passenger terminal building with additional parking aprons, a modern freight terminal and a hangar large enough to take in aircraft like the Boeing 747s. The runway will be extended from the existing I 1,000 feet to 13,200 feet. Advanced navigational aids, including radar equipment, will be installed at the Airport. The fire services will also be upgraded to meet the highest international standards. An amount of $7.5 million is required to get these projects off the ground. Meanwhile, existing facilities at Paya Lebar Airport will be improved to meet immediate demands. The present passenger terminal, which is being redeveloped at a cost of $6.4 million, will be completed by September 1971. The improved terminal building will be able to cope with passenger traffic generated by the larger jets. Improvement to the parking aprons and taxi-ways is to be completed by June 1971. With these immediate improvements, Paya Lebar Airport will be able to handle the increasing air traffic growth until 1975-76 when the intermediate development proposals are scheduled to be completed. Among the telecommunications projects, a major scheme which will be completed this year is the Earth Satellite Station at Sentosa. A sum of $5.6 million is required for work to be completed. A sum of $3.2 million will be spent on telex development. These include the purchase of more teleprinters and ancillary equipment. To catch up with the heavy demands for these services, the national automatic telex exchange will provide a total of 1.200 lines by mid-1972, while the international semi-automatic telex exchange will have a capacity of 150 channels. To serve the needs of the off-shore oil industry, $400.”
“This includes $500,000 as Singapore's contribution to the United Nations Pig and Poultry Training and Research Institute as well as $40,000 for the proposed Swine Brucellosis Eradication Pilot Scheme. The proposed expansion of Jurong Fishing Port and Fish Market to increase both the port and market facilities will require $200,000. The existing Fishing Training Institute and the South-east Asia Fisheries Research Centre at Changi will need $138,600 for additional facilities. Among agricultural projects, an Agricultural Statistics Unit will be set up at a cost of $150,000. The Unit will carry out census and surveys on primary production in Singapore. The Factory Farming Pilot Scheme, the Hydroponics Farming Scheme and the Intensive Farm Improvement Schemes are all continuing projects for which $201,600 will be provided. A sum of $205,000 is also required for the acquisition and preparation of land for the expansion of the Sembawang Research Station. The Ministry of Defence will need $100 million, mostly for works and buildings and land acquisition, to, accommodate the expanded defence units. The Ministry of Communications is allocated a total provision of $29.2 million for the development of facilities in civil aviation, telecommunications, postal and meteorological services. Development in Civil Aviation will require an estimated sum of $14.6 million. Intermediate airport development proposals at a total cost of $106.2 million will be implemented to provide additional facilities at Paya Lebar International Airport. These proposals, for which an Asian Development Bank loan of $62.”
“The major project in hand is the Pan-Island Expressway. Work on various; sections of this Expressway is being carried out simultaneously. By 1973, the Expressway will provide rapid access between the eastern (Changi) and the western (Jurong) parts of the Republic. Work on several one-way road systems will also be continued in 1971-72. These systems are aimed at relieving traffic congestion in the city. Drainage and flood alleviation schemes will cost $4.5 million. The next fiscal year will witness the completion of the first phase of the Bukit Timah Flood Alleviation Scheme, in which storm water from the Upper Bukit Timah Catchment will be diverted to Sungei Ulu Pandan and thus alleviate flooding in the area. The Bukit Timah Canal, along which earth slips have occurred, will be concrete-lined at a total cost of $1.9 million of which $1.4 million is required in 1971-72. Several new drainage schemes will be initiated in various densely populated areas and new housing estates. These include' Geylang Serai, Toa Payoh and Telok Blangah New `Town. Sewerage development works will require $14.2 million. Most of the sewerage projects are continuing schemes. However, two new schemes are expected to be implemented in 1971-72 in Telok Blangah New Town and at the East Coast Reclamation. These sewerage schemes will provide one of the infrastructural services for the development of these two sites into recreational, residential and commercial complexes. The treatment works at Kim Chuan and Ulu Pandan require a total of $1.6. million for urgent extensions. When these are completed, the two treatment plants will have a combined capacity to serve 1.35 million people. Of the $1.93 million provided for Primary Production, $1.07 million is required for Animal Husbandry projects.”
“These reclamations will enable us to redevelop a sea front which gives maximum use by the people of the sea and maintains the highest aesthetic skyline for Singapore, avoiding the mistakes of past private and public developments. Another very worthy project is that of urban renewal which has been gathering momentum over the past year, and for which $13.1 million has been provided. Redevelopment of the Crawford, Sepoy Lines and Havelock constituencies is almost completed and attention has now moved to other parts of the Central Area. An additional sum of $4.2 million is required to meet resettlement expenses of the Resettlement Department on behalf of the Government and statutory authorities. The Botanic Gardens, which has proved to be a popular attraction for both tourists and the local population will require $400,000 for improvement works to be carried out. To provide more fertiliser for the "Garden City" campaign, it is proposed to establish a refuse composting plant to convert refuse into compost which is recognised as a good soil fertiliser. The plant is expected to cost $1.5 million of which $500,000 is required in 1971 - 72. A total of $1.5 million is provided for general development works undertaken by the Public Works Department. The works include major construction and renovation of various Government buildings and the provision of more modern facilities for these buildings. The "Garden City" campaign will be stepped up with the provision of $4.8 million for various new park schemes as well as for improvements to existing parks and open spaces. A sum of $300,000 will be spent on vehicles to enable the Parks and Trees Division to execute its work more efficiently. Expenditure on roads and bridges is expected to amount to $14.2 million..”
“The Development Estimates provide for a total of $635.9 million, after pruning. The total proposals submitted were for $849.85 million. It has been possible to allocate to the social sector 39.5 per cent, or $61.74 million, of their requests, while the economic sector has been allocated 68.3 per cent or $114.06 million. Defence and Administration, because of over-riding considerations, receive 93.92 per cent approval, or $111.61 million requirements. Loans to statutory bodies and companies will total $348.55 million, after reduction from $407.55 million. Tables IX, IXA and IXB show how the Development Estimates provision of $635.9 million is distributed. As in the past, a large part of the expenditure on Government development projects is allocated to the Ministry of Law and National Development. Out of the total budgetted provision of $287.5 million for Government, this Ministry will receive $96.4 million most of which will be for the major schemes of land reclamation administered by the Ministry at the East Coast Reclamation. Phases I and II of this scheme, totalling 1,125 acres of reclaimed land, are almost completed. Two more phases will be carried out in 1971 - 72. Phase III will provide 165 acres of land fronting Nicoll Highway, and Phase IV will provide another 1,025 acres of land stretching from Bedok to Tanah Merah Besar. The two phases are expected to cost a total of $67.8 million of which $16.8 million is required in 1971 - 72. At Kallang Basin, reclamation will continue. A total of 400 acres have so far been reclaimed and in 1971 - 72 a further 92 acres will be reclaimed, A sum of $2.1 million is needed for such works.”
“The Customs Department gets 116 new posts to man new points such as the Naval Base and Seletar Aerodrome, new units such as the Cess Collection Unit and the Motor Assembly Plant Base, and to reinforce the personnel at the Central Sea Stores Warehouse, the Dutiable Parcels Section, etc. The New Ministry of Home Affairs is given adequate funds to pay for 329 new posts which are necessary to support the reorganisation of the Police. Additionally, $875,000 is provided for radio patrol cars, stand-by engines for Marine Police launches, uniforms and training equipment for Police Cadet Corps in schools. The Immigration Department gets 67 new posts to man new checkpoints as well as to cover existing check-points more adequately. This concludes a quick survey of the Ordinary Estimates. I will now deal with the Development Estimates for 1971. 4.29 p.m.”
“However, existing hospitals are given a total of 445 new posts and larger provisions for equipment so that patients will get a higher standard of treatment and doctors will be able to work under better conditions. For the Public Health Division, 157 new posts are provided, with the largest single share for the School Health Branch. This Division also requires additional funds to pay for public utility services and to extend public cleansing and anti-mosquito measures to areas which will be handed over to the Government by the British. The Ministry of Finance has an increase in provision of $39.7 million. Considering, however, that the allocation to the Development Fund alone has increased by $40 million, there is a net decrease in the other provisions under this Ministry. This is largely due to the fact that a number of units such as the Overseas Investment Section, Banking Control Unit and the Office of the Commissioner of Banking have been transferred to the Monetary Authority of Singapore. These are to some extent counter-balanced by new posts for engineers to be recruited from abroad for assignment to other Ministries, posts for the new Career Development and Training Section and other posts to strengthen the Organisation and Methods Branch as well as the Central Supplies Unit. A smaller subsidy is expected to be required by the Housing and Development Board but this decrease is more than offset by a new subsidy for the building of standard cargo vessels. The departments under this Ministry which are given substantial increases in staff are the Inland Revenue and Customs Departments. The Inland Revenue Department has a net increase of 41 posts to enable it to reorganise its Income Tax Division.”
“Under the Ministry of Social Affairs, the amounts required by the Social Welfare Department for public assistance and Tuberculosis treatment allowances in 1971 - 72 are expected to drop following the trend in recent years. Also, the Sports Division and Stadiums and Pools Division of the Ministry have ceased to function with the formation of the National Sports Promotion Board. The Prisons Department, however, requires more funds but these are mainly for the Prisons Industries and for bread-making at Changi Prison. The Ministry of Law and National Development gets a fairly big increase of 18.6 per cent mainly for the National Development Division and the Public Works Department. Under the National Development Division, $1.6 million is for the administration expenses of the Urban Renewal Department for which provision was made, it is considered less appropriately, in the Development Estimates in previous years. The Public Works Department will take over responsibility for the maintenance of buildings and installations handed over to the Government by the British authorities. It has taken over the maintenance of all roads in the Jurong Town Corporation's estates, the Toa Payoh New Town and some new private housing estates. It will maintain catchment drains and canals previously looked after by the Ministry of Health. Its own new sewerage pumping stations and treatment works will be coming into operation. For these and other new activities, the department requires additional funds. The Ministry of Health is also given a substantial increase. Part of the increase is due to the impending takeover of the Alexandra and Sembawang Hospitals from the British.”
“The Registry of Vehicles will also have a heavy programme in reorganising the road transportation system. The Registry will mainly depend on the new Enforcement Unit and the strengthened Investigation Unit to carry out its programmes. The Ministry of Education gets an increase of 9.8 per cent in total provision. Over the last two years, there has been a major reallocation of resources from general to technical education. This will continue in 1971 - 72 although we are now approaching the limits within which such reallocation may be made. For 1971 - 72, a number of not insignificant adjustments are made to the teacher posts. The main objective is to cut down the number of non-graduate teachers and increase the number of graduate teachers in order to step up the general standard of teaching in secondary schools. A sizable number of supernumerary posts is also provided and these will be reduced as vacancies arise so that the number of non-graduate teachers bears a closer relationship to the enrolment in the primary and lower secondary classes. The increase given to the Ministry of Education is not entirely for schools. Grants to the two Universities, the Singapore Polytechnic, Ngee Ann College and aided schools account for about a quarter of the increase. The Ministry of Culture is given additional posts for the National and Queenstown Libraries and the new Anti-Smoking Advertisement Unit. The Government Printing Office will increasingly operate as a commercial organisation and eight new posts are given for this. The Government Printing Office has been very successful in securing jobs from statutory bodies and commercial firms and consequently it is given a larger provision for printing supplies.”
“Thirty posts had to be created urgently under an Establishment Warrant in 1970. As may be expected in view of its importance to economic development, the Ministry of Communications is given a significant increase in provision. The Ministry headquarters is given 12 new posts, mainly in the Administrative and Executive grades, so that the Ministry can co-ordinate as well as guide its ever expanding departments. The Civil Aviation Department has not only to expand and improve facilities at Paya Lebar Airport but also to manage Seletar Aerodrome. It has to prepare for the taking over of Changi Aerodrome and provide fire-fighting services at Tengah Aerodrome. At the same time, it is necessary to train Aircraft Surveyors as aircraft registration work will be of increasing importance in the years ahead. The Postal Department has also experienced a tremendous increase in workload over the last few years. This department requires more postal Clerical Assistants and postmen to maintain a high standard of service. For 1971-72, a total of 98 additional posts will be available. Funds have to be provided for the department to progressively clear accumulated liabilities in respect of transport and freight of postal articles. The Telecommunications Department will be making preparations to become a corporation by April 1972. During 1971-72, the department needs additional administrative staff to ensure that the transition will be smooth. At the same time, additional staff are required in the development, planning, engineering, maintenance and operation sections, so that even as the department is undergoing a major reorganisation, it will be able to cope with the rapidly increasing work-load.”
“The other is the Science and Management Group which will provide the technical and managerial expertise in the Ministry for dealing with such problems as evaluation of weapons systems, implementation of contracts, etc. In view of the very large sums of money which are being spent on defence, any greater scientific or economic precision on evaluation of military expenditures should result in very considerable savings. Also, a number of civilian posts at artisan, craftsman and technician levels are provided to give the Ministry greater flexibility in recruiting supporting staff. The block provision for "Armed Forces" is $354 million as compared with $208 million in 1970-71. There is a decrease of $171,940 in the overall provision for the Ministry of Foreign Affairs. This is largely achieved through closer estimation of the resources likely to be needed by the Ministry. The creation of 32 new posts for the Ministry headquarters and Overseas Missions, annual increment of salaries and increases in the provision of Overseas and Children's Allowances require an additional half a million dollars. However, a more realistic estimation of funds required based on past expenditure on Special Make-up Allowances, emoluments of officers on leave, etc., passage and miscellaneous expenses result in a net decrease in the total provision. The increase in overall provision under the Ministry of Labour of 3.5 per cent should be viewed in the light that expenditure on the Hotel Training School now comes within the purview of the Technical Education Department of the Ministry of Education. The main factor for the increase in the overall provision for this Ministry is the strengthening of the Factory Inspectorate to curb the rise in industrial accidents.”
“The Prime Minister's Ministry needs a smaller provision because the Public Works Department and Public Health Division will take over the maintenance of public health in the areas taken over from the British authorities. This decrease is partly offset by additional provisions required for the new Anti-Pollution Unit which is now properly established and geared to begin operation. The Ministry of Science and Technology requires more funds mainly because of the promotional activities to be undertaken by the newly-appointed Metrication Board. Actually the provision in respect of this Ministry is higher than is apparent because the contribution to the Science Centre Board which, prior to the formation of the Board, took the form of "Staff and expenses of the Popular Science Centre", is now shown under the Contributions and Charitable Allowances Head of Expenditure. The Ministry of Defence is now shown as a separate Head of Expenditure in the 1971-72 Estimates and the provisions are not readily comparable with those shown under the former Ministry of the Interior and Defence Head of Expenditure. Whilst the Armed Forces will continue to be built up, the Ministry will be concentrating increasingly on consolidation. Three of the Deputy Secretary posts are upgraded and two new units are established. One of these is the Direction of Employment Department established to enforce provisions of the Direction of Employment Ordinance. However, because of the rapidly expanding employment opportunities, applications from employers for exemption from the provisions of this Ordinance are freely granted.”
“The provisional estimate of Gross Domestic Product at Factor Cost for 1970 is $5,564 million. Total provision for defence purposes in the Ordinary and Development Estimates is $530.0 million which is 9.5 per cent of the Gross Domestic Product. This, however, does not take into account some of the provisions available to the Ministry of Home Affairs which definitely are complementary to defence needs but are not readily apportionable. With regard to other provisions in the Ordinary Estimates, as in the last few years, care continues to be exercised over the expenditure on social services. The provision for this group of services is increased by 7.6 per cent. For 1971-72, health services are allowed the highest increase at 12.0 per cent. Even this figure is understated in that the provisions for the new Alexandra and Sembawang Hospitals are meant for eight and nine months respectively. Expenditure on education is increased by 9.8 per cent. The health and education services together take up 84.2 per cent of the total provision for social services as against 82.0 per cent in 1970-71. In consonance with our economic growth policy, adequate provision has been made for all economic services as these help not only to maintain but also to increase the momentum of growth. Next to defence and internal security, economic services as a group have been allowed the most rapid expansion. The total provision for this group for 1971- 72 is 20.5 per cent higher than for 1970-71. Transportation and communications claim 41.1 per cent of the provision as against 38.4 per cent in 1970-71. Statutory expenditure is 11.6 per cent more than in 1970-71, mainly because of additional interest payments and contributions to sinking funds. Now the major changes in the provisions under each Ministry.”
“Estimates of Revenue and Expenditure, 1971-72 I now turn to the essential, if more mundane part of today's business, the Estimates of Revenue and Expenditure for the financial year 1971-72, The two Memoranda* which Members already have, one on the Ordinary Estimates and the other on the Development Estimates, give the reasons for the major changes in the provision and allocation of funds as well as the forecasts on the basis of existing taxation of revenue yields in the next financial year. They also contain information on revenue and expenditure (*Papers Parl. Misc. 1 and 2 of 1971) performances in 1970. As detailed explanations in these documents are available to Members, I do not propose `to go into a very detailed commentary on the Estimates. I need only set out the policy framework within which the Government has drawn up the budget for 1971-72 and highlight some of the noteworthy items in both the Ordinary and Development Estimates. Estimates of Expenditure The total provision proposed for 1971-72 is $1,306.8 million which is 25.5 per cent more than the 1970-71 provision but 28.1 per cent higher if compared with actual expenditure in 1970. The expenditure in 1970 was in turn 35.1 per cent higher than `that in 1969. Therefore, the increased provision for 1971-72 is not exceptionally high. Basically, the policies adopted this year are the same as those which determined `the last budget. The building-up of our defence capability maintains topmost priority. However, there is a limit to what we can afford even in the initial years of rapid build-up from zero capability. It is desirable to peg the provision for defence needs to no more than 10 per cent of our Gross Domestic Product.”
“E. Plenary Session in 1969 and the Commonwealth Heads of State Conference in January this year. Preparation for the Annual Meeting of the Asian Development Bank in April this year is now under way. What is now needed is an intensive and sustained international promotion drive and the setting up of a convention servicing unit to handle the matter. If our tourist industry develops as we hope, it will not be at the expense of our neighbouring countries. I mentioned earlier in my speech that Expo `70 had indirectly increased our tourist inflow in 1970. Similarly, any increase in tourist traffic to one country in the region can only be beneficial to others in that region. The full scope for regional co-operation in promotion of tourism is being studied by A.S.E.A.N. (Association of South-east Asian Nations). Immediate arrangements can, however, be made to organise more regional tours on a package basis and I hope our entrepreneurs in the tourist industry will get down to doing this in a big way with other entrepreneurs in other countries. Mr Speaker, Sir, to summarise this part of my budget statement, all-out efforts will be made domestically to achieve once again the high growth rate of the preceding years, with emphasis on developments in the sectors of trade, manufacturing and tourism. Our success or failure will depend on our efforts, although external factors, outside our control, particularly in their effects upon the trade sector, can upset our best plans. Our economic strategy for further diversification, of markets as well as of industrial products, should help to reduce our vulnerability to such adverse factors.”
“The total investment involved is in the region of $300 million to $400 million. Because of the major part the Government will have to play in initiating the plan, the details have to be very fully examined and assessed. On the whole, the report is optimistic that Sentosa can be developed into an attractive and profitable tourist centre with consequent benefits to the economy of Singapore, particularly foreign exchange to help even out the deficit in our trade balance. With these facilities and with the number of hotels already in operation and in the last stages of completion, we are in an excellent position to take advantage of the growth in tourist traffic. But if the progress is to continue, tourists arriving at the Airport, the harbour and at Woodlands must meet with nothing but courtesy and efficiency. They must be treated by taxi-drivers, hotel receptionists, porters and workers in hotels, restaurants and shops in a friendly, polite and efficient manner and the standard of cleanliness must be high. The cuisine must be excellent, particularly in the exotic Asian dishes. Efforts by our Tourist Promotion Board for the maintenance of these standards and for other promotion are continuing, including increasing our tourist attractions with historical sites, which have been given some publicity in the press recently. But a more direct and more business-like effort would be that which is being seriously considered, of developing Singapore into a centre for international conventions and conferences. Singapore is ideally situated for this purpose, and the availability of first-class hotels and convention facilities and an efficient network of telecommunications are added advantages. We have the necessary experience to organise big international conferences like the E.C.A.F.”
“By the end of this decade, tourist and passenger traffic at Paya Lebar International Airport will have doubled itself twice in the ten-year period. Investments for further development of the Airport are necessary and have been authorised. With the advent of the airbus and other types of larger and faster passenger aircraft, new and sophisticated air control and air communication facilities will be required. Work has already commenced on improvements to the present air terminal building. The first stages of the development and extension of the runway are now being implemented. External sources of funds have been sought from the Asian Development Bank to help in this development. When the tourists arrive, a good proportion I hope by M.S.A, planes, they will want to know what there is to see in Singapore. The considerable attractions of our shops, hotels and restaurants, our garden city atmosphere and our interesting mixture of races with their different customs and exotic cuisines, will delight many tourists, but we must cater for all other tastes as well. We have already in operation the Bird Park in Jurong, but we should shortly have Chinese and Japanese gardens also in Jurong, a zoo in Seletar, a Marineland or Aquarama in Bedok, and cable cars from Mount Faber to Sentosa, where other facilities for tourists are being planned. A team of international consultants, Messrs. Dillingham Overseas Corporation, was appointed to study the development of Sentosa into a tourist centre. Their report, which recommends a comprehensive and far-reaching plan for public and private investment in the island, is now under study. Two projects recommended by them, an 18-hole Golf Course and a Swimming-Boating Lagoon, are now under construction.”
“Such trainees have already been placed in West Germany, Switzerland, Japan and other countries. Here again, the Government shoulders part of the costs, provided the training programmes meet agreed skill standards and will provide more trained workers than the firm's own requirements. In this connection, the Economic Development Board is directing its efforts towards placing the trainees not only in firms which have already made commitments in manufacturing projects in Singapore, but also in those firms which have Singapore in mind as a location for their future global development programme. The response from both these kinds of firms is most encouraging. Needless to say, the implementation of these crash programmes will require considerable financial support from the Government. For this purpose, I propose to use part of the revenue from payroll tax. I shall refer to this again when I come to the Revenue Estimates. Perhaps more important than financial support, the success of all these programmes depends upon careful pre-selection of the trainees. Appropriate tests will be given to ensure that they not only have adequate educational standards but also have suitable mechanical aptitudes to benefit from the specific training programmes. With these efforts, we should be able not only to meet the immediate requirements of existing firms but, more important, in the next two to three years, they would provide the necessary pool of skilled manpower by which we can derive the maximum benefits from the more demanding operations that are being set up, and also ensure continuing success in the promotion of further projects of progressively increasing sophistication. Any assessment of our future prospects must give due weight to developments of our other growth sector -tourism.”
“In the long term, of course, we have to expand our universities, the Polytechnic, Ngee Ann Technical College, and other institutions of higher learning and technical training, which we are now doing, and I shall further elaborate when I deal with the the Development Estimates. As for middle level skilled personnel, such as foremen, craftsmen and workers with specialised skills, who are equally important, we have now introduced three measures. First, we are implementing joint Industry-Government training programmes in co-operation with international companies who are starting sizable projects in Singapore. In such programmes, costs are shared between the Government and the sponsoring firm, on condition that it will undertake to train more workers than its own requirements, so that the surplus may be released to upgrade the general pool of skills in Singapore. Another condition is that the training programme and t he standards of skills to be achieved are approved by the Government. Such joint training programmes are valuable not only in supplementing the instructors and facilities in the regular educational system. Even more, they help to ensure a much greater realism and practical value in the content of courses. For the firms concerned, such programmes have the advantage of being much more closely geared to their specific requirements, and also ensure them the requisite skilled manpower at reasonable cost. Secondly, we will also give similar encouragement and support to the longer established firms in Singapore which have the capability and readiness to introduce joint training programmes along the same lines. Thirdly, we are intensifying the programme whereby firms are supported in sending trainees abroad to the parent plants.”
“In order to get the greatest advantage and to maximise benefits from these new trends, however, Singapore must also readjust priorities to evolve what may be called an optimum investment policy. In this connection, two aspects, in particular, deserve special consideration. Firstly, in promoting new industrial projects, it is necessary to be more selective. Increasingly, emphasis will have to be placed on those industries with world-wide markets, with scope for progressive growth in technological content. We must now select industries with greater capacity to contribute towards the development of modern skills at all levels. Indeed, we are already restricting certain types of industry with low technology which are set up purely on short-term considerations. Secondly, the important question of training. To sustain the accelerating pace of industrial development, manpower with modern skills is required not only to meet immediate demands but also to create a large reservoir of skills at all levels to ensure continuing growth. This calls for a crash programme which can meet both short-term and long-term needs. At higher levels of skill, for managerial and technical staff, industrial firms now find no difficulty in filling immediate requirements. As opportunities expand, increasing numbers of our graduates abroad are now returning. In addition, with the liberalisation of immigration, Economic Development Board centres abroad find increasing response by many professionals, particularly Asians, of all categories of skills who are willing not only to come and work in Singapore but to take root here as their permanent home.”
“So it is crucial that reputable international companies, especially those interested in long-term growth, should continue to find Singapore an efficient base with an overall investment climate that is hospitable and conducive towards long-term growth. In particular, if they find in Singapore adequate physical infrastructure, necessary commercial facilities and communications services which are continuously being expanded and modernised, if they see the growing increase and diversification of our supporting industries and engineering services, if they find that the high general education level and quality make our workers readily trainable in modern skills, then the bigger international companies, in planning their long-term world-wide strategy, will invariably consider Singapore one of the key locations. This will be particularly so if our workers and the unions are educated to the realities of our economic life, keen to make their contribution to the transformation of our society with high Industrialisation and sophistication in technology. Already a large and growing number of such international companies, having done their surveys, have indeed decided that Singapore is the place where they can sink deep roots by establishing projects in which long-term considerations play a major part. To stimulate overall growth, our strategy towards promoting this most important sector of the economy is important. In response to the increasing interest of international companies in investment in Singapore, we have expanded the network of Economic Development Board offices overseas to serve such companies.”
“This should be in the region of US$4,000 million by 1975, at one per cent of US$400,000 million in GNP double that of her 1970 GNP of US$200,000 million. In manufacturing, the leading growth sector in the Singapore economy, a record number of very large projects by well-known international companies were announced in 1970 and are now in the pipeline. The amount of such commitments in 1970 exceeds the total of all foreign investments in the manufacturing industry made in Singapore to date. At the beginning of 1971, it was estimated that the figure for total foreign direct investments in fixed assets in manufacturing industries, including approved commitments, stood at nearly $1,700 million, compared with an actual cumulative figure of $600 million at the beginning of 1970. These new projects will take two to five years to reach full production. However, both quantitatively and qualitatively, in the next few years as they commence production and expand, they will undoubtedly contribute towards a continuing high rate of growth. They will also extend the diversification of our manufacturing sector. Increasing benefits will be derived from the progressive implementation of committed projects in the pipeline. Then there are hopeful signs that continued progress will also be made with further new industrial projects. Some of the main reasons for optimism are as follows. Inflationary trends in all industrialised countries will continue to exert pressure on international companies to readjust their global manufacturing and distribution strategies. This will probably accelerate the tendency to decentralise and to adopt a multi-national approach, in which careful calculation of optimal cost and distributional advantage will figure strongly.”
“We understand their national aspirations and wish their policies success which is likely if their decisions are based on economic considerations. Singapore can still have a vital role to play in the provision of financial, transportation, marketing and other services. The present depressed prices in rubber and some other primary commodities, aggravated by higher freight rates, will accentuate the decline in our entrepot trade. With the withdrawal of American forces from Vietnam, entrepot trade in petroleum and other products will also be affected. Fortunately, the clouds on the horizon are not all dark. A new international factor, which will have considerable influence in South-east Asia, is Japan's rapidly increasing economic strength. She is the largest economic power after the U.S, in the non-Communist world. She is likely to continue to expand at around eight or more per cent in real terms - the Japanese economy would possibly reach the present level of the United States economy in a decade, according to some American predictions. She can therefore become a major determinant of the rate of economic development of nearby countries in Asia and in the Pacific. Japan already represents a very large market for the products of South-east Asia, particularly for those in which she will have lost her competitive edge in labour intensive production. Countries like Korea, Taiwan, Hong Kong, Singapore and others with lower wage costs will increasingly take over from Japan. Her intentions in regard to increasing her aid to one per cent of her Gross National Product by 1975 will have an increasing impact on the prosperity of the countries she will be assisting with such aid.”
“Congress to reintroduce the legislation, better known as the Mills' Bill, which seeks to impose restraints on the import of textiles, shoes and other articles. Its passage could lead to retaliatory action by Japan, the OECD (Organisation for Economic Co-operation and Development) and other countries for similar restraints against U.S, imports, with adverse consequences also upon world trade generally. The restrictive climate could jeopardise international co-operation in expanding trade, gains made by the Kennedy Round cuts, the scheme for generalised preferences for the manufactures of less developed countries, and the tendency towards greater liberalisation of trade and investments in Japan. Nearer home is the accelerated run-down of the British military bases which is due to commence at the end of this month and to be completed by the end of the year. British military spending in 1970 is put, by preliminary estimates, at $350 million. The greater part of this will be lost by the end of the year. Some 15,000 civilian employees and 2,000 locally enlisted personnel will lose their jobs. Unemployment in such numbers and a decline in national income of the order of $250 - $300 million between 1971 and 1972 must affect the economy. We must have more counter recessionary measures, in accelerated public sector development in building and construction, and further induced private investment should cushion some of this shock. Another adverse factor is that entrepot trade earnings can be expected to decline further. Our neighbouring countries will do more and more of the processing of their own commodities and enter more and more into direct trading relations with consumer countries.”
“On the international horizon the dark clouds consist of continued inflationary conditions in some of the major industrial countries, and the threat to the stability of the international monetary system caused by pressures on these economies' balance of payments. The international climate may not be entirely favourable to growth. A further cloud consists of the uncertainty over the state of the U.S, economy. Because of its size, it exercises a very powerful influence upon the economies of the rest of the world. Its economic health and the measures its Government takes to maintain it are therefore of universal concern. Judging by the index of Stock Exchange business, with its sustained trend over many months towards ever-increasing share prices, there are encouraging signs of a healthy recovery of the economy. Policy measures being adopted to stimulate the economy are much more pragmatic and less doctrinaire and ought to have beneficial results. Official U.S. economists' prediction is of a 9 per cent rise in Gross National Product at current prices. A moderate recovery is considered by others more likely, with a 3 - 4 per cent real growth, with lower inflation rates of 4 - 4 1/2 per cent, and with unemployment falling slightly. Notwithstanding this improvement, a slight downturn in world trade prospects is expected, as the U.S, recession of last year would, according to expert opinion, be felt in its delayed effects on world trade only this year. GATT forecasts are that world trade will grow between 7 and 11 per cent in value and between 5 and 7 per cent in volume in 1971. This would not be unsatisfactory. But it will not sustain an increase in Singapore's trade of the same proportions as in 1970. Further, a disruption could be caused by measures in the U.S.”
“3 per cent of Gross National Product growth in real terms for the years 1966, 1967 and 1968 respectively. In an analysis of their very high growth rates, Mr S. Okita, President of the Japan Economic Research Centre, attributed the high growth of the first three countries to the following: (a) rapid growth of manufacturing industries; (b) export-oriented economic growth; (c) cost consciousness of the business enterprises about their products; (d) widespread small and medium sized industries developed mainly by private initiative; (e) relatively efficient and productive agriculture; (f) relatively high standard of education and public administration; (g) paucity of indigenous natural resources which necessitates exports of manufactured goods; (h) aggressive importation of foreign know-how and its adaptation to local conditions; and (i) frequent cases of the separation of imported know-how from imported capital or management participation. We were like-minded with Mr Okita in emphasising the development of export-oriented manufacturing industries for countries wishing to attain a rapid economic growth. Exceptions would, of course, be countries with rich endowments of exportable natural resources such as oil and minerals. Larger countries also can depend more on domestic markets as compared to smaller countries. For us, however, there is no choice. It is comforting to know that, according to the examples and results of the high growth countries I have mentioned, we have roughly been charting the right course. All we need do is keep the Singapore ship steady as she goes. But there are signals of storms ahead.”
“The Consumer Price Index with 1960 as base o 100 registered a monthly average of 111.5 for 1970 compared with 111.1 for 1969. The relative stability in the overall index does not mean, however, that there were no price movements during the year. There were such movements but they largely offset each other. The Housing sub-index, for example, moved up by about two percentage points because of a tax on Public Utilities Board bills, but there was a decline in the sub-index for food items. In particular, the prices of rice and other cereals showed a significant decline as shown by the fall in the sub-index for these items from 115 for 1969 to 109 for 1970. Future Prospects I come now to the less predictable subject of our future prospects. Can we sustain the very high growth rate of 15 per cent for 1969 and 1970 in the coming year? To deal with this question, we must try to learn from the analysis of the economic situation which we have made of the past year, and earlier years, and from the experience of other countries. First of all, growth rates of 15 per cent are very exceptional. They are far in excess of the six per cent per annum target of the new United Nations Second Development Decade. Our comparison should not, however, be the average developing country. More relevant ones for comparison are our keenest competitors in Asia. Taiwan with corresponding figures of 9.9, 9.3 and 10.3 per cent, South Korea with 13.4, 8.9 and 13.1 per cent, and Hong Kong for which Gross National Product figures are not available but whose export trade expansion of 15.8, 15.3 and 14.2 per cent for the same three years indicated a similar high growth rate. Then Japan with its sustained growth rate of 12.3, 12.9 and 14.”
“The Asian Dollar market, which has become a part of the banking system, continued to expand in 1970. Total resources are now estimated at about US$400 million, and this despite declining interest rates consequent upon the fall in interest rates in international financial centres during the last few months of the year. When the market was first established, most of its funds were being reinvested in Euro dollars and U.S, dollars in London, European financial centres and the United States. However, there is a growing awareness, on the part of the very large number of creditworthy companies in Southeast Asia, of the possibilities of borrowing from the Asian Dollar Market for their bankable projects. Our policy will be to encourage the channelling of more and more Asian Dollar funds into regional uses. The lower rates of interest now payable for Asian Dollars should assist in such use. With regard to the Stock Exchange, I need not repeat the reasons for the legislation now known as the Securities industry Act, 1970, and the related Companies (Amendment) Act, 1970. Conditions in the Stock Market had led to such a loss of confidence that legislation was needed. I am glad to say that the market has reacted not unfavourably to the legislation. Close consultations are being held between officials of my Ministry and the Committee of the Exchange as to how best to implement the various provisions of the legislation and the recommendations of the Ferris Report. There are indications that similar legislation is being considered in Malaysia and the Bank Negara has begun discussions with the Exchange on the matter. The domestic price level remained fairly stable within the pattern of economic and financial developments I have just outlined.”
“The many activities we have and are expecting to develop in the financial sphere --the Asian Currency Unit or Asian Dollar market, the gold market, the numbered accounts system, merchant banking all these will ensure that we have a firm framework for these operations, The Monetary Authority commenced functioning on the 1st January, 1971, and the first Board meeting was held on the 5th February, 1971, to arrange for the management and routine business of the Authority. A Managing Director has been appointed and staff is gradually being recruited It is hoped that the Authority will move shortly under One roof, albeit in temporary premises, until the permanent site at the Central Provident Fund building can be ready by 1973. As the functions of the Commissioner of Banking have now been assumed by the Monetary Authority of Singapore, it will now be responsible for the performance of the banking sector. The year 1970 has been one of steady progress for that sector. Table VI statistics indicate that commercial bank deposits by the end of 1970 rose by about $500 million to $3,195 million. Though this is equivalent to an increase of 16 per cent, it is still a somewhat lower rate of growth than the 19 per cent for 1969 or 26 per cent for 1968. The slower growth is partly because of the drop in entrepot earnings. Bank loans and advances, however, to the private sector grew at the much faster rate of 26 per cent to reach $2,168 million by the end of the year. Bank loans and advances to manufacturing industries grew even faster, by more than 50 per cent from $448 million in 1969 to $739 million in 1970. Manufacturing loans and advances now constitute 34 per cent of bank loans and advances as compared with 26 per cent in 1969.”
“This figure, judged by more developed tourist countries, should ensure a more than profitable operation. Preliminary estimates of earnings from tourist services in Singapore total $272 million. This is about 5 per cent of Gross Domestic Product. A decade ago, earnings from tourism contributed less than 1.5 per cent. We have moved away from the thinking that Singapore would be unable to attract tourists in significant numbers because of a dearth of tourist attractions. I would now like to turn to the sector of "other services" which make up some 15 per cent of our economy. Among these "other services" must be reckoned those of the financial institutions which make possible our trade, industry and other economic activity. Our instrument for the issue of currency remains the Currency Board with its 100 per cent backing by external assets of all money issued by the Board. It is an automatic regulation mechanism of money with foreign exchange earnings. At the end of the year, there were $726 million of currency notes in active circulation. With $875 million also of demand deposits (excluding the deposits of the Government in the banks), money supply matched the overall pace of progress in the economy, increasing by 15 per cent in 1970. May I mention the action which was taken in the past year to strengthen other financial institutions? I refer specifically to the establishment of the Monetary Authority of Singapore and the arrangements to reorganise and strengthen the Stock Exchange of Singapore and Malaysia. The Monetary Authority of Singapore Act was gassed. Opportunity was also taken to revise and re-enact the Banking Act, which put on a proper footing the licensing and control of banks, and the regulation of their business by the Monetary Authority of Singapore.”
“It may be convenient at this point to refer to the ownership of dwellings sector in the Gross Domestic Product. The increase in earnings of $22 million over 1969 appears to be commensurate with the expenditure on dwellings shown for 1970 in the statistics at Table IIIA. In keeping also with the capital expenditure, the earnings year by year show a steady rise in absolute terms and make a useful contribution to the economy. In percentage terms, however, there has been a slight decline to 3.7 per cent in 1970. Reference was made earlier to the reduction of British military spending. Preliminary estimates indicate this reduction last year to be small, only $30 million. The final figure could well be larger. But for 1971, the reduction in spending will be considerable as British force levels go down to just over 2,000 men. Of all the areas of economic activity which were fostered and developed during 1970 to offset the loss in foreign exchange and other effects of the military run-down, one of the most promising was the tourist industry. The statistics of sea and air passenger arrivals indicate the very rapid increases in passenger traffic to Singapore from 306,000 in 1965 to 562,131 in 1969, and 716,139 in 1970. If we exclude local passengers from these figures, we find that 521,654 tourists arrived in Singapore in 1970. This represents an increase of 110,000 or about 25 per cent more visitors than in 1969. The exceptional increase may be due to visitors going to or returning from Expo `70 and passing through Singapore. With this inflow of tourists into Singapore, and in spite of the much increased number of 62 tourist hotels in 1970, it is possible still to keep the monthly average occupancy rate above 70 per cent.”
“The stimulus which was provided through incentives such as property tax reduction or payments by easy instalments has been successful, perhaps somewhat over-successful, in getting investors to build hotels, shops and office accommodation and other urban renewal projects. As an indication of the brisk activity of our construction industry, preliminary figures for the Construction Sector in the Gross Domestic Product available indicate an increase of 36 per cent in value-added output. This is the highest rate of growth recorded since 1961 for the industry. Statistics on the production of broken granite and of cement show an output increase of 19 per cent and 19 per cent respectively compared to 7 per cent and 13 per cent in 1969 and substantiate the high level of activity of the industry. At the same time, however, the smaller increases recorded for these building materials indicate that the construction industry's 36 per cent increase in earnings may be constituted partly by higher profit margins and only partly by increased constructional capacity. It could also be due to an increase in constructional labour costs. This is suggested also by the acute shortage of skilled building and construction workers. One of the consequences of this has been an unprecedented rise in the cost of new buildings reflected also in the value of existing buildings such as dwellings and office blocks. However, some hotels have declined in value for other reasons. The situation is being closely watched to prevent the cost increase from developing to serious proportions. It may be necessary also to take other measures to ensure that a run-away escalation in costs does not occur in the building industry. This could have serious effects on our total development effort.”
“This is borne out by the statistics which show that between 1968 and 1970, total imports increased by less than 20 per cent on an annual average, whilst in the same period capital expenditure on machinery and equipment in Gross Domestic Expenditure increased by more than 50 per cent. Secondly, the outflow of payments for capital goods is, by and large, balanced by the inflow of foreign long-term capital for investment in Singapore. This has generated the demand for the capital imports. Thirdly, because of imperfect data, the trade deficit in the balance of payments is thought to be smaller than shown. A part of the positive large amounts for "errors and omissions" in the balance of payments figures in Table VII is believed to be due to the trading account. Finally, and the most conclusive factor, our foreign reserves have been rising steadily in recent years. Official overseas assets have increased from $2,278.9 million in 1968 to $3,556.4 million at the end of 1970. For the present, therefore, there is no need for alarm at our large trade deficit. That is not to say, however, that an improvement in export performance would not be necessary. Our traders and manufacturers should make greater efforts to penetrate more markets and make more sales in higher value goods. Greater promotion efforts, including participation in trade fairs, would help. Turning now to the building industry which has a traditional role in pump-priming sagging economies, our original use of it in the last few years was intended to mitigate the effects of the British military withdrawal.”