SUPPLEMENTARY PROVISION (Sessional Paper No. Cmd. 19 of 1955)

The Financial Secretary (Mr T. M. Hart): Mr Speaker, Sir, I have His Excellency the Governor's authority to move,

That this Assembly resolve that the sum of $2,000,000 should be supplied to the Government under the Heads of Expenditure and for the Services specified in Sessional Paper No. Cmd. 19 of 1955.

Sir, a very full explanation of the reasons for this request for funds is given in the Sessional Paper, but hon. Members will perhaps wish me to draw attention to the main points in the Paper.

When the War Damage Fund was drawn up in 1949, the Malayan Governments were hard pressed financially. Her Majesty's Government, although itself hard pressed, agreed to finance the Fund. This financial assistance took the form of a gift of $171.4 millions and an interest-free loan of up to a limit of $160 millions. It was understood that, when the time came to draw the interest-free loan, the financial position of the Malayan Governments would be reviewed. If the financial position had changed for the better in the meantime, they would be expected to contribute to the Fund, thus easing the heavy burden on Her Majesty's Government.

At the same time, Her Majesty's Government agreed that a sum of $19.4 millions should be paid from the War Damage Fund to the War Risks (Goods) Insurance Fund to enable the latter Fund to meet its estimated liabilities. This payment was agreed on the understanding that the Malayan Governments would, between them, contribute $8.6 millions to the War Risks (Goods) Insurance Fund. Singapore's share of this contribution was estimated at $4.3 millions, and this sum was actually voted and placed in reserve in 1949.

The position in these two connections has changed materially in the meantime. In the first place, the finances of the Colony have improved greatly since 1949 and substantial reserves have been built up. In the second place, instead of the $4.3 millions which Singapore originally undertook to contribute to the War Risks (Goods) Insurance Fund, only $1 million has, in fact, been paid, due to the fact that in the event the liabilities of the Fund have fallen short of the estimate.

When the question of drawing the last instalment of the interest-free loan, amounting to $21 millions, was raised earlier this year, Her Majesty's Government drew attention to the improved financial position of the Colony and to the fact that the actual contribution made to the War Risks (Goods) Insurance Fund had proved to be considerably less than what had been agreed when the contribution of $19.4 millions from the War Damage Fund had been decided upon. Her Majesty's Government therefore asked if, in the circumstances, the Government of Singapore could see its way to make a contribution to the War Damage Fund, thus easing the burden on Her Majesty's Government.

In view of the improvement to the financial position of the Colony since the War Damage scheme was drawn up, and the heavy burden which Her Majesty's Government has borne and continues to bear in connection with Commonwealth defence and economic development, the Government has come to the conclusion that it is under an obligation and that it would be in fulfilment of the understanding reached in 1949 to make a contribution to the War Damage Fund at this stage.

With regard to the amount of this contribution, it is considered that it would be reasonable to contribute the balance of the sum which would have had to be paid to the War Risks (Goods) Insurance Fund if the liabilities of that Fund had, in the event, proved to be as large as was originally estimated. As I have said, this sum amounts to $2 millions, has already been voted, and is now held in reserve.

Lastly, Sir, I would like to make it clear that this contribution will go to reduce the Colony's liability in respect of repayment of her share of the interest-free loan. The total amount of loan money required for the Fund is estimated at the present time to be about $140 millions, of which Singapore's share will, I think, be of the order of $35 millions. This contribution of $2 millions will reduce the liability by a corresponding amount.

Sir, I beg to move.

Mr Braga: I second it.

Question proposed.

Mr Lim Koon Teck (Paya Lebar): Mr Speaker, Sir, I entirely agree with this motion. It will be a good gesture on our part, because we have had considerable help from Her Majesty's Government at a time when the finances of the Colony were low. Now that we are in a fortunate position where we have built up a considerable reserve, I agree that we should do what we can to reimburse Her Majesty's Government.

Question put, and agreed to.

Resolved,

That this Assembly resolve that the sum of $2,000,000 should be supplied to the Government under the Heads of Expenditure and for the Services specified in Sessional Paper No. Cmd. 19 of 1955.