MALAYAN AIRWAYS AND PUBLIC UTILITIES (MALAYANISATION)

Mr Lee Kuan Yew: Mr Speaker, Sir, I have taken advantage of the right to speak on this Adjournment to raise the question of Malayanisation of Malayan Airways and of other public utilities. The other public utility I have in mind is the passenger road transport industry. However, there is at the moment on the Table of this House the Report of the Hawkins Commission on Passenger Transport. I shall therefore confine my remarks to the Malayanisation of our air transport industry.

Mr Speaker, Sir, it is often the case that, where something essential to the community is not profitable, the State finally takes over, like the Malayan Railways, but where it is profitable, as in the case of the passenger road transport and passenger air transport industries, they are left in private hands. There are two reasons why we must rapidly put our house in order:

(1) We are approaching independence and the less trouble we have when we take over, the more efficiently will the industries be run after independence; and

(2) Unless we have a definite policy now, we may make it almost impossible to take over the industry immediately after independence.

The Malayan Airways operates under Government franchise which gives them a monopoly. The Hon. the Chief Minister was an advocate against that monopoly. He pleaded powerfully and persuasively against making Malayan Airways a complete monopoly for Mansfield & Company Limited, but that is not what I am so concerned with today. The franchise of that Airways is due for re-consideration by the Government very shortly - I understand in April. I understand also that this is not a matter which affects Singapore alone and that the Federation Government is equally interested.

The Chief Minister: And Borneo.

Mr Lee Kuan Yew: And Borneo. But I have sought on this motion to draw attention to the fact that we have to do something about it. We cannot just renew the franchise on the old terms. If it is renewed, it will be renewed probably for another seven years and I feel confident that we will not wait seven years for Merdeka. One of the important things about renewing the franchise is that this is the time to alter those conditions. If a franchise is to be renewed, this is the time to enter into a new relationship with the present proprietors of Malayan Airways. It might be to Government's advantage to take over 51 per cent of the shares in order that it can have the controlling voice in the running and management of Malayan Airways, but in order that there may be no break in managerial continuity, the Company might be allowed to retain 49 per cent. But I put that in as a suggestion regarding the possibilities of creating a new combination or a new type of management of Malayan Airways.

Malayan Airways has been going on for seven years and one of the terms in the franchise is that it should encourage the training and employment of local personnel. Every independent country - Burma, Indonesia, Ceylon, India, Pakistan - has an airline which flies the national flag. It is part of the trappings of an independent country. We have Ceylon Airways, Air India, Garuda, Air Burma. The management is good in some and bad in others. Apart from the international air transport problem, we should start Malayanising our own internal air transport personnel. Malayan Airways, after seven years, have only trained three pilots. They have recruited nine other local men who received their training as pilots independently of Malayan Airways, in the Chinese Nationalist Air Force, in India, Australia and elsewhere. After seven years, all it has been able to show on the balance sheet - and I am reading now from the memorandum of the Malayan Airways Local Employees Union - is that there are twelve Asian First Officers, thirteen expatriate First Officers and twenty-five Captains. No aircraft can fly without a captain and a first officer. In other words, no aircraft in Malaya can be flown without an expatriate on board. That is not what one could call a healthy situation.

We know, and the Hon. the Chief Minister knows very well, the difficulty of finding men to fill the top jobs when there has been a long period when men are kept down at the bottom. The reason for it is not only that Malayan Airways does not train them, but actively discriminates against their employment. For instance, before the elections and before Malayanisation became a real scare to all Europeans, they were paying their local pilots less than one-half of what they were paying their European pilots - job for job, qualification for qualification. They paid a European, on entering at the top of the service, $1,450 with $250 marriage allowance, $300 housing allowance, $400 expatriate inducement allowance, $75 licence allowance. They gave further privileges like home leave, dental treatment, accident insurance, and hospitalisation. The local officer got $1,150 - less than half. In the case of qualified engineers, a locally qualified engineer was getting one-third of what his European counterpart was getting. When in the course of negotiations the European directors were told that this is a new era - post-Rendel - and that there is a very "fierce" Chief Minister who is in favour of Malayanisation and who might be influenced by the attitude of the Company on Malayanisation, only then did they say, "Right, we shall give them the same basic pay as the European." That made it go up to one-half of what the European was getting because the European still has a marriage allowance, a housing allowance, an expatriate inducement allowance, a licence allowance, a leave allowance, dental treatment, accident insurance and hospitalisation which the local man does not get. Sir, to give an indication of the enormity of the discrimination, may I just say that when they increased the basic from the 1st of September last, the local man was paid $500x25-600. After the 1st of September, he was paid $800x25-900. He got, in fact, a 60 per cent salary rise in the basic alone but he still does not get any of these allowances. Then the Company, with the doggedness typical of all European businessmen fighting a last ditch stand, said that henceforth they would have a new scale for expatriates and Asians alike. They reduced the scale from $800 to $650x25-900. Then, with a wangle, which might have done credit to the Establishment Officer of the local Government, they said that they would take on new recruits at this new point of entry - much lower -

The Chief Minister: On a point of order, Sir, it may well be that this company wangles, but I do object very strongly to the suggestion that any officer of the Government wangles. If there is any such suggestion, Sir, I would like facts. In the meanwhile, I ask leave that it be withdrawn.

Mr Speaker: I have said time and again that my hands are tied by Standing Orders and the only time that a Member is out of order is when, amongst other matters, he imputes improper motives to any other Member. So it seems to me that if a Member desires to say something derogatory of an official of the Government, it is up to a Minister of the Government to reply to that in due course.

Mr Lee Kuan Yew: Mr Speaker, Sir, I feel that some of us have perhaps not been following the evidence submitted to the Malayanisation Commission. Those who have will know all the instances that have been cited ad nauseam to justify what, in my opinion, is very moderate language.

However, as I was saying, having had to concede because of the change in the political situation, the Company then contrived to introduce a new plan whereby they could bring European engineers from Australia or elsewhere and put them at a higher point of entry, whilst the Asian would go in at $650. That could be quite simply done with no apparent racial discrimination by bringing in the question of previous experience. For instance, a man has been a corporal in the Royal Australian Air Force; although he did not have an engineering licence at that time, the moment he gets that licence, the Company then says, "Ah, yes, here is a man who has had seven years in the R.A.A.F. and knows all about Dakotas." So, he will get $650 plus seven increments. Well, that is the sort of thing that just poisons the whole relationship between Malayans and Europeans.

I have here a memorandum of the Malayan Airways Local Employees Union - this is not my language - and this is the way in which they have put it themselves:

"The expatriate engineer does only supervisory work while the Malayan engineer, holding identical qualifications, is treated as and made to feel a glorified mechanic whom the expatriate engineer regards not as a colleague but as a dangerous rival."

This business of treating the men differently goes to such an extent that the local engineer has to find his own way to work. The expatriate engineer gets a Volkswagen to collect him and send him home. Now, with Merdeka in sight, the Company has decided that, in so far as it is possible, it will divert the Volkswagen to where the local engineers are staying but that if this is not possible, either because the Volkswagen is already full up or otherwise, it will pay a small allowance to the local engineer to find his way to work.

Sir, all this is happening in a public monopoly, which operates under the franchise of the Singapore, Federation and Borneo Governments. All these matters should be carefully considered with a view to the taking over of the whole airline. We must so arrange things that in the not too distant future we should be in a position to take over Malayan Airways lock, stock and barrel and run it -

An hon. Member: Stop it!

Mr Lee Kuan Yew: Stop it? We shall have bigger things, better things, better services. We shall fly the flag throughout the world, just as all the other independent countries are doing. We may even re-design our flag - that is a matter for some other time. But for the time being, what we are interested in is to see that this private British company is not allowed to continue with a Government monopoly in the way it has. In seven years, it has only trained three local pilots. In seven years, it has trained only ten local engineers. It engaged fifteen boys in 1948. Five left because they were frustrated and because there were no prospects of training or promotion. Ten remained. Since 1948 there has been no further recruitment for training. That is the kind of private enterprise which has helped to sour the whole of the political situation in Malaya.

I hope the Minister for Telecommunications and Works will be able to give us some information as to -

The Chief Minister: Now, where does Telecommunications come from? Has not television been finished with?

Mr Lee Kuan Yew: Telecommunications? I beg your pardon. Is it Communications? One gets confused by all these wordy Ministries.

The Chief Minister: After ten months!

Mr Lee Kuan Yew: What I hope he will do is to give us some indications. I well understand that his hands may be tied because he will have to consult other Governments, but I hope he will give us some indication of the factors, which he is taking into consideration when renewing the franchise.

Mr Francis Thomas: Mr Speaker, Sir, I hardly know where to begin, but let us begin anywhere. It does not matter much where. Perhaps I can begin by passing the Malayan Airways agreement across to the hon. Member. He referred to a statement in this memorandum from the Local Employees Union of Malayan Airways, that the franchise included certain conditions about the Company employing and encouraging the training of Malayans. I have only a short time before me. If you can find it in the agreement, I shall be very interested.

Mr Speaker: Will the hon. Member just place that on the Table?

Mr Francis Thomas: I lay it on the Table and if some Members are interested -

Mr Speaker: Is the hon. Member addressing me?

Mr Francis Thomas: I beg your pardon, Mr Speaker, Sir. However, that is by the way. I am not concerned about arguing the question of what training has been given in the past or what should have been given. But just as a matter of record, I think that it is important to note what actually is in the franchise. I have not been able, at a cursory glance, to establish the truth that they are bound to give training to Malayans. It may be that they ought to have.

The Member for Tanjong Pagar was anxious that we should give early consideration, because on the 30th April this year we have to give notice to the Company. In fact, consideration has been going on for just precisely two years. The first opening letter in this file from the Director of Civil Aviation in Singapore is dated 9th March, 1954, raising the question of the future of Malayan Airways. Ever since, the matter has been under discussion and a very great range of possible futures for civil aviation has been discussed. There are very complex and technical factors included. It is delightful to think of larger aeroplanes and more of them and so forth, but that is not necessarily the right approach. A large aeroplane introduces a number of technical factors - whether it is the length of the runway, or whether it is the economic pay-load, which has to be considered. Merely to have a larger aeroplane so that you can show the flag on it would not necessarily be a sound economic policy.

There are also a number of other points to be considered. If it is felt that consideration has gone on too long, I must endorse and stress what the hon. Member himself has said, that although Malayan Airways is based in Singapore, its base is all that it has in Singapore and all its flying territory lies outside this island. It has an agreement with the Governments of the Federation of Malaya and Singapore. It also operates in Borneo as Malayan Airways and as a subsidiary as well. It also has certain other services, which are not enormously significant, and, of course, it could possibly expand into a regional or territorial service and not merely a local airline service. These are all possibilities which have to be considered but which are not matter for a statement at this stage.

I cannot, I am afraid, go into much detail about the points in which the Member for Tanjong Pagar is specifically interested - the question of the Malayanisation of the staff, whether it is air-crew or ground engineers of the Malayan Airways, or on negotiations which have to take place between the Governments concerned. I must comment, in passing, that even the word "Malayanisation" is inappropriate. If they are going to operate in Borneo, then the Borneo territories will emphatically demand "Borneonisation", and as soon as we use accidentally the word "Malayanisation", there will be an immediate reaction from Borneo, "You cannot do that here! We do not want Malayanisation!" A Malayan in Singapore is an expatriate in Borneo, or he may be held to be so, and, unfortunately, Malayanisation is not quite the appropriate term for -

Mr Lee Kuan Yew: Confederalisation!

Mr Francis Thomas: Yes, we will get the reality and then find the name for it, I hope! Now, on the question of Malayanisation, there are one or two points that I think I might profitably raise (without anticipating future negotiations) on the figures supplied to me about six or seven months ago. The Asians or Malayans now employed in the Malayan Airways air-crew will have to be expanded by about 400 per cent. You multiply them by four to get enough to provide all the pilots and chief officers, captains and whatever the appropriate ranks are. For the ground engineers, you have to multiply them by three. In other words, you have got a lot more expatriates than you have Malayans at present, and if you want to replace the expatriates, you have to get a great number of Malayans. It is not a matter of one or two people. It is a matter, as I say, of multiplying your present Malayan staff by three or four times and it does take two years to train a pilot and three years to train a ground engineer, so that there is necessarily bound to be a lag before you can replace expatriates by Malayans. That is significant because you may have to be most anxiously seeking for Malayans to replace the expatriates who are likely to go. The information I have received is that already there is a significant outflow from the engineering side, and as everyone knows, pilots, engineers and all technical people can pick up excellent jobs anywhere in the world. And if they think that their future is not secure in this country, they will not wait for a year or two until they are chased out. They will look around, read the technical papers and find a job that looks permanent and profitable. It may be that we should prefer them to stay on until we were ready to replace them but they are very likely to say, "Well, my family, myself, my children, my future and my career come first, and I cannot afford to wait in a place where I am going to be replaced very soon. I had better get off straightaway. There is a nice opening and I will take it and get myself re-established elsewhere."

I am not going into the rights and wrongs of this matter in the least. I am merely pointing out that, as far as I can judge at the moment, the indications appear to be that it is not so much that we have no places for the Malayans as we have not enough Malayans for the places. I am not giving that as a statement of fact. I am looking at it as far as I can guess from the rather limited information available.

I would stress also that we would have to have careful training and satisfactory experience after training, because, whilst in certain services you can perhaps take a chance on a man's fitness, whether he is really able to do the job that he is trained for, when you are flying through the air with thirty or forty or fifty lives depending on one touch of the rudder or whether you come down on the right part of the airport or come down too far or too short, you have the possibility of destroying fifty people's lives. You have also the possibility of destroying the repute of your national airline. An airline which has frequent accidents will very soon cease to have many passengers. Malayan Airways have a remarkable record for accident-free flying, which is an undoubted asset both to themselves as a company and still more to this territory as a place which has satisfactory aviation communications, where you can get into a plane as you will get into a bus and feel that you will safely arrive at the other end without having suffered any serious damage.

I do not think I need go into the question of precisely how many people Malayan Airways have trained. I wish it was more but I do not think that it is quite as small as the hon. Member thinks. It remains for me to say that all the factors which the hon. Member has stressed are ones which have been most anxiously considered and which are still being considered and which are the subject of negotiations. It would prejudice negotiations if I were to attempt to indicate precisely where we have got to or precisely what we are attempting to do. Moreover, I could not do so in honesty without previous consultation with the other Governments which are also parties to the negotiations. I very much regret to say that I cannot say very much more beyond assuring the hon. Member and all Members of this House that everything that we feel it is possible to do in the circumstances to ensure that our local civil aviation is Malayan in its organisation, in its staff, in its services, and in its capital structure, will be done, but precisely what will be done I cannot say.

The Chief Minister: If it please you, Mr Speaker, Sir, I would like, very briefly, to make this statement to supplement that of my colleague and friend, and that is that any new arrangement which may be arrived at, whether involving Malayan Airways itself with a new franchise or not, after the end of the present franchise will be submitted to this House. This Government is not issuing any monopolies under any prerogatives without the knowledge and consent of the House, and I quite agree that the question of Malayanisation of the Malayan Airways staff will be a material factor in consideration of Malayan Airways' application or interest in any new arrangement.

Mr Goode: Sir, I should like to support, for the record, the remarks made by the Hon. the Minister for Communications and Works on the standard of service which has been provided in this part of the world by Malayan Airways. I am not briefed by Malayan Airways as the Member for Tanjong Pagar is briefed by the Union, but I would like to put on record, as a matter of fact, that in Malayan Airways we have in this part of the world one of the most efficient local air services to be found anywhere, bar none. They have an accident-free record which, God willing, they may long, long keep and they are one of the few that do not have to be subsidised.

Mr Lee Kuan Yew: How much money have they made?

Mr Speaker: Order, order. We have reached the time appointed for the termination of business.

The Question having been proposed after Four o'clock p.m. and the debate having continued for half an hour, Mr Speaker adjourned the House without Question put, pursuant to the Standing Order.

Adjourned accordingly at thirty-one minutes past Four o'clock p.m.