APPROPRIATION BILL

Order read for resumption of debate on motion-[7th November, 1956]:

Question again proposed, "That the Bill be now read a Second time."

10.15 a.m.

Mr Lim Choon Mong (Serangoon): Mr Speaker, Sir, it seems to me that it is usual for the Financial Secretary year in and year out to tell us that we must be taxed more and that the future is bleak. In fact, such a warning was given by the Financial Secretary in the Official Report, Vol. 1, No. 19, dated 21st November, 1955, at col. 1063 where he said that he was not going to be accused of crying wolf once more and that we were going to be faced "with the hard reality of actual deficits". Now we are coming to the end of 1956 and we know the exact position, and the position is that we still have a surplus. Invariably there is always a surplus in the matter of collection of taxes. This fact is known by everybody almost every year and in effect the Financial Secretary admits it. On page 1 of his Budget speech he says:

"In all, it seems likely that revenue collections will amount to about $217 million compared with the estimate of $215 million."

Here again, Sir, the Financial Secretary admits that the estimate for tax collection is always low, whereas the estimate for expenditure will always be higher than it should be. Why is it so? I think it is just to create the impression that additional taxation is necessary.

On page 2 of his Budget speech in the second paragraph, he says:

"...that the working for 1956 will show a small surplus, possibly of the order of $2 or $3 million."

This is an admission by the Financial Secretary himself, Sir, and it is important.

Again on page 5, in the fourth paragraph, he says:

"...actual expenditure has in the past in variably fallen short of the estimate. It is likely that this will occur again in 1957."

And again on page 6 the same tune is played, and here he says:

"...it is possible that actual expenditure will fall considerably short of the estimate."

Sir, in his Budget speech the Financial Secretary has drawn our attention to the fact that expenditure will not be as high as has been put forward in the Estimates. It is significant that he has drawn our attention to it more than once and, because he is supposed to be an expert on the subject, we must believe that expenditure will definitely fall short of the estimate as presented by the Government. Now here we have a case where every year you are going to have the collection of revenue more than the actual expenditure which, according to the estimate put out, will be less than what is presented to us, and in the end there will always be a surplus. This has been going on through the years. Every year we have had this state of affairs, and this leads us to ask the question whether there is any necessity at all for further taxation.

I think, Sir, with all the warnings by the Financial Secretary that the future is bleak, we must tighten our belts, we must pay more, expenditure is mounting and all that, all this tends to give the impression to hon. Members in this House as well as to the public at large that we are in real need of further taxation when, in fact, from all that has been said, there is no necessity at all. Perhaps it is just the way with everybody, just like boys between the ages of 8 and 10, that it is a habit to hoard some money. It is just an instinct with Government, I think, to want to feel the money in its pocket and jingle it and say, "Now, I have the money and if I want to spend it on anything extravagant, I can do it. There is no need to cut my coat according to the cloth. There is no need to think of saving on this little item or that. The public will pay whenever we tax them, because the power is in our hands. So long as we have money, well, it is public money, although we may have contributed a little to it in the way of income tax. So let us spend it, let us be generous with it." If that is the case, Sir, I think it is absolutely wrong. We are here as guardians of the people's money. We have to spend it wisely. We must think of every cent that has to be spent. It is because it is other people's money, the public's money, that we should exercise even more care in spending it or even in wanting it. I cite you one case, Sir. The Government promised us something last year during the debate on the Second Reading of the Appropriation Bill, but I am still looking forward to that promise being kept. I refer hon. Members to the same Official Report that I have just quoted from, this time at col. 1010, where the Chief Minister (he is now the Member for Cairnhill), in reply to a question by my hon. Friend the Member for Tiong Bahru on the question of the personal emoluments of the civil service, said:

"I am far from complacent about the expenditures of the Government. We have been seven months in office, Sir, and this sort of axing is not done in a day. I certainly intend to pursue methods which I have in mind for greater reduction in expenditure in the future."

Here, Sir, was a promise by the then Chief Minister to look into the matter of the expenditures of the Government. Today, Sir, we still have, with the exception of one Member, the same people sitting on the Government Front Benches, and I expect that, because it is a Labour Front Coalition Government, it will carry out the same promises that it has made to the people, and I hope that regarding this matter it will carry out its promise. According to the Budget, however, I think the increase is in the region of $98 million to $113 million. That is a big jump for personal emoluments. I think the Government in this matter did try and tell the public, "We will try our best and streamline the Government. We have, in fact, an Organisation Committee to streamline everything, to advise us on methods, to advise us on ways and means of giving a more efficient service to the public and at a lesser cost." Yet, with all these methods and streamlining experts, nothing substantial has been produced. In fact, if we draw a graph on a matter of expenditure of this nature, we will find that it goes on -I will say Y is equal to MX plus C, which is a straight line graph, showing that it is going up all the time. Nothing more.

Now let us consider again whether Government actually needs all this extra money by taxation for next year's Budget. During the Second Reading we heard from the Financial Secretary that the relief for income tax will be lowered from $3,000 to $2,500 for a single individual, and that this is a "must". Sir, I have received news again through the Press that the Government has waived that reduction and has restored the floor for income tax to $3,000. This is really commendable - that the Government can still take heed of public opinion. I do not quarrel with granting relief to people paying income tax, but one thing which strikes me is this. Here you have a government telling the people that we need more money. We must raise our money by income tax and by more tax. We must raise money by taxing cigarettes, by taxing on other vices like sweepstakes and so on. We must have direct taxation. We must have indirect taxation. All these are "musts". And after the Government has said that all these are "musts", we find that suddenly, because there is pressure from outside, it is going to be unpopular, people are going to throw mud at the Government more than is necessary, the Government says, "Oh no, we are going to replace that $500 tax relief. No, we do not need that much money from taxation of that kind. We can make up for that. We can still spend our money and not feel the shortage." Let me put the case this way. If the Government needs money and collects it by that sort of taxation, and then it withdraws the proposal to impose that kind of taxation, then I believe that every time it wants to impose a tax on something and enough opposition is whipped up against it, I am sure the Government will in a similar way withdraw and say, "We will withdraw the taxation - ".

Mr D. S. Marshall (Cairnhill): We are democrats and not dictators.

Mr Lim Choon Mong: Exactly, exactly! So we have this sort of affair going on every time. The Government says it is going to tax something and that it is a "must", but when it comes up against opposition, it withdraws. So its "musts" are actually elastic ones and not like an unbending metal rod. You cannot twist it, nor can you bend it. In fact, I think there is no necessity whatsoever for any taxation. There is no need for increased taxation. You can spend the amount of money derived from the old tax and that will be more than sufficient.

Now let us look at the proposed taxation programme of the Government. The first item on the list is income tax. I would like to draw the attention of the Government to its old election pledge - that it will only tax those who are most able to bear the burden. It is a very good idea but the point is how to carry it out in practice. Theory is one thing, practice is another. If you say one thing is good and then you do not practise it, then what will people think about you? Not much, I am afraid!

Mr Marshall: He is talking!

Mr Lim Choon Mong: I am talking! In the matter of taxation there are two ways. One is direct taxation, by way of income tax. The other is indirect taxation. If we have direct taxation, and income tax, then we really put the burden on those who can best bear it, because in income tax those who earn more will pay more and those who earn less will pay less. I think that is the fairest way of taxation. In the matter of indirect taxation, you find so many people in the streets - whether they are rich or poor - indulge in their little vices and their bad habits with no distinction, and, in fact, many of the rich do not. So, if any money is to be drawn from the public, the rich man will pay his little share, probably in the ratio of one in half a million. I am talking of adults. I do not know, but it may extend to young people, and that will even make the share of a rich man less. On this type of taxation you tax not only on the bad habits of the people, such as smoking, gambling and drinking, but I am afraid that it will also touch on the daily necessities of everybody. I will come to that soon enough. So if the Government is going to carry out its policy and say that tax is going to be imposed on those who can best afford it, it must not have direct taxation and then indirect taxation. Indirect taxation must be reduced to the absolute minimum.

The Minister for Education (Mr Chew Swee Kee): No schools, no teachers!

Mr Lim Choon Mong: Do not worry about that. We will have plenty of them! It is only a matter of how you spend your money.

Mr Chew Swee Kee: Manufacture it!

Mr Lim Choon Mong: There is no need to manufacture anything of that sort. On a matter like this, it is just like a firm engaging a manager. The manager will say, "We will spend this and we will spend that and we will gather our income this way and that way." But if at the end of the financial year it is found that the manager is not going to make his ends meet, not only will the shop have to close down but the manager himself will get the sack. He will be very glad to supplement the tax programme of the Labour Front Coalition Government if he gets unemployed! Let us come back to the first item of taxation - income tax. The Government is now proposing to do away with the lowering of that $500 relief, but it still intends to do away with the three per cent and the four per cent and change these rates to five per cent. Sir, in this connection the Financial Secretary stated that a programme like this would bring in an income of roughly $1.5 million. This is a small sum, but if the Government takes away that $500, as it intends to do, and only changes the rates of three per cent and four per cent to five per cent, then the only people who will be affected will be the present income taxpayers - only 19,000 persons. It can easily be calculated that each person is going to pay the Government roughly -

The Financial Secretary (Mr T. M. Hart): $15 on chargeable income.

Mr Lim Choon Mong: $15 extra. So $15 multiplied by 19,000 comes up to a very negligible sum.

Mr Marshall: Quarter of a million dollars.

Mr Lim Choon Mong: Good for one trip to Kuala Lumpur or Hongkong or a trip to England to observe transport! Sir, it is my firm conviction that such a revision of taxation, which brings in no visible increase, no substantial increase, should be dropped immediately. In fact, the people who are being taxed now - the 19,000 people - are paying quite a large percentage of the revenue of the country.

Mr Marshall: Not true.

Mr Lim Choon Mong: What we need is a more efficient Income Tax Department to bring in those who have not yet been taxed but are within that taxable range. As far as income tax is concerned, Sir, I know that we only grant relief to the income taxpayer, his wife and his children. Let us remember that we are living in the East and in the East the set-up of the family is entirely different from that in the West. In the East the parents are considered as an integral part of the family, in fact, the most important part of the family. When the children grow up and after they have obtained their education and are able to earn their living, they will, by custom and tradition, support their parents. In fact, it is their duty to do so. This, Sir, is one of the best attributes of those who live in the East. The family ties are strong. So we have here the case of the taxpayer supporting his parents, instead of the father running along to the Social Welfare Department and saying, "Sir, I have no job and my son is not supporting me. I must live on the public dole." The public dole is $15 per person. If you calculate the number of old parents who depend on the dole, you will find that the money given out comes up to a very sizeable sum. That sum of money should have come from Government, but it is saved for the Government. Why is this expenditure saved? Because of this Chinese tradition, that the son who is able to earn a living should support his parents.

We in this House, Sir, have declared ourselves to be staunch supporters of the cultures of the East. We have said that we support Chinese culture, Indian culture and so on, but we must prove that we are really supporting it by implementing measures which will convince the public at large that we recognise that fact and that we will do it. The Government has had troubles with the Chinese school students who said, "You are destroying Chinese culture", and they told the Chief Minister, "Chinese culture says that we must hsueh hsi" and the Minister for Education said, "You must respect the teachers and honour your parents." Here, then, is the opportunity for the Government to ram home the fact to the people of Singapore that it is going to uphold Chinese culture and it is going to amend its laws in accordance with the way of life of the people in the East. If you are talking about the West, then you may object to my talking about people in the East. But let us also talk about England. Let us talk about America. These are countries that the Government likes. In America and in England you still have relief for parents, and if you look it up, you will find that in special cases they give allowances to such people. So why cannot we in Singapore do that? If we do that faster and quicker, it will be better for us. [Interruption.]

Regarding the 3 per cent and 4 per cent rates of taxation again, Sir, it is contrary to the principles of the Labour Front. The burden of taxation will not be on those who are more able to bear it, but it will be on everybody who pays income tax; in other words, everybody must pay additional tax. Whether it is $15, or $10, or $2, or $1, it is still taxation. If the Government obtains $1 by income tax, $5 by taxing cigarettes, $10 by taxing petrol, and so much by another kind of taxation, you will find that the poor worker will have to pay, not just $5 or $10, but much more than you think they do. Now it is said that $2, $5 or $10 is a very small sum, but let me tell the Government this - the value of money today is not what it should be. If you compare the value of money in 1940 with what it is now, you will find, in all probability, that the value of money now is only one-fifth of what it was in 1940. I am putting this case not because you must spend more, but because I am going to talk about the taxpayer -[Interruption.]

Mr Speaker: Order. If the hon. Member will address his remarks to the Chair, I think he will not be interrupted so frequently.

Mr Lim Choon Mong: Yes, Sir. The barrage has started from the opposite Benches, Sir, and it is only right that they should receive a salvo in reply!

Sir, I was talking about the poor income-tax payer. We tax on $3,000, but if you think about its value as compared to 1940 or so, it will roughly be $600 and that will work out to $50 a month, and $50 a month even in 1940, Sir, would not ensure a person a good standard of living. This person will not have sufficient for his needs and, because of the set-up in the East, it is not only his parents that he must feed and look after, but once in a while one or two unemployed relatives will come running to him for a little financial help - it may be $5 or $10 - and sometimes these unfortunate people may have to be given shelter and lodging, and further he may unwillingly have to take in a helping hand. My contention, then, is that income tax relief should not only be restored as it is now to $3,000, but also include further relief for parents. Everybody recognises that it is the duty of children to honour their parents. It is one of the Commandments in the Bible. So it is with the Muslims and the Indians, too. It is with everybody's belief. Let us show them that we are different from the West where parents can be left out after they have brought us up. The old folks go to old-age homes. They get government dole. They get old-age pensions. As an illustration, I know that the following case can happen in England. If I am a friend of the son and I want to go to another place where the son's father is staying, the son will send his father a cheque, say, of £5 and he will ask his father to entertain me on his account. The son will then tell the father to send him back the bill for entertainment expenses and also to send back the balance if there is any remaining. I have known cases like this personally, but in our Chinese set-up, it is not like this. My father's friend is my friend and my friend is also my father's friend, and if my father has not enough money to entertain his friend, it is my duty to give it to him. And if I cannot afford it but my father can, he will do it for me. When my father brought me up, he gave me everything that I had and now it is only a return of his generosity. Nothing else.

We have, Sir, the Financial Secretary telling us that in the United Kingdom people are being taxed much more - 7½ per cent at the minimum. He says we have lower taxation here and we still grumble. I will not grumble, Sir, if we follow it even in the higher ranges of income. But I am not going to follow little bits here and little bits there just to suit the purpose of the Government. No, Sir, I am not.

Then we have the tax on tobacco. Oh, tobacco is not essential! If you do not smoke cigarettes, you will not starve and you will not die! Yes, Sir, I agree with his views. So we increase the tax on cigarettes. So the poor man in the street, after hearing of the increased tax on cigarettes by the Government, will make a resolution and say, "I shall not smoke from today on." Other people will make the resolution, "Whereas in the past I have been smoking ten cigarettes a day. I will now cut it down to three."

Mr Marshall: Smoke local cigarettes.

Mr Lim Choon Mong: Sir, whether it is local cigarettes or high-class cigarettes, it comes to the same thing, it is still cigarettes, no matter what it is. And all the resolutions about breaking off the habit of smoking cigarettes will be forgotten in a week's time, and so the poor worker will come back again to the original position of smoking as much as he did before and he will not change his brand of cigarettes either, because he is addicted to that, Sir. Then what happens?

An hon. Member: Support local industry!

Mr Lim Choon Mong: Money is again taken from the working masses. I am not prepared to quarrel with higher taxation on cigarettes, not like the P.A.P. The Government can carry on taxing cigarettes. I will not also say that I am going to criticise it severely, but there is one aspect of the matter which I think the Government should know and should study very carefully, and it is this. The poor man will now have to pay more for his tobacco. His source of income is only from his employer; and if he has to pay more, it means he will have less for his family; and if he is going to have less for the family, he is not going to be contented. He is not going to sit down and say, "Well, son, we are not going to have fish today. Let us have dried prawns." So, somehow or other, he will have to take it out from his employer. The consequences of increasing taxation, so that the poor people will have to pay more, will be that they will have to demand higher wages; and if they demand higher wages, then there will be higher costs of production and sooner or later you may not be able to compete with manufactures from other countries. Support your local industry when probably you will be manufacturing just sufficient for your local consumption and will not be able to export - that will be a sorry state of affairs.

Let us now look at the tax on driving licences, Sir. It is again a very small sum. Who cannot afford an extra $3 a year? It works out to exactly 25 cents a month, so said the Financial Secretary. An extra few dollars for petrol; another extra few dollars for tobacco; and with the spiralling of prices and inflation and so on, again it hurts the workers. Again the burden of tax is not placed on those who can bear it.

An hon. Member: On the tuan besars then?

Mr Lim Choon Mong: Oh, yes, you will usually find that the tuan besar sits in his motor-car and a syce, whose pay is roughly $100 a month, will drive it. How many tuan besars will worry about $3? If the Government ever says that they are worried over this $3, then tax them. But I affirm that the increase of driving licence fees is a taxation which is aimed at getting money not from those who can afford it but from the general masses. It will hurt them to a greater or lesser degree.

Last year, Sir, we heard that there would be an increase of only five cents per gallon on petrol. That would not hurt. Five cents would not matter. Everybody could afford to pay an extra five cents. Then this year we are told that there will be an increase of seven cents per gallon on petrol. Sir, I find it very tiring to hear that whatever other people do, we must do. Whether it is right or wrong, let us do it. Why? Because somebody else has done it. Sir, my argument is this: last year the increase on petrol was five cents a gallon; this year it is seven cents; next year it may be 20 cents; another year it may be 40 cents; and so on we keep on adding, and each time we are told it is only a small increase. Sir, as an example, let us take a piece of cake. If we keep, on cutting off small pieces, there must come a time when there will be no more cake left. If the tax on petrol is increased, but we have a good transport system whereby everybody can get a bus easily, then I will not quarrel with that, but our transport system is horrible.

The Minister for Communications and Works (Mr Francis Thomas): Hear, hear! [Interruption.]

Mr Lim Choon Mong: Sir, one day I was waiting at Finlayson Green for an omnibus, and do you know how long I had to wait for that Singapore Traction Company omnibus? One hour to be exact - half-past four until half-past five in the evening. [Interruption.]

Mr Speaker: Order.

Mr Lim Choon Mong: Sir, as an Assemblyman it does not prohibit me from taking an omnibus, or for that matter any kind of transport. In fact, Sir, every Assemblyman here should try and live the life of a simple worker so that he can understand the conditions under which the worker lives. What is the use of talking in the Assembly that he is working in the interests of the worker when he does not know how a worker lives? Now that is the state of affairs prevailing. There is no good transport system. Therefore, small cars costing $3,000 or $4,000 each, with a consumption of 50 miles a gallon or so, are an essential part of the transport system, and although they are private transport in that they carry the owners or the owners' friends, still they assist in the transport system. Sir, if these small private cars were to break down and thereby prevent the transport of children to school, imagine the chaos that would take place. I think it did happen once. Even with the use of lorries, how many hours do you think it will take to bring the children to and from their schools? Sir, the increased tax on petrol will definitely affect transport. In this case, it will, of course, affect the middle class of people, those who own small cars for a small family. But to those who are in the very high income group, whether petrol is going to cost $2 or $3 or $5 or $10 a gallon, it does not matter because money comes in easily and they have enough to eat, to entertain their friends and also enough to spare.

Then, Sir, there is the tax on gin and rum.

An hon. Member: Poor man!

Mr Lim Choon Mong: Sir, I hear the words "poor man", but I say this - those who increase taxation of this kind are only aiming to protect those who can afford to pay more taxes.

The Minister for Commerce and Industry (Mr J. M. Jumabhoy): Who drinks gin?

Mr Lim Choon Mong: It does not matter, Sir, whether it is gin or rum or whether it is the purchase of a sweepstake ticket. The buying of sweepstake tickets is indulged in not by the rich mostly but by the poor who hope one day to win a lottery and then be in a position to live in a big house and have nothing to worry about. Of course, if we tax more from this bracket of people, then we need to tax less from the higher income group. That aim, Sir, is contrary to the principles of the Labour Front. I am only telling you, Sir, what the Labour Front has promised us and what it should carry out.

An hon. Member: Join the Labour Front.

Mr Lim Choon Mong: God forbid, Sir! I will not join the Labour Front. In fact, I wish they might join me so that we can have cleaner air and a more efficient system of running business.

The next taxation is on cars - ten per cent on every car. Whether that car is going to cost you $3,000 or $7,000 or $10,000 or $20,000, it is ten per cent tax. I do not quarrel with that. I do not say that car tax is wrong. In fact, I think car tax is quite right, but I just want you to think in this fashion. We have many people who are just earning an income of $400 or $500 a month, and because of the present transport difficulties, they save up to buy a car. I ask you, Sir, how long will it take a middle-class wage-earner to save up $4,000 to buy a car? It takes a lot of time. If the tax is increased another ten per cent, it means another ten per cent of the time to save that money. What is about to be within his reach is now a little further away. Let us then see how it affects the people who are going to buy cars costing $8,000 or $9,000 or $10,000. They will go to the salesroom and tell the manager to show them the best cars. "$11,000? Oh, just send me the car and I will sign a cheque for it." There is no such need for saving. The money is there ready. Whether the increased tax is ten per cent or fifteen per cent, it does not affect them very much. It would have been saner and more acceptable to the public if such taxation were done on a sliding scale, like that of income tax. You put a tax of five per cent on a car costing. $4,000 c.i.f.; ten per cent on one that costs $6,000 or $7,000 c.i.f.; 15 per cent on one that costs $8,000 or so; and 25 per cent or 30 per cent on one ranging between $10,000 and $20,000 c.i.f. Taxation on such a scale would have been fairer and more acceptable; something that would go along with Government's declared policy. How often must I remind them of their policy, Sir?

To cap it all, Sir, the Government say that they must have luxury tax. If it is expected that the people of Singapore will say, "Yes, we will agree with luxury tax, because it will not affect us," I think the people will be badly misled.

Mr Marshall: How do you know?

Mr Lim Choon Mong: Past events, Sir, have made me wise. The first item that comes into our head as a luxury will be an air-conditioning set. Yes, everybody will echo that. Then the next item will be something that will not evoke many "yeses".

Mr Marshall: Yes.

Mr Lim Choon Mong: Sir, not from people who earn about $13,000 a month audited income! Then we go along to the next item on the luxury list - jewellery. Oh, yes, diamond earrings and bangles are luxuries. The poor worker goes into a goldsmith's shop and asks, "That gold bangle that I am about to buy, and that little gold ring, are they luxury items?" The definition of the law says it is so and you have to pay tax -

Mr Marshall: No.

Mr Lim Choon Mong: Many more "noes" will come in this direction. When you start to define "luxury", you will not know where to stop.

The Minister for Health (Mr A. J. Braga): I will not stop you!

Mr Lim Choon Mong: Where will a greedy government stop? Probably it will say the same thing as the Federation Government - we need all that taxation. I hope, Sir, we are not going to be as lavish as all that - to copy on a matter of higher taxation but not on a matter of more liberal socialist schemes. I think these additional taxes are just nonsensical. They are just not necessary and they are contrary to the Government's own principles, and if it were wise enough, it should drop each and every one of them.

After this talk on income tax, Sir, it is important that we find out where all the money that the Government has taxed will go to. Needless to say, over 40 per cent will go to personal emoluments, and we are still looking forward to the Government to streamline its service with its methods advisers and all sorts of advisers in order to have increased efficiency at lesser cost. Further, a lot of money will go into what the Financial Secretary has said at page 2 of his Budget speech - change of ideas and plans. The relevant part reads:

"In some cases, sites have proved more unstable than was originally thought and extensive piling and preparation has been required. In some cases, changes in plan have caused delays."

Let us see the change of plans again, Sir, on page 9 of his Budget speech as compared with what he said at col. 1064 of the Official Report, Vol. 1, No. 19 dated 21st November, 1955, where he said, on district hospitals:

"It has been explained that we have changed our plan and that we are now going to Kallang...".

On page 9 of his speech this year the Financial Secretary says:

"A start is to be made with the new District Hospital which it has now been decided to site at Tanah Merah Kechil."

How many changes are we going to have? Is the Government going to change its plans every now and then when every change will involve a further expenditure of money, sometimes a few hundred thousand dollars and sometimes a few million dollars?

Mr Chew Swee Kee: Savings.

Mr Lim Choon Mong: Savings! Everytime there is a change of plans, there is an additional unforeseen expenditure. If Government cannot make up its mind, then I say that it is government inefficiency and government shortsightedness. When Government wishes to build a hospital, it visualises one that will be grand and beautiful and equipped with air-conditioning plants, rest rooms for doctors and nurses, and rooms for V.I.P. visitors who might be going round the hospital; and so we have a hospital built at a cost of millions of dollars. During previous debates I have pointed out to the Government that a hospital is built primarily to heal people, and if you build cheap hospitals on the model of the old Tan Tock Seng Hospital, they will still cure, they will still heal people, and people will still flock to them to be treated. This is the case where, if you build a cheap hospital, it will not give the particular V.I.P. the opportunity of declaring it open in a flowery speech. Other reasons have been given. One is that space is limited and therefore we must build upwards. I tell you, Sir, there is plenty of space and land. There is still cheap land going around and Government can acquire it if it acts quickly enough, and will not be short-sighted until the price has gone up further. Of course, we now have the Land Acquisition Ordinance to protect the Government and since we have that measure, Government should exercise it and save the money that is contributed by the public. The Government, Sir, I say it again, should try and make up its mind on everything, so that there need not be any change of plans or any change of ideas. I say this because Government expects the people with whom they are dealing not to change their plans and not to change their ideas. If a certain institution comes along to the Government and submits an estimate of a plan it has in mind and tells Government that it wishes the plan to be carried out in a certain fashion and asks for a grant of $10,000, the Government, after studying the plan and changing it and slashing the estimate, will say, "All right, the plan is now acceptable and we will give you $8,000." But in the case of members of the public, they cannot however change their plans and change their ideas, because if they do, then those plans will go through only after a matter of ten more years. Of course, being the Government, it has the privilege of being able to change its plans and its ideas whenever it is suitable. But I say to Government, try and set an example to the people.

Further money, Sir, is going to be poured into the Singapore Improvement Trust in the matter of loans, and some of the loans, we have been told, Sir, will be changed in that reference to them will not appear in the Estimates. I am no accountant and so I do not know much about that. I am only talking from a layman's point of view. However, I find myself in a difficult position trying to reconcile the large sum of money that has been given to an institution which is putting up buildings the rental for which is far higher than that charged by private builders. I know of private builders building houses along main thoroughfares renting out at $70 per flat and $120 for the ground floor where the tenant can do business. I know of S.I.T. houses along Boon Keng Road which are rented out at $96 a flat -

Mr Lee Choon Eng (Queenstown): $110.

Mr Lim Choon Mong: $110, and in Upper Pickering Street, for shop houses -

Mr Goh Tong Liang (Bukit Panjang): $450.

Mr Lim Choon Mong: $450! Here you have a case, Sir, where the S.I.T. is not able to compete with the private builder in building shophouses or flats at a cheaper rate and we are pouring money into it - [Interruption.]

Mr Speaker: Order.

Mr Lim Choon Mong: Never mind, Sir.

Mr Marshall: We do mind.

Mr Lim Choon Mong: Let us come to the cheaper houses, Sir. Let us say that we will admit that there are houses that rake in $450 per month rental, but let us take the cheaper ones. The cheapest houses that the S.I.T. can produce are the Queenstown houses where people draw lots for them at $7,000 each. $7,000, and that is with a government loan, but $7,000 is still too high for the Government to produce such a type of house. I know of private builders who give far greater value for $7,000 because the tenant will be able to get a bigger piece of land and a bigger house. In fact, if I can be excused for advertising, my hon. Friend the Member for Paya Lebar (Mr Lim Koon Teck) is prepared to build such houses at a lower cost and still is able to make a profit. He will be able to build them without having to have a planning office, a manager, and a big car park, and so on. All these are additions that contribute to the high cost of S.I.T. buildings. Do away with all that. Do not make the organisation too top heavy and the stage will be reached where the S.I.T. can build houses that are comparable with those produced by private builders. This is not just criticism, Sir. I am pointing out facts. If the Government is wise, it should take note of such facts and investigate them. Only then will it be justified in putting up loans and spending more of the people's money.

Then we have the assessment that is levied on people who own houses. Middle-class people do find it difficult to build their own houses. They have no money, so they go along to the co-operative societies and ask for a loan to buy a house. They then move into their house which is mortgaged. There is a housing shortage and Government should encourage people to own their own houses. If it is to do this, it must offer some sort of inducement. Sir, I will talk about Serangoon Garden Estate. In that place they are going to raise the rate of assessment to round about $750. I know of a case where the rent is assessed at $250 a month, and 20 per cent of that is $50 a month assessment. If a person who owns such a house is going to pay $50 on assessment alone, then I think he would rather prefer to live in a cubicle, and let the Government solve its own housing problem. But I am afraid Government will not be able to solve it because its costs will be too high. I believe that the assessment rate for people who own and live in their own houses should be as low as possible. I know that the Government, in reply to this, will say, "We are not levying such heavy taxes on everybody, but we are only levying them on people who rent out their houses." But I say, Sir, that the tax that Government levies even on people who live in their own houses is still too high. This is one way, and a very good way, of discouraging people from owning houses and one way of justifying how Government can spend more money.

Now let us look into another big item in the Estimates. Although it is important to know where the money has gone to, I think the more important thing is where the money should go into but did not get into the Estimates. We are now going to see where the Government has omitted the very important things. On page 5, paragraph 2 of his Budget speech the Financial Secretary says:

"It will be noted that no provision is made for the cost of Malayanisation ...".

Sir, I thought that Malayanisation is a very important point in the government programme. Why has it not got into the Estimates?

Mr Hart: Read further.

Mr Lim Choon Mong: Are we to believe, Sir, that there will be no Malayanisation? Are we going to believe that the speed is going to be slowed down? Of course, there was a rumour - but it was only a rumour - that $20 million was going to be spent on Malayanisation, but so long as I do not see it in the Budget, then I know that the idea is still in the formulation stage, and if it is in this stage, the Government, we know, has already shown us that it is always able to change its plans and its ideas.

Let us now look at another item: no provision for the nationalisation of transport. Last year we were treated to a very good debate on transport and the Minister for Communications and Works stated that it was socialist policy to nationalise transport, but in order to do it, we must not move too quickly. Of course, there has been another change of plans and ideas by the Labour Front Coalition Government. "Yes, socialism believes in nationalisation of transport, but for us we can be slow about it, we cannot take it too seriously when it comes to practice. Let us go slow on that." This year when the Minister for Communications and Works spent some of the public's money and took a trip to the United Kingdom to study the transport system of London, that gave me a great deal of encouragement and I said, "Soon we will have a transport system comparable with the best in the world." Of course, when we have that hope, we must have figures to support that hope. So I look through the Budget Estimates from the beginning to the end, searching diligently under every head, but I find no provision for the nationalisation of transport. When, Sir, will nationalisation of transport come into being? Is there going to be a delay? I suppose it will be implemented when we -

Mr Francis Thomas: Have you read the White Paper?

Mr Lim Choon Mong: White Paper or no White Paper, Sir, the most important thing is whether it gets into this Budget. If it does not get into the Budget, it is still in the realm of ideas. It is not even going to be a bit realistic.

There is another provision, Sir, which has been left out, probably after serious thought, and that is: by next year we shall have in Singapore a few District Councils and a City Council with a mayor freely elected. I put it to you, Sir, this is a step forward in our constitutional development. This is the right direction where we should go. We should first establish our local councils and then we will be able to tell the world that we can manage our own local affairs. Give us the whole of Singapore and we will be able to manage it as well. But, Sir, there is no provision in this Budget. Are we going to have our local councils or are we not? It looks as though we are not going to have our local councils. It looks as though the City Council, whose life the Government has prolonged, first, for one year -

Mr Marshall: To our regret.

Mr Lim Choon Mong: - and then for two years, is now going to prolong it for another year.

Mr Marshall: To our greater regret.

Mr Lim Choon Mong: We will talk about that, Sir, when we come to the debate on that Bill and then the Government can have its say. But whatever it is, I protest that there is no provision made for local government expenditures. We still have the old Rural Board. Sir, this is a case of the greatest importance and it does point out that in all probability it is because the Government is occupied with something else - what it is, I do not know, maybe something airy - and has forgotten the most important thing. I say, if this is the case, it is inefficiency.

Let us look again, Sir, into another item. It is one that has been provided but insufficiently provided. I am looking through only one or two items, I am not looking through the whole lot. I just pick them out at random. Probably by scrutiny I can pick out more. I am now on education. There is a disparity in the treatment afforded to Government schools and that offered to aided schools. Where Government schools are concerned, everything is being paid for. In the case of aided schools, there is a scheme whereby it is a dollar for a dollar contribution. Here then, Sir, we have two categories of schools - Government schools and aided schools. Regarding aided schools, the parents of the students, who have already been taxed, must be further taxed by contributions to the schools, so that they can progress. As for the teaching staff, I will not say much about them and I will declare my interest, because I am a teacher myself! On the other hand, we have the Government schools where everything necessary is provided for by Government. There is a scheme of service for everybody and so they are all happy. I do not grudge that. But what I am thinking of is this: control comes from right at the top. Palmer Road controls every school. One directive from Palmer Road and all schools will obey that directive. It looks to me as if there is too much centralisation. It looks to me as if the Government schools are going to train students who will probably behave in exactly the same way if a certain external stimulus is applied; but as my hon. Friend the Minister for Communications and Works has once said, we are living in a democracy and we do not want everybody to be thinking in the same vein. Each one must have his own will. I think the time has come for Singapore to adopt an education policy which will not be too centralised, that each school should be governed by a Board of Governors - whether it is Government, or Government-aided - and all the schools are under one central organisation. I would ask the Government not to be afraid of this because we already have an example in the Federation of Malaya, and if we do that, it will be one step forward towards democracy.

I thought I heard the Hon. the Chief Secretary mention just now the Chinese High School. Of course, that has been a pet subject for quite some time for many Members in this House. Some people take a great liking to it, while others do not. But let me explain to the Government, Sir - I am only trying to be helpful - the attitude of the Chinese school students, and if the Government will listen carefully to what I have to say, it will be benefited and probably we will not have any more rioting. The Government has announced that all schools will be treated alike. All Chinese schools will be given full grant in aid. Yes, Sir, that is indeed a very good step forward. That is indeed commendable; but so far as I can gather from the schools, from the students, from the teachers, and from the Press, they do not know the conditions attached to such grants in aid. I told them that the grant in aid system would be the same as for English schools, but they said that they had not been officially notified. "We just do not know what the scheme is," they told me. Will the Government not tell the Chinese people, "If you have grant in aid, these are the conditions."? Put them up in black and white and I think that will dispel their fears. That is my first comment.

My second comment is on the question of salary schemes for these Chinese schools.

Mr Speaker: Order. Perhaps I should remind hon. Members that this is the Second Reading of the Appropriation Bill and the debate should be confined to the general principles of Government policy and administration as indicated by the Bill. What the hon. Member is saying perhaps could best be said when we come to the Head "Education" in the Committee of Supply.

Mr Lim Choon Mong: Thank you, Mr Speaker, Sir. I thought that unless we brought up some specific points the Government might not be able to understand what we were driving at.

Mr Braga: We do not.

Mr Lim Choon Mong: It is because everytime we say something, the Government will come back at us and say, "Give us a concrete example." So in this instance I am trying to give some concrete examples. But I am glad, Sir, of your guidance and I shall romp along faster.

On the matter of education, Sir, there is another missing item - that of secondary schools. We do not have enough secondary schools, and if Government is going to produce more technicians and more people who will come and help do the work that Singapore needs, then the answer lies only in the creation of more secondary schools. It will at least help the students to feel a bit safer when they are in Std. V.

Finally, on education, Sir, we have a paragraph in His Excellency the Governor's Address to the effect that the Government will assist the Nanyang University. How, and in what form will it come? Is it in money? Is it in the matter of securing facilities and so on? We have not heard anything mentioned in the Estimates or in the Address. I think the public has the right to know what the attitude of the Government is on this subject.

Now I come to the most important section of my queries, Sir, and that concerns the Ministry of Commerce and Industry. On page 3 of his Budget speech the Financial Secretary has treated us to the idea that the Government has thought about "the expanding economy of Singapore". On page 11 there is also a reference to Singapore being "a great communications and trading centre", with "its manufacturing activities". But, Sir, although the Government talks about the expanding economy of Singapore, yet the policy that has been adopted so far is one that is not going to make the trade and industry of this country expand but contract. The Financial Secretary, on the one hand, tries to point out to the people that the financial position of the colony is sound and that occurs a number of times - on pages 3, 7, 10 - but I will not quote them. To say it so many times I think he is trying to convince himself. I hope it is true, because anything that is true need be said only once. Then, on the other hand, he says that the future of Singapore is bleak and that we must expect more taxation, and taxation will climb up and up and up. This, I think, is contrary to the principles and the policy laid down by the Ministry of Commerce and Industry which is trying to say to foreign investors, "Do not be afraid. Come right into Singapore and you will make huge profits. The future is bright. Everything is going to be all right. We are not going to increase company tax. We are going to assist small-scale industries." In Singapore the one most important thing that has always been in my mind is that whatever Singapore manufactures cannot be competitive in the Federation. I am now made to understand that there is a tax barrier set up at Johore Bahru and that anything, whether it is manufactured in Hongkong or Great Britain or Australia or Singapore, if it ever gets through that barrier, must pay tax. And if it must pay tax, it will mean higher costs to consumers in the Federation. It will mean that manufacturing concerns will not remain in Singapore. It is natural that they will remove to Kuala Lumpur and sooner or later, Sir, what will happen? Will Singapore be a great industrial colony like Hongkong or will it be reduced to just a port of call and a communications centre? If nothing is done in this direction, then I share the opinion of the Financial Secretary that the future of Singapore will be bleak. We must create conditions that will be bright for investment. We must create stable conditions and a sense of security, and then investors will come to Singapore. It is not a matter of tax or super tax or non-resident tax that will chase people away. Sir, the Government will admit that it has invested the money of Singapore in the London market, and I have been told times without number that London is about the most heavily taxed country in the world and yet we have our money invested there, as if we must not do this and we must do that. What are required to attract investment are stable conditions, no fluctuations in the market and no rapid wage rises (because the cost of living is not rising rapidly). There must be a sense of security. If we do not have money upsets, then investors will come. There is, of course, one heartening bit of news which I must not leave out, and that is, the Government thinks that it is going to assist small-scale industries by voting the sum of $1 million. We want to know what the Government is going to do with that $1 million. How is it going to be handled? How will the people affected be benefited? Will the loans out of that sum of money be firmly controlled and yet elastic enough so that they will be paid back? For this, the plans should be made public. People will wish to know.

One more comment about commerce and industry. The Government, I feel, should take the opportunity to have discussions with the Federation Government to see that goods manufactured in Singapore are not subjected to tax, and if that is not possible, then there must at least be some sort of Commonwealth preferential rate.

Mr J. M. Jumabhoy: There is a rate.

Mr Lim Choon Mong: And further to that Commonwealth preferential rate, there should be a neighbourly preferential rate, which will be much better! Then it might help.

Sir, I now come along to the question of unemployment and under-employment. Nobody whether inside this House or outside will deny that there is a great deal of unemployment and under-employment, and if we have both, we are going to face a great consequences arising out of the situation. Crime is going to mount. Social benefits will be sure to mount. All this can only be prevented if the Government will think harder and do its work properly, create more industries, encourage people into putting money into this country and so on; otherwise, I am afraid, Sir, the future of Singapore will be bleak.

Mr Marshall: Have you any ideas?

Mr Lim Choon Mong: We have, but we will only show you when we are in a position to put up a Budget.

Sir, before I come to the end of my speech, I know that the Government will say to me (and I am anticipating it), "The Member for Serangoon says he wants no more taxation. All this taxation must be removed. But, on the other hand, he shouts at the top of his voice that we must have all the social services increased. But where do we find the money? Probably the hon. Member is talking through his hat!" But I have this to say, Sir. In the management of money, the most important thing is to cut down unnecessary expenditure. I will just mention one item - it will be good enough. There is going to be a large P.W.D. building coming up. It will cost a few million dollars, say, in the region of $7 million, and the Government is going to pay the architect 7½ per cent on that. Work that out and see how much that 7½ per cent comes to. Why cannot Government table a Bill which will lay down a sliding scale of fees for architects? If you build a house for $1,000, you get $75. But if you build a house for 1,000 times that $1,000, you should not get $75 times 1,000; and if the building is going to cost $7 million, and working it out on this percentage, I think it is a bit too much to ask people to pay. If, however, you can engage an architect to work on a salary scale of $1,000 a month flat, you will probably have him working for quite a number of years, in fact. Now after disposing of this expenditure, which is unnecessary, I will mention another item - inefficiency in gathering taxes on the old basis. I understand there are departments which say they cannot collect all the taxes they are supposed to collect. They report that such and such an area has still so many years of arrears of taxes to be collected. I am referring to the Land Office. Here we have over-expenditure and inefficiency in collecting taxes, with the result that there is a lack of money and this Assembly is being asked to approve a new taxation scheme. I say all this is not necessary, and, of course, it is ridiculous to tell me that in Singapore there are only 19,000 people who are paying tax. There must be many more. Step up the efficiency of that department and then we will come to the stage where we can manage our own affairs without unduly increasing taxes.

11.52 a.m.

Mr G. A. P. Sutherland (Nominated): Mr Speaker, Sir, in a debate which promises to be of mammoth length, I will endeavour to be brief. Although the Budget introduced by the Hon. the Financial Secretary is one of the most stringent in my experience, I personally doubt that the outlook is quite as gloomy as he suggests. The Financial Secretary in his speech said that there is always a tendency to estimate revenue conservatively, and he might well have added to over-estimate expenditure. This point has been elaborated by the Member for Serangoon who also pointed out that year after year, when it comes to the final balance, the actual position is far better than anticipated. But I think there might be a danger here of this Assembly and the public as a whole falling into the error of thinking that additional taxation is unnecessary and that Government's fiscal policy is ultra-conservative. The Member for Serangoon, for instance, did not mention that the Financial Secretary had pointed out that under-expenditure is frequently deferred expenditure and that the colony's development plans are estimated to cost $310 million over the next six years. He said that the graph of expenditure is rising in a straight line through the origin, but he omitted to mention that the graph of revenue is unfortunately rapidly levelling out. On practically every page of the Estimates we read "increase due to so and so", and it seems to me, Sir, that the chances of the word "decrease" being substituted for "increase" in future estimates are practically zero. On the other hand, the colony's position is, as the Financial Secretary has said on three occasions, sound. I would go further. I would say that a situation that reveals net liquid assets of $130 million is a most satisfactory state of affairs.

I heartily welcome the changes in accounting methods described by the Hon. the Financial Secretary in his speech, especially the removal of the long-term unrealizable loans from the Assets side of the Statement of Assets and Liabilities, and the reduction of the General Revenue Balance to $70 million following the transfer of the balance of the colony's liquid resources to a reconstituted Development Fund. I think that will be regarded by all accountants and business men as a very sensible way of drawing up the colony's Statement of Assets and Liabilities.

I was also greatly interested, Sir, as I presume all hon. Members were, in the Financial Secretary's remarks on the conclusions reached by Sir Sydney Caine in his assessment of the colony's future development requirements, which, financially, are of a magnitude that is truly staggering. Yet, Sir Sydney Caine considers that the funds can be raised provided that certain conditions be met. Of the four suggested means essential to the growth of Singapore, the most difficult of attainment, to my mind, Sir, is the fourth item mentioned by Sir Sydney Caine. He says:

"Local capital resources are mobilised to the full, a suitable climate and opportunities for investment are created, and the general public is made to realise the necessity of saving and investment in Government loans in order to obtain the services which it wants."

No doubt, this can be done, Sir, but it certainly involves a more realistic attitude by the general public to these matters than we have hitherto seen, and their co-operation is essential if "a suitable climate and opportunities for investment and saving" are to be created.

The statement by the Hon. the Minister for Commerce and Industry prior to the Financial Secretary's speech on the Appropriation Bill is particularly apposite, and what he has said has been warmly welcomed by the business community of Singapore. It is also vital, Sir, that the general public should be made to realise the necessity for saving and investment, and particularly in Government loans; and here I hope we shall see some change of heart, because only by a change of heart can this be realised. I do not think that Government can offer further financial inducements in order that the public should be attracted to investment in local loans. I should also like to mention, Sir, that when I say "the general public", I mean the general public. I do not, for instance, mean banks who, when they take up large blocks of colony loans and municipal loans at the time they are issued, are doing nothing to solve the problems of inflation.

Sir, I would now like to refer to the first of Sir Sydney Caine's recommendations, namely:

"Government revenue is increased by stages over the next three years, including 1957, to yield at least an additional $50 million by 1959, thus allowing a more substantial contribution from revenue to development than is made at present."

This is indeed a formidable task and will certainly involve the belt tightening that the Financial Secretary referred to in his speech, and I am wondering if the untapped potential to which he referred is as great as has been suggested. Nevertheless - and I say this as an Independent and I am not making this a Party speech - in devising means by which revenue can be increased by $20 million in 1957, I think Government is to be congratulated.

I should like, Sir, to comment briefly on some of the proposed measures for increased taxation. It would not be seemly for me to state that nobody would suffer hardship by a reduction in personal relief from $3,000 to $2,500, but I should have thought that, in view of the fact that the Financial Secretary said the average amount to be paid would be a dollar per head per mensem no one would suffer extreme hardship as has been suggested in the Press. I should really have been more interested, Sir, to find out whether, as the Financial Secretary himself suggested, the collection of such a small tax was economically justifiable. The increases in the higher bracket are rational and indeed overdue, and will not have the effect of causing those affected too much in the way of belt adjustment.

In leaving company tax where it is, Government has shown, I think, a full understanding of the local situation and the need for encouragement of foreign investment. In my speech on the Appropriation Bill in this Assembly last year, I said:

"...it is only natural that one should feel relieved that the Budget proposals contain no provision for increase of income tax, but that is merely a brief respite, as the Financial Secretary has been at pains to make clear."

Sir, when the Member for Tanjong Pagar (Mr Lee Kuan Yew), whom I regret to see is not in the House at the moment, came to speak, he said:

"...the Hon. Mr Sutherland...could not conceal his relief that he was not made to pay what was his due and fair share of the taxation of this country."

Well, that is nonsense. Sir, I am happy to say that, as far as I am concerned, I am in a sufficiently low bracket as to be comparatively unaffected by the proposed increase; but then, as now, I was really talking about company tax, and I might add that the corporation that I serve pays the 42½ per cent, which the Financial Secretary mentioned, on its income in Singapore, as it is incorporated in the United Kingdom. So, therefore, there is no question that my remarks are influenced by any personal feelings of relief.

Last year, too, I said in this Assembly that I saw no reason why cigarettes should have escaped increased taxation, and I personally am glad that the Government has had the courage to raise the taxes on tobacco and is able thus to anticipate an increase of revenue of $9½ million from this, in my opinion, very legitimate source of taxation. It need not be feared that the anticipated increase will not be realised. The fantastic taxes on tobacco in the United Kingdom have had absolutely no effect on the habits of smokers who usually only renounce the habit following a coronary thrombosis or a solemn warning by the doctor that they give it up or else...!

I am glad, Sir, that gin too was pulled into the net. I am also on record as having expressed my views on that last year. In this connection, I would like to read one paragraph from the Financial Secretary's speech which is full of humour as well as gin:

"When the rates of duty on other liquors were raised in November of last year, no action was taken in respect of rum and gin. There has been a tendency for the consumption of gin in particular to decrease over the previous year or two. The taste for gin is fairly specialised. In Singapore at least it is not a potential substitute for whisky or brandy. There appeared to be little danger of any marked switch from whisky or brandy to gin as a result of the difference in rates of duty. On the other hand, there was a possible danger - although not a very grave one - that an increase in duty might result in a further decrease in consumption of gin."

Everyone knows, Sir, or should know, that whisky is an aristocrat and gin a parvenu, and if such an analogy is unacceptable to a Socialist government or to the Royal Navy, I cannot help it; but I hope that any further taxation on these two life-savers will be levied without any discrimination.

The increase in driving licence fees and the additional tax on petrol are unlikely to cause any great hardship, and the raising of the stamp duty on cheques is a comparatively painless way of raising another $300,000. I was interested to hear the Member for Serangoon suggest that it did not matter to the tuan besar who sat in the back of his car, but the poor syce had to pay his $3 additional licensing fee. I should have thought that practically every tuan besar paid the licence of his syce.

A ten per cent initial registration fee on all motor-cars registered for the first time in Singapore - well, Sir, that certainly does bring cars of Commonwealth registration virtually into the petroleum-liquor-tobacco class and I have no doubt it will affect the lower middle income group, but I think it is a blow which they will just be able to stand.

Sir, in conclusion, I would say that, in my opinion, this is a good Budget. Certainly it follows the principle, as far as direct taxation is concerned, of putting the burden on the shoulders of those best able to bear it. It is, in fact, in the best colonial tradition; by that I mean something the reverse of derogatory. I mean that it is farsighted, sympathetic, fairminded and shows due regard for the sound principles of finance. Only on that basis, Sir, can we build a solid house of state, whatever flag it may fly on its flagstaff.

12.10 p.m.

Mr Marshall: If it please you, Sir, I find myself in the extraordinary position of being compelled to agree to a large extent with the hon. Member who has just sat down. I would like to say that I consider today to be a good day for democracy and for socialist principles. I think the Government may well be congratulated, Sir, on the courage, wisdom and the spirit of democracy which it has shown in listening to the reasonable appeal of the people of Singapore and restoring the personal allowance on income tax and the duty on locally manufactured cigarettes, both of which hit the small man, in their original form.

Sir, there has been a suggestion that the Government conceded these two matters because of a threat to its existence arising from a split in the Labour Front. I should like to say that this is a complete and malicious falsehood The Labour Front, through its Central Committee and the secretaries of the branches at special meetings convened, made it clear to the Government that if the Government could not make concessions because of the need for co-operation with the Federation, the Labour Front, both in the Assembly and outside the Assembly, would continue to give its unswerving loyalty to the Government. Sir, the Labour Front believe in the need for cooperation with the Federation on economic matters, and co-operation does not mean getting our own way all the time. It means give and take; and if sometimes the people of Singapore have to sacrifice their own way in order to maintain the spirit of co-operation with the Federation, we of the Labour Front believe that the people of Singapore will accept such sacrifice with good grace. I would add, Sir, that we are today happy that such sacrifice is not necessary for the small income groups who would have been affected.

We are happy to note the close personal relationship of friendship and mutual respect between the Chief Minister and the Chief Minister of the Federation which is contributing to the mutual welfare of both territories. We say to the Chief Minister, "Well done! By these concessions which you have made in co-operation with the Federation, you have been able to meet the wishes of the people and have infused new life in our concept of democracy."

Sir, on the question of family allowance on income tax, the leader of the Liberal-Socialists made much of the Asian approach as though that were his personal baby and his exclusive property. The Labour Front has always solidly stood behind the general wish of the people of Singapore that the approach to personal allowance on income tax should be an Asian approach and not a European approach. But surely, Sir, the House must by now be conscious of the manifold submerged difficulties in the way of income tax modifications, and I do say, Sir, that we should be fair to the Government and give it the time necessary to meet these difficulties in its honest efforts to meet the wishes of the people of Singapore.

Sir, as one who expects to be affected, I welcome the increased tax on higher incomes, and I say this, Sir: there is plenty of room for expansion in respect of taxation on excessive incomes.

On the question of company tax, I have studied the reasons given by the Financial Secretary and I must say I am not satisfied. I concede, Sir, that special inducement must be given to foreign capital in order to encourage its activity in this territory; but only foreign capital should be encouraged which is making a reasonable profit. When foreign capital skins our people and when foreign capital makes excessive profits, then that is no longer a healthy contribution to our economic life. Tomorrow, Sir, I hope to receive from the Financial Secretary information in answer to a question on the Order Paper as to the number of companies which are making more than ten per cent profit on their capital, and I think this House will be in for a real shock. I say to the Financial Secretary, as a citizen, I regret that he has not seen fit to indicate to us the results of his researches on the possibility of an excess profits tax, and I do urge the Government to consider the introduction of an excess profits tax at an early date.

I welcome the tax on motor vehicles. It is a step in the right direction, although I must confess I find myself in considerable sympathy with the Member for Serangoon when he says, "How about higher taxes for more expensive cars?" I am quite sure the Financial Secretary will welcome that suggestion and that it will have the consideration it merits. I would like to say, Sir, that apart from the question of revenue and the socialist principles affecting this tax, if the Income Tax Department is not adequate for its responsibilities in obtaining payments of income tax due, then this tax at least will, in indirect fashion, get some of the money of which this country is being cheated. I welcome the tax for one special reason, Sir. It can have a salutary effect if the buyer is made to pay this ten per cent tax on landed cost direct to the Treasury. He will then know how little his car costs and how much profit the motor-car monopoly is making. I ask the Government to make stringent regulations for payment of this tax by the buyer and by no other person. I think the defenceless people of Singapore should know the extent to which they are being skinned by this car combine.

There is one other point about this tax to which I think I would like to draw the attention of the House. The Government quite rightly exclude omnibuses from the tax, because they are a public service. I do not know whether taxis were unintentionally omitted, but it seems to me, Sir, that taxis are a public service and, in so far as my information goes, taxi owners are neither rich nor do they make excessive profits, and I would ask the Government to consider excluding taxis and cars which are intended to be used as taxis for a period exceeding three years.

Sir, I would like to say that I warmly welcome the action of the Government in leaving the tax on locally manufactured cigarettes untouched. I believe the Member for Serangoon must have either ignored the Government Gazette which indicated that the Government had reduced or had waived its intended increase of taxation on that item, or else perhaps he does not quite follow the language of Government Gazettes. I would not blame him. Sir, the position now truly is this: the Financial Secretary, in moving the Second Reading, said that those who cannot afford the cigarettes can smoke cheaper cigarettes. As the proposal originally stood, there were no cheaper cigarettes. The prices of all cigarettes were increased, but today the locally manufactured cigarettes remain at the same price as before and they will be far cheaper than the imported cigarettes. Therefore, the poor man and the lower income group can continue to enjoy the friendliness of tobacco without having to make any sacrifices and, in addition, Sir, we are giving a real direct impetus to local industry. I welcome the increase of tax on imported cigarettes and pipe tobacco. Those who will not support local industries, Sir, should be made to pay more for their imported cigarettes.

The additional tax on petrol has been made much of by the Member for Serangoon. It is his duty as leader of the majority Party of the Opposition to labour himself in seeking to find grounds of discontent and he finds them in the tax on petrol. Sir, that tax should not harm anybody at all. I say "should not", but, in fact, I agree with the Member for Serangoon that in one instance of which I have heard, it has been made the excuse by unscrupulous capital to exploit the poor. I understand that the owners of lorries which carry vegetables to market have increased their charges from 30 cents a picul to 40 cents a picul. Sir, a lorry, I am told, carries 96 piculs on two voyages for one gallon. So they receive $9.60 extra for every seven cents they pay the Government. And they blame the Government!

On the expenditure side, Sir, I am not at all satisfied or happy about the expenditure on defence services. I welcome the expenditure on the local forces. I would like to hear when our first battalion will be operative. I would also like to know whether there is being prepared a plan for a second battalion. But I would like to draw the attention of this House to that extraordinarily expensive toy, the Royal Malayan Navy. It has been freely admitted, Sir, that this organisation is in no way related to or utilised for the welfare of Singapore and it is costing a fantastic packet. I had hoped, Sir, that the Financial Secretary would have taken advantage of the question which I put to him, and indicated the policy of Government for the next five years in connection with these very expensive items on our income. I shall raise the matter again under the appropriate heading in the Committee of Supply and I trust that the Chief Secretary will be in a position to give us a satisfactory understanding of this expenditure to which we are committed of $15 million, allegedly for four mine-sweepers, and more than $4 million annually recurrent expenditure on the Royal Malayan Navy.

Sir, now I come to the Legal Aid and Advice Ordinance. Let me say, as a citizen and a Member of this House, how deeply I regret to see that there is no provision whatsoever for the implementation of the Legal Aid and Advice Ordinance which has been the law of this country for five and a half months. It is right that the people of this country should obey the law. It is also the duty of the Government to apply the law. The Legal Aid and Advice Ordinance is a truly socialist measure, welcomed on all sides in this, at that time, not so very friendly House. There was not one dissenting voice. It was welcomed by the entire population. It was moved by the Hon. the Minister for Labour and Welfare (Mr Lim Yew Hock), and, in moving it, he quoted that cynical remark -"The Courts of law, like the Ritz Hotel, are open to the rich and poor alike!" Where is the change? Has there been any change that in these five and a half months nothing but a desultory conversation or two have taken place to apply the law of this country, approved fully by this House and by the people? The bogey of the Bar Committee has been put up. I say "bogey", Sir, because I do not think it is fair to the Bar Committee to suggest that it seeks to obstruct the implementation of this very necessary measure for the welfare of the people of Singapore. What the Bar Committee is interested in are regulations in respect of the relation of members of the Bar to the department when they are employed. But the Bar Committee has never said, "You cannot establish a Department of Legal Aid and Advice. You must not appoint a Director. You must not appoint an Assistant Director. You must not have an office." I am deeply perturbed by the seeming loss of interest of the Government in this very necessary measure for the welfare of the people of Singapore and I shall revert to it under its appropriate heading in the Committee of Supply.

I also must say, Sir, that I note with regret the lack of provision for a dynamic approach to the problem of enhancing the economic position of the Malays in this territory, and the absence of provision for acquiring kampongs and providing for their rehabilitation. A great deal of good can be done in that direction at far less cost than four useless toy minesweepers.

Sir, there is one other subject on which I would like to touch. I do it with some diffidence. It is the question of a change in accountancy methods proposed by the Financial Secretary and enthusiastically supported by a banker of some experience. I therefore tread with some diffidence in this territory, and I admit quite frankly that all that I know of accountancy I learned in the Singapore Y.M.C.A. School of Commerce! But I must say, Sir, that it goes contrary to the concepts of honest book-keeping that we should spirit away mortgages from the balance sheet, that we should treat loans with security, loans on building, loans on land, as current expenditure. Sir, all of us not only in this House but outside it have the highest respect for the absolute integrity of the Financial Secretary, but I would ask whether, in fact, there is any real need for it. He suggests that it is necessary in the name of tidiness. Sir, I do not care how untidy it is if I can see my money. I would rather not see it spirited away. Sir, if the Financial Secretary wants to play the magician, I would ask him to produce rabbits out of his hat and not make our money disappear through his hat! I do like to see where my money is, and if it is necessary to separate liquid from illiquid assets, Sir, let us authorise him to put, in inch-high letters, the word "Illiquid" on the assets side of the balance sheet; but do not spirit away our loans which are valuable, which can be transferred and sold, which have monetary value. Do not let us hide them in some corner of these highly complicated accounts which really, let us confess, very few of us can understand. Sir, my attitude toward all this is merely a feeling of discomfort, but if it is really considered necessary, I will go along with it; but I would plead that in that event, at the bottom of the balance sheet, away in a corner if necessary, we should have a note that we have illiquid assets of $126 million - and it is not a sum to be sneezed at.

Sir, in conclusion, I would like to join Mr Sutherland - for once! - in congratulating the Government in all sincerity on a Budget which today is in a form of which we can be proud.

Mr Speaker: I think this is an appropriate time to suspend. I shall take the Chair again at half-past two.

Sitting accordingly suspended at 12.28 p.m. until 2.30 p.m. Sitting resumed at 2.30 p.m.