RETIREMENT FROM THE PUBLIC SERVICE (COMPENSATION) BILL

Order for Second Reading read.

10.05 a.m.

The Chief Minister (Mr Lim Yew Hock): Mr Speaker, Sir, His Excellency the Governor has signified his consent to the Bill being proceeded with -

Mr Lee Kuan Yew (Tanjong Pagar): Nobody ever doubted that.

The Chief Minister: - under the Standing Order. Sir, in rising to move, "That the Bill be now read a Second time," I want to stress, first of all, that it is not normal government practice to compensate its officers for loss of expectation of career where such officers are prematurely retired. It is common knowledge that all Government officers hold office at pleasure, and so long as the requisite notice is given for termination of service, the person can have no claim on the Crown. This Bill, Sir, to compensate expatriate officers for loss of career as a result of Malayanisation of the public service, is therefore an unusual measure to meet changes brought about by constitutional advancement in Singapore. Up to now, the Secretary of State has been responsible for the expatriate officers who came out here expecting a full career, that is to say, a career in the service until the normal retiring age. Constitutional changes have brought about a frustration of this expectation of a full career, for one of the fundamental rights of a self-governing country is that it must have control of its public service and no outside authority must be in a position to determine appointments, promotions and discipline in respect of the civil service. The Government not only cherishes this right of determining its own civil service matters, but is of the firm conviction that true self-government means that the entire control of the government machinery must vest in the local people. The people of the country must solve their own problems and determine what is best for them. A civil service staffed and dominated by expatriate officers will make self-government a mockery. We are on the threshold of self-government and it is of the greatest urgency that we must prepare to govern ourselves.

I said yesterday, in moving the adoption of the Government's policy on Malayanisation, that it is the Government's firm view that the principal civil service advisers of Ministers must be local men. The most effective way of achieving the objective in the determination of our own civil service is to remove from the Secretary of State and the Governor the final control over those officers who were appointed by the Secretary of State, and this is brought about by the establishment of a Public Service Commission with executive powers. Hon. Members will hear from the Hon. the Chief Secretary in due course how the new Public Service Commission will work before our present constitution is amended. To all intents and purposes, the new Public Service Commission will be executive.

All these measures, Sir, have brought about a change in the conditions of service of the expatriate officers, and it is for these reasons that a compensation scheme has been negotiated and agreed with the Staff Associations representing them. During the negotiations we were in constant touch with the Federation Government to ensure that their scheme and ours were as nearly the same as possible. The only material difference is in the ceiling of the compensation, and this is due to the generally higher emoluments ruling in Singapore.

There is urgency in bringing this scheme into operation as soon as possible, for without it planned Malayanisation cannot proceed, and we do want early Malayanisation of the public service which, as I have pointed out, is both a political and an administrative necessity. I do urge hon. Members to view the need of this Bill in this setting, and not to make it more difficult for officers whose careers are already frustrated as a result of constitutional progress in Singapore. Let us not look back into the past, but let us look forward to the future to see how we can make these expatriate officers go willingly and cheerfully. Our task will be made all the less difficult if during the interim period both local and expatriate officers will co-operate fully to make the change-over as smooth as possible and with the least friction. I have said that we must look forward to the future to see how we can make these expatriate officers go willingly and cheerfully. I should have also said, Sir, that we should also look to the future to see how we can make these expatriate officers remain willingly and cheerfully where we need them. I said in my speech yesterday, in introducing the White Paper on the Government's Malayanisation policy, that it is better to be without an officer than to have an unwilling one. An officer who is retained in the service against his wish is not only useless to the service, but is a potential danger to the service. I fully appreciate that there is always a danger of a mass exodus of expatriate officers and that it might have a deterrent effect if the scheme now before the House provides half compensation instead of full compensation to those officers who wish to leave without the Government's permission. This principle of half compensation was recommended by the Malayanisation Commission and was supported by a statement in this House in June this year by the then Chief Minister, the Member for Cairnhill. Since June, Sir, we have given further careful consideration to this question of half compensation and have come to the conclusion that although it may have a deterrent effect on officers going without the Government's permission, the result may well be that we have a service staffed with a large number of discontented officers. Discontentment added to frustration of a full career may well be the end of efficiency in the government machinery. It is also clear that any half compensation scheme would have met with firm resistance from the Secretary of State. In view of Her Majesty's Government's declared policy that once an executive Public Service Commission has been introduced and conditions of service have been changed by the removal of ultimate control from the Secretary of State, officers will receive compensation for loss of career. Also, Sir, other colonial governments, seeking to introduce a compensation scheme, have accepted the principle that no clear-cut distinction can be drawn between the actual termination of a career, through compulsory retirement, and an officer's right to terminate his own career once his conditions of service have been materially altered. The career of every officer in the service, even if the Government wishes to retain him for several years, is automatically prejudiced from the moment the Government's intention is made known. There can be no guarantee that he will be able to get the job if he stays for as long as the Government wants his service, and he must have the right to go after giving reasonable notice at the time most convenient to him. A more satisfactory result is likely to be achieved under the present scheme which I consider gives every expatriate officer a fair deal.

I have stated earlier, Sir, that there have been very close consultations with the Federation Government. A similar scheme has already been approved by the Federation Legislative Council. We are now on the threshold of self-government. Let us show the world that in our attainment of self-determination the people of Singapore can show understanding and appreciation of the services rendered to Singapore by expatriate officers who will suffer a loss of career resultant upon our gain towards nationhood.

Some hon. Members will like to know how we arrived at those figures shown in the tables at the end of the Bill. On this, I would like to draw the attention of hon. Members to the Malayanisation Commission's recommendation that the services of an actuary should be enlisted to compute the amount of compensation and that the main basis should be the capital value of loss in respect of future salary and pension less that of prospective future employment. The calculations by actuaries, both those briefed by the Staff Associations and by the Government, indicate that any scheme based on a pure actuarial calculation of loss will be completely out of line with other schemes and would produce compensation at a rate very much in excess of that now proposed: something like a factor of seven at the peak age of loss compared with 4.96 that has been agreed with the Staff Associations. The figures, Sir, in Table B of the Second Schedule to the Bill are the result of hard bargaining with the Staff Associations. Under this scheme any expatriate officer who retires during the operative period, which is five years from 1st January, 1957, may have his compensation calculated at any interim date between 1st January, 1957, and his date of retirement which is most advantageous to him. This is not an ungenerous inducement and I hope that members of the expatriate service will take advantage of this and give their co-operation during this interim period. Let us part as friends and not as enemies, so that when we do meet again, we shall be able to look back and smile and say the job was well done.

Mr Lee Kuan Yew: Who is going to pay their passage out to the United Kingdom?

The Chief Minister: Some hon. Members, and indeed some members of the public, may be staggered at the total cost of compensation and the highest amount which an expatriate officer may expect to get under this scheme. The total cost of this scheme, Sir, will be approximately $21.4 million which will be spread over a number of years until the last expatriate officer leaves these shores. Against this expenditure of $21.4 million, we must not forget the amount of savings that we will have as a result of dispensing with the services of the expatriate officers. The estimated saving is about $5 million a year when the last expatriate officer leaves this country. The savings will be in expatriation pay, passages and hotel allowances, plus the number of man-days saved, because there will be no long furloughs every two or three years.

Mr Lee Kuan Yew: Now we know what has been going on!

The Chief Minister: If the -

Mr Speaker: Order. I would like to remind hon. Members of a Standing Order which says that while a Member is speaking, all other Members shall be silent. I have allowed interjections in the past, but these interjections have become longer and longer. If there is to be an intervention, there is a Standing Order which allows an hon. Member to get up and if the Member speaking gives way, then that hon. Member can make his intervention.

The Chief Minister: Thank you, Sir. As I said just now before the interruption, the savings will be in expatriation pay, passages and hotel allowances, plus the number of man-days saved, because there will be no long furloughs every two or three years. If the expatriate officers go as we have planned in accordance with the picture in the White Paper on Malayanisation adopted at yesterday's sitting, the savings that can be effected on account of Malayanisation will be half a million dollars per year by 1st January, 1958; by 1st January, 1959, it will be $1.1 million per year: by 1st January, 1960, it will be $2.3 million; by 1st January, 1961, it will be $3 million; by 1st January, 1962, it will be nearly $4 million, and so on until the last expatriate officer leaves our service, when it will be approximately $5 million a year.

Sir, with regard to the ceiling of £11,900 receivable by an expatriate officer on retirement under Malayanisation, I would like to stress that very few officers will, in fact, get this amount. To be exact, the number of officers in this category is 12, and other officers will get varying amounts from £11,900 to £534.

As to the amount of pensions payable in addition to the compensation, I would like to remind hon. Members that we must pay these pensions in any case when the officers ultimately retire from the public service. By the premature retirement, the total pension bill will, in fact, be reduced. If, therefore, we now strike a quick balance, we will have an expenditure of $21.4 million spread over a number of years against savings of $5 million a year plus a smaller pension bill, and I am sure in the end we will not be badly off. Sir, I beg to move.

Question proposed.

10.25 a.m.

Mr D. S. Marshall (Cairnhill): If it please you, Mr Speaker, Sir, I am conscious of some of the difficulties of the Government in negotiating this compensation scale, and I would like to say that I appreciate the statement of the Chief Minister when he spoke of hard bargaining. I also appreciate the fact that in the ultimate there was a pistol held to our head by the Colonial Secretary refusing merdeka unless the civil servants were satisfied. And because I appreciate the difficulties of the Government and because I ask this House to recognise the fact that they have no alternative, I fully support, without reservation, the Bill before us. But I think the Chief Minister and his colleagues will be at one with me in understanding the cry of pain of the people of Singapore at what many deem to be extortionate compensation.

It has been said that the basis of this compensation is for termination of the expectation of a full career by the civil servants. Sir, most of these 500 civil servants who are sharing between them the $21.4 million, averaging $43,000 per person - a sum, Sir, which not many in this country can save in a lifetime - $43,000 without income tax plus pension - I say that many of those who are sharing this have been appointed since the liberation. It is my impression, Sir - I am prepared to be corrected by the Chief Secretary if he can - that Her Majesty's Government, through her Secretary of State for the Colonies and through her Prime Minister, have repeatedly indicated that it is the intention of Her Majesty's Government to see that the Federation and Singapore should soon achieve self-determination. Consequently, if it is suggested that cadets of the ages of 20 to 23 appointed around 1946 to 1956 were told that they could expect a full career in Singapore, it would mean that there has been a fraud perpetrated - a fraud perpetrated either on them by the Colonial Office which, if it intended to fulfill the undertaking of Her Majesty's Government to grant self-government, must have known full well that none of these officers could expect a full career in the colonies, or a fraud perpetrated on this territory - the fraud being, Sir, that they led us to believe that it was the intention to grant early self-determination when there was, in fact, no such intention at all and in practice. Civil servants were continuously recruited - youngsters - and told that they could expect a full career of more than 40 years. In these circumstances, Sir, on whoever it may be that the fraud has been perpetrated, it is obvious that the fraud is at the door of the Colonial Office, and I ask the Government of Singapore to consider sending this bill to Her Majesty's Government for payment.

I have but one other comment to make, Sir. As I say, though the sum is large, the conditions under which we are compelled to fork out are such that we might even consider ourselves lucky that it is only $21.4 million. I would also draw attention to the fact that those whose careers are supposed to be terminated are in some instances granted back their careers of more than five years and in some cases ten years. Therefore, Sir, they are really getting double payment.

I would ask whether it is possible to reconsider the question of limiting payments in respect of those who seek to leave the territory when it is not convenient to Government's phasing plan. I would ask Government, even though it may be late, to consider this aspect, because otherwise it may mean that not only do we spend $21.4 million but we may have to spend a great deal more in short-term contracts, which are never attractive, to bring out specialists to fill the technical posts which I have in mind.

I know, Sir, that there will be criticism of this measure, but I do ask Members on the opposite side, when they consider it, to appreciate the acute difficulties in which the Government has found itself and of which they have ample indication.

10.32 a.m.

Mr Lee Kuan Yew (Tanjong Pagar): Mr Speaker, Sir, this Bill has been termed the "Retirement from the Public Service (Compensation) Bill". I think it would be more appropriate to call it the "Public Service (Sweepstake) Bill". Judging by the nature of the give-away prizes, I should think there are now three ways in which an Englishman in tax-ridden Britain can get rich:

(1) Win a football pool;

(2) Be a barrow boy and not pay income tax;

(3) Go to the colonies and be abolished.

We were told, when we wanted these men - or rather when our masters wanted these men to come - that we had to pay the price for them, to attract and retain their rare qualities. Now that we have to get rid of them for the excellent reasons given by the Hon. the Chief Minister, we are told that we have to pay through our noses to get them out of the place. We could wax quite eloquent and bitter about this if we went on and recounted all the dirty tricks that have been going on in the past, all the machinations, all the fictitious and fabulous reasons why we should have these white men rule us. But it was not really the fault of this handful of white men. They just took advantage of the situation. They were human beings.

But what does trouble us is, who is going to pay for this? The Chief Minister gave us logical, coherent reasons why we are, in fact, going to save, and why, by implication, we have been losing millions of dollars every year. But let me compute the figures in a way which the people of Singapore will understand better.

$21.4 million - what can that money buy for the people of Singapore? We were told, when the Government was putting up their housing schemes, that one housing unit would cost $4,000. Divide $21.4 million by $4,000 and we get somewhere around 7,100 housing units. Seven people at least can be housed in one housing unit. That means 50,000 people could be housed with this money. Those are the terms in cost to the people of Singapore. The white man's burden is becoming somewhat heavy for the black taxpayer.

Sir, the present Chief Minister is a much more modest man than his predecessor. His predecessor always went gallantly out in front and got shot! The present Chief Minister carefully chose to go behind the Tunku's sarong! First, he gets the Federation Government to say that $74 million is the price for freedom. I wish I could believe that $74 million is the only price for freedom. Then, that having become a fait accompli, he comes before this Assembly to tell us how careful consideration, careful co-ordination and careful husbandry has produced these fantastic figures at the end of the table. He says he willingly undertakes the burden because he wants the white men to go willingly and cheerfully and hope that those who remain behind will remain behind willingly and cheerfully. We like willing and cheerful people, but not at this expense.

Who is going to pay for this? We are told that it is going to be a phased programme and that the cost will be spread over many years. Be that as it may, someone must find the money. If this Government wants to show the people of Singapore that it is not throwing away the people's money, that it is not acting like company directors giving large bonuses to themselves and all their friends at the shareholders' expense, they might consider a capital levy on white enterprise in this country to pay for this. I do not think the suggestion of the Member for Cairnhill that we should present the bill to the Secretary of State for the Colonies would be a practical proposition. Britain, on the verge of economic bankruptcy after a gamble on the Suez Canal, is not likely to be able to afford anything like the fabulous sums their white agents require. But we have white vested interests in this country subject to our fiscal laws and I am all in favour of their paying off this handful of European civil servants who have held the ring for this group of European enterprising businessmen to make money out of this country. I think it is only fair and decent that they should share their spoils with all these honourable, hardworking, efficient administrators who have kept the shop going while their friends do business. I have looked up the income tax figures on public limited companies. I think the majority of the public limited companies, as opposed to private limited companies, are European. The Chinese, and I think the Indians too, prefer not to publish their accounts every year. They prefer to form little family concerns. The returns of a straight levy of 20 per cent just for one year on profits would produce the required sum. The Financial Secretary will correct me if I am wrong and give us the correct figure. My computation shows that a straight levy of 20 per cent on profits for one year would produce this $21.4 million which will keep all the European civil servants happy. We also will be happy, and those who are unhappy we can afford to ignore. That, I think, is the spirit in which we should approach this problem. We do not really want to take it out of this hard-working group of guardians who have been looking after our interests. We wish them a happy retirement. We hope they will be able to find their way to some other colonial territory from which they will be abolished at some later date, so that they will again have another big sweepstake with which to buy a little house in the south downs of England and live happily ever after.

10.42 a.m.

Mr R. Jumabhoy (Telok Ayer): Mr Speaker, Sir, I said yesterday during the debate on Malayanisation of the civil service, "Let us part as good friends"; but at the same time I would not like to incur the wrath of the taxpayers who have sent me to this Assembly. It is possible that most of the Members on the Government Benches may not stand for the next election. This may be the reason why they are putting before us such a huge compensation Bill.

Sir, the Chief Minister said that we must satisfy the frustrated men. I do agree with him that the local men should get their rightful place. The Chief Minister also said that we do not want an unwilling civil servant to work for us. The remedy is to dismiss him if he is unwilling and discontented. The third thing that the Chief Minister said was that he thought there might be a mass exodus. Why? After all, the expatriates are paid to serve us. It is for us to say who are to leave and who are to stay.

Sir, what is the compensation that we are proposing to pay to those who would like to leave? Is there any comparison? Have we taken into consideration the terms of compensation to be paid in the other British colonies? I understand Nigeria paid £5,000 or something like that to each expatriate. As far as we are concerned, I believe we are copying the Federation's scheme. Even then I think we are paying more than what the Federation pays. I do agree in principle that when we do not want an expatriate, we must give him abolition terms which are reasonable; but if we go beyond that, I think we will only be hurting ourselves as we have to pay out from the taxpayers' money.

The Member for Cairnhill has touched the right note in his speech when he said that Malayanisation was coming. Sir, the Colonial Office knew very well that Malayanisation was coming. In 1952 when the previous Legislative Council passed my motion on Malayanisation, the expatriates knew that in a short time they would be going out. How many have been brought in since then and joined the service as newcomers? Should they get such a big sum - as my good friend the Member for Tanjong Pagar has said - a sweepstake or a lottery?

Sir, we do say, "Let bygones be bygones." But we have to look to the future because we have to put up the money. In this connection the Chief Minister has said that he has done a lot of hard bargaining with the expatriates. Is it hard bargaining when we are paying the most that any British colony has ever paid to the expatriates? Sir, after gaining a lump sum in compensation, the expatriate who leaves will certainly serve somewhere else. Has that been taken into consideration? Has the Government also considered the fact that these expatriates will still be able to serve in other places for many years? I wonder whether the Government has considered the points which I have raised.

10.47 a.m.

Inche Ahmad Bin Ibrahim (Sembawang): Mr Speaker, Sir, in the old days the colonial rulers had a theory to explain why it was necessary to pay higher and fatter salaries to expatriate officers. It was claimed that expatriate officers had to be paid more because that was the only way to attract and retain them in service. They were hard to come by. It was therefore necessary to compensate them for self-exile in the outposts of the Empire by rewarding them with expatriation pay, better conditions of service and so forth. That was the theory before Malayanisation. We had to attract and retain expatriate officers who were most reluctant to bear the white man's burden.

Now we have a new theory. Now that Malayanisation is on the cards, the theory is that they need inducements to leave this attractive country. To judge by the abolition terms now being offered, it appears that it is more expensive to get them to leave their jobs than it was to attract and retain them. We must pay them handsomely to take jobs in the colony. We must pay through our noses to get them to give up their jobs.

The scale of compensation being offered by the Singapore Government is far higher than that offered by any other country so far, including India. Let us be clear about the right of an expatriate officer to abolition terms. It is not a legal right. An employer does not guarantee an employee a job for life. No firm in Singapore, not even European firms, can guarantee that a discharged employee must be compensated for loss of a career. I cannot understand why this vague moral claim should be made an occasion for outright plunder of the taxpayer. Generosity towards its employees has not been a marked feature of Government. Certainly when postmen and daily-rated workers of the Government asked for a miserable addition of one dollar a day, the Government never failed to beat its breast and mourn about impending bankruptcy. But $21 million is being gladly given away to highly-paid European officers. I cannot be a party to this.

10.50 a.m.

Mr G. A. P Sutherland (Nominated): Mr Speaker, Sir, I have very little to add to what I said yesterday when I was talking on the White Paper on Malayanisation, but I would like to bring to the attention of the House the rather Gilbertian suggestion by the Member for Tanjong Pagar that we should raise the money by taxing the 127 public limited companies in Singapore - make the white men pay for it. He may be interested to know that many of the public limited companies in Singapore are branches of companies in London and they are not the ones which submit the balance sheets locally. The ones that submit the balance sheets are locally established companies. Many of them may sound European, but if the Member for Tanjong Pagar likes to go to the Registrar of Companies and pays his dollar and examines the list of shareholders, he may find that the bulk of them are Chinese. So he will be robbing his own people!

Mr Lee Kuan Yew: I am much obliged! Now we know how to catch them!

The Chief Minister rose -

Mr Speaker: Mr Chief Minister, in reply?

10.51 a.m.

The Chief Minister: Yes, Sir. Sir, in my opening speech just now, I made reference to the Report of the Malayanisation Commission. This is to be our Bible. On this Commission were the representatives of various political Parties. Although they sat on the Commission not as representatives of their Parties, they were and still are members of Parties represented in this Assembly and each and every one of them did say in this Report that, in fairness to the people who have served us, they should be paid some measure of compensation. They did even recommend that the services of an actuary should be obtained, and I did say earlier in this debate that the Government as well as the Staff Association had briefed actuaries to work out the factor on the basis recommended in this Bible, and the actuaries, on that basis, recommended a factor of seven; and here this Government negotiated with the Staff Associations representing people who are now going to lose their careers in the service of this Govern- ment, and both of us agreed that a factor of 4.96 would be fair to the people of Singapore. Yet these people are being maligned in this Assembly. If they had stuck to their guns, they might have obtained a factor of seven as recommended in this Report. They felt that they had to play the game right to the end to the people of Singapore. Sir, we have two Members in this House who claim to represent the workers of Singapore. Yesterday we heard the Member for Tanjong Pagar raise a hue and cry because the workers, he felt, are being intimidated and exploited by the employers. Sir, his warped mind seems to think that workers, and only workers, are black people-

Mr Speaker: Order. I cannot allow the use of the word "warped".

The Chief Minister: I withdraw it. The Member for Tanjong Pagar, Sir, has a peculiar sense of appreciation of the justice that should be meted out to workers. On the one hand, there should be proper justice to people who are represented by him, and on the other hand there should be no justice to those people because they happen not to be represented by him.

Sir, some Members, I feel, have not made a proper study of the scheme. They seem to think that everyone, irrespective of his period of service in the Government, irrespective of his age and the period of retention offered by the Government, would get the same amount of compensation. It is not so, Sir.

I also said, Sir - let us not look back, but let us look forward to a happier Singapore, to a Singapore civil service staffed with local people, to a Singapore run by local people; but in this advance towards nationhood, let us not trample down on those who have served us well.

Question put, and agreed to.

Bill accordingly read a Second time.