GOVERNMENT LOAN BALANCES (To be charged to General Revenue Balance)

11.51 a.m.

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

That this Assembly resolves that the balances as at 1st January, 1957, of the following loans which have been hitherto shown as assets in the Colony Statement of Assets and Liabilities:- $ c. City Council, Singapore ... ... 2,250,000 00 Singapore Harbour Board ... ... 13,101,764 05 Penang Harbour Board ... ... 273,211 88 Singapore Chinese Girls' School ... ... ... ... ... 6,161 14 Singapore Improvement Trust Loan Programme No. 1 ... ... 4,160,000 00 Singapore Improvement Trust Loan Programme No. 2 ... ... 4,320,000 00 Singapore Improvement Trust Loan Programme No. 3 ... ... 11,433,000 00 Singapore Improvement Trust Loan Programme No. 4 ... ... 15,718,739 54 Singapore Improvement Trust Loan Programme No. 5 ... ... 20,822,729 23 Singapore Improvement Trust Loan Programme No. 6 ... ... 7,000,000 00 Singapore Improvement Trust Loan Programme No. 7 ... ... 5,000,000 00 Government of the Federation of Malaya ... ... ... ... 30,000,000 00 Singapore Government Officers' Co-operative Housing Society Ltd. - Loan No. 1 ... ... ... ... ... 176,000 00 Singapore Government Officers' Co-operative Housing Society Ltd. - Loan No. 2 ... ... ... ... ... 499,200 00 Singapore Government Officers' Co-operative Housing Society Ltd. - Loan No. 3 ... ... ... ... ... 898,172 00 City Council, Singapore - Kallang Area Traffic Scheme ... ... ... ... ... 3,000,000 00 Total ... ... 118,658,977 84 be charged against the General Revenue Balance.

Sir, in moving the Second Reading of the Appropriation Bill, 1957, in November last year, I said:

"Arising also out of a consideration of the Statement of Assets and Liabilities, is a proposal that existing long-term loans to the Singapore Improvement Trust and other bodies should be charged to expenditure and not shown as assets in the Statement. This proposal is made at the suggestion of the Director of Audit on the grounds that it is established financial practice that all transactions, including loans, which diminish the colony's free surplus of revenue should be recorded as expenditure at the time payment is made. In Singapore, the practice of showing as assets long-term loans, which in the case of the Singapore Improvement Trust are repaid over periods of up to 60 years, has sprung up since the war. The position has now been reached where these assets, which are in no sense of the term liquid, total about $126 million and, by being shown as assets in the Statement of Assets and Liabilities, paint an entirely erroneous picture of the strength and liquidity of the colony's finances. It has therefore been decided to agree to the Director of Audit's suggestion and to charge these long-term loans to expenditure. This will be done by resolution of the Assembly as soon as the accounts for 1956 have been closed and the exact totals involved are known. It will be appreciated, of course, that this is purely a matter of book-keeping. No additional expenditure is involved. The result will be that the Statement of Assets and Liabilities will give a much more accurate idea of the strength and liquidity of the colony's financial position. A Statement of Assets and Liabilities drawn up on this basis is, as I have said, shown on page 8 of the Estimates." [Vol. 2, No. 9, Col. 600-1.]

Sir, this proposal met with the approval of hon. Members. The only comment came from an hon. Member who suggested that a footnote should be added to the Statement of Assets and Liabilities appearing in page 8 of the Annual Estimates to the effect that these long-term loans, previously shown as assets, were now detailed in an appendix to the Estimates. Hon. Members will see that this has since been done.

I do not think, Sir, that I need give any further explanation to that which I gave in November last and which I have now repeated. There is only one point which I should mention. When the draft Estimates were drawn up in August 1956, it was thought that these long-term loans would amount to about $126,000,000 by the end of the year, and I mentioned this when I spoke in the Assembly. In point of fact, the Singapore Improvement Trust drew about $7,000,00() less under Loan Programme No. 6 during the remainder of the year; and the City Council drew only $3,000,000 instead of $4,000,000 in connection with the loan for the Kallang Bridge roadway. The total to be charged to expenditure on 31st December, 1956, was therefore only $118,658,977.84 as shown in the motion. Sir, I beg to move.

Mr Chew Swee Kee: I second it.

Question proposed.

11.56 a.m.

Mr R. Jumabhoy (Telok Ayer): Mr Speaker, Sir, I would like to have some explanation from the Hon. the Financial Secretary. Money has been loaned. Is not that money an asset? If it is, why should it be written off or debited to the General Revenue Balance? As the loans will eventually be returned why should not the amounts remain to be shown as assets?

Mr Hart: Sir, I am afraid I can give no further explanation to that which I gave in the memorandum which accompanied the Estimates last year, to the explanation which I gave in presenting the Estimates, and which I have repeated now. There is really nothing which I can add. The questions which the hon. Member for Telok Ayer has raised have been answered in the memorandum and in the statements which I have made in the Assembly.

Question put, and agreed to.

Resolved,

That this Assembly resolves that the balances as at 1st January, 1957, of the following loans which have been hitherto shown as assets in the Colony Statement o Assets and Liabilities:- $ c. City Council, Singapore ... ... ... 2,250,000 00 Singapore Harbour Board ... ... ... 13,101,764 05 Penang Harbour Board ... ... ... 273,211 88 Singapore Chinese Girls' School ... ... ... ... ... ... ... ... 6,161 14 Singapore Improvement Trust Loan Programme No. 1 ... ... ... 4,160,000 00 Singapore Improvement Trust Loan Programme No. 2 ... ... ... 4,320,000 00 Singapore Improvement Trust Loan Programme No. 3 ... ... ... 11,433,000 00 Singapore Improvement Trust Loan Programme No. 4 ... ... ... 15,718,739 54 Singapore Improvement Trust Loan Programme No. 5 ... ... ... 20,822,729 23 Singapore Improvement Trust Loan Programme No. 6 ... ... ... 7,000,000 00 Singapore Improvement Trust Loan Programme No. 7 ... ... ... 5,000,000 00 Government of the Federation of Malaya ... ... ... ... ... ... 30,000,000 00 Singapore Government Officers' Co-operative Housing Society Ltd. - Loan No. 1 ... ... ... ... ... 176,000 00 $ c. Singapore Government Officers' Co-operative Housing Society Ltd. - Loan No. 2 ... ... ... ... ... 499,200 00 Singapore Government Officers' Co-operative Housing Society Ltd. - Loan No. 3 ... ... ... ... ... 898,172 00 City Council, Singapore - Kallang Area Traffic Scheme ... ... ... ... ... ... ... 3,000,000 00 --------------- Total ... 118,658,977 84 --------------- be charged against the General Revenue Balance.

11.57 a.m.

Mr Speaker: Perhaps it will be convenient to hon. Members if we suspend? The next item deals with Local Government.

Hon. Members indicated assent.

Mr Speaker: The Assembly is suspended till 2.30 p.m.

Sitting accordingly suspended at 11.58 a.m. and resumed at 2.30 p.m.