Committee

[Mr SPEAKER in the Chair]

Clause 21-

Inche Abdul Hamid: Mr Chairman, I beg to move.

In page 82, line 41, to leave out from "languages" to the end of line 2 in page 83.

The words left out are "with a degree of proficiency sufficient to enable him to take an active part in any proceedings of that Council;". It is considered, Sir, that the words to be left out are unnecessary and confusing since they may give an impression that reading and writing are the qualifications which enable a person to take an active part in the proceedings of the Council whereas in actual fact ability to speak is the primary factor.

Amendment agreed to.

Inche Abdul Hamid: Mr Chairman, I beg leave to withdraw the next amendment of which notice was given.

[In page 83, line 7, after "those", to insert "dialects or".]

The Chairman: The Minister is not moving the amendment; please proceed with the next one.

Further Amendment made: In page 83, line 7, to leave out from "languages" to "; and" in line 9. -[Inche Abdul Hamid].

Clause 21, as amended, ordered to stand part of the Bill.

Clause 22-

Mr John Ede: Mr Chairman, we have given further legal consideration to this point and we now think that probably the point we had in mind is covered by sub-clause (e) of this clause. I therefore beg leave not to move the amendment.

Ord. of 1957.

[In page 83, after line 33, to insert: -

"(d) has been convicted of making a false declaration for the purposes of subsection (3) of section 27 of the Local Government Elections Ordinance, 1957; or".]

The Chairman: The Member is not moving his amendment.

Clause 22 ordered to stand part of the Bill.

Clause 25-

The Chairman: The hon. Member can move his second amendment; the first is only consequential- [In page 86, line 1, after "(2)", to insert "(a)".]

Mr John Ede: Mr Chairman, I beg to move an amendment,

In page 86, after line 5, to insert: -

"(b) The mayor shall cease to hold office as such, if he shall by writing under his hand addressed to the Chief Administrative Officer resign such office, on the date of the receipt of such resignation by the Chief Administrative Officer."

Mr Chairman, I think this is for once a non-controversial amendment. I think it is an omission from the Bill as it stands at the moment. There seems to be no provision for the resignation of a mayor. Sub-clause (2) simply reads:

"If the mayor is continuously absent from the City except on account of illness, without obtaining from the City Council leave of absence, for a period exceeding two months he shall at the expiration of that period cease to hold that office."

But there can be cases where the mayor, through severe illness or accident, or may be personal domestic reasons, would feel incapable of carrying out his duties as mayor and that he should be in a position to resign without delay and enable another mayor to be elected by the councillors. We have suggested that this resignation should be addressed to the Chief Administrative Officer as the senior executive officer in the City Council because the election of the mayor is a matter solely for the councillors themselves.

Mr Shanks: Mr Chairman, Sir, I have an amendment to propose to that amendment.

Amendment to the amendment handed in.

The Chairman: The amendment is in order.

Mr Shanks: Mr Chairman, Sir, the amendment that I have proposed does not alter the sense of that proposed by the hon. Member for Tanglin but will bring his amendment into conformity with paragraph (e) of sub-clause (1) of clause 25. With the alteration that I have proposed, there is no objection to the amendment proposed by the hon. Member.

The Chairman: Perhaps the Hon. the Attorney-General would like to read out the amendment?

Mr Shanks: I beg your pardon, Sir. The amendment which I move is,

To leave out "The mayor shall cease to hold office as such, if he shall by writing under his hand addressed to the Chief Administrative Officer resign such office," and insert "If by writing under his hand the mayor resigns such office, that office shall be deemed to have been vacated,".

The sentence would continue in the words of the original amendment, "...shall be deemed to have been vacated, on the date of the receipt of such resignation by the Chief Administrative Officer."

Mr John Ede: Mr Chairman, we shall be happy to accept the amendment.

Amendment to the amendment agreed to.

Original amendment, as amended, agreed to.

Mr John Ede: Mr Chairman, I beg to move,

In page 86, line 17, to leave out "councillor" and insert "member of a local authority".

Amendment handed in.

The Chairman: The amendment is in order.

Mr John Ede: Mr Chairman, this is just a matter of drafting, I think, which was overlooked and on which the Hon. the Attorney-General yesterday did agree that there was an inconsistency in having the term "member of a local authority" and "councillor" in the same sub-clause, and as this clause is at fault, I take this opportunity to make this correction.

Mr Shanks: Mr Chairman, Sir, that can be accepted.

Amendment agreed to.

Clause 25, as amended, ordered to stand part of the Bill.

Clause 26-

Mr John Ede: Mr Chairman, this point which we had in mind has now been covered by the amendment moved by my hon. Friend yesterday to clause 22 of the Local Government Elections Bill, and I shall not move my amendment.

[In page 86, line 39, after "held", to insert "forthwith".]

The Chairman: The Member is not moving the amendment.

Clause 26 ordered to stand part of the Bill.

Clause 29-

Mr John Ede: Mr Chairman, I beg to move an amendment,

In page 87, line 18, to leave out "to the major and".

And with your permission, Sir, I would like, for the purposes of debate, to take the next amendment with it.

The Chairman: That will be convenient.

Mr John Ede: The next amendment is,

In page 87, after 21, to insert:-

"(2) The City Council may pay to the mayor such allowances or expenses as the City Council may from time to time authorise.".

2.45 p.m.

Mr Chairman, the point of this amendment is simply this, that whereas we agree that the Governor in Council may or even should decide the expenses of City Councillors, it should be left to the City Councillors themselves to decide on what expenses should be granted to the Mayor. It should be remembered, I think, that the Mayor is elected by the City Councillors themselves and that it is entirely a matter for themselves to elect a Mayor of their own choice, and the Governor in Council does not come into the picture at all. There can be no interference from the Governor in Council with the choice of the Mayor by the elected Councillors. It therefore seems only appropriate that the allowances and expenses which should be allotted to the Mayor should be a matter for the Councillors themselves to decide.

Mr J. M. Jumabhoy: Sir, perhaps the hon. Member has failed to read clauses 67 (1) (g) and (h) in page 101 which empower the City Council to pay for expenses incurred on the occasion of public ceremonies in which presumably the Mayor would take the leading part, and also for receiving and entertaining of distinguished visitors who may be the guests of the Mayor. So there is provision given under the Bill to the City Council to incur such expenditure without going to the Governor in Council for sanction.

Clause 29 actually deals with the normal fixed monthly allowances or expenses which the Council may wish to grant to the Councillors and to the Mayor. If there are any extraordinary expenses due to visitors, functions or celebrations, the City Council has power under the other clause to pay them.

Mr John Ede: Mr Chairman, the point I would like to make in reply to the Hon. Minister for Commerce and Industry is this, that if it was felt by the Government that the clause to which reference has been made and of which I am very well aware - clause 67 (1) (g) and (h) - was sufficient, then surely Government could very well accept the first amendment, namely, to leave out "to the mayor and", but not to accept the second amendment which is to insert a new sub-clause (2) as proposed. But I do not think this point meets the point which we wish to make. The position is this, that the status and dignity of the Mayor is something, I think, which we need to establish from the start of the institution of this office. I think I am right in saying that a Mayor, certainly of a City Council which is incorporated by Royal Charter as is the City of Singapore, is the Queen's representative, and the Mayor's status is an extremely high one. In the land he is the First Gentleman of the City and I think this fact needs to be taken into consideration. I think it would be wrong certainly for the Minister and I think the Council of Ministers to dictate as to what the Mayor should or should not have as his expenses and allowances.

The second point, as I have already said, is that as the Councillors elect their own Mayor they should be given the responsibility of deciding what his expenses should be, his normal expenses and not of course those covered by clauses 67 (1) (g) and (h) which refer to the larger functions and forms of entertaining which a mayor must carry out in his position as head of the city. I think in his position as Mayor the normal expenditure of a Mayor would be higher than that of a City Councillor and there would be no doubt that the Governor in Council would grant a rather higher allowance in his case, but I do not think there should be any dispute on this matter. It would be undesirable that if the City Councillors themselves felt that the Mayor should receive, let us say, $750 a month for allowances and expenses for normal entertaining of people passing through and general entertaining within the City to the citizens of Singapore, the Governor in Council were to cut down the figure to $500 or whatever the figure might be. I think that would be an undesirable position. I think the responsibility of deciding on this particular figure can safely and properly be left to the City Councillors themselves who have, in the first instance, elected their Mayor.

Mr Nair: Sir, I think there are two types of expenses which the Mayor of our proposed City Council will have. One is the expenses which he will incur in inviting various distinguished persons and entertaining them in the capacity of the Mayor. I think, Sir, clause 29 deals with both these allowances and expenses of that nature and I am sure the Governor in Council will take care of those allowances and expenses.

Now the other type of expenditure is that dealt with under clause 67 (1) (h), like receiving and entertaining distinguished visitors and so on on behalf of the City Council. For that purpose, Sir, provision is already made in clause 67 (1) (h). But I do not think for a moment, Sir, that it is right and proper for a City Council to decide on allowances and expenses of their own, because there is a danger in it. It a particular Party gets a majority in the City Council, then it will be in a position to vote any money as it likes to keep the dignity of the Mayor. I think that will be a very undesirable practice. I do hope that it will not be allowed.

Amendment negatived.

Mr Chairman: I take it the hon. Member will not move the next amendment, in page 87, after line 21, to insert a new sub-clause (2)?

Mr John Ede: No, Sir, I will not.

Clause 29 ordered to stand part of the Bill.

Clause 31-

Mr John Ede: Mr Chairman, I beg to move an amendment,

In page 87, line 42, to leave out "office or offices" and insert "post or posts".

I think, Sir, that this is probably a drafting omission. It was overlooked during the deliberations of the Select Committee. I think the term "office" is only used for the office of Mayor or the office of Councillors and the intention behind this sub-clause is that there should be disciplinary powers in respect of persons holding a post or posts. If you refer, Sir, to page 77 of the Bill, clauses 11 and 12, you will find, I think, the term "post" is used throughout.

Mr Shanks: Mr Chairman, this amendment can be accepted by the Government.

Amendment agreed to.

Clause 31, as amended, ordered to stand part of the Bill.

Clause 39-

Mr John Ede: Mr Chairman, I beg to move an amendment,

In page 90, line 22, after "Council", to insert "excluding the Chairman".

Mr Chairman, the sub-clause to which we are referring, sub-clause (3), reads:

"No business shall be transacted at a meeting of a District Council unless at least eight members of the District Council are present:

Now if the Chairman is included as one of those eight you could have this position that in a meeting in which a quorum was present of only eight persons there could be four elected members on the one hand and three nominated members plus the Chairman on the other hand, so that the Chairman, with a casting vote could, with the help of the nominated members, arrive at a decision which the elected members object to. I think that is an undesirable position. I do not want to go into the merits of nominated members - it has already been dealt with - but I think the position that could arise is a wrong one whatever the arguments may be on nominated members. Where you have nominated members there should not arise the position, however honest the decision that may be come to, whereby the elected members can be out-voted by the nominated members and the Chairman. By the simple device of excluding the Chairman as counting towards this quorum you would with the eight have the position of five elected members and three nominated members.

The Chief Minister: Mr Chairman, Sir, earlier on in the day the hon. Member for Tanglin, in moving an amendment for an increase in the number of elected Councillors for the District Councils touched on this quorum of eight. He did say that this quorum of eight, which is more than half the total number, is much too much. It should have been one-third and in order to achieve that one-third there should have been more members. Now by his amendment he is going to make a quorum more difficult to comply with. He suggested that if we have only eight members, eight is already a majority of a total of 15 and it may happen that only four elected Councillors will be present at a meeting. Four elected Councillors out of a total of 12! Surely it is not suggested that elected Councillors will be less conscious of their duties than nominated Councillors who, by his suggestion, will be present with a 100 per cent strength? Four out of 12! I doubt that could ever happen because surely elected Councillors will feel - and feel quite rightly - that they have a more responsible duty to perform, and at any meeting of the District Councils there will be more than four elected Councillors attending. We oppose the amendment.

3.00 p.m.

Mr John Ede: Mr Chairman, I concede that there is an apparent contradiction in what I have said just now and what I said earlier about quorums, but that is of the Govermnent's own making. If a larger number had been accepted for the District Councils, this position would not arise. As to the second point of the Hon. the Chief Minister that surely as few as four elected members would never turn up at a meeting, I hope that that will not occur except on very rare occasions, and may be it will never occur at all; but the position could arise. That is the point, and it is desirable that it should not arise and that we should so devise this Bill that it will not happen.

Mr J. M. Jumabhoy: Mr Chairman, if the position does arise then the people of the district deserve what they get. If they can tolerate elected councillors who do not attend meetings then they do deserve what they get. At the next elections which come round in that district they should see that these chaps do not get returned.

Mr Francis Thomas: Mr Chairman, I do not know whether the opposing Liberal-Socialist Party wishes to amend the Standing Orders of this Assembly but I would point out that the quorum here is eight excluding the Chairman or Speaker, and under the present Constitution of the Assembly the business of Government could be carried on with only one elected Member present.

Mr John Ede: That is undesirable.

Mr Francis Thomas: The hon. Member has not moved an amendment, as far as I remember.

Amendment negatived.

Clause 39 ordered to stand part of the Bill.

Clause 40-

Mr John Ede: Mr Chairman, I beg to move an amendment,

In page 90, line 36, after "thereon", to insert:-

", provided that the mayor shall not be entitled to cast a vote on such questions".

Mr Chairman, we consider this a most important amendment, that the Mayor should not be entitled to a vote at meetings of the City Council or at committee meetings. Our feeling is that the Mayor should be above Party once he is elected to that office, that he should be strictly impartial and be seen to be so. I think that to have an impartial non-voting Chairman in the seat of mayor is essential for a newly elected Council with several languages if it is going to operate smoothly. I do not say, of course, and I do not intend to suggest, that it will be impossible for a Mayor to be impartial and to vote, but I think what we do want to see is that the Mayor is entirely impartial and that it would be of assistance if we were to put the Mayor beyond Party pressures and the Party line, so that he can carry out what is best for the city. His importance and influence should be shown outside the chamber in guiding Councillors on important matters, because most decisions in local government are in fact not really political matters at all, where politics should not enter in, and I think the Mayor who is placed in the position of being above Party would be able to wield influence which otherwise would not be so easy.

I think, Sir, if I may refer to your great office, that the value of Mr Speaker as a non-Party man has been shown in this Assembly. I think if we follow the principle, and we have accepted that principle and realised its value in this House, that for the first few years at any rate of the life of the City Council, as we found in the first few years of the life of this Assembly, that a Mayor is placed in the position of being above Party, it would be extremely valuable. Perhaps this could be relaxed in time to come just as I think it is intended under the new Constitution that this might be relaxed if the Assembly so wishes, but the traditions and practices of a Mayor as a man elected from the people and elected from the Councillors - these traditions and practices have still to be set up in this city, and during this stage I think, as I have said, this particular amendment would be exceptionally valuable in the counsellings of the City Council.

Mr J. M. Jumabhoy: Sir, this amendment shows the fundamental difference between our side of the House and the Liberal-Socialists. We believe, Sir, that an elected man should exercise his right. He should not under any pretence shirk his right and, whether he is a mayor or not, refuse to vote. Therefore once a man is elected by an electorate, nothing should be done to take away his right of voting and his right of representing the people who have elected him. It is an important principle, Sir, and we are not prepared to concede on this point. We stick by it, that an elected man has his right and nobody should take that away from him.

Sir, even the present City Council President does exercise his vote though he is not an elected man but a civil servant. He not only exercises his original vote but he exercises a casting vote when the need arises.

The hon. Member did make the plea that we would like to have an impartial Mayor but I suggest, Sir, that he is going against human nature in this. Human nature is such that one cannot always be impartial and even if you have a Mayor from whom the vote is taken away you will still find that he will not be always impartial. Besides, what will happen if in a City Council elections you find two Parties returned with equal strength? Then nobody would want to appoint a Mayor from his Party because if he did so it would lose one vote and it would then become the minority in the City Council.

Mr Lim Koon Teck: Sir, apparently the only objection of the Government side to this very constructive suggestion of the Member for Tanglin is because there is a fear that human nature cannot rise above partiality towards Party. I think that is a very sad admission. In this House we have seen how important it is to have a Speaker who is impartial and gives everybody a chance to speak no matter on which side he is. I strongly feel that it is essential in the first few years of the new City Council that we should have an impartial man as a Mayor.

Mr Francis Thomas: I would just like to point out, Mr Chairman, that there is a fallacy in comparing your position, with all respect, to the position of the Mayor. Under a Party political programme in contesting elections as we have in the City Council the Mayor will presumably be a man who has been elected on a Party political programme and has given his word to the people who have voted for him that he will try to carry that programme out. In the nature of things it is going to be extremely difficult or impossible for him to retain the trust of anybody if he goes back on the word which he has given; if he is pledged to seek to carry out certain objectives and then has to refrain from carrying them out. It may be that the Speaker in the House of Commons is an elected Party man but there you have over six hundred Members to choose from. Of course there is a very long tradition of extremely partisan Speakers long ago but gradually they built up a tradition how the office should be occupied and run and they have always got a spare man to put in. But that sort of thing does not apply here. I understand that the Speaker in the House of Commons in fact once he is chosen, retains his office and nobody can contest against him by agreement; he gets his seat uncontested thereafter.

Mr Lim Choon Mong: Mr Chairman, I rise just to express my alarm at the statement that a Party man is not able to be impartial. We know that Party men will be elected not only to the office of Mayor later on, but at present they are holding important offices like ministers. And if they cannot be impartial where will Singapore go? God help us, Sir.

Mr Francis Thomas: Could I have one more word, Sir? I am afraid the Opposition still misunderstands the situation. A man who has joined a political Party has formed his opinion as to how things should be done. We on this side of the House stand for a Socialist programme; on the other side of the House they stand for a capitalist-socialist programme, whatever that may be. And in this world, having formed your ideas, you then go to the people and say, "I want to be elected", and having done that you act impartially on the basis of the principles which you have accepted; but you cannot then say that although you are a Socialist by principle you will now impartially accept that capitalism is as good as Socialism. That would be to make nonsense of the whole thing. On the basis of Socialism you have to be impartial within your principles but you cannot be expected to abandon your principles and show that you have no mind or no power of decision between two matters on which you have already made your choice.

Mr John Ede: Mr Chairman, if we accept the view, as we on this side of the House do, that a Mayor or rather an elected Councillor, once he is elected as a Mayor, should be above Party - and I think that should be accepted in the interests of the welfare of the city - then I can only say that one is appalled at the reasons of the Hon. Minister for Communications and Works. The Minister said that the Mayor, or the Councillor when he has been elected as a Mayor, must carry out his Party programme at all costs. Now if that is to be the situation, what confidence is there going to be in a Mayor who is not going to consider the city as a whole above Party, but is going to carry out his Party programme right or wrong? You are going to be in a position of a biased man giving rulings from the chair, and I think that is a most undesirable position for the City Council to be in. And for the Minister for Commerce and Industry to be saying that he cannot expect a man always to be impartial only of course reinforces our point that the Mayor should be placed in a position above Party, as this amendment seeks to do.

3.15 p.m.

Mr J. M. Jumabhoy: Sir, either the hon. Member has misunderstood it or tries to misinterpret my statement and the statement of the Minister for Communications and Works.

I do not understand what power the Mayor is going to have in order that he should be impartial. After all, what powers are you going to give to the Mayor except only that he is a figurehead in the City Council? He presides over its meetings but he has no other power except this one vote which we propose to give him and which you wish to take out of his hands. He is not going to have the power of the President of the United States surely. He is not going to control a body with such big resources and big population that you want to make him so impartial. He is going to be just a figurehead presiding over meetings of the City Council. I think the Opposition Members are trying to exaggerate the position of the Mayor.

I, Sir, emphatically state here that we on this side of the House cannot be impartial to our Party programme. We must be partial and carry out our Party programme. If the Opposition think that we can be impartial, then they are mistaken. We have promised the electorate to carry out our Party programme and we shall carry out that programme as far as possible. So do not let anybody misinterpret it. We can be impartial in smaller things but when it comes to a Party programme, we cannot be impartial; we have to be partial.

Mr John Ede: Mr Chairman, I would just like to make a comment that if the position is that the Mayor is to be regarded purely as a figurehead, then the Government are introducing something which they do not understand.

Mr Lim Choon Mong: Sir, may I just give a solid example arising out of the quotations by the Minister for Communications and Works? He read out to us when the previous clauses were debated that City Councillors busied themselves with such things as whether A should sell hot drinks or B should sell hot drinks. Of course, if A happens to be a Party member, he gets two points down and if B happens to be another person not connected with the Party, he gets one point up, and still A is approved, then the partiality of a Mayor comes in. Such partiality can range from granting a licence to sell fish in a market to bigger things. I am alarmed that if this sort of affairs go on at high government level, it will be very, very bad for Singapore.

Mr Nair: Sir, I think we cannot accept the suggestion of the Member for Tanglin that the Government is unaware of the responsibilities of a Mayor and that it does not know what it is talking about. Sir, there are in the United Kingdom a very large number of City and Borough Councils which have Mayors and if the hon. Member were to look at the United Kingdom Local Government Act, he will find that Mayors there have votes. I think it is a very misleading suggestion to make that we are on the wrong track. I think the hon. Member is trying to figure the Mayor of Singapore as a piece of wood. I do not think, Sir, that the Government can agree to that.

Amendment negatived.

Mr John Ede: Mr Chairman, Sir, I do not wish to move my amendment:

[In page 90, lines 38 to 39, to leave out "whether or not entitled to vote in the first instance" and insert "not being the mayor".]

Clause 40 ordered to stand part of the Bill.

Clause 41-

Mr John Ede: Mr Chairman, I beg to move,

In page 91, lines 5 and 6, to leave out "or by resolution in respect of any particular meeting".

Perhaps I have your permission, Sir, to refer indirectly to the next amendment which is to some extent connected. It reads:

In page 91, line 10, to leave out "and" and insert "or".

Sir, this is quite a small amendment and I think these words are in fact unnecessary in their context; the sub-clause will then read:

"Such minutes shall, unless the local authority by Standing Orders shall otherwise decide, be open to inspection by the public...".

Now, it seems to me that it is better for the local authority to decide by Standing Orders throughout as to whether or not minutes should be open to inspection. The normal practice is that the minutes of every ordinary meeting of a local authority are open to inspection; in fact, they are gazetted but not that the minutes of proceedings of every committee are open to inspection. It seems to me better to make these provisions under Standing Orders which would define the type of meeting by such terms as "ordinary" meeting or "special" meeting rather than that there should be a resolution in respect of any particular meeting that it is not intended to have the minutes open to inspection. I think that might give the wrong impression to the public that, when a certain matter was being debated, the City Councillors were not desirous of allowing the public to know what was going on but if that is covered as it can be covered by Standing Orders, that impression could be avoided. In the same way, I think the word "or" in sub-clause (3) is preferable to "and". The sub-clause will then read:

"Such minutes or parts thereof may be published in the Gazette or in such other manner, if any, as the local authority may decide."

For the same reason, that "such minutes or parts thereof" in sub-clause (3) refer to sub-clause (1) :

"Minutes of the proceedings of every meeting of a local authority and of every committee thereof...".

Now, as I have said, in point of fact, the minutes of every committee meeting are not published in the Gazette. They are kept confidential and it is only the resolutions of that committee that are published and I think it is desirable to keep to that practice.

The Chairman: It has been proposed as an amendment:

In page 91, lines 5 and 6, to leave out "or by resolution in respect of any particular meeting".

The Question is, "That the words proposed to be left out, be left out." The debate may range over the next amendment:

In page 91, line 10, to leave out "and" and insert "or".

The Chief Minister: Sir, in the light of the explanation given by the hon. mover of the amendment, the Government is pleased to accept it.

Amendment agreed to.

Further Amendment made: In page 91, line 10: to leave out "and" and insert "or". -[Mr Ede].

Clause 41, as amended, agreed to stand part of the Bill.

Clause 45-

Mr John Ede: Mr Chairman, I beg to move,

In page 92, to leave out lines 18 to 22.

Sir, it seems to me that this particular sub-clause (4) is redundant if you take it in connection with sub-clause (1). Sub-clause (1) reads:

"A member of a local authority shall not vote or be present at the discussion of any matter before the local authority or a committee in which he has directly or indirectly by himself or by a partner any pecuniary interest:"

Sub-clause (4), it seems to us, is repetitive:

"A local authority may by Standing Orders provide for the exclusion of a member of that authority from a meeting of the authority whilst any contract, proposed contract or other matter in which he has such an interest as aforesaid is under consideration."

It may be remembered that this clause 45 was amended by the Select Committee and it seems to us that in making the amendment, it was overlooked that this sub-clause (4) is actually covered by sub-clause (1).

Inche Abdul Hamid: We accept the amendment.

Amendment agreed to.

Clause 45, as amended, ordered to stand part of the Bill.

Clause 60-

Mr John Ede: Mr Chairman, I beg to move,

In page 97, line 5, to leave out from "may" to the end of line 13 and insert:-

(a) with the sanction of the Minister sell, exchange or let on lease or otherwise any electricity, water or gas undertaking vested in it for such consideration or at such rent and upon such terms and conditions as the local authority with the sanction of the Minister may determine; and

(b) sell, exchange or let on lease or otherwise any revenue producing undertaking, not being an electricity, water or gas supply undertaking, vested in it for such consideration or at such rent and upon such terms and conditions as the local authority may determine."

Mr Chairman, the point of this amendment is, we feel that the sanction of the Minister - I was almost going to use the word "interference" of the Minister - should be excluded from undertakings other than the main public utility undertakings of electricity, water or gas. We do agree that it is right that the local authority should not sell, exchange or let on leave any of these three major public utilities without the Minister's sanction. These are vital to the daily lives of everyone on the island and any change should, of course, be carefully considered but we see no reason for the Minister's sanction being required in minor undertakings such as markets, swimming pools, hawkers' pitches, and things of that kind. If the local authority has power to build a market or a swimming pool from its own resources, as it can under clause 60 (1), without sanction, it should have powers to dispose of them.

When this was debated in Select Committee, it seemed that Government had failed to give any reasons for the Minister to retain his powers in respect of every kind of undertaking and when I asked examples of what other undertakings the Government had in mind, the answer came, 'There are none.'

Mr S. T. Stewart: Mr Chairman, Sir, in connection with the amendment of the Member for Tanglin, I would like to point out that there have been no inroads as the Member suggests into the powers of the local authority by the Minister. In fact, a similar power of the Minister exists in the present City Council; I think it is section 366 but, Sir, on reconsideration of this amendment, I am pleased to say that we accept the amendment of the Member for Tanglin.

Amendment agreed to.

Clause 60, as amended, ordered to stand part of the Bill.

3.30 p.m.

Clause 67-

Mr John Ede: Mr Chairman, I beg to move,

In page 101, to leave out lines 23 to 25.

These three lines refer to paragraph (d) of sub-clause (1). Sub-clause (1) reads:

"Local authorities are authorised to expend the appropriate local authority fund for the following purposes:-"

And (d) refers to:

"the acquisition, construction or establishment and maintenance, supervision and control of systems of public transport;".

It seems to us, Sir, that this clause is now an anachronism. Government's promise was the nationalisation of public transport and the removal of its control from the City Council. First steps have been taken in this direction: bus companies and services are now under an omnibus licensing authority. So if the Government is in earnest regarding its promises, it seems to us that this clause has now become redundant and need not be retained in the Bill. If the Government does not accept this amendment, it seems to us an indication that they are having second thoughts about the whole question of public transport and that they had pledged themselves to a policy which they do not propose to follow.

Mr Francis Thomas: Mr Chairman, I do not want to waste many words on this minor point. The hon. Member has obviously overlooked section 29 of Cap. 111 - the Singapore Traction Ordinance. If you would like, I can refer to it; otherwise we can accept that it provides reasonable grounds for retaining this power.

The Chairman: Perhaps the Minister may read the relevant section for the record.

Mr Francis Thomas: Yes, Sir. The section is of course the one which empowers the City Council to buy the Traction Company. Section 29 of the Singapore Traction Ordinance reads:

"The City Council may within six months after the fifth day of June, 1955 or within six months after the expiration of any subsequent period of seven years or within three months after the making of any Order by the Minister under either of the two immediately preceding sections by notice in writing to the Company require the Company to sell and thereupon the Company shall sell to the City Council the whole Undertaking, land, buildings, generating stations, substations, car sheds, works, materials, stores, rolling-stock and plant of the Company as a going concern. The total price failing agreement shall be fixed by arbitration, and in arriving at such total price the Arbitrator shall have regard to the fair market value of the Undertaking, as a going concern, but without any allowance being made for compulsory purchase."

The hon. Member will appreciate that that Ordinance is a specific Ordinance referring to the Singapore Traction Company. To take away from the City Council the power to expend money for this purpose, whilst leaving in the Traction Company Ordinance this provision, would be - in colloquial terms - to make nonsense of the situation. I think there is a legal point but I would not care to expound a legal point in this distinguished company. Briefly, you have an enablement under one Ordinance and you had better have the corresponding enablement under the other. The question of whether the enablement is going to be used or not is rather by the way.

Mr John Ede: Mr Chairman, if that explanation had been forthcoming from the Minister in the Select Committee, all would have been made clear. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Inche Abdul Hamid: Mr Chairman, I move,

In page 102, line 9, to leave out "real or personal" and insert "movable or immovable".

I understand, Sir, that the term "movable or immovable" is the appropriate term to use.

Amendment agreed to.

Clause 67, as amended, ordered to stand part of the Bill.

Clause 68-

Inche Abdul Hamid: Mr Chairman, I move,

In page 102, line 22, to leave out "Fund" and insert "accounts".

The last line in sub-clause (1), Sir, refers to accounts. It is against these accounts that all orders or cheques must be signed by the Treasurer.

Amendment agreed to.

Clause 68, as amended, ordered to stand part of the Bill.

Clause 81-

Mr John Ede: Mr Chairman, I beg to move,

In page 107, line 18, to leave out "nor, except in special circumstances, the period".

And I would ask, Sir, that the second amendment may be taken into consideration:

In page 107, lines 19 and 20, to leave out "under section 78 of the Ordinance",

which we agreed should, in fact, be section 79.

Mr Chairman, this clause refers to the period of redemption of monies borrowed by the City Council under clause 78 of this Bill. Money can be borrowed for any of three purposes, as given in sub-clause (1) of clause 78:

"(a) the acquisition of any premises which the City Council may acquire under this Ordinance or any other written law for the time being in force;

(b) the erection of any building which the City Council has authority to erect;

(c) the execution of any permanent work, the provision or renewal of any plant or equipment, the provision or replacement of any vehicles, or the doing of anything which the City Council has authority under this Ordinance to execute, provide or do if, in the opinion of the Minister, the cost of carrying out that purpose ought to be spread over a term of years:"

Now, Sir, there are three restrictions in clause 81 as regards the period of redemption. Firstly, the period shall not exceed 60 years in any case. With this, after due consideration, we are prepared to agree. The second restriction is that the period shall not exceed the estimated life of the purpose: that is to say, for example, 40 years in the case of a power station. We agree that this is financially sound. The third restriction is that the period shall not exceed the period of the loan under clause 79 of the Bill which loan under clause 80 shall be charged on City Council revenue. It is this restriction to which we object and which we seek to remove, bearing in mind that long-term loans are not easy to raise in the Singapore market and that short-term loans for long-term projects are all that can normally be hoped for. Let me now illustrate what happens. Let us suppose that the City Council wishes to raise a loan of $10 million to extend the power station; the life of the asset or this extension being, let us say, 40 years and the period of the loan 10 years. If the period of redemption is related to the period of the loan, namely ten years, then apart from considerations of interest, a refund has to be made under clause 82 of $1 million per year from your electricity revenue account. On the other hand, if the period of redemption is related to the period of the estimated useful life of the project, namely 40 years, then apart from considerations of interest, a refund of only $250,000 per year has to be made. This is a saving of $750,000 per year in your revenue account. What is the result? As a result of this saving, the unit price of electricity can be reduced and the present generation is not being made to pay unnecessarily heavily for the benefit of future generations. The unit price of electricity not only can but ought to be reduced in this way and I would suggest, particularly, for industrial purposes, because if the Minister for Commerce and Industry could attract industrialists to set up factories here today, as indeed is the policy of the Government - one of the inducements being an adequate supply of cheaper power - we should be better off not only now but in the future and we would therefore be in a better position to raise further loans in the future. The very fact that the City Council has to redeem loans within the period of the loan and not within the estimated useful life of the purpose does tend to handicap much needed development. Not only the present generation suffers by having to pay an inflated price for electricity, but the future generation suffers through lack of industrial expansion today. The amendment before us will remove this unnecessary and short-sighted restriction.

The Chairman: It has been proposed as an amendment,

In page 107, line 18, to leave out "nor, except in special circumstances, the period".

The Question is, "That the words proposed to be left out, be left out." In debating that Question, the debate may range over the next amendment:

In page 107, lines 19 and 20, to leave out "under section 78 of the Ordinance".

3.42 p.m.

The Financial Secretary (Mr T. M. Hart): Mr Chairman, I should say, before I start to reply to the hon. Member, Sir, that of course the proviso to which he objects does not preclude short-term borrowing.

As hon. Members are aware, under the existing Municipal Ordinance, the City Council is obliged to arrange for the redemption of a loan within the period sanctioned for the repayment of a loan. In other words, the period of redemption must be not more than the period for repayment. The period of redemption is not related to the useful life of the purpose for which the loan is raised. This would be clear from the minutes of the Parliamentary Bills Committee which are quoted on page 38 of the Sessional Paper L.A. 10 of 1957, that is, the book containing the Bill.

Before proceeding further, Sir, I should perhaps make it quite clear that a distinction has been drawn in this Bill between redemption and repayment. This distinction was not made in the existing Municipal Ordinance. Unless this distinction is clearly understood, discussion of the clauses of the Bill referring to loans will be largely meaningless. Here again, I would refer to page 38 of the Sessional Paper. Repayment is the physical act of repaying the subscribers to a loan. Redemption in this context refers to the arrangements made by the borrower to provide funds for repayment and I hope this distinction is clear.

For some time, financial officers of the City Council have considered that the terms of the Municipal Ordinance are, in certain circumstances, unnecessarily restrictive on the Council's powers to raise and redeem loans. Short-term borrowing has been rendered difficult because of the difficulties of redeeming a loan over the short period for which it has been raised. In some cases, where money has been raised for a purpose with a long useful life, it has not been possible to redeem the loan over that period although there may have been a strong case for doing so. In this latter connection, however, I must make it clear that at no time has it ever seriously been suggested that a loan should be redeemed over a longer period than 60 years even although the useful life of the purpose for which the loan is raised may appear to be more than 60 years. I must emphasise this. Sixty years is a very long time: in fact, two generations or the lifetime of an average man. There are very few purposes which have a useful life even approaching 60 years. By useful life, I mean the period of life of an asset before it requires major expenditure on replacements or to modernise it or adapt it to meet current requirements. Even in the case of permanent buildings, it would be a rash man who would say with complete confidence that the useful life, that is, the period of life before repairs, adaptations and modifications were required, was over 60 years. Again, since these modifications would normally require fresh capital, it would be unfair that any particular generation of consumers should be saddled with the financial consequences of their great-grandfathers' undertakings as well as their own. For these reasons, it has never been seriously suggested that the period of redemption of any loan should exceed 60 years.

As I said earlier, the financial officers of the City Council have been anxious to obtain some relaxation of the restrictions placed on the City Council's powers of borrowing and funding by the Municipal Ordinance. When clause 81 was drafted - at this stage, I should say that the financial clauses of this Bill were all drafted by the City Treasurer and have only been subjected to minor modifications since - it was provided that every sum borrowed under section 78 - which should read 79 - shall be redeemed within such period not exceeding 60 years as the City Council with the sanction of the Governor in Council may determine. In short, clause 81, as it appears in the Bill without the proviso.

When this clause came to be discussed with the City Treasurer, it was readily agreed that a proviso should be added to the effect that such period shall not exceed the estimated useful life of the purpose for which the money has been raised. Quite obviously, it would be most imprudent to fund a loan over a longer period than the useful life of the purpose for which it had been raised and I am sure that hon. Members will agree unanimously on this point.

So far so good. It had, at this stage, been agreed by all parties concerned that clause 81 should read as follows:

"Every sum borrowed shall be redeemed within such period not exceeding sixty years as the City Council, with the sanction of the Governor in Council, may determine: Provided always that such period shall not exceed the estimated useful life of the purpose for which the money has been raised."

At this stage, however, it had become clear that the matter was not quite as simple as it would at first appear. There were certain very important considerations which had to be taken into account before giving the City Council the powers contained in this clause. Firstly, the policy relating redemption to useful life rather than to the period of a loan means that on the due date of payment, the money available in the sinking fund will be less than the amount required for repayment. It also assumes that the borrowing authority can count on being able to float a loan to pay off the original loan whenever it is required. This, of course, is the position in England where there is a highly developed loan market and where local authorities can count with reasonable certainty on being allowed and able to float a loan wherever it is required but it is doubtful if the situation will ever be quite the same in Singapore. One is, of course, looking into the future and speculating rather than speaking with certainty about conditions which may then exist. It does, however, seem at least uncertain whether in the foreseeable future conditions in the local capital investment market will be such that the City Council could count with certainty on being able to float a redemption loan at any given date. In the first place, the City Council has already a substantial burden of debt. This is bound to increase considerably in the future and the local investing public will in the end be very heavily committed in respect of City Council loans with possibly a corresponding reluctance to become further committed. Again, the amount of capital available for investment will not be unlimited and there is certain to be competition for what is available. In all these circumstances, it seems at least doubtful that the City Council will always find it easy to float the loans it requires. It may, in fact, find it extremely difficult. This is a point which has to be borne in mind before agreeing that the City Council should embark on a new policy of loan redemption which is dependent for success on the ready availability of loan money. Secondly, it appears probable that if any relaxation of the present safe funding policy of the City Council is allowed in the interests of the present generation of ratepayers and consumers, the Council will be under great pressure from political interests to exploit the relaxation to the uttermost and this pressure will be passed on to the Government. Thirdly, account must be taken of the possible effect of a radical change in the funding policy on the credit of the City Council. So far, the Council has not had very much trouble in obtaining the loan money which it has required. It has had a free run of the Singapore market without competition from the Government or other borrowing authorities. It was borrowed for revenue producing purposes. The financial policies of the Council have commended themselves to the public and perhaps, as important as anything else, the Council has been obliged by law to redeem the loans within the period for which they were raised. Assuming the continuing liability of the Council, subscribers have always been sure of their cash. If this funding policy is changed and if a new policy is applied indiscriminately to all loans, potential subscribers, having intimate knowledge of the local loan market and of possible conditions in the future, might possibly be frightened off. This factor cannot be ignored. Fourthly, there is no gainsaying the fact that the soundest and most prudent policy which any local government authority with a large loan development programme can follow is to redeem as many loans as possible within the periods fixed for repayment. As I say, there is no gainsaying this. Lastly, although the City Council enjoys a large measure of autonomy, the fact remains that Government does, in the last resort, underwrite its loans. This gives the Government a special interest in the loan policies of the Council.

All these measures which I have just mentioned were discussed at great length with the City Treasurer and balanced against the desire and need of the City Council for a more liberal loan redemption policy than as at present allowed under the Municipal Ordinance. In the end, a conclusion was reached that it would be unwise to give the Council carte blanche in this matter, that the normal policy should continue to be to redeem loans wherever possible within the period fixed for repayment, that any extension of the period for redemption should be an exception rather than the general rule and that when such exception was made, the extended period should not exceed the useful life of the purpose or 60 years whichever was the lesser. Clause 81, as drafted, gives effect to this conclusion. It does not exclude the relation of the period of redemption to the useful life of the purpose. It merely says that this will be allowed not generally but in special cases.

I feel sure that in view of the special considerations which I have mentioned, hon. Members will agree that it is desirable to define the limits of loan redemption policy as has now been done in clause 81.

I have been asked in what circumstances will the Governor in Council exercise discretion in this matter. In other words, what would be the special circumstances? This question cannot of course be answered specifically. It can only be answered in general terms. Generally, the special circumstances will, I imagine, be dictated by the needs of the Council to obtain loan money at any particular time and by the state of the loan market at that time. If funds are essential and can only be obtained on short term on reasonable terms, then the Council would, I imagine, normally be allowed to float a short-term loan and fund it over the life of the purpose for which it was required. If, however, money could be obtained at reasonable rates for a period which is not too far short of the useful life of the purpose, as has happened not infrequently in the past, permission would not be granted. As I say, however, it is difficult to speak in other than general terms on this matter. Many imponderables are involved.

Sir, in the circumstances which I have outlined, Government cannot accept the amendment.

3.57 p.m.

Mr John Ede: Mr Chairman, I suppose that Financial Secretaries by nature and by training must be full of gloomy forebodings of the future.

There are one or two points I would like to make indeed in answer to the Financial Secretary, and there are one or two points which he has not answered to what I stated at first, and I hope he will answer them later on. The first point is this, of course, that I did state quite clearly that we agreed with the first restriction, as I called it, under clause 81, that the period of 60 years should be the limit. Secondly, I also made it clear that we agreed that the period of redemption should not exceed the estimated useful life of the project and in the example I gave of an extension to a power station, I quoted the period of 40 years. So that we are in agreement with the first two restrictions but what we are not in agreement with is the third relating to the relation of the period of redemption to the period of the loan.

Now, the Financial Secretary did say that it would be unwise to give carte blanche to the City Council in this matter. Of course, the City Council is not now being given carte blanche at all because it is quite clear in clause 78 that the City Council may only borrow with the sanction of the Governor in Council. It is quite clear in clause 81 that every sum borrowed shall be redeemed within such period not exceeding 60 years as the City Council, with the sanction of the Governor in Council, may determine. There is no question therefore of giving carte blanche to the City Council as the Governor in Council has the last word.

Now, as I say, I think the Financial Secretary regards the future with too great pessimism and to assume that loans cannot be raised in the future in Singapore in the way it has been in the past is, I think, far too pessimistic an outlook. He said that he was doubtful whether they can float loans in the future as they did in the past. Now, if there is to be no floating of loans in the future in Singapore, then we may regard that as the end of Singapore. So I do not think that argument can carry very great weight. The thing is that, as I explained, through the keeping up of the price of electricity or the price of water, through having to keep the period of redemption to the period of the loan, we are hamstringing the future. If we could reduce the prices of electricity or water (and I know this is a matter in which the Minister is extremely interested), then by expanding our industry through these decreases today, we will make the whole financial position of the Colony more buoyant in the future.

The Chairman: Order. Moment of interruption.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the Assembly.

Inche Abdul Hamid: Mr Speaker, Sir, I beg to report that some progress has been made in Committee on this Bill and beg leave to sit on Monday, 29th July.

Mr Speaker: Monday it will be.