GOVERNMENT POLICY ON LOCAL INDUSTRY (Statement by the Minister for Commerce and Industry)

10.16 a.m.

Mr J. M. Jumabhoy: Mr Speaker, Sir, though Government welcomes investment in the industrial field from individual financiers and groups with large capital resources, Government feels that the time has come when the people as a whole should not only directly participate in but also benefit by their country's industrial development. Government realises that the working man and woman in Singapore has up to now had very little opportunity or incentive to actively participate in the ownership of industries and to benefit therefrom. Government therefore feels that it is not only necessary but also the duty of an elected Socialist Government to actively assist the people in owning and opening some industries which are profitable because they produce goods needed by the vast majority of the population. Such ownership should not be by the State with publie funds but rather directly by the people on an individual basis so that every individual shareholder benefits directly from the profits.

In order to achieve this purpose, Government proposes to set up a People's Sector in industry, and some of the industries which produce goods needed by the vast majority of the people and are therefore a portable proposition will be reserved for this Sector in which at least 51 per cent of the shares shall be held locally. Holding of these shares is intended for the working man and woman on an individual basis or for the Government's Industrial Promotion Board. No large local shareholding from this percentage will be allowed.

In order to organize the working man and woman for the new role of industrial ownership, a People's Investment Corporation will be set up with shares at $10 each to enable every working man and woman to participate by owning at least one $10 share. In order that the Corporation is really an organization of the people and is not monopolised by a few big shareholders, no person shall be allowed to hold more than 50 shares.

Initially, as the first target, it is proposed to reserve the further manufacture of cigarettes and the manufacture of matches in Singapore for the People's Sector, and as soon as the People's Investment Corporation has sufficient finances, it will be invited by the Government's Industrial Promotion Board to participate in the setting up of a People's Cigarette Factory with an investment of 49 per cent. Government's Industrial Promotion Board will hold 2 per cent, and outside manufacturers of cigarettes of only popular brands would be invited to contribute up to 49 per cent and to manufacture cigarettes of their popular brands and to supply the technical know how. If such outside manufacturers are not willing to join in the proposal, the remaining shares in the People's Cigarette Factory will be taken up by the Industrial Promotion Board. Restriction will be placed on the import of cigarettes as soon as the factory starts production. It is not the intention of Government to restrict the operation of existing Singapore cigarette factories which were in production on the 13th August, 1958.

A People's Match Factory would be set up in which the People's Investment Corporation would be invited to invest 49 per cent along with 51 per cent from the Government's Industrial Promotion Board. This factory will be given a monopoly for manufacturing matches in Singapore and imports of matches will be prohibited.

The Industrial Promotion Board will start taking the necessary steps right away towards establishment of these factories.

In order to encourage the people to invest in the People's Investment Corporation, a mass investment campaign will be started by the Government as soon as the machinery for setting up the People's Investment Corporation is ready.

Mr Lee Kuan Yew (Tanjong Pagar): After such a weighty statement, could the Minister inform us how much deliberation has been given to this matter before the pronouncement this morning?

Mr J. M. Jumabhoy: Sir, the hon. Member may rest assured that due deliberation has been given before this statement was made and that it has not been made just like other mass campaigns are being made at the moment.

Mr Lee Kuan Yew: My question was a quantitative one, not a qualitative one. How much in point of time - when did the idea first occur?

Mr J. M. Jumabhoy: Sir, I have been toying with this idea for more than half a year now.

Mr Lee Kuan Yew: When did he cease toying and seriously consider?

Mr J. M. Jumabhoy: Since the last two months.

Mr Lim Choon Mong (Serangoon): Is the Minister certain that subscriptions to his scheme will come in and that it will not go the same way as the City Council loan?

Mr J. M. Jumabhoy: I am sure, Sir, in a Socialist-bent society where every politician is crying out against capitalist ownership and all that, and here is an opportunity for the public to own some profit-making industries, I am certain that the public will duly take note and take part in such a profitable proposition.

Mr R. Jumabhoy (Telok Ayer): Would it not be wiser -

Mr Lee Kuan Yew: $10 shares for you!

Mr R. Jumabhoy: - if such experiments could be undertaken by a stable government instead of by the present unstable Government?

Mr J. M. Jumabhoy: Sir, that is a pet theme with the Member for Telok Ayer. However, we consider ourselves quite stable.