APPROPRIATION BILL

Order read for resumption of debate on Question [3rd December, 1958], "That the Bill be now read a Second time."

Question again proposed.

10.07 a.m.

Mr J. M. Mason (Nominated): I rise with a plea for sanity. On 3rd December, the Financial Secretary informed this House at the commencement of his speech that 1958 has not been a particularly easy year. Most businessmen will have described 1958 in considerably stronger and more derogatory terms. The Financial Secretary went on to inform the House that the recession in trade in the U.S.A. was being felt in Singapore in the spring of 1958 and to use his own words, "By May,, money became tighter. Trade drifted into the doldrums" - a true enough picture. And today there is little real promise of any improvement.

Singapore business is still on the sick list, and it is only after a fairly long period of convalescence can it be expected to improve. What medicine has the Hon, the Financial Secretary prescribed for the patient that he so clearly diagnosed as sick? Nothing less than a steep rise in company tax of 10 per cent - a medicine which will undoubtedly send the patient back to his sick bed, if not into the morgue! However, Sir, we must assume that Government have had to agree to this rather extraordinary measure in order to assist our friends north of the Causeway, who, unlike Singapore, are faced with a very large deficit - surely a noble gesture on our part. Particularly when one realises that had the Company tax in Singapore remained at 30 per cent and the Federation Company tax been increased to 40 per cent, we would have seen an immediate reversal of that flow of industries which have been leaving Singapore for the Federation. How sad the Minister for Commerce and Industry must be to see such an opportunity wasted. Nevertheless, Sir, the proposed action is in accordance with the policy of all Parties in this House, namely, that of co-operation with the Federation, and no doubt it will meet with this House's approval.

At this stage of the proceedings, most hon. Members no doubt expected that, apart from some minor juggling with tariff duties, the Financial Secretary would resume his seat. Not at all. The Financial Secretary went on to inform the House that although the Federation Government cannot see its way to take similar action, this House is to be asked to approve a rise in the rate of income tax on personal incomes - a proposal surely quite contrary to the agreed policy of co-operation with the Federation Government. With your permission, Sir, I will quote the Financial Secretary's own words:

"Singapore has no satisfactory future unless she is associated in the closest possible way fiscally, financially and economically with the Federation."

How then does he reconcile his suggestion that Singapore should take independent action? No doubt in his reply the Financial Secretary will assure hon. Members that he is confident that the Federation will follow our action in due course. How often, Sir, have such prophets been discredited? If the Federation Government find that, by having a lower personal income tax - however small the difference may be - they can attract business and businessmen, then why should they throw away such an advantage? Why then, when Singapore is struggling, does the Financial Secretary seek to handicap us out of the race?

I deeply sympathise with the Minister for Commerce and Industry who, with his Pioneer Industries Bill, Control of Manufacture Bill, and other Bills, is doing all he can to assist industry in this Colony, and now, if this motion goes through, will see yet further reasons for businessmen to prefer the Federation to this Island.

In the course of this debate, hon. Members may be informed that the difference is so small that it will not make any difference, that it will not be sufficient inducement for industry to move to the Federation. That, Sir, is not the point. The principle of a Pan-Malayan fiscal policy is at stake. There is an old proverb, "Great oaks from little acorns grow", and if this House approves this dangerous motion, we may well in the future find that a precedent has been established and that personal income tax in Singapore is always higher than that in the Federation; that is until such time as all business has moved from Singapore to the Federation.

In the beginning, I referred to an understatement by the Hon, the Financial Secretary regarding 1958, but surely, Sir, he must claim the privilege of the greatest understatement of 1958 when he blandly informed this House that different rates of tax on individual incomes being used in the two territories will not cause any administrative inconvenience or difficulty. I can only think that he meant that it would not cause him any inconvenience personally. I do not for one moment imagine that those officers who are charged with the collection of income tax will endorse his opinion. There are many people whose incomes are unaffected, whether they live and reside in the Federation or in Singapore. Surely then those people will elect to reside in the Federation. It could even be that this, if I may say, ludicrous suggestion might result in loss of collection of income tax in Singapore, instead of earning the paltry $5 million which seem to be worrying the Financial Secretary so much. Furthermore, differences in rates of income tax in countries so adjacent as the Federation and Singapore must lead to further evasions of payment of income tax. No administrative difficulties? Nonsense!

I do not know, of course, what line the P.A.P. will take on this matter. If their leader shows his usual honesty in these matters, he will undoubtedly attack this motion. At the last sitting of this House, the hon. Member for Tanjong Pagar stated that the Federation sets the pace. He will, therefore, surely maul the suggestion that on this occasion we should set the pace. If he does not, I can only assume that he is so confident and so certain that this motion is dangerous, so ill-advised and so down-right silly that it will be worth thousands of votes to his Party next May.

I know it is difficult, almost impossible, for Government supporters to vote against the Party line. But I would like to remind Members, particularly those who have recently crossed the Floor, of the Financial Secretary's personal opinion. In his speech, these are his very words:

"In my humble opinion, while an integrated Pan-Malayan economy would be to the incalculable advantage of both territories, Singapore has no satisfactory future unless she is associated in the closest possible way fiscally, financially and economically with the Federation. All possible efforts must be directed over the next two or three years to achieving this association."

Sir, that is practically an invitation to vote against his own proposal.

Sir, I am Malayan-born. I have worked all my working life in this country. This is the last speech I shall make in this Assembly. I have no axe to grind All I say to the Financial Secretary is: let him practise what he preaches.

10.22 a.m.

Mr A. R. Lazarous (Farrer Park): Mr Speaker, Sir, the Financial Secretary has in his Budget speech not only referred to the 1959 Estimates, but has also reviewed the Estimates for 1957 and 1958.

One of the events for which this Government was responsible was the Malayanisation Scheme. Sir, the people of Singapore were in favour of this Scheme because they thought that, by this Malayanisation Scheme, quite a good amount of the money that has been paid to the expatriate officers could be saved; and secondly, the local officers who are promoted to fill those vacancies would be able to work for a lesser pay, and, as a result, Government would be able to save quite a large sum of money. But now, this present Government has let down the people of Singapore. They have not only given an enormous amount of money as Malayanisation allowances to the expatriate officers, but they have also allowed the local senior officers who are filling these posts to draw the same amount of pay and allowances as was drawn by expatriate officers.

Sir, in this Budget, the personal emoluments alone come to about $115 million, i.e. 40 per cent of the entire Budget. I shall quote an example of how the Singapore Government, by this Malayanisation Scheme, has wasted a big sum of money. Sir, I am taking my example from the Public Works Department. An engineer who is in a very junior grade, say, for example, draws $800 a month. The senior officer, who was supposed to draw, say, $3,000 a month, by taking advantage of the Malayanisation Scheme, retires. The next man gets in; he retires. And then another man gets in. But all these men who are getting to the top are receiving the same amount of pay. If there is an engineer in a junior post who wants to retire, let him retire when he is in the junior capacity. By taking advantage of this senior capacity allowance, the senior officer retires, and when he does so, the junior man takes his place and receives the same allowance and the same pay. If a junior officer retires when he is drawing $800 or $1,000 a month, he is supposed to get $30,000 under the Malayanisation Scheme; but when he moves up to a senior position, he is not only drawing $3,000 and allowances but is also getting the benefit of the Malayanisation Scheme by which he will be able to draw about $100,000.

Sir, when I examine very closely the implications of this Malayanisation Scheme, I personally cannot but feel that it was merely a conspiracy between certain local senior officers and expatriate officers conveniently to collect big sums of money at the cost of the Singapore taxpayers.

Sir, here is a good case to review the salary scale of senior Government officers. With this end in view, I would ask this Government to set up a Salary Commission to review the salaries of the senior officers who are drawing, say, $500 and above. Pruning must start from the top and not at the bottom, which the Government usually does.

I know that recently there was a scheme to reduce the salaries of the lower-paid staff - the Normal trained teachers, nurses and so on.

In this connection, I wish to express the hope when the Yang di-Pertuan Negara replaces the Governor, it will not cost the same amount of money which goes to meet the expense to maintain the establishment of the Governor. Pomp and ceremony must give way to the needs of the people and Singapore cannot afford to imitate the colonial system and the ancient monarchies.

I would suggest that when the present Governor vacates his residence, this palatial building could be used as a museum or as an art gallery or converted to some educational or aesthetic activity.

Lastly, I would like to congratulate this Government on introducing relief work for the unemployed. Quite a lot of people in Singapore are without jobs. But the $1.5 million provided is quite inadequate. I would request Government to make provision for at least $2 million or $3 million from the money taken from the highly-paid senior officers in Government service.

10.28 a.m.

Mr Seah Peng Chuan (Kampong Kapor): Mr Speaker, Sir, in my opinion, the Budget for 1959 was drafted by some very clever men with a view to pulling wool over the eyes of the public. The Budget will not, in fact, improve the standard of living of the man-in-the-street. It provides nothing new in the form of improving the standard of living of the people. What the Government is asking from them is to pay more income tax, pay more for cigarettes and unemployment. As a direct result, Government is forced to increase company tax to meet the Budget.

Sir, when the Government increases company tax to bring it at par with the Federation, I wonder whether this will affect the future industrialisation of this country. We are facing unemployment, and need more and more industries to absorb the unemployed. It is the duty of the Government to give all possible assistance to industry, so that people may be encouraged to invest more in Singapore. There will then be more employment for our youths.

In fact, the Government has increased the taxes just to please the Federation. I do not know the reason why such a heavy tax was imposed on companies. I want this House to know that this Bill has a far-reaching effect on the economy and social standing of this country. Let me ask the Government one question. Has the Federation at any time shown a willingness to co-operate with us, unless their interests are involved? I am sure all will agree with me that there must be mutual understanding and co-operation in all undertakings.

Sir, coming to the Budget now, let me recall a statement made by the Hon, the Financial Secretary when he said that the revenue for the year 1959 will be a record one in post-war years; but he did not say a word about the expenditure which beats all previous records. In other words, we will have a record revenue but with greater expenditure than in previous years. Government has no plan for any capital expenditure. We have to increase income tax and duty on cigarettes.

Another feature of the Budget is that money is being provided for all Ministries, although many of them will have to undergo clerical changes after the general elections next year. I am at a loss to understand as to what will happen to the surplus money voted for these Ministries when they undergo changes. We may accumulate this as a gift to the British Government, which is what the Progressive Party did in 1950!

Sir, this is a standstill Budget and, as such, I do not wish to go into detail. However, I would like to point out that this Budget is drawn up with a view to collecting the maximum from the rate-payers and to providing them with little amenities, which is contrary to democratic principles. May I remind hon. Members of the House that they have been elected by the people to look after their interests and not to repress them in the name of democracy or socialism? Sir, we have to carry out the mandate of the people and we have to answer them very shortly when we stand on the public platform again.

Sir, with regard to unemployment, I would like to point this out to the Minister for Labour. In page 1 of the Strait's' Times of Thursday, 11th December, 1958, the speech of the Minister of Commerce and Industry, Federation - not Singapore - was reported.

"He disclosed that more than 40 new factories will begin operations in Malaya next year."

This shows how much the Federation Government is doing for the welfare of the people. Further to that, Sir, he said:

"Closure of even one factory will throw hundreds of people out of work."

He expressed concern over the families of these hundreds of people by saying:

"This means that thousands of human beings will suffer because their families will also be affected."

That means that he has at heart the interest not only of the workers who will be unemployed but also their families. That is very clever of the Minister of Commerce and Industry of the Federation.

On the question of the ban on textiles, Sir, which was imposed by the Federation with the co-operation of our Minister for Commerce and Industry, the Minister of Commerce and Industry, Federation, said:

"We appreciate this point of view as we realise that Singapore lives by trade and without it she dies."

That means we are depending on trade. If we have no trade, it means we are finished and the only thing that we can get is a lot of grass all over Singapore. Sir, the Minister said on 4th December that at the end of the three-month period, he hoped to impose anti-dumping legislation so that it would then be possible for Singapore to receive her unrestricted import of textiles, and other goods for that matter, if she so desires. Sir, now is the time for the Hon. the Minister for Commerce and Industry to consider lifting this ban so that every one of us can enjoy this Christmas and the approaching Chinese New Year with cheaper goods.

10.37 a.m.

Mr Tan Siak Kew (Nominated): Mr Speaker, Sir, when introducing increases in tax, the Hon, the Financial Secretary said this:

"Nothing has been done to upset the economy of Singapore. The incidence of taxation has been in strict proportion to capacity to pay and no hardship has been caused to anyone ... It [the Government] has merely done what was required to make income meet expenditure."

Sir, I find it extremely difficult to agree with his remarks. It must be recognised that as far as income tax is concerned, the rate is already very high, especially when compared with laces like Hongkong which, after all, in functional activity, is similar to that of Singapore. The individual maximum rate at one time was the same as the company rate. It has only been increased last year from 30 per cent to 40 per cent, and now it is proposed to increase it to 50 per cent. We see, on the one hand, that the Government is trying to attract investments in industry by introducing measures such as the Pioneer Industries (Relief from Income Tax) Bill and the Industrial Expansion (Relief from Income Tax) Bill - not that we believe anything big will come out of it - but nevertheless it is the right thing to do and even the Hon. the Financial Secretary is hoping for a good atmosphere to raise loans because increasing development cannot be entirely financed out of revenue or reserves hereafter; but almost in the same breath, it seems to nullify its own aims and hopes by proposing this crushing increase in income tax. Industry is a long-term venture. The Hon. the Minister for Commerce and Industry had often deprecated that people here were only interested in short-term turnovers and was always urging people to look ahead. Even if there are bold people who could be attracted by the Government's measures of tax relief to invest in industries, none could be so optimistic as to expect any worthwhile return during the first five years allowed for relief; but when they look beyond these five years to find not only a high rate of tax but a frame of mind on the part of those in authority that rigidly justifies this heavy incidence with such lighthearted remarks that the Government has merely done what is required to make income meet expenditure, then even those bold people will surely have no need to think twice before they discover that there is, in fact, no attraction at all.

Sir, we are not without competition. Every country in this region, not excluding Australia which the Hon. the Minister for Commerce and Industry has included in his list of capital exporting countries - all these countries are craving for investments, and the attractions in many of these places are better than ours. How can the Government expect any investors to come forward when they are even now taking steps to deter them? Individual taxpayers, and this category includes shopkeepers both proprietary and in partnership, need as much as companies to have sufficient reserves from earnings in order to expand or even to maintain their business, because they have to continue to extend credits and other capital formation if they are to handle the same volume of business from year to year. If they are taxed too high, they are unable to do so and the potential from which we derive this tax is gradually weakened. Even with a business which can maintain its profits, one effect of this increase will be to deprive or to decrease whatever the employee gets as bonus, or as any other form of reward at the close of the year, and business generally will not be able to pay the same dividends. Sir, I personally know of two big businesses which have been trying to overcome the bad times they were encountering by a reorganisation. The announcement of this increase has decided them to fold up altogether and, of course, a lot of people are out of work.

Now this is a clear indication that a heavy tax kills enterprise. Who would be willing to risk - and all enterprises are risks - when he realises that on a 50/50 chance if he loses, he loses a whole dollar of his capital, and when he makes, he is only allowed to retain 50 cents? There are, of course, those who would, because they have to do something, but then there is this added incentive for them to evade. The estimate for collection of income tax for 1959 shows a decrease of $10 million which Government fully knows is due to reduced earnings of some companies during the last 12 months, and it shows that reduced earnings must now be punished with a higher rate. The most curious thing about this is why individual tax which had only been increased last year by 10 per cent should again be increased by another 10 per cent this year. In spite of the Government's protestations that we should agree with the Federation in all things, including monetary, fiscal and economic policies, why should we find it necessary to disagree with the Federation in this respect of tax policy? Is it merely on the grounds that it will not cause any administrative inconvenience and difficulties? My hon, friend here has been more eloquent than I in this respect, but I think the civil servant, for one, will wish that he were in the Federation, and no doubt others too.

The deficit budgetted for - $21 million - represents only an item of development; $20 million having to be transferred from revenue to Development Fund. The Hon, the Financial Secretary has said that future increasing development cannot be totally financed from revenue and must be financed largely from loans. There are, of course, mounting expenditures on the social services, particularly education, which it is estimated will increase by $10 million every year; and there are the personal emoluments which is $10 million over 1958. Can these be financed by increasing the rate of income tax from year to year? For instance, the increase of 10 per cent in company tax yields $10 million which approximates the increase of $10 million for education every year. Next year we raise another 10 per cent in company tax. This will be eaten up by education alone and so on until we tax the companies 100 per cent. What then? Will it catch up with the ever-increasing expenditure? It is clear that the pattern of taxation to which the population has been accustomed has been exhausted. If the goose is not to be further weakened, ways must be found to curb this increasing expenditure and new avenues of revenue must be sought. Why always pick on income tax? I am wondering what is wrong with the Social Welfare lottery and the tax on bookmakers which has so often been mooted. These will surely bring in at least $10 million with no hardship to anyone. If there are any objections, whether on moral grounds or on whatever grounds, then what is being done, and is it possible to eliminate these activities?

To tax the businessmen seems to be the easiest way out for Government, because the businessmen's voice is feeble. But care must be taken to see that this section must not be unduly weakened, because it is this section which will at all times provide for our upkeep.

The Hon. the Financial Secretary has said that "the new Government will be considerably exercised to find means of taxation which will not weigh penally on any particular section of the community or business interests in Singapore, which will not harm the economy . . ." Strangely enough, I suggest it is doing just that.

10.52 a.m.

Mr Lee Choon Eng (Queenstown): Mr Speaker, Sir, after hearing the warning by the hon. Mr Mason that those who have crossed the Floor should consider very carefully before supporting this motion, I feel that I must in duty bound give my personal opinion of what I think of the Budget.

Unlike previous Budgets which had so many items for Members to pick on, this year's Budget has one very important item to which several Members before me have referred, and that is the increase of income tax.

Mr Mason also commented that it might not be possible for Members of the Opposition Benches who have crossed the Floor to vote against this motion, but I think there is nothing to prevent any of such Members to give their personal opinion which, I believe, is in accordance with parliamentary procedure.

I certainly agree with Mr Mason that the increase of income tax - either company tax or individual tax - will certainly drive not only industries but also personnel to the Federation. The Government, prior to the introduction of this Budget, said that it would produce a standstill Budget, but it is rather surprising and alarming to find now that it has thought fit to introduce an increased tax on income and an increase in duty on smokes. Most of the industries in Singapore are going over to the Federation, and I understand quite a lot more will follow suit very soon. As a result of the increase in tax on personal income, I am quite sure that our top officers, good officers and efficient officers will also be thinking of going to the Federation, because the tax there is not as heavy as what we are going to have in Singapore.

Sir, what is the use of having self-government if we do not have industries here to provide employment and the efficient officers to run the government? Certainly it is no use to have self-government if there is nothing left in Singapore.

I understand that the Government is always trying to introduce legislation in line with the Federation of Malaya. But in this case it has not followed the Federation. I am told that in the Federation there is no increase of such income tax. Why then should we have an increase in income tax here? I wonder whether the Financial Secretary has consulted the Federation regarding this increase.

Sir, the Financial Secretary in his speech has said that the increase in income tax is very small and that, in his personal opinion, it will not affect the ordinary man. But I would like to remind the Hon, the Financial Secretary that little drops of water make a mighty ocean. It may be $10 here; it may be $10 there; and then from the $10 it will come to $100; and that $100 will come to $1,000. Can an ordinary man afford to sacrifice a few dollars here and a few dollars there?

I would also remind the Financial Secretary that when the duty on smokes was increased, a Bill was introduced in this Assembly. I opposed it. At that time it may have been a matter of five cents. Today we are going to have to pay another five cents more per packet. A man who smokes three packets a day will have to find an extra 15 cents a day - that makes it $4.50 a month. The Financial Secretary did not agree with me that when the tax on smokes was increased it would not affect those who smoke. I will read an extract from his speech made when he introduced the Budget:

"Collections of customs duties have certainly fallen below the estimate, particularly in respect of liquors and petrol."

I warn the Financial Secretary that any increase in tax will certainly affect the income, or revenue, because if there is an increase it will certainly affect consumption which will be decreased. For the salaried man, his salary will remain the same. There is no increase. In some Government departments there may be a yearly increase in salary, but that increase is very small. If that is a fact, where can he find extra money to meet his budget? In the case of the Government, it can of course introduce tax increases to meet its Budget.

Sir, I would like to quote another extract from the Financial Secretary's Budget speech:

"It would be dangerous to allow our reserves to be run down too far. We must safeguard ourselves against the financial consequences of a severe recession in trade: we must retain enough to finance public works as a measure of unemployment relief in time of depression;".

Now the Government can find money by an increase in tax to meet all these things. But where can an ordinary man find this money? So the only sources for him to find this money are either to beg, borrow or steal. If he borrows money, he finds himself in the soup. If he is a civil servant and he gets himself in debt and he does not declare it, he is subject to dismissal from the service. A story appeared in the Singapore Standard yesterday of a man - a father of seven - who was sacked.

"Father of 7 Gets A Shock Sack For Govt. Clerk Who Got Into Debt"

Sir, this poor man has seven children and just because he could not balance his budget, he had to borrow. As a result of this, he now finds himself out of employment. That makes the situation worse. Now where are his seven children going to get their food? If this man did not borrow, then the next alternative would be for him to rob. What else could he do but rob? Is it right to rob, Sir? If a man robs, he will find himself behind bars. It is not that he should rob; it may be that, because of circumstances, he has got to rob. My view is that the Government, by introducing this increase in tax, is trying to encourage people to commit crimes.

So if a man does not want to borrow or to rob, then the last alternative is to seek corruption. We want an efficient public service here. We certainly do not want to encourage corruption. Summing up, if a man wants to find money to balance his budget, three sources are open to him - either borrow, steal or seek corruption. Sir, in this matter I am just expressing my personal opinion. This may not be the Government policy, but as a Back-bencher I feel that I have a right to express my personal opinion. But I should like to say that the Government is very courageous in introducing this increase in tax on the eve of the general elections. I must congratulate the Government on its courage.

11.00 a.m.

Mr Lee Kuan Yew (Tanjong Pagar): Mr Speaker, Sir, for those who have had to be afflicted with all the curious political theories of how finance should be managed, let me congratulate the Hon, the Financial Secretary firstly, for having presented a Budget which is in accordance with all the other previous Budgets in principle, and secondly, that we should wind up the four years of the Rendel Constitution with a much reduced special reserve fund than when this Government first assumed office. We are not really interested in what is in the Budget, and what is out of the Budget, because everybody knows that this is a Budget for about four months, or five months at the outside. But for the assurance that there would be election writs before the end of this Assembly, we would have moved that this Budget be drawn up for three months' expenses only.

Sir, from a special reserve fund of over $100 million when the Labour Front Government assumed office in 1955, it has now gone down, or is expected to go down, to $65 million - this is according to the speech of the Hon, the Financial Secretary - including $20 million for Christmas Island. It means that the Government has been spending from reserves and is leaving us with much less money to spare than when they first began. I do not know whether this is a Labour Front Budget or a Singapore People's Alliance's Budget. I am told that the S.P.A. has not even been officially formed and has not even been gazetted as being exempted from registration under the Societies Ordinance. Presumably it is still a Labour Front Budget, and therefore it will absolve the Member for Queenstown, who has Just joined the S.P.A., from the embarrassment of having to support it.

We are surprised that the Hon. the Financial Secretary should have had the audacity to say in this Assembly that they can quite safely put up company tax to 40 per cent. He was the same man who told us last year that there should be a safety margin of at least ten, if not more, per cent. We were the first to advocate that they should tax companies up to the hilt, according to British standards, because most of them in any case are registered in Britain or the investors are from Britain. They can easily go up to 9s, in the pound without affecting anybody's pocket other than that of the British Treasury. But to do this at a time of slump, having missed all the millions of dollars that could have been collected as extra revenue in the last three years, is the height of idiocy.

As for the income tax, may I say this? It really depends upon how much the difference is. For people like the hon. Mr Mason and his friends, if they have large holdings in the Federation and some holdings in Singapore, it might be worth their while to reside in Johore Bahru and get a fast and comfortable car to travel down to Singapore. Then they pay Singapore income tax only on their Singapore investments and businesses and Federation income tax on their Federation investments and businesses. Quite frankly, we would not have started this if we were confronted with such a situation, but the Labour Front has got a lunatic fringe about it which sometimes is quite useful. They are prepared in their last desperate moments to strike out in all directions. I say if this works successfully and the $5 million can be collected without a change in residence of all the wealthy men who have businesses in Singapore and the Federation, then why not? If it cannot be so collected without adverse results, then no doubt a future government will put matters right. But we certainly will not take serious objections to collecting an extra $5 million provided it can be so collected. We have to take the word of the Hon. the Financial Secretary that it can be collected expeditiously and efficiently and that in any case we are quite sure to get $5 million.

However, I want to make some reference to the way in which the Hon, the Financial Secretary has glossed over certain things. For instance, his explanation of the savings on personal emoluments. He says that in 1959 it is expected that a sum of $114.9 million would be spent on personal emoluments as compared with $123 million in 1958. Sir, this is an astonishing proposition because he goes on to admit that he does not think that next year actual expenditure will fall short of $114 million. Earlier when he dealt with what was the actual expenditure on personal emoluments for 1958, it was not $123 million but it was $104 million. On page 3 of the stencilled document which he handed in, he said that expenditure was to be $104 million. In other words, there is going to be an actual estimated increase in personal emoluments of $10 million, and it is completely dishonest to lead us to believe -

Mr Speaker: Order. I have ruled out the word "dishonest". The hon. Member should not use that word.

Mr Lee Kuan Yew: Sir, I am not suggesting moral dishonesty. I am just suggesting that it is dishonesty in the technique of presentation. I am not in any way imputing moral disapprobation of the Hon, the Financial Secretary's character and integrity.

Mr Speaker: That, of course, is what the hon. Member thinks, but I have overruled the word "dishonest" and I ask the hon. Member to withdraw the word.

Mr Lee Kuan Yew: If you please, Sir, I was just on the point of doing so but before I did so, I thought that I should explain what I intended to convey.

Mr Speaker: Has the hon. Member withdrawn the word?

Mr Lee Kuan Yew: I have. Sir, this is a standstill Budget and we have very little to say. If and when the time comes for a review of the financial situation in 1959, we can assure the House that there are many items in the Estimates which will disappear or be radically pruned, although we are not suggesting for one moment that we will follow the footsteps of the Member for Farrer Park (Mr A. R. Lazarous). I do not know which P.W.D. engineer has stepped on his toes or who has been very strict over his contracts with the P.W.D. I fully sympathise with some of the sentiments which he has expressed, but I would ask him when he speaks on these matters to remember: (1) that we have got to be factually accurate; and (2) that when we hit out at the local senior officers, we must make sure that we are hitting out at the right persons.

They were not the persons who agreed to Malayanisation terms. The Malayanisation terms were agreed to between a group of expatriate officers and a group of elected Ministers in the Federation, and what the Hon, the Chief Minister of Singapore did was to hide behind the sarong of the Minister in the Federation. That is why we are saddled with the Malayanisation terms. But that is all past and gone.

We want to prune the salaries of our professional officers and our Division I officers, but there are certain limitations which we must observe. The first point is that - according to the new Constitution - their basic salaries, as distinct from their allowances which amount to 30 odd per cent over and above the basic salaries, cannot be touched. The second point is that there are limits in the realities of the situation; that unless one can pay a reasonable remuneration for skill and talent in competition with what the commercial world can offer, then of course we may find ourselves landed with highly unsatisfactory instruments of policy. But even within those limitations, I would like to say that the senior Government officers should disabuse their minds of any illusions that they can, in the tradition of the M.C.S., do the minimum amount of work for the maximum amount of pay, and with the maximum amount of retirement benefits. We expect from them the maximum amount of effort for the minimum amount of returns we offer. What was been given them will not be taken back and will be honoured by a subsequent Government, but we expect them to do their duty.

Sir, there are some curious items in the Estimates which we shall touch on in greater detail when we come to the Committee of Supply; but it is typical of the four Budgets that have gone through that no imagination whatsoever has been shown to the realities of our situation. $727,040 is being spent on the Malayan Royal Naval Volunteer Reserve. Everybody knows that the Malayan Navy was not of much use to Singapore and, quite rightly, was handed over to the Federation of Malaya. Why should we spend over $700,000 a year for the entertainment of a few people who like to inspect people in sailors' uniforms on H.M.S. Laburnum in Telok Ayer Basin? I do not understand it. I am told that H.M.S. Laburnum is not renowned for its naval exercises, but for the piddling and tippling that goes on on board at all hours of the night.

There is also $573,230 for the Malayan Auxiliary Air Force, half of which is for payments to the R.A.F. for services. Nobody believes that we are training local pilots. I do not know what this money is being spent for, who is burning up high octane fuel and paying the R.A.F. for the use of its services, and we see no reason why that should go on.

There is a sum of $546,200 for civil defence. Nobody is suggesting that this sum is going to help us if an 8,000-mile missile, with ten megatons of explosives in its warhead, were to arrive in Singapore from somewhere north of the Arctic Circle. It is time to reappraise all these unnecessary expenditures. However, I do not expect the Ministers, despite all their agility in changing names and colours, have been able to master the intricacies of finance and the Budget. They have left it entirely to the Hon, the Financial Secretary. I will give him this credit - that at least he has not, on the eve of the winding up of the officio cum elected Government under the Rendel Constitution, left it with a deficit as wide as the one which the Federation of Malaya has left for the year 1959. If that is a fact then I think we have to be grateful for these small mercies. We know that the reserves have gone down, but we know that at least some effort is being made not to let the whole wealth of this little island drain out to sea.

I would warn the elected Ministers that with three months to go, there should be no monkeying about with the Budget. When a vote of $320,000 was given for rural development, nobody mentioned anything about using it for the relief of unemployed persons. Then as the election looms over the horizon, the $320,000, instead of going for rural development, is used for unemployment relief - $3 per day to a few unemployed persons, presumably to build roads in the rural area. That is not the way to budget. We are asked to approve a whole year's Budget by a Government which has promised to go out of office by 2nd April, 1959. We would ask it, in the few months left to it, not to depart from what each sum of money has been specifically earmarked for. And it is the duty of the Financial Secretary and Director of Audit to see that that is done.

Mr Speaker, Sir, this is the last Budget by an official. We hope that the next Budget will show more imagination than the four years of the Labour Front-UMNO-MCA, (now SPA), Coalition Government has been able to produce.

11.16 a.m.

Mr John Ede (Tanglin): Mr Speaker, Sir, the Financial Secretary has suggested that this is a courageous Budget in as much as the Government has resisted the temptation to tie the hands of the incoming government in regard to the policies that it may wish to adopt after the coming election. That is not quite the way it strikes us. Where we can give credit is in the fact that at long last The Government has taken heed of our advice over the years and made some attempt to reduce expenditure; to be precise, from an estimated $277-million this year to $268.5-million next year.

But we do not judge Budgets simply by the figures that are presented to us. We judge them by the accomplishments of the past year or years, and by the intentions of the Government in the future. Whatever the merits or demerits of the actual estimates, this is the Budget of a tired government, lacking in confidence in itself, unwilling or unable to plan for the future, because manifestly it has no plans and no hopes.

One of the things that has astonished us is that the new Alliance, when it was formed, announced no programme, no plans, and no policies. Of course, you cannot frame a Budget if you have no policy. Here is a time - if ever there was one - if you have confidence in yourself and in the future, for a newly constituted Alliance to frame and proclaim an imaginative, challenging, election-winning Budget, something calculated to rally all democratic forces to its side. But instead, we are given a standstill Budget in a world that is moving fast, because the Members on the Front Bench opposite are too tired and too stale to do anything but stand still.

If I may turn at this stage, Sir, to company tax and examine it now, on the Second Reading, rather than later, we would say this: that in view of Singapore's financial position at present, it seems that we must accept as inevitable the increase in company tax proposed. But we must not overlook the fact that this increase will not help to create a favourable climate for the expansion of industry and the launching of new enterprises which the Government professes to wish to encourage. You cannot expect industrialists and investors to be anything but hard-headed in these matters. Long-term investments require a long view ahead. While it is true that the new legislation allowing remission of taxation - the pioneer industries and industrial expansion schemes - is a step forward, a 33 1/8 per cent increase in company tax, in the same breath so to speak, is a step back again. Let us now have a look at income tax revenue during the Government's period of office. In 1956 the yield was $68.3-million; in 1957 it dropped to $65-million; in 1958 it will have been maintained at approximately the same figure of $65-million, as a result of an increase in the rate of personal tax from 30 to 40 per cent. At the same rate of tax, the Financial Secretary estimates the yield of tax in 1959 at $55-million. He therefore proposes to increase company tax by 10 per cent to regain this $65-million mark, and personal tax by 10 per cent to bring the figure to just over $70.million. We now have a picture of what is happening. Since 1956, the Government's first full year in office, we are increasing the yield from income tax by roughly $2-million, that is to say, from $68.3-million in 1956 to just over $70-million in 1959 through the drastic measure of raising personal tax from 30 to 50 per cent and company tax from 30 to 40 per cent - an eloquent testimony of our declining prosperity during the Government's term of office. As I said last year, it is only too clearly revealed that Government has failed to expand commerce and industry during the past three years, for if commerce and industry had expanded, it would be reflected in the income tax yield. It follows, therefore, that as a result of the decreased spending power that must come about in 1959 through increased taxation, the income tax yield will again drop back to something like $55-million or $60-million in 1960. Increase in the tax rate one year has as its corollary the inevitable falling off in yield in the following year, and the law of diminishing returns begins to operate. It would be difficult to say where and when the limit will be reached, but we must be getting very close to it.

While we must accept the present increase as forced upon us as a necessity, we must give warning that such a large increase, at a time when we are by no means out of the recession, is not going to help to produce an expanding economy, more capital investment and more employment. It is abundantly evident, Sir, that the Government machine has failed to tick. Where are the promises of the years gone by? Let us have a look at a few of them.

At the Ministry of Health, there is the sad story of the District Hospital. First, it was to be built in Kallang, then at Bedok, and now we understand that it has been scrapped altogether and the land given back to the owners. Total achievement after three and a half years - no District Hospital - except that we believe that the Thomson Road Hospital for the chronic sick is to be converted into one - and we know what conversions cost. In any case, we end up with one hospital: instead of two, and that one not even finished.

In respect of the drive against tuberculosis, which is much more important even than that against polio, although it is less spectacular, the position seems to be one of extreme anxiety. A special Survey has been carried out for which the Government is to be commended. But yet at the very time when more cases of hospitalisation are inevitably being discovered, and will be discovered in the future, the number of beds available at the Tan Tock Seng Hospital is being reduced by turning a ward into a nurses' hostel - another conversion and more costs - a change of policy and wastage of funds.

Let me turn now to the Ministry of Education. Here we find failure to build secondary schools in reasonable proportions to primary schools - only 9 against 59, or I against 6 approximately - and as a result a desperate scramble to gain entry into secondary schools, resulting in corruption and leakages in the all-important examination papers. And what is worse - many children are getting into primary schools only at the age of 8 plus. There is also the disappointment caused by the cutting down of the cultural affairs allocation, on which I shall have more to say later on.

In commerce and industry, the Minister has had a hard row to hoe. It was once said of Shelley the poet that he was "an ineffectual angel beating his luminous wings in vain". I would hardly call the Minister either angelic or luminous, but otherwise the description might be applicable. Last year I brought to his attention the Government's failure to expand industry, quoting employment figures. These are worth repeating and bringing up to date. In March 1956 the number of workmen employed in manufacturing is 57,332; in March 1957, 55,011; and March 1958, 51,296. And in all industries the figures are (in thousands) 124.6, 123.2, and 118 respectively. The trend is worse: the slip backwards is going faster. But the population increases each year by an amount equal to the total number employed in manufacturing. That is a sobering and depressing thought. Last year the Minister pooh-poohed these figures, stating that they gave a false picture, that these figures were the returns of different employers, and if a reduced number of employers sent in returns, it could not be helped. I submit, Sir, that if less employers send in returns, it must be because there are less employers. If it is not so, let the Minister present the true figures. But the Minister went on to give a glowing picture of the number of industries that were about to be set up, but he could not disclose the nature of them. Whether many of these mysterious industries have materialised or not, we do not know; but what we do know is that there are less persons being employed in industry today than there were a year ago. And now, only this month, after years of prompting from this side of the House - I will not weary you, Sir, by repeating what I said before - the Pioneer Industries and the Industrial Expansion Bills have come before us, too late to have the impact they might have had two years ago. And with what irony are they introduced, hand in hand with the increase of 33 1/3 per cent in company tax!

Next, Sir, we must turn to housing. The Financial Secretary pointed out that 9,000 units of housing will have been built during the lifetime of the present Government up to the end of this year. But let me remind him that 2,900 of these were built in 1955, that is to say, they were planned and were being constructed before the present Government took office. In other words, only 2,000 per year have been built since then under Government responsibility. Let me further remind him that residential buildings of all kinds, whether by the S.I.T., P.W.D., City Council or private enterprise, were 5,740 in 1955; 4,445 in 1956; 3,351 in 1957; and only 2,826 up to September of this year - a sad story of declining achievement. We are now told that Government housing development will have to decline still further for lack of money. But what has happened to the scheme to allow people to buy their own apartments in S.I.T. housing estates, so that they can enjoy ownership of their own fiats? This system has been adopted in many parts of the world. The legal difficulties have been overcome. Why has it not been introduced here, as the Government promised? Is the scheme lying forgotten in some dusty drawer in the Minister's desk, when it should have been introduced in the new Queenstown and Kallang housing estates, and the sums required made available for further construction? The Minister has something to answer for here.

And lastly, let us examine the record of the Ministry of Communications and Works. Firstly, the deferring of a proper public transport system regarding which no progress of any tangible kind has been made in three and a half years. With no reorganised bus routes, we still find our children having to go to school expensively and extravagantly in cars and pirate taxis.

Secondly, the failure to solve the problem of floods, so that now the main trunk road from Singapore to the Federation can be flooded to a depth of four feet outside the University of Malaya as a result of a two-inch thunderstorm. And what comfort had the Minister to give to this House on the 5th November last? I quote, Sir, from col. 913:

"...had the tide been higher or had the rainstorm gone on longer, the flooding in the areas affected on Monday would have been considerably worse."

So much for the Minister's theoretical socialism in the fact of hard facts - and wet ones at that!

Thirdly and lastly, the abandonment, or certainly the deferment of Phase III of the Paya Lebar Airport development which deals with the handling of passengers and freight, and in this airborne age gives visitors to Singapore their first impressions. It is admitted that the present terminal building is inadequate, that it will cope only inefficiently with the traffic which the new aircraft of 1959 will bring, but we continue to stagnate.

No wonder with these dismal failures facing them, with their broken promises and shattered aspirations, the Government is trying to save its face by changing its name, and by laying the blame on subversive elements. But if we are forced to apportion blame, perhaps it would be fair to say that the Government has never really recovered from the ebullience of its first year in office, under another leader who led it at a galloping pace down jungle paths from which it was difficult to extricate itself. To change the metaphor: new brooms are apt to sweep too indiscriminately; in 1955 in the present Government; and in 1958 in the City Council, so that the crockery goes into the dustpan as well as the dirt and the rubbish.

But, Sir, let us leave the past on one side for one moment, and consider the future. The Financial Secretary has stated that the cost of the social services will continue to rise year after year. It is abundantly true of education, and perhaps less so of health. I have pointed out a few other things which the Ministers of the Government had promised to do but had to abandon. But it is clear that however heavily taxed we may be by normal and practicable methods of taxation, revenue cannot rise beyond a certain limit. Somewhere between the estimated $264-million for 1959 and $300-million would be a reasonable guess. What then are we to do? If there is a limit to increase in revenue, we must of necessity look for ways and means of reducing expenditure on a permanent basis. We come to the conclusion, as we must, that the cost of administration on this small island of 220 square miles is out of all proportion to the returns we get and to what we can reasonably afford. We cannot afford the luxuries of the democratic system but only the essentials; by which I mean that we cannot afford the cost of a multiplicity of administration - a central or national government, local government as represented by the City Council for one part of the island, and four new District Councils for the rest of it.

We often refer to Singapore as a City State. Why do we not run it like a City State under a single, streamlined, rationalised administration? Most of us have been brought up to accept the British pattern of central government and local government - I have certainly been very close to it myself - but it is becoming clear that we must recast our thinking and reshape our ideas, and have the courage to admit that it is not necessarily satisfactory on a small island.

The present Government scrapped the City and Island Council purely and simply, I suspect, because the Rendel Commission proposed it, and substituted separate City and District Councils at enormous extra expense. The decision was taken in 1955. The necessary Ordinances were passed two years later - in about August 1957 - but still, after another one and a quarter years, there are no District Councils. At one time we stood poised on the threshold of District Council elections, to be held in April of this year, but now they have been conveniently forgotten. The Government has not had the courage to admit them to be administratively unwise, and yet they hesitate to put them into operation. And is there a loud public outcry over the delay? There is not. The reason I suggest is not far to seek. A new head of expenditure in the Estimates, Head 44, District Councils, adds up to $3�-million. If we turn to the Explanatory Notes on page 476 of the Estimates, we will find what has happened.

"The Rural Board was abolished when the above three Councils were established" -

The Rural Board has not been abolished -

"and the staff split up and posted to the three Districts Council Offices. As the then existing Rural Board staff was inadequate to meet the resultant needs, the following new appointments or posts were authorised in 1958 -

1. Executive Officers, six" and so on. I will not read the rest, as it is there for Members to read. A total of 62 new posts. In addition, the following posts have been seconded from the Medical and Health and the Public Works Department respectively to come under the direct control of the District Councils, and there we have a list of, curiously enough, another 62 posts. Briefly, an increase in staff and an increase in decentralization among the technical officers, tending to a loss of efficiency and co-ordination.

Now, Sir, side by side with this, we have the Rural Development Panel set up under the Chief Minister, because of the tendency of a lack of co-ordination - I will ask you to look at page 466 of the Estimates where you will read as follows:

"The activities of various Departments and organisations concerned with the rural areas have tended to be unco-ordinated in the past and an authority to plan the development of these areas and to co-ordinate the activities of the many authorities concerned with rural affairs was found necessary.

A Rural Development Panel has therefore been set up consisting of Heads of Departments concerned with rural development. A Rural Development Commissioner will chair the Panel. The Panel will serve in a consultative and advisory capacity to the Commissioner who will ensure co-ordinated action. The Commissioner will frame a comprehensive development plan. He will have a staff of eleven field officers, mostly Chinese speaking, who will work in association with the respective departments and the farmers.

The Panel will consist of: -

(1) Agricultural Officer.

(2) Chief Fisheries Officer.

(3) Chief Veterinary Officer.

(4) Registrar of Co-operative Societies.

(5) Rural Health Officer.

(6) Deputy Commissioner of Lands.

(7) Director of Social Welfare.

(8) Director of Information Services.

(9) Senior Executive Engineer, Rural.

(10)Deputy Secretary (Administration), Ministry of Education."

But no District Councillors, and not even the Chairman of District Councils. A separate body altogether.

"Rural Development projects will include matters of land usage, drainage and tenure security... They will arrange for supplies of foodstuffs and later improved types of livestock... They will be concerned with improvement of roads, water supplies and other amenities" which we need not mention here.

One policy leading in one direction and another in the opposite direction. Contradictions leading to duplication, delay, frustration and sheer waste of money! The people of Singapore are the sufferers, not the gainers. They pay more in taxes, and get more administration but less results.

But, Sir, we are not thinking of a return to a City and Island Council. We are thinking of a complete rationalisation of our administrative system in the hands of a single democratically elected body. In the past year we have seen the City Council pulling in the opposite direction to the Government - something we cannot afford, whatever our views may be on which is the right direction. Soon we may find the District Councils pulling in different directions from the City Council and from each other.

Let me give one simple illustration. The boundary between the City and District Councils for many miles runs down the middle of roads, Braddell Road for example. The City Council may want to resurface and widen their half of the road, even to make a dual carriage-way, but the District Council, which will be responsible for the other half of the road, may have other ideas. So nothing will happen and the road will deteriorate, and it will cost more to put it in order in the long run.

In other words, the present and future state of our finances cannot afford what I have called the luxuries of the democratic system where each authority can follow contradictory policies. At the moment, health is administered by both Government and the City Council. The latter builds infant welfare centres, and the former district clinics, and both cable for Professor Sabin's polio vaccine.

Roads are in the hands of the Government, the City Council, the District Councils and now even the Rural Development Panel. There are two assessment offices and two policies. Traffic is in the hands of the City Council in certain aspects, the traffic police and licensing under the Chief Secretary, and transport to some extent under the Minister for Communications and Works.

Although there is to be a Government housing authority, local governments are in charge of building plans and construction by-laws.

One could continue to cite examples, but the final one is the question of public utilities. The McNeice Report recommended placing public utilities in the hands of a corporation or Board. However, our view was that so long as public utilities are properly administered without politics becoming predominant, the City Council could safely be left to run them and we believed it to have been the Government's view also. That at least should be the case. Not only have public utilities become the play of politics, but engineers and technicians have departed until the efficiency of the electricity and water undertakings is in grave danger. We believe now that a corporation is essential so that the life-blood of electricity and water can be safeguarded. So we say rationalise our administration and cut out waste, so that we can better utilise the small number of expert technicians remaining to us.

If we show to the Federation and to our neighbours and to the world that we are bent on putting our administrative house in order, reducing our overheads and lowering our expenditure, we should attract both the Federation and the world to our door-step. Indeed, eventual merger with the Federation will be easier if we have one clear-cut administrative body from which certain subjects can go under central control with the minimum of reorganisation. We shall appeal more to the Federation if we are a financial asset and not a liability.

That brings me to my next point: merger with the Federation is the desire of all Singapore political parties, but we believe that the first step should be an economic merger rather than a political one. If we could come closer together economically and look at ourselves as a single economic unit, both countries would benefit. It has been suggested that if the Federation Government could have a say in the working of the Singapore Harbour Board, it would be as realistic a step in the economic field as having a say in our internal security in the political field.

To take another example - in the field of electricity. The Federation Government is launching a new hydro-electric scheme in the Cameron Highlands. This will cost millions, but it will only be able to serve areas of central Malaya. I believe the only power station south of Kuala Lumpur is in Malacca. Is there any reason why Singapore should not be responsible for providing power to the south of this? A Singapore Electricity Board could work closely together with the Central Electricity Board of the Federation. I believe Singapore already supplies Johore Bahru with electricity. Why cannot this sort of thing be developed on a joint planning basis, to mutual benefit? In other words, the greater mingling of the two countries in port facilities and power supplies - to mention only two possibilities - would be of immense advantage to both of us.

But whatever the future holds, we are in fact on the eve of great events and the next four or five years may make or mar our destiny. If Singapore is to be prosperous, then it cannot be the prosperity of the few: that is not Socialism, but plain commonsense. An age of austerity is coming, and a very large number of people reaching quite far down in our social strata must be prepared to accept a less extravagant way of life. We are a shallow, pleasure-loving community, finding enjoyment in the things that money can buy and not in the richer things of the intellect and of the spirit. For this reason, I deplore the cutting down of the cultural affairs grant. I do not say that $100,000 can do the trick any more than $50,000, but any Government worth its salt must do all in its power to interest the population in cultural pursuits and interests. This part of the world is not only rich in biological, zoological and botanical treasures but in subjects of sociological, ethonological and linguistic study - great avenues of knowledge and research waiting to be explored. In the artistic sphere, we have few creative writers and musicians, poets and painters, through lack of encouragement and incentive and not through lack of talent. What is the use of writing a book in Singapore if nobody cares to read it?

Sir, Members of this House said a year ago that we cannot afford a Nature Reserve or even the Botanic Gardens, for we need the space to build houses or grow vegetables. The truth is that we shall have to look for far larger areas of land on which to settle thousands of our citizens in the not too distant future. Having passed legislation for a 44- or 48-hour week, we must see that our people learn how to use their leisure to the best advantage. Unless we encourage cultural pursuits, we cannot have people with sufficient imagination and enthusiasm to solve the problems that face us in the future. If you encourage people to write, you encourage them to think, and if you encourage people to take up scientific or literary or linguistic studies for their own sake and not for pure monetary gain, you will encourage people to think on creative lines and hence to try to solve the difficulties of modern Malaya. There are many more worthwhile things to do than eat a ten-course dinner, pick up a tip for the third race on Saturday, or gossip and drink in clubs and coffee-shops - things that are much cheaper but more rewarding.

Our view of how we must go forward in the next few years is this: rationalise our administration, unify our economic affairs, simplify our mode of living for the greatest good of the greatest number.

Mr Speaker, Sir, I started by deploring the standstill policy of the Government, without plan or programme, as a wrong approach if they want to capture the hearts and minds and enthusiasm of the electorate.

I have ended, I hope, by being just a little more constructive, a little more positive about the needs of the future. The Liberal Socialists are ready to pool their ideas and plan for the future hand in hand with all other true democratic forces on this island, provided there are no prejudices, personalities and reservations allowed to stand in the way, to cloud and distort the vision of our essential goal. Time is running out.

11.50 a.m.

Mr Lim Cher Kheng (Changi): Mr Speaker, Sir, the Member for Tanglin appears to me to be a first-class surgeon but this Budget which he tried to analyse is a dead Budget. Sir, I may be wrong but I am sure that the House heard the Member for Tanjong Pagar say that we shall have an opportunity to review the whole financial aspect in the near future. Sir, that means that the P.A.P. wish to have a chance to review the whole financial aspect in the near future - this is exactly according to the rumours in the market, and you can rule me out as irrelevant! Sir, who believed that the principles of the P.A.P. are very near those of the U.M.N.O. and Party Ra'ayat? Sir, Dr Toh Chin Chye said he believed it! Who believed that the Hon, the Chief Minister, when he decided to change the name of his Government to the Singapore People's Alliance - U.M.N.O. - M.C.A. Coalition Government, failed to inform his right-hand Minister, who happens to be the leader of U.M.N.O. -

Mr Speaker: Order. I think the hon. Member anticipated that he was going to be irrelevant. I think this is absolutely irrelevant. Please keep to the Budget.

Mr Lim Cher Kheng: Sir, I will come to the last point. What has made the Financial Secretary prepare such a Budget? I do not call it a standstill one, Sir, I call it a deadly blow to the Government, whether it is named the Singapore People's Alliance or the Labour Front Coalition. I have warned this House three times before to adopt an old Chinese saying. "Open out more fountains and restrict the outflow." In the case of a merchant, it means that he must know how to manage the business properly. I wish to say that 1958 is a year of uncertainty and insecurity. It is also a year of instability, and you can find this comment not only coming from the Opposition but also coming from the Financial Secretary. The Financial Secretary touched on the subject of raising of loans, and I thank him very much for very frankly giving all the facts. Sir, I wish to begin with column 1057. He said:

"Now as regards the raising of loans, it must be confessed that the prospects seem to be becoming less and less bright."

Sir, I carry on, but please carefully follow:

"Looking back over the years since the war," -

In other words, during the period of colonial rule -

"Singapore has had a quite astonishing record as far as loan floatation is concerned."

Sir, I wish the Financial Secretary will explain why he purposely wanted to give such a nice compliment to the colonial regime? And now we come to column 1058 - still during the colonial period:

"It speaks volumes for the prosperity and stability of Singapore and for the external reputation of the business acumen of its Citizens and the soundness of its administration."

And this administration is not the present Government but the previous Government. I wish to repeat:

"It speaks volumes for the prosperity and stability of Singapore and for the external reputation of the business acumen of its citizens and the soundness of its administration."

Sir, was it not a very strange thing for the Financial Secretary to pay such a high compliment to the past administration? Now we come to the present stage. He said:

"...money has become increasingly tighter and the banks and other bodies which subscribed handsomely to loans in the past have no longer the same resources to do so."

I want to ask why the Financial Secretary failed to give us the details - why the banks and other bodies which subscribed handsomely to loans in the past have failed to do so now? And, Sir:

"Thirdly, a large number of the private provident funds which invested in Government and City Council loans in the past have been wound up or reduced in scope."

I think this is the worst of all - this part regarding the loan in the last paragraph. He said:

"Nor do I think that they will improve until uncertainty is removed from the political scene and investors are satisfied that the attitude and policies of the Government in power in the future are likely to be such that the investment of large sums on long term is safe."

Sir, what does it mean? It means that the present Government admits that it is unstable and that the investors have no faith and no confidence in this Government. Therefore, Sir, I am not wrong in criticising this Budget as being a dead one. The Financial Secretary in presenting this Budget, knows that the Government is going to face the electorate very soon, and yet he presented a Budget which is still accused by many hon. Members of this House as being vote-catching. I think this is absolute nonsense! This Budget, to me, is the last colonial coffin nail for the Labour Front Coalition Government. Sir, you may want to know why I say this? Today's Straits Times came out with the news: