APPROPRIATION BILL

Debate resumed.

3.08 p.m.

Mr Goh Chew Chua (Ponggol-Tampenis): Mr Speaker, Sir, as usual the Budget only gives us a partial picture of the national economy. It is a tabulation of what revenue Government will receive, what it proposes to spend, and how it proposes to reconcile expenditure with revenue.

Sir, the raising of personal income tax and company tax is a bold measure as the Labour Front Government is about to fade from the scene. It is as a Labour Front/Liberal-Socialist Alliance that it draws near Judgment Day. Do the Government think that they are actually having Socialist principles? Like repentant sinners, they seek to make out a strong case for their existence and for the things they should have done, but they have never done it. Sir, one result of the delay in not increasing company tax earlier is the Government has failed to reap the revenue available in the prosperous days since rubber was nearer the $1 mark. If this measure had been taken four years ago, the Government could have accumulated enough surplus to see it through the leaner days, and need not have to abandon a number of projects because of falling revenue.

The question of increasing company tax, Sir, was raised a few years ago and the then Financial Secretary justified his refusal to increase company tax on the grounds that a 30 per cent company tax was necessary as an inducement for foreign investors as well as local investors. The implication, Sir, was that an increase in company tax would drive away foreign capital. The large profits which companies reaped then were sent out of the country and were enough inducement even with higher personal income tax or company tax. But today the Financial Secretary comes forward with a proposal to raise company tax when the profits are not so high. Sir, as was to be expected the increase in personal income tax and company tax has raised protests from certain business interests, and the capitalists are also protesting. Each time taxes are raised, it is the invariable cry to proclaim that firms will find it impossible to carry on their business and the country will go to the dogs. Sir, this is a dead-end Budget for a group of political gamblers playing out their last throw.

Mr Speaker: Order. I do not know whether the hon. Member himself has coined that phrase, but I would ask him to withdraw the phrase dealing with gamblers.

Mr Goh Chew Chua: Sir, I withdraw it.

3.10 p.m.

Mr Lim Choon Mong (Serangoon): Mr Speaker, Sir, if Singapore is a tax-free country, everybody will be happy; but since we can only run the government by paying for the amenities provided for the people, taxation is therefore inevitable. With the programme drawn up by the elected representatives in this House, social services must need more and more money to meet the construction of more and more hospitals, schools, and so on. However, taxation must be imposed in such a manner as will produce sufficient revenue on the one side and, on the other, it must not injure the economy of the country. More important to bear in mind is the fact that the increase of taxation should be done in such a way that the nett value of taxation collected would be increased and not decreased. If it is not for the good intentions of the Ministers in providing better amenities for the people, I would say that they have not been too well advised. From the point of taxation, Sir, I always say we must take a sane attitude. We must always consider our position in relation to our neighbours. We must always bear in mind that Singapore is only next door to the Federation of Malaya. It is connected by a causeway which is three-quarters of a mile long. We need more capital; we want more factories; we want to help people who invest money here, in order to help us with our employment problem. But if we take any action which will drive them over to the other side, then I say that that action is not wise. There are two ways whereby business may stay in this small island. One is that capital should want to come and remain in Singapore for the building of factories, for running better businesses. We must also look at factories from another point of view. There must be people to run such factories. If the factories concerned are worthy of consideration, then the executive must be men with the highest qualifications. If we increase personal income tax, would it be conducive for the man who is going to run the factory to remain in Singapore? Would it not be better for him just to rent a house in Johore Bahru and have residential qualification in Johore - say going up there during the weekends, visiting his Johore residence once a week, and saying, "I am ordinarily resident in Johore Bahru, but I am working in Singapore." If such were the case, would not his tax benefit the Federation of Malaya, whilst we want, to have a little bit more tax from him to increase our revenue, and losing the whole lot! The talent will go over to Johore while he earns his livelihood in Singapore.

Consider this from another point of view. If there were two jobs offered - one in the Federation and one in Singapore - both paying $2,000 a month. Where would the man go to? Would he go to the Federation or would he want to come to Singapore? No man is unselfish. No man is not going to think about money if it is earned by him. Many such people come from overseas, and I personally think that probably he would go to the Federation and live there, thereby losing for us the tax we should get from him.

Now, from the beginning I have said that, factories can only be run on capital and talent. If we have the capital here but no talent to run the factories, we will again lose in the end, because the factories will have to shift over to the other side. I think this point should be carefully considered by the Government and see what better method there is to help Singapore out.

Just a few days ago we saw an effort made by the Minister for Commerce and Industry, an elected man. He is concerned about the unemployment problem, and getting more capital into Singapore. He therefore introduced Bills in this House for exemption of taxation for companies, pioneer industries. He is working in the right direction. I supported him wholeheartedly, and I would say that if all Ministers have the same view, then Singapore can move merrily along the road to prosperity. However, the elected Minister for Commerce and Industry is not going to be backed up by another Minister, one who is responsible to Her Majesty's Government, the present Financial Secretary, who is nominated by the Governor. He is not responsible to the people of Singapore. He is only interested in seeing that the Budget is balanced. Whatever happens does not matter. This is his last Budget speech, and I am happy that it will be his last. In fact, I have been observing all these four years, that if it were not for the nominated Members in this House, the Government would have done a little bit better. I quote a few instances, so that Members in this House may be more familiar with what is happening behind the scenes rather than what is presented in the Budget.

Elected Ministers wanted to provide more amenities for the people. They wanted schools built. They wanted many things done. But that had to go through the hands of the Financial Secretary. Sanction had to be obtained from him. In fact, in many instances, Ministers find that they have to quarrel with him in order that they might draw money for the welfare of the people. The Financial Secretary says that this is a standstill Budget, and that he is carrying out the policy of the Government by creating a standstill Budget. That may very well be so, but I think that when we talk about a standstill Budget, we cannot say that everything is standing still. No, some of the things refuse to stand still. Birth rates refuse to stand still! Children refuse to stop growing! They must grow! People who are in school now cannot stop in Form V or in the Senior Middle III and stop proceeding to get their certificate! They must get ahead! All these things must come, and although it may be a standstill Budget, the important things that cannot stand still must be provided for. I know many schools have plans to start building. The Government have agreed to help them, but with this standstill Budget, how are they going to help them? How are the plans going to be implemented? I know the elected Ministers are willing to help the people. But I am afraid the Financial Secretary is not of the same frame of mind. I am of the opinion that the elected Ministers have not got the full co-operation of nominated Ministers. I think, if we have always been following the Federation of Malaya, in all things - whether it is finance, trade, education or taxation - we should also follow them in the matter of changes in the Constitution, and that we should ask our appointed officials to leave gracefully before their time, or we use a little force and show them the door, even, before the new Constitution comes into play. I am certain that it will receive the support of the people. While I attach no blame whatsoever on matters of taxation to the elected Ministers - they have done their best - I also feel certain that the general direction they have given to the Minister in charge of finance has always been backed up by the best of intentions to assist the people of Singapore.

An example of such assistance can be seen by the fact that the Chief Minister is creating another department called the Rural Development Department, and that the Commissioner is asked to assist in the neglected areas in the rural districts of Singapore. I certainly welcome this move. The Government have intended to improve roads. The Government have intended to assist the people living in those areas with better and more modern amenities. That is in the right direction. The Government are going to help unemployed people get employment through the creation of that department. That is only right, and I hope that the people of Singapore will come forward and help the Government in carrying out that scheme to help themselves. I certainly think that more concrete steps like that will help to make the people feel that elected Members of this Assembly are always thinking about their welfare and will move in such a manner as to assist them in the maximum measures possible.

3.31 p.m.

The Minister for Commerce and Industry (Mr J. M. Jumabhoy): Mr Speaker, Sir, it would be very gratifying, I am sure, to the public of Singapore to see their elected stalwarts, after having said their little pieces prepared for the newspapers, fading out one by one from this Assembly Chamber, so much so that a few minutes back the stalwarts of the Liberal-Socialist Party were no more in this House, and now we see the redoubtable champions of the people, the People's Action Party, no more in this House to watch after the public interests against this "bad" Government. That is the amount of interest they take in the affairs of the people of Singapore. I wish the public could see the state of affairs on the Opposition Benches at this stage and on a debate which has an important bearing on the public purse.

Sir, the Member for Kampong Kapor this morning touched upon the banning of Chinese textiles. He pleaded that this ban should be removed because Christmas was coming and the Chinese New Year was coming. In my reply to him previously, Sir, I gave him an assurance that this ban would be reconsidered towards the end of this month in the light of the circumstances then prevailing and also in the light of the progress which the Federation Government is making in its anti-dumping legislation.

The Member for Tanglin expressed great happiness at the fact that the Government have succeeded in cutting down expenditure. But at the same time he criticised the Government for producing a standstill Budget. He said the Government was tired and therefore could not produce anything else than a standstill Budget. I cannot see the logic of these two statements. They are conflicting in character because, if he is happy at the Government's cutting down of expenditure, he must also be happy that the natural sequence of this action would be a standstill Budget. If he wants a go-ahead Budget with progressive expenditure, then naturally expenditure would increase and he would not then be able to express his happiness at the cutting down of expenditure.

The hon. Member quoted employment figures for Singapore's industries and total employment figures showing a downward trend over the last three years. Sir, that is a fact. I have stated all along in this House, even as recently as last week, I believe, that we are proceeding on a downhill course in our economy, and that there is nothing we can do about it. But, of course, the reasons be cited were entirely different, blaming this Government for not doing anything. His reasons were entirely different from those quoted in the newspapers as coming from the Secretary-General of his Party, who bluntly blamed the People's Action Party. But the hon. Member for Tanglin thought it fit to blame this Government.

Perhaps Opposition Members are not aware that there has been quite a severe recession - though temporary, fortunately for us and for the rest of the world. Sir, we, who depend on trade and on the economic conditions of other countries, would be the first to be affected by such a recession. Fortunately, as the Financial Secretary has pointed out in his speech on the Second Reading of the Bill, the effects of that recession were not more severe than they had been; but a recession of that nature is something over which we have no control. Neither could any other country have any control. I suggest that the reason why there is this downward trend is not, as the hon. Member has fondly suggested, because of the ineptitude of the Government, but because, as I have often said and as his own Party's Secretary-General has often said, it is due to the extreme left-wing in part of our politics. I have also to admit - and I have admitted it in the past - it is also due to the policy of the Federation Government in imposing a tariff at the Causeway on our industrial goods.

The hon. Member complimented me for having brought up the Pioneer Industries Bill, but he bemoaned the fact that it is too late. And this, Sir, is a trick - 33 1/3 per cent increase in company tax. Now from 30 per cent to 40 per cent is really a 10 per cent increase, but of course, if you put it in a different way, it is 33 1/3 per cent increase - he is quite correct. That is a very clever way of putting it for public consumption.

Then the hon. Member went on to point out the contradictory policies of the Government in having District Councils and a City Council. My hon. colleague the Minister for Local Government will be more competent to talk about it, but I may just in passing refer to one or two points. He asked what would happen if a road - half of which was in the City Council side and the other half in the District Council side - had to be repaired and the two bodies did not agree with each other? Sir, it is quite possible that they might agree with each other on repairing that road, but that point was conveniently lost sight of. Usually in this world, agreement is reached on most points; disagreement arises only on a few points. But the disagreements are highlighted and therefore they appear to be big. But if one pauses to think of the number of things on which agreement is reached between two parties, then I think one will not take such a pessimistic viewpoint as the Member for Tanglin has taken.

The hon. Member said that merger with the Federation would be easy if we had one clear-cut policy today in the Government. I suggest that it is not because of a lack of a clear-cut policy by the Government, but because of the fact that we have too many political Parties. If we had less political Parties with more clear-cut policies, we probably would be nearer to a merger with the Federation. Perhaps I might amplify this point. It is noticeable now in those circles where the rich congregate, drinking their beers and having their fat lunches, that there is a feeling that the P.A.P. is swinging to the right. Now the P.A.P. has always been recognised as an extreme left-wing Party. That is what I meant when I said less political Parties with more clear-cut policies. One does not know where one stands with certain Parties. If only they would declare their stand to a certain section of the public when they go and talk, "Oh", they will say, "the capitalists are bad. The White man is bad! This is bad, and that is bad!" Then they come back and have their lunch and their beer and their golf with another section of the public; and they will say, "Oh, we want to encourage foreign capital. We will see that capital flourishes", and all that sort of thing. One does not know where one really is. I would suggest that if hon. Members in this House were to decide once and for all where they stood, it would help Singapore a great deal.

Sir, the Member for Telok Ayer has a point which he is very fond of repeating, and that is the travelling allowance of the Ministers. But before I come to that, Sir, there is one other thing about his speeches that has struck me. The hon. Member is sometimes vehemently opposed to colonialism. He shouts this out in this House in the presence of the official Ministers here; but at other times he takes pains to defend the previous Government, which was a colonial government. So one really does not know whom he champions - the people's Government or the colonial Government. He says this Government have inherited certain reserves from the previous Government and we are ruining the economy of the country. He says the elected Government is bad as compared to the previous colonial Government. He is welcome to that comparison. Sir.

Then he says, "Look at Hongkong and Borneo! They have a lower rate of taxation." We need not have any taxation at all if we do not want to, but we must have it in order to survive, and also in order to provide the social services which the previous Government did not provide. Does the hon. Member want the people of Singapore to live like the people of Hongkong do in some parts of that territory - in slum areas? If he, who is the elected representative of the people, would advocate that the people of Singapore should live in slums like animals, just as they do in some parts of Hongkong, then it is up to the people to reform their opinion as to whether he is suitable to represent them or not.

The hon. Member also asks, "Why do we not cut down the salaries of the civil service?" Sir, the high salary structure of the civil service - I admit it is top-heavy - was not fixed by us. We have inherited this salary structure from the previous colonial Government in whose Legislative Council he had been a Member for at least two terms before this Assembly came into being.

Sir, it is always convenient to quote figures showing that the Government have spent so much of the reserves, that these reserves have been reduced, that the Government have raised taxes and put Singapore in a very bad economic position. I would like to refer hon. Members to cols. 1064 and 1065 of the Hansard of 3rd December, 1958, namely, the speech given by the Financial Secretary, in which it is clearly shown where the money went. Social Services expenditure in 1954 was $197 million; in 1959 it will be $264 million - an increase of 35 per cent. Here is the breakdown: Education in 1954 cost $30 million; in 1959 it will cost $63 million - more than double. How the Government have been spending money on education! The total school population has increased by 66 per cent during the last three years - from 1955 to 1958. The Government have got to find the money, but the money cannot be found by the waving of a magic wand. Then the expenditure on Medical and Health will have risen from $20 million in 1954 to $34 million in 1959 - approximately 70 per cent increase. The expenditure on Social Welfare will rise from $7 million to $11 million - 60 per cent increase. $223 million has been spent on development, out of which $56 million went on housing - the provision of houses for the poor people. All these figures are given in the Financial Secretary's speech, but hon. Members on the opposite side have probably gummed those two pages up so that they could not see those figures. $85 million went on other public works.

Sir, one hon. Member was talking about 1,000 houses having been produced and so on. The fact is that out of a total of 20,000 S.I.T. houses that have now been erected, 9,000 units and 300 shops have been erected in the last three years, during the life of this Government. The S.I.T. started building on a small scale pre-war. After the war - I think since 1948 or 1949 - 50 per cent of the houses that have been built have been built in the last three years, the other 50 per cent having been built in the preceding 7 or 8 years. All this costs money. On top of that, half the rentals of these houses are subsidised by the Government. This is to help the poorer section of the population. All that costs money, and it is no use saying that the Government have increased taxation. Who is suffering as a result of this increased taxation? It is not the poor man. The man who earns about $10,000 a year or more pays a little more in income tax. Can any hon. Member on the opposite side suggest, by any stretch of the imagination, that he is a poor man who earns $10,000 a year, or nearly $1,000 a month? These are facts, Sir, but, of course, hon. Members on the Opposition Benches are quite capable of hiding the facts in their presentation.

Now, I come to the vexed question posed by the Member for Telok Ayer of travelling by the Ministers. I have a suspicious feeling, Sir, that, since I was the last Minister to have travelled this year, I might have to justify my travelling. The Colombo Plan Conference is a conference of Ministers of countries. There are 18 full-fledged countries and three who are not - ourselves, North Borneo and Sarawak - we are part of the United Kingdom delegation. It is customary, Sir, that all the countries send Ministers to these conferences. The importance of these conferences lies not only in the discussions held at the meetings but also in the fact that an opportunity is given far the Ministers present to meet one another and to discuss in private various things, and it has happened many times that a lot of things have come out of these private discussions. Sir, it has been customary for Singapore to send a Minister to the Colombo Plan Conference and to other international conferences like that. The hon. Member himself went many times as a Member of the previous Legislative Council at the taxpayers' expense, though he had no ministerial responsibilities to the public, but he had not seen fit at those times to think about the taxpayers' money or to criticise.

Sir, the Member for Telok Ayer also raised the question of handicraft industries. He cited Burma, Indonesia, Pakistan and Ceylon as having handicrafts. He forgot one thing, Sir. Handicraft is a by-product industry of certain waste products which a country may have. In fact, most of these countries have a varied type of agricultural production, and out of this agricultural production you get a lot of waste materials which are utilised in handicrafts. We have none and therefore we cannot have a big scale handicraft industry as such in Singapore.

The Member for Tiong Bahru talked about the restriction on imports of cement from China. Let me assure him, Sir, that there is no such restriction. The only thing is that we issue specific licences for import of cement from China but there is no restriction on the issue of such licences. They are issued freely. Sir, I cannot understand why he should say that there is a restriction on the import of cement from China. There is none.

Then he chided the elected Government for investing 25 per cent of the Central Provident Fund money overseas.

Mr William Tan: Is it not true?

Mr J. M. Jumabhoy: He is well aware, Sir, that Provident Fund investments are controlled by the Board of the Provident Fund, and the Board act as trustees for the public whose monies are held by the Provident Fund, and as trustees they have a legal duty to see that the funds are safely invested.

Then the hon. Member started shouting about merger. He said the way the Government was going about it was not dignified. And then he climaxed his criticisms on merger by asking: "Why should we talk of merger?" Yet, Sir, I have on many occasions heard his Party Secretary saying that the Party line is merger with the Federation. In fact, only last week, I think, the newspapers carried the Liberal-Socialist Party line on merger, but the hon. Member does not seem to toe the Party line. He asks, "Why should we talk of merger with the Federation?" Those, Sir, are the inconsistencies of hon. Members -

Mr William Tan: Independence!

Mr Speaker: Order.

Mr J. M. Jumabhoy: - who, after delivering their speeches nicely written out for public consumption, fade away from this Assembly Chamber and have no more interest in the proceedings.

3.49 p.m.

The Assistant Minister to the Chief Secretary (Mr M. P. D. Nair): Mr Speaker, Sir, a few of the Opposition Members have seen fit to allege that the Government have done nothing during the past 3� years.

Sir, I beg to submit that the Coalition Government during its term of office have made far more progress in almost all directions than any other administration in Singapore has been able to make, despite attempts by certain political Parties to disrupt the progress of the Coalition Government. Sir, ours is a record of which we are proud to present at any place and at any time. It will be written in gold in the annals of the history of the elected Governments of the people of Singapore. We have repeatedly refuted the distortion of our records and I am glad that the people have now begun to realise the truth of the matter, the honesty and sincerity of our Ministers and the Government in the discharge of our duties and responsibilities to the people.

Sir, one hon. Member stated that this Budget appears to be a "tired" Government's Budget in which there is no plan and no programme. Sir, I completely disagree with this statement. On the other hand, I believe that this year's Budget was deliberately made a standstill Budget for the main reason that the new Government should be left to review the Budget in the light of its own policies. Sir, I will assure the hon. Member and this House that when we form the new fully elected government next year, we will revise this Budget and amend it in conformity with the new economic, social and dynamic policies of the new Government.

Sir, the Budget before this House is in no way a "tired" Government's Budget. Our new policies cannot be revealed at the moment. They are secret and they will be presented to the people in our manifesto in the coming general elections.

Sir, the hon. Mr Mason has stated in this Assembly that the increase in company tax and income tax is causing hardship to companies and individuals. I believe this increase is fully justified and I am convinced that it will not be a burden on the companies and individuals. Sir, in a democracy, everyone who is able to pay adequate taxes must pay to the government for the welfare and happiness of the people. I do hope, Sir, that the companies and individuals will change their outlook and have a national outlook in our future economy. May I also hope that the companies and individuals accept these increases cheerfully in the interest of the people?

3.54 p.m.

Mr Hart rose -

Mr Speaker: In reply?

Mr Hart: In reply, Sir. Before dealing with the speeches of hon. Members, there are a few general remarks which I would like to make.

In the first place, Sir, nobody, with the possible exception of the Member for Tanjong Pagar, has said anything about the fact that we have virtually balanced the Budget and have handed over a financial position which is sound and completely under control. I am sorry to labour the point, Sir, but I think that if one remembers the pressures under which the Government has worked and the vast amount which it has achieved, then one realises that this balancing of the Budget is a very considerable achievement.

In the second place, Sir, while everybody with perhaps one exception has complained bitterly about the increase in taxation and had made some quite astonishing statements about the consequences of the measures which we have introduced, only one hon. Member has suggested what we should do as an alternative for the purpose of balancing the Budget. This is very strange, Sir, for I imagine that all hon. Members who have spoken appreciate the virtues of making revenue balance expenditure and of cutting one's coat according to one's cloth. Am I to take it, Sir, that prudent businessmen who have spoken and who presumably have some sense of responsibility for the Colony's finances - otherwise they would not be sitting where they are - are prepared to face a deficit of $20 million in the present circumstances with equanimity?

Most of the hon. Members, Sir, who spoke referred to the new measures of taxation which have been introduced and I shall endeavour to reply to them at the risk of being repetitive. In replying to this debate, I shall have to repeat most of the points that I shall have to mention when introducing the Bill and the motion standing in my name.

The hon. Mr Mason, Sir, criticised the increase in income tax and company tax in very strong terms indeed. He did not, of course, offer any alternative to the balancing of the Budget. He stigmatized the increase in company tax as downright silly and calculated to thrust the convalescent body of Singapore business back into its bed of sickness. This, of course, is absolute nonsense. We are confident that even in present circumstances Singapore business can bear this impost, still expand and still make its profits. We would not have imposed the increase in tax if we had not been confident of that. Incidentally, Sir, I regard the hon. Member's veiled suggestion that we should take advantage of the Federation having raised company tax to keep ours at a lower rate as most reprehensible, as I did the other suggestion that the Federation might take advantage of our higher rate of individual tax in the same way. Does the hon. Member not realise that we have the closest possible consultation with the Federation in these matters?

There were also some wild statements about the dangers of having different rates of individual tax in Singapore: the administrative inconvenience would be appalling; taxpayers would arrange their incomes so as to avoid tax; salaried employees would leave Singapore for the Federation, and so on. These statements merely indicate a fundamental ignorance of income tax administration. As the present basis of assessment and collection will remain as it is, there is no question of taxpayers moving their sources of income to suit their convenience. The only criticism which can be levelled is that some taxpayers might be tempted to change residence, but I honestly doubt if this criticism is very realistic. The difference of rate has to be very wide to cause this to take place and those who make the change must be satisfied that the differential is likely to exist for a sufficiently long time to make the change worthwhile. Only the very large taxpayers would be likely to consider such a move and there are many aspects of the matter which they would wish to consider with great care before making a decision.

My friend the hon. Mr Tan Siak Kew spoke of the very high rate of personal income tax in Singapore and drew comparison with Hongkong. I must say, however, as I will show when introducing the Bill, that our rates are still low compared with those of other countries. Hongkong, of course, is an exception and I think that we would all wish that the economic conditions which exist in Hongkong could be duplicated in Singapore. The hon. Member was, of course, incorrect in saying that we raised income tax last year. The last increase was in 1956.

I must argue with the hon. Member when he called the increase in company tax crushing. As I will show when introducing the Bill we still have a considerable margin of advantage compared with other countries. Nor can I agree that the new taxes weigh penally either on individuals or companies. I appreciate his suggestion about welfare lotteries and a tax on bookmakers. I personally would welcome a welfare lottery, preferably in conjunction with the Federation of Malaya, because I think in that way we might extract the maximum financial advantage, but I think that he has rather tended to overestimate the yield. A tax on bookmakers raises very difficult problems indeed, and the yield would not be great.

The hon. Member for Queenstown spoke about the increase in income tax causing a movement of officers into the Federation, but I think that he must have gained a wrong impression of the effect of the new rates. I will explain this later when I move a motion.

The hon. Member for Tanjong Pagar accused us of running down our reserves. In the first place, these reserves were largely accumulated as a result of the Korean war boom and the inability of the Government to spend all it wished. Over the past four years we have spent exactly $140-million of these reserves. In doing so, we have avoided increasing the public debt and interest in Sinking Fund charges. We have let the loan market free for the City Council and enabled it to do a very great deal of development in the field of essential public utilities. In addition, we have achieved what I regard as a monumental amount of development on our own account in social and other services. Despite all that we have done, we have managed to hand over a sound financial position with adequate reserves. What would he have had us do? Let the reserves accumulate and do nothing for the people of Singapore?

He also spoke in strong terms about the folly in increasing company tax at this juncture, and asked us why we had not raised it earlier. We only regret the necessity in doing it at the present time, but it is not folly, far from it. We are satisfied that the increase can be absorbed even at the present time. As regards the question of why we have not raised the question of company tax later, that is a matter which I will go into when I introduce the Bill dealing with the increased rates.

As regards individual rates, I can assure the hon. Member that we would not have raised them by the small amount that we have done if we had not been quite certain that it could be done without loss of revenue or loss of taxpayers and without danger to the Pan-Malayan approach to income tax.

As regards the Rural Development Vote, what is more of the very nature of rural development than the construction of kampong roads and drains? That is what the Rural Development Vote is being spent on at the present time. Does he think that this can be done without labour? Does he suggest that there should be no unemployment relief?

If I may say so, my friend the hon. Member for Tanglin spoiled what I thought was a quite excellent speech by referring to the Budget as that of a tired government. That, of course, is not the case. We have cut our coat according to our cloth, and avoided cutting patterns for non-existing cloth. It is difficult to be imaginative without funds, and the general impression one gets in today's debate is that funds are the last thing which hon. Members would be prepared to provide. The question of selling fiats is not quite as simple as he would have us believe, but it is being looked into by the Government. I was most interested to hear his proposals for the rationalization of administration of Singapore, and I hope he will develop his arguments further at another time.

As regards flood alleviation, we are pressing ahead as fast as funds will allow. Part of the troubles of which he is aware is caused by housing development. The passenger transit phase at the Airport has not been shelved. It is the third phase of a planned development of the Airport. I appreciate what he says about cultural affairs but I think the amount provided will be sufficient for all practical purposes in 1959.

The hon. Member for Changi asked a string of questions which I doubt if I have sufficient time to answer in full. I must deny his statement that in my Budget speech I attempted to glorify the colonial Government at the expense of the elected Government. Nothing was further from my thoughts. I merely stated facts about the position as regards the long-term loan market which, as everybody will admit, is as much the result of world conditions as local conditions. The market conditions for a floatation of long-term loans have changed very greatly, particularly during the last four years. People are no longer attracted by long-term low interest-bearing loans. Emphasis is on short-term loans. As regards the lack of confidence, there is always a lack of confidence at the time of political change. That is inevitable. It has been aggravated at this time by the vehemence of certain political Parties.

Sir, I am sorry to have said so little about industrialisation. It was merely because I did not wish to steal the Minister's thunder by taking up too much time. I was astonished to hear the hon. Member's statement to the effect that wage-earners were affected by the increase in the rate of individual income tax.

I must thank my friend the hon. Member for Telok Ayer for his kind words about the Budget. I must point out, however, that this Budget was prepared by the Chief Minister and all the other Ministers. The figures which deal with the reserve position are correct. I do not question them. But he is quite wrong when he said that we have ruined the economy. The figures certainly do not suggest that at all. They merely point out that we have balanced income and expenditure and have done a very great deal of development work, and yet are left with a sound position.

The growth of population is not a new problem, as he says, but it is a problem which becomes progressively more acute.

The tax rates are not so high as to discourage investors. It is wrong to say that we are driving away capital. On the contrary, We are doing everything we can to attract it. As long as the company rates are the same as those of the Federation, there will be no migration of companies to the Federation on that account. The increase in petrol duty in the past has long since been absorbed without any difficulty. There is no hardship, as I will point out in due course, in the new cigarette duty. I wish somebody would explain to me how we can cut down in administrative expenses. For four years now I have heard hon. Members of the Opposition say these must be cut down, but never on one occasion have I had any concrete suggestion as to how that might be done. I think we have done everything we possibly can to reduce administrative expenses to the minimum. The hon. Member has much to say about administrative salaries and about the monies spent in travelling and on entertainment. I must say, Sir, that the amounts of money spent under these headings are absolutely insignificant.

I have dealt already with the question which he raised in connection with the floatation of loans. We feel confident that the Central Provident Fund will support any Government loans in the future. He has suggested that we might invest the currency funds locally. I think a certain amount can be invested locally, but it must be remembered that it is absolutely essential to keep the backing for the currency liquid, available at all times. In the absence of a local loan market, it is impossible to invest locally and keep the fund liquid.

I appreciate what the hon. Member for Tiong Bahru has said about the entrepot trade. I think it will be generally agreed that we have done everything we possibly can to maintain the free port status of Singapore and to encourage the entrepot trade. However, I cannot agree with him that we should follow an independent trade policy. As I have said on a number of occasions, it is absolutely essential that we form a common economic policy with the Federation.

Finally, I must confess, Sir, that I have never heard so much unadulterated rubbish as I have heard from the hon. Member for Serangoon this afternoon.

Mr Speaker: Order. I think the Hon, the Financial Minister must know that "unadulterated rubbish" in reference to an hon. Member is unparliamentary, and I ask him to withdraw it.

Mr Hart: I beg your pardon, Sir, I beg to withdraw it.

Question put, and agreed to.

Bill accordingly read a Second time.

Mr Speaker: Committee of Supply, what days?

Mr Hart: From Monday, 15th December, to Friday, 19th December.

Mr Speaker: In accordance with paragraph (4) of Standing Order 69, I have fixed the time on each allotted day at which consideration of each head of expenditure in the Schedules to the Bill and of the clauses of the Bill, if not previously disposed, shall be concluded,

Details will be circulated and will also appear in the Official Report.

In fixing the times, I have, of course, taken into consideration, as far as possible, the indications given to me by Hon. Members in response to the circular letter from the Clerk dated 1st December, 1958, which inter alia invited Hon. Members to submit in writing claims for time which they estimate they might require for discussion in respect of each head of expenditure.

Following are the times allotted - Time fixed by Mr Speaker at which the consideration of each head of expenditure in the Schedules to the Bill and of the clauses of the Bill, if not previously disposed of, shall be concluded. (S.O. 69 (4)). FIRST SCHEDULE Date and Time 15th December, 1958 (1st Allotted Day) Head 1. Governor 10.45 a.m. 2. Judicial 10.53 a.m. 3. Council of Ministers 10.55 a.m. 4. Legislature 10.57 a.m. FIRST SCHEDULE-continued Date and Time 15th December, 1958 (1st Allotted Day) Head 5. Public Service Commission 11.05 a.m. 6. Audit 11.07 a.m. 7. Chief Minister 11.22 a.m. 8. Chief Secretary 11.47 a.m. Sitting suspended at 12.15 p.m. Resumed at 2.30 p.m. 9. Broadcasting 2.44 p.m. 10. Chemistry 2.52 p.m. 11. Defence Services 3.19 p.m. 12. Film Censorship 3.43 p.m. 13. Gardens, Botanic 3.45 p.m. 14. Information Services 4.00 p.m. Moment of interruption at 4.00 p.m. 16th December, 1958 (2nd Allotted Day) Head 15. Police 11.20 a.m. 16. Printing Office 11.40 a.m. 17. Prisons 11.55 a.m. 18. Registry of Marriages 11.57 a.m. 19. Statistics 12.05 p.m. 20. Legal 12.07 p.m. 21. Official Assignee and Public Trustee 12.09 p.m. 22. Treasury 12.11 p.m. 23. Charge on Account of the Public Debt 12.13 p.m. 24. Pensions, Retired Allowances, Gratuities, etc. 12.15 p.m. Sitting suspended at 12.15 p.m. Resumed 2.30 p.m. 25. Contributions and Charitable Allowances 3.10 p.m. 26. Accountant-General 3.12 p.m. 27. Customs and Excise 3.27 p.m. 28. Estate Duty and Stamp Offices 3.29 p.m. 29. Income Tax 4.00 p.m. Moment of interruption at 4.00 p.m. 17th December, 1958 (3rd Allotted Day) Head 30. Ministry of Commerce and Industry 11.50 a.m. 31. Agricultural 11.52 a.m. 32. Co-operative Development 12.00 noon 33. Exchange Control 12.15 p.m. Sitting suspended at 12.15 p.m. Resumed 2.30 p.m. 34. Fisheries 3.00 p.m. 35. Forest 3.02 p.m. 36. Imports and Exports Control and Registration 3.17 p.m. 37. Marine 3.19 p.m. 38. Marine Surveys 3.21 p.m. 39. Supplies 3.41 p.m. 40. Trade Marks Registry 3.43 p.m. 41. Veterinary 3.45 p.m. Moment of interruption at 4.00 p.m. FIRST SCHEDULE-continued Date and Time 18th December, 1958 (4th Allotted Day) Head 42. Ministry of Local Government, Lands and Housing 10.55 a.m. 43. Land and District Offices 11.15 a.m. 44. District Councils 11.35 a.m. 45. Survey 11.50 a.m. Sitting suspended at 12.15 p.m. Resumed 2.30 p.m. 46. Education 3.25 p.m. 47. Library, Raffles National 3.27 p.m. 48. Museum, Raffles 3.35 p.m. 49. Medical and Health 4.00 p.m. Moment of interruption at 4.00 p.m. Date and Time 19th December, 1958 (5th Allotted Day) Head 50. Ministry of Labour and Welfare 11.05 a.m. 51. Immigration and Passports 11.25 a.m. 52. Labour 11.45 a.m. 53. Social Welfare 12.15 p.m. Sitting suspended at 12.15 p.m. Resumed 2.30 p.m. 54. Ministry of Communication and Works 2.50 p.m. 55. Civil Aviation 2.52 p.m. 56. Meteorological Services 2.54 p.m. 57. Postal Services 2.56 p.m. 58. Public Works 2.58 p.m. 59. Public Works, Recurrent 3.00 p.m. 60. Telecommunications 3.02 p.m. SECOND SCHEDULE D11. Defence Services 3.04 p.m. D15. Police 3.08 p.m. D17. Prisons 3.12 p.m. D22. Treasury 3.14 p.m. D27. Customs and Excise 3.18 p.m. D37. Marine 3.20 p.m. D41. Veterinary 3.22 p.m. D43. Land and District Offices 3.24 p.m. D44. District Councils 3.28 p.m. D46. Education 3.32 p.m. D47. Library, Raffles National 3.34 p.m. D49. Medical and Health 3.36 p.m. D53. Social Welfare 3.40 p.m. D55. Civil Aviation 3.42 p.m. D56. Meteorological Services 3.44 p.m. D57. Postal Services 3.46 p.m. D58. Public Works 3.48 p.m. D60. Telecommunications 3.50 p.m. D61. Public Works, Non-Recurrent (General) 3.52 p.m. D62. Colonial Development and Welfare Schemes 3.56 p.m. - Clauses of the Bill, Report and Third Reading 4.00 p.m. Moment of interruption at 4.00 p.m.