CONTROL OF MANUFACTURE BILL (Select Committee's Report)

11.24 a.m.

The Minister for Commerce and Industry (Mr J. M. Jumabhoy): Mr Speaker, Sir, I beg to move the motion standing in my name,

That the Report of the Select Committee on the Control of Manufacture Bill, as contained in Sessional Paper No. L.A. 2 of 1959, be adopted, subject to the recommittal of the Bill in respect of Clauses 5 and 12 to a Committee of the whole Assembly.

Sir, when the Bill was considered in Select Committee, representations were heard from the Chambers of Commerce, the Manufacturers' Association, and certain individuals connected with manufacturing in Singapore. The main objections were jointly from the Chambers of Commerce, and the grounds for the main opposition were as follows. First, they objected to the licensing of manufacture of almost every type, because they considered that that was too rigorous a requirement and created a state of uncertainty. Secondly, they considered that the 15-year life of the licence was too short and that there was no certainty that the licences would be renewed by a different government. They also considered that the power vested in the Minister was too excessive, and that there were no checks on the Minister in the form of any machinery for appeals. They considered that there was no safeguard for those who were in the course of setting up industrial projects. And finally some of them were opposed to the granting of monopolies to any one manufacturer. These points, Sir, were considered by the Government, and amendments were moved by me in the Select Committee to remedy these main grounds of opposition.

The amended Bill, Sir, meets this opposition by the following methods: licensing has been abolished and registration has been substituted. The 15-year period has now been removed so that registration is for an indefinite period. Manufacture of every type is now not required to be registered; instead only the manufacture of those items specified in the Schedules is required to be registered. A Registrar has been provided for to administer the requirements of the Ordinance, and an appeal to the Minister over the Registrar has been provided for. Additions and variations to the Schedules are to be made by the Minister, but an appeal to the Assembly is provided for in the form of a provision whereby the Assembly can, by a motion, overrule the Minister. Projects already set up and are manufacturing cannot be refused registration. Projects in the course of being set up are safeguarded by a provision that registration for such projects cannot be refused except for those in the Second Schedule. The granting of monopolies by the Registrar will still be possible, but will now have to be gazetted so that the public are informed and they could make representations to the Minister, and therefore this granting of monopolies is subject to appeal to the Minister.

These are the salient features of the amended Bill as it has emerged from the Select Committee. I have nothing further to add, Sir, and I beg to move.

The Assistant Minister to the Chief Secretary (Mr M. P. D. Nair): I second the motion.

Mr Speaker: The remarks which I passed yesterday in regard to item 1 on the Order Paper apply with equal force to this item. Briefly, if honourable Members wish to discuss or vote against any specific clauses in this Bill in Committee, this is the time to move an amendment to the motion providing that the Bill may also be recommitted in regard to those specific clauses.

Bill accordingly recommitted to a Committee of the whole Assembly.

Bill considered in Committee.

[Mr Speaker in the Chair]

11.30 a.m.

Clause 5-

Mr J. M. Jumabhoy: Sir, I move,

In page 18, line 35, to leave out "and Second Schedules" and insert "Schedule".

Sir, the purpose of this amendment is to bring it into line with the amendment of which I have given notice earlier in regard to clause 12 and to remove the protection to the Second Schedule. A parallel amendment is to be moved to leave out the powers of the Minister over the Second Schedule and to allow the Minister to have powers over the First Schedule only.

Amendment agreed to.

Mr J. M. Jumabhoy: Sir, I move,

In page 18, lines 39 and 40, to leave out "in the case of any goods or class of goods specified in the First Schedule to this Ordinance".

This is now redundant in view of my earlier amendment.

Amendment agreed to.

Clause 5, as amended, ordered to stand part of the Bill.

Clause 12-

Mr J. M. Jumabhoy: Sir, I move,

In page 21, lines 28 and 29, to leave out "or Second".

I have already mentioned, Sir, the idea behind this amendment in moving the earlier amendment.

Amendment agreed to.

Clause 12, as amended, ordered to stand part of the Bill.

Bill reported, with Amendments.

Third Reading

Mr Speaker: Third reading, what day?

Mr J. M. Jumabhoy: Now, Sir. Sir, I move, "That the Bill be now read the Third time."

The Assistant Minister to the Chief Secretary (Mr M. P. D. Nair): I second it.

Question proposed.

Mr Lee Kuan Yew: Sir. The Minister for Commerce and Industry now holds the record of having introduced a Bill which underwent the most drastic transformation of any Bill in Select Committee. You will remember, Sir, when he moved the Second Reading of this Bill, before it was committed to Select Committee, that he considered any move to send the Bill to Select Committee as an attempt to block and stymie him. Sir, he might well be right in guessing the motives of those who wanted to send this Bill to Select Committee, but certainly by the amendments which he has accepted and introduced into this Bill, he has confessed that, in fact, his first thoughts were not his best thoughts. He prided himself for having made a speech on one occasion when he uttered famous words to a famous gathering which included the Secretary of State for the United States of America without first having committed it to paper. He regaled us with the privilege of hearing it after it had been committed to paper. Sir, the experience which he has undergone as a result of this Bill should be a constant reminder to him that bright ideas should first be put on paper. They should be carefully considered not only by himself but by all his experts, and should receive further consideration after everybody has given their contributions as to what was right and wrong in the Bill. He would then have saved himself the embarrassment of having been the Minister who put in a Bill which received the most number of amendments in Select Committee.

The Bill, as it is now passed, still enables him to pursue his pet topic, because I notice that cigarettes and matches are put in a special Second Schedule. I do not want, Sir, to join in this speculation as to the profits which can be milched out of the cigarette industry, but I can assure the Minister of this: nobody is going to make any commitment involving millions of dollars on the basis of a Government whose term of office will last for approximately another eight weeks.

11.36 a.m.

Mr Lim Cher Kheng: Mr Speaker, Sir, I am happy that I am an Independent Member, and I am not seeking any political capital in the coming elections this year. Therefore, I have no axe to grind and do not care whether this Bill is passed too early or too late, and whether it is practicable or impracticable. Of course, one point we are in common agreement with is that we have to remind the Minister to explain to us how he is going to make this Bill work, as the statement he has just made fails again to mention the importance of Pan Malayan economic development. He has not told us whether he has any confidence that the implementation of this Bill can cope with the further industrial development in the Federation or not, and whether this Bill will not mislead the Federation industry into believing that we are going to challenge the industry which is opening up in the Federation.

Sir, I wish to touch on a point which I suggested in the last Budget debate, and that is, we must get together - Singapore and the Federation - and sit down and try to outline a plan as to what type of industry we are opening up and what type of goods we are going to manufacture, both in Singapore and Malaya. The interests of both territories are inter-related and a loss suffered in Singapore will also mean an equal loss to the Federation. For example, if our Minister advocates the manufacture of cigarettes in Singapore, and, at the same time, Malaya also decide to open up a tobacco factory, then we would have, in a territory which is so small - Singapore and Malaya - two tobacco factories, subsidized and supported by the Government. To me this seems a waste of our resources and our strength. If we can manufacture cigarettes and the Federation can manufacture matches, then we can achieve wonderful results. Sir, this is the principal point which I wish the Minister to clarify more fully to the House. Any legislation which he introduces in connection with the encouragement of industrial expansion must be on a Pan Malayan basis, because the interests of Malaya and Singapore must always be taken as a whole, especially in view of our common economic interests.

In any case, Sir, this Bill deserves our congratulations because it is a good Bill. The timing, however, I regret, is rather late. But we do hope that the Minister for Commerce and Industry will be returned to office in the next Government, so that he will be able to see the implementation of this Bill carried through smoothly.

Sir, this Bill will definitely encourage local industry. It will definitely give an assurance to the local industry that they will have a certain security, and they will feel confident that the money they have invested here is going to be repaid.

My second point is that we have many business houses which are not keen to open up factories here. Through this Bill, we are going to force, indirectly, foreign companies to set up factories here. Otherwise, if we go along, the business houses, especially the European business houses, thinking that we must maintain our free port status, just could not care less about manufacturing our own goods here. I will quote an example. I strongly oppose the monopoly which the Shipping Conference has in Singapore. If you want to export copra to Europe, the freight is lower and the space can always be reserved. But if you want to export coconut oil, the freight is much higher, and from time to time they will say that there is no more space available for the export of coconut oil. That shows that the European business houses have a control over our local trade. Through this Bill we are going to force the European business houses to open up factories and to manufacture goods which they are used to handling here.

My third point is this. I am sure this Bill will serve a good purpose in that it can regulate our trade and investment. To me, industry and trade are twins. As you know, Sir, all the big ports in the world today, like London, New York and Tokyo (the three biggest ports in the world today) are also known as the big industrial centres of their country, especially New York and Tokyo-although we can consider Osaka as an industrial centre too. But you cannot deny that Tokyo and New York produce many manufactured goods in order that they can export their manufactured products. Therefore, the entrepot position of Singapore will never be jeopardized by the boosting of industry here.

Sir, I heartily support this Bill. Before I sit down, I wonder whether the Minister can clarify an article which appeared in this morning's paper about Mr Hosgood's criticism of the Minister's plan to open up factories to manufacture cigarettes.

Mr J. M. Jumabhoy rose -

Mr Speaker: Mr Jumabhoy, in reply?

Mr J. M. Jumabhoy: Yes, Sir. First, the Member for Tanjong Pagar said that I would have saved a lot of embarrassment to myself. There is no embarrassment to myself. I am not embarrassed in the least. Why should I be embarrassed, Sir, when I have moved these amendments myself? He says that this will create a record for a Bill that has undergone the most drastic transformation. No thanks to the hon. Member for Tanjong Pagar. Out of nine meetings of the Select Committee, he attended only one meeting. The transformation that the Bill has undergone is entirely voluntary on my part. It still fits in with the policy that I laid down and announced in the Assembly.

Hon. Members will see that the power of the Minister to add or vary to the First Schedule remains intact. It is immaterial whether the Bill should be as it originally was which said that everyone has got to apply to the Minister before he starts a factory; or whether the Bill is in this form, so that the Minister can still make anyone, whom he feels he wants to get under control, apply to him by putting that item on the Schedule. The point is that the power of the Minister is still there, as far as the First Schedule is concerned.

I have always said that so long as I am allowed to carry out the policies that the Government have formulated, if more safeguards can be put into the legislation, I am not going to stand in the way. It is a perfectly democratic procedure, if you do it in Select Committee or even outside the Committee when you get reasonable objections. It is perfectly democratic to try and meet those objections by changing the wording in the law so long as the basic requirement of the government being able to carry out its policy remains intact. I can well understand, Sir, that such a procedure would not appeal to the Member for Tanjong Pagar who is well versed in a dictatorial form of administration, as is now going on in the City Council. Therefore, if he puts up legislation, one may well expect he will not change it, even though it could very well be changed without affecting the powers that the legislation should have.

Sir, the Member for Changi has asked me to clarify the reply which one big cigarette organisation has given to my clarification in the Assembly on the profit factor. I do not know, Sir, what he wants me to clarify, but -

Mr Lee Kuan Yew: He wants to know whether an investment of $500 will bring in a profit of $500!

Mr J. M. Jumabhoy: Sir, I can say that this reply in no way says that I am wrong in my calculation of the profit factor. The only place where it says that I am wrong is about the cheaper brands. Sir, I have taken that into calculation and when I said in this House last week that I had estimated the profit factor would be about 60 per cent based on the sale of two million cigarettes, I was, in fact, only estimating the profit on the medium type of cigarettes and not on the lower type. Singapore smokes 6 million cigarettes a day, out of which 5 million are imported. I was estimating my profit of 60 per cent only on the sale of 2 million, not on the sale of 6 million cigarettes. Sir, I have therefore taken this factor into consideration when I said I estimate the profit factor would be 60 per cent of the capital. [Laughter.] It is no use, Sir, the Member for Tanjong Pagar laughing it off, because these are hard facts. These are calculated figures which the Member for Tanjong Pagar may try to belittle, but he cannot get over them. I only wish the people of Singapore know of these facts.

Then again, Sir, Mr Hosgood said the Minister spoke in terms of 150 million cigarettes monthly, but the profit depended upon whether every smoker would accept the new brand and that no cigarettes would be smuggled into Singapore. Sir, I said 150 million cigarettes was the number imported, but my profit factor was calculated only on 60 million cigarettes a month-two million a day. However, on the question whether every smoker will accept the new brand, I also indicated in this House that probably there would be no reason to have new brands because we are negotiating with the existing trade to try and bring a big firm into partnership on a 49 : 51 per cent basis, Singapore holding the 51 per cent. If so, then most of the popular brands could be manufactured here. Therefore, there is no question of new brands being rammed down the throats of the people. But if we come to the stage where, because nobody will make any commitments before the election results are known - the Member for Tanjong Pagar is sure about this, and I do not know why he is so sure, but it is possible that he may have got into contact with them and offered them "instead of Jumabhoy 49 per cent, the P.A.P. will give you 51 per cent - and complete control, if possible." (that is why he is so sure he can stymie the progress of these negotiations) - if it comes to that, and if we are forced to have a factory entirely capitalised by Singapore capital, then the factory will have to make new brands. I can assure this House, Sir, that even if it comes to that, we can manufacture cigarettes as good as the imported ones. There is no question that we cannot. Thailand, Burma, the Philippines, practically all Asian countries are manufacturing cigarettes - cigarettes that are considered as good as imported cigarettes. Japan and Vietnam also manufacture cigarettes as good as the imported ones. The only thing is that foreign interests will make a lot of propaganda and probably they will be assisted in this by the ex-extreme Left - at present the extreme Right - the Member for Tanjong Pagar in order to stymie the efforts of this Government to benefit the people of Singapore.

It is curious, Sir, how out of the ashes of the passionate fires of class hatred aroused in 1955 and 1956 by members of the People's Action Party, there now arises an extreme Right-wing personality-the Member for Tanjong Pagar, who would go to outside interest and undercut what is beneficial to Singapore

Mr Speaker: Order. I cannot see how this is relevant to the Bill.

Mr J. M. Jumabhoy: Sir, what is relevant is that it is in reply to the Member for Tanjong Pagar who states that nobody will make any commitments, and I am trying to find the reason why the Member for Tanjong Pagar is so sure in making such a statement. I have a strong suspicion that something along the lines I have indicated is going on behind the scenes.

Mr Lee Kuan Yew: Sir, on a point of clarification.

Mr Speaker: If the Minister will give way.

Mr J. M. Jumabhoy: No, Sir, I will not give way. Anyone, Sir, -

Mr Lee Kuan Yew: I must answer this allegation

Mr Speaker: Order.

Mr J. M. Jumabhoy: Anyhow, Sir, I have finished with my reply to the debate, and I have nothing further to add, except that I still think that this Bill will be useful to the present Government and to any future government. I have never drafted any legislation with a view to making political propaganda at all. The legislation that has been brought in has always been objective, with a view to helping Singapore as a whole, whichever government is in power.

Sir, I beg to move the Third Reading.

Mr Speaker: Perhaps I could remind the hon. Member for Tanjong Pagar of the Standing Order I did read out, that is Standing Order 30, paragraph (4) of which says:

"A Member who has spoken to a question may again be heard to offer explanation of some material part of his speech which has been misunderstood; but he shall not introduce new matter."

If the hon. Member claims that he has been misunderstood, then he will be allowed to speak.

Mr Lee Kuan Yew: Sir, I have been misunderstood by the Hon. Minister for Commerce and Industry. In fact, I have been deliberately misconstrued. What I said was that nobody would make commitments involving millions of dollars on the basis of promises held out by a Government which can only honour them for eight weeks. If the Minister chooses to read into that a plot to try and down him, then he must be becoming a paranoic. He fondly believes that people would bother to spend their time to negate his efforts, when he has placed himself in a position where his protestations are worthless.

Question put, and agreed to.

Bill accordingly read the Third time and passed.