DEVELOPMENT LOAN (LOCAL) BILL Second Reading

Consideration resumed.

3.47 p.m.

Mr Speaker: Will the Minister for Finance now please hand in the Certificate of Urgency in respect of the Development Loan (Local) Bill?

Certificate of Urgency handed in.

Mr Speaker: The Certificate is now in order. Are typed copies of the Bill available for the use of Members?

Dr Goh Keng Swee: Yes, Sir.

Typed copies of the Bill handed in to the Clerk and distributed to hon. Members.

Mr Speaker: Honourable Members will notice a manuscript addition to the Long Title of the Bill.

3.50 p.m.

Dr Goh Keng Swee: Mr Speaker, Sir, I have His Excellency's recommendation to proceed with the Bill, and I beg to move, "That the Bill be now read a Second time."

The object of this Bill is to enable the Government to raise in Singapore by way of a loan a sum not exceeding $100 million to finance in part the cost of projects under the Development Estimates. On 1st October this year, the $25 million Straits Settlements 1940 3% War Loan will be due for redemption. There is ample provision in the Sinking Fund for this loan to repay the whole of it. But it is thought advantageous to be able to make an offer to owners of the stock for conversion to a loan which will be floated at about this time. The terms of such a loan are being worked out, and if this Bill is approved, it will be announced in the course of the next few weeks. The amount of the loan intended to be floated will, however, only be part of the $100 million. The sanction given by the Bill, however, will enable the Treasury from time to time to take account of the financial resources likely to be available for loan floatation, and to raise loans whenever local market conditions are favourable.

The form of the Bill follows closely legislation which is in force in the Federation, with minor modifications to suit the conditions in Singapore. The substance of the Bill is in Part II thereof. Clause 3 enables loans to be raised which, by clause 4, will be charged upon the Consolidated Fund. The proceeds realised will be used for development purposes only, and will be paid into the Development Fund which will be constituted under the new Ordinance.

The provisions of Parts III and IV of the Bill are purely procedural and, I think, need no explanation from me.

Part V contains a provision which is new and will enable moneys looking for sources from local investment to be absorbed by the Government in deposits made in anticipation of the next loan to be issued by the Government.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole Assembly.

Assembly immediately resolved itself into a Committee on the Bill. -[Dr Goh Keng Swee].

Bill considered in Committee.

[Mr SPEAKER in the Chair]

3.54 p.m.

Clauses 1 to 11 inclusive ordered to stand part of the Bill.

Clause 12 -

Mr Rajah rose -

The Chairman: Is it on principle or clarification?

Mr Rajah: On clarification, Sir. Would the Minister be good enough to say why the commencing period for the Sinking Fund should be two years? Is that a normal period?

Dr Goh Keng Swee: Yes. The purpose is to allow a period to lapse before Sinking Fund operations take place. Otherwise it means that, in fact, you will actually be borrowing a certain amount with a fraction less.

Clause 12 ordered to stand part of the Bill.

Clauses 13 to 16 inclusive ordered to stand part of the Bill.

The Schedule ordered to stand part of the Bill.

Bill reported without amendment; read the Third time and passed.