LOCAL GOVERNMENT (FINANCIAL INTEGRATION) BILL

Order for Second Reading read.

2.40 p.m.

The Prime Minister (Mr Lee Kuan Yew): Mr Speaker, Sir, I have His Excellency the Yang di-Pertuan Negara's recommendation to proceed with this Bill and I move, "That the Bill be now read a Second time."

Before the Minister for Finance can formally present the Budget Estimates for the following year, the Assembly should first approve, in principle, this Bill which will integrate the Budgets of the former City Council and the Singapore Government. It would perhaps be helpful if I were to outline the method and process by which the integration of the City Council and the Rural Board into the Government Ministries is to be achieved, and I hope this will put the Bill in its proper perspective and make its purpose more clear.

There are three stages of integration: first, administrative integration; second, financial integration; and third, complete integration legally by the transfer of staff and property and the establishment of a Public Utilities Board. As regards the first, His Excellency the Yang di-Pertuan Negara in his Address at the opening of the present Session of the Legislative Assembly has stated that "all departments are now administratively integrated with and directed by the respective Government Ministries". It was achieved at the beginning of this year when the various departments were allocated to appropriate Ministries and came under their control and responsibility for day-to-day administration and policies. This was a purely administrative arrangement whereby Ministers in charge of the Ministries acquired authority over the running of those departments of the City Council which were transferred to them, but legal and formal responsibility lies with me together with financial and staffing matters. In the course of this year, Sir, the departments have therefore been functioning within the Ministries, and I hope they have all gained valuable experience in advance of complete legal integration. The Ministries in turn have become acquainted with their new responsibilities. They have drawn up new organisational and establishment charts and are ready to assume formal responsibility.

The second stage is that of financial integration which must take effect from 1st January, 1961, by virtue of the fact that we have now, in the Budget Estimates to be put forward by the Minister for Finance, integrated the Budgets of the City Council and the Central Government. Two Bills are necessary for this purpose: one, the Property Tax Bill and, two, the Local Government (Financial Integration) Bill. As regards the Property Tax Bill which the Minister for Finance has just introduced for First Reading, I would like to anticipate the Bill by making a brief reference in case property owners are unduly upset by the nomenclature of the Bill, that it is an administrative device whereby local rates on assessments are no longer payable as a result of the abolition of the Local Government Authority, and a property tax in lieu of the local rates is to be introduced by the Property Tax Bill. The assessment provisions of the Municipal Ordinance and the Local Government Ordinance will no longer apply in 1961 and they will be replaced by similar provisions in the Property Tax Bill coupled with the Local Government (Financial Integration) Bill.

The final stage of integration, which we hope will be completed by the beginning of next year, will be when the whole process is completed and the Public Utilities Board is set up; and the staff, assets and liabilities as well as the formal transfer of those functions, duties and powers now exercised under the provisions of the Local Government Ordinance and the Municipal Ordinance, are transferred either to the Public Utilities Board or the Government Ministries.

And this last stage will be completed by two further Bills, the Local Government (Integration) Bill and the Public Utilities Bill. We hope to introduce these two Bills, either in January or in February next year. The intention is that they should all become operative by the 1st of July, 1961. This is the date from which the staff would be formally transferred either to the Government or to the Public Utilities Board, and from that date all Ministries - I will divest myself of formal responsibility for the overall control of staff and other matters of the City Council - will assume formal responsibilities for the departments allocated to them and for their functions and duties, which they are already doing administratively.

As regards the Local Government (Financial Integration) Bill, its object and purpose is to enable all moneys received by virtue of the Local Government Ordinance and the Municipal Ordinance, excepting certain moneys specified in this Bill, which are to be excluded, to be paid into the Central Government's Consolidated Fund. It also provides for payments connected with the Local Government services and other functions performed by the Local Authority to be charged to the Consolidated Fund. Clause 3 of the Bill provides for this.

The three trading departments are specifically excluded from the provisions of the Bill since it is the Government's intention to establish a Public Utilities Board comprising the Water, Gas and Electricity Departments. Their moneys shall be continued to be kept separate, and they will operate their own Budget. As hon. Members who have already had advance copies of the Estimates will notice, the Budgets have already been integrated. This is a purely administrative Bill to legalise the fusion of the two Budgets, the Government's and the City Council's.

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. -[The Prime Minister].

Bill considered in Committee reported, without amendment; read a Third time and passed.

2.55 p.m.