POST OFFICE SAVINGS BANK (AMENDMENT) BILL

Order for Second Reading read.

5.06 p.m.

The Parliamentary Secretary to the Minister for Finance (Mr Low Por Tuck): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Post Office Savings Bank Ordinance was drawn up and passed at a time when Singapore was completely under colonial domination. Although the Ordinance was meant to encourage the people to save, as far as the use of the savings was concerned, we had no say in the matter. In fact, the Ordinance was so drawn up that our savings would benefit the people of Britain and not the people of Singapore.

Subsection (1) of section 11 of the Ordinance stated that the money in the savings bank could be to a small extent used to invest in Malayan Government securities. To be exact, we were not allowed to invest more than one-third of the money in the Post Office Savings Bank in local securities. The rest of the money was to be kept invested outside Malaya, which usually meant Britain. This meant that only a small proportion of the money in the savings bank, which is the money of our people, could be used for the benefit of the people of Singapore. In 1947 we tried to ask the British Government to allow us to invest at least half of the money in the savings bank in local securities. But we were told that the British Government would not agree to such a proposal. The Federation of Malaya Government also tried at that time to do the same thing but was unsuccessful. But later in 1953, the Federation Government did succeed not merely in using half the money but even all the money in the Savings Bank to invest in their own securities. In other words, they removed the condition in the Post Office Savings Bank Ordinance which limited the amount of money of the Post Office Savings Bank that could be used to buy local securities.

Although we in Singapore do not have independence, we do have a measure of internal self-government and we must make sure that the savings and money of the people of Singapore are used for the benefit and well-being of the people themselves. We cannot allow our money to be used for the people of other countries when we need the money so badly.

In the last Assembly sitting, we presented and passed the motion about our Four-Year Development Plan. We were told that as far as possible this Plan must be financed from our own money. Thus we need every cent that is saved for our own Development Plan. For these reasons, we think that it is about time that this section in the Post Office Savings Bank Ordinance, which prevents us from using the money in the Bank for our own purposes, should be removed and that we should be allowed to use the money in the Savings Bank in the way that we think is best. The Post Office Savings Bank (Amendment) Bill seeks to remove this condition in the original Ordinance.

I must emphasise that this does not mean that the Government will now use the money in any way such that people who put the money in the Post Office Savings Bank will stand to lose it. We have an honest Government and this money will be used honestly and to the best purpose. Again, I must emphasise that it does not mean that the Government will just take the money and use it for its own purpose. If the Government needs the money for the Development Plan, it will borrow from the Post Office Savings Bank by selling to the Post Office Savings Bank bonds or other Government securities and the Government would pay interest on these bonds. Thus, when we say that the Government can use the money, we mean that the Government can borrow the money and use it and not that the Government can take and use it as it likes. This right to borrow freely from the Post Office Savings Bank was formerly denied to us. When this Bill is passed, we will have the right to borrow any proportion of the money in the Post Office Savings Bank.

Sir, I beg to move.

Question proposed.

5.12 p.m.

Mr Rajah: Mr Speaker, Sir, while welcoming the Parliamentary Secretary's statement on the eventual use of these monies invested by the small people of Singapore, and his statement that these monies will not be used by the Government without providing them with an adequate return, he has not told the House whether these monies which the Government will use will be at the rates of interest which the Government would have to pay in the money market. Could the Minister tell us whether the rates which the depositors will be paid will be the same as those paid to the investors on the money market?

Mr Thio Chan Bee: Mr Speaker, Sir, what used to be adequate as a rate of interest before the War is no longer adequate these days. In view of the high rate of interest which the Government is going to give when it borrows money from the Savings Bank fund, could it not consider the question of paying a more enhanced rate of interest to those who save money in the Post Office Savings Bank?

Mr Low Por Tuck: Mr Speaker, Sir, the rate of interest will be paid according to what Government is paying on other securities or bonds.

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. -[Mr Low Por Tuck].

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