FIFTH SUPPLEMENTARY ESTIMATES OF EXPENDITURE FOR 1961

Order read for consideration in Committee of Supply [1st Allotted day].

[Mr Speaker in the Chair]

2.46 p.m.

The Chairman: Will the Minister signify the recommendation of the Yang di-Pertuan Negara before the Committee proceeds with the consideration of these Supplementary Estimates?

Dr Goh Keng Swee: I so signify.

The Chairman: We are now on the Fifth Supplementary Estimates of Expenditure for 1961 contained in Paper Cmd. 37 of 1961. The summary is at page 1.

There is an amendment to Head 28 - Ministry of Finance standing in the name of the Member for Tanglin in relation to subhead 53. Dr Thio Chan Bee.

Dr Thio Chan Bee (Tanglin): Mr Speaker, Sir, I beg to move,

That the sum to be allocated for Head 28 be reduced by $10 in respect of subhead 53.

Sir, it is not usual for Government to include an item involving such a huge sum as $80 million in the Supplementary Estimates. Naturally, Sir, when I saw this item, I wondered why the Minister for Finance had done so. When I read the explanation, I found it to be so meagre that I was left totally in the dark.

Mr David Marshall: Hear, hear!

Dr Thio Chan Bee: Then again with the Budget Estimates for 1962 coming up, one naturally wondered why this item could not have been included in those Estimates. Therefore, we want the Minister for Finance to clarify the position and justify his request for such a big sum. We would like to know, Sir, why it is so urgent that such a big sum must be included in the Supplementary Estimates. What are the schemes which are so urgent for the money to be provided rightaway? We would suggest that, in future, when requests are made for such big sums, fuller explanations be given to the House.

We would also like to know from which unspent balance this sum is going to be transferred.

Dr Goh Keng Swee: Mr Speaker, Sir, I must accept responsibility for the somewhat meagre explanation. I think there is a point in the criticism made by the Member for Tanglin. I must say I regret that a fuller explanation for asking this large amount was not given in the Command Paper.

I must say, however, that it is not true that this thing is not usual. I am speaking from memory, but I think it was in the year 1954 or 1956 thereabouts when similar transfers of sums were made from the revenue balance to the Development Fund. Perhaps I should explain here to Members who may not be familiar with financial procedure that we keep Government monies in two large funds. One is the Consolidated Fund into which all revenues are paid and against which all current expenditure is charged. The other one is the Development Fund which goes towards paying for projects in the Four-Year Development Plan approved by the Assembly. The disbursement of money in the Development Fund is controlled by the Assembly itself, either year by year, or by Supplementary Estimates as the need arises.

Sir, briefly, the position is this. When we draw up the Four-Year Development Plan, we not only set out the major development projects which the State hoped to undertake in the course of the next four years, but we also made a calculation of the resources that were available then for meeting this rather large sum of capital expenditure. Copies of this blue book were circulated to all Members in the House, and I have no doubt that the Member for Tanglin has diligently perused the contents of this book. However, I would like to refresh his memory on this point. In Chapter V of the Plan entitled "Financing the Plan", we described various sources of finance such as surpluses from current revenue, the present financial resources of the Government, City Council Public Utilities, loans (World Bank loans and loans raised locally), and so forth. On page 47, you will see a recapitulation of resources available at that time. They included a transfer from the Consolidated Revenue Account, which is the Consolidated Fund, of $57.2 million, a transfer of $20 million from the Contingency Fund/Advance Accounts, a sum of $9.4 million from unexpended loan proceeds; and on another page we stated that local loans would have to be raised of which about $50 million is expected to be raised in the form of Treasury bills. So these are the sums roughly calculated in drawing up the Plan. These are the sums which represent the financial resources initially available.

Sir, if you add the $57.2 million to be transferred from the Consolidated Fund, the $20 million representing a running down of the Advance Accounts, and the $9.4 million representing the unexpended loan proceeds, you will get a total of, I make it, $87 million. Then, of course, we wanted to keep a part of the loans to be raised on Treasury hills in long-term securities in the Development Fund. So in fact, the operation to be carried out according to the Development Plan will be a sum much higher than $80 million. One of the reasons is that the value of Treasury bills floated in the market has not been as much as we had hoped. So I limited this transfer from the Consolidated Fund to the Development Fund to $80 million. Of course, this is rather necessary because the Development Fund itself is running down in spite of the fact that we floated a loan of $50 million this year. By the end of this year, we have our payments for development expenditure out of this Development Fund. We may get a total of some $51 million as against $87 million which we started with at the beginning of this year. So with the transfer of some $80 million to the Development Fund, we will then get a fairly respectable figure of $171 million roughly for the Development Fund for use next year. We will be making transfers from the Consolidated Fund to the Development Fund as and when the need arises.

I hope my explanation is clear to the Member for Tanglin. I think I do owe to Members of the House an apology for not setting it out in the Command Paper.

Mr A. P. Rajah (Farrer Park): Mr Speaker, Sir, may I refer the Minister for Finance to page 49 of his Development Plan. Paragraph 5.26 sets out the heads under which he proposes to finance tile Plan. $871 million was the total required to finance the Plan of which he hoped to get $116.1 million from Revenue Surplus. Now if I understand Revenue Surplus correctly, it means money saved from revenue. For the year 1961, there was a vote of $30 million as contribution from revenue to the Development Fund. In the 1962 Estimates, there is a further sum of $30 million by way of contribution to the Development Fund. $30 million plus $30 million makes $60 million. Now $80 million from current revenue makes it $140 million. Do I understand the Minister to say that revenue has exceeded his most sanguine hopes when he hoped to finance the $871 million to the point of $116 million from revenue'?

Dr Goh Keng Swee: Mr Speaker, Sir, that is not the position. When we said surplus here, we meant really surplus after the $30 million had been deducted in the normal course of events in the ordinary Estimates, so that to realise the Plan, you would have to have a series of Budget surpluses not only in Development, but also in Public Utilities, Harbour Board, and so on. Have I made my point clear?

Mr Rajah: As I understand it from the Minister for Finance, of the $116.1 million which he hoped to get from Revenue Surplus, the $80 million which he is now asking the House would go towards part of that $116.1 million. He is now asking the House to vote another $80 million to the Development Fund. I take it it is from Revenue Surplus.

Dr Goh Keng Swee: Perhaps he has got the book there. May I refer him to page 47, paragraph 5.17?

3.00 p.m.

In the case of the third item of paragraph 5.17, "Consolidated Revenue Account", there was to be a transfer of this amount because the Revenue Account (what you call the General Revenue Balance) was substantial, and we thought we could write it down for development purposes. There is also a transfer of $20 million of the Contingency Fund into the Advance Account, because, in reviewing the various accounts, we found there was an over-provision and we could safely reduce that amount by $20 million. Then there is the "Unexpended loan proceeds" which is still in the General Revenue Balance.

So this roughly makes up the sum of $80 million. And, of course, we have floated Treasury bills, as we have said, part of which proceeds we want to put in the development fund.

Mr Rajah: Do I understand the Hon, the Minister for Finance to say this: that this $80 million then is the sum set out under "Consolidated Revenue Account $57.2 million" and the sum set out against "Contingency Fund/Advance Accounts $20 million", making $77.2 million. That is the amount he is now asking to be transferred to the Development Fund, and that this $80 million is not from any surplus revenue for the year 1961. Is that correct?

Dr Thio Chan Bee: Mr Speaker, Sir, just for further clarification. In the Budget Estimates, page 8, I see the following particulars, "Deduct Deficit for 1961". Just one question, Sir. If there was not this item of $80 million to be transferred to the Development Fund, would that have altered the statement there, so that instead of a deficit, there would have been a surplus?

Dr Goh Keng Swee: My recollection is this: it took some time before we transferred this. My recollection is that this is based on the Estimates presented to the Assembly last year plus the changes allowed for increasing costs, variable allowances, and so on.

Dr Thio Chan Bee: Mr Speaker, Sir, we hope that in future all these particulars will be included in the Command Paper.

In view of the clarification given, I beg to withdraw the amendment.

The Chairman: Is it the pleasure of hon. Members that the amendment be withdrawn?

Mr Rajah: I was going to ask a further question.

The Chairman: The Member for Tanglin has asked for leave to withdraw.

Mr Rajah: I beg your pardon.

The Chairman: Of course, the hon. Member may speak, but that means there will have to be a vote taken on the amendment.

Mr Rajah: In that case, I will get my information privately.

Amendment, by leave, withdrawn.

The sum of $80,000,000 for Head 28 ordered to stand part of the Fifth Supplementary Estimates of Expenditure for 1961.

The Chairman: Head of expenditure undisposed of - Head 17.

The sum of $236,000 for Head 17 ordered to stand part of the Fifth Supplementary Estimates of Expenditure for 1961.

Question, "That the sum of $80,236,000 shall be supplied to the Government under the heads of expenditure for the public services shown in the Fifth Supplementary Estimates of Expenditure for 1961 contained in Paper Cmd. 37 of 1961", put, and agreed to.

Resolution to be reported.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the Assembly.

Dr Goh Keng Swee: Mr Speaker, Sir, I beg to report that the Committee of Supply have come to a certain resolution.

Resolution read.

Dr Goh Keng Swee: Mr Speaker, Sir, I beg to move that the Assembly doth agree with the Committee on the said resolution.

Question put, and agreed to.

Resolution accordingly agreed to.

3.06 p.m.