ANNUAL BUDGET STATEMENT

7.24 p.m.

Debate resumed.

Inche Ahmad Jabri: (In Malay): Mr Speaker, Sir, I submit my views for the consideration of the Government. I shall discuss the general and detailed aspects of the financial policy when we come to the Committee stage.

7.25 p.m.

Dr Goh Keng Swee: Mr Speaker, Sir, today is supposed to be the day for the Opposition. To my mind, the opportunity they have had of putting forward their cause by criticising and pointing out the inadequacies of the Government in a rational way has been completely lost. We may put the contributions we have had from Members opposite in a few categories.

First, there is the usual political line completely unrelated to the Budget - to call upon the Government to resign - political issues which are completely unconnected with the issues before the House. I shall dismiss such comments with, the contempt that they deserve. On the other hand, a number of Opposition speakers have made perhaps well-founded criticisms or pointed out certain parts of the Government's financial policy on which they are not completely clear. Therefore, in the short time at my disposals I intend to dwell on the second category of the remarks by Opposition Members in this debate.

I think the Member for Queenstown falls into the first category. We have wasted nearly an hour on a thoroughly fruitless, bellicose, inaccurate, and illogical address by him. Surely when you talk about the Budget, Mr Speaker, Sir, the first thing you have to do is to get your facts and figures right. It is obvious that the Member for Queenstown got all his facts muddled up and his figures confused. His only contribution to this debate - if we can call it a contribution - was a long political tirade, so familiar with Barisan Sosialis Members containing nothing but words.

The Member for Hong Lim just reiterates in the most heinous and blatant way the untruth that he uttered last year, that the new taxes we introduced were designed to tax the poor and that only $100,000 came from the big European firms. It is absolutely amazing that a man who is an accountant could come to such a conclusion. No basis in fact, none in evidence, and none whatsoever in logic. So I shall dismiss the speeches of these two Members of the Assembly with the contempt that they deserve.

I propose, instead, to discuss here a number of salient points raised by other Members of the Opposition. They are: first, the reason for the shortage in technicians which is preventing the full implementation of our Development Plan; second, the Economic Development Board, its functions and programme, and the problems facing it; and third, industrialisation. If I have time, I shall deal with certain matters raised by the Member for Anson regarding social insurance, the Work Brigade and possibly some matters raised by the Member for Farrer Park in connection with loans and subsidies to the Housing Board, accommodation, assessment of empty houses, and our plans for the expansion of the water supply.

Sir, first, the shortage of technicians. That fact is admitted all round. The Government has never tried to conceal the fact that there is a grave shortage of engineers, architects and other grades which is impeding the implementation of our Development Plan. It has been alleged by some Members that this is due to the arrogant attitude of the Government and political interference in technical matters. Sir, allegations are very easy to make. But not the slightest shred of evidence has been put forward in support of these grave allegations. They have not quoted one instance in which an engineer or an architect or a quantity surveyor has left the service of the Government either because of political interference or because of inadequate pay. But be that as it may, I think I should give some details of how the Government is proposing to remedy the situation. I will talk on the subject in general terms. We have approached a number of governments and asked them to recruit for us technicians in different grades. This is a vital matter because whether or not we can fulfil the Four-Year Development Plan depends on whether we can get the skilled men to do it. So far as the present position goes, we have made fairly good progress with the U.K. Government. Our terms are these. We say that we are prepared to recruit overseas engineers and technicians, but we are not prepared to pay them more than what we pay our own officers. Otherwise that would be one of the grounds which will breed discontent, jealousy, a decrease in morale and so on. The British Government have agreed that they will pay the expatriate element - what is called the inducing element - which includes expatriation pay, passages, home leave and that sort of thing. Agreement would be reached any moment now, after which advertisements will appear in the newspapers in London and elsewhere calling for applications to these posts. We have also made some arrangements with the Government of Israel, and, as I mentioned in my Budget Statement, we have had three technicians so far in the fields of engineering, architecture and so forth.

Sir, the Member for Anson, in one of his rather high-spirited moments, has ascribed this failure to get technicians entirely to the arrogance of the P.A.P. and the fact that the image of Singapore is not an attractive one. He may he true. He may have the facts for coming to his conclusions. But let us say this - who are the persons responsible for creating such a bad public image of Singapore abroad?

Mr David Marshall: The P.A.P.!

Dr Goh Keng Swee: I say it is the Members of the Opposition, particularly the Member for Anson who cannot possibly control himself. I mean between his tongue and his mind there is inadequate co-ordination, and he speaks certain things which his mind never intends. These are the people who, by their exaggeration, have created the impression that there has been political interference in professional matters. These people have never been able td quote a single instance. But the Member for Anson has at least honestly pointed out a real reason, and that is that there is a world-wide shortage of engineers and technicians. If you want to have them, you have to pay the price.

Mr David Marshall: Have you?

Dr Goh Keng Swee: We are negotiating with the British Government. They are prepared to pay the additional amount, and if they are prepared to do so, Mr Speaker, Sir, why should we refuse to accept it? This is an absolutely vital point in our Development Plan. As I have mentioned, we have stepped up the awards for scholarships in engineering, chemistry and so on and so forth - several posts - but this would not solve our immediate problem, because the bright boys and girls we send abroad now will not be back until about five or six years. In the meantime, we must get these people. If we do not succeed to the extent that we wish, then Mr Speaker, Sir,I can assure you that it is not for want of price.

Now, Sir, the Economic Development Board. There has been general relief expressed by Members opposite that at last the Board has been established. We have never pretended that it is an easy thing to set up because, as part of our election programme, we said that we were going to set up this Board and provide it with vast sums of money - $100 million. If you are going to give an organisation a huge sum of money, you must make absolutely sure that they can spend this money wisely and for the purpose for which the money was intended. We took some two years to set up the Board. I do not think we can be accused of being dilatory about this matter. We do not pretend to he geniuses who have the right solution at the finger tips and can make vital decisions of great import just off the cuff. We have to consult international experts. And we did. There is no need to apologise for that. And we have set up the Board.

Sir, sometimes I feel the Member for Anson is saying, "Look, at long last! What have you to do?" I have explained at great length that the way to do it is a step-by-step process, that is, by getting experts, setting up commissions and getting views all round. We took a long time recruiting personnel. We have had offers from various organisations saying, " I think this man is good." We rejected them after we had interviewed them. We found thqy were not the sort of people we think we should have. If we wanted to produce quick results, I would say that the P.A.P. Government would be well advised to follow the techniques or the methods of the Member for Anson. When he was Chief Minister, I was then a student in the London School of Economics. One morning, to my complete surprise, I was called to the office and told that there was a trunk call from Singapore from the Chief Minister, and I thought some calamity must have befallen the country. So I went there, and the Member for Anson, as Chief Minister, rang me up and said, "Look, a serious decision has been made. We want to appoint an Economic Adviser. Will you please ask Professor Arthur Lewis to take on the job?" He said the Professor was absolutely vital to the country. The survival of the State depended on whether Arthur Lewis would take up the appointment. Whereupon I took the first train from Lancaster/St. Pancras to Birmingham, rang up Professor Lewis and said, "Look, I have a proposal to make. My Chief Minister has asked whether you will take on the job." And he said, "Yes, yes. Queer chap, your Chief Minister. He rang me up last night. He rang me up when I was having my bath." And he said to me, "Go home. You know that even if I took on the job, it would not make two pence worth of difference because that is not the sort of thing you want in Singapore." As I have said, if we want to proceed with this quick method of appointing advisers to the Board, we could have done it. But I do not think that is going to produce any result at all.

Sir, it has been alleged by some Members of the Opposition - although others disagree; they take a diametrically opposite point of view - that we are trying to go out of our way to please foreign investors and foreign capitalists while ignoring the local industrialists. That was the view, I think, expressed by the Member for Queenstown. He quoted at length from our manifesto, that we do not need foreign capital, and what are we doing now? On the other hand, the Member for Hong Lim, who is more worldly wise in his methods, because he is a businessman, - the Member for Queenstown is a doctor - knows that local businessmen are merchants and traders and they cannot open Factories unless they are guided and assisted. That is our point. There is nothing we are doing now that contradicts our policy which was stated at the general elections, namely, that our survival did not depend on foreign capital, because we have a sufficient amount of capital here. But the foreign manufacturers and industrialists, as distinct from the capital they bring to Singapore, can provide the know-how. That is important. Your local businessman has the capital. But he has no know-how. That is the point the Member for Hong Lim was making. Very often the foreign manufacturer, though he has the know-how, does not have the capital because of exchange control, restrictions and various other reasons. The policy of the Government is to bring local businessmen in partnership with overseas industrialists in some form of participation to the benefit of both. It is, of course, untrue to say that we are neglecting the local industrialists. The majority of firms receiving pioneer certificates are local firms. The majority of firms for which we are providing factory sites for industrialisation are local firms. I would not agree entirely with the Member for Hong Lim who says that all businessmen are commercial agents, because there is a small - true it is a small - but vigorous and expanding class of Chinese local industrialists. It is our business to encourage them in every way possible.

We have an Economic Development Board to give them loans on reasonable terms v.-high they cannot get from banks, because our banks only give loans against trade credit - short-term loans. Thus the Board gives most valuable assistance to them. We are starting an Industrial Research Unit which was brought up by the Member for Anson. I can say that the target date for starting this unit, as told by me, would be March next year. Possibly things can go wrong - equipment may be delayed - in which case, it would be June next year. In this way, we can give our industrialists assistance - in technical know-how, capital and advice, if needed. Of course, the Economic Development Board hope to have a fairly comprehensive consultative service. But here again we are held up because we have to recruit really first-class men. We have been in touch with the World Bank and the United Nations, but it is not easy to get good men. If you are prepared to put up with second or third-rate men, you can start some sort of service. But when industries confront some problems, you will find that they will not be able to solve them. In fact, for all practical purposes, it is not worth setting up the unit.

Now, Sir, I will say a few words about the steel mill. From what the Members of the Opposition say, I gather the impression that they believe a steel mill to be something of a gigantic establishment. Is it? It need not be so. There is a scale for these steel mills. You can go for blast furnace. Then, of course, there is a certain minimum scale, where, say, half a million tons a year and nothing less than that will do. On the other hand, techniques have been deeloped where you can go for smaller scale steel mills with every prospect of success. In this case, it was expressed, Mr Speaker, Sir, whether we are ever going to have a steel mill at all. I mentioned in my Budget Statement that we have brought together a number of local businessmen to start this steel mill. They have been negotiating with a Japanese company and not the Government. The Government has been trying to bring them together. There are advantages in joint participation, but unfortunately the local men thought that the terms of the Japanese company for capital participation were too stiff. So they said, "Well, we just run the show ourselves." This is not Government putting up the money and, therefore, you do not know whether you will succeed or not. But these are hardheaded businessmen, two of whom are abroad now, ordering plant, interviewing applicants for posts arid so on. They are putting up about $10 million in this project. Let us say when a businessman puts up that amount of money, he would have a shrewd idea that it is workable, feasible and profitable.

Social insurance is a subject so dear to the heart of the Member for Anson. Then, of course, as a great humanitarian, he could not feel otherwise than to deplore the distress, suffering and poverty of those who are not fortunate. Sir, I think the matter was discussed once in this House and reasons were given why the Government finds it difficult to proceed with the introduction of social insurance. I can assure you, Mr Speaker, Sir, that it is not because I am utterly devoid of human feeling, as has been expressed by the Member for Queenstown, who thinks I am just a chess player, a calculator -

Mr Rajah: Zugzwang.

Dr Goh Keng Swee: - and even the Member for Anson thought that I could do more with warmth of feeling. But, Mr Speaker, Sir, when you start, this social security scheme, it is absolutely vital that your workers and their leaders accept social insurance as social security. If they do not accept it, then I say it is utterly fruitless; first, if it is just an act of paternalism, which we are now aiming to do, and secondly, they will oppose it and if there are ways, jam up the administration -

Mr Low Por Tuck: What about the employers?

Dr Goh Keng Swee: Nobody, of course, is, Sir, I myself had a series of discussions with illustrious trade union leaders such as Mr Lim Ching Siong, Mr Woodhull, Mr Dominic Puthucheary and others, and I put forth before them proposals, not in principle, but a cut and dried administrative scheme. Oddly enough, Dominic's brother, James, the Chairman of the Central Provident Fund -

Dr Toh Chin Chye: Ex-chairman.

Dr Goh Keng Swee: - ex-chairman - had worked out this scheme. We said, "Well, let us introduce this thing", and they said, "No." What was the outcome of it? This is for the benefit of the workers and the State, because then you will do away with one of the most important reasons for industrial strife, that is, redundancy. Sir, they said, "No." There are reasons - genuine or not, it is not for me to say. They say we cannot persuade the workers to make their contribution. They say if you give it to them free, that is another matter. But, Sir, social insurance means the beneficiary must make a contribution. Then the benefits are theirs as of right, unlike public assistance where there is no contribution. When a man accepts public assistance, there is something of charity about it which does not taste right in the mouth. Therefore, social insurance. I say if such illustrious trade union leaders do not want social security for the workers, it is hardly fair for the Government, Mr Speaker, Sir, to introduce it. The Barisan Sosialis never stop reminding us how close we are to the masses. Let them decide. The moment they say they want it, well, implementation is merely a technical problem.

An hon. Member: Bring it.

Dr Goh Keng Swee: It is merely a technical problem, I agree with you. But the workers' leaders must want it first. We are not going to ram it down their throats. No more than we are going to chase student pickets by force.

An hon. Member: Itching powder?

Dr Goh Keng Swee: Itching powder in another matter.

Dr Lee Siew Choh: The Barisan Sosialis is going to decide everything for you?

Dr Goh Keng Swee: Now, Sir, the Work Brigade. There may be trouble there. A statement which causes great hilarity, Mr Speaker, Sir, in Barisan Sosialis circles - I do not know whether I should put any interpretation on it - but that is past.

The Work Brigade was conceived as an unemployment assistance scheme. There were thousands of young men and women coming out to work but are unable to find work. What are they going to do? They loiter around. So we say, give them work to do, organise camps, feed them, discipline their lives, get them to do useful work, pay them out of consideration a daily rated allow-a flee. That is the way the Work Brigade was organised and conceived. They are not a fulltime working force because it is out intention - [Interruption]

Mr Speaker: Order.

Dr Goh Keng Swee: - that they stay in the Work Brigade perhaps 3 months or 6 months or 9 months, during which time we hope to find them jobs in the Government service or the statutory authorities. This is the period when they are trained and given useful work, when their aptitudes can be assessed and training courses organised for them to fit those who are more able for productive work. The type of project that the Work Brigade is allotted to do and the method of carrying out the work has been so designed that you use the largest possible number of hands with the minimum amount of machinery. The cost does not matter. If we say this is a Work Brigade project, digging a ditch or putting a road, and we need not want to do it in the cheapest way, we can let it out on contract, as the Member for Farrer Park says, which is the thing to do. It will save the Government money. But, Sir, we have to do something for these young men and women who otherwise would just be cooling their heels. We were hoping that discipline could help the Work Brigade develop so that we could find employment for them not only in Government service but also in private employment. They can choose whichever form of private employment that pays. They can say yes or no. Unfortunately, Mr Speaker, Sir, for reasons which I will not discuss now, the members of the Brigade have different views on the subject. They think they are full-time workers. If we are to treat them as fully paid full-time workers, I will say, all right, two-thirds of them would go, in fact: probably the whole bunch of them would go because we could carry on with the projects far cheaper by using ordinary commercial methods. The project, therefore, is a temporary phase where a young man does some work, lives a disciplined camp life, has a chance of getting instruction. It is not employment in the sense that others have some work result. It is quite different. We have found permanent jobs for more than 1,000 members of the Work Brigade in the two years, and I say that is a good record. To that extent we have established a Work Brigade which has fulfilled our original objective. Therefore, Sir, when these people have the idea that they should form unions and that they should find more pay, and if they do press their point, Mr Speaker (no doubt there are less well intentioned people behind them egging them on to it), then I say the solution is to close down the Work Brigade and save money. So I say that those members who are now being misguided by various persons should rethink the whole position. It gives us no pleasure, Sir, to close down the camps because we want to provide useful work and activity for these people. But they are not doing full-time work. It is not a full-time proper career. Because if that was so, the whole modus operandi would be different.

Sir, I have only two minutes to go and there are some 4 or 5 other topics to go through. I would have liked to deal with the subject raised by the Member for Farrer Park, because I think it is an important issue, particularly the future of the Public Utilities Board, and an expansion scheme for water and light. Unfortunately, time does not permit me to do so.

As regards the request that we should reappraise the assessment of empty houses, I have already said in my Budget Statement last year that should there be a state where large numbers of houses are left empty because the housing shortage has been overcome, or any other reason, then the position will be reviewed. If the Member for Farrer Park thinks that we have reached that stage, then I say the Government would he well advised to examine this problem.

Question put, and agreed to.

Resolved,

That the Assembly approves the financial policy of the Government for the year 1962.