BANKING BILL

[Mr SPEAKER in the Chair]

Debate in Committee resumed.

[Mr SPEAKER in the Chair]

Clause 16 -

The Chairman: Does the hon. Member for Farrer Park wish to move his third amendment?

Mr Rajah: Yes.

The Chairman: I have had an opportunity of looking at this proposed amendment, i.e., in page 9, after line 16, to add a new sub-clause:

"On and after the establishment of the Clearing House no industrial action in any form whatsoever shall he taken by any bank with its employees in respect of industrial matters and all trade disputes between any hank and an association of its employees shall be referred to the Industrial Arbitration Court or such other tribunal or body as the Minister may appoint for hearing and adjudication."

It seems to me there are two objections to this amendment. One is under Standing Order No. 69, paragraph (2), which reads:

`Any such Committee [i.e. the Committee on the Bill] shall have power to make such amendments to the Bill as they shall think fit; provided that the amendments (including new clauses and new schedules) are relevant to the subject matter of the Bill;'.

The subject matter of the Bill is the subject matter as indicated in the title of the Bill, which is "An Ordinance to provide for the licensing and regulation of the business of banking, and to amend certain provisions of the Companies Ordinance." So it does appear to me that this amendment is not really relevant to the subject matter of the Bill and there is, of course, authority to say that an amendment is irrelevant if it goes beyond the scope of the Bill. That is the first objection.

The second objection, part of the amendment anyway, seeks, in fact, to make an amendment to the Industrial Relations Ordinance. Section 28 of the Ordinance indicates when a trade dispute should be referred to the Industrial Arbitration Court. The correct legislative procedure for the Member, if he proposes to pursue his subject on that particular aspect of his amendment, is to take steps to amend that section. I must rule it cannot be done by way of an amendment to this particular clause. Therefore, my ruling is that the amendment is out of order and cannot be moved.

The Prime Minister: May I speak on the clause?

The Chairman: The Prime Minister wishes to speak on the amendment?

The Prime Minister: No, not on the amendment. You have already ruled on the amendment.

The Chairman: Can I first propose the question?

The Prime Minister: Sorry.

Question proposed, "That clause 16 stand part of the Bill."

The Prime Minister: Sir, apart from the two procedural points you have raised against the amendment, which you have ruled is out of order, I might mention that I did discuss the matter with the Member for Farrer Park and I pointed out to him that the substantive effect of this amendment, if it was carried, would mean in effect that a a radical change would be created in industrial relations in all banks.

The Chairman: Is the Prime Minister speaking on the amendment I have over-ruled?

The Prime Minister: On the amendment you have over-ruled, but in passing, Mr Speaker, Sir. What I wish to say is this - that it then transpired, I think I must say this in fairness to him, that he had moved this really for the purposes of debate and he was anxious that the Government should make it quite clear that it is not the intention of the Government, by setting up this clearing house to allow the union to sort of pick the banks as victims in turn, one at a time, so that in that way one bank after the other could be penalised. First he had explained that obviously the bank which was recalcitrant might lose custom. I pointed out to him that that was a possible method of operation if we wanted to kill private banking.

The Minister has already stated quite categorically that our entrepot trade, for various reasons, is best served by leaving the commercial banks as they are for a very long time, and it is not the intention of the Government to penalise or to milk each bank in turn. But I have said just now and I repeat this: if the banks, for various reasons of their own, decide to gang up against the union on behalf of one of its members and thereby bring the whole of the banking system to a grinding halt, then it is the duty of the Government to ensure that they are frustrated in that attempt. For the duty of the Government is to maintain a fair balance. The system must be kept going. As has been aptly described, if you shoot the pianist, the dancing stops. And it is not the business of the Government to shoot the pianist. But if the pianist refuses to play, then I say it is the business of the Government to ensure that somebody is there in order that the music can go on and the economy can tick. I think I made fairly clear the position of the Government. We are openly in favour of the workers, but we cannot afford to allow either in the banking industry or in any industry a situation to arise where the enterprise upon which the economy of Singapore is founded is run down to earth because it is no longer profitable. The basic principle of private enterprise is the profit motive and we accept that, and that is the contradiction we face. We have inherited a free trade economy. We are pledged to certain policies on behalf of the workers to level down or level up benefits, and I say, in the interest of both the workers and the economy as a whole, a certain measure of free play and balance must be maintained. But if one employer - in this particular case the O.C.B.C. and its managing directors - is recalcitrant, then I say it can fight it out with the union. We are not helping the union by this. But we are preventing the bank from bringing the economy of Singapore to a grinding halt by ganging up with the other banks.

Mr Rajah: Mr Speaker, Sir, I am indeed obliged to the Hon, the Prime Minister for that statement. The purpose of these amendments to clause 16, Mr Speaker, Sir, was to seek some sort of assurance from the Government that, as a result of this Bill, a situation such as I have envisaged could happen would not happen. As the Prime Minister has now assured us that in these matters it is the intention of the Government to hold the balance evenly between employer and employee and that it is not the intention of the Government to let the economy and trade of this country run to ruin and run to seed, I am quite happy. On the principle of the Bill, I accept that the Bill should go through, but I was a bit worried that the timing of the Bill was such that it might create suspicions in the minds of certain trade unionists in the country.

Question put, and agreed to.

Clause 16 ordered to stand part of the Bill.

Clauses 17 to 26 inclusive ordered to stand part of the Bill.

Clause 27 -

Mr David Marshall rose -

The Chairman: Is it an amendment?

Mr David Marshall: An amendment, Sir, I move,

In page 12, line 37, to leave out "five" and insert "fifty".

Mr Speaker, Sir, we have had in this House a Bill introduced with reference to privileges and immunities whereby the Government sought strenuously to have a maximum fine of $5,000 -

The Chairman: Order. The Member for Anson must not go into such details of a Bill which is now before a Select Committee.

Mr David Marshall: Mr Speaker, Sir, with respect, I am referring to the Bill as published and in respect of the Second Reading.

The Chairman: Order. I do not think the Member is justified in saying the Government has strenuously sought to impose a penalty of that sort. The strenuous effort has not even arrived.

Mr David Marshall: The Government has sought to impose the maximum penalty of $5,000 in respect of a breach of privilege in connection with individual Members in this House. Compared to a bank whose minimum capital is $2 million with an equal reserve fund, where do the financial resources of the individual Members come in? Particularly in the light of the statement made by the Minister for Finance and the contemptuous conduct indicated of banks towards the request of the Minister for responsible action, do we not recognise the need for really punitive measures in the event that the banks seek to disregard the requirements of the law? To a man like Mr Tan Chin Tuan, $5,000 is almost invisible; he would need a magnifying glass. It is absurd to suggest that we should penalise by only $5,000 a bank that does not provide a reserve fund, a bank that does not comply with the requirements of the Ordinance. There is not even an alternative of imprisonment for the officers concerned. This kind and tender approach on the part of the Government towards the banks, particularly in the light of their recent conduct, is more than surprising, and I ask that we redress the balance a little by making the penalty realistic.

5.45 p.m.

Dr Goh Keng Swee: I am quite happy with the amendment. Of course, I must say that the power to restrict this penalty does not rest with the Government but with the law courts. The fact that you have to provide for a higher penalty does not mean that, in fact, it will be enforced if the offence with which the bank is charged and found guilty does not merit such a punishment. But on principle, there is nothing the Government has against the amendment.

The Prime Minister: I would like to mention this business of upping the kitty. The last time it was done in the City Council, I believe the P.A.P. Councillors moved for a 20 cent increase in the salary of the daily rated. The Opposition, which had been in charge of the City Council for a long time before that and had done nothing about it, upped it by another 20 cents since the money did not belong to them. And if we keep on upping the fine to $50,000 and somebody takes it into his mind to add another zero, so it can go on. I think we will let the Member for Anson have the credit for adding the first zero and leave it at that.

Amendment agreed to.

The Chairman: It seems to me that the eagle eye of the Member for Anson has not noticed that in other clauses the penalty is only $5,000.

Mr David Marshall: They are not serious offences, Sir.

Clause 27, as amended, ordered to stand part of the Bill.

Clauses 28 to 33 inclusive ordered to stand part of the Bill.

Clause 34 -

Mr David Marshall: I move,

In page 14, to leave out lines 35 to 38 and insert "with or without conditions".

Mr Speaker, Sir, the Minister for Law has sought to answer the objection I made during the Second Reading, but I fear that there is a misunderstanding. I know that he will correct me if I am wrong, but as I read this clause, Sir, the Minister has no power at all to impose any conditions on a licence to an existing bank other than the conditions which are existing already in 1961.

We know from him now that some banks have no licence at all; so there are no conditions. And other banks probably just have licences without conditions. So that it really means, in effect, that the Minister has no power to lay down conditions in granting the licences to these existing banks although he has the power under clause 3(4) to impose conditions in respect of grants of licences to new banks. I seek to equalise the position in respect of existing banks and new banks to give the Minister unfettered power in his discretion to make such conditions as he may consider necessary on the licences in respect of banks already established as he can in respect of new banks. That is the purpose of the amendment. If you will notice, it will now read:

"shall ... be granted a licence with or without conditions".

And the wording in clause 3(4) "grant a licence, with or without conditions".

Dr Goh Keng Swee: Mr Speaker, Sir, I am not at all happy about the amendment proposed by the Member for Anson.

Mr Rajah: To give you added power.

Dr Goh Keng Swee: The Member for Farrer Park says that it gives me added power. My present unhappy state of mind should surely convince him of my fully democratic persuasions.

There are good reasons for the clause as it stands. May I say that this is not a new Ordinance or an untried Ordinance? It has been tried in the Federation for more than two years and has been found satisfactory. The purpose of this whole Bill is not to point a gun at the head of banks. I think it will be wrong in principle to centralise so much power in the hands of one man.

An hon. Member: Hear, hear!

Dr Goh Keng Swee: But he will be able to dictate terms in detail to important institutions of the economy. Of course, it may be that the Member for Anson has great trust in my discretion. If that is the case -

Mr David Marshall: You will not be there long.

Dr Goh Keng Swee: - I am most delighted. But, Mr Speaker, Sir, on principle, I think it is wrong to give such powers to the Government where the need for such powers has not been clearly established. If the Member for Anson will just say what he has in mind quite apart from carrying on - he must be carrying on a war with somebody - whether in fact he could say, "These are the conditions I think which should be applied to banks of this type." If he can satisfy the Government that there is a great need for that, then I think we might reconsider, but so far, quite apart from venting wrath on the banks, I do not think he has established a case.

Mr David Marshall: Mr Speaker, Sir, it is an agonizingly frustrating experience to try and talk logic to the Minister for Finance. If no conditions are necessary, why do we have clause 3(4)? If no conditions are at all necessary for the control of banks, why do we have the Bill? We have the Bill - I will refresh my memory, Sir - to provide for the licensing and regulation of the business of banking. Under clause 3(4), I trusted him when he said he required the powers of conditions on licences. If, in fact, those powers are necessary for new banks, why are they not necessary for banks already established? The Minister himself may not require those powers, but, as I have pointed out, every government is ephemeral and one does not legislate for the government in office. One legislates from the permanent point of view. Other governments may consider it necessary to have those powers. It is for the Minister to convince us why there is the necessity for the distinction of treatment between these two sets of banks and why he thinks that the banks which have no conditions on their licences today will never require controlling.

Dr Goh Keng Swee: Surely there is a distinction between existing banks and new banks. The fact that a bank is in operation shows - and in most instances, it has been carrying on business for years - that it has adjusted itself to the economy by fulfilling a certain need in that particular section of the economy. For the Government to say that a well-established bank should conduct business along a certain pattern or should have certain changes in its system of organisation, I say that it is completely unnecessary. No such need has been proved, more especially so when in due course the control in detail over banks would be exercised by the Central Bank of the Federation when it establishes a branch here.

Mr David Marshall: When?

Mr Rajah: In August 1963.

Dr Goh Keng Swee: At the latest.

The Prime Minister: June.

Dr Goh Keng Swee: Sir, the purpose of this Bill is surely to regulate the banks, but the regulation must `be done according to certain principles clearly set out in the legislation. I would have thought that this point would have been self-evident to a lawyer of such eminence as the Member for Farrer Park - no, the Member for Anson.

The Prime Minister: This is not to say that the Member for Farrer Park has no eminence.

Mr Rajah: Accepted.

Dr Goh Keng Swee: I have listened to what the Member for Anson has said anti I am quite unconvinced that the amendment is necessary.

Mr Rajah: We have reached a Gilbertian situation in the discussion on this Bill and the Member for Anson, who is always averse to giving any sort of power to the Minister, is advocating that he should take unto himself all the powers that the Member for Anson wishes to give him. And here is the Minister saying, "No, no, thank you very much!" So who is the democrat - the Member for Anson or the Minister for Finance? Surely, Sir, the answer is contained in clause 6.

Mr Byrne: There is an appeal to the High Court.

Mr Rajah: But still there is control over the banks.

The Chairman: No other Member wishing to speak? Does the Member for Anson wish for a vote?

Mr David Marshall: Yes, Sir.

The Prime Minister: Sir, before a division is called on this, may I, on a point of elucidation -

The Chairman: Is the Prime Minister asking for elucidation?

The Prime Minister: No. I understand the Member for Anson is pressing his amendment to a vote.

Mr Rajah: No, not yet.

Mr David Marshall: I am not withdrawing it.

The Chairman: That is all. He is not withdrawing it.

The Prime Minister: I do want to seek some clarification. What is the point now being urged upon us, because we have had a free go at the draftsmanship of people who have probably spent more time in considering this than we have?

The Chairman: I think the Prime Minister has heard the debate on this proposed amendment. Now the Speaker has to put the amendment to the House.

The Question is, "That the words proposed to be left out, be left out." As many as are of that opinion say `Aye'?

Mr David Marshall: Aye.

The Chairman: To the contrary say `No'?

Some hon. Members: No.

The Chairman: I think the Noes have it? The Noes have it.

Mr Byrne: He is waiting for a Division.

The Prime Minister: If you want to call for a division, call one.

The Chairman: The Prime Minister is anticipating.

Amendment accordingly negatived.

Clause 34 ordered to stand part of the Bill.

First, Second and Third Schedules ordered to stand part of the Bill.

Bill reported with amendments; read a Third time and passed.