FINANCIAL ARRANGEMENTS (MERGER)

8.08 p.m.

Tun Lim Yew Hock: Mr Speaker, Sir, I rise to move the motion standing in my name,

That this Assembly views with concern the progress made by the Singapore Government in its talks with the Federation of Malaya Government on the financial arrangements relating to Head 17 (Finance) of Paper Cmd. 33 of 1961.*

• The same motion also stood in the name of Dr Thio Chan Bee.

Sir, I want to take this opportunity to thank the Prime Minister for allowing me the opportunity to move this motion at this particular juncture. I would not like to say that this is indeed a very tactical move on his part having this motion to be considered at this Time so that some Members of the Opposition would have less Time to think and prepare their speech for the main debate - the Budget speech of the Minister for Finance.

The Prime Minister: On a point of elucidation. The tactical objective, Mr Speaker, Sir, is not to deny the Member for Cairnhill Time to prepare for his Budget debate but in order to get his unqualified support in my negotiations with the Minister for Finance in Kuala Lumpur.

Tun Lim Yew Hock: Sir, I have said that the tactical move could not be aimed at me because I am ready for the Budget even if it were to take place now before Time, but I did say that it could react to the disadvantage of some Members of the Opposition who are new to this parliamentary move on the part of the Government. Be that as it may, let me come to my motion.

Sir, the operative word here is "progress", and I can understand that there is a divergence of views on the meaning of "progress". English, Sir, is such a difficult language to understand that sometimes a word can have two or three meanings. The meaning that I want to imply in this word "progress" is not, shall we say, the terms of an agreement or disagreement that have taken place in the Inter-Governmental Committee. What I mean to imply by my motion is the rate of progress, to come to a finalisation on such an important issue on which hangs the coming into existence of Malaysia on 31st August, 1963.

Sir, the Prime Minister in his statement this afternoon disclosed that there has been a lot of hard bargaining going on, and we do sympathise with him that there has been this hard bargaining. But what we find it difficult to forgive him is the way in which he hoped to circumvent this hard bargaining. He did say earlier this afternoon that he felt that it would not be appropriate to mention in this House the discussions that have taken place between the Singapore Government and the Federation Government on the financial talks that have been taking place since February. But what I fail to understand is this. Why, if he considers it inappropriate, should he find it appropriate to give statements to Press reporters whenever he comes back after his discussions in Kuala Lumpur, and why should he find it appropriate during his visits to the rural constituencies to tell the people what he thinks should be the right thing for Singapore and what the Federation Government is trying to do to Singapore in regard to this financial arrangement. That is something which we find it difficult to understand.

Sir, we have great respect for the intelligence of the Prime Minister, but we find it difficult to appreciate this intelligence when he tries to negotiate on matters of national issue through the Press.

Members will remember that the Prime Minister has been giving statements to the Press on matters that have been discussed in Kuala Lumpur. The statements at Times prove very confusing reading. At one Time, we read that the Prime Minister was going to fight to the bitter end and the very next morning we read in the papers that the Prime Minister said, "There is nothing wrong. Things can be settled quite amicably." This brought confusion in the minds of the people.

But one of the things I want to focus attention on is this: the Prime Minister is very adept at propaganda, while the Minister for Culture says, "What is wrong, if we are good at this particular game to knock out the Communists?" I agree with him. There is nothing wrong there. But what is wrong is this: the Prime Minister is fond of indulging in propaganda hoping to reap political capital out of propaganda based on something that is not correct.

Now, let us take the most important Press statement which he gave some months ago. I think it was after the March or April sitting. He gave the impression -

The Prime Minister: May I have the date and Time of the Press report? I have got all the cuttings here.

Tun Lim Yew Hock: Mr Speaker, Sir, there have been so many Press statements, one contradicting the other, that I find it difficult to quote any Press statement at all, but I can give here the impression that the Prime Minister intended to create in the minds of the people of Singapore. If he felt that the people in Singapore were so foolish as to swallow his propaganda, hook, line and sinker -

The Prime Minister: On a point of order, Sir, I think you have made it a rule once on a point of order that when a Member quotes from a newspaper, he must produce it and give the page and the date. I am sure that if the Member for Cairnhill is not prepared with Press cuttings. I have here the complete set since the arguments began, and I will be obliged if he points out to me the particular passage which offended him.

Mr Speaker: I am not aware that the Member for Cairnhill was actually quoting from a newspaper. He was actually talking from memory.

Dr Goh Keng Swee: He was guessing!

Tun Lim Yew Hock: Sir, I do not wish to quote any words of the Prime Minister which I consider to be misleading, but what I do wish to say here is the effect of the statements of the Prime Minister on the minds of the people of Singapore.

The Prime Minister: On the S.P.A.

Tun Lim Yew Hock: Sir, the Prime Minister has all the Press cuttings and he can go through them and show where I am wrong. The most important Press statement he gave was this, "Ah, that monster, the Minister of Finance in Kuala Lumpur, wants to take all the money from Singapore and to creep in and milk Singapore in order that our social services will go abegging." That was the impression the Prime Minister created. We got that impression, so much so that we even swallowed that wonderful propaganda. We felt, "Oh, God, our Prime Minister is right. There is no reason why the Federation Finance Minister must take all the Federal tax in Singapore and control us from Kuala Lumpur." We felt sorry for him and we took that line. We said that he was right. The Federal taxes collected in Singapore must remain in Singapore. We felt that he was right, but we -

The Prime Minister: Sir, on a point of clarification. I think the Member for Cairnhill will save Time in this debate if I were to refer him to page 1 of my statement, the first memorandum on the 18th March. If he will look at page 2, sub-paragraph 4, the sum total result of that memorandum was that we owed the Federation money. At the end of the accounting, as a result of this process, we found ourselves as debtors to the Federation Government and they generously waived the debt and our surplus disappeared. I am not a financial expert. I think the Minister for Finance can take the Member for Cairnhill through all the various intricacies of the arguments. But the sum total result is that we owed the Federation money.

Tun Lim Yew Hock: Mr Speaker, Sir, I would like to assure the Prime Minister that I can never be confused by any attempt on his part to try to bring up irrelevant matters. I have mentioned that the impression he meant to create in the minds of the people was that the money collected in Singapore will remain in Kuala Lumpur.

The Prime Minister: Yes, the first proposal.

Tun Lim Yew Hock: Is that not so?

Mr Speaker: Order.

Tun Lim Yew Hock: He wanted to give that impression. But the actual truth, as in his statement here, was that all Federal taxes collected in Singapore shall remain in Singapore in a neutral fund. That was what was decided, was it not?

The Prime Minister: That was after quite some time.

Dr Goh Keng Swee: Yes.

Tun Lim Yew Hock: Sir, the very capable Minister for Finance, who has been a very obedient listener of "His Master's Voice" shall have his opportunity to reply to me or enter into this debate when the time comes. Just because His Master has said something, he keeps on saying "After some time, after some time." He need not have to nod and repeat His Master's Voice so obediently.

Sir, the impression given to the public was that, and that we now find is the wrong impression, but what was more objectionable to us was this: the Prime Minister went out saying, "You know it is because we have a P.A.P. Government that we are fighting the Finance Minister in Kuala Lumpur. Had this Government been an Alliance Government, the Alliance Government in Singapore would have sold the rights of the people of Singapore to the Alliance Government in the Federation." This is what he said, but I say this in all seriousness, had it been an Alliance Government in Singapore, we would have got a better deal, because we would know how to negotiate and how to present the case of the people of Singapore - not in the way the P.A.P. Government has been presenting the case of the people of Singapore and not in the way the Minister for Culture - in spite of all the culture that he tries to indoctrinate into the people of Singapore - keeps on talking about, something which I could not even catch, although he knows that he has the opportunity to say what he wants and I have an opportunity of replying, because this is a motion in my name. I would invite the Minister for Culture to say what he wants when the time comes, but he should not be so uncultured as to try and say something which I cannot even hear and reply to him. That is what he said, had it been an Alliance Government, we would have sold the rights of the people of Singapore. Had it been an Alliance Government, we would have got a better deal. In fact, it could be proved when the next general elections take place and the Alliance takes over. Then we will see whether we get a better deal or a bad deal.

Sir, I said in my speech on Friday that the name of the P.A.P. stinks worse than manure. But because the P.A.P. Ministers are so conceited, they refuse to see the truth of the situation. They do not know that they stink. They think that by laughing it off, people can forget that the P.A.P. stinks.

Sir, the Minister for Finance seems to think that what we think is wrong. May I therefore ask him to have a by-election in Sembawang tomorrow? Do not laugh it off.

Dr Goh Keng Swee rose ---

Mr Speaker: We cannot have two Members standing up. Let us hive some order. Is it a point of elucidation? Will the Member give way?

Tun Lim Yew Hock resumed his seat.

Dr Goh Keng Swee: Have the Sembawang by-election tomorrow? The Member had been the Chief Minister of Singapore. Surely he knows that there are legal processes - nomination day, polling day, notice of contested elections, and so on. I mean, cannot we have some sense from the former Chief Minister of Singapore?

Tun Lim Yew Hock: Sir, as I have said, the English language is difficult to understand. When I said tomorrow, I mean right away, and if he cannot understand what tomorrow means, perhaps he could consult the Minister for Culture on what tomorrow means. It means that there shall be no further delay.

The Minister for Finance says surely there are a lot of other technical obstacles. What technical obstacles there are, have been created by the P.A.P. Government for ten months!

And then again the impression given by the Prime Minister, who has taken upon himself to give statements on the discussions on the financial talks and brush aside his Minister for Finance, and the Minister for Finance has accepted that brushing aside so tamely and so quietly. The other impression given was this: Au, the surplus. The pre-Malaysia surplus, not the surplus after Malaysia, but the pre-Malaysia surplus. 1959, 1960, 1961 and 1962. That monster, the Minister of Finance of the Federation, wants to grab it all. But that is not the position. What is disclosed by this statement is that the Finance Minister wants to grab it all. But that is not the position. What is disclosed by this statement is that what the Finance Minister wants to grab is the surplus after Malaysia.

An hon. Member: "Grab" - that is the right word for it.

Mr Speaker: Order. We must have some sort of order from the Government Front bench, otherwise we will never get on. And I would suggest that the Member for Cairnhill look at Mr Speaker.

Tun Lim Yew Hock: That is what he said, "wants to grab". Grab is the impression he created in the minds of the people, so I gave what my impression was. We felt it was wrong too. We felt that Federal taxes collected in Singapore should not be taken to Kuala Lumpur. We felt that pre-Malaysia surpluses should be the absolute property of the people of Singapore. We felt it so much that we went to Kuala Lumpur and made representations. The S.P.A. made representations that such things, if right, were wrong. But we were told there had been no such intention at all to take pre-Malaysia surpluses. There is no intention at all that Federal taxes collected in Singapore should be sent up to Kuala Lumpur and then the Singapore Government would have to go to the Federation Finance Minister for dishing out Singapore's proportion of the revenue for its own budget. Therefore the impression created was all wrong. But then when we found that the impression created in the minds was wrong, we began to realise that this was nothing but P.A.P. first-class propaganda. They wanted to make it out to the people of Singapore that they fought so hard, they fought so bitterly, they fought so consistently that money from Federal taxes collected in Singapore would remain in Singapore in a neutral fund and that pre-Malaysia surpluses would be the absolute property of the people of Singapore. Why did they play that game? Because they wanted to make it appear to the people of Singapore, with an eye to the general elections in 1964, that they were the champions of the people of Singapore.

Well, I do not blame the Prime Minister for indulging in that kind of propaganda, but I do blame him for this. That if we are a party to any negotiation, it is the first requirement that either party should not do anything to cause embarrassment to the other party, so that there can be better understanding, better co-operation and better working out of a solution to the mutual advantage of both parties. Instead of which the Prime Minister went out tearing hard at the other party, that is to say, the Government of the Federation of Malaya, making out that he was a great hero. And could we say that it was as expected, that retaliation came almost forthwith from the Federation side that the Prime Minister was talking Out of turn, that the Prime Minister was trying to negotiate through the Press, that what the Prime Minister said was wrong; and not only that but they went so far as to let out a few skeletons in the cupboard?

Now, Sir, that method of negotiation is all wrong and it is because of the manner in which the Prime Minister has indulged in trying to negotiate with the Federation Government that I have felt it necessary to bring this motion to the House in order to put the Prime Minister on the right track. You can only negotiate in the quietness of the conference room, each party giving his case as effectively and as forcefully as he can muster, but not to come out in the Press before the negotiations were concluded one way or the other and try to label the other party as a big bad wolf.

Sir, the statement given by the Prime Minister today did not disclose that there was any intention whatsoever on the part of the Federation Government to want to take over the pre-Malaysia surpluses. And one more significant point in this statement of the Prime Minister is this. He kept on saying that the other party was the Government of the Federation of Malaya, but in all his Press statements, what did he say? The Minister for Finance, the President of the M.C.A. But here he did the right thing. He had been negotiating with the Government of the Federation of Malaya and not with the Minister of Finance, Mr Tan Siew Sin, the President of the M.C.A.

Sir, this statement also discloses the fact that the very first plenary session of the Inter-Governmental Committee took place on the 28th February, 1963, and then there were a few meetings in March, then in April, and then again in May and June. Let us come to the April meeting. The Government gave, as an excuse to shorten the sittings of this Assembly last April, the necessity of the presence of the Prime Minister and the Minister for Finance in inter-governmental talks in the Federation. On the 9th of April, while the debate was still raging on the motion in connection with the action of the Government against subversives, the Prime Minister left for Kuala Lumpur that evening. The very next morning, while the Member for Queenstown was still on his feet talking right up to 6 a.m. in the morning, the Prime Minister was safely away in Kuala Lumpur. Not only was he safely away, but he was actually engaged in a game of golf. We were told that the reason why the Prime Minister and the Minister for Finance had to go to Kuala Lumpur on the 10th of April was that crucial talks were to take place between the Government of Singapore and the Government of the Federation of Malaya, but then because of the war that had been engendered by the Prime Minister, the war in the newspapers between the Prime Minister and the Federation Minister of Finance, it led to a lot of unhappy disclosures, so much so that a disclosure was even made - and that has not yet been denied - that on the 10th of April, the date that the Prime Minister was to have a meeting in Kuala Lumpur on crucial talks, he was absent on the grounds that he was too tired after having played a game of golf the whole morning. I did not say it. But it was in the papers. I will not quote it. The Prime Minister can get all his assistants to read it. He did not attend that meeting on the 10th ---

The Prime Minister rose ---

Mr Speaker: Point of order?

The Prime Minister: Sir, I just would like to be referred to the newspaper - the cutting - because I have never on any occasion remembered my being too tired to attend a meeting because of a game of golf.

Mr Speaker: I take it the Member for Cairnhill will be able to point out the exact news item in the newspaper.

Tun Lim Yew Hock: Sir, I am sorry to see our poor Prime Minister is confused. What I was saying was that because, of all this verbal warfare between the Prime Minister and the Federation Finance Minister, a lot of awful disclosures came to light. It was said openly that on that particular day the Prime Minister did not attend the conference as fixed because he had a game of golf the whole morning. Of course, the Prime Minister is free to deny that. I am not speaking for the veracity of it. It has been said ---

The Prime Minister: On a point of order, Sir. The Member says it has been said. Where has it been said? Show it to me and I will clarify. Please show it to me.

Mr Speaker: I think a Member is entitled to say there has been a rumour and he takes the responsibility for repeating that rumour. If that rumour happens to be wrong, then he becomes liable for spreading a false rumour. That is all there is to it. Tun Lim.

Tun Lim Yew Hock: It has been said and I say it here. Of course, the Prime Minister can deny it.

An hon. Member: Bar, bar!

Tun Lim Yew Hock: Is the Prime Minister going to have a glass of beer that he wants to go to the bar with me?

The Prime Minister: Let us come to the point - on whose side are you?

Tun Lim Yew Hock: The Prime Minister wants to know on whose side we are on. There can be only one side for any political Party in Singapore - the side of the people of Singapore. But it all depends on the way that any political Party implements that vow.

I am not going into the details of what has been said by the Prime Minister, what has been demanded by the other side, and what has been demanded by this side. That is still left for the Singapore Government to negotiate with the Government of the Federation of Malaya. But what I do urge upon the Prime Minister is this. It would be most foolish and suicidal to try and negotiate through the Press, and the sooner he understands and appreciates that, the sooner a better atmosphere will prevail in the Inter-Governmental Committee. Remember, Sir, about that meeting last April? What happened? Nothing came out of it - it blew up. The Prime Minister, according to Press reports, - if not on the 10th, then it must be the 11th or the 12th, you can see it - the Prime Minister according to all that, it was agreed that there should be no Press releases other than an agreed Press release. The agreed Press release was duly issued, but when the Prime Minister came home and after having been met by the members and reporters of the local Press, he went to town. He started calling names. He started saying that this was wrong and that was wrong. For all we know, he may be right in saying all those things. But what I say is that it is wrong for him to say all those things. After having reached a solemn agreement in the Inter-Governmental Committee, there should be no Press releases, he gave a Press interview. Then there followed a counter-attack from the Federation, and this makes sad reading. Sad reading to the people of Singapore. And what makes matters more sad was that it even brought the Chairman of the Inter-Governmental Committee, Tun Razak, to give a Press statement rebuking our Prime Minister. Of course, the Prime Minister can read that particular Press statement. We all did see in it the local Press; and whether that rebuke administered by the Chairman of the Inter-Governmental Committee was deserved by him or not we have not as yet read any statement from him denying that, or accepting the rebuke.

Another point, Sir, the Prime Minister is very fond of negotiating in public is this. Every week he goes round baby-kissing in the rural areas. That does not matter. He can go and kiss as many babies as he wants. Nobody minds that. But at every visit of his to the rural constituencies, he starts blaring out "the trend of negotiations" in Kuala Lumpur. Does he consider that it is a wise thing to do? Or is he doing that with a particular political purpose? Surely, Sir, as our Prime Minister, we expect him to be more circumspect in his public utterances; that, in so far as a national issue is concerned, he should try to represent the people of Singapore in the best possible manner, without giving the other side the opportunity nor the right to run him down, to say that what he was trying to do was nothing but a political stunt. That is what he did - going round kissing babies and disseminating political propaganda. He visits the rural areas as Prime Minister. But in all his speeches it was the Secretary-General of the P.A.P. that was going out spouting political propaganda.

I am sorry, Sir, if I spent a little time going through my notes, because ---

The Prime Minister: Because you had nothing to say.

Tun Lim Yew Hock: --- we did not expect that this motion would come up. But anyway, what we are against is not what has been discussed by the Government, but rather the way in which the Prime Minister has been handling this situation. Sir, it is now agreed, even the Prime Minister has said it, that what is left to be settled is the question of apportionment: how much to go to the Federation, how much to go to Singapore. And also the ratio of distribution of post-Malaysia surplus. That is what I understand from this statement. In regard to apportionment, Sir, I would like the Prime Minister to make a categorical statement in this House. In November 1961, when the Prime Minister tabled Command Paper 33 for debate, he told this House that it had been agreed between him and the Federation Prime Minister that the apportionment would be on the basis of 25 per cent for the Federation, 75 per cent for Singapore. But it would seem from this statement here today, that the apportionment ---

The Prime Minister: On a point of order, Sir.

Mr Speaker: Point of order, yes.

The Prime Minister: Sir, the exchange of letters were tabled in this House in which the phrase was carefully used, "that we shall keep more than three-quarters of our revenue." I think that paraphrasing me when documents have been produced in this House does not help the debate. The motion is, "That this House expresses concern with the progress," and I cannot but join in the concern. The motion is not concerned with the manner in which we have negotiated but is concerned with the progress. And I would like to raise two points. First, that the Member for Cairnhill confines himself, when he quotes from authority, to the documents that have been produced at that Time; secondly, that he confines himself to this motion.

Mr Speaker: Order. I did more or less anticipate all these difficulties and I did hint that I considered that the debate on this motion was premature. The Prime Minister said he would produce a White Paper in due course. The debate could take place on the White Paper. But the Member for Cairnhill insisted, and now he finds himself in these difficulties. The Prime Minister, I think, is correct when he says that if there is to be some reference to a document specifically, a specific quote should be made from that document, and not a mere paraphrase. On the other point as to whether or not what has been said is relevant. I suppose it is relevant in passing. That is all.

Tun Lim Yew Hock: I am not quoting from a document, Sir,I said that was what he said during the sitting in November 1961. I do not have the Time to go through the Hansard. In fact, if I had wanted, I could have the Hansard here and go through it for five or ten minutes and still be standing on the Floor. But I do not want to waste the Time of this House. That is what he said. That was the impression we got: that the Tunku agreed to an apportionment of 25 and 75.

The Prime Minister: No; I do not want to labour the point, but I must raise a point of order.

Mr Speaker: Point of order.

The Prime Minister: These documents are really the subject of controversy between the Federation Minister for Finance and us. And we say that in these documents are set out the bases upon which financial arrangements are to tie up Singapore with the Central Government. They are contained in the White Paper and in the exchange of letters. What it means is there; its words are very simple words. There has been a considerable amount of debate on that openly, which I think has been to the advantage of everybody. Now I suggest that if the Member for Cairnhill wishes to talk on the terms of the financial arrangements, he goes back to the exact words which are contained in the documents produced in this Chamber.

Tun Lim Yew Hock: Sir, I do not know whether I find it a pleasure that I have got under the skin of the Prime Minister, but it is no pleasure to me. The issue is of greater importance than the Prime Minister or myself, than the P.A.P. or the S.P.A. or the Alliance. The issue is that the interest of the people of Singapore must be protected.

The Prime Minister: Hear, hear!

Tun Lim Yew Hock: If the P.A.P. comes out to protect the people, we are with them, but we would not be a party to any political manoeuvring in order to embarrass the other party to the negotiations.

Sir, I have said that this motion was brought in aimed more at the manner in which negotiations have taken place, but if the Members of this House wish to take this opportunity to have it out with the Government for the terms of agreement or disagreement, I cannot prevent them; but fortunately I shall have an opportunity to reply when such matters are brought up. One thing we want to make clear in this House is that whatever agreement that the P.A.P. Government reaches with the Federation Government must be guided by this important factor - the interests of the people of Singapore come first and foremost, and if they do that we are with them.

Mr Speaker: The Question is,

"That this Assembly views with concern the progress made by the Singapore Government in its talks with the Federation of Malaya Government on the financial arrangements relating to Head 17 (Finance) of Paper Cmd. 33 of 1961."

I ask Members now to be relevant to the motion which is concerned over the progress made, and the progress made is, as I understand it, detailed in the statement made by the Prime Minister this afternoon.

Dr Lee Siew Choh (Queenstown): Mr Speaker, Sir, before I make any comments on this motion, I want to make it clear that discussion of the motion does not mean that we accept the financial talks between the two Governments. We want to say that ---

The Prime Minister: You do not want to say.

Dr Lee Siew Choh: --- so far as the people of Singapore are concerned, the White Paper is a sell-out and the Referendum on the 1st September. 1962, never gave the people the right to say "No". Under those circumstances, especially when it was conducted with deceit, coercion and intimidation by the Government ---

Dr Goh Keng Swee: On a point of order, Sir. Are these proper words in respect of a proposal approved by this Assembly? Are these proper words - "deceit", "coercion" and other adjectives?

Mr Speaker: I understood the Member for Queenstown to allege that the machinery for the referendum had some deceit in it. The proper thing for him to have done at that moment was to have the matter referred to the High Court.

Dr Lee Siew Choh: And therefore, Sir, the referendum at no Time reflected the will and the desire of the people freely expressed.

The Prime Minister: But you thought you were going to win.

Dr Lee Siew Choh: The Prime Minister talks very glibly about the referendum. Let him give the people of Singapore a true plebiscite where they can say "Yes" or "No". Let him do that and then he will not laugh any more.

The Prime Minister: What should be done for the Barisan?

Dr Lee Siew Choh: You can arrest all of us ---

The Prime Minister: No, no.

Dr Lee Siew Choh: You have already put us in ---

Mr Speaker: Order. I would suggest to Members on the Front Bench of the Government side to refrain from interjections as far as possible if we want to get on with this motion. The Member for Queenstown is trying to address the Speaker, but he is interrupted by interjections.

Dr Lee Siew Choh: As I say, Sir, discussion of this motion here in no way means that we accept these financial merger talks. And so far as we are concerned, the referendum surveys of Tanjong Pagar and Kreta Ayer fully reflected the views of the people, and that is on a straightforward question demanding an answer of "Yes" or "No". As in Tanjong Pagar, ninety per cent of the people said "No", and as in Kreta Ayer when the questions as were finally posed in the referendum were posed to the people, ninety-seven per cent of the people put in blank votes.

Sir, the Member for Cairnhill has brought this motion up not because he thinks there is something wrong as regards the actual terms of the financial arrangements, but because he wants to deny the P.A.P. an opportunity of playing politics.

Tun Lim Yew Hock: On a point of elucidation, Sir.

Mr Speaker: On a point of elucidation, yes, if the doctor will give way.

Dr Lee Siew Choh resumed his seat.

Tun Lim Yew Hock: The Member for Queenstown seems to have failed to grasp what I have been saying. I said, insofar as the terms of agreement or disagreement are concerned, these are matters for the Government to solve.

The Prime Minister: Hear, hear!

Tun Lim Yew Hock: But when it comes up for a full debate in this House, so long as the agreement reached by the Singapore Government is in the interest of the people of Singapore, we will be with them, and we will be with them too in any fight on their hands to protect the interest of the people of Singapore.

An hon. Member: You may be sacked for doing that!

Dr Lee Siew Choh: You see, Sir, the Member for Cairnhill, as I said yesterday, is fighting for the same piece of bone with the P.A.P. He is only annoyed because the Prime Minister makes statements at the Airport and because he makes political propaganda during his rural visits; whereas the Member for Cairnhill could not do that.

An hon. Member: Very difficult.

Dr Lee Siew Choh: And he is merely complaining that the Prime Minister is very adept at propaganda ---

Tun Lim Yew Hock: You said so yourself.

Dr Lee Siew Choh: And he would not mind if he was adept at propaganda against the so-called Communists, but he would object if the propaganda was directed against people with whom he is on very friendly terms. The Member for Cairnhill has his loyalties towards the Federation Government, the U.M.N.O. Alliance Government, and because of that he is ready to support the U.M.N.O.-M.C.A.-Alliance at any Time. It does not matter whether Singapore has a good deal or a bad deal. If you will remember, Sir, he is only saying that if he was the Government he would be able to offer a better deal, but not an equal deal, namely, a deal based on equality and justice - only slightly better ---

Mr Rajah: Or Barisan justice.

Dr Lee Siew Choh: And, therefore, all he is concerned about is the manner in which negotiations have been carried out. He does not care whether, in actual fact, the terms are good or bad for Singapore.

Dr Goh Keng Swee: Sir, on a point of order.

Mr Speaker: Point of order, yes.

Dr Goh Keng Swee: Is it in order for a Member to paraphrase another Member for the last 10 to 15 minutes when we have suspended Standing Orders. Many of us have not had our dinners and we want to get on with this job. Is it in order for a Member to spend 10 minutes paraphrasing a speech lasting nearly one hour of another Member's speech?

Mr Speaker: I suppose any Member is entitled to an exordium and an exordium also, I suppose, does paraphrase previous speeches. I wonder whether the Minister who has just spoken is hinting that we should stop for dinner. I will give it another quarter of an hour and see how it goes and then I probably will have to suspend the sitting, because the Speaker himself has not had dinner Dr Lee.

Dr Lee Siew Choh: I will take quite some time, Sir. [Laughter].

Mr Speaker: May I suggest to the Member for Queenstown that he review what he is going to say because we are only concerned with this motion which asks this Assembly to view with concern the progress made by the Singapore Government, and the progress is set out in this statement by the Prime Minister made earlier on today. Well, I had better stop at that, because I am going to be rather strict upon relevance and irrelevance. The Member for Cairnhill was irrelevant perhaps for about half his speech, but I think I owe it to Members of this Assembly to be very, very strict upon relevance and I think that perhaps we should adjourn now for three-quarters of an hour. Is it satisfactory to adjourn for three-quarters of an hour for dinner? I will take this Chair again at a quarter to ten.

Sitting accordingly suspended at 9.02 p.m. until 9.45 p.m. Sitting resumed at 9.45 p.m.

[Mr Speaker in the Chair]

Debate resumed.

Question again proposed.

Dr Lee Siew Choh: I was saying, Sir, that the Member for Cairnhill does not bother whether Singapore surrenders in toto or not; he only bothers about the revelation of the talks which are in progress. He has informed many of us outside that it is a case of cheap sale but because the S.P.A. and U.M.N.O. are fighting against the P.A.P., he therefore, has to support the Federation side.

Now, let us see what the statement of the Prime Minister has revealed tonight. On reading through the whole statement, it shows one thing. It is a report of the different stages towards surrender and finally of abject surrender by the P.A.P. The Prime Minister talks of the quantum of Singapore's contribution and the responsibility for collection of national taxes in Singapore after merger, and these talks are important enough to have affected quite a number f services ill the Government departments. For example, you might have heard. Sir, that there are already strikes in the Police Department. You might also know that they are threatening a strike in the P. & T. Department. All these are Pan-Malayan departments and who controls the money and pays the salaries in these departments will have a great hearing on these strikes. The Parliamentary Secretary to the Minister for Culture, of course, understands this very well, and he is responsible for many of the demands that are now conveyed to the P.A.P. Government. But this statement by the Prime Minister has revealed certain other things which we never knew before. You see, Sir, all the Time the P.A.P. has been giving the impression to the people of Singapore that the differences between Singapore and the Federation are only on the matter of surpluses.

In a forum in the Nantah about a week or so ago, we exposed this so-called surplus angle of the P.A.P. But I will come to this later. The two other important points which the statement has revealed are: there is a new thing called Pan- Malaysian expenditure; and there is another new thing of payment to the Borneo territories of $50 million.

Now, I have run through the White Paper very, very carefully, Sir, with a tooth comb, but nowhere have I been able to find the word "Malaysian" - common Pan-Malaysian expenditure. This is something which is entirely new and which the people of Singapore have so far not been told of. The other one is this $50 million. All this merely shows that the money, which is the bone of contention between the Federation and Singapore, will ultimately be used for the expansion of the armed forces for the suppression of the people in this region. The money which the Federation wants will be spent on capital improvements in fighting-ships, fighting-vehicles, fighting-equipment, all in order to prevent the realisation of the hopes and aspirations not only of the people of Singapore but also of the Borneo region.

Dr Goh Keng Swee: On a point of order. I am not sure whether, on this motion, it is in order to speak on the merits of the proposals in the Malaysian discussion between the two Governments. It seems to me that the Member for Queenstown is wide of the track, because he seems to have assumed that the proposals, all made by the Federation Government, have been accepted by the Singapore Government in all respects. It seems to me that very little purpose will be served now - before all the documents have been published and the agreements in detail recorded - to discuss the merits of the different items. I thought the object really is to express anxiety on the progress made in the talks.

Mr Speaker: The difficulty, of course, the Speaker has is to draw a line somewhere. I think the comments so far are comments on the statement itself, and I have not as yet decided that the Member for Queenstown is in any way irrelevant at the moment.

Dr Lee Siew Choh: I intend, Sir, to confine myself to the progress of the talks.

You see, Sir, the Government account given tonight is, let us say, slightly different from the account that has been given to the newspapers, and that is why I say that there are certain things which, until to-night, have not been revealed. I have mentioned those two points, and I am sure that when all the facts are told, there will be more skeletons in the cupboard.

All along, Sir, the Government have been talking about surpluses. When the Prime Minister came back from his trips to Kuala Lumpur he talked about surpluses and how he wants to make use of these surpluses for the benefit of the people of Singapore. In his visits to the constituencies, he tells everybody that that money is the people's money and that therefore he is going to keep that money for the people of Singapore, thus hoping to give the impression that he is really fighting for the interests of Singapore, whereas, in fact as I have already pointed out from the very beginning, he has already sold Singapore right down the river.

Dr Goh Keng Swee: How?

Dr Lee Siew Choh: "How, how?", he asks. Are we not controlled as and when the Federation likes? The facts of this financial talks agreement tell us that there is complete surrender on the part of the P.A.P. Now all control will be from Kuala Lumpur, and yet we do not even have proportional representation. The Prime Minister himself admits in the newspapers - if he wants me to quote. I will quote every word of it.

Dr Goh Keng Swee: Do.

Dr Lee Siew Choh: - that the whole thing is one sided, completely one sided. These are the words used by the Prime Minister, Sir,I am sure the Minister for Finance will not dare say anything against what the Prime Minister has said.

Dr Goh Keng Swee: On a point of elucidation.

Dr Lee Siew Choh resumed his seat.

Dr Goh Keng Swee: Is the Member suggesting that we have agreed to the agreement put up by the Federation Government? In particular, is he suggesting that we have agreed to surrender the surplus?

Dr Lee Siew Choh: That is not for us to say, Sir. I am only going on what we have been told and on what we have read in the newspapers. I hope the Prime Minister and the Minister for Finance will tell us straightaway in this House to-night whether they have surrendered or not.

Mr Speaker: Order. I have indicated my views as to how the debate should go. The motion asks the House to view with concern the progress made by the Government in its talks relating to Head 17 of Paper Command 33 of 1961. The Prime Minister has set out in his statement the progress made so far, and the debate now should be as to whether or not the Assembly should view with concern the progress as detailed in the statement of the Prune Minister. That is all we are debating to-night.

Dr Lee Siew Choh: But it would be enlightening, Sir, that whilst we go by what the Prime Minister has revealed to-night, we should also go by what the Prime Minister has said to the Press. Unless we do that, Sir, we shall not be able to see the deception which the Prime Minister has practised on the people of Singapore. It is pertinent at this point that we bring out certain facts to show that the P.A.P. is not above-board in all its dealings. Here, in this statement, the Prime Minister, first of all, reveals that on 21st March the Federation Government proposed that Singapore should bear 21.2 per cent of certain common Pan-Malaysian expenditure such as defence, internal security, external affairs, Parliament, etc. As I have already said, this is something which we cannot find in the White Paper. But, of course, the Government may have another story to tell.

The other point which the Government of the Federation insists on is that the total revenue of Singapore should be collected and controlled by the Federation and that only certain revenue be assigned to the State to enable Singapore to meet her obligations in the State itself. Therefore, this question of the so-called surplus does not come in.

Sir, in a letter to the Straits Times on 25th of May, the Deputy Controller of Supply, Malaysia, from the Treasury in Kuala Lumpur, revealed that it is not a matter of surplus or deficit, as the Government of Singapore has all the Time been trying to tell the people of Singapore, but a matter of percentage to be apportioned between the two Governments. And he revealed that it is a matter of X per cent to the Federation and Y per cent to Singapore. Once the percentage has been assigned, it is entirely a matter of State budgeting, whether there is a surplus or deficit. That was the position from the very beginning, as insisted upon by the Federation Finance Minister, Mr Tan Siew Sin. But, of course, as revealed in this statement, the Singapore Government objects, and it objects because of one, two and three reasons. But, if you will look, Sir, at No. (ii) - I will pick on No. (ii) , which is on 3 - it means that the Singapore Government in effect had already accepted in principle the matter of percentage to be contributed to the Federation Government. The P.A.P. merely complains of the percentage being too high. That is all. But the principle of percentage had already been accepted by the Singapore Government, although the Government of Singapore insist on a couple of conditions, namely, the representation in the Central Parliament and the population.

Sir, we have all along been saying that representation in the Central Parliament is a very important thing, and we are glad to note that the P.A.P. Government has at last admitted this very fact. I wish also to draw your attention, Sir, to what the Prime Minister has been telling the people in Singapore.

On the 23rd of March in the Straits Times, he said, "We must collect and keep and pay. The Federation Government understand this. I think we have been sufficiently articulate." This is the very firm stand of the Government, for in the headlines in the Straits Times it says, "We stand pat." Yet whilst saying that the Singapore Government must collect and keel) and then contribute, the Prime Minister in his statement here reveals that the Singapore Government had already accepted the principle of percentage contribution. He only complained of the contribution of 21.2 per cent being too high. But other than that, the whole principle has been admitted and everything agreed to.

Then whilst talking about these three factors on page 4, namely, representation in Parliament, population and economic growth, the Government also revealed that any percentage payment to the Federation would mean a built-in increase in payment to the Federation and, therefore, so far as Singapore is concerned, something which the P.A.P. could not agree to. Mr Jek Yuen Thong, Political Secretary to the Prime Minister, wrote in a letter to the Straits Times that this built-in increase would arise from the natural increase in consumption, from the large number of taxes over a wider range of commodities, and from the increase in the actual level of taxation. Therefore, although it says that a percentage payment is very disadvantageous to Singapore, the Government nevertheless accepted this principle of percentage payment to the Federation.

On page 4, it says the payment should be based on actual expenditure. But what difference does it make whether the actual expenditure should be in the case of 1961 or 1962? Because, as revealed in the Prime Minister's statement, the amount of future expenditure will be unpredictable; in other words, the expenditure will be mounting and the contribution from Singapore will similarly be mounting. They try to save face over the fact that actual expenditure must mean that the Accountant-General submits audited accounts. This does not mean anything except to show that even in the matter of Government to Government negotiations, the P.A.P. clearly does not trust the Federation Government. Otherwise, why insist on this? Unless there is fear that everything is not above-board, you need not insist on the Accountant-General submitting his accounts of actual expenditure.

Then these three factors, namely representation in Parliament, population and economic growth - in the newspapers a fourth factor is added, i.e. the size of the area to be defended. The Government nevertheless, when it comes to the agreement, has clean forgotten these factors other than economic growth which the Government equates with the so-called common market. Representation in Parliament is forgotten. Population factor is forgotten. The little bit of face-saving that the Federation Government gives the Prime Minister is this talk of so-called limited common market. But we must be careful about this common market business, Sir, because, as far as we know, the form of common market which the P.A.P. had originally envisaged is that there must be joint consultation at the top as regards how industries should be sited and assigned. Only then would the interests of Singapore be adequately looked after; otherwise it amounts to surrender. A's it is, the only form of common market arrangement that we know the Federation Government will agree to is one in which the Federation has complete control.

Mr Rajaratnam: How do you know?

Dr Lee Siew Choh: Well, would you let us know then, if that is not the case! [Interruption]

Mr Speaker: Order.

Dr Lee Siew Choh: I might inform the Minister for Culture that only yesterday the Minister of Commerce and Industry, Dr Lim Swee Aun, in the Sunday Mail, in answer to a question about the common market as to whether the Federation Government would review their whole policy of industrialisation or not, said:

`It's the other way round. The Government will first consider the [Rueff Malaysia] Mission's report, and if it feels a review is necessary this will be carried out.'

This alone shows, Sir, that the interests of the Federation must come first, and, whatever the Report of the Rueff Commission may be, it must tally first with the policy of the Federation before consideration will be given as to any possible review.

Mr Speaker: Order. I have been trying my very best to understand what the Member for Queenstown is driving at vis-a-vis the motion before us. I will try and explain exactly what is in my mind. The motion asks this Assembly to view with concern the progress made by the Singapore Government in its talks with the Federation of Malaya Government on the financial arrangements relating to Head 17 (Finance) of Paper Cmd. 33 of 1961. Head 17 of Paper Cmd. 33 of 1961 was accepted by this House. To refresh the memory of Members, I will read the resolution of this House dated the 6th December, 1961 [Vol. 15, No. 16, col. 1525]:

`That as an immediate practical step towards the ideal goal of complete merger this House accepts the heads of agreement set out in the White Paper Cmd. 33 of 1961 agreed to between the Governments of the State of Singapore and the Federation of Malaya as a working basis for a reunification of the two territories.'

From that base then, this Assembly having agreed to Head 17 of Paper Cmd. 33 of 1961, the Singapore Government have made certain progress in the financial talks under that head and the progress is detailed in the statement made by the Prime Minister, and this House, as I say, has been asked to view with concern that progress made. I do not know whether the Member for Queenstown accepts the position that progress of some sort has to be made, and he is criticising the progress that has actually been made. If that is so, he is in order. If, on the other hand, he will have none of these heads of agreement, he will not agree to this Head 17, as in fact he did not agree to Head 17 of Paper Cmd. 33 of 1961, then he will have none of these negotiations. I do not understand at the moment what the Member for Queenstown is speaking to in this motion.

Dr Lee Siew Choh: Mr Speaker, Sir, I am merely criticising the statement which has been issued by the Prime Minister. As I have said, we do not accept anything about the negotiations because it is only part of the White Paper and we have already rejected the White Paper.

Mr Speaker: Order. But the motion does not ask Members to criticise the actions of the Singapore Government as to how they negotiated these agreements or these steps towards agreement. The motion does not ask us to do that. The motion asks the House to view with concern the actual progress that has been made, and the actual progress that has been made is detailed in the statement by the Prime Minister. That is the position. Is the progress too little or too great or not enough? I should imagine that is how the debate should proceed.

Dr Lee Siew Choh: It is a bit difficult, Sir, to confine ourselves exactly to lust the word "progress". There are other incidental happenings which are part of this Progress, and unless they are brought out, you will not be able to see how the P.A.P. has completely surrendered in these negotiations with the Federation.

Let me just bring out one little point to prove what I want to convey to the House. A little while back, for example, the Prime Minister said that he has never said that 25 per cent of Singapore's revenue would be given to the Federation. I have here a statement issued by the Singapore Government which says that 25 per cent is all that the Singapore Government would be contributing. I will read this little bit from the statement, and I am sure, Mr Speaker, Sir, you will appreciate that to confine myself strictly to the progress at the present moment would be quite difficult. This is a statement issued by the Singapore Government on 7th February, 1962, and Dr Goh Keng Swee was answering Mr Chan Chiaw Thor, who is now being detained in the Federation ---

Dr Goh Keng Swee: What date?

Dr Lee Siew Choh: --- and the statement reads:

'The Minister explained that a certain sum was meant to meet the cost of two items, namely, the contribution to the Federation Government and (1) certain departments which are now run by the Singapore Government but which, on merger, will be run by the Central Government. For example, Police, Post Office, Telecommunication, Civil Aviation, Prisons, the Audit 0ffice and the Defence Forces. The recurrent loss of the department is about $62 million, the development expenditure about 8 million a year; and (2) Singapore will have to pay for its share of Pan-Malayan Defence Forces, the Foreign Office and certain State institutions such as the Central Parliament. Dr Goh estimated the annual share at $8 million. This makes a total of $78 million a year or nearly one-quarter of the estimated revenue for 1961, which was $345 million. This is the reason why the contribution Singapore makes to the Central Government has been put as about 25 per cent.'

Further down, the statement reads:

`The real additional expenditure to Singapore will be around $8 million a year only representing the cost of Singapore's share in the Malayan Defence Forces and the Foreign Service. As this amount is less than the budget surplus in the last three years, it will not be necessary to reduce expenditure on education and health.'

Dr Goh at that time, Sir, was answering a revelation by Chan Chiaw Thor that Singapore will be contributing at least $40 million a year to the Federation Government. As revealed in this statement, the defence expenditure is only $8 million extra. But we can see here from this statement given by the Prime Minister tonight that it is much much more than $8 million. We are already asked to pay $50 million to the Federation Government and we have also agreed to pay a percentage to the Central Government which, according to the Political Secretary to the Prime Minister, Mr Jek Yuen Thong, would mean a built-in increase. In other words, the amount that would be given to the Federation would be mounting and mounting and mounting ---

An hon. Member: You are quite right.

Dr Lee Siew Choh: And the only consolation that the people in Singapore can ever hope to get is the establishment of a common market which, as I have already explained, is a common market completely to the advantage of the Federation and will not help the Singapore Government in any way ---

The Prime Minister: How do you know what the U.N. recommended?

Dr Lee Siew Choh: This is what we read and this is our interpretation. Of course, if the Prime Minister wishes to enlighten us, I am sure the House will only be too happy to listen to him ---

The Prime Minister: Give me a chance.

Dr Lee Siew Choh: If you like to enlighten us, I can sit down and let you say ---

Mr Speaker: Order. Let us carry on with this debate. Dr Lee.

Dr Lee Siew Choh: You see, Sir, what we are unhappy about is that while we have bean told we would be merely contributing to Federal services in Singapore all along ---

The Prime Minister: Mr Speaker, Sir, on a point of order. In this House in November 1961 we tabled certain documents which were solemnly agreed between the two Governments-in the White Paper and in the exchange of letters - and I suggest if Members on the opposite side wish to debate progress, they have to start off with these arrangements as a yardstick. What paragraph 17 stated, with respect to this particular aspect of the financial arrangements, is as follows:

`The present machinery...'

Mr Speaker: Order. That is not a point of order. I have already indicated the trend of this debate and I am watching the situation very carefully. Dr Lee.

Dr Lee Siew Choh: But anyway, Sir, whatever the Prime Minister may like to say, he cannot tell us how we have this cost of common Malaysian services plus the cost of Federal departments in Singapore ---

The Prime Minister: On a point of order. That is exactly the point I want to explain to him ---

Mr Speaker: Order. This is not a point of order. The Prime Minister will have his opportunity of explaining. Dr Lee.

Dr Lee Siew Choh: From the talks, we also learn that the Singapore Government may have to contribute from Singapore's Development Fund to the Federation Development Fund to cover the cost of capital expenditure on defence and internal security ---

The Prime Minister: Those are all the words of your friend Azahari.

Dr Lee Siew Choh: You see, Sir, the Prime Minister is very quick about Azahari and what-not. But whom does he help? Is he not a colonial stooge [Interruption] trying to help the British Government ---

Mr Speaker: Order. I would suggest that the Government Front benchers do not intervene. Because once they start intervening and interjecting, I suppose the Member for Queenstown must reply. Dr Lee.

Dr Lee Siew Choh: Anyway, Sir, from this statement the whole thing can be summarised like this - that the Singapore Government has surrendered complete control to the Federation ---

The Prime Minister: Over security, yes.

Dr Lee Siew Choh: In spite of the Prime Minister's brave words about collecting and keeping and paying the taxes and in spite of his assurance of retaining basic control.

Let me quote from a televised panorama broadcast on 6th May in London. The Prime Minister was asked questions and he answered certain questions. I will just quote a couple of questions which he answered.

`Mr Lee Kuan Yew stressed at the beginning of the interview that Singapore would be responsible for State services except Defence, Security and External Affairs. He continued: "We have got to collect revenue to be able to spend it the way we want."'.

The Prime Minister: Quite right.

Dr Lee Siew Choh: And the question goes. "So that control over finance would be a minimum condition for you going into the Federation?" And the Prime Minister said:

`"Oh, yes, absolutely basic."'

The Prime Minister: Quite right. We are telling you that.

Dr Lee Siew Choh: I do not know whether these documents here reveal that he has surrendered control or not. He was asked another question:

`Some people have said that it is Malaya that has made all the conditions and Singapore that has made most of the big concessions.'

Then the Prime Minister said:

"Well, I think we have made considerable concessions", he says.'

Considerable concessions! Now he recognises that:

`"We have been making concessions and concessions all the Time. I think the Federation would like us to make more concessions, you know, and give up control of finance and a few other things. But a contract has been made and Singapore understands this, If von sell rubber short, and the price goes up, well you miscalculated," he says. "We came to hard and fast arrangements. They now feel that they were a little bit too harsh on the financial arrangements, and so on. Well, they should have thought of these things.".'

The Prime Minister: Thank you.

Dr Lee Siew Choh: Firstly, the Prime Minister has admitted that Singapore has been making considerable concessions; all the time concessions which he never admitted until now. Secondly, he says that control of finance is basic. But the Finance Minister of the Federation has already said that control must go to the Federation. Who controls? According to the statement that we see tonight, the Government of Singapore has already surrendered control.

The Prime Minister: Rubbish!

Dr Goh Keng Swee: Where?

Dr Lee Siew Choh: Even the Minister for Finance himself has said so. I can show him if you want. He himself said ---

Mr Speaker: Order. The hon. Member has referred to the statement. Let us have the paragraph.

The Prime Minister: Yes, go on. [Interruption].

Dr Lee Siew Choh: I can even quote the page where Lee Kuan Yew was supposed to have played golf!

Mr Speaker: Order. I have asked the hon. Member for Queenstown to indicate the paragraph which he alleges states that the Singapore Government has surrendered control to the Federation Government. Let us have it.

Dr Lee Siew Choh: It is not in this statement. But ---

Dr Goh Keng Swee: Withdraw.

Mr Speaker: Order.

Dr Lee Siew Choh: The Minister for Finance himself said, "There is nothing wrong in surrendering control to the Federation."

Dr Goh Keng Swee: On a point of order, Sir. This is misrepresentation of what I said. I never said anything like that.

Mr Speaker: The Member for Queenstown must be careful about what he says. He is a responsible man. He is an honourable Member of this Assembly, and if he makes an allegation he must be able to prove that allegation.

Dr Lee Siew Choh: You see, Sir, I can find the page and the line and show you. But it just happens that I cannot lay my hands exactly or the spot now. If he denies it, I will bring the quote here and show it to you tomorrow because the Minister for Finance is quoted in the Straits Times to have said that he admitted control should go to the Federation. He even said.. "What's the difference of a few millions between friends?".

Dr Goh Keng Swee: Point of order, Sir.

Mr Speaker: Order. I think the Minister has already denied that.

Dr Lee Siew Choh: If he keeps on denying, then I suppose I will have to bring the quotation when the time comes. Then he will never be able to deny that any further. The main thing is this Sir: that at the present moment we have been told that we will have to pay and contribute to Pan-Malaysian services and an extra $50 million to the Borneo territories. We do not know what the final outcome will be.

The Prime Minister: We want to know on whose side you are.

Dr Lee Siew Choh: We are always on the side of the people.

The Prime Minister: Which people?

Mr Speaker: Order.

Dr Lee Siew Choh: Of course, the Prime Minister thinks that the people, in his case, are the people who control the guns in London and maybe in Kuala Lumpur. That is why he is so keen to increase Battalions in Singapore. Even clerks in the Ministry of Home Affairs have complained that the Government is using the police to interfere with the strikers today.

An hon. Member: No relevance.

Dr Lee Siew Choh: No relevance? But relevant enough in that there are lots of things which the P.A.P. has not yet told the people of Singapore. [Interruption].

Mr Speaker: Order. There again I have indicated to the Government Benches not to interpolate. We will never finish this motion tonight. The Member for Queenstown must now try to come to the point, be relevant, and address his remarks to the Speaker.

Dr Lee Siew Choh: Sir, the main thing about these negotiations is that it is no use trying to play politics by telling the people that the P.A.P. is fighting for their interests when, in fact, the whole of Singapore has already been sold down the river. We have repeatedly said, Sir, that negotiations of the finer points of financial arrangements mean only worrying about itches on the toes and fingers when, in fact, the head is already in the noose. The only way to serve the people of Singapore and to really fight for their interests, is to throw away the White Paper and once more go back to the people. Only then ---

Mr Speaker: Order. It now transpires that the Member for Queenstown is not interested in the progress of the financial talks. He is against this White Paper, and all his remarks really would be relevant if he moves a motion to rescind the resolution of the House which I have read, that is, the resolution of the House accepting these heads of agreement. Unless and until he does that. I cannot see how he can speak to this motion with any degree of conviction.

Dr Lee Siew Choh: There is a reference here to the Barisan Sosialis regarding what amount Singapore would be paying to the Federation if it was a case of complete merger. As far as the Barisan Sosialis is concerned, we want a genuine reunification with the Federation, not this present so-called partnership, with Singapore becoming an inferior and junior partner and Singapore citizens becoming second-class citizens. If it is a genuine reunification, we want real proportional representation ---

Mr Speaker: Order. The Member for Queenstown is doing exactly what I have said he cannot do unless he moves a motion to rescind the decision of this House accepting those heads of agreement. He is now speaking to that motion. He has not even filed that motion.

Dr Lee Siew Choh: I merely wanted to answer a couple of points since the Government has referred to us in this statement here. But I want to impress on this House that if any negotiations are to lead to success and be supported by the people of Singapore, then they must be negotiated on the basis of equality and justice. Only then will the Government get support from the people. Otherwise it is all a sham, and the P.A.P. will not be able to convince the people that the P.A.P. today is fighting for their interests.

The Prime Minister: Mr Speaker, Sir, I think we have been very forbearing, both with the mover of the motion and the Member for Queenstown, and I want to be brief and to the point. I agree with the motion moved by the Member for Cairnhill that we are concerned with the progress made in our financial discussions. We are concerned because all that was necessary, after we had agreed the main framework of the arrangements for merger, was to work out the apportionment. The words are contained in paragraph 17 of the White Paper. May I read it:

`The present machinery for the collection of taxes in Singapore will be retained.

The proceeds of the national taxes will be used to pay the cost of Government and Public Services in Singapore and the contribution to the Federal Government for Federal services. The details of the apportionment will be worked out by the Joint Working Party.'

All that remained to do since November 1961 was to work out the details of the apportionment, and we are concerned that it has taken us all this length of time to really get down to brass tacks.

In the exchange of letters I set out clearly what we envisaged in this apportionment. Finally - this was an exchange of letters dated 11th November - we have agreed that Singapore would keep more than three-quarters of her revenue for the discharge of her responsibilities on education, labour, social welfare, health and all the other matters set out as State or concurrent responsibilities in the schedule annexed to our memorandum and be entitled to 15 seats in the Central Parliament of the new Federation. Now, in our estimation then, in broad outline, being entitled to 15 seats on merger which was on very special conditions, we envisaged that we would keep more than three-quarters of our revenue, and that is still the position - unchanged.

Sir, it is not for me to comment on the tactics of an Opposition leader whose Party headquarters is in Kuala Lumpur. But I must thank him for the compliment he paid me in my absence on Friday, namely, that he wanted - in fact he was anxious for an occasion - to confront me. In other words, he, the agent of the principal in Kuala Lumpur, was going to confront me today, and I waited 45 minutes as he waffled on and on for that moment of confrontation. On whose side is he? He says he is on the side of the people of Singapore. What else could he say? If he were on the side of the people of Singapore, he should be prepared to stand up to his principals in Kuala Lumpur, as we have done, and say to them exactly where they get off. I know that in saying this, we become unpopular with people who will be in authority over Malaysia, which includes Singapore, after 31st August. There will have to be a settlement on fair and honourable terms based on the White Paper before the 31st. It will be tabled here in detail, and adopted after proper debate. We adjourned after our meeting in April in the hope that we would achieve agreement before the Deputy Prime Minister of the Federation went off on his tour of the United States and Britain, which tour was expected to take a month. Unfortunately, our plea for a meeting was construed as a sign of weakness. Therefore, for reasons which I thought to be in the interests of the people, I did not attend a particular meeting in Kuala Lumpur and chose to stay in Cameron Highlands with the Prime Minister of the Federation who was golfing with me.

Golf is a very necessary asset in Malaysia, and a lot of valuable and important information was imparted and analysed in the leisurely and sometimes enlightened and rarified atmosphere of the highlands. On many an occasion I thought perhaps if only Members on the other side played golf, they would not have made some of the colossal blunders that they had.

Sir, I wish to move an amendment to this motion, and the amendment is to add at the end "Paper Cmd. 33 of 1961" the words "and expresses its desire that there should be an early settlement fair and just to both sides on the basis of the terms of the White Paper which has been approved by this Assembly."

Amendment handed in.

Mr Speaker: "Paper Cmd. 33 of 1961" instead of "the White Paper"?

The Prime Minister: So be it, Mr Speaker.

Mr Speaker: The amendment is, at the end, to add -

"and expresses its desire that there should he an earls settlement fair and just to both sides on the basis of the terms of Paper Cmd. 33 of 1961 which was approved by this Assembly."

The Prime Minister: That is correct.

Mr Speaker: The amendment is in order.

The Prime Minister: Mr Speaker, Sir, may I stress the operative words "on the basis of the terms of Paper Cmd. 33 of 1961 which was approved by this Assembly"?

Sir, I do not wish to dwell at length on the tortuous course of negotiations. Clothed in the officialese language of financial negotiators was a plan by which we were, in fact, not only to lose all our surplus, but to be owing the Central Government money at the end of it. I refer to pages 1 and 2. We have moved away from that position, fortunately, not least because we decided to stand up and talk up, I think, with as much courtesy as the situation merits. There will have to be, if need be, more harsh words, but at the end of it, it is our duty to see that we produce to this House an agreement which is in accord with the principles of the merger which we approved in this Assembly and which we placed before the people. We debated it at great length and in great detail over a period of nearly a year. There was no misunderstanding as to the intent, nor as to the language that was used in these solemn documents. A departure from or an amendment in any respect to these documents can only be if it is on a quid pro quo basis.

Sir, I would not wish to prejudice the future course of our negotiations, but I would like a categorical assurance from Members on the other side that they are with us in this, because it helps. If the agents or parties whose headquarters are in Kuala Lumpur are with us, then obviously it will be easier to persuade the principals in Kuala Lumpur that it is unwise in the long run to try and alter terms which may in the end work to the detriment of the whole of Malaysia.

We are for a strong Central Government, and we believe that the most important element in making any government of the Federation strong is to command the loyalty of its subjects, in this case, the 1.7 million people of Singapore. They have been told for over a year, two years now, by people like the Member for Queenstown that they were sold down the drain, finished, enslaved by the Malays in the Federation, and that what really was wanted was complete merger. We fought them, because we believed that what we were doing was right. If conviction was lacking in what we were doing, we would have faltered before the cohorts that they were able to marshal. I promise this Assembly that we shall produce that document in which all that was agreed will be enshrined, and if there is any alteration, it must be on a quid pro quo basis.

The Member for Cairnhill says that we have been untruthful. Have we? Right at this moment we are asked to pay $50 million as a grant. From what? From our surpluses. How can we pay if we have not got the money? I am not going to say whether we are or we are not. At this moment I think it is impolite to reply in this Assembly. This debate has been triggered off by the tactics of the Member for Cairnhill. He raised the question. He wanted a statement. He put a motion down. Mr Speaker, Sir, he said that he wanted to confront me. Well, I am here to be confronted, and we never run away from any confrontation. We say this, you can bundle up Singapore on a military plate, hand it over by military government, as it, is the right of the British Government to do as a sovereign power. But, if it is to be with our consent, if we are expected to justify and defend this Constitution and work it, then we must believe that it is fair and just. If we are going to find our cream soaked up, then I say that at the end of three years, if none of the houses go up, none of the factories go up to give jobs, schools, education for the children, jobs for the growing boys, then you can have all the army you like in the world, but you cannot keep this place down. That is why we fight for it because we believe it is right that this place should expand. If it expands because of a common market on terms which do not destroy our entrepot trade, then it is our duty to share that prosperity - additional prosperity, not past prosperity; not a $50 million grant. "Grab", that was the word used by the Member for Cairnhill.

Sir, I have quite rightly kept the Federation Prime Minister out of my discussions on this for specific reasons, because I do not believe for one moment that it is either his intention or his desire to depart from what has been agreed. But I do believe that the M.C.A. in Kuala Lumpur, one of the principal associates of the Member for Cairnhill, played politics and they thought that this was a clever way in which they could fix Singapore.

In 1964 there will be elections. Everybody knows that. This Assembly will have run out. Between August 1963 and July 1964, if the funds dry up, then the election results can be fixed, like they were in Kelantan and Trengganu. You can dismantle the bridge halfway, pack it and bring it home; and the State Government can rusticate. But that was not what we agreed. What we are fighting for is not for a P.A.P. Government but for any government elected by the people of Singapore. Whoever wins that election next year will find in the kitty nearly $400 million which was not there when we took office. That money will not disappear between now and next year. Some will be expended - more houses, schools and community centres - but it will be there. The reason why the Member for Queenstown finds the ground cold - he keeps getting these fainting fits, and I was worried for him when he said that he was going to take a long time this evening - is that there is euphoria on the ground. Where is the wrath of the masses? [Interruption]

Dr Lee Siew Choh: You want to know?

The Prime Minister: The Member for Queenstown believes he would. Excellent. We will see.

Dr Lee Siew Choh: Have the elections now.

The Prime Minister: Mr Speaker, Sir, as I have said, this is a Government that does not seek any easy way out to prolong its life. This Assembly is evenly split with 25 Members on either side. It is within the power of the Opposition to bring this Government to a halt tonight, if they so will it. And the constitutional processes must work out to their logical conclusion. We are prepared for it.

Dr Lee Siew Choh: To face the electorate?

The Prime Minister: We are prepared for it. And there will be ---

Dr Lee Siew Choh: Go ahead.

The Prime Minister: Never the Member for Queenstown fear this. But if I were him, I would look beyond the 31st of August, into the wider unknown. We have done so. And I know that by doing this, we are tempting the gods. But I say, it is our duty to the people that we stand up to self- made Senators, and that they understand the mettle of Singapore, that whoever wants to govern Singapore must first understand the basic forces at work. And the first basic force is that the Member for Queenstown is just a little bit of ice on top of an iceberg, a little bit of fluff. It is the iceberg that we are concerned with. [Interruption] - No I have met the iceberg, and I have a healthy respect for it. They made very grave errors of miscalculation, misjudgment, for which no doubt they will pay bitterly. They blotted their copybook. But as for us, we are quite clear that in this piece of - may I in a small way call it brinkmanship - we all know that on the 27th of June a document must be signed at least on broad principles, or Malaysia cannot conic about on the 31st of August because the legislative processes do not allow time for it. Tun Razak is in Manila. He will be back on Friday. My colleague, the Minister for Finance, will have sent his reply before his return. He will be in Kuala Lumpur on Monday; I hope to be there on Tuesday. By the end of next week we may have to be in London. And I have said this publicly, not because we like to bare our chest on these matters, that in Singapore we are accustomed to living under high stresses and strains. And when Senators tell us that they intend to go on without Singapore, and hope thereby that we will succumb and our knees will buckle in, I think it is our duty to make it quite clear to them that, grave as the consequences may be for all of us, including ourselves as a Government and as a Party, rather than breach basic concord, we would face the awful consequences. For them, once again Pandora's Box is open. They may think Malaysia could be formed without Singapore. Maybe the Senators believe it. I wonder how it is to be defended without the bases in Singapore, which I have no doubt will vanish in a very short Time without Malaysia ---

Dr Lee Siew Choh: You will have to defend yourself.

The Prime Minister: Quite right. We intend to see that there is a power balance here. And we have no intention of allowing this country to be over-run by outside powers. And we are not Lackeys to foreign imperialist powers. We intend to stand up.

Dr Lee Siew Choh: And to keep the base, is it not? How foolish.

The Prime Minister: Play lackey, and echo to foreign powers? Foreign Ministers meeting in Manila. And here is the great anti-colonialist revolutionary, sending a telegram to foreign powers asking them to stop Malaysia on his behalf. He cannot stop it, Mr Speaker, Sir. He tried; he flopped. Now he wants others to stop it. However, enough of this. All I want from this Assembly now, and whether we get it or we do not really does not matter, because we know quite clearly in our minds what our responsibilities are - namely, that there must be an agreement which spells out in detail the principles which we have agreed If they want a percentage which was never agreed, which means a built-in increase, quite rightly as the Member for Queenstown pointed out - three ways: (1) by increase in consumption; (2) by increase in rates of taxation; (3) by increase in the spread of taxation over commodities as Malaysia industrialises, then I say there must be a quid pro quo, there must be common market terms which make it worth our while. Otherwise we go back to dollars and cents every year. After all, we have 15 seats out of 159 - taxation and representation go together. We said so. And therefore I ask the House, fully confident that whatever the inner compunctions of the Member for Cairnhill about what his principals will tell him, he will find it difficult to vote against this amendment to his motion. It is so eminently reasonable, Mr Speaker, Sir, that he would be put to great trouble to find a way out of this. In the interests of the people of Singapore, something that they voted for, something that the Member for Cairnhill voted for, I say, "Vote for it", and we will go back next week to Kuala Lumpur renewed, more stout-hearted, because we have got even the local branch of the Grand Alliance backing us. What more assurance of success? By the Time the agent is prepared to tell the principal he is wrong, surely we who are not agents have got a right to tell the principal that he has got to settle this on fair terms.

Mr Speaker: The original Question was,

"That this Assembly views with concern the progress made by the Singapore Government in its talks with the Federation of Malaya Government on the financial arrangements relating to Head 17 (Finance) of Paper Cmd. 33 of 1961."

Since which an amendment has been moved, at the end, to add ---

"and expresses its desire that there should be an early settlement fair and just to both sides on the basis of the terms of Paper Cmd. 33 of 1961 which was approved by this Assembly."

The Question is, "That the words proposed to be added, be there added."

Mr Ong Eng Guan (Hong Lim) rose ---

Mr Speaker: The Member for Hong Lim wishes to speak on the amendment?

Mr Ong Eng Guan: Mr Speaker, Sir, on a point of order. Is it possible to range from the motion to the amendment?

Mr Speaker: We will first deal with the amendment. If that is accepted, or otherwise, we will go back to the original motion.

Mr Ong Eng Guan: Mr Speaker, Sir, the motion before this House and the subsequent amendment are nothing but an exercise between the S.P.A. and' the P.A.P. to outmanoeuvre each other, win more support, and capture more of the Right-wing votes. Mr Speaker, Sir, that was all the exercise we had the whole of today from the Time the Committee of Supply closed its business. We are against the White Paper in principle. We know that all this talk about so-called financial autonomy is something like a farce. Therefore we would abstain on the amendment.

Mr Speaker, Sir, the P.A.P. has staged this drama of a fight for so-called autonomy in finance for reasons best known to itself. However, this drama is coming to a close although the final chapters are still not yet concluded. But the farce has been exposed and the plot to deceive the people unmasked, and the P.A.P. now lays bare with the naked truth exposed. It finds that it has been cornered and it must find a reasonable and honourable way out of its quandary. Sir, the P.A.P. Government took a very short Time to bring about its phoney sell-out merger.

Mr Speaker: Order. The Member is out of order on two counts. One is the reference to this merger as a phoney sell-out merger which has been agreed to, or the terms of which have been agreed to by this Assembly. He is out of order by using that expression. Secondly, I cannot see how that is relevant to the amendment.

Mr Ong Eng Guan: Mr Speaker, Sir, I am coming to the explanation that this amendment is only an attempt to hoodwink the people. By and by, I will explain the position.

Now, Sir, you will see from the White Paper that the broad principles of this so-called merger took such a short Time to draft out and formulate and which the P.A.P. Government accepted. We therefore cannot understand why it has taken so much time to finalise one small item amongst tens of items in the White Paper. We cannot understand what game the P.A.P. is playing when it has sold out more basic rights of the people of Singapore - for instance, the citizenship rights and our representation in the Central Malaysian Parliament.

Mr Speaker, Sir, the P.A.P. Government claims that it is fighting for us to obtain financial control, financial autonomy and that the delay in the progress of the talks is due to the stumbling block from the Federation side. Whatever it is, Sir, from what we know, the words "financial autonomy" were never mentioned at all during the referendum, and they were first quoted by the Prime Minister only in the Chinese Press during a visit to Bukit Panjang on Sunday, the 3rd March, 1963. Now, these words "financial autonomy" only appeared in the Chinese Press, but in the English Press and in official announcements in this House, we hear the words "financial talks", "financial arrangements", "negotiations on financial arrangements". In the Chinese Press, they appeared as "financial autonomy". We cannot understand the purpose of this double talk by the P.A.P. and we must clarify this to understand the motion. We know that the Chinese Press is read by most of the voters, three-quarters of whom are Chinese, and it is believed that most of the leaders of the Alliance Government read only the English Press. Mr Speaker, Sir, in the Nanyang Siang Pan on 4th March, 1963, there were headings in the paper which read - may I translate:

`Prime Minister Lee makes speech in welcome party at Mandai. "After merger, this State of Singapore will have autonomy in finance. Therefore, we have only 15 seats in the Central Parliament although Sabah and Sarawak together have 40 seats. But finance comes under the control of the Central Government."'

Sir, this theme of financial autonomy was played up by the Chinese Press every Time the Prime Minister visited the rural constituencies, but it never appeared in the English Press. When he speaks in Mandarin and Hokkien, he speaks of financial autonomy. But when he speaks in other languages, we never hear of financial autonomy but just financial arrangements and financial negotiations. But, Sir, the people cannot be easily deceived. They know that all this talk of financial autonomy is a bluff. The White Paper has stated clearly and plainly under Item 7 of the Annexure that out of the thirteen powers relating to finance, eleven are completely under Federal control and two items are concurrent powers which mean nothing much to Singapore. Sir, where is the autonomy in finance? That is why we cannot understand the delay in the talks on finance. Under the White Paper, the control of financial and monetary policies has been given almost completely to the Federation Government. We cannot understand what is the meaning Of financial autonomy. Now, if financial autonomy means not the control of policies, which basic right the P.A.P. Government has sold to the Federation Government, but a difference of pounds, shillings and pence, of dollars and cents, then I wish to remind the Minister for Finance of a speech he made at the Singapore Airport on 16th April, 1963, contained in the Sin Chew lit Poh. The Minister for Finance, returning after a meeting in Kuala Lumpur, said, "Between friendly states what is a few million dollars?" Sir, if that is the genuine difference between the Minister for Finance and the Federation Government, then we do not understand why there should be delay in the talks, unless it is meant for the purpose of electioneering, for capturing votes and for outmanoeuvring the S.P.A. Alliance in winning the votes of the bankers, the insurance companies, the big bosses in town, the colonial merchants and firms and industrialists.

Sir, the statement made today by the Prime Minister said that there had been no agreement or that the Singapore and the Federation Governments could reach no agreement on two matters; firstly, the apportionment of expenditure and the quantum of Singapore's contribution for Federal expenditure; and secondly, responsibility for collection of national taxes in Singapore after merger.

Now this was the position on the 28th of February, 1963, and is the position, as far as I know, now. If that is the position, then the Prime Minister must have been guilty of deceiving the people, because a few days after that, during his visit to Bukit Panjang constituency, he said this and it was in the Sin Chew Jit Poh of 4th March, 1963. He said on and again in many of his speeches on that day, which was only three days after the First Session of the Inter-Governmental Committee, that the Federation Government had agreed after the establishment of Malaysia that Singapore would collect its own taxes. Other than fairly and reasonably allocating a part to the Central Government for defence, external affairs and internal security, the balance would remain under the control of Singapore. If you will excuse me, Mr Speaker, Sir, I repeat the words in Chinese which he said himself, "Ta mah chern lee ho lian her pang chern pooh ee tong yee."

Mr Speaker: Order. I do not know what the object of that is, because that will not appear in the Official Report.

Mr Ong Eng Guan: Mr Speaker, Sir, if the Minister or the Government later decides to challenge my translation, then I will read it out in Chinese. On the same day, he said, "If our finance is controlled by the Federation, we must listen to them. The White Paper has stated clearly that we run our own finance; each year we give a quarter of our revenue to the Federation Government so that they can run external affairs, defence, etc."

Mr Speaker, Sir, either the statement given to the House by the Prime Minister contains errors in facts, or the speech made by the Prime Minister at Bukit Panjang on the 3rd of March, 1963, was deceiving, because, according to the statement today, no decision had been reached at that Time either on the responsibility for the collection of taxes or on the apportionment of expenditure and the quantum of Singapore's contribution for Federal expenditure. Sir, this is another example of the P.A.P.'s double talk. Who can trust the P.A.P. Government any longer? So, now the P.A.P., having played out this episode of so-called autonomy in finance, found itself in a quandary and the whole thing has boomeranged against it. It has already gone back to the Federation compromised on the issue, and in order to cover up its sins, it has tried to deceive us by another method by saying that it has reached agreement in principle with the Federation Government on this so-called common market.

Now, unless and until the P.A.P. Government announce the details of the common market, which they say have been agreed in principle, we are not sure whether it is another sell-out of the P.A.P. Government. Mr Speaker, Sir, as I have said at the beginning of the speech, today's exercise in pushing item 20 from the bottom of the agenda paper to the top is nothing but a test of intellectual capacity between the S.P.A. leaders and the P.A.P. leaders and to see who will come out best from this exercise. Therefore, on this motion and on the amendment, we will abstain because in principle we oppose the White Paper.

Mr Speaker: Tun Lim, on the amendment.

Tun Lim Yew Hock: Mr Speaker, Sir, one can excuse the Member for Hong Lim for feeling that there is a game being played by the P.A.P. and the S.P.A. on this vital national issue concerning the lives of the people of Singapore. I can understand why he takes that line. It is because the Prime Minister in his speech tried also to play a game of politics with us. He asks, what kind of tactics am I indulging in? He thinks that by amending the motion he has got me where he wants me. Let me assure him in this House that the motion I put in is aimed at telling him that the way he has been going about things is wrong and has caused concern. He wants us now to give him added strength in his negotiations with the Federation Government. Let me at the outset say this to him. The interests of the people of Singapore come first, and so long as the Government is guided by that principle in its negotiations with the Federation Government, we are with it and to that extent we accept its amendment. But what we resent and resent strongly is the way he tries to sneer at us. He tries to point out that we are the agents of our principal in Kuala Lumpur. What is he trying to say? We in Singapore are autonomous insofar as the interests of the people of Singapore are concerned, but where it concerns the whole of Malaysia, it will he the policy of the Grand Alliance.

From the tone of the speech of the Prime Minister, it would seem that he would feel very happy and strengthened in his resolve if we would give him support on this amendment. It is just like a confession that he has been having heavy weather and that heavy weather was as a result of the way he went about these negotiations. If he had gone on the right lines talking to the Federation Government in a sober and dignified manner, all this would not have come up in public and there need not have to he this motion before the House this evening. But no, he wants to play politics P.A.P. style.

While supporting him on that amendment, we want the Government to understand this, that we do not support the Prime Minister in his antics in the Press nor in his antics during his visits to the rural constituencies. We want him to be a sober-minded responsible Prime Minister going to Kuala Lumpur to discuss the terms of the financial arrangements in a manner that is befitting the Prime Minister of the State of Singapore. We hope that in giving this moral strength to him, as we have been giving moral strength to the P.A.P. even before the P.A.P. came to power, if we can inject into the Government some moral strength to enable them to present the case of the people of Singapore more effectively, we are always prepared to do so. I must repeat, Sir, that the Prime Minister must not make use of our support to indulge in a political game. He must play it fair and square, otherwise he will have to give an account to us in this Assembly.

Sir, the Prime Minister was carried away in his speech just now and he retorted to an interjection by the Member for Queenstown. This is what he said, "It is within the power of the Opposition to bring the Government down." Sure it is within the power of the Opposition, but as is typical of the P.A.P., the P.A.P. would not pair off with the Member for Bras Basah who is indisposed. I would then ask the Prime Minister if he really means business - give a pairing off to the Member for Bras Basah and let us see whether the Prime Minister will stand up to his brave words in this Assembly.

Sir, the reason why we give this support to the amendment is that we feel that the interest of the people of Singapore must come first. But we are, I must confess, very concerned that this support which we solemnly give them in this House would be manoeuvred by them for their own ends. The Prime Minister is capable of this. Even in this House, where truth must he said, the Prime Minister said this in reply to what I said earlier in my speech, that the Prime Minister did not attend a meeting of the Inter-Governmental Committee because he played golf and said that he was too tired. And the clever propagandist in the Prime Minister came up saying that at one particular Time he considered it to be k the interest of the people that he did not attend the meeting in Kuala Lumpur and chose to stay in Cameron Highlands golfing with the Prime Minister. Look at that. The people who know the true situation can nail him in his distortion. The day he was in Cameron Highlands, so was I. He did not attend the meeting in Kuala Lumpur when the Finance Minister did, because he agreed with the Prime Minister of the Federation of Malaya that no useful purpose could be served for a meeting to be held. He tried to say that he did not attend because it was in the interest of the people of Singapore, and so he went out golfing. What kind of distortion is he trying to indulge in in this House? Let us not play that kind of a game. I would urge the Prime Minister and the Government always to remember this, in this solemn hour, with 31st August just around the corner - play the game straight, play the game clean, play the game without trying to gain political credit for the general elections that will take place next year. If they will just do that, they will have us with them in all their discussions with the Federation Government. This is typical of the culture of the P.A.P., that they want our support and yet they ridicule us. They say we are the agents, we always dance to the crack of the principals. But let me tell them here - repeat this here - that as far as Singapore politics is concerned, we are free to look after the people of Singapore in the context of Malaysia, and if the P.A.P. Government is having difficulty in its negotiations with the Federation Government as a result of the .way it has been handling these negotiations, and now wants support and moral strength from us, we are prepared to give it in the interest of the people of Singapore. But we must repeat our warning again. Play it clean, play it straight and play it in the best interest of the people of Singapore.

Mr Speaker: Dr Lee, on the amendment?

Dr Lee Siew Choh: On the amendment. The Prime Minister plays very tough these days. He wants to give an appearance to the people of Singapore that he is really holding on, fighting for the interest of the people of Singapore. But who does not know that the P.A.P. has always been fighting for personal and selfish interest? The Prime Minister has referred to my telegram to the Foreign Ministers' conference at Manila. He says, "Of course, we cannot stop Malaysia." But the point is this, the P.A.P. today plays tough for one special reason. It is not because the P.A.P. Ministers really have the interest of the people at heart, but because they know that there are hitches in the formation of Malaysia. The fact that the Tunku had to go to Tokyo and that there are Ministers now in Manila show that there are a lot of hitches. The newspapers have already suggested that there is every possibility, and a very strong possibility too, that Malaysia cannot be formed in time.

Mr Speaker: Order. The Member for Queenstown is making another speech on the main motion. We are now on the amendment asking the House to express its desire that there should be an early settlement, fair and just to both sides, on the basis of the terms of Paper Cmd. 33 of 1961. The Member cannot make another speech on the main motion.

Dr Lee Siew Choh: Sir, why is the Prime Minister taking such a tough line? He does this hoping to give the impression to the people of Singapore that because of the P.A.P., Malaysia may have to be postponed.

Mr Speaker: Order. I must rule the Member out. He must speak on the amendment. He has had his chance to speak on the motion, and he is now speaking on the motion. He must speak on the amendment if he wishes to speak again.

No other Member wishes to speak on the amendment?

Question, "That the words proposed to be added, he there added," put, and agreed to.

Original Question, as amended, again proposed.

Dr Thio Chan Bee: Mr Speaker, Sir, I will try to be brief. There are, it seems to me, two very strong impressions that persist in the minds of the people of Singapore. I am sorry that the Prime Minister is not here, but I hope the Finance Minister will give the answers.

Sir, the question of dates is important. On Saturday, 13th April, when the Prime Minister told the Press that there was a merger crisis and that anything could happen, could the Finance Minister please enlighten us on these two points?

Firstly, whether on that date agreement had already been reached that surpluses accumulated in Singapore before 31st August, 1963, would not be touched by the Federation? Sir, this is important because the impression gained by the people in Singapore arising from Press reports was that the Federation was going to raid the pre-Malaysia surpluses which have been accumulated by the Singapore Government for development purposes.

The second wrong impression, it seems to me, is that on that date when the Prime Minister made his Press statement, the Federation Government was still trying to get agreement with Singapore that they should control the Federal revenue collected in Singapore and keep it in Kuala Lumpur.

Sir, these two impressions are very important because unless they are clarified they will cause a great deal of misunderstanding. When we heard of these impressions, we realised that, as a Party that stands for the people of Singapore, it would be difficult for us to agree to this sort of thing. Therefore, some of us went to Kuala Lumpur to seek personal clarification. There we were told on 28th April, I think ---

Mr Rajaratnam: By whom?

Dr Thio Chan Bee: --- that there had already been agreement that the surpluses accumulated in Singapore before 31st August, 1963, would not be interfered with by the Federation, and that if there was any impression that had been given to the people of Singapore to the contrary, then that impression was wrong. Further, the national revenue collected in Singapore and reported to be deposited in Kuala Lumpur would be deposited in a neutral pool in Singapore. Sir, if what we learnt in Kuala Lumpur was correct, then somehow or other the impressions given through the newspapers in Singapore to the people of Singapore were wrong.

Sir, I am now quoting from the Straits Times of Tuesday, 16th April, 1963 - on page 1, col. 1: Here is the text of Tun Razak's statement:

"As Chairman of the Inter-Governmental Committee on Merger of Singapore with the Federation of Malaya, I have kept quiet for the last two days because it has been the agreed practice that at the end of a conference we issue a joint statement agreed by both parties and neither side makes any further statement to the Press. However, since the Prime Minister of Singapore had made a number of statements in the Press which were not quite accurate, I feel it is my duty to put things right in order to avoid any wrong impression of what took place at the Inter-Governmental Committee talks."'

Then he went on further:

"The Singapore Government, in an official statement, has now practically accused the Federation Minister of Finance, which means in effect the Federation Government, of trying to go back on the Singapore White Paper. This is completely untrue, and it is not the practice of the Federation Government to go back on its word, written or unwritten."'

Then he went on:

`"I regret very much the attitude taken by Mr Lee. I do not know what is his aim. The talks have been delayed because of this," Tun Razak said.'

Sir, we ourselves were surprised that in the midst of negotiations the Prime Minister should have come out with A Press statement causing people to be unhappy. On a bigger issue than this, that is, over confrontation between Indonesia and Malaysia, which could have led to a world conflagration, we are glad that there has now come about a spirit of good-will and reconciliation in Tokyo. The people of Singapore and in this part of the world ---

Mr Speaker: Order. The hon. Member now seems to be far away from the motion. The motion is not a motion criticising the action of the Prime Minister or the Minister for Finance or their dealings with the Federation Government. The motion deals with the progress made. Let us see whether the Member speaking agrees that the Assembly should view with concern the progress made - with the addition of the amendment, of course - and expresses the desire that there should be an early settlement.

Dr Thio Chan Bee: Sir, it is because I feel the people in this part of the world are so eager that there should be less confrontation and more progress towards co-operation that we urge the Prime Minister to have less Press statements making agreement more difficult.

Mr Speaker: Order. May I suggest to the Member for Tanglin that he file a motion criticising the Prime Minister in his dealings with the Press and the public?

Dr Thio Chan Bee: Mr Speaker, Sir, fortunately, in one of his concluding paragraphs in his financial statement, the Finance Minister said:

`We are likely to prosper in Malaysia and it is only right that the additional prosperity brought about by Malaysia should be made available to the under-developed parts of Malaysia.'

Then he went on in the next paragraph, Sir:

`It will be wrong.to adopt a selfish and grasping policy after Malaysia and try to hog the whole prosperity for ourselves. This will bring resentment in other States of Malaysia and in the end this will rebound to our disadvantage.'

This applies to surpluses after 31st August, 1963, I believe, Sir, because it says here about prosperity after Malaysia. But what we would like to have clarified, Sir, on the date quoted 13th April, was it a fact or not a fact that there had already been agreement that the surpluses accumulated before Malaysia would not be touched by the Federation?

Mr Speaker: It seems to be irrelevant, but if the Minister for Finance wishes to answer, he can do so.

Dr Goh Keng Swee: Mr Speaker, Sir, at this late time of the night after a very busy day at the office, I may be excused if I find some difficulty in giving all the details asked for by the Member for Tanglin.

He wants to know, if I understood him right, whether on Saturday, 13th April, there had been agreement between the two Governments that surpluses accumulated before ---

Dr Thio Chan Bee: 31st August, 1963.

Dr Goh Keng Swee: --- surpluses accumulated before merger day would not be taken over by the Federation Government. The answer is that this point never arose at all. The point is completely irrelevant. I remember seeing something like this in the newspaper, but the point is completely irrelevant, because if it means that they will share our accumulated surpluses, then it means that we have to pay out of our reserves. That was never discussed, never thought of, either by the Federation Government or our Government. But if the Member for Tanglin will look at page 5 of the statement made by the Prime Minister, in fact the last line says:

`Singapore retains half her surplus, based on 1961 calculations, instead of surrendering the whole.'

That was the proposition discussed at the Inter-Governmental Committee on the 10th and 11th of April.

Dr Thio Chan Bee: Subsequent surpluses.

Dr Goh Keng Swee: Yes, in other words, they wanted subsequent surpluses. No, no, that is not correct. It is a curious method of calculation. I think I shall find great difficulty in using words to get across the approach of the Federation Government. I shall try my best to explain. It is a very complicated idea.

Mr Speaker: Is it necessary?

Dr Goh Keng Swee: I think the Member for Tanglin is rather looking forward to it.

Mr Speaker: Order. Is it necessary in this context? I am just wondering whether it is really relevant. If it is not relevant to this motion, then I suggest the Minister send a memorandum to the Member for Tanglin.

Dr Goh Keng Swee: It is not really necessary. The second question is that he understood the Federation Government to have agreed [pause] ---

Mr Speaker: Order. The Minister may take his seat. Perhaps the Member for Tanglin would like to repeat his question.

Dr Thio Chan Bee: The second impression gaining ground was that Federal taxes collected in Singapore would be kept in Kuala Lumpur, whereas apparently on the date of the Press statement, the agreement had already been that such taxes would be collected and kept in a neutral pool in the central bank in Singapore and not in Kuala Lumpur. Was that correct?

Mr Speaker: Page 3 of the statement gives the reply.

Dr Goh Keng Swee: That is correct. But that is not the main point at issue at all. The main point at issue is who is to control the Revenue Department? We say Singapore controls the Revenue Department, and they say no. And at that Time there was still a dispute on that point.

Mrs Seow Peck Leng (Mountbatten): Mr Speaker, Sir, I did not intend to speak on this subject, but I felt that I must not allow a statement made by the Member for Queenstown to go unchallenged. Referring to the terms of merger, he said it is a matter of a cheap sale, but we, the S.P.A., had to support it because of our relations with the Federation Alliance. He went so far as to say that the Member for Cairnhill had said this. Now this is untrue. I would like to put it on record that this is untrue, because we have always said that we support the terms of the White Paper because we felt that the P.A.P. was not able to get better terms and that we the Alliance, when we come to power, would be able to get better terms. Accept the crumbs now and fight for the loaf later on. That has always been our motive. And to say that the Member for Cairnhill had told him it was because of our relations with the Federation Alliance that we were forced to accept a cheap sale merger is completely untrue.

Dr Lee Siew Choh: On a point of elucidation, Sir.

Mrs Seow Peck Leng resumed her seat.

Dr Lee Siew Choh: The Member for Cairnhill told the Member for Upper Serangoon exactly what I said.

Mrs Seow Peck Leng: Mr Speaker, Sir, I can assure him the Member for Upper Serangoon misunderstood. I am quite sure. I am sure that even the Prime Minister today must be very surprised that we are accepting the amended motion. But, for his information, Sir, it has always been our firm stand that we are on the side of the people of Singapore and their welfare is our first concern. As a matter of fact, that was what inspired us to send our representation to Kuala Lumpur - the representation mentioned by the Member for Cairnhill. We actually made the decision that if the P.A.P. - P.A.P. or no P.A.P. - is on the right track fighting for the good and the welfare of the people, we would be on their side. But today, Sir, things are a little different. We have found out that it is because the whole thing has boomeranged on them. Because all their clever tactics of playing politics and calling names and so on for electioneering purposes on an important national matter like this have boomeranged on them, they now come to us and deceive or grab rather - I think it is right to use the word "grab" - the opportunity of this motion to amend it so that they will get our support and go back to Kuala Lumpur, as they put it, with the added figure. In spite of knowing that, Sir, but because it is for the good of the people that the Malaysia talks are finalised and completed, we will still support the motion, but we hope they will not play too much politics and exploit the situation.

Mr Speaker: No other Member wishing to speak?

Original Question, as amended, put. "That this Assembly views with concern the progress made by the Singapore Government in its talks with the Federation of Malaya Government on the financial arrangements relating to Head 17 (Finance) of Paper Cmd. 33 of 1961 and expresses its desire that there should be an early settlement fair and just to both sides on the basis of the terms of Paper Cmd. 33 of 1961 which was approved by this Assembly."

An hon. Member: Division.

The House divided: Ayes, 27; Noes, 13; Abstentions, 2; Absent, 8. Ayes. Noes. Buang bin Bani, S. T. Omar Junid Chan Sun Wing. Byrne, K. M. Fung Yin Ching. Chan Chee Seng. Miss. Chan Choy Siong. Lee Siew Choh. Madam. Leong Keng Seng. Chor Yeok Eng. Lin You Eng. Goh Chew Chua. Low Por Tuck. Goh Keng Swee. Ong Chang Sam. Lee Khoon Choy. Sheng Nam Chin. Lee Teck Him. Tan Cheng Tong. Lim Cheng Lock. Tee Kim Leng. Lim Yew Hock. Teo Hock Guan. Lingam, S. V. Wong Soon Fong. Mammen, John. Mohd. Ariff bin Suradi. M. Ismail Rahim. Ong Pang Boon. Rajah, A. P. Rajaratnam, S. Ramaswamy, S. Ayes-continued. Absent. Sahorah binte Hoe Puay Choo, Ahmat, Madam. Madam. Seow Peck Leng, Kandasamy, G. Mrs Koh, C. H. Tan Kia Gan. Lee Kuan Yew. Thio Chan Bee. Marshall, David. Toh Chin Chye. Mohd. Ali bin Wee Toon Boon. Alwi. Yaacob bin Ng Teng Kian. Mohammed Al-Haji. Ong Eng Guan. Ong Eng Guan. Yong Nyuk Lin. Abstentions. Abdul Hamid bin Haji Jumat. Ahmad Jabri Bin Mohammad Akib.

Motion, as amended, accordingly agreed to.

Resolved,

That this Assembly views with concern the progress made by the Singapore Government in its talks with the Federation of Malaya Government on the financial arrangements relating to Head 17 (Finance) of Paper Cmd. 33 of 1961 and expresses its desire that there should be an early settlement fair and just to both sides on the basis of the terms of Paper Cmd. 33 of 1961 which was approved by this Assembly.