ISSUE OF TREASURY BILLS

7.31 p.m.

Mr Byrne (for the Minister for Finance): Mr Speaker. Sir, I have His Excellency the Yang di-Pertuan Negara's recommendation for this motion to be proceeded with. Sir, I beg to move,

That this Assembly resolves, in accordance with section 2 of the Local Treasury Bills Ordinance (Chapter 69) that the Minister be authorised to borrow, by the issue of Treasury Bills in the State, sums not exceeding Malayan $150,000,000 (Malayan Dollars One Hundred and Fifty Millions) in amount.

Sir, under the provisions of section 2 of the Local Treasury Bills Ordinance the Minister is authorised to borrow, by the issue of Treasury Bills in the State, up to an amount of $40 million under a resolution made by the then Legislative Council on 13th July. 1948. That limit has now been reached and it is sought to increase that limit to $150 million.

Treasury Bills of 91 days' maturity are issued on tap to statutory bodies as and when required and are also offered to the public every month on tender. Tap Bills now carry four per cent interest per annum and Tender Bills average 4.1 per cent interest per annum. The amounts outstanding on the issues are: Tap Bills $32.8 million, Tender Bills $17 million, bringing the total to $49.8 million.

In the past year the monthly tenders have been well subscribed. In the last three months Tender Bills offered to the public have been $6 million every month. Tap Bills totalling about $9 million each time have been received. Surplus funds from the statutory bodies can still absorb a large quantity of Tap Treasury Bills. It is therefore necessary that a sufficiently large quantity of Treasury Bills should be made available to the public and the statutory bodies.

It is Government's intention to establish a short-term money market in Singapore. There is evidence that one or two discount houses, or short-term money market dealers, are coming into operation. The dealers should be provided with an ample supply of Treasury Bills which will be their main stock-in-trade. There is a large quantity of surplus funds locally which are available for investment for short periods, and if suitable outlets are found in Singapore to absorb such funds, temporary surplus monies will be remitted overseas for investment. The new limit will improve the Treasury's ability to borrow on the local market and, at the same time, provide opportunities for the investment of surplus monies not immediately required

Sir, I beg to move.

Question proposed.

Mr A. P. Rajah (Farrer Park): Mr Speaker, Sir, I rise to get a clarification on this. You will remember that yesterday the acting Minster for Finance, in, reply to a question, indicated five loans amounting to $247 million-odd, and of that I think the sum of $50 million was under this Local Treasury Bills Ordinance, is chat correct, Mr Minister?

Mr Byrne indicated dissent.

Mr Rajah: Now, if the Assembly gives approval to this 5150 million loan under this Ordinance, does it mean that the Government - assuming that $50 million has already been approved - could, at all times throughout all the years until a resolution has been brought in again, continue to operate to $200 million under this Local Treasury Bills Ordinance?

Mr Speaker: Is there any other Member who wishes to speak?

Dr Lee Siew Choh: I too want to seek some clarification from the Minister, Sir. We happen to know that the Prime Minister has promised to give a loan of $150 million to the Borneo territories. I do not know what relationship this motion has with that loan - whether this money is meant to be borrowed from the public in Singapore in order to be loaned to the Borneo territories or what. We want to know what use this money will be put to.

Mr Speaker: No other Member wishes to speak? Mr Byrne, in reply.

Mr Byrne: Mr Speaker, Sir, as I have already indicated earlier, it is Government's intention to borrow money on short-term loans - Treasury Bills which have a maturity of 91 days. There are two types of Bills; Tap Bills in which the local authorities invest, and Tender Bills which are open to the public for subscription.

Mr Speaker, Sir, I believe that since the resolution that I have referred to just now was passed on 13th July, 1948, sums amounting to $39.8 million have been raised by public subscription and it is our intention to increase that limit by this motion to a total sum of $150 million.

Question put.

Dr Lee Siew Choh: Division, Sir.

The House divided: Ayes, 23; Noes, 23; Paired, 4. Ayes. Noes. Buang bin Abdul Hamid bin Omar Junid. Haji Jumat. Byrne, K. M. Ahmad Jabri bin Chan Chee Seng. Mohammad Akib. Chan Choy Siong, Bani, S. T. Madam. Chan Sun Wing. Chor Yeok Eng. Fung Yin Ching, Miss. Goh Chew Chua. Hoe Puay Choo, Madam. Kandasamy, G. Koh, C. H. Lee Khoon Choy. Lee Siew Choh. Lee Teck Him. Leong Keng Seng. Lim Cheng Lock. Lim Yew Hock. Lingam, S. V. Lin You Eng. Mammen, John. Mohd. Ariff bin Suradi. Ayes-contd. Noes-contd. M. Ismail Rahim. Low Por Tuck. Ong Pang Boon. Marshall, David. Rajaratnam, S. Ng Teng Kian. Ramaswamy, S. Ong Chang Sam. Sahorah binte Ahmat, Ong Eng Guan. Madam. Tan Kia Gan. Seow Peck Leng, Mrs. Toh Chin Chye. Sheng Nam Chin. Wee Toon Boon. Tan Cheng Tong. Yaacob bin Mohamed Tee Kim Leng. Al-Haj. Yong Nyuk Lin. Teo Hock Guan. Thio Chan Bee. Wong Soon Fong. Paired. Goh Keng Swee. Lee Kuan Yew. Mohd. Ali bin Alwi. Rajah, A. P.

Mr Speaker: The votes being equal, the Question passes in the negative.