TREASURY BILLS

4.53 p.m.

The Minister for Finance (Dr Goh Keng Swee): Sir, I beg to move the motion standing in my name*.

• The motion reads as follows: -

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.

Under the provisions of section 2 of the Local Treasury Bills Ordinance, the Government have been borrowing by the issue of Treasury Bills in the State up to the amount of $40 million by resolution made in the Legislative Council on 13th July, 1948. The limit is now being reached in this, and it is sought to increase the limit to $150,000,000.

On 25th July this year, similar approval was sought in the last Assembly, but was not obtained, the votes being equal.

The Barisan Sosialis who opposed the motion were under the curious notion that the motion was related to loans for the development of Sabah and Sarawak. There is, in fact, no connection whatsoever.

Treasury Bills of 91 days' maturity were issued on tap to statutory bodies as and when required, and are offered to the public every month on tender. Tap bills carry 4 per cent interest per year, tender bills average 4.1 per cent interest per year. The amounts outstanding on these issues are: Tap bills $22.8 million, and Tender bills $17 million.

It is the Government's intention to encourage the growth of 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. These dealers should be provided with an ample supply of Treasury Bills which should be the main stock in trade.

There is also a large quantity locally of surplus funds which are available for investments for short periods. Unless suitable outlets are found in Singapore to absorb such funds, these monies may be remitted overseas for investment.

The new limit, which has the approval of the Central Bank of the Federation, under Article 49 of the Malaysian Act will improve the Treasury's ability to borrow in the local market and to provide at the same time opportunities for investment of surplus monies not immediately required.

Sir, I beg to move.

4.55 p.m.

[Mr Speaker in the Chair]

Question put, and agreed to.

Resolved,

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.