ANNUAL BUDGET STATEMENT

Order read for resumption of debate on Question [2nd November, 1964], "That the Assembly approves the financial policy of the Government for the year 1965.". - [The Minister for Finance]

Question again proposed.

2.52 p.m.

Mr Speaker: For the convenience of Members, I wish to make one or two observations so that the debate might be assisted and proceed without much difficulty. I should like to inform Members that they will confine their debate to the general principles of Government policy and administration as set forth by the Minister for Finance in moving the motion and as indicated in the main Estimates. Any detailed discussion of the Estimates will take place tomorrow and the day after that. Today, Members will please confine themselves to the general principles of Government policy and administration. For the benefit of the Members of the Opposition, I draw their attention to Standing Order No. 82, paragraph (4) which reads:

'Thirty minutes before the end of the time permitted on the allotted day, the Speaker shall, if the debate shall not previously have been concluded, call upon the Minister who moved the motion to reply.'

So Members of the Opposition will so adjust their speeches that they will give the Floor to the Minister for Finance at 7.30 p.m.

Mr Chia Thye Poh (Jurong): (In Mandarin): Mr Speaker, Sir, the Minister for Finance has already given his Budget Statement in this House. No matter how much stress he has laid upon economy, the fact is that his Budget Statement is invariably made in accordance with the desire of the Party in power to deal with the present situation. This is a point known to anybody who has some common sense in politics. This statement is used as a means of publicity whereby those things in which the Government can take pride are highlighted in the speech. Those things that are annoying or are not so glorious will be mentioned less and less, or even not mentioned at all. Therefore, in the past, such talk about the increase in the national income, the rate of progress, prosperity and so on, has taken up a lot of space in the speech of the Minister for Finance. But the statement this year shows that his tone is beginning to change. Although he has made a great effort to say that there is still economic stability in the State, he has to admit, whether he likes it or not, that the P.A.P. Government has to meet for the first time a deficit. The so-called $15 million surplus is no longer in existence. It is time for the Government, as it says, to think carefully.

Mr Speaker, those who have talked so well of Malaysia have tried their best to describe it as a small New York; that Malaysia is successful and so on. Just as a mirror reflects the true image of things, let us look at the facts. There is a great deal of misery among the people. It is impossible for the Party in power to cover up the ugly facts.

Mr Speaker, I now wish to talk about the effects of confrontation on our economy. Singapore has all along depended on the entrepot trade economically. As a result of the Indonesian confrontation, there are great repercussions, according to the Minister himself. The Indonesian confrontation is, however, not 100 per cent successful. There are still a lot of raw materials coming from a third country into Singapore. That accounts for the not so great decline in our trade. The so-called not 100 per cent successful confrontation, in spite of what the Minister says, has brought great losses in our trade. According to his figures. for the first half-year, there was a decline of 31 per cent in our export trade. In respect of imports, the decline was 23 per cent. In the meantime, about 4,000 people are out of job. The Minister has also said that the increase in banking and building construction activities has, to some extent, reduced the effect of Indonesian confrontation. We do not wish to over-estimate the effects of the Indonesian confrontation. But we have to face it all the same.

The Minister for Finance, in spite of what he says, has not been able to sketch to us the full extent of the Indonesian confrontation affecting our economy. I will tell him that directly or indirectly the effect of it is very great on the trade and livelihood of the people. Under normal circumstances, trade should increase instead of decrease. But now the fact is that our trade is on the decline. The Minister tries to say that the decline is only to the extent of 23 per cent in respect of imports and 31 per cent in respect of exports. He says that only about 4,000 persons are out of job as a result of confrontation, but this figure only includes those directly affected by the confrontation. This figure does not include those who have been indirectly affected. The Minister should know that, at the present moment, shops at large have not been doing so well in their business. Hawkers and retailers are suffering from a trade recession. Their income has decreased considerably. Why is it that the Minister has made no mention of these facts? He himself says that there are some trades which have been affected by confrontation, such as the entertainment business and so on. If the people have to worry about their meals, do you think they can afford to worry about entertainment? At night the shops in the amusement parks are not doing any business at all. So under-employment and under-nutrition have put a lot of poor people and small traders in difficulties. So faced with the difficulties and disasters brought about by the Indonesian confrontation, it is useless to try to put the blame of our failure on Indonesia and try to find a scapegoat.

The pro-Malaysian Parties are duty bound to solve these problems. Before the problem of Malaysia is solved politically, the Government should find ways and means to assist the lightermen and others who are directly or indirectly affected by this stoppage of barter trade and other trades. Those businessmen engaged in the barter trade should be given assistance. But the Government has not tried to shoulder part of the responsibility. At the present moment, it is trying to depend too much on the building construction trade to try to cancel off some of the effects of confrontation. But there will come a time when the building construction trade will reach saturation point: then there will be thousands of workers engaged in this trade who will be thrown out of work.

The important point is that our present economic difficulties should be solved basically. The economic solution is closely connected with the political solution of the Malaysian dispute. Without the support and sympathy of the Afro-Asian countries, and without the sustained support of the people, Malaysia will not be able to stay in existence for a long time.

Mr Speaker, I wish to go on to the question of industrialisation and the common market. The P.A.P. Government at present is attaching great importance to the success of industrialisation in order to try to solve the mounting unemployment problem, and to make use of industrialisation as a means to console the people who are directly or indirectly affected and afflicted by Indonesian confrontation. At the present moment, the 47 factories which are said to have gone into production are able to employ some 2,000 workers. Even when they go into full production, the maximum number of workers employed will be only about 6,600. During the five years of its rule, the P.A.P. Government has been talking about industrialisation. The Minister for Finance has given great publicity to the opening of factories from time to time. But, in spite of all the great show put up, the employment opportunities created by this grand opening amount to only 4,000. This is only a small percentage of the unemployed people. According to the Minister himself, there are about 30,000 youths coming into the labour market every year. Up to the present moment, there are at least thousands and thousands of youths unemployed. If you add to this figure those who have become unemployed after confrontation, then the figure is far too great to be solved. The Minister has not told us of the contribution made by the new industries to our national income, whether they are able to cancel off the loss of 8.7 per cent of the national income brought about by confrontation, and whether they are able to maintain only - and not to increase, I stress - the present national income. On the other hand, the financial powers have largely been transferred to the Central Government. Even the approval for certificates of pioneer status is controlled by the Central Government. The Federation itself is also faced with the problem of unemployment. It has also got to find a way to solve it. So do you think the Federation Government will grant pioneer status to Singapore industrialists? I would like to ask: after Malaysia, how many factories in Singapore have been awarded pioneer status by the Federation Government? Under these circumstances, Mr Speaker, how can you expect a lot of employment opportunities to be created?

The present investment in industries has been taken up mainly by foreign capital - British, American and Japanese. These countries have invested considerabl7 in our industries. They have made large profits too. I do not know whether the Government has taken any steps to make sure that the profits de rived from local industrialisation will be ploughed back into further investment in our own country and not sent out. If you allow foreign capitalists to invest by means of their worn-out machinery in conjunction with local capital, derived from the hard-earned efforts of our own people, thereby resulting in a great flow of capital outwards, then can you say that foreign capital investment is of advantage to us'? The P.A.P. Government is always good at propaganda and showing oft. If in these problems the Government is only good at showing off, and nothing more than that, then I will say that our economic future is rather bleak. We try to attract foreign capital to our local industrialisation. We go to foreign capitalists for loans at interest. But, on the other hand, we invest our own money, to the extent of some $300 million or more, in foreign countries, much to their benefit. I suggest that the P.A.P. Government would do better to invest such funds in our own industries. It hopes that by the establishment of the common market, local industry can be developed. There is a list declared of 101 items of goods to be included in the common market. But has the Gov ernment noticed that various measures, particularly in the field of tariff, have been formulated under pressure of foreign monopolists and capitalists? These measures will invariably lead to a rise in the price of consumer goods. So in the public interest, I would say that the common market is a means by which foreign capitalists and monopolists try to strengthen their own position in Singapore. The success of such industrialisation will only lead to a higher cost of living within the next three to five years. People will suffer all the more. I must also point out here that the interests of the workers should not be sacrificed to those of the foreign capitalists. The so-called collective bargaining is carried out in favour of the capitalists. So foreign capitalists will be able to exploit with ease the workers of our own country and make more profits.

I shall now go on to the question of the budget deficit. According to the Estimates, there appears for the first time a deficit in Singapore to the extent of $20 million. According to the Minister himself, this is because of increasing expenditure in the first place; and, in the second place, the necessity to pay to the Central Government to meet the cost of public services and national defence. No matter under what circumstances the deficit has come about, and whatever economic activities are carried out to sustain public services, it is a waste of public funds to build things such as the National Theatre, swimming pools and playgrounds. People are not able to clothe and feed themselves. So how can we expect them to stroll in the parks'? It is a waste of money to build houses if people are not able to live in them. Many houses built by the Housing and Development Board have been left vacant. It is not that the people do not want to live in such houses, but because of the increased expenditure. To the lower income group, this increased expenditure is beyond their means.

Next year, because of Malaysia's arrangements, Singapore has to contribute 40 per cent of its revenue to the Central Government, amounting to $120 million. On the other hand, we have to lend about $30 million to North Borneo, thus resulting in a deficit. This sum of money is not going to be used on social welfare for the people of Malaya but on defence. Even on the loan to North Borneo, the Minister has said that the Government will not just hand out this sum of money. But up to now, how many workers have been recruited from Singapore by the Borneo Government? Therefore, the Minister will be quite foolish to give the loan. The main sources of revenue, such as income tax, customs, duty on tobacco and petrol and road tax, are all State revenue. If there is any change in the rates of duty, Singapore will be affected directly because of the Alliance Government's military expansion. The Federation Government's reserve funds have gone down. Therefore, they may increase the rate of taxation, and the burden on the Singapore people will be increased accordingly. Not only has Malaysia brought about unemployment, but because of the continuation of the war in North Borneo, the people in Singapore have to meet the rising cost of living.

A series of facts and events after the formation of Malaysia have exploded the lies of the Party in power. The people of Singapore are no more subject to any illusion about the great success or the prosperity of Malaysia. Their immediate problem is to consider ways and means of how to secede from Malaysia and to overcome the distress that they are experiencing at present.

Mr Speaker: Order. This is a debate on the Government's financial policy and not on political problems connected with Malaysia. The Member may touch on them if they affect the financial situation; but he should not make too much of a point about them.

Mr Chia Thye Poh: (In Mandarin): I was just summing up my arguments. Because the P.A.P. is intoxicated with power and relies on foreign capital and aid in order to sustain Malaysia, the Prime Minister has said that without Malaysia, Singapore cannot suvive. The Minister for Finance has also threatened the business community in Singapore by saying that as soon as Singapore secedes from Malaysia, it will fall into the hands of the Communists. All these statements will not be of any avail. What the P.A.P. are concerned with is how to solve their immediate problems. No matter how they carry out their propaganda warfare, how the Prime Minister has played with power and tried to deceive the people, and how the Minister for Finance has threatened by exerting pressure on small businessmen in order to make them loyal to Malaysia, all this will not be able to solve their problems. Singapore businessmen, who are worldly wise, and the masses of the people have realised that the only correct policy is neutrality and that they should have equality and democracy internally. It is better to be like that than to have a Malaysia which is rotten and spurned by the other Afro-Asian countries.

3.21 p.m.

Mr Ong Eng Guan (Hong Lim): Mr Speaker, Sir, this Legislative Assembly is being asked by the P.A.P. Government to approve its financial policy for 1965. Sir, what financial policy are we asked to approve? Since Malaysia Day on 16th September, 1963, the Singapore State Government has no more control over Singapore's financial policy. Page 6 of the White Paper clearly states that the financial policy is now under the control of the Federal Government. Page 5 of the White Paper says:

'In framing the State Budget, due consideration will be given to the prevailing financial policy of the Federal Government.'

Again, "for budgetary purposes, all housekeeping matters will be left to the State Government". Page 5 of the White Paper says that "the Federal Government will retain legislative authority over all taxes of a national character." Page 5 of the White Paper says:

'Control over monetary policy rests with the Federal Government.'

Mr Speaker, Sir, all these powers are the same powers that the Federal Government has over all the other States of Malaysia. Singapore has no financial autonomy. The Singapore Government has no control whatsoever over Singapore's financial policy.

Sir, the Federal Government now has complete control over Singapore's financial policy. There is no more Currency Board on which Singapore is a member. The Federal Government will soon have complete control over Singapore's banks when it amends, at the end of the year, its Banking Ordinance to apply to Singa pore. At present, control over Singapore's banks is exercised through a branch of the Bank Negara in Empress Place. It is only the Federal Government that can amend the income tax laws and vary the rates of income tax or customs duties in Singapore. The Federal Government has control over most of the important powers of taxation and the collection of fees in Singapore. The Pan-Malaysian financial policy, the monetary policy, the industrial policy, determined by the Federal Government, will be applicable to all the States of Malaysia, including Singapore. The State of Singapore cannot affect this overall Malaysian financial policy; similarly neither Kelantan nor Sarawak can do so. The supreme power over finance in Singapore is held by the Federal Cabinet.

Mr Speaker, Sir, as the White Paper has stated, the Singapore State Government is merely a housekeeper. At the end of each year the housekeeper will make out his estimates of income and expenses for the coming year. Only the Federal Minister for Finance, Mr Tan Siew Sin, can decide the financial policy of the 15 States of Malaysia. He will tell us what his financial policy is that is applicable to the whole of Malaysia, which includes Singapore, in the Federal Parliament some time next month. Now, the Singapore Government is being allotted $339 million for 1965 for Singapore's housekeeping. The Singapore Government is required to pay out from this amount for the maintenance of schools, hospitals, social services, and so on. The Singapore Government has found out that it is not enough to meet the necessary expenses. There will be a deficit, I believe for the first time, in Singapore's history. But fortunately for the moment, Singapore has some money invested safely since Sir Stamford Raffles' time - just to meet contingencies like this. But how long can these grandfather's property and savings last? It is difficult to say.

Mr Speaker, Sir, actually what the Assembly is asked to approve is the 1965 Budget of the Singapore State Government. The difference between budget and financial policy is this: bud get is like furniture, financial policy is like a house. A budget can be a part of a government's financial policy, like furniture in a house. But a house cannot be inside the furniture! Mr Speaker, Singapore's income is now almost fixed. The Singapore Government has no way of increasing its income either by in-creasing taxes or by borrowing. The Singapore Government can only make use of its grandfather's savings. The Assembly can study and debate the expenditure for 1965 - only the expenditure - recommended by the housekeeper who is Singapore's Minister for Finance. The position is this: if we had more meat, we would have less fish. If we wanted more fish, we would have to take less meat. As a matter of fact, it is not even as good as that. We are now forced to cut down on both meat and fish, for although Singapore's population has increased by about 60,000 a year, the money allotted for Singapore has decreased. Not only has Singapore no say or control over its own financial policy, but the Federal Government will make an estimated $65 million profit from Singapore residents. And this amount will increase year by year - $65 million profit a year.

Sir, it is important for us to bring home to the people of Singapore the limitations of the powers of the Singapore State Legislative Assembly and consequently of the powers of the Singapore State Government. The Singapore State Government has about the same powers of a Town Council in the United Kingdom or in the United States. The present Singapore State Government has only 25 per cent of the powers of the Lim Yew Hock Government in 1955, or 10 per cent of the P.A.P. Government in 1959. This power will be reduced to 8 per cent if the Federal Government sets up Peace Committees to replace the Goodwill Committees.

Mr Speaker: Order. The Member for Hong Lim is going a little too fast, not for those who understand English but for those who are trying to interpret his speech. So if he will reduce his speed, perhaps we could get on faster.

Mr Ong Eng Guan: Mr Speaker, Sir, thank you very much, but this is because of the new Standing Orders which give a Member only one hour!

So this power will be further reduced to 5 per cent if the Federal Government later decides to abolish the Work Brigade and community centres, by ruling them out as para-military outfits. By then the Singapore State Government will not even be as strong as the P.M.I.P. Kelantan State Government.

The 1965 Budget reflects the extent of the powers of the Singapore State Government. The Minister for Finance himself had to admit that we are entering a difficult era. The New York of Malaysia is not Singapore. The New York of Malaysia is Kuala Lumpur. The golden goose of Malaysia will not lay golden eggs in Singapore, but in Petaling Jaya or even in Prai. We must not deceive the people that there will be golden opportunities ahead, opportunities which will never come. By the end of the year more shops will be closed down. The Singapore River is now choked with idlewearing, wasting tongkangs. Business is now almost at a standstill. Singapore is almost a dead city, with only three years and eight months of Japanese occupation to outdo it. It is vital that the people fully realise the situation and be appraised of their own personal future in the new setting before they sink lower and lower. Many shops have incurred more debts, hoping the situation would improve. This is because of the talk of 8 per cent loss. Last year, at this time, the only activities left were buildings and the share market. Now, even these two activities have stopped. Many houses have been built because the plans for them had been approved, in the belief that we would be the New York of Malaysia. But these houses have now no buyers. The average customer's deposit in the banks is running down, and the people's savings are now depleted. The future is bleak and stormy. Everybody is saying that the New York of Malaysia will be in the heart-land of Malaysia, which is Kuala Lumpur, where real political and economic power and also future prosperity shall lie.

The Minister for Culture (Mr S. Rajaratnam): Are you going up there?

Mr Ong Eng Guan: In 1959 as soon as the P.A.P. came to power, there was a trend of industries, firms and skilled workers moving up to Kuala Lumpur. We do notice this trend again. Mr Speaker, Sir, even before Malaysia Day on the 16th of September, 1963, we had often said that if Singapore was to decide on merger, it must be on a full, complete and equal basis. The P.A.P. Government tried to twist our arguments by saying that with complete and equal merger, half of our citizens would lose their citizenship. This is not true. The entry of Singapore into Malaysia as a peculiar State has created difficulties of immense proportions. Never have we experienced a position where the relationship between the State Government and the Federal Government has been so tense and acute. The State Government of Kelantan is run by the P.M.I.P. The Penang and Malacca City Councils are run by the Socialist Front. The Ipoh City Council is run by the P.P.P. But there are no apparent difficulties between them and the Central Government. Singapore is now at the receiving end. We should now stop deceiving the people. We should tell them the truth, even at the price of electoral defeat, because in the end they will understand that we are telling the truth. They will understand us and they will be our strength. Are the curses of the people which have been heaped on us, and the long sleepless nights which have ended with doses of sleeping pills, worth the electoral victories achieved by lies? Why should the Government ask the Assembly to approve its financial policy when it has no financial policy? I ask the Government to move an amendment itself to delete the words "financial policy" and substitute the word "budget". I do not want to shame the Government. I want to respect the Government. The Singapore State Government has absolutely no control over Singapore's financial policy. Similarly, it has no control over Singapore's Police, Prisons, and so on. Of course, this does not mean that the Singapore State Government cannot make recommendations to the Federal Government to amend the income tax laws or to state who should or should not be detained. Whether the Federal Government accepts such recommendations is left entirely to its discretion.

Mr Speaker, Sir, the main instruments of financial policy are taxation, control of banking, control of rate of interest and bank overdrafts, public borrowing, stock exchange, currency, foreign exchange, and so on. All these powers are now vested in the Federal Government. The Singapore Government is appointed by the Federal Government to be a collection agent for certain types of taxes, like income tax and customs duties. The branch of the Central Bank of the Federal Government established in Empress Place since Malaysia Day controls the policies of all the banks in Singapore, and therefore Singapore's monetary policy.

Sir, neither has the Singapore Government any genuine control over Singapore's industrial policy. The control of industrial policy is also the prerogative of the Central Government. The key to direct industries to particular States of Malaysia is the power to issue pioneer certificates. Now, only the Central Government has the power to issue pioneer certificates. The Singapore Government cannot issue any more pioneer certificates. It can only make recommendations to the Federal Government, and, as far as I know, none of its recom mendations have been accepted. For that matter, every State Gov ernment in Malaysia can make recommendations, but whether the recommendations of each particular State Government are to be accepted or not depends on Kuala Lumpur. If the Central Government in Kuala Lumpur decides that a certain factory should go up in Petaling Jaya, or Prai, or Johore Bahru, and not in Jurong, it can conveniently do so by refusing to accept the recommendations of the Singapore Government to grant pioneer status to that factory and offering it pioneer status and protection if it is set up in the State allotted to it. No factory entrepreneur wants to throw money away under such circumstances by setting up a factory in Jurong without a pioneer status and without assurance of a common market for his products. The Central Government can conveniently refuse to grant pioneer certificates to entrepreneurs who want to set up factories in Jurong on the grounds that they want all the States of Malaysia to enjoy equal industrial development opportunities. That is why we have advocated: why not go into Malaysia on equal terms instead of on peculiar terms? As a matter of fact, Sir, as far as I know, since Malaysia was formed on 16th September, 1963, no new pioneer certificates have been issued to any industries to be established in Singapore.

Mr Speaker, Sir, the common market arrangements are also another method by which the Central Government can direct industrial growth in Malaysia. The Singapore Government has very little say in the deliberations and decisions of the Common Market Tariff Board which is controlled by the Federal Government. In short, it will be the Federal Minister of Commerce and Industry, through the instruments of granting pioneer status and common market protection, who will decide whether a factory is to be set up in Jurong, Petaling Jaya, Ipoh, or Prai. Sir, we all know that the Jurong Industrial Scheme is a flop. Nowhere in the world has a government spent so much of the tax payers' money on such an industrial scheme with so little resources! Several hundred million dollars of the taxpayers' money have been spent by the Economic Development Board alone, not to include expenditure by the Public Utilities Board and the Public Works Department on the Jurong Scheme. What we get is only employment for several thousands of people after six years of P.A.P.'s effort and an expenditure of several hundred millions of dollars.

Mr Speaker, Sir, as I say, the Jurong Industrial Scheme is a complete flop. Hongkong did not require such a scheme, and yet it has hundreds of times more factories than Singapore. After six years of half-baked efforts, backed by intensive propaganda of opening ceremonies, there are now less than 20 factories in actual operation in the Jurong industrial site, employing only several thousand people. They are not even able to absorb a small percentage of the increasing population of 60,000 each year. What about those affected by confrontation? People who only read the newspapers and watch on T.V. the daily performance of laying of foundation stone ceremonies and who have never visited the Jurong site must think that there are at least 500 factories there. They will be shocked if they take a trip around the Jurong area and see the pitiful, miserable results after over $200 million of the taxpayers' money has been spent!

An hon. Member: Have you gone there?

Mr Ong Eng Guan: I only want to give an example of money wasted on half-baked schemes. The scrap plant which they call a steel mill in Jurong has been a failure. A steel mill uses iron ore as raw material; a scrap plant uses scrap. The production of the scrap plant threatens to stop. The Government has prohibited the export of scrap iron - the plant's raw material. This is understood to have led to the unemployment of many hundreds of people connected with scrap collection. The price of scrap was forced down because scrap-dealers can only sell to this scrap plant. The import of steel was restricted to force up the price of steel. This will eventually affect all house-buyers. S.I.T. flat-dwellers and contractors. The Government and private enterprise misled by Government's half-baked efforts have spent nearly $15 million on this scrap plant, although there is already another scrap plant in Bukit Timah Road built during the Lim Yew Hock Government. Only a few million dollars of extra capital was required to expand the machinery of this other scrap plant to provide the same employment as the present scrap plant. But the P.A.P. Government was not prepared to have a scrap plant built during the Lim Yew Hock Government. It was prepared to let it close down, and it indeed closed down because there was no propaganda value. Moreover, there were no opening ceremonies to be performed. Just imagine how much of the taxpayers' money has to be spent and how much burden the public must bear so that the scrap plant in Jurong is not forced to close down, merely for the sake of propaganda!

Mr Speaker, Sir, the break-through in industrialisation cannot be achieved by the obsession to perform opening ceremonies and laying of foundation stone ceremonies for every firm, shop, factory - big or small, old or new. Even if it is an old firm, but so long as there is a change of site or of manage ment, an opening ceremony is performed; even if a factory has been in production for several years, it is still never too late for an opening ceremony. As time goes on, and as outstanding monuments like subways and tailor shops to enshrine one's name for posterity become fewer and fewer, we might see the day when every bus-shelter constructed, every road built, every standpipe erected, goes through a ribbon-clipping ritual with a pair of golden scissors, the usual flower pots, followed by a set speech which can, be reproduced for such a grand occasion on a gramophone record.

Sir, it is perhaps pertinent to note that in all the fields of activity of the P.A.P. Government's six years of office, all have failed - and some have failed miserably - except in housing. Housing is the only sector that the P.A.P. Government can boast of. Why has it succeeded in housing when in all other sectors it has failed? It was just because by September, 1959 I had completed the reorganisation of the S.I.T., completed a gigantic housing blue-print, and developed new organisational techniques in the building of houses. In October 1959, I announced the plan to build 80,000 housing units in five years, and it was supported by the Prime Minister who saw the plan. But later the P.A.P. leadership refused to release the money earmarked for housing. Instead they immediately appointed a Commission of Inquiry to look into the building industry with the sole object of discrediting me and to show that Singapore did not have the skilled men and available building materials for such a venture. The Commission of Inquiry's findings were otherwise, because the evidence was too overwhelmingly convincing that such a gigantic project was possible. Therefore, the P.A.P. Government hesitated to publish the findings until many years later.

Sir, the P.A.P. leadership was able to put forward a housing programme which I outlined in 1959 because they retained the services of the Chief Architect, Mr Teh Chiang Wan. He was my friend from Australia. I knew at that time that he was an organising genius, not one from Batu Pahat. His ability was beyond question. As soon as the P.A.P. came to power in 195g. I immediately offered him a post in the S.I.T. He quitted his job in the Penang City Council, and we immediately plunged into a series of meetings to reorganise the S.I.T. to formulate revolu tionary techniques in S.I.T. housing never dreamt of before, and to draw up a housing programme. Sir, Mr Teh Chiang Wan was to housing in Singapore what Kosygin was to textile production in Russia. But Stalin unashamedly got the name and claimed the credit for himself. If the Government appoints a group of nincompoops in the Housing Board Committee, houses would still be built at the rate the Government desires - even if it wants 30,000 units a year - so long as Teh Chiang Wan is there. We must give credit where credit lies.

Mr Ng Kah Ting: L-i-e-s!

Mr Ong Eng Guan: Because the nincompoops did not matter. It is Teh Chiang Wan who matters.

Mr Speaker: Order. Did I hear somebody say "L-i-e-s"? The Member must withdraw it.

Mr Ng Kah Ting: I withdraw.

Mr Ong Eng Guan: We must give credit where credit lies. If the Federal Government wants to make a success of its housing programme, it can easily do so by retaining the services of Mr Teh Chiang Wan. He was the mastermind behind Singapore's housing success. But when I first appointed him and malayanised the expatriate architects ---

Mr Speaker: Order. We are not debating Mr, what is his name?

An hon. Member: Mr Teh.

Mr Speaker: I think the Member for Hong Lim might mention him in passing as being somebody responsible. But to talk about him for 10 minutes is beyond the debate on the financial policy.

Mr Ong Eng Guan: Mr Speaker, Sir, it is very important because I want to help the Government, if possible, to find out the faults in its industrial programme. So when I first appointed Mr Teh and malayanised the expatriate architects, what I received were curses from the P.A.P. leadership.

Mr Speaker, Sir, the Government's industrial policies have failed because, in the first place, there has never been a clearly formulated plan on the road to industrialisation with a clear target set on the methods to achieve it. None of the Ministers in the Government have any real experi ence in industry or business. Throughout his working life, the Minister for Finance had been a civil servant completely sheltered from the hurly-burly of the hard business world and the fierce competition outside. He is by training a statistician of the first order - world class. He will make a great success in the United Nations computing and analysing national income statistics of developing nations. Because of his background and training, he cannot help apply civil service methods to industries.

Mr Speaker, Sir, when industries are to be run by civil servants on civil service principles, I am sure the public knows the results. The Prime Minister himself possesses little knowledge of finance and economics and industry. He is, therefore, in no position to make any contribution. The members of the Economic Development Board are hardworking. But they are also civil servants long in the service. Much of their time, Sir, is further wasted in seeking out and organising opening ceremonies. Again the Government has not been able to recruit someone like Mr Teh Chiang Wan for its industrialisation programme. Now that the pioneer certificates and common market incentives are under the control of the Federal Government, the future of industrialisation is even more bleak. The vast Jurong site, barren, with very few factories, looks like a wall without features. Some time back, the Government blamed the Communists for their failure in their industrialisation programme. Now they blame the Indonesians. Very soon they will blame the Federal Government. But when housing succeeded, it was all the P.A.P.'s credit! They complimented nobody. The world did not know that it was Teh Chiang Wan who built all the houses. Because the P.A.P. Government's industrialisation programme has failed, Singapore now has the biggest percentage of population unemployed compared with most of the modern cities of the world. Of course, the Government can tell us that there is even more acute unemployment in Jakarta where the people are supposed to eat corn and rats. The hungry, unemployed people and those depending on public assistance in Singapore get no consolation from such stories. We have the highest percentage of hawker and pirate taxi population. If an unemployed person can borrow some money, he will turn to hawking or to running a pirate taxi to earn a few dollars a day. Nobody wishes to be a hawker or a pirate taxi driver and face the threat of prosecution and fines everyday if he can get a job in a factory. The Government cannot find jobs for them. It only knows how to arrest them. Or would the Government prefer that they steal and rob because their children are hungry? Of course, it is wrong for pirate taxis to take away passengers from the taxi drivers. But it is the Government's responsibility to find jobs for the unemployed. When they go to the Labour Exchange, they are asked to come back the next day, It is now known that registration of unemployment in the Labour Exchange is a mere waste of time.

Sir, because of the failure of Government's industrialisation scheme and because of unfair financial terms, Singapore has been sold out on entry into Malaysia. Singapore will, for the first time in history, be facing a deficit. Singapore has been a rich city since pre-war days. This is because of its geographical position, being the centre of South-East Asia trade. Whether it is a colonial government or a corrupted government, the State coffers had never been empty. Now the State coffers have started to drain out. In the 1965 Budget, not only Singapore cannot afford to expand its social services, but in some cases it will have to shrink them. We are now facing a deficit. But the Assembly is being asked at the same time to be generous enough to give a S30 million interest-free loan to Sabah and Sarawak in 1965, and another $90 million in subsequent years. Mr Speaker, Sir, how can we expect a surplus budget if we have to pay so much ransom to the Federal Government each year? The Federal Government did not ask for it. The P.A.P. Government was trying to be generous. The financial losses to be borne by Singapore each year are assessed as follows: (1) Payment to the Federal Government of 40 per cent of national revenue, $127 million; (2) Interest on $30 million to Sabah and Sarawak, $2 million. Loss of earnings from the issue of currency notes, which now goes to the Federation Government, $11 million; making a total of $140 million. The Federation Government's expenditure on Government Departments in Singapore - which it has now taken over from the P.A.P. Government - is estimated to be only $75 million a year. This is the bargain the P.A.P. Government has entered into. Singapore had surrendered to the Federal Government control of the Police, Armed Services, Prisons, Immigration, Posts, Telephones, Telecom munications, Vehicle Registration, the Courts, Judges, Magistrates, the Paya Lebar Airport, Identity Card Registration, Meteorological Services, control of companies and stock exchange, control of income taxes and customs, issue of pioneer certificates, final decision on Singapore citizenship registration, control of film censorship, and a host of other subjects. The P.A.P. Government gives all these departments and power to the Federal Government and pays $140 million a year to the Federal Government to maintain them. The Federal Government has only to spend $75 million and makes a clear profit of $65 million. What a bargain the Singapore Government has entered into. I did not get the figures from nowhere. I got the figures from the Budget itself. To check the accuracy of my figures, I got further proof from no less an authority than Singapore's Minister for Finance. Page 11 of the 1965 Budget, the "Abstract of Estimated Revenue for the Year 1965" shows that the Federal Government will receive $137 million a year from taxes paid by residents in Singapore. This money before September 1963 ---

Mr Speaker: Order. Is the Member quoting from the cyclostyled copy, or is he taking it from the Singapore Budget?

Mr Ong Eng Guan: I am quoting from the Singapore Budget.

Mr Speaker: Yes. Carry on.

Mr Ong Eng Guan: This money before 16th September, 1963, would belong to the Singapore Government for it to discharge its obligation to the people of Singapore. Before Malaysia Day, the P.A.P. told us that Singapore is required to contribute this annual sum which would grow bigger and bigger each year, because the Federal Government after Malaysia Day has to pay for the departments which have been surrendered to them. At that time they told us that it was a very good bargain. I remember we were told that to run these departments would cost much more. We were given the impression that Tan Siew Sin was not as smart as Goh Keng Swee. Of course, Sir, ---

Mr Speaker: Order. Dr Goh Keng Swee happens to be the Minister for Finance. If the Member wants to refer to him in this House, he must refer to him as the Minister for Finance and not Goh Keng Swee.

Mr Ong Eng Guan: Mr Speaker, Sir, in this connection, it was special because both are Ministers for Finance and the House might have a wrong impression of these two persons. That is why I deliberately bring out their names. I am sorry for that. Of course, to substantiate it, we were given the funny theory that the elder cousin had inherited the grandparents' fortune and the younger cousin had not. But as far as I have heard, Tan Cheng Lock, the father of Tan Siew Sin, had made his millions from scratch. Of course, whoever is the smarter cousin is of no concern to us. But now we have solid proof that the elder cousin had outsmarted the younger cousin. The younger cousin had sold the people of Singapore down the drain to the tune of $65 million a year. In 1965, the elder cousin will collect $127 million from the younger cousin. Actually the money will be in the Bank Negara in Empress Place, the bank belonging to the elder cousin. In 1966, the amount will be more than $127 million, and it will keep on increasing. The elder cousin will only spend $75 million on the departments in Singapore, which he took over from his younger cousin and the latter's good friend, the Singapore Prime Minister. The breakdown of the $75 million to be spent by the Federal Government on departments taken over is broadly as follows: Million $ Police 30 Armed Services and Singapore Infantry Regiment 12 Prisons 5 Immigration and Passports 1 Film Censorship, Exchange Control, Registry of Trade Marks, Companies, Audit, Survey, Official Assignee, and PublicTrustee, all lumped together 2 Judicial, High Court, Magistrates, Judges, etc. 2 Civil Aviation, including the Paya Lebar Airport 4 Meteorological Services 1 Postal Services 12 Telecommunications 5 Registry of Vehicles 1 making a total of $75 million.

Mr Speaker, Sir, after paying $75 million to keep us on good behaviour, the elder cousin can still pocket a profit of $52 million. The younger cousin has suddenly woke up. See what the Singapore Minister for Finance now tells us. In column 131 of the Hansard, Vol. 23, No. 2, in his Budget speech on 2nd November, 1964, he says:

`Revenue and expenditure for the current year shows that the days are over when we can take for granted that each financial year will end with a surplus of $50 million or more.'

Mr Speaker, Sir, Singapore is a rich city. Whether it is David Marshall, Lim Yew Hock or the colonial Government, there will always be a budget surplus. Now this surplus will be gone forever, given to the Federation Government by the P.A.P. Government.

Now coming back to the story. The Federal Government receives $127 million a year and pays out $75 million a year, making a profit of $52 million. In addition, it will receive an additional profit of $11 million each year by taking full control of the issue of currency notes. You know, Mr Speaker, Sir, printing of currency notes is a very profitable business. Now if we give Sabah and Sarawak an interest-free loan of $30 million a year, which the Singapore Government has to raise from the Singapore public, it has to pay $2 million interest each year. $52 million plus $11 million, plus $2 million equals $65 million. In 1965, therefore, the P.A.P. Government has sold out the people of Singapore for $65 million. In 1966 it is likely to be $75 million. In 1967 it is likely to be $85 million, because the 40 per cent contribution will increase year after year. As far as I know, for the first time in Singapore's history, at least since the war, we are going to have a deficit. The Alliance-controlled Federal Government is not going to have a two-year truce to allow the P.A.P.- controlled Singapore Government a breathing space to make use of Singapore as an economic base - a Cuba - to launch a political offensive in the Federal elections in 1969. The Federal Government will make doubly sure that not only will the P.A.P.- controlled Singapore Government's social services in Singapore be unable to expand to cope with the increasing popu lation and growing unemployment, but it will make it further deteriorate. This is what is actually happening now.

Mr Speaker, Sir, the P.A.P. Government has little power left except to run schools and hospitals. Anybody who wants to go to the University of Singapore, Nanyang University, the Singa pore Polytechnic, Ngee Ann College, is required to get a permit from the Federal Government. Because of the loss of power, the suppressors of Nan-yang University and Chinese education have turned to become the defenders of Nanyang University and Chinese education. The non-communal socialist heroes of years ago have become the skilled practitioners of communal politics so that they can gather support from the Chinese. The Communist bogey has now receded temporarily from the picture, and in its place a different battle is being fought.

Mr Speaker, Sir, the entire financial arrangements entered into with the Federal Government were a sell-out. As a matter of fact, the White Paper was a gigantic fraud perpetrated on the people of Singapore. We are told that Singapore will be a special autonomous State within Malaysia. During the dis turbances in July the whole humbug was exposed. The people saw with their own eyes that the members of the State Government of Singapore, who called themselves the Prime Minister and Ministers, have completely no power. They are no better off than the average citizens. They also required curfew passes issued by the Federal Government to pass through the streets even in official cars. The story went around that one of the P.A.P. Ministers - I am afraid, if the story is true, he had not studied the White Paper and the Constitution properly - was ordered by the ordinary soldiers to come down from his official car and show his curfew pass. I am sure that if Singapore had entered Malaysia on an equal footing, there would not have been such problems. There is now no trouble between the Alliance-controlled Government ---

Mr Speaker: The Central Government.

Mr Ong Eng Guan: - the Central Government and the P.M.I.P.- controlled Kelantan State Government. Let us not further deceive the people that half of them would lose their citizenship rights if Singapore entered Malaysia on an equal footing.

Mr Speaker, since the Singapore Minister for Finance has no power at all in deciding the financial policy of Singapore - as it will be decided by Mr Tan Siew Sin; and Dr Lim Swee Aun, the Federal Minister for Commerce and Industry, will decide on Singapore's industrialisation policy - the words "Minister for Finance" applicable to Dr Goh Keng Swee may slowly have to be changed. There is no Minister for Finance anywhere in the world who does not decide on financial policy. In the United Kingdom or the United States, Dr Goh's post will be called the City Treasurer or the State Financial Officer or the State Accountant-General. In the epoch of the l960s only in Singapore can you find people in positions with high-sounding names but no power, like Emperor Puyi of Manchukuo nearly three decades back. Actually if the policeman does not want to salute the Prime Minister of Singapore when he enters the City Hall or the Assembly House, the latter cannot do anything. I will not be surprised at all if one day the Central Government, in order to avoid confusion (I believe there was some confusion during the first African tour as to whether the Prime Minister of Singapore controls Malaysia, or the Prime Minister of Malaysia controls Singapore) amend the Malaysian Constitution and call the Front-benchers in the Singapore Assembly, as Mentri Besar, Timbalan Mentri Besar, State Financial Secretary, Education Secretary, Health Secretary, Labour Secretary and so on. These names are more ap propriate with their present powers.

So, Mr Speaker, Sir, actually from now onwards we can expect bigger and bigger deficits each year. All the capital reserves accumulated by the colonial government and the Tun Lim Yew Hock Government will be drained away. Sir, they have always condemned the Tun Lim Yew Hock Government as a decadent, inefficient and corrupt Government. The P.A.P. has always sung praises of its own, that is, the Government is a clean Government, an honest Government and an efficient Government. Except for housing, where the credit should be given to Teh Chiang Wan, the master-mind and the genius behind the whole housing project, six years of P.A.P. rule have done less for the people than three years of the Lim Yew Hock Government. In the field of education, the Lim Yew Hock Government built the Polytechnic and the Teachers' Training College. The P.A.P. have built none. In the field of health, the Lim Yew Hock Government built one district hospital in Thomson Road. The P.A.P. have built none. In the field of industrialisation, six years of P.A.P. Government and investments of more than $200 million have not produced more factories for more workers than three years of the Lim Yew Hock Government with no investments. The difference is that Lim Yew Hock did not know how to organise opening ceremonies, whether they are for new factories or old factories. He should have given instructions through his Industrial Promotion Board to get all factories, established since Sir Stamford Raffles' time, to be white-washed, and to perform the opening ceremonies. Of course, in those days, we had no T.V.

Therefore, leaving housing aside, there is no field of activity where six years of P.A.P. Government have surpassed in its results the three years of the Lim Yew Hock Government. The P.A.P. Government is not better than the Lim Yew Hock Government. Sir, the 1965 Budget makes no provision for a General Hospital. The present General Hospital was built prewar to cope with only one-third of the present population. We need to expand the General Hospital to three times its present size to cope with the present demand. The public is complaining of the inadequacies of the hospital services. The 1965 Budget should make provision to expand the present Polytechnic to at least five times the present size to cope with the demand. It is very difficult for students to get admission to it.

The 1965 Budget did not increase the amount of public assistance which has stood at about $10 million constantly for several years. With confrontation and its effects now severely felt, this amount should be increased to at least $20 million. Thousands of families are urgently requiring public assistance, but because of the strict rules, they cannot get aid. Those who get public assistance cannot afford to pay even the rent of their cubicles from the $10 or $20 they receive a month. The people receiving public assistance should be respected like human beings and not be made to beg for it.

Mr Speaker, Sir, due to the fact that most of the Housing Board dwellers are from the lower income groups, mostly affected by confrontation, the P.A.P. Government should immediately reduce S.I.T. rentals by 20 per cent at least to last as long as Indonesian confrontation -

Mr Rajaratnam: Why not free?

Mr Ong Eng Guan: This will cost the Government only $4 million a year. The 1965 Budget makes no provision for the relief of fire victims since outbreaks of fire are now almost a recurring affair. As in the past few years, we have a big fire almost each year. There should be an annual provision in the Budget for the relief of fire victims. The Government makes a big profit by paying prices far below the market price to those owners of land affected by fires. Such profits should be earmarked as relief for the fire victims. Because of inadequate provisions, the recent fire victims of Kampong Pulau Minyak in Lorong 1, Geylang, were not well looked after. I believe they have so far received only $10 cash each, with no free clothes, no free blankets and no free food. In the Lorong 3 fire, the fire victims each received several hundreds of dollars in cash, unlimited amounts of gifts in goods and a house for each family. What a contrast if the Government does not care for the people.

Mr Speaker, Sir, there is no provision in the 1965 Budget for the erection of the pre-election time much-publicised memorial for victims during the Japanese Occupation. After Malaysia Day and the Singapore general elections, not one word has been spoken. You will remember the P.A.P. Government made solemn pledges to the people at a mass rally of 100,000 people to fight to the very last for Japanese reparations. Now after nearly 1½ years we have not heard one single word. Not one single murmur! The organisers have also kept quiet. Very funny! Before the mass rally, the Singapore Prime Minister broke the soil for a memorial on a four-acre piece of land near the Britannia Club. I still cannot see the memorial when I pass by. Mr Speaker, Sir, what a vote-catching fraud! I also remember the P.A.P. Government telling the people before the elections that they were going to introduce free secondary education. Where is the free secondary education provision in the 1965 Budget? What a vote-catching stunt!

Mr Ng Kah Ting rose -

Mr Speaker: On a point of order?

Mr Ng Kah Ting: On a point of information.

Mr Speaker: If the Member will give way. He is not giving way.

Mr Ong Eng Guan: He will have his time later. What a vote-catching stunt! These are only some fine specimens of broken promises. Of course, the Government's excuse is that we have no more power over finance. We are facing a deficit. Sir, let us now assume that the P.A.P. Government had not surrendered the annual sum of $65 million worth of profit to the Federation Government each year. What can we do with $65 million each year? Build one district hospital each year, $5 million; build one polytechnic each year, $10 million; double the present rate of social welfare public assistance relief, $10 million; reduce the S.I.T. rentals by 20 per cent, $4 million; free secondary education for all, $2 million; reduce taxes, fines and abolish all hawkers' licence fees, $2 million; abolish all radio and T.V, licences, $3 million; abolish all night soil and trade refuse collection charges, $2 million; reduce property tax on all houses, whether brick or attap by half, since Singapore has one of the highest property taxes in the world. $27 million; making a total of $65 million.

Mr Speaker, Sir, if the Government admit that they have no more power over their financial policy, I ask them here, of their own accord, to move an amendment themselves, to substitute the word "budget" for "financial policy". The Minister's speech on the Budget dare not touch on Singapore's financial policy. He has only explained in his speech some of the figures in the Budget. What he has asked the House to approve is the 1965 Budget on which we have little quarrel with him, because he has no other way out. In the circumstances, Mr Speaker, Sir, I must put on record in the House that the Minister for Finance has done his best.

4.10 p.m.

The Parliamentary Secretary to the Minister for Labour (Mr Wee Toon Boon): Mr Speaker, Sir, we are very fortunate people in many respects, because one has only to look around in South-East Asia and see the difference - dictatorships, guided democracy, and other political gimmicks with their attendant economic decay and human suffering are the order of the times. In our context, let us look back to the pre-1959 era and the post-1959 era. We will note that we were in the doldrums in the pre1959 colonial era. Singapore was lying fallow and everything done was in the economic interest of the colonial master, but not in the social interest of the people. The post-1959 era saw the destiny of the State vested in the hands of its own people. Out of the doldrums there appeared a new dynamism, a will to improve things for ourselves. The indifference of the colonialists to social problems left in our hands the legacy of an expanding population seeking outlets for employment, housing, education, medical care. It was found that the only way to create new and expanding employment opportunities for a fast growing population was to industrialise. And so started our economic development planning which has given birth to the vast Jurong Industrial complex and the smaller estates at Tanglin Halt, Redhill and Kallang. 113 firms have been awarded Pioneer Certificates and 47 are in production, employing about 4,190 persons currently. This number is likely to be increased to 6,687 eventually. In addition, about 120 new non-pioneer firms have gone up this year alone. The next few years will see an even greater rate of industrial expansion. Both public and private housing projects are progressing with undiminished vigour, so much so that the spectre of housing shortage that faced Singapore before has disappeared. The spate of building activity is slowly changing the Singapore skyline, and a further change will occur in the not too distant future with the rebuilding of the City itself. We are now in the transitional phase of transforming the State into an industrial one, which also entails social development on a large scale.

In the spirit of pioneers, we must proceed with undiminished vigour so that a firm foundation for a more just and more equal society can be laid. In this society, it is our fervent hope that our children will find a place of dignity and standing, happiness and prosperity. However, certain enemies of our society, with the aid of their foreign allies, are attempting to nullify our efforts at building a better future for our people. To them, progress brought about by democratic socialism means their destruction, because the people will see the hollowness of their political and social philosophy. It is the duty of all those who believe in the democratic system to work with dedication and energy towards our economic and social development, be they employers, workers or professional men. Trade unions, of course, have a vital role to play in this field and there is no doubt that they, under the leadership of the National Trades Union Congress, will bring to the fore their ingenuity in helping to solve the social problems that face us. This, of course, means that pure militant trade unionism has no place in this context -

Mr Speaker: Order. We are now on the financial policy of the Finance Minister as stated in his speech. So will the Member confine himself to the financial policy?

Mr Wee Toon Boon: Mr Speaker, Sir, I am just trying to bring up the experience that we have faced in the past in the implementation of our financial policies.

As I was saying, it requires rational and responsible trade unionism in the interests of the country. The democratic trade union movement has, however, consolidated itself in the face of challenges from the pro-Communist unions and it is now clear that the pro-Communist elements can be swiftly and effectively dealt with should they endeavour to denude and destroy our march forward towards a better life.

What the democratic trade unions have achieved for the workers since Malaysia came into being is clearly reflected in the number of agreements registered in the Industrial Arbitration Court. Out of a total of 199 agreements registered, 105 were in respect of unions within the democratic fold, and further out of 233 cases heard in the Court, 165 were in respect of democratic trade unions. Strikes, slogans, and political intrigues as practised by the Barisan group of unions had not been shamefully used by them. They have made use of the Court for the very purpose that it was set up. The democratic trade union movement has also a duty to its members and the public to keep the movement clean and honest.

Mr Kow Kee Seng (Paya Lebar): Point of order. (In Mandarin): Mr Speaker, the Parliamentary Secretary is not debating the financial policy but is making a report on the labour movement. I hope he will go back to the financial policy.

Mr Speaker: Perhaps the Parliamentary Secretary can come back to the financial policy as quickly as he can. If he is now touching op the trade union movement merely to make some points in regard to the financial statement, he is in order. But if he is dwelling on the trade union movement to tell the House what the Government has done in respect of such movement, then he is completely out of order.

Mr Wee Toon Boon: Mr Speaker, Sir, as in all organisations, the democratic trade union movement has also a duty to its members and the public to keep the movement clean and honest. As in all organisations, there are some in the trade union movement who tend to be dishonest. We have recently had serious allegations made against certain officials of the Singapore Manual and Mercantile Workers' Union. This has caused great concern to men of goodwill and honesty.

Mr Speaker: Order. Will the Parliamentary Secretary come back to the financial statement? He is now getting down to individual unions!

Mr Wee Toon Boon: Mr Speaker, Sir, I was not dwelling on it. I was just mentioning it in passing. But what I am trying to bring out here is this: just now the Opposition has accused us by saying that we, the Government, are to be blamed for the present economic situation, and we are trying to refute the criticism made by the Opposition on the failure of the Government's financial policy, i.e, through the trade union movement -

Mr Speaker: Order. Will the Parliamentary Secretary please proceed? I shall watch him very carefully to see that whatever he says is, in fact, tied up to the financial statement.

Mr Wee Toon Boon: This has caused great concern to men of goodwill and honesty. Without a clean and an honest trade union leadership, the whole movement will disintegrate and the ultimate sufferers will be the workers themselves. Government has, therefore, appointed a one-man Commission of Inquiry to in quire into these serious allegations. The Commissioner appointed is Mr P. Coomaraswamy, an advocate and solicitor, and the terms of reference - Mr Speaker, Sir, may I beg your indulgence just to give the brief terms of reference?

Mr Speaker: This House is not concerned now with the terms of reference with regard to a particular union, as I can see no particular relevance of that Commission to the financial statement of the Minister for Finance. I rule that it is completely out of order. And if the Parliamentary Secretary does not desist from that, I must ask him to sit down.

Mr Wee Toon Boon: Mr Speaker, Sir, the Barisan have indicated publicly that they are sympathetic to Indonesia's cause, and they have all along been trying to nullify our efforts to improve ourselves. We have managed to conscribe them, but let us not be bedevilled by dishonesty within our own ranks, because such dishonesty will only help our enemies to curb our progress. To us our future is sacred and we will surmount all difficulties to achieve our goal.

4.20 p.m.

Mr Tan Cheng Tong: (In Mandarin): Mr Speaker, Sir, the financial statement delivered by the Minister for Finance last week is a financial statement which is delivered one year after the formation of Malaysia. Although the Finance Minister has made use of all sorts of strategy in order to cover up many facts which they do not want the people to know, and to create a false impression in the minds of the people, we on closer examination are able to find dirty things in it.

Let me clarify some of the points in the statement. Firstly, there is a deficit in our budget for next year. Secondly, there has been a trade decline for the first half of this year. The volume of imports for the first half of 1964 has decreased by 23 per cent, and the volume of exports has decreased by 31 per cent compared with the corresponding period of last year. Thirdly, when we are faced with economic difficulties, the Government has agreed to hand over $27 million to the Federal Government. Fourthly, because of the loopholes in Indonesian confrontation, Singapore has been able to recover some of the business in barter trade lost in September last year. Fifthly, our economic situation has changed for the worse, although there is a high level of activity in our construction and manufacturing fields, Sixthly, this Budget Statement can be termed a useless piece of paper because the financial policy of the Federation can upset our budget.

In his speech, the Minister for Finance has admitted that after the formation of Malaysia, which is contrary to the wishes of the people, the days of a surplus at the end of each year are gone. He said:

'Revenue and expenditure for the current year shows that the days are over when we can take for granted that each financial year will end with a surplus of $50 million or more. This fact will have to be faced.'

This is the first deficit the P.A.P. Government has to face. In order to boast that it is a sound Government, it deducted and tried to save money on expenditure, with the result that there was a surplus every year. The Government made use of this surplus to deceive the people. Today it has to admit that there would not be any surplus any more. What are the reasons for this? The main reason is that the revenue for the State Government has decreased. Why should we have this deficit? Obviously this is closely related to our trade suspension with Indonesia. As everybody is aware, the entrepot trade has all along been our economic sinews and that trade between Singapore and Indonesia has some prominence.

The Minister for Finance has also admitted that as a result of confrontation our economy has been affected, and the worst effect is centred on Singapore after the suspension of trade between Indonesia and Singapore. No matter what views people may hold, nobody can deny that this calamity has been brought about by the formation of Malaysia. If we had no Malaysia, we would not have such a calamity. If the upper clique of the P.A.P. could give up their self-seeking motives and listen to the views of the people, the masses of the people here in Singapore will not have to face such great difficulty and our economy will not face such a crisis.

For the past one year there has been a serious recession in our trade. According to the Minister for Finance, for the first half of this year there has been a decrease of 23 per cent in our imports and in exports there has been a decrease of 31 per cent, and the rapid recession of trade last year was the direct outcome of confrontation. As a result of trade recession, we have this economic deterioration, and those directly affected are the transport workers, lightermen, import and export firms, rubber workers, rattan workers, small businessmen, hawkers and farmers. All these people are now faced with difficulties. They have left their jobs and the cost of living has gone up. Taxation has gone up, and some workers are even faced with starvation. Yet the Prime Minister's clique has been talking of prosperity and happiness.

Mr Speaker: The Prime Minister's clique. Will the Member refrain from using the word "clique" and withdraw it?

Mr Tan Cheng Tong: (In Mandarin): The Minister for Finance has also tried to cover all these brutal facts.

Mr Speaker: The word "clique" must be withdrawn because it can only refer to the Cabinet - the Prime Minister's clique. Will the word "clique" be withdrawn, please?

Mr Tan Cheng Tong: (In Mandarin): Mr Speaker, I now withdraw it.

The Minister has said in his speech that his prediction in the past was too pessimistic. He has also said that the economy of Singapore is stable and that we have not been affected by confrontation. The Minister is trying to gloss over our difficulties by such remarks, if the Government continues to be irresponsible, it will one day find that our situation will be so grave that it cannot be redeemed any more. The first victims would be the masses of the people in this country.

No matter how honeyed the words the Minister may use, we are able to find many contradictions in his speech. On the one hand, he has said that our economy has not been affected by con frontation. On the other hand, he has said that as a result of confrontation our trade and business have suffered a great blow. On the one hand, he has said we are not affected by con frontation. But, on the other hand, the statistics show that there has been a great recession in our trade. On the one hand, he has said that the country which is suffering from confrontation is Indonesia. On the other hand, he has said that Singapore can restore some of the barter trade it lost before September last year. All these contradictions appear in the Minister for Finance's speech. Which side of the picture shall we ask the people to believe'? We are not going to listen to the smear and the abuse of language delivered by the Minister. The 1.7 million people in Singapore have got every right to know the true state of affairs and how they are going to go on living. They will not be deceived by the Prime Minister when he says that in 1967 we will be able to see the results and that 20 years from now we will be able to lead a happy life. What we are concerned with is not the hollow talk of 20 years from now. What we are concerned with is our economic problem which needs immediate solution. I feel that whether the P.A.P. can continue to rule us, whether Mr Lee Kuan Yew can still be our Prime Minister ---

Mr Speaker: Order. Some ear-phones have not been switched off on the Opposition Bench. They are interfering with the proceedings. Could Members on the Opposition side please see that their ear-phones are cut out when they leave their seats?

Mr Tan Cheng Tong: (In Mandarin): What matters most is the livelihood of the 1.7 million people in Singapore, and the future of Singapore.

Let me reveal the true state of affairs to the people. Has not the Prime Minister always said that his Party comes from the people and that it will go back to the people? I ask him to be honest and let the people know the true state of affairs. They should seek the solution from the people.

There is another matter in the Budget speech which deserves our attention. We have to contribute $127 million to the Central Government. The Minister says that out of $339 million in revenue, 40 per cent of it will be handed over to the Central Government; that is to say, $127 million. This is 40 per cent of the State revenue. Mr Speaker, Sir, this is one of the greatest losses which have come about as a result of Malaysia. In order to save their own fate and in order to please the Tunku, they have now tried to hand over our financial rights to the Central Government. In the past, when the upper group of the P.A.P. were trying to form a phoney merger, we had already warned them that this was a sort of a sell-out -

Mr Speaker: Order. The phrase "phoney merger" has already been ruled upon in this House. So it should not be used. Will the Member please withdraw it? Merger was approved by the Flouse, and the phrase "phoney merger" must not be used in reference to merger.

Mr Tan Cheng Tong: (In Mandarin): Mr Speaker, Sir, I mentioned this phrase because I was referring to what had happened before merger.

Mr Speaker: Order. The phrase must be withdrawn before the Member can proceed with the speech. I wonder whether he understood what I said. The phrase "phoney merger" must be withdrawn. After that the Member can proceed with his speech.

Mr Tan Cheng Tong: (In Mandarin): I will follow your directions. I will abide by - [Interruption]

Mr Speaker: Order. I do not need any help from Members of the House. Will the Member please withdraw the phrase "phoney merger"?

Mr Tan Cheng Tong: (In Mandarin): I withdraw it.

Mr Speaker: Please proceed.

Mr Tan Cheng Tong: (In Mandarin): Mr Speaker, Sir, we had warned them in the beginning. We had hoped that the money earned by the people could be used by them on social welfare for the benefit of the people and in order to build a better society. But what is the situation now? The result of Malaysia with regard to the financial arrangements is that the Prime Minister has given away large sums of our money to the Tunku's Government. Thus, in addition to divesting our people of most of their rights, a large part of our money has been used for purposes contrary to the interest of the people. It has been used to suppress the people. It has enabled the Anglo-American imperialists to buy armaments and force our people here to become cannon fodder in North Borneo.

Mr Speaker, Sir, Singapore is now faced with a financial deficit. The position of the people is made difficult after the severance of trade with Indonesia. The people are experiencing unemployment and economic difficulties. Most of the trade and commerce has stopped. Moreover, the people of Singapore will have to tighten their belts in order to hand over more money to the Federation. This is to maintain the oligarchy of the P.A.P. Such arrangements were made during the Singapore and Federation merger talks. Without this neocolonialist Malaysia, trade would not have been severed. There would have been no need to hand over this sum of money as a present to the Tunku's Government.

The Minister for Finance (Dr Goh Keng Swee): On a point of order.

Mr Tan Cheng Tong resumed his seat.

Dr Goh Keng Swee: You have ruled that the phrase "phoney merger" is out of order. Following the same line of argument, should the Chair also not rule that "neo-colonialist Malaysia" is similarly out of order?

Mr Speaker: That is not a point of order. It is a matter of opinion.

Mr Tan Cheng Tong: (In Mandarin): If there had been no neo-colonialist Malaysia, then Singapore would not have incurred any deficit in its Budget. In the past, the Minister has claimed Budget surpluses. If there had been no Malaysia, then the State Government would not have to levy more tax on the people. The rate of postage will now have to be increased. Since the P.A.P, came to power, there have been in creases of taxes, causing difficulties to the people. There have even been taxes on minor items such as parking in car parks-[Laughter] Is it not true? There will be more taxes to come. All these have been the ill-consequences brought about by Malaysia.

The Prime Minister has stressed that Singapore is closely linked with Malaysia. Without Malaysia, Singapore cannot exist. Singapore is now faced with a situation in which she will have to contribute money for the defence and security of the whole of Malaysia. I ask the Government whether they now regret having agreed to hand over such a large sum of money to the Federation. The Minister for Finance has claimed that because of increased activity in the industrial and construction fields, the effects of confrontation have been countered to a great extent. I say that they have some effect on this. But it is not quite significant. The Minister for Finance has also claimed that there have been no effects as a result of severance of trade. Is it not contradictory to what he has just said?

Now, let us talk about another subject, namely, housing development. Superficially, the whole picture looks nice and appears as though it is beneficial to the people. There are periodic economic crises happening in all capitalist countries, in such a situation, the Government will usually resort to public construction in order to divert the economy into this field to resolve the situation, to promote our commercial activities. But it is an abnormal phenomenon. Once it reaches saturation point, the serious consequences will then appear. If our economy is not solved by resorting to measures which are beneficial to the welfare and interest of the people and the State, then there will be even more serious crises in future. The measure to resolve the present crisis in order to solve the problem of livelihood of the people is not a proper one. I now ask the Government to adopt a method which will meet with the national interest. Thus nobody will be able to exploit the situation and make money out of building houses. For instance, there are areas where there have been fires and the victims of the fires have suffered, and yet house developers have been able to exploit the situation. This is not the way to resolve the problem facing us in respect of the livelihood of the people. So, housing development is not the only way to resolve the present situation. It will not solve entirely the unemployment problem. I would like to ask, since new factories are opened almost every day, how many unemployed workers have been employed, and whether there is any solution to the economic crisis? I would like to tell the Government that, in fact, in countries such as Britain and America, there are many advanced industries and yet the unemployment situation there is more serious than in other countries.

Mr Speaker, Sir, today the industrial development in Singapore is entirely in keeping with the imperialist economic policy and meets the interest of foreign monopolist capital. This is a fact that cannot be covered up. This will only benefit the foreign capitalists. To speak the truth, such an industrial policy will only throw our door open to foreign capitalists, thus making our workers continue to be exploited by foreign monopolist capital and is not in keeping with the true interests of our nation and our people. In order to make the Ministers understand more, I would like to point out that because the licences extended to pioneer industries are in respect of manufactured products which are under the control of foreign capitalists, the prices of these products will increase. Therefore, it is entirely in keeping with the neo-imperialist economic policy.

The Minister for Finance has claimed increased industrial activity. But this cannot gloss over the fact that many people are unemployed and the conditions of service of the workers are not suitable. The Government should not allow such exploitation by foreign capitalists to continue, and try to legalise such exploitation. Everyone can see the present industrial situation. The Minister for Finance also knows that the actual effect of this is not beneficial to the people. The Minister in one of his speeches has also said that many workers have been given 50 cents or $1 by the employers. It appears as though the measure was justified, but the workers affected, especially those engaged in the garment trade, suffered the most. I will now give an example. In the countryside, there is a textile mill. New workers' wages are 50 cents to $1 each. But they have to pay a deposit of $10 first and their wages can be changed by the employers. If there are more orders, then the employers can give wages according to the daily rate. If not, then it will be on a piece rate. The working conditions are also not ideal. In the Jurong Industrial site, the mobile nature of the workers will bring the picture up to date as to what is the situation i1i relation to pioneer industries.

Thus, under the present economic policy, industrial development will lead to further poverty of the people and our national capitalists will no longer be able to raise their heads and Unemployment will increase. We have to sort these problems out and stop this forced industrial policy which can only benefit the foreign capitalists. We should disband Malaysia. We are a responsible political Party and we have to present the views of the people before the Government. I hope that the upper group of the P.A.P. will not be angry and turn round to smear us. They should seriously consider the views of the people in the interests of the people and the State.

Mr Speaker: I think it is a convenient time to suspend. I suspend the sitting and shall resume the Chair at 5.25 o'clock.

Sitting accordingly suspended at 4.55 p.m. until 5.25 p.m. Sitting resumed at 5.25 p.m.

[Mr Speaker in the Chair]

Debate resumed.

The Minister for Labour (Mr Jek Yeun Thong): (In Mandarin): The Budget for next year shows that most of the money will be spent on medicine, health and education. This proves that this Budget is the most progressive one in the whole of South-East Asia. Of the amount of $339 million in respect of expenditure for next year, a sum of $221 million will be spent on social services. In other words, more than two-thirds of the Government revenue will be spent on the construction and welfare of our society. In the Development Estimates, we have a total figure of $293 million, of which $24 million will be spent on education, $3.5 million on health, and $125 million on national development in respect of the construction of roads, bridges and drains. So whether it is in the Annual Estimates or the Development Estimates, one can see the reflection of a special feature, and that is, the Government regards the improvement of the livelihood of the people as more important than anything else. This is precisely the principle of socialism, of obtaining money from society and using it on society. In other countries, the greater part of the national revenue is used for the purchase of aeroplanes, guns and military expansion, or on the construction of such white elephants as a national stadium and luxurious hotels, while the people there have to live in great difficulties.

The Financial Statement of the Minister for Finance has given a comprehensive analysis of the economic situation in Singapore. In his conclusion, he says, in the next few years our economic future is rather bleak. But, he continues, if we carry out with determination our industrialisation programme, then we shall be able to overcome the temporary difficulties and go on our way to nationhood and national construction. The way of industrialisation is the correct way. It is the way any new emergent nation should take towards economic independence. Just now, the Member for Jalan Kayu has said: What is the use of this present industrialisation programme? Although in America and Britain, industry is well developed, a lot of people are still unemployed. My reply is that this argument is tainted with Marxism and Communism which denies the achievement of industrialisation. According to his logic, we should not resort to any industrialisation; we should not open up any factories or do any business! That is a very negative way of thinking. The stand of the Communists is that this should be so in their struggle, because if they can bring all industries to a standstill, then the people will be unemployed and there will be discontent among them. The Communists can then take advantage of this position in accordance with their so-called "revolutionary activities". But if you take the history of the world in general, you will see that in every country where there is a genuine desire to build up its economy, an industrialisation programme is a must; it is inevitable that such a programme should be carried out.

It is not to be denied that, as a result of the last one year of Indonesian confrontation and the two occasions of disturbances in Singapore, there has been some decline in commerce and trade. Merchants and businessmen will tell you that times now are not so good as they were before. Now what are we going to do about it? Mr Speaker, we must first find out the causes that have brought about this situation, and then we can prescribe the medicine or find a remedy for them. Members of the Barisan Sosialis have said that all these difficulties have been brought about as a result of the formation of Malaysia. On the face of it, this may be sp; but I say that the matter is not so simple as they make it out to be. Malaysia, basically speaking, is a healthy scheme which is accepted and supported by the people of the four countries and by many countries in the world. How can the Barisan Sosialis say that the scheme to form Malaysia has brought about difficulties is that the Indonesians are giving is trouble and, sad to say the Barisan Sosialis are helping them to give us more trouble.

Actually, Malaysia and Indonesian should not interfere with each other. Indonesia's economic bankruptcy shows up the inability of their leaders. The economic prosperity of Malaysia, on the other hand, is a blessing that we should be proud of. But because the belligerent elements in Indonesia desire to swallow us up and make use of Malaysia as an excuse, like West Irian, to divert the attention of the Indonesian people from their economic embarrassment and difficulties, they have therefore resorted to giving us a great deal of trouble. Because of all these factors that I have just mentioned, the Indonesian belligerent elements, who are burning with ambition and who are trying to put the blame for their economics bankruptcy on others, have found a scape-goat in Malaysia, such difficulties would still have befallen us.

Another factor is that the economy of Singapore is dependent o the entrepot trade - it is an entrepot economy basically speaking. As the Barisan Sosialis Members have said, we have to live on an entrepot economy has its weaknesses. Generally speaking, entrepot trade is doomed to decline in South-East Asia, with or without the establishment of Malaysia. It is only a matter of time when such a decline will come about. Mr Speaker, Sir the first weakness of an entrepot economy is that it is unable to maintain the livelihood of many people. In a thinly-populated country, it may bring about an ephemeral prosperity; but in a country where the population is fast increasing, this kind of economy will not be able to maintain its population, and there will be general unemployment.

Hong Kong is one of the famous entrepot ports in Asia, but it is not only the entrepot trade that maintains the livelihood of the majority of its workers but also the industries that have been established there after the war.

Mr Speaker, the second weakness of an entrepot economy is that it must necessarily depend on neighbouring countries. We cannot have a big say or any say at all, as ours is an economy which is dependent on others, If the economy of our neighbouring countries is getting prosperous, then they will try to do away with having to pay commissions to middlemen in entrepot ports; entrepot ports will not be welcome by them. On the other hand, if the economy of our neighbouring countries is on the decline or even on the brink of bankruptcy, then their purchasing power will be very much weakened and this again will bring about a decline in our entrepot trade. So it cuts both ways. Furthermore if our neighbouring countries are hostile, then it goes without saying that we will lose all our entrepot trade with such neighbours.

There is only one condition under which entrepot trade can flourish and that is if all our neighbouring countries arc colonies, so that we will be able to make a profit. This goes to show that in this respect we can have no say. We have to depend on our neighbouring countries to earn our livelihood.

Since the last War, the entrepot trade in Singapore has been declining. This is not because we have made enemies of our neighbours who do not come to do any more business with us. It is because after the War, many colonies, one after another, became independent countries, and they want to maintain their economic rights and do away with their dependency on foreign entrepot ports. Even in the case of Malaya, before the formation of Malaysia, it spent a large sum of money on the development of its own port - Port Swettenham - so that its dependency on the port of Singapore may be reduced in spite of the better facilities that we are able to offer it.

So, one can see clearly that every country thinks in terms of its own interests. Every country tries to export its own produce directly to foreign markets and also to buy directly from such markets the consumer goods that they want, so that it does not have to pay any commission at all.

Mr Speaker, no country in the world will allow the life-stream of its economy to be in the hands of foreign traders and businessmen. So, even without the formation of Malaysia, it would have been a matter of time when we would have to give up our dependency on entrepot trade with Indonesia.

Another point is that the greater part of our trade with Indonesia lies in barter trade. Actually, barter trade is a euphemism for "smuggling". Even many years before confrontation started, the Indonesian Government had asked us to stop this kind of smuggling trade or business, because they had discovered that it had contributed to their economic bankruptcy. The Indonesian Government blamed the smugglers for their failure and losses in the economic field. They felt that smuggling had brought about big losses to the Indonesian economy. Indonesian rubber in great bulk came into Singapore in this way and Indonesia was therefore unable to earn any foreign exchange. Now what has happened to the money that was earned'? The building of the Indonesian Consulate in Singapore - the building which the Prime Minister has referred to as "the building with a golden roof" - cost about $2 or $3 million. Now, where did they get the money to erect this building? Did the money come from the Indonesian Government? No, because they have been in a state of poverty as a result of inflation. How then could they have afforded to pay hard cash to build such a glamorous and wonderful Indonesian Consulate in Singapore? The money came from Indonesian businessmen. Now, where did they get the money? Of course, wool comes from sheep; so, needless to say, the money came from the sale of Indonesian local produce.

From all this, one can see a number of anomalies. Indonesia produces and sells rubber and yet it is in a state of poverty and even on the brink of economic bankruptcy, so much so that its people have to live on rats and corn. On the other hand, we are only an entrepot centre and yet we enjoy economic prosperity and even had a surplus from year to year. Of course, this annoys Indonesia. So with or without Malaysia, in the event of Indonesia trying to reshuffle its economic affairs, it must necessarily try to stop this kind of business and trade. After the formation of Malaysia, they found an excuse to stop all trade with us over-night. In my view, even without Malaysia, Indonesia would have severed trade relations with us step by step.

This, Mr Speaker, is the general and inevitable economic trend in South-East Asia. It is in the interest of every nation to establish economic independence. So, how can one say that all the present difficulties we are facing have been brought about by Malaysia alone? The question now is whether we should have an economy dependent on others or find another way to support ourselves by our own means. If that is the question, then I say that Malaysia's industrialisation programme, coupled with the common market, is the one and only solution. As a result of the failure of their businesses, some people think that Singapore should withdraw from Malaysia and do business with Indonesia as a neutral State. I say that this is impossible. If we withdraw from Malaysia, irrespective of whether how long we can do business with Indonesia, where do we actually stand? Assuming that we did not join Malaysia, where would we be standing now? Our country is too small to be independent. Even if we should become independent, we would still have to depend on the protection of foreign bases to survive and from being swallowed up by our bigger neighbours. Foreign bases would still remain in Singapore and they would continue to be an eye-sore, as far as Indonesia is concerned. So confrontation again would be inevitable and there would not be any business done between Singapore and Indonesia. If, on the other hand, we did away with all the foreign bases, then at once we would be swallowed up by Indonesia.

So, whether military bases are here or not, we will be at a disadvantage. Now if we do not emerge as an independent nation, then in what form can Singapore emerge'! Bearing in mind that Singapore is only a sniall island, are we going back to the colonial days and living under the umbrella of British colonialists? No, this will be putting back the clock. Are we going to maintain neutrality? in that event, we shall be sandwiched between two big neighbours, namely, Indonesia and Malaysia. Now, have we got the power and the strength to stand between two such neighbours?

Singapore is, strategically speaking, a very important place, in the event of Malaysia and Indonesia struggling with each other. So, either of these two will try to swallow us up. In such an event, we would rather be with Malaysia than with Indonesia, because we know the kind of life the Indonesians are living. This is a difficult way towards nation building. These are the difficulties we have to experience.

The Minister for Finance has coined a slogan in his statement which is very clear and short, i.e., through industrialisation and a common market, we must lead our people Out of their present economic difficulties. Our present task is two-fold. On the one hand, we have to spend on social reforms within our revenue and lay the foundation of a welfare State, so that the seeds of socialism may be sown widely in the whole of Malaysia. On the other hand, we have to try to tide over the present economic difficulties and withstand Indonesian confrontation. This task is not easy, Mr Speaker, but we will try our best to accomplish it. We are prepared to sink or swim with the people.

Mr Speaker, the greatness of a nation or a people does not lie in military strength. I would say it lies in this - how the people can accept the challenge of the day; how the people can withstand the test of time. We shall not bow to our enemies and we shall not succumb to our difficulties. Only in this way can we stand in this world.

5.52 p.m.

[Mr Deputy Speaker (Dr Fong Kim Heng) in the Chair]

Mr Ong Lian Teng: (In Mandarin): I predict that the next financial year will be more bleak and worse than this year's. This year we have already had a $23 million deficit. I believe that next year's deficit will exceed it. This is my understanding on reading the Financial Statement and after making an analysis of the Malaysia situation. No matter how the Minister for Finance tries to negate the repercussions of' Indonesian confrontation, the facts which cannot be covered up are that we have had a trade recession.

Now, let me make a comparison of the trade before and after Indonesian confrontation. According to my data, for the first quarter of this year, the export trade of Singapore was in the region of $3,376.9 million in terms of value. But the figure for the corresponding period of last year was $4,703.8 million. Thus, there was a difference of $1,389 million. In exports, the figure for the first quarter of this year was $881 million, and the figure for the corresponding period of last year was $396 million. Thus, the increase was 31 per cent. According to official statistics, before the Indonesian confrontation, the total value of trade between Singapore and Indonesia was $90 million, 70 per cent of which was from Indonesia. The exports from Singapore to Indonesia were 30 per cent. Taking an average of $90 million a month, in one year the annual trade between Singapore and Indonesia was in the region of $1,080 million. Assuming that our businessmen could make a 15 per cent profit out of it, there would be $162 million for our national income. The loss of $16 million in our national income could only be felt by the taxi-drivers and small businessmen and hawkers, because they were directly hit by the trade severance.

Most of our trade with Indonesia has stopped, apart from some trade between Singapore and Hong Kong. According to my estimate, the taxi-drivers have suffered a 40 per cent loss of their income, and some hawkers have pulled down their pitches. Some workers have not yet been able to find alternative jobs. Businessmen have not been able to find alternative openings for their capital. Throughout the whole island people are talking about thrift. They want to be frugal in their food, clothing and other daily necessities. They even want to be thrifty on enter tainment. They have cut down their smoking, which has resulted in a decrease in our revenue from entertainment and tobacco. All this has been brought about by Indonesian confrontation. It has also been brought about by the so-called happiness and prosperity resulting from Malaysia.

To restore trade between Singapore and Indonesia would be beneficial to our people. All trade throughout the world is based on mutual interest and mutual benefit. Without any political strings, I believe that trade between Indonesia and Singapore can be reestablished. The only obstacle in the way of restoration of trade between Indonesia and Singapore is the neo colonialist Malaysia and the sabotage carried out by the Alliance Government and the P.A.P. Government. Unless the Alliance Government and the P.A.P. Government correct their mistakes, trade between Indonesia and Singapore will not be restored. Our Government always abuse the Indonesian people by saying that they eat rats and corn. This abusive language will not help to solve our economic problem. The people of Singapore will not derive any happiness from the fact that the Indonesian people are eating rats. I feel that this is political propaganda, to create a feeling of hostility towards the Indonesian people. It is similar to the propaganda put out by the Lim Yew Hock regime and the P.A.P. Government when they say that the Chinese people on the Chinese mainland are eating the bark of trees and straws. Such cynical propaganda will not help us anymore. What we are concerned about is that trade between Singapore and Indonesia should be res tored. According to the Minister for Finance, trade relations between Singapore and Indonesia will not be solved next year. Malaysia is now trying to arm itself by embarking on armament. There are only two ways open to us. First, to seek a solution in order to restore our trade; and secondly to make use of armaments for mutual suicide. If we are asked to make a choice, we will unhesitatingly choose the first one. I believe the P.A.P. Government and the Alliance Government are not prepared to do such things, because that would not be beneficial to them as they are afraid to embark on this course. It will also not be beneficial to the Anglo-American imperialists. The Party in power is not going to solve our trade problems by a political solution and abandoning the lines of Anglo-American imperialism to change our foreign policy to implement inner democracy. I believe that these are the things that we should do. We should re-establish friendly relations between these two countries.

The Parliamentary Secretary to the Minister for Social Affairs (Mr Chan Chee Seng): Mr Deputy Speaker, on a point of order.

Mr Deputy Speaker: What is the Member's point of order?

Mr Chan Chee Seng: This has nothing to do with the Budget itself.

Mr Deputy Speaker: Will the Member proceed with his speech and stick to the financial policy of the Government?

Mr Ong Lian Teng: (In Mandarin): Mr Deputy Speaker, Sir, this is the only way to be free from the control of the big Powers. It is not the way by which we should sell our country. The Indonesian economic confrontation and its effects on our people cannot be covered up. Lt is a brutal fact and a reality and the Minister has tried to cover it up, because if it is made known to the people, then they will rise up against him. It also shows that the Party in power is not willing to solve our problem. In his financial speech the Minister has talked about the failure of Indonesian confrontation. But may I ask, who is the victor'! It is a fraud on the people to say that we have not been affected by Indonesian confrontation. To say that we are the victor, what have we won'! On the contrary, we have lost trade amounting to millions of dollars. Workers, hawkers and taxi-drivers have suffered hardships. Can you term this as a victory'! Now, when the P.A.P. talks about victory, it means that the people are suffering. Therefore, we cannot deny that the severance of trade between Singapore and Indonesia has done greater harm to the people of Singapore. The Government should find ways and means to solve this problem. It should pay attention to this problem.

I will now deal with the Budget. Mr Deputy Speaker, Sir, according to this year's Budget, there is a deficit of $23 million. The P.A.P. is forced to admit that this has been brought about by Malaysia. The Minister for Finance may be anxious to get two sums of money from the Central Government. The first sum of money is the contribution by the Central Government to the University of Singapore, namely, $12 million; and the other sum of money is the profits of the Currency Board prior to the 31st August, 1963. These two sums total $23 million. Even if these sums of money were handed to Singapore, we would still incur a deficit of $7 million, and it is doubtful whether the Central Government will hand over these two sums of money to Singapore. Moreover, we have to contribute 40 per cent of our State revenue to the Central Government, amounting to $127 million. In the past, the Minister boasted of a $50 million surplus, but from this year onwards we will incur a $23 million deficit. Plus these two sums, it means there is a deficit of $73 million. The Minister has cautioned that we should be more careful in our expenditure. This only shows that expenditure has increased so much that revenue cannot catch up with it.

Secondly, our contributions to the Central Government in the fields of defence and other services have been too much. Mr Deputy Speaker, Sir, the so-called too much expenditure and too little revenue is not a very good pretext. Does the Minister mean that certain revenues are being spent on unnecessary and unworthy things? I feel that the reason is not merely that, but that it is because we have been paying too much to the Central Government. The Minister says that there has been a rapid increase of expenditure. In fact, this should not occur. In comparing the 1965 Budget with the 1964 Budget, there is an increase of $13.7 million in expenditure. The expenditure for 1962 was $392.4 million. This figure, when compared with this year's $326 million, shows an increase of $66 million, and is $53 million more than that of next year. This shows that our economy is retrograding and is not getting better. I will give Hong Kong as an example. From 1951 to 1961 the Budget has increased from $170 million to $1,010 million, an average of $90 million increase every year. According to our figures, we should have increased by $40 million per year, but our estimate for next year is $53 million less than that for 1962. How can the Party in power explain this fact? One thing which we should bear in mind is that our contribution to the Central Government in respect of defence and other Federal Departments will cause a bigger deficiency in our Budget. The results of the Alliance Government's expansion in armament will naturally bring more bur den to the people. The people of Singapore have no obligation to share this burden, because they do not have equal citizenship rights and cannot participate in decisions such as defence and cannot attack the Central Government on any policy in this field. In the event of war, I feel that it is not right for the people of Singapore to shoulder such a responsibility to contribute to the Federal Government. If the Federal Government were to ask the people of Singapore to shoulder such an extra burden, then the people of Singapore would have to tighten their belts and there would be more suffering. Mr Deputy Speaker, Sir, although the Minister for Finance has said that we should contribute towards the defence of the Central Government, I do not know whether it has been stipulated in the 40 per cent White Paper arrangement. Perhaps it is over and above that. I want to reiterate what the Minister has said to prove one fact. He has mentioned in his Budget Speech that the main revenues are from income tax, taxes on liquor, petroleum and tobacco, road tax and estate tax - all this revenue belongs to the Central Government. Therefore, any change in the rates of taxes by the Central Government will have an influence and effect on our revenue. Now it is very interesting to talk about the discretion to change the rates of taxes. It also means that there will be a change of 60 versus 40 per cent distribution of taxes. According to the Central Government's economic plan, it is really to cut the fat from the people of Singapore. As a result of changes in the rates of taxes exercised by the Central Government, Singapore's contribution will be increased from 40 per cent to 50 per cent. Thus the P.A.P. will have to explain to the people such a sell-out.

I ask the P.A.P. whether next year the Central Government will try to change the rates of taxes pertaining to Federal revenue and whether, because of expenditure on armament, the reserve fund of the Central Government has decreased. They are talking about increasing taxes. Even trunk-call taxes will be raised. And the Minister for Finance pretends that he does not know anything about it! He says that at this stage we do not know anything about the Federal Government's plan to change the rate of taxation. Our revenue estimates have been based on our assumption of the Federal decision on taxes. Does the Minister mean that he does not know anything about the changes by the Federal Government in respect of taxes? Does he mean that it is a unilateral action exercisable by the Federation Government alone, and that the P.A.P. Government does not know anything about it? This only shows that the P.A.P. is shirking its responsibility to the people.

For the next year, our revenue will decrease by $1.7 million. According to what the Minister has said, it is because currency profits and port dues have gone over to the Central Bank. Now, this is concrete proof of the P.A.P.'s sell-out. Perhaps next year there will be more factories asking the Min ister to officiate at their opening ceremonies! But the main economy of Singapore depends on entrepot trade, and such a situation cannot be changed overnight to an industrial one. Therefore, the reduction of entrepot trade would naturally seriously affect the economy of Singapore. Yet the Party in power, to cover up its weaknesses, is still claiming that several factories will be opened every week. I should say that the industrialisation policy should be coupled with the reduction of those unemployed. The reduction in exports and the increase in imports have caused an unfavourable economic balance and have caused suffering to the workers. If the people allow a large amount of foreign capital to come into Singapore, then Singapore will only become a great factory for the foreign capitalists and the workers will have to sell their labour to such capitalists for very poor wages. The situation is already clear at the Jurong industrial site. Their wages compared with those for workers in other fields are very poor indeed. My colleague has just mentioned that their wages range from fifty cents to one dollar per day. Their situation is very difficult. To use a phrase, they are in a state of semi-starvation.

Mr Deputy Speaker, Sir, the Minister for Finance has said that the next financial year will be quite bleak. We can also see that, because it is full of pessimism and we do not have any optimistic evaluation of the situation. Perhaps the situation may even get worse, much worse than what the Minister for Finance has envisaged.

I want also to mention the hopes of the people of Singapore. They hope that they can resume trade relations with Indonesia as soon as possible. The Party in power should help local capitalists to industrialize. In fact, the livelihood and living standards of the hawkers, taxi-drivers, Government officers and teachers and farmers should be raised. The Government should help them. It should adopt a non-aligned policy, have close and friendly relation ships with Afro-Asian countries, expand our trade, and establish good neighbourliness with our neighbours. Thus there will be hope for industrialisation in Singapore.

Mr Ho See Beng (Bras Basah): Mr Deputy Speaker, Sir, I should like to congratulate the Minister for Finance on presenting a Budget which appears to reflect the optimistic outlook of the State and her readiness to overcome the economic effects of Indonesia's confrontation. At the outset, the Minister for Finance has understandably stressed the magnitude of confrontation and the impact it has on the economy of Singa pore. Nevertheless, he has also maintained that the economy during the initial stages was able to recover from the after effects of Indonesian confrontation.

Unlike the Opposition Party, we do not deny that confrontation has resulted in additional men and women being thrown out of employment. We are fully aware of the fact that we have to live with confrontation and, as such, the economy, to a certain extent, has to be re-orientated in such a manner that we can stand on our own feet and not depend on Indonesian trade alone. Unlike the Barisan who want us to be slaves to trade with Indonesia, we cannot afford to be a vassal of another foreign country for the sake of trade.

Sir, we have our own national dignity, prestige and pride to be a part of an independent nation, that is, Malaysia. That being the case, even though the curtailment of the trade between our country and Indonesia has resulted in severe setbacks to the economy, such offsets to the economy are only temporary in nature and, as such, ways and means have to be found to overcome them. I do not, for a moment, minimise the significance of the adverse effects on the economy arising out of the Indonesian economic blockade. We have to live with confrontation and at the same time we must find ways and means to reorientate our economy on a sound footing. In this connection, Sir, the Malaysian common market which appears to be still in the offing and which has not been fully implemented up to now, should necessarily take effect immediately.

The Central Government, which has agreed to a Malaysian common market, must honour its pledge specially at this juncture when Singapore is badly in need of a catalyst to accelerate the pace of economic activity, not only to recover from the economic offsets but also to carry on the positive programme of in dustrialisation. The Government at Kuala Lumpur should extend its full co-operation to the State and permit the State's economy to recover from its recent offsets. The Malaysian common market, as far as Singapore is concerned, is a necessity.

The Jurong Industrial complex will have no meaning at all unless a market is assured for most of them in the Malaysian region. In this connection, it is heartening to observe that the industrialisation programme at the Jurong industrial estate and the other measures taken by the Government to absorb the unemployed have borne fruit. Nevertheless, I feel it is essential that, before we plan our future and put our economy on a sound footing or take measures on industrialisation programmes, we should necessarily be aware of the prevailing situation and the not too bright employment situation.

As a representative of the people, Sir, practically every week during the meet-the-people sessions, I am facing unemployed youths who approach me with a hungry look and a pathetic expression on their faces. I feel so unhappy, Sir. Since I am not the Minister for Finance, I cannot quote a few figures to convince them that the situation after all is not so bad. Unless the State implements policies with an eye to employment op portunities, these unemployed youngsters are bound to fall prey to Communist propaganda, and we in turn are indirectly rendering a helping hand to recruit more youths to the Marxist doctrine. Sir, this is indeed a grave situation and only a crash programme will solve the unemployment situation. The State's entire economy should be placed on a war footing, and no efforts should be spared to see that the Government's programme for industrialisation, with emphasis on a labour intensive approach, should be implemented with the minimum of delay. I can observe the shadow of Communism appearing on the Opposition benches of the Barisan Sosialis, ready to grab our youths and make use of them as guinea pigs to propagate ideals which are contrary to our democratic principles.

[Mr Speaker in the Chair]

6.30 p.m.

Mr Ho See Beng (Bras Basah): Our Ministry of Culture's tirades against Communism will not be effective unless they are supplemented by challenging economic policies so that, in the eventual analysis, it will be realised by the public at large that the Government's economic measures have really resulted in a solution to the unemployment situation prevailing in the State.

Mr Speaker. Sir, when analysing the Budget in detail, I find that, unlike previous years, this year's Budget appears on the deficit side, but the days are gone when those who believed in Gladstonian economy would applaud the Minister when he submitted a surplus Budget. When public projects have to be financed and when welfare economics gets more prominence, a deficit Budget only reflects the amount of economic activity that is going on in the State. As such, I would rather applaud the Minister for Finance for presenting a bold Budget which essentially caters for the interests of the common man in Singapore. It also reflects the Government's determination to utilise the resources of the country in such a manner that the have-nots will eventually benefit.

Sir, I shall not want to go further in detail since all of us are in possession of a copy of the Budget speech, but a thorough analysis makes one think for a moment that the Government is going ahead with its gigantic programme for industrialisation and reduction of unemployment. It is its intention to provide more social services and also to ensure that children of school-going age get the facilities to continue their studies. We must understand that in this particular year, the State Government has been subjected to additional strain. Still it is determined to make an effort to establish a socialist pattern of society within the framework of democracy. All-right thinking men inside this Assembly as well as outside it should give their unqualified support to the measures taken by the Government to put the economy on a sound footing.

Mr Lim Huan Boon: (In Mandarin): Mr Speaker, Sir, I wish to speak only shortly on the direct factors causing the present difficulties in our economic field. The 1965 Budget generally says that the financial year shows that the recurrent $50 million surplus has gone. It says, with a note of despondency, that the P.A.P. Government is not only unable to balance our economy but also that there has been a deficit of some $20 million. The Minister for Finance, in sketching the picture, says that the situation is rather severe, because in the short space of one year after the formation of Malaysia, the Singapore Government has to come from a state of surplus to that of a deficit. Mr Speaker. Sir, the economic changes are drastic and severe. Why should that be so? The Minister for Finance has not dealt with the real causes, but it is not difficult for us to find out what they are. First, there has been a decline in the export and import trade. For the first half-year the import total came to only $1,362 million. There was a difference of $427 million. The export figures for the first half year show that it was $881 million. Compared with the figure for last year, there was a difference of some $396 million. This figure, Mr Speaker, Sir, was only 31 per cent of last year's. It was below some $823 million compared to the figures in the period before Malaysia. This drop actually has been brought about by Malaysia. That is the first point.

The second point, Mr Speaker, Sir, is this. We have been making -

The Prime Minister (Mr Lee Kuan Yew) rose -

Mr Speaker: If the Member will give way.

Mr Lim Huan Boon: I will not give way because time is running short. I have very little time left.[Interruption]

(In Mandarin): We have been making too much contribution to the Central Government. The contributions that we have to make to the Central Government include the sum of $120 million which we would not have to give away without Malaysia, and which we could have used for our own people if Malaysia had not been formed. Therefore, on the side of expenditure we would not have to be so cautious as the Minister for Finance has suggested that we should be. Thirdly, Mr Speaker, Sir, another factor of the present economic difficulties is this. We have been rather weak in the face of the Central Government. I can give you one clear example to illustrate this point. The Minister for Finance in his statement mentions that the severance of trade between Singapore and Indonesia is a great blow to Singapore as far as we are concerned, but he has not got the courage to suggest to the Central Government to re-establish trade, and the barter trade in particular, with Indonesia. When the Central Government imposed this ban on barter trade, the people affected were very unhappy and wanted the Central Government and the Singapore Government to find a solution. According to estimates, there are some 200,000 persons directly or indirectly affected by this ban on barter trade. For the sake of our economic future, I urge the Government to review the Malaysia scheme and break away from foreign control before we can really solve our own problems.

Mr Poh Ber Liak: (In Mandarin): Mr Speaker, in his Budget Statement the Minister for Finance says that tile present economic situation is very stable in spite of Indonesian confrontation, that it has not affected us very gravely. I wish to show with facts that his statement is only good-looking superficially. The people of Singapore know that in the famous amusement parks like the Great World and Happy World, business was very good at night. But in the space of one year of Malaysia's formation, our so-called prosperity has made the amusement parks rather quiet and deserted. In one of the amusement parks, admission is now free, but in spite of that, visitors are very few in number. Shops in this amusement park have no business to do; some of them have closed down. In the case of the Gay World, formerly known as the Happy World, we can see that shops which were very busy in the past have to close down and have to auction their furniture. This is a good illustration to show the falsehood that our economy is stable.

Mr Speaker, Sir, now we come to examine the extent of the so-called stability of our economy. If you go to South Bridge Road, you will see that there is one shop known as One Million which was very flourishing and prosperous in the past, before Malaysia. But after one year of Malaysia, in spite of the so-called economic stability, this shop has to close down and some of the goods have to be auctioned on the five-foot way. There are other businessmen and merchants who have had to do less business. They tried to recover their bad debts and do a minimum of business. The business done this year has not been enough to keep the shops going. They have to continue the wholesale business in order to try to recover their old debts. We know that in the business world of the Chinese community, it is a matter of trust, and business is done on credit. The wholesalers will give goods on credit to the retailers, so they have to maintain a minimum wholesale business in order to try to recover their debts from the retailers.

Now let us take a look at the rubber factories. What is the situation! The Minister for Finance should let us know that there is widespread retrenchment in the factories. He should tell the world how many workers have been retrenched. In the past, business generally was quite brisk. But there is now an anomaly. Instead of the shops doing good business, we have more and more pasar malam. A lot of hawkers do business in pasar malam. This should not be taken as a reflection on the prosperity of the business world. On the contrary, it shows that the shops and industries in Singapore are on a trade decline. There are more and more hawkers in pasar malam. Why should that be so? It is because many workers have to leave their factories, and in order to earn a minimum livelihood, they have no alternative but to buy some goods and sell them at the pasar malam. Or some of the shopkeepers, because of business failure, have to sell their goods on tri cycles in the night markets. As a result of this, there are more and more hawkers in the pasar malam and less and less shopkeepers.

In the past, night in Singapore was full of life - busy, with a lot of people going out to enjoy themselves. In fact, in those prosperous days one could hardly distinguish between day and night as far as activity and enjoyment were concerned. But what is the present situation now'! Buses are not full, a lot of taxi-drivers are without passengers, and less and less people go out at night. So the so-called prosperity, in spite of In donesian confrontation, is not as good as what the Minister for Finance wants others to think.

Talking about industrialisation, it is not in a position to solve our economic ills. Can industrialisation enable businessmen and investors to recover their capital? To what extent is it beneficial to the workers? Can our local products be competitive in price with foreign goods, whatever the source of raw materials'! Where is the market for our local produce? At a time when we have foreign bases in our country and when we are making enemies with the world at large, how are we able to expand our market for local produce? The Minister for Finance is not able to give any answers.

We cannot deny that there are more and more houses in Singapore. But, on the other hand, there are more and more people losing their homes in fires. The lower income group is not able to occupy beautiful flats. The building industry is not in a position to create more employment opportunities for the poor people. So the poor people cannot afford the rent to stay in flats. They would rather stay in attap huts, because they can only afford a low rent. So the construction programme is of no benefit to the poor people.

Talking about overhead bridges and parking lots, these measures are to some extent helpful to traffic. But this is of minor importance, because we must first fill our stomach with food. The multistorey car park is of no use to a starving population. The people cannot fill their stomach with the beautiful overhead bridges, like the Bailey bridge at Clifford Pier. So we feel that the failure of the Government to give a reasonable means of livelihood to the people is attributed in a large measure to the loss of our entrepot trade.

If a new People's Government is not established, and so long as the present Government is still under the control of the British, it is no use talking about industrialisation when we are not politically independent. The port of Singapore is coming to the end of its prosperity. If we do not scrap all the pacts that we have signed with foreign countries, and if we do not toe the line of the non-aligned Afro-Asian countries, then whatever plans you may have for industrialisation you cannot carry them out because you do not have sufficient raw materials and a big market for your products. Malaya and our neighbours will not help us to expand our market for local manufactures, and even if Malaya is prepared to give us some market, do you think that it can accommodate all the produce that we can manufacture here?

At the present moment, the question of a common market has been highlighted by the Singapore and the Federation Governments. They think that the common market will provide a good outlet for our manufactured products. I say that so long as neocolonialism is not done away with, a common market is of no help to the poor people. Merchants in Singapore will, with the advent of the common market, lose a lot of business in entrepot trade. More and more people will have to pay higher prices for consumer goods, and foreign goods at competitive prices will be blocked by the common market. So if you want to enjoy cheap and good products, you have to pay more, otherwise you will be forced to buy local produce.

If industrialisation can really solve the problems of the people, then we will give it our support. But the future of industrialisation is very bleak. How many merchants and workers can the industrialisation programme accommodate - all these people who have been affected adversely by Indonesian con frontation'! To solve the problem of the people of Singapore, I feel that it is important that we should come to a certain understanding with the nations in South-East Asia. We must shake away from the influence of the British and the Americans, and we must establish friendship with nations of South-East Asia. We must re-establish the trade ties that existed before Malaysia. This is the only concrete way.

6.55 p.m.

The Prime Minister: Mr Speaker, Sir, one expects the Opposition at Budget time to make the most of its opportunity to paint the worst possible picture of the health of the country. And at the end of it all - if it is a democratic and constructive Opposition - one should hear how things could be made better, why some of the things that we have been doing have not been enough, and how they can be improved upon. From our Barisan opponents, we get one consistent refrain - Malaysia is a neo-colonialist scheme; Malaysia has brought disaster to the people; nothing will resolve our problems: not the common market, not this capitalist way in which more money will be made by big business. They play only the neutral line: that the dissolution of Malaysia, somehow or the other, will become a chung li kuo chia (neutral), that all will be well, and that the Indonesians will leave us alone if we start trade with them. Ultimately, according to the Member for Tampines, who hinted the way to do it is to have a real Communist economy where there will be no unemployment and where everybody will be put to work.

From the other Member of the Opposition, the Member for Hong Lim, there is the usual opportunist tailism. He harks back with nostalgia to colonial days when all was well. When we were in charge of the Police, the policeman saluted the Prime Minister, and even the Mayor. But now all the powers are gone. We have been emasculated. We have been robbed. The country is going to the dogs.

Mr Speaker, Sir, let me try to put, not just to the Opposition but to Singapore at large, what were the two extremes - the best we could have had for Singapore and the worst which may yet come about if we do not watch out. Paradise for Singapore would have meant a common market, no charges for water supply, full trade with Indonesia, with Malaya and the rest of the world, the continuance of our bases, and independence guaranteed by some mutual or multi-lateral defence pact. That would have provided us with the ideal - paradise. No need for defence commitments; we just keep one Infantry Battalion for ceremonial purposes. In the colonial days we did not even have to do that. We got the British to pay for all that. They defended us because it was their territory. But, unfortunately, the world does not owe Singapore a living. The Indonesians do not have to trade with us. And we knew as early as 1959 that it was their intention, at the first convenient opportunity, to cut off their trade with us. And every year our man in Jakarta gave us regular reports of their plans to cut off this trade sooner or later. Hence the importance in all those years of finding a more permanent and stable basis of survival.

I tell the Members opposite what would have happened if we did not take the precautionary measures that we did if we did not get a common market. If we had zig-zagged in the reckless and dangerous fashion of politics in Singapore of the 1950s, not only would we have confrontation with no trade with the Indonesians, but worse - we might have "double confrontation" with no trade with Malaya or Sabah or Sarawak, no common market, and with water problems. And to cap it all, if we were to follow the wishes of the Barisan Sosialis and abolish British bases, it would mean that one-quarter of the whole economy would be gone. There would be 50,000 unemployed tomorrow. Then we would really hit rock bottom. I am not suggesting that one year after Malaysia we are bouncing with prosperity. We are realists. When confrontation came, we worked out the figures. The total amount of trade we did with Indonesia was 20 per cent of our total entrepot trade. I was curious to ask the Member for Bukit Merah where he got his figures from, because immediately after confrontation, we decided to publish no further figures in order that we should not help the Indonesians to know how much of their rubber or copra still comes back, either by barter traders in small craft or via Hongkong and Japan. Definitely for the last year, as can be seen from the revenue, they did not knock us out for the full 20 per cent of the entrepot trade. How much they did knock us by is their guess-work, because we have not published our figures. But definitely not by 20 per cent. If today we were still a self-governing Singapore, without a common market, we would be facing a much more acute situation.

Let us be quite frank about this, Mr Speaker, Sir,I have said this once publicly - it has not been picked up in some of the Press - that feelers have been sent out to me that the In donesians would resume trade if we backed out of Malaysia. They have sent all kinds of feelers, and this is one of them. I ask the Members opposite, and I ask the people at large, to calculate. Where does our long-term interest lie? Not just the day after tomorrow. Five years hence, ten years hence, 20 years! Suppose we are out of Malaysia the day after tomorrow; so the trading craft come back; so we are all friends again. Is that the end of the story! For the last seven years, the Indonesian Consul-General and his Consulate staff here have spent a great deal of effort in setting up little nests of support, not for a flourishing independent Singapore, but for the kind of movement which they prematurely triggered off last year, before their plans were fully matured. I sent back an answer to that feeler. I said, "Do you object to British bases in Singapore?" There was no answer. Tile line is the official line. "Why are we against Malaysia! Because it is a neocolonialist plot which threatens Indonesia." "How is Indonesia threatened?" "Because the British bases are in Singapore." Now, these bases in Singapore will be objectionable whether we are in Malaysia or whether we are out of Malaysia. Simple, is it not? So we move out of Malaysia. So the bases are still as objectionable. Then what happens?

But I congratulate the Barisan Sosialis on being consistent, which the Member for Hong Lim never has been. They want Malaysia scrapped. They are against it, lock, stock and barrel. There will be paradise only when this whole neo-colonialist society is scrapped and they build afresh their Communist millennium. Yes. Let us be frank about it. The Member for Hong Lim knows that he is in trouble in that situation. He has got no chance of running around with wild men. He can only talk wild. But these people can act wildly. That is the big difference. And he knows it makes more sense with merger. But he says, "Merger on equal terms." That is a new one, Mr Speaker, Sir. "No power," says he. "All gone." I thought we went through all that very carefully. What he intended last time was what the Barisan Sosialis asked for - complete merger, in toto. Today we would not even be spending one whole day debating a budget of $350 million. Education in the Central Government, Health in the Central Government, Fire Brigade, the whole works. We need only spend half an hour, Mr Speaker, Sir, as the Town Council of Singapore. It is as simple as that. And we get a capitation grant for one year of $10 million from the Central Government to run this. So we may even have to reduce the allowance of Members of this Assembly. It will be very sad indeed. The Member for Hong Lim knows the stark realities, that in this wider framework of Malaysia, there is no longer the possibility of what I would call the lunatic fringe in politics coming up on top. There is more balance. There is more body generally.

But let me pick up some of the points made by the Member for Hong Lim, because he has a flair for torturing any truth into an untruth. He said, "Everything fails under the P.A.P. except housing." This is because of his great genius in discovering the man for this job, who can even build 30,000 flats a year. No trouble at all. He said that our industrialisation programme at Jurong was all a matter of opening ceremonies. Mr Speaker, Sir, - this is also in answer to the Barisan Sosialis - nearly 150 pioneer certificates have been issued in the short time after the merger referendum and Malaysia Day. Just over one year! The hulk of it was in that area, where people would calculate on the basis of a market of over 10 million people. That is why the Member for Hong Lim is right. There have been no new pioneer certificates because everybody took them out straightaway. But there are still 45 now being processed. They are putting up their details to see whether they qualify for pioneer treatment. In production today are 43 factories holding pioneer certificates with a total employment capacity of 6,687. Under construction with pioneer certificates already granted are 54 factories. Staff complement in full production will be 9,331. Non-pioneers now in the pipe-line process, 11. Total employment capacity at total production. 4,000. The 45 pioneers now being processed - I have mentioned that - have another capacity of 7,000. So there is a total employability capacity of 27,000. All this would not have happened, Mr Speaker, Sir, without Malaysia. Let us be quite frank about it. We did not go in because we owed anybody anything. We went in because we wanted something for ourselves. The world did not owe us a living. We did not owe Malaya a living. Neither did they owe us a living. But they either kill themselves trying to crush Singapore, or we kill ourselves trying to undermine them, or we try and make a go of it together with Sabah and Sarawak.

Let me sum up the long-term position in this way. We may have to go through a fairly difficult period before we emerge from the doldrums. It is something like the early 1959, 1960, 1961 periods. The effects of the common market cannot be felt for at least four to five years. If we do not succeed; if, in fact, the arrangements within Malaysia are not worked out in a fair and equitable way, as was suggested by the Member for Hong Lim, then we shall have to face a new situation. Let us be the first to acknowledge to the Barisan Sosialis that the day Singapore turns sour within Malaysia, that day they have won; because from that day onwards, if Singapore really goes out, Mr Speaker. Sir, and it really says, "Out with Malaysia," and there is a popular demonstration for that, then for the first time the Indonesians have a hook on Malaysia. Then for the first time, if they are really helping to liberate the people, they can sell it. And that is the beginning of the end for Malaysia and for the lot of us. We are hoping that logic, reason and common sense will prevail. That nobody can afford to allow this to fail for their own self-interest. That this thing must be worked out in an equitable and just way.

The one good point made in the whole of this afternoon's debate was the one that, in fact, by giving 40 per cent of our national taxes, we are giving more than just paying for the Federal Departments in Singapore. That is correct. We calculated that the right amount - the quantum was 27 per cent plus our share of External Affairs (Parliament, negligible), might make it up to 30 per cent. We went in on the basis of good faith. And there is a proviso - it is part of the Constitution - that every two years it will be reviewed, and if no agreement is reached between the Singapore Government and the Central Government, the World Bank will send an arbitrator. We have deliberately not brought this into the foreground of our Budget debate because we have no desire to have more bones of contention between the Central Government and Singapore. Let us try to make this thing work. I am quite sure that if there comes a time when we cannot agree, we will have to go to arbitration with the World Bank. But that one valid point was completely obliterated by a heap of malice and untruths. I need only take one simple example. It is fatuous and yet it is surprising how - if one allows these lies to be repeated constantly - people may actually believe it. "The iron and steel mill in Jurong was a flop," said the Member for Hong Lim. It is only a scrap mill and we had to stop scrap iron from being exported. So people lost jobs. Then we banned the import of steel bars in order that they can sell. But first, Mr Speaker, Sir, any businessman who has been following the stock market will know that the production of this steel mill, which was one of the first projects in Jurong to get started, was unable to satisfy demand, and it makes hefty profits. In order to satisfy its customers, it enlisted the support of the Government to give it the right to buy scrap iron at market prices, whatever our dealers could get on export, plus 10 per cent, in order that it shall have this raw material. They have now started construction on the second furnace. But if one were to listen to the Member for Hong Lim, the whole world is crashing. It is all wrong. His politics consist of the big give and the big lie. Said he, we have given away $70 million to the Federation. It is nothing like that, Mr Speaker, Sir. We can work out the figures very carefully. I am not saying the sum is negligible. In fact, it will be quite an important factor in our discussions with the Centre, beginning from the first half of next year as the review comes in. But he would just shower largesse all round. Do away with licence fees, up the personal assistance for unemployment from $10 million to $20 million, build more hospitals, build more polytechnics, do all the wonderful things in life, do away with radio licences, taxi licences and the whole world. That is how he runs politics. That is how we had to do a rescue operation very quickly before there was a run on the bank. But I suggest to the House and the country that we are somewhere between Utopia and Hell. The Utopia I have already outlined, where the world owes us a living, Mr Speaker, Sir. The British keep their bases here and tail it off gently over 30, 40, 50 years, to keep our economy boosted up, common market, trade with Indonesia, trade with Malaya, trade with the whole world, all bouncing. Real perdition - failure of the common market, break-up of Malaysia, confrontation, double confrontation also with Malaya, to mutual harm, and the final abolition of British bases as part of this general collapse of the region. These are things which, as of this given moment, are fanciful. But if we allow such men a free run and they are really allowed to do what they want to do, that is where we will all end up - down at the bottom of the cesspit. All that has happened at this moment is that we have lost part of tile 20 per cent entrepot trade, part of 8.7 per cent of our national income, and of the given rate of growth that we were having before Malaysia, over 4 per cent per annum. In two years we make it up; and we may yet make it up. It may yet be the privilege of the Minister for Finance to announce to the House in next year's Budget that we have got back to the 1963 position.

I suggest to the country at large that our first job now is to make the best of this given situation. We keep what we get and consolidate on it and build up. If there is more reckless talk, if investors really believe that the Barisan can succeed in making Singapore go sour on Malaysia, then that is the end. What is the point of the common market? What is the point of building factories?

I was enchanted as I listened to the Member for Tampines. He was so carried away with wanting to denounce us for the present that he forgot that the picture of the happy days he painted when the Happy World was humming with music, the Great World was humming with people and not as of now, well, those happy days were just a couple of years ago under a PAP. Government, which he was merrily de nouncing and hoping to bring the House down with it. He has forgotten all that. This is not confrontation. This is one of the side effects of confrontation. The riots that took place, communal disturbances. Let me tell the Member for Tampines to calculate, to revaluate his chances of survival. Without the British bases here, without any other major power able to send their navy into the region to help him, and with the Indonesians with a pipeline on large pockets of our own population, having a riot every other week, which would be construed to the whole world as the desire of the oppressed people, the indigenous peoples of the region seeking freedom, bringing upon us a liberation army from our neighbours - that is where he will end up. But, unfortunately, Mr Speaker, Sir, if we allow that to happen, that is also where we will land.

I commend to the House the realistic policies that have been pursued by the Finance Minister in trying to get the best berth to Utopia.

Mr Koo Young (Thomson) rose -

Mr Speaker: Mr Koo Young, you have just five minutes.

7.25 p.m.

Mr Koo Young: (In Mandarin): Mr Speaker, Sir, the Prime Minister just now has been venting himself exceedingly. Because they thought up this Malaysia as a kind of fancy, so far up till now, it has been one year. He says that the things that we have talked about are irrelevant to the issue, for saying that Malaysia has been useless. He points out that even if Malaysia were not established, Indonesia would continue with confrontation. They have thought of another explanation. They say that they want to go through with industrialisation and the common market in order to get rid of the dependence of the entrepot trade economy on other things. If the Party in power want to get rid of such an economy and change Singapore's economy and in dustrialise, then we will agree. But how do they go about it! They say, get rid of such an economy. But, in fact, they have entered into the economic trap of the capitalist countries. Can the Minister for Finance resolve this situation in which Singapore's economy is dependent on foreign countries?

Just now the Minister for Labour has said, "Look at Hong Kong. It is one of the largest entrepots in SouthEast Asia and it is supporting itself by industrialisation." But I would point out to him that this example is irrelevant. If Hong Kong is a relevant example, then Singapore is also a colonial economy. How can you compare Singapore with Hong Kong? Hong Kong is a colony. Therefore, that is something which is not correct. I would like to ask him whether the Members on the P.A.P. side have studied the actual industrialisation process of Hong Kong? It has suffered from the exploitation of foreign capitalists. The British Labour Government, once they have assumed power, have immediately put up a 15 per cent surcharge and the Hong Kong industrialists have suffered most. If Singapore were to follow Hong Kong's example, then our industrialisation policy would not achieve its purpose and would fail. So our policy should be according to the desires of the people.

Talking about the present P.A.P.'s pioneer industries. Whom do they help to make money? They can only help the foreign capitalists, providing them with facilities to enable them to invest here, to exploit Singapore's workers, to seize the profits in this region - [Interruption]

Mr Speaker: Order.

Mr Koo Young: (In Mandarin): If the Prime Minister keeps on uttering irrelevant remarks, then I have to ask the Speaker to extend my time --- [Laughter] You do not have to laugh. Is the Minister for Finance willing to give me five more minutes?

Mr Speaker: Order. It is the Prime Minister who is laughing, not "you" who are laughing. The Member must refer to him as the "Prime Minister".

Mr Koo Young: (In Mandarin): If we were to go according to the present industrialisation policy of the P.A.P., then the objective of getting rid of our economic dependency will never be realised. Countries formerly under ---

7.30 p.m.

Mr Speaker: Order. Will the Member please resume his seat?

Mr Koo Young resumed his seat.

Mr Speaker: Dr Goh, in reply, in accordance with paragraph (4) of Standing Order No. 82.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, first, may I meet the point made by several Members of the Barisan Sosialis that the P.A.P. Government has been trying to conceal from the public the effects of confrontation?

Sir, in my Budget Speech in Hansard of 2nd November, at column 126, I gave the full facts up to date of the recorded decline in trade, and I am very pleased to hear that two Members of the Barisan Sosialis have quoted from the figures that I gave, without however reminding the House of the proviso that these figures do not include the unrecorded trade in the barter boats or through third countries. Last year, I gave details of the expected decline of trade resulting from confrontation and of our total trade and national income from Indonesia. There has been no attempt by us to bluff tile public, because in an open society such as ours, truth will emerge. And it is because we have taken the precaution, well before confrontation took place, of trying to forecast its effects that we were able to mount the countermeasures which had reduced the severity of confrontation.

Now, three Members of the Barisan Sosialis made the point that our industrialisation programme is not in the interests of the country, because it enables foreign monopolistic capital to intensify the exploitation of local workers. This is a very familiar phrase. Mr Speaker, Sir, if you read Marx and Lenin on "Imperialism, the Last Phase of Capitalism", you will find all these phrases. So the policy of the P.A.P. Government is to intensify the exploitation of our workers by the introduction and encouragement of foreign monopolists and capitalists!

So far as the workers are concerned, the fact that there are now 4,600 workers in Jurong - both in factories and in construction work - means nothing to the Barisan Sosialis. The fact that these 4,600 workers might otherwise be unemployed is meaningless to them. The fact that these factories are run by private enterprises means, by definition, that workers have been exploited! Now, it is in fact a Marxist dogma that, by definition, the mere fact that an employer uses workmen means that the workers are being exploited, regardless of whether they are being paid a fair wage, the market wage, or not. I do not think you will find this sort of dogma popular, except in Russia. But what is more to the point is that the Barisan Sosialis - not Mr Ong Eng Guan, who knows the facts - say that it is -

Mr Speaker: Order. The Member for Hong Lim.

Dr Goh Keng Swee: I beg your pardon; I meant the Member for Hong Lim. He knows. As an accountant, he has been studying the prospectuses of new companies and so on, and he knows that the majority of capital ownership in the pioneer industries is in local hands and that, in fact, overseas capital forms a minority section of capital ownership in our new industries. Therefore, the allegation by the Barisan Sosialis that we are allowing foreign capitalists to exploit our workers or to make large profits which they remit out of the country is completely base less. It is no use making and repeating such slogans, that foreign monopolistic capital is being allowed to mount a stranglehold on our economy. What are the facts and figures? Let me have their list - pioneer industries, ownership of foreign capital. Only then, on that basis, can they substantiate their allegation.

Now, the Member for Jurong - I can assure you, Mr Speaker, Sir, that he is going to lose at the next election in Jurong. That is absolutely certain. I can assure you that 5,000 to 10,000 workers at Jurong will have listened to what he has said and will vote him Out of office. [Laughter] Now, he says, "Do not let these people take their proceeds or profits on their investment abroad." As I said, first of all, the majority of capital ownership in pioneer industries belongs to our local businessmen or what they call "national capitalists" to distinguish them from "foreign monopoly capitalists". Minority participation is from overseas.

Mr Koo Young rose ---

Mr Speaker: On a point of order?

Mr Koo Young: (In Mandarin): On a point of information.

Mr Speaker: If the Minister will give way.

Dr Goh Keng Swee resumed his seat.

Mr Koo Young: (In Mandarin): I should like to ask the Minister for Finance whether he can give us the exact figures to prove his point.

Dr Goh Keng Swee: I am speaking from memory on the proportional rights, but in terms of equity-ownership, that is, ownership of share capital, my recollection is something like 55 per cent local, and 45 per cent foreign. In terms of total capital investment, both loans and working capital, the proportion may be something like 60 to 40. But the Member for Hong Lim has asked for a detailed list - which will take some time to prepare - of each pioneer industry, where they are located, who owns them, how much is foreign capital, how much is local capital, what they are producing, how many people are employed. where they are sited - a whole lot of information; and he is going to get quite a thick volume. I will not on that occasion read out the whole list, but these are facts open to examination. We are not in the habit, like the Member for Hong Lim, of telling fibs. We are a responsible Government, and it is not our policy to fib.

The Barisan Sosialis Member for Bukit Panjang says there is an easy way out of the economic problem, if only we will find a peaceful solution with Indonesia. Come to terms with them, and we will do trade and we will all be prosperous and happy again; and he thinks that is a better way, a better alternative to the warlike approach. First of all, Mr Speaker, let us get this clear. Who is waging war on whom? Are Malaysia and Singapore waging war on Indonesia? Are we sending our soldiers, our troops, across the Straits of Malacca to massacre the Indonesians, or is it the other way round? Who is waging war? We are being attacked. Bombs have been exploded in Singapore. Troops have been sent across to Johore, Malacca. Indonesian troops are crossing the borders of Sabah and Sarawak. Why does not the Member for Bukit Panjang condemn the Indonesians for their aggression?

An hon. Member: Shame!

Dr Goh Keng Swee: Instead he is saying that it is the P.A.P. Government in Singapore and the Alliance Government in Kuala Lumpur who are taking a warlike attitude in this matter. Where are the facts? Are they speaking on behalf of President Soekarno? [Laughter]

When I was having discussions with Indonesian Foreign Office officials twice in Bangkok, and once in Tokyo, even they did not have the effrontery to suggest that Malaysia is taking a warlike attitude towards Indonesia, that we are waging war against them. In the United Nations in New York they say: "Yes, of course, we are sending our paratroopers into Malaysia, and it is right to do so." Even the Indonesians do not dare to go as far as the Member for -Bukit Panjang in suggesting that it is we who want to wage war against the Indonesians, and not the Indonesians who are actually waging war against us. So he says: "Let us have a peaceful solution."

I have already mentioned a few days ago - last week, in fact - that it is easy to come to terms with Indonesia, and that is to surrender. Quite easy. It goes on this basis - to disarm, no troops, they will do trade with you, the Consul-General will come here. Then when you are absolutely defenceless, the Indonesian Army crosses the Straits of Malacca, occupy the place, then what happens? Is that the sort of thing he wants? Does he welcome the occupation of Singapore by the Indonesian Army? Or does he think that if we are completely defenceless, the Indonesian Army will not come across?

Mr Speaker, Sir, two and a half years ago, we invited no less than General Nasution to dinner at Sri Temasek and he was quite taken in by the appointments, the rather elegant decor of Sri Temasek, the large spacious grounds he viewed around the Istana. And he asked us: "How many troops have you got?" [Laughter] Of course, at that time we had only one battalion - 750 men. I thought there was quite a look in his eye - of a man making a very quick calculation. The result, of course, was that we decided to have another battalion.[Laughter]

The Member for Hong Lim has got the capacity for making reckless statements, which he knows are completely untrue. The Prime Minister has nailed a few untruths. I propose to deal with a few more in order that his reputation as a reckless purveyor of falsehoods will never be forgotten. A few minor points. First, he says in the last year or so bank deposits have gone down. The reverse has happened. Bank deposits have gone up. He says that private housing construction has gone down. The reverse is true. Private housing construction has gone up. He says we spent hundreds of millions of dollars on Jurong - it was a flop. We have not spent hundreds of millions of dollars on Jurong. We spent $54 million on Jurong. Then he says that after six years of effort only 20 factories are in production in Jurong. The fact is that the first factory in Jurong went into production on 1st January this year. And the others have gone into production in the 9 or 10 months intervening. Then he says that, as a result of our revision of export of scrap, hundreds of people have been unemployed. Nobody has been unemployed. The scrap busi ness has increased in prosperity for two reasons. One, the steel mill, which he says is a bankrupt outfit, is buying more scrap than the dealers can supply. Two, they are paying a higher price than they could have got by exporting it to Japan. Then he says there is a rolling-mill in Bukit Timah which, if expanded at very small cost, would have achieved the capacity of the National Iron and Steel Mill in Jurong. The Member for Hong Lim has neither been to the Bukit Timah Steel Mill nor the Jurong site. If he had, he would not have made this completely idiotic assertion. These are two different categories.

The Prime Minister: And loans to Sabah and Sarawak!

Dr Goh Keng Swee: Yes, loans to Sabah and Sarawak. One is a hand-operated re-rolling mill where you cut strips from ship-breaking plates, and do it the cumbersome way. The other one is a fully automatic rolling mill with a 20-ton capacity electric furnace; and another fully automatic re-rolling mill. Total re-rolling and rolling capacity in the Jurong Steel Mill is something in the region of 90,000 to 100,000 tons. The Bukit Timah mill cannot handle more than 10 per cent - rather less than 10 per cent of that.

Now, loans to Sabah. Mr Speaker, Sir, the Member for Jurong said, paying all these monies, how many workers have been sent there? $30 million loan. The answer is quite simple. That pay ment has not been made because the terms of workers going to Sabah have not been settled. So there will be a quid pro quo. Surely, Mr Speaker, Sir, when a wealthy nation like the United States of America, or, if the Barisan do not like America, then a powerful industrial power like the Soviet Union, lends money, they get something for it; either politically, in the case of the Soviet Union, or in business, in the case of the Americans. If you get my loans, then you do not buy other people's goods. And these are not interest-free loans. These are loans where you pay interest. So when we extend interest-free loans to Sabah and Sarawak, it is only a fair condition that they must help us to resolve our unemployment problem. And now I am happy to say that discussions are being held between officials of the Singapore Government, the Central Government, and the Govern ments of Sabah and Sarawak to work out the details of this arrangement. I hope that before long, satisfactory solutions acceptable to all parties will be reached.

The Member for Hong Lim says, in making his calculation of how much by way of 40 per cent contribution from national taxes, that the interest-free loan costs us $2 million. He has made a mistake - a simple error of calculation. You will remember that he said that the imputed interest on a $30 million interest-free loan is $2 million, which means that he will have to charge a rate of interest of something like 6½ per cent on $30 million, which will give you $2 million; whereas the market rate of interest for long-term Government loans is of the order of 5½ per cent. I just make this point in passing. Anyway, from his calculations, he stated that the Federation of Malaya is making a profit of $65 million. Well, this contribution is to meet two elenients in the expenditure of the Central Government. One, non-defence expenditure, such as the Foreign Office, the Parliament; that sort of thing. It does not cost much. And the other one is defence expenditure. As the Prime Minister has said, when we agreed to 40 per cent of national taxes, it was our view that that figure was too high. From our computations then, we thought that a lower percentage would be a fair discharge of Singapore's responsibilities towards certain expenditures which every State of Malaysia must bear. The Federal Government's representatives thought that it should be 60 per cent, and then the figure of 40 per cent was arrived at as a compromise between the two starting positions. Now, of course, the figure may be too high, as we think it is, or it may be too low, as Kuala Lumpur think it is. But we can only decide after the actual expenditure on Malaysian defence is known, and it will be known after the end of this year. Then it would be far more easy for us to have some idea of what would be a fair contribution, or it would certainly be easier for an arbitrator to arrive at a percentage after hearing both sides of the case. The trouble about the premerger financial negotiations was this. The Federal Government were working on a long-term projection of an increase in defence expenditure. Expenditure had not been incurred and there was some doubt as to the actual amount that would be incurred; but after the end of this year, there will be no doubt as regards the quantum. And a fair division of the proportion of our contribution can then be arrived at. Because of this, it is certainly untrue and com pletely malicious for the Member for Hong Lim to suggest that the amount contributed must go up from $65 million in 1965 to $75 million in 1966, to $85 million in 1967. On this matter, I suggest, with respect, that the Member for Hong Lim has been talking through his hat in the same way as he has suggested that the present business and economic conditions are hardly better than those during the Japanese occupation.

I think, Mr Speaker, Sir, I have replied to most of the important points raised by Members of the Opposition, except, I think, for various curious points made by the Member for Bukit Panjang. He deplores what he calls our abuse of tile Indonesians, their great friend, Soekarno, the great leader of Indonesian confrontation. He says it is wrong for us to say that Indonesians are eating rats and corn. It is not we, the P.A.P. or Malaysians, who say that they are eating rats and corn. It is President Soekarno who urges every Indonesians to eat corn. And it is Aidit, the Secretary-General of the Indonesian Communist Party, who said that every patriotic Indonesian should eat rats. And President Soekarno went so far as to say - and this is on record, Mr Speaker, Sir - "If I were to tell the Indonesian people to eat stones, they would eat stones." Sir, this is not our propaganda. The Member for Bukit Panjang likens these statements of ours to what Mr Lim Yew Hock said about the Chinese people. It is completely different. We are just quoting what the Indonesian leaders asked their own people to do. Perhaps if confrontation lasts long enough, the Indonesian people may yet have to follow President Soekarno's injunction to them to eat stones. When that time is reached, I am quite sure that the Barisan Sosialis will be more chastened than they are now.

Question put, and agreed to.

Resolved,

That the Assembly approves the financial policy of the Government for the year 1965.