ANNUAL BUDGET STATEMENT

Order read for resumption of debate on Question [5th December, 1967], "That Parliament approves the financial policy of the Government for the year 1968.". -[The Minister for Finance]

Question again proposed.

Mr Sim Boon Woo (Changi): Mr Speaker, Sir, the surplus in next year's Estimates of Revenue and Expenditure of $30.28 million, tabled by the Finance Minister for the young Republic, without the loss to any sector of the economy or community, and an overall economic growth of eight per cent in the first nine months of 1967 as compared to a population growth of 2.5 per cent, once again shows a great step forward in the relentless effort to develop our national economy. Sir, this surplus does not fall from the sky. It is the result of careful planning by the Government and the desire to see it through by the Government and the people the employers, the workers and the various communities of the society at large. Sir, our hard work, particularly during the last two years, and the fruitful result that follows give us reason for joy. It has added more confidence to our economy, both internally and internationally. This is an inspiration to us all and we should strengthen it by increasing efforts in the years ahead. For the moment we begin to be complacent, that will be the moment when we begin to dissipate away in this unceasingly turbulent region of the world.

Sir, two years ago when independence was forced on us and many people were pessimistic about the future, we were not in despair. Very few people then would have the courage to say that such an achievement could be accomplished in so short a period of time. Sir, today we have proved to the world that, though we are a small State, a determined people, equipped with the proper education and training, and under the impetus and dedicated leadership of our present Government, can, I have' every confidence, lead the march to progress and prosperity and build a non-Communist democratic, socialist nation. Sir, it is particularly heartening to note that not long after our independence came the restoration of diplomatic and trading relations with Indonesia. This, as stated by the Finance Minister, is the most important of the three main reasons for the present buoyancy of the economy. Import and export of many commodities in our trade with Indonesia have not only been restored to the pre-confrontation level in volume, but have also surpassed it. Increase in exports to South Vietnam and the enormous inflow of Hong Kong capital were also the major items contributing to the good performance of our national economy.

Mr Speaker, Sir, the lengthy Budget speech of the Finance Minister was dominated by his concern over the growing unemployment problem and the proposed retrenchment of some 16,000 citizens employed in the British bases within the next three and a half years, and the ways and means he proposed to overcome them. As it is, the Republic faces an increase of about 25,000 employable young people annually. According to the sample Household Survey of the University of Singapore Economic Research Centre, 52,630 were unemployed out of a total of slightly more than half a million employable, that is, about 10 per cent were unemployed, and there is a growing increase of unemployed every year. Sir, this is further aggravated by the impending retrenchment of workers in the British bases and we will probably suffer a drain of about 100,000 economically active people in various categories of labour within the next three and a half years. This will indeed make the situation very acute. But it cannot be denied that given a situation like ours, even the best government in the world cannot solve the problem entirely in a few years. Sir, our Government has at least tried to reduce the problem with a high percentage of success within a bearable limit through expansion and diversity of trade, industrialisation and the opening of new avenues, such as tourism, to create more jobs. The Government and the citizens themselves have to work very hard for their survival.

Sir, the Finance Minister has suggested a number of ways to overcome the unemployment problem which, when fully accomplished, will find jobs for about 43,000 people every year for the next few years. But he has never touched on how to assist the farmers to get cheaper fertilizers and cheaper multi-feeds so that they can produce more goods and our people can enjoy cheaper vegetables and livestocks.

Sir, I take particular interest in the Minister's indication of the tourist trade. As far as I can understand, the Minister has based his calculations in the promotion of the tourist trade chiefly, if not solely, on the building of first-class hotels to create employment for about 9,000 people over the next three and a half years. I do not see how this can induce tourists to visit Singapore, although it cannot be questioned that such ultra modern accommodation does make them feel cosy during their stay. But surely they are not coming here from thousands of miles away just for the purpose of making themselves comfortable in the hotels? Neither do I believe that they are interested in helping us solve our unemployment problem. Sir, to make a success out of the tourist trade, I suggest that the main factor to be considered is how to attract tourists and not how to create jobs out of tourism, and when we have succeeded in this respect, then our services will automatically be in demand, resulting in the creation of direct or indirect employment. Sir, a tourist will ask himself how much he gets out of his spending in the Republic and what he gets out of it, and if he finds that it is not worth his money, not only will he not come again but many of his friends will be encouraged to go elsewhere. Sir, it has always been said that we lack the kind of first-class entertainment, services and facilities found in places like Bangkok, Hong Kong and Japan. Other than their first trip here on business, very few people would want to visit here again. Therefore, some kind of inducement must be added to the existing ones to make the tourists stay longer and visit here more often. In fact, considerable efforts have been made by the Government and the various business communities to encourage an increase in the number of tourists having their holidays here. But I would say that it is not enough. More efforts and more planning must be put in.

Sir, all of us are happy to note that the Finance Minister has decided not to increase any tax next year and yet is able to spend more in next year's development. On the whole, the 1968 Budget is a very big New Year gift to the two million people of this young Republic.

Sir, I fully endorse my support of the motion tabled by the Minister that Parliament approves the financial policy of the Government for the year 1968.

2.44 p.m.

Madam Chan Choy Siong (Delta): (In Mandarin): Sir, I do not wish to dwell at length on the question of economy, because in the past few years we have seen a lot of news on this topic being published in the newspapers. We have also seen how our local merchants have praised our wise Minister for Finance for being able to table such a Budget like this one before us. I must, however, stress that we must pay more attention to the spirit and principle of the Budget than to its details. I would now like to remind the Government that since the expenditure and revenue for next year are balanced, I hope they will make use of the stable economy to pay more attention to the interest of the labourers who constitute a large part of our population, and to implement as quickly as possible the Government's policy in relation to the labouring class in order to reduce in the shortest time possible the gap between the rich and the poor so that we can speedily achieve a democratic, socialist society.

Sir, I should say the 1968 Budget is satisfactory to all. There are many things which are encouraging to us, one of which is that next year the expenditure and revenue will balance and there is no increase in taxation, which would have been a burden on the people. Just as the Minister has pointed out, our economy is progressing as it has in the past. There has been an eight per cent increase in national income. This is not only a surprise to many experts, but it also makes us feel proud of our economic achievements because we have achieved quite a lot in the economic field. We can say that ours is a unique case in South-east Asia, and we are enjoying a high standard of living. That goes to show that a country must have a judicious, democratic, socialist leadership and enlightened economic measures before it can achieve social stability, economic prosperity and a rise in the standard of living of the people. I am sure hon. Members will all agree with me that this type of economic policy should not only create prosperity but also achieve stability. So any economic measures adopted by the Government must be based on our platform for nation-building and on our spirit of revolution.

Sir, allow me to remind the Government that while we, as representatives of the people, are working towards a democratic, socialist, egalitarian and multi-racial society, we must realise the tasks and the responsibilities the people have entrusted to us. I feel that any work in nation-building must aim at the highest achievement and the highest ideal, if we deviate from this path, it will mean that we are deviating from the interests of the people and we will lose their support. Without the base formed by the general masses of the people, we will not be able to carry out our policies and our efforts will be in vain. We must let the people understand that the dynamic force which has generated our present economic prosperity and stability is something which we should understand and which is meaningful. I remember on the 20th of February, 1959, the Deputy Prime Minister gave the reasons why the P.A.P, had received the support of the people. He said that most of the people of Singapore were labourers and were being exploited. They supported our aim for an equal and just society and our policies for equal opportunities in employment and other fields and they wanted to have a better standard of living. The merchants also supported us because of our integrity and anti-corruption campaigns and other effective administrative measures. They supported an honest and clean government which would be conducive to their economic interests so that they could live in peace. The present Minister for Finance, namely, Dr Goh Keng Swee, at that time said that the economic policy of the P.A.P. was mainly aimed at getting the best things for the majority of our people, namely, security and prosperity.

Sir, I am saying all this in order to show the economic challenge before us so that we may analyse seriously our work in the past year. Everybody knows that the P.A.P. Government ever since it came to power has carried out revolutionary work in all fields, and everybody knows our achievements. What we have been able to achieve has enabled to create a stable society and a prosperous economy and this clearly shows the efficiency of our Government. I would like to avail myself of this opportunity today to remind the Government to redouble its efforts in its tasks, fired by its revolutionary spirit, as it has been in the past, and serve this country and implement its economic policies in order to bring equality to all sections of the people: in other words, to close the gap between the rich and the poor. As everybody can see, Singapore is prosperous and very progressive. But we should not look only at the optimistic side of the picture and neglect the other side of it. The other side is one of the platforms of the P.A.P.'s manifesto, i.e., to bridge the gap between the rich and the poor, and to establish a non-Communist, democratic, socialist, fair and just society where there is no exploitation of man by man.

I have said all this in order that all the people concerned can pay more attention to this so as to bring to realisation all that we have hoped for. We should also allow our younger generation to understand our problems and our tasks. We all know that most of the consumers are in the middle and lower income groups. These consumers are purchasers. They must have a good standard of living before they can spend more. Although the average income of the workers has improved somewhat more than before, generally speaking, however, the degree of improvement is very small. Although the market for consumer goods is quite active, most of the goods are purchased on hire purchase terms. Many consumers, after acquiring such consumer goods on an instalment basis, later find themselves unable to pay the whole amount due. So they get into difficulties because of lack of money. From these instances, we can see clearly that though one side of the picture represents our nation as prosperous, on the other side of it, however, there are still the workers whose purchasing power is limited.

Another point I would like to suggest is that when we talk about individual income, the accumulative income of an individual may increase his purchasing power, but there are instances where the method of taxation may not channel capital into productive fields. The people are generally paying taxes, but the rich are still able to evade paying what they should pay. So this has brought about a greater difference between the rich and the poor and a certain amount of economic imbalance in society, with the result that there may not be an equal enjoyment of the services provided by the country. The poor will be struggling forever in dire poverty; the rich will be richer; and therefore the line between the rich and the poor will be more marked.

There is an outstanding problem with regard to urban renewal. Everybody wants to look forward to a better future, but the upheavals caused by urban renewal cannot escape our attention. Urban renewal schemes should achieve social progress and not cause any exploitation of the people. They should not cause the people any inconvenience. But we have seen that many people have been forcibly removed as a result of urban renewal schemes. These people - especially the hawkers and small merchants - have suffered quite a lot economically as a result of urban renewal schemes. Although we have allotted them shops, they normally fight shy of taking them up because of the high rentals. They just admire the shops without daring to rent them. Yet we are encouraging the capitalists to take part in our urban renewal schemes by giving them more favourable terms. Of course, nobody can accuse us of not encouraging them to invest in order to increase our economic prosperity. We are giving them a lot of encouragement and favourable terms. For instance, we grant them tax exemption for a number of years, good sites for development, better attention and facilities. From this glaring example, the people are given the impression that we are granting better facilities to the rich who are availing themselves of Government assistance to achieve their own purposes. On the other hand, the small merchants and hawkers have more or less to close shop after they have been forcibly evicted. This situation can he described as an abnormal development. In other words, we are helping the rich and doing nothing for the poor. Thus, this problem is not being looked into properly by the Government.

Therefore, I would like to express the hope that our Government will thoroughly carry out the objectives in their manifesto in a revolutionary spirit in order to bring about a democratic, non-Communist socialist society and to redress the balance between the poor and the rich. I hope the Government can put forward suggestions to achieve this.

The Government's policy with regard to the encouragement of foreign investments should also take account of the interest of the small merchants and hawkers so that there can be equal development among all sections of our population. I am of the view that the Government should set up a loan organisation, for instance, to help taxi-drivers. We know that their taxis are mostly on loan or on hire, and some of them purchase them on hire purchase terms at very high interest. So their monthly expenses are very heavy. In addition, they have to maintain their families. Very often, they cannot continue to pay their instalments half-way and their vehicles are taken back by the sellers. So this loan organisation can in a way help to solve part of the problems of the taxi-drivers.

The small merchants who are evicted as a result of urban renewal should also be helped by the Government to resettle in new shops by a scheme of service. The Government should help to re-establish their businesses through some form of loans, because we know that even the large commercial firms have to depend on larger financial organisations to back them up. So this is a factor that will affect our economic prosperity.

Secondly, I think the Government can set up a corporation to enable the people to invest in it, to encourage them to buy shares of various firms and industries. Thus the investors will not be confined to just a small group of people. This will help the masses to take part in investment schemes and become shareholders. If there are more investors, there will be more funds to replenish our financial resources and to help carry out the Government's economic policies. It is also in keeping with the Government's economic plans and the nature of our economy so that our national wealth can be more equally distributed among our people. This will help them to achieve a better and equal socialist society earlier.

I have given my suggestions. At the same time, I would also like to express my support for the many good points in the Budget Statement of the Minister for Finance.

3.11 p.m.

Inche Mohd. Ariff Bin Suradi (Kampong Kembangan): (In Malay): Mr Speaker, Sir, it would indeed be difficult to find a newly independent and developing nation, particularly in this part of the world, whose Budget Estimates show a surplus and whose revenue exceeds its expenditure. It is a truism to say that every newly independent and developing nation inevitably finds it necessary to raise income tax, import tax, property tax and various taxes of one kind or another or to obtain loans from foreign countries or, if not, to sell one of the islands in its territory in order to finance its national expenditure. There was a time during the Lim Yew Hock regime when the Singapore Government found it necessary to sell Christmas Island in order to get money to overcome the deficit in the national Budget.

However, Singapore, ever since it came under the P.A.P. rule, has steadily progressed in prosperity. Its social services have improved; its housing problems which posed a major problem at one time have now been successfully overcome; every child born is assured of a place in school, no matter whether he stays far or near; industrial disputes between employers and employees are decreasing in number. All these achievements are due to the dedication, sincerity and hard work of the leaders as well as to their correct leadership in striving towards the goal of progress and prosperity and harmony among its multi-racial citizens. Moreover, the Minister for Finance is an acknowledged expert in economics. That is why Singapore today can justly be proud of the successes it has achieved.

It is usual, every time the Minister for Finance presents the Budget Estimates, for every sector of the public, from the businessman to the worker, to become apprehensive and wonder whether there will be any increases in taxes. But this time the public were much relieved when it was announced that there were to be no increases in taxes for the coming year. If there are those who are somewhat worried - the number is not big - it is because of the devaluation of the Pound Sterling. But I believe that they too will be relieved to know that the economy of Singapore is not only stable but improving from time to time, as has been stated by the Minister in his policy speech on the Budget for 1968.

One of the facts he gave was that the use of granite continues to increase due to building construction - construction of new roads and repair of old roads - an increase of two and a half times. Another economic indicator, which the Minister found interesting to watch, was the increase in the number of motorcycles and scooters registered. Five years ago, the average was 548 per month, but for the last three months the average was 1,258. So too is it the case with the construction of factories, etc.

However, Mr Speaker, Sir, the examples mentioned just now are as yet no cause for satisfaction to me. The increase in the use of granite to build new roads - to nearly 130,000 cubic yards per month - is of little benefit to Kampong Kembangan Constituency. To date, the roads in Kampong Kembangan are still full of pot-holes and unfit not only for vehicular traffic but also for pedestrians. The fact is that requests and appeals have incessantly and repeatedly been made to the Ministry, but unfortunately all to no avail. So today you find that about 80 per cent of the roads in Kampong Kembangan are still in a sorry state. Moreover, during the present rainy season, with Christmas coming soon, to be followed by Han Raya Puasa and Chinese New Year, you can be sure that the residents of Kampong Kembangan, who are of various races and religions, will be observing these days with an air of despondency and gloom, even though taxes are not raised.

The Minister for Finance was elated to note the increase in the number of motor-cycles and scooters registered in the past three months, an indication that skilled artisans and white-collar workers are also benefiting from our economic expansion. I am, however, sad when I think of the number of car-owners who have found it necessary to sell their cars because of the increase last December in the cost of petrol, car tax, and driving licence fees. Furthermore, they have to pay for parking in the city, to the extent that car-owners, even if they are flat dwellers, have to pay to park near their homes.

These are some of the reasons for the increase in the number of motorcycles and scooters registered, rather than that the increase is due to economic expansion. Car owners have to economise, and the simplest and cheapest way is to sell their cars and buy motor-cycles and scooters instead.

Sir, with regard to the increase in the number of new factories, admittedly this is good because it provides jobs for the unemployed. But my complaint is that a number of these factories are built in residential areas, such as Kampong Kembangan. My constituency is a residential area, but industries such as sawmills, iron foundries, etc, are fast growing in number, like mushrooms after a heavy rain. All this affects the peace and tranquillity of the residents in my constituency. Quite often the power supply is disrupted on account of the heavy machinery, and the noise emanating therefrom disturbs the tranquillity of the neighbourhood and is another nuisance to the children who wish to study their lessons at home. Roads and drains are damaged. Far from being regularly maintained and repaired, these roads and drains are now subjected to constant use by heavy vehicles which pass to and from the factories, causing even greater damage.

Lastly, although the figures and indications which point to our economic development are interesting, as stated by the Minister for Finance, nevertheless I, for one, am still not convinced that the people of Singapore will not experience increased taxation in 1968. In the first place, if the Minister is unable to anticipate the number of Government officers going into retirement as evidenced in the Supplementary Estimates for 1967, which was debated last Monday, I do not see how he is able to anticipate that the collection of revenue will exceed expenditure for 1968. In the second place, the Minister himself stated that he expected another set of Supplementary Estimates for next year. Whereas the surplus for 1968 is only to the tune of $0.3 million, the Supplementary Estimates for 1967 was for more than $5 million. Thus, the Budget Estimates for 1968 are at best vague. It is not as yet certain that the people of Singapore will not experience tax increases in the coming year.

3.23 p.m.

Mr Lim Soo Peng (Havelock): Mr Speaker, Sir, much praise has been given to the Budget speech of the Finance Minister - by the ordinary man in the street, by bankers, industrialists, traders,, and merchants. The speakers before me have also praised him, and I am sure the speakers after me too, will be resounding these praises, if I were to add even more praise, I am afraid the Finance Minister might not be able to bear the burden. And so, if I do not join in the chorus, then I think it does not deserve praise.

The Budget speech on the financial policy of the Government for the year 1968 can be divided broadly into three parts. Firstly, the Finance Minister surveys the progress for the year; secondly, he analyses the problems of the ensuing year; and, thirdly, he tells us what he proposes to do with it. As I sat listening to his survey, I could not help feeling very proud of being a Singapore citizen. Mr Speaker, Sir, I assure you it was not on account of the language of the Finance Minister, whose language was indeed restrained and sober. My pride swelled from the facts the Minister reeled out one after another. Everything was up - trade was up, not only in value but even more so in volume, and by a staggering 15 per cent.

According to a very recent Colombo Plan report quoted in the local Press, only two countries in Asia had an increase in their share of the world trade. These are Singapore and South Korea, bearing in mind that we flourish (to use the words of the Finance Minister) entirely on skill and expertise. The distinction in trade is something to warm all our hearts. The number of ships using our harbour has gone up, and so has the tonnage. Bank deposits are up. So has building construction gone up - both public and private. There was even a short shortage of cement. Receipts from tourism are up, and there is a grave shortage of hotels which we are trying very hard to remedy. Manufacturing output has gone up, and industrial investment is also up, so much so that the Economic Development Board has to have a crash programme in factory construction.

Mr Speaker, Sir, our achievements for the year have really been impressive and satisfying. But what is more gratifying is that not only have we kept up with economic development which began in 1959, but we have also distributed the uses of our increasing wealth in a more just and equitable manner. Since 1959, in spite of rapid population increases, the per capita income has risen from about $1,200 to about $1,700, or by about 42 per cent. At this figure we certainly have a per capita income exceeded only perhaps by Japan in Asia. This alone will mean very little to the common man if he does not get an increasing share of the use of the increased wealth. As the Minister has observed - and on which I can personally testify - not only has the number of cars but also the number of motor-cycles and scooters has gone up very rapidly. All the factories in Jurong that I know of provide substantial parking lots for motor-cycles and scooters of the ordinary worker.

If further proof of a better life for the ordinary worker is required, one need go no further than to any of the vast subsidised public housing estates and observe the living conditions there. One will see radio and television sets in nearly every home. One will see the car parks full of cars, motor-cycles and scooters. The only thing that one perhaps will not see is a boy or girl of school-going age not in school.

Another very satisfying matter is the continued improvement in the industrial relations climate in Singapore. This is no doubt one of the important factors in our economic progress during the year. According to figures published by the Labour Ministry, man-days lost on account of strikes dropped from a peak of 411,000 in 1961 to 44,000 in 1966. Figures for this year are not yet available. But from what we know, except for the Hume Industries strike, there does not seem to be any major work stoppages. The better industrial relations climate today may be attributable to a reorientation of basic thinking between both management and labour circles. There has been a marked willingness on both sides to place national interests, and therefore of the general good, before any other interests, and there has developed a new mood where both sides are increasingly anxious to sit down and reason rather than to fight it out. This is especially so in the Jurong industrial complex, it is here, I think, that the workers deserve a special compliment; not only have they and their leaders, with rare exceptions, shown a remarkable degree of responsibility in industrial relations, but they have also widened their activities into the social, cultural and recreational fields. In these activities, I am glad to note that the management has willingly co-operated by donating funds. If the good work is sustained, I am confident that before long Jurong's leisure hours will be as vigorous as during working hours. The Economic Development Board also deserve a compliment. I have heard from both labour and management leaders that had it not been for the understanding and support of the Board, progress would have been very much less.

Turning now to the problems of the coming year, we find that in spite of the advances we have made, unemployment will still be a threat to the core of our social fabric. As the Finance Minister has rightly pointed out, if Singapore has not done so much as it did in stimulating economic growth, the situation would have been much worse. But now with Britain's military withdrawal, our problem - again to quote the Finance Minister - has been severely aggravated. According to him, by 1971, 16,000 people will be retrenched by the British. We have already 52,000 unemployed and every year we have 25,000 people coming out of schools looking for jobs. Thus if we are to solve our unemployment problem completely, the Finance Minister tells us, we have to create 43,000 jobs every year for the next three years. This is indeed a gigantic task calling for prodigious efforts. In industry, figures, of course, vary from factory to factory. It takes generally at least $3,000 to create one job. If we are to create 43,000 jobs in industry, we will need $1,290 million in investment every year. If we compare this figure with our gross national product estimated for 1966, at about $3,200 million, we will see the magnitude of our task. In other words, the gross capital formation will have to be more than one-third of our gross national product. The Economic Development Board estimate that in 1966 gross capital formation ranks at about 14 per cent of gross domestic expenditure. To put it bluntly, even doubling our efforts will not be good enough. This is, of course, assuming that all jobs are created in the manufacturing sector. In other sectors the cost of jobs may be lower. The Finance Minister estimates that some $45 million put into new hotels may create some 2,500 jobs. This works out to some $18,000 per job.

In the trading sector, because capital is turned round very much faster, the cost of jobs will be lower, and it is here that we should try to expand with as much vigour as, if not more vigour than, in the manufacturing sector. I, therefore, hope that the trading agency proposed by the Finance Minister will not confine itself to servicing the export needs of our manufacturers.

Mr Speaker, Sir, our unemployment problem is a very severe one. The Finance Minister has outlined brave and decisive steps to be taken to solve that problem. We wish him all success. There is, however, one aspect he has not dealt with. If Singapore can mobilise enough resources to meet the problem, then he is, of course, right to ignore this aspect. I refer to the rather large number of people who are not citizens and who' work here under the work permit system. I do not know the exact figure. But I understand it to be around 20,000. The Finance Minister, in referring to the retrenchment of Base workers, stated that only citizens arc our responsibility. The question I now pose is whether the employment of these 20,000 non-citizens is our responsibility. I call upon the Government to review constantly the policy on the granting of work permits. I have every sympathy for people north of the Causeway, and I would be very happy to see them being able to get jobs in Singapore if our own citizens are not unemployed. But this is not the case and it is not made easier by the tariff wall raised by their Government. I think this House should accept the basic philosophy that there can be no common market for labour without a common market for the output of labour. The Budget for next year has been described by the Finance Minister as a continuation Budget. Some newspapers have described it as a standstill Budget. This term, I think, is a misnomer. Only the rates of taxes stand still. Revenue and expenditure are anything but standing still. They go up by 8.7 per cent. Many countries have to run very hard with tax rates in order to keep still. In Singapore's case, with unchanged taxation, revenue is estimated to increase by a welcome $56 million and, as usual, the Ministry of Education takes a huge bite from revenue. It is estimated to spend nearly a quarter of the Republic's budget. If the figure of $151.6 million for 1968 is to he compared with that of $60 million for 1959, the progress in the field of education is apparent. Expenditure has almost trebled, while the population has increased by less than one-fifth. No other evidence is as clear as this of a socialist budget. Similarly the Ministry of Health, with the Hospital and Public Health Divisions, expect to spend some $70.6 million. Compared with the 1959 figure of $28.4 million, the increase shows again the mark of socialism. And what has socialism brought us? In spite of the turbulence in the few years since 1959, our country has prospered. Everybody, irrespective of race, colour or creed, has a more equal start and everybody has a better life. Every child has a free place in a primary school and every sick person can get free medical attention. Any person in misfortune can get public assistance. Consumption of electricity and gas, the obvious indicator of a better life, has more than doubled. At the same time, the infant mortality rate, the obvious indicator of an inadequate life, has dropped from about 35 per thousand life births to about 25. Mr Speaker. Sir, we have before us a good budget, a socialist budget.

3.40 p.m.

Mr Ang Nam Piau (Thomson): (In Mandarin): Mr Speaker, Sir, in a parliamentary democracy all measures of the Government must be tabled in Parliament for discussion before they are passed. This is to give the Opposition Party and the Members of Parliament an opportunity to discuss all measures which will reflect the wishes of the people. In Parliament as it is now, there is no Opposition Party. The Opposition Party make use of youngsters between the ages of 18 and 19 to carry out disturbances in the streets, while they themselves usually hide in the day time. They have thus lost the support of the people. So in the present situation where there are no Opposition Members of Parliament in this House, we, as Members of Parliament of the Government Party, have to take up the responsibility of the Opposition to examine all measures tabled by the Government. We must make an examination of all Bills, measures and motions. We must make a careful and searching analysis of all these and our views must reflect the wishes and will of the people. We must act as the voice of the people. We must bring the people's voice into this House. We must air all our views on this basis. We must carry out all this in the most objective manner. We must give our views to all these measures before us and supervise in the execution of the various proposals.

Sir, the Members of Parliament on this side are now taking up the responsibilities of the Opposition. They give views and make criticisms which are constructive. So it is different from what took place before in this House when the Opposition Party just made irresponsible criticisms, destructive in a way, of any Government measures and Bills. They tried to blame the Government for every proposal or every misdeed and they tried to depict them as being undemocratic. They described Government measures as impracticable and even went to the extent of describing Singapore as a place unsuitable for human habitation. But the present so-called Opposition here will make its criticisms in an objective manner. They will be constructive and will reflect the views and wishes of the people.

As a Member of Parliament acting as an Opposition Member here, I would like to give some of my views on the Finance Minister's Budget for 1968. First of all, let me congratulate the Finance Minister on being able to produce a Budget in which there is no proposal for a tax increase. This Budget has received the support of people in various walks of life because there is no taxation next year. It is a piece of good news to all of them. They have all welcomed this Budget. After congratulating the Finance Minister, I must express certain reservations on his Budget. I cannot support the motion without any reservation merely because the Budget does not propose any tax increase. The Minister for Finance has pointed out in his Budget Statement that he does not propose to increase taxes. This shows that Singapore's economy is not under the manipulation of any foreign economic force. It also shows that Singapore has put to good use all its social and economic facilities and services. It also shows the maturity of Singapore's society and the strength of its economy. Normally the income of a country depends on two factors. One is natural resources and the second is human resources. But in such a tiny island like Singapore there are no natural resources. So to hope for natural resources is a day-dream. Therefore, the economy of Singapore should depend on the creation of new natural resources. From the Budget Statement we can understand the economic situation better. This will help us to carry out our tasks and to face the new situation. Sometimes we find it easier to know than to practise. But on other occasions it may prove to be just the reverse. It is not easy to be sure of what is correct and what is wrong. The practical thing is that since the Budget is before us, we must try to carry it out successfully. There is no time to discuss whether it is easier to know or to practise, or the other way round. We must, in carrying out our economic policy, achieve a certain measure of success in order to implement Government's economic policies. This will have to depend on the efforts and co-operation of the people with the Government. The people want to have a productive life and to live meaningfully.

How to increase economic activities and to raise the living standard., how to solve the problem of an increasing population and to meet their material needs, how to solve the unemployment problem - all these are questions which we will have to face and solve.

I would not like to enumerate all the items in the Minister's financial statement, but some of them need our special attention. First of all, I would like to give my views in an abstract way on his Budget Statement. The present economic situation should not make us too complacent. We must redouble our efforts and strive harder to strengthen our economic position in order to meet our increasing material needs and demands. There has been an improvement in the living standard. Taxation does not worry us now. But the increase of population is quite a problem. It will create more unemployment. According to the Minister's figures, the number of unemployed, is more than 50,000, on top of which there will be retrenched workers and others coming in to make up the number. From this we can see that the unemployment situation is rather serious in our country. Moreover, as a result of the British military withdrawal, the unemployment situation in Singapore will be worse, because the withdrawal will reduce the British military expenditure in Singapore and cut down our economic activities. It will also mean a recession of the economy. It is not a problem to be faced lightly.

I do not see anything in the Minister's Statement giving a clear-cut policy to resolve this problem by allotting another item of expenditure to meet the reduction in the British military expenditure in Singapore. Because of all these factors, more people are unemployed. In addition to this, 18,000 people will be retrenched by the British military forces. There will be 25,000 youngsters who will be leaving school to join our labour market. These youngsters are full of life. They are enthusiastic and keen to render their services to society, to take part in economic activities and to serve the country and the people.

[Mr Lim Cheng Lock in the Chair]

3.51 p.m.

Mr Ang Nam Piau (Thomson): We should try our best to create employment opportunities to enable them to fulfil their wishes. The Government has already done its best in mobilising large sums of money and other resources to create employment opportunities for them. But these employment opportunities cannot meet the actual demands of the unemployed. This is a serious problem. According to the Minister, in the next three and a half years, as a result of the British military withdrawal, about 16,000 workers will be retrenched. On top of this, there will be 25,000 youngsters joining the labour market in addition to the 50,000 odd who are already unemployed. But the Government has not paid attention to the agricultural workers who are under-employed at the moment. The Government's efforts in creating employment opportunities can only provide jobs for 5,000. What about the others who are unemployed? In spite of Government's efforts, it is only able to create a limited number of jobs for the unemployed. In other words, Government's efforts are not sufficient to meet the demand of the existing unemployed. What about those middle-aged people with families to support who will be retrenched? Sir, because of the various problems now existing, we cannot be overjoyed with this surplus Budget. In the case of a family, it will have to plan its budget according to its income. But it is different in the case of a Government. A family cannot budget its expenditure more than what it earns. In other words, the expenditure of the family must be within the expected in-come of the family. If the income is sufficient, then the family can increase its expenditure. If the income is not enough, then it will have to curtail its expenditure by some means. But the budgeting of a country is not exactly like this. It is not based merely on the income, because the budgeting will have to depend, on the needs of expenditure in various fields. We cannot reduce expenditure on social services such as education and health because of shortage of revenue. We must maintain a certain level of expenditure for the social services. I support the Minister in his budgeting in such fields as health and education because the expenditure allotted to them will enable us to have a healthy and educated generation which will in turn make our future generations more economically active and useful. This will in turn benefit the economy of Singapore. And I must congratulate the Minister for Finance on his farsightedness in allotting such a large sum on education and health. I must agree with his budgeting in these spheres.

On the other hand, we must not be complacent with our present economic achievements. We must also try to re-solve our unemployment problem. At least we must be able to reduce the number of unemployed to the level that it will not endanger social security. Before we can achieve this, I can only express my qualified support of this surplus Budget.

3.57 p.m.

Mr S. Rajoo (Farrer Park): (In Tamil): Sir, from the Budget for 1968 presented by the Hon. Minister for Finance, it is evident that the level of production has gone up and the economy has progressed in many spheres. It is gratifying to note that the G.N.P. has increased by 8 per cent over that for the previous year.

The Minister for Finance has given three reasons for the good performance of our economy. They are: first, growth of trade with Indonesia; second, expansion of exports to South Vietnam; third. substantial increase in the flow of capital from Hong Kong. These three reasons are not the direct results of the conditions prevailing in our own country. By a coincidence of circumstances, we may be having today a favourable condition. However, when circumstances change, conditions will cease to favour the growth of our economy and output. For instance, when the present conditions of war in South Vietnam change, we may not be able to maintain the present level of exports to that country. In the same way, when the cultural revolution and labour unrest subside in Hong Kong, the Hong Kong industrialists who have invested in Singapore's industries may pull out their capital and return to that colony. Or they might gradually reduce the production level in Singapore while increasing it in Hong Kong. In such a case, this will adversely affect our industries.

Many types of industries have been opened in an effort to increase the Republic's production, but we do not have any raw materials to meet the needs of our factories. We are dependent at all times on foreign countries for the supply of raw materials for the use of our factories.

According to the Minister for Finance, five years ago before the number of U.S, troops in South Vietnam was increased, our trade with that country was in the range of $50 million to $60 million per year. In 1965, the value of our trade with South Vietnam rose from $110 million to $256 million. It now stands at $300 million. Five years ago, there were only 10,000 to 15,000 American soldiers in South Vietnam. At the moment, there are nearly 500,000 American soldiers.

Today, the American people themselves are demonstrating in front of the White House against the stationing of U.S. troops and direct involvement in the Vietnam war. Under these circumstances, if the American troops withdraw from Vietnam and peace returns, we should bear in mind that our $300 million export boom will be wiped out.

I welcome the warning given by the Minister for Finance that the withdrawal of British troops from Singapore in the 1970s will very much affect our economy. It gives consolation to learn that a special unit has been established in the Prime Minister's Department to study plans to put the base to productive use in order to counteract the ill effects of the British withdrawal, like unemployment and economic difficulties.

The Minister for Finance has dealt elaborately with the question of unemployment. A count of identity cards has given the figure of unemployed as 43,405. As a result of the withdrawal of British troops, another 12,000 people will lose their jobs. In addition, every year 25,000 youths, after completion of their schooling, will enter the employment market. To meet the situation successfully, the Republic will have to generate an additional $80 million expenditure each year, create 18,000 additional jobs a year to absorb those presently unemployed as well as the Base workers expected to be retrenched, and create a further 25,000 new jobs a year for the youths who will be hunting for jobs.

To meet these pressing demands, it is imperative that we should expand the volume of trade and increase the industrial output.

The Minister, who has dwelt on the growth of trade with Indonesia, has not mentioned anything about our trade with Malaysia and other neighbouring countries. This creates the impression that we do not have any trade relations with these countries.

We must bear in mind that the growth of trade with countries like Indonesia and South Vietnam is due to the prevailing conditions in those countries. We must find ways and means of strengthening our trade relations with our neighbours so that, even under peaceful conditions, our economy will be strong and stable.

Although Singapore is a small island with no natural resources, we have a wide sea around us to exploit. With the co-operation of our neighbouring countries, we should strive to do deep-sea fishing and turn our attention to producing and exporting various kinds of sea food.

It is heartening to note that plans to expand the Jurong Shipyard with a view to building medium-sized ships are being studied with the help of some Japanese firms.

It is true that our economy will get a jolt on account of the British troop withdrawal, especially when we are only in the second year of independence and tussling with the problems of unemployment and productivity. True, like Aden, Malta and Gibraltar, Singapore was once the centre of economic, commercial and military enterprises of the British imperialists. Under the changed political conditions, Singapore cannot continue to be a pillar of British imperialism. Even though Singapore cannot continue to be the political and military centre for the British, the Republic can be an important base for the expansion of British trade and commerce in South-east Asia. British troops may be withdrawn completely from Singapore, but Britain may not be able to find another country which will be as friendly and as co-operative as the Republic.

The Government should try to employ the retrenched Singapore citizens in the Base itself after it is converted to civilian use.

As a result of the withdrawal of British troops, more land will be available to the Government. I suggest that the Government use the land, for increasing productivity, including agricultural production. The unemployed may be gainfully employed in the land available.

In short, the Minister for Finance should be congratulated on presenting not only a realistic Budget but also on discussing frankly the problems facing the nation and enumerating clearly the course of action proposed to he taken by the Government.

4.07 p.m.

Mr Teong Eng Siong (Sembawang): (In Mandarin): The Minister for Finance delivered his Budget Speech on the Estimates for 1968 on the 5th of December. It immediately won the acclaim of the business community. They are all agreed that this is a far-sighted and, wise economic policy of the Government. It is also an indication of our stable economy. The main feature of the Budget is that there is no tax increase and that there will be a surplus of about $30 million. The stable economy and industrial progress can be attributed to the following factors. Firstly, our political stability with a favourable investment climate which is rarely found in other South-east Asian countries. Secondly, our economic incentives and facilities for industrial investors. Thirdly, our excellent geographic position and other economic infrastructures. Fourthly, industrial peace and excellent co-operation between management and workers and their desire to increase industrial efficiency. It goes without saying that we must try to maintain these four factors and strengthen them so as to enable our economy to advance steadily and to bring prosperity and a higher standard of living for our people.

Sir, in his review of our national economy, the Minister for Finance came to the conclusion that we have been able to achieve an increase of 8.7 per cent in our G.N.P. According to him, this is rarely achieved in the newly emergent Afro-Asian countries. They have only achieved an increase of about three to four per cent in their G.N.P. This shows that our economy is thriving and flourishing. In order to have economic progress, it is not only necessary to have competent political leadership in the economic field but also to promote a spirit of thriftiness and industry. If the people are lazy, disunited and extravagant, this will lead to an economic recession. Our national task is to promote the spirit of thriftiness, industry and discipline in our people not only in their private lives but also in their work.

Sir, we are also glad to note in the speech that tremendous progress has been made in our pioneer industries. This can be shown in the following figures. In 1966, there were 97 pioneer industries, but this year we have 126 industries - an increase of 30 per cent. In terms of capital investment in 1966, the figure was $293 million. The figure for this year is $336 million - an increase of 25 per cent. Last year, there were 11,000 people working in the pioneer industries but this year the figure is 13,5000 people - an increase of 22 per cent. This shows the tremendous progress that has been made in our pioneer industries, in recent months, almost every day sees new factories being opened. In November, ten factories were opened with a capital of $25 million, the greatest of which was the sugar refinery. The sugar produced by this sugar refinery is not only sufficient for local consumption but it can also be exported to other countries to earn foreign exchange.

[Mr Speaker in the Chair]

4.10 p.m.

Mr Teong Eng Siong (Sembawang): We have better prospects of our industrial development. For example, many investors from Hong Kong have come here to invest their capital which runs to $50 million. Many East European countries have also expressed their willingness to come and set up factories here. These facts indicate the bright prospects of our industrial growth. Of course, industrialisation, apart from strengthening our economic position, will also provide more employment for the people. In this respect, we have achieved good results and I believe that with greater effort we will provide more jobs for our people.

Mr Speaker, Sir, in his speech, the Minister for Finance also revealed that there has been an increase in our external trade from January to September last year. In 1966, our imports amounted to $5,530 million. The figure for this year is $5,956 million - an increase of about $425 million. This was due to our increased exports to Indonesia and Vietnam. This was made possible because of the fact that we have won independence and have adopted a non-aligned policy in our foreign affairs. But we must be aware that the international market is highly competitive. If we want to sell our goods in the international market, apart from adopting a non-aligned policy and establishing friendly relations with other countries, we must also try to lower the cost of our production. If we can sell more of our products, there is no cause for our manufacturers to worry about their profits. We must also try to raise the quality of our products. I have often said that our local products are not as good as foreign goods and that, therefore, the consumers do not want to buy them. If this is so, then our manufacturers must try their best to improve the quality of their goods in order to compete with other foreign goods on the international market.

Mr Speaker, Sir, although in the past one year there has been an increase of 7 per cent in national income and an increase of 8 per cent in trade, we should not be complacent because, according to a disclosure of the Finance Minister, there has also been an increase in unemployment. So we can see that there are three kinds of increases, although the last kind of increase is not so very good and I believe it is not an increase that is welcome to our Finance Minister. Our problem is: how can we solve it? The Finance Minister has given these figures: firstly, there are at the moment 52,630 unemployed persons according to the Sample Household Survey which, according to the Minister, is more reliable. Secondly, in the next three and a half years the run-down of British military bases will give rise to about 12,000 unemployed, persons. Thirdly, every year we have about 25,000 youngsters entering the labour market on leaving school. These problems are a challenge which our country is now facing.

As regards a solution to these problems, the Minister has offered three ways:

'(a) generate an additional $80 million expenditure each year to offset the reduction of British military expenditure;

(b) create 18.000 additional jobs a year to absorb those who are now unemployed and to provide work for base employees expected to be retrenched;

(c) create a further 25,000 new jobs each year for the teenagers coming of age and looking for work.'

But after offering all the solutions, he asked, "Can we do this?" Mr Speaker, I want to ask: how can we do this? First, according to the Minister, we have to generate an additional expenditure of $80 million, My question is: where and how are we going to spend the money? Is it the intention of the Government to invest the money in industry, or to assist the present industry, or to set up a bigger dockyard, say, in Sembawang or in other parts of Singapore? Have we got a comprehensive plan for all this? I hope I can get an answer from the Minister for Finance.

Secondly, the creation of 18,000 jobs for the unemployed and the creation of a further 25,000 jobs for the new job seekers. That means a total of 43,000 jobs per year. How are we going to create so many jobs? According to the Finance Minister, we have only been able to create about 5,000 jobs a year in industries, which include the building trade, tourism, and manufacturing industries. So the jobs created are far, far below our actual needs. But according to him, in spite of all this, we have every confidence in overcoming our problems. I entirely agree with his view, because at the present moment our Economic Development Board is on the proper course and we are able to face this challenge. But I feel that we should do all we can to marshal all our natural and human resources in order to overcome all these problems. I would like to offer four proposals for the consideration of the Finance Minister who, I hope, will pay particular attention to what I have to say.

Firstly, we should immediately look into the possibility of agricultural expansion, such as setting up animal husbandry in the neighbouring islands. We must not overlook animal husbandry because this industry gives about a few million dollars' income to Indonesia. By creating animal husbandry, we can give more jobs to our people.

Secondly, we should look into the question of growing seaweed. Dr Tham Ah Kow, who is the head of the Fisheries Division of the University of Singapore, has said that there are many uses to which seaweed can be put. According to him, seaweed is edible and some kinds of seaweed can be made into cosmetics or even preservatives. In his estimate, if we have about 1,800 acres for the growing of seaweed, we can earn more than $10 million in foreign exchange per year. This is a good way of increasing our national income, and I do not know whether the Government will give serious consideration to this proposal.

Thirdly, we should vigorously expand our fishing industry. We are an island State and we must make use of our geographical position for our economic growth. The people of Singapore consume a lot of fish, and we depend on various countries for fish which amounts to 75 per cent of our actual consumption per year.

Fourthly, we must expand our tourist trade because a lot of countries in the world depend on tourist trade for their national income and foreign exchange. These countries include Japan and Hawaii.

In short, Mr Speaker, the present Budget is a very progressive and praiseworthy one because the main items of expenditure are on education and the social services. This is a sign of the Government's efforts in the creation of a welfare State, and I believe that with all efforts put together, our national economy will progress even further, thereby bringing us nearer to the creation of a prosperous, a more fair and equal society, with all the comforts for our people. Finally, let me read you a poem in the vernacular language in praise of this Budget. The lines are as follows: - Tributes to the Budget of 1968, Men in commerce and industry have paid, Delighted are the people in general, With a painless Budget which they hail.

4.23 p.m.

Mr Ho See Beng (Bras Basah): Mr Speaker, Sir ---

The Minister of Defence (Mr Lim Kim San): In Mandarin?

Mr Ho See Beng: I will speak Mandarin when it comes to the turn of the Minister of Defence; not now.

Mr Speaker, Sir, I rise in support of the Budget. It is a Budget in keeping with the present circumstances of Singapore's political and economic growth. The Minister for Finance has really made a realistic appraisal which is reflected in his "standstill budget". Mr Speaker, this is not a matter of "I support you" or "You support me".

There is one particular feature in the Budget which I wish to comment on, rather than to criticise, and that is, the increased provision for the defence and security of Singapore. There are some people who question the wisdom of the Singapore Government in maintaining a large military force. In their opinion, the island of Singapore cannot be defended against any external invasion by a determined enemy. Such people miss the whole point by not agreeing with the Government's policy in maintaining a large security force. The principal purpose of maintaining such a force, as I see it, is to strengthen and maintain internal peace and order and not to guard against external aggression. The need for a large security force to maintain internal law and order is not so far-fetched, for recently we have witnessed how a handful of determined agitators could cause widespread disorder in a neighbouring country on the pretext of currency devaluation by the Malaysian Government. We saw how some irresponsible elements were able to stir up the emotions of the public against law and order, which resulted in a communal conflict. Therefore, Sir, the preparedness to guard against such a situation arising in Singapore itself amply justifies the maintenance of a large security force. There is no need to stress the importance of keeping peace and order in Singapore. As the Minister for Finance himself has stated in his Budget Speech, it is vital for Singapore's industrial development to encourage the inflow of foreign capital and investment, because such an inflow will not take place if Singapore has no political stability.

Sir, it is also my intention to make a few remarks on the Ministry of Education. I note with gratification that more than one-third of the Budget is devoted to social services, which include education. The importance of education to the Republic of Singapore cannot be over-emphasised, particularly as the only natural resource that is present in Singapore for its industrial development is skilled labour. In this respect, I regret to observe that the Ministry of Finance, or the Government, does not appear to pay sufficient attention to the exploitation of our only natural resource.

At this juncture I must pause and say that I do not know whether the Minister for Finance or the Minister for Education is responsible for such a state of affairs where our educational system continues to churn out more white-collar workers than blue-collar workers who are essential in manning our increasing number of factories. The fact is that in comparing the total number of secondary grammar schools with that of vocational schools in Singapore, I notice that there are far too few vocational schools in existence to train technicians and artisans. Sir, I have also glanced through the Development Estimates for 1968. Although the Minister has made provision for $4,204,520 for vocational institutes as compared with $5,937,120 for primary and secondary schools, no doubt he has good foresight because he feels that if we are going to industrialise, we have to have more technicians and artisans. However, the number of vocational schools in Singapore today is still very much less than that of grammar schools. The need for highly qualified technical specialists is not so pressing as the need for relatively less qualified technicians and artisans: yet our educational system is geared to the production of specialists rather than of technicians. I do not know why there is such a situation in the midst of cur attempt to industrialise our economy. It may be that our educational authorities do not have the energy or imagination to reorientate our educational system to meet the changed economic and political circumstances in Singapore. Or it may be that the Minister for Finance has not paid sufficient attention or has not devoted his attention to the establishment of more vocational schools, which is the reason why such schools cannot turn out enough competent technicians and artisans. If this is the case, it may result in employers having a low opinion of the training given by the present vocational schools. This leads to a vicious cycle, that is, employers do not want to employ graduates of our vocational schools because of their poor training, and students wishing to seek admission to such schools are hesitant for fear of the difficulties of getting employment after their graduation. Sir, is it because of the poor demand of our vocational school graduates that the educational authorities or the Minister for Finance feel justified in their policy of treating the vocational schools as poor cousins of the secondary grammar schools? In this connection, I also wish to comment on the bias of employers against the locally-trained graduates. I know that the Singapore Government has done its best to boost the morale of the locally-trained graduates by giving preference to the employment of locally-trained graduates in Government departments and statutory boards. But, unfortunately, it is not the case with the employers in the private sector who continue to value foreign diplomas and degrees more than the local ones. It will not only be in the interest of the locally-trained graduates but also in the interest of Singapore as a whole if the Government makes a strenuous and determined effort to eradicate the private sector employers of their bias against the products of local education which is by no means inferior to the product of foreign education, judging by the success of Singaporeans in foreign educational institutions.

4.33 p.m.

Mr Bernard Rodrigues (Telok Blangah): Mr Speaker, Sir, I rise in support of the Budget for 1968 which deals comprehensively with the economic situation of Singapore today. Much thought and effort appears to have gone into the preparation and presentation of the Budget for 1968. A layman such as I, where economics is concerned, would find it very difficult to criticise such a realistic Budget. While I am full of praise for the Budget which gives a proper emphasis to the problem of internal security, as a trade unionist. I wish to bring to the attention of this House a topic to which passing reference was made in the Budget Speech. What the Minister for Finance has said was "jobs lost by contraction of industries or closing down of established firms for one reason or another." And what I wish to point out is that one of these reasons, if not the principal one, is the necessary consequences of Singapore's effort to industrialise its economy. With the conversion of Singapore's hitherto entrepot oriented economy to a manufacturing industry oriented economy, it is to be expected that the change in the economic activities must be reflected in the utilisation of capital and labour in Singapore. Unfortunately, labour is not so mobile as capital and cannot adapt itself as easily to the change in economic activities. Members of the House are aware that one of the first steps which Singapore took in conjunction with its industrialisation projects was to legislate for the protection of the manufacturing industries in Singapore by imposing import quotas, import duties and other restrictions on the flow of foreign manufactured goods. particularly those of the range in competition with locally-made goods. The result is that those import/export houses which deal with imports of foreign manufactured goods now being made in Singapore find that their volume of business has diminished and their profits have disappeared or turned into losses. Their reaction is to cut down or retrench their staff in order to preserve their profits or minimise their losses.

In making this comment today, my purpose is not to voice any complaint about the necessary retrenchment of workers as a result of Singapore's industrialisation programme, but to persuade the Government to mitigate the suffering of the retrenched workers and their families as far as it is humanly possible. What I seek to bring to the attention of this House is to point out that these workers, on top of their losing their careers in which they have spent the best years of their lives, find to their disbelief that they have also to pay income tax on the retrenched benefits which they have received from their employers as compensation for loss of career. This failure to grant exemption to retrenched employees on income tax liability in respect of their retrenchment benefits is, I say, a great injustice to workers who, through no fault of their own, find themselves without employment and are not likely to obtain alternative employment within a short period of time during which their small retrenchment benefits may tide them over. As a matter of fact, it is probable that some of the retrenched workers will never obtain alternative employment because, by reason of their age, they are too old to be trained for different occupations. The matter of retraining workers retrenched as a result of Singapore's industrialisation programme for alternative employment in the pioneer industries is, I regret to note, not dealt with by the Minister for Finance although he has taken great pains over the problem of retraining workers retrenched as a result of the withdrawal of the British military forces. I, however, will not confuse this House by further reference to any retraining scheme.

The question of relief for income tax in respect of any lump sum payment for loss of employment is, as far as I understand it, dependent on the discretion of the Comptroller of income Tax. If the opinion of the Comptroller is that such lump sum represents the gratuity payment for permanent retirement from employment, then the recipient of such gratuity is not liable for any income tax. On the other hand, where the lump sum payment represents monetary compensation for loss of career, as in the case of retrenched workers, who in the opinion of ---

Mr Speaker: Order, order. I must draw the Member's attention to Standing Order 82 which provides that this debate should be confined to the general principles of Government policy and administration as set forth in the Budget Statement and as indicated in the Main Estimates. The point the Member is making can, I think, very well he made under the amendments to Head 0807 (Inland Revenue) when we consider the Main Estimates. The present debate is not the appropriate place to criticise a matter of detail, as the Member is doing.

Mr Bernard Rodrigues: Mr Speaker, the Minister for Finance did make a passing reference to the impending retrenchment of employees of British Bases, and I was just referring to the fact that he has omitted any reference to the employees retrenched as a result of Singapore's industrialisation programme although the Finance Minister, in his Budget Speech, made reference to this industrialisation programme.

Mr Speaker: There is no objection to a broad criticism, but if the Member is making a detailed criticism of the principles on which the Commissioner of inland Revenue guides himself, on the question of possible relief to retrenched employees, the appropriate place would be under Head 0807. The detailed criticism now being made is out of order in the present debate.

Mr Bernard Rodrigues: I accept your ruling.

Mr Speaker: Do proceed with the rest of your speech. Mr Rodrigues.

Mr Rodrigues: The rest of my speech, Mr Speaker, Sir, is about the Comptroller of Income Tax, and the hope that the Minister for Finance will relax the strict law on payments arising out of the coming retrenchment of the workers of the British military bases and the future retrenchment of workers due to Singapore's industrialisation programme. I hope that after union negotiations on benefits the workers be relieved from income tax.

Mr Speaker: Under Head 0807, the Member for Bras Basah has an amendment to reduce the vote for the item for the whole head and I think it would be appropriate to make your remarks there, Mr Rodrigues. But if you are not making any further general comments under Standing Order 82, I will call the next Member who wants to speak.

4.41 p.m.

Mr Tay Boon Too (Paya Lebar): (In Mandarin): Mr Speaker, Sir, when it comes to the end of the year, people pay particular attention to Parliament. It is mainly because they want to know whether the Government will propose any tax increases in the Budget for the coming year. Generally speaking, the Government Budget should provide at least for the maintenance of efficient administration, social services, educational facilities and a large sum of expenditure relating to security and foreign affairs of the country. There will then be a review of whether revenue and expenditure will balance. Fortunately the people of Singapore are under the guidance of a democratic socialist, clean, honest, incorruptible and highly efficient P.A.P. Government which has endured two years of independence. The Republic of Singapore does not only exist but also continues to progress and prosper. The standard of living of the people is also improving. This augurs well for the germination of a new generation of democratic socialists in this newly emergent independent country of ours. At the same time, it is also a victory for the democratic socialist economic policy of the Government, and also tolls the death knell for the exploiting private capitalist economic policy and the Communist belt-tightening economic policy.

Sir, when the Budget of the Finance Minister was introduced in this House and there was no proposal for a tax increase next year, all the people of Singapore were elated. They praised it. It was a stimulant to them. People in all walks of life, be they merchants or hawkers, need not have to worry about the increase in prices of consumer goods because of tax increases and they need not have to worry about any economic recession. The working class, whether hawkers or wage-earners, also need not have to fear an increase in the prices of consumer goods because of tax increase. At the same time, the Budget also serves as concrete proof to foreign investors that Singapore's economy is very stable and sound: its political situation is very stable: and Singapore is a haven for foreign investment.

But, Mr Speaker, I have just said that this is only the germination of democratic socialism. We must go a step further and irrigate and cultivate the shoot of democratic socialism in order to enable the shoot to blossom into flower and achieve the highest ideal of socialism - from each according to his ability and to each according to his need. In order to achieve this, all the citizens of Singapore should stand firm on their respective positions and redouble their efforts in order to ensure the security and economic progress of the country. I believe that with the co-operation and joint efforts of our people, our economy will grow year by year and our national revenue will increase year by year which will be followed by social stability and economic prosperity and progress.

Sir, as democratic socialists, we are dedicated to the establishment of an egalitarian society where there is no hunger, no shortage of material supplies and where the people can live peacefully together. Therefore, the figures of unemployment disclosed in the Minister's Budget Statement are rather alarming. This really is a very grave economic problem. The number of unemployed persons is 52,630, which is 9 per cent of our working population of 124,025 persons. So this is not far away from the danger line where there will be social insecurity and social disturbances. Therefore, we cannot close our eyes to it and sit idly by without doing anything. The difficult and onerous task before us should not be borne by the Government alone. It is not enough for the Government alone to resolve this problem. It needs the co-operation of people in all walks of life. Otherwise, when the river overflows its banks, when the danger line is overstepped, it will mean that our whole country and all the people will face disaster. Sir, in order to prepare for the rainy day, we must take certain measures. I agree with the Member for Havelock. We must devise some means to solve our unemployment problem. I suggest that the Government should create more hawker sites or bazaars and provide loans to the unemployed as capital for their business. The loan should be free of interest in order to assist them in their livelihood. Secondly, the Government should set up some kind of national factory in order to use this cheap labour. The Government should also legislate to put these unemployed persons in various commercial firms to work. If the Government can do all this, it will not only be able to create more and new opportunities for employment, but will also be able to lay an optimistic foundation for our future economy, thereby automatically resolving our unemployment situation with ease.

Mr Speaker: I think it is convenient to take the suspension now. I suspend the sitting and will take the Chair again at 5.20 p.m.

Sitting accordingly suspended at 4.52 p.m, until 5.20 p.m. Sitting resumed at 5.20 p.m.

[Mr Speaker in the Chair]

Debate resumed.

Mr P. Govindaswamy (Anson): Mr Speaker, Sir, may I first congratulate the Minister for Finance and his Ministry on the excellent work done and the fruitful results obtained during the year under review. Hon. Members should not forget that much of this work was done by the previous Finance Minister, the Member for Cairnhill, who held the reins of finance since our separation from Malaysia.

The House has been told that there has been continued expansion of our economy this year. Astronomical figures were cited which were not only impressive but also revealing and astounding, particularly to the layman. In the Minister's own words, the total amount of cargo discharged and handled this year compared with that of last year showed an increase of no less than 15.3 per cent. The number of ships using our harbour shows an increase of 8.8 per cent over last year. The volume of bank deposits in the first ten months of this year shows an increase of no less than 29 per cent. The number of new buildings commenced this year shows no less than a 66 per cent increase over last year and private construction was particularly active, showing a 94.5 per cent increase, etc.

All these increases are achievements of no ordinary dimensions and the Minister and his predecessor certainly deserve to be thanked by every citizen of Singapore. It is perhaps a little disappointing to note that some of the reasons given for the good performance of Singapore's economy this year were due to external factors, such as growth of trade with Indonesia, the expansion of exports to South Vietnam, and the flight of Hong Kong capital and industrialists to Singapore. While it may he safe to say that Indonesian trade is relatively stable and will increase even more in the future, the other two avenues of trade may suddenly conic to an end. In this light, Sir, the great increases mentioned earlier appear partly to be the result of good fortune for us following the ill luck of others.

It is my humble observation as a layman that the Minister has unfortunately not touched upon certain aspects of growth in our economy which can be directly controlled by ourselves. Such aspects as encouragement of local primary produce seems to have been overlooked. I am not unaware of the efforts put in by the Primary Production Department in this respect, but certainly there must be plenty of arable land for the increased cultivation of vegetables and the rearing of poultry, pigs and even cattle. In countries that are short of land, efforts are made to intensify cultivation and improve the breed of livestock. This will not only help us to conserve foreign exchange but also provide more employment opportunities for the farmers in the rural areas. I therefore hope that the Minister in his Annual Budget Statement for 1968 will be able to add to his formidable list of millions, the millions more from eggs, chickens and pigs.

Mr Speaker, Sir, I will now turn my attention to our industrialisation programme. The Minister, by providing incentives and all kinds of taxation benefits, has been able to attract foreign capital into the State to set up new factories in Jurong. Throughout the years we have read in the newspapers or seen on television a Minister either laying the foundation stone for a new factory or making a speech at an official opening of a factory. Such factories have been able to provide some employment but only in the region of a few thousand and certainly have not created enough jobs to cater for the needs of all school leavers. The setting up of these factories and the creation of new employment should keep our trade unionists like the Member for Bras Basah and the Member for Telok Blangah happy. But it is most disappointing to note that the bulk of the population, i.e., the consumers, have to pay more for the goods which they purchase. I realise that in order to protect local industries, quotas have to be placed on imported goods and prices of imported goods have risen. But what really takes the cake is the fact that the prices of similar local products are no cheaper. They are sometimes even dearer, though by no means of the same quality as imported goods. This has a direct bearing on our cost of living and one begins to wonder whether these new factories are set up to help the people of Singapore or to help the industrialists. Admittedly these new factories contribute in some way to lessening the unemployment problem, but cannot something be done to keep down our rapidly rising cost of living? While it may be right for the Government to provide tax exemptions, export incentives and other protective measures such as quota restrictions, which result in increases in the prices of imported goods. I see no reason why prices of locally-produced goods should follow the prices of imported goods. To say the least, their quality is, in most instances, not even better than the imported goods. We have local boxes of matches which sometimes do not light except after considerable application of friction, and even cigarettes which result in sore throats and coughs, much to the benefit of our doctors, even though we are assured that the tobacco is 100 per cent Virginia!

In conclusion, Mr Speaker. Sir, I respectfully urge the Hon. Minister for Finance, while consolidating on his Ministry millions, not to forget the thousands that are being lost in the artificially inflated cost of living.

5.30 p.m.

Mr Ng Kah Ting (Punggol): Mr Speaker, Sir, there is a saying, "Time and tide waits for no man". True enough, the life of Parliament for this session is coming to its end and with it, fresh elections would be held next year when the people would vote for another group of Parliamentarians into this House. I do not mean that an entirely new group will fill the seats in this House. By this, 1 mean the people, the electorate, will give another mandate to the Government to continue to be responsible for the general welfare and well-being of the State.

Today we are gathered in this august Chamber to debate the financial policy of the Government for the year 1968 for which its introduction was made by the Finance Minister in his Budget Statement to this House on the 5th of December this month.

Sir, the Minister for Finance has termed this Budget as "a continuation Budget". Well, a continuation Budget has no painful effects on the people in the sense that there are no new taxes for the people to bear.

The economy has grown rapidly with the result that it will sustain next year's Budget. This has been fully explained by the Finance Minister in his Statement. I propose to leave other aspects in the Budget to my colleagues, the Back-Benchers. On my part I propose to deal with several special aspects pertaining to the financial policy.

(a) Details of revenue as contained in the Estimates of Revenue and Expenditure of Singapore for the year 1968 as contained in Paper Cmd. 26 of 1967;

(b) The acute problem of unemployment;

(c) The tourist trade;

(d) Unemployment caused by the military run-down of the British bases in the mid-70s;

(e) Industrial growth; and

(f) Defence expenditure.

Regarding the first point, I have gone into the Main Estimates in detail and would be grateful if the Minister would enlighten the House with more details. In particular, I refer to the Estimates of Revenue, Class I, Code 113-121 under the subhead "Payroll Tax". The estimated revenue is $10.7 million and, according to the previous Minister for Finance, such revenue collected would be utilised for the benefit of the unemployed. I think the House would also like to be informed of the total amount of revenue in respect of payroll tax collected by the Finance Ministry this year and to what good use has it been made of to assist the unemployed. Also, what schemes would the Government introduce to assist those unemployed? So far, to my knowledge, no details have been given regrading the utilisation of the payroll tax.

I come to my second point which is the unemployment problem. This problem is not recent; in fact, it has existed for more than a decade. It became so acute in the Fifties that in the general elections of 1959, the P.A.P. romped home with an overwhelming majority of 43 out of the 51 seats it contested. Why was this so? Everybody was given to understand that the P.A.P. would be able to solve the major problems then in existence, for example housing and education and political stability. In the fields of housing, urban renewal, development in the rural areas and education, a bouquet to the Government is well deserved. Everybody agrees that great strides and progress have been made in these fields.

However, unemployment today still poses the most serious social problem. The Finance Minister has gone into this problem in great detail. He has traced that - I quote:

'in spite of rapid population growth, the increase in unemployment has been from 29,600 in 1957 to 52,630 in 1966.'

I remember well that the Minister for Labour, in reply to my question on unemployment, stated that employment is on the increase and the figure he gave to the House then was in the region of 70,000. He also assured this House that the Ministry of Labour would find ways and means of reducing this high figure through the institution of courses like catering, hotel management, etc. in order to reduce not only this figure but also to provide the necessary avenues to the know-how in such sectors.

The Finance Minister went on to say:

'The seriousness of the present position must not be underestimated, for the present level of some 9.7 per cent of the work force, has not very far removed the danger level where social discontent may provoke instability.'

I fully agree with him on this.

But coupled with this, is the "un-employment created by the reduction of British Forces" and this will aggravate the already serious unemployment problem. One then asks, "How do you propose to go about solving this problem?" The Finance Minister states that the answer is "industrial growth" for it remains our principal weapon to provide more income and employment. I would say that that is quite true, but I would further ask, "How many unemployed would such growth be able to take in?". We must bear in mind the ever increasing population of the unemployed and to quote the Minister again when he said in his Statement:

'With the prodigious efforts we put in and the vast sums of money and resources which the Government had been channelling towards increasing the growth of manufacturing industries, all that has been achieved is a net increase of some 5,000 jobs each year.'

He went on further to state:

'Clearly this rate of increase is inadequate to meet our future needs. It has not even absorbed the increasing numbers of young people looking for jobs.'

He further stated:

'To counteract the effects of military reductions and to reduce the number of unemployed persons, we will have literally to redouble our present efforts to promote industrial growth.'

It is indeed heartening to note that the Government is fully aware and understands this serious problem. I would say that we must not only redouble our efforts but to "retreble" our present efforts.

Now that we have solved many other social problems, I think we should concentrate on this problem and find ways and means of providing the unemployed with employment. This remains the main headache of the day.

One of the ways of reducing unemployment is the tourist trade. This is the factor which "will come as a very welcome element generating much local expenditure and providing a large volume of employment," so says the Minister.

The tourist industry, to my mind, should be further developed. It is one aspect that will bring us a lot of benefit and good. In other words, it should be commercialised as in many countries in Europe. To develop this industry, we should bear in mind the facilities available. I think the present facilities are insufficient and in this respect the Tourist Promotion Board should come in not only with the idea of promoting tourism but to find ways and means of developing tourism. Some countries depend largely on the tourist industry and I do not see why Singapore should not exploit it.

In tourism, I think there are tremendous potentialities which remain to be tapped. 'With the construction of five first-class hotels totalling 1,509 rooms, 2,500 persons will be employed. Another 16 hotels are under construction giving prospective employment to 3,500 people. And for the next three years, they will generate an additional 9,000 jobs directly in these hotels. That is according to the Finance Minister. He also states that "they constitute a very welcome impetus to our economic growth." Here one can see the importance that tourism can have for us if we tap its rich resources. However, Government participation is not enough and those involved in tourism should understand and exploit it not only for their benefit but also for the benefit of the country as a whole.

With this, I come to the problem of unemployment caused by the run-down of the British Bases in the State in the 1970s. How do we go about facing this problem? To find jobs for some 12,000 at the rate of 3,400 each year is another problem and the Minister has accepted this as our responsibility to our citizens affected by this run-down. Since the British Government has already made known to us and to the world in its White Paper regarding withdrawal, I hope the Government will get down to work on this immediately, in conjunction with the Labour Ministry, and put up a White Paper on it, as this problem is already affecting the minds of all those employed in the Bases. Their main question: "What steps will our Government take to assist us in our plight that will come within the next five years?" I have also in mind to ask the Minister for Finance whether he will explain an item in the details of Revenue, Class I, Code 160-000, and that is, Current Transfers from Abroad, where a sum of $ 3.675 million under "United Kingdom Mitigatory Aid on account of Services Rundown" will be paid. As I understand it, Sir, the Government's policy on foreign aid is that we do not want aid freely so as to tie our hands and feet in pursuit of a non-aligned foreign policy. Therefore, this mitigatory aid needs to be explained.

The Minister has pointed out that industrial growth remains our principal weapon to provide more income and employment. I admit that undoubtedly the Government has been vigorous in encouraging industries, but I would like to add that trade is still vital to us and must be further developed. It may not be a provider of employment, but certainly it is an important digit of our economy. Therefore, I would suggest that trade ties with more countries be pursued. I observed that there have been many trade delegations undertaken both by Government and the traders themselves. I have in mind the establishment of more trade agencies. We can have them in our embassies or otherwise. In other words, we need to build a better sales organisation in trade and for our industrialisation programme, i.e., the factories. I am not saying that our sales organisation is no good. Far from it. But I am of the opinion that we should build up a good sales organisation, both local and abroad. Let us say, for example, a factory may be producing first-class products, but if it has no proper sales organisation, I am afraid the sales would not be up to expectations after all. Hence, the need for Government to consider this matter, as it is within their scope, and this of course will help the industries a lot.

Along with this, Sir, I would like to know whether previous suggestions for the setting up of agencies, like quality control agencies and credit agencies by the Government, have been looked into. If they have been looked into, what steps in this direction have the Government taken? This, I believe, would increase the volume of our trade and also the technical know-how of the developed countries, especially those in the engineering and ship-building fields. I have in mind to suggest to the Minister for Finance that more industrial development scholarships be awarded, for I am sure they would be repaid manifold.

May I now, Sir, refer to Defence expenditure as contained in the Statement. With the ultimate withdrawal of the British Forces and Bases from the Republic by the mid-70s, we are faced with the question of having to defend ourselves. We know that we cannot depend on the British to defend us after 1975. Hence, the increase in expenditure on Defence. The Minister has made it known that this increase, I quote, "in the Estimates is to pay for the implementation of this Plan". I take it to mean. "the establishment of a total of seven Infantry Battalions which, with supporting arms and services, would provide the elements of two Infantry Brigades." I fully support this in terms of maintaining our survival. I think this expenditure is modest. Most countries in the world have armies of their own and they even have defence pacts with neighbouring countries, e.g. N.A.T.O, and S.E.A.T.O. I would ask whether we could have defence alliances, in particular, with the countries in South-east Asia so that South-east Asia would be a more peaceful place. I believe this remark should have been directed to the Minister of Defence, but I think the Minister for Finance, who has been privileged to be the Minister of Defence for two years, will comment on this.

Last but not least, Sir, I think I would be wide of the mark if I do not hand a bouquet to the Minister for Finance for introducing a painless Budget for next year. He has taken pains to explain to the House the serious problems lying ahead of us and what steps have been taken to try to solve such problems. In other words, he has been both frank and honest in his Budget painting which has given all of us a clear and good picture of what the situation would be like in the foreseeable future.

On this note, Sir, may I congratulate the Finance Minister - though he is not present now - for his Budget Statement, and I fully support the financial policy of the Government for 1968.

5.58 p.m.

Mr Chow Chiok Hock (Ulu Pandan): (In Mandarin): Sir, from the financial statement of the Minister for Finance, we see that over the last two years the independent Republic of Singapore has made much progress in economic fields. Our economy is progressing by leaps and bounds. The Minister has not proposed any new tax increases, and this shows that our economy is very sound and stable. I also believe that it is due to the efforts of our Government and the people as a whole that we have achieved this state of the economy. However, we should not be complacent. We should redouble our efforts to seek greater means to promote our economic development and growth, so as to further improve the standard of living of our people. We should not be complacent for what we have already achieved. Our country is a regenerating one. We are self-reliant, and we should seek our own economic development ourselves. We must not depend on others.

In order to develop our national economy, I would like to make some suggestions to the Minister for Finance. First of all, we should set up a Central Bank in our country. Now that we have our own currency, a national Central Bank is very necessary at this juncture. We owe our livelihood to trade which is one of the main sources of sustenance of our country. And in order to place our commerce and trade on a very stable and firm grounding, we should have a very sound currency to back it up. At the moment, our currency is quite stable and sound among commercial and financial circles which have full confidence in it. So if we do not do what I have suggested, then some people may begin to lose faith in it. So our financial system is still not good enough. I feel that a Central Bank is one of the necessary requirements of our country for our economic development. It is not enough for a country to have big or small financial institutions such as banks. There should be a Central Bank to organise, co-ordinate and control the various financial institutions and to direct and channel the investments of our capital so that the idle capital of the people can be channelled into correct investment fields and put to better use. A sound economic system will enhance the prestige and stability of our currency. It will boost up the confidence of the people in our currency. It will also bring prosperity to our commerce and increase our industrial development.

The Minister for Finance has also paid great attention to tourism. There have been quite a number of people coming to our country on holiday. This will increase our economic prosperity. So tourism is an important item in our economy. Many tourists find difficulty in getting hotel accommodation when they come here, as mentioned by the Minister for Finance. A few months before they come to Singapore, they should book hotel accommodation in advance. Why should we not try to encourage economic development in this field? We should make more use of our limited space to build hotels vertically. Hotels can be constructed skywards. There will be many storeys and rooms to accommodate more tourists. This will create more employment opportunities. We know that the Government, in promoting and encouraging industrial development, has given a lot of incentives, for example, a five-year tax exemption period. I feel that if we want to encourage the development of tourism, we should also formulate certain programmes to encourage the tourist promoters and people in this line of business to develop tourism. A large hotel may employ more than 1,000 persons. The tourists will be attracted by the warm reception given to them. Tourism is a labour intensive field of industry. We must give concessions to the tourist trade which will also earn for us foreign exchange which will in turn help our economic development.

Mr Speaker, Sir, we should also not overlook the industrial sites in Jurong, Redhill, Tanglin Halt, Kallang Basin, Kampong Ampat, etc. These estates have all had surprising development and have won the praise of many trade delegations from various countries. These industrial estates have left them with a very deep impression of our industrial development. Our main aim is to resolve our unemployment problem and to seek a new line of living for our future generation. This aim is very proper and necessary but there are certain industrialists and manufacturers who have made use of the incentives given by the Economic Development Board to fish in troubled waters. They have raised the prices of local products and this has led to more people being unemployed. This has caused a great loss to the Government in respect of revenue and taxes.

Here I would like to elaborate further. These manufacturers have put in their capital to set up factories. They have received from the Government concessions and incentives, such as a five years' tax free holiday. The Government has, in the interest of local manufacturers, levied double taxation by way of tariff against imported goods. The Government has also set up a committee to look after the local products. Also the machinery to be used by the factories will be exempted from import duty.

Next, the Government is also encouraging Government departments and statutory boards and all people to buy our locally-manufactured goods and exempt almost all raw materials from import duty. But after these manufacturers have produced their goods, they not only cannot compete with imported goods in quality but also in price. Their prices are many times more than those of the imported goods. Take, for instance, matches. Before we have any factory manufacturing matches, we could buy a packet of matches for 20 to 30 cents. Every packet contains 10 boxes of 80 to 90 sticks of matches. But the Government, in order to implement their taxation policy on imported matches, and after there are local manufactures, has levied $96 on every carton of matches imported. Because of these high tariff duties, the local people have stopped buying imported matches. But the price of locally-produced matches has increased to 45 cents per packet. So this is much dearer than the price of the imported matches. The quality of our locally-manufactured matches is also inferior. Every box contains only about 50 sticks. And because there are no imported matches to compete with locally-manufactured matches, the consumers suffer.

Take another example, white sugar. The situation is the same. Since a sugar refinery factory was set up in Singapore, the Government has levied tariff duties on imported sugar amounting to four cents per pound. Sugar imported from Taiwan and elsewhere has disappeared from the market. Locally-produced sugar has replaced it. But regrettably the locally-produced sugar costs 41 cents per katty. Raw sugar has to be bought from abroad and the people have to pay more for this and so the cost of living has gone up.

The Government has also levied tariff duties on other imported goods so that importers have found it difficult to import foreign goods and to sell them on the market locally. Thus our workers, hawkers, lorry drivers, porters, lighter-men and other people are adversely affected because of price increases in many consumer goods. The number of jobs created by these manufacturing companies and newly-established industries cannot compare with the adverse effects of the increased prices of locally-made goods on the population. On top of this, our locally-manufactured goods sometimes cannot find a market locally. As a result, some of the factories will have to close down. The Government will also lose a lot of revenue from this source. In the end only a few manufacturers will benefit from the Government policy. Such manufacturers not only enjoy a period of exemption from tax, but also other benefits.

Sir, I have just said that we cannot deny that industrialisation has made some progress. But, on the other hand, we must not disappoint our local manufacturers. The point that needs consideration is how to guide them towards the industrial objectives we have in mind and to adopt the correct and proper measures to go about it. The Minister has mentioned the National Steel Industry and the Jurong Shipyard. These two institutions have, on the one hand, tried to lower their prices locally and tried to better the quality of their products in order to compete in the international market so that our people will benefit as a result. These two institutions are good examples.

As for those speculative so-called industrialists, we should set up a committee to investigate them. We should reconsider the quota system and the tariffs against imported goods and matters relating thereto in order to lighten the burden of the people and to increase Government revenue in order to safeguard the interest of our country and the people. Sir, I support the motion by the Minister for Finance.

6.15 p.m.

Mr Lim Guan Hoo (Bukit Merah): (In Mandarin): Mr Speaker, Sir, the Minister for Finance has introduced a new Budget in this House. This can be said to be a product of the stormy season we have experienced. With the devaluation of Sterling and the withdrawal of the British Military Forces from Singapore, the fact that we are still able to produce such a Budget without any tax increases is really a meritorious achievement. As an economist, our Minister for Finance has not achieved this by magic. On the other hand, he has given us a clear picture of the economic position. The Supplementary Budget for this year has exceeded $10 million, but next year's surplus will be $30 million. If we have to have another Supplementary Estimate for $10 million, then we will lose some $700,000. I hope the Minister for Finance will not juggle too much in this budgeting business, as it appears to some people.

Sir, our aim in the economic field is mainly to resolve our unemployment problem. When we talk about the financial policy introduced by the Minister for Finance, we should measure its merits in relation to the unemployment problem. We know that in the past, our efforts in industrialisation have resulted in the provision of 5,000 new jobs every year. But every year in Singapore there are 25,000 school leavers who will be joining the labour market. So by comparison, the solution of the unemployment problem is still unresolved and we are under heavy pressure to resolve it. I hope the Minister for Finance can explain whether the continuation of our industrialisation policy for the next few years will create enough jobs to resolve the unemployment problem. If there is a saturation point in employment opportunities, then I hope there will be a clear-cut announcement on our policy in solving this.

Under the basic policy of industrialisation, we should try to diversify our economy in order to cope with the situation. From the Minister's Budget Statement, we can see that in 1957 the people engaged in agriculture and fisheries numbered 31,500 people. By 1959, the figure was reduced to 22,800. In the period of a few years, the number has decreased by 9,000. Every year there has been a decrease of 1,000. So this figure is one-fifth of the 5,000 jobs that we can create every year. This shows that our industries at the moment are not able to play the role that is expected of them, i.e., industrialisation replacing all other economic activities to provide enough employment. Industrialisation has been progressing but the activities of the fishing industry and agriculture have decreased in intensity. If this situation persists or even worsens, then there is much cause for anxiety about the future. We fear that certain events that have taken place in some developing countries may happen in our country. The unemployed in the rural areas will rush to the urban area. If such an event takes place in our country, then the achievement we have so far made in industrialisation may be minimised. Our industrialisation programme may, instead, provide opportunities for a change of occupation to some people who are looking for jobs. That is not the fundamental way of solving the problem.

Singapore is undergoing rapid changes during which some kinds of economic activities have experienced certain distractions in one way or another. When we develop housing estates and promote urban renewal projects, when we change the living environment of the people, we have not at the same time changed their economic livelihood and surroundings. For instance, when farmers in the rural areas were shifted from their farms, their economic livelihood was not changed. In other words, they were moved to a new environment as fish out of the water in such a situation. This is a problem we should look into.

From the Minister's statement, I notice that he wants to promote exports in foreign markets. But he has not enumerated with any certainty the new measures to be taken in the present situation of Sterling devaluation. Our currency has not been devalued. This may be a good sign and is encouraging. On the one hand, we encourage industrialisation and promote exports. On the other hand, we have been receiving more foreign investments, especially from Hong Kong. Much capital has been flowing into Singapore from Hong Kong. According to a British Under-Secretary of State, certain Commonwealth countries also intend to invest in Singapore and Malaysia. This can be said to be a great encouragement to our industrialisation programme, especially as it will be adding to our admirable atmosphere of production.

We should also pay attention to foreign markets. If we can have better organised export promotion offices abroad, then our locally-manufactured goods will have a better future. But there are no clear-cut proposals in the Minister's statement in this connection. Perhaps we can avail ourselves of this opportunity to ask him to try to explore the prospects of a common market when it is convenient for him to do so or whenever an opportunity comes to him. We can start with, say, a Singapore/Malaysia common market or a regional market. We know that our internal market is limited, and especially in this age of regional and common market agreements, it is very necessary that we should take measures to establish a common market. Of course, we must not expect to be disappointed like Britain in her desire to join the European Common Market.

I would like to mention, in particular, that from the statistics we have come across, we see that there are thousands of unemployed people. These statistics can be classified into two categories. One category is from the Sample Household Survey. The other category is derived from national registration. These statistics vary to a great extent. So the Minister, as an economic expert, has chosen one of the two to be the more reliable one to base his source of information. But personally I feel that these statistics are not entirely reliable because there are workers who, even when they are employed, report that they are unemployed. The number of unemployed persons registered at the Labour Exchange may not reflect the actual unemployment situation because certain people who are in receipt of public assistance want to claim that they are out of job. So they will be classified as unemployed. Pirate taxi drivers may also say that they are unemployed so that they will have room for manoeuvre in order to get a licence or a permit for their taxis. There are also numerous such cases. Some people like to disclaim that they are employed for various reasons. Others who want to get new jobs go to the Labour Exchange and say that they are unemployed. So the statistics that are available at the moment may not be completely reliable. We hope that the Minister will carry out a comprehensive survey so that we can be told with certainty the actual number of persons unemployed. We will then be able to ascertain that there are not so many people unemployed. But if the unemployment figure includes some people who are actually employed, it will give us a false and alarming picture. This may have a psychological effect on our people. I hope the Minister will look into this.

6.32 p.m.

Mr Ng Yeow Chong (Mountbatten): Mr Speaker, Sir, the Budget for 1968 has once again brought great relief to the people of Singapore as there will be no increase of taxes or new taxation. The Minister for Finance has been able to frame the Estimates of Expenditure for next year within the expected yield of the existing taxes. Compliments must be given to our Minister for Finance for such a realistic and well-balanced Budget for the coming year.

In his Budget Statement in Parliament on 5th December, the Minister for Finance dwelt at length on the economic growth of the Republic and compared the achievements this year with the achievements in 1966. He attributed this steady growth of economy to three main reasons, namely, the growth of trade with Indonesia, the increase of exports to South Vietnam, and the increased flow of Hong Kong investments into the Republic.

However, there will be a stumbling block to our sturdy growth of economy by the mid-seventies when Britain is expected to run down her military bases in Singapore. The new problems that will arise will be the retrenchment of about 32,000 people now working in these bases and the consequent reduction of local expenditure. Undoubtedly, these will adversely affect our economy. The people of Singapore, I am sure, are confident that our Government will be able to solve these problems.

Mr Speaker, Sir, this is already the sixth year since Singapore embarked on the industrialisation of our local economy. There has been generally good progress in our industrialisation programme. In 1966, there was a total of 165 pioneer firms of which 111 were in production. The total number of persons employed by these pioneer firms is 11,000 which can rise to 19,000 when these pioneer firms are in full production in two or three years' time. The annual census of manufactures gives the total number of persons engaged in the manufacturing industries for the year 1966 as 52,000. The difference of 41,000 is, therefore, the number of workers engaged in non-pioneer firms and established enterprises. This figure does not include, according to the Minister for Finance, the small backyard enterprises which account for a very substantial number of persons working in manufacturing industries. It is evidently clear that the non-pioneer firms as well as the established enterprises are still the main provider of employment in Singapore. The backyard enterprises or small industries must run into several thousands in our Republic.

These small industries, in fact, are the pioneers of all pioneers in our industries. Some of these small industries are well-established and of long standing. They are being neglected by the Government and very little assistance, whether financial or technical, is given to them. The Economic Development Board has in the past made no effort to encourage the small industries in Singapore to expand their establishments. It was not until 1964 that the Light Industries Services was set up within the Economic Development Board and efforts were then made in this respect. Even with the establishment of the Light Industries Services, these small industries are not deriving much benefit except in the form of technical advice. For instance, I know of a few small manufacturers who wish to apply for industrial sites or factories in the Kallang Basin Industrial Estate to meet their expansion needs; they are not given the sites. Instead, the factory sites are often given to the pioneer firms or foreign investors. The Minister for Finance confirmed this when he said in his Budget Statement that there was a crash programme to build more factories to meet the requirements of Hong Kong industrialists as all available factories have been taken up by them.

In 1960 or 1961, the Economic Development Board sent out sets of application forms to local manufacturers inviting them to submit their requirements for industrial sites and also to make known their expansion needs. I believe this was meant only to conduct a survey of potential local industries. As far as I know, nothing concrete has turned out from these applications. In fact, industrial sites are mostly offered to pioneer firms.

The point I wish to make is that the Minister for Finance should request the Economic Development Board to look into the needs of the local small industries and to assist them to expand and modernise their establishments. These small industries require as much attention from the Government as the pioneer firms.

Mr Speaker, Sir, the Minister for Finance has drawn our attention to the decline in activities relating to agriculture and fishing. In 1966, only 22,800 persons were engaged in these activities as against 40,200 in 1957. The reasons for the decline are the smaller scale of fishing and more land used for industrial and residential purposes.

As regards the development of the fishing industry, it is now gratifying to note that a Fisheries Training Centre is now being established to carry out research into the potentiality of marine production and modem technique in fishing. This will help considerably in deep-sea fishing. There have been many efforts in the past to develop deep-sea fishing but without success. Now that the Government has offered export incentives and training facilities, there is bright hope in future for deep-sea fishing to thrive. In fact, Singapore can be a good home-base for the fleets of fishing trawlers operating in the Indian and Pacific Oceans. There are also ample ice plants with cold storage facilities to store catches of tunas while awaiting transhipment to foreign countries. The tunas which are in abundant supply in these oceans are in popular demand in the U.S.A. and European countries. From deep-sea fishing, we can also develop marine-product canning and fishmeal industries. Mr Speaker, Sir, our kelongs and obsolete methods of fishing must give way to new and modern techniques in fishing. This again will provide employment for those who wish to engage in fishing activities.

Mr Speaker, Sir, while we are embarking on industrialisation, we should not neglect our crop-growing agriculture and horticulture. Today in advanced countries like Japan and Britain, every inch of land is fully utilised for crop-growing apart from its use for industrial and social development. In the Development Estimates for 1968, very little provision is made for agriculture and horticulture. Hitherto, the Primary Production Department has been concentrating on live-stock rearing known as animal husbandry and has neglected to encourage market gardening or crop-growing. Though Singapore has no agricultural base, we can still have substantial primary incomes from crop-growing. At present, the vegetable gardeners, fruit- and flower-growers must run into thousands of families in the rural areas.

Cannot the husbandry and method of cultivation of horticultural crop or non-plantation crop be improved by better techniques? The Primary Production Department or the Economic Development Board should seriously look into this and embark on a programme of improving the methods of packing and marketing of fruits and vegetables. I can quote two such crops which, once commercialised, can derive substantial income. One is tobacco which can be easily grown on small plots and subsequently cured and packed for sale. Another is the orchid industry which, if commercialised, can become a dollar-earning industry for export trade. Other examples like rambutans, chiku and durians, which are grown freely in our tropical climate, can also be commercialised and introduced overseas by highly technical methods and deep-freezing. Surely, these are sources of primary income which can be developed by commercialising and industrialising through modern techniques.

It is my fervent hope that the Minister for Finance will take steps to ask the Primary Production Department or the Economic Development Board to make a full study of developing agriculture, so that more primary products can be exported to bring in more income to enhance the standard of living of our farmers.

Mr Speaker, Sir, I support the financial policy of the Government for the year 1968.

6.40 p.m.

Mr Tang See Chim (Choa Chu Kang): Mr Speaker, Sir, I think the Budget presented by the Minister for Finance to this House on the 5th of this month can be characterised in the Minister's own words as ---

'a normal continuation Budget with no major innovations or changes both in the Ordinary Estimates and the Development Estimates'. That being so, there will be little to say on the Budget except to congratulate the Minister on his frank and detailed analysis of the economic situation facing Singapore in the years ahead.

This is the sombre situation created by the run-down of the British bases in Singapore. This grave economic situation is fully appreciated and squarely faced by the Government and plans are afoot to contain it if not to overcome it.

It is comforting to note that the present Finance Minister is the very person who, as the architect of our industrialisation programme, was the master-mind responsible for turning Jurong from a swamp into the modern industrial estate that it is today. The run-down of the British bases has presented us with three problems - one, the aggravation of our unemployment problem by the retrenchment of personnel at present employed at the British bases; two, the reduction of spending in Singapore leading to a possible decline in our gross national product; three, an increase in defence expenditure made necessary by the British military withdrawal.

The last problem, that is, our increased defence expenditure, is the least of all the three problems because it was anticipated when the defence plans of the Republic were first framed some two years ago; and we must once again congratulate the Finance Minister, who as the then Defence Minister was responsible for the framing of the defence plans, on this masterpiece of anticipation.

According to the Finance Minister, the total local expenditure of the British military forces amounted to no less than 14 per cent of our gross domestic expenditure in 1966, and the reduced spending would mean an accumulative reduction of some two per cent of our gross domestic expenditure in each year. However, this does not present an insurmountable problem if we remember that our gross national product grows at the rate of some six per cent per annum. It would, therefore, only mean that our gross national product will not increase at the rate that it was wont to do. Rather, it will be at a slower rate provided, of course, that the reduction in spending is not too sudden that it could not be absorbed by the growth of our gross national product.

By far the gravest problem that confronts us is the aggravation of the unemployment problem caused by the British military withdrawal. The Finance Minister has spent considerable time in his Budget speech on this problem. It is an enormous problem and I need only pose it in another way.

If the present figures of unemployment were to be maintained and not increased, at least 30,000 jobs must be created each year. If the figures were to be reduced to 3 per cent of the working population by 1971 - and the figure of 3 per cent, Mr Speaker, Sir, is considered by economists to be the best figure at which to keep unemployment - some 40,000 jobs a year will have to be created. A realistic plan has been proposed by the Finance Minister to solve this problem, and details have been given to this House. The magnitude of this problem was clearly and frankly stated. Perhaps we could only hope to contain it. And if that is to be done at all, Mr Speaker, Sir, I am sure our Government will be able to do it.

Let me now touch on three matters which arose during last year's Budget debate, but about which the Government appears to have taken no action. These are (1) export insurance, (2) rent control, and (3) unemployment insurance. During last year's debate on the Budget, I echoed a very good suggestion from the hon. Member for Punggol, who first proposed the creation of an export-credit guarantee agency. I would once again urge the Minister to give serious consideration to this suggestion. In this year's Budget speech, the Minister for Finance referred to the creation of, I quote [col. 459]:

'an international trading agency of some kind which will relieve the manufacturers in Singapore of many of the problems connected with the export of their products to overseas markets.' The Finance Minister went on to say that this problem was receiving very close attention in his Ministry but that he would say:

'no more than that the implementation of this policy may well result in far-reaching arrangements in the structure and pattern of our international trade today.'

I am not too sure that this international trading agency will embrace the export-credit guarantee agency. I spoke about it last year, but as the Finance Minister has been deliberately vague in this matter, I can only hope that he will take account of what I say here and seriously consider the establishment of some sort of an export insurance scheme which, in my opinion, would be of great help in our search for export markets.

In last year's Budget debate, Mr Speaker, Sir, I have also suggested that the Government should take a look at the present legislation regarding rent control. It is my opinion that the present legislation on rent control is impeding the development of building and construction, especially of commercial buildings. In his reply, the then Minister for Finance said that the Government would look into the matter. May I quote from Hansard that part of the Minister's reply on this subject? This is Hansard, Volume 25, No. 9, column 673, and I quote:

'...we are thinking along the lines of setting up a tribunal in order to be able to settle compensation payable for removal for development purposes.'

I would like to know from the Finance Minister whether this matter has now got past the thinking stage.

On the question of unemployment insurance, Mr Speaker, Sir, this matter was first raised in last year's Budget debate by the hon. Member for Telok Blangah. In his reply, the then Finance Minister said, and I quote once again -this is the same issue of Hansard, col. 674:

'The Member for Serangoon - is it Serangoon? - Telok Blangah, yes. Mr Speaker, he proposed that we should look after the unemployed by bringing in a national unemployment insurance scheme. I can assure him that we are trying to get an actuary to work out unemployment insurance for this country, and so far we have not been successful. But I hope during the course of next year to be able to put up a scheme for consideration by the Cabinet and by this House.'

Perhaps the Minister for Finance can tell us when such a scheme can be established. Such a scheme is important. The Finance Minister realised the grave social implications of a man who has a family to support being out of work, when he said (and I quote again - this is in the present Budget speech at col. 450):

'While we can expect teenagers to spend another year or two living with their families without experiencing undue hardship, the older ones who have lost their jobs and are trying to get another create both an economic and a social problem of some importance.'

It may well be asked: where will the money come from? The Finance Minister, of course, is the best person to answer this question. Perhaps it could be by voluntary contributions from the workers. Instead of paying 5 per cent of the salary to the C.P.F., perhaps a worker may be persuaded to increase his contribution to 10 per cent. Or perhaps the money could be raised from additional taxation, for example, on hard liquor. I am sure nobody would complain about additional taxation on liquor.

In the Budget speech of last year, the then Finance Minister promised to bring in legislation to control finance companies. It has taken one full year for this to materialise, and the Finance Companies Bill is now before the House for consideration on the 21st of this month. I do not wish to say anything on it at this moment. But I had assumed that the control of finance companies would also mean the introduction of legislation regulating hire purchase transactions which are, in fact, part of the business of finance companies. Unfortunately this has not been done and we are still left with the existing law on hire purchase. As you are well aware, Mr Speaker, Sir, the existing law is complicated and uncertain, and I think it is high time the Government brought in legislation to regulate hire purchase which affects the lives of so many of our citizens.

Coming back to the Estimates for next year, Mr Speaker, Sir, I am glad to note that out of a total of $646.4 million Ordinary Expenditure, about 45 per cent will be spent on social services. These are for Education, Health, and such like services. This is as it should be. A socialist government like the P.A.P., pledged to create a more just and more equal society, must spend more of the expenditure on social services. As a socialist, I would, of course, like to see more money being spent in social development, but we must be realistic and take account of the grave economic situation facing us. I for one, Mr Speaker, Sir, am thankful for the $39 million to be spent on the development of social services in the coming year.

6.54 p.m.

Mr Lim Cheng Lock (River Valley): Mr Speaker, Sir, the Finance Minister, in presenting the financial policy of the Government to this House, could be regarded as presenting the election manifesto to the people of Singapore. Compared to the financial position of the State in 1959 before the Finance Minister first presented the financial policy for 1960, which was then in a most unhealthy position - one would say a gloomy position where certain economic measures had to be taken which were quite painful to some people - the position now looks not only very healthy and encouraging, but we have as at 1st January, 1967, assets totalling over $628 million, which is twice as much as what we had in 1959.

[Mr Tang See Chim in the Chair]

6.56 p.m.

Mr Lim Cheng Lock (River Valley): In addition to this, I need not mention the assets of the other statutory boards - the Singapore Housing and Development Board, the Singapore Telephone Board, the Singapore Harbour Board.

The Finance Minister has given a very clear picture of our future in presenting the Budget for 1968, the problem of unemployment, the necessity to create jobs, firstly, because of our young population that is going into the employment market, and, secondly, as a result of the run-down of the British Bases and the reduced spending arising out of this. It is encouraging to note that the Finance Minister has recognised the tourist industry as an alternative measure to offset the effects of the rundown of the British Bases. The tourist industry - or to be able to understand the tourist industry, I think it is important to know that "tourists" are normally associated with American tourists, and American tourists plan their tours at least a year ahead. One of the basic facilities which will encourage tourism is adequate first-class hotel accommodation. In this respect, although the Minister has sounded an optimistic note in his Budget Statement of five new hotels coming up which will give an additional 566 rooms, another 16 new hotels giving another 2,089 rooms, with another nine more under consideration having 1,240 rooms, I would say these are inadequate to meet the needs if we are to stimulate tourism. With the exception of a few of these 21 projects, they cannot be considered as first-class luxury hotels. What we need in Singapore are hotels with the capacity of between 500 and 1,000 rooms, and this would involve large capital investment, and no one would invest in these large concerns unless more attractive incentives are considered by the Government. This is proved by the fact that the "Golden Mile" projects have not brought in any firm investors. As I understand the approach to these projects would have to be by Beach Road, as it cannot possibly be through Nicoll Highway because of the vast amount of traffic there, and as the Planning Department cannot give an assurance that the old houses along Beach Road would give way, I think most of the investors are not so keen in bidding for these projects. I would request the Minister for Finance to consider again the question of incentives for first-class luxury hotels as this would not only be needed by tourists but there is a need in Singapore whenever large conventions are held.

The Minister for Finance has also quite rightly mentioned the manufacturing industry which is labour intensive. In this respect, I would also like to ask him not to forget the establishment of engineering servicing which is very labour intensive. We have the Keppel Dockyard and the Jurong shipyard. There is a proposal about the Naval Base Dockyard when it reverts back to the Singapore Government. I would also ask the Minister if he could seriously look into the possibility of an aircraft engineering maintenance service which is very successful in Hong Kong and which we can establish very successfully in Singapore too. At the present moment, maintenance of aircraft servicing is being done by foreign airlines and is earning them very good revenue. This is paid to their Head Offices, on which I believe no income tax is derived by the Singapore Government. When the British withdraw from Seletar, I think it would be ideal to look into the possibility of such services.

[Mr Speaker in the Chair]

7.08 p.m.

Mr Lim Cheng Lock (River Valley): Mr Speaker, Sir, there is a constant need of increasing the revenue of our State for social and development purposes. Either we raise taxes or we increase our economic growth. To raise taxes would be painful, but the better form of raising our revenue would be through economic growth. One point which I would like to point out to the Minister for Finance is that there are still large numbers of people occupying State land for which they pay very uneconomic rent. The occupiers commercialise on the occupation of this land and make easy money for themselves. Since revenue is needed by the Government, I suggest that the Ministry should consider reverting this land back to the State for more economic purposes. This will be a means of raising further revenue for our State. With this note, I support the financial policy which has been presented to this House.

7.12 p.m.

The Minister for Finance (Dr Goh Keng Swee): Sir, from all accounts of what hon. Members in this House have been saying and from what the newspapers have been writing, this has been a popular budget. Under the shower of congratulations which it has been my embarrassment to receive, I would have liked to think that the pleasure over my performance was the result of a logical and penetrating analysis of our problems and the clear-cut recommendations for their solutions, but I suspect that that is not the real reason. The real reason why people are happy is that there has been no increase in taxes. In a long career as Finance Minister, I have come to the conclusion that (a) people do not like to pay taxes, and (b) they dislike paying increased taxes even more. Sir, while this attitude is understandable and, in fact, one can sympathise with it on occasions in a non-professional capacity, I must confess that this kind of thinking is illogical. I do not pretend that I can convince all hon. Members or convert them to my point of view. But I will do my best. People do not mind spending more money on motor-cycles, scooters or cars or presents for their girl friends, this, that or the other. They do not mind this because they get something in return. And yet they object to paying more taxes. When they pay more taxes, they are merely spending more. It is a collective expenditure on services that are provided by the Government - more education, more health services, more defence measures, more post offices, this, that and the other. While it may be true that the best things in life are free, in the practical affairs of men they have to be paid for. And when people pay more taxes, it does not mean that the taxes go into my pocket or the pockets of my colleagues. They are spent on providing more and better services to the public. So this aversion to paying more taxes, one hopes, will gradually diminish as rationality in human thinking increases.

Now, Sir, to the points raised by hon. Members. First, I think I have to clarify the statement which I made in my Budget Speech. The result of great effort in promoting industry in Singapore has been 5,000 additional new jobs. That is what I have said in my Budget Speech. This, of course, depressed many hon. Members. The Members for Bukit Merah, Thomson, Sembawang and Punggol, in particular, said that only 5,000 additional jobs is not good enough. It would not help us. Where are we going? Now, what I should have said is this. Members should bear in mind that these are 5,000 new jobs only in the modern sector of industry, the bigger firms. There are more jobs generated in the smaller sector of industry which has to support the operations of the bigger firms. And, of course, there are jobs generated in the service industries, in buses, in consumer goods and retail shops, in cinemas and so on, where these 5,000 people spend their money. So, in fact, when you get 5,000 new jobs in the larger industries, you might end: up with a total of 15,000 jobs perhaps when all the repercussions of their expenditure are worked out.

Because so many Members were depressed with the prospects of creating more jobs in industry, they thought that agriculture might provide the solution. This is the point of view taken by the Members for Changi, Sembawang, Thomson, Bukit Merah and Anson. I find it is rather odd because the whole history of the last ten years has shown that agriculture, far from increasing, had been the diminishing sector of the economy. In the last ten years there has been a reduction of something like 10,000 workers in agriculture. So I am afraid I find it difficult to be convinced that there is a great future in agriculture so far as the creation of new jobs is concerned.

I would agree with the Member for Mountbatten that there are good prospects in deep-sea fishing. In fact, in the last few years there has been quite a considerable expansion in the fishing fleet of Singapore.

As regards horticulture, i.e., the planting of fruit trees, I think that occupies a lot of space. I do not know whether it is economic to justify it. The growing of orchids, of course, is a very good industry to expand.

Many people have touched on tourism. Unfortunately, there seems to be some misunderstanding on this subject. The Member for Changi, for instance, said that building hotels does not attract tourists. That is absolutely true. The mere fact that you build hotels does not mean that people will go there and occupy them. In fact, in Singapore what has happened is that it is because so many tourists are coming here that hotels are being built. So the idea is not merely to create jobs. People do not put $5 million into a new hotel just to give jobs to unemployed people. They put up that amount of money to make big profits, and profits will be forthcoming only if the tourists turn up. And for various reasons, tourists have been coming to Singapore in increasing numbers. No one really knows why they come here. The Tourist Promotion Board has given no convincing reasons. If I am asked why are tourists coming here, I would say it is for the same reason that some people climb Mount Everest - because it is there. I cannot think of any better reasons. But let us not look a gift horse in the mouth, as the saying goes. Let us give the tourists a jolly good time and hope that they will come in increasing numbers.

The Member for River Valley had the wrong notion on this subject. He said that we did not get good tenders for the "Golden Mile" projects because people were not sure where the coastline would be along Beach Road. As my colleague, the Minister for Law and National Development, had explained to this House, the reason why there were no good bids for the "Golden Mile" projects was that they are very large investments. People did not have the time to form consortiums to bid. In other words, there just was not enough money for that. And my colleague is taking action to form or encourage the formation of consortiums.

Two Members have drawn attention to a very vital part of our future effort if we are to meet the challenges ahead, and that is the need for thrift and the need to mobilise domestic savings. This was the point made by the Members for Sembawang and Delta. I will underline what they say. I have taken note of the suggestion by the Member for Delta that we should find some means of absorbing the savings of the small man and channel them into useful and productive lines. I think it will be possible to do this.

The Member for Choa Chu Kang has made a number of points. He has referred to past statements made by me and my predecessor about considering certain measures. He wants to know what is being done. He has mentioned four items, namely, export insurance, rent control, unemployment insurance, and hire purchase legislation in relation to the control of finance companies. May I deal with these subjects in turn as they are of some importance? Export insurance was brought up by an hon. Member in this House. I cannot recollect who.

An hon. Member: The Member for Telok Blangah.

Dr Goh Keng Swee: Yes, the Member for Telok Blangah. No one, of course, has given any undertaking that we will introduce legislation for export insurance. There has been thinking and some research on this subject in the Ministry. We have studied what other countries are doing and we probably will continue to study for some time. I am not sure that we can take the scheme as it is being worked out in England or in Germany or in Holland and apply it here. The reason is that I want a fairly safe system whereby the Singapore exporter and the importer, who is somewhere else in a country which I will not name, will not come to some collusion to rook the Government. If that kind of difficulty can be got over, then maybe there is something in this.

Now on rent control, the Member for Choa Chu Kang asks. "Have we passed the thinking stage?" So far as I am concerned, the answer is I have not even reached the thinking stage. Nevertheless, I promise to apply my mind to this subject, but I give no assurance whatsoever that any action will be taken on this so that the Member may not be able to quote me at the next Budget session.

Hire purchase and finance companies. The Member for Choa Chu Kang wants legislation to regulate hire purchase. I really wonder, Mr Speaker, Sir, whether this deserves any priority. There is a lot of work to be done. II a consumer is thriftless and wants to buy a car or a refrigerator or a motorbike on iniquitous terms, why should we help such people.

An hon. Member: That is robbing!

Dr Goh Keng Swee: As the Latin tag says, "caveat emptor". Why should people not develop more self-reliance? Why should they not make these calculations themselves? I make this point because in my previous stint as Finance Minister I did have this subject studied, and a draft on control of hire purchase was sent to me. But it was such an enormous document that I never went beyond the first page. So in view of what I have said, quite frankly, I do not think this deserves priority. Although, mind you, if public opinion is so strongly of the contrary view, then I am prepared to change my mind.

As regards unemployment insurance, I am afraid this has really come on the rocks. The Member asks, "What has been done?" Actually we have not allowed the grass to grow under our feet, and there is in the Labour Ministry today an expert from the International Labour Office. But I must ask Members to consider that in the next few years many thousands of people would be thrown out of job from the military bases and, quite frankly, this kind of unemployment is going to wreck any insurance scheme. My view is that conditions have changed and it may well be that we may have to wait quite some time before the normal situation arises which will enable us to proceed with unemployment insurance.

Now, a number of minor points and I am through. The Member for Farrer Park has asked what will happen if the war in Vietnam comes to an end. I, for one, will cheer very hard and, quite frankly, I do not think any great calamity will befall our economy for the reasons which I have explained in my Budget Speech, namely, that of the $300 million worth of exports to Vietnam, 80 per cent of them consist of petroleum and petroleum products. I can assure the Member that the refineries, if they cannot sell their products to the U.S. Forces in Vietnam, can sell them elsewhere. So to the Member for Farrer Park, I say do not fear. All will be well. He need not have any guilty conscience about our making money out of other people's miseries and misfortunes.

Some Members have come forward with suggestions of how we can get round our economic problems. I do not want to appear ungenerous or ungrateful, but I must say that some of these proposals are just non-starters. I regard them as quite illusory. For instance, a common market was proposed. Who does not want a common market? But are you going to get it? This is a pie in the sky. So let us keep our feet on the ground and not bank on very speculative propositions.

Then some Members said that we should help everybody - the hawkers, taxi-drivers, small shop-keepers, the unemployed, and so on. Of course, we should try to help everybody. This is the most proper attitude to take. But does it mean that the Government must dish out money just because somebody is in trouble? I do not think so, because if we were to engage in this kind of activity, I assure you that the Budget would not be balanced and we would have to get taxes from somebody to pay these people. So I do urge these hon. Members - mind you, I grant that their hearts are in the right places and that they are very dedicated and genuine socialists - that this is not the way to get our economy on the move. The objective is not to get money from somebody and give it to others. This is charity. The real objective is to create new wealth so that everybody will have more of it and useful work to do into the bargain.

Finally, on the proposal to grow seaweeds. I do not know; I am not an expert on growing seaweeds or growing anything for that matter. But I think as a pie in the sky, this really takes the cake!

Question put, and agreed to.

Resolved,

That Parliament approves the financial policy of the Government for the year 1968.