CONTROL OF MANUFACTURE (AMENDMENT) BILL

Order for Second Reading read.

3.26 p.m.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Control of Manufacture Ordinance was enacted in February 1959. The main objective underlying the Ordinance was to control the establishment of certain manufacturing industries which were considered essential operations, and it was necessary then to limit them because of the limited domestic markets and of other economic factors. Until 1967, this Ordinance was not much used. Since then, industrialisation has gained momentum and it is necessary now to implement this Ordinance more stringently. However, many aspects of the Ordinance are ineffective. The proposed amendment, therefore, aims at tightening the legislation. To this end, the Ordinance may be used as an important instrument in controlling and channelling investments into industries which are economically beneficial to Singapore.

There is a provision under section 5 (2) (a) and (b) of the Ordinance which provides for automatic registration of companies which have been in production or have bona fide made substantial preparations prior to the gazetting of a particular product under the Schedule to the Ordinance. It is necessary to impose some pressure on such companies which might otherwise be lax in applying for registration. To this end, the amendment to this section provides the condition that registration should be effective within six months of such specification of goods published in the Gazette. Thereafter, all applications shall be treated afresh. Those who fail to apply for registration within the six months' period shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000, and to a fine not exceeding $1,000 for every day during which the offence continues.

Subsections (3), (4) and (5) of section 5 should be deleted, as there is no reason why the Registrar should not undertake further application within a certain period.

Regarding the revocation of certificates referred to in section 6 of the Ordinance, the amendment empowers the Registrar to revoke the certificate where it has been proved that a registered manufacturer has ceased production for a continuous period of three months. To complement this particular action, the Registrar may also determine the minimum quantity of goods to be produced by a registered manufacturer. This additional power is provided for in the additional subsection (5). The amendment, in effect, incorporates a more specific and wider scope in the conditions for revocation of the certificate.

As a measure for implementing the Ordinance more effectively, the amendment to section 8 of the Ordinance has been introduced so as to increase the penalty for offences committed under the provisions of the Ordinance. For those who have failed to register in respect of a particular item of goods, the fine has been increased from $10,000 to $50,000. The penalty for those who have failed to comply with any condition for registration has been increased from $5,000 to $10,000; and for manufacturers who have contrived to give false information to render the Ordinance ineffective, the fine for such an offence has been increased from $500 to $1,000. In this connection, an additional subsection (5) has been added which allows the Registrar to compound offences under the Ordinance, instead of imposing fines by the court upon conviction.

As the main purpose of the Ordinance aims at protecting the interests of some of the manufacturers who are required to register under the Ordinance, some form of an annual fee should be imposed. To this end a new section 11 (1) and (2) has been added to the Ordinance, which empowers the Minister to impose an annual duty according to a schedule drawn up on the basis of fixed capital investment. This is defined as the actual expenditure incurred by the enterprise on its factory in Singapore and on any plant or machinery used in Singapore in connection with the manufacture of the registered product. In cases where the industries enjoy protection and, to some extent, virtual monopolistic positions in the domestic market, the Minister may impose different rates of duties for different categories of goods.

Section 13 of the Ordinance is repealed and re-enacted whereby the Minister may exempt any person from the provisions of this Ordinance, and he may also impose a restriction on the quantity of goods to be manufactured by a registered manufacturer where he considers it is in the public interest to do so.

Sir, I beg to move.

Question proposed.

Mr Hwang Soo Jin: Sir, can the Minister enlighten the House on why it is necessary for him to be empowered to impose a restriction on the quantity of goods to be manufactured?

Mr Speaker: Dr Goh, would you like to answer that question?

Dr Goh Keng Swee: Sir, I will be happy to answer this at the end of the debate. I do not know whether there are any other Members who would like to speak on this Bill.

There being no other Member wishing to speak-

Dr Goh Keng Swee: Sir, there may be instances where it would be in the public interest to allow not one monopoly but possibly a small number of producers to produce for the Singapore market. Under such circumstances, two options are open to the Government. The first is to allow a free-for-all, and let them compete. The end result could be either all survive at some level of profitability or other, or one will knock out the others and establish a monopoly. In order to avoid this kind of a situation, it may be necessary to require that at least in the initial stages each of the licensed manufacturers will produce a certain amount, and no more than that amount for the domestic market. This is to enable all the participating manufacturers to establish a foothold in the enterprise and to ensure that in the long run they are more viable. It is not possible to say on a priori grounds which is the better policy. It all depends on the circumstances, the type of products, the technical factors, the finance available, and a lot of other things.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Dr Goh Keng Swee].

Bill considered in Committee.

[Mr Speaker in the Chair]

3.35 p.m.

Clause 1 -

The Chairman: There is a note,

In page 1, line 4, to leave out "1969" and insert "1970".

That will be done.

Clause 1 ordered to stand part of the Bill.

Clauses 2 to 7 inclusive ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.