ANNUAL BUDGET STATEMENT

Order read for resumption of debate on Question [9th March, 1970], "That Parliament approves the financial policy of the Government for the financial year 1st April, 1970 to 31st March, 1971.".- [Minister for Finance].

Question again proposed.

2.33 p.m.

Mr Sia Khoon Seong (Moulmein): Mr Speaker, Sir, let me offer my heartiest congratulations to the Minister for Finance on his very illuminating Budget statement. He has set out succinctly the course of economic development in Singapore during the last decade. What impresses me most, and perhaps every Singaporean, in his presentation of the 50-page Budget statement is not just that it is a well-prepared statement with a great deal of scholarly thought behind it, but that it exudes a quiet note of confidence for the future against the background story of the economic development and success story of Singapore in the face of great adversity and against overwhelming odds. A great tribute must be paid to the Finance Minister who has been personally responsible for Singapore's economic development and planning during the greater part of the past decade.

The lesson that we are to draw from Singapore's economic progress in the last decade is that, despite our lack of natural resources and the presence of adverse factors, we can not only survive but also make significant improvements in our economic, social and political fields if we Singaporeans are prepared to sweat and toil for it. This lesson should undoubtedly give us added confidence and determination to work harder if we are to win for ourselves greater prosperity and greater progress in the coming decade.

The important thing that we must bear in mind is the timely warning given by the Minister for Finance that we must not be complacent if we are not to fritter away all that we have achieved in the last decade, and if we are successfully to meet the challenge that we have to face at the end of 1971 when the British completely withdraw their forces from Singapore, thereby aggravating both our security and economic problems.

While the acceleration and expansion of industrialisation programmes as planned and carried out by the Economic Development Board up to date have helped to increase the number of persons employed in the manufacturing industries to 87,128, and while we are confident that the full economic impact of the complete British pull-out at the end of 1971 can be cushioned through further expansion of the industrialisation programmes, it is envisaged that this will give rise to attendant problems, the chief of which is likely to be a shortage of engineers, management and technical personnel. This problem is further aggravated by such personnel being required to do national service.

The Government has proposed, as a way of minimising the problem of shortage of such personnel, to relax our immigration and work permit restrictions on the in-flow of such personnel. The Government, after weighing the pros and cons, considers it advantageous to liberalise the conditions under which such people can qualify for permanent residence in Singapore and eventually citizenship.

While such a proposal appears to be logically necessary as a solution to the problem of our envisaged shortage of trained personnel with technical and management skills, and while in principle it has my support, I must, however, ask the Government to exercise great caution in its implementation as it may result in the creation of other and greater problems. My fear is that the persons who may avail themselves of the relaxed conditions for entry into Singapore and swarm into our factories and industrial enterprises may not necessarily be of the best calibre.

The shortage of men with skills in management and technical fields is a problem all over the world, particularly with the developing countries. With such demand for the services of trained technical personnel, Singapore's offer of permanent residence and citizenship in addition to a wide range of incentives in terms of money or otherwise may not necessarily attract the best type of workers who may prefer to emigrate to other countries, more developed and prosperous than Singapore. The point I wish to make is that, supposing we have managed to attract only third-rate personnel with management and technical skills, we may be creating a situation which will have an adverse effect on, and ramifications in relation to, the long-term objectives of our industrialisation programmes. The end result is that our production cost and quality control may be seriously affected. It is a matter of time before the need of technical and management personnel can be met locally. When that time comes, the import of management and technical personnel from abroad may cause a demoralizing effect on local management and technical personnel who will thereby be deprived of promotion avenues to that extent.

Moreover, the incentives given to expatriate personnel besides permanent residence and eventual citizenship will serve to increase their take-home pay. Situations may arise where citizen and expatriate personnel working side by side on the same job and possessing the same qualifications enjoy two entirely different terms and conditions of service. It will not be surprising if a feeling of unhappiness results from such disparities in pay and working conditions. It is, therefore not likely to be conducive to a congenial atmosphere in the place of work, and to assist our efforts to educate and train our own local personnel to man our industries and industrial enterprises. It may well be, to quote the extreme case, that our citizens with managerial and technical skills may find it more attractive and lucrative to migrate to other lands where they are likely to find greater job satisfaction for the skills that they possess. If this happens, it would indeed be a paradox to our detriment. This feeling of unhappiness is all the more acute in cases where expatriate personnel are placed in positions above our citizen personnel who subsequently obtain equivalent, if not higher qualifications.

A case in point is the situation today in Malaysia-Singapore Airlines. The expatriate management of M.S.A. gives the impression that it has adopted a policy of recruiting white expatriates irrespective of the availability of local personnel with similar or better qualifications. The Singapore Air Transport Workers' Union has over the years battled strenuously for a concrete plan for nationalisation and a training programme for suitably qualified national staff to be groomed to replace expatriates. But with the recent changes in the structure of the management, more expatriates are being brought in. And now under the so-called scientific expatriate management of M.S.A., all kinds of dubiously qualified expatriates have been recruited; existing expatriates who have been scheduled to leave are promoted over the more qualified national staff. Experienced national staff are switched around to their disadvantage under the guise of reorganisation in order to pave the way for establishing expatriate footholds. All these nefarious activities have lowered the morale of the M.S.A. staff and have created deep-seated frustration and disillusionment among the national staff who feel that qualifications and efficiency are not the prerequisites for promotion. This attitude could have far-reaching effects on the national staff if steps are to remedy this situation.

The Finance Minister, in his speech, paid tribute to the National Trades Union Congress by stating that its success in promoting labour responsibility was one of the important factors creating a favourable general investment climate. It is gratifying for the N.T.U.C. leadership to note that its realistic and responsible stand in promoting labour responsibility has been appreciated by the Government. The leadership of the N.T.U.C. has always maintained that the labour movement can play a responsible role as a coequal sector in the tripartite partnership of Labour, Government and Management in the social and economic development of Singapore.

Since the introduction of the Employment Act on 15th August, 1968, the N.T.U.C. has no reason to doubt the bona fide intentions of Government in giving vent to the underlying objectives of the Employment Act. While the N.T.U.C. may say the same of the many enlightened employers who have co-operated wholeheartedly and sincerely not only in refusing to take advantage of some of the provisions of the Act, but also in observing the spirit of the Act, the N.T.U.C., unfortunately, cannot say the same of a few employers who have taken advantage of the anomalous provisions of the Act to the serious detriment of their workers. The N.T.U.C. will soon be making representations to the Government to rectify the anomalous provisions of the Employment Act so that the Act will not lend itself to abusive practices by a few unreasonable employers who may be tempted to treat the Employment Act as a licence to exploit labour.

Hon. Members will recall that, together with the passing of the Employment Act, the Central Provident Fund Ordinance was also amended to increase C.P.F. contributions from five per cent to ten per cent in gradual stages. This was to be part and parcel of a package deal, so to speak, with Labour - that is, higher C.P.F. contributions for better work discipline and efficiency. Workers are to be given greater C.P.F. savings which, in a very significant way, will go a long way towards giving them a sense of security after their retirement from employment. While the vast majority of workers benefit from the increase in C.P.F. contributions, there are also, sad to say, some workers who happen to work under less reasonable employers and who do not benefit from the increase of C.P.F. contributions. These are the unionised workers in the private sector who are enjoying not less than 10 per cent retirement benefits under the collective agreements. One obtained the impression that the primary objective of the amendment to the C.P.F. Ordinance was to increase the C.P.F. savings of individual workers so that when they retire, they will be able to find a bigger amount of money to provide for their old age after retirement. But, sad to say, this may not be the case in many situations. Many employees, with the concurrence of the Arbitration Court, have the increased C.P.F. contributions offset against their normal gratuity payments. In effect, on retirement, a worker gets, on the one hand, increased C.P.F. savings, but on the other hand, he loses the greater portion if not the whole of his gratuity payments, equivalent to his increased C.P.F. contributions. The net result is that he does not benefit from the increase in C.P.F. contributions, at least not to the extent that one thinks that he should get as the result of the amendment to the C.P.F. Ordinance to increase the C.P.F. contributions from five per cent to ten per cent, in conjunction with the amendments to the Employment Act. Members will surely understand if there is some feeling of frustration over this matter among some workers. I hope that the Government and the N.T.U.C. together with Management, will be able to iron out the anomalies arising out of the operation of the Employment Act.

The decision of Labour to accept the underlying principles and objectives of the recent Employment Act has begun to pay dividends. What we all must not forget is the sound advice of the Finance Minister in his Budget statement that the more difficult period will come at the end of 1971, with the completion of the British military withdrawal. We must, therefore, not be complacent and over-confident. We have overcome the difficult 1960s, and we shall overcome the challenge of the I 970s provided that Labour, Government and Management can continue to work as co-equals in a tripartite partnership striving for national, social and economic progress.

It is for the reason that Labour must play a responsible role as a co-equal partner with Government and Management that the Singapore trade union movement has made its momentous decision to modernize itself so as to be a co-equal partner with the Government and Management in the very sense of the word.

2.48 p.m.

Mr Low Yong Nguan (Crawford): Mr Speaker, Sir, very few people in Singapore can remain unimpressed by the narration of our economic success in the last ten years by the Minister for Finance in his Budget statement. I am no exception, Sir.

One of the most important factors contributing towards our great leap forward can be found in the quality of our political leadership. As such I intend to dwell on this subject a little.

In 1959 when the P.A.P. first took office, our Prime Minister did have "grave reservations". His reservations were not unfounded. The politicians that held power prior to 1959 were inept, corrupt and made a sham of parliamentary democracy. They did not have the foresight to lead Singapore to independence. The P.A.P. itself was finding difficulties with the adventurous opportunists and treacherous Communists within the party. Furthermore, the Government was confronted with a fierce display of anger and disappointment by a large section of the people in the earlier regime on the one hand, and the apathetic and disenchanted orientation of many average Singaporeans on the other. Thus the P.A.P. government was faced with the gigantic task of reshaping a colonial society for independence, and to set Singapore on the road to development and modernization by restoring the faith of the people in the principles of parliamentary democracy. This was by no means an easy task. It calls for strong character, determination and unselfish dedication on the part of the political leadership, plus an unyielding faith in the validity and workability of parliamentary democracy itself. It was the good fortune of the people of Singapore that they do have such a leadership. Patiently, the foundation was laid, as reported by the Finance Minister, in spite of political pre-occupation, to prepare the way for economic progress and to provide the average citizen with a happier life.

Despite situations of tension and crises, the democratic socialists, through the P.A.P., have proved that through persuasion, convincing and working within the framework of parliamentary democracy and not through terror and ruthlessness, as the Communists would want it, they too can achieve progress.

I think there was one other factor that contributed towards consolidation of the people's faith in the democratic socialists, and thereby helped them to make progress in the country. The Communists front-men, through their own folly, had convinced the people that they were more interested in political gains for the Communist cause than in the general welfare of the people and the country as a whole.

Sir, I have gone to great lengths on this subject because it brings home a crucial point. I am convinced that ultimately our economic well-being, political stability and national security will depend to a very large extent on whether or not we have developed in our younger generation an unyielding faith in the principles of parliamentary democracy. And this is determined to a large extent by the quality of the political leadership we provide and can continue to provide. In this connection, Sir, I think we cannot, and should not, hope to ignore the possible doubts that our people might have in the question of succession to the highly successful political leadership that they have been accustomed to for the last ten years. Those entering and those who wish to remain in the political arena must pledge to uphold this tradition of dedication, sincerity, determination, honesty and basically the principle of parliamentary democracy.

Sir, the fear that our achievements can be destroyed by a political leadership of inferior quality is not unfounded and we must be vigilant at all times.

Another great transformation the Government has brought about in the last decade has been in the bureaucracy. Members will recall the uneasy relationship the Government had with the civil servants when it first assumed office in 1959. It was evident in those days that the bureaucracy was not geared to the changes that were taking place. The bureaucratic system had to be streamlined, and new talents brought into prominence. Patient search had to be made to bring in the brighter sector of the population to assist in the administration. The Government realised that with more and more institutions set up for economic expansion and social services, greater exercise of initiative had to be given to the civil servant. I have observed also that the Government has deliberately exposed its bureaucrats to the intricacies of the commercial world. In many of our statutory boards and public owned commercial agencies, civil servants are made to work hand in hand with businessmen. The obvious advantage to be gained in such a set-up is that the bureaucracy will have a better understanding of our highly commercialised society and they will invariably learn a trick or two from their more seasoned commercial counterparts. But I must raise here the fear of possible erosion of the integrity of an incorruptible bureaucracy which is essential to the successful operation of a democratic system. It will be time for regrets if we should find our public servants succumbing to the temptation of material gains when they are so exposed. It might be worth while to take note that Singaporeans will find it really hard to forgive such mistakes if they do occur.

With the recruitment of new talents into its fold, the bureaucracy has invariably strengthened itself. I do not wish to be a prophet of doom, but I do see signs of gradual erosion of the power of the politician by the bureaucrat. Having been in power for more than a decade and seen things getting more and more institutionalised, Government leaders may tend to take such erosion with extreme kindness. But, Sir, being a firm believer in democracy, it is hard of me to allow the creation of a formidable or even near supreme bureaucracy. A closer check must be made before any great damage is done.

Sir, please do not allow what I have just said to carry to the House the impression that I have ruled out the contribution of the public service to our progress in the last decade. Indeed, Sir, I have made it the second point in my speech to pay tribute to these people and to express my deep appreciation of the grand work of the civil servants as a whole. It is to the credit and satisfaction of many that we should have such a generally honest, hard-working and efficient civil service. My point is that the Government should not in its preoccupation with problems create out of this civil service a Frankenstein to the disappointment of many, like myself.

Finally, I will turn to our relations with our neighbouring countries. Sir, my mind is disturbed and I feel sad that while we in Singapore are happy and proud of our achievements in the last decade and grateful to the Government leaders for what they have done, there are many of our friends outside of Singapore who would have wished to share our joy and pride as brothers and equals and unable to do so for reasons beyond their control. I refer, Sir, to the many, known and unknown to us, who have been secretly wishing us well since the day we acquired independence as a sovereign republic. These kind people, sharing our hopes and aspirations and knowing our difficulties as an independent state, must be searching deep within themselves for the evil curse that disallows them to rejoice with us over our achievements at this very moment.

Sir, our stay in Malaysia was short, but then we did make many friends. We went into Malaysia because - and I quote the Prime Minister from his book The Battle for Merger, a book from which I have derived much political inspiration - he said "if merger does not come with the consent of the people of the two territories, then inevitably it will come by the use of force by one territory over the other, because each is so vital to the survival of the other."

It is ironical and inconceivable, in so far as I am concerned, as fate would have it, that we after 4 1/2 years of independence should flourish and prosper, while our friends and relatives should 3 3/4 years after that fateful August 1965 have suffered loss of lives and homes and may soon have to face the dilemma of a deadly choice. In any case, I do not consider it wise to dwell too long on this subject except to make the following observations.

Firstly, during and after Malaysia, one lesson we did learn is that one sure and quick way to impede progress is to have too many people living on the good-will and provisions of the Government. Secondly, contrary to the expectations of many, our separation from Malaysia did not spell our death warrant. We did manage to continue to grow and prosper through sheer willpower of a hard-working people. Thirdly, we have to explore new fields of co-operation between the two territories. New personalities will have to meet more frequently to work out fields of common interest. It is vital to our survival that both territories must map out possible courses of action so as to face up to the realities of life after the shock of May last year. On various occasions, our Government leaders have repeatedly pledged to support any move that would contribute to uplifting the economic life of the people in the region. It is on this framework that we can co-operate with our neighbours.

Singapore, having made very rapid progress in industrialisation, may in future find itself to be relatively more advanced technologically, in so far as the region is concerned. There would be others who would have still to make headway in industrialisation. Would it not be a good idea then to look into the possibility of arriving at some kind of a "common market arrangement" for the distribution of technological know-how? The time will come when countries that are relatively less affluent in technological know-how should concentrate on less sophisticated industries, while others relatively more advanced can involve themselves in industries that require greater skill. In this way the relatively more advanced countries in this region can help the others on the road to industrialisation and progress.

At this point, Sir, I wish to join the Government in appealing for a better appreciation of the problem of attracting foreign investments. Quite apart from the fact that such investments as reported by the Minister bring in ready markets and technological know-how, they too can bring us stronger backing for our security. If we keep our open door policy, we will be able to get more people interested in our security to ensure that they can go about making money safely and that their investments are not harassed! I have no doubt that Singaporeans are pragmatic enough to understand that, for all the advantages that come with such investments, a price will have to be paid!

Talking about paying a price for progress. I take this opportunity to praise the worthy contribution of our workers. They have worked very hard and have accepted the Employment Act. 1968, in good spirit. This is a high price they have to pay for the progress of all Singaporeans, including the prosperous businessmen, industrialists and other commercial tycoons. The labour movement has had its share of glory in our struggle against the Communists. The workers have always taken the brunt of any change for better or for worse. They deserve our praise and admiration.

To strike a more materialistic tone, Sir, I have to remind the Minister for Labour of his assurance given on various occasions that if everything goes well, our workers should have their take-home pay revised upwards in two to three years' time. They deserve it.

Sir, Singapore has progressed not because of any natural resources or heaven-sent riches. Singapore's success is due to the iron will of the people led by able political leadership. In order that our achievements in the last decade will not be wasted, we must develop and accept new values, new ideas, be more achievement-oriented, tolerate differences, have pride in group performance, and be willing to expose ourselves to technological innovations. In short, we must develop a modern outlook in life. We must fit ourselves into the new and challenging world. The Minister for Science and Technology, after being elected pro-tem chairman of the P.A.P. on 21st November, 1954, said, and I quote:

'A country big or small can only be great if the spirit of the people is great.'

Sir, the spirit of our people as manifested in the last ten years has been great, and we must necessarily succeed as a great country.

3.06 p.m.

Mr Ng Kah Ting (Punggol): Mr Speaker, Sir, I rise to speak in admiration of the way in which the Minister for Finance masterfully and coherently presented the Budget statement. Clearly, Sir, there are many advantages in having a distinguished economist as Minister for Finance. But to many of us Backbenchers, this poses a distinct disadvantage in having to try to com-prehend the economic jargon, let alone try to tackle the Minister on his home ground.

I have a particularly difficult task today, Sir, as my economist friends who have read the statement tell me that the Budget statement is a masterly analysis of the exciting economic events of the last decade. Of course, one cannot deny the fact that the Finance Minister has had all the advantages of being at the economic helm. Therefore, Sir, I shall have to be satisfied with just a few questions, which I hope the Minister will clarify.

First, it concerns our open door policy. There are two aspects of this policy on which I would like to focus.

(1) Foreign investment. In his speech the Finance Minister pointed out that we do not really need the money that comes with foreign investments, but rather we want and require foreign investments for the technology, the marketing and managerial expertise that come with them. Therefore, first of all, if we have capital of our own presently invested abroad, should we not look into the possibility of hiring the managerial skills and know-how but providing the capital ourselves? Alternatively, should we not actively encourage more joint ventures in a much more significant manner, whether wholly-owned or partly-owned? Secondly, what steps are being taken to ensure that the marketing and managerial know-how is being transmitted to local personnel so that eventually we will acquire such indigenous skills?

(2) Immigration. The Finance Minister has called for a review of the immigration policy relating to the inflow of skilled labour and managerial personnel. This is the second aspect of our open door policy on which I would like to focus. As I see it, the immediate objective of this policy is presumably to prevent run-away wage and salary increases so that the momentum of our industrialisation plans is not impeded. The policy, I must say, is well considered, given this objective. However, two other questions need to be put forward. First. consider the situation where the foreign enterprise is set up with pioneer benefits of tax exemption, accelerated depreciation, lower property tax rates, subsidised factory sites and utilities, and, lastly, utilising imported personnel. One may wonder what net benefit the concern is to our Republic. Therefore, Sir, if we look at the Gross Domestic Product, the sum total of employee remuneration and profits will be registered, but in terms of the Gross National Product -a truer measure of national welfare -the addition is negligible, if not negative. Undoubtedly one can argue for some multiplier effects arising from the enterprise's local purchases as well as for eventual tax revenue gains. Nevertheless, the point is surely crucial in that we need to be aware of net benefits and costs. In this regard, perhaps steps should be taken to reduce the large item of "Errors and Omissions" in the balance of payments to enable us to get a better picture of the G.N.P.

Second, another issue connected with the immigration policy is that we should exercise extra caution and selectivity. It would not do for us to erode legitimate gains in worker productivity by allowing in sufficient numbers so as to keep wages and salaries down. Our dilemma is that, on the one hand, wages and salaries are contributions to the G.N.P. and hence, other things being equal, maximising wages and salaries would maximise the G.N.P. And on the other hand, wage and salary increases unwarranted by productivity gains can surely hurt us by dampening investment, both local and foreign. Therefore, Sir, I think some kind of balance in this respect would have to be struck.

A third point in regard to the immigration policy is the possible political repercussions. As long as the flow of such workers is inwards, no such problem conceivably arises, apart from other nations' concern about a brain drain. In the eventuality of any recession in Singapore. however, the resulting retrenchment of foreign workers could give rise to political problems particularly if the numbers are significant. I must hasten to add, Sir, that this has not happened as yet, but we should be prepared for such an eventuality. Hence, as I have said earlier, we should exercise extra caution and selectivity.

My second point concerns the economic growth and social fabric. Mr Speaker. Sir, I get the impression, after reading the Budget statement, that our Finance Minister seems rather envious of the Japanese growth and savings rates. I have already pointed out that, in our context, a high G.D.P. rate need not necessarily mean a correspondingly high G.N.P. growth rate. But even with a high G.N.P. growth rate, the danger arises in that our social fabric might not be able to cope with the ensuing rapid changes in style of living. Furthermore, we would also see severe strains upon the economic and physical infrastructure together with the attendant problems of pollution of air, land and sea. Should we not then moderate our ambitions and settle for a realistic pace of economic change? We certainly would not want, I am sure, any political shift that might attend rapid social and economic changes?

I come now to the subject of the British military pull-out. Looking into the immediate future, the Minister for Finance has drawn our attention to the expenditure effects of some $250 million to $300 million from the final phase of the British withdrawal. In addition, we face the prospect of a dampening of world trade. The question I would like to ask is this: have we drawn up plans for mitigating or offsetting the otherwise deflationary impact of the two factors? The Finance Minister mentioned the running down of the foreign exchange reserves. There are, therefore, two points that many be worthy of notice. First of all, I believe we can reduce the anti-deflation expenditure somewhat if we chose projects that have low import leakage. Secondly, we should resist the temptation to raise taxes. Depending on the incidence of such taxation, the overall effect would be deflationary. Instead, if capital markets abroad loosen up, we should borrow from abroad. But in any case, our non-monetary reserves would be more than adequate for the purpose.

I now come to the question of the profitability of Government enterprises. We in this House have had on several occasions touched on the Government's participation in a number of enterprises, both wholly - and partly-owned. All we know about them is that so much has been invested. Perhaps the Minister for Finance can enlighten this House on the profitability of these ventures, that is, the rates of return we have earned on them. I think in reply to questions yesterday, the Minister threw little light on them. He gave only an example, but then what about the rest?

My next point arising out of the Finance Minister's observations concerns under-employment. He made an observation on the tight labour market with regard to skilled and semi-skilled labour. However, there would appear to be a category of people labelled under-employed. These are either white-collar aspirants or else Primary VI rejects, and they are mostly young, and largely sheltered by familial structures. And yearly we add to the list, if only via Primary VI rejections. My question is: what can we do about this category? We take care of those who survive the Primary School Leaving Examination in either academic or technical education. I believe the Government did attempt to do something by opening vocational schools. But such schools have now been replaced by Industrial Training Centres. Hence, the problem of this lot of under-employed has yet to be solved. Therefore, something should be done about it.

Sir, I notice that the Finance Minister did not touch on the Vietnam issue. With the accelerated reduction of U.S. military expenditure in Vietnam, our trade in that area will be affected. It may be that the volume of trade is small, but certainly one cannot say that it is negligible. Perhaps the Finance Minister would care to comment on how it will affect our trade.

Sir, my last point concerns the near standstill expenditure on social services. My question is: is this justified in view of all the gains we have made in the G.N.P. growth? Sir, I notice that there are other Back-benchers who are also eager to have their say on the Budget statement and I would now like to close my remarks by saying that I fully support the motion so moved by the Finance Minister. I also hope he will clarify what I have just raised, for I must admit that I am no economist but am just trying to fulfil my duties like others.

3.25 p.m.

Madam Chan Choy Siong (Delta): (In Mandarin): Mr Speaker, Sir, we are glad to hear the Finance Minister make the announcement in his Budget statement for the coming financial year that there will be no increase in the present taxes or the creation of new ones. This is a very welcome statement. In spite of the fact that our country is faced with the imminent withdrawal of British troops with a consequent increase in our defence expenditure, our revenue has reached the figure of $1,041,200,000. Comparing this figure with that of 1969, the revenue estimate has increased by $106,800,000. After transferring $40 million to the Development Fund and meeting the expenditure of $1,040,920,780, there is still a surplus of $348,220. There is no deficit. This is a good reflection of our economic achievements since independence. Our economic growth has enabled us to meet our increased expenditure. It also shows how, with preparation, the Government is able to achieve these results. It has also been able to create a mild boom in its economic development. This has injected confidence into our people in the future of our country.

Sir, in discussing this painless budget, allow me to express my feelings which come from the bottom of my heart. First, the economic prosperity we have achieved seems to have the appearance of democratic socialism. But fundamentally the Government has not realised the principle of democratic socialism. Secondly, as regards the livelihood of the people, the working class has made their contribution to our economic development. Yet what they have received in return has been less than what they have paid for in their efforts. To put it simply, from what we can see of the economic development of our country, the Government has not made a fair distribution of the fruits of our economic development, because there is still a gulf between the rich and the poor in our society.

The Minister for Finance has pointed out that the Employment Act, 1968, has been supported by the N.T.U.C. This shows that our people are determined to overcome the present difficulties and that they are willing to make sacrifices in order to ensure a better future. He has also pointed out that in this way foreign investors will be able to recognise in our people a trustworthiness which can ensure the success of their investments. The working class has contributed much to the progress of industrialisation, and has sacrificed a lot in the interest of the country. However, some capitalists use the Employment Act to exploit the fundamental interests of the workers in order to enrich themselves. The Government has now and again said that it would take action to deal with those capitalists who exploit labour. But this is only lip-service. From this, we can see that the Government has not taken any strict measures to check management in order that the interests of the working class can be safeguarded. Sir, the welfare of the working class is also the responsibility of the Government. It should be safeguarded. I want to stress that the working class is prepared to meet the challenge of the age. They are willing to sacrifice their personal interests in order to help the Government make a success of its industrialisation programme. However, locally-produced goods are not cheaper than imported goods. We have strongly supported local industries, and yet locally-produced goods are more expensive than imported goods. For instance, fire-crackers are locally produced. We can also get imported fire-crackers which are subject to tax. But both imported and locally-produced fire-crackers are sold at 35 cents per packet. Therefore, we can see that the local product is not cheaper than the imported crackers. We have made our contributions and sacrifices, and yet we have not enjoyed the fruits of our sacrifices. When imported goods can be sold cheaper than our locally-produced goods even after they have been taxed, we can see-how expensive our local products are. There is something wrong here. It seems that the Government wants only our people to make sacrifices. On the other hand, it has been more courteous towards the capitalists. Sir, I do not mean to frighten away the capitalists from investing in our country. But what I want to point out is that the encouragement of foreign investment in our country should be based on the principle of mutual benefit. If the Government were to take a placating and cringing attitude towards the capitalists in order to encourage foreign investment here, it would only expose the inability and foolishness of the Government. It would also show that it is not adhering to its principle of democratic socialism.

Sir, from the Budget statement, we can see that the efforts of our people produced $414.3 million for the manufacturing sector in 1965. In 1966, it increased to $486.8 million - an increase of $72 million. Private sector investment also increased from $233 million in 1966 to $596 million in 1969, showing an increase of 156 per cent. I am quoting these figures in order to show that, as a result of the sacrifices and hard work of our people, our country has been able to overcome its difficulties and has achieved the present mild boom in our economy.

During this period, the Government has improved the living conditions of a few high-ranking Government officers and also increased their allowances. For instance, a Mercedes car is provided free to every one of these officers in order that they can better serve the Government. The total cost of seven Mercedes cars is more than $110,000. I do not deny that these high-ranking Government officers have contributed a great deal to the country. In a way, it is proper to give them incentives so that they can better serve the Government. But the crux of the question is that we should not neglect the contribution made by the working class who have taken part in the building of our country. Why is it that the living standard of the working class has not been raised? Furthermore, Government has not introduced measures to improve the living standard of the working class. Sir, I am sure you will agree with me that if we are to give incentives to Government servants so that they can serve the country better and make them feel secure in their posts, we should not forget the lot of the general masses. When these high-ranking Government officers in air-conditioned rooms formulate schemes, they have to depend on the general masses to carry them out. When the general masses cannot carry out these schemes they will be made scapegoats. And we, as Members of Parliament, will also become scapegoats of these officers.

Talking about Members of Parliament, our duties in the constituencies have increased considerably. After a lapse of ten years and in spite of the increase in our work, our parliamentary allowance of $500 has not been increased. In other countries, the M.P.s have ways and means to enrich themselves. But we are a different lot here and we do not think of enriching ourselves. If we compare ourselves with the M.P.s of other countries, we do more work in the constituencies and we are serving the masses even though our allowance has not been increased. This is an example for all to see and emulate. Sir, I have given this example but it does not mean that I am making a request for an increase in our allowance. I have no such intention. The main purpose in giving this example is to compare the M.P.s here with the M.P.s of other countries. And also to urge all our M.P.s to adhere to our democratic socialist principles and march along this path in order to build a better and fairer society. In order to achieve this ideal, we have to take the necessary measures. There must be a balance between production and consumption. We must also try to narrow the gap between the rich and the poor. There should be better safeguards for the working class, and production must be increased. The workers' living standard should be raised so that there will be a fairer distribution of the economic fruits. We should aim at these targets, and not allow our society to be manipulated by the rich. Only by these means can we eliminate the exploitation of the working class and bridge the gap between the rich and the poor.

Sir, you will agree with me that the main task of the Government is to look after the welfare of the people and to increase the rewards for the working class so that they can improve their livelihood and also to provide for the next generation. The Government must also take steps to increase the purchasing power of the working class. Of course, it will have to proceed with its industrialisation programme. But I feel that in the process, we should synchronize it with our policy of democratic socialism in order to increase the benefits of production so that they can be shared equally by all the people.

However, Sir, I do not advocate that the Government should do away with private enterprise. All private enterprises, in so far as they do not act against the interest of the people and the nation, should receive assistance from the Government in order to increase production and efficiency. The rich are still in an advantageous position. For instance, we have heard from many hawkers complaining that they have suffered considerably under the urban renewal scheme. I fully support the redevelopment of the urban areas, but we should also realise that some people would be affected as a result of the urban renewal scheme. Redevelopment affects different people in different ways. On the one hand, some investors would reap huge profits, but, on the other hand, small merchants would sustain severe losses. Some might even go bankrupt. This is because they are unable to adapt to their new situation and new environment. I am sure the Government can get all these facts from the Ministry of Law and National Development. Though the Government awards compensation to the people affected, it should be stressed that the amount of compensation given cannot make up for their suffering. The high-ranking Government officers who stay in their air-conditioned rooms cannot appreciate the extent of their sufferings.

As regards the concessions given to those who are forced to remove, the actual fact is that they have no choice. Though they are given concessions, the type of dwellings or shophouses, the cruel fact is that everything boils down to money in the final analysis. What the Government cares for is also money. Small merchants have not been successful in competing with larger capitalists when tendering for premises.

Talking about small hawkers, this question again makes us realise that the Government is not dealing with matters based on the spirit of democratic socialism. First of all, I should point out that as our Government is elected by the people, we should act according to the manifesto we put up during the elections. We must have the agreement of the people first before we implement any new policy. In this way we can be true to our people. They will therefore support us because they feel that we have fulfilled our promises. How are we going to explain to the people in great detail that we could not fulfil all our promises, as pledged, because of the changing times? We should make ourselves clear to the people and explain the present changes to them. We are duty bound to explain to the people who have elected us to this House why certain measures are impractical and cannot be implemented. In my view the Government has not acted according to the spirit and principle of its manifesto, in dealing with the hawkers. Sir, the question of hardship of the hawkers has been resolved to some extent. However, they still face some problems, for instance, the increase in hawkers' licence fees. The Government's policy on hawkers needs to be changed so that they may be better treated. When we increase their licence fees, we are imposing a greater burden on them, though the additional sum extracted from them is to be used for health and environmental services. Why do the Government not think of measures to prevent the evasion of tax by the "big fish"? It is an open secret that rich people have been evading taxes. Instead, the Government is increasing the tax on hawkers' licences. This kind of action is not appropriate. I believe the Government, by paying attention to this point, will be able to get more revenue from people who have been evading taxes.

Sir, I urge the Government to take note that to tax the hawkers would only increase their burden and suffering. They are already finding it difficult to make ends meet. In the end, they would form the habit of borrowing from chit-fund companies, which are now flourishing, to solve their financial difficulties. The chit-fund companies thus become blood-sucking vampires. For instance, when small merchants remove to other accommodation because of the urban renewal scheme, they will have to pay a lot of money like initial down-payment, rentals and other necessities. Since they have no ready cash, they will have to get some sort of a loan from the chit-fund companies. They will have to pay very high interest rates. In this way, the poor becomes poorer and the rich becomes richer. Thus the rich would be able to exploit the poor. This has always been the case. The legislation of chit-fund companies by the Government will lead to the result I have just mentioned. I would like to ask the Government why it cannot provide the same kind of service as the chit-fund companies do for these citizens in order to help them improve their livelihood. The Government can charge a low rate of interest as maintenance charges. In this way, it can help the poor people when they need money urgently.

From the Budget statement, we can see that our Gross Domestic Product has increased from $1,968 million in 1959 to $4,833 million in 1969. The per capita income in 1959 was $1,262 whereas in 1969 it was $2,437. This goes to show the economic progress of our country in the past ten years. However, this rate of economic progress does not necessarily mean that the standard of living of everyone in Singapore has gone up, that we are now very well off. Even though about ten years ago the per capita income was about $1,200, the poor people could still put some savings in the bank, but now they do not have enough to live on even though the per capita income has risen to $2,400. They have to borrow from the chit-fund companies.

I would urge the Government to impose a more progressive tax on the rich people so that they will be taxed more. This is not improper. In this way, we can close the gap between the rich and the poor people of our country.

Sir, to come down to the root of the matter. If the Government wants to realise its aims and objectives of democratic socialism, it should provide a fairer and more equal redistribution of wealth. Though at the beginning this might call for a small sacrifice from the people, we have reason to believe that in the long run they will resolve to march forward in order to achieve a better and a more prosperous future. In this way we will be able to instil in our people hopes and prospects for a better future. Otherwise the political ideas which we have spent much thought in formulating and which we have struggled hard to realise will have no significance. If there is no political idealism in our work here in Parliament, then, Sir, may I ask, how can the Government still expect to receive the support of the masses? Now is the time for the Government to implement a fairer distribution of wealth for the whole society.

4.03 p.m.

Mr Ang Nam Piau (Thomson): (In Mandarin): Mr Speaker, Sir, last year when the Minister for Finance tabled his budget, many new tax proposals were made. However, under his expert guidance, he presented on the 9th of this month a budget which does not contain any new tax proposals. This brings great delight and relief to the people. I fully support this painless budget, and I hope that the next few budgets will be as painless as this one.

According to the Minister, the reason for the favourable balance between revenue and expenditure is due to "fast economic expansion and improved tax administration to provide increased revenue". The Government has put in much effort to expand the economy of our country so as to arrive at a balanced budget. This is an ideal policy. However, whether our economic expansion will be sustained is the crux of the problem. Whether the present economic boom will only be transient or whether there will be economic crises are the uncertainties of the future.

Mr Speaker, Sir, we should not be complacent about what we have achieved in our economic programmes. The complete withdrawal of British forces by the end of 1971 and the world-wide economic recession will affect the economic progress of our country. This was clearly pointed out in the Minister's Budget statement. It is a warning signal to our people - that if we do not take steps now to prepare for such adverse eventualities, we shall be faced with all sorts of threats.

Sir, no doubt we have experienced an economic expansion over the last decade. But whether this will be sustained is a problem into which we must look. Investors have taken advantage of all the incentives and concessions that the Government has offered them. But they are only concerned with the short-term returns and interest on their investments. This can only result in the poor quality of their products. Such ventures and enterprises will not be able to survive for long. They are a source of disruption to our economy. Sir, such investors and enterprises should be controlled by the Government so that they will not misuse the incentives and concessions offered to them.

4.09 p.m.

Mr Teong Eng Siong (Sembawang): (In Mandarin): Mr Speaker, Sir, the Minister for Finance has taken about two hours to deliver his Budget statement. It reveals in great detail the progress of our economy over the past ten years. It analyses the various stages of our economic development over the last decade, and has arrived at a very logical conclusion. Obviously the Minister has taken much time in its preparation in order to draw up such a comprehensive statement. The spirit shown by the Minister is really praiseworthy.

Over the past ten years we have experienced various difficulties and drawbacks. For instance, in 1961-63 there were political disturbances when anti-national elements created trouble everywhere, trying to destroy our national existence. In 1963-65 there was the Indonesian confrontation which made the Indonesians stop trading with us. This period slowed down our economic progress. But under the able leadership and policy of our Government, together with the joint efforts of our people of all races and classes, we were able to overcome these difficulties and we now march steadily on to economic construction.

Of these grand economic and social achievements, it is necessary to mention the following: (1) the achievements in building construction. Over the past ten years we have built 100,000 units of low-cost housing. This has solved our housing shortage problem. (2) The building of industries. Over the past eight years we have successfully laid a sound foundation to our industries, and industrial produce has increased. For instance, in 1959 the industrial sector's contribution to our Gross Domestic Product was $256 million. However, by 1969 this increased to $1,154 million. There was a great increase in the number of jobs available. According to statistics, by the end of 1969 about 87,000 jobs were created. This solved our unemployment problem to a great extent.

In addition to the high rate of our economic development, we have also made achievements in the fields of education and social services. For instance, we have successfully maintained our free universal primary education, and have done well in our eradication of illiteracy. We have also improved our technological and scientific education. This stream of education will provide high calibre personnel in large numbers needed for our nation building. Moreover, as a result of our improved educational programmes, more and more of our people will be better educated and equipped with modern technological knowledge. Undoubtedly they will become the future elite of our citizenry. Further, over the past few years, because of a nation-wide family planning campaign, our population growth has decreased from 40 per 1,000 to the present 18 per 1,000. As a result of the judicious planning of the Ministry of Health over the past two years, a nation-wide cleaning campaign was launched, and with the joint effort of the people we have, in fact, become the cleanest country in the whole of Southeast Asia.

All these good performances clearly show that, in spite of the various political and economic difficulties, we have been able to overcome them and, in fact, have even achieved much in the l960s. These achievements have been greater than anything obtained in other countries in Southeast Asia.

Sir, I agree with the Minister for Finance that in our society there is greater social cohesion and a higher degree of social discipline and self-reliance. There is also a sense of pride. among our people, who are ready to surge forward in spite of unfavourable conditions. All these good qualities are factors to stimulate our social progress and the dynamism behind our nation building. For instance, the members of the various Citizens' Consultative Committees, the community centre managements, and the committees of the various city organisations, give very concrete examples of their dedicated service to our country and our people. All this shows that our people have good qualities of character. Another example is that during the confrontation period our people quickly rallied round the Government when the call for national defence was made. They immediately joined the Vigilante Corps. The present good response of our youths to national service is another concrete example of the dedication of our people. This shows that the character of our people has been lifted to a higher plane - a necessary quality for nation building and one which will ensure success for our country.

We are an emigrant society. During the colonial period we lacked a sense of group living. However, since our independence, we have been able to inculcate this good quality in our people. Our success so far has been due mainly to three factors. First, the Government's intimate contact with the people. The national leaders are able to discuss with the people various problems confronting the country and thus inculcate in them a sense of patriotism. Secondly, the educational and cultural levels of the people have been generally raised. They have a deeper understanding of the problems confronting our country. Thirdly, greater use has been made of the mass communication media, such as the newspapers, T.V. and the radio. This has increased the sense of patriotism of our people.

I have read the Budget statement many times and I am sure the Finance Minister has made an accurate analysis of our economic situation and that our future is bright. Of course, we have been stressing the fact that the 1970s will be a period of trial and challenge to us in view of the British withdrawal by the end of 1971. We have to bear the full brunt of maintaining our own defence and security and their effects on our economic development. We are confident of facing the future, because it is an undeniable fact that we have various factors in our favour. Our foreign reserves stand at $2,445 million, a four-fold increase in four years. This will ensure that our currency is stable and consequently international investors will have greater confidence in our country. We have also done well in developing our internal economy; for instance, the development of new industries, shipbuilding, housing construction, tourism, an increase in external trade and the undertaking of urban renewal projects. We have progressed in all these fields. If present conditions continue in the coming years, we will be able to maintain our economic prosperity.

In the present budget, the estimate for defence is $328,670,000. Next comes social services, which takes up $319 million. Following these two items is the estimated expenditure for statutory boards and other economic services which cost a large sum of money. Every year the Development Fund will receive about $30 million to $40 million which will ensure the success of our development programmes. Defence has taken the biggest cut in our budget. This is because the Government is taking immediate steps to strengthen our defence in order to meet the situation created by the withdrawal of British troops in 1971. This is to ensure that we are able to exist as an independent country. This is the correct action to take, and I am sure all our people will give their wholehearted support to the Government.

However, in spite of the increased expenditure on defence, the Government has not neglected its responsibilities on education. In the budget for next year, $3.9 million is allocated to the University of Singapore, Nanyang University, the Singapore Polytechnic and Ngee Ann College. There is thus a nine per cent increase in expenditure over that of last year in the development of higher education. This is to ensure that we can produce people of high calibre to help in our nation building. This is a good measure.

With regard to the question of immigration and the granting of citizenship, the Minister for Finance has said that the Government will relax the regulations for the granting of citizenship. I agree with this measure as it is in the interest of the country. I hope those who have been living in Singapore for a long time and who possess blue identity cards will be given some consideration in their applications for Singapore citizenship. They have families in our country who are willing to be loyal citizens. We should grant them citizenship so that they can make a positive contribution to our country.

It is also necessary to mention that, although there is no increase in taxation, there is a credit balance of about $300,000. This speaks volumes for our Minister for Finance because it shows his ability and economic acumen.

To sum up, this is a lively budget. I believe that with the present stable political situation and with continuing prosperity in our economic development, our Republic will enjoy a better year. With the joint effort of the people, a new and prosperous era will begin in the 1970s.

4.23 p.m.

Mr Lee Teck Him (Ulu Pandan): (In Mandarin): Mr Speaker, Sir, I have something to say on the budget for the coming year. On the subject of defence, I must say that I am not against the defence of the country as such, because every country has to defend itself. Every country needs its own armed forces to protect its people. In the past, education has always taken the largest sum of money. But this year defence has taken the largest cut, a sum of almost $300 million. This is too big a burden for us. I have said that I am not against defence as such. But the way we are going about it is wrong. We have called up our youths for training and the reason why we have to spend so much is that national service is compulsory. We should start training our youths when they are in Secondary I or Secondary II. All Secondary school students should undergo military training. In this way we can carry out military training free of charge. We do not have to incur such large sums of money on defence. What I mean is that training for national defence should start with secondary school students. We must also induct female students into national service. This is only fair, otherwise we may one day find that all our male citizens are engaged in a war and all of them might perhaps be killed. What will be left will be only females. Can they produce children without the men! This is wrong. We should induct both males and females into national service. This is my opinion. Unfortunately, the Minister for Defence is not here. But I would like him to revise his policy on national defence. Only then can we save a great deal of money. Other countries are also doing this.

Next I come to the question of foreign affairs. In the past we have followed a policy of neutrality and non-alignment. But now we are no longer neutral. This is wrong. Take, for instance, the tight rope in the circus. Can the rope swing to the left or to the right during the act? No, it cannot. It must be firm and straight, otherwise the tight-rope walker will fall down. So we must be neutral in order to be safe. We must not go either to the left or to the right. Whoever comes to attack us, let us die together. What are we afraid of? If you are afraid, you should resign. No one should influence our stand. We should maintain our neutral and independent stand. In this way, our economy will prosper and we will progress.

We have changed our policy towards the Bank of China. This is a failure in our policy. What are we afraid of? We are not going on the lines that China is going on. We should not follow the policy of going either to the left or to the right as long as there is money. We should adopt a policy of perfect neutrality, otherwise in the end we are going to suffer. I would like to remind the Minister for Foreign Affairs that we should be neutral, otherwise we would be like the man walking on the tight rope in the circus who will fall down if the tight rope swings to the left or to the right. What a disgrace it will then be. If we go to the left or to the right, we will fall down. We must be neutral and remain in the centre so that in the end we will reach our objective. I was in full support of the Government's policy on the acquisition of land. But now the Government seems to be taking over land on the cheap and selling it at high prices. Let us have a bit of fairness in this matter. Without fairness, all the people will complain. Let us be fair to the people. We cannot suppress the people too much, or they will rise in rebellion against us. At least the Ministers can take an aeroplane and fly to some other country. But where can I go? For those of us who cannot afford to take an aeroplane, where can we go? If we go back to China, what will happen to us? What about those Members of Parliament and the rest of the people who cannot take aeroplanes and fly to some other country? So we must adopt a neutral policy. Only then can our future be secure.

On the question of the acquisition of land also, people are saying that the People's Action Party is now operating a bean curd shop, and that it is selling things. They have said that Singapore has sold Christmas Island but they dare not say that the P.A.P. has sold Singapore island! They are saying that the P.A.P. is operating a bean curd shop. Mr Speaker. Sir, you may not know about buying bean curd. Previously bean curd was sold piece by piece. How about the P.A.P.? The P.A.P. is also selling bean curd piece by piece. How can this go on? We cannot allow this state of affairs to go on. We must be fair, otherwise the people will not be satisfied with our performance. The land that we acquire from our people should not be sold to foreigners. Otherwise it would be similar to the concessions in Shanghai, where plots of land were divided up among the foreigners. We should not do this. We should sell acquired land only to our citizens. If we sell to foreigners, what are we to do if we are attacked by foreign troops? This shows that we are not patriotic enough. I came from China and I know what imperialism is like.

Just now the Member for Delta spoke about resettlement. She was wrong. How can we resettle people? We should have pity on them. We must be fair to them. We must not force them to move from place to place. As an M.P., I was scolded by people who were evicted from their houses. It is because they had a genuine grouse. Last December, as the people were getting ready to celebrate the New Year, they were ordered to move out. If the authorities wanted them to move out, a few months' notice should have been given to them. How could they celebrate the New Year when they had to move out? It was not a Happy New Year for them. Some of the officers are getting a few thousand dollars, which is more than what our Prime Minister is getting. This is not the way to do things.How can the people tolerate this sort of treatment? They cannot take it any more. They are angry, and when the demolition gangs are about to pull down their houses, they arm themselves with weapons. How can we cope with the situation?

On the question of arrears of rent, I must say that everyone owes rent. But we should not force them to move out just like that. Our Government is a democratic government and we should not do things in this way. The Minister gets a few thousand dollars a month. How much does he save from this sum? How can people with a few hundred dollars support their families and pay rent regularly? They should be given time to pay up their arrears of rent. They should not be forced to move out. It they are forced to move out, then democracy becomes suppression and tyranny. People would rise and rebel against our Government. What are we going to do then? I have seen many things. Where can we go? Are we going to the hills? Therefore, we must consider the question of payment of arrears of rent. We should have pity and look after those people who owe rent. We should not evict those who cannot afford to pay up. They just simply cannot afford to pay up. The Minister should be more sympathetic. He should see for himself the circumstances of the people who are in arrears of rent. I must also say that there is no corruption in Singapore, but there is an unreasonable bureaucracy.

Mr Speaker: Order. I will take the suspension now and will take the Chair again at 5.00 p.m.

Sitting accordingly suspended at 4.36 p.m, until 5.00 p.m. Sitting resumed at 5.00 p.m.

[Mr Speaker in the Chair]

Debate resumed.

Mr P. Govindaswamy (Anson): Mr Speaker, Sir, congratulations to the Minister for Finance on his highly satisfactory Budget statement. During the last ten years, despite the many unexpected setbacks, such as Indonesian confrontation and the accelerated British military withdrawal, and despite the apparently insurmountable problems such as the unemployment situation, our economic strength has continued to improve. Credit must therefore be given to the Government and, in particular, the Minister for Finance for having successfully steered our country through one of the most difficult periods in our history.

However, while the Minister reported considerable improvement in our standard of living and in our economic position, I wish to draw his attention to some important matters which affect the livelihood of our farmers in particular, and the cost of living of the general public in general.

No one will disagree that our industrialisation programme, which has been a great success, has broken the back of our unemployment problem, but while we concentrate on industrialisation, we must not forget that we should try to be self-sufficient as far as possible in food production. Through the efforts of the Primary Production Department in the past few years, we are now able to produce all the eggs and pork needed for our home consumption. I understand that the prices of eggs and pork sold by farmers to wholesalers are very much lower than the prices paid by householders in the market. Our farmers are complaining that, because of the low prices of eggs and pigs sold to the wholesalers, their income is hardly sufficient to pay for the feed-stuff for their hens and pigs. Yet housewives have to pay high prices for pork bought from the market. This situation affects not only the farmers, but the general public as well, for when the prices of eggs and pork go up, other foodstuffs also follow suit, resulting in an all-round increase in our cost of living.

Perhaps the solution lies in the formation of farmers' co-operatives. The farmers sell their produce to the cooperatives which, in turn, sell it to the retailers in the market. If the prices of eggs and pork are to remain at the present level, and if the public accepts these prices, at least the benefit goes to the farmers. Alternatively, if the farmers' selling prices are to remain, at least the general public benefit by having to pay less for their eggs and pork, and there would be a general lowering of our cost of living. At present, neither the farmers nor the general public benefit; only the middlemen, the wholesalers, who seem to have a grip on the market, benefit. I therefore urge the Minister for Finance or the Minister responsible for co-operative societies to look into this problem and consider the formation of farmers' co-operatives. This will not only be an incentive to the farmers to improve their economic conditions, but also enable the people with lower income to buy food at cheaper prices. 505 p.m.

Mr Ho Kah Leong (Jurong): (In Mandarin): At the beginning of the l970s and in the midst of the withdrawal of the British Armed Forces, the wise and resourceful Minister for Finance has presented a painless Budget, without introducing any new taxes or any increase in the rate of old taxes. Needless to say, this budget will be welcomed with great joy by people from all walks of life. He has given us encouragement, as we step into the l970s. He has also given us a greater degree of confidence in the future of our country.

What we are glad and proud of is that about four years ago, after we were forced to leave Malaysia, all the people managed to pull themselves together and, in a concerted effort, put in a great deal of hard work, thereby producing the fruits of the labour we see today. We have laid a firm foundation for our permanent survival. Our economy has progressed by leaps and bounds each year. Our Gross Domestic Product has increased every year. Our industries have thrived. In fact, what we are facing now is not the problem of creating more employment opportunities, but the problem of the shortage of labour. In short, the task of our nation building has had a very favourable beginning. As long as we all learn from the experience of our predecessors and work hard, the prosperity we enjoy now will be maintained and further enhanced. However, we should not forget that there are some people around us who would like to see us fail. For this reason, we cannot afford to be careless in the least. We cannot afford to relax. We must stand firm in our position and progress from strength to strength.

The Minister for Finance has told the House that the financial policy of the Government is based on the rapid economic growth and relies on the im proved administration to increase the revenue of the country. It does not depend on new taxes or higher taxes for its revenue. This is a very wise and praiseworthy move.

I notice that the Minister, in order to improve the efficiency of tax collection, has set up a new Anti-Evasion Unit with 52 posts. This makes me think that the number of tax evaders must be quite considerable, otherwise it would not be necessary to expand this Unit. I would like to tell the people who evade taxes that paying taxes is their duty. To evade paying taxes is despicable and immoral conduct. There is a Chinese saying which goes something like this: "What we obtain from society should be used for the good of society." The monetary wealth that people acquire from society should not be exclusively for their own use. Part of it should be used to improve the living conditions of the poorer sections of the community. It would be very selfish of them to keep it for their private use. I would like to ask these people to think again and to abandon this form of selfish conduct. I would like to ask the Minister to punish severely those who evade taxes constantly, because, if nobody attempts to evade taxes, it would not be necessary for the Minister to set up this Anti-Evasion Unit, and the expenditure for it could be utilised for other projects which would be beneficial to our people and our country.

Mr Speaker. Sir, from the Budget speech of the Minister for Finance, we all know that, as a result of the rapid expansion of our industries, there is a severe shortage of engineers, technicians and skilled labour. In order to support the expansion of our industries, the authorities have decided to relax the immigration laws so that those with specialised technical skills could come and live in our country and look for jobs, whereas in the past they had to get a job first before they could be allowed to settle down here. On the one hand, the Minister for Finance has provided for a larger amount of money to impose stricter immigration laws, whereas, on the other hand, he is relaxing immigration laws. Is this not a paradoxical situation?

There are some young people in our country who, because they are afraid of national service or for other reasons, go overseas to study, and, after the completion of their studies, they do not come back. This is a form of brain drain. The Government should do something to make these people come back and play their part.

Mr Speaker, Sir, I have noticed that the vote for the Ministry of Health has shown a significant increase. The increased provision will, of course, mean that the people will get better medical services. This is most commendable. I would like to make use of this opportunity to ask the Minister for Finance what has happened to his promise that he would consider the extension of medical benefits to the staff of Government-aided schools? When is this extension going to be implemented? I would like to remind him that on the 11th June of last year in this House, the Parliamentary Secretary, in reply to a question put by me, said that the question of the extension of medical benefits to the staff in Government-aided schools was under discussion by the Ministries of Finance, Health and Education at the beginning of 1969. The Parliamentary Secretary had promised that the question would be given speedy consideration. This could be found in Hansard, Vol. 29, No. 1 (cols. 6-7). Fifteen months have already passed since the discussions were started. I would ask the Minister not to delay further consideration of this issue.

5.13 p.m.

Mr Tay Boon Too (Paya Lebar): (In Mandarin): The Budget address given by the Minister for Finance on 9th March, 1970, is a painless budget and is a source of joy and happiness to people from every stratum of society. Indeed, in the midst of the imminent run-down of British forces and the decline in British military expenditure, and the consequent increase in our defence expenditure, our Government has not thought it necessary to propose new taxes. This is indeed good news to the people of Singapore.

Mr Speaker, Sir, what I would like to point out is that in the vote for Education, I notice that there is a ratio of three to one between technical education and general education. I feel that this preponderance in favour of technical education should not be maintained for too long. It is true that the implementation of our industrialisation programme requires an army of skilled personnel to staff all the factories. But we must admit that the boom and prosperity that we are experiencing at present is not due to our preoccupation with scientific and technical education alone. To put it simply, in addition to scientific and technical education, we must also see to it that our social sciences advance at an equal pace. Otherwise we will be faced with the prospect of many of our citizens being merely tools for economic production, without a corps of economic planners at the helm to guide our economic destiny. This will bring about political instability and social insecurity. And finally we will come to a catastrophic end.

Mr Speaker, Sir, let me cite an example. Take the Ministers in the Cabinet. None of them is the product of pure scientific and technical education. Yet they are able to transform this small island of ours, without any natural resources, into a land of prosperity and plenty. This is indisputable proof that the study of the social sciences should not be neglected.

On the other hand, I have noted that the provision for Social Welfare has been reduced by the amount of $4 million. This is bad news for the poor section of our population, and is a retrogressive step. Everyone knows that the People's Action Party has the support of the people, and was given a mandate to rule the country. One of the reasons for its success is that it runs a very honest, clean, and incorruptible administration. But more important, the P.A.P., has all along been looking after the welfare of the poor, and its achievement in social welfare services is unrivalled in this part of the world. Although we know that we must incur a greater amount of expenditure for Defence so as to enhance our defence capability, it does not necessarily mean that we have to cut down our provision for the poor section of our community. This reduced expenditure is particularly felt since existing private charity organisations have not spread out enough or have not been able to take over the functions of Government in social welfare work? We must not neglect the less fortunate sections of our people and allow them to drift along, as this will result in social insecurity and unrest. I am sure the Government can easily find this meagre sum of $4 million to provide for our social welfare services by levying a higher rate of duty on luxury items such as cosmetics, liquor, and tobacco. The poor section of the people who will benefit from this measure will then express their boundless gratitude to the Government. Moreover, by taking this measure, the social conditions will be more healthy, and there will be less scope for criminal activity in our society.

5.20 p.m.

Mr Lim Soo Peng (Havelock): Mr Speaker, Sir, over the past years many of us in this House have lavished praise on the wisdom and far-sightedness of our Finance Minister's budgets. Even in those years when an M.P.'s life was made very uncomfortable by constituency queries and criticisms of new taxation, many of us could not but have a sneaking admiration for the way money was raised, disbursed, and hidden. I, for one, had this suspicion that total expenditure did not absorb all the taxes collected.

But it is all for the better. Now we are told that should lean times really come, we have put on sufficient fat to last it out. Looking around the city. I cannot but agree that the economic infrastructure is there. Jurong is thriving. New industrial estates are fully occupied and newer ones are planned and provided for. Never has there been so much money in the bank and in people's pockets. Unemployment has turned into labour shortage. And the final proof is this budget --which, in spite of larger demands for development and defence, relies on increased prosperity to bring in increased revenue.

The years of belt-tightening have been proved timely and necessary. Now we are able to meet the economic consequences of the British withdrawal with the confidence derived from a vastly expanded economic stability and a comfortable savings hoard.

I have but two observations to make on the Government's financial policy for the year. We have large amounts of money stashed away abroad. I know some of it has to be so in order to meet the needs of our currency backing. I understand also that when we ask for foreign investments in this country, we ask for technological know-how and international connections just as much as we ask for foreign cash. But are we making the best out of our funds?

I note that the estimate for Interest and Dividend income for l969-70 was in the region of $30 million, and that the estimate for the 12 months from 1970-71, instead of 15 months, is over $43 million. Taking 12 months for comparison, this revenue is estimated to increase by nearly 90 per cent from these two items. As nearly 70 per cent of these two items were derived from foreign sources, we must have staggering amounts invested abroad in stocks and bonds, probably more in bonds, as the 1970-71 Estimates show Dividends at about 5 per cent of interest. Can some of these sums be more profitably used here?

In the past years the Government has quite rightly placed a great deal of interest in investments in shipbuilding and the shipping industry. Neptune Orient Lines Ltd, has got off to a good start, and more money is to be lent to it. What I hope the Government has not forgotten is the fishing industry. Just as it was futile to wait until a big shipbuilder came here, it is equally unrealistic to wait until a big fishing enterprise decides to establish an industry here. I would like to recommend for the Finance Minister's consideration the need to start off as a joint venture or alone, if necessary, a large fishing industry. In 1968 we imported nearly 80 per cent of our fish requirements. Our annual consumption exceeds 60,000 tons. There is therefore, a fairly substantial home market to start off with. But a modern fishing industry requires enormous capital. The Government should step in and take the lead, otherwise it will take a long time before a local firm grows sufficiently large to be able to afford the capital. And as no foreign firm has shown signs of investing the large sums needed, it would appear that we have to finance it ourselves. Just as we are financing Neptune Orient Lines, I think we should similarly start our own fishing company. This is perhaps one of the many possible ways in which our funds can be better used for ourselves.

The second observation I would like to make is that there do not appear to be sufficient allocations to make Singapore a greener and a more gracious place to live in. I quite realise that this is not the time to spend large sums of money for parks and gardens. But follow the model of Jurong Aviary, where a public amenity is entrusted to an incorporated trading company. I would like to suggest a way in which we can have a greener and more graceful Singapore, without too much public expenditure. There are large numbers of people in Singapore who grow orchids as a hobby. But there are only a few orchid exporters, and a rather large international market is hardly touched. Hawaii has ceased to be a major orchid exporter because of prohibitive labour costs. More people in Singapore will grow orchids if an outlet is found. Orchid growing can be a profitable hobby and if more people take up orchid growing, Singapore will be that much more attractive, It would appear, therefore, that orchid exporting, since it is inadequately served by private enterprise, is a good field for Government to step in, not only to increase export earnings but also to encourage people to like and grow flowers. I think the Government should set up a cooperative to promote the export of our orchids.

5.30 p.m.

Mr Ho See Beng (Bras Basah): Mr Speaker. Sir, I followed with great enthusiasm the presentation of the budget for the financial year 1970-71 by the Finance Minister. At the very outset, he referred to "motion picture" and "snapshots" while directing the House through the turbulent l960s. In this respect, I would like to associate myself with the sentiments and similes expressed by him, and point out that both the Director and Producer of this technicolour film had made it rather attractive as could be visualised from the "curvaceous figures" displayed by the Treasury. To borrow an expression from the Minister for Finance, the "doubling" of Gross Domestic Product during the sixties is well appreciated, and I am quite confident that if we continue to compare our performance with nations of more or less similar size and population, it will provide the necessary stimulus to accelerate the pace during the more challenging seventies.

It is perfectly true, as mentioned by the Finance Minister, that human effort has to a large extent contributed to this economic phenomenon. Nevertheless, we can hardly afford to de-emphasise the fact that, apart from human endeavour, a strong currency, political stability and a responsible trade union movement have contributed a proportionate share in realising to a limited extent the short-run targets of our economy. The next decade is likely to be less turbulent since we have already dealt with the labour pains during the sixties.

In analysing the budget in detail, Sir, I have no hesitation in stating that all sectors have received adequate attention, although I might wish that one or two sectors perhaps deserve special attention. In the course of my speech, within the limited time available, I shall make a modest attempt to feel the pulse of the budget.

Closely following the budget, I have been able to observe a substantial increase in manufacturing industries, especially with regard to employment opportunities. From the figures given by the Finance Minister - I am referring to Table 14* - I notice that during 1969, the 33 pioneer firms which came into existence provided 14,200 jobs, while in the preceding year, 1968, in the pioneer section, as a result of the addition of 44 new firms, the employment opportunities were only to the tune of 4,105.

(* See Cols. 527-8.)

For the same period, i.e., 1968, the performance of all manufacturing industries was rather astounding in terms of employment figures. In 1968 approximately 15,000 workers were absorbed by the manufacturing sector. A close scrutiny of employment figures for all manufacturing industries during the years 1968 and 1969, with special emphasis on the pioneering section for the same period, reveals a strange phenomenon. When the manufacturing industries in general are expanding at a very fast pace, the pioneer section is moving in slow motion. On the other hand, for the year under study, namely, 1969, when pioneer firms have moved up both in number and employment, the manufacturing industries (excluding pioneers) have slowed down again in pace.

Sir, if I am not mistaken, from a casual glance at the figures of employment for pioneer firms in 1968 and 1969, we might conclude that more labour intensive industries are entering the Jurong complex. Perhaps the Finance Minister will consider it necessary to assist us further in appreciating the direction in which the industrialisation programme is moving.

The Finance Minister has not overlooked the fact that the phased programme of the British withdrawal would necessarily have a negative impact on the economy and measures have already been taken to cushion off the effects. A flourishing entrepot trade, rapid industrialisation with expansion of port facilities, and further improvement in tourism could form a positive catalyst. The budget for the financial year and the analysis of our past performance seem to indicate that the nation is moving in the right direction.

The total cargo handled at our port during the decade has increased nearly two and a half times, from 14.21 million freight tons in 1959 to 37.90 million freight tons in 1969, although there has been a fall of nearly three million freight tons in 1964 from the previous year, apparently, I think, due to Indonesian confrontation. But a significant feature of the total cargo trade showed that general cargo handled at the port moved at a slow pace over the past decade, from 6.40 million freight tons in 1959 to 8.30 million freight tons in 1969. On the other hand, for the same period the cargo of mineral oil, mostly petroleum, increased from 7.74 million freight tons in l959 to 29.20 million freight tons in 1969. Thus, the lion's share of the total cargo trade was taken up by oil, and this pattern might continue, especially with, oil exploration going on in neighbouring countries and more refineries. springing up in and around Singapore. But simultaneously with the oil boom, if the entrepot trade continues to flourish and the manufacturing sector responds to the Finance Minister's treatment, the total tonnage of general cargo handled at the port might rise at a faster pace. In this regard, the expansion of port facilities must be planned even now to meet the expected requirements, failing which the Port of Singapore Authority's problems might multiply manifold and the situation may be worse than that which Port Swettenham is facing today. As I can observe from the figures -- I am referring to Table 13* -- during 1966 to 1969 there was an increase of 10 million freight tons of mineral oil alone, while the increased general cargo handled for the same period was 1.86 million freight tons. The general cargo handled at our port is not likely to remain at the same pace if the Finance Minister's approach towards the challenging seventies bears fruit. Under such circumstances, the present facilities will be inadequate. I hope the Finance Minister and the Port of Singapore Authority will take all the necessary factors into consideration to improve the port facilities.

(* See Col. 526)

Mr Speaker, Sir, the Finance Minister has also laid sufficient emphasis on education and in this regard the expenditure involved could be perfectly justified. But I am more concerned to know whether the manpower will be sufficiently tailored to meet the requirements of industrialisation in the seventies.

A casual glance at the statistics provided by the Finance Minister with regard to the total enrolment in the educational institutions during the last decade indicates that in the primary schools the teacher/student ratio of approximately 1 to 30 has been consistently maintained during the last 10 years. In the secondary schools, too, the ratio is approximately one teacher to every 27 students. This also has not changed during the last decade. In tertiary education it is gratifying to note that staff/student ratio for 1969 has come up to the level of 1 to 16. If we make a comparative study of other Asian countries with regard to the enrolment of students and staff requirements at tertiary level, I might say that the staff/student ratio in the case of Singapore can be better appreciated.

Regarding the primary and secondary school teachers in general, I am afraid that of late they appear to have been over-burdened with duties and responsibilities which, under normal circumstances, should not fall within their purview. It is too much to expect teachers to pay individual attention to the health problems of the students, as it is not our intention to create quack doctors among the teachers. I might suggest that the Ministry of Education, with the co-operation of the Ministry of Health, should think in terms of establishing first-aid centres or health clinics within the educational institutions, preferably with a qualified nurse in charge, if the Government feels that there is a necessity to pay adequate attention to the health problems of the pupils during school hours. Sir, if this suggestion of mine can be implemented, it will solve the unemployment problem of the nursing profession.

Lastly, Mr Speaker, Sir, I would like to comment on the Minister's passing reference to organized labour, especially the National Trades Union Congress, for its co-operation extended to the Government. Sir, I would say that it augurs well for a nation in the take-off stage to be able to offer employment opportunities to the tune of approximately 30,000 jobs within two years! Industries require skilled and semi-skilled labour and both our Prime Minister and Finance Minister have emphasised the fact that our tempo of industrialisation has reached a stage where we might have to think in terms of attracting skilled labour from abroad with all perks which could create the necessary incentives. But, at the same time, if you look at the Monthly Report of the Ministry of Labour for December 1969 and January 1970, you will see that approximately 4,800 skilled and semi-skilled unemployed labour continue to be in the register of the Employment Exchange. Of course, I do not rule out the possibility that the skills that we require for the emerging industries might be different from the skills possessed by these people in the register of the Labour Ministry. Nevertheless, we can hardly afford to permit a situation where these categories of workers, however small they may be, continue to remain in the register of the Labour Ministry.

Incidentally, I might, with great regret, also refer to the high rate of industrial accidents which prevail in our factories today. According to the Monthly Report of the Ministry of Labour for the month of January 1970, there were 136 accidents reported to the Factory Inspectorate. Of these, two were fatal, seven resulted in amputation of the workers' fingers, and the remaining 127 resulted in minor flesh cuts, bruises, abrasions and burns.

It is perfectly true that when, in a matter of two years, you have 30,000 workers put in the factory floor along with the machinery, accidents are bound to increase in geometric progression! But it need not necessarily mean that we should ignore the situation, because there are adequate provisions under the Workmen's Compensation Ordinance.

Mr Speaker, Sir, I might suggest that the following measures could form a basis to cope with the situation. The observance of International Labour Organisation conventions and their strict application to industrial safety could be the first step. Secondly, it is possible that the sudden spurt in industries might have resulted in sidestepping the necessity to provide sufficient floor space for easy movement. In this respect, early inspection and periodic checking by the Labour Ministry might ease the situation. Thirdly, industrialists should be encouraged to install modern machinery with automatic built-in safety devices although the cost might be on the high side. Economy in such cases might cost human lives. Fourthly, there should be proper co-ordination among the labour unions, the Labour Ministry and management for a periodic review of the situation. Fifthly, workers should be educated in industrial safety. Lastly, first aid equipment with qualified nurses should be introduced in medium-sized and large-scale factories as early as possible. Sir, I am quite confident that if the above suggestions are implemented, it could possibly minimise industrial accidents so that factories would not present sad spectacles of crippled young workers. In conclusion, Mr Speaker, Sir, I would like to associate myself with the sentiments expressed by the Finance Minister with regard to industrialisation in the seventies.

5.50 p.m.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, may I thank Back-benchers for their various comments on the Government's financial policy? Whether they are in praise of the Government's policy or in criticism of it, I think they have made a valuable contribution to the many important aspects of our economic and financial policies.

I would like to deal in detail with the points raised by Members. First, the Member for Moulmein has some reservations about the usefulness of our policy in relaxing immigration and work permit requirements for certain grades of workers as well as professional personnel. He thinks that we may get third-rate workers and that differences in pay between local personnel and expatriate staff would lead to discontent. Of course, these dangers are inherent in any scheme of relaxing controls on entry of workers. That does, not mean that we should not try to increase the supply of workers which industry now needs and will need in increasing measure. Unless we do so, we shall bring about a sudden halt in economic expansion and I do not think the Member for Moulmein will think that that is the price that we should pay in order to avoid some dangers. I agree that these dangers exist, but they can be guarded against by other measures.

The Member's other point is that in some cases where employees are already getting very generous retirement benefits, the increase of the employer's contribution to the Central Provident Fund has not benefited them because this increased contribution by the employer offsets the gratuities payable. He thinks that this is a bad thing. I am not at all sure whether this is a bad thing. If the employer has been giving generous retirement benefits, then obviously when we are raising the level of retirement benefits, which is really what the Provident Fund contributions amount to, why should these enlightened employers be penalised by having to pay, by way of retirement benefits, amounts additional to what they already have been paying? It is one of the misfortunes or negative aspects of Singapore's labour/management relations that the good employer who makes profits is often penalised by having to pay better than average levels of pay and fringe benefits than the inefficient employer who cannot make profits and can only afford to pay low wages and provide poor working conditions to his employees. An enlightened policy on this matter would not punish the efficient employer at the expense of the inefficient one.

The Member for Punggol has made a number of useful observations on the general policy of Government. I will go a long way with him on most of what he said. But I will take issue with him on some of the points he raised. First, he asks why, instead of giving free entry to all kinds of foreign investors, we should not hire experts from abroad and use our own money

If necessary bring back our reserves from overseas - and invest it in our enterprises here and not allow foreigners to make these profits? Of course, in theory, this is all right. In practice, whom do you hire and in what industry? How do you judge whether that is the right line of industry to put your money in? Where you have investors, whether in Singapore or abroad, who are willing to put their money in whatever industry it is, either making microphones or fountain pens, these are people with experience in these lines. They think that there is an opportunity to make money. They have the expertise, the confidence, and they do it. If we do not have this expertise and we go into it - we can hire management all right; we can hire engineers - we may find that we have gone into the wrong line. We have put in a lot of money. The industry goes bankrupt. Or we may be in the right line and we may have hired the wrong people. It is not all that easy to say that so and so, because of his paper qualifications or because of his experience, should be able to manage the enterprise.

As regards the difference between the Gross Domestic Product and the Gross National Product, there is something in what he says. But I think he has not quite grasped this essential fact, that our Gross National Product, far from being smaller than our Gross Domestic Product, is, in fact, larger. This is rather technical and perhaps I can explain the relationship between the Gross Domestic Product and the Gross National Product in terms which a layman can understand. The difference is, in broad terms, made up by what foreigners earn in Singapore by way of, profits on their investments, know-how fees, technical trade-mark arrangements and so on - what they earn and take out and what Singaporeans earn by investing outside Singapore. In the case of Singapore, we get more earnings from our investments abroad than the profits we pay to foreign investors. We are rather unique in that respect among developing countries.

As regards plans to offset the deflationary impact of reduced military expenditure, what the Member for Punggol says is quite true. He says that we should have plans in which money is spent mostly on projects which do not require a lot of imported goods so that most of the money would then generate income and employment. That is the correct strategy. Secondly, he thinks that we should not raise taxes but instead borrow from abroad. I agree with this. In the event that we are faced with a rather serious deflationary impact this year, next year or the year after, the correct thing would be to run down our balances. In fact, I did hint at this possibility in my Budget speech.

The Member for Delta is not very happy about the democratic socialist content of our policies. Neither is the Member for Ulu Pandan. Both of them think that the common people should have a greater share in this prosperity. Of course, one cannot but agree with them that the common people should share in this prosperity and everybody should be as equal as possible. But, unfortunately, in this world things are not quite that way. People have to be paid according to their worth. If you are clever and hard-working and qualified in the right lines, such as a lawyer or a surgeon or an engineer, then, of course, you make more money. If all you can do is to hawk vegetables, then you cannot expect to make as much money as a surgeon or an engineer. I do not think we can improve the situation by just taxing the rich to pay the poor. Many under-developed countries have done this sort of thing and they have found to their astonishment that, far from making everybody richer, they have made everybody poorer. And the country goes into bankruptcy at an alarming rate.

I suggest to the Members for Delta and Ulu Pandan that the common people do share in this prosperity. They share in having more than 100,000 flats, whereas before they had none. They share in having better education for their children, not only primary education but also secondary and technical education. And one hopes that in the coming decade, education in our Universities will be open to more and more people who otherwise would not be able to get there. Their children will have more jobs. More or less 30,000 jobs will be created and the benefits, of course, go to the common people. Of course, the rich get richer. I will not pretend to deny that the rich do not get richer or at least some of the rich do not get richer. This again is in the nature of things. In the upswing of a boom, if you are in the right line, if you find oil or whatever it is, you are prosperous. You make a lot of money. Of course, one hopes that the rich pay taxes. We strengthen the Inland Revenue Department with what I hope will be an effective investigation bureau so that if the rich do not pay taxes, then they will suffer accordingly. But here we are placed in a rather curious situation and Members must always remember this: that we are not a closed economy. We are the fourth largest port in the world. Airlines come in. We have trading connections and banking services with all parts of the world. Therefore, this has two consequences. Firstly, if we do not pay our qualified men well, they will leave and go to other countries.

It is one of the tragedies of underdeveloped countries that they have been providing some of the best brains in technology to the rich countries. I was told by our Prime Minister, who has done some research in this matter, that one under-developed country alone- India - provides no less than 50,000 Ph.D.s in science and technology to the western world. This is an enormous brain drain. We cannot afford to do this. Being a big continent, and having several hundreds of thousands of Ph.D.s, a loss of 50,000 Ph.D.s may not be fatal to India, but we cannot afford such a brain drain. The standards of pay which we have to provide for our professionals, whether in business or in the civil service, are determined by the international rates which these people can command in the world. So this means that you have got to pay your qualified men well. If you do not pay them well in the civil service, they will leave and go into private enterprise. If private enterprise is not prepared to pay them well, they will go to other countries. If we want to improve our industry and our economy, we need these people. We have to pay for them. That is one of the constraints under which we have to work and which nullifies this egalitarian principle which social democrats like to practise.

The other aspect is just as bad. It is this. When you want to attract industries, particularly during the first stage of industrialisation, you have to get people with the know how or the entrepreneurship or the technology from the advanced countries - America, Japan, Europe and so on - and these do not have to come to Singapore. They compare Singapore with Hong Kong, Taiwan and South Korea. These are our front-line competitors.

Madam Chan Choy Siong: (In Mandarin): Sir, I would like to clarify certain points. I feel that the Minister has been stressing on the importance of providing sufficient salaries to attract highly qualified personnel, but this can be easily resolved. If we provide in our laws that if highly qualified personnel after having worked here for some time should go abroad and work, then their citizenship will be withdrawn. We would, therefore, not experience a brain drain.

Another point is that if our workers cannot enjoy the fruits of their efforts, then all I can say is that the Government's promises are empty promises.

Dr Goh Keng Swee: Mr Speaker, Sir, if we have this kind of policy, then it is unlikely that we shall be able to send anybody abroad, because once he goes abroad, he will never come back. These controls are counter-productive. They look quite simple at first sight, but they have been tried by other countries and they just would not work.

As regards paying our workers good rates of pay, may I ask the Member for Delta to compare the wage rates in Singapore with those paid in developing countries? Unfortunately, I am not in a position to give chapter and verse because these countries are often very sensitive and they do not like comparisons.

The Member for Ulu Pandan has a lot of extraordinary ideas whereby we can save hundreds of millions of dollars in our defence expenditure. It is a pity that my colleague, the Minister for Defence, is not here. The Member says that if we were to train school boys and also school girls in the gentle art of war, then we do not have to spend 31 per cent of our budget on defence. I assure him that even if we do it, we will still have to spend this amount of money. Modern war is not fought with bows and arrows. Once you have a missile system, you just pay for it. A sum of $35 million cash down, and then $10 million each year. I hope the Member will go and see the exercises which our infantry battalions put up from time to time for V.I.P.s like him.

Mr Lee Teck Him: (In Mandarin): Let me explain what I have said. I would like to tell the Minister that he has allotted a lot of money on defence. Whom are we going to fight with missiles?

Dr Goh Keng Swee: I can assure the Member for Ulu Pandan that we do not want to fight with anybody. That is why we are preparing for our defence. If we do not have any defence, then we can be sure that in no time at all we will be eaten up. As I said, the Member should see the defence exercises at the Singapore Armed Forces Training Institute. Every time he sees a soldier putting down a mortar bomb - I am told they let fly about ten mortar bombs a minute - he should remember that each bomb costs $60. And we have several dozen of these soldiers letting go with their mortars. And this is the cheapest part of our defence expenditure.

The Member for Ulu Pandan thinks that we should allow tenants of the Housing and Development Board some leeway in payment of rents. I am quite sure that my colleague, the Minister for Law and National Development, is not a heartless person, and if people really want an extension of time to pay rents, I am sure they will be allowed to do so. At the same time, if they cannot pay rent and it is obvious that they are in no position to pay rent, then they have to leave. The Housing and Development Board is not a philanthropic institution.

There have been some rather interesting suggestions about improving the agricultural and fishing sectors. The Member for Havelock and the Member for Anson have put forward some ideas about the development of animal husbandry and fishing. The Member for Anson says that we should have co-operative societies for pigs and poultry. If setting up these co-operatives means that the farmers will be better off, then why is it that the farmers have not organised them?

Mr P. Govindaswamy: They have an association, Sir. I think the association is not working well. The Government must take the initiative to form a farmers' co-operative society. In this way, the farmers can sell their produce to this society. They will therefore not suffer at the hands of the middlemen. The middleman will always sell his goods at higher prices than those of the co-operative society because he is out to make a profit. That is why the Government should encourage the formation of a farmers' co-operative society.

Dr Goh Keng Swee: The Member has greater confidence in the efficacy of Government servants than I have. I remember some years ago fishermen organised a co-operative society and they were doing quite well because that part of the fishing industry was monopolised by some middlemen. However, a storm broke out one day and their boats were swept away by the north-east monsoon. They lost their gear and their boats, and they had no money. So they went to the Government - this was before our time. At that time it was not the Finance Minister who was in charge, but the Financial Secretary, and he asked this question: "Is the storm an act of God? If it is an act of God, then the Government has no responsibility to reimburse these fishermen." Eventually, it was decided that the storm was an act of God and therefore the Government had no responsibility to pay for the loss of the fishermen's boats and gear. So the fishermen had to go to their former dealers who used to advance them money. But the dealers said. "Look, you are no longer our customers. Why should we lend you any money?" That was the sad end of the fishing co-operative.

My own belief is that so long as there is competition among middlemen, then the farmers, whether they are selling pigs or poultry, will get the best prices. But then Singapore is such a small place. Our communications are so excellent that it is not possible for middlemen to monopolise and have a grip on the farmers.

As regards the fishing industry, here again I really wonder why, if this is such a good proposition, it has not flourished. Obviously there must be some snag in it, otherwise the people will go and catch fish and make money. Why have they not done so? I am not sure what the answer is, but I am quite sure the solution is not for the Government to go into something which private enterprise is not willing to engage in. I suspect what will happen is that, if, say, Government were to start a fishing fleet as they have started the mercantile marine fleet, it would be very difficult to get our young men to go out in these fishing boats because they like shore jobs. I remember talking to Dr Tham Ah Kow about getting jobs for boys on fishing vessels. After a lot of work, he managed to get some of our boys on this fishing fleet. But after one journey, they all packed up and said, "We have had enough of it." So obviously this is not an industry on which we should risk the taxpayer's money.

The Member for Jurong raised a point about health services for aided-school teachers. My colleague, the Minister for Education, will look into what he has said. I remember vaguely that this subject was raised some months ago, and we came to a decision; but I cannot recollect what it was.

Finally, the Member for Bras Basah made some interesting contribution to the debate. He is quite correct, of course, in saying that the increase in pioneer industries in 1969 was due to the growth of labour-intensive industries, A lot of the new electronic firms were established in the last one and a half years. This accounted for the very substantial increase in the number of workers in pioneer industries.

He is also right in saying that the growth of cargo has been greatest in the oil business. This is accounted for by the rapid expansion in oil refineries in the Republic, as oil seems to be and probably is now the No. I entrepot trade product. I also agree with him that health services in schools should be improved. In fact, the Minister for Education, the Minister for Health, and I have agreed that we should provide more doctors and more dentists for school children. Of course, one hopes that this service will improve as time goes on.

The Member also raised the point about 4,800 skilled and semi-skilled workers in the unemployment register of the Ministry of Labour. I suspect that these 4,800 names are really bogus so far as unemployment goes. They are either not skilled, or they are not unemployed.

An hon. Member: Perhaps they are looking for better jobs.

Dr Goh Keng Swee: Yes, they are probably looking for better jobs. It is either that, or they are really lazy, or too choosey. There is no reason for them to be unemployed.

As for industrial accidents. I certainly agree with what the Member has said. This is, of course, the problem of my colleague, the Minister for Labour. The Minister wants more staff, more expertise, or whatever it is, to handle this subject. This problem is of great concern to everybody, because having trained workers at great expense and then just to have them put out of action through accidents is, I think, a monstrous waste of resources which we cannot afford.

Question put, and agreed to.

Resolved,

That Parliament approves the financial policy of the Government for the financial year 1st April, 1970 to 31st March, 1971.