ANNUAL BUDGET STATEMENT

Order read for resumption of debate on Question [8th March, 1971], "That Parliament approves the financial policy of the Government for the financial year 1st April, 1971 to 31st March, 1972.". [Minister for Finance].

Question again proposed.

2.32 p.m.

Mr Low Yong Nguan (Crawford): (In Mandarin): Mr Speaker, Sir, first of all, I wish to thank the new Minister for Finance because in his first budget presented to this House, there is no increase in the rates of taxation nor are there any new taxes to be imposed. However, this does not mean that I fully endorse the measures implemented in the last financial year and those to be implemented in the new financial year. On the contrary, I would like to take this opportunity to express my views on certain matters which are not altogether on all fours with those of the Government.

Mr Speaker, Sir, as a small nation, Singapore is subject to the influence of many extraneous factors which are beyond our control. These factors often affect the decisions that we have to make. The political and economic developments in our neighbouring countries will always have a certain bearing and reaction in our country. Therefore, whatever we decide and do, we must not overlook all these extraneous factors. To do otherwise would be most unwise on our part.

Mr Speaker, Sir, the Minister for Finance has resorted to a mass of statistics to show how satisfactory our economic growth has been over recent years. I am not an economist, nor am I prepared to degrade myself into becoming a theorist and, in an air-conditioned room, talk about the poverty outside. My view is that all this talk of economic growth and progress will be entirely meaningless if they do not bring real benefits and a better life for the general public and ensure a more equitable distribution of wealth. If our progress and economic growth bring benefits only to a small group of people and make the few who are rich richer, that will generate social discontent and lead to a latent crisis.

The Minister for Finance says that in recent years the prices of commodities in our country have been quite stable and that there has been no appreciable increase in the cost of living. Sir, I cannot agree with him on this. As a matter of fact, at the very moment when this budget is being presented to this House, there are moves to standardise or adjust commodity prices for various reasons. These so-called price standardisation and adjustments are nothing more than pronounced price increases. Unless we adopt the attitude of an ostrich, I say that the so-called stabilised prices are not borne out by facts. I hope the Government will look into this matter and not avoid it and shirk its responsibility, because this matter concerns the livelihood of the people in the street. They cannot remain indifferent. The present trend in price increases should be checked and proper attention should be given to it by the Government.

Mr Speaker, Sir, the budget for this year is more or less similar to that of last year and the following points have been stressed. First, the creation of a favourable climate to attract foreign investments. Secondly, the establishment of a sound infrastructure for an industrialised state. Thirdly, the training of much needed personnel, particularly middle level technical and managerial personnel for our industrialisation. Fourthly, the promotion of tourism as well as urban renewal and other development plans. On the face of it, there is nothing wrong with all these measures. For example, the creation of a favourable investment climate is conducive to our economic development and security. The more international consortiums we can attract into our country, the greater will be our ability to create employment opportunities, develop higher technology and promote economic growth. We will be able to develop our potential to attract even more investors so as to make Singapore the investors' paradise. They come here not for sentimental reasons. Furthermore, in their own interest, they will ensure that we are safe and continue to maintain this stability so as to ensure that their investments are safe and have good prospects. I would, however, remind the Government not to overlook the support and assistance to be given to local capital. I feel there is a great deal of capital which can be tapped locally. Many locally financed industries have, in fact, been very successful in recent years. I would like to give one example. The Far East Shipbuilding Industries in Jurong is a business enterprise financed solely by local capital, which has recently entered into an agreement with an American company for technical co-operation. This shipyard has been able to win multi-million dollar contracts for shipbuilding projects. The Government has the duty to assist this kind of local entrepreneurs with ability and foresight in the industrial field, because the moment other countries are able to offer foreign investors better terms, they will not remain in Singapore for sentimental reasons. They do not owe us a living. Therefore, in the circumstances, it will be short-sighted to ignore the exploitation and development of the potential of local capital.

In my view, the assistance which must be given to local capital and the attraction of foreign capital into Singapore are complementary to each other. There is nothing inconsistent about that. I would like to give yet another example. Jurong Shipyard Limited, a joint venture between Japanese and local capital, and its sister company, Jurong Shipbuilders Limited - now under construction - are dependent upon extensive local supporting industries to be successful. Recently new enterprises have been formed to provide con sultative and construction services to the setting up of new industries, which also need extensive supporting industries. So we should utilise every opportunity to utilise local capital to develop such supporting industries. In this way we will be able to increase employment opportunities and upgrade our technological skill level. I would like to express the hope that the Government's planning and efforts to train industrial, technical, managerial and other personnel will meet with the success that they deserve in order to fulfil the needs of our industries.

The Minister for Finance has also made reference to tourism. It is a sad thing to see that the Tourist Promotion Board, which has been charged with the duty of promoting tourism, has seen fit to send overseas as a publicity move some temple mediums who actually represent a backward and superstitious era. Recently the Tourist Promotion Board has even thought of erecting some kind of wax museum to commemorate the historical events of the shameful deeds and atrocities of the Japanese militarists in Singapore. If members of the Tourist Promotion Board are not capable of better ideas than this or of bringing about a better publicity campaign, they will have to face the condemnation of the people and do a lot of explanation. I hope the Government will unreservedly turn down all these kinds of publicity stunts and proposals which are an insult to the dignity of our people. Mr Speaker, Sir, I do not deny that the promotion of tourism is important to our economic growth. But I think we have many other better ways of doing it, such as the establishment of bird parks and large zoos, and the publicising of our multi-cultural and multi-religious features, and many other aspects of local life which will help make tourism a success. We have indeed a lot to learn from more advanced countries like Japan and Taiwan.

I would like to turn now to the Minister's remarks on urban renewal. My constituency is the first to be affected by urban renewal. In this respect, the people in my constituency have made considerable sacrifices for national construction. But does the Palembang Housing Estate - a new housing estate in my constituency - meet the objectives behind the urban renewal scheme? If a survey is made amongst the flat dwellers and the traders there, they will say that this housing estate is far from satisfactory. They complain of inconvenience in traffic and poor designs of the flats, as a result of which tourists are not attracted there. Because of this, business is very poor in this area. Mind you, Sir, these businessmen have to pay many times the rent that they used to pay before urban renewal. The people living there find it rather inconvenient and, particularly in times of emergency, even police vehicles and ambulances find it difficult to go in and out of the estate. Is this not contrary to the expectations that we envisage in the renewal plan?

Sir, we have to draw a lesson from this experience, i.e., a scheme or a policy may be very good in principle, but when it is executed, because the so-called experts in charge of the scheme are unaware of the local conditions and have not taken local factors into account, the actual result is far from ideal or as expected. It is not too late for us to take remedial action in respect of future schemes and in their execution. We must construct buildings which are in keeping with the requirements of the local people. In this respect, Sir, I am sure the Citizens' Consultative Committee in each constituency will be able to contribute their views to assist the experts.

Another aspect about urban renewal is the sale of land and the identity of the investors. On this point, my former Parliamentary colleague, Mr Lee Teck Him, made some worthwhile contributions in last year's debate. According to present plans, we sell plots of land by open tenders and we provide the best opportunities and facilities for the rich developers to develop the land. But the small businessmen affected by clearance exercises in urban renewal do not get any concessions or preference. I feel this is most unwise. Many of the small and medium businessmen affected by urban renewal in fact are in a position to pool their resources and participate in urban renewal projects. I know of such a plan and of people not only in my own constituency but also in two other constituencies with such plans. No doubt, when they pool their resources, they are able to provide a sizable amount of local capital for development purposes. We should support such schemes to invest local capital in the development of our country and should also be of help to them. If we do so, we will not be accused of neglecting them and favouring the richer developers many of whom are foreign capitalists.

Sir, a certain trade organisation has expressed its willingness to participate in such a development scheme. But a year or more has elapsed and there has been no answer from the Government to the proposal. If I compare the treatment given to local people and that given to an American electronics company which has been given all the facilities required in the setting up of the industry within six weeks, I feel hurt and ashamed of the "efficiency" of the Government. There are two possible explanations for this. One explanation is that we are totally uninterested in the investment of local capital and will not give it any encouragement. The other explanation is that we are over-interested in foreign capital which is interested in us because we can provide it with cheap labour. We are afraid that if we do not welcome foreign investors enthusiastically, they will hesitate to come here. I do not think it is the intended policy of our intelligent and honourable Minister for Law and National Development. But I do not appreciate the doings of some experts in his Ministry.

Sir, talking about experts brings me to another thought about the trend in our midst in recent years. Many people have faith in these experts as though they can provide them with all the panaceas in the world. I would remind those concerned that only those who are really aware of the basic requirements of life of our people are fit to propose plans for reform. Those scholars and experts who sit in air-conditioned rooms and talk about the hot weather and the plight of the hungry people outside must leave their air-conditioned rooms if they wish to understand our local conditions and get the views of the people at grass-root level before they can make any proposals or plans worthy of consideration.

Sir, when I started speaking I mentioned the great effect of extraneous factors on us. I would like to come back to this subject. The Minister for Finance has also concurred on this point. He has particularly emphasised the potential influence of Japan as an industrial power on the economic development of this region. He shows very good understanding in this connection. But no word has been mentioned about another great power in Asia - I refer to the People's Republic of China. Of course, the People's Republic of China, with her great land and human resources, will have to discharge her political and military obligations as a super power in the international arena. Sir, I have in this House requested the Government to reappraise and readjust the relations that we have with China, and I would like to urge the Government again to initiate positive and correct steps towards this end. There is no denying that China's joining the United Nations depends on whether she will get any benefit from such a move. Nobody can stop China from expanding her influence in South-east Asia. If our policy runs contrary to this inevitable trend, then it will be of no benefit to us. China may become a great market for the primary produce of this region. This will be of benefit to Singapore. Many people may feel that it would be unwise for us to be too friendly with China because the majority of the population here are of Chinese origin. I do not agree with this view. I was born and brought up in Singapore. If Singapore fails, I have no other place to turn to. So nobody can accuse me of speaking for Peking. I may not endorse the policies that are being implemented in that country. At the same time, I do not believe that China will come to the assistance of Singapore simply because it is largely populated with people of Chinese origin when we get into difficulties, unless China can benefit from such assistance given. My point is that after years of hard struggle, China will now assert her rights in the international arena and discharge her obligations as a great power and look after her own interests and strengthen her influence in this region. We cannot overlook this important foreign factor. We must take the initiative and make preparations for any future possible development.

Mr Speaker, Sir, another extraneous political factor which deserves our attention is the co-operation we must have with our neighbouring countries. At the present stage, we hope to promote co-operation with our neighbours through regional mutual benefit schemes. But have the principles and objectives of this co-operation been defined? Are they mutually acceptable to both? We must not forget that any political development in the peninsula to the north of us will definitely affect our small island state. Have we honestly sought for opportunities for co-operation with our neighbour on a mutually acceptable basis and tried to sink our differences while maintaining concord and come to some kind of co-operative arrangements which are mutually beneficial for our two peoples?

Sir, we also cannot overlook the development of racial politics in the neighbouring countries which will have a certain reaction from us. As we believe in multi-racialism, our reaction to such development must be rational and be based on our accepted principles of multi-racialism. I hope our people, particularly the press, will avoid being dragged into expressing some kind of chauvinistic feelings. Certain of our local newspapers have a tendency to whip up chauvinistic feelings, perhaps unwittingly or for business reasons. I do not want to over-stress this point. It will be dangerous. Sir, I am not very optimistic about the development of our relationship with neighbouring countries. In fact, I can see that some dark clouds are already looming over the distant horizon.

Mr Speaker, Sir, our Government is a socialist government. The interests of the workers must be protected. I welcome the Government's intention to strengthen the Factory Inspectorate in order to promote the safety of the workers. In fact, this should have been done long ago. The Chief Inspector of Factories has been able to work under the most unfavourable and strenuous conditions in the past and we should give him the commendation that is due.

Talking about industrial safety brings me to another matter. When we relate the story of our industrialisation success, we must not forget to pay a tribute to the workers at the workshop level, because without their sacrifices and their efforts, we will not have attained our present position. I have some rough statistics to prove that those who are standing in the forefront of industrialisation come mainly from those educated in their own mother tongue. This is a great tribute that we must pay to education in the mother tongue. Through education in the mother tongue, we have been able to bring up a generation of patriotic and hard-working industrial workers who are responsible for the happiness and well-being of our country. Their contribution to our country is too great to be denied. If anybody tries to deny this, it will be a great insult to our republic.

Mr Speaker, Sir, Singapore is a young country. Our youths are a source of great strength. We must spare no effort to tap this source. However, history shows that any society of people who only care to enjoy life and nothing else will, in the end, become a soulless one and collapse. More than a decade ago the People's Action Party was able to provide our youth with the right objective in life - to contribute towards nation building. The situation today is quite different from that in the past. Our Government must not forget to guide our youths along the proper path to understand and cultivate the right attitude in life, and to inculcate in them the correct ideals about a new life and not ask them to be docile fancy fish. I feel it is most regrettable that the Government has mentioned nothing about this aspect. It must give active consideration to the problems of youths in Singapore.

Mr Speaker, Sir, the people in this region may be classified into two groups -- the forward-looking modernisers and the backward traditionalists. I believe that we today belong to the first category, and we want to be treated as such. We have to be prepared, within the shortest possible time, for the worst situation that may occur. Our economic policy must be geared along these lines. Our success depends on our ability to bring about a more just and more fair society for the majority of our people, and not work on statistics alone. Given proper supervision and time to our present Government and with the established spirit of PAP leadership courageously wiping out all the opportunists in Singapore at all levels, there is no reason why we cannot succeed.

3.04 p.m.

Mr Tay Boon Too (Paya Lebar): (In Mandarin): Mr Speaker, Sir, when the Minister for Finance announced in the House on the 8th of this month that Singapore was not going to have any new taxes or increase in taxes in the coming financial year, all the people in Singapore received the news with great joy. Indeed, he brought tremendous news to the people of Singapore. This has stimulated a spirit of self-reliance and perseverance among the people of Singapore and has encouraged them to work even harder.

Among the countries which have become independent after the Second World War, very few of them have been fortunate enough to be able to afford such a painless budget as ours. If we examine the reasons for our success, we will find that in the last 10 years or so, our Government has put up a creditable performance. It has established a clean and efficient government and has helped the people of Singapore in overcoming their difficulties, in creating a new environment, and in encouraging them to strive for a better future. On the other hand, the people of Singapore have worked very hard and have shown a spirit of endeavour and perseverance. This surely must go down in history as a great performance.

Mr Speaker, Sir, Singapore has progressed from strength to strength for many years now. We have received news of one success after another. If we look at the newly emergent countries, we will find that many of them, especially in the Sixties, faced chaos and experienced great disappointment after their independence. Only the people of Singapore can "thumbs up" and say that in the last 10 years they have surmounted their difficulties. They are approaching an even brighter and glorious future. In the last few years, they have had the benefit of painless budgets which have brought honour to our country. Despite this, many people have voiced their discontent. What is the reason for this? There must be a reason. As the Chinese saying goes, "There can be no wave without the wind." People in the lower income group, especially the wage-earners, have to draw up their household budget too. Of course, their budget is not comparable to the momentous one for the country drawn up by the Minister for Finance. The people, on the whole, are not concerned with development projects as such. They are not concerned so much with the increase of taxes or new tax rates because their household budget is based on the rise or fall of the general price level. A small number of unscrupulous merchants have recently raised the prices of many goods without good reasons. This has caused great hardships to the people. This is even worse than an increase in taxes. It is a most distressing thing to witness. What is worse is that these unscrupulous merchants have put the blame squarely on the Government.

Mr Speaker, Sir, it is a fact that prices have increased tremendously in the last few years. The increase in the price level has been a general one, including prices for all the daily necessities: for example, tinned food, fish, vegetables, bread and so on. Even bus fares have gone up! There is indeed a general increase in the price level. Unscrupulous merchants have raised prices under the guise of price adjustments, but price adjustments are equivalent to price in-increases. We have never yet seen price adjustments leading to a downward revision of prices. It is only now that I understand price adjustments to be synonymous with price increases. It is a new term for price increases. Nowadays we often hear that this or that price must be adjusted, but we have not heard that the employers are going to adjust the wages of their workers. Let us take, for example, the salaries of teachers. The previous Minister for Education promised the teachers salary adjustments, but nothing has happened although the relevant bodies submitted their recommendations six months ago. As the Chinese saying goes, "We can only hear the footsteps on the staircase, but we never see the people coming down." If we do not adjust the wages of the working class in the face of the general increase in the price level, this will lead to a fall in their income. It is for this reason that I would like to represent the people in my constituency and thank the Minister for Finance who has brought us this good news of a painless budget. I would also like to express the hope that a permanent price control committee will be set up to prevent unscrupulous merchants from raising prices without valid reasons.

3.15 p.m.

Mr Sia Khoon Seong (Moulmein): Mr Speaker, Sir, no piece of information was more welcome to the people of Singapore than the declaration by the Minister for Finance in this House on the 8th March that no new taxation measures, either directly or indirectly, would be introduced in the ensuing financial year. The fact that the current needs for both ordinary and development expenditures can be met from the natural increase in the existing tax yields as a result of the rapid economic growth is eloquent testimony to the soundness and foresight of the economic planning and expansion programmes laid down by his predecessor.

I note that the local newspapers have popularly termed the budget a painless one. That it would bring about "no harm" or "unhappiness" to the man in the street is an undeniable fact. Nonetheless, affluent employers have more cause to celebrate by reason of the tremendously "good cheer" the budget gave to them.

Apart from the fact that no new taxes will be imposed on the excessively huge profits that the employers make, they are now to receive a new tax relief in that Government will use the proceeds of the existing payroll tax to defray their liability in respect of the "make-up" pay of their employees doing national service, and to reimburse their expenses in operating approved training schemes or apprenticeship schemes for their employees. Such tax relief, according to the Finance Minister, is to lighten the so-called burden of the employers in these two areas.

The questions that immediately strike my mind are (1) What is this so-called burden of the employers for which the Minister has such great solicitude? (2) Should the Government lighten this so-called burden of the employers with public funds that may be better utilised for some other more worthy purposes? I cannot emphasise too strongly that every tax relief is tantamount to a payment from the public funds, since the principal source of public funds is taxation in one form or other.

The Finance Minister has proposed that employers are entitled to use public funds to pay part of their workers' wages for which they are liable under the National Service Act. It appears that workers are expected, as a matter of fact, to sacrifice two or three years of their youth in national service. But when it comes to the turn of employers to make a bit of sacrifice, it appears that they are a different breed entirely, and so are not governed by the same considerations of national interest as their less fortunate employees. It is of immaterial consequence to such employers that the whole and sole purpose of national service is not for the martial glory of Singapore but for its defence and protection as a sovereign political entity and the protection of the lives and property of the people of Singapore. I would have thought that employers stood to lose most if Singapore had no credible defence system to deter any would-be aggressor. But the mind of employers, obviously, functions in a different manner. They can perceive no contradiction in supporting national service when only employees are affected, and in agitating against the burden of make-up pay for their workers doing national service.

I should think that no one in this House, least of all the representatives of employers, expects employers to take the lead in expressing and proving their patriotism. But their churlish reaction to the slight obligation they must incur, by way of contributions towards the defence of the country, comes as a definite surprise. The workers are making great personal sacrifices by shouldering the burden of national service. Apart from the sentiments of patriotism that cause them to respond with enthusiasm to the call of service to their country, they have no property or wealth of their own to defend. On the other hand, if something should happen to Singapore, employers have a lot to lose apart from their valuable lives. They apparently want to have their cake and eat it too. The petty attitude of employers is most ridiculous, considering that their so-called burden under the National Service Act is too insignificant to talk about. The amount of money that an employer has to give by way of the make-up pay is probably negligible in relation to his total profits or assets. Employers have no reason to grudge the payment of insurance premium in respect of their property. In fact, they consider it good and sound business practice to have such insurance cover. It is, therefore, extremely unreasonable for them to grudge the cost of national service which is, after all, the best and most comprehensive form of insurance that they can obtain for their property, their livelihood, or profit-making enterprises.

I come now to the question of training schemes for the improvement of skills of workers and the offsetting of their training expenses against their payroll tax. I find it difficult to believe, by any stretch of imagination, that anyone has the gall to claim that any scheme to improve the skills of workers is more a burden than a benefit to their employers. All training schemes are designed for one primary objective - to improve the skills and efficiency of workers so that they may be able to contribute more effectively to the profit-making capacity of their employers. Employers to enable their workers to acquire greater skills for their own good do not establish training schemes. Granted that it is true the Minister for Finance might have been induced to allow such tax relief by reason of the undertaking of a few foreign investors to train more workers than required under their own training schemes, but it will be most unfair for such employers, who are co-operating with the Government, to bear the brunt of training more workers than is necessary. This inducement to industrialists to train workers is not desirable as long as there is this problem of a vicious cycle of a consequent shortage of skilled workers resulting from the practice of poaching of such workers. The solution proposed by the Minister is not necessarily the most equitable one.

The solution of allowing employers tax relief against their payroll tax liability for the purpose of increasing the supply of skilled workers is a negative approach since it entails the use of public funds. It must not be forgotten that while Singapore stands to benefit from a greater supply of skilled workers, the employers themselves benefit directly from it. In fact, they have the first call upon the services of the skilled workers in such increased supply. A positive approach would be to apportion the cost of training extra workers among all employers or those employers without any approved training schemes.

Workers have done more than their share in Singapore's industrialisation programme. Seldom does a day pass by without a report of a worker being involved in an industrial accident, sometimes fatal. Whether he dies, or is permanently or temporarily incapacitated, he and his dependants can only expect miserable compensation under the Outdated Workmen's Compensation Ordinance. Even then, some employers try to wriggle out of their liability under it.

I would have thought that if the Government is embarrassed by the sum of money in the coffers of the Treasury accumulated from the payroll tax, some arrangement could be made to dispose of it in a constructive manner, such as to help those persons who require assistance most, and not give employers the opportunity to use the savings provided by the tax relief to employ more accountants to think of more ways to evade tax. What I have in mind is the channelling of the proceeds of the payroll tax into a special fund to supplement or enhance the payments under the Workmen's Compensation Ordinance. The crucial question is, who needs tax relief most? Is it the employers, who are only concerned with the extra sayings from tax, or the employees, who are concerned with their livelihood and, perhaps, their very own lives?

While incentives have to be offered to foreign investors to help our industrialisation programme succeed, it does not mean that we have to pamper them, as they stand to benefit more from the industrialisation programme. Pampering of employers is more likely to create dissatisfaction than promote contentment among their own workers. It is meaningless for workers to regard themselves as contributors to Singapore's future progress and prosperity when their employers make it a point to taunt them to their faces with the laws of Singapore which, they say, preclude the workers from having a fair share of the fruits of the prosperity to which they have greatly contributed. The problem today is not only one of simply educating our workers and trade unions to understand the realities of our economic life, as suggested by the Finance Minister, but also the much more difficult one of educating some of our unenlightened employers to realise the folly of their persistent refusal to see beyond their nose that their true interest also lies in the fair treatment of their workers.

A case in point is the current industrial dispute between the Singapore Bank Employees' Union and the various banking corporations. With the exception of the Asia Commercial Bank and the Far Eastern Bank, all the other banks, both foreign and local, are exploiting the provisions of the Employment Act by blackmailing the Singapore Bank Employees' Union into signing away their right to share in the mounting profits for the next five years. Everyone knows that there has been an enormous increase in the turnover, volume and profitability of the banking business over the last few years. This increase has resulted partly from the efforts of the Government to develop Singapore and partly from the co-operation of the workers. It is not solely due to the genius of the banking management. The Union is merely asking that the additional month's bonus offered to bank employees be reviewed annually by the banks in accordance with the continuing profitability or otherwise of banking operations in Singapore. The concerted response of the banks, both foreign and local, is the offer of a once-and-for-all payment equivalent to an additional month's salary, on condition that the union signs a "no-change" collective agreement for the next five years. This is tantamount to blackmailing the Union into signing away the rights of the bank employees in Singapore to have a share in the profits over the next five years.

Mr Speaker, Sir, you may be aware that the trade unions were assured in 1968 that the increase in the maximum duration of collective agreements from three to five years was intended to ensure wage stability in the pioneer industries. We had assumed, therefore, that old established institutions like the banks would not seek to abuse the Employment Act by taking full advantage of the provision intended for pioneer industries. Local employers generally have up to now been much more ready than foreign employers to come to profit-sharing arrangements with their employees. In the recent past, the foreign banks have managed to infect several local banks also with the same virus of industrial blackmail.

The "Lever" virus, also known as the `Gould" virus, or the "Rattray" virus, which manifests itself in an obstinate refusal to allow bank employees even a minimal share in the exceptional profits the banks have been making in the last few years from Singapore's economic growth and development, has also spread to several local banks. The result is that a united front has been established between the presidents of the Chinese Chamber of Commerce and the International Chamber of Commerce.

For employers such as those Shylock bankers who construe the Employment Act as entitling them to their pound of their employees' flesh, the Government should not hesitate to exact from them a similar and appropriate penalty for their avarice. Perhaps the time has come for the Government to consider making the following amendments to the present labour legislation:

(1) Reducing the maximum duration of collective agreements from five years to three years in non-pioneer industries and enterprises;

(2) Raising the maximum limit for the negotiability of bonus payments from one month's salary to a more realistic sum, particularly in the case of undertakings which, such as the banks, have made exceptional profits; and

(3) Raising the employers' contributions under the Central Provident Fund Ordinance from the present 10 per cent to 15 per cent and reducing the workers' contributions from the present 10 per cent to 5 per cent, thus increasing the present take-home pay of the workers by 5 per cent. This may be termed a "built-in" wage increase of 5 per cent all round.

3.32 p.m

Dr Augustine H. H. Tan (Whampoa): Mr Speaker, Sir, the Minister for Finance has given us welcome news in his well-presented budget. Economically, we have done better than we expected and we can approach the coming year with cautious optimism. Curiously, however, our performance over the last three years of some 15 per cent of growth a year in the Gross Domestic Product, one of the highest growth rates in the world, has been described by many commentators as a mini-boom. I wonder what a regular or a maxi-boom would look like.

Let me comment first on the Minister's proposal to formulate an optimum investment policy. He has rightly emphasized two elements; firstly, the attention to selectivity in promoting new industries, where priority is to be given to industries with higher technology, established world markets, and the ability to utilize higher grades of skilled labour. Secondly, the Minister raised the important question of training skilled labour. Contrary to the view of my colleague, the Member for Moulmein, I think that the proposed use of the payroll tax is an excellent idea. The payroll tax itself is an anomaly in a situation where we are trying to create employment, so that the optimum policy is a subsidy rather than a tax on the use of labour. The use of the tax proceeds to finance the training of skilled labour, therefore, makes economic sense. In addition to the specific proposals for training labour outlined by the Minister, consideration should be given to proper vocational guidance in schools, and at the Ministry of Defence for national servicemen who are about to be discharged. I am told that one of the most keenly sought jobs, for example, is that of hotel toilet-attendants who can expect good tips by turning on taps and handing out towels. Now I cannot imagine how productivity can increase in such occupations! We have got to get our young people used to the idea of forgoing some earnings during a training period of two to three years, but with the expectation of a higher earnings profile later. The only way to induce such a sense of the long-term is to provide vocational guidance, where lectures are given on different career prospects.

In addition to the two elements of industrial selection and labour training mentioned by the Minister, I would advocate attention to six other factors in framing an optimum investment policy: First of all is the nurturing of local entrepreneurship. As I have indicated on another occasion, our emphasis on export orientation poses a number of challenges to our entrepreneurs. In the first place, an enterprise has to be efficient in order to compete successfully with foreign goods in terms of price and quality. Secondly, to export success-fully, entrepreneurs must acquire the marketing techniques of advertising, trade missions and exhibitions abroad.

The foreign investors come in with a ready technology, managerial capability, and well-established marketing channels abroad. Moreover, the kinds of foreign investment we have been getting lately are large. Indeed, the recent amendment to the Economic Expansion Act favours the bigger-sized establishments, quite rightly, from our economy's standpoint. However, we should recognise that the local entrepreneur is put at a relative disadvantage. He has limited access to technology, his concept of organisation is relatively primitive, his capital resources are rather slender, and he does not have the established marketing channels abroad. A purely nationalistic reaction would be to close the doors to foreign investment and adopt an import-substitution policy. This would, however, be a tremendous disaster to Singapore. The key to full employment and higher standards of living in our situation lies in our present open-door policy to both trade and foreign investment. But from a long-term point of view, it is desirable that we try to nurture a corps of local entrepreneurs. This can best be done by, first of all, helping those local industries which are thriving and which have potential for expansion to secure better technology and organisation. There is a distressing propensity on the part of the Development Bank of Singapore and the Light Industries Services to waste time, money and effort in attempting to rescue industries which are incurable.

I have also advocated more credit availability to our local industries and I note with approval the provision of an additional $96 million to the Development Bank of Singapore. Government should also help local industries in learning marketing techniques, promote mergers of existing concerns into bigger and more efficient establishments, and help local industrialists to identify worthwhile investment opportunities.

The second factor is what I call the avoidance of wage distortions in the economy. In a situation of rapid industrialization, wage patterns tend to get grossly distorted unless there is proper meshing of supply and demand. Even if the general policy of wage restraint is effective, there can be considerable wage movements within the given scales brought about by the mobility of labour and the variability of entry points. There must, therefore, be a national manpower co-ordinating body monitoring wage movements, checking labour supply developments, and attempting to synchronise with demand for various types of skills. I have argued at Economic Development Board meetings for such a body, since we can assemble the information on projects in the pipe-lines, and we can require prospective investors to indicate the type and the volume of skills required.

Our policy with regard to wage increases has been that they should be tied to productivity increases. The problem of how to implement the idea fairly is still being worked out. Hopefully, the reorganisation of the National Productivity Centre should help in this direction. I should emphasize, though, that the avoidance of wage distortions is a macro-problem and takes precedence over intra- and inter-industry wage adjustments.

Mr Speaker, Sir, I come now to the third factor, and that is, attention to the cost of living. Singapore is probably the envy of other countries since our cost of living has been exceptionally slow in rising. However, we cannot expect this happy state of affairs to last much longer as inflation in other countries is bound to have its impact on us in due course, because we have such an open economy. Moreover, as an academic colleague of mine has rightly pointed out, we are still using the budget weights of 1960! Since then, our per capita income has more than doubled. As people's incomes rise, the proportions of expenditures spent on food, clothing, housing and other items change, with greater weight being assignable to more luxury-type goods. We need, therefore, to update the weights used in the construction of our cost-of-living index. We can rightly demand sacrifices of our workers in terms of moderating their demands for wage increases but, at the same time, they must not be made to sacrifice some of their real wages through inflation, correctly measured. Ultimately, the success or failure of our development efforts depends upon the exertions of our workers; it goes without saying that they are entitled to a fair return.

I would now like to talk about the fourth factor in our optimum investment policy. Here I will put it as the avoidance of protection measures. I note with alarm the almost casual note inserted by the Minister at the conclusion of his budget speech, where he mentioned that protection for some industries at their early stages of implementation may be considered. I hope this will not be the case as protection via tariffs and quotas is counter-productive in the context of our small economy. Let me emphasize once again what I have said on other occasions, that the real argument for protection is for some kind of subsidy for labour training or marketing or organisation. Protection itself tends to create inefficiency and unhealthy dependence on the small domestic market.

The fifth factor concerns the quality of our institutions. In the decade of the Sixties, Government did much by way of the economic infrastructure where, in addition to physical facilities for investors, services were extended from new institutions like the Economic Development Board, the Development Bank of Singapore, the Singapore Institute of Standards and Industrial Research, and so on. In the Seventies, we need careful evaluation of the effecttiveness of these institutions. One or two are, I suspect, white elephants of an expensive kind. While they undoubtedly have served a purpose in our overall investment promotion efforts, we need to ensure that the services promised to the investors materialize effectively. In many cases, there is a need to upgrade the quality of the professional staff. As our economy grows more sophisticated, the kinds of manpower used in monitoring and servicing industry must have corresponding technical expertise. I would hope, therefore, that adequate attention will be paid to the quality of our institutions, from the civil service down to the statutory bodies.

The sixth factor is the control of speculative capital. Part of the blame for the escalation of housing costs must be assigned to the influx of what is known as `hot' money, that is, refugee capital from countries suffering political and economic disturbances. Real estate is a natural haven for such capital. Government should look into the means of controlling such speculative capital as otherwise the distortions created in our economy can be very severe.

Mr Speaker, Sir, next I would like to comment on our expenditure on social services. The Budget provides for only a 7.6 per cent increase in this item in the Ordinary Estimates. However, this niggardliness is counter-balanced by a substantial increase in the Development Estimates, giving an overall increase of over 17 per cent for the social sector. This perhaps should have been brought out in the Minister's presentation.

Looking ahead, I would think that it is time that we thought in terms of a modern social welfare programme incorporating the more positive features of such schemes from the advanced countries. Given our present rate of economic development, our Gross Domestic Product will double in five years and quadruple in 10 years. A more modest rate of growth of 10 per cent would give us a doubling in seven years and a quadrupling in 14 to 15 years. In other words, although we cannot yet afford the kinds of welfare programme available in the more advanced countries now, we shall be able to do so in 10 to 15 years' time if we can keep up our present momentum of economic development. For the present, we should concentrate on the quality aspect of our social projects. However, we should never lose sight of our socialist goals of equality of opportunity and a fair share for all. Today we rightly emphasize the need for economic efficiency, as reflected in our slogan: from each his economic best to each his economic worth. The time should come when we accord each person the opportunity for his optimal development, demand of him not only his economic but his social best as well, and compensate him for his economic and social worth. Our present concern for a clean environment and the call for gracious living is a harbinger of such things to come. As we become more affluent, the cultural and social aspects of life should assume due importance alongside the purely economic.

Sir, let me now go on to comment on the development of tourism in Singapore. As the Minister has pointed out, earnings from tourism constitute about 5 per cent of our Gross Domestic Product. The resources which have been invested in the industry are already considerable if one takes into account not only hotels but airport facilities, night-clubs and public utilities. Even more resources will be devoted, as can he seen in the airport expansion plans and the Sentosa development project.

I think it is time we paused to examine two important questions. The first is an economic one, namely, what is the optimal degree of development of the tourist industry? In other words, how many visitors can we optimally accommodate before the additional return to our dollar invested becomes negligible or less than economic? We should study carefully countries or states with tourism as a major industry. I feel that beyond a point, the strain on the infrastructure, in terms of demand for utilities, communications and transport becomes all too evident. The costs of providing such facilities will undoubtedly rise, which, in addition to the rise in the cost of personal services, means a rise in the cost of living. Furthermore, the industry is one which is particularly vulnerable to social and political disturbances - visitors may be disinclined to come here if there is trouble in neighbouring countries.

The other question is a cultural one. So far, our attitude seems to be that virtually anything is tolerable, provided it helps bring in the tourists. On the one hand, we have institutions which frown even on a-go-go types of dancing, and, on the other, in the name of tourism, we allow the importation of the crasser types of night-club shows from western countries at great expense. I am told that more locals than tourists frequent such night-spots. Of more serious concern to us is the possible cynical reaction of our youth to the apparent adoption of double-standards in our approach to cultural matters. Now, I am not arguing for a puritanical approach to such things; rather, I am appealing for consistent standards to be applied.

Mr Speaker, Sir, I would now like to touch upon the problem of urban renewal. I am concerned here about two things, one, the uprooting of business and, two, the question of adequate compensation. Many of the small businesses depend on the location and the goodwill built up among the neighbouring clientele. I would expect severe economic difficulties to arise when such businesses are removed elsewhere. The solution would be to ensure, first of all, that suitable alternative sites be provided to the satisfaction of the people concerned, and, secondly, adequate compensation be given. Government has argued rightly that the subsequent rise in property values after redevelopment is due to the investment in roads and communications; however, I do feel that we should err in favour of people uprooted by urban renewal. In many cases, people do not have the means to sue the Government. In other cases, they probably feel it is a useless process because, to them, Government appears to be all-powerful. In the advanced countries we see the other extreme of urban renewal projects being held up because of numerous law suits brought against the authorities! While the going is easy for us, we should try to bend over backwards in accommodating people who are affected by our urban renewal schemes, especially the poorer people.

Next, I would like to talk about our balance of payments. The Minister for Finance has done an admirable job of analysing the trade deficit. The deficit is a good and healthy thing because it is stimulated by a buoyant economy investing in machinery and plant, which will generate output and, therefore, the means for repayment in the future.

Furthermore, for the first time in several years, our growth in Gross Domestic Expenditure exceeds that of our Gross Domestic Product, reflecting the fact that investments exceed our savings. Hitherto, we had saved more than we invested locally, resulting in accretions of Singapore investments and bank balances abroad. Investment in real terms requires not just a financial inflow but the actual importation of the machinery and the tools required for the production process. The ordinary layman's view is that balance of payments surpluses are good and deficits are bad; in economic terms, surpluses imply the transfer of real goods and services overseas in exchange for paper claims redeemable at some future date! Of course, a trade deficit would be bad if it comprises consumption type goods so that no productive capacity is added.

Now I want to comment on the Minister's reference to Mr S. Okita's analysis of the causes of the high Japanese growth rates. It seems to me that the nine points listed are more descriptive than analytical. Sir, two of the points, the fifth on agriculture and the ninth, are either irrelevant or unclear as to the line of causation. In our context, our rapid growth can be attributable to five factors:

(1) Political stability: This is something which people should not take for granted. In fact, we should use the period of relative calm to build a stronger political base to ensure continued stability and progress. Investors have a time-horizon for their calculations and need a degree of certainty for their returns, and hence the importance of this factor.

(2) Economic infrastructure: We are now enjoying the fruits of the extensive investments in the economic infrastructure which were made in the Sixties.

(3) Efficient administration: In countries where bureaucracy is stifling and corruption rampant, much entrepreneurial energy is wasted in merely securing legitimacy. Although we have a relatively efficient and non-corrupt civil service, we should not be too complacent. The current courtesy campaign is a correct step, but we should remain watchful against corruption. The more blatant forms of corruption are easy to detect, but the methods of corruption can grow in sophistication too - these are the more insidious and more difficult to identify.

(4) Open-door policy on trade and investment: We are rightly emphasising export orientation and providing a hospitable climate for foreign investment.

(5) Labour-force discipline: Last, but not least, we should not forget the discipline and the exertions of our workers. The co-operation of the unions in restraining wage demands, in accepting longer work hours, trimming of fringe benefits and curtailment of their bargaining powers, has been a major positive factor.

Sir, now let me draw attention to the storm signals which the Minister talked about. The most proximate one concerns the run-down of the British military bases this year of some $250- 300 million. While the expenditure effects per se can be met by the counter-recessionary measures mentioned by the Minister, I think that in addition to the efforts of the Bases Economic Conversion Department, a more direct approach towards the absorption of the 15,000 civilian employees and the 2,000 locally-enlisted personnel is necessary. Many of these people, I suspect, are in clerical-type occupations and are not young. Consequently, they would have great difficulty in finding jobs with comparable pay and their adjustment problems to new kinds of occupations are not inconsequential. I would propose that all clerical and all unskilled job vacancies in Government and statutory boards in the next two years be reserved for these retrenched workers. Government bodies should refrain from taking in young people for such occupations because the younger people are more adaptable. So let them go elsewhere.

Part of the decline in entrepot earnings mentioned by the Minister probably reflects the reclassification of ship-repairing services as manufactures. However, so long as we can pull ahead in manufacturing activity, decreased dependence on entrepot earnings should induce no undue anxiety.

Mr Speaker, Sir, let me now comment on the silver lining mentioned by the Minister. The hopeful factors raised by the Minister include the role of Japan in influencing the trade and investment in South-east Asian countries. Whether and how Japan will use her vast economic power to help South-east Asia develop is something which depends on her calculations. If she fulfils her social and economic responsibilities to the region, we stand to benefit substantially by way of increased trade and investment. Japan currently ranks as our largest supplier of imports and fourth as a market for our exports. The trade gap is overwhelmingly in her favour. There should be ample goodwill on her part, therefore, in allowing the entry of Singapore manufactures and we should take full advantage of this leverage. In terms of investment, we can benefit substantially as Japan moves on to higher technology industries; however, we should exercise selectivity and reject those industries with major pollution problems and cultivate those which build up our technical, managerial and marketing skills. In any event, we should not forget that the Japanese are hard bargainers.

In conclusion, Sir, I applaud the decision not to raise new taxes as this would be the wrong strategy to pursue when we are trying to offset the expenditure reductions of the British bases. Our credit standing is strong, as the Minister rightly pointed out. If past experience is any guide, I suspect also that some of the estimated tax revenues are under-estimates.

Let us not forget, however, that this is not yet the time to relax. We should remain watchful to see how our workers imbibe the new skills and how our managers and executives learn the ropes of modern organisation and sales techniques. The more difficult phase of development lies ahead because quality is more difficult to achieve than quantity. Our concern in the years ahead must increasingly be with quality of skills, of products, of management, of institutions, and, above all, of the political leadership. At a time of relative peace and prosperity, the political challenge is not so much of courage hut of foresight in anticipating problems and of patient toil in the construction of an even better future. In such a setting, the temptation unfortunately is always to relax and grow flabby with age and over-indulgence.

4.00 p.m.

Mr Yeo Toon Chia (Kampong Kapor): (In Mandarin): Mr Speaker, Sir, the total expenditure of the budget for the financial year 1st April, 1971, to 31st March, 1972, is $1,308,000,000. This represents an increase of 28.1 per cent over the last financial year's expenditure. In spite of this, there are neither new taxes nor any increase in the existing rates of taxation. All this shows that, as a result of the co-operation of the people of Singapore, we have been able to depend on ourselves to grow up economically and socially. It is worth our while to exert ourselves to achieve economic prosperity.

In the Finance Minister's budget statement, the Gross Domestic Product of 1970 has increased, representing a growth of 15 per cent. This is a great leap forward in our economic growth. But the increase in taxi fares, in the prices of sugar and bread will also mean a rise in the cost of living. I do not know why in recent months the prices of a whole range of commodities have increased. As a result of these price increases, the common people are very worried. In developing countries, industrial progress entails an increase in the cost of living. This is almost inevitable. But the sudden spate of price increases, resulting in a rise in the cost of living overnight, means imposing a great burden on the common people. If there is no check on this inflation, it will lead to social discontent and grave anxiety among the masses. As a result, many people will have cause to worry about their future.

I would urge the Minister concerned to take immediate steps to set up a commission of inquiry to look into the unscrupulous behaviour of the merchants and traders at large. We should be able to bring down the cost of living to its normal level. There should be no more squeezing by the unscrupulous businessmen.

The Minister has said that the Government is paying attention to the rising cost of housing. Perhaps action will be taken to halt the increase in the cost of building because it will affect our economic development. This is a very wise declaration of policy. But the increase in the prices of land and commodities should also be checked. At a time when the Government is going ahead with its urban renewal scheme, the building trade is having an all-time boom. Many manufacturers of building materials have cashed in on the situation. But has the Government done anything to stop it?

The Government announces every week in the Government Gazette the acquisition of lots of land in various areas. This could perhaps be one of the factors contributing to the rise in the cost of land. Because of this Government acquisition of land, there has been a lot of land speculation. In the course of speculation, the prices of land have been deliberately increased. This has caused great hardship to the poor and middle-class people who have to look to Housing and Development Board flats for their housing.

In implementing the Home Ownership Scheme, we want to ensure that as many families as possible own their own houses and flats. This policy is welcomed by the poorer people of Singapore. But the price of the flats in the Kallang area has been raised. This is a matter which we should not take lightly. The reason given is that such flats are in the city area, so the prices tend to be a bit high, but the Housing and Development Board is supposed to be a servicing institution to build housing for the people, particularly the poorer people. So we should not pursue the same policy as private developers do, and that is to make money. There is nothing objectionable if the high price is due to the cost of building materials, but if the reason is that the area has been developed or is nearer the city, it is open to question. Using the same argument, the prices of all the other Housing and Development Board flats should have been raised because factories would be built in these areas.

A lot of people registered for Housing and Development Board accommodation many years before the flats were ready for occupation. But during the period of waiting, there has been an increase in property values. Can this be used as an excuse to raise the price of flats subsequently? Mr Speaker, Sir, I would like to quote a letter written by a so-called efficient public servant. I will quote in English:

`Representation to Mr...., M.P. for ...Constituency.

You are hereby requested to pay up the sum of $251 within two weeks of the date of this letter as payment for 1970 and 1971 licence fees. This offer of licence will be withdrawn if you fail to do so.

Yours faithfully, signed.'

(In Mandarin) Mr Speaker, Sir, the tone of this letter more or less amounts to a threat and is an insult to the Member of Parliament concerned. In other words, it amounts to this - "You can go and see your M.P., but I warn you that if you do not pay within two weeks, your licence will be withdrawn." There are some civil servants who know that the requests of members of the public cannot be met, but they deliberately tell them to see their M.P.s, knowing full well that such requests cannot be met. In this way they are trying to be difficult with the M.P.s, and create discontent or misunderstanding between the Members of Parliament and the public.

These are the few points that I wish to bring to the attention of the Minister in charge. It is my hope that proper attention will be given to all these grievances.

On the whole, I am happy that there have been no tax increases in the new budget. I am also happy with the economic growth which the Minister has reported in his budget statement. I support him in this respect.

4.08 p.m.

Mr Ho Kah Leong (Jurong): (In Mandarin): Mr Speaker, Sir, all the people in Singapore were greatly relieved after they had listened to the speech made by the Minister for Finance on the 8th of March in this House. The reason is that the Minister was not going to introduce new taxes or increase the existing tax rates. From the people's point of view, naturally they hope that each year the budget will be balanced without having to introduce new taxes, otherwise they will have to tighten their belts no end. In recent months - I think the Minister is also aware of this -prices of commodities have risen tremendously. Although the price increases are often disguised by such terms as "price adjustments", "price standardisation" or "price unification", the people know that it amounts to a rise in many of their daily consumer goods: coffee, sugar and bread; even bus fares are on the increase! It is only the wages of workers that have not shown a corresponding increase. We are in a situation where wages are forever lagging behind prices. It is no wonder that the people are distressed that the cost of living is increasing every day. Their life is becoming more and more difficult. I think it is not necessary for me to remind the Minister that P.A.P, is supposed to be a socialist party. Therefore, the Government and the party should have the welfare of the lower income group more at heart, and prevent the income gap between the haves and the have-nots from becoming wider.

The Minister is also one of the originators of our industrialisation plans. Today, industries are playing an important role in the economic growth of our country. In Other words, the structure of our economy has been transformed from that of an entrepot trading port to an industrial economy. We can say that the Government has looked after the industrialisation programme very well. For example, the Economic Development Board provides local and foreign investors with assistance in their plans. The Jurong Town Corporation provides prospective investors with suitable factory sites. The Development Bank provides the necessary loans or any financial assistance. INTRACO (International Trading Company) provides new markets overseas.

On the other hand, if we look at the agricultural sector, we can see that the Government has not done enough. In the Finance Minister's speech, there is very little mention of it. The most that the Government has done is the establishment of the Primary Production Department which is supposed to provide technical assistance to farmers. However, whether this technical assistance is efficiently transmitted to the farmers is rather open to doubt. The farming operations in our country are becoming smaller and smaller. The number of people who are engaged in farming is also on the decrease. If we do not take steps to stop this trend, we might find that we will have to spend something like $200 million for our requirements of agricultural products. We have nearly 200,000 farmers and their families who work all day long and who earn just sufficient to keep them going. If their crop is a failure or if the prices of their products fall, they will lose their capital outlay. If they wish to start afresh, they have to borrow money at high interest rates from middlemen or from tontines. As a result, they are forever in debt. The Government has not provided adequate assistance to them. I think it should set up a farmers' bank to provide low-interest loans to them. With such assistance they will be able to purchase new farming equipment and so maintain or raise their production level. This assistance is especially needed because we are trying to develop small-scale concentrated farming activities. We also have to look after their production facilities in terms of hygiene. All this will cost money, and the Government should, therefore, help them at all times.

Government assistance should not be limited only to times of disaster. We know the Government is aware of the exploitation of farmers by middlemen. The prices of agricultural products are subject to violent fluctuations, but the Government has not done anything to control this. Nor has it set up a co-operative scheme for the farmers, or helped them to find new markets overseas. As a result, they have to go on their own. Naturally the results are not encouraging.

There is another point. The Government is spending a large sum of money each year to collect statistics of agricultural activity for research. But the findings have not been made available to the farmers. We have been told that research has been made on intensive farming schemes, but there is no evidence of an implementation of such intensive farming techniques.

There is also the problem of land. We know that land is a scarce commodity and yet much of it is being used for military purposes, for industrialisation, and for urbanisation. The land available for farming is becoming less and less.

Sir, we must also take a look at the fishing industry. In 1967 our fishermen caught 17,921 tons of fish. In 1969 it dropped to 12,100 tons. The number of fishermen has also dropped tremendously, and we cannot blind ourselves to this tact. The report of the Primary Production Department shows that in 1968 there were 3,861 fishermen, whereas in 1969 there were only 1,314. The kelong industry has also declined, because the fish available in the off-shore areas is limited. The fishermen, therefore, have to go far out to sea to fish, thereby running great risks. But they have not been offered any protection from the dangers of the high seas. Should they lose their bearings, they might be blown off-course and land in a foreign country where they may be subjected to humiliation. If they do come back alive, they can count themselves lucky. The Government should come to some sort of agreement on fishing rights with our neighbouring countries, and to provide adequate protection for our fishermen who are engaged in deep-sea fishing. But if Government intends to promote deep-sea fishing without providing this protection, then nothing much can be achieved.

Furthermore, I do not understand why the pioneer industry status for deep-sea fishing has been withdrawn. How can we encourage our investors to invest their money in deep-sea fishing if the Government is doing all this? It should adopt a positive attitude towards deep-sea fishing and not indulge in empty talk.

Another point is that the Government has not set aside a piece of land for a fishing village to accommodate those fishermen affected by resettlement schemes. This is because they are not classified as farmers, and are therefore not entitled to a piece of land. As a result, they can only be settled in Housing Board flats. But most of these flats are at a great distance from where they keep their fishing boats. Because of this, many of them are forced to change their occupation.

Mr Speaker, Sir, although we cannot rely entirely on agriculture and fishing alone as we must also look after other industries, we must, however, not neglect these two industries because a large number of our people are engaged in them.

4.21 p.m.

Mr N. Govindasamy (Telok Blangah): Mr Speaker, Sir, this is the second consecutive year in which a painless budget has been presented to this House and to the people of Singapore. May I take this opportunity to congratulate the Government and the Minister on the apparently happy state of the Republic's financial affairs?

However, in his budget statement, the Minister introduced a cautionary note by drawing attention to the ominous presence of indicative factors making for economic instability. The vagaries of the International Monetary System and the British withdrawal, for instance, are apparently pointers to the vulnerability of the foundation of our economic viability and prosperity. Sir, we Singaporeans pride ourselves on our realistic and pragmatic attitude to life. The history of Singapore, particularly during the past decade, confirms rather than refutes Singaporeans' awareness of and their capacity to cope with the ups and downs of life.

While it is not my intention to suggest that a cautionary note is out of tune in a budget meant to instil confidence, it would have been better if the Minister had run through the whole gamut rather than just a solitary note of caution. I may be wrong but the impression I receive is that the Minister, after delivering himself of the note of caution, merely contented himself with a "happy budget".

Sir, in my opinion, the Minister has over-emphasised the impact of the British Conservative Government's decision to maintain a military presence in the area on British investment in Singapore. No doubt, British industrialists and businessmen may get a moral boost from being under the very faint shadow of British arms in this area even after 1971. But all the same, hard-headed investors, whether British or otherwise, look for something more substantial and tangible than the ghost of gunboat diplomacy. For British investors in Singapore, the recent statutory assurance of the Singapore Government to guarantee their investment is more likely to appeal to them.

May I suggest that there are other important reasons beside those mentioned by the Minister for the present economic well-being of Singapore. The political stability of Singapore and its potential for profitable economic investment undoubtedly are contributive factors of our present economic health. My great regret is that our hard-working, adaptable and responsible workers, who constitute the back-up troops as well as the front-line fighters in our drive towards economic success, do not merit even perfunctory praise from the Minister. The acceptance of the Employment Act by the trade union movement against the grain of its traditional objective is in keeping with the avowed policy of co-operation with the Government in any matter of national interest. The Government has acknowledged this in private, but after listening to the Minister's speech, I was saddened not to hear a word of tribute to the contribution by labour towards the prosperity of Singapore.

The. Minister spoke confidently of "a record number of very large projects by well-known international companies" extending their operations to Singapore in 1971. I have no doubt that this desirable trend will contribute towards the continuing economic growth. But I have my misgivings about the undesirable side-effects that may be generated by such large-scale invasion of foreign investment. Labour may be plentiful in Singapore, but trained and skilled manpower is, unfortunately, not plentiful. The result is that harassed employers are prepared to up their ante to secure their supply of such scarce manpower. As more and more foreign industries come to Singapore, we lose more and more trained civil servants to the private sector which pays more for their services. My fear is that if we allow the haemorrhage of trained personnel from our civil service to continue unchecked, not only will our civil service be unable to claim to be the most efficient in South-east Asia, as it can today, but also our socio-economic infrastructure may be weakened to that extent. We do not match the private sector in payment of wages and other fringe benefits, because we just cannot afford to match them. As a result, the cream of our citizens are not attracted to a career in the civil service. Even among serving civil servants, the temptation to leave is ever present. Those senior civil servants who remain in service do so because of their loyalty to the national cause and their dedication to the civil service. The bright young ones will stay on to gain some experience before joining the private sector where they expect the pasture to be undoubtedly greener. The trouble is that very few in the private sector see a greener pasture in the civil service. The question is, can we afford to allow such a situation to continue to deteriorate? At the moment, we are exploiting the few dedicated arid loyal civil servants by making them do not just one full-time job but in certain cases even three or four full-time jobs.

I have known of many experienced civil servants who would not be so dedicated to and would have left the service today to join private industries which are crying for seasoned and competent managerial personnel, were it not for the fact that they stand to lose their pension rights. The situation would have been different if such civil servants had been governed by the Central Provident Fund Ordinance rather than the Pensions Ordinance. For the civil service to retain its trained and experienced personnel in the face of blatant poaching by private employers, the terms and conditions of service and working conditions obtainable in the civil service have to be revised and made more attractive. It is all very well to say that we want only civil servants who are dedicated to public service and that for such civil servants money is of immaterial consideration. While there are undoubtedly civil servants who fit this bill, the vast majority are only human or too susceptible. Dedication and loyalty to public interest and national interest are two qualities which cannot appear to have carried much weight in the light of our obvious admiration for the entrepreneur who can make a fast buck. My point, however, is that even the most energetic entrepreneur can constructively pursue his money-making activities best in an economy with a stable socio-economic infrastructure, of which the civil service must provide the vital skeletal framework. I should not think a painful budget is too high a price to pay for that.

Sir, I am sure that the time is ripe for a complete overhaul of our civil service terms and conditions of service so as to be able to arrest the continuing stream of resignations from among the middle and lower echelons of teachers, the Police Force, the Fire Brigade and other branches of our civil service. Not only are such trained civil servants hard to replace at once, but every loss of trained personnel also means that there is a wastage of public funds. I know that a committee has been set up to look into the wage scales in our police force and that the Teachers' Union has had one discussion, as was pointed out by the Member for Moulmein yesterday, With the Ministry of Education some six months ago. But the discontentment among civil servants is not confined to the teachers and policemen alone. I do hope the Minister will look thoroughly into the matter and not dismiss it with another cursory note.

Sir, the Minister has mentioned that there has been a boom in the building industry. He has, however, added that the "smaller increases recorded for these building materials indicate that the construction industry's 36 per cent increase in earnings may be constituted partly by higher profit margins and only partly by increased constructional capacity." Sir, this statement has borne out my belief that the shortage of skilled building and construction workers and the consequent higher wage level of such workers have not been responsible for the fantastic prices that the developers charge for their products during the past few years. While I am pleased to note that the Minister has acknowledged the cupidity of developers as the cause of the rocketing prices of landed property and am assured that he is keeping his Ministerial eye on the situation, I would have been happier if the Minister had intimated a more concrete course of action against the anti-social conduct of our developers. Sir, if he were to intimidate the developers, I would be happier! Unless the Government steps in and does something drastic now, the ever-spiralling circle of prices extorted by the building developers will put it beyond the dreams, and means of ordinary wage earners to own their homes. Sir, the developers who sold small houses at $20,000 each two years ago are now demanding anything between $50,000 and $60,000 for similar houses in the same estates. It is cheaper in Jurong, I am told! The trouble is that the wage level has not significantly increased during the past decade. While a wage earner earning about $1,000 per month three years ago was in a position to purchase a reasonable-sized house from a private developer, now he cannot even own a smaller house. His best hope for a home of his own is to turn to the Housing and Development Board which is subsidised by the Government. This, however, places a great strain on the resources of the Housing and Development Board which cannot meet such increased demand without neglecting the needs of workers who earn considerably less than $l,000 per month and who constitute the bulk of the working population. Thus, the so-called middle-class workers are caught between the devil of the developers and the deep blue sea of the limited resources of the Housing and Development Board.

The rising prices of houses is a serious problem today and, instead of continuing to watch the situation further, I think the Government should take action now to prevent this condition from deteriorating any further. With the present prices of houses, even the Housing Loan Scheme of the Government with its maximum of $40,000, or the equivalent of three years' salary, whichever is lower, becomes more of a mockery than an aid to civil servants who aspire to be proud house-owners.

While workers have responded to the call of the Government to stabilize the wage level, developers capitalise on the apparent neglect by the Government of the deleterious effects of price manipulations by developers. It appears to be the thinking of the Government that, as long as the Economic Development Board can control sufficient land for the construction and use of factories, and the Housing and Development Board can have sufficient land for housing factory workers as cheaply as possible, private developers are to be permitted to enjoy laissez faire. Thus our middle-class workers are made to compete at a very great disadvantage with expatriate or foreign managers and technicians who, with the backing of their respective employers, are able and prepared to play along with the developers' game of jacking-up housing costs beyond the reach of local buyers. The supreme irony of this all is that the capital gains so engendered by private developers cannot be syphoned off by the Government in the form of taxes to increase, for instance, the resources of the Housing and Development Board.

Sir, tourism represents a source of further economic growth. The Government should ensure that such a source is not unduly prejudiced. There is a need for action to be taken to prevent the many tourists from being fleeced by some shops which are only interested in making a fast buck and being misled by touts operating as tourist guides. Sir,. I am aware that there are many genuine and competent tourist guides, but I am also aware that there are as many touts posing as bona fide tourist guides. Sir, for many tourists Singapore is a byword as an international shopping centre for popular items, such as cameras, watches, transistors, ornaments and curios. I appreciate that ours is a free trade economy, but if it is possible we should institute some form of control of prices of goods normally purchased by tourists. Touts operating as tourist guides take the unsuspecting tourists to shops that charge exorbitant prices, and the shops pay a commission to such touts. While the Tourist Promotion Board has directed its attention to undesirable practices among shopkeepers, it should exercise greater vigilance in the protection and promotion of Singapore's reputation as an international shopping centre. Sir, I even notice a shop in Stamford Road with a signboard proclaiming itself to be a tax-free shop, giving the impression that goods purchased in other shops carry purchase tax.

Sir, the Minister claims that the price index has risen by only 11.5 per cent since 1960. A few Members have taken up this question. This figure is taken from the Monthly Digest of Statistics produced by the Department of Statistics. May I humbly suggest that even the Minister's wife, if she does marketing herself, would vehemently disagree with him. Statistics show only what the statistician wants to show. The presentation of statistics can be an exact science but it can also be a very refined art. While the cost-of-living index purports to show the average increase in prices of commodities of general consumption, the weights given to the respective items can influence the final figure, that is, the cost-of-living index. For it must be remembered that of all the items used for computation of the index, not all the items are of equal importance. In computing an accurate index, more weights have to be given to items which are consumed in greater quantities. By playing about with statistical weights, the index can be rigged to show an increase or decrease in the cost of living. Let me illustrate with a practical example, the prices of which have been taken from the Government's Monthly Digest of Statistics. If we are to compute on an index with disproportionately greater weights assigned to items (on the basis of the data shown in the Monthly Digest of Statistics) such as fish, which has increased in price by 29 per cent since 1960, sugar products by 62 per cent, vegetables by 20 per cent, beverages by 18 per cent, furniture and household equipment by 36 per cent and footwear by 16 per cent, the cost of living can be shown to have increased by more than double the official 11.5 per cent quoted by the Minister since 1960. Conversely, by arbitrarily assigning disproportionately greater weights to such items as meat and poultry which have gone down in price by three per cent since 1960, oils and fats which have gone up by one per cent, fruits up by two per cent, tailoring and laundering charges up by one per cent, transport up by one per cent and entertainment up by four per cent, the cost of living can be shown to increase by only less than half the official figure.

It is obvious that a publication of the cost-of-living index cannot be treated in the same manner as the reading of a thermometer can be taken to measure a rise or a fall in temperature. I am not, however, imputing any sinister motive to the Minister who has shown such great faith in the official cost-of-living index, or any lack of integrity to those civil servants in the Statistics Department responsible for the publication of the official index.

The point I wish to make is that the cost of living is closely related to the standard of living. Any improvement in the standard of living will radically affect the pattern of weights used in computing the cost-of-living index. As the Member for Whampoa has pointed out just now, the pattern has not been changed in the computation since 1960. In the meantime, the standard of living has improved beyond recognition, judging by the number of cars, scooters, television sets and what-have-you.

While the cost of living remains a matter for speculation, profiteers can continue to thrive. The latest price hike is in respect of bread. 1 was shocked to read recently of the threat by the Bakers' Association against bakers who may wish to sell their bread below the price dictated by the Association. The increased price of bread could be understandable if the production costs have gone up as a result of the increased costs of flour, labour, etc. Here, we have an Association ordering its members to increase the price without justification and threatening them with reprisals if they refuse to join in fleecing the hapless consumers. I would have thought the Government should have smacked this Association down and hard. What is more ominous is the thought that the Association would not be able to make good its threat of reprisals against public-spirited bakers unless they have the backing of flour producers and distributors. The increase in bread consumption in the republic is a testimony to the effectiveness of the Government's campaign to persuade Singaporeans to eat wheat instead of rice. The least the Government can do now is to prevent a handful of local wheat and bread tycoons from holding the rest of us to ransom.

At the risk of being accused of wallowing in self-pity, I have to round up my comments on the Minister for Finance's speech with the observation that it is a tough job being a worker in Singapore. As the bulk of consumers, workers find themselves not only at the losing end of the battle against rising prices, but also tilting at some quixotic windmills into the bargain, because the cost of living has officially increased by not more than one per cent per year since 1960. As the principal source of labour, workers find that national interest has not, and is not expected to have, any cogent appeal for owners and developers of land.

As trade unionists, workers are constantly exhorted to be realistic and practical in worldly affairs and, towards this end, are urged to familiarise themselves with the various concepts and analyses of society. Thus, the Government hails the decision of the trade union movement to reorganise itself and to reorientate and educate its officials and members so as to be able to assist in the development of Singapore. The Minister himself stated the other day that we can make Singapore the key location for industries if "our workers and the unions are educated to the realities of our economic life, keen to make their contribution to the transformation of our society with high industrialisation and sophistication in technology". But, unfortunately, the vast majority of employers do not seem to view national interest or the urgency of national development in the same light as the Minister and the workers, if the workers wish to attend enlightening courses, they can do so in their own time and make further sacrifices in the national interest. And those same employers are the ones who benefit most from the painless budget.

4.53 p.m.

Mr Hwang Soo Jin(Jalan Kayu): Mr Speaker, Sir, coming amidst complaints of the rising cost of living, the painless budget is indeed most welcome and public jubilation is very much in evidence. During the course of the Minister's speech he has, among other things, made mention of the continued inflationary conditions in some of the major industrial countries. He has also expressed concern over the cost increase in the building industry and has promised to maintain a close watch upon the situation. However, touching upon the question of the cost of living, I am inclined to agree with Members who have spoken before me that the Minister has treated the subject some-what too lightly and quoted the official Consumer Price index to show that there has only been a very slight fluctuation in the monthly average between 1969 and 1970. Without knowing the basis upon which the statistics are compiled, it is difficult for me to quarrel with the figures, but from regular conversations held with my constituents and judging by the number of letters addressed to the press on the subject lately, and indeed the complaints made by quite a few Members who spoke before me, I rather fear that there has been a definite rise in the overall cost of living affecting most, if not all, wage-earners in recent months. But I have been assured by reliable experts that the increase in our cost of living is comparatively mild if one considers the trends in other countries, particularly some of the more affluent countries such as the United States, Japan, Australia and the United Kingdom. Sir, I am not a unionist but I think it is fair to say that the relatively stable situation obtaining in Singapore has been due, I think, largely to the responsible attitude of our unions in not pressing for excessive wage demands on the slightest excuse, as is the practice with unions in other countries which have bad records of inflation and which suffer from the perennial problem of spiralling wages and prices. However, the brunt of keeping inflation in check should not, in my opinion, be borne entirely by the workers alone. Quite apart from taking the appropriate fiscal measures, it is the duty of the Government to maintain a close watch at all times on the price movements of necessities, and where unjustifiable increases take place, it should not be reluctant to take appropriate action. The Member for Telok Blangah, who spoke before me, quoted the recent price increase in bread. I think that is a situation which I would strongly urge the Minister to look into. The official Consumer Price Index does not appear to be adequate to do the job for which it is intended, and an early opportunity should be taken to work out a more realistic formula in line with the present-day standard of living so that it would reflect more accurately the ups and downs of our cost of living.

I would now like to make a few observations on industrial development. If success in this direction is to be measured in terms of the number of foreign companies we are able to attract here, there is no doubt that we have been doing extremely well. One has only to look at the number of international giants that have set up or are in the course of setting up here. But in our endeavour to attract these foreign companies to come in, there is, to my mind, a danger that our entire economy may be so geared to serve these giants that we may, wittingly or unwittingly, neglect the need to continue to encourage and to assist in the development of the medium and small industries, particularly those started by our own nationals. I say this because I have been told that with increasing competing demands for services from these big firms, our smaller firms in both the manufacturing and other sectors are beginning to experience difficulty in obtaining financial support from their bankers who obviously consider it safer and more profitable to finance the established international giants than the small companies with somewhat limited resources. The plight of these small industries was brought up during a recent forum held at Nanyang University which was fully reported in the press, and it is unnecessary for me to repeat what was said. What has prompted me to bring forth the matter is the Minister's quotation of the analysis made by Mr S. Okita, President of the Japan Economic Research Centre. According to Mr Okita, as quoted by the Minister for Finance, one of the reasons that account for Japan's high growth rate is the "widespread small and medium sized industries developed mainly by private initiative". If we agree with Mr Okita, I feel that more should be done by the Government to assist in the development of small and medium industries and, in particular, the Development Bank of Singapore should be directed to reserve a substantial part of its available funds for the specific purpose of financing these small industries.

Finally, Sir, as a Member of Parliament from an agricultural area, I would like to associate myself with the sentiments expressed by the Member for Jurong when he spoke on the Government's policy, or lack of policy, on agricultural development. I do hope that the Minister will take the opportunity to assess the entire situation and formulate a rather more realistic approach to the matter.

Mr Speaker: Order. I propose to take the suspension now. I will take the Chair again at 5.30 p.m.

Sitting accordingly suspended at 5.00 p.m, until 5.30 p.m. Sitting resumed at 5.30 p.m.

[Mr Speaker in the Chair]

Debate resumed.

Mr P. Govindaswamy (Anson): Mr Speaker, Sir, I wish to thank the Minister for Finance for his Annual Budget Statement and to congratulate him on his brilliant rendering of the budget, for despite a substantial increase in expenditure all year round and a reduction in revenue from the duty on cigarettes, he has been able to balance the budget without having to introduce new taxes or to increase existing taxes.

However, I have a few points to bring forward. My first point is that the rising cost of living during the last one year or so has caused concern among the middle income group and hardship among the lower income group. This is further aggravated by the declared increase in cost of basic food commodities such as bread, and basic transport services such as buses and taxis.

I am given to understand that the rise in the cost of bread is due to an increase in the cost of flour in the world market. This is something beyond our control. But I would like the Minister to enlighten me on the actual increase in the cost of flour, and whether it warrants an increase of as much as five cents per loaf of bread.

The Minister for Communications has declared that there will be a rise of five cents in bus fares per short trip, even for school children. He has explained that this rise is necessary in order that the bus service can be improved. At the same time, he has also announced the reorganisation of the bus companies so as to improve their efficiency. Increased efficiency brings along greater profitability. The increase in bus fares seems unnecessary at this stage. The reorganised system should be first tried out for one year and if it is shown that it is not profitable to run it, then the increase in bus fares would be justifiable.

The next point I want to bring up is the shortage of postmen in the Postal Department. Our postal service is reputed to be the best and most efficient in this region, and for this I must congratulate the Minister. With reference to the budget statement, it appears that there are 98 posts for clerical assistants and postmen. I feel that unless the conditions of service are improved, it will not be easy to recruit staff without the attraction of better salaries and better conditions in the private sector.

My third point is the spate of resignations of doctors, particularly the more senior and experienced ones, from Government service. Whilst I am not unaware that the private sector offers better financial gains for the specialist doctors, I do not think that all of them resigned because of this. I feel that if their conditions of service had been improved, some of them would have remained in the service or would not have opted to retire at the earliest available opportunity. I hope that the Minister for Health will try to improve the conditions of service of the doctors and other professional officers.

My fourth point is on the nursing service. I understand that the nurses have to do seven days of night duty at a stretch, and that they have to do this one week of night duty once in five or six weeks. It would appear to me that it is quite hard on the nurses having to go on one whole week of night duty. I would like to know if the Minister for Health has considered reorganising the duty roster of the nurses so that they can do one night duty in five or six days.

My fifth and last point is on the improvement of our agriculture and husbandry. Although our economic expansion has resulted in the building of many factories and new housing estates, we still have plenty of land for the growing of vegetables and for the rearing of pigs and fowls. Most probably the Minister will say that there is no land. I think Government can buy land from the private sector so that it can introduce this scheme. In last year's budget, I mentioned this matter but it has not been considered. I mentioned earlier about the rising cost of living and, of course, one of the ways of keeping the cost of living down is to increase the production of essential foods and to ensure that they reach the consumers at reasonable prices and not sold at high prices because of the middlemen's making a large profit. I would urge the Minister for National Development to look closer into this problem by allocating more land in the rural areas for growing vegetables and for rearing of pigs and fowls, and at the same time to study the methods of distribution of their products so as to eliminate any possible racketeering.

I think the Members of this House should not forget what happened during the Japanese Occupation period. We must always be very careful. Now we are preparing to store water in our island. We are also trying to arrange some storage places for our vegetables and other essential foodstuffs in case of trouble. God bless that there will be no trouble in the future.

5.37 p.m.

Mr J. F. Conceicao (Katong): Mr Speaker, Sir, during the debate on the budget statement that has been going on this afternoon, I have been wondering, when it came to my turn, whether I would have to call my brief address "What others say"! I hope, however, that I can think of more interesting angles to "What others say" than a broadcasting programme by the same name.

May I first commend the Minister for Finance on an able, straightforward rendering of his account to Parliament. The budget statement reflects a balance between optimism and caution, between confidence and realism, and between far-sighted planning and attention to the practical ground details of implementation. There is indeed much in what the Finance Minister has said that should give rise to feelings of satisfaction. Yet there remains a fair bit over which reservations have to be expressed.

One such aspect over which I cannot share the Minister's equanimity is what he has referred to as the "relative stability in the overall (Consumer Price) index". This is where I come to "What others say". I would like to reflect on and to emphasize what has already been said. If this so-called relative stability means that there has not been a general rise in the cost of living, especially in recent months, I am afraid thousands of Singaporeans will not agree, Singaporeans who go to the market, to the barber, who buy the newspapers, who sit in the buses, who go for an occasional cup of coffee at the coffee-shop round the corner, who buy stationery for the kids, and so on and so forth, including many Members of this House, especially the Members for Thomson and Kampong Kapor who have tabled questions on this same topic. This budget has been described several times in this House as a painless one, and indeed it should be, considering the chafing the general public feel as a result of the increase in the prices of a horde of commodities.

If all this has not been reflected in the price index, then I am afraid there is a credibility gap between the price index and the experience of consumers. Or it may be that the official price is always lower than the actual market price.

I must therefore reflect a fairly common anxiety that careful watch be kept over the situation. One measure that comes soon to mind is the possible salutary effect of a consumers' movement, especially in relation to commodity price rises which may be unwarranted. I have been told that attempts are being made now to register a Consumers' Association. Would the Minister, at an appropriate time, consider giving some assistance to such an association? I would imagine that initially this association would be in need of premises and of funds for full-time staff. However, what this or any other similar association would need critically would be strong public support. So perhaps the first thing that could be done should be the encouragement of any enterprise that seeks to educate consumers as to the role they may play in getting value for their money. I would also urge members to work through resident associations and the like, and through agencies that have been suggested by the Member for Kampong Kapor towards generating consumer co-operation. In any case, it would be interesting to note what the Minister will say in reply to questions in the House about the rising cost of living.

Allied to this feature of living costs is what the Minister himself has alluded to as "an unprecedented rise in the cost of new buildings" reflected also in an escalation in the prices of property. In view of this, it would appear that thousands in the middle income group are in danger of being excluded from our property-owning democracy. I think it is time the Government looked into the question of building dwellings that will be within the reach of purchase of those who, while drawing more than $1,500 in total family income per month, do not belong to the ranks of those who can blithely .pay phenomenally high prices for houses.

The Member for Telok Blangah has rejected as a suggestion that Government should go into this area of building houses for those in the middle socio-economic group. He has suggested that perhaps loans could be increased in amount. I would say that if you borrow more, you would have to pay back more. I would prefer the Government to go into this sector. The Jurong Town Corporation is itself going into this sector and I do not see why Government should not intensify their efforts so that people like the Member for Whampoa and me could benefit.

I would now like to turn to another aspect of the budget statement. The Minister has remarked on the necessity for export orientation, where our industries are concerned. And he has said that our "traders and manufacturers should make greater efforts to penetrate more markets and make more sales in higher value goods. Greater promotion efforts, including participation in trade fairs, would help." I would venture to suggest that the best form of promotion lies in the quality of the goods we produce. All other public relations and promotional ventures merely follow. It is important that we emphasise quality control in our factories. It is true that a number of firms have voluntarily accepted the need for quality control. Indeed I believe that the Singapore Institute of Standards and Industrial Research has already awarded 45 quality control certificates, and an additional number of such awards is pending. But more encouragement and perhaps education has to be given to firms which may be a little deterred by the apparent cost of going in for quality control. I say "apparent cost", for it would seem that with proper and efficient introduction and operation of quality control, production would be more economical in the long run. This would seem to tie up with one of the functions which the Minister has listed as contributing to a high economic growth rate, namely (I am quoting one of the conditions listed by Mr Okita) "cost consciousness of the business enterprises about their products".

Therefore, I say that quality control has to be further encouraged. I would like to ask the Minister if he will offer tangible incentives to manufacturers to turn to quality control. [Interruption] That is one, certainly, but first they will have to be persuaded to go into quality control in order to secure profits ultimately. So, will the Minister offer incentives like allowing an accelerated write-off on capital equipment used for quality control. This has been referred to, if I recollect correctly, but not tangibly. And will the incentives include a tax allowance in respect of money spent in other ways besides capital equipment, e.g., running costs and salaries of quality control personnel?

At the same time, Government should set a positive example of patronising products which have received quality certificates. In this connection, if I may repeat what I have said at an earlier sitting, the sending out of instructional circulars is not enough. I think one has to see that implementation is assured.

The Minister has referred to trade fairs and promotion of trade. Why not start a campaign to sell quality control here in Singapore? Why not have a mass campaign lasting over a reasonable period of time, so that the lesson could be driven home with some effect? If enough international publicity is given to this drive, and if we can convey the impression that quality control and reliability of products constitute matters of serious national concern, then our overseas promotion and participation in trade fairs will be all the more effective.

Finally, I would like to touch briefly on one or two other points. The Minister has referred to a "fast pace of investment in imported capital goods". I would like to refer to a recent analysis in a local newspaper of why a leading manufacturer of dressed leather has stopped production.

Mr Speaker: Mr Conceicao, would you like to tell us which newspaper it is, and when it was published?

Mr Conceicao: This is the Business Times (Commercial and Financial See-lion of the Straits Times) dated Monday, 15th March, 1971, page 13, and the article is headed, "One more DBS investment turns sour". It is interesting to note the allegation that money was spent on machinery which had no particular purpose in the factory right up to the demise of the firm. If this is true, the Minister will no doubt assure us that greater care is now taken, in the case of enterprises in which Government capital is sunk, to relate capital expenditure on machinery to the need for such machinery.

Finally, I would like to remark that, now that manufacturers' industries "comprise slightly more than a fifth of the national economic cake", we will take augmented measures to ensure the health and safety of the workers in our industries. That is another form of quality control. We must make sure that our most important asset - our human investment - is in the best possible shape.

Mr Speaker: Mr Govindasamy, I believe you want to clarify some point?

Mr N. Govindasamy: Yes, Sir, if you will now permit me. I have never said that the Government should not go into housing for the middle income group. My quarrel was that the incentive to buy houses, which the Government offers to civil servants, is no more an incentive, because housing developers are charging too high. For the benefit of the Member for Katong, let me repeat that I never mentioned that Government should not go into building houses for the middle income group.

Mr Conceicao: Sir, I am sorry if I was not so good at hearing what others said just then!

5.50p.m.

Mr Yeo Choo Kok (Delta): (In Mandarin): Mr Speaker, Sir, in spite of a decline in revenue from Customs duty on liquor and tobacco, and notwithstanding a definite drop in British military spending by the end of this year, the 1971-72 budget does not propose any new taxation or any increase in existing taxes. It is quite clear that this painless budget is the result of a series of far-sighted policies carried out in the past few years.

According to the Annual Budget Statement, the Housing and Development Board is going to build more flats to house the people. I do not object to the proposal of building more flats, but what has been troubling me is the manner in which flats are allocated and maintained, and the negligence on the part of the Housing Board to look after the welfare of its tenants. I hope that those officers in charge of the Board's flats do not get the idea that the place where the poor people stay should also look poor.

Many poor families are compelled to squeeze into one-room flats allocated to them more than ten years ago. Some of them have been patiently waiting for about three years for a chance to get an alternative flat. It is not that they do not like a change. Most of these families are not rich, but they have a sense of propriety in not wanting to sleep in the same room with their grown-up children. Some of these families have applied for a change on medical grounds, but even the support of a doctor's written advice attached to the application form has not been favourably considered. Perhaps it has never occurred to the Housing Board officers that the size of a family may increase in the course of time, or that the children will grow up one day. We should not wait for a tragedy to occur, as was reported in the press, before we dig out the old file in order to give sympathetic consideration, with a guilty conscience to an application.

The Housing and Development Board should play a more active role in safeguarding the general welfare of its tenants. Many of them have complained to the Board's Area Officers about noisy and troublesome neighbours. But the complainants have been told that the Housing Board cannot do anything with these culprits because they pay their rents regularly. Even the landlord of a private house knows how to deal with troublesome tenants. If the Housing Board cannot effectively deal with noisy and troublesome tenants, it is useless for the Board to beautify the surroundings with all sorts of flowers and trees, because the tenants will not be in the mood to enjoy or appreciate all these beautiful surroundings.

Mr Speaker, Sir, many young people have been seen gambling at staircases in the Housing Board flats. The Housing Board says that gambling is a police matter. Let me point out that the property belongs to the Housing Board and, as a property owner, it should play its part and help the police wipe out gambling inside its own housing estates. it is the duty of the Housing Board inspectors to ensure that Housing Board flats are legally occupied. They should also regard it as their duty to ensure that staircases and corridors are properly utilised.

The Housing Board should not only try to build more flats to house the people, but also try its best to look after the welfare of its tenants.

5.55p.m.

Mr Ho See Beng (Bras Basah): Mr Speaker, Sir, during the last few days I went through the budget statement and the list of tables at a leisurely pace, and I must congratulate the Minister for Finance on having acquitted himself quite creditably in precision and accuracy. Nevertheless, Sir, I would like to highlight certain issues which might require further scrutiny, and perhaps remedial measures too. If the Finance Minister will take them into consideration during the ensuing year, I am sure they will contribute to a better understanding between the Treasury on the one side and the Backbenchers on the other. They will also create an atmosphere more conducive to a better appreciation of the salient features in the budget among certain sections of the public. I would also like to point out, with facts and figures, the problems relating to labour, especially if these issues have either a direct or an indirect bearing on the implementation of the budget proposals.

Sir, last year when I spoke on the budget presented by the then Finance Minister, I raised several points, and I feel extremely obliged to the Treasury since they have considered them and have also implemented certain proposals which they have considered to be pragmatic. I have in mind my reference last year to industrial accidents and the necessity to take sufficient measures to reduce them to the minimum. In this respect, I am gratified to note that Government has responded to my suggestion to set up an Industrial Safety Council at a national level. I hope the Council will sooner or later move in and propose measures which will bring the Republic into line with the western countries with regard to industrial safety.

Sir, last year while analysing the total cargo trade handled at our port, I did point out that it might increase at a faster pace if the oil boom continued and the manufacturing sector responded to the Finance Minister's treatment. I suggested that expansion of port facilities should be planned sufficiently early. Sir, subsequent events have proved that my analysis of the expected increase in trade was quite correct. As a matter of fact, it could be observed from Table IV that the total cargo handled increased from 37.9 million freight tons in 1969 to 42.1 million freight tons in 1970. This is an increase of 4.2 million freight tons over a period of 12 months. This increase can be further appreciated if we compare the increase in 1969 over 1968, which was only 2.2 million freight tons. In other words, the increase in 1970 has doubled when compared with the increase in 1969. Mineral oil continues to contribute the lion's share of cargo trade handled at our port. Nevertheless, the 1970 trade in general cargo has shown an upward trend, which is quite welcome. I have no hesitation in saying that further encouragement to the manufacturing sector will accelerate the growth of the general cargo trade at a faster pace.

Sir, within a decade the total trade handled at our port has increased from 14.89 million freight tons in 1960 to 42.16 million freight tons in 1970. This, in fact, amounts to an increase of 27.27 million freight tons over the decade. Perhaps our port needs further expansion, and the staff there might require training to keep up with the pace. I am eager to know whether the Finance Minister will consider it necessary to allocate more funds to expand the port facilities, in view of the considerable rise in the cargo handled at our port.

The Finance Minister has also made a reference to the balance of payments position. I am in complete agreement with the Member for Whampoa that money spent in importing capital investment is not a bad thing. Sir, I fully appreciate that those who are not well equipped with the relevant data would be perturbed by the trade deficits and those with questionable motives would not hesitate to grab the opportunity to run down the republic, especially when they are not too pleased with our economic progress. They would not hesitate, in a quixotic manner, to refer gleefully to the alleged chronic deficits in the balance of payments position. I am very pleased to note that the Finance Minister has ably demonstrated that there is no necessity to feel perturbed at our rather large trade deficits, since he has proved that the buoyancy in imports is mainly due to the rapid pace of investment in imported capital goods. Further, a substantial inflow of foreign capital, and an appreciable increase in our foreign reserves along with the efforts made during last year in improving our markets abroad, would indicate to an impartial observer that there is absolutely no necessity for us to view our balance of payments position with apprehension. On the other hand, there is every reason to be satisfied with our past performance and be confident of our future prospects.

Sir, with regard to our export earnings, tourism appears to have contributed substantially. I should congratulate the Tourist Promotion Board on its yeoman service in increasing our dollar earning capacity. Sir, may I also analyse the figures in Table IV and relate them to the Finance Minister's reference to the economic activities with regard to tourism? In this respect, I confess I am a little confused by the discrepancies in the statistics provided by the Finance Minister in Table IV and in his budget statement. According to him, the passenger traffic to Singapore was 306,000 in 1965, but Table IV indicates that in 1965 the total figure for passenger arrivals was 267,322. I really do not know which figure is correct. These figures are important since they will enable us to know to what extent passenger traffic has increased during the period 1965 to 1970. If the budget statement figures are accurate, then there has been an increase of 410,139 in, passenger traffic during 1965 to 1970. On the other hand, if we turn to the table, the increase in passenger traffic should be 448,817 for the same period.. In other words, there is a discrepancy in the statistics, and the difference between the two increases appears to be 38,678, which is quite substantial.

However, I have no hesitation in, agreeing with the Finance Minister that in 1970 we had approximately 25 per cent more visitors than in 1969 and the occupancy rate of 70 per cent for the tourist hotels augurs well for our tourist trade. But of late I have read in the press extracts of speeches of responsible leaders to the effect that we have over-built hotels, and that we may have to call a halt. Hence, I will very much, appreciate it if the Finance Minister can state officially to what extent we can give credence to such statements appearing in the press.

I would also like to comment on the Finance Minister's reference to the textile industry and its contribution to our export trade. I have gone through in detail his reference to the United States economy, the reintroduction of the Mill's Bill and the position of Japan. After the presentation of this budget we also read in the press President Nixon's statement in this respect. Taking into account the frequent changes in the world textile trade, I wonder whether it might be necessary for us to take a number of policy measures so that the Singapore textile industry might not be caught unawares.

It is obvious that with a substantial increase in production and consumption in synthetic fibres in world trade, Singapore might find it necessary to lay more emphasis on the development of synthetic fabric. While recognising the fact that the imposition of restrictions, or rather the quota system as introduced by others might affect our export trade, it would be perhaps more pragmatic to venture into the possibility of entering into hitherto unexplored markets and conduct immediate bilateral talks simultaneously with our traditional consumer countries in the west for an increase in export.

The textile industry is labour intensive; hence we have to work very fast so that there might not be any unemployment due to import restrictions by other countries. I do not think such a situation will arise since in the past the Government has assessed the situation far in advance, although not long ago the announcement of the British quota restriction did catch us unawares.

Turning now to the Ministry of Education, I am pleased to note that with regard to the provision of expenditure, there has been an increase to the tune of 9.8 per cent. It is quite substantial but, at the same time, I would be failing in my duty if I did not point out certain problems which are likely to crop up during 1971 to 1972 when the Ministry intends to recruit more graduate teachers in order to improve the standard of teaching in the secondary schools. The rapid pace of industrialisation has created employment opportunities for our young graduates and emoluments paid in the private sector are more attractive than those provided by the Education Ministry. Hence, it might be difficult to fill the vacancies unless incentives are created by the Education Ministry. It could be in the form of adjustments in total emoluments, better promotional prospects and further opportunity for oversea training programmes. This might result in further allocation of funds to the Education Ministry if the main objective of recruiting more graduate teachers in 1971-72 is to be achieved.

Mr Speaker, Sir, at the very outset of my speech I did mention that I shall make pointed reference to problems pertaining to labour and, if possible, to highlight the issues which hitherto might not have received sufficient attention. I have no intention to cross swords with the Treasury bench with regard to the quantum of funds to be allocated to the Labour Ministry. I am more concerned with policy issues and labour laws since there is a necessity to analyse them with a view to assessing their impact, positive or negative, on the successful implementation of the Government's industrialisation programme with adequate emphasis on human factors. As we are aware, our Prime Minister has often stressed that human endeavour should receive sufficient attention in any economic development programme. In this connection, I would like to point out that the measures taken by the Government are bound to be more effective and the Finance Minister's approach towards development expenditure would be more fruitful if certain measures are taken to bring some of the labour laws in line with our immediate requirements.

As a matter of fact, I have in mind the Employment Act, and although by and large it might be a necessity within the overall strategy of speedy economic development, of course it must be done within the framework of healthy labour and capital relations. I have in mind the fact that certain amendments are necessary, especially with regard to section 46 of the Employment Act relating to bonus payment. The Act stipulates bonus as one month's salary, although it does not prevent any employer from paying more on a voluntary basis. You will agree with me, Sir, that an employer is not much concerned with paying more bonus, since the concept of paying bonus is tied up with profit sharing or profitability. The only item that an employer is really concerned with is the cost of wages bill. It is not so much the bonus, because you do not pay bonus if you do not make a profit. But in the case of wages, whether an employer makes a profit or not, every year he is committed to paying wages to the workers. Therefore, instead of making a limitation on the bonus payment, I would rather prefer that the union should take this point into consideration; that is, the members of a union should not revise their salary scale whenever a collective agreement expires, because in the collective agreement the `salary scale is projected to a period of, say, 12 years, and if one has not reached the top of the scale, there is no necessity to revise the whole salary scale. There is already an automatic increment every year. If this can be accepted, I think we will be able to attract more investors into Singapore. But certainly the bonus restriction will not really cause the employer to be much concerned about it. I would advocate that the Government take this into consideration and remove the bonus restriction as quickly as possible. Notwithstanding the restrictive provision of this section, many employers continue to pay a much higher bonus than what is provided in the Act. This proves that my statement is correct.

Since the passage of the Employment Act in 1968, employers who can afford to pay a bonus continue to pay more than one month's bonus. That shows that the Act does not restrict the employer on the question of bonus payment. It depends on `the capacity to pay, and the profit-sharing motive apparently dominates the approach of both management and labour on the bonus issue. Hence, the original fear which prompted the law-maker to include section 46 in the Act appears to be unwarranted except for the fact that this particular section can be abused by a minority of well established employers in denying labour its legitimate rights. For example, I think all Members must have received copies of a letter from the Singapore Bank Employees' Union informing them how the banks took advantage of section 46 of the Employment Act to coerce the Union into signing a collective agreement. I feel very strongly that we should do something about it.

I would now like to refer to Table VA on the Labour Department's figures. The Labour Department figures indicate that the number of man-days lost in strikes in 1970 has been the lowest over a period of 10 years. Hence, there is no necessity to have second thoughts that if the bonus limitation is removed, there would be trouble. I do not think so. Since within a period of ten years, the number of man-days lost in strikes in 1970 has been the lowest, we should not be unduly afraid of that.

The Minister has also referred in his budget statement to the expected complete British withdrawal and the possible retrenchment of 15,000 civilian employees in the immediate future. I feel that the majority of the workers cannot be re-trained or re-moulded to fit into our modern industries, since most of them belong to the 40-50 age group. Hence I might suggest that with the assistance of the workers, the N.T.U.C, and the Government, joint ventures could be established on a co-operative basis with the capital provided from the provident fund and retrenchment benefits of the workers and also with adequate assistance from the Government. The N.T.U.C, could take the initiative in setting up such enterprises provided the Government could give the green light.

Mr Speaker, Sir, I am sure that we need not have to refer to the pages of Paul Sweezy to know more about the approach towards the welfare state. As it stands now, our Gross Domestic Product is one of the highest in this region. Under such circumstances, it is only natural that as far as possible social amenities should be provided at the expense of the state so that the man in the street will derive the maximum benefit. But it is rather strange that during the past few years, as the G.D.P, bounces forward, existing free benefits have been slowly and steadily removed by the state. I have in mind the disappearance of the free medical benefits both for outpatients and in-patients which existed a few years ago. Today admission into a 3rd class ward costs S 1.50 per day, while SI is charged on the individual if he derives medical benefits as an outpatient. Sir, in keeping with our welfare state concept and taking into account the substantial increase in the G.D.P., the state should abolish medical fees.

Finally, I have only to add that in the turbulent political and economic situation in South-east Asia our young republic continues to surge forward not only with political stability but also with sufficient economic nourishment as provided by the Finance Minister, who deserves appreciation from all sections of this House for presenting a budget which contains no negative punches or pulls but a positive thrust which explicitly expresses the desire and determination to move forward without undue haste or hesitation.

Sir, I would like to associate myself with the sentiments expressed by my colleagues in supporting the budget.

6.21 p.m.

Mr Sim Boon Woo (Changi): Mr Speaker, Sir. Members will recall that the day after the Minister for Finance presented his maiden budget statement in: this Chamber, he received a lot of praise and all-round applause from the tycoons of the various Chambers of Commerce, the business community and the big industrialists. But the grouses and the views of the man in the street, the wage earners, the taxi drivers, the hawkers and the workers still await a sympathetic hearing from the Minister for Finance. I am sure Members have already heard enough of this and perhaps more will be spelt out by my colleagues, the Backbenchers, later on in this House.

Today I am speaking mainly on the acute problems which are facing my constituency. In the budget statement of the Minister for Finance, which indeed is remarkable and impressive for its contents and length, I fail to see any immediate plan being mentioned to offset the economic problems and hardships arising out of the British withdrawal at the end of the year from R.A.F. Changi which is the last leg of the operation. Members will appreciate my deep concern over this matter. The largest Royal Air Force base is at Changi where nearly 5,000 employees earn their living and where the livelihood of many thousands of people of all walks of life will be immediately and indirectly affected. Sir, the vacuum that will be created by the British withdrawal, with nothing to cushion the ill effects, will plunge my constituents into hardship and set them back. I am afraid it may even be a source of social unrest and, because of its contagious nature, it may infect other areas in the republic. Sir, the people who will be adversely affected are not only those citizens who .are directly employed by the British services in Changi, but also others like domestic servants, petty traders, hawkers, shopkeepers, taxi drivers, gardeners and a host of others who in one way or another depend on the British services' spending to earn their living at present.

I am reliably informed that more than 250 civilian employees and their families who are accommodated in R.A.F, quarters at Changi have been warned recently that they have to vacate their quarters within two months of their becoming redundant. It is also gathered that civilians affected by redundancy are required to vacate their premises even though the houses are going to remain vacant thereafter. Sir, these unfortunate employees will suddenly find themselves confronted with a multitude of problems which cannot be solved by their own efforts alone, and the apparent absence of Government assistance will leave them in a completely hopeless situation. True, there are talks of converting Changi Air Base into an industrial complex whereby these people could be absorbed into industry. But this conversion can only be done after the British have left. What happens in the interim?

The disturbing silence on this matter in the Minister's statement raises doubts whether the much talked about conversion will actually come to fruition. If the Government has devised plans for the conversion of Changi Airport, why should the Minister not spell them Out in his statement? After all, to feed many thousands of hungry mouths is no small matter; that could not be lightly ignored.

These civilian employees are unable to rent private estate houses because these are beyond their financial capacity. Still less can they afford to buy their own houses as they are unable to draw their gratuity in a lump sum. Housing and Development Board flats would be ideal for them, but there are none in Changi Constituency at the moment. The problem of accommodation is their biggest worry: it is haunting these unfortunate people. It is more serious than being unemployed, because at least they have their gratuity to fall back on for a hand-to-mouth existence till they find other alternative employment.

The education of the children of these unfortunate people poses yet another anxious problem. There are bound to be adverse effects on the children's education. If they are to move from Changi to other parts of Singapore, you will agree with me- Mr Sneaker, Sir, that the sudden dislocation is bound to disrupt their education even if they are lucky enough to get admission to schools in their new areas of residence. In this connection, I wish to know if it would be possible to leave R.A.F, civilian employees in their present accommodation even after their retrenchment until alternative accommodation is available to them.

Sir, it is nearly four years now since the then British Labour Government announced the withdrawal of British forces from the republic. Surely our Government must have plans concerning Changi Air Base which can be implemented immediately so as to solve the economic depression in Changi Constituency. Can the Minister enlighten this House on what solutions he has to relieve the people of their anxiety about their future.

6.30 p.m.

Mr Low Guan Onn (River Valley): Mr Speaker, Sir, I rise to join other Members on this side of the House in commending the Minister for Finance on presenting his first budget speech which is sensible, balanced and most welcome to the public. It is a painless budget without the necessity of introducing new taxes or increasing the existing rates of taxes. As the Minister has mentioned, the accelerated run-down of the British military bases will commence this month, and will be completed by the end of the year. This operation will result in a loss of British military spending to the tune of $300 million, yet the Minister does not foresee any necessity for additional taxation. This bears testimony to our healthy economic growth and to the success of our industrialisation programme. This happy state of our economy has been brought about in a large measure, as reflected in the 15 per cent growth, by the wise and bold planning of his predecessor, Dr Gob Keng Swee, and by the Minister's own active and vigorous execution of this economic policy when he was the Chairman of the Economic Development Board, and at the same time by the contributions made by the disciplined and very adaptable workers of our republic under the able leadership of the N.T.U.C.

May I remind the Members for Telok Blangah and Moulmein that not every employer is a bad employer. They have transformed the destiny of the republic from one of utter gloom and pessimism, soon after separation from a neighbouring country to one of healthy optimism and growing affluence, which promises a more equitable and just society with equal opportunities for all, and with a higher standard of living than at present, which is already one of the highest in Asia in the `80s given political stability and security in this region. But with all this optimism and accelerated growth on the economic front, I wish to make one observation in regard to technical training and technical education in that part of his budget statement.

The budget for 1971-72 presented by the Minister is to promote greater growth in strong and export-oriented industries. To achieve this objective, every ingenious fiscal inducement is being thought out and legislated to attract large foreign enterprises which enjoy prestige in international markets like the giant corporations of Rollei, Rockwell, Plessey, Philips, etc. As a result of the expanding economy and rapid industrialisation, there are already ominous signs of a creeping cost of living and an escalation of the wage rates of semi-skilled and skilled men in the manufacturing industries. Unless measures are brought forth to arrest this inflationary trend, the republic will soon become priced out of the export markets in the services we can offer. This trend has been brought about by the great influx of foreign management and technical personnel belonging to these enterprises, but these foreign managerial and technical personnel are most welcome to our republic in imparting the technical know-how and expertise to their local counterparts in these industries. Unfortunately, for the majority of us, they have also large spending powers which have a direct bearing on our commodity and service prices. At the same time, there is a great shortage of skilled manpower, resulting in too few men chasing too many jobs. Although every effort is being exerted to create a more favourable investment climate, a shift of greater emphasis has been necessary on a new educational policy from one of academic type to one of a more technical bias by training, and to produce a greater number of tertiary and technician echelons of skilled personnel. But are we doing enough in the technical education field, as industries and national services are competing for the output of tertiary technician and vocational graduates? I concur with the view of the Member for Whampoa for a co-ordinating manpower body to be set up. The time is ripe and necessary to establish a high-powered national central council to co-ordinate and plan the manpower requirements of our republic so that the input has a direct bearing on the output of the graduates. One can see from the estimates that on a tertiary level we have a situation where the University of Singapore and the Polytechnic are under the Ministry of Science and Technology, and Nanyang University and Ngee Ann College under the Ministry of Education. Unless quick and urgent steps are taken to centralise the co-ordination and training of skilled manpower, both for the industries and the military requirements at all levels, the republic may be caught on the wrong foot with all foreign investments coming in on a large scale, as predicted by the Minister.

He has mentioned in his speech that at the beginning of 1971 the total direct foreign investments in manufacturing industries will total $1,700 million, and will be in full production from two to five years. Assuming an investment of $30,000 will create one job for one worker, the total number of people who will find employment in these newly-created industries alone will be 56,000. What will be the requirements for the other sectors? From the figures obtained from the Year Book of Statistics, 1969, the University of Singapore and Nanyang University produced 1,639 graduates at tertiary level in 1969, whereas only 593 graduates at technician level passed out from the Polytechnic and Ngee Ann College in the same year. The technical and vocational institutes and the Industrial Training Centre turned out 4,129 graduates between the ages of 17 and 19 at craft and trade levels. As soon as they passed out, they will have to be taken into national service. In advanced and developed countries, the ratio of tertiary to technician and craft level is 1: 5: 25, whereas in our case it is 3: 1: 7. Although I am aware that from now onwards national servicemen who have undergone two years of full-time service will be discharged, I propose to the Government that before they are discharged on to the employment market, they should be given at least six months of industrial training. Therefore, I cannot see how we can prevent crimping on a large scale in the existing industries, resulting in inflated salaries and wage rates to the detriment of the economy of the republic.

Mr Speaker, Sir, I do not want to sound an alarmist but I must warn this House that quick and concrete measures must be adopted to solve this manpower problem if we are to face our future with optimism, as outlined by the Minister.

The key to our progress and economic growth in the years to come is our human asset, which will play the most important role in making our nation a viable, independent and sovereign country in which both men and women must play their effective contributory part. Therefore, in this context, we must also induce more of our female population to take up skills and work side by side with their menfolk not only in the light industries but also in the heavy metal industries as they are not liable for national service.

Mr Speaker, Sir, I support the 1971-72 budget.

6.40 p.m.

Mr Seah Mui Kok (Bukit Ho Swee): Mr Speaker, Sir, the people of Singapore are happy to know that there will be no increase of any tax for the financial year 1st April, 1971, to 31st March, 1972, as announced by the Minister for Finance in his annual budget statement in Parliament on the 8th of March, 1971. Since there will be no increase of any tax for this period, it will give employers the opportunity to expand their industries and make more profit. It will attract more investors to come here and will definitely create more jobs for the people.

Sir, with the present industrial boom and several employers making good profit, I think the time has come for amendments to be made to the Employment Act which was implemented in 1968, particularly about the bonus payment. I would like to join other Members in this House and strongly request the Government to remove the limitation on the negotiation of bonus payment to one month only. I think the bigger the profit, the bigger should be the bonus. The workers should be given the right to negotiate for a bigger bonus with their employers so long as they have the capacity to pay.

Sir, prices of new and existing houses have been rising fantastically during the last five years. For example, the price of a terrace house was about $30,000 five years ago, but if you buy it now you will have to pay $55,000 for it. Prices of houses have gone up so high that workers find difficulty purchasing them. Luckily, they can purchase Housing and Development Board flats.

Since the workers find difficulty in buying houses from the private sector on account of the fantastically high prices, may I suggest that the Government allow the family combined salary limit to be $1,700 to purchase H.D.B, flats rather than the present limit of $1,200?

In order not to allow the private sector to keep on building houses and making fantastic profits, may I suggest to the Government to build as many H.D.B, flats as possible and to limit the building of houses by the private sector? The private sector is the main cause of the fantastic rise in the prices of houses built by them. We must put an immediate stop to it without further delay.

I am glad the Minister for Finance in his annual budget statement says that he is keeping a close watch on the unprecedented rise in the cost of new buildings and the value of the existing buildings so as to prevent the cost increase from developing to serious proportions.

Sir, I fully agree with the views expressed by other Members of this House on the present increase of prices of various commodities, and I support their proposal that action should be taken to put a stop to it. I also request the Minister for Finance to put a stop to the arbitrary increase of prices of commodities by business associations, for example, the increase in the price of bread by the Bakers Association recently. If the Government allows these business associations to increase their prices arbitrarily, then the Government should not stop the unions from demanding arbitrarily an increase in wages and bonus. Unfortunately, the unions are not allowed to do so. Workers are requested to endure all the restrictions enforced in the Employment Act, for example, longer working hours, a lesser number of public holidays, a limitation to the annual bonus to one month's salary only, etc. But there are no restrictions on the employers and the business associations. They can increase the prices of their commodities arbitrarily. This is most unfair and the Government must stop this squeezing on the public. The workers, especially those with lower wages, are suffering terribly. The Government must stop pampering the employers too much, and pay more attention to the workers and relieve their plight as soon as possible.

Mr Speaker, Sir, I fully support the budgetpresented by the Minister for Finance.

6.46 p.m.

Inche Abdul Aziz Karim (Kallang): Mr Speaker, Sir, I rise to thank the Minister for Finance for his budget speech in Parliament on 8th March, 1971. However, I would like to speak on one subject, appearing in col. 574 [Hansard, 8th March, 1971], in connection with workers' safety, as my colleagues in the N.T.U.C, have dealt with the other aspects of Government policy for the financial year 1971-72.

It is important to note that Government has at long last awakened to the fact that the number of industrial accidents resulting in death or permanent disablement has reached alarmingly high proportions. In this respect, the Government's decision to strengthen the Factory Inspectorate in the Ministry of Labour is most welcome. While it is gratifying to learn that the Government has taken a positive step at this juncture, it cannot be complimented at all on its utter lack of foresight in providing effective legislation to protect the safety of industrial workers. Nor can it be complimented on its lack of concern and interest in enforcing the rudimentary provisions of the Factories Ordinance to protect the safety of industrial workers. Nor can it be complimented on having shown any awareness that the number of industrial accidents has been increasing from month to month, from year to year, in the last ten years since we began our industrialisation programme.

Members will remember that on the 23rd December, 1969, I asked in this House [Hansard, Vol. 29, cols. 242-6] whether the Government would consider increasing the staff in the Factory Inspectorate as a matter of urgency and importance. But the Government was not too responsive then. Time passed and the situation became worse. During last year's budget debate I had occasion on 20th March, 1970 [Hansard, Vol. 29, cols. 834-8], to propose, among other things, firstly, to increase the staff in the Factory Inspectorate; secondly, to upgrade the skill of inspectors to enforce safety provisions; and, thirdly, to introduce stronger legislative measures to promote the safety and health of workers. I am somewhat pleased that the strength of the Factory Inspectorate has been increased by 30 last year, under Establishment Warrant, to meet the urgency of the situation. But I must caution that it is hardly reasonable to expect dramatic improvements immediately just because of the recruitment of six untested technical officers, 16 technicians, and others.

There is need for an overall change of attitude from all quarters in industry. Not only is there ignorance and apathy among the workers, but there is also utter disregard among employers in general to protect the safety of workers. What is most important in the month of employers is the attainment of low cost and high profits carried out in the name of productivity, disregarding the safety of workers in the course of it.

A typical example of, the general attitude of employers can be cited from what happened at the Mandarin Hotel. When the first building worker fell into .a lift-well and died, the contractor was advised to supply his workers with safety belts. I do not know who advised him - it could be the Factory Inspectorate - but he did not do anything. Then another worker fell and died. But still no safety belts were supplied. And it is shocking to learn that safety belts were supplied only one day before the Coroner's inquiry into the death of the second worker. The verdict was "Death by misadventure". The Coroner said, "Workers working in such hazardous situations should be provided with safety measures, and it is up to the proper authorities to enforce it." Sir, I believe that a dozen men working at this hotel downed their tools when the second man fell to his death. I have always thought that requests for safety measures would be reasonable to ensure the safety of lives. When life is at stake, there is no compromise. What happened at the Mandarin Hotel was not death by misadventure of accidental death, but homicide - a clear and simple case of homicide.

The N.T.U.C, is embarking on a programme to instil safety consciousness among workers. The Government on its part must give top priority to its social policy of providing a better and safer working environment. The N.T.U.C, was extremely glad that Dr Goh Keng Swee, the former Minister for Finance, creator and promoter of our industrialisation programme, had proposed the establishment of a Council of Industrial Safety and Health. We welcome it and we agree with the ever-wise Minister that the Council should not be just another forum. The N.T.U.C, has taken the initiative to set in motion the final establishment of such a council. It has obtained general agreement on the terms of reference of this council. Besides the N.T.U.C., notably the Jurong Town Corporation, the National Employers Council, the National Productivity Centre, the National Safety First Council, the Singapore Employers Federation, the Singapore Manufacturers Association, the Singapore Medical Association, the Society for Occupational Medicine, the University of Singapore (Faculty of Engineering), the Institution of Engineers, and the Department of Social Medicine and Public Health of the University of Singapore, have all subscribed to the principles laid down in the memorandum of agreement. It is important to note that never in the past have all these organisations come to general agreement and resolution to undertake a project of the utmost social importance. The Director of the National Productivity Centre, who chaired the press conference before the joint memorandum of agreement was presented to the Minister for Foreign Affairs and Labour, said that there was full, free and frank discussion on the feasibility of establishing an advisory committee on industrial safety and health and that the report would be of benefit to Singapore.

During last year's budget debate I drew the attention of the House to the number of workers who were injured and disabled permanently, or whose injuries had resulted in death. I think it is worth while to quote these figures, so that it can register in our minds once and for all the seriousness of the situation. The number of fatal and permanent disablement cases for the period 1960-69 were: 1960 242 1961 389 1962 480 1963 559 1964 533 1965 637 1966 660 1967 659 1968 804 1969 864 For 1970, I believe the average number of fatal cases is not less than 12 a month. I do hope that each and every Member in this House will resolve to support whatever safety programme there is to ensure the safety and health of our working population. I wish to say this because traditionally Parliament has not been concerned with the workers' safety. I have checked Parliamentary records for the last ten years, and I do not think I am wrong here. The ball is in the hands of the Government!

Mr Conceicao: Feet.

Inche Abdul Aziz Karim: And at the feet of Parliament!

6.53 p.m.

Mr S. Ramaswamy (Potong Pasir): Mr Speaker, Sir, we are very glad to have a Budget for 1971-72 without any new taxes or any increase in the existing tax rates. We are also very happy to learn from our Finance Minister that we have had a favourable year. This is, of course, evidence of our political stability, good leadership, able administration, honest government, and confidence in our future. We have solved our unemployment problem, and we are now faced with a shortage of labour. We have heard from our Finance Minister that the Government intend to take measures to meet this problem, and I am sure this shortage will also be overcome.

In his budget statement our Finance Minister said that the domestic price level remained fairly stable. The housing sub-index moved up by about two percentage points because of a tax levied on Public Utility Board bills. The Minister said that the prices of rice and other cereals showed a decline; probably so. But we know that the price of bread has gone up. So has the price of sugar and other necessities. The P.U.B, bills have gone up because of the increase in the rates of charges and because of the new tax. Bus fares will go up from next month. There will be no more five-cent bus fare, and no more 25-cent fare from terminus to terminus. In sympathy with the rise in bus fares, taxi fares have gone up too. The price of vegetables has gone up. The price of imported foodstuffs has also gone up. In short, if our Finance Minister says that the price index shows a decline, the fact is otherwise. The basic cost of living has gone up. The lower income group is the lot that suffers most. This is not a healthy sign, and if the Minister agrees with me that it is not healthy, then what measures does he intend to take to counter the increases in the prices of basic consumer goods and the rise in the cost of living?

Sir, I see that the proposed Science Centre is to be built at Jurong. As it is, there is a heavy shortage of land for our industries in Jurong. If the University of Singapore is to be resited at Kent Ridge, why not build the Science Centre at Kent Ridge too? We can then have one single administration for both institutions and so reduce costs.

Next I want to speak on the drainage and flood alleviation system. I see that the drainage and flood alleviation schemes will cost $4.5 million in the coming year. I also see that the first phase of the Bukit Timah Flood Alleviation Scheme will be completed this year. Several other new drainage systems proposed include Geylang Serai, Toa Payoh and Telok Blangah. Potong Pasir is one of the worst flood-prone areas. Braddell Road was flooded up to 10 feet during the December 1969 flood. All the kampong houses were under water. Even now whenever there are two or three inches of rain, the area is flooded and there are two to three feet of water. I do not see Potong Pasir included in any of the flood alleviation schemes. Does the Toa Payoh scheme include the improvement of the drainage of Sungei Kallang and the alleviation of flood? Can the Minister elucidate on this point?

7.02 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I am very appreciative of the great interest shown by all Members in the financial policy of Singapore. I would like to thank them not only for the kind remarks which have been addressed to me, but also for the remarks which are critical, though in most cases constructive.

I am embarrassed by the riches - I think there is a French phrase for it: embarras de richesses - which have been disclosed by the volume of information and comments which have come from the House. If I do not answer all the questions raised, it is because, in reading through my notes, I have found that some of them are indecipherable. I shall, therefore, take the opportunity of reading the Hansard when it comes out and give the most thoughtful consideration to all the suggestions made. I therefore propose to answer only the main points brought up.

I think many of the suggestions, questions and criticisms have been answered by the other speakers, so that some of the load has been taken off me. One of the main points appears to be the rise in the cost of living. I shall deal with this in some detail, and also with the workers and the conditions under which they are placed. There was also some comment on the protection of local entrepreneurs and the encouragement of national capital. Criticism was levelled at tourism, and some questions were raised on whether the investments which are being made on tourism would, in fact, bring an adequate return. There were, of course, other general remarks.

On the main policy, I sense that there is general support although Members have some criticisms on the details. For example, I was accused of having left out one very important factor. That factor was China and its effect on the development of this region. I am, of course, aware that China is a very powerful country and that it will have a very considerable effect upon the economies of the area. I do not, however, consider that at the moment it will play a very great role. As far as Singapore and perhaps Malaysia and other countries in this region are concerned, I am afraid the effect is one of being ignored. We are not recognised. However, if the Member for Crawford has a line to China, we shall be happy to pursue the connections which might benefit the economic development of Singapore. I think we can possibly ignore the effect that China has upon the progress of Singapore in the next one or two years.

There was also some criticism by the Member for Whampoa of Mr Okita's criteria for fast economic development. I think he singled out the criterion for agricultural development as one which was not applicable to Singapore. I am not quite sure that that is so. Although we have a very small agricultural sector, I believe it is a fairly efficient sector. At one time, we were exporting pigs, poultry and eggs until certain barriers were placed against our exports of these commodities. If I have not given very much emphasis to agriculture in my statement, it is not because I do not consider it very important but because I consider its scope for future expansion limited and, therefore, it is not one of the most dynamic sectors.

The Member for Jurong raised certain points about agricultural development. The estimates do show that we have given the Primary Production Department adequate provision for improvement to our animal husbandry, fisheries and even agriculture of the kind which will be economic. I do not think there is any land which we can use for rice cultivation. In this respect, I think we are rather fortunate in not having large areas in which to start the "green" revolution. The price of rice has fallen in spite of what may have been said about the cost of living by certain Members of the House. With the miracle rice that is available for planting in many countries in this region which have an economic advantage, the price of rice is likely to fall further. Beyond this, the feeling of the House appears to be that the policy which we have suggested is acceptable and that the emphasis on export-oriented manufacturing is correct and that we should proceed with this emphasis on the very dynamic sector.

I will now try to deal with the various points of criticisms by Members. The first is the rise in the cost of living. I was accused of dismissing the rise in the cost of living in a very few sentences in my report. This is correct. My remarks, of course, apply to 1970. It is correct that the cost of living index for 1970 has shown very little rise over 1969. The prices which Members have most in their minds today are really connected with 1971. For instance, the price of bread was mentioned; also the price of sugar which was recently raised; the rise in bus fares and perhaps taxi fares - all raised in 1971. I am not saying that this is not important. It is very important. The two paragraphs in my report are related to 1970. I did say that in certain respects there have been increases. In the case of housing, for example, there has been an increase in price. But in the case of rice and foodstuffs, there have been some decreases in price.

I would now like to deal with the nature of the cost-of-living index. The cost-of-living index was framed in 1960 or thereabouts - quite a long time ago - so there is no question of our having designed it - there was some accusation that my statisticians perhaps designed it - so that we can mislead the House as to the actual rise in the cost of living. The basis on which the cost-of-living index was formed, as was rightly pointed out, is as shown in the Digest of Statistics. If anyone is interested, he can see the weights in the consumer price index. The weights were designed so that the basket of goods belonged to the workers in 1969 and at that time, there was considerable unemployment. The conditions then were quite different from what they are today. The basket of goods, therefore, consisted mainly of foodstuffs. Naturally, when you are from the lower income group this is the range of commodities you buy most rather than furniture, T. V, sets, refrigerators or other things which have risen greatly in prices. Even on this basis the foodstuffs have not really increased in prices. The figures are in the Digest of Statistics. They can easily be compared by anyone who goes to the market place. Of course, if standards of living have increased, as Members have emphasised, it may be considered whether our present cost-of-living index is really appropriate to the conditions of today, in which case we should consider whether we should change the whole system and construct a new cost-of-living index with different weights. If you are one of the overseas personnel who come to Singapore, for example, if you are one of those who are concerned with offshore oil exploration and you want to get a house in the Tanglin area, you cannot expect to pay the same rent that you would pay in 1960. That is quite clear. At the same time, I do not think that is the criterion on which the Singapore cost-of-living index should be constructed.

As regards the increase in prices in 1970-71, Members are quite rightly concerned about what should be done. There was a suggestion that a commission of inquiry should be constituted. I do not know whether this suggestion was made seriously. The investigation which has to be made is really into the basis of the index. As far as the prices are concerned, this is a fairly simple matter. It is very easy to get inspectors to go to the markets and find out the prices of various types of foodstuffs. In fact, it is being done all the time. If Members are interested in the details and which markets sell the cheapest foodstuffs, it will be very easy to make the information available to them.

An hon. Member: Why not publish it?

Mr Hon Sui Sen: It will be possible to publish it if there is enough interest in it. The information is valuable to some extent, but in most cases you will find that the housewives shop near their homes, it being more costly to take a bus or a taxi to do shopping. In practice, whatever may be the difference in prices between, say, Changi market and Orchard Road market, it is not very likely that housewives will go to Changi and buy their foodstuffs there.

One of the ways in which the Government has tried to prevent an increase in the cost of living has been to ensure that the social services remain relatively the same as they were in 1960. I think the rents for flats, for example, have not really gone up in all this time. The standards of the flats have improved so that if you now live in a Housing and Development Board flat and pay $20 a month, I believe that the standards have increased so that for $20 you probably have a higher standard of living without an increase in the cost.

The cost of medical services also remains, to a great extent, the same. There was mention of some charge now being made.

The Minister for Health (Mr Chua Sian Chin): A token charge!

Mr Hon Sui Sen: My colleague says a token charge. In any case, if you are seriously ill, the token sum which may be considered more than token would be negligible as compared with the actual cost to the Government for providing the services.

In the same way, the cost of education remains relatively the same. The number of bursaries and scholarships has all increased in number. There again the cost of education has not really increased.

There has, therefore, been some isolation of the citizen from the increase in the cost of living over the last ten years. While it may be correct that prices have risen to a great extent for certain sectors of the population, I would say this would be for the higher income group. To the worker in the same position as in 1960, I would say that the increase has not been really all that great.

This brings me to the position of workers today. I am obliged to Members who have reminded me that I have not paid tribute to the workers in my budget statement. I hasten, therefore, to say that the progress which Singapore has made would not have been possible without the hard work and self-sacrifice of the workers. Table VA referred to by the Member for Bras Basah, shows a considerable reduction in the number of man-days lost through industrial disputes. I therefore believe that the trade union movement has played a very responsible role and has been instrumental in a very large measure in making Singapore more attractive to the international companies which have come to Singapore. The industrial peace which has been maintained has been reinforced by the restraint which the National Trades Union Congress has exercised in demands for wage increases. This very responsible attitude will, I hope, meet with an adequate response from employers.

There has been some reference to the matter of bonus payments, the attitude of the banks in negotiations on bonus payments, and suggestions that certain amendments should be made to the Employment Act. These matters are being considered at present and it is hoped that some reasonable solution will be found to the whole problem of what should be done in regard to bonus payments as against an increase in wages. I think it would be desirable that the effects of the British military run-down should be gauged before any adjustments are made to the present equilibrium between the employers and the workers.

There are many considerations in promoting the economic development of Singapore when suggesting that bonus payments should be greatly increased. There are certain countries which are not accustomed to the idea of bonus payments. There are others, like Japan, which have made it a practice to pay bonuses. These have in the past been considered to be of value in promoting savings and in promoting fixed capital formation in Japan. At the same time, it may be advisable that the practice in Western countries that there should be a relationship of wages to productivity, which is more direct and the yearly increase payment should be instituted. I believe that the setting up of a wages. council, where the employers and the employees get together and settle what may be a desirable increase year by year, may be the best solution to the problem. I hope it will be possible that some solution to this problem can be found for implementation after the British military rundown which will take place this year.

Certain Members have emphasised the effects of the rundown upon the workers. The Member for Changi was very concerned about what could be done for the workers in Changi who would be greatly affected by the run-down in 1971. His concern was that the conversion to commercial operation of the Changi facilities would not be adequate to deal with the loss of employment in the area. I think the successful conversion of Sembawang Dockyard to commercial operation shows that where there are skills, there would be no difficulty in absorbing workers. If there are skilled workers in the Changi area who can be absorbed into the aerospace industries, the Lockheed and the Grumman Pacific organisations which are trying to develop repair facilities would take any number of these skilled workers.

As for domestic workers, the problem seems to be that, from a general consensus among employers, there is a shortage of them and that there need be no concern about what is going to happen to them.

The real crunch would be for the clerical workers, the storekeepers and other white-collar workers especially if they are of the age of 40 and above when it would be very difficult to retrain them for industrial jobs. The response to the training courses which have been started for these workers has been rather poor, and it has been decided to discontinue the course specially arranged for them and to allow them to make use of the ordinary facilities. This is a very difficult problem and I confess that it would be very difficult for us to place redundant storekeepers and some of the clerical workers, though not all of them, in industrial employment. I do not think that the suggestion which has been made that jobs in the civil service should be reserved for these workers is feasible. In any case, there are not enough storekeeper jobs in Government service. In addition, our national servicemen have also some claim to preferential treatment in the choice of Government jobs. But we shall do what we can for these workers.

In fact, until 1969, our concern was to see that there were enough jobs and the conditions did not seem quite so important. Now that we have reached the position of almost full employment, the conditions of workers are quite rightly given greater consideration. In my budget statement, I gave emphasis to training. This is one way in which we can improve the conditions of workers so that they can have an increase to their wages through greater productivity.

There was a suggestion by the Member for Moulmein that it was not desirable that I should use the payroll tax for the purpose of giving incentives to employers for training workers. On the other hand, the Member for Whampoa disagreed with this suggestion. My own opinion is that, as this payroll tax is collected in connection with workers employed in industry, it is a very proper basis for using the tax collected to reimburse the employers who are creating the skills, and who may, after having given a lot of training to their employees, find that they may be lured to another similar industry.

Some concern was expressed in connection with the safety of workers. On this I am in entire agreement that we should increasingly emphasise to all employers that they should implement schemes to ensure greater safety for their workers. I am, however, informed that the workers themselves sometimes prefer not to employ safety measures. Helmets are provided for them, but they do not use them. Guards are provided to prevent the workers from being hurt, but, in some cases, in order to improve the speed of working, they are removed by the workers themselves. This is therefore not a matter for the employers alone to pursue, but also for the workers to be educated. A lot of industrial accidents are due to carelessness on the part of the workers.

An hon. Member: Then enforce safety standards!

Mr Hon Sui Sen: If the employers enforce safety standards and the employees are prepared to adopt them, it will be to the benefit of all concerned. From the economic development point of view, a skilled worker has had a lot of capital invested in him by his employer, by the state and by himself, because any investment which is made in learning skills ought to produce a return and the worker should not jeopardise his investment by being careless.

There was another point regarding the protection of local industry. The Member for Whampoa thought that we were over-protecting certain industries. In my budget statement I made it clear that protection would be accorded only if a case is clearly established. I used the word "clearly" and I mean clearly. I do not mean that any industry could call for protection in the early stages of establishment. In the case of dressed leather - I think the Member for Katong read some press statements in connection with it - we have lifted the import duty and in many other cases we will probably do the same. We do not intend to protect an inefficient industry even where investments have been made either by Government or by the Development Bank of Singapore.

Dr Augustine Tan rose -

Mr Speaker: Would you like to give way to Dr Tan, Mr Hon?

Mr Hon Sui Sen resumed his seat.

Dr Augustine Tan: Mr Speaker, Sir, a point of clarification. May I know what the criteria for "clearly" are?

Mr Hon Sui Sen: Mr Speaker, Sir, I do not think it is possible to establish criteria applicable to all industries. There is a committee on tariff matters in which the Economic Development Board, the Trade Division and my Ministry are represented. The committee considers all aspects of the industry. We will consider all aspects before making any decision. In many of the industries which are established in Singapore, the failures have been due more to the effect of bad management than to lack of markets or of proper equipment. In some cases, the Development Bank of Singapore tries to save an industry which could be viable with good management, and it is proper that we should try to rescue these industries where there is some possibility of their becoming viable. This is the reason why we have also promoted light industries.

I do not know why the impression has been created that there has been no encouragement given to local industries. The Light Industries Services still remain. The D.B.S, has a fund for lending to light industries. Its total has run to over $3 million. I think more money is readily available where applications are made. The impression which the Member for Crawford has that we appear to encourage foreign industry and give very little encouragement to our local industries is not quite correct. I can assure him that if he has any local industry wanting any assistance, we shall give it -

Mr Low Yong Nguan rose -

Mr Speaker: Would you like to give way to Mr Low, Mr Hon?

Mr Hon Sui Sen resumed his seat.

Mr Low Yong Nguan: Can I clarify, Mr Speaker? I think the impression must have been carried by the interpreter. Definitely I have not made such an implication. I only said adequate encouragement should be given in proportion to the amount of encouragement given to foreign investments. I have not queried the Government's attitude on this.

Mr Hon Sui Sen: All right. Since the Member for Crawford has clarified this, I hope that my statement will be of some use to any hesitating local entrepreneurs. In some respects, the assistance we are prepared to give would be in the nature of assisting local industries to produce more local entrepreneurs. Even on that basis, we would be prepared to go beyond what we might be prepared to go with the foreign industries. We would consider this as part of the process of the education of local entrepreneurs.

I will now deal with the question of tourism. The Member for Whampoa raised a number of questions. He questioned whether the amount of money which we are going to spend on tourism was really justifiable. There was another Member who asked about the over-investment which he read in the press. The estimate which has been made on tourism is that there would be one million visitors in 1975, so that in our development of Sentosa and other tourist infrastructure, we have taken this into account. I stressed in my budget statement that, as the amount we would spend on Sentosa would be very large, we would make a very careful assessment of the viability of the projects and ensure for ourselves that there would be an adequate return on the capital which will be spent. I do not think I need go beyond this statement.

As far as over-investment in the tourist industry is concerned, I think this is a very difficult question. I have said elsewhere that in many cases in the past, in Japan, for example, at the time of the Tokyo Olympics and Expo `70, it was suggested that there was over-investment in the tourist industry. It was also said in connection with investment of hotels in Bangkok and Hong Kong. If you went to Hong Kong, Tokyo or Bangkok, you would have some problem in finding hotel accommodation in these areas. I myself do not consider that from the Government point of view there has been any over-investment in the industry. The availability of accommodation sometimes stimulates the hotel entrepreneur to get more business for Singapore, and from the point of view of the Minister for Finance, this is certainly very desirable. In individual cases of hotel investment, some entrepreneurs might find that their particular hotel is in a district which is not very popular. In those cases, the over-investment is very obvious. In other areas, in spite of the number of hotels that have been built, there may still be a need for further investment.

A further point which has been made is the effect of urban renewal, the problems created by it, and the cost of shop-houses in the areas which have been rebuilt. There was also some criticism of the construction industry, the increased cost of building, and the price of flats, even those built by the Housing Board. Mention was made of the increased price of the Housing Board flats in Kallang. I think I went into this matter in some detail in my budget statement on the construction costs. There is no question that construction costs have risen. There is also no question that the prices which are now being asked for by private housing developers are much higher than what they were even two or three years ago. This is merely a symptom of the shortage of private housing which has been created by the presence of large numbers of people who find Singapore attractive as a base for their drilling operations in this region. This phenomenon may be only temporary. At the same time, I recognise that even if it is temporary, some hardship is caused to the middle income group who find the purchase of even a semi-detached unit beyond their means. With an increase in the housing loan which Government might make to civil servants, I think it would be very difficult for them to pay for a $60,000 unit. I therefore consider that the solution really is in the suggestion which one Member has made, i.e., that the Housing and Development Board should build flats or units for sale to the middle income group. I believe that the present eligibility is limited to a total family income of $1,200, and that the Member's suggestion is to increase it to $1,700. Of course, we will consider it, but for the time being I think $1,500 is an adequate cut-off point. In fact, I believe that consideration is already being given to raising the limit to $1,500.

Mr Speaker, Sir, I think that deals with the main points raised by Members in the House. The final point which was made was that all these developments, the growth rate and so on, are really intended for the people of Singapore. Of course, I endorse the feeling that the whole purpose of economic development is to provide a higher standard of living for the people of Singapore, and that the creation of a more just and equal society is the real reason why we believe in the economic development of Singapore.

Question put, and agreed to.

Resolved,

That Parliament approves the financial policy of the Government for the financial year 1st April, 1971 to 31st March, 1972.