ANNUAL BUDGET STATEMENT

Order read for resumption of debate on Question [4th March, 1974], "That Parliament approves the financial policy of the Government for the financial year 1st April, 1974 to 31st March, 1975.". - [Minister for Finance].

Question again proposed.

3.08 p.m.

Dr Tan Eng Liang (River Valley): Mr Speaker, Sir, I support the Government's financial policy for the financial year 1974-75 as outlined in the Annual Budget Statement. However, I would like to comment on the policy and its implementation in three particular areas. They are: -

(1) Government's role in consumer protection;

(2) Faster development of supporting industries; and

(3) Development of teachers in the institutions of higher learning and technical officers of public institutions.

While it is true that there is very little Singapore can do about rising prices caused mainly by external factors, the Government can take steps to ensure that this state of affairs is not further aggravated by unscrupulous manipulators and profiteers.

I note that the Government has already taken some positive measures to combat rising prices. The setting up of consumer co-operatives, the lifting of tariffs on some imported products, the campaign to educate the public to refrain from hoarding and the public warning given yesterday to traders and manufacturers against profiteering and hoarding, are some of the measures taken by the Government to protect the consumers. While these measures hope to check spiralling prices, they are by themselves not sufficient. I submit that the Government can and must do more to protect the consumers from profiteers and hazards.

I am aware that the Government has enacted the Sale of Food Act which, among other things, prohibits the sale or use of articles dangerous to health and prevent deception and fraud arising out of the sale of food. The Act also requires labelling to be informative and ethical and covers not only food products, but also appliances intended for use in food preparation. This Act should be more vigorously enforced, including imported products. In addition, there is, however, a need now for the Government to extend protection to include more than food products and appliances for the following reasons.

The Singapore consumer lives in a consumer paradise and can purchase products from the four corners of the globe in any of our shops and departmental stores. He also leads a hazardous life each day he uses certain products and is liable to be cheated when he makes a particular purchase. For, apart from the regulations governing food, drugs and medicines, almost any other consumer product can be freely imported and sold to the Singapore public. It is unfortunate that we do not have statistics on the injuries or deaths resulting from the use of "hazardous" consumer products.

If the Government firmly believes that our consumers need to be protected, then the Government must initiate appropriate action to protect the public from the daily hazards of using questionable consumer products and from being cheated. Our buying public is not sophisticated enough or technically competent to differentiate trade marks, quality and misleading specifications. All that most consumers can understand are the differences in prices. The public must therefore be helped where they cannot fully protect themselves. This can be achieved through enacting a new Act to regulate the importation and sale of a wide variety of consumer products, including household products and toys not covered under existing laws. Such an Act will also encourage and motivate our industries to produce better quality products.

On the other hand, while we encourage our industries to improve their technology and upgrade quality and to manufacture products for local and overseas markets, we must at the same time ensure that imported products are equally reliable. Otherwise our industries are handicapped to compete even in our own markets and our efforts to motivate our industries to better qualitative heights will be negated.

We all know of examples of products where the quality is suspect. Many of these are imported products. While we do insist, under the Licence of Manufacture Act, that our local manufacturers comply with certain requirements, including specifications of quantity, performance, quality, etc., on their products, most imported products do not have to comply with this. To be fair to our manufacturers, we must insist on proper and informative labelling of some of these imported products. As a Government, if nothing is done, we may be accused by our local manufacturers of maintaining double standards. The more honest traders and manufacturers are put in a difficult position as they have to decide whether to lower the quality and hence the price to join in this free-for-all. In the end the consumer suffers. Our industrialisation programme will also be affected in the long run.

I can cite numerous other examples, like electrical appliances, paints, toys and toilet paper, etc.

Certain authorities can require local manufacturers to strictly comply with safety requirements, but only the PUB has the power under the old City Council legislation to check on imported electrical products. For various reasons, this enforcement function has been neglected by the PUB. Although there has been talk about amending the outdated legislation over the last five years, nothing has happened. Perhaps the PUB may not be the most appropriate agency now for the enforcement of the electrical safety requirement.

Locally manufactured paints are required to meet certain specifications. The use of certain chemicals (though they may be cheaper) is prohibited for certain paints, as these chemicals may pollute the environment. These requirements are not applicable to imported paints, and there is no existing law to compel imported paints even to declare their specifications regarding quality and quantity.

Similarly, lead-containing materials should not be used for the manufacture of toys in order to protect our children from lead poisoning, which can lead to deterioration of health, mental retardation or even death. I am not aware of any existing law prohibiting the use of lead containing materials, including paints in toys, in Singapore.

On the question of cheating or profiteering, traders usually cheat on quantity and quality. Cheating in quantity can be more easily detected, but cheating in quality is more difficult to detect. Take the case of toilet paper, for example. Consumers are only interested in buying them by the rolls, and they buy them cheap without knowing either the quality of the paper or the number of sheets that they get per roll. It is known today that there are some tissue paper rolls in the market which have got very big cores and therefore very little paper on them. They are cheaper and the paper is, of course, thinner. The consumers are thus being cheated.

Problems similar to what I have just cited exist in the manufacture of many products, and there is therefore a need for manufacturers to specify their products. I would like also to inform this House that many developed countries have experienced the above problems in their industrialisation programmes, and many of them have come out with legislations to protect the consumers as well as the manufacturing sector. In the United Kingdom they have the Trade Description Act. So also some neighbouring countries have come out with similar acts, and many are considering to do likewise as their societies become more affluent. In the present situation where there is mounting inflation and profiteering, it is necessary to have this Act passed as soon as possible. The Government must have the authority to require both local and foreign products to specify, wherever necessary. This will not impede trade because I am not suggesting that we should impose a blanket requirement, other than where it involves health and safety. Other commodities can be so specified from time to time and, when necessary, to be incorporated in the Schedule.

I would therefore like to propose that the Government should enact a Consumer Protection Act, very much on the lines of the Trade Description Act of the United Kingdom to cover commodities and appliances other than those cited in the Sale of Food Act. The Consumer Protection Act would in essence give powers to the Government to require ethical labelling of specified commodities and to restrict the importation of products of questionable quality which would be against the interest of our consuming public, or which constitutes a danger to safety and health.

The Government may use the services of an existing department, or establish a Consumer Protection Commission or agency, to carry out the stipulated functions of the Consumer Protection Act. The Commission's basic philosophy would be to motivate the private sector to provide product safety and to educate the public to be more conscious and critical of product quality,. The Commission should be given a fairly broad enforcement authority with the power to purchase products and to specify products that need to be tested. It should also have the power to seek court injunctions to prevent non-conforming products from entering the market. The Commission should work closely with bodies such as CASE, whose members can provide a useful feedback information. In this way I think the Government will succeed not only in protecting the interests and safety of the consumer but will also encourage and support the growth of industries genuinely concerned with higher technology, product quality and safety.

I would now like to take up my second point and, that is, the development of adequate supporting industries for the Republic's established manufacturing sector. Although the Government has recognised the important role of these supporting industries and has earmarked $100 million to assist in equity participation in the promotion of these industries, relatively little has been achieved.

Today, the manufacturing sector is bereft of the complementary facilities that could have been provided had our supporting industries, established during the earlier days of our industrialisation, succeeded in upgrading their technical skills and content. What we lack today are a number of "small" industries, capable of producing precision engineering tool and die making, production of higher quality industrial products, better type of electroplating, and manufacture of more sophisticated metal and plastic component parts for our existing industries. Small but highly technologically oriented supporting industries are in great need. Manufacturers of electronic calculators, radios and other products in Singapore have still to turn to Japan, Taiwan and Hong Kong for moulds and relatively simple metal and plastic parts for the products made here.

I would therefore like to urge the Government to re-examine critically not so much our policy on supporting industries, but the ways and means by which we are attempting to attract such industries to Singapore. Admittedly, from an investment point of view, there is not much glamour in attracting these industries to Singapore as a typical investment of a supporting industry is usually in the region of $1 million or less. There is a lot of work involved and the investment sum is relatively low when compared with the big multi-nationals. There is therefore a tendency to concentrate efforts to attract investment from multi-nationals almost to the entire exclusion of these supporting industries. I am not suggesting, Sir, that we should reduce the intensity of our efforts to attract multi-nationals. What I am suggesting here is that a more positive programme should be drawn up and equal priority given to attracting the required supporting industries to our shores. For it is these industries that will form the solid foundation of our industrialisation programme. They will ultimately decide whether the next decade will be as rewarding as the last.

Thirdly, I would like to comment on certain aspects of the Government's policy on manpower development. The Government has increased its grants to the Industrial Training Board, the Singapore Polytechnic, the Ngee Ann College and our two universities. These grants are essentially provided to cater for the increasing intake of students into these institutions. The policy is good, but can it be successfully implemented without paying special attention to the development of the staff required for these institutions?

At the moment, it is a known fact that we have great difficulties in recruiting teaching staff for the tertiary institutions. Why is it so? Far too often, this has been attributed to the fact that the public sector can never compete with the private sector in terms of remuneration and perks. While money and fringe benefits may be important to some, there are many others who would be prepared to take up teaching positions provided there is job satisfaction and avenues for self-betterment. Dedication can only be carried out so far, and dedication without the concomitant recognition and reward will undoubtedly lead to disenchantment and frustration.

I am suggesting, Sir, that we should create opportunities to enable lecturers in tertiary institutions to do a fair amount of research and development work through the provision of more research facilities. It is true that we may not see any tangible results from their research for some time. We will, however, be able to attract the right type and number of teachers we need for the expansion of these institutions. What can be achieved, also, is an improvement in the morale of the lecturers, an opportunity for self-betterment and development of the individual and a higher degree of professionalism in the respective institutions. All these are vital to the successful development of our tertiary institutions.

I would again suggest that we consider seriously the provision of an annual grant of, say, $2 million for research and development work emanating from the tertiary institutions of education and technical institutions like the PUB, the HDB, PWD, SISIR, etc. This money can be handled by the Ministry of Science and Technology, for example. We should also look into the question of giving incentives for research and development for the technical and professional staff from these institutions. Not many civil servants, including those in statutory boards, are given big pay rises - only a few at the top get it. The provision of more facilities in these institutions will definitely help decrease staff turnover and fossilisation of some individuals. $2 million is a small sum compared with the sums we spend on these institutions. At this stage of our development, we simply cannot afford a manpower drain from our technical and educational institutions. The development of manpower, our only resource, must be balanced and it should receive more attention.

Let us not forget that our aim is to develop Singapore as a centre of excellence, not only in the areas of finance and tourism alone but also in the technological competence in certain selected fields. I would like to see greater emphasis placed on science and technology related to Singapore's development. This is sadly lacking in the Budget Statement for 1974-75.

3.25 p.m.

Mr Ho Kah Leong (Jurong): (In Mandarin): Mr Speaker, Sir, our able Minister for Finance has once again presented us with a painless budget. In his Budget Statement not only did he not introduce any new taxes or increase them, he has instead given four tax concessions. At a time when the common people of Singapore are creaking under the pressure of inflation, this is a welcome move indeed.

Sir, Singapore is but a small country. In the midst of world-wide inflation, crop failures and energy crisis, Singapore can still stand solidly on its own. All these depend on our energetic leadership and our hardworking people. In the turbulent waters of the world, Singapore is just like a small boat being tossed about. Our people realise the importance of co-operating with the Government in such a situation. In the new situation where the era of cheap oil has come to an end, there is all the more a need for the people of Singapore to have faith in the leadership of the Government. With co-operation between the Government, management, and labour, we will be able to increase our productivity to offset the effects of inflation. With this effort coming from all quarters, we can maintain our economic growth, though at a lower rate.

Sir, we want to set up a democratic socialist country of justice and equality. This is a principle that we cannot budge or change about. That is to say, we must bridge the gap between the rich and the poor, the have and the have not, otherwise socialist ends cannot be attained. The poor then will not go into deeper poverty.

The poor people should be given equal opportunity to get out of poverty. This is not a very easy task. For some reason or other, the poor people have more children than others. This is either because of the obstinacy of the parents or because of the failure of the family planning scheme. I do not wish to quarrel about who is at fault. But these things happened five or six years or even a decade ago. In the light of a rising cost of living, I do not think anybody has got the guts to defy inflation and produce more children. But what about those poor families who already have a lot of children? Instead of helping them, it seems that some punitive measures have been imposed on them. For example, the fourth child will not be given priority in school enrolment. School children have to pay unnecessarily more for miscellaneous school fees and other expenses. Most of the poor families with a lot of children live either in one-room Housing Board flats or in dilapidated attap huts in the rural areas. They find it difficult to make ends meet with their present income. And because of such punitive measures, things have become worse for them. As a result, some of them either have to give away their children or to stop their children's education in order to lighten their burden. Mr Speaker, Sir, in this way the poor people who hope to get out of poverty by educating their children will have their wishes shattered to pieces. Their children will then become drop-outs because of poverty. If the children are good, they will be prepared to take up odd jobs or work as labourers. If they should unfortunately associate themselves with bad hats, they will become gangsters. They will become not only a social burden but also a social threat to our country.

Mr Speaker, Sir, I must make it clear that I am not against family planning. What I am saying is that where poor families with a big number of children are concerned the mistake is a fait accompli. We should let bygones be bygones and help lessen their burden, instead of punishing them for what they did in the past by depriving them of the opportunity to educate their children in order to get out of poverty. If we do not, these poor people will forever be in poverty.

Apart from these observations, Sir, generally I fully endorse the various points raised in the Minister's speech.

3.34 p.m.

Mr J. F. Conceicao: Mr Speaker, Sir, first, may I say that I hope I can be as diligent in balancing my assessment of the Budget Statement as the Minister has himself indeed been diligent in presenting us once again with a harmoniously balanced budget. There is some temptation, Mr Speaker, Sir, nowadays to be a little overwrought in our present economic and social circumstances, when there is a fair amount of grumbling, especially about three conditions: (a) high prices, (b) the sad state of the bus system, and (c) non-improvement in many ways of the state of many things we see around us, e.g, road conditions, traffic conditions, quality of goods and services we get, and unabated pollution, especially through smoke from vehicles which in many countries is just an important cause of pollution as industrial activity, and so on. But, as I have said, we must try to maintain a cool outlook and make fair judgments.

On the credit side, we must admit that during the past fiscal year, when newspaper headlines have screamed financial crisis after financial crisis throughout the world, our showing has been commendable indeed. We even anticipate a revenue increase in the coming fiscal year, inasmuch also as our revenue has been steadily increasing, in fact, even exceeding our original estimates in the past. Although the Government has been extremely cost-conscious and, indeed, revenue-conscious (as judged by three medals being awarded to our Inland Revenue officials, with the top medal going to the top official), Government is not completely without heart.

Judge for yourself, Mr Speaker, by the performance of the Minister for Finance this afternoon when he said pensioners would get a raise. I would certainly urge the Member for Moulmein to persist in his representations, considering the present condition of the Minister's heart!

Mr Sia Khoon Seong: I will do that.

Mr Conceicao: In the present Budget itself, additional estate duty exemptions and remissions as well as increase in relief for parents and grandparents have been contrived. The two other items of relief, which the Minister has referred to, are not too important for the generality of the public. But one must also remember that although property tax is a highly significant source of revenue, existing owner-occupiers of residential properties have been allowed to continue paying the old rates, despite upward revision of the annual values of their properties. I must urge that this status quo should be preserved. Furthermore, since April 1973, import duties on 149 items have been abolished resulting in a revenue loss of $21.4 million. The abolition of these import duties should have resulted in the lowering of the cost of certain items on the market. In some cases, there has been a reduction in the price of goods. In other cases, maybe the effect has not been adequately contrived, but I am sure the Member for Potong Pasir is on the ball.

There we have, Mr Speaker, Sir, these concessions made because we have done relatively well. Perhaps there could be a few more concessions. For one example, increased income tax reliefs could have been granted. It seems ridiculous in these days of rising prices to give a personal relief of only $2,000 for the individual and, worse, $1,000 for his wife. Moreover, a relief of $1,000 for earned income seems inadequate when those people who are merely salaried are the ones who are hardest hit by inflation despite a 9 per cent allowance and an additional $25. A businessman raises his price corresponding to the increase in his cost, but a person who is earning a fixed salary governed by increments and NWC awards, which pensioners will not enjoy, cannot make a commensurate adjustment to the cost of living where his earnings are concerned. I wonder, Mr Speaker, Sir, whether the Minister for Finance would be too scandalised if 1 suggest that the Government make a further magnanimous concession, in this regard, at some appropriate time?

However, I repeat, Mr Speaker, Sir, the Budget indicates that we have not done badly. Indeed, like any good housekeeper, the Government is not spending more than it can pay for. We are even salting away respectable sums of money in case of a rainy day. Those who come after us should be grateful to us for very prudent house-keeping, where in many other countries governments are laying on a debt for those who come after to shoulder and meet.

But our very success has resulted in some of our problems. As the Minister has rightly pointed out, some of our citizens have themselves contributed to the inflationary trend by injudicious spending habits. During the last Chinese New Year season, for example, we were treated to the astonishing spectacle of the price of a certain species of fish reaching astronomical proportions. And if you were to visit any of the departmental stores that are scattered all over Singapore, you will find them well-stocked and well-patronised, and patronised not by the rich but by those with moderate income.

We must draw comfort from the fact that our people are generally well-housed, in good health, and still seem to have money to spend, as we have been luckily spared the same spectre of unemployment as has haunted other countries. It is possible, however, that one of the reasons why people arc spending more money is that they feel that if they do not spend their money now, things may be too costly for them to get later on. How Government may persuade them that this attitude may not be in the best interests of the country and of consumers themselves is a matter that must involve our attention.

But, as I said, our very rapid rate of development in the past few years has caused problems. For example,

(a) Traffic difficulties have resulted from more and more people being able to own cars. Road surfaces have become more easily damaged because of massive use; to facilitate road transportation, Government has this year set aside a total of $33.1 million for construction and improvement of roads and for allied special projects.

(b) 100,000 people are waiting for Housing Board flats. The more we build, the more there are people who want to take advantage of Government's provision. Eighty per cent of those on the waiting list want to buy. This shows the success of our Housing and Development Board programme and the high degree of acceptability of Housing Board accommodation - here, also, despite complaints of the quality of the finish.

(c) Even our well-run container port recently became clogged up. I am sure we would not prefer to see our wharves empty and idle. But this illustrates, Sir, that we cannot achieve rapid progress without a certain measure of social cost; although steps should be taken to reduce this dissonance.

I have mentioned that a small part of the reason for the inflationary trend is apparently due to the fact that large numbers of people can still afford to indulge in their consumer preferences. While one has to concede this, it might be reasonable to question the extent to which Government action has been taken to stem the inflationary tide, even if such action would have only a marginal effect on the cost of living. Certainly the Government has taken a number of economic measures to counter inflation.

However, where the consumer movement is concerned, I would have said that much more could have been done by Government to help it along. I would have said that there could have been more information given to consumers about those operations of the market which consumers can understand and which they can use to help them assess the fairness of prices. However, only two days ago, it was announced that daily price lists of certain essential food items would be published, and a special information unit had been set up to guide consumers, and so on. Of course, we welcome such measures, Sir. But why did they have to come just before a Budget debate, when, in the case of the introduction of one or two taxes, there is no unnecessary delay, and Finance does not wait for the Budget.

Anyway, we hope that the Ministry of Finance will be able to pull out many more rabbits out of its hat, that will help the consumer. It might insist that prices be displayed on all goods in places like provision shops and other stores to help consumers make quick assessments. There should also be some indication of quality, like product description, or indication of measures of ingredients. This is a matter on which the Member for River Valley has touched on at great length, and I Would like to mention my support of his proposal. To help Ministry of Finance officials, helpers from CASE could be empowered to make appropriate investigations, subject perhaps to such auxiliaries receiving proper training.

Next, Mr Speaker, Sir, I welcome the statement the Minister for Finance has made about the high priority which Government gives to the solving of problems in road transport. This House has witnessed salvo after salvo of questions fired at the Minister for Communications over the condition of the bus system. However, over the last few days some improvement has been brought to the situation, with supplementary Scheme B showing signs of successful operation. But, at best, Mr Speaker, Sir, supplementary Scheme B would be an ad hoc measure to patch up conditions temporarily. In fact, operating Scheme B is like returning to the situation that prevailed decades ago, you will remember, Mr Speaker, Sir, in Singapore when we had the small mosquito bus services with each bus operated by an owner-driver. We have to look to the improvement of the SBS. We hope that the Minister for Communications will eventually be able to contrive for us "a regular, efficient, clean and courteous service". These words were the words the Minister for Communications used in May 1968, when he spoke of what he would set out to do in respect of the dependability of the transport service. Even at that time the Minister was already answering queries regarding the inefficient and poor service of our bus companies. It is unfortunate that things should have come to an even sorrier pass today, six years later.

Having said this, one must also admit that it is no use wasting time over laments and heated argument. The Minister for Communications is himself most acutely and painfully aware of our bus situation. I have no doubt that, if it is necessary and feasible for the Government to take over the bus service, then this will be done. The Minister has shown his determination to maintain a course of action he deems best under the circumstances. Surely this conclusion has not been reached without a total assessment of choices. I do not see any alternative to giving the Minister and his aides a chance to vindicate their judgments. At the same time I would like to be assured that, while every attempt is being made to whip up the necessary hardware -buses, repair facilities, and so on -to meet the situation, the matter of training of relevant management both inside and outside the SBS is also being pursued vigorously.

And now I would like to comment further on a few other matters in the Finance Minister's Budget Statement. The Minister has referred to the Ministry of Education pressing ahead with its programmes to increase the second language exposure time in primary schools. He has followed the paragraph in which he has made this point with a paragraph in which he began with a reference to greater emphasis on quality (in education). I might just point out that quality does not automatically flow from greater exposure to second language. What our pupils are exposed to is important. Are they exposed to the best teaching? Are they exposed to the circumstances in which adequate aids like textbooks, teaching materials and other important adjuncts are easily available? Quality will result from an improvement in the quality of the materials our pupils are exposed to.

Again ironically greater exposure to second language must necessarily result in less exposure to the original language of instruction. Certainly, whatever the terms that are currently used, one language must gain only at the expense of another where exposure time is concerned. We have already had comments publicly about the lowering of the standards of English as reflected in the quality of English that we meet even at the University, for example. I would not be at all surprised that the quality of Chinese also has gone down. It is necessary to look at language teaching not only from the viewpoint of exposure time but also from the viewpoint of improved methods and of utilisation of all educational resources available. I do not think I need elaborate on this. It is very likely that the matter is exercising the attention of the Ministry of Education, but we would like more and more practical evidence of our pre-occupation with quality where education is concerned.

Finally, Mr Speaker, Sir, I would like to round off by commenting on a certain spirit that pervades the Budget Statement: no feather-bedding; nothing is for free; we should not encourage passengers (in this regard, I am a little more hopeful now that the Singapore Bus Service Ltd. will not take this injunction too literally). With economic patterns being radically altered by the oil crisis, I think our people would do well to take even more alert notice of this sort of philosophy, and prepare also to make alterations to their style of living. Our citizens must, for example, learn to co-operate more to fight against profiteering and indigenously-inspired inflation. We must co-operate to bring our crime rate down. We must co-operate to stem the traffic chaos that will inevitably result if everybody wants to drive to town as the lone passenger in his car. When the improvement of the bus system comes about adequately, we must be prepared to park our car in the periphery of the city centre and go into town by public transport.

At the same time as our citizens learn to co-operate more closely with one another, I think, Government itself should pay a little more attention to cultural development in Singapore. I hope to say a little more on this during the debate on the Estimates, but our financial officials should remember that the returns to culture are not calculable only in terms of dollars and cents; that sound cultural values and development are real contributions to the welfare of our people, the welfare of our State. Although, if our Budget officials ask, "What is the profitability in encouraging cultural development?", it would be difficult to explain to them. To illustrate that we cannot make a proper cost-benefit analysis of culture unless we bring all sorts of imponderables into consideration, let me refer to a rather well-worn joke in music circles about the efficiency expert hired to make a time and motion study of a symphony orchestra in performance. This efficiency expert reported with horror that the overall efficiency of the orchestra was barely over 50 per cent because many of the musicians were actually playing only part of the time. I hope that it is not this kind of misguided attitude that will characterise the attitude also of Government in respect of the future development of cultural policy in Singapore, in respect of which incidentally I have looked in vain in the Budget Statement for some reference. Despite this, Sir, I beg to support the financial policy of Government as outlined in the Budget.

3.55 p.m.

Mr Ho See Beng (Bras Basah): Mr Speaker, Sir, I wish to thank the Hon. Minister for Finance for his very clear and lucid exposition of the economic situation obtaining in Singapore, and for his realistic and frank appraisal of the problems confronting our nation in the year ahead.

The three crucial factors that are felt acutely by the workers of Singapore, namely, oil prices, imported inflation and currency instability, are matters of concern to all of us, because even though there may be long-term solutions, in the short term, they generate problems. In this context, the tax reliefs announced by the Minister are no doubt welcomed by all but may I, with your indulgence, Sir, touch on a few points where I feel that sufficient thought may not possibly have been given, for reasons that perhaps I am not aware.

Sir, I would first like to touch upon the question of tax relief for parents and grandparents, which has been raised from $300 per year to $750 per year per dependant. While, no doubt, this relief is welcome to a number of people and is a step in the right direction, I would like to enquire whether we know exactly the number of taxpayers who will benefit by this concession. In other words, Sir, can the Minister inform us how many taxpayers will actually benefit by this concession? This is important because our people should know the extent of relief granted under the head, Income Tax. I ask this question, Sir, because it seems to me that the larger area where tax relief is required, has not been touched upon. And this concerns personal relief in income tax. Personal relief, Sir, stands at $2,000 per year, plus $1,000 relief for earned income. And this personal relief of $2,000 was fixed more than 20 years ago, when incomes were much lower, and purchasing power much higher.

The Minister has stated that consumer prices rose by an average of 22.9 per cent over the previous year alone. In that context, how much more then must consumer prices have increased over the last 20 years, since the tax relief of $2,000 per head was first fixed? Sir, I presume I am right in saying that, when tax relief of $2,000 was fixed more than 20 years ago, the figure was arrived at after careful study, and that $2,000 was considered to be an equitable minimum to allow for a reasonable standard of living.

With the rise in the cost of living, there has been practically no increase in personal relief, except for the $1,000 allowed as earned income, introduced some years ago. And I am sure you will appreciate that if the consumer price index had risen by an average of nearly 25 per cent during the last year, surely it has gone up many times since the figure of $2,000 relief was fixed. The final result is that the poor have become poorer, and the tax sits heavily on them.

What is required, Sir, is for personal relief to be increased to a more realistic and pragmatic level, in keeping with the inflationary trends which the Minister referred to earlier. Only then will there be an incentive for our people to work harder because only then will they be able to retain the fruits of their labour, instead of having it siphoned away on the one hand by income tax and, on the other hand, by inflation.

Every now and then, we hear exhortations and warnings that higher wages can only be related to higher productivity. While this is undoubtedly a reasonable dictum, what is the incentive, if higher wages, resulting from higher productivity, are negated by taxation and inflation? Sir, I submit that there is no incentive. And, if the present state of affairs carries on, we will only be stifling our workers' desire for higher productivity and higher wages.

3.59 p.m.

Mr N. Govindasamy (Telok Blangah): Mr Speaker, Sir, the Hon. Minister for Finance has taken the sting out of the Budget debate. It is customary for Finance Ministers to increase taxes or impose new taxes during Budget time. Since 1969 we in Singapore have begun to look forward to the Budget debate for tax concessions that the Government was going to make and not new taxes that it was going to impose. This has become a habit over the last couple of years. Newspapers have stopped gazing the crystal ball to predict new taxation measures that the Minister was going to impose. In fact, they have even stopped taking photographs of the Minister walking into Parliament House carrying the dreaded black box containing all the terrible new or increased taxation measures the Government was going to impose.

May I compliment the Minister for Finance on his economic survey of Singapore for 1973 and his Budget Statement. Since last year, this has become a new innovation and the comprehensive economic survey and our economic policy have been very illuminating as well as educational. The method of presenting these to Parliament in the form of tabled statements allows for proper and detailed study.

It is gratifying to note that the Government is aware that in spite of the National Wages Council's recommendations of the past two years, the rapid rise in cost of living has offset any wage increases. Real wages for workers, therefore, have declined, in spite of the fact that profit margins in the manufacturing sector have increased. The interim NWC recommendation for 1974 has been a welcome relief for the lower income group. We have no doubt that the decline in real wages for workers would be taken into consideration when the next NWC recommendations are made in July. We on our part are willing to work with the Government and the entrepreneurs to increase productivity so that our manufactured, quality products would be competitively priced in foreign markets.

As a result of our careful anti-inflationary policies of the past, we have had a very small rise in cost of living until about three years ago. But in the past three years or so, our consumer price index has risen very, very sharply although it does not appear excessive in comparison with the developed countries, having regard to the fact that we are not food producers. Food prices rose by 35.5 per cent in 1973. This year, in the past two and a half months alone, there have been further substantial increases. Although these increases are mainly external in origin, I appreciate that the Government is doing all it can to reduce the continuous increase in prices of essential commodities brought about by local forces. During FY 73 the Government lifted import duties, according to the Minister's survey on 149 items of a wide range of foodstuffs, household appliances and construction materials. Lifting of import duties must result in reduction of prices of these items. This aspect of pricing of the products after the removal of import duties has not been properly followed up. I welcome the interest shown and the recent activity of the Trade Division of the Ministry of Finance in warning profiteers and traders who either marked up prices or indulged in short-selling. The Consumers' Association of Singapore has made its contribution, within its competence of limited resources, but no amount of consumer action without the help of the Trade Division can be successful when we have in our midst greedy and anti-social wholesalers and retailers who want to make a quick buck.

Consumers associations in most parts of the world are financed substantially by public funds. In the Scandinavian countries, France and Switzerland, the government finances the consumers associations to an extent of 100 per cent of the expenses. In most other countries, the government subsidizes the consumers organisation by substantial amounts. In Singapore, the Consumers' Association of Singapore has been to-date financed by the NTUC by more than 70 per cent. It is gratifying to note that this year the Government has decided to assist CASE with some financial contribution. If CASE is to be expected to play its part more vigorously, then CASE must also try to help itself and not just depend on the Finance Minister's handout, that is, its membership must increase with a consequential additional support from the Government. The trouble with CASE is that there are far too many critics of CASE and too few members who grudge paying $6 per year but are quite free with their criticisms.

Let me now deal with the taxation policy and changes for FY 74. It appears as if our Minister for Finance has anticipated the sort of criticisms that Backbenchers like me would make and, in anticipation, he has justified the taxation measures that were introduced recently. It is said that attack is the best form of defence. In the case of our Finance Minister, it appears as if his policy is justification even before being accused.

He has taken cognizance of the views expressed by Members of Parliament, in particular the Member for Katong and myself, in respect of estate duty on houses owned by wage earners. The higher exemption and remission limits of estate duty would relieve large numbers of the middle and lower income group house-owners. This is how it should be.

The revision of tax relief for dependent parents and grandparents as touched upon by my colleague, the Member for Bras Basah, from $300 to $750 at least brings parents and grandparents to an equal footing with the first grandchild who is also being given a relief of $750. Let us hope that by FY 75 the Minister will consider increasing tax relief for wives as well. The high cost of living has also spread to the high cost of maintaining a wife.

Sir, I cannot really follow what we gain by giving incentives to foreign ship-owners for registering their ships in Singapore. This is a concession which should not be given at all. I do not know what benefit this concession brings us. Ships registered in foreign countries are known in shipping circles as "flag of convenience" vessels. Some countries which encourage "flag of convenience" ships are Panama, Liberia, Somalia and Honduras. How does Singapore benefit by joining this "flag of convenience" league? Many of the ships registered in the countries I mentioned earlier on including Singapore sail the seven seas but never to the country in which the ship is registered. The foreign ship-owners of these Singapore registered vessels would not hesitate to register their ships in any other country tomorrow, provided they are offered slightly better incentives for some reasons of their own. Sir, may I submit that Singapore's good name and its flag would be tarnished if we are listed as a "flag of convenience" nation. If the concessions given are in respect of genuine locally owned ships which call at our port and employ, if not all, some of our crew, then I have no quarrel with the tax concessions.

Sir, let me now come to life insurance concession. Life insurance has not been so popular among the Singapore public and in the past the benefits of life insurance were enjoyed mostly by a small proportion of the wealthier citizens. Only recently, the general consciousness has increased and many persons from the lower and middle income groups, notably from the membership of the trade unions, have been coming forward to save through life insurance.

Last year, the Minister gave considerable help to these insuring people in the lower and middle income groups by removing the limit of one-sixth of their assessable income which applied to the amount of income tax relief available in respect of life policy premiums together with contributions to the CPF and other approved provident funds.

The change in the taxation basis of the purchased life annuity now proposed by the Minister will no doubt open up for the life offices an opportunity to develop a new type of insurance cover but will also allow the policyholders a valuable option to receive claims proceeds either in a lump sum or in the form of an annuity.

The higher exemption from estate duty will also enhance the net value of life insurance policies.

While, therefore, welcoming all these measures which should help spread the protection of life insurance among the masses and enhance the financial security of the policyholders and their families, may I ask the Minister to consider a suitable amendment to section 44 of the Insurance Act? The provisions of section 44 of the Insurance Act help beneficiaries of life policies to obtain quick settlement of their claims if the amounts payable do not exceed $10,000. Now as an estate up to $50,000 is to be exempted from estate duty, a corresponding change in the provisions of section 44 of the Insurance Act would seem logical.

4.15 p.m.

Mr Hwang Soo Jin (Jalan Kayu): Mr Speaker, Sir, as in the previous year we are again presented with a painless Budget. In welcoming the Statement from the Minister for Finance, in particular, the tax concessions, one should not however overlook the series of departmental exercises in tax increases of an indirect form that have occurred during the year under review, which have inevitably inflicted pains of varying degrees. If our citizens have suffered the pinch, they can at least take consolation in the fact that whatever monies collected by the Government have been and will no doubt continue to be put to good use that will produce lasting benefits to the country and bring about wellbeing to the people. No public funds have been squandered on wasteful monumental white elephant projects carried out under the pretext of national prestige. Nor have any funds finished up lining the coffers of individuals. All funds have been wisely spent either in the strengthening of our national security, the upgrading of social and community services, or in the active promotion of economic development.

The economic prosperity and social stability that we enjoy today have been due in no small measure to the successful implementation of the Counter Recession Strategy adopted by the Government in 1968, when we were threatened by a possible recession consequent upon the British military withdrawal. By spending available surpluses from revenues in the right direction, such as urban redevelopment and the promotion of industrialisation, the Government has not only acted as catalysts but also provided the necessary stimulants for greater economic progress which have culminated in an unprecedented state of full employment. There is therefore a lot to be said for our not subscribing to the "something for nothing" philosophy. However, in the maintenance and extension of public services, every care should be exercised to ensure that those responsible for the implementation of Government policies do not become over obsessed by profit motive only and overlook the commitment of a government to the underlying social good of the community. In any society there arc to be found a certain number of underprivileged and needy people who, not due to the lack of trying, have failed to make the grade. They need a helping hand from somewhere, and I feel that our philosophy should be one based on "the least number of passengers" and not one on "no passengers".

As we look forward to another year there is indeed much cause for concern. The chaotic state of the world economy today has rendered any forecast well-nigh impossible. To what extent we will be affected, it is obviously difficult to make an accurate guess, although it is heartening to note the Minister's Statement that if we all pull together we may still be able to achieve a real growth rate of some 10 per cent per annum. To achieve this, he has prescribed the formula of higher productivity and lower wastage for the manufacturing sector. In addition, Sir, I would suggest that it is time for more active export promotion by Government in conjunction with the private sector. The oil crisis has overnight changed the entire pattern of distribution of wealth among nations; consequently the transfer of purchasing powers and perhaps radical changes in demand patterns.

Extensive market research is obviously necessary to identify the extent and the nature of such changes so as to assist us in adjusting to the fast changing situation and in making sure of our fair share of the world market. In this connection active support, financial and otherwise, should be provided by the Government even though the ultimate success rests upon the awareness of managements of the importance of maintaining our competitive edge by becoming more efficient and better informed of market conditions. Whilst the manufacturing sector has been and will continue to be our leading growth sector, it is encouraging to note that the Minister has not lost sight of the potentials of our services sector, namely, financial, banking, insurance, transport and communications institutions. There are unlimited scopes in these fields for us to step up our invisible earnings, and I do hope that every assistance and encouragement will be given to these industries in the extension of their ser- vices abroad by way of tax and other incentives.

Sir, at home, inflation will become part of our everyday life and we shall have to learn to live with it. Whilst I am pleased that the Government is taking measures to minimise the effect of inflation in so far as goods are concerned, I would again urge the Government to give serious consideration to introducing measures to limit increases in housing rents, particularly for houses occupied by people in the lower income group. It is appreciated that the Housing and Development Board is doing its utmost but until such time as the long waiting list for HDB flats is shortened, something of an interim nature should be done to prevent unscrupulous landlords from taking undue advantage of the situation by hiking rents, in many instances by several hundred percent in any one year. This is an area of inflation which is clearly not imported, and therefore well within our control.

4.24 p.m.

Mr Ong Teng Cheong (Kim Keat): Mr Speaker, Sir, in the Budget Statement on the financial policy of the Government for the coming year, the Minister for Finance has briefly touched on the subject of road transport, which has attracted much attention and debate both inside and outside this House.

I am pleased to note that the solving of urban transportation problems has been given top priority, and I am particularly pleased to note the setting up of the high level Road Transport Action Committee which I consider is a major administrative step in the right direction. Urban transportation problems cannot be cured solely by "transportation" solutions. As we know, motor vehicles move because people want them to move in connection with their various activities, and traffic is therefore fundamentally a function of activities. This also explains why there is so much traffic in the Central Business District because activities are concentrated there. And since the intensity of activities is directly related to the intensity of land use, traffic is also similarly regarded as a function of land use.

As the Minister for Communications has rightly pointed out yesterday in his reply to the Member for Kallang, the problem we face is one faced by all big cities. The number of people going to work in the CBD has increased more than five times since the redevelopment of the CBD, but road space has expanded less than twice to cater for the vehicles carrying people to work there. It is obvious, therefore, that our present deteriorating urban traffic situation is not merely due to poor management of the public bus services, and the situation can neither be saved by simply nationalising the SBS. As the roads are already occupying more than one-third of the land space in the Central area today, to further expand the road space would mean less space for human activities for which a planned city is basically intended.

The Ministry of Communications is to be congratulated for the introduction of the various bold measures of traffic management, such as the adoption of the one-way system, reserved bus lane system, and the impending park-and-ride system, car parking restriction in the Central area and other pricing policies, to solve the current problems. But traffic management alone could not for long prevent further deterioration of the traffic situation if the CBD activities were allowed to continue to be intensified, regardless. The problem is essentially a matter of rationalising the arrangement of activities and transportation system, and the urgent need to have a carefully planned economic and physical development programme to ensure that land use and transportation policies are properly co-ordinated.

I am sure the Government is aware that whatever form of long-term traffic solution is adopted, either with or without MRT, it will have an immense impact on our strategic land use arrangement and distribution of activities within this City State. Therefore, there is an urgent need for much closer co- ordination between ministeries and agencies responsible for land use and transportation policies. Perhaps this may best be achieved through another high-level body similar to the Road Transport Action Committee. There is also the need for an early decision on the long-range traffic solution, whether with or without MRT, as this will go a long way to assist other Government agencies to plan and programme for the development of utility services and infrastructure, and to guide other major public and private developments.

In view of the physical constriction of our City State, the existing and future pattern and intensity of urbanisation, as reflected in our public housing policy, inner city policy, etc., and the stated intention to develop Singapore as a brain services centre, I am of the opinion that our island Republic, as distinct from other cities, has the necessary pre-conditions for a viable MRT system. The existing mode and system of road-base public transportation has its operational limitation under the same urban conditions.

Mr Speaker, Sir, with these observations, I give my support to the motion standing in the name of the Minister for Finance.

Mr Speaker: Order. I propose to take the Suspension now. I will take the Chair again at 5.00 p.m.

Sitting accordingly suspended at 4.30 p.m. until 5.00 p.m. Sitting resumed at 5.00 p.m.

[Mr Speaker in the Chair]

Debate resumed.

Mr Teong Eng Siong (Sembawang): (In Mandarin): Mr Speaker, Sir, I fully support the financial policy presented by the Minister for Finance on the 4th of March. In this Budget, not only no new taxes are imposed but instead there are four tax reliefs or concessions which result in a reduction in revenue of about $9 million. In the midst of international inflation and general increase in the prices of commodities, and the oil crisis, the Minister for Finance has been able to present yet another painless budget. This is indeed rare and praiseworthy.

Mr Speaker, Sir, the total sums in the Budget have shown an increase both in revenue and expenditure. This is a reflection of the satisfactory growth rates of our economy. For example, in terms of revenue, our total revenue is expected to reach the figure of $2,322,950,000 which represents an increase of $448,050,000. This is an appreciable increase and it goes to show that there has been satisfactory growth in such industries as manufacturing, ship-building and ship-repairing, tourism, and other services. The result is that revenue is showing constant increase and this is something which deserves praise.

In terms of expenditure, Defence and Education represent the greatest. The large expenditure on Defence is necessary in order to establish a sound and efficient defence system to secure our sovereignty, independence, and territorial integrity. Mr Speaker, Sir, the $300 million which is going to be spent on the Ministry of Education is to develop national education so that all our people will benefit from it. We cannot, therefore, criticise the expenditure provided for these two Ministries.

However, there is only a small increase in expenditure for Health, Social Welfare, and Primary Production. This is not adequate. As we know, with an increased population, there is a greater need for medical and health services, and therefore the Government should increase the provision for Health Services. We should also not be miserly in the provision for Social Welfare, so that the unfortunate people in our society can be better looked after and better cared for. These measures are not meant to encourage "parasites", but rather we have a social responsibility towards these unfortunate people. The provision for the Primary Production Department should also be increased so that more research work can be conducted to increase the supply of vegetables and meat in our country. We should also like to see a reduction in the prices of these items, thereby reducing the burden on our people.

Mr Speaker, Sir, although there is an international trade recession, our external trade has performed exceptionally well, reaching the figure of over $20,000 million. This is indeed a glorious record. The fact that our external trade has been able to achieve such heights is due to the presence of a good harbour and our geographical position. In addition, the early introduction of containerisation and the increased efficiency in dealing with imports and exports are also basic factors. Besides excellent infrastructure and other essential facilities, the most important factor is the development of our industries and manufacturing. We must also improve the quality of our products so that we can compete in international markets. In order to achieve these objectives, our workers should work hard and constantly seek to improve the quality of their skills. However, Our workers should be adequately rewarded for being diligent and hard working, especially in a time of inflation. Our workers should be given reasonable rewards so that their families can have a decent life.

Mr Speaker, Sir, the Minister has granted four tax reliefs and concessions. I would like to express my wholehearted support and admiration for him. Apart from the registration of ships, the majority of our people will benefit from the other three items. This goes to show that our Government is concerned with the welfare of the lower and middle income groups. But there is one item of tax relief which has not been increased, and that is the personal relief for income tax. This unfortunately has led to a great deal of disappointment. As we all know, the present amount of relief was fixed 20 years ago. There is a world of difference between the cost of living then and the cost of living now. The Minister has said that the consumer price index during last year alone has risen by 23 per cent. I would urge the Minister to consider soon the question of a greater personal relief in order to reduce the burden of the taxpayer.

Sir, as a Member for a rural constituency, I have paid particular attention to the financial provision for rural development. I remember during last year's Budget debate, I requested the Minister to consider increasing the provision for rural development, and he promised that he would consider. Since then, I have been looking through the various items in the Budget for this year, greatly hoping that there would be a substantial increase in the provision for rural development. But I notice that there is only a slight increase in the various items. This will bring some benefit to our people, as the projects in the construction of roads in rural constituencies like Sembawang, Nee Soon, Chua Chu Kang, Bukit Panjang, Jurong, Punggol may be completed smoothly.

Sir, I agree completely with the Minister for Finance when he said that we are faced with many challenges in the years ahead. These include the currency crisis, the problem of inflation, and the various difficulties encountered in our way of life and livelihood. In order to overcome these difficulties and hardships, I think we should do this. Firstly, all our people should co-operate with the Government to overcome these difficulties. Secondly, we should conduct a thrift campaign to cut down all unnecessary expenditure. Thirdly, our workers should work hard and increase their productivity so that the economy will continue to thrive. Fourthly, labour and management should co-operate to ensure industrial peace. If all our people can open up additional avenues and cut down unnecessary waste, and strive forward, I am sure we shall be able to march forward to a healthy and steady year.

5.12 p.m.

Mr Seah Mui Kok (Bukit Ho Swee): Mr Speaker, Sir, I am glad that the Minister for Finance has presented another painless budget to this House on the 4th of March, 1974. Not only will there be no new taxes, but at the same time he was generous enough to give us a few tax concessions. The young people who are supporting their parents and grandparents are happy to know that the Minister for Finance has kindly agreed to increase the tax relief for dependent parents and grandparents from $300 to $750 per dependant. However, I hope the Minister for Finance will give further consideration to increase it to $1,000 per dependant, especially in view of the present high cost of living.

Mr Speaker, Sir, everywhere you go in Singapore, you will hear people talking about price hiking, profiteering, the bus service is giving a lot of inconvenience, frustration and disappointment to the commuters, and other things affecting their daily life. The newspapers report about shortages of food and raw materials, trade associations announce price increases, unemployment on the increase in other countries, more young people taking drugs, and more people are committing suicide.

Singapore is facing some of these difficulties but the people here are much more fortunate because we still maintain political, economic and industrial stability. There is economic growth and industrial expansion. There is full co-operation between management and labour, as well as Government. We are happy that there is almost full employment in Singapore. More than 50,000 jobs were created last year. I believe that so long as we continue this tripartite co-operation, we can meet all the challenges and overcome the difficulties.

Everyone knows that prices of commodities have gone up because of global inflation, uncertainties in the international monetary system, oil production cut and increase of oil prices by all the oil producing countries, shortage of food and raw materials, and other causes. Singapore has no natural resources like oil, gold, timber, rubber, tin, copra or rice, and we have to import all the things we want from other countries; therefore, we have to pay for the prices they demand.

No one would object to the reasonable and fair increase of prices of things. What we strongly object to is the deliberate spreading of rumour that there is a shortage of certain commodities, for example, sugar, followed by hoarding, and finally increase in price. Luckily, our Government has the capacity to deal with it by releasing more sugar.

Sir, in spite of repeated warnings by the Government, profiteering is still going on. Giving warnings only will not have the effect of restraining them from hoarding or profiteering. In fact, it has reached a stage where they are determined to get the maximum profit and to get rich as quickly as possible.

The people are aware that the Government is doing its best to lessen the impact of inflation and to curb price hiking by profiteers. The people feel strongly that the Government is too lenient towards the profiteers. So many warnings have been given to them, but no drastic action has been taken. So far, there has been no prosecution against anyone indulging in hoarding, profiteering and giving short-weight in goods, like bread, for example.

The NTUC is also doing its best to deal with the present inflation and price hiking. It has already established two co-operative supermarkets, one in Toa Payoh and the other in Bukit Ho Swee. Another two supermarkets will be established, at Selegie Centre and Serangoon Gardens. Also NTUC's WELCOME will establish more supermarkets in the various housing estates in due course.

Sir, the general feeling of workers in Singapore is that the Government can control wage increases very well but it is unable to exercise effective control over unreasonable price hiking and profiteering. The time is overdue already for the Government to take drastic action against them immediately. These hoarders and profiteers care for their ownselves in making more money, getting rich quickly and enjoying wine, women and song. They do not have the slightest concern for our national interest. I strongly urge the Government to prosecute them, fine them heavily, put them in prison, cancel their licences and confiscate their goods for hoarding and profiteering.

However, Government action alone will not help solve the whole problem. It is necessary in the national interest that all workers, employers and the people co-operate with the Government to deal with these disgraceful, shameless, parasitic hoarders and profiteers. These hoarders and profiteers are indeed "social cancers" in our society, and we have to eliminate them.

The workers fully appreciate Government's acceptance of the National Wages Council's interim wage supplement of $25 per month to those who are earning less than $1,000 with effect from February 1974, to be followed by another recommendation in July 1974. I hope the final National Wages Council recommendation in July 1974 will give more to the workers who are in the lower income group, especially those who are earning less than $300 a month. This $25 will at least help to lessen the financial strain of the workers to meet the present high cost of living. I am sure all the unionised workers will get the $25, but I am very doubtful whether all the non-unionised workers will get the $25 from their employers. 1 would strongly urge them to join a union in order to get not only the $25 but also to obtain other benefits as well.

I fully agree with the Minister for Finance that to meet the difficulties we have to face in 1974, concerted efforts by employers and workers, producers, traders and consumers must match the Government's own efforts to achieve continued economic growth, with inflation kept down as low as possible. He also mentioned in his Budget Speech that employers and employees must move vigorously towards productivity increases.

Mr Speaker, Sir, the workers agree to the need to increase production. But what about giving them a productivity bonus? Most employers are very vociferous about increasing productivity but very silent about giving a productivity bonus. They would not even care to mention about it. When employers make substantial profit, they just keep quiet and expect the employees to work harder. When they are losing business or getting less profit, they run to the workers and tell them their woes and miseries. Subsequently, they will retrench as many workers as possible. Where is the justice and fairness to the workers? Employers pay wages according to the services rendered by the workers. If they work harder and make extra efforts to boost production, employers make extra profit and therefore they must give a productivity bonus. There is nothing free in this world, including labour service on productivity.

A lot of criticism has been published in the press expressing dissatisfaction with the present bus service - the buses are dirty, polluting the air with black smoke from their exhaust pipes, irregularity in running the bus schedules, drivers refuse to stop at bus stops, conductors are rude, frequent breakdown of buses. Of course, the commuters have some of their own faults to be blamed for. I would not like to add any more fuel to the fire, but may I just make a few recommendations to improve the bus service?

(1) Expedite the repair of the 400 buses. (2) Expedite buying of more new buses to ease the acute shortage of buses. (3) The Management must hear the grievances and difficulties of the bus workers. Also to consider their views and recommendations to achieve an efficient bus service to the satisfaction of the commuters, bus workers and Management. Management, Union and Government must do their very best to solve this problem. (4) The Management to consider giving shares to the bus workers as incentive bonus. This will make them part-owners, when they will of course, work harder.

Sir, in view of the detailed reply and assurance given by the Minister for Communications in Parliament yesterday to further improve the efficiency of the bus service, let us all hope that it will operate efficiently as soon as possible. I must add here that the successful and efficient operation of the bus service requires the full co-operation of the bus commuters as well. They must also appreciate the difficulties of the bus drivers and conductors.

Mr Speaker, Sir, the Minister for Finance in his Budget Statement on 4th March, 1974, mentioned that the average price of crude oil is now well over US$8 (S$20) a barrel, which means a four-fold increase in price over the pre-October 1973 rate. This sudden and rapid increase of the crude oil prices has created an economic burden on the balance of payments of consumer nations, not only to the developed countries but the developing countries as well. The oil producing countries will be getting a lot of money from their oil supplies. In fact, millions and millions of dollars are pouring into their coffers, and they are faced with the problem of how to spend the money. All the oil companies in the world are also making hundreds of millions or billions of dollars because of the oil crisis and increase of oil prices.

Sir, here is a report from the Straits Times of 5th February, 1974, and I quote:

`Exxon Corporation .., annual earnings of US$2.44 billion. Texaco, the third largest but second in profits, registered $1.29 billion.'

`So far, 16 of the US's 20 largest oil companies have reported their 1973 results, and they add up to nearly $8 billion in profits for the year.' There is another report from the Straits Times of 2nd March, 1974. I quote:

`The Royal Dutch/Shell group reports net income for 1973 has risen from �281.7 million to �730.0 million on sales proceeds of �10,558 million against �7,961 million.'

According to the Bank of Japan survey, Singapore and eight other nations would lose a total of about $6,750 million because of higher crude oil prices. Other developing countries are facing the same problem.

In view of the possible settlement of the conflict in the Middle East countries, I would like to appeal to the national leaders of the oil producing countries to give serious consideration to restore the oil cut as soon as possible and not to further increase the oil prices. The developing countries are suffering terribly because most of them do not have the financial means to pay for the oil at such high prices. The present oil cut and the increase of its prices have already badly affected their economic growth and industrial expansion which will eventually lead to further unemployment and starvation to some developing countries. This will be a great blow to the progress of the developing countries and may bring economic chaos to the world.

Mr Speaker, Sir, I would like to join my colleagues in this House in supporting the financial policy of the Government contained in the Budget Statement made by the Minister for Finance in this House on the 4th of March, 1974.

5.29 p.m.

Mr Sia Khoon Seong: Mr Speaker, Sir, I rise in support of the motion standing in the name of the Hon. Minister for Finance.

Singapore, like other countries, has recently been hit painfully by the problem of growing inflation. There is only a small consolation in the fact that the effect of inflation here is less severe than in many other countries. But the problem of coping with the wildly rising cost of living remains for the ordinary wage-earner in Singapore a big headache, as much as for wage-earners all over the world. For him, the prospect of living in privation and want is becoming, if not has become, a reality.

Unlike the merchant, the petty trader, the pig farmer and the hawker, who have raked in handsome profits, often through profiteering, the ordinary wage-earner has become the sole victim of this growing menace of inflation. Unlike the pig farmer, the hawker and other self-employed persons who are able to jack up prices of their goods or services to keep pace with inflation, many of whom have now joined the ranks of the upper- middle income group, the wage-earner finds his real income shrinking and the value of his hard-earned savings diminishing. This, Mr Speaker, Sir, is the core of the problem of inflation in Singapore and elsewhere in the world. This is not the fate that a wage-earner would like to have, less so his trade union and his government.

There is no magic solution to this problem. Wage increases merely serve as a temporary relief to try to help him to maintain his present standard of living, only to be out-stripped time and again by spiralling increases in prices of commodities. It is only to be expected that there will be heartaches and hardships in this period of rising cost of living for the wage-earner, his trade union and his Government. More and more persons in the ranks of the trade union movement are coming round to the view that though wage adjustments are necessary and useful to offset an increasing cost of living, particularly for the lower income group, the more important thing to do in the long-term view is to ensure employment for the maximum number of people and to devise effective means for the restraint of price manipulations and unreasonable hikes.

It is in this context that I welcome the recent moves taken by the Finance Ministry to curb profiteering and unwarranted price hikes. The Finance Ministry should have acted much earlier, but nonetheless, it is better late than never. I only hope that these recent thunderings of the Finance Ministry to warn unscrupulous traders and others are not just pre-budget debate gimmicks to placate Parliament, but are genuine efforts that will be sustained and further strengthened to prevent any inflationary tendency from being exploited and worsened by profiteers and other social parasites.

The depreciation of the real value of money, as the result of growing inflation, has a deleterious effect on the will of the people to save. More and more persons are beginning to doubt the age-old practice of saving, when one dollar yesterday is worth more than one dollar today or tomorrow. More persons are thus inclined to spend their money now rather than save and see the diminishing value of their savings. Their philosophy seems to be "spend and enjoy now, die later." There is no incentive to save.

To make things worse, Government gives a miserable 5- per cent interest for their CPF contributions for which no interest is payable in the year of contribution. The Post Office Savings Bank pays 4� per cent for savings. The Government should seriously consider upping the interest rates of CPF savings and deposits with the Post Office Savings Bank. Perhaps the Government should consider paying 8 per cent interest for CPF savings, 8 per cent interest for Post Office savings for the first $1,000, 7� per cent interest for the second $1,000, 7 per cent interest for the third $1,000 and 6 per cent interest for any subsequent amount. For the CPF and the Post Office Savings Bank to pay much less than what the banks and the finance companies pay at current rates ranging from 9-1l per cent for savings would suggest that the Government is taking undue advantage of the savings of workers, even though such savings are utilized to finance or subsidise Government in all its development projects, which also equally benefit the rich tycoons.

I am not suggesting that my formula is the most feasible and justifiable or that the Government is not doing anything. The Government may have better formulae or other solutions in the pipeline. But what I am saying is that the need to fix more realistic rates of interest must be recognised. First, to check the erosion on the will of the ordinary people to save, and secondly, to protect for their future enjoyment the fruit of their savings as far as is humanly possible. The rich and the not-so-rich can invest their savings in properties or in stocks and shares and earn handsome returns. But the middle income and the lower income groups have not the means to join the club of property owners or investors. Their total wealth, apart from the Housing and Development Board flat, consists of some meagre deposits in banks, finance companies or the Post Office Savings Bank.

There is another area in which Government can do something to assist some of the wage-earners, namely, increase the tax reliefs for personal income and for the maintenance of wife. This matter has already been eloquently raised by other Members in this House. If the Government accepts inflation as a fact, then it should also accept the fact that the existing tax concessions have become unrealistic for two reasons: reduced real value of money and rising cost of living.

5.37 p.m.

Mr Lai Tha Chai (Henderson): (In Mandarin): Mr Speaker, Sir, may I first express my support for the Minister for Finance when he presented his Budget Speech on the 4th of March. However, I feel that, as a result of the disturbances and instability in the international economic scene brought about by the fuel crisis, an economic storm has attacked the whole world and has made us in Singapore realise that this world is, in fact, a cruel and unsympathetic one. As the Minister has pointed out in his speech on the 4th of March, we had a growth rate of 22 per cent which exceeded our target of 15 per cent by 7 per cent. However, in real terms, the growth rate was only 11 per cent because of the increase in prices. Iii other words, we Singaporeans have tried our best to work hard but, because of unpredictable events, many of the results of our hard work have been reduced to zero by international inflation. Many of our middle and lower income groups have no choice but to tighten their belts to ensure a survival on this earth.

Sir, to my mind, as Singapore is a place without any natural resources, we have to learn our lesson from this unpredictable storm. It is only in this way that we can continue to establish a bright image in this situation of change and ups and downs. Our economic development has in large measure been attributed to the stability of our political situation. This stable political situation has served as a buffer against the forces from outside Singapore. This stability has also helped us to overcome the economic crisis in the 1960s. We must therefore continue to preserve and strengthen this political situation and improve our political climate.

If we adopt the attitude of a small number of hypocrites mentioned by the Minister for Finance, we would have collapsed long ago. We would have landed on the chopping block of other countries to be slaughtered at will. Sir, the Minister has pointed out rightly that this small number of idealists have over the years appeared to be full of sympathy. On the one hand, they have shown their anger and regret over the $1 increase in the school's miscellaneous fees. On the other hand, they have sent their children to expensive private schools in Australia and England. I would like to point out further that these people have all the time been afraid that their children would be called up for national service and be burnt by the hot sun when doing national service. Yet, at the same time, these are the very people who expect our police and security personnel to protect them so that they can enjoy themselves at places of entertainment at night. Furthermore, they have never intended to make Singapore their permanent place of residence. Today, Singapore may be better off than other countries. But if, on another day, more restrictions are imposed in Singapore, they will ask: why can we not allow streakers to run wild, running in and out of classrooms as they do in Europe and the United States? And when our situation deteriorates, I am sure they will pack up and say, "Distant pastures are greener. We shall be able to find a better place elsewhere."

Sir, I am sure all Members in this House will remember that not very long ago we experienced this perverted tendency. But all of us know that in our society there are birds of passage, but fortunately their number is very small. They will not be able to hinder us in our development efforts. Sir, I am afraid that if we sit back and adopt a passive attitude towards this small number of birds of passage, then our vision will be blurred and the demarcation between right and wrong will no longer be clear. We may even think that they are the privileged few, upon whom our political leaders and our people have no control whatsoever. To my mind, we should, through various means and measures, promote a solidarity and patriotic campaign so that all our people will discard the selfish narrow outlook and think of the country as a whole. They will then be able to sacrifice themselves ia order to secure the safety and integrity of our country. In this way, the small number of hypocrites and birds of passage will not be able to have their way as easily as they can now. We should isolate them and those who blindly follow their ways will be able to recognise their faults and turn over a new leaf. Sir, the Minister has painted an ugly picture of these hypocrites. If we go further and promote the spirit of loyalty and patriotism, I am sure we shall be able to overcome all our economic difficulties and bring Singapore towards a new peak.

Sir, I support fully the financial policy of the Government. I would like to ask those who are implementing the policy of the Government, in other words, the public servants, to discard all bureaucratic practices and avoid as far as possible authoritarian forms of instruction. Let us hope that all our people will co-operate closely together in a spirit of patriotism and loyalty, decide our future together, and shoulder the task of the development of Singapore.

Sir, I would like to express again my full support for the Minister for Finance in his Budget Statement.

5.47 p.m.

Mr P. Govindaswamy (Anson): (In Tamil): Mr Speaker, Sir, I beg your leave to make some comments on the Finance Minister's Budget Statement.

Despite the many unfavourable recent developments in the financial world which have affected our economy in no small way, it is heartening to note that our Finance Minister has proposed no tax increases. Instead he has proposed certain tax reliefs, such as the increase of relief from $300 to $750 for those who support aged parents. I must congratulate the Minister for this. The greatness of a government is not measured by the size of its army or by the stock of gold it holds, but by the way in which it provides services for its people, especially the poor.

The past year has seen much progress in the fields of employment, industrial growth and trade promotion. It is an achievement that calls for recognition and endorsement by every citizen.

The 9 per cent wage increase and the $25 flat increase for workers drawing a salary of less than $1,000 have certainly brought relief to the lower income group. However, all these increases would be of no avail if the prices of commodities continue to rise. I therefore urge the Government to adopt measures to keep the prices of essential commodities down. The setting up of WELCOME Supermarkets and SAFE Supermarkets has to some extent helped the workers, but these are too few to benefit the majority of our people who live in various parts of the island. While it is true that the prices of commodities are somewhat cheaper in some of these Supermarkets, the cost of transport would offset the saving. I therefore urge the Government to set up more such Supermarkets, and to set them up quickly.

The public transport system has recently been revised, and while it is claimed to be an improvement, workers are complaining that it costs them more to move from place to place. The new bus lanes which are designed with good intentions to relieve traffic congestion have produced more traffic jams than before. Mr Speaker, Sir, therefore, we have to take steps to improve the transport system.

The recent increase in charges at the Government hospitals and outpatient dispensaries has caused considerable hardship to the poor people. It now costs $3 per visit per person at any Government clinic. When one member of the family catches a cold, it will invariably spread to other members of the family, especially the children. If one has three or four children, then it would cost the family in the region of $15 per visit to the clinic for treatment. For families earning $200 or $300 per month, this is certainly going to cause hardship to them. While I agree that the cost of medical treatment is rising, I am sure it does not cost $3 to treat a person for a common cold. I hope that the Government will consider the plight of the poor people who, if they are unable to pay for the treatment, will have to suffer quietly, because the $15 could well be the marketing money for a couple of days for the family.

For the Government to function efficiently, it is important that its civil servants be given fair opportunities for advancement. While new recruits in the Service are people with better academic qualifications, the older officers who have proven their worth over the years should not be discouraged. They should be given fair opportunities for promotion. Short of this, there would he no incentive for hard work.

It has been the declared policy of the Government to bridge the gap between the haves and the have-nots. I have no doubt that the Government is vigorously pursuing this policy, and I venture to take this opportunity to draw the attention of Government to some of the difficulties of the have-nots. I am aware of the difficulties to be encountered in trying to achieve this objective, and I am sure future policies will be made with this in mind.

In conclusion, I support the Minister for Finance's Budget Statement.

5.50 p.m.

Mr Ivan Baptist (Potong Pasir): Mr Speaker, Sir, the Minister was indeed most eloquent and adroit in diplomacy when he presented his painless budget to the House on the 4th instant. But it was as expected, for was not the pain inflicted on the populace during the better part of 1973 and earlier this year when time and again Government upped costs for the citizens in petrol taxation, Housing Board flats, electricity, and so forth? Goodness knows how Government was also responsible for the inflation that hit the Singaporean these last 12 months~

In these hard times, Mr Speaker, Sir, the Singaporean was eager to hear the euphony of a reduction in taxes, especially income taxes. 1 would like to elaborate on income tax reliefs which were rather skimpingly covered by the Member for Katong and expanded on by other Members. I too believe that the present high cost of living demands more realistic tax reliefs. Funny but true, a wife in these times is worth only $1,000 tax relief, and the first two children, $750 and $500 respectively. Most certainly it costs much more in these hard times to maintain them. Singaporeans are understanding and do not ask for maintenance; just additional tax reliefs to make it possible to manage, after having cut down much expenditure.

The grave concern is that the pay rises over the last eight months are being more and more diminished in value at the time of payment because of inflation and because the income tax personal allowances have not materially changed. There must be a more equitable system of taxation. There must be a radical extension of the existing degree of exemption to workers of low earned incomes, and more realistic personal allowances and bands of income chargeable at the reduced rate of tax, in order to provide substantial relief to those most in need. A direct way to help the lower paid worker is to raise the level at which earned income is exempt from taxation in order that lower paid workers should pay either less tax or even no tax at all.

I ask for a system that should be one of giving relief by way of taxation to low-paid workers. The lower paid worker is still paying too high a share of taxation. The system, at present, is regressive at the lower levels of income. It is the very essence of a capitalist society which we have come to reject. It is conceived in inequality and misery and its product even today is still unnecessary poverty among pensioners and lower-income groups.

There could be some loss of revenue and alternative taxes may be an unavoidable consequence. With a desire to reduce the heavy burden of income tax on low earnings, the alternative taxes must show a preference for higher direct taxes on those with higher incomes as against any further marked shift to indirect taxes which take very little account of the ability of people to pay them. A clear example is purchase tax which bears proportionately much more heavily on working class households.

Let me once again stress that if more money is needed by the Government to offset the cost of increasing the personal allowances, let the Government take it from those who can best afford to pay in order to assist those who most need it. I recognise, of course, that tax relief can only be a partial answer to the financial problems of the lower paid workers. I recognise, for example, that tax reliefs are not of much help to those low-paid workers who already pay little or no tax at all. But there are ways of improving social equity. One such way is to improve earning opportunities of workers in industry which pay low wages because they are not as efficient as they can be.

Before the present Government came to power, a great deal was heard about the necessity for doing justice to the lower paid workers, but not enough has been done. But, to be fair to the Government, we must accept that Singapore has moved some way towards implementing this justice. Unfortunately the Government is only doing the slow foxtrot. What is needed is a quick step without a twist. It is therefore high time that the vague easily misunderstood talk in favour of the lower paid was replaced by action, directly understood, to leave them enough to live on in decency.

6.00 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I have listened with close and rapt attention, as I always do, to the remarks of hon. Members on all the points which they have raised today, touching on the financial policy of this Government. I did so with a view to adopting any constructive suggestions raised and to repairing omissions in the policy which I have tried to outline with some fullness in my Budget Statement. Let us not mistake the fact that we are in the midst of one of the difficult periods in our economic history; that the right economic and financial policies to meet the situation will be important, if not critical, and that any ideas or innovations which enable us to adapt to the new situation ought therefore to be very carefully explored.

I must therefore confess to feeling some disappointment at the somewhat, if I may be forgiven to say, meagre contributions, which this debate has made, to the solution of our economic problems. While I appreciate some of the complimentary remarks made on the Budget Statement, although there were critical ones also, especially the last one, I am saddened to see that, with the exception of perhaps the Member for Katong and the Member for Henderson, there has not been the comprehension that I had hoped for from all Members. This may not be entirely unnatural in respect of some of the economic and financial statements, but I had expected at least some ready appreciation of the spirit and philosophy of the Government's policy on taxation and the implementation of those policies.

I touched on the philosophy of Government in dealing with the problems concerning the public, as had been voiced in the press and also faithfully reflected by hon. Members in this House both in parliamentary questions and again in this debate. That philosophy, I must repeat again, is not to encourage passengers although we may have to carry some of them from time to time, out of our compassion for giving social justice. Our intention is to provide for equality of opportunity. And we shall give every citizen or, if he is not capable of benefiting, his child or grandchild, the chance to be productive, to be able to improve himself, to move in the scale from the category of unemployed or of unskilled worker to the category of skilled worker and to the professional and brain service worker, so that he will draw the higher income and richer reward which must attend the acquisition of such skills and of the higher productivity which such skills generate. In this society there are no barriers to such mobility. If there are, we must try to remove them, and we shall not spare any expense, whether it be by formal education, informal training, or learning on-the-job.

Subject to these remarks, I am glad of the very general support which Members of the House have given for the Budget and for welcoming the tax concessions which I have announced. Of course, they do not satisfy all Members and I do not expect them to satisfy even the majority of Members. In the previous Budget debate I think I had some idea of the Members' desire for additional reliefs for taxpayers and their wives under the Income Tax Act. Unfortunately, any Finance Minister must weigh the possibility of giving tax concessions or tax reliefs and their cost, with the additional expenditure that may be expected, and which I have outlined in my Budget Statement, to meet the additional cost of fuel. The additional reliefs which have been suggested for taxpayers and wives would have been very considerable. Perhaps I may disclose that I did try to work out what an additional $1,000 tax relief for every taxpayer would amount to, and I decided that the figure was not one which I could readily accept and concede in this Budget.

I noted the comment of one particular Member, a rather plaintive suggestion that Budgets are not what they used to be, as no taxes but only tax reliefs were announced in the Budget Statement. I hope other Members will contain their dissatisfaction with this particular practice. I have tried to explain exactly what I proposed to do at Budget Statements, and that was that there would be no major painful additional taxes if the economy, and therefore the additional taxes generated by the economy, grows at the rate we expect it to grow. Last year's growth rate was perhaps not quite as large as we would have liked. In the past we used to calculate our growth rate at current prices, and we did not make too much distinction between the real growth rate, which was probably one or two per cent less, and the growth at current prices. Unfortunately, although our 1973 growth rate at current prices was 22 per cent, our real growth was considerably lower. Nevertheless, I did not think that there was any need in this Budget to impose additional taxes. That might be necessary if the economy turned down. Perhaps the practice, which the Member for Telok Blangah complained, of announcing no new taxes will have to he reconsidered at this time next year.

The Member for Telok Blangah also made a few remarks on "flags of convenience" and why I should have given concessions in regard to shipping. I would only say that countries like Liberia do not establish concessions for shipping purely because they thought it was a fashionable thing to do. Obviously there are benefits to be obtained by any economy which decided that this was desirable, and I think that Singapore will benefit also from the amount of additional business which would be generated by the exemptions I have given for tax on shipping. If he could convince me that I am wrong in this assumption, I will be very glad to revise my views on exemption of tax.

The Member for Telok Blangah also suggested amendment of section 44 of the Insurance Act in order to bring the figure of $10,000 somewhat nearer to the $50,000 level, similar to the exemption I have given for estate duty. I have noted this suggestion and will in due course consider an amendment to the Insurance Act.

The Member for Potong Pasir made some comments on direct and indirect taxation, and I was somewhat puzzled by his suggestion that our income tax system is regressive. It is against most expert fiscal opinion, and I will be very happy to consider any better form of taxation which will do greater justice to the lowly paid worker as against the higher paid worker. Certainly it will be quite an innovation and we in the Ministry of Finance shall always be pleased to learn.

With regard to his mention of purchase tax, I say that there have been no indirect taxes or, if there are, they will be lifted except for articles like petroleum, liquor and cigarettes. There, I think, perhaps we should save the lowly paid worker from extravagance in these and raise his real income.

With regard to the remarks on the economic conditions, only the Member for Bukit Ho Swee mentioned the oil crisis. He commented on this, no doubt, because of his union connections with the oil industry. Of course, all of us are envious of the very considerable profits which the international oil companies have made, and we only hope that if any of these profits are made locally they will be ploughed back into investments in petro-chemical and other plants in Singapore, thus helping our economy to grow at a more rapid rate.

One of the topics that has recurred in the comments of most Members is on inflation and prices. Now, this is a difficult problem and I have touched on it very fully in my Budget Statement because I realise its importance and its effect on the common man in Singapore. I am very conscious that we can do a lot more, and I am grateful for the many remarks which have been made here for the improvement of actions against inflationary prices. Of course, some of these remarks are fairly technical. For example, the Member for River Valley and some other Members have suggested enactment of the Protection of Consumers Act. This is one which will require fairly considerable study by my Ministry. I will certainly give consideration to the suggestion to monitor the standards and quality of products being imported in competition with our own manufacturers. I think it is fair that they should be of a quality no less than what is certainly available already from our manufacturers. However, since there are going to be multilateral negotiations on tariff and non-tariff barriers, we have to be careful in our actions to see that we do not create what may be considered a non-tariff barrier, thereby bringing us to the attention, and possible retaliation, of other countries. Nevertheless, we need to look into this matter very carefully.

At the same time I would also urge the Member for River Valley, in view of his connections with the industry and employers, that he suggests to and urges the Singapore Manufacturers Association and fellow manufacturers and employers to set standards for their members to prevent profiteering, whether of quality or quantity, as any defect in any product will merely sully the reputation of the whole of the manufacturers and employers, and not only the few responsible for poor quality or quantity.

One suggestion which has been made by the Member for Telok Blangah was in relation to CASE and the need for Government support. I need hardly say that we welcome all the help that CASE can give and we are prepared, to the extent that this is needed, to support with sound financial assistance the operations of CASE.

There was one suggestion by the Member for Jalan Kayu which I thought not quite relevant to the problem of inflation, but he said it would be one method of dealing with it. This is the idea that inflation would be curbed if action was taken by Government to prevent rents from rising through unscrupulous landlords. As this idea has already been put in a Question to my colleague, the Minister for Law and National Development, I need not touch on this particular suggestion.

The Member for Bukit Ho Swee made rather emotional remarks on profiteering. I hope that profiteers will take note of the very strong feelings which have been generated not only in him but also among the public. I can only say that we shall try and accentuate the measures which we have taken, and we shall see that there will be punishment to fit the crime where the crime is not caused by external factors.

The Member for Moulmein raised some questions on wage earners. He said that wage earners were most badly hit as compared with hawkers, shopkeepers, and others. Like the Member for Moulmein, I have very considerable sympathy for the wage earners and I hope the National Wages Council will consider their position suitably when recommendations are being made.

Nevertheless, I think the Member for Moulmein also thought there is a need for increasing the savings of wage earners by increasing interest rates. If there are sufficient funds for savings through the Post Office Savings Bank, and so on, his rather innovative suggestion for higher interest rates of 7 or 8 per cent would certainly draw these savings out, although I would rather hope they are already in the Post Office Savings Bank or in the Central Provident Fund. Of course, some of these savings, like the CPF savings, come to Government, when the Government issues bonds, at certain interest rates. If the Government should increase the interest rates to 7 or 8 per cent, it would mean that, for example, it would lend to the Housing and Development Board at higher interest rates. Thus the low wage earner who wants to buy a Housing Board flat would have to pay a higher price for the flat. Therefore, there are consequences to his suggestion which require to be gone into with some care.

I think these were the more critical areas which Members have considered necessary for Government to deal with. But there were also suggestions on manufacturing industries and trade. The Member for River Valley has suggested that we have not done enough to attract supporting industries. While I am conscious of the need to attract such industries -. I have in fact offered incentives and financing from a $100 million fund which has been set up-he is quite right in saying that not very much has been spent from this fund. But I do not agree with him that we have neglected these industries for the more glamorous industries which he thinks we are trying to promote. In fact, some of the more glamorous industries and the multinational industries require supporting industries, and have made inquiries on what facilities are available. In my Budget Statement I mentioned that of the new industries which are being attracted, a considerable number are very highly efficient and highly technical supporting industries which I was very glad to notice are among the investments which have been committed. I hope the result of our promotion efforts will be evident in the next one or two years.

There was also a suggestion that the training of our workers needs to be improved. I fully agree to this. I am always conscious of the need to increase skills and to increase our brain-manpower. Now, the analysis of why we have not got sufficient skills and brain-manpower is, of course, rather more difficult. The Member for River Valley suggested more inducements and awards to teaching staff for research to improve the morale of the lecturers in our tertiary institutions, and he suggested a $2 million grant for research. These are all very praiseworthy suggestions, and perhaps they ought to be given fuller consideration than I can do just by listening to him.

The Member for Jalan Kayu suggested that further export promotion might be carried out. I fully agree with him that we can do more in the coming year and will give adequate financial support for this purpose.

There were quite a number of other points which were raised, dealing with education, hospitals, health, social services and so on. Perhaps I am not in as good a position to deal with them as the Ministers in charge who will no doubt be very fully questioned and who will give detailed answers to all the points which have been raised by Members. Perhaps some of the criticisms are not always pointed at the right direction and some may be based on the lack of comprehension or misunderstanding of the policy of the administrative machinery of implementation. Some of them may he simply matters of misinformation. For example, the Member for Anson raised the question of fees for outpatient treatment. I believe the fee per attention is $2 and, of course, he made very much play of a family having colds and having to pay $3 per person in the family so that the total charge would be exorbitant. Perhaps that is an exaggeration and maybe the particular family is more hypochondriac than most of us are. Nevertheless, his points are those which members of the public feel perhaps very strongly, and no doubt they will be pressed again in the questions which are addressed to the Ministers at the appropriate time.

There was some mention of the transportation system and of bus services. In an earlier question, there was suggestion that I mentioned that the management had been corrupt. Anyone reading my Budget Statement carefully would see that I did not make such an allegation, but that I thought that institutional management was necessary and that we did not want conditions obtaining as were prevalent in the Singapore Traction Company days. I think all of us are agreed that some emphasis should be laid on the solution of the transportation problems in Singapore. Quite a number of Members touched on this subject as well as on other matters connected with transportation, like the mass rapid transit system and the long-range traffic solution. I need only say that as far as I am concerned the financing of solutions to this problem will receive special attention in my Ministry. My Ministry is involved in both the Road Transport Action Committee and in the financing of transportation by international bodies, such as the International Bank for Reconstruction and Development, the Asian Development Bank, or perhaps from local funds. The remarks which Members have made on trans- portation generally will receive attention from my Ministry as well.

I would also like to mention the Member for Sembawang's remarks on the inadequacy of allocation for social services. I thought that when preparing my Budget the amounts which I have allocated for economic development this year did not, in fact, come to as much as my allocation for social services generally. Perhaps this is not quite the best sort of allocation, so that maybe next year rather than increase social services relative to economic development, I will have to consider some reduction. But perhaps in absolute terms the Member for Sembawang will get what he wishes.

Mr Speaker, Sir, finally, I would like to end this debate by stressing again the necessity of all of us pulling together in order to overcome the difficulties that we expect in the coming year and to achieve a satisfactory growth rate for 1974. When I made my forecast in the Budget Statement of perhaps a 10 per cent growth rate for the earlier part of this year at least, I must say that the outlook for the second half of the year was not quite as promising as now we have reason to expect. The developments in the possible lifting of the oil embargo and the highest (Nixon-Shultz) level of economic forecasting in the United States show that the second half of the year would improve on the first half of this year. Whether that kind of economic forecasting would be correct, only time will tell.

Question put, and agreed to.

Resolved,

That Parliament approves the financial policy of the Government for the financial year 1st April, 1974 to 31st March, 1975.