ADDENDUM TO PRESIDENTIAL ADDRESS AT THE OPENING OF THE SECOND SESSION OF THE THIRD PARLIAMENT ON FRIDAY, 21ST FEBRUARY 1975 MINISTRY OF FINANCE

The primary aim of economic and financial policy is to counter the effects of the current world recession and to prepare ourselves for economic recovery. Provided that we use our resources intelligently, we shall continue to achieve relatively high rates of growth.

We will offer an attractive package of fiscal incentives for new types of industries such as machine tools, precision instruments and petrochemicals. Pioneer industry tax exemption will be extended from five to ten years for the most deserving industries. Not only do they require heavy investments in plant and machinery; they also need highly skilled workers. Our workforce must be better educated and better trained.

We will help existing industries to improve and expand. At the same time, we will not overlook other sectors of the economy such as construction, trade, tourism, transportation and other service industries.

Spare construction capacity and labour now available will be used to expand our physical assets. Large amounts of capital will be required to expand wharves, industrial sites, telecommunications and airport facilities.

Such investments have to be financed by public funds. A sizeable contribution averaging $500 million annually is being made from the Main Budget to the Development Budget. But with a less buoyant economy, existing tax revenues may not be sufficient to meet capital needs. We may therefore have to draw upon the foreign exchange reserves we have built up. These fortunately are considerable and should be more than adequate.

The Monetary Authority of Singapore will continue to deal with the problems of a disordered international monetary system. It will supervise and regulate banks and finance companies more sensitively. For more efficient management of our reserves, the Monetary Authority of Singapore and the Board of Commissioners of Currency will be merged into a central bank with powers of currency issue. The 100% backing in gold and foreign currencies of the Singapore Dollar will be maintained.