ANNUAL BUDGET STATEMENT

Order read for Resumption of Debate on Question [3rd March, 1975], `That Parliament approves the financial policy of the Government for the financial year 1st April, 1975 to 31st March, 1976.".-[Minister for Finance].

Question again proposed.

2.43 p.m.

Mr J. F. Conceicao (Katong): Mr Speaker, Sir, I would like to congratulate the Minister for his Budget statement. It was short; I dare not say it was short and sweet. It was a brief, businesslike presentation, reviewing economic policy against the scenario of the economic survey of Singapore 1974 and the Memorandum on the Main and Development Estimates, as well as the detailed estimates themselves. Not long before the Budget statement, of course, the President's Speech at the opening of Parliament outlined the general policy of the Government. All these should make up the total backdrop to the presentation of Members' views today.

The Government has, of course, to be praised for having guided us through 1974 adroitly, managing a relatively good growth rate, encouraging or contriving diversification in the manufacturing sector in terms of manufacturing activities, and in the trade sector, in terms of markets. In respect of trade, while vigorous marketing is of course important, emphasis must be laid on the quality of goods supplied, but very important also, on the integrity of our traders.

While there is no doubt that the great majority of our traders are reliable, there have been one or two black sheep. For instance, a very bad example has been set by one or two exporters of sawn timber who have indulged in such malpractices as to bring upon themselves, and unfortunately on others too, the distrust of buyers. It is significant also that ungraded timber is shipped mostly to west Asian countries and this is particularly one area in which, as the Finance Minister's Budget statement states, we are seeking new markets. Our merchants know that the best advertisement is the quality of their goods and service. We should make it very clear that we will not allow a few to spoil the good name of the majority.

Quite early in his Budget speech, the Minister referred to the importance of tourism in the services sector of our economy. Even you, Mr Speaker, in those days, when as a Backbencher you could speak, you did touch on the importance of protecting our tourists from dishonest dealing. I think this matter has been taken care of, and is continually being looked after. But more recently on another aspect the Finance Minister remarked publicly that there is no reason why the tourist industry should help to import the more undesirable manifestations of Western life-styles.

There is also every reason indeed, Mr Speaker, why the tourist industry should help in the promotion of our cultural development through greater encouragement of the arts, and propagation of life-styles that will result in tourists having a good opinion of us not only for our material achievements, but also for our pleasing and respectable cultural attainments. I think this is a more correct picture for them to take away.

With regard to expansion of tourism, I myself do not have it very clear in my mind as to whether it is owing to the efforts of the Singapore Tourist Promotion Board that we are getting more tourists, or whether people would come in any case on the basis of promotion by our national airlines, our missions abroad and by the natural advantages of Singapore's convenient location, as well as by other features, as for example the fact that Singapore is a clean city with green and pleasant surroundings, and has also a reputation for being well-run. What stands out as a particular achievement of the Singapore Tourist Promotion Board is the discovery of a rather controversial location for Sir Stamford Raffles' landing. Other contributions to tradition and cultural development do not seem to prevail very much. It is interesting to note that more tourists from ASEAN countries are visiting Singapore. Let us show them that we are conscious of our own history and commendable past and that we appreciate the finer forms of expression.

To help in this, I would like to bring up the view held by many that some part of the proceeds from the cess levied on tourist establishments he given over for the patronage of artistic and cultural development.

The Budget statement sounded a note of firm confidence in the face of continued uncertainty in world economic conditions. We show confidence in ourselves and we know that others are confident in us. And this I say to our people: let us not do anything to affect this confidence in any way. The Member for Changi has, during the debate on the President's Address, expressed his concern over the possibility of Communist exploitation of economic uncertainties as well as of come-back attempts by right-wing political opportunists. The Member for Boon Teck has also referred to unwelcome interference by "ugly adventurers" in our internal political affairs.

Not too long ago we witnessed at the University of Singapore some manifestations of student unrest. In respect of students experiencing an awakening within their souls to the realities of conditions in the adult world they find themselves in, the members of our society should look upon this with some gratification. We should not feel too perturbed or surprised even over our discovery of evidence of intellectual activity at the University of Singapore. We should be happy that our undergraduates are studiously exercising themselves over moral issues as to the kind of society we should have and the right relations between man and man in our society.

At the same time we should also remember that the student movement is the easiest thing in the world for those with unwholesome intentions to penetrate silently and surreptitiously. In the spring of 1967, Ramparts magazine published a most significantly revealing report. The report claimed that the (American) National Student Association (NSA), to which was affiliated student unions on more than 300 campuses all over the United States, had been subsidised for 15 years past by the Central Intelligence Agency.

This support from the CIA had been to counter Soviet influence in the international student movement, which had been evident since as far back as 1946, when Communist delegations gained control of the first World Student Congress, which met in Prague. More recently, there is also a fair amount of evidence of Communist penetrations of the Students for a Democratic Society (SDS). In an odd way our own students show they realise their vulnerability to penetration by constantly expressing their fear of subversion by our Internal Security Department.

All in all, our students, especially those just entering university, should be warned against being pawns of shadowy individuals lurking in the background. These individuals, while espousing humanistic aims and individual freedom, cynically exploit the difficulties our idealistic youths are facing in their struggle to relate the first flush of new ideas and exciting thoughts to the realities of their social and political environment.

In the university recent attempts at expressing dissent have followed a well-beaten path, trodden over and over again by student dissenters all over the world. Sing-along sessions, the pretence of humanism hiding the incitement to hate, making a comrade of Christ, and Messiahs out of student officials, the manufacturing of martyrs, the desanctification of authority and the attempt to pour scorn on social institutions, including the judiciary directly, and even Parliament indirectly, attempts at disruption and willingness to drop out: the pattern is very clear. Our young men and women entering into university should be warned against being made use of by those who do not wish us any good.

Now let me turn to the more pedestrian domain of our school system. Of course, the Minister for Finance has made reference to some sectors of our education system which are directly relevant to manpower training and are in this way immediately related to economic progress. He has thus expressed his concern over the relationship of education to work and certainly this is a right concern. But there are other aspects of the formal educational system not immediately and patently seen as having economic significance which will have in the long run very important effects on our economic and social well-being. This should concern us especially in view of our President's injunction not too long ago that we should be guided by the long-term interests of all our people. I feel certain there are features in our education establishment and implementation of education policy, which may in the long run tend to result in diseconomies than in efficiency and optimum output. I refer to the way measures are introduced and dropped and new measures thought of and introduced in bewildering succession. In November 1974 an official statement on the restructure of the education system averred that our Republic's education system had been in operation for the past 15 years with only minor changes. This statement has resulted in my wondering whether I have rightly understood the meaning of major' and minor'. But even if the changes have not been major and have indeed been minor as alleged, then there have been so many of them introduced, and in a patchwork way, that it was right for the Member for Ulu Pandan to call out for a moratorium on these changes.

Let us sit down to think carefully of what we want to do and let us do it together, teachers and administrators -not the bureaucrats alone. Let not policy be decided in some obscure bureau and the views of teachers and their unions and other professional bodies be sought merely to ensure smooth implementation of a new system.

As early as 1968 a point was made in this House in respect of decision-making regarding educational policy. It was said that when plans were made not enough of the opinion of the rank and file of the teachers had been solicited and it was pointed out that without discussion there could not be that full and wholehearted commitment to implementation. I myself appealed in this House seven years ago, that whenever decisions were to be made, whenever plans were to be laid, we needed more than a resigned acquiescence to these decisions and plans. We needed the participation of our teachers in the thinking out of our problems.

Today, Mr Speaker, Sir, this response of resigned acquiescence to decisions is still there. What other response can there be when decisions are still made and policies thrust on teachers for them to implement and their views are canvassed only in respect of smooth implementation. Where is the optimum productivity possible under these conditions? How is the best economic effort achieved in the education sector?

There is also another matter which is related to what I would like to think of as the economic disposition of educational resources. Why is it that we try to contrive an input of all sorts of knowledge, possible and impossible, into schooling? The reason for this is that we visualise the formal school as the only place where learning should occur. That is why we tend to ask: Why has history been dropped? There is not enough second-language time. Why not include consumer education, even family planning education, safety first education perhaps, and other things? If we could only realise clearly that education is for life, then we could take more positive steps to integrate a humane and civic education into the working and adult life of our citizen.

Presently, in the out-of-school sector, we have done very well indeed in the establishment of institutions devoted to the improvement of work skills. But where education for living is concerned the time that we have at our disposal, if we think only of school, is quite inadequate. We have to think of other structures to bring about with effect and impact what is incorporated in the Chinese saying - Huo tao lao, hsueh tao lao - Live till old, learn till old.

With that let me turn to the way priorities seem to be ordered in the minds of those who decide on the Budget for items that are not related immediately to economic returns, but which are all the same important and have a long-term effect on the way our people live, learn, train, work and earn, and hence on the way we progress economically and otherwise. Let us take., for instance, the example of neglect of the National Museum. It is depressing to contemplate this aspect and I intend to say a little bit more during Committee of Supply.

Then there is the National Library. There has been a spate of resignations recently of officers in the library service. Further alarm and despondency has been spread among senior library officers by certain proposals relating to so-called economy and efficiency measures that, if implemented without careful consideration, may well result in hampering the optimum development of our library services.

Even where the traffic police are concerned, suggestions have been made to them to reduce the strength of the mobile squad. This has been done apparently in the naive belief that the introduction of the points demerit system, restricted entry into the CBD, and other new traffic regulations, will enable fewer men to do more work. By such crude economies, is it hoped that the traffic police will achieve what, up to the present, has patently not been achieved, namely, adequate volume of enforcement?

It is quite evident that when our budget authorities (wherever they are) budget for enterprises that are not immediately economically productive, they tend to think of manpower and other operating factors in terms of reducible digits. In the Memorandum to the Estimates, we learn that half the rationale behind latest improvements to the Estimates format is to enable classification of Government expenditure according to the economic impact of an expenditure. My own observation inclines me to believe that, in cases of expenditure where there is not an immediate, patent, quantifiable economic impact, then this is seized upon as justification for automatic pruning.

There does not seem to be much readiness to think in terms of dimensions of a problem, or the aims of a project - what it is hoped to attain by it. Productivity is demanded in a simple way: greater output with fewer digits. This is like the father in a family economising by giving his children less to eat. Whether they will do more work because they are lean, or much less because they are starving - this may well be a less simple judgment to make.

When a look is taken at productivity, it may be all too easy to come to facile, unctuous conclusion about the necessity for pruning. One has to guard against this mistake. For example, I had occasion, only a few days ago, to visit Fullerton Building. There I passed a department of the Ministry of Finance. While waiting, I saw a few of the staff of this department, sauntering between desks, lounging, and talking with one another, full of smiles. But I said to myself: "My, these workers are indeed happy. They must surely be owing this happiness to the efforts of the Management Services Department."

And now, Mr Speaker, Sir, if the Minister will allow, I would like to comment on the bland way in which the Minister presented his Budget statement. There was no break in this bland quality even when he came to the part where he talked about additional revenue having to come from increased taxes on items, 1 quote, "not basic to life for the average family". This imposition was, I think, greeted with mixed feelings on the part of Singaporeans - a little irritation mixed with a little relief: relief that the imposition had not been heavier because there were rumours that the tax on cars, for example, would be high indeed. And a little irritation because at least one of these items, namely the car, is not considered so much a luxury, under present circumstances, as almost a necessity to large numbers of people, judging by the perennial parking problem even in HDB precincts and other places where the average citizen dwells. The principal way to make people less attached to their cars is to make travelling in public transport so much less deterring than it is today, that people will not mind sacrificing the use of private vehicles.

There is no doubt that one aim of the imposition of additional road tax is to add to the discouragement of individual car ownership. Most people feel, however, that this measure will not succeed - and the people who feel so are the people who own the cars. I appreciate that it is necessary, in order to make public transport a success, to ensure a high volume of users of public transport, who will later patronise the mass rapid transit system. Thus it is necessary to discourage individual car ownership wherever possible. And I support all encouragement given to the use of public transport. But apart from quasi-punitive measures, it is a positive and radical transformation of the public transport system that will eventually turn people to its use.

However, we should not forget the revenue-collecting purpose behind the imposition of the additional car tax. A respectable $26 million is anticipated. But the burden will be chiefly borne by those who own small and medium-sized cars. It would be interesting to know how many of these owners also run small and medium-sized businesses. It is hoped that, in such cases, the taxes will not be passed on to the consumer, in another little boost to inflation.

Especially as the Government has, by its own measures, done its part, otherwise, in arresting the rate of inflation. Comparing 1974 with 1973, the rate of increase in the cost of living has slowed down significantly. However, food contributes nearly 60% to increases in the Consumer Price Index. There is reason, therefore, for us to welcome the coming Government campaign to drive home the message that good food need not necessarily mean the higher priced food. Success in the campaign will not only help the housewife in her domestic bud-getting but will perhaps also contribute towards pegging down general food prices somewhat. I wonder, though, if we should not give thought to the possibility that success in increasing the demand for lower-priced foodstuffs might send the prices of these foodstuffs up a bit.

Mr Speaker, Sir, on the whole, there is very little doubt that the Government has done well for the citizens who gave it their mandate. And it is geared under present recessionary conditions, to maintain a fair rate of development. The Estimates show nearly a 50% increase, in FY 75 over FY 74, in Government's direct expenditure on development (excluding expenditure on the Armed Forces). Significantly a sum representing about one-tenth the amount of this direct expenditure will be spent on public works, especially roadworks, necessitated by development of housing. Nearly $850 million has gone into loans for housing. There is nearly a 40% increase in the amount of loans to Statutory Boards and Companies, including over $700 million in the Ministry of Finance's Development Estimates.

And so the catalogue goes on, Mr Speaker, Sir. The Budget papers indeed make fascinating reading and I would recommend them to anybody who is in need of a morale booster, for they detail our achievement and they show our faith in ourselves and our hope for the future.

3.12 p.m.

Mr Sia Khoon Seong (Moulmein): Mr Speaker, Sir, 1974, as we know, was a year of economic crisis for non-oil producers among the industrialised countries and the developing countries of the world. The energy crisis, exacerbated by the sudden quadrupling of oil prices, had a crippling effect on the economies of the industrialised bloc and the third world. The oil consuming nations suddenly had to grapple with a grave economic crisis. Forecasts of zero, and even minus growth rates of GNPs of industrialised nations were made.

Amidst this grim scenario of economic crisis, the Hon. Finance Minister, in his annual Budget statement on 3rd March, 1975, announced that our real rate of growth in 1974 was 6.8%. This is certainly a satisfactory economic performance, particularly, when our economy, which is a trading and export-orientated economy, is very much more susceptible and vulnerable to changes in the pattern of global economic activities than practically every other country. Even the most vocal critics of Government could not grudge the Government the compliments for the satisfactory performance of our economy in 1974. Only prudent management and sound planning coupled with able, determined political leadership and courage could have made possible such an achievement. Let me join in with the many voices that offer congratulations to the Hon. Finance Minister and his Cabinet colleagues on their past year's performance and express confidence of witnessing our country's continued success under their stewardship.

Having said that, let me hasten to add that I am not without any criticisms regarding the Government policies and the annual Budget statement.

The Hon. Finance Minister would have been given more accolades if he had made some announcements of further incentives for people who support or contribute towards the support of their aged parents and grandparents. After all, there was so much fanfare in the President's Address at the opening of the present Session of Parliament of Government's intention to encourage people to look after their aged parents and grandparents. Or is the Hon. Finance Minister waiting for a more propitious moment to make such announcements?

Let me come to his not-so-very generous offer of tax concession for people capable of working beyond 55 years of age by increasing their earned income relief from the present $1,000 to $2,000 for those between 55 years and 60 years of age, and to $3,000 for those more than 60 years of age.

According to him, from our experience of the various aspects of economic development during the past few years, it has become apparent that it is extremely desirable from every point of view that our skilled and experienced people should be encouraged to carry on working beyond their normal retirement age. Then he went on to say that such people will need to spend more money on medical attention to stay healthy and fit for working. Hence, the tax concession is proposed for such people to make it worth their while to continue working after the age of retirement.

Let us now examine his tax relief proposal to see whether such tax concession would in effect achieve what the Hon. Finance Minister hopes to achieve, namely, getting our skilled and experienced people to go on working beyond their retirement age. In my opinion, and with due respect to the Minister, if there is any problem about working after retirement, it is not the problem of persuading retired persons to work. The Minister has got hold of the wrong end of the stick. For many workers, particularly those who are organised into trade unions, the problem is that of getting work rather than being persuaded to work after the age of retirement. Singapore workers generally want to continue working after reaching the age of retirement because the retirement age at 55 years is ridiculously low in the present context. With better standards of health and of living, people at that age are still hale and hearty, and feel fit to continue working, not just only to maintain their economic status, but also to avoid the boredom of doing nothing. But they are prevented by their employers from continuing to work after attaining the fixed age of retirement.

In the private sector, the reason is plain economics for the employer. In fact, an employer may not even wait for the employee to retire but retrench him before he has reached the top of his salary scale. The employer retires an old employee at the top of his salary scale. With the same amount of money he can employ three or four young inexperienced employees at the bottom rung of the salary scale. This is sometimes done without consideration of the value of the skill and experience of the old employee. The reason is simple. The personnel manager of a firm who is in charge of hiring and firing of the staff wants to show his general manager how much money he can save for his company if he retires or retrenches off an old employee and recruits a young employee. As the personnel manager is not in charge of production and is not concerned with production efficiency and schedules which depend so much on skilled and experienced employees, the problem he creates has to be solved by others. The production manager and supervisor, who apparently have not much say in the hiring and firing of employees, are the ones who have to solve the problem. But since they probably depend on the goodwill of the personnel manager for their own job security and promotions, they also prefer to keep their wisdom to themselves.

In the public sector, the prospect for an employee on reaching retiring age to continue working is just as grim. The civil service ruling on retirement age has to be strictly adhered to. True, in some cases, extension of service has been allowed, but on a temporary basis subject, of course, to the ritual of annual medical examinations.

So in the end, who are the people beyond 55 years of age likely to benefit from this tax concession? Only the Lien Ying Chows, the Tan Chin Tuans, the Runme Shaws, the tycoons, the big towkays and the not-so-big towkays are likely to benefit from the tax concession because, as bosses of their own concerns, they can continue to work beyond the age of 55 years until they literally drop dead. And the irony is that such people do not need such tax concession as an incentive to continue working. There is no better incentive than that of personal profits. I am quite sure the Government has never intended to devise tax concessions to benefit such people. If they do benefit from it, it is purely incidental and not deliberately intended.

How then, may I ask, is the Government going to achieve the objective of getting our skilled and experienced people to go on working beyond their normal retirement age just by offering the tax concession to such people as announced by the Hon. Finance Minister? Will it not be more desirable and effective to raise the official retirement age of 55 to 60 for a start? Should not the Government, as a model employer, remove the existing ridiculous ruling on retirement that Government employees who joined service before 1st July, 1956, should retire at the age of 55? Why should they retire at 55 when those who join after that date can retire at the age of 60? Surely what is sauce for the goose is also sauce for the gander. When you remove that ruling, you will be able, by a stroke of the pen, to retain the services of old public employees whose skill and experience are most valuable at a time when everything is done not only to attract but also to prevent the brain and brawn drain into the private sector. It is possible that a few may still want to retire at 55 years of age. Give them an option to do so.

And in the private sector the Government may achieve the same result, as intended by the proposed tax concession, by ensuring that short-sighted or antisocial employers do not get rid of experienced, skilled workers at the top of their respective wage scales before or on attaining the age of 55 years simply for the sake of some monetary savings.

The Hon. Finance Minister, in his Budget statement, referred to the marked slow-down in the rates of growth of revenue since financial year 1973. In the coming fiscal year, recurrent expenditure is expected to increase by 6j% as against a growth of only 5% in revenue. He proposed to collect an additional revenue of $41.5 million by way of increased taxes on tobacco, liquor and cars, as he considered them as "not basic to life for the average family". Basic or not basic, the consumers of such items would have to foot the bill for the increased taxes from their hard-earned money. Many such consumers are no more than just ordinary wage earners who work hard and pay their taxes dutifully. They do not evade paying taxes, like so many hawkers and some crooked businessmen who know how to cook up figures to avoid paying their full taxes.

I am not taking issue with the Hon. Finance Minister over the increased taxes. What I venture to do is to propose to him that next time if he wants more money, he should look into the Stock Market. I am not suggesting to him that he should use Government funds to speculate on the Stock Market and increase the State's revenue through profits derived from speculation. What I am proposing is that he should consider introducing a form of capital gains tax for business transactions of shares in the Stock Market. Look at the huge fortunes some of the speculators have amassed for themselves in the last two months. All they do is to pick up the telephone and dial the number of their favourite remisiers and speculate. What possible harm could a capital gains tax do to the Stock Market?

One possible argument against it is that it will dampen the activities of the Stock Market. I am quite conscious of the fact that the Stock Market has a vital role to play in the economic life of our State. It provides opportunities for genuine investors both big and small to invest their savings, which in turn helps to stimulate the economic growth of our industrial and manufacturing sector of our economy. But what we have seen in our Stock Market activities in the past two months, for example, and on some previous occasions, was not anything like that, it was just sheer speculation and gambling. A tax on their "winnings" as an additional source of revenue may curb speculation but not investment. If the proposed capital gains tax is imposed on stock and shares transactions which are resold within a period of, say, six months or a year, it will not affect the genuine investors. In that way, a capital gains tax should not be objectionable except to the professional speculators.

3.20 p.m.

Dr Tan Eng Liang (River Valley): Mr Speaker, Sir, I would like to congratulate the Finance Minister for his usual informative and detailed Budget address and for having presented such a vivid picture of our economy.

When the House was debating the Presidential Address, I touched on the implementation process within the Government machinery and on the need to examine the existing administrative system to determine where changes are urgently required. Members of this House also commented on the professional services, like the medical and health services, the need for better coordination between Government departments, and the need for a more effective and courteous civil service among other things.

Our civil service is, by and large, one that we can be proud of - non-corrupt and in comparison with many others a fairly efficient one. Nevertheless, there is still room for improvement. Although Singapore has been an independent country for 10 years now, it appears that the tradition of Whitehall still permeates the civil service. Some officers, even very senior ones, still carry out instructions and regulations to the letter without question or understanding. They seldom exercise discretion and work more like a robot. This is one of the main causes of frustration within the civil service itself. In dealing with the public, such an impersonalised system when carried too far can breed public discontent and misunderstanding - not with Whitehall now, but with our own elected Government. I will cite instances of such dealings under the appropriate Ministries during the debate on the Main and Development Estimates of Expenditure. Today, I will concentrate on highlighting some of the problems within the civil service, particularly involving the professional services (the medical, scientific, technical and educational services), and I would like to make general recommendations on some of these problems and how they can be solved.

Sir, we know that rapid development has created a manpower shortage, particularly in the engineering and technical fields. Many vacancies still exist in the service for these personnel, but I find it difficult to accept the explanation that shortage in the public sector of professional staff is due to pay alone. Not only few professionals join the civil service, many also resign from it. Surely not all the doctors, engineers, technocrats and teachers who resigned have done so because of financial reason alone. I have no doubt that many of these professionals who have left are dedicated people and who, if given the proper opportunity, would also like to participate and contribute to the exciting challenge of nation building. The large number of volunteers who are now serving on the various Government Boards and committees bear testimony to this. Yet many professionals who have joined the civil service have left. Some left because they have been totally disillusioned. Others left because they were frustrated by the administrative system.

It appears that among certain sections of the service, as mentioned by previous Members before me, money is all that matters. There is a phobia to make money for the Government. There is also an over-emphasis on the control of public funds, so much so that effective implementation of Government policies and achieving departmental objectives take second place at best. This practice, if not checked, can be abused or misused resulting very frequently in relatively junior officers in the Budget and in Ministry headquarters over-riding even Heads of Department or very senior professional officers. Non-professionals begin to dictate to the professionals through the budget system, completely forgetting that the other parties too have responsibilities for the performance of their respective organisations. People usually respect authority provided the authority is exercised by someone they can respect, and not one who rams authority down the throats of others by virtue of the position he holds.

I will cite a classical example. A request was made for a re-vote for a 50-cycle generator. The reply was "Re-vote for generator approved. Explain why the additional 50 bicycles are required". Another example. A department needed an equipment to generate hot air for drying purposes. The request for a hair-dryer was disapproved. However, a hot air blower was later supported.

I can cite many instances, but I feel they are quite unnecessary. They can only cause irritation and frustration. Let the professionals get down to their job and let us devise a system to minimise these incidents.

Another source of frustration is the delegation of authority relating to funds. I agree that a department's allocation should depend on the national budget, but surely the details of what is required after that should be left to the man in charge and not to a complete layman in the Finance Ministry. The irony is that a doctor is entrusted with people's lives and an engineer to design or supervise projects involving millions of dollars; yet these same people are not trusted with even small sums of money. They cannot vire even a few hundred dollars without prior approval from the Treasury. This practice often takes a long time to be approved as it is not normally encouraged. Surely, this is unnecessary unless someone is trying to preserve his authority or protect his job. Proposals for budgets are usually made months in advance. No one can predict accurately what exactly will be required. Changes are inevitable, but they are difficult to be effected under the present system. It is an established fact that very often things are bought and money spent merely because they appear on the budget, even though the items may not be required any more. Departments that leave money unspent run the risk of their following year's budget being reduced. This is a well known fact. No credit is given to officers for saving money. On the other hand, the officer may even be considered a bad planner who cannot even estimate accurately. There must be tremendous wastage of public funds in this way because of the negative approach of the present system.

With Development Estimates, large sums of money are left unspent each year. It will be interesting to know from the Finance Minister how much money and what percentage of the development fund are left unspent each year. Besides shortage of manpower in certain areas, what other causes are responsible for these hold-ups? Valuable time is also lost in this process. Projects are delayed. Can the system be improved to reduce this? What is being done to remedy this situation?

If the implementation of Government policies and programmes is badly handled by just a few civil servants because of the system, a lot of frustration can result within the service and with the public. We need a good civil service, we need to rapidly build up the vital second echelon in the civil service. I would therefore like to propose that this House either directs the Estimates Committee, or forms a high powered commission, to look into the present budgetting and financial control system and:--

1. To recommend measures to improve the existing system and reduce friction and dissatisfaction; and

2. To determine which departments should be made autonomous to take them out of the bureaucratic system.

Recently we read in the newspapers of the recommendation to set up the Department of Civil Aviation as a statutory board. I believe that the development of this very important Department and our Air Terminal could have been very much accelerated, if not for the bureaucracy involved.

I am not advocating that we dismantle the entire system which has worked so far. What I am suggesting is that we must not be blinded by our success and ignore the weaknesses and faults in the system which, in the long run, can stifle its growth. I salute the dedicated civil servants who had stuck to the service through the difficult times we had gone through the last 15 years. At the same time we must recognise the problems and make the necessary changes to continuously improve the service. As we enter the technological age and under rapid changes, new priorities and programmes would require a civil service that is dynamic and responsive to the needs of the times, ready to meet and surmount new challenges. As a responsible Government, we must govern firmly, wisely, efficiently, but also politely. We need an effective civil service at all times to do this.

3.34 p.m.

Mr Hwang Soo Jin (Jalan Kayu): Mr Speaker, Sir, I would like to join my colleagues in congratulating the Government for guiding the nation through a very difficult year. Although we have been affected by worldwide inflation and a slowing down in economic activities, our economy has nevertheless emerged with an impressive gain of 6.8% in GDP and we are still able to show a surplus of $708 million in our balance of payments. This is impressive by any standard and has been due largely to the far-sightedness of our political leadership in embarking upon the restructuring and diversification of our economy over the past decade so as to give it a broader base. It is this broad base that has provided us with the cushion to withstand the series of shocks generated by external forces. The tough-mindedness and resourcefulness of our business community with their traditional "do or die" attitude have also contributed in no small measure to our success.

In going through the economic survey one cannot help but feel that, in out enthusiasm for industrialisation and in developing Singapore into a financial centre over the past few years, we might not have given sufficient attention and credit to some of our traditional economic activities. It takes a difficult year such as the one just passed to impress on us the important role played by some of these traditional sectors of our economy. I have in mind particularly tourism and entrepot trade. In both areas, I submit, Sir, encouragement and incentives have not been adequately provided in recent years. If anything, the combined effect of the series of unilateral government departmental actions has resulted in drastic increase in day-to-day running expenses, much to the dismay and distress of the people concerned. For example, in the case of hotel trade, the increase in PUB and other government charges has imposed quite considerable financial strains on the management, especially bearing in mind the already substantial increases in wages in recent years. From enquiries made I have been told that there are altogether some 20 items of licences and other fees payable to approximately nine to ten Government and quasi government departments by a hotel in the course of any one year. Some of these fees and charges are payable yearly whereas a number of them are on a monthly basis and require personal visits to the departments concerned. You can well imagine the inconvenience and the time involved in attending to all these payments. And what is the Tourist Promotion Board doing in living up to its name? According to the Minister, a sum of $3 million has been collected from hotel cess. I do like to know how this amount is being spent in promoting tourism.

Incidentally, according to the Tourist Promotion Board's report for the year 1971/1972, the total cess collection for that year was estimated to be in the region of $5.9 million. What has accounted for the substantial drop some three years later'? Frankly I have my doubts as to the effectiveness of the Board. The increase in the number of visitors to Singapore - I agree with the Member for Katong ~ has perhaps been due more to the promotion efforts of SIA and other private organisations than to the efforts of the Tourist Promotion Board. If this is the case, then what is the justification for the cess? The ineffectiveness of the Board is amply demonstrated by the fact that the most up-to-date report of the Board is for the year 1971/1972, three years behind time.

For an organisation whose primary function is public relations, I would have thought that the publication of annual reports is a matter to be taken seriously and not just perfunctorily. A well prepared and up-to-date report I should imagine can be used most effectively for publicity purpose abroad and may save us some money on the production of other promotion brochures. There is I feel an urgent need to re-examine the role and function of the Tourist Promotion Board. In the area of entrepot trade, traders have also experienced much higher running expenses: just to mention a few - higher storage charges both at PSA and private godowns, higher transportation charges and much higher bank interest rates during the year caused by tight credit squeeze. The last item has squeezed the life out of many traders and the high cost of money has affected all and sundry, whatever their activities. Surely it is possible, and in my opinion necessary, for the Govern- ment in introducing any fiscal or monetary measures to differentiate those making a positive contribution from those making a negative one to our economy. Any hasty decision aiming at internal administrative convenience without an in-depth study of the possible adverse consequences is likely in the long run to result in disincentive and to cause loss of confidence on the part of the people.

The Minister has touched on the setting up of the Economic Activation Committee. In welcoming this move, may I suggest that apart from any other purposes contemplated the Committee be directed to review Government policies or the lack of policies towards some of our traditional activities, with a view to ensuring that they do receive adequate support and incentives if need be and that such activities are not unduly disturbed or disrupted on account of thoughtless action on the part of any particular Government or quasi-government departments. May I also suggest that any future increases in Government charges or any official measures likely to result in heavier financial burdens to the public be referred to the Committee so that the question of justification as well as their wider implications may be more thoroughly and objectively assessed. In this way perhaps we can look forward to a better co-ordinated approach on the part of the Government in all matters affecting the growth of our economy and the cost of living of our people. I should clarify that in putting forward my views I have no intention of seeking subsidies for our business community. Our businessmen are hard-headed and certainly not without backbone, initiative or drive. What they ask for is fairness, better understanding and greater appreciation on the part of the Government of the mounting problems encountered in an increasingly more difficult and competitive world. Some of these problems are beyond them and do call for Government support and attention.

Sir, despite our global concept in economic development it is evident that the ASEAN community of nations will remain our most important partners in our continued endeavours for greater economic growth in the years ahead. With improved relations and the general realisation of the need and the importance of interdependence throughout the region, we can look forward and should work for the closest cooperation. We should join our friends in identifying areas that are capable of coordinated developments. In the area of industrialisation there is a growing public sentiment that in recent years the Government does not appear to have done enough in promoting local participation. Whatever incentives that have been formulated with the foreign investors in mind, I feel it is important to ensure that a fair balance is struck between foreign investments on the one hand and local on the other. The setting up of a bureau for joint ventures is therefore to be welcomed, but in all joint ventures we should ensure that the arrangements between the interested parties are such that our own nationals will have an opportunity to participate actively in the day-to-day affairs of the companies so that over a period of time they will be able to acquire the necessary expertise and the managerial skills which are so essential to our further growth. Past years' experience has shown that over-reliance on multi-nationals tied to only one or two major markets abroad does not do us much good from a long term point of view but it is likely to cause social and economic instability from time to time. In our continued endeavours to attract foreign investment, we should therefore aim for greater diversification not only in terms of the types of operations but also market dependencies. At present we seem to be concentrating our investment promotion efforts rather too heavily in the United States. This is reflected by the fact that out of a total of nine centres three or four are in the United States.

In looking at our international trading position it is disturbing to note the widening trade gaps with our three major partners, namely, Japan, America and the EEC countries. The gap between Singapore and Japan is parti cularly alarming, amounting to some $2,000 million in Japan's favour, followed by EEC's $900 million, and thirdly USA's $757 million. We do not ask for the so-called "most favoured nation" status. All that we want is equity and reciprocity in international trade. I do like to know what the Minister proposes to do to narrow the trade gap in each case, especially in the case of Japan. Surely they cannot take us for granted just because we do not show our dissatisfaction in a violent manner as some people do. The fact that part of the imbalance may be due to our increased spending on capital goods does not in my opinion lessen the obligation on the part of our trading partners to try to correct the unsatisfactory position.

Sir, turning now to the proposed tax increases, I think you will agree that the Budget this year cannot be described as a painless one. What little concession offered has limited appeal, and appears to contradict the announced intention to make it more attractive for young couples to have their parents stay with them. On the one hand we say that it would be good for the younger generation to have their old folks live with them so that the parents can help look after the children's children, and towards this end we are offering incentives. Yet, on the other hand, we are enticing the old folks to stay on in their jobs beyond 60 years of age. Basically, I am not against extending retirement age well beyond 55 years of age which, I think, is a good move, but I am somewhat puzzled by the apparent contradiction in our policies. I also find it difficult to agree with the Minister's statement that all items affected by higher taxes are "not basic to life for the average family". What is our definition of an average family? Take the item, cars for example. In our efforts to discourage ownership, it appears to me that we do wield the big stick of taxation rather too often, too soon and indiscriminately, without carefully considering and offering the carrot of suitable alternative. The livelihood of many families depends on their ability to get around quickly but our public transport system at best is still inadequate to satisfy this need. It is, therefore, in my opinion unfair to raise road tax further at this juncture, particularly on the less expensive small capacity cars which are more functional than prestigious. The cubic capacity of a car should not be the sole criterion in determining the rate of road tax payable. If our intention is also to tax more heavily on those who are better able to pay, then, it is only logical that we should also have regard to the value of a car.

Taxing more heavily on hard liquors, such as whisky and brandy, is fair enough as quite apart from their harmful effect on health they are also entirely imported. The same cannot be said for beer. This is fast gaining popularity even among our working class, it is wrong to deprive them of one of the very few legitimate poor pleasures left in life, which is comparatively inexpensive up to now. The proposed increases are therefore to my mind rather harsh and will put this item beyond the means of many. Perhaps the Minister does not enjoy beer!

Finally Sir, it is reassuring to note the Minister's reluctance to increase taxation, to quote his words "Lest it should raise the prices of essential goods and services". I do hope that this wisdom on his part will be shared and borne in mind by all his Cabinet colleagues as well as our civil servants in the months ahead so that hopefully we can look forward to a really painless year.

3.50 p.m.

Mr Ang Nam Piau (Thomson): (In Mandarin): Mr Speaker, Sir, the Minister for Finance has made his Budget statement in this House on the 3rd of this month. Although this Budget is not like previous budgets which could he described as painless, it is still not a budget that will increase the burden of the people. In order to meet our stop-gap needs in development, the Minister for Finance has announced an increase of taxes only on liquor, tobacco and cars. He has also announced certain tax relief measures for employees who continue to work after reaching 55 or 60 years of age. For them their earned income relief will be increased from $1000 to $2000 for those over 55 years old and to $3000 for those over 60 years old. These relief measures will reduce our revenue by $4 million. Setting additional revenue against additional reliefs, we will still be left with some residue. This shows that our new financial policy is one that aims to reduce economic recession and to promote future development, so that our economy will be more stable and sound. This is what we all should support wholeheartedly.

However, Sir, on the question of income tax I have some criticisms as well as suggestions to make here, Regarding earned income tax relief for those who are over 55 years old, this measure is not to be criticised unfavourably. However, it seems that the Finance Minister has neglected the fact that while the aged employees need more money to keep themselves healthy, he should also remember that the younger wage-earners need even more money for maintenance of their health and house-keeping. The aged employees normally already have grown up children, some of whom are working and can afford to help the family financially. However, with the younger employees it is different. They have children in primary or secondary schools or even in the universities. So expenditure in this respect is a very great burden to the younger parents generally. Although there is a tax relief of $750 for the first child, with the present cost of living this relief is not enough even to feed the child for one year, much less the amount necessary for the child's education. Moreover, the aged employees usually get higher salaries through annual increments over the years as compared with the younger employees who are lower paid. So I hope that the salaried class should have their tax relief increased accordingly.

Sir, under the Income Tax Act, I 947, the personal relief for the taxpayer was $3,000 and $2,000 for his wife. But with the amendment in 1961 the taxpayer's personal relief was reduced to $2,000 but he was also given an earned income relief of 20% up to a maximum of $1,000. Tax relief for the wife was also reduced to $1,000. So the total amount of tax relief for both husband and wife had been reduced by at least $1,000.

Sir, there is a great difference in the standard of living some years ago as compared with the present, when we are faced with inflation and a rising cost of living. As we all know, the ordinary people generally find it very difficult to earn a living. Therefore, it is reasonable to assume that there is a pressing need to make adjustments to the income tax policy and to increase personal tax reliefs in particular. Sir, taxpayers in the salaried class are the most honest in the submission of tax returns. They pay their taxes without trying to evade tax, as there is no additional income. In the case of businessmen, however, we know that some of them are not honest. They expose themselves to the risk of being investigated into or fined. They always try some means to evade tax or to reduce their tax dues. This is an open secret. Therefore, Sir, I would like to express my hope that the Government would step up the tax investigations and curb tax evasion activities in order to plug the loopholes and increase our tax revenue. The present taxation policy should not just aim at increasing revenue. It should be a means to reduce the gap between the rich and the poor. So I would like to suggest to the Government that the tax rate of 50% for the rich people who have an income of half a million dollars or more a year should be increased to 60%. The Government should also consider increasing the tax levied on companies from 40% to 50%. Sir, if the Government can consider and accept my suggestions, then our financial revenue will surely not be in any difficulty. Therefore, I sincerely hope that our Minister for Finance, after cool, calm and careful consideration, will be able to find that there is a pressing need to increase the rate of personal tax relief in the near future.

3.53 p.m.

Mr Ho Kah Leong (Jurong): (In Mandarin): Mr Speaker, Sir, under the double impact of world economic recession and inflation, our actual economic growth last year had achieved the rate of 6.8%. It was really a rare and commendable feat. It was due to the unity of our people and their effort in production. We have a good Government administration and our society has been stable. These are the basic prerequisites for economic development. When there is economic growth, we do not have to spend our foreign reserves to meet our increasing expenditure. This is very commendable and something to be congratulated for. As for the coming financial year, other than the increase in tax for those who drive, drink or smoke, there are no other important or unfavourable taxation measures to affect the daily livelihood of the ordinary people to any appreciable extent. Besides this, the Minister for Finance has also proposed several measures to stimulate our economic activities to ensure that our economic growth will recover as quickly as possible. Therefore, it is a Budget that is to be welcomed by all the people in all walks of life.

Sir, what I regret to say is that in his Budget speech, as in the past, he has again omitted any mention of our agricultural development and its related matters. This shows that in spite of several surveys conducted by the Primary Production Department on the agricultural sector, the Government still does not have any clear-cut policy in respect of agricultural development. According to statistics, in our country there are nearly 20,000 people engaged in agricultural activities. To add it up to people who are directly or indirectly connected with agricultural activities, the total number is not less than 200,000.In other words, about 10% of our total population are dependent on agriculture for a living. All along, our agricultural sector has been left alone to sink or swim by itself. Under the pre-requisites of industrialisation, the agricultural sector has to give way and the farmers have to make sacrifices for the sake of the future of our country. They have made sacrifices and incurred certain inconveniences. However, it is not justifiable to call on only one section of the population to make great sacrifices for the development of the country. However, those farmers who are affected should at least be granted reasonable compensation to match current prices. Otherwise, the meager sum of a few thousands of dollars as compensation would not help them rebuild their household in a resettlement. So the authority concerned should adjust its resettlement compensation rates now and then, just as the Public Utilities Board has been readjusting its rates on consumption now and then.

Ours is a small country with a small population. Therefore, the domestic market for our agricultural products is limited. In addition to this, the agricultural sector has not been given any proper planning. Therefore, whether the harvest is rich or poor, the farmers do not get much in the end. Whenever there is a rich harvest, there is a glut in the market and prices are reduced; and so the farmers have to sell at lower prices to avoid incurring greater losses. If there is a poor harvest, then the supply is reduced and prices increase. However, although the farmers would hate to produce less, their production is limited and therefore their profit is also limited. Then there is also the exploitation by the middleman. In fact, with the middleman the income of the farmers is reduced even further because the difference between the wholesale price and the retail price is usually four or five-fold. A clear example is when the price of eggs is reduced, consumers still pay the same price as before. Agricultural produce cannot be sent direct to the consumers. This is a shortcoming in the trade cycle. Trading without going through a third party is beneficial both to the producer and the consumer. Sir, the Finance Ministry has done well in curbing inflation and I hope it can also pay more attention to this matter of facilitating direct trade in agricultural produce.

Sir, land is a necessary factor of production of the farmer. Most farmers lack sufficient land for cultivation. Therefore, many of them are occupying land on Temporary Occupation Licences from the Land Office. Only a few farmers have their own private land. The TOLs do not stipulate the number of years that the land can be occupied and since the rental is uncertain, whenever the land is acquired by Government, the farmers have to move out. Therefore they dare not put in too much capital to develop their land. Although genuine farmers may be allotted alternative land it is usually much less than before. I feel that the Government should give genuine farmers some form of land title for a definite number of years, instead of TOLs in order to enable them to realize the concept of the tillers owning their own land. In this way they will safeguard their land. This will strengthen their love for their homes and their land, and they will strive harder to increase production and further development. This in any way is to the good of our national economy as a whole.

Sir, although land is limited -- there is not much for agriculture - we can still allot a certain part of land for agricultural purposes. In the course of our development in industrialisation, urbanisation and in the pursuit of antipollution measures, arable land is constantly being reduced. To make the agricultural sector viable and to ensure a profit for the farmers so that they can carry on with their activities, then new techniques and new farming implements must be adopted, and farming should he intensified. There should also be anti-pollution facilities. This involves a large capital and it is not what the farmers can bear or help themselves. So I feel that the Ministry of Finance, in the same spirit that has been given for industrial development, should provide the necessary and convenient means of loans at low interest to the farmers for agricultural development which has a long history in our country. The Ministry of Finance can assess the needs of the farmers from the survey and recommendation of the Primary Production Department and give the farmers some economic help. At the moment the farmers have been obtaining their loans through tontines, middlemen, or credit accounts with the feedstuff merchants. The farmers repay their debts by their agricultural produce. Very often the middlemen and feedstuff merchants use the produce of the farmers to set off their credit accounts. The prices are therefore usually determined by the creditors and the profit of the farmers, as we can see, will be even lower. If the prices of agricultural produce are low, the diligent and frugal efforts of the farmers are all "gone with the wind". Sometimes even their "sweat capital" is entirely lost. In order to recover, the farmers have to get some capital. If some financial assistance can be given by the Ministry of Finance to help them recover quickly, it will help develop agriculture and improve the livelihood of the farmers.

Sir, in the Addendum to the Presidential Address in this House sometime ago, it is stated that "Singapore continues to be self-sufficient in fresh pork, eggs and poultry". This is a correct objective. The authorities concerned should give priority to the question of giving the producer reasonable profit and the consumer a fair price in order to achieve this objective. At the moment thousands of pig farmers are faced with an important question: whether to keep the number of pigs within 100 heads, or to exceed that number and face resettlement for the sake of anti-pollution measures. This is something that affects the farmers greatly. Some of them have already been resettled more than once before, and because they are not certain of their future and of the rate of compensation for resettlement clean-cut answers are required to help them decide. In order to be self-sufficient in water supply, there will be stringent anti-pollution measures in the catch-meat areas. Of course, nobody can find fault with this objective. As citizens, the farmers will also give their fullest support. However, as constituents of the population of our country, the farmers are entitled to a basic livelihood, and their basic means of livelihood should also not be neglected. The younger generation may find it not too much of a problem to change their career, but with these aged farmers it is very difficult to get alternative employment.

Sir, we have been self-sufficient in the supply of pork, chicken and eggs, and the prices are quite reasonable. This is mainly due to the contribution of the big and small time farmers. If all the small time farmers are eliminated in the course of national development leaving only the big time farmers to continue, this will result in a scarcity of supplies and prices will be easily manipulated by the few big time farmers, This is what the consumers do not like to happen. I feel that the authorities concerned should pay more attention and care for the small time farmers to help them to develop. The authorities should not just pay attention to the big time farmers alone.

Sir, to sum up, our agricultural sector is on the decline with ever greater speed, and this is the time to save the declining agricultural sector. I hope that the Minister for Finance can spend some time to seriously look into the question of how to promote our agricultural industry so that our people can be fortunate in the supply of food, which is something good for our country too.

4.10 p.m.

Mr N. Govindasamy (Telok Blangah): Mr Speaker, Sir, I am happy to join my colleagues in paying tribute to the Finance Minister for a very circumspect Budget statement. The Economic Survey of Singapore, 1974, earlier distributed by him was a commendable effort by his Ministry to furnish us with updated statistical information on our overall economic activities.

When we look at our economic situation against the backdrop of a world economy, stricken with paralvsing stagflation, to which we are invariably vulnerable, we realise only too well that it was an uphill task for a non-oil producing country like Singapore to come out unscathed. The economic problem faced by the world has shifted in our favour as a result of a number of factors attributable to our correct analysis of the problem - intelligent anticipation and the alternative measures adopted to overcome the difficulties.

It is gratifying to be told that we have in 1974 achieved a growth rate of 6.8%. During the corresponding period some of the richest and most progressive countries in the world have registered nil economic growth. Our economic strategy has paid us dividends. Diversification of our industrial activities resulting in an even spread of our earnings without having to depend too much on any one particular manufacturing group has helped us to pull through the crucial period.

When certain sectors such as electronics, textiles/garments and wood-based industries took a beating, resulting in about 20,000 jobs being declared redundant, wholesale and retail trade including restaurants and hotels contributed to 49% of our 6.8% growth. We are told that the GDP at current factor cost in 1974 was estimated at $12,145 million, an increase of $2,524 million or 26.2%, over that of 1973. Very remarkable indeed.

Transport, storage and communication sector provided 14% of our overall growth. Next was finance, insurance, real estate and business services sector 9%. The same 9% growth was recorded by community, social and personal services sector. Manufacturing 7%; construction 5% and ownership of dwellings 5%.

Against this overall picture of our real growth in 1974, we were also informed of the widening of the base of our manufacturing sector by introducing new skills and products in metal and precision engineering, chemicals, e1ectronics and transport equipment. This has resulted in the advent of new industries to augment our main manufacturing activities, such as shipbuilding and ship-repairing (14.8% of total value added), refining of petroleum (20.3%) and electrical machinery (21.6%). No single industrial group accounts for more than 22% of our total earnings. In other words, we were prudent enough to put our eggs in different baskets.

It is encouraging to note that the major elements of our economic policy would be guided by our objective of maintaining high growth rate, notwithstanding the present recession, and that industrialization would continue to accentuate our growth. Singapore will continue to serve the region as a services centre for technical know-how, tourism and finance.

While taking all necessary measures to counter and minimise the effects of recession, we would also put the present slack period to full use by giving priority to the training of workers to raise the level of skills to meet the needs of the resurgent generation of skill-intensive and technology-oriented enterprises.

The Capital Assistance Scheme to assist skill intensive industries, the reorganisation of the Economic Development Board to make greater efforts to promote investments and the establishment of two more promotion centres in Houston and Copenhagen in addition to the nine centres in existence, tax incentives for pioneer industries, joint venture projects, strengthening of export promotion efforts and the stepping up of construction activity by increasing the Public Sector Development expenditure to $3,080 million, the manpower development policy to increase skills in our work force by expanding training and retraining programmes undertaken by the Industrial Training Board and Joint Industrial Training Centres all these are steps taken in the right direction, which in perspective deserve adequate recognition and approbation.

When the standards of technological skills improve and when our workers exert themselves to achieve better results, better wage rates will have to be paid by industries. As the Finance Minister has stated, "Productivity increases depend as much on workers as on employers." Mention must he made at this juncture that it is still the practice of some employers to flog the horse with outdated machinery, bad supervision, old methods of working and colonial type of personnel managements who deprecate the workers joining unions. These managements enjoy a field day in hiring and firing workers at the slightest whims and fancies of officialdom. Only recently the Labour Minister had to order the reinstatement of five salesmen sacked by a firm, by the blessing of the Singapore Employers Federation.

While on the subject of unions, let me touch on another subject which is very pertinent in view of the predicament in which we find ourselves today. In the absence of any definite indication as to the period by which the sick economy of the world will recover, the inflationary trend that we have been experiencing in the past will continue to hurt us, especially the wage earners. Although the National Wages Council prevents the wage claims situation from going haywire by its annual stocktaking of the overall economic performance before giving its recommendations, for the sake of collective agreements, a process which goes on continuously upon the lapse of old agreements, I should have thought the Finance Minister could have given the Government's guidelines of wages policy to be pursued by the managements and unions.

Coming to the more unpalatable part of the budget, let me take a look at the taxation policy. Of course it is the primary function of the Government to give priority to economic growth which would in turn bring increased revenue to finance public expenditure. This needs money and the public has to pay for it in the form of taxes, either directly or indirectly.

In order not to upset the apple cart of prices of essential goods and services, there will be no increases to existing taxes, which is to be appreciated. Additional revenue, therefore, will have to come from increased taxes on tobacco, liquor and cars. The reason is that to quote the Minister these are "not basic to life for the average family". In the case of tobacco and liquor, I have no quarrel with the Minister. He who smokes pays. Measures introduced by the Government to discourage smoking over the last few years have been quite successful. If the additional tax would further reduce the number of smokers, it is all for the good. The same goes for liquor. Those who want to drink will have to pay a little more. Fair enough. But I cannot see eye to eye with the Minister on his contention that cars are "not basic to life for the average family". In fact, we have reached a stage of sophistication that a motor car has become a necessity rather than a luxury for a very large number of wage earners, professional people and businessmen. We have to take cognizance of the fact that we do not yet have an efficient transport service which can take a busy man to his destination as quickly as he wants. Let me hasten to add that public transport has improved compared to this time last year. Our efforts to reorganise the Singapore Bus Service and to bring some order into its inept management have not completely produced the desired results.

Although the large crowds of commuters at bus stops have thinned down, the situation is far from completely satisfactory. This means that many people have to depend on the family motor car for quick transportation from place to place in their everyday working life. This is additional to taking their children to and from school. On the one hand the Government wants our people to be hardworking, innovative and forceful in taking initiatives to make Singapore tick as a centre of manifold activities in this region. On the other hand our energetic people are rendered immobile by Government action, such as higher road taxes.

Coming in the wake of quadrupling of oil prices and the resultant inflationary spiral in prices of essential commodities from which many of our citizens have not fully recovered, this hike in higher road tax will deliver the knock-out punch on the middle income group. Owners of cars in the 1000 cc to 1600 cc class fall within the heaviest taxed group, and they are the middle income people who have to take the main brunt on their shoulders.

If higher taxes is the means to curb vehicular traffic, here again there is a dangerous loophole. The rich people who own 2000 cc and 3000 cc cars and those with large families owning only one large car for the whole family would now prefer to own two small cars instead of one large, cheap white elephant. This means two cars on the road instead of one. Who wins? The rich man can afford to pay the hike and he will take this in his stride. What about the not-so-rich man who owns one family car?

Chasing the motorists and penalising them is not the enlightened way of finding a solution to our traffic problems. While the vehicular traffic has increased, our roads have not been widened commensurately. We have not introduced the mass rapid transit system to cater for the needs of increasing numbers of commuters. As long as this problem remains unsolved, it would serve no purpose whatsoever to put an increasing burden on car owners, most of whom are industrious people struggling diligently to increase our economy and improve the quality of our people. We are only applying a brake on our economic progress by putting obstacles in their path.

The Finance Minister's announcement of a tax concession for people over 50 and 60 years old from 1976 at a cost of some $4 million adds a merciful touch to his Budget. Singapore can well afford this concession. By the same token, for the benefit of the lower and middle income groups of wage earners, on whom the burden of inflation has fallen very heavily, there is a strong case for a concession in earned income relief to be increased from the present $1,000 to $2,000. I wish to conclude my speech on this happy note of anticipation, and I thank the Minister.

4.29 p.m.

Mr Ho See Beng (Bras Basah): Mr Speaker, Sir, I am sure that I am voicing the concern of the general public in making reference today to the startling increase in the existing road tax, a measure which is being introduced almost simultaneously with the restrictions on traffic entering the Central Business District. It would appear that the large increase in road tax is not meant to raise revenue or meet part of recurrent expenditure. If it was just a matter of increasing revenue, then surely there are other areas which could yield revenue without causing undue hardship. Its main objective would seem to be the drastic reduction of the number of cars on the road. This being the case, I would suggest that the massive increase in road tax is both a negative approach and inequitable: it will, among other things, only serve to increase the burden of the middle and lower income groups.

It must be noted that the largest increase is for motor cars between 1000 cc and 2000 cc. Cars in this range are generally owned by the middle and lower income groups who, in the past, used to pay approximately 17 cents per cc. But now with the increased road tax, they have to pay 25 cents per cc this is almost 50% more.

Mr Speaker, Sir, I must repeat my contention that the increase in road tax constitutes a wholly negative approach because our Government, founded on the principles of socialism, is dedicated to raising the living standards of the lower income group. From the time we came to power we have been concentrating on introducing measure after measure to narrow the gap between the "haves" and "have-nots". I submit that the growing affluence engendered by this process of social equalisation has made the motor car, as a form of transportation, more of a necessity than a luxury.

And now, Mr Speaker, Sir, a measure is being introduced to penalise those who, through hard work and diligence, have increased their income to the point where they are able to afford a car of their own. If the Government's objective is merely to reduce the number of new cars on the roads, it would not be too difficult to arrive at a solution. For example, the Ministry of Finance could increase the import duty so that existing car owners will not be unfairly penalised - it will be the potential car owners who have to decide on the possible alternatives. In other words, if they decide to have a motor car, they will have to sacrifice something else. In this way, the choice will be left to them -a motor car at the expense of some other luxury or necessity. The point of this approach is that the choice will quite fairly be left to the individual. No man need thus be penalised for events of the past which have created a situation over which he has no control.

There is also another way to reduce effectively the number of new cars -by requiring all those who wish to purchase new cars to apply for permits. This is a procedure that is being quite successfully adopted in several other countries. This approach will also be more satisfactory because it should be fairly easy to ascertain whether an applicant for a new car merits consideration by the simple method of obtaining clearance from the Comptroller of Income Tax to determine whether or not he is paying income tax. If he is not, how then can he afford a new car? It would certainly prove a more equitable way of reducing the number of cars on the road.

The present increase in road tax will not effectively reduce the number of cars on the road as envisaged by the Government. This is because owners of cars have, by this gross increase in car tax, either to pay the increased tax and retain the car or sell the car to some other person who can afford the tax. We will therefore have exactly the same number of cars on the road! This will clearly defeat the Government's objective. In this context, Mr Speaker, Sir, let me refer to the park and ride scheme and the Central Business District entry restrictions. Should we not wait to see the effect of the new travel restrictions before imposing taxes on motor cars? It seems to me that this two-prong attack on motorists is tantamount to anticipating the failure of the Central Business District scheme. I would suggest therefore that the car tax increase be deferred until the Government is able to assess the effect of the park and ride and Central Business District schemes. Only if these prove unsuccessful in restricting the number of cars in the Central Business District to a level considered desirable by the Government, should other measures be considered. May I add also that the present scheme seems calculated to drive cars off the road even in areas where there is no traffic problem at all.

Mr Speaker, Sir, I would urge the Government to seriously reconsider this car tax increase, especially because there is no adequate transport for commuters as yet. Our bus services are still inadequate for they are clearly unable to cope with the demand. Until the bus services are considerably improved and able to meet with the requirements of the public, there should be no further increase in car tax. Otherwise we will only be crippling the members of the public who own motor cars without being able to provide them with a reasonable alternative method of getting around and coping with the problems of living and working in a busy, populated city such as ours is. The point really is: have we the right to increase the burden on the shoulders of the average working class Singaporean? His car may seem a symbol of undue affluence but it could in reality be merely his most prized and dearly bought possession.

Mr Speaker, Sir, I strongly urge that this increase in road tax be seriously reconsidered, in the context of what I have noted.

Mr Speaker, Sir, may I now turn to the income tax concession granted by the Finance Minister for old people capable of working beyond 55 years, the former retiring age, or even 60, the new retiring age. It is observed that this concession has been made because of our rapid economic development in the last few years, which has highlighted the need for our skilled and experienced people to go on working beyond the normal retirement age. It has apparently been recognised that such people will need to spend more money staying healthy and getting to work.

This is indeed a step in the right direction and is a most welcome concession. I would like to suggest, however, that the care and concern made evident in this gesture be extended also to the younger, struggling members of our nation. We know that the consumer price index has risen sharply recently, but income tax relief in general remains pegged to the rate fixed more than 20 years ago. It is high time a thorough re-assessment was made and more tax relief accorded to lighten the burden of the beleaguered working classes.

Mr Speaker, Sir, with the indulgence of the House, I would like to refer to my representations to the House in March last year, when the Honourable Minister for Finance presented his previous budget. I pointed out that the personal relief on income was fixed more than 20 years ago and called for this to be increased to a more realistic and pragmatic level, in keeping with inflationary trends which had been mentioned by the Finance Minister.

The Minister had indicated that consumer prices had risen to an average of 22.0% over the previous year alone, that is to say, 1973 to 1974. How much more then must consumer prices have risen over the last 20 years? And yet there had been practically no increase in personal relief except for the $1,000 allowed as earned income. I added that if the consumer price index had risen by an average of 25% during the last year, surely it must have gone up many times since the rate of $2,000 was fixed more than 20 years ago. The final result was that the poor were becoming poorer and were being weighed down, especially by the income tax burden.

I also stressed that unless personal relief was increased, there would be little incentive for the tax-paying wage earner to work harder, because they would only be able to retain a fraction of the fruits of their labour - the bulk of their increased earning being siphoned away by income tax on the one hand and inflation on the other.

Mr Speaker, Sir, I was dismayed to observe the reactions of the Honourable Minister for Finance. Despite all the facts and figures clearly indicating the inequity of the position, in his reply the Honourable Minister for Finance warned that the Government might consider reducing the rate of personal income tax relief next year, to make people pay more tax.

This, Mr Speaker, Sir, left me flabbergasted. It suggested retaliation on bringing out the true facts in Parliament and seeking equitable remedy. He has dismissed most unconcernedly the hard fact that the personal relief on earned incomes had not been increased over the last 20 years, except by $1,000, despite the fact that the consumer price index had gone up several times and by his own admission, the consumer price index for the year 1973-74 had gone up by nearly 25%.

Mr Speaker, Sir, it is noted that this year there has been no increase in tax relief for the wage earner, and I presume that it may be argued that any imaginary relief lies in the fact that the rate of personal income tax has not been reduced!

Mr Speaker, Sir, in this context may I draw the attention of the House to a report by an advisor of the NTUC that an income of $250 a month is needed for a Singapore family to maintain a minimum living standard. The NTUC arrived at this figure from a study by the Defence Minister, Dr Goh Keng Swee, on household incomes in the fifties when he was Assistant Director of Social Welfare (Social Research) in the Social Welfare Department. The minimum income then, according to Dr Goh's study, was $109.95 to support a family of four. The NTUC, which updated this report for a minimum living wage index, estimated in March 1974 that the minimum earned was $250 and that the sum of $250 was only for bare necessities. Since then, Mr Speaker, Sir, during the last year we have been hit by inflation and a tremendous increase in the price of consumer goods including basic necessities.

The fact that there has been no increase in tax concessions would suggest that the average taxpayer is now paying tax on incomes at subsistence level. A government dedicated to socialist principles should not tax income at subsistence level. Otherwise, we will be taking away the bare necessities of life from our citizens. This matter, Mr Speaker, Sir, is becoming more and more urgent in the light of inflation, which is making the purchasing power of the dollar less and less. We have only to go to the shops today to see how little our dollar is worth. I would therefore urge the Minister for Finance to give serious and urgent consideration to increase the personal relief for taxpayers.

Last year, in rejecting our call for a reduction in the income tax relief, the Minister for Finance stated that the international view was that Singapore's income tax relief was very generous and that Singapore could do well to broaden its tax base. International views are many and, like statistics, can be used to prove or obscure many a point even though it may not, in actual fact, have any relevance at all. As regards broadening the base, I am sure nobody can quarrel with that - everyone should pay his fair share, but the minimum income for tax exemption must be realistic and based on actual cost of living conditions in any particular country.

However, with regard to broadening the base, may I refer to the recent correspondence in the press concerning the liability of hawkers to pay income tax. In answering a query from a member of the public, the Income Tax Department mentioned some very interesting facts. In the last five years, from 1969 to 1974, income tax collections were $251 million, $318 million, $404 million, $563 million and $845 million respectively. Adminis trative costs during the same period were 1.08%, 1.01%, 0.97%, 0.75% and 0.62% respectively. Broadening the base of taxpayers would be one way to offset the loss of revenue even though it may not be a hundred per cent successful, because it is the responsibility, as I mentioned earlier, of every resident to pay his tax.

I was, therefore, a bit surprised to read the views of the Income Tax Department, and I quote:

`that thus while it is a truism that everyone should bear his dutiful burden, it is also important, in the revenue field, to keep also in sight, costs and yields.'

This statement, Mr Speaker, Sir, was made in reference to the problem of collection of taxes from hawkers. The Income Tax Department had earlier mentioned that, and I quote again:

`cost of collection from hawkers, if compliance was to be as full as possible, was estimated at more than a hundred per cent.'

This, Mr Speaker, Sir, is tantamount to saying that all of us are not equal before the law, and cannot be given the same treatment. In other words, because it is going to be difficult to collect tax from hawkers and others who are able to avoid, they are being allowed the concession of not paying their share of income tax. But the poor wage earner, the employee, whose salary is on the payroll and cannot escape has, on the other hand, to pay tax because it is easy to collect tax from him. This, Mr Speaker, Sir, is most inequitable and a very unjust way of looking at the problem. In other words, those who are clever in getting away with it are allowed to do so, whereas those who perforce have to be law-abiding through circumstances beyond their control are penalised. Mr Speaker, Sir, if this philosophy was implemented in other Government departments, and criminals who are difficult to catch are allowed to go their own way whereas the amateur crook, who does not know his way around, is caught and penalised, then Singapore will be in a sorry state of affairs.

Mr Speaker, Sir, total Government revenue seems quite adequate for the administration of the State and there appears to be every reason why some relief should be given to income taxpayers at the lowest levels. It is true that such concessions may mean the loss of a few million dollars to the Income Tax Department, but surely that is a sacrifice that the Government can afford, since there are other ready and available sources of revenue. But it is observed that the Minister for Finance has decided against introducing any new taxes for the time being. It is not clear why taxes cannot be imposed on luxury goods, so as to avoid taxing citizens at subsistence level.

In conclusion, I would therefore most humbly and respectfully urge that serious consideration be given to the question of income tax relief, for indeed there is need for such relief and such relief is even better late than never.

Mr Speaker, Sir, may I now turn to the subject of the total estimated revenue which is given as $2,647.5 million, representing a mere 5% increase over the revised estimate for 1974. The Minister for Finance has drawn our attention to the appreciable slowdown in the rate of growth of revenue as compared with previous years. It is inevitable that the slowdown in economic growth should be reflected in Government revenue, unless the Government takes drastic measures and imposes new taxes to increase revenue. This, of course, is undesirable at the present time. Our taxation rate is already high and any increase in income tax rates will serve merely to act as a disincentive to businessmen and investors.

On the other hand, it is inevitable that Government expenditure should rise disproportionately with economic growth for a number of reasons. I would like to suggest to the Hon. Minister for Finance that there is one area which has not as yet been fully exploited, which can not only yield revenue, but also be a social service to the community. I refer to Government being an entrepreneur and participating in certain areas in the private sector which would provide use- ful services to the public and at the same time safeguard the national interest.

Economically there are firm grounds for the Government to play the role of entrepreneur. Government and government-sponsored enterprises can ensure that prices be kept to the minimum and that profits do not flow out of the country but are re-invested or distributed locally. This participation could also assist the Government in its efforts to re-structure our economy from that of an entrepot centre to an industrial economy, that derives its well-being from services and other fields. In addition, local and foreign capital can also be tied up with commercial and entrepot trade activities and can thus be geared to a greater extent to new projects formerly rejected by entrepreneurs because of the risks and capital involved. Developments in the economy can thus be in line with the objectives of the national plan.

It is appreciated that Government has already ventured into wholly-owned trading companies or joint venture' with foreign and local investors and the Government bodies also run along commercial lines. I need mention only a few, such as the Telecommunication Authority of Singapore, Commercial and Industrial Security corporation, and Jurong and Sembawang Shipyards, as examples of this project. All these undertakings have proved to be highly successful.

But I would like to suggest that having regard to Singapore's small size and her vulnerable position in international trade and commerce, which make us susceptible to external factors and international cartels, including the growing influence of multi-national corporations, more should be done in this area.

Businessmen, whether local or foreign, are profit-oriented and trade is determined by the dictates of economics. Supplies and commodities are always made available to the highest bidder to the detriment of those who cannot pay. These harsh facts were brought home to all of us very clearly during the last few years. The price of rice, for example, our staple food, went up sky-high until Government intervention brought prices down to a more reasonable level. I would therefore like to suggest that Government explore the possibility of venturing into new areas - those dealing in essential commodities - because these are areas which are basic to our survival and could be regarded as "public utilities" in the broadest sense of the word.

Mr Speaker, Sir, the very concept of public utilities is that certain requirements of the public have to be state-managed so that they will not be run entirely on a commercial basis and on the dictates of profit-making. It is generally accepted that public utilities should not be run by the private sector; hence we have the Public Utilities Board providing water, electricity and gas.

In more recent times, our Government, recognising the need for the State to own some of these utilities, has taken over trading corporations which provide the telephone services and the external telegraph services. Hence, we now have the Telecommunication Authority, which has absorbed the former Singapore Cable and Wireless, the Singapore Telephone Board and so forth. These are essential services for the community and it is generally accepted that Government should run these organisations and provide the services. And all these utilities, if I may use the word, are profit-making and thus Government earns revenue in an indirect way.

Sir, I feel that with the rising cost of living, inflation and so forth, the Government should branch out even more into what has, in the past, been regarded as private sector areas, even though critics may say that if Government goes into business in a big way, there will be unfair competition. But I say unfair competition against whom? Not against the citizens, certainly, but against the firms which are making massive profits. Government participation in these areas will help keep down the cost of living and the profit will go back to Government, and this can be ploughed back into social and economic development.

There appears to be a good case for Government to move into business and commerce in a bigger way, to ensure that the basic needs of life for our people are not dependent upon the whims and fancies of businessmen who can jack up prices at will. The recent rise in the price of rice is a fine example. Until Government intervened and made direct purchases and rice was sold through cooperative societies and consumer clubs, the price was unduly high and the profits went to a few merchants who, in total disregard of our people's want, were bent only on making massive profits for themselves. This was a totally unfair and unjust case of events.

As I said earlier, some businessmen might say that if the Government also enters the trading arena, it would cripple business activity. I cannot agree to that argument. Singapore is a fine example of a socialist-capitalist mix, and Government participation in private enterprise will only be on a limited scale to ensure that, at any point of time, there will still be a flow of essential commodities at minimum prices to the public. This will prevent price manipulation and hoarding by big businesses. We all have to accept that for big business the sole object is profit-making, and if our people are left to the tender mercies of big business, the latter will extract the maximum price they can, thus creating undue hardship as has already been proved. Therefore, if the Government also moves into these areas which are the life-lines of the community, we can ensure that at any given point of time the public will not be held to ransom.

The NTUC supermarkets and our consumer clubs have shown how much cheaper prices can be, and the few dollars that the working class can save in their purchases from these places are a great boon to them. How much greater a boon will it be if there are similar state-owned, government-sponsored organisations providing supplies of basic commodities at minimum prices. On top of all this, the added advantage will be that the profit will go to Government, as I mentioned earlier. Mr Speaker, Sir, may I suggest that the Minister for Finance give this proposition serious thought as this will help keep down the cost of living and ensure a continued supply of essential commodities.

Finally, Mr Speaker, Sir, I would like to congratulate the Minister for Finance for his industrial development policy which has given adequate attention to investment needs in times of recession. It is this type of forward planning which has seen our young Republic through the many crises which we have faced and survived since 1959. The measures taken under the export promotion policy are also a fine example of looking ahead so that we would be well equipped to grapple with problems before they arise. The proposed establishment of an export credit insurance guarantee scheme in conjunction with the banking and insurance companies is most certainly welcome and, in fact, I would say even overdue.

I note this year the Government will be releasing large sums of money for development purposes and that this is also meant to be a step to counter recession. I was glad to observe in this context that he has pointed out that our anti-recessionary measures will probably have inflationary effects. I would, therefore, urge that a very tight watch he kept on these two interacting factors; further inflation will only bring greater hardship to a large number of our citizens who at present are only just able to cope with the increased prices of foodstuffs and other basic commodities brought about by imported inflation last year. I say this, Mr Speaker, Sir, in the full knowledge that the Government has set up an Economic Activation Committee to speed up the implementation of any anti-recessionary measures, because over-enthusiasm on any front cannot but have ill effects and negate our main objectives.

Mr Speaker: Order. It is convenient to take a break now. I suspend this sitting and will take the Chair again at 5.30 p.m.

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

[Mr Speaker in the Chair]

Debate resumed.

Mr P. Govindaswamy: Mr Speaker, Sir, it is indeed very delightful and heartening to note that we have yet another painless budget. This has been the case in the past few years and it is certainly a very satisfying reflection. At a time when nations around the world are trying to free themselves from the strangling grip of inflation, retrenchment and recession, it is miraculous that our young nation could present a painless Budget. Credit for this remarkable economic stability should go to our responsible Government and also to the wisdom of our Finance Minister.

Retrenchment in Singapore has reached a figure of only 17,000, a very small number compared to the alarming numbers frequently mentioned even in the most advanced nations. Most of the employees who lost their jobs are not the bread-winners of the family and, as such, no notable cases of hardship have resulted from retrenchment in our country. Even the increases in taxes seem to be well designed for they affect only those who can afford them. The proposed increases only affect luxuries and not our daily necessities.

For some time now, there had been wide-spread fear of a terrible increase in road taxes. This fear proved unfounded, and many people are greatly relieved. The increase mentioned in the Budget is reasonable and justified. However, there are considerable discrepancies in the proposed taxes for motor cars. Why must there be any difference at all? Are we aiming to swell our revenue by this tax increase? Are we trying to discourage and deter our car owners from using their cars and ultimately to sell them off? I know our Singaporeans too well. Before they do this, we must convince them that our public transport system is adequate, efficient and dependable. At any given time, breakdowns outnumber the new buses added to each route. It appears as though there are four breakdowns for every two buses added. The scheme B buses have helped a little, but the problem is still acute. When one takes a look at the crowd at bus stops during peak hours, it is not difficult for one to notice the severe shortage of buses on the roads.

If the needs of the present number of bus commuters cannot be met, are we going to add further to the incredible number of commuters at each bus stop? As a responsible and dedicated Government, let us not spare any efforts to provide adequate number of buses and reasonably comfortable services. Once this is achieved, car owners will review their position and will certainly consider whether it is worthwhile to incur all these expenses rather than take a comfortable ride for only 40 cents. This will automatically eradicate traffic congestions everywhere. Increases, on the other hand, will not deter them.

I wish also to bring to the attention of this House another problem which affects the general public. At one time the emphasis was to centralise the various Government offices. The fashion now seems to be to decentralise the departments. And they are very far apart too. The ordinary citizen has to travel long distances to fill a common form or even to pay an ordinary fee. This decentralisation is causing considerable inconvenience to the general public, and it is causing immense administrative difficulties also. The distance between the various departments is also generating an unhealthy competition, which in turn results in selfishness and lack of cooperation. Some departments are even reluctant to release information for the benefit of others. To improve the situation, I suggest periodical meetings of Heads of Departments in order to bring about deeper understanding and better coordination.

Sir, the move to retrain rather than retrench is an admirable step. Along with retraining, there must also be prudent redeployment of staff so that there will be a well-balanced staff position in all Government departments and statutory boards. I suggest a concerted study so that we could avoid a waste of funds and ensure an even distribution of staff at all levels and in every department. I propose, therefore, that the training of staff and their redeployment should be made a compulsory feature in the public service so that one could fit into any capacity in any department.

We accept in toto the 1975 Budget and the Memorandum on the Estimates. I strongly support the tax increases as proposed since they only affect luxuries and other items that can be considered as health hazards. I need not emphasise that less cars on the road means minimum pollution, few accidents and infrequent traffic congestion; less smoking means fewer cancer cases and heart-attacks; and a reduction in the consumption of alcohol would bring about better health all round. The $1,000 additional earned income relief for those above 55 years is another imaginative and beneficial move. This humanitarian gesture results in only a negligible loss in our revenue.

Our prudent planning and farsighted efforts have averted disasters and they have even helped us to bring about a better balance of payments position than what we recorded in the years 1972 and 1973. There have been extensive expansion all round and subsequently vast increases in expenditure but they have not, in any way, adversely affected our citizens.

We have great faith in our capacity not only to survive but also to overcome adversities. We work with one aim only - the welfare of our people -and to achieve this, we will not hesitate to take stringent measures to prevent exploitation of the people, to stamp out corruption and to uphold justice. This is why all of us should consider our Government as a "People's Action Government".

Finally, I support the Budget statement that has been delivered by our able Minister for Finance.

5.40 p.m.

Mr Seah Mui Kok (Bukit Ho Swee): Mr Speaker Sir, I would like to join hon. Members of this House in congratulating the Honourable Minister for Finance for presenting another fair and reasonable Budget on 3rd March, 1975, for the financial year 1st April, 1975 to 31st March, 1976.

Sir, last year we achieved real growth around 7% in spite of global inflation and recession. This achievement of a 7% growth was made possible through the tripartite cooperation of Government, Management and Labour. I believe that so long as we maintain this tripartite cooperation we can overcome many difficulties and solve the various problems we are now facing.

Sir, last year a total of 16,940 workers were retrenched and some more will follow this year. Luckily a good number of them could get alternative employment. Most of the retrenched workers are from the electronic, textile, garment and wood-based industries. In fact, about 70% of the total number of retrenched workers last year were from the electronic industry. This clearly shows that we should not depend too much on the electronic industry and we must concentrate more on sophisticated industries, such as machine-tool, industrial machinery, diesel machines, construction machinery, etc.

Sir, concerning those workers who had been retrenched and are still unemployed, especially those who have little skill, may I request the Government to encourage them to take up a study for some skill work under the training programme of the National Productivity Board. The study is to be arranged in such a way that they learn in the NPB Training Centre and some of their time is to be spent in the factories for practical experience. Also, during the period of training for a skilled job, the trainee should be given some reasonable Study Allowance to be paid by the Government and the employers.

Sir, the workers in Singapore fully appreciate the necessity of upgrading their skill and to increase productivity. They have the capacity to learn a new trade as quickly as possible and the ability to achieve higher skill when given the opportunity to do so. I am glad to know that the Industrial Training Board has increased its industrial training capacity and I hope employers will give the workers the necessary time for training to increase their skill.

Sir, we have heard so much emphasis being given to workers to increase their skill and to increase productivity especially from the employers, but when it comes to the question of incentive payment for the workers, there is a complete silence. Sir, I would like to quote from the NPB publication Minimax (January 1975) to prove what I have just said.

`Castrol Ups Productivity 33%

Writing to Minimax, Castrol management commented:

"In common with the other industries which are conscious of a need for higher productivity, Castro! (Far East) Pte. Limited decided to improve its manufacturing know-how by sending two of its staff to the Work Study course conducted by National Productivity Board in July 1974.

At the end of the course, we were motivated to apply in our own factory the knowledge and techniques acquired as part of an in-plant training programme. The results of the project undertaken are encouraging.

As a result of introducing these improvements, the department is capable of producing an additional monthly output of 720 tons of oil, thereby increasing production capacity from 2,160 tons to 2,880 tons. This means an increase of 33.3% of the Department's production capacity which result in greatly increased revenue and profits to the Company."'.

Sir, to achieve 33.3% increase of productivity in that Castrol Blending Department, the workers had given full cooperation to the management and worked very hard. But who benefited? The Government would get the revenue and the Company would get the additional profit from the increased productivity. For the Castrol workers, they were not given a single cent as Productivity Incentive Payment! I am sure there are many employers doing the same thing like Castrol. Perhaps the Training Programme in the NPB on practical course on Work Study does not include the necessity and importance for Management to pay the workers Productivity Incentive Payment.

Sir, there is another type of selfish greedy employer who wants to swallow all the profits for himself. I would like to quote from a Straits Times report dated 22nd February, 1975, as follows:

"Union: MD's bonus raised fourfold `But company refused to pay full NWC'.

A laundry company increased its managing director's bonus by four times but refused to pay the rest of its workers the full 1974 NWC wage increase, the Industrial Arbitration Court heard yesterday."

If employers are serious and sincere about increased productivity, common sense will tell them that they have to offer to the workers what Productivity Incentive Payments they are prepared to pay and when they would like to form Productivity Committees. Employers should appreciate that increased productivity means workers are entitled to Productivity Incentive Payment. There is nothing free in this world. Employers want profit and workers would like to share the profit.

Sir, annually the National Wages Council gives its recommendations on guidelines for annual wage increases for the workers. Since the NWC is a tripartite representation, I suggest it should also give a guideline to the employers, especially on payment of directors' or managing directors' bonus. There must be a limit too.

Sir, the Housing and Urban Development Co, will build 42,000 housing units in nine residential areas for the middle income group. I also understand that residents now staying in HDB fiats are interested to purchase the HUDC flats. I would suggest that priority of allocation for the HUDC flats should be given to the middle income group first, and if there is any surplus flats, then they could be given to present HDB residents. It is not fair to the middle income group to allow HDB residents to join in the queue for the HUDC flats.

Sir, Singapore has very limited land and, in the national interest, I would request the Government to consider buying up all available vacant land in Singapore for residential or industrial development. All land that is vacant and not developed for three years, the Government must be given the power to take over after paying a fair price. We must not allow local or foreign investors to buy up our land and to speculate for fantastic profits. I am sure when the global inflation and recession subside and with the improvement of our economy, prices of land and housing will go up again. To avoid this land and housing speculation, the buying up of all available land by the Government will help to stabilise the prices of housing especially under the HDB and HUDC projects.

Sir, the number of tourists visiting Singapore last year exceeded the one million mark. Some of these tourists have been fleeced by touts and shopkeepers. This gives a very bad image of Singapore and, if fleecing is not curbed, it will be damaging to our tourist industry. All tourists like to do their shopping in Singapore because of the variety of things at reasonable prices. I believe that one best way to tackle this problem of fleecing is to establish a Co-operative Tourist Shopping Centre through a joint enterprise between NTUC and Government. Perhaps the Tourist Promotion Board can also help in this matter. I hope the Government and NTUC would consider this guaranteed profit-making enterprise.

Mr Speaker, Sir, I would like to join my colleagues in this House in giving full support to the Budget statement presented by the Minister for Finance to Parliament on 3rd March, 1975.

5.48 p.m.

Mr Tay Boon Too (Paya Lebar): (In Mandarin): Mr Speaker, Sir, a Budget statement for any particular fiscal year will be welcomed by members of the public if it is not accompanied by an increase in taxation. However, under normal circumstances, Government expenditure will rise year after year. This increase in expenditure will have to be met by an increase in revenue. It is correct and proper for the Minister for Finance to increase taxes on tobacco and liquor. However, the ways in which taxes are raised and whether the method is right or wrong will have to be discussed by us.

Sir, I fully support the Minister in raising the taxes on liquor and tobacco. I would even suggest that there should be a further punitive increase in taxes for these two items because they are bad habits and a waste of money to indulge in. I hope the people will shun these bad habits which are detrimental to health and a waste of money. This will be in line with the Government's recent campaign to promote health among the population.

Sir, to increase road tax steeply and the way in which this road tax is increased merits our discussion. At this juncture, we are not going to argue whether owning a car is a luxury or a necessity in this space age. To increase road tax may prevent people from buying new cars and this will help alleviate traffic congestion. However, looking at the different rates of road tax levied on the different types of cars, it seems that the middle and lower income groups will have to bear the brunt of such taxation because, according to the Minister, cars under the 1000 cc range will have their tax increased by 6 cts per cc, those between 1000 cc and 1600 cc will have their tax in creased by 8 cts per cc, and those between 2000 cc and 3000 cc will have their tax increased by 5 cts per cc. We know that only the big tycoons and capitalists can afford to own big cars. It does not matter to them how much road tax is increased. Mainly the salaried class in middle and lower income groups own medium-sized and small-sized cars. There are also small businessmen who use their small cars to transport goods and as a means to save labour and time in order to make a meagre profit. In actual fact, to them the car has become a necessity in their work or business and a means of making a living. It is something that they cannot do without. I regret to say that in order to cope with the yearly increasing expenditure, our Hon. Minister for Finance has resorted to increase road tax on the middle and lower income groups. Therefore, the rates of road tax on medium and small-sized cars are more than those on big-sized cars. In the midst of mounting inflation today, this has caused great hardship to these people who earn their living from hand to mouth. No wonder there is widespread discontent and complaint by the people that as the Minister for Finance was an ex-senior civil servant in the colonial era the Budget drafted by him serves only the interests of the capitalists.

On another point, in respect of the amount of tax relief as concession to the aged employees, namely those who are over 55 years of age, the amount of relief on earned income is to be increased from the original $1,000 to $2,000. Those who are over 60 will have their earned income tax relief increased from $1,000 to $3,000. The rationale behind this is that people who have reached the retiring age and are still able to work need that much money to keep themselves healthy. This seems plausible. This measure will act as an incentive for elderly people who are more skilled and experienced to go on working. If I could represent our elderly people, I would convey my heartfelt gratitude to the Minister for Finance.

[Mr Deputy Speaker in the Chair]

6.00 p.m.

Mr Tay Boon Too (Paya Lebar): However, what these elderly people need more is medical care. There are people who have worked and struggled throughout their life to save some money, and when they retire their lifelong hard savings are passed on to the doctor for medical fees within a short period of time. They will then be on the verge of starvation until the day when they are summoned to heaven by the Lord. In this respect, retired teachers in aided schools have gone through such painful experience because, under current regulations on the day an aided school teacher retires he has to give up his Medical Benefits Entitlement Card. Therefore, the raising of tax relief on earned income for the elderly people announced by the Minister is, on the face of it, a token of respect and a most generous gesture. It is just like buying a Big Sweep ticket so that everybody will have the hope of winning a prize.

The Hon. Minister has done quite a lot of daily work with his computer. He has the calculation at the tips of his fingers that there are only very few people who are above the stipulated age and working; so his jolly talk, because most of the employees will have to retire at the age of 55. Only those big towkays can carry on working after reaching their retiring age. Therefore, if the Minister could use more sophisticated computers to do more sophisticated calculations and if he could be more charitable and be more generous to the end, he could more heartily announce that those who attain the age of 70 and are still fit and allowed to work, the tax relief for earned income would be increased to $5,000, and for those who have the art of longevity, living up to 80 years or over and are still allowed to work, they should be regarded as national treasures and be totally exempted from earned income tax. In addition, they should be given a free trip round the world. Does this not go to show that the Minister is more charitable, generous and is more concerned with the welfare of the elderly people? I believe that all the elderly people perhaps will bless him and pray everyday for his longevity. From these two points that I have raised, it could be seen that the Budget has only made provision for the benefit of the capitalists, the wealthy people and the Minister himself.

6.07 p.m.

Mr L. P. Rodrigo (Serangoon Gardens): Sir, there is a saying in town today, which is current, and it runs as follows: Now that the painless Budget has been announced, the pain begins. I will not go into an examination of the details of the Budget, as I have observed that my colleagues have made very incisive and pertinent references to these details.

Sir, may I begin by noting the Minister's Budget statement read with his Economic Survey of Singapore in 1974 as a modest quiet statement of our efforts and gains during a difficult year and our economic plans for the years ahead, in particular for 1975.

A growth of 6.8% acquired in a year of world economic instability as the economic survey evinces is not something insignificant but the Minister chooses to regard it as merely "not unsatisfactory", quite characteristic of his modest nature.

In the strategy to contain the impact of further world recession on our economy, the statement stresses the diversification of our industries and services and that we should continue to strive for higher growth rates. New skills and technological knowledge are being introduced into metal and precision engineering, chemical and electronics. More skilled and knowledge workers will be needed to make Singapore a centre for services, technical know-how, tourism and finance. This strategy underlines the manpower factor in our plans for future economic growth. I wish to dwell briefly on this subject and make reference to matters associated with it.

By now we do not question the term "global city" when a reference is made to our city, as our city trades with the whole world and it centralises the organisation and management of our rapidly industrialising state, which is structured for development along the lines of other technologically advanced industrial states with which we compete for economic gain.

This modernisation of our economy has necessitated the training and production of the engineering man, the building and construction man, the businessman, the banking man, the science man, the electronics man, the economics man, the computer man, the organisation man and a host of other men and the skilled workmen. We have spent and are continuing to spend large amounts of money educating and training our own citizens to be such men. In doing so we are giving these men, the technocrats, considerable economic relevance and worth in the modern world of science and technology.

Global cities of industrial states in the world too have a need of such skilled and knowledge workers, and there has therefore been movements of such workers between and among these cities. The emergence of the multinational companies and their operations in global cities throughout the world with their capacity to absorb manpower have provided the opportunity for the skilled and knowledge worker to shift his habitat, if he so desires. The modernisation of our economy has introduced our global city into the big league, so to speak, and present us with the problem of manpower loss which can eventuate into a matter for concern.

A significant development in the world today is the increasing similarisation of urban life-styles so that an urban dweller from a city in the Third World does not find life in a global city of a more advanced industrial country art unmanageable personal disruption, if it is any disruption at all. Usually life in a global city of an advanced industrial country is accepted with ease by the prospective resident worker who regards it as holding more promises of opportunities for a comfortable life. The movement of the skilled and knowledge worker from former colonies to the cities of the former colonial countries in Europe had begun when these advanced industrial countries yielded to the logic and guilt of the colonial experience in Africa, Asia and the West Indies and allowed into their cities large numbers of hopeful and aspiring Asians, Africans and West Indians before controls were applied. In the Commonwealth today there has been some movement of skilled and knowledge workers from cities in developing countries to those in more advanced countries such as Canada, Australia and New Zealand.

Other factors assist such movement of manpower. For example, travelling distances today is a convenient matter. The rights and expectations of the worker in the western democracies are more liberal and entrenched in the relationship between the trade unions on the one hand and the management in private industries and the government on the other.

Global cities in Europe and the Commonwealth arc cosmopolitan. They are not found to be discouragingly foreign to the worker from the Third World. Language is not a shortcoming.

At this point of our industrial development when we are planning expansion and innovation in a number of growth sectors the skilled and knowledge worker is much needed by us. Though presently there is no indication of anything resembling a consistent opting for what is considered to be a better deal elsewhere, we should be aware all the time that the skilled and knowledge worker in Singapore has options.

Our citizens may have their reasons to want to move to a global city of an advanced industrial country, hut one which must not begin to encourage them is the impression of uncertainty in public policy as the result of constant changes in policy in some areas of Government notably education and insufficient official clarification of these changes.

While I can appreciate the exigencies behind some policy changes by the Government today, national policies must invoke in our citizens the confidence that they can plan and organise their lives amidst reasonable economic opportunities and comfort with some permanence. Further changes and innovations in national policies should not cause public uncertainty for want of official clarification and explanation of such changes and innovations.

As our society grows the problem will be how to provide for our peoples with real opportunities which can ensure satisfactions in work, personal aspirations, relaxation and in the planning of their children's future within the framework of governmental policies which must necessarily take account of increasing number of bodies, the expectations of the new generations of youths and the unsettled international economic situation. Apart from achieving a viable and lasting economy, the planning of government, in my view, must also achieve a social ethos and a social elan which can jell a people in society with cultural and intellectual strength and meaningness towards which objective I urge for emphasis.

6.17 p.m.

Mr Teong Eng Siong (Sembawang): (In Mandarin): Mr Deputy Speaker, Sir, in his Budget statement for the financial year 1975 presented to this House on 3rd March this year, apart from taxes on tobacco, liquor and cars, the Minister for Finance has announced that for the time being there would be no new taxes or increase in taxes. In the face of international economic depression, it is commendable for the Minister for Finance to be able to present to this House a Budget which does not adversely affect our people.

In his Economic Survey of Singapore for 1974 the Minister for Finance highlighted the fact that the manufacturing sector had a very good performance, showing a 28% increase in value added, although the real output at constant prices increased by only 2%. The value of production amounted to $3,245 million. Faced with a declining world demand, we were still able to export 54% of our domestic production. This shows that there is a very close link in our international trade with the world at large. It also underlines the good quality of our goods which are known for being good and at the same time cheap and very well accepted internationally. Because of all these factors our external trade continued to grow very substantially last year and the increase amounted to $13,144 million. Compared to 1973 there was an increase of 37%. External trade has always been one of our main lifelines in our economy. In the past we only provided entrepot services without our own production for export. But since a decade ago the Government's industrialisation programme has been in full swing and development in the industrial and manufacturing sectors has been tremendous indeed. We have been able to produce a lot of daily necessities, canned food, machinery, etc. This has enhanced our status as an exporter and has earned us a lot of foreign exchange.

In the Development Estimates for the financial year 1975-76, the Housing and Development Board has been granted a loan of $718 million. This loan is meant for public housing. It shows the determination of the Government to speedily promote home-ownership among our people. Undoubtedly this beneficial measure will be warmly welcomed by the people at large. As a matter of fact, this massive public housing scheme will not only accelerate the allocation of housing to thousands of people on the waiting list, but it will also provide jobs for thousands of building construction workers as well as affording better development opportunity for industries and trades related to the building industry. This gives a boost to our economic prosperity and a good counter-recessionary measure. At the same time, the Minister for Finance pointed out that, as compared to 1973 where there was a drop of 15%, the private construction sector showed a further `drop of 11% in 1974. This shows that the private building industry fared very poorly last year and is on the decline. The Government has no doubt taken some remedial action which includes the relaxation on the control of housing loan and permission for aliens to buy flats in buildings of more than six storeys high. But after implementing these measures over the past few months, transactions in the private housing industry do not seem to have picked up very much.

In order to help the private building industry to develop and to ensure that this industry will make a better contribution to our national economy, I feel that the Minister for Finance may find it necessary to further relax the control on the purchase of houses by aliens. This is because if the private building industry is still in the doldrums it will be a setback to our efforts to diversify our economy. At the same time, all the professional people connected with the building industry will be adversely affected. These people include architects, civil engineers, electrical engineers, surveyors, quantity surveyors and draughts-men. Furthermore, lawyers and accountants as well as valuers who are also in some way connected with the private building industry will also be affected. According to unofficial estimates there are about 5,000 such people in all, and 80% of them are local citizens. These people have received high education in Singapore and some have returned from foreign countries after receiving higher education. Their business and professional practices are closely related to the private building industry. If the private building industry is allowed to continue to decline, they will be adversely affected. Since the Government pays so much emphasis on the elite and the utilization of their skills, it should also pay attention to their livelihood so as to prevent a brain drain overseas.

The Minister for Finance has emphasised a need for the diversification of our economic activities. This is a very correct strategy to adopt. Diversification of the economy means that apart from the positive development of industries there is also the need to expand our manufacturing base, particularly in relation to metal and precision engineering, chemical industry, electronic industry and transportation. Furthermore, international trade, shipbuilding and tourism are also our great foreign exchange earners. They are the great pillars of our diversified economic activities. As a matter of fact, as Singapore is the centre of international transport and communication in South-east Asia there is plenty of scope for further diversification in our economy. For example, in the timber and textile industries, no doubt in the last year these two industries have been adversely affected by international recession. But in 1973 there was a big boom in the timber industry. According to available statistics, in 1973 the export of timber amounted to 1,157 million cubic metres, valued at $305 million. Our main customers were France, South Africa and England. But in 1974 this business dropped by 40%. According to businessmen in the timber trade, apart from the decline in the demand for timber owing to international economic depression, some unscrupulous timber merchants had exported timber of a quality not in accordance with specifications, and this has affected the confidence of international buyers in our timber trade. If that allegation is true I think the Timber Export Department and Forestry Department should be answerable, because it is the business of these two Departments to ensure proper supervision and grading of our timber and to raise the quality of timber as well as to carry out research in this trade. Therefore, if there had been any non-compliance of specifications in this respect, can the reasons be established? Is it because the staff had been negligent in their duties? I hope the Minister concerned will look into the matter.

As a matter of fact, our timber re-export trade has a very good future. This is because we are in the centre of South-east Asia, and our neighbours, Malaysia and Indonesia, are timber producing countries. We have a very modern commercial infrastructure -port facilities, banking, warehousing, insurance and telecommunications. Therefore, the Government should attach great importance to the timber re-export trade and improve the administrative efficiency of the Timber Export Department, so as to make Singapore a centre for timber drying and treating. Another important activity is timber processing, such as manufacturing furniture, wooden doors and windows and other industrial timber products. This industry is flourishing in Taiwan, Korea, Japan and other European countries. So we can take a cue from them and try to catch up. In promoting timber processing and re-exporting we may be faced with some problems, such as the provision of factory sites, capital and technical personnel. In this respect the Government should give certain encouragement and assistance. For example, the Government can provide factory sites near the sea coast for the processing and drying of timber to facilitate the import and export of the commodity. But since a large capital is required, the Government should consider granting a tax holiday for this industry and give whatever financial aids or loans that may be required. As regards technical personnel, if we lack local people perhaps a relaxation of immigration regulations in regard to such people from abroad can be considered. According to estimates there are about 116 sawmills in Singapore and 309 timber exporters, making timber quite a big business. So reactivation of timber industry will not only contribute to the diversification of our economy but also provide jobs for thousands of workers.

Sir, let me now turn to the question of tax increases. Generally speaking, there should be no complaint against tax increases on tobacco and liquor because they do not affect the people very much. But what is unfortunate is that the Minister for Finance has also increased road tax, and I feel that this is quite unreasonable. For example, for vehicles in the range of 1000 cc to 1600 cc, the increase is about 50%. Vehicles in this range are actually small and medium-sized and they constitute more than 80% of the number of vehicles registered. For vehicles of more than 3000 cc the tax increase is 5 cents per cc, which is only about 15%. Vehicles in the 1000 cc to 1600 cc range are commonly owned by people in the middle income group in the private and public sectors. Their income is not very much. So the Government should sympathize with them and not further aggravate their burden in the face of inflation. Therefore, I would like to appeal to the Minister to avoid increasing the road tax in respect of vehicles in this range. If at all an increase is necessary and inevitable, then it should be reasonable and I would suggest that an increase from 17 cents to 20 cents per cc would be more reasonable than an increase of as much as 50%.

As regards luxury vehicles of 3000 cc and above, I feel that the increase is not adequate. As we all know, a person who can afford a car costing $50,000 or more must be a very rich man with a very handsome income. Since he has a big income, he is certainly able and expects to pay higher taxes. So the Minister should actually readjust the tax increase, as it does not appear fair to impose only a nominal increase in this range of luxury cars.

Sir, the Minister for Finance also announced two tax concessions. But these concessions are only applicable to people who are 55 years old and above. As from the 1976 year of assessment the earned income relief of those beyond 55 years of age will be increased from $1,000 to $2,000, and for those over 60 years their earned income relief will be increased from $1,000 to $3,000. But those who are under 55 will get no further relief at all. Sir, I support these tax concessions in principle. But, as a matter of fact, I doubt whether many people will benefit from these concessions. I think the number will be few and far between. In the public sector, there is the compulsory retirement age of 55 years. Public servants who retire will have no income at all; so how can they benefit from the tax relief on earned income? In the private sector, I feel that the number of such people will also be very small. Again, I think the number of those who benefit from these tax concessions must have been very carefully calculated by the Minister, and the benefits, if I may say so, are more imaginary than real. Since the benefits are more imaginary than real, the loss in revenue is negligible, if at all. Therefore, in my view, these tax concessions should not be subjected to the age qualifications of employees. This is a very reasonable expectation. As a matter of fact, the present personal relief on income is inadequate because it was fixed more than 20 years ago when the value of money was much higher and the prices of commodities were much lower. Compared to the present level, I think prices have gone up a great deal. But the tax relief has remained unchanged. So how can this measure relieve the burden of the salaried class? Therefore, I feel that the wise Minister for Finance should make some wise tax reduction measures.

Sir, if the proposal to remove the age limit cannot be agreed to, perhaps I can make another suggestion, and that is, in respect of those who maintain their aged parents and grandparents. I think a similar tax relief should be considered since the Government is encouraging citizens to have their parents stay with them so that members of the family can be better looked after. These people should he given tax concessions so that they will be better able to maintain their parents. Otherwise, with more taxes taken from them, these people might not be in a better position, or in any position at all, to maintain their parents who may thus suffer. This is one way that the Government can encourage respect for the aged people.

Sir, in short, the annual Budget statement is highly commendable. In terms of policy for industrial and commercial development, we can see the determination of and the positive measures taken by our Government to counter recession and to promote economic development, which is the basic spirit of the Budget. The Minister for Finance also predicted that our economy would turn for the better in the latter half of this year. I hope that he is not wrong in his prediction.

Sir, apart from the turn for the better in the international situation, another factor that will be required for our development and prosperity is the good quality of our people. Therefore, our people should continue to develop and demonstrate this spirit of diligence and dogged effort and help to implement the wise policies of our Government so that in the coming year we will achieve greater prosperity and progress.

Sir, I support the policy of the annual Budget statement.

6.38 p.m.

Mr Ivan Baptist (Potong Pasir): Mr Deputy Speaker, Sir, in the same breath, in expressing his reluctance to increase taxation "lest it should raise the prices of essential goods and services, especially food and clothing, public transport and housing", the Hon. Minister for Finance argued that "additional revenue will have to come from increased taxes on tobacco, liquor and cars". Transportation is vital for essential commodities like vegetables, fish, meat and so on, to be taken to markets for sale to consumers. Vans, cars, motorcycles with side-carriages, the majority of which are petrol driven, are utilised to transport these essential commodities to markets. The increase in the road tax of vehicles would mean increasing costs in transportation of essential commodities to markets. My fear is that this will cause increases in the prices of essential commodities and the consumer will have to pay more for these essentials. If the rationale behind increasing road tax for motor vehicles is to limit the number of cars on the roads because of traffic congestion and air pollution, then taxation at source would be more realistic. In addition, stringent measures could also be introduced to ensure that only road worthy vehicles are allowed on roads as poorly maintained vehicles cause not only traffic congestion, because of constant stalling and breakdowns, but also air pollution because of wornout machine parts that lead to excessive smoke being emitted. However, if the rationale is to increase the Government revenue to offset expenditure, surely another method of taxation which will not cause price increases of essential commodities could be introduced.

Sir, I would also like to make mention that the Budget statement was tempered with compassion in its consideration for those above 55 and above 60 years of age. The tax concession offered to working people over 55 and over 60 years old is indeed a gesture of humane regard for their long years of contribution to our Republic. In addition to their being able to spend more money staying healthy and getting to work, they will have a sense of importance because of their recognition by Government. They will also be able to spend a few extra dollars, which they always do, without too much constraint for their children and their grandchildren, especially on occasions like birthdays, anniversaries and festivals. As people get older they need to be reassured from time to time that they are wanted by society, a society that they have spent many years working for. The method introduced by Government to reassure these people is indeed praiseworthy.

Sir, the importance of tripartite cooperation among the Government, employers and workers cannot be overemphasised. And I am in absolute agreement with the Hon. Minister. This is a major requirement for Singapore's continued progress and prosperity in times like this or at any other time. In the midst of rapid technological change, our nation and our people have accepted the challenges and the hardships of change. The Government harnessed the change, painful though it might have been, for the benefit of the community as a whole and for gaining economic strength.

However, we need to speed up the pace of industrial training to ensure that those affected by industrial change are given the opportunity to be trained to take advantage of the jobs that new growth industries are providing. We are too dependent on imported skills in many industrial areas. Employers are not playing a significant enough role in the industrial training process. They must be required not only to promote but also to assist in the promotion of industrial training. In addition, it is necessary for us to keep our goods competitive by keeping costs from rising. This can be done effectively by economies in manning and the elimination of waste. This is a positive way and is a sure road to higher real wages and high standards of living. Unfortunately, this is not practised religiously by employers. There is also a tendency for employers to seek to take industrial relations out of the field of human relations. This tendency is detrimental to worker-management cooperation. There is no future in this direction and this tendency should be strongly deprecated.

6.45 p.m.

The Minister of State, Prime Minister's Office (Haji Ya'acob Bin Mohamed): (In Malay): Mr Deputy Speaker, Sir, at first I had not intended `to participate in the debate on the Budget, but after hearing the views of so many Members who have spoken, I feel I should involve myself in this debate and speak, if only briefly.

I welcome the Budget as presented by the Minister for Finance. It is a very moderate Budget considering the problems of inflation and recession all over the world. In debating matters connected with tax increases one thing should be borne in mind. It is a truism that not a single Finance Minister is able to present a budget that everybody could accept with a smile. Only those who benefit will smile but those who are affected will always complain. It is like a father who has perhaps five or six children to look after. He will not be able to satisfy all of them. I feel we are lucky to have a Minister for Finance who is efficient, but humble and publicity-shy.

With regard to the reference made to his service during the colonial regime, I would like to remind Members here that history has shown that not all those people who worked during the colonial period are traitors to the nation. In fact, many of them became heroes in their fight for independence. History has also shown that many people who fought for independence were opposed to colonialism, but the moment they attained independence they became traitors to their nation's cause. So the question of personality should not be raised in this House because, as I said earlier, no Finance Minister can present a budget that will be received with a smile by every individual citizen. I would like to stress to Members that we are indeed lucky to have a very polite Finance Minister who works hard without any publicity and is able to present a budget that can bring our country to economic success and prosperity in this region.

6.50 p.m.

Mr Chin Harn Tong (Aljunied): Mr Deputy Speaker, Sir, the Honourable Minister for Finance, in presenting his Budget Estimates for 1975, has clearly shown that he has done his homework and that he has given careful consideration to every possible factor or circumstance which may affect Singapore's budgetary affairs. At a time when most countries in the world, apart from the oil-producing countries, are having economic convulsions, the 1975 Budget Estimates prescribe a preventive dose of remedy against economic recession.

By the skilful management of our economy and with the cooperation of all concerned, Singapore has done considerably better despite the fact that we have neither raw material nor energy resources. While the major industrial nations of the world are expected to recover from their present economic difficulties in the near future, Singapore's outlook for the future seems rather bright.

But, as the Minister himself has cautioned, there will be a time lapse before the economic recovery of the industrial powers of the world can have an effect on Singapore's economy. Again, something unforeseen may crop up to delay the expected economic recovery or its effect on our economy. It is reasonable, in the circumstances, not to anticipate any such economic recovery before early 1976 but to have our own plans of development so as to maintain our economy at a steady pace in the meantime. If we were to do nothing in the hope that our own economy would surely benefit from the general economic recovery of the world, we might find that our economy would have lost so much momentum as to be unable to take advantage of any future economic boom.

In that respect, the development plans outlined by the Minister, for giving a booster jab to our economy and making available the funds for this purpose, cannot be disputed. Just as it is said that an ounce of prevention is better than a pound of cure, it is logical now to channel a significant proportion of our limited funds into development projects to prevent a slowdown of our economy rather than to squander later on far more funds in reactivating an economy that has been allowed to slow down significantly.

I have, however, comments to make on three matters which have been unsatisfactorily dealt with or completely omitted in the annual Budget statement and in the Revenue and Expenditure Estimates.

The first matter relates to the establishment of a high-powered body, such as the Road Transport Action Committee, on which five Ministries are represented by their respective Permanent Secretaries and to the enactment of a statute such as the Road Traffic Act, portions of which are administered and enforced by two different Ministries. Sir, I would like to make it clear that I support the establishment of such a high-powered body which is normally associated with one Ministry, in particular, and which is so constituted as to avoid bureaucratic red-tape in order to resolve the traffic nightmare. I appreciate that it is not practical or feasible for every Ministry to enforce by itself every statute it has to administer.

Nonetheless, any committee, even a high-powered one, and any enactment, in the normal course of its operation or implementation, may give rise to grievances which require to be resolved. Some of the grievances may be petty or groundless. But then again, some grievances may be genuine as there may be anomalies which have somehow been overlooked by the committee in its deliberations or which have not been readily apparent before implementation of such an Act or a decision.

I would suggest that, to facilitate the accounting by the executive to this House, separate budgetary provisions be made for any committee or body which exists beyond the jurisdiction of any particular Ministry or the portfolios of the different Ministries be revised to provide for such committee or body. The second matter relates to the Minister's proposal to increase the road tax on petrol-driven private vehicles. The apparent justification for an increase in this particular tax is the anticipated fall in revenue from other sources taken in conjunction with the proposed increase in the development expenditure. Then again, the brunt of the proposed road tax increase falls on the owners of petrol-driven private vehicles in the 1001-2000 cc range. The apparent justification is that the affected category of vehicles constitutes the bulk of private vehicles on the road in Singapore. Any tax measure that would significantly help to keep down the number of cars on the road would apparently help to ease road congestion in Singapore. In that sense, the Government has evidently intended to kill two birds with one stone, that is, raise funds and at the same time relieve traffic congestion in the Central Business District.

In the case of road tax on petrol-driven private vehicles, a certain amount of confusion has resulted from the proposal to impose the heaviest tax increase on vehicles in the 1001-2000 cc range. The existing graduated scale of road tax, that is, before 3rd March, 1975 on petrol-driven vehicles has presumably been drawn up to discourage Singaporeans from owning vehicles with unnecessarily large engines. Every drop of petrol that is needlessly burned up merely adds to the pollution of Singapore's atmosphere and the size of Singapore's foreign exchange spending. It is also to be presumed that the justification for this graduated scale of road tax continues to be as valid as ever. That is why I find it hard to see any real need for a re-adjustment of such scale in favour of owners of petrol-driven vehicles of over 2000 cc, because the bigger the vehicle the greater the luxury.

That brings me to the third matter on which I want to comment, that is, the question of pollution. Singapore, of course, is a small island with a proportionately thin strip of territorial water and tiny air space over which Singapore can exercise any control in so far as anti-pollution measures are concerned. The pollution of Singapore's seas by the "Showa Maru" disaster and the pollution of our atmosphere by forest fires in neighbouring countries show the extent to which Singapore is vulnerable to external events and circumstances.

But within these rather narrow limits Singapore should and could provide all reasonable facilities and measures to combat and control any form of pollution in Singapore. An illustration in point is the `formation of a centralised command to combat oil spill in and around Singapore waters - mainly the Anti-sea Pollution Unit of PSA - a measure which the Government deserves to be congratulated. But such praise cannot be given to the Government in relation to its effort in controlling other forms of pollution in Singapore.

The Minister in his annual Budget statement has correctly dealt on the need for development. But any form of development is bound to affect not only our economy but also our environment, for better or for worse. If the effect is bad, as when it results in some form of pollution, then it is necessary that steps are taken to prevent or minimise such pollution. The provision in the Budget for additional development does not seem to consider the need for additional expenditure on anti-pollution measures.

The greater danger is posed by chemical pollutants since their toxic effects are built up slowly in human tissue and are not readily apparent at the beginning. By the time the full toxic effects of chemical pollutants are felt, it may be too late. It is pointless to create jobs for our workers, only to turn them into bed-ridden patients in later years.

It may also be appropriate for me to remark at this juncture on the absence of any Government action on the level of pollution emitted by SBS buses, which is most annoying to other road users.

Effective anti-pollution planning, however, may necessitate the coordination of action by two or more Ministries. That brings me back to the first matter I have commented upon. One Ministry may sponsor and administer a piece of legislation, but it may enforce that legislation only through or with the aid of another Ministry. This is a problem which has not been dealt with by the Government up to now.

7.00 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Deputy Speaker, Sir, this has been a rather long day and I have listened very carefully and patiently to all the remarks which have been made by all the Members who have spoken this afternoon.

First of all, I would like to thank Members, almost all I think, for their congratulatory remarks upon both the performance of the economy and for the responsibility which my Ministry has borne in regard to the results which have been achieved over the past year. I thank them also for the many suggestions which have been made for improvements either in the economy or in the various Ministries and departments. I even thank them for the brick-bats which have been hurled at me, because these critical remarks may be valuable in dispelling any smugness or self-complacency which may affect Government Ministries and departments in the success which we have had over the past few years. I think the slowing down of the growth rate may have been to some extent salutary in warning us that we cannot presume upon success all the time and that we need constantly to increase our efforts to improve the economy. This smugness and complacency is felt not only in the civil service, which has been singled out for critical mention here and to which I will refer later, but also perhaps even in our own House, in the nation as a whole, and in the way in which they seem to regard success as being natural and likely to continue. I hope that this very false impression can be disabused of and that there will be a greater effort to try and continue growth in Singapore at the very high rate which we have experienced in the past and to which I hope growth would return, if not this year, at least in the following year.

I would now like to deal with the comments of Members. Let me first deal with the problem of taxes which has perhaps aroused most emotion in the House, so that I can get it out of the way before making my comments on other criticisms. It is always very difficult to balance the needs for additional revenue (and these needs are more evident this year than last year) against the concessions which Members think should be given because of the inflationary or recessionary effects which we are experiencing at present. These recessionary and inflationary effects have influenced the population and have, of course, affected the way in which matters of taxation, such as those I have introduced in this House, have been regarded. At the same time there is a great need for recognition by all citizens in Singapore of their responsibility of paying for some of the services, which are afforded by the Government and which cost the Government a considerable amount of money, which must be financed. I `have previously stated, as being the opinion of some international experts, that perhaps the burden of taxation is not being spread broadly enough to bring home to the people of Singapore the realisation that the Government is there not only to spread benefits but also to provide the means to pay for these services.

I think the matter which raised most excitement was the increase in road tax on cars. There has not been a dissentient voice on the taxes for tobacco. In fact, there was even one Member who was in favour of increasing the taxes on tobacco. There was general support on the tax on liquor, although one Member, who thought that I was not a beer drinker, suggested that it was unfair generally to beer drinkers who are increasing in number and therefore this measure is `likely to affect a major part of the population. May I assure that Member that I am also a beer drinker but I would not grudge the extra that I have to pay for the bottle of beer that I consume. I hope that he and members of the public will feel the same.

I noted that quite a number of Members have been somewhat critical about the way in which I `have framed the increase in road tax. Some Members thought that the emphasis was perhaps on the lower or at least the middle group of cars. I should explain that while it is true that the burden of this particular taxation has been on the 1000 cc to 2000 cc cars, that on these the burden is heaviest, when you look at the whole range, starting from cars below 1000 cc to those over 3000 cc, the burden of taxation has been relatively fair. Therefore, I would ask them to look at the whole package rather than on particular aspects of the package. I have noted the names of Members who spoke on this, but they are so numerous that I think there is no need for me to repeat them here. But I have taken note of those Members who are particularly unhappy about a particular part of the package.

Most Members believe that the tax is not what I said, i.e, that it does not affect matters basic to life for the average family. The general feeling is that the average family is now in a position to afford a car, perhaps even a car in the 1000 cc to 2000 cc group. I am very happy that this is the general impression because it really reflects the growing affluence of our community. If it is true that it is no longer a luxury to own a car but a standard possession of the average family in Singapore, then I think it is also true that "there is a chicken in every pot" in Singapore. Maybe we have achieved this particular objective. I doubt it myself, but after hearing Members I get that impression. After saying all this may I say that I am totally unrepentant about having imposed this rather modest tax. I thought that the increase of $60 per annum for the 1000 cc and under cars is very modest. Sixty dollars a year is merely $5 a month. I am sure that anyone who goes to the Orchard Road Car Park, Albert Street or Bugis Street area and does not spend $5 for one good meal with his friends or members of the family would be rather unusual. So if it is true that a 1000 cc car is now a standard possession, then the $5 increase per month for that particular possession is a very reasonable price to pay.

Some Members thought that my objective of increasing the road tax was to prevent a greater number of new cars getting on the road. That was a secondary objective. I did not put forth this objective as the reason for imposing this particular tax. In fact, if Members had read my Budget statement carefully, I made it quite clear that I wanted more revenue and this was one method. The amount of tax for individual cars is rather small - $5 a month - but collectively it comes to a respectable sum. In fact, I did not think that this is the solution to the congestion problem nor would this be the answer to making a success of the CBD scheme or the Park and Ride scheme. It is purely a psychological reminder that these schemes are coming, and that some influence should be exercised upon persons to try and use more public transport. In order to make a success of the schemes which we are proposing, there may be a need for further tax provisions in the future. Therefore, I do not want Members to think that this is the final round of tax, and that having imposed this tax, this is the end of all taxes as far as road transportation is concerned.

I now come to the tax concession which I made for people who work beyond the age of 55 or 60 years. I think very few Members welcomed this particular tax concession. The Member for Potong Pasir was an exception. But most of the Members thought the relief for workers over 50 was purely token. The cost of the tax concession is going to be $4 million, and certainly no Minister for Finance would regard this as purely token. If I did not consider it necessary that this should be given for a very definite purpose, I would not have agreed to do so.

The Member for Paya Lebar was particularly ironical about this particular tax concession. He is perhaps unusually suspicious, but that may be the result of his own environment and experiences. Maybe he has had a harder life than most of us and that accounts for his rather jaundiced view. But I hope he will live long enough to continue working until well over 55 or well over 60 years so that he can enjoy this particular concession.

There are many other countries where people work over 55. In fact, the retirement age in some countries is 65. As to the suggestion that we should have a retirement age of 60, that is already in force at least for new Government servants. If there is a request by those who were engaged before a certain date, and who are covered by safeguards under the Constitution, to opt for a new retirement age instead of 55 without wanting to keep their safeguard, I think the Government would be most happy to consider an extension of their retirement age.

The reason is that there is or was until recently a manpower shortage and in giving this particular concession I am hoping that we will soon come again to that happy position. In fact, we are now issuing work permits to people who are non-citizens, which means that there is a demand for additional labour. We have tried to encourage greater female participation from our own population with some success. But I am afraid that the possibilities of extending this beyond the present position are not very good. In any case, some of our women would be better off looking after the children. We are trying our best to try and get as many people, who are not at present economically active, into employment. For example, I think the employment of crippled or handicapped people in certain jobs has been tried quite successfully in the Government service, and there is all the reason in the world why people who are still fit after 55 or even after 60 years should be induced to carry on working for as long as possible. There was a suggestion that employers are not prepared to maintain employment for people who are over 55 years. Of course, this may be true in particular cases, but if those over 55 years have skills, as we hope they will increasingly acquire skills over the next few years, then they will be valued employees, and I am sure employers will want to retain them.

There may be a possibility that the wages obtaining at 55 years would be higher than may be justified by the skills; in which case, of course, the regard for seniority will have to be cast aside and the employee over 55 or 60 years must merely get the rate for the job he is doing. This also happens in the Government service. There are some people who get the rate for the job. In the past the Government paid three-quarters of the salary for people who came back into the Government service. In the last few years there have been others who have come back on full pay. This is obviously what they are worth and, therefore, they should receive the full pay which they deserve.

In place of this relief for workers of over 55 or 60 years I think there was a very impassioned plea - I am not quite sure which Member made it for extending reliefs for young couples rather than for those over 55 years. There was another suggestion that the relief which I am giving to people over 55 years should be extended also to all workers below that age. It is simply not possible for any Minister for Finance to do that because it really comes back to the question of whether I should give additional tax relief to every taxpayer. I am afraid that would not be possible.

There are very few people who can avoid taxes. There are two things we cannot avoid -- death and taxes! At least those who are in the comfortable class of being able to come within the provisions of the Income Tax Ordinance certainly cannot escape, not even hawkers. There were some criticisms to the effect that the Inland Revenue Department had not been taking action against hawkers. The reason was that the return or yield from action against hawkers was not adequate, and in some cases we spent much more than what we collected. I think I need not have to assure Members that where cases of flagrant violation of income tax laws are brought to our notice we are prepared to prosecute offenders to the full extent of the law even if it means that we will have a negative return on our efforts. But last year I suggested that if Members knew of any particular hawkers who were making extraordinary amounts of money they should bring them to our notice, and we would be very happy to make the investigations and to collect whatever was due to the Government and to the people.

There are a number of other suggestions for new taxes, and I am very grateful to Members for even thinking about them. Some of these are for capital gains tax (capital gains in the stock market perhaps) and increased taxes on companies. I need only say that these are among the very hardy perennial suggestions which have been made to us and which we have consistently rejected because they are against our ideas on how our economy should develop. If we really do want to have multi-nationals and to have them manufacture in Singapore, and if we want to compete in the way that we have done in the past, then these ideas are not really feasible.

There was one further variant of the suggestion that tax relief for workers over 55 years should be changed, and this is that the income tax relief for parents or grandparents ought to be increased. This was also examined. I thought that having regard to the fact that we were already giving $750 relief per parent or grandparent living with the taxpayer, this was adequate. I see no reason to change my mind on this at the moment. I do not think there are any other ideas on taxation, but if there are I will examine them when I have the time to look over the very voluminous notes I have taken this evening.

I now come to the civil service. There were two comments. One was by the Member for Katong. He mentioned that while in Fullerton Building he saw a number of civil servants sauntering and lounging and enjoying themselves. I would appreciate it if he had come to me and told me about this particular department instead of just mentioning it here. I hope, after the meeting here tonight, he would do so.

The Member for River Valley also dealt with the subject which, I think, he originally spoke on in the debate on the President's speech. He mentioned the implementation process, the difficulties of the professional and medical services and the bureaucratic way in which matters were being dealt with in the Ministries, particularly the Ministry of Finance with regard to the authority on expenditure of funds, virements and so on. It is very easy for the civil service to be the target whether of Members here or of the people who write to the Press. Civil servants are prevented by regulations from making any reply themselves and so, as the Minister in charge, perhaps I can in a very small way reply on their behalf. I am grateful, of course, for any suggestion which may be made to improve civil service standards, and I am obliged for one or two expressions of satisfaction for the efficiency of our civil service generally. I think there is no question that, at least in this particular region of the world, our civil service is regarded as being perhaps as efficient, if not more efficient, than those of other jurisdictions. I think members of the civil service are justified in being a bit proud of their reputation and standing. They should not, of course, carry this pride into their relations with the public, and I do not think they do except for a few black sheep. I certainly do not accept the general truth of any criticisms of this nature, and if there are any particular instances I hope Members will not just make general remarks but refer particular instances to me.

The civil service is so constituted that there are various spheres of responsibility and those in the higher levels of the service, of course, should be concerned with matters of higher administration and policy, while the administration generally of rules and regulations must remain with the lower ranks of the civil service. This is really necessary as a measure of efficiency, and the problems to he dealt with should be dealt with at as low a level as possible. Only when these problems are not capable of solution at these lower levels should they be referred upwards. So the problems such as those of compliance with financial regulations or authority for expenditure and so on are, in fact, devolved upon the clerical service and perhaps the executive service. These officers ought to be able to implement the regulations and the people who submit requests for authorisation ought to be able to deal with them without too much difficulty.

The Member for River Valley also mentioned a few instances which are obviously ridiculous. For example, the approval of a 50-cycle generator accompanied by the query that there should be justification for the purchase of 50 bicycles is rather an extreme case. In my own experience of matters which have come to me, I do not think that there are many instances of such ridiculous requests by the Budget Division of my Ministry. If there were such examples, again I would like these to be brought to my notice and perhaps those who perpetrated these blunders can be sent to our Staff Training Institute.

There was also the comment that virements could not be approved by the higher civil servants of other ministries. I do not think that is particularly true. This is really a misunderstanding or misconception. Authority for certain virements have already been delegated to Permanent Secretaries of other ministries and there is really no need to refer any of these virements to us. However, there are certain other types of vire ments which require approval from the Treasury, because they are subject to Treasury sanction or to certain regulations which prevent, say, expenditure on manpower being vired to a special expenditure. These requirements are, I think, only to be expected. Nevertheless, I welcome the suggestion of the Member for River Valley that the Estimates Committee should try and improve on our methods and procedures, and I will be very happy to receive suggestions from the House or the Estimates Committee on how our procedures can be improved.

I would like to make one formal comment in regard to the civil service, and this is a matter on which I thought Members would have expressed some appreciation. This is on the presentation of the Budget. But the only comment I had has been, in fact, an adverse comment - that we have classified the Estimates so that we now can tell what appropriations are made for various economic purposes, but the emphasis should really be on performance rather than on cost. I ought to say that performance budgetting is one other aspect of budgetting procedures which we are trying to improve. But in view of the work which we were already doing on the manner of presentation of the Budget, we thought that that should have priority before we went into the new method of performance budgetting.

Now I would like to deal with the matter of tourism. A number of Members in this House thought that the natural advantages of Singapore would be sufficient to attract tourists without our having to spend any money on the Singapore Tourist Promotion Board. This was, in fact, the policy we adopted in the early years of the 1960s - that tourism was not important and that if the tourists wanted to come to Singapore, the natural advantages would be such that there was no need for further promotion. I think we have abandoned that particular practice or policy. We decided that certainly in the years when the British were having a military rundown from their Singapore bases the earnings from tourism would be very helpful in improving the balance of payments by earning foreign exchange for Singapore. And I see no particular reason why we should depart from a policy which has paid such dividends over the `last few years.

There was a further comment that the Singapore Tourist Promotion Board had not been paying enough attention to, or that some of the revenue which they obtained from cess on tourist establishments, restaurants and so on, could be used to finance the arts or culture. The Tourist Promotion Board, in fact, has spent money in sending troupes overseas for cultural shows. Perhaps this is not the very best way in which funds of the Tourist Promotion Board can be applied because much of the money that is being used has gone into the payment of fares for the people who travel overseas.

The Tourist Promotion Board has also started a project to promote arts and craft in Singapore. There will be a centre for arts and craft which will be near the Board's offices in Orchard Road. I think a very considerable amount of money will be spent on this arts and craft centre.

There was the comment by the Member for Jalan Kayu that the report of the Tourist Promotion Board has not been produced as rapidly as it should be. I have pressed the Singapore Tourist Promotion Board to produce their reports more expeditiously. And the reason why they have not been able to do this is that there have been considerable movements of staff which have meant that the people responsible for these reports had unfortunately not been able to complete their work before leaving the Board.

There was the comment by the Member for Bukit Ho Swee that tourists were being fleeced. This and other defects are all, I think, being remedied and I hope that the situation will be much more satisfactory in the future.

The Member for Jalan Kayu thought that in view of the contribution which tourism has made to our economic development the increases in costs which have been imposed upon the hotels and upon the tourist industry generally have been rather adverse in their effects. Unfortunately, due to the greater cost of oil, electricity and other costs, like increases in wages and so on, have to be recovered. I do not think there is any remedy for this. Our only consolation is that these higher costs also affect our competitors in the tourism industry, and therefore we should be able to maintain our competitive edge.

These are the matters on which I have some responsibility. There were other matters raised by Members but they really concern other Ministries and might perhaps better be raised when the debate on the Estimates takes place.

I should like, however, to comment on the representations of the Member for Jurong, who generally at this time of the year speaks on agriculture and of my neglect of this particular sector of the economy. I think I have responded at some length in previous Budget debates. But I always listen to the Member for Jurong with sympathy because my early years were spent on a farm. I was born on a farm. In my early years in the civil service, I think I was regarded as a fairly competent land officer; at least I hope so! I am quite aware of the problems of farmers -having served in the Land Office from 1939 until 1959, at least when I ended up as Commissioner of Lands. So I may be said to have had some experience of the problems relating to farmers.

Unfortunately with the development of the economy in Singapore, the amount of land that will be left for agriculture will be very limited, and there is no redress that I can see. There is no possibility that we can find enough land for all the farming desired. All of us, I think, are in some respects farmers at heart. We like to own a piece of land. We like to see things growing but we all cannot fulfil our ambition to be farmers. Nevertheless, I am filled with admiration by the achievement, under very great difficulties of our farmers in making us self-sufficient in pigs, poultry and eggs, in supplying so much of our table vegetables and in many other ways. As I say, I cannot, as Minister for Finance, see any way in which we can increase the supply of agricultural land and I am afraid that we may have to look to other areas for the supply of these vegetables.

On the kind of farming which is possible in the future, I think what we are trying to do is to finance the industrial type of farming - the very capital-intensive type of pig and poultry farming which is really a kind of industry rather than the old type of farming which we are accustomed to in the past.

There is one other point which was made - the question of timber and the warning which the Members for Katong and Sembawang gave against the reputation for the quality of our timber industry being spoilt by exporters with rather unsatisfactory practices. I will take their suggestions into consideration and hope that our Timber Industry Board can remedy the mistakes which have been pointed out.

I am glad that there was general support for the education and manpower training which we shall have to maintain or initiate so that we can improve the skills of our workers and prevent a brain drain overseas. I am conscious of the need to provide sufficient opportunities for our own people in the kind of industries which will make the fullest use of these skills.

There were other matters mentioned by the Member for Aljunied, such as the Road Transport Action Committee and pollution measures. These are matters not really within my competence, and I hope he will raise them with the particular Minister in charge of these matters.

Finally, I would like to comment on the need which one or two Members have expressed for tripartite cooperation in connection with the National Wages Council and the National Productivity Board. The need for such cooperation is the reason why, in my Budget statement and in this particular reply, I do not propose to offer any suggestions or guidelines for the National Wages Council, as was suggested by one Member. It would be presumptuous of me to provide what is really within the functions of a tripartite body. I agree entirely with Members that cooperation of this kind is very desirable.

Sir, I think I have answered most of the points raised. There are various other matters which I have notes on, but at this stage perhaps they may not be necessary for me to reply.

7.52 p.m.

Mr Tay Boon Too (in Mandarin): Mr Deputy Speaker, Sir, before listening to the Finance Minister's reply I then had a certain prejudice against him. But now after having heard his reply, I would like to withdraw what I had said earlier about him. I refer to the two matters which I had touched upon regarding our Minister for Finance as a senior officer during the colonial time and that the budget formulated by him was slanted towards supporting the capitalists. These remarks I would now like to withdraw. These are the two points directed at the Minister for Finance which would appear to be disrespectful to him. So I would like to withdraw. I express my appreciation of his explanation, and I hope the Minister for Finance will excuse me in a most generous way.

Question put, and agreed to.

Resolved,

That Parliament approves the financial policy of the Government for the financial year 1st April, 1975 to 31st March, 1976.