ANNUAL BUDGET STATEMENT

Order read for Resumption of Debate on Question I 1st March, 19761. "That Parliament approves the financial policy of the Government for the financial year 1st April, 1976 to 31st March, 1977 " [Minister for Finance]

Question again proposed

2.51 p.m.

Mr N. Govindasamy (Telok Blangah): Mr Speaker, Sir, in the last two decades or so, we in Singapore have faced a few crises and have overcome them. The resilient and hard working people of Singapore will respond positively to whatever problems we may have to face, if we take them into our confidence and explain to them frankly what the odds against us are.

When we became independent in 1965, against unpredictable odds, we were able to launch our industrialisation programme successfully. Every true Singaporean had put his shoulder to the wheel so that we could progress comfortably as an independent nation.

Then in 1968 when the British announced their total withdrawal we were faced with a massive unemployment problem. Together with our workers, we took bold decisions that created a climate for massive industrial investment. As a result of this bold and unprecedented cooperation between Government and labour, we enjoyed a period of full employment and prosperity.

Perhaps now, we are facing yet another crisis which we have to face squarely and decide on a course of action which though might be unpalatable in the short term, would accrue benefits to the Singaporeans in the long run.

From the euphoria of almost full employment two years ago, we are at the moment facing the bleak prospect of serious unemployment. We have to prepare ourselves and plan constructively to create new jobs. In the last two years, for the first time, we had large scale retrenchments in Singapore.

In 1973 we had almost full employment with no retrenchment at all. In 1974 registered retrenchment was 1 7.081. In 1975 9,500 and in the last two months alone, 145 able-bodied workers were retrenched. We must not only help the retrenched workers to get back their jobs but we must also create more jobs to help the unemployed and also create enough jobs for about 30.000 school leavers who join the labour market every year.

It is projected that in the next two years we will have to create a total of 84,000 new jobs in order to achieve a target of reasonable employment. This is going to be a gigantic task unless the Government, the workers and our entrepreneurs can chart out a plan of action to attract new industries and capital investment.

Trade unions in the developed countries argue that their overseas investment has resulted in loss of jobs for their own nationals. They are, therefore, mounting pressure on their own governments and industries to prevent the export of their capital investment overseas.

Our prospective investors from the developed countries will not come to Singapore as eagerly as they have done in the past. The potential investing nations like the United States, Western Europe and Japan, are themselves facing tremendous opposition from their own trade unions against expansion outside their home bases. It is estimated that in the United States alone there are almost 8 million people unemployed. This is almost 8% of their working population. Developed countries in Europe like West Germany. Britain and France, each have over 1 million unemployed workers, and Japan is in a similar predicament. With the investment prospect being so bleak, what do we do?

We must make Singapore once again attractive to overseas investors. We must make sure that our manufactured products are of high quality and cheaper than those produced by our competitors. This can be done if we can increase productivity and reduce our unit labour cost. We made Singapore an attractive place for investment an 1968. We can do this once again.

As I have said earlier, our workers will respond positively if we take them into our confidence and explain to them frankly what the odds against us are. The workers' response alone would not be sufficient. Similar responses should be forthcoming from our executives, managers, manufacturers, industrialists and entrepreneurs. Sacrifices are called for not only from the workers but also from the executives, managers, supervisors, businessmen and civil servants: in other words every sector of our nation.

The almost full employment that we had in the past and also the high standard of living we are enjoying in Singapore, with reasonable wage increases, has made the ordinary man-in-the-street in Singapore over confident and complacent about his future. The attitude of "all is well" is over-prevalent. A greater effort is needed to bring home to our people the stark realities of life.

Our manufacturers will have to continue to search for new markets for our manufactured goods. We can also look into the possibility of introducing protective tariffs on selected items that are locally produced in excess, due to depressed markets abroad. The possibility of at least a limited preferential trading can be pursued within the ASEAN market. I have in mind items like electronic calculators and transistors which are being produced in Singapore and which are also being dumped in the local market from overseas.

Our manufacturers, especially the local ones, must be tough and high pressure salesmen. They must go out to compete and to sell. They seem to be over-reliant on the Government, asking for one concession or the other. While asking the workers to work hard, to reduce cost, to increase productivity, they must themselves set good examples of what they preach. When workers are asked to economise and cut costs, the executives and managers should not be seen to be changing the fleet of management Mercedes-Benz cars every three to five years.

One of our biggest labour intensive industries is ship-building and ship-repairing. In recent years shipyards have grown rapidly in Jurong. Tanjong Rhu. Sembawang, etc. Recently we hear of declining prospects in this particular sector, and there have been retrenchments. This is a serious cause for concern. Fierce competition is being felt by our local shipyards from Hong Kong, and especially Japan. In order to keep the Japanese workers employed and the shipyards going, large ship-builders in Japan are now successfully competing with our shipyards in the building of small barges and small-sized craft. They are successfully bidding against our local shipyards in ship-repairing and reconditioning. Our shipyards, in order to remain competitive, should be able to provide faster service and competitive costing.

Next, I would like to touch on the statutory boards and Government-owned commercial and industrial enterprises either wholly owned or on a joint-venture basis. Recently the Minister for Labour, as well as the Hon. Minister for Finance, commented on the desirability of improved personnel management. This improvement in personnel management and industrial relations is required not only in the private sector but also in the Government-owned enterprises and statutory boards. They too in many instances lack the correct attitude in their industrial relations branch. They think they have the protection of the Government as Government-owned enterprises, and yet they refuse to adopt the same attitude of the Government towards responsibility to their staff and understanding of their problems. We are aware of some Government-owned enterprises and their subsidiaries with unenlightened industrial relations' attitude in their dealings with the trade unions. I know of one statutory board where a senior member of the staff, in answering a query by the union raised in a polite letter in respect of a promotion exercise, replies and I quote:

`As you are fully aware of the provisions of the Industrial Relations Act (Cap. 124), you will realise that it is futile for me to send the union any further guidelines of promotion since the union will not be able to act on them, However, their generality and simplicity will only serve to insult the intelligence of anyone. The delay in replying to your letter is regretted, but it never ceases to amaze the management on the extent at which the union will go to select futile issues.'

In the view of this senior officer of a Government statutory board, the query is a futile issue. Such attitude by senior officers of Government statutory boards would only bring disruption to good industrial relations, to say the least.

The Government has invested large sums of money in some private enterprises as joint ventures in order to promote industrialisation and employment. There are also some large industries wholly owned by the Government. Many of these wholly owned industries form subsidiary companies and joint ventures on their own for supporting services. While not criticising such enterprising expansion of these companies, they should be told to be cautious of proper financial, supervisory and management control by the parent company.

These enterprises are increasing and expanding. Some wholly owned enterprises are also expanding and opening up joint ventures abroad. While congratulating these enterprises on their business acumen and far sightedness, may I suggest that we are still new in the international industrial competitive world and if our enterprises are not careful, they would be swallowed-up by bigger sharks in the industrial field.

Our own industries must first look into the possibility of expanding locally in order to create employment for our own nationals, even if profitability is smaller compared to overseas investment.

I know of a large Government-owned industry which, having been exempted by law from obtaining workmen's compensation insurance, continued to insure with a commercial enterprise for workmen's compensation. By so doing, it resulted in a financial benefit to the commercial insurance firm and a loss to the industry. Having realised this at a later date, the industry innocently applied to the Ministry of Labour for exemption only to be told that they are already enjoying such a privilege. This is only an illustration to show that proper management control of our own enterprises is called for.

Our top civil servants and other suitable Government nominees sit on the Boards of these Government-owned enterprises and partnership companies. In their own Ministries they are already over-worked to their limit, and they could not possibly be expected to devote fully to the workings of these enterprises. It would be unfair to expect them to do so. The burden of responsibility of scrutiny and control of proper management of these enterprises must rest with the Ministry of Finance. And with the present position of the establishment in the Ministry of Finance where there is a shortage of 196 Division I officers. I fear that the situation is going to be extremely difficult, Large sums of public funds are invested in these enterprises which are not accountable either to shareholders or, in this respect, to Parliament. This makes the responsibility of the Ministry of Finance, in respect of these enterprises, greater than we can reasonably expect. I hope the Minister for Finance will give very serious consideration to the possibility of `having. sufficient checks and balances in respect of the management of these Government enterprises.

Sir, one area which the Government has to look into is in respect of a revision of entertainment expenses to various Ministries. In the past few years, the cost of living has gone up and so has the cost of entertainment. In order to make amends for the inflationary cost of living, adjustments have been made to wages. However, I notice that the entertainment expenses provided for the various Ministries have remained static. Most of our Ministers receive State guests and other eminent foreign visitors in their Ministries. I have been told by some eminent visitors from abroad that our Ministers could not decently entertain their guests. It appears as if that some guests of Ministers are only served with soft drinks and in some instances Chinese tea even at an hour when they should be served with lunch or dinner. I agree that they should not be lavish with their entertainment but, at the same time, they should not appear to be Shylocks.

It was customary for the Minister for Labour, who is here now, to invite some prominent trade union officials to dinner at the end of each year when the top officials of the Ministry and the trade unions could meet in an informal atmosphere and discuss problems of mutual interest. This, I notice, has ceased in the last year or two. This is perhaps the result of the niggardly entertainment expenses allotted. The Government should revise the entertainment expenses allotted to our Ministries.

Some Ministers: Hear, hear!

Mr N. Govindasamy: May I, at this juncture, congratulate the Minister for Finance for producing Appendix A of the Establishment List in Paper Cmd. 4 of 1976 showing the vacancy position in the Civil Service at the beginning of December 1975. If you can recall, Sir, I asked for such a List during the last Budget debate in 1975. Although the Minister then stated that this was somewhat difficult, I am grateful that the vacancy position at least is provided this time.

Finally, Sir, during his Budget Statement, the Minister for Finance has handed out his quota of tax increases for this month. This month's quota has been the increase in import duty on tobacco. While not quarrelling on this tax increase, can I take it that this tax increase is the only one for FY 76? It has become the habit of our Government to increase taxes or other forms of revenue not only during annual Budget but periodically in-between budgets. People in Singapore do not any more look apprehensively towards Budget statements by the Minister for tax increases because we have a habit of increasing taxes and revenue collection in one form or another throughout the year.

When will this regular imposition of increased collection of revenue by the Government and statutory boards end?

3.10 p.m.

Dr Ong Leong Boon (Kim Seng): Mr Speaker. Sir, I rise in support of the motion by the Finance Minister on the Budget policy for FY 76.

I must congratulate him for the way he presented the Budget statement and for the general thoughts on financial policy. However, I would like to make some comments on his Budget statement. First of all, and most notable is the fact that the Budget statement this year was described variously and by varied people as "painless, friendly," etc. The Budget statement is obviously painless because the Ministry of Finance has perfected the art of taxing without appearing to be really trying. The Finance Ministry has from time to time imposed tax increases and sometimes even without reference to Parliament. Quite often, news of tax increases come out of golf courses long before Members of Parliament realise that they are in for a new tax increase. I think this has very serious repercussions, Mr Speaker, Sir, and I would like to make use of this opportunity to delve on some of these thoughts.

As my colleague, the Member for Telok Blangah, has mentioned earlier on, in Singapore today we are breeding a horde of exceptionally powerful top civil servants and may I call them "The Magnificent Seven" (or Eight, or Nine). I believe that if too much power is vested in the hands of too few, we may be courting trouble in the years ahead. As I understand it, these top civil servants have been given tremendous incentives to remain at the top by giving them directorships of various Government-owned companies. As my colleague, the Member for Telok Blangah, has mentioned earlier on, these people are already heavily taxed in terms of time and energy in their own Ministries and so how could they possibly give of their best to run these various companies which are wholly or partly-owned by Government? Sir, I wish the Finance Minister could throw some light on this policy of appointing the same people to various companies. If you look at company X, the people on the board of directors are A, B, C, D and E. In company Y, it is B, C, D, E and A. In company Z, it is C, D, E, A and B. And it goes on in that fashion.

Next, I would like to touch on a matter which I think would be of common interest, The revenue of the Republic of Singapore comes mainly from taxes and that taxes come from 20% or 30% of the wage earning population. Therefore, it means that something like 70% of wage earners have, in one way or another, not been paying taxes. We all know that if the Finance Ministry were to apply its genius (and there is no shortage of genius in the Finance Ministry) taxes could very well be borne by a greater section of the population. This, therefore, means that this 20% to 30% of taxpayers need not shoulder the responsibility of revenue contribution. I wish to draw particular attention to the hordes of taxable hawkers, shopkeepers and such like people who, year in and year out, have not been paying taxes. Many of them are driving around town in Mercedes Benzes, Jaguars; you name the biggest car on the road and they have it. Yet the Finance Ministry has blatantly turned a blind eye to these people. I think they should be taxed. I do not know how they should be taxed. I feel humble to make suggestions but I trust that the Finance Minister's officials will 1ook into this matter.

Mr Speaker, Sir, the third matter is manpower research. From time to time we have faced problems with regard to manpower placement, projections of manpower requirements and the supply for the years ahead. We are, in fact, facing such problems now as we faced them sometime ago, the various problems of manpower shortage. I think it is primarily due to the fact that there is no Central Manpower Planning Unit. I understand that the Finance Ministry has a Manpower Research Unit. So has the Labour Ministry, the Defence Ministry, and perhaps even the University of Singapore. Why can't these various manpower research bodies be combined into a Central Research Centre whereby projections can be made for the future? One Ministry planning something quite irrelevant to what another Ministry is planning can lead to a lot of cross-purposes and wrong projections.

A last matter which I think would be of current interest is the mini-tax that the Finance Minister proposed this time, and that is, the somewhat friendly 10% tax increase on cigarettes and tobacco. On the matter of a rather moral judgment passed, the Finance Minister called those smokers "anti-social elements". I am sure he is aware that the Prime Minister, in his earlier years, used to smoke something like 50 cigarettes a day. I am just wondering whether in those younger days the Prime Minister could be described as anti-social. On the other side of the argument, the Finance Minister said that it would be wonderful if all smokers were to, now and henceforth, be good boys and girls and therefore give up cigarette smoking for the sake of their health. May I suggest to the Finance Minister that if it is his genuine intention and also that of the Government to be concerned for the health of the people, then he should increase taxes on cigarettes and tobacco by 200%, not 10%. Ten per cent is a tax gimmick. I treat it at that. With these words, Sir, I hope that the Finance Minister will give us honest replies. I do hope that he will give us an assurance that at least for the coming year there will be no new taxes between now and the next Budget so that we do not have to sit in front of the television set every night to wait for the "9 p.m. Shocker".

3.20 p.m.

Dr Augustine H. H. Tan (Whampoa): Mr Speaker, Sir, the Hon. Minister for Finance has described our economy's performance in 1975 as a fair one though disappointing compared with the double digit growth rates of earlier years. I have studied carefully the figures that he presented to this House, and I reach the conclusion that our economic performance last year was a very poor one. Unemployment rose to at least 6%. Our two engines of growth, manufacturing and entrepot trade, went into reverse thrust, though signs of recovery became evident in the second half of last year. We cannot congratulate ourselves that our services sector provided some compensatory growth. Hon. Members can refer to columns 47-52 of the Economic Survey where they can see that we increased our GDP last year by making more telephone calls, riding in more taxis and buses, living in more HDB flats, and using more electricity, gas and water in our homes. These things certainly improve our welfare but they hardly provide us with any wherewithal to sustain our future standards of living. In other words, we were living on the fat of past capital accumulation!

Hon. Members can refer to Tables 2.3 and2.6 of the Economic Survey (cols. 135-6 and 143-4) where they will see the heavy contribution by the Government sector in both consumption and capital formation last year. What is particularly disturbing is the negative rate of real private capital formation of -7.5%. Despite the substantial increase of 21.9% in the Government sector's capital formation, overall capital formation turned Out to be -2.1%. This means a diminution in the rate of growth of our productive capacity and employment generation.

I would also like to refer Hon, Members to Table XX on cols. 95-6 of the Economic Survey entitled "Changes In GDP Deflators. 1973-75". Two important points may be noted. One is that, while imported inflation subsided substantially, our GDP deflator, which is an index of inflation, still rose by at least 5 percent. Table XIII on cols. 85-6 shows that our wages rose on the average by 7 percent last year. The question that must be posed is whether our NWC recommendation last year and in previous years did not result in cost push inflation last year.

The other point that Hon. Members might wish to note in Table XX is the surprisingly low increase in the deflator for the Service Sector of only 3%. In particular, the deflator for Wholesale and Retail Trade, Restaurants and Hotels rose by only 1 percent. Given the share of this sector of 28 percent of GDP, another 4 percent rise in the deflator would reduce our overall real GDP growth to about 3 percent. Now. I am not saying that a mistake has been made but I would feel more comfortable with some official explanation for the much below average increase in the deflator for the Services Sector.

Let me now turn to our prospects for the current year. As the Minister for Finance has rightly noted, the economies of the U.S., Europe and Japan are in the process of recovery from the worst recession since the Great Depression. Given the slack in our trade and manufacturing, our immediate prospects are good. particularly if we can find new markets for petroleum products. Members will note that the value added for petroleum products in 1975 was barely two-thirds of that in 1974.

Our medium-and longer-term prospects are more worrisome. Much would depend on the economic performance of the advance countries and on how potential investors look at Singapore as a base for their activities. The economic outlook for the world economy over the medium and long term depends on four interrelated factors:

1. Price of Petroleum

Despite this morning's headlines, at least over the short and medium term, I believe we can expect the price of petroleum to rise inexorably. Hon. Members will note that OPEC was able to raise the price of oil by 10% last year in the face of world recession which had reduced the demand for oil. This June or July we can expect a 10-15% rise in the price of oil, for two reasons. Firstly, world demand will rise significantly with economic recovery. Secondly, contrary to expectations, most OPEC countries have been able to spend substantial amounts of their oil revenue. Hon. Members should be warned not to mistake the public posturing for real. Some OPEC governments are in the process of buying back oil concessions at the least price possible; hence they would not wish to encourage anticipation of further increase in the price of petroleum.

2. Prices of Food and Raw Materials

The second factor concerns the prices of food and raw materials. Hon. Members will remember how food prices contributed significantly to our inflation particularly in 1973-74. World grain stocks are generally low so that minor harvest variations can lead to big swings in food prices. Had the Soviet Union not reportedly slaughtered substantial numbers of cattle and poultry last year, thus reducing their grains import requirements significantly, our food prices would have gone up instead of going down.

As the world economy recovers, we can also expect raw material prices to rise. Members will note the extensive world debate about whether or not there will be shortages of food, basic materials and energy. On the basis of facts presented, it is difficult to tell who is right and who is wrong. However, we should bear in mind that vested interests are involved. Interestingly enough, since the energy crisis and the formation of other commodity cartels, the Club of Rome has back-tracked from its earlier pessimistic forecasts. In my view, however, the success of OPEC and the recent volatility of food and commodity prices, plus the inexorable march of world population, should be sufficient causes for alarm. Singaporeans should not expect the recent falls in the price of rice to be a permanent and continuing process. For the world as a whole, shortages of food, materials and energy will mean lower standards and higher costs of living unless counterbalanced by technological progress.

3. Technology

This brings me to my third point. I have been watching the economic recovery in the U.S, with great interest. So far, the recovery has been based upon replacements of inventory and some rise in consumption demands, but very little investment, The weekly magazine. The Economist, has noted that "the average age of industrial equipment in Europe at the end of this 1974-76 recession is older than it was at the end of the 1970-71 recession; while in America all capitalists have ambitious contingent investment programmes for the future". So The Economist concluded that the prospects are cheerful that the industrial countries may pull out of this recession with investment-led recovery. However, I would hesitate to leap to the same conclusion. Investments can be viewed as comprising three components:

(a) replacement investment of aged equipment

(b) investment to meet demands of increasing population and affluence for existing goods and services, and

(c) investment stimulated by new technology which result in new goods and services being demanded

Economists and governments usually act as though, with the right incentives via tax rebates and lower interest rates, new investments are easily forthcoming. The first two categories of investment that I mentioned earlier do indeed respond accordingly. However, the third type of investment depends on technological innovations about which economists know very little. Yet. I strongly suspect that, without such innovative investments, the industrial countries will suffer from dynamic under-employment as opposed to the static kind of Keynesian unemployment. In my view, technical innovations take place in two stages. The first occurs when some new idea strikes some obscure scientist in some humble laboratory. Years, perhaps decades or centuries later, such new ideas may be implemented commercially via the much vaunted Research and Development of corporations. A breakthrough like the steam engine, jet engines, the transistor and petrochemicals leads to the creation of whole new industries, resulting in much economic growth and new employment because even old industries benefit from the input demand and expenditure from rising incomes, The trouble is that we cannot guarantee sufficient innovations. Witness the meagre results of billions of dollars of expenditure of brilliant manpower and expensive equipment in cancer research. In the current world economic recovery, therefore, the advanced countries and the developing countries in consequence, may suffer from prolonged unemployment, if there is inadequate investment of the innovative type. If this should be the case, more inflation will result as Government frantically try to prevent unemployment by Keynesian pump-priming techniques of deficit financing and increases in money supply. Moreover. Governments, hard-pressed by unemployment, may try to export it via competitive devaluations of their currencies and via protective trade measures The recent turmoil in European money markets involving sterling and the French Franc is a symptom of what I am describing. Unfortunately, we can only watch with anguish to see if new investments are sufficiently forthcoming in the advanced countries. Members will note that virtually every report indicates the seriousness and persistence of unemployment in the industrial countries for several years to come, and I believe the Member for Telok Blangah made an earlier reference to the same point.

4. International Monetary Arrangements

My fourth point concerns international monetary arrangements. In November last year, the leaders of the six largest industrial nations met at the Rambouillet Summit to try and coordinate their economic policies. Among the agreements reached were presumably those measures adopted by the International Monetary Fund's committee on monetary reform in January this year at Jamaica. In particular, the major industrial countries agreed to contain gyrations in exchange rates of their currencies by mutual support operations. The official price of gold was abolished. In addition the IMF will sell off 1/6th of its gold to benefit poor developing countries and return another 1/6th to member-countries. The committee also agreed to boost IMF quotas by 33%, thus increasing their borrowing capacity accordingly.

I view all these measures as inflationary. Already, the floating of exchange rates has made governments feel freer in disposing of their foreign exchange reserves, since they are no longer committed to defend exchange rates within fixed margins. Moreover. countries feel freer to pursue their own monetary policies to meet domestic objectives without worrying too much about the balance of payments. The agreement to contain exchange rate fluctuations is also inflationary because it attacks the symptoms and not the causes of the disease. As long as divergent domestic imperatives of unemployment and inflation result in different rates of money supply increases and budget deficits, exchange rates cannot be stable. To compound difficulties, relatively free capital movements between countries will mean that inflation will be freely exported and re-exported. If, for example, a major industrial country were to increase its money supply unduly compared to others, this will cause capital to move out, and its currency value to depreciate. By the Rambouillet agreement, the other major industrial countries will step in to prevent too large a depreciation of the currency in question. This results in unintended increases in their money supplies as domestic currency must be used to buy up foreign exchange.

The abolition of the official price of gold increases the value of gold reserves by a factor of three as the market price is at least three times the official price of gold. This effectively increases world reserves by some US$80 billion.

Thus, from the analysis of the four factors of prices of petroleum, food and raw materials, technology and international monetary arrangements, we can conclude that while the world economy should do well this year, and perhaps the next, the longer term outlook is clouded with much uncertainty. Inflation is an abiding problem even though excess capacity of some 10-20% has been reported. Bottlenecks will occur as the excess capacity is not uniformly spread and the velocity of circulation of money will rise with increasing economic activity. Hence, unless the world has a good harvest this summer and OPEC exercises restraint, we can expect prices to be on the move again in the second half of the year.

What then can we conclude about Singapore's economic prospects? This year, and perhaps 1977, we should do reasonably well, perhaps briefly even touching double-digit growth rates again. However, unemployment could become a serious problem, if sufficient new investments are not forthcoming. We should not forget that we are in keen competition with other countries and with other regions. We face what may be described as a sandwich problem. In low technology areas, our existing industries can expect, tough competition as other developing nations learn the ropes of industry. In higher technology fields, we must attract firms from the advanced countries and upgrade our existing ones. Both are not easy to achieve. It would consequently be fatal for us to indulge in euphoria as we recover from the recession. Instead, we should re-examine our work habits and attitudes. Do we take sufficient pride in our work, or do we care only for quick profits and quick returns? Do we deserve the wage and salary increases that we have had over the past several years? Our young graduates from the schools, colleges and universities should orientate their attitudes correctly - they should display eagerness to learn and proper team spirit, take great pride in their work and expect to work hard for their promotions and wage increases. In times of general economic boom even mediocre managers and executives can be successful; in times of tough competition, only the ablest and the fittest survive.

Consequently, if our economy is to stand up to the rigours of international competition and if we are to weather future recessions successfully, our services and products must bear the hallmarks of quality and reliability and our people and leaders should demonstrate the capacity to bear sacrifices and to respond to changing conditions with minimum trauma. Our economy was hard hit in the last two years by the world recession, Let us make no mistake about that? The lesson should not be lost on us as we face the future.

We should re-double our efforts to sell our goods and services abroad. In this connection, the recent move to set up the export credit insurance guarantee scheme is a step in the right direction. The Minister for Finance also mentioned that, last year, we sent six major trade missions abroad while 30 foreign missions came to Singapore. I hope we can reverse the figures in future years!

Sir, may I now offer some comments about recent developments in ASEAN. The Prime Minister said rightly in Bali recently that "the basic question is how to ensure continuing stability by stimulating economic development to resolve social and political problems. Otherwise, increasing disaffection and discontent will fuel incipient insurgencies into full-scale revolutions". In the other four ASEAN countries, the key economic problem is not industrial but agricultural in nature. Yet, despite a resolution to stabilise commodity prices and to intensify cooperation in the production of basic necessities. particularly for food and energy, more attention seems to have been paid to industrial rather than agricultural development in the region. The urgent need is to improve the lot of the peasant if communist insurgency is to be contained. In order to attract more investments into the region, ASEAN as an organisation could jointly provide as well as seek investment guarantees for long-term foreign investment.

Finally, may I offer some comments on some non-economic policy issues in Singapore? I am particularly concerned about the use of sterilization as a means of getting children into choice schools and as a means of obtaining marriage licences for non-citizens. Fifteen priests recently voiced their objection to these moves in an open letter to the Prime Minister. While the wording of the letter is too strong, the moral issue is a genuine one. Government is rightly concerned about excessive population growth but it should not advocate immoral means to attain its good objectives. "Render to Caesar the things which are Caesar's, and to God the things which are God's" says the Bible. Priests should not govern but neither should government attempt to influence individual moral choices. Mr Speaker, Sir, unfortunately I was abroad during the debate on the Abortion Bill. I take this opportunity to register my strong objection on moral grounds. I believe the Member for Punggol is with me on these issues. With these reservations, I give my support to the Minister for Finance.

3.43 p.m.

Mr Yeo Choo Kok (Delta): (In Mandarin): Mr Speaker, Sir, the Minister for Finance in his Budget statement this year came to this conclusion, "the financial policy outlined in this year's Statement is a relatively unexciting one." Viewed from the context of this budget, this conclusion is correct. However, certain exciting financial measures announced earlier, such as increases in car registration fees and road tax, and the way they were announced were not to be found in the Annual Budget Statement. We have no reason to believe that such unusual measures and the way they were announced will not be repeated before the next Budget statement.

Mr Speaker, Sir, in his statement the Minister said that on 1st February, 1976 the total number of vacancies for Division I officers has dropped to 2,414. This is a large number of vacancies for Division I posts. According to his explanation, the reason is that the salary scales in the Government service cannot compete with the private sector for such personnel. The point is if these Division I civil servants have left their service merely because they want a higher pay, then I think it is better for such self-seeking officers to leave, This may be for the good of the Government and the public. However, if they leave the service not for monetary gains, but perhaps for the unfair allocation of duties or their superior officers have been too demanding on them, then the Government should do something to rectify the situation. Otherwise, such vacancies will never be filled satisfactorily.

In order to enhance our efficiency and to compete in the international market, we cannot just hope and expect the workers alone to work harder and be forbearing. At the same time, we should also hope and expect our Division I officers to be as hardworking and forbearing as our workers, If we are all imbued with the same sense of national consciousness and place national collective interests above our personal interests, then there should not be such frequent job-hopping from the Government service to the private sector, Therefore, I hope that in filling such vacancies vital factors such as personal integrity, character and dedication to service are taken into account. A capable civil servant without national consciousness is not a good civil servant.

Mr Speaker, Sir, the only tax increase is that on tobacco. This measure should be welcome by the public for the reason that it will discourage cigarette smoking and reduce hazards to health. However, as the Minister has pointed out, despite warnings on the hazards to health and the ban on advertisements on cigarette smoking, tobacco consumption is increasing and many young people are taking to cigarette smoking, much to the regret of the Finance Minister. I believe many parents have the same feeling as the Finance Minister. We are all aware that not a few young people take to cigarette smoking as soon as they are inducted into the National Service. Since the Minister feels that tobacco is "poisonous" and smoking is an "anti-social" act and besides it would "increase the risk of lung cancer and cancer of the nose". I hope he and his Cabinet colleagues will try to find out, on the one hand, why our National Servicemen are taking to the bad habit of cigarette smoking so soon after their induction. On the other hand. I hope he will seriously consider legislation to place an age limit on cigarette smoking. For example, just as we have place an age limit on eligibility to apply for a driving licence, or an age limit on persons who want to go into a bar, we can place an age limit on cigarette smoking. Mr Speaker, Sir, I believe that cancer is not confined to a particular age group. Therefore, I hope the Minister for Finance will try his best to persuade his Cabinet Colleagues to give up smoking early. In this way, they could keep themselves healthy; on the other hand they as elders could literally set a good example to the younger generation. "in speech as in practice".

3.50 p.m.

Mr J. F. Conceicao (Katong): Mr Speaker, Sir, I have listened, with growing depression, to the discourse of the Member for Whampoa upon our bleak future in economic terms. Correct as he may be in his forecast, the point still remains that since the end of the Pacific War, the last ten years -the years of our independence - have been by far the most comfortable and satisfying for the bulk of our citizens. True, there have been one or two anxieties. In 1968 strict labour legislation had to be enacted to enable us to face up to the anticipated British withdrawal. In 1969 we faced for a few days the threat of civil disturbance, and, as has been pointed out already in this House, the immediate future does not seem to be too good. But by and large 1965-75 has been a decade of impressive and assuring performance. The people - citizens and leaders - have worked hard to make for a swift and unprecedented growth. Our GNP nearly tripled in the last decade.

Singapore's skyline has been transformed out of all resemblance to the old water-front scene because of the shining new skyscrapers in the Central Business District and the high-rise apartment buildings the Government has constructed everywhere. The general standard of living of the people has obviously improved with greater than ever consumption of goods and services beyond the basic survival needs, and at a fair level of comfort. Money paid Out in wages, at least by employers paying the payroll tax, in the last financial year was about equal to that paid out during the whole of the first five years of our independence.

Despite such progress, and partly because of it, there somehow seems to me to be some fundamental quality or qualities lacking in the Singaporean. Basically this shortcoming consists of a lack of concern for others that amounts in some cases almost to an obsession with selfish interests. Too often, a Singaporean is disinclined to look beyond his own immediate circumstances to the realities of the larger world around him. He has also generally not been too successful in striking a proper balance between personal goals and group goals.

Now, what has been the cause of this unrelenting devotion to individualistic and (I am afraid) short-sighted goals? It was our own successful development, and the high expectations of the material quality of living it has engendered, that has perhaps resulted in this particular condition. It seems to me that our strategy of emphasis on certain values deemed necessary for development has resulted in a kind of over-kill, inadequately tempered as this strategy has been by non-materialistic considerations, like cultural interest, aesthetic appreciation, and consideration of religious and traditional values.

For what generally are the virtues, the qualities of our development-oriented persons that we have only too well succeeded in inculcating? They are chiefly (a) a powerful need for achievement. (b) the urge to act. (c) far-sightedness, in terms of opportunity for material advancement, (d) interest in career, not necessarily in a job -what may `be described as low job primacy, (e) high motivation towards material returns, (f) occupational mobility, and (g) indifference to religious or cultural matters. With this array, it is no wonder that we have had examples of young civil servants leaving, after a while, for greener and richer pastures. At another level, job-hopping was recently a noted phenomenon among our young people. And we have also, as a result of this development-orientation, a preoccupation with a task, with a job, with something to do and perform, and very little concern for the person, for the individual, for other graces. And indifference to religious and cultural matters has not made things any better in this respect. And for this reason I applaud what the Member for Whampoa said in the last few sentences of his speech.

Interestingly, a factor contributing to our inordinate sense of well-being and complacency is the kind of praise that we have constantly received from outside. Many of the views representing what others say about us all over the world are expressed by such references as dazzling growth: extraordinary techniques of statecraft; Singapore has broken inexorably with the past and leaped self-assuredly into the future with a roar that is resounding round the world; our life-style has no parallel in Southeast Asia. We stand high in the esteem of the most developed countries of the world. We are the political light of the region. Singapore is the most remarkable city on earth - and so on, with adulation far exceeding criticism. I wonder how these writers and journalists who have echoed such resounding praise of Singapore would treat us if we get into serious difficulty, especially as a result of the possible over-confidence that such adulation can engender.

At the same time our own newspapers are not backward in taking up this same cue of pandering to the ego and conceit of the Singaporean. Headlines have said that Singapore is the best base for oil supply; so many million dollars have been spent to do this, that and the other. Singapore is the top regional centre for such and such kind of trade. Singapore is the top tourist spot in Asia. Singapore is a centre for technical expertise. Singapore is the top maker of "jackups", whatever that may mean. Singapore will be the first Asian country possibly to greet the two millionth tourist in 1979. There is a Singapore way to a richer ASEAN. These headline impressions were gathered from about a fortnight's reading of two English language newspapers. Even our road taxes have become the talk of the world!

With this kind of ambience. Mr Speaker, Sir, how do you expect a young emerging community to react? I shall tell you. Mr Speaker. Sir. Recently I had occasion to review essays written by students from higher educational institutions in Singapore, who were competing for scholarships to attend summer schools abroad. Too frequently, when these students referred to Singapore, they reflected a sense of complacence and superiority from Singapore's success. It seemed to me they felt that with Singapore the way it was, the whole world was their oyster. Do you think, Sir, that such smugness can help in developing a sense of social responsibility?

There are many indications of inability or reluctance to subordinate personal interest to group interest. Look at the way industrial accidents have happened. From another angle, if you look at the conditions in which workers are frequently transported to their place of work, loaded in open lorries, you will feel here another indication of the lack of concern for people.

In various spheres of activity, further illustrations may be found. In national service there may be enough instances to show how the eagerness to look forward to the run-Out date (ROD) has resulted in a lowering of concern with continuing responsibility. On another point, I have heard of cases of national servicemen losing items of equipment issued to them and, instead of taking the responsibility for this loss, they expropriate the missing item from somebody else who is left to shoulder this responsibility if he is unable to steal from somebody else again. Inasmuch as it has been found difficult to retain administrative officers in the civil service, I would not be surprised if the same difficulty is faced in the SAF of recruitment into the officer-class and retention of officers.

Then there is skiving in the Special Constabulary: a reluctance to do the small national service stint because of the boredom of the activity. Again, here it is not the thought of service, the subordination of individual interest to the group need, but inconvenience to self that is the paramount concern in many instances.

In another way, complaints not too long ago about the poor standards of finish in the building industry are also a pointer, Take for example, all that has been said about the quality of finish in HDB flats. We meet with many instances, when we order a service or a good, of eagerness to get a job done and be finished and for the bill to be settled as soon as possible. One fairly persistent example of this is the way contractors do road surfacing work. Because of lack of supervision I am sure that in many instances such contractors are allowed to get away with sub-standard work.

On the roads, you see how self-centred the motorist is. Instances of aggressive driving and lack of road courtesy abound. Sometimes this egotism has become obsessive as when misunderstandings arising from motoring incidents have led to ugly scenes. Once a Mercedes-flaunting young executive or businessman was booked by a traffic policeman for a parking offence. The owner of the Mercedes disdainfully told the policeman that he could pay quite easily the traffic fine he expected would be imposed, and promised the Traffic policeman that he would come back to indulge his expensive parking habit again.

My reference to the Mercedes has put me in mind of top civil servants. In their case too, preoccupation with their special concerns has sometimes pushed aside more civil considerations, The Head of the Civil Service has mentioned that in a number of instances civil servants have contrived to get laws passed to enable them to do their work more easily. I would go further to say that, if necessary, the civil servant will now and then even ignore legislation in order to suit his own convenience. For example, a few years ago we had a publicised instance of the law relating to advanced accounts not being observed, and this was the subject of some newspaper comment and a reply from the Ministry of Finance. In this case, audit reports pointed out the fact of advanced accounts exceeding the authorised limits for the years 1965 to 1969/70, but no attempt was made to seek Parliament approval to raise the limit until 1971.

Since then we have continued to meet with similar instances of the law not being observed. Two recent examples come to my mind: one, in respect of the valuation of our investments in our financial statements, and another the failure to show certain civilian posts under Expenditure on Manpower (as required by law), instead of under Other Operating Expenditure, of the Ministry of Defence Head of Expenditure.

Changes to make the law more applicable were not instituted until these irregularities were reported to Parliament. In this connection. I am not saying that we should retain outdated regulations, but if what has been laid down by Parliament is considered not to be applicable under changed circumstances, then action should be taken to change regulations promptly; and not just ignore these regulations (in some cases for several years), thus setting an example of placing expediency before correct behaviour. If such actions reflect indifferent regard for the authority of this House, can we expect the public to receive more consideration?

Underlying all this, we have the background of our very recent forbears being migrants who were primarily interested in getting what they could out of Singapore. This is well-accepted and has been referred to more than once even by our political leaders. Now we have to assess to what extent this attitude has percolated down to the younger generation. If our schooling has been successful, then our young people would have different attitudes. But in the very respect of a sense of values directed towards more gracious relations between people, our education has not been so successful. Our education has been successful in emphasising the very developmental traits that I have referred to earlier.

Moreover, we must not take for granted that what is learnt in school receives reinforcement at home. In fact, values inculcated in school may be in direct conflict with values at home. One exercise we should try to embark on is to reach Out to the homes to try and engender social support for the values learnt in school. I am sure there will be several Members dwelling and expanding on this point and similar ideas when we come to the debate on Education.

The importance of moulding the right attitudes in our young people cannot be overemphasised, considering the wide ramifications of the result of our educational efforts. Let us consider. A young man who is about to cast his vote may well have had all his years of education and further education under our Government's jurisdiction. In a few years' time he will marry and begin to have a family. How will he bring up that family, that second generation of our Singaporeans? Presently our young people are not against the Government; they are not anti-national, they are not even anti-PAP. Despite a few who try to avoid national service more for reasons of wanting to avoid personal discomfort, generally the acceptance of national service shows that the people are not against, indeed they recognise the need for, measures taken in the national interest.

But what is important to note is this. I do not think our young people are all fully committed to exactly the same values as the Establishment. This may be simply because many of them are not certain of what it is that is desirable in terms of the kind of Singapore they want. What one can be certain about is that they want to feel that they are participants, not merely people being directed and told what to do, They do not want to be part of a system where they are the ruled and others the rulers. They want to have a say. That is why the People's Association appears to face difficulties because it is organising for young people. Perhaps the young people want to find themselves in a position where they can organise things for themselves!

The more thoughtful and socially motivated want to participate in activities aimed at community improvement. It is in this way that we could help arrange opportunities for young people to understand worthwhile, genuine and practical relationships with one another, not the vague, phony rapport and freedom proclaimed in the advertisements directed at the new generation. We should help our young people find a useful role for themselves, but they want to identify this role themselves. Certainly we should not tolerate laziness and skiving, complacence and truculence. But we should not treat our young citizens in the same way as, in the past, the Ministry of Education has treated our teachers, many of whom have not yet got over the trauma of exposure to over-bearing officialdom.

Our younger citizens have generally not known the hardships their elders have experienced in their lifetime. These same older folk (perhaps understandably) in the flush of good times want to push out of their minds the trouble they have faced before.

Among our younger citizens, those who are reaching their majority years will remember best these last ten years of good going, of more and more consumer goods coming within their means of enjoyment: clothes, entertainment, TV (including colour), perhaps cars, leisure outings. They have been assured of places in primary schools and enjoyed opportunity to proceed for further and higher education. In many instances their parents have bought flats built by Government; these same parents perhaps with the disapproval of the Member for Telok Blangah have spent sizable sums and considerable effort to redecorate and furnish these houses.

Serious political and national crises, conflict and wars are quite foreign to the experience of our younger citizens. In the West, in socialist countries, young people are in some way constantly reminded of how their countries have faced serious situations. For example, we ourselves have seen such films on TV as Cities at War, World at War, even comedy programmes such as Dad's Army. Our young people view these detachedly. To a Western youth, they would be subtle insights to a more turbulent past his parents' generation experienced. Other things such as memorials, monuments, ceremonies, and so on are other forms of reminders of grimmer times. Our own youths have remained in more blissful condition.

The education and social upbringing of our young people have not conduced to encouraging them to see their world as a larger place than their housing estate and transcending parochial Singapore circumstances. In this they have not been better than their elders. Schools have stressed examinations (at this level, this is the test of meritocracy). I have had some thoughtful young people in my constituency, as I am sure other MPs have in theirs, complaining that newspapers and mass media and Government attention have not focussed the notice of youth on concerns beyond the circle of light which they see from inside their wells. I think we should consider carefully before blaming a member of our younger generation for his limited perspectives, even if such perspectives tend to make him also an egotistic individual. Especially when we think of the sins of the fathers being visited upon their children.

Now, what can we do about such a circumstance that has arisen? Our Government has always worked on the basis of attending to first things first. That is why there has been so much emphasis throughout all these years on economic and material development. That is why in respect of our education policy there has been a stress on the preparation for work, development of skills and so on. While we certainly cannot let up on our development thrust, we should make adjustment for development of values important for society, for harmonious living, for development of rounded and mature citizens.

Therefore, I think the time has now come for us to think of a policy which will lay stress on the inculcation of healthy values which balance self against the needs of the community, not only in our pupils in school but also more broadly the message has to be carried across to the adult citizens at home. I do not mean by policy that we should determine what kind of people we want to produce in specific terms: we cannot make people in the splitting image of some preconceived mould; we cannot make people in our own image and likeness; but we want to encourage and promote actively the development of a healthy pattern of values. This aspect we have before left to develop incidentally. Now we have to attend to this matter in a more deliberate fashion. I think the time is ripe, I think the problem is urgent.

In all this, the two Ministries that appear to have the most important role to play would be the Ministry of Culture and the Ministry of Education. I would not like to preempt on what may be said when the debate on education and culture gets under way, but I am sure there will be plenty said and I would have one or two things to say myself.

Mr Speaker, Sir, in moments of melancholy, in respect of these thoughts I have expressed. I may feel that indeed a grave situation has arisen. But I am never in doubt that the Government, with the help of its Backbenchers, will take successful action to correct the situation - with the help of the Backbenchers.

4.13 p.m.

Mr Ng Kah Ting: Mr Speaker. Sir, whilst I rise to speak in support of the motion moved by the Hon. Minister for Finance, I would like to make reference to the policy on taxation with regard to income tax and other matters.

It is noted that the revenue from Income Tax is forecast to rise by 9.1% to $1,200 million, an increase of $100 million. This is contained in Table II, page 3, of the Memorandum on the Main and Development Estimates of Singapore (Paper Misc. 4 of 1976). In reply to my question on the 1st of this month, the Finance Minister asked me to listen to his Budget statement and to bring up this matter during the debate on his statement. And the matter that I brought up was the question of income tax reliefs.

When he said this, Sir, I envisaged that either there was some hope to my question when he indicated to this House that he would give a full reply, or it may not be. Whatever it may be, Sir, I would still try my best to make a case for his careful consideration.

Being optimistic that our Finance Minister is not unsympathetic. I believe that this appeal of mine affects both thousands of middle income group workers as well as revenue to the State's coffers. To the former, present-day cost of living has shot up beyond all proportions, even though the Government is able to contain inflation to a low rate. Even though this inflationary rate has slowed down, prices of most commodities, however, have not rolled back. But what the Finance Minister may not be aware of is the decline in the purchasing power of our dollar. The many thousands of workers have to pay more for their refreshments and meals; the thousands of housewives have to pay more for their marketing. Worst of all, compulsory CPF contribution of up to 15% takes up a good chunk of the workers' wage increases in the last few years. Perhaps I have to qualify my statement. I am not against CPF contribution. In fact, I am all for it because this is a good policy as it enables contributors to the CPF to make use of whatever funds they have in the CPF to buy HDB flats, and now HUDC flats. Sir, I know Members are aware of the hard times ahead as stressed by the Finance Minister, and I would like to believe that whilst workers have been exhorted to work harder and expect little increase, on the other hand Government can help to relieve them of having to tighten their belts too much by raising the tax reliefs on personal and earned income which at the moment are $2,000 and $1,000 only. Members will recall that the Finance Minister introduced an amendment to the Income Tax Act in November last year (Bill No 52/75). This Bill passed by Parliament gave those who are 55 or 60 years of age bigger personal tax reliefs ranging from $2,000 to $3,000 respectively. I do not `dispute that these people should benefit from it, but I certainly believe that with such difficult times ahead, (in this manner, the Members for Telok Blangah and Whampoa probably share my view) the Finance Minister could easily accommodate the younger taxpayers. On the presumption that $1,000 as tax relief is granted to say. 25.000 taxpayers in the middle income group bracket, this may cost a shortfall of $25 million in revenue; but Hon. Members will not disagree when I say that it will bring true relief to the many thousands of the middle income workers and their families.

I envisage that the Finance Minister in reply would most probably say that we are most generous in the granting of tax reliefs, for example, those who maintain their aged parents are entitled to a relief of $750 for each parent living with them; another $300 for maintaining a garden properly. Allow me to point out that more than half of the population of our country are now living in HDB flats and that the question of relief for the maintenance of gardens is out. Vet HDB flat dwellers have to pay conservancy charges which go towards maintenance of open spaces in HDB estates.

All in all, I believe that the Government can play a greater role through granting bigger tax reliefs to the wage earners, especially in these hard times. Ten years ago, when not many people lived in HDB flats, a worker earning $300 per month could easily maintain a family of three children, as rental was cheap and cost of living pretty low. Today if a worker earns the same amount, he has to contribute to the CPF and to maintain his family. This sum has to go towards paying for his flat at monthly instalments or rental, PUB bills, daily needs, children's education, transport, etc. Therefore. Members can easily conclude that this is inadequate. This is the reason why I am making this impassioned plea to the Finance Minister to consider the matter. Hon. Members would be interested to note an article in the Straits Times of 5th March, 1976 headlined "Only one in 8 earning $600 or more" wherein it states that:

`Nearly 75% of the 873.000 workers employed in Singapore last year earned less than $400 per month according to a Government survey on the labour force'

It is not a question of narrowing the gap between the haves and have-nots; I am not referring to it but this is a matter of paramount importance vital to our survival viewed from a point where inflation in the last few years has eroded consistently the purchasing power of our dollar. I welcome the Government's exhortations to the people reminding them of the need to be thrifty and to work harder and not to expect a bonanza in return; but may I ask the Finance Minister, is it not a fact that charity begins at home?

On the assumption that should such tax reliefs be given, there would be a fall in revenue collection as pointed out earlier; may I hasten to suggest to the Finance Minister that he can levy through indirect taxation on those luxury items which are not basic to everyday needs to recover revenue lost through such tax concessions. I believe that such measures would bring little ill-effect on the people. In making this suggestion, permit me, Sir, to reiterate that I have no wish to tell the Hon. Minister what he should do as fiscal matters are his prerogatives and problems. I merely wish to request him to consider not my plea but the general feeling of many people about this matter. Although the Budget Statement has been well-received and it has been termed as "No Shocks Budget" by some quarters, may I say that the shocks had already been made through several tax measures announced at the end of last year and the very beginning of this year. Naturally that is the reception - no shocks. But the shocks were made before and after the Budget Statement. And probably as the Member for Kim Seng envisaged, maybe in the middle of this financial year.

On the matter of CPF contributions that I wish to touch on, Sir, is the question which has been asked by some quarters, and that is at the moment a ceiling of $4,000 is allowed to a taxpayer for relief. I am sure the Minister is aware of the fact that NWC increase as well as CPF contributions have been increased too in the last few years. I would like to suggest that there should be no ceiling on tax exemption for CPF contributions, otherwise it would mean paying tax on the CPF contributions in excess of $4,000. In this respect, life insurance premiums should also be taken into consideration as these policies are meant to benefit the beneficiaries of the holder of a life insurance policy.

On the matter of Customs & Excise duties, I believe that the base of income tax should be extended and spread more evenly and as widely as possible. In this respect it would be pertinent to point out, as shown in the Table on comparison of revised estimates FY 75 and estimates FV 76 in the Memorandum, the two largest increases by way of percentage are items 7 and 8 (Road Tax and Motor Vehicles -- Ad Valorem Registration Fees at $20.4 million and $9 million or 23.3% and 22.0% respectively) as against an overall increase of 8.2% under Class I -`Transfer Receipts.

In the case of AVRF, I do not see excise duty for locally assembled cars. I am disappointed to see this because the impression I gather from the imposition of surcharge and increase in road tax for private vehicles were meant to discourage car ownership - despite this, the forecast of revenue for road tax would increase from $87.6 million in FY 75 to $108 million in FY 76. Why is this so?

Hon. Members are well aware that Singapore is importing more motor vehicles from Japan, followed by Europe, where prices seem to be much lower than our locally assembled cars. The latter is enjoying no excise duty which I brought up in a previous debate when import duty/AVRF were increased. I strongly urge the Finance Minister to look into this matter.

The next point I would like to touch on is the Telecommunications Authority of Singapore. There is a forecast drop of 1 .4% out of 8.2% revenue (Class I - Revenue) to be derived from TAS and telephone bills; in this case TAS is seen as being unable to cope with the demand for telephone facilities. This is not a rash statement. I know of many applicants who are on the waiting list. Perhaps, it would be in order to ask why there are long delays.

To my mind therefore, there appears to be some wrong forecast in the number of lines needed in various housing estates both in the public and private sectors. I suggest that this problem be looked into because I cannot agree with the forecast of a decrease. In fact, there should be an increase instead. As I have pointed out just now, by way of illustration, this TAS card states:

"We acknowledge receipt of your application dated 4th August, 1975, the contents of which are receiving attention of the Sales Department

More than six months have elapsed. I am glad that both the Hon. Minister for National Development and Communications and his Senior Minister of State are present. I would like this problem to be looked into, Sir.

In conclusion. Sir, may I suggest a table to be known as "changes in cost". I would like the Finance Minister to consider having such a table. The Government has enunciated the principle that, as far as possible, users of public services be made to pay for such services without being subsidised by general taxation. So we have seen increases in the hospital fees, school fees. HDB conservancy charges, refuse, etc. However, the timing of these increases appears to be erratic so much so that the public are caught unawares and they are consequently unable to make tidy adjustments or even psychological adjustments. Moreover, Government has to explain anew every time increases are made.

Could not a more orderly procedure and time-table be adopted so that people know that at a certain time each year, certain fees or charges will be revised according to certain standards, like changes in the index of cost? Moreover, in order to reduce public resentment. I suggest that Government ought to consider appointing suitable representative panels of competent people to review the proposed increases so as to ensure that the public are not unduly taxed and that every means is taken to increase governmental efficiency.

4.35 p.m.

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

The Hon. Finance Minister has struck a sombre note in his Budget Statement laid before this House on 1st March 1976. Recent political events and trends in and around our region, coupled with world-wide economic problems and difficulties, are beginning to make even more difficult our national efforts to promote and advance the welfare and well-being of every Singaporean. There can already be discerned warning signs of political and economic storms ahead of us. We can either wither in the face of the storms or survive, depending on how much political will, courage and national cohesion we can harness from amongst the 2.2 million Singaporeans. But first we have to shake off the euphoria that has lulled the senses of the Singaporeans because of the past few years of relative affluence and prosperity.

During the past few years, not a single day has passed without our hearing or reading the newspaper columns about complaints and grumblings about the bus service, increases in road taxes, inadequate personal reliefs in income tax, and a host of other grievances. Grumbling by Singaporeans over personal inconveniences and discomforts has grown from a national past-time to a national obsession. I' am not saying that some of these complaints are not valid. I am not saying that the Government, in what it conceives as national interests over the years, has not been obliged to adopt unpleasant policies and measures which give rise to individual and sectional complaints from the public. What I am wondering is whether our obsession with criticising the internal policies and actions of Government over a period of years has not numbed us to the sense of the dangers that lie before us as a nation of both the political and economic fronts. Singaporeans may find some difficulty in relating their personal problems and frustrations to the more serious regional and global political and economic events that inevitably will have more far reaching implications for us, and in making the necessary adjustment to accept sacrifices for the long-term interests of our country and ourselves and our fellow citizens.

We have in the past risen to the occasion and have met far more difficult challenges previously as a community and as a nation. The older generations of Singaporeans know what hardship means because they had personally experienced hardships in their lifetime.

But today, we have a younger generation of Singaporeans, who have grown up during a period of comparatively good times and have become accustomed to a pampered life without knowing what is real hardship. The comparatively easy life that they have led up to now has insulated them from the harsh realities of life.

Mr Speaker, Sir,I, therefore submit, the challenge that is really before the Government in the course of the next decade when we must, as a nation, sail through many violent political and economic storms, is whether the Government will be able to mobilise its forces and make use of all available avenues like the schools and other educational institutions, the community centres, the media of radio and television, to inculcate in the population, particularly the younger generation of Singaporeans, the sense of political and economic realism and quick reflexes in response to any political and economic changes. This challenge. Mr Speaker, Sir, is as crucial to the long-term well-being of Singaporeans as the need to intensify our national efforts to create more and better jobs through economic growth and development.

Mr Speaker: Order. I propose to take the suspension now and will take the Chair again at 5.10 p.m.

Sitting accordingly suspended at 4.39 p.m. until 5.10 p.m. Sitting resumed at 5. 10 p.m.

[Mr Speaker in the Chair]

Debate resumed.

Mr L. P. Rodrigo (Serangoon Gardens): Mr Speaker. Sir, I rise in support of the motion standing in the name of the Minister for Finance.

I would like at the outset to join fellow Members in the view that, relative to the economic adversities experienced by similarly exposed economies as the result of the global recession in 1975, our economy has performed satisfactorily at 4.1% growth. Our economy has thus demonstrated a resilience acquired by the diversification of activities, particularly in the service sectors.

This performance we expect would generate some more confidence in the economy and with it, greater economic enterprise to meet the needs of a more relaxed world, we hope, in the near future.

We are today 156 years old as a community of peoples who converged on to this island for a living, 16 years old as a people under the management of this Government, and 10 years old as a sovereign nation responsible for its own successes or failures. We have reason to be satisfied with what has been collectively achieved in 16 years. Central planning based on national priorities, a dependable administration and regulated private enterprise have been key factors in the economic strategy for survival and success. But the principal force which bolsters this strategy is our manpower. If our manpower can continually increase its economicability in both the public and private sectors, our industrialisation will take off and the resulting economic momentum can be sustained. There is already generated in the manufacturing and service industries sufficient potential for the final lift but, markets aside, the primary back-up factor is our manpower.

Our manpower must be able to cope with the requirements of the manufacturing and service industries at all levels of technology. This calls for long-range manpower planning to mesh with the economic directions into the years ahead. Of course there are areas in which it might not be prudent to make forecasts as changes in science and technology in the world are taking place with astonishing rapidity. But adequate manpower planning there must be. This is possible because the variables involved in manpower planning are relatively uniform and manageable.

It is therefore correct that Government should be spending $41 million on industrial training through the Industrial Training Board and Economic Development Board to enhance the economicability of our manpower. However, certain questions may be asked in regard to the effectiveness of ITB as it is presently organised and managed. What is the rate of drop-out in the course of training? What is the rate of trainees who, having completed training, do not seek employment in the industries? And what are the reasons for this situation aside of the explanation that wages in industry are not attractive? I do not expect the Minister to supply me with the answers in his reply. But neither have I asked these questions merely to be rhetorical. By these questions. I wish to make the point that these moneys which are to be spent by ITB and EDB for financial year 1976 should produce the expected results.

This leads to that aspect of the problem of manpower which disturbs all of us - the reluctance of our young workers to accept employment these days in the industries. That they will, in the course of time, do so, is anticipated. But at this point of our economic growth we cannot afford to risk the competitive edge of our economy being blunted either by youthful labour copping out of employment for diverse reasons or for the reason that industry has failed to meet their wage expectations. With immigrant labour standing at 100.000 up, parents who are supporting their unemployed adolescent or adult sons who choose to be unemployed had better rearrange the domestic expectations of these young men so that they are persuaded into gainful labour for their own benefit and for the lasting economic good of the country.

Ours is a youthful, vibrant generation of workers. Those between 1 5-34 years above constitute an extremely high percentage of the economically active persons in society numbering 873.000, If this manpower, our young workers, can reconcile their estimation of their own worth with the wage capacity of our industries under the guidance of the National Wages Council, and offer good labour for wages, our economy will continue to demonstrate its resilience, and collectively we, as a people, will benefit.

Having said a few words on the question of our manpower, I wish to refer to another problem which is basic. I will refer to a specific development in the field of transport and education and, thereafter, I will allude to the shortcoming in the Administration. There emerged in Parliament in 1974 a hefty debate on traffic congestion in the city area and the bus transport system. Following this debate a number of measures preventive and penalising in nature were taken in quick succession. They caused much pain because these measures offered the choice of sudden inconvenience or payment. Motorists cringed and paid. The record, that is, the Hansard, shows that the Backbenchers had already vigorously posed the problem of traffic congestion and the need for a sound bus transport system as far back as December 1968. Between 1968 and the end of 1975 no jolting measures beyond widening roads were undertaken to cope with the problem. On the contrary, high-rise development concentrated in the city. Mass transit commuters grew in numbers. Then, in a flash as it were, realisation struck.

In the field of education, critics in the Back-bench abound. Again since 1 968 there were repeated pleas for coherent long-range planning in education. There was sufficient articulation to show that the system was not working. An effort in replanning would have involved a reconsideration of the economic, social and cultural premises upon which the system was based. This could have thrown up areas of indiscretion, over-zealousness, irrelevance, administration myopia or plain blind-alleys in education. Instead only the system was structured and restructured. The compartments and corridors were redesigned when what was required was a survey of the building's entire layout and location in relation to the mainstream of the country's educational future. Then again in an' instant, so to speak, there was discovered grave defects in education and there was felt the need to remedy these defects in a hurry. These developments I have described in traffic congestion and education stress the point that there was lacking the effort to monitor the effects of policies after implementation and the coordination of the effects of policies implemented by Ministers. I put the view that if there had been any such effort, obviously it had not succeeded, But on the other hand, if it had, urgency of traffic congestion in the city area and the slide into illiteracy in education would have been apparent in the early stages and the situation remedied in good time without having to resort to a succession of remedial measures which are causing confusion and eco-spasms in some families as parents attempt to understand the meaning of education policies and as they budget to retain the small family car.

Government is known to execute its plans for the prosperity and security of the country in accordance with the order of priorities it determines from time to time. Foremost in the list of national priorities would be matters pertaining to the economy of the country and security. But there are societal needs which may not qualify for priority rating on the basis of national urgency but which are nevertheless important social requisites in the development of society. These are disregarded today to the poverty of our children in human values tomorrow, If the direction, along which our society is urged, is towards opportunities for the acquisition of sufficient needs, social security and the intangibles which make the good society, then these needs must be met so that our people will be able to give their lives and souls meaning and contentment. Suitable community centres are places which provide opportunities for interaction among people. So far down the scale of priorities are community centres that Government expects people to help pay for the establishment of even one key community centre in each constituency. There are needed suitable TV programmes for the masses, programmes which are constructive in the art of living in congestion and constriction, a feature of the times we live in. And other requisities which I shall deal with in the debate on the Estimates.

I wish to make the comment that there may be developing a tendency of the Government to ignore the need to be rational in its explanation of actions which tax or restrict the public. The case of the 10-year old car is notorious. The argument that is offered to the public is that if the owner can meet the tax, then the car is fit to be driven. So the conclusion drawn is that our roads are fit only for those who can pay to drive their old cars or who can afford to buy new cars. Such actions of the Government do not assist in strengthening in our society the realisation that we can survive and prosper only when the people and the Government act in concert in the interest of the common good. These are times when the people must clearly understand the whys and wherefores of Government actions affecting their lives because we are moving into an increasingly regulated life-style, and must do so if every one is to have his modicum of the good things. People still cherish the style of the recent past- the pre-recession, pre-inflation period and will find some difficulty in adjusting to the economy of living which has been made necessary for us by issues which are global in origin and effect and beyond our control. But I say, Sir, as much as the people should not take the Government for granted, the Government cannot afford to take the people for granted.

5.25 p.m.

Mr Hwang Soo Jin: Mr Speaker, Sir, the Minister for Finance has described his Budget Statement to the House as "a relatively unexciting" one, This may be so if you are not a smoker or you have not been expecting either shocks or surprises.

However, to the large majority of wage earners, the announcement first of all by the Secretary-General of the NTUC and now the Minister of the need for an adjustment in our wage policy must certainly cause a certain amount of unhappiness. For a number of years now our workers have come to expect a substantial annual adjustment in wages. Such expectation in the past was not unjustifiable. considering the fierce rate of inflation prevailing and the satisfactory rate of growth in our economy. As things stand today, we are suddenly awakened to the fact that unless something is done and done quickly to relate wage increases rather more closely to the rate of productivity, particularly in the manufacturing sector, we shall soon lose our competitiveness in the export market. The gravity, of the situation has been very eloquently put forward both by the Minister for Finance, the Minister for Labour and the Secretary-General of the NTUC. I have no doubt that the message will have been driven home loud and clear to all unions and their members affiliated to the NTUC. With a responsible and enlightened union leadership such as we fortunately have in Singapore today, I feel sure that the position will be accepted by all workers even though some may take it somewhat grudgingly.

In urging our workers to tighten their belts, it is in my view imperative that the Government should take every step to ensure that the purchasing power of our workers will not be eroded by unjustifiable price increases in goods as well as services of an essential nature in the forthcoming months. Whilst the Government has done reasonably well in bringing inflation under control, the various measures taken by the Government to stimulate the economy in the months ahead may yet spark off another round of inflation, if we do not watch out. For a start I would urge the Government to keep a closer watch on all Government and statutory charges. The Budget this year, as in the previous year, may be considered to be relatively painless, but experience has taught us that this state of painlessness may not last too long before we are treated to a whole series of shocks by way of higher taxes and charges. The combined sum total of such revised taxes and charges, taking into account both the direct and indirect effect, quite often far exceeds the wage increment of an average worker in any one particular year. Such frequent increases have also contributed in no small measure to pushing up the costs of our manufacturing products and to that extent reducing our competitive edge in the export market.

In emphasising the importance of improving the quality of our workers, the Minister has said that this must be matched by better entrepreneurs and managers and that thorough continued modernisation and innovation, management must improve production and administration, financial control, personnel management and marketing methods. Sir, I cannot agree with him more, but to his observation I would add that to maintain our competitive position the Government should also strive to achieve greater productivity rate in the civil service through constant improvement in the standard of administration and the quality of service. It may be wishful thinking on my part but I do sincerely hope that we can look forward to the days when increased Government revenue will be achieved not so much by the jacking up of rates and charges but rather as a result of greater efficiency in Government administration and that Government expenditure of a recurring nature may be kept constant, if not reduced, by minimising unnecessary wastage either in terms of materials or manpower.

In this connection, I am therefore pleased to note that frank admission of the Minister that a recent analysis by his Ministry revealed that both the Government and statutory boards had been too lavish in their use of professionals and technically trained men (Sir, these are the exact words of the Minister). He has promised to reverse the position. To the private sector, this is indeed welcome news as the competing demand from Government for such categories of persons over the last few years has not only reduced the supply but also contributed to the rising costs of such personnel to the private sector. Consequently, it has considerably slowed down the management's efforts to carry out any measures aiming at modernisation or innovation. Sir, in the latter part of the Minister's speech he refers to a total number of 2,414 vacancies in Division I of the civil service when he speaks of more effective use of budgetary allocations. In view of the Minister's announced intention to be less lavish in the area of manpower, I am wondering to what extent recruitment of Division I officers will now be affected. As I see it, whilst it is, essential to ensure adequate numbers of officers in all levels of the civil service, numbers alone will not in itself bring about better efficiency. The inculcation of correct attitudes, sufficient exposure to the practical realities of life, coupled with proper training programme, organisation and methods that are constantly reviewed and kept up-to-date with changes, should be the correct emphasis in ensuring effectiveness in the Administration's use of budgetary allocations.

In this connection, it is perhaps relevant to draw the attention of the House to the fact that year after year there has been substantial shortfalls in actual development expenditure as against provisions voted by this House. The comparative figures for the last three years will be of interest to Members (See footnote). This only serves to demonstrate that the Administration's ability to use budgetary allocations approved by Parliament is perhaps not as effective as what we would like it to be. Bearing in mind that Government spending is increasingly being resorted to as a fiscal measure to stimulate the national economy or to counter-inflation, there appears to me to be an urgent need for the Government to ensure that the administrative machinery is adequately geared to respond quickly to the demand of changing economic circumstances at all times so that money voted by this House may be efficiently used and controlled in order to achieve the direct as well as the indirect objectives of Government without undue delays.

In studying the Economic Survey Report, I cannot help but feel that our economy, up or down, has over the last few years become more and more dependent on the public sector; activities of Government departments, statutory boards and Government-owned enterprises, such as SIA and NOL, have provided the main thrusts and stimuli to our economic growth, with the private sector playing a decreasing role. This development although inevitable to some extent is to my mind not entirely healthy and may in time lead to loss of entrepreneurial enterprise and skills in the private sector.

Many enterprises have been embarked upon by Government, initially with the primary objective of providing the necessary lead and encouragement to the private sector but as time goes on the original objective is lost sight of and what is left of the motivation is no more than just profit-making, at times at the expense of and in conflict with private sector development. Perhaps, if we are not already doing so, we ought to periodically review thoroughly the activities of all Government-owned enterprises not just to assess their viability or profitability but also to ascertain to what extent the primary objectives set for them have been fulfilled and whether their activities have not resulted, and will not result, in disincentives to the private sector to either enter o expand in the same directions. An example of the primary objectives not being pursued by a Government-owned company is to be found in the operation of the Singapore Pools

Estimated Expenditure Actual Under-Voted by Expenditure Difference utilisation Parliament Million$ Million$ Million$ 1972/73 $ 784 $ 665 $119 15% 1973/74 $1,326 $1,107 $219 17% 1974/75 $1,562 $1,132 $430 28% (Private) Ltd. The original intention in setting up that company was that the money made therefrom was to go towards the construction of the National Stadium and to promote sports in Singapore. But from what I have been able to find out although Singapore Pools has several million dollars of surpluses lying idle in their bank accounts, it has to-date only given a sum of approximately $800,000 to the Singapore Sports Council whereas the Council still carries on its books a repayable loan of $3.15 million. Sir, there are other examples but I think one is sufficient to illustrate the point that I am trying to make.

In conclusion, Sir, I would like to join my colleagues in congratulating the Minister for Finance for taking us through a truly difficult year and of a sensible and down-to-earth budget which, if properly implemented, should go a long way towards consolidating our position economically.

5.39 p.m.

Mr P. Govindaswamy (Anson): Mr Speaker, Sir, despite the increasing cost of services and materials, the Minister for Finance was able to present a "soft budget" with a tax increase only for cigarettes. For this, everyone in Singapore must rejoice and congratulate him.

We have again a "soft budget" that will not affect a great part of our population. We have gone through a rough period caused by inflation and many parts of the world have suffered from inflation too, But we in Singapore, through the able leadership of the Minister for Finance, and above all an excellent and able Government, have conquered inflation and have been able to control the cost of living to such an extent that we have this present "soft budget". We have had a very low growth rate. Although there were promises made about an upturn in the economies of many of the industrial countries towards the latter part of 1975, this growth did not really take place. Fortunately for Singapore we are seeing a certain growth rate taking place, but very slowly.

The introduction of a number of tax concessions in the Budget Statement is an excellent move. It is a move that will no doubt benefit the commercial sector directly. But indirectly it will benefit Singapore more, for we look forward to a healthy commercial sector in Singapore to produce a healthy and strong Singapore financially. It is my hope that more concessions of a similar nature could be introduced so that we will be able to earn more foreign exchange, more interest from the industrial countries, and after all this will benefit our country in return.

However, there are several matters which I wish to draw the attention of the House. It was announced that the increases in road tax for motor cars was not to get more revenue but to reduce the number of cars on the road, especially old cars that often break down on the road. I wish to point out that the condition of a car does not necessarily depend on its age. It depends on how much it has been used and how well it has been maintained. To say that all cars over 10 years old are not road-worthy and therefore should be discouraged from running on the road is to presume that only old cars break down on the road. In fact, new cars of all makes, including the luxurious Mercedes Benz, are often seen stalled along the road-side, with their bonnets lifted up.

If the intention is to reduce the number of cars on the road, then the Registrar of Vehicles should be instructed to assess each owner's need for the car before allowing it to be registered. This is not a new idea. It was done in many countries, including Singapore, just after the Second World War when the demand for cars exceeded the supply and priorities had to be laid down. Alternatively, if the intention is to enhance road safety by ensuring that all cars on the road are roadworthy, then the Registrar of Vehicles should be instructed to have all cars above 10 years old to be inspected annually. Imposing a surcharge does not make the car any safer. In fact, it makes the car less safe because owners will have less money to spend on maintenance. The irony is that old drivers are certified fit by a medical examination and not by paying a surcharge on their driving licences, but old cars can be accepted as road-worthy not by an inspection but by paying a surcharge. I hope that this anomaly could be corrected, so that some people who cannot afford the luxury of new cars but nevertheless need cars for earning a livelihood may retain their old cars.

Besides, not every car owner need to drive his car into town. There are many people living in the rural districts who do not drive their cars into town more than once a week. Removing their cars do not help very much in reducing the number of cars going into the Central Business District. Besides, forcing the removal of old cars from the road by a surcharge hits not only the car owners but also other people indirectly, i.e, those in the motor-repair shops, the spare parts shops, the tyre shops, the battery shops, the secondhand car dealers, the spray-painters, the upholstery makers and all those connected with the maintenance of motor cars.

Sir, the second point I wish to stress is the ugly tendency found in various departments in Singapore. We seem to be introducing taxes or bills in various forms; in small, small quantities. But let me quote one maxim. Little drops of water make a mighty ocean. The taxpayer feels the pinch, bit by bit, and his earnings seem to be slowly dwindling. He sees his savings and his earning power dwindling as the years go by. Steps must be taken to see that this does not continue.

The third point I wish to comment on is the education system. For many years our education policy has been changing, and changing so rapidly and so drastically that the school principals are frustrated, the teachers are confused, and the students confounded, I am not saying that running the Ministry of Education is an easy job. On the contrary, I have the highest respect for the Minister for Education and all his predecessors for they have been subjected to pressures such as population increase, economic survival, social advancement, and even parental interference, So the schools were run not to provide an education for our children and to prepare them for a meaningful and rich life, but to provide them with sophisticated technical training in order to enable them to excel in the modern rat race. The result is that those who succeed in this mad scramble, which starts from the primary schools, become human robots while those who do not make the grade become social misfits.

Mr Speaker, Sir, I sympathize with the Minister for Education and all his predecessors, but I believe that unless we can provide our young children in primary and secondary schools with a better educational foundation, and not just a technical foundation, the values of loyalty, integrity and honesty will have to be sacrificed in the long run. We shall then have a heartless society operating under the law of the jungle.

One contributing factor to this deteriorating condition is the removal of the cane from the teacher. I understand that in some schools if the teacher were to touch a child, she should be prepared for a long complaint from the parent, probably with a demand from the Ministry for an explanation. Under such conditions no conscientious teacher could give of her best to her students. The authority and dignity of the teacher should be quickly restored and the student should be taught to accept his position in the school, in the home arid in the society. The only way to achieve this is to teach him discipline. I am not surprised if some of our repenting delinquents say that if they had not been spoilt by their teachers and their parents they would not be in their present predicament. Mr Speaker. Sir, if we are not to accept this blame, I urge that we should educate our children for the sake of education and not for the sake of giving in to these different pressures.

Sir, we seem to be losing our international trade to a certain extent. Many ships do not call in Singapore as before. Steps must be taken to ensure that more ships call at our Port, Finally, I wish to support this "soft budget" that has been presented by the Minister for Finance.

5.35 p.m.

Mr Phey Yew Kok (Boon Teck): Mr Speaker. Sir, the 1976 Budget Statement has been received with a sigh of relief by many who expect the 1 976 Budget to reflect the chain of unsettling events during the past year. But while the budget does not contain any drastic changes in the tax liability for Singaporeans, the sombre tone of the whole budget hardly gives cause for rejoicing.

From the Singapore workers' point of view, the only note of optimism struck in the 1976 Budget Statement is the disclosure that the rate of inflation has been successfully stabilised during the past year. But the question of inflation is only of secondary importance in relation to the general health of our economy. As analysed in the 1976 Budget Statement, events during the past year have brought about a change in the availability of markets for the manufactured products in Singapore and in the availability of funds for investments in Singapore. It would also appear in the 1976 Budget Statement that the prospects for a more favourable economic condition in Singapore are matters of hope rather than of expectation. The workers in Singapore have the advantage of being forewarned by the Secretary-General of the National Trades Union Congress to brace themselves for more stringent economic conditions during the next two years. The Government of Singapore, by making constructive plans to overcome the difficult circumstances confronting Singapore during the next few years, has effectively demonstrated its qualities of capable and decisive leadership which has been largely responsible for the rapid economic development of Singapore in less than two decades. No rational person, whether inside or outside this House, can fault the emphasis given in the 1976 Budget Statement to the development of skill-intensive projects and the training of skilled manpower as well as the continued promotion of Singapore as a financial centre for the region.

All these projects and proposals can but only be intended for the general benefit of all Singaporeans in that it seeks to make our economy remain viable through creating sufficient employment opportunities for our increasing workforce in the next few years. It is with this consideration in mind that I speak with confidence that the workers of Singapore will give their fullest support and cooperation to the efforts of the Government to safeguard the economy of Singapore.

By doing so, I must hasten to correct whatever misimpression may have been formed over certain comments made by the Minister for Finance in the 1976 Budget Statement. To the extent that the apparent proliferation of non-wage items in collective agreements and contract of service has served to make the cost of labour in Singapore prohibitively high in relation to that prevailing in certain other countries in the region, the attention drawn by the Minister to the problem must be appreciated by workers in the spirit in which the comments were made. But at the same time comments by the Minister have given rise to sniggering remarks by employers about unreasonable claims by trade unions such as the payment of $1 .000 by way of funeral benefit. It is, however, desirable that Members of this House should have a correct perspective of those fringe benefits commented upon by the Minister for Finance. It is generally the rule that where workers have the benefit of favourable salary scales or wage scales, their fringe benefits are nothing out of the ordinary. But where workers do not enjoy the benefit of good salary scales or wage scales, there is a tendency for deficiency in their wages to be made up in the form of fringe benefits. such as the funeral allowance cited by the Minister for Finance.

The National Wages Council was established in 1972.

Most, if not all the various kinds of fringe benefits secured by Unions for the benefit of their members were done after the Industrial Arbitration Court was established after the passing of the Industrial Relations Ordinance.1960.

So, I say that there might have been some attempts to circumvent the NWC recommendations after 1972 but the House must remember that it was to a very limited extent, because most of the fringe benefits were obtained before 1972.

The proposal to consolidate the various allowances and have them integrated into the salaries is a matter to be sorted out by the Unions and the Employers concerned, with the assistance of the Labour Ministry.

In any event, this House can rest assured that the NTUC and its affiliated trade unions will seriously lock into the whole question of wages and fringe benefits with the view to drawing up a rational policy in the light of the circumstances disclosed and analysed in the 1976 Budget Statement. The workers of Singapore are appreciative of the need for their employers to remain in business in order to pay them their wages and to provide more employment for their children. But just as workers have every right to expect, as taxpayers, capable leadership and good planning from the Government of Singapore, they have the same right to expect, as employees, efficient management and good example from their employers if Singapore is to overcome its problems in the next few years.

5.42 p.m.

Dr Chiang Hai Ding (Ulu Pandan): Mr Speaker. Sir, since the last Budget session, very significant events have occurred in our part of the world, The consequences of these are still being worked out even though some of the effects are already felt.

I refer to the fall of the Indo-Chinese states to the Communists.

We can try to lay blame on this or other party. However, not much is gained by the pointing of fingers, the wringing of hands and the shedding of tears,

Lessons may be learnt, For those of us who live in South-east Asia, it is imperative that we disabuse Hanoi which believes that history is on its side, because the Indo-Chinese call themselves "progressives" and call others "reactionaries".

Our Minister for Finance referred to ASEAN in his Budget Statement. We in ASEAN are quite strong. We have not been devastated by war. On the contrary, we have been able to cooperate with each other and with others outside our region ever since we signed the Bangkok Declaration in August 1967. We have slowly but definitely engendered a sense of regional cohesion and solidarity among our political, bureaucratic and business elites. Last week, we read that bankers in ASEAN want to hold a convention and even establish a federation. The recently appointed Malaysian Minister of Finance, Tengku Razaleigh, is President of the ASEAN Chambers of Commerce and Industry.

Insofar as the fall of the Indo-Chinese states brought the five of us ever closer together. culminating in the Heads of Government meeting in Bali last month, the events of the last 12 months can be said to contain a silver lining.

Further to what I have said, we constitute a not inconsequential grouping of people and resources. Population-wise, our combined total of almost 250 million exceeds that of the United States, is double that of Japan and almost five times that of the three Indo-Chinese states. In area, we are double the combined area of the nine EEC countries. Resource-wise, we have petroleum in abundance. 98% of the world's abaca fibre, 90% of the tropical hardwood. 85% of the natural rubber and palm oil. 80% of coconuts and 62% of tin. Poor countries we may be now, but poverty is not our heritage.

Thirdly, while it is true that ASEAN countries are encountering insurgency problems, it is worthwhile remembering that in almost every case we have experienced and defeated Communist threats, each in our own way. If the Indo-Chinese Communists have been strikingly successful in holding at bay the world's mightiest military power, it is also worthwhile remembering that they were fighting a nationalist struggle on their own soil, which the Americans and their allies were not. Any crossing of national frontiers by foreign soldiers today escalates that war and precipitates predictable responses.

The lessons of our recent history have been taken to heart, and our Heads of Government at Bali firmly reiterated their commitment to economic growth with social justice to overcome the challenge of domestic insurgency threats.

Fourthly, let us not mislead ourselves to think that problems are our monopoly. It is just that, being closed societies, less is known about the problems of the Indo-Chinese states. They have fought a long and agonizing war which has just ended, National reconstruction will be a herculean task. An Indo-Chinese friend in days gone by used to tell me that his country suffered from having two mothers-in-law - the Chinese and the Russian. It appears that other Communist parties in the region are also similarly afflicted, Needless to say, these mothers-in-law do not see eye-to-eye with each other to the discomfiture of the long-suffering daughters.

However, all this said and done, we in ASEAN cannot be accused of not proffering friendship to the new regimes in their task of rebuilding their shattered economies. Nor should we be provoked to respond in like manner when Hanoi calls for a new confrontation in South-east Asia.

Our very name. Association of South-east Asian Nations, means that membership is not limited for all time to only our five states. But new members must help strengthen the association and not weaken it by encouraging subversion and disruption.

Our continued social well-being and political stability are founded on our people's faith in themselves and our commitment to work for our long-term future. We have all chosen the free enterprise system, although modified to suit our particular circumstances. We regard it as the most rapid and least painful path to economic growth of our respective countries.

This economic growth depends on a climate of confidence which will lead investors to invest capital and enterprise. The view on the ground in ASEAN is infinitely more promising, than that from the board rooms of Europe, United States, Japan and elsewhere. Only here in South-east Asia does the investor get a feel for the men and women who make this place work. Only here in South-east Asia can he sense the excitement of societies in transition, gearing-up for the breakthrough which will uplift them from poverty to the abundance that is their heritage.

The historic Bali meeting has taken place. The Kuala Lumpur follow-up has also produced concrete proposals. What more can we do as a group?

In addition to national investment and trade promotion missions abroad, let us also send ASEAN missions, Other people and groups overseas such as the EEC, the United States, Australia and New Zealand, think of ASEAN as a group. So, let us also "sell" ASEAN as a group. When many projects are attracted our way, various projects must inevitably end up in each of our laps.

Conversely, when overseas economic missions visit one of our countries, let us encourage them to visit as many of the other ASEAN countries as well. Last week, a Canadian mission did just that. This trend should also be encouraged.

By all means let us compete, within limits to make ASEAN an even more attractive place to invest in, compared with other places. We are, after all, named as one of the world's fastest developing regions. With these cooperative actions we will draw even closer together, generate greater investor confidence and investment opportunities, to realise the opportunities in ASEAN for our people.

We each contribute our individual strengths. For example. Singapore has a ready source of financing in the Asian Dollar market. When it originated in 1968 it siphoned off floating US dollars to Tokyo and London. Today the flow has been reversed and such dollars flow principally from Europe to finance development in the Asian region, including ASEAN. Today Singapore is rated as the seventh in a list of ten top financial centres of the world, the second in Asia after Tokyo and ahead of Hongkong. Singapore has also encouraged the financing of development projects in the region by reducing the tax earned on profits from offshore investments. We have also recently liberalized our exchange rules and regulations to treat ASEAN as part of the scheduled territories, thereby permitting free and liberal transfer of funds.

The Finance Minister in his Budget Statement has made further tax concessions to develop the Asian Dollar market. We have done these things without negotiating with our colleagues for reciprocal advantages. Our Government has demonstrated its earnest desire to build upon the achievements of ASEAN.

We will now have a permanent secretariat for ASEAN. We should now be even better able to cooperate and coordinate our efforts to build a strong, prosperous and resilient region in which our people can live in amity and peace.

Mr Speaker, Sir, I have pleasure in supporting the Budget Statement.

6.07 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 Hon. Minister for Finance for presenting another fair and reasonable Budget on 1st March 1976 for the financial year 1st April, 1976 to 31st March, 1977, which would encourage local and foreign investors to proceed with their investment on various industrial projects.

Sir, the Hon. Minister for Finance in his Budget Statement did mention that there should be an adjustment in the present wage policy. He also indicated that the National Wages Council ought to consider whether it should not include all forms of wage increases, including annual increments, incentive allowances and bonuses, in the computation of the annual NWC wage supplements, to arrive at a single total annual wage increase.

Sir, should there be an adjustment of wage policy, I would request that there should be a thorough study on this important matter. There should not be a hasty conclusion. The NTUC and the Employers' Groups should be fully consulted and to arrive at a fair solution. Whatever recommendations the NWC would give to the Government on adjusting the wage policy, they should not be detrimental to the welfare of the workers and their take-home pay should not be reduced. All necessary fringe benefits enjoyed by the workers now should not be withdrawn.

The workers are fully aware that the cost of labour should not be too high or else investors would go to other countries where labour cost is cheaper. If this happens, there will be further increase of unemployment in Singapore. On the other hand, the workers must get adequate wages to meet the present high cost of living due to the global inflation and the high prices of essential commodities, foodstuffs and manufactured products.

According to a survey on labour force last year compiled by the Ministry of Labour and the National Statistical Commission, the total work-force in Singapore was 873.000 workers and about 75% of them earned less than $400 a month. The unemployment rate reached 4.5% last year with 39.500 people unemployed. However, I am glad to know that the service sector is still providing new jobs for the workers. Also, employment in the commerce, financing, insurance, business services, social and personal services sectors is increasing as well.

Sir, my calculation of the expenses incurred by a worker to support a family of five persons, i.e. himself, his mother, his wife and two school-going children for a month, will be as follows. Assuming that his salary is $400 a month and after deducting 15% for CPF contribution, i.e. $60, the net balance is $340. a. HDB 3-room flat rental, electricity, water, gas, etc. $ 85.00 b. Marketing - foodstuffs 150.00 c. Rice for 5 persons 25.00 -------- c/f $260.00 b/f $260.00 d. His daily lunch at work $1.50 x 24 days 36.00 e. His daily bus fare 80 cts x 24 days 19.20 f. Newspaper 7.20 g. Bus fare for 2 school-going children, $15 x 2 30.00 h. School Supplementary Fees, $2.50 x 2 5.00 i. One loaf of bread daily 15.00 j. Coffee powder, sugar and butter or jam 8.60 ------- Total: $381.00 -------

Sir, you will appreciate that a worker with a family of five persons earning $400 a month and after deducting his CPF contribution of $60 will have a balance of $340 which is not sufficient to meet his monthly expenses of $381. Also, you will notice there is no provision for entertainment, like going to the cinema, or for ordinary medical bills if one of his family is down with flu or fever, There is nothing for him to provide for unforeseeable financial needs such as when he is temporarily out of job; or someone in his family is seriously ill requiring admission to hospital, or even a sudden bereavement in the family. This clearly shows that a worker earning a monthly salary of $400 and with a family of five persons to support, after deducting his CPF contribution will not be able to meet his monthly family expenses.

Therefore. Sir, when the NWC gives recommendations to the Government on adjustment on wage policy, it should bear in mind that annual bonus or annual wage supplement together with some fringe benefits are still necessary for the workers to help them to make both ends meet in their monthly family expenses.

Sir, should there be a review on the fringe benefits by the NWC covered by collective agreements for the bargainable employees, it should also look into the fringe benefits given to local and foreign executive and managerial staff. The NWC should know what is the total cost of fringe benefits given to them and the actual cost for the bargainable employees, believe the payment of fringe benefits is part 36.00 and parcel of labour cost.

Sir, I would like to quote the transport allowance given by the Caltex (Asia) Limited follows:-

(1) All foreign managerial staff are provided with a car and a chauffeur at the expense of the Company.

(2) All Departmental Heads are given the same privilege as No. 1 above.

(3) All Senior Executives are given a transport allowance of $420 a month and they can still claim mileage allowance for using their cars on Company's business beyond a certain mileage limit.

(4) All Junior Executives are given $150 transport allowance. They have now abolished it, but have compensated it with a payment of $180 added into their salary.

(5) The bargainable employees, such as labourers, clerks, technicians, supervisors, are given either $50 transport allowance a month or to use the Company's contract bus transport.

(6) Now a few new bargainable employees are not given any transport allowance. They also cannot use the Company's transport.

Our Union's transport grievance with the Company has not been resolved and our Union will have to bring the matter to the Ministry of Labour for settlement.

Sir, from what I have just said, you will agree that managerial and executive staff are getting better fringe benefits than bargainable employees. So it is unfair to say that the fringe benefits given to the workers have caused labour costs to go up. In fact, a good portion of the costs of fringe benefits is also given to the local and foreign managerial and executive staff.

Sir, we are not angry or jealous of the local and foreign managerial and executive staff getting better fringe benefits than the bargainable workers, We agree they deserve to enjoy such fringe benefits. However, should the NWC review the fringe benefits of the bargainable workers, it should look into the total cost of the fringe benefits given to the following three categories of employees: -

(a) Foreign managerial and executive staff,

(b) Local managerial and executive staff, and

(c) All the bargainable employees covered by a Collective Agreement.

After a careful and thorough study of the actual total cost of the fringe benefits given to the above three categories of employees, then only will the NWC be able to give a fair and proper recommendation on a review of all the fringe benefits given by a company.

Sir, family planning is a necessary practice for all married workers in Singapore. They must accept the reality of life that the world does not owe them a living. They must agree to have a small family of two children only, irrespective of whether they are boys or girls. When they have two children, they must stop. Earning a salary of $400 a month, a worker is really asking for trouble if he has many children. He cannot afford to give his family a fair standard of living. There is every possibility that he will frequently worry over financial problems, resulting in his falling sick, in poor health and inefficient at his work. A wise worker will have a family of two children only. He will continue with higher studies, especially on technical subjects, to improve his knowledge and skill in order to get a better salary and quicker promotion or for better jobs.

Sir, the crime rate has been increasing in Singapore. The Police has been doing its best to reduce the crime rate. The public must be more civic conscious and assist the Police to catch the culprits. Without public cooperation and assistance the Police will find difficulty in solving crimes.

According to the latest newspaper reports a few sex maniacs are raping and molesting young girls and even children. The Police must smash the operation of blue films and pornographic literature. Those involved in this mean business should be punished severely.

For raping young girls or children, all rapists who are convicted under the law should be completely castrated by surgery, in addition to punishment under the law, This will save other innocent young girls and children from becoming victims of these sex maniacs.

Sir, I am glad to read in the newspapers that the Government has permitted married couples to use their CPF contributions to purchase HUDC flats. I think it is not fair to deprive the bachelors and spinsters from buying HUDC flats, After all, they also pay income tax like other married couples. Also, a good number of them would like to stay with their parents. brothers and sisters, In fairness to them, I would request the Government to allow them to buy HUDC flats, just like other married couples, without further delay. Or else, the Government is indirectly forcing them to get married as quickly as possible in order to qualify for purchase of HUDC flats.

The HUDC flats, especially those with prices ranging from $55,000 to $80,000, are most popular and in big demand, May I urge the HUDC to build more flats of this type and to cut down the building of the higher-priced flats which cost more than $80,000.

There are still many applicants on the waiting list for HDB and HUDC flats. I hope the Government will do its best to build more flats to meet the demand so that the private developers will not increase the prices of their flats or houses to fantastic levels, as had occurred during the last economic boom. They have already made enough profit and they should not be allowed to enjoy it again.

With regard to HDB flats, the purchasers have been complaining of the low standard of the construction work. A lot of money and inconvenience is involved in repairs or renovation. The purchasers are quite willing to pay a little more for the flats provided the building quality of the flats is good and up to the standard. I hope the HDB will rectify the poor construction of the flats and exercise careful supervision over the construction of new blocks of HDB flats.

Sir, the Singapore Bus Service has improved a lot. There are more buses running the various routes; the waiting time for buses has been lessened. One can hardly find any rude behaviour on the part of the conductors, the driving standard of the bus drivers is good. I am quite satisfied with the present standard of service. I think the female conductors are doing a good job. They perform their duties just as well as the male conductors. There is still room for further improvement, however, especially the following: -

(1) Most of the windows of buses are damaged and need constant repair. The window frames and glass are very dirty and require cleaning.

(2) The bus deck needs regular sweeping to keep it free of used tickets and other accumulated rubbish.

(3) Something must be done for the students, especially in the evenings when they are on their way home. During, this period most of the buses are crowded and the students have no chance to get aboard. More buses should be put on the road in the evenings so that the tired and hungry students can get home earlier.

(4) Some bus drivers have the bad habit of not stopping at the bus stop to pick up commuters who have signalled them to stop, especially when two or three buses arrive together. In such instances the driver of the second or third bus will drive away even the bus has only a few commuters in it. This bad habit must be stopped immediately to avoid inconvenience to the commuters.

Sir, I am quite sure the workers and the people of Singapore will accept the advice given by Mr C. V. Devan Nair, the Secretary-General of NTUC, in his address to the Second Triennial Delegates Conference of the PIEU and SILO at the Singapore Conference Hall on Saturday, 28th February, 1976. With the present global inflation, slow industrial growth and unemployment, it is necessary to have a new pay strategy for the workers so as to attract investors here and to gradually achieve full employment. Belt-tightening is necessary for all categories of workers from the private and public sectors. In order to achieve full employment in 1976 and 1977, a total of 84.000 new jobs have to be created. So far, there is a possibility of achieving about 40,000 new jobs in the manufacturing, construction, transport and public service's sectors in 1976 and 1977, which are far below our target.

Sir, investors will only invest in a country where there is political and economic stability, industrial peace, and workers who are willing to learn and are hard-working, wages are fair and with reasonable fringe benefits, prices of goods for export are competitive with other countries, manufactured products are of a good quality, and where they can make substantial profits out of their investment.

Sir, for the sake of long-term national interest and for the good of our present young people and the coming new generation, the workers of Singapore should accept the wisdom and guidance of NTUC on the new pay strategy as well as wage policy in collective bargaining including fringe benefits. Again, we have to make a further self-sacrifice and to put reasonable claims to employers for new collective agreements. We have to cooperate with the Government and the Employers' Groups in a mutual tripartite drive to attract local and foreign investors to invest in Singapore for the benefit of all. The workers get jobs with decent wage and good condition of service and the investors get substantial profits in return for their investment here.

Sir, we cannot afford to be selfish and refuse to take steps to tackle the present slow industrial growth and unemployment situation. We must not allow the present unemployment figure of 39,500 to increase further. We must all be united and do our very best to achieve full employment as soon as possible by encouraging the investors to build more factories or plants so that our young school leavers can get jobs.

Sir, much has already been said about the necessity to increase productivity, but unfortunately nothing has been said about the formula for incentive payment to the workers for increased production, not only in the manufacturing sector but also the administrative sector as well. Sir, all employers are in support of increasing productivity but very few are willing to pay the incentive payment to the workers for the good job they have done. I submit that employers who refuse to pay incentive payment to the workers for having achieved increased productivity, are shamefully exploiting the workers and this should be stopped. Sir, employers not only refuse to pay incentive payment to the workers for their effort in increasing productivity, they are also not interested to form a joint Productivity Committee with the Unions. I understand there are only a handful of Joint Productivity Committees in Singapore.

Sir, to prove my point, our Union has already submitted claims to the Shell Group of Companies on 20th November, 1975, including a clause for the formation of a Productivity Committee, which reads as follows:

`The Company and the Union shall form Productivity Committee comprising members from Management and Union to monitor productivity and introduce productivity schemes in the Company The Company shall disclose fully the results of productivity and shall share equitably the fruits of productivity with their employees'

This is the final reply from the Shell Management on 23rd February, 1976, as follows -

`Productivity Committee

Rejected, as matter within ambit of Department/Worksite Committee'

Sir, the Union disagrees with the Shell Management's contention that a joint Productivity Committee to deal with policy matters, especially on the formula to measure productivity and the quantum of payment, is within the ambit of Departmental/Worksite Committee. These policy matters should be dealt with at the Union's Branch and Executive Council level.

However, the Union's stand is simple. If employers are reluctant to form a Joint Productivity Committee in order to disclose the results of Productivity and to introduce productivity payment schemes, then they cannot expect increased productivity from the workers. Perhaps the NTUC should take up this matter with the Government to consider the enforcement of a Joint Productivity Committee and Productivity Payment Scheme through legislation in due course. Employers should appreciate that there is nothing free in this world. If they want increased productivity from the workers, they must compensate them accordingly.

Sir, I fully agree with what the Chairman of the National Productivity Board. Mr G C. Thio, had said in his address to the Symposium on Productivity Agreements. Worker Motivation and Sharing the Gains of Productivity, held at Hotel Equatorial on 16th February. 1976, and I quote.

`We should, therefore, give due attention towards developing team spirit, cooperation proper work attitudes and efforts, worker motivation and incentives which are part and parcel of a successful scheme in maximising productivity movements in all Sectors and to sharpen our competitive edge over others

If workers felt they are not getting a fair share of the benefits of higher productivity, they would see little reason for exerting themselves for giving their cooperation and support.

The process of apportioning the gains from increased productivity equitably by a spirit of goodwill understanding and willingness to give and take.'

The workers fully understand the importance of increasing productivity, to better the quality of the products, to see that the prices of goods are competitive to other countries, and to accept the fact that investors want substantive profits for their investment. Commonsense tells us that if we achieve all these qualities, consumers in other countries will buy more of our Singapore-manufactured goods. The investors will get better profit and will expand their business and there will be job security and more jobs for the younger people.

Sir, the people of ASEAN countries are very happy that their leaders have met recently at Bali and at Kuala Lumpur to foster better understanding and to establish political and economic cooperation. So far, the conferences have had successful results. I am glad that Singapore has been selected to manufacture diesel engines. I sincerely hope that all ASEAN-designated industrial projects will be implemented as soon as possible. I am confident the next ASEAN Foreign Ministers Conference in Manila will achieve further good results. With the present ASEAN political and economic cooperation, and with the implementation of the major industrial projects, I am sure local and foreign investors will be encouraged to make their investment in ASEAN countries.

Mr Speaker, Sir, I would like to join my colleagues in this House in giving full support to the Budget Statement presented by the Hon. Minister for Finance to Parliament on 1st March, 1976.

6.32 p.m.

The Parliamentary Secretary to the Minister for Labour (Mr Fong Sip Chee): Mr Speaker, Sir, it will be a breach of etiquette if I do not join other Hon. Members in their chorus of compliments to the Hon. Minister for Finance for his "painless and no-shock" Budget Statement delivered on 1st March, 1976. However, I do so not without some reservation.

"No-shock and painless" indeed it was, for it has become a common budget delivery procedure for several years now, that the pain and shock always take place in between budget statements. The latest shock was delivered on last New Year's Eve, Perhaps it might as well be so, because intentional or not, the timing of the announcement of the new taxation measures for motor vehicles provided excellent opportunity for active exchanges of dismay and disgruntlement over dinner tables at numerous New Year's Eve parties. That was one perfect way to generate discussion at a convenient time. I must congratulate the Minister for his choice of the timing in administering this shock treatment, although at the same time it also betrayed his political insensitivity.

Nevertheless, the wound has begun to heal under his tender budget dressing. Eventually, the scar may not be visible and may even emerge as a new status symbol. It serves no useful purpose, therefore, for us to revive discussion on the subject.

Due credit must be accorded to the Hon. Minister for his elucidating assessment of the state of the Republic's economy. This ought to have a sobering effect on the population, and Hon. Members will no doubt apply themselves to debating the more crucial issues on Singapore's economic well-being in the difficult years ahead. For our citizens, the sooner we get ourselves out of the euphoria of the past few years and get down to appreciating the hard facts of life, the better we will be prepared in gearing ourselves for the lean years ahead of us.

The years of plenty have gone. There is little we can do to alter the course of the ups and downs of the world's economic order. But we are not completely helpless. There are a number of ways within our control which we can positively exploit. One of these is to increase our productivity.

6.35 p.m.

[Mr Deputy Speaker in the Chair]

The Parliamentary Secretary to the Minister for Labour (Mr Fong Sip Chee): The question of higher productivity has been the subject of frequent exhortations by many concerned quarters. Ironically, whilst both the employers and workers are agreed on the need for higher productivity, neither party seems to be able to offer any tangible solution.

There are several ways of measuring the level of productivity. An economist would determine productivity by the value added per man-hour: that is, the gross value of output minus the value of all intermediate input, such as the cost of materials, wages and overheads, and divide it by the number of man-hours put in. This method of measurement appears to be rather impersonal and does not consider other factors like the sources of input, quality of the products, prices, and markets for the output.

From the employer's point of view, the practical gauge for productivity lies, of course, in the margin of profits. The employer is naturally ever conscious of the need to reduce costs in terms of materials and wages, and when opportune, through increase in the prices of their products.

For the workers, the question of whether higher productivity will mean that they will have to work harder, or if they will enjoy the fruits of their labour, is uppermost in their minds.

The economist's definition of productivity is the sum total of all the rational considerations for an efficient order of things. However, in a society like ours, where monetary rewards and returns become the only incentive for one's effort, the attitudes of the workers and the employers naturally prevail.

The Economic Survey has pointed out that the increase in our GNP was only about 3% to 4%. Various attempts have been made to rectify the poor performance, but all efforts seemed to centre on what have been mistakenly considered as the two most important factors, that is to say, the various ad hoc modifications to the system of production and the amount of effort put in by the workers. Unfortunately. the entire exercise has been no more than skimming the surface without knowing the root causes that have led us to this sad state of affairs.

Exhortations on harder work find little reception in our workers and these are only effective, if at all, during the time they are being lectured to. In short, this is nothing more than a half-hearted salvage operation of a situation which is unacceptable to us but which we had helped to create for ourselves.

The root of the matter lies in the work ethic - values such as job satisfaction and pride of employment. These are precisely the very values which our education system, or more correctly a combination of many short-lived systems have failed to inculcate in the minds of our present generation of workers.

Let us have enough courage to face up to this painful truth. A young worker of today, say, between the age of 23 and 25 years, is the product of our education policy and system. He is the show-piece of our education planners' fantasies. But others may even look upon him as a social liability; he has a soft mind, supported by a heart which easily falls prey to the temptations of the good things; he is not even proficient in his first language, being the victim of our so-called bilingual education policy. He shuns meaningful jobs which draw better pay, opts for more cosy employment, and he wants to start life at the top. Further probe into his profile reveals an equally sad picture. He has been trained in the technical skills to meet the needs of the economy, but he has not been taught in his school days the correct attitudes and values of work. The syllabus in school provides the skill training but not the associated work values. He might even have gone through the moulding mill in National Service, where he was posted to a Hokkien platoon, having found that his bilingual education was of no help to him in understanding his sergeant. May I remind Hon. Members at this stage that most of us in this House are the products of a primarily mono-lingual education, many are today effectively bilingual or even tri-lingual. Those who are not, as yet, are extremely proficient in at least one language.

Fortunately for these people, they have been spared the agonies of the Playway Method or the Primary Pilot Project (PPP), the Multiple-Level Teaching Method, the Group-Teaching Method, the still-born Restructured Education System, or the new Restructured Education System, which is a reversion to the old vocational school system. Gentlemen, we are back to square-one. Had we been exposed to all these conflicting experiments, our educationists would have come close to producing their first "Frankensteins" in frighteningly great numbers.

But they may yet succeed finally, if they persist My fear is not unfounded and it has been confirmed by the Hon. Senior Minister of State for Education. Hon. Members will remember his announcement in this House that he intended to incorporate the Primary Pilot Project into the formal education system.

"Trial-and-error" has been a convenient excuse for failures, but in the case of our educationists, it has become a practised virtue, The Playway Method (PPP) is nothing new. It was introduced many years ago and was then known as "The Activities Method". This scheme was subsequently dropped, I suppose, for good reasons, The departure was temporary, however, as it re-emerged under a new name, but care was taken this time to call it a "Pilot Project" in case of another failure. In the event, it too became a failure. I congratulate the Senior Minister of State for his courage in incorporating a "Tried failure" in the formal education system. The Chinese language has an idiom to cater for this kind of situation, it says: "change the soup but not the medicine" (huan tang bu huan yau). In modern medicine, it means: change the flavour of the pill's coating, but not the medicine.

I do not intend to subject the House to detailed illustrations of the multiplicity of systems which I have enumerated. Hon. Members who are in the teaching profession will no doubt be able to enlighten us better. But I must remind the Ministry of Education that it is about time that it gets out of the twilight zone and begin to distinguish between fantasy and reality. PPP and other educational novelties may well serve the needs of those countries from which we had copied the systems. We cannot afford the luxury of experimenting to satisfy the whims and fancies of the idealistic educationists, who had presented these imported systems as their own innovations.

We have no time for trial and error. We have only two million digits to juggle with whilst the originating country of these ideas has hundreds of millions from which to choose their leadership, executive personnel and workers. We cannot afford the high casualty rate in experiments.

Perhaps in this debate we may hear from the Minister his views as to why everyone else - the principals, the teachers, the parents and the students, but not the Ministry of Education - must be blamed for this sorry state of affairs. It has never occurred to the top hierarchy in the Education Ministry the need for a thorough examination of their own proposals, management system, the contents of the syllabus and most important, the whole purpose of education itself.

It would be unfair for me to say that the education system as a whole has failed altogether. We have succeeded in producing the professionals, the managerial personnel, and the skilled workers. But it is important that in the process, we must also inculcate the night kind of values and social responsibility which provide the cultural ballast, as the Prime Minister has often said, for any community to move on to higher planes.

I appreciate the need for some changes when a new leadership takes command of a situation, because if the system left behind by the previous incumbent is allowed to continue, then he fears accusation of being deficient in innovative thinking. But to change simply for the sake of changing can be disastrous. Let me quote two minor examples: Hygiene was removed from the curriculum to save time for other subjects; but it had to be reintroduced later under the name of Health Science after the outbreak of a number of infectious diseases; Civics was regarded as a complete waste of time but suddenly someone rediscovers its value, and of late it has also acquired a new name -Education for Living. Sometimes I mistake it for "Education for the Living".

This on-off-on-off merry-go-round must stop. May I liken to a little note which I wrote recently to describe a certain situation, It says: `Re the cancellation of the last order, please note that this cancellation has now been cancelled.'

What has gone wrong? It is easy to attach blame on others, but let us examine the following to see how our educationists fared in exonerating themselves:

Question (1): Are not the principals to be blamed?

Fact: This generation of principals are put there in their places by our own administration. They are often only the executors of policies decided by the Ministry headquarters. They are not consulted in the policy formulation process. This situation is compounded by having to implement without detailed guidelines on the new policy.

Question (2): Are the teachers to be held responsible?

Fact: The bulk of the teaching profession are graduates of our own Teachers' Training College or what is now known as the Institute of Education (another `change soup no change medicine' exercise). If they failed in their job, is it not possible that we have not trained them properly and adequately?

Question (3): Is this generation of students hopeless and helpless?

Fact: There is now better living and study environment, HDB flats are going up every 30 minutes or so, better nutrition, better teaching aids, educational television, extra-curricular activities, better syllabus (so it is claimed) and better text books. Why and how come?

Question (4): The parents have not done their bit?

Fact: This generation of parents are better educated than the previous generation. They can offer better help and guidance in their children's work, But what happens to the other half of the day when the child is not in school and supposed to be at home? Both of his or her parents are at work contributing to the GNP, What about a full-day session to keep them off the streets and confine them to an environment more conducive to study? At the moment, a number of schools are running on a one-session basis and below the normal enrolment. Perhaps, this is one pilot project the Ministry of Education can attempt.

Question (5): Once out of school, the children will revert back to their dialects, how can they improve their literacy? This is a very common question being asked all the time.

Fact: This has been so for the last 1 50 years since the first school was built in Singapore. Did not the Ministry take this into consideration when they decide on the contents of the school syllabus?

Question (6): Are we going through a transitional period in our educational development?

Fact: In a recent informal conversation with an

Education Ministry luminary, I was told that our educational system is going through a transitional period, I salute him for his courage in defending his Ministry, but after 17 years since 1959, are we still in transition? I wonder when this transition will end.

Conclusion: As in Mathematics, the Q.E,D, to these questions is obvious. The Ministry of Education stands indicted,

For those who are still in doubt that the Ministry is actually in such a bad shape, further evidence is herewith provided. SBS was in such a mess that we had to move in a Government Team of Officials. The Ministry of Education has just received a Government Team of top Administrators.

With this injection of new vigour and fresh blood, I am sure Hon. Members in this House and all parents will share with me the hope, even that vain hope, that the Senior Minister of State, who by his public confession is an administrator and not a politician, will have the stamina to continue his good work in clearing up the mess, so that the parents, teachers, principals and the students can be spared the agony of being guinea-pigs for so many years to the fantasies of the arm-chair idealists, May I conclude on this lighter note: `A new broom sweeps clean, but the old one knows where the dirt is,'

6.52 p.m.

Mr Ho Kah Leong (Jurong): (In Mandarin): Mr Deputy Speaker. Sir, the Budget Statement this year, as expected, is a mild one. There is only one item of tax increase, and that is on cigarettes and tobacco. This is also interpreted as a further step to frustrate smokers, in the hope that they will be reminded that smoking is bad and to give up smoking. The intention, of course, is good. To the general citizenry, the budget is no longer the only document for the pronouncement of tax increases or the introduction of new taxes. As everybody knows, the month of March is not the only time for the announcement of tax increases or the introduction of new measures. Notwithstanding all these remarks, at this juncture when we are not very certain of our economic future, this Budget which on the whole does not propose any tax increases is welcome by all.

Sir, looking back over the past decade, since our independence we have done a great deal in the field of building construction for everyone to see. We have skyscrapers and factories mushrooming all over the place. We have a busy port. There has been general economic prosperity. Singapore has become a servicing and financial centre, an Asian Dollar Market Centre and an oil-prospecting centre for South-east Asia. Of course, as a country lacking in natural resources, our survival depends on our economic viability and stability. There have been indisputable economic achievements over the past decade and we were able to create thousands of jobs not only for our own citizens but also for foreigners to fill the gap in our labour force. In battling the oil crisis, Singapore has proved that she has the economic capacity to survive and recover, and not allow herself to be put in the position as in other countries where they are saddled with large scale unemployment. This is something that we should be proud of,

Sir, for a country to stress certain aspects of development neglecting the others will lead to social imbalance and aberration. The obvious result of stressing only on economic development is evident in some Government departments being mercenary - minded, where junior officers try to please their superiors by making more money for their departments and where senior officers try to please their Minister by the same means in the hope of getting promotion or even double or treble promotion. To the public, Government departments become a Yar Men into which they cannot enter without money. As the Member for Jalan Kayu had said here last year, nowadays public servants seem to have forgotten that their primary function is to serve the people. Instead, they think of making more money for their department.

Sir, I regret to say that from my own observation, there is an increasing tendency on the part of civil servants to glorify themselves by making more and more money, and there is no abatement in this tendency. For example, the Housing and Development Board has abolished the half-hour parking rate. Instead, the motorist has to pay a minimum of 40 cents for an entry into the car park. This has resulted in the social vogue of money-worship in the society. Everybody wants to get rich, and quick for that matter, Deceits and mutual fooling abound. So friends can be turned into stepping stones for one's uplift. There is a lack of humanity in our society. When you have money you have fame and status, and you will be respected. Those good-for-nothing idle flatterers will attach themselves to you. Whatever means by which you obtain your money does not really matter, be it theft, robbery, smuggling or illegal lottery, nobody cares. Graduates from the universities will ask these questions when they apply for a job: How much salary will I be paid? How many days' leave in the year, and what are the fringe benefits? Workers are not contented with what they get. They are all the time on the lookout for better paid jobs and greener pastures. They will hop over for such new jobs, if available.

Our young people are so fond of aping Western styles that they must wear cowboy jeans, go to the cabarets, bars and coffee houses and even to the gay quarters, and worse still, take to drugs. After wasting their money on these luxuries, when they do not have enough money, they turn to crime, robbery and theft. In spite of the stringent laws that we have, the crime rate is still mounting. What has gone wrong with our society? I think this is a matter that deserves serious consideration.

Sir, I believe the country that we want to build is not one that puts on a false facade, veiling hypocrisy, where everyone goes under a mask, instead of showing his true face, with empty form but without a soul. The quality of the citizen that we want to mould is not one who is selfish and self-centred. If our country consists of only a group of passengers who are money-worshippers, then the future of our country will be bleak and that is something for us to worry about.

All this points to one important aspect, that is we have so far only emphasised on the visible construction of our country and we have done very little, if at all, about the invisible construction of nation-building. The moulding of a national character. the soul, the quality and character of our people - all these constitute the invisible construction that I have referred to. Invisible construction is achieved mainly through education and culture. We inculcate patriotism and correct human behaviour through the process of education in our schools. Students stay longer at home and outside schools. Parents are busy doing their business or making money and so they have little time at home for their children's studies and thought-formation, In a society there is bad influence all around, The little things that they have learnt about life in school is inadequate to counter the evil and greater influence that they have been confronted with in society. In other words, the students are influenced more by society than by the teachings of their teachers, So perhaps extending the school hours may help, but at the present moment our education system does not permit this.

The reversal of the social ethos depends on the cultural strength of our country, and this cannot be done overnight. So far we have done very little in the cultural field. The Ministry of Finance has allotted a very small sum of money for the Ministry of Culture for cultural activities. It seems to be rather stingy. This year there seems to be an increase in the allocation of funds, and this amounts to only $105,000. With such a meagre sum of money, what can the Ministry of Culture do? Perhaps the Ministry of Finance thinks that culture is a money-losing proposition and so there is no point in spending too much money on it. Of course, we admit that cultural work requires money but this is money well spent on invisible construction for our national good which we may not see immediately but over the long time we can see the benefits,

Sir, I feel that economically we have the capacity to survive. In defence, we have various land, sea and air forces to look after our security. In education, every child has an equal opportunity. But in terms of culture. I do not think we have placed enough emphasis. We have travelled ten years towards the construction of a republic. We have laid the foundation for nation building. We have done a great deal in physical and visible construction but in the invisible aspect we have done little. The next stage in our nation building should lay stress on invisible construction. Otherwise, as I have pointed out earlier, our nationals will all become "ugly Singaporeans". If we have to live among the "ugly Singaporeans", then I am afraid, life will be meaningless and survival will be pointless, because we may all become "ugly Singaporeans" I

Mr Deputy Speaker, Sir, as a first step I would like to propose that the Government should set up a National Academy of Arts to enable considerable numbers of our children with special artistic talents to receive proper training. What opportunity of advancement will they have without such an academy? We have some private academies, but these academies have not at the present moment received adequate support from the Government. So, they have to charge exorbitant fees and as a result of such high fees only the rich can afford to send their children to these academies for artistic training and pursuit. Children of poor families will have no chance. So how can we promote cultural and artistic activities?

Sir, with a National Academy of Arts, we shall on the one hand be able to promote interest in culture and art and on the other hand, provide training opportunities for our talented youths, irrespective of whether they are rich or poor. The National Academy of Arts will become the centre for our cultural development. I think this is a pressing need which we must look into. It is my hope that the Minister for Finance will consider this proposal seriously,

7.04 p.m.

Mr Ivan Baptist (Potong Pasir): Mr Deputy Speaker, Sir, despite difficult times in 1975 Singapore's real growth of 4.1% is a credit to the people and the Government. But much has to be engineered to maintain present growth rates in more difficult times ahead. Our strategies need to be more sophisticated, taking into consideration our better standard of living and quality of life when compared to the economic and social challenges we faced in 1959. 1965 and 1968.

We need to attract new investments, expand present ones and increase productivity. Productivity is not only the responsibility of workers. It has to evolve from the board room with the enthusiasm that is expected of the shop floor. Improved work methods must be formulated and better machines designed to improve work output.

Very closely linked with productivity is quality and tendencies to inspect quality must be obliterated. Quality must be built into our products and not inspected. A desirable work ethic must be inculcated to enable us to compete effectively in world markets. Middle management quality consciousness leaves much to be desired and unless this is enhanced, improvements in production cannot be anticipated.

The other matter that needs to be dealt with urgently in order to increase productivity is the better utilisation of leisure. Leisure is that period of non-working time of an individual. This accrues after deducting working hours, time taken for travel to and from work, time spent at home preparing meals, eating, recuperating, time spent on family matters and so on. The apportionment will, of course, vary with sex and age. For shift workers, this is a special problem. Much has to be done to ensure that workers' leisure is usefully spent by creating opportunities for the useful utilisation of leisure hours.

Leisure provides a balance, eliminating the fatigue caused by work and increasing productivity. It provides a contrast, encouraging workers to seek in sport, tourism, hobbies and so on, some compensation for physical or psychological fatigue. It makes for a better balance between life and work.

Leisure should not merely help to maintain a worker's health and thereby conduce to high productivity. It should, in addition, be a factor in social adaptation, compensating for the isolation of the worker in present-day industry, and even lead to the advancement of a worker's career. To a steadily increasing degree, leisure activities are being looked upon as a cultural duty and a symbol of social status.

Loss in productivity is also a result of accidents at work. Greater stress on occupational health and safety will result in a safer working environment, Greater emphasis must be placed on accident prevention and not injury prevention. More scientific and systematic systems must be evolved to be able to predict accidental occurrences. A comprehensive early warning system developed can look at the total pattern of accidental happenings in each workplace, whether or not they cause injury or damage. From data obtained, an effective system of accident prevention can be worked out.

Mr Deputy Speaker, Sir, our tourist industry has grown favourably, and for our own good it must grow further. This can only be ensured if we enhanced Singapore's image among tourists. The present state of affairs in unethical trade practices, if continued, will be a negating factor for our tourist trade. These unethical practices, needless to say, spill over and affect Singaporeans as well.

Let me deal with public transport initially, not the SBS, Mr Deputy Speaker. Sir. There has been some improvement in the buses; they break down less frequently, cause less traffic congestion and seem to have employed more congenial staff, but the Singapore Taxi Service. Tourists and Singaporeans have complained of overcharging and blatant cheating by some recalcitrant taxi-drivers who blemish the others. Commuters wanting to ride into the CBD pay for the daily area licence. $3 before but now $4, and the Hon. Minister knows how much more later on, which had been paid for earlier in the day over and over again by previous passengers.

Then there is the question of overcharging. Extra charges are sometimes levied for going short distances due to, as is claimed by some taxi-drivers, a possible loss of a more lucrative fare. Extra charges for also longer distances to compensate the tedious and monotonous long drive. Extra charges too from the airport and the port to any destination, for more illogical reasons.

Another grave problem is the traumatic wait on the streets frantically waving at every empty taxi, to no avail. The seemingly contented look of these taxi-drivers give the impression of an excellent day's takings in their coffers. Here, the semaphore-sending figure is usually a Singaporean who is considered a less lucrative fare, However, those look-like-Singaporean' tourists, and our multi-racial society includes many, due to their not-tourist-like' attire because of their lack of interest in photography, have many-a-time turned signallers.

Mr Deputy Speaker, Sir, these unethical practices exist also in many of our shops. Being a shopper's paradise for tourists as well as Singaporeans, hundreds go on shopping sprees daily and a large majority are swindled. The honest trader finds it difficult to survive in this atmosphere. Redress in the form of a claim in court can be both unpleasant and unrewarding. This is all the more aggravated when the claim is relatively small. As such, these retailers get away with their sins.

It is necessary, therefore. Sir, to establish a Small Claims Court, a people's court where the aggrieved can sue someone without paying money for a lawyer. Much can be achieved for the consumer, whether tourist or local, to ensure his fair and honest treatment at the hands of the entrepreneur.

Mr Deputy Speaker, Sir. Government's anti-inflationary and anti-profiteering measures in 1975 were successful, NTUC, CASE and other organisations helped tremendously to ensure this success, However, although greater consumer awareness has been achieved, through consumer information and services, there is still exploitation of the consumers by sales persons.

Very few of us do not depend to some degree on the reliability of callers to our door such as the breadman, the newspaperman, the grocer, the gardener, the meter reader and many more. Similarly, a great many people depend to varying degrees on door-to-door sellers of other goods. In fact, door-to-door sales persons have been a part of the commercial scene for some years. Over the years, many organisations and individual sales persons have provided reliable and valuable service to householders. These sellers have been of very great assistance to those who, because of physical handicap or age, have been unable to venture into the market place.

Unfortunately, door-to-door selling or direct selling, as it is often called, has attracted the attention of some unscrupulous high-pressure sales persons who, using unethical methods and, after a high degree of practiced skill, will try to sell goods which the consumer neither needs nor wants or which the consumer can ill-afford.

Legislative safeguards are therefore needed to ensure that consumers, who cannot afford the time, money or otherwise for themselves to be skilled through practice and learning to combat such high pressure sales techniques, are properly looked after,

If goods are bought on credit, for instance, this piece of legislation could provide for a "cooling-off" period to enable the consumer to think about his purchase and, if so decided, change his mind and cancel the sale.

7.15 p.m.

Mr Ang Nam Piau (Thomson): Mr Deputy Speaker, Sir, 1975 was a year of world-wide recession with the major advanced industrial countries suffering on the average a decline in growth of 2¬%. In such bad circumstances, Singapore, an island nation without natural resources, can still maintain a real growth in gross domestic product of 4.1%, It is indeed a fair performance and considerable achievement. The 1976 Budget Statement presented by our Hon. Minister for Finance in this Chamber on 1st March 1 976 clearly shows that our political, economic and social situations are sound, stable and steady. But, Sir, how long can we maintain and enjoy this sound situation in this turbulent world? I am sure nobody will be able to predict. Therefore, I think we all agree that we cannot afford to take things for granted. We should not relax and be complacent about our achievement, We should unite and work doubly hard so that we can continue to enjoy good living.

Sir, in the coming year, foreign investments in Singapore may be gradual and slow. Factors that bring about a slow down and a decrease in foreign investments are beyond our control. For instance:

(1) The economic recovery of the advanced industrial countries takes time. Therefore, foreign investments in Singapore are expected to be slow and reduced;

(2) The increasing acts of insurgency in the North-East and South of Thailand and in Malaysia have caused hesitancy in the minds of foreign investors and cause them to adopt a more cautious or a wait-and-see attitude. Therefore, we can foresee that, except for short-term investment, there is unlikely to be any hope of large-scale, long term investments before the entire political and economic situation of the region becomes clear and stable.

In addition, as we all know, high wages and low productivity will further discourage investments and aggravate the unemployment problem. Though this factor is very complicated and difficult, it is within our control.

Sir, considering these circumstances, we can foresee that Singapore in the coming year will face a serious unemployment problem. The Minister for Finance has in his Budget Statement touched on the adjustment of wages policy. This is a useful reminder to our Singaporeans. If we want to avoid the surging wave of unemployment, we should, besides exercising self-restraint and not asking for higher wages, redouble our efforts, be more hardworking, increase productivity and be prepared to accept heavier jobs with lower wages.

Sir, I am sure we all agree that we should attract foreign investments if we are to provide jobs for our people. Regarding those investments which Government has substantial equity participation. I think our Government has a duty to see:

(1) That our people at all levels of work in these industries are genuinely given opportunities to upgrade their skills, both technical and managerial, and to acquire the know-how of these industries brought in by foreign investors;

(2) That after a period of time, by systematic phasing, some of the more important posts at the upper echelons should be "localised" by appointing local incumbents to be groomed for these key posts. It has been found in practice that in some of the existing industries foreign expatriates have tenaciously clung on to their posts by making all sorts of excuses and ruses to remain as long as possible.

Sir, we do not want foreign investors to take too much advantage by giving all sorts of excuses and we do not also want to be the economic slaves of foreign investors.

Sir, through ASEAN cooperation and as a group, I believe that we have a better investment climate than Latin America, the Middle East or Africa. Therefore, I believe that our future investments from foreigners are still bright.

Sir, the Budget Statement is not perfect. I am afraid that the per capita income distribution is not ideal as the trend is not directed towards equity. This may create a wider gap between the rich and the poor. Therefore, I would like the Minister for Finance to look into this matter seriously.

On the whole, Sir, though I have made certain comments. I still support the 1976 Budget Statement because it is meant to achieve greater viability for the Republic, to make it a financial centre, and to promote the Asian Dollar Market, and to make Singapore the centre of export-oriented and more sophisticated industries with scientific and higher technology.

7.21 p.m.

Mr Chin Harn Tong (Aljunied): Mr Deputy Speaker, Sir, the Budget now before the House is as reasonable as can be expected in the circumstances prevailing in Singapore and in the world. Of course, if one is determined to find fault with the Budget as presented by the Minister for Finance, it is conceivable that one may be able to criticise with justification the Budget on some ground especially the failure to give more tax relief in respect of personal incomes. But I myself am not particularly inclined to criticise the Budget on any such ground, and I am personally of the view that we all should be thankful for a Budget that does not seek to increase taxes, particularly on basic commodities.

My concern is that, while we have every reason to be grateful that the present Budget proves the past policies and leadership of our Government to be correct, we may get into the habit of thinking that our Government can be relied upon to do everything necessary and proper for our future interest and welfare. Such an attitude of mind, coupled with the increasing participation by the Government in the socio-economic activities, may cause individual Singaporeans to become complacent as to their own role in promoting the well-being of Singapore.

Sad to say, such complacency is becoming more apparent among some Singaporeans. If anything goes wrong in Singapore, these people simply blame or curse the Government for not preventing the thing from going wrong. If the Government does something to prevent the same thing from going wrong they criticise the Government for not doing so in a different way. It is all very well and easy to put the blame on the Government. But it must not be forgotten that the Government is not a miracle worker and that there are definite limits to the power of the Government to do all the things which the Government wants to do or ought to do.

To make my point clear, let me illustrate the matter with a reference to a noticeable trend among some of the professional and the elite classes of Singaporeans who indulge themselves in a form of escapism. While it may be exaggerating to describe the trickle of Singaporeans seeking to emigrate to other countries as a brain-drain, the fact remains that certain Singaporeans consider themselves to be completely dissatisfied with the socio-economic conditions in Singapore as to have the desire to start a new life in a strange country.

If they leave it at that, that would be the end of the matter as far as I am concerned, But they have seen fit to blame the Government for creating conditions which are intolerable to them and which have forced them to emigrate from Singapore. In so blaming the Government, they seem to have the support and sympathy of their friends and acquaintances who belong to the same professional and elite classes of Singaporeans.

In brief, their grievances seem to be that Singapore is too highly disciplined a society for them and their children, They do not seem to care that without such discipline Singapore would not have been able to continue to be a viable, independent Republic. They also seem to forget that they also enjoy far more privileges and perks than most Singaporeans and that with such greater privileges come correspondingly greater obligations towards the society.

My purpose in referring to the few Singaporeans who seek greener pastures rather than face up to realities is to draw attention to the attitude of mind underlying the whole matter. On the one hand, the Government is blamed by the emigrating Singaporeans for not allowing them to lead a way of life which is prejudicial to the interest of the other Singaporeans by reason of Singapore's socio-economic circumstances. On the other hand, the Government is also blamed by the stay-put Singaporeans for not imposing more restrictions on the emigrants so as to force them to live up to their obligations to the society from which they have benefited so much.

With such an attitude of mind, the Government makes a very handy scape-goat for every conceivable grievance. Either the Government is blamed for doing too much or doing too little. Those who are aggrieved that they cannot lead what they consider a fashionable way of life choose to blame the Government for being unduly restrictive rather than adapt themselves to the socioeconomic circumstances of Singapore. Those who are angry with the Government for appearing to be unduly liberal towards the former group of persons by not making them do their duties to Singapore choose to ignore what they themselves can or ought to do to promote greater self-identification with national interest.

As it is, most Singaporeans seem to have fallen into the habit of expecting the Government to do everything for them. Thus, for them the Budget Statement seems to represent not a comprehensive statement by the Government of what the Government intends to do or not to do in respect of the economy of the nation as a whole but as a specific refusal or omission to do what respectively concern them most during the next financial year.

I think it is most undesirable and unhealthy to have an attitude of mind which views the Budget solely in terms of the Government's obligations to the people but ignore the question of personal obligations of the people themselves to the Republic. The Budget is a financial statement which cannot and does not take into account the degree and extent of the inter-personal activities of those performed by voluntary civic and social workers, ,even though these activities greatly help to oil the functioning of our Society. My point briefly is that the success of any Budget is ultimately dependent on the personal initiative and capacity for sacrifice of the people for whose benefit the Budget has been drawn up.

7.29 p.m.

Mr P. Selvadurai (Kuo Chuan): Mr Deputy Speaker, Sir, that the depression, recession, (or by whatever other euphemism one may choose to call the phenomenon) of 1973, 1974 and 1975, has left Singaporeans relatively unscathed is a tribute to the collective resilience and organised response of the people and Government of Singapore. It testifies also to the foresight which went into the planning and implementation of the economic strategy that provided the framework which has happily helped us withstand the shocks of the past few years. The problem now is to strengthen the same framework and to enhance the economic security of not only Singapore, but of South-east Asia as well. If we have saved Singapore once, we shall now have to bend our energies, in concert with like-minded people and leaders in ASEAN, to make ASEAN secure as well.

The Finance Minister has, characteristically, defined the formula adopted to meet our economic problems as "the tried and tested mixtures". The Government and the public sector are to continue to provide the necessary facilities and services required to sustain growth. The private sector is given the task and the opportunity to increase and diversify production and secure new markets. It is a mesh and a mixture that has hitherto succeeded in releasing the creative and productive energies of the people without undue regimentation. In political terms it has also enabled us to keep extremist and adventurist politics at bay.

There are no absolutes in practical politics and there is no such thing as a social framework perfect for all time. Everything is relative and all progressive societies are in a constant state of flux, change and evolution for the better, Some new states are lucky in having leaders who have the knowledge and the skill to bring about social change and modernisation peacefully; others have leaders who can only move with violence and repression. For these latter, politics is more a matter of passion and belief than one of scientific precision. Sir, we have, I hope, escaped passion and dogma and have settled down to work with scientific rationality.

Mr Deputy Speaker: Mr Selvadurai, it is 7.30 now and the Minister for Finance has to reply. Mr Hon.

7.30 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Deputy Speaker, Sir, I am grateful for the opportunity given to me to reply to the very lengthy speeches I have heard since 2.50 p.m, this afternoon.

May I say, first of all, that I am gratified at the general support of Members for the financial policy of the Government. Some Members have expressed this support without reservations, while others have been perhaps less uninhibited in suggesting that there should be reservations to this support. In fact, I expected more brick-bats to be thrown at me. After all, in a world of rising expectations, when Singaporeans have become accustomed to double digit growth rates, even a real growth rate of 4.1% must be considered a come-down.

Sir, I propose to deal with the comments of Members by subject rather than by individual representations. I must thank Members for their views and comments, especially those with particular insights. For example, the Member for Ulu Pandan, with his academic training and former profession in History and diplomacy, is able to see ASEAN in very broad perspectives of time and of distance, whereas I confess I find some difficulty in seeing the ASEAN wood for the trees of inter-ministerial discussions and negotiations. At the same time. I also envy him for the very keen eye that his new profession of banking has given him on the practical use that greater cooperation and new economic opportunities of ASEAN will have for him as a banker. As a former banker myself, I join him in the hope that ASEAN will produce, and fairly soon, beneficial development not only for Singapore but also for the very large economic unit that he has described as ASEAN. I think that the recent meeting of Economic Ministers in Kuala Lumpur gives us great cause for this hope.

The only other Member who mentioned ASEAN was the Member for Whampoa. I think he was under some misapprehension when he referred to the attention which we gave to industrialisation rather than to agriculture in ASEAN. I am of the opinion that he was not correct. The emphasis, even among the ASEAN industrial projects chosen, was on fertilisers to help in agricultural development. Nevertheless, he was correct in thinking that for Singapore the project we have chosen is more concentrated on industry than on agriculture, although the diesel engine is eminently suited to the use of agriculture as part of an agricultural factor or other implements such as pumps.

I would now like to go on to the comments on growth and prospects for Singapore. I always listen to the Member for Whampoa with interest when he speaks with his usual expertise on economic subjects. I think the Member commented on the poor growth and analysed the figure of unemployment which he gave as 6%, and he went on to speak of the poor growth in a number of sectors. I agree with him that we cannot be satisfied with the performance of Singapore in 1975 and I hope that, in fact, the growth in 1976 will be better. In my Budget Statement. I have not given any figures for my estimate of growth in 1976 because so many economists, not to speak of Finance Ministers, have gone wrong in their economic forecasts that I do not think that this has any great value, But for those who are interested in looking at crystal balls, I think the figure which the Ministry of Finance computer comes out with after making a number of assumptions is nearer 8%. But, of course, with qualifications that if shipbuilding and the petroleum refining industries do not come up to expectations, then we may get a growth of 6%, On the other hand, there are other figures which have been given by the Monetary Authority of Singapore which are more optimistic. In fact, in these matters perhaps it is very easy to pick on any figure you want and you can have it justified on the computer by making the appropriate assumptions. Nevertheless, I think it is not incorrect to say that we could expect to be better off this year than last year.

Sir, the Member for Whampoa also made a number of comments and queried the reasons for the deflator in the services sector. I do not have the explanation for this, but if he likes I will write to him on this matter.

I also enjoyed the Member's comments on international problems such as the international monetary arrangements at Rambouillet and elsewhere. I may say that his remarks on the inflationary effects of the international money and gold discussions strike a responsive chord in me.

The Member for Katong was dismayed by the Member for Whampoa's forecast. He was in favour of a more optimistic outlook because of our success in meeting previous adverse economic conditions in the past such as the rundown of the British forces.

Mr Conceicao: That is not the impression that I tried to give.

Mr Hon Sui Sen: But that was the impression I received on hearing the Member's speech. Perhaps I should read his speech when it becomes available either in the press or in Hansard.

Mr Conceicao: I was dismayed all the same, where future projections are concerned.

Mr Hon Sui Sen: Anyway I agree with the Member on the need for character in our young people and for the need to develop their moral fibre. I hope our young people will listen to his exhortations. I also agree that we should deplore the tendency that we have of extolling our achievements in the press. I deplore also with him the effect on our youth of these rather vainglorious assertions of our high growth rates and other matters. The Singapore ego is pretty well developed.

I also agree with the Member for Katong on the development of character in our people, not only because I believe, like many people concerned with economic development, that the work ethic is a much envied advantage of certain societies but also because of the intrinsic value of character-building.

The next Member who spoke on growth and prospects was the Member for Moulmein who was inclined to take the sombre aspects of our future prospects. I hope the younger generation was listening when he urged them to face the challenge and accept the hardships that the older generation did in the past. I think most of us here are members of the older generation.

A considerable number of other speakers spoke on this particular topic. The Member for Serangoon Gardens was, I believe, satisfied with the performance of 4,1% in 1975 and hoped that it will inspire confidence. I certainly hope that this will be the case. The other Members I have got down as having spoken on his subject are the Members for Jalan Kayu, Anson. Boon Teck, Jurong and Potong Pasir. I do not have full details of what they have said. In any case. I do not have the time to reply to them in view of the limited time I have at my disposal.

On the next topic. I listened with pleasure to the Member for Potong Pasir when he spoke on his special subject, the consumer and consumer prices. I would like to commend CASE on its recent work in bringing down the consumer prices in hawker foods, as well as other Members in this House who have also been very actively concerned.

Another topic which I have written down here is industrialisation and this appeared to have caught the interest of many Members. The need for further development of our industrialisation programme appears to be generally agreed. I appreciate the analysis of the Member for Telok Blangah of the problem now facing Singapore. He calls it, and quite rightly. "another crisis". He spoke of the retrenchment and the unemployment in 1975 and even in 1976, although I must say that we have had a somewhat more optimistic report for February this year. This, he thought, should be met by all the manufacturers, entrepreneurs, civil servants and workers getting together to overcome this problem. He called for every sector of our nation to come together. At the same time he thought the industrialists should be assisted by being given tariffs and also preferential trading arrangements, perhaps in ASEAN, At the same time manufacturers also must be tough in trying to get new markets. I cannot agree more with this message because in my Budget Statement I also indicated the same attitudes.

The same message was also given by the Member for Whampoa who suggested the need for the economy to stand up to the rigours of the changing conditions and of workers and management to redouble their efforts. He spoke also of the decline in investment and the need to stimulate this, The Member for Jalan Kayu also agreed to the need for managerial and entrepreneurial improvement but he also emphasised the need for the civil service to do likewise.

A number of the Members spoke on topics related to industrialisation. For example, the Member for Bukit Ho Swee spoke of increasing productivity through incentive schemes; the Member for Potong Pasir spoke of the need for investment and productivity; the Member for Thomson spoke of the prospects of industrialisation by the fact that there were lower investment, greater instability in the region and other difficulties, including wages policy.

A number of Members spoke on the manpower unit and manpower training. The Member for Kim Seng suggested that there should be a Central Manpower Research Unit. I can assure the Member that the manpower research which is needed for such planning is centred in the Ministry of Finance, but we of course always welcome whatever assistance we can get from any quarter. There are other needs for manpower planning in the various Ministries (of course, in the University also) such as the Health Ministry for their own purposes; the Ministry of Labour, for unemployment statistics, would of course have their own unit. But all statistical data are coordinated by the Statistics Department and our Statistical Commission.

The Member for Serangoon Gardens spoke of the need for adequate manpower planning as well as of manpower training. He displayed some disquiet on manpower training in the Industrial Training Board, and he also spoke of the reluctance of our young to accept employment in industry. The Member for Thomson also spoke of a systematic encouragement of training skills, As can be seen from my Budget Statement, I agree with most or all of these statements. I think they will be pursued by my Ministry in promoting industrialisation.

A more controversial item is the subject of wages policy. The Member for Jalan Kayu disputed my statement that the Budget Statement was not an exciting statement; especially in regard to wages policy it would cause some feeling. He endorsed the policy which I think has been agreed by the Minister for Labour, myself and the Secretary-General of NTUC, He suggested the need for keeping inflation down but warned against higher taxes and its effect on the cost of living.

The Member for Boon Teck also spoke very strongly. on this policy and the need of training in skill intensive projects and praised the support of the workers towards Government. He referred to my comments on the proliferation of non-wage items and the effect on competition. With regard to funeral benefits, among other things, he suggested that this was desirable where wages are inadequate. I accept that allowances and benefits must be considered with the wages in judging whether the whole is adequate.

The Member for Bukit Ho Swee also spoke on wages policy and suggested that a full study and a full consultation with workers should be made on this matter. I accept that the NTUC should be consulted and I think they have been, but the National Wages Council can also be a channel for such consultation. In such a forum the figures he quotes on jobs and on workers' income can be studied as to adequacy. In the same forum also, the comparison with executive benefits can also be discussed with regard to its effect on cost. I am glad, however, that all Members are prepared to consider the need for examination of the wages policy in order to ensure the competitiveness of our industries.

Related to industrialisation were a number of topics. One was exports. Only one Member, I am not quite sure which, spoke on our Export Credit Insurance Corporation, although quite a number of other Members appreciated the need for more export markets being found,

The Member for Potong Pasir spoke of an unrelated subject, which is that of tourists in our economic development programme. He mentioned unethical practices. May I assure him that the problem is one which has engaged our close attention, as are the malpractices by taxi drivers and others.

The Member for Aljunied touched upon the problem of brain-drain from Singapore. I do not think that this particular problem is at present of a sufficiently serious nature for us to discuss it as in our financial policy.

I come to the comments on expenditure. The Member for Jalan Kayu spoke of the shortfall in expenditure against amounts voted, and suggested that' there appeared to be an urgent need for a machinery to be adequately geared for this work, This is, of course, one of my daily concerns - how to ensure that development expenditure for anti-recessionary measures can be stimulated. He commented also on the dominant position of the public sector and said that the original objective of not to compete with the private sector was being forgotten. I myself would welcome greater activity in the private sector, particularly in these recessionary times. In fact, the stimulation of public expenditure has been made mainly because the response from the private sector has been inadequate.

I think I will cut short the remarks on various other matters and come to the main topic of interest, which was taxes. Many Members appeared to prefer the agony of taxes to be imposed on definite times, particularly during the time of the Budget. I cannot give any assurance that Budget time will be the only time when taxes will be imposed.

I have a fairly full reply to the Member for Punggol on the necessity for not giving further allowances in personal and earned income and also on CPF allowances. I think these are really the strategies of a financial policy and I am sure there is another opportunity to debate this question. The main reason is that, as he has already anticipated, a small increase of $1,000 in personal or earned income relief would cause the Government to sacrifice about $26 million per annum in revenue. I am afraid I am unable to spare that kind of money. Our objective should be an increase in individual income so that the tax burden for all our social and security services are borne by as many people as possible to spread the load. As it is, only 236,000 or 26% out of a work-force of about 900.000 workers pay personal income tax, but the benefit of Government services are enjoyed by all. In other countries, for example, the United States, a higher proportion of the workforce pays tax. In the US, there are 84 million taxpayers, or 90% out of a workforce of about 93 million. In Australia there are 5.6 million taxpayers, or 95% out of a workforce of about 5.9 million. In Japan there are 31 million taxpayers, or 60% out of a workforce of about 52 million.

Question put, and agreed to.

Resolved.

That Parliament approves the financial policy of the Government for the financial year 1st April, 1976 to 31st March, 1977.