ANNUAL BUDGET STATEMENT

Order read for Resumption of Debate on Question [28th February, 1977], "That Parliament approves the financial policy of the Government for the financial year 1st April, 1977 to 31st March, 1978." -- [Minister for Finance].

Question again proposed.

3.18 p.m.

Mr Teong Eng Siong (Sembawang): (In Mandarin): I beg to support the Motion in the name of the Finance Minister. I would now like to continue with my speech which was interrupted at the adjournment last Friday. I was saying that Singapore has been transformed into a productive industrial country providing employment for the greater part of our population. This shows that our economy is on the way to recovery. On industrial training, the Minister pointed out that at the end of last year there were 8,483 full-time students and 3,373 part-time students enrolled in ITB's training courses. There was also an increase in the number of trainees trained under the various EDB training schemes. The training included mechanical, electrical and electronic courses. Of course, all these technical and mechanical training courses are necessary. If the courses are conducted properly new blood will be injected into our industrial technical reservoir for industrialisation.

However, I have heard of certain adverse reports on such training schemes. For example, there is a shortage of instructors and that the contents of the courses are not very relevant to actual needs. I do not know whether there is any truth in the rumours. But since the Government has spent a lot of money, manpower and resources on these training schemes. I would like to ask whether such schemes have reaped favourable results where the trainees have been deployed in our industries and whether the skills have been put to proper use, otherwise what is learned is of no practical use and is a waste of public funds. Another question is whether the training institutes keep a record of employment statistics of those trainees relevant to their skills. I would like the Minister to inform the House of the situation in detail.

On Industrial Development, the Minister said that:

`Large unused production capacity and high unemployment in the industrialised countries no doubt affected the drop in new investments from overseas. The task of investment promotion for the coming year remains difficult.'

Such analysis is quite correct. The Minister also laid emphasis on promotion efforts to be made in the United States. Japan and Western Europe. This shows that the Government is quite determined in developing our economy. Of course, in order to further develop our economy, we should have political stability and harmonious industrial relations which will bring about a suitable investment climate. Apart from this, we should also formulate more favourable terms for investment to attract investors from Southeast Asia and other parts of the world.

There is a need to review our incentive measures. For example, there is the stipulation that foreign investors who have resided in Singapore for five years will be entitled to apply for citizenship. But, according to my knowledge, not many foreign investors have obtained citizenship. This would give rise to doubts among the foreign investors and shake the confidence of would-be investors. My question is whether the Minister is aware of the manner in which applications for citizenship by such people are dealt with and whether the incentive measures are properly carried out by the proper authorities. Has the Registry of Citizenship considered the policy that we should give incentives and encouragement to attract foreign investors? I reckon the Minister for Finance should be concerned about this matter. In addition, when foreign investors want to purchase properties or send their children to school, or have other needs, do we make it easy for them to do so? I think these are important factors that will induce foreign investors to come and invest here. Though these are matters of detail to be carried out by civil servants. I hope the Minister will see to it that our civil servants do not tarnish the good image of Singapore as a centre for investment.

The Minister in the past few years has on several occasions emphasised the need for diversification in our economy in order to overcome problems due to economic recession. Such a statement is correct. However, apart from industrial diversification, we should also not neglect the development in farming and fishery.

Another question is that in the Budget statement, according to the Minister, there is a drop of 20% in the private building industry. This is due to the completion of office blocks and shopping centres and the slump in industrial building and the shipyard investment. There is a drop of 3% in private housing. What are the causes? In the beginning of 1970, the private building sector had experienced a period of prosperity and had played quite an important role in our economic development. However, in the last few years there has been a slump in this sector. What are the reasons? I think the Minister should instruct the relevant authorities to get to the bottom of the reasons for such slump in the private building industry so as to find a remedy for such defects, and in order to resuscitate the private building industry to continue contributing towards our plural economy.

On the farming industry, for example, the growing of orchids and rearing of tropical fish, which are two big foreign exchange earners, however, I have not seen any effort being made by the Primary Production Department to assist these two industries. What I mean is that the Primary Production Department should give them greater assistance and encouragement and that there should be a liaison between the Department and the two industries to study and plan for the development of these two industries and to allot more land to enable them to expand and earn more foreign exchange for our Republic. We should not leave these two industries to struggle and fend for themselves. If Members of Parliament in this House were to raise such a question, the Minister concerned would always say, "These are excellent suggestions and that the Ministry will consider such suggestions", but what has been the outcome? Nothing has been done. Is this correct? Our country is an insular one, surrounded by sea. I believe there is potentiality for developing our marine fishing industry. For example, large quantities of fish, prawns and crabs can be reared in our numerous islands. If the fishermen have an outlet in employment, they will not be obliged to resort to hawking as a means of livelihood. Many kelongs have been abolished. So these people were forced to take up hawking. Therefore, the development of fishery will save us tens of millions of dollars in foreign exchange. So, why not develop it. What is the answer? I would like the Minister to tell this House.

Sir, the four tax concessions mentioned in the Budget statement will benefit many people, particularly the first two tax concessions, i.e, the increase in the exemption of tax on estate duty and the reduction of tax on resident pensioners. This goes to show that the Government has the interest of the middle and lower income groups of the people at heart. These measures are laudable.

On Economic Development, the Minister has put forward positive plans. For example, there is the further strengthening of economic cooperation among the Asian countries, further effort in promoting international trade and further effort to make Singapore an international financial centre. These are all constructive and practical measures and are good guidelines for the development of our economy.

On the whole, the Budget before the House is a body of economic policies imbued with foresight and depth and is well defined. I agree with the Minister when he says the weather ahead is fine and the Ship of State is in good shape. As long as the people continue to be hardworking and self-reliant and cooperate closely with the Government, our Ship of State will sail forward smoothly and steadily.

Sir, I beg to support the Motion.

3.30 p.m.

Mr Goh Chok Tong (Marine Parade): Mr Speaker, Sir, I rise to speak with some trepidation, as not only do I stand the risk of being bruised by superior counter fire power, but also the possibility of being ruled out of order for repetition! But conscience speaks louder than fear and it shall be my guide. I am going to speak on a subject which has been raised by several Members and commented on by the Minister for Finance during the debate on the President's Address a few weeks ago, as I feel that the argument did not thrust deep enough and the answer offered did not parry the attack sufficiently.

Sir, some of my colleagues in this House have argued for an increase in personal and earned income reliefs from income tax on the ground that the quantum of reliefs was fixed about 30 years ago whereas the cost of living has risen significantly since then, particularly over the last few years. This argument was basically sound but it was not carried far enough. The Minister for Finance warded off this argument by saying that an increase of $1,000 in personal reliefs would mean a loss in Government revenue of some $26 million and a narrowing of the tax base, i.e, the number of people paying income tax. This line of defence is correct but not impregnable. He also added that while the cost of living has gone up, so has the per capita income which increases the ability of the taxpayer to pay income tax. But is this really so?

First, let us take the $26 million potential loss. $26 million is a lot of money from an individual's viewpoint, but what is its significance to the Government? Income tax expected to be collected in the fiscal year 1977 amounts to $1.38 billion, and $26 million is only 1.9% of this. But if we relate the $26 million to income collected from individuals only, and not companies, the percentage will probably go up to about 8-10%. This is, of course, a significant percentage. The Minister, therefore, has a good defence here, but only fairly.

As for the shrinkage of the tax base, I agree it is salutary for the population to be reminded that the services provided by the Government must be paid for. But I would simply ask at this stage whether the affected taxpayers at the lower income scale should be paying tax in the first place! The answer will depend on whether their real income has actually gone up since the time when the present quantum of personal reliefs was originally worked out.

When I said my colleagues' argument did not cut deep enough, I did not mean to be disrespectful. I was simply having in mind their not quantifying an argument which could be quantified. Now I have done this, and it shows some disturbing results.

As we are discussing income tax, the relevant measure for inflation is the Consumer Price Index and not the Gross Domestic Product deflator. The Consumer Price Index as at December 1976 was 144.9, down from a peak of 150 in February 1975. Its base period is November 1972. By coincidence, the National Wages Council made its first promulgation in 1972. The recommended wage increase of 8% for that year. however, will be ignored by us in our calculations so that we have a common base year of 1972. In 1973 the NWC award was 9%, with certain offsettings. In 1974, the recommended annual increment was $40 plus 6% pIus annual increment or $40 plus 10% for those without annual increment. Let us assume an average increase of 15% for that year. to be on the generous side. In 1975 the NWC increment was 6% and in 1976 7%. The employee's salary is, therefore, being raised by 42% from 1972 to 1976, on a compounded basis. This is less than the increase of 45% in the Consumer Price Index. Thus, real income has actually fallen by 2.1% despite the passage of time and NWC increments and despite the growth in per capita GDP.

Now, let us examine the effects of inflation and the NWC increase on taxes. I have prepared a table based on three income levels: Case A refers to the lower income group with a monthly salary of $500; Case B is for the middle income group with a monthly salary of $1,500; and Case C the higher income group earning a monthly salary of $4,000. These are income levels in 1972, our base year. Sir, I shall not bother the House with the details of the calculations which I shall attach as an Appendix* to my speech for purpose of recording in the Hansard, but only give the results of the analysis. On the basis of a four-member family and the personal reliefs as allowed, and adjusting the 1976 incomes of these three groups (the 1976 income has been increased by 42% from 1972) to income at 1972 prices, we find that while monetary income has grown by 42%, disposable income in real terms (income after tax at 1972 prices) has actually decreased by 3.5% for Case A, 6.8% for Case B and 11.8% for Case C as opposed to a fall of 2.1% before tax. The average tax rate for the three cases, i.e. tax payable as a percentage of income, has jumped from a negligible 0.03% to 1 .5% for Case A, the lower income group, from 5.4% to 10.1% for Case B, the middle income group, and 19.9% to 27.9% for Case C, the higher income group. But now, let me give you the real shocker. In current prices, income has increased by 42% in the four-year APPENDIX - COMPARISON OF TAX LIABILITIES AND DISPOSABLE INCOME BETWEEN 1972 AND 1976 (Cols. 907 - 908) period 1972 to 1976, but tax liability has increased by 99% for Case C, 165% for Case B and 6950% for Case A! Sir, I have talked of current prices and real income but in truth I am not a "real" economist. That distinction belongs to my better qualified colleagues from the other side of the House, but when the taxman bites I can feel real pain.

Mr Speaker, Sir, I would not have been so painstaking in trying to quantify the taxman's bite but for an ominous note in page 2 of the Memorandum on the Main and Development Estimates of Singapore. I quote:

`In FY 76 income tax collections are expected to reach $1,200.0 million which represents a growth of only 34% over the actual receipts for the previous financial year. The current growth rate is by far the lowest since FY 71 when the growth rates ranged between 24.3 to 52.8%. The present low growth rate is largely attributable to the slow economic growth in the preceding year. Also, several tax concessions have been granted recently but tax rates have remained unchanged for some years.'

I repeat, "tax rates have remained unchanged for some years." Sir, before our tax boys get any ideas, I submit that tax rates must not be changed upwards in the next few years so long as the Minister expects inflation to take place at about 5-6% per annum, as he informed us on 24th February.

I have cautioned earlier in the debate on the President's Address that whilst inflation may be good for the businessman, it can crush the poor and the salaried workers. I repeat that warning. The severe beating taxpayers have been given despite a rise in monetary income is because inflation increases monetary earnings and forces it upwards into the higher tax brackets of a progressive income tax structure. I have already demonstrated its disastrous effect on both the lower income and the higher income groups. We have seen that the biggest percentage increase in tax liability comes at the lower end of the income scale, while the tax-bite gets progressively bigger with income increases. The distribution of tax burden by income classes as originally envisaged is, therefore, altered in the process of inflationary increases in income with `See Appendix II, cols 907-8 unchanged tax rates and personal reliefs. I wonder if the Minister for Finance is aware of this.

Sir, the underlying assumption of a progressive tax structure is constancy in the purchasing power of money. If the purchasing power of money changes rapidly, the tax structure and personal reliefs must be reviewed. I am not asking at this stage for a lowering of tax rates as Government must raise enough revenue to finance its ordinary and development expenditures, besides having to build up reserves for a rainy day. Like the Member for Jalan Kayu, all I am asking is that a thorough review be carried out to assess the damaging work of the unseen, unwelcome and unfeeling tax-man - inflation - and to find a solution to counter it. With due respect to the Minister for Finance, I think all of us tax-payers have been diddled, not by the Minister, but by inflation.

Let me ask, Sir, have we built a case for personal reliefs to be increased by, say, $1,000? I submit we have if the quantum of personal reliefs as originally allowed in 1 948 is intended to apply in real terms to today's living environment. Some countries like Canada have introduced indexation to income tax reliefs to ensure that these reliefs remain meaningful when cost of living goes up. I suggest the Ministry of Finance study this possibility.

Let me briefly buttress our argument for a tax rebate - for that is what it is if personal reliefs are increased - with economic arguments. The Government has vowed to make the economy grow fast again, at least 6-8% in real terms. The Government has also emphasized the desirability of keeping costs down, including wages. First, if personal reliefs are increased by $1,000, the tax loss to Government is $26 million, By the same token, the money pumped into the economy is $26 million, assuming this entire amount is spent by the recipients. This should help to stimulate the economy. With economic growth, the tax collections should increase and hence the ultimate tax loss to Government will be less than $26 million. The tax rebate of $26 million will not be inflationary as we are an open economy. It is instead expansionary.

Second, to the individuals it is real disposable income that matters, not salary, not even take-home pay. If the real disposable income is inadequate to sustain a minimum expected level of living, there will be pressure by employees to have their wages increased. Tax is an important element of cost. So long as the Government can afford it, it is better to have as low a tax rate as possible so that the overall wage required by an employee will not be artificially pushed up. It is better to give a tax rebate, assuming Government can afford it, and have a lower NWC annual increase for the taxpayers who benefit from such a rebate, than to give a higher NWC annual increase in order to achieve the same real disposable income. The end result is lower labour costs with the same real purchasing power after tax.

This leads us to the final tantalizing question. Can the Government afford to give away $26 million? I shall leave it to the Minister for Finance to answer the question!

3.45 p.m.

Mr P. Govindaswamy: Mr Speaker, Sir. this year again we see a near painless budget being introduced by the Finance Minister. My repeating this is necessary, although it may sound like a "cliche", when other countries of the world are suffering from inflation and introducing taxes that cut deeply into the wage-earners pocket, we have overcome this problem through an efficient, honest Government, and an industrious people.

Although only two existing taxes have been increased slightly, they are justified in the light of the four tax concessions that are being introduced The tax increases are meant to lessen the cost of our development expenditure and they are non-essential items which will cost only a little extra for a booze or a puff.

The concession in estate duty and the concession on tax for pensioners are long overdue, Home ownership will become a practical reality and not a source of worry to a family that suddenly loses its breadwinner. Pensioners will sigh with relief. considering that too many of them have seen a continuous erosion of their pension through inflation in commodity prices.

The tax concession on earnings from the Asian Dollar Market operations and on reinsurance business will further strengthen Singapore as a financial centre.

Although this modest budget is the result of the diligence and excellent planning of our Finance Minister, however, we must thank our lucky stars that the world has not suffered too much from inflation in 1 976. We should keep our fingers crossed and may we offer prayers and hope that the present dispute among the OPEC countries will not result in another world recession. The people of Singapore appreciate a great deal the Government's anti-profiteering measures which have controlled commodity prices a great deal. However, continuous vigilance is necessary as profiteering elements are only waiting to make a quick buck, given the slightest opportunity.

Sir, we are getting the tourists that we badly need. However, I wonder whether the infrastructure is ready to meet this influx of tourists. Too often there have been complaints from tourists about poor taxi services at the airport, poor bus transport system for tours offered by tour companies and, worst of all, cheating by some taxi drivers and shopkeepers. What measures are being taken to control these anti-social elements who bring a bad name for Singapore? It must not be forgotten that tourism is an important source of foreign exchange.

It is good to hear that Singapore will probably become a convention centre. However, there seems to be little liaison among the hotels to ensure that convention business is evenly distributed among them. In developing tourism and encouraging tourists, we notice that quite often the local people are forgotten in the use of facilities meant for tourists.

Sir, according to the forecast, Singapore's performance will be slowed down this year because of external circumstances. However, we too can adjust to these circumstances by conserving our expenditure in certain fields. There is too much wastage in personnel, material and energy in too many departments. For example, street lighting is changed too often because of modification, alterations, etc., wastage in stationery because of unnecessary correspondence, and too many persons doing a simple job such as installing a gas cooker in a home, etc. All this and many more can be trimmed. Let us cut our coat according to our cloth.

Sir, Singapore has been considered a brain centre. We train people for the various services. But, of late, in the last few years particularly, we have seen too many people migrating to other countries. We will be like the proverbial ostrich that buries its head in the sand if we just say "Good riddance to bad rubbish". Have we found the root cause of migration? Not all of them migrate because the grass is greener on the other side. Do people with the "brains" migrate because of our educational system, or is it because of job dissatisfaction, or is it because financially the jobs are non-remunerative, or is it because they have been by-passed in a promotion exercise by persons who should not have been there in the first place? Let us find the causes and remedy the situation so as to retain our brains here.

Sir, of late, there has been a lot of communist infiltration in Singapore through their lackeys. No doubt the ISD is doing a good job tracking down these traitors in Singapore. But then the work of the ISD could be supplemented by a "Board" which could check infiltration by communist agents, particularly in the Army, the schools and the tertiary institutions. No doubt a few have been exposed, but then, like a cancerous growth, there are many who have not been apprehended yet.

Turning to a matter relating to Finance, I wish to bring to the attention of this House the poor telephone service in Government departments and statutory boards. Many departments have antiquated switch-boards, and it is practically impossible to telephone through. Most of the time we find that no one answers the call. In the world of business, time is money. To a businessman who cannot telephone through to a Government department means time wasted and money lost. It is time we did something to this part of the service, although we may be proud of our 374,000 lines. A serious study should be made to rectify this anomaly, either to increase the staff, equipment or lines, whatever it may be.

Sir, rewards to efficient workers are commendable. How is productivity measured at present? Has the National Productivity Board drawn up guidelines on the output per worker in industries? The lower income group workers, particularly the daily rated, find it extremely difficult to meet their expenses. Productivity-wise, some of the output of the daily-rated workers is greater than the factory workers. Vet the factory workers may get more for less effort done.

As for the civil servant, promotions are based on merit and not on allocated grades of appointment. It is a wise move, but what safeguards are there for aspiring civil servants who cannot be promoted because of their superior's attitudes or bias? Unfortunately some civil servants have been in acting posts for too long, and they gain neither financial remuneration nor peace of mind, for they do not know whether they will be promoted or even demoted.

Sir, in the civil service the idea of reduced-leave allowance was introduced more or less to help the officer whose annual leave was forfeited because of a need for their valuable services in the office. However, what the Finance Ministry has done to retain the service of civil servants is being undone by the Ministry of Defence by its compulsory annual in-camp training of officers in the national service. Valuable manpower is lost during these annual in-camp training sessions, and sometimes the absence of a badly needed officer can upset work in an office and bring about a chain reaction of indecisions. Precious time and money is lost through badly organised and conducted in-camp training sessions.

Sir, our civil service is commendably efficient. That is the view of the general public of Singapore. Unfortunately there are some black sheep in the civil service who through their actions bring disrepute to the departments concerned and thereby create frustrations to the public at large.

Although courtesy is a by-word, there are some who show courtesy without intending to be courteous. Casting commands and unsmiling faces of officers who deal with the public bring about a picture of authority without humanity. The human element of sympathy and politeness is missing in a number of civil servants who have daily dealings with the public, and above all in dealings among themselves. Perhaps a campaign "Courtesy begets courtesy" should be introduced in the civil service.

It is pointless to point out the efficiency of our civil service if our civil servants end up as clock watchers. In most departments the staff do not serve the public beyond the stipulated times. Travelling in Singapore roads is not easy. It is time-consuming and, therefore, when a person has travelled miles just to pay a fee to a particular office is not served when he is only 30 seconds late, shows a lack of humanity by the department. It only earns disrepute.

Sir, since those above 60 years of age, forming 6.6% of the population, are people who are likely to get unwell more often due to the degenerating process, it is time we considered the plight of these people. Our hospital charges are not low to this group of people. Most of them are not well off. Could not a reduced rate of fees be introduced to these people, so that their meagre earnings will not be eaten away by hospital charges?

Sir, a picture of efficiency, neatness, and honesty in the civil service could be extended further. Some departments of the same ministry are scattered all over the island. These can be centralised, thereby reducing the manpower. Furthermore, the buildings of some Ministries and Government departments could be "touched" up. The Health Ministry in Palmer Road, which is supposed to care after the sick, is an example of a sickly looking building.

Finally, it is the hope of the people of Singapore that our wise Finance Minister will continue to introduce future budgets with less pain and no new taxes. Let us ride the waves of "turbulence in international economy" smoothly and comfortably, as the people have shown their faith in a PAP Singapore.

There is, Sir, a Tamil poet who wrote a poem which reads lyarralum Eattalum Kathalum Katha Vakuthalum Vallathu Arasu

This most famous poet wrote this poem 2,000 years ago, on how to run the government. The poem contains two lines only, but the explanation may take one full page. The translation is: To explore better ways for revenue, To save and safeguard the same, And to spend it wisely, Is the duty of the government.

4.00 p.m.

Mr Sia Khoon Seong (Moulmein): Mr Speaker, Sir, the effectiveness and soundness of the Finance Minister's overall economic policies and planning as set out in the Budget Estimates for the coming fiscal year is clear. The economic programme for the next fiscal year, after all, is an extension of the Economic Strategy Programme for the 1970's, announced by him in this House some five years ago.

The past five years is now part of history, but it is a history that bears eloquent testimony to the correctness and soundness of our approaches in economic planning and development. We have withstood the ravages of severe world economic crises, and our GNP indicators show a modest economic growth, despite those crises.

I have noticed, however, that although more and more emphasis is correctly being given to our manpower development programmes for the training of our younger workers to gain more specialised skills, no mention is made of any attempt to tap and develop the fairly large reservoir of the unskilled and semi-skilled labour force in Singapore. Attempts were made in the past to tap the substantial women labour force in the housing estates, etc., but I wonder how successful these attempts have been. There are thousands of unemployed Singaporeans still on the Employment Register, and in addition, there are thousands of others not on the Labour Ministry's Employment Register. All of them, whether officially registered as unemployed or not, are actively and desperately seeking jobs so that they can maintain their families. Putting the blame on the job-seekers and accusing them of being choosy may be a convenient and neat way of dismissing any discussion on a troublesome issue; but we have still to live with the problem of the unemployed in our midst. True, some unemployed deservedly bear the blame for rejecting jobs offered to them. But there are also those who do not get any offer of jobs. These are the persons that factories and companies will reject outright in their labour recruitment. These are persons who are above the age of 40 years and who may be illiterate.

Mr Speaker, Sir, there are a large number of workers who constituted part of the workforce 20 or more years ago. These persons came into the employment market in an era where there was little industrialisation in Singapore and when the requirements were the artisan or the semi-skilled worker. They were the products of our educational system at that time and for various social and economic reasons they had to leave school at an early age and take up employment either as apprentices or as unskilled labour. The demand for skilled workers at that point of time was very limited and so they had no alternative but to go to work at a very young age. In addition, there was practically no opportunity for them to pursue higher education because they came from poor families and at that time there was little free education or scholarships to enable them to pursue higher skills. Their technical or academic qualifications, therefore, were very low but they fulfilled the need at that time.

In the last 17 years, as Singapore industrialised, new skills were required and the tendency is that higher standards of academic performance are required from applicants aspiring to train in the skills required for our industry, especially higher technology industries. Therefore, this large pool of workers are unable to find employment, although many of them are quite efficient. If they are given some form of formal training to equip them with the skills required for modern industry, they will do very well because they have gone through the hard times of the fifties and will therefore be willing to work assiduously for a living. It is very easy to dismiss them and say that they are underqualified, but they were qualified at a time when Singapore needed them. And they are now with us. Something, therefore, has to be done to equip them with skills to find employment especially as industry is crying for more skilled and dedicated workers.

Mr Speaker, Sir, it is not that these unfortunate persons are being choosy, but that the emphasis has been placed on the new worker with a higher academic standard. It is not to say that we do not need workers of higher educational standards, but there is also a need and a place for these older workers.

Employers of certain establishments have imposed unduly high or exacting requirements of applicants in respect of qualifications or personal appearance, or both. Let me illustrate this with examples. Take the case of the hotel establishments in their recruitment of staff. The girls they recruit must not only possess certain minimum academic qualifications but they must also be tall and have a winsome smile, long pretty hair, and be able to charm the customers. In fact, they must have all the attributes to induce the male customers to return to the warm and friendly atmosphere of the respective hotel establishments. Even for the job of house-keeping similar attributes, but only at a slightly lower level, are also expected of the applicants.

According to my union source, a few years ago even one local hotel went as far as retrenching the older female employees under some pretext and later recruited younger girls to fill the jobs left vacant as the result of the retrenchment. So at once, all those hardworking mothers, who are able to be house-keepers in a hotel and who wish to supplement their family income by working, will find themselves out of luck if they wish to seek the simple job of house-keeper in a hotel, although they may be much more efficient in view of their long experience in their own homes.

Even Government establishments are guilty of adopting such a choosy attitude. At one time, to be a car-park attendant, whose job is only a simple thing like issuing a receipt, an applicant had to possess, at least a Secondary 2 qualification and be between 18 and 25 years old. Luckily, through the efforts of the Ministry of Labour, this excessive stipulation has been removed. Now one needs only to have a Primary 6 qualification and may even be over 30 years of age to be a car-park attendant. I can go on listing examples to show that employers have become choosy. In view of the ease in employing certain categories of foreign workers because of our present policy on the issue of work permits, employers can continue to be choosy. But what happens to many of the Singaporeans, who are less endowed, either physically or academically? Are they to remain forever at a disadvantage?

I seriously doubt that we are doing enough or as much as we can to help the unemployed who are unskilled and semiskilled to get jobs. Obviously, something more is needed than just registering their names in the Employment Register of the Labour Ministry in the hope that employers will offer them jobs. Services such as those offered by private employment agencies in filtering or screening out unsuitable or inappropriate applicants should be provided by the Ministry. Or are we just concentrating on the training of more persons with better academic qualifications or with highly specialised skills and catering for the interest of such persons only? Is there an overall national manpower planning and development programme? Even if there is, is it effectively and efficiently co-ordinated and centrally directed? Or do we just leave the various ministries and institutions to go on in their separate and merry ways?

At the present moment, one gets the impression that each institution of higher learning has its own idea of what courses it should provide, without any due consideration to our overall national manpower requirements. The Economic Development Board runs its own technical training programmes together with certain multi-national companies. Then there is the Industrial Training Board with a separate set of objectives and priorities. Soon the Education Ministry will introduce its own Junior Apprenticeship Training Scheme. Even the MINDEF joins in this multiplicity of training schemes. I would, therefore. like to enquire how many of these training schemes are being duplicated and, therefore, causing an unnecessary wastage of training resources, and whether we are producing too many of one kind and too little of another kind.

It seems to be a matter of irrefutable, logical and grave importance that, in a small island like Singapore where human power is the only resource, we should have a comprehensive and properly co-ordinated manpower planning and development programme.

It is imperative that we do not produce a surfeit of highly skilled or specialised personnel and at the same time completely neglect the unskilled or semi-skilled unemployed. For in the end, we may not be able to satisfy the heightened expectations of the highly skilled personnel or the basic desire of the unskilled for any jobs, with the result all of them will be frustrated and demoralised,

It is imperative that in our overall manpower planning and development, the unskilled and semi-skilled must be taken into account. In our situation today, this is all the more important, since we must, at one time or the other, resolve the problem of the unusually large number of work permit holders who may pose serious problems in political and social terms in time to come.

4.11 p.m.

Mr Ho Kah Leong (Jurong): (In Mandarin): Mr Speaker, Sir, in his financial statement on the 28th of last month, the Hon. Minister for Finance made a very significant conclusion to the effect that:

`the weather is getting fine and fair and our Ship of State is in good shape. The command should therefore be "Steady as she goes."'

As a matter of fact, our Ship of State, the Republic of Singapore, has been moving steadily all the time as a result of our very steady helmsman and pragmatic policies, and that is the reason for the social and economic progress that we are making, as the saying goes. "with care a ship can sail for ten thousand years". With care and caution, the helmsman of our Ship of State will be able to weather through difficult times in a turbulent and unpredictable international situation.

Sir, in the financial statement, the Minister did not mention any major tax increases. Instead he has offered four tax concessions. All these are indications to show the soundness of our economy and this should increase international confidence in Singapore. To the people of Singapore, this is again a mild budget. If there are no unreasonable tax increases or revision of tariffs in the course of the year, I believe our people will be able to go through another peaceful year comfortably.

Mr Speaker, Sir, in the budget the Government has provided a loan of $245.9 million for the Jurong Town Corporation for the further development of Jurong and other industrial estates. Jurong has been fortunate enough to have been chosen for industrialisation and it has become an internationally known industrial area in Singapore. This is an honour for the Jurong people. But how many people realise the hardship and the price the Jurong people have to pay for this industrial development? How many people realise the losses and the inconvenience suffered by the people of Jurong in the course and as a result of industrialisation?

Sir, 10 private bus companies have finally succeeded to merge into one single bus company for the purpose of raising efficiency and providing better services to the people. But in the Government administration, there are different Government departments separately in charge of matters of the same nature. For example, there are several departments involved with hawkers, such as the Hawkers' Department in the Ministry of the Environment, the Housing and Development Board, the Jurong Town Corporation and the Port of Singapore Authority. Although the major policy may be the same, the manner in which such policy is executed or implemented may be different from department to department or from area to area. For example, in the same area, department A is in charge of some hawkers and markets and department B in charge of other markets and even department C in charge of yet some other markets or hawkers, with diverse regulations and methods. So there is no consistency in the implementation of the same policy. As a result of this inconsistency, there would be confusion or even a feeling of discrimination. In the field of building construction, we have the HDB, JTC and PSA, in charge of housing. The Housing Board is the largest housing agency in Singapore, with a lot of experience over the past decade. Other statutory boards cannot outdo the Housing Board in terms of costing, professional supervision or planning. If the 5-room flats in Boon Lay Garden and Teban Garden were built by the HDB. the price would not have been as high as $35,000. It might well be $30,000, as in the case of 5-room flats built by the H DB in other new towns. Again, if the flats in Boon Lay Garden were not built by the JTC but were built by the HDB, then there would not be lifts of different brands from different manufacturers resulting in frequent breakdowns, a shortage of spare parts, and other maintenance problems. Again, if the JTC did not build the executive flats, then the flats for the middle-income group would have been built by the HUDC and the purchasers in the middle-income group in Jurong would be able to use the CPF for the purchase of the flats, unlike the present where they are not allowed to use the CPF for the purchase of flats built by JTC. This is a very unfair situation. Because of this duplication and inconsistency, the people in Jurong have been deprived of their right to use CPF funds to buy their own houses.

Not only this, a lot of land in Jurong is earmarked for development purposes. The matter of resettlement is in the hands of the Resettlement Department under JTC, while the matter of adjudging who is a bona-fide farmer and who is not, is not made by the JTC but by the Primary Production Department in the Ministry of National Development. Because the Primary Production Department is not directly concerned with the development of the area, it takes its own sweet time to establish who are the bona-fide farmers and who are not, and because of the dispute in this matter the development plan is delayed. So these farmers have to stay put where they are. Last year, at the 20th km Jurong Road (now it comes under Boon Lay constituency) some farmers had to stay put because of the delay. Then, because of the rainy season at that time there was flooding. They again suffered losses because their livestock were drowned in the floods. Furthermore, these people affected by resettlement had to apply for shops and flats from the JTC in order to be eligible for concessions. Otherwise, if they apply to the HDB for such accommodation they will be treated like any other ordinary applicants. There are sufficient residential flats in housing estates under JTC. But the problem is that there is an inadequate supply of shophouses built by the JTC for allocation to these people affected by the resettlement schemes, thus causing a lot of problems.

I wonder whether the Government will consider unified control and management and do away with this duplication of duties and administration in order to raise efficiency and avoid unnecessary problems and trouble. That is, all the hawkers' problems should be centralised and dealt with by one central authority, the Hawkers Department; resettlement problems similarly handled by one centralised department; industrial problems for example, by the JTC, and housing matters by the HDB, We are talking about efficiency of the Government. We should not have unnecessary waste and duplication of our human resources and efforts. I hope the Minister will seriously consider these problems.

Sir, I support the financial policy of the Minister for Finance.

4.20 p.m.

Haji Sha'ari Bin Tadin (Bedok): Mr Speaker, Sir, I rise to join my other colleagues in support of the Budget Statement made by the Minister for Finance for the financial year 1977-78.

My colleagues spoke in high praise. They were greatly impressed by the presentation of the fiscal policy which, on the whole, gives a rather optimistic picture of our economic prospects. All these years, the Minister for Finance's Budget Statements have always been supported by facts and figures. This year is no exception. He has the Economic Survey to back him up.

Sir, although I am not competent enough to give an in-depth analysis of the economic prospects of our country. I would like to contribute some ideas by way of one or two observations. It is my hope that these observations and ideas would find a place in the various aspects of planning and strategy to make the nation an even better place to live in, to work in, and to conduct business in.

First of all, it is common knowledge that Singapore's success story has been, and is to a very large extent, due to its political stability and the pragmatic leadership of the PAP government, a government that has the foresight and the far-sightedness to chart troubled waters ahead, thereby enabling it to go through and overcome the many stormy seas lying in the path of the country's economic, social and political progress. We have been able to take positive and realistic measures that have helped us to come out of crisis after crisis in the recent past - the energy crisis, inflation, economic recession, etc. - relatively unscathed. In spite of the many world-wide problems, Singapore has been able to achieve commendable economic growth and development. In this respect, the part played by our efficient civil service should not be overlooked. The civil service has made its valuable contribution.

But what is most heartening is the part played by the people of Singapore at large. We have been able to keep wage increases, for example, to proportionate levels so that the situation would not get out of hand, thereby endangering the economic position of the country. This has been possible because of the cooperation of the people of Singapore. The close rapport the Government has been able to achieve with the people is, in many ways, the deciding factor. The recent General Elections, in which the PAP made a clean sweep, was ample testimony of the confidence and the rapport existing. The Government and the people, together, have proved Singapore's prophets of doom all wrong, all the way. Those who have written off Singapore, those who have tried to subvert the nation, those who have left the country because they thought we were doomed to sink, are now all red in the face with envy and embarrassment. These people are now having second thoughts.

The recent disclosures and confessions of G. Raman and his repentant colleagues are examples. They wanted to put Singapore in bad light internationally. They wanted to discredit the country. They did not want to see the nation make good, prosper and progress. They tried to subvert Singapore. We know now why reputable publications, which should have known better in the first place, like the Far Eastern Economic Review, the Financial Times, and others, were so critical of Singapore. But there will always be people like G. Raman and company who fall prey to the evil designs and machinations of foreigners and Euro-communists bent on seeing the downfall of the PAP and Singapore. They perpetrate acts which are both treacherous and traitorous. But they will not succeed. They will not succeed simply because they are acting against the interests of the people of Singapore as a whole, their well-being, their happiness, their future.

The future - what does it hold for us? A good one, I believe, if we together put our shoulders to the wheel. Looking at the prospects for the fiscal year 1977-78, as strategically outlined by the Minister for Finance, there appears to be five basic objectives - namely, manpower development, science and technology, infrastructure, taxation and promotion, and the measures to be taken by major industrialised countries to stimulate their economies by creating more employment. In this context, Singapore can confidently look to the future if we keep the present momentum. However, Singapore's future is, of course, not all a bed of roses. With higher standards of living, a better life, and greater affluence, there will be problem areas, particularly among the younger generation of the population. There will be changes in job attitudes. Expectations go higher each day. There will be the crave for better life-styles. All this can generate and coagulate into one big social evil. But it can be prevented. Youth tends to be restless, and this restlessness must not at any time be ignored. In our eagerness and anxiety to achieve something, we often stumble and fall over the most obvious. Therein lies the danger. And the young is one of our greatest assets. It can also turn out to be one of our greatest drawbacks, if we neglect it.

The young is a creature of many potentials and paradoxes. It is the country's source of manpower. It forms the sinews of the nation. It forms the future leadership. Yet it is ever so susceptible to influences and distractions: drugs, crime, political clutches, and other anti-social and anti-national behaviour and conduct. The distracted youth can, collectively, become both a de-stablising and a destructive force in society. But accorded the correct channels of communication and constructive activity, the young is undoubtedly a factor in the nation's favour. Given avenues of expression and performance areas that are conducive to productive results, our youth can be the fountain of life in Singapore's future. In short, youth has an important role to play in the affairs of the nation. This is amply demonstrated everywhere: where youth's role has been positive, the results have been most constructive; where its role has been negative, the consequences have been very destructive.

In this light, Sir, I would like to touch upon the subject of youth in Singapore. What are we doing for these young people? The primary establishment responsible for the right answer to this question appears to be the People's Association. It is acknowledged that the People's Association is doing a good job. But is it doing enough? That is the more important question. It is noticed that in many of the community centres, real activity is often conspicuously absent. They appear to be deserted most of the time. It will be interesting to know the actual response, both in terms of numbers and percentages, to programmes of activities that are planned by community centres. We know that more than half of our population are under 21 years of age. They form the core of our young. How many of them are attracted to the activities of the various community centres and the People's Association? I understand the figure is very small. Many activity-programmes look good on paper. But it is the areas of performance, participation and production of desired results that really count. How and where do we stand in this respect? It is a question worth pursuing at this stage of the country's progress, because it is important that we take stock, assess and evaluate the position, so that strength and weaknesses are brought to light. In this manner we can consolidate the good and eliminate the bad.

This question of youth is also directed to other areas, not just the People's Association. Several Ministries have close connection and association with youth and youth matters too. For example, the Ministry of Education is in the forefront in this regard. The Ministry of Social Affairs, as well as those of Home Affairs, Defence, Culture and Science and Technology, are all inextricably involved with the young. No doubt there are all kinds of activities going on in all these places; whether or not such activities are designed particularly for youth is another matter. Whether or not there is cohesion and proper planning and execution in these activities is another question. Whether or not there is a lot of unnecessary duplication and therefore manpower and time wastage is also worthwhile looking into.

The point I am making. Sir, is whether or not the question of co-ordination of youth activities has crossed the minds of the planners and programme-directors. Perhaps a Department of Youth or a Ministry of Youth would be the answer. Admittedly, this is not a new suggestion, but it is a fresh call for more thought and greater concern. The co ordination of youth affairs and youth matters is a vital aspect of our growing society, a society which is wide open to influences of all kinds, Singapore being what she is geographically, socially and economically. As I have stated earlier on, correct co-ordination and guidance of youth is of the utmost importance. The quality of our youth, its mentality. its attitudes, its responses, are all necessarily aspects of society the leadership has to be very concerned about. "Today's young people are to-morrow's leaders" -that, as it may, is a cliche. Nevertheless, a cliche with a tremendous lot of meaning and message in it. One misguided youth is a problem. A whole lot of misguided young people will be disastrous. It is therefore imperative that we, who are today's leaders, pay sufficient, and more, attention to this vital question of guiding and inculcating in the young, correct attitudes and responses through a concerted and co-ordinated youth programme, allowing at the same time, avenues of expression and criticism, so long as these are positive and constructive.

For, in the final analysis, Sir, the battleground lies in the mind. We have just seen abundant proof of this.

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

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

[Mr Speaker in the Chair]

Debate resumed.

Question again proposed.

Mr Tan Cheng San (Paya Lebar): (In Mandarin): Mr Speaker, Sir, I support the 1977-78 financial policy of the Government contained in a Motion moved by the 28th February, 1977.

When the world economy is slowly recovering, it is very correct for the Finance Minister to announce in his Budget for the new financial year measures to increase taxes on cigarettes and tobacco and liquor which are consumer goods, not daily necessities. In the field of technical and industrial training, the Government is emphasising the training of skills in the engineering trades, metal machining, and fabrication as well as on selected fields of precision engineering. This is a piece of good news to our workers, because through industrial and technical training the skills of our workers will be raised so that the products will be of a better quality. This in turn will raise their productivity and improve the workers' remuneration comparatively. Because of this, our workers with better skills, increased productivity, and increased income will be able to live a better life than before. On the other hand, because our products are of good quality and with increased productivity, our products will be able to compete better in the international markets, thus stimulating our economic growth. In order to meet the needs of our commerce and industry for their rapid growth the Government has allotted more land, expand communication network and increased our electricity capacity. This policy will directly promote our economic growth and help to solve the employment problem of our people. In the meantime, the Government is allocating land for civic organisations, such as churches, youth associations and others for them to build their headquarters or offices. Trade unions are also civic organisations. They have great responsibilities in respect of the economic development of our country.

When we look back to 1968 when the British military forces planned a withdrawal from Singapore, our economic prospect was then not at all optimistic and nobody could predict the fate that was facing us. However, under the able leadership of the PAP Government we have passed and overcome many an economic difficulty. In the interest of the nation and for the long-term interest of our workers, at that time our workers had resolutely taken up the challenge of a patriotic mission and they accepted the Employment Act, 1968 and the Industrial Relations (Amendment) Act, 1968. That we have today's prosperity is also due to the workers' resolute action taken then. Therefore, our workers have made indelible contributions towards our nation-building.

Today, trade unions not only take part in negotiations for working conditions and the benefits of our workers but also take part in national and social activities. The National Trades Union Congress has resolutely taken up the task of organising cooperative supermarkets in order to curb the increasing prices of consumer goods. In order to respond to the Government's call for more women to engage themselves in production work, trade unions have also resolutely taken over or set up creches. In order to be more involved in social activities, the trade unions have organised kindergartens, health centres, issued primary, secondary and university scholarships to children of union members, sponsored family planning courses, organised various cultural and recreational activities, actively promoted sports activities, visited homes for the aged and taken part in blood transfusion, and so on.

In recent years, in order to support the National Wages Council's recommendations, trade unions have actively set up productivity committees under their branch unions to increase productivity. This is in keeping with the national policy. In order to support the Ministry of Labour's effort in preventing industrial accidents, trade unions have also actively set up industrial health and safety committees under their branch unions.

All these facts enumerated above have demonstrated the contributions made by trade unions in our social progress and economic development. Therefore. I hope the Government will also consider allowing the trade unions to purchase industrial land to build trade union houses to serve our workers. When any worker meets with any difficulty, he could promptly go to the union for consultation. I also hope that the Government will also consider providing recreational and sports facilities around trade union houses so that our workers can take part in these activities after work.

5.07 p.m.

Mr J. F. Conceicao (Katong): Mr Speaker, Sir, I believe the Chinese have a saying which goes something like this: One year's preparation is done in the spring, one day's preparation is done early in the morning. () (Yi nian zhi ji zai wu chun, yi ri zhi ji zai wu chen.)

An hon. Member: ( ) Hen hao! (good)

Mr Conceicao: ( ) Xie xie ni. (Thank you) Now this quality of foresight, of forward preparation, has always characterised the style and planning behaviour of our Government, and the Finance Minister's latest Budget statement merely marks a continuation of this principle of early planning for the future.

However, one thing that has excited my attention is a certain subtle feature of the diction in the budget address. It is that while previously the Finance Minister has talked of policy, and the word policy has occurred frequently previously, in this year's Budget statement there is a greater resort to the use of the term strategy. The word strategy has been used at least six times and the Minister has even used the word tactics once. The Finance Minister is far from being a bellicose sort of person but the military aspect of his diction has induced me to look up Sun Tzu's Art of War. In the popular translation by Samuel Griffith, by a strange coincidence, the first chapter of the Art of War is headed Estimates'. Another version translates ( ) (ji pian) as Essay or Chapter on Deliberation'. Both headings, Estimates or Deliberation, are appropriate to describe the Minister's Budget statement. But let us take Sun Tzu's Estimates' and consider what he says in this first chapter about five fundamental factors on which Estimates' or `Deliberation' should be based. These are, firstly, the moral influence or moral cause, ( ) (dao); secondly, the weather or climatic conditions, ( ) (tian), thirdly, the terrain or terrestrial conditions ( ) (di), fourthly, command or generalship of commanders, ( ) (jiang); and fifthly, doctrine or organisation and discipline, ( )(fa). Let us apply these conditions to what our Finance Minister has done in his Budget statement,

I will have to say a little more on the first factor, moral influence, later, but in terms of the second factor, climatic conditions, the Minister has said the weather is getting fair and our Ship of State is in good state: "steady as she goes." In terms of the second factor, the terrain or terrestrial conditions, the terrain may be rugged but we have also the Minister's own five basic programme objectives to help traverse this terrain, namely, his programme related to manpower, science and technology, infrastructure, taxation and promotion. And of course the strategy will be a very flexible one.

In the case of the fourth factor, generalship, Sun Tzu, when he talks of command, says he means by this the general's qualities of wisdom, faith, compassion, courage and strictness. Our general in charge of our financial strategy has all these qualities. He is wise, he is a man of faith - he is one of the 10% who are Catholics in this House. His budget has continually good indications of compassion. For example, with effect from the 1976 year of assessment, the earned income relief was increased from $1,000 to $2,000 for those over 55 years old and $3,000 for those over 60 years old. This year the tax concession with regard to estate duty and also the other concession with regard to pensioners paying income tax also show that he is a man of compassion. Where courage and discipline or rigour are concerned, anybody who has been made Finance Minister by our Government would automatically have these virtues: as the Minister himself has shown in the rigour with which he imposed the well-known and well-felt car taxes announced on 1st January, 1976

Where the last factor, namely organisation and control, assignment of appropriate ranks to officers, is concerned, the Minister has touched on civil service expenditure, in respect of which he promises rigorous pruning, and on the development of quality of our managerial and executive grades. From these general guidelines we can see that there is able direction in the battle for economic development.

But let me take up more particularly, and more seriously, the first of Sun Tzu's five fundamental factors - the one I merely mentioned, but did not say more about, namely - moral influence or moral cause. And this, Sun Tzu says (and I quote from the Griffith translation): "By moral influence, I mean that which causes the people to be in harmony with their leaders ...". And it is the necessity for harmony in different segments of our society that I want to stress.

Recently the Deputy Prime Minister stated that [Straits Times, 28th February, 1977]:

`Government had provided the masses with the best safeguard against communist revolution through continuous economic development'

This development would not have been possible without the harmonious relationship between the Government and the people. This harmony has to be cherished because recent events have shown that occasions will continually arise wherein we will find people continually plotting to injure this same harmonious association or communication,

The very latest instance has related to the disclosures about "black operations" that have been aimed at spoiling the good reputation of the leadership in the people's eyes. This instance is all the more significant in view of some special circumstances I would like to refer to. Sir, I was a member of a parliamentary delegation which visited Malaysia last year. The welcome we received was most cordial indeed, and we felt that everywhere we went we were greeted by warm and sincere expressions of friendship, including those of the very top leadership.

Yet within the `very setting where there was sincere recognition of basic identity of interests especially in matters concerning security and the development of ASEAN, there have been found individuals who have been accused of such plotting as would, if successful, have spoilt the harmony between our people and our leaders, subverted intellectuals and students, and finally affected adversely our economic development.

While on this point of security, it is good to point out that the relationship, in good balance, between the leadership and the people has resulted in a rather special political situation. We have been one party in Parliament for nearly ten years through three successive elections. And throughout all that time we have continued to plan for Singapore's successful development in the way the present budget also shows. I am sure that it is much more than a coincidence that our best development, and control over this development, took place when the Government party was in full possession of all the seats in this House. I think it is more than a coincidence that it has happened this way. Therefore, it might not be out of place to remark that for the time being at least, a so-called parliamentary opposition is irrelevant for our continued development. The real opposition walked out of this House some time ago, because it was not the Government party they wanted and still want to do in, but Singapore itself. They talk of a unitary state of Malaya including Singapore. And the so-called would-be parliamentary opposition plays footsies with such and other anti-national elements.

We shall, therefore, have to be on a constant alert to promote and foster harmony in our society, to ensure development. When we talk of development we cannot separate the human, cultural, spiritual aspects of development from the material. The whole purpose of development - improved economic conditions, more and better jobs, enhanced quality of the environment - is the betterment of the human condition, the total human condition. In Singapore it is quite in order to point out that man does not live on bread alone. He has bread in the vast majority of cases and even circuses - witness the football enthusiasm at the National Stadium. To ensure development, to make sure our people enjoy a good life, we must also see to the importance of good communication between Singaporeans, for what is suggested by "moral influence" and "harmony" is brought about by good communication.

I have deliberately used the term "good communication" because just as material development depends on good communication such as roads, telephone and radio communication, ships, aeroplanes, radar, satellites and so on, the development of people as rooted, civilised, cultured and humane depends also on communication of another kind. And this communication may be described in the sense of the Christian, St. Paul's injunction that "Evil communications corrupt good manners", or in the sense of "propriety" in Chinese tradition, but it deals with consideration and human relations, and in fact is the criterion of such relations.

Japan is a fine example of how the acquisition of modern material means of communication did not affect Japanese society with a shudder, because a lot of the traditional forms of communication were preserved and, in fact, used to cushion the shock of assimilating the new and impersonal means of communication, It does seem ironic that Singapore is one of the world's most important centres of communication, and yet communication between people in the sense of regard, consideration, concern, a sense of identity has yet to be profoundly instilled. In Japan, the very network of interpersonal communications traditionally developed and supported has contributed to Japan's growth as an economically powerful state, despite the fact that there has been some erosion of traditional values as a result of the impact of modernisation. In Japan, you still find the relationship between worker and employer very personal and bound by ties of loyalty and pride of identification with the company. There still prevails a kind of industrial morality which frowns on a worker (whatever the level of his education, training and expertise) moving from one employer to another. The quality control movement, depending so much on cooperation (i.e, good communication) between workers, has taken such a root in Japanese industry that they are even able to strive after what they call ZD, namely Zero Defect.

We have to improve our sense of communication, and we cannot find a better place to start setting the example of good communication than in Parliament House itself in this very debating Chamber.

Sir, the debate on the President's address was very lively indeed. Much heat was generated and light thrown on several matters. Disagreements, where they occurred, were sometimes vehement. I hope such conditions will continue to prevail, during the Budget debate and after. So what, if we sometimes do not agree with one another. I remember reading a remark by a person called Wrigley (probably of chewing gum fame) to the effect that in a business, if two people always agreed, then one of them was redundant. So, in Parliament, we must agree to disagree.

However, whatever the new styles we may want to adopt in our own Parliament, for it is correct that we should not merely imitate the Westminster model of behaviour of Members of Parliament; whatever Standing Orders we change, for they may in certain instances bear changing, we could certainly set an example of harmony (or the moral influence of Sun Tzu or the good communication I spoke of just now) if we tried to bear in mind a certain dictum of Confucius.

My eponymous - this word means `same name'. Actually it was the Member for Kampong Chai Chee who gave the name to me. My eponymous and infinitely more illustrious predecessor said -

The Minister for Culture and Science and Technology (Mr Jek Yeun Thong): Ancestor,

Mr Conceicao: No, not ancestor, but predecessor. "Respectfulness without the rules of propriety becomes laborious bustle, carefulness without the rules of propriety becomes timidity; boldness without the rules of propriety becomes insubordination (or disorder); straightforwardness without the rules of propriety becomes rudeness." I shall try to read it in Chinese, Sir:

() Gong er wu li, ze lao

() Shen er wu li, ze xi

() Yong er wu li, ze luan

() Zhi er wu li, ze jiao

Since some of these words have very ancient meaning, I am sure some of the Members of this House did not understand them!

Having ensured good communication in Parliament. what can we do. Sir, to encourage the growth among Singaporeans of a sense of identity with people and place? I think we have to keep worrying at this question. We certainly do not know what is going to happen - exactly. But we most certainly also have to think of decisions to make about what interactions we can contrive to enlarge our understanding of ourselves as Singaporeans: We have to make decisions beyond those we have taken; such decisions that we have taken like our language policy which the Prime Minister elaborated on in his marathon speech, or like our stress on returns to effort and contribution, or like our subscription to economic growth as the basis for social development, or like we say, "We want to have friendly relations with communist countries but internally communism is an incompatible ideology where our society is concerned". These decisions we have made. But we have got to go beyond. We have got to think of decisions beyond those which we have already made.

We have to face the fact that perhaps we have to take decisions about matters where areas of ambiguity are larger than what we have tolerated in the past. In the area of economic development, so many inputs are quantifiable. In the area of development of nationhood - there are many imponderables. But there are indicators which we may take as possibly lighting up the path we might follow. For example, we should try in every way possible and as repeatedly as possible to draw attention to significant common and familiar things, multiplying (so to speak) occasions of common reference. What are these common and familiar reference points? For one, there are places and people. In some cities, walking along sightseeing, one comes across a small monument or even a plaque which tells of a significant happening connected with the place commemorated in such a simple way. Recently I incidentally suggested to the Minister for Culture that the Victoria Memorial Hall could be restructured into quite a good concert hall. He jokingly replied that we should not change -

Mr Jek Yeun Thong: It was solemn.

Mr Conceicao: Seriously or jokingly, well, maybe he will tell us later. He jokingly replied that we should not change the shape of such a national monument as it was there that the PAP held its inaugural meeting and thus saw its coming into being.

Sir, it may happen that one day the people of Singapore may want to commemorate the PAP's contribution to Singapore's construction - be that as it may, there are many places and events which it would be useful to commend to the attention and memory of the people, in a more thoughtful way - in such a way as to make the people realise that there is much in our past to remember and ponder over. The Monuments Board should be given every support if it can help in this task. But I can recall off-hand one or two places like, for example, the location in Bukit Timah where our own boys, already Singaporeans, gave up their lives defending this sector against the Japanese when they invaded Singapore. Other places may relate to recollections of cultural or earlier historical significance. Both where people and places are concerned, the Member for Ulu Pandan has already recommended the kind of references we should make those in our schools familiar with. But I think programmes interestingly produced for the mass media should be considered for the general education of our people.

We should also consider the record of events that have occurred more recently. As the Foreign Minister has pointed out last week in this House, the revelations we have been given regarding the latest black operations should be seen as salutary education for our own people and for ourselves. We can see more and more how the communists operate. This is what is happening today. But our leadership have been involved in the fight for the span of about a generation. Their experience should be recorded and made more widely known. How many know, to refer only to one example, what an exciting and interesting story our Minister for Culture can tell. I have been having some conversation with him a little bit more frequently recently, Sir. What an exciting and interesting story our Minister for

Culture can tell about his involvement as a communist activist for a period until he -

Mr Jek Yeun Thong: Underground!

Mr Conceicao: - on his own accord, broke away from the communists. [interruption] Yes, he is organising the thing right now! Our Deputy Prime Minister has announced that he would be personally involved in the structure of a course for senior commanders in the SAF on Marxism/Leninism, The Defence Minister also pointed out that the general public seemed ignorant of what really happened between 1954 and 1963 and that the fight in which the PAP was involved did not end in an easy knockout victory over the communists, I think that a record of these stirring happenings depicting the actual condition of the life and death struggle should be made much more widely known. Every device should be used to facilitate the recording through oral history interviews, assistance given for the recording of memoirs; and the means of dissemination should also employ the different arts of the mass media. In as much as the course for the SAF commanders is not a propaganda or brain-washing session, so also should these records and recollections not be regarded merely as propaganda and brain-washing but a serious and necessary endeavour to hand over from one generation to another the results of a vital, social and historical experience, When we think of the oft-referred to burden of the present leadership of finding a successor government worthy of its responsibilities, the development of public awareness and public responsibility could contribute significantly to the solution of this problem.

Apart from these very vital means of providing a common testament to people, and other measures to relate their thoughts constantly to common references as I have indicated, there are still other sources of common references which are seemingly trite but important all the same. It has been said that the proper means of increasing the love we bear to our native country is to reside some time in a foreign one. Then you really miss the familiar things or occasions of common reference. Sir, one of the things people miss, however trite this may sound, is food. Napoleon is alleged to have said that an army marches on its stomach. In my younger days - I was young once, Sir - I used to overhear elderly matrons advising young women about to get married that the way to a man's heart was through his stomach The interest of the Singaporean in food is proven many times over by the number of hawker centres we have on our island and by the debates on hawker licences that we have in this House. It may not be such a quaint idea to focus attention on some very idiosyncratic culinary items that we find in Singapore. One type of cooking that particular attention could be drawn to for special reasons is the style of cooking of the peranakan Chinese. The special quality of characteristic flavour is fast being lost because of the commercialising in the sale of some types of nonya food. [Interruption] The question of moral influence has everything to do with development, Sir. The Straits-born Chinese, Sir, have made other contributions in our history besides the culinary one. They have provided a very good example of adjustment and assimilation into the local environment while retaining some very interesting Chinese traditional ways. They spoke a kind of Malay of their own but they got married in the full glory of traditional Chinese costume. It would be useful to recall the history of the Chinese babas.

Another reference point, Sir, is song. Somehow or other, very few of our modern compositions seem to me to have the quality of universal appeal so far as we can make our songs a kind of common reference point. How song can possess powerful evocative qualities is indicated by the way the famous Terang Bulan has been modified and turned into the Malaysian anthem. In Singapore there may be a number of traditional well-known tunes - but perhaps well-known in musical circles only - that we can revive and make popular yet another source of common reference to Singaporeans. Two Malay songs come to my mind immediately. One of them runs this way: Di Tanjong Katong airnyabiru Disitulah tempat mencuci mata and so on. There is another one which has got a march tempo and the first two lines run: Tanjong Katong tepi laut Siapa suka boleh ikut.

An hon. Member: Why not sing it?

Mr Conceicao: I think we cannot move aside Standing Orders for that purpose.

Where songs in Chinese are concerned, while it would certainly not be appropriate to stress songs like () ,we can recall how the national anthem of China today arose out of a stirring war-song. I remember attending a campfire at a Chinese school in my constituency and observing the great rapport aroused by the singing of () - and the repeat verse in English "The more we are together". It showed how common feeling could be generated.

Mr Speaker, Sir, different people react differently when the subject of patriotism is brought up. The liberal tends to feel uncomfortable, Some intellectuals get more excited over human rights and internationalism. However, I did not notice, in my school-days, that the British were shy about our singing "There'll always be an England" and "Land of Hope and Glory". I can still remember the titles of "patriotic" songs the Japanese made us sing "Miyoto o-kaye-no", "Umi-no-tame nara". Maybe the Minister for Finance was old enough to remember these things. Today, countries like China, Japan, North Korea, Russia, even America - they are not bashful about patriotism.

Cuba is a very extreme example of the stress on commitment. The Castro regime in Cuba was quite willing, after the revolution, to allow over a quarter of a million of the population to leave as refugees principally to the United States, in order to maintain high revolutionary morale among those who remained. This decision entailed the loss of two-fifths of the country's stock of graduate manpower and about a fifth of its stock of those with secondary education. As many as 20% of the lawyers and judges, 1 5% of professional and technical workers, and 7% of managerial and office workers of Cuba had been registered as refugees in the United States between the years 1959 and 1962.

I would imagine that Castro did this as much because he was a Cuban as because he was a communist. Even communism. however internationalist its leaning, becomes subordinate to stronger feelings of nationalism. I say these things, Sir, merely to stress how important it is for us to develop our own brand of patriotism, and contrive in a more conscious way to bring about the circumstances that can help us foster this sense of identity.

I have made references to those ideas which I think will help us develop some kind of roots and strengthen these roots - even considering the ritual or symbolic effect of song and food. Perhaps we should even think of a common costume, a way of dressing - much like MPs wear white on National Day. I saw our Foreign Minister dressed one evening in a rather unique jacket. These are difficult areas of discussion that we have brought up, the areas which the Member for Khe Bong was not able to understand. I hope that what has been attempted as a kind of brain-storming in Parliament will not be finally assessed, especially by the Member for Khe Bong, as brain deterioration.

But the area we should consider in trying to work out a sense of commitment in is a wide area - it relates to our whole way of life. If this way of life is only concerned with what this budget is concerned about - I do not think the Minister for Finance himself intends it that way - then I think we will be the poorer. Perhaps it is this commitment that will slow down the progression of our young doctors towards being their own businessmen, will slow down the progression of our over-taxed wage-earning executives towards the level of disincentive that my good friend the Member for Jalan Kayu referred to, even slowing down the emigration that the Member for Anson has referred to. I do not believe, as some people do, that patriotism is out of place in a modern technological and cultural system. In our situation, it is quite essential, because it simply means getting one Singaporean to communicate better with another, feel more responsible for him, and cooperate with him in greater harmony.

Going back to Sun Tzu. Sir, the Budget observed four of the five principles relating to a matter of vital importance to the State. Sun Tzu said this matter of vital importance is war. Well, I say it is development, Sir. It took into consideration () . It left out the moral cause, (). I fill it in, Sir, [Applause].

5.39 p.m.

Mr Tan Soo Khoon (Alexandra): Mr Speaker, Sir, the public is generally quite happy with the Budget presented by the Hon. Minister for Finance in that it contains no shocks. Coming so soon after the General Elections, the concessions given by the Minister and the absence of new taxes must have come as a pleasant surprise. Only the smokers and drinkers are feeling the pinch this time. But I think the smokers are somewhat confused as to whether the tax increase on tobacco is intended purely as a measure to raise additional revenue or whether the Minister seriously intends this increase to really discourage them from indulging in the habit. I do not think the tax increase which in effect amounts to five cents more per packet of cigarettes will put people off the habit. But if at all the objective is to discourage what is a hazard to health, then I suggest that in future taxation be based on a system whereby taxes are proportionately raised according to the amount of tar content in cigarettes. It has been established that there is a correlation between the amount of tar in cigarettes and the frequency with which diseases of the lung occur. But if the objective of the tax increase is really to increase revenue, then perhaps the Minister should not attempt to sweeten his tax increase with moral camouflage.

An hon. Member: Hear, hear!

Mr Tan Soo Khoon: Sir, although the Budget did not contain rude shocks, it must have come as a slight disappointment to those who hope to gain by way of more tax concessions out of it. Of the four tax concessions granted by the Hon. Minister, only one. that is the raising of the exemption limit on estate duty, has a direct benefit to many people.

Sir, I would like to urge the Minister to consider raising, in future, the relief allowed for life insurance premiums and CPF contributions. The total deduction permissible under this category cannot exceed $4,000 at the moment. This has put many people, especially those in the middle-income category who are executives or at middle management levels, at a disadvantage. Their CPF contributions would take up most of the amount allocated, leaving hardly anything left for deductions for insurance premiums. Assuming a person earns a salary of $2,000 per month, and it is becoming quite common nowadays for such people to earn such a salary, CPF contributions will then amount to $3,600 per year. If there are bonuses earned, then CPF contributions could well total $4,000 or more per year, thus taking up the entire amount of relief one is entitled to. The amount of premium one pays for life insurance depends on the capital sum secured on death from such a policy. But I think I would not be wrong in suggesting that a person in such an income group would normally pay around $1,000 a year or more in insurance premiums in order to get a reasonably attractive life insurance policy.

Unlike the hon. Member for Jalan Kayu, insurance is not my profession. But I do know enough to believe in insurance and I think Singapore is still far from being an insurance-conscious society. It is not my purpose to delve into the benefits of life insurance, but I think if we are to encourage people to provide for the beloved ones that they leave behind when they depart from this world or at least to tide them over a difficult period and I think it is not unreasonable for us to encourage people to do so, then some form of immediate attraction to purchase life insurance must be provided for. Raising the limit on relief for life insurance and CPF to $6,000 per year would serve as an incentive for many people who are presently deterred from purchasing life insurance policies. The need to raise this limit is also the more necessary in view of the fact that compulsory contributions to the CPF has been steadily increasing over the past few years, leaving less and less in the amount of relief for insurance premiums.

Sir, I welcome the Hon. Minister's call to exporters to develop new markets. Our exporters often face problems of making new contacts. Their potential customers in various markets are already buying from other sources. Customers see no point in buying from a new source unless better terms are available or if they can get something which their present suppliers cannot provide. I am appreciative of the work done by our commercial secretaries abroad and the Department of Trade here in Singapore in promoting Singapore-made goods. But I have found that many contacts introduced to our manufacturers do not materialise into business because there is no follow-up action. Often the initial contact ends up with the sending of samples. No orders follow. The manufacturer loses heart, not realising it takes time to inculcate in the potential customer sufficient faith in the Singapore product and to build a relationship that would materialise in business deals. To achieve more positive results, we should quickly set up permanent exhibition centres in the main European, American and Asian cities where Singapore products could be put on permanent display. Another form of promotion would be for Singapore to participate in all the important trade fairs. But participation in international trade fairs is an expensive thing. The participant has to pay for rental of space which is often very exorbitant, travelling expenses, shipping merchandise to the fair, etc. In other words, it would cost quite a sum for a manufacturer to participate in such fairs and many of our small manufacturers cannot afford to do so. What the Government can do to help would be to have "Made-in-Singapore" stands at all important trade fairs and to rent space out to our participating manufacturers at nominal rates. I am sure that such a policy would attract more of our manufacturers, particularly the small ones, to participate in international trade fairs at a reduced cost.

On going through the Estimates, I noticed a small item - excise duty at $15.1 million to be collected from locally refined sugar. I would like to ask the Minister the reason for imposing this excise, and in view of the fact that this excise is being passed on to consumers ultimately and the fact that sugar is a basic necessity, would he not consider abolishing this?

My last point relates to a complaint which was raised by me during the debate on the Presidential address on the case of a family asked to return the 13th month allowance already paid to an employee of the HDB who died just before the end of the year. I am glad to read that the HDB has said that there is no legal basis to claim against the family of the deceased and that it will not make a further claim. However, I read only a few days ago the similar case of another statutory body asking back, not just for the 13th month allowance already paid to somebody who died after receiving it, but even the return of one day's pay. This time the culprit is none other than the Telecommunication Authority of Singapore. I hope the TAS is not competing with the HDB and trying to outdo it. But the TAS has today replied to criticisms 14th March, 1977:

"When the widow of Enche Sardek bin Arip approached Telecoms (via her relative) that she was unable to repay the sum, the officer in charge of the case assured her that she could take her time to repay the amount. He added that she could make an appeal to Telecoms which will likely consider the case, on sympathetic and compassionate grounds, to waive the refund. Subsequently. Telecoms decided to waive the refund of one day's pay, and initiated a request to the Ministry of Finance to waive the refund of the 13th month allowance. This matter is being considered by the Ministry."

Sir, I cannot accept the TAS reply that they have made a request to the Ministry of Finance to waive the refund of the 13th month allowance. Of course, there are rules which have been laid down in the beginning. Perhaps those who drafted the rules never saw the possibilities of such situations but they cannot ask for a refund from somebody who is already dead. They cannot ask from the deceased's widow because, strictly speaking, she did not receive the money. So why persecute the poor widow and her family at a time when they have already enough problems and agony? The TAS says that it has no authority to waive the refund of the 13th month allowance. May I say. Sir, that the TAS in the first place has no right whatsoever to ask for the refund. But what sickens me most is the TAS's claim of one day's salary from the widow. Even though the TAS eventually decided to waive the refund of one day's pay, just imagine the shock and the anguish the poor widow must have suffered when she was first asked to pay back the one day's salary. Sir,I can only think of one word to describe the TAS approach to this matter - cruelty. Even if the TAS subsequently decided to waive the refund of one day's salary, the damage has already been done. If it is a question of rules. I urge the Minister to quickly take measures to amend the present rules. It is very sad that insistence on rules being followed to the letter has resulted in very unfortunate situations. It is time that we put the human element into the interpretation of rigid rules and where the rules really tie us down, then change the rules.

5.50 p.m.

Mr Seah Mui Kok (Bukit Ho Swee): Mr Speaker, Sir, I would like to join my colleagues in congratulating the Hon. Minister for Finance for presenting a reasonable and fair Budget to this House on 28th February, 1977, especially as it does not introduce new taxes for the year 1977. Although there are two tax increases on tobacco and cigarettes and raising the import duty on intoxicating liquors, I am sure all smokers and drinkers can afford to pay a little more. The increasing number of restaurants, night-clubs and bars, clearly shows that their patrons have plenty of money to spend on their smoking and drinking pleasure.

Sir, the tax concession in the exemption limit in estate duty which will be increased from $50,000 to $100,000 and the remission limit which will also be correspondingly raised from $230,000 to $280,000, will definitely encourage a greater home ownership because properties under $100,000 will pay no estate duty at all.

Sir, Singapore benefitted from the world economic revival in 1 976 with a real growth of 7%. I am confident we can achieve the same growth rate for 1977 if we continue with our tripartite cooperation. Government will do its best to maintain political and economic stability, employers will expand their industries and workers will work harder to increase productivity. I fully agree with the Minister for Finance that we must continue to press on with our promotion efforts in the United States, Japan and Western Europe and to maintain a healthy investment climate on the home-front. Also, we have to explore new markets especially in West Asia.

Sir, I hope the five major ASEAN industrial projects will be implemented as soon as possible. These five industrial projects will certainly boost up the economic and industrial growth in this region.

Sir, I fully support the proposal made by the hon. Member for Leng Kee that ASEAN should form a united front in dealing with United States, Japan and the EEC countries in matters relating to tariff and non-tariff barriers. I also agree with him that ASEAN should put pressure on Japan especially when she has been enjoying a huge surplus in trade with ASEAN. I hope the Japanese Government leaders and the Japanese business tycoons will stop their selfish, greedy and ugly exploitation of the economic situation in this region. It is a matter of time for the United States, Europe, ASEAN and other developing countries to imitate the Japanese style and strategy in business dealings and trade.

If ASEAN decides to stop exporting rubber, tin, oil, timber and other raw materials to Japan, and to find other markets, it will not be easy for Japan to get similar supplies at such fair prices. In World War II, Japan was not successful in achieving military and territorial domination. However, at present Japan has been quite successful in economic exploitation and domination, which is as deadly dangerous as military and territorial domination, We have to watch the situation closely.

However, I believe that the best way to deal with Japan, United States and Europe is for ASEAN to form an ASEAN Common Market like the EEC countries. The sooner we form it, the better for our ASEAN Economy.

Sir, let us remember the proverb: "Heaven helps those that help themselves". We should accept the fact that the world does not owe us a living. We have to struggle, sweat, toil, work harder, do our best in whatever way we can, so that our people in ASEAN can live a healthy and happy life with a better standard of living through mutual self-reliance, self-discipline and self-help.

Sir, I join my colleagues in supporting the Budget Statement presented by the Minister for Finance to this House.

[Mr Deputy Speaker in the Chair]

5.57 p.m.

Encik Mansor Haji Sukaimi: Mr Deputy Speaker, Sir, I would like to begin with a small diversion, as I wish to first pay tribute to our national soccer players who were beaten one-nil in the just concluded pre-World Cup tournament at our National Stadium. These were the same men who were dismissed as no-hopers after their alarming inadequacies in friendly matches before the tournament. And even the anxiety of soccer fans had appeared to threaten their confidence. That they were able to lift their game to an altogether different dimension underlined their resilience and indomitable spirit. They have, indeed, surpassed all our expectations. And isn't this capacity to thrive in adversity so typical of we Singaporeans?

It was not very long ago that our future was written off by many when we were discharged. unexpectedly, from the Malaysian Federation. And more recently we were viewed by many outsiders with morbid fascination as condemned people after the pullout of the British bases. But we snapped back with the same tenacity and resolute will and emerged from those moments with greater glory.

Our footballers have displayed that same grit, that same inner strength. And I salute them for their determination and sacrifices; their wives for their understanding during those many lonely hours, and the FAS officials for a job well done. I wish them well in all their future endeavours.

After listening to the learned views and excellent presentations of hon. Members who spoke before me, I cannot but feel convinced that the Minister and his officials have indeed done a great job in formulating an excellent programme to ensure that our Ship of State will always be resilient and, as the hon. Minister says, be "steady as she goes".

In fact, I was very happy to find that my reaction to the Minister's Budget speech reflects the same tenor and spirit expressed by the Member for Katong, but, of course, the Member for Katong has expressed this feature of the policy in a much lucid manner and in his typical, classic and fine literary style.

However, I would not want to over-emphasise as he did the element of compassion. By this, I do not really mean, Sir, that the Minister is not a kind man. I prefer instead to call him a judicious man; judicious because his thinking, his assessment of things, his assessment of our economic situation tells him that Singapore can afford to have what many Members say "a painless Budget". This point must be seen in this light because if his abacus tells him that next year the Budget will be a stringent one, then surely it is not fair for us to call the hon. Minister an unkind man.

I also wish to congratulate the silent backroom boys who have given the Minister such excellent support. I am sure the task of gathering the data, analysing them and formulating the multiple permutations of alternative strategies must call for the most analytical minds, strong perseverance and a deep belief that something positive can be done to promote the prosperity of our Republic.

The Minister's assessments of 1976 and the prospects for 1977 are indeed realistic. He is cautious, yet refreshingly optimistic. His review of the status of the Economic Strategy Programme announced five years ago gives us a succinct recollection of the rationale and direction of our economic developments.

I thank him for reminding us that the central objective of our programme he announced five years ago is to modernise and transform Singapore's economic structure so that it would become a `brain' services centre. In a nutshell, he has kept us informed of the progress of the package of public policies designed to fulfil the five basic programmes in manpower development, science and technology, infrastructure developments, taxation, and promotion.

To my mind, this review is crucial. We need to be always conscious of our economic chart-ways. We must also know how each step we make not only consolidates what we have achieved but also paves the way for the next step,

The `tactics' for 1977 he offers us again reflects his meticulous thought-process as a tactician. For Industrial Development, he urges that we press on with greater promotion efforts especially in the United States, Japan and Western Europe - and these are indeed the crucial sectors. On the home front, he advises us to maintain a healthy investment climate and do what we can to keep major production costs stable, and industrial facilities and services readily available for investors. For Trade Development. I see the importance of the need for government and traders to work more closely together and for us to strengthen and expand our trade contacts and promotion efforts overseas. The same meticulous thought process is also reflected in his formulations on Asean Economic Cooperation and Services Development. On Wages Policy and Manpower Development, the Minister has propounded what I consider are very crucial principles so necessary to help us sustain a healthy and more meaningful climate in industrial relations.

While urging workers to put in their best efforts, the Minister has reminded management, and I quote:

....employers have an equal responsibility to improve their management of personnel or of plant and machinery to increase productivity. Employers should consider the introduction of appropriate incentive schemes to reward efficient workers for their productivity'.

This commitment to productivity, as we all know, Mr Deputy Speaker, Sir, has been our standing policy. To labour, this policy imposes, to some degree, a constraint on wage increases. Nonetheless, we will honour our commitment. Our workers will no doubt put in their best.

But management must also honour their commitment, In this regard the Minister has very aptly stated, and I quote:

`The initiative for formulating such (productivity) schemes is clearly their responsibility as they have the greater resources and experience in this area'.

This, to my mind, is critical. But unfortunately, the record of management's efforts in this direction is dismal.

On Manpower Development, the Minister has cautioned management (and this emphasis is long overdue!) that:

`To instil correct work attitudes in our workers, employers must provide a proper working environment. Good employers usually have hardworking, dedicated workers'.

All too often, too many workers suffer because management has failed to realise the significance of this fundamental principle.

There are too many instances (and this applies to the civil service as well) where management does not show enough concern in ensuring that work is systematised; instructions given clearly; legitimate grievances resolved conclusively. Nor do they seem interested to consciously look for talents and developing these talents in a positive way.

Instead, their view is excruciatingly negative. Take disciplinary procedures, for example. Disciplinary actions pressed by management are only interested in deciding the penalties to be imposed. They start with the assumption that the workers are guilty and all management wants to do is to prove how more serious the guilt is - simply to justify the most stringent penalties.

This negative attitude must be rectified. Perhaps the Minister and also the Minister for Labour could design appropriate measures and incorporate them into all important administrative policies pertaining to Manpower Development and Management. Whatever the details, management must be made to be more positive in effecting work improvements. They must not assume things. They must be more involved in the running of their organisation. They must make it a habit to check, double-check and see that improvements are implemented, and implemented properly.

Management officers, individually, must conduct themselves in such a way as to honour the self-esteem of workers and strive to afford workers the opportunity to experience a sense of self-worth. In all disciplinary proceedings, a fairer system must be instituted. Charges and reasons for these charges must be clearly stated and communicated to the alleged offenders - not vaguely or carelessly as is often done. The principle of "due process' must be guaranteed and the worker must be given due opportunity of being heard - not merely ratified by lip-service.

In every disciplinary proceedings, a mandatory assessment must be made to ascertain whether or not there are any flaws or deficiencies in management which have led or contributed to the occurrence of the offence, indiscipline or unsatisfactory performance. If the offence was due to management's default or disinterest, then a more positive action must be taken on management officers responsible for the deficiencies.

I am not saying that these precepts are non-existent in managements. Yes, they do exist. But management tended to give them lip-service and often for their own convenience. I say this because I know these precepts are difficult to implement, that is, if management really wants to seriously upgrade themselves in the direction urged by the hon. Minister. But, alas, these improvements are necessary.

If I am asked for any pointers which can help management in realising these improvement measures, I would suggest they take the cue from the Minister for Finance who in his Budget policy has so strongly emphasized three principles: -

(i) Problems must be tackled with positive dynamism.

(ii) Efforts must be charged with a deliberate intent to promote favourable circumstances.

(iii) There must be regular reviews and therefore scope for flexibility.

I see these three-pronged strategy of "dynamism - promotion - flexibility" a crucial prerequisite for improvements. These must be cultivated, nurtured and imbued in all our organisations, our civil service and our life-styles. Without these, we will wither and that mysterious inner strength so typical of the Singapore character will fail to come to our rescue especially during a crisis.

This strategy of dynamism, promotion and flexibility must particularly be instituted in our civil service. This is crucial as we are no more in the colonial era where the civil service was a cloistered domain whose primary task was to regulate and control, rather than to promote and stimulate growth.

The demands made by our society on the civil service are numerous and exacting. It is required to be incorrupt, efficient and effective. It must be humane and judicious. It is expected to be an abiding and prompt executor. It must arbitrate and regulate fairly and, most importantly, it has to be an untiring catalyst and innovative developer. It is true that the civil service must run the machinery of Government and to run it well. It is also true that it should not make mistakes, cause delays or waste public funds, but these are the minimum standards expected of all civil service.

It is our ability to perform beyond this minimum level that the Singapore civil service has achieved that unique position of being the most efficient civil service in this part of the world. To ensure real success of the financial policy of Government, the civil service must continue to be innovative, dynamic and flexible.

In formulating policies and implementing them, the civil service is expected to do so with competence, diligence and a deep sense of responsibility. Its members are expected to possess the expertise and imagination to appreciate problems and to propose realistic solutions which should be implemented with sufficient perspicacity and thoroughness. They are also expected to be involved in assessing the merits of policies rather than merely accepting them from those above for implementation. Civil servants in their respective fields should demonstrate the capacity for expert advice and to do so with integrity and conviction. These standards of conduct and performance expected of the Singapore civil service will be hard to compromise. They will become more pronounced as the present political leadership strives to enhance the viability, prosperity, and stability of the Republic.

Towards this end, there are certain critical capabilities which must be developed within the Civil Service. Firstly, urgent attention must be given to develop a larger pool of second echelon leaders in the civil service. At the moment, we have such a dangerously small group of top administrators who have to burden so much, and, as a consequence, could not have the disposition to develop the second-line resources in a positive manner.

Secondly, new working structures must be institutionalised. I agree fully with the hon. Member for Kallang when he urged that more supra-status bodies like the Economic Activation Committee be utilised. This is necessary because the process of governance is more complex. More and more complex programmes and projects are required and all these call for more sophisticated policies and machineries which must allow for better coordination, sharing of expertise, establishing proper priorities and ensuring concurrent developments of all sectors.

I would like to urge the Government to consider establishing what may be called a special Task Force consisting of a group of multi-disciplinary experts who, together, can be given short assignments to help Ministries which have persistent problems which they cannot solve themselves.

The primary role of this Task Force is to also build up the initiating capabilities in the weaker Ministries. Such a Task Force may include two or three bright young officers who, having completed the assignments, can be assigned the responsibility of implementing and making permanent the improvement measures. In a way, this arrangement will open up greater opportunities to develop the second line commanders.

Thirdly, I would like to urge that the Central Agencies like the Public Service Commission, the Budget Division, Audit Department, and the CPIB, to drastically change their essentially centralised and authoritative postures into one which is more dynamic and promotive.

As we know, Sir, the Public Service Commission is the final authority on personnel and staffing matters. I would like to see the Commission and its Secretariat to take this job of recruitment, emplacement, promotion and staff development in a more open and dynamic manner. It is ridiculous, for example, for the Public Service Commission to take more than four months to recruit a temporary clerk. Nor is it enough for them to merely blame the educational system, university and colleges for having failed to supply the necessary candidates for important appointments in the civil service. Nor is it correct for them to merely wash their hands and lament that the private sectors offer better terms than what the civil service can. More positive methods of attracting better candidates must be worked out. New methods of assessing candidates must be introduced because the exclusive reliance on the interview methods is not only inadequate but indeed obsolete, especially for the higher grade appointments.

As for the budget Office, it is true that they must have real control in resource allocations. But surely they can do it without unduly inhibiting urgent sector developments.

Processing of projects and issues pertaining to staff matters surely must be attended to promptly. When disapproving requests made by departments, I think Budget should make it a point to indicate the reasons for the rejection. This will help the Ministries understand the thinking and rationale of the Budget's decision. No doubt there are problems of staff shortages at Budget but something must be done positively about it as any failings in the Budget Office will create more serious implications in the sector developments.

To the auditors, I must say how much I appreciate the increasingly difficult jobs they have to do as the Government machinery becomes more complex. I therefore wish to offer the Auditor-General and his staff my deep concern. I wish them well and urge them to be patient in their work. However, I must remind the Auditor-General and his staff that the audit function, or rather the manner by which the audit function has been carried out, has rather inadvertently brought about that most infamous label that the Civil Service is over-cautious, rigid and bureaucratic. I really do not blame the officers responsible in the control and utilisation of public monies to be cautious. With the auditors always ready to pounce on them, there is little option but for officers to be rigid and cautious.

The recent case where a junior clerk in the Income Tax Department could embezzle nearly $1 million of public money and remain undetected for nearly 40 months has made me feel that something serious is wrong with the audit system. It is pointless to solely blame the Approving Officers in the Income Tax Department for blindly signing the payment bills when the auditors themselves. who are given copies of the Payment bills, could not detect these errors.

I do not understand why auditors take such a long time to raise queries, often after a lapse of many months from the date the errors were committed. It is really unfair to ask an officer to explain the mistakes after a long lapse, because he may not be able to recall in detail the explanations which could really justify the errors.

I would therefore urge the Auditor-General to seriously improve his department so that the auditors can take remedial action promptly after the errors are committed.

Next the CPIB. The CPIB must continue to be stringent. This must be so because our society is more involved in developments where there is so much avenue for malpractices and there is a need for greater control. It must maintain high standards as, otherwise, our creditability will be threatened.

However, the CPIB must ensure that their officers do not make their investigations in a frivolous manner which often can cause undue inconvenience to the departments, and unjustifiably bring unnecessary shame to officers, thus lowering the morale of the department.

All in all, my appeal is that Central Agencies which I have mentioned above must now take on a greater role as promoter, facilitator and dynamic agent and must allow for sufficient scope of flexibility rather than remaining a passive, disinterested authority. This change must be deliberate and the Civil Service must reflect the true spirit of dynamism, promotion and flexibility promulgated in the Hon. Minister's Budget policy.

Finally I would like to urge the Civil Service to take on a more positive view to the criticism directed at them - most forcefully by Members of Parliament.

In fact, I feel that the criticisms which hon. Members of this House have raised should make the job of the civil servants easier because they would have the added reason and argument to put up for a case to their superior officers and even to their Ministers for easier support and approval. This was my experience when I was in the Civil Service. I welcome criticism because things simply get done much faster when there is good criticism, especially when the criticism is accompanied with very sensible suggestions or alternative solutions. In this context, I would like to strongly urge my colleagues that whenever we raise any particular criticism, we should also make it a point to offer sensible solution,

6.20 p.m.

Mr Ho See Beng: Mr Deputy Speaker, Sir, I would like to congratulate the Minister for Finance for his painless budget and for his confidence demonstrated in his deficit budgeting. The only increase in taxes are on luxuries, and if people insist on drinking and smoking they should be prepared to pay for the extra cost.

An hon. Member: So do you.

Mr Ho See Beng: I have given up smoking. I would like, however, to ask the Minister for Finance if he is willing to give us an assurance, in the light of the confidence displayed in presenting the budget, that no new taxes will be introduced and that existing taxes will not be raised during the course of the year. I ask this, Sir, because of late, there is the tendency to present a painless budget but after the electorate has been lulled into a sense of satisfaction and complacency, new taxes are imposed or existing taxes raised for various reasons during the course of the year.

Mr Deputy Speaker, Sir, with the indulgence of the House, may I raise once again a question which I have raised before and which I am sure is of interest to most of us in Singapore. I refer, Sir, to the personal relief afforded to taxpayers. Sir, income tax was introduced more than 25 years ago and there has been no increase in the personal relief of $2,000 except for the relief of $1,000 allowed for earned income. Despite representations made in this House year after year, the Minister for Finance has brushed aside all arguments with the same old excuses. His refusal to increase the stagnant personal relief brings consolation to nobody.

The Minister for Finance has given us three reasons for refusing to increase personal relief. Firstly, he says that the Government will lose about $26 million in revenue a year, and that (I quote Hansard, 24th February, 1977):

Our revenue performance in the last financial year and in the coming year is not so strong as to permit an increase in such income tax relief, If such relief were to be increased, a new tax or an increase in other taxes may have to be imposed to make up for the loss in revenue.'

This appears to be an answer which he repeats year after year. In regard to the first observation, I would like to draw attention to the fact that in presenting his budget the Minister gave us the impression that Singapore is financially sound. In a budget of $5 billion, $26 million is a drop in the ocean.

In regard to the second sentence in the quotation, does the Minister imply that he is thus giving us a guarantee that there will be no new taxes or increase in existing taxes during the current financial year?

I would like to make one other observation in regard to this $26 million which undoubtedly is being collected from marginal tax payers, who undoubtedly number several thousands. In a previous sitting of Parliament, the Minister indicated that the collection of taxes from hawkers was too tedious and cumbersome, as it would entail a large number of staff and revenue would rather be small.

On the other hand, I would like to enquire if it would not be better to transfer the staff who are collecting this meagre $26 million from thousands of the lower income group and let them concentrate on the collection of income tax from those earning higher incomes and from those who may be at present evading income tax.

The second reason the Minister has given is that while the cost of living has gone up, so has per capita income, which increased the ability of the taxpayer to pay more tax. Of course, it is evident that if a person earns a higher income he has to pay higher income tax if personal relief is not increased. But what the Minister has apparently omitted to consider and mention is the fact that although incomes have gone up so has the cost of living.

The Minister for Finance sometime ago admitted that the Consumer Price Index for the year 1973-74 has gone up by nearly 25%. How many times would it have gone up since 1948? Thus, any increase in wages has been consumed and nullified by rising prices.

The third reason the Minister has given is that the ever-increasing public expenditure has to be borne by as many people as possible and that the services provided by the Government must be paid for. Of course, nobody expects the services of Government free of charge but surely some consideration can be given to those in the lower income group, who in 1948 were not so badly off when prices of goods and services were lower.

In an article in "Socialism That Works, The Singapore Way", Dr Goh Keng Swee, our former Minister for Finance, stated that "from 1959 to 1975, the Consumer Price Index increased by about 70%". What then would be the increase from 1948 -probably well over 200%. Thus whatever wage increases the lower income group may have received have all been absorbed by rising prices.

It should also be borne in mind that taxpayers' expenses have also increased, if he is married and has children. The allowances for his wife and children have not been increased since 1948, despite rising prices. Thus the end product of the existing tax pattern means that although a man's wages may have doubled or trebled since 1948, he is left poorer than what he was in 1948 despite our Republic's progress.

It is not that I am advocating a substantial reduction in the rate of income tax; all that is being asked for is that cognisance be taken of the rising prices and the fact that they have reduced the wage-earner's real income as opposed to his money wages.

6.33 p.m.

Mr Ng Kah Ting (Punggol): Mr Deputy Speaker, Sir, I rise to join my colleagues on the Backbench in support of the Motion moved by the Hon. Minister for Finance. Several hon. Members have no doubt contributed much to the debate.

I have several things to say about the financial policy of FY 77, Let me first refer to the statement of the Minister that:

`We have laid a sound foundation for sustained growth (6 - 8%) through the five basic elements of our long term development strategy',

Hopefully this prediction may come true.

Therefore, the EDB's efforts in attracting investment commitments of $364.2 million in 1976, comparatively speaking, is I think a bit on the low side, though I understand their difficulty. However, I hope the EDB will spare no efforts in securing and promoting investment to Singapore especially in the fields that will bring us to a higher technological level in which higher skills are required of our workers; thereby putting us on a better footing, so to speak.

In this respect, I welcome the setting up of the Capital Assistance Scheme to assist in financing smaller but more technology-oriented industries. Coupled with this, I would like to see greater efforts made in export promotion. Several hon. Members have already mentioned of the need to co ordinate these efforts, and I hope the Hon. Minister will no doubt look into this. Perhaps a unit should also be set up to advise on marketing as well. Several Members have also mentioned marketing promotion for manufactured products, but they do not seem to have any follow-ups. I suggest that such a unit be set up. This unit could then map out the strategy of promoting our manufactured products and also provide amongst other things related services. Permanent exhibition centres are of help, but I believe there is nothing better than the personal touch. The example of the Japanese aggressiveness in this respect should enable us to understand why the Japanese economic recovery has been so successful and rapid since post war. Our growth rate over the last few years has been high also. We have had growing prosperity over the last 17 1/2 years under PAP rule. But I believe we can do better if we redouble our efforts in view of the uncertainties ahead which I think nobody can accurately predict.

With that, I turn to ASEAN economic cooperation. I would like to urge the Hon. Minister to consider laying greater emphasis on bi-lateral and multi-lateral trading arrangements with ASEAN countries. A good start has already begun with the Philippines and Thailand "with the across-the-board reduction of 10% of existing tariffs on all products". These bi-lateral agreements mean that Preferential Trading Arrangements would eventually, I think, bring about greater benefits to ASEAN. The other ASEAN countries are rich in natural resources whereas Singapore has the necessary infrastructure and other related services.

Mr Deputy Speaker, Sir, the Hon. Minister mentioned a balance of $611 million from the expected revenue yield of $3,362 million of which no less than 41% of such revenue comes from income tax. The income receipts will be $1,380 million, i.e, up 15% over FY 76, In fact, wage earners and others have helped much in this contribution. But there are others who seem to be untaxed. Several hon. Members have again raised the question of further tax incentives. They are my good Friend, the Member for Khe Bong (formerly of Bras Basah), the Member for Alexandra and others, and I hope their appeal this time will not fall on deaf ears. However, Sir, the hon. Minister in reply to my plea for such income tax reliefs stated the need to have a broader base; but I do hope that he will enlighten this House as to what other measures he proposes to take against the untaxed to further broaden this base. In my remarks on this. I am not referring only to the specialised unit in his Ministry alone. I leave this matter open.

On the other hand, Sir, whilst I compliment the Hon. Minister and his Ministry officials for the extra caution in ensuring actual expenditure incurred as a result of savings, (I think hon. Members can refer to the Financial Statement for the year 1/4/75 to 31/3/76, Paper Cmd. 1 of 1977, pages 130-317, to infer this) I would like to draw the Hon. Minister's attention to both the shortfalls and underestimated yields in revenue. On estimated and actual revenue side (in page 127, Code 311-002, on "Interest on Investments") the estimated revenue was $110 million whereas the actual revenue came to $74.91 million, resulting in a shortfall of $35.08 million. I must hasten to add, Sir, that this is, in fact, reclassified under Dividend - Other Investments, Code 312-009. Sir, the following item Code 312-001 on "Dividend-Temasek Holdings" the estimated yield was supposed to be $6 million and the actual yield was "NIL" simply because no dividend was declared. Before hon. Members rush to a conclusion on these remarks, may I point out that there are many examples of. these so-called "more than estimated". These vivid examples can be found in the same statement I referred to just now. I therefore leave my remarks on this matter to the Hon. Minister and his top officials in the Ministry to reflect on. Surely, I do not expect hon. Members to say "those responsible must be very accurate in their projections" but I must say that the differences should not be too great either.

Sir, of course, I have studied the Report of the Auditor-General for the financial year 1975-76, Paper Cmd. 2 of 1977, concerning this point. For example, on page 11 of the Report, Revenue Less Than Estimated (paragraph 48) I quote:

`Information received showed that the respective department concerned was not in a position either to anticipate the recurrence of actual revenue less than estimated or to adjust for more accurate budgeting for the financial year under review'

Therefore, Sir, the Auditor-General's remarks on this should not only be noted but also be looked into.

Sir, I would now like to touch on two aspects concerning Industrial Training and Prices covered in the Economic Survey of Singapore 1976. Under the heading "Manpower and Wages", on page 37, I appreciate that "Industrial Training was conducted mainly in institutions and on-the-job." I have had on previous occasions in the past suggested a scheme "earn-whilst-you-learn". I believe that learning on-the-job and in the institutions concerned is one good thing; but I submit that "earn-whilst-you-learn" would certainly upgrade the skills of our workers and will also encourage the younger students. Therefore, such a scheme should be implemented as soon as possible if we are to encourage both the young and skilled workers to sharpen their tools of trade and thereby better, themselves.

On the question of Prices in page 42 under "Local farm products", it states:

`Between February and September 1976, prices of pigs fell by 18% owing to excess supply, despite attempts to export more live pigs'.

May I say that the prices of pigs fell by more than 18%. May I ask who made attempts to export more live pigs and to which countries? How far have those departments concerned assisted in stabilizing the price of pigs? Prices of local farm products will decline if the Finance Ministry continues to allow import of frozen and canned farm products from other countries. Therefore, it is difficult to understand the rationale behind all this.

The statement that "fish prices were unusually higher at the beginning and end of the year on account of a poorer catch and during the north-east monsoon period" is understandable. What is important is the need to develop and encourage the fishing industry. Although the Changi Fisheries Training School has been closed down, it does not mean that all is lost in the fishing industry. The Jurong Fish Market caters for foreign as well as local fishing vessels. The Kangkar Fish Market in my constituency has more than a hundred otter trawlers and serves the inshore fishermen as well. No doubt they help towards the growth rate It may be negligible in terms of percentage to the growth rate but still a little goes a long way. May I suggest to the hon. Finance Minister to look into the matter of concluding bi-lateral and multi-lateral fishing arrangements with the ASEAN countries to enable fishing in the region's waters. I believe there is an abundance of fish in the seas of this region and if such arrangements are concluded, this will be another benefit to ASEAN.

Before I conclude, Sir, I would like to refer to the tax concessions which encourage home ownership. The increase from $50,000 to $100,000 exemption limit is most welcome. Also the raising of the remission limit from $230,000 to $280,000 in respect of properties means a reduction of tax under the existing estate duty liability. Hon. Members especially of the Third Parliament are certainly grateful to our Hon. Minister for Finance for granting such a concession as this matter has at last been well considered, For the benefit of some of the new Members of Parliament, including my good Friend, the Member for Changi, this matter was raised on many occasions in this House because many of us felt that it would be too harsh to see families losing their houses because of the burden of having to pay heavy estate duties. Properties have gone up in value over the last few years. Therefore, the concession on estate duties was only given a couple of years ago, up to $50,000. Today it is now raised to $100,000.

Mr Ho See Beng: It is long overdue.

Mr Ng Kah Ting: My good Friend, the Member for Khe Bong, says it is long overdue. I think it is better late than never. Therefore, it is not a question of the haves benefitting and the have-nots losing out. Nobody loses out in this. It is a matter which enables owner-occupiers' families to continue to live in their own homes. Most of them save hard to buy their houses, say, 10, 15 or 20 years ago when the prices then were about 10 times lower than they are today. Just to illustrate, a terrace house then might cost anything between $10,000 to $15,000 depending on the locality. Today it costs about $100,000 or more. I am sure hon. Members in this House would not wish to see a family, because they have to pay estate duty as such, sell away their owner-occupied house which the owner himself or herself left behind for them.

In fact, several Members have pleaded with our Hon. Finance Minister in the past to consider not to impose the estate duty on the owner-occupied house of the family concerned. In any case, this concession is well received. But I certainly hope that this will not bring about an escalation in property assessment, because this concession then becomes meaningless. In this respect, I share the view of the Member for Whampoa, who unfortunately is not around, on this.

Sir, the Motion of the Hon. Finance Minister has my support.

6.52 p.m.

Mr P. Selvadurai (Kuo Chuan): Sir, I would not detain this House very much longer. Apropos of what I had raised in the earlier debate on the President's address, there are a few concrete cases bearing upon the implementation of the policy of the Housing and Development Board that I would like to raise.

Hon. Members would recall that in 1975 we passed the Housing and Development Board (Amendment) Bill which provided, among other things, that the Board may compulsorily acquire any flat, house or other living accommodation, if the owner thereof, his spouse or any authorised occupier, has at any time acquired, whether by operation of law or otherwise, any title to or an estate or interest in any other land. Barring dishonesty, all owners who obtained flats from the HDB did so because they qualified for their flats. At the time of acquisition, they owned no other house or flat. Since obtaining their flat. however, they went on to invest in other landed properties. The amending Act now empowers the HDB to reacquire the HDB flats from such owners who have gone on to acquire other property and to improve themselves.

Whilst one accepts the need for empowering the HDB to reacquire the flats in special circumstances, the way in which this power is used in practice has caused hardship. A few cases would illustrate the difficulty. In the first case, an unmarried woman, a Singapore citizen, qualifies for and is given a HDB flat. She lives in it with her parents and sisters, all of whom are permanent residents but with Malaysian citizenship. In due time the owner of the flat marries and moves into the matrimonial house of her husband. Because her husband owned his own house, the woman was asked by the HDB to surrender her flat. The woman is now unable to perform her filial duty to her parents who must leave the flat.

In the second case, an illiterate man qualifies for a HDB flat but purchases it in the name of his eldest son who has an English education. The father provides the entire purchase price for the flat. In due time the eldest son gets married and seeks to transfer the flat back to his father so that he, the son, could apply for his own flat, The HDB says he could not do it under current policy.

In the third case, an unmarried son qualifies for and buys a HDB flat and houses his parents, brothers and sisters. He decides to get married but proposes to transfer the flat to his brother so that his brother could continue to look after his aged parents. He further proposes to apply for a flat for himself and his wife. HDB says, "Under current policy such transfers could not be entertained."

Sir, instances could be multiplied to show how an inflexible application of policy resulted in dispossessed families, due to no fault of these families but due only to changes in Government's housing policy. It would serve the ends of Government's policy if greater discrimination was shown in avoiding genuine hardship when the HDB used its powers of acquisition of flats in given situations.

Sir, I also join in the chorus of support for the Motion standing in the name of the Hon. Minister for Finance.

6.57 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Deputy Speaker, I have listened with deep and absorbing interest to all that hon. Members have said today and on the last Budget day. I thank them for their general support.

There have been very few critical comments but quite a number of useful suggestions. Some of these, such as those relating to Sun Tzu and moral influence, food and cooking (the nyonya cooking) and other matters, require consideration at the pace and deliberation appropriate to philosophy, poetry, songs and cooking. I will therefore do so at my leisure. But at the slower growth rate that we are now experiencing, maybe a lot of us will have more leisure time! Other suggestions are sometimes critical of my own Ministry of Finance's assessment of the economic situation in Singapore and I propose to spend some time replying to them. I have taken copious notes and since I cannot expect equal time with all the Members who have spoken, I propose to concentrate only on highlights.

If I may take the economic strategy, first of all I would like to make some general remarks on the nature of the Economic Survey and the planning and the prospects for 1977. The assessments in my Economic Survey and in the Budget Statement are, of course, to some extent personal or departmental, and it is quite possible that economists in the business and academic sectors may have their own views. In fact, the wealth of data that has now been supplied in the Economic Survey is intended to induce such individual evaluations, if necessary, even to the devising of economic models from, say, banking and university circles, of the economy of Singapore.

So in considering the comments which have been made by, say, the Member for Whampoa, I think it may well be that he would consider his own assessment of the situation as correct. For example, he commented that the improvement in productivity was due to the economy pulling out of recession. This, of course, is a plausible explanation, although my Ministry and I myself differ from such an assessment. In the shipbuilding and ship-repairing industry, for example, there is no doubt that the keener competition which has been due to the recession has increased the productivity in the industry's attempt, not always successful, to maintain their profit margins by getting rid perhaps of their less efficient workers and improving the productivity of the ones they retain,

There are other comments which he made on the decline in the construction sector and the need for the Ministry of Finance to have regard to this in the future. Some of the decline in private sector construction has been due to the lack of demand, for example, there has been a certain glut in commercial buildings, and it would not be possible for the Government to further stimulate commercial buildings. In the hotel sector, of course, it would be something which we would encourage over the next few years.

There was also comment on the private share of expenditure declining over the last one year. This has been due to the fact that because of the private sector's hesitation in capital expenditure the public sector has taken over much of the development work and has consequently increased its share of the Singapore expenditure.

The Member for Whampoa has also made comments on exchange rate policy, or the lack of a statement in the Budget concerning such policy. The exchange rate policy has been constant over the last two years or so. Our efforts have been to maintain stability and an easy money policy, so that there would be sufficient liquidity in the banks to promote development activities. Perhaps it was wrong to assume that there was no need for special mention.

He also suggested that quarterly figures be included in the Economic Survey. Some figures are available of the kind of data we present in the Economic Survey, on a quarterly basis, but not in the full range or the accuracy of it. So it may be some time yet before we are ready to produce these quarterly figures in the annual Economic Survey.

I now go on to trade policy which has been mentioned by quite a number of Members. I think the Member for Jalan Kayu was the first to suggest that there should be a coordinating body for export promotion. Possibly a Trade Development Council may be a solution to the problems which we are facing - how to coordinate the efforts of the Chambers of Commerce, the Singapore Manufacturers' Association and our own Trade Department export promotion efforts. So it is something which we are proposing to give consideration to over the next few months.

The next matter which has been raised related to ASEAN and the development of activities under the ASEAN umbrella. I made a pretty short statement on ASEAN in the Budget Statement because I did not consider that at this stage while there is very considerable ferment and activity among Economic Ministers and by the officials, that there had been sufficient implementation of projects to make a significant contribution to the economy in 1977. It may be that in 1978 or 1979 the effects of the Agreement on Preferential Trading Arrangements on the five ASEAN industrial plants, or the arrangements for ensuring that oil and rice would be available in times of crisis, would bear sufficient fruit to make a considerable impact upon the Gross Domestic Product of Singapore. At the moment, all we can say of ASEAN is that it shows very considerable promise and that we will need to spend very much more time on it.

The economic strategy on manpower was a matter of interest to very many MPs and the need for skills and productivity was generally appreciated. One Member suggested that we should have some regard for unskilled workers, In this respect we have not paid any particular attention to unskilled workers because there is really a shortage of unskilled workers in certain industries like construction and ship-repairing, where we have had to issue quite a number of work permits. So if there is really a considerable number of unskilled workers willing to engage in less attractive jobs, there are already industries waiting for them.

On the responsibilities of management for instituting productivity incentive schemes, I was perhaps misunderstood, or the Member for Leng Kee had not read the first part of my Budget speech which said that productivity incentive schemes were the responsibility of management because they had greater resources and experience in this area and that the rewards for productivity should be in incentives which are to be accorded by the management. The Member for Kampong Kembangan put this matter right, but I am not sure whether the Member for Leng Kee was present when he said that.

There were very many other comments on elements in economic tactics rather than strategy. The Member for Jurong was properly concerned with the difficulties and hardships experienced by his constituents in Jurong. There were comments by the Member for Anson on tourism and brain centre developments. But I will not go into these matters because these are points which can be raised in the Committee of Supply.

There were very many questions raised on income tax, personal allowances, and so on. I think I answered these questions during the debate on the President's Speech and I do not think I need now go into this matter in any detail.

Mr Ho See Beng: Not very detailed!

Mr Hon Sui Sen: The Member for Khe Bong was among those who raised this with some heat. And, of course, I heard the Member for Marine Parade who came up with figures which he referred to as being in a Table(See Appendix II, cols. 907-8) which he would present in Hansard. I look forward to reading this and to be impressed by the figures which he has produced. All I need now say is that I will examine these figures very carefully. I suspect the increase of 6950% in tax liability for the lower income group may have been due to the fact that the tax base was very low. If it is say, $1 then 6950% would be $69. In fact, if you move from zero to $50, that does not make it an infinite increase in the tax. As I say, I will have a very close look at the figures which he has produced for the Cases A. B and C. As for index linkage. I think this is a matter which I would be very reluctant to give any special consideration. I do not know whether this has been the accepted practice in many other jurisdictions, and I am loathe to be the first to start in Southeast Asia, if not, in Asia. There was the question whether I could spare $26 million. The answer is, I can spare it if I can find it elsewhere.

One comment made by the Member for Alexandra was that the tax on cigarettes and drink was not a real disincentive to smoking and drinking. I am, of course, prepared to impose a much higher rate if that is his advice, and I would certainly look further into this matter.

After hearing the Member for Changi, and until I heard the Member for Punggol just now, I thought that perhaps I had given, in vain, a concession on estate duty which no one wanted. But I am glad that this is appreciated in certain quarters.

As for an assurance asked by the Member for Khe Bong that there would be no further taxes or increases in the year, I think he knows by now that Ministers of Finance never give assurances of this kind.

I now come to the question of civil servants. There were some comments on civil servants, and I am glad that the ex-civil servant, who is now the Member for Kampong Kembangan, was here to hold up the flag for the civil servants. I listened with some regret to the Member for Aljunied. I thought that while it is true that civil servants can very often take care of themselves, it is not possible for them to do so in this House. It is a matter for regret that the performance of the civil servants should again be raised for attack, as not all the suggestions of the Member for Aljunied are invalid. In fact, the suggestion for a rotation of staff so as to give civil servants a very broad experience is entirely in accordance with the policy, if not always the practice, of the Government and of the Civil Service. But I think he spoils the value of his suggestions and comments by making quite unnecessary attacks on the civil servants.

The picture of Ministers invariably listening to civil servants who have been in the Ministry for a very long time is not entirely flattering to Ministers. We initiate the policy, and sometimes we even try to implement it, and the civil servants take their orders from us. But I think the Member for Aljunied contradicts himself in the next breath by saying also that the civil servants fear their superiors and try all they can to please them, and that they answer letters to the Press promptly because they are afraid of coming to unfavourable notice. I myself consider that the growth that Singapore has had over the last 18 years since 1959 has been due not only to the Ministers and, of course, the Members of Parliament who represent the People's Action Party -although they should be given the credit which is their due, this growth has also been due to the fact that we have a good and efficient Civil Service. Like all organisations, of course, there is always room for improvement.

There were also some criticisms of them because they hold office in the boards of private or public companies and in statutory boards. Very often these are a part of the duties of the Civil Service. For example, the CPF is a statutory board, but it is a part, as much as any other function, of the Ministry of Labour. In the same way, some of the industries which the Ministry of National Development has set up, like Food Industries and so on, are really for carrying out of the work of the Ministry of National Development. For example, in the experimental work which they are doing on the breeding of pigs in flatted buildings it was the Treasury that insisted that they should set up a separate company in order that all the elements of costs and of revenue could be properly accounted for so that one can see the distinction between what is being done in that company and what would normally be done by officers in the departments of the Ministry of National Development.

As for the accountability of the civil servants, there is some kind of impression that they are not subject to any control. The fact is that their performances in these companies and in the statutory boards are most certainly monitored by the people who appoint them. In the case of the Ministry of Finance companies and statutory boards, they report to the Minister for Finance. I think the basis of assessment of their performance is even more rigid because it is properly quantifiable by the profits which are made in companies or by results in economic development which ensue from their appointments to the statutory boards. For example, I think a board as vital as the Economic Development Board would be assessed even more closely than a normal department of the Government.

I want to end my statement by a reference to the growth rate of 6-8%. Some Members thought that the growth rate was unduly optimistic, that the mildly rosy nature of the consensus which has been reached in the OECD and elsewhere is not entirely justified. Well, this may be so. This is again a matter for individual judgment. In 1978, at about this time of the year, I think we shall see whether or not the estimate of 6-8% which we have made is correct. The Member for Kampong Kembangan has suggested that there should be cautious optimism. I think we are being cautious, optimistic and, at the same time, realistic. We had a 7% growth rate as the possible growth for Singapore. We would be cautious by putting it at 6% and optimistic at 8%. So we said 6-8%. On that basis we should not be too far off the mark, But I think that this time next year I will be able to know whether or not I was right, whether the Member for Kampong Kembangan is satisfied, or whether the Member for Serangoon Gardens was correct in saying that it was too optimistic.

To close this debate, may I say that since the Member for Kampong Kembangan has spoken of football in this debate, we all need to have the highest morale in the business of economic development and that we, Ministers and MPs, as well as the Civil Service, should try to maintain this very high morale. Perhaps an Empress Place roar, in the same way as the Kallang roar, will help to achieve our objective.

Question put, and agreed to

Resolved,

That Parliament approves the financial policy of the Government for the financial year 1st April, 1977 to 31st March, 1978.