ADDENDA TO PRESIDENTIAL ADDRESS AT THE OPENING OF THE SECOND SESSION OF THE FOURTH PARLIAMENT ON TUESDAY, 26TH DECEMBER, 1978 MINISTRY OF FINANCE

Economic Policy

For the next few years our aim is to achieve a real growth rate for the economy of at least 6 - 8% per year. This will enable us to employ all the young people joining the labour force each year, and raise our standard of living. We can do so only if international trade keeps growing, and prices of our goods and services are kept competitive in world markets.

Monetary and Fiscal Policy

We shall maintain the Singapore dollar as a strong and stable currency. The money, bond and capital markets will be further developed so that funds will be readily available for investments in Singapore and the surrounding region. With the rapid expansion of Singapore as an international financial centre, it is important that there be high ethical standards among company directors. We will, therefore, be shortly introducing proposals to amend the Companies Act to give better protection to investors.

We shall continually review the public sector's role in the economy. In earlier years we invested in commercial enterprises in areas where the private sector did not take the lead. In the next few years, we will consider selling off parts of our earlier investments in some enterprises which have already fulfilled their pioneering roles.

Our financial administration is being sharpened. The first phase of a system of programme-type budgeting has been introduced in the current fiscal year. We shall be going on to the second phase to review and determine budgetary programmes for each Ministry and Department. This will enable the performance of each Ministry to be examined against the targets set.

We shall continue to depend largely on economic expansion to obtain the increased revenues to meet public expenditure. Where tax incentives are necessary to encourage investments in specific sectors, they will be given.

Over the years, some of our taxation policies have become moribund and incompatible with changing circumstances. We shall, therefore, be undertaking a detail.ed review on estate duty. In the field of income tax, we shall work at broadening the base by getting more taxpayers such as the self-employed who can afford to and should pay tax to do so. This will make taxation more equitable and less of a burden for existing taxpayers.

Industrial Development

We shall want to get more industries to come to Singapore, especially those requiring higher skills. We shall also actively encourage industries already here to upgrade their products or processes. We shall try to help those labour intensive industries which want to relocate themselves overseas to do so. Through the Economic Development Board, we shall seek to promote such industries as industrial electronics, aircraft parts, metal and industrial machinery, office equipment, optical products, automotive components, scientific and medical instruments, ship equipment, and telecommunications equipment. Our target is to attract $450 million worth of new investments next year.

Even though we have adequate stocks of factory buildings and industrial land, we shall continue to build a little ahead of demand, so that new industries can start their operations quickly. We shall seek to build more clean industries near population centres to provide jobs closer to homes. We shall expand our industrial training centres to train our workers in higher skills. Next year, another training centre to be set up jointly with the Japanese Government will be in operation.

In the next few years we intend to give emphasis to industrial research. We shall aim at producing ever better products. Industries will be encouraged through the Product Development Scheme to do more design and development work.

We need to continue to keep our goods competitive in the international market. We shall continue with the policy of orderly and moderate wage increases established by the National Wages Council. Productive workers will be rewarded and lazy workers penalised.

We shall actively encourage more of our young professionals to become industrial entrepreneurs. Through the Local Entrepreneurial Scheme managed by the Economic Development Board, we will invest in or lend money for industrial projects put up by our local engineers, technicians or industrial managers.

Trade Development

Our objective is to make sure that our exports grow. We shall, therefore, have to be on guard against protectionism by the richer countries. We must sell our products to more and new markets. We shall improve ASEAN economic cooperation. We shall work closely with the private sector. Through the Trade Development Committee we shall encourage trade promotion policies. We shall ensure that financial help for our exporters provided by the Monetary Authority of Singapore in rediscounting export bills, the Development Bank of Singapore for long term loans to sell ships, and the Export Credit Insurance Scheme to cover export risks, all continue to be available on attractive terms. Where further incentives are necessary to promote trade, these will be considered.

Tourism

We shall encourage more tourists to come to Singapore and to stay longer. In 1979, our tourist arrivals are expected to exceed two million. We shall promote more conventions for business and professional groups, and encourage more hotel construction to ensure that hotel rates remain competitive. Statistical Development

Next year we shall be actively preparing to conduct a Census of Population in 1980. The Census, conducted every ten years, will provide a detailed personal, social and economic profile of the population. The data will be of great help to Government to shape policies to meet the real needs of the people.

The Civil Service

Terms and conditions of employment will be made competitive with the private sector. It is important to ensure that at least a third of our ablest officers remain to serve the public sector. To increase productivity in the service, we shall increase mechanisation and computerisation of Government operations.

HON SUI SEN Minister for Finance