Hansard, 1955-11-09

I have to inform the Assembly that I granted permission to Mr Ong Piah Teng to be absent from the Assembly on Monday, 7th November 1955.

asked the Chief Minister if and when the Singapore Legislative Assembly Elections Ordinance, 1954 (No. 26 of 1954) will be amended.

Government will consider amending the Ordinance after the constitutional talks in London next year.

Will the Chief Minister tell us if he has any indication as to whether there would be constitutional changes after the London talks next year?

asked the Chief Minister if he will make a statement explaining the economic and agricultural development of Singapore proposed by Government; and the scope and extent of external aid which it has been promised or is expected to receive financially and materially through the Colombo Plan in pursuit of such developments.

If it please you, Mr Speaker, Sir, the broad field of economic and agricultural development of Singapore is at present under consideration by my Economic Adviser and the various Ministries in the light of the report of the International Bank. After the Council of Ministers has considered the recommendations of the Economic Adviser and the Ministries involved, Sir, announcements of policy will be made. That is the first part of the question, Sir. As regards the second part dealing with the Colombo Plan, Sir, the Member for Seletar (Mr Nair) will be aware of the generous offer by the Australian Government of a milk reconstituted plant valued at (Straits) $700,000. There is, of course, the question of training facilities, Sir. Over the period 1951 to 1955, there have been 79 students from Singapore who have been awarded scholarships under the Colombo Plan on a variety of subjects, and the question of further scholarships and training will be pursued. In addition, we have the right to apply for experts, and this we have been doing and will continue to do. For the rest, Sir, I would refer the hon. Member to a reply which I made in this Assembly in answer to a question from the Member for Tanglin (Mr John Ede) on matters of trade and industry - a reply which was reported in the Official Report, Vol. 1, No. 6 of 29th June, 1955; and a further reply to the Member for Seletar, Sir, on Rural Veterinary and Animal Husbandry Services, which was reported in the Official Report, Vol. 1, No. 9 of 26th July, 1955.

Will the Chief Minister inform us from where his Government propose to purchase the powdered milk to operate this milk reconstituting plant?

I thank the hon. Member, Mr Speaker, Sir, for giving me this opportunity to indicate to the Assembly that at the time the plant was offered to the Singapore Government, the Australian Minister for External Affairs, Mr Casey, indicated that there were no ties at all to the offer, and that although Australia did sell powdered milk, there was no question of the Government being tied to the purchase of Australian milk. We were entirely free to obtain our supplies where we thought it was most advantageous.

Will the Chief Minister inform us if there was an offer made of free powdered milk for a few years to operate the plant?

asked the Chief Secretary whether the Government has any plans formulated to encourage the tourist industry in Singapore; and whether it is intended to set up a Travel Association or similar organisation for this purpose.

Yes, Sir. This Government regards Singapore, with its unique geographical position, its diverse cultures and its amenities, as a natural and most desirable centre for tourists. In consultation with the commercial interests concerned, whose co-operation is essential to success, it is intended to examine the most effective form that a central travel organisation or bureau could take. Among positive action already taken, Singapore has already joined the International Union of Travel Organisations, a subsidiary of the United Nations Organisation, and the Pacific Area Travel Association. The Public Relations Office has over the past years produced poster and publicity material and has worked in close association with travel agencies concerned with tourist publicity. The shooting of a tourist colour film begins this month.

Sir, is the Chief Secretary aware that the Public Relations Office is not properly equipped to deal adequately with the whole scope of the tourist trade?

There was no suggestion in my reply that the Public Relations Office, in itself, would be an adequate central tourist bureau. There will have to be something much wider in scope than that.

asked the Financial Secretary if he will state the amount of money spent out of the public funds to provide transport facilities to school children and others due to the strikes in the Singapore Traction Company for the following periods: -

The cost of providing these facilities has been as follows: -

Will the hon. the Financial Secretary explain why this expenditure was not brought to this House for approval under a resolution approved by the Assembly on the 25th of May, to the effect that any new service costing more than $10,000 should be approved by the Assembly?

The provision of these services, Sir, was a matter in the public interest, and we were justified in approving payment of these services from advances below the line. We will come to the Assembly at the first convenient opportunity to take a vote for that amount.

asked the Minister for Communications and Works whether he will consider lifting the 30 m.p.h. speed restriction on the dual carriage-way sections of Bukit Timah Road and imposing it on other sections.

The power to impose speed limits rests with the Commissioner of Police and with the City Council or Rural Board as the case may be. It is peripheral to my Ministry and not central. I understand that the Commissioner of Police considers that the present speed limits on the Bukit Timah Road, and indeed in other parts of the rural areas should be re-examined to see how far they should be extended or removed, and before arriving at any conclusions, the police have it in mind to consult responsible bodies such as the Automobile Association, the Singapore Safety First Council, and the rural district committees.

Is the Minister aware that the speed restriction along these dual carriage-ways is not being respected, and will he not agree that it is now safe and sensible to travel at more than 30 miles an hour? Mr Francis Thomas rose -

Order, please. The second part is a matter of opinion. You need not answer if you do not wish to, Mr Thomas.

Mr Speaker, Sir, I was going to say the same! I am aware that it is not always respected.

asked the Minister for Education whether the Government school building programme of 23 primary schools and one secondary school due for completion in 1955 is up to schedule.

The school building programme referred to was a forecast by the Public Works Department in April of the number of schools to be completed this year. This was one secondary school and 23 primary schools. The secondary school and 11 primary schools have been completed. One more primary school will be ready in December. The remaining primary schools are expected to be completed as follows: two in January; three in February; two in March; and four in April. But every effort is being made to speed up this delayed programme.

asked the Minister for Education (i) whether the work of construction of all six secondary schools approved in the 1955 Estimates has commenced; (ii) how many students each school will accommodate; and (iii) the approximate date for the completion of these schools.

The six secondary schools referred to are presumably Cedar Avenue, Bukit Timah, Kim Seng Road, Dunearn Road, Raffles Institution and Raffles Girls' School. Plans for Cedar Avenue and Bukit Timah have been approved and tenders are to be called for. For Kim Seng Road and Dunearn Road, layout plans are with the Commissioner of Lands, but negotiations for the purchase of the sites have not been completed. For Raffles Institution and Raffles Girls' School, plans have been held up because of a change in the policy of resiting Raffles Institution.

Sir, will the Minister give an assurance that all these secondary schools not so far started will be completed in 1956?

They will be completed as early as possible in 1956.

Sir, will the Hon. the Minister kindly prepare a progress report of the building programme of schools and submit it to the Assembly for the information of all Members?

It is a different question, Mr Nair.

asked the Minister for Education (i) how many students in Government primary schools are applying for entry into Government secondary schools in January 1956; (ii) how many students can, in fact, be selected for entry to such schools because of limited accommodation; (iii) whether he is satisfied with the present method of selection; and (iv) what plans the Government have in mind to give further education to those students unable to obtain entry.

The answer to the first part of the question is 3,998; and to the second, not less than 2,000. To the third part of the question - yes, the method of selection was determined by a Board of Examiners consisting of representatives of the Department, the University, the Training College and heads of secondary and primary schools. They have been at great pains to make the examination as fair as possible. The system, of course, will be continually reviewed in the light of experience. To the fourth part of the question - for boys, there is a Junior Technical School. For both boys and girls, evening classes will be started at the new Junior Technical Schools as far as possible to meet the demand. There are, as the House knows, some children now in primary schools who are debarred from taking the secondary school entrance examination because they are over-aged. There are many good reasons why they should not be admitted to Form Two, but if they are of more than average intelligence for their age, it is possible that they can cover the secondary school courses in three years. Heads of schools are therefore being asked to recommend suitable candidates who will then be required to take a special examination for admission to Form Three.

Sir, is the Minister aware that if the six secondary schools allowed for in this year's Estimates had been completed, there would be no shortage of accommodation for students in secondary schools in 1956?

This involves a lot of data, Sir, and I am not prepared to answer the question yet.

asked the Minister for Local Government, Lands and Housing with regard to the resettlement of displaced squatters -

Mr Speaker, Sir, there are altogether six parts to this question, and I shall reply to them according to the form they are tabulated on the question paper. (a) There are at the moment altogether nine areas available for resettlement, and of these, five are occupied. The other four areas are being prepared for allocation and should be ready for occupation next year. (b) In Ama Keng we have 738 acres; Jurong, 14th milestone, 138 acres; Chua Chu Kang, 14th milestone, 140 acres; Jurong, 12½ milestone, 260 acres; Chua Chu Kang, 13½ milestone, 44 acres; Sungei Tengah, 373 acres; Tampenis, 10th milestone, 126 acres; Boon Lay Road, 14th milestone, 25 acres; Bedok, 325 acres. (c) The class of people who have taken advantage of the allotments in resettlement areas are farmers, either full- or part-time, rural dwellers, and people engaged in cottage industries. (d) There are actually two kinds of allotments. One, house lots. For these, settlers are being given between 6,000 and 10,000 square feet allotments; and the second one is farm lots. These usually range between one and three acres. (e) Rentals. Rentals vary with the areas. For house lots in Jurong and in Boon Lay Road, they are being charged between $30 and $34 per annum. In Tampenis rentals are $54 per 10,000 square feet, and in Bedok $24 to $28 per lot. For farm lots, the rentals are as follows: In Ama Keng it is between $10 and $26 per annum; in Jurong and Boon Lay Road $16; in Tampenis $27, and in Bedok between $36 and $48. The rentals are based on the cost of acquisitions and development of the land. (f) Occupation is on a Temporary Occupation Licence for the first two years of occupation at half the rental. After two years, if the land has been developed, a 30-year lease will be issued. No assignment or subletting of the land may be made without written permission from the Commissioner of Lands.

I would like to ask the Minister what class of squatters are allowed to occupy the land, that is, squatters to be evicted from Crown land, or squatters to be evicted from privately-owned land?

Mr Speaker, Sir, within the meaning of the interpretation of the term, there is no such thing as a squatter in Singapore, but people who are allowed to use the resettlement areas in Singapore are actually people who have been compelled to evacuate from Government property.

I just heard, Sir, the Minister say that each family or unit is only allowed a maximum of three acres or something to that effect. Has the Minister considered that some families may comprise a man and his wife, two or three stalwart sons and two or three tomboy daughters? In that case, I think three acres would not be sufficient for them.

Mr Speaker, Sir, the question of allotting farmland actually depends upon the acreage, which the farmer had at his old place of residence.

Does the Minister propose to do anything about people who are evicted, but not from Crown land?

Mr Speaker, Sir, I am not in a position to answer the question.

asked the Minister for Local Government, Lands and Housing whether he is aware that the road system in the Ama Keng Resettlement Area is not adequate; and whether he will take steps to construct more roads there.

I am aware that the road system not only in Ama Keng, but also in other rural areas, is not adequate. With regard to Ama Keng, the matter is receiving the attention of the Government. The Land Office has the matter in hand and it is proposed to carry out shortly a survey to determine what improvements to the roads and drains are necessary.

Sir, I would like the Minister to give preference or priority to Ama Keng, otherwise -

Order, Mr Goh Tong Liang. Will you frame your observations in the form of' a question?

I will ask the Minister to give priority to Ama Keng, because it is so popular among the whole lot.

asked the Minister for Local Government, Lands and Housing how many houses built by the Singapore Improvement Trust have separate dining rooms.

Mr Speaker, Sir, I understand from the Singapore Improvement Trust that Trust houses have not been designed with a separate room to serve as a dining room. As a result, most of the houses have a room, which serves both as a living room and as a dining room.

Sir, could the Hon. the Minister say whether he is satisfied with the present standard of accommodation provided by the Singapore Improvement Trust without dining rooms, and whether he would look into the matter and see whether separate dining rooms could be provided in future housing schemes?

asked the Minister for Local Government, Lands and Housing whether he will take steps to amend the Municipal Ordinance so as to empower the City Council to forgo assessment rates on land and buildings used for the Singapore Improvement Trust housing schemes, in order that the monthly rental of all Singapore Improvement Trust houses can be reduced and brought within the earning capacity of the middle and poorer classes of the community.

Mr Speaker, Sir, no, it is not proposed to amend the Municipal Ordinance to waive City Council assessment rates on land and buildings used for the Singapore Improvement Trust housing schemes, but other measures for reducing the rentals of S.I.T. houses are at the moment receiving the attention of Government.

Would the Minister inform us if the lowering of the interest rate on Government loans to the S.I.T. is receiving the attention of his Government?

Mr Speaker, Sir, the answer is in the affirmative.

Sir, will the Minister kindly indicate what steps are being taken in regard to his answer to my question?

Will the Minister give us an indication when his deliberations on the lowering of the rents of S.I.T. houses will produce results?

Mr Speaker, Sir, I am not in a position to say when the results will be out.

asked the Minister for Local Government, Lands and Housing how many families it is planned to move from the Queenstown area to prepared plots at (a) Jurong and (b) Tampenis: how many have already moved to these plots; and whether he is aware that any reluctance to move is largely due to the compensation being offered.

Mr Speaker, Sir, it is planned to move, in the first instance, 41 families from Queenstown to prepared lots at Jurong and Tampenis. 36 families will be moving to Jurong and five to Tampenis. 32 families for Jurong have accepted the offer and taken the cash and credit note for material. Five houses have already been erected in Jurong; eight others are being constructed, and it is expected the rest will start building operations in the immediate future. None have completed removal, which will no doubt take place when building operations are completed. Four families allotted land at Tampenis have accepted the offer. None have moved. With regard to the last part of the question, Sir, I am aware that there was some reluctance to move in the early stages owing to what was claimed to be inadequate payment. I am satisfied that the ex-gratia payment offered is of a generous nature.

Sir, can the Minister tell us if he is aware that there is a difference of compensation paid to squatters in the Queenstown area?

Mr Speaker, Sir, I shall require notice of that question.

Sir, is the Minister aware that the Jurong plots will require months of hard work before they can become productive, and will he consider the advisability of giving some kind of subsistence allowance to farmers until such time as the land can yield an adequate crop?

Mr Speaker, Sir, subsistence allowances are already being offered to farmers at the Jurong resettlement area.

"to increase the rates of Estate Duty", presented by the Financial Secretary (Mr T. M. Hart); read the First time; to be read a Second time on Tuesday, 22nd November, 1955, and to be printed.

Mr Speaker, Sir, I formally move that at its rising today the Assembly do stand adjourned to the 21st of November, 1955, at 10 a.m.

Sir, I rise to second the motion.

Question put, and agreed to. Resolved, That the Assembly, at its rising today, do stand adjourned to the 21st of November, 1955.

Order for Second Reading read.

Sir, I have His Excellency the Governor's authority to move, "That the Bill be now read a Second time". The Draft Estimates of Revenue and Expenditure for 1956, which form an attachment to the Appropriation Bill, have now been in the hands of hon. Members since Monday. At the same time a Sessional Paper (Command No. 28 of 1955) was circulated. This paper gives a brief description of the Draft Estimates of Revenue and Expenditure and it is hoped that it may serve as a guide to hon. Members in their consideration of the Draft Estimates. Before I deal with the Draft Estimates in detail, hon. Members will perhaps wish me to comment briefly on the workings for 1954, the possible outturn for 1955 and on the financial position generally. These matters are covered in some detail in the Sessional Paper. The accounts for 1954 show a deficit of $41.6 millions. Revenue realised $207 millions instead of the estimate of $214 millions, due mainly to the fact that the collections of income tax fell $13.5 millions below the estimate of $70 millions. Expenditure amounted to $248 millions as against an estimate of $240.5 millions. This included two large items of special expenditure which were unforeseen when the estimates were prepared. The first was for $36.4 millions in respect of the settlement of the Straits Settlements Assets and Liabilities. The second was for $14.5 millions in respect of a payment on account of the purchase of the Oriental Telephone and Electric Company. If these large items are left out of account, normal expenditure amounts to $197.9 millions of which $14.5 millions represents expenditure under Public Works Non-Recurrent and a notional surplus of $9 millions can be shown. With regard to 1955, it appears likely that there will again be a surplus but this time of only $2 millions. Revenue is likely to fall short of the estimate of $208 millions by $7 millions. It is now clear that collections from income tax were over estimated at $70 millions. It is unlikely that more than $56 millions will be collected. 1954 was a much less prosperous year, particularly for companies, than was thought when the Estimates were drafted. This shortfall will be offset to a certain extent by increased collection on Customs Duties and other items of revenue, but the net collection of revenue is unlikely to exceed $201 millions. It also appears likely that expenditure will also fall considerably short of the estimate. On the basis of actual expenditure to the end of August, it appears that total expenditure will amount to about $199 millions, including a contribution of $20 millions to development expenditure. The main savings on estimated expenditure have been effected under Head: Defence Services. There has been unavoidable delay in the construction of seaward defence vessels and inshore minesweepers for the Royal Malayan Navy, in addition to other defence expenditure and works, and savings of over $18 millions are expected under this Head. This expenditure will, of course, be carried forward to future years. Savings of about $2.5 millions are expected under Head: Education as well as Head: Medical and Health, and over $1 million in the case of Public Works and Postal Services, due mainly to inability to fill appointment and to savings on Special Expenditure. The small surplus of $2 millions expected in 1955 compares with surpluses of $42 millions in 1952, $52 millions in 1953 and, as already explained, a surplus on normal working of $9 millions in 1954. It also appears probable that development expenditure will fall short of the original estimate of $60.5 millions by some $16 millions and that a balance of about $30 millions, instead of $16.4 millions, will remain in the Development Reserve Fund for use in 1956. Under-expenditure has, in the main, been due to difficulties in obtaining and clearing sites and to delays in the delivery of essential material. In addition, a total of $10 millions will have been advanced to the Singapore Improvement Trust by the end of 1955 for the construction of low cost housing. Here again, the efforts of the Trust have been seriously frustrated by difficulties in clearing sites for building. A statement of the Estimated Assets and Liabilities on 1st January, 1956, is given on pages 6 and 7 of the volume of draft estimates. This statement is discussed in some detail in the Sessional Paper. Perhaps the main point to note is that the Special Reserve Fund which, with interest added, stood at $106.6 millions in the last Statement, has now been revalued at $96 millions, due to the general fall in value of the gilt-edged securities in which it is invested. The Development Reserve Fund, to which interest has also been added, has been reduced from $51.9 millions to $30 millions by drawings for development and revaluation, although in this case, since the Fund is invested in short-term securities, the fall in value has been less marked. Generally, the position of the Colony's finances as they will stand at the end of 1955 must be regarded as sound. The public debt is very small and adequate provision continues to be made to service it. There is a solid Special Reserve Fund which serves as the sheet anchor of the Colony's finances and which can only be drawn upon by resolution of the Assembly. There is a General Revenue Balance of $130 millions. Attention should however be drawn to two points. The first is that approximately $109 millions of the General Revenue Balance is bound up in long-term loans, the bulk of which are repayable on an annuity basis over a period of 60 years. Therefore, of the General Revenue Balance, only a small part is liquid and available for use in the near future. In fact, a truer picture of the financial position might be shown if these loans were charged to expenditure and the repayments credited to revenue year by year. This matter is now under consideration. The second is that, while the position at present is sound, we are about to enter into a period when mounting recurrent expenditure and the needs of development, particularly in respect of housing and the social services, will make great demands on our resources. It is when we look at the Estimates for 1956 and the probable position in later years that we see the financial position of the Colony in its true perspective. The Draft Estimates of Revenue are described in some detail in the Sessional Paper. The estimates total $208.4 millions and represent as accurate an estimate as it is possible to give of the revenue which is likely to accrue in 1956, on the basis of existing taxation. Generally, they follow very closely on the pattern of previous years. The fact that 1955 has generally been a more prosperous year than 1954 for commercial interests has been taken into account in estimating income tax collections at $65 millions, compared with actual collection of $56 millions in 1954 and estimated collections of $57 millions in 1955. In estimating collections from Customs Duties, account has been taken on the one hand of the fact that the effects of a Federation boom are usually delayed in reaching Singapore, and, on the other, that the present price of rubber may not be maintained in 1956. Customs Duties of all kinds total over $73 millions and represent approximately one-third of the total revenue. Other items of revenue vary little from the estimates of previous years. Before commenting on the Draft Estimates of Expenditure, I should like to draw attention to certain changes in the format of the Estimates. New Heads of expenditure have been created for the various Ministries. The various departments in Ministerial portfolios have been grouped in alphabetical order after the Ministry Head. Head: Mis- cellaneous Services, which totalled $30 millions in 1955, has been abolished, and the services previously grouped under this Head have been transferred to other appropriate Heads. This fact should be borne in mind when what appear to be extraordinary increases in expenditure are noted under other Heads. The divisions of the old Department of Commerce and Industry have been reconstituted as independent departments under the Ministry of Commerce. The estimates of expenditure total $231 millions, including a contribution of $20 millions to development. The first draft estimates submitted by departments, excluding any contribution to development, totalled $232 millions. They were subsequently pruned to $211 millions. In making these reductions, the following objects were kept clearly in mind: the need to limit ordinary departmental recurrent expenditure to the minimum required for the efficient discharge of Government business: the need to make adequate provision for the expansion of the social services: and the need to augment the funds likely to be available for development by a substantial contribution from revenue. Action towards these ends was taken as follows: - In the case of ordinary departments all applications for new appointments were re-examined. Only those were passed for entry which could be shown to be necessary for the expansion of a service for the public, e.g. postmen; or for the manning of a service which had been provided in a previous year, e.g. crew for a new launch; or which could be shown directly to save expenditure or increase revenue, e.g. collection of income tax; or which were otherwise imperative for the efficient discharge of the government business. With regard to recurrent expenditure, in so far as this was possible, provision was limited to, if not reduced below, the 1955 Estimates. As will be seen from an examination of the volume of the estimates, special expenditure has been cut to the bone. With regard to the social service departments the needs arising from the rapid expansion of these services were appreciated. The ordinary estimates for the Medical Department are, in total, $1.4 millions in excess of the 1955 figure. The estimates for the Department of Education, if one takes account of increased provision for grants in aid and the contribution to the University transferred from Head: Miscellaneous Services, are also very close to the 1955 figure. As I have said, the net result was that the estimates of expenditure were reduced to $211 millions and it was possible to make provision for a contribution of $20 millions for development which was required if essential development projects were to be financed. I have dealt with the ordinary estimates of expenditure in the Sessional Paper under the main divisions of Personal Emoluments, Other Charges Annually Recurrent and Special Expenditure, and it might be appropriate if I now deal with them on a departmental basis, drawing attention to points of interest on that basis. A table showing the pattern of estimated expenditure is given on page 7 of the Sessional Paper. Further details of departmental expenditure on a percentage basis are given in Appendix A of the volume of the Estimates. The main points of interest arising from that table are the steady growth of expenditure on the social services and the marked rise in respect of education in 1956. Turning to the various Heads of Expenditure, the new Ministries require approximately $1 million. Under Head 2: Pensions, increased provision is required for pensions generally and for commutation of pensions. These increases alone make up over $700,000 of the total increase of $1 million under this Head. The provision made under Head 3: Charitable Allowances, follows the usual lines. The provision for Family Planning has been increased by $25,000 and I am asked to state that this item will be the subject of a free vote in the Committee of Supply. $300,000 has been provided as a contribution towards the capital cost of a new hospital building for S.A.T.A. Under the Social Welfare sub-head, the contributions to S.A.T.A. and voluntary institutions for children have been increased. With regard to Head 6: Legislature, I understand that certain additions to this Head will be moved in Committee, arising from increases of staff approved by the Standing Committee. Under Head 10: Audit, provision has been made for certain new appointments but the cost of these is largely covered by increased audit fees. Estimated Expenditure under Head 12: Chief Secretary has increased from $2 millions in 1955 to $5.7 millions in 1956. The increases, which are almost entirely due to services transferred from old Head: Miscellaneous Services, are explained on pages 4. 5 and 6 of the Sessional Paper. Under Head 14: Chemistry, provision has been made for the first time for the Inspectorate of Dangerous Materials, an essential service in a city like Singapore. The provision under Head 16: Defence Services, has been very substantially reduced by eliminating from the estimates all provision, which is unlikely to be spent in 1956. The planned development of the Defence Services has, of course, not been interfered with. Under Head 18: Botanic Gardens, provision has been made for the first time for a Nature Reserves sub-department which will give effect to the provisions of the Ordinance. Police Personal Emoluments have increased by $900,000. 69 new appointments appear in the estimates of which 20 were approved last year. Other Charges Annually Recurrent expenditure has been kept within the 1955 figure, despite a substantial increase in the cost of City Services and provision for contributions to the Central Provident Fund. Special Expenditure is only slightly in excess of the Estimate for 1955. Provision is made under Head 27: Treasury, for the contribution of $20 millions to development. It may be argued that such contributions should not be made from revenue, that capital expenditure should be met from loans, and that the burden of repayment should be shared by all who will benefit from it. The answer to this argument is that the money is required not only for capital development in the ordinary sense of the term but also for special development expenditure, as will be seen from the estimate; that when it is for capital development in the ordinary sense, it is required to build schools and hospitals for the present generation; that future generations will probably have to bear an even greater burden, and that our development requirements are such that we will have difficulty in meeting them, not because our credit is in doubt but because the capacity of the loan market is limited. Contributions from revenue are therefore required as long as we can afford to make them. Provision is also made for the first repayment instalment of the War Damage Interest Free Loan. Under Head 31: Income Tax, provision is made for additional staff in connection with the planned expansion of the department, and under Special Expenditure for increased staff for the investigation of tax evasion. Under Head 45: Land and District Offices, provision is made for the new Land Titles Registry. A sum of $796,900 is revoted for the acquisition, drainage and development of land for food production. Of particular note is the fact that no contribution is made to the Rural Board in respect of Other Charges Annually Recurrent expenditure in 1956, the Board having increased its revenue by $900,000. This is a most gratifying move on which the Board is to be heartily congratulated. Last year's contribution in this respect was $405,000. A contribution of $632,000 is made under Special Expenditure, compared with $1.3 millions in 1955. Of this sum, $254,000 is revoted. In addition, $4.4 millions is provided for development compared with $3 millions in 1955, of which $857,000 has been revoted. Under Head 48: Education, Personal Emoluments have increased from $18.7 millions to $20.2 millions. 964 new appointments have been added, mainly for probationary teachers. This gives a clear idea of the rate of expansion of the department. There has been a substantial increase in the provision required for appointment allowances. The most spectacular increase in estimated expenditure in the whole estimates occurs under Other Charges Annually Recurrent in this Head. The contribution to the Education Board has been increased by $9.4 millions. This is entirely due to an increase in the provision for grants in aid to schools, which has been increased by almost $10 millions. As hon. Members are aware, a scheme for the re-organisation of vernacular education is under consideration and awaits the recommendations of the All-Party Committee. It is impossible at the present juncture to say exactly what the recurrent cost of implementation of this scheme will be. It is, however, likely to be of the order of the cost of full aid on the present basis to all vernacular schools and provision on this basis has been entered in the estimates. It is desirable that this should be done so that the public can see clearly what the cost of vernacular education is likely to be. Put bluntly, it will add about $10 millions to existing costs and from now on, the estimates of expenditure will be increased by that amount. In addition, a provision of $366,000 is made in respect of the Provident Fund and $250,000 has been provided for the cost of staff for the Polytechnic in 1956. Under Special Expenditure, a contribution of $425,000 is made to the Education Board, compared with $1.9 millions in 1955, and $1.4 millions is provided in the Development Estimates. Provision of $2.3 millions is made as Singapore's contribution to the cost of the University in 1956. This was previously shown under Head: Miscellaneous Services. The estimate of expenditure for the department in 1955 was $33.7 millions. If the increased grant in aid to schools and the contribution to the University are excluded, the total estimate in 1956 is $34.5 millions. Under Head 52: Medical and Health, provision is made for 560 new appointments. These are spread throughout the many departments and divisions of the Medical Department and reference must be made to the Estimates to find out where and what they are. In all, personal emoluments total $18.5 millions as compared with $16.8 millions in 1955. Recurrent expenditure totals $8.1 millions compared with $8.2 millions in 1955. The contribution to the Hospitals Board and Tan Tock Seng are reduced below 1955 levels. Again the special expenditure contribution to the Board is reduced from $1.5 millions in 1955 to $979,000 in 1956. In all, Medical and Health expenditure totals $28.8 millions compared with $27.4 millions in 1955. Under Head 56: Social Welfare, provision for Public Assistance has been increased from $4 millions to $5 millions. There has been some re-organisation under Head 58: Civil Aviation. The Regional Headquarters has been disbanded and the Department is now organised on a Singapore basis. The Regional Air Traffic Control organisation however continues. Increased provision in staff and recurrent charges has been made for the Singapore Airport, which is now in operation. The ambition of the Director-General is to run the Terminal Building on commercial lines and make it pay its own way. The total provision under Head 62: Public Works Recurrent has been reduced from $6.9 millions in 1955 to $6.5 millions in 1956. There is a deficit of $22.7 millions in the ordinary Estimates of Revenue and Expenditure, a matter on which I will touch later. The Development Estimates are contained in a separate volume which has been circulated along with the volume of ordinary estimates. The original estimates of development expenditure submitted by departments totalled $75 millions, including $38 millions for capital works and $37 millions for other development expenditure. It was quite clear that funds would not be available for development expenditure on this scale, even if it could be undertaken. In the end, the estimates were cut to the more reasonable figure of $53.6 millions, which now appears in the Draft Estimates. In considering the financial aspects of the Development Estimates, it was clear that the only funds likely to be available were the balance in the Development Fund and as substantial a contribution as could be made from revenue. Any funds which we could borrow in 1956 - and we will have to borrow in that year - would be required for other commitments such as housing, telephone development and similar matters which might total as much as $35 millions. It was therefore necessary to frame a development budget within a total of about $50 millions to which would be added any Colonial Development and Welfare Funds accruing during the year. In the end, the Development Estimates provided $24 millions for Special Development expenditure including purchase of land, cost of resettlement, contributions to Boards and similar projects, and $29.6 millions for capital works, of which $13.3 millions represent revotes. Emphasis has been placed on social service development, and it will be seen that 34 per cent of the money available for capital works has been devoted to Education and 24 per cent to Medical and Health. Although every possible effort has been made to provide for projects in order of importance and priority, it is inevitable that some very important projects have only been given a token vote or omitted altogether. It is possible that, by the middle of the year, savings will have become available because of the inability of the Public Works Department to make the progress which was expected on certain major items. Should this prove to be the case, and the savings are not required for other purposes, the authority of the Assembly will be sought to switch any available funds to priority projects for which it has not yet been possible to make provision. In this way, it is hoped to make the maximum use of the funds likely to be available in 1956. As I stated earlier, there are other commitments of a capital nature in addition to those appearing in the development estimates. Funds for the construction of low rental housing will have to be supplied to the Singapore Improvement Trust. It is hoped that the Trust will be able to build new units to a value of at least $18 millions in 1956, although much will depend on whether some solution can be found for the problem of clearing suitable sites. A sum of about $7 millions will be required for essential telephone development. $4 millions will be required as a loan to the City Council for the construction of approach roads to the new Kallang Bridge. Other commitments such as flood alleviation, housing loans, etc., may amount to about $5 millions. In all, these commitments are likely to total about $35 millions. Part of this sum can be met from liquid balances but the great bulk of it will have to be borrowed in 1956. This may not be altogether easy. There will be other borrowers on a not unlimited market. The position therefore is that we are faced with a deficit of $22.7 millions in 1956. With regard to this estimated deficit, attention will no doubt be invited to the experience of previous years when even larger estimated deficits have been converted into surpluses, admittedly growing smaller year by year, but surpluses just the same. To this I can only reply that this will not happen in 1956. In the first place, the factors, which converted deficits into surpluses in the past no longer operate to the same extent. Public Works Non-Recurrent estimated expenditure no longer appears in the ordinary estimates. Instead, its place is taken by a contribution to development, which is certain to be spent. Equipment for which special expenditure is required is now in free supply and deliveries are no longer delayed as they have been in the past. There is no longer the same likelihood of under-expenditure and consequent revotes as there has been in the past. In the second place, the estimates of recurrent and special expenditure have, in fact, been literally cut to the bone. I can see no possibility of any savings on ordinary departmental recurrent expenditure. Again, having regard to the way in which special expenditure has been pruned, it is difficult to see much likelihood of savings there. On the other hand, I cannot say that there will be no savings. Some savings on personal emoluments are inevitable. They may be substantial. In this respect, performance invariably falls short of expectation. There may also be some savings on grants in aid. The sum entered provisionally for the scheme for the re-organisation of vernacular schools may in the event be found to be more than is required in 1956. Against these savings, however, there are bound to be unforeseen revotes and expenditure on applications for supplementary provision. I would not like to hazard a guess - for it would be no more than a guess - as to the actual deficit which will be shown at the end of the year's workings. Too many imponderables are involved. All I can say, with any certainty, is that the experience of past years will not be repeated and that the actual deficit is likely to be substantial. It might be convenient to take this opportunity to endeavour to estimate the probable course of revenue and expenditure over the next five years. I have already endeavoured to show how revenue, on the basis of existing taxation, is tending to level off at about the $205 millions mark, and how, if there were any slight recession of trade, it might well fall lower. An attempt has also been made to show, in the table, which appears on pages 10 and 11 of the Sessional Paper, how expenditure on the social services has increased over the past five years. It will be seen that actual recurrent expenditure, excluding special expenditure, on Education has mounted since 1951 as follows: - $10.7 millions, $14.1 millions, $15.4 millions, $23.3 millions and $31 millions. The figures for Medical and Health are equally significant and are as follows: - $11.5 millions, $14.2 millions, $15.2 millions, $18.8 millions and $22 millions. If the curve of expenditure created by these figures is projected into the future, and if $9 millions for the additional cost of vernacular education is added to the figure for education, the staggering figure of $106 millions is reached in 1959 for recurrent expenditure on education and medical and health alone. This would be an increase of 100 per cent on actual expenditure over a period of five years. Fortunately, however, it is unlikely that recurrent expenditure on these services will increase at these extraordinary rates. I think that it is now appreciated that the economy of the territory cannot stand expansion on what has been called a "champagne" basis. Standards can and must be reduced without affecting efficiency. As staff is trained and becomes more experienced, it can do more. As the organisation shakes down, extravagances in staff and equipment, which have previously passed unnoticed can be seen and removed. Again, it is perhaps true to say that, in certain respects, the back of the present programme of expansion is some way to being broken and that increases in expenditure in the future will not be quite so steep as they have been in the recent past. It is clear, however, that, no matter what steps we take to reduce expenditure, to increase efficiency and to make our resources stretch as far as possible - and these steps must be taken - recurrent expenditure on social services is going to mount steadily in the future. When one takes into account the inevitable expansion of the Government machine in sympathy with an expanding economy, the increased charges on account of public debt as more and more is borrowed for development purposes, and the planned expansion of defence service, it will be appreciated that the estimate, which was made in the Sessional Paper to the effect that expenditure on all the services of Government might well be in excess of $240 millions by the end of 1959, may not be very wide of the mark. In other words, on the present basis of revenue receipts, we might by that time be facing an actual deficit of over $40 millions. Quite clearly, all practicable steps will have to be taken to increase revenue so that this deficit can be met. The position with regard to development expenditure also gives equal cause for concern. In so far as one can make an estimate on the basis of the legitimate needs of the various departments, the capacity of Government to execute work, and the capacity of the Singapore Improvement Trust to clear sites and build houses, it appears likely that Government will require an average of about $50-$60 millions a year for development of one kind and another over the next few years. As recurrent expenditure mounts, so ability to make any contribution from revenue to development will decrease and, before very long, we shall reach the stage when we shall be entirely reliant on borrowings or reserves. This raises serious problems. We must take care not to let our reserves run down too far. In fact, they are not very large in relation to the potential demands on them. The local loan market is not unlimited in capacity. There will be other borrowers in the market besides Government. Access to other markets may be difficult to obtain. We may find it difficult to obtain all we require. Clearly therefore we must make sure that our plans include only those projects which are of vital importance to the well-being and development of Singapore, that nothing is included which does not measure up exactly to these standards, and that the money which we do obtain is made to go as far as possible. This may require a re-examination of our development plans in the light of the resources likely to be available. Steps have already been taken to examine the standards of construction and equipment used in connection with Government building. To summarise, the position is that, on the present basis of revenue, we are faced in 1956 with an actual deficit which is likely to be substantial and that, despite all practicable steps which can be taken to keep expenditure to a minimum, this deficit could easily be of the order of $40 millions by 1960. It was against this background that the review of the revenue potential envisaged in His Excellency the Governor's Address to the Assembly was undertaken, and the Government's original proposals for increased taxation in 1956 drawn up. The review was undertaken before the arrival of the Economic Adviser whose expert knowledge and wide experience would have been invaluable. On the other hand, having regard to the time available, it was comprehensive and covered a wide field. Consideration was given to the general principles of taxation in Singapore, the possibility of increasing existing rates of taxation was examined, and the more obvious proposals for new taxation were explored. In general, the review indicated that: - Firstly: having regard to the free port status of Singapore and to its almost complete dependence on trade, the whole system of taxation should be as direct and as simple as possible. Any system of taxation which interfered with the free flow of trade, should be avoided as far possible. Secondly: having regard to the close economic ties between the Federation and Singapore, it was generally desirable and in some cases essential, where the fiscal policies of the two territories coincided, to have the same rates of tax. Thirdly: by comparison with adjoining and neighbouring territories, Singapore appeared to be lightly taxed. There appeared to be considerable scope for increased taxation within the existing framework. Fourthly: in so far as it was possible to estimate future needs over, say, a five-year period, it appeared possible that these needs might, and indeed could perhaps best, be met by judicious increases within the existing, established, and familiar framework of taxation. With regard to the probable deficit in 1956, it was considered that this might be met by an increase in the rate of tax in the higher ranges of assessable income, by increasing the rates of estate duty, and by imposing an additional fee on the first registration of motorcars. With regard to income tax, it was considered that it would be just to tackle higher incomes before considering proposals to alter personal allowances, lower the minimum level of taxable income or alter the rates of tax on the lower and middle income groups. It is clear that there is considerable scope for increased taxation in the upper income groups. In this connection, I feel sure that hon. Members will have seen the statistics of income tax rates in all Colonial territories which were given in reply to a Parliamentary Question earlier this year. They were published in Hansard and also in the August 6th edition of the publication "Taxation". These statistics indicated very clearly that Singapore is most fortunately placed in the matter of income tax in general but more particularly in respect of the rates of tax in the higher income brackets. These statistics can be made available if hon. Members so desire. As regards the increases, which were proposed for the higher income groups, it was suggested that the rate of tax on incomes of over $25,000 should be increased progressively until a ceiling of 60 per cent was reached on incomes of $100,000 and over. As hon. Members are aware, the present ceiling is 30 per cent on incomes of $50,000. It was estimated that this increase in rate of tax would produce $9 millions in a full year. With regard to Estate Duty, it had been felt for some time that the rates of tax, particularly in the case of large estates, were too low. It was therefore proposed that the rates of tax should be substantially increased along the whole range. The existing scale reaches a maximum of 40 per cent on estates of $5 millions. The proposed scale gave an effective rate of tax of rather more than 50 per cent on estates of this amount. At the other end of the scale, however, estates of under $10,000 were to be exempted from duty. It was considered, in so far as it was possible to make an estimate that the new scale might yield an additional $1.5 millions in a full year. The proposals for an additional motor car registration fee, in their original form, aimed at imposing a graduated rate on c.i.f. values, which it was estimated might yield $1 million in a full year. These proposals were in accordance with the general principles of taxation policy which I have already outlined. They were in accordance with the stated taxation policy of the Government, which aims at placing the burden of taxation on the shoulders of those best able to bear it, and they had the additional advantage, since the first and last required joint action by the Federation Government, that they had all in the past been suggested by that Government. It was thought that the yield from these proposals would probably go a very long way to meet the deficit which would occur in 1956. Any further revenue, which might be required could be obtained by judicious increases on certain customs duties. These now showed a wide divergence from those in force in the Federation. It seemed clear that, in most cases, the gap between the Federation and Singapore rates could, on the basis of Federation experience, be narrowed without consequences harmful either to the revenue or to the consumer. This major revision of the Customs tariff could remain in reserve for use at a later date. The same applied to any major modification in the main income tax structure and to changes in company tax. At this stage I should perhaps mention the question of purchase or luxury taxes. Proposals for taxes of this nature have been made from time to time in the past but for a variety of reasons have never met with favour. The proposal was again examined in connection with the review of the revenue potential. It was immediately clear that the matter was fraught with difficulties. Singapore is a free port, almost entirely dependent on trade. If any system of purchase tax on a wide range of goods were to be effective, it would have to be imposed as close to the point of import as possible. Imposition at the retail level would clearly be difficult to control effectively and might well prove impracticable on that account. Imposition at import level would clearly have very considerable effects on the free flow of trade and would have to be subjected to a most searching examination as to its implications, possible yield and effect on trade before any decision was taken about it. This examination could clearly not be completed before the 1956 budget was introduced. Consideration was also given to the imposition of a luxury tax on one or two commodities which were handled by a comparatively few traders and which did not enter into the entrepot trade to any considerable extent. Apart from lack of experience in Singapore of the administration of such a tax and the difficulty of drafting suitable legislation in the time available, it was found that the yield at the rate of tax which it was considered could be imposed in the first instance would be disappointingly small compared to the yield from other measures of taxation which were under consideration and it was decided not to pursue the matter at least for the time being. It was therefore decided to suggest to the Federation Government that the rates of income tax and estate duty should be increased as proposed and that an additional motor car registration fee should be imposed in connection with the 1956 Budgets. This was done because of the desirability of having a common fiscal policy and because, for at least two of the proposals, joint action by the Federation was essential. The proposal was made on the 19th of September and the details were discussed in Kuala Lumpur with cordiality and understanding on the 6th of October. Subsequently they were considered by the Federation Government, and a decision was reached on the 2nd of November. The desirability of a common fiscal policy, in so far as this was practicable, was fully appreciated and the Government had considerable sympathy with the proposals which had been made. It was pointed out, however, that the Government had only come into power in August and had been much pre-occupied since that date. It had not yet had time to consider economic planning which might require increased taxation or to work out a fiscal policy. In fact, in order to gain time to consider these matters at leisure, it had decided to adopt a standstill budget in 1956. In these circumstances, it could not see its way to introduce these proposals for new taxation at the present time. This decision has placed this Government in an awkward predicament. We cannot for the moment proceed with the proposals for increased tax on the higher income groups and for an additional car registration fee since these two proposals require joint action in the two territories. On the other hand, steps must be taken to meet the 1956 deficit. The whole order of the taxation programme which I have outlined has had to be reviewed. Before proceeding to outline the results of this review, I should perhaps explain why common action in respect of income tax is regarded as essential. The close economic relations, which exist between the two territories demand that the rates of tax should be the same in each territory. The wisdom of this view has been borne out by experience. The abandonment of this position would give rise to grave administrative difficulties and would adversely affect the yield of tax. The proposals for assessment of combined income would have to be abandoned if different rates of tax applied in each territory, since neither would have jurisdiction to tax income at rates different from those imposed under its own ordinance. Abandonment of the provisions for combined assessment under which a single return is lodged and a single assessment is made in respect of a person having income in both territories would cause trouble and considerably increase the work carried out by the two departments. A more serious consequence would be a fall in the aggregate yield of tax. At present, individuals who derive income from both territories and who are either resident in one territory only or resident in both, receive one set of personal allowances. If there were entirely separate systems, individuals who were resident in one territory would be entitled to full personal allowances in the territory of residence and to relief corresponding to that given under section 36 of the Ordinance in the other territory in respect of income arising there, while individuals resident in both territories would be entitled to a double set of allowances and would have their chargeable income in each territory taxed at graduated rates. Again, fiscal policies considered in isolation would lead to differing rates of tax, allowances and reliefs, depending on the economic needs of the territory concerned. Differences of this kind would encourage taxpayers, particularly companies; to change their residence and capital would tend to flow into the territory where the net yield of income was likely to be greater. From the economic standpoint of Malaya as a whole, the repercussion would be most unfortunate. Evasion of tax would be simplified in the case of persons having incomes arising in both territories Persons carrying on similar businesses in each territory would have little difficulty in making notional transfers of stock at fictitious prices between the two businesses and would be able to manipulate their profits at will. It would be necessary to introduce double taxation arrangements to provide for relief in respect of tax in both territories. These are, in brief, the reasons why a common income tax policy has always been regarded as essential. A common policy with regard to additional registration fees on motor cars is desirable in view of the difficulties of control, which would arise if unilateral action were taken. As I stated earlier, the second wave of our proposed taxation programme consisted of increases on customs duties, on liquor, petrol and tobacco. There were differences, in some cases wide, between the Singapore and Federation tariffs. Experience in the Federation indicated that these gaps could be substantially narrowed, if not closed altogether, without harm either to consumption or to revenue. The yields would be substantial. For example, an increase on the duty on cigarettes to Federation levels would yield $19 millions on present levels of consumption. It was proposed to introduce measures of increased taxation progressively, as the need arose, over the years, until we approximated as closely as possible to Federation levels. Now, in view of the Federation decision, the whole programme has had to be reviewed and switched around. The whole customs tariff has been considered, and it has been decided that it would be undesirable at the present time to increase the tax on cigarettes by even a small amount. The burden of meeting the 1956 deficit therefore fell on liquors and petrol. It was decided to raise the duties on samsu half-way to Federation levels, the duties on still wines and beer, ale and stout to Federa- tion levels and the duties on brandy and whisky beyond Federation levels. The duty on petrol should be raised to Federation levels. In reaching these decisions, the Council of Ministers had in mind that intoxicating liquor was, in fact, a luxury. It could not, by any stretch of the imagination, be called a necessity. In the circumstances, they had little hesitation in raising the duties steeply, particularly in the case of whisky and brandy. The increases in customs duties have already been gazetted under the Public Revenue Protection Ordinance. The increases in detail are as follows: - Brandy and other intoxicating liquor not hereinafter provided for. - The full duty is increased from $61.50 per proof gallon to $76.90 per proof gallon. The preferential duty is increased from $53.80 per proof gallon to $69.20 per proof gallon. Brandy in bottle. - The full duty is increased from $48 per gallon to $60 per gallon and the preferential duty from $42 per gallon to $54 per gallon. Samsu(including medicated samsu). - The import duty is increased from $27 per gallon to $31 per gallon and the excise duty from $24 per gallon to $27 per gallon. Still wines exceeding 26 per cent but not exceeding 42 per cent of proof spirit. - The full duty is increased from $15 to $18.75 per gallon and the preferential duty from $11.25 to $15 per gallon. Still wines not exceeding 26 per cent of proof spirit. - The full duty is increased from $7.50 to $9.40 per gallon and the preferential duty from $5.60 to $7.50 per gallon. Ale, beer, stout, etc. - The full duty is increased from $4 to $5.20 per gallon and the preferential and excise duty from $3.60 to $4.80 per gallon. Whisky in bulk. - The duty is increased from $61.50 to $76.90 per proof gallon. Whisky in bottle. - The duty is increased from $48 to $60 per gallon. The price of a quart bottle of brandy and whisky will be increased by $2 as a result of these increases in duty. The price of a peg on a 24 to the bottle basis will be increased by about 8 cents. Making due allowance for a possible reduction in consumption, it is estimated that the increased duty on these two commodities will realise close on $1.5 millions. The duty on samsu has been raised slightly more than half-way to the Federation level and this increase will result in the price of a quart bottle being increased from $8.70 to $9.37 a bottle. The excise duty has been increased to $27, the differential between the duties on the imported and local product being increased by $1. The cost of a quart bottle of local samsu will be increased from $5.50 to $6. It is expected that these increases will yield about $300,000. The preferential duty on still wines has been increased to Federation levels, the existing differential between full and preferential rates being maintained. The increased duties are expected to yield $130.

000. The import duties on ale, beer, stout etc., have been increased to Federation levels and the excise duty has been maintained at the same level as the preferential rate. The effect of these increases will be to increase the present price of a pint bottle of beer by 10 cents and a quart bottle by 20 cents. It is expected that these increases will yield about $2.8 millions. The tax on petrol will be increased from 68 cents a gallon to 73 cents a gallon which is the Federation rate of duty. This increase in the cost of petrol should cause no hardship and it is expected to yield $1.2 millions in a full year. It is also proposed to increase the rates of estate duty. The rates which are proposed are given in the Schedule to the Bill, which has been tabled for a First Reading today. Attention is invited to certain details of these rates. In the first place, it is proposed to exempt all estates of under $10,000 from duty. The previous exemption limit was $1,000. The amount of duty collected from these small estates, which it is now proposed to exempt, was relatively small. The exemption of these small estates, besides assisting the beneficiaries, will result in considerable saving in the work of collection of duty and allow available staff to concentrate on large estates. Secondly, it will be noted that the same form of graduated scale as applies in income tax has been introduced. This has the advantage of giving a smoother curve in the progress of graduations and obviates the need for special provisions for marginal relief. Thirdly, the scale provides for an increased rate of duty along the whole range. The effect of this can only be fully appreciated if the scale of effective rates, which is attached to the Bill for purposes of information, is studied. For example, the rate of duty on an estate of $220,000 was 9 per cent. The effective rate under the new scale is 13.98 per cent. On estates of $920,000, the old rate was 23 per cent and the effective rate under the new scale is 31.77 per cent and so on. It has been considered for some time that the existing rates of estate duty, particularly in respect of the larger estates, was unduly low and it is considered that the new rates go some way to placing the incidence of taxation on a proper basis. These measures should yield about $7.5 millions in a full year. This is likely to go only a part of the way towards meeting the 1956 deficit. The balance, when its size becomes clear, will have to be met from reserves or else covered by increased taxation. These, therefore, are the budget proposals for 1956. As I have shown, our immediate position is reasonably healthy but the rapid increase of both recurrent and development expenditure means that we are faced with mounting difficulties in future years. To meet these increased expenditures, we shall have to find increased resources since neither our usable reserves nor the possibilities of borrowing are unlimited. In these proposals the Government is taking the first steps towards that increase of our resources and strengthening of our future financial position. I must emphasise that these are first steps only, and further strengthening of the position will be needed in future years. Before closing, I should like to take this opportunity to thank all those who have assisted in the preparation of the Draft Estimates. Their willing co-operation has made the task much easier than it would otherwise have been. In particular, I should like to thank Mr I. R. M. Willis, the Principal Assistant Secretary, and Mr Lan Ying Fong, the Estimates Clerk in the Treasury, on whose shoulders the full weight has fallen. Sir, I beg to move.

Although this is an Order of the Day, under Standing Order No. 69 (2), I require a seconder, but perhaps I ought to draw the attention of the seconder to Standing Order No. 30 (3) which reads, excluding the exceptions: "No Member shall speak more than once to any question - Provided that any Member may second a motion or amendment by rising in his place and stating that it is his intention to second the motion or amendment, without prejudice to his right to speak at a later period of the debate."

If it please you, Mr Speaker, Sir, I rise to second the motion before the House and reserve my right to speak later in the debate.

The Question, then, is "That the Bill be now read a Second time", but in accordance with Standing Order No. 69 (2), the debate on the Second Reading must now stand adjourned for not less than seven days. Mr Financial Secretary, debate to be resumed what day?

21st of November, Sir.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, I should like, as a preliminary, to express my regret that printed copies of the Bill were not in the hands of Mem- bers until yesterday. I fully appreciate, Sir, that it is ordinarily very desirable that Members should have a longer time in which to study the implications of legislation which is introduced into this Assembly for their consideration; but I hope, Sir, that the explanatory note which is appended to the printed copy of the Bill will have been sufficient to inform Members of the purpose and the effect of the amendments which are now proposed. I venture to hope, Sir that the nature of those amendments will enable the Assembly to give a welcome to this measure, a welcome which we on this side of the House consider that it deserves. Now, Sir, as is perfectly clear from the title of the Bill, its purpose is to amend the law relating to bankruptcy. It is, Sir, a branch of the law of which relatively few of us have any specialised knowledge and with which most of us are, I think, unfamiliar. For this reason, Sir, it will not, I hope, be out of place if, in moving the Second Reading of the Bill, I were to preface my remarks with a few rather general observations. Now, Sir, it can be stated, with reference to the existing bankruptcy laws of Singapore - and I am speaking very generally - that their purpose is to preserve and maintain a fair and even balance between the debtor who cannot pay his debts and his creditors, and also to maintain such a balance between the creditors as amongst themselves. Now, Sir, to achieve that purpose, a debtor's property and his financial affairs are taken from his control and put into the hands of a manager and trustee. Here in Singapore that manager and trustee is the Official Assignee, and it is, of course, to the Official Assignee that a bankrupt's creditors must look for payment of their claims. Now, Sir, this Bill is particularly concerned with two provisions of the Bankruptcy Ordinance; the first of those provisions being that which enables a creditor to make his debtor a bankrupt where the debt amounts to $100 or more. And the second of the two provisions with which the Bill is particularly concerned, Sir, is that which gives priority to the claims of a bankrupt's employees in respect of unpaid wages up to a maximum of $250, where those wages have been earned within four months of the date of the receiving order; that is, the order which makes the Official Assignee the receiver of the property of the bankrupt. Now, Sir, the fall in the value of money which has taken place in recent years, particularly since the last war, has clearly, in the view of the Government, made the two provisions to which I have just referred obsolete. Accordingly, what is now proposed by this amending Bill is, firstly, that the sum of $100 to which I have referred should be increased to $500. That is effected by clause 2 of the Bill. Putting it in another way, if that amendment becomes part of the law, the position in future will be that a debtor must owe a minimum of $500 before he can be made a bankrupt, instead of $100 as at present. Now, Sir, this proposal necessitates a number of consequential amendments to the Bankruptcy Ordinance and those are detailed in the explanatory note to which I have referred, and on that account I do not propose to refer to them in any detail at this stage. Sir, the second amendment of importance which is proposed by this Bill is the raising of the amount of an employee's claim to which priority is given in the distribution of his bankrupt employer's assets - the raising of his priority claim from $250 to $1,000 - and linked with that amendment, Sir - which is made by clause 5, the proposed new paragraph (c) of section 43 of the Bankruptcy Ordinance, - is an amendment which gives priority to wages earned during the period of five months as against the existing period of four months immediately preceding the date of the receiving order; or - and this is new - during any period of five months within the twelve months preceding that date where the employee's services have been determined before that date. Now, Sir, the opportunity has also been taken, in drafting this amending Bill, to insert provision to give priority to income tax in the distribution of a bankrupt's property; and a further provision which is included in the Bill is that made by clause 8, which is designed to enable deductions, which are made from a bankrupt's salary or wages for the benefit of his creditors, to be made in accordance with the scale to be prescribed by the Minister. These deductions, Sir, will, of course, remain, subject to variation by the Court. This amendment, Sir, is also considered to be necessary because the existing scale is thought to be out of date by reason of the fall in the value of money which has taken place, particularly since the war. I think I should also refer at this stage, Sir, to the proposal made by clause 5 (ii), the clause against which there is a marginal note "Transitional provisions". With reference to that, I would say very little more than appears at the end of the explanatory note and merely content myself with indicating that the purpose of those provisions is to provide for the application of the amendments relating to preferential payments, to which I have referred and which are proposed by clause 5 (i), to cases already under the administration of the Official Assignee where no dividend has been declared and no distribution of assets has begun, but that those preferential amendments should apply on a date to be appointed under the clause. Sir, I think there is very little which I need add now in moving the Second Reading. I would like just to say this: that it is the view of the Government that if the Bill is passed, it will go a long way towards bringing the Bankruptcy Ordinance up to date so far as changes in the value of money are concerned, and it will remedy those parts of the Bankruptcy Ordinance which are in this respect considered to be obsolete. The amendments proposed, Sir, will improve the position of employees who claim for wages from a bankrupt employer and will also prevent the somewhat drastic process of bankruptcy being used for debts, which, by reason of the change in the value of money, are too small to justify such a course. For these reasons, Sir, I hope that the measure will be welcomed by all sides of this Assembly, and I accordingly beg to move. Question proposed.

Mr Speaker, Sir, I rise to support the Bill before the House. We should do all we can to protect the unfortunate man who is employed by a firm which goes into bankruptcy. Only too often have we found that the employees of such firms have been thrown into the street not because of their own fault but through adverse circumstances over which they have no control. The only possible argument in my mind that can be made against this motion is that some creditors would say we are favouring the employees at the expense of the creditors, but I do not think that this argument could hold water. After all, the creditor can choose whether he will or will not give credit to the debtor, whereas the employee is not in a position to do so. I therefore support this amendment.

Mr Speaker, Sir, I am very happy to hear from the Opposition support for an amendment of this character, and I feel I should like to add to what has been said from practical experience. As a result of my Saturday sessions, Sir, I have learnt that there are at the present moment groups of workers who have been waiting for more than eleven months for their pay. Unfortunately, what has occurred is this - they were not paid for several months and finally they left of their own accord the employment of an employer who was not paying them; but it took the employer's creditors a number of months before he was made bankrupt and the receiving order was made in May of this year, although they themselves left his employment last December. In those circumstances, Sir, those poor people have not been able to receive any part of their salary and rank merely as creditors to receive pro rata parts of the assets of the firm when it is wound up. I feel, Sir, that they are deserving of the sympathy of this House, and I am happy to note that this House is not quibbling either about the increase from $250 to $1,000. $250 may have been appropriate during the time, Sir, when you could get a cook for $30 and $40 a month, but it is hardly appropriate now. I am particularly happy to note that the Assembly is not making any adverse comment in view of the short notice given. It is a simple Bill. Its urgency lies in the fact that there are a fair number of human beings who are suffering at the moment as a result of the workings of the Bankruptcy Ordinance, and it is desired to give them redress at the earliest possible moment.

. Mr Speaker, Sir, I rise briefly to support the amendment. I have not had time to study the Bill, but the explanations given by the Hon. the Attorney-General appear to be quite satisfactory; but I would like to put on record my congratulations to Government in realising that there are two kinds of dollars - pre-war dollars and post-war dollars.

Question put, and agreed to. Bill accordingly read a Second time.

Committee stage, what day?

Now, Sir. Mr Speaker, Sir, I move, That the Assembly do resolve itself into Committee on the Bill.

I second the motion, Sir. Bill considered in Committee.

Clauses 1 to 7 inclusive ordered to stand part of the Bill. Clause 8 -

Sir, I have to move an amendment to this clause, the amendment being - I have not given notice of this - that there should be inserted after the words "Official Assignee" in line 2 of the proposed new subsection (5) the words "under this section".

Can I have that in writing, please? Amendment handed in.

I should probably add, Sir, that those words are in the Ordinance as it stands now. It is a formal amendment.

Question, "That the words proposed to be inserted, be there inserted," put, and agreed to. Clause, as amended, ordered to stand part of the Bill. Clause 9 ordered to stand part of the Bill.

Sir, I beg to move, "That the Bill, as amended, be reported to the Assembly."

Question put, and agreed to. Bill reported, with an Amendment.

Third Reading, what day?

Now, Sir. I have to move, "That the Bill, as amended, be now read the Third time."

I second it.

Question put, and agreed to. Bill, as amended, accordingly read the Third time.

Order for Second Reading read.

Mr Speaker, Sir, I have to move, "That the Bill be now read a Second time." Sir, the provisions of the Companies Ordinance relating to the winding-up of companies include provisions which correspond to those contained in the Bankruptcy Ordinance providing for preferential payments to certain classes of creditor, in particular, employees. I referred in some detail, Sir, to those provisions of the Bankruptcy Ordinance when I was moving the Second Reading of the amending Bill which was before the Assembly a few moments ago. I think, therefore, there is very little that I need add to what I have already said in that connection in moving this Second Reading. I therefore propose, Sir, to say no more than this: that this Bill is complementary to the Bankruptcy (Amendment) Bill which has just been given its Third Reading by this Assembly, and, shortly, what it does is this. It proposes, firstly, to increase the amount of an employee's wages to which priority over other debts of the company, on being wound-up, will be given, from $250 to $l,000; and, secondly, it proposes to give priority in the winding-up to arrears of income tax. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, we congratulate the Labour Front Government on its concern -

Coalition Government!

- the Coalition Government on its concern over the welfare of the workers in Singapore, particularly on the sad occasion when the employer goes bankrupt. We also congratulate them on their foresight in seeing that no employer, not in 1956 at any rate, should ever go bankrupt by the burden of taxation.

Question put, and agreed to. Bill accordingly read a Second time.

Committee stage, what day?

Now, Sir. I move, Sir, That the Assembly do resolve itself into Committee on the Bill.

I second the motion. Bill considered in Committee.

Clauses 1 and 2 ordered to stand part of the Bill.

Sir, I beg to move, "That the Bill be reported to the Assembly."

Question put, and agreed to. Bill reported, without Amendment.

Third Reading, what day?

Now, Sir. I have to move, "That the Bill be now read the Third time."

I second the motion.

Question put, and agreed to. Bill accordingly read the Third time.

Mr Speaker, Sir, I have His Excellency the Governor's authority to move, That this Assembly resolves that the sum of $5,640,872 should be supplied to the Government under the Heads of Expenditure and for the services specified in Sessional Paper No. Cmd. 27 of 1955. An explanation for each item of expenditure contained in this message is given in the Command Paper. I will, however, be glad to answer any further questions which Members may care to put. Sir, I beg to move.

Sir, I second the motion. Question proposed.

Item No. 318, Sir. I believe that the original grant under this head for 1955 was in the neighbourhood of $4 millions. The additional vote now asked for is close to $3 millions, coming near to the end of the financial year. May I ask the Hon. the Financial Secretary if he would give some explanation of this large sum?

I think that my hon. Friend the Member for Tanglin (Mr Ede) will recall that sometime in November or December last year an offer of increased aid was made to all Chinese schools on the basis of full aid given to English schools. The Estimates for 1955 had already been framed by that time, and, speaking from memory, I think $4.4 millions or $4.5 millions had been entered for aid to Chinese schools. It was then clear that further sums would be required for grants-in-aid to Chinese schools, but that the exact sum could not be determined until such time as we knew how many schools would apply for full aid. At that time, only 22 schools, if my memory serves, had applied. I discussed the matter with the Standing Committee on Finance of the Legislative Council and with the Director of Education, and it was agreed that we would wait until we knew what our actual requirements would be before taking a supplementary vote. It was estimated that the amount provided in the Estimates would, in all probability, be sufficient until about June, depending upon the number of schools which applied for full aid. Now, the position is that some 80 schools out of over 200 schools in the city have applied for aid, and this extra sum is required to bring the original provision up to the amount required to provide that aid to the end of the year.

Mr Speaker, Sir, may I refer to item No. 314? Under subhead 24 - launch, 110 feet - provision is required to cover an increase in the estimated cost of constructing a vessel for the Customs Department. I see a very alarming item of $215,000. I would like information, Sir, as to the estimated amount for the original cost of this launch, whether this work was undertaken by tender, or just on a cost plus basis, and how this sudden large increase has been incurred.

The original provision in the Estimates last year for the cost of this launch was $785,000. This was the estimated cost of building and engining a launch of 115 feet which was required to patrol the outer approaches of Singapore, to keep station in all weathers with ocean-going vessels and shepherd them into Singapore in order to prevent opium being dropped from these vessels in the outer approaches. The cost of the vessel was estimated at $785,000. It could not be estimated with any greater degree of accuracy because detailed plans had not been prepared and the precise type of engine required had not been decided upon. Tenders have now been called for the hull, and orders have been placed for the engines - diesel oil-burning engines - which will give this launch the requisite speed. The cost of the engines is, speaking from memory, close on $400,000. As a result of these tenders, it is now clear that the provision originally estimated for the cost of the hull and other fittings is too low, by approximately $215,000. The question whether we should continue with the building of this launch in view of the increased cost has been most carefully considered by the Council of Ministers, and it has been decided in all the circumstances of the case that it is an essential requirement for Singapore.

Sir, item No. 311. I would like to have some particulars of this Regional Literature Agency and the advantage that Singapore will derive out of this Agency.

Mr Speaker, Sir, the officer in question came out to Singapore, the Federation, British North Borneo, Sarawak and Brunei in order to study the possibility of the establishment of a Regional Literature Agency. In view of the fact that there is so little vernacular literature emanating from the territory, and taking into consideration our aim for ultimate independence and the necessity for giving opportunities for appreciating the meaning of loyalty to the territory in question, it was thought advisable that there should be some effort made to encourage local authors and local publications. A report has been received and is under consideration by the respective Governments. No decision has yet been reached as to whether the recommendations of the report would be accepted or not, but the matter is under active consideration.

Mr Speaker, Sir, may I refer to item No. 331 which involves an expenditure of $662,545? I would like to know how many officers are involved in this case and from that deduce their expenditure per individual officer.

I regret, Sir, that I cannot say exactly how many officers are involved. I can only say that the Leave Regulations of the Government of Singapore do give expatriate officers of the service an entitlement to passages for themselves and their families once within the normal tour of service. Similarly, locally-domiciled officers who go overseas for training or on leave are paid from this vote. I cannot say how many people have gone overseas in that connection. Similarly, provision is made in this vote for the cost of sending delegates to overseas conferences. Apart from this question of officers who go to conferences or who are sent for training, expenditure from this vote is governed by the Leave Regulations of the territory. As regards the cost of the passages, that is fixed by the shipping companies and airline companies who supply the passages, and that is not a matter over which we have any control.

Will the Financial Secretary give us a rough estimate of the proportions between local and expatriate officers who have enjoyed this singular privilege?

The great bulk of the vote is spent on expatriate officers, as one would expect since they are entitled, under their terms of service, to leave passages.

Question put, and agreed to. Resolved, That this Assembly resolves that the sum of $5,640,872 should be supplied to the Government under the Heads of Expenditure and for the services specified in Sessional Paper No. Cmd. 27 of 1955.

Mr Speaker, Sir, I rise to move the motion in the name of the Minister for Commerce and Industry, namely, That, this Assembly, in accordance with subsection (2) of section 1 of the Control of Imports and Exports Ordinance, 1950 (No. 43 of 1950) resolves that the aforesaid Ordinance shall continue in force for a further period of one year commencing on the 8th of December, 1955. This Ordinance has been reviewed and its continuation approved on four previous occasions. Throughout this period, there has been a continuous relaxation of import and export controls in Singapore and those now remaining cover a comparatively narrow field. A Committee, representative of the Chambers of Commerce and the Singapore Exchange Banks Association, was set up to consider what further relaxations were practicable. As a result of the work of this Committee, every control that could possibly be removed was eliminated. The position has now been reached where nearly all imports from non-dollar sources are on open general licence. The purpose of licensing is to maintain a record of imports for balance of payments reasons. Rice is still subject to special licensing to ensure that importers comply with the arrangements for turning over the Government stockpile. Sir, I beg to move.

I beg to second the motion, Sir.

Question put, and agreed to. Resolved, That this Assembly, in accordance with subsection (2) of section 1 of the Control of Imports and Exports Ordinance, 1950 (No. 43 of 1950) resolves that the aforesaid Ordinance shall continue in force for a further period of one year commencing on the 8th of December, 1955.

If it please you, Mr Speaker, Sir, I do formally move, That this Assembly do now stand adjourned.

I second it.

Question put, and agreed to. Resolved, That this Assembly do now stand adjourned. Adjourned accordingly at 12.08 p.m.

Wednesday, 9th November, 1955

asked the Minister for Education (a) how many students are there at present in Singapore between the ages of 6 and 12; how many children, who have reached the school age, are unable to gain admission through lack of school accommodation next year; and (b) how many students have applied for entry into Form II; the number which can actually be accepted with the present school accommodation; and whether the Government have any plans for those not admitted into Form II.

asked the Minister for Labour and Welfare whether he is aware of the difficulties and hardships encountered by the old and sick persons in having to call personally at the Social Welfare Department for collection of their reliefs; and whether any arrangements can be made to facilitate such collections of reliefs.

The difficulties and hardships encountered by the old and sick persons who are obliged to call at the Social Welfare Department for relief have been closely studied by this Ministry. The appointment of substitutes to receive allowances at the Social Welfare Department relieves the sick and the aged from the necessity to attend in person. Many persons already take advantage of this facility. In addition payment of Public Assistance Allowances has been undertaken in Pulau Tekong and the Western Islands for all cases regardless of their age or state of health. An experiment in decentralization of payments has been initiated, but to do this on a large scale would place a heavy burden on the public purse, since more staff would have to be engaged to undertake the extra work involved in making the payments and in the maintenance of duplicate records and a more elaborate accounting system. Proposals for extended decentralization will depend to a great extent on the recommendations of the I.L.O. expert on Social Security who has recently arrived in Singapore.