Hansard, 1956-11-07

(Statement by the Minister for Commerce and Industry)

Mr Speaker, Sir, hon. Members will recall my promise made to this House at its September sitting to inform hon. Members of Government's plans for the promotion, encouragement and development of local industries. In accordance with that promise, I now wish to outline Government's policy in this respect: (a) The Government will continue to encourage the investment of foreign capital and to create a suitable climate for investment. (b) Government has no intention of changing its present policy with regard to the repatriation of profits or of capital. (c) The Government will give all reasonable facilities for the entry into Singapore of skilled workers, technicians and engineers, if not available locally, and of any senior administrative personnel reasonably required for the development of industries and other commercial enterprises which are considered to be for the economic benefit of Singapore. (d) The Government will continue to give facilities for the importation from competitive markets of raw materials, machinery and technical equipment necessary for industries which it is desired to encourage. (e) Government intends that a survey of the colony's industrial potential and markets be carried out. Inquiries are now being made in order to obtain the services of experts to undertake this survey. (f) Government intends to establish an Institute of Scientific and Industrial Research for the purpose of investigating and giving advice on the technological and economic aspects of industry. Arrangements have been made to obtain the advice of an expert on the setting up of this Institute. (g) Government has decided to set up an Industrial Promotion Board with a $1,000,000 revolving fund to give financial assistance to small industries. Legislation is now being drafted and a Bill will shortly be introduced in this House. (h) Government is investigating the question of making tax concessions to industries whose expansion or establishment it is desired to encourage. The outcome of this investigation will be reported in due course. The survey of the colony's industrial potential and markets that Government intends to be carried out will, for the first time, reveal the possibilities for industrial development that are at present unknown. The findings will act as a basis for future industrial development and be a useful guide to prospective investors who are desirous of ascertaining the industrial possibilities of Singapore. Consideration of the extremely difficult and complex problem of tariff protection will be deferred until the Industrial Potential and Markets survey has been completed and studied. It is intended that the work of the Institute of Scientific and Industrial Research should include investigations into industrial uses of local materials, the testing and standardisation of industrial products, the improvement of industrial techniques and quality of products, the utilisation of by-products, the solution of specific technical difficulties, and the estimation of costs and local market opportunities for particular industries whose establishment may be contemplated. The services of this Institute will be available not only to Government but also to private firms on payment of a fee.

Mr Speaker, Sir, I have to report that I have Certificates of Urgency from His Excellency the Governor in respect of four Bills. May I give them to the Clerk?

Can I have the Certificates, please? Certificates of Urgency handed in.

The Certificates are in order. Please proceed, Mr Financial Secretary.

Mr Speaker, Sir, I present a Bill intituled "An Ordinance to amend the Income Tax Ordinance (Chapter 166 of the Revised Edition)", and move that it be read the First time. Bill read the First time.

Second Reading, what day?

On the 20th of November, Sir.

Sir, I present a Bill intituled "An Ordinance to provide for the imposition and collection of a luxury tax and for purposes connected therewith", and move that it be read the First time. Bill read the First time.

Second Reading, what day?

20th November, Sir.

Sir, I present a Bill intituled "An Ordinance to amend the Stamp Ordinance (Chapter 170 of the Revised Edition)", and move that it be read the First time. Bill read the First time.

Second Reading, what day?

With your permission, Sir, after I have moved the Second Reading of the Appropriation Bill, I would like to take the Stamp (Amendment) Bill through all its stages.

Are there sufficient typed copies of the Bill for hon. Members?

There are, Sir.

Can they be distributed, please?

Yes, Sir. Typed copies of the Bill handed in to the Clerk and distributed to hon. Members.

Sir, I present a Bill intituled "An Ordinance to amend the Betting and Sweepstake Duties Ordinance (Chapter 158 of the Revised Edition)", and move that it be read the First time. Bill read the First time.

Second Reading, what day?

With your permission, Sir, I should like to take the Second and Third Readings of this Bill after my Budget speech.

Are sufficient typed copies of the Bill available?

Yes, Sir.

Can they be distributed, please?

Yes, Sir. Typed copies of the Bill handed in to the Clerk and distributed to hon. Members.

Mr Speaker, Sir, I beg to move, That at its rising at the termination of business this day, the Assembly do stand adjourned till Monday, 19th November, 1956.

Sir, I second the motion.

Question put, and agreed to. Resolved, That at its rising at the termination of business this day, the Assembly do stand adjourned till Monday, 19th November, 1956.

Order for Second Reading read. 10.13 a.m.

Mr Speaker, Sir, I have His Excellency the Governor's authority to move, "That the Bill be now read a Second time." The Bill seeks to make provision for the public service in 1957 and should be considered together with the volume of Draft Estimates which has been in the hands of hon. Members for some days. It has been usual, Sir, in the past to comment at this time on the accounts for the previous year and to give some indication of the probable outcome of the present year's working. The Financial Statements for 1955 have now been tabled and comments on them have been made in the memorandum which accompanied the Draft Estimates [Sessional Paper No. Cmd. 61 of 1956]. I will not waste the time of hon. Members by referring to them further. The probable outcome for 1956 has also been dealt with at some length in the memorandum which accompanied the Draft Estimates, and, of course, further details are given in the Abstract of Expenditure which appears at pages 15 and 16 of the volume of Draft Estimates. In the circumstances, it will perhaps be sufficient if I now refer only briefly to them. On the whole, the collection of revenue has been satisfactory. The yield on liquors, tobacco, entertainments and betting is likely to exceed the original estimate. The yield on petroleum will show a substantial increase. Although income tax is unlikely to attain the original estimate, the yield in 1956 will be substantially greater than in 1955. In this connection, I have now some reason to hope that the revised estimate may be exceeded. In all, it seems likely that revenue collections will amount to about $217 million compared with the estimate of $215 million. It also seems clear that ordinary expenditure will fall short of the original estimate of $231 million, despite the addition during the year of a considerable number of supplementary votes. The revised estimate is $214 million. As in the past, there has been a certain amount of under-expenditure on personal emoluments due to difficulties experienced in finding suitable candidates and making appointments to vacant posts. Again, expenditure on grants-in-aid to schools has fallen considerably short of the estimate. The response to the offer of full aid has not been as satisfactory as was originally hoped. It must be pointed out, however, that this under-expenditure is only deferred expenditure. In the near future, all appointments will be filled and grants-in-aid taken up. It seems probable, therefore, that the working for 1956 will show a small surplus, possibly of the order of $2 or $3 million. It appears probable that expenditure on development will also fall short of the estimate. As in the past, there have been difficulties in obtaining sites and in clearing them. In some cases, sites have proved more unstable than was originally thought and extensive piling and preparation has been required. In some cases, changes in plan have caused delays. However, it is expected that over $40 million will be spent under the Development Estimates and I am happy to say that considerable progress has been made with the building of new schools and the expansion of hospital facilities. The financial position of the colony is sound. The Special Reserve Fund is likely to total $101 million by the end of the year as a result of the addition of interest. There should be a balance of $11 million in the Development Reserve Fund and the additional net assets of the colony should total $142 million. Of these assets, however, $126 million are bound up in illiquid long-term loans. The net liquid assets of the colony may be taken as $138 million which represents a reasonably strong position. We come now to 1957. Here again, the details of the Draft Estimates are dealt with at some length in the memorandum which has been circulated and in an appendix to the Draft Estimates themselves, and I will do no more than draw attention to the main points about them. Revenue, on the basis of existing taxation, has been estimated at close on $218 million compared with estimated collections of $217 million in 1956. In making this estimate, it has been assumed that the level of trade and prosperity in Singapore in 1957 will not be very different from what it has been in 1956, and allowance has been made for growth of population and possible temporary fluctuations in trade. Consequently, the returns from entertainments duty, totalisator and sweeptakes duty, liquor and tobacco are estimated at much the same level as collections in 1956. Allowance has, however, been made for a probable increase in the consumption of petrol, and the level of prosperity of companies trading in Singapore in 1955 and 1956 has been taken into account in estimating income tax at $5 million more than the estimated 1956 collection. There is always a tendency to estimate revenue conservatively, and, given a continuation of present trading conditions, it may well be that this estimate of $218 million is exceeded in the event. The Draft Estimates of Expenditure (including revotes) total $254 million, an increase of $23 million on the 1956 total of $231 million. The increase of $23 million is largely due to increases of $11 million on Education, $2.7 million on Medical and Health, $2.5 million on Pensions, and $1.2 million in the contribution to the Rural Board. The distribution of expenditure between the main services of Government follows closely the pattern of previous years. The social services, namely, Education, Medical and Health, account for 40 per cent of the total, Defence and Internal Security including Prisons and Judicial take 16 per cent, and Communications and Works take 12 per cent. Some idea of the growth of the Government service in sympathy with the expanding economy of Singapore and of the great expansion of the social services may be obtained from the Statement of Expenditure incurred from 1947 to 1955 which appears at page 13 of the Draft Estimates. This, together with the Statement of Revenue collected for the same period, which appears at page 9 of the Draft Estimates, is a new feature of the Draft Estimates which merits study. There is once more a considerable increase in the provision for personal emoluments, the estimate for 1957 being $113 million compared with $98 million in 1956. Annual increments account for a substantial proportion of this increase but there are also a considerable number of new appointments, mainly in connection with the expanding Education and Medical Services, which account for over 70 per cent of the total. Details of these, new appointments will be found on page 7 of the memorandum which accompanied the Draft Estimates. Great care has been taken to ensure that only posts which are essential for the efficient discharge of the duties of Government have been entered in the Draft Estimates. As far as departments are concerned, Education personal emoluments have increased by over $7 million, Medical and Health by $2 million and Defence Services by just under $2 million. The provision for Other Charges Annually Recurrent also shows a substantial increase from $87 million in 1956 to $100 million in 1957. Here again, the main increases appear under the Social Services. Education has increased by $4 million, Medical and Health by $1 million and Social Welfare by $1.5 million. The contribution to the Rural Board has been increased by $1.2 million in connection with the expansion of services in the rural areas. The provision for Pensions and Retiring allowances has been increased by $2.5 million. The provision for Special Expenditure is $40 million, including a contribution of $20 million to Development and Re-votes of $1.8 million. The provision for new Special Expenditure proper is limited to $18 million. This, of course, excludes the provision made for special expenditure of a developmental character which is made in the Development Estimates. A contribution of $20 million is again made towards development. We have very ambitious development plans which will cost over $310 million over the next six years. It is going to be difficult to obtain all the funds necessary to finance this development and it is essential that an annual contribution should be made from revenue and that it should be as substantial as possible. It will be noted that no provision is made for the cost of Malayanisation in the Draft Estimates. A compensation scheme has not yet been finalised and no estimate of the possible cost of such a scheme, or how much will fall to be met in 1957, has yet been made. The position therefore is that, against an estimate of revenue of $217 million, we have an estimate of expenditure of $254 million, and we are faced with an estimated deficit of $37 million. It is doubtful if the position is quite as serious as would appear from these figures. As hon. Members are aware, even allowing for unforeseen calls on public funds which have arisen during the course of the year - some of them substantial - actual expenditure has in the past invariably fallen short of the estimate. It is likely that this will occur again in 1957. For example, recruitment difficulties still exist. Sometimes suitable candidates are not available. Sometimes there are unavoidable delays in selecting candidates and in making appointments to vacant posts. All these difficulties tend to reduce expenditure on personal emoluments, and it is not unreasonable to expect considerable under-expenditure on that account on a total provision of $113 million in 1957. This is borne out by the figures for estimated and actual expenditure on personal emoluments which are quoted on page 7 of the memorandum which accompanied the Draft Estimates. It is not so easy to foresee savings on Other Charges Annually Recurrent votes. These votes are always pared to the minimum. Experience in the past has generally been that actual expenditure approximates closely to the estimate. This will probably prove to be the case with the majority of departments in 1957, despite the economy campaign which is now being waged. On the other hand, as in the past, there may be savings on some of the larger departments like Education, Medical and Health and Defence Services, and some under-expenditure on a total provision of $100 million can probably be expected. There will also be some under-expenditure in Special Expenditure, resulting in revotes in 1958, but this will not be substantial. It is impossible to make any estimate of actual expenditure in 1957 which has any pretensions to accuracy. Too many unknown factors are involved. However, on the basis of past experience and having regard to the factors I have mentioned, it is possible that actual expenditure will fall considerably short of the estimate. With increased taxation on the one hand and under-expenditure on the other, there is a reasonable prospect of revenue and actual expenditure balancing in 1957. If this should not prove to be the case, there will be no alternative but to introduce further measures of taxation in order to achieve a balance. We come now to the Development Estimates for 1957. Before commenting on these estimates, I should like to draw attention to one important change in financial procedure which it is proposed to make in 1957. As I said earlier, our development commitments are such that it is going to be extremely difficult to find all the funds required to meet them. It is therefore necessary to make all funds, surplus to basic reserve requirements, available for development. Again, as I said earlier, our reserve position is strong. It is estimated that, by the end of 1956, our liquid resources will be of the order of $138 million. These are at present divided up amongst the Special Reserve Fund created by resolution of the Legislative Council in 1954, the Development Reserve Fund created at the same time and in the same way, and surplus dollar and sterling securities. Experience elsewhere indicates that it is desirable to keep something of the order of four months' revenue as a basic reserve, and that any surpluses in excess of this amount can be utilised for other purposes. This basic reserve is the sheet anchor of a colony's finances and constitutes a revenue and expenditure equalisation fund from which unexpected shortfalls in revenue or unexpected increases in expenditure can be met, pending recoupment either by savings or increased taxation. In view of our need for funds for capital development, it is now suggested that this practice, which has been thoroughly tested elsewhere, should be followed in Singapore, that the general revenue balance should be reduced to $70 million (or rather more than 4 months' revenue at the present time), and that the balance of our liquid resources should be transferred to a reconstituted Development Fund. Since the Special Reserve Fund was created by resolution of the Legislative Council, a resolution of this Assembly will be required to give effect to this new proposal. I hope to move this resolution on the 20th of November. In the meantime, the Statement of Assets and Liabilities on page 8 of the Estimates and the Development Fund Account have been drawn up on the assumption that the proposal will be approved. The Statement of Assets and Liabilities has been drawn up in duplicate. One copy, on pages 6 and 7, has been prepared in the old manner. The other shows the position after the Special Reserve Fund has been liquidated, the General Reserve Balance reduced to $70 million and the balance of liquid assets transferred to the Development Fund. This Development Fund is shown on page 367 of the Estimates. On the Income side, it shows the balance of the liquid assets of the colony including the balance of the Special and Development Reserve Funds, the annual contribution from revenue, Colonial Development and Welfare Fund contributions, and repayments of principal of existing Singapore Improvement Trust and other loans which should be credited to the Development Fund Account. On the expenditure side is shown expenditure on general development, on Colonial Development and Welfare projects, and loans to the Singapore Improvement Trust and other quasi-government bodies. Arising also out of a consideration of the Statement of Assets and Liabilities, is a proposal that existing long-term loans to the Singapore Improvement Trust and other bodies should be charged to expenditure and not shown as assets in the Statement. This proposal is made at the suggestion of the Director of Audit on the grounds that it is established financial practice that all transactions, including loans, which diminish the colony's free surplus of revenue should be recorded as expenditure at the time payment is made. In Singapore, the practice of showing as assets long-term loans, which in the case of the Singapore Improvement Trust are repaid over periods of up to 60 years, has sprung up since the war. The position has now been reached where these assets, which are in no sense of the term liquid, total about $126 million and, by being shown as assets in the Statement of Assets and Liabilities, paint an entirely erroneous picture of the strength and liquidity of the colony's finances. It has therefore been decided to agree to the Director of Audit's suggestion and to charge these long-term loans to expenditure. This will be done by resolution of the Assembly as soon as the accounts for 1956 have been closed and the exact totals involved are known. It will be appreciated, of course, that this is purely a matter of book-keeping. No additional expenditure is involved. The result will be that the Statement of Assets and Liabilities will give a much more accurate idea of the strength and liquidity of the colony's financial position. A Statement of Assets and Liabilities drawn up on this basis is, as I have said, shown on page 8 of the Estimates. The Development Estimates are shown on pages 367 to 405 of the Draft Estimates. The Development Fund Account is shown on page 367. It envisages a total of $82 million being available for development and, on the expenditure side, allows $63 million for general development, $2.3 million for Colonial Development and Welfare Fund projects and $20 million for loans to the Singapore Improvement Trust and Singapore Telephone Board. In compiling the estimates for general development, emphasis has again been placed on the development and expansion of the social services, and on the development of the rural areas. Education once again takes a large share of the funds available, a total of $17 million being provided out of a total of $65 million. $12.8 million is provided for capital works, including $2.5 million for secondary schools, $5.6 million for primary schools, $1 million for Teachers' Training Colleges, and $3 million for the Polytechnic. Grants to schools on a dollar for dollar basis for capital works amount to $1.6 million. $1 million is provided for the further expansion of the University, and $500,000 is provided for equipment for the Polytechnic. Expenditure on educational development amounts to 26 per cent of the total devoted to general development. $17 million is provided for Land and District Offices. This includes $8 million for the purchase of sites for development projects and $4 million for the acquisition and development of sites for resettlement. $5.4 million has been provided for development in the rural areas, making a total of $12 million provided in three years. Medical and Health is given $10 million or 15 per cent of the total available for general development. A start is to be made with the new District Hospital which it has now been decided to site at Tanah Merah Kechil. A start will also be made with a home for the chronic sick which will relieve congestion in the main hospitals. Roughly $7 million is provided for the development of existing hospitals. The rest of the money available for general development has been allocated to other departments to meet their more pressing needs. For the rest, a sum of $15 million has been earmarked for Public Housing and $5 million for Telephone Development. It is not expected that all the money shown in these estimates will be spent. As in the past, there will be difficulties in obtaining sites, clearing them of squatters, and making the necessary preparations for building. On the other hand, no provision has been made for unforeseen contingencies. On balance, however, it is thought that actual expenditure will fall short of the estimate and that there will be a balance in the Development Fund at the end of the year. To sum up, therefore, there seems a reasonable prospect that, allowing for increased taxation, revenue and expenditure will balance in 1957. There will probably also be a small balance in the Development Fund and the general revenue balance will be of the order of $70 million at the end of the year. It is desirable, Sir, at this stage to give an outline of Government's future capital and recurrent requirements as a background for the proposals for new taxation which I shall shortly introduce. As hon. Members are aware, the development needs of Singapore are very great, and it will cost a great deal in terms of capital and recurrent expenditure to meet these needs. A number of development plans exist, but they have all been greatly modified since they were drawn up. Ideas and needs have changed. Experience has suggested new approaches. Priorities have altered, and, of course, costs have greatly increased. All the plans are in need of revision and co-ordination. Again, no recent attempt has been made to assess the needs of the colony as a whole or to relate these needs to the funds likely to be available or to the capacity of the colony to meet the recurrent expenditure arising from the plans. The need for an early re-assessment of the colony's development requirements on these lines was realised by the Chief Minister and he asked Sir Sydney Caine to study the matter in his capacity as Economic Adviser. Shortly before his departure, Sir Sydney Caine incorporated the results of his study in a confidential memorandum to the Chief Minister. I have the Chief Minister's permission to give hon. Members the main conclusions reached in the memorandum. Briefly, the capital development requirements of the colony as a whole for the period 1958-1962 are assessed at $750 million. Of these requirements, certain projects totalling $570 million are regarded as essential and have been placed in a priority list. This priority list provides $226 million for General Development by Government, and includes $51 million for Education, $40 million for Medical and Health, $21 million for Commerce and Industry, $20 million for Drainage and Irrigation, $40 million for the Purchase of Land and $22 million for Communications. $200 million is provided for the City Council, mainly in connection with the development of public utilities, $115 million for the Improvement Trust, $18 million for the Harbour Board, and $20 million for the Telephone Board. This constitutes a five-year plan for development which, I think, is as ambitious, comprehensive and far-sighted as can be found in any country in this part of the world. It gives expression to the feelings of the Government in the matter of development which are expressed in the words of the memorandum as follows: "Singapore depends basically on its position as a great communications and trading centre. Secondly, and arising from its trade and shipping are its manufacturing activities, first, for the needs of its own population and then for export. Third are other activities depending originally upon, but also now adding to, its value as a communications and trading centre; its position as a military and naval base, as a tourist centre, as a convenient place, for international meetings or as a centre of higher education. To maintain its position in all these fields Singapore needs, first, good public services; port installations, airport, roads and other transport facilities; power supply - electricity and gas; drainage and so on. Secondly, its reputation as a port of call requires maintenance of public health measures. Thirdly, it requires the education of its population; a high level of technical education is especially important for industrial development. And fourthly, it needs investment in the plant and equipment necessary for manufacturing industry. The first three are almost entirely within the public sector, the fourth is mainly a matter for private finance." It will be a formidable task to raise the funds required for this essential development over a period of five years, particularly as not very much assistance can be expected from outside sources. Sir Sydney Caine, however, considers that it can be done provided that: (a) Government revenue is increased by stages over the next three years, including 1957, to yield at least an additional $50 million by 1959, thus allowing a more substantial contribution from revenue to development than is made at present. (b) Other public bodies, but particularly the City Council, can continue to make substantial annual contributions from revenue to development. (c) An overseas agency can be persuaded to agree to make a loan to the City Council for electricity development. (d )Local capital resources are mobilised to the full, a suitable climate and opportunities for investment are created, and the general public is made to realise the necessity of saving and investment in Government loans in order to obtain the services which it wants. If these conditions are not met, development plans will have to be prolonged, reduced or even abandoned, the people of Singapore will not get the services which they require, and, perhaps worst of all, Singapore's position as one of the main centres of world trade will be undermined. I am sure that none of us in this Assembly would willingly allow this to happen. As regards revenue and recurrent expenditure on Government account, it is envisaged that, on the present (1956) basis of taxation and given a continuation of present trading conditions, revenue will increase slowly in sympathy with the growing population until it reaches a total of something of the order of $235 million in 1962. On the other hand, expenditure (excluding any contribution towards development) will increase much more rapidly as development plans are implemented and as interest and sinking fund charges on new loans are added to the total bill. It is considered more than possible that it will reach a total of over $260 million (excluding any contribution to development) by 1962. This would be a striking increase over a period of six years and hon. Members will no doubt wonder how it can come about. In this connection, attention is once again invited to the table of actual expenditure from 1947 to 1955 which is given on page 13 of the Draft Estimates. From this table hon. Members will see very clearly how expenditure on Education in particular is increasing by leaps and bounds - $15 million in 1952, $17 million in 1953, $24 million in 1954, $30 million in 1955 and $35 million estimated in 1956. It may well be $60 million by 1962. Expenditure on Medical and Health Services is mounting in a similar way - $15 million in 1952, $16.6 million in 1953, $20 million in 1954, $22 million in 1955 and $27 million estimated in 1956. As hospitals expand and new hospitals are built, so expenditure will increase. It has been estimated that, by 1962, expenditure on Education and Medical and Health combined will have increased by $50 million on present figures. Expenditure on Defence Services is only starting to mount and may reach $18 million by 1962. In short, the estimate of over $260 million in l962 is not likely to be very far out. As I said earlier, revenue will have to be increased by taxation by $50 million in the next three years if this gap is to be closed and a substantial contribution made to the cost of development in addition. I think this can be done. There is a very considerable taxation potential as yet untapped in Singapore and which can be tapped without detriment to trade, on which our prosperity depends, and without causing undue hardship to any section of the community. But it means that every possible source of revenue will have to be explored, and that the people of Singapore will have to accustom themselves to a much higher incidence of taxation than they have hitherto experienced. The outlook for the future is therefore somewhat bleak. We all wish to increase the standard of living of the vast bulk of the population of Singapore, and to make Singapore an even better place to live in than it is at present. If we are going to achieve these objectives, we are all going to have to pull in our belts, make sacrifices, work harder, save more, invest more in Government loans, and be prepared to pay a great deal more in taxation than we have ever had to pay before. I come now, Sir, to the measures of new and increased taxation which it is proposed to introduce this year. As I have said, these must be regarded as the first instalment of a three-year programme which must produce at least $50 million. Briefly, it is proposed to raise income tax, increase the customs duty on tobacco, petrol and certain liquors, impose an additional first registration fee on all motor cars, increase fees on driving licences, increase the duties on cheques and sweepstakes, and introduce provisions for taxation of luxury goods. With regard to income tax, it is proposed to reduce the personal allowance for resident individuals and Hindu Joint Families by $500, to make the allowance $2,500 for a single individual and for Hindu Joint Families, and $4,500 for a married individual. It is also proposed to increase the rate on the first two slabs of chargeable income from 3 per cent and 4 per cent to 5 per cent, making the first $1,500 of chargeable income taxable at 5 per cent. In addition, it is proposed to increase the graduated rates of tax on chargeable incomes in excess of $35,000 progressively to make the maximum rate 40 per cent instead of 30 per cent. The new 40 per cent rate applies to chargeable incomes over $55,000. The increased rates will apply to all resident persons with the exception of companies, trustees, excluding the trustees of incapacitated persons, and executors. It is proposed to bring these changes into effect from 1st January, 1957. Before I proceed, Sir, to explain Government's policy in relation to these proposals, I would ask hon. Members to bear in mind that income tax in this country is administered on a pan-Malayan basis in the sense that the Income Tax Ordinance in the Federation and that in Singapore are identical in all except minor respects, and that each Ordinance makes provision, for a single return and a single assessment in the case of persons having combined income, i.e., income in both territories. The need for uniformity, in view of the close economic relations existing between the two territories, was recognised when income tax was introduced in 1947, and was stressed repeatedly by members of the public, as well as by official and unofficial Members of both Governments. I think it is generally recognised that the operation of the Ordinance over the past nine years has amply demonstrated the wisdom of the pan-Malayan conception. The proposals which I have outlined have been fully discussed with the Federation Government, and the Federation Government is today introducing in its Legislative Council precisely the same proposals to amend its Income Tax Ordinance as we are here in Singapore. As hon. Members are no doubt aware, the tax imposed by the Income Tax Ordinance, 1947, is the only tax levied on income in Malaya. There are not, as in a number of other countries, additional levies of one kind or another described as, or akin to, supertax, surtax, surcharge, profits tax, emergency tax, excess profits tax, non-residents tax, or any other levies of a similar character additional to income tax. Income tax in Malaya is the one comprehensive tax on income and it has no supplements or appendages. Nowadays, virtually all developing countries include the taxation of income on a progressive basis as a major feature of their fiscal policy. By comparison with the income tax systems of other countries, the income tax charged in Malaya may be regarded as a reasonable and equitable impost, the rates of tax being generally lower, and the scales of relief higher, than those in operation elsewhere. As far as I am aware, in no other country, the income tax system of which includes a scheme for personal reliefs, is such a low rate as 3 per cent charged at the bottom of the scale. For example, the minimum rate of tax in the United Kingdom at present is 11¼ per cent, and over the past thirty years the lowest rate of tax in force in that country was 7½ per cent. The 7½ per cent rate was, in fact, in operation for one year only. To carry the comparison a bit further, the personal allowance for a single individual in the United Kingdom is $1,200. Here in Singapore it is at present $3,000. A married individual in the United Kingdom receives a personal allowance of approximately $2,000. The personal allowance to a married individual in Malaya is $5,000. It can be seen, therefore, that Singapore has treated its income taxpayers a good deal more generously than has been found possible in the United Kingdom, but I do not consider that the same degree of generosity can be maintained indefinitely. On the whole, the original scheme of the Malayan tax as contained in the 1947 Ordinance has remained stable over the past nine years. Apart from changes in the rate which have had the effect of levelling the company rate, the rate for non-resident individuals, and the maximum individual rate, at 30 per cent, almost all the amendments have been designed either to remove anomalies or to afford further relief to taxpayers in general. However, faced as it is with an urgent need to find additional revenue to meet the cost of social and other services provided or planned, Government, after very careful consideration, and, as I have said, in consultation with the Government of the Federation, has decided that the time has come to legislate for moderate increases in the general rates of income tax, accompanied by a small reduction in the individual personal allowance. It is generally recognised that the situation whereby the burden of income tax on individuals residing in Singapore falls on only some 19,000 of the population cannot continue indefinitely. We have, therefore, decided to reduce the personal allowance by $500, that is to say, the allowance for a single individual will be reduced from $3,000 to $2,500 and for a married individual from $5,000 to $4,500. The allowances for children will remain as at present. A married man with two children will, therefore, obtain reliefs totalling $5,750 plus relief on any contributions he may make to a provident fund, and on any life assurance premiums he may pay. A married man with nine children will obtain reliefs totalling $7,650; if he contributes to a provident fund, his reliefs will probably be in excess of $8,000. The reduction in the scale of personal reliefs is accompanied by the abolition of the 3 per cent and 4 per cent rates at the bottom of the scale. Instead of the first $1,500 of chargeable income being charged in three slabs of $500 at 3 per cent, 4 per cent and 5 per cent respectively, the whole $1,500 will be charged at 5 per cent. It is doubtful whether charging tax at such a low rate as 3 per cent is economically justifiable, and it is possible that tax payable at this level is not sufficient, considered by itself, to meet the cost of assessing and collecting it. However, apart from this consideration, it is most unlikely that any hardship will be caused to the taxpayers who will be subjected to the proposed changes in rates. At the other end of the scale, it is proposed to make the highest rate applicable to resident individuals 40 per cent on chargeable incomes in excess of $55,000 instead of, as at present, 30 per cent on chargeable incomes in excess of $50,000. I might mention, in passing, that in the United Kingdom a rate of 42 per cent is levied on chargeable income in excess of approximately $3,000, and much higher rates still where the total income exceeds $17,000. The other changes in the rates applicable to the larger chargeable incomes include the insertion of a new rate of 25 per cent which is applicable to the $10,000 slab of chargeable income immediately above the $35,000 point. The next $5,000 is chargeable at 30 per cent, and the next succeeding $5,000 at 35 per cent. This takes us up to $55,000 worth of chargeable income, above which point it is proposed to levy a rate of 40 per cent. The expected yield from these changes is estimated at $5 million in 1957, most of which will come from the wealthier taxpayers. The contributions made by the new taxpayers, who will be brought in by the reduction in the amount of the personal allowance, will be comparatively small. The maximum amount payable by an individual who was not previously liable to income tax, but who is now made liable by the reduction of $500 in the personal allowance, will be $25, and the average amount payable by such an individual will be $12.50 or approximately $1 per month. On the other hand, the changes made will secure that income tax is paid by a much larger section of the population, all of whom will be perfectly able to pay the small sums involved. The principle on which Government has worked is to broaden the base of the taxation pyramid so as to increase the number of individuals who are required to make some direct contribution, however small, to the general revenue of the country. It is the considered view of Government that at present the base, comprising as it does some 19,000 taxpayers, is much too narrow. Government's proposal for this small reduction in the scale of personal reliefs is estimated to increase the number of taxpayers quite appreciably, and is linked, as I have explained, with the increase in the rate of tax applicable to the wealthier members of the community up to a maximum of 40 per cent. Hon. Members may be interested to have some sample figures to show the impact of the revised rates and personal reliefs upon taxpayers with incomes at varying levels. For example, a single man with an assessable income of $3,500 will pay $50 instead of $15 in tax. If his assessable income is $5,000, he will pay $140 instead of $90. If his assessable income is $8,000, he will pay $385 instead of $320. If his assessable income is $12,000, he will pay $835 instead of $760. Again, a married man without children with an assessable income of $5,000 will pay $25 in tax instead of nothing. If his assessable income is $8,000, he will pay $215 instead of $160. If his assessable income is $12,000 he will pay $595 instead of $520. Yet again, a married man with two dependent children with an assessable income of $8,000 will pay $122.50 instead of $75. If his assessable income is $12,000, he will pay $460 instead of $385. If his assessable income is $30,000, he will pay $3,495 instead of $3,380. I think these examples will serve to show that the changes proposed are unlikely to cause hardship to anybody. A single individual with an income of $2,500 a year, or a married individual with an income of $4,500 a year, will not be required to pay income tax at all, so that the great majority of manual and daily-paid workers are still well below the point at which income tax is payable. It must also be remembered that allowances for children will still be deductable at present rates, i.e., $750 for the first child, $500 each for the next two children, and so on up to a maximum of $3,150, plus allowances for provident fund contributions and life assurance premiums. Hon. Members may wonder why Government has not proposed an increase in the rate of tax applicable to companies, having regard to the fact that income tax payable by companies represents a substantial proportion of the total yield. The company rate of tax is a matter of primary importance to most foreign investors since large-scale business investment is usually carried out through the medium of limited liability companies rather than through other forms of commercial or financial organisations. The company rate charged in Malaya has been 30 per cent since 1951, and it is reasonably well in alignment with rates payable by companies in comparable territories abroad. There is, however, one important difference and that is the difference between the company rate of tax in Malaya and the rate in the United Kingdom. This difference has recently narrowed to 12½ per cent, i.e. 42½ per cent less 30 per cent, and in the Government's view it is worthwhile retaining an appreciable margin between the Malayan company rate and that of more highly developed countries such as the United Kingdom. The margin is considered to be justifiable as an inducement not only to the investment of capital in Malaya, but also to the establishment of local directorates and managements of the enterprises set up. There will, in short, be a differential tax advantage in incorporating a separate Malayan company rather than in setting up a Malayan branch or unit of some large concern in the investor's country of residence. The advantage will, of course, endure only so long as the tax differential is a sizeable factor. The effect of the tax inducement in securing local rather than overseas direction and management is important in a consideration of industrial and business development in Singapore, particularly from the aspect of providing technical, executive and administrative opportunities in industry for Malayans. Government has, therefore, in consultation with the Government of the Federation, decided for these reasons not to increase the rate of tax on companies in 1957. It is proposed to increase the duty on tobacco and cigarettes. As hon. Members are aware, duty on tobacco is a most important source of revenue to the colony. Only income tax yields more. For the past three years, the duty on tobacco has amounted to over $33 million a year. Approximately 97 per cent of this revenue comes from cigarettes, the great bulk of which pay duty at the preferential rate. At the present time, there is a marked difference between the rates of duty on tobacco and cigarettes in the Federation and Singapore. Originally the rates of duty were the same but since the war, and particularly since the outbreak of he Emergency, the need for additional revenue has forced the Federation to increase its rates. Now, there is a wide difference in the rates of duty, which has persisted since 1953. As far as cigarettes are concerned, the Federation rates are $10.50 a pound full and $10 a pound preferential, whereas the rates in Singapore are $6.70 a pound full and $6.20 a pound preferential, a difference of $3.80 a pound in each case. Manufactured tobacco (excluding cigars and cigarettes) imported in containers of any kind for retail sale to the public - in other words, pipe tobacco - is charged duty at $10.10 a pound full and $10 a pound preferential in the Federation, and $6.90 a pound full and $6.70 a pound preferential in Singapore. Again, unmanufactured tobacco - that is, leaf tobacco - is charged duty at $7.60 a pound full and $7.40 a pound preferential in the Federation, and at $4.40 a pound full and $4.20 a pound preferential in Singapore. In the Federation, manufactured tobacco imported for use in the manufacture of cigarettes by power-driven mechanical means is charged duty at $8 a pound. In Singapore, it is charged at the rate of $2.50 a pound, as is shag tobacco imported from neighbouring territories. It is desirable that, as far as possible, the rates of duty in Singapore and the Federation should be the same. The only reason why the rates in the two territories are not now the same is that the need for increased revenue has been greater in the Federation than it has been in Singapore. Now that the need for more revenue has become urgent, attention is once more directed to the question of increasing the Singapore rates to Federation levels. There appears to be little reason why the rates should not be the same. By and large, salaries and wages are much the same in the two territories. Standards of living and the cost of living in the towns, where the bulk of imported tobacco smokers live, are much the same. Income tax is charged at the same rates. The only difference is that, while the inhabitants of Singapore pay customs duties on only liquors, tobacco and petroleum, the inhabitants of the Federation, in addition to a much higher rate of duty on cigarettes and tobacco, pay import duties on a wide range of consumer goods. In these circumstances it is hard to see any real reason why duty on cigarettes and tobacco in Singapore cannot be increased, without much hardship to the population. It is not proposed, however, to proceed immediately to Federation levels of duty. It is considered that an increase of these dimensions would be too sudden and might result in a contraction in consumption or perhaps a switch to cheaper brands. Instead, it is proposed to go approximately half-way to Federation levels. It is considered that this can be done without hardship to the individual smoker, without any permanent effect on consumption, and with little danger of any material switch to cheaper brands. With effect from this morning, therefore, the rate of duty on cigarettes has been raised to $8.60 a pound full and $8.10 a pound preferential. This increase means that the duty on packets of ten cigarettes of the great majority of brands will be increased by slightly under 5 cents and that the retail price will be increased by 5 cents. The price of larger packs will, of course, be increased correspondingly. This increase in the duty on cigarettes necessitates corresponding increases in other types of tobacco. The duty on pipe tobacco has been increased to $8.30 a pound full and $8.10 a pound preferential. Here again, the great bulk of imports pay duty at the preferential rate which is now the same as the preferential rate for cigarettes. Hitherto it has been the practice to charge a slightly higher duty on pipe tobacco than on cigarettes, it being considered that some allowance should be made for paper, cork and filter tips in cigarettes. There appears, however, to be little justification for maintaining this differential and it has now been abandoned. The differential between the full and preferential rates must be maintained because of the terms of the General Agreement on Trade and Tariffs. The duty on leaf tobacco will be increased to $6.00 a pound full and $5.80 a pound preferential compared with the Federation rates of $7.60 a pound full and $7.40 a pound preferential. The duty on shag tobacco will remain as it is at present. The duty on manufactured tobacco imported for the manufacture of cigarettes by power-driven mechanical means has been raised to $4.50 a pound, an increase of $2 a pound. The differential between this rate and the preferential rate on cigarettes is $3.60 a pound compared with a differential of $3.70 a pound previously. In the Federation, the rate of duty is $8 a pound which is only $2 a pound less than the preferential duty on cigarettes. There will doubtless be opposition from the manufacturers of local cigarettes who import this finely cut tobacco for the manufacture of local brands. It is clear, however, that the tobacco revenue might be jeopardised if too wide a differential were allowed between the rates of duty on imported cigarettes and imported manufactured tobacco of this type. While Government is anxious to encourage local industry, it cannot afford to lose any part of the important tobacco revenue. It is not thought, however, that the changes now proposed will have any material effect or the sale of locally manufactured cigarettes. Indeed, the mere fact that duties generally have been raised to a higher level, the differential remaining the same, may tend to increase the consumption of the cheaper local cigarettes. There will doubtless be protests against these increases in duty. Although we were criticized last year for not raising the duty on tobacco, we shall no doubt be criticized this year for having done so. But these protests and criticisms will not, in my opinion, be justified. The increases in terms of cost per packet of cigarettes are not great and are unlikely to cause any great hardship. If they do cause hardship in any particular case, the remedy is either to cut down consumption or change to a cheaper brand of cigarettes. It is estimated that the increases will yield about $9.5 million in 1957. They have been effective since midnight last night and an order under section 11 of the Customs Ordinance has been gazetted and will be tabled in due course. It is also proposed to increase the duty on petroleum by 7 cents, raising the duty from the present level of 73 cents a gallon to 80 cents a gallon. The consumption of petroleum has mounted steadily through the years. In 1952, 20 million gallons were released for local consumption; in 1953, 21 million gallons; in 1954, 23 million gallons; and in 1955, 26 million gallons. In 1956, it is expected that releases will amount to 28.5 million gallons, despite the increase in duty of 5 cents in November last year. It is clear that petrol can take a further increase in duty without any effect on consumption and it is doubtful if the increase will cause any hardship to any section of the community. The increase will have no effect on public transport, which largely runs on diesel oil. It is estimated that this increase in the rate of duty will yield approximately $2 million in 1957. It has also been decided to increase the duty on rum and gin. When the rates of duty on other liquors were raised in November of last year, no action was taken in respect of rum and gin. There has been a tendency for the consumption of gin in particular to decrease over the previous year or two. The taste for gin is fairly specialized. In Singapore at least it is not a potential substitute for whisky or brandy. There appeared to be little danger of any marked switch from whisky or brandy to gin as a result of the difference in rates of duty. On the other hand, there was a possible danger - although not a very grave one - that an increase in duty might result in a further decrease in consumption of gin. In the circumstances, it was decided not to make any change in the rate of duty at least for the time being. The situation has now been reviewed in the light of experience over the past year. The consumption of rum remains unchanged at about 3,000 gallons a year. There has been no marked switch from whisky and brandy to gin. Consumption of gin in 1955 was slightly over the 17,000-gallon mark. Statistics for the first nine months of 1956 suggest that consumption will be slightly over the 18,000-gallon mark, an increase of about 1,000 gallons. At the same time, further examination of the matter suggests that consumption of gin has now stabilised and that any tendency for it to drop, which was noticed immediately after the Korean War boom and which suggested a possible change in taste, has stopped. In the circumstances, it is considered desirable that the duty on gin and rum, which traditionally go together in the tariff, should be increased from $37.50 a gallon to $49.50 a gallon. Prior to the changes in the tariff which were effected in November last year, there was a duty differential of $11.50 a gallon between whisky and brandy on the one hand and gin and rum on the other. The new duty on gin and rum bears much the same relationship to the present duty on whisky and brandy as the old duties bore to each other. The rate of duty on gin and rum in bulk and rectified spirit which are also linked in the tariff has been raised in sympathy to $63.50 a gallon. It has also been decided to increase the duty on sparkling wines from $40 a gallon full and $30 a gallon preferential to $44 a gallon full and $34 a gallon preferential. The yield from these increased measures is estimated at $220,000 in 1957. I do not think that these increases will cause any great hardship. It is also proposed to impose a tax on motor cars in the form of an additional initial registration fee. Hon. Members will recall that a proposal to impose a tax of this nature was considered last year but was not proceeded with because common action with the Federation was considered to be desirable and because the Federation Government could not at that time see its way to impose a similar tax. Now I am happy to say that the Federation Government sees its way clear to take common action with the Singapore Government in this matter and is making a similar announcement at today's Budget meeting. The tax proposed is an initial registration fee of 10 per cent of the c.i.f. value of all motor cars registered for the first time in Singapore with effect from today. Motor cars are defined in the regulations as "motor vehicles constructed or adapted solely or mainly for the carriage of passengers or which have, to the rear of the driver's seat, roofed accommodation fitted or capable of being fitted with side windows". In other words, all motor cars, as the man in the street understands the term, estate cars, station wagons and vans used for the carriage of passengers, but not motor omnibuses. The fee will be paid in the same way as the initial registration fee at present paid on cars of non-Commonwealth origin, namely, at the time of first registration to the Registrar of Vehicles who will decide, after calling for such evidence as he may think necessary, what is the c.i.f. value of any particular car. As far as cars of non-Commonwealth origin are concerned, the new fee will be in addition to the fee of 15 per cent already charged. Cars which have already paid the fee in the Federation will, of course, not have to pay a fee in Singapore. It is estimated that the yield from this fee will be of the order of $1.5 million in 1957. There will possibly be complaints about this tax on the grounds that motor cars are a necessary means of conveyance in Singapore, that many members of the public, particularly in the lower middle income groups, rely on motor cars to take them about their business and to get their children to school, and that any increase in the purchase price, even a modest 10 per cent of c.i.f. value, will hit these people hardly. It is doubtful if these are valid complaints. However desirable they may be, motor cars cannot be called necessities even in Singapore, and it seems reasonable that those who can afford to buy and run them should contribute a little more to the revenues of Singapore than they do at present - particularly those car owners who pay no income tax. In this connection, in case it should be thought that no steps are taken to ascertain whether car owners are liable to income tax, I should say that the Registrar of Vehicles informs the Comptroller of Income Tax of the name and address of every new vehicle owner and the Comptroller then makes enquiries about his liability to tax. It is also proposed to increase the fee on driving licenses from $2 a year to $5 a year. This increase will be applied to renewals and to endorsement. At the present time, the fee in the Federation is $5 and there appears to be no reason why Singapore should not raise her fee to the same level. Statistics for 1955 indicate that over 12,000 new licenses were issued and that 60,000 licenses were renewed during the year. In addition, 18,000 provisional license were issued and over 13,000 provisional license renewed. On these figures, it would appear that, at the end of 1955, about one person in every twelve of the population of Singapore either had a driving license or was trying to qualify to obtain one. Quite clearly, only a percentage of these people are car owners or people who are required to drive a car and it appears that if they can afford to pay $2 for a license, they can afford to pay $5 as in the Federation. It will probably be argued in this connection that, in the case of people who are drivers by occupation, it is unfair to charge them $3 more than they pay at present for the license without which they cannot pursue their livelihood. But the fact of the matter is that $3 is not a serious increase in cost. It amounts to precisely 25 cents a month. The yield from these increases is estimated at $300,000 in 1957. It is proposed to increase the stamp duty on cheques from 5 cents to 10 cents, which is the rate in the Federation. When the matter was last considered in 1952, it was argued that any substantial increase in the stamp duty on cheques would lead to a reduction in the use of cheques and inhibit people who were contemplating opening bank accounts from doing so. As a result, when the Federation Government raised the rate from 4 cents to 10 cents, Singapore increased to 5 cents only. The increase in the rate in the Federation apparently had no marked effect on the use of cheques or on the number of bank accounts which were subsequently opened, and it is more than doubtful if the increase will have any effect in Singapore. The yield in 1957 is estimated at $300,000. It is also proposed, Sir, to increase the tax on sweepstakes from 20 per cent to 30 per cent. A substantial return is obtained from the tax on sweepstakes each year. For example, the return in 1954 was $2.8 million, in 1955 $2.9 million and, on the present basis of taxation, $2.8 million is expected in 1956. These figure indicate the very considerable amounts which are spent by the public of Singapore on this form of gaming. It is considered that the Government is entitled to a greater share of the proceeds and it is thought that the rate of tax can be increased without any appreciable effect on the amount of money wagered annually. The yield in 1957 is estimated at $1.25 million. The yield from all the measures of new and increased taxation which it is proposed to introduce is estimated at $20 million in 1957. The Government, Sir, also intends to introduce luxury taxes and a Bill on this subject has been tabled today. The Bill is lengthy and complicated. I hope hon. Members will give it careful study so that any anomalies or procedural difficulties, which may have crept in and which can be eliminated, can be removed in Committee in due course. Briefly, the Bill aims at imposing a tax based on wholesale price at wholesale level on any luxury goods which it may be decided to tax in the future. The question of the point at which the tax should be imposed has been given much consideration. The easiest point of imposition would, of course, be at import level. Luxury goods which it was desired to tax would merely be added to the customs tariff and the Comptroller of Customs would collect the tax at point and time of import in the same way as he does duty on liquor and tobacco at the present time. This, however, would be a radical departure from past policy which, in the interests of the free port status of Singapore, has limited customs duties to the traditional revenue earning commodities of liquor, tobacco and petroleum. It would be a departure which might have consequences in the outside world out of all proportion to what, in fact, had taken place. Although it is a step which may well come in the end, it is one which the Government would not wish to take precipitously or without the most careful examination and thought. The most difficult point of imposition would be at retail level. When one considers the number of shopkeepers and small traders of all races who deal in luxury goods in Singapore, one realise that adequate control of any system of luxury taxes at retail level would be quite impossible. It has therefore been decided, for the time being at any rate, that luxury taxes will be collected at wholesale level on the basis of wholesale prices. Orders and regulations prescribing the method of collection of tax and the methods of accounting to be used will be issued in due course. It is intended that the Comptroller of Customs will be responsible for the collection of Luxury Tax. I foresee that this tax will meet with considerable opposition, particularly from the trading community. They will argue that Singapore depends on trade, that trade is at present difficult enough in all conscience, and that this new tax will add yet another burden to a load which is already reaching unmanageable proportions. I should say that the difficulties which this tax may cause to traders, particularly entrepot traders, are fully appreciated, and everything possible will be done to minimise the difficulties and obstructions in the way of forms, returns, drawbacks of duty which may result from the imposition of the tax. The hard fact of the matter, however, is that we need all the revenue we can get if we are going to provide the facilities which are necessary if Singapore is not only to survive but grow in magnitude and importance as a world port. Traders can regard the extra efforts which they will have to put forth to overcome the difficulties inherent in a system of luxury taxes, as part of their contribution to the future of Singapore. As regards the principle of the tax, the fact of the matter is that vast sums are spent each year in Singapore on commodities which can only be regarded as luxuries. One has merely to look at the trade returns, at the shop windows, at the population as it goes about its business and pleasure in Singapore, to have this fact confirmed. If people have money to spend on these luxury articles - which they undoubtedly have - it is only right that Government should have a share of it. Even if the imposition of luxury taxes were to limit consumption of luxury goods, I should be perfectly happy since it would mean that the population saved more and had more to invest in the Government loans required for the provision of services which they demand. That, Sir, is the taxation programme for 1957. It covers a fairly wide field and will yield a substantial amount. On the other hand, it will not bear hardly on the population as a whole, or on any particular section of it. I hope that it will commend itself to hon. Members. Before closing, Sir, I should like to take this opportunity of paying a tribute to Sir Sydney Caine. He is an outstanding administrator and an economist of great renown. The services which he rendered to the Chief Minister as his Economic Adviser were of the highest order and his departure at this stage of the development of Singapore is a very great loss. I am sure that hon. Members will wish him well as Principal of the London School of Economics. I should also like to pay tribute to the Treasury officers who have been responsible for the preparation of the Estimates for 1957. Their services have been of a very high order. This is the first occasion on which an Asian officer has been entirely responsible for the preparation of the Draft Estimates, and I think hon. Members will agree that the volume now before them is in itself sufficient indication of his capacity to undertake this most important work. I should also like to take this opportunity to pay a tribute to the Government Printer and his staff who, as always have met all the demands - some of them outrageous by all normal standard - which have been made upon them. Sir, I beg to move.

The Question is "That the Bill be now read a Second time." In accordance with paragraph (2) of Standing Order No. 69, the debate now stand adjourned. Mr Financial Secretary, debate to be resumed, what day?

19th of November, Sir.

Order for Second Reading read. 11.28 a.m.

Sir, I beg to move, "That the Bill be now read a Second time." This Bill, Sir, seeks to provide for increase of duty on cheques from five cents to ten cents. The opportunity has also been taken to make a consequential amendment to section 44 by the removal of the words "chargeable with the duty of four cents" which was the duty at one time in force on bills of exchange and cheques. Sir, I mentioned in the course of my Budget speech that I was anxious to take this Bill through all its stages this morning. Sir, I beg to move.

Sir, I beg to second. Question proposed. 11.29 a.m.

Mr Speaker, Sir, I did not know that this Bill would come before me this morning, but as I am Chairman of the Malayan Exchange Banks Association I believe some of my colleagues will expect me to say something about it. The House heard the remarks that the Hon. the Financial Secretary passed on it when the question of increasing the stamp duty on cheques was raised before and that there were protests from local bankers. Sir, there may be protests from certain bankers that the increased duty will reduce the number of accounts on their books. I shall not join in such protests. As far as large companies using a great number of cheques are concerned, the increase can scarcely be of much importance and will be very easily absorbed. If the effect of the increased duty will be for small holders to reduce the number of cheques issued, then many bankers would thoroughly welcome such a state of affairs, and the Treasury would not suffer much from such reduction. Sir, I support the Bill.

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

Committee stage, what day?

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

I second it.

Question put, and agreed to. Bill considered in Committee.

Clauses 1 to 3 inclusive 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. Sir, I move, "That the Bill be now read the Third time."

Sir, I second it.

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

Order for Second Reading read. 11.37 a.m.

Sir, I beg to move, "That the Bill be now read a Second time." The Bill, Sir, seeks to raise the existing duty on sweepstakes from 20 per cent to 30 per cent. Sir, I beg to move.

Sir, I second it. Question proposed. 11.39 a.m.

Mr Speaker, Sir, I do not think that I am in a position to object to the Bill, but I want to draw the attention of the Government to the fact that this increased duty on sweepstakes will be a definite hardship to a poor wage-earner. I will explain why it is so. From my experience, it is the poor man, the wage-earner, the worker, who invests more in sweepstakes. Sir, I have been a member of the Singapore Turf Club for many, many years. It is usually the rich man who goes to the race-course for a cup of tea, takes a stroll and hardly invests any money in the sweepstakes; so he goes back home with his money. On the other hand, it is the poor man who invests in sweepstakes and this increased duty is an indirect taxation on him. 11.40 a.m.

Mr Speaker, Sir, I must disagree with the Member for Telok Ayer. The hardship on the poor man is when he is lured into wasting his money on gambling instead of spending it on his family, as he should do. Anything which we can do to discourage him from, not "investing", but throwing away his money in this foolish way is a removal of hardship from the poor man; and if this tax does not remove the hardship, at least it will benefit the exchequer. 11.41 a.m.

Mr Speaker, Sir, I welcome the increase in duty on sweepstakes and I personally hope that this will prevent or discourage many people from investing in lotteries; and if government revenue should fall because people are going to refrain from investing in lotteries, I think I will feel all the happier for it. However, I want Government to take note of one point, and that is, if you increase the duty on sweepstakes, does it not then make illegal lotteries even more attractive to the man in the street? Will it not divert people who might gamble on the Turf Club to other forms of gambling? I would like Government to think of it seriously, because the idea is that we should prevent people from all forms of gambling. Mr Hart rose -

Mr Financial Secretary, in reply?

Yes, Sir. Mr Speaker, Sir, we will take careful note of the remarks passed by the Member for Serangoon and the Member for Telok Ayer.

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

Committee stage, what day?

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

Sir, I second it.

Question put, and agreed to. 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. Sir, I beg to move, "That the Bill be now read the Third time."

Sir, I second it.

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

Mr Speaker, Sir, I move, That the Assembly do now adjourn.

Sir, I second it.

Question put, and agreed to. Resolved, That the Assembly do now adjourn. Adjourned accordingly at forty minutes past Eleven o'clock a.m.