Hansard, 1956-11-19

The following Members have, under the provisions of subsection (3) (i) of section 47 of the Singapore Colony Order in Council, 1955, obtained from the Speaker permission to be or to remain absent from meetings of the Assembly: Mr Ong Piah Teng - three months from 9th November, 1956; Mr Lee Kuan Yew - from 19th November to 23rd November, 1956; Mr Chew Swee Kee - from 29th November to 14th December, 1956.

I have received a message from His Excellency the Governor dated 9th November, 1956, informing me that His Excellency has, in accordance with the provisions of Section 62 (2) of the Singapore Colony Order in Council, 1955, assented to the following Bills: (i) Tan Tock Seng's Hospital (Amendment) Bill; (ii) Stamp (Amendment) Bill; (iii) Betting and Sweepstake Duties (Amendment) Bill.

I have to announce to Honourable Members that on the 13th day of November, 1956, I received a communication from the Honourable the Chief Secretary informing me that an Order has been made under the provisions of section 3 of the Preservation of Public Security Ordinance, 1955, for the detention for a period of two years from 10th November, 1956, of the Honourable Member for Bukit Timah (Mr Lim Ching Siong).

asked the Chief Minister what steps, if any, are being taken to bring the Legal Aid and Advice Ordinance, 1956, into operation; which portions thereof it is intended to bring into operation first, and when.

Mr Speaker, Sir, discussions were held with representatives of the Bar Committee towards the end of August with a view to clearing away difficulties which might prevent the Bar Committee recommending the profession to give its support to the measure. Since then, other and more urgent matters have been occupying my attention. I hope, however, that further progress will be made in this matter in the near future. In the meanwhile, I am unable to give the hon. Member the other information which he seeks.

Sir, I would ask the Chief Minister what prevents the establishment now of the Department for Legal Aid and Advice? It takes time to appoint officials and to have an organisation. Why do we not start now?

Sir, it is felt that before we start organising the Department, the co-operation of the Bar Committee should be assured to this Government.

asked the Chief Secretary to give the number of arrests between 25th October and 31st October, 1956: (a) for rioting; (b) for breaking curfew; (c) under the Preservation of Public Security Ordinance; (d) for other offences.

290 persons were arrested for rioting; (b) 962 for breaking curfew; (c) 912 under the Preservation of Public Security Ordinance; (d) 55 for other offences not necessarily connected with the riots.

asked the Chief Secretary to give the number of such alleged curfew breakers who were detained without bail for more than 24 hours.

Returns from the various police divisions indicate that 258 alleged curfew breakers were detained without bail for more than 24 hours.

asked the Chief Secretary to give the number of persons arrested under the Preservation of Public Security Ordinance within the aforementioned period who were detained -

Of the persons arrested under the Preservation of Public Security Ordinance -

Do I understand, Sir, that in the circumstances there are 194 still under detention whose cases are being considered?

No, Sir. The procedure under the Preservation of Public Security Ordinance is that unless a Detention Order is made before the expiry of the time during which the police may detain a person, he must be released.

Sir, but I understand that 912 were arrested under the Preservation of Public Security Ordinance. Of these, 502 have been released. That leaves us 410 not released. Of these, Detention Orders have been made against 216. That leaves us 194 unaccounted for.

The question, I take it, Sir, is: Will I please account for them? I will try and do that, Sir. It is quite true that there are a number who are not covered by the answers I gave to the question originally put to me. The explanation of that is this, Sir, that a number of persons who were originally arrested by the police under their powers conferred by section 17 (b) of the Preservation of Public Security Ordinance were later found to have been concerned with incidents such as curfew breaking and rioting and even arson, and they have therefore been charged under the ordinary laws of the colony. The explanation is that a number of persons who were held originally under the Preservation of Public Security Ordinance are now being charged in the ordinary way for criminal offences.

One more question, Sir. Of these 194, how many are, in fact, now detained under the Banishment Ordinance?

The hon. Member is quite right, Sir. I did omit to say that there are a comparatively few who are now held under banishment procedure. I have not the figures available, but I think it is about 30.

Thank you.

asked the Chief Secretary what is the State or official religion of the Colony of Singapore.

Sir, there is no State or official religion of the colony.

Is the Communist policy being followed here?

The hon. Member is completely out of order.

asked the Financial Secretary if he will make a comprehensive statement on the financial aspects of the expenditure on armed forces and contributions towards Imperial Defence for the next 5 years.

Sir, the provision for defence services which is made in the 1957 Draft Estimates is as follows: - Royal Malayan Navy $ Recurrent Expenditure Personal Emoluments 2,720,270 Other Charges Annually Recurrent 1,275,250 Special Expenditure 307,970 --------- 4,303,490 --------- Royal Malayan Navy-continued $ Capital Expenditure Shipbuilding 500,000 Public Works, Non-Recurrent 445,000 --------- 945,000 --------- Malayan Royal Naval Volunteer Reserve $ Recurrent Expenditure Personal Emoluments 391,790 Other Charges Annual Recurrent 253,220 Special Expenditure 99,700 --------- 744,710 --------- Singapore Military Forces $ Recurrent Expenditure Personal Emoluments 2,324,150 Other Charges Annual Recurrent 1,027,190 Special Expenditure 620,240 --------- 3,971,580 --------- Capital Expenditure Equipment 1,000,000 Public Works, Non-Recurrent 12,000 --------- 1,012,000 --------- Malayan Auxiliary Air Force $ Recurrent Expenditure Personal Emoluments 494,340 Other Charges Annual Recurrent 352,310 --------- 846,650 --------- The total estimated expediture in these defence services in 1957 is therefore as follows: - Recurrent Expenditure $ Royal Malayan Navy 4,303,490 Malayan Royal Naval Volunteer Reserve 744,710 Singapore Military Forces 3,971,580 Malayan Auxiliary Air Force 846,650 --------- 9,866,430 --------- Capital Expenditure $ Royal Malayan Navy 945,000 Singapore Military Forces 1,012,000 --------- 1,957,000 --------- In making provisional allocations of funds for various services for the next five years, it has been assumed that by 1961-2, on the basis of In making provisional allocations of funds for various services for the next five years, it has been assumed that by 1961-2, on the basis of existing plans, expenditure on defence services generally may be of the order of $18 million a year. This estimate includes both capital and recurrent expenditure. However, as the plans for the defence services of Singapore are now under revision, this estimate must also be regarded as subject to revision. It will not be possible to make a new estimate until the revised plans have been finalised. With regard to contributions to Commonwealth defence, the Contribution to Imperial Defence Ordinance (Chapter 64 of the Revised Edition) prescribes that an annual contribution of $4 million will be made to imperial defence from the funds of the Colony of the Straits Settlements. After the war, when the Settlements of Penang and Malacca became part of the Federation of Malaya, liability for this contribution was apportioned and Singapore's share became $2,628,000. It was then agreed with Her Majesty's Government that this contribution might be devoted to meeting expenditure on the Royal Malayan Navy and special expenditure on the Malayan Royal Naval Volunteer Reserve. In the early years after the war, expenditure on these forces did not come up to the level of the defence contribution and the balances were held in the Royal Malayan Navy Fund for use in future when expenditure on the Royal Malayan Navy and the Malayan Royal Naval Volunteer Reserve increased. This expenditure has increased and the Fund has slowly been run down until now in 1956 it is exhausted.

If it please you, Sir, I had hoped by the question to elicit an indication of Government's policy towards defence forces for the next five years, but we have been given what, in fact, is available now on the papers before us. I would ask the Financial Secretary whether Government is considering presenting a White Paper on its defence policy for the next five years. One cannot get a view on one year's working.

The question, Sir, dealt entirely with the financial implications of defence policy. The question of defence policy itself is not a matter for me to answer.

For the next five years.

Order read for resumption of debate on motion-[7th November, 1956]: Question again proposed, "That the Bill be now read a Second time." 10.15 a.m.

Mr Speaker, Sir, it seems to me that it is usual for the Financial Secretary year in and year out to tell us that we must be taxed more and that the future is bleak. In fact, such a warning was given by the Financial Secretary in the Official Report, Vol. 1, No. 19, dated 21st November, 1955, at col. 1063 where he said that he was not going to be accused of crying wolf once more and that we were going to be faced "with the hard reality of actual deficits". Now we are coming to the end of 1956 and we know the exact position, and the position is that we still have a surplus. Invariably there is always a surplus in the matter of collection of taxes. This fact is known by everybody almost every year and in effect the Financial Secretary admits it. On page 1 of his Budget speech he says: "In all, it seems likely that revenue collections will amount to about $217 million compared with the estimate of $215 million." Here again, Sir, the Financial Secretary admits that the estimate for tax collection is always low, whereas the estimate for expenditure will always be higher than it should be. Why is it so? I think it is just to create the impression that additional taxation is necessary. On page 2 of his Budget speech in the second paragraph, he says: "...that the working for 1956 will show a small surplus, possibly of the order of $2 or $3 million." This is an admission by the Financial Secretary himself, Sir, and it is important. Again on page 5, in the fourth paragraph, he says: "...actual expenditure has in the past in variably fallen short of the estimate. It is likely that this will occur again in 1957." And again on page 6 the same tune is played, and here he says: "...it is possible that actual expenditure will fall considerably short of the estimate." Sir, in his Budget speech the Financial Secretary has drawn our attention to the fact that expenditure will not be as high as has been put forward in the Estimates. It is significant that he has drawn our attention to it more than once and, because he is supposed to be an expert on the subject, we must believe that expenditure will definitely fall short of the estimate as presented by the Government. Now here we have a case where every year you are going to have the collection of revenue more than the actual expenditure which, according to the estimate put out, will be less than what is presented to us, and in the end there will always be a surplus. This has been going on through the years. Every year we have had this state of affairs, and this leads us to ask the question whether there is any necessity at all for further taxation. I think, Sir, with all the warnings by the Financial Secretary that the future is bleak, we must tighten our belts, we must pay more, expenditure is mounting and all that, all this tends to give the impression to hon. Members in this House as well as to the public at large that we are in real need of further taxation when, in fact, from all that has been said, there is no necessity at all. Perhaps it is just the way with everybody, just like boys between the ages of 8 and 10, that it is a habit to hoard some money. It is just an instinct with Government, I think, to want to feel the money in its pocket and jingle it and say, "Now, I have the money and if I want to spend it on anything extravagant, I can do it. There is no need to cut my coat according to the cloth. There is no need to think of saving on this little item or that. The public will pay whenever we tax them, because the power is in our hands. So long as we have money, well, it is public money, although we may have contributed a little to it in the way of income tax. So let us spend it, let us be generous with it." If that is the case, Sir, I think it is absolutely wrong. We are here as guardians of the people's money. We have to spend it wisely. We must think of every cent that has to be spent. It is because it is other people's money, the public's money, that we should exercise even more care in spending it or even in wanting it. I cite you one case, Sir. The Government promised us something last year during the debate on the Second Reading of the Appropriation Bill, but I am still looking forward to that promise being kept. I refer hon. Members to the same Official Report that I have just quoted from, this time at col. 1010, where the Chief Minister (he is now the Member for Cairnhill), in reply to a question by my hon. Friend the Member for Tiong Bahru on the question of the personal emoluments of the civil service, said: "I am far from complacent about the expenditures of the Government. We have been seven months in office, Sir, and this sort of axing is not done in a day. I certainly intend to pursue methods which I have in mind for greater reduction in expenditure in the future." Here, Sir, was a promise by the then Chief Minister to look into the matter of the expenditures of the Government. Today, Sir, we still have, with the exception of one Member, the same people sitting on the Government Front Benches, and I expect that, because it is a Labour Front Coalition Government, it will carry out the same promises that it has made to the people, and I hope that regarding this matter it will carry out its promise. According to the Budget, however, I think the increase is in the region of $98 million to $113 million. That is a big jump for personal emoluments. I think the Government in this matter did try and tell the public, "We will try our best and streamline the Government. We have, in fact, an Organisation Committee to streamline everything, to advise us on methods, to advise us on ways and means of giving a more efficient service to the public and at a lesser cost." Yet, with all these methods and streamlining experts, nothing substantial has been produced. In fact, if we draw a graph on a matter of expenditure of this nature, we will find that it goes on -I will say Y is equal to MX plus C, which is a straight line graph, showing that it is going up all the time. Nothing more. Now let us consider again whether Government actually needs all this extra money by taxation for next year's Budget. During the Second Reading we heard from the Financial Secretary that the relief for income tax will be lowered from $3,000 to $2,500 for a single individual, and that this is a "must". Sir, I have received news again through the Press that the Government has waived that reduction and has restored the floor for income tax to $3,000. This is really commendable - that the Government can still take heed of public opinion. I do not quarrel with granting relief to people paying income tax, but one thing which strikes me is this. Here you have a government telling the people that we need more money. We must raise our money by income tax and by more tax. We must raise money by taxing cigarettes, by taxing on other vices like sweepstakes and so on. We must have direct taxation. We must have indirect taxation. All these are "musts". And after the Government has said that all these are "musts", we find that suddenly, because there is pressure from outside, it is going to be unpopular, people are going to throw mud at the Government more than is necessary, the Government says, "Oh no, we are going to replace that $500 tax relief. No, we do not need that much money from taxation of that kind. We can make up for that. We can still spend our money and not feel the shortage." Let me put the case this way. If the Government needs money and collects it by that sort of taxation, and then it withdraws the proposal to impose that kind of taxation, then I believe that every time it wants to impose a tax on something and enough opposition is whipped up against it, I am sure the Government will in a similar way withdraw and say, "We will withdraw the taxation - ".

We are democrats and not dictators.

Exactly, exactly! So we have this sort of affair going on every time. The Government says it is going to tax something and that it is a "must", but when it comes up against opposition, it withdraws. So its "musts" are actually elastic ones and not like an unbending metal rod. You cannot twist it, nor can you bend it. In fact, I think there is no necessity whatsoever for any taxation. There is no need for increased taxation. You can spend the amount of money derived from the old tax and that will be more than sufficient. Now let us look at the proposed taxation programme of the Government. The first item on the list is income tax. I would like to draw the attention of the Government to its old election pledge - that it will only tax those who are most able to bear the burden. It is a very good idea but the point is how to carry it out in practice. Theory is one thing, practice is another. If you say one thing is good and then you do not practise it, then what will people think about you? Not much, I am afraid!

He is talking!

I am talking! In the matter of taxation there are two ways. One is direct taxation, by way of income tax. The other is indirect taxation. If we have direct taxation, and income tax, then we really put the burden on those who can best bear it, because in income tax those who earn more will pay more and those who earn less will pay less. I think that is the fairest way of taxation. In the matter of indirect taxation, you find so many people in the streets - whether they are rich or poor - indulge in their little vices and their bad habits with no distinction, and, in fact, many of the rich do not. So, if any money is to be drawn from the public, the rich man will pay his little share, probably in the ratio of one in half a million. I am talking of adults. I do not know, but it may extend to young people, and that will even make the share of a rich man less. On this type of taxation you tax not only on the bad habits of the people, such as smoking, gambling and drinking, but I am afraid that it will also touch on the daily necessities of everybody. I will come to that soon enough. So if the Government is going to carry out its policy and say that tax is going to be imposed on those who can best afford it, it must not have direct taxation and then indirect taxation. Indirect taxation must be reduced to the absolute minimum.

No schools, no teachers!

Do not worry about that. We will have plenty of them! It is only a matter of how you spend your money.

Manufacture it!

There is no need to manufacture anything of that sort. On a matter like this, it is just like a firm engaging a manager. The manager will say, "We will spend this and we will spend that and we will gather our income this way and that way." But if at the end of the financial year it is found that the manager is not going to make his ends meet, not only will the shop have to close down but the manager himself will get the sack. He will be very glad to supplement the tax programme of the Labour Front Coalition Government if he gets unemployed! Let us come back to the first item of taxation - income tax. The Government is now proposing to do away with the lowering of that $500 relief, but it still intends to do away with the three per cent and the four per cent and change these rates to five per cent. Sir, in this connection the Financial Secretary stated that a programme like this would bring in an income of roughly $1.5 million. This is a small sum, but if the Government takes away that $500, as it intends to do, and only changes the rates of three per cent and four per cent to five per cent, then the only people who will be affected will be the present income taxpayers - only 19,000 persons. It can easily be calculated that each person is going to pay the Government roughly -

$15 on chargeable income.

$15 extra. So $15 multiplied by 19,000 comes up to a very negligible sum.

Quarter of a million dollars.

Good for one trip to Kuala Lumpur or Hongkong or a trip to England to observe transport! Sir, it is my firm conviction that such a revision of taxation, which brings in no visible increase, no substantial increase, should be dropped immediately. In fact, the people who are being taxed now - the 19,000 people - are paying quite a large percentage of the revenue of the country.

Not true.

What we need is a more efficient Income Tax Department to bring in those who have not yet been taxed but are within that taxable range. As far as income tax is concerned, Sir, I know that we only grant relief to the income taxpayer, his wife and his children. Let us remember that we are living in the East and in the East the set-up of the family is entirely different from that in the West. In the East the parents are considered as an integral part of the family, in fact, the most important part of the family. When the children grow up and after they have obtained their education and are able to earn their living, they will, by custom and tradition, support their parents. In fact, it is their duty to do so. This, Sir, is one of the best attributes of those who live in the East. The family ties are strong. So we have here the case of the taxpayer supporting his parents, instead of the father running along to the Social Welfare Department and saying, "Sir, I have no job and my son is not supporting me. I must live on the public dole." The public dole is $15 per person. If you calculate the number of old parents who depend on the dole, you will find that the money given out comes up to a very sizeable sum. That sum of money should have come from Government, but it is saved for the Government. Why is this expenditure saved? Because of this Chinese tradition, that the son who is able to earn a living should support his parents. We in this House, Sir, have declared ourselves to be staunch supporters of the cultures of the East. We have said that we support Chinese culture, Indian culture and so on, but we must prove that we are really supporting it by implementing measures which will convince the public at large that we recognise that fact and that we will do it. The Government has had troubles with the Chinese school students who said, "You are destroying Chinese culture", and they told the Chief Minister, "Chinese culture says that we must hsueh hsi" and the Minister for Education said, "You must respect the teachers and honour your parents." Here, then, is the opportunity for the Government to ram home the fact to the people of Singapore that it is going to uphold Chinese culture and it is going to amend its laws in accordance with the way of life of the people in the East. If you are talking about the West, then you may object to my talking about people in the East. But let us also talk about England. Let us talk about America. These are countries that the Government likes. In America and in England you still have relief for parents, and if you look it up, you will find that in special cases they give allowances to such people. So why cannot we in Singapore do that? If we do that faster and quicker, it will be better for us. [Interruption.] Regarding the 3 per cent and 4 per cent rates of taxation again, Sir, it is contrary to the principles of the Labour Front. The burden of taxation will not be on those who are more able to bear it, but it will be on everybody who pays income tax; in other words, everybody must pay additional tax. Whether it is $15, or $10, or $2, or $1, it is still taxation. If the Government obtains $1 by income tax, $5 by taxing cigarettes, $10 by taxing petrol, and so much by another kind of taxation, you will find that the poor worker will have to pay, not just $5 or $10, but much more than you think they do. Now it is said that $2, $5 or $10 is a very small sum, but let me tell the Government this - the value of money today is not what it should be. If you compare the value of money in 1940 with what it is now, you will find, in all probability, that the value of money now is only one-fifth of what it was in 1940. I am putting this case not because you must spend more, but because I am going to talk about the taxpayer -[Interruption.]

Order. If the hon. Member will address his remarks to the Chair, I think he will not be interrupted so frequently.

Yes, Sir. The barrage has started from the opposite Benches, Sir, and it is only right that they should receive a salvo in reply! Sir, I was talking about the poor income-tax payer. We tax on $3,000, but if you think about its value as compared to 1940 or so, it will roughly be $600 and that will work out to $50 a month, and $50 a month even in 1940, Sir, would not ensure a person a good standard of living. This person will not have sufficient for his needs and, because of the set-up in the East, it is not only his parents that he must feed and look after, but once in a while one or two unemployed relatives will come running to him for a little financial help - it may be $5 or $10 - and sometimes these unfortunate people may have to be given shelter and lodging, and further he may unwillingly have to take in a helping hand. My contention, then, is that income tax relief should not only be restored as it is now to $3,000, but also include further relief for parents. Everybody recognises that it is the duty of children to honour their parents. It is one of the Commandments in the Bible. So it is with the Muslims and the Indians, too. It is with everybody's belief. Let us show them that we are different from the West where parents can be left out after they have brought us up. The old folks go to old-age homes. They get government dole. They get old-age pensions. As an illustration, I know that the following case can happen in England. If I am a friend of the son and I want to go to another place where the son's father is staying, the son will send his father a cheque, say, of £5 and he will ask his father to entertain me on his account. The son will then tell the father to send him back the bill for entertainment expenses and also to send back the balance if there is any remaining. I have known cases like this personally, but in our Chinese set-up, it is not like this. My father's friend is my friend and my friend is also my father's friend, and if my father has not enough money to entertain his friend, it is my duty to give it to him. And if I cannot afford it but my father can, he will do it for me. When my father brought me up, he gave me everything that I had and now it is only a return of his generosity. Nothing else. We have, Sir, the Financial Secretary telling us that in the United Kingdom people are being taxed much more - 7½ per cent at the minimum. He says we have lower taxation here and we still grumble. I will not grumble, Sir, if we follow it even in the higher ranges of income. But I am not going to follow little bits here and little bits there just to suit the purpose of the Government. No, Sir, I am not. Then we have the tax on tobacco. Oh, tobacco is not essential! If you do not smoke cigarettes, you will not starve and you will not die! Yes, Sir, I agree with his views. So we increase the tax on cigarettes. So the poor man in the street, after hearing of the increased tax on cigarettes by the Government, will make a resolution and say, "I shall not smoke from today on." Other people will make the resolution, "Whereas in the past I have been smoking ten cigarettes a day. I will now cut it down to three."

Smoke local cigarettes.

Sir, whether it is local cigarettes or high-class cigarettes, it comes to the same thing, it is still cigarettes, no matter what it is. And all the resolutions about breaking off the habit of smoking cigarettes will be forgotten in a week's time, and so the poor worker will come back again to the original position of smoking as much as he did before and he will not change his brand of cigarettes either, because he is addicted to that, Sir. Then what happens? An hon. Member: Support local industry!

Money is again taken from the working masses. I am not prepared to quarrel with higher taxation on cigarettes, not like the P.A.P. The Government can carry on taxing cigarettes. I will not also say that I am going to criticise it severely, but there is one aspect of the matter which I think the Government should know and should study very carefully, and it is this. The poor man will now have to pay more for his tobacco. His source of income is only from his employer; and if he has to pay more, it means he will have less for his family; and if he is going to have less for the family, he is not going to be contented. He is not going to sit down and say, "Well, son, we are not going to have fish today. Let us have dried prawns." So, somehow or other, he will have to take it out from his employer. The consequences of increasing taxation, so that the poor people will have to pay more, will be that they will have to demand higher wages; and if they demand higher wages, then there will be higher costs of production and sooner or later you may not be able to compete with manufactures from other countries. Support your local industry when probably you will be manufacturing just sufficient for your local consumption and will not be able to export - that will be a sorry state of affairs. Let us now look at the tax on driving licences, Sir. It is again a very small sum. Who cannot afford an extra $3 a year? It works out to exactly 25 cents a month, so said the Financial Secretary. An extra few dollars for petrol; another extra few dollars for tobacco; and with the spiralling of prices and inflation and so on, again it hurts the workers. Again the burden of tax is not placed on those who can bear it. An hon. Member: On the tuan besars then?

Oh, yes, you will usually find that the tuan besar sits in his motor-car and a syce, whose pay is roughly $100 a month, will drive it. How many tuan besars will worry about $3? If the Government ever says that they are worried over this $3, then tax them. But I affirm that the increase of driving licence fees is a taxation which is aimed at getting money not from those who can afford it but from the general masses. It will hurt them to a greater or lesser degree. Last year, Sir, we heard that there would be an increase of only five cents per gallon on petrol. That would not hurt. Five cents would not matter. Everybody could afford to pay an extra five cents. Then this year we are told that there will be an increase of seven cents per gallon on petrol. Sir, I find it very tiring to hear that whatever other people do, we must do. Whether it is right or wrong, let us do it. Why? Because somebody else has done it. Sir, my argument is this: last year the increase on petrol was five cents a gallon; this year it is seven cents; next year it may be 20 cents; another year it may be 40 cents; and so on we keep on adding, and each time we are told it is only a small increase. Sir, as an example, let us take a piece of cake. If we keep, on cutting off small pieces, there must come a time when there will be no more cake left. If the tax on petrol is increased, but we have a good transport system whereby everybody can get a bus easily, then I will not quarrel with that, but our transport system is horrible.

Hear, hear! [Interruption.]

Sir, one day I was waiting at Finlayson Green for an omnibus, and do you know how long I had to wait for that Singapore Traction Company omnibus? One hour to be exact - half-past four until half-past five in the evening. [Interruption.]

Order.

Sir, as an Assemblyman it does not prohibit me from taking an omnibus, or for that matter any kind of transport. In fact, Sir, every Assemblyman here should try and live the life of a simple worker so that he can understand the conditions under which the worker lives. What is the use of talking in the Assembly that he is working in the interests of the worker when he does not know how a worker lives? Now that is the state of affairs prevailing. There is no good transport system. Therefore, small cars costing $3,000 or $4,000 each, with a consumption of 50 miles a gallon or so, are an essential part of the transport system, and although they are private transport in that they carry the owners or the owners' friends, still they assist in the transport system. Sir, if these small private cars were to break down and thereby prevent the transport of children to school, imagine the chaos that would take place. I think it did happen once. Even with the use of lorries, how many hours do you think it will take to bring the children to and from their schools? Sir, the increased tax on petrol will definitely affect transport. In this case, it will, of course, affect the middle class of people, those who own small cars for a small family. But to those who are in the very high income group, whether petrol is going to cost $2 or $3 or $5 or $10 a gallon, it does not matter because money comes in easily and they have enough to eat, to entertain their friends and also enough to spare. Then, Sir, there is the tax on gin and rum. An hon. Member: Poor man!

Sir, I hear the words "poor man", but I say this - those who increase taxation of this kind are only aiming to protect those who can afford to pay more taxes.

Who drinks gin?

It does not matter, Sir, whether it is gin or rum or whether it is the purchase of a sweepstake ticket. The buying of sweepstake tickets is indulged in not by the rich mostly but by the poor who hope one day to win a lottery and then be in a position to live in a big house and have nothing to worry about. Of course, if we tax more from this bracket of people, then we need to tax less from the higher income group. That aim, Sir, is contrary to the principles of the Labour Front. I am only telling you, Sir, what the Labour Front has promised us and what it should carry out. An hon. Member: Join the Labour Front.

God forbid, Sir! I will not join the Labour Front. In fact, I wish they might join me so that we can have cleaner air and a more efficient system of running business. The next taxation is on cars - ten per cent on every car. Whether that car is going to cost you $3,000 or $7,000 or $10,000 or $20,000, it is ten per cent tax. I do not quarrel with that. I do not say that car tax is wrong. In fact, I think car tax is quite right, but I just want you to think in this fashion. We have many people who are just earning an income of $400 or $500 a month, and because of the present transport difficulties, they save up to buy a car. I ask you, Sir, how long will it take a middle-class wage-earner to save up $4,000 to buy a car? It takes a lot of time. If the tax is increased another ten per cent, it means another ten per cent of the time to save that money. What is about to be within his reach is now a little further away. Let us then see how it affects the people who are going to buy cars costing $8,000 or $9,000 or $10,000. They will go to the salesroom and tell the manager to show them the best cars. "$11,000? Oh, just send me the car and I will sign a cheque for it." There is no such need for saving. The money is there ready. Whether the increased tax is ten per cent or fifteen per cent, it does not affect them very much. It would have been saner and more acceptable to the public if such taxation were done on a sliding scale, like that of income tax. You put a tax of five per cent on a car costing. $4,000 c.i.f.; ten per cent on one that costs $6,000 or $7,000 c.i.f.; 15 per cent on one that costs $8,000 or so; and 25 per cent or 30 per cent on one ranging between $10,000 and $20,000 c.i.f. Taxation on such a scale would have been fairer and more acceptable; something that would go along with Government's declared policy. How often must I remind them of their policy, Sir? To cap it all, Sir, the Government say that they must have luxury tax. If it is expected that the people of Singapore will say, "Yes, we will agree with luxury tax, because it will not affect us," I think the people will be badly misled.

How do you know?

Past events, Sir, have made me wise. The first item that comes into our head as a luxury will be an air-conditioning set. Yes, everybody will echo that. Then the next item will be something that will not evoke many "yeses".

Yes.

Sir, not from people who earn about $13,000 a month audited income! Then we go along to the next item on the luxury list - jewellery. Oh, yes, diamond earrings and bangles are luxuries. The poor worker goes into a goldsmith's shop and asks, "That gold bangle that I am about to buy, and that little gold ring, are they luxury items?" The definition of the law says it is so and you have to pay tax -

No.

Many more "noes" will come in this direction. When you start to define "luxury", you will not know where to stop.

I will not stop you!

Where will a greedy government stop? Probably it will say the same thing as the Federation Government - we need all that taxation. I hope, Sir, we are not going to be as lavish as all that - to copy on a matter of higher taxation but not on a matter of more liberal socialist schemes. I think these additional taxes are just nonsensical. They are just not necessary and they are contrary to the Government's own principles, and if it were wise enough, it should drop each and every one of them. After this talk on income tax, Sir, it is important that we find out where all the money that the Government has taxed will go to. Needless to say, over 40 per cent will go to personal emoluments, and we are still looking forward to the Government to streamline its service with its methods advisers and all sorts of advisers in order to have increased efficiency at lesser cost. Further, a lot of money will go into what the Financial Secretary has said at page 2 of his Budget speech - change of ideas and plans. The relevant part reads: "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." Let us see the change of plans again, Sir, on page 9 of his Budget speech as compared with what he said at col. 1064 of the Official Report, Vol. 1, No. 19 dated 21st November, 1955, where he said, on district hospitals: "It has been explained that we have changed our plan and that we are now going to Kallang...". On page 9 of his speech this year the Financial Secretary says: "A start is to be made with the new District Hospital which it has now been decided to site at Tanah Merah Kechil." How many changes are we going to have? Is the Government going to change its plans every now and then when every change will involve a further expenditure of money, sometimes a few hundred thousand dollars and sometimes a few million dollars?

Savings.

Savings! Everytime there is a change of plans, there is an additional unforeseen expenditure. If Government cannot make up its mind, then I say that it is government inefficiency and government shortsightedness. When Government wishes to build a hospital, it visualises one that will be grand and beautiful and equipped with air- conditioning plants, rest rooms for doctors and nurses, and rooms for V.I.P. visitors who might be going round the hospital; and so we have a hospital built at a cost of millions of dollars. During previous debates I have pointed out to the Government that a hospital is built primarily to heal people, and if you build cheap hospitals on the model of the old Tan Tock Seng Hospital, they will still cure, they will still heal people, and people will still flock to them to be treated. This is the case where, if you build a cheap hospital, it will not give the particular V.I.P. the opportunity of declaring it open in a flowery speech. Other reasons have been given. One is that space is limited and therefore we must build upwards. I tell you, Sir, there is plenty of space and land. There is still cheap land going around and Government can acquire it if it acts quickly enough, and will not be short-sighted until the price has gone up further. Of course, we now have the Land Acquisition Ordinance to protect the Government and since we have that measure, Government should exercise it and save the money that is contributed by the public. The Government, Sir, I say it again, should try and make up its mind on everything, so that there need not be any change of plans or any change of ideas. I say this because Government expects the people with whom they are dealing not to change their plans and not to change their ideas. If a certain institution comes along to the Government and submits an estimate of a plan it has in mind and tells Government that it wishes the plan to be carried out in a certain fashion and asks for a grant of $10,000, the Government, after studying the plan and changing it and slashing the estimate, will say, "All right, the plan is now acceptable and we will give you $8,000." But in the case of members of the public, they cannot however change their plans and change their ideas, because if they do, then those plans will go through only after a matter of ten more years. Of course, being the Government, it has the privilege of being able to change its plans and its ideas whenever it is suitable. But I say to Government, try and set an example to the people. Further money, Sir, is going to be poured into the Singapore Improvement Trust in the matter of loans, and some of the loans, we have been told, Sir, will be changed in that reference to them will not appear in the Estimates. I am no accountant and so I do not know much about that. I am only talking from a layman's point of view. However, I find myself in a difficult position trying to reconcile the large sum of money that has been given to an institution which is putting up buildings the rental for which is far higher than that charged by private builders. I know of private builders building houses along main thoroughfares renting out at $70 per flat and $120 for the ground floor where the tenant can do business. I know of S.I.T. houses along Boon Keng Road which are rented out at $96 a flat -

$110.

$110, and in Upper Pickering Street, for shop houses -

$450.

$450! Here you have a case, Sir, where the S.I.T. is not able to compete with the private builder in building shophouses or flats at a cheaper rate and we are pouring money into it - [Interruption.]

Order.

Never mind, Sir.

We do mind.

Let us come to the cheaper houses, Sir. Let us say that we will admit that there are houses that rake in $450 per month rental, but let us take the cheaper ones. The cheapest houses that the S.I.T. can produce are the Queenstown houses where people draw lots for them at $7,000 each. $7,000, and that is with a government loan, but $7,000 is still too high for the Government to produce such a type of house. I know of private builders who give far greater value for $7,000 because the tenant will be able to get a bigger piece of land and a bigger house. In fact, if I can be excused for advertising, my hon. Friend the Member for Paya Lebar (Mr Lim Koon Teck) is prepared to build such houses at a lower cost and still is able to make a profit. He will be able to build them without having to have a planning office, a manager, and a big car park, and so on. All these are additions that contribute to the high cost of S.I.T. buildings. Do away with all that. Do not make the organisation too top heavy and the stage will be reached where the S.I.T. can build houses that are comparable with those produced by private builders. This is not just criticism, Sir. I am pointing out facts. If the Government is wise, it should take note of such facts and investigate them. Only then will it be justified in putting up loans and spending more of the people's money. Then we have the assessment that is levied on people who own houses. Middle-class people do find it difficult to build their own houses. They have no money, so they go along to the co-operative societies and ask for a loan to buy a house. They then move into their house which is mortgaged. There is a housing shortage and Government should encourage people to own their own houses. If it is to do this, it must offer some sort of inducement. Sir, I will talk about Serangoon Garden Estate. In that place they are going to raise the rate of assessment to round about $750. I know of a case where the rent is assessed at $250 a month, and 20 per cent of that is $50 a month assessment. If a person who owns such a house is going to pay $50 on assessment alone, then I think he would rather prefer to live in a cubicle, and let the Government solve its own housing problem. But I am afraid Government will not be able to solve it because its costs will be too high. I believe that the assessment rate for people who own and live in their own houses should be as low as possible. I know that the Government, in reply to this, will say, "We are not levying such heavy taxes on everybody, but we are only levying them on people who rent out their houses." But I say, Sir, that the tax that Government levies even on people who live in their own houses is still too high. This is one way, and a very good way, of discouraging people from owning houses and one way of justifying how Government can spend more money. Now let us look into another big item in the Estimates. Although it is important to know where the money has gone to, I think the more important thing is where the money should go into but did not get into the Estimates. We are now going to see where the Government has omitted the very important things. On page 5, paragraph 2 of his Budget speech the Financial Secretary says: "It will be noted that no provision is made for the cost of Malayanisation ...". Sir, I thought that Malayanisation is a very important point in the government programme. Why has it not got into the Estimates?

Read further.

Are we to believe, Sir, that there will be no Malayanisation? Are we going to believe that the speed is going to be slowed down? Of course, there was a rumour - but it was only a rumour - that $20 million was going to be spent on Malayanisation, but so long as I do not see it in the Budget, then I know that the idea is still in the formulation stage, and if it is in this stage, the Government, we know, has already shown us that it is always able to change its plans and its ideas. Let us now look at another item: no provision for the nationalisation of transport. Last year we were treated to a very good debate on transport and the Minister for Communications and Works stated that it was socialist policy to nationalise transport, but in order to do it, we must not move too quickly. Of course, there has been another change of plans and ideas by the Labour Front Coalition Government. "Yes, socialism believes in nationalisation of transport, but for us we can be slow about it, we cannot take it too seriously when it comes to practice. Let us go slow on that." This year when the Minister for Communications and Works spent some of the public's money and took a trip to the United Kingdom to study the transport system of London, that gave me a great deal of encouragement and I said, "Soon we will have a transport system comparable with the best in the world." Of course, when we have that hope, we must have figures to support that hope. So I look through the Budget Estimates from the beginning to the end, searching diligently under every head, but I find no provision for the nationalisation of transport. When, Sir, will nationalisation of transport come into being? Is there going to be a delay? I suppose it will be implemented when we -

Have you read the White Paper?

White Paper or no White Paper, Sir, the most important thing is whether it gets into this Budget. If it does not get into the Budget, it is still in the realm of ideas. It is not even going to be a bit realistic. There is another provision, Sir, which has been left out, probably after serious thought, and that is: by next year we shall have in Singapore a few District Councils and a City Council with a mayor freely elected. I put it to you, Sir, this is a step forward in our constitutional development. This is the right direction where we should go. We should first establish our local councils and then we will be able to tell the world that we can manage our own local affairs. Give us the whole of Singapore and we will be able to manage it as well. But, Sir, there is no provision in this Budget. Are we going to have our local councils or are we not? It looks as though we are not going to have our local councils. It looks as though the City Council, whose life the Government has prolonged, first, for one year -

To our regret.

- and then for two years, is now going to prolong it for another year.

To our greater regret.

We will talk about that, Sir, when we come to the debate on that Bill and then the Government can have its say. But whatever it is, I protest that there is no provision made for local government expenditures. We still have the old Rural Board. Sir, this is a case of the greatest importance and it does point out that in all probability it is because the Government is occupied with something else - what it is, I do not know, maybe something airy - and has forgotten the most important thing. I say, if this is the case, it is inefficiency. Let us look again, Sir, into another item. It is one that has been provided but insufficiently provided. I am looking through only one or two items, I am not looking through the whole lot. I just pick them out at random. Probably by scrutiny I can pick out more. I am now on education. There is a disparity in the treatment afforded to Government schools and that offered to aided schools. Where Government schools are concerned, everything is being paid for. In the case of aided schools, there is a scheme whereby it is a dollar for a dollar contribution. Here then, Sir, we have two categories of schools - Government schools and aided schools. Regarding aided schools, the parents of the students, who have already been taxed, must be further taxed by contributions to the schools, so that they can progress. As for the teaching staff, I will not say much about them and I will declare my interest, because I am a teacher myself! On the other hand, we have the Government schools where everything necessary is provided for by Government. There is a scheme of service for everybody and so they are all happy. I do not grudge that. But what I am thinking of is this: control comes from right at the top. Palmer Road controls every school. One directive from Palmer Road and all schools will obey that directive. It looks to me as if there is too much centralisation. It looks to me as if the Government schools are going to train students who will probably behave in exactly the same way if a certain external stimulus is applied; but as my hon. Friend the Minister for Communications and Works has once said, we are living in a democracy and we do not want everybody to be thinking in the same vein. Each one must have his own will. I think the time has come for Singapore to adopt an education policy which will not be too centralised, that each school should be governed by a Board of Governors - whether it is Government, or Government-aided - and all the schools are under one central organisation. I would ask the Government not to be afraid of this because we already have an example in the Federation of Malaya, and if we do that, it will be one step forward towards democracy. I thought I heard the Hon. the Chief Secretary mention just now the Chinese High School. Of course, that has been a pet subject for quite some time for many Members in this House. Some people take a great liking to it, while others do not. But let me explain to the Government, Sir - I am only trying to be helpful - the attitude of the Chinese school students, and if the Government will listen carefully to what I have to say, it will be benefited and probably we will not have any more rioting. The Government has announced that all schools will be treated alike. All Chinese schools will be given full grant in aid. Yes, Sir, that is indeed a very good step forward. That is indeed commendable; but so far as I can gather from the schools, from the students, from the teachers, and from the Press, they do not know the conditions attached to such grants in aid. I told them that the grant in aid system would be the same as for English schools, but they said that they had not been officially notified. "We just do not know what the scheme is," they told me. Will the Government not tell the Chinese people, "If you have grant in aid, these are the conditions."? Put them up in black and white and I think that will dispel their fears. That is my first comment. My second comment is on the question of salary schemes for these Chinese schools.

Order. Perhaps I should remind hon. Members that this is the Second Reading of the Appropriation Bill and the debate should be confined to the general principles of Government policy and administration as indicated by the Bill. What the hon. Member is saying perhaps could best be said when we come to the Head "Education" in the Committee of Supply.

Thank you, Mr Speaker, Sir. I thought that unless we brought up some specific points the Government might not be able to understand what we were driving at.

We do not.

It is because everytime we say something, the Government will come back at us and say, "Give us a concrete example." So in this instance I am trying to give some concrete examples. But I am glad, Sir, of your guidance and I shall romp along faster. On the matter of education, Sir, there is another missing item - that of secondary schools. We do not have enough secondary schools, and if Government is going to produce more technicians and more people who will come and help do the work that Singapore needs, then the answer lies only in the creation of more secondary schools. It will at least help the students to feel a bit safer when they are in Std. V. Finally, on education, Sir, we have a paragraph in His Excellency the Governor's Address to the effect that the Government will assist the Nanyang University. How, and in what form will it come? Is it in money? Is it in the matter of securing facilities and so on? We have not heard anything mentioned in the Estimates or in the Address. I think the public has the right to know what the attitude of the Government is on this subject. Now I come to the most important section of my queries, Sir, and that concerns the Ministry of Commerce and Industry. On page 3 of his Budget speech the Financial Secretary has treated us to the idea that the Government has thought about "the expanding economy of Singapore". On page 11 there is also a reference to Singapore being "a great communications and trading centre", with "its manufacturing activities". But, Sir, although the Government talks about the expanding economy of Singapore, yet the policy that has been adopted so far is one that is not going to make the trade and industry of this country expand but contract. The Financial Secretary, on the one hand, tries to point out to the people that the financial position of the colony is sound and that occurs a number of times - on pages 3, 7, 10 - but I will not quote them. To say it so many times I think he is trying to convince himself. I hope it is true, because anything that is true need be said only once. Then, on the other hand, he says that the future of Singapore is bleak and that we must expect more taxation, and taxation will climb up and up and up. This, I think, is contrary to the principles and the policy laid down by the Ministry of Commerce and Industry which is trying to say to foreign investors, "Do not be afraid. Come right into Singapore and you will make huge profits. The future is bright. Everything is going to be all right. We are not going to increase company tax. We are going to assist small-scale industries." In Singapore the one most important thing that has always been in my mind is that whatever Singapore manufactures cannot be competitive in the Federation. I am now made to understand that there is a tax barrier set up at Johore Bahru and that anything, whether it is manufactured in Hongkong or Great Britain or Australia or Singapore, if it ever gets through that barrier, must pay tax. And if it must pay tax, it will mean higher costs to consumers in the Federation. It will mean that manufacturing concerns will not remain in Singapore. It is natural that they will remove to Kuala Lumpur and sooner or later, Sir, what will happen? Will Singapore be a great industrial colony like Hongkong or will it be reduced to just a port of call and a communications centre? If nothing is done in this direction, then I share the opinion of the Financial Secretary that the future of Singapore will be bleak. We must create conditions that will be bright for investment. We must create stable conditions and a sense of security, and then investors will come to Singapore. It is not a matter of tax or super tax or non-resident tax that will chase people away. Sir, the Government will admit that it has invested the money of Singapore in the London market, and I have been told times without number that London is about the most heavily taxed country in the world and yet we have our money invested there, as if we must not do this and we must do that. What are required to attract investment are stable conditions, no fluctuations in the market and no rapid wage rises (because the cost of living is not rising rapidly). There must be a sense of security. If we do not have money upsets, then investors will come. There is, of course, one heartening bit of news which I must not leave out, and that is, the Government thinks that it is going to assist small-scale industries by voting the sum of $1 million. We want to know what the Government is going to do with that $1 million. How is it going to be handled? How will the people affected be benefited? Will the loans out of that sum of money be firmly controlled and yet elastic enough so that they will be paid back? For this, the plans should be made public. People will wish to know. One more comment about commerce and industry. The Government, I feel, should take the opportunity to have discussions with the Federation Government to see that goods manufactured in Singapore are not subjected to tax, and if that is not possible, then there must at least be some sort of Commonwealth preferential rate.

There is a rate.

And further to that Commonwealth preferential rate, there should be a neighbourly preferential rate, which will be much better! Then it might help. Sir, I now come along to the question of unemployment and under-employment. Nobody whether inside this House or outside will deny that there is a great deal of unemployment and under-employment, and if we have both, we are going to face a great consequences arising out of the situation. Crime is going to mount. Social benefits will be sure to mount. All this can only be prevented if the Government will think harder and do its work properly, create more industries, encourage people into putting money into this country and so on; otherwise, I am afraid, Sir, the future of Singapore will be bleak.

Have you any ideas?

We have, but we will only show you when we are in a position to put up a Budget. Sir, before I come to the end of my speech, I know that the Government will say to me (and I am anticipating it), "The Member for Serangoon says he wants no more taxation. All this taxation must be removed. But, on the other hand, he shouts at the top of his voice that we must have all the social services increased. But where do we find the money? Probably the hon. Member is talking through his hat!" But I have this to say, Sir. In the management of money, the most important thing is to cut down unnecessary expenditure. I will just mention one item - it will be good enough. There is going to be a large P.W.D. building coming up. It will cost a few million dollars, say, in the region of $7 million, and the Government is going to pay the architect 7½ per cent on that. Work that out and see how much that 7½ per cent comes to. Why cannot Government table a Bill which will lay down a sliding scale of fees for architects? If you build a house for $1,000, you get $75. But if you build a house for 1,000 times that $1,000, you should not get $75 times 1,000; and if the building is going to cost $7 million, and working it out on this percentage, I think it is a bit too much to ask people to pay. If, however, you can engage an architect to work on a salary scale of $1,000 a month flat, you will probably have him working for quite a number of years, in fact. Now after disposing of this expenditure, which is unnecessary, I will mention another item - inefficiency in gathering taxes on the old basis. I understand there are departments which say they cannot collect all the taxes they are supposed to collect. They report that such and such an area has still so many years of arrears of taxes to be collected. I am referring to the Land Office. Here we have over-expenditure and inefficiency in collecting taxes, with the result that there is a lack of money and this Assembly is being asked to approve a new taxation scheme. I say all this is not necessary, and, of course, it is ridiculous to tell me that in Singapore there are only 19,000 people who are paying tax. There must be many more. Step up the efficiency of that department and then we will come to the stage where we can manage our own affairs without unduly increasing taxes. 11.52 a.m.

Mr Speaker, Sir, in a debate which promises to be of mammoth length, I will endeavour to be brief. Although the Budget introduced by the Hon. the Financial Secretary is one of the most stringent in my experience, I personally doubt that the outlook is quite as gloomy as he suggests. The Financial Secretary in his speech said that there is always a tendency to estimate revenue conservatively, and he might well have added to over-estimate expenditure. This point has been elaborated by the Member for Serangoon who also pointed out that year after year, when it comes to the final balance, the actual position is far better than anticipated. But I think there might be a danger here of this Assembly and the public as a whole falling into the error of thinking that additional taxation is unnecessary and that Government's fiscal policy is ultra-conservative. The Member for Serangoon, for instance, did not mention that the Financial Secretary had pointed out that under-expenditure is frequently deferred expenditure and that the colony's development plans are estimated to cost $310 million over the next six years. He said that the graph of expenditure is rising in a straight line through the origin, but he omitted to mention that the graph of revenue is unfortunately rapidly levelling out. On practically every page of the Estimates we read "increase due to so and so", and it seems to me, Sir, that the chances of the word "decrease" being substituted for "increase" in future estimates are practically zero. On the other hand, the colony's position is, as the Financial Secretary has said on three occasions, sound. I would go further. I would say that a situation that reveals net liquid assets of $130 million is a most satisfactory state of affairs. I heartily welcome the changes in accounting methods described by the Hon. the Financial Secretary in his speech, especially the removal of the long-term unrealizable loans from the Assets side of the Statement of Assets and Liabilities, and the reduction of the General Revenue Balance to $70 million following the transfer of the balance of the colony's liquid resources to a reconstituted Development Fund. I think that will be regarded by all accountants and business men as a very sensible way of drawing up the colony's Statement of Assets and Liabilities. I was also greatly interested, Sir, as I presume all hon. Members were, in the Financial Secretary's remarks on the conclusions reached by Sir Sydney Caine in his assessment of the colony's future development requirements, which, financially, are of a magnitude that is truly staggering. Yet, Sir Sydney Caine considers that the funds can be raised provided that certain conditions be met. Of the four suggested means essential to the growth of Singapore, the most difficult of attainment, to my mind, Sir, is the fourth item mentioned by Sir Sydney Caine. He says: "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." No doubt, this can be done, Sir, but it certainly involves a more realistic attitude by the general public to these matters than we have hitherto seen, and their co-operation is essential if "a suitable climate and opportunities for investment and saving" are to be created. The statement by the Hon. the Minister for Commerce and Industry prior to the Financial Secretary's speech on the Appropriation Bill is particularly apposite, and what he has said has been warmly welcomed by the business community of Singapore. It is also vital, Sir, that the general public should be made to realise the necessity for saving and investment, and particularly in Government loans; and here I hope we shall see some change of heart, because only by a change of heart can this be realised. I do not think that Government can offer further financial inducements in order that the public should be attracted to investment in local loans. I should also like to mention, Sir, that when I say "the general public", I mean the general public. I do not, for instance, mean banks who, when they take up large blocks of colony loans and municipal loans at the time they are issued, are doing nothing to solve the problems of inflation. Sir, I would now like to refer to the first of Sir Sydney Caine's recommendations, namely: "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." This is indeed a formidable task and will certainly involve the belt tightening that the Financial Secretary referred to in his speech, and I am wondering if the untapped potential to which he referred is as great as has been suggested. Nevertheless - and I say this as an Independent and I am not making this a Party speech - in devising means by which revenue can be increased by $20 million in 1957, I think Government is to be congratulated. I should like, Sir, to comment briefly on some of the proposed measures for increased taxation. It would not be seemly for me to state that nobody would suffer hardship by a reduction in personal relief from $3,000 to $2,500, but I should have thought that, in view of the fact that the Financial Secretary said the average amount to be paid would be a dollar per head per mensem no one would suffer extreme hardship as has been suggested in the Press. I should really have been more interested, Sir, to find out whether, as the Financial Secretary himself suggested, the collection of such a small tax was economically justifiable. The increases in the higher bracket are rational and indeed overdue, and will not have the effect of causing those affected too much in the way of belt adjustment. In leaving company tax where it is, Government has shown, I think, a full understanding of the local situation and the need for encouragement of foreign investment. In my speech on the Appropriation Bill in this Assembly last year, I said: "...it is only natural that one should feel relieved that the Budget proposals contain no provision for increase of income tax, but that is merely a brief respite, as the Financial Secretary has been at pains to make clear." Sir, when the Member for Tanjong Pagar (Mr Lee Kuan Yew), whom I regret to see is not in the House at the moment, came to speak, he said: "...the Hon. Mr Sutherland...could not conceal his relief that he was not made to pay what was his due and fair share of the taxation of this country." Well, that is nonsense. Sir, I am happy to say that, as far as I am concerned, I am in a sufficiently low bracket as to be comparatively unaffected by the proposed increase; but then, as now, I was really talking about company tax, and I might add that the corporation that I serve pays the 42½ per cent, which the Financial Secretary mentioned, on its income in Singapore, as it is incorporated in the United Kingdom. So, therefore, there is no question that my remarks are influenced by any personal feelings of relief. Last year, too, I said in this Assembly that I saw no reason why cigarettes should have escaped increased taxation, and I personally am glad that the Government has had the courage to raise the taxes on tobacco and is able thus to anticipate an increase of revenue of $9½ million from this, in my opinion, very legitimate source of taxation. It need not be feared that the anticipated increase will not be realised. The fantastic taxes on tobacco in the United Kingdom have had absolutely no effect on the habits of smokers who usually only renounce the habit following a coronary thrombosis or a solemn warning by the doctor that they give it up or else...! I am glad, Sir, that gin too was pulled into the net. I am also on record as having expressed my views on that last year. In this connection, I would like to read one paragraph from the Financial Secretary's speech which is full of humour as well as 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 specialised. 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." Everyone knows, Sir, or should know, that whisky is an aristocrat and gin a parvenu, and if such an analogy is unacceptable to a Socialist government or to the Royal Navy, I cannot help it; but I hope that any further taxation on these two life-savers will be levied without any discrimination. The increase in driving licence fees and the additional tax on petrol are unlikely to cause any great hardship, and the raising of the stamp duty on cheques is a comparatively painless way of raising another $300,000. I was interested to hear the Member for Serangoon suggest that it did not matter to the tuan besar who sat in the back of his car, but the poor syce had to pay his $3 additional licensing fee. I should have thought that practically every tuan besar paid the licence of his syce. A ten per cent initial registration fee on all motor-cars registered for the first time in Singapore - well, Sir, that certainly does bring cars of Commonwealth registration virtually into the petroleum-liquor-tobacco class and I have no doubt it will affect the lower middle income group, but I think it is a blow which they will just be able to stand. Sir, in conclusion, I would say that, in my opinion, this is a good Budget. Certainly it follows the principle, as far as direct taxation is concerned, of putting the burden on the shoulders of those best able to bear it. It is, in fact, in the best colonial tradition; by that I mean something the reverse of derogatory. I mean that it is farsighted, sympathetic, fairminded and shows due regard for the sound principles of finance. Only on that basis, Sir, can we build a solid house of state, whatever flag it may fly on its flagstaff. 12.10 p.m.

If it please you, Sir, I find myself in the extraordinary position of being compelled to agree to a large extent with the hon. Member who has just sat down. I would like to say that I consider today to be a good day for democracy and for socialist principles. I think the Government may well be congratulated, Sir, on the courage, wisdom and the spirit of democracy which it has shown in listening to the reasonable appeal of the people of Singapore and restoring the personal allowance on income tax and the duty on locally manufactured cigarettes, both of which hit the small man, in their original form. Sir, there has been a suggestion that the Government conceded these two matters because of a threat to its existence arising from a split in the Labour Front. I should like to say that this is a complete and malicious falsehood The Labour Front, through its Central Committee and the secretaries of the branches at special meetings convened, made it clear to the Government that if the Government could not make concessions because of the need for co-operation with the Federation, the Labour Front, both in the Assembly and outside the Assembly, would continue to give its unswerving loyalty to the Government. Sir, the Labour Front believe in the need for cooperation with the Federation on economic matters, and co-operation does not mean getting our own way all the time. It means give and take; and if sometimes the people of Singapore have to sacrifice their own way in order to maintain the spirit of co-operation with the Federation, we of the Labour Front believe that the people of Singapore will accept such sacrifice with good grace. I would add, Sir, that we are today happy that such sacrifice is not necessary for the small income groups who would have been affected. We are happy to note the close personal relationship of friendship and mutual respect between the Chief Minister and the Chief Minister of the Federation which is contributing to the mutual welfare of both territories. We say to the Chief Minister, "Well done! By these concessions which you have made in co-operation with the Federation, you have been able to meet the wishes of the people and have infused new life in our concept of democracy." Sir, on the question of family allowance on income tax, the leader of the Liberal-Socialists made much of the Asian approach as though that were his personal baby and his exclusive property. The Labour Front has always solidly stood behind the general wish of the people of Singapore that the approach to personal allowance on income tax should be an Asian approach and not a European approach. But surely, Sir, the House must by now be conscious of the manifold submerged difficulties in the way of income tax modifications, and I do say, Sir, that we should be fair to the Government and give it the time necessary to meet these difficulties in its honest efforts to meet the wishes of the people of Singapore. Sir, as one who expects to be affected, I welcome the increased tax on higher incomes, and I say this, Sir: there is plenty of room for expansion in respect of taxation on excessive incomes. On the question of company tax, I have studied the reasons given by the Financial Secretary and I must say I am not satisfied. I concede, Sir, that special inducement must be given to foreign capital in order to encourage its activity in this territory; but only foreign capital should be encouraged which is making a reasonable profit. When foreign capital skins our people and when foreign capital makes excessive profits, then that is no longer a healthy contribution to our economic life. Tomorrow, Sir, I hope to receive from the Financial Secretary information in answer to a question on the Order Paper as to the number of companies which are making more than ten per cent profit on their capital, and I think this House will be in for a real shock. I say to the Financial Secretary, as a citizen, I regret that he has not seen fit to indicate to us the results of his researches on the possibility of an excess profits tax, and I do urge the Government to consider the introduction of an excess profits tax at an early date. I welcome the tax on motor vehicles. It is a step in the right direction, although I must confess I find myself in considerable sympathy with the Member for Serangoon when he says, "How about higher taxes for more expensive cars?" I am quite sure the Financial Secretary will welcome that suggestion and that it will have the consideration it merits. I would like to say, Sir, that apart from the question of revenue and the socialist principles affecting this tax, if the Income Tax Department is not adequate for its responsibilities in obtaining payments of income tax due, then this tax at least will, in indirect fashion, get some of the money of which this country is being cheated. I welcome the tax for one special reason, Sir. It can have a salutary effect if the buyer is made to pay this ten per cent tax on landed cost direct to the Treasury. He will then know how little his car costs and how much profit the motor-car monopoly is making. I ask the Government to make stringent regulations for payment of this tax by the buyer and by no other person. I think the defenceless people of Singapore should know the extent to which they are being skinned by this car combine. There is one other point about this tax to which I think I would like to draw the attention of the House. The Government quite rightly exclude omnibuses from the tax, because they are a public service. I do not know whether taxis were unintentionally omitted, but it seems to me, Sir, that taxis are a public service and, in so far as my information goes, taxi owners are neither rich nor do they make excessive profits, and I would ask the Government to consider excluding taxis and cars which are intended to be used as taxis for a period exceeding three years. Sir, I would like to say that I warmly welcome the action of the Government in leaving the tax on locally manufactured cigarettes untouched. I believe the Member for Serangoon must have either ignored the Government Gazette which indicated that the Government had reduced or had waived its intended increase of taxation on that item, or else perhaps he does not quite follow the language of Government Gazettes. I would not blame him. Sir, the position now truly is this: the Financial Secretary, in moving the Second Reading, said that those who cannot afford the cigarettes can smoke cheaper cigarettes. As the proposal originally stood, there were no cheaper cigarettes. The prices of all cigarettes were increased, but today the locally manufactured cigarettes remain at the same price as before and they will be far cheaper than the imported cigarettes. Therefore, the poor man and the lower income group can continue to enjoy the friendliness of tobacco without having to make any sacrifices and, in addition, Sir, we are giving a real direct impetus to local industry. I welcome the increase of tax on imported cigarettes and pipe tobacco. Those who will not support local industries, Sir, should be made to pay more for their imported cigarettes. The additional tax on petrol has been made much of by the Member for Serangoon. It is his duty as leader of the majority Party of the Opposition to labour himself in seeking to find grounds of discontent and he finds them in the tax on petrol. Sir, that tax should not harm anybody at all. I say "should not", but, in fact, I agree with the Member for Serangoon that in one instance of which I have heard, it has been made the excuse by unscrupulous capital to exploit the poor. I understand that the owners of lorries which carry vegetables to market have increased their charges from 30 cents a picul to 40 cents a picul. Sir, a lorry, I am told, carries 96 piculs on two voyages for one gallon. So they receive $9.60 extra for every seven cents they pay the Government. And they blame the Government! On the expenditure side, Sir, I am not at all satisfied or happy about the expenditure on defence services. I welcome the expenditure on the local forces. I would like to hear when our first battalion will be operative. I would also like to know whether there is being prepared a plan for a second battalion. But I would like to draw the attention of this House to that extraordinarily expensive toy, the Royal Malayan Navy. It has been freely admitted, Sir, that this organisation is in no way related to or utilised for the welfare of Singapore and it is costing a fantastic packet. I had hoped, Sir, that the Financial Secretary would have taken advantage of the question which I put to him, and indicated the policy of Government for the next five years in connection with these very expensive items on our income. I shall raise the matter again under the appropriate heading in the Committee of Supply and I trust that the Chief Secretary will be in a position to give us a satisfactory understanding of this expenditure to which we are committed of $15 million, allegedly for four mine-sweepers, and more than $4 million annually recurrent expenditure on the Royal Malayan Navy. Sir, now I come to the Legal Aid and Advice Ordinance. Let me say, as a citizen and a Member of this House, how deeply I regret to see that there is no provision whatsoever for the implementation of the Legal Aid and Advice Ordinance which has been the law of this country for five and a half months. It is right that the people of this country should obey the law. It is also the duty of the Government to apply the law. The Legal Aid and Advice Ordinance is a truly socialist measure, welcomed on all sides in this, at that time, not so very friendly House. There was not one dissenting voice. It was welcomed by the entire population. It was moved by the Hon. the Minister for Labour and Welfare (Mr Lim Yew Hock), and, in moving it, he quoted that cynical remark -"The Courts of law, like the Ritz Hotel, are open to the rich and poor alike!" Where is the change? Has there been any change that in these five and a half months nothing but a desultory conversation or two have taken place to apply the law of this country, approved fully by this House and by the people? The bogey of the Bar Committee has been put up. I say "bogey", Sir, because I do not think it is fair to the Bar Committee to suggest that it seeks to obstruct the implementation of this very necessary measure for the welfare of the people of Singapore. What the Bar Committee is interested in are regulations in respect of the relation of members of the Bar to the department when they are employed. But the Bar Committee has never said, "You cannot establish a Department of Legal Aid and Advice. You must not appoint a Director. You must not appoint an Assistant Director. You must not have an office." I am deeply perturbed by the seeming loss of interest of the Government in this very necessary measure for the welfare of the people of Singapore and I shall revert to it under its appropriate heading in the Committee of Supply. I also must say, Sir, that I note with regret the lack of provision for a dynamic approach to the problem of enhancing the economic position of the Malays in this territory, and the absence of provision for acquiring kampongs and providing for their rehabilitation. A great deal of good can be done in that direction at far less cost than four useless toy minesweepers. Sir, there is one other subject on which I would like to touch. I do it with some diffidence. It is the question of a change in accountancy methods proposed by the Financial Secretary and enthusiastically supported by a banker of some experience. I therefore tread with some diffidence in this territory, and I admit quite frankly that all that I know of accountancy I learned in the Singapore Y.M.C.A. School of Commerce! But I must say, Sir, that it goes contrary to the concepts of honest book-keeping that we should spirit away mortgages from the balance sheet, that we should treat loans with security, loans on building, loans on land, as current expenditure. Sir, all of us not only in this House but outside it have the highest respect for the absolute integrity of the Financial Secretary, but I would ask whether, in fact, there is any real need for it. He suggests that it is necessary in the name of tidiness. Sir, I do not care how untidy it is if I can see my money. I would rather not see it spirited away. Sir, if the Financial Secretary wants to play the magician, I would ask him to produce rabbits out of his hat and not make our money disappear through his hat! I do like to see where my money is, and if it is necessary to separate liquid from illiquid assets, Sir, let us authorise him to put, in inch-high letters, the word "Illiquid" on the assets side of the balance sheet; but do not spirit away our loans which are valuable, which can be transferred and sold, which have monetary value. Do not let us hide them in some corner of these highly complicated accounts which really, let us confess, very few of us can understand. Sir, my attitude toward all this is merely a feeling of discomfort, but if it is really considered necessary, I will go along with it; but I would plead that in that event, at the bottom of the balance sheet, away in a corner if necessary, we should have a note that we have illiquid assets of $126 million - and it is not a sum to be sneezed at. Sir, in conclusion, I would like to join Mr Sutherland - for once! - in congratulating the Government in all sincerity on a Budget which today is in a form of which we can be proud.

I think this is an appropriate time to suspend. I shall take the Chair again at half-past two. Sitting accordingly suspended at 12.28 p.m. until 2.30 p.m. Sitting resumed at 2.30 p.m.

Mr Speaker, Sir, as there are still many Members who wish to participate in the debate, may I have your assent and the consent of this House to move a motion to exempt the business for today from the provisions of Standing Orders 7 and 69(2) ?

Have I the assent of hon. Members? Hon. Members: Aye.

Mr Speaker, Sir, I move, That the proceedings on the Second Reading of the Appropriation Bill be exempted from the provisions of Standing Orders 7 and 69 (2) .

Question put, and agreed to. Resolved, That the proceedings on the Second Reading of the Appropriation Bill be exempted from the provisions of Standing Orders 7 and 69 (2).

Debate on the motion for Second Reading resumed. 2.32 p.m.

Mr Speaker, Sir, it appears to me that the Labour Front Coalition Government is slowly being absorbed by the colonialism they set out to conquer about a year and a half ago. The Government is ostensibly a Socialist Government. We heard a great deal of Socialism during those happy days when the gentlemen opposite were wooing the voters but that was a long time ago, Sir. Since then, they have been successfully brainwashed by their colonial backseat drivers. This Budget, Sir, is proof that the Labour Front has been purged of all Socialist deviations. Not only is this Budget purged of every tinge of Socialism but it is utterly shameless in its concern for great business and colonial interests. With the Labour Front Government as a front, the colonial backseat drivers had tried to soak the poor while leaving the rich untouched. I said "tried", Sir, because since the announcements of the Budget, there has been some panicky back- tracking. It may be because the Labour Front Coalition Government was particularly impressed by the Liberal-Socialists. Even the Liberal- Socialists, Sir, felt that the Budget was an attempt to balance the budget at the expense of the lower income workers. Surely the Government could have told the backseat drivers to produce a Budget which looked like a Socialist Budget.

Who were the backseat drivers?

Ask yourself. The fact that the blunder over the lower income groups has been put right does not make this Budget any better. In fact, the protests over the injustice done to the low wage earner have only drawn attention to the fact that this is still a Budget designed to aid and comfort big business and colonial interests. This is certainly not a Budget expected of a Party which claims to be Socialist, Nationalist or champion of the Welfare State. The only kind of welfare that this Budget will further is capitalist welfare and, in particular, the foreign capitalists. The Budget was designed to meet a specific problem and that was the $37 million deficit expected in 1957. This deficit was to be met by the increase in income tax by lowering the basic personal allowance which would have hit hard the lower income group but the higher income group was let off very lightly, indeed so lightly that even the Liberal-Socialists felt happy and jubilant enough to take up the cudgels on behalf of the poor wage earner. For a Socialist Government, Sir, - and I hope I am not unduly embarrassing the Government by assuming that it still believes in its election pledges - taxation is one way of bringing about greater equality of income and Malaya is a country where inequality of income prevails. This was the necessary outcome of a colonial economy. There has been no proper survey of distribution of income but a survey of urban incomes and housing made not so long ago suggests that the gap between the rich and poor is considerable. A colonial government could, of course, afford to maintain this inequality. People do not expect anything better of a colonial government but people do expect something better of the Labour Front Coalition Government. An even more glaring instance of partiality to vested interests in the Budget was that company tax was left untouched. This leniency came as a pleasant surprise to the big companies who had been expecting increased rates. A few days before the tax rates were disclosed, the Straits Times in its editorial of November 6 speculated on how the $37 million deficit would be met. It reads: "The two Malayan Governments are agreed that income tax rates should be raised, and it must be assumed that the company rate will be increased as well as the top brackets of individual income tax." The Straits Times is no Socialist paper. It assumed that the Labour Front Coalition Government was Socialist. The Straits Times was wrong for once. The other point to be considered is how the money obtained by taxation is going to be spent. Government can spend its money on expanding welfare services like education, hospitals, and so on, or by lavish expenditure on itself. One reason why people are resentful of taxation is because they are convinced that most of the money goes on conspicuous consumption by the bureaucracy. They read about sumptuous houses for senior members of the bureaucracy; they read about expatriation allowances; they read about the $5 million Polytechnic suddenly costing $11,500,000. When the Government builds schools or hospitals, the cost of buildings suggests that they are made not of bricks but of marble. Is it any surprise that our bureaucracy is one of the most expensive in relation to our income? In fact, the ordinary man is keenly aware that he gets relatively little from the Government by way of services in return for the large sum of money he spends on the upkeep of the bureaucracy on emoluments, expatriation pay and travelling allowances. That was to be expected of a colonial government whose main function was to have just a Government to make this country a profitable dollar earner. An alien bureaucracy saw no harm in making it an expensive bureaucracy as well but that is not good enough for an elected government which must set its standards of living in relation to economic conditions here. This Budget, unfortunately, is no different from the colonial Budget of the past. It keeps the bureaucracy happy; it keeps the colonial investors happy. It is also based on the assumption that this country must be firmly tied to the apron string of colonialism and that it can, for the time being, forget all about Socialist principles. 2.38 p.m.

Mr Speaker, Sir, in supporting the Member for Serangoon (Mr Lim Choon Mong) that year in and year out we are faced with a Budget of imaginative figures showing a deficit, I will draw hon. Members' attention to pages 9 and 13 of the Draft Estimates. On page 9 is the summary of revenue collected from 1946 to 1955 and on page 13 is the summary of expenditure incurred from 1946 to 1955. Comparing the figures on these two sheets, I find that every year there is a surplus instead of a deficit with the exception of 1954. That is why I say that these are really imaginative figures - just pure figures and no facts at all. Last year, we were presented with a deficit of $15.2 million in the Budget and it was really surprising to hear from the Hon. the Financial Secretary in his speech that we are expecting on actual working figures a surplus of between $2 million and $3 million. Is it not contradictory to present a Budget with a deficit of $15.2 million when, instead of that actual deficit, there will be a surplus of $2 million to $3 million? We are again given a Budget with a deficit of $37 million and with revotes it amounts to about $39 million. I will quote, Sir, what the Hon. the Financial Secretary had to say about this deficit on page 5 of his speech: "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, ever' 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." From what I make out of these paragraphs, it would appear that there is going to be a surplus again for 1957. Then why, Sir, put us in a position so that we will have to approve a deficit Budget every year? Is this an excuse for the Government that there is no alternative but to increase taxation in order to cover this deficit? If not, then why not be more realistic and tell us the actual figures of the Budget? We are placed in such a position year after year by the Government telling us that the Government is on the verge of bankruptcy and that unless we find some ways and means to find the money we may have to go bankrupt. I think that if we are faced year after year with a deficit figure which shows the sorrowful state or affairs of this island, there is no use for us sitting here to approve Budgets unless the picture is put clearly before us. I would have expected that the Labour Front Coalition Government would give us actual facts rather than mislead us. By misleading us, we get nowhere. Now apart from these imaginative figures, there are also indications of extravagance in the Budget. I would refer to page 33 of the Draft Estimates under Head 2, item 10 (1) "City Services". You will find that the cost of City Services for Criminal District and Magistrates' Courts is $27,600 as compared to $3,600 for this year. As I go down I find that the reason given is "Increase due to air-conditioning of the Courts". The increase of $24,000 a year works out to $2,000 a month for electricity alone and I wonder how the Hon. the Financial Secretary got this figure. I am sure that the eight Courts will not be able to consume about 12,000 units a month, which is a substantial figure. The maximum that I could get is 1,000 or 2,000 units a month but I wonder how he got the figure of 12,000 units. I would refer next to page 53 of the Draft Estimates under Head 8, item 12 "Telephones". $12,000 is provided for the Chief Secretary's Ministry for telephones alone! This $12,000 is only for his office and not the departments under his control. Each of the departments under his control has a separate vote for such expenditure and this $12,000 is only for the Empress Place building. I wonder how many of the officers have direct lines there! I will give you figures, Sir. All the telephones provided to 24 departments under his Ministry amount to $179,820. Over $100,000 just for telephones for a Ministry! You can imagine what will be the figure for nine Ministries! Apart from this imaginative Budget, it looks to me that this Assembly is becoming a charitable society. We are providing grant after grant to all charitable organisations and in quoting this, Sir, I must say that I am not actually against contributing money to the charitable organisation which benefit the public at large but I am against the principle of converting this Assembly into a benevolent organisation. I will give you figures for this, Sir: Grant to Automobile Association of Singapore $ 5,000 Grant to Singapore Safety First Council $10,000

Not enough!

Not enough, maybe. After-Care Association $10,000 Ah hon. Member: Excellent sum!

Boy Scouts' Association $ 4,280

Not enough!

I hope so. Girl Guides Movement in Singapore $ 2,000 Girls' Life Brigade $ 1,400 Not enough again, I suppose! Little Sisters of the Poor $ 4,800 A very small amount! That is not enough! School for the Deaf $ 6,000 I think that is not enough because we have many deaf people here and we must provide more money! Singapore Anti-Tuberculosis Association $200,000 Singapore Children`s Society $ 15,000 Singapore Youth Council $ 15,000 Voluntary Institutions for Children $350,000 United Nations International Children's Emergency Fund $ 20,000 Grant to Young Women's Christian Association $125,000 I wonder what that is for! Are we going to grant money to such organisations? I am not against all of them. The Member for Cairnhill (Mr Marshall) said "Not enough!" I agree that it is not enough for some of them but look at "Grant to Young Women's Christian Association, $125,000". Why forget the Young Men's Christian Association and why give it to the women only? It is surprising that no Member of this Assembly is a woman and, although all the Members here belong to the male sex, we are not providing money for the Young Men's Christian Association! And again there is the Chinese Christian Young Men's Association. If they come to us, are we going to grant them such funds, Sir? I think we have to be more careful about all this money, and the total for all these grants is $768,480 - just for Charitable Allowances alone, Sir! This figure I have mentioned does not include family planning at all because it comes under "Treasury" and is a different grant. So apart from this figure, you will realise that there are grants for other organisations. Now we come to the question of taxation, Sir. As a matter of fact, taxation may be good for the State but we must at times think of the poor. On the question of income tax, I am very glad that the Government has realised its folly and is going to withdraw the reduction of the $500 personal relief. But I am not at all happy about that yet because the percentage of income tax that is going to be levied on the poorer classes is to be increased. Why not increase on the higher level rather than on the lower level? The Member for Cairnhill said this morning that the Labour Front Coalition Government is fully aware that income tax is to be framed on the Asian way of life. I am rather surprised that the present Ordinance is framed or copied from the Western way of life. It is entirely different: how an Asian lives and how a Westerner lives. In the Western way of life, as soon as a son gets married, the relationship with his parents is just cut off. He goes on his own -

Nonsense!

- and has a separate family. He is not considered a member of the family of the father. He is considered a separate family by himself and he has no more relations with nor responsibilities to the parents who have brought him up to the age to get married. But in the Asian way of life, Sir, we look after our parents far more than our wives. To a Westerner, a wife comes first. Everywhere the wife goes, the husband must follow and respect her wishes and parents are ignored, but to an Asian, Sir, the parents come first, the wife comes second, and then the children. Unless you have your parents, you will not be existing in this world. So you must help your parents. The Income Tax Ordinance should be framed in such a way as to suit the Asian way of life. Now if you have parents who cannot earn money or make a living, and apart from aged parents, you have your younger brothers and sisters who are dependent on their parents, who is then to support them? Is it not your responsibility as a son as well as a brother to the other members of the family to support the whole family? On the question of the reduction of $500 from the personal relief, as it stands today, the allowance of $3,000 is inadequate to meet the cost of living of a worker. The $3,000 provided as relief is insufficient for a worker to exist, and to reduce the $3,000 to $2,500 is really cutting his throat. I would have expected that the Labour Front Coalition Government, as Labourites or Socialists who care more for the workers, would have increased that amount to $5,000 because, unless you have a relief of $5,000, it is impossible to live. In the case of a married person, add another $3,000 as relief, making $8,000 relief. It was fortunate that the Hon. the Chief Minister went to Kuala Lumpur and got the Chief Minister of the Federation to have this withdrawn, or else I am afraid the workers will never be able to exist at all, and only the Ministers will live then. Another point I heard this morning is from one of the Ministers on the Government Benches, that workers should not possess cars or cannot afford to have cars. I wonder why? Is it that Ministers only can have motor cars -

They say that they are working.

- and workers cannot have motor cars? Is it in the difference of cars that we possess? A Minister can have a $20,000 car, but for a worker, I think he can have a $2,000 or $3,000 motor car - a small car - and the car itself is not a luxury. Every time the question of a car comes up, it is said, "Oh, it is a luxury. A worker should not have it." But, Mr Speaker, Sir, does the Chief Minister realise that owning a car is more economical than travelling in public transport? Just take an instance, Sir: an ordinary worker may have to travel 20 miles a day, and if he is to travel those 20 miles by taxi, which costs 40 cents per mile, it will come to $8 a day. Can a worker afford $8 a day for transport alone? But if he has a small car with a consumption of 50 miles a gallon, as the Member for Serangoon (Mr Lim Choon Mong) said, it will cost him less than a dollar, which is ten per cent of the actual expenditure on transport. Is it not a necessity? He has to go to work, he has to come home from work, he has to send his children to school, he has to send his wife to the market - and all those 20 miles just for ten per cent of the actual money that he has got to spend on public transport. Why should the workers not have cars? It is absurd! I am sure that quite a number of the Members on the opposite Benches were workers before. Today they are Ministers and Assistant Ministers. Oh, then they can have a car! But some of them were workers before and they had cars before they came into this Assembly House. Why did they have cars then? Why not follow the principle of having no cars at all? I hope, Sir, that the Government will realise this. On the question of cigarettes, smoking is not a vice nor is it a luxury. It is a habit. I would say that it is a necessity as well as a habit, and because it is a habit, you cannot get out of it. As a necessity then, you must have it, but as a habit it is just as bad because it is essential. You must smoke. As a non-smoker myself, I do not care if the Government increases the tax on cigarettes, but what about the people who smoke? It is not just because I do not smoke that I will not bother about the increase of tax on cigarettes. A few cents on cigarettes, a few cents on petrol, a few cents on this and a few cents on that a day will not make a few cents. It will amount to a few dollars and apart from those few dollars, the Government is going to tax again on those few dollars. How can a worker exist? It is impossible. I really hope that the Government will be more careful in presenting the Budget figures and in proposing to increase taxation. I would not say that I am against all taxation, but I say, "Be more reasonable and realistic." 2.54 p.m.

Mr Speaker, Sir, in considering the Estimates for 1957 and the Government's taxation policy, one must be guided by a certain number of basic criteria. First of all, nothing must be done to endanger the position of Singapore as one of the greatest trade and communication centres in the world because, if we lose that position, we condemn ourselves to a slow and painful death. Secondly, the standards of administration must be maintained at the highest pitch of efficiency because, unless the services provided by the Government departments in charge of trade and communications are of the best standard, commercial concerns and the world's travellers will go elsewhere. Thirdly, Singapore must engender an atmosphere of confidence and stability which has, in fact, been considerably shaken during the last 18 months. Fourthly, if extra taxation is to be justified, it must be applied to productive ends which create employment as well as to finance social services and, fifthly, taxation which encourages the inflationary spiral of wages chasing prices and which reduces the purchasing power of people defeats its own ends. Lastly, and here I come back to the first point because of the need for maintaining Singapore's position as a trade and communication centre, a much closer understanding and relationship must be cultivated with the Federation Government, and I congratulate the Hon. the Chief Minister on what he has done in recent weeks in this respect. How far then do the Estimates and the proposed increased taxes square with the criteria which I have mentioned? Let me first turn to the Luxury Tax Bill which has been laid before this House. This, at first sight, seems to be a reckless plunge by the Government into a new taxation policy which may well be disastrous for this country. Any taxation which destroys or endangers Singapore's status as a free port and further weakens our entrepot position will be suicidal and I am by no means convinced that this Bill will avert this danger. Sir, I do not wish to go into great details on this Bill today in view of the fact that it can be debated on the Second Reading tomorrow. Sir, we welcome the Government's second thoughts on Personal Allowances. It is true that this wise decision means that several thousand people will now escape this income tax, and it is also true that all income tax payers will benefit to a greater or lesser degree, but what must not be forgotten is that the rate at the bottom of the scale is still to be raised from 3 per cent to 5 per cent and this will mean hardship for an unfortunate minority. We have just emerged from a period of strikes for better conditions, of negotiations between employer and employee for higher wages, of legislation laying down a better deal for the working man, and shortly the clerks and shop assistants, and now the Government has been on the point of stepping in and saying, "We are entitled to a share of what you have won." Could anything be better calculated to upset confidence and to make the task of responsible trade union leaders more difficult? The Labour Front in its manifesto promised the people of this country the right to economic security including State support for the aged, sick and unemployed. They have not so far provided that support in their one and a half years in office, and I do not altogether blame them for that, but what we are not still happy about is the increase in tax on this lower income group, that is to say, on those who are carrying proportionately the largest burden in making contributions from their own small salaries to their aged, sick and unemployed relatives. Not only is there no relief for those under obligation by long custom to assist their parents but there is an increase in the rate. In view of the changes which have been made which we naturally welcome, we ask this Government to let us know the following figures during the course of this debate: firstly, the expected decrease in revenue resulting from the decision to leave the Personal Allowances unchanged and, secondly, the expected increase in revenue to be derived from raising the rate from three to five per cent in the new circumstances. I doubt very much whether the latter is really worth collecting. Sir, what has surprised me is the fact that the estimate of revenue from income tax in 1957 is exactly the same as in 1956, namely, $65 million, leaving aside the $4 or $5 million which it is hoped to raise through the new increases. Now the House will remember that in March of this year, we gave the Government very wide powers so that "the battle against tax evaders could be effectively waged", to use the Hon. the Financial Secretary's own words. The Member for Cairnhill (Mr Marshall), speaking in full responsibility as the Chief Minister at that time, said: "I think it is generally recognised that the country is not getting even 50 per cent of the income tax to which it is entitled." He went on to say: "...we have added to our staff three experts from the British Board of Inland Revenue in the detection of evaders. They are there now and they are set for this campaign to get back some of the dreadful loss which we have suffered....". Sir, if these three gentlemen had been set for their campaign after being armed with new powers approved by this House, then we would expect results by 1957. We do not expect them to recover the 50 per cent which the hon. Member said existed but we would expect them to increase the income tax returns by an appreciable extent. Sir, I consider that the Hon. the Financial Secretary owes us a very full explanation as to why the wide powers given to the Government had not been justified by results. A further point about income tax is this. About $2,300,000 was the amount of tax realised in 1955 from roughly 1,800 non-resident individuals. On what is this tax assessed? Is it assessed only on dividends paid by limited companies or does it include income from rents and, more important still, from dividends from private companies or partnerships? I should like to know whether we are collecting all that we should from non-resident individuals who are taking money from this country and putting nothing back into it. Sir, the imposition of the tax on the registration of cars as far as a small car is concerned does not have our support. If the Government had taken active and energetic steps to re-organise the public transport system for efficient islandwide services, such a tax could be understood. But the only thing that the Government has done towards carrying out its election promises is to set up a Bus Licensing Authority which spends its time turning down bus routes and thus encouraging the pirate taxi or expecting people to walk. I have no objection to the expensive car being taxed and taxed even more heavily than is proposed. There seems to be no justification for large limousines which take up far too much space on our crowded roads and in the public car parks, and which are not really necessary for getting about from place to place in the limited mileage of this island, but I have every objection to putting a small inexpensive car even a dollar further out of the reach of a man who wants to buy it. Such a car has become a necessary precaution for the family man when the public transport system is inefficient and when it breaks down through strikes unexpectedly two or three times a year. It is not merely a matter of getting oneself to work but of getting one's children to school and a small cheap car is the most economical way of doing this. This would also help the taxi-driver of whom the Member for Cairnhill made mention. Now, Sir, I am well aware that the retort from the hon. Members opposite will be that you cannot have social services unless you pay for them and to pay for them, you must get more money from taxation. But you can also get the money you want by economies in expenditure and by more efficiency in the collection of revenue and I would like in this respect to make a few practical suggestions. I have already referred to the failure of the Government to combat tax evasion and I now refer to what I can only call the scandal of the failure of the Land Office to collect rents on Government properties and of the failure of the Rural Board to collect rates. With your permission, Sir, let me quote from the Report of the Director of Audit for the year 1955, paragraph 22 (iii) : "Class IV: Rents on Government Property.- Arrears of Quit Rents amounted to $116,174 at 31st December, 1955, and arrears of Rents for Reverted Houses to $104,623. Both these amounts are somewhat greater than the amounts at the end of the previous year...". Now, it might be thought that these are arrears which can be collected in due course but I beg to doubt it. Paragraph 20 on the same subject reads as follows: "...None of the control accounts could be balanced at 31st December, 1955, and a recent audit examination of the records was abandoned owing to difficulty in tracing the entries...". Turning to paragraph 22 (v) headed "Rural Board Revenue", we read this cryptic entry: "As in previous years no return has been rendered to show the arrears of rates which are known to be considerable..." Here is obviously a considerable loss in the Rural Board revenue and an unknown loss which by implication amounts to hundreds of thousands of dollars. Had the revenue been properly collected, the Government would have been able to reduce the grant to the Rural Board. As far as extravagance is concerned, Sir, I will content myself with a few major items. The first is the Paya Lebar Terminal Building which is estimated to cost no less than $7,150,000. Now while I agree that a first-class building is necessary if Singapore is to develop as a great air centre and while I agree that the present Terminal Building is not ideal, this does seem to me planning on far too grandiose a scale. I believe that the plans include the building of a hotel. Why spend public money and the P.W.D.'s time on a project that could be undertaken by private enterprise, and is the Government, in any case, so sure that Singapore will remain a night-stopping place with the faster air services of the future? It seems to me that this figure of over $7 million needs considerable explanation and examination. Another large item is for the new District Hospital regarding which we fail to understand Government's policy. Last year, we queried the figure of $3,200,000 for this hospital. We were assured that there was no extravagance. This year, we are asked to approve the figure of $6,500,000 for the same hospital. Quite apart from the doubling of the estimate, the Ministry has delayed a year in under-taking this project. Prices of steel and other building materials have now gone up by 15 to 20 per cent and the delay has cost the taxpayer hundreds of thousands of dollars. Why has the figure of $3,200,000 which was adequate a year ago become inadequate today? If you must spend $6½ million, why not build two hospitals in two places and serve more people? The third large item, Sir, is $5 million to be spent on new Government Offices. What is it all for? Does this not imply another vast increase in the cost of administration? We are being asked to approve the commencement of work on three projects amounting to nearly $20 million. Unless we are given satisfactory explanations regarding the need for this expenditure and the manner in which the estimates were made, we have every right not merely to vote against these items individually but to vote against this Bill. I must now turn to another aspect of Government policy. Millions of dollars are to be spent on our education and health services. We do not grudge this if the money is spent carefully and wisely and every dollar is accounted for, but much of this money will nevertheless be wasted if, having produced well-educated and healthy citizens, we cannot provide them with employment. Money must also be provided for productive purposes. While I am glad to see that extra money is being given to our veterinary services to expand, which will assist in the development of local pig and poultry industries, I deplore the fact that there is little money being allotted to fisheries. The Government spends less than $700,000 a year on the Department of Fisheries and no fund whatever has been allotted in the Development Estimates to this most important industry. I shall have more to say on this in the Committee of Supply. I wish now to refer to the progress to be made in the establishment of our new Singapore Battalion. The Member for Cairnhill (Mr Marshall) told this House last April when he was still Chief Minister: "There is now a concerted effort being made to produce an operational battalion by April 1957. I am told that it can be done." I regret to say, Sir, that, at that time, I was sceptical as to whether it could be done but now I am sceptical as to whether the Government intends to do it even by the end of 1957. The only items of expenditure on the Singapore Battalion as I can find in the Estimate are $1 million for pay and allowance, 1 million for equipment and $½ million for administration. I do not believe that you can equip and train an officer and pay a battalion of 800 men on $2 million and I should like to know what the policy of the Government is in this matter. What is absolutely clear is that there has been no concerted effort and that there has been a change in policy since the Marshall Government was in power. In any case, it is clear from the recent riots, and as I pointed out in this House last April, that on battalion is not enough if we are to look after our own internal security. Another point: I have searched the Estimates in vain for details of the Central Provident Fund account in which sums amounting to millions per month must be accumulated. How are these millions invested? What returns are being obtained on their investment and to what use are they being put to improve our financial position? I hope the Hon. the Financial Secretary will explain how these funds are invested and the Government's intentions for the utilisation of these funds. To sum up, I must return to the Government's taxation policy. It is an old axiom but a very true one that it is better to sell two articles at 75 cents each than one article at a dollar. It is all the more true of the small close community of traders which comprises this island of Singapore. We live or die by trade: not only the entrepot trade with our neighbours, but also the trade which we practise on ourselves. If we are to live and prosper, we must not forget that axiom. We must increase the purchasing power of the people; we must sell more goods more cheaply. The greater the flow of trade, not only the more revenue will flow into the Government coffers but the higher will be the general standard of living and the less money will be used for social services because the lower income groups will be able, to some extent, to look after themselves. While I am prepared to agree that income tax could be raised still further than is contemplated on the highest income brackets without undue hardship to the individual, nevertheless, the proper principle is not so much to attempt to bring the rich man down to the level of the poor man as to raise the income and standard of living of the poor closer to that of the rich. In other words, in a community solely dependent on trade, we must level up and not level down. That is the policy of expansion by which we can survive. The financial and economic policy of the Government tends in the other direction even if their second thoughts have, to some extent, redeemed them but it will lower the standard of living, decrease the purchasing power of the people, reduce sales of goods and increase the need for social services. That is a policy of contraction which can lead us to ruin. The industrial and commercial position of this country has none backward in the last 18 months, not forward, and this Budget his done insufficient to reverse this movement. The Hon. the Financial Secretary has stated that the future is somewhat bleak. It is his financial policy which makes it so and it is because we believe in a policy of expansion and not of contraction that we regard this Bill with misgivings. 3.15 p.m.

Mr Speaker, Sir, it is said that coming events cast their shadows before and if we continue to spend more than 12 times more than we earn, financial bankruptcy and ruin will soon be staring us in the face. What has this Government done to stop their prodigality in public expenditure? Sir, I am surprised to know that more than two-thirds of public expenditure consist of personal emoluments and yet we are being asked to create another 1,727 posts for next year. Is this not utterly crazy? It is well-known, Sir, that in preparing their Budgets, Financial Secretaries who are members of the Colonial Service are wont to enter in provision for services which the existing capacity of Government departments simply cannot provide. Is this Budget which is claimed to be presented by an elected Government any different? While this Government has been in power, expenditure has been estimated to increase from $197 million to $254 million and revenue from $208 million to $217 million. Is prodigality the service which the elected Government gives to the people of Singapore? Sir, it is claimed that the people of Singapore are not tax-minded and do not like to pay taxes. I do not think it right that the people of Singapore should be called upon to encourage the Government in its prodigality. If the Government wishes the people to make sacrifices, let it first set a good example by reducing considerably the amount of public expenditure on personal emoluments and surely everybody including Ministers and Assistant Ministers -

Postmen.

- should do a fair day's work for a fair day's pay. I know of not a single Party anywhere in this world where most of its elected members are Ministers and Assistant Ministers. We may be called upon very soon to meet a very big bill on account of Malayanisation. How are we to meet this bill if expenditure on personal emoluments is mounting? Is it not the very purpose of Malayanisation to reduce the expenditure on personal emoluments and to get local officers to do cheaper the work for which we have to pay expatriate officers more to do? Sir, it is the duty of the Government to take decisive steps to reduce expenditure on personal emoluments and not make Malayanisation an excuse for further prodigality. Sir, it is reasonable that more taxes should be imposed to pay for the expansion of social services but it is absolutely unreasonable that most of these taxes should be spent on salaries. Let the burden of taxation fall upon the shoulders of those best able to bear it but let us also be sure that the money which is collected in taxes is spent wisely for the benefit of the people and not squandered away in salaries. 3.21 p.m.

Mr Speaker, Sir, before I speak on this debate, I must give my hand to the Member for Queenstown (Mr Lee Choon Eng) who pointed out that the increase of personal relief allowance must include the parents' allowance. Sir, it is true that we Asians live in a way rather different from that of the Western people, and I am sure that the drafting of the Income Tax Ordinance must have been placed in the hands of Western people. I wish to inform this House that it is high time for us to realise that, if we want to fight for political independence, we must also fight for ideological independence. Therefore, I support the Member for Queenstown in pressing the Government to consider the possibility of amending the Income Tax Ordinance so that the personal relief allowance must include the parents. Sir, up to now we have heard a number of speeches delivered by both sides. It is not surprising that one side attacks the Government Budget as being colonial, imaginative or impractical. Sir, I wonder why no Member on the Government side has pointed out that it is ideally socialistic in that the allocation of expenditure for the main services of Government, namely, Education and Health, will amount to 40 per cent of the total revenue. I think the Government should point that it is the intention of the Labour Front Coalition Government to take such steps for a Socialist State as they have promised us. But, unfortunately, many of our Members feel that they must play at party politics, which is a bad habit in this House, and therefore when they say something, they always remember that they belong to such and such a Party and that they must stand for the Party and that stand is a political stand. Therefore, in this debate, I am sure that we, and by "we" I include the Strangers' Gallery, are not surprised at so much rubbish being talked about. Some Members boast and say, "That is my Party stand. I am the man with a political stand and that is my stand." Sir, I think it is high time that this is checked. The issue that is facing us in this House is not one of socialist, capitalist or progressive ideas but an independent movement, and unity of strength must be shown. So why waste our time and our lungs on reflecting whether or not to believe that charge by the Member for Sembawang (Inche Ahmad Bin Ibrahim) that this is a colonial Budget? It is true that on our memorandum letterheads, you can see printed "Colony of Singapore". We are still the Colony of Singapore. So why do we not face the fact that we are now in the transitional period from a colony moving towards an independent State? Therefore when we study the Budget and go through a debate on it, we must face the fact that we are not satisfied with our colony status and that we are now fighting towards an independent State. That Budget produced by the elected Ministers under colonial influence can provide 40 per cent of the revenue for welfare services is, I think, unreasonable; especially when we compare the draft estimates of expenditure for 1957 and 1956 - the $254 million for 1957 as compared with the $231 million for 1956 - and find that there is an increase of $23 million. From this $23 million, we find $11 million has been provided for the improvement of the education system and $2.7 million for the improvement of the medical and health services. So, based on this figure, if one wants to demand more schools, more hospital beds and a joyride over the Merdeka Bridge, is it any wonder that one might find the Bridge suddenly rising over the Kallang River? To have all these things, you have to have solid money. What we must consider is that we are the people's representatives and that we should give a clear picture of the current state of affairs in Singapore to our people. In spite of the fact that multi-lingualism has not yet been introduced into this House, I wish to quote an old Chinese saying, and a few Ministers may understand it. It is a very simple economic theory that has existed for many thousands of years. The saying is Chi liu kai kung. It means that we must try to open up more streams so that the outflow of water can be restricted. In other words, we must make more money and spend less. Now, when faced with increases for social services, Government usually says, "Increase taxation." Unfortunately, the Labour Front Coalition Government will make a great mistake if they reduce the personal allowance from $3,000 to $2,500 because it will affect the contributions which people can really afford making towards the revenue of this country. I am sure that Government's failure to increase company tax was merely based on the statement of certain business and financial experts who say, "If you increase the company tax, you will stop attracting foreign capital or local investment." Sir, I am sure that is wrong. A few days back I had a chance to talk to the only banker who is a nominated Member in this House (Mr Sutherland). I asked him to confirm how much local capital surplus is available in this country. He gave me an estimate - not official - of at least $100 million which is lying idle in the local banks of Singapore and the Federation. I said I wondered why the Government could not find ways and means of encouraging all this local capital to invest in this country and the answer from this banker which surprised me was, "No, unless you can change the people's minds. Even Government bonds have had a weak response." So I think the Ministers should bear in mind the fact that we have no shortage of local capital and that there is no need for us to try to induce foreign investments. We can afford to stand on our own and the only thing that we should do is to bring our economy in line with political stability. You can secure economic and political stability even if the company tax goes up to 50 per cent. Maybe I am wrong but I do not think so, judging from how the Ford Motor Company, despite the heavy taxation in the United Kingdom, insisted on opening their branch and factories there, and how the Austin Motor Works also tried to open a factory or offices in the United States despite the heavy company tax in that particular country. Therefore, based on this theory, I think that the elected Government should not be misled into thinking that, by increasing the company tax, we would merely stop local investment. It is not true. The reason why the market is so dull and investors are scared is not due to the high company tax but because of our political and economic instability. Therefore the Government should go all out to increase our national enterprises and engage in the development of our local industries. For example, I wonder why we cannot develop our fishing industry. I met an economic expert from a foreign country and he said he wondered why such an island like Singapore is still importing fish. He said it was a terrible mistake for the Government not to train the fishing industry in the best and most ideal methods. I wish to point this out to the elected Government, that we must not only think of getting more money from taxation directly, but we must also think of indirectly promoting trade and commerce by encouraging our national enterprises. I now wish to speak on the means of economising on expenditure. We can try to cut down on unnecessary expenditure, for example family planning and certain donations to imperial institutions, and we must take note of a very important point: that every year personal emoluments are increasing. Look at the following figures. This year personal emoluments have increased by $15 million. The figure for personal emoluments for 1956 was $98 million, and for 1957 we have to spend about $113 million. Of course, this is due to the yearly increments, but I think we can still have the opportunity of examining whether there is any surplus service which is not required in any department and try to save as much as we can. While touching on development projects for health and education, I wish to point out to the Minister for Health that we require more hospitals and clinics, but we do not require such luxurious hospitals as the Kandang Kerbau Hospital. It is too expensive for we poor Singaporeans to enjoy. We want more hospital beds and we want more clinics scattered around the rural areas, but definitely we must not be too taken up with our luxuries by wanting everything first-class in the world - first-class hospitals, X-ray equipment, and everything of the best. Our wants must be based on our pocket and our national revenue. We do not have rich natural resources like other countries. We have to rely on trade and commerce. A businessman's income - I am sure many Members will know - is always uncertain. I take this opportunity to say that in drafting Budgets in the future any expenditure should be considered from the most economic and practical point of view. We spend many, many millions of dollars for further development of schools, but I want to point out that we want more schools rather than multi-storeyed schools, and to spend at least about $200,000 to build a school. We face a politically critical situation now. The improvement of education is very essential, especially the Chinese education system. We have to spend a lot of money on the development of education. I wonder whether the Minister for Education can give me an answer as to how many of the proposed schools to be built in the coming year are going to be Chinese or Malay. If the policy is based on the old system that all schools envisaged to be built will be English schools, then I am sure it will lack the support of all circles. Sir, I want to point out that we should try to build more schools economically, scattered around the rural areas. I have visited one which was built by the Member for Paya Lebar (Mr Lim Koon Teck) and I have been given the figure of one class-room costing roughly $3,000. This school is called the Tai Teow School and it is located in Lorong Tai Seng. To my taste, it is most suitable as a primary school for the rural areas which are in much need of such schools. Sir, if the Government can take the advice of the old Chinese saying to open up more streams and thereby restrict the outflow of water, then I am sure everybody will support the Budget. 3.40 p.m.

Mr Speaker, Sir, I am sure that many Members of the Opposition, when the debate on this Bill is over this evening, will go home and relax and pat themselves on the back having in their minds thoroughly satisfied themselves that they have faithfully carried out the duties of the Opposition. But, Sir, if they turn the finger of conscience and search their hearts, they will have to admit that they have not carried out the duties that a responsible Opposition should carry out. Let them admit that they have tried to find holes in a Budget where none existed.

Why none?

Because I say so. So, Sir, not having the force of logic on their side, they make up for the lack of logic by dramatic and appropriate gestures of their hands, looks of horror on their faces when they talk of a $3 increase in driving licence fees and so on. The Member for Serangoon (Mr Lim Choon Mong), Sir, with undue adroitness on his part, managed to put forward a thesis that luxuries are also necessities. It depends on how one looks at things in life. In certain conditions of life, certain luxuries do become necessities, I admit, but to say that workers and labourers need radios and that they need motor cars or that motor cars and radios are necessities to them is stretching the thesis too far. The hon. Member started off with the contention that actual experience has shown invariably that surpluses occur in tax collections. May I point out to him, Sir, that if he refers to the figures of the 1956 Estimates, he will find that the income tax collection estimate for 1956 was $65 million but the revised estimate is now $60 million? There is already a deficit of $5 million.

Inefficiency!

Whatever it may be! Then he goes on to plead that there is no real need for increasing taxes. Sir, he wants the Government to cut its financial Estimates extremely fine. He wants us to go to a dangerous level. He wants us to show exactly how much we will be able to spend in the coming year and not to increase taxes because he thinks that we will be able to meet the increased expenditure resulting from increased social services which we are pledged to carry out as a Socialist Government. But, Sir, may I draw his attention to the fact that, even after all these increased taxes as proposed by my hon. Friend the Financial Secretary, they will only rope in another $20 million, leaving still a deficit of about $17 million; and that the margin of $17 million should probably be covered by increased collection in taxes over what is anticipated, and by a lesser amount being spent under various Heads, though they need not necessarily be savings but they can always be votes that are not expended this year and which have to he revoted next year? But that $17 million is a margin for that purpose, otherwise the taxation proposals could have been more drastic. Then the hon. Member went on to plead for the poor workers who will be affected by the increase in the price of cigarettes due to the increased duty on cigarettes, and so on. But he failed to make the point that if the poor people could not afford the extra five cents on a packet of cigarettes, they could switch on to smoking locally-made cigarettes on which the Government now proposes that the tax should not be increased.

Change of cigarettes will affect the throat.

It will affect. Sir, what I am perturbed about is that if there is a wholesale change of the smoking habit, it will affect the revenue very badly and if that happens, it is possible that the Government will have to review the exemption from increased taxation it has granted on the tobacco that goes into the manufacture of local cigarettes. But the worker has the chance of smoking cheaper cigarettes now if he goes and smokes locally-manufactured cigarettes. Then the hon. Member went on to say that the Government changes its plans very often - I think he was referring to the District Hospital which was proposed to be built at Kallang and which is now to be built at Tanah Merah. The hon. Member would, of course, prefer that the Government should stick by what it has said even if it realises that a mistake has been made. Does he prefer that the Government act that way? But he might come round and then tell Government, "You made a mistake. You realised that there was a mistake. Why did you not change your plan?" Of course, he would change according to the scene at that time. Then he goes on with a lot of talk about the high rents that the S.I.T. charges the poor dwellers who cannot afford them. I, Sir, was one who had always been against these high rents of the S.I.T. but then whom did I come up against, Sir? I came up against Members of his Party in the S.I.T. who justified these high rents and when I asked the S.I.T. authorities, "Why do you charge $400 or $450 for a shop?", they answered, "We have to get a profit out of the shops in order to subsidise the dwelling houses." That is the excuse they gave to me. But I suggest, Sir, that he can more profitably talk with certain Members of his Party who are on the Board of the S.I.T.

Government controls it. The Ministry of Housing.

Then he dwells at length on the economic position of Singapore and on what my hon. Friend the Financial Secretary has said about Singapore being a great trading centre, and so forth. He bemoans the fact that The Federation are imposing a tariff barrier on Singapore. I too. Sir, bemoan that fact. In the past, the Federation Government taxes have been irksome to our industries, but now, frankly, I am disturbed. I have not been sleeping over it, Sir. My predecessor the Member for Cairnhill (Mr Marshall) and myself have been feeling disturbed about it even in the past but I am feeling more so now -

What are you doing now?

Yes, what am I doing flow? I am coming to that. We have, Sir, raised this matter very often with the Federation Government but so far there has been no agreement reached and I think that I warned this House a month or two back that economics in the present-day world in many countries are dictated by politics. They are not purely dictated by economic reasoning but they are dictated by political reasoning and therefore, Sir, I think that the solution is not one of an economic approach but rather of a political approach. If we can once get the political situation clarified and settled, we might find that this difficulty will be done away with. Sir, the Liberal-Socialist Party - some members of which belonged to the Progressive Party - have not done anything in the past to help this situation towards a political settlement. In fact, some of them have made the situation worse and I quote, Sir - memories are short sometimes but sometimes every thing is not forgotten - from the Singapore Standard of 18th September, 1951: "'UNITY' CALL-COLONY INDIGNANT. `WHAT? FEDERATION SHOULD JOIN US INSTEAD' The call of Dato Thuraisingham, Federation Member for Education, that Singapore should be a part of Independent Malaya met with varied reaction in the Colony yesterday, ranging from complete endorsement to the indignant remark, `The Federation should join Singapore.'" Then I quote Mr John Laycock, a leading member of the then Progressive Party, now defunct, fortunately: "Legislative Councillor. Mr John Laycock said. 'There is no question of Singapore joining the Federation now....'"and so on. Mr Soh Ghee Soon, another leading member of the Progressive Party, now defunct, said: "I can never agree that Singapore should join the Federation. I consider Singapore to be more politically advanced than the Federation." Now, of course, they are more politically advanced than us. Dato C. J. Paglar - I am sorry to mention his name, Sir; he is no more with us - said: "Singapore should remain as it is. Just as Hongkong is to China, Singapore will serve the Federation well." Wishful thinking, Sir! My contention is this, Sir, I still firmly believe that the solution of the economic problem between the Federation and Singapore is a political one and not an economic one. That holds true for many other countries with whom we are doing trade. But I will not be surprised, Sir, that if this sort of tariff barrier does persist, some of our factories will have to go to the Federation and we cannot help that; no government in Singapore can help that. The hon. Member did talk on trade and that the Singapore Government should create stable conditions and a sense of security. Sir, we are doing all that we can to attract foreign capital to set up industries. I outlined at the last sitting of this House the programme that Government had planned for the expansion and encouragement of industries. Beyond that, I think it is a question of political stability as the Member for Changi (Mr Lim Cher Kheng) has pointed out and as I have said at the last sitting. The events of the last month's riots and the events that have gone on before during the last one and a half years, not only the so-called political agitation but also the so-called trade union agitation led by certain people with political motives, have done great harm to Singapore's good name and to the confidence that Singapore would otherwise have enjoyed by many foreign capitalists. Now, we come to the question of the Industrial Promotions Board. What will the Government do with the $1 million? How will it be controlled? What will be the policy? Will it be flexible or rigid? Why does not the Government announce the scheme? If the hon. Member has a little bit of patience, the Bill will be coming before the House very shortly. It is now in draft form and, with a few finishing touches, it should be ready very shortly. But I will say this, Sir, that it will be a statutory Board, and the Board will have the funds allocated to it. It will be responsible for giving out the loans. Then comes the Member for Queenstown (Mr Lee Choon Eng) who asked, "Why not tell us the real position? Why tell us that you are financially sound and yet tax us more and more?" Sir, no matter how far we can produce a Financial Secretary who may be a wizard or who may have a gift of seeing into the future, no human being can tell what the future will exactly be like and, normally, estimates are prepared on certain background performances and expectations of the future. Sir, you cannot expect any government or any Financial Secretary to do better. The Member for Queenstown claimed that the House was told that we were on the verge of bankruptcy. That is not so, Sir. At no stage was this House told that we were on the verge of bankruptcy. In fact, the Hon. the Financial Secretary gave an assurance in his speech that the financial position was sound. There is no question of bankruptcy. Then there was a long lament on giving grants to charitable organisations. Sir, some of these charitable organisations do a lot of good for the people and save Government a lot of money by the amount of relief work that they do which otherwise would fall on the shoulders of Government and the taxpayer because of direct grants. He then went on to the tax on petrol and the increased registration fee for cars. He said that if a worker travelled by taxi, it would be very expensive and that he would have to pay about $8 on taxi fares. Have hon. Members ever heard of any country in which a worker travels by taxi? I do not know what the definition of "worker" is now in the minds of the Opposition Members but, as is recognised even in this Colony, our Provident Fund Ordinance provides a limit of $200 a month income beyond which a worker is made to contribute. It recognises the fact then that with an income of up to $200 a month a man is supposed to come into the very low income group. The S.I.T. also - on which the Liberal-Socialist Party had a lot to say - put a limit of $200 for the lower income group to qualify for the very cheap rental houses. Sir, it is generally recognised that a person with an income of up to $200 a month is taken as one who is in a low income group. Beyond that, it is a matter of degrees. The Member for Changi (Mr Lim Cher Kheng) said that we should develop fisheries. We are doing so, Sir, but to develop fisheries, it does take time and it is not as easy as just casting a net and getting a ton of fish out of the water. It is a phased programme which takes a number of years to produce results. We have the Fishery Research Station here which is not only for Singapore but is a regional Station.

Where are the results?

I will come to that. That station, Sir, has a long-term programme for research and, so far, I think it has been in existence for four years. It has done a bit of research but it has not shown any immediate results. I am now directing my attention so that this station should change its programme to one that will show a more immediate result and that matter is receiving attention but beyond that the granting of three licences for joint fisheries with the Japanese should bring in more fish. I think the Japanese fishing-boats will be coming in in December under those three licences. Then, Sir, after all the lament by the Member for Serangoon (Mr Lim Choon Mong) over driving licence fees, and so on, I think he has not taken heed of what happened in the City Council at the last Budget meeting. The leader of the Liberal-Socialist Party at the last Budget meeting in the City Council declared that there is no poor man and that even a market stall-holder is a capitalist. Then, Sir, in the City Council, they raised the hawkers' licence fees from $1 per year to $12 at first and subsequently to $48 per year - Hon. Members: Shame!

- and that, Sir, is not hitting the poor man. They say that they cannot possibly afford to pay $3 more for the driving licence. They are poor men but the hawker is not; he is a capitalist and he can afford to pay from $1 up to $48 a year. That is their logic, not ours. On the question of the luxury tax, Sir, it is an equitable tax. It is a tax that any Socialist government would be happy to introduce. It is in line with Socialistic principles. It is a tax that will hit the man who can afford to pay. If a person is rich and can afford luxuries, let him pay for them. On the grouses that the Opposition have made not to tax the poor, I do not see why they should have a grouse on the Luxury Tax Bill because this tax is designed and aimed at the rich and not at the poor. But one deserving argument was raised by the Member for Tanglin (Mr John Ede) that it should be seen that the free port status of Singapore is not endangered as a result of this tax and I think the Hon. the Financial Secretary will be glad to assure him that before any item is placed as coming within the orbit of the Luxury Tax Bill, we will examine it very carefully and see what effects it will have on the entrepot trade. Every care will be taken to see that the entrepot trade does not suffer as a result of any item coming into the Luxury Tax Bill. 4.01 p.m.

Mr Speaker, Sir, it is very alarming that our expenditure should go up sky-high year by year. When we look at page 13 of the Estimates which shows the expenditure from April 1946 to 1955, the period between April 1946 and 1947 was generally the reoccupation period but after that period, the expenditure rose from $74 million in 1948 to $197 million in 1955 and the present estimated expenditure for 1957 is shown as $254 million. At this rate, the Colony is surely drifting to bankruptcy. I do emphasise that this is so and the reason is this. This is a small island of about 224 square miles, part of which is occupied by the Services. It has no natural resources of its own, unlike the Federation. The only resource is its entrepot trade and if the principle of the free trade policy maintained up till now is jeopardised, I think Singapore will be nothing but a strategic island. Sir, our revenues have been derived so far from taxes on tobacco, alcohol, petrol and through income tax. With the exception of income tax, other taxes are going up and up, which is causing hardship to all, especially the poor. Now may I ask some questions, Sir, and I hope the Hon. the Financial Secretary will reply. Where does the money from the revenue go to? Am I correct in saying that 55 to 60 per cent of the revenue goes towards administration costs? Sir, as I have said, Singapore is a very small island. In the pre-war days, we had one High Commissioner for Singapore and the Federation. Today we have a Governor, the Chief Minister, eight Ministers and four Assistant Ministers. Do we need so many people when this island was governed, though in the colonial way, by Permanent Secretaries who are still in the administration and drawing the same salaries? This has added to the expenditure of the Colony - their high salaries, allowances, entertainment allowances, and so on. Sir, when a country is going to achieve its freedom the people of the country willingly should come forward to serve the country and accept service at the lowest salaries.

They take what they can get.

That is not so in every place and as we are well advanced, we can come forward and show our patriotism. Of course, I must give credit to two or three Members on the Government side who had much more income than what they now earn. There is no doubt about it; they have made sacrifices. But for what is it after all? They are holding positions of honour and they must serve the country but if they feel that they cannot sacrifice their former lucrative jobs then they can carry on with those jobs and not accept their present posts. Sir, as I said before, what is the use of doing away with expatriates when you cannot get the administration costs reduced? They have to run two homes, educate their children abroad, and so on, which is not so with our local people. I do not say that they should not live comfortably. I do say that they should and they must have a decent income but this must be according to the needs of this country and not England or even India or Ceylon; expatriates come from many places. Sir, the Luxury Tax Bill - whatever name you may call it - means more or less a duty on imported goods and it will be a departure from the free trade policy. I will dwell on this subject when this Bill comes up, possibly tomorrow, for Second Reading. Sir, the higher the taxation, the more wages will have to be paid and the cost of production will go up. We have no hinterland to serve. If there is a hinterland, you have to pay duties like any other country; I am not criticising the Federation. They have their own policies. But what will a factory in Singapore do if the cost of its manufactured goods is put up making them uncompetitive in price with imported goods? Johore is only 16 miles from here and you can set up a factory there. What is then the remedy for us? The only remedy is to bring down the cost of living, cut down expenditure and expend what you can afford. Sir, details on the various Heads will be discussed at the Committee stage but I would like to touch on the Department of Broadcasting. The motion of Malayanisation moved by me in 1952 was passed and the Department still remains full of expatriates. I understand - subject to correction - that there is only one local man acting in an executive post. That can also be discussed later. Why should the Department of Broadcasting be a Government department? Why should it not be commercialised or why should it not be changed to a corporation and made to run on a profitable basis as it is done in other countries? The argument from the Government side has been that Government should have some control over this department. Of course, any corporation can be controlled by making a condition: Government can appoint a nominee on the Board. This can be easily done. As far as propaganda is concerned, any government in power would like to have such machinery but at whose cost? Sir, no provision has been made for the abolition terms of expatriates. How many millions of dollars will be required? There is also no provision made for the nationalisation of transport. I hope it can be pointed out to me whether a provision has been made and, if so, how much? We will require at least four or five battalions and how much provision is made for them? Where is this money to come from? Higher taxation? At what rate and on what? The money is not going to fall down from heaven, is it the intention of the Government to mortgage Singapore even before merdeka comes? Certainly I would not like that to happen. Sir, remarks have been made about contributions to various charitable organisations. This is a State without an official religion as has been quoted today and I will dwell on this subject at the Committee stage. Sir, stress has been laid on the import of foreign capital. If a man pays a dollar per share as investment he takes away 15 to 200 per cent in dividends yet that $1 still remains even after he has, benefited so much! Sir, alcohol can easily be taxed more. Even though I will personally be affected, I have no objection to a little higher companies tax. There is nothing wrong in that. Someone said that the Labour Front is a Socialist Party. I hope the Labour Front understands the meaning of Socialism. If they understand, I hope they practise it. I was told that some peopie should only smoke locally-made cigarettes. Socialism mean that everyone should have an equal chance to enjoy everything created in this world and not to have two different levels in life for poor and rich people but here I see that with the Labour Front, Socialism is something different. Sir, in conclusion, I would suggest to the Hon. the Financial Secretary, whose task is very difficult, to try and reduce expenditure on the various items and that if he does so, there will not be a deficit but possibly a surplus and there may be no need for higher taxation. 4.15 p.m.

Mr Speaker, it is rather a thin House and I do not propose to take up too much time, but there are a few points I think I must make. I want to deal with certain matters of policy in my Ministry but I think I ought to deal, first, with a certain economic aspect of the whole Budget and the whole Singapore situation. We have been having a lot of very interesting comments about details in the Estimates: whether you make a grant to the Automobile Association, and so on - I will have a word about that - but what we have not had really, as I can see, is anybody from the Opposition attempting to give an overall picture of the future economy of Singapore. My hon. Friend the Financial Secretary did quote from Sir Sydney Caine's memorandum some very useful points which have not been touched on by the Opposition and, on the contrary, the general theme of the Opposition may be summarised in the remarks of the leader of the Liberal-Socialist Party who, apart from saying that the Government was creating an impression that taxation was necessary and then saying that there was no need for increased taxation, finally said that all additional taxes were unnecessary and that the Government should drop each and every one of them. The Member for Queenstown (Mr Lee Choon Eng) said the same, I think. Now I stand up with some timidity, but unashamed, Mr Speaker, as an advocate of higher taxation because this country of Singapore must get more capital investment. We need therefore to create savings and form capital on a national scale. The need arises from the fact that in Singapore one and one do not make two, but one and one make 3.9, that is, if one and one are a man and a woman, the average household is 3.9 people, if you like to transform that into a demographic projection, it means that you have an annual increase of four per cent in your population and that this is perhaps the highest population increase in the world. It beats Puerto Rico. This increase in the population is an increase in dependants rather than an increase in productive workers. You can take a look at the 1955 Annual Report which gives you a nice tabulated figure diagram showing the population structure of Singapore with its enormous mass of infants, tapering up to the workers and at the very top, the old. By a little simple arithmetic and guesswork, you can project that forward, without being a mathematician, into a reasonable guess as to what the future population will be. We may have another quarter of a million people on this island in the next five years but of that quarter of a million, only 50,000 or 60,000 will be an addition to the working force and the rest - about 200,000 or so, give or take a few thousands - will be an addition to the dependants, the children and the aged. The effect of that - if you like to break it down - is roughly that one worker in Singapore has to provide for the needs not only of himself but also of two dependants; and as the population goes five, ten, fifteen, twenty years forward, that situation will go on and the number of dependants will increase relatively to the number of workers. In the lifetime of this Assembly - some Members of this Assembly and not the body as a whole - we may have three million persons trying to live on this island and that will be very largely a consuming and not a producing population. If you increase the number of people who are eating out of the rice bowl, Mr Speaker, then the amount that each one gets will decrease. The only answer to this increasing number of dependants in this increasing population is to make the rice bowl bigger; in other words, to increase our total national production, and you cannot increase total national production without investing capital in the equipment which you need for production. If we go on as we are, we are condemned to a fall in the standard of living and no pious hopes and no suggestion that we do not tax the drivers of motor cars are going to make any difference to that. There will not be enough to go round unless we invest very considerably. If we are going to improve the standard of living, we must invest at a still higher rate, for productivity depends partly on equipment and partly on skill, and both these are matters in which you have to have investment on a national scale if you are going to meet national needs. With this idea of investment in mind, the Labour Front put in, as the first item in its four-year programme, a detailed survey of the national wealth in order that planning could go forward. I am not proposing, Mr Speaker, to take up the time of this House with a lot of arguments about the gross national product, the net national income, the ratio of investment to production, and the annual net capital formation, but we can, I think, be satisfied with the simple statement that we have got to have a very large investment and that it is going to be very difficult to get enough capital to invest. I hope it will not be too long before far more competent persons than myself in the economic advisory unit do produce something which can be made public so that the brains of this Assembly can really study this problem of getting sufficient capital investment over the next few years. I am content, Sir, to say that we must invest and I have just remarked that investment means, of course, - one Member of this Assembly referred to "investing" in gambling - in things which are productive. We must also assess priorities within our investment programme so as to get the most productive use of the capital. Certain items are obvious. If we are going to keep up technologically, we must have education and schools. If we are going to have a reasonable number of hours of work per worker in a year's work, we have to keep the people fit and healthy; we have to have health services. As housing is a basic preventive health measure, we have to provide as far as we can decent standards of housing. Those are not to be thought of as welfare services in the sense that you pity people and say, "Of course, he has not got an education." They are vital to the economic future of the country. It is very proper and right that they should be regarded as "welfare" in the sense that they do provide for welfare but they are not charitable needs based on pitying people. They are vital because you need the people to build the country and you have to have a fit, healthy, trained and skilled population to meet our needs. Another field of investment covers the services provided publicly for communications, for trade, commerce and industry; our sea port, airport, telecommunications, postal, water supply, power stations, drainage and all the rest of these obvious things. The points I have mentioned so far have been traditionally left in the field of public investment. They come out in the Estimates and in the Development programme and you can see what they are, but they only account for 50 or 60 per cent of the total capital investment in a place like Singapore. Most of the studies of this kind of thing are related to other types of economy but commerce and industry are traditionally left to the private sector of investments. How far that is necessary, I do not know. It appears to me to be necessary at present that a considerable area of the economy should be left to the private sector, but there is already continuous pressure in this Assembly from the Opposition for the Government to start interfering with commerce and industry, assisting them, subsidising them, strengthening them and providing them with funds, and so on, and I think that is probably not only a right policy from the socialist point of view but also a neces sary policy from any practical point of view. Now if we are going to get this capital for investment, we have to ask, "Where?" We can either get it from our own resources or we can get it from overseas. If we are not going to have heavy rates of taxation, increasingly heavy rates, then we have got to go overseas for that money. We can go to Great Britain or America and ask, "Will you give us a grant? In other words, give us a handout. We have no money and we need money. Give us foreign exchange so that we can import the equipment we want for our factories or communication centres, or whatever it is." We may or we may not get the grants we need but we shall be competing for them against a great many other under-developed countries many of which may well appear to be more fruitful fields for investment. It is the same with loans. Whether they are low interest or whether they bear the normal economic interest, there again, we can try and get them but we have to compete with a lot of other people who are looking for them as well. If we go to the British Government or go to the United Nations and try to get money out of them, there will be a queue of other people and we have to take our place in the queue. We will take what we can get and when we get it, it may not be a "no-strings attached" grant or loan. It may well have some sort of strings attached. We can also try to get money from overseas by raising loans in the ordinary commercial loan market or, of course, we may get money by tempting the investor to come here and set up his factory and put his personal money or the company's money into development here. In the interest of brevity, I will not read from the remarks of Professor Paish, Professor of Economics, London University, (with special reference to Business Statistics, I think). Anyhow, he is a man of some weight in the economic world. He thinks that it is going to be exceedingly hard for a country like Singapore to get any money from the private investment field, whether by raising a loan or by getting direct investment, and he remarks that the further the country advances towards self- government - that is, a hitherto dependent Colony advances towards self-government - the smaller the chances of getting any money from the private investor. I do not know if we need to take quite so dismal a view as Professor Paish takes, but certainly we have got to reckon that our expectations of capital from overseas are going to be limited and it is right, to some extent, that we should desire to limit them because if you depend for your finance on overseas borrowing, you are mortgaging your country to the people who have lent you money. It has a colonial aspect, an aspect of economic subjection which is not very desirable. I think, therefore, that it is necessary and important, if we are going to have merdeka, for it to be economic as well as political merdeka; if it is going to be fruitful and prosperous, we should raise our own money in Singapore from our own resources. It means devoting more of the national income to investment and less to consumption. In the U.S.S.R., I believe that investment has been running since 1928 at about 25 per cent of the gross national income. The U.S.A. runs at about 15 per cent. Here I would not like to say. I am told that it may be 10 or 12 per cent and that if our population can be stabilised, we may be able to get by on our present rates of replacing depreciated capital and providing new capital for expanded development; but with our population expanding, we cannot hope to provide for them unless we very much increase or perhaps double our present rate of investment. I would remark, in passing, that when we come to the stirring debate on family planning, which I expect will be an annual feature, I hope that the anti-family planners will take note of my remarks about population and investment and will refute them in order to justify their opposition to family planning. If we are going to have savings in Singapore, we must get them in one of three ways. You can let the capitalist make profits at the expense of his workers and then, in his own judgment, he puts the profits into new investments where he thinks he will make further profits. Or the Government may tax his profits and income and luxury consumption, and the Government may put its tax money into new investments. Or the third way is that the ordinary man may be thrifty and consumes less than he might in order to invest. I cannot see any other way of getting money from our own resources. If we say, "We must tax the rich. Do not tax the poor but tax the rich", it means nothing. All you mean is that you are using the rich as a tax collector for you. Instead of paying out the money in wages to his workers, he accumulates it for you and you take it from him; he remains unpopular and the Government hides behind his back. Well, that is fair enough. In a transitional stage, that is a necessary process. You cannot abolish the fact of a capitalist organisation at once. You can only tax and gradually transform it. But you have to recognise that if you are going to use the capitalist to collect your revenue for you and then you tax him; or if he is organising the profitable enterprises for you and then this Assembly legislates itself into a position of having a claim to a large or small part of his profits; then you have got to leave enough to keep him interested. You can tax him as high as you can provided he does not say, "Well, I am not going to bother with this work for you anymore. I am not getting enough pay. I will pack up. I will sell the company and go elsewhere." But he will when he does not think he is getting enough. We do not want to bring industry to a standstill by an excessive tax on profits. What we have, in effect, been doing since this Government came into office is to ensure by policy and by legislation that a greater portion of the national income is distributed to the workers in the form of wages. That is the effect of the Labour Bill, and the Clerks and Shop Assistants legislation. It is also a general result of the way things have been going. As you distribute that proportion of the national income in wages, Sir, you increase the amount which will definitely go to consumption and which will not go to investment. Now that policy of distributing more of the national income was a right and necessary policy. Two or three years ago, one person in four of the population was living on less than a dollar a day, or a family of four on less than a hundred dollars a month. That redistribution of national income was necessary to lift part of the burden of intolerable poverty which had been imposed on that very large part of the population in the past but redistribution through wages is very inequitable. Two men work on the same standard job and receive the same standard rate of pay; one is a bachelor and the other has a household of 11 people. They have the same pay and if you treat it as a matter of contribution to production, that standard rate of pay is fair enough. If you look at it from the point of view of necessity, obviously the man who has 11 people to provide for is not going to get enough, and a bachelor will probably have too much. If we are going to get nearer to an equitable distribution of the national income, in my view, we have to supplement wage increases on the one hand by social security schemes and on the other hand by improved taxation techniques. I fully agree that where a man has a lot of dependants, you have to make some provision for him so that the dependants are looked after. A great deal is said about the Asians maintaining their parents; as far as I know, so do the people in England whose parents are in need and any person in the world will maintain his parents if they are in need. It is perfectly true that in the absence of social security, the people in Singapore do have to carry a great many more dependants and much more burden than they would if we could get the social security structure in; but where a man has no dependants - I think I am right in saying that about ten per cent of the working population in Singapore has no dependants - and he sends his money perhaps overseas to Europe and China, you ought to take another look at it. It is all very well if a man is a Malayan living here and makes his home here: by all means, let him support his dependants here, but if he is just a bird of passage whose heart is elsewhere, why should he export our wealth to his mother country? However, that is another issue. I think that we do need to construct our taxation system so as to bring the real distribution of wealth nearer to equity and nearer to sanity. We have also got to accept the principle of differentials and that you cannot equalise all incomes. You will not get the people to do the work unless there is a higher rate of pay for an engineer than for a clerk and if you make the rates of pay the same, the people will say, "We are not going to bother to be engineers; we may as well be clerks since everything is easy." You have further got to accept that an experienced engineer is worth more than an inexperienced one. The aim is not to extinguish the differentials but to make sure that nobody falls below a minimum standard of living. But if you once accept the principle of differentials in income, you have to accept also that there will be differentials in the burden of taxation in one way or another. It is only a matter of the distribution of the national income: how much can each person get out of it - whether you give him a hundred dollars and then tax him ten dollars or whether you give him ninety dollars and do not take any tax from him? It is really a book entry, but if we cannot get the money by voluntary savings, which is more comfortable or less painful, and if it has got to be taken, it must be taken in tax. We must get it somehow. I have made these remarks, Mr Speaker, Sir, because I felt, to a considerable extent, that the Members of the Opposition were launching their attack in the wrong direction. They were grumbling about the fact that it is not easy to say whether we are going to have a deficit or not on the Estimates because you cannot perhaps clear a site and therefore you cannot build a large hospital or a school - that kind of problem. I think that is fair enough but I think that they would have been more constructive if they had approached us on the other aspect, and said that we were not spending money fast enough - not throwing money away - because we were not getting enough capital investment into this country in the public sector. I do not think that they can sustain that attack because we are doing as good a job as could be done in my judgment; but at least it would have been the right line of attack for them to take, and not to go round and say that all proposals for further taxation are nonsensical. It shows a complete lack of appreciation of the situation. You have got to look ahead if you are going to be seriously running a country in this world today. Now, Mr Speaker, Sir, with relief, I abandon my notes on economic problems, which I am not particularly fitted to deal with, and will turn to some other aspects. Perhaps I might take, firstly, the newspaper report by the well known Mr Tan Lark Sye. This is a translation or a summary and I do not know that it necessarily represents him rightly or not; but this is what is given in the summary: "Local banks and other savings organisations are keeping deposits from local people totalling at least $300 to $500 million, if not $1,000 million. By investing $1 million in a factory at least 300 persons will have employment. Local capital therefore is sufficient to run hundreds of or even one thousand factories. But why don't they invest?" The answer, of course, is that if they have their capital in a savings bank or a savings organisation, it is invested because that is what the bank exists for. I am sure that Mr Sutherland does not lock up all the dollar holdings in his bank. The whole purpose of a bank is to canalise savings and to invest them. But the point that probably Mr Tan Lark Sye was approaching but could not grasp is that you have in this country a very large volume of hoarding, partly by the people who buy these gold bangles - I forget which Member of the Opposition referred to the difficulty of the poor worker who wants to buy a bangle. I should advise him not to buy it: I should advise him to make a post office savings or some other form of investment because the gold bangle will not be productive of goods and quite possibly it will be stolen. If he invests his money and gets some interest on it, he will contribute to the welfare of the country. That is one thing which could be done and I think that what Members of this House who can persuade anybody should do is to get the people to mobilise their hoardings and put them to work. Apart from the jewellery and that sort of thing, there are also people who keep dollar notes, and quite large sums locked up in a tin box in a cubicle. These sometimes get stolen and go back into circulation. From a social point of view, that is a very good thing but, of course, it is not very good for the person hoarding the money. If the people would get their hoarded savings into circulation, we would get on faster. Now I pass on to some of the attacks made on the Government. The Member for Serangoon (Mr Lim Choon Mong) pictured the Government as saying that we have no need to try and save, that the people will find the money for us and that we do not have to economise and he suggested that we were building lavishly and wasting our money on "frightful" structures and that kind of thing. We had the same sort of line from the Member for Sembawang (Inche Ahmad Bin Ibrahim) - as usual the People's Action Party follows the general Liberal Socialist line - who suggested that our schools cost as much as if they were built of marble. The Member for Ponggol-Tampenis (Mr Goh Chew Chua) referred to the prodigality of our Government's spending. Well, I am not going to deal with that in detail. I see a lot of points put down for reducing by ten dollars for this or that. No doubt, we shall get these details in the Committee of Supply. But I am going to make a few general remarks about the cost of Government buildings. First of all, I do welcome attempts by the Opposition to show us where we are building too lavishly, if we are, in fact, doing so. We are extremely conscious of the need for economy and austerity and we have set up special working parties on schools and medical buildings to try and get the cost down. We have given increased powers and extended the Public Works Standing Committee for the same purpose and we have set up the Advisory Panel on Public Buildings, again for the same purpose, and we have included on it representatives of private architects. So we have tried to provide a structure to produce economical and efficient building. If we are not succeeding, I shall be glad to know, so that we can get our buildings still more economical; but I cannot accept, unless good reasons can be given which have never been given yet, the suggestion that we are squandering money on buildings made of marble and all that sort of thing. It is just not so, as far as I can judge. It is difficult to compare the Public Works Department buildings with the sort of buildings that are done by private enterprise. There is only one authority you can compare with, and that is the S.I.T. In fact, the S.I.T. and the Public Works Department do very much the same work. As far as costs go, those two public organisations do match up very closely, which is significant; but when you try and compare our costs with the private sector, it turns out to be a matter of etiquette for architects and builders not to disclose for public comparison what the costs of their plans are. So I have not got reliable figures and am not able to say, "Well, here is a plan for 25 flats built by private enterprise and here is a plan for 25 flats built by the P.W.D. Let us have a look at them and see what the different items in the specification were, see what the costing was, see what the tenders were and see what the final building cost was." Apparently, you cannot get these figures, but if Members of the Opposition were to feel that those figures ought to be brought out, I suggest that they take it up in the Estimates Committee. Mr Speaker will be directing them and they will have the function of suggesting where economies can be made consistent with policy. I think it might be a very useful thing if they could get some experts in and, without any partiality, try to get a genuine assessment of the building industry, because the building industry is having a rather difficult time now and, in fact, contractors are tending to drop out of business. One or two have gone bankrupt; tenders are falling off and prices are rising. It might be a good thing to have a look at the causes. It is not easy therefore to make effective comparisons with the private sector but we can make comparisons with primary schools in other countries. We have now got our standard three-storeyed primary school down to a cost of $350 per pupil. That takes in the playing field and ancillary services as well as a big school. That is the average cost, of course, as one school can be more costly to construct because of the site. On the old plan, the cost was $430 per pupil and in that saving of $80 we have absorbed the current increase in prices. That is the figure at present: $350 per pupil for the school complete with its playing field and all services. In the United Kingdom, for the rather low average type of primary school, the cost is $1,190 per pupil, which is approximately three times more. Similarly, in Singapore, our secondary schools work out at $704 per pupil whilst, in the United Kingdom, they come out at $2,394. The United Kingdom builds very lavishly. Somewhere here I have a letter from a friend which came this morning. It has nothing to do with building cost, but it mentions that small children go direct to their own cloakroom from the classroom. They have pegs put up at the height of a child; the water closets have special seats and their hand-basins are special low ones with hot water laid on; each child has his own towel marked with his own symbols - cat or dog or flower, and so on. The classroom has the cloakroom next door. Well, that is a lovely school but we cannot afford it in Singapore and they do build at a higher standard in Britain, and provide more amenities. Of course, we do not have to provide heating and our wages costs form a smaller part of total costs than they do in the United Kingdom; but, nevertheless, it is very creditable indeed that our school prices should be relatively so low and if hon. Members can show us any way of getting them down further without improper sacrifices of quality, I shall personally be highly delighted. I might mention prefabricated aluminium schools made in the U.S.A. or in the U.K., and sold in South Africa - or in Britain for that matter. A single-storeyed prefabricated aluminium school costs more than the single three-storey P.W.D. standard schools.

Hon. Members heard talk about medical costs as well. They are not so easy to compare. It is not easy to control either, for that matter, because the doctor will say, "You must have this. If not, it is not healthy." It is difficult to argue with a doctor but I can give you one set of figures on this. The probationer nurses hostel was originally entered, I think, at $880,000 and when the detailed designing was done, that brought it down to $770,000 and the actual cost achieved (through economy in finishes primarily) was $680,000, which was a saving of $90,000. Well, that is the sort of approach which I have been trying to make to buildings - to try and get the cost down, but we should not bring the cost down, Mr Speaker, Sir, to the extent that we put up the maintenance cost. You can put in very cheap bricks in the wall but if they are too cheap, perhaps they will crumble away and fall down. I have seen bricks which you can pick up and crumble in your fingers as though they were a piece of earth and I saw them going into the walls of a building. The building is still standing. I do not know how long it will stand. I will draw attention to the P.W.D. Report of 1955 which shows the capital value of Government buildings as nearly $221 million and the maintenance costs, expressed as a percentage of the capital value, for permanent buildings is .99 per cent, for semi-permanent buildings 1.79 per cent, and for temporary buildings 3.79 per cent. Those are low maintenance costs, I think; but if you do not keep your standards high, you will get very heavy maintenance costs as soon as the buildings cease to be new and get some hard wear. That will run up your recurrent expenditure very considerably. In this connection, I would like to remark that we had some very warm and emphatic praise for the private builders from the Member for Serangoon (Mr Lim Choon Mong) and I welcome the efforts of the private builders. They are building a very significant section of the housing accommodation in Singapore but I cannot agree that the standards to which they build are fully acceptable for Government buildings. I will not disclose the name of the complainant here but it is an association of residents in one of the building estates. They wrote to me early in September. They addressed a letter to the agency which is running their estate and building it and they have not had a reply yet from the agency to their complaints and now they write again two months later to bring up the same matter again. Let me just read a few complaints from the list which they make: The drive from the car porch to the road is thin tarmac and not 3" cement on well rammed hard core as specified (in other words, you have a skin laid over the ordinary earth and as soon as you have driven your car over the new drive, it cracks and you will find yourself driving through mud); Drains cracked and improper fall (in other words, the drain is not so constructed as to allow the water to run away properly); Concrete slabs badly chipped, cracked and do not fit squarely on drains; Folding door in lounge/terrace badly warped sagging and split; Rendering on cement flat roof badly cracked. Rendering should turn up 6" on adjoining walls; First two courses of roofing tiles are not wired as per specification; Roof timbers stained and unpainted; Facia boards cracked and damaged; or too near to edge of tiles; Garden not levelled and land slide of banks: Fencing not securely fixed; Leaks in roofs and/or flat roofs; Walls cracked; Plaster cracks; Ceilings in halls, bedrooms, bathrooms, and/or kitchen sagging, badly stained; Concrete floors need repair; Cement skirting round house cracked; Part roofing timber and insulating bounds require replacement; Bathroom floors uneven and causing water to collect; Bathroom tiling and plastering badly chipped; Cisterns in bathrooms need repair; Long baths cracked; Linen cupboard door, shelves, cement rendering inside cupboard require attention; Mosaic tiles broken down; Specified brass door hinges not provided; Metal sink instead of glazed porcelain sink; Windows out of alignment; etc.

On a point of order, Sir. Is my hon. Friend dealing with details or with policy?

It occurs to me that the building needed rebuilding!

Mr Speaker, I think I have obviously satisfied the Opposition that the private builder is not always faultless in the standard of construction and that we should not bring, our public buildings down to the standard where people of moderate income have put their savings into houses and find that they are extremely unsatisfactory.

He made his money and went to the United Kingdom.

It is a matter which does need attention and which I hope to be able to give, but it is a difficult job to interfere with the private sector in building because they are independent builders. We also had some remarks about the omission of the transport take-over costs from the Estimates. It is with regret that once more I appear in my capacity as a schoolmaster in this Assembly - a schoolmaster who has lost his notes. But if hon. Members will read the White Papers which are drawn up and published, they will find that we published Sessional Paper No. Cmd. 48 of 1956 dealing with the unification of the omni-bus services. Paragraph 10 of it reads: "It is of course of the utmost importance to the large number of persons who will be affected directly or indirectly by the Government's policy of unifying the passenger transport system that as clear an indication as possible should be given of the target dates for the various stages in the implementation of that policy. It is expected that the adviser will require a year in which to complete his reports and that consideration of these and preparations for putting them into effect will require a further six months. The assumption by a unified undertaking of responsibility for operating any bus services will not therefore be possible before the middle of 1958.

Too late.

I think it is fair enough for the Opposition to say, "Too late", but it is not fair for them to say, "You should have put for the 1957 Estimates what is going to be spent in 1958." Nor do I think it is well advised of them to say, "We will put down in public the figure we propose to pay before we have completed the process of negotiation." Either it will be too high and we shall be throwing away our money or it will be too low and we shall be accused of cheating the capitalists. However, the Opposition have brought it upon themselves. They must do their homework and that is all I can say about it. Let me take a few other points as quickly as I can. We had a question about the Paya Lebar Terminal Building's cost being high and whether it includes a hotel or does not include a hotel. It will include necessarily a few bedrooms for emergencies for sick people brought from planes or cases like that. You may have somebody whose passport is not valid or a person who has been in contact with a suspect may need a health certificate and he may have to be kept within the sanitary cordon. You have to keep him there and you have to provide a few overnight rooms for that sort of special accommodation; but nothing in the nature of a hotel is contemplated. I would remark that although the cost of the permanent Terminal Building is considerable, the revenue even on the present temporary building is good. It is running at about 33 per cent of the all-in cost for the Singapore Civil Aviation headquarters for the airport and for the Regional Air Traffic Control Centre. If you take the direct cost of the airport only, it is running at about 80 per cent revenue as compared to cost and that is within 18 months of its opening. In other parts of the world, the ratio of the cost to revenue ranges from 10 per cent to 36 per cent so that though we are not right up at the top, we are very near the top for the whole world. The concentration of figures is about 30 per cent. That is the median point, I think, in the line; we are above the median point. I hope that we shall improve on those figures and I would remark that in the trip to Britain which I had to take in an aeroplane - which I regard as a most uncomfortable way of travelling, if I may say so - I thought that the airports through which I had to pass - when you get down for two hours or an hour and a half or perhaps longer in going in and out of them - were depressing places. I am sure that it is worth while to have a really good airport in Singapore. You will get people staying overnight bringing money into the place and you will get your air lines coming here instead of going to alternative airports because it is an attractive place. We ought to make things attractive for the passengers so that I think that there is a good case for giving Singapore a really good airport, partly because you will get more revenue out of it and partly because it will be an attraction to the travelling public. We also had a number of references to personal emoluments: suggestions that we ought to cut the civil service - I am not quite sure whether these advocates of economy wanted to cut the salaries of civil servants or to reduce the number of civil servants. I doubt if they seriously think that they could do either unless they want to get a general acceptance of a cut in the life of the whole economy. But I would like to stress that, in the departments of the Ministry for which I am responsible, we are providing essential and expanding services for Singapore and I hope that we shall not have any nonsense about cutting personal emoluments in things like the postal services where the mail handled increased from 57 million items in 1949 to 92 million items this year. We are not far off from having doubled the number of items handled in the course of the year but we are very far from having doubled the staff and, in the same way, the savings bank which is handled by the Post Office has also, I think, about doubled the number of its subscribers. These postal services are, of course, showing their usual satisfactory rates of profit, and for the Telecommunications Department as well, the revenue is expanding on the basis of providing services which are needed by the people of this city. Both the Press and commerce and industry need these services. They get them from the Telecommunications Department and they pay for them. The revenue which was under $5 million in 1956 is expected to approach $6 million in 1957. In 1953, it was just over $3 million. The revenue of the Telecommunications Department is expanding very significantly in relation to the services it performs, which are valued and wanted by the people of Singapore. In the Civil Aviation Department, again, I find our passenger traffic has expanded by about 25 per cent since the new airport was opened and, compared with the normal world average expansion of about 15 per cent per annum in passengers, we are well ahead of the rest. There is one point I might mention very briefly. The Member for Cairnhill (Mr Marshall) expressed concern about taxi-owners having to pay the new registration fee on their taxis. He will appreciate that the details of this impost were worked out whilst I was away but we are having it looked into in the Ministry. The machinery is a little complex between the Finance Ministry, my Ministry, and the Registrar of Vehicles and there are other hands that have to go into the pie before we can work out the recipe. 5.08 p.m.

Mr Speaker, Sir, there are one or two points raised by the Opposition concerning my Ministry to which I think I should reply. The Member for Serangoon this morning drew the attention of this Assembly to the question of rents of Trust houses. He says that in Boon Keng Road, the S.I.T. houses are being let out at $110 each a month, whereas the same type of premises built by private enterprise are being let out at $75 each per month. The fact is that there are no S.I.T. houses which are being let out at $110, but they are rented out at two rates - at $89 and $99 respectively, but inclusive of services the rents are $96 and $105 respectively. The rents of postwar houses can and do differ since they reflect the year in which they were built and the building costs. We then come to the question of car shelters for S.I.T. officers. Here again, I am afraid that the Member was wrong because car shelters for the S.I.T. were meant for the employees employed by the Singapore Improvement Trust and are apportioned between both the European and Asian staff and between both junior and senior officers on a basis of first come, first served. So there is no question of discrimination. In any case, this is a legacy from the Progressive Party. There is another point which was raised by two Members of the Opposition: the question of collection of arrears of rents on Temporary Occupation Licences due to the gross inefficiency of the Rural Board and the Land Office. It is not an evil of this Government since it came into being. There have been arrears of rents on Temporary Occupation Licences from prewar days and it is an evil which the Rural Board and the Land Office are trying to eradicate. It is not easy to solve the problems of arrears of rents due to Government on Temporary Occupation Licences, as any landlord in Singapore can tell you. 5.10 p.m.

Sir, the year 1957 will be yet another stage in the economic and social development of Singapore in the history of the elected Government. Sir, the experience which the Government has gained during the past 18 months has been well used in the planning of the 1957 Estimates. Being the Member for a rural constituency, Sir, I believe that these Estimates show a brighter future for the rural population. There are very many items like bus shelters, footpaths, roads in resettlements, the development of playing fields, public markets, standpipes, etc., which are all included in the Budget for 1957. I feel that, with the implementation of all these services in 1957, the rural people will really feel that the money allotted to these works is well spent. Although this may not be adequate to meet their requirements, I feel, with some justification, that a great many more improvements will be taking place in 1957 than in 1956. There will be some other matters which might affect the economic development of the rural population and I am sure the Government will look into them carefully. There is one question raised about the salaries paid to the staff of the Government, Sir, by a Member of the Opposition. I feel sure that it is very difficult for anybody to reduce the existing salaries in order to show a decrease in the expenditure in the Estimates. A Member of the Opposition, Sir, also referred to Ministers who own cars, and he said that only Ministers were allowed to possess cars. He also said that a certain Minister had told him that if he was not a Member of the Assembly, he would not be able to possess a car. Sir, I wish to answer this Member by saying that a car is being used by me not as a luxury, but just as a means of expediting my work as a Member of the Assembly. Sir, I also feel that there is justification for allotting adequate money for charitable organisations. A Member of the Opposition said that all these contributions were not very essential. Sir, I have seen many projects which have been paid for by the public through these voluntary charitable organisations. In Singapore, too, these organisations play a great part in helping people by various means. I feel that it is right and proper for any government to give adequate aid to voluntary charitable organisations which would help people to a very large extent generally. Sir, I feel that these Estimates will go a long way towards the provision of more amenities for the people in 1957. 5.15 p.m.

Mr Speaker, Sir, my colleagues have replied to almost all the questions raised by the Members of the Opposition. There is, however, one matter which I would like to speak on, and that is about the Income Tax Ordinance. As hon. Members know, the Income Tax Ordinance is administered on a pan-Malayan basis, and any proposed changes in the rates of tax must have the agreement of both Governments. In view of this, there have been prior discussions between the two Governments and it was after such consultations that a compromise was reached, and both Governments submitted the proposed changes simultaneously to their two Legislatures on 7th November. Since then, strong opposition has been expressed in the Press, and also in letters to the Government by many members of the public, including the Singapore Trades Union Congress, to the proposed reduction in the personal allowance from $3,000 to $2,500. Criticism was also expressed during the debate in the Federation Legislative Council. Sir, this strong opposition served to confirm the view that this Government had that such a proposed reduction would not meet with general approval, but before this proposal could be withdrawn, it was necessary for this Government to reach agreement with our Federation friends. I therefore flew to Kuala Lumpur on the morning of Wednesday, 14th November, and had discussions with the Federation Chief Minister, Tunku Abdul Rahman. The Federation Legislative Council, Sir, had however passed the Second Reading of the Appropriation Bill on 13th November, and I was therefore confronted with this difficulty. My friend Tunku Abdul Rahman lent a very sympathetic and understanding ear to the views which I expressed to him. I explained that this Government felt that it should not impose this proposed reduction against such strong opposition but that if his Government should feel that, as their Appropriation Bill had already passed its Second Reading, it should therefore not make any changes. I said that this Government was prepared to stand by the compromise reached with them. Tunku Abdul Rahman told me that he would have to consult his colleagues and that he would give his support to my representations. The result of these discussions, Sir, is now known to hon. Members. Once again, Tunku Abdul Rahman has shown his friendly attitude to Singapore and my colleagues. and I greatly appreciate this. In the short space of less than one month, he has given two outstanding instances of his great friendship for Singapore and we look forward to a happier and a closer relationship with our friends in the Federation.

Amen!

The Opposition, Sir, touched on the question of motor cars. They wish to have a graduated scale. Here again, Sir, we had to have agreement with the Federation Government in order to impose this tax. It was felt by both Governments that a graduated scale would not be of great advantage unless it was the intention to drive away large cars from the roads. The tax of ten per cent on all cars was, we felt, a fair one to those who could not afford big cars. Of course, they pay a smaller amount in tax, and those who buy nice big cars pay a larger amount. 5.20 p.m.

In reply?

In reply. Mr Speaker, Sir, the debate has been long and very interesting and I find myself in the happy position of having had most of the questions asked by the Opposition answered for me by my colleagues. I may perhaps be allowed however to deal with one or two which I think remain. First of all, one or two Members of the Opposition have questioned the need for increased taxation. The argument is based on the fact that, in the past, estimated deficits have been turned into surpluses and, indeed, the estimate of a deficit which I myself made last year has, in fact, been turned into a very small surplus. I would, however, draw attention to the fact that, whereas in the past, surpluses have been very substantial, the surplus in 1956 has been reduced to a very small amount indeed. I would also draw attention to the fact that estimated expenditure is now higher than it has ever been before. All this estimated expenditure will have to be met sooner or later. I do think, however, on the basis of experience of previous years, that there will be savings on personal emoluments and there may perhaps be small savings on Other Charges Annually Recurrent and there certainly will be a small number of revotes in Other Charges Special Expenditure. In these circumstances, I think that something of the order of $17 to $18 million of the estimated deficit of $37 million will be underspent but there will remain the hard core of something of the order of $18 million to be met by increased taxation. Other Members have stressed the necessity for economies in Government expenditure. I must emphasise that it is the intention of Government to practise stringent economy and to effect savings wherever they can be made. This process has been started and is continuing. The greatest possible control was exercised at the time of the preparation of the Budget, and the expenditure of Government departments has been reduced to a minimum. I think hon. Members will have noted from the Schedules which have been presented this year that the amount of applications for supplementary votes has been very considerably reduced this year by comparison with other years. Hon. Members will also note in the Estimates that in the case of Other Charges Annually Recurrent, apart from the very substantial increase in education and in pensions, the increase in the estimated expenditure of other departments is comparatively small. Again, Special Expenditure has been drastically reduced. Attention has been drawn by Members of the Opposition to the fact that personal emoluments have increased by $13 million in the coming year. This is not surprising, Sir. The medical and health and education services are expanding very rapidly indeed and, as will be seen from the list of new appointments given in the memorandum which accompanied the Estimates, over 70 per cent of the new appointments are in the Medical or Education Departments. In the case of all other departments, new posts have been reduced to an absolute minimum and have only been allowed where they are required for the efficient discharge of Government business or where they will result in an increase of revenue. Attention has also been drawn to the very high percentage which personal emoluments bear to other Government expenditure. I myself do not find this very surprising. Government does provide services for the public and services can only be provided by servants. With regard to taxation, Sir, my colleague the Chief Minister has explained the circumstances in which the personal reliefs were restored to the previous level. I will not touch upon the matter further except to say that - I speak as an official rather than as a Minister - at the present time, 19,000 people in Singapore out of a total of 1.2 million pay income tax and this position cannot be expected to last for very long. More people will have to be made subject to tax and personal allowances will have to be reduced. Hon. Members on the other side of the House have suggested that the raising of the rate of tax on the first two slabs of taxable income will cause hardship: in short, that the raising of the rate of tax from three per cent on the first slab of taxable income, and four per cent on the second slab to five per cent will cause hardship. This, Sir, I cannot believe, and I should like to take this opportunity to quote figures to show the increase in tax resulting from these changes. I speak now, Sir, of chargeable income, that is, the amount of income which is subject to tax after all allowances have been subtracted. On a chargeable income of $200, the old rate of tax was $6 and the new rate of tax is $10. Therefore, an individual who has an income of $3,200 will pay $10 instead of $6. On a chargeable income of $500, the old rate of tax was $15, and the new rate of tax will be $25. On a chargeable income of $700, the old rate of tax was $23 and the new rate of tax is $35. On a chargeable income of $1,000, the old rate of tax was $35 and the new rate of tax is $50. Thereafter, right up the scale, the result of these changes of rates on the first two slabs of taxable income is $15. I cannot believe that these increases will cause hardship to anybody. The Member for Tanglin (Mr Ede) asked what the yield from this particular change in the rate of tax would be. I regret that I have not got the figures with me but, speaking from memory, I think it will be of the order of $250,000 but that is subject to correction. It has been asked what justification there was for imposing this rate of tax which might cause hardship when the yield was so low. I did draw attention in my Budget speech to the fact that the low rate of tax at the bottom of the scale was perhaps uneconomic. This increase in the rate may render it economic. I think that the amendments to the rates of tax on the higher groups of chargeable income have the general support of the House and I agree that, without causing hardship, these rates could very well be increased, and I hope that both Governments will, in the future, see their way to increase the rates. At the same time, in all fairness to the taxpayers in the higher income groups, I should point out that on the basis of 1955 figures, 19,000 taxpayers in Singapore paid $22 million worth of tax. There are, out of these 19,000 taxpayers, approximately 1,200 people who have chargeable income of $30,000 or more, that is, six per cent of all taxpayers. This six per cent paid almost $16 million or 68 per cent of the tax coming from individuals. So I think hon. Members will agree that, while the rate of tax on these incomes might be increased, these taxpayers do already make a not unsubstantial contribution to the welfare of Singapore. With regard to company tax, as my friend and colleague the Chief Minister said, it is a pan-Malayan matter and the desirability or otherwise of increasing the rate of company tax was discussed at great length with our colleagues in Kuala Lumpur, and the Members of both Governments came to the conclusion that it would be inappropriate at the present time to increase the rate of company tax. The reason for this decision I gave in my Budget speech. My friend the Member for Cairnhill (Mr Marshall) asked whether the question of excess profits tax had been considered and I can assure him that this question and other similar proposals such as surtax, were considered but it was decided that it would not be appropriate at the present time to impose such taxes. Passing to the question of tobacco, hon. Members are now aware that the rate of tax on what I call the Rhodesian type tobacco imported for the manufacture of local machine made cigarettes has been reduced to pre-Budget levels. I should also draw the attention of hon. Members to the fact that, as a result of representations from the local manufacturers of cigars and cheroots, the rate of tax on leaf tobacco will be restored in the near future to pre-Budget levels. My friend and colleague the Chief Minister has explained that we did consider the question of tax on a sliding scale on motorcars but in the end decided that a flat rate would be better. I do not think that there are many further points that I should touch on, Sir. The question of the luxury tax will be debated fully in the Second Reading of the Bill tomorrow. I would however like to take this opportunity to say that the Government is fully seized of the necessity for preserving the entrepot trade and doing nothing which will jeopardise that trade and, at the same time, jeopardise the prosperity of Singapore. The Member for Tanglin (Mr Ede) suggested that, before we increase rates of income tax, it would be better to stop evasion of tax at present rates. He questioned whether the team of investigators which had been built up had achieved the objects which were intended. The question of examination and investigation of evasion started seriously in the middle of 1954 and I am sure hon. Members will be gratified to know that the investigation team, starting off as one man with subordinate assistants and increasing in 1955 to two men and this year to three men, has achieved the collection of approximately $5 million worth of tax which would otherwise have been lost. My friend the Member for Cairnhill (Mr Marshall) questioned the desirability of charging long-term loans to the Singapore Improvement Trust and other bodies to expenditure. The reasons why we propose to follow this course were given in my Budget speech and I do not think that I need repeat them. Hon. Members, of course, are aware that although these loans are withdrawn from the Statement of Assets and Liabilities, they appear in Appendix F of the Estimates. The Member for Cairnhill suggested, however, that a note might be made at the foot of the Statement of Assets and Liabilities drawing attention to the fact that these loans were shown in another place in the Estimates and I must say that that was my original intention. I regret that this note was not made in the copy of the draft Estimates now before you but it will be made in the final copy. The Member for Tanglin (Mr Ede) asked certain questions about the Central Provident Fund and I suggest that he direct his enquiries to the Chairman of the Provident Fund Board. The Provident Fund Board is a statutory corporation which is entirely independent of Government. At the same time, however, I must say that the Board has contributed largely to local loans. One Member, Sir, I think it was the Member for Serangoon (Mr Lim Choon Mong), made reference to renting S.I.T. flats at $100 a month. I should like to make it clear that out of the 11,000 flats owned by the S.I.T., approximately 300 bear rents of over $90. That, Sir, concludes the remarks that I wish to make on today's debate and I now beg to move the Second Reading of the Bill. Question put.

Division. Sir.

Clear the lobbies. The House divided: Ayes. 17; Noes, 10; Abstentions, Nil. Ayes. Noes. Ahmad Hamid Bin Haji Jumat. Ahmad Bin Ibrahim. Braga, A. J. Ede, John. Butterfield, C. H. Goh Chew Chua. Chew Swee Kee. Goh Tong Liang. Goode, W. A. C. Jumabhoy, R. Hart, T. M. Lee Choon Eng. Jumabhoy, J. M. Lim Choon Mong. Lim Cher Kheng. Lim Koon Teck. Lim, R. C. H. Seah Peng Chuan. Lim Yew Hock. Tan, William. Mak Pak Shee. Marshall, D. S. Nair, M. P. D. Sutherland, G. A. P. Abstentions Tan Theng Chiang. Nil. Thomas, Francis. Wong Foo Nam. Absent Lazarous, A. R. Lee Kuan Yew. Lim Ching Siong. Mohd. Sidik Bin Haji Abdul Hamid. Ong Piah Teng. Bill accordingly read a Second time

Committee of Supply, what day?

Wednesday, the 21st , Sir.

Is the Government allotting five days for the Committee of Supply?

We are allotting five days, Sir.

In accordance with Standing Order 69(4) , I have allotted the time - on the basis that there will be five allotted days - to be given for each head of expenditure in the Schedules to the Bill and for the clauses of the Bill. These will be circularised and will also appear in the Official Report. In allotting the time I have, of course, taken into consideration the indications given to me by Members at the conference of the 16th of November. The time available, however, will not be sufficient to meet in full the requirements of Honourable Members. I have had, therefore, to curtail such requirements and consequently Honourable Members will, no doubt, be as brief as possible in their speeches. Following are the times allotted - FIRST AND SECOND SCHEDULE(Cols 0740-0742)

Mr Speaker adjourned the Assembly without Question put, pursuant to teh Standing Order. Adjourned accordingly at forty-two minutes past Five o'clock p.m.