Hansard, 1960-12-08

The following Members have, under the provisions of subsection (2) (g) of Section 42 of the Singapore (Constitution) Order in Council, 1958, obtained from the Speaker, permission to be or to remain absent from sittings of the Assembly:- Inche Ahmad Bin Ibrahim (Sembawang), Minister for Health - from 8th to 16th December, 1960. Mr Lee Khoon Choy (Bukit Panjang) Parliamentary Secretary to the Minister for Culture and Government Whip - from 10th to 23rd December, 1960.

I have received information from His Excellency the Yang di-Pertuan Negara that the following Bills were assented to by His Excellency on the 5th day of December, 1960:-

In accordance with paragraph (6) of Standing Order No. 86 and paragraph (5) of Standing Order No. 87, I have for both the Main Estimates and the Development Estimates fixed the times on each allotted day at which consideration of the heads of expenditure in respect of which amendments stand on the Order Paper shall, if not previously disposed of, be concluded. Those times have been circulated to Honourable Members and will appear in the Official Report*. * Appendix, cols. 205-10. MAIN ESTIMATES AND DEVELOPMENT ESTIMATES, 1961 (Cols 0205-0210)

"for making provision for estimated financial requirements for expenditure to be paid out of the Consolidated Fund for the year 1961", presented by the Minister for Finance (Dr Goh Keng Swee); read the First time, to be read a Second time on Thursday, 29th December, 1960, and to be printed.

Order read for resumption of debate on Question [29th November, 1960], "That the Assembly approves the financial policy of the Government for the year 1961." Question again proposed. 2.33 p.m.

(In Mandarin): Mr Speaker, Sir, on behalf of the electorate of Upper Serangoon constituency, I support the motion of the Minister for Finance which reads, "That the Assembly approves the financial policy of the Government for the year 1961." The long Budget Statement delivered by the Minister for Finance in this House on 29th November, 1960, gave a penetrating and objective analysis of the financial and economic situation confronting the self-governing State at present and in the years ahead. In the colonial era and the era of the Lim Yew Hock Government, there has never been such a Minister for Finance who could have given such a comprehensive and substantial analysis of the financial and economic situation confronting the people of Singapore. From the economic point of view, had the Minister for Finance given us in his Statement approximate figures of the profits derived locally by foreign enterprises in the past one year, and had he told us what percentage of their profits they were prepared to re-invest locally, then his speech would have been more complete, though perhaps we have no such need. But anyway, we must thank the Minister for Finance for his great effort in handling the finance and economy of Singapore in the past one year. He has pointed out to the people of Singapore the right way of overcoming the financial and economic difficulties through their own effort. The people can see, from his review of the conditions of economy and trade in our State this year, that in the 1½ years of office, the P.A.P. has not only brought about an unprecedented stable political situation but also a new situation of increased trade and expansion in production after a short period of economic standstill. Our Friends on the Opposition strongly put forth their propaganda that when the P.A.P. gained power, factories would be closed and trade would come to a standstill. This phenomenon has not come about at all. Of course, we have no reason at all to be too satisfied, because the increase in trade and the expansion in export still cannot raise the living standard of the workers and labourers. Our rapidly increasing population gives us many problems which are difficult to settle. However, I think it is necessary to emphasise the realistic policy adopted by the P.A.P. Government in dealing with the economic problem. The P.A.P. believe in a society where there is no exploitation. However, we will not be so blind as to enforce radical socialistic and economic measures, because this will unnecessarily upset the social and economic order or structure. According to the Budget Statement of the Minister for Finance, our industrialisation programme will be carried mainly through the system of private and free enterprise. Thus honest capitalists need not worry about their capital investments not being protected by political measures. The working classes of Singapore, as a whole, have fully understood the situation in Singapore and have expressed their tolerance and wisdom in their struggle for better living conditions. During the past year, without their co-operation, the manufacturing industries and trade could not have expanded. Generally speaking, the working classes are not to be blamed for industrial unrest under the free enterprise system, except a few of them. In my opinion, so long as the capitalists and employers give their employees reasonable pay and reasonable working conditions, the workers of Singapore will shoulder their responsibilities to proceed with their production work for the sake of the State's prosperity. In the debates today and the coming days, our friends on the Opposition will certainly scratch their heads to think out some minor points in order to attack the Government, so as to pretend that they are the champions who fight for the welfare of the people. I maintain that they are all short-sighted people. No matter how or what they say, even when their lips become dry and their tongues get parched, they will not be able to show their talents in order to convince the people. Surely they will exaggerate and attack the Government, saying that it has given the people a burden to shoulder in respect of the tax proposals put forth by the Government. But, in fact, the Minister for Finance has already pointed out that in the eight new taxes of $10½ million, only $750,000 will be directly derived from bachelors whose income is less than $310 per month, or from those families whose income is less than $500 per month. What is more important is that all the revenue from these new taxes will be completely spent on the social welfare of the people as well as on the economic development. Mr Speaker, Sir, while reviewing the financial conditions of our State, I think it is necessary to comment on several points. Firstly, at present, the two countries - the Federation of Malaya and Indonesia, which are inseparable as far as our State's economy is concerned - are pressing ahead along their own courses they have chosen. It is not an easy task to maintain and promote efficiency in the co-operative offices in these territories under these complex circumstances. The efforts put forth by our Minister for Finance in this respect deserve our appreciation. Secondly, up to the present moment, capitalist countries have not given us any positive and practical assistance. In the apportionment of finances for our future development plan, our Minister for Finance has said that he has no undue hope for foreign finances. This is very proper and correct. Thirdly, the expenditure of the various departments in 1960 is less than the estimated expenditure by $37 million. Naturally it is partly due to the savings in the administrative expenditure. On the other hand, it also shows that our State lacks highly skilled technical people. At present the Government has the responsibility of recruiting technically skilled people either from overseas or locally in order to fill these vacancies. By our long-term plan, those scholars at present studying abroad or in the local universities should try their best to equip themselves with knowledge and skill so that they may be able to shoulder the heavy task of improving the living of our people. Mr Speaker, Sir, I support the Government's financial policy. 2.48 p.m.

Mr Speaker, Sir, Government has presented us its Budget as a pattern of a fiscal policy; and it is a P.A.P. Government, as the Hon. the Minister for Finance repeatedly rammed down our throats at every turn of his speech. Not the Singapore Government, but the P.A.P. Government, and the P.A.P. Government is allegedly a Socialist Government. And what have they produced, Mr Speaker, Sir? If this is a socialist Budget, all I can say is: I cannot see the sheep for the wolf's clothing. What I see is just the wolf - a Budget to tax the poor and some of the rich, a Budget that has no provision whatsoever for the unemployed who are tragically increasing in numbers, a Budget that has no provision whatsoever for the under-employed, a Budget that does not even take into consideration the retired worker who at the end of a long and useful life finds himself no longer able to work and, like a squashed orange, is thrown into the gutter. Not one word of old age pension, or unemployment insurance in this P.A.P. Budget. "Asians", says the Hon, the Finance Minister, "no longer accept poverty as the natural order of human society." That is in Hansard, Vol. 14, No. 1, col. 12, paragraph 2, Mr Speaker. Must Singapore accept it? The Hon. the Minister for Finance says in col. 40, paragraph 1: `...there is every hope that if we increase the inducements and facilities for private capital investment, we have every chance to achieve a sufficiently high rate of growth to provide work for our growing population.' Let us examine that. Despite what he calls "improved conditions" in trade and industry and the impetus that he alleges the P.A.P. has given, the figures he indicates for the last 18 months show employment for only 1,049 workers in new small industries and the total anticipated employment, if all the `pie-in-the-sky' projects are achieved at a cost of over $100 million, is employment for 2,500 workers, and if we add to these projects still vaguer possibilities of all the enquiries and assume that each and every one of them eventuates, the total number of employment on these would be 2,000 - 1,049 already employed, and a probability that 2,500 may be employed in the years to come. How does the Minister equate these facts with his assertion that the rate of our industrial growth will meet the needs of our growing population?

I never said that!

`a sufficiently high rate of growth to provide work for our growing population.' I am not suggesting that industrialisation is not valuable. It is, Mr, Speaker, Sir. But it is important that the Government should recognise and that the people should know that the maximum possible industrialisation in the most favourable circumstances cannot employ more than 10 per cent of our unemployed. Let us not increase the tragedy of those who suffer idleness at present through no fault of their own, by pretending that they will get employment, and deluding them into hopes that can never be achieved. We ought at least to tell the truth to this tragic sector of our population even if we cannot help them. The Hon. the Minister for Finance has also spoken with roseate optimism about the future of our trade and commerce. There is not one single businessman I have spoken to who does not state categorically that our economy is sagging. Nothing dramatic - just sinking quietly like a ship in a calm sea; and yet it has been the unusual good fortune of this P.A.P. Government to have a tremendous boom in the Federation which would normally have meant a boom of considerable prosperity in Singapore, but which has only succeeded in cushioning the depression which has set in with the advent of the P.A.P. Government, a depression which progressively saps our economic structure. It is a pity there is no businessman in the P.A.P. to tell them the facts of life. Figures are helpful, but statements like "There is a solid and substantial revival of the economy this year" based on selected figures, are wholly misleading and unfair to the people, Mr Speaker, Sir.

Three!

Order. If the Hon, the Minister for Finance wishes to elucidate, he might try; but he should not interject from his seat.

There is one small item I must touch upon and that is the Workers' Brigade.

Works Brigade!

Order.

Sir, on a point of clarification.

If the Member will give way.

Very well.

I think it would help considerably all round in our appreciation of what the Member for Joo Chiat hopes to contribute to the economic thinking of this country, if we refer to things by the names they are referred to in the Budget and in the newspapers.

I did not quite catch the point raised.

Sir, in the Estimates, in the Budget speech and in the newspapers, there are references made to the Works Brigade. If we are to coin new nomenclatures for the same or different things, then perhaps we might get ourselves lost well before the Member for Joo Chiat is finished in the next few minutes.

Mr Speaker, I do not wish to go down to the personal level; but names, names and names. Is that all what the Prime Minister is capable of saying? What does it matter whether it is the Works Brigade or the Workers' Brigade? What is in a name? It is really the merits that count. The P.A.P. Government has changed so many names in this country that we are apt to get a headache. I feel like calling some names too, but I think I had better not digress. However, it seems to me, Sir, that the establishment of the Works Brigade and the work it is doing negates the basic principles of trade unionism. The Works Brigade is cheap labour at below the market rates for Government projects. In the long run, this is an unhealthy approach to the needs of the country and one to which the trade unions of the country should awaken.

On a point of information.

No, Sir, I do not wish any more interruptions. It is the duty of Government, as an employer, not to undermine the trade union movement by a reserve of cheap labour, but to pay in full for the services it receives. One other matter on which I must touch is the question of the treatment of the civil servants, and the tender generosity of the Government in stating that they are willing to have negotiations for partial restoration of variable allowances; or is "restitution" the word used instead of "restoration"? I cannot remember. It is a tragic farce that Government should offer to give the civil servants a very small percentage of what is their rightful due with one hand, and then take it away in their increased taxation with the other. And what is more deplorable, Mr Speaker, Sir, is that there is in existence a freely negotiated agreement between the Government and the Civil Service for arbitration on pay and conditions of service, and the civil servants have pleaded earnestly for an Arbitration Tribunal to be appointed to consider their legitimate complaints about the manner of the reduction of variable allowances and about the need for such reduction in the light of the Surplus Budgets of the P.A.P. Government. Despite the formal agreement freely negotiated, the Government refuse to arbitrate because they state that this is a matter of policy. I am reminded of the story of the Chinese cook in a Muslim household, who was in no uncertain terms told that pork should never be brought to the house. One day he was found eating pork. When asked for an explanation, he said, "This no pork; this fish. I put pork in water. I say, `Pork, pork, you no pork. You fish." And so we have government as the major employer encouraging-

On a point of clarification?

On a point of clarification.

I am very confused, Sir. [Laughter]

Order. Please continue.

And so we have Government as the major employer encouraging employers, by their own conduct, to deny solemn agreements freely entered into. [Laughter.] Laughter or no laughter, that is what is happening. In the case of the Civil Service the sum involved is not very great, but the number of people involved are a large number of loyal servants of the country. Not only they, but their dependants, and the trade which their expenditure brings. It is a shameful thing that Singapore should dishonour its obligations to its civil servants and pretend generosity in restoring them just enough to pay their own income tax increases. On Indonesia, Mr Speaker, Sir, the Hon. the Finance Minister's remarks about our trade with Indonesia highlight what has been known by most of us, and that is that the Prime Minister's mission to Indonesia has been a complete failure despite the pink smoke screen emanating from the Ministry of Culture. An hon. Member: Why pink?

This failure emphasises the need for a well-trained experienced Singapore Trade Commission permanently established in Djakarta. I therefore welcome the statement of the Hon. the Minister for Finance that a Trade and Cultural Commission will be established in Djakarta. Not only in Djakarta, Mr Speaker, Sir, but also I think in other neighbouring territories, and as far as China, there is an imperative need for us to establish permanent Trade Commissions. One final matter, Mr Speaker, Sir. The newspapers have given the impression that the Government has promised to stand-still taxation for three years. My understanding of the Finance Minister's speech is that that is only in respect of Property Tax. An hon. Member: You read the wrong newspaper!

There is no promise at all in respect of income tax or any of the other taxes. Will the Hon. the Minister for Finance clarify? Now, Sir, the business tax. I would like most emphatically and most forcibly to draw the attention of the Hon, the Minister for Finance to this point, and that is, despite what he might say about the economic conditions of this country, those of us who mix with business people in this country know that many a business is being run at a loss. To put a business tax of $1,000 on a big limited company would not hurt that company. But unfortunately, a tax of $750 on the smaller companies will hurt them tremendously and will cause them great hardship, because most of them are now being run at a toss. I hope the Finance Minister will not laugh that one off. In conclusion, let me say that this Budget is not a Socialist Budget, nor is it a Budget that adequately meets the realities of today and the economic problems of tomorrow of Singapore. I shall vote against the motion. 3.06 p.m.

Mr Speaker, Sir, the Minister for Finance has placed before us facts and figures to prove his contention that everything is plain sailing and that there is nothing to worry about. Yet, Sir, by his own calculation, he says that about $30 million will not be spent from this year's Budget. This in effect means, again in the Minister's own words, that `there will be less rural roads and bridges this year, less doctors and specialists, less maintenance work by P.W.D., fewer scholarships, fewer fellowships, fewer police constables, fewer teachers and fewer technicians.' The people of Singapore, Sir, will have everything less in 1960. And yet the Minister for Finance tells us in effect that we have never had it so good. I say, Sir, that we have never had it so bad, what with the increasing number of unemployed and more to feed on less income per head.

Stop producing!

Mr Speaker, Sir, admittedly there has been an increase in the flow of trade, but this seeming prosperity is not the result of Government's initiative but an act of God. The price of rubber, Sir, has been good, and the increased output of this commodity in the Federation of Malaya and its export through the port of Singapore has, again as the Minister has pointed out, directly benefited the State. In other words, Sir, we - I mean the people of Singapore - live on the exertions and goodwill of our neighbours. This state of affairs cannot continue, and will not continue for long. This House is no doubt aware that the Federation Government is making every effort to expand the port facilities at Port Swettenham and Sebarang Prai; and then there is even talk of exploiting the harbour at Port Dickson, not to mention the proposed international airport at Kuala Lumpur. Nothing, Sir, can induce the Federation Government to stop proceeding with these schemes. At the same time, they are in the process of establishing a rubber and stock exchange market in the Federal capital. All this hive of activity in the Federation points to one fact. Very soon, and probably during the life-time of this Government, a large portion of our entrepot trade will cease to exist. Mr Speaker, Sir, the other support of our economic life, Indonesia, has already shown a tendency to crack. The Minister for Finance, in his Budget speech, and here, Sir, I quote from Hansard, Vol. 14, No. I col. 14, which says: `Many of the problems arising in our trade with Indonesia are long standing and difficult. While we are a free trade economy with controls reduced to the barest minimum, the Indonesians prefer a policy of "guided economy". This, in effect, means the imposition of controls over all major aspects of trade and production. What we have to do is to meet the legitimate requirements of Indonesia's guided economy in such a way as not to destroy our entrepot trade.' That was what the Minister for Finance said in his Budget speech. Whilst on the one hand we must give credit to the Prime Minister for his efforts to improve friendly, relations with Indonesia - and I admit he has to some extent been successful - the economic relations between the two countries have not shown any visible signs of improvement. The key to our economic survival is our entrepot trade. This is not the first time that the Government of Singapore has sent missions across the Java sea. During the David Marshall regime, a similar Ministerial mission spent some time in Djakarta followed later by two fact-finding missions from Indonesia. Though there was some slight improvement in relations between the two countries, nothing came out of the whole affair. In fact, Sir, at that time, there was no guided democracy and no guided economy to contend with. As I see it. Sir, the basic fact then was, as it is now, the desire of the Indonesian Government to eliminate what it calls the smuggling trade. Singapore, being a free port, places no insurmountable restrictions on its imports, and hence does not in the nature of things control the commodities that enter its waters nor enquire into the sources of the imported goods. In other words, Sir, not all goods imported into the State of Singapore from Indonesia have gone through the proper controlling authorities at the port of loading. Hence what we call free trade, the Indonesians call smuggling. What the Indonesian Government wanted Singapore to do was to be its policeman. And this situation Singapore was unwilling to accept. Not only would it create a bad precedent, Sir, but it would also upset the whole structure of our free port status. The position today is still the same, guided economy or not. To the Indonesians, it is not only a matter of national pride but also a matter of economic survival. If they can manage to seal this leak and a few others in Borneo and Sarawak, they feel they can certainly overcome the periodic economic stresses that seem to confront them from time to time. My sympathies, Sir, are with them. Mr Speaker, Sir, from this, it could be seen that the economic survival of Singapore depends largely on the goodwill and tolerance of our two great neighbours, Indonesia and the Federation of Malaya. How long we can depend on this goodwill, again only the gods can tell. It is therefore the duty of the Government of Singapore, whether it be the P.A.P. Government or any other, to provide alternative sources of livelihood for its people before disaster overtakes them. The Government's Five-Year Plan is an admirable paper, but what are the basic facts? The industries that are envisaged - flour milling, textile weaving, steel milling and a host of other manufacturing projects - will no doubt provide employment to many. But, Sir, having produced such goods, the job is to sell them. Unless we can produce cheaply and sell competitively I see no hope for an industrialised Singapore, however hard Government may try to induce investors to set up industries. We are not the only country in Asia which is thinking in terms of industrialisation. And we are not in the fortunate position which some of these countries are in, where they have a huge local population who can easily consume the products that their industries produce without bothering about exports. As I see it, Sir, Government's industrialisation policy, among other things, faces two uncompromising barriers. The first is the lack of a ready and large enough home market to act as a cushion and to make industry worthwhile; and, secondly, the tariff barriers that have been and will ultimately be put up by other producing countries, as has already happened in Indonesia and only a few days ago in the Federation of Malaya. Both these two countries which are our logical buyers and consumers have their own Five-Year Plans and industrial policies; hence we cannot place any confidence in these markets. On the other hand, Sir, we cannot hope to follow the lead taken by Hongkong, where primarily because of its very, very cheap labour it has been able to capture some of the world's markets. It is obvious, therefore, that by the time our industries go into full gear most of the possible markets now available to us will have already been taken up by the local industries in the territories concerned, or will have been checked one way or another by tariff barriers. Sir, I do not dare to predict that Government's industrial plan will end in failure. But I do say this - that so long as our economy is tied in the way it is to the goodwill of our neighbours, the way ahead is indeed bleak and dark. I therefore hope, Sir, that while implementing its industrial plan, Government would at the same time make greater efforts to convince our neighbours, particularly the Federation of Malaya, that they need us as much as we need them. The only way to do this is to put the general political atmosphere in its proper perspective. Our Prime Minister here, Sir, proclaims that his Government is a Leftist Socialist Government. Across the Straits of Johore, we find the Tunku vociferously repeating that his is a Rightist people's government. Whilst, on the one hand, the people of both these territories tend to regard themselves as Malayans, the Government of both territories are poles apart. Somewhere, Sir, there must be a link, a link that would strike the right note and bring about a common understanding of each other's problems. For only then can there be mutual trust and mutual respect, the foundations upon which to build a prosperous Singapore. Sir, while we are on the subject of our relations with the Federation, I am somewhat perturbed to note that it is the intention of the Government eventually to have a trade representative in Kuala Lumpur. I wonder whether this is a wise move. If the object is to have closer relations with the Federation in the economic field, then I think it is the wrong way to go about it. Kuala Lumpur is only 200 miles away, a matter of only an hour's flight from Singapore. Nothing would jeopardize the relations between these two countries more than to have a representative in Kuala Lumpur, a fact which would only tend to emphasise the distinction rather than the common interests of both. Sir, I would advise Government to think again on this matter. 3.21 p.m.

Mr Speaker, Sir, last year we humbly and earnestly warned the Government that their policy of the big knife and the big axe-

The broad axe.

- and the broad axe was being carried out too far; that the drastic cut in the variable allowances of Government servants was a hasty and premature step and might prove unnecessary because the threatened deficit might turn out to be a surplus. As usual, Sir, the arguments of the Opposition were met by a barrage of ridicule sneers and laughter. We also warned the Government that the drastic reduction in the spending power of thousands of Government employees to the tune of millions of dollars would have a chain reaction and that there would be repercussions on the economy of the country. Sir, after 14 years, the truth is out. Our forecasts were correct. The year 1959 ended not with a deficit but with a surplus of $9 million, according to the speech of the Yang di-Pertuan Negara, and the year 1960 is likely to end with a deficit of $37 million.

A surplus!

With a surplus of $37 million. Ordinarily, Sir, surpluses should be welcomed. But these surpluses as a result of drastic under-expenditure and drastic pay cuts have had very adverse effects on the country's economy. The result is that there has been a general tightening up of the people's purse strings. People who have money are reluctant to spend, and those who would like to spend have not got the money or have not got jobs' whereby they can earn money. Sir, the Finance Minister has mentioned two aspects which are considered remarkable. In the light of what I have said, Sir, the explanation is quite simple. May I refer to Hansard, 29th November, 1960, Vol. 14, No. 1, col. 18 which reads: `All in all, the indications are that there was a solid and substantial revival of the economy this year. What is remarkable in this economic revival is that the expansion in trade and production did not bring about any inflationary process. The currency in circulation for the Malayan dollar area remained practically stationary, being $1,162 million in January and $1,166 million in September.'. Well, Sir, we know now why. Because there was not much money in circulation owing to the drastic cut in the millions that could have been spent and that could have started a chain reaction. `Prices of consumer goods did not rise. On the contrary, -'

On a point of information, Sir, -

Order. If the Member will not give way, the point of information cannot be raised.

Sir, the Hon. the Prime Minister will have his chance after my speech.

I will have forgotten what he said.

`Prices of consumer goods did not rise. On the contrary, the official index of retail prices showed a decline of 5.4 points from 317.2 in January to 311.8 in September.'. Then, Sir, further down the column the Finance Minister said: `Taking into account all items of consumer goods in the course of the year, there has been a significant fall in prices. There are very few instances in contemporary economic history where economic expansion and falling prices occurred simultaneously.'. Naturally, Sir, because in most countries there was not this- An hon. Member: Pay cut!

- counter action on the part of the Government to bring about not more prosperity, but a decline in the prosperity of the country. The fact that the Indonesian trade declined was another sign. I shall later on deal with what I consider to be the real reason for the surpluses. Sir, when the Government imposed that pay cut unilaterally-

You must have suffered quite a lot!

-it was assumed that there would be a huge deficit, and therefore the Government had to take drastic measures. The Minister for Finance, in fact, said that unless he took such measures, the boat might sink. Dr Goh Keng Swee rose -

On a point of order?

Yes. Sir, I think I am right in assuming that the hon. Member was in receipt of a variable allowance which had been reduced. Is it in order for a Member to speak on a subject in which he has an interest financially?

I think the Minister for Finance with that sparkle in his eyes is probably raising this point of order with his tongue in his cheek, because he does know that this is a matter of general policy, and any Member can speak on any matter of general policy, whether he is personally interested or not. Mr Thio.

I think I did mention it, but if I did not, I will now say that I did mention to a few Assemblymen on the Government side, that if ever the Government did make restitution and I stood to benefit by the restitution, all that was due to me would be given to the unemployed. An hon. Member: Works Brigade!

Sir, am I

Order. Is it a point of order?

No, Sir.

Well, will the Prime Minister take his seat? The Prime Minister resumed his seat.

If the Member will not give way, no other Member can stand.

I am glad the Government has begun to show a change of heart by wanting the Staff Side to reopen negotiations, but, Sir, there is an important principle involved. If the cut in the variable allowances was made unilaterally, on the basis of a wrong premise that there would be a huge deficit, then whatever the Government gained thereby should belong to the employees. If there should be negotiations for a partial restoration of that cut, then it could be made hereafter but it could not have retrospective effect. What was cut off was cut off on the assumption that the Government was facing a huge deficit. That deficit did not materialise because, as a result of under-expenditure, there was no deficit. Therefore, Sir, part of that surplus belonged to the Government employees. Sir, it is time for the Government to show by their actions that they are a model employer. If an employer, on a wrong premise, retained part of his employee's pay and in due course he finds out that he had made a mistake, then I am sure, Sir, that the Government would demand that that employer should return all the money that had been wrongly retained. An hon. Member: Did we make a mistake?

Sir, this is a case of restitution and not restoration. However, it is possible that in the process of negotiations, the Government might be able to persuade the Staff Side, out of loyalty to the State or out of sympathy for the unemployed, to make a contribution to an unemployment fund; but I am sure that morally the civil servants are entitled to that sum of money which has been retained on wrong premises. Sir, in the first quarter of his Budget Statement, the Minister for Finance launched out on what he described as "a dissertation on basic principles". There is much in that statement of principles with which we agree, but now and then he varied cleverly, interposing a sparkling claim which might impress foreign readers or passing tourists but which is startling and in a way surprising to local people with local knowledge. Such claims cannot be allowed to pass unchallenged. In column 10 of the Budget Statement, at paragraph 2, the Minister for Finance said: `This is the ultimate test. For a government is judged not so much by its expressions of good intentions but by its concrete achievements in the way of economic prosperity and public welfare.' Up to this point, we agree, Sir. Then he went on to say: `By this standard the people of Singapore have done well.' "Have done well", Sir? Ask the people who put them into power - the hawkers, the trisha-pullers, the taxi-drivers: has Singapore done well? They will say that the people of Singapore have done badly - very badly! If the Government had said that some of the people of Singapore have done well, we could have accepted that. The people would have accepted that without any protest. But to say that the people of Singapore have done well throughout last year, Sir - that is like asking people to believe what they have not experienced. Sir, people who have eyes to see and ears to hear can see and hear for themselves what has happened. The people who have benefited are a small section of the community - the merchants who have trading interests with the Federation. The merchants and companies who own tin mines and rubber estates or who own shares have benefited. The increases have only been increases through bank transfers, but the profits have not gone quickly to the employees and then on to the consumers. Therefore, there is not much money - more than what is usually circulated - to circulate. There is less spending power. With the population increasing, naturally there is less money per head to spend. Sir, those who have made money and who have really prospered have most probably salted it away somewhere - [Interruption] maybe to the Federation, Borneo or Sarawak - and they will not invest in Singapore until they see more signs to indicate that they can have confidence in the Government. One way in which the Government can show that they are able to keep their promises is for them as employers, -

Who is talking?

-to do what they expect other employers to do.

What is that?

Order. I think probably the Government Benchers are taking this debate a little too frivolously. I would suggest that there should be less interruptions from them.

Mr Speaker, Sir, we have noticed one regrettable thing on the Government side, and that is they seem to think they have a monopoly on human wisdom in Singapore.

We have not got a monopoly on stupidity!

Sir, when we make mistakes, it is only right that we should own up to them, because we can learn from them. And although the Government have not said so, there are now indications that they want to rectify some of their errors. The Prime Minister himself has expressed that sentiment in the past. Sir, the Government has inherited a great deal of prosperity from the past. They are going to benefit to the tune of $30 million through the hastened repayment of the loan to the Federation. We have no objection, Sir.

How can you?

Order.

Sir, the Minister for Finance is now trying to win back the confidence of local investors and foreign capital. We wish him success, Sir. But can the Government really succeed if with one hand they promise to give one thing, and with the other hand they cause the people's confidence to be shakened? To give one instance, Sir, there is in the trade unions, as we know, a struggle for control. The Government side know better than we, Sir, what forces are involved. But the general workers in Singapore are not interested in the political struggle in the trade unions. They are only interested in better wages and better living conditions, and if they could share in the prosperity of their employers, they would be glad to do so. They are not interested in the political struggle, except those who are interested in political power. Sir, if the trade unions in Singapore could be really set free, like the trade unions in the Federation, that would be a step towards industrial peace and stability. Sir, the Government have declared that they are partial to the workers. If they want stability, then they will have to be partial, fair or just to three sides: to the workers, to the employers and to the general public. Very often, the general public are left out from that picture. How can people believe that politics do not play an important part in trade unions and that politics do not have a final say in business if the Government still have political advisers? With political advisers advising Government Ministers and playing a very prominent part in trade unions, it must naturally be assumed that should there be any disagreement, then there is no chance for the business people to have justice on their side. So if the Government want to indicate that they are sincere in wanting to bring over foreign capital and in getting local people interested in investing money in local enterprises, then one way would be to abolish the posts of Political Secretaries. Sir, I notice that the Minister for Finance referred to Japan and West Germany as countries whose economic revival has been nothing short of miraculous. Sir, these countries are not controlled by extreme Left-wing groups. I am glad, Sir, that the Government say that free enterprise can play a great part in bringing prosperity to the country. We believe, Sir, that any industrial peace based on the ideology of a class war will never work. It is time that we think about the basis on which we want to have industrial peace and stability in this country. We should not set workers against employers nor employers against workers. We are against exploitation of the workers by employers. But the time has come when we cannot have political bosses also exploiting the workers for the sake of political power. Sir, the question of unemployment casts a shadow over the future of Singapore. The Government solution is through industrialisation at a terrific cost. We have been told that on an investment totalling $100 million there will be opportunities for employment for 2,500 people. At that rate, Sir, Government will need $800 million to provide employment for 20,000 workers, which may be the annual intake of labour into the labour market each year. Sir, I do not think we have the money for that.

On a point of clarification.

If the Member will give way.

Sir, he will have his chance later on. [Interruption].

Order.

Sir, local businessmen say that with free enterprise, they can do it on less money. On $15,000 or $10,000 - and not on $40,000 - they can provide work for one employee. Sir, industrialisation will succeed provided there is a market for the goods produced, and the market cannot be limited to Singapore alone. We have seen how, after the Government had made a move to protect the local manufacturers of soap, another move was made in the Federation which nullified the result of the Singapore move. Sir, it looks as if in spite of the Government's good intentions we are not sure of the success of the plans outlined by them. We believe that we must basically remove the fear and distrust which the Federation has towards us at this time, and the Singapore Government can play a great part in removing that fear and distrust. 3.44 p.m.

Mr Speaker, Sir, the taxation policy of this Government has been calculated to tax the people of Singapore for the benefit of foreign business. Since June 1959, this Government has introduced 12 new taxes. In the 1961 Budget these 12 new taxes in my estimation will yield approximately $45 million. Most of these millions will be squeezed, cent by cent, dollar by dollar, from the poor, from the wage earners, from the shopkeepers, from the taxi-drivers and the hawkers, from the working population, from the small private companies run by local merchants. An estimated $100,000 out of the $45 million is all the contribution this Government has asked from the big European firms which control our economy and make most of the profits. These European firms in my opinion make at least half of the profits of Singapore, and are asked by this "Socialist" Government to contribute less than 1 per cent of the $45 million; to be exact .002 per cent. Here are the facts. The 12 new taxes introduced by this so-called socialist Government and their respective revenue in 1961 are estimated as follows: Million $ 1 Tax on local made 8.0 cigarettes 2 Tax on petrol 6.0 On these two taxes, when they were introduced in September 1959, it was expected that they would yield about $14 million. The revenue in 1961 could be less because of the fall in consumption due to increase in prices of the two commodities. 3 Pay cuts of civil 12.0 servants 4 Tax on lotteries 3.5 5 Decrease in the rates of 4.0 personal allowance on income tax and increase in the maximum rate of tax on personal income 6 Business 3.5 registration tax 7 Stamp duty on import and 0.5 export declarations 8 Increased assessment on 0.4 rubber estates 9 Increased rates on private 0.1 lotteries 10 Professions tax 1.0 11 Air travel tax 1.0 12 Property tax 1.0 (estimated additional revenue from, increased assessment in rural areas) in my estimation is ----- Total $45.5 ----- Mr Speaker, Sir, what are the incidences of these new taxes? Who are the people affected? Are these taxes just and equitable? Are they based on the principle of "ability to pay", a principle recognised and adopted even by openly confessed Right-wing capitalist Governments? And we ask ourselves: is this a Government working for the interests of the people? Sir, what is the real nature of these new taxes? I shall describe them briefly. First, tax on local made cigarettes. This tax was introduced on 17th September, 1959, after months of disagreement between the Minister for Finance and myself. This tax has two effects. It is a tax on the poor. The worker and the wage earner are those who smoke local-made cigarettes. This tax also suppressed local cigarette manufacturers for the benefit of the big American and British cigarette monopolies. A worker or a wage earner who smokes, say, 20 cigarettes a day will have to pay an additional tax of $6 a month. I have correspondence between the Minister for Finance and myself on this issue. Second, what is the impact and incidence of the petrol tax? Out of an estimated $6 million additional revenue a year from petrol tax, I estimated $2 million will come from taxi drivers, pirate taxis, lorry operators and fishermen; $2 million from wage earners, teachers and salesmen; $1½ million from shopkeepers, and less than $1½ million from those who can afford cars worth more than $12,000 each. The petrol tax is primarily a tax on taxi drivers, the white collar workers and the small shopkeepers. This tax will be an intolerable burden on taxi drivers. The plans we have finalised with the Taxi Drivers' Union to give coupons to the taxi drivers was vetoed. Mr Speaker, Sir, at the end of the sitting, I wish to put on record in this House a copy of the plan for a Petrol Coupon Scheme for taxi drivers. Third, we come to the lotteries tax. What is the incidence of the lotteries tax? How does it operate? The lotteries tax is a tax on the underprivileged sections of the population who hoped to change their fortunes, and have been encouraged by this so-called socialist Government to do so, especially the hawkers, taxi drivers, wage earners and all those in debt. Out of every dollar "invested" in lotteries, 30 per cent goes to the Government as tax. 40 per cent goes to the Singapore Turf Club and the horse owners, and 30 per cent goes back to the purchasers of lotteries as prizes. The lotteries tax introduced by this Government is to raise revenue from the poor and to benefit the European and Compradore controlled Singapore Turf Club and the millionaire horse owners, unlike the Federation Social Welfare lottery which is a tax on the poor for the benefit of the poor. Ours is not so. The peculiar characteristic of the lotteries tax is that, with increasing unemployment and bad business conditions, an increasing number of people who hardly earn enough to eat, the collection from the lotteries tax will increase. The Minister for Finance sounded very happy when he said this in his Budget Speech (col. 29): `As against an estimate of $4 million on taxes on totalisators and sweepstakes [in 1960], the actual collections for the first ten months amounted to $4.7 million and, it is anticipated that the original estimate will be exceeded by $1.2 million by the end of the year.' On the other hand, Mr Speaker, Sir, the Minister for Finance said: `Stamp duty was estimated at $3.8 million but there is likely to be a shortfall of $½ million.' Mr Speaker, Sir, this is a very great example of business conditions and the state of the economy of our country. This decrease in collections from stamp duty means that the volume of business and property transactions has decreased. More revenue from the lotteries tax than expected, less revenue from stamp duty than expected - nothing is a better indication that times are bad. But, Mr Speaker, Sir, to Mr Ah Q, however, this is "prosperity". Fourth, we come to the pay cuts. Ex-civil servants hate civil servants. Ex-professional men dislike professional men. Is it not true that the original plan hatched by ex-civil servants to tax former colleagues was even more severe? Not many days after the issue of the Hong Lim resolutions, the Prime Minister despatched his Political Secretary, Mr Jek Yuen Thong, to Cairnhill where civil servants were told that their pay cuts were the result of that scapegoat, Ong Eng Guan. I challenge the Minister for Finance, Mr Speaker, Sir, to tell the truth about the pay cuts and tell them what was his original plan. Was it not a fact that were it not for the Member for Hong Lim, much more pay would be cut, particularly those in the lower income groups?

Rubbish!

Order.

Produce Cabinet documents-

Liar!

Order! I think the Minister for Finance is guilty of an unparliamentary word. He ought to withdraw.

I withdraw it, Sir.

Mr Speaker, Sir, the Minister for Finance filed his original proposals which, after some weeks of "ding-dong", were reduced. Only 18 months in office, this Government, which once the people of Singapore had returned 43 out of 51 seats, has within such a short space of time lost all popular support. The worker and the farmer, the wage-earner and the intelligentsia, the shopkeeper and the hawker, have lost their confidence. Many of the 50-odd P.A.P. branches have now closed down and most of them have been deserted. For the benefit of the Member for Tanjong Pagar who does not know, what is going on in his Branch, they are playing cards most of the time.

Order. This Assembly Chamber is not aware of a Member for Tanjong Pagar. If the hon. Member means the Prime Minister, he ought to say "the Prime Minister".

Mr Speaker, Sir, I do not wish to repeat saying "the Tanjong Pagar Branch" twice; therefore, 71 mentioned "the Member for Tanjong Pagar". I withdraw and substitute "the Prime Minister". The Government is now turning to the civil servants for a last-ditch support, by promise of partial restoration of the pay cuts, to be carried through protracted negotiations. I remember in 1959 the Minister for Finance transferred Mr Rajendra, who works in the Telecommunications Department, from Hill Street to Jurong without my knowledge, when I was Minister in charge of the Telecommunications Department and was responsible for any breakdown in the service. Mr Speaker, Sir, I never did that to all those members of the Staff Unions in City Council times. The present political strategy of the Government is this. Hang a carrot in front of the civil servants, but let them bite it some time later, depending on the period of negotiations, which will be decided by the interplay of political forces. The Government will engage more expatriates; it is considered local engineers and architects cannot do the job. The Government will seek more funds from the United Kingdom and the United States - build and build, spend and spend, no matter whether such construction or such expenditure is to the interests of the people or not, for it can be left to posterity to pay the foreign debts. By 1962, anti-colonial slogans would be slowly but surely reintroduced. Eventually it hopes to spring a snap election before 1964, perhaps in 1963 if conditions are favourable. This is considered by the political strategists to be the only chance left to be returned a second time, and the civil servants would be given partial restoration of their pay cuts to make them play a more decisive role to save them. Mr Speaker, Sir, the legislation for snap elections was passed last year. The Press is now rigidly controlled. Special articles under pseudonyms supplied by Government regularly appear in the Chinese papers whenever there are hot political issues. The radio is fast becoming a Party radio; television will also become a Party television. Expensive pamphlets printed on gloss paper from public funds with high-sounding titles like "The Socialist Solution", "An Analysis of Current Political Forces in Singapore", and "Towards Socialism", Vol. 1, a Ministry of Culture Publication; 30,000 to 40,000 copies had been scattered and nobody wants to read them. It begins with the Prime Minister's speech made in this Assembly. These pamphlets with high-sounding titles but containing nothing concerning socialism, more will be printed and thrown around. And despite this rigid control of the Press, and the threats of laws like the Criminal Law (Temporary Provisions) Ordinance, in case some people who do not toe the Lee Kuan Yew line still start distributing pamphlets like the Member for Hong Lim, the Member for Aljunied and the Member for Punggol once used to do, there would be the latest amendment to the Undesirable Publications Ordinance on the 17th November, 1960, which would enable the Government to raid premises and impound such pamphlets. I knew on that day. Mr Speaker, Sir, but would all these suppressive measures work? Would all these gadgets ensure a return to power in 1964? The former Government also tried many gadgets. For instance, George Thomson went to New Zealand to study compulsory voting. But it did not succeed. Any government which works sincerely and honestly without resorting to electioneering and political gadgets will be returned. Mr Speaker, Sir, the taxes I have described just now, the cigarettes tax, petrol tax, lotteries tax and the pay cuts which were introduced in 1959 and 1960, would continue to be collected in 1961. We now come to the other eight new taxes. First of all, the income tax. Among the eight new taxes, the decrease in the rates for personal allowances is the most important. $4 million is expected from this new tax. This is a tax aimed mainly at the lower income groups, particularly the wage-earners and the shopkeepers. Due to the reduction of personal allowances, the middle class will also be slightly affected by having to pay higher rates. The increase of the maximum rate to 55 per cent on incomes above $100,000 a year is a propaganda eye-wash, to give people an impression that the 1961 change in the tax structure is directed not only towards the lower income groups. This 5 per cent increase on the over $100,000 income group attracts little revenue.

On a point of information. Mr Ong Eng Guan resumed his seat.

Mr Prime Minister.

Is the Member for Hong Lim having difficulty in reading the speech because of the lighting?

That matter has been raised as a point of information. I think the Prime Minister must know that no Member is supposed to read a speech in this House. The Prime Minister has not risen on a point of order.

Mr Speaker, Sir, I have spent nearly a week computing these figures, and I have no George Thomson drawing public pay doing computation work and writing speeches for me, as he is doing for the Prime Minister. This 5 per cent increase on those with more than $100,000 attracts little revenue. There are only 118 people in this income group as contained in the Income Tax 1958 Annual Report. The Federation is again as usual being used as a convenient excuse. For several years there have been differences between our respective tax laws, the tax base and the tax rates in the two territories. Very soon there are to be two different currencies, whether we like it or not. People are tired and do not believe in the Federation scapegoat for all the acts of commission and omission done by this Government. The Federation had years ago repealed the Business Registration Tax due to protests from the shopkeepers. Why should Singapore now introduce this tax? Why does Singapore want to introduce a tax rejected by the Federation? It is common knowledge that the shopkeepers tax, which is the real word for the Business Registration Tax, was the main form of tax used mainly by colonial countries like Sarawak and in the Federation before Merdeka to benefit the interests of the big foreign companies. Mr Speaker, Sir, by reducing the personal allowances the Government also hopes to draw an estimated 20,000 people into the Income Tax net. It expects to collect $750,000 from these 20,000 new taxpayers, mostly wage-earners. The Government estimates it will collect on an average of about $36 from each new taxpayer. Did the Minister for Finance know the cost of collection for each taxpayer? Mr Ong Eng Guan resumed his seat.

Order. The Member must continue with his speech.

Mr Speaker, Sir, the Minister just now was trying to hint that I do not know how to calculate the tax. I have worked out the cost of collection from the 1958 Income Tax Report. It works out at about $70 per collection. $70. Please take it down.

Order. If the Member for Hong Lim does not obey the directions of the Chair and keep order himself, the Speaker, or whoever is in the Chair, has means of stopping him from speaking.

Mr Speaker, Sir, assume that it takes less time to assess these wage-earners who, after all, have nothing much to declare, and compute, let us say, not $70 per collection, but say $50. Mr Speaker, Sir, we have a Minister for Finance who will spend $50 to collect $30 each from 20,000 wage-earners. I have also computed, Sir, - it is a pity the Government has this year given us so little time. Last year they gave the S.P.A. two weeks. This time they have given us only seven clear days, otherwise-

Order. I think the hon. Member for Hong Lim knows the Standing Orders, which are the Standing Orders made by this Assembly. The Standing Orders only allow for seven clear days. Please continue.

Mr Speaker, Sir, at the end of the sitting I will table before this House a table showing the percentage increase of tax among the various income groups*. If one earns $100,000 a year, the increase is 1½ per cent. These are the big-shots, (a hundred of them) and the increase is negligible. But if one earns $1,000 a month, the increase is 25 per cent; $750 a month, it is 39 per cent; $500 a month, it is 110 per cent; $458 a month, it is 200 per cent; $425 a month, it is 1,000 per cent. * Copy placed in the Assembly Library.

On a point of information.

If the Member will give way. Mr Ong Eng Guan resumed his seat.

What is 1,000 per cent worth in dollars and cents, please?

Mr Speaker, Sir, economists and those responsible for deciding fiscal policies do not compute policy in terms of quantum, but in terms of-

Propaganda!

- changes in the tax structure to see whether such changes are progressive changes, proportionate changes or digressive changes. The change introduced in the 1961 Budget is a digressive change.

Digressive! Progressive, you mean!

He is digressive!

Mr Speaker, Sir, one does not study these words in the law books.

On a point of information. Mr Ong Eng Guan resumed his seat.

I asked for the figure on which the 1,000 per cent is based. That is very simple. If he did the computation, surely he has the figure. If he has not, perhaps he would like a brief adjournment to get it.

Mr Speaker, Sir, a full list* of the effect of the changes in the tax will be put on the Table towards the end of the sitting. * Copy placed in the Assembly Library.

Order. If a Member in this Assembly wishes to produce a document which he wishes Members to see, I think the proper course is for him to place a copy in the Library.

Mr Speaker, Sir, the most unfortunate victims are those who earn between $320 and $417 a month. The increase is infinity. Mr Speaker, Sir, we now come to the Business Registration Tax. The Business Registration Tax is actually the shopkeepers' tax. It is proposed to raise $2½ million in 1961 from this tax. If all shops and businesses are taxed equitably, then there is nothing so objectionable about the Business Registration Tax. But this is not the case. Public limited companies, owned mostly by European enterprises possessing on the average a capital of $20 to $30 million each and earning on the average millions of dollars of profits a year, are only asked to pay an annual tax of $1,000. For instance, the Hongkong and Shanghai Bank, with a capital of $120 million and earning a profit of $14 million a year, pays $1,000. Private companies, owned mostly by local businessmen, some of which have only a few thousand dollars capital, pay $750 a year. Mr Speaker, Sir, I do understand that not all the profits of foreign companies are earned in Singapore. But neither are the private companies. Shopkeepers are asked to pay $50 or $100 for sole ownership and partnership respectively. The shop could be a small coffeeshop.

On a point of order, Mr Speaker.

Point of order.

Mr Speaker, Sir, since we understand that you have ruled before that no Member can read from a text, it seems that the Member for Hong Lim throughout his speech has been reading from his text. I wonder if that sort of thing could be allowed by the Speaker in this House.

Order. I think hon. Members have perhaps noticed that the Chair is a bit lenient in these matters, especially if there are very important pronouncements to be made by Ministers as well as by Opposition Members. But I have noticed that possibly the Member for Hong Lim has been referring to his notes a bit too frequently. Perhaps he will endeavour not to do so.

Mr Speaker, Sir, I am doing nothing more than just debating the Minister for Finance's Budget speech which was also printed and read by him word for word. You see, in debates on economics -

Order. I do not know whether the hon. Member for Hong Lim is debating the Chair's ruling. The Chair's ruling is very simple, that a Member should not refer to his notes too frequently unless, of course, there are volumes of figures that he wishes to quote from. Then he can read those volumes of figures. Let us leave it at that.

Shopkeepers are asked to pay $50 or $100 for sole ownerships and partnerships respectively. The shop could be a small coffee shop with a few hundred dollars capital. In this manner, the Business Registration Tax is an unjust tax, throwing a heavy burden on the small and medium sized shopkeepers. We propose that the $2 million expected from the business tax should not be borne mainly by the shopkeepers, but should be spread out proportionately among all businesses, big or small, European or local, according to capital. The Government must not discriminate against small shopkeepers and small private companies in favour of the big European firms. Those shops and private companies with a capital of under $10,000 or so should be exempted from this tax. Otherwise small shops and private companies with less than $10,000 capital might be compelled to close down. The shopkeepers' tax is one form of tax favoured by colonial economists. Dr Goh Keng Swee rose -

On a point of information?

On a point of elucidation. Mr Ong Eng Guan resumed his seat.

The Member for Hong Lim says that he fears that there may be an extensive closing down of shops as a result of this tax. Is he aware of the rates of the tax? Does he really expect us to believe that a tax of $4 a month will result in the closing down of businesses?

Mr Speaker, Sir, the Minister's Income Tax Department will supply him with the number of private companies and small shops which are likely to close down because of this Business Registration Tax. Mr Speaker, Sir, I cannot understand this onslaught on the shopkeepers, as I cannot understand the exploitation of the poor by this self-proclaimed socialist Government by the introduction of the cigarettes, petrol and lotteries taxes. Shopkeepers are not capitalists. The Minister for Finance said in his speech at column 44: `The reason for introducing this form of taxation is apparent. A large majority of small shopkeepers do not contribute whatsoever to the Inland Revenue.' Mr Speaker, Sir, these small shopkeepers were not paying income tax because many of them do not earn one-tenth of the income of our Parliamentary Secretaries. That is, they do not even make $2,000 a year. The shopkeepers are, in general, people who have started from the humblest origins, through self denial and hard work, and sometimes with the help of friends and relatives they manage to open a shop either alone or in partnership. They are now singled out for criticism by the Minister for Finance for their abstemious habits. Were it not for the fact that generations of them had sweated and toiled and exercised self-denial and were of abstemious habits, would there have been built the public institutions and the schools and the Singapore that we see today? Among the other new taxes, the tax on private lotteries yields a meagre $100,000. Why look into the haystack for such a small needle? A few free overseas trips would cost that amount. The only conclusion I can draw is that certain small organisations, which occasionally sell private lotteries for charities or to boost up their funds, are hurting the sales of the lotteries of the Singapore Turf Club. Lumped together with this tax on private lotteries is the tax on jackpots. And, Mr Speaker, Sir, imagine how much tax is to be raised from jackpots. $50,000! Just sufficient to beautify Sri Temasek with marble. The purpose of this jackpot tax is to conceal the motive behind the private lotteries tax by the familiar technique of lumping together. Another new tax proposal is to raise the assessment of properties in the rural areas. Why not assess those beautiful Shell properties and bungalows in Pulau Bukom which should yield at least a million dollars a year? The poor Malays in the Southern Islands have to pay assessment on their shabby attap huts. The Shell Company in Pulau Bukom do not have to observe building and planning by-laws. Mr S. Ramaswamy (Bukit Merah) rose -

On a point of order?

Yes. The Member still seems to be reading from his text.

I have noticed that and I have already drawn the attention of the Member to the fact that he is referring to his notes very frequently. In spite of that, he seems to be referring a little more to his notes. Perhaps he could refrain from referring so frequently to his notes.

Thank you, Mr Speaker. The Shell properties in Pulau Bukom are worth about $125 million. They do not pay even one cent of assessment. Does the Prime Minister know this, despite the fact that this matter is under his charge? That is the reason why certain departments have had to be taken over from his former Minister for National Development. Again, Mr Speaker, Sir, why not open negotiations with the British on assessment of houses on military properties? This will probably yield millions of dollars annually. After all, the British Military and the Shell Company are benefiting from services provided by the City Council in the form of health measures, roads, public utilities and so on. We are only asking them to pay their fair share, and nothing more. The proposed increase in assessment on rural properties will affect mainly the farmers and the rural shopkeepers. There have been little significant improvements in the rural areas. Rural poverty, farmers heavily in debt, and squalid living conditions. The farmers are now suffering, due to the reduction of prices of pigs, eggs, chickens and vegetables. The general poverty of the farmers has also affected the rural shopkeepers. The least the Government can do is to leave them alone. Has the Government really the heart to increase their taxes? The Minister for Finance described the jackpot as a one-armed bandit. It is not as oppressive as the two-armed bandit, who searches anxiously with hungry looking eyes for the poor as his prey. Next, it is expected to raise $500,000 from imposing a stamp duty on import and export declarations. I agree with the Minister for Finance that this will not impose a burden on the importers and exporters. However, is it necessary in the interests of Singapore's trade? The charge is small but it has a nuisance value. This stamp duty will hinder the smooth and quick flow of trade. There will be more queues. The Department has to stamp 3,000 forms each day. Mr Speaker, Sir, is it necessary to introduce all these taxes to raise $45 million? I am sure there are many more soak-the-poor gimmicks in the Minister for Finance's bag. In my opinion, all these are not necessary. The Government can prune down its wasteful and extravagant expenditure, and the Ministers themselves should set an example like leaders in other countries do. I hope the Minister for Finance remembers what he said on 22nd March. 1959. This is a very useful book at times [Indicating]. His speech is contained in page 26 of Part I of the P.A.P.'s "The Tasks Ahead".

You still read that?

Why not? When it is to find out the consistencies or the inconsistencies of the present Ministers. On page 26 is a speech delivered by Dr Goh Keng Swee at a mass rally at Dhoby Ghaut on 22nd March, 1959. He said: `By ruthless pruning of Government expenditure, we may be able to add $20 million annually to the Development Board.'. Of course, the excuse now is to wait for the Commission of Inquiry on Government expenditure to make its recommendations, and our Minister for Finance will wait till 1965. A more simple method to prove one's consistency is by adding $20 million or $25 million to the Expenditure Estimates, and in the following year prune it down by the same amount. Mr Speaker, Sir, let us assume for one moment that the Minister for Finance has no experience in Government affairs, that it is impossible to prune Government expenditure by $20 million, that it is even necessary to increase expenditure, and that $45 million should be raised from taxes. In framing a tax policy, considerations of yield, justice, administrative costs, and economic effects must be taken into account. No tax law can be enforced for any reasonable length of time if it is against the wishes of the people. The repeal of the shopkeepers' tax in the Federation is a clear example. The people must believe that the tax is just and that they are asked to contribute on a just basis to the national effort, and the running of the State. It is possible to convince the people for a short period of time that the burden from the imposition of new taxes is equitable. But this propaganda cannot last for any length of time. When the petrol tax was introduced, the propaganda line was that car owners are well-to-do, so they pay petrol tax. When the cigarettes tax was introduced, it was like this: cigarettes are a luxury; beer drinking is not. That is why there is no tax on beer. The propaganda on the lotteries tax was this: this tax is to deal with chap-ji-kee and four digits. However, the people are waking up, when they find that their standards of living are going down. Mr Speaker, Sir, the basic taxation policy adopted even in capitalist economies is the principle of ability to pay. According to this principle, those who have the greatest wealth or income pay most of the tax regardless of any benefits they derive. The ability-to-pay-principle also helps to equalise the distribution of income and wealth, and leads to progressive taxation. Most of the new measures introduced by this Government are not progressive taxes, that is, taxes calculated to tax the wealthy to help-

Order. I think the hon. Member must realise that if he is reading a speech he must read a little slowly, because the interpreters are finding a little difficulty in following him. I have indicated that the Member may refer to his notes, but he seems to be doing more than that.

Mr Speaker, Sir, there are three types of taxes - progressive, proportional, or regressive. The petrol tax is an example of proportional taxation. The taxi-driver and the salesman pay the same tax as the owner of a Mercedez Benz. Most of the taxes introduced by this Government are regressive taxation, that is, the poor and the wage-earners are asked to contribute more taxes than the rich. However, the marked characteristics of this Government's taxation policy is not that it is resorting to regressive taxation. The distinguishing feature in the taxation policy of this Government is that it is dovetailed to suit the interests of big European concerns. Out of the 12 new taxes the only contribution from these big European concerns is $1,000. That is all. Mr Speaker, Sir, it is a known fact that British capital controls our economy. The mode of organisation used is the public limited liability company. May I refresh the memory of the Minister for Finance, quoting from no less an authority than the Manager of the Industrial Promotion Board. Mr J. J. Puthucheary, who wrote a book called "Ownership and Control in the Malayan Economy"? These quotations will serve to bring home the point that our economy is dominated and controlled by European capital through public limited companies. It will also show that it is wrong to tax the shopkeepers in favour of British capital. In the preface on page xiv is written: `There is a popular view, widely held, that "the Chinese" control commerce. This is false. The estimates in the study show that European-owned firms controlled 65-75 per cent of the export trade in 1953 and 60-70 per cent of the import trade in 1955. European-owned firms held about 75 per cent of the import agencies against some 10 per cent held by Chinese firms. The popular misconception that commerce is controlled by the Chinese is due to the ubiquitous activity of the Chinese middleman. Certainly a very large number of Chinese traders are engaged in buying and selling. But it is quite wrong to think that in their buying and selling these traders in any way control trade. In fact, the misconception is an "optical illusion" due to the very large number of traders. The control of commerce is in fact in the hands of the exporter-importer, and the import and the export firms are very largely European.'. And on page xix of the Preface: `We can, however, say with confidence that the commonly held view that Chinese dominate the economy is false. As yet, the Chinese are mainly middle-men and compradores of European capital. Some have become partners and a few are independent. The capital that dominates Malaya's economy is European.' And on page xvi of the Preface: `The most important conclusion, I think, of this study is that much of Malaya's economy is controlled by large-scale units. Of these, the agency houses and the mining agencies are the most important. The belief that small-scale producers and traders dominate the economy is caused by an incomplete understanding of the position of Chinese-owned capital. Another cause of this mistaken belief is the lack of understanding of the extent of the control that agency houses, mining agencies and import agencies have over the economy of the country. A corollary of this is the importance of public limited companies. People who assume that Chinese capitalists control the economy assume too that public limited companies play a part subsidiary to that played by private companies and family or clan organisations. The second assumption is false because the first is false. The main finding of this study is the over-whelming evidence that European-owned firms are predominant in almost all industries. Almost all European-owned firms are public limited companies or subsidiaries of public limited companies. Some of the large Chinese-owned firms are also public limited companies. I do not think there can be any doubt that the most important type of business organisation - though not the most common - is the public limited company.' Mr Speaker, Sir, let me give an idea of what this $1,000 tax means to a public limited company. More than 95 per cent of public limited companies are owned by European capital. The $1,000 tax is a mere facade. In Lyall and Evatt "Handbook of Malayan Stocks and Shares", there are listed 37 public limited companies known in Stock Exchange language as Industrials. I have ignored the tin and rubber companies for two reasons: firstly, the operations of these companies are mostly carried out in the Federation and, secondly, the private companies mostly owned by local capital are more akin in their activities to these so-called "Industrials". Mr Speaker, Sir, these 37 public limited companies classified in Stock Exchange language as Industrials have a capital of $6,064 million and in one year make a profit of $74 million. I lay upon the table a list* of them showing their capital and profits computed from the handbook. * Copy placed in the Assembly Library. Out of the $45 million additional revenue raised by this self-proclaimed Left-wing socialist Government, these 37 public limited companies will pay only $37,000 in other words, $37,000 out of $45 million. Mr Speaker, let me dwell for a few minutes on the so-called company tax in this country. The companies in Singapore do not pay company tax the way they do in the United States, Australia or India. This is a colonial device to protect the profits of the big European firms. The companies in Singapore do not actually pay company tax the way we know it. The present so-called company tax is a misnomer. If I could explain in non-technical language, the 40 per cent tax paid by a company on its profits is being paid back to the shareholders when the company distributes its profits in the form of dividends. The Government collects 40 per cent from the company and pays it back to the shareholders. In theory, the Government holds the money collected from the companies as a security and not as a tax. In other countries even governed by Right-wing capitalists, like the United States, there is a company tax, sometimes as high as 50 per cent or 60 per cent, and this tax is not paid back to the shareholders when the profits are distributed in the form of dividends. Mr Speaker, the big European firms make millions of dollars annually and do not contribute to the running of the State because of the nature of our company tax. To illustrate, 40 per cent of the profits of the companies are collected by the Government in the form of the so-called company tax. When a company distributes its profits, the shareholders are paid back this 40 per cent by the Government. Say a shareholder, Mr X, has some shares in a company. He gets a cheque of $6,000 from this company this year. When he declares this income of $6,000 to the Government, what the Government does is to add up his $6,000 to the $4,000, that is, 40 per cent of $10,000 and assess him on a gross income of $10,000. If he is a married man, Mr X will pay $350 tax and the Tax Department will send him a cheque of $3,650. In other words, Mr X in that particular year will receive $6,000 from the company and $3,650 from the Government, making a total of $9,650. In other words, the company pays no tax. Mr Speaker, Sir, is this not a Government of the big business?

On a point of information.

If the Member will give way. Mr Ong Eng Guan resumed his seat.

Is the Member for Hong Lim, as a practising accountant, seriously suggesting that companies do not pay tax at all?

Yes, Mr Speaker. If what I have been saying the last ten minutes does not make sense yet to one who has had ten years' experience in insurance companies, then the insurance companies must have been wasting their money paying him. Mr Speaker, Sir, this is a Government of the big business, a Government under the will of European capital. Have we got to search elsewhere for more convincing proof? The Meadows, the Blades and the Thomsons control our political destinies. Mr Thomson's room was next to that of the Minister for Culture and he was writing speeches.

He was not.

Order. I am following the speech of the hon. Member with great attention. If he embarks on these little details, which I cannot relate to the general principles of Government policy which he is supposed to touch on in this debate, then I think he is getting seriously out of order.

Mr Speaker, Sir, from now onwards, I will not give way to interjections. Thank you. European capital controls our economic destinies. Why is the Minister for Finance now so frightened of European capital? May I remind the Minister for Finance of what he said at a P.A.P. mass rally on 22nd March, 1959, and which is reproduced also in page 25 of Part I of the P.A.P. "The Tasks Ahead": `Without exception all political parties other than the P.A.P. have repeatedly reminded people in Singapore the necessity of depending on foreign capital to finance our industrial development programme. Without exception, these parties placed their hope for our ability to attract foreign capital. The P.A.P. profoundly disagrees that the survival of Singapore depends on foreign capital and foreign capitalists. We say that there are more than adequate capital resources initially available locally. Indeed, the position is that large sums of local capital are being invested in foreign countries, often in unprofitable investments. The total amount of Singapore capital invested by banks, insurance companies, central government, local authorities and the public boards is not known with certainty. It is probably in the region of $800,000,000. It is absolute nonsense to say that our survival depends on foreigners when so much of our own capital is invested in foreign countries.' Mr Speaker, Sir, that was before the elections. This Government has now completely departed from the avowed aims and policies of the P.A.P. The taxation policy of this Government in general, and the 1961 Budget in particular, is another concrete proof that what this Government seeks to uphold are the interests of big European capital and colonial interests. Unlike the Parliamentary Secretary to the Minister for Finance, whose real income has increased more than ten times since May 1959, the people are worse off now than before.

Order. I think it is about time I put a stop to all these personalities which seem to be completely irrelevant. The hon. Member must keep away from all personalities.

Mr Speaker, Sir, let me describe here the problems and the sufferings of our people during the past 18 months. Taxi drivers. Of all the classes in society, the taxi drivers are the worst hit. First, they suffer a cigarette tax. If a taxi driver smokes 20 cigarettes a day, he has to pay about $6 tax per month. We then come to the petrol tax which makes him incur an additional $30 per month. On the other hand, the taxi fare, for instance, from Bras Basah Road to Upper Serangoon Circus before the elections was 50 cents each passenger, but now it is 30 cents. In other words, very few taxi drivers are charging fares according to the meter. And if the taxi driver is susceptible to the propaganda of this Government and tries to change his fortunes, then he will be encouraged to pay lottery tax, taking into account the increasing number of summonses and heavier penalties. Mr Speaker. Sir, the taxi driver is actually between the devil and the deep sea. He is considered lucky if he can at present earn $4 a day. Then we come to workers and shop assistants. Their greatest problem is the problem of retrenchment. If he is unfortunate to be unemployed, he would be lucky to get a few dollars from the Social Welfare at reduced rates of relief. The 1961 Budget estimates to get $27 million from the sale of lottery tickets. Out of $27 million, $8 million will go to Government as tax, $11 million will go to the Singapore Turf Club and the millionaire horse owners as profits and expenses, and $8 million will go back to these poor people in the form of prizes. In other words, as a class, the workers and all other poor people who are estimated to buy more than 90 per cent of the lotteries will be made poorer in 1961, by an estimated total of $19 million. This $19 million on the red is a "gift" from this so-called socialist Government. That is not all. A worker smoking 20 local brand cigarettes daily will be made poorer by the Government by $6 per month. There have been few cases of wage increases in the past 18 months. In 1958, the City Council worker got an automatic increase of 40 cents a day. And now with integration in the air, I am wondering what is the Government going to do. Would the Government reduce the wages of the City Council workers by 40 cents or would the Government increase the wages of the Government workers by -

Mr Speaker, Sir, on a point of order. Are we discussing the Government's financial policy or are we discussing the labour problem in the City Council?

I think what the hon. Member for Hong Lim is trying to get at is the Government's general policy, which includes integration of the City Council. I have not as yet grasped what he is aiming at, but, so far as I can see, he seems to be in order. He is discussing general policies with reference to details in passing. Mr Ong.

Mr Speaker, Sir, we now come to the hawkers. The 1957 census of population shows that there are 37,180 hawkers and stallholders. Due to the increasing volume of unemployment - the Minister for Labour and Law has given the figures of 11,186 unemployed being registered on 1st November, 1958, i.e. two years ago, and 52,963 being registered on 1st November, 1960, i.e. today - the number of hawkers must also have increased considerably since the 1957 census, which was 37,180 hawkers. More hawkers, more taxes on the poor and the wage earners imposed by the Government would mean smaller incomes for the hawkers. Smaller incomes, heavier penalties, and further economic exploitation by the Government in the form of these soak-the-poor taxes are driving many of the hawkers to semi-starvation. Would the Government understand the problems and the sufferings of the hawkers? I do not think they do. The recent unfortunate incident in St. Michael's Market could have been avoided. There was no necessity to send a riot squad van to chop away the stalls and break the crockery of the hawkers. Next, we come to the farmers. The 1957 census gave the number of fanners as 24,289. This is another badly hit section of the population. The farmer is now getting less for his produce but has to pay more taxes. Many of the farmers are in debt, which in turn affects the rural shopkeepers, which in turn affects the retailers in the towns supplying goods to the rural shops and so on. The farmers will be badly exploited by the present proposal to increase assessment rates in the rural areas. Mr Speaker, Sir, we now come to the general wage earner. In my analysis, the classes of people most hit are the taxi drivers, hawkers, white collar workers and shopkeepers. The wage earner or the teacher has to pay several dollars a month more for his smokes, $6 to $10 more for petrol, and a few dollars for lotteries. Is that all, Mr Speaker, Sir? No, Sir, he is now asked to pay more income tax. Among the wage earners, the teachers suffer the most - more hours, less pay. If everybody tightens his belt for the national effort, then well and good. But is that the situation? By no means. The teacher did not get a 10 times increase in income. He is in a most unfortunate position - no occupational mobility except perhaps running away to the Federation - he has to work more hours, get less pay, pay more taxes (petrol tax, cigarettes tax and now income tax). The shopkeepers. Among the business community, the small shopkeepers are the hardest hit. The increasing number of hawkers due to soaring unemployment share some of their business. But what else can the hawkers do? Contrary to what the Minister for Finance knows, many shopkeepers are affected by the cigarettes tax - for themselves and their customers - and sometimes even the petrol tax if they have a second-hand car used in the shop, and other Government licences and fees. Under the recent amendment to the tax laws, the shopkeeper has to engage extra hands to write receipts, or buy a cash register costing more than $1,000. And when this law is introduced, there is only one type of cash register and that is monopolised by an American firm. The new Business Registration Tax is aimed at collecting $2 million from about 40,000 shopkeepers in Singapore. This is unjust. The change in income tax will also affect the shopkeepers. The cumulative effect of these taxes is that many of them will join the ranks of the unemployed. Mr Speaker, Sir, this is a Government which believes in taxing the people of Singapore, mainly the poor, the workers, the wage earners and the shopkeepers, for the benefit of the big European companies. This is not an honest nationalist Government. It is a pro-colonial Government. It is a Government for the big businesses. Dr Frederick Benham, foremost authority on the economics of colonies, and the former Economic Adviser to the ex-Chief Minister could not have done better for England, and would be ashamed of himself if he were here today. The taxation and economic policies of our Minister for Finance who succeeded to the post of Dr Benham was in the best tradition of Dr Frederick Benham. Mr Speaker, Sir, the Prime Minister has also forgotten what he had said. In column 1015 of Vol. I of the Hansard, dated 21st November, 1955, the Prime Minister said: `Mr Speaker, Sir, a Socialist Government shows itself in its taxation and its expenditure. A democratic Socialist Party seeks through a parliamentary democracy, to introduce taxation in order that money could be taken from those who have and to introduce social services in order that money or benefits can be given to those who have not.' However, Mr Speaker, Sir, this Government is not a Socialist Government. In Hansard (12th December, 1958, col. 1217) the Prime Minister said: `We are surprised that the Hon. the Financial Secretary [i.e. under the former Government] should have had the audacity to say in this Assembly that they can quite safely put up company tax to 40 per cent. He was the same man who told us last year that there should be a safety margin of at least ten, if not more, per cent. We were the first to advocate that they should tax companies up to the hilt, according to British standards, because most of them in any case are registered in Britain or the investors are from Britain. They can easily go up to 9s, in the pound [i.e. nearly 50 per cent] without affecting anybody's pocket other than that of the British Treasury.'. However, the best description of this 1961 Budget is the one given by the Minister for Health in a debate on the Labour Front's 1957 Budget [Hansard, Vol. 2 col. 676, 19th November, 1956]. At that sitting of the Assembly the Secretary-General of the P.A.P. was absent, and the Minister for Health was speaking on behalf of the P.A.P. Mr Speaker, Sir, if, in the process of my quoting this speech, I could substitute the words "so-called P.A.P." for the words "Labour Front", and the word "S.P.A." for the words "Liberal Socialist", it would make very interesting reading: `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 that 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 backtracking. 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... 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 income-'

Order. May I remind the hon. Member that he is only entitled to read extracts - extracts from books or speeches - but not the whole speech? Perhaps he will confine himself to extracts.

It will not take another two minutes.

Order. But that does not solve the problem. The Member must read only extracts - and short extracts at that.

Thank you. `People do not expect anything better of a colonial government but people do expect something better of the Labour Front Coalition Government.' Mr Speaker, Sir, is it necessary to raise this additional $45 million in 1961? In my opinion, it is not necessary. We can prune down all extravagant expenditure. There is no intention to complete all the Development Estimates. The Development Estimates are prepared in a haphazard manner with hardly any plans. I remember that in January 1960 I instructed the Public Works Department to obtain details of plans from the respective Ministries, particularly the Health and Education Ministries, to submit their plans in order to fulfil the 1960 Development Estimates. Mr Speaker, Sir, I was shocked to learn that there were hardly any plans. On 1st February, 1960, the Public Works Department was taken over by the Prime Minister. He formed a Public Works Standing Committee to run the Public Works Department and to be responsible for all development projects. The Ministry of National Development was refused even the minutes and agenda of the meetings. The Public Works Standing Committee was made responsible to the Cabinet Budget Sub-Committee, its Chairman being the Prime Minister, and its members being the Minister for Finance and the Deputy Prime Minister. The Budget Sub-Committee is not responsible to the Cabinet and does not report to the Cabinet. For more than a year, Mr Speaker, Sir, the Public Works Standing Committee did nothing. During the few meetings that they had, they spent most of their time talking on the minor works projects, an item in the Development Estimates, from which funds could be allocated for purposes such as beautifying Sri Temasek. The best architects and engineers were directed towards such jobs. Many other architects and engineers remained idle, having no work to do. Mr Speaker, Sir, the other reason for there being no necessity to dig into the pockets of the poor, the wage earners and shopkeepers in the 1961 Budget is that there is a possibility of reducing millions of dollars of extravagant expenditure, and only our Minister for Finance could set an example. In my opinion, there is no need to dig into the pockets of the people at this hour when times are especially bad. What the Minister for Finance said is not true. He said [Hansard, 29th November, 1960, col. 10]: `The year under review has been a good one for Singapore. There has been a marked expansion in trade, in industrial output, in the standards of personal consumption, in business confidence, in the conditions of workers, and in the level of public services.' Mr Speaker, Sir, this is not true, because on the same day the Minister for Labour and Law, in reply to an oral question from an Opposition Member [col. 4], said that there were 11,186 unemployed on 1st November, 1958, and 52,963 unemployed two years later, i.e. 1st November, 1960. Mr Speaker, Sir, these facts speak for themselves. The unemployment figure is the best yardstick of the economic welfare and the prosperity of a people.

On a point of clarification, Sir.

No, Sir, If it is necessary to find this money with the sincere intention of carrying on with capital construction in the 1961 Budget rather than just for the purpose of propaganda, like in the 1960 Budget - window-washing - then boost the economy. Mr Speaker, Sir, we can find the money from other sources. What are the alternatives to the present taxation policy of the Government - a policy to benefit big European concerns? May I put forward some alternative taxation proposals for the consideration of the Government? 1. Reform the present archaic so-called company tax-

(In Malay): On a point of order. Mr Speaker, Sir, I am surprised to see that the Member for Hong Lim, who has been speaking for more than an hour, is merely reading his speech, which is contrary to Standing Orders. He is merely reading his speech, as though it has been prepared by somebody outside this House.

I have already ruled on that point which has been raised three times. The hon. Member for Hong Lim has been asked not to refer to his notes too frequently. In fairness to him, I think he has tried not to refer to his speech too often, and I think he will probably bear that in mind up to the end of his speech. Mr Ong.

Mr Speaker, Sir, a speech of such a nature should be carefully delivered because it involves facts and figures. It is not an abstract talk on political propaganda. I put forward these alternative proposals for the consideration of Government: 1. Reform, the present archaic so-called company tax by stages. The Tax Department wastes much time computing repayments of tax to shareholders. Levy a tax. Let us call it the Corporation Tax for distinction, as practised in India, Australia, or the United States and other countries. This non-refundable corporation tax can be fixed at 10 per cent in the first stage, while at the same time the 10 per cent can be increased by stages to a maximum which will ensure a reasonable profit to investors. At the same time the present so-called company tax should be reduced by an equivalent percentage. This method of taxation will discourage the private companies from distributing all their profits in dividends which they are now doing so as to claim repayment from the Tax Department. This is not healthy for the country at present as it is not conducive to economic and industrial expansion. Later, when the economic situation is better and things are not as gloomy as they are now, an income tax on undistributed profits can be levied to ensure a reasonable distribution of profits as dividends in the interests of the Exchequer. The present tax of $750 and $1,000 on private and public companies respectively is unnecessary. Mr Speaker, this tax proposal will not impose undue hardships on those shareholders who are Singapore residents, due to the benefits from big joint stock companies. 2. Open negotiations with the British Government and the Shell Company, for instance, about paying assessments on their properties. Perhaps negotiate also with the British Government for a tax on their military trucks; some of them are 18-ton trucks and they do not pay even one single cent of road tax. 3. Review the death duties tax. I am sure few people will move their residence to Johore Bahru just for the purpose of evading heavier death duties. Mr Speaker, Sir, these are my humble proposals. I have not been given time to work them out on a more concrete basis for more details. However, the Government does not lack experts. What they lack is a correct policy in the interests of the people. The experts, after all, carry out that policy. The taxes introduced by this Government to tax the poor and the wage earners should be reconsidered really on the principle of ability to pay. Some of the new taxes should be repealed. Others can be amended or reformed. Those who can afford should contribute more; those who are less well-off should contribute less. The present policy of opening all guns on those who are less well-off and on the poor must be reversed. We are not asking the Government to tax the European firms until they bleed and run away. No, Sir. We only ask that the taxation policy of this Government should be fair and just. After all, Sir, the people of Singapore have waited for long years, and, alas, are still waiting in vain.

It is a convenient time to suspend. I suspend this sitting and shall take this Chair again at a quarter to six. Sitting accordingly suspended at 5.14 p.m. until 5.45 p.m. Sitting resumed at 5.45 p.m.

Order read for resumption of debate on Question, "That the Assembly approves the financial policy of the Government for the year 1961." Question again proposed.

Hon. Members, of course, do appreciate that this debate will end at 8.00 p.m., unless the Leader of the House moves otherwise. The debate is scheduled to end at 8.00 p.m. tonight, and although Budget time is, of course, Opposition time, the Members of the Opposition will appreciate that the Minister for Finance should be given a reasonable opportunity to reply. 5.46 p.m.

(In Malay): Mr Speaker, concerning the Government financial policy which is being discussed today, I would like to emphasise, as has, been explained just now by the Parliamentary Secretary to the Prime Minister, that I do not wish to speak at length because I understand the contents of the Annual Budget Statement. There is a shortage of doctors and their posts have not been filled. This is one of the many points stated therein. Mr Speaker, with regard to the Government's financial policy on the whole, we know clearly that the question of trade with Indonesia - import and export - could be said to be slackening. This is what the Members of the Opposition have talked about earlier. Although there is a surplus in the Government financial estimates, I am completely surprised why the Government has failed to spend money in the public interest, with particular reference to the rural areas. There are many services which could be provided to the public if the expenditure provided for is utilised. But from what I can see, the monies provided for these services are not spent but are put into the Estimates so that the so-called inefficient Government can balance expenditure and income with a view to having a surplus for the year 1961. Mr Speaker, I am unable to understand the reasons for the vacant posts not being filled. The reason given is that persons from abroad, such as engineers, doctors and others, cannot be obtained. I do not know whether local officers in Government Departments are given an allowance when they hold such posts. Is this one of the main reasons why such posts cannot be filled, so that these officers can carry on their tasks without the necessity of recruiting people from abroad? Mr Speaker, I hope the Minister for Finance can clarify the question of revenue for the State. We know that the Government, or the Minister concerned, has recently issued regulations in regard to our National Anthem and also the national flag of Singapore. Those who contravene these regulations or who default will be fined. Has the Government estimated the yield from such fines? Mr Speaker, I still remember the Prime Minister's reply to the Member for Cairnhill when the latter challenged the Government to hold by-elections in Singapore in a number of constituencies. The Prime Minister said that no useful purpose would be served because there was no need to waste public funds, which had been collected from the people of Singapore, on holding such by-elections. Whether the Government was afraid of the challenge or whether it wanted to save money, it is left to all Members to decide for themselves. But I am surprised, Mr Speaker, since it seems that - although unofficially in this Chamber - the People's Action Party, through its official organ and through the medium of local newspapers has challenged three U.M.N.O. Members in this Assembly to contest the by-elections because they say we are no longer representing our Party. I am shocked that, on the one hand, they are making an effort to save money, but, on the other hand, they have challenged U.M.N.O. Members to stand for by-elections. It is clear that the P.A.P. is challenging the U.M.N.O. Members to prove to the Malays whether or not they are, in fact, representing the Malays. So I am at a loss to understand this, Mr Speaker. But our faith is still firm, and God Almighty will have compassion on us and our Organisation will go back to normal. Although the challenge has not been voiced in this House, I hope, not because we want to preserve our seats but because -

Order. My difficulty now is to relate the hon. Member's speech to the provisions of the Standing Order which perhaps I ought to read. Standing Order 83, paragraph (1), inter alia, reads: `... the debate ... shall stand adjourned for not less than seven clear days and, when resumed, shall be confined to the general principles of Government policy and administration as set forth by the Minister in moving the motion and as indicated in the Main Estimates.' So, in so far as this challenge to the U.M.N.O. is concerned, I have up till now failed to see how that is related to the provisions of the Standing Order.

(In Malay): Mr Speaker, I merely wish to clarify the financial position as it stands. However, Mr Speaker, the question which I have raised just now could be related to another matter. Mr Speaker, the Singapore Government in 1954, that is, the then Colonial Government, had loaned money to the tune of $30 million to the Federation of Malaya to fight Communism. That loan is to be paid by the latest in ten years' time. Therefore, the surplus which is indicated here includes the $30 million paid by the Federation of Malaya to the Singapore Government. I pay tribute to the Federation Government who is sympathising with the Government of Singapore by repaying the loan before the time is due. I believe, Mr Speaker, Sir, the reason for the Government asking for the $30 million loan to be repaid during the life-time of the People's Action Party is that it could be used for various aspects for the benefit of the State. It means that before the forthcoming elections, the $30 million will have been spent by the P.A.P. Government to defend its ability in the matter of the financial state of affairs of Singapore. We on the Opposition are not surprised. If the view of the present P.A.P. Government is to ask for the repayment of the $30 million so that victory could be achieved in the next elections, it does not matter. But it is clear that the solution to the question of finance is still lagging behind, whereas the population is on the increase and unemployment is also on the increase. This is another major problem which has not yet been resolved. Mr Speaker, Sir, in the Ministry of Culture there is also a surplus to the amount of $400,000. Good, well done! The Ministry is efficient in the performance of its tasks. But I feel that to use millions of dollars for the propaganda purpose of creating one culture in Singapore on the basis of Government's concept of a Malayan culture is most unsatisfactory. The Minister for Health, who has elucidated on the question of culture, is absent from the Chamber today. He has accused me and has alleged that I am conservative and am afraid that this House will be dissolved. But outside this Chamber, a different version was told in the newspapers. So I do not know whether the Government is wrong in giving an answer that is motivated by sentiment. We from the Opposition, however, bring forward the opinion of the electorate we represent. Mr Speaker, whether the Government, especially the Ministry of Culture, in spending millions of dollars, could evolve a culture or whether it could accept Malay culture as the basis of a Malayan culture, it is left to it to decide. Mr Speaker, I am not a member of the P.A.P., but I have been presented with a booklet entitled "The Tasks Ahead" by the Hon. Minister. But it may be that our Minister for Health has forgotten that in "The Tasks Ahead" there have been mentioned topics dealing with such things as "Economic Roots of Communalism", "Racialism and Economic Status Quo" and "Poverty Knows No Race" and many other topics. I have gone over them carefully. I admit that the writer is efficient, wise and smart, but I am surprised at the mention in the Budget speech that the People's Action Party has been elected by the people and is on the side of the workers by protecting and safeguarding their interests. Mr Speaker, it is not my intention to speak outside the confines of this debate, but I wish to stress this: will the Government be able to recruit personnel with such a financial policy? Recently it also accused communal parties without first making investigations into the question of labour relations. I am sure that such an accusation is levelled at the Opposition and particularly at U.M.N.O. I wish to say that if there are among us those who indulge in such matters, I hope the Government with the power and complete State machinery at its disposal will take the necessary action. But it should not just point an accusing finger at us. We on our side realise that before a common identity can be established, it is difficult to depart from the policy of our Party. I hope, Mr Speaker, it can be said in this Chamber whether U.M.N.O. has ever done such a thing. Mr Speaker, to cut short my speech, I wish to say that I do not know what is going to happen to the Malays as they are governed by a socialist Government. There are Malays who represent Socialist Parties. But I hope what is enunciated in the Singapore Constitution of 1958, which was promulgated and tabled in the English Parliament and which became effective since then, will be discharged. If the Estimates are based on the Constitution, I cannot really see what help the Government will be able to give to the Malays as the indigenous people of the island State of Singapore. Mr Speaker, if it is said that I am a communalist, I accept that. But that cannot be eradicated until there is positive proof that monetary help will be given to the Malays in Singapore. I fail to see in the Government's plans the methods by which the Government is going to help the Malays in the economic field. However, if they are compared with the plans of the People's Action Party, they are directed entirely towards the Federation of Malaya. But I cannot see why they are not being implemented in Singapore today. If the Government wishes to do it, there is nothing to prevent it from doing so. I note, Mr Speaker, that there are Malay settlements, low-cost houses, and their allocation, and so on, but I think, aside from all this, that the question of raising the economic status of the Malays should be fully encouraged. 6.09 p.m.

Mr Speaker, Sir, in col. 10 of Hansard, Volume 14, No. 1 of 29th November, 1960, the Minister for Finance said: `... during election campaigning, irresponsible Right-wing Parties worked themselves into a fright.'.

That is true.

`It would not have mattered if the hysteria they generated confined itself to those parties and their few well-wishers. But in the nature of things, the fright campaign must have further repercussions.'. Sir, you will remember that on several occasions Ministers have referred to my statement during the election that if the P.A.P. Government came into power women would lose their jewels. This has been referred to as wild rumour. Sir, it is not a rumour; neither is it wild because-

They got richer?

No.

Order.

Take the case of one couple who are working for the Government. They have had their pay slashed, anything from $200 to $400. Now, this couple have saved up for years and have at last budgeted their pay so that they can afford to buy a house that they can call their home. When the P.A.P. came into power, and dropped the axe on their variable allowances, they could no longer pay the monthly instalments on their house. What happens? Sell the woman's jewels, of course. When there are no more jewels to sell, sell the car. When there is no more to sell, sell the house; and the amah goes also. When the amah goes, unemployment is increased. Then what happens? After the house is sold, the amah sacked, the couple go back to Mum and Dad. These two old people are very sweet, helpful, well-meaning and very kind. Sir, I am old myself, so I know what old folks are like. Due to their age, they are inclined to be a little interfering. They are well-meaning but interfering, and they lack understanding of the minds and the ways of young people. So the young couple have to tolerate it, whether they like it or not. And then what happens to the baby? The baby can no longer be brought up according to the mother's ideas of child psychology or child upbringing. The baby is now grandma's darling and is brought up in exactly the way the father and the mother have been brought up. Sir, is this fulfilling the promise that the P.A.P. made during the elections - to give women an equal opportunity and an improved status, of relief from drudgery and slavery of house work?

We have never promised to reform mothers-in-law!

Order.

They have forced young women into the hands of mothers-in-law. Continuing, the Finance Minister said in col. 13: `In my last budget speech, I referred to the necessity for establishing some form of common market arrangements with the Federation.'. Can I refer you, Sir, to something he said earlier on? It is in col. 10. He said: `... a government is judged not so much by its expressions of good intentions but by its concrete achievements...'. This is exactly what the public of Singapore would like to see - that the Government achieves the common market - and not hear about it year after year in the Budget. I cannot agree more with the Minister. Sir, when he said that "without the firm financial base of a sound currency, no underdeveloped region can hope to tackle the immense problems of economic development."

What is the column number?

It is in column 14 of the same Hansard.

I have not found it. Could the Member indicate which line?

It is in the first paragraph of column 14, Sir, I quote from Hansard of 29th November, 1960, Vol. 14, No. 1, column 14: `But without the firm financial base of a sound currency, no underdeveloped region can hope to tackle the immense problems of economic development.' And also, Sir: `A strong currency is something we enjoyed for so long in the past...'. I cannot agree more with that; but what the Opposition is not so happy about is why the Minister for Finance has found it necessary to express the hope of his Government that it would be possible to retain the present co-operative arrangement between the five territories. Does he have any apprehension that it might not, or is it guilty conscience? Referring to the depression suffered by the construction industry, the Minister said in column 17 of the same Hansard: `The Board lost no time in getting down to work and pulling itself out of the difficulties created in the S.I.T. by the mismanagement of the former Minister for National Development.'. Sir, when the Opposition tried to bring this "mismanagement" to the notice of the Government and the people, the P.A.P. Ministers, including the Prime Minister himself, called us names and shielded their ex-comrade and prevented the public from knowing the truth. Had the Member for Hong Lim not annoyed the Hon, the Prime Minister with his 16 resolutions, the mismanagement would have perhaps up to this date been hidden from the public, and the ex-Minister for National Development might have been permitted to continue mismanaging and Singapore allowed to deteriorate and the people would have continued suffering. Thanks to the 16 resolutions - whatever value they may have in other ways - the people of Singapore have now learned about this mismanagement. Although the Member for Hong Lim is no longer able to mismanage the affairs in the S.I.T., mismanagement seems to continue and, what is worse, Government seems bent on leading the public up the wrong path. May I quote Hansard of 16th November, 1960, Volume 13, No. 11, column 836:

Mr Speaker, Sir, can the Hon. Minister tell us why these 91 terrace houses have not been occupied? Mr Tan Kia Gan: Mr Speaker, some delay has resulted because of wanton damage done to the fittings by vandals in the area, and repair work has had to be done.

Mr Speaker, Sir, may I ask whether the high rent has anything to do with the vacancy of those houses? Mr Tan Kia Gan: Mr Speaker, at the moment, the Board has arrangements in hand to offer the first option for accommodation in the Kampong Tiong Bahru Fire Site to fire victim families. It has nothing to do with high rent.' I naturally, Sir, never doubted the correctness of this statement, but on Tuesday, 135 housewives came to my `meet-the-people' session -

Where?

- with these forms. It was a pitiful sight, Sir. Some of them were in tears. They are the people who have lost all that they possessed in the fire at Kampong Tiong Bahru. When that took place, the previous Government brought them in lorries to the Old Airport-

In buses.

-and housed them. Well, they told me that they were brought in lorries. They were exempted from paying rent for three months. After the three months were up, they paid $25 for a one-room flat with kitchen and bathroom; $35 for a two-room flat with kitchen and bathroom. They told me, Sir, that during the election campaign, P.A.P. canvassers knocked at their doors and told them that if they voted P.A.P., they would be put back in houses at the fire site at a rent much lower than what they were paying.

Order. I did read the relevant Standing Order. I must remind the Member for Mountbatten that this is a debate which must be confined to the general principles of Government policy and administration. I think the hon. Member is probably going into too many details. It will take the speech away from the general principles to which she is supposed to keep.

Mr Speaker, Sir, I am trying to show the general policy of letting out S.I.T. flats. These people experience great hardship in having to send their children right down to Tiong Bahru to schools.

Order. I have not said that the hon. Member is out of order in just touching on this incident, but if she goes into details, like travelling in buses and sending children to schools, and so on, she is inviting a debate on details, which I think is out of order in so far as this present debate is concerned. The debate must be on general principles.

Sir, these people have now been offered by the Government to return to the fire site but at a rent of $68 per month for a three-room house, $55 for a two-room house and $40 for a one-room house with only a common kitchen and common bathroom facilities. All these rooms are smaller than the rooms they are occupying and the partitions are made of celotex. I am not trying to go into details, but I am trying to show that, on the whole, those rooms are much inferior and smaller accommodation with less facilities and are rented out at a much higher rate for the fire victims who have lost all that they had. When they went to No. 332. Alexandra Road - the address given in this form that they received - they were told to go to Pickering Street; and when they went to Pickering Street, they had to go up and down to find the place until they were fed up and fagged out. Sir, this is what I am driving at. Is this the way that this Government, which claims to be the people's Government, which claims to be the Government for the poor, treats the fire victims of Singapore? Sir, I have here in this book [Indicating] 135 names, addresses and particulars, and each of them is the head of family of four to eight children.

Order. May I suggest to the Member for Mountbatten that this might be a very ideal subject for a motion in this House perhaps censuring the Government for its policy on the fire victims? I think I must stop the hon. Member from going into details of this nature, because she is in fact inviting a debate on details. That is what she cannot do in this debate.

Mr Speaker, Sir, in the Budget Statement made by the Minister for Finance, he said (Hansard dated 29th November, 1960, Vol. 14 No. 1, at column 23: `A right-wing government would view this [increasing unemployment] not with alarm but with delight.' How irresponsible can a Government statement be? Does the Minister for Finance suggest that the Government across the Causeway - because they are a Right-wing Government - would view their increasing unemployment with delight? Moreover, I am sure that the public would like to know who are the Right-wing and who form the Left-wing! The Government say that the Opposition is Right of them and then they claim that there is a group that is Left of them. Sir, relatively they are Right of that group and they can still be called a Right-wing Government. Sir, instead of telling the House how the Government intend to solve the unemployment problem, the Minister is more interested in predicting the reaction that increasing unemployment would have on a Rightist Government, and all that the Minister has to offer is employment for 2,500 out of nearly 60,000 unemployed - and that too if the progress is what the Minister expects. On income tax, Sir, the Minister goes on to say: `A socialist Government will get the money through taxation in such a way that those who can afford to pay taxes share the greatest responsibility.' Therefore, Sir, the question arises as to whether the P.A.P. is a socialist Government. If we judge them by their proposal of the new income tax, we would say that they are not, because in the new proposal, the poor and the lower middle classes are the hardest hit. The Minister proposes to lower the personal allowance from $3,000 to $2,000, and from $2,000 to $1,000 so that the rates between Singapore and the Federation would not differ substantially. We cannot hope to imitate the Federation. In the Federation where there is a boom, it could be easily expected that a family of three or four grown-up children would all be working; but in Singapore where 60,000 are unemployed a family with three or four grown-up children and a few small children may have only one son working and supporting the whole family. It is a common thing in Singapore to find a bachelor working to support his father, mother, brothers, sisters, and grandparents sometimes, and because of his many dependants, he is forced to remain a bachelor and be penalised by Government for being one by having his relief reduced to $2,000 with no relief whatsoever for his dependants. This is not the case in England. Worse hit than the bachelor is the married woman. Immediately she gets married, her relief goes down to $1,000 and the rate of her tax goes up because her income is pooled with that of her husband's. Sir, this is the price that Singapore's young people pay for a legal marriage. When a couple live in sin they escape all these penalties, because in so far as the Government are concerned they are separate individuals. Surely, Government are not encouraging people to live in sin in view of their policy against yellow culture. Or, on second thoughts, could that be the reason for their delay in reintroducing the Women's Charter? With regard to the question of a deficit, the Minister for Finance had this to say in Hansard of 29th November, 1960, Vol. 14, No. 1 at column 25: `It may also be noted that total expenditure never does keep up with the Estimates... For instance, from 1950 to 1958, total expenditure had never exceeded total estimates except in 1954... it was only in 1951 and 1952 that estimates were nearly achieved by actual expenditure. For the rest, expenditure fell short of estimates...'. Sir, when the Member for Tanglin tried to point this outlast year, he was ridiculed by the Minister for Finance, who is now saying exactly the same thing in almost the same words. Surely an economist who is able to change an $8 million deficit into a $37 million surplus never needs to panic at a threatened deficit of $6 million that was budgeted for. It is commonly believed, Sir, that this panic was whipped up for the following purposes:- 1. To justify the slash in pay of civil servants who perhaps have been suspected of not having voted for the P.A.P. 2. To scare the public and antagonise them against the civil servants who dare object to the slash. 3. To antagonise the public against the previous government. The slashing of pay by Government and this arrangement of a Member of the Government Bench to fight against the Government for the restitution of the pay and Government's dramatic gesture of restoring part of the cut - Sir, all these performances are signs of an immature and an amateur government. However, for the sake of the civil servants who have suffered enough hardships, we too will join the "let's pretend" game and wish the Government Member "Good luck and success!" in his negotiations with the Government on behalf of the civil servants. We hope that he will succeed in getting not only a partial restoration, but a full restoration. Sir, I would like to point out that when considering the proposals of income tax and assessments, it is necessary to bear in mind that a million dollars may seem very small to a millionaire. But the last mite is very great to a, widow. So when Government says. "It is only a few dollars that the poor have to pay", well, those few dollars mean much more to them than the millions mean to a millionaire. The Minister further promised to return all taxes garnered by the Government to the people in the form of schools, hospitals, etc. May I be so bold, Sir, as to remind him that 18 months have gone by and the Government has built neither a hospital nor a school? And with due respect, Sir, to the Minister, may I again quote what he said at the beginning of his speech, that "a government is judged not so much by its expressions of good intentions but by its concrete achievements"? 6.34 p.m.

(In Malay): Mr Speaker, Sir, in the debate on the Minister's Annual Budget Statement for the year 1961, I take this opportunity to express my views because of the importance of the Government's financial policy, since it will determine whether it will be good or bad for the State of Singapore. From what we have been able to gather from the statement of the Minister for Finance, it cannot be said to be a progressive statement which one can be proud of, especially for its surpluses and programmes formulated for 1961. There is no need for me to go into detail on the surpluses, because this point has been touched upon by my colleagues on this side of the House. But when we plan for progress for Singapore and its people in the future, it is important to consider the reasons for the present condition and the difficult situation that exists. Mr Speaker, the Party which is now in office, during the general elections in Singapore, hoping to be returned to power, formulated a programme to attract the masses without going deeply into the question of its ability to fulfil its promises. Apart from that, Mr Speaker, the modus operandi of the Government shocked many important sections in Singapore. I would like to touch upon the speech which is being strongly defended in Hansard, at col. 20, when it said, "The P.A.P. Government is a Government elected by the people and is one that is partial to the working class." I think that as a government, it cannot take sides, but it should be impartial to all and not merely to side the workers or businessmen or Government workers. If we take sides, as has been mentioned, it means, in effect, that that section of the community which the Government is unable to side with will not receive a guarantee that they can live in peace in Singapore. For instance, we know that although imports of commodities are on the increase, business is declining. Mr Speaker, if we study the lives of the trishaw riders and the taxi drivers, we will find that they are frustrated and worried. In connection with the plan to industrialise in the year to come, it is indeed a good programme. It is a programme in which we can have faith and in which certain sections of the unemployed could find employment. But the possibility of such industrialisation being carried out still remains a question mark, because, Mr Speaker, we in the State of Singapore are exactly like the waiter who, if he is unable to serve his patrons properly, will cause dissatisfaction among his patrons, and so cannot expect a good business. Therefore, what has been achieved during the past one and a half years has brought about dissatisfaction among the people. Can we be proud of our ability to govern the people? We can do this; we can do that; but all the means of doing them should come from the people. Mr Speaker, I feel that the Government has somewhat slowed down in their momentum. Previously their hatred for the capitalists has been great, but today the Parliamentary Secretary to the Prime Minister has blamed the capitalist countries for not giving assistance to Singapore. It looks as though we in Singapore are going down on our knees to the capitalists for aid. On the question of how to live, Mr Speaker, we could do wonders. Today we say one thing, and tomorrow another thing. This shows our inconsistent attitude, our tendency to distort facts. We do not practise what we preach. We should put a stop to this. On the other hand, we must rectify our mistakes made during the past one and a half years. It is hoped that the State of Singapore will give impartial treatment to all the people of Singapore so that all sections of the population may benefit. That is all that I have to say in the debate on the Government's fiscal policy for the year 1961. 6.43 p.m.

Mr Speaker, Sir, as we are approaching the time for the moment of interruption, I do not propose to take much time for my speech on the Finance Minister's Budget statement. But there are a few important points in that statement which require me to make some remarks. Sir, it is obvious to us that the Budget statement of the Minister for Finance is specifically meant for foreign consumption. The Minister recently went a-begging overseas, and we are informed that he has been told that we must show what we are prepared to do for ourselves before overseas assistance can be forthcoming. With an eye to this, Sir, the Minister has therefore injected into his Budget statement a synthetic buoyancy. The Minister claims that 1960 has been a better year than 1959 and that there has been considerable improvement all round. He quotes statistics, Sir, to prove his contention. We know that figures can sometimes give the wrong picture. Take, for instance, Sir, the figures for bank advances. It is claimed that because September bank advances were very much more than January advances, therefore, the trade position has improved. 6.46 p.m.

Sir, a totally different interpretation can also hold good. The fact that bank advances in September were very much higher than advances in January could be due to the fact that businesses financed by bank loans were having difficulty in meeting their commitments. I know for a fact, Sir, that many rice and sugar merchants have suffered considerable losses, and that they are having difficulty in meeting their bank bills. We know, Sir, that it is a common practice in Singapore for banks not to take drastic action against businesses to whom they have lent large advances in the hope that, if given time, these businesses would be able to pull through and, therefore, cut their losses. In Singapore, Sir, there is a common barometer to gauge the economic circumstances of the population. I refer to coffee shops, Sir. Sir, it has never happened in Singapore before for a coffee shop to close down business. And yet in the year 1960 many coffee shops have closed down, a year which has been claimed by the Minister for Finance to be a good year, a year in which he says there has been considerable improvement. Moreover, a number of goldsmiths of long established reputation have also closed down in 1960. If there is considerable improvement in 1960, why is it that the unemployment figures have increased? If 1960 has been a good year, why is it that hawkers, taxi-drivers and businessmen are groaning, and a large number of workers are earning much less?

Rubbish!

If 1960 is better than 1959, why is that the T.U.C. is more concerned with working out a scheme for retrenchment of workers than concerning itself with the placing of new employees in employment? Sir, there has been grumbling in lots of places that business is bad. The Minister should not place too much reliance on statistics. And I have heard just now. Sir, the Minister interjecting that what I have been saying is rubbish. I would, therefore, ask him, and his Ministerial colleagues, just to go out to their constituencies and ask the people there - the people whom they represent. Ask the hawkers, the taxi drivers, the shopkeepers whether they are having a better time this year than they had last year. And if they were to tell the Minister and his Ministerial colleagues that they have a better year this year, then I will say assure him that these people will put up a tale of woe.

On a point of clarification.

If the Member for Cairnhill will give way.

The Minister will be able to answer later.

The Member does not give way.

Since the Minister is prepared to answer, then surely he can answer when the time comes. We will give him every opportunity to answer, and I hope that the answer will be that he will go out among his people in his area, and so will his Ministers go out among their people in their areas; and not with bodyguards around them, protecting them against the masses whom they claim to have a great love and affection for them.

You have to run away from them! [Laughter]

Order.

It would appear, Sir, that the Government Front Benchers, in spite of the fact that there is a Ministry of Culture, are not so cultured as they would have the people of Singapore believe. Sir, again, the Minister had this to say about cargoes handled by the Singapore Harbour Board. I quote Hansard, Vol. 14, No. 1, col. 15, at about the bottom of the column. `From January to July this year the general cargo discharged at the Harbour Board wharves was 1.215 million tons compared with 1.132 million tons last year, representing an increase of 7.3 per cent. Cargo loaded rose from 1.035 million tons last year to 1.074 million tons this year.' Against this, Sir, let me quote the report of the Singapore Harbour Board which appeared in the Sunday Mail of 23rd October, 1960, on page 18. This reads: `Cargo, excluding coal, fuel and vegetable oil, handled at S.H.B. wharves during the half year ended June 30, 1960, totalled 2,057,643 tons, representing a decrease of 6,788 tons or 0.3 per cent compared with the previous six months. The tonnage of cargo handled, including coal, fuel and vegetable oil, was 2,807,907 tons, representing a decrease of 34,585 tons or 1.2 per cent. The number of vessels berthed alongside cargo working wharves was 1,968, representing a decrease of 61 compared with the previous six months.' Sir, I leave it to hon. Members to read between the lines.

It is a simple explanation. I will give it to you.

Sir, a word about the cigarette industry. I quote the same Hansard, at col. 16: `The cigarette industry continues to make great strides, the quantity produced in the first nine months of the year increasing from 1.6 million pounds in 1959 to 2.1 million pounds this year, an increase of 28 per cent.' I wonder, Sir, whether this increase of 28 per cent is on the credit side or on the debit side of Government's economic policy. The Minister has stated, Sir, that as a result of this change in consumer habits, there will be a shortfall of $3 million this year. In this connection, Sir, let us see what the Minister said in his Budget speech last year. I quote Hansard, volume 11, No. 13, col. 805, at the bottom of the column: `There may be adjustments to the tax on tobacco, depending on factors which I have previously discussed.' And what are these facts, Sir? The same Hansard, col. 791, gives the answer. What are these facts? At the middle of the column: `The duty on tobacco goes up from $34.2 million to $43.1 million. But this item needs close watching. It is based on certain assumptions about consumer preferences between locally produced cigarettes and imported cigarettes. It remains to be seen whether these assumptions will, in fact, be justified.' Sir, the Minister quotes the cigarette industry as an expanding industry. And if this industry keeps on expanding, as it is bound to do, because the people will have to smoke locally manufactured cigarettes which are cheaper than imported cigarettes, then said the Minister, "there may be adjustments to the tax on tobacco". What do we want? Do we want an expanding cigarette industry or do we want more money out of tobacco revenue? Sir, the Minister for Finance took great pains to reiterate the economic policy of the Government, and two significant facts emerged from this dissertation. The first significant fact is that it is the Government's desire to adjust themselves in the eyes of those supporters who hold the belief that the Government are committed to pursuing a more vigorous socialist policy. The second significant fact is the Government's anxiety to impress on capital that they are not so bad after all, that they have done a lot of barking but that there will be no biting. Sir, we have all along said that Singapore cannot survive without giving capital as well as labour its due part to play in the economic development of Singapore. And we see that the Government today are getting more and more friendly with capital. The Minister made mention of persons in left-wing organisations, trade unions, political parties and so forth, and I do not know what is meant by this. The Prime Minister has said in no uncertain terms that anything left of the P.A.P. are the Communists. Is the Minister for Finance referring to the Communists? I do not think so. What I think he is referring to is that group in the P.A.P. which is more left, which is hoping for a more vigorous socialist policy than the group that is in power today. Therefore, if there is such a group in the P.A.P. today, that group which the Minister has described as left, then the Party in power today could justly be described as a Right-wing Government. After all, Sir, what is Left-wing or Right-wing? It is just relative. When one is less left than the left, one becomes right; and when one is more left than the Left-wing, then the Left-wing becomes the Right-wing. We really do not care what the P.A.P. describes itself-Left-wing, Right-wing, non-Communist, democratic socialist political party. We do not care what they describe themselves. But we do wish to point out that what they claim they are going to do for the economic development of Singapore is based on the legislation introduced and brought into being by the previous so-called Right-wing Government. It was the previous Government that introduced legislation to enable the present Government to put up plans for the industrialization of Singapore.

You need money!

Tin mines!

Sir, now I come to the tax proposals. I would not like to mention it again after such a short interval, that there seems to be so little culture, in a Government that has a Ministry of Culture and a Government that wants so many millions of dollars to spend on culture.

The truth hurts!

Sir, honi soit qui mal y pense.

What does that mean, please?

Sir, I see the Government intends to increase taxation rates in the rural areas.

Is he allowed to speak in some other language?

I wonder whether this is in keeping with the utterances of P.A.P. candidates and supporters during the 1959 general elections. I heard it said that P.A.P. candidates and supporters had gone round to the rural areas and said, "Vote us in and we will see to it that with the P.A.P. Government there shall be less tax."

That is evident!

Today we are told that we have been informed a week ago by the Minister for Finance that there will be increased taxation in the rural areas.

On landlords.

The property tax? Some hon. Members: Yes, on landlords.

Order.

Sir, assurances were given at the election campaign, and the P.A.P. always means what it says-

It says what it means.

Or does it? Sir, in regard to industrial establishments in the rural areas, the Minister has this to say in Hansard, volume 14, No. 1 of 29th November, 1960, at column 43. `It is, however, proposed that property tax on industrial establishments in the rural areas will not be increased beyond the present rates. The reason for providing industry with this inducement is obvious.'. An hon. Member: What is it?

Sure, Sir, it is obvious. The Government is now going down on its knees telling capital, "Boys, we ain't so bad." That is it. "We are no longer that bad. We are prepared to slap those that brought us into power, so that you can come back and help us to develop this country." That is it. People in dwelling houses, Sir, and others in the rural areas are to be called upon to pay increased taxation, but industrial establishments in the rural areas may not be called upon to do so because the reason is obvious. Much, much too obvious. The P.A.P. is now all geared towards making its great appeal to capital. As far as we know, Sir, industry is not so concerned with the payment of rates and taxes. What it is most concerned about is the fact that there should be industrial peace and that there should be confidence in the Government. If these two factors are lacking, then no amount of inducement can prevail. The Business Registration Tax. In regard to this tax, I find it difficult to say what is in the minds of the Government, because the Government have not yet defined what a business is. When is a business not a business, we do not know yet. An hon. Member: Gone bankrupt!

Is a little business in a building selling nuts, a business? Then again, in the case of a person having a stall on the pavement and again selling nuts, is that a business?

It depends on the type of nuts!

So it all depends on the type of nuts [Laughter] and not on the type of business that is carried out. If that is the kind of interpretation that the Hon. the Leader of the House is going to give to "business", I think maybe the other side may soon be getting nutty! [Laughter]. Some hon. Members: Hear, hear!

Order.

Sir, although we do not know what the definition of "business" is going to be, there is one thing we can say, and that is, that the tax to be paid by limited companies has our support. But we do say that in the case of small businesses, they should not be called upon to pay this registration tax. Private lotteries - I had thought that the Government's drive against slot machines would have driven the one-armed bandit out of existence!

To rob the rich!

I now find, Sir, that this form of gambling is quite all right with the Government so long as they have a cut. Now, the one-armed bandit has become a two-armed bandit, the other arm being provided by the Minister for Finance to rake in 30 per cent of the net takings. So long as Government can cash in on gambling, they say, "Go ahead, have as much gambling as you want; but let us have our 30 per cent blood money." Fees levied on the practice of certain professions. In his speech, the Minister says that he has consulted the professional associations. But I have been told, Sir, that there has been no such consultation. I do not know who is right, but if there had been such consultations, surely the Minister would have been informed by these associations that there are objections to the introduction of such professional levies.

Are you still hoping to be a lawyer?

The newspapers, Sir, have given reports that there are associations which are objecting to this. Sir, we do not worry nor seriously oppose the levying of a fee on professional people, but it is not improbable, Sir, that with the imposition of this levy the charge may be passed on to the public in the form of increased charges. Passenger tax on embarking air travellers. There can be no objection to this, but I would ask the Government to reconsider its proposal to introduce a passenger tax on internal air travel. Travel from Singapore to Malacca, Kuala Lumpur, Ipoh and Penang should, we think, Sir, be treated as internal travel and not travel to a different land, whereby a passenger tax is necessary. However, Sir, it is left to the Government whether they want to consider Malaya as what Malaya has been considered in the past, or whether they now wish to consider Malaya as a different land. Sir, as to Income tax we support the proposed increase in the maximum rate of tax on personal income, but we will not support the decrease in rates of personal allowances. In 1956, the previous Government, in conjunction with the Federation Government, proposed to introduce this reduction in personal allowances and it was because of strong opposition not only from the people, but from the T.U.C. and from members of the P.A.P. that that proposal had to be withdrawn.

You got cold feet!

And now, Sir, it is the P.A.P. Government that proposes to introduce this kind of a tax. Sir, it is the P.A.P.-controlled T.U.C. that, to use the words of the Minister, had "got cold feet" and had not protested against this increase, this incursion into the earnings of the wage-earners who are earning less today and who, by reason of the growing unemployment, have a greater burden to bear by having to look after relatives who are unemployed. Sir, what is the reason given for imposing this tax? It is that there should be no difference in the rates of taxation between Singapore and the Federation. But then, Sir, that is not correct. There is already a difference. Singapore is having a 55 per cent tax on personal income as against 45 per cent in the Federation. Therefore, the argument that we must have the same rates with the Federation does not hold good. Sir, I would like to congratulate the Minister for Finance for doing his utmost to encourage and promote industrial expansion. The economic well-being of Singapore is dependent on the success of this plan, and it is the duty of every citizen, be he rich, be he poor, be he an employer, be he a worker, be he a Minister, be he an Assemblyman, to do all he can to help the Government to see to it that the industrial plan succeeds; otherwise Singapore may perish. But there are certain things which the Government, and the Government only, can and should do to create an atmosphere of goodwill, confidence and tolerance. Singapore is not a poor country. It would have got enough capital to finance its own developments had it not been for the fact that local capital had flown away to Kuala Lumpur, to Hong Kong, to the Bornean territories and elsewhere since last year. The Government, Sir, cannot deny that they have made mistakes. And I do not relish using this forum here to try and make it more difficult-

Rubbish!

-for the Government. What we all hope, Sir, is that the Ministers will profit by their mistakes and that they will learn fast - very, very fast. In the immediate past, the Federation has been very friendly towards Singapore, and to regain this very friendly relationship is of the utmost importance if our industrialisation programme is to succeed. Last year, the Minister in his Budget speech touched on the necessity for establishing a common commodity market with the Federation. One year has passed, and we are told that discussions are still continuing. One year has passed and the Minister has not given this House even a hint of some hope that there may be good news for Singapore. One year has passed, Sir, and during the course of that year, while discussions were progressing, the Minister had found it necessary to impose, for the first time, an import duty on soap, which import duty directly hits at the Federation, because there is no soap imported into Singapore other than from the Federation. What do we see today? We see that only a week ago, the Federation Government has found it necessary to take action to bring the position back to status quo in so far as the Federation soap manufacturers are concerned. Sir, has the imposition of this import duty benefited Singapore in any way? Surely the Government in its talks with the Federation Government on a common commodity market could have made out a case for soap to be classified as a common commodity? Or surely the Minister for Finance could have consulted the Minister for Finance in the Federation on his proposal to impose an import duty on soap and sound his views on it; and if the Minister for Finance were to hear from the Minister for Finance in the Federation that any imposition of an import duty would result in an increased import duty on the part of the Federation, then surely there would have been no need for both Governments to do something which is now giving the impression outside that there will soon be a tariff war between Singapore and the Federation. Surely these two things could have been done. What a foolish way of going about winning friends for Singapore! Sir, the common commodity market is of some importance to the industrialsation plan of Singapore; but a common currency is of vital importance to Singapore and we are told that the Federation Bank Negara will presently be issuing and managing the Federation's own currency. We were told by the Minister for Finance in his Budget Statement last week that it was the hope of his Government that the currency agreement would continue. I would urge the Government to do more than hope that the currency agreement would continue. They should do everything in their power to persuade the Federation Government not to break away from the agreement. Sir, as time is getting short, I will therefore end my speech.

7.19 p.m. Resolved, "That the debate on the Annual Budget Statement be continued after 8 p.m. today and that the proceedings thereon be exempted from the provisions of Standing Order No.1 for two hours."-[Dr Toh Chin Chye.]

Debate resumed. 7.20 p.m.

Mr Deputy Speaker, Sir, may I, in the first instance, congratulate the Minister for Finance on the technical aspects of presenting a Budget of this nature which, for the first time, takes into its fold the revenue of the local government as well as the government itself? I feel certain that it was not an easy task. It has been handled well and I compliment the Minister on it. When the Minister for Finance made his first Budget Statement in this Assembly one year ago, his tone, his speech and his demeanour were quite different from his tone, his speech and his demeanour on the occasion of his second Budget which, of course, is as it should be. On the first occasion, he was a much younger Minister when presenting his first Budget. I am told that it was his maiden Budget. He was also a Minister of a young, vigorous and virile political Party. A year has passed and, as time passes, decay sets in.

You are hoping.

Order.

It is so with human beings. It is so with institutions and it is so- An hon. Member: With the Opposition.

- with this political Party. On this occasion, the speech of the Minister for Finance was not the virile speech that it was the last time, nor was the delivery quite so virile. It was quite hesitant in many places and it explained why things had not happened in the way the Minister had hoped would happen; and all these things have made him a wiser man after a year. And now it is a wiser Budget on this second presentation of a P.A.P. Budget in this Assembly. However, Mr Deputy Speaker, Sir, on the first Budget, I ventured to suggest to the Minister for Finance that it did not need a wizard of finance like himself to be able to end up that financial year with a surplus. He has so ended up with a surplus of $37 million. I am going to suggest to him again this time that at the end of this Budget year he will also end up with a surplus, not because he does not want to spend money - he wants to very much - but because the actions and the policies of the P.A.P. over the past year or so have been such as to curtail the functioning powers of the P.A.P. as a Government. It is one thing to vote the monies, but it is quite another thing to carry out the schemes: to plan them, and then execute them. Policies may be laid down by the Government but those policies have to be implemented by civil servants, technicians and engineers. The failure of the P.A.P. Government - and this reflects itself in the economic life of Singapore - is that they have not been able to manage the government of the country in the way they should have. The management of the Government has been such that the civil service has fallen down on its job, the technical side has fallen down on its job, and the professional side has fallen down on its job; and that is why, Mr Deputy Speaker, we have this surplus. Had all sections of the Government, had all sections of the Executive been functioning as the P.A.P. Ministers had hoped they would have, I am sure that a large portion of this surplus would have been spent; and if it had been spent by the Government, then there would have been greater prosperity in Singapore and a greater feeling of confidence. Mr Deputy Speaker, Sir, governing a country is a difficult matter. However brilliant the Cabinet may be - on one occasion I did say that we have perhaps the most brilliant Cabinet in South-East Asia - it is not enough to be brilliant in one's academic life or in one's intellectual attainments. One has to translate this brilliancy into something positive which will have its result felt in the State of Singapore. To that extent, the Government have failed, not, it would appear, because they do not want to succeed, but because the manner of approach to the problems, and because the speeches made by certain of their Ministers were such as to create a situation in Singapore where the people have lost confidence. If the Government are seriously interested in knowing why there is this feeling of uncertainty in Singapore-

There was.

-why there is this feeling of uncertainty in Singapore - not there was but there is - which is increasing from day to day, and unless the Ministers are prepared to do something positive [Laughter] about the situation instead of laughing from their Ministerial Benches - laughing from their Ministerial Benches might save their egos for the moment - it is not going to help Singapore one bit. Sir, to put it shortly, my advice to the Government is this: create a situation of confidence in Singapore. If you can create a situation of confidence in Singapore, then prosperity will start to come to Singapore. But if you do not, we will go from worse to worse, from one doldrum to yet another worse doldrum. That is what will happen. The Minister for Finance has given certain figures which, on the face of it, must mean that Singapore is prosperous. I was very impressed with those figures. I asked my colleagues, "Could we be wrong? Why are the people all around us feeling so depressed? Why do they say business is so bad? And yet the Minister for Finance is quoting figures which, on the face of it, would indicate that we are riding on a wave of prosperity." Mr Deputy Speaker, Sir, if anyone were to walk along the streets, of Singapore - one of the curses of being a Minister is that he cannot walk in the way he did when he was not a Minister - he would find out that the people are depressed, that the people are not earning as much as they did, and that there is a general feeling of economic stagnation in Singapore. The Minister for Finance has said that the money in circulation is as high as, if not higher than, it was before.

The same.

The same. And yet there is a feeling of depression.

There was.

The Federation is enjoying a prosperity which it has not enjoyed for some time, and yet Singapore which should share in that prosperity or in that feeling of prosperity has not got it. If the Minister for Finance were to take the trouble to go across to the Federation some time and spend a week or so there, he would feel that in the Federation, there is buoyancy, there is hope, and that the people are thinking there is a future there economically.

You are not thinking of going there, are you?

When I go over there, I will take the Minister for Culture with me. We might then be able to do some cultural work there together. However, Mr Deputy Speaker, Sir, we are not on culture at the moment. We are on the even more difficult matter of trying to keep Singapore in a position where it will be able to appreciate culture because, on an empty stomach, one does not think of culture. Mr Deputy Speaker, Sir, the economic policy of the Government, for the first time, has been set out in a guarded, a right-handed and left-handed sort of manner, without going into it very carefully; what the Minister wants to say is that he finds himself in a capitalistic state of society, that he finds he cannot alter it because of circumstances beyond his control, and therefore he has to accept and to work the situation as he finds it; otherwise there must be economic collapse and chaos. I congratulate the Minister on making that statement in the Assembly, because it must have been a very difficult statement for him to make, seeing that what the P.A.P. were seeking to give outside before the elections is something quite different. People had expected that there would be a radical change in the handling of the economic situation in Singapore, but, however, it appears that the present Government has changed its policy. If that is true - and it must be true because the Finance Minister says it - then it is up to the Government to see that capital and labour work together. And if the Minister for Finance says, "I want to encourage capital", and his other Ministers or Backbenchers make statements in the Press - sometimes the Ministers and Backbenchers do this in one day, each one speaking a different tongue and giving different views - why, in one Sunday paper there was the Minister for Finance side by side with the Minister for Labour and one of the Backbenchers (not all appeared in the same page but they were all in the same paper) all saying quite different things, one not compatible with the other - then that is not the sort of thing, Mr Deputy Speaker, Sir, which would engender confidence in Singapore; certainly not in the mercantile community. If the Minister for Finance wishes to engender confidence in the mercantile community, then I would suggest to him that when the Ministers or Backbenchers make statements which are not compatible, he would at least see to it that they do not appear together in the same page of the same paper on the same day. Turning to some of the specific proposals for taxation for the forthcoming year, my colleagues on this side of the House have dealt with the various aspects of the taxation policy and the various items on which the Government proposes to increase taxes. There is only one item on which I wish to address the House this afternoon, Mr Deputy Speaker, and that is the question of professional taxation, "Fees levied on certain professions", Hansard, Vol. 14, No. 1, col. 47. Sir, I am not at the moment concerned with the fees which the Minister proposes to levy on certain professions. I wish to deal with the profession of advocate and solicitor, not because I want to deal with that particularly but because I think that I might be able to put my points better as I know that profession better. Originally the fee for admission for an advocate and solicitor in the Colony of the Straits Settlements was $500. That had been so for some considerable time, until I think about 1948 or 1949 when it was reduced to $50. The fee for admission of a solicitor in the United Kingdom prior to 1948 was, I understand, £50. When the first Labour Government or some other Labour Government - anyway it was a Labour Government - came into power in the United Kingdom and formed the government, they reduced the fee from £50 to £5. The basis of the argument was that the right to practise a profession was the right to work, and no government had a right to tax a man's right to work, to earn a living. It is a question of principle - that the right to work in any system of society should be free and unfettered. Now, the Minister might well ask me, "Why then was the fee of £50 charged in the first instance?" I think it was because a fee of £50 was felt not to be a fee for admission but a fee very much higher than a licensing fee. And because of that, it had been considered to be in the nature of a taxation, and the fee was reduced to £5. When it was reduced to £5, Singapore after some time followed suit, and reduced the fee to $50. The present Government proposes to increase that $50 to $250, and the suggestion is that professional people can afford it. Mr Deputy Speaker, Sir, in all humility, I say to the Finance Minister that not all professional people can afford to pay it.

Surely you can!

Sir, I am not speaking for myself; I certainly can afford to pay! But I would like to inform the Deputy Prime Minister that there are a number of my professional brothers outside who will find it difficult to pay, particularly when one realises that every year we are getting 20 people from England admitted to the profession, and we are now going to the University of Malaya which will give us a number of professional lawyers also. And when all these people come into the legal market in Singapore, I can assure the Deputy Prime Minister that they will not have it so good. And, Mr Deputy Speaker, Sir, young professional people have not developed a cynicism which Readers in universities have developed; not for some time. They are full of life and full of hope; they are not cynical yet. But when one reads too long in universities on abstruse matters, one tends to become cynical. And one can understand a Deputy Prime Minister who has been a Reader at a university getting that way. But I think it is not a good thing. Mr Deputy Speaker, to get cynical in one's young age, particularly when one is a bachelor. Sir, I put the point to you that the sum of $250 is in the nature of a taxation and is not a sum which one can equate to a fee. Over and above that, it has been suggested that this particular profession should be called upon to pay a fee of $500 a year, payable every quarter at $125 per quarter. 7.38 p.m.

So that a young barrister or a young solicitor who gets himself enrolled in Singapore as an advocate and solicitor pays in his first year an admission fee of $250; and before he can practise he has to pay a quarterly fee of $125, which immediately makes the fee in the first instance $375. Over and above that he has to incur expenditure in the way of acquisition of books and other material, without which he cannot practise. And this $375 is a terrible burden, Mr Speaker, on young lawyers. Young lawyers have already approached me and put their point to me, and I speak now in this Assembly voicing their views. If the Minister thinks that professional people are making money - yes, some are certainly making money, but not all, and certainly not young lawyers - might I make a suggestion to the Finance Minister that if he feels that he must go through with his proposal for a professional levy, might I ask him not to make this levy on what we call junior advocates and solicitors; in other words, anybody who has practised for less than seven years should be exempted from paying this fee but should be called upon to pay this normal fee. And if the Minister feels that this tax should be imposed, then let it be levied-

It falls on the senior partners. The senior partners pay for it.

-on the people who have had more than seven years' practice. The Prime Minister has been very fortunate in his practice. He has always had a boss to pay his fees for him. But there would be others not quite so fortunate as the Prime Minister has been in his professional practice. He had it good because he got here first. But let me assure the Prime Minister, through you, Mr Speaker, Sir, that very few undergraduates coming out from Singapore are likely to have it as good as he had it when he came out. And let us not forget that the Prime Minister is not an ordinary man. Sir, so much for the practice of the professions. But the main point I wish to make on behalf of the professional people is that this socialist Government, and a socialist government must encourage people to work, seems to pick on certain people and say to them, "You, I am going to discourage. Why should you be allowed to work without paying the Government a tax?" Next time will this Government charge the clerk a fee to ply his work as a clerk? Where does this stop, Sir? Once you break into the principle that in order to be permitted by the State to work, you must before you work pay the State a tax in advance. Once that principle is forced through this Legislature by the present Government, particularly by a socialist Government, what is there to prevent any other government from coming along and saying, "Before you can be engaged as a labourer, you must pay $3 or $5 per year."

That is not private practice. Clerks do not go into private practice!

Or if a clerk wants to work for somebody else, is the Government going to charge him a fee? Once this principle of the right to work without being taxed by the Government is abrogated, and if that abrogation comes from a socialist Government, then I think I must agree with the Member for Hong Lim - when he asks - what kind of a socialist Government is this? On this occasion, we are happily agreed.

Friends!

Sir, there are other aspects of this Budget which I do not wish to touch upon at this time because the time to debate it is limited, but I will raise them in the Committee of Supply. 7.43 p.m.

Mr Speaker, Sir, we have heard quite a great deal about what many Members of the Opposition have called, and especially what the Member for Hong Lim has chosen to call, the so-called socialist P.A.P. We have also heard a lot of rather irrelevant details, especially from the Member for Hong Lim, all on nothing. I do not intend to go into details. I will only touch on general principles. They all claim that the P.A.P. Budget is not the Budget of a socialist government. There are many types of socialist governments or socialist parties. In Singapore alone we had Lib-Soc socialism, later on S.P.A. socialism, and we have a new addition, Hong Lim socialism. I wonder if they understand what socialism really means, or what a socialist economy really entails. It is not my job here this evening to teach them, but I feel obliged to enlighten people who have been so ignorant of the greatest - at least one of the greatest, if not the greatest - of political philosophies in the modern world. First, let me tell them how a socialist government goes about the socialisation of an economy that is essentially and basically capitalistic, especially in a backward and under-developed semi-independent country like Singapore. For the benefit of the Members of the Opposition, the basis of Socialist construction is industrialisation. It should be plain even to people who know nothing about economics that industrialisation and the construction of factories mean more jobs and more opportunities for employment for the people, especially so in Singapore which has limited resources and a rapidly increasing population which has been described as "explosive". You may notice, Sir, that we have recently held our family planning campaign and, of course, the industrialisation programme of the P.A.P. Government. To come back, however, how do these countries embark on industrialisation? Let us look at history a little. Some countries industrialise through plunder and the exploitation of colonies through decades and for ages. There are others that industrialise through the winning of wars and the exacting of heavy reparations from the defeated enemies. Still others industrialise through leases or concessions and loans in enslaving terms. All this, Sir, Singapore cannot do. It leaves only for us to go back to industrialisation through our own efforts. Now, how do Socialist countries industrialise through their own efforts? To industrialise you have first of all to need capital. And how do we get that capital? Let us look around again and find out how certain Socialist countries get their capital. The Communist countries acquire their capital in various ways. First, there is the method of expropriation of lands and properties and the other means of production. Then there is the method of nationalisation of key industries and other dictatorial methods that will provoke stubborn resistance or even armed resistance. Now for the benefit of the Member for Hong Lim (unfortunately he is not here), the P.A.P. Government is a Socialist Government. It is not only a Socialist Government but also a Government that believes in constitutional advance through parliamentary democracy. In other words, the P.A.P. Government is a Government that believes in and carries out democratic Socialism. What do we do in such a case? Can we go about dictatorially and start nationalisation and expropriation of all the capitalists? Is that what some of the Members opposite want? Do they know what that means? It will only mean armed revolution, and the P.A.P., as we have very often repeated, abhors violence. So the only alternative to the P.A.P. Socialist Government is to go about acquiring capital in a democratic and constitutional way. Some of the ways are by saving and the husbanding of resources, or by ensuring that there is no waste and dissipation of whatever resources there may be, or by channelling these resources into useful and purposeful projects, and, of course, by calling for local loans. So in the context of Singapore whose economy is entrepot and basically capitalistic, and whose economy is also linked with capitalist countries of the Western bloc through external trade, it becomes doubly difficult for a Socialist Government to go about socialising such an economy. Previous Governments never did anything in the way of making provision for the employment of our fast expanding population that come out from our schools. It has to be left to the P.A.P. Government to plan for industrialisation, so that all the people of Singapore may have a chance of gainful employment. As has often been repeated, Sir, the fruits of toil never fall down from heaven. We have to work hard and toil for whatever fruit that we can get. The P.A.P. Government is at the present moment embarking on a most difficult experiment of democratic Socialism in Singapore. It should be the aim and hope of each and every one of us to see this experiment succeed. Some of the Opposition Members have said that we go for class ideology. Some of them say that we are not Socialists, not left enough. Let them all realise that we, as democratic Socialists, are working democratically and constitutionally to lay a foundation for the final objective of a society that will give the maximum satisfaction to all our cultural and material requirements. In our present Budget, it is absolutely untrue that the poor has been taxed. Anyone who is worth his salt knows that the introduction of earned income is a special move to help the working man. Sir, I support the Budget unreservedly. 7.53 p.m.

Mr Speaker, Sir, this is the second Budget presented by the People's Action Party Government, and framed in the light of the last Government's experience. You will remember, Sir, that the Prime Minister, in his speech during the debate on the Yang di-Pertuan Negara's Speech, described the second year of office of the P.A.P. Government as a year of construction. This fact is well reflected in the Budget which was presented to this Assembly by the Minister for Finance last week. The Budget makes provision for considerable expansion in the field of social services and industrial development. Sir, it can be seen that the P.A.P. Government is resolved to pursue vigorously its policy of industrial expansion. Industrialisation is for Singapore the only available means of providing employment opportunities for our growing young population. The economic basis of Singapore has to be modified from that of a commercial entrepot to an industrial one. Even with the rate of expansion which can be expected in Singapore's international trade, there will not be enough of new jobs for the vast numbers of young Singaporeans who are coming into the labour market year by year. Preliminary planning for a five-year development plan is now going on in the Ministry of Finance, and we can expect to see a detailed plan published early in the new year. We hope, Sir, that with the continued stability in Singapore under the P.A.P. Government, more and more foreign capital will find its way into Singapore and supplement our own efforts at industrialisation. Side by side with our proposals to bring about an industrial economy, the Government will also have to take into account the necessity to maintain and improve the highest standard of social services available for our people, and the programme both in the fields of education and health is enormous. The funds available to the Government, Sir, have to be well apportioned among the departments of Government which provide these social services. The continued expansion of educational facilities, building schools and employing teachers and the expansion of health services in the rural and city areas call for a high rate of capital investment. The expansion of these facilities, Sir, also makes heavy demand on the existing Government machinery. It can be seen from the Budget that the Government has almost achieved its aim of abolishing the cumbersome local government machinery and incorporating most of the functions of the former City Council into the Central Government. It can be expected, Sir, that when this process of integration is completed, it would facilitate the provision of social services to the people of Singapore. We have also noticed, Mr Speaker, that during the last twelve months the Government has made considerable progress in regard to the organisation of community associations. The People's Association has now co-ordinated social services and is also taking over the administration of community centres. As regards public assistance, we hope that as more and more jobs become available to our population, the Government can bring about some reduction in the amount of money that is now being spent to assist the unemployed. Sir, it is obvious that to bring about the proposed expansion in the spheres of industry and social services, certain adjustments will have to be made to the existing tax structure. Every proposal, Sir, which was presented by the Minister for Finance has been well received. The additional revenue which is required to implement our programme of expansion will have to come from these revenue proposals. As the Minister has pointed out, Sir, we still remain one of the most lightly taxed countries in the world. The Government has given consideration to the necessity of spreading out the effects of these new taxes as equitably as possible. As a Socialist Government, Sir, we believe in the principle that the heaviest burden must rest on the strongest shoulders. At the same time, we should be on our guard. Will these taxes in any way kill the incentive without which our development plans cannot proceed? As the result of the stringent economic policy of the P.A.P. Government during the last 12 months, we are now in the happy position where the Minister for Finance has indicated the readiness of the Government to consider the question of restoring in part the variable allowances which were cut soon after we took office. I have no doubt, Sir, that as Singapore proceeds along the road to prosperity, our civil servants will be able to get back as much of their variable allowance as the finances of the State would permit. This Budget, Sir, presents yet another milestone in the P.A.P. Government's progress towards achieving its long-term objective, which was made public in our election manifesto. It is the responsibility of the present Government to ensure that during the next 3½ years, they will have made some progress towards achieving a more equal and just society. The people of Singapore, Sir, I am sure, would not grudge such sacrifices and such extra effort as would be required of them. 8.02 p.m.

(In Malay): Mr Speaker, I fully support the Government's financial policy as presented by the Minister for Finance. A genuine government is one that presents facts to the people and not put in something which is ambiguous; neither does it give an estimate which is full of theories, because the Government side is not full of theoreticians as claimed by the Opposition side. They also claimed to be Socialists. But we do not know what kind of socialists they are. Mr Speaker, we have heard a lot of things, especially from those Members who have put up many questions asking for elucidation from the Minister for Finance. There are also those who attack us. But, unfortunately, when we start to give elucidation, we find that the seats on the Opposition side are empty. Mr Speaker, I do not wish to speak at length on this matter, because what has been expressed by the Minister for Finance is clear. But I would like to touch on the subject mentioned by the Member for Mountbatten relating to the things that were perpetrated by the ex-Minister for National Development regarding the S.I.T. She said that had the former Minister not been expelled the mismanagement would have continued until today. This is most misleading, because the Government is aware of it. The Singapore Housing and Development Board was established in January this year, a few months before the expulsion of the ex-Minister for National Development. This indicates that the Government is always aware of the interests of the people of Singapore, and that it will always do all it can in its power for them. Mr Speaker, I should not mention this matter, but the Member for Kampong Kembangan has in his review of the Government economising on expenditure taken the opportunity to challenge or accuse the P.A.P. Government. He has stated that the P.A.P. organ challenged U.M.N.O. Members in this Assembly to resign their seats and contest the by-elections in their respective constituencies. This is most confusing, Mr Speaker, Sir. We have never issued a challenge to anybody, because we know that it is no use. What actually happened is that the U.M.N.O. Members in this Assembly were challenged by other U.M.N.O. members, who were faithful to the directive of Tunku Abdul Rahman, the President of U.M.N.O., Malaya. The domestic crisis in U.M.N.O., therefore, should not be mixed up with the affairs of the P.A.P. Apart from that, the Member for Kampong Kembangan also seized the opportunity, when he touched on the estimated budget for the Ministry of Culture, to sing old tunes regarding what took place between myself and the Minister for Health. Actually, after the incident, I was approached by a number of officials, especially the President of the Literary and Language Congress, who expressed their regret at the Member for Kampong Kembangan touching on the question of culture, because they felt that cultural matters should be left to cultural bodies and organisations to deal with and should be looked after by those people who are really in the know about cultural matters. Mr Speaker, the Member for Kampong Kembangan said that the Government, in the course of carrying out cultural works, should force the people to practise a Malayan culture based on the concept of the Government. It is not our intention to force something on anybody. But the responsibility of a government is to give every encouragement to the people so that they may have self-respect for the various cultures that are to be found in Singapore, with a view to creating a Malayan culture. The Member for Kampong Kembangan also accused the Government of ignoring the special position of the Malays as embodied in the Constitution. Mr Speaker, I feel I can ask this question: During the four years of the coalition Government led by Tun Lim Yew Hock and his colleagues, to what extent had they gone to help the Malays as compared with the efforts carried out by the socialist P.A.P. Government towards the Malays? I would like to reiterate that the memorandum of the Malay Education Council, submitted to the Coalition Government of U.M.N.O., M.C.A. and Labour Front in 1950, was put into cold storage until 1957. The P.A.P. Government never practise that method with reference to any particular demand submitted by the Malays, because it is our policy to give all assistance to the Malays who have been ignored by previous colonial governments. Mr Speaker, Sir, I have observed that many Opposition Members have moved amendments to the Head, Ministry of Education. I have no doubt that the Minister concerned could explain the position. The Member for Kampong Kembangan said that the Government provided low-cost houses at the expense of the economy of the Malays. Mr Speaker, the question of drawing up a plan for the economic uplift of the Malays is not an easy task. Mr Speaker, our help to the Malays is based on giving them education, because it is through education that their economic and living standards will be raised. I hope that my brief elucidation will clear up the confusion caused by persons in responsible positions who make political capital out of the so-called special position of the Malays, as though the present Government is neglecting the Constitution. We believe in deeds, and I am sure that what we have done for the Malays will prove this. 8.13 p.m.

Mr Speaker, Sir, earlier this evening the House was given a very short entertainment by the Member for Tanglin when in his speech in which he fought strongly for the partial restitution of variable allowances for the civil servants and aided teachers, he made the statement that should he get a restitution he would donate it to the unemployed. It is, I think, public news that the Member for Tanglin will have retired from the education service in three weeks' time; so that it is very likely that he will not receive any partial restitution of the variable allowance because it will only be effective in 1961. Therefore, he will be making a contribution which would not- An hon. Member: Be retrospective!

- materialise. And probably he would be in need of it then should it come about. Regarding his argument that if there is a surplus in the Government budget for the year, such a surplus should go back to those members of the public service who were affected by the cut in the variable allowances, I am afraid that he fails to realise that the Government is responsible to the people not on an annual basis but rather on a long-term basis. If the Government has not been able to cut down its expenditure - especially the annually recurrent expenditure for a number of social services for the State - that sum of money which is available should not be frittered away but should be set aside either to reserves or be ploughed back for the purpose of development, that is, for the future prosperity of the State. So if there have been surpluses for the years 1959 and 1960, these sums of money would be needed for the industrialisation programme of the State. Earlier this evening, the Member for Hong Lim was talking loudly about company tax, and he went even as far as to say that the present company tax was no tax at all. You will remember, Sir, that I stood up and put a question to the Member for Hong Lim - who is not in the House at the moment - whether as a practising accountant he seriously meant that companies, in fact, do not pay tax. His answer, which is typical of him, was a passing insinuation that I did not know what I was talking about. I do not profess, Sir, to be a practising accountant, but I think I know a little about accounts and income tax laws. I am afraid the Member for Hong Lim is not quite an accountant and I fear for the clients who go to him for such service if he cannot interpret the income tax law for their benefit. According to the Laws of the State, Chapter 166 on Income Tax, Part XIII - Rates of Tax, Rights of Deduction and Allowances for Tax Charged, section 43 states: `Subject to the provisions of section 40 of this Ordinance there shall be levied and paid for each year of assessment upon the chargeable income of-

On a point of clarification.

If the Minister will give way.

No, I will not give way. We are now building schools with the co-operation of the Ministry of National Development. It was not so in the past. We never got that in the past. The Plan envisages 19 new schools each year: 14 primary and 5 secondary schools. We go according to plan and we work in co-operation with one another - no more the failure nor the dismal exhibition of the Member for Hong Lim when he was the Minister for National Development. I come now to the Member for Farrer Park. Unfortunately, he is also not here. He spoke on the new tax which the Government proposes to introduce for the professional workers and he said that the right to work should not be fettered. The Budget of this Government for 1961 does take into account the socialist principle of encouraging every citizen to work for his livelihood. That is why for this year we have introduced a 20 per cent relief for earned income up to a maximum of $1,000. This will take care of the majority of the salaried workers who, as single persons, will get the equivalent of $5,000 per annum. And that, I think, takes into account the majority of those who are in the lower-middle class outside the net for income tax. In conclusion, Mr Speaker, as I have said earlier on when commenting on what the Member for Tanglin had to say, the Government is to be judged not on a year-to-year Budget alone but at the same time on its development plans for the future. It will be seen that our plan envisages the expenditure of $876 million, vide Hansard of 29th November, 1960, Volume 14 No. 1, column 41. It is the intention of the Government to spend as capital expenditure the fantastic sum of $876 million, of which $500 million will be from our own efforts, and we hope to bridge the gap of $376 million either from overseas loans or assistance from overseas. It is only by ploughing back all that we have (all our surpluses) that we will be able to build a base for the future prosperity of the State. And therefore I fully support the Budget proposed by my colleague, the Minister for Finance. 8.31 p.m.

Mr Speaker, Sir, during the last few hours we have had different views expressed by the Opposition about the Budget policy outlined by the Minister for Finance. For example, the Member for Tanglin thinks that the Budget is too Left, that it stresses too much on class issues and that it holds no lolly for the well-to-do gentlemen with whom obviously he has been hobnobbing and whose views have been transmitted to us during the course of his speech. The Member for Cairnhill takes a rather confused view. On the one hand, he thinks we are not socialist enough, and on the other hand, he thinks we are too socialistic in our approach and, therefore, frightened off our investors. The Member for Joo Chiat also thinks that this is not a socialist Budget. The Member for Farrer Park, after congratulating the Minister for Finance for producing an excellent Budget, goes on to express doubts about the validity of some of the taxes which have been imposed. Sir, I can sympathise with the hon. Members opposite over their predicament when dealing with the Budget policy outlined by the Minister for Finance. They have to play a role which becomes increasingly awkward and tedious with each passing day. Their predicament is this: they tried very hard before the elections to convince the people that the P.A.P. Government must bring terror, chaos, strife, and economic misery, and that there must be a gradual decline of business and trade. That was what they solemnly stated in the newspapers. They swore to the electorate that if they elected a P.A.P. Government, these things must come about. Fortunately the converse has been true. They know it, as you can judge by the demeanour of the Opposition Members, who do not look frightened or impoverished, and they certainly look with confidence to the future. But politically they have to maintain this pretence - that there must be chaos, oppression, and terror. So the less true the myth that they propagated during the elections becomes, the more difficult it is for them to try to whip up a feeling of pretence that there is uncertainty, and oppression and that the people are more miserable than they were before. So today they have tried to present the Budget as an oppressive and unfair one. But is it oppressive or unfair? Sir, the Minister for Finance made it quite clear in his Budget statement that, in formulating its Budget, the P.A.P. Government has certain social and political purposes behind it. Briefly, these revolve around two questions. First, the Budget is formulated with a view to expanding the economy, and, secondly, to bring about greater social and economic justice. These are the two social goals aimed at in the Budget policy outlined by the Minister. In the past, there have been governments which had also declared these aims, but because they were either controlled by colonial officials or - by representatives of vested interests, the Budgets that they designed - though they might have proclaimed admirable intentions - were, in fact, deigned to protect the interests of those classes which had control of the government. Nobody can say that this Government has either colonial vested interests or representatives of wealth in its midst, and therefore we have no reason to defend the interests either of colonialism or of vested interests. I know, Sir, that not many of us like to pay tax. If we could avoid paying taxes, we would certainly try to do so. But the first question to ask here is are these taxes necessary? The answer to that question will depend on what uses the taxes would be put to. If we have an inefficient government or a government composed of men who are more interested in filling their pockets and setting up enterprises in other parts of the world, or men who work for and in the interests of a privileged minority, then all taxes become oppressive because they would be used for strengthening an inefficient, corrupt and reactionary government. But where taxes are used responsibly to expand the economy, to make life better for the people, to ensure a more equitable distribution of wealth and opportunities for the people, then taxes cease to be an imposition on the people because the taxes will eventually be returned to the people in the form of more schools, more hospitals, better social services, an expanding economy, and opportunities for more jobs. Therefore, the thing to do is not to ask whether the tax is good or bad, but to judge the goodness or badness of the tax by asking to what use would the money collected from taxes be put. Are they going to be spent on enriching selected individuals, either inside or outside the government, or is the money going to be used to enrich the material and cultural wealth of the people? But I know, Sir, that the Opposition cannot afford to ask these questions because, if they have regard for facts, then they would know that these monies are going to be transformed into services for the people. But they have to keep up this pretence of increasing misery under a socialist government, and therefore they try to exploit this natural disinclination of the people not to want to pay more taxes than is necessary. Sir, they might say that these taxes are unnecessary and that there is no need for these taxes; but during the course of the next year the same people will get up and say, "What is the Government doing about building more schools?"; "What is the Government doing about building more hospitals?"; "What is the Government doing about providing more jobs?" The Government cannot produce all these by just introducing a Bill and saying that this Bill will not cost the taxpayer any money. To do these things, Government needs revenue, and revenue does not come out of the pockets of a government. It has no private coffers, but it comes by way of taxation. And therefore, even long before the elections, the P.A.P. has taken the view that prosperity, expansion, and a better life cannot come about under the slogan of "prosperity by shaking legs". If you want prosperity, you must work for it. In fact, just before the elections the P.A.P. outlined its economic proposals in which it is frankly stated: (a) that socialism is not possible under the present setup, and therefore all the doubts that have been expressed about this policy, that it is not 100 per cent socialist, are groundless. We have never claimed it to be 100 per cent socialist. All we said was that we shall try to do what we can to rectify such injustices as may exist within the present framework. And that is all that this Budget claims to do. And (b) that economic expansion and reconstruction in Singapore would entail sacrifices on the part of everyone, including the workers. When that was published, I remember some of the newspapers and Members of the Opposition making capital out of it. In fact, a leader of one Party who is no longer represented in this Assembly gave a long interview to the Press wherein he said, "This shows that the P.A.P. is not fit to be a government because it enunciated an economic policy of what he called `policy of desperation'." We knew, and we frankly stated, that if we wanted prosperity, everybody had to make sacrifices, from the wealthiest down to even the worker. In the past, Singapore had been built on the sacrifices of many people, but the majority who made the sacrifices reaped only a small fraction of the benefits, and the people who really benefited out of the sacrifices made by the community as a whole were the minority. But under the P.A.P. Government, unlike the previous government, certainly this Budget tries to put forward the view that if it is prosperity that is wanted, then everybody has to pay; and the sacrifice will be distributed fairly - those who are better off will have to make more contributions to the community's coffers, and those who are not well off, less so. Therefore, it is very easy to say, "Why put up these taxes?", "Why not go without taxes?". In fact, Sir, if this Government were mad, it could perhaps follow the implications or some of the suggestions put forward, including those of the Member for Hong Lim who has said that taxes are unnecessary. We could say that we will dispense with all taxes for three or four years; that we can all make whoopee, and perhaps we can be returned under conditions where it will not be necessary for, and perhaps there will not be, an Opposition. We could live on our capital; we could disburse rewards; increase everybody's salaries; free housing, free schooling, free clothes, and even free food. That sort of policy is not one which the P.A.P. is willing to follow, because we know that that will eventually end in misery and starvation. And all the things that would come about as implied by the Opposition would be a situation of terror and starvation and misery. We have always stated quite frankly that every advance is made through the efforts of the people, and these efforts include sacrifices and hard work. Because it is only in that way that we can show that the democratic system which we are trying to establish can work. It is the people who have voted us in today - we have transferred political power to the community as a whole on the principle of one man one vote. The majority of them are underprivileged. They live in a society which has never given them a chance, and they will be increasingly doubtful and resentful of the democratic system if we can offer them no prospect and no future in the coming years. That is why we say we must make the democratic system attractive by asking everybody, and in particular the better-off classes, "You had better contribute to the community's coffers to ensure that social justice can be brought about peacefully and constitutionally. If you are not prepared to make those sacrifices, especially you, the well-to-do, then the sacrifices might be imposed on you by other more radical and more vigorous means." The contribution that everyone is making is really a kind of social and political insurance against the wrath of revolutionary violence. The price that we are asked to pay today is not at all oppressive. Nobody has said that the insurance premium, as it were, to ensure that the democratic system survives is all that oppressive. So the Opposition has to make the pretence - they have lately been saying that they have carried out private Gallup polls where the people said that things had gone from bad to worse. Let me say this. If the P.A.P. economic policy succeeds, this is the consolation that I offer them, though they might have to keep up this pretence by saying that things are getting from bad to worse - then the fears which they have been trying to inculcate remain largely a thing of the imagination. But if it fails, then I am afraid that this myth which they have been trying to propagate would become a reality, and pursue them God knows to what nearest lamp-post. Social justice can be brought about only by the well-off classes, so let them be prepared to make the sacrifices. There is no other way. In fact, though the Opposition Members have criticised the Budget, none of them has put forward an alternative to the policy outlined by the Minister for Finance. Therefore, I say that this is a small price that we have to pay for ensuring that the democratic system survives, by making it clear to the majority of the people that it is possible for us to get social justice under this society. 8.50 p.m.

Mr Speaker, Sir, this is the second Budget debate since the P.A.P. Government took office. May I preface my remarks by the observation that every Assembly, every Chamber, acquires a character of its own? Politically speaking, in the Singapore context, this Chamber is a much more cynical and literate Chamber than the last one. We all make noises here not for the cut and thrust of debate, but for the radio, the newspapers, our friends and supporters outside. We put forward a point of view, whether we believe in it or not; we shoot a line. Perhaps it is inevitable, as a result of the election returns on the night of 31st May, 1959, that this Chamber, consisting of 51 Members who were returned on that day, will go down in the annals of Singapore not as a debating Chamber but as a convenient forum for declamation, telling lies and, in some cases, downright perfidy and untruth; all in the hope that in this vicious rat race for newspaper space, you can get your point across and kill the other chap; to try and convey an image to the public that you are a champion of the people when, in fact, you are no more than just a scamp or a scallywag seeking personal power and glory; or to paint your enemy as a wicked, reactionary and treacherous man who sold out on his promises, either to win support or to deny it to his opponents. All of us know in this respect that we are more sophisticated, including our dear Member for Tanglin. His predecessors umpteen years ago in the Chamber across the street in the Victoria Memorial Hall, to my recollection, were of a different vein. They played up to the gallery in the Chamber and to respect, I think we must face the fact that granted the system of one man one vote, then we are not interested in what the other chap opposite thinks. But the effect is different on the thinking of men away from the Chamber who read two, three or four paragraphs or maybe one headline, or even half a caption. Therefore, Mr Speaker, Sir, while we are trying to maintain the best traditions of the parliamentary system of open encounter in a debating Chamber, let us not delude ourselves that anybody is really seriously interested in making an impression in this House as against making an impression in the country. Therefore, for that reason, the Member for Hong Lim fighting bare-fisted, continued reading his speech. He said he had the figures. I called him many things in many other places, where there was no privilege, without ill result to myself. But Mr Speaker, Sir, when we develop our traditions and the rules of debate, let us remember that if we do not modify and fit them to our circumstances, as the rules of Westminister were fitted for the circumstances of another country, and at a different time, then we shall only let ourselves be made use of for purposes for which this Chamber is never intended. With those preliminary remarks, Sir, may I go on to say that, although we have become more sophisticated and hard-boiled politically, I do not believe that we have thereby become more adept at working the democratic system of periodic mandates from the people on the basis of one man one vote. For the major premise of the successful operation of that system postulates an intelligent Opposition, intelligent not only in their immediate self-interest but also in their long-term self-interest, the interest of not bringing the House down. Sir, we have since half-past two this afternoon listened through a series of declamation. I would say that it contributed nothing, not one iota, to the people's understanding of what the Budget meant. The Member for Joo Chiat, with his grievous concern for businessmen, his friends and colleagues who keep on telling that they are losing money and that the world is getting greyer and greyer, had nothing to say. The Member for Geylang Serai was speaking back. I think this must have been a special occasion for him - for he spoke in English today and tried to live up to what he thought one of the leaders of a secondary party in the Opposition should do on such an occasion. And I congratulate him for trying to make the effort and play this role, and keep the system that we want to preserve going and ticking. Sir, I think the Member for Tanglin could not help himself. He honestly believed - I had a word with him outside; I did not want to interrupt him or make him unhappy - and he said that Hugh Dalton's theory supported him in the belief, that because we cut down the civil servants' allowances, therefore the currency circulation of Singapore, the Federation and Borneo was stagnating at 1,000 odd million dollars and, therefore, that was the reason for the general slump. Had we not cut down the civil servants' salaries, there would have been a boom generated here, in the Federation and in Borneo. I thought he had made a mistake, that he believed the figures given for currency were only confined to Singapore. But he said that, being a meticulous man who carefully read his facts and figures, he knew that they covered the whole of Borneo and the Federation, and he was convinced that the chain reaction-

On a point of explanation.

Yes, surely.

Sir, I did not want to go into details to explain that there was a slump here. But the prosperity in the Federation and Borneo balanced it up. The circulation was the same. Otherwise, Sir, if there had also been another slump in the Federation, then the position would have been different.

We never cease to be surprised in this Chamber by the Member for Tanglin. I did a little bit of elementary economics, and I would like to show him that if money was circulating in the Federation and in Borneo, then prices would have fallen catastrophically because there was a shortage of money in Singapore. I thought he was bemoaning the fact that salaries went down without prices going up. However that may be, I thought it is rather a quixotic gesture his saying, "I will give whatever I get to charity. You know I am resigning, and retiring at the end of this year." This is the sort of thing that gladdens our hearts, to know that we have a generous bighearted Opposition. The leader of the Opposition has been through so many things in the long years since 1948, that I think it is impossible for him now to take a simple straight and upright stand. He is now back with the group that he started with. He started by working with capitalist firms. He was decried by the people, so he resigned-

Order. I do not know whether the Prime Minister was in the Chamber when I indicated that I was trying to stop all personalities of that nature. Let us go straight on to the general principles.

Indeed, Sir. What I wanted to convey was the tremendous ease with which he could go through the contortions of a complete circle and come back to where he started from - back to the Member for Farrer Park and the Member for Tanglin who were once his political opponents. They now wind up as his political colleagues, friends and mentors. What does he really believe in? He is anti the professional tax. Why? The Member for Farrer Park has given a series of reasons. I am sure the Member for Cairnhill really does not know why, but he has to be anti something. He is anti the professional tax. We have not taxed the poor, so he is against our taxing the professions. He says he supports the income tax increase but not the decrease in the allowances. Then the sly lie that we are more friendly to capital. Sir, we want to create confidence. The hon. Member knows just as well as we do that what we have to face in Singapore all these years is not just to be friends with capital, because that is not going to help the situation. But we have to devise within our limited situation a balance whereby we can convince the workers that in this situation they have the best possible deal; and at the same time, to ensure that the best possible deal for the workers does not kill the goose that lays the golden egg. The hon. Member tried, but he did not succeed in convincing the workers that they got the best possible deal. He convinced the employer. Indeed I suppose the bosses in Tay Koh Yat and Hock Lee were convinced that that was the way, to ensure that business went on. But that is not our way of bringing confidence to people with capital. My postulation is that even if a person with capital had nothing but self-interest at heart, then he would be interested in seeing, not that he alone is given the confidence, and that the worker is kept down, but that both should be, and the system, kept going until such time as there is a major change in the surrounding circumstances. We must ensure that the worker is given a fair deal to his knowledge and to his satisfaction, so that an armed revolt to change the social order never takes place. Sir, the Member for Farrer Park is, I think, the least hard-boiled of all the Members on the Opposition benches. He has unloaded his conscience of what he believes should be said, and he therefore feels that he has done his job as leader of an Opposition Party by bringing across the point of view which he thinks he represents. May I first dispose of his one major point in the whole speech really relating to this Budget, and that is the professional tax? He says the right to work should never be taxed. Nobody is trying to tax the right to work. Nobody is trying to tell the lawyer, doctor, dentist, accountant, engineer, or structural engineer that he should not work. But we know that in a given social order these self-employable professions are lucrative ones; that if there is an extra million and a bit to be paid, they can well afford to pay it. I say, without any hesitation, that if we are to appreciate that amount of give and take which is necessary to the running of this kind of social order, then we must be prepared not to be dogmatic but to be practical in the circumstances obtaining. We are not talking of a socialist Britain where almost every schoolboy has the right to be a lawyer, doctor, dentist or engineer, because he has a completely free education sustained by the State from the primary school to the university. We have a different social order here. If you want to be a lawyer, doctor, dentist or engineer, then the odds are that you are one of the very few lucky scholars of the State, or you have a father or mother sufficiently wealthy to pay for it. These are privileged professions. You cannot practise as a lawyer unless you are qualified and unless the Bar Committee empowered by the Advocates and Solicitors Ordinance says that you can practise. This is the monopoly we are giving to certain professions. It is the same with the doctors and the dentists. I cannot practise as a dentist by just learning how to drill holes in a tooth and how to pull teeth out. If I do, I will be sent to gaol for breaching the Ordinance governing who can and who cannot practise as a dentist. In this given situation, therefore, we say that these are the group of people fortunately endowed in the present social order to pay the extra bit. The Member for Farrer Park thought that $500 per annum or $125 per quarter - it sounds more drastic - is too much. Sir, he did not say it was too much for him. He was spilling a few tears for those who would come after him. Well, if that is so, then we will wait and see what it is like from the income tax returns, including the returns from the young lawyers, doctors, dentists and so on. We are quite confident that this professional tax is just a flea-bite. If it comes to that, they are the people who have special privileges. In the Supreme Court there is a special Bar room for lawyers to change. It is air-conditioned at the expense of the State. They are not charged for it. And there are lots of other parks. They go to courts which are air-conditioned now in order that they can better discharge their duties. It is the same with the doctors. They have hospitals, ambulances on tap, and laboratories to tell them what particular vaccine is required to kill what particular bacilli. On principle, in this situation, I say this levying of a professional tax is definitely a progressive move. You are getting money from the people who can pay. It would be much easier, of course, for the Minister for Finance to slip in a 10 cent tax on every pair of shoes or umbrella or frying pan. Nobody would feel it. After all, hon. Members opposite will buy one frying pan each probably once in every three or four years. Lots of other people would want to buy frying pans. But we do not want to collect money that way. If this is not socialism, it is at least a little bit of social conscience. The Member for Farrer Park then went on to make another point. He said a few nice things. Usually it is done by any practised advocate. One says nice things in order that one can destroy. A brilliant group of Ministers, but terribly practical and realistic. Sir, we are accused of having failed because we have not managed the civil service. We have lost the confidence of the people. There is uncertainty in Singapore. There is economic stagnation. The situation is generally depressed. I could not help thinking that we would individually have all been much better off and probably leading happier and less burdensome lives, if we had made a different decision before the elections and had for some reason or other decided not to contest to win. The only consolation I have is that it would not have been as it is today. They never had it so good. Not since 1955 has there been a government which has established confidence in the employers. We are not interested in employers alone, but we are interested in creating a system which is just fair, honest, above-board and likely to endure because it is fair, clean and honest. That makes a big difference to our future. I do not pretend, Sir, that this Government exists for the benefit of keeping employers happy, but if it is necessary in the interests of the people as a whole to ensure that employers are not destroyed or taxed out of existence, then we have the courage to stand up and see that balances are maintained, regardless of what tortured unbalanced minds may try to make out of it. Sir, eight new taxes were listed by the Minister for Finance. I would have thought that he would have taxed to the limit of human ingenuity, that he would have tried to make out that here was a Government out to tax the poor, not the rich. Property tax and assessment, business registrations, stamp duty, increased assessment on rubber estates, increased rates on private lotteries, fees for the practice of certain professions, passenger tax on embarking air travellers, decrease in the rate of personal allowances on income tax, increase in the maximum rate of tax on personal income, and a special allowance for earned income. Only a tortured and sick mind would try and read into this an attempt to help colonial vested interests, to tax the poor to help the European companies which did not vote us in, and in whom we are not interested. For what earthly ghastly reason? As the odds become more and more difficult for those who have found themselves out on a lonely limb, it is not unlikely that as we go on, more and more fantastic allegations will be made, but not for the purposes of winning support in this debating Chamber, because nobody, Mr Speaker, Sir, with no disrespect to your august position, wants really to win your support. It would be flattering to know that, amongst the many thousands of people outside, Mr Speaker, Sir, there are many who believe that the policy one is expounding is fair and just. One has to be sufficiently cynical to understand that. The play of the system of one man one vote in this given situation leads gradually to a debasement in some cases where integrity of political purpose and principles are lacking, to a complete debasement of everything and anything worth valuing in any society - things such as truth, honesty and decency. Sir, after one past sitting, I have had occassion to say in no uncertain terms outside this Chamber what I thought of people here who behaved in this way and we had peace and serenity for two sittings thereafter. Our intentions are quite clear. It may be quite possible that in the next few days, you, Sir, will have a much more lively time than you really deserve. We all expect lively debates. In fact, it is part of the play of intellect and wit; or if wit is lacking, then at least some buffoonery to take away the tedium and monotony of the day. But one thing I say: in any wicked and deliberate lies, falsehoods and distortions, people play them with their gloves on, but we play them with our gloves off. In this Chamber, Sir, it is bad to expose knuckle-dusters, but one can use knuckle-dusters all the same, and outside this Chamber we can well look after ourselves. I am sorry that Members of the House have to waste the time of other Members who have to listen to why hawkers and taxi-drivers are being bled to death by smoking 20 cigarettes a day, and why the people's income tax has increased to $1,000 right up to infinity in the lower range; from never having to pay income tax to paying $5 income tax, and it goes up to infinity. But we have had all this: rural farmers, squalid poverty, taxing the poor for the rich, protecting the interests of the colonialists, gratuitously telling us also how to win the next elections, blueprints for victory, hold snap elections in 1963, get rid of all taxes, give money away, and then we win again. I am sorry for this, but let me just do a simple A. B. C. on this business of hawkers and taxi-drivers. They are in the public image partly because we made it so. We built it up as an example of the man in the Clapton omnibus. The Member for Hong Lim did not think of it. There were other brains in the Party. The man in the Clapton omnibus was the English idea of the common man. The common man here is your worker in the factory, your hawker, your taxi-driver, your trisha-rider, and I defy anybody, including the Member for Hong Lim, despite the extent to which he can comport his mind, to spell out from this Budget an intention to take one cent from them which they should not pay. Property tax, business tax, stamp duty, increased assessment on rubber estates. Well, if any taxi-driver has a rubber estate, he should pay assessment on it. Rates from private lotteries? He is not a member of the clubs that run these private lotteries and I know of no working men's club that runs this one-armed bandit. Those who run it are usually in the middle income groups. Professional tax, passenger tax-taxi-drivers and trisha-riders going by air to Kuala Lumpur pay an extra dollar. Decrease in rates of income tax-do they pay tax? There is no taxi-driver or trisha-rider or hawker in the income tax books. The Member for Hong Lim ought to know these things, but he has to go back to the taxes which he agreed on to try and spell it out. The 20 cigarettes a day one smoked since 1959; the petrol one used was what he agreed on. Sir, I respect a good opponent. I may not like him but I respect him because he can give you as hard as you can give it to him, but I cannot help despising the perfidious fools-

Order. I think the Prime Minister must be aware of the fact that he has been skating on very, very thin ice. The expression "perfidious fools" was obviously directed against the Member for Hong Lim. The Prime Minister must withdraw an unparliamentary expression of that nature.

Sir, if only you had given me a chance to proceed, I would have squashed any such qualms in your mind. We have no perfidious people in this Chamber. We are all honourable men here. It is when we get out of this Chamber that we are wicked, perfidious and downright so and so.

Order. Nevertheless, I am satisfied that that expression has a direct bearing on the Member for Hong Lim. It ought to be withdrawn.

Nevertheless, Mr Speaker, Sir, I think the point I want to make has been made, and that is the point. It does not matter really.

Will the Prime Minister withdraw the expression?

Yes, surely, Mr Speaker, Sir, but not for the effect on the Speaker. Let us get this very clear, Mr Speaker, Sir, I withdraw unreservedly but I have, with complete cynicism working this system within the Standing Orders, said quietly to the people of Singapore what a lot of decent and I hope right-thinking people believe to be true of even honourable Members of this august Assembly. Sir, we have to wear our sins round our necks, and the Member for Hong Lim is one of them. We have made very few mistakes, Sir. There were difficulties we did not anticipate running into, and he was one of them. But the Member for Farrer Park is wrong if he believes that here is a Government that does not know how to work the system, including the civil service. Whatever our shortcomings - and there may be many - I am proud to say that my colleagues (not just in the Cabinet), my supporting team of Parliamentary Secretaries and Assemblymen have basic dedication, not selfishness. You will remember some Members in the last Assembly, Sir - Mr Lazarous, Mr Lee Choon Eng and Mr Mak Pak Shee. Sometimes I think we ought to cleanse our past, but whatever our other shortcomings, we have given an honest and effective government; and the business of a government is to govern in the interest of the people. We have come to grips with our problems after 1½ years. We are beginning to produce results. We will continue to press on, and I hope in the coming years, or even in the coming months, even the Member for Farrer Park would find it difficult to say that his is the best. As for the hon. the leader of the Opposition, if he were honest in not wishing to make political mention of the fact that he is in the Opposition, he would say that, knowing the trials and tribulations that the country was faced with, knowing what he had been in for in the last four years from 1955 to 1959, he never expected that there could emerge a government able to maintain the State, to give it coherence and purpose, and to make progress. 9.03 p m. Dr Goh Keng Swee rose -

In reply?

In reply, Sir. Mr Speaker, Sir, the first day of the debate on the Government financial policy is generally regarded as a field day for the Opposition. This is the opportunity for them to roam far and wide on the proposals contained in the Budget Statement. I cannot help feeling, however, Mr Speaker, Sir, that the Opposition on this occasion have been singularly insipid. The debate started off with the Member for Joo Chiat who came out with a rollicking big piece of jesting. Here is a man who wants to introduce unemployment insurance, old-age insurance, the restoration of the whole of the variable allowance to the civil service, to increase the pay of the Work Brigade, to set up trade commissions all over the world, including the City of Peking; and yet he is worried about the tax increases that we are introducing. Having delivered his speech, he duly departed from this Chamber, never to return. And this rather lends credence to a report from a reliable source that the Member for Joo Chiat is prepared to resign his seat for a consideration of $20,000.

Order. I think the Minister for Finance cannot make that allegation and get away with it. I think he ought to withdraw that allegation.

I am not quite sure in what way and under what particular ruling of the Standing Orders you consider this statement reprehensible.

All I can say is that it is highly improper and I think the Minister ought to withdraw it.

If you so will it, I withdraw it. I do not want - and time does not permit me - to cover in any detail the points made by the Opposition. I do want at a later stage to deal with some of the statements made by the Member for Hong Lim. But generally, the principal point put forward by Members of the Opposition was to challenge my contention that there has been a solid and substantial economic revival this year. I made my Statement and produced as much evidence as possible by way of statistics of trade, production and finance in support of my contention. On the other hand, the Opposition, on the most dubious of evidence, disputed the fact that any revival has taken place. They cited unnamed business friends of theirs - and there is no doubt that members of the S.P.A. are well related to businessmen - without specifying at all in what trade, in what business and in what form, stagnation has taken place. The Member for Cairnhill attempted to be more specific than the others, and cited the closing down of coffee shops as a true indication of business stagnation. Now, no serious student of economics will pay the slightest attention to evidence of this kind. Only in one respect, however, did the Member for Cairnhill produce evidence in rebuttal, and that is when he challenged my figures of cargo loaded in the Singapore Harbour Board. There is no discrepancy at all between the statement that he read in the newspapers and my remarks in my Budget statement. What he failed to understand was that my figures related to general cargo and did not include mineral oil and vegetable oil in bulk. And quite rightly so, because for the last four or five years, there has been a long-term decline in the quantity of mineral oil, petroleum, crude oil, and bunker oil. The long-term decline in that trade in Singapore has nothing to do with the internal conditions in Singapore. It is just due to a general over-supply in the oil industry, fiercer competition, and installation of oil supply points in various ports of the world. Excluding this declining element of oil, my figures, as I said, did indicate a fairly substantial increase in both volume and value of trade. There is a general point made, too, that the P.A.P. economic policy has differed from the policies enunciated before the general elections. Mr Speaker, Sir, if you will recall, I went to great lengths to explain that our present policies are absolutely consistent with the policies we declared to the electorate and the general public before the elections. I will return to this point later. I said sometime ago that I intended to spend some time dealing with some statements made by the Member for Hong Lim. Mr Speaker, Sir, that hon. Member has been called various names and epithets which may not be repeated in this Chamber. You will recall, Sir, that after a sitting of this Assembly two months ago, the Prime Minister called the Member for Hong Lim a liar and a rogue. In the course of proceedings in a Press conference following that, my colleague, the Minister for Labour, added in another term "coward". Now, Sir, in Biblical times, there was a legendary character named Beelzebub, who was known as the prince of liars. And, of course, lying has been a human failing from time immemorial. In more recent days, however, this has been reduced to both an art and an exact science.

Order. I think the Minister for Finance is attempting quite skilfully to get round the Standing Orders, but I would suggest that he now concentrate on what has been said about the general principles of the Government policy.

As you quite rightly say, Sir, I have to tread rather warily over this ground, but this is by way of introduction to explain just that form of prevarication contained in the statement of the Member for Hong Lim.

I think the word "prevarication" used of a statement of a Member of the House is not parliamentary.

I withdraw, Sir, if that is the rule of the game. Speaking more broadly, I was about to develop the theme that there are two types of lying. One is what Dr Goebbels said, that is, to repeat a big lie and do it persistently, eventually making the general public believe in it. The other is what we have seen more recently in the case of Senator McCarthy, who did not believe in hammering home a big lie, but in spreading a lot of little lies, which add up then to a big smear. The Member for Hong Lim, I would say, is no Dr Goebbels and the various mis-statements of fact and distortion of opinion contained in his statement make one believe that he is a supporter of the McCarthy school. Now, Sir, if we were not restricted by Standing Orders, I would have come straight to the point and said that I want to talk about his whopping downright big lies. But the rules of the debate being what they are, I will merely say that I will deal with a number of terminological inexactitudes indulged in by the Member for Hong Lim. We have to deal with matters of principle, but I think it is necessary to show the Member for Hong Lim as a man who is extremely reckless, extremely blatant and unashamed when it comes to distinguishing truth from falsehood, facts from illusion. Sir, may I now come to the ten items? I will have to go through them very quickly. 1. The Member for Hong Lim said that the big European firms here make at least half of the profits earned in Singapore. There was no evidence whatsoever, although he assured us that he had spent a week in making his calculations. If he refers to the 1958 Annual Report of the Income Tax Department, he will find that profits made in Singapore amount to $375 million. He produced a book of sharebrokers and gave details of profits of the biggest European firms. My recollection is that the total profits do not exceed $7 million. I am not here to defend the proposition whether European firms should or should not make money. The point is that he made that statement and that it was inaccurate. 2. The Member said that he saved the civil servants in the lower grades from pay cuts. I deny this most categorically. I had no assistance and no advice at all from him. 3. He said that a 5 per cent increase in tax on incomes of $10,000 a year would yield little by way of additional tax. This is completely untrue. We expect this increase to yield an additional tax of $1 million per year or more than the whole increase from new taxpayers brought into the tax orbit. 4. Inexactitude No. 4. He said that Shell Company pays no tax on profits in Pulau Bukom. That was a definite statement and he challenged me to deny it. Sir, the Member was formerly the Minister for National Development, under whose charge the assessment of properties is allotted. An ordinary man will say that he knows what the facts are. And the facts are that Shell Company is paying tax on the profits in Pulau Bukom at the rates applicable to that section in the rural areas. It is true that when he was the Minister for National Development, he tried to increase the amount of assessment that Shell Company was paying - a very worthy effort. Unfortunately, this led to no result at all because he had chased away all the officers from his Assessment Office.

On a point of clarification, Mr Speaker, Sir.

Time does not permit me, Sir.

Could I ask the Minister -

Order. The Minister is not giving way.

No. 5, Sir. He said that the Public Works Standing Committee was an innovation introduced by this Government to embarrass him. The Public Works Standing Committee is a long-standing institution and allowed for under General Orders. There is nothing at all -

On a point of clarification again, Sir.

If the Member will give way.

No. Then No. 6. These are minor - I cannot use a four-letter English word - inexactitudes. He said that the Cabinet Estimates Committee was not responsible to the Cabinet. That is absolutely untrue. He made some statements regarding the incidence of taxation - that taxi drivers woud have to pay so many million dollars, trishaw riders so many million dollars, and so on and so forth. There was no explanation of how the calculations were made. Where were the data? None whatsoever. The Prime Minister has already disposed of this point and I will press on to the next one. In the opinion of the Member for Hong Lim, tax increases were unnecessary, having regard to the amount of additional tax, namely, $45 million, because we could have saved that amount of money by pruning expenditure. And he even went to the extent of quoting from an election campaign statement of the Party saying that this is what we shall do. I was looking forward to some suggestions from the Member for Hong Lim as to how we could save an expenditure of this magnitude from the public fund. Indeed, if he had made any proposals, we would have listened to them with interest. But having said that he would save $45 million in the Expenditure Estimates, he did not specify even one item - not a single one. Finally, Mr Speaker, he said that companies do not pay tax, and when my colleague, the Minister for Education, sought clarification on that, he confirmed that that was the case. It seems to me absolutely appalling that a person, whose profession is accountancy, could have made this most elementary blunder. Sir, a week's calculation - Mr Ong Eng Guan rose -

Is it on a point of clarification?

On a point of order, Sir.

Point of order.

Mr Speaker, Sir, the Minister for Finance has just now touched on my professional capacity, but he has not substantiated my charge that at present our company tax is not the company tax we know of in the United States, Australia or India, and that -

Order. That is not a point of order. Dr Goh.

I did not elaborate on that, Mr Speaker, Sir, because my colleague, the Minister for Education, had already explained that at great length, and during his explanation the Member for Hong Lim was probably not present. Now the proposal, Mr Speaker, Sir, a 10 per cent company tax without allowing - if I understand him right - a set-off in respect of dividends. At present the company tax is 40 per cent and the money so paid can be used as a set-off against dividends distributed. But if the company does not distribute the whole of its profits, then the company itself, as an economic entity, will have to pay tax on the undistributed profits.

On a point of clarification, Mr Speaker, Sir.

Does the Minister give way?

I have only ten minutes to wind up.

The Minister does not give way.

Indeed, in modern business, almost all public companies plough back a substantial part of their gross profits into their business. No studies have been made here, to my knowledge, of the exact percentage of profits that have been ploughed back. But obviously under the present arrangements, if public companies were to keep back one-quarter of their gross profits and not distribute them as dividends, then the yield from tax would be the same as under the present tax arrangement. That is a matter of simple arithmetic. But if more than a quarter of the gross profits are retained, then this new tax proposal will have a smaller yield than the present arrangement. And if I were to hazard a guess as to the proportion of gross profits retained in businesses, I would say that it would be nearer half than one-quarter, taking all the companies as a group. Then there is the bright proposal to tax military vehicles. This has a rather long history. The implication here seems to be that the Government does not receive any payment from the Defence Department of the U.K. Government in respect of property, vehicles and other things owned and run by the War Department. This is not quite true. They are paying a sum of $900,000 a year in lieu of the payment of rates on their property. We have not agreed that this amount is a fair and equitable compensation. But the point is that payment is being made. When the Member for Hong Lim was the Minister for National Development, we protested strongly against the inadequacy of this contribution, and he accordingly undertook to reassess all Service properties with a view to increasing this contribution - a praiseworthy undertaking. I remember distinctly that I gave him four months to let me have details of the revaluation of Service properties. But he was quite unable to produce it.

On a point of information, Mr Speaker, Sir.

If the Minister will give way.

No.

The Minister does not give way.

It was quite beyond his means, for the same reason that he had chased out all his technical staff. Sir, may I be permitted, in the short time at my disposal, to bring to perspective the Budget proposals? As I have said, this cannot be considered as a one-year attempt in isolation. We must see it in the economic setting we find ourselves today - a tremendous population growth with its inevitable increase in the numbers of young men and women looking for work every year. With political changes, there is a need not only to create more jobs for the growing population, but also to bring about more social justice. All this means getting money. Money, first, to finance development expenditure so that we can make it easier and more certain that new industries will be established in Singapore, both by local businessmen and overseas businessmen, or by joint participation between themselves. Then, on the other hand, we have to provide for improved social services, more schools, more assistance to those who do not have regular incomes - assistance in the way of public assistance, unemployment relief schemes and so forth. In order to get this extra money, we have to decide from which sectors of the economy the money must come from, and who are the type of people to pay for this. It is very clear from the nature of the new tax proposals that the general principle is to spread the burden as broadly as possible amongst those who can afford to pay. Hence, people such as shopkeepers, lawyers, doctors, engineers, landlords, people who travel by air, limited companies, and so forth have been called upon to make a small extra contribution to the general welfare. The amounts are well within their capacity to pay. To represent the Budget as soaking the poor to pay for the rich is such a travesty of the truth that it is hardly necessary for me to rebut it. I wish to conclude with some observations as to the general problem that is facing us and the solutions that are available to us. Let us never assume that the difficulties ahead are going to be easily disposed of without effort and sacrifice by large numbers of people. I have referred in my Budget statement to the fact that all Asian countries try to create material prosperity for their subjects. But few people are aware that this is going to be a long and harsh journey. What I have tried to explain in my Budget statement is that we must take a longer perspective, and within the development plan, try to form a framework of our period 1961 to 1964. But even this period itself, with all the money and the resources that we intend to put in development, represent but the first step in a very long journey. But this I can say with confidence. In taking this step, we have a Government that is in sound condition and a country in good heart.

Question put, and agreed to. Resolved, That the Assembly approves the financial policy of the Government for the year 1961.

Resolved, "That this Assembly do now adjourn." -[Dr Toh Chin Chye]. Adjourned accordingly at one minute to Ten o'clock p.m. MAIN ESTIMATES AND DEVELOPMENT ESTIMATES, 1961 (Cols 0205-0210)