Hansard, 1967-12-21

Under the provisions of clause 2 (d) of Article 30 of the Constitution of Singapore. I have granted permission to Mrs Devan Nair (Moulmein) to be absent from the sitting of Parliament today, the 21St December, 1967. (P.COOMARASWAMY) Speaker, Parliament of Singapore.

asked the Minister for Finance (a) how many civil servants have retired on reaching the age-limit since 9th August, 1965; (b) how many of them have been re-employed in Government service and which department employs the most; (c) how many retired officers have been re-employed for more than one year, the reasons for their continued employment and the basic salaries they are being paid; and (d) if Government will consider avOiding the re-employment of retired officers for more than one year so as to make more jobs available for Singapore's growing population.

Sir, a total of 1,075 civil servants retired on reaching the age limit since 9th August, 1965. Of these, 73 persons or 6.8 per cent have been re-employed. The hospitals and primary schools employed ihe largest numbers. The hospitals le employed a total ef 16 pensioners, 14 of whom are medical ancillary staff and 2 are medical officers. The primary schools re-employed 12 retired teachers. Twenty-nine retired officers have been re-employed for more than one year. A re-employed pensioner is normally paid four-fifths of basic salary and variable allowance or the difference between his last drawn salary and his pension, whichever is the lesser. The Government does not re-employ retired officers without good reason. The number of retired officers re-employed for more than one year, namely, 29, will not make any difference to the level of unemployment.

(In Malay): Mr Speaker, Sir, if I am not wrong, the Minister for Education has stated that there are enough teachers. Why are retired teachers now being re-employed?

There are only 12 retired primary school teachers. I do not think that is a very large number.

"to repeal the Corporation Duty Ordinance (Chapter 159 of the Revised Edition)", recommendation of President signified; presented by the Minister for Finance (Dr Goh Keng Swee); read the First time, to be read a Second time on the next available sitting of Parliament, and to be printed.

"to establish a Redundancy Payments Fund and for matters connected therewith", recommendation of President signified; presented by the Minister for Labour (Mr Jek Yeun Thong); read the First time, to be read a Second time on the next available sitting of Parliament, and to be printed.

Resolved, "That, notwithstanding the Standing Orders, the second and third readings of the Supply Bill for 1968 and the Supplementary Supply Bill, 1967, be taken today." - [Dr Goh Keng Swee].

Order for Second and Third Readings read. 2.36 p.m.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Main Estimates of Revenue and Expenditure for the year 1968 have been considered and approved by the House as Cmd. Paper 26 of 1967. Under section 85 of the Constitution of Singapore, Heads of Expenditure other than statutory expenditure to be met from the Consolidated Fund have to be included in a Bill to be known as the Supply Bill. The purpose of such a Bill is to provide for the issue from the Consolidated Fund of the sums necessary to meet the expenditure and the appropriation of these sums for the purposes specified therein. The Supply Bill before Members is to give legislative approval for the issue of funds from the Consolidated Fund to meet the sums of expenditure for 1968. In the Schedule to the Bill are shown the various Heads of Expenditure and the sums that may be incurred in respect of each Head. These have been approved by the House in the Estimates of Expenditure for 1968 and appear in pages 53 and 54 of Paper Cmd. 26 of 1967. Once the Supply Bill is approved, I will be empowered to issue warrants authorising expenditure up to the amount under each Head as shown in the Bill to be paid out of the Consolidated Fund.

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

Dr Goh, will you please move the Third Reading?

Sir, I beg to move, "That the Bill be now read a Third time."

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

Order for Second and Third Readings read. 2.38 p.m.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The purpose of this Bill is to provide statutory authority in accordance with clause 2 of Article 85 of the Constitution of Singapore for additional provisions for expenditure in excess of the pro visions for expenditure authorised in the Supply Act, 1966. These additional sums have been scheduled as Supplementary Estimates and laid before Parliament.

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

Sir, I beg to move, "That the Bill be now read a Third time."

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

Order for Second Reading read. 2.40 p.m.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." This is a short Bill. Its purpose is to seek discretionary powers for the Minister to grant exemptions from the prohibition of female workmen working at night. "night" in the context of the present provisions of the law means a period of not less than 11 consecutive hours including the interval between ten o'clock in the evening and five o'clock in the morning or such other interval of seven hours as the Minister may by notification in the Gazette prescribe for any particular industrial undertaking or branch thereof or kind of labour. The restriction on the employment at night of female workmen is in accordance with the requirements of the International Labour Convention and was introduced into the Labour Ordinance in 1955. The situation then existing did not warrant the employment in Singapore of female labour at night. However, with the increasing impetus of industrialisation in Singapore, certain export-orientated industries find it increasingly difficult to meet production targets without introducing a night shift in which female employees may have to be employed in certain kinds of labour. The law as it stands, however, will not permit the employment of female workers beyond twelve midnight in view of the very restrictive interval period of seven hours contained in the law. Apart from allowing for the variation of this prohibited interval, there is no provision for the lifting of the restriction entirely in certain cases. The structure of our economy has changed and will continue to change more speedily with the progress of industrialisation, and it will be necessary, in the interest of the economy, for some factories, especially those which are export-orientated, to work on a 24-hour shift system which will involve the employment of female workmen at night in certain kinds of labour. It is, therefore, necessary to take account of the situation to ensure that existing legislation does not stifle industrial progress and expansion and deprive the creation of employment opportunities to our people. The logic of the situation demands that the present legal restriction on the employment of female workers during a night shift should be relaxed so that certain industries or undertakings can introduce a night shift and increase their productive capacity to meet the demands of our export market. What is even more important to us is that by allowing female workers to work in the third shift, we are able not only to utilise the expensive equipment and factory space more profitably, but also to create more employment opportunities for our workers. A number of countries have provided for the relaxation of night work in respect of female employees. These countries include the United Kingdom and Japan. It is pertinent to point out that highly industrialised countries have thought it necessary to relax the restriction in the interest of their economy and, therefore, a relaxation of this nature would be of even greater benefit to a developing economy such as ours. Mr Speaker, Sir, there are certain categories of female employees who even now work in shifts round the clock, tor example, nurses and airline workers in consonance with the social and economic demands of these vocations. It must also be mentioned that our female population today is more progressive and sophisticated than they were before, and that the well-developed social services in the country serve their needs most satisfactorily, both from the health and security points of view. The present amendment does not do away with the existing restrictions, but only gives powers to the Minister to grant exemptions where it is desirable in the public interest to do so for the purpose of maintaining or increasing the efficiency of industry. It will not in any way affect the protection that female employees now enjoy, because before an exemption is granted their interest will be very carefully considered and in most cases we will consult the union before we agree to exempt. But this is only applicable to those unions which are willing to work with the law. To the Communist-controlled unions which have every intention to break the law, I say it is a waste of time to consult them. Mr Speaker, Sir, I beg to move. Question proposed.

Mr Speaker, Sir, I know it is rather difficult to use certain terms and words. But these two words "female workmen" really offend me. I cannot, for the life of me, understand why our workmen should become females. Why cannot we use better terms like "female labourers", "female employees" or "female workers", rather than "female workmen"?

I seem to remember that these are words used in the Ordinance which this Bill seeks to amend.

Mr Speaker, Sir, I rise in support of the proposed Labour (Amendment) Bill, 1967. My reason in supporting the proposed amendment Bill is that, from my experience as one of the secretaries of the Pioneer Industries Employees' Union, I have found that the absolute prohibition against the employment of female workers in night shifts is not conducive to [he industrial development of Singapore. There are certain industries, such as the textile industry, where the jobs to be performed by workers are of a very delicate nature requiring infinite patience and a light touch. For such kind of work, women workers are riiore suitable than male workers. But because of the present absolute prohibition against employing women workers on night shifts, employers in such industries have no other choice but to employ male workers during the night shifts. As to why night shifts are necessary, the explanation is that because it is economical to utilise a set of equipment continuously rather than to utilise double the equipment half the time only. Also, the exigency of business may require factories to operate continuously for 24 hours a day in order to enable deadlines for deliveries to be met. During the present session in this House, Members have heard the Minister for Finance analyse the economic situation in Singapore and emphasise the need for Singapore to develop more industries and to cultivate a bigger export market. One factor which may attract foreign investors to Singapore and determine the competitiveness of Singapore goods in foreign markets is productivity of labour. The use of male workers on night shifts in industries where women workers are more suitable is not a circumstance which is conducive to the promotion of higher productivity of labour. Members of this House may then ask why it is not satisfactory to employ male workers in such industries. One explanation may be that male workers who are employed on such night shifts find the work uninteresting and uninspiring. Another explanation may be that male workers do not have the necessary patience of the female workers to do such work. Then again, the wage level in such industries may be lower than the wage level in other industries in the Jurong Industrial Complex. I shall be talking more about this wage level later on. But for the present I shall confine myself to the explanation why employment of male workers instead of female workers on night shifts in certain industries is not satisfactory. Because of the many reasons which I have just enumerated, there is a high turnover among the male workers who are at present employed in night shifts as a result of the absolute prohibition against female workers. I am sure that Members of the House will agree with me that any high turnover of labour force, whether involving male workers or female workers in any industries, is not a satisfactory situation. In such industries where women workers are more suitable, it must also be appreciated that workers employed in such industries must undergo long intensive periods of training. The wastage of labour, therefore, can be imagined when workers leave their employment immediately after the end of the period of training or even before the end of the period of training. Because of such workers leaving their employment, new workers have to be employed to take their place and this means that new employees must undergo similar long intensive periods of training. In such a situation it is not difficult to understand that the workers cannot attain a higher level of efficiency during their period of training. And this is the situation in those industries where female workers are more suitable but are prohibited from work on night shifts, because of the high turnover of male workers employed on such night shifts. The production of the factories involved suffers as a result. It was in these circumstances that some of the employers who are most affected by the absolute prohibition against the employment of women work ers on night shifts approached me to make representations to the Minister for Labour in respect of section 50 of the Labour Ordinance, so that the absolute prohibition against the use of women workers on night shifts should be removed. I, accordingly, conveyed their views to the Minister who, I am happy to say, is also of the view that the absolute prohibition is impractical and not conducive to the industrial development of Singapore. It must be pointed out that the Labour Ordinance was enacted at a time when Singapore's economy was essentially orientated to the export-import trade. There were then not many manufacturing industries, and those that existed do not justify the use of women workers on night shifts. The present situation is different. At the risk of repeating myself, I must point out that there are now in Singapore many industries where women workers are more suitable than male workers. This situation will continue in future when more industries are attracted to Singapore, but such industries which require women workers may be discouraged from coming to Singapore if they find that they cannot employ women workers on night shifts. The present amendment will remove the absolute prohibition against the employment of female workers on night shifts and substitute in its place a qualified prohibition with an enabling provision for the Minister to exempt any industry or branch thereof from such prohibition. I think the statutory safeguard against the exploitation of women workers by unscrupulous employers is adequate. And I am sure the Minister will make an exhaustive investigation before granting exemption from such prohibition to any employer making an application to him in that behalf. I, as an official of the Pioneer Industries Employees' Union, can assure Members of the House that the union will also see to it that, where women workers are employed on night shifts, all of them will receive the special allowance or night-shift premiums in line with those prevailing among the other industries in the Jurong Industrial Complex. In this context, I wish to make some reference to the surprising remarks of the Member for Delta, who has said that the whole of the Jurong Industrial Complex is one big chaos, presumably including the Pioneer Industries Employees' Union. As to the specific allegation that workers, particularly women workers, are earning a wage of $2.50 per day, I wish to point out that these are allowances paid during th.e period when the workers are receiving training. Such periods of training are seldom more than six months, and once they have completed their training, workers receive an immediate increase in wages. I can assure the House that the use of women workers on night shifts does not necessarily mean exploitation of women workers. My union, the Pioneer Industries Employees' Union, in spite of the derogatory remarks made about it, has always protected and promoted the interests of the workers and will continue to do so in the Jurong Industrial Complex. Finally, if there is any significant number of workers who are not members of the union, it is because they are still under training or on probation. Such workers may not be able to become members of the union. This is an accepted principle in industrial relations in Singapore. But if the Member for Delta knows of any specific instance of exploitation in Jurong, I should think it is her duty to furnish such particulars to the Ministry of Labour, if not to the union. 2.55 p.m.

(In Malay): Mr Speaker, Sir, I cannot understand the intention of the Minister for Labour in bringing forward this amendment Bill which precludes women from working at night. It is correct that female workers should not be asked to work at night. If there are female workers working in industries, they should work during the day. The place for female workers, especially married female workers, to work at night is the house, in the house they can look after their husbands and children whom they leave during the day. To the best of my knowledge, the wife of the Minister for Labour is working. I am quite sure he does not wish his wife to work at night, leaving him alone to tend to the children. Mr Speaker, whilst not allowing female workers to work at night, according to section 50 subsection (1), the Minister may exempt any employer from asking his female workers to work at night, if he is satisfied with his application that it is in the public interest or to increase efficiency of the industry. Mr Speaker, the Minister for Labour is of the opinion that female workers when working at night are more efficient than male workers, but I cannot see how female workers can show extra skill or increased efficiency in this respect. I have also heard from the Member for Telok Blangah just now that female workers are more patient than their male counterparts. I would like to cite an example in the Singapore Telephone Board. Previously the telephone operators who worked from 7 a.m. to 5 p.m. were female operators, and from 7 p.m. to 7 a.m. the switchboards were attended to by male operators. But now for 24 hours of the day the trunk call and inquiry services are looked after by female operators. According to the employers, this is to increase the efficiency of the S.T.B. But both the female and male operators have the same kind of work at the switchboard - connect the plug, enquire and pull it out. If this is a means to attract callers, then this may be the reason. I cannot, however, see the extra efficiency of female operators. I hope this amendment will increase the efficiency of the industries and I also hope it will not be a source of inconvenience to the household. Mr Speaker, I trust the Minister, when exercising his discretionary powers to exempt applications from employers, will consider whether they are for a good purpose or not.

(In Mandarin): Mr Speaker, Sir, I fully understand the intention of the Labour Minister in introducing this amendment Bill, which is to gear our legislation to the industrialisation of Singapore. We know that this is a very competitive age. In order to progress in our indus trialisation, it is necessary to increase the efficiency and productivity of our labour. This is a good intention from the outset. But it may give rise to two problems. Firstly, as the Member for Telok Blangah has said, the wages of female workers are lower than those paid to male workers. I do not know whether there is really some form of exploitation, because if low wages are paid to female workers, then employers will tend to employ more female workers. As a result, there will be more unemployment among the male workers. This is one point which I wish to bring to the attention of the Minister. Mr Speaker, in order to give facilities to and make it convenient for the em ployers, we must advise them not to exploit the situation. The second problem arises in cases where employers may have female workers. If night shift is compulsory for female workers, then some inconvenience will be caused to the household of the female workers concerned. Before any compulsion is exercised on working night shifts, the employers should ask the female workers whether they agree to working night shifts or not. If some female workers are not prepared to work night shifts, I think they should not be asked to do so.

(In Mandarin): Mr Speaker, I only wish to touch on one aspect of this Labour (Amendment) Bill. It is the labour policy of the Government to help the workers. This is a progressive policy which is difficult to find in South-east Asian countries. We have every reason to be very proud of it. Comparatively speaking, our labour policy is better and more enlightened than that of other neighbouring countries in this region. However, in my humble view, if we have a new labour policy, then there should be no distinction between female workers and male workers in respect of labour. They are workers all the same. We should not distinguish between the sexes as far as labour is concerned. It is the policy of the P.A.P. Government not to make a distinction between the sexes. Of course, in anatomy there must be some differences. A male is a male. But in so far as the working class is concerned, there should be no distinction between female and male workers. In my view, there should be equality between workers of the two sexes, equal pay for equal work. This is in the manifesto of the P.A.P. According to this progressive labour policy, if we should come across any female workers receiving lower wages than men, then, as a progressive labour Government, we should not allow this to happen. Mr Speaker, I spoke earlier in this House about the poor treatment given to workers in the Jurong Industrial Complex. I was not talking about female workers particularly. I was just passing a general remark that the wages paid in the Jurong Industrial Estate are generally poor. We should not sacrifice the interest of labour in order to cut down the cost of production. It is on this point that I spoke earlier. We must give some thought to the question of whether labour will benefit by this kind of productivity increase. We should not gauge the cost of production in terms of labour only. We must not forget that if we cut down the cost of production in terms of labour only, that will give more benefit to the employers and the capitalists. It is the business of employ ers and employees together to shoulder a lowering of the cost of production. I think the wages of female workers are not so attractive as those paid to the male workers. I do not know whether the Labour Minister is aware of this. In my constituency there are many female workers working in the Jurong Industrial Estate. When I saw them, they expressed the same sentiments. Mr Speaker, I do not want to bring this matter up myself because Singapore has many unions in existence and because I do not want to show off. The unions have enough strength to speak for the workers, it is my hope that the labour leaders will make clear their attitude on this point. But as a representative of the people and since such views have been expressed by the voters in my constituency, I have to bring them up in this House. A progressive labour policy should make no distinction between the sexes. All workers must be given equal treatment and eoual wages. Only then will there be no chance for the employers to exploit the situation by way of a disparity in the wages of female and male workers. In this way the female workers will not be exploited. Mr Speaker, if we allow this situation to go on, then the tendency among employers will be to employ more female workers and that will be against our progressive labour policy. I do not think the labour leaders will allow this to happen, although most of them are of the male sex. I do not believe the males will allow the females to be exploited in this way. In regard to night shifts for female workers in this amendment Bill, several Members have spoken on it. So far as I am personally concerned, the main point will depend on whether there is any necessity or justification for female workers to work at night. There are many countries in Europe where female workers work at night without causing any inconvenience. In so far as security is concerned, if female workers are safeguarded at night, there will not be much trouble. That is my view. Therefore, Mr Speaker, I hope the Minister for Labour will take heed of the problems I have outlined earlier and make some clarification. 3.10 p.m.

(In Mandarin): Mr Speaker, Singapore has already got the Women's Charter, and there have been some amendments introduced in this House to improve it. Now we are giving some thought to the labour laws in regard to female workers working at night. We are opening the door to female workers working night shifts. Although it is your ruling, Mr Speaker, Sir, that Members should not praise the Government too much, I feel I owe the Government a duty to praise it in this respect. At the same time ---

Mr Lim, I did not rule that Backbenchers should not praise the Government. Having heard of complaints that they did not have enough time on the Estimates, I said that if they did not spend time praising the Government, they could have that time to make their proper criticism of the Estimates.

(In Mandarin): I thank the Speaker for his clarification. This gives me encouragement to praise the Government all the more. In short, the Labour (Amendment) Bill and the Women's Charter are measures aimed at the emancipation of the female sex. The idea behind the amendment Bill is to give facilities to female workers in cases where the work is more suitable to them. The question that arises is whether this amendment Bill will have any repercussions. In some cases where the work is not so suitable for female workers, will it be the tendency for employers to employ more female workers, instead of male workers? Will there be any discrimination on their part between the sexes? Is it possible to engage either a male worker or a female worker? Will there be a stronger bias against the males? Supposing you want to engage a secretary, a male or a female can do the job all the same. If you pay equal wages for equal work, then, according to the Member for Sembawang, this will give rise to exploitation. There is bound to be a disparity in wages between the two sexes. Mr Speaker, I will now go to the second point. Following the passage of the Labour (Amendment) Bill, we can expect more female workers to appear in our labour market, particularly in night shifts. So the question of security measures arises. I have some experience with regard to the Redhill Industrial Estate. Previously some factories in Redhill refused to engage female work ers because at that time street lights were not installed, so that some parts of Redhill Estate were rather dark. It was, therefore, not convenient for female workers to work at night. In spite of my repeated requests to install lamp posts, we have not seen any in the Redhill Industrial Estate. Because of the darkness there was a sense of insecurity then among the female workers who were called to do night shifts. I hope that following the passage of this Bill, appropriate steps will be taken to make working conditions more conducive to the security of the workers of both sexes. 3.15 p.m.

(In Mandarin): Sir, what has been said by the Minister for Labour to amend the Ordinance is to meet the seriousness of the unemployment situation in Singapore in the light of the economic situation. In this context, this Labour (Amendment) Bill is suitable, and I fully agree with it. But after hearing the different speeches by the Members for Delta and Telok Blangah about workers employed in the pioneer industries in Jurong and other industrial areas, it is not convenient for me here to express any more points of view. If our Government is a pro-labour government which adopts a very enlightened policy on labour, I think it is advisable to form an investigation committee and go to the Jurong industrial area to investigate whether it is true that the labourers there are exploited by the employers, or whether they get equal treatment for both sexes. This is my view. 3.17 p.m.

(In Tamil): Sir, I wish to say a few words on this amendment Bill. It looks as though the employers will benefit by it, because the wages of female workers are less. They will be of the opinion that they may profit more if they employ female workers. The men may take advantage of the situation and send their wives to work at night while they go off to sleep. If this is the attitude of the men, then women will be working at night in all the establishments. Why should we allow them to work at night? We should provide security for them and if they go to work after 7 p.m., their parents or their husbands should escort them. So it is not proper to send women to work at night. Even if we have to do so, the employers should pay them the same wages as the men. If we insist on that, we have to see that the employers comply with this request. I do not think this is proper for the country or for the people. The Labour Ministry says productivity will be increased by the passing of this Bill. But this aim may result in a decrease in production because the employers may be employing female workers at night and I do not think this will give any benefit. 3.20 p.m.

Sir, originally I did not intend to speak, but after hearing some of the Members who spoke, I just wish to say a few words. When the P.A.P. came to power in 1959, it introduced the Women's Charter Bill. Now we have the Labour (Amendment) Bill in front of us, enabling women workers to work round the clock. May I know when Government will introduce an Act for men to safeguard themselves? 3.21 p.m.

(In Malay): Sir, I support the amendment Bill because we will stand to benefit both from the security point of view and from the point of view of the family relationship as mentioned by the Member for Kampong Kembangan. But. I would like to ask the Minister for Labour whether this amendment Bill will be imposed on waitresses in bars and night clubs who work beyond 10 p.m. If this is imposed on them, it is good because it will be for the benefit of our society at large.

I take it there are no other Members who want to speak. Mr Jek. 3.22 p.m.

Sir, the Member for Joo Chiat is wondering why we call a woman a workman. I really cannot satisfy his curiosity why we should call a female labourer a workman instead of a workwoman. I think this is the word in the original Labour Ordinance where it is stated that a workman means a worker whether it is of the female or male sex. I think this is only for the sake of convenience. Maybe the Member for Delta has already answered the question when she said that we must never emphasise the sex when we speak of a workman. A worker is a worker whether it is a male worker or a male worker. I think it is rather old-fashioned of the Member for Kampong Kembangan to insist that the female worker should be allowed to work only in the day-time and not at night. He is also worried that, with the passage of this Bill, telephone operators and workers in other establishments will be subject to this 24-hour work shift. I have said just now that this law does not necessarily apply to all the establishments. Once this law is passed, it will still be necessary for a factory or an establishment to apply for the right to work female workers on a 24-hour shift. It is not automatically the case that they will come in. Initially we will only allow factories which are export-orientated to put their female workers on a 24-hour shift. So the Member need not have any worry that operators in the Telephone Board will be put immediately on this 24-hour shift. The Member for Telok Blangah and the Member for Delta touched upon the low pay of female workers especially in the factories at Jurong.

Point of clarification, Sir. Mr Jek Yeun Thong resumed his seat.

Sir, I never said that the workers are very lowly paid. I made a general remark, that workers are paid according to the industry in which they work.

I beg his pardon. But last Tuesday and also today the Member for Delta says that female workers especially in Jurong are very lowly paid. The Member for Bras Basah has suggested that we should set up a commission of inquiry to look into this matter. I do not think this is really necessary. It may be a one-sided affair because, according to a sample survey conducted in July 1966, the monthly average earnings of female workers of 18 years and above in all factories was $100.80, and the highest average monthly earnings of $120.90 was recorded in the tobacco, cigarette, cigar and other tobacco product industry, whilst the lowest average monthly earnings of $70.50 was recorded in the paper product, including stationery and hard boxes, industry. The main factor affecting the differences in the rates of pay of female workers in various occupations and industries is the skill required in the performance of the job. In other words, the greater the skill, the higher the rate of pay. This is clearly manifested by the figures already given for the paper product industry in which unskilled labour is involved, as against the relatively higher monthly earnings in the tobacco, cigarette and cigar industry. In the textile and garment industry, the predominant rates of pay for female workers, other than those who are under training or who are partially trained, vary from a minimum of $2.70 to $2.90 per day of eight hours in such occupations as weavers, spinners, knitters and twisters. Whilst in the shirt and garment manufacturing industry, the average wages per day range from $2.58 to $3.24, in occupations such as cutters, sewing-machine operators, iron workers, packing workers and seamstresses, the average wages are up to $5.49 per day. However, during the period of training which ranges from one month to six months, female workers are paid from $1.50 to $2.25 per day according to the trade in which they are being trained. After training, they are generally put on piece rates subject to a minimum earning of $2.50 per day, which is the amount an inefficient worker earns. A worker with greater productivity earns from $4 to $5 per day and even up to $8 in the case of some workers in one particular factory. In other words, the earnings are dependent on the skill of the worker, and the greater the skill and productivity of the worker, the higher the earnings. It is quite evident that no factory will pay a worker much more than he or she is worth in terms of production. If labour costs are artificially inflated merely to increase the earnings of the workers even though their productivity is low, no one is going to open a factory in Singapore. The intelligent way to deal with this problem is to help the workers to improve their skills so that they may earn more. The National Productivity Centre at J urong is now considering the introduction of three industrial training classes for new workers before they get into the factories. The objective of these classes is to acclimatise the workers to a working environment with some rudimentary knowledge of the trade into which he or she will enter. This will enable them to imbibe more quickly the skills required for the jobs they will have to perform. These courses, in the initial stages, will be mainly directed at producing female workers for the textile industry so that, with the skills that they will acquire in a shorter period, they will start earning better wages earlier. Indeed, trained textile and garment factory workers can easily earn from $4 to $5 per day with improved skills and better productivity. Members of the House will agree that these rates compare favourably with the rates given even to male unskilled workers in many cases. The Member for Sembawang is also afraid that by putting female workers to work at night, it may affect their family life. I do not think he need worry about this because most of the workers in these factories are between 18 years and 22 years of age, and I do not think that women in this age group have a lot of babies to look after at home. The Member for Bukit Merah is concerned about the security of women who have to go home very late at night. I think the answer, as he has said, will be to ask for more street lights and to seek better and more efficient police protection in the area. But even at the present moment, without this law being enforced, female workers still have to go home very late, because they are allowed to work up to 11 or 12 o'clock at night. But, on the other hand, if this, law is passed whereby a woman is allowed to work the third shift, then, instead of going home at 11 or 12 o'clock midnight, she may have to go home very early in the morning, at 6 o'clock, in which case I do not think we have to worry much about the darkness. Madam Chan Choy Siong rose -

Madam Chan, Standing Orders do not allow a Member to speak more than once except in Committee. Madam Chan Choy Siong resumed her seat.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Jek Yeun Thong.] Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Third Reading read. 3.35 p.m.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Third time." Hon. Members will recall that this Bill, which is comprehensive and far-reaching in its effects, was referred to a Select Committee on the 21st of December last year. Since it has taken one year for it to come back to this House and the memories of some Members may be short, I think it would be of advantage for me to read part of the Explanatory Statement to the Bill: `The need for an up-to-date Company law has long been felt, as the existing law, which is based upon the English Companies Act of 1929, is now completely obsolete. Whilst Singapore was a component of Malaysia, it was associated with the drafting of a new Companies Act for Malaysia which took over eighteen months to prepare. The Malaysian Companies Act, 1965, was enacted soon after Singapore was separated from Malaysia and came into operation in April, 1966. This Bill follows closely the provisions contained in the Malaysian Companies Act, 1965, as it is considered that Singapore's new law relating to companies should not be different from the legislation in force in Malaysia in order to facilitate trade and commercial intercourse with and within this region.' Sir, the response to invitations for representations was good. Fourteen written representations were received and the Select Committee heard oral evidence from eleven of them. Some of these contributions were valuable and a number of suggestions have been accepted. I will not burden Members of the House with details of the amendments which have been made during the Select Committee stage. These are listed out at pages C8 to C37 of the Select Committee's Report which was tabled in this House on the 7th of December, 1967, as Paper Parl. 11 of 1967. Most of the amendments are drafting amendments, while a number of them have been incorporated as a result of representations made by the Singapore Society of Accountants, the Singapore Association of the Chartered Institute of Secretaries, the Singapore Advocates and Solicitors Society, the Association of Certified Public Accountants, the Singapore International Chamber of Commerce and the Association of Banks in Malaysia. To these bodies and to others who made representations to the Committee, I wish to extend our thanks for their valuable suggestions and assistance. Mr Speaker, Sir, the amendments as have been made by the Select Committee, while they have gone a long way to refine the Bill, do not substan tially alter the character of the Bill. One Part of the Bill, Part XIII, relating to reciprocal provisions with Malaysia, which authorises the Minister to make arrangements with Malaysia for their extension to Singapore of winding-up orders made in Malaysia and for the extension to Malaysia of winding-up orders made in Singapore, has been deleted. Deletion of this Part is considered necessary as clause 340 of the Bill, which is similar to section 340 of the Malaysian Companies Act, with necessary modifications agreed to be tween Singapore and Malaysia, should meet the reciprocal requirements. Mr Speaker, Sir, the Bill, as now tabled before this House, incorporates the recommendations of the Select Committee.

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

Order for Second Reading read. 3.42 p.m.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." This Bill seeks to license, and impose minimum standards on, finance companies which accept deposits from members of the public. Heretofore, such companies did not have to comply with any requirements, save those under the Companies Ordinance. Inasmuch as these companies are custodians of the savings of individuals, it is imperative that their operations should be subject to Government supervision in much the same way as banks and insurance companies are. As a rule, the role of finance companies as financial intermediaries is limited to the mobilisation of domestic savings to finance the purchase of consumer durables. In the absence of proper supervision, however, these companies could turn into vehicles for risking household savings on speculative ventures of the directors. There are two limbs to the definition of "financing business" given in clause 2 of the Bill -

Mr Speaker, Sir, the establishment of finance companies in Singapore has recently been increasing at a very speedy pace. They might not be as prolific as the mushroom, but they certainly have become, in total, a very significant and influential financial institution in our economy. Their influence and dynamism in our economy have caused us no comfort. As representatives of the electorate, we cannot sit back with little care or total indifference. As influential financial institutions, the finance companies operating i11 Singapore may be able to contribute significantly to the economic well-being of our society if they are brought under proper control. On the other hand, they may render inflation-investment, disequilibrium and even economic chaos should we indifferently allow them to run wild. I positively support and congratulate our Minister for Finance on tabling this timely Finance Companies Bill to regulate the operation of finance companies in Singapore. Taking a sweeping survey of the island, we discover the following types of business organisations operating as finance companies. First of all, there are the so-called hire purchase companies which deal with sales of motor vehicles, sewing machines, television and radio sets and other durable goods in instalments. They call themselves hire purchase companies when, in fact, they are conducting sales of goods in instalments. The distinction between hire purchase and sales in instalments is this. On hire purchase terms, the goods are delivered to the buyer after he has made a down payment, but the ownership of the goods remains with the seller, while the buyer enjoys the use of the goods as well as the option to buy while making the monthly instalments. On sales in instalments, the goods are delivered to the buyer who is supposed to buy the goods without an option; thus the ownership of the goods goes to the buyer immediately. Against this legal conception of hire purchase and sales in instalments, we understand that hire purchase companies finance the sales in instalments on hire-purchase agreement, giving the buyer no option to buy, but the ownership of the goods remains with the finance companies unless and until the final payment is made. In other words, the buyer has to forego the option to buy and yet he holds no title to the goods. Many hire-purchase companies of this kind are being set up with very little paid-up capital. They normally act as agents for big finance houses to conduct hire-purchase transactions. Though they deal in the borrowing and lending of money, they operate under the Hire Purchase Ordinance and are not in any way regulated or restricted by the Moneylenders Ordinance. Secondly, we have pawnshops all over the island borrowing and lending money. The bulk of their business is to lend money on acceptance of durable articles, though title deeds are also acceptable. The sources of funds for their operations are their own paid-up capital, operating profits, deposits from the public, and money received for custody. Many cases of deposits of money received for custody are accepted on a gentlemen's agreement and business trust, with or without documentary evidence acknowledging their receipt; and there are not a few cases where the so-called gentlemen's agreement and business trust are rendered valueless as they are not enforceable in a court of law or even in equity. As we have as yet no legislation or a statutory prescribed rate of interest payable by pawnshops to the depositors of money, the consideration allowed for the deposit of monies with the pawn shops remains a subject for bargaining. Mr Speaker, Sir, we require very little imagination to visualise a simpleminded member of the public, with a sum of money and without any investment opportunities, going to a pawnshop and bargaining with a highly business-minded pawnshop proprietor. Then we have the business-front organisation of the banks, i.e., the finance companies wholly owned by the banks. Openly these finance houses are set up to conduct business transactions which the banks are prohibited from doing. For instance, the Banking Ordinance controls the payment of rates of interest by banks to depositors for fixed-term savings, but the finance houses are at liberty in this respect. Of course, we cannot afford to deny the importance of moneylenders licensed or unlicensed, in the money market. Licensed moneylenders, on obtaining a licence, automatically come under the restrictions and regulations laid down in the Moneylenders Ordinance. Unlicensed moneylenders, though not legally recognised, or to be more correct, they are operating illegally, certainly have some business influence in business circles. Last but not the least are the finance companies incorporated under the Companies Ordinance. They form the major arm in financing business. They deal in heavy borrowing and lending, yet they may or may not come under the restrictions laid down in the Moneylenders Ordinance, depending on exemption provided in the Ordinance being granted. On exemption being granted, these finance companies have a free hand in financing activities. They are apt to charge the borrowers exorbitant interest rates. Mr Speaker, Sir, having described the aforesaid categories of financial institutions, my uncertainty, which I hope can be clarified, is this. Is the Finance Companies Act, 1967, as introduced by the Hon, the Minister for Finance, to be adopted for regulating and controlling all categories of finance organisations, firms, houses and companies? Sub-clause (1) of clause 3 provides that no financing business shall be transacted in Singapore except by a company that is in possession of a valid licence granted by the Commissioner for Finance Companies, and "financing business" as interpreted in clause 2 means the business of borrowing money and lending money. Am I to understand that a licence is essential for all types of financing business organisations irrespective of whether they are under the regulations and restrictions of other Ordinances? Mr Speaker, in our society where public economic planning and private enterprises are operating hand in hand, certain projects are operating under statutory bodies as monopoly under takings and as an encouragement to commercial and industrial activities. In the absence of national finance organisations, financial institutions operated by private entrepreneurs become the baby to be taken care of by legislation. From the economic point of view, the financial institutions in Singapore are playing a supplementary as well as a complementary role to the banks as evidenced by the fact that most banks establish finance houses of their own. A banking corporation in any country, even in totalitarian States, is a vital financial institution. The banking corporations in Singapore, as elsewhere, owing to certain limitations, statutory, economic or otherwise, have not been able to serve the economy to the best of their ability and because of this, finance companies have come into the picture. One of the financial activities which the finance companies undertake to supplement those of the banks is the tapping of the financial resources at large and collectively channel them into fruitful investment and development projects. Another financial activity undertaken by finance companies to supplement those of the banks is to providc loan facilities, it is very well known that practically all banks in Singapore are reluctant to provide long-term loans and even their short-term credit facilities are available only to selected clients and with the provision of security. In the light of these wants and demands, finance companies come in to make available hire-purchase financing, house and property mortgage loans to individuals, machinery and equipment loans to industries, and general unsecured loan facilities. In summary, finance companies provide services and conduct financing activities which are not available from banks and these supplementary activities help in accelerating the economic growth of the State. Mr Speaker, Sir, knowing the significant role the finance companies are playing in the economy, we recognise without any reservation the urgency of a Bill to regulate and control the operations of finance companies as financial institutions, lest they run wild and give rise to inflation, business disorder and economic destruction. In addition to recognising the need of a Finance Com panies Bill, I wish to reiterate my appreciation of our Minister for Finance in introducing the Finance Companies Bill. But while we recognise the need for such a Bill to be introduced to protect the interests of depositors and the general public against unscrupulous finance institutions, there is also the need to review some of the clauses and certain provisions included in the Bill for the implementation and administration of the Bill. I know that the object of the Finance Companies Bill is to safeguard the depositors and the general public against any malpractices by some of the unscrupulous finance houses. I also know that impractical restrictive control will curtail business activities or even make the finance institutions extinct. The possible adverse effects will no doubt bring home serious negative consequences to the State. While supporting the Finance Companies Bill in imposing control on the operations of finance companies and welcoming the introduction of the Bill, I wish, Mr Speaker, Sir, at this juncture to make some constructive criticisms of some of the provisions of the Bill. Firstly, clause 20 limits the investment of finance companies to the extent of 25 per cent of the paid-up capital. The purpose of including this restrictive clause in the Bill is presumably to prevent finance companies from engaging in risky investment and investing in unsound propositions. It may be necessary to ensure the sound investment policy of each finance company, but a flat percentage may not be a good yardstick in ensuring a sound investment programme. Secondly, there is the provision prohibiting finance companies from granting loan facilities of an unsecured nature of more than $1,000. Without the support of any statistical information, I can safely maintain that $1,000 is too insignificant, and to take that amount as the ceiling is very inadequate. Bearing in mind the business volume and the turnover of the unsecured loan facilities granted and executed by finance companies, I have no doubt that the ceiling of $1,000 warrants reconsideration. As far as I know, Sir, there are finance companies who grant unsecured loan facilities to borrowers to as much as $10,000 to $20,000. The turnover of unsecured loan facilities to within $1,000 does not constitute much of a total. I will pause just a while to ascertain the implications of unsecured loans. Do we, Mr Speaker, Sir, consider a loan granted to a borrower who has a guarantor willing to undertake to indemnify the repayment as an unsecured loan? If the Bill considers loan facilities granted with some personal guarantee are unsecured loans, then I maintain that the $1,000 ceiling warrants recon sideration. If the Bill considers that as a secured loan, I shall withdraw my observation in respect of this restrictive clause. Mr Speaker, Sir, I should be very grateful if the Hon, the Minister for Finance would kindly assist in clearing up my uncertainties. In conclusion, Sir, I wish to give my full support to the Finance Companies Bill as introduced by the Hon. Minister for Finance. 4.11 p.m.

(In Mandarin): Mr Speaker, Sir, I have something to say on this amendment Bill. Certain points therein should be brought up for discussion. This Bill will not actually promote economic activity and increase the liquidity of finances in the country to the fullest extent. We know that the capital of these finance companies is obtained by way of deposits from the general public. These finance companies are quite different from ordinary banks. Since our own people invest in finance companies, the Government should look after them. The depositors are mainly middlemen and other small traders. Finance companies are not like banks which are controlled by big capitalists. Finance companies carry on operations which banks do not like to undertake. For instance, they provide loans to the ordinary people to buy cars or houses, or to set up small family or cottage industries. The ordinary people can get such loans from these finance companies which they cannot get from the banks. I feel that finance companies have a great role to play in the accumulation of capital and a very important place in our economy. This Bill touches upon something that is of great importance to the general public as well as to the finance companies. I do not oppose its introduction. This Bill regulates financing in our economy and protects the depositors. The Government will have to exercise some measure of control over these finance companies. But because of their close relationship with the population, especially our small merchants, I feel that if we control these finance companies too much or too strictly, then it may cause some undesirable consequences. These finance companies have a very close relationship with our small merchants, industrialists and ordinary people. The Government should not discriminate against them or single them out for special treatment because they have some contribution to make to our economy. Yet there is a provision in the Bill that a finance company should have $500,000 paid-up capital and also a certain percentage of liquid assets. In fact, the capital invested in some of these finance companies exceeds the minimum amount imposed on the banks. Recently there was a regulation that if a foreigner invests $350,000 in local industries, then he can bring his family to Singapore and they can even become citizens of Singapore.

4.16 p.m. This may appear to some people as some sort of favouritism and therefore we have to look into this. There is provision for the post of Commissioner for Finance Companies to look after the operations and accounts of finance companies. Will this enhance the confidence of our people in finance companies? This legislation is aimed at safeguarding the interest of the depositors. We should look after the interest of all the people. We should base our viewpoint on the benefit which these finance companies can bring to our economy. We should bear this in mind. The Minister has said that the Bill is for the protection or the security of depositors, but he has not looked into the consequences. I am worried about the consequences that may befall finance companies as a result of the passage of this Bill. I am also rather worried about the consequences it will have on our economy, a great part of which is motivated and stimulated by finance companies through deposits by the public. The Bill also provides that finance companies should not undertake certain transactions, and unsecured loans should not be more than $1,000. Certain transactions which are not allowed under clauses 19, 20 and 21 and so on, will have to be liquidated within six months. If finance companies had entered into such transactions and if they have to liquidate them within six months, then they will have to auction their assets and business. They have to close shop as a result of this. And what benefit will it give to the depositors if such consequences take place? Also the staff of these finance companies will be joining the camp of the unemployed. In fact, people find it more profitable to have immovable property in their pos session. For instance, a finance company can buy over a whole building for its operations and for letting Out to other businesses. Money accruing from rents would be sufficient to meet expenditure on running costs, etc., besides leaving a profit. The finance companies can pay the 36 per cent property tax and 40 per cent income tax. In addition to paying these taxes, they can also make a profit. So there will be no loss to anybody. Without the profit finance companies can secure from this sort of operation, how can they pay interest to the depositors? If they are required to auction all their immovable property, then this may shake our economy. As a result, some family and cottage industries may suffer, because they cannot get loans easily from big banks. So they have to look to finance companies for unsecured loans. The finance companies are the only providers of loans to them. According to the provisions of the Bill, finance companies are prohibited from providing unsecured loans of more than $1,000. This being the case, the small industries will suffer. And if finance companies comply with these provisions, there will be liquidation within a certain period and the small industries will again suffer. I will now touch on the provision of unsecured loans which should not exceed $1,000. If this provision is to be complied with and other than the liquid assets the finance companies have, I feel there is no security for the depositors because the finance companies can also give large amounts of loans on other things. There is also a provision stipul ating that the loans given out should not be more than a certahi percentage of its paid-up capital. I should say some finance companies may find it difficult to carry on with their business because of this restriction. Small industries will also suffer. If the Government's intention is to look after the interest of the depositors, then I would suggest amending clause 16 of the Bill which provides that: `Where a finance company has accepted money from any person as a deposit the company shall within two months after the acceptance of the money issue to that person a document which acknowledges or evidences or constitutes an acknowledgment of the indebtedness of the company in respect of that deposit.' Now if the finance company does not issue a receipt on the spot on receipt of the sum of money, it can put the money away without issuing a receipt or any document to show that it has already received that sum of money deposited. Then where is the security that is talked of which the depositor can have? If the finance company has a latitude of two months, then it may, perhaps on the last day of the second month, issue a receipt of acknowledgment and the depositor will lose two months' interest on the amount of money deposited. If such a thing happens, it will be a loss to the depositor because he has lost two months' interest on that amount of money. I think there are other Members who want to speak on this Bill. So I would not like to say too much. I feel generally that the Minister should not be too insistent. He should be more flexible. He should send the Bill to a Select Committee and hear representations from the people concerned and amend the Bill if necessary so as to make it perfect. 4.28 p.m.

Sir, the expressed purpose of this Bill is to safeguard the interest of members of the public who deposit funds with finance companies. In moving the Second Reading of the Bill, the Minister for Finance tried to make out a case for his new law. As in any trade or business, there are good companies and bad ones, good traders and bad ones, There may be a finance company formed by persons who require money for their own business. They are unable to obtain finance from banks or other sources of loans and so they form a finance company to raise capi.tal for their own business. There may be others where the intention of the directors is to collect as much money as possible from the public on the promise of very high interest, and then do a bunk. Finance companies which are formed on this basis or which are run on these lines are a menace and the public must be protected from them. But the question I ask is, are these .the only types of finance companies? The answer must be "No". We have not heard of any finance company in Singapore failing. There are many finance companies operating in Singapore. Most are honest and provide a very useful service to the investing public who do not have enough money to buy property. Also to those who do not understand shares, they give a slightly higher rate of interest than the bank gives. There are many borrowers who cannot obtain loans from banks. They say that banks only lend money to people who have a lot of money and want to double what they have. It is impossible for the small trader or the young professional man who is just starting out in his career to obtain any starting capital from banks. In other countries, banks are not so old-fashioned as Singapore banks. The small trader and the young professional man in Singapore must turn to finance companies. The explanatory statemen.t of the Bill says that it is proper that finance companies should wherever possible be assimilated with banks.

4.30 p.m. Why must this be done? Finance companies are very different from banks. If we pass this new law, we may have no finance companies but numerous banks in a few years' time. Where then is the small trader or young professional man to go if he cannot give security to obtain a loan of more than $1,000? If the main reason for introducing this law is to control the bad finance company, is there no risk that we will kill the good finance company as well? There is a serious danger that this will be the result because there is little that is certain in a section of this Bill. A lot of discretion is given. I am not a lawyer. From my little understanding of this Bill, the Commissioner for Ftnance Companies is going to be made a very powerful man. He may even have more powers than other civil servants except the Banking Commissioner. Everything is left to his discretion. Under clause 5, he can grant a licence with or without conditions. He may refuse a licence. No rules are laid down, though he must act with the approval of the Minister. He need not give reasons. There is no appeal from him. Having given the licence, he may at any time vary or revoke the conditions or impose additional conditions. This is in clause 5 (4). Sub-clause (4) says nothing about the Minister's approval. Again, no rules are laid down to say when the Com missioner can vary or revoke conditions. All that the sub-clause says is that he can do so at any time. Furthermore, there is no appeal; no notice is required. A provision like this makes the Com missioner a very powerful man indeed! Clause 7 also gives him such powers. So does clause 8, but here in sub-clause (4) there is a right of appeal to the Minister. But under clause 28 (3) , the Com missioner must act in accordance with the Minister's directions. I am not worried about the present Minister, but who knows what kind of a man our future Minister may be? There is no appeal under clause 9. Clause 10 gives a finance company a chance to present a case to the Commissioner before its licence is revoked. Why cannot this also be done in clauses 7, 8 and 9? So far I have referred to the Commissioner's wide powers over the issue and cancellation of licences and conditions. He has similar wide powers over the regulation of business. By clause 15, he can ask for all information and data as he reasonably requires. There is no limit - only the Commissioner's ideas of what is reasonable! He is given power to determine the minimum amount of liquid assets. This is in clause 24. By clause 26, he can order corrective action. What does "corrective action" mean? He can tell the finance companies to stop business. He can also tell them how to run their business, and if they suffer a loss, clause 30 frees him and the Government from responsibility unless he is guilty of fraud. He is given wide powers but no financial responsibility. This is very dangerous. Is there a financial wizard in the civil service who can tell competing finance companies how to run their business properly? If a company fails, the directors will naturally tell the public, "The company has failed because the Commissioner gave wrong directions." They may be wrong, but the public may blame the Government. Does the Government want the blame? My fear is about the Commissioner's powers. If such powers are given to one civil servant, other civil servants may want similar powers, because their work will be made easier. The Director of Public Works will be `tempted to ask for such powers over the contractors and engineers; the Chief Architect will want powers over the architects; the Attorney-General will want powers over the lawyers; and the Director of Medical Services will want powers over the doctors. If all these civil servants can work well without similar powers, why should we give them to the Commissioner? I hope the Minister will explain the necessity for this unrestricted wide power. I also hope he will tell us whether any other country has a law like this and whether officers in charge of finance companies in other countries have similar power. I support the general intention behind the Bill. I would like the Minister to give clarification on the matters I have raised and to inform the House why the intention cannot be carried out without giving such wide powers to the Commissioner for Finance Companies. Furthermore, would it not be better if the Bill were sent to Select Committee because it is quite complicated? I do not believe there is an urgency to push it through for Third Reading today. I am sure that if it is referred to Select Committee, we can have not only the views of finance companies but also the views of banks, depositors and borrowers. There might be a proliferation in the establishment of new finance companies, but if we pass the Bill quickly without careful examination, it will carry a lot of dangerous provisions.

I propose to take the suspension now and will take the Chair again at 5.10 pm. Sitting accordingly suspended at 4.39 p.m. until 5.10 p.m. Sitting resumed at 5.10 p.m.

Debate resumed.

Mr Speaker, Sir, it is satisfying to note that the Government has realised the need to control finance companies in the interest of members of the public. We have seen many finance companies and institutions advertise attractive terms and conditions which they claim to be in the best interest of the general public, but can they deny the fact that ultimately it is they themselves which stand to gain more than the general public? Nevertheless, taking into consideration the fact that the finance companies do have a genuine interest in enhancing the financial and economic interest of the public in particular and the State in general, it is the duty of the Government to protect the public from any swindl ing by some finance companies. For instance, before getting a loan on the pledge of a motor-car or an article, some companies do charge "football money" which i's illegal and which will never come out in the accounts. I am not saying that all finance companies charge "football money", but some companies do charge it. By not showing this income in their accounts, they do not pay income tax. The borrowers, in addition to paying the illegal interest, have also to pay more than what the law allows. Will the Government do something to stop this illegal practice? The next point I want to bring up is that finance companies charge 10 or 12 per cent interest on secured loans on hire purchase. This interest is calculated on the original sum lent and is not calculated on the amounts due after payment of instalments. So this so-called ten per cent interest actually works out to more than 18 or 19 per cent. We have laws to see that mortgagors do not charge more than 12 per cent on secured loans, but in the case of finance companies, the interest charged is actually more than the interest legally allowed. I hope the Ministry of Finance will look into this problem and standardise the interest charged. The last point I want to raise is with regard to "chit fund" which is publicly known as "tontine". There are a dozen chit fund companies in Singapore which run chit funds and they deal in hundreds of thousands of dollars. They are not doing business on the accumulated capital hoarded by them but on funds collected from the public. 1 do not know whether, under the present Bill before this House, these chit funds can be controlled by the Government. Recently, I heard that some of these companies are unable to repay to the depositors the amounts deposited by them after an agreed maturity period. People who have been convicted of criminal breach of trust and people of not a reputable character are known to be managing such business. I appeal to the Government to bring these chit fund operators under some form of Government control by way of legislation so that the public can be protected. 5.15 p.m.

(In Mandarin): Mr Speaker, Sir, the introduction of this Bill aims at strict control of finance companies and the operation thereof. It also aims at the protection of depositors who invest money in them. Therefore, the intention is good in principle, and I believe it is the aim of the Bill to get rid of those finance companies which are not properly run or not bona fide. But the operation of this Bill may also affect those companies which are bona fide. So, Mr Speaker, we must accept the fact that a well-organised and properly operated finance company is of benefit to small traders and wage earners in Singapore. In short, to the small man, finance companies which are bona fide are good because they provide easy and convenient financial aid. But we agree that those which are not so good, of course, should be dealt with. So before this Bill is passed in this House or implemented in future, we should go a step further and study this Bill more carefully to see whether certain clauses in it are over-restrictive, thereby stifling the proper operation of bona fide finance companies. We must see that such bona fide companies are not adversely affected by the operation of the law. On the contrary, if operation of finance companies in Singapore contributes to the prosperity of our country, then they should be encouraged and not restricted adversely. Mr Speaker, if this Bill is passed hurriedly without any overall careful consideration of the various repercussions and consequences, then it will cause some confusion in our society, parti cularly to those who are now depositors. Ef such depositors lose their confidence in the finance companies, then some sensitivity will be caused and a lot of depositors will queue up outside the finance companies to withdraw the `money they have deposited. This will give rise to very serious repercussions and dangerous consequences. Mr Speaker, I fully endorse the views expressed by the Member for Ulu Pandan when he suggested that this Bill should be referred to a Select Committee for further careful consideration. In this way, representatives of finance companies and members of the Singapore Chinese Chamber of Commerce and other interested parties, including members of the public, will be given a chance to express their views on this Bill. At the same time, we can avoid the misunderstanding on the part of finance companies in Singapore who may allege that this Bill is introduced in order to assist foreign capital at the expense of local capital. Mr Speaker, generally speaking, we all know that the role played by finance companies is similar to that played by banks in Singapore. Mainly their business is to collect deposits from the people and give out loans at some interest. So in this way they are the same as banks. And their existence need not necessarily pose a threat to or compete with the banks in Singapore. Mr Speaker, I wish to quote the editorial of the Sin Chew Jit Poh of the 19th of December. This editorial made certain suggestions in regard to the present Bill. It says that banks play a very important role in the accumulation of capital, but the role that they play has not reached the ideal stage. The standard of living in Hong Kong may not be as high as Singapore, but, on the average, the population in Hong Kong have about $2,100 deposited per capita in the banks. This is higher than the average deposit in Singapore per capita, which is only $650. So the average deposit per capita in Hong Kong is about three times that of Singapore. In this respect, if finance companies can assist in looking for liquid assets or idle capital, then the accumulation of capital brought about by the finance companies will be of great benefit to the industrial development of Singapore, particularly in the field of investment. So it is clear that there is scope for expansion of the business of finance companies. The editorial also dealt with three points. The first point is that this Bill is actually a duplication of the Banking Ordinance, but it is more restrictive than the Banking Ordinance. So because of this Bill, the position of finance companies in future will not be as good as that of the banks, and difficulties will arise which may stifle the flourishing business of finance companies in Singapore. This may give rise to very serious consequences. The second point brought up in this editorial is that the future activities and businesses of finance companies under strict control will not function so well, and this is the negative aspect of this Bill. As a matter of fact, it may be good to protect the interests of the whole of society, but in protecting the interests of the society, particularly the depositors, we should also see that the restrictive law does not interfere with the role played by the finance companies in national development. And so they should be given the same protection as insurance companies are given in Singapore. The third point brought up in the editorial is that the regulation of the operations of finance companies in loans and mortgages and other aspects is too restrictive. It suggests that if banks are allowed to give loans on hire purchases and mortgages, why cannot finance companies be given the same facilities? If insurance companies are treated as banks, why cannot finance companies be similarly treated? Mr Speaker, the existence of finance companies is more or less complementary to the operation of banks in Singapore. I would like to show in what way this is true. Many small traders, industrialists, or small manufacturers are unable to get financial assistance from banks, but they can get it from finance companies. This is one instance of industrial or commercial activities by finance companies, and in this way they make a great contribution to our economy. Clause 6 of the Bill provides that the paid-up capital of a finance company shall not be less than $500,000. But clause 17 (1) (c) provides that any unsecured loans should not exceed $1,000. So if a company has a capital of $500,000, its unsecured loan is to be limited by this clause to $1,000 or less. This is inconvenient to the operations of the finance company, and I feel that this clause should be reconsidered. We must see whether the financial position of the individual finance company warrants such a blanket restriction. In other words, we must have some discretion in respect of restriction of loans according to the paid-up capital and the position of the individual finance company. Mr Speaker, if a finance company is big, bigger than the others, then I think it can increase the loan granted. In order to meet the very high overhead expenses, some finance companies may raise "football money" or the rate of interest in respect of loans given out, and because their scope of activities is narrowed down, their turnover becomes smaller. So their profits may not be able to meet the overhead expenses. Because of this, some of the finance companies may have to retrench their' staff and some may have to close down, thereby giving rise to more unemployment and aggravating our present unemployment situation. Mr Speaker, clause 21 of the Bill' says that no finance companies shall purchase or acquire any immovable property. We must understand that when finance companies receive deposits, from the public, they pay interest. Therefore they must do some business by way of loans given out at higher interest rates. If there is a provision that no finance company shall purchase or acquire immovable property, then how do we expect them to continue with their operations? Generally speak ing, banks can make use of money in current accounts without interest. This position which is enjoyed by the banks is not enjoyed by the finance companies. In fact, banks also levy service charges to meet their overheads, even in respect of current accounts. On the other hand, finance companies do not enjoy such facilities. So if they are to be more restrictively controlled than banks, then in order to meet their overhead expenses and to maintain their level of profit, they will meet with great difficulties. In fact, they may not even make a profit at all under these stringent restrictions. The idea of this Bill, of course, is to protect the interest of the public, and the strict control of finance companies is good only to this extent. Mr Speaker, before this Bill is read a Third time, it is my humble view, a view shared by the Member for Tampines and the Member for Ulu Pandan, that it should be referred to a Select Committee for reconsideration. 5.32 p.m.

Mr Speaker, Sir, I rise in support of the Finance Companies Bill whose object is to license and control finance companies and to govern matters connected therewith. Since the purpose of this Bill has been made very clear and specific, therefore, bona fide finance company houses should have no cause for any undue apprehension. Although clause 22 of the Bill provides that within six months of the date of its coming into operation finance companies are required to liquidate all transactions prohibited by the provisions of the Bill, nevertheless, Mr Speaker, Sir, earlier on the Finance Minister has already stated that consequent on the passage of this Bill, if and when genuine grievances arise, he is prepared to consider sympathetically their respective difficulties. An important feature of the Bill is the restriction placed on the powers of the directors and other officers of a finance company to deal with the money deposited with the finance company. This is very important, Mr Speaker, Sir, because many members of the public are induced to place their savings in a finance company by the attractive interest rates offered by the company on such deposits. Up to now, there is no specific Ordinance to ensure that a finance company takes as good care of such deposits as any honest businessman will take care of his property. In that sense, the Government should be congratulated on initiating such a Bill. Mr Speaker, Sir, my concern is this. As a socialist by conviction, I feel that the the larger interests of the community in stead of a microscopic few should be given first regard. Sir, another concern is this. As a trade unionist, I feel that if the Minister for Finance can give his sympathetic consideration to genuine grievances, there is no fear at all for bona fide finance company houses having to resort to retrench employees as a result of the passage of this Bill. And if this end can be achieved, I will propose to the Minister for Finance that the day of the coming into operation of this proposed Act is not made retrospective but is to take effect in the near future. Hence there is no need to refer this Bill to a Select Committee. 5.37 p.m.

Mr Speaker, Sir, the touchstone test of this Bill is not so much whether it can control finance companies, but whether it can control them without killing them. With the present-day economic arrangements of our society and of any advanced society, there is no dispute that finance companies do play an important part in our economic life. Gone are the days when a person wants something, he saves for it. Today he pays a small down-payment. Sometimes he does not even have to do that, and he enjoys the use of the article he wants and pays for it in instalments. Consumer credit is now the rule rather than the exception. Under such circumstances, finance companies are something we cannot do without. And yet for a long time many people have felt that they should be abolished. Sir, this is because finance companies readily lend themselves to abuse by unscrupulous people. One of the causes of apprehension over the profusion of finance companies over the past few years is that by their very profusion they are forced by competition to pay such high interest rates that they can only hope to pay them by resorting to speculative ventures. A large number of finance companies are known to be speculating, and at times even wildly, in properties and in the stock market. If a person speculates with his own money, that is his own funeral if he fails. But when a finance company plays around with depositors' money, then clearly it is the duty of the State to ensure that such things cease. The present Bill before the House does provide the means to restrict the number of finance companies. Clauses 5 and 6 provide the Commissioner not only with the powers to shape the structure of finance companies, but also to limit them. I personally would have preferred to see the figure of $500,000 in clause 6 doubled. But I do not wish to press this point as I am confident that the Government will not hesitate to raise it should it become necessary to do so. Another cause of apprehension over finance companies is that few of them provide adequately for bad and doubtful debts. This is so because operators of finance companies prefer to lose other people's money rather than their own. And so they distribute as much of their profits as possible and allow their depositors to carry the risk of bad and doubtful debts. Clause 12 will, I feel, go a long way to safeguarding the depositors and, in addition, to providing a built-in growth factor for the finance companies to grow to a reasonable size. Of course, this clause will have the disadvantage of inducing minimum initial capitalisation even when funds are available. It is conceivable that funds which otherwise would be capitalised would be rearranged as loans. However, as such an arrangement will be countered by the liquidity ratio required by the Commissioner, I feel that a correct balance has been struck. Clause 14 requires that every finance company shall exhibit its balance-sheet and the list of its directors at its principal and branch offices, if any. The company is also required to publish its balance-sheet in at least each of the four local daily newspapers in the four official languages. There is no requirement to publish the list of directors. A better requirement, I feel, is to have the publication in the leading instead of any daily newspaper in the four language streams. I further suggest that the list o directors should also be published. My suggestion to have publication in leading newspapers is to ensure that some finance companies do not select little-read newspapers for publication of their balance-sheet and widely-read newspapers for advertisements calling for deposits. Clause 20, as it stands, can, I feel, be by-passed quite easily. The clause only requires that a finance company shall not hold share capital or have a direct interest in any financial, com mercial, agricultural, industrial or other undertaking, exceeding a quarter of its paid-up capital and published reserves. This clause does not, in my view, prevent a finance company indirectly committing funds exceeding a quarter of its capital and reserves. I should like to see the clause rewritten to include a restriction on direct and indirect participation exceeding a quarter of the capital and reserves. The proviso that excess share holdings acquired in the course of debt-realising should not be allowed, appears not to be necessary. Indeed, the very existence of this proviso indicates the weakness of the clause itself. Clauses 25 and 26 put teeth into the provision for supervision. As such, the penalty provided under sub-clause (4) of clause 25 of $250 is rather low. Normally one would expect that no finance company would refuse to show its books and data to an officer appointed by the Commissioner. The occasion when it will do so will be rare but very important from the point of security of the depositors. I would suggest a heavier penalty be provided. Mr Speaker, Sir, with these comments, I support the Bill. 5.45 p.m.

(In Mandarin): Sir, I support the Finance Companies Bill. Why I support it is that in the past the law has loopholes. For example, not long ago there was an assurance company owned by a foreign investor. He earned a lot of money. Perhaps the people thought that he was from a financially strong country. Therefore, many people bought policies from him and he earned a lot of money. He requested the Government to allow him to remit his money back to his country. After investigations, the Government found that he had no capital invested. Why is it easy to do business without capital? It is because we have loopholes in our law. Therefore, we must revise and amend our law in order to deal with speculators. We know there are many finance companies in Singapore. There are as many finance companies as there are coffee-shops. Therefore, we should con trol them. We must take care and look into the matter. We know that the capital of finance companies varies. Some have large capital and others have less. But the business done exceeds the capital. Where is the security granted to the depositors? One day if the money is swallowed up by the company, who is to repay the depositors? Is it the Government? Therefore, I fully support the Bill introduced by the Finance Minister. However, we should refer it to a Select Committee in order to study it in greater detail. 5.49 p.m.

Sir, I do not in any way oppose the introduction of the Finance Companies Bill which is now tabled in this House for Second Reading. However, I wish to offer my brief observations. First, I do agree that there is a need for the passing of laws to control finance companies in the best interest of the public at large. The main purpose of this Bill is to safeguard the interest of would-be depositors who are mostly the working-class in our Republic. This is a correct move and in line with the policy of our Government. Secondly, the provisions in this Bill are far too rigid. They are designed not only to control and restrict the establishment of finance companies, but also to regulate the scope of their business. Thirdly, I would like to offer some suggestions. The control must be gradual and not too rigid. Sir, the provisions contained in clauses 17 to 22 are far too stiff and restrictive. The result will be that the small trading houses will have to close down and the interest of the public may be jeopardised and unemployment will also result. The control and licensing of finance companies would create an impression that finance companies in general have been fiddling with public money. I agree that there may be a few dishonest and unscrupulous ones, and so there goes the saying - a rotten egg in a basket of good eggs has made the entire basketful rotten. According to this Bill, the Commissioner seems to have wide powers. The prescribing of the maximum rates of interest - and they are going to be ceiling rates - should be treated as a guide rather than an order, as some companies may not be able to pay such rates. As a matter of fact, it is purely in the public interest to have an equitable distribution of profits. Unlike service, the payment of interest varies according to the sums deposited. For example, if $10 million has been utilised and if it has resulted in profits of, say, $1 million, then the management of the finance company will be able to pass on part of the profits to the depositors according to the amounts they have deposited. Surely any finance company which can afford to pay such bonuses should deserve the support of the public. Fourthly, the finance companies in our Republic do play an important role in our economy. This being the case, the Government should encourage the existence of such companies rather than push them over the cliff, so to say, because of the extremely restrictive measures in this Bill. To me, some of the measures are even stricter than those in the Banking Ordinance. My fifth point is that at the present moment the finance companies are carrying on a very wide range of business ii our trading society. If too many restrictions are to be imposed, the end result will be that a few finance companies will exist and this will, in turn, contradict the policy of our Government to encourage industrial growth, as a lot of small traders and small factories are depending on loans from finance companies to carry out their expansion programmes. Sir, I now come to my sixth point. As the present position stands, finance companies have actually participated in the development carried out by the private sector, i.e., housing development for the higher income group, for which there is at the moment no government participation. In this particular field, a lot of private funds are involved and the depositors will then in turn enjoy the benefit. Lastly, I wish to urge the Minister for Finance to refer this Bill to a Select Committee for views from all sections of the public. I see no urgent need to rush through this Bill today. 5.55 p.m.

(In Tamil): Sir, this Finance Companies Bill has my full support. It is to control the activities of finance companies and to safeguard the interest of the public. The proposal that this Bill should be sent to a Select Committee is a means of delaying its passage. My view is that it should be taken through all stages and passed into law. 5.56 p.m.

Mr Speaker, Sir, the advent of finance companies seems to be quite a recent one. They have sprung up like mushrooms. At a glance, they may be classified into three categories :- 1. Finance companies which are subsidiaries of banks; 2. Small-time finance companies which lend money in respect of sales or hire purchase of cars, taxis and even to kelong owners, fishermen and farmers; 3. Large finance companies which operate independently in the field of investment. Sir, the fact that banks operate their Own finance companies appears to stress the need for such institutions. It also to a certain extent reflects the inadequacy of the services provided by the banks themselves. On the whole, finance companies do serve the needs of certain sections of our population. One may place them somewhere between banks and the chettiars or moneylenders. For those who have access to banking facilities and who are reluctant to use the facilities provided by the chettiars or moneylenders, finance companies will be in a position to offer the necessary assistance in their financial problems. The increasing number of finance companies operating in the Republic does point to the necessity of legislating certain controls over them. About the Bill itself, my colleagues and I are concerned about the ceiling of $1,000 for loans of an unsecured nature. This will definitely affect the small traders, farmers and kelong owners I hope the Minister will reconsider relaxing a little on these $1,000 unsecured loans. Sir, if finance companies are to be allowed to continue their operations in the Republic, they should be placed under some control in order to safeguard the interest of small depositors, but they should be allowed reasonable scope for conducting their business to ensure that there is enough profit for discharging their obligations. I am sure that the Bill, in spite of its restrictions, gives genuine finance companies, not the mushroom type, enough scope to do business and make some profit. Sir, originally I thought that after the Second Reading of this Bill, it would be referred to a Select Committee to enable the affected parties to have an opportunity to voice their opinion.; or make their recommendations. Sir, I would further add that it would appear, at first sight, unfair on the part of the Government to pass a Bill of such a nature without listening to the views of the public. I could not understand the urgency for this Bill going through its Third Reading today, but having heard the explanation of the Minister for Finance, I am satisfied and convinced that the earlier the Bill becomes law, the better it will be for the have-nots. Sir, I doubt whether other countries have similar legislation, but unique circumstances must be met with legislation. After all, the P.A.P, is the People's Action Party, not just in name only. If we are to protect the small traders, fishermen and farmers from being swindled by unscrupulous operators of finance companies, the protection given by this Bill is very necessary. Sir, I support this Bill without reservation.

Mr Speaker, Sir, the Government's intention of bringing in legislation to regulate finance companies was first announced in last year's Budget debate. It has taken a full year for the Bill to come before Parliament. It is, of course, better late than never. It is very necessary that legislation be introduced to control what my colleague calls the mushrooming of finance companies. The object of this Bill is to protect small investors. That is what a socialist government like the P.A.P, should and must do. It is ironical, therefore, that some of my colleagues in this House who are good socialists should have forgotten the small man and have taken up the cudgels on behalf of finance companies. I think the reason for this is that my colleagues are labouring under the misunderstanding of what a finance company is. In this connection, Mr Speaker, Sir, may I be allowed to read the definition of "finance company" in clause 2 of the Bill: `"finance company" means any company licensed under this Act, to carry on financing business, and all branches and offices in Singapore of such a company shall be deemed to be one finance company for the purposes of this Act;'. We must now go further down and read what the definition of "financing business" is: `"financing business" means the business of -

Sir, the Member for Choa Chu Kang was quoting from the proceedings of the Select Committee on the current Companies Bill in which the topic discussed was finance companies which are subsidiary companies of banks, and it was regretted that banks had only a moral obligation and not a legal obligation to support the finance company, so that the finance company could use a bank's name and in that way attract deposits. Here, Sir, in today's Straits Times there is an advertisement, presumably inserted by one of the big local banks, which disclaims all connection with a finance company with a similar name. May I read you excerpts from this advertisement which appears on page 20 of today's Straits Times? `THE OVERSEAS UNION BANK LTD, and the OVERSEAS UNION GROUP offer to their customers a comprehensive range of services ... etc. OVERSEAS UNION BANK LIMITED and its wholly-owned subsidiaries: OVERSEAS UNION BANK NOMINEES LTD. OVERSEAS UNION INSURANCE LTD. OVERSEAS UNION ENTERPRISE LTD. OVERSEAS UNION GARDEN LTD. To save confusion, may we point out that THE OVERSEAS UNION BANK LTD, and the OVERSEAS UNION GROUP have no connections whatsoever with the OVERSEAS UNION FINANCE LTD. of Singapore.' Sir, when things have reached such a pass, that finance companies resort to this kind of dubious practice, I think it is absurd to suggest that we refer this Bill to Select Committee in order to allow more scope for rather dubious characters to engage in this kind of dubious practice. So I am afraid I cannot agree with the proposal from Mem bers to refer this Bill to Select Committee, as there is urgent need to see that control is instituted forthwith over finance companies. In so saying, may I repeat again that I do not regard all finance companies as of a doubtful character? I have stated in my speech on the Second Reading that they do perform a useful role in society and that we should try to allow them to fulfil this useful role. The Member for Have-lock and the Member for Choa Chu Kang have so clearly and so forcefully put the case for control of finance com panies that there is very little for me to say, without repeating what they have already said. But I do wish to refer to the points made by the Member for Havelock. He said that we should not try to control how people should lend their own funds. That is not the case. We are trying to control the means by which people lend other people's funds. It is all right if you speculate and make money; or if you speculate and go bankrupt. No one is going to stop you one way or the other. But we must make sure that you do not endanger other people's money, and that when you borrow money from the public, you invest it wisely and securely, and that abuses of various kinds whereby directors of companies can make use of other people's money to get rich, must stop. This is the cardinal principle underlying this Bill. Critics of the Bill have said that it will bear very harshly on finance companies and many of them may close down. On the one hand, they say that these companies are essential to the economy and that they are being well run. In fact, the Member for Ulu Pandan claims that in many cases their liquid position is even better than that of the banks. If that is so, what have they got to fear from this control? Many Members have stressed the need to safeguard the interests of small borrowers who are traders or small industrialists and have to go to finance companies for finance. I can give an assurance that we will do everything to safeguard the interest of small borrowers from finance companies, be they small traders, fishermen, or small industrialists. What we want to prevent is the wrong or inappropriate investment of other people's money either in non-liquid or in speculative ventures. The Member for Tampines says that the Commissioner for Finance Companies is a powerful man. Of course, he is a powerful man. He needs the power to control finance companies. How are you going to ensure that adequate control is exercised over these people if the Commissioner does not have these powers? But what the Member for Tampines has not said is that these powers are unnecessary. He says that civil servants cannot tell finance companies how to make a profit. I agree with him. But we can tell finance companies how their assets can be secured so that when their depositors want their money back, it can be forthcoming. The Member for Tampines also asks: do other countries have similar powers in their legislation? The answer is: in other countries finance companies are not allowed to be established. You have to establish a properly-run bank, which is subject to all the controls which a central bank exercises over people who take in deposits and lend out deposits. It is only here, due to a lacuna in the law, that these finance companies have been allowed to be established. We cannot get them under the Moneylenders' Ordinance. We cannot get them under the Banking Ordinance. Therefore, it is necessary to introduce new legislation to control them. The Member for Jalan Kayu has not made any new points. I think he has repeated the points made by previous speakers, and I think the Member for Havelock and the Member for Choa Chu Kang have adequately answered all his points. There is one point raised - that there is fear that there will be unemployment as a result of Government control of finance companies. Why should there be unemployment? Unless, of course, some of these finance companies are found to be unsound, then they have to close down. If that is the case, it is better that they close down early so that fewer depositors lose their money than that more people are stung. The Member for Mountbatten, I think, has made some valid points. He says that we must ensure that the small businessmen who go to finance com panies for credit are not endangered. I have already given this assurance. Then he mentions housing investments and says that many finance companies invest in housing projects, and that this practice is disallowed in the Bill. Precisely so - you cannot take other people's money and invest it in long-term projects, money which the lender is entitled to have back, it is difFerent if you use your own money. If a group wants to invest in housing so that there can be better and more houses, the proper way is to use its own money to float a company and invite public sub scriptions for shares and use the capital to build the houses. You cannot use short-term deposits in building houses. Unsecured loans have been limited to $1,000, and many Members, both critics and supporters, think that this may be too small. I am prepared to look into it. But at present you cannot say to what extent the finance companies are, in fact, helping the small traders or small manufacturers. We just know nothing about the way these finance companies operate. My Ministry tried to get some information and asked for returns. These com panies refused to give any returns, so we just do not know what they are doing, and how they are investing their assets. Once this Bill becomes law, it is my intention to call upon all these companies to furnish me with the fullest details of how they have been investing their money. If it so turns out that a small trader or small manufacturer will suffer considerably by the limitation of unsecured loans -

None.

- then I am prepared to reconsider the matter. But my colleague and predecessor, the Minister of Defence, under whose skilful hands this Bill was produced, says none. He is also an experienced banker. All the same, we will give the benefit of the doubt to the Back-benchers who claim that small traders will be affected and, if that is the position, we will have a second look at this particular clause. In the meantime, this Bill must go through and controls must be imposed. Mr Rajoo rose -

Mr Rajoo, you have already spoken.

I think the Minister has not answered my point, and that is, to include the "chit fund" companies under this Bill. As he has explained just now, these companies come under the category ---

Order. You are making a second speech, Mr Rajoo. You can perhaps raise the matter in Committee.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Goh Keng Swee]. Bill considered in Committee.

6.34 p.m. Clauses 1 to 16 inclusive ordered to stand part of the Bill. Clause 17 --- Question proposed, "That clause 17 stand part of the Bill."

Mr Speaker, Sir, I agree with the aims of clause 17 in controlling the dealings of finance companies. My only complaint is that the clause is not happily drafted, it is rather vague. Clause 17 (1) reads: `No finance company shall ---

The intention of clause 17 (1) (a) is as stated by the Member for Choa Chu Kang. I do not know how it can be redraf ted in a happier way. I would have thought that, as it stands, this is to describe a bank account which is operated by payment on demand by cheque. If the hon. Member can propose a happier form of words, I am sure the House will be willing to consider it. I thought that there was some ambiguity about paragraph (a). It looks a bit odd, I confess. But on deeper reflection, I think the meaning becomes clear. My colleague, the Minister for Law, might want to comment on this. It is not really within my professional province. As regards clause 17 (1) (c), what the Member said is quite true. But I think the intention of the law officers who drafted it is to draw attention to the fact that the director, agent or manager of a finance company is not exempted from these restrictions. I think the intention is to make it clear beyond all doubt. I do not know whether my colleague, the Minister for Law, can perhaps elaborate on this.

The object of clause 17 (1) (a) is to prevent finance companies from acting like banks. Hence, anyone who deposits money with a finance company cannot get it back, as it were, on demand by writing out a cheque, as one does with a bank account. You deposit money in a bank which issues you with a cheque book, and by writing out a demand note by cheque, draft or order, you can immediately draw on that account. This is the object of clause 17 (1) (a) . I myself cannot see how it can be drafted in a better way. It does not prevent finance companies from returning money by cheque, draft or order. One deposits money not for immediate return but for return after three months, six months or a year, when it can be done by cheque, draft or order. What clause 17 (1) (a) seeks to prevent is a deposit followed by an immediate demand for payment by the depositor. As far as clause 17 (1) (c) is concerned, I need not add more to what the Minister for Finance has said. It is aimed at everybody. But the drafters felt it would be safer specifically to mention partner, manager or agent or any individual or firm of which any of its directors is a guarantor. This is to prevent ambiguity, and it is to make sure that these people do not get away with it that they are specifically mentioned.

Mr Speaker, Sir, the Minister for Finance has asked whether I can propose a happier set of wording. Unfortunately, I have not given notice of an amendment to this paragraph (a). But with your consent and with the general assent of the House, I can do so.

Mr Tang, before I give consent, may I offer a little comment? The words "cheque, draft or order" to my mind clearly refer to the means by which the "demand" is made,, and not to the means by which repayment is made. If you agree with that, interpretation, you may not wish, at this-stage, to seek to introduce an amendment. In any event, I take it the Minister will want to consult professional opinion in the Attorney General's Chambers before he expresses any views or accepts, any amendment from you at this stage.

As you please, Mr Speaker, Sir.

Question put, and agreed to. Clause 17 ordered to stand part of the Bill. Clauses 18 to 27 inclusive ordered to stand part of the Bill. Clause 28 -

Mr Rajoo, sub-clause (2) will give you an opportunity to say what you wanted to say a few minutes, ago on "chit fund" companies. Question proposed, "That clause 28, stand part of the Bill."

Mr Speaker, Sir, thosecompanies which have "chit" funds need not come under the Banking Ordinance or under the Moneylenders Ordinance. Therefore, these companies are registered as limited companies and the directors are not doing business in the best interest of the public. I understand that when some of these limited companies were registered, certain banks gave a guarantee to them. When cheques were issued by these companies to their depositors, the same banks returned the cheques dishonoured because of insufficient funds. So I would suggest to the Minister that in the public interest these "chit fund" companies should also be brought under this Finance Companies Bill. 6.45 p.m.

Sir, the Companies Act, which has just been passed by Parliament, provides under section 38 certain obligations in respect of com panies which invite the public to deposit money and there are certain obligations laid down under this Act to ensure that some control is exercised over them. I am not sure whether the companies referred to by the Member for Farrer Park would not come under the provisions of this Bill, because finance business is defined as borrowing money from the public, and this is exactly what these tontine companies do. They lend money to the public. I would have thought that it could be that these `companies would fall under the provisions of this Bill. This is really a rather legal technical point and perhaps the Minister for Law and National Development may come to the rescue again.

Mr Rajoo, is there anything you wish to say further?

I have not got anything further to say. But as the Minister for Finance has requested the Minister for Law and National Development to look into the matter, I hope he will do so.

Sir, these tontine companies, which the Member for Farrer Park is rather worried about, will be caught by section 38 (1) of the Companies Act which was read for the Third time a few hours ago. Section 38 (1) provides that: 'An invitation to the public to deposit money with or lend money to a corporation or proposed corporation shall not be issued circulated or distributed by the corporation or by any other person unless -' paragraphs (a), (b) and (c) are complied with. Section 38 (9) provides for heavy penalties - 'conviction to imprisonment for a term not exceeding two years or to a fine not exceeding five thousand dollars.' I doubt very much whether these tontine operators will be caught by the Finance Companies Act which strictly covers finance companies which borrow money and then lend it out. A tontine operator does not strictly borrow or lend. What he does is to invite people to subscribe to a certain fund and then it is more of a debt. I say $20, you say $21, someone else says $22, and the highest bidder gets the money for the month, after which he has to return a fixed sum. It is a group of people getting together, putting in a certain sum a month, and every month someone takes it away. All the operator does is to get his little commission. So, strictly speaking, he is not borrowing and then lending out. They are all perhaps borrowing and lending to one another. I doubt whether they would be caught by the Act. I may be wrong but, in the final analysis, it is for the courts to decide, and if we are wrong here, we can always amend our laws.

(In Mandarin): Sir, I would like to say a few words on tontine organisations. These organisations originated out of some moral responsibility for friendly mutual aid. For instance, if I am short of $2,000 for business, I gather a few friends together and form a tontine organisation. The purpose is to help myself to run my business. But nowadays people are different. They make use of this sort of organisation to swallow up other people's deposits. Once the leader has collected the money, he runs away. So there should be a law to control tontine organisations. Originally, the purpose of tontine organisations was very good. It was for mutual assistance. But now it is different. Nowadays the morals of the people are quite different from what they were in ancient times. So in law, we should have some measures to prevent people from a breach of faith by running away with the money deposited by their friends.

Sir, now that we are talking about tontines, I agree with what the Hon. Minister for Law and National Development has stated just now, that this Act does not catch tontine operators. In fact, I think there is a dubious line of common law authority which says that tontines are illegal as they are against public policy. In any event, I think there is a case that at some future session of Parliament, measures should be introduced in Parliament to control tontine operators and regulate this kind of business, because tontines also satisfy certain social and economic needs in Singapore. I think a study is being made by the Faculty of Law of the University of Singapore and perhaps we will have the time to go into it.

Sir, I am a bit disturbed by the Minister for Law and National Development's reply that he cannot do anything about this "chit" fund. In fact, I am not asking him to look into illegal tontine organisations, but these are companies which are registered under the Companies Ordinance or some other law, and they seem to operate in a way which is not in the interest of the public. The public subscribe to these "chit" funds. Say the tontine is for $20 a month. They subscribe to the tontine. They put their savings into these com panies. Finally, after paying for 10 or 12 months, these people are informed by the operator that he is not going to pay back their deposits. This is something which the Government should look into, in order to safeguard the interest of such people. If there is no law at present to control tontine organisations, then the Minister should introduce legislation or amend the law to control them.

Sir, I always thought that tontine operators were small-time people, domestic servants and such types. This is the first time I hear that they have formed a limited company. If, in fact, they have formed a limited company, then they will fall under section 38 of the Companies Ordinance provided, of course, the Member for Bukit Panjang is not correct in saying that these activities are illegal in law. Assuming that they are legal and they are registered, then they will come under section 38. Subsection (7) of section 38 gives the Minister authority by notification in the Gazette to specify terms and conditions subject to which subsection (6) of this section shall have effect. In other words, the activities and terms upon which these transactions are conducted can be regulated by the Minister; in this case, the Minister for Law. So the Member for Farrer Park need not despair. Of course, all this is on the assumption that these activities are legal. If they are illegal, then such companies cannot be registered.

Question put, and agreed to. Clause 28 ordered to stand part of the Bill. Clauses 29 to 45 inclusive ordered to stand part of the Bill.

After that interesting debate, I must refer to a very mundane matter. A spelling correction is to be made in the Long title. In the word "licence", the letter "c" where it occurs, for the second time should be an "s". This error will be corrected. Bill reported without amendment; read a Third time and passed.

Order for Third Reading read. 7.00 p.m.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Third time." Members of the House will recall that the Land Titles (Strata) Bill was referred to the Select Committee on the 27th June this year. Written representations were received from the Estates Manager. Housing and Development Board, the Land and Housing Development Association of Singapore, and the Real Estate Valuers Association (Singapore). In addition, the Select Committee also heard oral evidence from the Real Estate Valuers Association. A number of useful suggestions which were made have been accepted. The amendments made by the Select Committee are set out on pages C4, C5 and C6 of the Committee's Report tabled in this Parliament on 7th December this year as Paper Parl. 12 of 1967. I will not burden the House with details of these amendments, many of which are drafting amendments which merely refine the Bill. One particular clause, however, in the original Bill `dealing with the collection of pioperty tax in respect of flats has been deleted, as it appears that such a provision, if necessary or advisable, should properly be in the Property Tax Ordinance. Mr Speaker, Sir, the Bill as now tabled before the House incorporates the recommendations of the Select Committee. Sir, I beg to move.

Question put, and agreed to.

There is a clerical error in the marginal note of clause 32 which reads "Surrender of unregistered land to Singapore.....". It should read "Surrender of unregistered land to the President....." as provided in the clause itself. That correction will be made.

I am much obliged, Sir. Bill accordingly read a Third time and passed.

7.03 p.m.

Mr Speaker, Sir, I beg to move, That Parliament, pursuant to subsection t3) of section 5 of the Registration of Imports and Exports Ordinance (Cap. 261), resolves that the Registration of Imports and Exports Rules, 1967, published as Notification S 244 in the Gazette Subsidiary Legislation Supplement No. 76 of 14th December, 1967, as contained in Paper S.L. 60 of 1967, he approved. Sir, the Registration of Imports and Exports Rules, 1967, embody the Imports and Exports Rules of 1935 together with a new provision for the documentation of trade between Singapore and West Malaysia. Until now, imports and exports to and from West Malaysia do not require Singapore per mits or Singapore documentation. The proposed documentation is to enable us to compile our own statistics of trade with West Malaysia. Such trade statistics are now compiled and supplied by the Statistics Department at Kuala Lurnpur. Documentation of our trade with West Malaysia is also made necessary by the export incentive scheme which is to be effective next year. Under the amended Rules, importers and exporters will be required to submit documents to cover goods imported from or exported to West Malaysia. In the case of imports by road or rail, the document required will be submitted to the Customs and will merely be an additional copy of the export permit which the exporter in West Malaysia submits to Malaysian Customs. For exports to West Malaysia by road or rail, the document required will be a copy of the Malaysian Customs import permit. In case of imports or exports by sea or air, the trader will submit one copy of the Singapore Inward Declaration or Outward Declaration to the shipping or airline agent. The shipping or airline agent concerned will then forward the declarations to the Import and Export Office. All declarations will not have to be approved by the Import and Export Office. No fees are payable on these declarations. In this way, very little delay and no inconvenience will be caused to the traders. We have already consulted the various Chambers of Commerce, shipping associations and the Airline Operators Committee, and they have agreed to the procedures proposed. Sir, I beg to move.

Question put, and agreed to. Resolved, That Parliament, pursuant to subsection (3) of section 5 of the Registration of Imports and Exports Ordinance (Cap. 261), resolves that the Registration of Imports and Exports Rules, 1967, published as Notification S 244 in the Gazette Subsidiary Legislation Supplement No. 76 of 14th December, 1967, as contained in Paper S.L. 60 of 1967, be approved.

Resolved, "That Parliament do now adjourn to a date to be fixed." - [Mr Barker]. Adjourned accordingly at Six minutes past Seven o'clock p.m. to a date to be fixed.