Volume III Thursday No. 15 19th January, 1967

PARLIAMENTARY DEBATES DEWAN RA'AYAT (HOUSE OF REPRESENTATIVES)

OFFICIAL REPORT

THIRD SESSION OF THE SECOND PARLIAMENT OF MALAYSIA CONTENTS ANNOUNCEMENTS BY MR DEPUTY SPEAKER— Message from the Senate [Col. 2525J Assent to Bills Passed [Col. 2527] Message from the President of the Constituent Assembly of Vietnam- Greetings [Col. 2527] ORAL ANSWERS TO QUESTIONS [Col. 2528] EXEMPTED BUSINESS (Motion) [Col. 2552] BILLS PRESENTED [Col. 2553] MOTIONS— Persidangan Meshuarat (Usul) [Col. 2556] The Customs Duties (Sabah) (Amendment) (No. 5) Order, 1966 [Col.

The Customs (Import and Export) (Amendment) (No. 4) Order, 1966 [Col. 2558] The Customs Duties (Amendment) (No. 7) Order, 1966 [Col. 2558] The Customs Duties (Sabah) (Amendment) (No. 6) Order, 1966 [Col. 2561] The Customs (Import and Export) Duties (Amendment) (No. 5) Order, 1966 [Col. 2563] ' The Customs Duties (Amendment) Order, 1967 [Col. 2563] The Customs Duties (Sabah) (Amendment) Order, 1967 [Col. 2565] The Customs Duties (Import and Export) Duties (Amendment) Order, 1967 [Col. 2567] BILL— The Supply (1967) Bill [Col. 2567]

DI-CHETAK DI-JABATAN CHETAK KERAJAAN OLEH OOI THEAM HOCK, PENGUASA, IPOH 1968 MALAYSIA

DEWAN RA'AYAT (HOUSE OF REPRESENTATIVES) Official Report

Third Session of the Second Dewan Ra'ayat

Thursday, 19th January, 1967 The House met at Ten o'clock a.m.

PRESENT: The Honourable Mr Deputy Speaker, TUAN SYED ESA BIN ALWEE, J.M.N., S.MJ., P.I.S. the Prime Minister and Minister of Foreign Affairs, Y.T.M. TUNKU ABDUL RAHMAN PUTRA AL-HAJ, K.O.M. (Kuala Kedah). the Deputy Prime Minister, Minister of Defence and Minister of National and Rural Development, TUN HAJI ABDUL RAZAK BIN DATO' HUSSAIN, S.M.N. (Pekan). the Minister of Home Affairs and Minister of Justice, TUN DR ISMAIL BIN DATO' HAJI ABDUL RAHMAN, S.S.M., P.M.N. (Johor Timor). the Minister of Finance, TUAN TAN SIEW SIN, J.P. (Melaka Tengah). the Minister of Works, Posts and Telecommunications, TAN SRI V. T. SAMBANTHAN, P.M.N. (Sungei Siput). the Minister of Transport. TAN SRI HAJI SARDON BIN HAJI JUBIR, P.M.N. (Pontian Utara). the Minister of Education, TUAN MOHAMED KHIR JOHARI (Kedah Tengah). the Minister of Health, TUAN BAHAMAN BIN SAMSUDIN (Kuala Pilah). the Minister of Commerce and Industry, DR LIM SWEE AUN, J.P. (Larut Selatan). the Minister for Welfare Services, TUAN HAJI ABDUL HAMID KHAN BIN HAJI SAKHAWAT ALI KHAN, J.M.N., J.P. (Batang Padang). the Minister for Sarawak Affairs, TAN SRI TEMENGGONG JUG AH ANAK BARIENG, P.M.N., P.D.K. (Sarawak). the Minister of Information and Broadcasting and Minister of Culture, Youth and Sports, TUAN SENU BIN ABDUL RAHMAN (Kubang Pasu Barat). the Minister of Agriculture and Co-operatives, TUAN HAJI MOHAMED GHAZALI BIN HAJI JAWI (Ulu Perak). the Minister of Lands and Mines, TUAN ABDUL RAHMAN BIN YA'KUB (Sarawak). 2519 19 JANUARY 1967 2520

The Honourable the Minister for Sabah Affairs, TUN DATU MUSTAPHA BIN DATU HARUN, S.M.N., P.D.K. (Sabah). the Assistant Minister of National and Rural Development, TUAN SULAIMAN BIN BULON, P.J.K. (Bagan Datoh). the Assistant Minister of Culture, Youth and Sports, ENGKU MUHSEIN BIN ABDUL KADIR, J.M.N., S.M.T., P.J.K. (Trengganu Tengah). the Assistant Minister of Education, TUAN LEE SIOK YEW, A.M.N., P.J.K. (Sepang). the Parliamentary Secretary to the Minister of Health, TUAN IBRAHIM BIN ABDUL RAHMAN (Seberang Tengah). the Parliamentary Secretary to the Minister of Labour, TUAN LEE SAN CHOON, K.M.N. (Segamat Selatan). the Parliamentary Secretary to the Minister of Finance, TUAN ALI BIN HAJI AHMAD (Pontian Selatan). the Parliamentary Secretary to the Deputy Prime Minister, TUAN CHEN WING SUM (Damansara). TUAN ABDUL GHANI BIN ISHAK, A.M.N. (Melaka Utara). TUAN ABDUL KARIM BIN ABU, A.M.N. (Melaka Selatan). WAN ABDUL KADIR BIN ISMAIL, P.P.T. (Kuala Trengganu Utara). TUAN ABDUL RAHMAN BIN HAJI TALIB, P.J.K. (Kuantan). WAN ABDUL RAHMAN BIN DATU TUANKU BUJANG, A.B.S. (Sarawak). TUAN ABDUL RAZAK BIN HAJI HUSSIN (Lipis). DATO' ABDULLAH BIN ABDULRAHMAN, DATO' BIJAYA di-Raja (Kuala Trengganu Selatan). Y.A.M. TUNKU ABDULLAH IBNI AL-MARHUM TUANKU ABDUL RAHMAN, P.P.T. (Rawang). TUAN HAJI ABDULLAH BIN HAJI MOHD. SALLEH, A.M.N., S.MJ., P.I.S. (Segamat Utara). TUAN ABU BAKAR BIN HAMZAH (Bachok). TUAN HAJI AHMAD BIN ABDULLAH, S.M.K. (Kelantan Hilir). TUAN AHMAD BIN ARSHAD, A.M.N. (Muar Utara). TUAN HAJI AHMAD BIN SA'AID, J.P. (Seberang Utara). DR AWANG BIN HASSAN, S.MJ. (Muar Selatan). TUAN AZIZ BIN ISHAK (Muar Dalam). TUAN CHAN CHONG WEN, A.M.N. (Kluang Selatan). TUAN CHAN SEONG YOON (Setapak). TUAN CHAN SIANG SUN, A.M.N., P.J.K. (Bentong). TUAN CHEW BIOW CHUON, J.P. (Bruas). TUAN CHIA CHIN SHIN, A.B.S. (Sarawak). TUAN FRANCIS CHIA NYUK TONG (Sabah). TUAN CHIN FOON (Ulu Kinta). TUAN D. A. DAGO ANAK RANDAN alias DAGOK ANAK RANDEN (Sarawak). TUAN C. V. DEVAN NAIR (Bungsar). TUAN EDWIN ANAK TANGKUN (Sarawak). 2521 19 JANUARY 1967 2522

The Honourable DATIN HAJJAH FATIMAH BINTI HAJI ABDUL MAJID (Johor Bahru Timor). TAN SRI FATIMAH BINTI HAJI HASHIM, P.M.N. (Jitra-Padang Terap). ... TUAN S. FAZUL RAHMAN, A.D.K. (Sabah). TUAN GANING BIN JANGKAT (Sabah). TUAN GEH CHONG KEAT, K.M.N. (Penang Utara). TUAN HAJI HAMZAH BIN ALANG. A.M.N., PJ.K. (Kapar). TUAN HANAFI BIN MOHD. YUNUS, A.M.N., J.P. (Kulim Utara). TUAN HANAFIAH BIN HUSSAIN, J.M.N. (Jerai). TUAN HARUN BIN ABDULLAH, A.M.N., J.P. (Baling). WAN HASSAN BIN WAN DAUD (Tumpat). TUAN HUSSEIN BIN TO' MUDA HASSAN, A.M.N. (Raub). DATO' HAJI HUSSEIN BIN MOHD. NOORDIN, D.P.M.P., A.M.N., PJ.K. (Parit). TUAN HAJI HUSSAIN RAHIMI BIN HAJI SAMAN, S.M.K. (Kota Bharu Hulu). TUAN IKHWAN ZAINI (Sarawak). TUAN ISMAIL BIN IDRIS (Penang Selatan). TAN SRI SYED JA'AFAR BIN HASAN ALBAR, P.M.N. (Johor Tenggara). PENGHULU JINGGUT ANAK ATTAN, Q.M.C., A.B.S. (Sarawak). TUAN KADAM ANAK KIAI (Sarawak). TUAN KAM WOON WAH, J.P. (Sitiawan). TUAN KHOO PENG LOONG (Sarawak). TUAN EDMUND LANGGU ANAK SAGA (Sarawak). TUAN LEE SECK FUN, K.M.N. (Tanjong Malim). DR LIM CHONG EU (Tanjong). TUAN LIM PEE HUNG, PJ.K. (Alor Star). DR MAHATHIR BIN MOHAMAD (Kota Star Selatan). TUAN T. MAHIMA SINGH, J.P. (Port Dickson). TUAN C. JOHN ONDU MAJAKIL (Sabah). TUAN JOSEPH DAVID MANJAJI (Sabah). TUAN MOHD. ARIF SALLEH, A.D.K. (Sabah). TUAN MOHD. DAUD BIN ABDUL SAMAD (Besut). TUAN MOHAMED IDRIS BIN MATSIL, J.M.N., P.J.K., J.P. (Jelebu- Jempol). TUAN MOHD. TAHIR BIN ABDUL MAJID, S.M.S., PJ.K. (Kuala Langat). TUAN MOHAMED YUSOF BIN MAHMUD, A.M.N. (Temerloh). WAN MOKHTAR BIN AHMAD (Kemaman). TUAN HAJI MOKHTAR BIN HAJI ISMAIL (Perlis Selatan). TUAN MUHAMMAD FAKHRUDDIN BIN HAJI ABDULLAH (Pasir Mas Hilir). TUAN HAJI MUHAMMAD SU'AUT BIN HAJI MUHD. TAHIR, A.B.S. (Sarawak). 2523 19 JANUARY 1967 2524

The Honourable DATO' HAJI MUSTAPHA BIN HAJI ABDUL JABAR, D.P.M.S., A.M.N., J.P. (Sabak Bernam). TUAN MUSTAPHA BIN AHMAD (Tanah Merah). TAN SRI NIK AHMAD KAMIL, D.K., S.P.M.K., S.J.M.K., P.M.N., P.Y.G.P., Dato' Sri Setia Raja (Kota Bahru Hilir). TUAN NG FAH YAM (Batu Gajah). TUAN ONG KEE HUI (Sarawak). TUAN HAJI OTHMAN BIN ABDULLAH (Hilir Perak). TUAN OTHMAN BIN ABDULLAH, A.M.N. (Perlis Utara). TUAN QUEK KAI DONG, J.P. (Seremban Timor). TUAN HAJI RAHMAT BIN HAJI DAUD, A.M.N. (Johor Bahru Barat). TUAN RAMLI BIN OMAR (Krian Darat). TUAN HAJI REDZA BIN HAJI MOHD. SAID, PJ.K., J.P. (Rembau- Tampin). TUAN SEAH TENG NGIAB, P.I.S. (Muar Pantai). TUAN SIM BOON LIANG, A.B.S. (Sarawak). TUAN SIOW LOONG HIN, P.J.K. (Seremban Barat). TUAN SNAWI BIN ISMAIL, PJ.K. (Seberang Selatan). TUAN SNG CHIN JOO (Sarawak). TUAN SOH AH TECK (Batu Pahat). TUAN SULEIMAN BIN ALI (Dungun). TUAN SULEIMAN BIN HAJI TAIB (Krian Laut). PENGIRAN TAHIR PETRA (Sabah). TUAN TAJUDDIN BIN ALI, PJ.K. (Larut Utara). TUAN TAI KUAN YANG (Kulim Bandar Bharu). TUAN TAMA WENG TINGGANG WAN (Sarawak). DR TAN CHEE KHOON (Batu). TUAN TAN CHENG BEE, J.P. (Bagan). TUAN TAN KEE GAK (Bandar Melaka). TUAN TAN TOH HONG (Bukit Bintang). TUAN TAN TSAK YU (Sarawak). TUAN TIAH ENG BEE (Kluang Utara). TUAN TOH THEAM HOCK (Kampar). TUAN HAJI ZAKARIA BIN HAJI MOHD. TAIB, PJ.K. (Langat).

ABSENT:

The Honourable Mr Speaker, DATO' CHIK MOHAMED YUSOF BIN SHEIKH ABDUL RAHMAN, S.P.M.P., J.P. Dato' Bendahara Perak. the Minister for Local Government and Housing, TUAN KHAW KAI-BOH, PJ.K. (Ulu Selangor). the Minister of Labour, TUAN V. MANICKAVASAGAM, J.M.N., P.J.K. (Klang). Assistant Minister without Portfolio, TUAN HAJI ABDUL KHALID BIN AWANG OSMAN, (Kota Star Utara). the Assistant Minister of Finance, DR NG KAM POH, J.P. (Telok Anson). 2525 19 JANUARY 1967 2526

The Honourable TUAN HAJI ABDUL RASHID BIN HAJI JAIS (Sabah). TUAN ABDUL SAMAD BIN GUL AHMAD MIANJI (Pasir Mas Hulu). PUAN AJIBAH BINTI ABOL (Sarawak). O.K.K. DATU ALIUDDIN BIN DATU HARUN, P.D.K. (Sabah). TUAN JONATHAN BANGAU ANAK RENANG, A.B.S. (Sarawak). PENGARAH BANYANG ANAK JANTING, P.B.S. (Sarawak). DATU GANIE GILONG, P.D.K., J.P. (Sabah). TUAN STANLEY HO NYUN KHIU, A.D.K. (Sabah). TUAN HUSSEIN BIN SULAIMAN (Ulu Kelantan). TUAN THOMAS KANA (Sarawak). TUAN AMADEUS MATHEW LEONG, A.D.K., J.P. (Sabah). DATO' LING BENG SIEW, P.N.B.S. (Sarawak). TUAN LIM KEAN SIEW (Dato' Kramat). TUAN PETER LO SU YIN (Sabah). DATO' DR HAJI MEGAT KHAS, D.P.M.P., J.P., PJ.K. (Kuala Kangsar). DATO' HAJI MOHAMED ASRI BIN HAJI MUDA, S.P.M.K. (Pasir Puteh). ORANG TUA MOHAMMAD DARA BIN LANGPAD (Sabah). TUAN MOHD. ZAHIR BIN HAJI ISMAIL, J.M.N. (Sungai Patani). RAJA ROME BIN RAJA MA'AMOR, PJ.K., J.P. (Kuala Selangor). TUAN SANDOM ANAK NYUAK, A.M.N. (Sarawak). TUAN D. R. SEENIVASAGAM (Ipoh). DATO' S. P. SEENIVASAGAM, D.P.M.P., P.M.P., J.P. (Menglembu). TUAN YEH PAO TZE, A.M.N. (Sabah). TUAN STEPHEN YONG KUET TZE (Sarawak).

PRAYERS "Mr Speaker, (Mr Deputy Speaker in the Chair) The Senate has agreed to the ANNOUNCEMENTS BY following BillS: (1) to amend the Royal Malaysia Police MR DEPUTY SPEAKER Act, 1963, to vest the control of components in the States of Malaya MESSAGE FROM THE SENATE in the Inspector General of Police 2 and provide for the appointment of Mr (Deputy) Speaker: Ahli Yang Ber- a Deputy Inspector General of hormat, saya hendak mema'alumkan Police and for other matters ia-itu saya telah menerima satu perutu- connected therewith; san yang bertarikh 8 haribulan Novem­ (2) to amend and consolidate the law relating to the Development Fund ber, 1966, daripada Yang di-Pertua of the Federation and to make Dewan Negara berkenaan dengan per- provision relating to financial pro­ kara2 yang tertentu yang telah di- cedure with respect to the Develop­ hantar oleh Majlis ini minta di-per- ment Funds of the States; setujukan oleh Dewan Negara. (3) to amend the Currency Act, 1960, of the States of Malaya and the Sekarang saya minta Setia-usaha Currency Ordinances, 1960, of Sa­ Majlis membachakan perutusan itu bah and Sarawak; pada Majlis ini. (4) to amend the Customs Ordinance, 1952; (Whereupon the Clerk reads the (5) to amend the Treasury Bills (Local) following message) Ordinance, 1946; 2527 19 JANUARY 1967 2528

(6) to apply a sum out of the Consoli­ "The Constituent Assembly of the Re­ dated Fund to the service of the public of Vietnam extends greetings to the year ending on the thirty-first day Members of Parliament and people of of December, 1967; Malaysia. It also expresses the hope of the (7) to amend the Municipal Ordinance; Vietnamese people to co-operate closely with (8) to make provision for the prepara­ the people of Malaysia in the building of tion and promotion of standards in democracy, defence of freedom and peace for relation to commodities, processes humanity." and practices, for the establishment (Sgd.) PHAN KHAC SUU, of a Standards Institution and Stan­ President of the Constituent dards Council, for defining the Assembly of the Republic of functions of the Institution and the Vietnam functions and powers of the Coun­ cil, and for incidental and connected purposes; ORAL ANSWERS TO without amendment. QUESTIONS (Sgd.) DATO' HAJI ABDUL RAHMAN BIN MOHD. YASIN, DIPLOMATIC RELATIONS WITH President." U.S.S.R. 1. Tuan C. V. Devan Nair asks the ASSENT TO BILLS PASSED Minister of Foreign Affairs whether the Mr (Deputy) Speaker: Ahli2 Yang Ber- Government will consider the early hormat, saya hendak mema'alumkan establishment of diplomatic relations kapada Majlis ini bahawa Duli Yang with the U.S.S.R. Maha Mulia Yang di-Pertuan Agong 2 The Prime Minister: Mr Speaker Sir, telah memperkenankan Rang Undang in terms of national priorities, there is berikut yang telah di-luluskan oleh 2 no immediate need to set up diplomatic Parlimen baharu ini: relations with Soviet Russia. However, (1) The Royal Malaysia Police Bill, there has been close contact between 1966 the two countries in recent times and (2) The Development Funds Bill, the Honourable Member will remem­ 1966 ber, in September, 1966, our Trade (3) The Currency Laws (Amend­ Mission went to Russia to discuss trade ment) Bill, 1966 with the Russian Government: I would (4) The Customs (Amendment) Bill, say here that they were very, very well 1966 received by the Russian Authorities (5) The Treasury Bills (Local) and we have in return invited them to (Amendment) Bill, 1966 come here. Their mission will be here as from the 20th March and will be (6) The Consolidated Fund (Expen­ here for 10 days. Two journalists, from diture on Account) Bill, 1966 Tass and from Pravda, the official (7) The Municipal (Amendment) Russian news agencies, have also been Bill, 1966, and here and have also come here as our (8) The Standards Bill, 1966. guests. They have been taken round throughout the country to see for them­ MESSAGE FROM THE PRESIDENT selves how things are here and, I think, OF THE CONSTITUENT ASSEM­ to express an opinion on their side, it BLY OF THE REPUBLIC OF has been one of mutual respect for us. VIETNAM—GREETINGS As I said, in the setting up of diploma­ Mr (Deputy) Speaker: Ahli2 Yang Ber- tic relations between the two countries, hormat, saya telah menerima satu per- there must be mutual agreement to do utusan daripada President Constituent so. We on our own cannot press them Assembly of the Republic Vietnam for it, but I can tell you that we have pada lOhb November, 1966. Sekarang no objection to diplomatic relations saya minta Setia-usaha Majlis mem- with Russia, and any time they want bachakan perutusan itu. to establish a mission here, we will (Whereupon the Clerk reads the only be too happy to do the same in message) their country. 2529 19 JANUARY 1967 2530 Dr Tan Chee Khoon: Mr Speaker, and that the lives of these Members Sir, will the Honourable Prime Minis­ were in danger. Investigations was ter consider a request made in the held, but we found that there was no papers by the Secretary-General of the strong evidence to support it. Up to Transport Workers' Union that this now there has been no more trouble. country allow a trade union mission to go and observe May Day festivities in MENCHETAK RANG UNDANG2 Moscow. DALAM BAHASA KEBANGSAAN The Prime Minister: They can, I 3. Datin Fatimah binti Haji Abdul think, go at other times; but May Day Majid bertanya kapada Perdana Men- is supposed to be a communist day and teri bila-kah Kerajaan akan bertindak I do not think, with due respect to our tegas menchetak semua Rang Undang2 trade unions, that they are members of yang di-bawa ka-Majlis ini, dalam the communist organisation, and there­ Bahasa Kebangsaan. fore there is no particular desire on their part to go for May Day celebra­ The Prime Minister: Tidak berapa lama lagi kita dapat mengemukakan tions in Russia. 2 ka-semua Rang Undang ka-dalam Dr Tan Chee Khoon: Mr Speaker, Dewan ini dengan Bahasa Kebangsaan, Sir, is the Honourable Prime Minister ia-itu apakala jentera Kerajaan untok trying to tell this House that May Day membuat kerja ini telah pun di-susun is only celebrated by the communists dengan sempurna. and not by the workers throughout the world? Is the Honourable Prime Minis­ GENERAL ELECTION IN ter aware that May Day is celebrated SARAWAK by workers in the United States. Is he trying to tell us that the United States (People of Sarawak to express feeling workers are also communists? freely) The Prime Minister: The Honourable 4. Tuan Edmund Langgu anak Saga Member must know that the United asks the Prime Minister to state whe­ States is a very big country and can ther the coming general election in afford to do everything they want to; Sarawak is going to afford an opportu­ but we, being a small country pestered nity for the people of Sarawak to by communist subversive activities, express freely their true feeling with cannot afford to do the same thing as regard to Malaysia as required by that done in the United States. Article 1 of the Bangkok Agreement. The Prime Minister: Mr Speaker, Sir, THREAT OF PHYSICAL in the forthcoming election in Sarawak, VIOLENCE TO POLITICAL as is done in all States, the practice is LEADERS OF THE SARAWAK for the candidates and those who cam­ STATE ALLIANCE-INVES­ paign in the elections to express their TIGATION views and opinion as they like, provided 2. Tuan Edmund Langgu anak Saga they stick to the constitutional practice, asks the Prime Minister to state what and provided also they observe the law. steps have been taken to institute a So, in the forthcoming election in Sara­ Commission of Inquiry as suggested wak, the people who take part in the by the leader of the Sarawak State election, in the campaign, and so on, Alliance to investigate the serious can express their views in any way they charges made public by Penghulu Tawi like, exercise their right in any way Sli that the lives of certain political they like; so long as they observe the leaders of the Alliance were being Constitution and the law of the State, threatened with physical violence and they will not be precluded from expres­ what was the justification thereof. sing their views in regard to Malaysia. The Prime Minister: Mr Speaker, Sir, Tuan Edmund Langgu anak Saga; on the 9th September, 1966, informa­ Would the Central Government allow tion was received by the Police that any impartial foreign commission to Alliance Members of the Sarawak ensure that this election is carried out Council Negeri have been intimidated in a real democratic manner? 2531 19 JANUARY 1967 2532

The Prime Minister: I do not think The Prime Minister: Mr Speaker, that we want to hang on to any foreign Sir, we will act jointly with the other mission, any foreign country. We are countries, with the other members of exercising our right and that is none the United Nations who supported the of their business. (Laughter) In the United Nations resolution. same way, they do not ask us to wit­ ness their elections. (Laughter) Dr Tan Chee Khoon: Is the Honour­ able the Prime Minister aware that way Tuan Ong Kee Hui (Sarawak): Mr Speaker, Sir, would the Honourable back in the 1930s, the League of Prime Minister assure this House that Nations then imposed sanctions against anyone campaigning on secession Italy for her aggression on Ethiopia? movement in Sarawak would not be Is the Honourable the Prime Minister locked up? aware that because Italy happens to be a nation of white people and the The Prime Minister: Mr Speaker, Sir, we stick by our words. victims were a people of the black race, the League of Nations then took a MANDATORY SANCTIONS ON half-hearted attitude towards those RHODESIA sanctions, with the result that those 5. Dr Tan Chee Khoon asks the sanctions completely failed? In this Minister of Foreign Affairs if the instance, is the Honourable Prime Malaysian Government will press for Minister aware that, again, the aggres­ mandatory total sanctions on Rhodesia sor in this case belongs to the white by the United Nations, and if not, why race and the victims in this case also not. belong to the black race? As such, in The Prime Minister: Mr Speaker, Sir, the eyes of Afro-Asia, we as an Afro- the United Nations Security Council Asian nation should press more vigo­ had on December 16, 1966, passed a rously for total mandatory sanctions resolution calling for selective manda­ to bring the Ian Smith regime to heel. tory sanctions, including an oil embargo against the illegal regime in Rhodesia. The Prime Minister: I am aware of Malaysia, as a member of the United what happened recently; I haven't been Nations, supported this resolution. Prime Minister since 1930. But, one There is, therefore, no question of thing I can say is that we will do all we Malaysia acting on its own to apply can to bring the Ian Smith regime to any of these sanctions against Rhodesia. their knees. In December, 1965, the Malaysian Government imposed a total embargo TUNJOK PERASAAN ANTI- on Rhodesia, besides other measures JOHNSON PADA MASA PRESI- like exchange control restrictions and DEN AMERIKA SHARIKAT the surcharging of mail from Rhodesia. MELAWAT MALAYSIA This position will be reviewed after the Malaysian Government has re­ 6. Tuan Ahmad bin Arshad bertanya ceived a report on the effectiveness of kapada Menteri Hal Ehwal Dalam the selective mandatory sanction from Negeri: the United Nations Secretary-General (a) sa-lain daripada 200 orang pe- round about the 1st of March, 1967. 2 nunjok perasaan yang melontar Dr Tan Chee Khoon: Mr Speaker, batu dan botol di-Perpustakaan Sir, if this country considers the illegal Amerika Sharikat (USIS), Kuala Ian Smith regime as undemocratic, Lumpur pada pagi lOhb Julai, illegal, against the wishes of the people, then will this Government, at the 1966, dan mengadakan tunjok earliest opportunity in the United perasaan anti-Johnson di-situ sa- Nations, press for mandatory total masa Presiden Amerika Sharikat sanctions against Rhodesia and against melawat ka-negeri ini, terangkan anyone who defies the United Nations dalam berapa buah bandar lagi in the imposition of mandatory total tunjok2 perasaan haram saperti sanctions? itu telah di-adakan; 2533 19 JANUARY 1967 2534

(b) dapat-kah Kementerian beliau Tun Dr Ismail: Tuan Yang di- memberitahu Majlis ini daripada Pertua, kalau saya jawab bagi pehak bangsa apa-kah terdiri-nya pe- Ahli Yang Berhormat daripada Batu nunjok2 perasaan yang meng- tentu-lah saya nanti di-katakan me- ambil bahagian dalam kedua2 langgar atoran dan peratoran, tanya- lah kapada Ahli Yang Berhormat yang kejadian yang tersebut di-atas, ada di-hadapan kita itu (Ketawa). parti siasah mana-kah yang me­ reka anoti dan sama ada orang2 yang bukan warganegara Malay­ ALLEGATION OF INTERFE­ sia ada di-antara mereka; RENCE BY FOREIGNERS IN THE INTERNAL AFFAIRS OF (c) berapa orang-kah yang terbunoh. THE STATE OF SARAWAK Menteri Hal Ehwal Dalam Negeri 7. Tuan Edmund Langgu anak Saga asks the Prime Minister to state what (Tun Dr Ismail): Tuan Yang di-Pertua, steps the Central Government has taken dalam jangka masa antara 28-30hb 2 to investigate the serious allegation by Oktober, 1966 tunjok-perasaan haram Penghulu Tawi Sli that some people telah berlaku di-lapan buah bandar sa- from Singapore or certain foreigners lain daripada Kuala Lumpur. Keba- interfered in the internal affairs of the nyakan daripada penunjok2 perasaan State of Sarawak during the recent itu ia-lah daripada ra'ayat Malaysia. constitutional and political crises in the Daripada hasil penyiasatan atas me­ State. 2 reka yang tertangkap, mereka telah The Prime Minister: There is a mengakui bahawa mereka ada-lah report that foreigners living in Sarawak menjadi ahli Parti Buroh Malaya dan have interfered with our internal ahli Partai Rakyat Malaya. matters and there is also evidence to 2 support this report of interference; and Berkenaan taraf kera'ayatan mereka in one instance a member of a foreign yang terlibat saperti Ahli Yang Ber­ mission had been requested to leave hormat sedia ma'alum, amat-lah sukar the State. We have not obtained con­ untok memastikan sama ada terlibat- crete evidence against those named by nya mereka2 yang bukan warganegara the Chief Minister and, therefore, we dalam penunjok2 perasaan itu. Pehak have not been able to do anything Polis tidak-lah ada bukti2 yang menun- against those people. But I can assure jokkan sa-demikian. this House that as soon as we get any report, and if the report is supported Ha-nya sa-orang sahaja penunjok by strong evidence, we will take imme­ perasaan telah terbunoh dalam per- diate steps to remove these people, tunjokkan perasaan2 yang berlaku. Ini whether they belong to commercial telah berlaku di-Kuala Lumpur pada houses, to foreign missions or expatri­ 30hb Oktober, 1966. ates who are employed in the State service.

Tuan Ahmad bin Arshad: Tuan 2 Yang di-Pertua, soalan tambahan atas SUAMI YANG SENGAJA MENG- jawapan yang telah di-kemukakan oleh ENGKARI PERENTAH MAH- Yang Berhormat Menteri yang ber­ KAMAH MEMBAYAR NAFKAH ISTERI DAN ANAK2 MEREKA kenaan tadi. Saya chuma ingin hendak (PINDAAN UNDANG2 NAFKAH membangkitkan, dapat-kah Kemen­ ISTERI DAN ANAK2, 1950) terian ini membukti dan memberi tahu Dewan ini bahawa tunjok perasaan 8. Tan Sri Fatimah binti Haji Hashim bertanya kapada Menteri Ke'adilan yang kita telah dapat tahu di-buat 2 2 oleh sebab selalu berlaku suami oleh ahli Parti Buroh dan Partai Rak­ sengaja mengengkari perentah2 Mahka- yat itu di-antara yang mengarahkan mah supaya mereka membayar nafkah Parti Buroh itu ada-kah termasok kapada isteri dan anak2 mereka dan Ahli Yang Berhormat daripada Batu? selalu menghilangkan diri, ada-kah (Ketawa). Kerajaan berchadang hendak meminda 2535 19 JANUARY 1967 2536

Undang2 Nafkah Isteri dan Anak2, In addition to what was considered 1950 untok memberi kuasa kapada to be an adequate strong room for the Mahkamah: storage of the opium, a caretaker had (a) mengeluarkan perentah2 kapada been appointed for this particular Cus­ suami2 supaya membayar nafkah toms station in October last year also, anak isteri mereka terus kapada and the normal routine precautions in­ Mahkamah; dan cluded surprise visits by officers of that (b) sa-kira-nya suami2 makan gaji Department. The Police had also in­ dengan Kerajaan atau sharikat2, cluded these premises in their list for maka Mahkamah di-beri kuasa cover by Police on beat duty and on memerentahkan majikan2 memo- security rounds. Despite all these tong elaun2 nafkah itu tiap2 bulan precautions the theft took place. Under dari gaji pekerja2-nya. the circumstances, I have asked the Department of Customs and Excise to Menteri Hal Ehwal Dalam Negeri look again into the whole question of (Tun Dr Ismail bin Daio' Haji Abdul security arrangements to find out Rahman): Tuan Yang di-Pertua, Ke- whether they cannot improve on them menterian Hal Ehwal Dalam Negeri and thus prevent a recurrence of ada mengambil ingatan di-atas soal ini, incidents of this kind. tetapi oleh sebab chadangan yang ada dalam soal ini ada banyak bersangkut Dr Tan Chee Khoon: If what the paut dengan soal pentadbiran dan lain2 Honourable the Minister of Finance hal berkenaan dengan Procedural has been advised is true, how does he Matters, jadi, Kerajaan terpaksa akan reconcile it with what has been stated memungut factor2 dan information2 by Enche' Syed Ahmad Aidit, a former berkenaan dengan perkara ini. Dan Acting Superintendent of Customs, Ke- apabila telah dapat ma'lumat2 ini dah North. He stated: semua, Kerajaan akan menimbangkan "The Alor Star customs strong room has chadangan Ahli Yang Berhormat itu. through the years been a source of tempta­ tion to thieves because of its accessibility ADEQUATE PRECAUTIONS AT and the quantity of exhibits kept in it. My worst fears have been realised and I feel JALAN PENGKALAN KEPAL sorry for my successor". TO PREVENT THEFT 9. Dr Tan Chee Khoon asks the Minis- He went on to say: of Finance if the Customs Department ("It did not come as a suprise". He had, before leaving, advised that the wire mesh at Alor Star had taken adequate pre­ covering the windows of the office be re­ cautions at Jalan Pengkalan Kepal placed by iron bars following several where $400,000 worth of opium and attemps, some successful, to break into the morphine was stored, and if so, why office, but only the windows through which the thieves haven broken, have since been was the whole lot of opium and mor­ removed and replaced by iron bars.") phine stolen on 29th November, 1966 These are, Mr Speaker, Sir, by a for­ The Minister of Finance (Tuan Tan mer Acting Superintendent of Customs, Siew Sin): Mr Speaker, Sir, I am advised that the Customs Department, Kedah North. They seem to be at in consultation with the Public Works variance with what the Minister has Department in Alor Star, did renovate told us this morning. and strengthen the strong room in which Tuan Tan Siew Sin: I do not think the opium in question was stored in the newspaper report referred to by the October last year, more than a month Honourable Member, assuming that before it was broken into. This room the report reflects what the ex-officer in has a concrete ceiling and walls, with question had actually said, is at vari­ an iron door, and is situated within ance with the reply given by me. The another room which also has concrete Honourable Member will note that that walls with an iron door. I am informed report did not state when this parti­ that despite these measures, entry was cular officer left the service whereas at effected by the use of heavy steel cutters the beginning of my reply I made it and other implements on the iron clear that in October last year steps doors. were taken to look into the question of 2537 19 JANUARY 1967 2538 security arrangements again and mea­ institutions in 1966. This included a sures were taken in October last year, sum of $15 million to the Malaysian one month before the theft took place, Industrial Development Finance Limi­ to renovate and strengthen the strong ted. Apart from this loan which was room. free of interest, the remaining loans were charged a rate of interest ranging Dr Tan Chee Khoon: For the infor­ 1/4 mation of the Honourable Minister, from per cent per annum to S\ per assuming that this report is true, he is cent per annum and were made to: reported to have been acting Superin­ 1. Federation of Malaya Govern­ tendent from 1963 to 1965 and he made ment Officers' Co-operative Hou­ these comments after the 19th of sing Society Ltd.; December in London after the robbery 2. Malaysian Armed Forces Co­ had taken place. The further question operating Housing Society Ltd.; that I would like to ask the Honourable 3. Bank Agong Kerjasama Malay­ Minister is this: Why was such a huge sia Berhad; quantity of opium and morphine left in that strong room? Should it not have 4. Malacca Malay Co-operative been either dumped into the sea or Transport Society Ltd.; turned to the Government Medical 5..Telok Gadong Fishermen's Co­ Store for medical use? operative Credit and Marketing Society; Tuan Tan Siew Sin: Mr Speaker, Sir, in fact the Honourable Member by this 6. Sharikat Nelayan Bekerjasama further question has reinforced what I Tanjong Piandang, Parit; said. This officer left the service in 7. Sharikat Kenderaan dan Pe- 1965, whereas this theft took place at ngangkutan Berkerjasama2, Parit; the end of 1966 and in October the 8. Bank Persatuan Sharikat Kam- Department of Customs and Excise did pong Bekerjasama, Seberang Prai. take steps to improve the security arrangements of this particular strong TOTAL COST OF SHARES room. BOUGHT BY GOVERNMENT, In regard to the other point made by 1966 the Honourable Member, I agree that 11. Tuan Haji Abu Bakar bin Hamzah there is some validity in his query and asks the Minister of Finance to state we will in future see to it that quanti­ the total cost of shares bought by ties of that magnitude should not be Government in 1966, both from sources left in the strong room for too long but inside and outside the country and to should either be taken away or des­ state the sources. troyed. Tuan Tan Siew Sin: Mr Speaker, Sir, the total cost of shares bought by the LOANS BY GOVERNMENT TO Government in 1966 amounted to $41 PRIVATE CONCERNS, 1966 million and this sum was paid out of 10. Tuan Haji Abu Bakar bin Hamzah the Development Fund.. The shares in asks the Minister of Finance to state question were those of the National the total sum of money given on loan Electricity Board amounting to $40 by Government to private concerns in million and the Malaysian Industrial 1966, the name of the concerns and Development Finance Limited amoun­ whether any interest was charged on ting to $1 million. the loans made. Tuan Tan Siew Sin: Mr Speaker, Sir, AMOUNT OF TAXES COLLEC­ I assume that what the Honourable TED IN 1966 Member means by "private concerns" 12. Tuan Haji Abu Bakar bin Hamzah are statutory bodies and co-operative asks the Minister of Finance to state societies because the Government does the amount of tax collected, in 1966 in not normally invest in other private each of the States in West Malaysia, concerns. The Central Government giving the figures separately for Rates lent a total sum of $31,879,350 to such and Assessments. 2539 19 JANUARY 1967 2540

Tuan Tan Siew Sin: The question is juga layak boleh memandu dan ada ke- rather vague, but I take it that the benaran-nya. Apabila bas sewa khas Honourable Member is only referring ini membuat perjalanan yang jauh, to Federal taxes for which the Federal pemandu dan conductor-nya yang tahu Government is responsible. In regard memandu itu akan berganti2 memandu to State taxes, the question should be dari satu masa ka-satu masa. Oleh addressed to the respective State yang demikian pemandu bas sewa khas Governments. tidak-lah memandu lebeh daripada 8 2 Since the Federal accounts for 1966 jam pada tiap hari. have not yet been finalised, I can only SIXTH FORM ENTRANCE give estimates of total Federal revenue EXAMINATION—ALLEGED collected for the year in West Malaysia FAVOURITISM OF NATIONAL in the form of taxes. The details are to be found in the Treasury Memorandum GROUP on the Revenue Estimates 1967, which 14. Dr Tan Chee Khoon [Under S.O. will be distributed during the course 24 (2)] ask the Minister of Education of my Budget Speech this afternoon, if he is aware of favouritism of the and which I hope the Honourable National Group in the conduct of Sixth Member will study, as this Paper gives Form Entrance Examinations this year, as much information as is possible. and that the results have disappointed While it may be possible with an in­ many parents who expected their ordinate amount of research and time children to get through, and if so, to give figures of Federal revenue col­ whether he would clarify the position. lected in each of the States of West Malaysia in respect of road transport The Minister of Education (Tuan fees and licences and minor items of Mohamed Khir Johari): Mr Speaker, revenue, it is just not possible to do Sir, there has been no favouritism so in respect of customs and excise shown towards any particular group duties, income tax, payroll tax and in the Sixth Form Entrance Examina­ turnover tax since the collection and tion. The results of all candidates are accounting of this revenue is not done based on the aggregate obtained in the on a State basis. three subjects presented by the candi­ dates for the examination either in Arts 13. Tan Sri Fatimah binti Haji Hashim bertanya kapada Menteri Pengangku- or Science. In the examination, there tan, memandang kapada bertambah-nya is an English Language paper, sub­ bilangan kemalangan yang berlaku ka­ sequently called "Special English pada bas2 rombongan, ada-kah dia Paper", in which all candidates must akan mengadakan undang2 melarang pass before their aggregate in the three pemandu2 bas chatar bekerja lebeh subjects offered can be considered. In daripada lapan jam sa-hari. this respect, a slightly lower level of Menteri Pengangkutan (Tan Sri Haji pass in the Special English paper is Sardon bin Haji Jubir): Tuan Yang di- recommmended for those pupils who Pertua, sa-saorang pekerja di-sharikat2 have come through the Remove Classes. bas jalan raya, bekerja hanya sa-lama This consideration applies to all pupils. 6 hari dalam sa-minggu ia-itu 8 jam All these candidates will only be con­ dalam sa-hari dan tidak lebeh daripada firmed in their places, if they obtain 48 jam dalam sa-minggu. Jika ia sang- satisfactory results in the School Certi­ gup bekerja lebeh daripada masa yang 2 ficate or the Malaysia Certificate tersebut ia di-beri gaji sa-rendah -nya Examination. Those who could not get tidak kurang daripada separoh dari­ through the Sixth Form Entrance pada gaji-nya yang biasa di-kira dari satu jam ka-satu jam. Examination may also be admitted to the Sixth Form Art or Science, if they Berkenaan dengan bas yang di-sewa obtained very good results in their khas atau chartered, ada-lah menjadi kebiasaan dan, mengikut Sharikat2 bas School Certificate or Malaysia Certi­ telah di-jalankan mengadakan sa-orang ficate of Education which will be pemandu dan sa-orang conductor yang known in early March. 2541 19 JANUARY 1967 2542 Dr Taa Chee Khoon: Mr Speaker, until March to be admitted to Form Sir, is the Honourable Minister of VI. There is always a remedy in that Education aware that there have been if the results in the Cambridge or the lots of cases where students, who passed M.C.E., of any particular students are in the Entrance Examination held in good then he will be admitted to the July and have been given places in Sixth Form in March. January this year, have very often Dr Lim Chong Eu: Mr Speaker, Sir, either failed the Senior Cambridge arising out of the reply by the Minister, Examination, or passed so badly that will the Honourable Minister inform they just could not warrant retention this House whether his Ministry will of their places in the Lower Sixth—and consider this whole question of the timing of the Examinations; whether this has happened in both the Arts and the Entrance Examination is redundant the Science streams. Conversely, is the or not, whether the Cambridge Honourable Minister of Education Examination results are more impor­ also aware that there are a large tant, or the Malayan Certificate number of students, who have failed Examination results are more impor­ their Entrance Examination but sub­ tant: in view of the present imbalance sequently have passed very well in the between the results of the Entrance Senior Cambridge Examination held Examination and the results of the in December, with the result that, in Cambridge Examination which causes fairness to the Education Department, considerable administrative delay. they have found places for such people Virtually students, who are admitted who have done very well, who by their into the Sixth Form do no work in the first term, and in fact their admis­ school records have done very well but sion in the first term is no guarantee for some unaccountable reasons have that the students will remain after the failed in the Entrance Examination? Is first term, if their results are bad, and, the Honourable Minister aware that in the meantime those students who these two facts that I have stated, and are waiting for the Cambridge results the Honourable Minister have given doing nothing and trying their very best me facts and figures, of these two to get into other schools, eventually find instances, have given rise to this that they have got admission on the allegation that there has been favouri­ results of the Cambridge Examination. tism towards a particular group. Can So, in view of this, will the Honourable the Honourable Minister please elabo­ Minister assure this house that due rate? consideration will be given—after all they have had nearly six years experi­ ence and each year the same problem Tuan Mohamed Khir Johari: Sir, the arises? results of any examination must Tuan Mohamed Khir Johari: Sir, necessarily depend on the performance I have given quite a lot of thought to of any student on that particular day this factor, and in fact at one time of the examination. So, what the I seriously considered the abolition of Honourable Member has stated has this Entrance Examination. However, actually happened: there are cases subsequently I had discussions with the where the students who failed in the Examination Syndicate of Cambridge Entrance Examination but did very and I tried to impress upon them to well subsequently in the Cambridge get the results out earlier but they Examination, and there are some who replied to us that that was not possible. passed the Entrance Examination but However, I can assure the Honourable later on did not get such good results Member and this House that this matter will receive further thinking from me in the Cambridge Examination. So, we and if it is the wish of the parents that got to have the Examination in order they would wait for three months to admit the children to schools, so before their children go into the Sixth that they could continue with the Form, I will gladly comply with their education instead of having to wait wish. 2543 19 JANUARY 1967 2544 Dr Tan Chee Khoon: Will the Cambridge Examination, would it not Honourable Minister, since he is so seem to the Honourable Minister that amenable to suggestions from us on this preparation in the Entrance this side of the house, consider holding Examination to allow of a lower these School Certificate Examinations standard of English in the Entrance Examination—I am not bothered about plus the H.S.C. Examinations a little the question of the National group ealier—let us say not in mind Novem­ which interests the Member for Batu— ber as is the practice now, but in mid- will not affect the administrative details, October. In this case, if the Cambridge because what happens is that the Authorities and the Local Examiners Cambridge results require a higher were to hurry up a bit, they possibly standard of pass in English, and in could give us the results in mid- actual fact our national effort, is to January. Is the Honourable Minister insist that there should be a higher also aware that this question of holding standard in the National Language. It earlier examinations for both the Senior is because of this conflict that we have Cambridge and H.S.C. level also affects these difficulties at the present time. the University, because in the case of Tuan Mohamed Khir Johari: Sir, the University, chaps have been given when I said "Cambridge Examination scholarships before the H.S.C. results results" I also included the Malaysia are known, and then it is most embaras- Certificate Examination, because both sing on the part of the Federal Govern­ papers are at present marked by the ment, or the State Government, to find Cambridge Examinations Syndicate. that these chaps who have been given Tuan Haji Abu Bakar bin Hamzah scholarships have failed their examina­ (Bachok): Tuan Yang di-Pertua, soalan tions? tambahan. Ada-kah dengan sebab Kementerian Pelajaran berpegang Tuan Mohamed Khir Johari: Sir, I dengan hakikat bahawa memasoki will give consideration to this, but I Tingkatan Enam itu mesti-lah di- must say that as a matter of fact dasarkan pepereksaan ujian masok itu examination results have never pleased di-atas Cambridge? Ada-kah kerana itu everybody. maka Form Six, atau Tingkatan Enam telah di-tegah daripada di-buka di- Dr Lim Chong Eu: Sir, arising out Sekolah Izzudin Shah di-Ipoh. of the original reply by the Honour­ able Minister, I would like to ask the Tuan Yang di-Pertua, untok me- Honourable Minister whether confir­ mudahkan Yang Berhormat Menteri mation of the results of the Entrance kita menerangkan kapada saya Sekolah Examination are based upon the results Izzudin Shah di-Ipoh ini, bukan sekolah kerajaan, tetapi dia merupakan Centre of the Cambridge Examination or upon bagi pelajaran menengah, sa-hingga the Malaysia Certificate Examination keputusan dalam pepereksaan LCE or upon both? dengan FMC, saya rasa menandingi Tuan Mohamed Khir Johari: The sekolah Alam Shah. Pada tahun ini final results as to whether the students tujoh puloh orang masok, enam puloh dapat Grade A, empat yang dapat will stay on in Form VI classes or Grade lain. Jadi di-pehak sekolah itu not will depend on the Cambridge tidak tahu mengapa Pejabat Pelajaran Examination results. di-Perak menyampaikan perentah dari­ Dr Lim Chong Eu: In view of that, pada Kementerian Pelajaran, tidak boleh di-buka Form Six di-situ. Jadi, and in view of the fact that it is possible saya hendak tanya, ada-kah dengan for a student to get a pass and qualify sebab jawapan Yang Berhormat for the Malaysia Certificate Examina­ Menteri tadi mengatakan bahawa tion, which is our national certificate ujian masok Form Six itu mesti di- examination, by passing the National dasarkan di-atas Cambridge, maka di- Language but failing in English and, sekolah itu, Malay Medium maka therefore, not qualifying to get the tidak di-benarkan di-buka? 2545 19 JANUARY 1967 2546 Tuan Mohamed Khir Johari: Tuan Malaysia, pelajaran ada-lah urusan Yang di-Pertua, sa-belum sa-buah Persekutuan. Akan tetapi Cheraian 17 sekolah itu di-benarkan mengadakan (A) dalam penyata Jawatan-kuasa Tingkatan Enam, pehak Kementerian antara Kerajaan tahun 1962 ada mene- mesti-lah berpuas hati bahawa segala tapkan bahawa sistem yang ada seka­ kelengkapan, segala guru2 yang mahir rang, serta dasar pentadbiran Pelajaran untok mengajar dalam kelas2 Ting­ di-Malaysia Timor hendak-lah tetap di- katan Enam itu di-sekolah itu, ada di- bawah jagaan Kerajaan Negeri Sabah sekolah itu. Jadi apabila kita puas hati dan Sarawak sa-lama 10 tahun dari maka pehak Kementerian memberi hari Malaysia. Kechuali jika Kerajaan kelulusan kapada sekolah itu tidak kira di-negeri2 itu sendiri bersetuju mengu- sekolah yang di-bantu oleh Kerajaan bah-nya pada tarikh yang lebeh awal: atau pun sekolah private. Untok penge- (b) untok menchapai matlamat penya- tahuan Ahli Yang Berhormat, di-Kuala tuan Kementerian Pelajaran dengan Lumpur ini ada sa-buah sekolah persetujuan Kerajaan negeri, telah private yang kita telah memberi menghantar dua orang pegawai kanan kebenaran untok mengadakan Ting­ ka-Sabah dan Sarawak untok membuat katan Enam dengan sebab kita ber­ kajian teliti berkenaan dasar dan sistem puas hati ada guru2 dan kelengkapan pelajaran di-kedua2 buah negeri itu. yang chukup. Sa-lain daripada ini, Kementerian telah Tuan Haji Abu Bakar bin Hamzah: meminjamkan dua orang pegawai Tuan Yang di-Pertua, tidak-kah ini kanan daripada Kementerian untok menjadi Pengarah Pelajaran bagi bererti bahawa pehak Kementerian 2 belum berpuas hati dengan sekolah kedua buah negeri Sabah dan Sarawak. Izzudin Shah itu. (Ketawa). Keputusan untok menyamakan dasar pelajaran Sabah dengan dasar pelajaran Tuan Mohamed Khir Johari: Ya Kerajaan Pusat pada satu tarikh yang (Ketawa). lebeh awal hendak-lah datang-nya dari Kerajaan negeri itu dahulu. DASAR PELAJARAN NEGERI SABAH DI-SAMAKAN DENGAN DASAR PELAJARAN KERA­ MENGHAPUSKAN PEPEREKSAAN JAAN PUSAT PADA TARIKH 'AM MASOK KA-SEKOLAH YANG LEBEH AWAL RENDAH DI-SARAWAK 15. Pengiran Tahir Petra: bertanya 16. Penghulu Jinggut Anak Atan: ber­ kapada Menteri Pelajaran: tanya kapada Menteri Pelajaran boleh- (a) ada-kah Kerajaan akan memberi kah Kerajaan memberi timbangan timbangan supaya dasar pelajaran menghapuskan Pepereksaan 'Am negeri Sabah di-samakan dengan masok ka-Sekolah Rendah di-Sarawak dasar pelajaran Kerajaan Pusat untok menyamakan peratoran dengan pada tarikh yang lebeh awal negeri2 yang lain-nya dalam Malaysia lagi daripada yang terbentang dan dengan chara bagini membuka dalam Perlembagaan, ia-itu, sa- peluang kapada semua penuntut, ke- puloh tahun sa-lepas Sabah men- banyakan-nya datang daripada keluarga chapai Kemerdekaan-nya mene- miskin, dapat meneruskan pelajaran rusi Malaysia, di-sebabkan dasar mereka ka-sekolah2 menengah. pelajaran sekarang ini ada-lah saperti dasar pelajaran penjajah Tuan Mohamed Khir Johari: Tuan Speaker, saperti mana yang di-ketahui dahulu; 2 (b) Jika ya, apa-kah langkah2 yang oleh Ahli Yang Berhormat ia-itu perlu di-ambil oleh kedua2 Kera­ mengikuti 17 (A) Penyata Jawatan- jaan Pusat dan Kerajaan Negeri kuasa antara Kerajaan berkenaan supaya penyamaan dasar ini dengan Malaysia tahun 1962, dasar dan dapat di-usahakan. susunan pentadbiran pelajaran yang ada sekarang di-Sarawak ada-lah terus Tuan Mohamed Khir Johari: Tuan di-kawal oleh Kerajaan Negeri Sarawak Speaker, jawapan kapada soalan (a): hingga di-persetujukan lain daripada sa-bagaimana Ahli Yang Berhormat itu nanti. Dengan hal yang demikian sedia ma'alum menurut Perlembagaan perkara yang di-kemukakan oleh Ahli 2547 19 JANUARY 1967 2548

Yang Berhormat itu mesti-lah di- Dr Lim Swee Aun: Mr Speaker, Sir, timbangkan terlebeh dahulu oleh in accordance with the undertaking Kerajaan Negeri Sarawak. given by Gammons (Malaya) Limited in respect of the Shaw Road low-cost PRICE CONTROL OF IMPORTED housing project, as stated in the reply RICE IN SARAWAK of the Honourable Minister of Local 17. Tuan Penghulu Jinggut anak Attan Government and Housing to the Oral asks the Minister of Commerce and Questions at the last session of this Industry whether he is aware of the House, remedial works are now being rising cost of imported rice in Sarawak taken by the firm and the brief details which has caused undue hardship to are as follows: the poor people, if so, whether he will find ways and means to control the (a) The load carrying capacity of the price. Gamco pile has been reviewed and its core section is now The Minister of Commerce and regarded not to carry any load, Industry (Dr Lim Swee Aun): Mr i.e. the outer spun section is to Speaker, Sir, in the latter part of 1966, take all the loading. This, there­ when the Government of Thailand fore, means that additional piles announced a temporary ban on the must be driven to carry the export of Thai rice, the world market necessary loading to support the price of Thai rice increased rapidly. building. Previously the pile was Rice dealers in Malaysia, in anticipa­ designed to carry 50 tons but now, tion of this shortage of imported rice, in view of the additional piles, also increased the retail price of rice. the design has been revised to There is, however, no shortage of carry a load of 35 tons. All this local rice in Malaysia because of the is being done in accordance with existence of Government Rice Stock­ the requirements of the Structural pile. To counter the rising trend in the Engineer of the Federal Capital. price of rice in this country, the Govern­ (6) For building Block "A", 124 ment released Stockpile rice at the usual price of $27.25 a picul to the private additional piles are being driven. sector through the wholesalers, and The footings have been re­ even through the dealers, to sell to the designed as a strip footing. consumers at not more than $29.00 a (c)For building Block "B", 233 picul or $1.70 a gantang. additional piles are being driven. In addition to this, in Sarawak, 300 Simi'arly the footings have been bags of rice was released by the redesigned as a strip footing. Ministry to the District Officer of Field tests had indicated that Baram, 300 bags to the Armed Forces, more piles are required for this and 20 bags to the Miri Relief block. Committee at the price of $27.25 a (d) In Block "B", where the piles picul were driven short of 30 feet, further boring has been carried GOVERNMENT ACTION TO out to check the subterranean ENSURE SAFE OCCUPATION soil condition to ensure that the OF THE SHAW ROAD LOW- piles have been driven to hard COST HOUSING PROJECT AND stratum. OTHER HOUSING SCHEMES (e) Pile loading tests are being carried 18. Tuan C.V. Devan Nair (Bungsar) out on the driven piles to test asks the Minister for Local Govern­ their load resisting capacities. At ment and Housing to make a statement least two tests are being carried as to what action has been taken to out at each block. One load test ensure that the Shaw Road low-cost was completed on the 30th housing project and other housing December, 1966 for Block "B" schemes are safe for occupation follow­ and the pile was found to be ing the short piling scandal last year. satisfactory. 2549 19 JANUARY 1967 2550 (f) Gammon has given the under­ the piling site and, if necessary, he will taking to guarantee that the pile pull out any pile to prove that there foundations, when completed, will was short piling. However, the work be satisfactory in all respects and that is being done now has been that Gammon will indemnify the reviewed by the Structural Engineer, Commissioner against any sub­ and instead of calculating the Gammon sequent damages to the buildings resulting from any failure or pile each to carry 50 tons, they have defects of the pile foundations revised it to work out at only 35 tons. constructed by them. Hence, additional piling has to be done, and, even after additional piling has (g) All the above mentioned work been done, there is test weight bearing, will be undertaken by Gammon free of charge to the Commis­ and they have found that with this load sioner. bearing it has been satisfactory. I am glad that the Honourable Member has The Commissioner of the Federal drawn the attention to the new clerk Capital is satisfied that the remedial works will ensure that the super­ of works, and I will certainly inform structure will be safe for occupation. the Commissioner of the Municipality The Minister for Local Government to keep an eye on this one again. If the and Housing is not aware of any other Honourable Member has any more short piling in other low-cost housing information of this sort, would he come schemes. to the Ministry early, and not wait for Dr Tan Chee Khoon: Mr Speaker, the session of this House to inform us? Sir, is the Honourable the Minister With regard to the question of telling us now that Gammons have indemnity, I shall look into the matter. decided on this new method of driving more piles in, rather than as we were told last time by the substantive Minis­ MENGAMBIL PEKERJA2 MENE- ter for Local Government and Housing RUSI PUSAT PEKERJAAN that they would pull up all the piles to find out whether there was any short 19. Datin Fatimah binti Haji Abdul piling. Mr Speaker, Sir, is the Honour­ Majid bertanya kapada Menteri Buroh able Minister aware that there has been ada-kah beliau sedar bahawa sa- talk in town that the new clerk of works tengah2 majikan di-negeri ini tidak down there is not what he purports mengambil pekerja2 mereka menerusi to be—in other words he is not as Pusat Pekerjaan, dan jika sedar, experienced as he should be. Will he terangkan apa-kah langkah2 yang akan investigate this, because it was, amongst di-ambil supaya mereka berbuat demi- other things, the shortcoming of the previous c!erk of works that caused this kian. fiasco? Furthermore Mr Speaker, Sir, will the Honourable Minister tell this Tuan Lee San Choon (Setia-usaha Parlimen kapada Menteri Buroh): Saya House—he told us just now that 2 Gammons would indemnify the tahu ada majikan dalam bahagian Municipality for any damage to the private yang tidak mengambil pekerja2 building—whether he will get an melalui perkhidmatan Pusat Pekerjaan undertaking from Gammons that should atau Employment Exchange. Kemen- the building collapse, they would not terian saya menjalankan kempen yang only indemnify the Municipality but luas untok menyedarkan majikan2 ten- also indemnify anyone who has been tang perkhidmatan yang di-sedia oleh killed should the building collapse in Pusat Pekerjaan dan juga bagi menarek further? mereka mengambil lebeh banyak lagi pekerja daripada Pusat Pekerjaan. Dr Lim Swee Aun: Mr Speaker, Sir, 2 as far as I remember, at the last session Pegawai saya juga sentiasa mengada- of this House, the Minister for Local kan lawatan ka-tempat2. pekerjaan Government and Housing said that dengan tujuan meluaskan lagi meng- there would be remedial work done at gunakan Pusat Pekerjaan. 2551 19 JANUARY 1967 2552

Hingga sekarang lebeh banyak maji- Tuan C. V. Devan Nair: Sir, are we kan yang telah sedar akan kebaikan to assume that the Government has not Pusat Pekerjaan dan kita telah dapat even thought of this question of the 2 menempatkan lebeh banyak pekerja renewal of the contract? As Members di-dalam pekerjaan. Di-dalam tahun of this House, Sir, we are entitled to 1966, 925 majikan baharu mengguna- an answer. kan Pusat Pekerjaan bagi pertama kali. Angka ini mungkin bertambah. The Prime Minister: Sir, I might be able to answer the question put by the RETENTION OF THE Honourable Member just now. This is INDUSTRIAL ARBITRATION a matter for the Government and, as TRIBUNAL my colleague has replied, at the appro­ 20. Tuan C. V. Devan Nair asks the priate time the Government will give Minister of Labour whether, having a reply. Government appreciates the regard to the excellent work done by good work that has been done by the the Industrial Arbitration Tribunal, it present holder and, if there is work to is the intention of the Government to: be done in that field, we hope that he (i) renew the contract of the Presi­ dent of the Industrial Arbitration would be happy to accept renewal. But Tribunal on its expiry; and if there is no work in that field, there (ii) to retain the Industrial Arbitra­ is always other work for a person of tion Tribunal, with suitable modi­ his calibre. fications, as one of the permanent features of the industrial relations system in the country. EXEMPTED BUSINESS Tuan Lee San Choon: Mr Speaker, Sir, the question of the renewal of the (MOTION) contract of the President of the Indus­ The Deputy Prime Minister (Tun Haji trial Arbitration Tribunal will be con­ Abdul Razak): Tuan Yang di-Pertua, sidered at the appropriate time. His present contract is due to expire in saya menchadangkan: June this year. As to the question of Sunggoh pun telah ada sharat2 Peratoran whether the Industrial Arbitration Tri­ Meshuarat 12 (1) ia-itu persidangan Majlis bunal would be retained in its present hari ini akan di-tempohkan pada pukul 12 or modified form, I am not really able tengah hari dan di-sambong sa-mula pada to make any statement on this at this pukul 2.30 petang dan dari masa itu meshua­ rat akan di-teruskan hingga usul bagi stage as we are now reviewing the pre­ bachaan kali yang kedua Rang Undang2 sent industrial relations system. A Perbekalan tahun 1967 telah di-chadang dan positive answer to this question must di-sokong dan pada waktu itu Majlis ini await the completion of the review. akan di-tanggohkan. Tuan C. V. Devan Nair: Sir, the Honourable Minister has not really The Minister of Home Affairs (Tun answered my question as to whether Dr Ismail): Tuan Yang di-Pertua, saya or not it is the Government's intention sokong. to renew the contract of the President of the Industrial Arbitration Tribunal Question put, and agreed to. on its expiry. We still have not got the Resolved. answer to the question as to what the Government intentions are—or are we Sunggoh pun telah ada sharat2 Peratoran Meshuarat 12 (1) persidangan Majlis hari ini to assume that the Government does akan di-tempohkan pada pukul 12 tengah not have any intentions? hari ini dan di-sambong sa-mula pada pukul 2.30 petang dan dari masa itu meshuarat Tuan Lee San Choon: Sir, as I said, akan di-teruskan hingga usul bagi bachaan his contract expires in June this year kali yang kedua Rang Undang2 Perbekalan and the question of renewal will be tahun 1967 telah di-chadang dan di-sokong announced at the appropriate time. It dan pada waktu itu nanti Majlis pun di- is still too early to announce this. tanggohkan bagi di-persetujukan. 2553 19 JANUARY 1967 2554 BILLS PRESENTED THE TERRITORIAL ARMY (AMENDMENT) BILL THE MILITARY FORCES Bill to amend the Territorial Army (AMENDMENT) BILL Ordinance, 1958; presented by the Par­ Bill to amend the Military Forces liamentary Secretary to the Deputy Ordinance, 1952; presented by the Prime Minister; read the first time; to Parliamentary Secretary to the Deputy be read a second time at a subsequent Prime Minister; read the first time; to sitting of this House. be read a second time at a subsequent sitting of this House. THE INTERPRETATION BILL THE NAVY (AMENDMENT) Bill to make provision for the inter­ BILL pretation of certain written laws, for shortening the language used therein, Bill to amend the Navy Ordinance, 1958; presented by the Parliamentary for matters relating to written laws Secretary to the Deputy Prime Minis­ generally and for other like purposes; ter; read the first time; to be read a presented by the Minister of Home second time at a subsequent sitting of Affairs and Minister of Justice; read this House. the first time; to be read a second time at a subsequent sitting of this House. THE MALAY REGIMENT (AMENDMENT) BILL THE CONTRACTS (MALAY Bill to amend the Malay Regiment STATES) (AMENDMENT) BILL Enactment (F.M.S. Cap. 42); presented Bill to amend the Contracts (Malay by the Parliamentary Secretary to the States) Ordinance, 1950; presented by Deputy Prime Minister; read the first time; to be read a second time at a the Minister of Home Affairs and subsequent sitting of this House. Minister of Justice; read the first time; to be read a second time at a sub­ sequent sitting of this House. THE AIR FORCE (AMEND­ MENT) BILL Bill to amend the Air Force Ordinance, THE SUPPLEMENTARY SUPPLY 1958; presented by the Parliamentary (1966) BILL Secretary to the Deputy Prime Minis­ Bill to apply sums out of the Consoli­ ter; read the first time; to be read a dated Fund for additional expenditure second time at a subsequent sitting of for the service of the year 1966 and to this House. appropriate such sums for certain pur­ poses; presented by the Parliamentary THE AIR FORCE VOLUNTEER Secretary to the Minister of Finance; RESERVE (AMENDMENT) BILL read the first time; to be read a second Bill to amend the Air Force Volunteer time at a subsequent sitting of this Reserve Ordinance, 1958; presented by House. the Parliamentary Secretary to the De­ puty Prime Minister; read the first time; to be read a second time at a THE SUPPLY BILL, 1967 subsequent sitting of this House. Bill to supply a sum out of the Consoli­ dated Fund to the service of the year THE NAVAL VOLUNTEER 1967 and to appropriate that sum and RESERVE (AMENDMENT) BILL such other sums as have been autho­ Bill to amend the Naval Volunteer rised to be issued for the service of Reserve Ordinance, 1958; presented by that year; presented by the Parliamen­ the Parliamentary Secretary to the tary Secretary to the Minister of Deputy Prime Minister; read the first Finance; read the first time; to be read time; to be read a second time at a a second time at 2.30 p.m. on 19th subsequent sitting of this House. January, 1967. 2555 19 JANUARY 1967 2556 THE RACING CLUB (PUBLIC MOTIONS SWEEPTAKES) (AMENDMENT) BILL PERSIDANGAN MESHUARAT Bill to amend the Racing Club (Public (USUL) Sweeptakes) Act, 1965 and to provide The Deputy Prime Minister (Tun for matters consequential thereupon; Haji Abdul Razak): Tuan Yang di- presented by the Parliamentary Secre­ Pertua, saya mohon menchadangkan: tary to the Minister of Finance; read Bahawa menurut sharat2 dalam pe- the first time; to be read a second time renggan (1) dalam Peratoran Meshua­ at a subsequent sitting of this House. rat 12, Majlis ini memerentahkan ia-itu dalam meshuarat sekarang ini, sharat2 THE ROAD TRAFFIC (AMEND­ (a) perenggan kechil (a) dalam pe- MENT) BILL renggan (1) dalam Peratoran Meshuarat 12, hendak-lah di- Bill to amend the Road Traffic Ordi­ 2 2 nance, 1958; presented by the Minister fahamkan sa-olah perkataan "atau Khamis" itu di-gantikan of Transport; read the first time; to be 2 read a second time at a subsequent dengan perkataan "Khamis atau sitting of this House. Sabtu"; (b) perenggan (3) dalam Peratoran Meshuarat 12, hendak-lah di- THE FISHERIES (AMENDMENT) 2 BILL fahamkan sa-olah perkataan "hari Juma'at" itu di-gantikan Bill to amend the Fisheries Act, 1963; dengan perkataan "hari Sabtu". presented by the Minister of Agricul­ ture and Co-operatives; read the first Tuan Yang di-Pertua, menurut ato- time; to be read a second time at a ran Majlis Meshuarat ini, Persidangan subsequent sitting of this House. Dewan ini tidak-lah di-adakan pada hari Sabtu. Tujuan Usui ini ia-lah supaya membolehkan Persidangan THE FARMERS' ASSOCIATION 2 BILL Majlis pada kali ini bermeshuarat pada hari Sabtu. Saperti Ahli2 Yang Bill to provide for the registration of Berhormat mengetahui, Meshuarat Area, State and Federal Farmers' Asso­ Belanjawan tahun ini yang di-mulakan ciations, the control and supervision pada hari ini ada-lah di-jadualkan of such associations and for matters tamat pada 4hb Mach. Akan tetapi connected therewith; presented by the pada 9hb Februari ada-lah Hari Raya Minister of Agriculture and Co-opera­ Tahun Bahru China, dan untok mem­ tives; read the first time; to be read a bolehkan Ahli2 Dewan ini, terutama second time at a subsequent sitting of 2 this House. sa-kali Ahli Dewan daripada keturu- nan China supaya dapat merayakan hari ini dengan sempurna, dengan THE FEDERAL AGRICULTURAL meriah-nya, saya akan menchadangkan, MARKETING AUTHORITY apabila tiba masa-nya kelak, supaya (AMENDMENT) BILL Meshuarat Dewan ini di-tanggohkan Bill to amend the Federal Agricultural dalam masa perayaan itu sa-lama sa- Marketing Authority Act, 1965; presen­ minggu. Dan bagitu juga, Tuan Yang ted by the Minister of Agriculture and di-Pertua, supaya membolehkan Ahli2 Co-operatives; read the first time; to be daripada Malaysia Timor balek ka- read a second time at a subsequent tempat masing2 sebab persidangan ini sitting of this House. ada-lah lama—memakan masa satu bulan sa-tengah. Oleh kerana penang- THE ABORIGINAL PEOPLES gohan itu telah di-chadangkan dan juga (AMENDMENT) BILL memandangkan kapada urusan2 yang Bill to amend the Aboriginal Peoples banyak di-hadapi oleh Majlis ini, maka Ordinance, 1954; presented by the terpaksa-lah kita mengadakan meshua­ Minister of Lands and Mines; read the rat pada hari Sabtu. Akan tetapi saya first time; to be read a second time at chadangkan bagi permulaan ini me­ a subsequent sitting of this House. shuarat pada hari Sabtu itu di-adakan 2557 19 JANUARY 1967 2558 sa-hingga pukul satu petang sahaja dan plastic advertising materials under one kemudian kalau di-fikirkan mustahak, code rather than two sub-codes. The boleh-lah di-adakan meshuarat pada present order seeks to do the same. sa-beiah petang. Sir, I beg to move. Tuan Yang di-Pertua, saya dengan Tuan Chen Wing Sum: Sir, I beg to sukachita mengemukakan usul ini. second the motion. The Minister of Home Affairs (Tun Question put, and agreed to. Dr Ismail): Tuan Yang di-Pertua, saya Resolved, menyokong. That this House resolves that in accor> Question put, and agreed to. dance with the power vested in it by virtue of sub-section (3) of section 8 of the Sabah Resolved, Customs Ordinance (Cap. 33), the Customs Bahawa menurut sharat2 dalam pe- Duties (Sabah) (Amendment) (No. 5) Order, 1966, which has been laid before the House renggan (1) dalam Peratoran Meshua­ as Statute Paper No. 89 of 1966 be con­ rat 12, Majlis ini memerentahkan firmed. ia-itu dalam meshuarat sekarang ini, sharat2— THE SARAWAK CUSTOMS (a) perenggan kechil (a) dalam pe- ORDINANCE (CAP. 26)— renggan (1) dalam Peratoran THE CUSTOMS (IMPORT AND Meshuarat 12, hendak-lah di- EXPORT) (AMENDMENTS) (No. 4) fahamkan sa-olah2 perkataan2 ORDER, 1966 "atau Khamis" itu di-gantikan Tuan Ali bin Haji Ahmad: Mr dengan perkataan2 "Khamis atau Speaker, Sir, I beg to move that this Sabtu"; House resolves that in accordance with (b) perenggan (3) dalam Peratoran the powers vested in it by virtue of sub­ Meshuarat 12, hendak-lah di- section (3) of section 8 of the Sarawak fahamkan sa-olah2 perkataan Customs Ordinance (Cap. 26), the "hari Juma'at" itu di-gantikan Customs (Import and Export) Duties dengan perkataan "hari Sabtu". (Amendment) (No. 4) Order, 1966 which has been laid before the House THE SABAH CUSTOMS ORDI­ as Statute Paper No. 90 of 1966 be NANCE (CAP. 3)—THE CUSTOMS confirmed. DUTIES (SABAH) (AMENDMENT) This Order is the same as the Cus­ (No. 5) ORDER, 1966 toms Duties No. 5 of 1966 which has The Parliamentary Secretary to the just been confirmed by this House Minister for Finance (Tuan Ali bin Haji except that it applies to Sarawak. Ahmad): Mr Speaker, Sir, I beg to Mr Speaker, Sir, I beg to move. move, that this House resolves that in accordance with the powers vested Tuan Chen Wing Sum: Sir, I beg to in it by virtue of sub-section (3) of second the motion. section 8 of the Sabah Customs Ordi­ Question put, and agreed to. nance (Cap. 33), the Customs Duties (Sabah) (Amendment) (No. 5) Order, Resolved. 1966 which has been laid before the That this House resolves that in accor­ dance with the powers vested in it by virtue House as Statute Paper No. 89 of 1966 of sub-section (3) of section 8 of the Sarawak be confirmed. Customs Ordinance (Cap. 26), the Customs (Import and Export) Duties (Amendment) Mr Speaker, Sir, it was the practice (No. 4) Order, 1966, which has been laid in the past to differentiate between before the House as Statute Paper No. 90 plastics advertising materials for publi­ be confirmed. shing domestically manufactured goods as those for publishing imported goods. THE CUSTOMS ORDINANCE, This distinction is now not practicable 1952—THE CUSTOMS DUTIES as our own fabricators of plastic goods (AMENDMENT) (No. 7) ORDER, can supply a very comprehensive range 1966 of advertising materials. The tariff Tuan Ali bin Haji Ahmad: Mr classification has accordingly been Speaker, Sir, I beg to move that this amended in West Malaysia to show House resolves that in accordance with 2559 19 JANUARY 1967 2560 the powers vested in it by virtue of sub­ Board. These alcohols have almost section (2) of section 10 of the Customs identical properties as the products of Ordinance, 1952, the Customs Duties our domestic distilleries i.e. ethyl and (Amendment) (No. 7) Order, 1966 methyl alcohol which is dutiable at $2 which has been laid before the House per gallon. It follows logically that as Statute Paper No. 7 of 1967 be con­ imported acyclic alcohols should also firmed. be made to bear the same duty burden. The purpose of this Order is to Mr Speaker, Sir, I beg to move. ensure that adequate protection is accorded to domestic industries. It has Tuan Chen Wing Sum: Sir, I beg been brought to the attention of the to second the motion. Treasury that domestic manufacturers Tuan Geh Chong Keat (Penang have faced severe competition from Utara): Mr Speaker, Sir, I wish to seek imported sweets while at the same time clarification from the Honourable they were finding it increasingly diffi­ Minister under Code No. 062 010- cult to export their manufactures. In Sugar confectionery, not containing order, therefore, that these products cocoa. could be given adequate protection, the Minister of Finance has agreed to Mr Speaker, Sir, I have spoken pre­ increase the import duty on sugar viously on the subject of duty imposed confectionery. on sliced nutmegs, which comes under the heading of "Desiccated Fruits". Mr Speaker, Sir, domestic manu­ Now, most of the items under "biscuits" facturers of rubber footwear in West or "desiccated fruits" which are im­ Malaysia have complained that im­ ported from the Island of Penang are porters have been able to avoid the being taxed at the Butterworth end. high protective duty imposed on My contention of seeking clarification imported rubber footwear. This could is this: sliced nutmegs which are desic­ be done in two ways, firstly, by impor­ cated use a certain percentage of sugar; ting complete soles and other almost and since sugar is being imported under completed footwear parts, which attract very, very restricted quota and more a lower rate of duty, and then putting percentage of locally manufactured them together once they are in the sugar is being used for the preparation country; and secondly, by importing of this item, "desiccated fruits and complete footwear with soles made of biscuits", would the Honourable Minis­ plastic. The Treasury has caused these ter consider the waiving of duty for complaints to be looked into and have these items, especially nutmegs, which found them to be justified. The Minis­ are being produced from locally grown ter of Finance has therefore, changed fruit and using locally manufactured the duty structure in order to accord sugar—only once in a way have we a more effective protection to domestic very, very small quota of the imported manufacturers. The main changes are sugar released. The manufacturers of to make complete soles of rubber or biscuits, too, are using locally manu­ plastic bear the same duty as the foot­ factured flour and locally manufactured wear itself, and that imported foot­ sugar. Thank you. wear of rubber and their plastic equivalents should bear the same rate Tuan Ali bin Haji Ahmad: Mr of duty. Speaker, Sir, sliced nutmegs are not Mr Speaker, Sir, a protective duty covered by this Order. has been imposed on imported hand Question put, and agreed to. sieves. This is in order to assist a domestic manufacturer who has found Resolved, it increasingly difficult to compete That this House resolves that in accor­ against imports which are sold prac­ dance with the powers vested in it by virtue tically at dumped prices. of sub-section (2) of section 10 of the Cus­ toms Ordinance, 1952, the Customs Duties The import duty on acyclic alcohols (Amendment) (No. 7) Order, 1966, which has been imposed as a result of recom­ has been laid before the House as Statute mendation made by the Tariff Advisory Paper No. 7 of 1967 be confirmed. 2561 19 JANUARY 1967 2562 THE SABAH CUSTOMS ORDI­ goods made in the free port area into NANCE (CAP. 33)—THE CUSTOMS the Customs Area. Is that exactly what DUTIES (SABAH) (AMENDMENT) you want? (No. 6) ORDER, 1966 Tuan Geh Chong Keat: I would prefer the Honourable Minister to com­ Tuan Ali bin Haji Ahmad: Mr plete his speech before I say what I Speaker, Sir, I beg to move, want to say, Sir. "That this House resolves that in accor­ Dr Lim Swee Aun: It is unfortunate, dance with the powers vested in it by virtue because if that is done and then—this of sub-section (3) of section 8 of the Sabah Customs Ordinance (Cap. 33), the Customs is where the manufacturer has to Duties (Sabah) (Amendment) (No. 6) Order, compete—when you come to these 1966, which has been laid before the House exemptions, we wouldn't know the as Statute Paper No. 8 of 1967 be con­ sources of these products, and this firmed." will encourage difficulties in adminis­ This Order provides for increased tration. protection on sugar confectionery and Tuan Geh Chong Keat: Mr Speaker, acyclic alcohols in Sabah. The reasons Sir, at this juncture I am not entering for this have been given when the into any debate on the question of the House considered the Customs Duties free port status of Penang. I would (Amendment) (No. 7) Order, 1966 prefer to do that after the Budget which has just been confirmed. speech to be delivered by the Minister Although the tariff classification in of Finance. As it is, Sir, I am making respect of rubber footwear has been a request on the item under the basis brought into line with that of West of the introduction of this item—that Malaysia, no change of duty has been these products I referred to are being made. locally grown, i.e. fruits in the Island of Penang and using locally manu­ Mr Speaker, Sir, I beg to move. factured products, because sugar has been very, very much restricted by the Tuan Chen Wing Sum: Sir I beg to Honourable Minister of Commerce and second the motion. Industry from being imported into the Tuan Geh Chong Keat: Mr Speaker, Island of Penang. Therefore, I feel that Sir, in respect of what I said just now, at this juncture these items using locally in regard to sliced nutmegs and other manufactured products should be given products manufactured in Penang with due consideration, and the question of locally grown products and locally the free port of Penang does not arise manufactured products—when I say at this juncture, Mr Speaker. "locally" I am referring to products Dr Lim Swee Aun: It does arise in manufactured in the West Malaysian that sugar is duty free in Penang. So, mainland—would the Minister consider there is a price differential between lifting of duties for all these products confectionaries made in Penang as manufactured or produced at Penang; compared with goods made within the and also would other products, which Customs Area. are not referred to in this Statute Paper Tuan Geh Chong Keat: Mr Speaker, No. 10, be given due consideration? Sir, they are made of sugar imported Thank you, Sir. into Penang The Minister of Commerce and In­ Mr (Deputy) Speaker): Order, order, dustry (Dr Lim Swee Aun): Mr Spea­ this is about Sabah Customs. ker, Sir, this is exactly what the Question put, and agreed to. Honourable Members from Penang Resolved, would like—they always want to have That this House resolves that in the cake and eat it. They want to accordance with the powers vested in it by retain their free port status and stay virtue of sub-section (3) of section 8 of the outside the Customs Area, and due to Sabah Customs Ordinance (Cap. 33), the Customs Duties (Sabah) (Amendment) (No. protection of confectionaries made in 6) Order, 1966, which has been laid before the rest of the Customs Area, they the House as Statute Paper No. 8 of 1967 want special exemption for the entry of be confirmed. 2563 19 JANUARY 1967 2564

THE SARAWAK CUSTOMS of the Board have already been sub­ ORDINANCE (CAP. 26)—THE mitted to the Treasury and where the CUSTOMS (IMPORT AND recommendations contained therein EXPORT) DUTIES (AMENDMENT) have been accepted, these form part of (NO. 5) ORDER, 1966 the tariff changes effected in the Tuan Ali bin Haji Ahmad: Mr Customs Duties (Amendment) Order Speaker, Sir, I beg to move, before this House for confirmation. That this House resolves that in accor­ In accordance with the provisions dance with the powers vested in it by virtue of the Tariff Advisory Board Act, these of sub-section (3) of section 8 of the reports will be published in due course Sarawak Customs Ordinance (Cap. 26), the Customs (Import and Export) Duties in whole or in part where it is deemed (Amendment) (No. 5) Order, 1966, which proper to do so. In the meantime, has been laid before the House as Statute Honourable Members will note that in Paper No. 9 of 1967 be confirmed. the Order before them increased pro­ This Order is the same as the tection has been accorded to hard soap Customs Duties (Sabah) (Amendment) in bars or tablets, paper and paper- (No. 6) Order, 1966, which has just board, various types of paper products, been confirmed by this House, except cement, marble, aluminium slugs, cer­ that it applies to Sarawak. tain types of cables, and batek. All these are products of thriving domestic Mr Speaker, Sir, I beg to move. industries and the increased protection Tuan Chen Wing Sum: Sir, I beg to will, I am sure, be a further encourage­ second the motion. ment to these industries to do even Question put, and agreed to. better. Resolved, The Order before the House also That this House resolves that in accor­ abolishes import duties on all raw dance with the powers vested in it by virtue of sub-section (3) of section 8 of the materials for the making of paper as Sarawak Customs Ordinance (Cap. 26), well as on all types of paper presently the Customs (Import and Export) Duties manufactured in this country. This (Amendment) (No. 5) Order, 1966, which has move will ensure that domestic been laid before the House as Statute Paper industries making use of these materials No. 9 of 1967 be confirmed. will not be handicapped by having to bear a duty burden and would be better THE CUSTOMS ORDINANCE, enabled thereby to reduce of their own 1952—THE CUSTOMS DUTIES products to consumers. (AMENDMENT) ORDER, 1967 Tuan Ali bin Haji Ahmad: Mr Opportunity has been taken to mend Speaker, Sir, I beg to move, the classification of certain tariff codes. These include golden syrup, various That this House resolves that in accor­ types of sauces, chemical fertilisers, dance with the powers vested in it by virtue of sub-section (2) of section 10 of the electric cables, dish washing machines, Customs Ordinance, 1952, the Customs welding equipment and welding Duties (Amendment) Order, 1967, which has electrodes and electric lighting and been laid before the House as Statute Paper signalling equipment for bicycles. These No. 10 of 1967 be confirmed. amendments have been made in the The Government firmly believes that light of practical administration by the sound and viable industries in this Royal Customs in the past year, and country should be protected against will help to facilitate declaration of unfair competition from imported such goods in future. In order to enable goods. The Tariff Advisory Board the Department of Statistics to collect established under the Tariff Advisory more accurate data, certain new tariff Board Act has been assigned the task codes have been created. Hon'ble of investigating into the needs of Members will notice these in the Second domestic industries for such protection Schedule in the Order. These new codes and Hon'ble Members will be aware have hitherto been included in mis­ that the Board has conducted several cellaneous codes, but have since enquiries in this field. Certain reports assumed importance of their own and 2565 19 JANUARY 1967 2566 should therefore be separately classified. atau pun batek sarong ini berarti No change in the rate of duty is made barang2 yang di-perbuat di-dalam in respect of all these codes. negeri kita sendiri yang akan di-bawa masok ka-Sabah, lain-lah kalau kita Mr Speaker, Sir, I beg to move. sebut kain sa-mata2 atau textile yang Tuan Chen Wing Sum: Sir, I beg to di-bawa dari luar. Kalau bagitu, Tuan second the motion. Yang di-Pertua, kalau kita mengenakan chukai yang penoh bagitu preferential Question put, and agreed to. duty-nydi terlampau tinggi tentu-lah Resolved, tidak menggalakkan orang2 kita ber- 2 That this House resolves that in accor­ usaha mengeluarkan kain yang sa- dance with the powers vested in it by virtue macham ini, dan orang2 di-Sarawak of sub-section (2) of section 10 of the atau di-negeri2 yang akan di-bawa Customs Ordinance, 1952, the Customs masok yang di-dalam negeri Malaysia Duties (Amendment) Order, 1967, which has 2 been laid before the House as Statute Paper juga tentu-lah tidak dapat bertukar No. 10 of 1967 be confirmed. kepandaian mereka itu dalam usaha2 barang2 perusahaan tempatan yang sa- macham ini. THE SABAH CUSTOMS ORDI­ NANCE (CAP. 33)—THE Jadi, saya tidak fikir chukai yang sa- CUSTOMS DUTIES (SABAH) macham ini bijak di-sahkan malah saya (AMENDMENT) ORDER, 1967 minta-lah perkara ini supaya dapat di- Tuan Ali bin Haji Ahmad: Mr beri pertimbangan yang lebeh muna- Speaker, Sir, I beg to move, sabah lagi. Ini, Tuan Yang di-Pertua, boleh kita lihat dalam muka yang That this House resolves that in accor­ dance with the powers vested in it by virtue pertama bagitu berkenaan dengan notes of sub-section (3) of section 8 of the Sabah yang kita kena mengenakan dengan Customs Ordinance (Cap. 33), the Customs GROUP 841 berkenaan dengan Duties (Sabah) (Amendment) Order, 1967, CLOTHING. Jadi, ini kata-nya walau which has been laid before the House as 2 Statute Paper No. 11 of 1967 be confirmed. pun kain itu di-bawa masok sa-chara kepingan2 yang kechil tetapi kalau dia This Order is in most respects itu sudah di-kira masok di-dalam jenis similar to the Customs Duties (Amend­ ini dan lebar-nya 36" maka dia juga ment) Order, 1967 which has just been di-kenakan chukai yang sa-macham ini, confirmed by this House. The only saya tidak nampak di-mana-kah notable difference is that no protective significance-nya patut kita sahkan di- duty is imposed on cement as no such atas group ini. Ini saya minta kete- industry exists in this State at the rangan daripada pehak yang berkenaan moment. Kementerian ini. Mr Speaker, Sir, I beg to move. The Parliamentary Secretary to the Tuan Chen Wing Sum: Sir, I beg to Minister of Finance (Tuan Aii bin Haji second the motion. Ahmad): Tuan Yang di-Pertua, barang2 Tuan Haji Abu Bakar bin Hamzah yang di-buat di-Malaysia apabila masok (Bachok): Tuan Yang di-Pertua, dua ka-Sabah dan ka-Sarawak tidak-lah di- tiga motion telah berlalu, tetapi motion kenakan chukai. ini, Tuan Yang di-Pertua, saya suka menarek perhatian berkenaan dengan Question put, and agreed to. dalam muka 5 daripada Statue Paper Resolved, No. 11, perkara 841-123 ia-itu Code berkenaan dengan kain batek lepas dan That this House resolves that in batek biasa. accordance with the powers vested in Ini, Tuan Yang di-Pertua, nampak- it by virtue of sub-section (3) of section nya kita telah mengenakan preferential 8 of the Sabah Customs Ordinance duty ini sampai kapada 25 per sen ia- (Cap. 33), the Customs Duties (Sabah) itu penoh kita kenakan kapada chukai (Amendment) Order, 1967, which has yang sa-patut-nya. Tuan Yang di- been laid before the House as Statute Pertua, apabila kita sebut batek lepas Paper No. 11 of 1967 be confirmed. 2567 19 JANUARY 1967 2568

THE SARAWAK CUSTOMS ORDI­ for this is that we will still have to NANCE (CAP. 26)—THE CUSTOMS provide the minimum requirements for (IMPORT AND EXPORT) DUTIES the defence and security of East (AMENDMENT) ORDER, 1967 Malaysia, and these requirements which Tuan Ali bin Haji Ahmad: Mr have to be met from our own resources Speaker, Sir, I beg to move, might not be less than that provided by us during the period of confron­ That this House resolves that in accor­ dance with the powers vested in it by virtue tation, in view of the withdrawal of of sub-section (3) of section 8 of the Sarawak Commonwealth forces from this area. Customs Ordmance (Cap. 26), the Customs The normalisation of relations with (Import and Export) Duties (Amendment) Indonesia should, however, bring Order, 1967, which has been laid before the House as Statute Paper No. 12 of 1967 be positive advantages in the matter of the confirmed. resumption of our previous two way trade and, in the long term, closer This Order applies to Sarawak in the economic relations between our two same way that the Customs Duties countries might offset somewhat (Sabah) (Amendment) Order, 1967 increased defence and internal security applies to Sabah. expenditures. Mr Speaker, Sir, I beg to move. Tuan Chen Wing Sum: Sir, I beg On the home front, the Malaysian to second the motion. economy, though rather less buoyant than in the previous year, expanded at Question put, and agreed to. a satisfactory rate in 1966. Total out­ Resolved, put as well as income and savings That this House resolves that in accor­ increased during the year but their dance with the powers vested in it by virtue rates of growth were lower than the of sub-section (3) of section 8 of the Sarawak Customs Ordinance (Cap. 26), the Customs exceptionally high rates achieved in (Import and Export) Duties (Amendment) 1965. Physical output in agriculture Order, 1967, which has been laid before the and forestry, mining, manufacturing House as Statute Paper No. 12 of 1967 be and construction, and the volume of confirmed. services recorded in the distributive Sitting suspended at 11.50 a.m. and service industries were, by and Sitting resumed at 2.30 p.m. large, all higher in 1966. For the economy as a whole, the impetus to (Mr Deputy Speaker in the Chair) growth came primarily from an expan­ sion in domestic demand, particularly THE SUPPLY (1967) BILL in the public sector. Aggregate con­ Second Reading sumption and investment expanded at The Minister of Finance (Tuan Tan about the same rates as in 1965. Retail Siew Sin): Mr Speaker, Sir, I beg to prices, however, remained relatively move that a Bill intituled "An Act to stable in most parts of the country apply a sum out of the Consolidated during the year. Total exports of goods Fund to the service of the year 1967 and services were, on the whole and to appropriate that sum and such buoyant, despite generally lower prices other sums as have been authorised for our export commodities, and the to be issued for the service of that year" export surplus is likely to be somewhat be read a second time. smaller than in the previous year. The year 1966 also saw the completion of The year 1966 was a significant one the first year of our First Malaysia for Malaysia. The accord which ended Plan. confrontation reached last August bet­ ween Malaysia and Indonesia was Efforts by the Government to in­ undoubtedly the most important event crease production and employment and of the year. Though the ending of raise living standards thus met with a confrontation will result in some fair measure of success. What is rather decrease in the expenditure on defence more encouraging is that all these and internal security, such a decrease accomplishments took place within a will by no means be as large as is framework of overall monetary stability. generally believed. The main reason However, these achievements have also 2569 19 JANUARY 1967 2570 given rise to some strains on the Italy, had gone through a recession economy; the Central Government's lately, and in these, appropriate overall budgetary deficit has remained Government measures had assisted in at a high level, on account of its the economic recovery that is now persistently large development expen­ being experienced. ditures, and was partially financed by drawings on its accumulated reserves. Developments of special concern to Although the country's balance of Malaysia occurred during the period payments remained generally sound, May to July when the pound sterling the overall position showed a deficit faced another crisis of confidence. during the year. Although the seamen's strike in the United Kingdom directly contributed to the pressure on sterling, as also the International Economic Trends tight money conditions and rising in­ I shall touch very briefly on the terest rates prevailing elsewhere, more international economic trends which important were the continuing doubts affect our financial and economic pros­ felt about the British Government's pects, bearing in mind that our eco­ ability or determination to correct the nomy is so dependent on the selling payments imbalance without resorting prices of our main export commodities. to exchange devaluation. Necessarily In 1966, total trade in the free world tough measures were, therefore, intro­ continued to expand and on the basis duced in July to give expression to the of present information, world trade is Government's declared intention to achieve a favourable payments position likely to rise by about 7.2% during the while maintaining the exchange rate for year. Primary producers as a whole sterling. As a result, in the first 9 enjoyed generally higher export prices months of 1966, there was some im­ in the first 10 months of 1966 compared provement in the balance of payments, with either the corresponding period of and the year should end with a smaller the previous year or the whole of 1965 overall deficit than in 1965. In particular, price increases were re­ corded for minerals and metals as a group, as well as for inedible agri­ Gross National Product and Savings cultural products. Malaysia, however, did not benefit from this general Preliminary estimates indicate that increase in commodity prices in 1966, the gross national product at market as export prices for most of our pri­ prices (GNP) amounted to $9,305 mary commodities, notably rubber, tin million in 1966, and increase of 6.3% and palm oil, declined during the year. over the previous year. Although the overall rate of growth in output was All these commodity price changes lower than the exceptionally high rate occurred against the background of a of 9.7% achieved in 1965, it was never­ continuing high level of economic acti­ theless satisfactory and compares vity in the industrial world. Indications favourably with the average annual are that this trend will continue in rate of growth of 5.7% recorded for 1967 but it is likely that the rate of the period between 1960 and 1965. growth will on the whole be slower What is more gratifying is that despite than in the previous year. In 1966, a political tensions in South East Asia, number of industrial countries, espe­ though not in Malaysia itself, during cially the United States, had already the past few years, and the generally reached virtual full employment of adverse trend in our terms of trade, their industrial facilities. In such coun­ Malaysia has consistently managed to tries, recourse was made during the achieve relatively high rates of growth year to monetary, fiscal and other during the 1960's. As a result, the per measures of a restrictive nature to capita gross national product increased check the excessive growth of money from $820 in 1960, to $931 in 1965, supply relative to the potential growth and $962 in 1966. On a regional basis, of real output or to arrest a deteriora­ the slower tempo of expansion during tion in their balance of payments. the year occurred primarily in West Others, notably Japan, France and Malaysia where the rate of growth was 2571 19 JANUARY 1967 2572 estimated at 5.4% in 1966 compared substantial increase in the export with 9.5% in 1965, and 5.9% in 1964. volume. Gross domestic savings, which However, the rates of GNP growth in increased substantially in 1965, con­ East Malaysia continued to be impres­ tinued to grow during the year, from sive. In Sabah, gross national product $1,657 million in 1965 to an estimated at market prices increased by 17.1% in $1,771 million in 1966, an increase of 1966 compared with 15.2% in 1965 and nearly 7%. The savings/GNP ratio, 11.5% in 1964. Similarly, in Sarawak, however, remained unchanged at about growth rates for the years 1964, 1965 19%, that is to say, gross savings and 1966 were estimated at 7.6%, during the year continued to be at the 8.5% and 9.5% respectively. rate of about 19 cents for every dollar generated in production. The expansion in domestic demand provided the main stimulus to growth in 1966. Total consumption at current Production Trends in the Domestic market prices increased during the year Economy by about the same rate as in 1965, that In our efforts to ensure an adequate is, by 6.2% to some $7,306 million in rate of economic growth, undue atten­ 1966, while total investment outlay, at tion is sometimes directed towards the $1,770 million, rose by about 8.6% more glamorous sector of industrial compared with a growth rate of nearly development, so that one is apt to 9% in the previous year. The sub­ lose sight of the fact that Malaysia, stantial amount of capital formation despite its efforts to industrialise, is achieved in 1966, amounting to about essentially an agricultural country and 19% of the gross national product, will continue to be so for some time to is a high rate of capital formation for come. Net output in agriculture, fores­ a developing economy by any accepted try and fisheries constitute about 30% standard. Aggregate domestic demand of our gross domestic product and this in the economy thus amounted to large sector of the economy provides $9,076 million during the year, an in­ employment for about 60% of the crease of 6.7% or about the same rate working population. It is thus appro­ of increase as in 1965. Although both priate that I should draw the attention the private and public sectors contri­ of the House to the silent but nonethe­ buted to the growth of the economy less impressive revolution that is taking during the year, the dynamic compo­ place in this sector of our economy nent continued to be the public sector, through technological progress. despite some slackening in the growth of public sector expenditure. Whereas Production in agriculture, forestry and aggregate private expenditure in fisheries continued to expand impres­ Malaysia, at $6,618 million in 1966 sively in 1966. During the first 11 increased by 4.8% compared with a months of the year, rubber production gain of 4.5% in 1965, aggregate public in West Malaysia, which accounts for expedniture, amounting to $2,458 mil­ about 94% of Malaysia's total produc­ lion in 1966, rose by 12.1% as against tion, amounted to 838,410 tons, an an increase of 13.6% in the previous increase of nearly 8% over the amount year. produced during the corresponding period of 1965. In East Malaysia, how­ The high level of economic activity ever, rubber production declined, due in the industrial countries in 1966 led mainly to a shortage of tappers so that to a continuing strong demand for our for Malaysia as a whole, total rubber exports. Despite generally lower prices production, at an estimated 803,100 prevailing during the year under review tons for the first 10 months of 1966, for our main export commodities, the external balance on goods and services, was 7% higher than the amount pro­ which showed a large surplus of $246 duced during the corresponding period million in 1965 compared with a sur­ of 1965. On the basis of present trends, plus of only $6 million in 1964, con­ production in 1966 is estimated to have tinued to record a favourable balance reached 990,000 tons, an increase of of about $229 million as a result of a 6% over the previous year, largely 2573 19 JANUARY 1967 2574 reflecting rising productivity resulting produced in the corresponding period from the progressively increasing acre­ of 1965. During the period under age planted with high-yielding rubber. review, output of palm kernels in­ creased by 20.6% to 38,000 tons. On While efforts are being made to the basis of present trends, palm oil diversify the economy, new planting production for 1966 is estimated to and replanting with high-yielding have reached 181,100 tons or about strains continue to be undertaken, 22.4% higher than in 1965. Production though on a reduced scale, to maintain of palm kernels is estimated at about not only the competitive position of 41,700 tons in 1966, an increase of the natural rubber industry vis-a-vis nearly 25% over 1965. Output of synthetic but also to provide some all other agricultural commodities, measure of support while the process especially padi, coconut oil, pineapples of diversification is being accelerated. and tea, also increased during the year. In 1966, the total acreage replanted and new planted in West Malaysia was The tin mining industry has con­ estimated at 175,000 compared with tinued to record progress in 1966 197,000 in 1965, bringing the total despite the lower prices which pre­ acreage under rubber in West Malaysia vailed during the year. Production of at the end of 1966 to 4.36 million, an tin-in-concentrates in the first 11 increase of 1.2% over the acreage at the months of 1966 amounted to nearly end of 1965. Although smallholder 63,000 tons, an increase of more than acreage amounted to about 57% of that 8% over the amount produced during total, production by these smallholdings the corresponding period of 1965. For accounted for only about 46% of total the year as a whole, production is estimated production during the year estimated to have exceeded the 1965 under review. By the end of 1966, more level by 7.4% to reach 68,400 tons, than 80% of estate acreage consisted of compared with a rate of increase of high-yielding material. just over 6% recorded in 1965. Produc­ tion from new mines, despite the pro­ The timber industry expanded gressive depletion of known ore re­ rapidly in 1966 as a result of the in­ serves, contributed largely to the in­ tensive operations of long term timber creased output. The number of tin concessionaires and the opening up of mines operating at the end of Novem­ forest areas for agriculture. Indications ber, 1966 was 1,113 compared with are that the production of round tim­ 1,080 on the same date in the previous ber, about 40% of which is produced year. Gravel pump mines, which ac­ in Sabah, increased by about 16.7% to counted for about 54% of total pro­ an estimated 7 million tons in 1966, duction, increased by 41 during this while the production of sawn timber period to a total of nearly 1,000 at the was estimated at 1.5 million tons, an end of November, 1966, while dredges, increase of 2.8% over the amount which accounted for about 34% of produced in 1965. A large proportion total output, decreased from 65 in of our timber is exported abroad but November 1965 to 63 in November home consumption, accounted for 1966. The Government has continued to mainly by the veneer and plywood in­ encourage investment in the tin mining dustries, building construction and industry. Large acreages of virgin jungle furniture making, is increasing rapidly. are gradually being released to accom­ The oil palm industry, which has modate the growing demand for more been expanding steadily during the mining land and substantial stretches past 5 years, continued to record signi­ of coastline have been given out for ficant progress in 1966. Intensification prospecting with a view to off-shore of the agricultural diversification pro­ mining for tin in the not too distant gramme had led to a significant in­ future. However, the production of crease in the acreage under oil palm iron ore, which has expanded greatly during the year. Production of palm since 1956, declined by about 9% to an oil during the first 11 months of 1966 estimated 6.3 million tons in 1966, due amounted to 162,200 tons, an increase mainly to the depletion of high grade of nearly 21% over the amount Ore deposits and reduced demand from 2575 19 JANUARY 1967 2576

Japan. At the end of October 1966, amounted to $156 million in 1965, an 29 iron mines were operating in West increase of 28% over 1964. Full-time Malaysia compared with 30 at the end employment rose from about 10,000 to of October 1965. 12,000 between 1964 and 1965. It is Manufacturing activities, stimulated interesting to note that while pioneer largely by increased domestic demand companies contributed about 31% of and the high level of agricultural pro­ the total net value of output of the duction, continued to expand in 1966. industries included in the annual survey In West Malaysia, the net value of in 1965, they accounted for only 16% output of industries included in the of full-time employment. In spite of all annual survey of manufacturing which this progress, the manufacturing sector represents about 80% of the net value in West Malaysia accounts for a rela­ of output in the entire manufacturing tively small proportion of the gross industry, amounted to just over $500 domestic product—11% in 1966, com­ million in 1965, an increase of nearly pared with 9% in 1960. It is clear 16% over the level attained in 1964, that the manufacturing sector has not as against a rate of growth of about been expanding fast enough to make 24% between 1963 and 1964. Precise a significant impact on the economy, information on current manufacturing particularly in the matter of more activities are not as yet available but extensive and more rapid import sub­ indications are that the rate of growth stitution and the creation of employ­ in manufacturing output during 1966 ment opportunities. Later on in my will most likely be about the same as address, I shall outline the measures that recorded in 1965, namely about already taken and likely to be taken 16%. On the basis of monthly data by the Government to assist our manu­ for a selected range of industries in the facturers to meet the challenge, and it first 10 months of 1966, increases in is a big challenge, which they face in production appeared to have taken trying to increase production to the place in nearly all industries during point of take-off in so far as industrial the year, with the exception of the development is concerned. footwear and cigarette industries. In­ Activity in building and construction creases in production were recorded in continued at a high level in 1966 soft drinks, biscuits, soap, tobacco, although there could have been some rubber goods, mattresses and foam slackening in the rate of growth during rubber products, cement and sawn the year. Large investment outlays in timber. both the private and public sectors Factories accorded pioneer status and the continuing demand for residen­ have been making steady progress. By tial dwellings and commercial and the end of December 1966, 143 in­ industrial structures accounted for the dustrial companies, 120 of which are uninterrupted growth of this sector of in West Malaysia, 12 in Sarawak and the economy. In general, output in the 11 in Sabah, had been issued with distributive and service industries also pioneer certificates. In addition, another continued to grow during the year in 60 companies have been approved in keeping with the general expansion in principle. Total resources of pioneer the other sectors of the economy. companies as at the end of December 1966 amounted to $357 million, of which called-up capital came to $252 Employment and Prices million and loan capital $105 million. The higher level of economic activity About 42% of these resources came recorded in 1966 had led to some from domestic sources, A total of 112 improvement in the general employ­ pioneer companies in West Malaysia ment situation in Malaysia. Sectors of are already in production while 8 other the economy which provided most of projects are in various stages of im­ the increased employment opportunities plementation. The annual manufactu­ included manufacturing and construc­ ring survey of selected industries indi­ tion, tin mining, timber extraction and cates that the net value of output of sawmilling. Precise information on the pioneer companies in West Malaysia current employment and unemployment 2577 19 JANUARY 1967 2578 situation in Malaysia as a whole is not During 1966, about 600 persons, main­ available. However, indications are that ly rubber tappers and construction despite the increase in employment workers were recruited from West during the past year, employment Malaysia to work in Sabah and Sara­ opportunities have not been rising fast wak. In order to encourage the migra­ enough to accommodate the un­ tion of labour the Government has employed, especially those "first-timers" established the Malaysian Migration leaving school annually. Youth un­ Fund Board, whose aim will be to employment continues to be high. In promote and finance the transfer of 1966, it was estimated that 142,000 workers from West to East Malaysia. boys and girls left school. Most of them If this Board operates effectively, and if will be seeking employment. By the its efforts receive the active and full end of this year another 150,000 boys support of the State Governments con­ and girls are expected to leave school. cerned, there is no reason why, in the It is clear that, in the last analysis, only course of time, such transfers should an adequate rate of economic growth not kill two birds with one stone, can take care of this problem. namely, eliminate the labour shortage of East Malaysia while reducing to The rate of unemployment in the some extent the unemployment situa­ urban areas continues to be higher than tion in West Malaysia at the same time. that in the rural areas and that for the country as a whole. In June, 1966, an To prevent increases in income from official sample survey covering 5 major being nullified by too rapid population urban areas in West Malaysia, namely, growth, the Government has officially Kuala Lumpur and Petaling Jaya, sponsored a programme of family Georgetown, Ipoh, Klang and Johore planning through the National Family Bahru, indicated that there was a slight Planning Board which will launch a decline in the overall rate of unemploy­ pilot scheme in mid-1967. Results of ment in these urban areas. The overall the Board's work will not be apparent unemployment rate, expressed as a for some time to come, but suffice it to percentage of the labour force, was say at this stage that the success of about 8% compared with just over 9% this campaign will bring handsome in mid-1965. The general pattern of dividends in the form of improvement unemployment by age groups followed in the health of mothers and babies and the trends of recent years with the in living standards. highest rate in the age groups 15-19 years and 20-24 years. The incidence The remarkable stability in the of unemployment is highest for persons overall level of retail prices in West with only primary education. The Malaysia during the past decade and distribution of unemployment by a half continued in 1966. The inform­ industry in these towns showed rela­ ation available so far indicates that the tively little change, except in the manu­ retail price index for West Malaysia, facturing industry where the number which measures price changes for a of persons employed as a percentage of fixed basket of goods and services with total employment increased from 16.7% 1959 as the base year, showed no in mid-1965 to 20.7% in June 1966. appreciable change during the first 9 Service industries accounted for 33.6% months of 1966. The monthly retail of total employment, commerce 23.6%, price index during this period averaged transportation, storage and communi­ at about 103 compared with an average cations 9.3%, and mining, construction, of 102.3 during the corresponding utilities and agriculture 12.8%. period of 1965. Price indices in West Malaysia for food, beverages and It is somewhat paradoxical that while tobacco, clothing, services and enter­ surplus labour exists in West Malaysia, tainment, showed only a slight increase East Malaysia, particularly Sabah, con­ during this 9-month period. It is un­ tinues to experience a general shortage likely that the level of retail prices has of labour, especially of skilled labour. changed significantly during the last To some extent, this shortage was met quarter of 1966. This achievement of a by recruitment from West Malaysia. long and continuous period of price 2579 19 JANUARY 1967 2580 stability is especially significant when latest information indicates that gross it is recalled that not so very long ago, exports in 1966 amounted to about various prophets of doom predicted $3,876 million, an increase of 2.5% that the tax measures introduced for over 1965, as against an exceptionally the 1965 Budget would lead to an high rate of growth of nearly 12% in appreciable increase in the general level 1965. Although the volume of exports of retail prices. The facts are now increased significantly during the year available for all to see and they bear under review, much of the increase was testimony to the general soundness of offset by the generally lower commodity trie Government's policies. I do not prices which obtained. Gross imports, think it is rash on my part to predict estimated at about $3,419 million in that we will continue to enjoy growth 1966, were about 2% higher than in within a framework of monetary and the previous year compared with an price stability in the years ahead. increase of 4.7% in 1965 and an In my last Budget address I referred average annual rate of growth of 3.8% briefly to the pressure on retail prices for the period 1961 to 1965. As a result, in East Malaysia, particularly Sabah, the trade surplus amounted to $457 which arose mainly from favourable million in 1966 as against a surplus of export earnings in recent years and the $426 million in 1965. Malaysia's terms concentration of increased construction of trade declined during the year in the activities within limited areas in this sense that the purchasing power of our part of Malaysia. I am happy to state, exports was less in terms of imports, on the basis of available evidence, that i.e. one unit of export bought less in while export earnings in East Malaysia imports. have continued to be favourable and the tempo of development high, there The latest trade data indicate that has been no significant pressure on the receipts from the export of rubber, general level of retail prices in Sabah round timber, and palm oil and kernels and Sarawak during 1966. A compara­ were higher in 1966 than in 1965. tive study conducted by the Department Earnings from tin, iron ore and sawn of Statistics in October 1965 indicated timber, however, declined during the that, on the whole, the general level of year under review. Gross rubber exports retail prices in Jesselton, excluding rent, which accounted for about 38% of total was about 20% higher than the level exports, increased slightly in 1966 as a prevailing in Kuala Lumpur. Similar result of the larger volume exported calculations for Kuching showed that during the year. On the basis of export the general level of retail prices in this data for the first 10 months of 1966, town, excluding rent, was approxi­ the gross volume of rubber exports mately 11% higher than in Kuala during the year is estimated to have Lumpur. Results of another survey passed the million ton mark to reach conducted by an ad hoc committee in 1,024,000 tons, an increase of 7.7% Sabah recently revealed that the general over the amount exported in 1965. level of retail prices, excluding rent, in Export receipts from rubber, however, Jesselton had risen by about 20% are estimated at about $1,485 million between 1963 and 1966. These are in 1966 or only 1.6% higher than in admittedly preliminary figures but they 1965 on account of a fall in price are nonetheless significant in that they during the year. The unit value of demonstrate quite clearly that although rubber averaged about 65 cents a the general level of retail prices in East pound in 1966 compared with an aver­ Malaysia is higher than that in West age of 69 cents a pound in the previous Malaysia, the difference between them year. is not as large as is generally believed. In the first quarter of 1966, the price of R.S.S. No. 1 rubber, noon buyers External Trade, Balance of Payments f.o.b. Singapore, averaged just over 70 and Reserves cents a pound. Since then, the price has Malaysia's foreign trade, which declined steadily, averaging only 67.3 expanded rapidly in 1965, continued to cents a pound in the second quarter, grow in 1966, but at a slower rate. The and 62.6 cents a pound in the third 2581 19 JANUARY 1967 2582 quarter. The major dampening factor On the basis of data for the first 10 was the U.S. General Services Adminis­ months of 1966, gross exports of tin, tration's decision to increase stockpile estimated at $790 million in 1966, were sales of natural rubber by 50,000 tons about 9.5% lower than in 1965 as a a year to 170,000 tons in 1966/67 with­ combined result of the lower prices out prior notice as to the amount that obtained during the year under review will be released to the market. As a and a fall in export volume. The result, in early September the price fell volume of tin exports, estimated at below 60 cents a pound and on 26th about 72,500 tons in 1966, declined by September, a price of 58.6 cents a nearly 2% during the year due mainly pound was recorded, the lowest since to the discontinuance of imports of March 1954. This latter price was tin from Thailand for re-export. How­ recorded again on 3rd October. ever, net exports of tin, amounting to about 70,600 tons, were about 6.8% Fortunately, as a result of vigorous higher than in 1965. The unit value of representations by the Malaysian tin exports averaged an estimated Government, the U.S. General Services $10,890 a ton in 1966 compared with Administration suspended its stockpile $11,800 a ton in the previous year. sales pending a review of its disposal programme, and decided on 19th World production of tin-in-concent- October to trim sales of its stockpile rates outside the Communist bloc rubber to an annual rate of 120,000 countries was estimated at about 160, tons with effect from 1st January, 1967. 400 tons in 1966, an increase of 5.2% In addition, it suspended further over 1965. Malaysian production disposals for the rest of 1966. This accounted for more than 42% of total favourable development provided the world output. Estimated world con­ needed boost and the price rose by sumption of tin metal amounted to 167, nearly 7 cents a pound between 3rd 500 tons in 1966, 1.4% higher than in Oc;ober and 19th October. For the last the previous year. There was thus a quarter of 1966, the price averaged 61.9 smaller deficit between world produc­ cents a pound, though it fell again to tion and consumption in 1966 than in 58.6 cents a pound towards the end of 1965, more than offset by disposals of the year. For the year as a whole, the stockpile tin in both years. average price of R.S.S. No. 1 was 65.4 cents a pound compared with an With the narrowing of the gap bet­ average of 70 cents a pound for 1965. ween world production and consump­ tion, the price of tin, which reached World production of natural rubber, relatively high levels between March for which Malaysia accounted for some 1965 and February 1966, steadily fell during the greater part of 1966. The 40%, is estimated at 2.45 million tons daily spot price on the London Metal in 1966, an increase of 5% over 1965. Exchange averaged £1,296 a ton in World consumption of natural rubber 1966, 8.3% below the daily average is estimated at 2.52 million tons in price of £1,413 a ton in 1965. During 1966, about 7% higher than in 1965 so the first half of 1966, the average that, for the world as a whole, produc­ daily spot price was £1,363 a ton com­ tion fell short of consumption by about pared with £1,375 a ton for the corres­ 70,000 tons during the year compared ponding period of the previous year. with a shortfall of 27,500 tons in 1965. The average daily spot price in the However, disposals of natural rubber latter half of 1966 was, however, much from Government stockpiles more than lower and averaged £1,231 a ton com­ offset the deficits in both years. World pared with £1,449 a ton for the second half of 1965. Major factors which production and consumption of synthe­ contributed to the decline in price tic rubber in 1966 were estimated at included reported increases in produc­ 3.26 million tons and 3.17 million tons tion in the major producing countries respectively. The share of synthetic and speculation that the output of tin- remained at about 56% of the total free cans could well supply about 80% world market. to 90% of the beer and beverage can 2583 19 JANUARY 1967 2584 market in the United States. As in On the whole, exports of rubber, previous years, the American Stockpile tin, timber, iron ore, and palm oil and disposal programme continued to have kernels, which accounted for about a depressing effect on prices. 77% of total gross exports, amounted Sustained world demand for tropical to an estimated $2,976 million in 1966 hardwoods and semi-hardwoods has compared with $2,969 million in 1965. contributed substantially to the rapid Growth in the exports of other com­ growth of the Malaysian timber indus­ modities, particularly pineapples, coco­ try in recent years. Exports of round nut oil, bauxite and some manufactured timber increased sharply during the goods, thus accounted for most of the year, from $262 million in 1965 to an increase in total exports during the estimated $350 million in 1966, an year under review. increase of 33%. In terms of volume, The comparatively slower rate of round timber exports rose by about increase in imports during 1966 reflected 30% to an estimated 4.3 million tons to some extent a levelling off in the in 1966 compared with 3.3 million tons imports of food, beverages, tobacco, in 1965. The unit value of round timber and manufactured goods and articles, exports increased by less than 3% as the process of import substitution during the year. Exports of sawn gathered momentum, while there was a timber, which reached a record level decline in the import of inedible raw of 521,000 tons in 1965, were estimated materials. However, imports of mineral to have declined by about 3.8% in fuels and chemicals were estimated to 1966 to about 501,000 tons. The unit have increased by about 11.5% during value of sawn timber fell during the the year, while imports of machinery year so that total earnings from sawn and equipment were estimated at about timber exports, which amounted to 7.5% higher than in 1965. about $82 million in 1966, declined by about 14% compared with 1965. Preliminary balance of payments estimates for Malaysia indicate that the The volume of iron ore exports, our current account was in surplus by about fourth major exports commodity, $89 million in 1966 compared with a declined by about 7.3% in 1966 to an surplus of $121 million in 1965 and estimated 6.2 million tons as a result deficits amounting to $129 million and of reduced demand from Japan. Total $222 million in 1964 and 1963 respec­ export earnings amounted to about tively. The current account surplus in $148 million or about 8.6% lower than 1966, though somewhat smaller than in 1965. that recorded in 1965, was brought The oil palm industry, which is mainly by an improvement in the becoming an increasingly important merchandise surplus. However, the export income source, continued to deficit on invisible account, which is a make encouraging progress in 1966. normal feature of our balance of pay­ Total exports of palm oil amounted to ments and, indeed, of most developing about $115 million in 1966, an increase countries, increased by about $46 of 6.7% over 1965 mainly as a result million, largely on account of reduced of the larger volume exported. defence expenditures arising from the Although the volume of palm oil withdrawal of Commonwealth forces exports increased by 23.8% to 174, from East Malaysia. Foreign grants 500 tons in 1966, much of the increase received during 1966 were also lower was offset by lower prices obtained than in 1965. Nevertheless, the current during the year. The unit value of palm balance of payments position continues oil fell from $762 a ton in 1965 to $656 to be healthy. a ton in 1966. The volume of palm In 1965, it was estimated that the kernel exports is estimated to have total inflow of private long term capital, increased by about 15% in 1966, but comprising both new funds and re­ owing to a fall in its unit value, investment capital, and official long term earnings from palm kernel exports capital, mainly in the form of net foreign amounted to about what they were in loan receipts, amounted to about $360 1965, namely, about $9 million. million compared with an aggregate 2585 19 JANUARY 1967 2586

inflow of about $270 million in 1964. Monetary and Financial Developments After making adjustments for un­ We in Malaysia have always been recorded short term capital movements, proud of our record of financial stabi­ including advances and lags on trade lity. Our policy has always been, and and service payments, and errors and will continue to be, growth in condi­ omissions, the overall balance of pay­ tions of stability. As in previous years, ments in 1965 recorded an estimated growth in the amount of money or surplus of about $165 million compared purchasing power in the hands of the with an overall deficit of $124 million private sector continued to be consonant in 1964. Similar information for 1966 with the rate of increase in the pro­ is not yet available, but the indications duction of goods and services in the are that the aggregate inflow of long domestic economy. Gross currency term capital in 1966 was much smaller circulating in Malaysia has been esti­ trian in 1965 due mainly to a sharp mated at about $1,190 million at the decline in the amount of official long end of November 1966, an increase of 5.6% over the amount in circulation term foreign borrowing during the at the end of 1965. Active currency, year. On the whole, Malaysia's basic however, that is, currency in the hands payments position, that is, the balance of the public, expanded at a compara­ on current and long term capital tran­ tively faster rate. At the end of Novem­ sactions, continued to be in surplus in ber 1966, active currency, estimated at 1966 indicating that the country's about $1,090 million, was 6.5% higher balance of payments is still basically than at the end of 1965. Current sound. Despite this healthy position, account deposits maintained by the Malaysia's foreign reserves fell during public with the banking system rose by 1966, as a result primarily of adverse nearly 5% to about $690 million at the unrecorded capital movements. The end of November 1966. Hence, total balancing item, including errors and money supply in the country, com­ omissions, continued to be large. prising active currency and current account deposits, amounted to about $1,780 million at the end of November, Malaysia's gold and foreign ex­ 1966. This represented an increase of change reserves increased by $165 about $100 million or nearly 6% over million in 1965 compared with a total money supply at the end of 1965. decline of $124 million in 1964 and a Like most developing countries, cur­ decxine of $66 million in 1963. For the rency notes and coins account for a period 1960 to 1965, total reserves large proportion of our total money increased by about $520 million on supply. At the end of November 1966, account of the generally favourable about 62% of the money supply con­ balance of payments outcome expe­ sisted of currency in circulation and the remaining 38% took the form of rienced during this period. However, current account deposits. During the during the first 11 months of 1966, first 11 months of 1966, quasi money Malaysia's foreign reserves declined by or fixed and savings deposits main­ about $107 million; official reserves tained by the public with the banking fell by about $58 million and the net system increased by $126 million, or foreign assets of commercial banks fell 13.6%, to some $1,050 million. by nearly $49 million. As at the end of November 1966, Malaysia's external The upward trend in the growth of reserves, including an estimate of both deposits with commercial banks and bank credit over the past few Malaysia's share of the foreign assets years continued into 1966. By the end of the Currency Board, amounted to of November 1966, total deposits with $2,657 million, of which about 91% is commercial banks in Malaysia amoun­ held by official institutions. This level ted to $1,921 million, an increase of of reserves is sufficient to finance about $177 million, or about 10% over those 91/2 months' imports at the current level, at the end of 1965. The continued which is satisfactory by any standard. increase in deposits reflected, among 2587 19 JANUARY 1967 2588 other things, the growth of the banking new Malaysian dollar. When Bank habit and the expansion of banking Negara assumes currency issuing facilities throughout the country. Total powers on 12th June, the law requires bank credit at the end of November the Bank to maintain exactly the same 1966, amounted to $1,304 million, minimum reserve of external assets compared with $1,141 million at the against its new notes and coins in cir­ end of 1965, an increase of 14.3%, It culation as the minimum reserve of may be of interest for Honourable external assets which the Currency Members to note that there has been Board is presently required to maintain a steady and noticeable increase in the against its notes and coins in circula­ amount of bank credit extended to the tion under the provisions of the manufacturing sector during the past Currency Agreement, 1960. Under few years. At the end of June 1966, the terms of this Agreement, the total loans and advances for manu­ Currency Board is allowed to invest facturing accounted for 17.5% of total an amount of up to $300 million in the bank credit compared with 16.9% at securities of or guaranteed by any of the end of June 1965, 14.2% at the the Participating Governments, so that end of June 1964 and 11% at the end the minimum reserve of external assets of December 1963. which the Currency Board is required by law to maintain against its currency The market for short term funds and liabilities is about 80%. So far, how­ Treasury bills, which has been taking ever, no Participating Government has shape in recent years, has made satis­ taken advantage of this provis'on to factory progress. To ensure that the request the Currency Board to invest market will have an adequate supply in its securities. As a result, the effec­ of Treasury bills and to accommodate tive reserve of external assets main­ rising demand, Honourable Members tained against Currency Board notes will recall that this House recently and coins in circulation has never been approved legislation to increase the maximum amount of Treasury bills less than 100%. In the same way, that can be raised from $600 million although the minimum reserve of exter­ to $1,000 million. Total Treasury bills nal assets which Bank Negara is outstanding at the end of December, required by law to maintain is approxi­ 1966 amounted to about $578 million, mately 80%, in practice, and indeed, an increase of $128 million, or 28.5% for a long time more to come, this compared with the end of 1965. reserve will be more than 100% (Applause). I shall now explain how Conditions in the Stock Exchange this happy position will come about. over the first 11 months of 1966 have improved greatly compared with 1965, Bank Negara will issue its new although the Exchange was generally currency in exchange for Currency quiet apart from occasional bursts of Board notes and coins. The Malayan unusual activity. An analysis of the dollars received in exchange will be turnover data published in the Gazette presented to the Currency Board for of the Exchange, for example, indicates redemption and Bank Negara will that turnover in the first half of 1966 was 61% higher than that in the latter receive 2s. 4d. for every Malayan half of 1966. Turnover for the period dollar so redeemed, so that for every July to November, 1966 was 41% Malaysian dollar that is issued by Bank higher compared with the correspon­ Negara there will be a reserve of exter­ ding period of 1965. nal assets of 2s. 4d., that is, 100% cover. In addition, the Bank itself at Currency present holds more than $200 million in gold and foreign exchange which I am sure the House would like to know that preparations by Bank would form an additional backing for Negara to issue new Malaysian notes the currency issued by the Bank. The and coins on 12th June, 1967 are well reserve of external assets against notes under way. It would be of interest also and coins issued by Bank Negara will for me to refer to the backing for the thus be well over 100% (Applause). 2589 19 JANUARY 1967 2590

It will be interesting to note that a connection. In the past, only the curren­ reserve of external assets of 80% cies of the rich industrial countries against currency liabilities is considered have been accorded this status. Such high even by international standards international recognition clearly con­ and many currencies of the industrial firms not only the inherent strength of countries regarded as "hard" have a the Malaysian dollar but also the foreign exchange backing which is well Fund's confidence that the Malaysian below this figure. The provisions of the Government will see to it that the new law which allow Bank Negara to issue currency will always be strong and up to a maximum of about 20% of its stable in the eyes of the world financial notes and coins against domestic assets community. rather than external reserves is a feature present in every central banking system. Honourable Members will have This feature is known as a fiduciary noted from Press reports that both the issue and merely provides the Bank Singapore and Brunei Governments with some flexibility in the exercise of have agreed with us in principle to its powers to ensure that the appro­ adopt arrangements which will ensure priate amount of money and bank the free interchangeability of our res­ credit will always be available to pective currencies after 11th June next service the growing needs of an expan­ when three new currencies will take the ding economy. Honourable Members place of one. I have every confidence will have noted from my earlier that it should be possible to work out, remarks that a fiduciary issue has been in good time, the required details as provided for even in our present soon as the monetary authorities of Currency Board system and there Singapore and Brunei are established should therefore be nothing unusual and this should go a long way towards for our own Central Bank to be removing any inconvenience which endowed with this feature. might otherwise arise from the change which is due to take place in June Malaysia, with its substantial export 1967. base and relatively large foreign ex­ change reserves, is in a strong position Economic Integration to maintain the strength and stability The process of economic integration of the new dollar. Moreover, the of the component States of Malaysia Malaysian Government has always has now reached the point where all demonstrated its ability to maintain, "Made in Malaysia" goods, apart from and will continue to maintain a viable a few exceptions, are allowed duty free and stable economy which provides movement within the country, subject the very foundations for a strong and to certain conditions. It is the Govern­ sound currency. This policy is most ment's intention to eliminate even this important for, in the final analysis, it short list of exceptions as soon as is the basic strength of the economy possible. It is also intended to enact and the policies of the Government unified Customs legislation for the that really matter. The financial poli­ whole of Malaysia to replace the three cies of the Malaysian Government separate laws which now exist. have often been described by many international monetary experts as both The shipping lines involved, by in­ sound and conservative and yet pro­ creasing the frequency of their sailings gressive, and I can give a pledge that between East and West Malaysia, have such policies will continue to be main­ also helped to increase trade between tained in the future (Applause). these two components of Malaysia. Positive Government measures, added The recent decision of the Interna­ to this contribution, have thus resulted tional Monetary Fund to include the in rather striking progress in this field Malaysian dollar in its list of currencies in recent years. Total intra-regional to be used for future drawings on the exports increased from about $5 Fund, despite the fact that Malaysia million in 1961 to $59 million in 1965, will be issuing a new currency in June, and an estimated $91 million in 1966. has a special significance for us in this In the case of intra-regional imports, 2591 19 JANUARY 1967 2592 these were estimated to have grown Development Fund and certain other from $9 million in 1961 to $71 million statutory funds of $66 million, the in 1965, and to $117 million in 1966. current account for 1965 showed a To accelerate further the growth of surplus of $17 million compared with intra-regional trade, the Government the $2 million previously expected. has decided on the following additional Development expenditure during incentives: 1965 came out at $590 million or $40 Firstly, port charges at Port Swetten- million more than expected. Compared ham on cargo to and from all to 1964, the increase was substantial, Malaysian ports will be reduced viz. 14% above the 1964 figure, even by $1.30 a ton with effect from after excluding the $8 million spent in 20th January, 1967 i.e., tomorrow Singapore during 1965. As a result, (Applause); and the overall deficit, after taking into Secondly, full drawback on imported account the $17 million current account raw materials utilised in the manu­ surplus and $54 million of special facture of goods traded between receipts credited to the Development East and West Malaysia will be Fund, reached a new high of $519 granted with immediate effect, million. This deficit was financed by with the proviso that goods which loans totalling $495 million and a run­ are already allowed duty free down in Federal Government reserves movement within Malaysia will not of $36 million. The difference of $12 be eligible for both the full duty million is accounted for by additional drawback as well as the exemption cash disbursements to various trust from regional import duty; manu­ funds. It may be noted that gross factures of such goods will only be domestic borrowing totalled $412 eligible for either one of these million or $72 million more than concessions. previously expected. This increase in gross domestic borrowing was largely due to the increase in the Treasury Federal Government Finance bill holdings of commercial banks 1965 which had to meet the new liquidity requirements of the Central Bank. Before dealing with the financial position of the Federal Government for 1966 and 1967, I would like to refer 1966 briefly to the final outturn for 1965 The accounts for 1966 have been because at the time of my last Budget closed but not yet finalised. It is how­ speech in November, 1965 these ever clear that although the Federal accounts could clearly not be finalised. Government's financial outturn in 1966 The current account for 1965 turned has turned out to be more favourable out to be slightly better than expected than envisaged in the 1966 Budget, while the higher level of development the general picture is one of in­ expenditure was accompanied by a creasingly severe strain. For the first larger amount of domestic borrowing. time since 1958, there is a deficit on For 1965, ordinary budget revenue current account. The overall deficit, came to $1,580 million or $55 million after taking into account development more than envisaged. This was largely expenditure, is over $500 million which due to more favourable prices at the is uncomfortably large. It leaves the end of the year for rubber and tin, a Government's realisable assets at about higher yield from turnover tax, and $400 million, or around the level pre­ the impressive increase in receipts from vailing during 1958, which was one of telecommunications services. Although our worst years in this respect. ordinary budget expenditure turned out Ordinary budget revenue for 1966 is at $1,629 million or $49 million more now estimated at $1,640 million. This than previously envisaged, the deficit is $84 million more than the original on the ordinary budget came to $49 budget estimate for the year. The in­ million, or $6 million less than expec­ crease is due largely to higher average ted. Allowing for transfers to the prices than originally estimated for «#

2593 19 JANUARY 1967 2594 rubber and tin, and a higher yield from seconded and contract officers specially income tax. This revenue total of recruited for their wide experience in $1,640 million is $60 million, or 4% income tax evasion work. They are more than actual revenue for 1965, but ably assisted by Malaysian Revenue is really $148 million or 10% more officers who at the same time are than the comparable revenue for 1965, learning from the former the finer if Federal Government receipts from techniques of detection {Laughter). Singapore for the first 8 months of that Revenue officers in pairs have been year are excluded. This buoyant in­ visiting business premises to make on- crease in revenue is particularly striking the-spot investigations. The plan is when we consider that export duty that over a given period every business from rubber declined by $13 million, will receive at least one visit from them while that from tin and iron ore also and if there is any evidence of tax declined by $2 million and $6 million evasion, the full weight of the law will respectively. In addition, interest from be brought to bear upon them. It would investments fell by $8 million and then be too late for the evaders to ask receipts from the Currency Surplus for mercy. The full rigour of the law Fund distribution over $4 million will then be applied and its penal pro­ lower. The increase in revenue was visions will be invoked to mete out the therefore due to a number of special penalties appropriate to them. factors. A part of the increase was of While the increase in revenue has course attributable to the tax changes been satisfactory, the growth in expen­ imposed when the 1966 Budget was diture has been a major source of introduced, and these were estimated anxiety. Ordinary Budget expenditure to yield $49 million; the removal of is now estimated at $1,720 million. This Commonwealth preference from a is $36 million more than envisaged in number of import items in August my 1966 Budget speech, or 5.6% more 1966 was a significant contribution. At than Federal Government ordinary the same time, the yield from turn­ expenditure for 1965. If, however, we over tax of $43.5 million during 1966 exclude from the 1965 figure the included some $15 million of arrears Federal Government's expenditure in from the 1965 assessments. Also in­ Singapore before the separation, and cluded in ordinary revenue was a total this is clearly fair for the purpose of of $18 million of cash no longer comparison, the increase in 1966 is required for various Trust Fund opera­ $131 million, or 8.2%. There is con­ tions. siderable pressure to increase expendi­ While the increase in road transport ture due mainly to the need to imple­ licences and fees of $21 million, or 19% ment Government policies already is welcome, the most striking increase decided upon, and to maintain com­ is in the collection from income tax pleted development projects. The in­ (including tin profits tax) which rose crease in 1966 has taken place in spite from $302 million in 1965 to $365 of Treasury efforts to limit or turn million in 1966. This is not only a new down demands for additional funds record, it shows a remarkable increase from various Ministries and Depart­ of $63 million or 21% during a year ments. I will refer again to these when only minor adjustments in tax pressures and efforts to limit expendi­ rates were made. While a part of this ture increases when dealing with the increase could be attributed to the 1967 expenditure proposals. higher profits of rubber and tin com­ From what I have already said, it panies in 1965, when gross national is not surprising that the Ordinary income was estimated to have increased Budget for 1966 is likely to end up by 9.7%, a substantial part of the with a deficit of $80 million. Discoun­ increase was clearly due to improve ting the transfer of $52 million from collection and the success of the anti- ordinary expenditure to the Develop­ evasion drive. ment Fund and certain other Funds, This anti-evasion drive is being there is then a current account deficit spearheaded by a Senior Investigation of $28 million. Although this current Officer and 14 Colombo Plan experts, account deficit is less than the $78 2595 19 JANUARY 1967 2596 million estimated in my 1966 Budget equipment, Canadian Caribou aircraft speech, the fact remains that the and motor cycles worth over $12 current account is not in balance, and million, and New Zealand military this is an extremely serious trend which equipment. This defence assistance was must clearly be reversed. given to expand Malaysian armed In my 1966 Budget speech, I esti­ forces and in response to our requests mated that actual development expen­ for aid during the years of confronta­ diture might turn out at $615 million, tion. I would like to take this opportu­ although $880 million was appropriated nity to express our sincere appreciation in the Development Budget. This of this valuable help from our allies allowed for shortfalls in disburse­ in our hour of need (Applause). ments for administrative and technical With development expenditure at reasons. Despite our reluctance to $600 million and special receipts at $57 reduce development expenditure, we million, the overall deficit for 1966, have had to slow it down mainly including the current account deficit of because of the slow inflow of foreign $28 million, is now estimated at $571 loans and grants. As Honourable million. This will be financed by Members are aware, under the First domestic and foreign loans totalling Malaysia Plan, out of an estimated $406 million and a rundown of $165 public sector development expenditure million in the Federal Government's of $4,550 million, a sum of $1,900 reserves. million was expected to be financed from external sources in the form of loans and grants. Although several 1967 Ordinary Expenditure Proposals countries and international institutions As Honourable Members will observe have promised or agreed to provide aid, from the Expenditure Estimates already only a small sum has been received tabled, ordinary expenditure for 1967 so far, and the first year of the Plan has been fixed at $1,829 million, in­ period has now elapsed. I should, cluding a transfer of $50 million to the however, add that the delay in transla­ Development Fund. The 1967 expendi­ ting promises into fulfilment is largely ture will, therefore, be 11.2% more due to shortage of staff on our part, than the Budget appropriation of as a result of which we have not been $1,644 million for 1966 but only 6.3% able to get on with the job of negotia­ more than the anticipated 1966 expen­ ting and finalising the agreements diture outturn of $1,720 million. required with the donor countries as quickly as we would wish to. Con­ The difficulties of reducing ordinary sequently, several projects which expenditure will be appreciated when appeared in the 1966 Development it is realised that out of an estimated Estimates have not been started or had total of $1,829 million, $463 million or to be phased out in view of the finan­ 25% consists of expenditure that is cial stringency. As a result, actual charged by law and cannot, therefore be development expenditure is expected reduced. Of the balance of $1,366 to total only $600 million instead of million, Defence received $250 million, the $615 million originally envisaged. Internal Security $147 million, Educa­ tion $385 million and Health $140 Special receipts credited direct to the million. This leaves a balance of only Development Fund during 1966 are $444 million or 24% of the total ordi­ now estimated at $57 million. They nary expenditure available for all other include $17 million of British Govern­ Federal Ministries and Departments. ment grants for the development of Details of the major changes in expen­ East Malaysia, some $35 million of diture are to be found in the Treasury reimbursements for British defence Memorandum on the Estimates of equipment, and $5 million in repay­ Ordinary Expenditure for 1967 which ment of loans granted to State Govern­ has been tabled as Command Paper ments and other public authorities. No. 49 of 1966. I would, however, like Apart from this aid from Britain, to draw the attention of the House to significant,grants in kind were received those expenditure heads which impose in the form of Australian defence the greatest strain on our resources. 2597 19 JANUARY 1967 2598

Public debt charges have registered our forces there in order to deal the steepest increase for 1967, rising effectively with incursionists and a from $166.6 million in 1966 to a level growing Communist threat. of $219.6 million in 1967, an increase of $53 million or 31.8%. The public I should also add that the original debt alone accounts for 12% of total bid from the Ministry of Defence came ordinary Budget expenditure in 1967. to $380 million and I would like, at This is due to an increase of $7.9 this stage, to pay a tribute to my million in the interest payable on loans Honourable Colleague, the Deputy and an additional provision of $25 Prime Minister and Minister of million, as compared to $15 million Defence, who, to the dismay of his own in the 1966 Budget, to provide for the military advisers, helped the Treasury discounting of Treasury bills. The to reduce it to the final figure of $250 largest component of public debt million (Applause). Nevertheless, the charges, however, is the $35.5 million 1967 allocation for ordinary defence provided for sinking funds in respect expenditure represents not a decrease, of two 5-year loans which will have but an increase of 5.2% over the 1966 to be redeemed this year. Although Budget provision and constitutes 13.7% the cost of servicing the public debt of ordinary budget expenditure for is rising steadily and absorbs a major 1967. While there is no question that share of ordinary Budget expenditure, a sovereign nation such as ours must it is a liability which is unavoidable provide adequately for our own if we are to implement our develop­ defence, we must also ensure that the ment programme. So long as we borrow cost of maintaining our forces is within to finance income generating projects, our means; otherwise our objective of the cost of servicing these loans will achieving higher living standards for be fully justified by the higher level our people will be jeopardised. of economic activity and the new Although it has not been possible to employment opportunities that will effect any meaningful reduction of result, but as some of these loans are expenditure on defence as a result of also used to finance defence and social the cessation of confrontation, reduc­ projects, the alarming increase in debt tions have, however, been made in charges is of some concern to the other directions. Civil Defence shows a Treasury. decrease of $1.9 million, or 50% of its 1966 estimates, while the Head for the Although the political situation in Ministry of Home Affairs has provided South East Asia has greatly improved, a decrease of $1.7 million as a result and peace has returned to our country of the disbanding of the Vigilante after 3 years of confrontation, it has Corps and the cessation of tenant not been possible to reduce defence registration. These reductions in expen­ expenditure as much as we would wish diture are, however, comparatively in­ to despite the most careful scrutiny. significant. This is not to say that defence expen­ diture in certain sectors has not been The expenditure on education in cut. Honourable Members will be 1967 will amount to $385 million, i.e. aware of the closure of the National $32 million or 9.1% more than the Service Training Centres. Similarly, 1966 Budget provision of $353 million. the establishment of the Local Defence This is by far the largest allocation Corps has been slashed by half and the given to any one Ministry and consti­ intake of this force has been drasti­ tutes 21% of total ordinary Budget ex­ cally reduced. Savings from these penditure. The expenditure on education reductions alone are expected to is not only very large, its rate of annual increase has also been rapid. In 1964, amount to about $34 million a year. expenditure was $283 million, in 1965 We have tried to prune the defence $320 million, and in 1966 $353 million. budget even further but have had to The proposal for 1967 is $385 million. accept the fact that the withdrawal of In 1968 the bill will exceed $400 million! Commonwealth, forces from East The increase in expenditure cannot, of Malaysia has compelled us to augment course, be avoided if existing policies 2599 19 JANUARY 1967 2600 are pursued but in view of the fact nor the salaries of employees of statu- that we are now coming to the limit funds from the Government. If all these of our resources, it will be necessary to tory bodies which obtain most of their reappraise such policies in the course funds from the Government. If all these of 1967 so that the expenditure can be payments are taken into account, and accommodated within a figure which they should be, because they are we can afford. While we would like to salaries and wages paid for out of the provide the best for our children we public purse, the personal emoluments cannot ignore the facts of life and bill will amount to not less than 40% must accept that we can only provide of the total budget. what we can afford. We have reason to believe that in I have touched on the major items at least one major sector of the Public of ordinary Budget expenditure and Service the salaries paid are compar­ the difficulties involved in restraining able to those earned in some of the these expenditures. In my view, one richest countries of the Western World. of our chief troubles in the field of In 1966 alone pay increases cost the Government expenditure is that we are Government an additional $16 million apt to forget that an Eastern economy per annum. The sad part of the situa­ cannot adopt Western standards of tion is that the overwhelming bulk of building construction and furnishing, the Government's additional pay bill among other things. This is, of course, in recent years is not the result of more a relic of our colonial past which we bodies working for it, it is merely the cannot erase too quickly, if we are to result of more pay given to the same remain financially viable. The Costs bodies, and if the public is to be and Standards Sub-committee of the believed, too many of these same National Development Planning Com­ bodies are giving less service for more mittee is looking into this question. If pay. This state of affairs clearly cannot this Sub-Committee does its work pro­ go on indefinitely, and when the perly, and I have every confidence that Report of the Salaries Commission it will, because its composition includes comes to hand later this year, an agoni­ not only Government officials but also zing reappraisal will have to be made, well-known figures drawn from the if I may adopt an expression which University of Malaya and from the has become famous. The time is rapidly private sector of the economy, sub­ approaching when the Government stantial savings should ensue. In so will be faced with either a major far as the Development Budget is retrenchment exercise, or with an over­ concerned, no new expenditure will be all pay cut from top to bottom or with allowed in 1967 unless such expendi­ both these measures. ture can be met from the existing vote. In the course of 1965 and 1966, the Federal Treasury had, on a number of In this connection, I must again occasions, no choice but to issue money emphasise the need for restrain in the from the State Reserve Fund to some matter of pay increases in the public States, a few of which had literally no sector. For example, the bill for per­ money to pay even the current salaries sonal emoluments in the Federal and wages of their employees, and this Government alone has risen to $530 has been one of the reasons for in­ million in 1967, an increase of 8.1% creased Federal Government expendi­ over the 1966 estimate. If we include ture. Some of these States can justify the provision for pensions, which their requests for assistance from the amounts to $60 million, the total figure Federal Government as it was the will be $590 million or 32% of ordi­ decisions of the latter in the matter of nary budget expenditure for 1967. This pay increases which increased their is not all. The amounts shown under financial commitments substantially. personal emoluments do not include There are, however, others which have the salaries of teachers which absorb shown little sense of financing respon­ the bulk of the statutory grants to sibility and which think nothing of schools, nor the wages of employees indulging in deficit financial without in the Industrial and Manual Group, even knowing how their deficits are to 2601 19 JANUARY 1967 2602 be financed. These States have already Members will note from Command been warned privately by me, but I Paper No. 55 of 1966, which gives should now like to state in public detailed information on changes in reve­ what I have stated so often privately, nue, that the yield from motor vehicle and that is that the Federal Govern­ licences and fees is expected to increase ment will not consider any request for by $21 million or 16%, to $150 million help from any State unless the in 1967, as a result partly of the Treasury is satisfied that the State removal in August 1966 of preferential concerned has practised the utmost rates of registration fees on motor economy and done everything it could vehicles. Since ordinary expenditure to help itself by increasing its revenue proposals already total $1,829 million, to the maximum extent possible from the Ordinary Budget will show a deficit the sources available to it. of $144 million if tax rates remain the same, or $94 million if the transfer of 1967 REVENUE BEFORE TAX $50 million to the Development Fund CHANGES is excluded. If no tax changes are made, Ordinary The Development Estimates which Budget revenue for 1967 will total an are tabled separately show a proposed estimated $1,685 million, which is appropriation of $836 million including only $45 million or 2.7% more than $40 million for the Contingencies the estimated outturn for 1966. The Reserve. This compares with an appro­ 1966 figure, however, includes 2 items, priation of $880 million for 1966. namely, the release of cash no longer Actual expenditure in 1967 is, however, required for a number of trust fund estimated to reach $650 million against operations and arrears of 1965 turn­ an estimated outturn of $600 million over tax assessments, which together for 1966. Special receipts credited direct came to $33 million and hence inflated the yield for 1966 unfairly for the to the Development Fund are estimated purpose of comparison. Even if this to amount to $60 million during 1967 once and for all windfall of $33 million compared to $57 million now estimated is excluded from 1966 revenue, the for 1966. On the basis of a develop­ estimated revenue yield for 1967 would ment expenditure outturn of $650 be $78 million or 4.9% more than that million, and allowing for special for the previous year and this would receipts of $60 million, there will be an clearly be unsatisfactory. The main overall deficit of $684 million for 1967 reasons for this are to be found in the if no changes in taxation are made. expectation of a very sharp drop of $56 million or 25% in the yield from To finance the proposed development export duties and of a less buoyant expenditure, it is hoped to raise loans increase in income tax revenue. of $300 million internally and $150 Export duty from rubber is expected million from abroad. This makes a to be $18 million less in 1967 on the total borrowing target of $450 million basis of a 6% increase in production which is $44 million more than the at 1,050,000 tons but an average selling figure reached in 1966. During 1967 it price of only 58 cents per lb. Export is expected that Treasury bills out­ duty from tin is expected to be $40 standing will increase by a further $50 million less in 1967 on the basis of a million while medium and long term total production of 66,000 tons, i.e., loans including conversions will provide about 2,000 tons less than for 1966, the remaining $250 million. Although and an average price of $580 per pikul. a target of $150 million of gross foreign While income tax, including tin profits borrowing may seem over-ambitious tax, is estimated to yield $400 million, an increase of $35 million or about compared to the amount actually 10% more, this would be much less obtained in 1966, which was only $6 than the increase recorded in 1966, and million, it is not impossible of fulfil­ reflects the slower rate of growth in ment as considerable ground work has the gross national product. Honourable already been laid for this purpose. 2603 19 JANUARY 1967 2604

Reasons for the Strain in the Federal comparable figure for 1967, only 5 Government's Financial Position years later, is $360 million. Defence and internal security absorbed 14.6% Let me pause here awhile to enume­ of the total capital and recurrent budget rate the major causes of our increa­ for 1962 but 20.4% for 1967. Most of singly difficult financial position. In the this increase would not have been first place, we have embarked on a necessary if we did not have to defend massive development effort to raise East Malaysia, a thousand miles away. national income in spite of a rapidly increasing population. During the first Fourthly, there is the undertaking to half of this decade we have more than accelerate development in East Malay­ trebled development expenditure in the sia. I well remember the time when we public sector. As Honourable Members were negotiating for the merger of are aware, we have built up our Sarawak and Sabah with the former economic infrastructure to a point Federation of Malaya. We stated as our where what is needed now is largely objective then that we would try to an adequate response from the private provide a total sum of $500 million for sector. We have spent and are conti­ the two States over a period of 5 years. nuing to spend vast sums on rubber I felt then that this target was over- replanting and land settlement. We are ambitious. In the event, we are now not neglecting our social infrastructure providing more than what I regarded either and our education and health as an over-ambitious target less than 4 services have been the notable bene­ short years ago. The financial arrange­ ficiaries of this policy. Social projects ments between the East Malaysian not only require a large capital outlay, States and the Federal Government are their cost of maintenance is a further such that there has been a net flow of burden on the recurrent budget. The funds to these two States of the order public debt service charges incurred in of $50 million in 1964, $80 million in the financing of social projects also 1965, and about $140 million in 1966, mean increased recurrent expenditure after deducting the British development and thus contributes further to the grant of $17 million a year. Further­ strain on current account. more, these amounts do not include the Secondly, there is the problem of cost of the defence of East Malaysia falling commodity prices. Rubber pro­ and other Federal services which are vides the most striking example of the paid for by the Central Government. dilemma which faces us. Although we What we receive from them in the form expect to export 29% more rubber in of tax revenues is insignificant but what 1967 than we did in 1960, the revenue we pour into them in the form of from export duty is estimated at only Federal expenditure is becoming an $55 million for 1967, namely only 28% increasingly onerous burden. of the $196 million collected in 1960. These figures illustrate more vividly Last but by no means least, the than mere words the validity of what introduction of what has been called I have repeatedly maintained, namely, comprehensive lower secondary educa­ that we have to run fast in order to tion will be largely responsible for stand still. This ominous trend also education in 1967 absorbing 18% of the underlines all too clearly, if further total capital and recurrent budget. underlining is still required, the Neither should we forget the pay absolute necessity to intensify research increases given in recent years to major activity, and I sometimes wonder if segments of the Public Service. enough is being done in this field. In other words, not only have we Thirdly, we are faced with the in­ creasing costs of defence, particularly taken on major new commitments in since Malaysia. In 1962, which was the recent years, the almost intolerable year immediately preceding the forma­ strain has arisen because we have taken tion of Malaysia, expenditure on on all these major commitments at the defence, both recurrent and capital, same time, and, as if this were not amounted to a mere $109 million. The enough, while Government expenditure 2605 19 JANUARY 1967 2606

was rising progressively, export earn­ profits, and in this respect, develop­ ings from rubber, and hence Govern­ ment tax is in the nature of a corpora­ ment revenues therefrom, were tumb­ tion tax. ling down as a result of steadily falling prices. This proposal will have the same effect as increasing company tax by 5% to 45% except that, in addition, the Revenue Proposals for 1967 development tax has been designed to widen the tax base and thus ensure a Under these circumstances, the Govern­ minimum contribution from all busi­ ment has no alternative but to impose nesses, when coupled with the proposed for 1967 additional taxation estimated amendment to the Registration of to yield $115 million in 1967. To begin Businesses Ordinance. At present too with, I should like to make it clear, many companies and businesses pay though I feel that this should not be no income tax at all largely because necessary, that it does not give me they are not disclosing their true pro­ pleasure to impose additional taxation, fits. Hence, there is to be a minimum however small. After all, even Finance development tax of $500 per annum Ministers are human {Laughter) and, in the case of a company, and $100 in like all politicians, do not court un­ the case of a taxpayer other than a popularity for the fun of it. I am, company or an individual, i.e. clubs, however, convinced that there is no associations, etc. Where an individual other course open to us if we are to is a partner in one or more businesses, maintain our financial viability and he will pay a minimum of $100 per economic stability. annum in respect of such businesses. Where he participates in more than Inland Revenue one partnership, but his aggregate development income from all his part­ Development Tax nerships would in the ordinary way Before going further, I should make attract a tax of less than $100 per an­ it clear that when giving revenue yield num, his total liability would still be figures estimated yields for a full year $100 per annum. In all other cases, the are meant even though I may not say 5% rule would apply. Individuals who so specifically. I shall first deal with the are not partners and whose development proposals relating to Inland Revenue. income does not exceed $500 per an­ The most important proposal in this num are exempted, but it should be field, in fact, the most important pro­ noted that individual businesses are posal of this Budget, will be the liable to business registration fees, the introduction of a new levy, known as rates of which are to be increased. a development tax, with effect from Legal authority to impose this levy 1967. This new Malaysia-wide tax is is being sought by amending the In­ to be levied at the rate of 5% on come Tax Ordinances of Malaya, "development income" which is defined Sarawak and Sabah. The basis period as income derived from any trade, for this tax will be the same as for business, profession or vocation, and income tax. It will be levied for each also rent from the letting of properties. year of assessment commencing from Income from salaries, wages and pen­ 1st January, 1967, except that in the sions, and dividends and interest, case of taxpayers other than compa­ except where such dividends and interest nies in Sabah, the tax will be levied constitute business income, will not from 1st July, 1967. The income for be liable to this tax. Dividends will not development tax purposes will be be liable since resident company profits ascertained in the same manner as derived from Malaysia would already statutory income under the Income have been subject to development tax, Tax Ordinance, except for gifts of and making dividends liable to this tax money to approved institutions, which would, in effect, mean taxing the same will be deductible in the proportion income twice. Shareholders will not be that development income bears to total given tax credits for development tax income. There will, however, be no paid by resident companies on their deduction for personal allowances in 2607 19 JANUARY 1967 2608 the case of an individual though, as revenue for 1967, and $3.6 million a I have stated earlier, exemption from year, when the rates become fully development tax will be accorded to operative. an individual who is not a partner and whose development income for the Disallowing Certain Payments Relating year of assessment does not exceed to Timber in Income Tax Computa­ $500. There will be the usual provision tions for marginal relief where the income is slightly more than $500. I should It is proposed to amend the relevant add that a taxpayer, the whole of Income Tax Ordinances in order to whose income is exempt from income disallow as deductions, for the purpose tax, and a pioneer company to the of computing income tax, 50% of the extent that the income obtains relief amount of royalty paid or payable to from income tax, will also be exempted a State Government for the extraction from development tax. This levy is of timber, and the whole of any sum, estimated to yield $50 million for 1967. by whatever name called, paid or pay­ able to a person other than a State Government for the use of a licence Business Registration Fees or permit to extract timber from forest We propose to increase the fee on land. Where no such royalty is payable, the registration of a business or on the 50% of the amount of any duty paid issue or renewal of a certificate of or payable on the export of the timber registration in West Malaysia from so extracted will be disallowed as $20 on first registration and $5 for a deductions for income tax purposes. certificate of registration valid for 3 The purpose of this exercise is twofold. years, to $25 on first registration and The disallowance of 50% of the royalty another $25 for every year of opera­ or duty paid to a State Government tion. Although the period of validity will have the effect of increasing signi­ of a certificate of registration will also ficantly the tax yield from an industry be reduced from 3 years to 1 year, which is making very large and easy I should add that this new ruling will profits and which could, therefore, well only affect registrations and renewals afford to make a larger contribution to effected after 31st March, 1967. The the national exchequer. The disallow­ new ruling will not affect current ance we are proposing will apply certificates issued before 1st April, 1967 throughout Malaysia. which will continue to be valid until The other object of this exercise is the end of the period for which they to discourage the growing practice of were issued without payment of any transferring or selling a licence or additional fee. permit for the extraction of timber. This has sometimes been called an The smallest businesses, such as "Ali Baba" form of business. I think rubber small-holders with less than 25 Honourable Members will agree that acres, are exempt from registration. this practice is undesirable in any case. Apart from businesses like these, how­ Furthermore, the Central Government ever, we think that it will be generally stands to lose a considerable amount of agreed that a business which cannot revenue if payments of this nature afford to pay $25 per annum cannot continue to be treated as deductible be very efficient, and the country will expenses for income tax purposes. This not be much poorer even if it ceases measure should benefit the Revenue to exist merely because it cannot afford by $4.5 million a year. to contribute this paltry sum to the national weal. In this connection, it is interesting to note that Sarawak and Minor Amendments to the Income Tax Sabah impose heavier fees under their Ordinances Business, Professions and Trade Licen­ The opportunity will be taken to sing Ordinances. The proposed in­ make a number of minor amendments creases in West Malaysian business to the various Income Tax Ordinances. registration fees are estimated to For Sabah the time limit for objections produce an additional $1.2 million of and payment of tax and penalty is to 2609 19 JANUARY 1967 2610 be reduced from the existing grace Secondly, the assessment will be period of 2 months to 1 month to fall based on the income of the preceding in line with the practice in West year throughout, without the old Malaysia and Sarawak. At present a commencing and cessation complica­ penalty for late payment equal to 5% tions. There will, in the absence of a of the amount of tax payable is double taxation agreement, be provi­ exigible when the tax is not paid sion in the new Act for tax credit within the prescribed period of 1 month relief to be given unilaterally in respect from the date of issue of the notice of any foreign tax paid. This change of assessment. It is felt that the from a "derivation basis" to a "world penalty throughout Malaysia should be scope basis" will not only give us a doubled i.e. increased to 10% of the wider tax base and bring in much amount of tax payable, because in needed additional revenue, it will also recent years there has been a marked be more equitable as it will remove the incentive which exists at present to increase in the amount of tax arrears the resident to invest his capital abroad and in the number of civil suits that and not remit to this country the had to be instituted for the purpose income so obtained. This practice of recovering overdue tax. It is, there­ clearly does not help the national inte­ fore, clear that the existing rate is not rest and should be discouraged. a sufficient deterent and should be increased. Apart from the revenue Stamp Duty Rates aspects, excessive tax arrears and civil suits consume an inordinate amount of It is proposed to harmonise the rates time of the senior officers of the of stamp duty throughout Malaysia Department which could be spent in while taking opportunity, at the same more productive work. Section 22C of time, to effect a number of minor revi­ the West Malaysian Ordinance will be sions. A separate. Bill will be introduced for this purpose and the new rate will be repealed as it is now obsolete, dealing effective as from 1st April, 1967. For as it does with the treatment of example, the duty on conveyances, rehabilitation expenditures on planta­ assignments and transfers is 2% in tions and mines in the immediate Sabah and 1 % in the rest of the Malay­ post-war years. sia. It will be harmonised at 1%. The duty on cheques will remain the same Unified Malaysian Income Tax Act at 10 cents per cheque. The duty on receipts is 10 cents in East Malaysia I referred in my last Budget speech and 6 cents in West Malaysia. It will to the proposed introduction of a new be harmonised at 10 cents (Laughter). unified Income Tax Act for the whole The increase in revenue from these of Malaysia to replace the separate and minor revisions is estimated at $2 different Ordinances of the three com­ million a year. The proposed amend­ ponent regions. The new Act is in its ments to the various Stamp Duty final stage of preparation and it is Ordinances will also enable instruments hoped that it will be possible for which have paid duty in one part of this House to consider it some time in Malaysia to be moved to any other the middle of 1967 so that it can come part of Malaysia without being liable to additional duty. It is also hoped to into force as from 1st January, 1968. improve the collection machinery The new law will effect several major during 1967. changes but I shall refer to only two of the most important. Firstly, resi­ Repeal of Turnover Tax dents, as defined in the Act, will be For a variety of reasons, we now assessed to tax on their world income. propose to repeal turnover tax This means that the resident will, from (Applause) and substitute it (Laughter) 1968, be assessed on his income, with a new levy which I shall deal with wherever it arises, whether in Malay­ when outlining the revenue proposals sia or outside it, and whether or not relating to the Department of Customs it is remitted to this country. and Excise. To effect this proposal, 2611 19 JANUARY 1967 2612 the Turnover Tax Act, 1965 is to be turnover tax. Honourable Members will repealed with effect from 1st January, note that since the introduction of the 1967, but without affecting the right original form of turnover tax, chambers of the Comptroller or Commissioner of commerce in many parts of the of Inland Revenue to assess and to country have asked for a straight levy enforce payment of turnover tax for on imports as one which was simple, the years of assessment 1965 and 1966 easy to collect and did not involve which remain to be assessed or extra and complicated accounting on collected as at the date of repeal of the part of taxpayers. It is, therefore, the Act. to be hoped that this proposal, which is in answer to their prayers, and which Yield from Proposals Relating to In­ is estimated to yield $40 million a land Revenue year, will be warmly and universally welcomed by the business community The Inland Revenue proposals which (Laughter). I have outlined are estimated to yield $57.7 million in 1967, but if account Goods exempted from Customs is taken of the repeal of turnover tax, duties as specified under various which is estimated to bring in $30 exemption orders already made, goods million annually, the net yield will be imported directly by the Federal and $27.7 million a year. State Governments and by the Diplo­ matic Corps, goods in transit and in Customs and Excise bond, goods of Malaysian origin when moving from one customs area to Surtax on Imports another within Malaysia, rice, salt, Let me turn now to the proposals crude petroleum and certain items of relating to Customs and Excise. In import whose duty levels have been view of the repeal of turnover tax, to bound as a result of trade agreements which I have already referred, it will with Australia and New Zealand, will clearly be necessary to substitute a not be liable to surtax. Rice and salt levy which could yield a comparable are exempted since they are prime volume of revenue. We propose to do necessities of life, while in the case of this by imposing a surtax at the rate crude petroleum, the Government has of 2% on all imports, including given an undertaking not to levy duties imports into Penang Island (Laughter). on such imports. In any case, the In regard to liability to turnover tax, treatment proposed for the last named imports into Penang Island were treated item will provide a margin of protec­ exactly like imports into the rest of tion for internally refined petroleum Malaysia and it is, therefore, felt that vis-a-vis imported refined petroleum it is only fair, under such circum­ which will be liable to surtax. Con­ stances, for imports into Penang Island sultations will be held with the Govern­ to attract surtax as well. The applica­ ments of Australia and New Zealand tion of the surtax would hence be on the import items bound as a result Malaysia-wide, apart from Labuan, for of trade agreements with them. These which no legal provisions for the include cheese, wheat flour and wheat, imposition of surtax exist at the bran and pollard, tallow, meat, milk, moment. butter, newsprint in rolls and zinc. I should add that surtax will be The exemptions proposed for these levied on the value of imports, exclu­ bound items will be extended to similar ding import duty, whereas turnover imports from all sources. The reasons tax, which it is meant to replace, was for the other exemptions announced levied on sale prices which included are self-evident and I need not go into any import duties that might have been them. I should also state that when paid. Consequently, surtax will be import duty drawbacks are given, such slightly less burdensome than turnover drawbacks will be extended to include tax. Another advantage of this new surtax as well, and where specified levy is that it will apply to all imports imports are exempted from import including those retained by the impor­ duty, they will also be exempted from ter which hitherto were exempt from surtax. 2613 19 JANUARY 1967 2614

Import Duties and Excise In February, 1966 the Government The Orders implementing the various announced its intention to impose an tariff changes should shortly be in the import duty in West Malaysia at an hands of Honourable Members if they ultimate rate of 30% for completely have not been distributed already. I built up vehicles (subject to examina­ shall, therefore, only refer to the major tion by the Tariff Advisory Board that changes in this speech. such levels would be appropriate) within 18 months from the date of such The most important duty change announcement, as a protective measure, from the revenue point of view is the in view of the likely establishment of harmonisation of the rates of import motor assembly plants in West Malay­ duty and excise on high speed diesel sia. For a start, it is, therefore, con­ oil (T.C. 332 301 and 332 309) at the sidered appropriate to impose a 5% Sarawak rate of 20 cents per gallon. import duty on completely built up This means an increase of 12 cents in vehicles imported into West Malaysia. West Malaysia and 11 cents in Sabah. These proposals will also have the At the same time, the rates for heavy advantage of bringing in much needed oil (T.C. 332 400) are harmonised at revenue in 1967, estimated at $8 the existing Sabah rate of 7 cents per million. gallon. This means a reduction for Sarawak of 8 cents per gallon, and a As excise rates for both liquor and fractional increase in West Malaysia tobacco have already been harmonised, by about 0.3 cent per gallon. It is it is now proposed to harmonise their estimated that these changes will in­ import duty rates as well. In addition, crease revenue by $27.4 million. the rate of excise on beer and stout In order to ensure that the increase throughout Malaysia will be increased in duties on high speed diesel oil will by 40 cents per gallon to $5.20 per gallon. There is reason to believe that not affect public transport like buses our domestic breweries are doing well and taxis, on which the lower income enough to be able to afford this duty groups largely rely, the engine tax on increase. The margin of protection, diesel buses which now ranges from however, remains the same, as Com­ $110 to $280 per month will, as from monwealth preference on beer and tomorrow, be reduced to between $80 stout abolished last year effectively in­ and $220 per month, (Applause) depen­ creased their margin of protection by ding on the size of the engine. Taxis the same figure of 40 cents per gallon which have been paying passenger tax which was the difference between the at the rate of $5 per passenger per full rate and the preferential rate. month will no longer have to pay this These revised rates of duty on liquor tax as from 20th January, 1967. The and tobacco are expected to yield $4.8 million of additional revenue. exemption of taxis from passenger tax should have a beneficial side effect in We are also repealing the excise duty that it will reduce the financial incen­ on one item of domestic manufacture tive to operate pirate taxis which do and revising the duty rates for a num­ not pay passenger tax but which cannot ber of import items which individually escape paying duty on diesel oil. These have insignificant revenue implications, two concessions will cost the revenue though their combined effect will result $3.3 million per year and should offset in additional revenue of $3 million. I the increased costs which would be do not intend to refer to every one of the incurred by buses and taxis having to items involved in duty changes, as this pay more duty on their diesel fuel. It would take too much time, and are should also be noted that the changes not of general interest. Those who are in duty rates on diesel oil should not interested can study the Customs affect the operations of the Malayan Orders which have been issued and Railway, electrical undertakings, tin which give full particulars. I shall, mines and other industries which use however, refer to those changes which heavy fuel oils. are more than ordinary interest. 2615 19 JANUARY 1967 2616

Import duties on 17 items are sugar from abroad rather than from a repealed because they are little more refinery in the same State only a few than irritants in the sense that they miles away! Since then, this domestic neither bring significant revenue nor are refinery has been able to sell its pro­ they necessary for protective purposes. duct on the Island only because the They include duties on such goods as Government assisted it by granting it full dried guts of animals, natural sausage drawback of duty paid on raw sugar casing, lard, wool, grease, carbon black, used in the production of refined sugar signalling glassware and optical ele­ sold in the Island. For the same reason, ments, cameras specially designed for it is only right that matches manufac­ medical and surgical purposes, and so tured in West Malaysia should be able on. The duties on shotgun cartridges, to find a market on Penang Island also. other forms of firearm ammunition, The extension of the duty on completely revolvers and pistols are repealed in built up motor vehicles to Penang accordance with our policy not to tax Island has been specifically agreed to goods used for sporting purposes. To by the State Government. Honourable reduce the incentive to smuggle, the Members should note that the extension rates of duty on silver and platinum of these additional duties to Penang are reduced from 25% to 10% ad Island will not affect either its entrepot valorem. The lower rate also happens or its tourist trade, but they will yield to be the existing rate of duty on gold. $3.7 million of additional revenue. I should also add that the Government Rates of import duty on cameras, will permit the establishment of bonded cinematographic equipment and allied warehouse facilities to accommodate goods, woods and furniture, essential the imports involved in the entrepot oils, perfumes and flavouring materials, trade so that such imports will not pineapples, synthetic and reclaimed attract the duties that will now have to rubber, pyrotechnic articles, i.e. fire be paid. I should, however, make it crackers, will also be harmonised clear that such duty exemption will throughout Malaysia. only apply to the goods involved in A duty of 30 cents per lb is to be this trade. imposed on fowls and poultry in West Malaysia only to encourage and protect Export Duties domestic production. The duty on edible birds' nests is to be harmonised In regard to export duties, the changes at $1 per lb and the import duties on to be effected are relatively minor. coffee berries and beans in West Export duties on 31 items of foodstuffs Malaysia are to be raised and harmo­ levied at rates ranging from 5% to nised at the levels prevailing in East 10% in East Malaysia are repealed. Malaysia. The duty on kapok is to be These include items like fish, oysters, harmonised at $224 per ton as a pro­ abalone and even blachan. Export tective measure, and for the same duties on coconuts and coconut pro­ reason, the duty on absorbent lint, ducts, jelutong and rattans are harmo­ gauze and bandages will be harmonised nised at rates which should provide at 10% ad valorem. Finally, the excise some incentive for domestic processing. on playing cards is to be repealed since The most important change here is the the revenue yield is small and the one imposition of export duty at the rate factory we have is not doing well. of 10% ad valorem on sawlogs and veneer logs exported from West Under a separate Customs Order, we Malaysia. The Government sees no are extending the West Malaysian rates reason why the Malaysian timber of import duty on sugar, matches, industry should not be encouraged to cigarette lighters and completely built process such logs. These exports duty up motor vehicles to Penang Island. changes are expected to yield $1 million Firstly, this can be seen as a revenue of additional revenue during 1967. measure. Secondly, this has protective implications. For example, it was Customs duty changes, including the anomalous that until a few months ago new surtax, should yield $87.9 million Penang Island should get its refined of additional revenue in a full year. 2617 19 JANUARY 1967 2618 Road Transport Incentives for Manufacturing Industry Apart from the reduction of engine and Exports tax on diesel buses and the abolition In my Budget speech last year, I of the passenger tax in respect of taxis, announced that the Government had another major change proposed in the already accepted the principle of 100% field of road transport is the increase drawback of duties on imported raw of the ad valorem registration fee on materials utilised in the manufacture of motor cycles and scooters from 15% goods intended for export. To assist to 20% ad valorem, compared with a exports further, the Government has rate of 25% for passenger motor agreed in principle to the following vehicles. This increase is dictated not incentives: only by revenue considerations, it is also a measure which should encourage (a) Expenses incurred by approved the domestic assembly of these vehicles. Malaysian resident companies For 1967, the benefit to the Revenue is on export promotion will be estimated at $1.4 million. eligible for double deduction for income tax purposes. This con­ In addition, the Minister of Trans­ cession will be on a year to year port is revising the rates of 6 minor basis, subject to satisfactory ex­ fees to keep them in line with other port performance by Malaysian fees. He is also raising the fees on industries; and school buses carrying more than 20 (b) Special depreciation allowances passengers to discourage buses larger for machinery and equipment than these from carrying school will be granted to factories which children. These minor changes and require to modernise their produc­ enhanced fees are estimated to increase tion techniques. revenue by only $300,000 a year. In addition, the Government is considering the setting up of export Aerodrome Service Fees credit and insurance schemes. The At the moment, passengers going on export drive should also be greatly international flights other than to assisted by the posting of Trade Singapore, have to pay $3 each in the Commissioners to the countries of the shape of an aerodrome service fee. It Middle East and our neighbours in is proposed to increase, as from 1st South East Asia, particularly those March, 1967, the fee for international which do not produce the manufactured flights other than to Singapore to $5 goods which we are producing. It is per passenger. A flight to Singapore clear that it is to these countries that will attract $2 per passenger while we must look for the expansion of our domestic flights will cost $1 per export markets rather than to the passenger. I am sure Honourable countries of the Western world where, Members are aware that many count­ for obvious reasons, our goods are not ries impose this form of tax, and it is, likely to be competitive either in terms therefore, only right that a Govern­ of price or quality. ment which has incurred considerable capital expenditure in providing up-to- On top of all this, a Government date facilities for air travel, apart from Committee which has been studying the heavy costs of maintaining them, the question of the incentives that are should receive a rather larger return considered necessary to stimulate a for providing such facilities. Further, higher rate of investment in the passengers who travel by air should economy, especially in the field of not be more lightly taxed than those who travel by road and rail, and in industrial development and agri­ any case those who travel by air are cultural diversification, has now com­ normally much better off financially pleted its report. Although it would be than those who travel by other means of premature to anticipate the Govern­ transport. These changes are estimated ment's decisions on all its recommen­ to yield $1 million during 1967. dations, it would not be premature to 2619 19 JANUARY 1967 2620

say that some are likely to be accept­ hearings on a total of 132 items and able with or without modification. I sub-items. In addition, an Action shall briefly refer to two which fall in Committee on Tariffs and Industrial the latter category. Development has been established for the purpose of processing applications In the first place, development for Government assistance which allowances on qualifying buildings and require urgent action and early deci­ plant have been recommended. The sion. Last but by no means least, the rate of allowance may be varied accor­ Government will establish an Export ding to the need to develop a particular Promotion Council. Honourable Mem­ area or to encourage the setting up of bers will, I think, agree that the new industries which are less attractive to a measures I have announced should potential investor, or to encourage a accelerate industrial development and greater degree of utilisation of domestic assist exports greatly. In any case, the raw materials. The development Government will consult representa­ allowances will be additional to any tives of the industries concerned on capital allowances given, and will not them. be withdrawn when the qualifying asset is sold. This relief will be supplemen­ To generate additional employment tary to that given under our pioneer opportunities and income, attention industry legislation and will be given to has also been given to the possibilities those enterprises which cannot in the of processing more of our own raw ordinary way qualify for pioneer status. materials and handling and shipping When the enterprise incurs a loss, the more of our own exports. I have relief can be carried forward and set already referred to the imposition of off against future profits. an export duty of 10% ad valorem on logs exported from West Malaysia. In Secondly, accelerated depreciation addition, the rates of import duty on allowances have been recommended. I furniture and other wood manufactures do not need to dwell at length on their are being raised to 25% and 20% benefits as they are self-evident. The respectively throughout Malaysia. The main advantage to be derived there­ Government is ready to consider addi­ from is that this concession enables the tional fiscal and other incentives for investor to recover his capital outlay in the establishment and expansion of a shorter period and this permits him integrated timber industries. Malayan to have more funds available for both Railway will also be ready to grant working capital and further expansion. special rates for the carriage of timber These and other recommendations logs to Kuala Lumpur, Klang, and the which have been made in the report Port Swettenham area, and to other will be considered by the Government areas whenever and wherever saw- and it is hoped to reach decisions on milling capacity is established along them as soon as possible. Their imple­ any of its routes. I have also referred mentation will require the repeal of the earlier to the rationalisation of export existing Pioneer Industries (Relief from duty on fresh coconuts and coconut Income Tax) Ordinance, 1958 and the products, jelutong and rattan to enactment of a new law which, it has encourage domestic processing of these been suggested, should be entitled raw materials. "Investment Incentives Act", and which will incorporate the essential provisions Further, the Government has decided of the existing pioneer industry to impose an additional export duty legislation. of 2 cents a lb on all loose rubber exported from West Malaysia on and Tariff protection is, of course, one of after 1st April, 1967. There is no our most potent weapons. It is the reason at all why such rubber cannot Government's intention to use this be packed in this country, thereby weapon more extensively. This will increasing employment opportunities become increasingly evident as more for our own people. After all, we have items of the Malaysian Tariff Code are the expertise and it is only a question considered by the Tariff Advisory of providing more facilities and this Board which, during 1966 alone, held should be possible within the next 2 2621 19 JANUARY 1967 2622 months or so. It has also been noted schools, more hospitals and the like, that rubber from Kelantan, Trengganu and, above all, it will not be "You and Pahang does not at present flow to should not do this" and You should Port Swettenham to be exported. Since not do that", and so on. If there is to that port has the necessary capacity and be any criticism, and it is right that should be the natural outlet for there should be, I hope it will not be rubber originating from these States, destructive criticism, but constructive the Government has decided, with the advice as to what we should do to concurrence of the relevant authorities, make ends meet. I, of course, con­ to effect the following changes, also as tinually receive numerous suggestions from 1st April, 1967: on the spending of money but few, if Firstly, Malayan Railway will intro­ any, suggestions on how to get it in duce special new rates for the adequate quantity {Laughter). As for carriage of dry rubber from these certain sections of the business com­ States to Port Swettenham which munity, the stock response is "So long will be about $2 a ton less than as you do not tax me, you can do any­ existing rates; simultaneously all thing you like; so long as I am spared, other existing special rates for this the rest of the country is not my concern". traffic will be cancelled; and Secondly, the Port Swettenham The Government on its part will do Authority will reduce its port everything it can to economise. We charges on dry rubber, the prin­ will have to continue to cut out the cipal reduction being one amoun­ frills, we will have to keep on reducing ting to $1.30 per ton. non-essential expenditure, if not elimi­ Those interested in the details of nate it altogether, and last but by no these rate changes will be able to obtain means least, we must continue to cut all the information they require from out waste, as it is also clear that taxa­ Malayan Railway and the Port tion exercises of the magnitude pro­ Swettenham Authority. To secure the posed in this Budget cannot be imposed fullest co-operation of the rubber trade, every year. The size of the task facing my Honourable colleague, the Minister us can be more readily grasped if we of Commerce and Industry and I will remember that East Malaysia is more meet representatives of the trade and than 50% larger in area than West Industry soon in connection with these Malaysia and separated from it by measures. about one thousand miles of water. Conclusion A comparable situation would be the United States of America merging with It is clear that the task ahead of us the South American continent. Under is formidable. When we bear in mind such circumstances, the former would that in spite of steadily falling rubber have to accelerate the expansion of her prices, and the health of our economy armed forces and economic and social is so heavily dependent on the main­ development in South America at the tenance of a stable price for this same time. I venture to suggest that commodity, we have still managed to even the mighty U.S.A. would feel the accelerate the pace of economic and financial strain of such a vast double social development throughout Malay­ undertaking. At the moment the task sia, and in the case of East Malaysia, of developing and defending East to do better than what we promised Malaysia lies largely on the shoulders in the Inter-Governmental Committee of West Malaysia. Report, there is cause for some sober satisfaction. What is required from all To add to our difficulties, we are of us is a sense of responsibility. I, trying to make up for the neglect of therefore, hope that the response to centuries in one generation. In about this Budget, both inside and outside 80,000 sq. miles of territory, there is not this House, will not be blind opposi­ a single trunk road, in the sense that tion to the additional tax measures pro­ there are no roads outside the main posed, it will not be requests for more towns and villages, and there is no social services in the form of more railway worthy of the name. As if 2623 19 JANUARY 1967 2624

this were not enough, the Sarawak are extremely lightly taxed, neither Communist Organisation is superbly would it be correct to say that it puts efficient and extremely well directed us on a par with those countries which and is, in fact, a credit to the world are heavily taxed. Considering the in­ Communist movement. These were the creasing scale of benefits which we liabilities which we inherited in 1963 have provided for our people, I would when Malaysia was formed! say that they have received a fair What we cannot afford to forget is return for their money. that we cannot accelerate economic It is the future which counts. We development in West Malaysia, provide must make up our minds that we are for the development and defence of going in the right direction, and if we East Malaysia, continue with our com­ are satisfied on this score, we must also prehensive schools policy, and give satisfy ourselves that the pace is neither increased pay to the Public Service, too fast nor too slow. We must then all at the same time and all in the face ensure that we are receiving full value of stagnant export earnings. This is for money spent and if we are satisfied clearly a physical impossibility. We can on this point also, then we must be afford two, and with a bit of luck, we prepared to bear the cost. That cost could even afford three of these targets, clearly entails sacrifice and toil to-day but we obviously cannot afford four at in order to ensure a better tomorrow. the same time. In other words, we have We cannot afford to mortgage our to make a choice. Economic develop­ economic future by wasting scarce ment in West Malaysia must clearly resources on matters which are not go on, because otherwise there is no essential either for our economic hope for the future. We must provide growth or for national survival. To do for the development and defence of this we must be able to distinguish East Malaysia because we have no between what is merely desirable and other choice. We can, however, choose what is absolutely necessary. Above between comprehensive schools and all, let us remember that the law of increased pay for the Public Service. Nature decrees that nothing worth­ With some strain, we might be able to while is achieved without sacrifice. So afford one or the other but we simply long as the sacrifices asked for are cannot afford both. In short, we must commensurate with the ability to bear have an order of priorities and it is them, and so long as the Government for this House and this country to is prepared to play its part, the people choose. of this country too must play their part. We cannot do more and they At the same time, it is also well to cannot ask for more (Applause). bear in mind that in spite of the addi­ tional taxation measures proposed in this Budget, this country is by no Sir, I beg to move. means overtaxed. In 1967, Federal taxa­ tion as a percentage of gross national The Deputy Prime Minister (Tun product would come to 16.5%. In 1956, Haji Abdul Razak): Sir, I beg to the year before independence, it was second the motion. 15.3%. In 1960, i.e. at the beginning of the Second Malayan Five Years Mr (Deputy) Speaker: The meeting Plan, the comparable figure was 16%. is adjoured till 9.30 a.m. tomorrow. I will not say that the 1967 figure puts us in the category of countries which Adjourned at 5.00 p.m.

13797—561—4-3-68.