Chua Kheng Wee Louis
Singapore
“It is my sincere hope that the passage of this Bill does not mark the end of Singapore's vision of a share-owning society, but rather the beginning of a new chapter – one in which we seriously revisit how Singaporeans and the Government can invest together, participating fairly and directly in the nation's wealth creation, and achieving w…”
“Thank you, Deputy Speaker. Just three quick supplementary questions for the Senior Minister of State. First, I think the Senior Minister of State talks about gaining access to the best tools available globally.”
“Thank you, Speaker. Just two quick supplementary questions. The first is on the guide that the Senior Parliamentary Secretary shared just now.”
“Thank you, Chairman. Just one clarification for Ministers on the EV chargers. I think the MOT has previously said that we are looking at three to 12 charging points per HDB carpark by 2025, but my question is not so much on the deadline, but more in terms of the number of chargers that can be supported, because in most of the multi-storey…”
“Thank you, Chairman. Just two clarifications for Minister Chee. The first is on the review of the EC policy – any timeline around that? Second is in terms of how the Minister talked about building a robust supply pipeline and given that we are now in March 2026.”
“Chairman, given the increasing unaffordability of ECs in the markets today, I urge the MND to seriously re-think the current EC model and to consider upstream policies to bring the price of ECs into a range that will suit their original intentions. With affordability and equitable access being key tenets to underpin the new EC model.”
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“It is thus important that we remain open-minded and forward-looking in addressing the opportunities and risks in this rapidly evolving area of finance, facilitate the responsible development of the industry here in Singapore while proactively addressing any threats to financial stability. With that, I support the Bill.”
“MAS has already implemented the so-called “travel rule” since early 2020, and even though many DPT service providers may still be operating under an exemption, many have already progressively requested for originator and beneficiary information to be provided. However, I note that under the MAS Notice PSN02 Prevention of Money Laundering and Countering the Financing of Terrorism – Digital Payment Token Service, value transfers exceeding S$1,500 would require personally identifiable information, such as residential addresses, identity card numbers and so on. Would MAS end up being inundated with transactional data, given the low threshold, and how would MAS manage the risks of having questionable transactions slip through the cracks versus being overwhelmed with data which could end up expending resources to investigate too many suspicious transactions which were flagged out, which could otherwise turn out to be legitimate? To further clarify, would major payment institutions licensed and regulated under the Payment Services Act be required to be separately licensed once again, now that the FSM Bill will regulate all virtual asset service providers created in Singapore that provide such services outside of Singapore? At the Singapore FinTech Festival in November last year, MAS Managing Director Ravi Menon spoke about crypto-based activities, noting that “not to get into this game, I think risks Singapore being left behind. Getting early into that game means we can have a headstart and better understand its potential benefits as well as its risks.” I would argue that we had a head start, but many other financial centres across the world are fast catching up or arguably have already caught up.”
“Ironic in my view, given that it can be a product with 10 times leverage, with risks of a complete wipe-out of the investment within a short period of time and which is significantly riskier than an equivalent unleveraged financial instrument. I do not think that having a standard boiler plate, “this advertisement has not been reviewed by the Monetary Authority of Singapore” and long paragraphs of text in fine print are sufficient measures for financial institutions to absolve themselves of their responsibilities towards retail investors. But perhaps advertising by DPT service providers could also come within the scope of the fair and balanced advertising and other advertising restrictions, as covered under the securities and futures regulations and financial advisers’ regulations, with the rules holistically reviewed and finetuned collectively to ensure that all financial market participants do not merely present a one-sided view of potential investment products in their advertisements. Importantly, more should be done in terms of continuing financial education and improving the financial literacy of the population at large and to help everyone understand the underlying risks and rewards of their investments, be it in Ethereum or equities. Lastly, no discussion on cryptocurrencies is complete without an appreciation of the money laundering and terrorist financing risks it presents. To this end, I note that the Bill will align the scope of digital token services to the enhanced Financial Action Task Force (FATF) standards.”
“In the MAS 2020 Licencing and Registration Report for Capital Markets Intermediaries, I note that MAS is committed to a four-month timeframe for processing corporate licence and registration applications with the mean and median time taken not too far off from the four-month service standard. Similarly, I hope more resources can be devoted to ensuring that we help to support and facilitate the responsible development of the virtual asset industry in Singapore. Next, I would like to touch on the ban on marketing and advertising by service providers of DPTs as announced by MAS in January this year. I wonder whether an outright ban unique to DPTs is an appropriate means of protecting consumers and consistent with the approach in which MAS regulates the advertising of other investment products and services. I acknowledge and agree with MAS' view that the trading of cryptocurrencies is highly risky and not suitable for the general public per se. However, single stock investing is also highly risky in my view. Grab and SEA, for example, among Singapore’s largest companies by market cap, saw their share prices decline 40% to 50% in the year-to-date alone, with SEA down 60% to 70% from its 52-week high. What I am most concerned with, however, are complex derivative products available to retail investors that even I myself struggle to understand, such as Contracts for Difference (CFDs), which, in itself, is an instrument which is banned for sale to retail investors in the United States and Hong Kong. I recall hearing ads for CFDs on the radio just a few months ago and even reading branded content on The Straits Times about how these products can supposedly allow investors to manage trading risks.”
“Subsequently, in response to my Parliamentary Question in July 2021, it was noted that since the commencement of the Payment Services Act, MAS had received over 480 licence applications. However, back then, MAS had not issued any licence to Digital Payment Tokens (DPT) service providers. I note several in-principle approvals since then, such as that for DBS, Independent Reserve, FOMO Pay, Coinhako, TripleA, Paxos, BTC and Hodlnaut. At last count though, I still see 163 companies that are currently on the exemption list. What then is holding the MAS back on approvals or rejections given their wealth of experience gained over the last two years? The world's largest crypto exchange, Binance, announced in December last year that it has withdrawn its licence application to operate here in Singapore and has since shut down its operations here in February. Shortly after, in March last month, the company was awarded a virtual asset licence from Dubai's recently formed virtual asset regulatory authority and will be helping to set up an international virtual asset ecosystem in Dubai and assist with the development of virtual asset regulations. While it is debatable whether it is a loss for Singapore per se, to be clear, I am not calling for licences to be hastily awarded, but we also need to recognise that there are firms still allowed to operate under a transitional exemption, regardless of their merits, until their applications are approved or rejected. Hence, getting their applications approved or rejected expeditiously not only gets rid of potential bad actors, but allows responsible market players to move forward with their business plans, entrench their operations here in Singapore for the long term and contribute to the vibrancy and innovation in the sector here.”
“Project Ubin, for example, was announced all the way back in November 2016 to explore the use of blockchain and distributed ledger technology. The final phase of the project concluded in July 2020, but, as pointed out by my colleague, Assoc Prof Jamus Lim during the Committee of Supply debates earlier this year, after expending significant effort and resources to better understand the nature, function and practical operation surrounding the possibility of a digital currency issued by our central bank, the conclusion is that there is no pressing need for its issuance at this time. This was despite several advantages to moving early on the issuance, such as crowding out alternatives, such as unbacked and inherently volatile digital private currencies, through stable, well-designed Central Bank Digital Currencies (CBDCs), allow for the application of more innovative monetary policy, especially with regard to disinflation, and help reduce the incidence of counterfeiting and illicit activities. As noted in the White House factsheet on US President Biden's Executive Order on ensuring responsible development of digital assets, over 100 countries today are exploring or piloting CBDCs. And, in China, after launching the digital Yuan domestically, such digital Yuan payment services were also introduced to visitors of the recent Beijing Winter Olympics. Given the early stages of most central banks' work into CBDCs, this should be one area in which Singapore can demonstrate global leadership in. A related point is one which I have raised back in 2020 about the progress made in assessing payment service provider applications and the slow pace at which approvals were given.”
“Just ask any influencer who spends most of his or her time in the digital world, be it Facebook, Instagram or even TikTok. Virtual assets are not solely about individuals buying an NFT to display on their personal social media profiles, however. The chairman of BlackRock, the world's largest asset manager, noted in his recent letter to shareholders that "BlackRock is studying digital currencies, stablecoins and the underlying technologies to understand how they can help us serve our clients". This was also the same person who called bitcoin "an index of money laundering." At the same time, the Ukraine-Russia conflict also saw the Ukraine government conducting fundraising via cryptocurrencies and NFTs and with Russia also supposedly considering accepting bitcoin as payment for its oil and gas exports. The bottom line is that in the modern world, purely virtual creations can, indeed, have value, so long as enough people accept that to be the case. If 2020 was seen by the industry players as the year cryptocurrencies were institutionalised, then 2022 is perhaps the year when there is growing recognition of the trajectory of growth in the interconnectedness and skill of digital assets and, certainly, its corresponding implications for global financial stability. So, the first point I would like to raise is that Singapore and, by extension, MAS as the financial regulator, should strive to take a market leadership role and move expeditiously to facilitate the responsible development of the still nascent but rapidly growing virtual assets industry. By and large, I do agree that MAS has been proactive in studying the development of this industry very early on.”
“Mdm Deputy Speaker, I would first like to declare my interest as an employee of a financial institution here in Singapore and I also hold a diversified portfolio which includes cryptocurrencies. One of the key aspects of the Financial Services and Markets Bill relates to enhancing the regulation of virtual asset service providers for money laundering and terrorist financing. In my speech today, I would like to touch on the topic of virtual assets and how this rapidly evolving area of finance is increasingly gaining prominence and relevance globally and, therefore, how Singapore can continue to evolve our approach to stay ahead as a key financial centre of the world. Two years ago, in late 2020, I spoke about the Payment Services (Amendment) Bill, where I noted then that bitcoin was at a record high of around US$34,000, having risen almost fourfold over the course of 2020, far surpassing the previous high of around $19,800 set around December 2017, just before its precipitous crash in the months after. Many have called bitcoin and cryptocurrencies a massive bubble then and some still do now. Fast forward to today, bitcoin is now at or around US$46,000 but not without reaching an all-time high of almost $69,000 and a low of $29,000 just within the last 52 weeks alone. Just as how cryptocurrencies are not solely about bitcoin and its rise and fall, virtual assets are not just about cryptocurrencies, and blockchain technology does not just apply to virtual assets. The term "virtual" conveys the sense that it is somehow not as real as, say, physical assets. But today, one's digital identity and persona are perhaps even more significant than those in the physical world.”
“Thank you, Mr Speaker. I have got two follow-up questions. One, for Finance Minister Lawrence Wong, is in relation to the Parliamentary Question which I had in terms of the fuel excise duties. Does the $900-plus million that was mentioned relate to all petroleum products or is it only for petrol and diesel which are sold to end-consumers at the pump, since we do have quite a substantial petrochemical industry as a whole? The second question is, again, in relation to fuel prices, but probably more for Minister Tan See Leng. If we look at Brent crude prices, the last time, it was above US$100 a barrel was sometime in 2012 to 2014. Back then, 95 Petrol was going at about $2.20 to $2.40. But, today, when Brent is above US$100 again, people see that the pump prices are now about $3. So, can the Minister share the structural factors that actually contributed to these higher pump prices, just so that everyone can have a better sense of what are the contributing factors to these 20% to 40% higher pump prices relative to Brent crude prices?”
“I understand that the police will crack down on any syndicate that takes the advantage to engage in illegal gambling activities. However, I also hope that we can provide more support and protection for families that need help, to prevent their family member from turning to problem gambling or pathological gambling from social gambling. (In English): I support the Bill. 2.31 pm”
“At the same time, while it is not the Government's intention to babysit individual behaviours at home and most social gambling involve low quantum, low-risk bets placed on a recreational basis, I wonder what form of safeguards and support mechanisms are in place for families where there could be serious and regular high-stakes games in social gambling sessions or excessive social gambling sessions that results in gambling addiction. This could still have social costs which would just be as undesirable as other form of gambling. While gamblers themselves, or their family members, can call the Gambling Addiction Hotline to restrict themselves from the casinos, we probably cannot ban people from entering other people's homes on a daily basis. Mdm Deputy Speaker, allow me to close in Mandarin. (In Mandarin): [Please refer to Vernacular Speech.] According to the National Council on Problem Gambling survey on Singaporeans' participation in gambling in 2020, 44% of Singapore residents aged 18 and above have participated in at least one type of gambling activity in the past year. While this may appear to be an improvement from 52% in 2017, COVID-19 restrictions may be one of the main reasons behind this. Since 2005, the gambling rate in Singapore has hovered around 50%. Even as we restructure the CRA into a new GRA to strengthen the regulatory framework for gambling, we must also look squarely at the issue of problem gambling and continue to invest additional resources to strengthen social protection against problem gambling. Of course, I am also aware of the Chinese saying "A small amount of gambling is entertaining". The Bill also clearly states that it is not illegal for friends and relatives to play mahjong at home.”
“Even as recent as last week, I have received SMSes from local mobile numbers and WhatsApp messages inviting me to online casinos or to set up betting accounts for football or horse racing. May I ask, how is the Ministry looking to clamp down on such activities, particularly as some of them may not be physically operating such syndicates within Singapore, but yet are clearly targeting locals. Next, I note the new offence of proxy gambling, which I understand was to close a loophole where there was a case in 2019 in which the individuals could not be taken to task as proxy gambling was not previously criminalised. In 2016, when proxy gambling was banned in Macau, it was reported in Forbes that the business had migrated to other countries within Asia. What safeguards and regulations are being rolled out to ensure that the two casino licensees are proactively assisting the Government to enforce the ban on proxy gambling and what penalties could be imposed if they are found to be negligent or even abetting such practices? And finally, the Gambling Control Bill has specifically provided an exemption regime for social gambling among family and friends conducted in homes. I believe many households, especially during Chinese New Year, would be relieved to hear that mahjong, "ban-luck" or blackjack sessions are not illegal per se. By extension, however, Singaporeans have taken to staycations and if my memory does not fail me, I recall mahjong sets and tables being part of items that are available for a loan at holiday chalets back in the day. Would social gambling at such non-home locations, among family and friends, fall under the exemption?”
“However, while physical gaming arcades are waning in popularity and ubiquity in our shopping malls today, with some game developers, such as Epic Games, removing loot boxes from Fortnite and other games, we can be sure that gaming developers will be moving fast, faster than regulators globally in trying to innovate their ways to higher profits. One particular area of concern in my view, is that of non-fungible tokens or NFT gaming. As it is, Electronic Arts (EA)'s FIFA Ultimate Team packs, which are a form of loot boxes or surprise mechanics, in the words of the company, have their benefits restricted to the in-game experience. And indeed, I note in the public consultation last year that the current regulations do not consider games of chance with virtual prizes as gambling as long as there are no in-game monetisation facilities that allow players to exchange virtual prizes for real-world payouts. However, when a picture of a monkey looking bored can cost as high as a few million dollars and potentially having benefits in the physical world, then you know that the stakes and potential financial rewards from being successful in an NFT game are significantly much higher. NFTs may also be sold for cryptocurrency, typically Ethereum, which can then be sold for fiat currency eventually. On the more simplistic level, there are also actual gambling facilities in particular games where you can lose in-game currency purchased with fiat currency, like the casino in GTA Online. May I ask if the GRA has dedicated resources looking at not just loot boxes, but other evolutionary forms of games of chance or gaming activity and how does the Ministry intend to get ahead of the curve in monitoring developments in this area? This brings me to my second point on illegal online gambling.”
“Mdm Deputy Speaker, I spoke on the Gambling Duties Bill last month where I shared my thoughts on the higher casino tax rates and raising betting taxes, especially given the social objective of avoiding its excessive consumption. I have also raised concerns about the issue of problem gambling and of dedicating additional resources towards gambling safeguards and rehabilitation of problem gamblers. Pertinent points which I would like to reiterate today as we debate the Gambling Control and Gambling Regulatory Authority of Singapore Bills. In my view, these Bills are positive steps to stay ahead in the ever-changing gambling landscape with an increasingly blurred boundary between gambling and gaming. The reconstitution of the Casino Regulatory Authority with the rationalisation and consolidation of other Government agencies, such as the Gambling Regulatory Unit, Singapore Tote Board, departments within the Police and MSF that are addressing social gambling problems to establish a single unified Gambling Regulatory Authority is an important step of consolidating resources to address gambling, not just from narrow, segregated lenses, but taking a holistic approach to gambling policies and issues. One issue, which I believe warrants attention, is the blurring boundaries between gambling and gaming. Business models have adapted to changing customer preferences by introducing gambling elements that are traditionally not perceived as gambling, such as loot boxes in both physical gaming arcades and in virtual games, which my colleague, Aljunied Member of Parliament, Mr Gerald Giam, has spoken about earlier.”
“Thank you, Chairman. I just have two clarifications. The first is regarding the BTO cut that I had filed. It is really whether or not we could set aside a minimum target percentage of the flats. We have the shorter wait times. So, instead of the Build-to-Order (BTO) process, we have one which is build-ahead-of-order, considering that we do have a very significant demand and supply imbalance in the market today, with very high over-subscription rates for the BTO flats. The second is in relation to resale subsidies and ensuring affordability. As it is, there are already a lot of public housing flats today in areas where only the better-off can afford them. I spoke about the 261 million-dollar flats. But if we look at the median resale prices of, say, a 5-room flat in places, such as Bukit Merah, Queenstown, Toa Payoh, these range from $800,000 to $900,000. So, what is it that the Ministry would be looking into to ensure that it is not only the better-off who can afford a flat in these places? 6.30 pm”
“It is worth pointing out that, since 2010, BTO flats have consistently been multiple times oversubscribed, with only one exercise where the ratio specific to that of 2-room Flexi Flats was close to one time. Support for Young Couples”
“Unfortunately, despite these apparent relaxations of the BTO system, average BTO wait times are still stubbornly long, suggesting that HDB's efforts, though welcomed, do not go far enough. A potential approach would be to expand on HDB's existing initiatives and create two distinct application tracks for BTO flats: first, the current system with a four- to five-year wait; and second, some kind of BTO express lane for projects already one to two years into construction, resulting in a much shorter waiting time of two to three years. In order to maintain parity between the two tracks and to mitigate the risk of vacant flats, the express lane option should perhaps offer applicants less specificity in their preferences. For example, an applicant may only specify a unit type in the ranking of different floors of the zones. For this to work, there may need to be a larger percentage of HDB stock being contracted every year ahead of demand. For instance, there could be a certain baseline of HDB supply, say 15% to 30% of the annual new stock, that is continually constructed every year, regardless of prevailing BTO demand. To be clear, this is not a proposal to revert to the pre-BTO era with the registration for flats system. We saw an oversupply of flats in the wake of the Asian Financial Crisis. However, the proposal does involve an acceptance of some risk of excess supply if there were to be a severe demand shock. That being said, I strongly believe that such a risk is low and, in any event, worth taking, given the stubborn problem of long BTO wait times plaguing us today.”
“Chairman, long waiting times for BTO flats have been a persistent concern among Singaporeans with current average waiting times of around four to five years and, in some cases, six to seven years, where projects have been delayed by COVID-19. Such long waiting times are not just an inconvenience but seriously affect Singaporeans' life plans, such as causing young couples to delay starting a family. The BTO demand and supply situation is made even more challenging by rising demands for BTO flats. As the Minister recognised in January this year, a strong demand for flats has been driven by factors, including rising marriage and family formation rates, smaller household sizes and higher income ceiling, allowing more households to qualify. In view of these realities, it is an apt time for the Government to review and improve its approach towards the supply of HDB flats in order to keep waiting times in check. We recognise that large housing development projects simply take at least three to four years to complete. Therefore, in order to achieve shorter average waiting times of, say, two to three years, Singaporeans must be allowed to apply for new flats at a point in time much closer to project completion and delivery. This basic idea is not new and, indeed, MND confirmed that, where possible, HDB has, since 2011, already been commencing some BTO projects ahead of demand or actual bookings. In 2017, the Government specifically introduced a plan to offer BTO flats with shorter waiting periods of two to three years, such as approximately 3,000 flats launched in 2018 with a waiting time of 2.5 years. More recently, HDB also announced BTO flats with waiting times of two to three years, such as in Tenggah and Yishun.”
“A solution might be for HDB to build more flats and allocate a portion of them as rent-to-buy units, instead of just limiting all rental flats to 1- or 2-room flats. This has the potential of concurrently addressing two systemic socioeconomic concerns of eliminating the stigma of residents living in rental flats and reducing the burden on the next generation of Singaporeans who could use their freed-up finances on housing to explore more daring career choices and/or entrepreneurial pursuits. HDB Rental Flats”
“As we think about our new way forward, I find it timely to bring up the Adjournment Motion that I moved last November on supporting diverse aspirations through rental housing. If anything, I am glad that my views on how this policy will strengthen communities, as opposed to weakening them, have sparked conversations within and beyond this House from online discussions to forums and news articles. Meanwhile, however, many of my residents continue to struggle with seeking their temporary home under the existing rental schemes, be it the family which applied for PPHS, only to be unsuccessful for five consecutive times, or the family which meets the stringent eligibility criteria and was even successful in applying for a public rental flat, only to be told that there are many applicants on the waiting list and of the long wait times. Hence, I would like to humbly request once again that the Government significantly increase the stock of rental flats across flat sizes, thereby creating a viable and expanded public rental scheme with an emphasis on ensuring that our lower- to middle-income households' needs are well looked after. Perhaps, we could also explore expanding our notion of what it means to have homeownership via a rent-to-buy model. This scheme aims to ease the transition from renting to buying a home by providing subsidised rent. This is not a new idea and, in fact, has been adopted in several parts of the world, such as the Rent to Own scheme in Wales or the Rent to Buy scheme in the UK. If home ownership is a cornerstone of this Government's housing policy, enabling residents the option to buy the same house after renting it for a certain number of years does seem like a viable solution.”
“While the PLH model is new and will need to be reviewed over time, I had asked specifically in January this year if singles would, eventually, be allowed to be sole owners of new or resale PLH flats and, if this were to happen one day, what are the key considerations before these are lifted. Minister Desmond Lee stated in January that the PLH model is designed with the objective of being inclusive for Singaporeans, and I trust that singles should be considered Singaporeans as well.”
“This is especially so when considering that there are already many HDB flats today located in various prime locations that are transacting at very steep market values and, hence, generating much windfall profits – a record 261 million-dollar transactions in 2021, based on The Straits Times article in January, for example. Arguably, the widest subset of such HDB resale flats would have very high market values and would require significant additional subsidies to keep such flats affordable. Their need for additional subsidies is much more so than the still limited new launches of PLH flats. And for many Singaporeans, the resale market is the only available housing option if they remain unsuccessful in the BTO lottery. The second issue is that singles are not being allowed to buy PLH flats even on the resale market. One of the most baffling aspects of the PLH model is its discrimination against singles, whereby singles are not allowed to buy PLH flats even on the resale market. As it stands, singles are not allowed to be sole owners of large BTO flats in mature estates and can only buy resale non-PLH flats if they are aged 35 and above. Chairman, if there is no coherent reason why MND should impose additional restrictions on singles for PLH flats in the resale market, the message that this sends is that the needs, aspirations and sacrifices of singles are less valued, despite the Minister's claim that MND is not taking a step backward in this regard, as it would have the perception of doing so.”
“Chairman, there are two main issues regarding the PLH model which I would like to address. The first is that windfall gains or the so-called "lottery effect" from the PLH scheme is inadequately addressed. When a PLH flat is sold on the open market for the first time, owners will have to pay 6% of the higher of resale or valuation, as a subsidy clawback. However, my view is that the obvious outcome of this is that 6% will simply be factored into the asking price of the flats in the future – "priced in", in market lingo. And if we are to use the example of The Pinnacle@Duxton, which frequently transacts for over a million dollars, this 6% will be less significant than the windfall gains the first-time seller of the PLH flat would stand to make. Furthermore, having a 10-year MOP may reduce the number of property speculators, but it does not go far enough in reducing the lottery effect and merely kicks the can down the road. Chairman, rather than having these onerous mechanisms, which distort the market, a simpler and more equitable solution, especially from the perspective of those who may not have the good fortune to buy into the new BTO PLH flats, who far outnumber the lucky few who managed to, is to reduce the quantum of subsidy given at the onset and provide higher subsidies for resale flat buyers who perhaps need them more. Reduced subsidies at the onset better tackles the issue of windfall profits and the perception of fairness to the broader Singapore population, while giving less room for market distortion.”
“We also need to accelerate the rollout of EV-charging points across Singapore to further incentivise EV adoption and ensure it is both economical and practical for Singaporeans to adopt EVs. Green Transition in Last-mile Logistics”
“In 2021, Singapore's population of electric cars more than doubled from 1,217 to 2,942 cars. This, however, only represents 0.5% of the 645,000 cars in Singapore today. So, this uptick is encouraging, considering that much of it was contributed by the increase of 924 units in the number of Tesla's here in Singapore, which costs about S$200,000 each. The economics of EVs currently is still such that it is difficult for the average Singaporean to adopt EVs. EVs are much more expensive compared to the equivalent for internal combustion engine (ICE) cars and you see that the Hyundai Ioniq Electric, after considering various rebates, retails for $173,000, that is, $45,000 or 35% more, compared to the $128,000 for the Ionic Hybrid, and $65,000 or 59% more than the $108,000 for the ICE Hyundai Avante. I believe more can be done to ensure that we phase out ICE vehicles ahead of 2040, especially in the context of Singapore's COE system. Norway, for example, saw 84% of new car sales in January being all electric. Even as EV prices start to come down with advancements in manufacturing, the disparity in price between EVs, after factoring in Government incentives, are still significant. EV owners will also expect to fork out an additional tax of $700 a year from 2023, introduced to partially cover the loss in fuel excise duties from ICE cars, with the higher charges already starting to be phased in since 2021. This reduces the attractiveness of EVs to consumers at a time where we should be pushing forward for adoption. I hope the Government will also consider longer-term policies, such as preferential access and toll rates, which have been shown to show a significant impact on boosting EV sales in Oslo and several Chinese cities.”
“Chairman, during this year's Budget, Minister Lawrence Wong announced that Singapore is targeting to reach that net-zero by or around mid-Century. First of all, I would like to thank the Government for coming to this decision. As party to the Paris agreement, Singapore has a duty to set a clear target that aligns with the 1.5 degrees goal. This is even more so as we recently signed the Glasgow Climate Pact. A new net-zero target sends an urgent that we take climate change very seriously. I also want to take this opportunity to acknowledge the work of Civil Society members, like climate scientists, youth activists as well as fellow Members of Parliament who have been pushing for a more ambitious target for years. However, I have several classifications about the new target that increased carbon pricing. From 2024, businesses will be able to use and I quote, "high-quality international carbon credits to offset up to 5% of their taxable emissions." What accountability measures will the Government put in place to ensure transparency and fair implementation? How much of the Government's own net- zero target will be based on such international carbon credit offsets? With the latest update to net-zero targets, what is the Government's projection of our emissions pathway from today up to mid-century? Specifically, are we still looking at rising emissions levels up to 2030? Lastly, all this is clearly a huge step forward. Around mid-century is still quite ambiguous, to be honest, and we all know what it means to set smart goals – specific, measurable, achievable, relevant and time-bound. So, will the Government consider setting a more exact deadline to achieving net-zero emissions? Can we strive firmly towards net-zero by 2050? Net-zero Carbon Emissions by 2050”
“Thank you, Chairman. I have just got two clarifications. The first is regarding the own account workers' welfare cut that I filed on the gig economy workers. I just wanted to ask if efforts can be done to ensure that they at least earn a fair wage in terms of reference to locals working part-time earning at least $9.00 per hour as per the LQS, given that these workers are not really in control in terms of their earnings power and are subject to all these incentives? The second is in relation to the cut on the Lifetime Retirement Investment Scheme (LRIS). My question is whether or not the Expert Investment Council has completed its work and whether the Government still intends to roll out the LRIS. The reason being if you look at where the global markets have been since August 2016 when the recommendations were put forth, they have been up 67%, so this delay does have real cost and opportunity cost to our members in terms of their retirement adequacy.”
“While not named a minimum wage per se, this provides for local workers with, at least, the ability to earn a minimum of $1,400 per month. Gig economy workers today have no control over their earnings and are subject to the ever-tightening incentive schemes in order to barely make ends meet. Could efforts be done to ensure that they earn at least a fair wage, with reference to locals working part-time earning at least $9 per hour, as per the LQS?”
“There is an increase in gig economy workers in recent years, but many are in a precarious position. This is something that the Government has taken note of. Prime Minister Lee had spoken in his National Day Rally last year on how most gig workers earn only a modest income and they lack protections, such as work injury compensation and, of course, employer CPF contributions. However, there have been arguments made on how, if changes are implemented, markets may be distorted resulting in consumers bearing the costs. This may be a false premise, however, as to the extent that the cost burden falls on more relatively better-off consumers who regularly utilise services provided by gig workers, such as food delivery and private hire transport, this could be beneficial from a societal point of view. After all, the benefits to gig workers discussed should outweigh the costs to relatively better-off consumers of a marginal increase in the price of food delivered to their door by a cyclist on a wet rainy day. Since the UK Supreme Court ruling that Uber drivers should be treated as workers in February 2021, other jurisdictions have moved strongly on gig worker protections. The EU has proposed a test on how digital platforms manage gig workers. Malaysia is also looking into a need for gig worker regulations. Hence, I would like to ask the Ministry if legislation will be introduced to protect the rights of gig workers and provide them with at least the minimum levels of benefits and protection and safety nets, such as insurance and work injury compensation. Further, with effect from 1 September 2022, all companies which hire foreign workers will be required to pay all their local employees at least the local qualifying salary (LQS).”
“As shared by the director of the four-day work week campaign in the UK, similar programmes are set to start in the US and Ireland, with more planned for Canada, Australia and New Zealand. Many companies and governments have already started to implement FWAs and four-day work weeks. For example, the Victorian state government has made flexible work available by default to all employees since 2021, focusing on service delivery outcomes, as well as employee support and well-being. Finland's Working Hours Act, first passed in 1996, was updated to give employees flexibility to shorten or extend their workday by up to four hours. Closer to home, local banks, such as UOB and DBS, have also instituted permanent FWAs. I ask that the Government demonstrate a commitment to this new way of work and maintaining the attractiveness of Singapore as a place to work. I hope the Government will take decisive steps to increase the adoption of FWAs, through legislating a baseline level of flexible work, conducting four-day work week pilots and allowing the Public Service a leadership role to implement more FWAs. Our Workforce of the Future”
“Chairman, last year, I spoke in this House about the importance of FWAs and called upon the Government to lead the adoption of FWAs. In the past two years, COVID-19 has drastically changed the way we work, but as we start to get back on track to living with COVID-19, there is considerable anxiousness and concern that the gains we have made on FWAs could be lost. The Public Service Division (PSD) has introduced FWAs, but I read with grave concern the Government's stance that hybrid work is not an entitlement, and that the requirements of the job take precedence. I am concerned that the signalling from PSD may roll back such efforts in the private sector as well. Research shows that FWAs bring various economic benefits, including increased productivity and innovation, better employee morale, as well as attracting more talent. For employees, this can also bring improved work-life balance and mental health. In response to my Parliamentary Question in February, Minister Chan Chun Sing noted that some 60% of the Civil Service is in frontline functions, such as schools or the uniformed services agencies, which are not suited to be performed from home on a sustained basis. However, where operationally feasible, Public Service agencies can exercise flexibility and discuss FWAs with these officers. To me, the starting point has to be that FWAs are an obligation on the part of employers, and, thereafter, discussions can be made on how these can be tailored to individual job circumstances. A related point on FWAs is the idea of a four-day work week. I shared in a speech last year the benefits that this could bring. Since then, the UK has also announced a four-day work week pilot.”
“I would like to seek an update if the Ministry has finished work on this front, as it has been close to six years since August 2016 when the plans were first announced. Is there a more concrete timetable that can be shared? Finally, I would like to make an observation that GIC's 20-year returns have been consistently above the 2.5% interest rate offered to CPF-OA. Should the average Singaporean get access to the diversified investment portfolio of GIC, CPF members could reach retirement adequacy in a way that minimises the risk of short-term market volatility and protect their purchasing power against not just local inflation, but global inflation as well.”
“Chairman, while CPF has maintained its interest rates at a point where it preserves purchasing power and guards against long-run inflation, the longer time horizons that retirement presents mean that expected increases in longevity and higher retirement income needs should give additional motivation to empower CPF members to enhance their returns when able. And it is, indeed, true that, generally, long-term investments with some risk should provide higher expected returns than the CPF interest rates. We know that 75% of CPF Investment Scheme (CPFIS) OA members have earned some form of profits as of FY2020, but only 645,000 members are part of the CPFIS. This is a mere 16% of the over four million total CPF members as of 2021. There could be many who may wish to see their CPF returns do better than the interest rates offered by CPF but are not confident enough or knowledgeable in the financial markets to buy into the CPFIS. Moreover, while the world has been moving toward ETFs as an investment product, the available number of ETFs available under the CPFIS is a grand total of six. Many of the global ETFs such as those listed in the US, have total expense ratios which are lower than ETFs and Unit Trusts here in Singapore. As a start, can more passively managed ETFs be made available for Singaporeans? I note from my cut last year, then-Minister for Manpower shared that the Ministry had still been studying if a CPF Lifetime Retirement Investment Scheme (LRIS) can be introduced to help such members who have the risk appetite and investment horizon but not enough investment knowledge. However, the Ministry is updating planning assumptions to strike the right balance between risk and return.”
“While economic growth seems to have started to pick up again, there are also some underlying concerns. Hence, we are very concerned about the risk of raising GST when the pandemic is still ongoing and there are many uncertainties with the economic recovery. Instead of raising GST, Workers' Party Members of Parliament suggest that alternative sources of government revenue be considered. In Budget 2022, the Finance Minister will adjust the Additional Registration Fee for luxury cars and the property tax as a way to collect wealth tax. While I welcome these changes, I also feel that there is much room for improvement. I talked about corporate tax and NIRC. Our effective corporate tax rate is close to 3%, well below the global minimum tax rate of 15% announced by the OECD. If Singapore imposes a global minimum tax of 15% on MNCs subject to the tax reform, it will not only raise our corporate tax revenue significantly, but also achieve the objective of this Budget, which is to build a fairer and more resilient tax regime where people wealthier will contribute more. Singapore has strong non-tax advantages and appeals to MNCs. Therefore, the Government should view the tax reform on global minimum tax rate as an opportunity, not a threat. Finally, I suggest that we consider increasing the NIRC component to our Budget. This will not reduce our reserves; instead, we can continue to grow our reserves steadily while ensuring that we use our national resources more effectively to help sustain Singaporeans' livelihood. Our people are Singapore's most important asset.”
“If the goal of this Budget is to ensure a fairer revenue structured, that means everyone chips in and contributes to a vibrant economy and strengthen the social compact, but those with great means contribute a larger share. If so, should we not revisit the contribution of our investment returns as opposed to the individual Singaporean who is grappling with the rising cost of living? Over the past five years, the NIRC provided an average revenue stream of around $17 billion, or 3.5% of our GDP. If the assumption is that Government spending is at 18% of GDP today, but expected to go to more than 20% of GDP by 2030, could we not raise the contributions from the NIRC to the Budget and raise its share of GDP too? I hope that Minister Wong will agree with me that raising the NIRC contribution rate will not result in a drawdown of the reserves and will, in fact, still allow us to continue building our reserves. So, to belabour with the point, this will not mean that we will not get a steady stream of income from the reserves to benefit today's generation of Singaporeans and our children and our grandchildren. On the contrary, as Minister Wong has said, it is about being able to invest even more in our people and social infrastructure. It is to me about ensuring that we invest not only in financial assets overseas but in our people, Singaporeans, who to me are the most important resource of this country. It is simply about sustaining the value of our financial reserves and sustaining the lives and livelihoods of our fellow Singaporeans. Mr Speaker, allow me to conclude in Mandarin. (In Mandarin): [Please refer to Vernacular Speech.] We are still in the amidst of the COVID-19 pandemic.”
“Hence, I would like to ask Minister Lawrence Wong, after considering the $43 million drawn on our past reserves, are our reserves today higher or lower, compared to five years ago? I ask this because it is important to put into context the growth in our reserves as we debate the source of funding for our future expenditures, even if the Government continues to be guarded over disclosing the absolute size of the reserves itself. It is not that I disagree with the need to be prudent and I agree we should not take our reserves for granted. But just looking at the MAS Official Foreign Reserves (OFR), they stand at around $566 billion as of January 2022, an increase of $185 billion or close to 50%, compared to two years ago. Temasek's net portfolio value as of March 2021 stands at $381 billion, up to $75 billion or 25%, compared to a year ago. And I believe GIC would have grown its portfolio as well, given generally supportive market conditions in the last two years. Yes, I understand that the design of the NIRC framework is to provide a stable, sustainable source of income to our Budget, smoothed out over market cycles. But it is also helpful to remind Members of this House that our financial reserves grow not just from the balance 50% of NIRC not utilised, but also from inflows directly into the reserves, such as from land sales which averaged around $13 billion a year in the past 10 years and from MAS interventions in the foreign exchange market to dampen appreciation pressures, given Singapore's excess of domestic savings, over investments and persistent capital inflow.”
“But the point remains that, technically, even a small shift towards the proposed global minimum rate of 15% could result in significantly higher corporate tax receipts for the Government. Beyond the dollars and cents, the more important conceptual point to me is this: if a global MNE is already operating in Singapore, what incentive would it have to incur additional relocation costs, when the minimum corporate tax rate of 15% would be normalised globally? And with tax considerations out of the way, why would not a global MNE keen to tap on the attractive growth prospects in Asia, base their headquarters here in Singapore? The World Bank has consistently placed Singapore as among the best places in the world to do business and I am confident that our competitive strengths and strong non-tax advantages will continue to provide a competitive edge to companies seeking a place of business. Lastly, let me touch on the other elephants in the room, the Net Investment Returns Contribution (NIRC) and our reserves. It is comforting to note that instead of a $54 billion draw on the reserves, as announced in Budget 2021, the actual amount we utilised across three years was $43 billion, savings of about $11 billion. It was previously said that we have drawn on our reserves equivalent to over 20 years of past Budget surpluses. We have used a generation's worth of savings to combat a crisis of a generation. I asked Deputy Prime Minister Heng during last year's Budget debate, after accounting from the draw, where would our reserves be, compared to five years ago and 10 years ago, though I do not think there was a direct answer to the question.”
“While Minister Lawrence Wong noted that pillar one will result in a negative revenue impact to Singapore, this is, firstly, limited in scope, as it is expected to apply only to global MNEs with a global turnover of more than €20 billion, with just around 100 of such companies globally. Secondly, it is only 25% of the profits in excess of 10% of revenues that will be allocated away. And, thirdly, I do not believe that profits are being artificially inflated here in Singapore, given rigorous transfer pricing rules. On the other hand, for pillar two – this applies to a much larger group of MNEs. Any company with over €750 of annual revenue would now be subject to a global minimum corporate tax. In Singapore alone, the Government shared that there are over 1,800 such multinational enterprise (MNE) groups operating here that are unlikely to be affected. As I have shared in this House last year, I hope that the Government will view the global minimum tax reforms as an opportunity rather than a threat, given Singapore's strong non-tax advantages and attractiveness to MNEs, bearing in mind the current average effective corporate tax rate is closer to 3% in YA2019. If we look at the subset of non-SMEs or those with revenues exceeding $100 million and making an accounting profit, then in YA2019, the average effective corporate tax rate is even lower, at 2%. Profitable non-SMEs contributed $10.4 billion or 64% of total CIT paid by all companies. If we assume a 15% tax rate instead, this could hypothetically balloon seven times to $71.5 billion. Of course, this is purely hypothetical, since obviously, not all companies will be scoped into the rules and there could be some slippage from both pillar one and pillar two rules and the actual impact will be much lower.”
“And I applaud efforts by the Government to strengthen our local enterprises. However, it is interesting to note that while more than $29 billion of Job Support Scheme (JSS) funding was provided to corporates in the last two years, it appears that corporate profitability, as a whole, did not fare too badly. In FY2020, while the Government expected cooperate income tax (CIT) revenues to fall by 18% year-on-year or around $3 billion to $13.7 billion in FY 2020, the actual CIT revenue turned out to be $16 billion, not too far from FY2019 levels. Revised FY2021 CIT revenues are expected to exceed FY2019 levels at $17.5 billion, growing by 9% year-on-year or $1.4 billion, and this is expected to continue into FY2022, reaching a new high of $18.2 billion. This brings me to my key point on BEPS 2.0. I acknowledge the Minister's comments that the Government needs more time to study these issues thoroughly and will announce changes in the corporate tax system when we are ready. However, if things go according to plan, BEPS 2.0 is already on the horizon, with the implementation of the two-pillar solution targeted to start in 2023 next year. I thank MOF and IRAS for patiently addressing my various Parliamentary Questions over the past year on this issue and, I believe, the various public officers involved have done plenty of detailed analysis and scenario planning on this issue by now. With less than a year to go before the implementation of the two-pillar solution and with OECD already having published in December last year the model rules for domestic implementation of the 15% global minimum tax, my question is, what is the Government's current estimates or range of estimates of the net impact of pillar one and pillar two to our CIT revenues?”
“As highlighted by a 2018 OECD report on the role and design of net wealth taxes, which provide for certain tax design recommendations, in countries where capital gains are not taxed, there may be a stronger justification for levying a net-wealth tax. A similar argument can be made for countries that do not levy taxes on inheritances. Singapore will fit into both of these cases as a country with no capital gains tax, no tax on dividends, no inheritance tax, no estate duties and still has one of the lowest effective personal income tax rates globally. We must guard against only going through the motions when we move towards addressing wealth inequality, while still leaving the least fortunate among us still pleading, "Please, Sir, I want some more". Let me now speak about corporate income taxes amidst BEPS 2.0, of which Singapore is one of 141 members of the OECD G20 inclusive framework on BEPS. Corporate income taxes have consistently been the largest contributor to the Government's operating revenues and 2022 is no different, at an estimated $18 billion, or 22% of operating revenues. However, while part of the goals of this Budget is to build a fairer and more resilient tax system where those with greater means contribute a larger share, could there be more scope for certain corporates to pay their fairer share of taxes, especially against the context of a looming GST hike, which ultimately, is borne by the end-consumer and not the corporates? To be clear, I fully recognise that many local SMEs and small businesses, especially those in the retail and F&B scene, have been struggling to make ends meet amidst the pandemic and the changing safe management measures (SMMs) rules over the past two years.”
“5 million would only pay $15,000 more, or about 1% of chargeable income. I would even argue that the last increase in personal income tax rates in Budget 2015, where the top marginal personal income tax rates were raised to 22% among others, was an even bolder move than what we have today, raising more revenues at $400 million a year back then, as compared to $117 million a year, with today's change. Also bearing in mind that from 2015 to 2019, that is, the latest available year on SingStat, the number of individuals with assessed income of more than $300,000 has increased by 22% within this timespan as well. I recognise that the Government will continue to study the experiences of other countries and explore options to tax wealth effectively. And I sincerely hope that more meaningful efforts to change our tax system and raise wealth taxes can be made sooner than later. Yes, I agree that taxing wealth has its challenges. But consider a hypothetical case of a multi-billionaire tech founder who made a windfall after his start-up's IPO and has retired from the firm. From time to time, he collects dividends as his income while continuing to hold shares in the listed company, which accounts for the vast majority of his wealth. Meanwhile, he is renting multiple luxury apartments instead of owning just one place of residence. And does our tax system adequately capture the wealth of what could be one of Singapore's richest? Would this person even be paying income or wealth taxes at all? If we think about the Forbes' 50 richest list in Singapore, just how much of their wealth is in their residential addresses or the cars that they drive?”
“As noted in Annex C-2 of the Budget Statement, an owner-occupied condominium in a central location is only expected to see an increase of $200 a year while a very large, landed property is expected to see a $15,400 increase. The corresponding numbers for non-owner-occupied properties are $1,004 and $19,200 respectively. Based on my analysis, a centrally located condominium in Cairnhill that is being leased out as an investment property, only raised rents by 2% to offset the higher property tax rates while that of a luxury development located on Nassim Road commanding monthly rentals of almost $20,000 a month need only raise rents by 7% to offset the higher property taxes. To put into context, rents in 2021 for a private residential property already rose by 10%. The other tax change is that of introducing a new ARF tier for cars. For a Bentley Flying Spur, which retails for almost $900,000 without COE, the new ARF tier is expected to increase ARF by about $59,000, a fairly large number in itself but represents just about 6%-7% of the cost of the car. For someone who is prepared to pay almost $1 million for an asset that depreciates rapidly over 10 years, is it even meaningful in the grand scheme of things for this person? Thirdly, higher personal income tax rates are not wealth taxes per se. But I do agree with the principle that those who earn more should contribute more and it is a fine example of what progressive taxes look like. However, the increase appears to be very modest once again, once you work through the mathematics. For example, someone making $1 million in chargeable income would pay a grand total of $5,000 more in personal income taxes, or 0.5% of chargeable income, while someone making $1.”
“When viewed from a glass half-full perspective, it is a step in the right direction when it comes to tackling wealth inequality and strengthening our social fabric – albeit a small step. However, when viewed from a glass half-empty perspective, the measures are a tokenism rather than a meaningful attempt at wealth taxes in Singapore. Higher property taxes and ARF are expected to result in a $430 million increase in annual revenues and, even if we include higher personal income tax rates, the total annual increase is just about $600 million. This is significantly below what some academics have put forth as possibilities in our conservative estimates of what the net wealth tax could bring at about $1.2 billion annually. For example, in a November 2021 CNA article, Assoc Prof Walter Theseira from SUSS noted that a wealth tax might conceivably pull in a similar amount to raising the GST by a few percentage points, while a Bloomberg article on 16 February quoted Mr Christopher Gee, Senior Research Fellow at the IPS, as sharing that a similar wealth tax rate in Singapore, as that of Switzerland presumably, would generate $2.7 billion in Government revenues. Consider the case of property taxes which, as the Minister said, is currently Singapore's principal means of taxing wealth. As what Business Times' correspondent Ben Paul shared in his article, "As an owner/occupier of a modest apartment in the core central region, property tax is not a particularly big expense for me. In fact, it is nothing, compared to the maintenance fees and costs of general upkeep for my unit." While the increase in the headline marginal property tax rates appear high, the actual impact on the households involved are unlikely to be material.”
“Locally, the MAS has been concerned enough about inflation to surprise the market with a tightening of monetary policy in October, given that external and domestic cost pressures are accumulating. And soon after its first tightening in three years, MAS acted again in its second tightening in three months, given upside risk of inflation. Even if what Minister of State Low Yen Ling shared in this House ensues and that inflation is expected to ease in the later part of this year, it does not mean prices are going to come down. It just means that prices will still rise but not jump and still continue to eat into the real incomes of Singaporeans. Who can forget the slew of price increase signs being put up at coffeeshops since the start of the year and the more than 30% increase in fuel prices or the 23% increase in electricity prices since a year ago? In the context of rising inflation and an uncertain global economic recovery, a GST hike, while delayed, would still be counterproductive, given the potential drag on private incomes, consumption and, ultimately, our GDP. As my fellow Workers' Party colleagues have shared earlier, there are alternative revenue sources that can and should be considered beyond the regressive tax that is GST, with options to use more of Singapore's existing physical headroom, for example, having the added benefit of minimising the impact to our local households and economy alike. My speech will thus focus on three main areas which warrant urgent consideration. Minister Wong made adjustments to residential property taxes and the Additional Registration Fees (ARF) for cars as part of Singapore's answer to wealth taxes. I welcome these changes.”
“"It was the best of times, it was the worst of times". Mr Speaker, those were the opening lines from the novel by Charles Dickens, A Tale of Two Cities. Lines which I find to be quite apt to describe the situation we find ourselves in today. Two years into the pandemic, we are still battling the latest wave of infections brought about by the Omicron variant, with many of our healthcare workers struggling to cope with the stressful working conditions today. COVID-19 fatigue has also meant that many of us cannot help but feel overwhelmed at times even as we try so valiantly to live with endemic COVID-19. On the economic front, it seems that economic growth is starting to pick up again. Singapore's GDP grew by 7.6% in 2021, with the Government projecting an above-trend 3% to 5% growth for 2022, with total employment seeing the highest quarterly growth – since 2014 – of 47,400 workers in the fourth quarter. Yet, the rosy headline numbers belies the risk to the fragile global and local economic recovery, not least because of geopolitical tensions and rising concerns over inflation, among others, and one cannot rule out the tail risk of a recession in the near future. Inflation and the rising cost of living, in particular, have been of grave concern to policy-makers globally and the man-on-the-street alike. As shared in one of my speeches in November last year, it was unclear if the current inflationary pressures in the market are transitory or permanent, though the US Federal Reserve has since then dropped the term "transitory" in its description of inflation and with concerns about stagflation now appearing in the market lexicon instead.”
“I thank the Minister of State and the Second Minister for their response. I just have one supplementary question. I do recognise that inflation is a concern for everyone and it is something that is reflected in the lived experiences of all our residents. If you look at what MAS has done from a monetary policy standpoint, they have tightened for the first time in the last three years. From a fiscal standpoint, I also note that back in 2006, the Government has put in place a freeze in fee increases for one year after the GST increase. This time round, if there were to be a GST increase, whether or not the Government will consider a similar freeze in the fee increase, which is similar to my original Parliamentary Question (PQ), as well as that asked by the Member Mr Ang?”
“I am sure, for Singaporeans looking forward to the new attractions and the IRs themselves alike, regulatory clarity and certainty on key deadlines would be much appreciated, not least because a flat tax rate will be applied if the IRs fail to meet their investment commitments. Last but not least, with casino taxes set to rise, how much of the increased revenues from our raised casino taxes would be diverted towards efforts to mitigate the negative social effects of the continued existence of gambling establishments in this country? I would also humbly suggest that perhaps a fixed percentage or absolute amount of gambling revenues could be dedicated towards gambling safeguards and rehabilitation of problem gamblers. I also note that in the 2019 press statement, it was revealed that the IRs will conduct a joint study with MSF to understand upstream preventive technologies and options available to promote responsible gaming among all gamblers. What has been the findings of this study, what measures will be introduced following the study and will the report be shared with the public? All in all, I do support the rise in casino tax rates, though I believe there is still upside room to go when it comes to raising taxes, especially given the social objective of avoiding its excessive consumption. And I hope the Government will consider the points raised in my speech.”
“The third point I would like to raise in relation to the Casino Control Act is related to a Parliamentary Question (PQ) I filed in November where I had asked the Minister for Trade and Industry, given COVID-19 disruptions to the hospitality industry, whether there are any changes to the timeline investment commitment and nature of the S$9 billion combined investment commitment by the two IRs. Back in 2019, the Government noted that, in view of the substantial investment of $9 billion by the two IRs and to provide business certainty, the Government had agreed to extend the exclusivity period for the two casinos to end 2030, if no other casinos are to be introduced during this period, Minister Gan Kim Yong shared in a reply to my PQ that the IRs remain committed to delivering on their expansion plans, but both have indicated that there will be potential delays in the completion of their projects. That much is clear, given Sands has shared that they may not be able to meet the target 2025 completion deadline they had previously indicated, even though completion was only required by April 2027; while Genting Singapore had announced in early 2021 that it would delay development of its RWS 2.0 expansion project until 2022. While COVID-19 has, indeed, created significant disruptions and delays for the construction industry, how much leeway is the Government prepared to give the two IRs? Are there any revisions to the Government's required completion dates and what sort of timeline would be deemed reasonable?”
“The late Mr Sheldon Adelson, former Chairman of Las Vegas Sands, however, said that Minister Mentor Lee was being a little too pessimistic and the property would be up and running at full speed the next year. Mr Adelson was proven right in the end and, I believe, even surpassed his own expectations. He shared in a statement in 2011 that Marina Bay Sands (MBS) had generated over US$1 billion of adjusted property EBITDA in just its first 12 months of operation, which is a record not only for any property in the history of Sands, but a record for any property in the history of the industry. Fast forward to today, I estimate that both IRs have, over the period from 2010 to 2020, generated a cumulative EBITDA of more than S$30 billion – more than double the $15 billion that they have invested in 2006, and counting. Both properties continue to generate strong earnings and cash flow today, which will, in all likelihood, recover alongside Singapore's tourism industry. Macau, the largest gaming market globally, imposes a special gaming tax of 35% of GGR, amidst other fixed and variable premiums payable, while also requiring operators to contribute a further percentage of GGR to utilities designated by the Macau government. In this context, could there have been room for our casino tax rates to be higher? This, considering also the strong profitability of both IRs, where the recent impact from COVID-19 notwithstanding, both IRs have, historically, generated 40% to 50% EBITDA margins since their opening. As a reference point using Sands, given that it has operations across Macau, Singapore, as well as Las Vegas, I estimate that, in pre-COVID-19 FY2019, Sands enjoyed the highest EBITDA margins in Singapore at 54%, compared to 36% in Macau and 26% in the US.”
“As we are coming to the end of the moratorium in February 2022, the Government will also be providing a moratorium on the new casino tax rates, this time, for a 10-year period. As such, I believe the Government would, presumably, have conducted a comprehensive assessment as to the effect of the higher casino tax rates, as this rate cannot be changed in the next decade. Therefore, a second related question is whether the Government can share its key considerations and deliberations before finally arriving at the current tiered casino tax rates of 8% and 12% of the gross gaming revenue (GGR) for premium gaming and 18% and 22% for mass gaming respectively. The recency of COVID-19 and the significant curtailment of visitor arrivals into Singapore could lead some quarters to question the sustainability of the higher casino tax rates, in the sense of whether or not the tax rate increase could place an onerous burden on the two casino operators, amidst ongoing uncertainties, given the effects of COVID-19. But if we take a step back, I would argue that higher casino tax rates are not only long overdue but could have room to grow in future. I am reminded of the buzz that surrounded the opening of the two IRs back in 2010, which have, no doubt, enhanced Singapore's position as a tourist destination and the two operators have also done well for themselves, surprising many back in those days, given how both IRs have achieved success very early on in their operations. According to an article in My Paper in June 2010, the late Minister Mentor Lee Kuan Yew shared that Marina Bay Sands will probably take three to seven years to reach a capacity that can help spur Singapore's tourism and convention industries.”