Fang Ai Lian
Singapore
“The law can only provide for provisions and guidelines as to how everybody can live and work happily toge ther and therefore efforts made to make the laws much more flexible as well as to get people more fully involved in the management of their own affairs are clearly welcome.”
“So, I would like to ask both agencies, the MCDS as well as MOE, to think of more creative ways to cater for the needs of our special people, not only the kids but also adults. And it is really the adults perhaps. We could also think of new ways of approaching the issue because there is certainly a bigger gap there too. Assoc. Prof.”
“I do not think we can tackle all problems at the same time. Some have to be put in the parking lot. The main thing is that there must be a recognition that we have a problematic situation here and there is a need to change, and new solutions got to be found. The original objectives of the CPF cannot be fully met by the old model.”
“But, as with all things in Singapore, it would need to be spearheaded, championed and sponsored. Perhaps, to incentivise the private sector or, in fact, the VWOs, we need to put some real incentives in it. One of the main prohibitive areas is land cost again. That is why I have directed the issue to MND.”
“My comment here is that we are now very experienced in knowing what sort of measures we should have to achieve a smoother traffic flow, because we really do have a very good road system. We do not have road congestion and all these promote Singapore as a business centre. But I think we need to consolidate.”
“We have got an enormous task at hand. I do not envy the Ministry of Education. But by just recognising the nature of the task, I think we have taken major steps towards tackling it. There can never be a perfect and all-encompassing solution.”
The complete record
Every one of 75 lines we hold for Fang Ai Lian, in date order, each linked to its source. Free to read, in full, without an account. Page 1 of 2.
“One worrycould be that there might be tax leakage because you enjoy a better tax collection under the one-tier system, and that there might also be a possible abuse by smaller companies using the business trust structure. Perhaps one way of getting round this problemis to accord transparency treatmentto the bigger trusts whichare to be listedon the stock exchange. So, the long and short of it all, my wish list for theMinister is, first,for the laws relating to traditional trusts to be speeded up. Second, being the first mover, we have been very goodin a lot of the activities. People copy us and that is the sincerest form of flattery. We could perhaps take the offensive and copy those who copy us, and that is in relation to stamp duty. Perhapsstamp dutycould also be removed in terms of properties that are injected into trusts. Thirdly, I would like to talk about the transparency treatment and that should also be accorded to business trusts. Because ifit is absent, then it will be the best equivalent to the companies enjoying other tax benefits and incentives, andit will alsobe equal to Hong Kong and behind Malaysia. With the wish list and with the legislation in place,the Government could clearly say that they have done their best to pave the way for business trusts and then it is up to the business community to take it from there.”
“In Hong Kong, their consultation paper came out in March 2003 and the final version came out in July. And Malaysia also introduced REITs into their budget and also exempted stamp duty from properties injected into REITs. So, we have the first mover advantage andwe are alsoquite lucky that these countries have not launched any REIT. My comment here is that the first mover advantage can be very quickly eroded if we do not take advantage of it by attracting more REITs and creating the critical mass and building up the industry here. Soalso withbusiness trusts.They will add to the sophistication and depth of our capital markets and, more importantly, entrench our position as a progressive financial services centre. Because it has been said that it adds a new class of yield-based financial products for investors in Singapore as well as overseas. If we see the success of REITs, it has really changed in a very positive way how properties are managed. Every square foot of space is being maximised. We see Junction 8,Funan Centre and shopping malls being very vibrant. So it is with business trusts that businesses can see very positive changes. One of the reasons why REITs have been so successful is perhaps due to the fact that it is able to enjoy a transparency treatment for tax. The tax is levied at the level of the unitholder. So if you are a corporate unitholder, you get taxed at the corporate rate and if you are an individual, it is tax exempt. So this makes REITs very attractive because you can quote gross yield instead of net of tax yield. And this has helped to move this business. I have awish list for theMinister. Itis forbusiness trust to be similarly accorded the transparency treatment of tax to make it attractive and to make it viable.”
“There had been a consultation paper which had been widely distributed and it has been rumoured that legislation would be introduced towards the end of the year. This is important. Bankers are looking towards the updating of these laws which have not been revised significantly because it would help to attract the funds, especially from Europe, which are seeking alternative financial centres because of changes in banking laws there. So whilst we await a revision to the legislation relating to the traditional trusts, the introduction of business trusts is indeed very welcome. Asthe Minister hassaid, business trust is a new form of trust. It is regular business and yet not regular business, because it is established under a trust deed and not under the Companies Act. And as he has said, it is well suited for businesses which have stable growth and stable cash flow because distributions are from the cash flow. It will also be suitedfor the strategic industries like power generation. The ownership can vest with the Government but the operations can be privatised. Business trustswill add to the sophistication of the market place and I see it as a natural development fromReal Estate Investment Trusts (REITs), which were introduced some two years ago. REITs are managed under the collective investment scheme under the Securities and Futures Act (SFA). Withthe collective investment scheme (CIS)under the SFA and with further amendments to the SFA, businesses can choose between CIS and business trusts. REITs, introduced some two years ago, have been fairly successful. We now have four. We are first movers in this game and it has caused our neighbours to think likewise. And the speed with which they introduced REITs is quite phenomenal.”
“Mr Speaker,I would also like to support the Business Trusts Bill. This introduces a new regulatory framework for business trusts which is a new class of business entity that combines the elements of companies and trusts. As the Minister had said, this is already in operation in other countries, so it is good to see it taking root in Singapore, and it would add to the sophistication of the capital markets and also enhance our position as one of the world's leading financial centres. I am sure it would definitely bring cheer to the market place. I remember some years back, the bankers were complaining about the gloom and doom, off-shore banks were moving out and operations were run down and the fact that we were not able to attract the newer and more value-added activities such as assetsand risks managements to Singapore as much as we would like. All that has changed, especiallywith the liberalisation of the domestic banking business and, indeed, this has prompted Citibank to announce a $1.5 billion investment into Singapore in Citibank Singapore. Offshore business banks are coming back and also beefing up their operations and indeed, thePrime Minister, in his National Day Rally speech, said that the financial services sector is hotting up again. Indeed they are hiring in bigger numbers now, much to the consternation of businesses like ours who have got to queue behind them, but we are not exactly complaining. So a lot had been done in terms of stimulating the banking and financial services centre. There is still a wish-list and one relates to what bankers described as antiquated trust laws, especially relating to the traditional trust laws, for example, MrAndy Gan had said the private family trust laws.”
“The law can only provide for provisions and guidelines as to how everybody can live and work happily toge ther and therefore efforts made to make the laws much more flexible as well as to get people more fully involved in the management of their own affairs are clearly welcome. The other point is that the Bill also seeks to set general guidelines as to the type of people who should be on management committees. I think it is very crucial that we get the right people on management committees and therefore whilst the law can make provisions as to who can be left out and considered unsuitable to represent the constituents, it is more important for residents to choose with care who should be on management committees and able people should step forward and offer their services to serve their residents. Sir, on that note, I support the Bill.”
“We talk about how to cope with infant care, how to cope with after-school care, how to cope with elder care and so on. If management corporations can extend themselves beyond just looking after premises, I think we have a good chance of also developing the community spirit, which Dr Teo Ho Pin talked about earlier on. The Bill also seeks to equip management corporations with authority and to get things done. As I look through the provisions, consensus of approval is still required. A very high level of majority approval is still required. We talk about 90%, we talk about 75% and so on. These are still clearly very super majorities which, in this day and age, is very hard to attain. As many Members have asked for this Bill to be committed to a Select Committee, I wonder whether this super majority should also be reviewed because it is clearly not achievable and perhaps unrealistic too. Sir, I would like to say that it is a good Bill, and we should all try to make it work. When we talk about self-governance and self-regulation and we have apprehensions about it, I think we ought to rise to the challenge. It is no use saying that we lack awareness and we lack experience, because it is really up to Singaporeans, at the end of the day, to make the society which we hope we like to belong to. In summary, I would like to say that, at the end of the day, it is a matter of choice. If we choose to live in condominiums, if we choose to live and work in mixed developments, then we have to understand the limitations that come with it, and there is a clear need to compromise.”
“Let there be flexibility and let there be greater ability for different groups of people to better manage their differing needs. When we call for more management corporations, it will also mean that we need more people to get involved. And given the generally high level of apathy, the question is whether we will be able to get enough people. But I think this is one challenge that Singaporeans ought to rise up to. Dwellers of condominiums are generally richer. They are usually much more successful in business. They are more successful in their careers. These are the very people we would like to encourage to step forward and contribute to their community. So, their immediate neighbourhood is perhaps a good place to start with, and these people can really help to resolve conflicts which are bound to arise when people live together and share common facilities. These problems are not exactly unique to Singaporeans. I read in a recent article that in Britain, the one thing that people complain most about is their neighbours. So, in these days, it is not so easy to live with one another, and we wish that we could all have the kampong spirit back, but we do not really wish to go back and live in a kampong. So, if gifted people can step forward and offer themselves in order to develop a more peaceful, a more caring and a more comfortable environment, I think we have a chance of reviving that kampong spirit. The Bill also seeks to bring about a much higher level of determining strata title and yet, at the same time, it also gives enough protection for minorities as well. With more freedom given to management corporations, it is also hoped that management corporations would go beyond just managing premises and would also bring about the development of community spirit.”
“Quite apart from self-regulation and self-governance, this Bill seeks to enhance the effectiveness and efficiency of management corporations. A more significant change, as has been said, is that of having 2-tier management corporations to recognise the mixed-use developments which we are now accustomed to in a residential versus commercial development. And this approach is in line with practices that have taken place elsewhere, and so it is a logical step towards addressing issues pertaining to conflicting interests because we have different groups of people. I should also add - this has also been brought up - that even among different groups of commercial occupants, it would be worth our while and advantageous for them to also have separate tiers of management corporations. When people live together or work together, invariably, conflicts are bound to arise. In the case of residents having to cope with shopowners, they have diametrically opposite views. One would like, of course, privacy. The other would like bustling crowds. One would like security. The other would like unlimited access. So, this approach towards having a 2-tier, or even 3-tier management corporation, will seek to address some of these issues. It will not address all issues entirely, but it would give greater flexibility to groups of people to manage their affairs better. I think it has to be recognised that no one system can ever be perfect. And although a multi-tier system will better address or cater to the differing needs of people, it will not be perfect. There will be problems and there will always be conflicts and sub-committees may well engage themselves in court, but let it be.”
“Mr Speaker, Sir, I would like to support the Building Maintenance and Management Bill. Obviously, a lot of work has gone into it. That is why it is such a thick Bill. This Bill is all about improving the efficiency of building management. It is also about allowing private individuals to have much greater freedom in the management of their own affairs with minimal Government intervention. It is a very timely recognition of the vast changes that have taken place in terms of our residential landscape, as has already been said that there has been a huge increase in terms of condominiums and also other shared housing developments. And now we are looking at technology parks which will combine factories and other residential as well as recreational facilities. So, as more and more Singaporeans get affected by laws governing such developments, it is timely to refresh the laws and to update them so that it can be made much easier and much more pleasant for people to live and to work together. Sir, the Bill seeks to give much more authority to management corporations. It is good to see that they will have the ability to reformulate maintenance contributions, to have the ability to erect and alter structures and also have the ability to grant exclusive use or rental of common property. The Bill also seeks to decriminalise minor offences, and this is a positive step in the right direction. Because if you want to give more responsibility to people, then it is right that the law should not come down too harshly on them if they commit minor transgressions. But, of course, the option for the aggrieved party to take such people to court is always there, although now it does not become the duty for the State.”
“So, I would urge the Ministry of Education to perhaps look at these winning models and see how we could adopt some of the changes or factors that they have introduced into their system.”
“Sir, sorry for the lack of voice, it is the same orchestra! Many have said that there have been a lot of reviews and changes made to the education system but, generally, I would say that I endorse the direction it is taking. Personally, I would also like to applaud the changes made to accommodate the weaker students in terms of Chinese, with the introduction of Chinese B, because my son happens to be in that category. So I am extremely grateful for little mercies. That said, I would like to champion the learning of more languages. We live and operate in a globalised world. So, language has become very important. If we look at the Dutch, we should be impressed by them. They speak Dutch, of course, but, amongst the Europeans, they are the most proficient in terms of English. Not only that, they are also able to master two other languages, eg, German, French, and so on. We are surrounded by some 300 million people who speak Malay. But many Singaporeans, especially the younger ones, cannot venture beyond a few words of Malay. Likewise, other countries, such as Vietnam and Thailand, are also up and coming. And languages really help us to do business, because languages simply build relationship. So, rather than take the attitude that the learning of languages is difficult, it should be made for all to feel that it is important and, therefore, it should be made fun, enjoyable as well as relevant. My Dutch friends tell me that it is not stressful at all for them to learn so many languages in school. Maybe one reason is because it is not examinable to start with. The Dutch have been global citizens for a long time. The Chinese are new in this game, but they are really plugging ferociously into the global network in terms of English proficiency.”
“So, I would like to ask both agencies, the MCDS as well as MOE, to think of more creative ways to cater for the needs of our special people, not only the kids but also adults. And it is really the adults perhaps. We could also think of new ways of approaching the issue because there is certainly a bigger gap there too. Assoc. Prof. Ngiam Tee Liang (Nominated Member): Sir, this is a follow up to the issues my parliamentary colleagues and I had raised last year on affordable public transport scheme for the disabled. This is just a follow-up question and, hopefully, the response from the Minister will be more hopeful this time round. What is the progress made to provide affordable public transport services for people with disabilities as well as for older persons? Integrated Childcare”
“Sir, I would also like to speak for people, kids as well as adults with disabilities. I would like to touch on autism, as an example. Earlier this year, a new school was opened for kids with autism. I think it is very commendable because it marks a recognition that we do have a problem in our midst and also that we have reached a stage in terms of our national development to be able to commit resources for minority groups with disabilities. Sir, this school will provide some new 400 places. It will cut the queue somewhat. It should be noted that this is not an isolated effort. In fact, it is part of a bigger effort to cater more to the needs of people affected with autism and other disabilities. But despite the fact that we are creating more places, the demand is still there because the incidence has gone up by a great deal. Two decades ago, we were talking about one in 2,000. But now, given the fact that awareness is on the high side, we are talking about one in 250. I wonder whether we could approach the problem with a little bit of innovation and creativity, and whether we could integrate children with special needs with the regular kids. This means that our schools can cater for both, have special classes with specially trained teachers to look after the special kids and for the less intellectually demanding subjects, they could be integrated. Social workers believe that this could be a better approach, because for one thing, on the cost side, it is cheaperthan to build new schools to cater for this need and also less expensive for affected families to be ferrying their kids around. But more importantly, it will foster a spirit of having this mingling between special kids and regular kids, and for the regular kids to accept that this is part and parcel of society.”
“But much has already been said, and it is a bit of a non-event because the incentives have not been announced. We will have to wait until National Day to hear about them. As Ms Braema Mathiaparanam said, this is a refreshing change, I suppose because this affords a wonderful opportunity for the Government to receive feedback as well as suggestions. Much has already been given, and I would like to reiterate some of the points made. I think it is important to recognise the problems of affordability and about how burdensome it is to raise children. Put it that way, it does not sound very nice. And also the problems of beyond tax incentives, of how to make work easier and also less stressful for the couples. In particular, I would like more attention or help being put in the way of infant care as well as after-school care. I would also like to join in the discussion on abortion as well. I am told that we have the highest rate for abortion in the world. The Minister, Mr Lim Hng Kiang, is already shaking his head, which obviously means that I have had my facts wrong. But, be that as it may, it is a high figure. We have a target of some 40% increase to achieve, and that is not easy. Perhaps, it would be useful to review this area to see how much of the baby stork we can save. On that note, I look forward to listening to Mr Lim Hng Kiang's proposals, come August. For the time being, I would like to take this opportunity to congratulate the Minister for Finance for a very positive set of measures which will help us steer ourselves towards a much brighter future. Sir, I support the motion. 5.50 pm”
“So both these incentives will help Singapore position itself as a hub for manufacturing and services. Because to be an effective hub, we need a wide corporate base. So we need to attract more companies to Singapore as well as to continue to retain those companies already rooted here. I like to move on to financial services because this is of great interest to me. I am very happy that in fact this received most attention, except that it has got obscured by the babies. Budget 2004 introduced many incentives in the financial services sector. I agree with the Economic Review Committee's recommendation to develop the high-end processing services for this sector because we simply cannot compete with countries like India for mass processing. On the other hand, this is not something that only we can do. So, we cannot rest on the notion that our competitors will not go up the value chain and also do this business now or in the near future. I am much more optimistic about wealth management. Although it will not create a great deal of employment, it does involve very highly skilled and very competent professionals, and it will spur the financial services industry and bring about spin-offs in terms of other benefits. I am optimistic because the new set of incentives which has been introduced has really broadened the criteria under which investors can qualify for tax exemption. I would like to record this sector's appreciation of the tax exemption which has been introduced to exempt all foreign-sourced income received in Singapore by resident individuals. This will really help encourage the flow of funds back into Singapore and create a dynamic fund as well as wealth management industry. Lastly, I would like to comment on babies as a mother, working professional and woman.”
“As mentioned, the three-year tax exemption, in terms of taxable income up to $100,000, will free up valuable financial resources to be reinvested in terms of upgrading as well as regional expansion. Here is another area which I feel that the Government could have been a little bit more generous because, in the early years, a typical setup would have very lean profits, or, in fact, losses as well. I think it is great that a lot of incentives have been introduced for entrepreneurs, for example, the idea of loan securitisation is a good one too. Because it is about funding and this is one of the challenges that entrepreneurs have long talked about. And talking about that, I would like to raise the issue of fund-raising expenses. This can be very significant, be it mortgaging your house to raise funds, be it a public share offering, or in the case of issuance of bonds to raise funds. Businesses here, again, have been calling for these expenses to be tax deductible in order to lessen the burden on fund raising. Perhaps, the Finance Minister could kindly take this into consideration. On hub incentives, these are commendable. The maximum duration for regional headquarters incentives has been extended from three to five years. I see this as a very significant measure in attracting regional SMEs to locate in Singapore as well as for our own SMEs to go regional and then global. Also, likewise the extension of the Pioneer Incentives from 10 years to 15 years, I think, is a very timely move, in the case of MNCs moving out of Singapore. And this will help to keep them here, it is not just about buying time. It will also encourage MNCs to upgrade their activities into higher value-added activities. Besides, it will also encourage projects with long gestation to locate in Singapore.”
“Moving on to entrepreneurs, I think they ought to be feeling happy. Previously, I have spoken of the need to recognise the value for all types of industries and not just high-tech. So it is nice to see that this is being taken on. It is great to see many of our industries, in recent years, and they are not necessarily high-tech, they are in fact low-tech or no-tech engaged in fish-balls, popiah skins, and so on, making their mark in the regional as well as the global arena. All these industries were classified sunset, and I suppose they knew better. From the regional and global perspective, the sun never set for them. It is also good that some of these industries are engaged in products which Singapore does not have a competitive advantage, like the selling of sofa, leather tanning, when we do not have the capital industry. And, also, in terms of beating the Japanese in the sushi game, with very innovative ideas like the portable conveyor belts. So kudos to our entrepreneurs for their resourcefulness as well as their creativity. It is a really welcomed factor that Technopreneur Investment Incentive is now known as the Enterprise Investment Incentive which captures all enterprises, all start-ups, not just high-techs. This really is a great leap forward, in terms of our promotion of piling up the entrepreneurship spirit. Not only that, it represents a shift in mindset, not directing business in a particular direction but actually encouraging individual investors to believe in what they do and to carry on what they do best as well. Other incentives for entrepreneurs are also noteworthy.”
“Withholding tax is meant for foreign parties selling goods and services to Singapore. However, invariably, this gets picked up by the Singapore party, making the acquisition of technology and know-how that much more expensive. So the cutting of withholding tax on royalty for the right of use of technology and intellectual property is certainly a step in the right direction. However, more can be done. And this is one instance where I feel that the Government could have gone a bit further and extend the withholding tax for payments on other areas like interests, rentals and other services as well, because this will make it, from the point of view of business, a lot more lower. It would also be helpful if the definition of "royalty" can be clarified. Because it would appear that the treatment for payment of information and know-how can be treated differently from payment for use of services in connection with information and know-how. I think the two are so interlinked that they should both enjoy the same reduced tax rate. Another related area concerns the writing down allowance of intellectual property rights (IPRs). Businesses were also hoping for a relaxation, in terms of criteria, in situations where a taxpayer is not the legal owner, but certainly it is the economic owner of the intellectual property right for an agreed period of time. Before I leave intellectual property rights, I might as well say that, the writing down allowance claim is for three proprietaries. But in case of tangible capital assets, it is from one to three. I think both intellectual property rights, as well as capital equipment, are both essential in the manufacturing process to generate income and perhaps this discrepancy ought to be closed.”
“The Government has been calling on all Singaporeans to be much more entrepreneurial, to dare to take the risk, and I think this culture ought to pervade all levels of society, including the democrats perhaps. Now, I would like to touch on specific elements of the Budget 2004 for consideration for future refinement and extension. Firstly, corporate tax. The 2% cut is certainly welcomed although it was expected, as I said earlier on. I think the business community never for once took it for granted that it would be implemented. So the Government kept to its word and this sends out a very important signal about the serious intent on the part of the Government to keep the business environment competitive. So that is very important. And now, the discussion is about: what's next? Should it go down to 17 1/2%, like Hong Kong? Or should it be lower like 15%? My own view is that we should not keep a closed mind about future options. That is said. We need to know and that is the general feeling of the business community as well that our tax regime, taken as a whole, without looking into specific measures, is one of the most attractive in the world. So there is a limit as to how low the tax rate can be. We certainly do not want to emulate other countries with huge long-term budget deficits. And, also, although low tax rates are important to keep costs low, there is also the other political as well as economic consideration. Here, I would just like to say that, let us keep our minds open and evaluate the situation as and when necessary. Let us not make 20% a sacred cow. The reduction of withholding tax from 15% to 10% is definitely viewed as a very significant step, and another sacred cow being slaughtered.”
“So Budget 2004 brought cheer to the business community with the 2% tax cut. It was expected, but it is still appreciated. Budget 2004 also brought cheer to, I would say, several important sectors of our economy, such as financial services, hub services and also for entrepreneurs. Incentive measures have been targeted at these sectors. All these are very much in line with making our business and investment environment that much more competitive and I think here it is noteworthy to record the Government leading by example by cutting its own expenditure. Although some have said that perhaps 2% is not enough, it is a sure start. I suppose individuals might not be so happy because there is no tax cut for them yet, but the commitment remains there. There is also no increase, in terms of personal reliefs, although a lot of calls have been made in the past to get this much more realistic and also in line with actual living expenses. It would have been nice for them not to feel left out, perhaps with the 1% tax cut and this would have increased disposable income and high pub consumption and also lift up optimism which itself is a great multiplier component in any economy. The tone of the Budget 2004 is considered cautious and conservative. It could have been a bit bolder. We say this because the economy is looking up and the last three years' budget deficits have been smaller and calls for a bit of minor celebration here. And really, it does present a wonderful opportunity to push ahead with the remaining recommendations of the Economic Review Committee. I say this because it also represents, in part, a bit of entrepreneur there.”
“Mr Deputy Speaker, I would like to speak from the point of view of business. Budget 2004, to me, is a focused act of fine-tuning, reflecting a government which knows what it wants to achieve. I am very glad that Budget 2004 continues to stay on course - the course set by the Economic Review Committee and also by the Finance Minister in his last two Budgets. Our strategy is about globalising our economy, diversifying our economy, making our business environment much more competitive and also fostering the spirit of enterprise and creativity. An essential part of our strategy is about transforming our tax system into one which relies less on direct taxes. So we need to lessen the burden of direct taxes on our economy, on businesses, on individuals, so as to attract investments and talent and also we need to encourage Singaporeans to create wealth for themselves. So to balance the Budget, quite rightly, we need income streams and revenue streams from other areas and that will be in the area of indirect taxes, GST. Many of the recommendations made by the Economic Review Committee have already been introduced or announced. So it is not surprising there is not a great deal of high expectations in terms of dramatic changes or surprises. Indeed, the focus of the Budget shifted somewhat to babies, about growing population because of a very serious decline in birth rate. And this is right because it is a long-term problem and we need to address it early because, without people, we cannot hope to achieve or sustain a vibrant economy. Our economy has improved, exports are up, business profits are up, also employment. The mood is definitely much more cheerful and optimistic, compared to what was the mood just not so long ago which is all gloom and doom.”
“Here again, ICPAS, as demonstrated in the restructuring process, is very willing to work with the Government and other constituents of the capital markets to ensure that the profession continues to gain the confidence of the various parties concerned. Having said that, it should again be noted that the accounting profession was imposed on the corporate system in order to promote trust and order. The accounting profession has evolved and has been transformed over many years. Now, the Institute will have to redefine itself but it can always continue to actively act as an agent of societal regulation and continue to contribute in many ways. As a vehicle of communication between the Government and its members - as I have said, ICPAS is a professional body with 16,000 members - a united voice would be preferred in negotiation and compromise. It can continue to render its expertise to various wings of Government, get actively involved in the establishment of accounting and auditing standards, and ensure competency, professionalism and ethical standards, especially in a world of changing values and ideals. It can do all these and more. Sir, I would like to conclude by saying that the financial market will benefit from all these improved arrangements. Nevertheless, the Institute has to work with constituents of the market to ensure confidence and trust in the corporate system. On that note, Mr Deputy Speaker, Sir, I support the Bill.”
“The Accountants Bill further introduces the Practice Monitoring Programme and sets out consequences for accountants who fail the practice reviews. It is common knowledge that the Sarbanes-Oxley Act in the US is a reaction to the situation there. Many consider this Act to be an over-reaction. So, the point to be made here is that, in formulating regulations, it is always good to have good necessary regulation and not over-regulation because, by taking on very strict rules, the flip side is that there is always a cost to it and it can also retard entrepreneurship. Having said that, I suppose we can take comfort that these failures and losses are a distance away, and we can comfortably take and read the signal signs and implement preventive measures, which we are doing. As Singapore aligns itself with the major and more developed markets, it should be noted that this heightened scrutiny, an environment of stricter controls, will become global facts of life for accountants in Singapore. Already, much has been introduced, eg, audit exemption for dormant companies; for companies with turnovers below a prescribed amount, there is now no longer a requirement for qualified secretaries; accountants now have to go through the Practice Monitoring Programme, and so on. Whilst we understand and acknowledge the spirit and intentions which underlie these reforms, it should be noted that it is a fact that these reforms do impact on the accounting profession and will affect the smaller companies in particular. Globalisation will bring about increasing dominance in terms of self-interest in the conduct of corporate events. We acknowledge that change is needed and provisions will have to be made for a much more far-sighted accounting profession to adapt to these changes.”
“That being said, the market, as it is today, and particularly in the US, is challenged by this multifaceted lack of trust in the corporate system, and corporate reputation, which has taken a long time to build, has been diminished and needs rebuilding. It will take some time - as we often say, it will get worse before it gets better - but there are global efforts amongst those who see an urgent need to gear up on damage control. Of course, the US, where all these took place, is at the forefront of reforms and initiatives, and a significant outcome, as mentioned by the Minister as well as Mr Andy Gan, is this Sarbanes-Oxley Act of 2002 which introduces sweeping legislation targeted at the core issues of accounting, auditing and corporate reforms. Elsewhere, as has been mentioned, in the UK, Canada, Australia, the European Union, they are all actively engaged in all these reforms. So, our changes are indeed in line with international capital market initiatives. And I would say that, because Singapore aspires in this globalised world to further enhance its standing as a financial centre by taking a leading role in raising standards and so on, it will surely bode well for Singapore as a whole. In 1999, the Ministry of Finance set up three committees to look into corporate governance practices, standards of disclosure, and the legal and regulatory framework. As a result, we have the Corporate Governance Code in 2002, the establishment of the Corporate Disclosure and Governance Council in 2002, there have been revisions and further ongoing revisions to the Companies Act and also to the regulatory framework not only to accord with, as we say, best practices in terms of governance, but also to promote a much more competitive economy.”
“Management would want to present a much more robust and positive picture of the businesses they run, but stakeholders require an objective view. Sir, the responsibility of providing this objective view rests on auditors and this helps to instill public trust in financial statements of companies. I would like to say that the Institute of Certified Public Accountants is committed to maintaining this public trust not only in the accounting process but also in the auditing process as well. The accounting profession is an important constituent and pillar of the business community and the capital markets, as Mr Andy Gan has pointed out, and it is therefore important that the Institute, which has some 16,000 members, is strongly supported by the business community and the Government. It should be regarded as an important beam in the economy to support capital markets. Therefore, the reconstitution of ICPAS as a society should not be perceived as diminishing the role, standing and pride of the Institute and the profession. In this regard, I would like to thank the Ministry of Finance for its understanding and support. As quite rightly pointed out, very large corporate failures as well as investor losses have heightened the need to restructure the regulation of the accounting profession. I may not be entirely objective here, but I would say nonetheless that some of these losses and failures have sometimes been unfairly blamed on accountants, because it should be noted that there have also been great lapses in institutional structures and opportunism reflected in managerial conduct.”
“Mr Deputy Speaker, Sir, as the only public accountant in this House, and also as a council member of the Institute of Certified Public Accountants (ICPAS), it is my duty to comment on these Bills. First, to set the tone right, I would like to thank the Ministry of Finance for its close consultation with the Institute of Certified Public Accountants in drawing up the Bills which affect the accounting profession. As earlier said, the Accounting and Corporate Regulatory Authority Bill will see the merger of the Public Accountants Board, which used to regulate public accountants, and the Registry of Companies and Businesses into one body, the Accounting and Corporate Regulatory Authority. This Bill, in addition, will also see the reconstitution of ICPAS into a society. Let me preface my comments by also recalling the role of auditors which has evolved since the early days of industrialisation. The primary role of auditors is to provide assurance to financial statements to stakeholders, ie, shareholders, creditors and the public at large. It also acts to serve as a check on management, so that they will continue to act in the best interest of all parties concerned. This reporting function of auditors is very crucial to the proper functioning of financial markets because it will help to ensure that reliable and relevant information is provided to stakeholders and fund providers to help them make informed decisions as to where to place their financial resources. So, it all contributes to the effective and efficient functioning of financial markets because, without checks, management will have a free rein, and auditors come in to make sure that that does not happen.”
“I do not think we can tackle all problems at the same time. Some have to be put in the parking lot. The main thing is that there must be a recognition that we have a problematic situation here and there is a need to change, and new solutions got to be found. The original objectives of the CPF cannot be fully met by the old model. So there must be a transition from the old model to the new model and help needs to be injected here. The future is never going to be certain. But there have been a lot of debates already, and a lot of time spent on debating about what our future should be and the solutions needed, like the Remaking Singapore, the ERC, and the debates in this House. I am confident we do have a blueprint for the future which looks promising. In businesses, we always say that our competitors are also not stupid. We all have the same strategies. At the end of the day, the team that comes together, the team that executes well, is the team that wins. So, let us execute together and support the Prime Minister and the Government.”
“So, we need just to recognise that certainty is a luxury which we cannot take for granted. But the CPF retuning will produce a lot of adverse results because it is so linked to many aspects of our lives. We are glad that the Prime Minister has said and recognised that this retuning is just not about re-scaling of dreams but it will bring about real and considerable hardship to many. We are all looking forward to hear additional assistance measures that DPM would be announcing. Just a few remarks about the HOPE programme which has been said to be comprehensive, and yet there was a Straits Times' report about a family with an income of $680 who was not able to qualify because they had two "0" levels too many. So, here again, because we live in exceptional times, it is important that the bureaucrats exercise flexibility and, as Ms Indranee has said, common sense in the implementation of policies. A lot has been said, but I would like to commend the Government for the courage shown, to take on difficult and unpopular decisions, and this retuning of CPF squarely falls into it. It will cost you votes if you have an election tomorrow. Fortunately, we are not having an election tomorrow. It will not be until a few years' time, by which time, the benefits of all the changes which are being proposed would have been felt. We have used a lot of tools already, but these tools have to be relooked, like the tools relating to taxes, levies and so on. But the CPF is one far-reaching tool that will have immediate effect. On hindsight, again, perhaps we were too hasty in restoring the CPF cuts which were introduced before. As I said, it is a blunt instrument but it is a very effective instrument. It will produce a whole range of adverse effects and new solutions have to be found.”
“Also, many commentators have remarked that the Government has played too big a role in our economy, too big a role in our society, and that is why Singaporeans are by and large very reliant on the Government and run to it for solutions to all problems. But, of course, this is easy to say with the benefit of hindsight. The high wage policy did serve us well for a long time, many aspects of it, and benefited many Singaporeans as well. Likewise, many Singaporeans feel very comfortable to be hand-held, to be led and to be molly-coddled by the Government. But the circumstances, as said by so many people, have changed dramatically, and it is also time for us, Singaporeans, to assume new mindsets, new attitudes and really be much more entrepreneurial, much more self-reliant and also to understand the real meaning of adding value. It is also enlightening to note that the Government too has changed - heeding feedback, looking at shortcomings and being ready and willing to correct them. I am quite amazed at how quickly the PM changed his stance on bar-top dancing. A lot has been done - undoing red tape and bureaucracy; taking away cumbersome and stifling regulations. Of course, we continue to gripe that it is not far and fast enough. But it will be fair to say, at least, all these measures are being taken seriously and there is no pretending that it does not exist. This CPF retuning is a classic example of a good solution - breaking down the rigidities, making it flexible, and taking away the statutory burden on businesses and also not putting our older workers at risk. Of course, it will produce uncertainty, but we live in a very uncertain world. Just the last six months alone, we had been wrecked by so many crises, SARS included.”
“Up until the Prime Minister's National Day Rally speech, the business community thought that it would just be a maintenance of the rate. And after the PM's announcement, there has been great debate - how far will this go? Of course, everybody has expected a 6% reduction but the PM has just announced that it will be a moderate 3%. We respect the decision, and we appreciate that move. The Prime Minister also touches on the part of home-owners, what will this do for their mortgage payments. And then there is also the worry about consumption and its effect on other sectors of the economy, calls for cuts in Government fees and taxes, and also even for the size of the civil service to be reduced. I think that all these are not frivolous comments, and I am sure the Government will take all these in its stride. And, in fact, the PM had said that the CPF cut is just part of a large package of business costs which the Government will be seeking to reduce. I do not wish to add to this debate. But I think it would be helpful and valuable to recognise that the PM's proposals are really steps in the right direction, and we should fully support the proposals which have been made. The Prime Minister did mention Jack Neo twice in his National Day Rally speech. So I might paraphrase Jack and say, "Prime Minister and the Government not stupid". Indeed, the Prime Minister's track record has been a very excellent one, although we cannot say that it is entirely flawless. It is not possible to achieve a flawless track record as well. This move to modify the CPF system is, in fact, a recognition that the high wage policy has contributed to our present economic difficulties.”
“Sir, since the Prime Minister is here, let me first congratulate him on an outstanding National Day Rally speech. It was very heart-warming and inspiring and, indeed, many had commented that it was his best speech ever. As was like good wine, he gets better with age! Businesses and investors, of course, wanted to hear the Prime Minister's views on the economy and the signals that he was trying to send out. So, it is not surprising that the PM concentrated much of his speech on the present economic difficulties. Yes, very true, our landscape has changed dramatically. Yes, we took away jobs from others. But, today, that fantastic economic strategy is increasingly and ferociously being followed by even more lower cost regimes in the region, and specially India and China. Their economies are so large that they can impact other economies in such a big way and in a very adverse way as well. Being a small economy, we just cannot escape the onslaught. Other skill gaps and advantages have also been eroded. We seriously need to address our competitiveness and revive our economy. Therefore, the warnings of multi-national corporations, like IBM, cannot go unheeded because they are very real. In my business too, I see our global clients disappearing, either scaling down their operations or just pulling out. It is not because they do not find us attractive anymore. It is just that globalisation has made it unnecessary for them to be here. This tide of globalisation is very real, very strong and very powerful. And those of us who can ride this tide will prosper with this trend, and those of us who cannot will simply struggle against the current. Therefore, we need to change, and the business community really welcomes the proposal to retune our CPF.”
“This lacks certainty and, therefore, is a major obstacle which has to be overcome. So if you are serious about regionalisation, entrepreneurship and globalisation, we have got to be serious about getting rid of this problem too.”
“Sir, I would like to speak on behalf of business, as has been shared many times over. Children's education ranks very highly in terms of concerns for all Singaporeans. In fact, children's education is factored into every family's decision-making. Some families have chosen to go away to seek easier education for their kids. But more disturbing are executives not taking on opportunities to go overseas because it would disrupt their children's education. Again, there are also executives who choose not to return because it is, again, about education - how to get their kids back into the system which they have grown accustomed to. In fact, I have a colleague's neighbour who was on his way from the US, and because he was unable to get the Ministry's assistance to get into international schools, he chose to take another posting to Hong Kong for many years until all his children's education was completed. As we seek to regionalise and globalise, we have got to get rid of this education obstacle. A lot of MNC chiefs have also said that we have got wonderful Singaporeans, but the minute they are asked to take an overseas posting, they will say "no". This is a real waste of opportunities, and in terms of career advancement as well. We do need people to go overseas to get their exposure and to get their valuable experience and to return to Singapore to contribute. 11.45 am Admittedly, the Ministry of Education, in the past year, has made quite a number of concessions to help facilitate their return to Singapore and to get admitted into international schools. Added to that is the second language problem and all this makes it difficult for parents to consider a posting and return to Singapore. The Ministry's assurance is on a case-by-case basis.”
“They too can become self-reliant and contribute to society as well. Sir, I urge that more should be done for special education.”
“Sir, I too would like to join the chorus to ask for more support for special education. Not so long ago, we discussed about changes for upper secondary education to develop our best and brightest. So we also ought to discuss changes for special education in order to cater for the other end of the spectrum, which is the intellectually disabled including the autistic children. I too note that the numbers have increased. Perhaps the statistician would say that this is due to growing awareness. But the fact remains, as has been said by Mr Gan, that there is a queue waiting to be admitted to special schools. I think we have a wonderful education philosophy which is to accord free and compulsory education for all our young up to the age of 12. We should include these kids into this catchment as well. Already, quite a bit has been done. We have lowered the age of subsidy from 6 to 4, recognising the need to address this problem at an early age, so that these children can gain faster and fuller development. There is also a sum of $200,000 set aside to train special teachers, but it would take time. And that is the right philosophy. If we do not have the teachers, we cannot establish the schools as well. Admittedly, there is also the cost. It costs a lot more, $12,000 as opposed to $3,000. But if we look at other countries like the US and Australia, they, in fact, have specialist teachers on a one-to-one basis. And we should also aim to achieve this benchmark as well. Because, in the past, our expectations were not there, but this has changed. In the past, we might be contented to leave these children at home and allow siblings to look after them. This is not acceptable any more because we feel that these kids too can be developed.”
“Sir, I would just like to comment on the Interim Disability Assistance Programme for the Elderly (IDAPE). Last July, the Ministry of Health announced a very generous scheme, setting aside $300 million for the disabled elderly for a period of five years and with monthly allowances of $100 or $150, as the case may be. Under the scheme, an elderly has to be at least over 70 years old, and must be possessed of at least three disabilities and also come from a family with not more than $1,000 income per head. Since the inception of the scheme, and as at 1st November, I understand that only slightly more than 2,000 people have qualified and about a quarter million dollars has been disbursed. If we do some Mathematics, at $100, we should have about 50,000 people, and for $150, about 33,000 should qualify. So it would appear that not many people have qualified, and I would like to suggest a few revisions for the Minister to kindly consider, now that we have about nine months of experience. 4.30 pm Firstly, the age limit ought to be reduced to, say, over 55 years old. Secondly, there should be a redefinition of disability again, so as to capture more people. I was a little taken aback that a patient in a wheelchair was told that she was not disabled enough because she can sell tissue papers to earn a living. Under such difficult conditions, we ought to reconsider the definition of disability. Thirdly, we can also increase the allowance of $100-150 because it does cost a lot more to look after a disabled patient. So I would like the Minister to kindly reconsider because it is really heartening to know that under such difficult times, a very generous fund has been set up, but it is not very meaningful if not too many people qualify.”
“But, as with all things in Singapore, it would need to be spearheaded, championed and sponsored. Perhaps, to incentivise the private sector or, in fact, the VWOs, we need to put some real incentives in it. One of the main prohibitive areas is land cost again. That is why I have directed the issue to MND. Perhaps it could consider making it more affordable, so that the whole idea can then take off. So, what I am saying here is that it remains a good idea and we should not allow the lack of success in the past to deter it. 12.00 noon”
“Sir, we have a fast-aging population. Indeed, many Members have raised issues relating to the elderly and, to be fair, many in the Ministry have paid attention to these areas. I would like to add another to the list, and this is to resurface the issue of retirement villages which was brought up before but has not quite taken off. The whole idea is to allow the elderly to live together and, from the logistics point of view, this has merit because it will allow for care-giving activities to be better organised, and it will also be easier to conceive recreational and safety facilities as well. But it has not quite taken off, because what we have at the moment are some HDB blocks across Singapore and, as one of the social workers said to me, it is a colony of the old, the frail and the sickly. We will get a funeral every other week. So, it is quite depressing. We have organised the hardware, but not really the software side. Admittedly, this is a new concept, and it requires some change in mindset. It also requires time for the idea to gain acceptance. That is why people say it is far easier to integrate the old with the young, so that their spirits can be uplifted as well. But this idea of retirement villages has, in fact, worked well in other countries, and perhaps we can learn some best practices and ideas from them as well. In some countries like Thailand, retirement villages are in fact set up even through the lure of foreigners. But I am not advocating that this should be done for non-Singaporeans. It is just an idea for Singaporeans. So, we should move from the concept with just a cluster of houses, and we should add software to it, eg, get it well managed, get the facilities in.”
“My comment here is that we are now very experienced in knowing what sort of measures we should have to achieve a smoother traffic flow, because we really do have a very good road system. We do not have road congestion and all these promote Singapore as a business centre. But I think we need to consolidate. We need to simplify our system, concentrate on those measures which work towards achieving a smoother traffic flow and really unravel the very complex web of fees, charges and taxes, indirect as well as direct. At the end of the day, a simpler system would be much superior.”
“Sir, I would like to focus my comments on vehicle and fuel taxes, and their impact on transportation costs as well as business costs. As we all know, financial measures, whether they come in the form of incentives, disincentives and penalties, have always been used to achieve social and other objectives. For example, we have the foreign worker levy to control the population of foreign workers, and we also have incentives given to couples to have larger families. But I think nowhere do we find these measures being widely used than in the case of motor vehicles to control road traffic congestion. Over the years, we have seen penalties after penalties being introduced and levelled against car owners as well as users. This broad and complex range includes excise tax, road tax, ARF, COE, fuel and vehicle taxes, and also parking fees. All these have added on to the transportation cost. These have made it very expensive and, hence, have also affected business costs, because transportation cost forms a quite significant portion of business costs, and will therefore erode our business competitiveness. Quite apart from having a very complex system, it has also produced a few quirks. For example, I would like to cite the example of second hand vehicles. It is much more profitable to scrap than to sell them as second hand vehicles. This is sheer wastage, because cars can be used beyond five years. They can be used for 10-15 years, or more than that. Quite apart from wastage, we also have a significant capital outflow because we import cars. The second quirk is that businesses which use diesel for their equipment have also to bear the burden of diesel tax when they do not contribute to road congestion.”
“So the tax view must be also aligned with the way these products are being developed. So, in short, I would like to urge that tax accounting, as well as businesses, look at all these transactions with the same set of eyes.”
“I would just like to make a few remarks about the basis for tax. The Budget now allows for deduction for start-up costs which is a move in the right direction, because this will not only spur new businesses but also align the tax views with the way businesses view these transactions and costs. Over the last few years, a lot of accounting standards have also been introduced so that it closes the gap between accounting and the way businesses operated so as to ensure that financial reporting becomes more relevant to businesses as well. But businesses have become much larger, much complex and also going global and regional. That is the way our businesses are going as well. Therefore, there is a need to close the gap between a tax treatment, accounting treatment, and the way businesses see the way they operate as well. I would just like to highlight a few instances where there are differences. For example, in the area of foreign exchange transactions. More and more, with fair value accounting, both unrealised gains, as well as losses, are included in the income statement. However, the tax treatment is to continue treating them on a realised basis. Secondly, I would like to bring up the situation about cost of funding. If you go and borrow money from the bank, interest is allowed. But if you decide to go through a different route and obtain funding through shares, or bonds, the cost of borrowing, the cost of funding is not allowed. Thirdly, in the area of financial services institutions, this is very important to Singapore and is an area we would like to develop. More and more complex instruments and derivatives are being developed. There is a huge gap even in accounting, but certainly taxed with the way these products have developed.”
“Again, in the international communication capacity, this is such a key building block to our knowledge economy, and the world is getting more on-line, not less. And it is good that we recognise the vast benefits that our economy can tap into the widest network of capacities, because all the countries have already done it. The UK, Australia, New Zealand and Ireland have introduced fiscal measures to favour their operators. So, if we do not do this quickly enough, our operators will be competing in a world which is heavily stacked against them. We also benefit because we are able to tap into the benefits of an on-line world, which is already upon us. I would like to conclude by saying that Budget 2003 really paves the way for our businesses to be truly global. We have to rise to this occasion. Sure, we have to grapple with the economic problems which are right in front of us, but there are also opportunities abound outside there. So, this Budget recognises the importance of globalisation. It seeks to remove some of the obstacles in the way of businesses and it also seeks to reward those businesses that overcome these problems. So, it is now up to businesses to progress from here and also up to the Government officials to speedily implement the pro-business measures that have been announced.”
“We live in a world that is powered by technology, by information, and together with e-commerce, every aspect of our lives is touched by an interplay of these three elements. We could either resist it by instituting protectionist tax measures that would make our cost of business a lot more expensive in accessing the latest developments and really make ourselves much more efficient or we could embrace change. So, I am very happy in this regard that the Government has chosen to embrace change. I applaud the measures taken to ease and to encourage the ownership of intellectual property rights, because in an e-commerce environment, everything and anything can be patented. So, by encouraging the ownership of intellectual property rights, we have a fighting chance to spawn and to sponsor the Amazon.com of the world. And here, our status is clearly raised as a hub for intellectual property rights, because no longer do businesses have to worry whether they will qualify or whether they will be favoured for writing down allowance on a case-by-case basis. The exemption of withholding tax for digitised goods and services is also a very farsighted move to really put Singapore businesses on the cutting edge of technology. Because purchase of digitised goods and services becomes part of life these days. Information reports, data, analytical tools are all delivered electronically, and it is a "must have" for businesses in order for businesses to be effective and to be efficient. So, with the exemption of withholding tax, businesses can now have all these "must haves" at affordable cost. I would now also touch on Exemption from Withholding Tax for Payments for Cable Capacity as well as Writing Down Allowances for Indefeasible Rights of Use.”
“So, businesses, both new and old, can look forward to working with Mr Lim who will be rooting for their cause, causing a mindset change, and also the swift implementation of all the pro-business measures which have been introduced. I would now like to talk about start-up costs, which are now allowed as a deduction against business revenue. This is clearly a step in the right direction. This is what business is all about. You have got to spend your dollar first before you can earn a dollar. In fact, businessmen have always wondered why they cannot get the taxman to think in the same way as them - to view business transactions in the same way as they view business transactions. So, this is a move in the right direction, alignment of thinking, alignment of how businesses operate. On the subject of start-up costs, I wonder whether the Finance Minister would also kindly consider extension of this concept to look at group relief as well as the pioneer incentive scheme. For group relief, again on the entrepreneurship drive, whether this could also be applied to the losses of overseas subsidiaries and whether they could be used against the income of investors, both corporate as well as individuals. For the pioneer incentive relief, it would also be good if this could commence when businesses start to make money rather than when they commence business. This is all in the concept of start-ups, that costs would necessarily be incurred in order for businesses to make money. I would now like to move on to the specific tax measures which I consider progressive. First, on the Automatic Writing Down Allowances for intellectual property rights, and then on the Exemption of Withholding Tax for Digitised Goods and Services.”
“Along with this sacred cow, a lot of the other items on the business wish list, together with the ERC recommendations, have also been acceded to. The ERC comprises more than 1,000 people. So, it is a tremendous feat to go through the whole list of issues, ideas and recommendations. I will record that as an achievement in its own right. Amongst the many recommendations, the ERC seeks to see lower cost in doing business and also to spur the efforts in entrepreneurship. I am happy that both areas have been adequately addressed. One area is the CPF. The CPF comprises a major cost component. The decision to freeze the CPF for another two years is very much welcomed by businesses, because it provides that amount of certainty in structuring costs. I know CPF features very heavily in all aspects of the lives of Singaporeans. It is not just about the retirement nest-egg. It is about the stock market, property market and it is about businesses. So, any policy decision on the CPF must be consistently applied, so that there is certainty and the Government should not flinch in the face of pressure. In 1997, we faced the Asian economic crisis. The Government reacted very well with a massive cut in the CPF. That helped businesses a great deal. But it got restored quite quickly at the first hint of recovery. And with hindsight, we wonder whether less haste should be applied because the second economic crisis came soon afterwards. I also applaud the Government for taking all the necessary measures to support and to encourage entrepreneurship, and also the appointment of Mr Raymond Lim as the Minister of State for Entrepreneurship. This is really what "walking the talk" is all about. This is real commitment. This is sponsorship at a very high level.”
“It has been said many times over that businesses have long lobbied for this concession but, for a long time, the tax authority has tenaciously clung on to it, and businesses have all but given up. In fact, one businessman said to me, "Good luck to you guys in trying to push this one through." So, we guys got lucky this time round, because it got introduced in the Budget. And, clearly, this is a bold step going forward. The exemption covers three areas - branch profits, dividend income and service income. And we would also ask the Finance Minister to kindly consider the exemption of interest income as well, since we have already introduced it for domestic interest income. This exemption is very important, because it really narrows the gap between us and Hong Kong. When businesses consider the location of HQ either in Hong Kong or Singapore, the tax treatment of foreign sourced income has always put Hong Kong in a much more superior position. So, this exemption closes the gap and I think we deserve a big tick instead of a little cross in our analytical spreadsheet. This will not only attract businesses to Singapore. It will also heighten wealth management for the financial services industry and will also give the entrepreneurial effort a big boost as businesses go out of Singapore. What is more important to note here is, of course, the change in the Government's stance of not allowing exemption because we want to prevent abuse. There was some worry of round-tripping, transfer pricing and denying revenue. So, it is heartening to note that the Government has abandoned this so-called "punishment mentality" and has taken on a much more enlightened approach of embracing a much broader vision of globalisation, rather than the narrower vision of preventing abuse.”
“We do face very extraordinary circumstances and you have articulated that the macro-economic figures show that we have a small growth last year, and we will also have a forecasted smaller growth this year. But, as has been said by many, the mood on the ground is rather gloomy because businesses are not doing as well, and quite a few are on the verge of experiencing collapse. You also have bad news regarding unemployment, the PSA lay-offs, the HDB lay-offs and also the prospect of war in Iraq and terrorism. All these heightened the fear of unemployment, uncertainty, as well as pessim- ism. So we do need some exceptional measures to counter these extraordinary circumstances and we are glad that a deficit budget has been planned, although some may say, and some already had said, that perhaps the Government has been cautious, not entrepreneurial enough in taking a few risks and whether the budget deficit is the inevitable result of poorer revenue coming out from a poorer economy and also from a smaller rise in GST compared to the results that could have been computed based on deliberate efforts to boost the economy and stimulate businesses. So there are some disappointments in Budget 2003, one of course is the non-reduction of the tax rates for corporate as well as for individuals. Many had hoped that there would be at least a one percentage point reduction in the rates, but I suppose those hopes were dashed on Budget day. Having said that, I think the disappointment has been offset by some real concessions, and by the slaughtering of yet more sacred cows. One is the exemption from tax of overseas income remitted to Singapore.”
“Mr Speaker, I shall speak in English and I shall not talk about labour pains although I am quite experienced here. I shall speak from the point of view of a practising accountant, serving the business world. And I would like to applaud the Finance Minister for what I would call a progressive budget. It contains some very far-sighted elements that will yield us significant results in the long term, although in the short term we may not have such good returns. Still there are many sacred cows which have been slaughtered and also quite a few significant policy shifts. I would like to take Budgets 2002 and 2003 as a package. So I see Budget 2003 as continuing the spirit of decisiveness and boldness which was established in Budget 2002. And the two budgets really set in motion the transformation of our tax regime from one that has been considered somewhat insular, somewhat domestic, to one that clearly favours the globalisation of business in a global world. There are also efforts to level the international playing field, and in so doing, would also make our environment, our tax regime, much more conducive for foreign investments. I would like to applaud the Finance Minister and Government for planning a budget deficit for the third year in a row. The Government has said that a budget deficit would be inevitable in difficult times. But I have got to say that not every Singaporean believes that statement because in the past a balanced budget has always been a long held Government sacred cow. So that had been slaughtered and I suppose we can slaughter our own scepticism as well.”
“From a statistical point of view, we are also talking about small numbers against a very large group of Muslim citizens. Therefore, the statistical chance of letting a terrorist through our organisation, I think, is also quite low and remote. My point here is that, on the part of employers, there is no need to develop elaborate processes to sniff out so-called potential terrorists. But what is important for us to do, as I said earlier on, is to make that special effort to be fair, and to be seen to be fair, in our treatment of our Muslim employees. We must simply not let the situation get out of hand. Because if we do so, we might have to face up to demands for positive discrimination for groups, which feel they have been treated or discriminated against, for their particular problems to be specifically addressed. This is the case in the US when they have legislation specifically drawn up for minority groups and also for women. So, we do not want legislation to be enacted because it is cumbersome, and it is counter-productive. But, as employers, as corporate citizens, we have got to preserve that right against legislation and, therefore, we must do everything we can to be ever mindful that we are seen to be treating our Muslim counterparts as fairly as possible. Our Muslim community too, on their part, can also contribute to this mutual tolerance, respect and moderation, because we have a collective interest here. We have a collective interest about our well-being and our national security. Together, we have much to achieve, we can triumph. On that note, Sir, I support the motion.”