Josephine Teo
Singapore
“The Government's risk-calibrated approach to data security in artificial intelligence (AI) systems was explained in a written reply, given on 9 January 2024, to related questions asked by Dr Tan Wu Meng and Mr Gerald Giam.”
“Access to frontier models is helpful for specific use cases, such as advanced research and cybersecurity. However, these form a small proportion of artificial intelligence (AI) demand. For most industry, Government and research uses, capable models are already available.”
“The Government tracks the development of technical standards for identifying artificial intelligence (AI)-generated content, including watermarking and digital provenance approaches, as part of broader efforts to manage AI-related risks.”
“Upon receiving a valid report of intimate image abuse, the Commissioner of Online Safety is empowered by law to direct Online Service Providers (OSPs) to disable access by Singapore users to the specified harmful online material. This direction may be extended to cover identical copies found on the platform.”
“The Government is committed to keeping children safe online. We have announced plans to extend age assurance requirements to designated social media services, including requiring platforms to keep users under 13 off their services.”
“Under the Online Safety (Relief and Accountability) Act 2025, the Commissioner of Online Safety is empowered to issue directions to platforms to remove specified harmful content, including intimate image abuse.”
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“Madam, as is the case for many types of services, there is uneven distribution of demand at specific times of the day and at specific locations. What is quite evident today is that operators are sensitive to the mismatches between demand and supply and have made efforts to address them through various surcharges. So, whilst it is unsatisfactory from the commuter's standpoint, they have gone some distance to addressing supply and demand mismatches. The taxi drivers themselves are quite familiar with the different surcharges and they respond accordingly. As to the Member's question on whether we should have a single call booking service, this is something that we can look into. But I should add our priority right now is to address the need for greater simplicity to fare structures. Page: 29”
“Mdm Speaker, taxi fares were deregulated in September 1998 to allow taxi companies to set their own fares, so that they can be more responsive to market conditions. The taxi fare structure has since evolved with different surcharges to better match taxi supply with demand by giving incentives to taxi drivers to serve locations and time periods where demand is high. The charging of different fares for different types of taxis by Page: 28 the same operator is not a recent phenomenon, although we are seeing more of it lately, which taxi operators have attributed to the different cost and rental rates for different models. The varying rental rates depend on the model and age of the taxis which some see as a fair reflection of preferences of the taxi drivers. Although fares are deregulated, taxi companies are required to publicise fare revisions at least one week in advance in the media and on their websites. Taxi fare information must also be made available on taxi stand information panels, on LTA and PublicTransport@SG websites, and on fare decals in taxis. We recognise that the current taxi fare structures are complex and confusing for commuters. LTA will work with the Public Transport Council (PTC) and the taxi companies to study how the fare structures could be made simpler and easier for commuters to understand, taking into consideration the impact on taxi drivers and availability.”
“This is a related amendment to section 6 of the Income Tax Act. Similar to the amendment to clause 2, this provision ensures the confidentiality of any information shared by IRAS with the Commercial Affairs Department and the Singapore Police Force. [(proc text) Amendments agreed to. (proc text)] [(proc text) The Schedule, as amended, ordered to stand part of the Bill. (proc text)] [(proc text) Bill reported with amendments, read a Third time and passed. (proc text)]”
“Mdm Speaker, I beg to move the amendment* standing in my name as set out on the Order Paper Supplement. [(proc text) *The amendment reads as follows: (proc text)] [(proc text) In page 8: to leave out from "this" in paragraph (b) in the Second column against item 1(a), and insert – (proc text)] Page: 97”
“Mdm Speaker, I beg to move the amendment* standing in my name as set out on the Order Paper Supplement. [(proc text) *The amendment reads as follows: (proc text)] [(proc text) In page 2, line 28: to leave out from "this", and insert – (proc text)] [(proc text) Amendment agreed to. (proc text)] [(proc text) Clause 2, as amended, ordered to stand part of the Bill. (proc text)] [(proc text) Clauses 3 to 9 inclusive ordered to stand part of the Bill. (proc text)]”
“(proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mrs Josephine Teo]. (proc text)] [(proc text) Bill considered in Committee. (proc text)] [Mdm Speaker in the Chair] [(proc text) Clause 1 ordered to stand part of the Bill. (proc text)]”
“The other three GST amendments are generally meant to facilitate tax administration: Clause 5 allows the GST obligations of an existing local agent, who imported goods on behalf of an overseas person, to be transferred to a newly-appointed local agent. Clause 4 will facilitate the administration of GST schemes such as the Approved Refiner and Consolidator Scheme, by providing that regulations can specify who should repay GST in situations where there is non-compliance with the conditions of a GST scheme. For example, if a person had purchased goods GST-free under a scheme, and yet did not comply with the conditions of the scheme, regulations can require the person to pay GST. Clause 6 clarifies the definition of the term "refine" used in the Approved Refiner and Consolidator Scheme, by specifying that "refine" includes changing precious metals from one form to another, or refining precious metals to a Page: 95 different level of purity. The final two amendments are a consequence of other policy changes: firstly, the designation of money laundering of proceeds of serious tax crimes as a criminal offence, and secondly, the introduction of the Wage Credit Scheme which was announced in Budget 2013. Clause 2(a) allows IRAS to directly share with the Commercial Affairs Department and the Singapore Police Force information that is needed for their domestic investigations of money laundering of proceeds of serious tax crimes. Clause 7 gives IRAS the power to deduct tax arrears from Government payments to taxpayers, for instance, payments given to businesses under the Wage Credit Scheme. Lastly, clause 9 extends both amendments above to the other Acts that IRAS administers. Mdm Speaker, I beg to move. [(proc text) Question put, and agreed to.”
“Mdm Speaker, I beg to move, "That the Bill be now read a Second time". The Goods and Services Tax (Amendment) Bill 2013, or the GST Bill for short, comprises seven amendments. The first five amendments arose from our ongoing review of the Goods and Services Tax (GST) system, while the other two amendments are to facilitate IRAS' administration of existing policies. The draft Bill was released for public consultation in August this year. MOF has evaluated the feedback received and where relevant, incorporated the Page: 94 feedback into the Bill. I will now explain the amendments. First, clauses 3 and 8 allow the Comptroller of GST to seize goods and arrest persons in situations where fraudulent claims under the Tourist Refund Scheme are suspected. The enforcement powers of the Comptroller are being strengthened to enable him to carry out more thorough investigations and effectively prosecute persons who have made fraudulent claims. Second, we will refine the scope of taxpayer information disclosure. Under clause 2(b), IRAS will be allowed to disclose anonymised information to the Government, including Statutory Boards, for statistical or research purposes. This gives the Government access to statistical data that is important for policy formulation. For example, a Statutory Board can request for anonymised GST data to analyse the impact of GST on various industries. And, secondly, share information relating to professional misconduct with a relevant professional body, for example, the Public Accountants Oversight Committee. This aims to safeguard public interest by facilitating disciplinary actions to be taken by professional bodies. Both amendments are consistent with the existing provisions of the Income Tax Act.”
“Madam, in response to Mr Yee's question, the exact implementation details of FATCA are yet to be worked out. I should remind the House that we have not concluded negotiations with our US counterparts. These details have to be worked out. After the Bill is passed, if we get Parliament's approval, then we can be in the position to sort out the details of the implementation. [(proc text) Question put, and agreed to. (proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mrs Josephine Teo]. (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]”
“Mdm Speaker, I thank Ms Foo for the supplementary question. Taxpayers still have access to the judicial process through a judicial review. Now, I would just like to add that what we are seeking, in terms of removal of the court process, is not unlike the practice in the US. In the US, no court order is required for the tax authority to be able to share information. A court process is only required if the tax information to be shared applies to a Page: 79 class of entities. What we are doing is not unlike some of the other jurisdictions' practices that are already in place. In fact, in the UK, which has the tribunal that you also mentioned in your speech earlier, it is not a court process. It is something that is administrative and the powers do not reside within their judiciary. In a sense, we are aligning more closely and not deviating from what other jurisdictions are already practising.”
“The assurance we have is that their adherence to the Standard is subject to continuous peer review by the international community, and any abuse could lead to an unfavourable assessment by the peers and a negative impact on their reputation in the global Page: 78 community. Madam, in conclusion, I would also like to assure Members that as Singapore adjusts our EOI regime in support of international tax cooperation, we will push for continued international recognition of the following principles: first, EOI standards must be implemented on the basis of a level playing field across all financial centres to prevent regulatory arbitrage; second, tax cooperation between EOI partners must be fully reciprocal; third, tax cooperation can only take place within a strong legal framework that safeguards the integrity of taxpayer information and where information being exchanged is only used for authorised purposes. These principles will not remove the costs and complexity of compliance, but they will help to ensure that the financial institutions operating in Singapore are not disadvantaged, and that taxpayers' legitimate rights and confidentiality are reasonably safeguarded. If it surfaces that cooperation is not implemented in accordance with the terms of the tax agreement, then the principle of reciprocity, which I had spoken about, comes into consideration, and we would be entitled to review our level of cooperation with specific partner jurisdictions. I hope this addresses the question raised. Madam, having addressed these issues, I beg to move.”
“Where requesting jurisdictions do not explain clearly how the requested information is relevant to its investigation or assessment, IRAS has and will continue to seek the necessary clarifications before agreeing to release the information. Ms Foo had also asked about the anti-tipping off provision in the Bill. Such provisions are necessary as there may be certain sensitive investigations whose success might be undermined by tip-offs. This provision is, in fact, already part of our existing EOI regime. The only difference being that the court makes such orders now, whereas it is IRAS which will issue the order after the Bill is passed. This change, however, does not take away the right of the taxpayer to make representation to IRAS or lodge a request for a judicial review should he become aware of the request. Both Ms Foo Mee Har and Ms Tan Su Shan expressed concerns that the information obtained through EOI requests might not be used solely for tax purposes. As all major financial centres have committed to the international EOI Standard, such risks are not specific to Singapore. Singapore's way of mitigating such risks is to ensure that we have a robust tax administration that will screen the request carefully to ensure that they meet the requirements of the Standard. As Ms Tan Su Shan has noted, IRAS has been an effective gatekeeper. It will certainly strive to uphold this hard-earned reputation. Fundamentally, we depend on all our treaty partners to uphold the spirit of international cooperation and ensure that the information exchanged is used only for tax purposes, in accordance with the Standard.”
“Let me now turn to safeguards. Ms Foo asked whether the removal of the court process would affect Singapore's reputation as a banking centre. She reminded us that the Court Order process that is being removed was only introduced in 2009. Madam, having dealt with over 500 EOI requests, IRAS' experience with the EOI Standard is much better than it was four years ago in 2009. Initially, the Court Order process helped IRAS to assess the validity of requests. As IRAS gained experience, its own evaluations were increasingly validated by the Court Order process. That experience has been very helpful and IRAS is now sufficiently well-versed with the range of EOI requests and has in place established processes to evaluate them. Page: 77 To reassure Members, the removal of the Court process does not mean that IRAS will freely share information with our EOI partners. There are robust safeguards in the international EOI Standard to ensure that only clear, specific and relevant requests are acceded to. And this is the case whether or not a Court Order is needed. In particular, the requesting foreign jurisdiction will, firstly, have to explain why the request is being made, and has to put forward the case for why they are making the request. Secondly, they have to identify the taxpayer under investigation or assessment, and declare that it has pursued all available means in its own jurisdiction to obtain the information. So, firstly, explain why you want the information. Secondly, tell us who is being investigated. Thirdly, declare that you have, indeed, exhausted all other means.”
“" The cost to IRAS is, in fact, minimal, since we are merely aggregating the information provided by the financial institutions for onward transmission. Mr Yee also asked whether we could estimate the number of Singapore citizens who could be considered US persons and caught under the FATCA. It Page: 76 is not possible to estimate with any accuracy because Singapore citizens working, living in the US, are not required to register with our Embassy. So, we do not have an exact number. Mr Yee also asked, "What about reciprocal rights?" Indeed, that is our intent. And to do that, we would first need to have a Tax Information Exchange Agreement (TIEA) or a Double Tax Agreement (DTA) with the US. In relation to Mr Yee's other question, we are always keen to establish Double Taxation Agreements that will benefit Singapore-based businesses, and that, of course, includes the US. It is not confined to the US but it includes the US. Specific to the US, in fact, Singapore has been pro-active in pursuing the DTA. Our agencies will continue to work pro-actively with banks and all other relevant parties to streamline processes and make compliance easier. Where banks are required to provide information, for example, under FATCA, we will ensure that the guidelines are clear and practical. We remain open to suggestions from practitioners on what else can be done to address their operational concerns. Let me address briefly Mr Yee and Mrs Chiam's questions on whether the IGA ought to be debated in Parliament. The Government is authorised within prescribed limits to negotiate and sign international agreements, and this includes the IGA. To meet the commitments of the IGA, we need to make several changes to our Income Tax Act. And for these changes, we are seeking Parliament's approval.”
“Although it is not yet possible to assess how voluminous the request will be, as I have said earlier, IRAS will evaluate each request carefully and draw on its experience to provide assistance to only those which are clear, specific and legitimate. And I will have more to say about the processes that it employs. As for FATCA, I should emphasise again that the burden it places on financial institutions is felt worldwide. Everywhere in the world, and not just in Singapore, does not matter where you are located, FATCA is going to hit you. Following intensive consultation with the industry, we started discussions with the US on an arrangement whereby information would be reported to IRAS before onward transmission to the US Internal Revenue Service. This, as Mr Yee shared with us earlier, is Model 1 of the Inter-Governmental Agreement (IGA). What this means is that financial institutions in Singapore will only need to deal with IRAS instead of additional reporting to the US Inland Revenue Service. So, that is one benefit. Another benefit of the IGA is that financial institutions in Singapore would automatically be deemed compliant and will not be subject to a withholding tax unless they fail to meet their reporting obligations subsequently. So, the assumption is that you are compliant unless you fail to meet your reporting obligations. Through the IGA, therefore, we hope to reduce the cost of compliance and complexity for financial institutions in Singapore. Specifically to Mr Yee's question on who is bearing the compliance cost, the vast bulk of the cost of compliance is to be borne by the financial institutions. I heard loudly and clearly Ms Tan Su Shan saying, "We have no choice. We will do it.”
“Members have supported the EOI-related amendments but expressed concerns about the impact on Singapore's attractiveness as a financial centre. Singapore is not alone in adjusting our EOI regime to be more aligned to international standards. Several key financial centres, such as Switzerland and Hong Kong, have recently announced key shifts in their EOI regime. Switzerland recently signed the Multi-lateral Convention on Mutual Administrative Assistance and Tax Matters. And Hong Kong announced that it, too, will be negotiating a FATCA agreement with the US, as was pointed out by Mr Yee Jenn Jong. Singapore has similarly reviewed our EOI regime to ensure that we adhere to the spirit of international tax co-operation. Ms Foo Mee Har, Mr Yee Jenn Jong and Ms Tan Su Shan highlighted the considerable cost of complying with the EOI standards and, in particular, those imposed by the US FATCA. I think Ms Foo highlighted that the financial institutions could scarcely believe how Page: 75 much work they have to do in order to comply. Ms Foo also expressed concern about the volume of requests when the number of partner jurisdictions expands. Madam, enhanced international standards have, indeed, increased compliance costs for financial institutions around the world. The amendment to extend EOI assistance to all our agreement partners without having to update each agreement bilaterally means that however many partner jurisdictions there are going to be, it is still the same internationally agreed EOI Standard that applies. This, in fact, gives financial institutions a much higher degree of certainty and removes the problem of further complexity due to differing standards.”
“I would say also that there is still a lot of room for us to reach out and help these micro SMEs get onto this productivity journey. We are not stopping at having seen the improvements, we will push forward. Page: 74 Madam, I would now like to turn to comments relating to changes in our EOI with other tax jurisdictions. The first point to make is, as Ms Tan Su Shan rightly pointed out, that Singapore is not a tax haven. We have a diversified economy where manufacturing is the largest contributor to GDP; accounting for 21%, followed by retail and wholesale trade at 17%; business services and financial services each contribute another 12%. So, we are a diversified, substantive economy. Our tax system seeks to attract and anchor economic activities that create good jobs for Singaporeans. In fact, the corporate sector contributes a very significant share to the budgetary resources which are needed to implement the Government's programmes. We have also ensured that our financial sector is built upon the quality, breadth and depth of services we offer. We have established strong and consistent regulatory policies and demonstrated firm commitment to the rule of law. Our strict anti-money laundering regime, for example, is held in high regard by the Financial Action Task Force (FATF), an international body which conducts peer reviews of jurisdictions' anti-money laundering regimes. Singapore clearly does not condone abuses of our laws for tax evasion purposes. To this end, we co-operate actively with other jurisdictions through exchange of information for tax purposes based on international standards. This is world recognised and our practices and laws have been assessed by our peers to be in line with international norms.”
“So, for example, a company director was recently sentenced to eight weeks' jail for making fraudulent claims for the PIC cash payout for his company. He also paid a penalty four times the amount of the cash payout fraudulently claimed. Notwithstanding the strong stance against abusers, IRAS is mindful not to burden businesses with excessive documentation which would especially discourage micro SMEs from even getting started. In response to Ms Jessica Tan's suggestion, I should clarify that all businesses can enjoy the PIC benefits, regardless of the number of employees. The requirement of three local employees only applies to the payment of PIC Bonus and to businesses claiming the cash payout. I think this was also a point that I recall Ms Foo and Ms Tan Su Shan raised when we first debated the PIC enhancements as they were introduced. This condition of requiring the businesses to have at least three CPF-paying local employees is really intended to reduce the risk of abuse which we talked about earlier and ensure that the cash payouts really go to active businesses, not those that are just set up for the purposes of gaining from the scheme. However, the businesses that have fewer than three local employees can still benefit from the enhanced tax deductions under the PIC scheme. And many of them, including micro companies, have claimed these deductions. So, Members will be pleased to know that the PIC take-up rate for micro companies − and for that we are referring to companies with less than $1 million in annual turnover − has improved. And based on the corporate income tax returns filed as at April this year, about one in four active micro companies have claimed PIC and this is up from one in five that we have seen in the previous year. So, it is an improvement.”
“At this stage of our push for productivity-driven growth, what is most important is for businesses to get started on their productivity journey, to learn, to invest in improvements and to sustain the effort over time. And this is why we have designed the scheme to be broad-based to support as many businesses as possible and also kept the criteria for the schemes as straightforward as we can. In this regard, it is heartening that a survey conducted by the Singapore Chinese Chamber of Commerce and Industry earlier this year revealed that over eight in 10 of the companies in Singapore are trying to raise productivity levels. And also the feedback from businesses suggests that more of them now see raising productivity as a key priority, especially given the tight manpower situation. So, mindsets have shifted and we are seeing greater awareness of the schemes available to support the productivity push. In terms of potential abuse, I should, firstly, highlight that the vast majority of the errors in claims which Ms Foo cited are due to the lack of familiarity. The vast majority of them were unintentional. As businesses gain more experience Page: 73 in claiming PIC benefits, we can expect the error rates to come down. IRAS makes it a point to highlight common mistakes found in PIC claims through its website and conducts seminars, including in the heartlands, to reach out to small businesses. IRAS also has ongoing compliance programmes to review and audit PIC claims because there are, indeed, a number who try to take advantage. If businesses are found to have artificially inflated their claims or abused the PIC scheme, IRAS will not hesitate to take stern enforcement actions against these businesses and any consultants helping them.”
“Mdm Speaker, I thank Members − Ms Jessica Tan, Ms Foo Mee Har, Ms Tan Su Shan, Mr Yee Jenn Jong and Mrs Lina Chiam − for their comments and suggestions. The comments and suggestions fall into two main parts and I propose to address those relating to PIC first and then we can focus on the Exchange of Information (EOI). Page: 72 Madam, Ms Foo Mee Har has asked about the effectiveness of productivity-related grants and subsidies and the potential for abuse. Ms Jessica Tan suggests refining the criteria to better support micro SMEs where the eligibility for the PIC Bonus is a concern. Madam, the raising of productivity is a medium to long-term endeavour that would take much more than grants and subsidies to bring about. Government support is, therefore, much broader than the PIC scheme and enhancements which this Bill addresses. It includes the setting up of the National Productivity Fund and the efforts to design targeted strategies in different sectors where productivity is lagging, including working with industry associations, as mentioned by Ms Foo, as well as significant investments in continuing education and training to help Singaporeans keep pace. All these efforts require changes at the micro level of individual enterprises, as well as at the macro level of industries. It is, therefore, not surprising that it takes time for the results to become visible. In the meantime, we can expect short-term productivity fluctuations due to economic cycles and volatility. In fact, economists know this – it is often more sensible to compare productivity changes from decade to decade and to monitor sector-specific productivity measures rather than to look at productivity changes on a quarter-to-quarter basis because that is masked by too many short-term volatile factors.”
“This change will encourage employers and eligible companies to contribute to their employees' MediSave accounts, and, likewise, for self-employed persons. Page: 55 Clauses 5, 7, 13 and 18 provide for this. Mdm Speaker, I beg to move. [(proc text) Question proposed. (proc text)] 3.29 pm”
“The third amendment to the Income Tax Act gives legal effect to the Singapore-United States Foreign Account Tax Compliance Act (FATCA) Intergovernmental Agreement (IGA), for which negotiations are expected to conclude in the coming months. This agreement is, therefore, short-formed known as FATCA IGA. FATCA is a US law that aims to prevent US Persons from using offshore bank accounts to evade US taxes by requiring Foreign Financial Institutions (FFIs) worldwide to report the information on bank accounts maintained by US Persons to the US Internal Revenue Service. Non-complying FFIs will be subject to a 30% withholding tax on payments received from the US, such as US-sourced dividends and interest. We have decided to enter into a FATCA IGA with the US in response to feedback from our financial institutions, as doing so will help them meet their FATCA obligations. The amendments provide IRAS with the necessary information-gathering powers to fulfil Singapore's role in facilitating FATCA-compliance under the IGA. These powers include the routine collection and transmission of relevant information, as well as enforcement powers to sanction non-compliance. Clauses 3, 34 and 48 provide for the change. These changes in our EOI regime support Singapore's international tax cooperation with partner jurisdictions to combat cross-border tax offences. They also strengthen our position as a credible and respectable member of the global community. The remaining legislative changes are mostly technical in nature or relate to improvements in tax administration. One such improvement is the simplification of the capping rule for tax deduction for third-party voluntary contributions to the Medisave Account of an Employee or Self-Employed Person which took effect from 1 January 2013.”
“First, we will amend the Act to extend EOI assistance in accordance with the internationally-agreed EOI Standard to all our agreement partners, without having to individually update our bilateral tax agreements. In recent years, most countries have adopted the EOI Standard, and EOI requirements have converged. There is, therefore, no longer a need to cater to individual countries' unique EOI requirements in the respective bilateral agreements. An important principle of EOI Page: 54 assistance is reciprocity, meaning that we provide assistance to the same extent that a partner jurisdiction assists with Singapore's information requests. The changes are provided for in clauses 34 and 41 to 44. Second, we will allow IRAS to obtain information protected under the Banking Act and Trust Companies Act for EOI purposes without having to seek a Court Order. This is aimed at streamlining EOI administration. Members may be concerned that the removal of the need for IRAS to seek a Court Order compromises safeguards that protect the confidentiality of taxpayers' information. Let me assure the House that each request for EOI assistance is carefully considered and not acceded to indiscriminately. Even though a Court Order is not required, IRAS will render EOI assistance only for clear, specific and legitimate requests. In the last four years, IRAS has, in fact, gained valuable experience in EOI administration, and is now well-placed to evaluate and assist on requests in line with the internationally-agreed Standard. Taxpayers can make representations to IRAS to highlight issues with specific requests, which IRAS will take into account when evaluating them. IRAS' decision can also be subject to judicial review.”
“These companies can still enjoy the partial tax exemption generally available to all companies. Clause 27 provides for the change. Fifth, a personal income tax rebate of 30% will be provided to all resident-individual taxpayers for YA2013, capped at $1,500 per taxpayer. Taxpayers aged 60 years and above will get a higher rebate at 50% capped at $1,500 per taxpayer. This will help taxpayers, especially seniors, with the increase in the cost of living. This is provided for in clause 51. Page: 53 Sixth, housing accommodation provided to employees will now be taxed based on their market value instead of using a prescribed formula. This will simplify tax compliance and make our tax system more equitable. Clause 4 provides for this change. Madam, I shall now outline the tax changes covered in this Bill relating to our Exchange of Information (EOI) regime. These changes follow a comprehensive review of the current EOI framework, and represent a further major step by Singapore to enhance cooperation with other tax jurisdictions. Members might recall that in 2009, Singapore had endorsed and implemented the internationally-agreed EOI Standard, which sets out how tax jurisdictions should address cross-border tax evasion by entering into effective information-sharing arrangements. Since then, international tax cooperation practices and standards have continued to evolve and strengthen. There is also a growing international movement against cross-border tax evasion, which undermines the legitimate revenue collections of governments. As a trusted financial centre, Singapore will act responsibly and uphold EOI standards in line with international norms. Let me highlight three key changes we are making.”
“Mdm Speaker, I beg to move, "That the Bill be now read a Second time." Page: 52 The Income Tax (Amendment) Bill 2013 covers both the income tax changes announced in the 2013 Budget Statement, and other changes arising from the periodic review of our income tax regime. The draft Bill was released for two public consultation exercises, one held from 17 June to 7 July and the other from 18 to 31 July this year. MOF has reviewed the feedback received and incorporated relevant points in the Bill tabled in Parliament. Madam, the tax changes announced in the 2013 Budget Statement have already been debated in this House. Let me highlight the key changes. First, the Productivity and Innovation Credit (PIC) Scheme has been further enhanced to allow SMEs that license intellectual property rather than acquire it outright to also qualify for PIC benefits. Clauses 17, 18 and 23 of the Bill provide for the changes. Second, qualifying businesses which make productivity investments will be provided a dollar-for-dollar matching PIC Bonus. This bonus, which comes on top of existing PIC benefits, is applicable for Years of Assessment (YAs) 2013 to 2015 and is capped at a total of $15,000. It gives additional support to businesses that are making an effort to boost productivity and innovation and also helps to defray their operating costs. The PIC bonus is provided for in clauses 24, 25, 38, 39 and 40. Third, a 30% corporate income tax rebate of up to $30,000 per YA will be granted to companies from YA2013 to YA2015. This is provided for in clause 35. Fourth, the Start-Up Tax Exemption (SUTE) Scheme, which is aimed at encouraging entrepreneurial risk-taking, is no longer available to property development companies and investment holding companies incorporated after 25 February 2013.”
“(proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mrs Josephine Teo]. (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]”
“The alternative, which some other countries use, is to base property tax on the Capital Value – what you would realise at the point of sale, for example. We have chosen to use Annual Value rather than Capital Value for two reasons. The first is that there are far more rental transactions to base Annual Value computations on, as compared to Capital Value, which is based on sales transactions. So, this is one advantage – many more transactions that we can use. And as a result, there is less volatility, more stable. The second advantage of using Annual Value instead of Capital Value is that rental tends to be more stable than sales. Sale prices are very much Page: 51 impacted by sentiments, the point of the economic cycle that you are in. So, simply by choosing Annual Value instead of Capital Value, we are providing more certainty for home-owners, meaning from year to year, the changes should not be too large. Nonetheless, I take the Member's point and we will endeavour to ensure that these changes are properly explained and help property owners understand how the property tax is being computed. Of course, we will continue to review the new property tax structure to ensure that it remains as a progressive wealth tax. I just have a final point, Madam, which is that Ms Tan had talked a little bit about the impact in dollar terms. One of the points that should be highlighted is that this set of changes to property tax was not designed, was not introduced for revenue-raising purpose. It was purely to make our property tax structure more progressive, which was something that we did in 2011 and we are taking it one step further. With that, Madam, I beg to move. [(proc text) Question put, and agreed to.”
“And that is why only the top 1% of homes will pay higher property taxes as a result of this change. The remaining 99% of homes, which include all owner-occupied HDB flats and Page: 50 private properties with annual values of less than $59,000, in fact, enjoy property tax savings of up to $80 per household. And this will be based on their 2013 annual values. Just to give an example. A retiree residing at Teachers' Housing Estate where almost all terraces and semi-detached houses have annual values of $30,000 or less, will enjoy property tax savings. Overall, the changes in the property taxes do not hurt most middle-income and retiree households. In fact, most will enjoy some savings. As for the complexity of the new property tax rate structure, the majority of homes will, in fact, fall within the first two tiers of the property tax structure of 0% and 4%. But even so, property owners need not worry about calculating their property tax as IRAS will determine the annual value of the property and calculate the property tax payable accordingly. Property owners who are interested to find out the property tax payable on their properties may also use the online property tax calculator available on IRAS' website to compute the tax amount. I also wanted to touch briefly on Ms Tan's concern that some property owners may be worried because they do not know for a fact how much property tax they are required to pay the next time round. It is a valid concern and it has, in fact, influenced the way we decided on the basis on which to calculate property tax. In Singapore, as in Hong Kong, the property tax is calculated on the basis of Annual Value, which is an estimate of the rental that potentially the property could receive if it was put on the market for rental.”
“Thank you, Mdm Speaker. I would also like to thank Ms Jessica Tan for her comments on the changes that we are about to introduce. Ms Tan has pointed out that owners who occupy their residential properties do not realise any gains from the property until the property is sold and suggested that we limit property tax to owner-occupied homes only at the very high-end so as not to impact middle-income groups as well as retirees. Mdm Speaker, property tax is our sole tax on wealth. It is not a form of income tax and, hence, property tax is payable, regardless of whether it earns rental income for the owner. The principle of taxing property as an asset that is part of the owner's wealth-holding is a common practice in several other countries, including the UK, Malaysia and Hong Kong, where property tax is payable on owner-occupied properties just as in Singapore. So, we are not the only ones that levy property tax on owner-occupied properties. An important feature of our property tax system is that owner-occupied residential properties are already taxed at significantly lower rates than those held for investment purposes. And this is not the case in Malaysia and Hong Kong. For example, the property tax on a home with an annual value of $30,000 is $880 if it is owner-occupied, and $3,000 otherwise. So, we have already made quite a distinction between residential properties that are owner-occupied or held for investment purposes, and there is a big concession being offered to owners who use it for residential purposes. I share Ms Tan's concern for middle-income and retiree households and we were particularly sensitive to this group of owners when we reviewed our property tax structure to make it more progressive.”
“A more progressive tax regime on property wealth is socially equitable and has the added advantage of not hurting the competitiveness of our overall tax regime or reducing the incentives for enterprise. The change is provided for in clauses 4, 5 and 6. Third, clauses 7 and 8 amend the Act to extend the deadline for objections and appeals on property tax assessments from the current 21 days to 30 days. This change gives taxpayers more time to evaluate and make more considered objections and appeals. Mdm Speaker, I beg to move. Page: 47 [(proc text) Question proposed. (proc text)] 3.05 pm”
“Mdm Speaker, I beg to move, "That the Bill be now read a Second time." The Property Tax (Amendment) Bill 2013 comprises three amendments. Two amendments will give legislative effect to property tax changes announced in the 2013 Budget Statement, while one amendment arose from the periodic review of our property tax regime. A public consultation exercise on the draft Bill was held from 25 July to 14 August this year. MOF has evaluated the feedback received and, where relevant, incorporated them in the final Bill. I will now explain the three amendments in the Bill. First, the property tax refund for vacant residential and non-residential properties will be removed. Currently, there are provisions for owners of some vacant properties to apply for property tax refunds, such as for those undergoing repairs to render them fit for occupation. This is inconsistent with the intent of property tax, which is a tax on property wealth that does not depend on whether the property is vacant or the reason for it being vacant. With the change, owners whose properties are vacant due to repair works will be taxed at owner-occupied rates, similar to properties that have been torn down and rebuilt, provided that the properties are intended for owner-occupation after the works are completed. Likewise, vacant properties held for investment purposes would be liable for property tax even if they are not rented out. The removal of the provisions for property tax refund will, therefore, ensure consistency in the tax treatment of all vacant properties. Clause 3 provides for this change. Second, we will amend the Act to allow the Minister to prescribe the types of properties which will be subject to the progressive property tax rates introduced in Budget 2013.”
“Mdm Speaker, I thank Mr Ang for his suggestion. I fully appreciate the cost pressures that taxi drivers face in carrying out their trade. He has asked specifically on the special tax on taxis. Rightfully, this is not part of the original question. I am going to invite him to file a separate question and I can give him a fuller response. But Madam, briefly, and also for the benefit of Members of the House, the annual special tax on taxis is levied on diesel taxis given that we do not impose a unit tax on diesel fuel. So, I just like to point out that if we were to charge taxis the equivalent volumetric tax that we do for a petrol-driven car, it would actually incur a higher tax than the annual special tax that taxi drivers now pay, or that is actually levied on taxis now. In other words, it is already a concession. The second point is that the special tax on taxis, in fact, has remained unchanged since 1998 and it was temporarily reduced in 2001 and 2003 as part of recessionary measures. But otherwise, it has not changed for the last 15 years. So, these are just some points, Mdm Speaker, for Mr Ang's consideration. Page: 62”
“Mdm Speaker, I thought I should perhaps point out that of the three components of the GST Voucher, only the GST Voucher – Cash uses Assessable Income as a criterion. GSTV – U-Save and GSTV – Medisave, in fact, do not use Assessable Income. Also, in addition to the GST Voucher, there were other types of assistance in this year's Budget. For example, HDB households were eligible to receive Service and Conservancy Charges rebates. Individuals could also receive Medisave top-ups or benefit from enhancements to the Workfare Income Supplement. And Singaporeans who need additional assistance could also turn to the Community Development Councils to tap on other schemes available. Nonetheless, I would like to thank Ms Lee for her suggestion and it is something that we will look at when we review the Assessable Income Page: 37 threshold.”
“Mdm Speaker, I thank the Member for raising this point. I think his question is how do we ensure that the competition is fair. I would like to assure him that when the LTA evaluated the bids that had been obtained for the City Direct services, they evaluated the operators on criteria such as the ability to fulfil the service commitment that is required of them, and their financial standing has to be sound. And I think, most importantly, it is whether we are able to really deliver the improvement to bus service levels. That was the whole intention behind this exercise. So, I would like to assure him, based on the question that he is asking, that the competition will be conducted – the contest is fair.”
“Sorry, Madam, what is the Member's question? Page: 43”
“Mdm Speaker, I thank the Member Mrs Chiam for her question. The conservatories are supposed to make full recovery on the operating costs, so they will have to assess the level of attendance at the conservatories and also adjust their admission fees accordingly. I should just add for interest that since the Gardens have opened, about 4.1 million visitors have been to the Gardens, and just over one-third visit the conservatories. This is still very early days yet. The conservatories will have to make an assessment and plan accordingly once the attendance numbers are more stabilised over time.”
“Madam, I thank the Member for her two clarification questions. If there is, indeed, a shortage of training berth places, we will certainly do something to address this. However, the feedback that we have received is quite different – that it is difficult to find the warm bodies who want to take up these opportunities. Nonetheless, this is something that we will take a closer look at. On the dependency ratio that the Member talked about earlier, in general, we would want all sectors to be able to uplift their productivity. These include the harbour craft and maritime sector as a whole. As to what we should be doing to increase our efforts on this front, that is an area under review right now.”
“I can assure her that if she can help us find 500 cadets, we will do everything on our part to take everyone in. But at the same time, I would llike to reassure Mr Teo that we will continue to keep Singapore open and employer-friendly as long as the skills and expertise of the foreign professionals here complement those of our local workforce. Page: 66 As to the current dependency ratio which Ms Liew talked about, I heard the very opposite from Mr Teo who had earlier voiced concerns over the tightening of our foreign worker policies. This illustrates how fine a balance we have to strike between the concerns of our maritime companies and keeping opportunities open for our locals. I am confident that by working together, we will be able to strike the right balance, and if need be, we will review and take a closer look at the dependency ratio. Madam, the maritime sector not only provides critical connectivity for our economy, but also contributes directly to our growth. Building on our strong maritime foundation, the Singapore Government will continue to work with our tripartite partners in developing new infrastructure, capabilities and talent so as to ensure the continuing success of Maritime Singapore.”
“I am very pleased that MPA took in feedback from Members after last year's COS debate and worked expeditiously to introduce these enhancements to our seafarer training programmes. Response to these programmes has been encouraging, and I look forward to the graduation of the first batch of Deck Officers later this year. In addition, I would like to assure Ms Liew that we welcome former Singaporean seafarers like Mr Omar to rejoin the maritime sector and we will look into how we can help them revalidate their skills. I think Ms Liew talked about supporting them financially. So, we will take a close look at that. We are also doing more to help our maritime professionals upgrade their knowledge and skills to meet the evolving needs of the industry. Mr Teo had talked about how important international exposure is. We agree, and we will make available all the support that we can to enable more of our local professionals to upgrade themselves. Over the past year, MPA's S$50 million Maritime Cluster Fund (MCF) for Manpower Development has provided funding support to over 4,000 maritime professionals for their training and development. This is almost twice as many as the 2,200 beneficiaries in 2011. To further encourage manpower development, MPA has since October 2012, increased the co-funding support under the MCF from 50% to 70%. MPA and its industry partners have also introduced more Continuing Education and Training (CET) opportunities such as the Professional Development Course in Maritime Logistics offered by the Chartered Institute of Logistics and Transport. As Members can see, there is no lack of effort to grow a core of local maritime talent. And I support Ms Liew's call for more Singaporeans to take up opportunities in this sector.”
“Most recently, in September 2012, MPA launched the Singapore Maritime Gallery to showcase our maritime heritage and career opportunities that Maritime Singapore has to offer. I am told that even though it is quite new, quite a lot of school groups have already made their way to the Maritime Gallery. It bodes well that our youths have started to learn about our maritime history and the career opportunities in this sector from an early age. We are also working actively to broaden the range of maritime training opportunities. There are now specialised courses at NITEC, diploma and degree levels to prepare our students for exciting and fulfilling careers in the maritime sector. For aspiring seafarers, the Singapore Maritime Academy (SMA) offers programmes that prepare students for their diplomas and their first professional sea-going qualifications. Ms Mary Liew raised the need for our seafaring cadets to have sufficient training opportunities. I would like to assure her that our cadets are indeed able to get access to opportunities for operational experience, which they need for their qualification. MPA will continue to work with SMA and the shipping groups to ensure that this remains the case. As Ms Liew mentioned, we are also growing our core of local seafarers for our harbour craft sector. To this end, MPA and its partner agencies have Page: 65 introduced "Place-and-Train" programmes for Deck Officers and Marine Engineer Officers who work on ships plying in and around Singapore. Apart from co-funding their course fees, MPA has since October 2012, topped up the monthly training allowances for these cadets, leading to at least a doubling of their allowances depending on their training phase.”
“The Singapore Maritime Institute has also launched the Next Generation Container Port Challenge to spark new ideas that can achieve a quantum leap in port performance. I am glad that Mr Teo and others in the shipping community support this important drive towards higher productivity. We will continue to work with the industry to sharpen the competitiveness of our maritime sector, including exploring Mr Teo's suggestion for more free trade agreements with emerging Page: 64 markets. Our third and most important strategy is to grow and maintain a core of local maritime talent, a subject which Ms Mary Liew brought up. We are making steady progress in grooming a core group of Singaporeans to take up seafaring and shore-based careers in the maritime industry. Today, of the more than 170,000 people employed in the maritime sector, about 76,000 are locals, compared to about 56,000 locals some 10 years ago. Over this period, we have seen a larger core of Singaporeans in maritime activities, such as port operations, ship management and ship chartering. Many more locals are now working in the maritime industry, very often in PMET jobs. This has been achieved through the close partnership that MPA has forged with industry, unions and educational institutions. I agree with Ms Mary Liew that we must continue to make maritime careers attractive to Singaporeans. Indeed, MPA works closely with partners to raise awareness of the wide range of maritime careers through outreach activities such as the MaritimeONE platform. To date, over 100 MaritimeONE scholarships have been awarded to aspiring seafarers and other maritime professionals.”
“To this end, the expansion of Pasir Panjang Terminal is on track and the first set of new berths will be ready in 2014. When this expansion is completed, our port capacity will increase by 50% to 50 million TEUs per annum. We are not stopping there. In the long term, we will consolidate our container port activities at Tuas with a handling capacity of up to 65 million TEUs per annum. Consolidation will increase efficiency through greater economies of scale, and reduce costs through the elimination of inter-terminal haulage. A new port at Tuas will also allow us to introduce new technology and processes to meet future challenges, in particular, to improve manpower productivity. We expect the first berths at Tuas Port to be operational in about 10 years. With the consolidation, existing port land will be freed up for exciting redevelopment opportunities. Our second strategy is to continually sharpen our maritime policies and schemes to ensure that they remain relevant to maritime companies, a matter that Mr Teo also raised. As announced in Budget 2013, we will provide ship owners and operators with greater tax certainty by extending the maximum tenure of the Approved International Shipping Enterprise (AIS) award under our Maritime Sector Incentive (MSI) scheme from 30 to 40 years. For our maritime sector to remain competitive, we must strive for productivity-driven growth. A key enabler of this is to promote maritime R&D to support businesses as they innovate and develop new capabilities. For instance, MPA uses its Maritime Innovation and Technology (MINT) Fund to co-fund R&D efforts by our port operators in areas such as automated port systems and port optimisation techniques.”
“We maintained our global lead in vessel arrival tonnage, which increased by 6% to reach a record high of 2.25 billion gross tons. We also remained the world's top bunkering port, even though bunker sales fell slightly by 1% to 42.7 million tons. Last year, we attracted several new shipping companies and maritime service providers, while existing maritime players continued to grow their presence here. Today, there are about 130 international shipping groups and more than 5,000 companies in Singapore offering a full spectrum of maritime-related services. Our efforts to develop in Singapore a leading IMC are bearing fruit. For example, in the area of maritime arbitration, BIMCO – one of the world's largest shipping associations – recently included Singapore as an arbitration venue in its shipping contract forms, alongside London and New York. It is a great honour to have Singapore named as an arbitration venue. It is something that we have worked hard to achieve. These positive developments in the face of global challenges reflect the strong fundamentals of our maritime cluster. So, while we expect 2013 to be another difficult year for the global shipping industry, we are also cautiously optimistic that our maritime cluster here will continue to grow. Page: 63 To maintain Singapore's competitiveness as a global hub port and IMC, we will continue with three key strategies – first, to invest in infrastructure ahead of demand; second, to sharpen our maritime policies and schemes to meet changing business needs; and third, to grow a core of local maritime talent. Let me start with infrastructure. Despite the difficult short-term outlook, we take a long-term view of our port and will continue to grow port capacity ahead of demand.”
“An Airport Productivity Steering Committee, led by CAAS and comprising stakeholders such as CAG, airlines, airport service providers and other Government agencies, has been established to drive this effort in a more holistic manner. This will be an important effort to ensure that our airport expansion plans raise productivity for the sector to even higher levels. 1.30 pm In summary, let me assure Members of this House that the Government is committed to ensuring the continued competitiveness of Singapore as an air hub, in terms of both the "hardware" and "software" that have made our airport "a source of pride for all Singaporeans", to borrow the words of Mr Charles Chong. With our ongoing efforts and plans, I am confident that Singapore and Page: 62 Changi Airport will be well-equipped to capitalise on the strong growth of air travel in the Asia Pacific and maintain our leading hub position. Mdm Chair, let me know turn to the maritime sector. I thank Mr Teo Siong Seng and Ms Mary Liew for their comments and suggestions for this key pillar of our economy. Before I address their specific points, let me first update Members on the performance of the Singapore maritime sector in 2012. Two thousand and twelve was not smooth sailing for the global maritime industry. Shipping companies were affected by weak demand, overcapacity of ships, high fuel prices and increasing environmental concerns, which Mr Teo highlighted earlier. As a transshipment hub at the crossroads of major trade routes, our port also felt the impact of these problems, but nonetheless, we registered good growth in 2012. Container throughput grew over 5% to reach 31.6 million twenty-foot equivalent units (TEUs) – the first time that our port crossed the 30-million TEU mark.”
“Even though value-added per worker in the sector is already much higher than the services sector in general, we should aim to operate our airports in more efficient ways. The new Terminal 4 offers us an opportunity to innovate and explore ways to do more with less. For example, CAG is exploring having self-service kiosks and automated check-in and immigration clearance facilities in the new Terminal 4: Page: 61 (a) Passengers will be able to obtain their boarding passes easily without having to wait in line for service staff to process their check-in. (b) Those with check-in luggage can deposit their bags at automated baggage-drop facilities. (c) At departure immigration, passengers can scan their boarding passes, passports and thumbprints for automated verification. (d) At the boarding gates, passengers will proceed to their aircraft via automated counters. Such practices are also being adopted in other airports such as in Munich and Sydney. They allow for faster and more efficient check-in and immigration clearance, while reducing the manpower required. Terminal 4 will also feature productivity innovations that will make it easier for airport staff to do their work. For example, mechanical baggage lifters will be installed to assist baggage workers in lifting check-in bags, so that they no longer need to move the bags manually. This will greatly reduce the physical strain on baggage workers and open such jobs to more seniors. Such innovations are timely as they allow for smaller-scale experimentation before being adopted on a larger scale at the new terminals at Changi East. In addition, CAAS is also working with its partners to identify other ways to increase the productivity of the airport and upgrade jobs.”
“Since its launch in 2006, SAP has attracted numerous aerospace companies, including global names such as Rolls Royce, Pratt & Whitney and Eurocopter. Mr Charles Chong asked if there is still capacity to grow the aerospace industry at Seletar. As he has highlighted, the development of the 30 ha Phase 3A of SAP commenced last year and is slated for completion in 2014. In addition, Phase 3B, with an additional 30 ha of space, will be developed in due course to cater to the industry's growth. However, as Mr Charles Chong also highlighted, the success of Seletar Airport and SAP requires more than just infrastructural expansion. Accessibility is indeed an important factor. Today, the area is served by bus service 103 which connects commuters to Serangoon Bus Interchange and Serangoon MRT station. Commuters travelling to SAP from towns such as Tampines, Bedok, Yishun, Woodlands and Sengkang can also make same-stop transfers to service 103 at the entrance to SAP. In addition, JTC has also been operating shuttle bus services between SAP and the nearby MRT stations, as well as a lunch-time bus service within the SAP itself. We will continue to monitor the pace of development in the area and will add capacity should demand warrant it. With our strong fundamentals of economic and political stability, a quality workforce, respect for intellectual property and good business connectivity, I am confident that SAP is in a good position to ride the growth of the aerospace industry in the region and continue to attract new investments. Madam, the plan to expand the airports at Changi and Seletar also needs to take into account the changing manpower landscape in Singapore.”
“This extensive connectivity is a key reason behind the Australian carrier Qantas' decision to tie up with Emirates and re-route its Europe-bound flights via Dubai instead of Singapore from March this year. While Dubai has taken full advantage of its geographical position to grow its air links and is now connected to many more cities than Changi, we continue to have an edge in connectivity within the region, including to countries like China, India and Indonesia. Changi Airport must take the competition seriously and work hard to retain superior air connectivity. We should therefore make plans to expand Changi Airport's capacity to build on an advantage that has taken years to acquire. We need room to grow our connectivity with many more emerging cities. This will also support airlines' growth plans and anchor them here. Over the past year, the Changi 2036 Steering Committee has been working on a Concept Plan for the 1080 ha site at Changi East, which lies between the current Runway 2 and Runway 3. Based on studies done, there is sufficient land to develop a mega-passenger terminal as well as an airfreight centre, an air logistics centre and MRO hub on the site; MRO referring to Maintenance, Repair and Overhaul. With these new facilities, new roads and public transport links will also be needed to serve the airport. Existing roads may also have to be diverted. MOT, CAAS and LTA will study these issues further and engage the aviation community on the Concept Plan in the months ahead. We aim to finalise the Concept Plan by the end of this year. Page: 60 In addition to Changi Airport, we are also developing Seletar Airport and Seletar Aerospace Park (SAP) as a hub for business and general aviation and aerospace activities.”
“As for passenger terminals, I updated this House at last year's Committee of Supply debate that Changi Airport's total passenger capacity will increase from 73 million passengers per annum (mppa) to 85 mppa by 2018 with the addition of the new Terminal 4 and an expanded Terminal 1. As Members know, passenger traffic at Changi rebounded strongly after the 2009 global financial crisis and has remained high. However, we should be reminded that in the last decade, even starting with a lower base, passenger traffic at Changi saw a compounded annual growth rate of just 3.9%. We are now at a much higher base than at the beginning of the last decade. Looking ahead, we expect the compounded annual growth of passenger traffic at Changi to be around 5% till the end of this decade and moderate to 3% to 4% in the next decade. This is neither a conservative nor aggressive estimate as growth in Singapore is moderating even as emerging regional economies pick up pace. At these growth rates, we expect to need additional terminal capacity by the Page: 59 mid-2020s. To position Changi for the longer term, we should plan for expansion of its passenger terminal capacity. Other airports are thinking along similar lines. As I shared last year, and Mr Charles Chong also pointed out, many air hubs elsewhere are planning substantial capacity increases. For example, Dubai Airport is rapidly adding additional capacity and recently opened the world's first Airbus A380-only concourse with 20 contact stands that can handle 15 million passengers per year; so one concourse handling nothing but A380s. By providing ample capacity, Dubai will allow its home carrier Emirates and other airlines to expand their networks.”
“First, a study by NATS, the air navigation service provider for London's Heathrow Airport, has concluded that by implementing various measures, Changi Airport's existing two runways can accommodate about 430,000 aircraft movements per year, which is one-third more than the record number of 324,000 movements last year. By implementing runway optimisation and other Page: 58 measures, such as Mr Cedric Foo's suggestion of moving some aircraft to Seletar Airport, we expect the increased capacity of our two runways to be sufficient to cater to Changi Airport's growth until around the end of this decade. Thereafter, a third runway will be needed for Changi to continue to grow. Exactly how soon we will need a third runway at Changi for civilian use depends on various factors, including air traffic growth and the aircraft mix operating at the airport. For example, airlines may up-gauge narrow-body aircraft to wide-body aircraft to carry more passengers, rather than applying for new departure and landing slots. This will allow Changi to support more passenger traffic with the same runway capacity. Nonetheless, the Committee has decided that Changi's Runway 3, currently used by the Republic of Singapore Air Force (RSAF), should be readied for civilian co-use as early as possible and we estimate this to be before the end of this decade. Even as MOT and CAAS develop the detailed plans for this, preparatory works have already started. The works are complex and will take time. We will announce the detailed timelines for the works and the implementation of a three-runway system at Changi Airport in the second half of the year.”
“Its design will also facilitate quick flight turnaround, in line with the operating models of LCCs. I will say a little bit more of the experiments that we are going to do at Terminal 4. One important measure of performance at Changi Airport is on-time departure. On-time departure performance deteriorated at the end of 2011 due to a higher incidence of bad weather and a surge in air traffic. However, with coordinated action taken by CAAS, the Changi Airport Group, airlines and other airport stakeholders, departure delays have been sharply reduced and are now back to pre-2011 levels. This was despite aircraft movements increasing by nearly 8% in 2012. All in all, Singapore's aviation sector did well in 2012. For 2013, we project passenger traffic growth to moderate to 5%, in line with the subdued global economic conditions. In the longer term, we expect traffic to grow steadily, driven by the strong growth of the Asia-Pacific which will spur increased travel to, from and within the region, through existing and new city links at Changi. During MOT's Committee of Supply Debate last year, I announced that I would chair a multi-agency Changi 2036 Steering Committee to develop a holistic long-term plan for the expansion of Changi Airport. This would include the civilian use of Changi's third runway, additional passenger terminal capacity and related infrastructure and transport links to support Changi's future growth. The Committee has held extensive discussions with various stakeholders and arrived at several key conclusions regarding: runway capacity; terminal capacity; and raising productivity further. Let me share our conclusions with Members.”