Richard Hu Tsu Tau
Singapore
“Sir, I think it is eminently fair, because the proposal really is for the Government to spend money to give shares to Singapore citizens. Either you agree or you do not agree. Or, if you agree, perhaps you consider the amounts insufficient or too much.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time". The purpose of this Bill is to make provision in accordance with Articles 148(2) and 148C(2) of the Constitution for additional expenditure in excess of the provisions authorised by the Supply Act, 2001.”
“I think the Prime Minister and DPM Lee have already explained it will be based on income levels, with people living in flats as a proxy. So there is no political content in it. It depends on the income level, whether you have served national service or whether you are an elderly person.”
“I really do not understand. I know you are arguing on technicality for which I agree that you may have a point. But, nevertheless, because it is a proposal to share Singapore's surpluses with the population, the distribution is not something which you can argue against.”
“As I said, the estimates will be available around mid-October. I do not think, at this time, I want to give a specific date when the second package will be announced, but it will be done as soon as practicable. IN-PRINCIPLE AGREEMENT WITH MALAYSIA ON OUTSTANDING BILATERAL ISSUES (Assessment) 4.”
“Mr Speaker, Sir, when the $2.2 billion off-Budget package was announced in July this year, we said that the Government would do more to assist Singaporeans if the global economic situation worsened in the coming months.”
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“Mr Speaker, Sir, I beg to move, That Parliament approves the financial policy of the Government for the financial year 1st April, 2000 to 31st March, 2001. I REVIEW OF THE ECONOMY ECONOMIC PERFORMANCE IN 1999 1999 began on a sombre note, our economy having just contracted by 1.6% in the second half of 1998. With a highly uncertain outlook, we braced ourselves for a difficult year ahead. As it turned out, 1999 was a year of remarkable economic turnaround. After a modest 0.8% growth in the first quarter, the economy rebounded strongly for 3 consecutive quarters, recording a high of 7.1% growth in the last quarter. For the whole year, we enjoyed a respectable 5.4% growth. The Asian economic crisis is largely behind us. Singapore's V-shaped recovery benefited first from the strong upturn in global electronics. In particular, global semiconductor sales rebounded by a robust 17% in 1999, after having contracted 8.4% a year ago. This surge in external electronics demand provided a fillip to our manufacturing sector, and contributed to its stellar 14% growth last year. The second boost to our recovery came from the concurrent turnaround in the regional economies. Buoyed too by the rebound in global electronics demand and stabilised regional currencies, most Asian economies returned to positive growth by the second quarter of 1999. This boosted intra-Asian trade and further fuelled Singapore's growth, as intra-regional trade accounted for about half of our total trade. Region-dependent services like tourism also benefited from the 14% surge in visitor arrivals last year from our key Asian markets. One critical factor which enabled Singapore to seize the opportunities presented by the rising external demand was our improvement in cost competitiveness.”
“That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$1,568,000", $100,800", "$2,137,900", "$952,500" and $241,200" in the second column and substituting the figures "$1,757,700", "$104,300", "$2,177,200", "$1,000,130" and "$56,400" respectively.”
“Sir, I beg to move, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$1,568,000", $100,800", "$2,137,900", "$952,500" and $241,200" in the second column and substituting the figures "$1,757,700", "$104,300", "$2,177,200", "$1,000,130" and "$56,400" respectively. Sir, I propose that a provision of $1,865,600 be supported for Class I expenditure. This is $193,200 more than the FY99 provision. The higher provision is to cater for the restoration of the wage cut on the Privy Purse and a higher cost of hosting official functions. The provision for Class II expenditure (Salaries of Personal Staff) is expected to increase from $2,137,900 to $2,177,200, mainly to meet the restoration of the cut in the salaries of the supporting staff from January 2000. A provision of $1,000,130 is required for Class III expenditure (Expenses of Household). This represents an increase of $47,630 over the FY99 provision. The increased provision is mainly to meet the higher maintenance cost of the Istana grounds and utilities charges. For Class IV expenditure (Special Services), a budget of $56,400 is provided for the renewal of the Certificate of Entitlement of the First Lady's official car. The provision is $184,800 lower than the FY99 provision. It is therefore necessary to vary the provisions in the Schedule to the Civil List and Pension Act (Chapter 44), as indicated in the Motion before the House. Sir, I beg to move. Question put, and agreed to. Resolved.”
“Mr Speaker, Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions." Question put, and agreed to. Resolutions accordingly agreed to. CIVIL LIST (Motion)”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. Resolutions reported. Question, "That the sum of $502,104,210 shall be supplied to the Government under the Heads of Expenditure for the Public Services shown in the First Supplementary Main Estimates of Expenditure for the financial year 1999/2000". Question, "That the sum of $18,726,000 shall be supplied to the Government under the Head of Expenditure for the Public Services shown in the First Supplementary Development Estimates of Expenditure for the financial year 1999/2000".”
“Yes, indeed. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee; reported without amendment; read a Third time and passed. TRADE UNIONS (AMENDMENT) BILL Order for Second Reading read. 2.24 pm”
“As I have explained, we have special funds assigned to the Economic Development Board, the Cluster Development Fund, and the Technopreneurship Investment Fund. These are monies invested in companies or individuals which have a purpose of developing new industries or new companies to generate future profits for Singapore. These are monies which will be spent for the purpose of developing a particular activity which is expected to generate returns. Under the normal Development Fund in our Budget, the development expenditures would be monies which are expensed in the current year, like expenditures in building up infrastructure, buildings and so forth which have value but not spent specifically for purposes of generating profit. So we want to separate the two types of development expenditures. The development investment type would be financed over a period of time depending on the nature of the activity. On the other hand, development expenditure for basic infrastructure, such as monies spent on reclamation of the foreshores of Jurong Island, is expected to provide basic infrastructure for use in Singapore in the future and these would be charged against the development fund and expensed the year in which it is spent. That is the basic difference.”
“Parliament may by resolution, and with the President's concurrence for the resolution, raise this loan limit. Clause 18: Financial Statements Annual financial statements of the DIF will have to be prepared at the end of each financial year, and submitted to the Auditor-General. The audited financial statements and auditor's report will be presented to Parliament. Clause 21: Consequential Amendments The Bill also makes the following consequential amendments to the Development Fund Act (Chapter 80 of the 1995 Revised Edition) and the External Loans Act (Chapter 102 of the 1985 Revised Edition): Amendment to the Schedule to the Development Fund Act (Cap.80) With the amendment, investments in securities for developmental purposes will cease to be annually appropriated from the Development Fund by Parliament as expenditure in a Supply or Supplementary Supply Bill. Funding for such activities will instead be met from the new Developmental Investment Fund. Amendment to the External Loans Act (Cap. 102) This amendment will allow loans to be raised outside Singapore for purposes of the Developmental Investment Fund. Sir, I beg to move. Question proposed.”
“The investments will not be treated as straight expenditure, which would be the case if the investments continue to be funded through the Development Fund. This would allow the better accounting and management of public moneys invested by the Government for developmental purposes. The DIF will be limited to investments where returns are clearly required and expected. Normal development expenditure and development loans will continue to be funded through the Development Fund. Specific provisions of the Bill I shall now proceed to explain the specific key provisions of the Bill, which are: Clause 3: Sources of funds for the DIF The DIF shall receive capital sums mainly out of transfers from the Consolidated Fund which are approved by Parliament, or through loan proceeds. Clause 4: Purposes of the DIF The DIF can only be used to form companies, acquire securities in public authorities and corporations or otherwise invest, for any developmental purposes. Section 7(3) of the Financial Procedure Act will not apply to the developmental investments made under the DIF. Clauses 5 and 6: Responsibility for the DIF The general responsibility for the DIF will rest with the Minister for Finance. Other Ministers may be assigned responsibility over accounts within the DIF, but the Minister for Finance will remain overall responsible for the control, supervision and management of the DIF. All the Ministers will have to establish and adhere to investment policies and standards that a reasonable prudent person would adopt to reduce risk, ensure reasonable returns and the achievement of specific developmental objectives. Clause 10: Raising of loans The Minister for Finance will be empowered under the DIF Act to raise loans of a sum not exceeding in the whole S$10 billion.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill before the House seeks to establish a Developmental Investment Fund to facilitate developmental investments by the Government. It also seeks to make consequential amendments to the Development Fund Act and the External Loans Act. Rationale The Government has identified the need to strengthen Singapore's competitive position to meet the challenges posed by a rapidly changing global competitive landscape. Towards this end, capabilities in the more knowledge-intensive parts of the value chain have to be developed. Our human resources must be enhanced and our science and technological capabilities upgraded to allow us to achieve our objective of becoming an advanced and globally competitive knowledge economy within the next decade. The Government has, over the years, been undertaking a host of developmental investments aimed at enhancing, either directly or indirectly, the economic growth, employment opportunities and general welfare of Singapore. An example of such developmental investments would be the US$1 billion Technopreneurship Investment Fund (TIF) announced in April last year. Currently, only investments made with the primary purpose of deriving some interest, income or profit are permissible under the Financial Procedure Act. As a result, investments with developmental objectives such as the TIF have to be funded under the Development Budget and therefore treated under the Government's cash accounting system as expenditure, rather than investments. The Government has thus decided to establish a new fund, the Developmental Investment Fund (DIF) to finance developmental investments. This would allow the investment nature of these developmental investments to be properly reflected.”
“The Ministry has no position on this. This is an independent bid from a Hong Kong entity and, like all proposals, it is being put on the table in competition with the SingTel deal. I have no comment on this particular case. INVESTMENTS IN BINTAN AND OTHER RIAU ISLANDS The following Question stood in the name of Mr Chiam See Tong - 4. To ask the Minister for Trade and Industry whether the recent riots in Bintan Island have affected Singapore's investments in that and the other Riau islands and what steps will the Singapore Government take to prevent or lessen the chances of further riots taking place as Singaporeans have their investments there. 5. Mr Tay Beng Chuan asked the Minister for Trade and Industry what is his Ministry's assessment on the current political and economic situation in Indonesia, and how his Ministry will continue to encourage Singapore businessmen to invest in Indonesia.”
“In the case of SingTel, the public was granted a discount of the original price and with the loyalty shares the effective price paid by shareholders is a lot lower than $3.60. But I think the basic principle is that Government cannot protect the price of shares. As I mentioned earlier in my reply to Mr Chng's question, investors must make their own judgment and I still believe that, in the long term, SingTel is a good investment.”
“Sir, on the first question, I am in no position to comment on these speculations. These are pure speculations on the part of the media. As far as the Singapore Government is concerned, this is a purely commercial consideration. The fact that Government has a major shareholding is irrelevant in this particular case. On the second question, whilst the proposed merger may dilute the Government's shareholding it should not affect the security concerns. This is because the Info-communications Development Authority has already put in place provisions to safeguard national interest. For example, as a licence condition, telecom operators will be required to cooperate fully with relevant Government agencies for the provision of national security and emergency services. We will cover this particular problem through the regulatory requirements.”
“Sir, the proposed merger is driven purely by commercial considerations. The combined entity, which would become one of the leading regional telcos, would be better positioned to face the challenges posed by the rapidly globalising and evolving telecommunications industry. The potential dilution of Government's shareholdings in SingTel should not pose security problems. Concerns over security confront telecommunication markets worldwide whenever mergers and acquisitions of telcos, whether foreign or local, take place. However, these security concerns can be adequately addressed through the regulatory framework. Temasek Holdings and SingTel believe that the merger will create value for the shareholders of both SingTel and Cable & Wireless HKT. As with all commercial companies, they take into account the interest of its shareholders, including minority shareholders, when making any business decisions, particularly major ones involving mergers and acquisitions. The Government does not intend to institute any specific safeguards for shareholders, as the investing public should exercise prudence in their investments. The caveat emptor applies to all investments, including investment using CPF as well as those under Asset Enhancement schemes.”
“Mr Speaker, Sir, may I have your permission to take Question Nos 2 and 3 together as they are related?”
“My Ministry will continue to closely monitor these and other charges and levies to ensure that we remain cost competitive. However, Government cannot freeze all charges and fees indefinitely. That will be ultimately harmful to the economy as it would lead to distortions and inefficiencies. Periodically, charges and fees have to be revised to reflect changing market conditions. But, as always, the Government will exercise moderation, so as to avoid unnecessary burden on the economy and our businessmen. CALLBACK OPERATORS 28. Mr Chng Hee Kok asked the Minister for Communications and Information Technology if he will state the rationale for restricting callback operators from advertising their products in certain media.”
“Currently, non-profit organisations which engage in charitable activities can already be exempt from tax. Such charitable activities include the advancement of education, relief from poverty and distress, and relief from sickness. Trade associations are traditionally set up to promote or safeguard the business of its members and benefit only a defined group of persons and not the community at large. Nevertheless, a trade association can be exempted from tax if more than 50% of its receipts are received from its members in the form of entrance fees and subscriptions. Tax is only imposed on those trade associations which receive income primarily from non-members. If a trade association wishes to undertake projects specifically for the benefit of the community as a whole, it would be best for the association to set up a separate non-profit organisation for the charitable activity. GOVERNMENT CHARGES AND LEVIES 27. Mr Tay Beng Chuan asked the Minister for Trade and Industry whether his Ministry will continue to monitor Government charges and levies closely and wherever possible to maintain them at the current level to ensure that Singapore remains competitive against regional economies. BG George Yong-Boon Yeo: Last November when Government announced the partial (2%-point) restoration of employers' CPF contribution rate, it also stated that Government rebates in key areas of business costs - namely industrial land rentals, port and airport dues - would be extended for an additional year. The reduced Foreign Worker Levy rates would also remain unchanged for another year. This was to help keep business costs low so that we do not choke off the current economic recovery.”
“If the marriage is dissolved, the unused Further Tax Rebate (FTR) will cease. The procreation tax rebates were implemented to encourage married couples to have larger and complete families. Hence divorcees are not eligible for the FTR. NON-PROFIT TRADE ASSOCIATIONS 26. Mr Tay Beng Chuan asked the Minister for Finance whether, in the interest of inculcating a civic society in Singapore, his Ministry will consider exempting non-profit trade associations and other community organisations from corporate income tax, since any surplus accrued from the activities of these organisations is ploughed back into the development of long-term projects for the benefit of the community at large.”
“I would like to assure him that we will do everything possible to shorten the registration period. But even under the existing rules, for business firms, the turnaround time is usually no more than 24 hours, except for a few cases where the questions arise whether the directors involved have records which need to be tracked. For corporations, it normally takes about five working days for the company name to be approved and another five days for the company to be incorporated. This is longer than in the Silicon Valley where we understand that it could take three to five days to register a company, although some businesses have been turned around within 24 to 48 hours. I think our record is not bad. Although the periods are longer than Silicon Valley, they are quite acceptable in normal circumstances. But we will try our best to improve it. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee; reported without amendment; read a Third time and passed. POLICE FORCE (AMENDMENT) BILL Order for Second Reading read.”
“I thank Prof. Toh See Kiat for his general support of the amendments. He has three points which I will respond to. Firstly, he wants clarification as to whether people operating from home offices or who are doing home tuitioning would be exempted like those operations in the First Schedule. I have to tell him that they are not exempted. Those who are exempted under the present First Schedule are people like taxi-drivers, craftsmen or farmers of low-skilled activity. And the home office is a provision which is to allow people to operate from home where normally they operate from the office and generally of a higher skill level. Therefore, such people who operate from the home still have to apply for registration. Similarly, it will apply for home tutors. They are also not exempted, although we believe a number of home tutors have not registered on the assumption that they are exempted. They are indeed not exempted. Prof. Toh also wants to know, under clause 3, whether companies can use acronyms or other short forms for trading under the Act. I would like to clarify that the amendment in question is simply a drafting change to get rid of superfluous words such as "without any addition". Removing these words will not change the intent of the Act. So the meaning of the provision in section 4 remains unchanged. If companies want to operate under a different name, it will still be required to register. For example, IBM, a foreign company, which operates under its own corporate name wishes to use an acronym for some other purpose, then under that name, they will have to apply for registration. Finally, he compares the speed of business registration at Silicon Valley to Singapore.”
“And I think these rules have to be constantly reviewed to make us responsive in a knowledge-based economy.”
“Or whether "X Malaysia Rubber Traders Pte Ltd" could trade as "XX Rubber" without further registration. This assumes, of course, that the earlier incorporation is all validly done. And how about words that are added on to a company's name? For example, the registered company name is "ABC International Tours Pte Ltd" and they trade as "ABC International Tourists Centre". [Mr Deputy Speaker in the Chair] 4.44 pm Sir, the third point would really relate to the whole process of business registration in Singapore, and I just like to urge the Minister to continue reviewing this process. The Ministry of Finance has done well and the Registry of Companies and Businesses has done well to shorten, for example, some of the processing time for registration, the red tape and all that goes along with registering a business in Singapore. Despite its responsiveness in recent years, I do know and I am told that it is still nonetheless not competitive, in the sense that if I register a company or a business right now in Silicon Valley, California - and indeed I am told that this is being done - at the same time that I register the company in Singapore, my Silicon Valley company would be formed first, and I think this is something which we must correct. Ultimately, we also need to look at further rules that sometimes are accretions to the Act, meaning that they are added on to the Act without really much thought. And this would be certain requirement, for example, for a local resident manager in an Internet world where the people could be operating a business from across the world. It would be very difficult for them to find a local resident manager. Invariably, they may actually appoint a local who has nothing to do with the business to represent them in Singapore.”
“Toh See Kiat: Mr Speaker, Sir, I would like to start by commending the Minister for this effort to constantly review the business registration processes to keep up with the times, and I am pleased especially with the effort to make it friendly for electronic filing and electronic payment purposes. Electronic filing, of course, eventually we hope, will be one of the ways that we can actually file our company reports, annual accounts and all that. But that is another matter. Sir, I would like to just refer to three points very quickly. First, on clause 2. Clause 2 is an amendment to section 2 of the Business Registration Act. Here, in section 2, we essentially have a section that deals with who is registrable and who is not registrable. I would like to seek the Minister's clarification about certain types of businesses that are now operating from home like tutors. Under the T 21 plan that we have, we are allowing homes to be used for businesses. In the old days, under the First Schedule of the Business Registration Act, there were a lot of businesses that were exempted from registration because they happened to be home-run businesses. And I do hope that the Minister would clarify whether the home operations now that are allowed under the T 21 plan would be operations that need to be registered under this Business Registration Act. My second point relates to clause 3. A clarification needed is whether this amendment would cover companies incorporated under the Companies Act (Cap. 50) and whether these companies can use acronyms and short form names without registering these acronyms and names. For example, "International Business Machines Pte Ltd" could trade as "IBM" without any registration.”
“Similar provisions on the reversal of the burden of proof are found in the Misuse of Drugs Act and the Immigration Act. Fixed time frame for appeals Clause 20 introduces new sections 31B(3) and 31C such that any person wishing to appeal to the Minister against a decision of the Registrar to refuse or cancel the registration of a business must appeal within 30 days. This will bring the Act in line with the Companies Act relating to the time-frame for appeals to Minister. Other amendments As the penalties in the Act have not been increased since 1974, opportunity is being taken to revise them now. In addition to these changes, other administrative amendments are proposed to update the Act and provide for the filing, making of payment and other transactions through electronic means. The rest of the amendments are of a drafting nature. Conclusion Before tabling this Bill, we had sought the views of lawyers, accountants and interested parties such as the Institute of Certified Public Accountants of Singapore (ICPAS), the Association of Small and Medium Enterprises (ASME) and the Law Society. In proposing these changes, we have taken into consideration the impact these changes would have on the public. The amendments will help reduce business costs, streamline the business registration procedures and allow for electronic modes of payment. We hope that these changes will provide a more efficient way of registering businesses and a more conducive regulatory environment for businesses. Sir, I beg to move. Question proposed. Assoc. Prof.”
“Empowering the Registrar to accept cashless modes of payment or renewal of businesses Clause 5 amends section 9 to allow the Registrar to make cashless modes of payment (eg, GIRO and other electronic means) a condition for renewals, if deemed necessary. The same amendment grants the Registrar the discretion to accept cash in exceptional circumstances. The amendment is in line with the national effort to promote electronic mode of payment, which will help to reduce the administrative cost to both the public and the Government. Granting the Registrar the power to refuse or cancel registration Clause 20 introduces new sections 31A and 31B that empower the Registrar to refuse or cancel the registration of businesses in instances where it is shown that registration would be for unlawful purposes, purposes prejudicial to public peace, welfare or good order in Singapore or where it is contrary to national security or the national interest. This will bring the Act in line with amendments made to the Companies Act in 1984. Shifting the burden of proof from the Registrar to the defendant in cases where the defendant is alleged to be carrying on business under the name displayed at his premises To facilitate prosecution, clause 14 introduces new section 23A that shifts the burden of proof from the Registrar to the defendant in cases where the defendant is alleged to be carrying on business under the name displayed at his premises. In such instances, the defendant will be required to disprove that he is "carrying on business", based on evidence such as having a sign outside the business premises, rather than the Registrar having to prove that the defendant is doing business.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, this Bill seeks to amend the Business Registration Act to update the Act, streamline registration procedures, enhance certain penalties, harmonize the Act with the Companies Act and enhance the computerisation of services offered by the Registry of Companies and Businesses. The Business Registration Act provides the basic framework of governance for unincorporated businesses, focusing primarily on registration, restrictions, offences, and penalties. Apart from two previous consequential amendments, this Bill is the first proposed amendment to the Act since its enactment in 1973. The crux of the Bill is to update our legislation and fine-tune administrative housekeeping matters. Sir, I shall now go on to highlight the main amendments proposed in the Bill. Extension of the validity period of Certificates of Registration Clause 5 of the Bill proposes the amendment of section 9 to extend the validity period of certificates of registration from 1 year to 3 years. This means that a certificate of registration issued upon registration shall be valid for a period of 3 years and shall thereafter be renewable for a period of 3 years in respect of each renewal. Figures from the Registry of Companies and Businesses show that 92% of businesses are still in operation after 1 year and require renewals, whereas only 59% of businesses are still in operation after 3 years. Presently, much time and resources are spent following up on annual cases of non-renewal of certificates. Adopting a 3-year renewal policy will relieve the business community of the unnecessary administrative burden of yearly renewal, and reduce business costs.”
“The exemplary conduct and behaviour of officers contribute to this trust and respect. We will continue to uphold the high standards and values that we have set for our police officers. SPEED LIMIT ON EXPRESSWAYS 6. Mr Chng Hee Kok asked the Minister for Home Affairs if he will consider raising the speed limit on expressways. Assoc. Prof. Ho Peng Kee (for the Minister for Home Affairs): Sir, Police and LTA regularly review speed limits on our roads and expressways. In June last year, the speed limits of nine roads were raised from 50 kmh to 60 kmh. The speed limit of 10 more roads will similarly be raised to 60 kmh in October this year. Sir, over the years, there have been improvements made to a number of roads and expressways and also to vehicle engineering. Some of the expressways can therefore accommodate vehicles travelling at higher speeds. Traffic Police and LTA have conducted a preliminary study of the eight expressways. The studies indicate that various stretches of our expressways can support a safe speed of 90 kmh. We have therefore decided to raise the speed limit of two stretches of expressways from 80 kmh to 90 kmh. After three months, if drivers' behaviour, traffic situation and accident rates are satisfactory, we can extend the higher speed limit to other expressways. Sir, the two expressways where the speed limits will be raised from 80 kmh to 90 kmh from October this year are the East Coast Parkway (ECP) from Benjamin Sheares Bridge to Changi Airport, and the Kranji Expressway (KJE).”
“I am sure we would do whatever is necessary. SINGAPORE POLICE FORCE (Corruption cases) 5. Mr Sin Boon Ann asked the Minister for Home Affairs whether there has been an increase in recent years in the number of corruption cases within the Police Force and, if so, what steps have been taken to solve the problem. The Minister of State for Home Affairs (Assoc. Prof. Ho Peng Kee) (for the Minister for Home Affairs): Sir, there is no upward trend in the number of corruption cases within the Police Force in recent years. As at 31st August this year, there were five corruption cases where 10 officers were charged in court as compared to six cases (involving eight officers) in 1998, three cases (involving three officers) in 1997, eight cases (involving nine officers) in 1996 and three cases (involving three officers) in 1995. The number of Police officers charged in court for corruption averaged about 5.75 per year from 1995 to 1998. This makes up less than 0.08% of the Police Force strength. The Commissioner of Police has given the assurance that corrupt officers will be systematically weeded-out. They will be held fully accountable for their actions even if it means having to make their acts public. Such transparency clearly demonstrates SPF's determination to eradicate corruption. We will not allow public confidence in the Police to be eroded because of the acts of a few rogue officers. Indeed, the Police has implemented a range of enhanced measures aimed at eradicating corruption and criminal acts in the Force. These include: First, more effective preventive measures; Second, stronger detection mechanisms; and Third, proactive co-operation with CPIB. Sir, the Police is fully conscious of the trust and respect accorded to them by the public.”
“NII is defined in accordance with Generally Accepted Accounting Principles. These Principles are well established and used universally not only in Singapore but in many other jurisdictions. So the question of the definition is not difficult.”
“I believe I have said in an earlier sitting of Parliament that we are considering the possibility of locking up part of NII, and we are studying this possibility. If we should decide to do so, there will be a change to the Constitution next year.”
“Sir, as all NII is current reserves under the Constitution, the government of the day can use NII to fund deficits and can run budget deficits up to the magnitude of the NII without drawing on past reserves. However, this Government has not had to fall back on NII at all for any purpose, as it had accumulated sufficient budget surpluses within its current term of office.”
“Access to Water Mains For more effective management of Singapore's water supply system, a new section 32A will facilitate the speedy repair and maintenance of water mains. This new section 32A will empower the PUB to require the removal of any structure or substance that is likely to hinder or obstruct access to any water main or connecting pipe belonging to the PUB. The proposed amendments to the Public Utilities Act will give the PUB the scope to perform better its functions as Singapore's Water Authority and as the Regulatory Authority of the electricity and gas industries. Sir, I beg to move. Question proposed.”
“At the same time, section 95 as amended will reduce the maximum term of imprisonment for damaging a low voltage cable from three years to 12 months, as this is less serious. Apart from a deterrent penalty, we will require reasonable precautions to be taken against damage to high-voltage cables. These are covered in the amendments to section 69. Firstly, a public electricity licensee which lays any high-voltage electricity cable on any private land or premises will have a duty to:- (a) insulate and encase the electricity cable in such a manner as to effectively protect it and prevent it from constituting a source of danger; (b) mark the location of the electricity cable in the prescribed manner; and (c) notify the owner or occupier of such private land or premises of the location of the electricity cable and the precautions to be taken if any earthworks are to be carried out on such land or premises. Secondly, it will be an offence for any person to obliterate, remove, damage, alter or tamper with any mark placed by a public electricity licensee wilfully and without reasonable excuse. Administrative Amendments There are two other amendments of an administrative nature pertaining to the electricity industry. A new subsection (3A) is added to section 47 to ensure that a public electricity licensee authorised to generate, transmit or supply electricity, does not or omits to do any act, whether directly or indirectly, to jeopardise the security and stability of electricity supply. A new subsection (4A) is added to section 50 making it the duty of a public electricity licensee to comply with any direction that the PUB may give to it from time to time for the purpose of regulating the prices to be charged by the licensee to any person.”
“To minimise damage to high-voltage cables in the course of construction work, section 95 of the Act will be amended to differentiate the requirements for earthworks in the vicinity of low-voltage electricity cables from those in the vicinity of high-voltage electricity cables. A new section 95(A) is proposed to require PowerGrid Ltd, which is the owner of high-voltage electricity cables, and contractors to work together to prevent damage to cables. This new section will regulate earthworks and cable detection work within the vicinity of any high-voltage electricity cable which belongs to or which is under the management or control of a public electricity licensee. Offenders face a fine not exceeding $100,000, or imprisonment for a term not exceeding five years, or both fine and imprisonment, if they do not follow the legislated procedures. The serious consequence to the economy as a result of damage to high-voltage cables makes a severe penalty necessary. A deterrent penalty of $1 million is therefore proposed for damage to a high-voltage cable. Section 107(3) will be amended to enhance the current fine of $200,000 to $1 million. The enhanced fine is the same as that provided under the Telecommunication Authority of Singapore Act for damaging telephone cables. At the present level of penalty, some contractors are tempted to risk hitting a cable rather than suffer project delay and payment of liquidated damages. A fine of $1 million will deter such irresponsible behaviour. With the amendments, offenders will face a maximum fine of $1 million, imprisonment for five years, or both. The maximum five-year term of imprisonment for high-voltage cable damage remains as before.”
“With this amendment, without being licensed by the PUB to do so, no person may supply electricity generated outside Singapore to any person or premises in Singapore, and no person may supply electricity generated in Singapore to any person or premises outside Singapore. Power Dips & Cable Damage Feedback from industry indicates that companies, particularly those in high-tech industries which rely heavily on sensitive computerised control systems, have been adversely affected by voltage dips in their power supply. Voltage dips, unlike power outages or blackouts, are momentary reductions of the voltage levels in the power supply system, which can disrupt the functions of sensitive computerised control systems. Voltage dips occur some 25-30 times a year. They have a severe impact on some industries, particularly high-tech, process industries like the wafer fabrication industry. According to the Economic Development Board (EDB), voltage dip-related losses suffered by five high-tech companies between August 1997 and November 1998 amounted to some $3 million. This figure does not include the cost of production downtime, labour and delayed product deliveries. The production downtime can amount to as much as 10% of the monthly output of a wafer fabrication company. In 1998, 57% of voltage dip complaints arose because of cable damage. Although the number of voltage dips caused by cable damage is relatively small (5 out of 36 in 1996, 2 out of 21 in 1997 and 4 out of 30 in 1998), the effect of such damage to high-voltage cables can be major. For Singapore to continue to attract high-tech, knowledge-based activities like wafer fabrication, we must ensure the high quality and reliability of our power supply.”
“The Minister for Trade and Industry (BG George Yong-Boon Yeo): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Public Utilities Act empowers the Public Utilities Board (PUB) to discharge its roles as the Water Authority and as the Regulatory Authority of the electricity and piped gas industries in Singapore. This Act was last amended in 1995 when the electricity and gas operations of PUB were corporatised. In the last four years, we have gained experience in the regulation of the electricity industry and some amendments to the legislation are needed. The amendments proposed are mainly to: (a) put in place further regulatory measures in the evolving electricity industry and to address the industry's need for high quality electricity supply; (b) increase the penalty for the offence of damaging a high-voltage electricity cable; (c) protect the property rights of the Board and facilitate the maintenance of water mains; and (d) protect the interest of consumers. I will first go through the amendments that are required in the Board's function as the Regulatory Authority for the electricity and gas industries. Regulation of Supply At present, there is no provision in the Act to regulate the supply of electricity generated outside Singapore to any person or premises in Singapore, or the supply of electricity generated in Singapore to any person or premises outside Singapore. It is proposed that the present definition of "supply" in section 2 of the existing Act be amended to enable the PUB to regulate such supply of electricity.”
“With regard to whether the definition of "stamp certificate" is too restrictive, let me briefly explain to Members how the E-Stamping system works. E-Stamping is an integrated electronic system on the Internet. The whole process is performed electronically, starting with the submission of document details, computation of duty and late penalty, followed by electronic payment and ending with the issuing of the stamp certificate electronically. The stamp certificate is issued on-line and users can choose to store the records electronically or in printed format at their premises. Thus the E-Stamping system can be easily extended to all on-line instruments. I would also like to thank the Member for his suggestion to include a provision similar to section 70C(2) in the other Acts, such as the Income Tax Act, the GST Act and the Customs Act. I am pleased to inform Members that there are currently provisions under the Income Tax Act and the GST Act to allow taxpayers to keep their records electronically. IRAS has, in fact, in consultation with the Institute of Certified Public Accountants in Singapore, issued two sets of guidelines in July 1999. As long as these criteria are met, taxpayers can apply to the Income Tax authority to keep their records electronically. Similarly, the Customs Act provides for the Director-General of Customs to permit records to be kept electronically. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee; reported without amendment; read a Third time and passed. PUBLIC UTILITIES (AMENDMENT) BILL Order for Second Reading read.”
“In order that the concession is not open to abuse, it is essential that the applicants make a formal application setting out the scheme together with all relevant documents to justify that the restructuring qualifies under the relevant sections. Hence, the need to make a formal application in writing. There have been cases where claims for section 15 were made despite that the conditions spelt out for remission were not met. In the case of Hong Kong, the relief is confined to conveyance between associated bodies, and does not include amalgamation between unassociated parties. To qualify, one corporate must own at least 90% of the issued capital of the other. To our knowledge, adjudication is also required in the Hong Kong legislation. Members can be assured that IRAS will assist and advise companies seeking their assistance on specific transactions. In fact, IRAS regularly liaises with lawyers and tax agents of companies on matters relating to corporate restructuring. Many of them are well aware of the conditions governing exemptions or remissions of stamp duties. They are made transparent to all applicants. I will now refer to the questions raised by the Member for Aljunied GRC. Presently, stamp duty is payable only on instruments effecting transfers, sales, leases, mortgages of immovable properties as well as stocks and shares. I assume the hon. Member is therefore making reference to contract notes on stocks and shares. If an electronic contract note or any other electronic instrument is an instrument for stamp duty purposes, it will accordingly attract duties. However, for the Member's information, stamp duty for contract notes for stocks and shares is currently suspended until 30th June 2000.”
“This could arise, for instance, when many such special purpose property holding companies are set up and frequently traded, amongst other factors. With regard to the Member's other example on the financing scheme for project development, the borrower is assigning certain assets to the bank as a security. If the assets are reconveyed back to the borrower upon full settlement of the loan, such an assignment by way of security is stamped with the mortgage duty and capped at $500, and not the 3% ad valorem stamp duty. The 3% conveyance duty is applied only when the assignment is effectively a sale. Section 15 of the Stamp Duties Act provides relief from payment of ad valorem duty on transfers made pursuant to a scheme of reconstruction or amalgamation. The concession is granted on the principle that there is no substantial change in ownership after the reconstruction. Hence a key criterion for remission is that at least 90% of a company must be involved in one single reorganisation exercise. To prevent abuse of the stamp duty remission, a two-year freeze on the ownership is also imposed on the restructured companies and to ensure that the beneficial interest in the shares or undertaking acquired remains substantially with the same people. Hence the condition that the restructured group should not be publicly listed within two years. The criteria in section 15 are constantly reviewed and revised, if necessary, to meet the changing circumstances and needs of the business community. Successful applicants under section 15 only pay a fixed duty of $10 on each transfer. Whereas a transfer of an undertaking consisting of immovable properties and shares will attract stamp duty at 3% and 0.2% respectively on the value of the undertaking sold. This represents substantial savings.”
“I would like to stress that the aim of the new section is to reduce blatant or contrived tax avoidance arrangements which can lead to systematic or significant revenue losses to the Government. It is not intended to affect genuine and normal commercial transactions, but because anti-tax avoidance transactions are getting more complex that the Commissioner needs a general anti-avoidance provision to enable him to effectively counter tax avoidance, and also to serve as a deterrent in order to safeguard revenue. Members may recall that this same issue was debated in the House in 1988 when the current anti-avoidance provision was put in place in the Income Tax Act. The concerns then were that this would be a major impediment to the development of our commercial enterprises. But the concerns have proved unfounded. Since 1988, IRAS has not seen the need to invoke the general anti-avoidance provision. Thus, it has been very effective simply as a deterrent. Likewise, section 33A in the Stamp Duties Act will not be invoked unless it is absolutely necessary. To reduce any uncertainty, IRAS would also be prepared to assist any individual or company wishing to consult them on specific transactions as to whether their transactions would fall under the ambit of the new section 33A, provided details of the transactions are clearly presented to them. The Member has given two scenarios to illustrate his points. In a property sale example, the purchaser may choose to acquire all shares of the company owning the property and pay the lower stamp duty of 0.2%. However, if it is subsequently proven that the purchaser has schemed with the seller to pay stamp duties at a lower rate, such a scheme would fall within section 33A.”
“Mr Speaker, Sir, I agree with the Member for Pasir Ris GRC that the public should only pay taxes in accordance with what the law requires, and no more. However, I would point out that stamp duty is an important source of Government revenue. In fiscal year 1998, stamp duties worth $950 million were collected. And in fiscal year 1997, it amounted to $1.7 billion. The general anti-avoidance provision, which is similar to that of the Income Tax Act, is introduced to ensure that there are sufficient measures to safeguard revenue and to deter parties from scheming to reduce or systematically avoid payment of stamp duty on dutiable instruments. The introduction of new section 33A is neither to stifle bona fide commercial transactions nor to hamper corporate restructuring. It simply empowers the Commissioner to disregard and make adjustments to certain arrangements which are clearly carried out solely or principally to evade tax. Tax avoidance schemes are purely tax-driven with little or no commercial value or rationale. This is unlike tax planning where the transactions or schemes have some commercial basis, and where the issue is structuring the most tax-efficient arrangement in accordance with the relevant tax laws. Generally, tax planning, if carried out within the confines of existing laws, would not be caught under section 33A. In assessing whether a particular scheme or arrangement would fall under the ambit of section 33A of the Act, the Inland Revenue Authority would amongst other things look at the presence of artificiality or contrived transactions to reduce or avoid tax liabilities but which have little or no commercial basis.”
“(b) Introduction of new sections 70A, 70B and 70C to confer on the Commissioner powers similar to those of the Comptroller of Income Tax to call for, and have access to, books, accounts and records. Provisions are also introduced to allow duty payable by a deceased person to be recovered from his estate so long as the assessment is made within three years after his death, and to require a company's liquidator to make full provisions for the payment of duty before distributing the company's assets to shareholders. (c) Introduction of a new section 33A, similar to section 33 of the Income Tax Act (Cap. 134), to allow the Commissioner to disregard any arrangement that is directly or indirectly structured to avoid, evade or reduce the liability in stamp duty and to make appropriate adjustments. (d) Amendments to sections 62, 63, 66 and 77 to revise existing penalties upwards to commensurate with the severity of various offences. New sections 64, 65 and 65A are also introduced for offences arising from the improper use and counterfeiting of E-Stamp certificates, furnishing of false information and obstruction to the Commissioner and his officers in performing their duties under the Act. Sir, I beg to move. Question proposed.”
“Amendments are made to the Act to provide for duty payable by a deceased person to be recoverable from his estate so long as the assessment is made within three years after the death. It also requires a company's liquidator to make full provisions for the payment of duty before distributing the company's assets to shareholders. In addition, the Act is amended to confer on the Commissioner powers similar to the Comptroller of Income Tax to enable him to call for and have access to books, accounts and records. There have been instances where parties scheme to reduce or avoid the payment of stamp duty on dutiable instruments. Clause 15 of the Bill enacts a general anti-avoidance provision, similar to that in the Income Tax Act, to allow the Commissioner to disregard any arrangement that is directly or indirectly structured to avoid, evade or reduce the liability in stamp duty and to make appropriate adjustments. Several penalties for offences have not been revised for many years. These penalties would lose their deterrent effect if they do not increase in tandem with increases in general income level. Some new penalties are introduced in relation to the improper use and counterfeiting of E-Stamping certificates. The Act is thus amended to revise existing penalties and introduce new ones. The Bill makes the following amendments to the Stamp Duties Act: (a) Introduction of new sections 6A - 6D to give legislative effect to the new E-Stamping System. Other general amendments to sections 2, 7, 11, 12, 38, 46, 48 and 57 are also made in connection with the introduction of E-Stamping.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill seeks to amend the Stamp Duties Act to give legislative effect to the introduction of Electronic-Stamping (E-Stamping) and to allow the Commissioner of Stamp Duties (the Commissioner) additional powers in administering the Stamp Duties Act (the Act). The Act is also amended to introduce a general anti-avoidance provision (similar to that in the Income Tax Act) to minimise instances whereby parties scheme to reduce or avoid the payment of stamp duty on any dutiable instrument. The introduction of electronic stamping, or E-Stamping, is another initiative to boost the use of information technology in the public service. E-Stamping will replace the current physical stamping of documents with franking machines or revenue stamps. A stamp certificate will be issued on-line to certify that a dutiable instrument has been duly stamped. When fully implemented, E-stamping allows users, mainly lawyers and other tax agents, to e-stamp dutiable instruments in the convenience of their own offices. E-Stamping also goes hand-in-hand with electronic payment of stamp duty. This would not only minimize the exposure to risk related to manual processing of dutiable documents and payments, but also enhance the efficiency of collection of stamp duty. Amendments to the Act are necessary to give legislative effect to E-Stamping. Stamp duty is an important source of Government revenue. Sufficient safeguards must be put in place to prevent revenue leakage. To facilitate the administration of the Act, the Commissioner of Stamp Duties would be given additional administrative powers to conduct investigations and to prevent evasion of stamp duties.”
“I do not see the relevance of this to the question posed by Dr Lily Neo. I suggest that the hon. Member submit a Question on this issue.”
“I cannot give a specific answer at the moment. It should probably be some time around the Budget.”
“Mr Speaker, Sir, currently, our primary savings scheme is the CPF. Government has given generous tax treatment to the CPF system. Mandatory contributions to CPF and income earned from CPF funds are tax exempt. In line with this, the streams of income paid out from annuities bought with the CPF Minimum Sum are tax exempt. An Inter-Ministerial Committee on Ageing Population is studying the adequacy of retirement provisions for Singaporeans in the light of a greying population. If tax benefits are useful to encourage people to build up their retirement savings and use them prudently when they retire, the Government would consider them. In particular, we will study whether to extend the current tax exemption for annuities bought with the Minimum Sum to annuities bought with CPF savings beyond the Minimum Sum.”
“Sir, I beg to move, In page 9, to leave out line 6 to the end of line 22, and insert - "(6) Where a shareholder sells his shares to the company in an off-market purchase referred to in subsection (3) (b) - (a) no deduction shall be allowed to him in respect of the costs he incurred to acquire the shares he sold to the company; and (b) the cost of each remaining share in the company held by the shareholder immediately after the sale shall be ascertained by the formula A/N where A is the aggregate cost of all shares in the company held by the shareholder immediately preceding the buyback of his shares; and N is the number of remaining shares in the company held by the shareholder after the buyback of his shares.". Sir, the reason for amendment No. (2) is similar to amendment No. (1). Amendment agreed to. Clause 4, as amended, ordered to stand part of the Bill. Clauses 5 to 25 inclusive ordered to stand part of the Bill. Bill reported with amendments, read a Third time and passed. ADJOURNMENT”
“Sir, I beg to move, In page 8, to leave out line 13 to the end of line 27, and insert - "(b) a dividend received by the shareholder where the buyback is an off-market purchase made in accordance with an equal access scheme authorised in advance by the company at a general meeting of the company.". Sir, this amendment is to delete mention of the tax treatment for share buybacks to special trading counters until possible tax abuses involved with the share buybacks through special trading counters have been thoroughly considered. Amendment agreed to.”
“In the case where an assessment does not give rise to any tax payable, the Comptroller would only issue a letter (rather than a notice) of non-tax computation to the taxpayer. The taxpayer is not required to object within 30 days to the letter of non-tax assessment if he disagrees with the computation. The 6-year time limit within which the Comptroller can make an assessment or an additional assessment is also not applicable in the case of a non-tax assessment. To give greater finality to both the Comptroller and the taxpayers for non-tax assessment cases, clauses 22 and 23 amend the Act to provide for the Comptroller to issue a notice to a taxpayer even if there is no tax payable by the taxpayer and for the 6-year time limit to also apply to non-tax assessment cases. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee. [Mr Deputy Speaker in the Chair] Clauses 1 to 3 inclusive ordered to stand part of the Bill. Clause 4 -”