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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“To prevent revenue leakage through such abuses, the Ministry of Finance and IRAS will be studying the issues thoroughly before share buybacks through Special Trading Counters may be allowed. The next tax change pertains to the existing tax incentive for SIMEX members. At present, SIMEX members who trade with non-residents are granted a concessionary tax rate of 10% on such trading income. Clause 17 amends the Act to make clear that the tax concession is also applicable to transactions made by SIMEX members with Approved Fund Managers acting on behalf of their non-resident clients. The next tax change deals with the tax treatment of cars. In tandem with the Land Transport Authority's vehicle tax rationalisation exercise in March 1998, changes were made to the tax treatment pertaining to company cars, rental cars and motor cars used for instructional purposes. Clauses 4(a), 7(c), 11(a), 11(b), 12 and 14 amend the relevant sections of the Act for this purpose. A 10% corporate tax rebate for the Year of Assessment 1999 was announced as part of the cost-cutting package in November last year. Clause 24 amends the relevant section of the Act for this purpose. The next tax change pertains to the 10% cut in employers' CPF contribution with effect from 1st January 1999, which was announced as part of the cost-cutting measures announced in November 1998. Arising from the cut in CPF contribution, clauses 7(a) and 7(b) amend the Act accordingly to reduce the maximum deduction allowable for employer's contribution to CPF, or any designated pension or provident fund. The last change pertains to Non-Tax Assessment. Currently, the Comptroller of Income Tax issues a notice of assessment only to taxpayers who have been assessed positively to tax.”
“For example, in a normal "market purchase" where it is not possible for the companies to identify the shareholders from whom they are buying back the shares, what the shareholders receive on the disposal of their shares will be treated as sales proceeds, like any other disposal which they make on the stock exchange, and not a receipt of dividends. The shareholders will not be taxed on the sales proceeds unless they are assessable to tax on profits from the sale of shares. Neither will they receive any tax credits. The same tax treatment will also apply to selective "off-market purchases" as well as share redemption. Clauses 4(b) and 4(c) amend the relevant sections of the Act to provide for the tax treatment of payments made pursuant to buyback of shares, capital reductions and redemption of shares. Sir, companies have also requested the Stock Exchange of Singapore allow for "market purchases" through special trading counters, which will allow listed companies to identify the shareholders from whom they are buying back the shares. I note that transactions through special trading counters could provide considerable room for tax arbitrages and abuses. These include risk-free arbitrages, artificial arrangements with low-tax persons to transact in shares through the special trading counters to maximise tax refunds, as well as the room available to those trading in shares to tax plan or arbitrage arising from their ability to deduct the cost of their shares from the receipts for shares sold through the special trading counters. This concern of tax abuse has in fact also been highlighted in the media.”
“Clause 10(a) introduces a new section 14M to grant approved hotel owners tax deduction of up to 150% of qualifying expenditure incurred on or after 1st July 1998 on the refurbishment of their hotels. The second tax change pertains to the payment of upfront land premium introduced by JTC and HDB. To assist companies improve their competitiveness, JTC and HDB have allowed its lessees to opt for an upfront land premium for the entire tenure of the land. Under existing tax rules, such premium would not be tax deductible nor would it qualify for tax depreciation. To provide that lessees would not be worse-off tax-wise if they were to opt to pay land premium upfront, a new section 14N is introduced to extend tax deduction to the amortisation of upfront land premium paid by JTC and HDB lessees for industrial land leases of less than 30 years. Clause 10(b) introduces a new section 14N for this purpose. To increase companies' ability to adjust their equity base and debt-equity ratio, and improve companies' return on capital, the Companies Act has been amended to allow companies to buy back their ordinary shares using their distributable profits. In tandem with this, the Income Tax Act needs to be amended to provide for the tax treatment of share buybacks, such that share buybacks or capital reduction made out of profits would be treated tax-wise as a dividend distribution. The treatment of receipts from buybacks in the hands of shareholders will depend on the mode of share buyback.”
“To support Singapore's drive towards higher value-added activities in the shipping sector, I announced the extension of the existing Approved International Shipping Enterprise Scheme to cover income derived from the operation of Floating Production Storage Offloading vessel and Floating Storage Offloading vessel (or FPSO/FSO) in Singapore. This change takes effect from Year of Assessment 2000. Clauses 3, 5(b) and 6 amend the relevant sections of the Act for this purpose. I had announced the extension of the One-Year Accelerated Depreciation Allowance Scheme to the purchase of new commercial goods vehicles and buses to replace an existing old diesel-driven vehicle which was registered before 1st January 1991, and which either has at least one year of valid COE left or is eligible for COE renewal. Clause 13 amends the relevant section of the Act for this purpose. To encourage more financial institutions to take on the role of Singapore Government Securities (SGS) Primary Dealers and to provide a significant incentive commensurate with the obligations undertaken by SGS Primary Dealers, I announced tax exemption on the income derived by SGS Primary Dealers from trading in SGS. Clauses 19(b) and 19(d) amend the relevant sections of the Act for this purpose. Tax changes not announced in the 1999 Budget Statement I shall now deal with the other tax changes, which had not been announced in the 1999 Budget Statement. The first tax change pertains to the Special Allowance for Hotel Refurbishment announced last June as part of the package of off-Budget measures, to encourage hotel operators to refurbish their premises during the lull period.”
“Once a financial institution has been awarded ABI status, all debt securities lead managed by it would be treated as 'qualifying debt securities' and there would be no need for an ABI to satisfy, on a transaction-by-transaction basis, the test of 'substantial arrangement in Singapore'. Clauses 5,19 and 21 amend the relevant sections of the Act for this purpose. I also announced the introduction of an automated procedure for the existing Tax Exemption Scheme for Syndicated Facilities. This is to give arrangers upfront certainty on whether a facility qualifies for tax exemption. Clause 16 amends the relevant section of the Act for this purpose. To encourage companies to locate and perform their headquarters functions in Singapore to service network companies worldwide, I announced tax exemption for Operational Headquarters which perform at least one substantive global function in Singapore. This change takes effect from Year of Assessment 2000. Clause 18 amends the relevant section of the Act for this purpose. To encourage finance companies to build up their level of general provisions further and thus strengthen the overall soundness of the financial system, I had announced that the annual limits on tax deductions for general provision of finance companies will be temporarily suspended for two years. Also, the overall limit on tax deductions for general provisions of finance companies will be raised to 3% of qualifying assets. These changes are effective from Year of Assessment 1999. Clause 9 amends the relevant section of the Act for this purpose.”
“Sir, I beg to move, "That the Bill be now read a Second time." The Income Tax (Amendment) Bill 1999 seeks to give legislative effect to the income tax changes announced in the 1999 Budget Statement. It also incorporates eight other amendments to the Income Tax Act. Tax changes announced in the 1999 Budget Statement I shall begin with the tax changes announced in the 1999 Budget Statement. There are a total of nine tax changes which require amending the Act. I will start with the tax changes affecting individual taxpayers. I had announced a personal tax rebate of 10% for the Year of Assessment 1999 to help taxpayers tide over the temporary difficult period. Clause 25 amends the relevant section of the Act for this purpose. To give further emphasis to the importance of lifelong learning and skills upgrading, I had also announced that with effect from Year of Assessment 1999, the maximum tax deduction allowable for certain education expenses for individuals will be raised from $2,000 to $2,500. Clause 15 amends the relevant section of the Act for this purpose. There are seven tax changes affecting the corporate sector. I had announced further refinements to the bond market tax incentives. The refinements include extending the tax exemption to include non-residents who have permanent establishments in Singapore, provided that such non-residents do not purchase the securities using funds from Singapore operations, and the introduction of the 'Approved Bond Intermediary' (ABI) scheme. Under the ABI scheme, the Monetary Authority of Singapore (MAS) will evaluate a financial institution's debt origination and trading capabilities in Singapore on an overall basis.”
“No, it is not the rationale. You have just turned the question around. NII has always been current reserves. That is according to the Constitution. So there is no dispute over that.”
“The NII is in the first page of the Budget book, below the line. You can just add up the figures year by year. It averages between $3 and $5 million a year.”
“Hence, by the end of FY99, we now expect to have a cumulative budget surplus, since this Government took office, of $1.8 billion, excluding NII. Therefore, the Government has had no reason to ask the President to unlock past reserves, regardless of the treatment of NII. This is a positive outcome of our prudent policies, and not a cause for "disappointment". Conclusion I have explained that while there were difficulties between the President and Government, they arose from honest differences in views. The Government has extended full cooperation to the President and the CPA, and made no attempt to obstruct or show disrespect to the President. Despite the problems encountered, the Government remains committed to protecting past reserves and making the institution of the President with custodial powers a success.”
“This study could lead to an amendment of the Constitution next year. Therefore, while NII continues to be current reserves, the Government is aware of the problem which the President has highlighted, and has been working with him and the CPA to find a solution. No Need to Draw on Past Reserves Because of NII? The President also expressed his "disappointment" that the Government declined his offer to unlock past reserves to finance its package of cost cutting measures, and said that the Government was able to do so because it had changed its treatment of NII to count as current reserves. This is not the Constitutional and financial position. As I have just explained, NII has always been current reserves under the Constitution. In any case, the Government has not needed to fall back on NII at all, whether these constitute past or current reserves, to fund its special packages and the budget deficit. Through careful financial stewardship, the Government has accumulated sufficient budget surpluses within its current term of office for this purpose. The budget surplus does not include any NII, because NII has always been an item "below the line" in the Government budget. I informed this House during my FY99 Budget Debate round-up speech on 9th March 1999, that between 25th January 1997, which is the day the present Government took office, and 31st March 1998, the Government had generated an operating budget surplus of $6.3 billion. After taking into account the expected deficits in FY98 and FY99, we would still have a cumulative surplus of $368 million as at 31st March 2000. As it has turned out, in FY98, instead of the budget deficit of $466 million originally estimated, we achieved a budget surplus of $925 million.”
“Revised projections of revenue and expenditure showed that earlier expectations of continuing large surpluses had been too optimistic The Government therefore looked for more flexible alternative ways to protect the NII. The matter has been discussed at length between the Ministry of Finance, the Cabinet and the President's office. The Government seriously studied including a more stringent definition of NII in the White Paper on Principles. It finally decided against doing so, because the present uncertain economic outlook made long-term budget projections difficult. A second reason was that doing so would cause the Principles to go beyond the Constitutional provisions. The Principles cannot override the Constitution; they can only give effect to them. A future government would not be bound by the definition of NII in the Principles. The President and CPA have given their opinions, including the suggestion to lock away half of the NII from past reserves. The Government has carefully considered their views. The suggestion to lock away part of the NII has merit. But we have to find the right basis for determining how much to lock away, as a fixed proportion like 50/50 may not be appropriate for all circumstances. The Government therefore has not yet made a final decision. In March 1999, the Government informed the President's office that while it had earlier been inclined not to change the status quo treatment of NII, it had relooked at the calculations and concluded that there could be a case for protecting NII or a significant part of it. This would require a Constitutional amendment, rather than a provision in the Principles which would have no legal force. The Government needed time to study how best to protect NII.”
“Treating NII as current income is also the standard approach under Generally Accepted Accounting Principles. The President also said that the Government had locked up NII as part of past reserves since 1992, but last year decided that "the NII should now belong to the current account". This is not accurate. The actual situation is as follows: Under the Constitution, NII is and has always been current income. The Government has not changed this treatment. However, it has carefully studied whether it should do so, and lock up part of NII as protected reserves, especially that part of NII earned from investing past reserves. This is a complex issue. We have to project the likely state of the economy and the budget position of the Government over the long term, to assess how much revenues the Government will have and what it will need to spend. This involves many uncertainties. We must also weigh carefully the proper balance between restraining a profligate government on the one hand, and allowing a responsible government enough flexibility to operate on the other. The matter is not pressing, and if we decide hastily and make a mistake, it will be difficult to reverse later. It was the Government, not the President, who first raised the issue of NII in January 1992, well before President Ong took office. Against a backdrop of comfortable surpluses, the Government decided to take the more conservative stance of locking up all the NII earned from past reserves, and to amend the Constitution for this purpose, not immediately, but after about a year of implementation. However, subsequently the Government did not follow up to amend the Constitution.”
“The President raised the question of whether Net Investment Income (NII) should be treated as current reserves or past reserves. He said that he had been told that according to the Generally Accepted Accounting Principles (GAAP), NII constituted current reserves, but he was not sure, as he was not an accountant. The proper treatment of NII is not a question of opinion. It depends on the constitutional definition, and on what constitutes standard accounting practice. On these matters, the Government does not act arbitrarily on its own. It takes legal advice from the Attorney General's Chambers, and professional advice from the Accountant-General and the Auditor-General. Similarly, the President and the CPA can obtain legal and professional advice, should they wish to. The Constitution does not envisage either the Ministers or the President and the CPA having to be their own lawyers or accountants. Let me explain what exactly NII is. NII is the interest and dividend income earned from investing Government's reserves, net of expenses on investment and debt servicing. NII does not include any capital gains or losses that may be made from the disposal of investments, which are classified as Investment Adjustments. Under the Constitution, the President has custodial powers over "reserves which were not accumulated during the current term of office of the Government". The Attorney General's advice is that this definition does not cover NII, because NII is accumulated during the current term of office of the Government. This is so even when this NII is derived from investing past reserves that are themselves locked up. Therefore, the President's second key does not extend to NII. The President has not challenged this legal opinion.”
“" Accrual accounting is a standard practice not only in statutory boards in Singapore, but in commercial firms worldwide. Companies and statutory boards have auditors whose duty is to ensure that what are declared as capital expenditures have in fact been properly spent on capital items. Furthermore, under the Constitution, the Chief Executive Officer and Chairman must declare whether the budget is likely to draw on past reserves, and board members and CEOs have a duty to inform the President of any proposed transaction which is likely to draw on past reserves. As an additional safeguard, the appointments of the Chairman, Board and CEO of the key statutory boards and Government companies are subject to the President's veto. In view of the President's stand, the Government took an explicit decision reaffirming that statutory boards and Government companies should continue to prepare their accounts and budgets on an accrual basis. This has since been incorporated in the White Paper on Principles. On 27th January 1997, the Prime Minister wrote to the President seeking his agreement to accrual accounting, and explaining the safeguards in place. On 30th January 1997, the President replied stating that he had approved the CPF Board's budget and agreeing to the principle of accrual accounting. But he still said that "the concern that a profligate government could hide its lavish spending under the guise of capital expenditure was not fully addressed." This account of events makes clear that no public officer failed in his duty to report a possible drawdown on reserves to the President in this instance. The Government does not understand why the President regarded this genuine difference of opinion as "unpleasant". Net Investment Income - Is it Current or Past Reserves?”
“However, following the Constitution, he would be gazetting his opinion that the budget was likely to draw on the past reserves of the CPF Board after the changeover of Government. The Government did not agree with the President's approach. The Prime Minister replied the next day repeating the explanation given by the CPF Board, and requested the President to hold back gazetting his opinion. He suggested that since there seemed to be a difference in interpretation of the budget, we should get the Accountant-General or the Auditor-General to state whether or not there would be a drawdown on reserves following the changeover of Government. The President replied on 20th December 1996. He agreed to hold back gazetting his opinion, and stated that he would also hold back his approval of the budget until the issue was resolved. In response to the Prime Minister's proposal to seek the views of the Accountant-General and the Auditor-General, the President wrote as follows: "My duty does not include clarifying with the professional bodies the principles and interpretation. That duty lies with the Government." The President also explained his reservations over accrual accounting as follows: "My concern here is that this approach (i.e. accrual accounting) will allow a profligate Government to hide its lavish spending under the guise of capital expenditures. In the final analysis, it is the Government which would have to recommend whether this is a principle that should guide my actions. And in the absence of clearly enunciated and mutually agreed principles and procedures for dealing with such matters, I would rather err on the side of stringency. If the principles had been settled earlier, this uncertainty about what is or is not a draw would not have arisen.”
“But with a changeover of government scheduled to take place soon, all of the Board's accumulated surpluses would become past reserves. Therefore, the CPA wanted the Chairman and the General Manager of the CPF Board to clarify the basis on which they made their declarations, "knowing full well that there will be a General Election soon". The General Manager replied on 7th December 1996 to explain that the CPF Board accounts were on an accrual basis. In accrual accounting, capital expenditure is depreciated over the useful life of the asset, rather than in one lump sum in the year of expenditure. The operating surplus of $23 million projected by the CPF Board had already charged annual depreciation of $11 million against the year's income. Therefore, there was no drawdown on past reserves, whether the elections were held or not. The General Manager further explained that even on a cash basis, the CPF Board would still project a budget surplus of $7 million. On a cash basis, we would indeed deduct the $27 million capital expenditure from the projected operating surplus of $23 million, but we would also have to add back the depreciation of $11 million. Otherwise we would in effect be deducting the capital expenditure more than once, erroneously. The CPF Board's budget and accounts were thus in order and there would not be any drawdown on the CPF Board's past reserves. However, the President did not accept the CPF Board's explanation. He wrote to the Prime Minister on 16th December 1996, stating that he would approve the budget because the expenditure was not wasteful and was in the public interest.”
“Withholding Approval of a Statutory Board Budget President Ong said that public officers should change their mindset, and report to the President any improper transaction which may draw down the reserves. He said that he suspected that some public officers in the Executive, including some ministers, considered the President a nuisance. The President cited as an example one "unpleasant" encounter when he had to withhold approval of the budget of a statutory board. Its expenditure of $27 million had exceeded its income surplus of $23 million, which would have caused a draw on its past reserves. He said he was prepared to approve the drawdown, but there were problems because of its accounting system. He brought the matter to the Government's attention, and the matter was resolved and he approved the budget. The statutory board in question is the Central Provident Fund Board. The chronology of events is as follows. On 8th November 1996, the CPF Board put up its budget for 1997 to the President for routine approval. The budget showed an operating surplus of $23 million. The submission was accompanied by a declaration signed by the Chairman, Dr Andrew Chew, and the General Manager, Mr Lim Han Soon, that the budget was unlikely to draw on the Board's reserves which were not accumulated during the current term of office of the Government. On 6th December 1996, the Principal Private Secretary to the President informed the CPF Board that the Council of Presidential Advisors (CPA) had noted that the Board had budgeted a capital expenditure of $27 million, which exceeded the budget surplus of the year by $4 million. The excess would have to be funded by the Board's accumulated surpluses.”
“The question whether to revalue all State properties at each changeover of Government had arisen earlier. On 15th July 1996, the Auditor General had written to inform the Ministry of Finance and the key statutory boards and Government companies (Those listed in the 5th Schedule of the Constitution.) that he would require all state properties to be revalued at market value as at the date of changeover of the Government. He cited the Constitution, the impending general election, and the Audit Act. The Ministry of Finance sought the Attorney General's advice on the Auditor General's directive. On 30th September 1996, the Attorney General's Chambers advised that, in so far as the directive concerned land, such a complete revaluation was unnecessary as a matter of law. It did not result from a Constitutional need to protect the reserves, as the question whether past reserves were being drawn down did not arise unless a piece of land is actually about to be sold off or alienated. Furthermore, the proposed revaluation was a waste of resources, as firstly the reality was that much of state land would remain as state land, and secondly the value of each piece of land depended on planning and zoning restrictions, which the Government could change. The Ministry forwarded this opinion to the Auditor General. The Auditor General then revoked his directive to revalue all properties at changeover, stating that there was now no legal basis to do so. How to protect State lands and buildings in the reserves is a complex issue which the Government and President's office subsequently studied in much greater depth. The final arrangements agreed upon make up an entire two-page paragraph (Paragraph 10 in Part A.)of the White Paper on Principles.”
“In response, the Accountant-General conceded that following accounting principles, one should take the value of what was protected at that point in time, but it would take 56 man-years (not 52) just to value the existing properties. He added that for the purposes of protection of the reserves, it did not matter when the valuation was actually made, and it could be at the point of sale. This was recorded in the minutes. "56 man-years" does not mean it takes 56 years to complete the task. A man-year is a measure of the amount of work to be done, and not of the time it will take to do it. It means that it takes 56 men working for one year, or 28 men working for two years, or one man working for 56 years. It is not unreasonable for a team of 56 men to take one year to value the entire stock of land and buildings owned by the Government. The land was in some 50,000 parcels, including miscellaneous parcels like roads, drains and even some reservoirs. Such land parcels had to be verified through actual surveys. Thus, the President's recollection of what the Accountant-General had said was mistaken. The Accountant-General did not say that 52 man-years were needed to produce a listing of physical assets. He actually said that it would take 56 man-years to conduct a complete valuation of the physical assets. Furthermore, at the time he said this, he had already produced the listing that the President had requested. He did not produce it only after two or three years, or only after the President insisted upon it. It is therefore clear that the Accountant-General and the Government departments have cooperated fully with the President, and have not in any way sought to hinder the President in his job of protecting the reserves.”
“The agreed understanding is contained in the set of Principles for determining and safeguarding the accumulated reserves, which was published as a White Paper. I will now give the House a full account of the four issues raised by President Ong, to clarify what had actually transpired. In the Government's view, these problems were neither fundamental nor intractable. They arose mainly because of differences of opinion on the accounting of Government's physical assets, and difficulties that arose in operating the new system. They were inevitable consequences of the two-way learning process. Obtaining an Inventory of Government's Assets The President had said it had taken the Accountant-General "more than two, three years" to inform him what the Government's reserves consisted of. He said that when he asked for an inventory of the physical assets, the Accountant-General had responded that it would take "52 man-years" to produce. He had replied, "Never mind. Go ahead", and finally he received the list plus diskettes a few months before the 1997 elections. Members of this House must wonder why it would take "52 man-years" to produce a listing. The President's office had requested a listing of physical assets from the Accountant-General, Mr Goh Khee Kuan, on 18th June 1996. At a meeting with the President on 14th August 1996, less than two months later, the Accountant-General provided a listing of State buildings, while the Commissioner of Lands provided a listing of State lands. Updates were subsequently sent to the President's office. At this meeting, the President remarked that to protect past reserves, the reserves should ideally be denominated in dollar value.”
“Mr Speaker, Sir, on 16th July 1999, President Ong Teng Cheong held a press conference announcing that he would not stand for re-election as President. At this press conference, the President spoke of what he described as a "long list" of problems he had encountered in trying to protect past reserves. In particular, the President raised four issues: (a) It would take the Accountant-General "52 man-years" to produce the list of physical assets of the Government. (b) One "unpleasant" encounter where he had to withhold approval of a statutory board budget because it would have caused a draw on its past reserves. (c) Whether Net Investment Income (NII) should be treated as current reserves or past reserves. (d) His "disappointment" that the Government did not need him to unlock the past reserves to finance its package of cost cutting measures, because it had changed its treatment of NII. These issues concern the working of the Presidential safeguards to protect past reserves. The Constitution had been amended in 1991 to provide for a directly elected President who would have discretionary powers to veto the use of past reserves and the appointment of key officials in the public service. Such a move was without precedent in any country. It was a novel experience for both President Ong Teng Cheong, the first person directly elected by the electorate to this new office, and the Government. The past six years have therefore been a mutual learning experience for the Government and the President. Many problems were encountered and resolved. Both sides have worked together to interpret the constitutional provisions, and to develop working procedures for carrying them out.”
“Sir, currently, paragraph 4(3) of the Second Schedule requires the Minister to present the audited financial statements and auditors' report to Parliament. The amendment in section 22 is to include this in the main Act. Section 23 empowers the Council to compound any offences committed under the Act. This is not provided for in the current Act. This amendment will give the Council more flexibility to take action against public transport operators or commuters who flout the rules set by the Council. Section 25 contains the provisions of the existing section 22 and further empowers the Council to make regulations necessary or expedient for carrying out the provisions of the PTC Act. For instance, the Council may prescribe the procedures for application of bus service licences and fees payable and other procedures pertaining to the hearing of appeals, the powers and duties of officers, etc. My Ministry has also taken the opportunity to update the provisions on financial and auditing matters in the Second Schedule of the Act to bring them in conformity with standard provisions of the Government which had changed over the years. Sir, I beg to move. Question proposed.”
“This will allow the Council to take into account the views of a wider segment of population in its deliberations. The remaining amendments, mainly in sections 5, 12, 13, 19, 21 to 23 and 25, are to regularise the various functions and to enable the Council to carry out its role more effectively. Section 5 is amended to be consistent with other statutes on appointing and employing officers, employees and agents to carry out its functions. In addition, new sections 5A and 5B have been drawn up to provide members, officers and employees of the Council and persons acting under the directions of the Council protection from personal liability for functions undertaken in good faith under the Act. Likewise, it is proposed that all members, officers and employees of the Council be deemed to be public servants within the meaning of the Penal Code. These amendments will make the Act consistent with other statutes where all employees of statutory boards are deemed as public officers. It will formally give explicit powers and protection to PTC officers. Section 12 is amended to allow security deposits collected for the issuance of bus service licences to be made to the Council instead of the Accountant-General. Sections 13 and 19 are consequential amendments arising from the amendment to Section 12. Currently, the security deposits are held in the Accountant-General's account. To enable the Council to carry out its functions more efficiently, it is better for the Council to hold these deposits in trust. The amendment in section 21 is to provide for the procedures and requirements for the application of public transport fare revisions to be clearly spelt out.”
“The Council approves and regulates bus routes and public transport fares, balancing the interests of the commuters with that of the public transport operators. The PTC Act has not been amended since its enactment. Over the years, various developments have taken place, such as the deregulation of taxi fares last September and the expansion of types of bus services such as shuttle bus services between private housing estates and the nearby MRT stations. The Ministry and the Council have, therefore, reviewed the PTC Act and are proposing to amend the Act to: (a) bring it up to date with latest developments; (b) increase the Council's size to widen its representation; and (c) facilitate the Council's discharge of its functions more efficiently. Let me explain these amendments in greater detail. First of all, we propose to include a new section 24 in the Act to empower the Council to exempt any person or class of persons from all or any of the provision of the Act or regulations made. This amendment will give the Council more flexibility in the application of its decisions and operations. For instance, the Council has deregulated taxi fares from 1st September 1998, hence this new section will enable the Council to regularise the policy and exempt taxi operators from requiring the Council's approval for any taxi fare revisions. Next, we are proposing to amend paragraph 1 of the First Schedule to increase the number of Council members who are not representatives of public transport companies by two, from nine to 11. This is to allow the Ministry to widen the representation of public members on the Council so that other key segments of the population may be represented on the Council.”
“The scheme is also made available to other traders who engage in value-added activities substantially for overseas clients and face the same GST problem as the contract manufacturers on their local deliveries. Proposed Amendments The Bill makes the following amendments to the Goods and Services Tax Act: (a) Amendment of section 12(8) to allow regulations to be made with respect to the time of supply for the purposes of the recipient accounting for the output tax; (b) Amendment of section 20(2) to allow the approved contract manufacturer or trader to be able to claim credit for input tax attributable to supplies made by him; and (c) Introduction of a new section 37A relating to the ACMT scheme such that local supplies made by the approved contract manufacturer or trader on behalf of an overseas client shall be free of GST and the recipient of the goods would be required to account and pay GST for the goods as if he had himself supplied them. The new section 37A also enables the Minister to make regulations relating to the implementation details of the scheme. 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; reported without amendment; read a Third time and passed. PUBLIC TRANSPORT COUNCIL (AMENDMENT) BILL Order for Second Reading read. The Minister of State for Communications and Information Technology (Dr John Chen Seow Phun): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Public Transport Council (PTC) was formed on 28th August 1987 with the enactment of the PTC Act.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill seeks to amend the Goods and Services Tax Act to give legislative effect to a new scheme announced in the FY99 Budget, the Approved Contract Manufacturer and Trader (ACMT) Scheme. Rationale I have announced the ACMT scheme in the 1999 Budget to address the GST burden faced by some contract manufacturers whose businesses are substantially with overseas clients. The increasing complexity of business transactions has caused GST problems for some contract manufacturers. Instead of exporting the finished goods to their overseas clients, contract manufacturers are increasingly also being asked by their overseas clients to deliver the finished goods to the overseas clients' customers in Singapore. This local delivery is considered a taxable supply under our GST law. In instances where the overseas clients who own the finished goods do not want to designate an agent in Singapore to account for the GST on their behalf, the contract manufacturers might end up having to bear the GST on local delivery and have no recourse to claim it back. This GST burden makes our contract manufacturers less competitive internationally. Under the ACMT scheme, the local delivery of the finished goods by the approved person to the customers of the overseas clients and the fees for the value-added activities on the goods will be deemed to be outside the scope of GST and GST will not be chargeable. Instead, the overseas client's local customers who purchase and receive the goods in Singapore will account for GST.”
“Sir, I beg to move, "That the Bill be now read a Third time." Question put, and agreed to. Bill accordingly read a Third time and passed. INSURANCE INTERMEDIARIES BILL Order for Second Reading read.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The purpose of this Bill is to make final provision for an additional expenditure of $1.8 million for payment of expenses on investments (EOI) under the Ministry of Finance (MOF). The supplement will bring the total provision for EOI in FY98 to $247 million. The FY98 provision for expenses on investments was $227 million. The final expenses on investments came to $247 million which was $20 million more than projected. After offsetting savings of some $18 million from other votes under the Ministry of Finance, a further supplement of $1.8 million is needed. The higher expenses were incurred because of increased investment opportunities towards the end of FY98, which had resulted in higher than expected expenses. In a sense, it was a happy problem because higher profits had accrued. Members will appreciate that it is difficult to estimate accurately the requirements for expenses on investments, especially given these times of market volatilities. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“Temasek Holdings currently has a number of directly held unlisted GLCs, eg, PSA Corp, Singapore Power and SMRT. The Government's intention is to publicly list these unlisted GLCs when they are ready. There is no predetermined schedule for their listing. The Government is in no hurry to divest its shares in them as, unlike many countries which have embarked on privatisation exercises, we do not require the privatisation proceeds to fund the Budget. The timing for the listing would depend on factors like market conditions, and the companies' state of preparation for a successful listing. PROMOTION OF CARS THAT CONSERVE FUEL 30. Mr Simon S C Tay asked the Minister for Communications and Information Technology whether he will consider tax and other special incentives to promote electric, hybrid and other cars with special features that conserve fuel and reduce harmful emissions.”
“Resolved, That this Parliament, in accordance with Section 11(1) of the Government Securities Act (Chapter 121A, 1993 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Government Securities in Singapore, a further sum not exceeding one hundred and twenty thousand million Singapore dollars (S$120,000,000,000), thereby in total a sum not exceeding two hundred and twenty thousand million Singapore dollars (S$220,000,000,000). Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.25 pm. Sitting accordingly suspended at 3.05 pm until 3.25 pm. Sitting resumed at 3.25 pm [Mr Speaker in the Chair] SINGAPORE 21 (Motion)”
“The planned increase in supply of Singapore Government securities over the next five years or more will increase the availability of Singapore Government bonds to add liquidity and depth to the market, and help to establish a benchmark Singapore Government bond yield curve for the pricing of other bond and capital market instruments. A more vibrant capital market in Singapore with a larger pool of fixed income origination and trading skills, diversity of borrowers and a broader investor base, will enhance Singapore's status as a financial centre. There will be spin-off benefits through increased activities in the foreign exchange, swap, repurchase and derivative markets. With the increase in issues of Singapore Government securities to both the general market and CPF Board, it is estimated that the annual debt servicing costs on outstanding Singapore Government bonds will increase from about S$3,000 million per year currently, to about S$5,300 million per year in FY 2003. However, the earnings from foreign reserves acquired, when the S$ funds withdrawn through issue of Government securities are recycled back to the market, are expected to more than offset this interest cost. The authority of Parliament is therefore sought to raise the ceiling for borrowing through the issue of Government securities by a further sum of S$120,000 million. This will increase the ceiling from the current S$100,000 million to a total of S$220,000 million. This ceiling is applicable to the cumulative total of all Government securities issued, regardless of whether they have been redeemed or are still outstanding. Question put, and agreed to.”
“Mr Speaker, Sir, I beg to move, That this Parliament, in accordance with Section 11(1) of the Government Securities Act (Chapter 121A, 1993 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Government Securities in Singapore, a further sum not exceeding one hundred and twenty thousand million Singapore dollars (S$120,000,000,000), thereby in total a sum not exceeding two hundred and twenty thousand million Singapore dollars (S$220,000,000,000). Sir, on 19th March 1992, Parliament resolved, in accordance with section 11(1) of the Government Securities Act 1992, that the Minister be authorised to borrow, by the issue of Government securities in Singapore, a sum not exceeding S$100,000 million. Presently, there remains only about S$2,100 million of Government securities left unissued. The Monetary Authority of Singapore expects to exhaust that remaining amount in the next few months. It is estimated that S$120,000 million in Singapore Government securities would have to be issued over the next five to eight years. The proposed higher limit for issuing of Government securities is part of an overall strategy to develop the Singapore Government Securities (SGS) market as a foundation for the growth of Singapore's capital market, and to realise our vision of becoming a leading international debt hub in Asia by FY 2003. An estimated 65% or S$78,000 million of the Government securities will be issued to the CPF Board. The remaining 35% or S$42,000 million of Government securities will be issued to enable financial institutions such as banks, finance companies and insurance companies to meet requirements for liquid assets, and to meet the demand from financial institutions, fund managers and others for investment purposes.”
“Parliament is requested to enable the Government to issue the Treasury Bills up to a total amount not exceeding S$15,000 million. Sir, I beg to move. Question put, and agreed to. Resolved, That this Parliament, in accordance with section 3(1) of the Local Treasury Bills Act (Chapter 167, 1988 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Treasury Bills in Singapore, a revolving sum not exceeding fifteen thousand million Singapore dollars (S$15,000,000,000). GOVERNMENT SECURITIES (Motion)”
“Mr Speaker, Sir, I beg to move, That this Parliament, in accordance with section 3(1) of the Local Treasury Bills Act (Chapter 167, 1988 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Treasury Bills in Singapore, a revolving sum not exceeding fifteen thousand million Singapore dollars (S$15,000,000,000). Sir, on 25th May 1995, Parliament resolved, in accordance with section 3 of the Local Treasury Bills Act (Chapter 167), that the Minister be authorised to borrow, by the issue of Treasury bills in Singapore, a sum not exceeding S$10,000 million. This limit is applicable to the outstanding amount of Treasury bills. As of 1st April 1999, the outstanding amount of Treasury bills issued is S$8,940 million. There is a need for the current limit to be raised. More Treasury bills need to be issued to meet market demand and to mop up excess liquidity in the banking system, where necessary. The Monetary Authority of Singapore will be gradually stepping up Treasury bill issues to support capital market development efforts. With the proposed increase in Treasury bill issuance, the annual debt servicing cost on outstanding Treasury bills is expected to increase from about S$200 million per annum currently, to about S$260 million per annum in FY2003. The earnings from foreign reserves acquired, when the S$ funds withdrawn through issue of Treasury bills are recycled back to the market, are expected to more than offset this interest cost. It is proposed, therefore, that the current ceiling for borrowing by Treasury bills of S$10,000 million, be raised by another S$5,000 million to a total of S$15,000 million.”
“SIA's decision to acquire a 50% stake in Ansett from News Limited is made based on commercial considerations. Whether SIA had consulted ANZ before making the bid for Ansett is also a business issue. While the Government may be a major shareholder of SIA, it is the policy of the Government to leave commercial decisions to the company. INDIAN MIGRANTS 3. Mr R. Ravindran asked the Minister for Home Affairs if he will (a) state the number of migrants of Indian origin who have taken up permanent residence and citizenship in Singapore between 1st January 1990 and 31st December 1998; and (b) give the breakdown of the numbers by Indian sub-ethnic groups and their mother tongue Indian languages.”
“I think we will have to wait to see what is the size of it. At the moment, as far as we are aware, it is quite small. It is played by some of the older folks. I am not aware of any young Singaporeans playing chap ji kee. 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. ACKNOWLEDGEMENT TO THE CHAIR”
“Why not legalise all other forms of gambling, such as chap ji kee or some of the other minor gambling forms? The simple answer is that we try to avoid as much legislation as possible until the activity reaches a level which requires some form of regulation. Football has reached a stage where the activity of illegal gambling in football which is happening now, is quite large. And we do not want to leave the field open to illegal gamblers who will use their revenues to promote bribery and match-fixing. We must do all we can to eliminate this. So the primary objective, apart from the funds made available for promoting S-League and other sports, is to try and regulate this and try to knock out, if we can, the illegal operators. It may not be possible to reduce them entirely. But by and large, our experience with legalising horse racing gambling and 4-D has proven that this substantially reduces the scope for illegal operators. On his suggestion that Government has introduced this Bill in order to generate new sources of income, he could not be further away from the truth. We have estimated that, in the first couple of years, the total volume of football betting will probably be around $250 million a year gross. After deduction of bet payoffs and the operating cost, Singapore Pools will be able to provide about $9 million per year of funding for the S-League plus other sports activities, leaving the Government with $4 million a year of new tax revenue. He will understand that this is a very small sum and, obviously, it is not a new revenue source of any consequence. I think I have answered all the questions.”
“Mr Speaker, Sir, first of all, I would like to thank Mr Ahmad Magad for his support of the Bill, notwithstanding his reservations about the religious aspects of gambling which everybody recognises. It is an undesirable activity but, nevertheless, not one which we can easily eliminate. I think tolerance, understanding and education are the only routes to eventually solve it. The parents should try to dissuade their children from taking up gambling. So his understanding of the issue is very commendable. Mr Rai asked why 20%, and not 15%. This was based on an estimate of the amount of revenue which will accrue to Singapore Pools for use in promoting football and other sports. Government will take its reasonable share, but we will review this after two years, depending on the actual outcome. Turning to the more general philosophy expressed by Mr Low, I do not disagree with him that promoting gambling is not a desirable objective nor something which the Government should engage in. Unfortunately, we are dealing with human nature. People, many of them, are inclined to take risks, and gambling is a manifestation of risk-taking. By and large, the majority of people engage in gambling as a form of recreation, small size gambling with $5 on a football match, a golf match, or a private bet on some other event, so that for us, as a Government, to say that there should be no gambling altogether is unrealistic. Of course, it can be done. But I doubt whether we could eliminate human nature. All you would do is in fact push it underground and, eventually, the only people who will profit are the illegal operators. He has asked what is our objective in legalising football betting.”
“The new section 4 provides for this requirement; c) Miscellaneous consequential amendments to sections 3 and 5 upon the introduction of the sports betting duty. Sir, I beg to move. Question proposed.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Introduction The Bill seeks to amend the Betting and Sweepstake Duties Act to introduce a sports betting duty on bets at fixed odds on football games or sporting events held inside or outside Singapore. Rationale Legalised football betting would be introduced for the first time on 31st March 1999 together with the 1999 S-League season. The objectives in legalising football betting are to provide a source of funds to support the development of S-League and local football and to promote sports in general and help stamp out illegal football betting. Based on the nature and market for football betting, I have decided on a betting duty of 20% of gross profits on football betting. The tax rate of 20% was decided taking into account the need of the legal operator to compete with illegal operators as well as to give adequate funding for S-League which is in its development phase. This rate would be reviewed after two years when the market for legal football betting is better established. Proposed Amendments The Bill makes the following amendments to the Betting and Sweepstake Duties Act: a) Introduction of a new section 2A relating to sports betting duty to put into legislative effect of the 20% tax on gross profits on football betting as well as any other sports events, where the bets received or negotiated are at fixed odds; b) Repeal of existing section 4 and substitution of a new section 4. Whilst the tax rate on other forms of betting such as horse racing, Toto, 4D and Singapore Sweep is based on gross bets, the tax rate on football betting is based on gross profits. Promoters of football betting are thus required to submit additional particulars such as the winnings paid.”
“Sir, I beg to move, "That the Bill be now read a Third time." Question put, and agreed to. Bill accordingly read a Third time and passed. BETTING AND SWEEPSTAKE DUTIES (AMENDMENT) BILL Order for Second Reading read.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The purpose of this Bill is to make final 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, 1998. The additional sum has been presented as Supplementary Estimates which have been considered and approved by the House as Command Paper No. 1 of 1999. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“Sir, I beg to move, "That the Bill be now read a Third time." Question put, and agreed to. Bill accordingly read a Third time and passed. SUPPLEMENTARY SUPPLY BILL Order for Second and Third Readings read.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." In accordance with Article 148(1) of the Constitution, heads of expenditure to be met from the Consolidated Fund and Development Fund, other than statutory expenditure, have to be included in a Bill to be known as the Supply Bill. The purpose of the Supply Bill before Members is therefore to give legislative approval for the appropriations from the Consolidated Fund and Development Fund to meet expenditures in the financial year 1st April, 1999 to 31st March, 2000. The heads of expenditure and the sums that may be incurred in respect of each head are shown in the schedule to the Bill. These have been approved by the House in the Main and Development Estimates of Expenditure for the financial year 1st April, 1999 to 31st March, 2000, and appear on pages 37 and 38 of Command Paper No. 2 of 1999. The Supply Bill, when approved, will empower me to issue warrants, authorising expenditure up to the amount for each head as shown in the Bill to be paid out from the Consolidated Fund and the Development Fund. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“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. SUPPLY BILL Order for Second and Third Readings read. 2.00 pm”
“One has to look at the overall effective tax burden on businesses, determine the competitiveness of our tax regime, rather than comparing a particular feature in a tax system with another. Compared to many countries, we have a simple tax system which is not onerous in compliance. Our income tax rates are low. We do not tax foreign source income until it is remitted. We do not have a capital gains tax such as in countries like the United Kingdom and the United States and we allow full imputation for corporate tax. This has made our effective corporate tax burden low compared to other countries. I want to stress that the Ministry of Finance and the IRAS review our tax structure regularly with the changing business environment and aims to achieve a tax regime that is conducive and friendly to business. This is our main aim and if Members have constructive ideas, these will be always welcome subject to the caveats I have stated earlier. Any changes we make are not done in isolation but always in consultation with our economic agencies and frequently with feedback from the private sector. Mr Singh also puts forward seven specific proposals in great detail. I am afraid that I do not have time to deal with these in full and I suggest that I give him a written reply so that he at least gets a proper response.”
“Instead of embarking on a comprehensive review of the Act, it is more prudent and practical to progress in stages to improve the Act and to introduce changes which are needed urgently, rather than try to do a comprehensive review all at once as this will take quite a long time. Otherwise, the total overhaul of the Act at this time will hold back other changes unnecessarily. Mr Inderjit Singh also raised questions with regard to changes in our tax laws. He said that our current tax laws are too restrictive and inflexible. Mr Heng Chiang Meng, in his Budget debate speech, also called for a full review of our tax system to ensure that it is totally business-friendly and supportive of the economy's broad goals. I can understand why Mr Inderjit Singh and Mr Heng are being deliberately provocative in making these appeals. Clearly, in these difficult times, they want as much help as possible for our companies, which I think is very laudable. But I hope that they will also understand that the Ministry of Finance, in responding to the needs of businesses, has also to cater to the needs of a wider constituency which is to safeguard the Government's fiscal position. To help businesses, we can cut taxes, increase rebates and relax our regulations. But there is a point beyond which we cannot go without fore-going too much revenue and allow too much tax leakage, leading to permanent budget deficits. Striking the correct balance is not an easy process but I believe that up to now, we have not done too bad a job. It is also important that we look at our tax system in totality when making comparisons with tax systems elsewhere.”
“For the time being, I would prefer to leave it be. Mrs Lim Hwee Hua has raised concern over the administration of GST, particularly in the cashflow problems faced by the smaller companies and she has asked that the Government could perhaps streamline these procedures to help them. I would like to say that the Government has already several schemes to help ease the cashflow burden of these businesses, including the SMEs, and these include the Major Exporters Scheme, the Bonded Warehouse Scheme and companies with MES status could have GST suspended on imports. In my FY99 Budget speech, I also announced two new schemes to help contract manufacturers and traders who are operating as logistics companies. I do not want to spend any more time on this issue because my time is limited. But if Mrs Lim is interested, I can provide her with more details. Mr Sin Boon Ann has raised questions on whether we should not be amending the Companies Act as a comprehensive overhaul of the Companies Act is long overdue. I agree with Mr Sin that the Companies Act has to be amended regularly to ensure that its ambit does not fall behind comparable jurisdictions elsewhere. In particular, it should be updated to ensure the provisions do not inhibit or place obstacles in the path of new economic activities. This is especially important at the present time when we are trying to restructure rapidly to a knowledge economy. Mr Sin has also suggested that we scrutinize changes made in other countries such as Australia. We will indeed be looking at all the new schemes which other jurisdictions have proposed to help smaller companies and we will incorporate whatever we consider appropriate.”
“As such, I do not see there is any compelling reason why Government should intervene and extend the LEFS scheme into the trading sector. But if he can put up a specific proposal, we would welcome it. Mr Inderjit Singh has also indicated that Hong Kong provides tax exemption for third country trade done outside the economy by a company in Hong Kong. I should point out that Hong Kong has a different tax rule from Singapore. Such income will be regarded as a foreign source income and therefore not taxed in Hong Kong. In the case of Singapore, such income would be taxed if it is carried out by a company in Singapore as this would be regarded as Singapore source income. However, to promote offshore trading, we have introduced tax incentive schemes such as Approved Oil Traders and Approved International Traders Schemes. Under these schemes, income from offshore trades carried out by approved traders are taxed at a concessionary rate of 10%. These schemes are open to all companies, whether local or foreign, as long as they meet the approval criteria. Mr Shriniwas Rai has asked for a review of the tax on the sale of property. Tax rules were changed in May 1996 as a measure to dampen property speculation. The key change was to impose capital gains tax on property sold within three years. At this point of time, we do not think it is necessary to remove this restriction because genuine home buyers should not be disturbed by this requirement. They ought not to be selling their property within three years. In any case, the tax is on a sliding scale. What we are concerned about is, if this measure is lifted now, and the property sector recovers, we will be faced with the same problem again and will have to re-introduce a new set of regulations.”
“However, agencies such as the Economic Development Board can leverage on the granting of tax incentives to get companies to upgrade their manpower capabilities and my Ministry is also always open to consider specific proposals to incentivise manpower development and upgrading and I would ask Mr Lim to let us have his specific views which we will consider. I can assure him that they will be well-received. But we need to know specifically what is needed, and in which directions should we give these incentives because it is obviously not possible to try and give broad incentives covering all sectors because that will be far too costly. As Mr Lim himself has said, there are already referral schemes by Government to facilitate and fund continuous learning, but more can be done if this is necessary. The Manpower 21 Committee is also looking into ways to promote lifelong learning and upgrading in our workforce. Mr Inderjit Singh has raised the issue of helping our local traders grow by providing trade financing. He is quite right in saying that small traders form an important part of our economy, and, therefore we should try and help them whenever we can, and many of these had been hit by the present downturn. However, he has suggested that Government should provide financing along the lines of the Local Enterprise Finance Scheme (LEFS) for trading activities. Alternatively, Government should arrange for local banks or international banks to provide low-cost loans for such purposes. I would like to say that the commercial market for trade financing in Singapore is already very well-developed and efficient, since trading has been a long established part of our economy and our entire banking infrastructure is geared up to service this sector.”