Rising business costs continued to take the spotlight on the second day of the annual budget debate in Parliament.
According to MPs who addressed the House, there were concerns among local businesses that the outlook will worsen, in light of the sub-prime mortgage crisis and a looming recession in the US. MPs said Singapore will stand to lose if big global names choose to relocate elsewhere.
Rising rentals were one major concern and MPs asked if the government would allow a short-term double deduction on rental expenses which translates to about 18 per cent in cost savings.
Amid the current global credit crunch, there was a call on the Finance Ministry to review its policy encouraging statutory boards and government agencies to borrow in the private sector.
Nominated MP, Dr Loo Choon Yong, said: “Under current market conditions, lenders would understandably choose to park their funds with that instruments issued by these board and agencies, fully backed by the government of Singapore.
“This may soak up whatever little liquidity that is available. I understand HDB is now in the market looking to borrow US$500 million, and LTA and JTC may well follow suit.
“I suggest MOF makes available trenches of government fund for competitive tender by all statutory boards and government agencies needing to borrow."
For some other MPs, they were eyeing new initiatives to spur the sustainable energy sector.
Nominated MP, Edwin Khew, said: “To develop Singapore as an ‘eco-hub’ we must promote and establish an environment for alternative energy, energy efficiency and other green businesses and initiatives to flourish.”
Abu Dhabi is prepared to spend US$15 billion and have set a benchmark. What are we prepared to spend?”
And there was also a call on the government to release more regular financial results, including the key performance indicators of each ministry.
MP for Jalan Besar GRC Denis Phua said this will help to improve the accuracy in forecasting.
She said: "Where necessary, issue surplus or deficit warnings so that Singaporeans understand better the contexts for major national policies and are less surprised at the end of the financial year.
“It also reduces the hype of the annual budget time and minimizes any unrealistic 'goodie bag' expectations," she added.
Ms Phua added that good forecasting should also be extended to non-financial impact of a ministry's policies on another.
For example, she said that the Youth Olympic Games 2010 in Singapore will possibly heat up the economy further. And this ought to be considered in the fiscal plan.
Another consideration was to make the income-tax rebate a continual feature of the annual budget.
MP for Ang Mo Kio GRC, Lee Bee Wah, said: “This can in turn help to stimulate the economy further. Lower income tax rates will also attract individuals to work here, rather than in other places like Hong Kong, where the top marginal personal tax rate is 15 per cent, compared to ours at 20 per cent."
MPs also called on the government to stop the brain drain. Tampines GRC MP, Mr Ong Kian Min said Singapore must not become the training centre of the world, where workers leave for greener pastures after they are being trained here.
One way is for Singapore to encourage innovation and work towards being a first-class economy. -CNA/vm
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