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SINGAPORE : Rising costs in Singapore took the spotlight in Parliament on Monday, at the start of the annual Budget debate.
Several MPs asked if more could be done to help businesses cope, from cutting corporate taxes and the foreign worker's levy to reviewing the government land sales programme.
The property bubble has contributed to the overheating economy.
According to Ang Mo Kio GRC MP Inderjit Singh, the government's move to lift anti-speculation measures has been detrimental to both Singapore and Singaporeans.
He also took a shot at the government's Land Sales Programme, saying that the Reserve List system has caused larger fluctuations in the market.
Mr Inderjit Singh said, "Without a reserve price, there may be times where land is sold cheaper than we would ideally like, but over the long term, the land sold for higher prices in good years could allow us to reach an acceptable level of income that we want from the land. It will make land release predictable and the market can then adjust.
"We can put in place disincentives for hoarding land which developers buy from the government. Very importantly, when the property market is weak, the government should not panic, (and) should instead go ahead and release the land anyway."
Under the Reserve List system, a reserve site will only be put up for tender if a developer puts in a minimum bid acceptable to the government.
A recent report has ranked Singapore as the 7th most expensive office location in the world, jumping 10 places within a year.
Some MPs expressed concern that this could hurt local businesses.
Jessica Tan, MP for East Coast GRC, said, "Office rentals have increased 56 percent in 2007, industrial rental by 30 percent, oil prices by 50 percent and commodity prices by 31 percent. A rental rebate or even a reduction of the workers' levy would provide some relief for businesses...considering that all SMEs form 99 percent of enterprises in Singapore and employ 62 percent of our workforce, any such benefit would have had a significant impact."
Some said that a cut in corporate taxes could help, while there was also a call for measures to defray rental costs.
Michael Palmer, MP for Pasir Ris-Punggol GRC, said, "In the implementation of any such tax relief, the government could consider giving different rates of relief depending on the type of industry and the location of the premises rented.
"For example, greater tax relief could be given to businesses that are willing to move non-core departments outside the business district. The relief need not be for the whole amount of rent paid - it could be capped."
Apart from concerns about rentals, MPs also rued the missed opportunity to offer incentives to promote eco-friendly business practices.
This could be in the form tax deduction for companies with an approved carbon offsetting programme, zero-rate GST or enhance capital allowances on energy saving devices used by companies. - CNA/ms
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