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SINGAPORE: According to Finance Minister Tharman Shanmugaratnam, the Government Land Sales policy has been a responsible one that is also market-led.
The minister made this comment in Parliament on Wednesday in response to questions raised during the Budget debate. He added that the government is doing the right things to sustain Singapore's competitiveness.
The Government Land Sales programme came under the spotlight in Parliament earlier this week.
MP of Ang Mo Kio GRC, Inderjit Singh, said the programme was responsible for pushing up property prices as the Reserve List system raised prices artificially.
In response, Mr Tharman argued that the system allowed market forces to play.
He said: "We ensure that enough supply is made available to meet basic demand through the Confirmed List, and let the market decide whether it wants to develop more sites through the Reserve List. No one anticipated the strong surge in demand for office space in the last two years, coming right after the 2002 to 2004 period, when the market conditions were very weak."
Mr Tharman noted that during the same period, some 120,000 sqm of office space were converted to other uses.
Rising office rentals are a concern, with some MPs asking for rebates to help businesses cope. But the minister said rental rebates will have an adverse effect.
"In an environment of strong demand for rental space, the outcome of government giving tax rebates on rental costs will be that prices are bid up further because this would merely stimulate demand for rental space without adding to the supply of space," he said.
Mr Tharman also added that there was no need to cut tax rates. He said the incentives offered this year to spur productivity and innovation will complement tax cuts announced previously.
These cuts include a reduction of Corporate Income Tax from 20 percent to 18 percent as well as improvements to Partial Tax Exemption for SMEs. Taken together, it will translate to S$160 million annual tax breaks for the SMEs.
The finance minister gave the assurance that Singapore will focus on providing a conducive tax environment for companies.
MPs have also asked in Parliament for more incentives to reward eco-friendly business practices.
To this, Mr Tharman said Singapore has managed to achieve good economic growth while maintaining a high quality environment, and further steps will be taken to promote energy efficiency.
These measures will be announced by the relevant ministries at the Committee of Supply debate.
On workforce training, Mr Tharman said current programmes are already heavily subsidised. But more studies will be done on the Individual Learning Accounts Scheme as suggested by MPs during the debate.
- CNA/so
Examples of fees that will be covered under the fee freeze:
1. Birth registration fee
2. Identity card registration fee
3. Examination fees (e.g. PSLE, 'O' level, 'N' level, 'A' level)
4. Joint admissions exercise fees
5. Highway code test fee
6. Driving test fee
7. Marriage certification fee
8. Cremation fee
9. Interment (burial) fee
10. Exhumation licence fee
11. Passport fee
12. Admission charges to public swimming pools
13. Refuse disposal fee
14. Dog licence fee
15. Water-borne fee
16. Foodstall licence fee
17. Hawker stall licence fee
18. Public entertainment licence fee
19. Video licence fee (e.g. censorship fee)
20. Film & publications licence fee
21. Arts licence fee
22. Trademark fee
23. Hotel licence fee
24. Fire certificate fee
25. Petroleum storage licence fee
26. Ambulance fee
27. Registration of society fee
28. Childcare licence fee
29. Shipping registration fee
30. Public Trustee fees
31. Bankruptcy fees
Get the Finance Minister's speech here
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