(Delivered in Parliament on 26 February 2019)
Budget Speech 2019
Mr Speaker, in these uncertain times, we need to build resilience in many ways. Does the Budget this year help to build that resiliency? I would like to touch on a few points in the Budget where it seems our resilience is being tested as we speak.
Increase in diesel tax
Mr Speaker, environmental resiliency is a big concern in a world where climate change is increasing front and centre of policy agendas everywhere. We see elements of this in Budget 2019 where Minister Heng Swee Keat announced that the excise duty on diesel fuel has been increased from $0.10 to $0.20 per litre with immediate effect. While there were positive results, my concerns have remained unchanged from 2017 when the diesel excise tax was introduced. Indeed, my concern is that while we care about environmental resiliency, we may be doing this at the expense of economic resiliency.
Diesel is the common fuel for most taxis, public and private buses, delivery vans, pick-ups, lorries and many other different type of heavy vehicles. The announced road tax rebates for commercial diesel vehicles are not going to completely offset the excise tax payable according to usage. Taxi drivers are already complaining about this.
Moreover such rebates are really short term measures and ultimately operators and owners will face the full effect of the price increase for their businesses. They will have to pass the increases to their customers downstream sooner or later.
In short, this diesel tax increase will mean an increase in transportation expenses, which will translate to higher costs for all kinds of businesses in Singapore requiring directly or indirectly transportation.
Until all public buses are converted to electric ones, diesel tax increase will increase the operating costs of our Public Transport Operators. Is this really necessary? Will that lead to fare increase again at some point?
Why penalise taxi drivers who do not own the taxis they drive? How soon can the taxi fleet be converted to hybrids or even to the use of fully electric cars for taxis?
While environmental concerns are understandable, and while the minister can talk about some car owners and taxi companies switching to hybrids, the vast majority of existing vehicles using diesel have no other options for an immediate switch at the moment. If the message that the Government wants to send is that diesel is bad for our environment, what are the hybrid or fully electric options that the Government is providing at this moment for users to switch to non-diesel vehicles, especially beyond cars and taxis? If electric or hybrid options are not realistically available en masse now, the tax will just perpetuate the continuing operation of diesel vehicles with the owners paying more into the state coffers. And that doesn’t really help the environment either.
The increase in diesel tax will only increase the cost for businesses especially our SMEs, in an economic climate that is not rosy at all. Whether we are talking about commuters taking public buses, workers or students taking chartered buses to work or school, delivery vehicles sending goods and food, etc, ultimately, the diesel tax raise will just increase our cost of living, diminishing our economic resiliency at a time where we may ill-afford to.
Our Air Hub and our aerospace industry
Another part where our resiliency is being tested is in our aerospace industry. In his Budget speech last week, Minister Heng mentioned that for the development of Changi East, where the new Terminal 5 will be built, the Changi Airport Group will be taking loans to fund its share of the infrastructure and the Government will provide a guarantee for the Changi East borrowings in order to reduce the cost of borrowing.
In last year’s Ministry of Transport’s Committee of Supply speech, the then Second Minister for Transport Ng Chee Meng shared with this House exciting plans for the proposed building of Changi Airport Terminal 5 and the development of Changi East. The minister spoke of it being, I quote, “a bold move to cement Changi Airport’s position as a premier air hub for the future”, “and that it is critical our aviation sector can continue to grow and support the growing needs of our economy”.
We are told that the scale and complexity of the project is unprecedented: new runways, new terminals, network of tunnels and system, in short, “a game changer” and “a mega terminal with satellite terminals”. The Government even decided that it would foot the majority of the costs of building which will be expected to cost tens of billions of dollars. As of last year, $9 billion has been spent.
I cannot agree more that these are exciting developments for our Changi airport, for Singapore as an international as well as regional air hub, and with good prospects. However, I am concerned whether recent announcements from Malaysia will affect our plans and more importantly the future of our air hub.
On 4th December 2018, Malaysia announced its intentions to take back its delegated airspace in southern Johor. This means that it will take back its air traffic control service arrangements over Southern Johor. Currently, Singapore has been providing air traffic control services over Southern Johor through the Operational Letter of Agreement Between Kuala Lumpur And Singapore Area Control Centers Concerning Singapore Arrivals, Departures And Overflight since 1974.
Over our southern border, there has also been media reports of Indonesia demanding to take back its delegated airspace over the Riau Islands Flight Information Region.
I am certainly concerned with the possible effects of our neighbours taking back their delegated airspaces on:
(1) Singapore as a major air hub;
(2) Singapore’s aerospace industry; and,
(3) the development and future viability of Changi T5 and Changi East.
Are our aerospace ambitions sufficiently resilient against such uncertainties and potential shocks?
Our port and maritime sectors
The tests of resilience also extend to our port and maritime sectors. Minister Heng mentioned in his speech that the British decision to declare Singapore a free port plugged us into an emerging network of global trade. Indeed, this is also the Bicentennial of the modern port of Singapore. In this Bicentennial year, it is noteworthy that over the last 200 years, as different businesses and industries rise and fall, our port has remained one constant key to Singapore’s survival and prosperity. It has in fact grown from strength to strength, thanks to our strategic location and to those who have worked hard over 200 years to keep Singapore port in its position today.
Last year, in my budget debate speech, I spoke of the challenges to our port and asked how long we can continue to enjoy this advantage. I mentioned of challenges from the Arctic or Northern Sea Route and the Malacca port. There are other challenges too. At the Ministry of Transport’s Committee of Supply debate last year, the long talked about possibility of a canal across the Kra Isthmus in Thailand was brought up briefly. Indeed this will be another threat too. In face of changing leadership in Thailand and the new Asian political landscape, it is uncertain whether the long talked about project can be resisted indefinitely. Besides monitoring developments, are we doing any forward scenario planning and how are going to deal with such possibility?
In November last year, Malaysia unilaterally attempted to draw a new port limit boundary off Tuas, encroaching on the waters which have long been under the jurisdiction and control of Singapore. The stand-off has continued since November 2018 and the Malaysian government vessels have remained in our port waters since. We have not attempted to dislodge them.
There was even a collision in those waters between a Malaysian government vessel and a tanker, bringing with it awkward issues of jurisdiction exercised by both port authorities for the investigation of liability.
Our port waters, being filled with so many visiting and passing vessels, are already bursting in its seams and being sandwiched between the Malaysian and Indonesian waters. I am concerned how the latest developments may affect our port or ancillary maritime businesses, whether in the short or longer run, if this is not managed and resolved appropriately by our Government in our negotiations with Malaysia.
In January this year, Mr. Andreas Sohmen-Pao, Chairman, Singapore Maritime Foundation, said at the Singapore Maritime Foundation New Year Cocktail Reception that (I quote) “just as shipping fundamentals are starting to look a little better, we see new issues around geopolitics, trade policies, energy and equity market volatility which have us wondering whether the long-awaited improvements will materialise after all.” (unquote)
In my Budget debate speech last year, I said that while I support the push for digitalisation and innovation under the Sea Transport Industry Transformation Map, we must not forget those who may not be able to benefit from this development. Similarly, I said that how many of our SMEs are in a position to compete in the LNG and offshore renewables identified in the industry transformation road map for marine and offshore engineering. Besides these areas, what are the future options they should be prepared for? In these still difficult market conditions, how are our industry transformation road maps helping our maritime SMEs beyond the categories which have already been talked about? I hope we can receive an update on this either here or at the COS debate later.
Keeping Singapore safe and secure
There is a saying in Mandarin, ‘有国才有家。’Overcoming tests of economic resiliency may not ultimately help our citizenry if there is no country to begin with. This underlines the importance of our security resiliency.
Minister Heng stressed in his speech the importance of keeping safe and secure and justifying that our spending is significant but indispensable. He mentioned that a strong SAF remains a bulwark against threats to our way of life.
While our spending on SAF’s military equipment and hardware may be important to keep our potential adversaries at bay, our SAF, though led at the highest levels by full time regulars, is largely a conscript force. While equipment, hardware and spending may be important, for SAF to succeed in its defence objectives, the buy-in from our NSFs and NSmen is absolutely critical.
The minister has said that national service has forged a deep understanding in our people that each and every one of us has the duty to defend our nation. This ought to be the case but it is something we can ill afford to assume or take for granted. It is something we must always continue to strive to achieve and maintain. In my view, it is a constant work in progress.
If we expect our NSFs and NSmen to take their NS training and call-ups seriously and do their utmost, they will need to be convinced that the training they do is necessary and both SAF as well as their commanders, especially senior commanders, not just their NSmen commanders, must be able to command their confidence in this respect. Equally, our NSFs and NSmen and indeed their families too must have absolute confidence in both SAF and their commanders taking responsibility for their men’s welfare and training safety, while balancing the equally important objective of operational readiness. This buy-in may be easier said than done and we need to enhance our current efforts.
As we are at our Bicentennial, I look to our forefathers over the 200 years, who have displayed tremendous resilience to recover from adversity and build Singapore to what it is today. The hope is that we can continue to ace the tests of resiliency that come our way as a people.
Mr Speaker, may I end my speech in Mandarin:
（1）为所有年满60岁的新加波人 自动登记 社保援助计划 CHAS和 提供门诊(zhen3)补贴，弥(mi2)补我们全民 医疗保健 系统中 的缺口;
（2）取消退休年龄，将 再就业 年龄 提高到70岁，恢复 年长员工 的公积金 缴(jiao3)交额，好让我们的年长者可以按照自己的能力和 意愿 继续工作；
（3）将公积金 转变 成为 年长者的安全网，把 可每月领取公积金 入息 的年龄 降低到60岁。如果有一段时间无法工作，可以允许提取部分公积金;
（4）通过向立国一代 国人 推广屋契 回购 计划, 鼓励国人在年老时保持自立;
（5）通过增加 年长女性 的 保健 储蓄 填补 和鼓励她们 加入终身护保 计划来缩小 年长女性 在公积金额 和其他储蓄方面 和男性的差距。