By MP for Aljunied GRC, Pritam Singh
[Delivered in Parliament on 11 Nov 2013]
Mr Deputy Speaker, my speech on the subject of this amendment Bill covers the new section 6B – which creates a presumption that a person in charge of a motor vehicle driven past the Customs checkpoint with a tampered fuel gauge, knowingly does so and is liable to be guilty of an offence. The presumption is rebuttable of course, for example if it can be proven that the vehicle is shared or driven by a number of people and an accused person is unaware of the fact that the fuel gauge has been tampered with.
However, this new section will appear in our Road Traffic Act after parliament approves it, as a result of another law, namely section 136 of the Customs Act, that has been in place for more than 20 years now – the ¾ fuel tank rule for Singaporeans cars which cross Singapore Customs before entry into Malaysia. Madam, I do not oppose the amendment Bill, but I do ask that the government conduct a review of the continued relevance and rationale of the ¾ tank rule.
When the then Finance Minister Richard Hu introduced the ½ tank rule in 1989, the rationale, in his words (I quote) was to ensure that the use of petrol pricing to control the usage of roads in Singapore was not bypassed (unquote) because of cheaper petrol in Malaysia. The move was also the staunch the loss of duty on petrol, estimated at $2m dollars a month. The same rule was amended two years later when the ½ tank rule was raised to became the ¾ tank rule.
Sir, measures to control the usage of roads in Singapore have seen many changes since 1989. In fact, today, the common man does not think of the petrol tax as an inhibitor before buying a car. Instead, it is the two abbreviations – COE and ERP that are seen to be the primary instruments curbing road usage. These have little, if any, correlation to the rules that determine the entry of Singapore cars into Johor. At the recent 6 Nov exercise, the price of an open category COE was $89,001 and since August this year, Singaporeans have had to pay $6 at three ERP gantries, a number which has since jumped to seven after the levy was raised to $6 at four more gantries this month.
Sir, like the ¾ tank rule today, the new section 6B of this Bill, must be seen through the lenses of 2013, not 1989. Many things have changed since then.
Firstly, there has been a steady political and economic shift in Singapore’s relationship with Malaysia. Only 11 months ago, in December 2012, the Singapore Economic Development Board was actively encouraging MNCs to actively invest in the Iskandar region in Johor, with the Straits Times reporting that this new approach was because of rising land and labour costs in Singapore. To mitigate this, the EDB saw MNCs siting their higher-value and more skilled operations as well as headquarters in Singapore, while their factories operate in the neighbouring countries, where land and labour are relatively abundant.
While the EDB’s statement covered MNCs specifically, about a week earlier, Finance Minister Tharman Shanmugaratnam was quoted as saying (I quote) there’ll be over time also be increasing pressures on our SMEs, because of the shortage of labour in Singapore as well as land….Malaysia is a logical hop away, easy in terms of operational flexibility and logistics (unquote).
Sir, some of our SMEs would receive a shot in the arm if the rationale of the ¾ tank rule was reviewed or perhaps even reduced to the ½ tank level, so as to encourage our businessmen to take further advantage of the cost benefits that can be reaped in Johor, but not in Singapore. Allowing our SMEs access to the market in Johor by removing rules that impede free enterprise would also go some way to encourage greater entrepreneurship amongst younger Singaporeans in particular.
Secondly Sir, Malaysian policy has also changed since Singapore introduced the ¾ tank rule. Singaporeans now do not have access to subsidized Malaysian petrol and can only buy 97-octane fuel or higher, which is not subsidized by the Malaysian government, a law which was passed three years ago.
Thirdly Sir, a review of the ¾ tank rule will be in concert with the goals and objectives of the ASEAN Economic Community’s 2015 goal of (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development, and (d) a region fully integrated into the global economy. Singapore as one of the most-open economies in the world opens it doors to foreigners and businesses and we are known to be one of the easiest places to do business. Singaporean enterprises and Singaporean businesses would greatly benefit if the protectionism manifested by the ¾ tank rule is lifted and Singaporean businesses looking to venture north are not hamstrung by government policy. A change of the ¾ tank rule would benefit our local SMEs and MNCs and contribute to their entreprise ambitions, no different from the ambitions of hundreds of thousands of Malaysians who come to Singapore to work and for business daily, riding on our comparative advantage.
In conclusion, greater to people-to-people interaction between Singaporeans and Malaysians can also assist in contributing positively to the Malaysia-Singapore relationship, one which has already premonitioned the construction of a third causeway, a high-speed express link between the two countries and the decision earlier this year between both countries to go ahead to link Johor Bahru and Singapore by a rapid transit system with the Woodlands MRT station to serve as an interchange station. Singapore businesses should not be denied of the economic opportunities unfolding in Johor by the ¾ tank rule that contributes to disadvantage Singaporean SMEs.
Sir, my request for the government to review the rationale of the ¾ tank rule notwithstanding, I support the Bill.