Mr Speaker sir,

I welcome the government’s proposal to exempt court-ordered maintenance payments to a woman from tax. I believe that this will go some way to relieving the burdens that single parents face in Singapore today.

However, I would like to query the Minister for extending tax relief for Research and Development expenditure to R&D incurred overseas. Would this not lead to an exodus of R&D activities and investments away from Singapore? I also wonder how the Minister hopes to ensure that R&D activities valuable to Singapore is indeed being carried out once it is moved overseas, and that this relief is not used merely as a mechanism to evade tax?

A landmark study by Ho Yuen Ping, Wong Poh Nam and Toh Mun Heng of NUS1 in 2009 found that the impact of R&D on growth in Singapore is not as strong as in other developed countries. In fact, to catch up with other developed countries, the study recommended that Singapore needs (quote) ‘more effective exploitation of domestic R&D activity’ (unquote).

Instead the government must think of ways to make it really attractive for these companies to consider putting their R&D investments in Singapore. Put simply – create more incentives locally, and create disincentives for doing it overseas.

Furthermore, on the subject of tax relief – since this is part of the Economic Expansion Incentives Act being amended here –there are many ways in which the Government can be creative in addressing several problems at one go. For instance, would the Government consider giving tax relief to companies that hire disabled people? Or tax relief for the purchase of gym or exercise equipment in order to promote a healthy lifestyle for Singaporeans, or for occupational health support, especially when prescribed by a doctor?

I question the preferential tax rate for Singapore government securities and ask how this benefits common Singaporeans since most retail investors do not trade in these securities.

On the many clauses where the Minister has discretion on a case-by-case basis, may I ask whether the Minister compiles an annual report to Parliament on all cases whether discretion has been exercised and the reasons for rejecting or approving an application?

Mr Speaker, the Gini coefficient is rising around the developed world, and Singapore is not spared. The rich are getting richer; the middle income earners and the poor getting poorer. We should rethink income tax policy for the highest earners, for the top 5 per cent. It should be compulsory for foreign earners in Singapore to pay capital gains tax.

The British prime minister has been seriously considering raising taxes on the rich income earners to ensure better social equity. May I remind this House that the current British Government is a Conservative-led government, and not a Labour or socialist government. A few months ago, the billionaires in Europe even told their governments: ‘tax us more, we want to help Europe get out of the financial crisis’.

Let us not wait for an economic crisis to hit Singapore before we take action.

In so proposing, Mr Speaker, the Singapore People’s Party is not pandering to populism. We simply believe in making things as fair and equitable as possible, to reward Singaporeans for their hard work, for the greater good and stability of society in the long term.

1 Yuen Ping Ho & Poh Kam Wong & Mun Heng Toh, 2009. “The Impact Of R&D On The Singapore Economy: An Empirical Evaluation,” The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 54(01), pages 1-20.7