ECONOMIC ACTIVATION COMMITTEE (Contribution towards economy)

Mr Teong Eng Siong asked the Minister for Finance what the Economic Activation Committee has contributed towards the economy of the Republic since the formation of the Committee and to what extent it has assisted industries.

Mr Goh Chok Tong (for the Minister for Finance): Sir, the Economic Activation Committee (EAC) was formed in November 1974. In the industrial sector, the EAC improved inter-Ministry coordination in matters such as planning approval, compliance with fire safety, environmental, anti-pollution and other requirements to facilitate speedy implementation of industrial investment projects in the Economic Development Board (EDB) pipeline.

The EAC has also assisted industries by obtaining temporary exemption from the 10% tax on Public Utilities Board (PUB) bills for firms consuming between 100,000 to 400,000 megawatts of electricity monthly. This concession which is normally available to industries consuming more than 400,000 megawatts per month has been in effect since 1st April 1975. As at September 1977, 72 companies were enjoying this concession. In addition, more than 20 export oriented companies were granted waiver of the declared demand charge by the PUB between March 1975 to December 1976. The PUB has also adopted a scheme to spread out the payments for the maximum demand charge incurred during the first six months of operation of certain specialised energy-intensive industries such as foundries, electroplating and heat treatment plants.

To stimulate the construction sector, the EAC has drawn up priority lists of public sector projects for resettlement action in order that these projects could be speedily carried out. This has helped to maintain the momentum of public sector construction activity. To assist the private residential property sector, the Committee was instrumental in obtaining exemption from the Residential Property Act for foreigners purchasing apartments in blocks of flats of at least six storeys. This concession has also been extended to units in approved condominium developments. Furthermore, foreigners of economic benefit to Singapore are being liberally permitted to buy houses occupying up to 15,000 square feet of land for their own occupation in Singapore.

To intensify Singapore's export promotion efforts, the EAC encouraged the Monetary Authority of Singapore (MAS) to open a special rediscount window for export bills. This came into operation on 1st May 1975 to provide cheaper financing for manufacturers and traders. $200 million was provided by the MAS to be rolled over every three months (or $800 million a year) at a preferential rate fixed at 7% in May 1975 and subsequently reduced in line with the falling interest rates to the present level of 3 1/2% The monthly average transactions for the last six months of 1977 was $108 million as compared to a total of $50 million in the first six months of the scheme. A further stimulus to export promotion was given with the incorporation of the Export Credit Insurance Corporation which commenced operation in August 1976 to protect Singapore exporters against a range of commercial and political risks. By December 1977, 127 policies with a total face value of $375 million had been issued. All in all, the EAC has been active.

Dr Augustine H.H. Tan (Whampoa): Sir, does not the Senior Minister of State for Finance realise that by arranging for the PUB to grant tax exemption of usage of electricity by commercial firms, the Committee is encouraging the usage of energy in an era when everybody should be conscious of cutting down energy consumption?

Mr Goh Chok Tong: Sir, I was merely replying to a question of the EAC's activity.

Dr Augustine Tan: Sir, does the Senior Minister of State think that by that he has absolved himself from responsibility?

Mr Speaker: Order. We will go on to the next question. Mr Tan.