ECONOMIC EXPANSION INCENTIVES (RELIEF FROM INCOME TAX) (AMENDMENT) BILL

Order for Second Reading read. 7.37 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The upgrading of the construction industry is one of the tasks that we have set ourselves in this decade. The industry relies heavily on labour and lags seriously behind the other sectors of the economy in mechanizing its operations. Considering the slow growth in indigenous labour supply and our policy to reduce reliance on unskilled foreign labour, the industry must move quickly towards mechanized methods of construction, if we are to keep down the costs of public housing and other construction work. To accelerate the pace of mechanization in the industry, an investment allowance incentive scheme for construction companies was introduced in the 1982 Budget Statement. Under the scheme, capital expenditure incurred by construction companies with more than 50% local share ownership may qualify for investment allowances of up to 50% of the expenditure incurred.

The present Bill seeks to give effect to this investment allowance incentive for the construction industry. The Bill amends Part VIA of the Economic Expansion Incentives (Relief from Income Tax) Act, specifically sections 46A, 46B and 46C. In the present Act, an investment allowance is granted only to companies which carry out projects for the manufacture or increased manufacture of any product; or for the provision of specialized engineering or technical services, or for research and development. The present Bill will extend the scope of the investment allowance incentive scheme to companies carrying out projects for construction operations.

The opportunity is also taken in the Bill to make slight consequential amendments to the principal Act in conjunction with the amendments to be made to section 19A of the Income Tax Act. The latter amendments are to give effect to the accelerated depreciation allowance scheme for capital expenditure on computer and approved energy-saving machinery and equipment incurred by non-industrial enterprises. These were incentives presented in previous Budget Statements.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Hon Sui Sen].

Bill considered in committee; reported without amendment; read a Third time and passed.