INVESTMENT ALLOWANCE SCHEME (Extension to hiring of equipment and machinery)

Dr Teo Ho Pin asked the Minister for National Development whether his Ministry will consider extending the Investment Allowance Scheme to locally-owned construction firms which hire equipment and machinery (as approved by the Construction Industry Development Board) so as to encourage higher level of mechanisation in the construction industry.

The Parliamentary Secretary to the Minister for National Development (Mr Koo Tsai Kee) (for the Minister for National Development): Sir, the objective of the Investment Allowance Scheme is to encourage contractors to achieve a higher level of mechanisation and productivity by investing in machinery and equipment.

Hiring is not the same as investing. Extending the scheme to hiring of equipment and machinery will only help contractors to reduce their immediate cost of operations. For the good of the industry, contractors should be forward looking and plan for the long term through long-term investments in machinery and equipment. Therefore, my Ministry does not see the need to extend the Investment Allowance Scheme to the hiring of equipment and machinery.