WATER AND ELECTRICITY CONSERVATION (Incentives)

Mr Simon S C Tay asked the Minister for Trade and Industry whether additional tax or other incentives can be offered to improve water and electricity conservation, especially by industries.

Mr Lee Yock Suan: Mr Speaker, Sir, currently, there are three incentive schemes which companies can make use of to help them implement water conservation measures.

The Investment Allowance Scheme offers companies an investment allowance of up to 50% of their fixed capital expenditure for water conservation and recycling. The Resource Productivity Scheme provides financing to companies for automation and resource-saving equipment. The Resource Productivity Feasibility Scheme provides a grant of up to 50% of the qualifying cost of engaging external consultants to conduct resource productivity feasibility studies.

There are also several existing incentive schemes which encourage the adoption of energy-efficient technologies and equipment, including the Investment Allowance Scheme, the Local Enterprise Technical Assistance Scheme (LETAS), and the accelerated depreciation scheme. The LETAS can be used by local enterprises to engage external expertise to modernise and upgrade their operations, including making them more energy-efficient. The accelerated depreciation scheme has been revised recently to allow companies to depreciate their energy-saving equipment in one year instead of three years.

Besides these tax and financial incentives, companies that want to improve their water and energy efficiencies can approach the Public Utilities Board for water and energy audits. An Inter-Agency Committee on Energy Conservation chaired by the Ministry of National Development has also been set up to co-ordinate the efforts of the various agencies involved in setting energy conservation policies and to further improve energy conservation in Singapore.

Mr Simon Tay: Sir, the incentives relate largely to consultancy fees and incentives such as tax depreciation. Will the Government consider rebates for those with infrastructure needs for greater efficiency?

Mr Lee Yock Suan: I am not clear what the Member means by rebates. If he has some good ideas, he can suggest to me and we will look into them.

Mr Simon Tay: By rebates, I mean basically actual cash outputtings rather than simple depreciation which in times of present economic downturn may not mean very much to companies which may be making little or no profits. So that is the basic idea of rebates. But more generally, will the Government consider setting efficiency targets in the areas of both energy and conservation, just as we set economic targets of growth?

Mr Lee Yock Suan: Yes, this is something we can do.