RENTAL REBATES

RENTAL REBATES

20.

Mr Ang Mong Seng asked the Prime Minister and Minister for Finance, in view of the current weakness in the retail business sector, whether the Government will consider extending the rental rebates for JTC factories, HDB shops and the Ministry of the Environment and Water Resources hawker stalls beyond the end of this year.

Mr Lee Hsien Loong: The rental rebates are temporary relief measures to help affected businesses tide over an economic downturn. The rental rebates were introduced as part of the off-budget measures in June 1998 when GDP growth was expected to be 0.5%-1.5%. The rental rebates have been extended several times as economic recovery had not been very strong, with GDP growing by 2.2% in 2002 and 1.1% in 2003. When the rebates were last due for expiry in June 2004, the economy was already turning around. However, as the recovery may not have filtered down to all sectors, the Government decided to extend the rebates for another 6 months, from 1st July 2004 to 31st December 2004 . The economy this year is likely to grow 8%-9%.

As temporary relief measures to tide over the economic downturn, the rental rebates should not unwittingly lead to a situation where businesses become reliant on Government's assistance, particularly with economic recovery underway. However, the relevant Government agencies will, like all landlords do, review their rental rates for market benchmarking. This review will be an important factor on the decision as to whether to extend the rental rebates, which is to be taken at the end of November 2004.

Column: 1139