Research, innovation vital for Singapore to stay ahead

Research, innovation vital for Singapore to stay ahead 

Research and development was given a shot in the arm yesterday when Finance Minister Tharman Shanmugaratnam unveiled a host of incentives for corporations, research institutions and the public sector to spur the growth of innovation in Singapore

By Jessica Cheam 
SOME OPTIMISM: While Mr Khew says he is disappointed with the lack of measures to help companies handle rising costs, he notes that the R&D incentives will help to some extent. — ST PHOTO: DESMOND LIM
 
INNOVATION is key to getting a competitive edge, and to spur the growth of research and development (R&D) in Singapore, a slew of incentives were unveiled in yesterday’s Budget to ‘make innovation pervasive’ in Singapore’s economy.
Unveiling his first Budget as Finance Minister, Mr Tharman Shanmugaratnam said the Government is ’stepping up our focus on R&D and innovation on all fronts’ in order to create a ‘top-quality economy’.

While last year’s Budget made Singapore a haven for small and medium-sized enterprises (SMEs), this year’s Budget focuses on making Singapore ‘one of the most competitive places for companies, big and small, to do R&D’, he said.

The bag of carrots dangled in front of companies includes an increase in R&D tax deduction from 100 per cent to 150 per cent.

This means that for every $100,000 of local R&D spending, a company can deduct $150,000 from its taxable income.

Previously, R&D activities unrelated to the company’s business do not qualify for deduction, but this requirement has now been scrapped, which means, any local R&D activity a company pursues can qualify.

R&D PUSH
Making Singapore one of the most competitive places for companies, big and small, to do R&D is among the aims of this year’s Budget, says
Mr Tharman.

Secondly, companies will now be given an R&D tax allowance, up to 50 per cent of the first $300,000 of taxable income.

This allowance can be used by companies to defray incremental spending on R&D by companies in subsequent years, said Mr Tharman.

‘This will provide additional resources for SMEs to invest in innovation, whatever their field of business,’ he said. It is extra funds lost if not used for R&D, he added.

Lastly, a new incentive, R&D Incentive For Start-Up Enterprises, for high-tech start- ups was introduced to allow such companies to convert some of its losses into cash grants.

If they spend at least $150,000 on local R&D, they can convert up to $225,000 of losses into a 9 per cent cash grant, or $20,250.

Start-ups qualify for this in the first three years of tax assessment.

The three schemes last until 2013, and will cost $250 million a year.

Mr Lawrence Leow, president of the Association of Small and Medium Enterprises, said he particularly liked this aspect of the Budget, as many SMEs ‘do not necessarily engage in R&D, although they recognise that innovation will help them raise their competitiveness’.

Mr Edwin Khew, president of the Singapore Manufacturers’ Federation, however, expressed disappointment at the lack of measures to help companies cope with rising business costs such as higher rentals and material costs.

But as chief executive of waste recycling start-up IUT Global, he said the new incentives will help to some extent and encourage further R&D efforts.

Sales director Lee Kum Leong of local start-up Synadd, a fuels additive specialist, said the cash grant of about $20,000 was on the low side for entrepreneurs forking out $150,000 for R&D.

What was noticeably lacking in the Budget was incentives to help companies become more environmentally sustainable.

Mr Khew said that as a Nominated Member of Parliament, he will be raising this issue in the Budget debate.

Mr Tharman stressed yesterday that innovation was crucial to Singapore’s strategy of keeping the economy competitive.

‘This is the best offset to global inflation,’ he said.
What’s in their hongbao
FOR businesses, three incentives were introduced:

1. The tax deduction for local research and development (R&D) spending was raised from 100 per cent to 150 per cent of the sum spent.

2. Companies will be given an R&D tax allowance of up to 50 per cent of the first $300,000 of their taxable income. This will offset R&D spending over subsequent years.

3. Rise - or R&D Incentive for Start-Up Enterprises - is a new scheme that allows high-tech start-ups to convert their losses into a cash grant of up to $20,000, if they spend $150,000 on local R&D.

Mr Edwin Khew, chief executive of local waste recycling company IUT Global, said the company, incorporated three years ago, spent more than $150,000 on R&D in Singapore last year.

That qualifies him for Rise. He will receive a $20,250 payout for converting IUT’s losses of up to $225,000.
For research institutions:

1. The National Research Fund will get an $800 million infusion. Overall research spending will reach $7.5 billion a year by 2010.

2. The Government is pushing for the incubation of ideas and will help local research institutions spin off companies.

For Dr Yeo Yee Chia, an assistant professor at the National University of Singapore’s electrical and computer engineering department, this means a larger pool of funding that she can tap. Funding granted by local research and academic institutions vary, depending on the type of proposals submitted.
Source : Straits Times - 16 Feb 2008

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New home sales remain low with cautious Singapore property market

New home sales remain low with cautious Singapore property market 

Developers launching fewer units as fears over US slowdown, stock volatility linger
By Joyce Teo, Property Correspondent 
BRIGHT SPOT: Sales at Waterfront Waves in Bedok Reservoir Road, seen here being previewed by interested buyers, have been favourable. — ST FILE PHOTO
 
CAUTION remains the watchword in the property market, with buyers still kept on the sidelines by concerns over the United States economy and choppy stock markets.
Developers sold just 316 new homes last month - a tad up on the 305 sold in December - and launched only 410 units, compared with December’s 445.

Prices also reflected the uncertain mood and remained largely flat, with overall median prices showing a slight dip.

The removal of the deferred payment scheme has brought transactions to a more sustainable level, according to property services firm Jones Lang LaSalle.

There were some bright spots. Wilkie 80 in Wilkie Road was sold out, while Waterfront Waves in Bedok Reservoir Road reported favourable sales. They made up 41 per cent of all new units sold last month, according to the sales figures out yesterday.

The pinch was felt most in the high-end sector, with few homes sold and none above $4,000 per sq ft (psf). This is a sign that the high-end segment may be experiencing a ‘challenging period’, said Knight Frank director of research and consultancy Nicholas Mak.
The new figures, which came from developers but were released by the Urban Redevelopment Authority, show that some of the heat may have come out of the market.

Median prices for new private homes, excluding executive condos and landed homes, fell 3.2 per cent from $1,124 psf in December to $1,088 psf last month.

The lowest transacted price was $737 psf for a unit at Coastal View Residences in Jalan Loyang Besar, while Scotts Square in Scotts Road achieved the highest at $3,671.

Projects outside the central region performed best. There were more sales, and the 220 units launched marked the highest since last August.

Buyers at the leasehold Waterfront Waves picked up 79 units and pushed prices up to $909 psf.

In the mid-end segment, Wilkie 80 was sold out at a median price of $1,544 psf. Zenith in Zion Road, launched in December, sold 22 units, while 12 out of 50 units at Mount Sophia Suites went for a median price of $1,719 psf. At the landed project Pavilion Park, 24 terrace houses sold at between $1.8 million and $2 million.

Consultants project lower sales this month, as the Chinese New Year festival will deter buyers from venturing into the market.

‘However, developers are likely to maintain prices at current levels as they monitor the market situation,’ said Mr Li Hiaw Ho, the executive director of CBRE Research.

Mr Mak expects sales volume for the first quarter to remain thin due to uncertainties over the US economy and stock market turbulence. More developers are delaying or reviewing launches, particularly high-end ones.

‘The challenging period experienced in the high-end segment is expected to continue, but the fall in the volume could be compensated by the steady volume in the other segments,’ he added.

Colliers International director for research and consultancy Tay Huey Ying said: ‘We see the mass and mid-end segments supported by en bloc sellers looking for replacement homes.’

Developers could end up launching and selling up to 9,000 new private homes this year, compared with 14,811 last year, she said.
Source : Straits Times - 16 Feb 2008

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Parkway top bidder for Singapore Novena hospital site

Parkway top bidder for Singapore Novena hospital site 

By Jessica Jaganathan 

THE Novena medical hub is taking shape, with the Parkway group emerging yesterday as the top bidder for a 1.7 ha site on Irrawaddy Road to build a new private hospital.
The $1.2 billion bid by its wholly-owned subsidiaries Parkway Novena and Parkway Irrawaddy, was nearly five times that of Raffles Medical’s and more than double the offer from Napier Medical, run by former Parkway Holdings boss Tony Tan and the founder of Penang’s Island Hospital Mark Wee Keng Hong.

At close to $1,600 per sq ft per plot ratio, it is potentially the most expensive commercial land sale in recent years, said Knight Frank’s director of research and consultancy Nicholas Mak.

Parkway said the bid price reflects its plans to build a hospital of the future using eco-friendly technologies.

Alongside the wards, medical facilities and suites for specialists’ outpatient care in cancer, cardiac and orthopaedic services, there will be retail and public spaces as well, including aerial gardens.

The Urban Redevelopment Authority tender closed yesterday and it usually takes under a week for the results to be released, which is when Parkway will reveal more details about the project.

The sale of the site, the first private hospital since Raffles Hospital was built in 2001, is part of a plan to beef up medical infrastructure here to attract one million foreign patients a year by 2012.

Anchor tenants in the Novena neighbourhood are Tan Tock Seng Hospital and several other public institutions.

Private institutions like Johns Hopkins International Medical Centre and newly launched Novena Medical Centre complete the family of about 10 health-care providers in the area.

Coming up alongside the new hospital is a Far East Organization hotel, Frasers Centrepoint’s Soleil condominium and SC Global Developments’ Newton 200 office building, all eyeing ‘medical’ guests and tenants.

Far East, which owns Novena Medical Centre, is building the 28-storey hotel next to Novena Square. To be completed by 2010, the hotel will have 432 rooms and 64 medical suites, said the group’s executive director of property services, Mr G.L. Yap.

A proposed underpass will connect the hotel with the medical centre. ‘We are even willing to build a bridge linking the new hospital if they want to,’ said Mr Yap.

At the 36-storey twin tower Soleil condominium, several of its 417 units were sold to buyers like project director Kellie Liew, who is looking to rent out her two-bedroom unit, possibly to medical tourists seeking treatment in the neighbourhood.
Source : Straits Times - 16 Feb 2008

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As F1 woes continue, organisers apologise

As F1 woes continue, Singapore organisers apologise 

After a somewhat smooth start in the morning, system stalls again as demand picks up
By Wang Meng Meng 
SALES of tickets for the Singapore Grand Prix were bedevilled by problems again yesterday, although there was some improvement over the situation on Thursday.
Yesterday, some fans managed to walk away with tickets - race organiser Singapore GP declined to provide figures - but many others faced the same frustrations that thousands did on Thursday, when sales practically ground to a halt.

Singapore GP said last night that the ticketing system ‘was still subject to delays at certain periods due to very high traffic volume’.

Sales began on a bright note when counters opened at 9am yesterday, and those who queued or logged on then had a fuss-free experience.

But as demand began to pick up, the ticketing system turned sluggish again. By lunchtime, it had shuddered to a halt.

The stuttering system led race organisers to convene an emergency meeting at Singapore GP’s office in Cuscaden Road in the afternoon.
FRUITLESS WAIT
‘It looks like you can’t be picky - you either bear with the wait or leave it. We’re paying so much. It’s ridiculous.’
BUSINESS MANAGER PHILIPPE RUSSO, 40, who waited in line for 40 minutes at the SingPost branch at Lucky Plaza but failed to get four Pit Grandstand tickets, which cost $1,388 each
 
The Straits Times understands that the meeting was attended by Singapore GP executive director Michael Roche and Singapore Tourism Board chief Lim Neo Chian, among others.

Mounting frustration with the failure of the system also led Singapore GP to take the unprecedented step of placing full-page advertisements in The Straits Times and other Singapore Press Holdings newspapers.

Headlined ‘We Are Sorry’ - in large black type - the ads read: ‘We know the frustrating time that many F1 fans have experienced over the past few days.

‘The ticketing system has improved considerably, but there may still be some delays at peak periods.

‘We apologise sincerely for the frustration and inconvenience that the system problems have caused.

‘Rest assured we are doing everything possible to improve the system further.’

No ads were placed in overseas media or on Singapore’s GP website, though foreign buyers faced much the same problem local ones did.

When contacted, title sponsor SingTel said it was ’sorry to hear that there was some system hiccup yesterday’.

Checks by The Straits Times with fans across the island told a tale of the haves and have-nots.

Among the former was Jeffrey Chin, 33, who logged on at 9am and secured two General Walkabout tickets, each costing $168, in less than five minutes.

‘It was a smooth transaction,’ the social work executive said, adding: ‘What an improvement over the horrible opening day, when I waited online for 14 hours.’

Business manager Philippe Russo, 40, was not as lucky in his quest for four Pit Grandstand tickets, which cost $1,388 each.

After waiting in line for 40 minutes at the SingPost branch at Lucky Plaza, the Frenchman, a permanent resident, walked away empty-handed.

He was asked by the staff to leave his contact details and seat preference on a sheet of paper - but there was no guarantee he would get them.

He said: ‘It looks like you can’t be picky - you either bear with the wait or leave it.

‘We’re paying so much. It’s ridiculous.’

About 70,000 three-day passes for the September race - the first Formula 1 night race - are up for sale in this current round
Two days of frustration for fans
APOLOGY: Singapore GP placed this ad in The Straits Times and other Singapore Press Holdings newspapers, assuring fans that it was doing everything possible to improve the system.

THE computer sales system crashed on Thursday just moments after tickets went on sale at 9am. Ticket sales ground to a halt at counters, over the phone and online, leaving fans both in Singapore and abroad fuming.

Yesterday, sales began on a bright note when counters opened at 9am. But as demand picked up, the ticketing system’s sluggishness began to return and, by lunchtime, it had shuddered to a halt.
Source : Straits Times - 16 Feb 2008

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Robust economy, Singapore property market lead to $6.4b surplus

Robust economy, Singapore property market lead to $6.4b surplus
 
By Bryan Lee, Economics Correspondent 
THE Government racked up a Budget surplus of $6.45 billion last year, the highest since 1994, outdoing even the most bullish of market forecasts.
Unexpectedly strong economic growth and a runaway property market sent tax revenues surging, putting paid to an initial projection of a $700 million deficit.

But such a sizzling performance is not expected in the next financial year, with an $800 million deficit pencilled once handouts and changes announced in the Budget are accounted for.

Economists, who were predicting a surplus of between $4 billion and $5 billion, said they were caught out by higher-than-expected consumption and real estate-related tax collections.

They were also surprised by the size of ‘budget hongbaos’ that will be given out next year. ‘It’s a very generous Budget, with much more special transfers than last year,’ said United Overseas Bank (UOB) economist Ho Woei Chen.

Finance Minister Tharman Shanmugaratnam yesterday told Parliament the unexpected surplus came on the back of exceptionally strong economic growth.

‘We started the year expecting a growth rate of 4.5 to 6.5 per cent, which was also in line with market forecasts. With actual growth at 7.7 per cent, corporate and personal income taxes came in some $1 billion higher than projected.’

As anticipated, strong company profits sent income tax collections from businesses up 6.2 per cent to $9 billion despite a cut in the corporate tax rate from 20 per cent to 18 per cent.

Bigger wages and a tight job market sent personal income tax revenues up 18.1 per cent to $5.56 billion.

The strong economy also boosted goods and services tax (GST) revenues.

While a rise was factored in, given last July’s GST hike from 5 per cent to 7 per cent, the final figure was $1.2 billion higher than initial estimates. This, said Mr Tharman, was due mostly to higher consumption.

He added that the rate hike raised $1.4 billion in revenues, matching the size of benefits paid out in the year through the GST Offset Package and Workfare.

Economists said a buoyant economy enabled retailers to raise prices to pass on the GST hike. The higher prices, in turn, translated into more GST paid.

But the biggest surprise came from the red-hot property market, said Mr Tharman. Stamp duty rose to a record $3.8 billion, $2.3 billion higher than expected. Other property-related revenues also clocked in $1.1 billion above projections.

‘These were large gains, out of the ordinary, and which we cannot expect to see very often,’ he said.

UOB’s Ms Ho noted that net investment income contributions seemed low at $2.3 billion, given buoyant markets last year. ‘It’s the lowest since Sars-hit 2003.’

Mr Tharman said the Government is amending the Constitutional framework to let it draw on more investment income from its reserves. This would allow it to further enhance tax competitiveness.

A Bill will go before Parliament later this year.

In the year ahead, operating revenues are predicted to inch up 0.5 per cent. Spending will rise 12.5 per cent and special transfers will more than double.

Citigroup economist Chua Hak Bin said the estimates are very conservative as in previous years. ‘We could see another surplus next year.’

Source : Straits Times - 16 Feb 2008

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Some govt units moving out to free up Singapore city space

Some govt units moving out to free up Singapore city space

20,000 sq m or more will be available to private sector
By KALPANA RASHIWALA

THE government has decided to relocate several agencies out of the Central Area to free up space of 20,000 square metres or more by first quarter next year for use by the private sector.
The space being released, which will help to address the office space shortage in the near term, is equivalent to 20 floors or more of an office tower block in Suntec City.

Finance Minister Tharman Shanmugaratnam did not identify the government agencies that will be moving out of the city but market watchers suggest that they may include Singapore Land Authority, which currently occupies several floors at Temasek Tower near Tanjong Pagar MRT Station; the Energy Market Authority, which is housed in Singapore Power Building on Somerset Road; Intellectual Property Office of Singapore, located at Plaza by The Park on Bras Basah Road; and Info-Communications Development Authority of Singapore, now at Suntec City.

The Workforce Development Agency, housed at One Marina Boulevard, has also been highlighted by market watchers as being a possible candidate for relocation out of its prime CBD offices.

The Economic Development Board is expected to vacate its offices at Raffles City when its lease expires next year and move into Fusionopolis at one-north in Buona Vista.
Market watchers suggest that some of these government agencies with public counters are likely to move to city-fringe locations, rather than to outlying areas to minimise inconvenience to the public. ‘Vacant state properties could be their new homes,’ an industry observer reckons.

In his Budget speech, Mr Tharman noted that in the short term, Singapore faces tight office space capacity, caused by the surge in business growth, especially in the business and financial sector.

‘Office rentals have risen sharply. Although office space still costs 30 to 50 per cent less in Singapore on average, compared to Hong Kong and Tokyo, the pace of cost increases has been rapid and unsettling for businesses,’ he added.

‘The tightness in office space should ease over the medium term, with the completion of major projects currently under construction, such as phases one and two of the Marina Bay Financial Centre, the Marina View sites and South Beach. By 2012, we will have an additional 1.4 million sq m of office space.’

To address the problem in the short term, the government has released a total of 15 transitional office sites and vacant state properties, which will yield 150,000 sq m of additional office space. Companies are already relocating to some of these sites, and to new regional centres, Mr Tharman noted.

Source : Business Times - 16 Feb 2008

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Financial sector gets tax perks - Singapore

Financial sector gets tax perks - Singapore

By MATTHEW PHAN
TO strengthen Singapore’s position as a financial centre, certain tax changes were announced.

Safe harbour: Tax changes aimed at strengthening Singapore as a financial centre 

Islamic finance: To encourage more Syariah-compliant activity carried out of Singapore, the government will introduce a 5 per cent concessionary tax rate for income derived from qualifying Syariah-compliant activities.

These are specifically in the areas of lending, fund management, insurance and reinsurance.

QDS exemption: Finance Minister Tharman Shanmugaratnam also extended the exemption currently granted to individuals on income from Qualifying Debt Securities (QDS) to all investors, including ‘resident, non-individual investors’, in qualifying sukuks, or Islamic bonds.
Family firms: A tax incentive scheme for family-owned investment holding firms will give them ‘the same scope of exemptions that individuals currently enjoy on Singapore and foreign-sourced investment income’.
Insurance incentive: Another change aimed at the insurance sector is to tax licensed insurance and reinsurance brokers a concessionary rate of 10 per cent on income derived from offering broking and advisory services to offshore clients.

Other enhancements will target asset securitisation, project finance and QDS, said Mr Tharman.
FSI extension: The Financial Sector Incentive scheme - which offers concessionary rates for selected financial activities - will be extended for another five years, till Dec 31, 2013.
Container leasing: The government will also impose a tax rate of 5 per cent or 10 per cent on income from leasing of containers under the Maritime Finance Incentive, an incentives that partners will also enjoy.

Standard Chartered economist Alvin Liew said that the Budget was ‘pro-business’, but also ‘more beneficial to the financial sector, specifically wealth management and Islamic financing’.

‘We currently have around 7-8 banks that participate in Syariah compliant activities. Now with the concession, we might see more players coming in.’
Source : Business Times - 16 Feb 2008

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$7.5b target for Singapore research & development - Singapore

$7.5b target for Singapore research & development - Singapore

R&D tax deductions upped from 100% to 150% in bid to woo private sector
By UMA SHANKARI

SINGAPORE will increase its overall research spending to $7.5 billion a year - or 3 per cent of Gross Domestic Product - by 2010, the government revealed yesterday.
 
‘In the future, what is going to differentiate us from the pack is innovation.’
 
- Mike Teng, 
TR Formac Pte Ltd’s managing director for Asia-Pacific 
 
 
 
A third of this amount will be publicly-funded research. The government will top up the National Research Fund by $800 million, taking its total to $1.8 billion, Finance Minister Tharman Shanmugaratnam said during his Budget speech yesterday.

And to encourage the private sector to spend more on R&D, he also laid out three schemes - costing some $250 million a year - that are expected to provide significant incentives for companies here to conduct research.

Last year’s Budget, Mr Tharman said, made Singapore one of the lowest tax locations in the world to start and grow an enterprise. ‘In this year’s Budget, we will make Singapore one of the most competitive places for companies, big and small, to do R&D,’ he said.

Singapore’s R&D expenditure hit $5 billion, or about 2.4 per cent of GDP, in 2006, the last year for which official data is available.

Increasing the proportion to 3 per cent will mean that Singapore’s spending will be closer to what other developed countries - such as the United States, Japan and Taiwan - are setting aside for R&D, said Citigroup economist Chua Hak Bin.

‘Singapore wants to move up the ladder,’ he said, adding that most other developed countries spend 3-4 per cent of GDP on research.

Under the changes unveiled to motivate the private sector, the existing tax deduction for R&D done in Singapore will be lifted from 100 per cent to 150 per cent.

Two new R&D incentives were also introduced. The first is a tax allowance, expected to provide a further push for innovation, especially for small and medium-sized enterprises. Companies will be granted R&D tax allowances each year of up to 50 per cent of the first $300,000 of their chargeable income. This allowance can be used to defray incremental expenditure on R&D done in Singapore in subsequent years.

The other new incentive aims to help high-tech start-ups. Research intensive start-ups will be allowed to convert their losses into a cash grant of up to about $20,000.

These three schemes will significantly reduce the effective tax rates for companies doing R&D here.

For instance, a small company that is around the 80th percentile of taxpaying companies, and which spends an additional $150,000 on R&D, would find its effective tax rate being reduced from around 9 per cent currently to almost zero. For a medium-sized company around the 90th percentile, its effective tax rate will come down from about 15 per cent to 10 per cent.

The Singapore Business Federation welcomed the schemes and pointed out that innovation requires early investment so that companies here, together with the Singapore economy, can stay ahead of global competition.

In the same vein, Mike Teng, TR Formac Pte Ltd managing director for Asia-Pacific, said that it is encouraging that the government is providing financial assistance to innovative enterprises.

He noted that China, India and other lower-cost neighbouring countries can compete against Singapore in many areas today. ‘In the future, what is going to differentiate us from the pack is innovation,’ he said.

The public sector itself will be more active in innovation, Mr Tharman said. The government will set aside a seed fund of $90 million over three years for experimentation, test-bedding and building capabilities in the public sector. It will also continue to push for the commercialisation of research.

Summing up the push to increase R&D spending in both the public and private sectors, Barry Halliwell, deputy president for research and technology at the National University of Singapore, said: ‘It pleases me to note that in its budget, the government notices the need to fund research across the spectrum.’
Source : Business Times - 16 Feb 2008

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Dec 2007 Singapore retail sales exceed forecast, rise 2.5% to $3.15b

Dec 2007 Singapore retail sales exceed forecast, rise 2.5% to $3.15b

By CHEW XIANG
RETAIL sales climbed 2.5 per cent to $3.15 billion in the December 2007 festive shopping season, the Singapore Department of Statistics said yesterday.
Growth was helped by strong numbers from department stores, petrol service stations, and apparel, footwear and recreational goods sales. The December performance exceeded the median forecast of 1.8 per cent by a Bloomberg survey of 14 economists. The growth also reversed a 0.3 per cent decline in November when rising oil prices curbed vehicle sales.
After seasonal adjustment, retail sales rose 1.7 per cent from November, reversing two months of decline. But at constant prices, overall retail sales fell 2.6 per cent year-on-year. All sectors showed strong growth except for motor vehicles, which saw a 12.5 per cent drop in its third consecutive month of decline. Excluding that sector, total retail sales climbed 8.9 per cent year-on-year.
The petrol service station sector climbed 33.9 per cent from last year on the back of rising oil prices, from the 32.2 per cent gain in November. Department stores jumped 9.1 per cent, down from November’s 16.2 per cent gain.

HSBC economist Prakriti Sofat said: ‘The bottomline is that households are not spending on big ticket items for now, though they are continuing to spend on small to mid-ticket items,’ referring to a slight gain in momentum in supermarket and sundry shop sales from November.

‘This possibly reflects an increased cautiousness with regards to the future or that potential car owners are very sensitive to COE costs and petrol prices. Our underlying view remains that strong fundamentals such as robust real income growth and decade-low real interest rates should see households increase spending in the period ahead,’ she said.

The catering trade, meanwhile, rose 8.3 per cent in December, building on the 6.9 per cent gain in November. Eating places such as cafes and canteens showed the strongest performance, rising 16.6 per cent. Fast-food outlets climbed 8 per cent and restaurants 3.8 per cent. Food caterers, making up 14.8 per cent of the index, was largely unchanged.

At constant prices, the overall gain moderated to 4.6 per cent year-on-year.
Source : Business Times - 16 Feb 2008

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Singapore ERP a traffic management tool: minister

Singapore ERP a traffic management tool: minister

By CHEN HUIFEN
THE projected $70 million increase in revenue due to the electronic road pricing (ERP) rate hikes will go into the government’s consolidated fund, according to Transport Minister Raymond Lim.

Smooth going: Transport Minister Raymond Lim stresses the ERP system is not a revenue cash cow 
In response to a question in Parliament yesterday on how ERP revenues are going to be accounted for, Mr Lim said that they contribute to a fund that is used to support various programmes such as public transport and road projects for the benefit of Singaporeans.

But he stressed that the ERP system is aimed at addressing congestion and is not a revenue cash cow for the government.

In fact, the government is giving back more to the motoring public through reduction in road taxes, and cuts in the additional registration fee for cars.

‘While we expect the additional revenue from the upcoming ERP changes to be about $70 million annually, the reduction in road tax will cost the government about $110 million every year,’ he said.

‘The government will also collect $200 million less annually due to the reduction in additional registration fee for cars.’

Yesterday’s parliamentary session was dominated by questions on Singapore’s public transport system, which is expected to undergo some major reforms and improvements in the coming decade.

Members of Parliament wanted to know if greater bus competition would lead to higher fares and congestion as a result of more buses on the road.

Mr Lim clarified that the Land Transport Authority (LTA) is introducing competition for the market and not competition in the market.

The number of bus services on the roads will be specified by LTA and not left to competing bus operators to flood the market.

As for the outlook on fare prices, Mr Lim said that the current system of a fare cap formula prevents direct pass-through of operators’ costs to commuters.

On manpower issues, MP Ho Geok Choo questioned if there are enough Singaporeans to take up careers in the tourism and spin-off sectors, in anticipation of the 50,000-60,000 jobs that will be created over the next three years.

Minister of State for Education and Manpower Gan Kim Yong said there are already various initiatives launched to address the labour demand, including a $360 million Tourism Talent Plan which will train and upgrade 74,000 Singaporeans and raise the professional standard of the tourism industry.

In the pipeline too is a Certified Service Professional Programme that will be launched later this year.

This will train 36,000 non-tourism workers to facilitate them in entering the tourism industry in the next three years
Source : Business Times - 16 Feb 2008

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