Speech By ICPAS President Dr Ernest Kan

01 Jan 2010    Category: Speeches

Good Afternoon Ladies and Gentlemen

Thank you for joining us. I can see that the auditorium is fully packed today. In fact, I was told we have a turnout of more than 500 participants. This is testament to the draw of our eminent panelists today, and the saliency and relevance of today’s topic. Indeed, everyone has a stake in the Budget, and will be impacted by Budget 2010 in one way or another.

So let’s have a closer look at this year’s expansionary Budget.  Budget 2010 comprises four key components: boost productivity, spur innovation, grow globally competitive companies and help workers upgrade. The Government has set the goal of growing Singapore’s productivity by 2 percent to 3 percent per year, over the next decade. Budget 2010 was meticulously crafted to transform Singapore over the next decade, with a key focus on raising productivity based on skills development and innovation, growing globally competitive companies and including all Singaporeans in the country’s growth.

The goal to increase productivity by 2% to 3% annually over the next 10 years will be via a 3-pronged approach: restructuring the economy towards high-value activities; upgrading the individual industries and enterprises; and raising the skills and creative potential of workers. If we achieve this goal, Singapore will be able to sustain a healthy rate of economic growth of 3% to 5% a year, real incomes will increase by one-third in 10 years and the lower-income earning citizens are uplifted.

In the corporate amalgamation framework introduced in Budget 2009, the Finance Minister introduced a new framework that simplified significantly the tax burden when a company acquires another and takes over its assets and liabilities by allowing the tax benefits of the amalgamating companies to be transferred to the amalgamated entity. This year, the Government further introduced a one-off tax allowance scheme to help defray a portion of acquisition costs for the next five years. The allowance will be equal to 5 percent of the value of the acquisition. This good news is topped up with a further introduction on a waiver of stamp duty on the transfer of unlisted shares for qualifying M&A deals. Companies that are planning for any mergers in 2010 will be able to take advantage of this enhanced scheme.

To help local players grow into globally competitive companies in order to capitalize on these opportunities, the Government has introduced a slew of initiatives which includes Partnerships for Capability Transformations (PACT), Public-Private Co-Innovation Partnership and Angel Investors Scheme. 

In addition, the Finance Minister has indicated that the approach is for every Singaporean to share in the country’s growth drive. Lower and middle-income households will benefit from increased parent and dependant reliefs. The recognition of women who support their husbands has prompted the revision of wife relief to spouse relief. The shift from a flat property tax rate to progressive tax rates based on the annual values of properties will save most people $240 or more a year.

These are just the broad strokes of what is in Budget 2010. I’m sure all of us here are keen to find out in detail what impact Budget 2010 will have on the broader economic landscape and what it means for us as individuals. And I hope today’s discussion will provide some answers and food for thought. And with that, I would like to thank all of you for coming and I look forward to a fruitful session.

Thank You.