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Parliament Highlights - 9 July 2018
PUBLISHED ON 09 Jul 2018
Parliament reconvened on 9 July 2018 and Members of Parliament tabled questions on Singapore’s bilateral relations with Malaysia.

The vision for Jurong Lake District remains

The vision for the Jurong Lake District will not change, regardless of the outcome of the High-Speed Rail (HSR) project, assured Minister for National Development Mr Lawrence Wong.  
 

Mr Wong explained that the plans for Jurong Lake District were developed well before Malaysia proposed the HSR project and it was only in 2015, after a further study of the HSR proposal, that it was decided to locate the Singapore terminus of the HSR in Jurong.

Mr Wong’s remarks comes after Malaysian Prime Minister Mahathir Mohamad said he plans to scrap the rail project, which impacts the development of the Jurong Lake District as the HSR terminus was to be located at the current site of Jurong Country Club (JCC) in Jurong East.
Mr Wong added that some details may need to be adjusted along the way, as circumstances change. “But the bottom line is that we have an exciting transformation plan for the whole area, and we will proceed with the implementation of these plans when ready,” he told Parliament.
 

Water agreement cannot be changed unilaterally

The 1962 water agreement between Singapore and Malaysia is a “fundamental agreement, which is also registered with the United Nations, said Minister for Foreign Affairs Dr Vivian Balakrishnan.

“Any breach of the agreement would call into question the Separation Agreement, which is the basis for Singapore's very existence as an independent sovereign state.” Dr Balakrishnan added that neither Malaysia nor Singapore can unilaterally change the terms of this agreement.
Touching on Singapore’s relations with Malaysia, he said they are based on three fundamental principles. They are:
  • Upholding international law and respecting the sanctity of international agreements.
This is a critical principle especially for a small state like Singapore. Our very existence as a sovereign independent state is derived from the Separation Agreement of 1965," Dr Balakrishnan told Parliament.
  • Any disputes, if and when they arise, should be resolved in accordance with international law
  • Singapore must uphold its reputation as a credible, trusted, and consistent partner, and a country that abides fully by our international obligations
Watch Minister Vivian's speech in Parliament
 

Important to protect Singapore’s reputation in 1MDB saga

Minister for Foreign Affairs Dr Vivian Balakrishnan share in Parliament the assistance rendered by Singapore in Malaysia’s investigation of their 1MDB scandal.
 
Stressing the importance of reaffirming and protecting Singapore’s reputation as a clean, transparent and trusted international financial centre, Dr Vivian reiterated, “We do not tolerate the misuse of our financial system either as a refuge or conduit for illicit funds.”
 
Dr Balakrishnan shared that Singapore has shut down two banks and levied fines on others for regulatory breaches, and convicted individuals have been jailed and fined. “So far, we are the only jurisdiction in the world to have done so,” he added.
 
Since the change of government in Malaysia, Singaporean and Malaysian agencies have met on several occasions on 1MDB matters to provide 1MDB related information, proactively cooperating with the ongoing investigation.
 
“In fact, the Malaysian authorities have expressed their appreciation to Singapore for our cooperation,” said Dr Balakrishnan.



S$250m spent on HSR project: Khaw Boon Wan

With more than $250 million already spent on the Kuala Lumpur-Singapore High Speed Rail (HSR) project including land acquisition, Coordinating Minister for Infrastructure and Minister for Transport Mr Khaw Boon Wan said that the project is likely to expend another $40 million by the end of the year.

“We can recover value for some of the expenditure, even if the HSR project does not proceed. But a significant amount which has been spent, will be a completely wasted expenditure, if the project does not proceed, he added.

Mr Khaw also emphasised that the HSR bilateral agreement which was signed between both countries in 2016 is a fair treaty with equal rights and obligations on both sides. It would not be fair for the taxpayers of one country to bear the cost of another country’s actions.

Mr Khaw reiterated, “Compensation is not a penalty imposed on the other country.”

“It will be most unfortunate, if Malaysia has in fact decided to terminate, but delays in notifying us, because there will be further wasted expenditure,” Mr Khaw said.

To this effect, Singapore has sought clarification from Malaysia regarding the HSR project.
 

Mr Khaw shared in Parliament that a diplomatic note was sent to Malaysia on 1 June 2018 to seek clarification on their position on the joint project. “The public statements made by the Malaysian ministers, and Prime Minister Dr Mahathir himself on the termination of the project have not been followed through with any official communication to us,” explained Mr Khaw.



Lawrence Wong asks WP to refrain from distorting facts to mislead public
 
The planned increase in the Goods and Services Tax (GST) is not affected by the outcome of the High-Speed Rail (HSR) project as “the increase was never meant to finance lumpy investments in infrastructure,” clarified Second Minister for Finance Mr Lawrence Wong. 

Responding to a query by the Workers’ Party’s Mr Pritam Singh, Mr Wong explained that the planned increase of the GST and the outcome of the HSR are two separate matters.
 
 

Rebutting Mr Singh for asking if the Finance Ministry would consider lowering the Net Investment Returns Contribution (NIRC), if the HSR is terminated, Mr Wong said Mr Singh was “trying to link things that are clearly of no relationship at all.” The NIRC, Mr Wong said, is a separate matter, and the largest source of revenue for the funding of Singapore's overall budget. Even if the HSR were to be terminated, the trend of rising overall expenditure will continue, in particular when it comes to recurrent expenditure, Mr Wong said.
 
He went to elaborate that the main drivers for rising Government expenditure in recent years, and in the future, are healthcare, security and social spending. “Therefore, the underlying rationale for the GST rate increase is not affected by the outcome of the HSR project. Our population will continue to age. More Singaporeans will need support to care for their loved ones,” he added.

Refuting another point on funding made by the WP, Mr Wong noted that they had posted a video clip on its Facebook page in June questioning why the water price increases were necessary when the national water agency's capital reserves had gone up from $3 billion to $5.3 billion over the last decade. Mr Wong said WP’s interpretation of PUB's capital reserves as a hoard of cash surplus is “completely inaccurate and demonstrates a basic misunderstanding of accounting fundamentals.”
 

He added that the capital reserve does not represent surplus funds, and that most of the funds are already invested in the agency's property, plant and equipment, which includes the upgrading of waterworks, water reclamation plant expansions and investments in water treatment process.

"These are important investments to ensure a secure and sustainable water supply for Singapore," Mr Wong emphasised. 

"I hope this clarification will set the record straight. I also hope the Workers' Party will refrain from distorting the facts to mislead the public," he added.


US-China trade war will affect Singapore 
 

The ongoing trade conflict between the United States and China will have global repercussions, and Singapore is concerned if it escalates into a vicious cycle of tit-for-tat measures, said Minister for Trade and Industry (MTI) Mr Chan Chun Sing on 9 July 2018.
 
 

Adding that bilateral trade between the US and China indirectly contributes to 1.1 per cent of Singapore’s GDP, he said “any sustained disruption is unwelcome for the region. In the meantime, our economic agencies are working closely with companies to identify any disruptions promptly and restructure their supply chains where necessary,” the minister said.
 
However, Singapore will likely experience a modest net impact, based on the tariffs announced so far. He warned that Singapore's open economy will be significantly affected if these measures reach a tipping point, which in turn will trigger a sharp and sustained fall in global business and consumer confidence.
 
The impact will affect the local economy through higher generalised tariffs that are applicable to the majority of countries, including Singapore. Secondly, there will be indirect impact from tariffs imposed by US and China, as well as those by the European Union, Mexico and Canada in retaliation.
 
Meanwhile, Mr Chan said Singapore have forged ahead with like-minded partners to pave the way for regional integration and bring about more opportunities and growth. Mr Chan reiterated: “We are in good standing with all our trading partners, including the US and China, and have urged that ongoing trade disputes be resolved through negotiation.” 
 




 

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