(Delivered in Parliament on 11 April 2016)
Government Procurement – Chen Show Mao
I would like to call on the government to look into encouraging the increased use of price adjustment clauses, or escalation clauses, in government procurement. These clauses provide that, should some key cost in a government contract rise significantly from the time of the tender to the time of actual performance, or over a long period of performance, then the contract price will escalate in accordance with a pre-agreed formula, typically with reference to some index. This will protect the contractor from having to assume the risk of sharp increases in key costs. This will also benefit the government in that contractors will be under less pressure to over-budget when they bid for a contract, and build into their bids their estimates of future cost increases.
Now, escalation clauses need not be used only to protect the contractors when costs go up. They can also be used to favour the government when key costs drop, say in commodity or oil prices. They can provide that in such cases, the contract price to be paid by the government will decrease accordingly.
In this way, escalation clauses remove some financial risk for government contractors, and may enable our SMEs (Small and Medium Enterprises) to “punch above their weight” in more public tenders. To me this would be in keeping with the spirit of this year’s budget and the various forms of financing and tax incentives proposed to support the scale-ups of our SMEs.
Tax Credits for Caregivers – Daniel Goh
Madam Chair, more than 200,000 people is estimated to be providing regular care to family and friends in Singapore and this number is expected to rise as the number of elderly more than double by 2030. A Duke-NUS Medical School survey found that fewer than 5 percent of caregivers interviewed used individual support services such as home nursing and respite care programmes. Caregivers are becoming a vulnerable group themselves while they care for their vulnerable loved ones. They face emotional stress, lack of social support and immediate and long-term financial burdens. This is worse for specialised caregivers who have to care for loved ones with specific illnesses, for examples, caregivers of elderly with dementia, caregivers of people with mental illness, and parents of children with special needs.
I understand that some of these specialised caregivers would qualify for tax reliefs such as the Handicapped Parent Relief or the Grandparent Caregiver Relief. However, tax reliefs are only meaningful for working Singaporeans with a large enough income as to pay taxes. Many specialised caregivers either cannot work or work part-time due to the nature of the specialised caregiving. I also understand that some Government subsidies are available at the point of service, for example for SPICE and also the Foreign Domestic Worker Grant. However, there are specialised caregivers who feel that taking care of their dependents is the best care that they can give them.
I ask that the Minister consider giving means-tested refundable tax credits for specialised caregivers, meaning that some of these caregivers who do not work or work part-time would get a cash refund, a portion of which could go into their CPF. This would lessen their financial burdens, improve their retirement adequacy, give them flexibility to use government aid, and empower them to seek individual support services for a better quality of life for themselves and their loved ones.