Singapore is determined to move along the path of being green and sustainable, and companies "should sit up and take notice" of the carbon tax review announced in this year's Budget, said Minister in the Prime Minister's Office Indranee Rajah yesterday.
Hinting that carbon tax rates could go up further, Ms Indranee, who is also Second Minister for Finance, said: "You really have to send a signal to businesses. So by saying that we will review, that's already one signal. Because when we review things, things may change."
Her comments at the Money FM 89.3 SG Budget Conversations 2021 radio show came after Deputy Prime Minister Heng Swee Keat on Tuesday said Singapore will review the trajectory and level of its carbon tax, which stands at $5 per tonne of greenhouse gas emissions until 2023. The show is presented by UOB, in partnership with Reach and KPMG.
In 2018, the Government had said the rate would be increased to between $10 per tonne and $15 per tonne by 2030.
When asked by Money FM hosts Elliot Danker and Ryan Huang whether Singapore's green push may run into challenges, with companies still trying to recover from the pandemic, Ms Indranee said inertia is expected during times of transition.
A positive way to encourage companies to come on board is through green financing, which attaches certain sustainability requirements to loans, she added.
The Government also announced in Budget 2021 that it will issue green bonds on select public infrastructure projects worth up to $19 billion, so as to serve as a reference for the Singapore dollar corporate green bond market.
UOB economist Barnabas Gan, also a panellist on the radio show, said the push for sustainability is important in developing a strong economy, such as through growing domestic food production.
Ms Indranee said the ministries involved in sustainability issues will release more information in a joint segment during the upcoming committee of supply debate on the budgets of individual ministries.
When asked to address criticisms by some people that this year's Budget - named Emerging Stronger Together - does not do enough for them, she said it is not "just about the money", but also about planning for the future.
She added that the Budget is reasonable, targeted and strategic, given the resources that Singapore has had to marshal in dipping into its reserves, as well as a decline in general sources of revenue due to the pandemic.
Unlike last year's "blockbuster Budgets", this year's Budget is meant to position Singapore for the future by helping people and businesses seize new opportunities on the horizon, she said.
Another panellist, Mr Ajay Kumar Sanganeria, partner and head of tax at KPMG Singapore, said the shift from short-term measures to more structural changes will provide more long-term stability to businesses than just cash handouts.
Referring to the Budget's name, Ms Indranee said: "As the title suggests, it's intended to make sure that we can come out of this stronger. And if we do, and then we get more revenue, you can do more in future years."