Second Reading of the Misuse of Drugs (Amendment) Bill and Constitution of the Republic of Singapore (Amendment) Bill - Speech by Assoc Prof Muhammad Faishal Ibrahim, Minister of State, Ministry of Home Affairs and Ministry of National Development

1.   Mr Speaker, on behalf of the Minister for Home Affairs, I beg to move, that the Misuse of Drugs (Amendment) Bill be now read a second time.

2.   Sir, the Bill is linked to the next Bill on the Order Paper, the Constitution of the Republic of Singapore (Amendment) Bill. May I propose that the debates on both Bills take place together? Sir, we will still have the formal Second Reading of the Constitution of the Republic of Singapore (Amendment) Bill to comply with the procedural requirements.

3.   The Constitution of the Republic of Singapore (Amendment) Bill also contains two other sets of amendments not related to the Misuse of Drugs (Amendment) Bill – one set led by the Ministry of Law (MinLaw), and the other by the Ministry of Finance (MOF). I will explain the Ministry of Home Affairs (MHA), MinLaw, and MOF’s amendments in my opening speech. I will address questions pertaining to the amendments led by MHA and MinLaw; Second Minister for Finance Ms Indranee Rajah will address questions pertaining to MOF’s amendments.

Introduction

4.   Sir, the global drug situation is worsening. Illicit drug supply, drug abuse, and the potency of some narcotic drugs are reaching unprecedented levels. The 2022 World Drug Report published by the United Nations Office of Drugs and Crime, or UNODC for short, found that young people abuse drugs more than adults. The UNODC also found that in many countries, the levels of drug abuse among the youth have reached record levels.

5.   The number of deaths, worldwide, associated with drug abuse increased by 17.5% between 2009 and 2019, reaching about half a million deaths in 2019.

6.   Drugs cause great harm to individuals, families and the society. Many countries around the world have ‘given up’ on this fight, because drug trafficking and use have become so prevalent and they cannot stem the tide. For these countries, the only practical approach is to reduce the harm.

7.   In Singapore, our situation is different. Our tough laws have kept the drug situation here relatively under control. We must continue to keep drugs at bay, to prevent the harms from overwhelming us.

8.   To this end, we continually review and refine our laws and policies to keep pace with the evolving drug landscape and local trends.

9.   Mr Speaker, in this Misuse of Drugs (Amendment) Bill, we will introduce two key amendments, to address emerging trends in the local drug situation. We will be introducing a legislative framework to deal with psychoactive substances. We will also be introducing a tiered punishment framework for the drug possession offence.

New Legislative Framework for New Psychoactive Substances

10.   Over the last few years, we have seen the rise of a new threat in the drug landscape. New Psychoactive Substances, or NPS for short, are synthetically-produced substances which mimic the effects of traditional controlled drugs, such as cocaine, heroin and cannabis. Around the world, NPS are proliferating at an unprecedented rate, from just 166 NPS detected in 2009 to 1,150 in 2022, a seven-fold increase in slightly over a decade.

11.   Locally, the number of NPS abusers arrested increased from an average of three abusers per year between 2014 and 2017, to an average of 235 per year from 2018 to 2022.

12.   NPS are harmful, and their abuse has been linked to adverse physical and psychological reactions, and also overdose deaths. These substances are no less harmful than controlled drugs, and are similar in effect. NPS are often clandestinely manufactured. The UNODC has reported that NPS users are frequently hospitalised with severe intoxication.

13.   In Singapore, there have been at least four NPS-related deaths since 2016.

14.   Because the psychoactive effect that NPS causes is similar to that of a controlled drug, its abuse will also lead to acts of crime and violence. Members will remember some recent cases within Singapore where drug abusers acted violently, such as the LSD abuser who killed his mother and grandmother in 2019, or the meth abuser who attacked two other diners with a knife in a restaurant in 2022 because his food was not ready. We have not seen similar incidents arising from NPS abuse yet. We should nip the NPS problem in the bud.

Current Approach

15.   Currently, we manage NPS in the following way.

(a)   Once we detect an NPS, we will list its molecular structure in the Fifth Schedule of the MDA. Section 58A of the MDA allows for such listing up to a year. During this one-year period, the Central Narcotics Bureau (CNB) can seize the substance to prevent its proliferation. CNB will use this time to conduct industry consultations to determine if the substance has any legitimate uses. During this one year, CNB cannot take any prosecutorial action against a person trafficking in the substance.

(b)   If there are no legitimate uses, its molecular structure will subsequently be listed in the First Schedule of the MDA as a controlled drug. Only when it is listed in the First Schedule, can a person who is found trafficking, manufacturing, importing, exporting or possessing such NPS, be prosecuted.

16.   The limitation of the current approach is that we will always be playing catch-up with the syndicates. The ease in modifying the molecular structure of NPS to create new variants, means that traffickers can easily overcome our laws by switching to new, unlisted NPS. In fact, drug suppliers are known to tailor the molecular structure of NPS according to what is not yet controlled through legislation. We need to put in place a more proactive approach.

New Framework

17.   We studied the drug legislation in the UK and Australia, and adopted parts of them to develop our own unique framework to tackle NPS.

18.   We are proposing a new legislative framework to deal with the NPS threat based on their capacity to produce a psychoactive effect, rather than their molecular structure. This allows CNB to take enforcement action against potentially dangerous and potent NPS, and not have to wait until their molecular structure has been identified and listed in the MDA.

19.   The new framework criminalises the manufacture, import and export, traffic, possession, and consumption of all psychoactive substances. The first limb of the definition of a psychoactive substance, as inserted by Clause 2, is a substance or product which is capable of producing a psychoactive effect if consumed. NPS in this Bill will be referred to generally as “psychoactive substances”.

20.   “Psychoactive effect” is defined to mean the stimulation or depression, whether directly or indirectly, of the individual’s central nervous system, affecting the individual’s mental functioning or emotional state.

21.   The first limb of the definition of psychoactive substance is broad, and may cover substances that are already regulated under other legislation or those with legitimate uses. Therefore, we have created a new Fifth Schedule of “Excluded Substances”, which will not be considered as nor regulated as psychoactive substances, as reflected under the second limb of the definition of psychoactive substance. The new Fifth Schedule will list substances that have the capacity to have a psychoactive effect on an individual, but with legitimate uses, or those which are already regulated under other legislation, such as caffeine, alcohol, food, tobacco, and any medicinal product.

22.   I explained the method of temporary listing earlier. The existing Fifth Schedule used to temporarily list NPS will be repealed since there is no longer a need for temporary listing.

23.   To be clear, there is no change to the existing regime for controlled drugs. All controlled drugs listed in the First Schedule will continue to be regulated in the same way as before. That is why controlled drugs are also listed as excluded substances in the new Fifth Schedule.

Punishment Framework

24.   The punishment framework for these new offences relating to psychoactive substances will take reference from that for Class C controlled drugs, but generally with fines in place of caning. The proposed definition of “psychoactive substances” covers a broad scope of substances with different levels of psychoactivity, and because they are novel, their potential harms may not be as well-documented as those of controlled drugs. This approach therefore balances the need for deterrence, against the uncertainty over the universe of psychoactive substances, with varying levels of potential harm.

25.   Once the molecular structure of a specific psychoactive substance is identified and industry consultation has been conducted to determine that the substance has no legitimate use, we will list the substance in the First Schedule as a controlled drug. This substance will at that point no longer be treated as a psychoactive substance, as defined in the MDA.

26.   In 2019, we introduced offences to criminalise acts of contamination that contribute to the spread of drug abuse and child endangerment through exposure to drugs. Clause 7 introduces the same contamination and child endangerment offences for psychoactive substances. The punishments will be the same as the offences where Class C controlled drugs are involved, including caning. We propose for caning to be retained for contamination offences, to better protect vulnerable members of society.

27.   Repeat offenders with antecedents of the same nature, whether for psychoactive substances or controlled drugs, will be liable for higher punishments. For example, if an offender has an antecedent for trafficking in a controlled drug and is now convicted of trafficking in a psychoactive substance, he will be considered a repeat offender and will be subject to enhanced punishment.

Issues Relating to Presumptions and Knowledge for Offences Concerning Psychoactive Substances

28.   I will now speak about issues relating to the element of knowledge for offences concerning psychoactive substances.

29.   The MDA currently contains statutory presumptions relating to controlled drugs which, when invoked, shift the burden of proof to the accused person to prove otherwise on a balance of probabilities, for example, that he did not have knowledge of the nature of the drug found in his possession. Clauses 10 to 14 extend these presumptions to psychoactive substances.

30.   Clause 15 introduces a new Section 22A which provides that for the purpose of proving that the substance in question is a psychoactive substance, it is sufficient for the Prosecution to prove that the substance has the capacity to have a psychoactive effect on an individual if consumed. An accused person who claims that the psychoactive substance is an excluded substance, bears the burden of proving this claim on a balance of probabilities. For the new offences criminalising the manufacture, import and export, traffic, and possession of psychoactive substances introduced in Clause 7, it is a defence for the accused person to prove on a balance of probabilities that he dealt with the substance for a legitimate purpose other than human consumption. The burden for proving this defence likewise falls on the accused person.

31.   For example, if a person is arrested with a substance found to be capable of producing a psychoactive effect, and claims that he intended to use the substance as a cleaning chemical, he would need to produce evidence to show that he intended to use the psychoactive substance in his possession for cleaning, and not for human consumption.

32.   This is fair as there is a wide range of substances that have the capacity to have a psychoactive effect on a person if consumed, with an equally wide range of uses for these substances. The person dealing in the substance would know best what the substance is and the intended use of the substance, if it truly has a legitimate purpose other than for abuse.

33.   In addition, Clause 15 inserts a new Section 22B, which provides that ‘knowledge that a substance is a psychoactive substance’ is established, for the purposes of offences concerning psychoactive substances, if the person knew the substance had the capacity to have a psychoactive effect on an individual when consumed, and did not know or have reason to believe that the substance is an excluded substance. For avoidance of doubt, Section 22B provides that the person need not have known the exact name or molecular structure of the substance, in order for his knowledge of the psychoactive substance to be established.

34.   Next, we are amending Section 16. Scientific certificates issued under Section 16 may be used as proof of the matters contained within relating to controlled drugs, unless the contrary is proved. Clause 9 extends the effect of Section 16 to apply to certificates relating to psychoactive substances. Operationally, the Home Team Science and Technology Agency (HTX) will be conducting the relevant tests on seized substances during investigations into an offence relating to psychoactive substances. As such, Clause 9 also amends Section 16 to allow HTX analysts to sign certificates issued under Section 16.

Enforcement Powers

35.   Sir, we will also amend the MDA to extend the existing powers of law enforcement officers in respect of controlled drugs, to apply equally to psychoactive substances. Clauses 16, 17 and 18 extend officers’ powers of search, seizure and arrest to apply in relation to psychoactive substances. Clause 19 amends Section 27 to allow for the forfeiture of any psychoactive substance seized under the MDA. Clauses 21, 22 and 23 amend Sections 31, 31A, 31B to extend officers’ powers to collect urine specimens, hair specimens and oral fluids in cases of suspected psychoactive substance abuse.

Treatment and Rehabilitation for Abusers of Psychoactive Substances

36.   Where appropriate, abusers of psychoactive substances may be subjected to treatment and rehabilitation, similar to abusers of controlled drugs. Clause 2(b) expands the definition of ‘drug addict’ to include a person who is addicted to a psychoactive substance. This allows the Director of CNB to subject him to supervision, or treatment and rehabilitation, which includes committal to the Drug Rehabilitation Centre (DRC).

37.   We will also amend Article 9(6)(b) of the Constitution. Article 9(6)(b) ensures that laws relating to the misuse of drugs such as the MDA, that authorise the arrest and detention of any person for the purpose of treatment and rehabilitation, are valid under the Constitution. We propose to include psychoactive substances into this clause, to ensure the constitutional validity of the Director of CNB’s proposed powers to commit persons who have abused psychoactive substances to detention for treatment and rehabilitation.

Consequential Amendments to Other Acts

38.   The Bill will make consequential and related amendments to nine other Acts. These are technical amendments needed to align these Acts with the new legislative framework for NPS, such as to update the enforcement powers in those Acts to also cover psychoactive substances.

Increasing the Penalties for Possession Simpliciter

39.   I will now move on to explain the second key amendment in the Misuse of Drugs (Amendment) Bill. In recent years, CNB has seen the modus operandi of syndicates shift towards dealing in larger quantities of drugs per transaction. For example, in September 2022, there was a large seizure of 13kg of drugs which had included 8kg of cannabis, as well as a seizure of 18kg of heroin in May 2022. These were exceptionally large seizures, amounting to millions of dollars in street value.

40.   The current punishments for possession offences are not differentiated by the type of the drugs involved, and are not tiered based on the quantity of the drugs. It therefore does not sufficiently account for the greater harms that could be caused by a person in possession of larger quantities of drugs. Persons who are willing to risk being in possession of such large quantities of drugs contribute significantly to fuelling the local drug market, and feeding local drug demand. We need a more deterrent sentencing regime.

41.   MHA therefore proposes to increase punishments, which will include caning, for the possession of selected controlled drugs above certain weight thresholds. Clause 34 amends the Second Schedule to increase the penalties for the offence of the unauthorised possession of certain quantities of selected drugs. The drugs for which this amendment will apply are cannabis, cannabis mixture, cannabis resin, cocaine, diamorphine, methamphetamine, morphine and opium. We scoped the new framework to these eight drugs based on our assessment that they have the highest potential to cause serious harms in our local context.

42.   Currently, the maximum punishment for possession of any controlled drug, regardless of weight, is 10 years’ imprisonment, or a fine of up to $20,000, or both. The Bill proposes to tier the penalties according to the quantity of the controlled drug.

(a)   In the proposed enhanced punishment framework, for the lowest tier, the punishment is a maximum of 10 years’ imprisonment or a fine of up to $20,000, or both.

(b)   For the middle tier, the minimum mandatory sentence will be 10 years’ imprisonment and five strokes of the cane, while the maximum is set at 20 years’ imprisonment and 10 strokes of the cane.

(c)   For the highest tier, the minimum mandatory sentence will be 20 years’ imprisonment and 10 strokes of the cane, while the maximum is set at 30 years’ imprisonment and 15 strokes of the cane.

43.   I would like to emphasise that this new punishment framework does not affect the policy change that was announced in Parliament in 2019 when we last amended the MDA. Since 2019, we have been diverting ‘pure’ drug abusers to DRC for treatment and rehabilitation, instead of prosecuting them. The Minister for Home Affairs had explained then that ‘pure’ abusers referred to drug abusers who did not commit any other offences besides drug consumption, but who may face other less serious, related drug offences such as possession of drug-taking utensils or small quantities of drugs.

44.   However, drug abusers found with large amounts of drugs in their possession, would not be considered ‘pure’ drug abusers, and would not be considered for diversion to the DRC. There is thus no change to the approach we take for ‘pure’ drug abusers.

45.   For persons in possession of large quantities of drugs, CNB will continue to conduct thorough investigations to determine if the drugs were meant for trafficking, their own consumption or otherwise. Depending on the facts of the case, CNB will make its recommendations to the Attorney-General’s Chambers (AGC) on the appropriate charges, for example whether for trafficking or simply possession. The amendments to the punishment framework do not affect this investigation and prosecution process and will only affect the eventual sentence faced by a person who is convicted of a possession offence.

Technical Amendments

46.   The Bill will also make some technical amendments.

Enforcement and Operations-related Proposals

47.   The current definition of “article liable to seizure” in Section 2 includes any money, thing, controlled equipment, controlled material, or anything that contains evidence of an offence. This may not apply intuitively to things that “constitute” and do not “contain” evidence of an offence, like jewellery. Clause 2 amends the definition to include the word “constitute”. This will align with the language used for a similar provision relating to seizure of evidence in the Criminal Procedure Code 2010 (CPC).

48.   Next, Section 11 of the MDA makes it an offence for an owner, tenant, occupier or person in charge of any place or premises to permit that place to be used for drug consumption or trafficking. Clause 3 amends Section 11 to clarify that such a person only commits an offence if the drug consumption mentioned in Section 11(a) is in contravention of Section 8(b) for being unauthorised, which constitutes the drug consumption offence.

49.   Next, Section 11C criminalises introducing a person whom he knows is a drug trafficker to another person. Clause 5 amends Section 11C to clarify that a person, A, only commits a Section 11C offence if A knows or has reason to believe that B intends to procure a controlled drug, and the possession of the controlled drug by B or any person B passes it to would not be authorised under the Act. Likewise, person A would only be liable for the Section 11C offence if he knows or has reason to believe that B intends, without any authorisation under the Act, to smoke, administer or consume the controlled drug. To illustrate, if someone offers to introduce his friend to a person whom he knows is a drug trafficker, he will only be liable for a Section 11C offence if he knows or believes that this friend intends to buy drugs from this trafficker for unauthorised consumption.

50.   We will also make amendments to Sections 24, 25 and 26 to clarify that an officer may make seizures based on reasonable suspicion. Clauses 16, 17 and 18 make these amendments respectively. The current Sections 24, 25 and 26, if read literally, seem to suggest that CNB can only seize any drug, substance or article which is confirmed to be a controlled drug or substance, article liable to seizure, drug specified in the Fifth Schedule, or substance containing any drug specified in that Schedule.

51.   In practice, it is not possible for CNB to only seize such drugs, substances or articles after confirmation of their nature, since this can only be confirmed after the drug, substance or article has undergone scientific analysis, after seizure.

52.   Likewise, Section 24 suggests that officers can only seize or detain any vehicle which has been confirmed to be used in the commission of or in connection with an offence under the MDA. However, it is not always conclusive at first instance if a vehicle is linked to the offence, and further investigations after seizure are often needed. So these are operational matters which we want to make consistent and practical.

53.   These amendments align the position in the MDA with the powers of investigation provided for under the CPC that are conferred on CNB officers when investigating drug offences, which enables seizure based on suspicion.

SAF-related Proposals

54.   Another set of amendments pertains to the provisions concerning drug abusers charged under the Singapore Armed Forces Act 1972, or the SAF Act. These amendments aim to clarify the policy intent for provisions in the MDA concerning enhanced punishments and supervision for drug abusers convicted under the SAF Act, and improve consistency between both regimes.

55.   Currently, SAF servicemen caught for drug consumption may be charged under Section 26 of the SAF Act or Section 34 of the SAF Act. Section 34 of the SAF Act may also be used to charge SAF servicemen for drug possession .

56.   Clause 25 amends Section 33 of the MDA to clarify that only previous convictions for drug consumption under Section 34 of the SAF Act, and not for drug possession , will count towards enhanced punishment for drug consumption under the MDA.

57.   Similarly, Clause 26 clarifies that only antecedents for drug consumption under Section 34 of the SAF Act will count towards long-term imprisonment under Section 33A of the MDA for the repeat consumption of specified drugs.

58.   Separately, Section 58(1)(q) currently allows the Minister for Home Affairs to make regulations in respect of the supervision and aftercare of persons convicted of an offence under Section 34 of the SAF Act. However, there is no similar provision for the Minister to make regulations in respect of persons convicted of an offence under Section 26 of the SAF Act. Clause 30 amends Section 58(1)(q) to include those convicted under Section 26 of the SAF Act for drug consumption.

59.   Since there is a separate rehabilitation regime implemented by MINDEF for drug abusers convicted under Section 26 of the SAF Act, such offenders would generally not be placed under CNB’s supervision. Nonetheless, this amendment will enable the making of regulations to provide CNB with the discretion to do so on a case-by-case basis if both CNB and MINDEF assess that the individual would benefit from undergoing CNB’s supervision regime in addition to MINDEF’s.

60.   Section 58(1)(q) is further amended to make clear that Minister’s powers to make regulations providing for the supervision and aftercare of persons convicted under Section 34 of the SAF Act relate only to those convicted under the section for drug consumption , and not for drug possession .

61.   We will also make amendments to broaden the scope of the recall provision under Section 31(1A) of the MDA. Currently, Section 31(1A) allows the Director of CNB to recall any former drug abuser to report for a urine test, throughout the person’s life, to ensure that the person is no longer a drug addict. Clause 21 amends the definition of “relevant person” and “relevant time” in Section 31 to include persons convicted under Section 26 of the SAF Act for the consumption of a controlled drug or psychoactive substance. We will also amend Section 31 so that a person who has been convicted under Section 34 of the SAF Act for an offence involving consumption of a controlled drug or psychoactive substance can be subjected to the recall provision, even if he had not previously undergone CNB’s supervision. In short, with these amendments, the Director of CNB will be able to recall and subject any person who has been convicted for drug consumption under the SAF Act to a urine test.

62.   Mr Speaker, please allow me to speak in Malay.

63.   Tuan Speaker, usulan pindaan bagi Akta Penyalahgunaan Dadah, atau MDA adalah satu langkah yang akan membantu kita mendahului lanskap dadah yang berubah.

64.   Terdapat dua kunci utama pindaan ini:

(a)   Pertama, kita akan mengubah pendekatan terhadap pengawalan bahan psikoaktif supaya kita dapat bertindak dengan lebih cepat untuk menanganinya.

(b)   Kedua, kita akan meningkatkan hukuman bagi pemilikan jumlah dadah terkawal terpilih, yang besar.

65.   Izinkan saya bercakap pertama sekali tentang Bahan Psikoaktif Baru, atau NPS.

66.   NPS merupakan cabaran kepada agensi penguatkuasa undang-undang di seluruh dunia, kerana sindiket dadah berupaya mengubah struktur molekul NPS dengan cepat untuk menghasilkan varian baru agar dapat mengelak daripada undang-undang kita.

67.   Buat masa ini, kita mengendalikan NPS dengan cara-cara yang berikut:

(a)   Apabila kita mengesan NPS, kita akan menyenaraikan struktur molekulnya dalam Jadual Kelima MDA. MDA membolehkan penyenaraian sedemikian selama setahun. Dalam tempoh satu tahun tersebut, Biro Narkotik Pusat, CNB, dapat merampas bahan untuk menghalang penyebarannya. CNB akan menggunakan masa ini untuk menjalankan konsultasi industri untuk menentukan sama ada bahan tersebut mempunyai kegunaan yang sah. Dalam tempoh setahun ini, CNB tidak boleh mengambil tindakan pendakwaan terhadap sesiapa yang mengedar bahan tersebut.

(b)   Jika tidak terdapat sebarang kegunaan yang sah, struktur molekul bahan ini akan disenaraikan dalam Jadual Pertama MDA sebagai dadah terkawal. Hanya bila tersenarai dalam Jadual Pertama, sesiapa yang didapati mengedar, menghasilkan, mengimport, mengeksport atau memiliki bahan NPS tersebut boleh didakwa.

68.   Kegagalan pendekatan yang ada buat masa ini, adalah kita sentiasa berkejar-kejaran dengan sindiket. Kemudahan dalam mengubah suai struktur molekul NPS untuk menghasilkan varian baru membolehkan pengedar mengatasi undang-undang kita dengan mudah, dengan cara bertukar kepada NPS yang tidak tersenarai. Sesungguhnya pembekal dadah diketahui menyesuaikan struktur molekul NPS berdasarkan apa yang belum dikawal melalui perundangan.

69.   Justeru, kami mengusulkan rangka perundangan yang baru untuk menangani ancaman NPS berdasarkan kapasitinya untuk menimbulkan kesan psikoaktif , dan bukan berdasarkan struktur molekulnya. Ini akan membolehkan CNB untuk mengambil tindakan undang-undang terhadap NPS yang berpotensi bahaya dan serius, dan tidak perlu menunggu sehingga struktur molekulnya dikenal pasti dan disenaraikan dalam MDA.

70.   Kunci kedua pindaan adalah hukuman yang ditingkatkan dan hukuman berperingkat bagi pemilikan jumlah besar dadah yang telah dikenal pasti.

71.   Rangka hukuman yang baru akan dikenakan kepada pemilikan morfin, heroin tulen, candu, kokain, ganja, resin ganja, campuran ganja dan metafetamin. Jenis-jenis dadah ini dinilai paling merbahaya dan memudaratkan di konteks Singapura.

72.   Dengan perubahan dalam perundangan kita, kita akan dapat mengukuhkan usaha kita dalam membanteras dadah supaya masyarakat kita bebas daripada dadah.

Other Constitutional Amendments

73.   In addition to the amendment related to treatment and rehabilitation for abusers of psychoactive substances, there are two other amendments to the Constitution made through the Constitution of the Republic of Singapore (Amendment) Bill.

MinLaw’s Amendments

74.   Technical amendments are made to Clauses (4) and (6)(b) of Article 46, replacing the word “leave” with “permission”. This is consistent with the same amendment made in other Acts by the Courts (Civil and Criminal Justice) Reform Act 2021. There is no change to the meaning of the provisions.

MOF’s Amendments

75.   Secondly, an amendment is proposed to introduce a legal mechanism to reduce the balance of the Contingencies Fund.

76.   DPM Lawrence Wong had, during the Budget Statement in February, said that the Government will introduce a mechanism to reduce the balance of the Contingencies Funds. The objective is to maintain discipline in how the Government manages its finances.

77.   Currently, there is a combined balance of $16 billion in the Contingencies Funds. In May 2020, at the height of the COVID-19 pandemic, MOF raised the Contingencies Funds balance from $3 billion to $16 billion to enable the Government to meet urgent and unforeseen spending needs arising from the fast-evolving pandemic. This was done by appropriating moneys from the Consolidated Fund, through the Second Supplementary Supply (FY2020) Bill.

78.   However, there is no legal mechanism today to effect a reduction of the balances to ensure fiscal discipline, as we return to normalcy.

79.   Clause 4 of the Bill amends Article 148C to permit the Finance Minister to reduce the balance of a Contingencies Fund, if he is satisfied, after proper inquiry, that the sum to be withdrawn from the Fund is in excess of what is likely necessary to meet an urgent and unforeseen need for expenditure.

80.   The Minister is also required to present to Parliament a report of every reduction, as soon as practicable after it is made. This will keep Members informed of the balance of the Contingencies Funds.

81.   The transfer of sums from a Contingencies Fund to the Consolidated or Development Fund does not provide the Government with additional budget for spending. The Government will need to run a balanced budget over its term. Any expenditure from the Consolidated Fund or Development Fund must be met by revenues raised and included in a supply bill that is presented to Parliament for approval. Such spending remains subject to the Reserves Protection Framework.

82.   As we return to normalcy following the COVID-19 pandemic, it is timely and prudent to reduce the Contingencies Funds balance. The amendments proposed in this Bill will provide the mechanism for us to do so, and ensures greater fiscal discipline while preserving the nimbleness to deal with urgent and unforeseen needs. After the Bill is passed, MOF intends to reduce the Contingencies Funds balance from $16 billion to $6 billion, and will submit a report to Parliament when that transfer has been made.

Conclusion

83.   Mr Speaker, I beg to move.