Slapping an environment tax on the Singapore Airlines (SIA) in the current climate would be akin to hurling stones at someone who has fallen into a well.

Transport Minister Ong Ye Kung used the Chinese phrase "落井下石", when describing the potential effect of such a tax during a debate in Parliament on Oct. 6.

Ong had given a Ministerial Statement on the plan to reopen Singapore's borders and revive air travel, and in his speech, referred to Workers' Party Member of Parliament Jamus Lim's suggestion of a per-flight environmental tax for SIA's proposed "flights to nowhere."

He said:

"Whichever way SIA had decided, MOT would always try our best to support our national carrier in times like this. But what I will not contemplate is to impose on them an environment tax at this time, as Associate Professor Jamus Lim has suggested, because that will worsen the crisis for SIA."

SIA has already decided not to pursue the idea.

"Not the time" for environment tax

In a follow-up question, Lim asked Ong to "clarify his thinking", explaining that an environment tax could be borne either by the consumer or the producer, depending on the price elasticity of the product on offer (the flight), and SIA could still find it economically viable if it is able to pass on the cost to the consumer.

In reply, Ong said this could have been considered, had it not been for the current pandemic and the dire situation SIA is in.

He pointed out that it was not a matter of passing on the cost to the customer, because there are practically no customers at the moment, citing a passenger volume of just 1.5 per cent.

Ong added that if it were not for SIA's recapitalisation exercise, the entire company would have gone under.

As SIA needs to preserve as much cash as it can at the moment, "this is really not the time" to talk about an environment tax, said Ong.

He then used the Chinese phrase to illustrate his point:

"I think there's a Chinese saying, 落井下石. I would have made the situation much worse for SIA. It means someone fell into the well and you throw a stone to make the situation worse. So let's be very careful about that. When things resume, the international conversation will go on (as to) whether there should be an environment tax."

Further clarifications by Lim online

Later in the day on Oct. 6, Lim shared a Facebook post explaining his position further.

Lim said that he is proud of SIA and wants the industry to survive, and his suggestion of an environment tax would be borne by wealthier customers who would be more willing to take a proposed "flight to nowhere."

Lim added that he was hoping to "spur some creative thinking about how we can help ensure the future viability of our national airline, without compromising the need to pay attention to the environment, too".

He said that "such creative thinking is necessary to ensure that we don’t spend our hard-earned reserves in an unwise fashion".

On Oct. 7, Home Affairs and Law Minister K Shanmugam shared a video of the exchange between Ong and Lim, reiterating why Lim's environment tax "is not a great idea right now, when SIA staff jobs are at stake".

You can read Lim's full post at this link and a Twitter thread with the same message below:

Today in Parliament, I posed a question about environmental taxes on #SIA’s proposed (now abandoned) “flights to nowhere.” In his response, Transport Minister Ong pushed back, saying that it was inappropriate to impose additional costs on SIA, even as it struggles financially.

— Jamus Lim (@jamuslim) October 6, 2020

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Top image from CNA video.