Economy & business — Topics

7 Oct 2019

MAS Guidelines and Regulations Governing Digital Advisors

Miss Cheng Li Hui questioned the need for stronger regulations to protect Singaporean investors, the adequacy of current MAS guidelines for managing technology and cyber risks by digital advisers, and the mechanisms for ensuring compliance.
Tharman Shanmugaratnam, speaking for the Prime Minister, explained that digital advisers are regulated under the Financial Advisers Act (FAA) and subject to the same rules as traditional firms, with MAS issuing specific guidelines for algorithm-based advice and outsourcing.
MAS requires digital advisers to test and monitor algorithms, ensure staff competency, and undergo audits, while also supervising them through offsite reviews and onsite inspections to address risks.
The framework is deemed effective and subject to continuous review, with digital advisers remaining responsible for outsourced activities and adhering to technology risk management guidelines.

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7 Oct 2019

Increase Places for Tertiary Studies and Postgraduate Programmes In View of Economic Slowdown

The Ministry of Education plans tertiary places based on long-term national manpower needs rather than short-term economic changes.
SkillsFuture Singapore offers modular Continuing Education and Training programmes across sectors to support workers during economic downturns.
If conditions worsen, the government will increase support for workers through these training programmes to help them gain relevant skills and transition to growth areas.

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7 Oct 2019

Employer-related Benefits for Singaporean and Foreign Employees According to Employee Skill Level

The Minister noted that while over 90% of employers provide medical benefits to local employees, fewer than 4% offer portable benefits like additional MediSave contributions, with the Tripartite Workgroup recommending a shift to more flexible options like MediSave top-ups.
The government has incentivized portable benefits through enhanced tax deductions and raised MediSave contribution limits, while noting that the ageing workforce and duplicate coverage under MediShield Life make traditional Group Hospitalisation schemes less sustainable.
For foreign employees, employers of Work Permit and S Pass holders must cover medical costs and provide insurance of $15,000 annually, whereas Employment Pass holders typically receive healthcare benefits as part of their package but are not legally required to.

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7 Oct 2019

Update on Plans for Action Community for Entrepreneurship

Kwek Hian Chuan Henry asked for an update on the Action Community for Entrepreneurship (ACE) programme and whether it needs to evolve.
Chan Chun Sing explained that ACE, established in 2003 and private sector-led since 2014, has supported over 2,000 start-ups and facilitated more than 200 mentorships in the last five years.
ACE helps start-ups access international markets and mentors first-time entrepreneurs through Enterprise Singapore’s Startup SG Founder programme.
To invigorate the startup ecosystem, ACE launched the Innovation Enablers Network in August to connect corporates and start-ups for collaboration.
The initiative aims to provide start-ups with new resources and track records while offering corporates access to innovative solutions.

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7 Oct 2019

Impact of Increase in Public Transport Fares on Amount of Vouchers Given Out and on Financial Sustainability of Public Transport Operators

Miss Cheng Li Hui questioned whether the Ministry would increase public transport voucher quantum in light of a proposed 7% fare hike and how financial sustainability of operators would be maintained without degrading service.
Khaw Boon Wan explained that fare adjustments were long deferred, causing losses for operators and increased government subsidies, which burden taxpayers and divert funds from other national priorities.
He emphasized the need to set fares correctly to prevent service degradation and ensure operators can sustain operations and worker livelihoods.
The Public Transport Council aims to keep fares affordable, with concessions for students and seniors, and the government provides vouchers to cushion impacts on lower-income households.

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7 Oct 2019

Selection Criteria Applied to SMEs for Scale-up SG Initiative

The Scale-up SG initiative is designed to support high-growth local SMEs with a 2.5-year programme focusing on management development, innovation, and market expansion.
Selection criteria include the company's growth track record, commitment from founders and CEOs, potential to create jobs and economic spin-offs for Singapore, and a focus on maintaining headquarters and management functions locally.
Since its launch in 2019, the programme has supported 25 companies across two cohorts, with plans to include 40 to 90 more companies over the next two years through four to six new cohorts.

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7 Oct 2019

Income Tax (Amendment) Bill

The Income Tax (Amendment) Bill introduces a 50% personal income tax rebate capped at $200 for YA 2019, lapses the Not Ordinarily Resident scheme after YA 2020, and extends tax concessions for Qualifying Funds until December 2024.
The Bill eases compliance for self-employed commission agents by allowing a fixed 25% deemed expense ratio and makes tax court proceedings public by default, discontinuing the redaction of taxpayer names from January 2020.
Nominated Member Anthea Ong supported the Bill but urged updating outdated and derogatory definitions of disability in the Income Tax Act, aligning them with modern standards and Singapore’s commitments under the UN Convention on the Rights of Persons with Disabilities.
Ong also suggested improvements to the Business and IPC Partnership Scheme, such as simplifying administration, using fixed man-hour rates, and including food donations for tax deductions, while proposing tax incentives for impact investors to grow social enterprises.
The Second Minister for Finance responded that enhancements to the Business and IPC Partnership Scheme are being implemented, will consider further suggestions, and agreed to review outdated disability terminology in the next Income Tax Act review.

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7 Oct 2019

Goods and Services Tax (Amendment) Bill

The Second Minister for Finance, Mr Lawrence Wong, presented the Goods and Services Tax (Amendment) Bill to amend the Goods and Services Tax Act, with the recommendation of the President signified.
The bill was read for the first time and scheduled for a second reading in the next available sitting of Parliament, with instructions to print the bill.
The debate centered on the procedural advancement of the bill to modify the existing tax framework, following parliamentary protocols.

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7 Oct 2019

Hike in Childcare Fees Following Increase in Government’s Childcare Subsidy

Dr Lim Wee Kiak asked how many childcare operators raised fees, the increase quantum, and expected savings after subsidy enhancements, to which Minister Desmond Lee responded that 330 centres (one in five) will raise fees in 2020, with a median increase of 5% or about $35, but enhanced subsidies will lower costs for most families.
Mr Dennis Tan Lip Fong sought assistance for parents not benefiting from the subsidy increase, and Minister Lee clarified that enhanced Additional Subsidies apply to all eligible families regardless of childcare centre type, with financial aid available for low-income or non-working mothers meeting criteria.
Minister Lee noted that fee increases are annual occurrences due to operational costs, but government-supported pre-schools will grow to 80% of places by 2025 with lower fee caps, and subsidies will more than double annual government spending on preschools.
Dr Lim raised concerns about middle-income families with multiple children and non-working mothers, and Minister Lee explained that per capita income assessments and special approvals for caregiving needs ensure targeted support without universal subsidy equalization.

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7 Oct 2019

Efforts to Reduce Greenhouse Emissions by Industries in Singapore

Anthea Ong questioned the government's plans to reduce industrial greenhouse gas emissions, the annual import and refinement of fossil fuels, how these relate to Singapore's carbon emissions, the expected percentage increase from refinery expansions, and the strategic support for industries to meet climate demands.
Dr. Koh Poh Koon responded that Singapore imports large volumes of fossil fuels, with a significant portion refined and exported, and that industries account for most of the country's emissions; the government has enhanced energy efficiency schemes, grants, and regulations to help industries reduce emissions and meet Paris Agreement targets.
When asked about the specific percentage increase in emissions from refinery expansions, Dr. Koh noted this information is commercially sensitive but reaffirmed the commitment to reduce emissions intensity and peak emissions by 2030.
Anthea Ong further inquired if Singapore's global carbon emissions contribution (0.11%) includes refinery emissions, and Dr. Koh confirmed it encompasses the country's total emissions.

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7 Oct 2019

Impact of Attack at Saudi Arabia Oil Supply Facilities on Singapore’s Economy

The attack on Saudi Arabia's oil facilities caused a temporary surge in Brent crude prices, but they quickly stabilized and Singapore's economy is expected to feel only a limited impact due to sufficient oil supply and diversified sources.
The government highlighted measures to ensure energy security, including diversifying crude oil and gas imports and promoting competition in the electricity market to keep prices competitive.
Electricity prices are linked to global energy trends, but initiatives like the Open Electricity Market have helped households save on bills, with around 18–20% of households choosing alternative providers.
Officials emphasized that Singapore’s oil and gas supply chains are robust, with sourcing from multiple regions to mitigate risks from Middle Eastern disruptions.
The debate underscored the importance of ongoing energy security strategies, given Singapore's near-total reliance on imported energy and geopolitical tensions in key supply regions.

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4 Sep 2019

Resource Sustainability Bill

The Resource Sustainability Bill introduces a mandatory framework targeting three key waste streams—e-waste, packaging waste, and food waste—by requiring producers and large businesses to register, report, and finance collection and recycling efforts, including an Extended Producer Responsibility scheme for e-waste by 2021 and packaging reporting from 2020.
The bill aims to build climate, resource, and economic resilience by shifting to a circular economy, with projections that improved recycling could yield net benefits of $40 million from e-waste alone and extend Semakau Landfill's lifespan beyond 2035.
Speakers supported the bill but raised concerns about potential cost increases for businesses and consumers, the need for clearer targets and incentives for SMEs, and challenges in implementing food waste segregation in buildings like hawker centres and schools.
Additional points highlighted include the importance of public education, nudging consumer behavior to reduce convenience-driven waste, addressing transnational waste flows, and ensuring accountability for exported recyclables to avoid environmental harm.
Suggestions were made to strengthen the bill with measures such as banning single-use plastics, promoting food redistribution via Good Samaritan laws, and providing grants or tax breaks to support businesses in transitioning to sustainable practices.

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4 Sep 2019

Conditions in Government Contracts that Encourage Environmental, Social and Governance Practices

The Government's procurement process incorporates ESG criteria, such as requiring green certification for ICT equipment and venues, and mandating Green Mark Platinum standards for new public buildings.
National frameworks for tracking ESG performance include mandatory energy and water usage reporting for large consumers, sustainability reporting for listed companies, and ESG criteria embedded in business excellence awards.
Incentives for ESG practices include green financing initiatives, tax deductions for employee volunteerism, grants for social enterprises, and wage offsets for inclusive hiring of persons with disabilities.

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4 Sep 2019

Nurturing Local Start-ups and Talent in Electronic Game Development and E-sports

The government is supporting local game and e-sports start-ups through initiatives like Startup SG and PIXEL, while also fostering talent via courses at institutions like DigiPen and by attracting international studios.
Officials emphasized that market mechanisms should guide commercial decisions, such as publisher agreements, and that public funds should address market failures rather than pick winners.
Concerns were raised about post-graduate training avenues and gaming addiction, with the government highlighting on-the-job learning with leading companies and prevention-focused efforts to manage gaming disorders.

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3 Sep 2019

Measures to Reduce Overly Conservative Budgeting

Leon Perera asked whether measures are being taken to reduce overly conservative budgeting that understates eventual real surpluses on Government accounts.
Heng Swee Keat explained that the Ministry of Finance tracks budget accuracy through Key Performance Indicators, with average forecast variances under 3% for revenues and 2% for expenditures from FY2014 to FY2018, comparable to other economies.
He noted that significant variances are often due to economic volatility, citing examples like unexpected surpluses from Statutory Board Contributions and Stamp Duties in FY2017.
When surpluses arise, they are used for public needs such as the Rail Infrastructure Fund and one-off bonuses like the SG Bonus, reflecting a prudent and citizen-centric approach.
The government plans revenues to meet future needs, invests surpluses for long-term returns, and channels up to half of these returns into budgets for areas like education, healthcare, and security.

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3 Sep 2019

Plans to Improve Regulation Regime of Credit Rating Agencies in Singapore to EU Equivalent Status

Leon Perera asked if there are plans to improve Singapore's credit rating agency regulation to re-achieve equivalence status with the European Union.
The Prime Minister explained that the EU's decision only affects credit rating agencies and does not impact other financial services, with Singapore-based agencies still able to operate in the EU via the endorsement approach.
Singapore's regulatory regime for credit rating agencies follows international IOSCO standards but is considered less prescriptive than EU rules, leading to a principles-based approach.
The Monetary Authority of Singapore will continue engaging the EU to maintain market access for financial institutions across various services, as Singapore already holds equivalence in other areas like benchmarks regulation.

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3 Sep 2019

Requirement for Advertisements for Car Loans to Include Effective Interest Rate Calculation

Ong Teng Koon proposed that car loan advertisements should use the Effective Interest Rate (EIR) method instead of the Flat Rate method for greater transparency.
Chan Chun Sing noted that lenders on hire-purchase agreements are already required to disclose the EIR under the Hire Purchase Act, and banks are encouraged to include EIR in advertisements per banking guidelines.
The government emphasized the importance of consumers carefully reviewing loan terms and assessing their financial commitments before agreeing to any car loan.

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3 Sep 2019

Variation of Existing Outsourced Services Contracts to Factor in Cost Increases from Changes in CPF Contribution Rates

Mr Zainal Sapari asked whether procurement departments can vary existing outsourced service contracts to account for cost increases from policy changes like CPF contribution rate adjustments.
Deputy Prime Minister Heng Swee Keat explained that CPF changes for workers over 55 will be phased in gradually from 2021 over 10 years, giving contractors advance notice to price bids accordingly.
The government plans a support package for businesses to adjust to these changes, with details to be announced in the next Budget, reflecting a policy of providing sufficient notice for companies to plan ahead.
Given historical wage growth of over 4% annually, most companies are expected to manage the planned 0.5–1% increase in employers’ CPF contributions within overall wage increases.

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3 Sep 2019

Review of Government Electronic Business Policy to Encourage Growth of Nascent SMEs

The government highlighted that over 80% of procurement opportunities are at Quotation level, which do not require GRA registration, making it easier for nascent SMEs to participate, and the quotation limit was recently raised from $70,000 to $90,000.
To ease GRA requirements, the government now allows SMEs with turnover under $5 million to submit unaudited financial statements certified by a director, benefiting about 80% of registered suppliers.
The government emphasized that financial standing is only one factor in procurement evaluation, alongside quality, innovation, and capability, and that SMEs have won over 80% of contracts in the past two years.
The government committed to ongoing policy reviews to ensure procurement remains accessible to SMEs, though it did not directly agree to expand SME eligibility as requested in the question.

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3 Sep 2019

Variable Capital Companies (Miscellaneous Amendments) Bill

The Bill amends tax laws and the VCC Act to provide a clear framework for Variable Capital Companies, treating them as companies for tax purposes while allowing tax exemptions and benefits for fund investment income.
The amendments align VCC insolvency rules with the new Insolvency, Restructuring and Dissolution Act and make technical clarifications, such as requiring at least one member for a VCC.
The VCC structure is expected to boost Singapore's fund management hub by attracting more funds and creating business opportunities, with positive industry reception and promotional efforts underway.
The Minister confirmed the VCC framework will be operational by end of year, with over 1,000 new jobs projected in the first two years, and noted ongoing engagement with industry but no immediate plans for VCC-related curriculum in tertiary education.

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