Economy & business — Topics

5 Aug 2019

Impact of US-China Trade Tensions on Singapore-owned Companies Operating in China or US

Minister Chan Chun Sing reported that Singapore-owned companies in the US or China have not been significantly affected by the trade tensions, with responses mixed between pausing investments and diversifying regions.
The slowdown is also attributed to the global electronics cycle downturn, impacting sectors like wholesale trade and precision engineering, with the government monitoring and ready to support companies.
Long-term economic transformation is prioritized through Industry Transformation Maps, digital and technology investments, and worker productivity via SkillsFuture to navigate current challenges.

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5 Aug 2019

Impact of Tension in Straits of Hormuz on Singapore's Oil Trade and Electricity Tariffs

Saktiandi Supaat questioned the potential impact of tensions in the Straits of Hormuz on Singapore's oil trade and the risk of sudden electricity tariff spikes for households.
Chan Chun Sing noted the Strait's critical role in global oil transit and that while emergency stocks exist, tensions could pressure oil prices, affecting Singapore's energy-import-dependent economy.
He emphasized Singapore promotes competitive electricity markets, like the Open Electricity Market, to offer households lower prices, with consumers reporting savings of 20-30%.
The government avoids upfront electricity subsidies to prevent over-consumption, instead providing targeted support like GST Voucher–U-Save for lower- and middle-income households.

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5 Aug 2019

Take-up Rate for SME Transformation Programmes

Minister Chan Chun Sing provided take-up rates for SME transformation programmes, noting that about 10,000 SMEs have benefited from the SMEs Go Digital programme, 5,000 companies from the Market Readiness Assistance programme, and around 5,370 companies from the Productivity Solutions Grant across 6,400 projects.
He emphasized that grants are tools to enable capability building and competitiveness, urging companies to focus on clear transformation plans rather than just seeking grants.
The minister highlighted the importance of linking enterprise transformation with worker training, mentioning the SkillsFuture Training Subsidy of up to $10,000 per company to support skills upgrading alongside business transformation.

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5 Aug 2019

Progress of Industry Transformation Map for Construction Industry

The Construction Industry Transformation Map (ITM), launched in 2017, is progressing well across three key areas: Design for Manufacturing and Assembly (DfMA), Integrated Digital Delivery (IDD), and Green Buildings.
DfMA adoption is at 22% in 2018 with a target of 40% by 2020, while IDD has 26 demonstration projects aiming for 40–60 projects by 2020, and green buildings cover 40% of gross floor area with a 2030 target of 80%.
About 40,000 workers have been trained in transformation areas, staying on track to meet the 2020 target of 47,000, and site productivity has improved by 15% towards the 20% ITM target.

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5 Aug 2019

Inflation Adjustments for Payouts Under Silver Support Scheme

Ms Foo Mee Har asked whether the Silver Support Scheme payouts will be adjusted for inflation since its 2014 launch and to consider a recent NUS study on seniors' basic needs.
Mrs Josephine Teo explained the scheme's purpose to supplement retirement income for low-income elderly with little family support, noting over 180,000 have received about $1.3 billion since 2016.
The Ministry of Manpower is reviewing the scheme and will take inflation into account, but emphasised that retirement needs are met through multiple sources including CPF, savings, and other government support.
The government highlighted that scheme payouts are designed to be meaningful and fiscally sustainable, considering findings from various sources.

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5 Aug 2019

Comparison between Rates of Return for CPF Members' Self-directed Investments and for Pension Funds Invested by Professionals

The CPF Investment Scheme (CPFIS) lets members invest their CPF savings in a variety of products, but it is designed for those who are financially knowledgeable, have time to manage investments, and are willing to take on risk.
The performance of CPFIS investors varies widely with market conditions and investment choices, and they are primarily compared to the CPF Ordinary Account’s risk-free interest rate of 2.5% per annum, not to external pension funds.
In FY2018, only 38% of CPFIS-OA investors earned returns above the 2.5% OA rate, compared to 74% in the previous year, showing that returns are volatile and not consistently better than the risk-free option.
Comparing CPFIS returns to professional pension funds like those in Australia or the US is deemed not meaningful due to differences in objectives and investment strategies between these systems.

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5 Aug 2019

Variable Capital Companies (Miscellaneous Amendments) Bill

The bill amends the Goods and Services Tax Act, Income Tax Act, Stamp Duties Act, Variable Capital Companies Act 2018, and other related legislation to support variable capital companies and their sub-funds.
It aligns the Variable Capital Companies Act with the Insolvency, Restructuring and Dissolution Act 2018, and includes other necessary legal updates.
The Second Minister for Finance presented the bill, which was read the first time and will be read a second time at the next sitting of Parliament.

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5 Aug 2019

Rationale for Inability to Recover Overpayment Amount for Contract Variations in National Gallery Development Project

The Ministry explained that the $13 million was a waiver of penalties for delays, not an overpayment, and was part of contract variations necessary for a complex project involving two monuments.
The Minister clarified that the Auditor-General’s finding about recovering the amount was due to it being too late, not fraud, and the Ministry’s audit found no need for major recoveries.
The National Gallery Singapore is enhancing its financial and procurement processes following the audit, with the Ministry working to implement recommendations from the Auditor-General.

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5 Aug 2019

Trend for Average Annual Government Spending on Foreign Students over Past 10 Years

The Minister confirmed that government spending on foreign student scholarships and tuition grants has fallen by about 50% over the past decade, with scholarships at approximately $130 million and tuition grants at about $108 million annually, noting these figures represent the worth to students rather than the net cost to the education system.
The debate highlighted that the education budget, around $13 billion yearly, is primarily for local students, with financial aid restricted to Singaporeans, and that international students are admitted only after local students meeting standards are accommodated, ensuring no displacement.
The Minister emphasized the benefits of international students, such as global networks and talent retention, and compared Singapore’s practice to international norms, while the MP argued for calibrating spending based on proven economic multipliers and reciprocity, keeping an open mind on the current level.

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8 Jul 2019

Total Government Spending on Scholarships and Other Financial Aid to Foreign Students in Singapore Schools and Universities in Past Five Years

Ong Ye Kung responded that the total government spending on scholarships and other financial aid for foreign students in Singapore schools and universities is about $130 million annually, which represents one percent of the Ministry of Education's $13 billion budget.
He noted that financial assistance and bursaries are exclusively for Singapore Citizens, while scholarships for international students are limited in number, with strict academic monitoring and requirements for scholarship holders to work in Singapore for up to six years post-graduation.
Ong Ye Kung emphasized that such support for international students is a global norm and that Singaporeans also benefit from foreign sponsorships for their studies abroad.

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8 Jul 2019

Amount Budgeted for Cost of Home Improvement Programme for Hougang SMC for Completed and Upcoming Works

The budget for the Home Improvement Programme (HIP) in Hougang SMC for selected flats is approximately $160 million.
Flats built between 1987 and 1997 will be selected for HIP starting next year.
Town Councils will be invited to nominate these flats for the enhanced HIP announced in August 2018.

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8 Jul 2019

Impact on Singapore's Economy from US Treasury Adding Singapore to Watch-list of Currency Manipulators

The US Treasury included Singapore in its Monitoring List due to its material current account surplus and foreign exchange practices, but Singapore is not labelled a currency manipulator.
The Monetary Authority of Singapore clarified that its exchange-rate based monetary policy is unaffected and is designed to ensure price stability, not to make exports more competitive.
MAS is engaging constructively with the US Treasury to explain Singapore’s policy framework, with no expected negative impact on the economy or policy operations.

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8 Jul 2019

Managing Operators and Protecting the Public in Potential Shake-up in Banking System

Miss Cheryl Chan inquired about regulatory changes to manage potential banking system disruptions from Facebook's Libra cryptocurrency, focusing on market competitiveness and data privacy.
Tharman Shanmugaratnam noted that Libra aims to lower payment costs and include the unbanked but is still in early development, with details pending on its implementation and governance.
He stated that Singapore’s existing Payment Services Act and Personal Data Protection Act already cover digital payment tokens and data privacy, and MAS will assess Libra’s benefits and risks as details emerge.

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8 Jul 2019

Terms of Operations for Virtual Banks

MAS will issue up to five digital bank licences, including two digital full bank licences for retail deposits and three digital wholesale bank licences for SMEs, to foster innovation while maintaining stability.
Digital banks will face the same prudential requirements as traditional banks, including capital, liquidity, and consumer lending rules, to ensure a level playing field and protect depositors.
MAS will phase in activities for digital full banks with deposit caps initially, and may impose additional supervisory measures to prevent unsustainable competition.
Lower operational costs for digital banks could lead to benefits such as fee-free accounts and better credit access for underserved segments, while encouraging traditional banks to enhance their digital offerings.
The regulatory framework aims to balance innovation with stability, though consumers remain responsible for understanding deposit insurance limits and bank risks.

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8 Jul 2019

Singapore's Efforts in ASEAN to Lead Green Economy and Counter Climate Change

Singapore has been actively leading ASEAN's climate change initiatives, including chairing the ASEAN Working Group on Climate Change and launching the Climate Action Package to provide training and capacity building for member states.
The country has promoted green financing through measures like the Sustainable Bond Grant Scheme, which has facilitated over SGD 6 billion in green bonds, and works closely with the Monetary Authority of Singapore to enhance sustainable financing ecosystems.
Singapore advocates for a collective approach involving governments, financial sectors, and businesses to mobilize private capital and support the region's transition to a low-carbon, climate-resilient economy.

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8 Jul 2019

Payment of CPF Contributions by Companies that Employ Interns from Private Universities

Assoc Prof Daniel Goh Pei Siong questioned why employers must pay CPF contributions for interns from private universities but not for those from public universities.
Mrs Josephine Teo explained that CPF contributions are generally mandatory for all local employees, including interns, but exemptions are given for interns in MOE-subsidized programs to prioritize internship opportunities aligned with national objectives.
The exemption applies to both public and private institutions if the intern’s program is subsidized by MOE and the training is institution-approved, with details available on the MOE website.
Employers may voluntarily choose to make CPF contributions even if not required.

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8 Jul 2019

Inflation in Premiums for Private Hospitalisation Insurance Plans

Over the past five years, private hospitalisation insurance premiums have risen by an average of 7% annually, with sharper increases for IP riders that previously had zero co-payment, driven by higher insurance claims.
The Ministry of Health has introduced measures to curb over-charging and over-consumption, including care and drug guidance, fee benchmarks for private providers, and requiring minimum co-payment for new IP riders to ensure stakeholder responsibility.
These initiatives aim to promote cost-effective care, informed decision-making by patients and payers, and sustainable insurance design, with insurers also enhancing claims scrutiny and management.

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8 Jul 2019

Adoption of Fair Tenancy Framework by Landlords in Retail Sector

Assoc Prof Daniel Goh Pei Siong inquired about the adoption of the Fair Tenancy Framework in the retail sector and government promotion efforts.
The Fair Tenancy Framework was created by the Singapore Business Federation in 2015 to guide transparent and fair lease negotiations, but adoption statistics are not collected.
The government supports the framework, with agencies like HDB aligned to its principles and more retail rent data released to aid SMEs.

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8 Jul 2019

Efforts at Encouraging Companies to be More Inclusive to Individuals with Autism

The Government provides up to 16% wage subsidy through the Special Employment Credit for employers hiring persons with disabilities, including those with autism, with an additional 6% for those above age 67.
The Open Door Programme offers job placement and support services for persons with disabilities and their employers, while the Career Trial allows for job fit assessments with training allowances during the trial period.
A tripartite Workgroup led by the Ministry of Social and Family Development, the Autism Resource Centre, and other partners is exploring ways to better support persons with disabilities in gaining employment amid economic changes.

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8 Jul 2019

Impact of Protracted US-China Trade War on Job Prospects for Recent Graduates

Mrs Josephine Teo acknowledged that the US-China trade war has created economic uncertainties but noted that the labour market remained stable in early 2019, with youth employment rates high at around 70% and unemployment within historical norms.
She highlighted that government agencies are monitoring the situation and are prepared to enhance employment support through initiatives like Adapt & Grow, MySkillsFuture, and the Career Starter Programme to assist recent graduates.
Singaporean youths were advised to use available career guidance resources, explore different sectors, and consider work-study pathways like the SkillsFuture Earn and Learn Programme to build relevant skills and remain adaptable.
The Minister encouraged job seekers to approach services like WSG's Careers Connect or NTUC's e2i for coaching, workshops, and job matching, emphasizing the importance of being open, agile, and relevant in the job market.

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