Economy & business — Topics

16 Aug 2016

Impact of GIC and Temasek Holdings' Lower Returns on Government's Budget and Long-term Programmes

Liang Eng Hwa and Foo Mee Har questioned whether lower long-term returns from GIC and Temasek Holdings would reduce the Net Investment Returns Contribution (NIRC) and impact the government's ability to balance the budget and fund long-term programmes.
Tharman Shanmugaratnam confirmed that a sustained decline in the investment environment could lead to lower expected long-term rates and thus a reduced NIRC, necessitating a review of both revenues and expenditures to ensure fiscal sustainability.
He emphasized the need for continued prudence in spending, value-for-money in programmes, and productivity improvements in government services, while noting that operating revenues (taxes and fees) remain the primary revenue source, accounting for over 80% of total revenues.
Tharman highlighted that sustainable finances depend on a healthy and growing economy, referencing the Committee on the Future Economy and Industry Transformation Programme as key to driving revenue growth and job creation.
The government plans to maintain a progressive and fair system of taxes and benefits while ensuring economic competitiveness, even as it adapts to potential long-term changes in investment returns.

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16 Aug 2016

Info-communications Media Development Authority Bill

The debate highlighted the need for IMDA to balance light-touch regulation with promotion of innovation in the converged infocomm and media sector, with members urging representation of industry practitioners on its board and support for local content creators.
Concerns were raised about potential conflicts between regulatory and developmental roles, with calls for transparent procedures in content classification and appeals to protect creative expression while upholding community values.
Speakers emphasized the importance of public-private partnerships for non-commercial content of national interest, such as live broadcasts of the Olympics, and suggested IMDA could facilitate such initiatives.
The discussion included recommendations to improve talent development, including harmonizing career tracks for non-degree holders and establishing a guild to support freelance media professionals.
The Minister affirmed IMDA’s dual focus on regulation and industry growth, outlined initiatives like the TechSkills Accelerator, and committed to addressing issues such as content transparency and consumer protection.

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16 Aug 2016

Info-communications Media Development Authority Bill

The Minister for Communications and Information introduced the Info-communications Media Development Authority (IMDA) Bill to merge the Infocomm Development Authority (IDA) and Media Development Authority (MDA) into a single converged regulator, citing the rapid convergence of infocomm and media sectors as the main driver for this restructuring.
The Bill aims to establish IMDA with the same functions and powers as IDA and MDA, focusing on industry development, consumer protection, content regulation, and personal data protection, while streamlining regulations for businesses in a digitally converged landscape.
Supporters, such as Zaqy Mohamad, endorsed the restructuring as timely to address blurred regulatory lines in sectors like telecommunications and media, but raised concerns about simplifying content regulations and ensuring affordable access to content like sports broadcasts.
Key priorities for IMDA include building a skilled Singaporean talent pool for the infocomm media sector, enhancing innovation facilities, and leveraging synergies across infocomm and media to drive economic growth and create new opportunities for businesses and consumers.
The Bill includes transitional arrangements to repeal existing acts, transfer personnel and undertakings, and incorporate the Personal Data Protection Commission under IMDA, ensuring regulatory continuity while promoting a more integrated and competitive infocomm media ecosystem.

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16 Aug 2016

Singapore Workforce Development Agency (Amendment) Bill

The Bill restructures the Workforce Development Agency into Workforce Singapore (WSG) to better align workforce development with industry transformation, focusing on lifelong career support, workforce inclusiveness, and creating quality jobs for Singaporeans.
Speakers emphasized the need to address mismatches in skills, jobs, and expectations, particularly for professionals, managers, executives, and technicians (PMETs), and called for enhanced programs like Professional Conversion Programmes and Career Support Programme.
Debates highlighted the importance of partnerships between government, businesses, unions, and workers, as well as the need for flexible work arrangements, support for SMEs, and ensuring a strong Singaporean core in the workforce.

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16 Aug 2016

Safeguarding Public Monies Given to Town Councils

The Ministry of National Development expressed deep concern over Aljunied-Hougang Town Council's pervasive financial control failures, citing 185 issues identified by KPMG and a lack of progress in remediation, with a full review of past payments ordered by the Court of Appeal due soon.
Parliament discussed amendments to the Town Councils Act to strengthen oversight, including penalties for non-cooperation and clearer powers to compel information, with the review aiming for completion by year-end.
The debate highlighted ongoing disputes between town councils over appointing auditors and accessing documents, with the Ministry emphasizing the need for accountability and transparency in handling public funds.

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15 Aug 2016

Rationale for Personal Income Tax Relief Cap

The personal income tax relief cap was introduced to ensure the tax system remains progressive and fair, as the combined effect of 15 different tax reliefs could unduly reduce taxable income for high-income individuals.
The $80,000 cap is designed to affect only 1% of tax residents, with most working mothers and those claiming the Working Mother's Child Relief expected to remain unaffected and continue claiming full relief.
Beyond tax reliefs, the government provides a comprehensive suite of measures to support families, including cash gifts, savings schemes, childcare leave, and parental leave, to help with marriage and parenthood aspirations.

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15 Aug 2016

Reason for Increase in Difference between Corporate Tax Rate and Rate of Effective Tax Payable between FY2014 and FY2015

Dennis Tan asked the Minister for Finance why the gap between Singapore's 17% corporate tax rate and the effective tax paid widened in FY2015 and why this gap differs by industry sector.
The Minister explained that effective tax rates for FY2015 are not yet available because corporate tax returns for that year are due by 30 November 2016.
He noted that effective tax rates are influenced by factors like corporate tax rebates, foreign tax credits, and temporary tax incentives for specific activities, which can vary by company and year.
The Minister stated that effective tax rates typically differ by one to two percentage points across industries due to these varying factors.
He emphasized that chargeable income is derived after adjusting accounting profits for non-taxable gains, carried-forward losses, and allowable deductions, which also affects the effective tax rate.

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15 Aug 2016

Media Authority's Due Diligence and Oversight Processes in Provision of Financial Support

Leon Perera questioned MDA's due diligence and oversight in providing $15 million in financial support to RGM Entertainment and RGM Group in 2010 and 2011, asking about processes, lapses, and subsequent improvements.
MDA checked RGM's track record, projected returns, and co-investment partners before investing, but in 2011, it discovered difficulties in recovering funds and suspected wrongdoing, leading to reports to CAD and legal action.
CAD found RGM's principal forged bank statements to hide missing funds, resulting in criminal charges, a jail sentence, and the winding up of RGM entities.
Following the incident, MDA discontinued equity co-investments due to complexity and risk, shifting to a grant-based model with disbursement tied to project deliverables and enhanced governance measures.
MDA strengthened oversight by tightening grant criteria, implementing an online grant management system, commissioning direct project audits, and establishing whistle-blowing hotlines for reporting potential wrongdoing.

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15 Aug 2016

Use of CPF Ordinary Account by HDB Lessees to Service Home Loans

Lim Swee Say explained that the Valuation Limit (VL) policy encourages prudent property purchases by restricting CPF Ordinary Account use beyond the VL, though flexibility is allowed on appeal for those facing difficulties in cash repayment.
Currently, over 500,000 HDB lessees use CPF for home loans, with about 15,000 having reached their VL and 60 having reached the Withdrawal Limit (WL), while 2,500 cannot use CPF beyond the VL due to insufficient Basic Retirement Sum.
In 2014 and 2015, the CPF Board received around 6,000 appeals to use CPF beyond the VL, with the majority from single property owners being successful, though the general emphasis remains on prudent housing decisions to secure retirement savings.

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15 Aug 2016

Sole Distributorship Agreements under Competition Act

Dr Tan Wu Meng asked if sole distributorship agreements are considered anti-competitive under the Competition Act and what redress is available.
The Minister clarified that such vertical agreements are not inherently anti-competitive but could be if a distributor abuses market power to hinder competition.
Each case is assessed individually by the Competition Commission of Singapore based on specific facts to determine any infringement.
If infringement is found, the Commission can impose financial penalties and issue directives to amend or terminate the agreement.

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15 Aug 2016

Measures to Require Banks to Upgrade Branch Security Protocols

The MAS expects banks to conduct thorough security threat assessments and implement appropriate mitigation measures for all branches, including ensuring CCTV and panic alarms are functional and deploying armed guards for high-risk locations.
Following the Holland Village robbery, MAS and the Singapore Police Force have reminded banks to enhance security protocols and prioritize employee and customer safety, with staff trained to call police only when safe.
MAS is collaborating with the police and the Association of Banks in Singapore to develop enhanced physical security best practices, incorporating lessons from the recent incident.

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15 Aug 2016

Pay-as-you-bid System for COEs

Zainal Sapari requested average COE prices from the last three bidding exercises and the rationale for not adopting a pay-as-you-bid system.
Khaw Boon Wan provided average winning COE prices for various vehicle categories and noted that the highest bids, after removing outliers, were higher but most successful bids clustered within 10% of the final strike price.
The Minister explained that a pay-as-you-bid system was reviewed in 2013 and economists advised it may not lower COE prices, could encourage strategic gaming, and give market insiders an advantage.
The current system is considered simpler and fairer, as it encourages bidders to submit a single bid reflecting their true willingness to pay.

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15 Aug 2016

Review of Rice Stockpile Scheme Given Extreme Weather Changes

Chen Show Mao questioned whether the Rice Stockpile Scheme and Singapore’s Food Security Roadmap can withstand extreme weather events like the 2015–2016 El Niño, which affected crop outputs in Southeast and South Asia.
Lawrence Wong highlighted import source diversification as a core strategy, citing how traders switched to alternative sources like China to stabilize supply and prices when weather affected Malaysia.
Local production through controlled-environment farming, supported by the Agri-Food and Veterinary Authority, complements diversification and aims to boost self-reliance in key food items.
The government maintains a strategic rice stockpile, requiring importers to hold reserves of staple rice to buffer against short-term supply disruptions.
These measures—diversification, local production, and stockpiling—form a multi-pronged approach to enhance Singapore’s food resilience amid climatic uncertainties.

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15 Aug 2016

Inclusion of CPF Contribution in Calculation of Public Transport Affordability

Dennis Tan questioned the Ministry of Transport for including employer CPF contributions in household income calculations for its public transport affordability indicator, referencing the FY2016/2017 Budget Book.
Khaw Boon Wan explained that the affordability metric relies on the Household Expenditure Survey conducted every five years, which includes employer CPF in income, and adjustments are made for interim changes in wages and fares.
The Minister noted that while removing employer CPF contributions changes the percentages, public transport affordability has still improved, with costs falling as a share of household income from 2010 to 2015 under both calculation methods.

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15 Aug 2016

Standardised Internal Processes for Financial Institutions in Monitoring and Handling Potential Anti-money Laundering Cases

The new AML department within MAS will consolidate resources, increase inspections of high-risk institutions, and take public enforcement actions against non-compliant financial institutions.
Standardising internal AML processes across all financial institutions is not feasible due to varying business models, customer bases, and risk profiles; instead, institutions must tailor controls to their specific risks.
The new Enforcement Department will expand its scope to cover banking and insurance sectors, use data analytics for market surveillance, and coordinate with supervisors to detect and investigate misconduct.
MAS emphasises that the focus is on strengthening implementation of existing AML/CFT rules rather than imposing new regulations, in line with international standards.
The department aims to anticipate and address evolving money laundering and terrorist financing risks by aggregating information and enhancing investigative capabilities.

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15 Aug 2016

Take-up Rate for Partnerships for Capability Transformation Scheme

The PACT scheme, administered by EDB and SPRING, has supported nearly 130 projects since 2010, benefiting over 700 Singapore-based suppliers, with more than 650 being local SMEs.
The scheme helps SMEs upgrade capabilities, enter growth industries like aerospace and medical technology, and get onto approved vendor lists of large enterprises.
The government has enhanced PACT in 2013 to cover new sectors and productivity improvements, and in 2015 to include joint product development at the proof-of-concept stage.
The government continues to monitor and review the scheme to further support local SMEs.

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15 Aug 2016

Help for Growing Companies as Workforce Tightens

The Ministry supports business expansion through grants for automation, innovation, and productivity, such as the Automation Support Package and Capability Development Grant.
Programs like the GET-Up Programme and internationalisation grants from IE Singapore help companies access technology, expertise, and new markets.
Industry Transformation Maps are being developed for over 20 sectors to guide growth, skills development, and overseas expansion, with collaboration from trade associations.

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15 Aug 2016

Government Construction Projects Awarded to Local and Foreign Engineering Companies

Two-thirds of government construction contracts above $200 million in the last three years were awarded to the lowest price bidder.
Singapore's procurement system requires all companies to be prequalified under the Contractors Registration System, with higher-value contracts demanding higher financial and technical standards.
The government does not track the nationality of company owners due to its open procurement regime, which ensures fair competition between local and foreign firms under WTO and free trade agreements.
All companies, regardless of nationality, compete based on their ability to meet tender requirements, with no discrimination in the award process.

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15 Aug 2016

Sectors Covered under Industry Transformation Programme

The Industry Transformation Programme covers 23 sectors, including both domestically-oriented sectors like construction, healthcare, food services and retail, and outward-oriented sectors such as hotels, logistics, food manufacturing and precision engineering, accounting for about 80% of GDP.
Each sector will have an Industry Transformation Map with a growth and competitiveness plan that integrates existing initiatives to upgrade productivity, develop skills, promote technology adoption and innovation, and help companies expand overseas.
The plans will be developed and implemented in partnership with companies, industry associations, business chambers and unions, and will be refined over time to respond to external developments and company needs.
For example, the precision engineering sector’s roadmap focuses on automation, process improvement, job redesign, and developing skilled workers through vocational training, with support from industry partners.

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15 Aug 2016

Supply, Demand and Pricing of Water

Seah Kian Peng raised concerns about ensuring stable long-term water supply amid low catchment levels and climate change, and questioned whether water pricing reflects full costs including infrastructure and subsidies.
Melvin Yong asked for updates on support for high water-use companies to recycle and suggested a lower conservation tax for households below average consumption.
The Minister assured that Singapore’s Water Master Plan and infrastructure projects like desalination and NEWater plants will secure supply, while PUB promotes water efficiency through regulations, funding, and consumer comparison tools.
Water is priced based on long-run marginal cost to reflect scarcity, with tiered tariffs and taxes to discourage waste; the price has remained stable but will need review due to rising costs and climate challenges.
Both members’ suggestions on tiered conservation taxes and efficiency measures are acknowledged, with current structures deemed effective though complex changes may be considered in the future.

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