Economy & business — Topics

13 Feb 2015

Government Targets for Grooming SMEs into Globally Competitive Companies

The Economic Strategies Committee set a target of 1,000 Singapore enterprises with revenues above $100 million by 2020, up from 530 in 2007, to build a strong base of globally competitive companies.
Schemes like the Capability Development Fund, Market Readiness Assistance, and Global Company Partnership are in place to support SMEs in scaling up, improving internal processes, and expanding internationally.
More than 1,000 companies have used the Capability Development Fund, and over 27,000 companies, 80% of which are SMEs, have been assisted to internationalize, with efforts continuing to reach the 2020 target.

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13 Feb 2015

Impact of Lower Oil Prices on Electricity and Gas Tariffs

Gan Thiam Poh asked the Minister for Trade and Industry about the projected reduction in electricity and gas tariffs over the next six to 12 months due to lower fuel oil prices.
The Second Minister for Trade and Industry clarified that electricity and town gas tariffs are not projected by the government but are reviewed quarterly by the Energy Market Authority to reflect underlying costs, including fuel costs.
The fuel cost component for electricity is based on average forward fuel oil and Brent prices and makes up about half the tariff, while for town gas it is based on fuel oil and naphtha prices and comprises about 40% of the tariff.
Natural gas prices, which are indexed to oil prices, have fallen in line with global oil trends, leading to recent tariff reductions of 7.9% for electricity and 8.7% for town gas in the latest reviews.

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13 Feb 2015

Recent Fare Increases by Public Transport Operators

Er Dr Lee Bee Wah questioned the rationale for recent fare increases despite falling oil prices and high operator profits, suggesting the fare review formula should incorporate profitability and be revised earlier than 2017.
Minister Lui Tuck Yew explained that fare adjustments follow a formula tied to core CPI, wages, and energy costs, with annual reviews to avoid large jumps; the 2.8% increase resulted from a carry-over from 2013 and was mitigated by lower oil prices.
The Minister emphasized that operators need profits for capital investments (e.g., SMRT's $2 billion commitments) and that fares remain affordable compared to other cities and household incomes, with protections for vulnerable groups.
Debate highlighted that while cross-subsidization occurs from non-fare businesses, the fare formula aims to balance affordability with financial viability, and early changes are not planned as the current formula runs until 2017.

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12 Feb 2015

Balance in MUIS' Zakat Fund

MUIS collected and disbursed varying amounts of zakat from 2011 to 2013, resulting in a small surplus or deficit each year, while 2014 figures are pending audit.
The fund maintains a reserve to buffer against shortfalls and unforeseen situations, such as economic downturns, due to the timing mismatch between collection during Ramadan and year-round disbursement.
No specific retention period is mentioned for fully disbursing balances, with the reserve intended to ensure continued funding of zakat programmes and services.

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12 Feb 2015

Government-supported Loan Schemes Used for Mergers and Acquisitions Abroad by Singapore-based Companies

Mr Yee Jenn Jong asked how many Government-supported loan schemes were used for overseas mergers and acquisitions by Singapore-based companies in 2012 to 2014.
The Government supports cross-border M&A through tools like IE’s Global Company Partnership grants, which cover strategy, feasibility, target identification, due diligence, valuation, and post-merger integration.
M&A-related GCP grants increased from 11 cases in 2012 to 21 in 2013 and 32 in 2014.
Additional non-financial support includes outreach, seminars, and an M&A tax allowance for internationalising companies.
The response did not specify the number of loan schemes used for M&A but highlighted the range of support measures available.

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12 Feb 2015

Government Help Schemes for SMEs

Gerald Giam Yean Song asked about the number of micro-SMEs (under 10 employees) helped by government schemes in 2012–2014, along with total grants, total loan amounts, and average quantum per SME each year.
The government supported micro-SMEs through the Innovation and Capability Voucher, Micro-Loan Programme, and Productivity and Innovation Credit, with about 20,000 recipients in 2012, 24,000 in 2013, and 33,000 in 2014.
Total grant funding for ICV and PIC rose from $20.1 million (average $983 per company) in 2012 to $107.9 million ($4,760 avg) in 2013 and $281.6 million ($8,968 avg) in 2014.
Total MLP loan support increased from $119.6 million in 2012 to $124.1 million in 2013 and $197.5 million in 2014, with average loans of $62,800, $64,300, and $59,800 respectively.

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12 Feb 2015

Rental Costs as Percentage of Total Business Costs for SMEs

Gerald Giam asked for the percentage of rental costs relative to total business costs for SMEs, broken down by employee size and industry sector for 2012 to 2014.
Lim Hng Kiang stated that rental costs were less than 5% of total business costs for SMEs in manufacturing in 2012 and 2013, with significant variation across service industries.
He noted that data on rental costs for 2014 is not yet available and that a breakdown by employee size is not provided for all industries.

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12 Feb 2015

Utilisation of Productivity and Innovation Schemes by Businesses

Assoc Prof Randolph Tan requested statistics on whether businesses using the Productivity and Innovation Credit (PIC) and Innovation and Capability Voucher (ICV) schemes experienced moderated manpower needs or expanded revenue, as well as an ordered breakdown by number and value of applications for the PIC’s six qualifying activities.
Deputy Prime Minister Tharman Shanmugaratnam noted that attributing productivity changes directly to specific schemes is challenging due to multiple influencing factors, and results should be assessed over the medium to long term.
He reported that PIC scheme uptake grew from 33% of active companies in 2011 to 46% (54,000 companies) in 2014, while the ICV scheme has benefited about 13,000 SMEs since its 2012 launch.
For PIC claims in 2014, over 75,000 claims were made across six qualifying activities, with automation equipment and training being the most claimed, though specific expenditure figures were not detailed in the summary.

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12 Feb 2015

Opening Bank Accounts for Soon-to-be-released Prisoners

Irene Ng asked if the Ministry could collaborate with banks to help soon-to-be-released prisoners open bank accounts, noting that accounts are essential for job-seeking, salary receipt, and reducing re-offending rates.
Teo Chee Hean acknowledged that some ex-offenders face difficulties opening accounts due to minimum deposit requirements or being deemed credit risks, and SCORE helps by arranging alternative salary payments like cash or cheques to help them save and build credit.
Teo Chee Hean agreed with Ms Ng's suggestion and stated that the Singapore Prison Service and SCORE will work with banks to consider temporarily waiving minimum deposit requirements and other measures to facilitate account opening post-release.

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12 Feb 2015

Extending More Government Benefits to Single Parents and Single Male Parents

Mr Yee Jenn Jong asked for statistics on the gender ratio of single parents with custody, details on which tax benefits and assistance schemes are available to single male parents, and whether more support schemes can be extended to single parents.
Minister Chan Chun Sing noted that in 2013, 47% of civil divorces and 63% of Muslim divorces involved dependent children, but the Ministry lacks detailed custody data; joint custody is commonly awarded to prioritize children’s interests.
Divorced parents, including fathers with custody and care control, continue to receive benefits like tax relief, healthcare and education subsidies, Medisave grants, Baby Bonus, preschool subsidies, and childcare leave.
For housing, a divorced parent with custody and care control is treated like a married household, though within three years of divorce, only one party can own a subsidised flat unless the ex-spouse consents or the divorcee has full custody of all children under 18.

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12 Feb 2015

Auditor-General's Report on Audit of Aljunied-Hougang-Punggol East Town Council (AHPETC)

The Minister for Law accused the AHPETC Town Councillors of serious fiduciary breaches, including unlawful payments to a related party, FMSS, without transparency and at inflated rates, resulting in significant financial loss to residents.
In response, the Workers' Party MPs rejected these allegations, defended their actions, and challenged the accuracy of the data presented, while committing to answer residents' questions during house visits.
The debate highlighted unresolved issues regarding the disclosure of conflicts of interest, the approval process for contracts, and the reliability of the Town Council's financial records, with calls for a forensic audit to determine the exact loss.

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12 Feb 2015

Auditor-General's Report on Audit of Aljunied-Hougang-Punggol East Town Council (AHPETC)

The Minister for National Development highlighted severe financial mismanagement at AHPETC, including failures in accounting systems, lack of oversight on related-party transactions, and improper use of public funds, as detailed in the Auditor-General's report.
The Workers' Party acknowledged the findings and committed to addressing the issues, but pointed out challenges in attracting managing agents due to political bias and called for a depoliticized transition process for opposition-run town councils.
The Minister announced plans to amend the Town Councils Act to strengthen accountability, impose stricter penalties, and enhance regulatory oversight to prevent similar issues in the future.

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12 Feb 2015

COEs for Different Types of Motorcycles

Mr. Zainal Sapari asked about motorcycle registration statistics by license class, the feasibility of separating the motorcycle COE category, and allowing unlimited five-year COE renewals to ease ownership costs.
The Parliamentary Secretary provided figures showing that Class 2B licenses accounted for 65% of annual motorcycle registrations in 2013-2014, followed by Class 2 licenses at 23% and Class 2A at 14%.
The government opposes splitting the motorcycle COE category further, as it would reduce quotas in each sub-category and cause price volatility.
Unlimited five-year COE renewals are not supported because they would reduce COE availability from deregistrations, disadvantaging prospective buyers.
The current separate motorcycle COE category was established to prevent competition with other vehicles, and the administration aims to maintain market stability.

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12 Feb 2015

Effectiveness of Productivity Schemes to Encourage Companies to Invest in Innovation and R&D

The Second Minister for Trade and Industry outlined multiple government schemes, including the Innovation and Capability Voucher, Technology Adoption Programme, Capability Development Grant, and Productivity and Innovation Credit, which have collectively provided significant funding and support to thousands of companies for innovation and R&D.
Minister S Iswaran noted that public R&D funding averages about 1% of GDP, with a target to attract matching private sector investment, and highlighted that R&D is defined broadly to include incremental improvements, not just major breakthroughs, to make support more accessible to SMEs.
Foo Mee Har raised concerns from SMEs that the hurdles to qualify for R&D support are high, and asked for broader definitions of R&D to include more incremental innovation efforts.

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12 Feb 2015

Streamlining Government Processes to Increase Productivity

The government has established multi-agency platforms like the Building Innovation Panel and the National Productivity Council to coordinate productivity efforts and streamline policies across sectors.
The e-Gov Council and Pro-Enterprise Panel have been set up to improve electronic services and regulatory processes, reducing approval times and addressing business challenges.
The Senior Minister of State agreed to follow up on a proposal for a central depository to reduce repetitive data requests in government procurement processes.
A suggestion was raised to update cost estimation models for government projects to better reflect sustainable and green building features, which will be referred to the Building Construction Authority for further discussion.

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12 Feb 2015

Government Contracts Exceeding $10 Million Awarded to Lowest Bidder

Mr. Yee Jenn Jong asked about the proportion of government infrastructure projects over $10 million awarded to the lowest bidder from 2012 to 2014 and how productivity considerations factored into these awards.
The Senior Minister of State replied that about three-quarters of the 590 projects above $10 million during that period went to the lowest bidders, but all such projects are evaluated under the Price-Quality Method, which considers productivity.
Mr. Yee raised concerns about the viability of low bids, asking about correlations with project failures and the weightage given to productivity, to which the Minister stated that very few projects stall due to low bids and productivity weightage ranges from 20% to 40% depending on project complexity.
The Ministry also emphasized its ongoing efforts to incentivize higher productivity methods through industry support programs.

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12 Feb 2015

Disbursement of WorkPro Funds

Gerald Giam asked for detailed statistics on WorkPro disbursements, company participation, budget utilization, and outreach efforts, and Dr Amy Khor responded that as of December 2014, over 1,500 companies had received WorkPro support, with $43.2 million committed (27% of budget), $7 million disbursed, and an average grant of $29,000 per company benefiting 58,000 workers, while outreach is done via tripartite partners and SME centers.
The debate highlighted that WorkPro has three grant components—Age Management ($28 million committed), Job Redesign ($2 million committed), and Work-Life ($13.2 million committed)—with SMEs forming 88% of applicants, and the government is enhancing the scheme to improve take-up, such as simplifying Work-Life Grant requirements.
Giam expressed concern over the relatively low 27% budget utilization and asked if the government is satisfied with the take-up rate, to which Khor explained there is no fixed target but continuous outreach and improvements are being made, including addressing low Job Redesign uptake due to SME expertise gaps.
Assoc Prof Randolph Tan suggested better cross-referencing between WorkPro and the Special Employment Credit to promote job redesign, and Khor agreed to consider this, emphasizing that multiple schemes work together to encourage progressive workplace practices.
The discussion underscored ongoing government efforts to sustain awareness and interest in WorkPro among companies, particularly SMEs, while balancing accessibility with accountability and governance of funds.

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12 Feb 2015

Revamping COE Bidding System

Gan Thiam Poh proposed revamping the COE system to allow only applicants to bid for themselves and to implement a Pay-As-You-Bid model.
The Senior Minister of State for Transport responded that LTA had previously consulted on these ideas, with mixed feedback on banning dealer bids and noted that the current system is efficient and robust according to auction theory.
She emphasized that COE prices are ultimately driven by supply and demand, and the existing bidding model encourages truthful bidding and fair allocation.

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29 Jan 2015

Benefits of Asia-Pacific Free Trade Area for ASEAN and Singapore

The Free Trade Area of the Asia-Pacific (FTAAP) would reduce tariffs and trade barriers, lowering costs for businesses in Singapore and ASEAN while improving trade rules and creating a more attractive environment for investment.
FTAAP would expand economic opportunities by linking Asia-Pacific economies, providing access to a potential market of over 2.8 billion people and enhancing trade and investment flows that already account for the majority of Singapore’s trade and a significant portion of ASEAN’s.
By involving major economies like the US and China, FTAAP would reinforce their strategic and economic commitment to the region’s stability and prosperity, benefiting Singapore and ASEAN’s long-term growth.

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29 Jan 2015

MediShield Life Scheme Bill

The MediShield Life Scheme Bill establishes a mandatory, universal insurance scheme providing lifelong coverage for all Singapore Citizens and Permanent Residents, including those with pre-existing conditions, with enhanced benefits such as no lifetime claim limit and higher annual claim limits.
To ensure affordability, the government introduced permanent premium subsidies for lower- to middle-income households, additional subsidies for the Pioneer Generation, transitional subsidies for all citizens, and a self-sustaining fund supported by premiums with government support, while penalties and recovery measures are reserved for wilful defaulters.
The debate highlighted ongoing concerns about premium sustainability, the handling of pre-existing conditions, data privacy safeguards, and the need for continued public education and compassionate implementation to support vulnerable groups.

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