Economy & business — Topics

29 Jan 2015

Quality Jobs for Increasing Number of Graduates

The Government adopts a two-pronged approach: growing knowledge-intensive and productivity-driven industries to create quality jobs, and investing in education and training to equip Singaporeans with the right skills, including applied degree pathways to meet economic needs.
The 40% publicly funded university cohort participation rate by 2020 is designed to create a diverse graduate talent pool, but it is supplemented by private and part-time courses, with the young workforce expected to have over 50% degree holders.
The Minister emphasizes that while the government tries to align graduate supply with industry demand, such as through industry-education partnerships and anticipating job needs, some mismatches are inevitable, and Singaporeans must also take ownership of their career development.

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29 Jan 2015

Usage of Zakat Collections

Zainal Sapari asked the Minister for Communications and Information and Minister-in-charge of Muslim Affairs about the total zakat collected by MUIS in 2014, its allocation breakdown, and whether any is used for MUIS operating expenses.
The Minister clarified that zakat is not used for MUIS operating expenditure, which is funded by the General Endowment Fund, and reported that $28.4 million was collected in 2013, with funds allocated across eight beneficiary categories, including direct financial assistance, mosque and madrasah support, dakwah, and administration.
Zainal Sapari inquired about reasons for increased zakat collection and whether review of income criteria or quantum would occur, with the Minister citing rising community affluence and awareness, and committing to ongoing reviews to support needy families.
Other members asked about zakat recipients' access to national schemes and whether zakat funds are fully disbursed annually, with the Minister confirming that zakat complements national assistance and that while some funds may be retained, all remain within zakat accounts.

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29 Jan 2015

Setting Medisave Minimum Sum by Cohort

The Medisave Minimum Sum is adjusted yearly to account for healthcare inflation, longer life expectancies, and expanded Medisave uses, unlike the CPF Minimum Sum which is fixed at age 55 to provide a constant retirement payout stream.
Members do not need to top up their Medisave Minimum Sum to use funds for approved healthcare expenses, but they must top it up to the prevailing sum before withdrawing excess CPF savings after age 55.
The government will not waive the Medisave Minimum Sum even for those with comprehensive health insurance, as it ensures adequate savings for future healthcare expenses, including premiums, and will not be reduced despite the implementation of MediShield Life.

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29 Jan 2015

Allowing Middle-income Workers above Age 50 to Increase CPF Contributions to Reduce Tax Liability

Zaqy Mohamad asked about measures to help middle-income workers above 50 who face higher personal income tax and lower CPF interest due to reduced contributions, and whether they could voluntarily contribute more to CPF for tax relief and retirement income.
The Minister for Manpower explained that CPF rates for older workers were lowered to enhance employability but have been gradually increased since 2012, with further studies ongoing on future rate adjustments.
Voluntary CPF contributions through the Minimum Sum Topping Up Scheme allow members to top up their Special or Retirement Accounts with cash and receive tax relief up to $7,000 annually.

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20 Jan 2015

Cost of Providing Free Transport for Older Singaporeans

Seah Kian Peng asked the cost of providing free MRT and bus rides for Singaporeans aged 60, 65, and 67, and whether free transport could be considered for those 67 and older.
Lui Tuck Yew estimated annual costs at $200 million for all 580,000 senior cardholders aged 60+, $125 million for those 65+, and $95 million for those 67+, noting these are conservative as they exclude non-cardholders and could rise with increased travel demand.
Lui highlighted that seniors already receive discounts of 25–59% off adult fares and a monthly concession pass at $60, and expressed reservations about moving to completely free transport due to the significant additional cost to taxpayers and other commuters, though the issue would be revisited periodically.

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20 Jan 2015

Extending Working Mother's Child Relief and Foreign Maid Levy Relief to Single Mothers

Seah Kian Peng asked whether the Working Mother's Child Relief and Foreign Maid Levy Relief could be extended to single mothers and what the estimated tax savings would be for them.
Tharman Shanmugaratnam explained that many government benefits are provided regardless of marital status, but the two reliefs in question are specifically designed to support married women in the workforce within the context of marriage.
The government noted that estimating tax savings for single mothers is difficult due to a lack of data on their specific circumstances, such as children's full-time study status and income levels.

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20 Jan 2015

Higher Interest Rate for Home Owners who Take Third Housing Loan from HDB

Mr Zainal Sapari questioned the rationale for higher interest rates on a third HDB housing loan, the income profile of such applicants, and whether rates could be equalised across loans.
Khaw Boon Wan explained that HDB offers up to two concessionary loans at below-market rates, with a third loan granted only in exceptional cases at market rates to discourage resale flat churning.
He noted that third loans are typically for those in urgent housing need with poor credit but steady income, though HDB may consider concessionary rates for genuine hardship cases.

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20 Jan 2015

Manpower-intensive Industries in Productive Economy

The Ministry of Manpower uses sector-specific dependency ratio ceilings, such as allowing seven foreign workers for every local worker in construction, to balance manpower needs with the goal of a productive economy.
Flexibility is provided for essential economic or social needs, but reliance on large numbers of low-skilled foreign workers cannot be sustainable, and industries should aim to become manpower-lean through technology and skilled workforces.
The government is pushing for productivity improvements, such as mandating a minimum R1 proportion in construction from 2017, to reduce manpower intensity and support higher wages in a productive economy.

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20 Jan 2015

Measures to Help SMEs Pursuing Greater Productivity to Cope with Rising Costs

The government provides support for SMEs through schemes like the Productivity and Innovation Credit, Innovation and Capability Voucher, and Capability Development Grant, with over 22,000 companies benefiting and surveys showing increased adoption of productivity measures.
Efforts to raise awareness and assist SMEs include 12 SME Centres, outreach by the SME Workgroup, and initiatives to facilitate participation in government procurement tenders.
Industrial rental costs have moderated, with declines in rental indices and a steady supply of space expected to exert downward pressure, while rental data transparency is being improved.
The government will continue collaborating with industry associations and companies to enhance productivity, especially in sectors like retail, food services, and construction, emphasizing sustained efforts for economic competitiveness.

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20 Jan 2015

COEs for Commercial Vehicles

Er Dr Lee Bee Wah raised concerns about COE renewal for small delivery vans, whether different commercial vehicles fall into separate COE categories, and requested a review of vehicle policies with the advent of satellite-based ERP.
The Senior Minister of State for Transport confirmed that 31,000 small delivery vans will have COEs expiring by 2017, explained that all goods vehicles and commercial buses are in Category C to avoid volatility, and outlined existing measures like lower taxes, flexible renewals, and early turnover schemes to help SMEs manage vehicle costs.
Dr Lee pressed for specific support for SMEs competing with larger firms for COEs and asked about COE availability over the next three years, to which the Ministry responded that future COE supply depends on deregistration rates and growth policies, making precise forecasts difficult.
The debate highlighted ongoing challenges for small businesses in accessing COEs, with the Ministry emphasizing that while creating new categories is carefully considered, current measures aim to assist SMEs without destabilizing the COE system.

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20 Jan 2015

Sectoral Manpower and Skills Development Strategies for Traditional Industries

The Ministry of Manpower outlines the Sectoral Manpower Strategies initiative to identify future skills needs, develop career progression pathways, and enhance talent attraction across industries, with a focus on lead sectors such as healthcare, biopharmaceuticals, and construction.
The Ministry addresses SME challenges by providing clearer sector direction and resources through schemes like the Enterprise Training Support Grant and SME Centres, while encouraging employers to move from a "plug and play" hiring mindset to proactive worker development.
The Ministry commits to considering the skills needs of freelancers and ensuring lifelong learning opportunities for all Singaporeans, beyond the targeted lead sectors, to support career deepening or transitions.
In response to manpower shortages in childcare, the Ministry acknowledges broader sectoral challenges and directs further inquiry to specific Parliamentary Questions while emphasizing support for training and sector growth.

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20 Jan 2015

Enhancing Availability of Corporate Retirement Plans

Mr Yee Jenn Jong asked if corporate retirement plans could be expanded, noting Singapore’s low retirement adequacy score in the Mercer Index, while the Senior Minister of State for Finance highlighted Singapore’s overall strong ranking and emphasized that CPF contributions already provide substantial retirement savings for locals, with tax incentives available for corporate plans and the SRS for foreigners.
The Minister explained that the Mercer Index’s adequacy score for Singapore is below the global average, but this metric primarily reflects the lack of tax-advantaged private plans for foreigners, not Singaporeans, and questioned the index’s methodology for not accounting for CPF’s mandatory employer contributions and other government support.
Mr Yee pointed out that only about 20 companies use the existing corporate retirement plan tax scheme under Section 5 of the Income Tax Act despite its existence since 1994, asking for reasons for low uptake and whether studies have been done on its effectiveness or awareness.
The Minister clarified that the index’s focus on private plans overlooks the substantial retirement savings already contributed by employers through the CPF, which exceeds mandatory rates in countries like Australia and Denmark, and reiterated that the concern about corporate plans is mainly relevant for foreigners, not the majority of Singaporeans.
Both sides acknowledged the need to review and promote retirement options, with the government committed to ongoing reviews of schemes like the SRS and considering whether to enhance incentives or awareness for corporate retirement plans.

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20 Jan 2015

Implication of Huge Net Deficit in HDB Budget

The HDB net deficit of $1.97 billion in FY2013/2014 is a deliberate outcome of government policies to provide affordable public housing, mainly from subsidies to flat buyers and CPF housing grants.
The deficit spike is due to a ramp-up in flat construction and upgrading programmes, and will remain high in the coming years as these projects are completed, though future levels depend on housing demand, policies, and costs.
The deficit is expected and managed through a deficit financing model, where the Ministry of Finance provides a grant to balance HDB’s accounts, and the current high building pace of 25,000 units per year is being tapered down.

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19 Jan 2015

Expected Increase in Number of Civil Servants

Seah Kian Peng raised questions about the expected increase in civil servants due to new agencies and the impact on public relations and the budget.
Tharman Shanmugaratnam stated that the public service remains lean, with a staff strength of about 143,000 (4% of the labour force), lower than other countries, and growth is managed through redeployment and efficiency.
He noted that past annual growth was 2.5%, lower than the labour force's 4.1%, and expects similar pace to support new programmes, while emphasising productivity improvements and sustainable manpower planning.

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19 Jan 2015

Financial Sustainability Plans for Gardens by the Bay

Gerald Giam asked whether Gardens by the Bay will become commercially self-sustaining, noting an increase in government grants and asking for a timeline.
Khaw Boon Wan explained that Gardens by the Bay is a public garden with most areas free to access, and grants cover operating costs and community programs.
He stated there is no plan to make Gardens by the Bay self-funding, emphasizing its role as a people’s garden for public enjoyment.

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19 Jan 2015

Regulating School Bus Fares

Gan Thiam Poh asked if the Ministry of Transport will regulate school bus fares to ensure affordability for students.
Lui Tuck Yew explained that school bus fares are market-determined due to varying operational factors like routes and capacity, and capping fares arbitrarily could lead to under-servicing.
The government supports affordability by offering incentives such as road tax rebates and COE exemptions to school bus operators to keep costs competitive.

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19 Jan 2015

Open Skies Agreement for ASEAN

Christopher de Souza asked how an open skies agreement within ASEAN would benefit Singapore and other ASEAN states.
Lui Tuck Yew explained that ASEAN has concluded three air services agreements to create a Single Aviation Market, aiming for an intra-ASEAN open skies by 2015 to boost connectivity and economic growth.
The intra-ASEAN open skies would promote greater travel, trade, investment, and tourism, with projections of sustained growth in regional air traffic.
For Singapore, a liberal air services regime would strengthen Changi Airport’s network and connectivity, supporting its role as an air hub and economic development.
ASEAN’s collective approach in negotiating with Dialogue Partners like China, South Korea, Japan, and the EU allows for more ambitious air services agreements than bilateral deals.

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19 Jan 2015

Benefits of Integrated ASEAN Economic Community

The ASEAN Economic Community (AEC) aims to create a single market and production base by liberalising trade in goods, services, and investment through three key agreements, which will facilitate and enhance regional trade and investment flows.
These agreements will benefit Singapore companies by eliminating import duties for greater price competitiveness, reducing barriers to services trade, and providing stronger investment rules to attract investments and expand their regional presence.
Closer economic integration within ASEAN, a market of 620 million people with a combined GDP of US$2.3 trillion in 2013, will generate greater opportunities, raise living standards, and contribute to stronger regional stability, as reaffirmed by ASEAN leaders.

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19 Jan 2015

Voluntary Extension of Dependants' Protection Scheme

Ms Lee Li Lian asked if the Ministry for Manpower could allow voluntary extension of the Dependants' Protection Scheme (DPS) coverage up to age 65.
The current DPS scheme, introduced in 1989, provides affordable insurance for young CPF members but ceases at age 60 as the need for protection declines and members accumulate sufficient savings.
Extending DPS coverage beyond age 60 would lead to significantly higher premiums due to increased mortality rates and anti-selection risks, making it less cost-effective.
The current age limit of 60 is seen as balancing the need for dependant protection with the preservation of CPF savings for retirement, with private insurance being an alternative for those seeking coverage beyond 60.

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19 Jan 2015

Pawnbrokers Bill

The government introduced the Pawnbrokers Bill to update the 1993 Act, citing the industry's growth in number of pawnbrokers and loan value, and proposed five key updates including stricter licensing, refined pawn ticket processes, retained consumer protections, removal of the auction system, and anti-money laundering measures.
Members supported the bill but raised concerns about the removal of the auction system, the potential for low valuations to incentivize pawnbrokers, the need for clearer valuation standards, and the lack of data on pawner profiles and reasons for non-redemption, with the Minister responding that competition and existing safeguards would prevent abuse.
The Minister confirmed that the cap on interest rates and minimum redemption periods remain unchanged, dismissed online pawnbroking for now due to over-indebtedness risks, and stated that pawnbrokers must operate only from licensed premises to ensure security and proper regulation.

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