Economy & business

• The government committed $16.1 billion (1% of GDP) to public R&D under the RIE2015 plan to catalyze private-sector investment and attract multinational R&D facilities to Singapore.
• While the public-to-business R&D expenditure ratio has increased in recent years, the government is not concerned because business expenditure has more than doubled since 2002 and grows amid macroeconomic and company-specific fluctuations in a small ecosystem.
• The government tracks public R&D outcomes beyond expenditure ratios, including research excellence, public-private collaborations, technology commercialization, and manpower development.

• David Ong asked if the GST waiver on kidney dialysis medical consumables could be extended to all patients, noting that some opt for private dialysis due to limited space or conditions at government-related centres.
• Tharman Shanmugaratnam explained that Singapore maintains a broad-based GST system with minimal exemptions to keep rates low, using targeted subsidies and GST absorption for lower- and middle-income patients at government-funded VWO dialysis centres.
• The government recently expanded subsidies to cover up to the 67th percentile of households, increasing the number of patients receiving GST absorption by about 40%, and aims to ensure adequate capacity in subsidized centres.
• While there is generally sufficient capacity in government-funded VWO centres, the government acknowledges regional demand variations and will work to maintain supply, and VWO providers may offer financial assistance to patients unable to use these centres.

• Christopher de Souza questioned the rationale for imposing GST on MediShield premiums and asked whether the tax could be waived for the elderly or low-income workers.
• Tharman Shanmugaratnam explained that Singapore maintains a broad-based GST system with minimal exemptions to keep the rate low, while offering targeted subsidies and grants to assist lower-income groups.
• He noted that the government absorbs GST for subsidised patients in healthcare settings and provides support through GST Vouchers and Workfare Income Supplement, which include top-ups to Medisave accounts to cover MediShield premiums.
• Tharman highlighted that a retiree household could receive substantial Medisave top-ups that more than offset their MediShield premiums, and similar support exists for lower-income working households.
• He added that with the introduction of MediShield Life, further government assistance will be provided to ensure premiums remain affordable for older and less well-off Singaporeans.

• Ms Tan Su Shan proposed an age-based top-up to the Special Employment Credit (SEC) to better support the recruitment and retention of well-qualified older Singaporean workers.
• The SEC currently provides employers with credits of up to 8% of monthly wages for eligible older employees, recently expanded to cover those aged above 50 with wages up to $4,000.
• The government noted that CPF contribution rates already decrease with employee age, helping offset costs, and highlighted other measures like WorkPro and re-employment laws to support older workers.
• Labour force participation among older residents has increased, with higher employment rates for those aged 60-69 and high re-employment offers at age 62.
• The government will study the proposal further and continue monitoring the labour market to refine policies promoting older Singaporean workers' employment.

• Christopher de Souza asked if the Ministry of Education can assist Singaporean students at UniSIM or SIM-administered qualifications with grants, awards, or concessionary loans, and if existing programs can be enhanced.
• Heng Swee Keat explained that UniSIM, unlike SIM Global Education, receives MOE subsidies for part-time undergraduate programs similar to NUS and NTU, and Singapore Citizen students can use their Post-Secondary Education Account funds for fees.
• MOE has extended the Bursary Scheme to UniSIM for part-time undergraduates with household incomes of $1,700 per capita or below, and introduced Tuition Fee Loans covering up to 90% of subsidised fees, with Study Loans for the remaining 10% for those with incomes up to $2,400 per capita.

• As of 1 October 2013, there were 201 pawnshops in Singapore, up from 114 in 2008, representing an increase of 77 shops over the past five years.
• Pawnbroking loans are secured loans with a maximum interest rate of 1.5% per month and constitute about 3% of consumer loans issued by banks and finance companies.
• Total pawnbroking loans granted by 31 August 2013 were about $3.7 billion, with around 95% of pledged items redeemed by pawners.

• Teo Siong Seng asked the Ministry of Trade and Industry to consider schemes for hawkers in HDB heartlands who are ineligible for existing upgrade or productivity programmes.
• Lim Hng Kiang responded that SME centres, including satellite centres in CDCs, offer free advice to help hawkers re-tool, reduce manpower reliance, and improve productivity.
• The National Environment Agency (NEA) is also exploring central dishwashing to enhance hawker productivity and public hygiene.

• The MAS Annual SME Financing Survey 2013 found that SME lending grew by 9% in the year ending June 2013, with 27% of loans unsecured and 55% secured by property collateral.
• MAS does not impose mandatory project track record requirements for SME loans but expects banks to make prudent lending decisions based on their own assessments.
• Existing credit bureaus in Singapore provide corporate credit information, which can help banks evaluate SME loan applications more effectively.

• Dr Janil Puthucheary raised concerns about SMEs' difficulties with foreign worker pass renewals, asking for data on appeals, a special pass scheme for experienced foreigners in tough-to-fill roles, and business closures due to manpower shortages.
• Minister Tan Chuan-Jin reported that since 2010, about 19,000 appeals for S Pass and Work Permit renewals were received, with 48% approved temporarily, and highlighted policies like the market-based skills framework to retain skilled foreign workers longer and reduce levies.
• The minister acknowledged SMEs' challenges and noted that firm closures have remained steady, with support measures like the Productivity and Innovation Credit (PIC) to help businesses transition gradually.

• Member of Parliament Gerald Giam Yean Song questioned the distribution and adequacy of MediShield Fund's $507 million in net assets for 2012, specifically requesting a breakdown of reserves for liabilities and capital for regulatory requirements, year-on-year figures from 2005-2012, and the fund's target Capital Adequacy Ratio (CAR).
• Health Minister Gan Kim Yong explained that MediShield is a self-sustaining, not-for-profit scheme where about 65% of the fund on average from 2005-2012 comprised reserves for expected liabilities like claims and premium rebates, while the remaining "net assets" served as capital for meeting MAS risk-based requirements.
• The CAR is calculated as net assets divided by MAS risk requirements, with a minimum regulatory CAR of 100% and a warning threshold of 120%, but MediShield maintained a CAR of 165% at end-2012 and targets 200% to ensure resilience against adverse scenarios, in line with industry best practices.

• Tan Su Shan asked the Ministry for Trade and Industry to do more to prevent productivity policies from unintentionally hindering SME growth and local entrepreneurship.
• Lim Hng Kiang responded that the government actively supports SMEs through grants, sector-specific productivity roadmaps, enhanced schemes, and expanded advisory centres to help businesses upgrade and innovate.
• The government is monitoring SME progress via the SME Workgroup and reviewing the entrepreneurship environment, with recommendations expected early next year.

• The 2013 Singapore Grand Prix attracted over 260,000 spectators, the highest since its debut, and is expected to maintain steady economic benefits.
• The event generates about $150 million in incremental tourism receipts per race and has drawn over 200,000 international visitors in the last five years.
• The race provides global branding for Singapore, with 430 million cumulative TV viewers and direct economic spin-offs for local SMEs, which handle 80% of the race organization work.
• Community engagement includes school visits, tours for the public, and practical event experience for ITE students, enhancing local involvement and pride.
• The government and race promoter plan continued changes to increase excitement and broaden community participation in the event.

• Teo Siong Seng highlighted that SMEs face major challenges with manpower and affordable business premises, particularly due to uncertain lease renewals and rising rental costs, which disrupt long-term planning and productivity investments.
• The government responded by detailing measures to increase industrial and commercial space supply, engage SMEs early on lease matters, and provide support through schemes like the Small Footprint Factories and EnterpriseOne hotline for guidance.
• Both speakers emphasized the need for better coordination among government agencies and called for an overarching body to address SME concerns, with the SME Workgroup aiming to bring together stakeholders to find solutions.

• The Jurong Town Corporation (Amendment) Bill grants JTC new powers to collect and publish industrial property statistics to improve market transparency and stability, while implementing strict confidentiality safeguards and penalties for data misuse.
• The Bill increases the JTC Board's membership size for broader expertise and removes JTC's land acquisition powers, aligning acquisitions with the Singapore Land Authority under existing legislation.
• Minister Lim Hng Kiang affirmed JTC's continued commitment to supplying industrial land, explained the shift toward private sector provision in warehousing and multi-user factories to ensure a level playing field, and addressed concerns about religious use of industrial spaces with specific usage limits.

• The Income Tax (Amendment) Bill introduces several tax changes, including enhancements to the Productivity and Innovation Credit (PIC) scheme, a corporate income tax rebate, and a personal income tax rebate, to support businesses and individuals.
• The Bill also strengthens Singapore's Exchange of Information (EOI) regime to combat cross-border tax evasion, including implementing the U.S. Foreign Account Tax Compliance Act (FATCA) and removing the requirement for IRAS to seek a court order for certain information requests.
• Concerns were raised about the costs and complexity of compliance, especially for SMEs, and the potential impact on banking confidentiality and Singapore's reputation as a financial center, with the government assuring safeguards and careful evaluation of requests.

The request was rejected because it was considered high risk

• The Goods and Services Tax (Amendment) Bill was introduced to amend the GST Act and related laws, with the President's recommendation signified.
• The Bill was presented by Senior Minister of State for Finance Mrs Josephine Teo and read for the first time in Parliament.
• The Second Reading of the Bill was scheduled for the next available sitting of Parliament and the Bill was to be printed for review.

• R Dhinakaran questioned the impact of cooling measures on vehicle ownership and potential future government actions.
• The Transport Minister stated that vehicle loan restrictions introduced in February 2013 led to lower COE prices, which have since fluctuated but remain below pre-restriction peaks.
• The Government confirmed it has no plans to introduce additional cooling measures in the foreseeable future.

• The Acting Minister for Manpower explained that the Fair Consideration Framework aims to ensure fair hiring practices for Singaporeans while maintaining economic competitiveness, with exemptions from advertising requirements for small firms (25 or fewer employees), high-wage jobs (above $12,000), and rank-and-file roles, though all firms must still fairly consider Singaporeans.
• MOM will scrutinize firms with low proportions of Singaporean PMEs, consider industry comparisons and trends, and investigate complaints about unfair HR practices, which could lead to additional scrutiny on work pass applications or curtailment of privileges.
• The Minister noted that the framework is not about setting fixed targets for local hiring due to varying industry needs, but rather to signal expectations and monitor practices, while also drawing lessons from other countries and adapting measures to Singapore’s context.

• Ms Foo Mee Har questioned the rationale and effectiveness of the rule that allows banks to deny further credit only when an individual's aggregate debt exceeds 12 months of income for 90 days or more, and whether this prevents excessive borrowing.

• Deputy Prime Minister Tharman Shanmugaratnam explained that MAS introduced a 12-month unsecured debt limit to take effect in June 2015, with interim measures requiring banks to review total debt and credit limits before granting new credit, while emphasizing personal responsibility and financial education.

• Ms Foo raised concerns about potential debt accumulation before the limit's implementation, risks of credit crunch or bankruptcies if banks enforce the rule, and the lack of regulation for alternative financing sources like moneylenders, urging cross-agency data sharing and regulatory adjustments.

• Mr Tharman responded that phased measures from December would curb further borrowing, banks would work with over-indebted customers to avoid pushing them to unregulated lenders, and stressed the need to balance regulation with preventing vulnerable borrowers from turning to riskier financing options.