Economy & business — Topics

14 Jan 2013

Free Trade Agreement with European Union

Nicholas Fang questioned whether the EU-Singapore Free Trade Agreement (EUSFTA) increases Singapore's exposure to financial crises from the European Union.
Lim Hng Kiang responded that trade agreements like EUSFTA open markets and reduce trade barriers, and Singapore's diverse trade network mitigates risks.
He noted that bilateral trade with the EU grew 22% between 2009 and 2011 despite the EU's economic crisis, indicating resilience.
The minister added that financial crisis contagion spreads through banking channels, which can be managed with robust regulations.
The EUSFTA is seen as enabling Singapore companies to access EU markets and further strengthen trade ties.

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14 Jan 2013

Sustainability of Growth in Visitor Arrivals into Singapore

The Ministry of Trade and Industry outlined plans to shift from rapid visitor arrival growth to a more sustainable, yield-driven tourism model by enhancing content, productivity, and regional collaboration.
Key initiatives include developing unique attractions like Gardens by the Bay and the River Safari, boosting manpower capabilities through training and technology, and strengthening Singapore's role as a regional travel hub.
The focus is on creating quality experiences to maximize value from tourism assets, manage domestic constraints, and ensure long-term benefits for local enterprises and job creation.

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14 Jan 2013

Tisch School of The Arts Asia

Mrs Lina Chiam questioned the EDB on the failure of education projects like Tisch School of the Arts Asia, the amount of public money spent on such projects, and the lack of transparency regarding the EDB-NYU contract for Tisch Asia.
Minister Lim Hng Kiang explained that while the broader Global Schoolhouse initiative has successfully attracted renowned foreign universities and boosted Singapore's education brand, specific projects like Tisch Asia faced financial unsustainability due to factors like currency appreciation and high costs.
EDB provided S$11.68 million in loans and S$5.3 million in grants to Tisch Asia, which was established in 2007 but closed due to revenue shortfalls and cost overruns, despite NYU's subsidies and efforts to find sustainable options.
For the University of New South Wales Asia, EDB had provided S$15 million in loans and S$17.5 million in grants, as previously reported in Parliament.
The government is focused on minimizing disruption to affected students, with Tisch Asia remaining open until 2015 to teach out existing students, while EDB discusses loan repayment details with NYU.

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14 Jan 2013

Loan-To-Value Ratio of COE Financing for Private Vehicles

Ong Teng Koon asked if the Ministry would consider reducing the loan-to-value (LTV) ratio for COE financing for private vehicles and how a 10% drop in the LTV ratio would affect COE prices.
Tharman Shanmugaratnam, for the Prime Minister, stated that high COE prices are driven by factors like income growth, low interest rates, reduced vehicle growth, and fewer de-registrations, which are expected to persist.
The government is monitoring the impact of private transport costs on business and inflation, looking holistically at measures to promote COE market stability, and investing in public transport as a sustainable long-term solution.
Regarding the LTV ratio impact, Tharman noted that while lower LTV ratios could constrain credit for vehicle purchases, isolating their effect on COE prices is difficult due to other influencing factors, with past loan limits showing little discernible impact on COE prices.

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14 Jan 2013

Subsidies Granted for Part-Time Diploma Programmes

About 1,000 Singapore Citizens and Permanent Residents per year received subsidies for part-time polytechnic diploma programmes from 2009 to 2011.
Roughly 60% to 70% of each starting cohort completed their diplomas within the normal course duration, with flexibility allowing completion over up to 10 years.
The government disbursed a total of $30 million in subsidies over the three-year period, averaging $10 million annually.
Part-time diploma courses were revamped from 2011 to be more flexible and compact, with modular structures and shortened durations of up to 2½ years.
The updated framework aims to better cater to working adults’ needs by offering stacking modular certificates and more manageable course timelines.

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14 Jan 2013

Rewarding Taxi Drivers for Meeting New Taxi Availability Standards

Ang Hin Kee proposed rewarding taxi drivers who meet the new Taxi Availability standards and ensuring that any penalties on operators are not passed on to drivers.
Lui Tuck Yew explained that the standards were developed with stakeholders and are aimed at improving commuter experience, with LTA facilitating but operators deciding on driver incentives.
The Minister noted that no financial penalties will be imposed for the first six months of implementation, with a review to follow, and urged operators not to shift penalties to drivers, citing Comfort Delgro's commitment to support rather than burden its drivers.

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14 Jan 2013

Levy for Private Home Owners who Rent Out Their HDB Flats

Pritam Singh proposed a special levy on HDB rental income for private property owners to encourage selling and increase resale supply, potentially moderating prices.
Khaw Boon Wan noted that HDB owners who rent out flats already pay higher property taxes (10%) and income tax on rental income, alongside existing cooling measures to moderate the resale market.
He stated that HDB lacks the legal authority to impose such a levy and highlighted measures like banning Permanent Residents from subletting whole flats to prioritize owner-occupation.

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14 Jan 2013

Reviewing COE System for Buses and Goods Vehicles

Pritam Singh asked the Ministry for Transport to review the COE system for goods vehicles and buses to help small businesses and SMEs manage costs.
Lui Tuck Yew stated there are no plans to review the COE system for these vehicles, noting existing concessions such as separate bidding in Category C and lower vehicle taxes like the 5% ARF for most goods vehicles.
He highlighted that businesses already benefit from not competing with private car buyers in Categories A and B, and SMEs can tap various government schemes for growth and productivity.
The government will continue to assess SME needs during annual budget exercises to determine if additional support is required.
The response emphasized that the current system is designed to alleviate business costs without requiring a review of the COE framework for buses and goods vehicles.

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14 Jan 2013

Limiting Cash-Over-Valuation Amounts for HDB Flats

Dr Intan Azura Mokhtar proposed a cap of 10% on Cash-over-Valuation (COV) amounts for HDB resale flats.
Khaw Boon Wan explained that COV is the difference between the resale price (set by buyer and seller) and the market valuation (assessed by a valuer).
Khaw Boon Wan stated that capping COV would require the government to set resale prices, which he deemed undesirable and infeasible.

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14 Jan 2013

Benefits of Subsidised Training for Cleaning Industry Workers

In 2012, more than $3.7 million in training grants was disbursed for the cleaning industry, with about 15,000 workers trained since the Environmental Cleaning WSQ framework began in 2010.
Surveys show that 69% of trained workers felt more motivated and 17% received a pay rise, while 95% of companies plan to continue sending employees for training.
The Government has committed $6.1 million over two years to train 7,800 cleaners and is enhancing training delivery through mother-tongue languages, technology, and shorter modules.
Additional initiatives include collaborations with the National Environment Agency to share best practices and bring international experts to professionalise the cleaning industry.
The overall approach emphasizes lifelong learning to keep skills relevant and support workers’ job and wage progression.

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14 Jan 2013

Higher Interest Rates for HDB Loans than for Private Bank Loans

Zainal Sapari questioned why HDB loan interest rates are higher than commercial bank rates and whether HDB buyers are worse off.
Khaw Boon Wan explained that HDB market rates are based on a moving average of local bank rates and have a floor linked to CPF rates.
He noted that while commercial banks currently offer lower promotional rates, these are temporary and long-term comparisons show HDB concessionary rates have historically been lower than bank rates.
HDB's non-concessionary loans are rarely granted, only under exceptional circumstances upon appeal.

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14 Jan 2013

Helping SMEs Cope with Lower Foreign Worker Dependency Ratio

SMEs can seek help from Enterprise Development Centres and SPRING's Innovation & Capability Voucher to access workshops and consultancy for productivity improvements.
Productivity centres have been set up for the Construction, Manufacturing, and upcoming Services sectors to provide industry-specific diagnosis, projects, and consultant training.
The government is building a pool of industry-specific productivity consultants and training courses for sectors like retail, food services, and construction.
Various schemes offer grants with increased subsidy rates to help SMEs build capabilities in areas like branding, technology, and innovation to reduce manpower dependence.
The Ministry will consider new initiatives in the Budget to support SMEs adjusting to lower foreign worker dependency.

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14 Jan 2013

Numbers of Companies that Started and Folded

In 2012, 31,742 new companies were set up, an increase from 29,987 in 2011, with over half from wholesale and retail trade, financial and insurance activities, and professional, scientific, and technical sectors.
The number of companies that ceased operations was 17,930 in 2011 and 17,218 in 2012, with a breakdown by industry provided.
The Ministry of Finance cannot identify the percentage of SMEs among ceased companies due to filing exemptions for some entities, but it is likely that most were SMEs as they form the bulk of companies.

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14 Jan 2013

Target Timelines for Regional Comprehensive Economic Partnership

R Dhinakaran asked for specific timelines and target dates for the Regional Comprehensive Economic Partnership (RCEP) launched at the November 2012 ASEAN Summit.
Lim Hng Kiang stated that RCEP negotiations are expected to commence in early 2013 with the aim to conclude them by end-2015.
Senior Economic Officials from RCEP participating countries will meet in early 2013 to finalize the terms of reference and work plan for the negotiations.
RCEP is a 16-party free trade agreement involving ASEAN and its six regional partners, seen as a milestone for deeper regional economic integration.

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14 Jan 2013

Difference between Government and Business Sectors' Assessment of Productivity Growth Target

Zaqy Mohamad asked about the government's assessment of the Singapore Business Federation's concerns on productivity growth targets, gaps between expectations, and the effectiveness of existing initiatives.
Lim Hng Kiang explained that the 2-3% annual productivity growth target is ambitious but justified by past low growth and long-term averages, with potential gains in sectors like construction and retail.
The government remains committed to productivity improvements, with sector-specific roadmaps and initiatives showing early progress, such as in retail where training and technology adoption have benefited companies.

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14 Jan 2013

Getting Economically Inactive Singaporeans Back to Work

The Ministry of Manpower does not keep a precise record of economically inactive Singaporeans but estimates there were around 418,000 residents aged 25-64 in June 2012, with 90,000 intending to seek work within two years.
To help this group re-enter the workforce, the government provides funding support for flexible work arrangements through the Work-Life Works! Fund and the Flexi-Works! scheme, which helps employers defray costs like job redesign and training.
The Singapore Workforce Development Agency offers skill-upgrading programmes, including Workfare – Skill Up, to improve the job readiness of economically inactive individuals and address manpower shortages.

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14 Jan 2013

Economic Expansion Incentives (Relief from Income Tax) (Amendment No 2) Bill

The Bill replaces the Integrated Industrial Capital Allowance scheme with the Integrated Investment Allowance scheme, providing additional allowances and more flexibility for companies placing equipment overseas.
The Development and Expansion Incentive's maximum tax relief period is extended from 20 to 40 years to support long-term commitments by companies in Singapore.
Amendments include measures to ensure tax incentives are used sparingly, with milestones to track company commitments and benefits for both local and foreign companies.

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14 Jan 2013

Singapore Accountancy Commission Bill

The Bill establishes the Singapore Accountancy Commission (SAC) to lead the transformation of Singapore into a leading global accountancy hub, following recommendations from the Committee to Develop the Accountancy Sector (CDAS).
It introduces a new Singapore Qualification Programme (SQP) and the Chartered Accountant of Singapore designation, with the Institute of Certified Public Accountants of Singapore (ICPAS) appointed as the Designated Entity to oversee registration and membership.
Concerns were raised about the role of ICPAS, potential duplication of functions, and the need for clear transitional arrangements for existing CPA Singapore holders and students, with the Minister assuring that the SAC will act as an umbrella body and ICPAS will retain a critical role.
The Minister confirmed that only one professional designation (Chartered Accountant of Singapore) will be recognized, and transitional arrangements are being developed to ensure fairness for affected groups, including current CPAs and university students.
The Bill was passed with support, emphasizing collaboration between the SAC and ICPAS to enhance Singapore's accountancy sector and secure international mutual recognition agreements.

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14 Jan 2013

Stamp Duties (Amendment) Bill

The Minister of State for Finance introduced the Stamp Duties (Amendment) Bill 2013 to provide stamp duty relief for certain mergers and acquisitions and to improve administrative and legal clarity in the stamp duties regime.
Christopher de Souza supported the bill but highlighted concerns about foreign investment driving up property prices, suggesting that Singapore could consider foreign ownership restrictions like those in Hong Kong and Australia to promote a sustainable residential property market.
Assoc Prof Fatimah Lateef raised specific queries about the application of Seller's Stamp Duty to properties used for religious purposes, the treatment of local versus foreign acquiring companies under the M&A scheme, and the timeline for changes when property zoning is altered.
The Minister addressed these queries by clarifying that religious use on residential premises is generally not permitted but would not attract SSD if authorized, and that M&A relief is targeted at Singapore-based companies with substantive operations.
The bill was read a second time, considered in committee, and passed without amendments.

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14 Jan 2013

Payment Systems (Oversight) (Amendment) Bill

The Acting Minister for Culture, Community and Youth introduced the Payment Systems (Oversight) (Amendment) Bill to strengthen the Monetary Authority of Singapore's (MAS) oversight of designated payment systems and align regulations with international standards, following industry consultation.
The amendments exempt MAS from certain parts of the Act for its own operated system (MEPS+), introduce confidentiality provisions for MAS reports, and allow MAS to exercise immediate emergency powers during crises affecting payment systems.
During the debate, Assoc Prof Fatimah Lateef supported the Bill but raised clarifications on MAS's self-regulation, the $30 million stored-value facility threshold, supervisory resource needs, cross-border transaction impacts, and security challenges for online payments.
The Minister addressed these points by explaining MAS's internal governance framework, the rationale for the threshold, no change in supervisory scope, no impact on foreign transactions, and MAS's ongoing efforts to enhance IT security for payment services.
The Bill was read a second time, considered in committee, and passed without amendment.

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