Economy & business

Kenneth Tiong highlighted the potential for Singapore to become a global gold trading hub, drawing parallels with historical financial policies that shifted reserve assets offshore and calling attention to the increasing importance of gold as a reserve asset in light of geopolitical tensions and declining trust in US dollar holdings. He outlined a five-pillar industrial policy for gold, emphasizing the need for laws ensuring custody protection, establishing Singapore as a sovereign anchor for gold reserves, expanding refining and verification capabilities, creating a local gold standard, and reviving financial instruments like the Gold Forward Offered Rate. In response, Minister Chee Hong Tat acknowledged the opportunity to develop Singapore's financial sector with a focus on gold, affirming the government's commitment to adapt policies and collaborate with industry while building on the foundations of a strong regulatory framework and local talent development. Chee also emphasized the importance of differentiating Singapore's financial niche from that of other global centers like Dubai.

The Prime Minister presented the government's financial policy for the fiscal year 2026, emphasizing the need to adapt to a changing global landscape and the economic challenges it poses. He outlined a moderate growth forecast of 2% to 4%, stating that Singapore's economic resilience is critical due to rising global uncertainties and fragility. Key initiatives in the budget focus on harnessing artificial intelligence, advancing economic strategies, and strengthening support for families, lower-wage workers, and global talent integration. The government aims to enhance public services, security, and sustainability measures as part of a long-term vision for a united and inclusive Singapore.

Gerald Giam Yean Song questioned the Minister for Digital Development regarding projected spending on government strategies for AI and whether the government will fund ambitious projects through a government-owned AI corporation. The Senior Minister of State, Tan Kiat How, emphasized that Singapore's National AI Strategy 2.0 focuses on utilizing AI for public benefit, with investments in building AI capabilities and collaborating with both local and international entities. Giam raised concerns about potential data drain from foreign technology giants and suggested policies for knowledge transfer and fees for using public data sets. Tan assured that Singapore has a strong data protection framework in place for all companies, requiring compliance with the Personal Data Protection Act and sector-specific regulations.

Kenneth Tiong Boon Kiat asked the Minister for Manpower to define "good jobs," identify measurable indicators for tracking job quality, and consider adopting a multi-dimensional job quality framework like that of the OECD. Dr. Koh Poh Koon explained that wages are a key measure of job quality, as perceptions of a "good job" vary by individual circumstances, and he emphasized the need to track multiple labor market indicators. Tiong raised supplementary questions regarding the absence of a clear job quality framework, Singapore's low wage share of GDP compared to OECD countries, and the necessity for clear benchmarks in assessing the uplift of specific roles. Koh acknowledged the importance of measuring wage growth and other dimensions of job quality, and noted that ongoing discussions within the Economic Strategy Review will address the specifics of skilled roles in the future.

Yip Hon Weng questioned the Deputy Prime Minister about the impact of the 10% US tariff on Singapore and the decrease in exports to the US. The Minister of State for Trade and Industry clarified that while the tariffs are not expected to directly affect Singapore's inflation, there could be indirect impacts from higher US prices affecting exports to Singapore. Despite the tariff situation, Singapore's import prices have decreased, resulting in lower inflation rates for consumers. The Ministry monitors macro price pressures and uses various indicators to assess impacts on different income groups, particularly lower-income households, to ensure targeted support.

He Ting Ru questioned the Acting Minister for Transport regarding the analysis of the marginal bidder effect in COE auctions and how corporate bids might influence clearing prices in Categories A and B. Jeffrey Siow explained that COE bidding operates as a uniform price auction, where the clearing price is determined by the highest unsuccessful bid plus one dollar. He noted that a majority of COEs in Categories A and B were won at bids close to the clearing price, refuting claims that a Pay-As-You-Bid system would lower prices. He also provided evidence that corporations showed price sensitivity, as demonstrated by a decrease in winning bids from car-leasing companies in recent auctions.

He Ting Ru queried the Acting Minister for Transport about stress-testing on car-leasing sector defaults impacting COE prices and the used-car market, as well as measures to address in-house financing practices. Jeffrey Siow responded that private hire cars make up about 15% of the car population, and defaults are unlikely to significantly affect COE prices or the used-car market long-term. Financial institutions must follow MAS's motor vehicle financing rules, but alternative arrangements by dealers are unregulated, prompting the government to monitor the situation and potentially tighten regulations to prevent abuses.

Chua Kheng Wee Louis requested data on Employment Pass applications granted below the qualifying salary over the past ten years, categorized by industry sector, along with the factors influencing such flexibility. Tan See Leng highlighted that qualifying salaries for Employment Passes have risen from $3,300 to $5,600 between 2016 and 2025, with a slight increase in approved applications. The Ministry of Manpower collaborates with other agencies to offer targeted flexibilities aimed at supporting Singapore's economic goals, including job creation for locals.

Gerald Giam Yean Song asked about the monthly median change in net take-home pay for platform workers enrolled in the CPF contribution scheme since January 2025, potential fare reductions by platform operators, and measures to prevent such practices. Tan See Leng reported that the median net earnings for these workers fluctuated between a decrease of 12.7% and an increase of 8.2%, without a consistent trend. He noted no feedback indicating a systematic reduction in fares or incentives related to CPF contributions. A set of industry-wide principles was established to guide fair practices among platform operators regarding fares and incentives for workers.

Shawn Loh asked about the number and proportion of Singaporean workers in outward-oriented versus domestic-oriented sectors, both currently and compared to ten years prior. Minister Tan See Leng reported that as of December 2025, outward-oriented sectors employed 1.25 million residents (50.5%), while domestic-oriented sectors employed 1.21 million residents (48.7%). The employment distribution has remained similar to ten years ago, with outward-oriented sectors employing 1.14 million (50.4%) and domestic-oriented sectors 1.10 million (48.6%). The nature of jobs will undergo changes due to business transformation and technology adoption, and the government plans to work with partners to equip Singaporeans with relevant skills for future jobs.

Shawn Loh raised concerns about the impact of artificial intelligence (AI) on the workforce, asking the government to study whether AI serves as a complement or substitute for workers, particularly between SMEs and MNCs. Tan See Leng responded that the government is examining AI's effects on the labor market and noted that the impact depends more on business activities and job roles rather than firm size. The government supports workforce transformation and reskilling for all firms, providing tailored assistance based on their specific needs. Commitment remains to help workers adapt to AI and assist those displaced through workforce transition programs.

Chua Kheng Wee Louis asked about government studies on artificial intelligence (AI) software adoption and usage by companies, distinguishing between small and medium enterprises versus multinational corporations, as well as individuals in Singapore. Mrs. Josephine Teo responded that the government monitors AI adoption as part of digital economy efforts, and since 2023, the Infocomm Media Development Authority has published the annual Singapore Digital Economy Report with relevant data. She suggested that the member refer to the report for more information.

Gerald Giam Yean Song questioned the Minister for Foreign Affairs about the impact of the US withdrawal from certain international organizations in January 2026 on Singapore, including potential increases in financial contributions and the government's investment approach. Vivian Balakrishnan indicated that this inquiry had already been addressed in a previous response concerning the effects on Singapore's interests related to the US withdrawal.

Assoc Prof Jamus Jerome Lim posed questions regarding the proportion of Singapore's foreign currency reserves that are hedged, changes in the cost of US dollar hedges over the past five years, and any internal thresholds for hedging activities by state investment agencies. Jeffrey Siow responded that GIC and Temasek manage their investments to achieve long-term returns while considering foreign exchange risks and mitigating them as needed. He noted that the costs of hedging the US dollar to Singapore dollar have increased over the past five years, but detailed hedging positions and internal thresholds are not disclosed for commercial reasons.

Kenneth Tiong Boon Kiat raised questions regarding the commercial viability of deep tech projects funded by Research, Innovation and Enterprise (RIE), the potential study of Israel's innovation grant model, and outcome-linked funding mechanisms in RIE2030. Gan Kim Yong responded that assessing commercial viability in deep tech is complex and involves various metrics, with about 80% of corporate laboratories expected to generate licensing revenue under RIE2025. Singapore monitors best practices in deep tech commercialization from countries like Israel while adapting its governance and funding structures to suit its ecosystem. The government captures value from RIE initiatives through licensing revenue and equity stakes in successful startups, fostering collaborations that enhance the economy.

Gabriel Lam asked the Prime Minister if the Monetary Authority of Singapore (MAS) has assessed risks to consumers regarding fraudulent transactions when victims are overseas or unable to receive timely SMS alerts. Gan Kim Yong clarified that MAS requires banks to provide real-time transaction alerts via multiple channels, including SMS, in-app, and email notifications. Customers are encouraged to use multiple notification methods to stay informed, especially while overseas. Banks must evaluate scam cases fairly, considering the timing of notifications, and dissatisfied customers can seek mediation from the Financial Industry Disputes Resolution Centre.

Gabriel Lam questioned the Prime Minister regarding the need for clearer regulatory guidance on consumer protection in cases of fraudulent transactions involving third-party payment platforms. Gan Kim Yong responded that existing guidelines, including the E-Payments User Protection Guidelines, define responsibilities for financial institutions regarding unauthorized transactions, emphasizing protective measures like cooling-off periods and real-time alerts. Customers must report fraudulent transactions to the involved financial institutions, which are expected to investigate and determine liability based on specific circumstances, rather than solely attributing blame to another institution. If dissatisfied with the investigation outcomes, customers can seek mediation or adjudication through the Financial Industry Disputes Resolution Centre (FIDReC).

Edward Chia Bing Hui requested data on the real-term growth of tourism receipts from 2019 to 2024, adjusted for inflation. Gan Kim Yong reported a 4.3% decline in real tourism receipts during this period, but noted a positive trend in spending per visitor, which rose by 10.7%. In 2024, tourism receipts reached $29.8 billion, with a 5.8% growth in receipts compared to the previous nine months. The Singapore Tourism Board aims to target high-growth visitor segments and enhance tourism capabilities, demonstrating the effectiveness of their Quality Tourism strategy.

Assoc Prof Jamus Jerome Lim requested an update on Singapore's negotiations with the US concerning tariffs and economic restrictions, particularly related to semiconductors and pharmaceuticals. Gan Kim Yong confirmed that Singapore's exports to the US face a reciprocal tariff rate of 10%, alongside various Section 232 tariffs affecting steel, aluminium, copper, and lumber. Ongoing Section 232 investigations into semiconductors and pharmaceuticals currently exempt them from the 10% tariff. Discussions are ongoing with US counterparts, and the Ministry is engaging with industries to assess the potential impacts, with updates to follow.

Shawn Loh asked the Minister for Manpower about potential long-term support for SMEs to help maintain employment and wages for older workers due to productivity challenges from rapid technological changes. Tan See Leng emphasized the value of senior workers' skills and experience, highlighting the Senior Employment Credit (SEC) that offers wage offsets for employers of older workers. The SEC has been extended to the end of 2026 while a review of senior employment strategies is conducted. A Tripartite Workgroup on Senior Employment is actively studying ways to support employers in managing a multi-generational workforce and enabling senior workers to remain productive.