Economy & business

Leong Mun Wai requested details about Income Insurance Ltd's exemption from section 88 of the Co-operative Societies Act during its corporatisation and the safeguards ensuring compliance with its commitments. Edwin Tong Chun Fai explained that the corporatisation exercise and the exemption were discussed in Parliament, referencing previous Ministerial Statements and debates for details. The exemption was granted based on discussions between Income and the Ministry, aiming to provide operational flexibility and build a strong capital base. Income remains under regulatory oversight, requiring approval from the Monetary Authority of Singapore for significant changes to its business operations.

Jamus Lim asked if HDB would consider renegotiating rental contracts for coffee shops if patronage was lower than expected after a successful tender. Desmond Lee explained that HDB owns around 390 coffee shops with typically three-year tenancies, and rents are determined through a tender process and assessed by professional valuers upon renewal, with no renegotiation during tenancies. Operators facing difficulties can approach HDB for assistance, leading to stable rents and occupancy rates, with most operators (97%) seeing unchanged or reduced rents over the past five years, while only 1% returned their coffee shops due to poor business.

Leong Mun Wai raised questions about the investigation of Income Insurance Ltd’s financial advisor regarding the Income-Allianz transaction and the company's capital reduction plan. He also inquired whether the Ministry was aware of the capital reduction and its alignment with the co-operative movement's regulations. Gan Kim Yong clarified that the government considers the planned extraction of capital unacceptable, leading to the introduction of an urgent Bill to amend the Insurance Act, with bipartisan support except for some abstentions. The capital reduction differs from regular dividend payouts and does not align with representations made when seeking exemptions under the Co-operative Societies Act. The financial adviser in question was appointed to assist with the transaction, but the deal is still in preliminary stages and has not yet required an independent financial adviser for evaluation.

Gan Thiam Poh questioned the Prime Minister about targets for maintaining a sufficient working-age population to support the ageing demographic and the government's policy measures to balance the needs of seniors without financially burdening future generations. Indranee Rajah responded that the government does not set specific targets for the working-age population but focuses on keeping seniors healthy and productive. Strategies include investing in skills for older workers, promoting age-friendly workplaces, and gradually raising retirement ages. The government is also managing healthcare expenditures and promoting programs like Age Well SG to support seniors living at home. These efforts aim to help seniors age well while minimizing the burden on younger generations.

Gerald Giam Yean Song questioned the Minister for Sustainability and the Environment about increasing local food uptake by major institutional buyers for Government entities and whether long-term contracts or price support could incentivize this. Grace Fu Hai Yien responded that the Singapore Food Agency (SFA) is promoting local produce through initiatives like awarding extra points in procurement for businesses committed to sustainability. SFA also collaborates with the Singapore Agro-Food Enterprises Federation to facilitate long-term contracts between farmers and food businesses, enhancing demand certainty. Initiatives include launching pilot projects with FairPrice to promote local products and in-store marketing efforts to encourage consumers to choose local produce. The viability of the local agri-food sector ultimately relies on consumer demand, and SFA is committed to further exploring ways to boost local food demand.

He Ting Ru raised questions regarding security measures for banks offering digital banking services to minors under 16, including differences from adult accounts and remediation processes for unauthorized transactions. Gan Kim Yong clarified that accounts for children can only be opened by parents, with lower transaction limits and parental controls in place to monitor activities. Banks have security measures such as real-time alerts and a kill switch to block transactions, and they are required to promptly investigate reports of fraudulent activity. Investigations must be completed within 21 to 45 business days, depending on case complexity, and banks are responsible for mitigating fraud risks under the Shared Responsibility Framework.

Louis Ng Kok Kwang asked the Minister for Culture, Community and Youth about the data used to support the focus on overseas emergency humanitarian assistance in the Overseas Humanitarian Assistance Tax Deduction Scheme (OHAS). Edwin Tong Chun Fai explained that the OHAS aims to balance support for overseas giving with the local charity sector's needs, as many Singaporeans resonate with overseas humanitarian causes. Generous donations have been observed during crises like the Türkiye and Syria earthquake and the Israel-Hamas conflict, with significant amounts raised by Singapore charities. The Government plans to assess the effectiveness of the OHAS after its four-year pilot and will closely monitor donation trends to ensure both overseas and local charities receive support.

The Second Minister for Finance proposed an increase of S$450 billion to the issuance limit of Government securities and Treasury Bills, raising it to S$1.515 trillion, intended to last until 2029 for specific investment needs. The increase largely supports the Central Provident Fund's investment requirements as well as the development of Singapore’s debt market. Assoc Prof Jamus Lim expressed concerns regarding the significant size of the increase, the impact of rising interest rates on repayment burdens, and the effectiveness of debt issuance in supporting the domestic economy. Minister Chee responded by asserting that current and future borrowings are backed by sufficient government assets, highlighting strong financial positions and ongoing efforts to grow financial markets. The motion to raise the limit was ultimately agreed upon in Parliament.

The Singapore International Commercial Court (International Committee) Bill aims to establish a new International Committee to handle appeals from prescribed foreign jurisdictions on international commercial disputes. The Bill is part of Singapore's strategy to enhance its status as a global dispute resolution hub and offers flexible arrangements for international legal cooperation. The International Committee will consist of both local and international jurists and will not be considered a court of Singapore, ensuring a diverse legal representation. The establishment of the International Committee is expected to create opportunities for cross-border legal work and boost the legal sector by facilitating appeals from various jurisdictions, starting with a collaboration agreement with Bahrain. Member discussions raised important points regarding the types of cases, the implications of the Committee's decisions, and potential collaborations with other large economies like China and India.

Gerald Giam Yean Song raised concerns about the impact of a major e-commerce platform's extended payment terms on small businesses in Singapore and advocated for regulations ensuring prompt payment to support these merchants' cash flow. The Minister of State for Trade and Industry, Alvin Tan, acknowledged feedback on the changes but noted that they are part of private commercial agreements and suggested affected merchants engage directly with the platform. He mentioned that the Ministry and Enterprise Singapore are taking steps to uplift the ecosystem for small- and medium-sized enterprises (SMEs) and provided options like the Enterprise Financing Scheme for those facing cash flow issues. Finally, the Minister noted existing initiatives to support SMEs in e-commerce and internationalization, emphasizing continued efforts to assist small merchants.

Desmond Choo raised concerns about the Shared Responsibility Framework, asking if the cooling-off period for digital security tokens could be adjusted for high-risk activities and if real-time fraud detection thresholds could be enhanced for more vulnerable customers. Yip Hon Weng highlighted the need for better support for seniors and less tech-savvy individuals in navigating the framework and for clearer communication regarding payout decisions for scam victims. The Minister of State, Alvin Tan, acknowledged the importance of balancing consumer protection with convenience, stating that financial institutions are expected to consider individual customer vulnerabilities in fraud surveillance. He also mentioned ongoing efforts to raise public awareness and outreach initiatives aimed at assisting vulnerable groups, including multilingual communication about the framework.

Dr. Tan Wu Meng raised issues regarding the portability of Integrated Shield Plan (IP) insurance and the challenges faced by policyholders when switching providers after changes in coverage terms. The Minister of State for Health, Rahayu Mahzam, acknowledged that the need for portability is driven by policyholders unhappy with coverage changes, difficult claim processes, and rising premiums as they age. She explained that while IP portability could enhance competition, it is uncommon internationally, and implementing it would require significant structural changes, such as a risk equalization fund. Rahayu confirmed that IP insurers should also have social responsibility towards policyholders, especially as many current products face sustainability challenges, necessitating a reassessment of their design to avoid future issues.

Chua Kheng Wee Louis and He Ting Ru raised concerns regarding the financial sustainability and nutritional quality of food provided in school canteens, questioning the Ministry of Education about possible subsidies for vendors and the impact on students from various socio-economic backgrounds. The Minister for Education, Chan Chun Sing, highlighted current measures like food quality monitoring, adherence to nutritional guidelines, and pricing assistance for stallholders. He acknowledged challenges in maintaining school canteen operations and discussed exploring alternative models like central kitchens while emphasizing cooperation with the Health Promotion Board for nutrition-related matters. The Minister noted the importance of providing diverse food options, including the use of vending machines while addressing the rising ingredient costs, suggesting collaborations with local and overseas producers.

• Gerald Giam asked which US ETF equity index funds CPF members can invest in under CPFIS, whether the Ministry plans to allow direct investment in US ETFs due to higher costs of existing unit trusts, and if CPF will proactively add low-cost US ETF index funds to improve returns.
• Tan See Leng explained that only SGX-listed ETFs are allowed under CPFIS to safeguard members' interests, as foreign products are subject to overseas regulatory risks beyond the Government's oversight.
• He noted that SGX-listed ETFs with US equity exposure exist, and fund managers can apply for CPFIS inclusion based on commercial considerations, with the CPF Board assessing factors like fees and track records.
• Tan See Leng stated that CPF members already have access to low-cost, passively-managed unit trusts with US equity exposure through CPFIS, which have expense ratios comparable to ETFs.

• The Sector Transformation Fund was introduced in 2022 to help arts companies build financial and operational resilience and pursue innovation, supporting projects that generate market demand, improve efficiency, or develop diverse revenue streams.
• The fund has supported nearly 40 companies for consultancy or transformation projects, enabling them to identify market gaps, invest in technology, and create new markets, such as Sri Warisan’s cloud-based digitization and TrendLit’s collaboration with artists for new merchandise.
• The National Arts Council complements the fund with other initiatives like the Arts x Tech Lab and the Acceleration Programme for the Arts to further support transformation and innovation in the arts sector.

• He Ting Ru questioned the Ministry of Health about Singaporeans seeking dental treatment in Johor Bahru, cost differences, clinic closures, and measures to boost the dental industry's competitiveness.
• The Ministry does not track data on Singaporeans seeking dental care in Johor Bahru or procedure costs there.
• Dental clinics in Singapore increased by over 10% from 2019 to 2023, contrary to closures.
• The Ministry emphasized higher business costs in Singapore but committed to ensuring dentists are well-trained, services are safe and high-quality, and affordability through support schemes.
• No specific new measures were announced to directly counter regional competitors, focusing instead on existing quality and affordability frameworks.

• Mr Zhulkarnain Abdul Rahim proposed broadening tax relief for Parent Relief and Parent Relief (Disability) to include dependants above 50 years old or with annual income not exceeding $5,000 to encourage seniors to stay active in the workforce.
• Lawrence Wong explained that Parent Relief aims to promote filial piety and support taxpayers caring for parents, grandparents, and in-laws, noting that Budget 2024 increased the income threshold for such reliefs from $4,000 to $8,000 starting in the 2025 Year of Assessment.
• Wong highlighted other government schemes supporting senior employment, including the Senior Employment Credit, Part-Time Re-Employment Grant, SkillsFuture Level-Up Programme, and Career Conversion Programmes.

• The Prime Minister noted that Singapore uses tax incentives judiciously to attract investments, with incentives awarded only when agencies deem them necessary and beneficial to the economy.
• He emphasized that the value of incentives granted is a fraction of the projected total investment value, aiming to secure net economic benefits for Singapore.
• The response highlighted that tax revenue forgone from incentives is notional, as the tax base might not remain unchanged without such measures, suggesting incentives can expand the overall tax base.

• Louis Ng Kok Kwang asked for the next five largest categories of government procurement by value, excluding construction and ICT.
• Lawrence Wong listed the top five categories: Facilities Management, Professional Services, Transportation, Dental/Medical/Laboratory, and Administration & Training.
• These categories are based on awards made through the Government Electronic Business (GeBIZ) platform.

• Christopher de Souza asked whether MAS will regulate fees and charges for property loan refinancing.
• Gan Kim Yong, responding for the Prime Minister, stated that MAS requires financial institutions to provide clear disclosure of fees, including those for refinancing during a lock-in period.
• He added that MAS is not considering direct regulation of fees, as existing disclosure rules support market competition and informed consumer choice.