Economy & business

• Mr Saktiandi Supaat questioned how much of the EV tax rebates reach consumers and whether dealers absorb them via markups or higher COE bids.
• He asked if the Government should reform the COE system to accelerate greener vehicle uptake.
• Minister Chee Hong Tat deferred the reply to the 12 November 2024 Parliament sitting, referencing a related review on vehicle growth policy and rebates.

• From financial years 2021 to 2023, GovTech’s average annual expenditure was $1.7 billion, accounting for less than 2% of total Ministry spending.
• GovTech is almost fully funded through central government grants and payments from other government agencies for its services, with no significant change expected in the near future.
• There are currently no stated plans to increase GovTech’s revenue-generating capacities, and no key milestones or timelines for such initiatives have been provided.

• Tin Pei Ling questioned if local vernacular media will keep projecting Singapore’s voice globally and if funding for such efforts is adequate.
• The Minister confirmed that vernacular media are vital for showcasing Singapore’s values and information to international audiences.
• She stated that government funding is allocated to support vernacular capabilities at Public Service Media entities, with collaboration from Singapore Press Holdings and Mediacorp.
• The Minister emphasized that resources are managed efficiently in partnership with media organizations.
• The response highlighted the dual role of vernacular media in serving local communities while promoting Singapore internationally.

• Starting from 2025, carbon tax-liable companies can purchase international carbon credits to offset up to 5% of their 2024 taxable emissions.
• Singapore has signed implementation agreements with Ghana and Papua New Guinea, with the Ghana partnership actively assessing projects and the Papua New Guinea agreement pending parliamentary approval.
• The government is pursuing similar carbon market partnerships with over 20 other countries and supporting private sector participation through initiatives like business missions and the Singapore Carbon Market Alliance.

• Joan Pereira asked the Minister for Health if policyholders above 55 could opt out of the enhanced MediShield Life scheme to retain existing premiums and coverage, citing concerns over premium increases.
• Ong Ye Kung emphasized that MediShield Life is a national scheme requiring universal participation for collective risk-sharing, with no opt-out allowed.
• The government announced $4.1 billion in support measures to offset $1.8 billion in premium increases over three years, ensuring most Singaporeans face no net premium rise.
• Support includes enhanced subsidies and MediSave top-ups, with specific protections for Pioneer and Merdeka Generation seniors.
• Additional Premium Support will assist those still struggling to pay premiums despite the overall cushioning measures.

• The Government expects domestic interest rates to ease alongside global trends, which may benefit mortgage borrowers, retirement savings via CPF interest rate floors, and business borrowing due to lower costs and strong bank lending capacity.
• Existing property market cooling measures like ABSD, LTV limits, and TDSR remain in place to ensure stability and prevent knee-jerk reactions in the property sector.
• While the rate cut may improve sentiment, households and businesses are advised to maintain financial prudence due to ongoing uncertainties from geopolitical tensions and trade frictions.

• The Energy Conservation (Amendment) Bill introduces minimum energy efficiency standards (MEES) for existing industrial energy systems, starting with chilled water systems, to reduce energy consumption and support Singapore's net-zero goals.
• The Bill requires energy-intensive facilities to comply with MEES by December 2025, with less energy-intensive facilities having until December 2029, and provides government funding support like the Energy Efficiency Grant (EEG) to help businesses, especially SMEs, afford upgrades.
• Amendments also expand energy efficiency opportunities assessments to more development works and aim to improve report quality by requiring certified energy managers to endorse submissions, while maintaining flexibility for companies facing genuine constraints.

• The Economic Expansion Incentives (Amendment) Bill introduces a new 15% concessionary tax rate tier under the Development and Expansion Incentive (DEI) to align with global tax standards like BEPS 2.0, while preserving existing 5% and 10% tiers for eligible companies, including SMEs.
• The Bill expands the DEI eligibility for a 40-year award tenure to non-headquarter service companies and extends the scheme until December 2028 to support long-term investments in strategic sectors like AI and aerospace.
• Amendments to the Investment Allowance Scheme provide greater flexibility by allowing the Minister to prescribe qualifying projects via subsidiary legislation, enabling quicker adaptation to evolving economic priorities such as green technology and digitalization.
• Ministers emphasized that tax incentives are granted judiciously based on economic benefits like job creation and investment, with robust compliance mechanisms including penalties for non-met commitments and an appeals process.
• The debate highlighted Singapore’s need to maintain competitiveness amid global tax reforms, with lawmakers supporting the Bill while calling for periodic reviews of the incentive toolkit to benefit both multinational enterprises and local SMEs.

• The bill aims to protect individuals from remote scams by empowering specified officers to issue temporary restriction orders to banks, prohibiting certain transactions and credit facilities.
• The Minister of State for Home Affairs, Ms Sun Xueling, presented the bill on behalf of the Minister for Home Affairs, marking its first reading in Parliament.
• The bill is scheduled for a second reading at the next available parliamentary sitting and will be printed for further consideration.

• The Customs (Amendment) Bill was presented to Parliament by the Second Minister for Finance, Mr Chee Hong Tat, to amend the Customs Act 1960.
• The bill received its first reading and was scheduled for a second reading at the next available sitting of Parliament.
• The bill was also ordered to be printed following the parliamentary procedures.

Melvin Yong Yik Chye asked the Minister for Transport about the feasibility of regulations for airlines to provide hassle-free refunds for significant flight delays following a neighboring country’s policy. Chee Hong Tat stated that there is no international standard for compensation and refunds for flight delays, as policies vary by country. In Singapore, consumer protections are in place through the Consumers Association of Singapore and the Small Claims Tribunal, allowing passengers to pursue claims against airlines for delays.

Derrick Goh questioned the Prime Minister about the increase in tax recoveries from $500 million to $857 million in the financial year ending March 2024, seeking insights on the causes and compliance measures. Chee Hong Tat explained that the Inland Revenue Authority of Singapore uses a risk-based approach and data analytics for targeted audits, leading to a 72% increase in tax recoveries due to high-value cases. The Government is committed to addressing non-compliance through stringent penalties and enhanced enforcement powers, while also collaborating with law enforcement to tackle tax crime. IRAS is focused on upskilling its staff and refining audit methods to improve tax compliance and education.

Yip Hon Weng asked about the growth potential of the Single Family Office (SFO) sector in Singapore and the strategies in place to equip the local workforce with necessary skills. Gan Kim Yong responded that the SFO sector is expected to grow, attributing Singapore's reputation in asset management. Collaborations between several organizations have led to the development of skills maps and over 60 relevant training courses to meet the talent needs of the sector. As of December 31, 2023, more than 1,700 locals were employed by SFOs benefiting from tax incentives, and SFOs also support local service providers in various ancillary services.

Yip Hon Weng asked about the trend of Single Family Offices (SFOs) from emerging markets like the Middle East and China being established in Singapore, requesting updates and considerations for ensuring transparency and legitimacy. Gan Kim Yong responded that while many SFOs receiving tax incentives are from emerging markets, their share among all SFOs has remained stable. All SFOs seeking MAS tax incentives must comply with due diligence checks by financial institutions and are screened for potential risks. MAS proposed a consultation paper to enforce that all SFOs in Singapore establish relations with regulated financial institutions for enhanced anti-money laundering measures.

Derrick Goh questioned the government regarding the rise in bankruptcies in the first half of 2024 despite an improving economy, concerns related to this increase, and measures to promote financial prudence. Gan Kim Yong responded that the number of bankruptcy orders has remained stable and below pre-COVID-19 levels, with household debt also stable and non-performing loans low. Around 40% of bankruptcies were due to business failures, and individuals facing debt challenges can seek assistance from social service agencies. The government has implemented safeguards through the Monetary Authority of Singapore to promote prudent borrowing, along with financial education initiatives like MoneySENSE to enhance public money management skills.

Hazel Poa raised a question about whether the Monetary Authority of Singapore (MAS) could provide guidelines for stateless persons with Special Passes to open bank accounts. Gan Kim Yong responded that MAS does not prevent banks from offering accounts to these individuals. Banks assess each application individually, and some have already opened accounts for stateless persons holding Special Passes.

Ang Wei Neng questioned the Deputy Prime Minister about the potential effects of the escalating conflicts in the Middle East on energy prices, inflation, and the Singapore economy. Gan Kim Yong responded that the current impact on Singapore's economy has been limited, with the involved countries not being major trading partners. Although Brent crude oil prices have risen recently, they remain below last year's average. The situation is volatile, and further escalations could affect global oil prices, growth, and inflation. The government will continue to monitor developments closely.

Gan Thiam Poh raised concerns about the monitoring of wrongly credited payments via PayNow to previous mobile subscribers. In response, Gan Kim Yong indicated that the Monetary Authority of Singapore does not track such cases but provides guidance for financial institutions regarding erroneous transfers. Banks are not notified of changes to linked mobile numbers unless communicated by users, but they do have procedures for handling "recycled" numbers. New users are advised not to use recycled numbers for transactions until the delinking process is complete, and customers are encouraged to update their banks when changing numbers. MAS will monitor the situation for potential process enhancements.

Chee Hong Tat addressed concerns regarding a Bill related to the proposed acquisition of Income Insurance Limited by Allianz, noting that the Workers' Party plans to abstain from supporting the Bill. Key issues discussed included balance between regulation and investor confidence, the need for inter-agency information sharing without compromising commercial confidentiality, and clarifications on capital reduction plans. The Government emphasized its commitment to maintaining Singapore's business-friendly environment while ensuring that regulatory powers address public interest, particularly for co-operative insurers. The urgency of the Bill was justified due to ongoing shareholder considerations related to the acquisition.

The debate centered around the Insurance (Amendment) Bill, prompted by concerns regarding the proposed acquisition of a majority stake in Income Insurance by Allianz. The Second Minister for Finance, Chee Hong Tat, stated that the proposed transaction raised issues regarding public interest and the mission of Income, a corporate entity originally formed as a co-operative to provide affordable insurance products. The Government, particularly the Ministry of Culture, Community and Youth (MCCY), expressed its reservations about the transaction, chiefly due to a planned capital extraction of S$1.85 billion post-acquisition which could jeopardize Income's social mission.

Several Members of Parliament supported the Bill, emphasizing the need for a protective framework to ensure that such co-operative entities uphold their social objectives amid corporate changes. Concerns were raised about the potential implications for foreign investments in Singapore and the hurried nature of the legislative amendments, sparking discussions about regulatory certainty and transparency. The Bill aims to allow the Minister overseeing the co-operative societies to have a say in approvals under the Insurance Act in transactions involving co-op-affiliated entities, marking a significant regulatory shift.

The discussion highlighted the complexities of balancing business interests with social commitments, illustrating the ongoing challenges in maintaining the integrity of Singapore's unique co-operative model while adapting to market dynamics. The Bill received support from various parties while acknowledging the need for clarifications and discussions on its long-term implications for Singapore’s business environment.