Economy & business

Dennis Tan Lip Fong questioned the Minister for Home Affairs about suspicious transaction reports related to the Rivaton Group prior to arrests in Japan for money laundering, including query on investigation status and amount involved. Sun Xueling confirmed that reports were filed after Japanese media coverage in May 2024. She stated that Singapore authorities are in contact with foreign counterparts and providing assistance, but further details cannot be shared at this time.

Melvin Yong Yik Chye raised concerns about the rising number of bankruptcies in early 2024, specifically regarding the proportion attributed to credit card debts. The Minister of State, Alvin Tan, stated that bankruptcy applications remain stable and below pre-COVID levels, with most orders related to business failures rather than individual credit card debt. Tan acknowledged the rising impact of Buy Now Pay Later (BNPL) schemes and mentioned that the Monetary Authority of Singapore (MAS) is monitoring this sector and considering stronger regulations if needed. Derrick Goh inquired about data reporting for BNPL and the potential effects of declining interest rates on bankruptcy trends, to which Tan responded that while bankruptcy applications have increased, the actual orders have not, and that most households can still service their debts even under conservative scenarios.

Saktiandi Supaat raised questions on the Fare Review Exercise 2024, focusing on its financial impact on transport operators and how deferred fare adjustments might affect service improvements and infrastructure funding. Neil Parekh Nimil Rajnikant further inquired about the reasons for the fare revision recommendation and the steps taken by transport operators to enhance service levels. The Minister for Transport, Chee Hong Tat, explained that the Public Transport Council aims to balance fare affordability with financial sustainability, announcing a decision to increase fares by 6% while monitoring the impact on lower-income households through Public Transport Vouchers. Chee also highlighted that the government is providing $250 million in additional subsidies to mitigate the impact of fare increases and maintain service standards, while emphasizing the gradual approach to future fare adjustments.

Gerald Giam Yean Song asked about the specific risks associated with allowing CPF members to invest directly in US equity index funds not currently approved under the CPF Investment Scheme (CPFIS). Tan See Leng responded that all investments carry risks, particularly in foreign products due to regulatory concerns. To mitigate these risks, the CPF Board carefully evaluates potential investment products based on their track records and fees before inclusion under CPFIS. He noted that CPF members already have the option to invest in certain US equity index funds approved under CPFIS and that other fund providers can apply for approval.

Assoc Prof Jamus Jerome Lim questioned whether the $25,000 annual property value criterion for the SkillsFuture Jobseeker Support applies to renters. Tan See Leng clarified that the criterion applies to all applicants based on their residential address, including both homeowners and renters. This method is intended to assess household means or wealth, aligning with the strategies used in other means-tested programs like the GST Voucher and Workfare Income Supplement schemes.

Jamus Lim requested data on the percentage of Singapore residents earning over $12,500 working in foreign-owned firms from 2019 to 2024, as well as a sectoral breakdown of these figures. Tan See Leng responded that approximately 60% of residents earning above $12,500 are employed by foreign-owned firms. The majority, about 88%, work in the Services sector, with Financial and Insurance Services at 30%, Wholesale and Retail Trade at 18%, and Professional Services at 17%, maintaining stable proportions since 2019.

Chua Kheng Wee Louis asked about developer feedback on the CBD Incentive Scheme and Strategic Development Incentive Scheme, as well as their renewal status post-November 2024 and potential changes to parameters. Desmond Lee responded that the question was previously addressed in a written reply and that both schemes are under review, with updates to be provided when available.

Leong Mun Wai asked about the operating surplus data for each Socially-conscious Enterprise Hawker Centre (SEHC) over the past five years. Grace Fu Hai Yien responded that SEHC operators submit annual audited financial statements to the National Environment Agency (NEA), and the average annual operating surplus from 2019 to 2023 was approximately $100,000. Operators with surpluses are required to reinvest at least 50% into programs that benefit the hawker centres and stallholders, including initiatives to increase footfall and reduce operating costs for stallholders.

Zhulkarnain Abdul Rahim asked the Minister for Sustainability and the Environment about potential measures to enhance the viability of farms in Lim Chu Kang, Neo Tiew, and Kranji, specifically through increased farmers' markets and improved transport connectivity. Grace Fu noted that the Singapore Food Agency (SFA) has already partnered with local farms and organized the "SG Farmers’ Market" to showcase local produce. The SFA has supported the creation of an online platform for farmers to reach consumers and currently has no plans for subsidized transport to farms. The agency will continue to collaborate with the Singapore Agro-Food Enterprises Federation Limited (SAFEF) to explore further initiatives to boost demand for local produce.

Yip Hon Weng raised concerns about the accountability of lawyers involved with companies linked to a Japanese money-laundering syndicate and questioned if the current verification processes for client background checks would be reviewed. K Shanmugam responded that the Ministry of Law and the Accounting and Corporate Regulatory Authority are investigating the matter. He clarified that both lawyers and corporate service providers must adhere to anti-money laundering and counter-terrorism financing requirements, which include conducting due diligence and reporting suspicious transactions. Singapore's AML/CFT verification processes are regularly reviewed to align with international standards.

Zhulkarnain Abdul Rahim asked the Prime Minister about the increase in Singapore's Gini coefficient to 70% according to the UBS Global Wealth Report 2024, questioning the contributing factors despite government efforts and measures. He also inquired about which population segments experienced wealth stagnation and what actions could be taken to assist them. Chee Hong Tat responded that the question had been addressed in a previous Parliamentary session on 14 October 2024 regarding additional measures to tackle rising wealth inequality in Singapore.

Gerald Giam Yean Song asked if the Ministry of Health would provide guidance to insurance companies on premium increases for Integrated Shield Plans now that the moratorium has ended. Ong Ye Kung explained that the government had previously implemented a two-year moratorium due to significant changes in cancer drug policies. The Ministry regulates key aspects of insurance plans but allows insurance companies to set premiums based on market competition. MOH urges the public to make informed choices regarding health insurance and will continue to provide information on premiums and coverage. All Singapore Citizens and Permanent Residents are still covered by MediShield Life for subsidized care in public hospitals.

Chua Kheng Wee Louis asked about legislation regarding the settlement period for funds collected by payment service providers and the management of customer funds on e-commerce platforms. Gan Kim Yong explained that e-commerce platforms are not directly regulated by the MAS but must be licensed if they provide payment services under the Payment Services Act 2019. Licensed payment service providers must transfer customer funds within specified timeframes: three business days for domestic transfers and seven for cross-border, with flexibility for merchants. Moreover, licensed major payment institutions must safeguard customer funds by placing them in trust accounts or obtaining guarantees by the next business day.

Edward Chia Bing Hui asked about the number of applications received under the Enterprise Financing Scheme – Mergers and Acquisitions Loan (EFS–M&A) and potential measures to support SMEs in mergers and acquisitions. Gan Kim Yong responded that since its launch in October 2019, over 20 local enterprises have utilized nearly $190 million in EFS-M&A loans. Additionally, the Enterprise Development Grant supports local companies in business growth, including M&A, and eligible companies may benefit from an M&A tax allowance and double tax deductions on qualifying costs.

Sylvia Lim questioned the Prime Minister regarding updates on the implementation of the Shared Responsibility Framework for certain phishing scams and a compensatory framework for scams involving malware fraud. Gan Kim Yong confirmed that the Shared Responsibility Framework is set to be implemented this year, with responses to public feedback forthcoming. He noted a significant decrease in malware-enabled scams due to enhancements in blocking access to banking apps when malware is detected. The Monetary Authority of Singapore expects banks to treat customers fairly and provide support to victims of various scams, while emphasizing the importance of public education on cybersecurity and consumer vigilance.

Chua Kheng Wee Louis questioned the Minister for National Development about the disparity between developers' feasibility expectations and the URA's reserve price for a 99-year leasehold master developer site at Jurong Lake District, as well as the URA's plans regarding the master developer approach for this site. Desmond Lee affirmed the government's commitment to developing Jurong Lake District as a sustainable model integrating various spaces and indicated that the URA would continue engaging with industry stakeholders. He explained that the JLD Master Developer site is on the Reserve List, allowing interested parties to launch it with a minimum acceptable price. Land valuation varies based on multiple factors, making it difficult to assess the developers’ valuation perspectives.

Assoc Prof Jamus Jerome Lim asked if payouts from the proposed SkillsFuture Jobseeker Support scheme would be subject to income tax. Tan See Leng responded that while payouts are considered taxable income in Singapore, the government intends to exempt these payouts from income tax. This exemption aligns with the scheme's goal of providing temporary financial support to involuntarily unemployed jobseekers facing challenges in finding employment.

The Second Minister for Finance, Indranee Rajah, moved for the Bill to be read a Second time. There were no further queries or comments from the members. The Bill was subsequently read a Second time and committed to the Committee of the whole House. The Committee reviewed the Bill and reported it without amendments, after which it was read a Third time and passed.

The debate focused on the proposed Multinational Enterprises (Minimum Tax) Bill and the Income Tax (Amendment) Bill, discussing their implications for Singapore's economy and competitiveness. Mark Lee emphasized the need for refining tax incentives in response to the BEPS 2.0 guidelines, highlighting the importance of foreign investments for local job creation and economic growth. Concerns were raised regarding the potential administrative burdens and compliance challenges for businesses, particularly SMEs, resulting from the new tax regulations. The Refundable Investment Credit (RIC) was viewed as a strategic measure to encourage investment, especially in high-value sectors and sustainability initiatives. Overall, there was a call for balanced policies that maintain Singapore’s attractiveness as a business hub while adapting to evolving international tax standards.

The proposal to amend the Economic Expansion Incentives (Relief from Income Tax) Act 1967 was presented by the Minister of State for Trade and Industry, Mr. Alvin Tan, on behalf of the Deputy Prime Minister and Minister for Trade and Industry. The recommendation of the President was signified, and the bill was read for the first time. It will be scheduled for a second reading in the next available Parliament sitting and will be printed for further consideration.