Economy & business

Neil Parekh Nimil Rajnikant asked about potential business sectors for collaboration between Malaysia and Singapore under the Johor-Singapore Special Economic Zone (JS-SEZ) and concerns of Singapore businesses regarding infrastructure and operations. The Minister of State for Trade and Industry, Alvin Tan, highlighted that the JS-SEZ aims to enhance economic connectivity and could attract investments in sectors like manufacturing, logistics, digital economy, and energy. A survey indicated that Singapore businesses seek improvements in investment facilitation, labor availability, and cross-border movement. Tan also noted that the JS-SEZ offers opportunities for SMEs to establish operations in Johor, serve Malaysian clients better, and improve operational efficiency through quicker movement of goods and talent across the border.

• From 2013 to 2023, real wages for the 20th percentile of income earners grew cumulatively by 30%, outpacing the median worker's 22% growth.
• The government is narrowing the wage gap through the expanded Progressive Wage Model, Local Qualifying Salary requirements, and Progressive Wage Mark, covering up to 90% of lower-wage workers.
• National Wages Council guidelines recommend higher wage growth for lower-wage workers to continue closing the gap with median earners by 2030.

• Ms Hany Soh inquired about how the Building and Construction Authority (BCA) selects companies for the Annual Return of the Construction Industry survey and how it supports them given cost implications.
• BCA explained that it selects companies based on their involvement in general building, civil engineering, and specialized activities, while also conducting random selections across the industry.
• The survey is mandated by the Department of Statistics to monitor the construction industry’s performance and contribute to national accounts.
• BCA provides support to companies by offering deadline extensions and assistance upon request to help them complete the survey.
• The Minister emphasized that BCA’s selection process aims to ensure comprehensive industry coverage while balancing the burden on companies.

• Assoc Prof Jamus Jerome Lim requested a detailed quarterly schedule by region for the completion of Active Ageing Centres funded by the proposed budget increase.
• Minister Ong Ye Kung stated that 208 Active Ageing Centres have been established since 2021, with plans to expand to 220 by 2025.
• The centres will be distributed across all parts of Singapore to ensure 8 in 10 seniors have access to activities near their homes by 2025.
• Confirmed locations will be available on the SupportGoWhere website once finalised.

• The average unsecured debt owed by individuals under the Debt Repayment Scheme from 2019 to 2023 was about $67,500, with fees to the Official Assignee capped at $2,250 and additional variable fees based on amounts collected or distributed.
• The Ministry of Law does not regulate third-party debt consultancies or the fees they charge, and therefore does not have information on such fees.
• The Debt Repayment Scheme’s fee structure is determined by law and varies depending on individual case factors like debt size and debtor circumstances.

• The Ministry noted that retrenchments in Q2 2024 were 3,270, while total employment grew by 11,300, with over half of retrenched residents securing new jobs within six months, and Singapore remains an attractive investment destination with S$5.4 billion in fixed asset investment commitments in the first half of 2024.
• Key factors for MNC relocations include changes in market dynamics or global corporate strategies, and the Government works with companies and unions to support affected workers through skills upgrading and job matching.
• Singapore’s workforce is highly competitive, ranked first in Asia and second globally in the 2023 INSEAD Global Talent Competitiveness Index, and initiatives have attracted major investments such as Amazon Web Services’ S$12 billion and AstraZeneca’s S$2 billion projects, which will create good jobs for locals.

• From 2012 to 2022, the creative industries' annual receipts more than doubled from $16.6 billion to $39.8 billion, and exports grew from $4.3 billion to $16.2 billion.
• Nominal value-added doubled from $5.7 billion to $11.4 billion over the same period, with employment remaining stable at around 63,000 workers.
• The value-added per worker increased from $90,400 to $184,100, doubling due to stable employment and rising value-added.
• The projected outlook for 2024 and 2025 is positive, with growth expected through technology adoption and international partnerships.
• The Deputy Prime Minister highlighted opportunities for the creative industries to expand both locally and globally in the coming years.

• The Ministry of Finance has completed its review of GST charges on regulatory fees, prescribing non-taxable fees in the Non-Taxable Public Agency Supplies Order since end-September, with periodic updates to follow.
• Around 250 fees are newly taxable, such as administrative processing and inspection fees, though most are business-related and allow GST-registered businesses to claim input tax, while the government will absorb the GST and freeze fees until end-2025.
• The government estimates around $5 million in GST was wrongly charged over five years, with about 45% already refunded and agencies actively reaching out to affected taxpayers to process remaining refunds.

• The government emphasized that wealth inequality is difficult to measure accurately due to data challenges, but it is proactively addressing the issue through various measures beyond direct handouts and CPF top-ups, such as progressive taxation and housing grants.
• Key initiatives include enhancing the Progressive Wage Model to boost wages for lower-income workers, expanding housing grants, and implementing wealth taxes like property and buyer’s stamp duties to ensure a more progressive system.
• The government highlighted investments in education and skills development, such as the ITE Progression Award, to support lifelong earning potential and wealth accumulation for all Singaporeans, regardless of background.

• The Singapore Tourism Board established the Future of Guiding (FOG) 2.0 Taskforce in 2023 with industry stakeholders to develop a plan for a steady pipeline of skilled tourist guides who can showcase Singapore's story.
• Training for tourist guides has been expanded to include skills like storytelling, independent research, experience curation, and digital marketing to cater to shifting tourist preferences and the rise of self-discovery.
• Regulations are being simplified, such as allowing tourist guides to self-declare language proficiency from June 2024 to guide in additional languages without waiting for biannual tests.
• The Tourism Board conducts regular enforcement checks against unlicensed tourist guides and takes firm action against violators to address competition from unlicensed operators.

• Assoc Prof Jamus Jerome Lim questioned whether higher salary thresholds for Employment Pass and S Pass holders might cause companies to inflate wages for these foreign workers relative to Singaporeans to meet the criteria.
• Minister Tan See Leng explained that the qualifying salaries are benchmarked to the top third of resident PMET wages and follow, rather than lead, local wage trends, ensuring foreign workers complement rather than compete with locals.
• The Minister highlighted that raising qualifying salaries over the past decade has not hindered local employment, as resident PMET median income and numbers grew significantly while foreign pass holders also increased.
• Employers are more likely to let go or reclassify foreign workers whose value does not justify higher wages, with data showing increased churn rates after qualifying salary adjustments, and changes are implemented with 18 months' notice for planning.

• Assoc Prof Jamus Jerome Lim asked if the government plans to introduce pricing guidelines for plastic bag charges imposed by merchants.
• Grace Fu Hai Yien stated that large supermarkets with over $100 million in annual turnover must charge at least five cents per disposable carrier bag.
• For other retailers, charging for plastic bags remains a business decision with no current plans for government pricing guidelines.

• The Minister for Transport, Chee Hong Tat, acknowledged Poh Li San's concerns about the economic sustainability of public transport services despite an additional $250 million government subsidy and recent fare increases.
• The Minister deferred his detailed response to a specific parliamentary sitting on 16 October 2024, indicating that related questions would be addressed collectively at that time.
• The debate highlighted comparative analysis of Singapore's transport fare increases over the last four years against other major cities like Hong Kong, Seoul, and Taipei.

• Assoc Prof Jamus Jerome Lim inquired about plans to revise the $1 million GST registration threshold for companies due to recent inflation increases.
• Chee Hong Tat referred to prior explanations given during the Committee of Supply debate on 28 February 2024, indicating the threshold remains relevant as previously discussed.
• The debate highlighted ongoing considerations about the GST registration threshold in light of economic changes.

• The Government is engaging Qoo10 and affected merchants but does not have the total number of micro and small businesses impacted by unfulfilled payments, though it has raised known cases for resolution.
• For Small Claims Tribunal cases, the established process usually resolves matters within four months of filing, with hearings scheduled within 28 working days if consultation fails.
• Merchants facing cash flow difficulties can apply for the Enterprise Financing Scheme-Working Capital Loan through participating financial institutions listed on Enterprise Singapore’s website.

• The government provides salary reimbursement for parental leave at up to $2,500 per week or $10,000 per month to help employers manage costs and consider hiring temporary workers.
• New notice periods of at least four weeks for leave and restrictions on changing leave arrangements after the first four weeks give employers more certainty for manpower planning.
• Employers can use resources from the Institute for Human Resource Professionals to improve HR capabilities and design flexible work arrangements, such as part-time leave, to cover absent employees and expand the manpower pool.

• Mr Louis Ng asked about the assessment criteria for the four-year Overseas Humanitarian Assistance Tax Deduction Scheme pilot and whether it could be extended to all humanitarian assistance if successful.
• Edwin Tong explained the pilot is limited to overseas emergency humanitarian assistance to align with policy and balance encouragement of overseas giving with support for local charities.
• The government will assess the pilot after four years using metrics like uptake, impact on giving to local and overseas causes, and feedback from designated charities.
• The scheme’s potential extension beyond emergency assistance was not directly addressed in the response, which focused on the current scoped pilot.
• The debate highlighted the pilot’s purpose to test a targeted approach before considering broader applications.

• The Progressive Wage Model (PWM), introduced a decade ago, has raised wages and skills for over 150,000 low-wage workers in sectors like cleaning and security, creating career ladders and challenging perceptions of low-wage work.
• Parliament noted that while PWM has improved wages and dignity, challenges remain in employer attitudes, consumer willingness to pay more, and eliminating stigma against low-wage workers.
• The debate highlighted the importance of tripartism in successfully implementing PWM, with the government providing transitional support like the Progressive Wage Credit Scheme to offset costs for employers.
• Suggestions were made for a future "PWM 2.0" to preserve wage gains, maintain skills ladders, and allow market forces to play a larger role once wage stagnation is addressed.
• Both speakers emphasized that uplifting low-wage workers is a whole-of-society effort, requiring changes in business practices, public attitudes, and continuous skills upgrading to achieve fair remuneration and dignity.

• The Income Tax (Amendment) Bill introduces the Refundable Investment Credit (RIC) to attract high-value investments and enhances the Renovation and Refurbishment (R&R) scheme to support SMEs with more flexible deductions.
• The Multinational Enterprise (Minimum Tax) Bill implements a 15% global minimum tax for large MNEs under BEPS 2.0, introducing domestic and multinational top-up taxes to align Singapore with international standards and prevent revenue loss to other jurisdictions.
• Ministers and members emphasize that the new tax regime aims to sustain Singapore’s competitiveness by reinvesting additional revenues into areas like workforce development, innovation, and infrastructure, while assuring that non-tax advantages will continue to attract investments.
• Several members raised concerns about the potential impact on SMEs, compliance burdens for smaller subsidiaries, and the need for clear guidelines on tax treaty interactions and revenue allocation, urging the government to provide targeted support and transparency.
• The debate concludes with broad support for both bills, highlighting their role in modernizing Singapore’s tax system, ensuring fairness, and adapting to global tax developments while protecting local economic interests.

• The Bill closes the CPF Special Account for members aged 55 and above from January 2025, transferring savings to the Retirement or Ordinary Account, while expanding the Home Protection Scheme to cover those with certain pre-existing conditions from mid-2025, albeit with premium loading for higher-risk individuals.
• Amendments streamline CPF Board administration, including appointing a Deputy Chairperson and clarifying processes for property sales, subsidy recovery for HDB flats, and removal of obsolete provisions like the CPF Job Record Scheme.
• MPs raised concerns about retirement planning support, HPS premium affordability for vulnerable groups, and fairness in subsidy recovery for resale flats, with the Minister clarifying outreach, eligibility, and sustainability measures.