Economy & business — Topics

7 Nov 2023

Grab-Uber Merger's Impact on Grab’s Market Share, Fares, Driver Earnings and Quality of Service

Leong Mun Wai asked whether the government has data on the Grab-Uber merger's impact on Grab's market share, fares, driver earnings, and service quality, and whether the 2018 penalties were sufficient or if further action would be taken.
Gan Kim Yong stated that the Competition and Consumer Commission of Singapore imposed directions in 2018 to maintain pre-merger pricing, remove exclusivity obligations, and reduce anti-competitive impacts.
He noted that the entry of other ride-hail platforms since 2018 has reduced Grab's market share.
Gan added that the 2020 Point-to-Point Transport Regulatory Framework removed exclusivity rules, leading CCCS to release its directions while continuing to work with regulators to keep the sector contestable.

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7 Nov 2023

Classification of Self-employed Persons' Earnings as Variable Income in Computation for HDB Home Loans

The Ministry confirms that HDB's loan assessment considers all employment or trade income over 12 months, applying the same guidelines to both self-employed and salaried applicants without specifically labeling self-employed income as variable.
Key factors in loan computation include job stability, CPF contributions, and cash savings, with prudent limits such as a 25-year tenure, 80% loan-to-value ratio, and 30% mortgage servicing ratio.
Ms See Jinli Jean questioned the classification of self-employed income as variable and proposed a review for those with over three years of consistent work in freelance-dominated sectors like coaching.
The Minister clarified that HDB's consistent approach already accounts for income fluctuations across all applicants, aiming to ensure responsible lending.
No direct commitment to reclassify self-employed income was made, but the debate highlighted the need for tailored considerations in specific freelance-heavy industries.

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7 Nov 2023

Hardware Tokens as Option for Bank Customers to Enhance Security of Online Banking

Sylvia Lim asked which retail banks in Singapore have phased out hardware tokens and whether the Monetary Authority of Singapore (MAS) should mandate their availability to enhance online banking security.
Lawrence Wong, speaking for the Prime Minister, stated that major local and foreign banks in Singapore, including DBS, OCBC, UOB, Maybank, and HSBC, still offer hardware tokens upon customer request, so MAS does not need to mandate their provision.
He noted that hardware tokens are not foolproof, as they can still be compromised through phishing where users are tricked into sharing one-time passwords with scammers.
MAS is collaborating with the banking industry to strengthen online banking security and has directed banks to adopt authentication methods more resistant to both phishing and malware attacks.

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7 Nov 2023

Tracking Wealth Inequality in Singapore

The Government does not track wealth inequality comprehensively due to difficulties in valuing non-publicly traded assets, high mobility of financial wealth across borders, and banking secrecy laws that protect deposit data.
Despite these measurement challenges, the Government has implemented progressive wealth taxes, including higher stamp duties, property tax, and Additional Registration Fee for vehicles, as seen in Budgets 2022 and 2023.
To address wealth inequality, the Government invests in education, jobs, housing, and retirement support, such as the CPF system with higher interest for lower balances, Workfare, and housing subsidies for lower-income households.

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7 Nov 2023

Average Productivity Gain Achieved by Public Transport Operators in Past Five Years

Gerald Giam asked for the average productivity gains of public transport operators over the past five years, the Network Capacity Factor since the last fare review, and the main source of productivity gains for the current exercise.
Chee Hong Tat explained that past productivity data and the Network Capacity Factor relate to the old fare formula, which is no longer relevant due to changes in the fare adjustment mechanism.
The previous formula would have set productivity extraction at 0% due to pandemic-related losses, so the new formula introduces a fixed 0.1% productivity contribution to encourage efficiency.
The old Network Capacity Factor was suspended during the pandemic due to abnormal ridership fluctuations and has been replaced by a fixed Capacity Adjustment Factor of 1.1% for 2023–2027.
The new fare formula aims to ensure cost-efficiency while accounting for exceptional circumstances, with productivity gains contributing to reduced fare adjustments for commuters.

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7 Nov 2023

Low-cost Dispute Resolution Platform for Dispute Resolution between Vehicle Leasing Firms and Vocational Drivers or Riders

Dr Tan Wu Meng asked the Minister for Trade and Industry about existing codes of conduct or best practice contract terms for vehicle leasing firms, the number of complaints since 2021 regarding misleading or unfair terms, and whether market concentration is a cause for such complaints.
Ms See Jinli Jean asked the Minister whether the Ministry will consider setting up a dedicated, low-cost dispute resolution platform for leasing disputes between vehicle leasing firms and vocational drivers or riders.
Minister Gan Kim Yong responded that vehicle leasing terms are commercial agreements, with over a thousand fleet owners in the market offering various packages, and that affected parties can use lower-cost dispute resolution channels like mediation services from the Singapore Mediation Centre.

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7 Nov 2023

Guidelines for Insurers to Adopt Fair and Responsible Practices towards Persons with Disabilities and Those with Mental Health Conditions

The Monetary Authority of Singapore (MAS) has proposed guidelines requiring insurers not to reject applications solely based on a disability or mental health condition, but to conduct objective risk assessments.
Insurers may still decline applications, charge higher premiums, or impose conditions based on the assessed risks, particularly for health insurance, to maintain business sustainability.
The government intends to finalize the guidelines by mid-2024 and subsequently withdraw Singapore's reservation on Article 25(e) of the UN Convention on the Rights of Persons with Disabilities.

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7 Nov 2023

Expected Performance of Singapore's Economy in 2023 and Areas for Growth Prognosis in 2024

MTI expects Singapore's 2023 GDP growth to be within the 0.5% to 1.5% forecast range, as noted in the response to the parliamentary question.
For 2024, modest GDP growth is anticipated, driven by tourism, aviation, and a gradual manufacturing recovery, though global uncertainties like inflation and geopolitical tensions pose risks.
The Ministry will release official GDP growth forecasts for both 2023 and 2024 later in the month.

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7 Nov 2023

Review Quantum of Rebates for Morning Pre-peak Fares

Chua Kheng Wee Louis asked about increasing rebates on Morning Pre-Peak Fares and reinstating free pre-peak travel to manage peak crowds and offset fare hikes.
Chee Hong Tat explained that the current 50-cent discount for early weekday train travel costs $40 million annually and aims to reduce peak crowding.
The government provides over $2 billion in yearly subsidies, additional $300 million to defer fare increases, and concessionary fares of up to 70% for many commuters.
Lowering pre-peak fares further would shift costs to other commuters who cannot adjust their travel times, potentially increasing their fares.
The response indicated that implementing the suggestions would require other commuters to bear higher costs to maintain the public transport system.

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7 Nov 2023

Boosting Availability of Carbon Credits for Companies in Singapore

The Ministry is developing credible carbon markets through international negotiations and partnerships, having signed MOUs with over 10 countries and concluded implementation agreements with Ghana and Vietnam, allowing companies to offset up to 5% of taxable emissions from 2024 using international carbon credits (ICCs).
Eligibility criteria for ICCs were published in October 2023, requiring compliance with Article 6 of the Paris Agreement and adherence to seven principles for environmental integrity, with a list of eligible host countries, programs, and methodologies to be published later this year.
The National Environment Agency has partnered with five carbon crediting programs that use independent third-party verifiers to ensure the robust validation, verification, and retirement of ICCs, upholding transparency and accountability in the carbon credit system.

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7 Nov 2023

Cost of Living Crisis

The government outlined its multi-pronged approach to manage the cost of living crisis, including tightening monetary policy to strengthen the Singapore dollar, maintaining economic competitiveness for wage growth, and ensuring basic services remain affordable, while providing targeted support like the Assurance Package and Cost-of-Living Support Package to cushion inflation's impact on households, especially lower- and middle-income groups.
Debates highlighted specific policy measures and opposition proposals, such as water and electricity pricing to reflect scarcity, GST increase defended as necessary for long-term fiscal needs like healthcare, and COE system adjustments to smooth supply, with the government rejecting ideas like broad-based subsidies or a points-based COE system as inefficient or impractical.
Housing affordability was a major concern, with the government defending its BTO framework and supply measures to address imbalances, while opposition members called for increased housing supply, especially rental flats, and deferral of the GST hike given higher-than-expected revenues.
The motion, as amended, was passed, acknowledging the global nature of cost-of-living pressures and calling on the government to continue policies that lower these pressures sustainably without burdening future generations.

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7 Nov 2023

Cost of Living Crisis

Workers' Party MPs called for a review of government policies to alleviate cost-of-living pressures, proposing structural changes such as revising water and electricity pricing tiers and easing MediSave withdrawal rules to better support low- and middle-income households.
Government MPs countered that Singapore's strong currency, competitive market, and direct assistance schemes like the Assurance Package are effectively managing global inflation, and they amended the motion to emphasize the need for policies that do not undermine fiscal sustainability or burden future generations.
Opposition MPs also suggested specific measures like lowering the GST, introducing a universal health scheme, reforming COE pricing, and establishing a social protection framework to track the effectiveness of aid programs for vulnerable groups.

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7 Nov 2023

Economic Expansion Incentives (Relief from Income Tax) (Amendment) Bill

The Bill amends the Economic Expansion Incentives Act to implement six tax incentive changes from Budgets 2022 and 2023, including extending schemes like the Approved Foreign Loan and Approved Royalties Incentive until 2028.
It introduces an activity-based approach for the Approved Royalties Incentive to simplify administration and align with modern business practices, while maintaining strict eligibility criteria.
Members supported the Bill but raised concerns about clarity on approved activities and the need to align incentives with upcoming BEPS 2.0 regulations to preserve Singapore’s competitiveness.
The Minister clarified that tax incentives remain crucial for attracting investment, especially for smaller firms not subject to BEPS 2.0, and emphasized strengthening non-tax advantages like talent and infrastructure.
The Government committed to regularly reviewing incentives to ensure they deliver economic benefits for Singaporeans and adapt to evolving global tax norms.

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7 Nov 2023

Ensuring Government's Shared Responsibility Framework for Equitable Sharing of Losses in Bank Scams Offers Adequate Protection

The Shared Responsibility Framework introduces a "waterfall approach" where financial institutions and telcos are prioritized to compensate victims of phishing scams if they breach their anti-scam duties, with customers only bearing losses if both entities fulfill their obligations.
The framework applies specifically to unauthorised transactions from phishing scams, excluding authorised transactions like those involving deep fakes, which rely on consumer vigilance and separate bank goodwill policies, though ongoing consultations may expand coverage to include malware scams.
Concerns were raised about the adequacy of consumer protection, particularly regarding physical hardware tokens for elderly customers with limited digital literacy, with authorities committing to streamline token access and incorporate public feedback into future framework updates.

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7 Nov 2023

Impact of Thailand’s Proposed Land Bridge Project on Singapore’s Competitiveness as Global Seaport

Thailand’s proposed land bridge could shorten shipping times by a few days compared to the Straits of Malacca, but may involve additional costs and logistical complexities for shipping companies.
Singapore is enhancing its port competitiveness through technology, productivity improvements, cleaner fuel development, and expanding capacity via the Tuas Port project.
The government acknowledges global competition but emphasizes Singapore’s focus on connectivity, productivity, and network effects to maintain its hub status.
Officials noted that ASEAN transport discussions on such projects are ongoing, and the worst-case impact on Singapore’s hub status is mitigated by continuous efforts to stay relevant and competitive.

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7 Nov 2023

Impact of Price Increases on Real Wage Growth

Members of Parliament raised concerns about real wage growth in Singapore amid rising costs, asking for current rates, future forecasts, comparisons with past years, and support measures for businesses and vulnerable workers.
The Senior Minister of State for Manpower responded that real median income grew 9.4% from 2017 to 2022 but declined by 4.5% year-on-year in the first half of 2023 due to high inflation, with the government implementing a $1.1 billion Cost of Living Support Package and initiatives like the Progressive Wage Model and National Wages Council guidelines.
Lower-wage workers experienced stronger real income growth of 15.4% from 2017 to 2022, supported by expanded Progressive Wage Model coverage, co-funded wage increases, and enhanced Workfare schemes, while businesses are encouraged to boost productivity through industry transformation and job redesign programs.
Wage growth is expected to moderate in 2024, with certain sectors like travel and labour-intensive services facing persistent challenges, and the government plans to continue supporting workers through upskilling, career conversion programs, and future initiatives to improve job matching and long-term career planning.

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6 Nov 2023

Reason for Using Birth Date Rather Than Birth Year for CPF Payouts

Assoc Prof Jamus Jerome Lim questioned why CPF payouts use birth date instead of birth year, noting that economic milestones like schooling and workforce entry are typically based on birth year.
Tan See Leng explained that the CPF Board uses birth month rather than birth year for payout calculations, aligning with typical industry practice for similar financial products.
The debate highlights a discrepancy between administrative practices and the way life milestones are commonly tracked, raising questions about the rationale behind the CPF payout methodology.

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6 Nov 2023

Penalties for Estate Agents' Failure to Perform Customer Due Diligence or Report Suspicious Transactions or Activities

Leong Mun Wai asked whether the Government will work with the Council for Estate Agencies to create sentencing guidelines for financial penalties on estate agents who fail to perform due diligence or report suspicious transactions, based on transaction size or potential commission.
Desmond Lee explained that the Estate Agents Act and related regulations require due diligence, with breaches handled by the Council for Estate Agencies Disciplinary Committee, which assesses cases holistically.
The Disciplinary Committee considers factors like transaction size, potential commission, culpability, harm, and aggravating or mitigating circumstances when determining penalties, referencing past precedents.
Information on the Council for Estate Agencies' sentencing approach and past disciplinary outcomes is publicly available on their website.
The Government did not commit to issuing new sentencing guidelines, as the existing framework already allows for case-specific adjustments by an independent tribunal.

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6 Nov 2023

Plans to Mitigate Speculative Behaviour and Volatility in Property Market

Mr Derrick Goh inquired about the Government's plans to address speculative behaviour and prevent circumvention of ownership rules via digital real-estate tokens.
Minister Desmond Lee stated the tokenisation industry is nascent and has not yet introduced volatility or rule circumvention.
The Government is monitoring the situation and will adjust policies to ensure a stable and sustainable property market.

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6 Nov 2023

Expected Cost to Government for Installation of ERP 2.0 On-board Unit for Vehicles

Hazel Poa asked the Minister for Transport about the expected government cost for installing the ERP 2.0 on-board unit for vehicles.
Chee Hong Tat responded that the Land Transport Authority awarded the ERP 2.0 project to a consortium in 2016 at a cost of S$556 million.
The project is still ongoing, and the overall costs will only be finalized upon completion.

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