Alvin Tan
Singapore
“And if our companies can use Johor as a complementary base to scale, serve larger markets and strengthen their regional competitiveness while retaining their core capabilities here, that is also additive integration.”
“Sir, I have answered the Member's questions specific to HDB car parks. Specifically, I think, with the provision of hose reels, fire engine access, natural and mechanical ventilations that will help in the event of a fire, and that the HDB carparks must comply with these technical specifications and safety requirements under Technical Ref…”
“Sir, all Housing and Development Board (HDB) car parks are designed and constructed in compliance with the prevailing Fire Code stipulated by the Singapore Civil Defence Force (SCDF). This includes provisions such as hose reels, fire engine access and natural or mechanical ventilation to disperse smoke and heat.”
“What was left unsaid was that in the emails and in the MP Appeal System (MPAS), the Member was informed that: one, he was aware of the fact that AVS had investigated the incident; he was aware of the processes; he was aware that AVS found no professional negligence or misconduct by the vet; he was aware and noted that AVS had found no rel…”
“As we have observed a growth in the range of animal-related services offered by non-vets that may pose a risk to animal health and welfare, Part 4 of the Bill will introduce various offences and penalties to safeguard against unlawful practice and misrepresentation by or about unauthorised persons.”
“Owners are responsible for providing for their pets' needs, including medical care. So, we strongly encourage prospective pet owners to thoroughly consider the full cost of raising a pet before committing to becoming a pet owner. Mr Deputy Speaker, Sir, vet professionals form an important pillar of our animal health and welfare system.”
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“Finally, Assoc Prof Jamus Lim asked whether the Minister's ability to add new qualifying categories will encourage companies to abuse the incentives by shifting the assets abroad or around, without generating new economic incrementals or benefits. I want to ensure the Member that the Investment Allowance is given with respect to new substantive projects that our economic agencies have assessed to be in line with our economic priorities. Purely shifting assets around would not pass muster with our robust assessment framework. Sir, we will continue to do more. Singapore's attractiveness as an investment location does not only depend on tax factors or incentives to anchor investments. The Government will continue to invest in our non-tax, non-incentive advantages such as a highly educated workforce and talent pool, our robust infrastructure, our excellent connectivity, a well-established legal system and a well-developed financial system. These advantages took decades to build and strengthen and are the result of consistent efforts by the Government working alongside businesses and our tripartite partners to create a vibrant and competitive economy for our people. Sir, I just wanted to take a bigger picture and to share with Members that again, as Minister Vivian Balakrishnan mentioned earlier on, the world is becoming more uncertain, the world in becoming more volatile. There has been fragmentation, there has been fractures of what we knew as the trading system, and just because of all of these factors, the global competition for talent, the global competition for investments is heating up, if it is not already at very intense levels. Singapore is small.”
“It is a process to ensure that we, as the economic agencies and the Government, will review our incentive schemes periodically. It also sends a message to the businesses to not take for granted that the incentives will continue perpetually. So, I think that is very useful. The alignment to other DEI schemes in general is important for us to do that. It also reduces uncertainty. The question on the difference in incentives criteria for both manufacturing and services is a good one. Manufacturing, as the Member would know, and services are very different. Our incentive design takes into consideration the competitive landscape we face and the gestation periods of the respective project types. If you think about manufacturing, a manufacturing company typically takes years to set up a plant, to qualify and to hire relevant workers and also to train their workers for these relevant skills, and then, later on, to ramp up operations. The level of commitment required also recognises, in part, the competition that Singapore faces. That is on manufacturing. And I think, in MTI, we open many of these plants. We know that there is a gestation period and these companies need to hire workers, train them and make sure that the plant is operational. You compare this with the manufacturing sector, for example, to our global headquarters as well as the services sector, the typical project gestation period is much shorter, because you do not need to have those plants. It is not as sticky in that regard. And our incentive requirements must therefore also reflect the differences between manufacturing as well as the services sector.”
“The value of the capital expenditure Investment Allowance that has been awarded is a fraction of the total projected value of investments. I will now address Members' questions on the need for a holistic review of our investment attraction toolkit to ensure Singapore remains attractive to global investments in a post-BEPS world. Mr Saktiandi Supaat rightly pointed out that the implementation of Pillar Two of BEPS 2.0 would reduce the effectiveness of certain tax incentives, since MNEs with consolidated annual revenues of at least €750 million will be subject to a minimum effective tax rate of 15% wherever they operate. Although BEPS 2.0's Pillar Two may reduce the room for tax competition amongst countries, it does not reduce competition for investment. The global economic landscape has become even more competitive, with major economies like the US, Germany and Japan rolling out generous incentives to attract investments. Therefore, to ensure our incentive schemes remain relevant and competitive, both MTI and MOF have been continuously refreshing our incentive toolkits and updating legislations under our purview as required. The new Refundable Investment Credit scheme, which was debated last month here in Parliament, is one recent example. We have no plans currently to overhaul the EEIA at the moment, but I note the Member's feedback to consider a new consolidated Act. Let me just look through some other questions. Sir, Assoc Prof Jamus Lim had a question on the sunset clause provision. I think I addressed that already. This is one arrow in our quiver, in our toolkit, to ensure that our incentives have enough levers and to ensure Singapore's continued economic relevance. Having this sunset clause introduces discipline. There is a definite end date.”
“And as Members suggest, given that we have plans to use AI to transform our economy and also our push for a green economy, we are happy and open to consider the Investment Allowance scheme as a potential incentive. MTI will evaluate Members' suggestions more thoroughly. So, I thank Members for their suggestions. Sir, but when considering the activities we want to continue to qualify for the Investment Allowance scheme or not to include under the scheme, we assess them based on their potential, as I mentioned earlier on for other incentives, to create high economic value-add and positive spin-offs to the rest of the economy. Again, this could be in the form of jobs created or new partnerships with local suppliers. Sir, Mr Saktiandi Supaat also asked about the rationale to allow the Minister to prescribe categories of qualifying projects now and why it was not necessary before. The short answer is we are doing so to give the Government greater flexibility to respond to the rapidly changing economic landscape by providing for qualifying project types to be introduced, updated or removed via subsidiary legislation. It allows for the Minister to move quicker in a rapidly evolving space. Mr Saktiandi Supaat also asked about the amount of capital expenditure investment allowance we have granted thus far and the breakdown by project type and by expenditure categories. Similar to the DEI, the Investment Allowance is offered judiciously and we consider any taxable income forgone by the Investment Allowance award to be notional in nature, as I mentioned earlier on. Sir, we have awarded the Investment Allowance for a variety of projects and sectors, from manufacturing to specialised engineering and technical services like aircraft maintenance, repair and overhaul.”
“Singapore has been and will continue to be committed to fulfilling our international commitments. This trust factor is a key value proposition for companies investing in Singapore. Let me now move on to questions by Members relating to the Investment Allowance scheme. Mr Sharael Taha sought clarification on the criteria for an overseas investment to qualify as allowable fixed capital expenditure and the asset retention requirements. Typically, the productive equipment that is incentivised under the Investment Allowance scheme is to be used in Singapore. That could be a plant, for example, or productive equipment. The only exceptions to this are space satellite and submarine cable systems, as these need to be obviously deployed outside of Singapore. To qualify for Investment Allowance, the company must hold onto the incentivised equipment for a period of time. Sir, Mr Mark Lee asked about the timeline and criteria for including a new qualifying project under the Investment Allowance scheme, so companies will have greater certainty when planning investments in sectors not traditionally supported by Investment Allowances. Mr Saktiandi Supaat asked if we will review the list of qualifying project types against our current strategic national priorities, such as our green economy, data as well as our AI ambitions. Sir, I would like to assure Members that we are periodically reviewing the list of qualifying activities under the Investment Allowance scheme to ensure that these qualifying activities align with our strategic national priorities and are relevant to Singapore's next phase of economic development.”
“To Mr Saktiandi Supaat's question on corporate tax income "forgone" under DEI, a point that Assoc Prof Jamus Lim also raised, we consider any tax forgone by the award of the tax incentives to be notional in nature. DEI is not automatically granted to all companies looking to invest in Singapore. Instead, it is offered judiciously, only if our economic agencies assess that the incentive is crucial to land the investment here and that the investment will generate a net benefit for Singapore's economy. In other words, we assess how effective the tax incentive is based on benefits brought forth by the project, for example, the number of good jobs created, and if not for the incentives, whether the investment may land here in the first place. Mr Neil Parekh asked about penalties that will be imposed for non-compliance with milestone-based relief provisions and if there is an appeals process. I wanted to assure Members that the Government maintains a high bar in terms of the commitments we expect from recipients of these incentives. Where there is a breach of incentive conditions, we will give the company an opportunity to show cause and explain reasons for the breach. And if there are no strong justifications and the intended economic benefits are not realised, we will hold the incentive recipients accountable and not hesitate to either amend or withdraw the incentive, including clawing back the benefits enjoyed. To Mr Neil Parekh's question on aligning our amendments to Singapore's international tax treaties to prevent double taxation and cross-border activities, I wish to affirm that the proposed amendments do not affect the application of the Avoidance of Double Taxation Agreements that Singapore has signed with other countries.”
“This may warrant then a reexamination of the tax incentive and the conditions tied to the tax incentives, which may involve a change in the concessionary tax rate to ensure, again, that the tax benefits remain commensurate with the scale and the impact of the incentivised project. Mr Saktiandi and Mr Mark Lee also mentioned the extension of the DEI scheme until the end of 2028, also a point that Assoc Prof Jamus Lim mentioned. Mr Mark Lee suggested periodically reviewing the sunset dates to ensure the incentive remains relevant. Mr Saktiandi Supaat asked how the Government measures DEI efficacy and the corporate tax, which we have forgone through DEI. Assoc Prof Jamus Lim also asked about this forgone tax. The extension of the DEI for another five years to 31 December 2028 is, in fact, in reference to the limited scope of DEI that allows for a DEI tenure of up to 40 years for headquarter and non-headquarter service companies. We are amending the sunset date to align with the rest of the DEI scheme in general, which is already 31 December 2028. So, I would like to assure Members who have asked this question that we review our incentives periodically to ensure that they remain relevant. But this is a point to ensure that these are aligned to the existing 31 December 2028 dates. Sir, we consider a range of factors when we assess whether to extend an incentive scheme such as DEI. This includes the estimated incremental value-add that the scheme is projected to create and the incremental economic commitments such as skilled employment, fixed asset investments and business expenditure that the supported projects can anchor here in Singapore.”
“Quantitative economic benefits include skilled employment, fixed asset investment and total business expenditure committed under the project. Qualitative benefits include the generation of spin-offs for the economy, the quality of jobs created from the project and the commitment to grow capabilities in technology, skillsets and know-how in Singapore. Based on projected economic commitments by the company, we will then grant the DEI recipient a commensurate concessionary tax rate in respect of its qualifying activities. The take-up of DEI fluctuates from year to year. There is a good mix of both DEI 5% and DEI 10%, with DEI 10% making the bulk of this mix. Of course, because the new concessionary tax rate tier is new, we will not yet be able to assess the expected take-up rate of this new DEI 15% concessionary tax rate tier. But we are introducing this new tier to continue to anchor new investment commitments amid the tight global competition for investments. The third set of questions relate to the governance of the DEI awards. Mr Mark Lee suggested having clear guidance on the process or an application timeline for rate substitution to ensure its smooth implementation. In fact, this practice of rate substitution is not new. Existing DEI recipients can approach economic agencies to discuss any changes in their circumstances and also the impact on their incentive award. For instance, where there are changes in the global business landscape or climate, or if there were shifts in industry trends or corporate restructuring, a company may then need to make changes to their project deliverables. This is over the course of doing business.”
“The DEI 5% and DEI 10% concessionary tax rate tier will be available to all eligible companies, regardless of their country of origin, the size of the company or whether they are in scope of Pillar Two. This also applies to the new DEI of 15% concessionary tax rate tier. Mr Neil Parekh asked if companies benefiting from the existing incentives need to re-apply under this new framework. The answer is no. In fact, in line with upholding Singapore's reputation as a trusted and transparent business hub and as a general principle, the Government will not unilaterally amend a company's concessionary tax rate if it continues to meet its incentive outcome. The second set of questions relate to the use of DEI. What criteria or thresholds are applied to determine whether a business is granted a 5%, 10% or 15% tier, and what are the number and proportion of DEI recipients enjoying the 5% and 10% concessionary tiers? Our economic philosophy, Mr Speaker, has always been to support all companies that can bring value to Singapore and to have the incentivised companies commit to generating economic contributions to Singapore that are commensurate with the incentive benefit that they enjoy. This is regardless of where they come from, their country of origin or their size. We systematically assess each application for a new DEI award or the amendment to an existing award considering the merits of each and every case. To be eligible for DEI, the company must engage in high-value-added activities in Singapore, either through a new set-up or if they decide to expand existing activities in Singapore. Economic agencies will then assess the new or updated project, based on the scale of the project and the projected quantitative and qualitative economic benefits.”
“Mr Speaker, Sir, I thank Mr Saktiandi Supaat, Mr Neil Parekh, Mr Mark Lee and Mr Sharael Taha and, of course, Assoc Prof Jamus Lim, for their strong support of the Bill. They spoke about the DEI and Investment Allowance schemes, and on the need for a holistic review of our investment attraction toolkit to ensure Singapore remains attractive to global investors in a post-BEPS world. Allow me to start, first, with the DEI scheme. The first set of questions relate to the DEI's new 15% concessionary tax rate tier. The questions surround whether we need this when it is not too far from our current corporate income tax rate of 17% or if this responds to the 15% minimum ETR under Pillar Two of BEPS 2.0 and how will SMEs or the awards of existing in-scope DEI recipients be affected? Mr Saktiandi Supaat rightly noted that the in-scope MNE groups will be subject to the minimum ETR of 15% under Pillar Two of BEPS 2.0 and that the difference between the new 15% DEI concessionary tax rate and our statutory corporate income tax rate of 17% is, in fact, narrow. We made these changes as part of our periodic review to ensure our incentives continue to remain relevant. Notwithstanding the narrow differences in the tax rates, we have received industry feedback, for instance, that a company affected by the global minimum ETR of 15% under Pillar Two of BEPS 2.0 might find the new 15% tier sufficient for their needs. The new 15% tier may also be useful to other companies, which may only be able to make economic commitments at a level commensurate with this new 15% concessionary tax rate. Mr Sakthiandi Supaat also asked if SMEs and smaller MNEs could still expect to be granted the DEI of 5% and the 10% concessionary tax rates as a norm. The short answer is yes.”
“Of course, this would change given that interest rates are moving in a different direction now. And even in the above stress test scenarios, at elevated interest rates, households would still be able to service their mortgages from financial institutions, although a very small segment, the one that Mr Derrick Goh mentioned, of highly leveraged borrowers with below median household incomes, could be more vulnerable to repayment risks. But such borrowers also account for less than 5% of total mortgage loans by count and comprise mostly private housing loans. Looking ahead, given the expected decline in domestic interest rates, we think that it should ease debt repayment for borrowers. MAS will look into these and monitor these carefully.”
“Sir, I thank Mr Derrick Goh for his supplementary questions. I will take the second question. The first one, I think I had explained to Mr Melvin Yong that currently, while regulation over BNPL is largely industry-led and driven by the code of conduct, MAS will look into this carefully. And I thank both Mr Melvin Yong and Mr Derrick Goh for their suggestions. With regard to Mr Derrick Goh's second question, let me share just two things. One, to reiterate the point that while bankruptcy applications have picked up in the first half of 2024, not all of these bankruptcy applications result in bankruptcy orders. If you look at the data, actually, bankruptcy orders have not increased in tandem with the higher number of applications. One of the reasons might be due to the debt repayment scheme administered by the Official Assignee from MinLaw's Insolvency Office. This is related also because of the fact that debtors, for example, can settle their debt or enter into a debt repayment plan with a creditor. So, although you see a higher number of applications, the bankruptcy orders are actually stable. On the second point, I thought it is worth also talking about and giving some assurances to the Member that we are still monitoring this closely, but to reflect this with regard to stress tests. I mentioned earlier on that bankruptcy orders have been stable despite elevated interest rates – and I know interest rates are now moderating – and also, economic uncertainties continue to persist. But our MAS stress tests suggest that even now, most households should still be able to service their mortgage debt, even under conservative scenarios of significant income losses of around 10% and even at elevated mortgage rates of 5.5%.”
“Sir, I thank Mr Melvin Yong for his supplementary question. In fact, in Singapore, the BNPL sector is still relatively small and transactions now total about 1% of total credit and debit card payments in the first half of 2023. But I would like to assure the Member that MAS continues to monitor this sector and has guided firms to establish an industry-led code of conduct to mitigate the risks of consumer over-indebtedness. This code includes safeguards, like credit assessments and limits on outstanding payments, assuring responsible lending practice. But I still also want to assure Mr Melvin Yong that MAS will consider stronger regulations if necessary, although the industry now currently relies on self-regulation, given BNPL transactions remain very small compared to other means of payment. But we are looking at this carefully. I thank the Member for his suggestion.”
“Thank you, Mr Speaker. Just three quick points. First, the JS-SEZ offers twinning opportunities for businesses to establish complementary operations in Johor. So, businesses can tap on to Singapore's offerings as a tech, business and financial hub while also using Johor's land and resource advantages. That is one. Second, the JS-SEZ can serve as a gateway for Singapore businesses to better serve their clients in Malaysia. And third, businesses can look forward to moving both goods and talent across the border in a shorter time and this will enhance operational efficiency. 1.30 pm”
“Sir, the Johor-Singapore Special Economic Zone (JS-SEZ) seeks to strengthen economic connectivity between Singapore and Johor by improving the flow of goods and people and the business environment in Johor. It will enable both Johor and Singapore to build on each other's complementary strengths to better compete for global investments together. These could come from a range of sectors, including manufacturing, transport and logistics, digital economy and energy. In a report released by the Singapore Business Federation in July 2024, businesses surveyed on the JS-SEZ said they wished to see operational and infrastructural improvements that would enhance investment facilitation, labour availability and the cross-border movement of goods and people. We have prioritised these issues in our discussions with the Malaysian government.”
“Sir, with regards to Mr Gerald Giam's first question, it is still very early to assess it. It has only been running for about three weeks. So, the CDC, as I mentioned earlier on, will look at the ridership as well as the load and see whether that works. For the Member's second question, that has been answered in response to Mr Leong Mun Wai's written PQ yesterday. The short answer is that there are pictures of other Marine Parade landmarks, including Wisma Geylang Serai Market and Old Airport Road Hawker Centre. These all help residents who would have familiarity with these landmarks and people who are familiar to them, to identify the buses. [Laughter.] I understand that, for example, Marine Parade and many other divisions, to help seniors recognise their blocks, have also put up images to help them to find their way. So, that is what is being done and that is also done to support many other seniors. 12.33 pm”
“Sir, I mentioned that this is a ground-up initiative, largely private donor-funded. If Singaporeans visit, for example, the Singapore Government Partnerships Office (SGPO) portal, they can approach the CDCs and in fact they have done so to come up with local community projects. This is one local community project and that is where CDC funding comes in as a seed fund. As I said, it is one-off. It is a pilot to see whether there is use, potentially. They will assess it after one year to see whether it is useful to do it elsewhere. But I wish to caveat, and I had mentioned in my reply, that it is not very straightforward, that these are subject to utilisation rates, these are also subject to financial sustainability. So, it is unique to a particular division. If Singaporeans have an idea that they want to moot to, for example, the SGPO or the CDC, they can submit their proposal and the CDC will look into it. This is quite similar because it meets the specific local priority need. The CDC looked at it, they provided some seed funding, but the majority of it is funded by donors to the Marine Parade Town Cluster. I think that helps to answer the question.”
“And then there were others where it was a bus service to help seniors to get vaccinated. And that is fully funded by sponsors. So, these are the different kinds of bus services that are available or that have been set up by local divisions. For this particular pilot, as I mentioned in my reply, the CDC will review this after one year and determine whether this works, and then, we will consider whether it is suitable for other divisions.”
“Yes, for a larger perspective on connectivity issues. But let us focus on the Marine Parade Shuttle Bus because Members have all filed related questions on the Marine Parade Shuttle Bus. And let me, as MCCY, explain the context of this shuttle bus. And I will leave it, and if there are separate questions with regard to LTA and MOT, from a wider national perspective, to file those specific to MOT and LTA. So, let me provide that context. First, this is a ground-up initiative. It is a ground-up initiative, very similar to other kinds of ground-up initiatives that the CDC supports. And let me just share with Members that, for example, the CDC supports community markets or Ready for School Kits, for example. They support these through grants, but a proportion of that is also funded by, for example, grassroots organisations, donors. So, this shuttle bus can be seen as also a ground-up initiative. At the same time, the purpose of this bus was meant to serve as an added convenience. Let me provide further context where there are other divisions which also set up similar kinds of bus service. And, as I said, in my original reply, it is difficult to sustain because of utilisation rates as well as financial sustainability. So, there are other kinds of bus services that have been trialled by other divisions. There is one, for example, where the local community had asked to provide a shuttle bus service to a local mosque. That was a one-off project for the Ramadan period. That one was funded primarily by the local CCC, for example. Then, there is another bus service that was run specifically to get seniors to get out of their homes so that they can be active, be connected to community. That one was donor-supported, but was discontinued because of low ridership.”
“Sir, I thank the Leader of the Opposition for his supplementary questions. With regard to the broader connectivity questions, might I ask the Member to file a separate PQ to LTA? But given that this — An hon Member: He did!”
“Operating an efficient and successful shuttle service at this scale is not straightforward. Many previous attempts at trying out local shuttle services have been discontinued because of low utilisation or financial challenges. Hence, there are still many aspects of the service to validate and to refine through this pilot. The other CDCs will study the experiences and findings from the pilot first, before considering starting similar initiatives. Sir, today, the Ministry of Transport (MOT) and Land Transport Authority (LTA) plan for public transport services, taking into consideration commuter demand, connectivity to key transport nodes and amenities, and financial sustainability. This does not preclude localised efforts – for example, private shuttles by condominiums or people sector transportation for seniors – to address very specific needs. LTA was consulted to ensure that the shuttle bus services would not adversely affect public bus operations when using bus stops. This is similar to what LTA would do for other privately-operated shuttle services.”
“00 pm on weekdays, excluding public holidays. The route is designed to help residents, especially frail and older residents, get to amenities more easily, encourage them to continue leading active lifestyles and remain connected to the community. The shuttle bus pilot costs approximately $1 million to operate annually. It covers a total of seven shuttle bus routes, operated by seven buses. This works out to approximately $150,000 per division, for each route. The South East CDC supported this pilot with a one-off seed grant of $200,000. This amount came from matching grants that the Government provides to every CDC. Essentially, the Government matches donations raised by the CDCs with grants, which the CDCs can then use to support ground-up initiatives that foster a cohesive and inclusive community. The rest of the amount – in fact, the bulk and majority of the amount – was raised from donations by the South East CDC, as well as by the respective Marine Parade Town Cluster Grassroots Organisations. So, the South East CDC funding through the one-off seed grant comes up to about $2,400 per division per month. Sir, the pilot has just started and it is still too early to make an assessment on the effectiveness of the service. To date, over 10,000 have registered for the shuttle, of which over 40% are seniors aged 65 years and above, and around 1,000 residents have taken the shuttle service every week over the past three weeks. Beyond utilisation, the critical factor is the financial sustainability of the service. The CDC grant was provided on a one-off basis. So, Marine Parade Town Cluster Grassroots Organisations will have to eventually raise funds to cover the entire cost of operations or to refine its financing model for greater sustainability.”
“Sir, Community Development Councils, or CDCs, were established to foster community bonds and strengthen social cohesion. They develop and implement new initiatives for their districts, to foster a more inclusive community, taking into account residents' profiles and the needs of their respective districts. CDCs rally the community to donate to community causes. They also provide matching grants to support ground-up community projects that meet the priority needs of the community. The Grassroots Advisers of Marine Parade Group Representation Constituency (GRC), MacPherson Single Member Constituency (SMC) and Mountbatten SMC, collectively the Marine Parade Town Cluster, proposed a shuttle bus service that could complement the existing public transport service, to better connect residents to key nodes within the Marine Parade Town Cluster. Several factors were considered. These divisions have a high proportion of residents who are seniors. Seniors have given feedback that as they age and get more frail, it is more physically challenging to walk to the various transport, healthcare and community nodes. A significant part of Marine Parade Town Cluster also comprises older estates with narrow roads, which are difficult to be served by large public buses. Sir, such community-based shuttle bus services are not new. In the past, a few Grassroots Advisers too have raised funds to organise such services in their respective divisions. In the case of Marine Parade, they have decided to do it as a Town Cluster and for the shuttle bus to ply designated routes, with a limited number of designated stops, such as at polyclinics, neighbourhood centres and Mass Rapid Transit (MRT) stations. The shuttle bus operates in non-peak hours from 10.00 am to 4.”
“Madam, it is still a proposed deal, yet to be approved. But in public, the structure of the deal is that NTUC Enterprise, up to 49%, and it is a significant shareholding, and Allianz, 51%. So, NTUC Enterprise will have a significant say in how this proposed new entity will run and they have already publicly made very clear statements, on both sides, both NTUC Enterprise, Income, as well as Allianz, about what they will do should this deal progress.”
“And throughout the years, throughout the decades, NTUC and the NTUC social enterprises have contributed over $300 million to various charity programmes. So, NTUC has shown time and time and time and time again, since its founding, since NTUC Income's establishment in 1970, that it has continued its social mission and it has continued to, not just talked about it, but fulfilled the social mission. But it has to be responsible, it has to look long term. It has looked at its books, it has looked at the external environment and it has done its homework, and that is why it is doing what it is doing now. And it has made commitments, which I have stated in NTUC's statement and Allianz has also made its statement as well. And so, Mdm Deputy Speaker, time will tell whether this approach is right, but if you think about this, it is very clear that all of these things have been lined up quite clearly.”
“Mdm Deputy Speaker, I think many other Members also have questions, but I have already articulated to Mr Leong Mun Wai. There were quotes by some of our founding leaders. Let me quote Dr Goh Keng Swee. Dr Goh Keng Swee firmly stressed the key principles for co-ops. He said that co-ops must be competitive, it must be financially sustainable, receiving no privileged treatment from Government. He concluded that a bankrupt co-operative will be of no use. And I have already outlined why NTUC had done its homework and really wanted to make it as majority-owned as possible and locally-owned. I have already outlined this. If Members were to take one step back and look at NTUC, and look at its social mission, many of us here are advisors to NTUC unions, we have worked very closely with them. I work very closely with my union's Singapore Industrial and Services Employees' Union (SISEU). I work very closely with the co-ops under SNCF. I meet them very regularly. But let me put to the Member, Mdm Deputy Speaker, NTUC's history. These are proof points that the social mission remains true. These are the proof points that in crises and in peace time, NTUC remains true. Since its founding in 1961, NTUC has protected and uplifted workers' lives and livelihoods. You meet the workers, they will tell you. We were just there, at the SISEU convention recently. They have kept true to its mission. And since 1969, the Labour Modernist seminar 55 years ago, NTUC has continued to care for workers and families. More recently, on the social mission, NTUC has worked to raise wages of our low-wage workers through the Progressive Wage Model – again, a social mission, focused on workers, because every worker matters. Then, during COVID-19, it was a lifeline for workers, with the Job Security Council.”
“And if you can fulfil your liabilities now, all well and good. But if you are unable to fulfil your liabilities 50 years down the road, then who picks up the tab? So, we can have a very good debate about the approaches. I think this is what we are trying to do. Ultimately, time will tell. It is a judgement call. That is what leadership is. That is what a judgement call is and that is what I think is already stated clearly. What NTUC Enterprise, Income Insurance have already stated very, very clearly. So, I thought that this is very useful for us to put out there, so that all Members are very clear.”
“In the public insurance market, the Government, over time, has stepped in, provided very comprehensive healthcare, comprehensive insurance, and therefore, that it has become more competitive for Income. On the private space, because we have a well-regulated insurance industry, with a whole variety and suite of options for Singaporeans to choose from, Income also finds itself in that competitive space. So, this is why. These are the rationales which they have articulated and these are the realities. Then, it also begs the question, could Income and NTUC Enterprise then have looked for other funding sources, which is the question on the ground. They have. In their statements, said that they have. They have looked at financial institutions and non-financial institutions, locally and foreign. They have also tried their very best, as they had mentioned in their statement, and they have said their preference is that they want, ideally, the deal to be majority-owned and, ideally, for it to be locally. So, they have tried. And make no mistake about that, they have tried, which is an answer to many of these questions that are floating on the ground. But after having tried so many of this and being cognisant of the fact of the challenges on the ground, they said "Allianz has the best alignment with NTUC Income." What is the purpose for that then? It is not just to address all of the challenges which I have lined up, the capital side and the competitive side, but it is also one central reason why they do so. That is a long-term view to protect Singaporeans for the long term. Because right now, these challenges are apparent in the near term and the medium term. But insurance is a long-tailed business, as the Members would know.”
“Can I also just say that because it is something we care about, we all want the best for NTUC Income, we want the best for Singaporean policyholders, we want the best for Singapore. And therefore, you have raised these questions. But there are different views about this on the ground, there are different views about this in the House and there are also different approaches to how NTUC Enterprise, as well as Income, will have to deal with the realities on the ground. And so, the question is whether NTUC Enterprise and Income's approach is the right one. Because that is what the discussions have been publicly – whether NTUC Enterprise and Income's approach is the right one. Time is the best judge, but let me, again, put it out very clearly, that, number one, Income's capital buffers have been under pressure. There is no doubt about this. And in fact, if you think about the insurance industry, there are also other insurance companies and financial institutions who have gone through repeated financial crises – be it the Asian Financial Crisis, the Global Financial Crisis, SARS or the COVID-19 pandemic that has just passed – where they have been unable, for example, or have faced challenges to adhere to capital adequacy ratios and solvency standards. And therefore, NTUC Enterprise had to put in capital injections of up to, it is publicly known, about up to $630 million. But it cannot do so alone and it cannot do so in perpetuity. So, that is one, the financial capital adequacy that is the reality that Income faces. The second reality is that, both in the private insurance market as well as the public insurance market, the landscape has changed.”
“Mdm Deputy Speaker, I thank Mr Leong Mun Wai for his questions. First, I want to say that Income's social mission has already evolved. It only offers two low-cost options right now, and the other products have competitive options and are well- regulated. But allow me to also, as I answer his questions, take a step back, because he has questions about Allianz's commitment in writing, social enterprise and private companies. I have answered the second one. And then this other question, with regard to the social mission. I have explained and in NTUC's statement, it has already said that Allianz is committed to honouring Income's existing policies, participating in national insurance programmes, continuing its charity commitments, also including the pledge of $100 million over 10 years. But Mdm Deputy Speaker, maybe I can take a step back, to again remind Members here why. Because the questions have been: "Why sell?", "Why sell to foreign owners?" and "Can NTUC continue to fulfil its social mission?" I think that is the crux of Mr Leong Mun Wai's question. Let me also state that the reasons why these questions arise. And I think Mr Leong Mun Wai has also expressed that, as well as others who have asked the questions: why is this such an emotive topic? This is an emotive topic because Income is special to all of us. For many years, since 1970, it is a trusted brand, it is a brand that Singaporeans identify with, it is a brand that Singaporeans trust. And for many of us, that is our first policy. For example, if you go to National Service, it was your first policy. And that is why this is something which we all care about and care about deeply, and all Members do so.”
“For NTUC, there will be a huge portfolio of enterprises, be it in insurance, in childcare and eldercare, supermarket, skills' training, many that I have outlined. The co-op sector, social enterprises continue to play a very, very important role to provide affordable products that particularly those that are vulnerable and are low income will continue to enjoy. I think that is not just NTUC, but the whole slew of the co-op sector which we have been supporting. And I have shown how we have been supporting them – with training, with grants and also with tweaks in the Co-operative Societies Act. We will continue to support them because we value them and we know that they are a huge value to society.”
“Madam, I thank Mr Liang Eng Hwa for his supplementary questions. I can understand why and, in fact, there have been many questions with regard to if NTUC had only a significant ownership in the proposed deal, whether NTUC and Income Insurance can fulfil its social mission. I think if we take a step back, the reasons why Income has gone into this proposed deal is well laid out. There are realities on the ground – competitive, Government stepping in to provide that social assurance, as well as the capital requirements. The capital buffers, for example, were under pressure. So, that is the first principle. In this new proposed deal, NTUC as well as Allianz has made assurances. I have outlined these assurances in NTUC's statement, that it will continue with the two schemes, NTUC Gift and Income Insurance's "LUV Life Insurance", and to keep these premiums affordable for policyholders, especially for the low-income segments. And NTUC has stated publicly that Income will uphold this commitment. NTUC has also stated publicly that NTUC's social mission will not change. On its part, Allianz has also said that the proposed deal will not affect the current policy and they will continue to uphold the pledge to disburse the $100 million over 10 years, from 2021. Ultimately, this is something that NTUC, Income and Allianz, if the proposed deal goes through, they will have to decide together, but Income Insurance will have board members, they will have substantial share in this and they will work together with this proposed entity to fulfil that mission. On Mr Liang Eng Hwa's second question, there are a variety of social enterprises, co-ops, many of which many Members know about.”
“Hence, Income assessed that the deal with Allianz provides the best alignment of interests. I can understand why many Singaporeans are concerned that the partnership with Allianz may impact Income's social objectives. As I have explained, we need to first appreciate that Income, today, operates in a very different competitive and regulatory environment. Allianz has committed to honour Income's existing policies; participate in national insurance programmes; and continue its charity commitments, including the pledge of $100 million over 10 years from 2021 to provide social mobility among the lower-income and support the well-being of seniors. NTUC and Income have also given their assurance to keep premiums affordable for Income's low-cost schemes for its members. In fact, NTUC's Secretary-General has put out a statement yesterday, re-affirming NTUC's full commitment to its social mission. On Mr Saktiandi Supaat's question, the Government has introduced the Significant Investments Review Act, or SIRA, safeguards, to designate entities that provide a critical function to national security interests. Companies that provide a "social purpose" will not meet this high bar. In fact, many companies in Singapore will want to do well and to do good at the same time. It will not be feasible to legislate and prevent ownership changes in all of these companies. Ultimately, the best way to keep prices affordable is to facilitate competition, ensure options for customers and put in place a sound regulatory framework. And that is what the Government is committed to doing.”
“Besides competitive pressures, there are also regulators, like MAS and the Ministry of Health (MOH), who ensure that policyholders' interests are protected. Minister Chee will cover this in his reply. The point is that Singaporeans, including lower-income workers, are well-served by our national insurance programmes and our competitive and well-regulated insurance industry. All these provide Singaporeans with wider choices and better value in insurance services and products. NTUC has explained the reasons for the deal with Allianz. Let me briefly reiterate the points that NTUC has made. The current situation for Income cannot be sustained and Income's capital buffers have repeatedly come under pressure. NTUC Enterprise has supported Income with capital injections and will continue to do so. But NTUC Enterprise cannot do this on its own. That is why Income sought to corporatise in 2022, so that it could consider more options to access more capital. Questions have been raised about the corporatisation exercise. When this was surfaced to the Registry of Co-operative Societies (RCS), RCS had advised all parties that this was a matter for NTUC Income and its members to collectively determine and resolve. What was important was the need to be upfront and transparent about the arrangements and to allow Income's members to decide whether or not to proceed with the corporatisation. We note that Income had done so. Eventually, members voted overwhelmingly in favour of corporatisation. And from a regulatory perspective, therefore, RCS is satisfied that due process was followed. Mdm Deputy Speaker, NTUC has stated its preference was to keep a majority stake and also, local ownership. Majority stake, local ownership. But Income was unable to find a willing partner.”
“At the time, most of our workers, particularly from our Pioneer Generation, were uninsured. Through NTUC's affiliated unions, Income provided these workers with much-needed insurance protection at an affordable rate. But social enterprises must, themselves, be sustainable. If a social enterprise cannot sustain itself financially and Government subsidy is needed to prop up the entity, then we will have to consider whether such a service ought to be provided by the Government. Taxpayers must also be prepared to pay their share of taxes to fund the service. There are areas like preschool and skills training where the Government has a framework to provide funding to selected operators to deliver affordable services. Where such a framework exists, then the Government has appointed social enterprises, like the NTUC First Campus and NTUC Learning Hub, given them funding support and worked through them to provide the services. But insurance is different. The insurance market is very different now, compared to when Income was first established in 1970. It is, now, a very competitive market, with many options available to Singaporeans. The Government has also significantly strengthened our social support system. Public healthcare is heavily subsidised. We have MediSave for Singaporeans, MediShield Life offering universal protection against large hospital bills and MediFund as a medical safety net for those with financial difficulties. We also have a universal retirement annuity scheme with CPF LIFE. So, Income has to operate in this new environment. In fact, the premiums for several of Income's schemes are not the cheapest in the market.”
“We will continue to support the co-operative movement to ensure that Singaporeans' economic and social needs are met and that these goods and services remain affordable and of good quality. We have done so in a few ways. First, MCCY has amended the Co-operative Societies Act twice within the last seven years, as part of our efforts to update our regulatory requirements to better support co-ops' formation, operations and development. In fact, I took Parliament through the latest amendment in April 2024, where one of the key amendments was to provide co-ops the flexibility to tap their reserves to pay dividends to their members. MCCY will continue to review our policies to ensure that they remain relevant and effective for our co-op sector. Second, MCCY works closely with the industry body, the Singapore National Co-operative Federation (SNCF), to provide resources and training opportunities for our co-ops. MCCY and SNCF will continue to review the relevance of these training programmes and provide additional ones to our co-op sector to address current and emerging needs, where needed. Third, the Central Co-operative Fund (CCF) has provided various grants to assist co-ops in their development. CCF disbursed about $2.7 million in grants to our co-ops over the last five years, including startup funding for new co-ops and grants that co-ops can use to address their emerging threats, risks and needs. These grants are reviewed from time to time to ensure that they remain relevant and useful to co-ops. Mdm Deputy Speaker, the Government values the role played by NTUC and its enterprises. NTUC Income was established in 1970 with the founding premise of providing Singaporeans, especially underserved workers, with essential, affordable insurance.”
“Mdm Deputy Speaker, the Ministry of Culture, Community and Youth (MCCY) and the Monetary Authority of Singapore (MAS) have received several PQs on the National Trades Union Congress (NTUC) Enterprise's social mission and the Income-Allianz deal. Singaporeans have long recognised NTUC Income as a pillar of social support. It is, therefore, understandable that many Singaporeans are concerned about Allianz's plan to buy a majority stake in Income Insurance. I thank Members of this House for giving voice to these concerns through your many questions. Allow me to, first, address the PQs relating to the social mission and the support given to co-operative societies, or co-ops, in Singapore, in my MCCY capacity. Minister Chee Hong Tat will, then, address questions relating to the regulatory aspects of the Income-Allianz deal in his MAS capacity. So, reserve your questions on the social mission for me, and then, later on, for the regulatory aspects for Minister Chee in his subsequent reply. Mdm Deputy Speaker, co-ops remain an important pillar of our society and their work helps to strengthen our nation's social fabric. Co-ops are member-owned business entities that operate on the principles of self-help and mutual assistance. They address the common economic or social needs of their members or of the wider community. Some co-ops seek to provide goods and services at affordable prices for the benefit of their members and the community, while others seek to care for and serve the vulnerable within our community. Mdm Deputy Speaker, the Government appreciates and values the role of co-ops and social enterprises in Singapore.”
“Like through Youth Corps Singapore, which equips our youths and provides opportunities for them to serve in a myriad of areas such as sustainability and caring for vulnerable groups. In fact, Youth Corps Singapore celebrates its 10th year anniversary this Saturday. Prime Minister Wong will be joining us at the Carnival at *SCAPE and I invite all Members to also join us to celebrate Youth Corps' milestone this Saturday. Mr Speaker, Dr Harun’s Adjournment Motion about creating opportunities for youths to thrive is timely as we celebrated Youth Day just two days ago and Youth Month in July. In my response, I have made the point that the best thing we can do for our youths as a nation is to equip them with the tools to thrive in a world in flux. Sir, given the youth leaders in attendance with us in the gallery, can I invite Members to join me in appreciating the incredible work they are doing to equip our nation's new generation of leaders. [Applause.] [(proc text) Question put, and agreed to. (proc text)] [(proc text) Resolved, "That Parliament do now adjourn." (proc text)] Adjourned accordingly at 7.09 pm.”
“In fact, this month, our youths will be in China for the second leg of this programme. This month also, it is going to be very busy for our youths. I am looking forward to working with the team on the Singapore-Malaysia Youth Leaders Exchange Programme. So, we are expanding this space and our youths are out there interacting with their counterparts, learning from their counterparts and forming long-term networks with their counterparts. For disadvantaged youths, we work with many different partners, including at the Ministry of Social and Family Development (MSF), but also with youth sector organisations like Access, a social mobility charity providing career exposure opportunities for our youths. Its founder, Clarence Ching, is in the gallery today. Mr Speaker, last night at my Meet-the-People Session, I caught up with Tristan, a youth volunteer in my constituency. He had just returned from a leadership camp in the United States (US). While he was there, we had been in touch on WhatsApp. I was checking in on him and he was telling me what he had learnt in camp. Last night, he came by and he was very eager to share with me what he had learnt. He told me that he had gained valuable leadership experiences and valuable perspectives about the US and also about Singapore’s unique place in the world. Tristan told me that his "American peers at camp regard Singapore very highly for our safety and success despite our size". Tristan came back feeling more inspired to serve and plant roots in Singapore – the rootedness point that Dr Harun had mentioned. Tristan is here today, as well. For youths like Tristan, we will continue to turn their aspirations to serve into actions to serve.”
“For example, Young NTUC provides mentorships, internships, mental well-being support and its Career Starter Lab, which NTUC is championing. We have also put together with our NTUC counterparts a strong line-up of over 100 corporates, including impressive names such as Micron, Timbre, CISCO, LinkedIn, JobStreet, Prudential, and also trade associations and chambers of commerce. For example the Singapore Fintech Association, the Singapore Semiconductor Association, ST Aerospace Engineering and Singapore International Chambers of Commerce. So, we are tying them with industries so that they have key industry perspectives and opportunities. We also provide training and career opportunities for our youths in the financial sector. We launched the Polytechnic Talent for Finance Scheme last year together with the Monetary Authority of Singapore and the Institute of Banking and Finance to offer internships and apprenticeships for polytechnic students, leading to full-time jobs in the financial industry. Just last month, we partnered OCBC to launch OCBC Ignite, an internship and apprenticeship programme to equip polytechnic students with industry experience and skills to springboard their career to a university graduate-equivalent role in 18 months. We also partner the Ministry of Foreign Affairs, Ministry of Trade and Industry and Enterprise Singapore to equip our youths to be ready not just for the region but for the rest of the world. For example, we have an Asia-Ready Exposure Programme which equips our youths to be Asia-Ready through exposure to ASEAN member states, China and India. We also have a Youth Leaders Exchange Programme with countries in the region. I was just with our youth leaders at the Second China-Singapore Youth Leader Campus in Singapore in April.”
“Together with our youths, we launched Well-Being Circles under our SG Mental Well-Being Network to equip citizens, including youths, with the skills to care for themselves and those around them. Cho Ming Xiu, who leads Campus PSY, a member of the SG Mental Well-being Network is here today. Campus PSY is a ground-up youth organisation, working on youth mental well-being and peer support work. Then, as part of our Youth Action Challenge, beyond funding, we equip our youths with skills to develop sustainable business plans and they must in the Youth Action Challenge pitch their ideas to a panel. So, they will need help to learn how to pitch, how to negotiate and how to persuade a panel, which is very useful for them as they go out to the working world. Then, there are our Youth Panels. Through our Youth Panels, we are equipping them with tools to solve societal challenges of our day. Some of our Youth Panels members are here today and they have been working closely with us on topics such as financial security, financial literacy, sustainability, evolving careers as well as digital well-being. The Youth Panels will be sharing their preliminary ideas in the upcoming Youth Policy Forum in August. Dr Harun also asked how we are working with other Ministries and partners. Indeed, we are working with many of them, again, to equip our youths with the skills and the opportunities to thrive. The Ministry of Manpower and National Trades Union Congress (NTUC) are key partners of the Ministry of Culture, Community and Youth, and Mentoring SG. We are working with our tripartite partners to onboard corporates to provide industry-relevant mentoring opportunities. We work with, for example, NTUC's Youth Taskforce, which Member Desmond Choo has been leading.”
“Sir, I thank Dr Syed Harun for his speech. I would also like to acknowledge the many youth leaders who are here in the gallery today, in support of Dr Harun's important Adjournment Motion. Last month, at the National Youth Council's Leaders Course, I met youth leaders Ernie, Kaegen and Danish. Danish is here with us today. They youth leaders shared with me about their experience in the National Youth Leaders Course, overcoming physical obstacles during the Outward Bound School (OBS) segment of the course. They were initially daunted by the physical challenges, but ultimately, through mentoring, coaching and the support of peers, they gained the confidence to overcome the physical, mental and emotional obstacles in their way. Mr Speaker, I agree with Dr Harun that it is okay for our youths to try, to tumble and even to fail. But we do not want to provide a fail-safe environment because that simply does not exist in the real world. Instead, the best thing we can do for our youths, is to equip them with the tools that they need to thrive. This is exactly what we are doing and will continue doing. Let me share a few examples. OBS, which over 20,000 Secondary 3 students attend every year, equips them to be confident, resilient and rugged. We are expanding OBS to double the number of participants to 40,000 a year, once OBS@Coney is completed later this year. But beyond OBS, we also have other programmes and platforms to equip our youths to thrive. For youths who are adulting, we launched our national mentoring movement, Mentoring SG, in 2022 to create more mentoring opportunities to equip them with perspectives and opportunities from mentors, so they can chart and walk their own path.”
“Sir, since the signing of the Memorandum of Understanding on the Johor-Singapore Special Economic Zone (JS-SEZ) in January 2024, Singapore and Malaysia have been in discussions on early initiatives, such as passport-free QR code clearance at land checkpoints and a one-stop service centre to facilitate business approvals. The Malaysian government is separately deliberating the area and the sectors to be covered by the JS-SEZ. We are working towards an agreement on the SEZ and will provide an update to the 11th Malaysia Singapore Leaders Retreat that is going to be held later this year. The SEZ aims to facilitate cross-border flows of goods, ease movement of people as well as strengthen the investment ecosystem in Johor. Singapore-based companies, including small and medium enterprises (SMEs) can benefit from the increased economic connectivity and comparative advantages of both Singapore and Johor. The Singapore Business Federation is drafting a recommendation paper on how to shape the development of the SEZ and is seeking views from industry. We will continue to revitalise our heartlands and help our heartland enterprises transform to stay competitive. For example, the Heartland Enterprise Placemaking Grant that we announced in the 2024 Committee of Supply will help our heartland enterprises to lead placemaking efforts in the heartlands to encourage business growth and footfall. The Heartlands Enterprise Centre Singapore also provides business advisory services and upgrading programmes for our local enterprises.”
“Sir, I thank Ms Carrie Tan for her supplementary question. The short answer is yes. In addition to the Emerging Leaders Programme, there are many young youths who are involved with our co-operative sector. I have met many of co-op through my interactions with SNCF and through the many co-operatives get-together. In addition to the Emerging Leaders Programme, there are many other programmes that co-ops can use through the grants that are provided to them, to increase leadership; to increase governance standards; to increase capabilities about things like audit, finance; and also to help look at emerging areas, such as cybersecurity, sustainability and the likes. In fact, when I speak to youths in the co-operative sector, one of the main attractiveness of the co-operative sector is to allow them to explore some of these emerging issues as well as emerging opportunities. So, the short answer is yes, there is interaction between the youths within this co-operative sector in Singapore and then also, if we do not already have, to explore learning from others outside of Singapore as well.”
“I mentioned earlier on, yesterday and today as well, that governance as well as improving the ability of the co-ops to manage these are critically important. So, I would like to assure Mr Melvin Yong that the Registry, SNCF and others, and MCCY will continue to raise governance standards of co-ops.”
“Sir, I thank Mr Melvin Yong for his supplementary question and also his contributions to the co-op sector. I have addressed Mr Yong's first query regarding the Rule 13, which is the review of the 10% cap, just earlier on. Just to reiterate – we think the 10% cap is generally sufficient for co-ops as it reflects the balance in providing decent returns to members and also safeguarding reserves for co-ops operations and growth. On Mr Yong's suggestion for an annual ranking to identify co-ops that are better governed, as well as those that are weaker and which require more checks, earlier I mentioned that there is a spectrum of different strengths, sizes and capabilities and governance for co-ops. There is currently no public ranking of co-ops, given that co-ops are membership-based organisations and these members are also privy to the co-op's financial positions and other matters which are surfaced in the audited financial statements, which I mentioned earlier on. They are also surfaced in annual reports as well as their general meetings. But when in doubt, members can and should also reach out to the co-ops' COM to seek clarification. The RCS does, in fact, have monitoring mechanisms in place to monitor co-ops and adopts a differentiated regulatory approach for co-ops. To give you an example, the Registry conducts periodic special audits on credit co-ops and reviews the co-op's financial statements and annual reports to assess their financial health and their governance. For those, if RCS identifies weaker co-ops, for example, the Registry will engage these co-ops to provide assistance to improve their financial health and governance.”
“So, we are studying this matter further. Mr Speaker, Sir, I would like to conclude by addressing Mr Liang’s related Parliamentary Question on co-ops. Mr Liang asked if Singapore needs new co-ops to meet the evolving socio-economic landscape and if the roles and social missions of co-ops can be strengthened under Forward Singapore. In view of our refreshed social compact and renewed sense of social solidarity, co-ops indeed offer an additional platform for Singaporeans to come together and address societal evolving needs. To remain relevant and increase co-ops’ impact, they must continue to build their capabilities and competencies – the point that Members have been raising in this debate. This would strengthen confidence in and enhance recruitment into the sector. Co-op leaders themselves should also ensure they can lead their co-ops in a rapidly evolving environment. They should adopt a growth mindset, participate in professional development and continuous learning courses, and put in place succession planning to ensure their co-ops’ longevity and continued relevance. MCCY will continue to work with our partners, the CCF Committee and SNCF, to support co-ops and co-operators along their journey. Mr Speaker, Sir, I beg to move.”
“While co-ops must already obtain members’ approval for payment of allowance, honoraria and other benefits to the COM, we proposed amending the Act to make this an explicit function of the AGM. This will help ensure that members’ approval is obtained for such benefits. In 2019, the Registrar also notified co-ops about the minimum information they need to disclose in an annual report to inform members about activities of the co-op and make informed decisions. These include, for example, adequate disclosure of its activities and financial performance. Co-ops are also encouraged to disclose more information as they deem fit. Mr Desmond Choo also asked about the sustainability grant. I seek his indulgence because we just set up the grant on 1 January 2024. We will provide more statistics as the take-up rate becomes steady. Next, I will move on to Mr Yip's questions about whether the Government would allow credit co-ops to advertise their loans to create greater awareness of their services. Credit co-ops are generally set up to serve their members who share a pre-existing common bond, such as the same industry, organisation or the same community. Credit risks are mitigated as many credit co-ops have arrangements with their members’ employers for salary deductions for loan repayments to co-ops. As a membership-based organisation, credit co-ops are not regulated to the same degree as other financial institutions. Hence, they are not open to the general public and should not advertise in mass media. Nonetheless, credit co-ops are not precluded from advertising directly to their members. In the course of the Registry’s engagement with the co-ops and public consultation for the current Bill, we received feedback to review the advertising restriction for credit co-ops.”
“We also work with SNCF to raise awareness of emerging issues such as cybersecurity, as well as offer a CCF Cybersecurity Grant which co-funds a recommended subscription-based solution to manage cybersecurity risks that Mr Lee and Mr Yip mentioned earlier. Mr Lee and Mr Yip highlighted co-ops’ struggle to attract and retain talent. Mr Yip asked how Government could help in this area and Mr Lee suggested a secondment programme between co-ops and public and private sector organisations. We will explore Mr Lee’s idea further with SNCF and the co-ops. Mr Lee also mentioned ongoing initiatives to build the capabilities of co-ops’ COM and staff. These include customised courses unique for the sector. MCCY for example is working with SNCF to introduce a new customised Audit Committee course for credit co-ops in May 2024. This course aims to enhance Audit Committee members’ understanding of their roles and responsibilities, and to sharpen their knowledge of relevant topics like risk management, internal controls, audit and financial reporting. SNCF has also established the Emerging Leaders Programme in 2022, which aims to groom 100 leaders in five years. SNCF also organises conferences, networking events and sharing sessions to expose co-op officers to best practices and practical solutions adopted by their peers. On members' rights, which Mr Raj Joshua Thomas raised relating to efforts to educate co-op members on their rights under the Act, I would like to respond that as member-owned organisations, co-ops are governed by their own by-laws as well as requirements under the Act. But we aim to foster an environment of both accountability and transparency, by ensuring co-ops make sufficient disclosures to members. One of our proposed amendments is a case in point.”
“Mr Desmond Choo suggested studying how to help co-ops modernise and use productivity grants that are available for small and medium enterprises (SMEs). As I mentioned, co-ops can access grants from the CCF. MCCY also works closely with SNCF to ensure the grants remain relevant. Over the last five years, CCF disbursed about $2.7 million in grants to co-ops. In addition to grants to assist eligible new co-ops with start-up costs, co-ops can also apply for development grants, training grants, basic support grants and special grants, that address emerging risks and needs. MCCY has also supported conferences and events organised by SNCF to raise awareness of topics such as data protection, sustainability and cybersecurity. Mr Mark Lee suggested exploring the feasibility of a shared secretariat service to assist co-ops with limited resources. He also suggested a shared service that could address concerns such as cybersecurity threats and the adoption of new technologies. Mr Yip Hong Weng also asked if Government could help smaller co-ops digitalise. Members will know that it is challenging to standardise the scope of works for shared services given the diverse needs of co-ops across the co-op sector and spectrum. Our general approach is to provide the CCF Development Grant, which gives co-ops flexibility to engage suitable service providers to meet their own unique operational needs and to tailor these programmes to their specific requirements. Nevertheless, I think it is a very good suggestion and so, we are open to exploring with SNCF and the sector on centralised services where it is appropriate and where co-ops find it useful.”