Chua Kheng Wee Louis
Singapore
“It is my sincere hope that the passage of this Bill does not mark the end of Singapore's vision of a share-owning society, but rather the beginning of a new chapter – one in which we seriously revisit how Singaporeans and the Government can invest together, participating fairly and directly in the nation's wealth creation, and achieving w…”
“Thank you, Deputy Speaker. Just three quick supplementary questions for the Senior Minister of State. First, I think the Senior Minister of State talks about gaining access to the best tools available globally.”
“Thank you, Speaker. Just two quick supplementary questions. The first is on the guide that the Senior Parliamentary Secretary shared just now.”
“Thank you, Chairman. Just one clarification for Ministers on the EV chargers. I think the MOT has previously said that we are looking at three to 12 charging points per HDB carpark by 2025, but my question is not so much on the deadline, but more in terms of the number of chargers that can be supported, because in most of the multi-storey…”
“Thank you, Chairman. Just two clarifications for Minister Chee. The first is on the review of the EC policy – any timeline around that? Second is in terms of how the Minister talked about building a robust supply pipeline and given that we are now in March 2026.”
“Chairman, given the increasing unaffordability of ECs in the markets today, I urge the MND to seriously re-think the current EC model and to consider upstream policies to bring the price of ECs into a range that will suit their original intentions. With affordability and equitable access being key tenets to underpin the new EC model.”
The complete record
Every one of 716 lines we hold for Chua Kheng Wee Louis, in date order, each linked to its source. Free to read, in full, without an account. Page 6 of 15.
“Mr Speaker, just one quick clarification for the Member Mr Sharael Taha. So, if I am hearing him correctly, is he saying that we should then go against the spirit of BEPS 2.0?”
“" One of our fellow MPs today, Mr Saktiandi Supaat, was a part of the CPF Advisory Panel too, where Chairman Prof Tan Chor Chuan articulated the limitations of the CPF Investment Scheme (CPFIS) and put it so aptly, that "the Panel believes that there is a need to provide an additional investment avenue that can better help such CPF members earn higher expected returns than the CPF interest rates in a simpler way than CPFIS." The big question I have is, when will the Government finally be ready to roll this out? Is it still prepared to do so? I hope the Government is cognisant that the longer the delay, the higher the opportunity cost and real cost to Singaporeans' retirement savings. To conclude, Mr Speaker, I appreciate the Government providing for one off goodies and handouts to Singaporeans and Singapore companies, on the back of yet another record high operating revenues, which were $13 billion higher compared to a year ago. However, it is important that we put in place structural levers in our system as opposed to relying on one-off schemes and I have suggested changes to our personal and corporate income tax systems to illustrate this point. And finally, we are all aligned with the urgent need to strengthen Singaporeans' retirement adequacy, so let us not shut Singaporeans out of attractive, sustainable and practical solutions to boost our retirement funds.”
“" Finally, Ms Sylvia Lim from the WP also called on the Government to do more to boost CPF returns while managing the risks, especially after the 2002 Economic Review Committee's recommendations to do so via private pension plans. These are all words of wisdom by those who came before me, and two decades on, continue to resonate so deeply with me. How many more Singaporeans today could have met their retirement sums, compared to the four in 10, five in 10 today, had we implemented these suggestions back then? If for some reason the Government is still adamant that we are unwilling or unable to allow Singaporeans to share in the fund management expertise and returns of the GIC, then the least we can do is to urgently implement the Lifetime Retirement Investment Scheme (LIRS), something which I have been repeating in each of the last three years so that we can better support Singaporeans' retirement needs. Let us remember that eight years ago, in 2016, then Minister for Manpower Mr Lim Swee Say, had then on behalf of the Government, accepted the recommendations within part two of the CPF Advisory Panel's report, which included the introduction of the LIRS as an additional investment scheme. To quote then Minister Lim: "These additional options will help address the concerns some Singaporeans may have with regard to the rising cost of living in retirement and the desire for higher expected investment returns for those who had to take on some investment risk.”
“I listened to Minister Indranee Rajah's explanation that in 2014, then Deputy Prime Minister Tharman explained in Parliament at great length how we set our CPF interest rates and manage CPF proceeds. I went to do a bit of research on this into the Hansard and realised I was far from being the first to bring this up. Then Deputy Prime Minister Tharman's explanation was in response to PAP Member of Parliament Mr Inderjit Singh, who also questioned whether our 2.5% interest rate paid out to the CPF OA is fair compensation for Singaporeans who have left their savings locked up for so long. In fact, if I go back further in time, many MPs from the PAP, WP, NMPs, have all suggested allowing regular Singaporeans access to better investment returns from the Government's investment entities like the GIC. PAP MP, Dr Lily Neo, called on the CPF Board to work with GIC, and perhaps peg the interest rates at two percentage points below GIC's returns. NMP Mr Siew Kum Hong quoted an academic paper which stated that: "To the extent that the GIC's return on investments has been higher than the return actually credited to CPF members, a recurrent, highly regressive, largely implicit tax on the CPF wealth has been borne by CPF members." PAP MPs Mr Ong Kian Min and Mr Sim Boon Ann called on the Government to share with CPF members surpluses it makes on CPF monies. And Mr Ong even said, "I cannot understand how the Government can say it will not be responsible for providing for my retirement, but I must lend the Government my retirement savings for investments and any gains earned on my money is not my money.”
“Moreover, whenever I raise the issue of CPF interest rates in Parliament, the response by various political officeholders has been to stress the attractiveness of prevailing risk-free interest rate floors of 2.5% for the OA and 4% for the Special, Medisave and Retirement Accounts (SMRA) over the past two decades of protracted low interest rate environment. The closure of the SA from age 55 takes the shine out of such counter-arguments, in my view. As Deputy Prime Minister Wong reminded us, we are facing a change in environment from very low interest rates to a more normalised period where interest rates will be higher for longer and the era of easy money is over. It is in the context of this sea change that we should look at CPF interest rates going forward. How then should we allow the laws of mathematics and compounding to work for our seniors’ retirement funds? I continue to stick by what I spoke about in the Reserves Motion earlier this month, and that is to enable all Singaporeans, not just our reserves, to directly participate in the long-term returns from the Government's fund manager, GIC, with adequate safeguards in place. This is especially pertinent when we consider the source of funds for the GIC in the first place, a part of which is indirectly derived from CPF savings via the Singapore Savings Bonds (SSGS bonds). As I have shared, based on the 20-year nominal returns of the GIC portfolio of 6.9% and the CPF-OA rate of 2.5%, based on a simple rule of 72, the number of years it takes for our CPF monies to double goes from about 10 years based on GIC’s returns, to 29 years based on the prevailing OA rate. The effects on our ability to save for our own retirement is tremendous.”
“When the compulsory annuity scheme CPF LIFE was introduced, the SA continued to provide flexibility to CPF holders to access or “touch” their retirement savings, while providing a decent interest rate floor of 4%. Deputy Prime Minister Wong said in his Budget speech, “The remaining SA savings will be transferred to the Ordinary Account (OA). Of course, members can voluntarily transfer their OA savings to the Retirement Account (RA) at any time, up to the revised ERS, to earn higher interest and to receive higher retirement payouts.” Is this the full picture, though? Singaporeans will know that funds in the RA will be used to pay the premiums for their CPF LIFE plan, meaning to say we can no longer withdraw the funds as we wish. It is also true that from the age of 55 to, say, the payout age of 65, these RA funds continue to earn the same interest rate floor of 4% as with the SA. So far, so good. But unbeknownst to many, from the moment payouts commence, any interest earned will not accrue to the CPF holder, but it is pooled together under CPF LIFE for all members. An FAQ by the CPF Board says it best, that interest earned on CPF LIFE premium is not included as part of the amount paid to beneficiaries when one passes away. I understand that this is the concept behind annuity schemes to enable members to get lifetime payouts. But it also means that even though the stated interest rate of the SA and the RA is identical, the actual yield that is earned by the two accounts could not be more different. And that based on the latest average life expectancy of Singaporeans, it is unlikely that the effective yield for RA savings will exceed that of funds that would have been in the CPF SA.”
“0 and the Refundable Investment Credit is to an extent also dependent on just how generous the EDB and ESG are in awarding these Refundable Investment Credits to companies. I agree that only time can tell when it comes to the actual revenue gains, as we await the roll-out of Pillar 2 globally, but it would be a sad day if countries go against the spirit of the reforms in the first place. The BEPS 2.0 reforms were introduced to stop the race to the bottom when it comes to sovereign tax policies, and to facilitate international collaboration to end tax avoidance. Let me repeat that the OECD has shared that with the two-pillar solution, all economies will benefit from extra tax revenues – all economies. I hope the additional tax revenues from BEPS 2.0 will not simply be in substance returned to MNEs through other forms. Finally, let me touch on a topic which is close to my heart – and that is retirement adequacy. It is also a pressing issue which requires urgent and decisive action, given our rapidly ageing society. While there are several good moves to improve retirement adequacy, like raising the ERS and enhancing the Silver Support Scheme and MRSS, I am concerned about the closing of the CPF SA after the age of 55, and the lack of longer-term measures to help Singaporeans grow our retirement nest egg sustainably. In itself, I do not have qualms about the closing of the SA. However, this is a step backwards when it comes to ensuring the retirement adequacy of Singaporeans, and much needs to be done to truly strengthen retirement adequacy for the seniors today and tomorrow.”
“Deputy Prime Minister Wong has also announced the introduction of two components of Pillar 2, the Income Inclusion Rule and the Domestic Top-up Tax. As I have asked last year, while precise numbers may not be feasible, does MOF not have a range of blue sky and grey sky projections as to the impact of the implementation of a domestic top-up tax? Especially when we are looking at the Income Inclusion Rule and the Domestic Top-up Tax taking effect in less than a year’s time, for businesses’ financial years starting on or after 1 January 2025? To put into context my question, the OECD has published a working paper earlier this year, which finds that the global minimum tax “can raise between US$155 to US$192 billion of additional CIT revenues per year, with revenue gains accruing to all jurisdiction groups”. Moreover, estimated participating countries categorised as “investment hubs,” which includes Singapore, would have the largest expected gains from the reforms, with corporate income tax revenues rising from 14% minimum to up to 34%. If this is factually incorrect, given that the MOF will have a better basis to make its own estimates, then I hope the Deputy Prime Minister can correct this in his round-up speech. Instead, the Deputy Prime Minister shared in his Budget speech that he does not expect the new moves to generate “net revenue gains,” due to the “significant spending required to stay competitive.” To say so is just akin to saying any forms of tax rate increases, from personal income tax, stamp duties to the GST, is not going to generate net revenue gains due to higher spending needs. I understand that this could be due to the introduction of Refundable Investment Credits and the net effect of BEPS 2.”
“Even as other support for companies to build capabilities is being strengthened, I hope the Government would consider providing greater tax relief to our SMEs, such as by raising the tax exemption limits or by introducing schemes similar to the two-tiered profits tax rate regime in Hong Kong, which they introduced in 2018 to relieve the tax burden for SMEs in particular. This is important given that in Budget 2018, the Government announced tighter restrictions around our tax exemption schemes. For an SME making $300,000 in chargeable income for example, total corporate income tax paid before any rebates would be close to $34,000 or an effective tax rate of 11.2%, compared to around $25,000 or an effective tax rate of 8.4% based on prior rules. Having such corporate income tax reforms built into the tax regime would also provide for greater certainty, as opposed to the current CIT rebates which significantly vary year after year from 20% to 50% in terms of the rebate, to a cap of $10,000 to $40,000 in the last decade from YA2013 to YA2024. It is critical to ensure that we continually re-invest in our local SMEs, the backbone of our economy representing 99% of all enterprises here and responsible for the jobs of 71% of employees, to enable Singapore to stay competitive in a post-BEPS world. Otherwise, we could well see a reduction in our tax base and employment levels, should our local SMEs shift more of their activities to other jurisdictions in response to the new business environment. Touching on the topic of BEPS2.0, which I have also spoken about in past Budget debates, the time for introducing adjustments to our tax system is finally before us.”
“While I am sure all Singaporeans appreciate cash handouts amid the cost-of-living crisis, the CDC Voucher scheme evolved from one aimed at helping Singaporean lower-income households defray their cost of living in 2020 to one where all Singaporean households are eligible. The amounts given have also varied quite significantly over the years, and it remains a question whether the scheme will be a permanent one, or if so, whether all households will continue to qualify and just how much are the vouchers going to be worth. Moreover, as opposed to the existing GST Voucher scheme, there appears to be many operational challenges faced by Singaporeans when trying to claim the CDC Vouchers, such as those who are renting their flats and sharing the same address with other households, those living in shelters and also those who no doubt may belong to the same household but are facing difficult familial relationships. On personal income taxes, I note a tax rebate worth 50% of tax payable, or up to $200 was introduced in YA2024, similar to YA2019. However, instead of a one-off rebate, we are better off raising the bottom-end of marginal resident personal income tax rates and increasing the tax-free threshold for the first $20,000 of chargeable income to reflect inflation over time. This was what I raised in a Parliamentary Question back in 2022. Similarly, on corporate income tax (CIT), a CIT rebate of 50% of the corporate tax payable will be granted to all taxpaying companies, whether tax resident or not, for YA 2024. In my speech on the Income Tax (Amendment) Bill in 2021, I suggested raising the level of progressivity in our corporate income tax regime to better support our local SMEs.”
“This need not result in any increase in duties on everyday alcoholic beverages, but it would be much more equitable if the so-called “atas” wines of the world, which easily cost thousands of dollars a bottle, incur a higher excise duty compared to the $20 a bottle wine found in the supermarket. Second, I note that casino taxes were raised in 2022. In spite of this, betting taxes as a percentage of GDP have been flat in past years at around 0.5%. Given that gambling duties have been unchanged since 2014, there is room to look into raising the relevant gambling duties, which could also serve a deterrent function. Moving on to the main body of my speech today, I will touch on the importance of structural changes compared to one-off handouts, where I will highlight the need for structural improvements to personal income taxes and corporate income taxes to better support individuals and businesses while keeping our tax system progressive and up to date, and also touch on the urgent and important topic of retirement adequacy. Conceptually, I believe that: one, it is important to put in place structural levers in our system as opposed to relying on one-off schemes, which may either be new or have to be refreshed year after year, incurring a lot of administrative costs and resources to operate on the part of the Civil Service, and creating much uncertainty on the part of Singaporeans; two, it is also important to direct our resources to those who need them the most, rather than broad-based handouts to everyone, which could lead to allegations of Budget measures being part of an "Election Budget." Take the CDC Voucher scheme, for example.”
“GDP growth slowed to a mere 1.1%, while inflation was a source of consternation for many Singaporeans, which was what led the WP to raise the cost-of-living Motion in Parliament late last year, to share ideas and possibilities of reducing cost of living pressures by way of policy change, many of which are structural. In line with the theme of providing constructive feedback and ideas, I have two revenue measures for the Government to look into, after studying the revenue and expenditure trends over the past years. This would be in addition to revenue raising moves that my colleagues and I have shared in past Budget debates, such as the issue of wealth taxes which I have raised previously, where even though we may have raised the highest personal income tax bracket and property taxes, the likes of wealthy individuals earning dividends and capital gains income from their vast wealth while renting luxury apartments in Singapore will still not be taxed directly. Firstly, looking at revenue collections as a percentage of GDP from FY2018 to FY2024 in Table 3.2b, over the years, customs and excise taxes is one of few categories which has seen a decrease in contribution as percentage of GDP over the years, despite higher tobacco excise duties from last year and the inclusion of carbon taxes in this category. In line with the spirit of wealth taxes, there is room to study the potential to have liquors being taxed on an ad valorem basis, in light of our suggestion of raising so-called “sin taxes”.”
“Mr Speaker, as I have shared in my Inland Revenue Authority of Singapore (Amendment) Bill speech on Budget Day itself, FY2023 did turn out to be another year of record tax collections, after significant increases in IRAS’ tax collections over the last two years, a jump of around 38% to $68 billion in FY2022. Overall operating revenues increased by $13.3 billion in FY2023 compared to a year ago to $104.3 billion, and this is also $7.6 billion higher than projected operating revenues first revealed in Budget 2023 last year. What is noteworthy is that this is not solely on the back of volatile revenues such as stamp duties or vehicle quota premiums, but on the back of record levels of corporate income tax, personal income tax and of course, GST revenues, all of which continued to break new record highs. What was most impressive was the 23% jump in corporate income taxes in FY2023, even after a sharp jump of 27% the year before, with corporate income taxes set to be sustained at record high levels of around $28 billion. This was not surprising, given news of record profits from some of the larger Singapore corporates, from DBS Bank to Sembcorp Industries. Positive revisions to FY2022 data also meant that instead of a revised deficit of $4.2 billion, FY2022 saw a surplus of $1.7 billion instead. While the overall fiscal position for FY2023 is still projected to be in deficit, this was largely due to an increase in special transfers, chief of which is the recent inclusion of the $7.5 billion Majulah Package Fund, without which FY2023 would have seen a $3.9 billion surplus instead. It is important to put into context the record operating revenues and improved fiscal position of the Government against the challenging economic environment that we faced in 2023.”
“While the Bill did state that "there can be a later time that the Authority may allow in a particular case", the tight timelines can be particularly onerous on companies which may be facing severe cash flow difficulties or SMEs which may not have as established administrative and finance processes in place, particularly if the amounts in question may be quite substantial relative to the recipient's financial position. All that being said, notwithstanding my clarifications, I support the Bill.”
“In response to a Parliamentary Question on cases involving the abuse, misuse or fraudulent application of COVID-19 Government grants and payouts, it was shared by the Minister for Home Affairs that from March 2020 to December 2021, the Police received 57 reports involving the abuse or fraudulent application of COVID-19 Government grants and payouts, involving approximately S$1.7 million. Following the various reviews conducted by IRAS and the MOF in recent years and after internal processes highlighted in the Auditor-General's report are refined, does the Minister have further information to update on the cases of abuse uncovered and the monies subsequently recovered? Moving on to specific provisions of the Bill, section 17D of the proposed Bill provides for IRAS to charge interest on the overpayments that it seeks to recover from recipients. Given the overpayments were not the fault of recipients, what is IRAS' approach in the recovery process and how much leeway do companies have before interest in being levied on them? Moreover, given that interest is to be calculated on a daily basis, from the end of the payment period to the date the claim amount is paid in full, this could rack up to a substantial interest charge. What are the indicative interest rates under consideration, how much interest was charged for COVID-19 grant recoveries and whether such interest payments can be waived should there be a good faith attempt to make the repayments? This is especially considering section 17C, where a payment period of 30 days is proposed after the date of service of a written notice to the recipient is served.”
“To me, this begs the broader question, that had such recipients not cooperated with the Government in the past, were they legally entitled to retain these grants, given that these were given to them not as a result of deceit or fraud on the part of the recipients, but some form of administrative oversight or mistake on the part of the authorities? There was the recent case of overpayments in the Jobs Support Scheme, where the wage support grants were erroneously paid to about 5,400 companies in October 2020 due to mistakes in computing the disbursements. These amounted to about S$370 million. Subsequently, it was reported that the Government has recovered over 99% of the S$370 million wrongly paid to companies, with the bulk of it recovered through offsets against firms' subsequent Jobs Support Scheme payouts, where applicable, as well as returns in cash by large enterprises. The issue of overpayments was also an area that was highlighted in the thematic audit by the Auditor-General in its latest report, which looked at key COVID-19 grant schemes, the Jobs Support Scheme, the Rental Cash Grant and the Rental Support Scheme. This issue was also part of the discussions by the Public Accounts Committee which I am a member of. In any case, the Ministry of Finance (MOF) had updated the Committee that MOF and IRAS have taken steps to investigate and recover the overpayments, which made up less than 0.5% of total payouts across three schemes. Overpayments in relation to Government-funded entities were fully recovered. On the other hand, in cases of abuse of such Government grant schemes or grants which were fraudulently obtained, it is important that IRAS be empowered with investigative and enforcement powers to deal with such offences to safeguard public monies.”
“Mr Speaker, IRAS is the Government agency responsible for the administration of taxes and enterprise disbursement schemes. IRAS has been an efficient tax authority and has a consistently low cost of tax collection at less than one cent per dollar of tax collected over the past decade or so. In recent years, this has come off quite significantly, to around 0.63 cents per for every dollar collected in FY2022, from 0.82 cents just two years ago. This perhaps is also reflective of the significant increases in IRAS' tax collections over the last two years, a jump of around 38% to $68.2 billion in FY2022, with FY2023 set to be another record year of tax collections, as we could soon find out in the upcoming Budget debate. In my speech today, I will first touch on the broader picture in IRAS' role surrounding the administration of grants, before following up on specific provisions of the Bill. IRAS today is already responsible for administering enterprise disbursement schemes and is, in fact, also designated as the Centre of Excellence for disbursing broad-based grants to enterprises. These include the administration of enterprise schemes, such as the Progressive Wage Credit Scheme, Senior Employment Credit and CPF Transition Offset. During COVID-19, IRAS also supported the administration of the Jobs Support Scheme, Jobs Growth Incentive, Rental Cash Grant and the Rental Support Scheme. As described in the explanatory statement of the Bill, the amendments aim to provide for the recovery of any money, credit, rebate or other grant under schemes introduced by the Government or a statutory body that are specified in the new Second Schedule of the Act from recipients that are not entitled to such monies. In other words, wrongly given grants.”
“Thank you, Mr Speaker. Just one supplementary question for the Minister. I do understand the features that of our CPF system in terms of the OA and SA. But I think the question that I have still remains in that, especially when we look at the investment time horizon, both in terms of GIC's long-term horizon as well as CPF members' retirement adequacy needs, especially if we look at both the original and amended Motions, both are looking at current and future generation's savings and needs and so on. So, already we are allowing CPF members to invest their CPF investment accounts, but what is actually stopping us from allowing members to be able to access the fund management expertise of GIC to allow them to earn higher rates of return over the longer term in a selective manner? This is where the latest statistics that I saw suggest – that only about 23% of CPF members have an investment account, but only 11% of CPF members have active accounts. So, such a measure can help those who are particularly financially vulnerable and in need of such services.”
“The intention is not to raid the Reserves, nor is it "寅吃卯粮" (In English): Eating next year's grain this year, as misinterpreted by the Deputy Prime Minister. We simply hope to achieve a better balance: the Reserves will continue to grow, but at a slower pace, so that we can take care of the livelihood of this generation of Singaporeans, provide timely assistance to the people, and continue to save for future generations. (In English): I support the original Motion as filed by Mr Leong Mun Wai.”
“I urge the Government to allow Singaporeans to directly benefit from our Reserves management framework, to help both present-day Singaporeans and future generations of Singaporeans. Mr Speaker, in Mandarin, please. (In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, earlier, the Leader of the Opposition Mr Pritam Singh outlined WP's five principles regarding Reserves, as well as three key points. The first point is: the Government should be more open and transparent about our Reserves. In fact, revealing the figure is not the key; the main purpose is to enable the public to have more mature conversations on the Reserves. The second point is: the Government should not rule out using more than the current 50% of the NIRC to alleviate the burden on Singaporeans. In 2018, Deputy Prime Minister Lawrence Wong, when asked about this percentage, said in Parliament, "永远不能把话说得太过绝对" (never say never), although he also made some clarifications a few years later. The third point is: the public generally believes that the Reserves may continue to grow continuously through the sale of land, as the proceeds from the sale of land cannot be used for Government expenditure. Mr. Speaker, while it is important to be prepared for the future, but now we are facing rising geopolitical risks, global economic downturn and ever faster structural economic changes. Moreover, the issue of rising cost of living has become an urgent concern for many ordinary people. Singaporeans' livelihood is already facing problems, but the Government is reluctant to use more of the NIRC to alleviate their burden. The WP proposes to use more of the NIRC to alleviate people's burden.”
“5%, with the actual dividend rate based on the performance of its investments. In the last 20 years, this has ranged from about 4.5% to 6.9%. The difference between the current CPF interest rates, especially Ordinary Account (OA) rates of 2.5% and the long-term nominal returns of the GIC portfolio are non-trivial. Based on the 20-year nominal returns of the GIC portfolio of 6.9% and the CPF OA rate of 2.5%, just based on a simple rule of 72, the number of years it takes for our CPF monies to double goes from about 10 years based on GIC's returns, to 29 years based on the prevailing CPF OA rate. The effects on our ability to save for our own retirement is clearly tremendous. Moreover, CPF members can already invest their CPF monies, subject to certain safeguards, such as minimum account balances and investment limits. Allowing CPF members to benefit from GIC's portfolio even to a modest degree, with percentage or dollar amount restrictions in place, can make a huge difference in enabling more CPF members to better save for their retirement, and especially so for those who are not financially literate or savvy enough to do so themselves in the first place. In each of the last three years, I have been urging the Government to implement the CPF Lifetime Retirement Investment Scheme (LRIS) to better support Singaporeans' retirement needs. And based on public records, GIC's 20-year returns have been consistently above the 2.5% interest rate offered to OA. Should the average Singaporean get access to the diversified investment portfolio of GIC, CPF members could get closer to retirement adequacy in a way that minimises the risk of short-term market volatility and protect their purchasing power against not just local inflation, but global inflation.”
“If the goal is to help present-day Singaporeans reduce their financial burdens and improve their quality of life, while continuing to save for future generations of Singaporeans – and if I may add, ensure that present-day Singaporeans can save for their own retirement – it is imperative upon us to allow our citizens to benefit from higher investment returns in the long term, with adequate safeguards in place. This is especially pertinent when we consider the source of funds for the GIC in the first place. As stated in the GIC’s Governance Overview, its source of funds includes proceeds from the issuance of Singapore Government Securities (SGS) and Special Singapore Government Securities (SSGS), Government Budget surpluses and proceeds from the Government's land sales. What is so special about these SSGS? Well, Singaporeans' CPF funds are invested in these SSGS issued by the Government, specifically to the CPF Board for the investment of CPF savings. The coupon rates for the SSGS bonds are pegged to rates at which the Board pays interest to the members of CPF. In other words, the CPF Board earns fixed interest income from the Government for these CPF funds. Can we not allow GIC's returns to be passed through to CPF members? The CPF Board's FAQ answers this question by stating that, "Unlike in an arrangement where GIC's returns are fully passed through to CPF members, the current arrangement means that CPF members bear no investment risk at all and CPF savings are safe regardless of GIC's performance". My question is, do we have such little confidence in the long-term investment performance of the GIC? If we look across to our Malaysian neighbour, its Employee Provident Fund (EPF) guarantees for its members a minimum dividend rate of 2.”
“It is in this interest of accountability to the people or Singaporeans, that I hope that GIC will adequately disclose its detailed investment performance, both in absolute and relative terms, as well as corresponding risk analytics and on an at least annual basis, rather than merely on longer-term rolling time horizons. After all, if Temasek Holdings readily disclose such information on an annual basis, what is the justification for GIC not being able to do so? Further, it is not for the lack of such information that disclosure is not forthcoming. GIC produces quarterly and even monthly reports to the Government through the Accountant-General of Singapore containing its financial statements, detailed holdings, bank account balances, detailed performance and risk analytics, as well as the distribution of the portfolio by asset class, country and currency. In addition to ensuring there is performance accountability, I would say another important aspect of ensuring that the entities managing our Reserves deliver on the objective of generating good longer-term real returns, is to ensure that all Singaporeans will be able to directly participate in such returns. I recognise that, at present, this is achieved indirectly via the NIRC component of the annual Government budget. But what is preventing the Government from allowing regular citizens, like you and me, from benefiting from the Government's fund manager, GIC?”
“Mr Speaker, my Parliamentary colleagues from the WP have set forth our party's position on the Reserves. Under the NIR framework, the Government can spend up to 50% of the long-term expected real returns on relevant assets. So, up to 50% of the net returns from the Reserves flow back to the Singapore Budget through NIRC. The estimate of NIRC is dependent on both the size of the net asset base, as well as the investment rate of return that can be expected to be earned over the long term after netting off inflation. The Leader of the Opposition, Mr Pritam Singh, has shared how we should be more open about our Reserves and reveal figures not for their own sake but so as to facilitate mature conversations on the Reserves to take place. In my view, the principles of transparency and accountability extend to not just the size of the Reserves per se but also to the investment returns generated by those charged with the responsibility. Why is this important? While the real rate of returns is, by definition, dependent on estimates of future inflation, which may not be entirely under the control of the Government, given both domestic and global factors at play, the ability to earn superior risk-adjusted returns is a key driver of NIRC and, by extension, its contributions to the Budget. As my Parliamentary colleague Assoc Prof Jamus Lim shared, our nation's Reserves belong to the people, not the Government of the day. It is important for the stewards of the Reserves to be accountable to not just the Government but to all Singaporeans, the key stakeholders of our Reserves.”
“Thank you, Speaker. Just one supplementary question for the Minister. My question is more in terms of the computation of this interest which, and I agree with the Minister, actually, it is the absolute interest rates that matter a lot more. But especially in the current environment, whereby, at least for now or the last 12 months, there have been various banks that have been offering various attractive fixed deposit rates or even the Treasury Bills themselves are even offering higher rates than the Ordinary Account. I think many residents as well as Singaporeans have observed that because of the way CPF interest is being computed, even if, let us say, you put it into a 12-month fixed deposit rate and earn the high interest, because of the computation, you may lose, potentially, up to two months of the interest from the CPF as a result of their method of calculation. So, following Minister's reply to my colleague Assoc Prof Jamus Lim, slightly over a year ago, in terms of reviewing the computation of CPF interest rates, I was wondering whether the Minister can advise whether or not the method of computation can actually be aligned to ensure that it is relevant.”
“Mr Speaker, two supplementary questions for the Minister. The first is whether LTA has looked into this public transport system, such as that in Japan, which, as I understand, allows locals and foreigners to use travel cards integrated with the mobile wallet. And speaking from personal experience, I was able to use my phone, which is integrated with my mobile wallet, and it actually allows me to view the fare details instantaneously without any lag and, as I understand, this is even compatible with the express mode, meaning you do not even need a charge phone to use it. The second question is actually on my Parliamentary Question No 19, that is, whether the plans to enhance the SimplyGo system include plans for a universal card which allows one to use it for public transport, retail, motoring, just as what the current EZ-Link and Flashpay cards can do and, importantly, whether it is compatible with the new onboard unit for ERP 2.0?”
“Mr Speaker, just two supplementary questions for the Minister of State. The first is in relation to remittance companies which might potentially exempt themselves from any liabilities by making their customers sign certain waivers. Is this the case for the remittance companies that are currently involved in these cases, especially for one of them, Samlit Money Changer, which I understand from the press release, is responsible for the majority of the cases that have been surfaced, and are these exemptions basically against the current regulations? The second supplementary question is in relation to, again, these licensed payment institutions, especially the major ones. I understand from MAS' requirements that they must comply with requirements to protect customer money and, in this case, is that protection of customer money about just ensuring that the funds reach their intended destination or that they can be accessed at their intended destinations?”
“I thank the Minister. I think there was also a related supplementary question that was asked last year. I know that the Minister mentioned that we will be facilitating countries to claim from the L&D fund. But at the same time, in light of what was also shared by my fellow colleague, Assoc Prof Jamus Lim, about contributions to international funds and all that, I think we do have a role to play in terms of — we may not be the main contributors to this from the historical context, but I do believe that we do have a part to play in terms of using finance terms, introducing, say, seed funding, to enable people to join in the cause and to show people that, look, even though Singapore is small and resource-constrained, we are also doing our part in that regard.”
“Thank you, Mr Speaker. Just two supplementary questions for the Minister. The first, following up to the previous supplementary question and in relation to my original Parliamentary Question, given that this is the goal that we have, is there any timetable or transitional plan or milestones that we will be setting along the way in order to achieve this in the next couple of decades or so. The second supplementary question is, the Minister also mentioned at COP28 that we will not be claiming from the Loss and Damage (L&D) Fund. I just wanted to understand whether or not we will be contributing to the L&D Fund today or any time in the future.”
“It is also as important that we ensure the implementation of the Act and the exercise of powers conferred are done in a justifiable and transparent manner, with decisions made publicly accounted for on a regular basis, such as in other jurisdictions, where practicable. And it is also as important that we continue to uphold and defend the sanctity of the rule of law in Singapore, in which our reputation depends so heavily on. Notwithstanding my clarifications, I support the Bill.”
“We have had a long discussion on the role of judicial review ouster clauses in our legislation, during the debates on the then-Foreign Interference (Countermeasures) Bill, or FICA. SIRA is similar to FICA, in that there is limited judicial review and in which the reviewing tribunal is also comprised of three individuals appointed by the President on the advice of the Cabinet. The Workers' Party believes in the important oversight mechanism played by the role of the courts and as my hon friend Ms He Ting Ru shared in 2021, such a clause offends Article 93 of the Constitution, which expressly states that "judicial power of Singapore shall be vested in a Supreme Court and in such subordinate courts as may be provided by any written law for the time being in force". While FICA deals with counteracting acts of foreign interference and specifically aimed at politically significant persons, where the evidence rely heavily on sensitive intelligence and collaboration with foreign counterparts; SIRA deals with investment decisions made by businesses where, yes, there can be the possibility of insidious parties masquerading as legitimate businesses, but where I would imagine the threat to our national security interests depend more on the nature of the industry sector, that type of goods and services provided to Singaporeans and the business activities that are carried out here. What is the rationale for disallowing the role of the courts, particularly when our reputation as an international business hub relies heavily on upholding the rule of law itself? To conclude, Mr Speaker, I recognise the importance of safeguarding critical entities and infrastructure in Singapore and in taking preventive and corrective actions to protect our national security interests.”
“Finally, I move on to Bill-specific clarifications. The first thing I observed is that, even though the primary purpose of this Bill is to safeguard Singapore's national security interests, the phrase "national security interests" does not appear to be defined anywhere in the Bill. How then, does the Government satisfy itself that an entity has acted against the national security interests of Singapore? A law professor was quoted in The Business Times that such an omission is deliberate, and I quote, “to enable the authorities to adopt a broad and generous reading” of the term. Does the Minister agree with such a view, that such a broad interpretative freedom by the Government was deliberate; and if so, why? Second, clause 27 empowers the Minister to decide on the appointment of key officers of designated entities, such as the chief executive officer, directors and chairpersons, and similarly, clause 28 empowers the Minister the remove such key officers. What are the objective and subjective criteria that the Government will put in place in exercising its powers over the key officers of designated entities? Clause 27(3) references criteria that the Minister may specify; and 27(4) references conditions that the Minister may prescribe for the approval of key officers. What are some examples of and the nature of such criteria and conditions? Finally, clause 46 on limited judicial review, where every determination, order and other decision of a Reviewing Tribunal or any Minister made or purportedly made under this Act is final and is not to be challenged, appealed against, reviewed, quashed or called in question in any court, except in regard to compliance with procedural requirements or the rules and regulations governing that determination, order and other decision.”
“Thirdly, on notification thresholds, CFIUS requires the authorities to be notified if a foreign party obtains 25% or more voting interest in critical technologies, critical infrastructure and sensitive personal data (TID) businesses; and a foreign government, except for Australia, Canada, and the UK, holds a 49% or more voting interest in the foreign party. The UK NSI Act would apply for acquisitions of control over qualifying entities or assets where there could be a potential risk to national security, with control defined as: (a) an entity acquiring or increasing its interest to at least 25% or such that it crosses the 50% or 75% thresholds; (b) an entity acquiring voting rights in qualifying entity such that the acquirer could secure or prevent the passage of any class of resolutions; (c) an entity obtaining “material influence” over a qualifying entity. What is the rationale for the designation of 5% as the threshold in which acquirers of designated entities must notify the Minister? I recognise that this is like that of the substantial shareholder notification requirements for listed companies on the Singapore Exchange, but beyond changes in ownership, does the current legislation sufficiently provide for situations where control may be effectively transferred, without necessarily changes in ownership, such as via different classes of shares or specific resolutions that are passed by the company? Moreover, does SIRA also sufficiently cover any technological transfers or core intellectual property rights that may potentially jeopardise our national security, even without ownership changes? What are the preventive or corrective measures that are available under SIRA to protect these on the grounds of national security?”
“Secondly, CFIUS authorises the US government's review in transactions of a certain nature between a US business and a foreign party, and these transactions could be (a) control transactions, (b) investments and (c) real estate transactions. On covered non-controlling investment transactions, these would mean a foreign party investing in a US business involved in critical technology, critical infrastructure and/or sensitive personal data, and the foreign party acquiring at least one of the listed rights. Further, the Executive Order 14083 specifically identified sectors fundamental to US technological leadership, including but not limited to microelectronics; AI; biotechnology and biomanufacturing; quantum computing; advanced clean energy; climate adaptation technologies; and elements of the agricultural industrial base, that have implications for food security. The UK NSI has similarly defined the list of 17 sectors of the economy for which prior approval is required for acquisitions that could harm the UK's national security. In addition to the telecommunications, banking and utilities sectors, in which there are existing sectoral legislation, will the Minister make known the sectors in which SIRA will apply, to provide for greater regulatory transparency to investors and businesses? Further, given the speed of technological advancements, how often would this sectoral coverage and consequently, the list of designated entities be reviewed and updated?”
“While I can understand if the Government does not wish to disclose the identities of non-designated entities but which it is otherwise monitoring for national security concerns, making public the list of designated entities will signal to businesses that the vast majority of the market is open for investment and that the scope of SIRA is truly limited to just a handful of companies. To be clear, I am not saying that SIRA is unnecessary because of existing control mechanisms, but on the contrary, I believe that the formalisation of SIRA will allow international businesses to have greater confidence in the regulatory environment in which investments into Singapore are made, with the scoping of provisions under SIRA providing greater regulatory certainty to businesses. Moving to my next point, as I have shared earlier, many countries globally have moved towards enacting similar laws and it may be instructive to draw comparisons with the US Committee on Foreign Investment in the US (CFIUS) and the UK's National Security and Investment (NSI) Act. Firstly, I note that CFIUS publicly issues an annual report to Congress, covering key indicators of its activities and process, including the complexity and volume of cases before the committee. This is as set out in statute at section 721(m) of the Defense Production Act of 1950. Similarly, section 61 of the NSI Act requires an annual report to be published, with minimum statutory requirements relating to the details of its functions. Would the Minister confirm if there will be subsidiary legislation governing the categories of information relating to SIRA that have to be disclosed, to better aid understanding and transparency?”
“For example, Singapore Airlines has one non-tradeable special share issued to the Ministry of Finance (MOF) and no resolution may be passed on certain undisclosed matters without prior written approval of the MOF. For SingPost, the appointment of the Chairman, Directors and Group CEO requires the prior written approval of the Infocomm Media Development Authority (IMDA), in addition to other Postal Services Act obligations. Singapore Press Holdings, when it was listed then, had a small handful of shareholders holding management shares; and though these represent only 1% of total issued shares, had 68% of the total votes when it comes to any resolution relating to the appointment or dismissal of a director or any member of staff. These are just some examples of listed companies with publicly available disclosures detailing such mechanisms, but there could well be more of such mechanisms for other public or private companies in Singapore that we may not know of. Would these companies and the specifics of their control provisions be subsequently encompassed under SIRA and would the Minister be able to confirm if such details will be made public in the interest of transparency? In the November 2023 press release by MTI, Minister Gan shared that, "we expect only a handful of critical entities to be designated under this Bill". However, it is unclear whether the list of designated entities will eventually be disclosed.”
“Findings from a September 2023 World Trade Organization (WTO) report, for example, suggest that trade is gradually becoming re-oriented along geopolitical lines. But we can also see for ourselves the trade tensions between the two largest economies of the world and how they have cascading effects on the investment environment globally, and how corporate merger and acquisition (M&A) transactions have been blocked in the interests of national security. Let me first share some of my observations about the business and regulatory environment here in Singapore. The Economic Development Board (EDB) sums it up pretty well, in that "The Singapore Government is committed to creating a pro-business environment through its economic and manpower policies". This has also been affirmed in the Economist Intelligence Unit's (EIU's) latest business environment rankings, with Singapore retaining its position as the world's best business environment for 15 consecutive years. Yet despite our pro-business environment and open economy with the ease of movement of goods, services, labour and capital, in speaking to international investors over the years, a number have shared with me their wonder as to how the Government continues to be able to exercise control over businesses and workers alike. In the case of workers, the rules imposed on trade union administration and leadership, or in Prime Minister’s words, a "symbiotic relationship between the People's Action Party (PAP) and the National Trades Union Congress (NTUC)". And in the case of businesses, explicit control mechanisms and arguably influence over companies, even though they may not be state-owned enterprises per se.”
“Mr Speaker, in its press release on 3 November 2023, MTI shared that the Significant Investments Review Bill, or SIRA as it will be known, is to ensure the continuity of critical entities. Under the new investment management regime, entities that are critical to Singapore's national security interests will be identified as "designated entities" and will be regulated, and these include entities which are not currently covered under existing legislation to monitor and manage entities in sectors, such as telecommunications, banking and utilities. In recent years, the issue of national security has risen in prominence, alongside greater uncertainty and volatility in the world today. To that end, I agree with the importance of safeguarding critical entities and infrastructure in Singapore and in taking preventive and corrective actions to keep our country safe and secure from state versus non-state actors, conventional versus non-conventional threats alike. Many countries similarly recognise this point and have moved towards enacting or strengthening similar laws in recent years. While we have learnt in Economics 101 that globalisation and free trade drives significant gains for both trading partners, I believe that there could be other important policy objectives that the Government must deliver for its people, such as minimising income and wealth inequality and ensuring that the gains of economic growth accrue broadly, ensuring our supply chains are resilient as evidenced by COVID-19, to name a few. While global trade continues to grow, trade-offs to international trade are now seen by an increasing number of economies as almost inevitable, in favour of stability and national security.”
“It is basically that, other than this measure, are there other measures that will be taken to increase the actual units to be supplied?”
“Thank you, Mr Speaker. Just two short supplementary questions for the Senior Minister of State. The first is relating to the number of rental flats that are being rented out right now. I think it was 58,000. May I ask, what has been the increase in the last five years and, correspondingly, the expected increase in the number of HDB flat units that will be rented out? And the context is really that, given that there is an increased number of units completing, a lot of them will still be subject to the five-year minimum occupation period (MOP). The second supplementary question is: beyond the so-called natural increase in the number of units that are put up for rent, are there other proactive measures that the Government is taking in order to increase the number of rental flats available for renting, from now until December 2026?”
“Thank you, Mr Speaker. Just one supplementary question for the Minister. I understand the reasons which the Minister has shared in terms of the shorter duration and smaller scale; hence, the price cap. I was wondering whether the Ministry will consider instituting mechanisms similar to a price cap, but also considering some of these factors just to ensure that there is greater pricing visibility and so that we do not see a repeat of what happened in the last two years where, I think the last price cap was in 2019, and subsequently, we saw the rent shoot up quite significantly.”
“Sorry, the two clarifications here is that I understand that the Government has ramped up the supply of BTO flats, but I am still not sure as to why when it comes to rental flats, there is a significant reduction in the pace of increase. Secondly, can I check with the Senior Minister of State to confirm if she believes that we have already cleared the backlog of demand from prior years?”
“That appears, again, to be a step up in the housing demand versus what we have seen in the past decade or so. All these factors, put together, would suggest that perhaps, if we look at housing demand, that appears to have stepped up versus what it was previously. I agree with what the Senior Minister of State has shared earlier. So, the clarification – two clarifications here —”
“Thank you, Mr Speaker, and I thank the Senior Minister of State for the response to my speech. I just have a couple of clarifications. But before that, I do need to highlight that I think all of us agree here that policy-making needs to be dynamic. As what the Leader of the Opposition, Mr Pritam Singh, has said in his opening speech, we need to ensure that our policies are reflective of the circumstances today and tomorrow versus the past. In this regard, I also acknowledge and agree with the Senior Minister of State when she shared that the reduction in household sizes is a key factor in driving housing demand. I also note that just in the last five years, you see that the average household size has come down very rapidly from about 3.5 to close to about three. I agree that even if the population remains static, that is going to be a significant source of demand, but the population is not static. At the same time, the uncertainty I was expressing is that if you look at the population growth rate today, that appears to be a step up, not just in percentage. If you look at it in absolute terms, I think the number is close to about 280,000 or 290,000 persons' increase in the last one year versus the increase of about 28,000 to 29,000 in the last five years' average. prior to COVID-19. I think this is also a big question mark – as to what then is the forward looking policy when it comes to the incoming net migration, because as far as I understand, our total fertility rate (TFR) is at an all-time low. I think a lot of the new housing demand is also driven by the population policies. At the same time, as I shared in my speech, we are looking at a record high number of marriages. I think that was recently reported in the last one to two months.”
“In this cost-of-living crisis, when we have already achieved the revenue growth expected from the GST hike, will delaying the GST hike until 2024, even only for a year, bring more problems for the future as the Government has said? Regarding public housing, the latest data shows that as of June 2023, Singapore's population has grown by 5% to reach 5.92 million. This is the fastest growth rate since 2008. Last year, the number of registered marriages also reached an all-time high in our country's history. If the population growth rate continues, we may face even bigger problems as public housing supply will decrease by nearly 20% from 2024. To effectively address the housing problem, we need to adjust the housing supply, so that the market can find a more suitable equilibrium. In other words, we need to increase the supply in the BTO market, as well as the rental market which has been overlooked. Mr Speaker, I hope the Government will seriously consider the points that we have raised to alleviate the cost-of-living pressure for Singaporeans.”
“And while I am not privy to the Government's desired population growth rate, if such growth rates persist, then we could have an even bigger problem down the line with housing supply set to taper off from next year. Coupled with the steady decline in average household sizes, it now appears that elevated levels of housing demand are likely to be more permanent than transient, and we need to better prepare our housing market for this reality. Finally, as an adjacent point, even if we have successfully adjusted our policies to address the current cost of living crisis, addressing the issue of soaring public housing prices today does bring us to the next logical question – what will happen when we reset prices downwards? The lease decay issue continues to be the elephant in the room, and more than five years since the term "VERS" entered our lexicon in Prime Minister Lee's National Day Rally speech in 2018, many unanswered questions remain. Even as we debate the issue of soaring housing prices today, we cannot be silent on the eventuality of the value of HDB flats reaching zero at the end of the 99-year lease, as this will simply mean that the higher the rise in prices today, the harder the fall eventually. In Mandarin please, Mr Speaker. (In Mandarin): [Please refer to Vernacular Speech.] Although the inflation rate has eased in the recent months, prices remain high and continued to be on the rise for many Singaporeans, and the current inflation rate is still much higher than what we were used to. I would like to reiterate that the Government's fiscal situation is currently much better than expected.”
“As at FY2022, there were 63,681 rental flats under management, a net increase of about 541 flats in the five years since FY2018. That appears to be a noticeable slowdown compared to the average net increase of 1,640 units per year between 2011 and 2020. The pace of development of rental flats is expected to slow down even further, where there are only 900 public rental flats currently under construction and will be completed in the next five years. In other words, just about 180 flats per year. Why are we constructing new rental flats at a pace which is a mere 10% of that in the past decade? To minimise the agonising wait for an allocation of a rental flat and to alleviate the worries of many Singaporeans who have not been able to access a rental flat, it is imperative that we do not neglect the housing needs of vulnerable Singaporeans in our pursuit of home ownership as the only acceptable housing model for Singapore. And it is important for us to resume the pace of rental flat construction, to be at least on par with the net increase between 2011 and 2020. While the supply side solutions I have proposed to address the current predicament are not new per se, and various WP MPs, including myself, have called for this during the Housing Motion debate and MND Committee of Supply debates in recent years, what is worth highlighting is that demand appears to be much higher than what was previously expected; or at least what I had previously expected. It appears that Singapore's population grew at 5% to 5.92 million as of June 2023, the fastest growth rate since 2008. This could partly explain the tightness we are seeing in the housing market today.”
“Rather than reduce the supply of BTO flats by close to 20% from 2024 onwards, we ought to ensure that we keep up with the current pace of launches, and this is only just about in line with the average of 23,000 flats from 2011 to 2015. As I have shared in my MND Committee of Supply speech, a local academic put it very succinctly, and I quote, “Having excess flats is actually a feature and not a bug. It just means that if some Singaporean want to get married and wants a new house straight away, there is a house available!” And he goes on further to say, “To me, BTO is the real culprit behind our uncontrolled fire”. Moreover, a lot of the demand from first time home buyers in the resale market today is also a function of the long wait times for a new BTO flat. To take it one step further from ensuring adequate supply, we ought to also ensure that we strive to continue reducing the long waiting times for a BTO flat and build a larger percentage of flats ahead of demand, as I have shared in my MND Committee of Supply speeches over the years. After all, if we can build industrial facilities ahead of demand, can we not also build residential homes ahead of demand and have a fundamental re-think of the BTO system? I do appreciate Minister Desmond Lee's assurance that the HDB is planning to launch more Shorter Waiting Time flats, of around 2,000 to 3,000 flats per year by 2025. However, this is essentially at similar levels to the number of such flats launched in the last five years, ranging from about 1,096 in 2018 to 2,850 in 2020. In the rental market, it is alarming that while there continues to be a very limited stock of rental flats today, the pace of construction appears to be slowing drastically compared to before.”
“As reported by CNA last month, prices for flats located near MRT stations or town centres are now higher by up to $10,000 compared to before, according to industry insiders. Moreover, there has not been any concrete policy proposals on addressing the needs of those needing to rent in the open market. In response to my Parliamentary Question (PQ) in January 2023, Minister Desmond Lee shared that, "Providing subsidies or grants for renting flats in the open market is likely to induce demand and drive up market rents, which would compound rather than help solve matters. As such, we have no plans to provide such rental subsidies". Is this not the exact approach that the Government is taking, when providing targeted subsidies to enhance affordability in the resale market? Why the double standards? Especially when it comes to vulnerable families who have not been able to obtain a public rental flat? What then should be done to address the issues of availability and affordability today? To put simply, if the fundamental demand-supply imbalance we are seeing today is not sufficiently addressed, the market is simply doing what it is supposed to do. With prices and rents continuing to appreciate, while many Singaporeans are not able to address their housing needs. If the idea is not to crimp the real demand side of the equation since access to appropriate housing and shelter is a basic need for all, addressing these problems would then necessarily require adjustments to the supply side of the equation, for the market to find a more appropriate equilibrium point. In other words, we need to increase the supply of HDB flats across both the for-purchase market and also the neglected for-rent market.”
“Even if the HDB launches 100,000 flats in total from 2021 to 2025, this implies that BTO supply falls 20% from current levels to about 18,400 flats in 2024 and 2025. Moreover, while the average of 20,000 BTO flats between 2021 to 2025 is an increase compared to average of 17,000 flats between 2016 and 2020, this is still 13% below the average of 23,000 flats in 2011 to 2015, during the time when Mr Khaw Boon Wan was the Ministry of National Development (MND) Minister and sought to address the backlog in HDB flats. Moreover, while BTO application rates have in 2023 declined to about three times thus far, it remains unclear if the 1.6 times application rate seen in the October BTO exercise is sustainable, or just a result of the first-time introduction of certain specific rules. On housing affordability in Budget 2023, the Government has increased the CPF Housing Grant for first-time families to enhance housing affordability in the resale market. As what a head of research at one of the real estate agencies pointed out then, such beneficial effects could be short-lived as it could result in further price inflation, as these could be priced in by the market. In addition, with the new BTO classification system from second half 2024, Plus flats will be priced with more subsidies, on top of the subsidies already provided for standard flats today. Again, while the intention is to improve affordability, with the new classification applying only to new BTO launches and not to the existing stock of more than a million HDB units already in the market, the measures could potentially add further upside pressure to resale HDB prices in some of these locations.”