Lim Hng Kiang
Singapore
“The company has made commitments to recycle the ash, and as for renewable energy, the gasification project is not an energy project, it is not a generation company (genco). It is to produce hydrogen and carbon monoxide or, essentially, carbon. Because as feedstock to the petrochemical sector, you need more C and more H2.”
“The Government will continue to recover the IIA awarded if the company fails any conditions or breaches the legislative amendments. I would like to highlight that there are no errant cases in the last five years for IIA and the current amendments are, therefore, not reactionary in nature, but are being made for legislative clarity.”
“In addition, the IIA scheme will be extended till 31 December 2022. Clauses 10 to 13 give legislative effect to this change. The remaining legislative changes arising from our periodic review of the income tax system are either administrative or technical in nature.”
“Data on household and individual savings rates by income groups are not available. However, data on the aggregate level of household financial assets can be obtained from the Household Sector balance sheet compiled by the Department of Statistics.”
“The aggregate level of financial assets owned by Singapore’s household sector6 in each of the past five years is provided in Table 1 below. Data on the amount of financial assets owned by households and individuals in the different income percentiles is not available.”
“The Second Review of the Comprehensive Economic Cooperation Agreement (Second CECA Review) is ongoing. The review is taking some time as both countries have our respective interests to work through, such as in the area of labour mobility. Our agencies regularly engage Indian counterparts to work through issues collaboratively.”
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“For example, within the logistics sector, firms with major contracts from the marine and offshore engineering segment were harder hit. Conversely, firms that had a diverse portfolio of clients from different industries, especially those that provided more integrated and specialised value-added services, did better than the industry average. This uneven performance across our economy and the uncertain economic outlook explain the weak business sentiments and the sense of insecurity among our workers. Recognising that there are different opportunities and challenges for each sector, the ITMs are the right approach to address the specific needs of each industry. That is why we focus on ITMs. The Government will continue working with our businesses and unions to overcome challenges that we are facing. First, we introduced several initiatives at Budget 2016 to support our companies. They are still relevant and effective in dealing with the current situation. One initiative is the SME Working Capital Loan, which allows SMEs to access unsecured working capital of up to $300,000 and complements existing financial schemes to support our SMEs. As at the end of 2016, more than $700 million and 4,800 loans have been catalysed, benefiting around 4,300 SMEs. With the improved credit availability under this scheme, our SMEs can better address their cash flow concerns and their growth financing needs. Another initiative is the Automation Support Package (ASP), which complements SPRING's existing Capability Development Grant in helping companies achieve productivity improvements. In 2016, these two schemes collectively supported 226 automation projects. An example of a company that has benefited from this scheme is Commonwealth Culinary Creations Pte Ltd (CCC). This is a food supplier.”
“We continue to attract a steady pipeline of investments, thus creating new job opportunities. Over the past five years, the Economic Development Board's (EDB's) investment commitments have brought in an average of S$12 billion in fixed asset investment and S$7 billion in total business expenditure annually. These investments are expected to create an average of 20,000 jobs annually when the projects are fully implemented. Ms Foo Mee Har observed that despite the 2% growth in 2016, business sentiments remain weak. One reason for this is the uneven performance across different segments of our economy. Take manufacturing, for example. Growth in the sector was led by the semiconductor segment, which grew by 31% in 2016 and, to a lesser extent, the machinery and systems segment, which grew by around 5%. 5.45 pm On the other hand, the marine and offshore engineering segment continued to contract. Similarly, the printing and the miscellaneous industries segments of the general manufacturing cluster saw a drop in their output last year. It is thus not surprising that while firms in the semiconductor and machinery and systems segments are positive about their business prospects, firms in the marine and offshore, printing and miscellaneous industries segments would feel pessimistic. Similarly, even though the services sectors on the whole saw subdued growth in 2016, there continues to be bright spots, such as in information technology (IT) services, education, health and social services. On the other hand, the retail trade segment will continue to face structural challenges as it adapts to e-commerce and weak consumer demand. Even within the same sector, the performance of firms was also uneven.”
“As CFE has highlighted, we have to adapt to a lower but more sustainable rate of 2% to 3% growth as our economy matures and undergoes structural adjustments. Mr Charles Chong asked about the outlook in the short and medium term. Let me try and summarise the key developments and trends. First, our restructuring efforts are gaining traction. We have narrowed our productivity gap with other advanced economies, although there is scope for improvement, especially for domestically-oriented sectors. Overall labour productivity grew at a modest pace of 1.5% per annum from 2010 to 2016. Over this period, the productivity of outward-oriented sectors, such as manufacturing, wholesale trade and finance and insurance, have increased by 2.7% per annum, while that of the domestically-oriented sectors, such as construction, retail and food and beverage (F&B), grew by 0.7% per annum. As our restructuring efforts gather momentum, we can expect to see steady progress in achieving our productivity targets. Second, our labour market remains resilient. Wage growth has been comparable to or higher than many advanced economies, in part due to the tightness in our labour market. Between 2010 and 2016, real median gross monthly income of full-time employed residents grew by 3.1% per annum. At the same time, the annual average resident unemployment rate has remained low, at 3% or lower since 2011, while the resident labour force participation rate has remained high. So, despite the difficult conditions that we are facing, our labour market is holding up. Third, despite an uncertain environment, we remain globally competitive. The World Economic Forum's Global Competitiveness Report 2016-2017 ranked Singapore as the second most competitive economy in the world.”
“Mr Chairman, I thank Members for their comments and suggestions. Mr Liang Eng Hwa and Ms Foo Mee Har asked about the global economic outlook and the implications for the Singapore economy. We expect global growth to remain modest in 2017, with growth projected to pick up slightly to 3.4%, from 3.1% in 2016. The US economy is projected to grow at a faster pace, primarily supported by domestic demand. Growth in the Eurozone is likely to remain modest, while China's economic growth is expected to ease on the back of its continued restructuring. The global outlook also remains clouded with uncertainties and downside risks. Upcoming elections in key Eurozone economies may pose uncertainties regarding the direction of the monetary union. If anti-globalisation sentiments and protectionism take root, global trade will be adversely affected. Political risks and uncertainty in the new US administration's policies have also led to greater economic uncertainties and financial market volatility. These factors could, in turn, weigh on business and consumer confidence, dampening investment and consumption. At the same time, technological changes continue to gather pace, disrupting entire industries even as they create new opportunities. Many of these changes are still playing out and it is difficult to know with certainty how things will develop. So, against this backdrop, the Singapore economy as a whole is on a stable and steady growth trajectory. GDP growth came in at 2% in 2016. Barring downside risks, we expect growth in 2017 to be similar to 2016. Mr Charles Chong observed that the growth rates have come down in recent years.”
“In the manufacturing sector, EDB aims to anchor industry leaders in Singapore while building up a complementary ecosystem of suppliers and research and development institutes that can partner effectively with these "queen bees". We have also committed S$3.2 billion for the Advanced Manufacturing and Engineering domain under the Research and Enterprise 2020 plan, through which the Agency for Science, Technology and Research will support the development of technological capabilities for our manufacturing and engineering sectors. In addition, EDB is partnering other Government agencies, such as SkillsFuture Singapore, Workforce Singapore, the Institutes of Higher Learning and industry players, to equip our people with the skillsets to stay competitive. These efforts will ensure that our manufacturing companies can access a steady pipeline of talent. More broadly, Singapore must remain open and connected to ensure that we retain our relevance to businesses. Singapore must continually work with like-minded partners to guard against protectionist policies, which adversely affect global trade with knock-on effects on economic growth worldwide, while pursuing the liberalisation of trade and investment that will create opportunities for our companies and our people. 11.45 am”
“Mdm Speaker, Singapore remains an attractive investment destination, including from United States companies. In 2016, the Economic Development Board (EDB) attracted S$9.4 billion in fixed asset investments. For 2017, EDB expects investment commitment numbers to be comparable to 2016 levels, namely, at S$8 million to S$10 billion. Our manufacturing sector is also well-diversified, with investments from companies around the world. For Singapore to remain attractive, Singapore must maintain our economic competitiveness. In the case of our manufacturing sector, this competitiveness is built on several key attributes, including our pro-business environment, access to skilled talent, research capabilities and strong intellectual property protection. Many companies have decided to establish themselves in Singapore to complement their global manufacturing footprint. From Singapore, they can more readily tap on regional supply chains as well as better access regional markets. Maintaining our competitiveness means pressing on with our industry transformation efforts to better position our manufacturing sector for the future. The Industry Transformation Maps are critical in this effort. They set out growth and competitiveness plans for 23 sectors, including several in the manufacturing cluster, complemented by initiatives to raise productivity, spur innovation, promote internationalisation, as well as equip our people with the relevant skillsets. As part of EDB's Home Strategy, EDB anchors the critical functions and differentiating competencies of globally leading companies to improve their rootedness to Singapore for the long term.”
“Singapore is actively working with the EU and member states to ensure that the EUSFTA can proceed with ratification as soon as the ECJ delivers its final opinion so that businesses can reap its benefits as soon as possible.”
“On 4 March 2015, the European Commission (Commission) sent the negotiated text of the European Union-Singapore Free Trade Agreement (EUSFTA) to the European Court of Justice (ECJ) for a legal opinion to establish the Commission's and EU member states' areas of competence in the EUSFTA. The opinion would clarify which of the EUSFTA provisions fall within (a) the EU's exclusive competence; or are (b) shared competence between the EU and member states; or are (c) within the member states' exclusive competence. Should the entire EUSFTA agreement be found to be under the EU's exclusive competence, it would only have to be approved by the Council of the EU and the European Parliament. The agreement would enter into force thereafter on a mutually agreed date. The Advocate General's preliminary opinion released on 21 December 2016 opined that the EUSFTA should be deemed a "mixed agreement" with areas of shared competence between the EU and member states. If the ECJ takes the same view, it would mean that the agreement has to be approved by the Council of the EU, the European Parliament as well as the 38 national and regional parliaments of all member states. However, the provisions in the agreement deemed to be under the EU's exclusive competence would be provisionally applied and take effect once the Council of the EU and the European Parliament have approved. In comparison, provisions that are under shared competence or member states' exclusive competence would have to go through domestic ratification processes in all member states before they can take effect. The ECJ's final opinion, which is deliberated by a full court of 28 Judges, is typically released three to five months after the Advocate General's preliminary opinion.”
“Private sector entities, regardless of ownership, are required to comply with the Competition Act. Entities in specified sectors, such as media, telecommunications, gas and electricity, which are regulated by other Government regulatory agencies, are excluded from the Competition Act. Private sector entities which engage in anti-competitive activities can be investigated by the Competition Commission of Singapore (CCS). The First Schedule of the Competition Act requires any member of the Commission who may have a vested interest in a business being investigated to declare this interest and recuse himself or herself where deliberations or decisions involving that business may take place.”
“We are making modest headway through the Doha process by taking subsets of the Doha agenda and seeing whether we can proceed successfully on the subsets. For example, in 2013, we got together and agreed on the trade facilitation agreements, and I think we are quite close to ratifying it. We should be able to ratify it by this year. Similarly, we are taking other subset agendas to try to see if we can cobble it into an agreement. So, that continues. What the US brings to WTO in terms of leadership, I think that has yet to be demonstrated.”
“Mdm Speaker, as I mentioned just now, what we forgo in not continuing with the TPP is the incremental benefits that we would have achieved in the TPP over-and-above the existing benefits that we have with the bilateral FTAs with the nine other countries within the TPP group. I think as far as the workers are concerned, what is more important for them is to understand the environment that we are facing, the headwinds, and work together with the Government, employers and companies to deal with these headwinds. The approach that we have taken through our Industry Transformation Maps, through the 23 sectoral plans, these are concrete ways in which all three parties can work together and still continue to provide good jobs for our workers.”
“We have always taken both bilateral, plurilateral as well as multilateral positions, especially with WTO. On bilateral, we have, as I mentioned just now, 21 FTAs, and these cover all our major trading partners. We have one current bilateral FTA that we are negotiating with Sri Lanka. We continue to do bilateral FTAs and to pursue new markets. We also work on plurilateral tracks, for example, the RCEP. In the ASEAN+1 FTA with the six dialogue partners, we are trying to cobble these together into a bigger plurilateral FTA called the RCEP so as to try and harmonise the rules and try to make it less of a "spaghetti bowl" of FTAs, to make the processes more business-friendly to our companies. So, we take all three approaches, as well as work actively with WTO for multilateral tracks, particularly in trade facilitations.”
“The original agreement was that we will all try and get our ratification process done within two years of the signing of the Agreement, which was 5 or 6 February last year. So, that was the original target. It is in line with that original target that we said that we would be among the first few countries that would ratify the TPP in line with the other countries. And now, with the US' withdrawal, countries would have to recalculate. One possible pathway is for countries, the TPP-11, to continue their ratification process and wait until the US is ready or changes its mind, then they will join. That is one possible pathway. The second is, of course, to have a bilateral agreement with the US, as the US now wishes to embark on more bilateral agreements rather than plurilateral agreements. The third is, of course, the option of a TPP-11. So, it depends on the perspective of individual countries. For some of the TPP countries, for example, Singapore and Australia, we already have bilateral FTA agreements with US, so the TPP is incremental and gives us an incremental market access. Our main bilateral trade in goods and services and investments are covered by the bilateral FTAs that we have. So, every country will have to reassess its situation.”
“The TPP initiative put together three separate objectives. One is market access, which is the typical objective of an FTA. The second objective is to put in place rules that are more relevant to commerce in the 21st century, and I think this is what is very innovative about TPP. The third is, of course, the geo-strategic objective of putting economies across the Pacific and integrate them together. So, I agree with the Member that TPP was a very ambitious undertaking and it took us nearly six years to cobble it together. First, to find a balance of benefits that people can live with in providing market access but, more importantly, to sit down and set out the rules for commerce in the 21st century ‒ rules for intellectual property, environment, labour, e-commerce, and many of these rules. Third, of course, is the strategic objective of putting economies across the Pacific and integrate them. So, to find a new set of countries with similar ambitions is not easy. Whether we can proceed with TPP-11, as I mentioned, depends on the assessment of the benefits that the 11 countries will now have to calculate without the US as the major market. TPP was negotiated with market access of all the countries but, of course, with the US as a major market for which many countries want additional market access. Now, with that market access no longer available, the set of benefits will change for each country. So, everyone will have to make their new calculations.”
“RCEP is progressing a bit slowly. We were planning to complete it within a reasonable timeframe of about three to four years. It is going to take us a bit longer. The reason is because we are trying to put together the FTAs that ASEAN has with the various dialogue partners. So, the problem or challenge is not within ASEAN because we already have FTAs with our corresponding dialogue partners. The challenge is with the dialogue partners not having FTAs among themselves. For example, between China and India, they do not have an FTA. So, they are coming together for the first time. One can imagine, with two huge economies starting from scratch, that is a huge challenge. On the FTA for the Asia Pacific, this is a process that is only beginning to take place. The original idea was to have several pathways, one of which was TPP, the second is RCEP, and then we will merge the various pathways to form the FTA for the Asia Pacific. Now, with the setback in the TPP, we have to find other pathways to reach our ultimate objective of an FTA for the Asia Pacific.”
“With the US' withdrawal, the TPP agreement, as signed, cannot come into effect. This is a setback for the global trade liberalising agenda but need not be the ultimate outcome. Each TPP partner will now have to carefully study the new balance of benefits without the US' participation and consider the value of an agreement among the remaining 11 partners. In addition to consulting with other TPP partners to find a mutually beneficial pathway forward, Singapore is also actively engaged in other regional integration initiatives, such as the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN Economic Community (AEC). Mdm Speaker, we will also continue to work with like-minded partners at the World Trade Organization (WTO) as advocates of a rules-based multilateral trading system. On the bilateral front, Singapore has an existing network of 21 free trade agreements (FTAs) in force, including with the eight TPP countries and the US. These speak to our deep ties with key trading partners and will help us stay connected as the environment evolves. We will also actively pursue other forms of economic cooperation initiatives, including industrial parks and other projects in the region, to create more opportunities for our companies to collaborate and grow.”
“Mdm Speaker, we are witnessing a rise in anti-globalisation sentiments in Europe and the US. If protectionist approaches become the norm or a trade war among major economies ensues, then global trade will be adversely affected, with knock-on effects on economic growth worldwide. Small and open economies like Singapore are especially vulnerable. Protectionist barriers to trade would curtail Singapore's ability to tap on demand in export markets or serve as an intermediary for global trade flows. This would have an adverse impact on our economy, of which two-thirds of our gross domestic product (GDP) is driven by external demand. On the other hand, our external linkages can also make us more resilient in facing these headwinds. Over the years, we have carefully built up our regional and global connectivity with multiple regions across the world. We have also developed an efficient, stable, pro-business environment, with effective and consistent business and investment frameworks. This allows us to tap on the growth opportunities in Asia and elsewhere, for mutual benefit with like-minded partners. Amidst the current rise of anti-trade sentiments, Singapore will stay the course to remain open and connected, to be an attractive global city that welcomes the best companies, talent and investments. We remain firmly committed to pursuing a rules-based global trading system and achieving greater regional integration. We will do our part to ensure that markets remain open, so that companies in Singapore can continue to scale up and internationalise. The agreement that the Trans-Pacific Partnership (TPP) parties negotiated was one of several such pathways to achieve stronger trade linkages that will promote growth opportunities and job creation in the member countries.”
“Mdm Speaker, may I have your permission to answer Question Nos 11, 12 and 13 together?”
“The Competition Commission of Singapore (CCS) first received a complaint against EM Services Pte Ltd (E M Services) in April 2014. After a preliminary enquiry, CCS commenced investigations. CCS subsequently conveyed its initial findings to EM Services. In September 2015, EM Services voluntarily committed to CCS that it would supply lift spare parts to any purchaser, such as third-party lift maintenance contractors. In assessing EM Services' commitments, CCS conducted public consultations and market tests to ensure that the commitments sufficiently addressed the competition concerns highlighted. In May 2016, CCS accepted E M Services' signed commitment. The duration of CCS' investigations in this case is similar to its past three investigations on Asia Pacific Breweries Singapore, Cordlife and Coca Cola which involved voluntary commitments. The investigations into the other companies are still ongoing and CCS does not name entities which are under investigation as the information is confidential.”
“For example, IE Singapore's Young Talent Programme exposes students from universities, polytechnics and the Institutes of Technical Education to internship opportunities in overseas markets, and equips them with foundational skills needed for international careers. SkillsFuture Study Awards for International Business are also given out to prepare professionals, managers and executives for international roles through various courses, market attachments and customised overseas immersion programmes.”
“The Government is also collaborating with trade associations and chambers to help SMEs prepare themselves for overseas opportunities. The IE-Singapore Chinese Chamber of Commerce and Industry Singapore Enterprise Centre (ISSEC) in Shanghai which is a joint initiative between IE Singapore and SCCCI is an example of such collaboration. Over the past three years, ISSEC has served more than 5,000 companies through outreach and advisory assistance, and provided research on emerging market opportunities in China. The companies assisted by ISSEC are predominantly SMEs and micro enterprises. ISSEC will be going beyond Shanghai to help such firms build up market expertise and capabilities in other parts of China. IE Singapore also has an extensive network of Overseas Centres internationally that provides targeted assistance for companies in both developed and emerging markets. This includes helping them generate new business leads in Southeast Asian markets such as Indonesia and Myanmar, gaining entry as first movers in emerging markets such as Africa and Latin America, and identifying opportunities to enhance technology capabilities in developed markets such as the United Kingdom and United States. Companies need the right talent to embark on internationalisation plans – people who have global mindsets, exposure to international business environments, in-depth understanding of industries, and the ability to navigate markets. To build a pipeline of global-ready Singaporeans for international roles, manpower development programmes are also in place.”
“Growth in Singapore’s services trade has outpaced that of goods in recent years. Between 2010 and 2015, services exports grew by a robust compound annual growth rate of 6.9%, compared to a 0.1% decline in goods exports. While services export growth has moderated since 2015, this was in line with the weakening global trade environment and largely attributable to the slowdown in segments supporting goods trade, such as freight services. Growth remained resilient in segments, such as insurance services, telecommunications, computer and information services, which continue to see regional demand. Singapore has a broad network of free trade agreements and regional initiatives that help companies tap into external demand for our goods and services. For example, the ASEAN Economic Community (AEC) allows our services exporters greater market access to the ASEAN region with restrictions lowered in more than 80 services sectors. The AEC’s continuing efforts to facilitate, protect and liberalise cross-border investments enable our companies to venture into the region at lower costs and with greater assurance. Singapore also has a suite of assistance schemes that help small and medium enterprises internationalise and trade with overseas markets. These include the Market Readiness Assistance (MRA) and the Global Company Partnership (GCP) schemes administered by International Enterprise (IE) Singapore. The MRA provides broad-based assistance to companies that are starting to internationalise, while the GCP provides targeted assistance to companies with a more established overseas presence. The GCP covers capability and manpower development, market access and financing. Over 80% of the beneficiaries of these assistance measures are SMEs.”
“This could include checking reviews on the reputation of websites and retailers, refund policy and mechanisms, and conditions regarding the use of consumers' data. In the past five years, the Police have handled an average of 1,000 cases per annum involving online fraud. These usually involve advance payments made to online retailers which subsequently do not deliver the goods.”
“Goods and services tax (GST) is levied on the import of goods into Singapore. All local businesses and individuals, including consumers making purchases from online shops located offshore, are required to pay GST when the goods are imported into Singapore. The only exception is where the goods are imported via air or post and the value of the goods fall below $400. The concession is given in recognition that the compliance cost could outweigh the GST collection if every import, regardless of value, is subject to GST. The Consumer Protection (Fair Trading) Act, or CPFTA, provides the same protection to consumers who make purchases from online retailers or brick-and-mortar shops. This means that actions can be taken against errant online retailers under CPFTA. SPRING Singapore, as the administering agency for CPFTA, is empowered with investigation and enforcement powers to take action against errant retailers who persist in unfair practices. The collection, use and disclosure of personal data in Singapore comes under the Personal Data Protection Act (PDPA), which is enforced by the Info-Communications Media Development Authority. PDPA is a baseline law that is applicable to all organisations that engage in the collection and processing of personal data in Singapore, regardless of whether they have a physical or online presence. Enforcement of Singapore legislation against online retailers located offshore with no presence in Singapore is challenging. This is a practical jurisdictional issue which is not unique to Singapore. Hence, consumers need to be aware of the risks of purchasing from online retailers located offshore and take extra steps to protect themselves before making their purchases.”
“JTC benchmarks its land rents internationally to ensure that they are competitive. It also adjusts the rents based on local market conditions. Over the past year, JTC has reduced its land rents by between 8% and 17%, in line with market movements. It will continue to ensure that the rents remain affordable for our industrialists, including small and medium enterprises (SMEs). Apart from this, JTC has been supporting SMEs in other ways. For example, JTC has released more land through the Industrial Government Land Sales programme in the past five years. This has increased the supply of industrial space in the market. Market space rents have correspondingly moderated. From now till the end of 2017, about three million square metres (sqm) of industrial space is estimated to come on-stream, which is higher than the average annual supply and demand in the last three years, of around 1.9 million sqm and 1.2 million sqm respectively. This is likely to exert further pressure on market rents. JTC has also improved market transparency by publishing more granular price and rental information on its website. In addition, JTC has developed, and will continue to develop innovative multiple-user ready-built facilities to strengthen the competitiveness of SMEs. These developments cluster companies and facilitate industry collaboration. They also contain shared facilities and services that help companies reduce their upfront capital investment and operating costs.”
“The Department of Statistics (DOS) conducts regular reviews of the data series that it publishes, and may decide to stop the publication of those which are assessed to have low demand. In the case of the indigenous GDP and GNI series, DOS decided to stop publishing them with effect from the 2013 Yearbook of Statistics Singapore as there was a lack of public interest in the two series. In particular, there were no online downloads of the series nor specific queries on the series from the public in the years leading up to the decision to stop the publication of the series. Nonetheless, DOS has continued to compile the two series internally and will provide them to users on request.”
“Singapore’s indigenous GDP, GDP per capita, GNI and GNI per capita valued at current market prices for the years 2012 to 2015 are provided in the table below. Page: 103”
“Mdm Speaker, as I have mentioned just now, our baseline projection is not an outright recession, but we cannot rule out the possibility that the economy will experience some quarters of negative growth on a quarter-on-quarter basis. But, overall, we expect our economy to still grow at between 1% and 2%, albeit on the lower end of the projection.”
“In view of the challenging conditions faced by our companies in the marine and offshore engineering segment, the Government has also deferred the Foreign Worker Levy increases for the marine sector for one year. Given the sluggish economic conditions and domestic restructuring, unemployment and redundancies have risen slightly. The Government will work with our tripartite partners to step up efforts to help our displaced workers. These include various career and employment support schemes under SkillsFuture and Adapt and Grow initiatives. Minister Lim Swee Say will be elaborating on these efforts later on. Despite the global headwinds, it is important that we press on with our efforts to steer our economy towards a more sustainable growth path driven by productivity and innovation. We must continue to transform our industries and create good jobs for Singaporeans over the longer term. Minister Iswaran will be elaborating on some of the efforts in these areas as well.”
“Third, domestically-oriented sectors, such as food services and real estate, are likely to remain weak. Notwithstanding the general slowdown in growth, there are bright spots in the economy. Tourism-related sectors, such as accommodation, have benefited from the recovery in tourist arrivals. Growth in "other services industries" and the information and communications sector is also expected to remain resilient, supported by growth in the education, health and social services, as well as the IT and information services segments respectively. On balance, MTI expects growth in the second half of the year to come in lower than the 2.1% achieved in the first half of this year. For the full year, MTI's forecast remains at 1% to 2%. However, given the weakness seen in recent incoming data, such as the NODX data, growth may come in at the lower end of the range. MTI will be releasing the advance estimates of third quarter GDP growth on 14 October and the updated growth forecast for 2016 in November. As the global economic situation remains fluid, the Government will continue to monitor the situation closely and stands ready to respond in the event of a downturn. Depending on the nature and severity of the downturn, the Government is prepared to consider introducing a range of contingency measures, which could include broad-based as well as sector-specific measures. Companies adversely affected by the slowdown can tap on assistance measures that are already put in place. Page: 26 For instance, as part of Budget 2016, the Government introduced the SME Working Capital Loan scheme to help address SMEs' cash flow concerns and growth financing needs.”
“Mdm Speaker, as a small open economy, Singapore's growth prospects are affected by developments in our external environment. Since the Global Financial Crisis, global growth has been weaker than expected and the International Monetary Fund (IMF) has been downgrading its global growth forecast almost every year. In the near term, the global economic outlook is expected to remain weak. Investment demand in key advanced economies remains sluggish, while China's growth continues to moderate as it restructures its economy. Low oil prices have also affected the growth prospects of oil exporters, including those in the region. At the same time, global trade flows have been weak, in part due to the sluggish global growth, as well as in-sourcing trends in economies like China. More recently, the UK's vote in June to leave the European Union has dampened and added uncertainties to the global growth outlook. So, against this backdrop, growth in the Singapore economy has slowed, from 4.7% in 2013, to 3.3% in 2014 and 2% in 2015. While growth came in at 2.1% in the first half of 2016, it is likely to weaken in the second half of this year. First, externally-oriented services sectors, such as finance and insurance, and wholesale trade, have slowed and could continue to face external headwinds. Second, although manufacturing output saw a pick-up in the second quarter, it has shown signs of weakening on the back of sluggish external demand. Low oil prices have continued to dampen the performance of firms in the marine and offshore engineering segment, as well as those in the precision engineering cluster that support the global oil and gas industry. In line with the weakness seen in the manufacturing sector, non-oil domestic exports (NODX) contracted over the July to August period.”
“In addition, all companies must comply with the Tripartite Guidelines on Fair Employment Practices and have fair employment practices that are open, merit-based and non-discriminatory.”
“The Economic Development Board (EDB) adopts a targeted approach to investment promotion, attracting projects that are in line with Singapore's competitive strengths, as well as our constraints in manpower, land and planned international commitments on carbon emissions, to create good jobs for Singaporeans. From 2011 to 2015, EDB secured commitments of S$65 billion in fixed asset investments. These investments are expected to generate total business expenditure per annum of S$34 billion, value-added per annum of S$77 billion, as well as create 107,000 jobs when fully implemented. The Government works with relevant educational institutions and industry partners to ensure that Singaporeans are equipped with the skills to take up good jobs. This is embodied in the national SkillsFuture movement, which develops an integrated system of education, training and career progression for all Singaporeans, promotes industry support for individuals to advance based on skills, and fosters a culture of lifelong learning. One initiative that encourages employers to develop a Singaporean Core is the SkillsFuture Earn and Learn Programme. This is a place-and-train programme for fresh polytechnic and ITE graduates, who are matched with employers and have opportunities to learn through structured on-the-job and institution-based training. This programme equips graduates with industry-relevant skills. Those who successfully complete this Page: 153 programme receive industry-recognised qualifications. The Government also ensures that Singaporeans have a level playing field for good jobs through the Fair Consideration Framework. It sets out clear expectations for all companies to consider Singaporeans fairly for job and career opportunities.”
“Sole distributorship agreements are generally understood as vertical agreements, whereby a supplier sells its product through a single distributor. Such vertical agreements are not agreements between competitors and, hence, do not in themselves constitute anti-competitive behaviour under the Competition Act. However, anti-competitive behaviour can arise in a situation where a sole distributor abuses its market power to impose other restrictions in the market to impede its competitors from competing. The Competition Commission of Singapore (CCS) will have to assess each case based on the specific facts to determine if there is any infringement of the Act. In the event where a sole distributor is found to have infringed the Act, CCS has the power to impose a financial penalty on the infringing player and also issue directions to bring the infringement to an end. This may include directing the infringing player to amend its sole distributorship agreement by removing the offending clauses or terminating the entire agreement.”
“As a consequence of El Nino, the United States (US) Department of Agriculture expects a reduction in world rice production for 2016 by 1.6% or 7.7 million metric tons due to reduced crop yields in major rice-producing countries, such as Thailand, India and Vietnam. However, the market does not expect a supply disruption, due to the availability of rice from stockpiles, such as those in Thailand. Furthermore, El Nino has weakened with the arrival of the monsoon in June. World rice production for the year ahead is forecast by the US Department of Agriculture to increase by 9.8 million metric tons. Retail prices of rice in Singapore have been relatively stable in the last one year and are expected to remain so for the rest of the year, barring any unforeseen crisis.”
“The Economic Development Board (EDB) actively encourages the MNCs it engages to partner local SMEs. Besides engaging MNCs in Singapore, EDB also facilitates regular visits by overseas-based MNC executives to assess possible partnerships with local SMEs in Singapore, including outsourcing opportunities. These will continue to be priorities for EDB. For example, EDB and SPRING Singapore have been actively working with MNCs to groom promising SMEs and start-ups in the cleantech industry, including both the water and clean energy sectors. One such partnership that EDB and SPRING Singapore have facilitated is between Green Koncepts (a local SME offering energy management system solutions) and DNV GL (an MNC that offers testing, inspection and certification services for sectors, such as cleantech and marine and offshore). Under this partnership, Green Koncepts is developing building and home energy Page: 81 management solutions at NTU. If successful, these solutions could be exported to regional markets. Our economic agencies also work with the Trade Associations and Chambers (TACs) to create networking opportunities between MNCs and SMEs through industry collaborative platforms and dedicated supplier conferences. For example, in conjunction with the Singapore Airshow 2016, EDB partnered SPRING Singapore and the Association of Aerospace Industries (Singapore) to organise an Airbus supplier conference. This conference was attended by over 30 Singapore-based companies, many of whom were new to the aerospace industry.”
“From 2011 to 2015, the Economic Development Board (EDB) secured commitments of S$65 billion in fixed asset investments. These investments are expected to generate total business expenditure per annum of S$34 billion, value-added per annum of S$77 billion, as well as create 107,000 jobs when fully implemented. EDB adopts a targeted approach to investment promotion, attracting projects that are in line with Singapore's competitive strengths as well as our constraints in manpower, land and planned international commitments on carbon emissions. Besides attracting new investments, EDB also works closely with other Government agencies to support existing companies in Singapore to strengthen their competitiveness, raise productivity and create good job opportunities for locals. For example, EDB partners the Ministry of Manpower (MOM) and the Singapore Workforce Development Agency (WDA) to engage companies on equipping their local workers with the relevant skills for their jobs. Where relevant, companies are also encouraged to redesign jobs to meet the needs of older workers through schemes, such as WorkPro, which is jointly developed by MOM and WDA.”
“Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates of Expenditure for the financial year 2016/2017 and ask leave to sit again tomorrow.”
“Sir, may I seek your consent to move that progress be reported now and leave be asked to sit again tomorrow?”
“Our strategy for China is very comprehensive. We have a bilateral FTA which we are in the process of reviewing and improving. That is the bilateral Singapore-China FTA. We have an ASEAN-China FTA, which also presents quite a lot of additional benefits to us. Last year, we just concluded an upgrade of the ASEAN-China FTA. Over and above this, we have the RCEP. The reason why I consider the RCEP very important is, as I had explained in my speech just now, in North America, you have NAFTA, and that makes it very difficult for us to break into NAFTA, because the supply chain of the US, Canada and Mexico is very closely integrated. So, when we have TPP, we are now able to be part of that bigger ecosystem. As I had mentioned, our automotive components companies now have a fair chance of breaking into the automotive market in the US and compete with Mexico and Canada. In Asia, there is a potential NAFTA-equivalent if China, Korea and Japan conclude their trilateral FTA. If that happens, Singapore will be excluded. So, it is very important for us to have the RCEP, so that we are part of the 10+6, so that we are also part of a bigger market and a bigger ecosystem. As I had emphasised in my speech just now, our trade policy must be inclusionary. We should not be left out, because we want market access to as many markets as possible.”
“For example, to get the RCEP resolved, you have to solve the bilateral dynamics between India and China, just to illustrate. So, it is not a simple task where we can get to a successful conclusion of RCEP by the end of the year. We still need many, many more steps to get there. As to the dynamics between TPP and RCEP, it is quite obvious that when TPP was concluded, there was greater pressure on RCEP participants to get RCEP also concluded. If we do not ratify the TPP, then I am very concerned that the pressure on RCEP may be lifted. RCEP participants may not feel the same pressure to get it concluded. This is already in addition to the very complicated political dynamics within the 10+6 participants of RCEP.”
“We have all been following the progress of TPP in the various countries, all 12 of us. The good news is that the Japanese are proceeding to get TPP ratified in their Diet before July, before the Upper House's elections. For the US, they have been telling us that they are very deeply engaged with the Congress leadership. They have very good experience taking the Trade Promotion Authority, the fast-track authority, through Congress. They know roughly where the votes lie – both in the House as well as the Senate. They are having very close links with the congressional leaders in the different groups to see whether this vote pool is still valid for the next step of ratification. So, we are watching the developments. As I had mentioned in my speech just now, although we have the bilateral US-Singapore FTA, the TPP adds on to this, because, for one, the TPP gives us a free trade agreement with Canada and Mexico, which we do not have bilateral FTAs with thus far. But more importantly, the TPP gives us better market access because of regional cumulation. I gave the examples of automotive components and textiles and garments. Singapore companies can now source from TPP countries and this is then added on to qualify for the rules of origin to enter preferentially into the TPP markets. So, even though we may have the US-Singapore FTA, the TPP adds a new dimension and more market access. Therefore, it is very important for us to have the TPP ratified as soon as possible so that our companies can benefit from the TPP. On the RCEP, it is a very different set of dynamics, because we have the ASEAN countries and the six ASEAN+1 dialogue partners. As we know, with the dialogue partners – Australia, New Zealand, China, Japan, Korea and India – the dynamics are very complicated.”
“The key in seconding public officers to TACs is to strengthen their secretariat because we recognise the key to a successful implementation requires the secretariat to be reinforced. We have to work very carefully because, as we all know, TACs differ very significantly. Many of the TACs have adequately resourced secretariats already. What we need to do is to work with them to strategise and to work out the sectoral plan. Some TACs require reinforcement. This is the area where the secondment of the 20 public officers will make some impact. Then we will have to see how it goes. Based on the experience of working with these TACs, we will have to then amend and adapt our plans accordingly.”
“As the global economy rebalances, we will continue to work with businesses to stay the course on economic transformation and ensure that Singapore remains attractive to foreign investments. Our economic growth strategies will enable us to seize regional as well as global opportunities to create more value. Together, we can continue to create good jobs for Singaporeans and ensure that we are well-positioned for the future. 5.15 pm”
“MTI is one of the key agencies supporting SkillsFuture and we will continue to work with the various Government agencies to support our companies and workers. Mdm Chair, we can confidently address the regional and global challenges facing us because Singapore has a strong foundation from which to work from. This includes our strong legal and physical infrastructure, our well-diversified economy and an educated workforce. We need to build on these strengths and continue to implement measures to stay competitive. That is why it is timely to reiterate the key principles that will continue to remain relevant in the years to come. First of all, as a small economy, we must remain open and connected to grow the external wing of our economy. Our external economy can continue to contribute significantly to our GDP and good jobs. So, we must look at opportunities that lie beyond our shores in markets, such as ASEAN and beyond. Second, we need to leverage the small size of our economy to our advantage and be more nimble, adaptable and flexible. We must adapt to changes brought about by the rebalancing of the global economy. We cannot simply remain business-as-usual and we cannot be afraid of change, or we will be left behind. Third, we need to leverage key trends and our strengths to develop growth areas that can create value, and invest in future growth engines to spur our economy. We must prepare ourselves for the future and the Committee on the Future Economy was, therefore, established to leverage these opportunities. Mdm Chair, through these efforts, we will ensure that Singaporeans will continue to benefit from our economic growth.”
“However, when the TPP enters into force, Singapore will have direct access to all the NAFTA markets and, because the rules are applied commonly to all TPP countries, Singapore automotive parts manufacturers may become a competitive supplier of auto parts to TPP countries over time. In other sectors, such as textiles, our companies, likewise, have difficulties utilising the US-Singapore FTA to enter the US market at a preferential rate, because too little of the raw materials are being produced in Singapore. With the TPP, however, more of the raw materials that we process will count towards being "TPP or Singapore made". Our garment manufacturers can, therefore, look forward to sourcing more competitively from the TPP region and focus on keeping the high-value aspects of production in Singapore, knowing that their exports will now enjoy a comparative advantage because of this "regional cumulation" effect. This is a very significant development, especially for our SMEs in the textile and garment sector. MTI has been actively engaging businesses on the benefits of the TPP through platforms such as the recent SME Convention 2016. We will work closely with our TACs and our economic agencies will develop more sector-specific outreach sessions. Mdm Chair, agreements like AEC, RCEP and TPP will enhance the competitiveness of our companies as well as our workers, and support the creation of good jobs for Singaporeans. The SkillsFuture movement will prepare Singaporeans to take advantage of the evolving job landscape and opportunities provided by these regional economic integration efforts. Specific sector plans will be targeted at upskilling workers in both the traditional areas, such as retail, as well as the emerging areas, such as finance technology, or Fintech.”
“Along with ASEAN's commitments to facilitate, promote, protect and liberalise cross-border investments, Singapore companies can now venture into the region at lower costs and with greater investment protection. The engineering services sector provides a useful example of how our companies can benefit from AEC. Singapore companies can now own a 100% stake in Indonesia's engineering design and advisory services, as well as in Myanmar's engineering and construction services sectors. Our companies can also benefit from legally-binding guarantees of preferential services market access in the ASEAN region. Mdm Chair, regional integration is critical in strengthening Singapore's value proposition as a gateway into Southeast Asia. The tighter the regional integration, the stronger our value proposition as a gateway to ASEAN. Therefore, as a small country, Singapore must adopt an inclusionary approach towards trade agreements. This is why we are a founding member of key trade agreements like the Regional Comprehensive Economic Partnership (RCEP), TPP and the eventual Free Trade Area of the Asia Pacific (FTAAP). Being part of such agreements allows us to influence the rules of engagement and, where possible, enables us to enhance demand of manufactured goods and services from Singapore. Regional trade deals like the TPP enable us to improve our market access beyond what we already have under our bilateral trade agreements. For example, despite the fact that we have the US-Singapore FTA (USSFTA), few of our automotive parts manufacturers would export to the US today. This is because the US also has the North American Free Trade Agreement (NAFTA), which has created a very competitive automotive supply chain amongst the US, Canada and Mexico.”
“Assoc Prof Randolph Tan asked about our 2015 services trade performance and the opportunities from the AEC as well as TPP. While our services trade balance is, indeed, negative, the deficit has generally narrowed over the past 10 years. In fact, over the period 2010 to 2014, our services exports have actually recorded robust growth of 8.6% on a compound annual growth rate (CAGR) basis and continue to be a good engine of growth. The slowdown in Singapore's services export growth in 2015 was in line with the weakening global trade environment. Nevertheless, amidst this slowdown, we observed that export growth in the financial services as well as telecommunications, computer and information services sectors remained healthy. Over the longer term, the outlook for these services sectors remains promising, given the rise of the middle class and urbanisation in regional economies like ASEAN. Specifically, AEC and TPP will provide opportunities for us to expand the reach of Singapore's services exports and facilitate services trade flows to our major services export markets. Mr Cedric Foo and Mr Pritam Singh asked about the benefits of AEC and TPP to Singaporeans and Singapore companies. AEC will benefit Singapore companies over a broad spectrum of sectors. Virtually all goods now flow throughout the ASEAN region tariff-free. This allows our businesses to trade and gain market access into the region while bearing practically zero customs duties. Restrictions have also been eased in at least 80 services sectors. ASEAN countries now allow majority foreign ownership in many sectors.”
“A total of six service providers were engaged to pilot this adoption for 39 companies in the waste management industry. Expected outcomes include a 25% increase in productivity of each truck, improvement in working conditions and, therefore, manpower retention, as well as improvement in workplace safety. Minister of State Koh Poh Koon will elaborate on our partnership with TACs when he responds on the segment on SMEs. Mdm Chair, as we stay the course on economic restructuring, we will continue to ensure that Singapore remains open and attractive to foreign investments. Mr Cedric Foo asked about our foreign investment attraction strategy. We have adopted a targeted approach towards attracting foreign investments that take into account our competitive advantage, growth opportunities as well as constraints in manpower, land and planned international commitments on carbon emissions. For example, we will continue to pursue opportunities arising from growth drivers, including the rise of consumerism and urbanisation in Asia. Our investments in advanced manufacturing capabilities, such as robotics, 3D printing and digital manufacturing, will also position our manufacturing sector well for the future. More importantly, our efforts must translate into good job opportunities for Singaporeans. We have a comprehensive suite of manpower development initiatives, in partnership with the industry and the Institutes of Higher Learning (IHLs), to ensure that our workforce has the right skillsets to take up the new jobs that have been created. Parliamentary Secretary Low Yen Ling will elaborate on this later. Beyond attracting companies to Singapore, we are also working to establish stronger trade linkages to support Singapore companies looking to expand overseas.”
“Companies should, therefore, take this opportunity to consider regrouping and consolidating their space and land requirements, and leverage these new facilities to achieve better operational efficiency and higher productivity. Such transformation will require deep partnerships between the Government and industry, and among the industry players to develop a more competitive sectoral response. We recognise that implementation is key. TACs can do more and, in fact, they want to do more, but are constrained by their limited resources. This is why we are introducing a new LEAD+ programme, which will help TACs to strengthen in-house capabilities in four ways. First, strengthen leadership within TACs, such as through consultancy support for strategic plan development. Second, build capability in TAC secretariats, including training to manage corporate functions. The Government is also prepared to second up to 20 Public Service officers over the next five years to TACs under this LEAD+ programme. Third, develop robust processes, particularly in the areas of human resource, information technology and finance, and enhance their branding of TACs. Fourth, enhance TACs' ability to provide services to companies, such as market research and technology mapping. Apart from strengthening TACs' capabilities, we will also partner TACs to drive 30 Collaborative Industry Projects (TAC-CIP) over the next three years. TACs will source for bottom-up, scalable solutions to industry-specific productivity and innovation needs. We expect this programme to benefit over 3,000 SMEs. For example, the Waste Management and Recycling Association Singapore (WMRAS) led a project to encourage the mass adoption of automated canvas covers for the trucks used in waste collection.”