Tharman Shanmugaratnam
Singapore
“EDB conducts regular reviews to GIP to ensure its effectiveness in attracting only top-tier business leaders who are interested to drive the growth of their businesses and investments from Singapore.”
“MAS may vary the size of the additional capital requirement imposed on the bank and take other regulatory actions depending on the outcome of ongoing reviews. MAS requires all retail banks in Singapore to ensure that their mission critical systems supporting digital banking are resilient.”
“This question will be answered in the reply to Dr Tan Wu Meng's Parliamentary Question filed for tomorrow's Sitting. [Please refer to "Probe into Recent Disruptions of DBS' Digital Bank and Physical ATM Services and Preventive Measures Implemented", Official Report, 5 July 2023, Vol 95, Issue 107, Written Answers to Questions for Oral Ans…”
“Borrowing from the banks is one of the ways in which MAS carries out MMOs to soak up such excess liquidity. Like other central banks, MAS does this daily through an auction system, enabling MAS to withdraw liquidity through the Primary Dealers that submit the most competitive prices.”
“To mitigate consumer over-indebtedness, the Monetary Authority of Singapore (MAS) requires financial institutions (FIs) to implement a range of safeguards when extending mortgage loans and unsecured credit.”
“The Monetary Authority of Singapore imposes on external asset managers the same stringent regulatory standards for anti-money laundering and countering the financing of terrorism that it imposes on banks.”
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“The enhancements to the TEC will cost an additional $1.4 billion over three years, on top of the $330 million from the 0.5% TEC that was announced last year. [Please refer to Annex A-3.] Our foreign worker policies have been progressively and significantly tightened since 2010. They are succeeding in slowing down foreign workforce growth. Excluding Construction, the net inflow of foreign workers has slowed significantly from 60,000 in 2011 to just over 16,000 in 2014, excluding foreign domestic workers. In the Construction sector, the growth was around 10,000 in 2014, far lower than recorded in the previous two years. The significant slowdown we have seen in the last year gives us space to adjust the pace of our tightening measures. We will thus defer this year's round of announced levy increases for S Pass and Work Permit Holders in every sector. This will give companies, especially our SMEs, more time to adapt to the new normal of a permanently tight labour market, where it is both difficult to find Singaporean employees, and foreign workers are no longer an easy solution. It will give them time to adapt to this reality of a tight labour market. However, to avoid any misunderstanding, let me affirm unequivocally that while we are adjusting the pace of our foreign worker measures, we are not changing direction. It remains crucial for Singapore that we restructure towards reducing our reliance on manpower and Page: 39 find new and more innovative ways of doing business. We will also make further adjustments to the Manufacturing and Construction sector levies. In the Manufacturing sector, there has been no increase in the number of Work Permit holders over the past year. The sector is also making good progress on productivity.”
“The extension of the corporate income tax rebate is expected to cost about $800 million over two years. I introduced the PIC Bonus to encourage businesses to take advantage of the main PIC scheme, which offers substantial enhanced tax deductions or cash payouts on qualifying activities. The PIC Bonus was intended as a transitional measure and has been successful in spreading the culture of productivity amongst SMEs. Last year, I extended the main PIC scheme to YA 2018. I also introduced a higher level of support, the PIC+ scheme, to benefit SMEs undertaking more significant investments in productivity. As we now have good take-up of the PIC scheme, we will let the PIC Bonus expire in YA 2015. Further, we will introduce additional measures to support innovation and internationalisation, which I will speak about Page: 38 shortly. Last year, we announced a one-year Temporary Employment Credit or TEC, which provides employers an offset of 0.5% of wages to help them adjust to the increase in Medisave contribution rates which took effect in January 2015. This year, we will enhance the TEC in two ways. First, we will raise the TEC to 1% of wages in 2015. This will provide additional support to firms for their labour costs, or an extra 0.5 percentage points on top of what I announced last year. Second, I will extend the TEC by two years, to help employers adjust to the cost increases due to additional CPF changes which I will speak about later in this Budget Speech. These new changes will take effect from January 2016. I will give an additional TEC of 1% of wages in 2016 and 0.5% of wages in 2017. In essence, this extension of the TEC will offset two-thirds of the employers' costs due to CPF changes in 2016, and one-third in 2017.”
“I will thus phase the transitional support out gradually by extending the Wage Credit Scheme and corporate income tax rebate for two additional years, while letting the PIC Bonus expire. Page: 37 I will extend the Wage Credit Scheme for 2016 and 2017, to give employers more time to adjust to the tight labour market. Over the next two years, the Government will co-fund 20% of wage increases given to Singaporean employees earning a gross monthly wage of $4,000 and below. This co-funding will apply to wage increases given in 2016 and 2017, over the employee's wage level in the preceding year. In addition, if wage increases given in 2015 are sustained in 2016 and 2017, employers will continue to receive co-funding, at the new rate of 20%. Under the current package, it is a 40% co-funding rate. Reducing it to 20% for the years 2016 and 2017 phases out the Wage Credit Scheme gradually. The Scheme is intended to help businesses through this restructuring and we will not retain it for the long term. So, the basic features of the scheme are the same. It applies to workers up to a salary level of $4,000. But we will step down the Government subsidy rate from 40% to 20%. It still remains 40% for wage increases this year, but for 2016 and 2017, it will be stepped down to 20%. The extension of the WCS will cost about $1.8 billion over two years. Corporate income tax rebate. As firms continue to face cost pressures in this period of restructuring, I will extend the corporate income tax rebate for Years of Assessment or YAs 2016 and 2017 at the same rate of 30% of tax payable, but up to a lower cap of $20,000 per YA. So, we will lower the cap to $20,000. This reduced cap is to ensure that more support is focused on SMEs.”
“We have seen good take-up of our productivity schemes so far. Most of our firms are now engaged in thinking about productivity and many are already adopting basic solutions. But we have to move beyond the basic solutions, with a critical mass of businesses in each sector going for more significant breakthroughs in the way business is done. The business transformations that underpin a major shift in productivity will take time. It also takes time for the market to restructure with adopters of new ideas and technologies gaining share at the expense of those who stand still. It takes time for this market restructuring to favour those who are innovating against the rest, but we have to build momentum into the process now. In our next phase of restructuring, we will therefore keep up our broad-based support for productivity but increase support for efforts to innovate, in all its forms – new ways of reaching customers, devising a new design or brand; or creating value through major re-skilling of their people and a radical overhaul in the way work is done. Every form of innovation counts. The Transition Support Package has been an important source of support to businesses since it was launched in 2013. It has three components: the Wage Credit Scheme, corporate income tax rebate and Productivity and Innovation Credit Bonus or PIC Bonus. In total, the Transition Support Package is estimated to disburse $7.5 billion over three years, significantly higher than our original estimate of $5.3 billion. We have received feedback from the business community to extend the Transition Support Package, which is due to expire this year. We recognise that firms may need more time to adjust to rising costs as they restructure.”
“There is a stark difference between these two halves of the economy – the internationally-orientated and the domestically-orientated, such as construction, retail and F&B. Over the past five years, our outward-oriented sectors saw productivity growth of over 5% per year on average, compared to less than 1% for our domestic-oriented sectors. Further, employment growth has been mainly in the domestic-oriented sectors. This is essentially why our overall productivity growth has lagged. Every sector can achieve a lift in productivity, but it is especially important for our domestic sectors. It will only happen as firms rethink business strategies, seek to break the mould by finding new ways of growing their revenues and take full advantage of Government incentives for upgrading. Our tight labour market itself will motivate businesses to do so. We know that this major upgrading is possible in our domestic industries where productivity has lagged, because there are leaders internationally who have done it. Many of our businesses are already moving. Samwoh in the construction industry is one example. It has used Government grants to invest in R&D on recycling waste materials such as rubber tyres and rubble into new construction materials. Samwoh is doing this to make a mark for itself in sustainable construction. Page: 36 It is developing its people. Like Lim Wee Fong, who joined them as a researcher while doing part-time Masters studies at NTU. He now manages Samwoh's research lab which is looking at further innovations. It is an example of what can be done – investing in R&D to develop new revenue streams for the future. Budget 2015 will sharpen support to businesses that are making significant effort to raise productivity, especially by innovating and internationalising.”
“To uplift the broad base of companies, and to help Singaporeans develop their careers across our economy, we need new forms of industry collaboration. We will strengthen collaboration between training institutions, unions, Trade Associations and employers to chart out future skills needed, and plan systematically to develop these skills in our people. Training may take place in our educational institutions, in our lifelong learning institutes, at industry campuses, or on the job. We will work with all stakeholders to develop and implement these comprehensive Sectoral Manpower Plans (SMPs) in all key sectors by 2020. Page: 35 We will also work with our industry partners to develop a shared pool of SkillsFuture Mentors. These will be people with specialised, industry-relevant skills, which SMEs can tap on. They will help SMEs overcome the constraints they face in training capabilities and capacity. We will start rolling out this scheme this year for industry mentors in sectors that are more ready, such as the Retail, Food, and Logistics sectors. More details on these initiatives will be released later. [Please refer to Annex A-2.] Mdm Speaker, I will now move on to the second major plank of this year's Budget – Investing in Innovation and Internationalisation. Our productivity level today is 13% higher than the start of our restructuring journey in early 2010. This is an average growth rate of 2.5% per year. But all of this gain was achieved in 2010 and 2011 as we recovered from the recession, and growth has been negligible in the three years since then. There is a stark difference between productivity growth in industries where our businesses compete internationally and in those sectors where businesses compete mainly in the domestic market.”
“We will award about 100 fellowships a year, which can be used for a range of education and training options, in both craft-based and knowledge-based areas. It will be funded from the SkillsFuture Jubilee Fund, which will be financed by voluntary contributions from employers, unions, the public and the Government. This broad-based involvement signifies everyone being a stakeholder. The SkillsFuture Fellowships will be introduced from 2016. The SkillsFuture Study Awards and Fellowships will be mainly used to develop deep skills and mastery in the growth clusters of the future. But we will be open to those who want to develop themselves in fields that they are really passionate about, that may not be in these growth clusters. Take individuals like Edwin Neo, for example. He was trained in interior design, but developed a passion for making high quality European-style shoes. He went to train under a master shoemaker in Budapest, in Hungary and came back to found his own company. He is doing well. His company is called Ed Et Al, selling both ready-to-wear shoes and upmarket bespoke creations. Not cheap, by the way. Finally, we will work with companies to grow Singaporean corporate leaders under the SkillsFuture Leadership Development Initiative. This initiative will provide support for companies who commit to developing a pipeline of Singaporeans to take on corporate leadership roles and responsibilities in the future. This too is important. A key challenge in SkillsFuture is to help uplift a significant base of our SMEs and involve them in this process of skills development. This will not happen naturally – many of our SMEs lack their own training capacity and are unable to plan for the future.”
“For a part-time undergraduate course such as a Bachelor of Engineering, which is already subsidised, the total fees payable by a student will be reduced by 60%, from about $17,000 today, to $6,800. So, that is the effect of enhancing the subsidy rate. It can be quite a significant reduction in their out-of-pocket costs. Second, Singaporeans will now be able to enjoy multiple subsidies from MOE for modular courses – at all levels, and regardless of age. This flexibility of modular, continuous learning will help individuals, who will often have to balance family and career together with their learning. Many individuals prefer to go for several bites of short courses, rather than to go for a long course. We will implement these enhanced subsidies later in the year. Beyond the SkillsFuture Credit that I spoke about and these broad-based subsidies, we will provide special support for Singaporeans seeking to develop deep skills in particular fields. First, we will introduce SkillsFuture Study Awards. They will support individuals who wish to develop the specialist skills required for our future growth clusters. For example, they may include software developers, satellite engineers or master craftsmen. The awards can also support those who already have deep specialist skills and wish to develop other competencies such as business and cross-cultural skills. At this stage, we are not setting a Page: 34 cap on the number of SkillsFuture Study Awards, but it should eventually be about 2,000 study awards per year. We will introduce the SkillsFuture Study Awards in phases, starting this year. Second, we will introduce SkillsFuture Fellowships, to develop Singaporeans to achieve mastery in their respective fields.”
“These will include courses offered by our Institutes of Higher Learning and accredited education and training providers, as well as a range of courses that are funded by the WDA. To complement this, each Singaporean will be given an online Individual Learning Portfolio – a one-stop education, training, and career guidance resource to help them plan their learning starting from their time in Secondary school. To cater to fresh graduates from our Polytechnics and ITE, we will launch a SkillsFuture Earn and Learn Programme in 2015. It will give them a head start in their careers. The graduates will be matched with suitable employers. They will start working and undergo structured on-the-job training and mentorship, while they study for an industry-recognised qualification. So, they start working, start earning, but they continue studying Page: 33 and they graduate from that stretch at work with an industry certification. Both trainees and employers who sign up for this programme will receive substantial support from the Government. This will be done in a phased way, eventually covering up to one in three Polytechnic and ITE graduates. So, there will be financial support for this. Next, for mid-career Singaporeans. We will enhance subsidies for mid-career Singaporeans. First, education and training subsidies for all Singaporeans aged 40 and above will be enhanced to a minimum of 90% of training costs for courses funded by MOE and WDA. This additional support from the Government recognises the opportunity costs that mid-career Singaporeans face when they go for education and training can be significant. These subsidies are significant.”
“We will roll out enhanced internships in two-thirds of Polytechnic courses and half of ITE courses over the next two years. The Minister for Education will provide more details during the Committee of Supply. Page: 32 The next stage concerns what happens after we graduate from school and tertiary education. We will invest continually in Singaporeans, throughout their careers. We will create a SkillsFuture Credit for all Singaporeans. NTUC and several Members of Parliament have previously suggested a scheme of this nature. Each Singaporean 25 years and above will receive an initial credit of $500 from 2016. We will make further top-ups to their SkillsFuture Credit at regular intervals. These credits will not expire, but can only be used for education and training. So, the credit stays with you and it can be used anytime you wish, for education and training, starting with $500 but with regular top-ups after that. We have decided to spread out the top-ups over the course of a person's life for two reasons. First, there is no need for anyone to rush to use their credit. While some may use their initial $500 immediately for a short programme, others may want to accumulate credits to engage in more substantial training later in their career. Second, we need time to develop quality offerings in our SkillsFuture landscape; quality education and training that is relevant to jobs and individuals' future careers. We must go for quality training which will open up career possibilities for individuals and that employers find relevant. The SkillsFuture Credit can be used for a broad range of courses supported by Government agencies.”
“SkillsFuture is not intended to tell young Singaporeans they have to zero in on a particular career at that stage, at an early age. However, we have to help them discover their strengths and interests, so that they can choose an educational path not determined just by cut-off points, but by informed choices about courses and the career opportunities that they lead to. We will develop a professional core of Education and Career Counsellors, for our schools and Institutes of Higher Learning. We will also scale up career counselling services at WDA for our working individuals. These counsellors will be equipped with the industry experience and knowledge needed to provide informed guidance. Next, we will improve internships in our Institutes of Higher Learning to make them more structured and meaningful. We will also help more of our students get international exposure, through more internships abroad. We have to develop much better internship programmes compared to what we have today, to help our students as well as our SMEs. There are some good examples of how this can be done. Hope Technik is a young company in Advanced Manufacturing. It has 50 people and takes in about 10 interns a year. The interns get a chance to pick up new skills beyond their formal Polytechnic and University curriculums. Hope Technik also hopes to retain some of them as future employees. Mohamad Jafry bin Samsudin is an example. During his internship at Hope Technik, he was involved in developing the latest generation of the SCDF's Red Rhino fire vehicles. Since graduating from Republic Polytechnic, Jafry has joined Hope Technik, where he continues on his journey of development. Many more of our SMEs can benefit in the same way.”
“MOE and WDA will enhance existing accreditation frameworks for this purpose for courses within the education and training industry. We must make it possible for every individual to decide on his or her own learning journey: when to go for fresh infusions of skills or knowledge and whether it should be in specialised professional training, acquiring soft skills or developing a new interest. No one can honestly tell what they will be doing a decade or two after leaving school. We must each develop through life, adapting to changes in the job market and the new opportunities that will come up. But whichever the field we are in or the job that we do, we must, as Singaporeans, aim to gain expertise and achieve mastery. Senthilnathan Manickam, 41, is an example. Senthil graduated from Ngee Ann Polytechnic's Film Sound and Video course. After some years of working on corporate videos and TV programmes, he felt he needed to specialise, to differentiate himself from the field. He chose to specialise in high-speed cinematography – 1,000 frames per second. He is making a name for himself in the field in Singapore and abroad. As Senthil puts it, "There isn't one path but many paths to achieve your dreams and be successful. Don't give up. You always learn something new every day." Page: 31 With the implementation of the full package of measures under SkillsFuture, we estimate that spending on continuing education and training will increase from about $600 million per year over the last five years, to an average of over $1 billion per year from now to 2020. I will also top up the National Productivity Fund by $1.5 billion this year to partly meet this increase in expenditure. This is a major allocation of resources for the future. We will start from our Secondary schools.”
“We have called this development effort "SkillsFuture". It marks a major new phase of investment in our people, throughout life. It starts in school, where all students will receive education and career guidance to help them make informed choices about the pathways available to them. They will be able to engage in deeper and more structured internship programmes, particularly while enrolled in our Institutes of Higher Learning. Once in the workforce, Singaporeans will be able to acquire deeper skills relevant to their jobs, as well as renew themselves by going back to education in the course of their Page: 30 careers. We will support these continuous engagements in learning. We will provide enhanced subsidies for courses, as well as special support through SkillsFuture Study Awards and SkillsFuture Fellowships for those pursuing mastery in their fields. These specific initiatives – the subsidies, the awards – will be accompanied by a lifelong SkillsFuture Credit which every Singaporean will receive. There will be top-ups at regular intervals with credits that they can use to help pay for courses of their choice. Every Singaporean can use the SkillsFuture Credit to take charge of their own learning over the course of their lives. SkillsFuture will involve new modes of learning – such as short modular courses, weekend workshops and learning online through Massive Online Open Courses. It will include executive and specialist development programmes, and on-the-job training both in individual firms and "industry campuses". It will also involve new types of educators and trainers, including industry practitioners, besides our academics. Developing this new landscape of learning will take time and resources, but we must put full effort into this.”
“Our aspirations are attainable. We can build a future that keeps social mobility alive in each new generation. A future that meets the Page: 29 aspirations of young and middle-aged Singaporeans and enables us to realise the best in ourselves. And a future with greater assurance as we grow old. We must go forward with the blend of imagination and practicality that brought Singapore this far in 50 years. With hard heads, but with warm hearts too, so that we all move up together. Mdm Speaker, I will now move on to the first major thrust of the Budget in a little more detail – Developing Our People. We have built a first-rate school system in Singapore. Compared to other countries, our students do better than their peers in learning. Importantly, we have achieved high average performance while avoiding the very large disparities in outcomes that many other education systems have. So, it is not just about the high averages, but avoiding large valleys in between the peaks. We have also built highly credible Institutes of Higher Learning. We are investing more in our ITE, Polytechnics and Universities to enhance quality and affordability and to offer more diverse pathways for Singaporeans to choose to advance themselves. We have also been developing a system of continuing education and training. Over the last seven years, the take-up of CET places has increased five-fold from 79,000 to 384,000, covering more than 30 industries. We will build on these foundations to create a new environment for lifelong learning. It is critical to our future. It will develop the skills and mastery needed to take our economy to the next level. More fundamentally, it aims to empower each Singaporean to chart their own journey in life and gain fulfilment at work, even in their senior years.”
“They will be on top of the changes recently proposed by the CPF Advisory Panel, aimed at providing more flexibility and certainty to CPF members, which the Government has accepted. That is the first set of changes – enhancing the CPF. Second, we will introduce the Silver Support Scheme that the Prime Minister spoke about at last year's National Day Rally. It will be a major new feature in our social security system. While Workfare systematically enhances the incomes of the bottom 20% to 30% of lower-wage Singaporeans during their working years, Silver Support will supplement incomes for 20% to 30% of seniors in their retirement years, with greater support going to the least well-off among them. Together with Workfare, Silver Support will help mitigate life's disparities. It is the fair thing to do, and complements the family support for our elders and the community initiatives that make us a strong society. This Budget will in addition encourage the spirit of philanthropy and giving, as part of Singapore's 50th year. It will also lend further support to families with children as well and include a few measures to help Singaporeans with the cost of living. Our total Government spending will go up significantly in the coming years. We are increasing development expenditures, as we reinvest in Singapore's future. We will also see a steady increase in operating expenditures, especially due to higher healthcare subsidies and the care needs of a growing older population. We must, therefore, strengthen our revenue base to support this increase in spending through the end of the decade. We have to strengthen our revenue base and I will talk about this later in the speech. It is much later, so you are advised not to hold your breath. Budget 2015 takes us into our future.”
“We have significantly expanded housing grants for both low and middle income couples so they can afford HDB homes. In healthcare, we introduced the Pioneer Generation Package or PGP last year and introduced permanently higher subsidies for lower- and middle-income Singaporeans of all ages. We have also transformed our social support networks on the ground. Older Singaporeans will remember the Social Welfare Department or what was more familiarly known in Hokkien as "Hock Lee Por" or 福利部. It provided some support for the homeless or those suffering from malnutrition. By the end of this year, we will have 24 Social Service Offices or SSOs in our HDB towns to disburse social assistance and coordinate social services for those in difficulty. That is 24 "Hock Lee Pors", closer to the ground and each providing a Page: 28 wider range of social support for Singaporeans who fall into difficult times. Plus we will have many more Senior Activity Centres and Eldercare Centres to provide recreation and care for our seniors near their homes. So, it is a transformed landscape of social support – we have enhanced not just the schemes, not just the subsidies, but the network on the ground, close to where people live. We will make further moves in this year's Budget. We will strengthen our social security system, to help Singaporeans supplement their incomes in retirement. It will complement the enhanced healthcare subsidies that we introduced last year. First, we will raise the CPF salary ceiling to benefit middle-income Singaporeans and raise contribution rates for older workers. We will also enhance CPF interest rates further in retirement to benefit those with lower balances. These are important enhancements.”
“Each of these efforts will be complemented by our Smart Nation initiative to improve the quality of life for the average citizen. These major investments in Singapore's future will mean significantly higher development expenditures. Our development expenditures have already increased from $12 Page: 27 billion five years ago to about $20 billion in the coming fiscal year. They will grow further, by 50% to about $30 billion by the end of this decade. That is a very significant increase in development expenditure. The last time we made such significant investments in infrastructure in proportion to GDP was in the 1990s, when we embarked on the development of Jurong Island, built the North-East Line and the Light Rail Transit network, and Changi General Hospital amongst other significant investments. Just as these investments two decades ago laid the foundations for better living standards over many years, we must now invest in the next era of jobs and incomes, and a higher quality of life. Mdm Speaker, we are taking further steps in this Budget to build a fair and inclusive society. They build on the major shifts in social policy that we have introduced in the last five years, to support both middle-income and lower-income Singaporeans. In education, we have substantially increased the number of teachers and allied educators in our schools to raise the quality of education for all. Our spending per student has increased by more than a third in real terms over the last five years, and with more resources going especially to students with a weaker start. We have also increased subsidies for lower- and middle-income students significantly, from preschool through to tertiary education. We have enhanced Workfare, which supplements the incomes of our lower-income workers.”
“It will take time to develop a new economic and social culture. Neither can we within a few years develop the deep pools of expertise that we need, transform our enterprises and achieve innovative breakthroughs in every sector. But we can only get to where we want in the long term by taking steps now, moving ahead relentlessly and never thinking that the status quo will get us to a better place. The third thrust of this Budget involves a major reinvestment in Singapore's infrastructure to meet our future economic and social needs. First, we are embarking on the development of Changi Airport's new terminal, T5. Changi is part of the lifeblood of our economy. T5 will be almost as large as T1 to T3 combined. It is a critical investment that will yield benefits for decades to come. It will enable Changi to keep its role as a leading hub for international transit, and create connections to emerging cities in Asia and globally. We are starting now, but the whole project will take more than 10 years. Together with the development of Tuas seaport over the longer term, we will secure Singapore's place in Asian and global logistics for many years to come. Second, we are investing to make Singapore a highly liveable city. We are making vast improvements in public transport and developing our heartlands into vibrant homes and communities. We are also expanding every dimension of the healthcare system: increasing the number of beds in acute hospitals by 25% by the end of the decade; doubling our community hospital beds; increasing nursing home capacity by about 70%; and investing to bring affordable care into the community so that our seniors can be cared for at home.”
“First, as individuals, we have to view the education that we get when we are young as but the starting point of a journey of personal learning and self-renewal throughout our lives. Whichever the job, we must want to master what we do and gain satisfaction from it. We must also develop a culture of mentoring, where individuals who have developed expertise and experience share their knowledge and passion with others, at their own workplaces, in the community, at education centres. Second, employers must recognise what the best companies have found: that people are their biggest opportunity. Every employer must look for the potential in their people, and put time and effort into developing this potential with them. It also means looking out for mid-career Singaporeans who are temporarily dislocated, and helping them to get back in, get retrained where necessary and contribute their worth. And it matters greatly too when employees are empowered. The most innovative companies find that ideas come from people from all across the enterprise – whether for an improved workflow, a new colour or Page: 26 design, or a better way to reach customers' hearts. Third, in industry, we need a new, collaborative culture, to take Singapore's skills to a much higher level. We do not have the long tradition of collaboration in countries like Germany and Switzerland, where it, in fact, started with medieval guilds and companies join forces to develop skills for the whole industry. We do not have that long tradition. We have to develop our own tradition and find practical means to deepen collaboration, industry by industry. It will be especially critical to developing capabilities among our SMEs, who on their own often lack the capacity to attract and train people.”
“We will support this through higher subsidies and a range of awards and fellowships for those pursuing mastery in their fields. SkillsFuture involves everyone: individuals and families, employers and industry associations, unions, education and training providers, and the Government as an active enabler in the whole Page: 25 initiative. Second, we must make innovation pervasive in our economy and take concerted steps to include as many SMEs as possible. Our industries have to shift from value-adding to value-creating. We have to bring new ideas to the market. The Government will refine the pace of increase in foreign worker levies, since foreign worker inflows have slowed down markedly. However, the tight labour market is now a reality. Firms have to devise new ways to survive and grow. We will give stronger support to SMEs who innovate and go beyond the norm. Every form of innovation counts, and must be supported – whether it is a new process or brand, developing online marketing or leveraging on big data. We will also strengthen support for our SMEs to venture abroad. Compared to a decade ago, many more SMEs are doing well overseas. They are growing and overcoming the constraints of our domestic economy. New technologies now present another opportunity. E-commerce, digitisation and crowd-sourcing of ideas and funds are levelling the playing field for startups and small enterprises, making it easier for them to compete with larger players and expand internationally. However, achieving this transformation towards deep skills and innovation will require more than new programmes, or a higher take-up of Government incentives. We need a different motivation in our society. Our economic and social culture must change.”
“Second, Applied Health Sciences, such as developing new medical devices and better nutrition, and transforming healthcare delivery to provide the best care in an affordable way. This cluster will help serve our social goals, but also develop economic leadership. Third, Smart and Sustainable Urban Solutions. There is growing demand in the world for Singapore's expertise in water and waste management, transport and urban planning. We must also develop new solutions to overcome our own physical constraints. Fourth, Logistics and Aerospace. We must entrench our position as a leading global hub, by investing in new technological platforms and in our air and seaport infrastructure. Fifth, Asian and Global Financial Services. Singapore is well positioned to serve the rapid growth of Asian finance, in areas such as infrastructure funding, structured trade finance and wealth management. In fact, virtually every area of Asian finance is multiplying, and we are very well positioned to serve that market. Besides investing in the advanced capabilities that these growth clusters need, we must retain our vibrance as a city by developing creative talents and refreshing our hotel and retail sector. In addition, we must ensure we have people with the skills and empathy needed for our important social priorities, such as strengthening early childhood education for those with weaker starts in life. We are therefore embarking on the next wave of investment in our people. Through SkillsFuture, we will help Singaporeans learn at every age, and develop expertise and flair in every field. We will develop a whole array of learning options for individuals to choose as they shape their journey through life.”
“First, we will invest in the skills of the future and empower every individual to learn and develop through life. We must become a meritocracy of skills, not a hierarchy of grades earned early in life. A society where people keep learning and pushing their potential and are valued for their contributions at each stage of life. Second, we will continue to restructure our economy and support the next generation of business successes by promoting innovation and internationalisation. Third, we will invest in economic and social infrastructure for the future, to create new competitive strengths, a highly liveable home for Singaporeans and quality healthcare. Fourth, we will strengthen assurance in retirement, complementing the Pioneer Generation (PG) Package and other social policy shifts in recent years. We will also enhance support for our middle-income families. Let me elaborate briefly on each of these major directions. First, we must build deep skills and advanced capabilities. It is absolutely critical that we achieve this so that we can compete internationally and help Singaporeans do well in their Page: 24 careers, even as the world of work is transformed by new technologies. Being small, we cannot achieve expertise and advanced capabilities in every area. We have to build on the strengths we have already developed. We must also focus on areas in growing demand and where Singaporeans have the capacity to excel. We are well positioned to be amongst the leaders in Asia and globally in five growth clusters of the future. First, Advanced Manufacturing, aided by new technologies such as advanced robotics and additive manufacturing.”
“In the US, Japan, UK and much of Europe, there has been no increase in real incomes over the last decade for the median household. Even in Taiwan, where median household incomes are lower than in Singapore, real incomes today remain below where they were at the start of the previous decade. The stagnation in median incomes in all these countries has happened despite the real strengths that they have, some of which exceed our own capabilities in Singapore. Their experiences reflect both the intense global competition and the forces of technology that are challenging a growing Page: 23 range of jobs, in virtually every developed economy. Our incomes in Singapore have fortunately continued to grow in the last decade, for both middle- and lower-income households. The median household income per member has in fact increased by 36% in real terms over the decade. But we face the same global realities and challenges as these countries. We cannot change these realities. We must, therefore, stay the course in restructuring our economy, lift productivity and develop new capabilities for the future. That is the only way we can sustain income growth and meet aspirations for higher living standards in the years to come. This Budget is focused on building Singapore's future. We must reach our next frontier as an economy, with firms driven by innovation and higher incomes coming from deep skills and expertise in every job. We must ensure a society that is fair and just, where everyone has a chance to move up and do well regardless of where they start from. And we must complement a culture of personal effort and responsibility with stronger collective responsibility, especially for our elderly. To achieve this vision, the Budget takes major steps in four areas.”
“They were paid about $87 a month in 1965, which in today's dollars, adjusting for inflation, is around $340. That was slightly less than half the average wage at the time. Today, a lower-income Singaporean worker at the 20th percentile of the income ladder would earn about $1,860. That is more than five times as much as it used to be, after adjusting for inflation over the years. So, it is a more than fivefold improvement in the standard of living. Wages for some of our lowest paid jobs, like cleaners and security guards, were stagnating a decade ago, but have begun moving up in a tight labour market. Our cleaners have seen a significant increase in pay with the introduction of the tripartite Progressive Wage Model (PWM). We achieved the same transformation for middle-income Singaporeans. The median worker's pay is about six times what it used to be in 1965 after adjusting for inflation. Our nurses are an example. The pay of the average nurse has always been around the median for the workforce or slightly higher. Our registered nurses earn about $3,700 on average today. Their jobs too have changed. With greater education, nurses today do initial diagnoses and perform a range of tasks that only doctors used to do. We have caught up with many other countries that were well ahead of us. The median Singaporean worker's wage was about 60% of that in Hong Kong in the mid-1970s and less than half of that in Japan. Our median wage is now the highest among the Asian Newly Industrialised Economies or NIEs and is only about 10% lower than in Japan. [Please to Annex A-1.] However, as the experience of the developed economies shows, as average incomes rise, it becomes harder for them to go up.”
“We have moved to advanced and sophisticated products in data storage, chemicals and pharmaceuticals. Services have also emerged as a major engine of enterprise and jobs. Starting from the traditional entrepot business, we built a transhipment hub, airport and airline that are each amongst the world's leaders. Add international logistics, finance, professional services, environmental solutions and hospitality. We have made Singapore a key node in services, for Asia and the world. Our homegrown enterprises have made their names around the world. ST Aerospace, which started as a maintenance depot for the Air Force in the 1970s, has become the world's largest independent maintenance, repair and overhaul (MRO) provider. Hyflux's membrane systems have been installed in more than 1,300 plants worldwide, including desalination plants in the African continent. BreadTalk has in just 14 years grown from a single outlet at Bugis Junction to more than 700 outlets in 15 countries. It says it sells its signature "Floss" bun worldwide at a rate of one every 10 seconds. XMI, started in a living room nine years ago, is selling its X-mini pocket-sized, high sound quality speakers in over 80 countries. But at the heart of Singapore's transformation has been our people. Page: 22 Among young adults today, those from their mid-20s to mid-30s, more than 95% progress to post-Secondary education. This is more than four times as many compared to the experience of the Baby Boomers, those between their mid-50s and mid-60s. The change in just one generation has been dramatic. It enabled better jobs and much higher living standards for Singaporeans. Everyone has moved up, including poorer Singaporeans. Among the lower-income in the 1960s were the factory employees who made rubber slippers.”
“The median Singaporean worker's pay grew by a slower 1.4% in real terms in 2014. But added up over the last five years, the median worker's pay grew by a total of 11% after adjusting for inflation. Median household income per member grew faster, at 18% over the five years in real terms, because besides higher pay, more Singaporeans have jobs. Page: 21 We have set new directions for the future. As the Prime Minister stated in his New Year Message, we are making fundamental policy shifts to give Singaporeans greater assurance at each stage of life, more opportunities and a better home for all. We build on the transformation we achieved in our first 50 years as a nation. Decade by decade, we competed for our place in the world against much larger and more advanced countries and raised the quality of life for all Singaporeans. The older amongst us will remember the Swan brand socks we wore as school children – tearing off the Swan label that was pasted on each new pair of white socks. They were made in the Swan Socks factory at Jalan Tukang in Jurong, founded with Japanese investment and officially opened by Dr Goh Keng Swee in 1964. It was labour-intensive work but as Dr Goh in fact mentioned in his speech when he opened the factory, it was the first factory offering significant employment for women. The factory no longer exists. Today, the area is quite transformed. Tukang Innovation Park is home to a range of companies engaged in new technologies. It also hosts MedTech One, JTC's dedicated facility for the rapidly growing medical technology industry. I am glad that we kept the name "Tukang" because in Malay, it means "skilled worker". The story is the same in other industries.”
“Mdm Speaker, I beg to move, "That Parliament approves the financial policy of the Government for the financial year 1 April 2015 to 31 March 2016." Our Budget for FY2014 is expected to record a slightly smaller deficit than what we had estimated a year earlier. We had budgeted for an overall deficit of $1.2 billion or 0.3% of GDP. We now expect a very small deficit of $0.1 billion, close to a balanced position. MTI expects Singapore's GDP growth in 2015 to be between 2% and 4%. This is not different from the 2.9% growth last year. The global outlook for 2015 is uncertain. The US continues to recover. But Europe's growth remains weak and the Eurozone is facing new uncertainties. Emerging Asia, including our own region, is seeing the effects of a slowdown in China. The current global environment is not, however, just a temporary challenge. We may see prolonged sluggish growth in the advanced world as well as continued consolidation in China's growth as it reforms and rebalances its economy. We should not count on significantly stronger global demand over the medium term. Consumer Price Index (CPI) inflation fell to 1% in 2014 largely due to the fall in Certificate of Entitlement (COE) prices and the correction in the property market which has reduced imputed rentals. Food prices have been rising, especially raw foods imported from the region. However, we expect overall inflation to be close to zero in 2015. Our labour market remains close to full employment. The unemployment rate for citizens remained low at 2.9% in 2014. The tight labour market has also led to further increases in labour force participation rates, with more women working and more older workers staying on in employment. Incomes have continued to rise, outpacing inflation.”
“Yes, Madam. I had already voted "yes". Page: 80 Page: 81”
“The Government adopts a multi-pronged approach to promote productivity and innovation. It includes both broad-based and targeted initiatives designed to complement one another in supporting industries and businesses. As productivity is shaped by many factors, including demand for a firm's products or the cyclical conditions it faces, it is difficult to attribute productivity changes to specific schemes. We are also mindful of the fact that the business transformations that underpin productivity growth are a medium to long-term endeavour. It is, hence, best to assess results of a firm's efforts – be they an investment in equipment, software or intellectual property or improvement in employee engagement and work processes – over a sustained period. Nevertheless, the take-up rates of various schemes are an indication of their relevance to businesses. Both the PIC and ICV schemes that Assoc Prof Tan asked about have been well-received. Fifty-four thousand or 46% of active companies filed claims under the PIC scheme in the Year of Assessment (YA) 20141, up from 36,000 or 33% in the YA 2011 when the scheme was introduced. As for the ICV scheme, about 13,000 SMEs have benefited since the scheme was launched in June 2012. Assoc Prof Tan also asked for the number and value of applications of the six qualifying activities under the PIC scheme. Based on corporate income tax returns for YA 2014, the 54,000 companies which filed PIC claims made more than 75,000 claims on the six qualifying activities in total2. The highest number of claims is for automation equipment, followed by training. Please refer to the table below for the proportion of claims and the expenditures incurred on the six activities for YA 2014. Page: 115”
“The Government provides support and a range of benefits to families for the care of children at different stages of a child’s development in areas, such as childcare, healthcare and education. A number of these benefits are provided, regardless of their parents’ marital status and extend to single mothers. These include centre-based infant and childcare subsidies, MediSave grants for newborns and MediShield coverage for congenital and neonatal conditions. The Working Mother’s Child Relief and the Foreign Maid Levy Relief which Mr Seah asked about are intended to support married women who remain in the workforce and raise their children within the context of marriage. They reflect the prevailing societal norm where marriage is the first step towards family formation. The tax savings arising from both reliefs would depend on the individual circumstances of the taxpayer. As single parents currently do not claim for these tax reliefs, we do not have sufficient data, such as whether they have children who are studying full-time and their incomes if the children are working, to accurately estimate the tax savings arising from the reliefs.”
“These measures have and will aim to keep the public sector workforce lean and manpower expenditure low.”
“The Government has consistently strived to maintain a lean and efficient Public Service. As at end 2014, the total staff strength of the Singapore Public Service, which includes Ministries and Statutory Boards, was estimated at about Page: 137 143,0003, or about 4% of our labour force4. This is a lower ratio than in most other countries, such as Australia (16%), Germany (11%), Switzerland (10%) and South Korea (7%)5. More manpower and new units may be needed from time to time to implement new programmes or deliver enhanced services. The Government’s approach is to ensure that the manpower requirements are rightly-sized and to redeploy staff from existing functions wherever possible. This has helped to prevent over-expansion of public sector manpower over time. In the past 10 years, the public sector workforce grew at an annual rate of about 2.5%6, which is lower than Singapore’s labour force growth of 4.1% per annum over the same period. We expect the growth of public sector employment to be maintained at roughly this pace over the next few years. This is because agencies need additional capacity to implement the new strategic programmes, such as in healthcare services and security. It will also provide for enhancements in areas, such as service delivery. The setting up of MSO is one example of how we will make public services more citizen-centric. The public sector continues to improve its efficiency and productivity, such as through greater use of IT and automation and upskilling of public officers. Over the longer term, we also have in place a Manpower Management Framework to keep public sector manpower growth at a sustainable rate in line with resident labour force growth.”
“The Supplementary Retirement Scheme, or SRS in short, is a voluntary retirement savings scheme that complements the CPF. Under the scheme, participants enjoy tax relief on SRS contributions. Only 50% of SRS withdrawals are taxed, as long as they are made any time after the statutory retirement age of 62. As a retirement savings scheme, withdrawals prior to retirement are not encouraged. However, to provide flexibility to SRS participants, premature withdrawals are allowed but fully subject to tax. Even so, a person would still benefit from tax savings if his marginal tax rate is lower at the time he withdraws the savings, compared to when he earned the money and put it in his SRS account. Hence, a 5% penalty is imposed as a deterrent against using the SRS as a tool to lower one’s income tax, as distinct from building up retirement savings. However, we recognise there could be circumstances where participants may need to exit the scheme prematurely. Current SRS rules already provide for penalty-free withdrawals under certain circumstances, such as on medical grounds1 or bankruptcy.”
“The Prime Minister announced the Silver Support Scheme at the National Day Rally 2014. The scheme is intended to supplement the retirement savings of the needy elderly, to help them cope with their living expenses. It is similar to how we supplement the wages of lower wage workers with the Workfare Income Supplement. Page: 156 The poor elderly would typically not have accumulated enough CPF during their working lives. Those who had not bought a flat and who do not have enough family support would be more vulnerable. As this is a scheme for the long term and must be sustainable, we are studying carefully the criteria to be used in determining which group of elderly Singaporeans should be eligible. We will share the details of the Silver Support Scheme at Budget 2015.”
“Singapore's continued success as a financial hub depends on maintaining our reputation as a trusted and responsible financial centre. This means adhering to international standards, including AEOI, that enable us to strengthen our framework for international cooperation to combat cross-border financial crime.”
“More than 90 jurisdictions, including major financial centres, such as Switzerland and Hong Kong, have endorsed the Standard and indicated target implementation timelines of either 2017 or 2018. Singapore has a zero-tolerance policy on illicit funds and is fully committed to implementing relevant international standards to ensure that such funds have no place in our financial system. In line with this policy, we have decided to implement the OECD AEOI Standard by 2018, with the following conditions. First, there must be a level playing field among all major financial centres, including Hong Kong, Dubai, Switzerland and Luxembourg, to minimise regulatory arbitrage. Second, we will only engage in AEOI with jurisdictions that have a strong rule of law and can ensure the confidentiality of information exchanged and prevent its unauthorised use. This is particularly important as AEOI entails the transmission of sensitive taxpayer information which should be safeguarded. Third, there must be reciprocity with any future AEOI partners in terms of information exchanged. These conditions are necessary to make sure that we continue to respect legitimate expectations for taxpayer confidentiality, as well as ensure that AEOI is effective in tackling offshore tax evasion. It should also not result in fund flows to less-regulated jurisdictions. We are mindful that implementing the OECD AEOI Standard will impose costs on our financial institutions and Government agencies. Financial institutions may need to institute new procedures for customer due diligence and set up systems to comply with new reporting requirements. The Government will work closely with the financial industry to address issues Page: 142 that may arise as we work towards implementing the new AEOI Standard by 2018.”
“The hon Member Mr Yee has asked for the Government's position on the OECD Standard for Automatic Exchange of Information and its impact on Singapore's financial institutions and other organisations. I will provide some background on the Standard for the benefit of Members who may not be familiar with this matter. Automatic Exchange of Information, or AEOI in short, refers to the regular exchange of information between jurisdictions for tax purposes, with the objective of detecting and deterring tax evasion by taxpayers through the use of offshore bank accounts. The information covered is of a pre-defined scope and typically pertains to information relating to accounts maintained by taxpayers in financial institutions located in a jurisdiction outside of their own. There is a growing international move towards the use of AEOI in tackling offshore tax evasion. Last year, we amended the Income Tax Act to allow Singapore to exchange information with the US in order to help our financial institutions comply with the Foreign Page: 141 Account Tax Compliance Act (FATCA). In effect, FATCA is a form of AEOI as the IRAS will exchange agreed items of information obtained from our financial institutions with the US Internal Revenue Service. In 2013, the Group of 20 (G20) major economies asked the OECD to develop a single global standard to simplify the implementation of AEOI between jurisdictions. The Standard, modelled closely after the US FATCA, is expected to be endorsed by the G20 leaders later this month at the G20 Leaders’ Summit. The Global Forum on Transparency and Exchange of Information for Tax Purposes, of which Singapore is a member, has endorsed AEOI as a global standard and asked all members to commit to a timeline of 2018 or earlier for implementation.”
“Of these, 13 were extended from July 2013 and already pay their cleaners according to PWM. Another 15 will expire this year and the new replacement contracts will also be PWM-compliant. Only four of the extended contracts will end after 1 September 2015, which is the deadline after which even ongoing contracts will be legally required to pay their workers according to the PWM. In total, there are 15 public sector cleaning contracts, or less than 10% of all Government cleaning contracts, called before 1 April 2013 that will continue beyond 1 September 2015. We recognise that the tender prices for these contracts may have been locked in before compliance with PWM was made a requirement. The Government will be working with contractors to help them transit to the new legislated requirements by 1 September 2015. If necessary, the Government is prepared to accede to requests by existing service providers to terminate the contract, to pave the way for a new tender to be called. This will allow contractors to put in tender prices that take into account the higher wages Page: 144 payable to cleaners under the PWM.”
“In support of efforts to uplift the wages of low-wage workers in the cleaning industry, the public sector took the lead since over a year ago to procure cleaning services only from contractors that pay their workers according to the Progressive Wage Model (PWM). Since 1 April 2013, the Government has made it mandatory that all new public sector cleaning contracts will only be awarded to cleaning contractors accredited with NEA's Enhanced Accreditation Scheme (EAS) and paying their workers according to PWM. The Government has, therefore, been supporting efforts to pay cleaners according to PWM, ahead of the timeline of the new licensing requirements for the cleaning sector that took effect from 1 April this year. Out of the over 200 public sector cleaning contracts currently in force, more than half were called after 1 April 2013 and, hence, are fully compliant with PWM requirements. In addition, the Government has also proactively worked with contractors who hold contracts called before 1 April 2013 to obtain accreditation and to pay their workers higher wages according to the PWM. Since July 2013, Government agencies have also been required to ascertain that the incumbent contractor is accredited under the EAS and is paying their workers’ wages according to the PWM, before agreeing to extend an existing contract. As a result, over 6,200 resident cleaners servicing Government contracts are already being paid according to PWM. This is more than 80% of the resident cleaners servicing Government contracts. Mr Zainal Sapari asked about the number of agencies that exercised the option to extend their cleaning contracts that were signed before 1 April 2014. Thirty-two contracts signed before 1 April 2014, under 18 public agencies, have been extended.”
“The Government also provides subsidies of up to 80% for Intermediate and Long-Term Care (ILTC) services and has Page: 138 expanded the use of the Seniors' Mobility and Enabling Fund to provide greater support for low- to middle-income elderly receiving home nursing care services. Elderly Singaporeans who are unable to pay for healthcare can rely on additional assistance through MediFund Silver.”
“As part of the Pioneer Generation Package, pioneers will receive annual Medisave top-ups of $200 to $8004 for life. The top-up amount for each pioneer is based on his or her year of birth, with a higher amount for earlier cohorts of pioneers. The Pioneer Generation Medisave top-ups are structured this way, so as to provide extra benefit to earlier cohorts of Pioneers. The older Pioneers did not benefit as much from major enhancements in CPF and healthcare policies, such as Medisave (implemented in 1984), MediShield (1990) and the extra interest paid on lower CPF balances (2008). Hence, older Pioneers typically have less Medisave savings compared to younger cohorts. Secondly, while younger Pioneers receive lower Pioneer Generation Medisave top-ups, they are also likely to receive the top-ups over a longer period of time. While the Medisave top-ups under the Pioneer Generation Package are based on the year of birth, the MediShield Life premium subsidy rate will increase as one gets older. This is because Medishield Life premiums for the population increase with age. The special subsidies for our Pioneers will ensure that the MediShield Life premiums continue to be affordable for pioneers as they age. The Pioneer Generation Package also provides the same level of outpatient subsidies to all pioneers regardless of age. As Members are aware, the Pioneer Generation Package is given on top of the help that the Government provides for elderly Singaporeans through various other schemes. For instance, eligible elderly Singaporeans can benefit from GST Voucher and Medisave top-ups of $150 to $450 annually, with older Singaporeans receiving more.”
“The Panel meets regularly to make a decision on appeals. Page: 116”
“Since the Appeals Panel was set up in April this year, it has carefully considered the criteria for assessing appeals. For citizenship-related appeals, the Panel has been considering each case on its own merits, taking into account all relevant factors. These factors include whether the appellant had been in Singapore in the early years of independence, had contributed to society and demonstrated clear efforts to sink roots in Singapore and had obtained Singapore citizenship shortly after the 1986 cut-off date. On age-related appeals, the Panel noted that the Government has already adopted a more inclusive approach by extending the Pioneer Generation Package to all those born in 1949 or earlier. Having deliberated on the matter extensively, the Panel recognised that for any age criterion, there will be those who marginally fall short of the criteria. It hence decided that it was not feasible or fair to allow age-related appeals without extending the new age criterion to all Singaporeans. The Panel also took into account the range of healthcare benefits that all older Singaporeans will enjoy, such as MediShield Life premium subsidies and Long Term Care subsidies. In particular, Singaporeans aged 55 and above who are not members of the Pioneer Generation will also enjoy additional Medisave top-ups for the next five years. For these reasons, the Panel has decided it could not accede to appeals on the basis that the appellants' birth dates marginally missed the eligibility date. The Member also asked about the procedures put in place for appeal cases. The Panel, which is supported by a secretariat, verifies and reviews the supporting information and documents for each case and contacts appellants for further verification if necessary.”
“In addition, it plans to expand the Technical Advisory Panel of independent experts, comprising academics in science and technology, as well as industry representatives, to provide stronger support in complex R&D cases. We will continue to review the administration of the PIC scheme and welcome suggestions that will help us to improve the claims process.”
“Under PIC, businesses that have incurred R&D expenses can claim enhanced deductions against their income taxes or apply for a cash Page: 87 payout. IRAS currently processes three out of four such applications for cash payouts within three months. More than 90% of applications are processed within six months. The R&D expenditure incurred by businesses that claimed PIC enhanced deductions varied widely and averaged $450,000 among SMEs. Such claims are processed as part of normal tax returns. While this reduces additional paperwork for most claimants as they need not submit a separate PIC claim, complex claims will still take more time to review. Additional time is also taken when businesses do not provide all the necessary information to substantiate their claims. MOF and IRAS have consulted tax professionals and industry representatives on how we can provide more helpful guidance to businesses making PIC claims on R&D. We will be releasing later this month a revised e-tax guide which will provide more clarifications on the R&D qualifying criteria, explain the review process for R&D claims, and highlight the documentation that companies can use to substantiate their claims. The revised guide should help businesses with their R&D claims and reduce the need for IRAS to go back to the business to request for additional information. To further help smaller businesses, IRAS will publish a simplified set of guidelines on its website and work with them to identify alternative ways of supporting their R&D claims. IRAS will also provide more examples of qualifying industry-specific R&D activities starting with the Information, Communications and Technology (ICT) sector and the Food & Beverage (F&B) industry. These examples will be published by the end of the year.”
“There is, on average, one cash withdrawal point – either branch or ATM – per 1,500 residents and one cash deposit point – either branch or cash deposit machine – per 5,600 residents. MAS remains committed to working with the banks to ensure that they continue to consider residents' basic banking needs in deploying customer touchpoints. Where necessary and to address specific circumstances, MAS will engage relevant stakeholders to explore other commercially viable channels to facilitate access to basic cash services and to promote awareness of additional touchpoints.”
“The Monetary Authority of Singapore (MAS) monitors the availability of basic banking services, such as automated teller machines (ATMs) and cash deposit machines. The aim is to ensure adequate access to such services while considering the cost and operational constraints faced by banks. Currently, there are 345 retail bank branches and more than 2,050 off-site ATMs and 300 off-site cash deposit machines located across Singapore. Many of the ATMs and cash deposit machines are sited at high density locations like MRT stations, bus interchanges, Page: 120 neighbourhood town centres and food centres. There has also been an increase in the number of ATMs located at petrol service stations to provide greater convenience to motorists and nearby residents. In addition, banks are actively introducing new channels to widen their reach beyond their existing branch and ATM networks. Besides online and mobile banking options, there are more convenient touchpoints within housing estates. For example, DBS/POSB has partnered SingPost to offer basic banking services, including cash deposits and withdrawals, at more than 55 SingPost outlets. DBS/POSB, OCBC and HSBC have also partnered retail merchants, such as 7-Eleven, NTUC FairPrice and Cold Storage, to allow customers to withdraw cash at their payment counters. As a result of these initiatives, there are now more than 3,500 touchpoints around Singapore providing basic cash services, compared to fewer than 2,000 bank branches and ATMs 10 years ago. The number of customer touchpoints available in Singapore is broadly consistent with the Member's suggested threshold of a service point per 5,000 residents.”
“Since the new rules kicked in, the percentage of quotations receiving single bids has decreased to about 4% in 2013 from 15% in 2012. The Auditor-General has also noted in his report the steps taken by public sector entities to improve the procurement process and to strengthen staff training in procurement. To reinforce the importance of good internal controls across the Civil Service and Statutory Boards, MOF earlier this year instituted a new requirement for all agencies to report their internal control measures, including key internal and external audit findings, as well as follow-up actions. In addition, agencies were provided with new data analytical tools to improve their oversight of financial transactions. In summary, we have a system of governance that is working well and continues to be strengthened through new or updated rules and requirements. As is the case in any large organisation with a high number of transactions, it is not possible to achieve zero lapses. The Government relies on audits that are regularly and properly carried out to identify shortcomings and areas for improvement while heads of agencies have clear responsibilities to see through follow-up actions. Members and the public can be reassured that the Auditor-General's findings, in this and previous years, are carefully reviewed and acted upon.”
“Nonetheless, we take each report of a lapse seriously and seek opportunities for improvement. In its report this year, the Auditor-General highlighted several areas for further improvement, including the administration of grants, Government schemes and programmes; management of land and assets; and Government procurement. Let me share some examples of the follow-up actions in each of these areas. In the administration of schemes and programmes, NEA had omitted to follow up on some hawker stalls that violated tenancy conditions, resulting in inconsistent enforcement of rules. Apart from reviewing its procedures, the NEA will enhance its Hawker Centres Management System to have more robust tracking of adherence to tenancy conditions. Monthly reports will also be generated and reviewed by staff in charge of supervising the hawker centre inspectors to ensure that possible breaches are promptly investigated and acted upon. In the management of land and assets, AGO identified cases of under-utilisation of buildings and facilities in AVA. AVA has since reviewed its requirements for buildings and facilities and is working with SLA to put the under-utilised assets to better use. With respect to the procurement related lapses identified in the Auditor-General's latest report, I should point out that the majority concerned transactions which took place in or before 2011. Members will recall that we have in recent years taken major steps to Page: 103 strengthen public sector procurement rules and capabilities. Among other improvements, we had, in 2012, extended the minimum opening period for suppliers to submit bids for quotations from four working days to seven, and introduced further checks to ensure that single bids offered competitive terms.”
“The Auditor-General's Office (AGO) conducts annual checks of Ministries with regard to financial statements, as well as internal controls and processes that directly impact on the financial statements. On a less regular basis, AGO also selectively audits other aspects of internal controls in the Ministries, either based on its assessment of risks or arising from public feedback. Statutory Boards are required to be Page: 102 audited annually by internal and private external auditors. In addition, AGO conducts audits of internal controls of nearly all statutory boards at least once every five years. AGO is an independent body under the Constitution. Together with the internal and external auditors of our agencies, they provide critical checks in our system of governance. All lapses highlighted by AGO are reviewed by the top management of the respective agencies. This includes the Permanent Secretary, Chief Executive or head of agency who is held responsible for ensuring that appropriate follow-up actions are taken to rectify the lapses. These officers must also assess if the lapses are indicative of systemic risks in their agencies and put in place measures to minimise recurrences. Where appropriate, disciplinary actions must be taken against those responsible, including supervisors. Any suggestion of corruption or fraud is investigated promptly and thoroughly and the officer faces the full measure of the law, regardless of who he is. These long-standing practices, together with regular reviews of rules and procedures, have helped to ensure that we have a system of governance and that is, on the whole, working well. Singapore is thus widely recognised internationally as having one of the cleanest and most efficient systems of government anywhere.”