Speeches

A1. Mr Chairman, I thank Members for their questions and suggestions. 

A2. The points made cover three key themes:

a. First, enhancing our pro-enterprise environment. I will cover how MOF agencies are simplifying rules for businesses. SPS Shawn Huang will address improving the experience of transacting with the Government and making government procurement more accessible. 

b. Second, ensuring responsible, effective and efficient use of our public resources. I will speak on this. 

c. Third, preparing for Singapore to meet intensifying long-term challenges, particularly climate change, and strengthening our social compact for a caring and inclusive society. Minister Indranee will cover these.

B1. Mr Chairman, Mr Liang Eng Hwa asked what MOF agencies are doing to simplify rules for a more pro-business environment.   

B2. Rules and regulations exist for several reasons – from safeguarding people, property and the environment, to ensuring good governance and accountability. The Government has to strike a balance between these important objectives, and the need to encourage enterprise and innovation. Therefore, Singapore’s approach has been to enact practical rules and review them regularly to streamline and remove outdated ones.

B3. The Inter-Ministerial Committee for Pro-Enterprise Rules Review, led by DPM Gan, was formed in April 2024 to further enhance regulatory efficiency and reduce compliance costs for businesses. 

B4. Let me share some examples of what MOF agencies are doing to support this important area of work.

B5. First, IRAS will extend the grace period for businesses to begin charging GST, from one month to two months.

a. Currently, businesses expecting to cross the $1 million taxable turnover threshold within the next 12 months must register for and start charging GST within a month of forecast. This timeline can be tight for some SMEs.

b. The change will give SMEs more time to prepare.  It will take effect from 1 July 2025, and benefit 1,500 businesses every year. 

B6. Second, IRAS will progressively expand the requirement for intermediaries to pre-fill income information on behalf of self-employed persons, or SEPs for short. 

a. About 87% of individual taxpayers today benefit from pre-filled income information by their employers and intermediaries for their income tax filing. However, many SEPs do not enjoy this convenience. 

b. The intermediaries that engage the services of SEPs already have the income information of the SEPs, and are in a good position to provide this. It is more efficient for them to do so, than to have the individual SEPs fill in the information in their respective tax returns. 

c. We started by requiring commission-paying intermediaries, such as real estate agencies and insurance providers, to submit income information for their agents and this has benefitted over 100,000 self-employed commission agents. 

d. IRAS plans to bring more intermediaries on board, and has been encouraging and engaging private hire car and taxi operators, as well as the delivery platforms. I urge these intermediaries to come on board as soon as possible. 

B7. We have also been simplifying rules where we can. 

a. One example is the Fixed Expense Deduction Ratio, or FEDR, which allows qualifying businesses the option of claiming their tax deductions for business expenses based on a prescribed percentage of their gross income earned. This is simpler and more convenient compared to using actual allowable business expenses. 

b. The FEDR was first introduced in Year of Assessment 2019 for private-hire car and taxi drivers, and subsequently extended to commission agents and delivery workers. The utilisation has been high, which shows that this is a good option for many of our workers. 

c. We will be consulting stakeholders on how the FEDR can be expanded to support more small businesses and self-employed persons.  

B8. We are reducing and removing regulations where possible. 

a. IRAS will drop the requirement for second-hand goods dealers to seek approval before using the GST Gross Margin Scheme. 

b. The scheme allows second-hand goods dealers to charge GST on the gross margin of the sale, rather than the full sale price. This is because GST is often priced into the base cost from earlier transactions.

c. As most dealers are generally compliant with the scheme’s requirements, IRAS will remove the need for them to obtain approval, starting from 1 July this year. 

d. This will streamline the compliance process, particularly for new or smaller second-hand goods dealers.

B9. Sir, ACRA is also actively streamlining processes for companies. 

a. There is a requirement today for companies to disclose their directors’ interest in shares or debentures in the director’s statement. 

b. Over the years, ACRA has received an increasing number of requests from companies to be exempted from this requirement. In cases where all the company shareholders agree, ACRA will grant these exemption requests.

c. ACRA has recently streamlined this process such that non-listed companies do not need to seek exemption, as long as consent from all shareholders is sought. This will reduce administrative burden and save companies $200 in application fees and we expect around 1,500 companies to benefit every year.

d. Information of the company’s shareholding will remain publicly accessible and this maintains corporate transparency.

B10. These are part of the ongoing efforts to improve our rules and processes. In the interest of time, I am not able to share the full range but this is an ongoing work. We will continue to engage businesses, and also our frontline officers, our colleagues, and solicit their ideas to jointly improve our regulatory landscape.

  

B11. This approach is also in line with the spirit of Forward Singapore. It reinforces in our agencies the importance of working with citizens and businesses, while taking on board their feedback to continually improve our policies, rules and processes.

C1. Our government spending over this term has delivered good outcomes for Singapore as detailed in the biennial Singapore Public Sector Outcomes Review Reports. 

C2. We are continually looking at how we can transform and improve the way we operate. 

C3. Mr Saktiandi Supaat asked about resource reviews and improving budget efficiency. Our budgeting framework is designed with efficiency in mind: 

a. We regularly review the block budgets for Ministries. 

b. MOF also applies controls to spending and manpower growth to drive agency transformation and yield savings, which are returned to MOF for central reallocation towards emerging priorities. 

C4. I agree with Mr Saktiandi that it is important to have strong collaboration and coordination across Ministries. MOF actively encourages coordinated service delivery, where there are synergies. 

a. For example, we saved $2 billion and 44 hectares of land with the 4-in-1 East Coast Integrated Depot, which combines three MRT depots and one bus depot. 

b. The ServiceSG Centres are another example. They offer residents one-stop access to about 600 government services from over 25 agencies. Citizen satisfaction across ServiceSG Centres was consistently above 90 percent for the last three years.

C5. Resourcing levers can be used to drive transformation on a whole-of-Government basis. We use joint budgets for issues that straddle multiple agencies, to streamline efforts, check against resource duplication, and enhance accountability for shared outcomes. 

C6. We also created the WOG Public Service Transformation Budget in 2022. This provides agencies seed funding to pilot innovative and transformative ideas, if the proposals involve inter-agency collaboration.

C7. I thank Mr Edward Chia for his suggestion on tracking the time taken from policy ideation to implementation. Sir, the timelines vary across projects, depending on factors such as their complexity and the resources required. We will continue to deliver our projects in an efficient and cost-effective manner. 

C8. We regularly review our internal processes to improve efficiencies. For instance, we shortened the Gateway evaluation for large development projects to speed up the approval process. Mr Liang highlighted the need to continually enhance effectiveness and governance. This is supported by programme evaluation, which helps us to understand whether a programme is achieving its objectives, and whether improvements are needed.  

C9. I want to be quite clear that these are processes that we have in place, and these are efforts that we will continue to improve. But as PM reminds us, it does not mean that we are perfect today. There is room for improvement and we will work hard to make those continuous improvements. This is something we will continue to do.

C10. Mr Louis Chua asked about the concession for hotel and F&B establishments that impose a service charge to display GST-exclusive prices.

a. This concession was granted in 1994, based on industry feedback that it would be costly and operationally challenging to maintain and display separate price lists for take-away items and dine-in items as service charge would be imposed only on the latter. 

b. The concession is to help reduce business costs. But clarity for consumers is also important, and businesses that rely on this concession must display a prominent statement informing consumers that prices shown are subject to service charge and GST.

c. This practice has now been in place for three decades and we last reviewed it in 2022. I do not think most consumers would be confused, as Mr Chua claimed. Conversely, removing the concession may lead to more confusion, and also increase costs for businesses as they would now need to print multiple sets of menus and price lists.

C11. Ms He Ting Ru asked about the Progressive Wage Credit Scheme  (or PWCS). This is a scheme that we have put in place. It is currently due to cease in 2026. We will review closer to the date, whether to continue or to stop, bearing in mind the economic conditions at that time, because we are in a more uncertain global environment. 

C12. The PWCS is not a broad-based subsidy for all companies. To get PWCS, the employer has to pay their lower-wage workers a wage increase, then they can qualify for co-funding from the Government. 

C13. So the purpose is for the Government to co-fund and share some of the costs of helping our lower-wage workers to earn a higher income.  Because we want employers to pay the lower-wage workers a higher salary, we share with employers part of this cost of paying the lower-wage workers a higher salary. This is an important part of our social compact, which I think Ms He will agree with. 

C14. I do not think Ms He is suggesting that we should stop providing support for employers, especially our SMEs.  This is not in lieu of other schemes we have in place to improve productivity. In fact, this is something that we put in place specifically to help employers to be able to share some of the costs where they are paying their lower-wage workers a higher salary. 

C15. On productivity, we have many other schemes that we will continue to work, through our Trade Association Chambers, industry associations, companies, as well as the labour movement, through the Company Training Committees (CTCs), to help companies to improve productivity. Because I agree with Ms He that for the wage increases to be sustainable, it must go together with productivity improvements. 

I just make an observation here that what Ms He is saying seems to be a little bit different from what Associate Professor Jamus Lim said during the Budget debate. If I heard him correctly, he suggested that wage increases can happen with or without productivity improvements. But I agree with Ms He’s point that the two over time need to move in tandem. That is more sustainable. 

C16. Chairman, Mr Liang spoke about responsible management of our fiscal resources and reserves. Mr Saktiandi asked how the Government ensures fiscal prudence and responsibility. 

C17. Sir, as PM  mentioned, our current fiscal position is healthy. We have spent within our means and planned ahead for structural spending needs, like rising healthcare expenditure and climate adaptation. 

a. This allows the Government to follow through on our commitments, without borrowing or using more of our reserves for immediate needs and recurrent spending. 

b. This fiscal discipline of maintaining a balanced budget has worked well for Singapore, and we must strive to sustain this.  

C18. Our reserves, which have been carefully managed over generations, are another source of strength and national resilience, especially during a crisis. 

a. During the Global Financial Crisis and COVID-19 pandemic, our reserves protected Singaporeans and placed us in a better position than many other countries. We were able to use our reserves for public health, social and economic support measures that saved lives and livelihoods, and enabled Singapore to bounce back and emerge stronger. 

b. Our Past Reserves also generate a sustainable and steady stream of income that goes into our budget every year. The Net Investment Returns Contribution now accounts for about a fifth of annual government revenue.

C19. Mr Louis Chua spoke about the importance of transparency, accountability and governance of our investment entities.  

C20. Sir, we have discussed and explained this many times. There are structures and processes in place to ensure that our investment entities, GIC and Temasek, are good stewards of our reserves for the benefit of all Singaporeans. 

C21. On governance, the Government ensures that each entity has a competent Board in place to oversee its Management. The Government holds the Board accountable for instilling good corporate governance and achieving good long-term returns according to its mandate. 

C22. At the same time, the Government does not direct or influence the investment decisions of our investment entities. This segregation of roles allows our investment entities to invest professionally with a long-term orientation. That is why during the MAS COS earlier, Mr Chua also acknowledged that it would not be a good idea for the Government to require GIC to invest part of its portfolio in the local equities market.

C23. On transparency, we have put out a lot of information on our reserves. Temasek’s net portfolio value and MAS’ official foreign reserves are public information. All our entities publish information on their portfolio returns. We have also published information on our reserves management framework and governance on the MOF website. 

C24. It is only the size of GIC's assets under management that remains undisclosed, as this would reveal the size of our reserves. We have explained this many times. And just as our defence forces do not reveal the full extent of our military capabilities, it is not in Singapore's national interest to disclose the full size of our reserves. 

C25. On performance, the Government does not look at one single parameter. Neither do we focus only on short-term performance. Instead, we assess our entities based on their mandates and performance over the long term, and consider factors such as diversification of portfolio and risk-adjusted returns, which measure investment returns relative to the risk taken. 

C26. Our investment entities have performed creditably over the long term. Given the increase in market volatility in recent years, some variation from market indices is to be expected. What is key is that our entities continue to navigate the uncertainty while maintaining a disciplined, long-term approach to generating sustainable returns.