FY2025 MOF Committee of Supply Debate Speech by Senior Parliamentary Secretary for Finance Mr Shawn Huang

A. INTRODUCTION

A1. Mr Chairman, I will address Members’ questions and suggestions on government procurement and how we can improve the experience of transacting with the Government.  

B. MAKING PROCUREMENT OPPORTUNITIES MORE ACCESSIBLE FOR BUSINESSES

B1. First, on procurement. Let me start by articulating our key procurement principles.

a. Our procurement rules are designed to uphold open and fair competition, achieve value for money, and manage project risks.

b. But we need to take care that these do not result in heavy compliance costs for our businesses. 

B2. Improving access to government procurement is a win-win for Government and businesses. The Government benefits from the competition fostered by a wider supplier pool, while more businesses can leverage government contracts to build track records. 

B3. Ms Jean See asked the Government to consider using government procurement to strengthen the employability of our freelance creatives. 

B4. We understand the challenges of keeping up with technological trends and evolving demands, in particular, for freelancers who do not benefit from training typically provided by employers to employees.

B5. When assessing value for money in procurement, the Government looks for optimal balance between benefits and costs.

a. Benefits can include the achievement of economic, social and environmental objectives. We do take into consideration important social objectives. For example, we require our suppliers to comply with the Progressive Wage Model where applicable. 

b. However, government procurement requirements must also be non-discriminatory and fair to all businesses, in line with our international trade obligations.

B6. Ms See’s objectives to strengthen the employability of freelancers is important and they can be addressed through resources and programmes that the Government has put in place. 

a. These include the substantial support that we provide to all Singaporeans for their training needs, such as the SkillsFuture Career Transition Programme and the SkillsFuture Level-Up Programme, which PM covered in his Budget Speech. 

b. Workforce Singapore (WSG) and SkillsFuture Singapore (SSG) also provide a range of resources to help individuals with their training decisions. For example, the SkillsFuture Jobs-Skills Insights publications are useful references for individuals, including freelancers, seeking to reskill or upskill. 

B7. Creatives in the arts sector can also look to NAC’s Capability Development Grant. This grant can support up to 90% of the training activity or programme costs for Self Employed Persons (SEPs). NAC’s Arts Resource Hub also provides resources, spaces, and networking opportunities for SEPs in the arts sector. These include mentorships and career guidance to help SEPs in their professional career development, as well as resources that can help SEPs with relevant business and legal knowledge.

B8. In support of entrepreneurial efforts, we will continue to make government procurement opportunities more accessible to our businesses, including small businesses. This year, MOF will introduce two additional initiatives: 

a. First, we will expand Tender Lite, an initiative first rolled out in April 2024 to streamline procurement conditions. 

b. Second, we will make it easier for businesses participating in tenders that require innovative solutions, to progress from pilot to deployment at scale. We will introduce a new initiative, Innovative Procurement Partnership. Let me touch on each in turn.

TENDER LITE

B9. Mr Liang Eng Hwa, Ms Jessica Tan and Mr Edward Chia talked about making it easier for smaller businesses to access government procurement opportunities. Ms Tan asked for an update on Tender Lite’s effectiveness, and whether the Government would consider expanding Tender Lite to other sectors.

B10. Tender Lite has simplified the procurement of general goods and services and cover tenders up to $1 million. 

a. As of 1 January 2025, more than 700 Tender Lite opportunities have been published on GeBIZ. Of these, more than 400 have been awarded. About 85% were awarded to SMEs.

b. Tender Lite has been well received. About 90% of businesses who responded to our survey provided feedback that the simpler conditions of contract in Tender Lite made participation in government tenders easier.

B11. MOF has been working closely with industry stakeholders. These include the Singapore Business Federation (SBF), the Association of Small and Medium Enterprises (ASME), and sector-specific Trade Associations, to further develop Tender Lite. We will be expanding Tender Lite to construction and ICT contracts, which will benefit businesses in these sectors.

B12. Tender Lite for construction contracts will be launched in May 2025.  It will benefit construction businesses: 

a. First, by reducing administrative processes. We will be simplifying the conditions for closing of accounts or conclusion of projects.

b. Second, we will share risks with businesses. We will cap the liquidated damages at 10% of contract value and remove the need for security deposits. We will also remove or shorten the Defects Liability Period where possible.

c. These changes will help to ease contractors’ cashflow.

B13. Tender Lite for ICT contracts will be implemented in phases from the second half of this year. Consultations with industry are ongoing, and details will be published in due course. 

INNOVATIVE PROCUREMENT PARTNERSHIP

B14. Next, let me touch on the new Innovative Procurement Partnership.

B15. Mr Liang, Ms Tan, Mr Chia and Ms Mariam Jaafar asked if the Government could make it easier for start-ups and businesses with innovative solutions. They highlighted that heavy administrative burdens and the expectations of having a track record might hamper their access to government procurement opportunities. 

B16. Today, many agencies require businesses to demonstrate track record and financial capacity so that only businesses able to deliver the projects are selected. This helps to ensure reliability, especially for goods, services and infrastructure used by the public. 

a. This consideration remains relevant. But it can be challenging if the proposed solution is new to the market – especially a new technology or product. And more so if the business is a start-up.

b. Further, the pilot phase and the deployment phase are typically structured as separate tenders today. A business that wins the tender for the pilot phase has no certainty that it will get to deploy its solution at scale with the Government, even if the pilot was successful.

B17. To address these concerns, MOF will introduce the Innovative Procurement Partnership. 

a. This initiative will enable the Government to award contracts covering both pilot and subsequent deployment of innovative solutions which are new to the market. This means that businesses can be assured the opportunity to scale up its innovative product or service, if the pilot is successful.

b. More details will be provided in the second half of this year. 

PROMPT PAYMENT

B18. Last year, we said that the Government would improve the promptness of payments to vendors.

a. Mr Liang asked what measures the Government is taking. We have worked with SBF and ASME to survey businesses to better understand the current process gaps. Feedback from businesses surveyed was generally positive.

b. Today, almost all the invoices billed to government agencies adopt 30 days or shorter credit terms. We remain committed to keep prompt payment rates above 95%. To Ms Tan’s question, in Financial Year 2023, 98% of invoices were paid within their credit terms.

c. Furthermore, MOF will provide Government agencies with guidelines to address businesses’ suggestions, that include having more payment milestones and clarifying administrative processes. 

B19. The issue of prompt payment is one that extends beyond government procurement. Businesses should also pay other businesses promptly. The SBF is setting up a workgroup to review the development of a Code for transactions between businesses, and we welcome this initiative. 

C. IMPROVING THE EXPERIENCE OF TRANSACTING WITH GOVERNMENT

C1. Mr Liang and Mr Chia asked what MOF agencies are doing to improve the experience of transacting with Government. This has been a continuous endeavour for MOF agencies. Today, it is relatively easy to file taxes with IRAS and apply for customs permits with Customs, following many years of system enhancements.

C2. But improvements can always be made, and we will continue to make them.

a. Since November 2024, IRAS has expedited tax clearance for employers filing on behalf of non-citizen employees who cease employment in Singapore. 

b. Previously, employers would typically need to wait two to three days to receive IRAS’s Directive to pay tax and release monies to employees. 

c. IRAS now issues the Directive on the same day for straightforward cases, which make up about 70% of filings. This will apply to about 180,000 filings a year.

C3. Customs has been exploring the use of AI to address a pain point for traders today – finding the right product codes and licenses applicable to their products. 

a. There are over 21,000 product codes. There is a search engine today, but it requires traders to use specific technical search terms to retrieve the correct codes. 

b. Customs has been working with MTI, GovTech, and PSD to develop a new search engine using AI.  It will allow traders to search for the right product codes using layman descriptions. It will also make recommendations on the required licenses for controlled goods, as a further value-add. The new search engine will be more user-friendly, and help traders navigate the regulatory landscape more efficiently.

c. The new search engine will be soft-launched later this year. Following the soft launch, agencies will gather public feedback and make necessary refinements to the search engine.

C4. From next month, Customs will also progressively implement new data analytics tools to better service public enquiries. This tool will allow Customs to leverage real-time data insights to identify patterns in enquiries raised on customs procedures.  This will help them provide more up-to-date and swifter responses. We expect the average turnaround time for enquiries to reduce by about 30%.

D. CONCLUSION

D1. Mr Chairman, my colleagues and I have laid out what MOF will do to:

a. Enhance our pro-enterprise environment, and make Government a better partner to businesses;

b. Ensure responsible and effective governance of our public resources today and tomorrow; and

c. Prepare Singapore for long-term challenges on the climate and to strengthen our social compact. 

D2. Let us work together to keep Singapore forward-looking, united and confident. 

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Find out more in the MOF COS infographic [PDF, 163 KB].