Committee of Supply – Head M (Ministry of Finance)

Prudent Finances and Supporting Businesses

Mr Liang Eng Hwa (Bukit Panjang): Mr Chairman, I beg to move, "That the total sum to be allocated for Head M of the Estimates be reduced by $100".

Sir, even as we remake our social compact, set out to build our shared future together, we should not lose sight on the other non-social aspects like growing the economy and to ensure that we have sustainable finance.

I am glad that both growing the economy and upholding fiscal prudence and fiscal responsibility are also featured in the Forward Singapore report. Having a strong and vibrant economy creates good jobs and gives us the means to tackle social challenges and enables us to bring about better lives for our people. The Forward Singapore report also reminded us that we are stewards of our limited resources.

[Mr Speaker in the Chair]

While as the current generation of Singaporeans, we are beneficiaries of the strong financial position that we are in today, we should also be good stewards of our finances so that the next and future generations of Singaporeans can continue to benefit from the financial security and the financial resources available. Our social compact must, therefore, be inter-generational; so that future generations, our children, our grandchildren and those not yet born can also be sufficiently resourced to be able to deal with the challenges of their times.

Sir, our Government spending has reached around 18% of gross domestic product (GDP) and is projected to increase to around 20% GDP by 2030. We are spending more for the better well-being of Singaporeans and to build for a more secure future. We cannot and should not cut costs to greatness, but we should ensure that our public spending is value-for-money and that we live up to the high governance standards.

The Government and Public Service are a gigantic machinery with extensive functionalities and round-the-clock operations. Public Service has become more complex due to the changing social, economic and political landscape as well as the deeper proliferation of technologies and the use of digital channels in our daily lives.

Understandably, the Public Service will need a comprehensive set of control and procurement policies and governance framework to administer its procurement of goods and services of this scale.

To strengthen governance and accountability, agencies are also subject to the audits by their internal and external auditors as well as the Auditor-General's Office.

As the agency that manages the Government's finances, how does the Ministry of Finance (MOF) ensure the effective and prudent use of public resources and that the intended outcomes are met?

Sir, many local enterprises are suppliers and servicers to the Government. While they have no issues with the credit worthiness of the Government in fulfilling the contractual obligations and paying the bills, many do hope that doing businesses can be made even easier.

For example, businesses hope that the Government's procurement contracts can be portioned into smaller bite sizes so that smaller businesses would not be disadvantaged.

How would MOF continue to improve businesses’ ease of transacting with the Government? Also, importantly, how does the Government ensure prompt and timely payments to suppliers to ease their cash flow challenges amidst rising costs?

Over the decades, Singapore has built up its reputation as the trusted hub for trade and enterprise. Trade serves as an important pillar for the economy; and along with rapid digitalisation, they are much better connected across the trade value chain today. Systems, such as the Networked Trade Platform (NTP) and TradeNet, helped us up the game and enabled greater efficiency and enhanced connectivity. In that regard, can I ask: how do we maintain and strengthen our position as a leading trade, supply chain and trading financing hub?

Sir, Singapore has committed ourselves to ambitious climate targets, including to achieve net-zero emissions by 2050 as part of the Long-Term Low-Emissions Development Strategy. To achieve these targets, we have to transit to a green economy that deploys greener and more sustainable energy solutions. While the transition will pose significant challenges, especially to our cost structure, it also provides impetus for businesses and entrepreneurs to start seeking innovative green solutions and to explore new opportunities.

Can I ask how is MOF supporting companies to seize growth opportunities and develop capabilities in the area of sustainability?

Question proposed.

Prudent Use of Public Resources

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Chairman, in the Ministry’s Occasional Paper on Medium-Term Fiscal Projections dated February 2023, our total revenue is projected to shrink as a percentage of GDP up to FY2030, whereas Government spending is expected to increase from 18% of GDP today to more than 20% of GDP by FY2030. So, our fiscal headroom will get smaller.

Where we in this House have committed not to dip into our Reserves set aside for future generations, outside of exceptional circumstances, we must ensure that we spend public resources prudently.

But prudence does not mean incurring the lowest possible cost. I am sure most Members would agree with the Building and Construction Authority’s (BCA's) and Ministry of Manpower’s (MOM's) decision to raise the weighting of safety-related criteria in the evaluation of construction tenders from 1 April 2024.

Besides after-the-fact audits by the Auditor-General’s Office and scrutiny by Parliament’s Public Accounts Committee, how does MOF ensure effective and prudent use of public resources? Can technology and artificial intelligence help?

The Chairman: Mr Pritam Singh. Please take your two cuts together.

GST – Registration Threshold

Mr Pritam Singh (Aljunied): Chairman, the registration threshold of $1 million for the Goods and Services Tax (GST) has been in place since 1994. The threshold works, for example, to exempt some small and medium enterprises (SMEs), such as hawkers and retail shops in our neighbourhoods. It also helps avoid incurring additional costs to comply with GST accounting and collection requirements. Almost 30 years later, this figure of $1 million remains in place.

In an earlier Parliamentary Question to MOF on this matter, it replied that the Ministry would continue to assess the appropriateness of this threshold as part of its regular policy reviews. Can the Ministry share the factors that it considers with regard to the appropriateness of the $1 million registration threshold for GST and why it has not been minded to raise this threshold, particularly in view of inflation?

Separately, are there plans to further simplify the compliance costs of GST registration, particularly for small businesses?

Income Tax – Chargeable Income

Chairman, the chargeable income tax for the first $20,000 of one's personal income is 0%. This has remained the case for many years. Even though the effective tax rate of 2% is in place for those earning between $20,000 to $30,000, a figure that comes up to $200, this amount is not insignificant, especially for low-income earners, much of whose salaries get spent on food and consumables.

An additional $200 to spend on such items can provide much respite and support for some families. For those who rent HDB flats under the rental housing scheme, and at the lowest tier, $200 can pay for seven months of rent. Would the Ministry be able to share how it determines the circumstances it takes into account in deciding when to raise its chargeable income threshold for the first $20,000, either to increase it, in view of rising prices and inflation?

RIE2025 and Intellectual Property (IP)

Mr Mark Lee (Nominated Member): Sir, the RIE 2025 plan reinforces Singapore's commitment to long-term investments in enterprise development. It establishes Singapore as a leading global hub for innovation and intellectual property development, ensuring a sustainable competitive advantage for businesses. Given these goals, there is scope to expand our IP protection.

Could the Minister consider broadening the definition of qualifying IP for corporate tax purposes and enhance the IP development tax incentive to spearhead our overall innovation drive?

Continuous Support for Cost of Living

Ms Hany Soh (Marsiling-Yew Tee): Chairman, cost of living remains as a top concern on Singaporeans' minds. Thus, I wish to seek the following clarifications, please. Firstly, has the Committee Against Profiteering found any instances of profiteering, especially in light of the recent GST increments? The Government must continue to safeguard Singaporeans against profiteering.

Secondly, and specifically on food affordability, have food prices at dining outlets increased to the extent that Singaporeans have been materially affected from affording this necessity? I am particularly concerned about our seniors' ability to afford and access at least sufficient and adequate nourishment, whether they dine at home or outside.

Thirdly, how else would the Government assist Singaporeans with household expenses, such as from water and electricity consumption? This point is raised as an aside to encouraging and incentivising households to minimising consumption levels.

Fourthly, will the Government consider providing more support to social enterprises that provide free food to low-income families, especially those living in Housing and Development Board (HDB) rental flats, such as by giving matching grants to social enterprises? The measures under Budget 2024 are commendable and under which everybody will receive a slice of the pie. My concern is a nuanced one.

How can we raise greater awareness so that every Singaporean understands the nature and extent of the assistance or relief that they will receive? Simply put, the measures must not only work but also be felt by Singaporeans to be working.

Finally, how will MOF track the efficacy of Budget 2024's objectives and assistance to its beneficiaries? Mr Chairperson, we as a House and the Government have always worked to ensure that no one is left behind.

In my view, it is our duty to ensure that Singaporeans are aware and assured that we have been and always will do our best for our society. I look forward to the Government's response to my aforementioned points.

The Chairman: Mr Leong Mun Wai, please take your two cuts together.

More Details on Estimates

Mr Leong Mun Wai (Non-Constituency Member): Chairman, in the 1970s, MOF provided the House with detailed breakdowns of the fees and taxes collected. For example, we know that in 1972, the Government collected about $190,000 in car park fines. The information provided today is much less detailed in comparison. I would like to use my cut today to ask for more detailed information on the revenue and expenditure estimates.

First, on revenue. What are the taxes lumped together under “Other Taxes”, account code B90? This item has increased from an estimate of $6.3 billion to a revised estimate of $8.44 billion. What are the reasons for this increase? Why does MOF not provide a breakdown of these taxes, given the sizeable amount? What is the estimated amount of levy collected for Work Permit, S Pass and Migrant Domestic Workers respectively in 2023 and 2024? What is the account code for ERP revenue and what was the estimated amount collected? What are the reasons for the significant increase in corporate income tax from 2022 to 2023 of about $5 billion? Why is there a significant estimated increase in property tax collected for private properties of $753 million in 2024 despite the upward revision of the Annual Value bands announced in Budget 2024? Why is there a big estimated increase in land sale revenue from $18 billion in 2023 to $31 billion in 2024?

Next, on expenditures. How much has been disbursed to SPH Media Trust in 2023 and how much estimated for 2024? What are the HDB deficits for 2023 and 2024? How much was spent by Ministers travelling overseas to fulfil the obligations of their international appointments in their private capacity in 2022 and 2023? How many ongoing development projects have cumulative investment of more than $1 billion? How many projects with total investments of more than $1 billion are expected to be initiated in 2024?

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Finally, what has been the amount invested by MOF as capital injections into Temasek Holdings in 2023 and 2024, and why is this not accounted for as a separate line item?

Endowment Funds

Chairman, the Progress Singapore Party (PSP) welcomes the Government’s efforts to support the retirement and healthcare needs of younger seniors through the Majulah Package. As usual, the Government has set aside money from the current-year Budget to fund the full cost of the package upfront. This time, the Government has set aside $7.5 billion and the projected cost of the package is $8.2 billion. But how do we know whether we have set aside too much?

Back when the Merdeka Generation Fund was set up in May 2019, Deputy Prime Minister Lawrence Wong told the House that the Government would set aside $6.1 billion and that the projected cost of the Package is over $8 billion. But on page 78 of the Government Financial Statements released in July 2023, there is now a note that says, “The estimated liabilities under the Merdeka Generation Fund as at 31 March 2023 are $6,021,419,859.64.” Even after adding the total net drawdown of about $400 million since 2019, the total cost of the Package now does not seem to add up to $8 billion.

Can the Deputy Prime Minister explain whether this means that too much money was initially set aside when the Merdeka Generation Fund was set up? If yes, what will happen to the excess funds?

Use of Public Resources

Ms Jessica Tan Soon Neo (East Coast): Mr Chairman, in Budget 2024, as in previous Budgets, funds are allocated to support Singaporeans, reinforce our competitive advantage, build on existing strengths as well as upgrade sectors where we have competitive advantage. The allocation in this year’s Budget is $20.4 billion. An example of these funds is the top-up of the Financial Sector Development Fund by $2 billion. Other funds include the $5 billion Future Energy Fund to invest in critical infrastructures to catalyse the move to low-carbon electricity; the GST Voucher Fund of $6 billion; and the $2 billion top-up of the Edusave Endowment Fund to recognise and encourage our students to develop competencies, such as adaptive and inventive thinking, communication skills and civic literacy, that will prepare them better and be future-ready. These initiatives are longer term and span over a few years.

What measures does MOF take to assess and ensure the appropriate, effective and prudent use of public resources as they would be expected to be expensed over multi years?

Foreign Domestic Worker Levy Relief

Mr Dennis Tan Lip Fong (Hougang): Mr Chairman, a resident, who is a single father taking care of two daughters in their early teens, shared with me that while he welcomed the change in law last year doubling the paternity leave from two to four weeks, the benefits which he received are significantly less than single mothers, divorced or otherwise, who are having care of their children. For example, he does not enjoy the substantial reliefs which a woman is entitled to under the Working Mother’s Child Relief. My resident, who has a full-time job, would like to engage a migrant domestic worker to help with housework and care for his children. However, he is not entitled to any tax relief under the Foreign Domestic Worker Levy Relief. IRAS allows women who are married, separated from their husbands, divorced or widowed, and had children who lived with them to claim the relief.

Can the Government consider equalising the entitlement to this relief, such that men or women can qualify to apply for this relief as long as other criteria are fulfilled, so that single fathers like himself needing domestic help will get the same relief as single women in his position?

Trusted Hub for Trade and Enterprise

Ms Jessica Tan Soon Neo: Mr Chairman, against the backdrop of geopolitical volatility, digitalisation and climate change, we are witnessing structural changes in the global economy. Singapore’s growth and success are dependent on an open and global economy. How is Singapore strengthening our value proposition to address the risks and capture the opportunities driven by structural supply chain shifts to continue to anchor Singapore as a trusted and preferred hub for trade and business?

Public Resource Prudence and SME Support

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Mr Chairman, I will speak on Government procurement processes, focusing on quality discernment, support for SMEs and green procurement.

Firstly, building Government capabilities is essential. Our public officers must maintain the Government's stewardship role in securing the best quality at the right price. How does MOF ensure the effective and prudent use of public resources and how do we ensure that procurement policies are not only cost-effective but are synonymous with superior quality? It is imperative to equip our public officers with the skills and knowledge to discern quality and excellence.

The introduction of the SME-lite tender system in late 2023 is noteworthy. However, local firms have provided feedback that the tender process has challenges. SMEs face difficulties in fulfilling track record requirements and meet minimum financial grading criteria for larger projects. Could the Ministry provide an update on the SME-lite tender scheme and how it is being refined based on feedback?

SMEs often face cash flow challenges. Hence, how is the Government ensuring prompt payment to ease SMEs’ cash flow issues and, in circumstances where the SMEs are the subcontractors, how does the Government ensure that main contractors promptly pay the subcontractors?

What additional steps can MOF take to enhance the ease of business transactions with the Government? How will initiatives like Invoice Now contribute to streamlining processes and what strategies are in place to expand its adoption across the private sector?

Finally, concerning green procurement, how does MOF enhance officers' understanding of genuinely sustainable initiatives to combat greenwashing effectively? Additionally, how does MOF support companies in leveraging growth opportunities and fostering sustainability capabilities?

Ease Business Procurement and Payments

Mr Derrick Goh (Nee Soon): Chairman, one way to support local businesses and SMEs to build up their capabilities and track record is through Government tenders. Industry groups have shared during my engagement with them that SMEs appreciate such opportunities, not just to increase revenues but also the chance to partner larger companies to sharpen their experience and learning.

While the Government has taken steps to reduce the administrative burden with new functions in GeBiz, such as an online repository, SMEs continue to feed back that accessibility and efficiency of Government tenders can be improved.

In particular, SMEs highlighted how contract specifications may at times be too stringent to fulfil or too rigid to allow room for SMEs to propose more innovative solutions to address requirements. They, therefore, hope contracts can be made more practical and flexible; while bundling and aggregation of contracts are logical, they could exclude smaller SMEs from bidding or compress their margins as they fulfil subcontracts with bigger SMEs as the middlemen; and startups, such as one specialising in AI video analytics which I met at the recent Singapore Airshow, asked whether the financial grading criteria can be eased to provide more opportunities for them to participate as vendors. The reality is that most are asset-light with different risk profiles from traditional companies and they are still in the midst of building up their financial track record.

On payments, I note that the Government has fulfilled payments on e-invoices below $5,000 well before the 30-day credit period. However, SMEs wonder if the invoicing and progressive payment process for larger contracts can be further simplified, such as in the verification of work completion and, especially when variation orders are involved.

I understand MOF had announced the Tender Lite procurement category in last year’s Budget to ease the Government tender journey for SMEs. On this note, can MOF: (a) update on the progress and effectiveness of Tender Lite’s implementation; (b) share if there are plans to further ease the administrative burden on SMEs during the Government’s procurement process, such as through further digitisation and automation; (c) consider improving inclusiveness of smaller SMEs and startups so that they can participate in Government procurement, such as by adjusting the requirements to prefer homegrown enterprises or MNCs that partner with them, so that our local businesses can also participate in the supply chain; and (d) share how the Government can improve the disbursement of payments and grants to be timelier and more frictionless to help SMEs ease their cash flow challenges?

Green Government Procurement

Ms Jessica Tan Soon Neo: Mr Chairman, the Government has outlined ambitious sustainability targets. In the drive to meet the targets and as a large purchaser of goods and services, public sector procurement plays a key role in catalysing the transition to green and achieving Singapore’s ambitious net-zero emission goals by 2030 and, subsequently, 2050.

What measures has the Government taken in its procurement policies to support and encourage suppliers of products and services to the Government to adopt more sustainable practices and grow their sustainability capabilities? Are companies participating in the Government tenders able to meet the standards and requirements and the Government’s procurement considerations? Is the Government on track to achieve its green procurement goals? What challenges has the Government encountered in its drive to green procurement?

Support for Green Transition

Ms Foo Mee Har (West Coast): Mr Chairman, the green transition, inherently complex, necessitates a catalytic role from the Government. It can help to mobilise funding and develop the right capabilities. By offering incentives, providing regulatory support and fostering a conducive environment, the Government's intervention will be instrumental in making the green transition a reality.

Sir, on philanthropic capital. With the growing number of family offices in Singapore, philanthropy can be a promising avenue. With last year’s announcement of the Philanthropy Tax Incentive Scheme, philanthropy from Singapore is increasingly borderless and can be used to fund climate projects around the region. This geographical flexibility will help boost the impact of philanthropy.

However, philanthropy alone is insufficient. Currently, it is estimated that less than 2% of the philanthropic dollars are allocated towards climate mitigation. We must find ways to rapidly scale this impact.

Sir, the true gamechanger will be in mobilising private capital to fund climate projects. We will see real sea change when the trillions in private capital can be effectively directed towards climate solutions.

However, private investors, who seek financial returns, say there is still a lack of sufficient bankable, investable and fundable deal opportunities on the ground. This is the main barrier. Many projects are sub-scale and are too risky for private capital to access.

Innovative funding structures, such as blended finance, have been seen as a solution. Singapore has made consistent efforts to grow blended finance, for example, through the MAS’ Financing Asia’s Transition Partnership.

Under this initiative, together with MAS, development finance institutions and philanthropies could provide concessionary capital in the form of grants, limited guarantees and debt or equity at below market rates of return. On the basis that concessionary capital has been put together, this creates the conditions for banks and institutional investors to crowd in private and commercial capital.

When blended finance works well, the impact is significant. A global example is the Zero Gap fund established by the Rockefeller Foundation and the MacArthur Foundation, which committed $30 million in catalytic investments. As of 2022, this sum has, in turn, mobilised more than $795 million in private capital for projects aimed at achieving the Sustainable Development Goals.

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However, the adoption of blended finance has been slow. Blended finance often involves complex structuring to balance the risks and returns for different types of investors. Many blended finance projects are in new and emerging markets, with relatively few historical precedents to demonstrate their viability and potential for success. This lack of proven track record can make investors hesitant to commit funds. I therefore call on the Government to build awareness and understanding of blended finance amongst potential investors.

Sir, on climate disclosure regime. As the net-zero goal will increasingly become a pre-requisite in the expectations of customers, investors as well as regulators across the world, it is urgent that we support our businesses to take action to stay competitive and relevant. Companies will increasingly be subjected to tighter sustainability reporting and regulations – particularly those with trading partners, such as those in the European Union, which have placed higher standards. Government support to build a framework to help companies comply with reporting requirements and compliance practices that are required by their counterparties will be critical.

Finally, on green procurement. The Government's green procurement can significantly bolster green transition. By prioritising the purchase of eco-friendly and sustainable products and services, the Government sets a powerful precedent – encouraging suppliers to innovate and shift towards sustainable practices.

I would like to ask the Government how it is progressing in its goals and targets towards green procurement?

Scope 3 Climate Reporting Disclosures

Mr Mark Lee: Sir, I would like to inquire about the timeline for both listed and non-listed large enterprises within Singapore to commence the implementation of Scope 3 climate reporting disclosures. This initiative – of paramount importance amongst the business community fearing the tight timeline might leave them unprepared, risking their compliance and operational continuity.

Could MOF share insights into the extended milestones and how the Government plans to support companies – especially SMEs – through this change?

Strengthen Culture of Giving

Mr Saktiandi Supaat: Mr Chairman, it cannot be gainsaid that philanthropy and volunteerism are key ingredients for building a strong social compact in Singapore. They foster our sense of togetherness, in addition to supplementing Government spending in funding social programmes and initiatives.

That is why we have traditionally offered generous tax deductions for cash donations made to Institutions of a Public Character (IPCs) for causes that benefit the local community. The Corporate Volunteer Scheme – previously known as the Business & IPC Partnership Scheme – extended that tax benefit to corporates whose employees volunteer and provide services for IPCs.

So, I was quite surprised but also personally grateful, when Deputy Prime Minister Lawrence Wong announced the new Overseas Humanitarian Assistance Tax Deduction Scheme. The 100% tax deduction offered should catalyse increased cash donations to approve overseas emergency humanitarian assistance causes. There are many people elsewhere who are in greater need. Ultimately, regardless of the beneficiary, we can foster a culture of giving.

What are the initiatives undertaken by MOF to strengthen our culture of giving and enable more people to contribute to our society? Also, how do we monitor the approved list of overseas emergency humanitarian assistance causes?

The Chairman: Second Minister for Finance, Mr Chee Hong Tat.

The Second Minister for Finance (Mr Chee Hong Tat): Mr Chairman, I thank Members for their questions and suggestions for MOF.

The cuts cover four areas. First, improving businesses' ease of transacting with Government and supporting their green transition; second, building a strong society together; third, strengthening Singapore's competitive advantage as a trusted hub for trade and enterprise; and fourth, effective and prudent use of public resources.

I will speak on the first two areas and Minister Indranee Rajah will cover the other two areas.

Sir, Mr Liang Eng Hwa, Mr Derrick Goh and Mr Edward Chia asked how MOF improves businesses' ease of transacting with Government and facilitates their participation in Government tenders.

Last year, we said that MOF will work with the business community to design Tender Lite – a new category of Government tender with fewer and simpler conditions. Over the past year, MOF has been engaging the Association of SMEs (ASME) and the Singapore Business Federation (SBF) to gather inputs from businesses to co-create Tender Lite together.

We have incorporated suggestions and inputs from our business leaders, to make Government contracts more accessible to SMEs.

First, MOF will cut the number of contract conditions by about 20% by streamlining the clauses. Second, we will share risks with businesses, while maintaining public accountability. MOF will remove the requirements for Security Deposits and Liquidated Damages by default for Tender Lite. This will reduce the cost on the businesses and the risk they bear when taking part in Tender Lite tenders.

MOF will be launching Tender Lite from April 2024. Tender Lite will cover tenders up to $1 million for general goods and services. With quotations and Tender Lite, around 90% of Government contracts will be subject to simpler procurement conditions which will benefit our SMEs.

We have also implemented the GeBIZ Supplier File Repository, which enables suppliers to upload their relevant business documents once – for use across multiple bids for all Government quotations and tenders. With the Repository, suppliers can save up to 5,000 hours in total across 100,000 bids submitted annually. Mr Derrick Goh asked if Government procurement could further support SMEs by giving preference to home-grown companies or to MNEs that partner with local SMEs.

As a buyer, the Government needs to ensure prudent use of public funds by selecting cost-effective solutions that provide value-for-money outcomes. Our procurement rules are designed to achieve this in a fair and transparent way. For many SMEs, Government contracts are an opportunity for them to build credibility and track record, which is helpful when they subsequently bid for private sector and overseas contracts; a point that Mr Goh mentioned too.

We are able to achieve this because the buyers know that the Singapore Government awards contracts based on merit via open and fair competition – focusing on quality and value-for-money outcomes. Our aim is to level the playing field and remove unnecessary obstacles that prevent competitive and innovative suppliers – including our small and new businesses – from participating in and winning Government contracts. So, this is what we seek to do under Tender Lite and other initiatives.

Today, over 80% by number and about 40% by value of Government procurement opportunities have been awarded to SMEs. This is higher than the targets in Australia at 20% by value; and in China at 30% by value.

We are also helping businesses reduce the cost of transacting with Government through eGuarantee@Gov, which is a simple and secure digital process for businesses and individuals to provide guarantees to Government agencies. Since its launch in 2022, we have tripled the number of participating financial institutions and agencies. Today, we have around 60 participating financial institutions and 45 agencies and key regulatory processes across Government have been enhanced as a result.

For example, almost all guarantees submitted by businesses registering for import/export permits today, are now done through eGuarantee@Gov. This has reduced the time taken for the entire lodgement process of guarantees with Singapore Customs – from five working days to just one day. Businesses also benefit from not having to incur courier costs to deliver the physical guarantees to Customs.

Over 120,000 eGuarantees were issued to date and eGuarantee@Gov is expected to bring annual cost savings of around $600,000 to businesses, financial institutions and Government agencies. We target to expand eGuarantee@Gov to all Government agencies with guarantee needs by end 2024, which will lead to even greater savings opportunities for the entire ecosystem.

Sir, I thank Mr Liang Eng Hwa, Mr Edward Chia and Mr Derrick Goh for their comments on ensuring prompt payments by the Government to our suppliers. Today, over 99% of the invoices billed to Government agencies adopt 30 days' or shorter credit terms. We have committed to keep prompt payment rates above 95% and have consistently achieved this target. In FY2022, 98% of invoices were paid within their credit terms. This is comparable with the practices and commitment for prompt payments elsewhere, such as the UK and US. To ensure that we maintain these standards, the Accountant-General's Department (AGD) monitors the prompt payments indicators regularly across the public sector.

We understand that businesses would prefer faster payments where possible to ease their cash flows. Since 2021, the Government has been paying ahead of the credit terms for invoices below $5,000, after the receipt of goods or services. From April 2023 to January 2024, Ministries and Organs of State paid 98% of invoices – below $5,000 – ahead of their credit terms. More than 85% of such invoices were paid to SMEs, benefitting over 15,000 of them.

I would like to correct for the record, what was said during MOF's Committee of Supply (COS) in 2022. Then, we said, "As of end-January 2022, about 97% of e-invoices below $5,000 were paid within 12 days – ahead of the usual credit term of 30 days." [Please refer to "Committee of Supply – Head M (Ministry of Finance)", Official Report, 2 March 2022, Vol 95, Issue 52, Budget section.]

Sir, this is incorrect. Instead, it should be, "For the period of September 2020 to January 2022, 97% of invoices below $5,000 were paid ahead of their credit terms. The average time taken to pay these invoices was about 12 days."

Sir, there have been cases of incorrect billing and unsatisfactory delivery of goods and services by businesses – where invoices were rejected. While such cases remain below 10% of all invoices, they do contribute to SMEs' concerns over cashflow.

We aim to do better. The Government will work with our trade associations and chambers (TACs) – including SBF and ASME – as well as businesses to identify specific areas where we can enhance our processes and enable more businesses to receive payments promptly. Similar to what we have done by working together with our TACs and businesses on Tender Lite. We will also study best practices from other countries and private-sector companies as part of our review.

Public sector agencies have also collaborated with one another to improve services to businesses. One example is the upcoming One-Stop Payroll initiative developed by the Inland Revenue Authority of Singapore (IRAS), Central Provident Fund (CPF) Board and Ministry of Manpower (MOM). Currently, employers need to use different systems to report an employees' income to IRAS for tax purposes – to CPF Board for payment of CPF and to report updates to employees' occupational and employment details to MOM. The agencies got together to combine IRAS' existing Auto Inclusion Scheme seamless filing service with new filing services from the CPF Board and MOM, as an integrated digital solution offering.

One-Stop Payroll will enable businesses to use the same payroll software to submit annual payroll to IRAS and monthly CPF contribution data to CPF Board; and seamlessly update employees' occupational and employment details under MOM's Occupational Employment Dataset. Three birds with one stone. A win-win outcome which is good for businesses and good for our agencies.

Ms Foo Mee Har asked how MOF is helping companies capture opportunities with the green transition. The MTI will be addressing this at its COS. The support for businesses will also cover new requirements for sustainability reporting.

Let me provide an update on sustainability reporting. In 2022, ACRA and the Singapore Exchange Regulation set up the industry-led Sustainability Reporting Advisory Committee (SRAC) to advise on a roadmap for climate reporting by companies in Singapore. The SRAC has made its recommendations and ACRA issued a public consultation last year to gather feedback.

The Government has considered the public feedback carefully and will introduce mandatory climate disclosures in a phased approach – starting with listed companies, then larger non-listed companies. Other jurisdictions, such as the European Union, United Kingdom and New Zealand, have similarly introduced mandatory climate reporting requirements for both listed and non-listed companies.

From FY2025, all listed companies will have to prepare climate reporting based on local prescribed reporting standards, which are aligned to those of the International Sustainability Standards Board.

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From FY2027, non-listed companies with annual revenue of at least $1 billion and total assets of at least $500 million will be required to provide climate-related disclosures.

Listed companies and large non-listed companies, as defined above, are also required to obtain external limited assurance on Scope 1 and Scope 2 Greenhouse Gas emissions two years after they start reporting, from FY2027 and FY2029 respectively.

ACRA will review in 2027 whether to extend the requirements to smaller non-listed companies. We have not made a decision on this. ACRA will give companies sufficient notice before introducing any requirements.

We recognise that some companies may have started climate reporting using different internationally recognised standards and frameworks to meet investors’ information needs and requirements of the jurisdictions that they operate in. For such companies, we will provide a three-year transitional period during which we will exempt them from the new requirements, if they are using other internationally recognised standards and frameworks.

Mr Mark Lee asked about the timeline for mandating Scope 3 climate reporting disclosures. Sir, while we recognise that Scope 3 disclosure provides a holistic view of companies’ emissions and supports decision-making for investors and the supply chain, we will need to take into account readiness of the companies before introducing such requirements. It is better to take a phased approach, which I think Mr Lee will agree.

Listed companies will be required to disclose Scope 3 emissions from FY2026, a year after mandatory climate reporting. As for non-listed companies, we recognise that they need more time to build capabilities for Scope 3 disclosures. Hence, we will not require non-listed companies, including large ones, to disclose Scope 3 emissions before FY2029. We will consider the industry's readiness and implementation experience from the listed companies before deciding when to require Scope 3 disclosures for non-listed companies. Companies will be given at least two years' notice if the decision is to proceed with Scope 3 disclosures. The Government is also stepping up efforts to support large companies and SMEs through the green transition, including support to develop sustainability reporting and assurance competencies. The Ministry of Trade and Industry (MTI) will elaborate on these support measures.

Ms Jessica Tan and Mr Edward Chia asked about policies to promote greener procurement practices by the Government. As buyers, our agencies are also encouraging and recognising the development of green capabilities by enterprises through green Government procurement. This helps our businesses build capabilities to meet the demands from consumers and investors for more sustainable products and supply chains.

Over the years, the Government has incorporated environmental sustainability considerations into our procurement and continuously reviewed our policies to procure greener solutions. Starting from FY2024, we will set aside up to 5% of evaluation points for sustainability-related considerations, for larger construction and infocomm technology (ICT) tenders, which are in addition to the existing high standards that we require for our buildings and ICT equipment.

We have implemented this for selected projects in 2023. For example, the Land Transport Authority (LTA) set aside additional evaluation points for greener suppliers for a number of their tenders for the Cross Island Line, such as for Clementi station and King Albert Park station.

It will take time for businesses to adjust to new sustainability considerations, so we are phasing these into Government tenders gradually, in consultation with the business community. We are happy to see that companies participating in Government tenders are gradually adopting sustainability practices, such as disclosing their emissions and greening their operations and supply chains.

Within the Government, we are also developing training programmes to strengthen public officers’ capabilities on sustainability. We are on track to achieve our target to include environmental sustainability considerations in all Government procurement by 2028, but further progress also depends on industry readiness and international developments.

The Ministry of Sustainability and the Environment (MSE) will provide more details of the industry consultations and pilots. Mr Chairman, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] Although there are signs of improvement in the inflation situation, the Government is aware that our SMEs are very concerned with operating costs. Hence the Government will introduce various initiatives to help businesses reduce costs and simplify transaction processes between businesses and the Government, allowing businesses to save money, effort and time.

Starting from April this year, we will implement Tender Lite, simplifying terms for over 90% of government contracts and making it easier for businesses to participate in government tenders.

We have also taken into account feedback from businesses and introduced a series of platforms to reduce the administrative cost for businesses and make transactions more convenient. These include eGuarantee@Gov, which allows businesses to quickly provide bank guarantees or risks guarantees to government agencies and a one-stop system to report employee income: One-Stop Payroll.

Apart from assisting businesses in reducing costs, the Government will also help them to expand their business capabilities. In this regard, we will work with businesses to advance the transition towards sustainable development and acquire new skills in digital economy and environmental sustainability, thereby enhancing their competitiveness.

The Government will continue to take a multi-pronged approach to build an efficient and sustainable pro-business environment, to actively support businesses in their development and transformation.

(In English): Mr Chairman, I thank Members for their questions and suggestions on taxes. Mr Mark Lee asked whether MOF could broaden the definition of qualifying IP for corporate tax purposes, and whether the IP development tax incentive could be enhanced. The Government supports businesses to leverage IP for their growth through various tax and non-tax measures. Enterprises may tap on Government grant schemes administered by Enterprise Singapore. The Singapore IP Strategy 2030 was also launched three years ago to strengthen Singapore’s position as a global intangible assets and IP hub. MinLaw will elaborate on this.

In parallel, our corporate income tax regime also provides support through various schemes. The scope of qualifying IP for our tax schemes broadly follows the definition used by the World Intellectual Property Organization, as well as international tax standards. MOF will continue to review our schemes for relevance, with careful consideration of their costs, benefits and consistency with international standards.

Mr Pritam Singh asked how MOF considers when to raise the chargeable personal income tax threshold for the lowest tiers, as well as the $1 million threshold for GST registration. The Government has taken steps to address cost-of-living concerns, especially for lower- and middle-income Singaporeans. Deputy Prime Minister Wong mentioned some of these during the Budget Debate.

On the personal income tax exemption threshold, our $20,000 exemption threshold is higher than jurisdictions like Malaysia, the UK and Australia, where thresholds range from around S$1,500 to S$16,000. The threshold, taken together with our progressive tax rates, tax reliefs and rebates, results in around 40% of all workers not having to pay any income tax. Among those who do pay personal income tax, 80% of them have an effective tax rate of less than 6%. The vast majority of income taxes are paid by the top 10% of taxpayers.

We review the personal income tax regime from time to time. We raised the top marginal tax rates in recent years and have just announced an increase in the annual income threshold for dependant-related reliefs from $4,000 to $8,000 this year. MOF will continue to review the regime, including the exemption threshold, and ensure that it remains competitive, progressive and fiscally-resilient.

As for the GST registration threshold, the current threshold of $1 million was put in place when the GST system was introduced in 1994. It was set very high to exempt most SMEs from the additional costs necessary to comply with GST collection requirements; around 90% of businesses in 1994 were exempted from having to register from GST.

At that time, the UK VAT registration threshold was just £45,000, which is about S$75,000, while Australia’s was A$50,000, or S$45,000, when they introduced GST in 2000.

The $1 million threshold remains relevant today, as around 90% of businesses continue to be exempted from GST registration. And our threshold remains significantly higher than in most other jurisdictions. For example, the UK’s threshold now is £85,000, or about S$145,000, while Australia’s threshold is now A$75,000, or about S$65,000.

In addition, around 70% of businesses that newly register for GST today do so voluntarily, even though their turnover falls below the threshold. We will continue to assess the appropriateness of this threshold as part of our regular policy reviews.

Mr Dennis Tan asked about extending the Foreign Domestic Worker Levy Relief (FDWLR) to divorced single working fathers. Deputy Prime Minister Wong announced in Budget 2023 that the FDWLR would lapse with effect from the Year of Assessment 2025. He explained that this was because we already have a migrant domestic worker levy concession, which provides more targeted support for families who need help caring for their dependants, regardless of whether they pay income tax. This includes single working fathers with young children living in the same household. They can qualify for the migrant domestic worker levy concession.

Sir, Ms Hany Soh asked how we are alleviating cost-of-living pressures and addressing concerns, and Mr Saktiandi Supaat asked how we will support and encourage more people to give back and contribute to our society. We will continue to implement comprehensive support measures to address the concerns of Singaporeans and foster an enabling and supportive ecosystem for community giving. This is key to helping us build a strong social compact, and a caring and cohesive society.

As Deputy Prime Minister Wong explained, we apply monetary policy levers to temper imported inflation, and fiscal policy to further cushion the impact of inflation on Singaporeans. We enhanced the Assurance Package in Budget 2024 to provide near-term relief, as we think this is needed even as inflation moderates.

As the Government deploys these measures, we actively monitor the impact and we are prepared to do more to support Singaporeans should it become necessary. And we will do so in a manner which is fair, effective and sustainable, for both current and future generations, as Mr Liang Eng Hwa said earlier.

We have also been actively strengthening our enabling ecosystem for mutual support, and this helps forge a strong and united society that progresses together as one people. MOF provides various forms of support for community giving.

As Mr Saktiandi Supaat pointed out, we provide various tax deductions schemes – for qualifying donations made to Institutions of a Public Character (IPCs), for corporate volunteering, and for qualifying overseas donations towards emergency humanitarian assistance causes.

Beyond tax deductions, we also support charitable giving through Government matching grants. For instance, during the challenging COVID-19 period, we enhanced our support for charities through Tote Board’s Enhanced Fundraising Programme which provides dollar-for-dollar matching for eligible donations received by charities. The programme has supported 480 charities and matched almost $200 million in donations since 2020.

A key ingredient in building a strong society is partnership. When we harness the expertise, experience and passions of diverse stakeholders and combine our efforts to serve our community, this can create a ripple effect and lead to a sustained positive impact on our society. The Government has brought together the People, Private and Public sectors to support community and ground-up initiatives. This is a key element of Forward Singapore – individuals and corporates stepping up to work together on challenges facing our society and to care for our fellow Singaporeans.

Tote Board, together with the Lee Kuan Yew Centre for Innovative Cities and the Institute of Policy Studies, launched the Future-Ready Society Impact Fund and Knowledge Partnership last year to provide funding support for piloting innovative, evidence-based solutions that can enhance the resilience of our social ecosystem.

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Another initiative – called BAGUS Together – was launched in January this year by Tote Board, Temasek Foundation and the National Volunteer and Philanthropy Centre to strengthen our groundup ecosystem. BAGUS Together – which stands for Building All Groundups for Success Together – will rally funders, corporates and volunteers to support groundups in their journey. It will provide groundups access to critical resources and networks to enable them to deliver stronger and more sustained community impact. Groundups play an integral role in meeting the needs of local communities and particular groups that are not easily catered for with broad-based programmes. So, this is why we want to support them. And, this is where BAGUS Together can come in as a first-stop platform to connect changemakers with a community of skilled volunteers and like-minded partners to share resources, grow capabilities and support one another's efforts to create a positive impact on our community.

The Chairman: Second Minister for Finance Indranee Rajah

The Second Minister for Finance (Ms Indranee Rajah): Mr Chairman, Mr Liang Eng Hwa, Ms Jessica Tan and Mr Saktiandi Supaat asked how the Government ensures effective and prudent use of public resources, including for spending needs that span several years. We seek to achieve prudent spending with good outcomes, that is, value for money.

Today, our Government expenditure as a share of GDP is about 18%, which is among the lowest across advanced economies; yet at the same time, we are ranked highly on many economic and social indices. Based on 2022 OECD data, general government expenditure in other advanced economies, such as the UK, Korea and Germany, exceeded 40% of GDP, while that of Switzerland was about 30% of GDP.

As our spending needs rise, we will continue to manage our expenditure growth carefully. We have mechanisms to evaluate our spending and to reallocate resources across the Government. For instance, in FY 2023, the Government implemented a 1% cut to the budgets of all Ministries and Organs of State and channelled the funds towards new and emerging priorities. Aside from prudent spending, at the macro level, we also constantly strive to optimise our spending.

First, for large expenditure items, such as major infrastructure projects, MOF applies additional scrutiny to evaluate their worthiness and cost effectiveness.

Of the large infrastructure projects submitted for approval in 2023, MOF was able to achieve total cost avoidance of around $1.6 billion, or 7.6% of projects' capital costs, by working with agencies to explore more cost-effective solutions and alternatives, and size the scope and budget of the projects judiciously.

Larger-scale and more complex projects are also reviewed by the Development Projects Advisory Panel, comprising experts from across the private and public sectors and academia. This is in addition to agencies' own efforts to ensure cost-effective infrastructure spending when they are developing their designs. For example, the Land Transport Authority (LTA) considers rail alignment, site and ground conditions in determining the appropriate tunnelling design for our Mass Rapid Transit system.

For phase 2 development of the Cross-Island Line, it was assessed that twin-bore tunnels instead of single-bore tunnels could be used for selected stretches. This is expected to achieve cost avoidance of approximately $310 million.

Second, Government programmes are subject to evaluation and reviews to ensure that their purposes are met. Where relevant, the findings also inform how these programmes can be refined to enhance their effectiveness. For example, a study commissioned by the Early Childhood Development Agency (ECDA) showed that parents and caregivers who received KidSTART home visits had more positive interactions with their children than families who did not receive such support and these children also showed improved socio-emotional development. As a result, the revised KidSTART model will deliver child development interventions mainly through home visits.

Government agencies also constantly re-engineer their processes and digitalise them for greater effectiveness and efficiency. For example, the Accountant-General's Department digitalised audit workflows across the public sector through the Audit and Governance Enterprise Management System to enable timely identification, analysis and remediation of audit issues across the Government.

The public sector is committed to ensuring that our processes are kept lean and efficient, while providing ample guidance and ensuring sound governance for public offices to respond in an agile and nimble manner.

Mr Liang Eng Hwa and Ms Jessica Tan also asked how MOF is strengthening our competitiveness and hub status. Through decades of hard work, we have built an international reputation as a reliable and trusted hub for business and trade. A key enabler is to have a strong and robust accountancy and audit ecosystem.

Accountants play a vital role in safeguarding and supporting businesses, and Singapore's strong accounting sector has been the bedrock of our trusted business hub. But the sector has faced manpower challenges in recent years. Fewer students are enrolling in accounting degrees and among the graduates, fewer are pursuing accounting-related careers.

MOF set up the Accountancy Workforce Review Committee (AWRC) in 2022 to study these challenges and see how we can build a sustainable pipeline of local accountancy talent. The AWRC's work is almost completed and the Committee expects to issue its recommendations in the coming months.

In line with the AWRC deliberations, the Accounting and Corporate Regulatory Authority (ACRA) and the Institute of Singapore Chartered Accountants (ISCA), have expanded the pathways for Singaporeans to consider accountancy as a career and obtain the necessary professional qualifications and experience to practise as an accountant.

One key initiative is the enhancement of the Singapore Chartered Accountant Qualification (SCAQ), which will create more opportunities for local polytechnic graduates to become professional accountants. Some of the programme's requirements will also be streamlined while maintaining rigour and quality.

MOF and ACRA have also been galvanising stakeholders to support the AWRC's work. For example, the Nanyang Technological University (NTU) recently launched a new four-year Bachelor of Accountancy in Sustainability Management and Analytics. This builds on NTU's existing three-year Bachelor of Accountancy programme with new features, such as a 30-week internship component, for practical industry exposure and opportunities to work or study overseas. Through these, students will be able to accumulate more work experience and career development opportunities earlier, and enjoy an accelerated pathway to becoming a chartered accountant.

I am confident that our partnership efforts with stakeholders will strengthen the accountancy sector and, in turn, Singapore's position as a trusted business hub.

Another key competitive advantage of our business hub is our pro-business, pro-trade stance. MOF continually works to enhance our trade processes to facilitate the flow of goods and reduce regulatory costs for businesses.

Singapore Customs has played a leading role in developing the Mutual Recognition Arrangement (MRA), signed by all ASEAN member states. The MRA will recognise each member state's authorised economic operators (AEOs). Under this arrangement, the AEO companies will enjoy faster documentary and cargo clearance for movement of goods within ASEAN. This saves time and money and shortens the time for goods to reach market. A six-month pilot has commenced with six ASEAN member states and we aim to implement the arrangement in the third quarter of 2024.

This is our first multilateral MRA and adds to the 12 bilateral MRAs we already have with other jurisdictions. As trade with ASEAN member states accounts for a significant 28% of our trade in goods, this will benefit many businesses.

By improving and streamlining our trade processes, we are also strengthening Singapore's position as a global trade node. We cannot take Singapore's hub status for granted and I urge all stakeholders to work with our businesses and help them acquire new capabilities and be more competitive.

Mr Leong Mun Wai asked whether the Government has over-resourced the Merdeka Generation Fund and may be doing likewise for the Majulah Package Fund. This suggestion is not correct.

Let us first start with the principle underpinning our approach. For large commitments like the Merdeka Generation (MG) Package, we set aside resources as and when we can to meet our commitment to every single one of our MG seniors. This is the approach of the Government.

Back in 2019, we projected that we would need more than $8 billion in total to meet our commitments to all MG seniors. This was based on projections of spending and life expectancy. However, to meet this spending, we did not have to set aside the entire $8 billion. We needed to inject only $6.1 billion into the MG Fund because every year, the fund grows from investment and interest income.

In the four years since 2019, we have disbursed $0.9 billion from the fund. At the same time, we have concurrently earned investment and interest income. As such, the net drawdown is $0.4 billion. The fund balance is now $5.7 billion. This can be found on page 79 of the Government Financial Statements. $5.7 billion is less than what we would need to meet our remaining commitment to the MG seniors.

Taking into account that we have already met some of our commitments from paying out over the last four years, the estimated amount needed to meet remaining liabilities is $6 billion. That is at page 78 of the Government Financial Statements. This is more than the $5.7 billion remaining in the fund. There is a shortfall. We will continue to carefully monitor healthcare utilisation and longevity trends, and make top-ups in future, if necessary.

Mr Leong then had several other miscellaneous questions. His questions can be categorised into two groups: one, on revenue; and the other group on some specific expenditure items.

In relation to the first group, I think he suggested that we had not provided sufficient information on taxes. Actually, the information is already available in the Revenue and Expenditure Estimates – also known as the Budget Book – which can also be used for weightlifting.

Let me deal with his questions quickly.

He said that we did not explain what "Other Taxes" were. Actually, this can be found in the Overview of the Budget Book at page XIX, which tells you what the "Other Taxes" comprise, which essentially include Foreign Worker Levy, Water Conservation Tax, Land Betterment Charge and the Annual Tonnage Tax. And it is also on page XX; and it is in the footnote of page XX; and it is again on page XXI and it is also elaborated there. And again, it is on page XXII; and there is a further footnote at page XXII.

So, actually, we explained what the "Other Taxes" were not once, not twice, not three times; but four times inside the Budget Book.

Mr Leong also asked for the reasons that we collected higher revenue on Other Taxes and Corporate Income Tax. The reasons can be found in the Analysis of Revenue and Expenditure, which was published on the same day as the Budget Book and can be found on the MOF website.

Very briefly, the FY2023 estimates for Other Taxes were revised upwards because of higher Land Betterment Charge collections from unforeseen redevelopment projects, and the increase in the FY2023 estimates for Corporate Income Tax was due to stronger-than-expected economic growth in 2022.

So, now let me deal with the second group of questions.

On Electronic Road Pricing (ERP), the revenue estimates are reported under the C16 Account: Transport and Communication, Licence and Permits. For both FY2023 and FY2024, ERP collections are estimated to be about $80 million annually.

On Foreign Worker Levy, the total levy collected is projected to be around $6.5 billion for FY2023 and around $6.8 billion for FY2024. Based on actual collections from January to December 2023, Work Permit and S Pass holders accounted for around 77% and 17% of total collections respectively, with the rest attributable to Migrant Domestic Workers.

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On land sales proceeds, the receipts fluctuate based on the projected number and value of land sales each year. These are driven by our physical planning needs. We are estimating higher receipts in FY2024 because we expect more higher-value land sales in the coming year.

On property taxes, because Mr Leong asked why there is a significant increase for property taxes of private properties in 2024 despite the revision of the taxable Annual Value (AV) bands, we would like to clarify that the revisions in the AV bands will only take effect from 1 January 2025. I should also point out that the $753 million figure was actually the change in property tax collections for all privately-owned properties, not just private residential properties. In other words, non-Government properties. So, it would include commercial properties as well.

Mr Chairman, there are about 33 seconds left. I would only need maybe a couple more minutes to complete. I think there is some extra time for me, if I may complete the reply.

The Chairman: Yes, there is. We have got up to 6.50 pm, so please proceed.

Ms Indranee Rajah: Thank you. More generally, any report, including the Budget Book, presents data in meaningful ways for its users. So, not every single tax, fee, line item expenditure or capital receipt is listed. You can imagine how many more pages the Budget Book would need to have if that were to be the case. We therefore aggregate smaller items into larger groupings in our reporting and highlight the more salient changes. As it stands, our Budget Book has a comparable amount of detail to jurisdictions like Hong Kong and India.

Moving on to expenditure, some of these cuts would have been better addressed by other Ministries. Nonetheless, since Mr Leong has raised them, I will touch on them briefly.

On SPH Media Trust, the Minister for Communications and Information will share more at MCI’s COS.

On HDB’s deficit, it is on the books of HDB, which is a Statutory Board. Hence, information on HDB’s deficit can be found in HDB’s Financial Statements, rather than the Revenue and Expenditure Estimates. Mr Leong can refer to the FY2022 Financial Statements available publicly for the latest figures. FY2023 and FY2024 information will be published in due course.

With regard to Ministers travelling overseas for official appointments in their private capacities, this information is not tracked as a separate item of expenditure.

First, it is important to understand that Ministers taking up international appointments in their private capacities are allowed to do so only when it is in the interest or in the service of the nation. In other words, in those situations, they are travelling and working on behalf of the state, albeit in their private capacity. In other words, they are doing it for the state even though they are using their private capacity. This is not a case where it is the state funding their own personal things. They are allowed to do this because it is in the interest of the state that they do so.

As such, it would be part and parcel of the normal expenditure that you would expect and it comes under the expenses reflected in two accounts, "2100 Consumption of Products and Services" and "2400 International and Public Relations, Public Communications", on page 8 of the Budget Book.

In any case, there are very few who have done so. And I should also say that when the few Ministers travel in the private capacity, do not forget when they go there, they may well also have official meetings. In fact, to save time, very often, we would do that. So, one trip may serve multiple purposes, some in their official capacity and then, one or two meetings in their private capacity.

The spending on all development projects is available in the Budget Book. This includes ongoing projects with total project costs exceeding $1 billion, such as the Woodlands Health Campus and Phase 2 of the Deep Tunnel Sewerage System. The focus of providing these spending figures is for accountability of spending on these projects. As the total project cost and annual spending of each development project is listed in the Budget Book, Mr Leong can look these up, based on his area of interest.

And finally, regarding capital injections into Temasek Holdings, Mr Leong previously filed a Parliamentary Question (PQ) on this topic in January last year. MOF provided him the figures for 20 years up to March 2022. Since then, capital injections into Temasek are similar to the average annual historical capital injections mentioned in our earlier PQ reply.

Mr Chairman, MOF is committed to ensuring fiscal sustainability, prudent spending and achieving good value-for-money outcomes for the benefit of current and future generations. Let us continue to work in partnership to build a strong, united, and inclusive Singapore.

The Chairman: We have till 6.50 pm for clarifications. Mr Don Wee.

Mr Don Wee: Thank you, Chairman. Firstly, I would like to declare that I am a Council Member of the Institute of Singapore Chartered Accountants (ISCA).

To Minister Indranee, pertaining to the Singapore Chartered Accountancy Qualifications or SCAQ, on behalf of ISCA, I thank MOF for making improvements to the Singapore Chartered Accountancy Qualifications. We shared these improvements to the IHLs last week. They were well received.

May I ask if MOF can support and promote Singapore Chartered Accountancy Qualifications to the civil servants in the Statutory Boards and Ministries, who are performing financing functions?

Ms Indranee Rajah: I think we can certainly bring the attention of the SCAQ not just to civil servants but to everyone who is looking to come into the accountancy sector, looking to upskill, upgrade and find new career pathways. And the accountancy sector comes under MOF, so we would recommend it in general.

The Chairman: Mr Mark Lee.

Mr Mark Lee: I thank Minister Chee for his response to my questions. I am glad to hear about the Government's ambition to be an IP hub. I have two subsequent questions.

First, some businesses have patented IPs but prefer not to officially register to safeguard sensitive information, like formula and proprietary knowledge. Will the Government actually consider expanding the IP Development Tax Incentive to cover this?

Second, I think IP valuation is both an art and a science. In our pursuit of being an IP hub for the region, what are the Government's plans in building this talent base?

Mr Chee Hong Tat: Mr Chairman, I thank Mr Mark Lee for his questions.

To his first question, we will take a look at the specific suggestion that Mr Lee has brought up. But I just want to go back to what I mentioned in my speech earlier, that MOF, when we review some of these schemes, we have to take a look at the cost benefit but also to check on consistency with international standards. I think this is important because at the end of the day, we do need to also make sure that our standards that we apply here are consistent with international standards.

As to Mr Lee's second question, certainly this is a very important area under the Singapore IP Strategy 2030, because if you do not have a talent pipeline, you cannot execute and implement many of the good ideas. So, I think the Ministry of Law will elaborate on this during their COS.

The Chairman: Mr Leong Mun Wai.

Mr Leong Mun Wai: Mr Chairman, I thank the Minister for the detailed reply to the various questions, when I asked for more details on the estimates. However, I would like to ask on the Other Taxes, even in the Budget Book, it did not break down the Foreign Worker Levy, Water Conservation Tax and Land Betterment Charge. Minister, can you confirm that?

Ms Indranee Rajah: When you look at the Budget Book, Sir, what it says is that Other Taxes, which include the Foreign Worker Levy, Water Conservation Tax, Land Betterment Charge and Annual Tonnage Tax, are estimated to be $8.86 billion, which is $77.7 million or 0.9% higher than the Revised FY2023.

Essentially, as I mentioned earlier in my reply, you would give as much information as is necessary for people looking at the Budget Book to use it meaningfully, but you do not go down into — you have got line item, then every single one, then you go down further and further and further. There comes a point where the degree of granularity does not really serve as much of a useful purpose when you are considering the Revenue and Expenditure Estimates for an entire financial year.

So, basically, the information that is provided in the Budget Book is very similar to what is provided in many other countries and the purpose, of course, is to allow people to see what the Revenue and Expenditure Estimates are like, and for Parliament to be able to debate and decide on the financial policy.

The Chairman: Mr Leong Mun Wai.

Mr Leong Mun Wai: Chairman, yes, I thank the Minister for the further clarification.

So, now we have confirmed basically that this big item of $8.44 billion, which consists of the Foreign Worker Levy, Water Conservation Tax, Land Betterment Charge, it is all lumped up into one very big amount and there is no further breakdown on it. It is okay. I mean, I just want to confirm that that is the case, that that is the way we are treating the accounts.

Ms Indranee Rajah: Mr Chairman, all I am confirming is that in the Budget Book that is how it is presented. As to whether there is any further detailed breakdown elsewhere, I would have to check. But for today's purposes and in my response, because you must remember that the initial cut was that we did not explain what these other taxes were and that we did not give a breakdown of the taxes. And, hence, my reply was that we have given a breakdown of the taxes because we told you exactly what they are.

The Chairman: Yes, Mr Leong.

Mr Leong Mun Wai: Chairman, okay, I will let the matter rest. But before that, my question actually specifically asks for a breakdown of these taxes, but okay, we let the matter rest.

We are just talking about I think today and over the whole process of the Budget debate, one of the key themes that we were talking about is transparency. We hope that we can get more data and information so that we can understand the whole Budget process better.

And over the years – this is my fourth Budget debate – I found that there are actually many information that is still lacking. However, I will let the matter rest.

I just have one question left for the Minister and that is in view of what I said just now, to increase the amount of information that we can get, there are three areas at least I do not know whether the Government can commit to offer to us going forward.

One is that MOF had come up with the medium-term fiscal projections last year, but the whole report is actually very brief. Going forward, can we offer more details as to how the analysis is being done, what are the basic data and all those details and things? I have seen a lot of financial reports in the course of my career. I would say that by the standard I know, the medium-term fiscal projections report is very brief. There is not enough information. It is like you want us to just take the conclusion. But I think we need to know the analysis behind it.

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The Chairman: Mr Leong, may I invite you to ask your questions?

Mr Leong Mun Wai: Yes, the question is whether going forward, MOF can provide us with more detailed fiscal projections, spending and revenue projection, one? Secondly, is that the projections on the endowment and trust fund. How do you decide what amount you want to put in, the expected payout and all those things? I think that would allow us to understand the whole budget process better. Because right now, it seems that there is a budget process and there is also an off-budget process. All the money is in the endowment and trust funds. So I think we need actually an integrated view of this whole budgeting process.

And the third thing we want to know is that since we have already passed the SINGA Bill and the big infrastructure projects are under this SINGA Bill and the SINGA Bill is also reported in the Budget – in terms of the capitalised costs and all that – so can Parliament have more information on the projects that are inside the SINGA Bill, that are under the SINGA financing? So all this I think would help us a lot going forward, to understand better about how we have used our money.

The Chairman: Ms Indranee Rajah. I would like to remind Members that we are fast approaching the guillotine time, 6.50 pm.

Ms Indranee Rajah: Mr Chairman, I thank Mr Leong for his further clarifications. For his first clarification, he asked whether or not for the medium-term — actually no, before he got on to that, he was asking whether or not we could give even more granular detail on the "Other Taxes". I come back to the reply that I made earlier, which is that the Government's Budget is a huge budget. There are lots of different items and the question is what level of detail do you need?

And already, as you can see from the Budget Book, a lot of detail is already given. So, there is a question of how much do you actually need for the purposes of the Budget and what we have given, as I said, is the same as what other countries give. We adhere to the same general standards, so it is the same level of transparency.

Then the second question that he raised was for the medium-term fiscal projections. Now again, I come back to this – which is that firstly, they are driven by long-term drivers. But at the end of the day, when we put out our projections – it is the same kind of standards that other countries use. Mr Leong says that he has seen lots of other financial documents. They may be documents of companies, but financial documents of other countries?

When you look at a country – that is very different from reporting like a company. The volume, the business, the things that a country has to look at and the Ministries, the items are huge. So, what you do is you put forward projections in a way that gives sort of a meaningful direction; it sets out the Government's thrust; it sets out the key items or things that you think you will have to deal with. If the Member has questions or queries, then of course the Member can file questions and then that will be answered at the appropriate time.

I was not quite sure I understood the thrust of that projection on the endowment and the other funds. But if he was asking how we decide whether our funding for specific purposes comes from the funds or the annual Budgets, is that the thrust of the question? So, generally we fund our spending through the annual Budget and we use funds for specific needs, which we know will come up, including large commitments. And that, I think was dealt with by Deputy Prime Minister earlier. So that is the general approach.

The Chairman: Mr Liang Eng Hwa, may I invite you to withdraw your cut?

Mr Liang Eng Hwa: Sir, allow me to first thank the Deputy Prime Minister and the MOF team for a very impactful and forward-looking Budget. And also for their continuing assurance to Singaporeans to cope with the current cost situation. I also want to thank Minister Indranee and Minister Chee Hong Tat for their comprehensive reply. Sir, with that, I beg leave to withdraw the cut.

Amendment, by leave, withdrawn.

The sum of $1,150,716,900 for Head M ordered to stand part of the Main Estimates.

The sum of $161,511,500 for Head M ordered to stand part of the Development Estimates.