Committee of Supply – Head M (Ministry of Finance)

The Chairman: Mr Liang Eng Hwa.

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Responsible and Effective Governance

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

Madam, let me start by sharing a few international articles about Singapore that I picked up recently. Firstly, it is this truly remarkable report by the British Broadcasting Corporation (BBC) that cited Singapore as being named the world's sixth Blue Zone by the National Geographic.

What are Blue Zones? Blue zones are the identified geographic communities where the inhabitants are known to have live well, live healthily, with exceptional life expectancies way higher than the world's average or higher than 80 years old.

I did some research on the article and noted that they also look at indicators, such as whether the people living in that communities live purposeful-driven life, the level of social connectivity, the low rates of chronic disease, healthy environment, among others.

The BBC report also mentioned that Singapore's healthcare system has received global accolades both its quality of care and its ability to keep costs affordable. It also added that when it comes to longevity, Singapore is one of the few places in the world that saw quantum jump in life expectancies. From what was 65 in the 1960s, to now, more than 86, according to BBC. The number of people living to 100 years and beyond has also doubled over the last decade.

The other five Blue Zone locations are Loma Linda in California, Nicoya Peninsula in Costa Rica, Sardina in Italy, Ikaria in Greece and Okinawa in Japan. Interestingly, these locations are not known to be as fast-paced, vibrant cities like Singapore. They are more rural and country in nature with smaller populations and the tempo of life tend to be more relax. Hence, for Singapore to be named as a Blue Zone is really remarkable and we must have gotten the fundamentals and the policies right to achieve these excellent public outcomes.

Madam, the second article that I would like to share is this report by Henley Passport Index, that names Singapore passport as the most powerful passport in the world. It must have provided Singaporeans a lot of convenience to be able to have access to so many countries and not to mention, the sense of pride to carry our red passport. Again, we must have managed our foreign relations well to earn all these visa-free accesses and also that these countries do see Singaporeans as valued and desired tourists or visitors.

Thirdly, I would like to mention that the Singapore Public Service has recently also come out on top, in terms of performances among the 120 public administrations around the world; which included many developed countries. This is the index produced by the Blavatnik School of Government at the University of Oxford, which rates public services in four areas: strategy and leadership, public policies, national delivery and people and processes. So, congratulations to our Public Service.

Madam, there are, of course, other accolades given to Singapore, such as Singapore being the country with the highest home ownership in the world and Singapore being among the most competitive economy globally. However, in the interest of guillotine time, I would just mention one more international accolade that Singapore has just received last month, which cited that the Government of Singapore as having, "a well-defined budget framework with clear fiscal objectives". This is the report by the Organisation for Economic Cooperation and Development (OECD) on "Budgeting in Singapore", which also mentioned Singapore as having an international reputation for fiscal discipline in budgeting and policies that has help ensure long-term fiscal sustainability.

Madam, this being the last Committee of Supply (COS) for this term of Government and the Ministry of Finance (MOF) is the Ministry that is responsible for stewarding our fiscal resources and ensuring effectiveness of public outcomes and governance are achieved, can I ask the Minister the following questions?

Firstly, if the Minister could recap on how the country has fared in key areas of national interest and whether the required public sector outcomes have been achieved? We have these international accolades, but it is good to also hear the inside view of how we see the Public Service has fared and the public sector outcomes as well.

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Secondly, does the Public Sector develop programme evaluation capabilities so that we can further enhance effectiveness and governance in the Public Service?

Sir, I move to environment sustainability. As we transition to a greener and more sustainable future, can I ask the Minister a few questions in relation to how the MOF agencies are addressing issues of climate change and environmental sustainability?

What are public financing levers to steer Singapore towards our net-zero commitment? Does the Government take environmental sustainability considerations into account when procuring goods and services, and can the Government do more?

Businesses are still trying to make the green transition and may not be able to meet the various environmental sustainability requirements. Can I ask what support is the Government providing to help these businesses? Has the Public Sector adopted green budgeting and consider environmental sustainability in the management of public finances?

Finally, has the Singapore Green Bond Framework been kept abreast and updated given the recent developments in the sustainability landscape?

Question proposed.

Enhancing Economic Competitiveness

Mr Liang Eng Hwa: Madam, besides ensuring fiscal prudence and sustainability, MOF's other missions include fostering a regulatory environment conducive to businesses as well as drive synergies across the whole-of-Government (WOG).

[Mr Speaker in the Chair]

A number of key business regulatory statutes come under the purview of MOF, such as the Companies Act, the Business Registration Act, the Accountant Standards Act, the Limited Partnership Act and others. The Ministry also set the policies for procurement, custom regulations and other business regulations. As such, MOF plays a central role to promote a pro-enterprise regulatory environment across the whole-of-Government.

One immediate quick win areas to look into can be the simplifying of rules across the Government. For example, can the MOF agencies look to further streamline existing rules for businesses, so as to reduce the compliance burden of businesses in relation to areas, such as taxation and disclosure?

Reducing the burden of compliance can reduce time and costs and make doing businesses in Singapore more cost effective. The areas of concerns from businesses that I pick up are lengthy processes involved and the time taken to go through these processes when doing business with the Government.

Can the Minister update what have the MOF agencies been doing to improve processes and facilitate better experiences transacting with the Government? Are there plans to leverage digital means or generative artificial intelligence (Gen AI) for greater efficiency and better connectivity?

In the area of procurement, I urge the Ministry to keep working on making procurement opportunities more accessible to businesses, especially to the small and medium enterprises (SMEs). SMEs may not have the resource setup to participate in Government tenders that are onerous and require tedious paperwork. For smaller-value contracts, could the Government look into a lighter tender process, lowering the bar to participate, and a tender process tailored more to smaller enterprises.

Another group of businesses that I would like to bring to attention are startups with innovative solutions. They often find it harder to participate in Government tenders due to the various administrative requirements and the need for track record. So, can MOF look into a new procurement initiative that makes it easier for the agencies and businesses to work together to pilot and to scale innovative solutions?

Finally, I would like to also ask the Minister for a progress update on efforts to improve the promptness of payment to vendors, an issue that I raised before in previous COS debates.

Land for Public Housing

Mr Pritam Singh (Aljunied): The headlines last month rang loud and clear. By the end of 2025, Housing and Development Board (HDB) resale prices are set to rise for a record 23-quarters. That will see close to six consecutive years of resale prices going up and further up. HDB resale prices jumped 12.7% in 2021, 10.4% in 2022, 4.9% in 2023 and 9.7% in 2024. The projected increase for 2025 means that resale HDB prices would have risen since early 2020 by a cumulative 58%.

In April last year, the Minister for National Development said that the Government expected the property market to continue stabilising. He noted that resale HDB prices had risen less in 2023 at 4.9%, compared to 10.4% and 12.7% in the previous two years. At that time, which was a mere 11-odd months ago, the Minister attributed the slower price rise, which I should point out is still a significant price rise, to HDB having caught up on construction delays and a ramping up of Build-To-Order (BTO) flat launches.

Based on what the Minister said, a reasonable expectation would be for price rises to have slowed down further in 2024. But then, the news in January this year was that in 2024, HDB resale prices climbed the steep 9.7%. This was despite cooling measures being introduced in August last year, such as lowering the loan to valuation limit for HDB housing loans from 80% to 75%.

On another front, 2024 was an unusual year for Government Land Sales (GLS) sites for non-HDB use. Last year, the Government rejected three tenders for three private residential sites because it deemed the sold bids for them to be too low. Partly because of this, land betterment rates for non-landed residential use sites dropped by an average of 5.4% for the half-year from September 2024 to February 2025.

The Chief Valuer (CV) reviews the Land Betterment Charge (LBC) rates twice a year in March and September, and the rates can be a barometer of the Government's assessment of land values in recent land sales. The CV's work on land not sold for HDB purposes is highly granular. There are individualised LBC rates that reflect market sentiment for each of the 118 geographical areas in Singapore. For example, in March 2024, LBC rates were cut 19.2% for non-landed residential use in Tanglin, but increased 14% in the West Coast and Clementi areas. These numbers mirrored the differing market sentiment between suburban and non-suburban sites over the period from September 2023 to March 2024.

In contrast, the public knows far less about how land is priced for HDB BTO flats. What we do know is that land price for BTO flats takes reference from resale HDB prices. With a 58% increase in resale flat prices from 2020 to 2024, there is inevitably a serious concern about whether land for HDB BTO flats is priced sustainably, or if ever-growing subsidies are going to be needed in future to make HDB flats affordable.

It has been stated that the HDB pays fair market value, which is determined by the CV and that the land for public housing is lower compared to private housing in the same area. However, there is no information available to the public about land prices for HDB flats, similar to the chart like the 118 Zone LBC chart, which suggests how the CV adjusts the fair market value of HDB BTO flats in response to rising HDB resale prices. There is a public demand to better understand and unpack the fair market value determined by the CV for land reserved for HDB.

Sir, what is stopping the Government from lifting the veil on this aspect of the CV's work? With well over 80% of all land in Singapore belonging to the state, there is a deep interest in determining the sustainability and affordability of land prices for BTO flats for current and future generations of Singaporeans. Can the Minister tell us how the CV discounts the land sold to HDB beyond the general explanation of market principles? How is this discount derived and what is its basis?

Would the Government release zone-specific data on land values for land reserved for BTO flats over time? In connection with this, how does the Government assure the public and this House that it is not raiding the reserves when it prices land for BTO flats, when the only explanation the public relies on is its reference to the unknown fair market value for HDB land? Could the Minister please address this too?

Progressive Wage Credit Scheme

Ms He Ting Ru (Sengkang): Mr Chairman, the Progressive Wage Model (PWM) has benefited many lower-wage Singaporean workers. We support this as workers deserve to be paid living wages. However, I have some questions today about the long-term sustainability of the Progressive Wage Credit Scheme (PWCS) in the context of our overall economy and what MOF's view is, given the Ministry's role in managing Singapore's fiscal policies prudently.

Since the Wage Credit Scheme (WCS) was started in 2013 as a temporary three-year measure to support PWM, it has been repeatedly extended and expanded. This has now evolved into PWCS with an allocation of $9 billion from 2022 to 2026, to this temporary measure first introduced 12 years ago. The original WCS co-funding of 40% was supposed to end by 2017, but was instead extended multiple times.

Similarly, PWCS co-funding increased from plan levels of 30% to 50% to 45% to 75% in 2022 to 2023. In 2024, instead of decreasing to 15% to 30%, it was raised to 30% to 50%. I am concerned about the ongoing extension of what was presented as temporary support.

In its Budget 2025 wish list, the Singapore National Employers Federation asked that the co-funding of wage increases continue beyond 2026, suggesting a growing dependency on these subsidies. How did our economy get to the point where our businesses rely so on such wage support? This goes beyond labour policy and I hope for more clarity on how MOF intends to structure an exit plan with firm targets that takes into account a whole-of-economy approach.

A clear exit plan from PWCS has to also take into consideration the overall structure of economy, projections of where we are headed and contain the right ingredients to allow businesses and our overall fiscal structure to remain sustainable in the long run. This will include having a hard look at our overall cost structure beyond labour, including our land policies.

With economic disruptions becoming more frequent, will we keep returning to wage subsidies whenever sectors face challenges? What signals does this send to businesses about long-term planning and productivity investments?

I would like to ask: one, what matrix will determine when these temporary wage subsidies will be phased out; two, has MOF analysed how these subsidies might affect employers' incentives to invest in productivity improvements, and not just in the sense of skills upgrading, but also in capital goods investment; and three, what is the Government's transition strategy towards sustainable wages that align with our broader economic objectives?

While we support wage improvements for workers, we need greater certainty about how these temporary measures fit into Singapore's long-term fiscal and economic policy. Both workers and businesses deserve a clear roadmap for the future beyond the current repeated ad hoc extensions of the supposedly temporary measures.

Responsible Governance and Incentivising Efficiency

Mr Saktiandi Supaat (Bishan-Toa Payoh): Chairman, our fiscal headroom will get smaller as Government expenditure is projected to increase while our revenues remain uncertain in light of the status of BEPS 2.0 and heightened geopolitical and trade tensions affecting investment returns. We can afford the projected level of spending up to 2030 thanks to sound and timely fiscal measures made. How is MOF enhancing efficiency, fiscal prudence and responsibility in the Budget process?

We are not the only ones feeling this pressure. The United States (US) has created a Department of Government Efficiency headed by Mr Elon Musk to treat government inefficiency. The United Kingdom (UK) Chancellor has announced that the government departments will be asked to identify 5% efficiency savings to crack down on government waste.

To what extent does MOF expect all Ministries and Statutory Boards to improve budget efficiency year-on-year? How can MOF ensure more collaborative initiatives across different Ministries to improve the coordinated delivery of Government services? How often does the MOF undertake resource reviews and transformation on a whole-of-Government basis in order to sustain a healthy fiscal position?

The Chairman: Mr Louis Chua, you may take your three cuts together.

Sovereign Wealth Fund Transparency

Mr Chua Kheng Wee Louis (Sengkang): Chairman, the reason for my cut on Sovereign Wealth Funds (SWF) transparency is simple. We must demand better standards from the investment managers managing our reserves and take the lead in transparency, accountability and governance standards, as these involve the stewardship of public monies for all Singaporeans, not just its funds' direct shareholders. We should aim for transparency in both our public and private market investments, regardless of whether it is held by Government of Singapore Investment Corporation (GIC), Temasek Holdings, the Monetary Authority of Singapore (MAS) or even the Central Provident Fund (CPF) Board for that matter.

To many market observers, the gold standard, as in most things SWFs-related, is the largest bank investment management – Norway's sovereign wealth fund. When it comes to transparency, they publicly share a whole suite of details regarding their operations from individual investments, returns before and after fees, even their voting records.

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Their chief executive officer (CEO) has a popular podcast, In Good Company, where he interviews portfolio companies and prefaces every interview openly discussing fund ownership details. They prove you can be transparent and perform well.

On transparency, however, Singapore's sovereign funds are falling short. Unlike Temasek Holdings, GIC does not even share annual performance figures. I do not think they assess the performance of the third-party fund managers they are invested in merely on a five-year basis.

I understand the rationale of not disclosing its assets on the management, but hiding performance figures does not make sense and merely raises questions.

There is another dimension to transparency. I notice that Temasek Holdings is invested in not just private markets, but many of these investment structures are also increasingly complex, perhaps a reflection of the investment landscape today. An example is that of continuation funds. A Business Times article dated 12 October 2024 was titled, "Temasek CIO Gets Behind Asset-Shuffling Funds Snubbed by Others". It further goes on to say that the chief investment officer of a Singaporean state-owned investor voiced unusual enthusiasm for continuation funds in which private equity managers shift hard-to-sell assets from an older vehicle into a brand new one. The repackaged assets are then offered to investors, such as Temasek, known as limited partners.

Chairman, these harder-to-value investments need more oversight, not less. Yet, they are becoming less transparent even as investments get more complex.

In accounting, Level 3 financial assets require significant use of internal models and assumptions to estimate fair value as reliable market data is not readily available. Hence, listed companies have to disclose in their annual reports details of valuation methodologies and the assumptions made in their financial statements.

There is a glaring contradiction in all of these, in that even as the Government and Temasek demand good corporate governance from the companies that they invest in, they are secretive about their own performance and remuneration matrix.

Chairman, we must demand better standards from the investment managers managing our Reserves. Any attempts to deflect this via operational independence must be rejected.

GST Concession to Hotels and Restaurants

Singaporeans compare prices to get the best value for money for their purchases and to better manage the cost of living. According to the 2023 Household Expenditure Survey, about 16% of Singaporeans' monthly expenditure is on food and beverage (F&B) services. Unfortunately, it is more complicated to compare prices when eating out than when making other retail purchases.

While some F&B outlets display all-inclusive prices, others do not include service charge and Goods and Services Tax (GST) in the menu price. Their inconsistency can cause frustration when the customer sees the final bill, which is almost 20% higher than the menu price. It also makes it harder for customers to compare prices across different F&B operators.

Tourism is a key driver of our services industry. I have, in the past, often heard feedback from my foreign friends about how they are shocked by the final prices of their F&B purchases and their taxi rides compared to the prices they were initially expecting.

In the era of ride hailing apps, the shock of seeing a myriad of additional charges added to the flag-down fare is now much less likely. But when it comes to F&B establishments, the sticker shock remains.

Currently, the Inland Revenue Authority of Singapore (IRAS) grants hotels and F&B outlets an administrative concession which allows them to display prices ex-GST if they also impose a service charge. This differs from other retail sectors, where the price displays must include GST. IRAS' rationale for this concession was to help restaurants manage operational challenges when waiving service charge for takeaway orders.

I would like to ask the Minister when this concession was last reviewed and whether it is still relevant today. Given the prevalence of electronic menus, it is very straightforward for restaurants to display both dine-in and takeaway prices. Alternatively, if they use paper menus, they could simply give a 10% discount for takeaway orders instead of having 10% for dine-in orders.

Some restaurants do display all-inclusive prices, but many may be reluctant to do so for fear that they will be seen as more expensive than their competitors.

In the interest of ensuring a level playing field between F&B operators and improve consumers' dining experience by having greater price transparency, I urge IRAS to review this concession and to require the display of all-inclusive prices as I believe the overall real benefits to the public outweigh any perceived cost to businesses.

Rethinking CDC Voucher Scheme

Lastly, on rethinking the CDC Voucher Scheme. In my 2024 and the recent 2025 Budget debate speeches, I highlighted that while the CDC Vouchers Scheme has provided some support for Singaporeans amidst the high cost of living, the support rendered is broad-based, with low-income households receiving the same payout as that of a millionaire CEO. Moreover, users may face difficulties when redeeming their CDC Vouchers due to its fixed denomination and expiry dates.

In lieu of the CDC Vouchers Scheme, the Government could leverage the existing Community Health Assist Scheme (CHAS), Merdeka Generation and Pioneer Generation schemes to provide discounts for cardholders at merchants, hawkers and supermarkets that currently accept CDC Vouchers. The list of participating merchants could also be expanded to include food courts within privately owned commercial properties and pharmacies located within HDB estates. The rebate provided could vary based on the colour of one's CHAS card, with blue CHAS cardholders receiving the largest discount quantum, along with Merdeka and Pioneer Generation cardholders.

Such a programme is not new. Discounts for CHAS, Merdeka and Pioneer Generation cardholders have been offered by establishments, such as FairPrice, Unity and store holders within certain hawker centres. Under the new scheme, however, these rebates will be borne by the Government instead, in a more equitable manner.

Through this scheme, greater support will be rendered to low to middle-income households and residents compared to high net worth individuals. Furthermore, Government support could also be easily accessed by those experiencing difficulties obtaining CDC Vouchers via the appeal processes.

By expanding the CHAS, Merdeka and Pioneer Generation programme to provide discounts for daily necessities, the cost-of-living pressures faced by Singaporeans could be easily, equitably, elegantly and efficiently paid.

Foster Culture of Giving

Ms Foo Mee Har (West Coast): Chairman, I would like to declare my interest as CEO of the Wealth Management Institute, which hosts the Asia Centre for Changemakers, Asia's learning lab for impact philanthropy.

Philanthropy has always been a part of Singapore's DNA. Singapore has long provided generous tax incentives of up to 250% for donations to local charities. More recently, as part of our ambition to be Asia's philanthropic hub, Singapore introduced the Philanthropy Tax Incentive Scheme (PTIS), which offers tax benefits for qualifying overseas donations to family offices.

However, to truly cement our position as a leading philanthropy hub, Singapore must broaden its perspective on doing good beyond the traditional definition of donation and grantmaking.

Philanthropy today has the potential to catalyse social innovation and drive systemic solutions to some of the region's most pressing social and environmental challenges. Reflecting global advancements in the field of philanthropy, impact investing and venture philanthropy have demonstrated their ability to generate meaningful and scalable impact. Another example is blended finance, which strategically combines concessional and commercial capital to unlock development opportunities that would otherwise remain out of reach.

Through these innovative financing models, philanthropy is emerging as a unique asset class for social progress. With a higher risk tolerance, longer-term horizon and acceptance of below-market or zero financial returns, it is uniquely positioned to fund nascent social enterprises, de-risk high-impact ventures and bridge funding gaps where commercial capital is hesitant to engage.

By mobilising more capital through a holistic definition of philanthropy, one that includes impact investing, blended finance and catalytic capital, we can accelerate early-stage innovations in uncharted territory. Notably, this expanded approach has the potential to direct more patient and risk-tolerant capital toward climate initiatives to unlock breakthroughs in renewable energy, carbon capture and sustainable infrastructure.

Sir, given the shifts in global philanthropy, Singapore is well-positioned to lead in this space. Our strong financial and regulatory environment, coupled with our reputation as a trusted wealth and asset management hub, provides a solid foundation for mobilising capital effectively.

However, to fully realise our ambition of becoming Asia's leading philanthropy hub, we must expand our policy and partnership framework. I have three suggestions.

First, harmonise regulations and incentives for philanthropy and impact capital. Philanthropy in Singapore currently falls under three separate Ministries' policy domains: the Ministry of Culture, Community and Youth, MOF and MAS. To strengthen our position as a leading philanthropy hub, we need to review and harmonise related laws and policies to ensure greater coherence and effectiveness.

For example, existing tax incentives for philanthropy, such as PTIS and the Institution of a Public Character (IPC) scheme, apply only to grantmaking. However, as we broaden our understanding of philanthropy to include models like impact investing and blended finance, tax incentives should be extended to encourage these approaches while accounting for potential financial returns.

Similarly, while charitable foundations come under the lighter touch grantmakers regime, they still face restrictions from a charity governance framework that inadvertently prevent foundations from engaging in venture philanthropy, as an example, to scale social innovations.

Second, establish a corporate social impact benchmark. Corporations play a critical role in contributing to the communities in which they operate. For instance, India introduced a mandatory policy requiring companies of a certain size to contribute 2% of their net earnings to corporate social responsibility. Since then, this has catalysed US$6 billion into sectors, such as education, healthcare and social assistance, in India.

Singapore can learn from this, not through regulation but by establishing a corporate social impact benchmark that sets an aspirational standard for corporate giving, a desired philanthropic spending target that would encourage businesses to integrate social impact into their strategies.

Third, introduce a philanthropy alliance for action. A vibrant philanthropic hub requires a strong public-private-people coalition to shape strategic direction and drive ecosystem alignment. This coalition will provide strategic leadership and momentum to scale Singapore's role as a philanthropy hub. It could also be tasked with developing a national philanthropy roadmap, including a plan to align philanthropic capital with Asia's green financing commitments.

Singapore's Agility and Competitiveness

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Mr Chairman, Sir, Singapore's fiscal prudence has long been a pillar of our economic resilience. However, prudence must also consider opportunity cost. The time taken from ideation to budget allocation and, ultimately, project implementation represents an economic cost by itself.

To maximise impact and efficiency, can MOF, in collaboration with other Ministries, measure and streamline this process to minimise delays and ensure that promising initiatives are not hindered by bureaucracy?

SMEs and startups often face challenges in assessing Government procurement opportunities. Many SMEs and promising startups with innovative solutions struggle to participate in Government procurement due to administrative and track record requirements.

How can MOF facilitate greater SME and startup participation in Government tenders? Are there measures in place to ensure that procurement frameworks do not disproportionately disadvantage SMEs and promising startups and the Government missing out on promising solutions?

Beyond procurement, the cost of doing business in Singapore remains a key concern. Complex regulations and high compliance costs often prevent SMEs from scaling up effectively. The adage, "Time is money" could not be more apt for SMEs.

What steps is MOF taking to simplify regulatory requirements, manage compliance costs and improve overall ease of business transactions with Government agencies?

Ultimately, improving efficiency benefits both businesses and the economy as Singapore strives to remain competitive. Ensuring that Government processes are streamlined, procurement is accessible and businesses can operate with greater agility will be critical. I look forward to MOF's insights on these issues.

Embed Social Value in Government Procurement

Ms See Jinli Jean (Nominated Member): Embedding social value into Government procurement. One positive outcome from the Government Procurement framework, Whole-of-Government Period Contract and Framework Agreement (WOG PCFA) for creative services and for video and animation services, is that public sector agencies are more aware of SME creative agencies and their services.

In the same vein, I would like to urge MOF to consider formalising the embedding of social value into Government procurement framework.

The UK's Public Services (Social Value) Act 2012 requires public authorities and their supply chains to go beyond cost consideration to also consider how the public authority can make a positive economic, social and/or environmental impact through the procurement process.

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At the debate on the Motion on supporting families this February, I had suggested for the Government to consider embedding social value into Government procurement framework. Under such an arrangement, public sector agencies would have the discretion to determine their social value commitments alongside the core contract deliverables.

For instance, under the WOG PCFAs and standard procurement for creative services as well as video and animation services, public sector agencies that procure creative services or video and animation services could specify hiring, upscaling and training of the local workforce as a social value objective in the contract delivery.

This would give impetus to creative agencies working on Government projects to engage Singaporean creative freelancers, rather than to prioritise cost and thus outsource to overseas market.

Embedding local workforce upscaling as a social value objective ensures that Singaporean creative freelancers have a safe space to unlearn and relearn new skills and technology. This matters because many Singaporean creative freelancers are battling unprecedented levels of offshoring and substitution of creative labour with generative AI. In response to fellow Member Usha Chandradas' Parliamentary Question (PQ) on the growth prospects of the creative economy, the Ministry of Culture, Community and Youth replied, "There are many opportunities for creative practitioners, especially if they are able to capitalise on growing demands and trends, such as leveraging technology and working with regional and international partners to reach audiences beyond Singapore. Thus, the social value outcomes for the public sector agencies could be supporting Singaporean creative freelancers to build expertise and track record to pitch for higher value creative work in and outside of Singapore."

Likewise, Government schools could uplift the prospects and capabilities of Singaporean freelance coaches and instructors delivering co-curricular activities (CCA) to students, if schools, too, embedded similar social value objective of hiring, upscaling and training local workforce in the procurement of CCA instruction. To ensure that enhancement of social values balanced against other priorities, such as achieving value for money and delivering the core contract deliverables, MOF could guide public sector agencies to engage with potential suppliers on how best to embed social value objectives into the contract delivery, including the tangible and measurable conditions of the contract to be monitored throughout contract delivery.

Embedding social value in Government procurement can be a game changer to strengthen the employability of Singaporean freelancers who are less resource endowed. They need a supportive environment to acquire and sharpen their edge to compete in a fast-changing landscape. Thus, would the Minister consider strengthening the Government's positive impact by embedding social value objectives, such as supporting hiring of locals, upscaling and training into the Government procurement framework?

The Chairman: The next Member is not present. Ms Mariam Jaafar.

Government Working with Startups

Ms Mariam Jaafar (Sembawang): Singapore's next bound of economic growth can come from strengthening our position as a global hub for startups and innovation. Government Ministries and agencies can support this by employing the services and products of startups and also benefit from their innovations. However, startups face a lot of challenges in securing Government business. Beyond hackathons, pilots and proof of concepts, the reasons are quite understandable. Startups need more hand-holding, because they are smaller and have less management depth.

There is also always a question of the longevity of a startup as a supplier. Government procurement is often stacked against younger firms, such as by asking for long track records, or in new innovation areas, procurement officers or buying departments may not yet know enough to define the procurement parameters intelligently. This feels "lose-lose" for the startups and the Government.

How can we improve this? What form of change management is the Government doing to upscale and change mindsets of Government Ministries and agencies on working with startups? How can we prepare startups to serve Government clients?

SME's Participation in Government Tenders

Ms Jessica Tan Soon Neo (East Coast): Mr Chairman, participating in Government tenders present both opportunities and challenges for our SMEs. Tender Lite was introduced by MOF and implemented in April 2024 to make it easier for companies, especially SMEs, to bid for Government contracts higher than $90,000 and not more than $1 million.

To date, can more information be shared on how many Tender Lite contracts have been awarded to SMEs since the implementation? Projects involving emerging and advanced technology innovations are valuable opportunities for startups and smaller businesses with innovative solutions to participate in. However, these companies often face challenges in meeting the financial requirements for Government tenders and providing a proven track record.

For such projects, will MOF consider measures to enable these companies to participate and in support of innovation? Cash flow is critical to SMEs in managing their operational expenses. Suppliers for Government contracts are able to submit invoices electronically to track and receive notifications on payment. Has this helped to ensure timely payment to suppliers? Can MOF provide an update on what percentage of payments are made on time to suppliers who participate in Government tenders?

The Chairman: Minister Chee Hong Tat.

The Second Minister for Finance (Mr Chee Hong Tat): Mr Chairman, I thank Members for their questions and suggestions. The points made cover three key themes.

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

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

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

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

The Inter-Ministerial Committee for Pro-Enterprise Rules Review, led by Deputy Prime Minister Gan Kim Yong, was formed in April 2024 to further enhance regulatory efficiency and reduce compliance costs for businesses. Let me share some examples of what MOF agencies are doing to support this important area of work.

First, IRAS will extend the grace period for businesses to begin charging GST from one month to two months. Currently, businesses expecting to cross the one 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. The change will give SMEs more time to prepare. It will take effect from 1 July 2025 and benefit 1,500 businesses every year.

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

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.

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 benefited over 100,000 self-employed commission agents. IRAS plans to bring more intermediaries on board. It has been encouraging and engaging private hire car and taxi operators, as well as the delivery platforms, and I urge these intermediaries to come on board as soon as possible.

We have also been simplifying rules where we can. One example is the Fixed Expense Deduction Ratio (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.

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, and the utilisation has been high, which shows that this is a good option for many of our workers. We will be consulting stakeholders on how the FEDR can be expanded to support more small businesses and self-employed persons.

We are reducing and removing regulations where possible. IRAS will drop the requirement for second-hand goods' dealers to seek approval before using the GST gross margin scheme. 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. 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. This will streamline the compliance process, particularly for new or smaller second-hand goods dealers.

Sir, the Accounting and Corporate Regulatory Authority (ACRA) is also actively streamlining processes for companies. There is a requirement today for companies to disclose their directors' interest in shares or debentures in the director's statement. 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.

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

These are part of the ongoing efforts to improve our rules and processes and, in the interest of time, I am not able to share the full range, but this is an ongoing work and we will continue to engage businesses and also our frontline officers, our colleagues, solicit their ideas to jointly improve our regulatory landscape. This approach is also in line with the spirit of Forward Singapore (Forward SG). 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.

Sir, our government spending over this term has delivered good outcomes for Singapore, as detailed in the biennial Singapore Public Sector Outcomes Review reports. We are continually looking at how we can transform and improve the way we operate.

Mr Saktiandi Supaat asked about resource reviews and improving budget efficiency. Our budgeting framework is designed with efficiency in mind. We regularly review the block budgets for Ministries.

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

For example, we saved $2 billion and 44 hectares of land with the four-in-one East Coast Integrated Depot, which combines three Mass Rapid Transit (MRT) depots and one bus depot. 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% for the last three years.

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.

We also created the whole-of-Government Public Service Transformation Budget in 2022. This provides agencies seed funding to pilot innovative and transformative ideas if the proposals involve interagency collaboration.

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. 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.

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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.

Sir, 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 Prime Minister always reminds us, it does not mean that today, we are perfect. There is still room for improvement and we will work hard to make those continuous improvements. This is something that we will continue to do.

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

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. 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.

This practice has now been in place for three decades, and we last reviewed it again in 2022. Sir, 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.

Ms He Ting Ru asked about the Progressive Wage Credit Scheme (PWCS). Sir, 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.

The PWCS is not a broad-based subsidy for all companies. To get PWCS, the employer has to pay their low-wage workers a wage increase. Then, they can qualify to get this co-funding from the Government. So, the purpose is for the Government to co-fund and to share some of the costs of helping our lower-wage workers to earn a higher income. Because we want employers to pay their lower-wage workers a higher salary, we share with the employers part of this cost of paying the lower-wage workers a higher salary. And this is an important part of our social compact, which I think Ms He will agree with. I do not think Ms He is suggesting that we should stop providing support for employers, especially our SMEs. I am quite confident she is not saying that.

If I look at the other schemes that we have in place to improve productivity, which I also agree with Ms He is an important priority.

So, this is not in lieu of those other schemes. 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. But on productivity, we have many other schemes that we will continue to work through our trade associations and chambers, our industry associations with our companies, as well as with our Labour Movement, through the Company Training Committees, to be able 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 Assoc Prof 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 do agree with Ms He's point that the two, over time, need to move in tandem. That is more sustainable.

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

Sir, as Prime Minister has 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. This allows the Government to follow through on our commitments, without borrowing or using more of our reserves for immediate needs and recurrent spending. This fiscal discipline of maintaining a balanced Budget has worked well for Singapore and we must strive to sustain this.

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

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

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

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.

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. 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. And that is why during the Prime Minister's Office's COS earlier on MAS, 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.

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.

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.

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 portfolios and risk adjusted returns which measure investment returns relative to the risk taken.

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, and what is key is that our entities continue to navigate the uncertainty while maintaining a disciplined long-term approach to generating sustainable returns.

Stewardship and accountability are key principles that we abide by in managing the reserves. We have benefited from the careful work of previous generations, and this Government believes that we must continue to maintain the same fiscal discipline and provide a strong financial foundation for both current and future generations of Singaporeans.

Mr Speaker: Ms Indranee Rajah.

The Second Minister for Finance (Ms Indranee Rajah): Thank you, Mr Chairman. Before I do my reply, I just wish to seek a clarification from Mr Louis Chua so that I can respond to his cut properly. In his cut, as I understand it, he mentioned CDC Vouchers being applicable to all. And then, he went into a scheme where you would have benefits according to CHAS.

But what I was not sure was whether he was calling for the CDC Voucher Scheme to be stopped completely, or whether he is saying that the CDC Voucher Scheme should be limited only to the low-income, because in the gist of the cut that he filed, he had said that rather than giving CDC Vouchers to all, we should return to the roots of CDC Vouchers, which was meant to support low-income families. So, I just was not sure of what Mr Chua's position was.

The Chairman: Mr Louis Chua.

Mr Chua Kheng Wee Louis: Chairman, just to respond to Minister's questions. Indeed, I also mentioned in the Budget speech I gave earlier that that was the evolution of the CDC Voucher Scheme. Originally, it was lower-, middle-income households. And then, we went and basically gave it to all households.

So, what I am proposing here is to make use of what we already have, in terms of the CHAS card kind of requirements, such that the scheme from hereon evolves into one focused on where we started out – be focused on the lower-, middle-income households and those who qualify for these additional subsidies.

Ms Indranee Rajah: Yes, Mr Chairman, that is what I am trying to ascertain. So, is Mr Chua saying, stop the CDC Vouchers and then move over completely to this new scheme? Or is Mr Chua saying, keep CDC Vouchers in its present form and then, in addition, have this new scheme.

Mr Chua Kheng Wee Louis: Chairman. I think that that is an option which that the Ministry can consider. Whether or not we want to go back to the original CDC Vouchers; I am not sure how exactly did the original CDC Vouchers select the Singaporeans who are eligible. But the whole idea is that this is another option in which we can go back to that sort of system, whereby the so-called CDC Vouchers are given to those who are in the lower-, middle-income households.

Ms Indranee Rajah: Mr Chairman, I am not sure that exactly answered my question but that is alright. I will deal with it when I come to the reply.

Mr Chairman, Mr Liang Eng Hwa asked what MOF agencies are doing to help prepare Singapore for climate change and environmental sustainability.

Singapore is a low-lying island state. It is in our interest to support global efforts to deal with climate change. We have committed to a target of net zero emissions by 2050. This is not a light undertaking and requires a whole-of-nation effort. MOF is committed to doing our part.

Last month, MOF published an occasional paper explaining how sustainability considerations are factored into various stages of the Government's budgeting cycle. This includes a commitment of over $10 billion in the decade leading up to FY2030 to support the Singapore Green Plan. We have developed new fiscal tools, like green bonds under the Significant Infrastructure Government Loan Act, to catalyse our green financing market and support our longer-term spending needs for environmental sustainability. MOF has also established the Singapore Green Bond Framework, the second edition of which was released last month.

We are also incorporating sustainability considerations into government procurement. Environmental sustainability considerations are already incorporated into over 60% of government procurement by contract value. We aim to extend this to all government procurement by 2028, in a manner that keeps pace with industry readiness and international developments.

Participating in green government procurement is an opportunity for our businesses to build the track record to meet demands of buyers, investors and consumers who are seeking greener goods and services.

The Government will be introducing mandatory climate-related disclosures in a phased approach. To help companies ease into the new reporting requirements, they can tap the Sustainability Reporting Grant and the SME Sustainability Reporting Programme to kickstart their journey.

ACRA is also taking steps to grow sustainability reporting and assurance capabilities in Singapore, and build a robust pipeline of professionals in this area. This will also create more good job opportunities for Singaporeans.

Ms Foo Mee Har and Mr Louis Chua spoke about the need for a strong social compact. Indeed, Forward SG was an exercise in refreshing our social compact. The insights gained from the exercise have found their way into many of the measures in the Budget.

In his Budget speech, Prime Minister spoke about how the Government is fostering a more caring and inclusive society, one where every Singaporean feels valued and supported.

Inclusivity cannot be created through government policy interventions alone. It needs the collective effort of all of society. We will spur collective efforts in three ways.

First, we will continue to encourage individuals and businesses to give back to society. We offer 250% tax deductions on qualifying donations made by individuals and corporates. Under the Corporate Volunteer Scheme, corporates can also receive 250% tax deductions on wages and qualifying expenses when employees volunteer, provide services, or are seconded to Institutions of Public Character.

Ms Foo suggested going further to encourage corporate giving, taking inspiration from India's 2% mandatory corporate social responsibility spending law. We agree with the intent of Ms Foo's suggestion, which is to encourage corporates to contribute. However, we are doing so in a different way.

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Through tax incentives, we encourage and support corporate philanthropy and allow businesses to contribute based on their own corporate values and business models. Requiring profitable companies to contribute a certain percentage of profits to corporate social responsibility would take the decision and initiative out of the hands of corporates and be contrary to the spirit of philanthropy.

We also provide donation-matching grant schemes, such as Tote Board's Enhanced Fund-Raising Programme (EFR), to amplify the impact of donations.

During the pandemic, we raised matching support under the EFR from 20% to 100% to galvanise community giving. As the Prime Minister announced at Budget 2025, the Government and Tote Board will provide an extension of dollar-for-dollar matching for FY2025 in support of SG60. This enhanced support will gradually taper, reverting to pre-COVID-19 levels in FY2027.

Through the EFR, SG Gives and other initiatives, the Government and Tote Board will set aside more than $600 million in matching funds to strengthen our spirit of giving. As we celebrate SG60, I hope Singaporeans will reflect on how far we have come together and donate generously.

Second, the Tote Board will allocate resources to support collaborations amongst Singaporeans who use their time and talent to uplift the vulnerable.

The Tote Board's Enabling Lives Initiative (ELI) Grant supports community partnerships that benefit persons with disabilities. Recently, a team of researchers, engineers, physiotherapists and social workers used the ELI grant to develop a device that translates minute finger movements into software controls. It enables persons with muscular dystrophy to use smart devices even in advanced stages of their condition. The product has tested well and the team is planning to scale up its deployment.

To support more such partnerships, Tote Board has committed a further $23 million to the ELI Grant until FY2028.

Third, we are strengthening impact measurement capabilities across the non-profit ecosystem to maximise the social impact of our grants.

Tote Board will onboard all new projects onto its Impact Measurement Framework by the end of FY2025.

Tote Board is also collaborating with the National Council of Social Service to set up a data hub to help the social sector move towards evidence-based interventions. The data hub will gather impact evaluation data and provide common standards that more than 500 social service agencies, funders and the Government can use to measure outcomes.

These efforts will allow Tote Board, as a grant-maker, to optimise resource allocation and spur the social sector towards greater effectiveness.

I come now to Mr Louis Chua's cut. It still was not quite clear to me whether he was saying to do away with the CDC Vouchers or not. In the original gist of the cut, he suggested that it should only be limited to the lower-income, but when I sought clarification, it was not quite clear. I will just take it at face value.

First, many Singaporeans remain anxious about cost-of-living pressures. Such concerns and anxieties are not limited to lower-income households. Recognising this, the Government intentionally designed the CDC Vouchers Scheme as a broad-based measure to provide support and assurance for all Singaporean households.

It initially started out as a small scheme for the lower-income, but recognising these cost pressures on all households, something which has been echoed in this Chamber by many Workers' Party speakers, the Government extended it to all households.

This is not to say, however, that we do not have other schemes which are targeted.

I note Mr Chua called to redesign a scheme, although it is not clear whether this is in addition to CDC Vouchers or not, to provide more targeted support for daily necessities. He referenced the Blue and Orange CHAS cards as a way of triaging or indicating who would be eligible. I see that Mr Chua has drawn inspiration from the CHAS Blue and Orange cardholders' scheme that NTUC FairPrice has launched and which takes effect, I think, in the first quarter of 2025. The National Trades Union Congress (NTUC) is doing that.

But the fact of the matter is that the Government already has in place a comprehensive system of targeted support in which the lower-income receives much more.

Under the enhanced Assurance Package and the permanent GST Voucher Scheme, households with less means can get more cash transfers as well as larger rebates for utilities, and service and conservancy charges.

On top of these, the Prime Minister increased the rates for ComCare assistance schemes in this Budget to better support lower-income and vulnerable families with basic living expenses. We also recently enhanced Workfare and Silver Support to provide targeted structural support to vulnerable groups. These include lower-wage workers and seniors with low incomes in their working years who now have less savings in retirement.

If one looks at the system of government subsidies and transfers as a whole, you will see that the Government has put in place a progressive system that provides more for those with less. The Prime Minister just showed earlier a chart in his round-up speech a couple of hours ago where, in short, everyone benefits from government spending, but the lower-income and the vulnerable receive more.

I will now turn to the Leader of the Opposition Pritam Singh's cut. Mr Singh wanted to know why there is no information available to the public about land prices for HDB flats, similar to the 118-zone Land Betterment Charge (LBC) Table of Rates, and how the Chief Valuer (CV) assesses the value of land purchased by HDB to build flats.

Mr Chairman, there are two parts to his cut: first, the comparison to the LBC Table of Rates; and second, how the CV assesses the value of the land. I will deal with each in turn.

First, the comparison to the LBC Table of Rates (LBC TOR) is misconceived. The general principle is that rates or valuations are made known to parties who would have to pay the fee or price.

The LBC is a tax payable on the enhancement in land value arising from modifications landowners make to their land. Any landowner can make this request to modify their land, such as to intensify the use of the land, and this is subject to approval by the Urban Redevelopment Authority or Singapore Land Authority. Following this approval, they would have to pay the LBC.

There are several hundred LBC transactions in any given year. For ease of tax administration, we have a Table of Rates (TOR) instead of valuing each transaction individually. This TOR is made public so that the parties who need to make payment know how much they have to pay.

However, the CV could also do a site-specific, or what we call a spot, valuation of the land value enhancement for each case. This happens if the landowner opts for it for precision or if the LBC TOR is not applicable, such as when the current or proposed new use do not fall within a comparable use group within the LBC TOR.

For this spot valuation, the CV would use established valuation methodologies consistent with how she values any state land for sale. In this instance, the spot valuation outcome is made known to the requesting party as the potential paying party but not to the general public at large.

The valuations for state land purchased by HDB are all spot valuations because there is only one buyer – the HDB. The valuation outcome is made known to HDB as the paying party. It is not necessary to put out a public table of rates like the LBC TOR as there are no other buyers for these sites.

In all three instances, whether it is the LBC TOR, the spot valuations for landowners or HDB, the CV uses established valuation methodologies.

Let me now deal with the second part on the valuation of land sold to the HDB.

Mr Singh asked how the CV discounts the land sold to the HDB. Again, this question is misconceived. There is no discount. HDB pays fair market value for state land. The fair market value is determined by the CV using established valuation principles. This approach would be no different from that of other professional valuers.

The normal approach is to reference comparable transactions. Private housing transactions would not be a suitable reference as public housing has restrictions, such as more stringent eligibility criteria. Hence, for public housing land, the methodology takes into consideration relevant resale flat transactions and site-specific attributes.

So, for the reasons I have just explained, the fair market value of land sold for public housing will typically be lower than the fair market value of the same land if it were to be sold to a private developer for private housing.

This is not a discount. It is the fair market value of land intended for the purposes of public housing. One must not confuse the two concepts.

Sir, our approach of paying fair market value for land, including land sold to the HDB, helps maintain our reserves for the benefit of all Singaporeans. By putting the fair market value of land into the reserves, we preserve the value of our reserves.

The financial proceeds of the sale are invested to grow them for the benefit of Singaporeans. Fifty percent of the investment returns on our reserves supplement the annual Budget through the NIRC.

This careful approach of managing our reserves strikes a balance between the needs of current and future generations of Singaporeans.

Mr Singh also made a reference to BTO flats. He said, "What we do know is that the land price for BTO flats take reference from resale HDB prices. With the increase in resale flat prices for 2024, there is inevitably a serious concern about whether land for HDB BTO flats is priced sustainably or if growing subsidies are going to be needed in the future."

So, that is the question of the price of the BTO unit, not the price of the land that HDB purchased. That is a separate concept. We have actually answered this many times before, but let me just do a very quick summary.

The issue of land costs should not be conflated with BTO affordability. The land cost is the amount paid by HDB for the land. That is different from the flat price, which is what the BTO flat buyer pays HDB for the unit.

BTO flat pricing is based on affordability, not cost. And we have explained this many times before. HDB first establishes the market value of the flats by considering the prevailing market conditions, the prices of comparable resale flats nearby and the individual attributes of the flats. It then applies a subsidy to ensure that BTO flats are affordable for Singaporeans across different income levels. On top of this, HDB provides housing grants to support eligible first-time buyers, with lower-income buyers receiving more support of up to $120,000.

The pricing of BTO flats is therefore not based on the land cost of the flats. We do not pass land cost through to the BTO buyer.

Our approach has paid off. We have one of the highest home ownership rates in the world, with 90% of households owning their own homes. Our BTO system plays an integral part in keeping public housing affordable for Singaporeans. By pricing BTO flats based on affordability, more than eight in 10 first-timer families who collected keys for their BTO flat last year had a mortgage servicing ratio of 25% or lower. This means they were able to service their monthly mortgage repayments with their monthly CPF contributions, with little to no cash outlay.

This has remained stable in the past few years.

We have also taken steps to ensure that BTO flats remain affordable and accessible to Singaporeans. HDB will provide additional subsidies to those buying Plus and Prime flats on top of the significant market discounts that already apply to all BTO flats. And to ensure fairness, we impose tighter restrictions and a subsidy recovery rate commensurate with the extent of additional subsidies.

Over the past five years, we have ramped up our BTO supply significantly to meet Singaporeans' demand for housing. HDB is on track to exceed its commitment to launch 100,000 new flats from 2021 to 2025.

Mr Chairman, these figures speak for themselves. Our approach ensures that BTO flats remain affordable and accessible to Singaporeans. We will continue to keep it that way.

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The Chairman: Senior Parliamentary Secretary Shawn Huang.

The Senior Parliamentary Secretary to the Minister for Finance (Mr Shawn Huang Wei Zhong): Mr Chairman, I will address Members' questions and suggestions on government procurement and how we can improve the experience of transacting with the Government.

First, on procurement. Let me start by articulating our key procurement principles. Our procurement rules are designed to uphold open and fair competition, achieve value for money and manage project risks. But we need to take care that these do not result in heavy compliance costs for our businesses.

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.

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

When assessing value for money in procurement, the Government looks for optimal balance between benefits and costs. 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. However, government procurement requirements must also be non-discriminatory and fair to all businesses, in line with our international trade obligations.

Ms Jean See's objectives to strengthen the employability of freelancers is important and it can be addressed through resources and programmes the Government has put in place. These include the substantial support that we provide to all Singaporeans for their training needs, such as the SkillsFuture Career Transition Programme and SkillsFuture Level-Up Programme, which the Prime Minister covered in his Budget Speech.

Workforce Singapore (WSG) and SkillsFuture Singapore (SSG) also provide a range of resources to help individuals with their training decisions. For example, SkillsFuture Jobs-Skills Insights publications are useful references for individuals, including freelancers, seeking to reskill or upskill. Creatives in the arts sector can also look to the National Arts Council's (NAC's) Capability Development Grant. This grant can support up to 90% of the training activity or programme costs for SEPs. NAC's Art 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.

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

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.

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

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 information and communications technology (ICT) contracts, which will benefit businesses in these sectors.

Tender Lite for construction contracts will be launched in May 2025. It will benefit construction businesses. First, by reducing administrative processes. We will be simplifying the conditions for closing of accounts or conclusion of projects. 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. These changes will help to ease contractors' cashflow.

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.

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

Mr Liang, Ms Tan, Mr Chia and Ms Mariam Jaafar asked if the Government could make it easier for startups 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.

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.

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 startup. 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.

To address these concerns, MOF will introduce the Innovative Procurement Partnership. 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 of the opportunity to scale up its innovative product or service, if the pilot is successful. More details will be provided in the second half of this year.

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

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 Jessica Tan's question, in FY2023, 98% of invoices were paid within their credit terms. Furthermore, MOF will provide Government agencies with guidelines to address businesses' suggestions that include having more payment milestones and clarifying administrative processes.

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

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

Since November 2024, IRAS has expedited tax clearance for employers filing on behalf of non-citizen employees who cease employment in Singapore. Previously, employers would typically need to wait two to three days to receive IRAS' Directive to pay tax and release monies to the employee. IRAS now issues the Directive on the same day for straightforward cases, which make up 70% of filings. This will apply to about 180,000 filings a year.

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. 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.

Customs has been working with the Ministry of Trade and Industry, the Government Technology Agency and the Public Service Division to develop a new search engine using AI. It will allow traders to search for the right product codes using layman descriptions and 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. 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.

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%.

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.

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

The Chairman: Are there any clarifications? Yes, Mr Pritam Singh.

Mr Pritam Singh: Thank you, Chair. My question is directed to Minister Indranee vis-a-vis my cut. If I heard the Minister correctly, the Minister said, land for HDB developments is typically priced lower than that for private housing. Can I confirm how is the differential then determined by the CV between private housing and land for HDB?

Ms Indranee Rajah: Mr Chairman, I think what I said was that the fair market value for land intended for public housing is typically lower than the fair market value of land for private housing, because by its nature, public housing has restrictions. So, I think, what Mr Singh is asking is "what is the methodology or the workings of the CV?"

I am not privy to the workings of the CV. What I can say is the principles that she applies, which is the principles that I had elucidated earlier. I mean, it is just like when you have an MRT track. If you ask the engineer to design the rail track or you ask an architect to build something, you do not go and ask them for all of their internal drawings and so on. You look at the final outcome.

The CV is a professional. The CV applies valuation principles. Valuation, as everybody knows, is part science, part art. You need some experience, you need to make relevant adjustments. And this is the same whether it is the CV or whether it is valuers in the private sector. So, in short, what I have explained is the principles that she would apply and from site to site, it may differ, depending on locational attributes and particular characteristics of the site.

The Chairman: Ms Jean See.

7.00 pm

Ms See Jinli Jean: Mr Chairman, this is just a comment. I thank the Senior Parliamentary Secretary for his response. I appreciate that the Government provides a lot of support for training. Nonetheless, Government is actually a very big buyer of creator services.

My point is that without local opportunities for our freelancers to go through upgrading to apply this new knowledge and skills, they will actually be disadvantaged. So, my request to the Government is to consider whether we could look at the sandbox arrangement where government-commissioned creative projects can provide a platform for our local creative freelancers who have gone through the upskilling, to be hired and to build their portfolios. This is very much like career trials, where we give people opportunities to practise and then, of course, to build their portfolios so that they can move on to bigger opportunities.

In fact, our NTUC's Visual, Audio, Creative Content Professionals Association, we actually stand ready to support the Government if there is interest to do something like that.

Mr Shawn Huang Wei Zhong: I thank Ms Jean See for her suggestion. We will look into it.

The Chairman: Ms He Ting Ru.

Ms He Ting Ru: Sir, I have two clarifications for Minister Chee. I wish to clarify with the Minister that I did not make a general statement about productivity and wages in my cut. But when I mentioned productivity, that was specific to my seeking clarification from the Minister about whether there has been any analysis done about what effects the programme has had on employers investing in productivity improvements beyond skills upgrading. There was no contradiction with my colleague's Budget intervention on this, as he said that wages need to catch up with productivity gains that have already occurred. On this point, can the Minister share if this analysis has been done?

My second clarification is a point I also made in my cut. I note the Minister had said that a decision will be made in due course and closer to the time about whether to extend the PWCS beyond 2026.

As mentioned in my cut, can the Minister share with us what are the metrics used to determine whether or not to exit the programme? My concern here is that the uncertainty about whether the scheme will be extended will make businesses currently on the scheme more cautious and less keen to take action to either invest in or increase wages now and will delay any such decisions until they hear the next announcement.

Mr Chee Hong Tat: Mr Chairman, I think the Prime Minister had already explained in his round-up speech about how productivity and wages, over time, do move in tandem. And on that point, the Prime Minister had already explained very thoroughly and I would not repeat.

But I just wanted to go back to my response to Ms He earlier that we do not disagree that we need to look at how to improve productivity of firms. And that is why we do have many schemes in place to help our companies, whether is it SMEs or larger companies, or as Mr Neil Parekh suggested, how do we encourage more SMEs to work closely with the larger companies, whether it is a large local enterprise or a multinational enterprise.

And these are all different ways in which we will continue to work on with our tripartite partners to look at how we can improve productivity.

But specifically, on the PWCS, this is something that is aimed at helping employers when they increase the salaries of their low-wage workers. So, it is not a broad-based subsidy, as I explained earlier. But it is for the Government to co-share some of the cost increases that employers would otherwise have to face when they are trying to help their low-wage workers to earn a higher salary.

I hope this is in line with what Ms He said. I said earlier in my main reply to her that I am sure she is not suggesting that we should not support SMEs. I would like to seek a clarification from Ms He that she will support that objective, that we do want to support our employers, we do want to support our companies, especially our SMEs, when they are trying to do what is good for our low-wage workers to strengthen our social compact.

Mr Chairman, on the decision to extend or not to extend the PWCS, we will make that decision closer to 2026 when this scheme is due to cease. It is difficult to say we will end it if the following boxes are checked because we have to look at the situation at that time. There are a lot of uncertainties in our operating environment globally and the challenges that our companies will face; it is something which we do need to consult with our tripartite partners before making that decision. But I also do not fully agree, Mr Chairman, with Ms He's framing that just because we are providing this support for our SMEs, to help them to co-fund, not fully fund, but to co-fund some of the cost increases for low-wage workers earning a higher income, that they will then not want to improve productivity. I do not think that is the way the businesses would respond to the various schemes and incentives.

The Chairman: Mr Louis Chua.

Mr Chua Kheng Wee Louis: Chairman, just two clarifications. The first is for Minister Chee. I think he prepared some comments with regard to the disclosure of the size of the reserve and assets under management. But in my speech, I specifically mentioned that actually, that was not what I was talking about. It is more about the performance figures where you have Temasek disclosing annual figures and MAS disclosing annual figures. Why is it that GIC cannot do so?

Second, specific to Minister Indranee's point about the CDC Vouchers, I take her point that, yes, the cost of living hits everyone. But the point that I was trying to make is that it does not hit everyone the same, which is why, if you look at the $800 worth of vouchers, to a lower-income household versus a high-income household, it is a very different percentage of their expenditure.

That is why in my gist and also in my main Budget speech yesterday, what I was saying is that we need to have a more targeted approach. An example which I have given in delivering the cut was to maybe leverage on the CHAS card scheme, because you already have the Blue CHAS card holders, Orange and Green. The different income groups, is quite nicely partitioned that way. So, that is something that we can leverage on. The question then is, would the Minister not agree that this is more in line with how the Government generally directs assistance packages?

Mr Chee Hong Tat: Mr Chairman, first, I want to just reiterate what I said in my main reply earlier. I said all our entities publish information on their portfolio returns. So, this would include Temasek, MAS and GIC. And then, I also explained that it is only the size of GIC's assets under management that remains undisclosed, because that would then reveal the size of our reserves, and I note that Mr Chua does not disagree with me on that. This is just to respond to Mr Chua's question.

Ms Indranee Rajah: Mr Chairman, I thank Mr Chua for his clarification. There is perhaps not that much difference really in what we are looking at.

Mr Chua's point is that different people have different incomes, so you should give more to those who have less. I think that is the point, and that has consistently been the Government's position. I do not understand Mr Chua to be saying, do not give the others anything, right? So, that too, is common ground, because Mr Chua is not saying, "do not give the middle-income" and "do not give the higher-income". At least, I understand that to be the case.

So, if those are the two positions, then, when you look at it, that is what we are doing, because for the targeted assistance which we do have, you have the entire Assurance Package and you have GST Vouchers. So, the GST Vouchers, the lower-income households get more and the seniors get more; the middle-income will get, but not as much. Then, we give retirees Silver Support over and above right. And then, even for the U-Save utilities, the rental flats get more.

So, you can see that we have a slew of programmes which are targeted. But at the same time, everybody is feeling the pain of cost of living. PAP Members have spoken about it. Mr Dennis Tan spoke about it in the Cost-of-living Motion. He highlighted the middle-income. Yesterday, Mr Faisal Manap talked about the middle-income. Today, in clarification, the Leader of the Opposition also highlighted middle-income. And even the higher-income is saying they feel that things are more expensive.

So, it is necessary to also have something for everyone, because we empathise with how they feel. And therefore, you will have some things which are broad-based, like the CDC Vouchers. Essentially, we want to have both.

That said, the suggestion of using CHAS is fair enough, because, as I think Mr Chua knows, when the CDC Vouchers were originally introduced, they were pegged to CHAS as a means of targeting those who had less. But because the pain on the ground at that time was quite a lot, we wanted to help everybody and hence, CDC Vouchers were made universal. But that does not take away from the fact that we have targeted schemes. And it also does not preclude the fact that perhaps for CHAS, we can also leverage that to see how we can triangulate better.

The Chairman: Ms He, you can ask your clarification.

Ms He Ting Ru: Sir, just a quick clarification in response to Minister Chee. It is not to say that I do not support businesses. It is just that the concerns that I raised in my cut were systemic to the long-term effects for what was initially meant to be a temporary scheme.

Mr Chee Hong Tat: Mr Chairman, I thank Ms He for her clarification. I think we are on the same page. The Government also believes that because we are asking businesses to support increasing the wages of their low-wage workers and to hire low-wage workers and increase their pay, and that this is an important part of our social compact, that it is correct for us to co-fund some of the cost increases. The approach that we want to take, whether on this scheme or on many other schemes, is that when we want to do something that will be good for Singapore and Singaporeans, we want to do it together with our stakeholders. And this is also in line, I think, with the spirit of Forward SG.

The Chairman: I believe all the clarifications have been raised and answered. Mr Liang Eng Hwa, would you like to withdraw the amendment.

7.12 pm

Mr Liang Eng Hwa: Sir, allow me to thank Minister Chee, Minister Indranee Rajah and Senior Parliamentary Secretary Shawn Huang for their responses to our cuts. And also, I want to thank Prime Minister Wong and the best-in-class MOF team for yet another impactful Budget that stands us in good stead to move Singapore forward. With that, I seek leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $1,300,315,000 for Head M ordered to stand part of the Main Estimates.

The sum of $127,707,700 for Head M ordered to stand part of the Development Estimates.