Committee of Supply – Head V (Ministry of Trade and Industry)

The Chairman: Head V, Ministry of Trade and Industry. Mr Liang Eng Hwa.

Growing Our Economy

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

Sir, having a growing and vibrant economy is very much a part of our efforts to build a strong social compact. We need a growing economy to create good, fulfilling jobs for Singaporeans and to generate the resources to tackle our social and longer-term challenges. If our economy stagnates, it will dampen aspirations and hopes for a better future and may lead to unease and insecurity among our people.

Sir, we know that growing our economy is going to get even more difficult in the years ahead. The inherent constraints facing us – land, labour and carbon – will become more acute. We have also got to content with a more fractured and contested world, with greater willingness of countries to use economic leverage to exert their interests.

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There are also profound shifts in the economic landscape. The rapid rise of new disruptive technologies such as generative artificial intelligence (GenAI) and the wider adoptions of big data analytics, cloud computing, e-commerce and automation technologies present both challenges and opportunities to Singapore.

All these may sound daunting but fortunately, we are able to respond from a position of strength.

So, how do we grow the economy going forward? Allow me to just touch on three areas.

Firstly, Singapore must continue to be a choice destination for high value-adding investments, investments that put us at the forefront of cutting-edge of technology. Having state of the art companies' hub and base here helps overcome our scale limitations and enable the proliferations of technologies and the development of skilled talents here.

To achieve that, we must tick the boxes in the list of checklist that investors look for. Among the key requirements are excellent infrastructure and connectivity, diverse talent pool, trusted and innovative hub, strong financial standing and political stability.

Despite being a small economy, Singapore is the fourth largest recipients of foreign direct investments (FDIs) in the world. However, the implementation of Base Erosion and Profit Shifting (BEPS) Pillar Two will reset the playing field in the competition for investments and would have implications in our efforts to attract high-quality and high-value investments.

And that is why we must keep working on enhancing our overall propositions; continue to invest heavily into our workforce, in infrastructure and also innovation; as well enhancing our connectivity, our economic fundamentals; and to have sound and consistent policies.

Secondly, we must continue to strengthen the two wings of our economy – manufacturing and services. The Ministry of Trade and Industry (MTI) has in earlier Budget Committees of Supply (COS) outlined our manufacturing and services strategies. Although manufacturing now accounts for less than 30% of our gross domestic product (GDP), it remains a very important pillar in our economy.

Singapore is the eighth largest exporter of high-tech goods in the world and home to many high-value industries like precision engineering, MedTech, aerospace, semiconductors and so on. Besides the jobs and value-add that it creates, the manufacturing sector helps add further resilience to our economy and also helps contribute to the growth in the services sectors. Other than attracting and anchoring frontiers global manufacturers to base here, we should also keep working on developing and growing the manufacturing capabilities of our local enterprises, with the aim grow them into regional champions in their own right.

Sir, I will now move on to the services sector. Our services sector covers a wide spectrum of businesses, including both outward-oriented sectors like financial services, logistics, trade as well as domestic-facing ones like food and beverages (F&B) and retail trade.

At last year's MTI COS, Minister Gan shared that our Services 2030 vision seeks to harness the growth opportunities in the areas of digitalisation and sustainability and to anchor Singapore as a leading, vibrant hub for businesses, lifestyle and tourism. This strategy and the focuses would play to our strengths and minimise our shortcomings.

The one services sector that plays to our strengths and not easily replicable by others is our premiere position as a financial hub and as the international financial centre of the East. I am glad we are not resting on our laurels and have announced another $2-billion injection into the Financial Sector Development Fund to further up our game in this year's Budget.

To continue to be the service hub of choice for global businesses, we need to make our city the among the most business-friendly and among the most liveable city in the world. Hence, the longer-term urban planning such as the Masterplan by the Urban Redevelopment Authority (URA) and the infrastructure upgrades in transport, recreational facilities, healthcare, convention facilities and so on – all adds to making us a conducive hub to offer services to the consumers and businesses of the world.

Thirdly, we grow our economy by continually investing in new technologies and capabilities. Last year, we saw the rapid emergence of AI powered applications and systems, and the momentum is likely to continue and increase this year. We need to develop homegrown AI technologies, grow the AI talent pool and encourage adoption of AI technologies among enterprises.

Besides AI, we would also need to sustain our investment in research and innovations to deepen our scientific capabilities and bolster the startup ecosystem here to capture value.

Sir, Budget 2024 also took a major step to safeguard our energy security which has a bearing on our longer-term economic competitiveness. Some of the major moves include building a second liquefied natural gas (LNG) terminal as well as the setting up of the Future Energy Fund with an initial $5-billion injection to further develop the critical infrastructure and to transit to clean energy.

Sir, to do all the above, Singapore must have the requisite skills and talent pool. We are investing big time to grow our own timber, such as the SkillsFuture Level-Up, Career Health and others; but we have also got to be open to have external workforce that complements and strengthens our overall proposition.

Sir, in that context, allow me to frame a few questions for the Minister.

First, given these unsettling times, how is the Government ensuring that Singapore will remain globally competitive and relevant?

Second, how does MTI plan to continue supporting our enterprises, to capture future growth opportunities in the region and in growth sectors such as AI and the green economy?

Third, can the Government share more about its plans to enhance the competitiveness of the manufacturing sector?

Fourth, to strengthen our connectivity and international linkages, can the Minister share more details on our international collaboration efforts and how Singapore companies can benefit from these partnerships?

Fifth, in the Deputy Prime Minister's Budget Statement and in his round-up speech as well, he mentioned about developing local pipeline of corporate leadership talent and more support to help Singaporeans gain overseas experience. Can I ask for more details of this plan?

Finally, sixth, on tourism, MTI announced that the Government has earmarked half a billion dollars to support tourism recovery. So, can I seek an update on our tourism revitalisation effort? What more can we do to ensure that Singapore remains an attractive tourist destination amidst the intense global and regional competition?

Sir, I Iook forward to the Minister's response.

Question proposed.

Supporting Growth of SMEs

Ms Foo Mee Har (West Coast): Chairman, small and medium-sized enterprises (SMEs) forming the majority of our business landscape are currently navigating a myriad of challenges that threaten their growth and sustainability.

The rise in manpower costs is a major concern. This, combined with the increased costs of raw materials, rents, utilities and other operational expenses is exerting immense pressure on their already thin margins. The heightened interest rates environment also adds further pressure on financing costs, adding challenges to SMEs' access to capital for growth and innovation.

Sir, adding to all this, the manpower shortage has left many SMEs in a dire situation, unable to fill essential roles and sustain their operations, let alone the capacity to innovate and transform. The need for digital transformation has shifted from being a luxury to a necessity for survival and growth.

Another pressing issue is the environmental impact and the increasing demand for green compliance. Many SMEs lack the knowledge and resources to transform towards greener practices, even as they face increasing pressure from counterparts and regulations requiring adherence to green standards. This gap further hinders their ability to compete effectively and sustainably.

Sir, Budget 2024 Enterprise Support Package will provide SMEs with some relief immediately. But the most significant support measures are those tilted towards firms that can restructure and transform. Therefore, to support SMEs to embark on this transformation journey, I would like to ask the Government to double down on three fronts.

First, we must strongly promote collaborations between larger companies and SMEs in the area of supplier development and co-creation. Deputy Prime Minister Lawrence Wong rightly pointed out that, "We cannot force MNEs to choose only local suppliers, but we can and we will help Singapore enterprises to meet the high standards and to form win-win partnerships with MNEs."

I welcome the expansion of the Partnerships for Capability Transformation scheme to encompass broader areas of collaboration. However, to further enhance this initiative, I propose that the Government consider an additional step – and this is an important step – by integrating the involvement of Singapore-based SMEs as a positive criterion for multinational enterprises (MNEs) and larger corporations when they access Government grants.

This inclusion – to include SMEs in the application – should be particularly emphasised for high-value investments such as research and development (R&D) and innovation related grants. By doing so, it will not only incentivise large entities to collaborate with SMEs, but also ensure the benefits of such Government-backed programmes extend across the broader business ecosystem.

Secondly, the Government Enterprise Financing Scheme (EFS) is designed to assist SMEs with various financing needs. A key feature is its risk sharing component, where Enterprise Singapore shares the loan default risk with participating financial institutions in the event of enterprise insolvency. The Government's risk sharing can reach up to 70%, therefore providing a significant safety net for banks. This arrangement should enable banks to take on more risk and provide more favourable terms to our SMEs.

By offering this level of support, the Government is really in a good position to expect participating financial institutions to improve loan conditions for our SMEs. How can the Government support SMEs to secure more favourable interest rates, more flexible security requirements and more favourable payment terms for those that are on EFS loans versus those that are on standard bank loans?

Growing the Economy Over the Next Decade

Mr Desmond Choo (Tampines): Mr Chairman, Singapore has been bracing itself for a period of slow growth and high inflation as Deputy Prime Minister Heng Swee Keat has pointed out in his Budget Speech this year.

Our population is rapidly ageing, our local workforce growth will eventually slow down to zero. An ageing population will lead to increase in social spending, decreased consumption and decreased labour output. There are also constraints of land, power and carbon.

How will our GDP look like over the next decade? Studies have shown that super ageing Japan's GDP was expected to drop by about 5% relative to the baseline scenario of a stationary population. We must not let this happen to Singapore.

Could the Ministry share what are its overarching plans over the next 10 years to grow our GDP despite our constraints?

I have three suggestions for the Ministry to consider.

First, we must increase the amount of capital and adoption of innovation and technology by our SMEs. Singapore is already amongst the world's leaders in automation, especially in industrial robots. It was just behind South Korea in 2021.

For our growth to continue, we need to intensify automation and innovation in our SMEs. What is the current progress and plans to intensify capital investment and adoption of innovation by SMEs? Could the Ministry provide an update on the take-up of the Agency for Science, Technology and Research (A*STAR) T-UP programme and how can we continue to improve take-up by SMEs?

Next, we need to have more of our companies operating abroad to bring in income and job opportunities. Economically, we need to focus on our gross national income (GNI) per capita as much as GDP per capita. Singapore is fortunate to be in Southeast Asia, one of the fastest growing regions in the world. With a young and still-growing population of 650 million, Singapore can have access to a large market and pool of talent.

Our companies must seize the limited window to expand in the region. How has MTI helped our Singapore companies to expand in the region? What are the future plans to help SMEs go regional?

Lastly, we must seize the opportunity provided by AI for Singapore to continue to punch above our weight. AI has the potential to improve our workers' productivity tremendously.

Yet, AI will require significant resources, especially power and talent, for R&D. How is the Ministry ensuring that Singapore has the requisite infrastructure and talent for companies to keep pace and deepen AI work?

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Supporting Industry Transformation

Mr Shawn Huang Wei Zhong (Jurong): Chairman, in an era where global economies are increasingly interconnected and digital technologies are rapidly evolving, the need for our businesses to stay competitive has never been more critical. As we navigate through the complexities of the 21st century – including the pressing challenges posed by climate change – the imperative for digital innovation, global market expansion and sustainable practices is paramount to not only surviving but thrive in the global marketplace.

Digitalisation and sustainable practices are essential pillars for resilience and growth in the complex web of global supply chains and commerce. Digitalisation by enabling seamless integration of technologies, facilitates unparalleled efficiencies, agility and connectivity among businesses worldwide, thereby enhancing competitiveness and access to markets. Concurrently, sustainability practices address the urgent need to minimise environmental impact and promote responsibility sourcing and production methods.

As such, what are some of the key measures that MTI is undertaking to support our sectors and firms in their transformation efforts, particularly in digitalisation, internationalisation and sustainability?

Staying Competitive in a BEPS 2.0 World

Ms Mariam Jaafar (Sembawang): Sir, with the impending implementation of BEPS 2.0, many jurisdictions around the world are grappling with the need to strike a balance between attracting investments and ensuring fair taxation. Several countries have implemented various policies, including new tax incentives and credits, enhanced investment allowances, targeted sectoral support and direct subsidies to individual companies.

Mr Speaker, those of us who have worked in the frontline in organisations, like the Economic Development Board (EDB) as well as those of us in country teams of MNEs, know the sheer effort it takes to anchor good investments in Singapore. This land scarce little red dot, with no domestic market to speak of, where wages and living costs are higher than in many other jurisdictions. We cannot be complacent and a competitive tax regime is critical.

The Refundable Investment Tax Credit is therefore very welcome. It directly alleviates the tax burden for businesses while allowing EDB and Enterprise Singapore to target the companies and sectors that will best contribute to economic growth; as well as opportunities and jobs for our people and our local enterprises. A good understanding of how the scheme will be implemented and its potential benefits for the Singapore economy and Singaporeans is therefore helpful for both businesses and the public. To that end, I have a few questions for the Minister.

One, how will the scheme keep Singapore attractive as an investment destination when taking into account the measures that other jurisdictions are putting into place? Two, the list of economic activities and qualifying expenditures appear to be quite broad; can the Minister give more specifics on the sectors and qualifying expenditures that can be expected? Three, how can we ensure that the tax credit will incentivise capital investment and drive desired outcomes, such as higher productivity or decarbonisation targets; and help MNEs achieve those targets? And lastly, how else is the Government supporting businesses to stay competitive?

The Chairman: Ms Jessica Tan, please take your two cuts together.

Business Transformation

Ms Jessica Tan Soon Neo (East Coast): Thank you, Mr Chairman. With geopolitical uncertainties, rapid technology development, structural disruptions and inflationary pressures, Budget 2024 signals the urgency for businesses to transform. It is no longer a good-to-do but a must-do if businesses want to stay relevant, continue to do business and grow.

Business transformation is not easy as it involves business process and operational changes; the adoption of relevant digital technology; as well as the need to build new and deep capabilities of employees to address the structural disruptions. With climate change, we see increasing legislation of sustainability standards and disclosures. This will require that companies commit to and transition to sustainable ways of doing business, if they want to do business.

With the Industry Transformation Roadmaps and the myriad of support measures to help businesses transform, can MTI share the progress of companies in Singapore, including SMEs, in their business transformation?

How will the various measures announced in Budget 2024 come together to support businesses, including SMEs, in their transformation efforts especially in digitalisation, cybersecurity, sustainability as well as growing internationally? How many Singapore companies have taken on the support measures to transform?

Position as Global Business Node

Mr Chairman, Singapore has retained our position as the world's leading business hub. But Singapore's hub status is challenged with increasing geopolitical uncertainties, emerging disruptive technologies and BEPS 2.0. What efforts is the Government making to ensure that Singapore continues to be attractive and competitive globally? As the hon Ms Mariam Jaafar has said, for MNEs to anchor their investments here, in Singapore, it is not an easy decision and it is extremely competitive. And in today's world, even more.

What strategies are we exploring to continue to make Singapore a place that the best global companies will choose to locate their regional and global businesses? This is important for Singapore to have good growth as well as bring investments in cutting-edge technologies, know-how and good jobs.

Can more details be shared on international partnerships and how these partnerships can ensure that Singapore remains at the centre of global trade? Leveraging on Singapore's status as a global business node, how can Singapore companies tap on the enhanced support measures announced in Budget 2024 to expand and capture growth opportunities to play an important role in regional and global value chains?

The Chairman: Mr Neil Parekh, please take your two cuts together.

Capturing Future Growth Opportunities

Mr Neil Parekh Nimil Rajnikant (Nominated Member): Chairman, in the Asia Pacific region, the digital economy, including AI and the green economy, present immense growth opportunities. Southeast Asia's Internet economy is forecasted to reach US$1 trillion by 2030 and over five to six million new jobs are expected to be created through the green economy.

In Singapore itself, we expect to create more than 50,000 green jobs by 2030. In 2023, MTI announced enhanced support under the Enterprise Development Grant for sustainability projects to support more firms in capturing new growth opportunities in sustainability as we transition to a green economy.

Sir, there is no doubt that both the digital and green economies are growing in importance and Singapore's enterprises must seize these opportunities in these growth areas to further progress in these spaces.

My question for the Ministry is: how does MTI plan to continue supporting our enterprises and capture future growth opportunities in the region and growth sectors, such as AI and the green economy? At the same time, given the promising growth potential in Southeast Asia, how does MTI plan to strengthen Singapore's links and collaborations with the region for new growth opportunities in green economy and AI, so that our businesses and people can tap on the opportunities beyond our shores?

Facilitating Internationalisation

Chairman, as we navigate through an increasingly interconnected global economy, we must recognise that our nation's growth is intricately linked to our ability to venture beyond our shores. Singapore, although small in size, possesses boundless potential. But to fully unlock it, internationalisation becomes not just a choice but a necessity for sustained economic growth.

However, the lingering effects of the pandemic, geopolitical tensions and the macroeconomic uncertainty have given rise to an increasingly fragmented world. There are headwinds to economic growth with high inflation rates and increasing volatility in the world.

In Singapore, we have achieved quite a bit thus far. Today, we have forged an extensive network of 27 implemented Free Trade Agreements (FTAs) along with being a signatory to many regional agreements in the Asia Pacific like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership Agreement.

On its part, MTI, Enterprise Singapore and the Singapore Business Federation (SBF) also offer several schemes and programmes, such as the Global Innovation Alliance, to support companies' internationalisation efforts. Moving forward, Singapore needs to identify new opportunities and build new engines of growth as well as continue to build on our international partnerships.

My question for the Ministry is: how can MTI continue facilitating our companies' endeavours to seize new economic opportunities in the fast-growing markets in Southeast Asia, South Asia, Latin America, Central Asia, the Middle East and Africa? Also, how do we protect the investments of Singaporean companies in these emerging markets?

FTAs and Singapore's Competitiveness

Mr Sharael Taha (Pasir Ris-Punggol): Mr Chairman, in his Budget speech, Deputy Prime Minister Wong shared that the international environment has darkened dramatically – major powers are prioritising national security over economic interdependence in this current geopolitical climate and there are other potential headwinds, like BEPS 2.0, that may affect Singapore's competitiveness to attract investments.

In light of this, how do our global FTAs remain relevant and create conditions for cross-border investments and boost Singapore's competitiveness?

The Chairman: Ms He Ting Ru, please take your two cuts together.

Anti-economic Coercion Effects

Ms He Ting Ru (Sengkang): Sir, today's world is increasingly uncertain and contentious, not least because of growing United States (US)-Chinese competition. With these, come greater risk of Singapore facing economic coercion. Not necessarily because of anything we may have done but because major powers and others believe that it is possible to force us into certain positions.

We have seen US limits on technology transfers helm in some of the world's ability to export. During the Trump Administration, Singapore was placed on a list of potential currency manipulators that could face sanction. China has published a list of countries from Australia to Czechia from Canada to Japan and South Korea for acting in ways that it does not like.

Economic coercion can be arbitrary and sudden. This may get worse of shifts and domestic politics in China and the US. What are the concrete efforts being taken to prepare for and mitigate economic pressure that may come our way, both on our own and in conjunction with partners? After all, any such plans must involve active public and business participation, sooner rather than later, to be effective.

Reputation Risk for Singapore Companies

The European Union (EU) is currently proposing a law, which requires larger companies to identify actual or potential negative impacts on human rights and their supply chain; and to prevent, mitigate and remedy these impacts. This is on top of existing laws that already require large companies to perform due diligence on supply chains to ensure that they have a plan of vigilance to identify risks relating the labour practices, health and safety or environmental issues.

Our policies relating to recruitment fees have an impact in Singapore's ability to attract investment and business, particularly in sectors like the maritime industry, where companies have to employ many migrant workers. What are the reputational and legal risks for companies in the development of the Ministry of Manpower's (MOM's) policies and allocation of resources for enforcement?

Agreement has been reached between the European Parliament and Council and we are likely to see further progress on rules enforcing labour rights in global supply chains soon. These are seen to foster a business environment with legal certainty, a level playing field and sustainable competition that does not benefit from worker exploitation.

Germany has already enacted similar laws. In 2019, the International Labour Organization (ILO) governing body approved the definition of recruitment fees and related costs, emphasising that recruitment fee should not be borne by workers or jobseekers, as workers must not be required to pay for access to employment or it takes time for workforce structures to change.

There are international standards ready for adoption by EU legislators and EU-based MNCs. Migrant workers continue to pay high recruitment fees of up to $12,000 to have the opportunity to work in Singapore. This is an area of concern, given the risk of debt bondage to workers' rights as well as their practical ability to make economic decisions, such as a choice to leave a job with poor working conditions. Specifically, what are our recruitment fees? The Workers' Party reiterates our call for the creation of a Government jobs' portal that advertises all open positions for migrant workers to cut fees workers pay to agents in Singapore and overseas.

I note the response to a Parliamentary Question last year that we are considering facilitating direct recruitment channels for returning workers. Are there any updates? It is also said that we have no legal jurisdiction to influence the recruitment fees migrant workers pay in their home countries. But are MOM and MTI engaging with source countries on the recruitment fee issue, given the impact that it will have on MNCs' supply chains in Singapore?

The Chairman: Mr Mark Lee, you can take both your cuts together.

Offshore Grant Schemes

Mr Mark Lee (Nominated Member): Sir, as Singapore looks towards new engines of growth while overcoming domestic resource constraints like for example, the Johor-Singapore Special Economic Zone, a portion of development efforts may need to be conducted outside Singapore utilising offshore resources. These offshore activities will ultimately contribute to tangible and intangible assets that benefit Singapore, enabling our businesses to reduce costs and maximise value capture.

Will MTI consider revising current grant schemes to include coverage for business expenses incurred during offshore development activities? This adjustment can significantly aid local companies in leveraging international resources while ensuring the resulting benefits bolster Singapore's economy.

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Partnerships for Capability Transformation (PACT) Scheme

Sir, I support the PACT scheme for its role in promoting collaborations between MNEs and SMEs and now ask, how MTI intend to incentivise participation in the PACT Scheme to facilitate the creation of beneficial partnerships between SMEs and MNEs?

Local businesses have shared their struggle to retain and develop talent because MNEs and aiming to swiftly expand their operations, often offer high and yet unsustainable wages to fulfill their foreign worker quotas, disadvantage SMEs in talent development and acquisition. Given these concerns, how does MTI plan to nurture our local SMEs to navigate these challenges effectively?

Support for SMEs

Mr Shawn Huang Wei Zhong: Chairman, in recent years, particularly in the wake of the global pandemic, SMEs have faced unprecedented challenges that have tested their resilience, adaptability and sustainability.

MTI has been instrumental in introducing various support measures to aid these enterprises as they navigate the complexities of recovery and seek new opportunities for growth. As such, how will the Government continue to support these SMEs?

Enterprise Growth Support and Tourism

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Mr Chairman, Sir, before the onset of the pandemic, considerable efforts were dedicated to assisting our local enterprises in seizing opportunities abroad and expanding their global footprint. As we transition from the pandemic, the external landscape and supply chains have undergone significant shifts due to the heightened emphasis on resilience and geopolitical tensions, leading to increased polarisation and "friend-shoring".

In light of these changes, how is MTI adapting its programmes – such as Scale-up – to align with this evolving external environment, ensuring that support for regionalisation remains effective?

Moreover, considering MTI's success in securing Foreign Direct Investments in recent years and the presence of MNEs, how will these factors empower local businesses to capitalise on emerging opportunities? Will this integration be part of the enhanced PACT programme and if so, what is the synergy between Scale-up and PACT?

Furthermore, MTI's proactive approach to signing FTAs with various jurisdictions presents additional opportunities for local enterprises to expand its overseas revenues. How does MTI facilitate local businesses in seizing these opportunities? What contributions do trade associations and chambers (TACs) make in this regard and how is MTI enhancing its support to TACs to bolster secretariat manpower and capabilities further?

Another area that has changed post-pandemic is the tourism landscape. Businesses operating within the tourism and related sectors are encountering notable challenges stemming from several factors. One, escalating manpower costs due to tight labour markets. Two, increased energy expenses. Three, sluggish recovery of tourism arrivals from key traditional markets. And four, strengthening of the Singapore dollar against key tourism markets.

What are MTIs strategies to mitigate these challenges?

Despite efforts, tourism arrival figures and projections have yet to rebound to pre-pandemic levels of 19 million per year. While the sector witnessed a robust resurgence in the past two years – largely attributable to schemes like the Jobs Support Scheme (JSS) that retains capabilities and capacities – other global tourism hubs have regained momentum and competitiveness. Competing markets have also unveiled substantial new initiatives and attractions, vying for a share of the tourism market.

In light of these circumstances, what are MTI's specific strategies to restore our tourism sector to pre-pandemic levels? Furthermore, within these strategies, what specific initiatives are in place to enhance local content; empowering local enterprises to cultivate robust Intellectual Properties (IPs) instead of solely relying on imported IPs?

Support SMEs – Digital, AI and Green Economy

Mr Derrick Goh (Nee Soon): Sir, digitalisation remains an imperative for our SMEs in a rapidly evolving technology space, to thrive and capture opportunities in the new economy. The year 2023 saw the breakthrough of AI and its use cases in the real world. But as is always said, AI will not replace humans but the person using AI will. In essence, SMEs who will succeed better are those that can adapt and transform quicker, by viewing digitalisation and AI as a friend instead of a foe.

As a practitioner using various forms of AI, including GenAI, in my work to sharpen effectiveness and productivity in risk management and auditing, I can understand why SMEs may face and see AI as intimidating. There is a need to help SMEs dispel a "fear of the unknown" and the notion that AI is reserved only for MNEs.

In this regard, can MTI share its plans to help SMEs further accelerate their digitalisation so that more local businesses can harness AI to transform and increase productivity?

On sustainability, I am glad that Budget 2024 has covered key aspects of going green as a competitive advantage, because MNEs have started on their sustainability journey earlier and would expect the same for our own SME suppliers. I am also glad to learn that SMEs in more sectors will benefit from green loans and the Energy Efficiency Grant, which I had asked for at last year's Committee of Supply debate and Government support to be more inclusive.

Yet, while advancing in the green journey is essential and more Government funding is available, a DBS study in 2023 found that only 37% of SMEs had a clear roadmap on how to achieve their sustainability goals. Many cite having to navigate complex reporting standards as a hurdle.

On this note, what is MTI's assessment of the progress and effectiveness of existing grants and initiatives, such as the Enterprise Sustainability Programme and how may they be enhanced to help our SMEs be more ESG-savvy?

While opportunities in the digital and green economy are aplenty, we know that transformation is not easy and more funding on its own is not sufficient. What matters more fundamentally, is for SMEs to shift their mindsets and be willing to accelerate their efforts. For those who are, they should be provided with ready-access to expertise. This is where SME Centres and TACs, as critical nexus for engagement and advisory, can play a more proactive role to nudge and help SMEs digitalise and go green.

In my engagement with the industry, a feedback suggested by SMEs was for such Centres to go beyond the marketing of grant options and providing generic guidance; and offer more in terms of business development advice and more customised expertise and guidance.

As such, can MTI share on three areas.

One, whether there are plans to boost the effectiveness of SME Centres by enhancing its advisory capabilities and sharpening its own key performance indicators (KPIs) from Level 1 or baseline targets, such as number of SME visits, to be more aligned with the outcomes, such as SME productivity and customer growth of the portfolio of SMEs they cover?

Two, whether TACs can be guided to deepen understanding of their own members' profile to provide more targeted facilitation and support as well as more effective cross-learning between its members?

Thirdly, whether we can build a more comprehensive support ecosystem for SMEs, such as by (a) synergising the roles of SME Centres and TACs with the enhanced Partnerships for Capability Transformation Scheme for SMEs to connect more easily to learn digital and green strategies; (b) deepening collaborations with Institutes of Higher Learning for training; and (c) leveraging clan associations with wide business connections for advocacy.

Supporting AI Transformation

Ms Mariam Jaafar: Sir, rapid developments in AI are transforming businesses and industries. Yet, businesses struggle to scale up AI beyond pilots and POCs and therefore fail to derive value and impact from their efforts.

As I spoke about in my Budget debate speech and again, I would like to declare my interest as a Managing Director and Senior Partner of a consulting firm that does the work of AI. Scaling AI requires more than just buying a platform and hiring a few data scientists. I spoke about the 10-20-70 rule: 10% of the effort is in the algorithms; 20% in the technological and IT foundations – the infrastructure, the data architecture; 70% though, is about people and processes – ways of working, business-process reinvention, how to drive adoption at scale, organisation, talent strategy and change management.

Businesses therefore need to move beyond experimentation and POCs. They need to have a clear strategy and roadmap of how they will build the AI platform, data, process, organisation and other enablers and sequence the development of use cases so that they are able to fund their AI transformation journey and win in the medium-term.

MTI has launched a number of good initiatives, such as AI Innovation sandboxes and hands-on workshops aimed at identifying AI and GenAI use cases; and the AI Trailblazers initiative, which helps organisations to identify GenAI use cases and build solution prototypes.

How will the Government now help organisations take the next steps to implement AI at-scale, beyond POCs and pilots?

Encouraging Entrepreneurial Spirit

Mr Keith Chua (Nominated Member): Mr Chairman, retrenchments and redundancies are expected to continue. MNEs, Lazada, Amazon and Google in the technological sector have reduced staff. The closure of Tetra Pak will affect 300 workers. From time to time, local enterprises also succumb to changing conditions and downsize or cease operations.

Such realties are not new. We need to continually find new foreign investments and also keep building up and strengthening local businesses. The local business sector was built over the decades, possibly centuries, by individuals with the entrepreneurial spirit. While the majority are classified SMEs, we also have large successful local enterprises and collectively, these employ many Singaporeans.

My question to the Ministry and to all of us is: what will we do to keep the entrepreneurial spirit thriving, especially in challenging times and when business conditions may not be conducive? Also, with Forward Singapore (Forward SG), there may well be a resurgence in social entrepreneurial initiatives. How can we support these agents of change?

Supporting our SMEs

Ms He Ting Ru: Sir, the enhancement of the Enterprise Financing Scheme and the Energy Efficiency Grant is welcome. Incentives and grants are critical in providing seed support and are crucial in driving SME growth and are important signals in the industrial strategy we are developing, especially for our green transition. Yet, a DBS survey found that 63% of SMEs in Asia identified as their top challenge transitioning to a sustainable business model.

In a survey reported in the Singapore Business Review last month, 58% of small and microbusinesses polled are less confident about prospects in 2024. The survey also said that apart from grants, SMEs feel they need more support in areas ranging from subsidies for talent and acquisition schemes, indicative of the tight labour market, more support for international expansion and rental assistance and rental support.

The same survey also found that a streamlined grant application process was on the wishlist. We should continue to simplify the adoption process for grants and in particular, green grants.

For many SMEs, daily operations are a priority and not grant applications and associated administrative work. Perhaps, one way to improve the system would be for Enterprise Singapore to provide a one-stop web page offering advice and guidance to SMEs on how they can green their business and what the associated grants are. Also important, are the money itself and the time value of money. Could the Government provide some of these grants on a cash rather than a reimbursement basis, to help firms who would not normally look at environmental matters in their cashflow planning?

Additionally, in order to properly understand whether our grants are properly supporting our SMEs, we should publicly announce how we track their success. For example, alongside how much has been disbursed for green grants, we should state how many tonnes of emissions have been mitigated per dollar spent, so that the public, civil society and Members of Parliament can be sure that these taxpayer-paid subsidies are working; and to measure how they have achieved their goals. Other commentators have noted that the lack of standardised measurement in reporting standards have made the environmental, social and governance (ESG) compliance efforts challenging for SMEs.

Finally, a conversation article reproduced in the Business Times last year also stated that workers and managers in SMEs often have less resources and know-how to understand and properly tackle mental health challenges, partly because most research about mental health and well-being at work is usually undertaken in larger organisations. I hope that we would study how to tackle mental health and well-being at work in the context of our smaller enterprises in order to understand the particular challenges that they face and to ultimately develop interventions that are targeted to work to raise the well-being of our workers in SMEs; and see if any interventions can be made beyond those which currently form part of MOM's Total Workplace Safety and Health programme.

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Cut Energy Efficiency Grant

Mr Mark Lee: Sir, as SMEs navigate the challenges of integrating sustainable practices within an evolving regulatory framework, the Enhanced Energy Efficiency Grant (EEG) aims to bridge this gap, especially for sectors like food services, manufacturing and retail, with plans to extend it to reach new sectors. Could MTI provide insights into EEG’s effectiveness in these areas, highlight successful strategies and share lessons to encourage broader uptake across newly included sectors?

Furthermore, in recognising beyond financial and technical hurdles SMEs encounter in adopting energy-efficient practices, is there a consideration from MTI to expand EEG to encompass a more holistic support package, covering consultancy, execution and training costs, to facilitate in this transition?

Moreover, in the context of shifting towards clean energy and the high associated costs, can MTI outline any assistance for SMEs, particularly in adopting electric vehicles for commercial and industrial use? Lastly, could MTI explain the exclusion of crucial sectors like Process and Logistics from EEG, given their importance in decarbonisation, and are there plans to integrate these sectors into the programme?

Heartlands 2025 Initiative

Mr Shawn Huang Wei Zhong: The vitality of our heartland enterprises is indispensable to the socio-economic fabric of our nation, serving not just the backbone of our local economy but also the heartbeat of our community life.

In 2022, MTI and Enterprise Singapore launched "Our Heartlands 2025" initiative to revitalise local neighborhoods. As such, can MTI provide an update on the support measures for heartland enterprises under this initiative?

Supporting Heartland Enterprises

Ms Foo Mee Har: Chairman, in today's world, where large retail chains and online shopping platforms dominate the market, our neighborhood shops are facing unprecedented challenges. Yet, these small establishments offer something invaluable that transcends mere commerce – they are the lifelines of our localities. Our heartland enterprises provide a unique social value that nurtures the spirit of our communities. These are places where personal connections are made, where the shopkeepers know your name, family and preferences.

These businesses, often run by families and local entrepreneurs, are deeply rooted in the community. They contribute to the local community, create jobs and frequently offer personalised services that larger stores cannot. Therefore, it is crucial that the Government proactively step in to support these vital community assets.

I applaud the Government in launching various initiatives to energise and support our heartland shops. So, I would like to ask the Minister to share the progress of "Our Heartlands 2025" and "Heartlands Go Digital". These initiatives are crucial in helping our neighborhood shops sharpen their competitive edge and carve out a distinct role for them to thrive in the years to come.

Support for Heartland Enterprises

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Chairman, coming out of the COVID-19 pandemic in 2022, MTI and Enterprise Singapore launched the "Our Heartlands 2025" initiative to boost the growth and efficiency of our heartland shops which had demonstrated “incredible resilience and mettle to transform and thrive” during the pandemic.

There are a fair number of heartland F&B and retail shops in my constituency of Toa Payoh East, most notably around the Lorong 8 Market and Hawker Centre, and Kim Keat Food Centre. The charm of these open, ground floor establishments cannot be replicated by our shopping malls and complexes, not to mention the convenience that they offer to the seniors living in the neighbourhood.

May I ask the Ministry what are the KPIs to be met in 2025 under the initiative and would the Ministry be able to provide an update on the support measures for heartland enterprises under "Our Heartlands 2025"?

Strengthen Trade Associations

Mr Keith Chua: Mr Chairman, trade associations played a valuable role during COVID-19. These included closely working with the Government and Members, providing input on business realities and proposing ways to ride through the pandemic and to retain jobs.

Historically, trade associations have brought like-minded businesses by sector to work cooperatively, share best practices, improve productivity and, in many instances, to internationalise. Recovery from COVID-19 has been patchy for some sectors and many continue to face the recent challenges of higher costs across many fronts. Trade associations will remain relevant, though some sectors may face consolidation while others see opportunities for growth. The broad-based Budget support measures will help many companies.

How will MTI best support trade associations in this challenging phase of global and domestic business disruption? How will MTI approach those sectors and their trade associations that see consolidation but still remain viable?

Uplifting Businesses

Mr Shawn Huang Wei Zhong: Chairman, in the intricate tapestry of our nation's economy, trade associations and chambers (TACs) stand out as pivotal enablers that bolster the capabilities, reach and resilience of our businesses across various sectors. By offering a platform for advocacy, sharing best practices and facilitating collaborations, TACs play a crucial role in the upliftment and sustainability of businesses, particularly SMEs that form the backbone of our economy. As such, what are we doing to ensure that TACs are sufficiently equipped to play this role effectively?

Plans to Enhance the Manufacturing Sector

Mr Saktiandi Supaat: Mr Chairman, our manufacturing sector is a key part of our Singapore Economy 2030 vision. After all, manufacturing accounts for approximately one-fifth of our annual GDP and around 11% to 14% of jobs in the last 10 years. Our strategy is to attract frontier investments into Singapore to create good manufacturing jobs for Singaporeans. Dyson, Hyundai and GlobalFoundries are just some of the big names that have recently opened or announced plans to open advanced manufacturing plants in Singapore.

However, in the past decade, companies, such as IBM, Coca Cola and display maker AU Optronics, have closed their multi-million-dollar manufacturing facilities here as well. Being a country with natural resource constraints, our higher land, labour and transport costs make it challenging for global manufacturers. We do not want to draw a manufacturing giant in only to lose them five to 10 years later to cheap countries which have caught up in technology and know-how. Can the Government share more about its plans to enhance the competitiveness of the manufacturing sector, keep them here, and how our local companies can benefit from these plans?

Transformation of the Marine Offshore Sector

Mr Shawn Huang Wei Zhong: Chairman, the marine and offshore engineering sector has long been a cornerstone of our nation's industrial landscape, contributing significantly to our economic development and global trade capabilities. However, in the face of evolving global energy demands, technological advancements and the urgency for sustainability, there is a pressing need to transform and future-proof this vital sector. As such, can the Government share more on how the industry transformation plans to assist the marine and offshore engineering sector?

Revitalisation of Tourism

Mr Neil Parekh Nimil Rajnikant: Chairman, the tourism industry is vital for our economy. As a key pillar of our economy, the tourism industry, besides creating jobs and opportunities for our citizens, also enhances our international brand as a global business hub with a vibrant lifestyle.

The pandemic had impacted tourism flows across the world and also affected Singapore. However, with support from the Singapore Tourism Board, tourism receipts have bounced back to an estimated $14 billion in 2023. As we move into a new world after the pandemic, it remains crucial for Singapore to continue to capture the tourism market.

In 2022, MTI announced that the Government had earmarked half a billion dollars to support tourism recovery. Can MTI please provide an update on the tourism revitalisation efforts? What will MTI do to ensure that Singapore remains an attractive tourist destination amidst growing global competition?

Support Firms and Creatives to Create Value

Ms See Jinli Jean (Nominated Member): Chairman, taking deliberate steps to infuse Singapore firms with the capabilities of Singapore’s creative professionals in arts, culture, media and design is the game changer that can bring forth an industry renaissance. Like how the advent of the printing press led to unprecedented change, digital technology and AI are initiating new ways to produce and trade. Thus, if technology and AI are the tools that a firm uses to reimagine its operating model, then a creative lens must be what a firm applies to redefine its business model.

To engender the meeting of minds between progressive firms and creative freelancers, I offer three possibilities for the Minister’s consideration.

First, would the Ministry work closely with NTUC’s Visual, Audio, Creative Content Professionals Association (VACCPA) and relevant sector agencies to develop and share use cases of when and how firms could tap Singapore's different creative forms to create new value? For instance, retailers could tap freelancers to create novel, virtual shopping experience using 3-D digital asset creation. Economic funding schemes could be expanded to cater for such creative use cases.

Second, could the Ministry expand the SkillsFuture Enterprise Credit to cater to creative micro-firms of one to two persons?

Last, could the Ministry facilitate opportunities for creative freelancers to work and learn on international projects supported by the economic agencies? For instance, opportunity could be created for Singaporean freelance lighting designers to augment international touring acts courted to Singapore. Such stints can be underpinned by robust hiring and accreditation and the relevant Tripartite Standards. Freelancers would appreciate the boost to their development and portfolio.

Through these three possibilities, Singapore businesses and creative freelancers can unlock synergies and develop new competitive advantage to stay ahead of change and global competition.

Plans for Creative Economy

Ms Usha Chandradas (Nominated Member): Mr Chairman, Singapore has a vibrant and flourishing creative economy which includes sectors, such as the arts and culture, media and design. According to the Ministry of Culture, Community and Youth (MCCY), in response to a Parliamentary Question filed by me earlier this year, the nominal value added from these three sectors increased by close to 50% over the past five years and the increase was from $7.9 billion in 2017 to $11.7 billion in 2022.

MCCY has also stated that in the coming years, the outlook for the creative economy in Singapore is positive. According to MCCY, while the growth of the sector depends on many factors, there are opportunities for creative practitioners, especially if they are able to capitalise on growing demands and trends. This includes the leveraging of technology and working with regional and international partners to reach audiences beyond Singapore. MCCY also provided assurance that the Government will continue to provide support to help the sector grow by injecting funding, providing skills development opportunities and brokering partnerships with the private sector to open up opportunities for creatives.

Could MTI clarify how much of its own development or other expenditure will be allocated to the growth and development of Singapore's creative economy in the coming financial year? For example, will any significant expenditure be incurred by the Singapore Tourism Board for the promotion of tourist consumption of Singapore arts? Can we expect to see more expenditure in the profiling of Singapore as a premier destination for creative and cultural consumption? We saw this very recently with the Taylor Swift Eras Tour concert and the Government's outreach to Swift's team.

Will EDB and Enterprise Singapore be working on any specific projects or plans in the coming financial year that are related to the development and growth of our creative economy? If there are any specific plans underway related to the creative economy, can the Ministry share the particular areas of focus?

RIE2025 – Singapore's R&D Efforts

Mr Shawn Huang Wei Zhong: Chairman, R&D fuels the creation of new products, services and processes, enabling businesses to innovate and stay ahead of competition. This continuous innovation is essential for sustaining long-term economic growth, as it leads to the development of unique offerings that meet emerging consumer needs and adapt to changing market conditions. Through R&D, companies and economies can find new methods of production, utilise resources more efficiently and improve operational processes. It also encourages entrepreneurship by providing the knowledge base and technological advancements necessary for the creation of startups. As such, what are some R&D initiatives and sectors that MTI will be focusing on to grow our Singapore economy?

R&D Investments and Priorities

Ms Jessica Tan Soon Neo: Mr Chairman, to enhance Singapore's R&D efforts, Deputy Prime Minister Lawrence Wong announced additional investments of $3 billion to the Research, Innovation and Enterprise 2025 Plan (RIE2025) in Budget 2024. The additional funding will go towards research and related investments in national priorities, which include deepening our capability in advanced manufacturing, sustainability, the digital economy and healthcare.

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Can MTI share the progress of the RIE2025 plan since its launch in 2020? What initiatives will MTI be focusing on to build Singapore's innovative capability to grow our economy? How will we grow the talent pool in Singapore to help bring these innovations to market and strengthen the capabilities of our enterprises?

During the Budget debate, Deputy Prime Minister Heng Swee Keat spoke about the importance of building greater linkages and collaboration at all levels and of the innovation ecosystems. Can more be shared about these innovation ecosystems and the impact for Singapore as an innovation and business hub?

RIE2025

Mr Neil Parekh Nimil Rajnikant: Chairman, science and technology are instrumental to Singapore's survival and success and has helped us overcome the constraints of our small size and somewhat limited resources. The RIE ecosystem remains a cornerstone of Singapore's development into a knowledge-based, innovation-driven economy and society.

The RIE's ecosystem is also a key enabler in creating new avenues of growth and raising Singapore's economic competitiveness.

Under the RIE, local enterprises' business expenditure on R&D increased from $1.1 billion in 2010 to $1.6 billion in 2020, while the number of local enterprises involved in research and development grew from approximately 450 to almost 600 now. The recent announcements by Deputy Prime Minister Wong during the 2024 Budget have underscored our Government's commitment to fostering innovation and driving research and development initiatives to propel our economy forward.

A key area of Singapore's research and development efforts would be unlocking new economic opportunities and helping Singapore's economy and businesses transform to remain competitive.

This could include new opportunities in advanced manufacturing, health technology and emerging areas, like AI. R&D can also enable companies' green transition and our push towards greater sustainability. Sir, during the 2024 Budget, the Government announced additional investments to RIE2025 to step up research and development efforts.

My questions for the Ministry are: first, can MTI share some of the research and development initiatives and sectors the Ministry will focus on to grow our economy? Also, how does MTI plan to leverage on research and development to tap into promising growth sectors and facilitate Singapore's transition to a low-carbon economy?

Optimising Our Land Resource

Mr Saktiandi Supaat: Mr Chairman, besides labour, capital and enterprise, land is an important scarce resource for Singapore as a small country.

It is difficult to imagine that the land where Marina Bay Sands (MBS) stands today was all sea until the Marina Bay area was reclaimed from 1992 to 2004. Three months ago, it was announced that we will reclaim and create a new "Long Island" off Singapore's eastern coast, expected to be double the size of Marina Bay.

But our maritime boundaries and our shipping hub status means there is a limit to how much we can claim further land from the sea. Hence, we have been deliberate about allocating scarce land to our competing land needs, through our Concept Plan and Master Plan. In 2021, it was announced that the review of Singapore's long-term land use plans will also need to cater for uncertainties, such as land buffers, which can be quickly converted for contingency uses.

May I ask the Ministry, how does the Government ensure that we have sufficient land for our many competing land needs, such as industrial, housing and recreational needs? How can we optimise our land use and unlock our resource potential?

Energy Transition

Ms Jessica Tan Soon Neo: Mr Chairman, Singapore's power sector makes up 40% of our emissions. Singapore has set very ambitious plans to achieve net-zero emissions by 2050.

As a small country with limited renewable energy potential, it is challenging to balance delivering sustainable, secure and affordable energy. The Singapore Energy Transition (SET) was launched in 2021 as a blueprint laying out the broad plans for the power sector to decarbonise and help Singapore achieve its climate commitments. The SET involves using natural gas more sustainably, maximising solar deployment, introducing regional power grids and electricity imports; and preparing for deep decarbonisation using hydrogen and emerging low-carbon alternatives.

Can MTI share the progress of Singapore's plans to decarbonise our power sector? Is Singapore making other investments to green our power sectors with sources of low-carbon alternatives?

In Budget 2024, Deputy Prime Minister Wong announced the new Future Energy Fund with an injection of $5 billion to help the nation transition towards cleaner energy sources. What are the key initiatives that will be invested in to catalyse Singapore's transition to clean energy?

Nuclear Fusion

Mr Xie Yao Quan (Jurong): Chairman, all the energy that powers life on Earth today ultimately comes from the Sun. And so, what if we can replicate that energy production in the core of the Sun, here on Earth?

This, simplistically, is the promise of fusion energy.

I must clarify that nuclear fusion is completely different from nuclear fission. Fusion does not produce the same radioactive waste; does not risk meltdowns; and does not entail dependence on other countries for fuel, such as uranium. Given the advantages of fusion, I hope that when we say we are studying the option of nuclear energy in our future clean energy mix, our bet is weighted towards fusion energy.

And I will go further, to say that while we can and will import clean energy, through regional grids and/or hydrogen, ultimately, energy imports may not be enough and not secure enough for Singapore.

And so, I think we will need domestically produced fusion energy to secure our clean energy future in the long term.

But fusion technology is not yet mature. Furthermore, our net-zero target is 2050 and Deputy Prime Minister Wong has also said that we will take the next 20 years to build our clean energy mix. So, one could argue that we have some time, and should take some time, to decide if we want to adopt fusion. But that is only considering the energy security standpoint.

From an economic standpoint, because fusion does also presents tremendous economic opportunities for Singapore and the world, we actually have a lot less time to decide. And paradoxically, precisely because the technology is not yet mature, we should move fast.

To paraphrase my Jurong colleague, Dr Tan Wu Meng, we can be the first mover or we can find ourselves too late to move. Fusion technology has made major strides in the last two years and the real breakthroughs could come in the next five years with what the industry calls "net energy production".

This will put on track the first utility-scale plants to be constructed in the early-to-mid 2030s. Countries around the world have started to make serious moves in fusion.

The United Kingdom (UK) has announced an additional $1.1 billion equivalent, in additional funding for its fusion programme. President Biden has set a "Decadal Vision" for the US to produce commercial fusion energy by 2032. China has invested more than $1 billion dollars in fusion research and Japan has recently launched the world's biggest experimental fusion reactor.

So, if we start now, there is already catching up to do with the leaders. But if we do it right, Singapore could become the Asia-Pacific manufacturing hub for fusion machines. This would mean a whole suite of new, exciting jobs for Singaporeans – the next generation of fusion scientists, engineers and operators, all designing and making the technology that will power the world in future.

To get there, we need to do three things now.

First, lead and support our universities, research institutes and local SMEs to build capabilities to get into the fusion supply chain, get into the fusion supply chain now for prototypes and pilot plants; second, work with leading countries to design fusion-specific regulations; and third, importantly, we need to feature fusion energy in our 2050 energy roadmap to formally set the ambition for ourselves and to signal to the global fusion community that Singapore wants to be a player and wants to contribute.

On nuclear fusion, we should dream big, start now and signal strong.

Future Energy Fund

Mr Mark Lee: Chairman, the business community welcomes the Government's commitment through the $5 billion Future Energy Fund aimed at bolstering clean energy initiatives. As Deputy Prime Minister Lawrence Wong highlighted, transitioning to green energy necessitates substantial investments in infrastructure and technology, supported by Government-led catalytic funding.

Yet several businesses are already pioneering projects to import clean energy into Singapore, such as building a high-voltage subsea cable between Singapore and our neighbour. Given this context, I am seeking clarification is the Government planning to work with these businesses who are engaged in these initiatives and will the Ministry consider leveraging the Future Energy Fund to enhance the financial viability of these ongoing projects?

Addressing Our Energy Constraints

Mr Edward Chia Bing Hui: Mr Chairman, I would speak on addressing our energy constraints while meeting our climate commitments. This is crucial for our economy and environment.

Firstly, it is crucial for our national grid to efficiently integrate diverse energy sources without significant loss during transfer. In addition, it is essential to improve the efficiency of electricity generation, storage and transmission. Hence, what are MTI's plans to modernise our energy grid to efficiently integrate diverse sources of energy and improve overall efficiency? In addition, how will the modernisation of the energy grid be financed and what are the cost implications to consumers and businesses?

Secondly, as we secure our position as a data and AI centre, there will undoubtedly be a need for more energy to run the data centres and chip manufacturing facilities. So, what is MTI's projection of future energy needs to support the growth of our digital economy, especially in the domain of AI?

As the cooling demands in data centres and chip manufacturing facilities contribute significantly to the overall electrical consumption, what measures are being taken to optimise cooling in Singapore? Furthermore, with the escalating temperatures induced by climate change, Singapore faces heightened electricity usage for cooling purposes. I have highlighted in this Chamber – Singapore's strides in developing District Cooling Systems and their advantages. Are there plans to intensify efforts in this domain and cultivate local enterprises to bolster their capabilities in this sector and export this expertise to other global regions?

In Budget 2024, the Government announced an expansion of the Energy Efficiency Grant (EEG). However, we need to evaluate the effectiveness of such programmes.

Earlier this month, I asked a Parliamentary Question on the status of the EEG and the Minister shared that Enterprise Singapore has approved nearly 5,000 applications for the EEG. What is the total projected energy savings from equipment purchases supported by the grant thus far? Also, what is MTI's target for the total energy savings with the expanded EEG?

Furthermore, considering the potential for significant systemic impact, I would like to ask whether there is room for additional upstream energy efficiency grants targeting plants, buildings and districts. Such upstream savings could have substantial benefits to the overall energy conservation efforts.

The $5 billion FEF is a positive step towards cleaner energy. However, it may not suffice for our clean energy transition. Will there be future top-ups or will the fund collaborate with borrowings, such as through the SINGA bonds? How will it catalyse private-sector investments?

As we aim to reduce our carbon footprint and promote sustainable growth, our limited access to clean energy stands as a key limiting factor to economic growth. This could impact the real income growth and living standards of Singaporeans. Hence, we must address our clean energy constraints.

Strengthening Consumer Protection

Mr Chua Kheng Wee Louis (Sengkang): Despite transformative changes in how consumers engage with businesses, the approach to safeguarding consumer rights in Singapore has not evolved, appearing to maintain a somewhat indifferent stance toward consumer protections.

We only need to look at the many high-profile and recent consumer incidents in Singapore – from the Sentosa Sky Lantern Festival, the abrupt closure of gym franchises, the chronic overbooking of cruises and flights, errant renovation contractors, "lemons" in the used car trade and the unsatisfactory customer service that has become synonymous with certain carsharing and food courier operators. These are just a few of the specific areas which are found wanting when it comes to protecting the interests of consumers.

The Consumers Association of Singapore (CASE) reported a 24% year-on-year increase in prepayment losses in 2022, with consumers reporting more than $645,000 in losses. In many of these cases, you should not need a consumer association to tell you that businesses cannot just sell subscriptions and then shut down, leaving consumers with no recourse, or that a refund with "platform credits" is not quite the same as cash payments in kind, or that if an airline overbooks and is unable to accommodate your trip, it is solely on them to provide an acceptable alternative to the customers' satisfaction. Moreover, even though many used cars are sold by dealers on a consignment basis, unbeknownst to many consumers, such purchases do not fall under the "lemon law" – ironic, given the prevalence of lemons in the used car industry.

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While the Government has undertaken some initiatives to address unfair trading practices, it falls short of the robust protection framework that a first-world economy like Singapore should have. We need to transform the prevailing mindset of caveat emptor or buyer beware into one where individuals can confidently stand against the might of big business and know that the customer is not always right, but at least we will always be treated fairly.

Enhancing Consumer Protection

Mr Melvin Yong Yik Chye (Radin Mas): Chairman, I declare my interest as President of CASE. Price transparency is a core principle that safeguards our consumers and ensures that we make well-informed purchasing decisions.

To address the issue of shrinkflation, where retailers seemingly maintain the price of a product but secretly reduces the portion size, can MTI work with CASE to examine the prevalence of this practice in Singapore and encourage local retailers to deploy unit pricing in-store? Since 1 January 2023, CASE has rolled out unit pricing on more than 6,000 items listed on the Price Kaki app. With MTI's support, CASE is prepared to assist retailers to implement unit pricing.

According to CASE's annual complaint statistics, the number of complaints relating to e-commerce transactions surged by 47% in 2023. The most frequent issues pertain to failure to receive orders within delivery timeframes and failure to receive refunds. This is deeply concerning. We must take urgent actions to better protect our consumers, particularly as purchasing behaviour has shifted and many consumers now rely on e-commerce.

The Consumer Protection (Fair Trading) Act was last reviewed in 2016, a time when e-commerce had yet to boom in Singapore. I urge MTI to review the Act to account for the evolution in consumers' purchase habits. CASE stands ready to partner MTI on this so that we can all better protect consumers.

The Chairman: Minister Gan Kim Yong.

The Minister for Trade and Industry (Mr Gan Kim Yong): Chairman, let me first thank Members for their thoughtful comments.

The past few years have been very challenging. As a small and open economy, Singapore felt keenly the impact of uncertainties arising from the pandemic and structural shifts in the global economy. But we did not let this put us down. We pressed on with our transformation journey and helped our businesses turn challenges into opportunities.

During the COVID-19 pandemic, we experienced our worst recession since Independence. Our top priority then was to support our companies through this unprecedented crisis and protect jobs for Singaporeans.

Even before the pandemic was over, new challenges surfaced. Global food and energy prices rose sharply due to supply chain disruptions, which then led to global inflation. Interest rates were raised, as central banks around the world sought to counter inflationary pressures. Geopolitical contestation and strategic competition between major powers, such as the US and China intensified. Conflicts in Ukraine and the Middle East erupted and there is a growing urgency to address climate change.

Amidst these challenges, our economy grew 1.1% in 2023. For 2024, we expect our GDP to grow by between 1% and 3% and inflation to moderate.

Nonetheless, our external environment remains volatile and uncertain, as several Members have pointed out. Many businesses, especially SMEs, are concerned about increased business costs and access to financing. They have also asked for more support to pursue transformation and training to stay competitive and capture new opportunities.

Mr Shawn Huang asked about support for enterprises. We are setting aside $1.3 billion for the Enterprise Support Package to address these near-term challenges. The Package has three components: Corporate Income Tax Rebate to help with cash flow; adjustments to the Enterprise Financing Scheme to help businesses access loan financing; and an extension of the SkillsFuture Enterprise Credit to support transformation and skills training efforts.

First, let me explain the Corporate Income Tax Rebate. Companies due for corporate income tax in Year of Assessment 2024 will receive a 50% rebate, subject to a cap of $40,000. To ensure that smaller companies, even those that pay little or no income tax, can also benefit from the rebate, companies that employed at least one local employee in 2023 will receive a minimum cash payout of $2,000. The corporate income tax rebate will benefit many enterprises, especially the SMEs.

Next, we will adjust the Enterprise Financing Scheme (EFS) that facilitates access to loan financing. During the pandemic, we significantly enhanced the EFS to provide stronger support for businesses. We have since reviewed and adjusted the EFS to better suit current business needs. For example, internationalisation plans were significantly disrupted during the pandemic when global markets came to a standstill. To help companies sustain their efforts, we doubled the maximum loan quantum for the EFS-Trade Loan to $10 million and increased the Government's risk-share to 70%.

One company that has used the EFS to internationalise is Apeiron Bioenergy, which produces clean fuel from waste products. The company tapped on the EFS-Trade Loan and EFS-Green to deliver its first contract of used cooking oil, a clean biofuel feedstock to the US market and expand its facilities in Asia and the United Arab Emirates.

As the global markets are still recovering, we will extend the enhanced maximum loan quantum of $10 million for one year until 31 March 2025, but at a 50% risk-sharing. This is in line with Mr Mark Lee's call to support Singapore businesses as they expand overseas.

During the pandemic, we had also expanded the EFS-Project Loan scheme to include domestic construction projects which were badly affected. Most construction projects are now back on schedule and the sector is generally recovering, although some companies are still facing challenges. Hence, we will extend the support for domestic construction projects under EFS-Project Loan (Domestic) by one year until 31 March 2025 to help the industry, but at a lower maximum loan quantum of $15 million instead of $30 million.

In addition, we will permanently increase the maximum loan quantum of the EFS-Working Capital Loan to $500,000. We temporarily increased the cap during the pandemic when businesses were facing severe cash flow constraints. Since then, while cash flow has improved, the working capital needs of SMEs have, in fact, increased, amidst the increased business volumes and costs. Making the higher maximum loan quantum permanent will better support our SMEs.

Since 2020, more than 30,000 enterprises have utilised the SkillsFuture Enterprise Credit (SFEC) to support the training and upgrading of their employees and to pursue enterprise transformation.

This includes Aux Media Group. This is an event and concert organiser. It used SFEC to offset costs of their digital workflow transformation project. The company also used SFEC to send their employees for SkillsFuture training courses, ranging from human resource to drone piloting, to meet the company's needs.

To allow businesses to benefit more from SFEC, we will extend the claims submission deadline by one year to 30 June 2025. We will continue refining our support for enterprises to deepen workforce and enterprise transformation.

Minister of State Low Yen Ling will also speak about additional measures to specifically support our heartland enterprises.

While we tackle near-term challenges, we must continue to invest in our longer-term future and build a resilient and vibrant economy. To achieve this, we need to be GUTC. By GUTC, we mean four strategies: Grow our economy; Unlock our resource potential; Transform our businesses; and Connect to strengthen our status as a global business hub and, therefore, GUTC.

Let me focus on our strategy to grow our Singapore economy, while each of my colleagues will elaborate on the other three strategies.

We will grow our economy through three key thrusts: leveraging our trade networks; promoting investment and the adoption of new technologies; and developing our talent.

First, on leveraging our trade networks. Singapore is well-placed to benefit from growth in our region and beyond. Our extensive connectivity has been and will continue to be our key competitive advantage. Singapore has established a strong reputation as a well-connected, reliable and trusted logistics and transportation hub. Amid shifts in global supply chains, businesses and investors continue to be attracted to Singapore due to our robust infrastructure, pro-business policies and skilled workforce. FDI has grown by over 50%, from $1.9 trillion five years ago, to reach approximately $2.9 trillion as at end of 2023. This trajectory is expected to continue.

To sustain our economic growth, Singapore, as a small economy, cannot afford to turn away from the global market; nor can we have the global market turn away from us.

Mr Liang Eng Hwa, Ms Jessica Tan and Mr Sharael Taha asked what the Government is doing to ensure Singapore will remain competitive and attractive to global investors. For a start, we must expand international and regional connectivity by continuing to strengthen the rules-based trading architecture, to widen our economic space and tap on global opportunities. This will allow us to evolve innovative trade cooperation models across different geographies, enlarge our community of trading partners and establish connections with new markets.

We will continue to deepen cooperation with our global partners to grow trade and attract investments. We will engage our partners through current platforms, like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Indo-Pacific Economic Framework for Prosperity, as well as via bilateral partnerships, like the US-Singapore Partnership for Growth and Innovation, China-Singapore FTA and the India-Singapore Ministerial Roundtable.

Closer to home, the Southeast Asian region is projected to grow more quickly than the global economy over the next five years.

Within ASEAN, trade in goods grew by about 30% from US$645 billion in 2018 to US$857 billion in 2022. ASEAN, as a grouping, is also strengthening external relations with our partners. Under Indonesia's Chairmanship last year, ASEAN concluded negotiations to upgrade the ASEAN-Australia-New Zealand FTA. We are currently negotiating an FTA with Canada, as well as upgrading and reviewing ASEAN's Agreements with China and India.

We have also stepped up cooperation with our immediate neighbours. For example, we are exploring the establishment of a Johor-Singapore Special Economic Zone to bolster our economic cooperation with Malaysia and Johor. We signed a Memorandum of Understanding (MOU) in January this year and agreed to work towards improving cross-border flows in goods, people and investments.

Mr Liang Eng Hwa, Ms Foo Mee Har and Mr Neil Parekh asked how MTI intends to capture future growth opportunities.

First, as announced by Deputy Prime Minister Wong, we will enhance our investment promotion toolkit by introducing a new Refundable Investment Credit (RIC). This is a tax credit with a refundable cash feature. RIC will support qualified firms in developing high-value and substantive economic activities in Singapore, such as the setting up of manufacturing facilities or an expansion of these facilities, commodity trading, R&D and innovation as well as decarbonisation activities.

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As pointed out by Ms Mariam Jaafar, the RIC will bolster our competitiveness in attracting and anchoring quality investments to create more opportunities and good jobs for Singaporeans.

We will also help our companies ride the global wave of technological advancement and pursue opportunities in new growth areas, such as advanced manufacturing, AI and sustainability. By being early movers and adopters, we can sharpen our companies' competitive edge, capture the rapid growth of these new markets and develop world-leading enterprises.

Manufacturing is a key pillar of our economy. As Mr Saktiandi Supaat has noted, it contributes about one-fifth of our GDP and employs about one-eighth of our workforce. We will double down on our strengths in robotics and automation to target high-value opportunities in advanced manufacturing and secure new growth pathways.

In the biomedical sciences sector for example, the nascent field of Precision Medicine has strong growth potential, with a global market size of US$74 billion in 2022, which is expected to grow at an average rate of 11.5% a year up to 2030. We will identify and nurture potential promising local startups, with the potential to develop cutting-edge solutions.

One such company, Engine Biosciences, has developed a proprietary platform which uses AI, machine learning and gene editing to discover gene interactions to yield promising new therapies. Engine Biosciences is currently in the pre-clinical stage and intends to leverage its R&D base in Singapore to expand into the international market.

The unprecedented growth of AI will accelerate in the coming years, with its market size projected to rocket from US$150 billion in 2023 to US$1.35 trillion in 2030. We must stay abreast of these developments and ensure that our businesses can reap the AI dividend. We will take both a company and sectoral approach to drive AI adoption. We will partner 100 companies to build internal AI capabilities, develop and adopt AI solutions. We hope that each of these companies will become a Centre of Excellence (CoE) for AI in its own right.

We will also set up sectoral AI CoEs to address sector-wide use cases and build domain-specific capabilities. As a start, A*STAR will launch a manufacturing sector AI CoE by the end of this year. The CoE will convene stakeholders from industry, research and the startup scene to develop AI-enabled solutions that addresses use cases in the manufacturing sector.

We will learn from this pilot and study how we might expand the same thing to the other sectors. The transition to a low-carbon and sustainable economy will also present new green growth opportunities. For instance, we have established a vibrant carbon services and trading ecosystem to take advantage of the growth in the global carbon market.

There are also opportunities to develop sustainable products, such as biofuels, Sustainable Aviation Fuel and green chemicals, which support our green growth objectives. For example, Neste expanded its biorefinery in Singapore in 2023, making us the world's largest producer of Sustainable Aviation Fuel. In addition, chemicals company Arkema has built its bio-factory on Jurong Island to produce high-performance polymers made from sustainable materials.

We are also working closely with the marine and offshore engineering (M&OE) sector to ensure that it is productive, globally competitive and well-positioned to leverage new growth opportunities. This requires the sector to rethink its operating model, pivot to higher-skilled, higher-value activities and reduce its reliance on foreign manpower. To catalyse this shift, we will adjust the marine shipyard sector's concessionary Dependency Ratio Ceiling (DRC), from a ratio of 3.5:1 to 3:1 in 2026. We will monitor developments in the sector before making further adjustments.

We will also proceed with the increase in foreign worker levies announced in 2013, but deferred in view of the M&OE downturn and COVID-19 pandemic. These moves will be discussed further in MOM's COS segment, as part of the Government's broader manpower strategy.

We recognise that transformation, while necessary, is never easy. We will thus provide the M&OE Support Package, totalling around $100 million over the next five years – to help companies transform, uplift our workers and position the M&OE sector for new growth opportunities. This will enable us to become a globally impactful and thriving hub that can deliver sustainable solutions in an M&OE value chain.

One growth opportunity that we are exploring is offshore wind, with a global market which is projected to grow rapidly at an average rate of 22% per year until 2030. Some companies have already embarked on this journey, such as Seatrium, which is working on several large offshore wind projects. We will identify and capture opportunities along the value chain and anchor them in Singapore.

One promising local startup is BeeX, which designs, builds and deploys hovering autonomous underwater vehicles (HAUVs) to conduct inspections of offshore windfarms. BeeX built its first HAUV with a $500,000 Startup SG Tech grant. Its solutions have been validated internationally and it is currently working on a high-specification, second-generation HAUV+.

I have outlined our plans to continue attracting quality investments into Singapore. We will also support enterprise collaborations and invest in our innovation ecosystem. First, Ms Foo Mee Har, Mr Mark Lee and Mr Edward Chia will be happy to know that we will enhance the Partnerships for Capability Transformation scheme, or PACT scheme.

Today, the scheme encourages partnerships between larger and smaller enterprises, between MNCs, large local enterprises (LLEs) and the SMEs, on supplier development and co-innovation. Going forward, we will expand PACT to more industries and modalities, including capability training, internationalisation and corporate venturing.

Allow me to share a few examples of collaborations facilitated by PACT. GlobalFoundries was able to work closely with its supplier, Forefront AM, to scale up its capability in additive manufacturing, so that it can repair some of GlobalFoundries' high-value semiconductor manufacturing tools. Another example is SATS, which has organised capacity building workshops with PACT support, to help its SME suppliers understand and track their carbon emissions. SATS also intends to encourage its suppliers to embark on decarbonisation initiatives.

We aim to facilitate 100 new PACT partnerships over the next five years. This will provide more opportunities for SMEs to level up their capabilities, enhance their competitiveness and plug into global and regional value chains.

We will also invest in innovation efforts, including upstream research, translation and commercialisation. Since its launch in 2016, the Startup SG Equity Scheme has catalysed over $2.3 billion in private-sector funding for over 230 Singapore-based startups, including in new growth areas, such as advanced manufacturing, pharmaceuticals and biologics or pharmbio, medical technology or medtech, and agriculture-food technology or agri-food tech. And we are working on further enhancements to the Startup SG Equity Scheme and will announce details later this year.

Third, while we will need to continue tapping on global talent to complement our local workforce to grow our economy, we will redouble our efforts to strengthen our local talent pool, so that Singaporeans can benefit from this growth. As Mr Liang commented, amidst this intensifying global competition for leadership talent, we will have to ensure that our companies have access to a pipeline of Singaporean corporate leaders in line with recommendations from the Forward SG consultation.

We will introduce a new initiative, the Global Business Leaders Programme (GBLP), to support companies in sending their Singaporean middle to senior managers with leadership potential, for overseas postings and other developmental opportunities. GBLP participants will be inducted as Singapore Leaders Network Fellows, where they will receive mentoring and grow their professional networks.

The GBLP will support companies in their regionalisation efforts and in growing a pipeline of Singaporean corporate leaders who can take their businesses to new heights. This will complement MOM's local workforce development efforts to support career resilience, better career health and longer career trajectories for all levels of workers.

Sir, in summary, I spoke about providing near-term support to our enterprises via the Enterprise Support Package, to help them address immediate challenges. And at the same time we need to invest in our longer-term future and drive economic growth. We can achieve this by leveraging our trade networks, spearheading the adoption of new technologies and developing our talent.

Economic transformation has always been a key priority for us. Deputy Prime Minister Heng earlier underlined the importance of transformation in our growth journey. Indeed, transformation is the constant in this fast-changing world. We must remain agile and continue to grow our economy by seizing new opportunities, making ourselves ever more productive, innovative and competitive.

While there will still be uncertainties and challenges in the future, if all of us work together as Team Singapore – with workers, businesses, trade associations and chambers and unions each playing our part, we can remain relevant on the global stage and enhance our heft. We can seize new opportunities for growth, improve the lives of all Singaporeans and build our shared future together. [Applause.]

Mr Chairman: Dr Tan See Leng.

The Second Minister for Trade and Industry (Dr Tan See Leng): Mr Chairman, Singapore is a small nation with limited resource endowments. Despite so, we have grown to become a leading global city that we are today. But to sustain this growth, we will need to maximise our resource potential and turn these potentials into the next bound of success.

My speech today would touch on how we can continue to push boundaries, to unlock our resource potential and to bring in new opportunities in four areas: first, energy and carbon; second, research and development; third, manpower; and last but not least, land.

First, on energy and carbon. Climate change poses an asymmetric, long-term challenge to all countries across the globe. As a low-lying island-state, Singapore is disproportionately impacted by climate change. Our resource constraints are more stark compared to many other countries, which makes decarbonisation even more challenging.

But even so, we firmly believe that Singapore can rise above these constraints and achieve and thrive in a net-zero future. Today, I will share more about our efforts to invest in new decarbonisation pathways, while ensuring a stable power system.

First and foremost, a stable electricity market along with a reliable and secure power system must be the foundation upon which we advance Singapore's energy transition. Over the past year, the Energy Market Authority (EMA), has implemented guardrails to strengthen our electricity market structure and reduce market volatility. These include: one, introducing a centralised process to facilitate and guide private investments in new generation capacities; two, placing more stringent regulatory requirements on electricity retailers to better protect consumers; and three, implementing a Temporary Price Cap mechanism to mitigate extreme price volatilities in the wholesale electricity market.

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This year, we will also centralise the procurement of natural gas to ensure longer-term fuel adequacy for our power plants. Alongside a stable electricity market, we need a reliable grid. Mr Edward Chia asked whether our power grid is robust enough to integrate diverse energy sources. While largely fueled by natural gas, our grid today already takes in other energy sources, such as solar power and waste-to-energy, while maintaining high grid reliability. Over the next few decades, we expect more diverse energy sources to enter our grid and we are upgrading our grid management systems in preparation for this.

Looking ahead, we expect electricity demand to grow with increasing digitalisation, economic growth and electrification, as Mr Edward Chia mentioned. EMA works closely with agencies to ensure that we have sufficient capacity to meet this demand. That is why we have launched tenders for new generation capacity in the form of greener and more energy-efficient power plants. EMA recently awarded YTL Power Seraya the right to build, own and operate a Combined Cycle Gas Turbine (CCGT). This CCGT will have a carbon intensity 10% lower than that of existing CCGTs in the system. It will be the third CCGT to be built that can run on hydrogen, which is a potential low-carbon fuel and will be up by 2028. This is in addition to Keppel's and Sembcorp's hydrogen-ready plants which are currently under construction.

Singapore's energy transition will be a multi-decade journey. In the meantime, natural gas will still play an important role over the next one to two decades. SLNG is, therefore, developing a second Liquefied Natural Gas (LNG) terminal to meet our gas needs and to strengthen our energy security.

While natural gas is the cleanest fossil fuel, we have to green our power supplies if we want to achieve our net-zero commitments. We are working on realising low-carbon electricity import projects and studying low-carbon energy alternatives, such as hydrogen and ammonia. Ms Jessica Tan would be glad to know that we have made good progress. For low-carbon electricity imports, our target is to import up to four gigawatts (GWs) of low-carbon electricity by 2035, making up around 30% of Singapore's electricity supply then.

To Mr Edward Chia's question, we are on track to achieve this target. Last year, EMA granted Conditional Approvals to import up to 4.2 GW of low-carbon electricity from Cambodia, Indonesia and Vietnam. Companies are currently conducting feasibility studies and securing regulatory approvals from source and transit countries. When realised, these projects will also form the building blocks of an ASEAN Power Grid.

We are also studying the potential of various other low-carbon energy sources. For hydrogen, we will start with a small-scale pathfinder project to test and to deploy a direct ammonia combustion power plant, alongside ammonia bunkering. The Request for Proposal (RFP) to select a lead developer for this project is ongoing and we will close this later this month.

Geothermal is another potential energy source that we are studying. We will be conducting a nationwide non-invasive geophysical study to assess Singapore's deep geothermal resource potential for power generation. EMA is evaluating the RFP proposals and we will also announce the award soon.

Advanced nuclear energy technologies and fusion energy are also potential game-changers. We engage international organisations widely and countries with deep capabilities in nuclear energy to broaden our understanding of advanced nuclear energy technologies, including Small Modular Reactors. This is so that we can assess the suitability of these technologies for Singapore, once they are proven to be safe and viable.

Mr Xie Yao Quan spoke about the potential of the energy from the sun – fusion energy. While there have been significant breakthroughs in the fusion energy space in recent years, there still remain engineering challenges. Beyond the fact that there are no demonstrator plants today that can generate electricity, there are also other challenges, including the low global supply of tritium, which is an important fuel for fusion. As such, there is a big difference in opinions among experts on when fusion can be commercialised safely.

We are also keeping a close watch on the development of fusion energy and we are collaborating with overseas research entities to build up capabilities in this field. We will continue to identify capabilities in our local ecosystem that are fusion-relevant and where we could potentially play a role in the fusion supply chain.

At the same time, R&D investments, such as those under the Low Carbon Energy Research, or LCER Programme, can help us realise the potential of low-carbon alternatives and support efforts to expand the range of technological solutions suited for Singapore.

The Directed Hydrogen Programme under the LCER Programme supports research into technologies that can help Singapore import and use hydrogen safely and economically. I am pleased to announce that we will be awarding around $43 million to support six research projects. These projects collectively seek to address key challenges that Singapore faces in deploying hydrogen in areas, such as energy efficiency, durability and safety.

Beyond hydrogen, we also want to support research into emerging technologies with the potential to sprout into needle moving solutions. As part of the inaugural Emerging Technology Grant Call, we will award around $12 million to support 10 research projects, which span a range of low-carbon technology pathways, such as energy harvesting.

Lastly, our close relationships with International Organisations help us to build capabilities to accelerate energy transition. Last month, we announced the establishment of the International Energy Agency (IEA) Regional Centre in Singapore. This Centre is the IEA's first office outside of its headquarters in Paris and is also Singapore's first energy-focused international organisation. The Centre will provide technical advice and policy support to governments and regional bodies to accelerate the energy transition, for example, through scaling up the deployment of renewable energy and other clean energy technologies. We expect the Centre to be operational by the end of this year.

Members, I have spoken at length on our plans to transition and decarbonise our power sector. Despite our lack of indigenous renewable energy resources, Singapore must still embark on the energy transition to stay relevant in a world that is moving towards net-zero. I am glad that several businesses are already pioneering such clean energy projects, as Mr Mark Lee pointed out earlier.

But to decarbonise, we will need to deploy clean energy at scale. This will likely involve nascent technologies, come with significant commercial and geopolitical risks, or require high upfront capital expenditures. All these would require substantial investment from governments and companies alike.

The International Renewable Energy Agency earlier estimated that the world would require an estimated US$150 trillion worth of investments across all energy transition technologies to achieve net-zero emissions by 2050.

In instances where projects are of strategic value to Singapore's decarbonisation journey, the Government will provide support to catalyse the development of such projects. This will help Singapore secure reliable and cleaner energy supply, at the scale and speed required to meet our climate goals.

It is with this in mind that the Government will set up the new Future Energy Fund, as announced by Deputy Prime Minister Lawrence Wong. The Fund can support the infrastructure investments we need to deploy low-carbon technologies, such as for hydrogen, when they are viable.

And we need to start saving for these investments now. We will establish the Fund within EMA, with an initial injection of $5 billion and we will make legislative amendments to establish the Future Energy Fund later this year.

Mr Edward Chia asked if we would need to top up the Fund further. We will do so when our fiscal space allows for it and depending on our development plans for the energy transition. The path ahead is not straightforward and we will need to adapt and be nimble when circumstances change. But rest assured that the Government will take great care in charting our energy transition, to ensure that even as we decarbonise, we maintain our energy security and we will remain cost-competitive. In particular, we are mindful of the potential impact of energy transition on electricity prices.

I would like to assure households and businesses that we will do our utmost best to calibrate the trajectory of our energy transition and its impact on electricity prices. We will also continue supporting our lower- and middle-income households to mitigate the impact that the transition will have on electricity costs and we will continue helping our businesses reduce energy consumption, improve energy efficiency and, in turn, lower their energy costs.

Members, other than the power sector, our industrial processes also contribute a significant portion of Singapore's emissions. We will need to actively pursue pathways to decarbonise our industrial processes.

As mentioned by Senior Minister Teo Chee Hean in Prime Minister's Office's COS, one such pathway we are developing is carbon capture and storage (CCS). CCS involves the capture of emissions from point sources, such as chemical plants or power plants. The carbon dioxide is then transported to suitable geological formations where they are injected and stored deep underground.

We have been engaging companies interested to pursue CCS. Today, I would like to share that the Government will be working with S Hub, an industry consortium comprising ExxonMobil and Shell, to study the viability of developing a cross-border CCS project capturing emissions from Singapore. The Government will work with S Hub to evaluate the techno-economic feasibility of aggregating emissions from Singapore and collaborate with regional partners to study potential carbon dioxide storage sites.

We are keen to work with like-minded partners to make cross-border CCS projects a reality and realise the potential of our entire region as a CCS hub. Singapore recently signed a Letter of Intent (LOI) on Cross-Border CCS with Indonesia. Under the LOI, both countries will set up a workgroup to advance CCS cooperation between Singapore and Indonesia.

Moving on to R&D. Continued investment in R&D is critical in ensuring that we maintain our edge and competitiveness in other areas. As mentioned in the Budget speech, the Government will invest an additional S$3 billion to our RIE2025 efforts to keep up our momentum in research.

To Ms Jessica Tan's, Mr Shawn Huang's and Mr Neil Parekh's questions, MTI will double down on our efforts to support R&D investments, particularly in deep tech R&D for critical and novel technologies. Deep tech typically requires a long development in commercialisation period due to the extent of tech validation and the risks involved. Investments in deep tech would enable us to entrench R&D that diversifies our economy by growing new industry clusters, thereby generating new economic opportunities for Singapore, propelling us towards innovation-led growth.

We are creating new R&D translation platforms and providing additional resourcing to catalyse four key sectors.

First, A*STAR will establish a National Semiconductor Translation and Innovation Centre (NSTIC) at a budget of about $180 million to foster collaboration and boost R&D translation outcomes in the areas of flat optics and silicon photonics, both of which are emerging areas relying on semiconductor fabrication technologies. Semiconductor is a sector with significant barriers to entry due to high investment costs, with clean rooms and machines that can cost millions of dollars. NSTIC aims to help companies and researchers overcome this by providing them access to semiconductor infrastructure and supporting prototyping and small volume manufacturing.

I recently visited MetaOptics Technologies, a local startup that designs and fabricates flat lens and optical devices. These flat lenses are hundred of times thinner than a human hair, allowing for size reduction for devices like optical sensors and cameras. MetaOptics intends to leverage NSTIC's research expertise and fabrication services to make devices locally, instead of having to outsource to overseas foundries which have higher costs and longer turnaround times. MetaOptics is also being supported by two scientists seconded to the company from A*STAR, through its Technology for Enterprise Capability Upgrading Programme (T-Up), which Mr Desmond Choo asked about earlier.

Second, A*STAR has launched a $97-million Nucleic Acid Therapeutics Initiative (NATi) to position Singapore as the regional node for research, clinical translation and commercialisation of RNA drugs and vaccines.

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Most of us would have heard about RNA vaccines during COVID-19. Singapore has actually been developing capabilities in RNA research over the years through sustained investments in biomedical research and development. Through NATi, Singapore will accelerate the development of RNA drugs and vaccines and grow our RNA manufacturing capabilities. We currently have at least 10 local SMEs across the value chain for RNA therapeutics, and NATi will support and grow more local SMEs and startups and attract more companies here.

Third, A*STAR will launch MedTech Catapult – a $38 million initiative to accelerate the development of novel Life Science Tools and Medical Devices, by working with companies and product owners to translate research into commercial products.

This initiative will help intermediaries, like local contract manufacturing organisations, to move up the value chain so that they can not only manufacture but also develop their own MedTech product design and capabilities. Through MedTech Catapult, we also aim to train and upskill product engineers who can then go on to serve in the industry.

Fourth, a new tranche of about $60 million funding will be provided to the National Robotics Programme (NRP).

Started in 2016, the NRP has delivered good outcomes, such as the development of the Robotics Middleware Framework, which enables different brands of robots to work seamlessly with each other by standardising communications and de-conflicting navigation routes.

Moving forward, the NRP will step up translation of our robotics research and development capabilities, particularly in sectors, such as manufacturing, logistics, facilities management and healthcare. It will do this through “RoboClusters”, bringing together public sector researchers, end-users and robotics companies to foster collaborations and co-development of solutions with economic potential. NRP will also help to accelerate the growth of promising Singapore-based robotics SMEs and startups.

Ms Jessica Tan asked how MTI will grow the talent pool in research and development.

Together, the four platforms that I just mentioned are expected to train over 200 specialised research talent, such as product and robotics engineers and research scientists. They will also deliver more than 75 projects and licence out over 40 technologies, amongst other outcomes. All these will contribute to the development of an open and inclusive ecosystem where research, innovation and enterprise can come together to create commercially meaningful outcomes for businesses and help our industry partners to scale-up.

Third, on my pet topic, manpower. We need to strengthen our workforce competitiveness in tandem with our economic competitiveness. As Minister Gan shared earlier, we are committed to creating good opportunities for Singaporeans as we grow our economy. To empower Singaporeans to seize these opportunities, our workforce will need to be equipped with the relevant skillsets.

So stay tuned, I will share more details in my MOM COS speech on MOM's plans to support workers at all levels to enhance their employability, strengthen their career health and acquire overseas work experience; and how the Global Business Leaders Programme, as mentioned earlier by Minister Gan, will support Singaporean middle to senior managers with leadership potential to acquire the relevant overseas work experience and leadership skills to become corporate leaders.

This will complement the bilateral manpower programmes MTI is developing with Indonesia and Vietnam. When launched, the Tech:X programme with Indonesia and Innovation Talent Exchange (ITX) programme with Vietnam will allow Singaporeans to pursue work stints in the areas of technology and innovation in Indonesia or Vietnam respectively, and vice versa. This will support our companies and Singaporeans to tap on exciting opportunities in our fast-growing region.

Finally, on optimising our scarce land resource. Mr Saktiandi Supaat asked about the Government's efforts in ensuring that we have sufficient land to meet our competing industrial, housing and recreational needs. The Ministry of National Development will share more on the Government's master-planning process and how we balance across competing land use needs.

In planning for industrial estates, the JTC Corporation seeks to optimise industrial land usage through land intensification and recycling, as well as the siting of industrial uses within mixed-use districts near to housing and recreational facilities. Our upcoming new industrial districts like Punggol Digital District (PDD) and Jurong Innovation District (JID) are designed to embody this philosophy.

PDD will house the new Singapore Institute of Technology campus alongside digital tech companies to create opportunities for applied learning and to build a robust pipeline of local technological talent. One of PDD's anchor tenants is United Overseas Bank, which will be building its 300,000 square foot global technology and innovation centre to house around 3,000 technological talents. JID supports Singapore's Manufacturing 2030 ambition to become a global business, innovation and talent hub for advanced manufacturing.

The anchoring of companies alongside A*STAR's Advanced Remanufacturing and Technology Centre (ARTC), which has collaborations with about 100 industry players – inclusive of Government agencies, research institutes and academia; will help to accelerate innovations to create an advanced manufacturing ecosystem.

JTC will also rejuvenate key industrial estates in Sungei Kadut, Ang Mo Kio and Kallang-Kolam Ayer. JTC's tenants can look forward to smarter and more sustainable facilities and infrastructure. Suitable existing buildings and structures will also be identified for potential adaptive reuse and will serve as activity nodes for workers and the surrounding community. More details will be provided within the Urban Redevelopment Authority's (URA's) Draft Master Plan 2025.

Mr Chairman, to conclude. I spoke about how we would unlock potential in the areas of energy and carbon, research and development, land and manpower. That said, the path forward would not be easy. In fact, it has never been easy for a resource-constrained nation like Singapore. But as the Chinese saying goes, "时势造英雄", which translates to "tough times create not just heroes, but also heroines".

That has been our story. We were small, with no natural resource endowment. But together, our people managed to make it work, by carefully optimising whatever resources we have coupled with human ingenuity and innovation. With good planning and strong support from businesses and Singaporeans, I am confident we can and we will be able to unlock our resource potential to strive for the next bound of growth. Only through this way, our businesses can continue to stay competitive, keep our edge and bring more opportunities and benefits to Singapore and Singaporeans for many more decades to come.

The Chairman: Minister of State Low Yen Ling.

The Minister of State for Trade and Industry (Ms Low Yen Ling): Chairman, the world we face today is vastly different from what it used to be. Earlier, Minister Gan Kim Yong shared how the global uncertainties have strained our small and open economy. It is no longer business as usual. Change, continual transformation and innovation form the present order of things.

To thrive in the new normal, we need a positive mindset to embrace transformation. Change is always challenging. We know that. However, if you recall, during the COVID-19 pandemic, our businesses managed to overcome the resistance to change, including the heartland enterprises. I will touch on that later.

Our enterprises have shown the ability to transform to secure a better future. I want to assure all the Members that MTI and our economic agencies, the Government is committed to supporting our businesses' transformation journey for the long haul.

Today, I will elaborate on how the Government is ramping up critical support for companies to transform and thrive. As highlighted earlier by Mr Shawn Huang, we are determined to help businesses seize fresh opportunities in new growth areas, such as sustainability and digitalisation.

I will also delve into how, for instance, we will drive sectoral transformation for the M&OE industry as mentioned by Minister Gan Kim Yong earlier; and continue the momentum of positive change in our heartland enterprises. I will also share how the Government will help accelerate the green transition of our Singapore enterprises to benefit and to future-proof our business.

In addition, I will touch on how we will help companies capture emerging digital opportunities for their next bound of growth. Finally, I will update you all on how we will deepen our partnerships with TACs, as mentioned by many Members in their cuts, to drive industry transformation plans and efforts.

Sir, to help Singapore companies and our industries future-proof themselves and transform, the Government has rolled out 23 Industry Transformation Maps (ITMs) and refreshed the plans for 2025. These efforts cover strategic areas such as innovation, digitalisation, jobs and skills, internationalisation, productivity and sustainability. Many sectors have shown progress in their roadmap and we will not let up our efforts to support their transformation.

The M&OE sector, as Minister Gan has mentioned earlier, is undergoing substantial changes. I agree with Mr Shawn Huang that this traditionally labour-intensive sector will need to transform to stay competitive. To this end, we aim to turbocharge the M&OE sector to capture emerging opportunities in areas, like offshore wind and maritime decarbonisation.

Today, several trailblazers in the sector have pivoted their businesses to serve in these growing markets that I mentioned.

I will give you a quick example. One company that really stands out for raising their green capabilities is Penguin International. Now, this is a homegrown shipbuilder, homegrown ship owner and one of the world's largest aluminium shipbuilders. Penguin International has spent the past few years future-proofing themselves, building up their in-house capabilities in designing, constructing and operating green vessels. Currently, the company is working with Shell to build and operate three electric ferries.

These eco-friendly ferries are expected to cut carbon dioxide emissions by about 6,000 tonnes annually. How much is 6,000 tonnes? This is comparable to the environmental impact of roughly 18,000 one-way road trips from Singapore to Bangkok. That is the impact of three electric ferries.

In the next five years, MTI will support the M&OE industry's transformation with a $100-million Support Package for enterprise and workforce transformation. Companies can raise their productivity with funding support from the Productivity Solutions Grant (PSG) and also strengthen their new capabilities with the help of the Enterprise Development Grant (EDG).

Besides offering near-term transitional support for M&OE companies to fulfil their pre-committed contract deliveries, we will refresh the M&OE Industry Digital Plan to encourage greater adoption of sector-specific productivity-boosting digital solutions as well. To equip our M&OE workers for the future, Workforce Singapore and Enterprise Singapore will work together and develop an M&OE Jobs Transformation Map that charts emerging career pathways and highlights capability-building opportunities.

In addition, new career opportunities are being identified. The Association of Singapore Marine and Offshore Energy Industries (ASMI), Workforce Singapore and Enterprise Singapore will work together and launch the Marine Digitalisation Champion Programme later this year.

This will equip Singaporeans with fresh digital skills for higher-value work in the M&OE sector. Furthermore, Workforce Singapore will expand its Career Conversion Programme to include offshore wind to develop local, mid-career talents for offshore wind farm development and operations.

Crucially, we will lay the foundation for a strong talent pipeline by nurturing interest in M&OE careers amongst our youth. MTI will work closely with the industry and ASMI to enhance the sector's attractiveness and encourage more M&OE companies to offer industry scholarships.

I am glad that together with our agencies, ASMI has developed a new Industry Plan that sets out the strategies to enable the businesses to seize new green growth opportunities and get equipped for longer-term transformation. ASMI will share their plans in the next few months.

Sir, over in the heartlands, we are see encouraging signs of growing business transformation. Ms Foo Mee Har, Mr Saktiandi Supaat and Mr Shawn Huang they spoke very passionately about this topic. I want to assure them that our heartland enterprises are making good progress in digitalisation and retail innovation.

Today, more than 17,000 heartland enterprises have adopted e-payment solutions. More than nine in 10. Today, more than 12,000 heartland enterprises now have online presence, about two-third. Those who have embraced digital transformation have gained a bigger customer base, beyond their neighbourhoods, beyond footfall, to even online customers and some shops have even attracted overseas customers as well.

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Bee Choo Origin, a hair product company that started in Ang Mo Kio as a hair salon in 2007, is a good example. Its owner, Mdm Cheah Bee Chew, who began as a home-based hairdresser, grew her humble salon into a global hair treatment company. It began selling its products online in 2020, again due to COVID-19, and then saw their revenue rise by 25% in just three years. Today, Bee Choo Origin has 170 stores spanning 11 markets and is entering its next lap of growth under the leadership of Mdm Cheah's 34-year-old daughter, Estee.

The retail sector is evolving rapidly, with the growth of technology, e-commerce and fast-changing consumer preferences. The Government is committed to supporting the retail sector and businesses to transform, innovate and capture opportunities.

I think Members will remember last year, during the MTI-COS debate, I announced the Sprout@AMK initiative – the Chinese name is 宏茂桥创新天地, or to introduce fresh retail concepts to heartlanders in Ang Mo Kio Town Centre. I am happy to share that these novel retail kiosks will be rolled out very soon.

Alongside this, we also welcome the first batch of retailers under the Heartland Innovation and Transformation (HIT) Programme, or 创新在邻里计划, who will be unveiling their products in Ang Mo Kio.

I am very heartened that some of these retailers from these new waves of shops have come up with concepts and innovative products for better health and well-being to meet the needs of the society. I thought I would give Members a preview of some of these novel concepts. Every year, I will bring something representing the heartland enterprises. For example, this fun puzzle. This company is called Project Enigma, and they use 3D printing to produce this puzzle and many other puzzles as well as toys to improve people's learning and health. Besides their retail kiosk in Ang Mo Kio, Project Enigma has started a puzzle museum and library at Henderson Community Club (CC) and it is also running community workshops. So, they do not just confine their presence to their shop. They went out beyond that to the CCs to do events to raise awareness.

My MTI colleagues have placed many of their interesting puzzles and toys in the Members' room because we are keenly aware that after one whole week of Budget and COS debates, Members might want to tinker with this and exercise different parts of your brain muscles.

Another interesting example is Tea Dojo. Now, let me show Members. Tea Dojo offers freshly brewed, healthier, syrup-free bubble tea. I alerted Minister Ong Ye Kung and the Health Promotion Board that I am going to do this. The nutri grade of this oolong tea, the peach oolong tea, is grade A. Today, we brought three flavours: peach oolong as well as grape boba, and the third flavour is mango pomelo. We have prepared many of these drinks and after we have the clarification time, we can all have our break soon and Members can choose from any of the three flavours.

Mr Chairman, you work very hard. I have set aside two cups for you in your office and, if you need more, you can let us know.

So, this is our freshly brewed, healthier, syrup-free bubble tea made from a specially invented tea machine. Many of our heartland enterprises are coming up with novel concepts, business models and revenue models.

Besides the retail transformation in Ang Mo Kio, we will pilot two heartland rejuvenation projects in Bukit Gombak and Tampines West. Bukit Gombak Neighbourhood Centre will be turned into a Modern Heritage Heartland Hub or 邻里特色文化基地. From 5 to 7 April next month, Bukit Gombak will hold the Rasa Gombak Day Out, a first of its kind festival that will showcase the history and heritage of the popular neighbourhood centre. Over at the other side of the island, Tampines West Neighbourhood Centre will be transformed into a Heartland Events Hub, or 新兴社区活动站.

Last October, Tampines West Merchant Association worked with the Singapore Retailers Association (SRA) to organise Wunderground. This was a pop-up event featuring collaborations between urban city lifestyle brands. The event at the heartlands attracted more than 30,000 visitors in just 10 days, an average of 3,000 a day. Residents can look forward to more such events in the future.

In the past three years, we have ramped up our efforts to transform and to revitalise the heartlands. We supported the Federation of Merchant Associations Singapore (FMAS) and Heartland Enterprise Centre Singapore (HECS) to hold more than 60 placemaking activities all over Singapore in different neighbourhood centres, including the three successful runs of the Heartland Festival.

Through these campaigns, businesses have reported a one-third increase in footfall and a 20% increase in sales. Collectively, this initiative strengthens each precinct's identity and allows businesses to differentiate their products and also enhance their value proposition.

On the ground, we are glad that heartland shops and merchants are stepping up with fresh ideas to co-curate events to make our neighbourhoods more exciting and vibrant. For example, Bold at Work is a co-working space provider and a youth engagement consultant in Jurong East. They turned parking lots in Yuhua into an interesting space for live music performance, carnival games and workshop. That, in turn, drew a lot of people to that whole place, also catalysing demand for the products and services of the heartland shops there.

We will encourage more creative ways to reach out to audiences and customers in the heartland. We will launch the Heartland Enterprise Placemaking Grant, or 邻里企业社区营造计划, to support our heartland enterprises in creating delightful experiences in the housing estates. We will make available funding of up to $10,000 for eligible heartland enterprises to organise placemaking projects.

I am sure many good ideas are out there waiting to be explored. So, we want to encourage our heartland enterprises to come forward with exciting proposals. Let us look forward to new possibilities that we can co-curate together. Chairman, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] Chairman, our SMEs are the backbone of our economy. SMEs account for 99% of the total number of registered companies in Singapore, employing up to 70% of the workforce, bringing dynamism and vitality to our economy.

Our neighbourhood businesses, besides playing an important role in the economy, also serve as emotional hubs for the community, carrying many of our growing-up memories and enhancing the cohesion of our neighbourhoods. Therefore, MTI is committed to supporting our SMEs and neighbourhood businesses, equipping them with the capabilities to address the challenges of the future economy. This includes various plans and measures to assist SMEs in their transformation as well as to revitalise neighbourhood businesses, injecting more vitality into these communities.

Over the past three years, we have supported the Federation of Merchants’ Association Singapore and Heartland Enterprise Centre Singapore in organising over 60 neighbourhood placemaking activities, including the annual Heartlands Festival.

During these events, some businesses reported a one-third increase in footfall and a 20% growth in sales. Through this series of activities, Singaporeans have gained a deeper understanding of the history and unique aspects of each neighbourhood, while neighbourhood businesses have gained confidence in building their brands, using technology to expand their customer base, and even expanding their businesses overseas. For example, Bee Choo Origin, which expanded from one outlet in Ang Mo Kio to 11 overseas markets, providing the company with new business and development opportunities.

In addition to projects led by the Government, business associations and Chambers of Commerce, our neighbourhoods, businesses have also taken the initiative to organise events. These activities transform the ordinary into the extraordinary, bringing new vitality to the neighbourhood community.

To encourage more of such initiatives, MTI has announced a Heartland Enterprise Placemaking Grant to provide eligible businesses with grants of up to $10,000 to support them in creating unique experiences for the community, driving the development of the neighbourhood economy.

Through this series of new initiatives and grants, we hope to encourage SMEs, Micro, Small and Medium Enterprises, and neighbourhood businesses to unleash their creativity, seize the opportunities for economic transformation and drive sustainable development for Singapore.

(In English): Chairman, the green transition presents both opportunities and challenges to enterprises. I want to assure Ms He Ting Ru and Mr Neil Parekh that the Government will continue to deepen and widen our support for businesses through the different stages of their sustainability journey.

First, we are enhancing our existing support to help businesses to become more sustainable through the Energy Efficiency Grant (EEG). In 2022, we launched the EEG to help our enterprises defray rising energy costs. Since then, Mr Edward Chia and Mr Mark Lee would be glad to know that almost 2,000 companies have used EEG. For example, CF F&B, a drink stall in a food court. I want to give Members examples like that so that you know that EEG is not just used by bigger SMEs but can be used by heartland merchants or even a food stall in a food court. So, CF F&B is a drink stall in a food court. They used the grant to procure three energy-efficient water heaters that led to cost savings of about 80%, 80% cost savings. We will help more businesses invest in energy-efficient equipment. From 1 April, local food services, retail and manufacturing companies can continue to receive enhanced support of up to 70%.

EEG will be open to other industries, such as maritime, construction and data centres by the end of this year. MTI is working closely with the industry to onboard additional sectors as necessary. We will also streamline the application process by consolidating all the EEG applications from different sectors on the Business Grants Portal.

EEG complements existing schemes like the Enterprise Sustainability Programme (ESP) to provide holistic end-to-end support. For example, companies can tap into ESP for consultancy support to pinpoint areas for efficiency gains before applying to buy the energy-efficient equipment under EEG.

Secondly, we will enhance the existing Resource Efficiency Grant for Emissions (REGE) by lowering the qualifying carbon abatement threshold from 500 tonnes to 250 tonnes per annum. This will enable more businesses to tap into the grant for their projects.

Finally, we will extend the Enterprise Financing Scheme (Green) or EFS (Green) till 31 March 2026 and expand its scope to cover companies adopting green solutions. As Mr Edward Chia pointed out, data centres and chip manufacturers would do well to use schemes like the EFS (Green) to reduce their emissions.

A company that has benefited from EFS (Green) is Koollogix. They provide cooling technologies for data centres. It tapped into this scheme to transform and complete a new lab facility. This, together with other transformation efforts, led to a tenfold increase in their revenue just within two years.

Sir, as the world embraces sustainable goals and practices, customers and investors will increasingly expect businesses to be more transparent about their carbon footprint. The Ministry of Finance has announced that climate-related disclosures will be mandated for large companies in Singapore in the coming years. Therefore, businesses need capabilities and resources to track and report their carbon footprint.

To this end, we will provide funding support of up to 30% to large companies to kickstart their sustainability reporting journey. While smaller companies will not be affected by the new regulations, sustainability reporting will help them to stay relevant as disclosure of carbon footprint data becomes commonplace.

Mr Derrick Goh would be pleased to know that we will provide funding support of up to 70% and work closely with carbon service providers to offer a basic sustainability reporting package for small businesses. This will complement the pre-scoped carbon accounting solutions offered under the Infocomm Media Development Authority's (IMDA) Advanced Digital Solutions Scheme.

In addition, to help businesses pursue sustainability-related collaborations while maintaining healthy competition, the Competition and Consumer Commission of Singapore (CCCS) has developed an Environmental Sustainability Collaboration Guidance Note. Sir, for businesses to be successfully sustainable, I think all of us in the House will agree workers must also keep pace. Hence, we are boosting our support for the workforce to upskill and reskill to seize new opportunities in the green economy.

Last year, we set up the Green Skills Committee to develop skills and training programmes aimed at fostering a low-carbon economy. This year, we will continue to build on two focus areas: (a) sustainability reporting; and (b) energy. To develop skills in sustainability reporting, we will provide salary support to sustainability reporting service providers to train interns. This year, we will launch training programmes for the energy sector to address clean energy skills gaps identified by the sector.

Minister Gan spoke about how Singapore is establishing a vibrant carbon services and trading ecosystem. I am glad to announce that EDB and Enterprise Singapore are working with the National University of Singapore (NUS) and Nanyang Technological University (NTU) to develop training programmes in carbon management, services and trading. These courses will certainly help workers capture their potential in this growth sector.

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Chairman, another emerging area which offers exciting prospects is the digital economy. Singapore companies have made good progress in digitalisation. In 2022, digital technology adoption by SMEs reached 94%, a 20% jump from 2018. Many of us will agree that the COVID-19 pandemic has really catalysed the adoption of digital tools and technology.

Many Members spoke during your cuts about AI. With the rise of technologies, like Generative AI, digitalisation has become more urgent and dynamic than ever before.

Currently, only 4% of businesses use AI and machine learning. We want to share more about how we are helping our SMEs to adopt GenAI and I want to assure the Members, Mr Derrick Goh, Mr Keith Chua, Ms Mariam Jaafar and Mr Neil Parekh, that MTI will support businesses in the next lap of enterprise digitalisation.

We encourage businesses to start exploring and using AI. Interested firms can tap on Enterprise Singapore and IMDA's newly-launched Generative AI Sandbox for SMEs to gain hands-on experience with GenAI. The Sandbox will feature affordable and easy-to-use solutions applicable to a broad spectrum of sectors. I will cite two ways they can use it.

For example, our SMEs can use marketing and sales solutions. This will really them to grow their topline and bottom-line. They can use GenAI to help them use marketing and sales solutions to generate unique content, such as customised emails and product images for their marketing campaigns.

Another area is customer engagement solutions, which can also allow the SMEs to engage customers on a much larger scale better. These GenAI-powered chatbots can simplify the information search process and then allow businesses to free up their resources and become more productive, so they can allow their staff to focus on higher value-add work, serve customers and maybe allow them to focus on the business development kind of functions. We want to encourage our SMEs to participate in the Sandbox and get a head start in using GenAI solutions.

Chairman, sectoral transformation, the green transition and seizing digital opportunities. The Government cannot drive these efforts alone. Many Members talked about the importance of trade associations and chambers (TACs). And indeed, TACs are critical industry multipliers we work with to drive industry transformation. Let me elaborate.

Since 2022, we have supported 30 TACs to spearhead industry initiatives benefitting some 14,000 companies through the Local Enterprise and Association Development Programme (LEAD).

We partnered with TACs to set up SME Centres island-wide to offer SMEs capability development programmes. Last year, more than 30,000 SMEs benefitted from these services. I want to reassure Mr Derrick Goh that the SME Centres will continue supporting business transformation efforts, particularly in digitalisation and sustainability.

TACs also represent the interests and needs of the respective industries and form a vital bridge between the industry, the private sector and the Government. Our close partnerships with TACs help us to better understand and address critical concerns on the ground.

Business costs and competitiveness are top-of-mind issues for many SMEs and many businesses today. We are very cognisant of that. While there is no magic bullet for these pain points, the private and public sectors and the union representatives have come together to co-create solutions to overcome these challenges.

We will form an Alliance for Action (AfA) on Business Competitiveness co-chaired by myself and hon Member Mr Mark Lee, who represents SBF. The AfA will forge solutions with the industry and adopt recommendations to help businesses become more competitive in the long term. This complements existing efforts by the Pro-Enterprise Panel (PEP) to enhance the regulatory journey for businesses.

To enable TACs to be effective change agents, the Government has invested significantly in developing their capabilities.

Mr Derrick Goh, Mr Keith Chua and Mr Shawn Huang would be glad to know that MTI is working with SBF, our apex business chamber, to develop more capability programmes for the TACs, including their staff.

Over the next five years, SBF will build shared resources for TACs to support their members in critical areas like digitalisation, sustainability and internationalisation. We will continue to work with SBF to boost the capabilities of TACs' secretariats to serve their members better. SBF will share more details on this effort in the later part of this year.

Finally, with the TACs and the industry, we will improve business practices and strengthen consumer protection. The Consumer Protection (Fair Trading) Act, or CPFTA, already provides for civil remedies for unfair practices, such as deception and false claims. Thank you to Mr Melvin Yong, who is also the President of CASE, and Mr Louis Chua for their suggestions on enhancing consumer protection.

We appreciate the close partnership with CASE, and all the work that CASE has done to support consumers. For example, CASE's Price Kaki app allows consumers to compare the prices of many different household items and cooked food and the unit pricing features makes it even easier to compare. MTI, the Competition and Consumer Commission of Singapore (CCCS) and the economic agencies will continue to work closely with CASE to protect consumer interests as consumer purchasing habits evolve.

Chairman, this sustained spirit of collaboration and cooperation between the private sector, public sector and industry associations gives us the grit, give us the resilience to overcome challenging circumstances.

Our gumption to embrace transformation will set a formidable front against the odds. Let us stay the course. Let us keep up the momentum of transformation, from reshaping industry, whether it is M&OE or heartland enterprises, energising our heartland shops as well and also seizing potential in digital economy as well as the green economy. Because by taking shared ownership of our transformation path, we will set sails of positive change and ride new waves of opportunities to reach the harbour of a thriving future for Singapore and Singaporeans. [Applause.]

The Chairman: Minister of State Alvin Tan.

The Minister of State for Trade and Industry (Mr Alvin Tan): Mr Chairman, we have recovered robustly from the difficult pandemic years. Amidst geopolitical and macroeconomic tensions, global inflationary pressures and heightened investor uncertainty, Singapore, through EDB attracted $12.7 billion in Fixed Asset Investment commitments in 2023. These projects will create 20,045 new jobs. This exceeded EDB's medium-term goals and is partly why Singapore remains Asia's most competitive economy and the world's fourth most competitive, according to the International Institute for Management Development (IMD).

As the world's Global-Asia or Singapore as a hub for cultures, ideas and commerce, how can we strengthen our position as the world's hub? First, by strengthening our appeal as a vibrant destination for both businesses and tourists alike and residents; and second, by deepening and widening our international partnerships.

Let me begin with our tourism sector, which has rebounded strongly. There has been a resurgence in visitor arrivals and an energetic revival of our city as a bustling hub of eclectic experiences.

In 2023, our international visitor arrivals recovered to 13.6 million, which is 71% of our 2019 levels, while our tourism receipts for the first three quarters of 2023 reached 98% of the same period in 2019. We have launched new local experiences to capture the winds of recovery. Minister of State Low Yen Ling was your heartland guide. I will be your tourism guide.

We opened the Bird Paradise at the Mandai Wildlife Reserve, HyperDrive at Sentosa and Van Gogh: The Immersive Experience at Resorts World Sentosa. We also enjoyed a vibrant calendar of signature events, like the Formula 1 Singapore Airlines Singapore Grand Prix or the inaugural edition of ART SG as part of Singapore Art Week. Then, we have live entertainment which resumed with unparalleled vitality, as Singapore played host to prominent acts, such as Blackpink, Ed Sheeran, Jacky Cheung and, of course, a particular act that is currently taking Singapore by storm.

Our Meetings, Incentives, Conventions and Exhibitions industry, or MICE for short, have also made a very strong comeback. In 2023, we hosted some of the world's largest MICE events, like Asia Tech x Singapore, Gastech and Herbalife APAC Extravaganza. We also welcomed new events, like the 25th World Congress of Dermatology, which is our largest medical congress to date; and the transport logistic and air cargo for Southeast Asia, with the first in the edition for the region.

Then, we have also our homegrown events, which many of you have participated in, such as Singapore International Energy Week, our Singapore International Cyber Week, the Singapore Week of Innovation and Technology (SWITCH) and, of course, the Singapore Fintech Festival, which continued year after year to attract a significant turnout.

Conference organisers tell me that they choose Singapore because of our position as a global meeting point for talent, ideas and for business. Even during massive disruptions like COVID-19, Singapore continued to deliver, safely and reliably and these conference organisers are bullish about our prospects to continue to play host to world-class events if there are disruptions in the future. So, confidence in us is strong. through world class events.

Similarly, we remain confident in our tourism sector. This year, we expect international tourism or visitor arrivals to reach between 15 and 16 million visitors and to bring approximately $26.0 to 27.5 billion in tourism receipts.

Mr Liang Eng Hwa, Mr Neil Parekh and Mr Edward Chia asked how we plan to facilitate tourism recovery and ensure we remain attractive despite intensifying global competition. We are doing so in two ways.

First, through investments. We will provide a boost to our tourism sector, through an injection of over $300 million to our Tourism Development Fund 4. This will develop and market new products and experiences, including supporting local enterprises as they develop new intellectual properties, rejuvenate existing tourism offerings and also upskill our tourism workers.

We are boosting this Fund 4 because it has introduced exciting attractions and lifestyle events here. And I got to launch some of these, including TRIFECTA, which is Asia's first snow, surf and skate lifestyle destination and also, of course, the year-round exclusive homeporting of Disney Cruise Line's latest cruise ship, Disney Adventure, which will start in Singapore next year.

Over the past two years, this fund has also helped over 100 local tourism businesses become even more productive and more sustainable. So, we encourage all of our tourism companies to make full use of the top-up to grow your business.

Second, we are also developing a pipeline of high quality and first-of-its-kind experiences here in Singapore, that we will launch in the coming years. This will help us to maintain international mindshare and strengthen our appeal as a compelling destination. Let me share some more exciting news as your in-house tour guide.

First, we are improving accessibility in Sentosa with Sensoryscape which is a new attraction that will connect Resorts World Sentosa (RWS) and Sentosa's beaches. It has multi-sensorial gardens that pique the senses and showcase digital light displays in the night. Some of us had a sneak peek and we look forward to the soft launch this month.

Staying at Sentosa at RWS, I broke ground on Universal Studios, Singapore's Minion Land just two years ago and we look forward to the launch next year. Next year, RWS will also launch the new Singapore Oceanarium which is an expansion of the current SEA Aquarium but three times its size. As part of RWS' expansion, there will also be a new waterfront lifestyle development and a driverless transport system between the mainland and RWS.

Third, we have a strong line-up of leisure and business events. Together with the suite of world-class live entertainment events, we will host high quality MICE events this year, such as the Global Sustainable Tourism Council Global Conference, which is the first in Singapore and NRF 2024: Retail's Big Show Asia Pacific, which is a significant tradeshow for our region’s retail industry.

Also, when MBS' expansion is completed in the later part of this decade, it will allow us to host more notable live entertainment and MICE events. The expansion will include a 15,000-seat world-class entertainment arena, more MICE spaces, and an iconic, luxury all-suite hotel tower with a public rooftop attraction.

3.15 pm

To continue enhancing Singapore as a vibrant lifestyle and economic hub, we must continue to build our creative economy, as Ms Usha Chandrasdas suggested. I will share how we are doing so.

First, Singapore hosts many high-quality arts and cultural experiences that enhance our attractiveness as a lively lifestyle hub or lifestyle destination. Our year-round arts and cultural calendar features events such as Singapore Art Week and Singapore International Festival of Arts, as well as cultural festivals in Chinatown, Little India and Kampong Gelam.

These events which many of you have attended are popular not just with our locals but also our visitors alike, and STB will continue to work with event organisers to improve and grow their appeal and also look for new themes, new arts and cultural experiences which have international appeal.

The DesignSingapore Council, which is a subsidiary under EDB, drives the growth of our design sector. This council provides funding and coaching for design research and product development, partners with companies to adopt design for business growth, and nurtures industry-ready design talent.

Ms Jean See also highlighted the potential of harnessing creative talent to redefine businesses.

In addition to DesignSingapore’s efforts, broad-based schemes such as our Enterprise Development Grant (EDG) will allow businesses to engage creative professionals to build their strategic brand as well as their marketing capability.

There is more good news. Singapore and China implemented a mutual 30-day visa exemption starting on 9 February 2024. We expect this to boost arrivals and spending across our retail, F&B, and tourism-related sectors. This longer visa exemption has made it more convenient for Singaporeans to travel to China for leisure and business, boosting two-way traffic.

As we continue to put Singapore on the world map, we welcome people from all around the world – not just as a tourist destination, but also as a business hub. Minister Gan shared how our trade networks help grow our economy. I will focus on how we are extending our connections to be a stronger and more vibrant business node.

Mr Neil Parekh emphasised the importance of trade to Singapore given our very small size and small domestic market. Between 2005 and 2023, our total trade in goods and services more than doubled, from around S$890 billion to more than S$2 trillion; and currently stands at around three times our GDP.

Amidst growing geopolitical tensions and protectionist trade policies, which was also a concern raised by Ms He Ting Ru, we must continue to strengthen Singapore’s global trade competitiveness. How? Let me suggest three ways: first, we must continue to advance our trade and investment with partner economies, especially in the growing markets; second, we must help our local companies to scale up and internationalise; and third, we must encourage new trade flows for in-demand areas.

Mr Parekh asked how we are helping companies to seize new opportunities in growing markets. Well, my MTI colleagues and I have been travelling the world to strengthen these economic ties. We are uncovering new markets, new business opportunities and new partners for our many companies. Some of these journeys are 30 hours one way, but they are worth doing even though they are very tiring. And I will be making more of these trips this year because Minister Gan has asked me to. But let me take you around the world from a trade and also a business lens.

First stop: let us go to India, a country I visited a few times last year. We continue to advance our collaborations with India, which the World Economic Forum projects to be the world’s third largest economy by 2030. It is already the world’s most populous nation and one of its youngest too.

Between 2012 and 2022, Singapore’s investments into India grew by more than five times. In 2022, India was Singapore’s 11th largest trading partner and India will remain a key market of strategic importance to Singapore.

At the inaugural India-Singapore Ministerial Roundtable in 2022, our countries identified five mutually beneficial areas of collaboration. And we have started to see some fruits of success from this work.

For example, on the digital front, India and Singapore operationalised the world’s first paperless Letter of Credit transaction backed by interoperable electronic Bills of Lading (eBLs) using IMDA’s TradeTrust framework. This showcases how digital tech can make international trade easier and also more accessible.

We are also helping our students gain greater exposure to India’s markets. Enterprise Singapore, in partnership with the Confederation of Indian Industry (CII) announced the India Ready Talent (IRT) internship programme in February 2024. IRT offers our University and Polytechnic students internship opportunities in India to deepen their understanding of India’s business environment.

From India let us travel to Latin America – a region I have been travelling to extensively over the last few years:

Minister Vivian Balakrishnan and I were just in Brazil in December to sign a new FTA with the MERCOSUR. MERCOSUR is the Common Market of the South comprising Argentina, Brazil, Paraguay and Uruguay. This is our first FTA with all four South American economies, which will strengthen our ties with this market comprising over 270 million people and business opportunities in infrastructure development, agri-food trade, oil and gas, as well as advanced manufacturing, just to name a few.

To date, more than 150 Singapore companies have commercial interests in Latin America. This builds on the FTA we signed with the Pacific Alliance bloc in 2022, which comprises Chile, Colombia, Mexico and Peru. With these two agreements, we have combined access to a market in Latin America of more than 500 million people, half a billion people.

From India and Latin America, let us now travel to the Middle East and Africa.

During Prime Minister's visit to Saudi Arabia and the UAE in October 2023, we signed several agreements including MOUs on recognition of halal certifications. Singapore companies can now look forward to exporting halal food products to both countries.

Africa also presents many opportunities. Africa is the most youthful population in the world and by 2050, more than a quarter of the world’s population will be African.

Last year, I joined Prime Minister Lee on his visit to Africa, where we signed agreements with South Africa and Kenya. In August, we hosted African business and political leaders at the 7th Africa Singapore Business Forum (ABSF) organised by Enterprise Singapore. This business forum attracted over 500 delegates and connected 200 businesses from Asia to Africa to explore collaborations while using Singapore as a node to facilitate Asia-African trade.

SBF led business delegations to many of these regions and we met with them on the ground. They were there to explore commercial opportunities and I invite more companies to join SBF and other business delegations to expand their reach into these very promising and high potential emerging markets.

Beyond FTAs, we are also pioneering new agreements in new growth engines.

We now have four Digital Economy Agreements (DEAs), to facilitate end-to-end digital trade by promoting the use of digital tools, enabling open and secure data flows and building trust in digital systems.

We also developed Green Economy Agreements (GEAs) to support emissions reduction while spurring economic growth and also create jobs in the green economy. Our GEA with Australia has catalysed collaborations in scientific research, green shipping corridors, and co-innovation programmes for SMEs and we invite more companies to join us along this green journey.

Through our journey around the world, we explored abundant opportunities for our companies back home. Mr Edward Chia asked how we are using these agreements. This leads me to my second point of how we are helping our companies internationalise and also enter these growth markets.

Through SBF, we actively reach out to help companies understand and to use FTAs that we have signed, including through outreach sessions and consultations. And more than 1,600 companies have benefited from these efforts in 2023.

In the past year, Enterprise Singapore also supported Singapore companies to secure deals, access new market opportunities and grow overseas through 460 overseas projects. These companies are expected to grow their annual revenue by $5.2 billion based on Enterprise Singapore’s support.

As an open economy, our firms are inevitably exposed to global supply chains impact. Ms He Ting Ru pointed out that Singapore companies are therefore having to deal with new risks. We note that she has asked specific questions on manpower which we will defer to the Ministry of Manpower to address at this point.

But the point is we cannot fully shield our companies from these risks, but we can provide financing for them and help them to build their capabilities. For example, they can use our Market Readiness Assistance (MRA) and the Enterprise Development Grant (EDG) to defray the cost of venturing outside and exploring these new markets.

We also offer a 200% tax deductible on eligible expenses for international market expansion and investment development activities through our Double Tax Deduction for Internationalisation (DTDi) scheme.

Mr Desmond Choo would be pleased to know that there are many success stories from our work in helping Singapore companies internationalise. One such company is iFAST, which is a homegrown fintech firm that provides investment products and services, digital banking and pension administration services. iFAST designed a customer acquisition and onboarding strategy for iFAST Global Bank (iGB), a UK-based digital bank and developed a go-to-market strategy to strengthen its regional presence. iFAST aims to reach $100 billion of assets under administration by 2030. We look forward to more of such success stories to strengthen Singapore companies’ presence worldwide.

Beyond signing agreements and encouraging companies to internationalise, we are also pursuing new trade flows in areas such as carbon credits as well as biofuels. We have built a vibrant carbon services and trading ecosystem for our companies. Today, there are over 120 carbon services and trading firms in Singapore, an increase from 70 since 2020. There are new entrants including firms like Bain & Company which has established its Global Sustainability Innovation Centre here in Singapore, and the International Emissions Trading Association (IETA) which opened its Asia hub here last year. We are also growing our biofuels ecosystem.

Our strong network of energy and agri-commodities traders makes us home to a growing pool of companies that trade biofuels and its feedstock, such as Mewah, which sells biodiesel globally. To produce the bio diesel they use various raw materials including used cooking oil.

We will continue to grow our ecosystem with our industry partners to better support the trade of goods and services that contribute to climate action – and make Singapore the heart of sustainable trade flows.

Sir, this year's Budget addresses the present challenges we face and charts the directions for our nation in a very uncertain future. To do all that we set out to do, we need the resources to provide and care for people and set them on a strong footing for the future. That is why the work that MTI does is so important.

MTI is at the forefront of growing our economy in a time where growth is elusive, unlocking the potential in resources like energy and our people, in light of new and exciting discoveries in tech and science, transforming our sectors to grow green and digital as we are confronted with climate change and connecting more widely and deeply to the world when instincts compel countries to look inward.

Sir, MTI will continue to do all this because building a strong, vibrant, innovative economy will help secure Singapore's future in a more tumultuous world. [Applause.]

The Chairman: We have some time for clarifications. Mr Liang Eng Hwa.

3.30 pm

Mr Liang Eng Hwa: Thank you, Sir. Much as I would like to sample the oolong tea that Minister of State Low Yen Ling recommended, I do have one question for Minister Tan See Leng. This is on the second LNG terminal. I can understand that we need this terminal to strengthen our energy resilience. We already depend heavily on piped gas and, therefore, we will need also to have, as a backup, LNG.

But can I ask the Minister how MTI sees the planned time horizon for this second LNG terminal? I ask this because, directionally, we are heading towards greener and cleaner energy. So, how would this second LNG terminal feature in our overall energy strategy, in terms of having greener and cleaner energy?

Dr Tan See Leng: I thank Mr Liang for his supplementary clarification. Today, Mr Chairman, about 95% of our power generation needs come from natural gas. And we have two main sources – piped natural gas, which is from our neighbours, and LNG.

As I have shared earlier on in my COS speech, the energy needs, the electrification needs, with the newer industries, FDIs coming in with the growth of our industries, as well as the SMEs' growth, these energy needs will continue to increase and not decrease.

If Members look at the time horizon, our imports – at 4.2 GW for the conditional approvals that we have given – would constitute about 30% of our overall energy needs, and that is by 2035.

So, as we ramp up from now to 2035, we will need to factor in the building of a second LNG terminal, in part, due to our own need for energy security, because that second LNG terminal would then allow us, supplemented by the existing LNG terminal that we have today, to be completely non-dependent on piped natural gas, and all of the LNG that comes in through ships and so on, can then fulfil 100% of our gas energy needs. So, that gives us an added measure of security.

On top of that, as I have also shared earlier on energy transition in the COS speech, a number of the other pathways and initiatives that we are pursuing, whether it is the Low Carbon Energy Research (LCER) programme for hydrogen, or embarking on pathfinder projects for ammonia and hydrogen, these are actually still relatively nascent. There are also the other measures that we are looking at whether it is geothermal, or also other types of advanced nuclear energy technology, including fusion energy. So, for us, energy security, reliability and our resilience are of utmost importance.

And when we did the projection with the increase in terms of our consumption, the second LNG terminal would not run a significant risk of asset stranding, even if we were to completely transition into all renewable energy, which is unlikely to be the case. I hope that answers the Member's query and his apprehensions as well.

Mr Chairman: Ms Foo Mee Har.

Ms Foo Mee Har: Thank you, Chairman. I have two clarifications. The first one is for Minister Gan. In the area of promoting collaboration between larger companies and SMEs, I had asked whether the Government would consider integrating the involvement of Singapore-based SMEs as a positive criterion for MNEs and also the large corporations when they access Government grants. This is really to make sure that, especially in the area of high-value investments, such as R&D and innovation-related grants, the Government-backed programmes can extend to a broader ecosystem. So, if Minister can say whether we can insert that little requirement.

My second clarification is to Minister of State Low Yen Ling. I join Member Liang Eng Hwa in congratulating her for her enthusiasm in promoting innovation in the heartlands. But I want to ask a more pointed question, specifically. I would like to ask the Minister of State, in light of the CDC Vouchers that the Government has been giving in successive tranches, I want to know, specifically, how much has the support gone to supporting heartland enterprises.

Mr Gan Kim Yong: Let me thank Ms Foo for the clarification, which is very important. I heard the Member's speech. I explained in my COS speech, that actually for the specific schemes like PACT, the collaboration is with the local SMEs. So, that is already naturally part and parcel of the scheme design that we encourage large companies, MNCs, may be LLEs, to work with their suppliers. And some of these MNCs, large enterprises, are actually now beginning to go overseas, and they are quite keen to bring along their suppliers to go overseas too.

And they also need to level up their capability in order to partner them in overseas markets. So, this programme is very useful in nurturing collaboration between large companies and local SMEs. But there are also other schemes that are focused on bringing in technology, bringing in strategic investments, which we may or may not have the capability among the local industries.

Therefore, we will need to assess each project's features and background to see whether it is appropriate to incorporate local enterprise collaboration. Sometimes, it may be counterproductive. Instead of being able to attract these technology, experts, network and opportunities here, you may lose them because we do not have the local capability to support them.

But where possible, we will always encourage MNCs investing here to work with our local enterprises. All our schemes have that in mind. Where possible, where appropriate, we will have the conversation with the grant applicants, to see whether local SMEs can play a part, and it is something that we always push for and encourage.

In fact, many of the investors who come to Singapore are also looking at the capability of the SMEs, the local enterprises here. This is the whole ecosystem that we are developing. That is actually one of our key selling points, and very often, when I talk to investors, they choose Singapore, not just because of our grants, but because of the ecosystem that we have developed. They can tap on the SMEs capability to augment their business and that is why they are here.

But at the same time, as I said, through PACT, we are hoping to level up the capability of SMEs, so that they, too, can continue to grow, as the MNCs are growing. We take the Member's point. Where possible and applicable, we definitely will take into account collaboration with the local enterprises.

Ms Low Yen Ling: Chairman, I want to thank the Member, Ms Foo Mee Har, for her question. I think she notes that this is a MTI COS debate and I outlined the new schemes that Enterprise Singapore colleagues have launched, which is the Heartlands Placemaking Grant (HEPG). And in her cut, I recall that she, and many other Members, spoke very passionately about the unique role of heartland enterprises in Singapore, and I completely agree with them.

That is why we are always leaning forward, going the extra mile for our heartland enterprises, especially during the COVID-19 period. And I think, we can all agree that the heartland shops are literally close to our homes and also close to our hearts.

First, they provide the convenience and also a wide assortment of products and services and, most of the time, daily necessities and essential products and services. Second, they also provide jobs to a lot of our residents who do not want to travel too far for their day job, or maybe part-time job, but just want a job nearby.

But very importantly, they inject vibrancy into all our neighbourhoods, the kampung spirit, the community spirit. And that is why in MTI and Enterprise Singapore, we are always going the extra mile to support our heartland shops in going digital, in embracing transformation and also reaching out to new customers, not just customers who cannot visit their shop physically, but also customers overseas, by going online or even adopting digital platforms.

In the same vein, we are always looking out for like-minded partners within the whole-of-Government. So, frankly, if Members remember how CDC Vouchers came about, it came about because of the circuit breaker. Coming out of the circuit breaker, we felt it was very important to support lower-income households. At the same time, our heartland shops had been closed for two months, and two months of closure can really make or break these heartland shops. Back then, it was Deputy Prime Minister Heng who launched the $20 million paper voucher, because our sense back then was that the paper voucher will be more effective. It was warmly welcomed, very well-received.

And then six months later, in January 2021, another tranche of $20 million. And then, we went digital. Prime Minister Lee Hsien Loong launched the first nationwide digital CDC Vouchers. We say digital, but we also gave assurance to residents who do not have smartphones, we assured them that they can print their CDC Vouchers in any of the Community Centres, to provide them the convenience.

And the Member's question was how much was channelled towards the heartland shops. So, on 13 December 2021, Prime Minister Lee launched the first tranche. If Members remember, that was $100 for each of the 1.22 million households. Then five months later, Deputy Prime Minister Lawrence Wong launched a second tranche. Similarly, I recall it was $100 for the 1.22 million households. Then, last year, 3 January 2023, Deputy Prime Minister Lawrence Wong launched the third tranche, which is $300 for the 1.238 million households. Just less than two months ago, Deputy Prime Minister Lawrence Wong launched again a fourth tranche, which is $500 for the 1.267 million.

A few days ago, I just did a check on the numbers. The first three tranches basically catalysed spending in our 23,000 heartland shops and hawkers amounting to $407 million. And if we include the fourth tranche, which is ongoing, the amount that has been spent at our heartland shops and hawkers amount to $133 million. So, it means that the three tranches we have completed and the ongoing fourth tranche have catalysed spending of $540 million in our 23,000 heartland shops and hawkers.

The key point is that it is not just MTI, it is not just Enterprise Singapore that is going the extra mile to support our heartland shops for them to innovate, for them to transform, for them to future-proof themselves in this digital era. We welcome agencies within the Government. We are also working with the Federation of Merchants' Associations, Singapore (FMAS), Heartland Enterprise Centre Singapore (HECS), and we welcome each and every one of you, wearing your different hats, to share with us how you would like to also synergise the efforts to support our heartland shops, because they are close to our homes and close to our hearts.

Mr Chairman: We do not have much time left. So, for those who want to seek clarifications, and likewise, for the responses, please keep them short. Mr Louis Chua.

Mr Chua Kheng Wee Louis: Noted, Mr Chairman. So, just two clarifications. The first is for Minister of State Low. I mentioned lemons in my speech. So, in terms of the so-called loophole for the lemon law whereby used cars that are sold on consignment are actually not covered, does the Government intend to plug this loophole, given that it is likely the largest value item for a given household?

The second is more for Minister Dr Tan. I think the Minister mentioned the power plants that will be coming up will be hydrogen-ready. So, I just wanted to understand, in terms of the feedstock that they will be using when they are operational, is there a target percentage for them to be using hydrogen? And similar as to how we deal with LNG, does the Government intend to do a kind of centralised procurement of, say, ammonia or hydrogen feedstock for economies of scale?

Ms Low Yen Ling: Chairman, I promise to keep it short so that you can enjoy your peach oolong tea. I thank the Member Mr Louis Chua. I will just make two quick points. When the Member talked about lemon law, is he talking about owner selling to owner or business selling to owner? Can I clarify?

Mr Chua Kheng Wee Louis: Basically, the used car dealers, when they actually sell on behalf of the owner to somebody buying a second-hand car.

Ms Low Yen Ling: Okay, I want to thank the Member for the clarification. The used cars that are sold by car dealers on behalf of the owners, they are also known as consignment cars. The Member might be aware of that. They are really considered consumer-to-consumer (C2C) transactions between the owner and the buyer.

The lemon law only covers business-to-consumer (B2C) transactions and does not cover the C2C transactions. However, I want to assure the Member that car dealers who misrepresent a C2C transaction as a B2C transaction can be taken to task under our current Consumer Protection (Fair Trading) Act, or CPFTA, as an unfair trading practice. So, if the Member knows of any, please let us know and we will follow up. We also want to use this platform to really advise the consumers to take extra precaution when making such purchases.

Mr Chairman: Mr Neil Parekh. Sorry, Minister Tan.

Dr Tan See Leng: I thank Mr Chua for his question. The three combined cycle gas turbines (CCGTs) – one from Keppel, one from Sembcorp, and the third one that I just mentioned, YTL PowerSeraya – are all capable of taking up to 30% hydrogen. So, today, this is the new breed of CCGTs that, if there is any planting and so on, we envisage that they should make that transition pathway.

3.45 pm

To the Member's point in terms of hydrogen, today, in countries particularly where they have a favourable geographical advantage, where they have solar power or wind or tidal, they can produce green hydrogen. The logistics and transportation of the hydrogen is very, very costly today because the boiling point of liquid hydrogen is very, very low. A significant amount of energy is needed to keep it at that kind of low temperatures. So, it does not make it economically viable.

Having said that, we are not resting on our laurels. Hence, we have the ammonia pathfinder project, where we started to see how, on a very small scale, we can conduct a pilot. We are also working through our initiatives to see, in terms of the supply chains, what kind of technological advancements and developments we can go further in, to make the transportation of hydrogen a lot more cost effective.

In terms of central procurement, obviously, at a point in time, when we have arrived at that technological maturity, we can certainly consider that. But at this particular point in time, even if you have nuclear power, to use it to do the electrolysis of water to produce hydrogen, it is still not green hydrogen. So, that is a technical specification that is needed. I hope that it clarifies your query.

The Chairman: Mr Neil Parekh.

Mr Neil Parekh Nimil Rajnikant: I want to thank Minister of State Alvin Tan for answering so many questions on tourism and internationalisation, and for the $300 million boost to the Tourism Development Fund. My question for you is, which schemes have worked well for Tourism Development Fund. On a different point, what strategies were involved in bringing Taylor Swift to Singapore, which in my view has been very successful in terms of a branding on an international stature?

Mr Alvin Tan: Sir, I thank Mr Neil Parekh for his question. My answer will be very swift. And actually, next week, there are a couple of Parliamentary Questions and that will be very tailored towards this particular question in detail.

The Tourism Development Fund has a variety of different schemes. It has secured over 600 events that strengthen Singapore's attractiveness as a leisure and business destination hub. All of these different aspects that we have put in, I wanted to remind Members that our tourism sector was really, really hard hit during COVID-19. So, in 2022, we pumped in $500 million for the Tourism Development Fund. That helped significantly to prepare our very, very hard-hit tourism sector to recover. Now, they have recovered, as I mentioned in my main reply, and this $300 million top-up will also continue to boost them so that we can attract both very high-quality lifestyle entertainment acts as well as top world-class MICE events to Singapore, and just to lift Singapore to be in a very attractive lifestyle and as well as a business destination.

The Chairman: Our current guillotine time is 4.15 pm, but it included a 20-minute break. I still see many hands. So, if Members do not mind, we will have a very, very short break. I will allow more clarifications, if Members do not mind, but it will eat into our break time. Ms He Ting Ru.

Ms He Ting Ru: Thank you, Mr Chairman. I have a couple of clarifications for Minister Gan. I think I heard Minister Gan mention earlier about precision medicine. So, I just wanted to ask for a bit more details about the Ministry's assessment of what sort of potential that precision medicine can have as a growth area in relation to the Singapore economy.

The second point relates to whether MTI is currently working with agencies like the Ministry of Health (MOH) and the Health Promotion Board (HPB) in relation to addressing some of the concerns around precision medicine, because at the moment, it is quite prohibitively expensive. I am just concerned about accessibility to those who might not have a high income. So, whether they can share details about the work that is being done with MOH or HPB in relation to addressing some of these concerns.

Mr Gan Kim Yong: Thank you. I have given a broad perspective of the potential for the precision medicine market in my speech. I think you can refer to that in terms of the numbers. But in terms of the specific areas of potential, this is a very early stage of an emerging technology. As some Members have said, if we do not move in time, we will never have time to move.

So, I think it is something for which we have to grab the opportunity to work with companies who are in this field to develop new technologies. The potential is to find new solutions and new therapies by working on genomics and see how the genes interact with one another; and also coupled with the advent of AI that has made precision medicine even more promising. So, this is an area that we are well positioned to collaborate with leaders in the world to develop this particular sector.

On the second question, yes, indeed, we are in discussion with MOH. Because at some point in time, when companies want to conduct clinical trials, they will also have to work with MOH to ensure that they have access to patients for some of these clinical trials. When the therapies are available, I think we will then have to discuss with MOH how to ensure that their funding is adequate and the appropriate therapies are available to Singaporeans. There will always be clinical guidelines or some indications for this therapy, and I think this is something that is a work in progress. We will continue to work with MOH with regard to clinical therapy as well as funding requirements.

The Chairman: Ms Jean See.

Ms See Jinli Jean: Thank you, Chairman. The question is to Minister of State Alvin Tan. I think we are very cheered by the positive news on tourism. I just wanted to make a point that we do have a number of people coming up from our universities and our schools who are very talented in terms of being creative professionals. I think many of them would desire the opportunity to be on the stage together with many of these different acts coming into Singapore.

So, my pitch to MTI is whether we can then work very closely with the different, other agencies that are supporting the creatives, supporting the young people to give them the opportunities to come on board some of these programmes, some of these acts that come into Singapore to have the opportunity to build up their portfolio.

Mr Alvin Tan: Sir, I thank Ms Jean See for her clarification. The short answer is yes. In the tourism sector, we have a variety of programmes that, through the Tourism Development Fund that I mentioned earlier on, it is not just infrastructure and bringing in these acts and MICE events, but it is also helping to build our tourism sector. I have launched very countless scholarships that we work together with the institute of higher learning (IHLs), polytechnics, the Institute of Technical Education (ITE) and others, to help to boost up that pool of talent.

Just wearing my MCCY hat, I will explain a little bit more. The SG Arts Plan has a very, very strong focus on all of these different talents; not just in place-making, which Minister Edwin Tong mentioned earlier on, but also to enhance our artists' capability in many of these, so that we equip them as we bring all of these acts and all of these events into Singapore, they have a good chance to be able to participate in them.

The Chairman: Mr Mark Lee.

Mr Mark Lee: Chairman, I thank Minister Gan for his insightful response to hon Member Ms Foo Mee Har. I just want to press on and maybe have further clarification to her question about nurturing our local SMEs.

I think many businesses, including ours, when we expand our international operations and doing coveted project bids where the local Government has provided tax incentives and other incentives to the client, they actually have a clear policy and practice for us to require local partnerships, even with partners that have very limited or no existing capabilities. I guess such policies are aimed to foster local participation and skills transfer. I am wondering if MTI can consider doing some research on this and see what the trade-offs are if we enforce such collaboration.

I think my second clarification is to Minister of State Low in regard to the EEG. I was wondering if MTI can allow or consider whether some of the EEG-approved equipment to be used across all industries. For example, the electric forklift is almost double the price of a diesel forklift and these are all applicable to almost all industries.

Finally, for my cut, I asked whether assistance will be allowed for adopting electric vehicles for commercial and industrial use.

Mr Gan Kim Yong: Thank you. In the interest of the bubble tea, I will keep it short. The short answer is yes, we definitely will take into account the opportunity for local enterprises and also job creation for local workers. We need to balance the trade-offs and sometimes, you have to look at the potential investment. If the investment is strategic to us, it is very important for us to bring in markets, to bring in technology and to bring in opportunities. Eventually, this will spill over to local industries. Rather than to have a very hard-wired requirement that all of them must have a local partnership. You will find that you may, in the end, lose out more opportunities than gain the opportunities. So, I think it is a calibrated approach.

We are very mindful that we do want to make sure that there is a significant value capture locally, whether it is through their direct contribution to the value-add, or whether it is through collaboration with local enterprises. Even after they have come into Singapore and they have invested here, we continue to encourage them through different schemes, like PACT, as I mentioned; R&D schemes, to encourage them to have collaboration with local industries.

At the same time, we also provide schemes and support for the local industries to level them up, so that they are able to then work together with these large enterprises to add value to them.

At the end of the day, economics must make sense for both parties. Government grants and schemes are just to facilitate and to push them, to nudge them to come together. But in the end, when the two of them want to get married, the marriage must make sense. We are the matchmaker and we try to facilitate and give a little bit of encouragement here and there, but at the end, the economics must work out together for both of them.

Ms Low Yen Ling: Thank you, Chairman. I will keep it brief. I want to thank Mr Mark Lee for his request and question. I want to assure him that we certainly will help our SMEs to invest in energy-efficient equipment. As I mentioned, when we launched this two years ago, the sectors that we approved are food manufacturing, food services and retail. Because when you look at their operating expenditure, electricity was a key component. We want to continue to avail this to other sectors as well. That is why from 1 April, local food services, retail and manufacturing companies will be able to enjoy this enhanced support of 70%. I must say, it is capped at $30,000.

I want to assure him that we will continue to work with other champion agencies outside MTI to also understand what the other industries and sectors that will benefit from it. The EEG will be open to other industries such as maritime, construction and data centres by the end of this year. I welcome SBF and TACs to work with us, to be a voice for the sectors and bridge the conversation with MTI and our economic agency on this front.

The Chairman: Like many of you, I am also thirsty and a little bit hungry. So, Mr Liang, would you like to withdraw your amendment?

Mr Liang Eng Hwa: Sir, before I withdraw my amendment, allow me to congratulate MTI and EMA for successfully bringing the International Energy Agency to set up its regnional office in Singapore. It is a great achievement. And I am sure Minister Tan See Leng's personal charm must have made a difference there.

With that, I also want to thank Minister Gan, Minister Tan, Minister of State Low Yen Ling and Minister of State Alvin Tan for their comprehensive replies to our responses. I beg leave to withdraw my amendments.

Amendment, by leave, withdrawn.

The sum of $1,628,845,400 for Head V ordered to stand part of the Main Estimates.

The sum of $7,179,458,100 for Head V ordered to stand part of Development Estimates.

The Chairman: Order. I propose to take a short break now.

Thereupon the Speaker left the Chair of the Committee and took the Chair of the House.

4.00 pm

Mr Speaker: Senior Minister of State Tan.

The Senior Minister of State for National Development (Mr Tan Kiat How): Sir, I wish to apologise for not being in Chambers earlier during Question Time to answer Member Mr Louis Ng's Parliamentary Question. I got the Order Paper and timing mixed up, and hence, was at another work meeting when the Parliamentary Question came up. I had apologised to Mr Ng, invited him to file additional Parliamentary Questions if his question is not fully answered in the written reply.

Mr Speaker: Order. I suspend the Sitting and will take the Chair at 4.15 pm. Order, order.

Sitting accordingly suspended

at 4.02 pm until 4.15 pm.

Sitting resumed at 4.15 pm.

[Deputy Speaker (Ms Jessica Tan Soon Neo) in the Chair]