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

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

11.00 am

Economic Outlook and Challenges

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, as in every MTI COS debate, we start by taking stock of the economy. So, let me kick off by asking the Minister on how has the economy fared in 2022 and what he sees as the outlook for 2023.

In the Budget Statement debate, Deputy Prime Minister and Finance Minister painted a mixed outlook going forward. Major economies like US and EU are seeing slower growth and may enter into recession. The war in Ukraine may escalate or prolong, which could further weigh on global trade, hold up energy and food prices and dampened consumer and business confidence. The bright spark is the reopening of the China economy, which could boost demand for the global economy.

However, the intense rivalry and competition between major powers has led to countries taking unilateral actions to decouple in trade, technology, finances and investments. To shore up their economic security, we have seen countries like US introduced the Chips Act; and China implemented the Export Control Law to reduce dependencies on other countries.

Sir, globalisation is no longer what it used to be and we are entering into a period of geopolitical instability. Domestically, Singapore is also running up against serious internal resource constraints; among others the ageing resident workforce, rising wages, decarbonisation, high rental and land costs, higher taxes among others.

Against this backdrop, can I ask the Minister how would Singapore navigate and respond to this increasingly complex and uncertain operating environment? How do we stay competitive and how should our businesses prepare for these challenges?

Sir, we are increasingly seeing the emergence of transformative technologies disrupting existing business models and industries. The proliferation of disruptive technologies such as AI, blockchain, Web3 are expected to have uneven impact across businesses; with some embracing the changes and others falling behind. The gap will likely widen.

The global shifts towards renewable energy are another challenge that businesses must contend with. The journey to transit to low or zero carbon is expected to be a taxing one for businesses especially the SMEs. Besides higher carbon taxes, the immediate impact would be the initial higher energy costs and the additional resources needed for the shift.

Next, comes the manpower crunch that businesses faced. Notwithstanding layoffs in the tech sector, the labour market continues to tighten. The turnover of foreign labour, where the experienced workers go on home leave whilst the newer inexperienced workers take on, add to the tightness of the manpower situation. I am also concern about the overdrive mode of our domestic economy, especially in the service sector. It would further squeeze to the limited manpower availability and drive up costs.

Sir, there may well be more businesses to do out there for the businesses, but companies are just unable to find the manpower to benefit these opportunities in the near term.

Improving productivity and efficient utilisation of resources are the only way out to create new capacity for further growth. The ITMs are our main playbook to improve productivity and to press on with innovations and internationalisation. Can I ask the Minister for an update on our industry transformation efforts so far?

Sir, at last year's Budget, the Minister for Trade and Industry unveiled the Singapore Economy 2030 vision and strategies. Under this vision, there are four key pillars identified which would drive new growth, namely services, manufacturing, trade and enterprises. I would like to ask the Minister how have we progressed towards this vision?

Sir, while we should be concerned about our inherent constraints and strive hard to overcome them, our economic fundamentals and propositions remain strong. Our handling of the pandemic and the balanced approach that we have taken has lifted our credentials. We are the early movers to reinstate air travel which helps to strengthen our air hub status and our premier status as an international convention centre.

Investors see attractiveness in our overall economic proposition and are even prepared to pay the premium to invest or hub in Singapore. Before the pandemic, we do not have a single facility that produce vaccine. But in the next two years, five pharmaceutical companies will be setting up plants here, which can churn out a billion doses of vaccines annually. It will create new job opportunities and new economic value add.

Credit goes to EDB, MTI and the other agencies for continuing to attract quality investments to Singapore despite the intense competition and more challenging circumstance.

Sir, the Government has announced the planned implementation of the BEPS 2.0 Pillar Two in 2025; where would see higher corporate tax rate. We would need to sharpen our competitive edge to attract and retain investments. The $4 billion top up of the National Productivity Fund, which has had its scope expanded to include investment promotion as a supportable activity, is one of the new tool kits. Can I ask the Minister how he sees the impact to our attractiveness as an investment destination with this move?

Sir, venturing beyond our shores, is also another growth strategy to help overcome our domestic limitations. The Global Enterprises Initiative and the SME co-investment fund are targeted to support and help businesses scale up and be globally competitive.

Can I ask the Minister how are we supporting our firms to capture opportunities from the region and other emerging markets? Also, what steps is Singapore taking to strengthen our trade, economic and digital linkages with other economic partners?

Sir, our economic successes have brought us benefits but also problems as well. But it is always a better position having to deal with the problems of success than to deal with problems of failures. Fortunately for us, we are in a position to build on our past successes and strengths to secure an exciting future for all of us in the new era.

Question again proposed.

Economic Structure and Global Business Hub

Mr Saktiandi Supaat (Bishan-Toa Payoh): Sir, Singapore must plan to re-establish our position as a global business hub, in this post-COVID era.

Last year, MTI announced our Singapore Economy 2030 vision across four key pillars of Services 2030, Trade 2030, Manufacturing 2030 and Enterprise 2030. Among other things, we aim to grow our export value from $805 billion to at least $1 trillion from 2020 to 2030 and double our offshore trade value from US$1 trillion to US$2 trillion over the same period.

These are challenging targets considering the economic conditions and headwinds. Global unemployment is expected to rise by millions both this year and next, which may force countries to become more protectionist. Soaring interest rates discourage investments into R&D and training. Also not forgetting the phased carbon tax and measures that will be coming in force to secure Singapore's longer-term future.

Can the Ministry provide an update on our progress towards the four key pillars of Singapore Economy 2030? Based on prevailing investment trends, can I see the Minister's crystal ball or trend forecast in terms of how will the structure of the Singapore economy evolve over the next decade? Does it create jobs, disrupt potential jobs and set the tone for our future generations?

The Chairman: Mr Sharael Taha, both cuts, please.

Driving Real Productivity Improvements

Mr Sharael Taha (Pasir Ris-Punggol): Thank you, Mr Chairman. The National Productivity Fund was established in 2010 and has been instrumental in driving productivity in Singapore's businesses. Deputy Prime Minister Wong mentioned that the National Productivity Fund will be topped up with an additional $4 billion and the scope of the fund will be expanded to include investment promotion as a supporting activity.

While we expand the scope of the fund to anchor more quality investments into Singapore, how do we ensure that the funds are effectively used by businesses to drive real productivity improvements that will lower the cost of doing business in Singapore?

Given that $4 billion is half of what we spend on the Ministry of National Development (MND) and about the same amount that we spend on the Ministry of Social and Family Development (MSF), what will be the measure of success for the National Productivity Fund?

Attracting Investments

Mr Chairman, the cost of doing business in Singapore is continuously rising. This is especially due to the rising cost of labour which can be attributed to the tight labour market. Aspiration of workforce to have higher pay each year and our collective desire to pay our lower-wage workers better through the Progressive Wage Model.

Our strong currency also means Singapore-based businesses are finding it harder to compete through costs in the global market. Furthermore, additional headwind such as the impending carbon tax and the implementation of base erosion and profit-sharing BEPS 2.0 Initiative, would add even more cost to doing business in Singapore. While businesses in Singapore face these pressures, in the meantime, the US and other countries are rolling out subsidies to build up their industries and hence, reduce Singapore's attractiveness for investments. As tax equalisation in BEPS 2.0 also implies that we have one less instrument to assist us in attracting investments into Singapore, how can we generate non-tax incentives to enhance our business competitiveness to continue to attract foreign investments when we lose preferential tax rates as one of our competitive levels?

Silver Industries

Ms Sylvia Lim (Aljunied): Sir, across the world, we see exciting innovations catering to the needs and well-being of seniors. These range from technology to monitor health conditions at home, to senior-friendly food, to robotic pet dogs that keep lonely seniors mentally and emotionally engaged.

Singapore is one of the most rapidly ageing societies in the world and faces a manpower shortage in the care sector. While various agencies such as the MOH, GovTech and IMDA have led the way in certain areas, can more be done to collaborate with the private sector and encourage local enterprises and startups to expand into such technology?

There is some evidence that the testing and tailoring of aged care innovations could bring about profits for local businesses. For example, a Singaporean-based company called SilverActivities designs and evaluates games, applications and devices suited primarily for seniors. Their products are designed to stimulate, train and preserve the seniors' cognitive functions such as memory, problem-solving, language and learning.

Nursing homes have given glowing testimonials of their products. Companies such as SilverActivities have the potential to expand out into international markets when the time is right. In a recent blog article published by Enterprise Singapore entitled "Silver economy: Is the business of ageing a sunrise industry?", the author pointed out that in the Asia Pacific region, the silver economy market was projected to be worth US$4.6 trillion by 2025, just two years from now. Market opportunities were identified to be in telemedicine, healthtech, elderly nutrition and assisted living.

There are opportunities for Singapore to pioneer, pilot and grow silver industry players that may in time export these goods and services to other countries facing the same demographic challenge. How is the Government catalysing the potential of the Silver Economy?

Biotech Industry

Ms He Ting Ru (Sengkang): Thank you, Sir. Mr Chairman, it was evident during the global panic in the earlier phases of the pandemic that Singapore has to be self-reliant with resources to combat and resist the spread of the next wave of infectious diseases, and that it is important to have a strong biotech and biomedical industry of our own.

Our efforts to promote and grow the sector have been in place since 2000. And we have seen increases in manufacturing value add and growth in jobs in the sector. Indeed, figures from 2018 showed that we employ five times more biomedical researchers per capita than the US. The sector also was a bright spot during the economic hard times of the pandemic years.

It is also the case that the Government has invested a lot in the sector. The sector does well when it comes to manufacturing, although commentators have said that there is room for improvements for innovation capability.

Yet, in spite of this view, some of our biotech enterprises are doing promising, innovative work in interesting areas. For example, as Singaporeans, we are proud of our food heritage and it seems a match made in heaven for our companies to focus on what is going into our bodies and how our bodies react to what we consume. Thus, the research and innovative work done by startups and early stage companies into precision gut microbiomes here in Singapore deserves our full support.

I believe that there are currently efforts to maintain Southeast Asia's first and only gut microbiome transplant bank, along with building the world's largest multi-ethnic Asian gut microbiome database. The gut microbiome is neglected at our own peril, as it has also been found to play important roles in regulating our immune systems and controlling brain health and function.

This field therefore appears to hold promise when it comes to providing insight tailored to the specificities of a population and has implications for more efficient use of our resources in our health efforts, from developing effective preventive health strategies to managing or minimising chronic illness, to having more tailored and accurate public education advice when it comes to dietary habits suited to the genetics of our mostly Asian population.

The work is cutting edge and is especially cogent in light of the launch of Healthier SG last year. It would also make sense to have such knowledge and input be taken on board into our public health systems in an age of rising health and other care costs.

Are our systems sufficiently set up to be able to support such companies to be able to first secure the necessary funding to first research, then develop and market cutting edge products for us to export to the rest of the world?

While I note Minister of State Low Yen Ling's reply to me in a Parliamentary Question (PQ) outlining the steps taken to address concerns over potential manpower and talent shortages, particularly at the senior, C-suite levels, I would like further clarification about the success rate of our schemes after more than two decades in training Singaporeans to equip enough of us with the right skillsets to be able to found, lead and expand our companies to make Singapore a prominent player within the biomedical and biotech fields.

11.15 am

Accessible Support for Small Businesses

On accessible support for small businesses, it is an economically difficult time especially for small and micro-businesses as they battle rising costs and inflation amongst other global headwinds in the wake of COVID-19. Additionally, these businesses would also be particularly hard hit by our green transformation.

Climate change is an amplifier. While it might sometimes melt into the background as other more pressing and tangible economic concerns take precedence, its impact and undercurrents do not go away. Small and micro-businesses will soon feel the trickle-down effects of increased environmental regulations and pressures. And it is important that sufficient and flexible support is provided for them to build capacity on sustainability matters in these times.

This is also, as Senior Minister of State Teo mentioned last week, that we will be enhancing our public procurement strategy, to take into account public sector sustainability efforts. Our small and micro-businesses should not feel confused or overwhelmed by the diverse schemes and other support options available to them with the attendant KPIs and targets.

Additionally, could the Government introduce a variety of nudges and incentives to encourage small businesses to more quickly integrate sustainability, in particular environmental sustainability, into their businesses.

I would also like to ask how the Government has taken steps to ensure that access to funding and support to navigate and successfully apply for green financing schemes are provided. For example, the Enterprise Innovation scheme could have sustainability integrated as part of the criteria for tax deductions as well as for grants under the co-investment fund. The Enterprise Sustainability programme can also be expanded to include support to access sustainable financing opportunities.

Sustainability should be a driving focus of innovation and economic resilience and the Government is a key enabler to making this core to our small businesses.

EXIM Bank

Finally, on an EXIM bank. During last year's debate, during the Second Reading of the Carbon Pricing (Amendment Bill), my Sengkang colleague Assoc Prof Jamus Lim and I both spoke about the need for an EXIM bank and the role that such a bank can play in our efforts to assist our homegrown businesses, in particular our SMEs, internationalise. This is especially important as our domestic economy has natural limits due to our small size. The role of such a bank can be particularly helpful as we move along the great green transition, where we can seek help for our businesses in a changing world where climate concerns take front and centre.

We further noted that while former MTI Minister Lim Hng Kiang expressed reservations about financial and implementation risks that would be involved in setting up an EXIM Bank, apart from the Workers' Party's proposals, MTI's own Economic Strategies Committee has also called for such a bank. Additionally, structuring an EXIM bank well could in fact give us a key competitive advantage.

To address concerns about an EXIM bank turning into something akin to an aid agency, exposures to overseas customers could also be managed by lending to a borrower and having the borrower provide vendor financing to its international customers, as a borrower would be more familiar with the market in which it operates.

Singapore has limited options when it comes to sustainable energy. Our green financing needs would quite naturally be cross-border in nature. Many EXIM banks from China to Thailand and Hungary have also rolled out green financing facilities, also because EXIM banks have proven to have played a role in preventing complete collapse during times of economic crisis. They also provide some level of security to businesses by being the lender on record rather than have naturally higher-risk private banks or financial institutions be lenders through difficult times.

An EXIM bank can also play a part in developing and exporting green standards by being a sustainable lender or a ranger for capital market instruments. This means the EXIM bank would have full direct information about sustainability-related covenants and information on lenders and issuers to which they issue their products or lend funds to. It can then use these to address data challenges that can cause gaps in regional or even global green and sustainability financial markets. This would thus be a way in which Singapore can use to punch above our weight and bringing the world along in the transition to green financing.

The Chairman: Edward Chia. Not here.

SME Assistance during COVID-19

Mr Shawn Huang Wei Zhong (Jurong): During the COVID-19 pandemic, many Singapore SMEs faced significant challenges. For most, the pandemic has led to a significant decrease in demand for many products and services which has resulted in a decline in revenue.

They faced cash flow problems and find it difficult to meet their financial obligations, pay employees and invest in the future. This was especially so for those with high rental costs and depend mainly on physical stores and delivery.

The supply chain disruptions were severe and many could not access the resources and materials they need to operate. For many others, finished products could not be shipped or distributed. Most SMEs were not equipped for remote work. There were challenges communicating, coordinating and managing the businesses which led to problems with productivity and reliability of service. This is especially so for those who have not embarked on their digital transformation to complete their sales and marketing online.

During such challenging circumstances, what measures did the Government take to help local SMEs tide through the COVID-19 pandemic?

Managing Rising Business Cost in Singapore

Businesses face several difficulties especially when operating costs are rising faster than expected with a higher inflation environment. As costs increase, businesses may need to raise prices to maintain their profit margins. However, there is usually a lag in price adjustments especially for those in the contract manufacturing or with ongoing or unfulfilled contracts. The cost of goods and operating costs continues to rise but these companies continue to face outstanding obligations leading to reduced profit margins.

Under such circumstances, many companies will face cash flow problems which is further exacerbated by higher borrowing costs and a tighter credit market. In a tightened financial market, businesses will have difficulty accessing financing especially those with high levels of debt or have a poor credit rating.

As such, what can businesses do to adapt to rising operating costs and tightened financial markets and what will the Government do to help them?

Helping Businesses Cope with Rising Costs

Mr Derrick Goh (Nee Soon): Chairman, our SMEs continue to navigate a challenging environment including rising costs. Financial markets are currently pricing the US Federal Funds Rate to reach 5.25%, reinforcing the view that interest rates will remain higher for longer. The interest burden for businesses are expected to at least be double compared to last year.

Locally, the GST increase would also impact smaller SMEs who are not GST-registered and a higher CPF salary ceiling announced in this Budget will add further pressures to businesses. In this regard, what further measures will MTI provide to support SMEs and encourage them to adapt in such a challenging environment?

Generally, SMEs are vulnerable to interest rate hikes and are keen to know if MTI will consider continued interest rate subsidies under the Enterprise Financing Scheme before they decide on whether to take more risk to pursue growth opportunities?

I have received feedback from SMEs welcoming Deputy Prime Minister’s response during the Budget debate, where he said that agencies will continue to streamline and improve the application process for Government assistance schemes, balancing convenience and accountability. On this point, can MTI share more details on what refinements to the existing administrative processes for Government schemes are being considered? Will there be more forums for SMEs to provide further feedback?

From "Handouts" to Sustenance

Ms Janet Ang (Nominated Member): Mr Chairman, we would all agree that the Job Support Scheme, SGUnited Jobs and Skills, Enterprise Financing Scheme and other COVID-19 measures have helped our businesses tide over the difficult COVID-19 years.

We have after close to three years emerged from COVID-19 but unfortunately, we have to now deal with escalating food and energy prices and high inflationary pressures. Our companies are struggling with high business costs and manpower challenges. While the extension of the Enterprise Financing Scheme (EFS) and Energy Efficiency Grants (EFG) will help businesses sustain, many may not be able to afford to invest to build their business for the future because of the high interest rates.

Will MTI consider allowing SMEs to negotiate a temporary shortening of payment terms or payment advancement over a limited period? How can Government encourage our financial services ecosystem to support our SMEs to still invest in their businesses for the future?

With Budget 2023, it is clear that the Government is moving away from “handouts” to a Budget that “invests to build for growth, sustainability and resilience”. The $4 billion top-up to the National Productivity Fund (NPF) will help to support the much-needed productivity enhancements and the reskilling of workers. It will however require companies to drive change like job redesign, digitalisation, automation, reskilling and so on, and change is hard work. It is likened to many of us trying to get fit and learning to use “new muscles” and new diets. It will take time but to do this, we must. It is the foundation to staying healthy and competitive.

If driving productivity is hard work, transformation and innovation is even more hard work. It will take leadership at the very top to make it happen.

I am encouraged to hear the story of Jumain Sataysfaction, a Singapore food manufacturer whose bosses had an “a-ha!” moment when they participated in the Meatless Meat Challenge organised by Singapore Polytechnic’s Food Innovation and Resource Centre (FIRC), Singapore Food Manufacturers' Association (SFMA) and Enterprise Singapore (EnterpriseSG). They worked closely with the polytechnic students to finalise their concepts for creating a new product range with plant-based options. The Singapore Polytechnic (SP) students with their lecturers’ coaching translated the concepts into actual food products with relevant marketing and communication strategies. A new plant-based satay product was created and aptly named "SOVEG". SOVEG will soon be showcased at the upcoming Gulfood exhibition in Dubai. So, it is possible.

The new Enterprise Innovation Scheme announced by Deputy Prime Minister will help reduce the financial barrier for SMEs to embark on innovation projects like SOVEG. But to bring an innovation from creation to the market will take investments. How will MTI facilitate and encourage our Singapore companies to get started in their innovation journey and take it from creation to production to market?

Well, while it is a welcomed move to have the Government to step in to encourage innovation and share risks with SMEs on their innovation journey, there are many business leaders who are sceptical about the take-up rate and the short-term impact as innovation does take time to bear fruit and most SMEs are looking at "today" rather than "tomorrow". Innovation indeed is not easy. So beyond grants and financial assistance, how else is MTI going to help to develop a strong and vibrant innovation ecosystem?

We hear too often that Singapore’s market is too small. Our companies highlight uncertainty as the key barrier when internationalising. The uncertainty of demand, unfamiliarity of business climate and the ability to find suitable partners are some of the issues.

To support Singapore companies with their aspirations to internationalise, Enterprise Singapore (ESG) collaborated with SBF to set up Global-Connect@SBF. Let me share the story of Hot Spicy Mama, an SME offering tasty Singaporean flavoured ready-to-eat condiment products. In 2022, Global-Connect@SBF assisted Hot Spicy Mama to sell their products in Qatar and will be helping them to explore other markets in Middle East and South Asia. Beyond Singapore seems to be the way to go, but for those who are venturing overseas, Budget 2023 seems a little light on internationalisation.

Will MTI consider SBF’s recommendation to extend the Market Readiness Assistance (MRA) grant to cover manpower costs for related overseas market promotion, business development, or market set-up activities? How will the Government provide geopolitical intelligence support for our businesses in their market risk assessment and in navigating the geopolitical challenges as well as facilitating their internationalisation efforts?

Last year, MTI Minister Gan Kim Yong painted the vision of Singapore Economy 2030, refreshed Industry Transformation Maps (ITMs), signed digital economic agreements and green economy agreements to rally our tripartite partners to seize the many opportunities in our turbulent world and stay relevant in the global economy. I would like to ask Minister to give an update of the progress of Singapore Economy 2030 vision and the sectorial strategies as laid out in the ITMs?

Strategy without execution is daydreaming. So, execute we must. There is no silver bullet. Together, Forward Singapore is the only way to go.

The Chairman: I am glad you are referring to the F&B businesses and not something else. Ms Jessica Tan.

11.30 am

Manpower/Talent Challenge

Ms Jessica Tan Soon Neo (East Coast): Mr Chairman, high inflationary pressures in 2022 have impacted the labour market. As Singapore emerges out of the pandemic, businesses require more manpower to operate at higher levels. Yet, some businesses we have spoken to, find themselves unable to fill positions for skilled jobs. Businesses from the manufacturing sector find themselves short of adequate talent, impacting the operations of businesses.

As of 2022, manufacturing accounts for approximately 20% of Singapore's GDP. Widespread operational constraints will impact the industry, leading to a decrease in output as they struggle to fill needed jobs. Operational constraints will also impact our attractiveness to foreign investments and affect Singapore's position on the global value chain. What should businesses do to adapt to the tight labour market and manpower challenges?

The Jobs Growth Initiative (JGI) scheme was successful in encouraging local hires amidst the COVID-19 crisis. Firms expanded their local workforce. With our tight labour market, businesses shared that talent is constantly moving around companies or industries. How do we help businesses find the appropriate talent to ensure consistent operations?

Our talent base needs to be skilled to match the growing sectors that require talent. I had asked a list of questions on the capability of the new Job-Skills Integrators, how will they be supported and funded to work with businesses and workers. Does their role include working with businesses to align career planning and training to upskill their employees to stay relevant as the businesses transform.

If we are able to plan for the reskilling and training of our talent in alignment with the profile of talent required to support the economic opportunities and growth, we will be able to grow a strong talent base and capabilities and provide fulfilling careers for workers.

Overcoming Manpower Challenges

Mr Shawn Huang Wei Zhong: It is imperative to develop our local leadership and talent. Local talent has a better understanding of the local market, including customer needs, cultural nuances and regulatory requirements. This can help businesses to better meet the needs of their customers and compete more effectively in the local market. This is especially so in Asia where the diversity of cultures and operating environment vary substantially.

However, when there is a tight local labour market, businesses will face much difficulty. There is a much smaller pool of available candidates, businesses struggle to find workers with the specific skills and experience that they require.

This is further exacerbated when there is an increased competition for talent within a single industry. Businesses will have to compete for the same pool of candidates. Many will have to offer higher salaries or better benefits to attract and retain employees and driving up business costs.

If businesses are unable to fill critical roles or have to rely on inexperienced workers, this can lead to lower productivity and profitability. Eventually, without a sufficient supply of skilled workers, businesses will struggle to expand or take on new projects.

As such, what can businesses do to adapt to the tighter labour market and manpower challenges? What is the Government doing to develop talent locally and preparing them to take on leadership roles and help their companies grow?

Achieving Vision of Manufacturing 2030

Prof Hoon Hian Teck (Nominated Member): Mr Chairman, the manufacturing share of total GDP increased from about 15% in 1965 to nearly 30% by the early 1980s, but it has been declining since the late 1980s to hover around 20% today. The vision of Manufacturing 2030 is to be a global business innovation and talent hub for Advanced Manufacturing. However, while the manufacturing sector share of total GDP has stayed around 20%, its share of total resident employment has been on a steady decline since around 1990 and now hovers around 12%. The question to be asked is what must be done to create the manpower to achieve the vision of Manufacturing 2030.

As Singapore gets closer to the world technology frontier, the pace of technological diffusion slows down, thus moderating Singapore's per capita GDP growth. It will be the development of indigenous innovation such as the innovative activities and vision in Manufacturing 2030 that shall provide the additional growth to the Singapore economy in its mature phase. Central to achieving the vision, is the supply of both innovators and workers who make career choices to work in manufacturing.

First, what can be done to increase the supply of workers who make career choices to work in manufacturing? As the standard of living and wealth increase and educational attainments are higher, workers' preferences tend to shift. There are job tasks that people willingly perform when they are relatively less well-off but which they shun when they are richer.

An important idea from the assignment model of matching workers' skills and abilities to job tasks, is that a competitive labour market leads workers with different skill sets to be matched with job tasks of different complexities based upon their comparative advantage. Such a competitive equilibrium is socially efficient. However, suppose that workers' job preferences shift for reasons that are unrelated to comparative advantage. Let us say a job in the financial services sector now becomes more attractive than the job in the manufacturing sector. In that case, the size of the economy's total GDP will be suboptimal as people without comparative advantage choose to work in the financial services sector. The employment share of the manufacturing sector will then be sub-optimally low, while the employment share of the financial services sector will be sub-optimally high.

What might be done to facilitate the entry of more workers with the aptitude and skills to job tasks in the manufacturing sector?

Second, what can be done to help increase the supply of innovators? Factors such as the family environment and exposure to inspiring role models affect the likelihood of an individual to become an innovator. There could also be intrinsic abilities to innovate that might not be distributed equally among individuals. From a policy point of view, what can be done to harness the intrinsic abilities of individuals to innovate from an early age and provide the opportunity for them to develop these talents.

Can more scholarships, internships and exposure opportunities be given to students at the different stages of their education ladder to discover whether they have the passion for innovating? This must be done in conjunction with the different stages of innovation, from basic research to applied stages and on to the marketing of the new products or processes.

Translating inventiveness into the actual flow of ideas requires not just intrinsic talent but also education and training. There is also an issue of access to financial resources that can inhibit innovation. A talented individual who could potentially become a major contributor to creating new ideas that will lead to new products that can be marketed, might be born into a financially constrained family. What can be done to reach such individuals to help them achieve their potential to contribute to indigenous innovation?

Mr Chairman, an integration of all these efforts from the early stages of education to creating new ideas at the workplace will help to develop the country as an innovative global business hub to realise the vision of Manufacturing 2030.

Industry Transformation and Emerging Sector

Mr Saktiandi Supaat : Our Manufacturing and Services sectors have traditionally been strong drivers of our economy. Manufacturing contributes 20% to 25% of annual Gross Domestic Product (GDP), while our diversified services sector represented 74.1% of jobs at end-2022.

However, weakening growth around the world, protracted supply disruptions and synchronised interest rate hikes have slowed down our manufacturing output recently. Given the large and diverse range of services that fall under the umbrella of the Services sector, the Government should pay attention to equitable growth across different service industries in addition to the sector as a whole.

How have our Manufacturing and Services sectors performed over the past year and what is the Government doing to develop the sector and create good jobs given rapid changes in product cycles and consumer behaviour?

Our Advanced Manufacturing sector is well-known for exporting petrochemicals, pharmaceuticals and precision engineering products but changes to carbon transition will disrupt this. Singapore has also been a leader in financial services. But other developing economies are growing these capabilities and will vie for the pie at lower costs.

What are the growth and/or emerging industries and how can our firms seize opportunities in these areas?

The Chairman: Ms Jessica Tan. Two cuts, please.

Industry Transformation

Ms Jessica Tan Soon Neo: Mr Chairman, the global economy continues to be challenged with inflationary pressures. To stay competitive, Singapore needs to remain attractive to global investors. Global companies choose to invest in Singapore for our skilled labour, as seen in our Manufacturing and Services sectors. We have also focused on developing our local companies in these sectors. How have our Manufacturing and Services sectors performed?

In order for our local companies to remain competitive, they need to innovate and stay up to date with technological developments to create more efficient processes. With rising costs of operations, businesses will need support.

Amidst global uncertainties, in the past year, we saw retrenchment and unemployment levels go up as businesses restructured their operations. Some workers might be at risk of redundancy and retrenchment. Our talent base is limited. Businesses need to transform and build capabilities in order to create better jobs and remain attractive. While reskilling is important for workers to transition to more relevant jobs, there needs to be alignment of jobs in demand and training. What steps is the Government taking to develop the sector further to create good jobs in these sectors?

Emerging Sectors

Mr Chairman, Singapore's economy grew by 3.6% in 2022, amid a challenging economic environment and external backdrop. Good growth will create good jobs and sustainable businesses, and keep our economy resilient. Last year in the Ministry of Trade (MTI)'s Committee of Supply (COS), Minister Gan revealed Singapore Economy 2030 vision to strengthen our local businesses for sustainable growth in the services, manufacturing and trade sectors, as well as the Enterprise 2030 strategy to foster a vibrant ecosystem of Singapore enterprises that are future-ready and globally competitive. What is the progress of the strategies of Singapore Economy 2030? What are the growth and emerging sectors and how can businesses seize opportunities in these areas?

Last year, the Industry Transformation Maps (ITMs) for five sectors from the Advanced Manufacturing and Trade cluster were refreshed. The refresh of ITMs aimed to better support companies in research, innovation and digitalisation. They also set out to help SMEs by providing avenues for partnerships and better position companies for global opportunities. Can MTI share more details on how companies are doing and will be able to benefit from these ITMs?

The objective of the refreshed ITMs is to encourage the use of Industry 4.0 technologies. How are companies transforming and leveraging digital and tech solutions? How has the Government invested to transform and groom companies to adopt new solutions to remain competitive?

Businesses in Transforming Industries

Mr Raj Joshua Thomas (Nominated Member): Sir, the 23 Industry Transformation Maps outline ambitious but achievable targets to ensure our business sectors remain competitive. These are now undergoing a refresh and complementary industries have also been clustered to encourage synergies between them. Could the Minister provide an update on when the remaining refreshed ITMs will be launched?

Enterprise Singapore administers the Enterprise Development Grant (EDG) to, amongst other things, assist companies with transformation. Would the Minister be able to share some insights into the effectiveness of the EDG in supporting businesses' transformation?

Separately, while it is important for the Government to support businesses as they transform, it is also important to ensure that they do not become reliant on Government support. The Government had put in significant resources to ensure that companies remain afloat during the pandemic, like the Job Support Scheme and Jobs Growth Initiative. These schemes have since tapered off, but other schemes continue to provide funding to companies.

I would like to ask if the Ministry is aware of the number of unprofitable businesses that rely on Government funding schemes to stay in business and whether there are any plans to deal with this. When such businesses eventually face the risks of going under as Government schemes ceases or are tightened, there is a risk that the directors of these companies who had guaranteed loans may become personally liable and face bankruptcy. Will the Ministry consider measures to assist such individuals, as they are also victims of the pandemic, albeit belatedly suffering the effects.

As businesses transform, there may arise a need or opportunities for mergers and acquisitions (M&A). The EDG currently supports the planning, assessment or potential mergers and acquisitions and post-M&A integration. However, the biggest cost in M&A is in the actual work done to close and effect the M&A, including drafting the M&A contract – but this is specifically not allowed under EDG. Would the Ministry consider extending EDG to support this as well.

11.45 am

The Chairman: Mr Shawn Huang, both cuts, please.

Future of Manufacturing 2030

Mr Shawn Huang Wei Zhong: Mr Chairman, building up advanced manufacturing capabilities is important for a country in order to remain competitive and successful in the global economy.

Advanced manufacturing capabilities can contribute to economic growth by driving innovation, creating new products and services and increasing productivity and efficiency. This can lead to new business opportunities, job creation and increased competitiveness in the global market.

These capabilities drive technological advancement by enabling the development of new materials and production techniques. This can also help to enhance a country's reputation as a leader in technological innovation. It is critical for national security as these capabilities enable the production of key components and systems that are essential for defense and other critical applications.

For environmental sustainability, many new materials and advanced process are required to develop new products that contribute to environmental sustainability, enabling the production of more efficient and environmentally friendly products and reducing waste and emissions.

Today, there are significant potential for growth and innovation for robotics and space. Robotics can be used to automate production processes, increase efficiency and enhance quality control while space manufacturing can enable the production of advanced materials and components that are critical for space exploration and other applications.

These sectors will drive significant technological advancement as new products and services are developed and new materials and production techniques are used. As such, how are we building our manufacturing capabilities for the future?

Building an Innovative Country

Mr Chairman, developing innovative capabilities is essential for the progress and relevance of the enterprise as well as for the collective ecosystem of the industry. There are many downstream benefits such as better trained manpower, competitive learning and more rapid adoption of technology as well as sharing of best practices and collaboration for the joint development of innovative technologies.

Innovation is a key driver of economic growth and enterprises play a critical role in driving innovation. By developing new products, services and processes, enterprise can create new markets, attract investment and create jobs.

In a globalised economy, enterprises that are more innovative are better able to compete on a global stage. By investing in innovation, enterprises can gain a competitive edge and contribute to the country's overall competitiveness.

Innovation can also lead to increased productivity and efficiency, which can help to reduce costs and increase profits. This can help enterprises to reinvest in their businesses, create new opportunities and contribute to the country's economic growth.

Innovative enterprise are more able to contribute to social progress by developing products and services that meet the needs of a growing and diverse population. They can help to improve access to education, healthcare and other critical services and create new opportunities for individuals and communities, especially in the area of employment.

How is the Government supporting enterprises in growing their innovative capabilities?

Enterprise Digitisation and Innovation

Mr Derrick Goh: Sir, the pandemic has accelerated digitalisation and transformed the way business is done. Budget 2022 provided a big push for our SMEs in their digitalisation journey, with $200 million to enhance schemes for them to build digital capabilities.

While this is gaining momentum, in tandem also with the commendable efforts in digitalising our heartland merchants and residents by the SG Digital Office, little has been said specifically on SME digitalisation in Budget 2023.

Given this, what is MTI's assessment of the digitalisation progress of our SMEs so far?

The need for SMEs to embark on or continue their digitalisation journey is an urgent one. What initiatives and measures is the Minister considering to further accelerate the digitalisation of SMEs in this Budget?

Transition to Low-carbon Future

Ms Foo Mee Har (West Coast): Mr Chairman, over the past year, Singapore has clearly stepped up in its green ambition.

We have committed to net-zero emissions by 2050 and passed the Carbon Price (Amendment) Bill in this House. We will raise carbon tax from $5 per tonne of emissions to $50 to $80 by 2030 to provide an economy-wide price signal to reduce emissions.

The public sector has also stepped up and made the commitment to reach net-zero carbon emissions five years earlier, by 2045.

These decisive commitments made in last 12 months should now translate to decisive actions.

We have seen sustainability efforts gather pace across Government agencies as well as large corporations. However, the picture is mixed with SMEs. According to UOB's SME Outlook Study in 2022, whilst three in five of Singapore's SMEs believe in the importance of incorporating sustainability practices, they face challenges in implementation.

Sir, the net-zero goal will increasingly become a prerequisite in the expectations of customers, investors as well as regulators across the world. It is urgent that we support our SMEs to take action to stay competitive and relevant.

Companies are increasingly subjected to tighter sustainability reporting and regulations, particularly those with trading partners such as the EU, which have placed higher standards. As more trading partners follow similar measures in meeting their own goals of net zero by 2050, our businesses will face growing pressures to adapt or face obsolescence.

It is critical that the Government supports industry to achieve a better understanding of the impact of a low-carbon future on their business and help them with the know-how and innovations that are available to make the green transition.

I would like to call on the Government to help them with four interventions: (a) promote sector-based sustainability road maps, frameworks and uniform standards to level up knowledge and understanding; (b) support our companies with pre-identified sector-based green solutions to fast-track adoption, including supporting them in test-bedding new ideas and experimenting with new technologies; (c) leverage the ecosystem to build scalable green capabilities and collaborations, including knowledge-sharing platforms; and (d) build a framework to help companies comply with reporting requirements and compliance practices that are required by their counter parties.

Sir, making the green transition will incur substantial investments by these companies. I would like to ask the Minister what strategies will the Government adopt to help companies cope with higher business costs arising from investment in low-carbon equipment, using sustainable supplies and adopting green processes? They also need to make provisions for the carbon tax hike.

Sir, the introduction of the new Enterprise Financing Scheme Green (EFS-Green) to support local firms with a range of financing needs is a great initiative. However, companies have pointed out that the financing terms, which are intended to fund green transition, actually do not go far enough to spur adoption.

With the Government sharing up to 70% of the risk with partner financial institutions, I would like to ask the Minister what expectations have been laid down with participating financial institutions to provide preferential loan terms and interest rates under EFS-Green?

Sir, addressing climate change requires both mitigation and adaptation.

A Harvard Business Review report argued that whilst climate change mitigation efforts have been front and centre, more efforts must be dedicated to climate adaptation to help people, animals and plants survive because of the rising climate volatility.

I would like to ask the Minister how much is the Government's effort towards climate adaptation to help companies evolve organisational practices and infrastructure to deal with the inevitable climate risks such as floods, droughts, heat waves?

Equipping the Singaporean workforce to take on jobs in the green economy must be a key priority. As countries compete for green talents to meet Environmental, Social and Governance (ESG) needs in the coming years, Singapore must both attract the best of sustainability as well as develop our own capabilities to nurture our pool of talent to take up green jobs.

I would like to ask how many of such positions does the Government project to become available over the years? How can Singaporeans receive the necessary training and credentials to secure green jobs?

Energy Security

Mr Saktiandi Supaat: Mr Chairman, oil and gas prices have been on a rollercoaster for more than 10 years. The COVID-19 demand crash, followed by the supply collapse caused by the Ukrainian war, plunged the world into an energy crisis which threatened countries with blackouts and freezing winters.

Given the inherent volatility in energy production, supply and trading today, it is reassuring to hear our long-term plans to accelerate solar deployment, work with regional partners to develop regional power grids, import low-carbon electricity by 2035 and explore new alternative sources of energy.

It is encouraging that our National Hydrogen Strategy anticipates that hydrogen could supply up to half of power needs by 2050.

However, the ordinary Singaporean and company would be equally concerned with the shorter-term affordability of electricity. An update on the status and timelines of the consultation to enhance the regulatory regime for electricity retailers would be helpful.

How will Singapore safeguard our energy security and advance our energy transition despite our physical constraints and at the same time, balance the green transition? How are we preparing to deal with increased volatility in the global energy markets?

Ms Jessica Tan Soon Neo: Mr Chairman, Singapore is a small country with limited natural resources. Our energy needs are mostly imported, with few options for renewable energy. Most of Singapore's energy is generated by natural gas. Lowering our carbon emissions while ensuring our energy security and reliability is a challenge.

In Budget 2023, Deputy Prime Minister Wong shared that Singapore is working towards the transition to solar energy and cleaner energy sources. He also mentioned working with our neighbours to develop regional power grids.

It is important for our transition to alternative sources of energy to be a gradual one. Our current sources of renewable energy are not sufficient to support all households and businesses. Even in resource-rich countries, the switch to renewable energy is not immediate and takes a few years.

While more research is being conducted for more viable approaches to renewable energy, we will need to educate and prepare households and businesses for this switch to greener energy. For businesses in particular, the adoption of renewable energy options might incur greater operational costs.

How is the Government investing to build Singapore's energy security to enable reliable and affordable sources of energy for businesses in line with our economic goals and environmental needs?

Energy Security and Transition

Ms Mariam Jaafar (Sembawang): Sir, the protracted energy crisis continues to be a major challenge for the world. Faced with the need to keep prices low, countries are stockpiling energy and going back to coal. If this continues, it will be a vicious cycle, putting the planet's net-zero transition in jeopardy.

The notion that energy security has to be secured at the expense of energy transition is a false one. We need to address both in parallel.

In Singapore, this dilemma is an existential one that could erode our competitive position in the world economy. Businesses are citing energy prices as one of the main drivers of business cost in Singapore. At the same time, other geographies are luring industrial investments with cheap energy price, and luring clean energy investments by providing very attractive tax credits for producing clean energy.

Despite our challenges, Singapore has committed to drive energy efficiency and to decarbonise. But because 40% of our overall emissions comes from the power sector, decarbonising the power sector therefore has to be an even more urgent priority. For example, we have put solar panels all over many of our HDB blocks.

12.00 pm

Can I ask the Minister how many of the solar panels are actually in operation today?

Can the Minister also provide an update on Singapore's efforts to enhance our energy security and accelerate our energy transition, including driving energy efficiency, deployment of solar energy, development of emerging low carbon technologies such as hydrogen and carbon capture, utilisation and storage (CCUS) and the import of renewable energy?

SMEs and Sustainability

Mr Don Wee (Chua Chu Kang): Mr Chairman, decarbonisation is a generation defining business opportunities and our Singaporean companies are well-positioned to lead the way.

According to the UOB SME Outlook Study 2022 Report, many SMEs understood the importance of sustainability. We need Enterprise Singapore to provide more assistance to SMEs so that they know how to measure emissions as many MNCs buyers have started to request their SME suppliers to furnish their carbon emission data.

What are the quantifiable aims of the Enterprise Sustainability Programme (ESP)? How does Enterprise Singapore promote this ESP to the 290,000 SMEs in Singapore?

I understood that many business consultants help to promote these Government schemes to the SMEs and assist these SMEs with the application of grants or reimbursements. These consultants' earnings are predicated on the loan amounts approved or amounts of grant received by the SMEs. If a particular scheme's approval process is lengthy or if there is no certainty that the grant can be approved after a huge amount of capital expenditure is incurred, the business consultants will only promote more straight-forward schemes, like Enterprise Financing Scheme, and not the ESP nor the Enterprise Innovation Scheme (EIS). I also hope that Enterprise Singapore can process the reimbursements according to the mini project milestones completed so that these SMEs' cash flow constraints can be alleviated.

Lastly, how can more support be provided to the small accounting and auditing practices which provide sustainability accounting or assurance services to the SMEs?

Sustainability Reporting

Prof Koh Lian Pin (Nominated Member): Sustainability reporting has been gaining traction and more large corporations are publishing their sustainability reports to both meet regulatory needs and also to show commitment to climate goals.

How is the Government planning to help SMEs in this shift towards greater accountability towards their carbon emissions to ensure they are able to meet the carbon accounting requirements of large corporations?

Transitory Allowance for Emissions-intensive and Trade-exposed Sectors

At Budget 2022, the Singapore Government announced a revised carbon tax framework effective from 2024. It also announced a transition framework to give existing emissions-intensive trade-exposed companies (EITE) more time to adjust to our new carbon tax policy, and to help maintain their business competitiveness.

Can the Government elaborate on the efficiency standards and decarbonisation targets that EITE companies would have to meet to receive transitory allowances for part of their emissions?

How long will these allowances be used for, and how will they affect the effectiveness of tourrevised carbon tax for incentivising decarbonisation?

Green Economy

Singapore is building a robust green talent pipeline in Government, industry and academia, as part of the Singapore Green Plan 2030. Green jobs ensure Singapore's long-term economic resilience and provide important social values. However, business costs have been increasing due to persistent inflationary pressures and other economic challenges.

What are the Government's efforts to increase the awareness and accessibility of sustainability-related information, knowledge base and opportunities to support our businesses and workforce in the green transition. How will the Government ensure sufficient green jobs and green growth opportunities for Singaporeans in the coming decades? How will the Government help businesses embark on sustainability initiatives while reducing costs?

Skilling for Green Economy

Ms Mariam Jaafar: Sir, to support our net-zero transition, and to turn the green economy into an engine of growth, we face a significant skills challenge. There is a high demand for talent to field green jobs and greening jobs, but there is a significant gap in supply. There is a need for a more urgent agenda in green skilling that addresses these gaps.

Existing skilling efforts must be sharpened and accelerated. The green skilling agenda must address gaps in green technical skills including deep engineering skills and supply chain skills, and move from awareness building to application orientation. Can the Minister provide an update on how Singapore will develop the skills needed for a green economy in its workforce?

Singapore as an International Green Hub

Mr Derrick Goh: I mentioned during the Budget debate that I am glad that the Government continues to encourage SMEs to look towards the longer term to transform and capture opportunities in the new economy, even as they are focused on overcoming near-term challenges.

A key thrust I raised was about helping our SMEs develop Environmental, Social and Governance (ESG) capabilities.

SMEs must adopt greener practices in their service and products, as well as measure, track and report their own carbon footprint. Such measurement is not easy to do but is essential to stay relevant in tomorrow's green supply chain.

Beyond internal transformation, SMEs should venture out to pursue green prospects. For example, countries in the region are boosting electric vehicle (EV) initiatives. This means opportunities for Singapore SMEs with capital and know-how. to help fellow businesses in the region to accelerate their green transition.

As transformation requires not just a push factor like carbon tax, can MTI further explain the pull factors that will be put in place to encourage and help SMEs in their green transition so that they can stay relevant and capture opportunities in the green economy?

I am glad that existing schemes, such as the Energy Efficiency Grant for the food and retail sectors, are retained. Nonetheless, while these two sectors presumably consume more energy, I hope more SMEs across sectors can be included as all local businesses should be brought onto the green journey. The reality is that SMEs, especially smaller ones, may not know how or where to start.

On this note, can MTI consider expanding the scope of current schemes and grants to spur our SMEs in more sectors?

In a nascent and growing market where standards have yet to achieve global consensus, there are opportunities for Singapore and our businesses to lead in the development of a credible regulatory framework and standards for carbon credits. These efforts will help establish Singapore as a growing and leading green hub, leveraging on and furthering our status as a trusted international centre for professional services.

To this end, can MTI share more on how businesses, including SMEs and the service sector, can play an expanded role, as part of plans to establish Singapore as an international green hub?

Green Economy – Opportunities and Risks

Ms Jessica Tan Soon Neo: Mr Chairman, to achieve our target of net zero emissions by 2050 will require all in Singapore to work together.

Businesses are important stakeholders in our green transition. To make the transition will involve adoption of innovative measures and technology for businesses to be more sustainable and efficient. Often, this means that businesses will have to incur more costs. However, businesses are already facing increasing costs of operations and labour. In 2022, and now in 2023, the unit business cost in manufacturing and service sectors rose by 9.6% and 8.8% respectively. It is projected that these costs will continue to increase in 2023.

As we work towards decarbonisation, what are the Government's key measures to support businesses in the green transition? How will the Government make it viable for businesses to embark on sustainability initiatives to reduce cost? What support can be given to businesses to address current business costs pressures as they make the investments for the transition?

Being able to report their carbon emissions will increasingly become a requirement for doing business in many countries as well as with larger companies. SMEs may struggle to account for and report their carbon emissions if they are unable to deal with such costs. Does the Government have plans to support SMEs in their sustainability reporting?

Workforce in Power and Gas Industry

Mr Abdul Samad (Nominated Member): Chairman, I want to record my appreciation to all my fellow workers in the power and gas industry for their tireless efforts to keep and ensure our lights on and the gas keeps flowing for our homes and businesses at all times, with or without COVID-19.

Our fellow workers regularly face brunt from the public whenever price hike is announced. When we, as workers, do not even have control over the price.

As a General-Secretary of Union of Power and Gas Employees, in short UPAGE, we represent about 6,000 workers in this industry, ranging from technicians, technical officers, engineers, admin assistants, managers, and even chief executive officers (CEOs). Our strong tripartism model also involves having regular discussions with the Energy Market Authority (EMA) led by their CEO.

Chairman, prior to today, my fellow members have been pestering me for any recognition or even monetary awards from the Government, just like our healthcare workers, for their efforts to ensure highly reliable electricity and gas supplies during the COVID-19 period. We all know our hospitals are equipped with many highly sophisticated machines and needs highly reliable electricity and gas supplies for them to operate efficiently. Have we ever imagined how it will turn out if we have power failure that would have failed the machines in hospitals during the COVID-19 pandemic?

Our workers also work round the clock but observed that we are hardly mentioned nor fairly rewarded. Hence, I am humbly appealing to the Minister to consider rewarding our workers for their efforts just as the Ministry of Health did for their healthcare workers earlier in November 2021.

Our power and gas industry workforce is not as large as that in the healthcare industry. Hence, it would not burn a big hole in MTI's pockets to reward us.

Chairman, the workers in this industry have gone through and overcome many changes and challenges together. Our next big thing is getting our fellow workers ready for new skill sets required for the new energy solutions. Calling and rallying workers to attend training is never an easy feat. In 2018, when SP Group embarked on Project Fusion, which meant future skills in everyone, my fellow union leaders and me, were given sarcastic remarks and bombarded by members and workers. We were labelled as pro-management. However, we believed in this project as it was meant to prepare our workforce for the job roles of tomorrow and the future.

The training focuses on technological and technical fronts. With such focus, it will result in higher value-add jobs and meaningful careers leading to better wages, work prospects and welfare. Our leaders led by example and stepped forward earlier to attend the designated courses and progressively brought everyone on board.

I am humble to share that we have succeeded in rallying 3,500 workers in acquiring new skills and achieved over 800,000 training hours. Amongst them, 200 workers have completed upskilling programmes and are applying their newly acquired skills in their new jobs. Importantly, management reciprocated by revising their wages after certain periods into their new job roles. We will not stop here but will continue to press on.

Another example is City Energy, previously known as CityGas, who have decided to expand their business and move into new energy solutions, like green hydrogen and electric vehicles charging. In order to prepare for this transformation, both the union and the management formed company training committees, followed by rallying and re-energising their workers in order to develop a strategically adept and proficient workforce.

UPAGE leaders will press on to advocate for our members' rights and long-term employability, in an efficient and a productive way. So, would the Minister for Trade and Industry who takes care of the energy industry, please do not disappoint us.

Empowering Trade Associations and Chambers

Mr Raj Joshua Thomas: Sir, I declare my interest a trade associations and chambers (TAC) president. Strong TACs can act as force multipliers for their respective Industry Transformation Maps (ITMs), helping to communicate their objectives to businesses in their sector and to understand and encourage participation in the various schemes under the ITMs. However, not all TACs are the same. Some TACs are more able to play this role, while others, to be honest, are simply social clubs or talk shops, and yet others are plagued by internal politics and personal agendas and do not have much in terms of services to their members.

Would the Ministry consider introducing independent standards certification for TACs, perhaps based on the Singapore Chinese Chamber of Commerce and Industry (SCCCI)'s Growth and Competency Framework that was launched last year?

This could achieve two objectives: first to encourage TACs to level up in a structured manner and second, to help the other tripartite partners identify TACs that can play a bigger role in industry transformation.

These certified TACs could then be engaged by the Government to carry out such roles as administering industry-specific schemes and grants, and/or taking the lead in certain appropriate initiatives.

My second question, Sir, is a follow-up to a point I made in my Budget debate speech. The key tripartite partner at the national level representing businesses is the Singapore National Employers Federation (SNEF). On the MTI's pro-enterprise panel and other initiatives, the key business representative is the Singapore Business Federation (SBF).

Even if a distinction could be made that SNEF represents labour concerns and SBF represents commercial interests, I would submit this is an entirely artificial distinction, simply because labour and manpower considerations are one of the most important commercial consideration of any business, and often, it is also the largest item of expenditure. Hence, is there a need for two apex TACs?

In this regard, I would like to ask if the Ministry would consider merging SBF and SNEF in order to have a unitary national-level body representing businesses at tripartite and other forums.

12.15 pm

Strengthening Trade Associations and Chambers

Mr Desmond Choo (Tampines): Thank you, Chairman, businesses today have to cope with very different challenges compared to those in the past. The demands of the new workforce have seen a pivotal shift. Digital transformation has shaken the business landscape. Geopolitical tensions must now be navigated. Businesses also need to be on the constant lookout for opportunities in overseas markets to diversify. These are consequential and intractable issues. And this particularly affects our SMEs which comprise the vast majority and backbone of our economy in Singapore.

This is where trade associations and chambers of commerce (TACs) have important roles to play. Over the years, especially through our history, TACs, such as SNEF and the Singapore Chinese Chambers of Commerce and Industry (SCCCI) have been instrumental in the development of Singapore's business landscape by catalysing the building of capabilities in companies, especially SMEs. Their efforts in galvanising businesses to gain early mover advantages in then-emerging markets and capitalising from the digital transformation wave is what enabled Singapore to enjoy its status as a key business hub in the region.

In more recent years, TACs have also played their part in supporting a stronger Singapore. For example, the success of the CDC Voucher scheme would not have been possible without the support from TACs. For example, the Federation of Merchants' Association Singapore (FMAS) worked alongside the CDCs in optimising redemption procedures and onboarding hawkers and merchants onto the scheme. There are now over 17,000 participating hawkers and merchants, and this would not have been possible without the help of TACs. On the TAC's efforts in the SME front, over 25,000 SMEs received assistance from SME Centres run by TACs through business counselling, capability development workshops, and upgrading initiatives in 2022.

This clearly illustrates the vital role that TACs play in helping Singapore and its businesses. How can our TACs magnify their roles in rallying industries and guiding businesses to overcome and emerge stronger from challenges? How can we enable our TACs to better serve their members better?

TACs can also work with its partners to provide more overseas work opportunities for Singaporeans. As mentioned in my earlier Budget speech, overseas work experiences are highly valued by our younger people. With the extensive linkages enjoyed by our TACs across the globe, more can be done in terms of partnerships between companies to open up secondment programmes. By establishing such programmes between local and overseas companies or even between local and overseas TACs, benefits, such as skillset transfers and networking opportunities can come about.

However, the TACs face two challenges: talent shortages and funding.

First, what are the resources that TACs can tap on to strengthen their internal leadership development and training? Critical to a TAC's proper functioning is a strong secretariat because TACs' leadership are mostly comprised of business leaders contributing on a voluntary basis. Perhaps, the Ministry could look into expanding the public sector's secondment or attachment schemes to TACs. Such arrangements would be of mutual benefit to both TACs and the public sector with the exchange of skillsets and providing our people with broadened viewpoints.

Another way to ensure a larger talent pool for TACs could be through establishing structured internship opportunities between our institutes of higher learn (IHLs) and TACs. There may also be scope to look into improving training for current employees of TACs to ensure that skillsets remain updated and relevant vis-a-vis the issues to be tackled by TACs.

Next, on funding the TACs. First, the Ministry can consider funding TACs to assist Singaporean businesses to expand overseas. Indeed, the Ministry has done so with SBF via the GlobalConnect@SBF. Can the Ministry provide an update on the progress? While businesses must continue to capture opportunities in big markets, such as China and India, more must be done. For example, businesses must act fast to gain a first-mover advantage in emerging markets, such as Africa or Latin America. Is the Ministry considering expanding on programmes, such as GlobalConnect@SBF to other TACs?

Enhancing Consumer Protection

Mr Melvin Yong Yik Chye (Radin Mas): Mr Chairman, I declare my interest as President of the Consumers Association of Singapore (CASE).

In my Budget debate speech, I highlighted the need to strengthen consumer protection, particularly in our current inflationary environment. Today, I would like to propose how we can do so in three areas.

First, we should mandate prepayment protection for sectors which collect large sums of prepayments. Today, mandatory prepayment protection is already practised in some sectors, such as private education and massage establishments.

According to complaints received by CASE, consumers have suffered more than $6 million in prepayment losses since 2018. In 2022 alone, consumers reported more than $645,000 in losses due to sudden business closures. This was a 24% increase from the $520,000 in losses reported by consumers in 2021.

Homeowners are a particular concern. Renovation contractors collect large sums of monies upfront, yet the industry lacks mandatory prepayment protection. This places homeowners at significant risk, should anything adverse happen to the contractor.

Today, CASE accredits renovation contractors under the CaseTrust mark. Accredited contractors protect consumers' deposits against sudden business closure through a deposit performance bond. There are currently 138 accredited contractors, but this is only a fraction of the estimated 6,700 renovation contractors operating in Singapore. I urge the Ministry to expand mandatory prepayment protection to this industry.

Second, we should mandate a cooling-off period for the beauty industry. Today, the laws already provide for a mandatory cooling-off period for certain industries, such as insurance and direct sales.

Complaints on pressure sales tactics and misleading and false claims account for 25% of beauty-related complaints received by CASE in 2022.

A mandatory cooling-off period will address the problem of pressure sales tactics by giving consumers sufficient time to consider or reconsider their purchases. If they do not wish to proceed with their beauty packages, they have the right to cancel and to obtain a refund.

Lastly, we should mandate seller verification on e-marketplaces.

Last November, it was reported that a consumer bought an automated laundry rack on a major e-marketplace, only to receive a piece of cardboard and some clothes hangers. Unfortunately, such scams are only the tip of the iceberg.

According to the Police, more than $21 million were lost by consumers in e-commerce scams last year. Mandating seller verification for e-commerce will ensure accountability of sellers for their product listings, reduce the risks of scams and aid resolution of consumer disputes.

The Chairman: Mr Gan Kim Yong.

The Minister for Trade and Industry (Mr Gan Kim Yong): Mr Chairman, let me first thank Members for your comments, suggestions and your views. After more than three years of fighting the COVID-19 virus, we have now arrived at DORSCON Green. Economic activities have largely resumed, and life has more or less returned to normal. I must record my thanks and appreciation to our workers who have kept our economy going and our essential services flowing during the pandemic.

But even as we emerged from the COVID-19 pandemic, new challenges surfaced. The outbreak of the Russia-Ukraine war compounded the supply chain disruptions triggered by COVID-19, driving up prices of energy, food and almost everything else. Global inflation soared, which led many countries to tighten their monetary policies, causing the global economy to slow down. As a small and open economy, Singapore felt the effects of these global developments keenly.

Mr Liang Eng Hwa asked how the Singapore economy performed in 2022. Let me give a quick recap. Our economy grew 3.6% in 2022.

Outward-oriented industries, such as electronics, chemicals, and finance and insurance, were affected by weaker external demand. However, as countries emerged reopened their borders, the strong recovery in air travel and international arrivals have given a boost to our aviation- and tourism-related sectors, as well as consumer-facing sectors, such as retail trade and food and beverages (F&B) services. The professional services sector also benefitted from the lifting of travel restrictions, as businesses could better service and engage their customers overseas.

Singapore's position as a global business hub remained strong, as companies anchored their corporate and manufacturing activities here to strengthen the resilience of their supply chains and operations. We secured record commitments of $22.5 billion in Fixed Asset Investments, in areas, such as semiconductors, aerospace and agri-food, as well as generated $6.2 billion in Total Business Expenditure. When the committed investments are fully implemented, we expect them to create over 17,000 jobs, and more than $20 billion in value-added per year for Singapore.

Our employment situation also improved, with the annual average resident unemployment rate falling to a four-year low of 2.9% in 2022. Nominal median gross monthly income for resident full-time workers grew by 8.3% in the same period. After taking into account inflation, real median income grew by 2.0%. While higher wages add to the costs for businesses, the key is to ensure that productivity increases to support higher wages. In this way, both businesses and workers will benefit.

Mr Liang Eng Hwa also asked about the outlook for 2023 and the challenges that businesses need to prepare for. We expect the Singapore economy to grow by 0.5% to 2.5% in 2023.

Growth in the major advanced economies, such as the US and Europe, will slow amidst tightening financial conditions, which will crimp consumption and investment spending. The possibility of recessions in these economies cannot be ruled out. On the upside, Asian economies are expected to continue growing. Southeast Asian economies will benefit from the ongoing recovery in domestic and tourism demand, while China's reopening is likely to provide some lift to global demand.

Global supply chains have recovered from the worst effects of the pandemic, but they continue to be affected by the Russia-Ukraine war and reshaped by efforts to re-shore or "friend-shore" operations and production. As a result, transport and logistics costs are likely to remain elevated.

Several Members highlighted that businesses are having difficulties managing rising costs. Mr Derrick Goh and Mr Shawn Huang asked how the Government will assist businesses in overcoming these challenges.

The current inflationary environment is a global phenomenon. The Singapore Government has adopted a range of measures to mitigate the impact of inflation. We have undertaken several rounds of monetary policy tightening and rolled out three support packages last year, totalling more than $3.5 billion, to address cost-of-living concerns. In addition, Deputy Prime Minister Lawrence Wong has also announced several measures this year to support our businesses, including an extension of the enhancements to the Enterprise Financing Scheme to help enterprises access credit, as well as an extension of the Energy Efficiency Grant to encourage businesses to invest in raising their energy efficiency. Minister of State Low Yen Ling will share more details in her speech.

Given that we are a small and open economy, we cannot be totally insulated from these global inflationary pressures. For us to remain competitive, we must continue to improve efficiency and raise productivity.

If we look beyond the near term, there are major structural shifts in our operating environment that will create both challenges and opportunities for Singapore.

The multilateral open trading system is under pressure and geopolitical tensions are increasingly shaping countries' economic strategies. These developments will undoubtedly have implications on the global economy as well as Singapore's economy.

New technologies are disrupting industries and business models, such as Artificial Intelligence (AI) for example. As AI technology improves and becomes integrated in more applications, such as ChatGPT, which many of us are familiar with and I hope none of us are using it to prepare our speeches. [Laughter.] These applications could take over tasks in areas such as marketing and sales, IT and engineering, and change the way we do business.

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I agree with Mr Don Wee, that climate change is the defining challenge of our time. The transition to net-zero emissions will be one of the deepest and broadest transformations to our economy. It will affect almost every industry, every company, from energy to manufacturing, transport to financial services.

Several Members have spoken about manpower constraints. Indeed, manpower has always been a constraint. Our local workforce is ageing and we are faced with the stark reality of a slowing local workforce growth. If we are to keep our economy vibrant, we must continue to deepen our skills and accommodate new arrivals to complement our local workforce, so that we can allow our companies to grow. This will require difficult trade-offs to be made carefully, not just at the company-level, but also as an economy and as a society.

While these shifts may seem daunting, we are moving forward from a strong position, given our robust fundamentals. These include our efficient infrastructure, extensive physical and trade connectivity, a highly-skilled workforce which we continuously invest in, and our nimble and enabling policy environment. These were the same fundamentals that saw us through the COVID-19 pandemic and which demonstrated to our businesses and investors that Singapore is a reliable partner, even in a crisis. We can, therefore, take heart that if we are willing to work hard and work together, we can turn challenges into opportunities.

Last year, I spoke about the Singapore Economy 2030 vision, in particular about our Manufacturing 2030 and Trade 2030 strategies. Today, I will introduce our Services 2030 vision, and elaborate on what we are doing as part of our Enterprise 2030 strategy.

On Services 2030, our Services cluster encompasses very diverse sectors. It includes outward-oriented sectors such as Information and Communications, and Professional Services, as well as domestic-facing ones, such as the Retail Trade and F&B services. It is also a very large cluster, accounting for around 70% of our Gross Domestic Product (GDP).

Our Services 2030 vision seeks to harness the growth opportunities in digitalisation and sustainability, and anchor Singapore as a leading, vibrant hub for businesses, lifestyle and tourism. In particular, the Modern Services cluster comprises some of the fastest-growing sectors in our economy. Within this decade, we aim to grow the Value-Added (VA), from the Modern Services cluster by at least 50% and create more than 100,000 additional jobs.

A good example is the Professional Services sector within these Modern Services. It is a diverse group too, including company headquarters, professional services firms providing consulting, legal and accounting services. Together, they contribute to Singapore's vibrant business and innovative ecosystem.

Today, I am pleased to announce the launch of the Professional Services Industry Transformation Map 2025, or ITM 2025, which will play an important role in strengthening Singapore's role as a leading business hub. Our Professional Services sector is well-positioned to seize opportunities for business growth driven by digitalisation, sustainability, emerging markets and new customer segments in Southeast Asia. The Government will work with stakeholders to help Singaporeans upskill and reskill, so that they, too, can tap on opportunities and realise their career aspirations in this sector. Minister of State Alvin Tan will elaborate on our strategies in this regard, including the Professional Services ITM 2025.

The Professional Services ITM is one of the 23 ITMs that the Government introduced in partnership with the Future Economy Council Clusters, to support industry transformation. Several members, including Mr Pritam Singh during the Budget debate, asked about our ITMs. The 23 ITM sectors have led the way in terms of economic growth and industry transformation. However, the COVID-19 pandemic had inevitably affected the progress of some of them.

Across the 23 ITMs, from 2016 when they were introduced to 2021, their VA, in real terms, grew by 2.9% per annum. This was marginally above the performance of the economy as a whole, which was at 2.8% per annum. However, if we only look at the period just prior to COVID-19, from 2016 to 2019, the VA in real terms for the 23 ITMs sector, grew by 3.5% per annum, which was a fair bit higher than the performance of the economy as a whole, averaging 3.1% per annum.

The ITM sectors, as a whole, also did better for productivity, which grew by 4% per annum for the period 2016 to 2021, compared to the overall economy at 3.5% per annum. On jobs, despite the impact of COVID-19, there was a net creation of about 134,000 resident jobs from 2016 to 2021. Some ITM sectors performed better than others. The Financial Services sector achieved real VA growth of 6.8% per annum from 2016 to 2021, exceeding the real VA growth target of 4.3% set for the period from 2016 and 2020. Close to 26,000 PMET jobs were created during this period, far exceeding the target of 12,000 jobs.

On the other hand, under the Precision Engineering ITM, we had set a nominal VA growth target of 8% and a job creation target of 3,000 PMET jobs by 2020. Over the period 2016 to 2021, the sector exceeded its VA target and achieved growth of 11.2% per annum. But it did not do as well in job creation, creating over 2,000 PMET jobs, partly because of the COVID-19 pandemic.

While COVID-19 has disrupted the progress of our ITMs, we have since embarked on a refresh of the ITM strategies – the ITM 2025 refresh. To take into account our experience during the pandemic and address emerging priorities, such as sustainability and the need for greater economic resilience. We should allow some time for these strategies to take root, and then assess again the progress of the ITM 2025 strategies.

In essence, ITMs reflect the story of our economic development and constant transformation to respond to challenges and stay ahead of the curve. Ms Jessica Tan and Mr Saktiandi Supaat rightly pointed out that these same challenges can also create opportunities that businesses can capture. Two aspects stand out: digitalisation and sustainability.

COVID-19 gave a decisive push for many businesses to adopt digital tools, such as digital shopfronts and e-payments. Going forward, digitalisation will remain critical in helping companies raise productivity and optimise their operations, and to alleviate higher costs and manpower challenges. As supply chains increase in complexity and unpredictability, digital capabilities will also allow companies to have greater visibility of their operations and pre-empt bottlenecks. More importantly, digital technology can unlock companies' ability to innovate and develop new services and products. Examples of such transformation are everywhere.

Let me just take, for instance, telehealth. We saw the sector take off during COVID-19, as people turned to seeing their doctors online instead of visiting the clinics physically. Today, Singapore has a growing telehealth ecosystem, with several companies that have started to expand their operations overseas. One example is Doctor Anywhere, which was founded in 2017. The homegrown company grew its user base in Singapore by three-fold and expanded to Malaysia and the Philippines in the midst of COVID-19. Today, it is present in six key Southeast Asian markets, and in time to come, I am sure Doctor Anywhere will be everywhere.

In the area of sustainability, investors and customers are raising their expectations. This may be a challenge, but many Members also rightfully highlighted the opportunities this presents for our companies. Having a clear sustainability strategy and statement will increasingly be an advantage when serving global markets, and companies need to urgently re-think how to transform their business models and operations to thrive in a low-carbon world. There are ready solutions, such as more energy-efficient equipment, for which Government funding support is available.

Koda, a leading Original Design Manufacturer of furniture, is a good example of a company that is transforming itself to compete in a low-carbon world. The company has implemented a comprehensive environmental tracking and management system for its furniture manufacturing operations. It is also developing a comprehensive sustainability strategy. Minister of State Alvin Tan will elaborate on how we are supporting our companies to seize opportunities in digitalisation and sustainability in his speech.

Even as we press on with the transformation of industries, we must continue to strengthen Singapore's position as a global hub for businesses, innovation, investors and talents. This has allowed us to attract global companies and investors to invest in Singapore, creating opportunities and jobs, even in the depths of the COVID-19 pandemic. We must work even harder to secure Singapore's competitiveness as an investment location. This is crucial, as the international tax landscape is also going through a significant and fundamental change with the introduction of Base Erosion and Profit Shifting 2.0, or BEPS 2.0 in short. Several Members rightly pointed out that Singapore will, indeed, be affected.

We need to carefully assess the impact of BEPS 2.0 on affected Multinational Enterprises, or MNEs, here, and on our overall competitiveness as a global business hub. Deputy Prime Minister Wong has announced our intention to implement Pillar 2 from 2025 and introduce a Domestic Top-up Tax at the same time, to top-up the effective tax rate of MNE groups in Singapore to 15%. Giving companies notice now will allow affected MNEs time to assess the impact on their operations, and for our economic agencies to work with them to address their concerns and support their continued growth in Singapore. As Deputy Prime Minister Wong has said, we will also continue to monitor international developments and adjust our implementation timeline as needed.

Mr Sharael Taha asked about the use of non-tax incentives to enhance our competitiveness. Ministry of Trade and Industry (MTI) has continuously sharpened our toolkit to ensure that Singapore remains competitive in attracting and retaining investments. In this regard, the Government has topped up the National Productivity Fund, or NPF in short, and will expand its scope to include investment promotion as a supportable activity. This is in addition to its existing focus on productivity improvements, and continuing education and training.

I agree with Mr Sharael Taha on the importance of ensuring that projects supported by the NPF lead to real productivity improvements. We currently fund a diverse portfolio of programmes and schemes under NPF, ranging from sector-specific ones like the Construction Productivity and Capability Fund (CPCF) under the Building and Construction Authority (BCA), to horizontal programmes, like the SkillsFuture Enterprise Credit scheme. These schemes have, thus far, achieved positive results.

One example is the Increase SME Productivity with Infocomm Adoption and Transformation, it is a long name, but in short, it is iSPRINT programme. iSPRINT programme helped about 10,000 SMEs leverage infocomm technology solutions to improve their business operations and increase productivity. A 2016 study showed that the median firm saw an increase in revenue of 3.1% after adopting solutions under the scheme, compared to firms that had not adopted the solutions. iSPRINT has ceased in 2018, but SMEs can continue to tap on the SMEs Go Digital programme, which provides a range of support to meet businesses' digitalisation needs.

Apart from productivity indicators, each NPF project also has specific KPIs that they must meet, in areas like upskilling of individuals and development of industry platforms, such as centres of excellence – all of which contribute to productivity growth. We will continue to ensure that funds are used judiciously to support investment promotion, enhance our productivity and deliver tangible benefits to our businesses and workers.

Apart from providing support through the NPF, I want to emphasise that investment promotion incentives which are aligned with international rules will remain relevant and important to companies not subject to the global minimum effective tax rate under the BEPS Pillar.

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Therefore, we have extended our Pioneer Certificate, Development and Expansion Incentive and Investment Allowance tax incentives for an additional five years until 31 December 2028. This will allow us to attract investments which are expected to generate significant economic contributions to Singapore over time.

Besides companies, we also want to attract high calibre investors who can strengthen our ecosystem. Such investors bring with them capital that support the growth of our local businesses and create good jobs for more Singaporeans. They also provide valuable networks to connect us to the region and beyond as well as contribute their entrepreneurial skills to our business ecosystem.

The Global Investor Programme (GIP) is one way through which we attract and anchor these investors in Singapore. The programme has delivered tangible outcomes for Singapore. Over the past 11 years, GIP investors have brought in around $5.5 billion in total business expenditure, generating over 24,000 jobs in Singapore.

To ensure that Singapore captures even more value from the capital, businesses and networks that the investors bring, the Economic Development Board will enhance the GIP by raising the investment quantum to ensure greater contributions from these investors and to direct more funds and resources into our local ecosystem. In addition, the scope of the GIP-select funds will be adjusted to capture more value from a wider pool of investors. EDB will share more details in due course.

To build a strong Singapore Economy 2030, we cannot just rely on foreign investments. Nurturing a deep bench of local enterprises that are innovative, future-oriented and which can find success beyond Singapore shores is a key priority.

Ms Janet Ang asked how MTI is assisting local companies to seize new opportunities and compete successfully in international markets. One way we do so is through our strong trade connectivity, leveraging on the network of 27 Free Trade Agreements (FTAs) that we have. Such agreements help reduce uncertainties, risks and friction that businesses face when venturing into overseas markets.

For example, Prima Food's ready-to-cook products are now sold in over 40 markets, facilitated by preferential access through our FTAs. Prima also exports products like wheat flour and premixes to Japan under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which provides tariff savings of about 20%.

We are also making inroads in pioneering new agreements in emerging areas to create opportunities for our businesses.

To date, we have signed four Digital Economy Agreements and concluded the first Green Economy Agreement with Australia last year.

Enterprise Singapore also has a range of schemes to help Singapore companies address common pain points and support them through the different stages of their internationalisation journey.

In 2022, we supported 2,000 enterprises to embark on internationalisation activities, which was 25% more than the year before. To help companies break into new markets, we will make further enhancements to our existing programmes.

For the Market Readiness Assistance scheme (MRA), we had in 2020 introduced a time-limited higher grant cap of $100,000 until 31 March 2023, which is next month. I am heartened to hear from Ms Janet Ang of the value that the industry sees in the MRA. As many companies' internationalisation plans have been disrupted by the pandemic, we will extend the enhanced grant cap by another two years until 31 March 2025.

Ms He Ting Ru suggested having an Exim Bank for our local companies. We have indeed provided financing support to enterprises through various financing schemes to help them venture into overseas markets. These include the Enterprise Financing Scheme or EFS-Trade Loan and EFS-Project Loan. Ten years ago, we also set up Clifford to provide financing for local companies doing infrastructural projects abroad.

To improve access to financing for local enterprises expanding to emerging markets, we will pilot the expansion of the pool of participating financial institutions for the EFS to include selected foreign-based financial institutions and multilateral development banks with strong expertise and appetite in emerging markets such as the International Finance Corporation and the Asian Development Bank.

Specific to green financing, we recently launched EFS-Green, in addition to MAS' green financing initiatives.

To support enterprises' use of e-commerce platforms, we will enhance the Double Tax Deduction for Internationalisation by expanding the scope of qualifying costs to include costs incurred to support growth via e-commerce. These may include costs arising from business advisory, product listing and marketing content development.

Beyond schemes and trade agreements, we have also facilitated partnerships between global companies and local enterprises to help local enterprises internationalise.

One example is Singapore garment manufacturer Teo Garments and 3D apparel design solution provider Browzwear's partnership with Lidl & Kaufland Asia, the sourcing arm for Schwarz Group, a food and retail industry leader in Europe. This has allowed our companies to scale and gain access to the European market, leveraging on Lidl & Kaufland's extensive consumer base.

Companies that are further along in their growth and internationalisation journeys often require bespoke support to fully unlock their potential and develop into truly global companies.

One such example is Sing Fuels, a home-grown marine bunker and lubricant trader that supplies to more than 350 ports globally. Through its partnership in Scale-Up, our flagship programme to support high-growth enterprises, Sing Fuels has sharpened its business growth plans, developed a market entry strategy into Africa for the lubricant business and also set up a clean energy arm, which trades and undertakes research and development into more sustainable fuels.

Sing Fuels is also leveraging on EDB's Corporate Venture Launchpad to develop a technology platform that addresses operational and capital challenges in the marine fuel industry.

We hope to support more local companies like Sing Fuels, which fly Singapore's flag high internationally while contributing significantly to our economy and creating good jobs for Singaporeans.

We introduced the Singapore Global Enterprises (SGE) initiative at the COS last year to build a strong slate of locally-grown high-growth companies that can compete against the best in the world.

The needs of these companies will differ vastly and they often require dedicated and customised support to meet their specific challenges. Building upon the flagship Scale-Up programme, Enterprise Singapore will partner these companies on their growth journeys in the following ways.

First, we will continue to strengthen and deepen the companies' capabilities in developing new products, penetrating new markets and improving their work processes.

To help them build sustained innovation as a core competitive strategy, we will support them in undertaking R&D and innovation activities. We will also support companies in expanding their global footprint and diversifying their supply chains.

To facilitate this, companies may receive customised financial support from Enterprise Singapore, such as through the co-funding of the establishment of their in-house R&D and innovation centres and efforts to build supply chain resilience.

Second, we will develop and deepen our talent pool. Existing schemes like the Singapore Global Executive Programme help local high-growth companies enhance their human capital capabilities and attractiveness as employers.

We will also expand the coverage of the Skills Future Enterprise Credit to include Scale-Up and the Singapore Global Executive Programme. This will allow eligible employers to use their credit to offset qualifying expenses under these programmes.

Third, Enterprise Singapore will introduce Scale-Up X, which are new specialised capability building programmes in areas such as nurturing leadership, enhancing readiness for investments and initial public offering listings and sharpening internationalisation strategies and execution plans.

The bench of promising Singapore enterprises has grown in recent years. We aim to work with a pool of about 100 to 200 of such enterprises. For the more ambitious companies, we will give them an additional boost through the SGE initiative so that they may become global leaders in their respective fields.

I look forward to the rise of a new generation of SGEs as more Singapore companies make their mark globally. We will be with you every step of the way.

Our efforts under the Singapore Economy 2030 vision can only be achieved if we have a high-quality workforce with industry-relevant skill sets and capabilities.

As the structural shifts that I had earlier described take root in our economy, we can expect existing jobs to be transformed at a faster pace even as new jobs are being created.

Ms Mariam Jaafar and Prof Koh Lian Pin asked specifically how the Government is equipping the Singapore workforce to take on jobs in the green economy. To prepare companies and workers for the transition to a greener future, the Government has worked with tripartite partners to roll out training programmes at various levels, including broader-based courses such as Enterprise Singapore's Enterprise Sustainability Programmes for business executives and sector-specific programmes such as Workforce Singapore's Career Conversion Programme for sustainability professionals.

Given the fast-evolving landscape of the green economy, there is a need to ensure that our training programmes remain relevant.

Therefore, MTI, in partnership with SkillsFuture Singapore will set up a Green Skills Committee to bring together industry players and training providers to develop green skills in the local workforce that are relevant to industry needs.

For a start, we will focus on immediate needs such as training workers to conduct sustainability reporting and equipping them with the skills to operate in new growth areas in the energy sector such as renewable energy and energy storage systems.

We will continue to work closely with the industry to identify new demand areas for green skills as this platform grows.

Second Minister Tan See Leng and Minister of State Alvin Tan will share more on our efforts to ensure our workforce is well equipped to take on the opportunities under our Singapore Economy 2030 vision.

Sir, let me conclude: 2023 will likely not be an easy year for businesses and the Government will not hesitate to provide targeted support where needed. However, we must not lose sight of the longer-term future. Achieving our Singapore Economy 2030 vision will require hard work and in some cases, sacrifices. Companies and workers alike must be prepared and ready for transformation. In the face of rising costs, biting resource constraints and a more challenging international environment, this is the only viable path to long-term growth and success.

If there is one thing the COVID-19 pandemic has taught us, it is that when the situation calls for it, Singapore as a country and Singaporeans can be agile and resilient, prepared to make difficult decisions for the greater good and help one another along the way.

All of us – employers, workers, unions, trade associations and the Government – can all do our part to ensure that Singapore continues to punch above our weight on the global stage and build a strong and vibrant economy for our future generations. [Applause.]

The Chairman: Second Minister Tan See Leng.

The Second Minister for Trade and Industry (Dr Tan See Leng): Mr Chairman, Sir, last year, I announced the Enterprise 2030 strategy to build and sustain a vibrant ecosystem of Singapore enterprises that are future-ready and able to compete globally.

Minister Gan shared our plans to groom the most promising local enterprises into Singapore Global Enterprises. I will elaborate on how we are helping these and other local enterprises to thrive.

We will do so by supporting firms to maximise their human capital and develop innovation capabilities.

First, maximising human capital. Singapore has consistently invested in our human capital through upskilling our workforce and remaining open to world-class talent.

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This strategy has paid off well. It has allowed us to grow a vibrant business and trading hub, with competitive Singaporean enterprises and good jobs for Singaporeans.

Look at the data over the last decade. From 2012 to 2022, the real resident median income grew by 2.6% per annum. This translates into a cumulative growth of almost 30% over 10 years. This is real income growth with the effect of inflation already accounted for. Real resident household incomes have also risen across the same period.

Benchmarked against Organisation for Economic Co-operation and Development (OECD) countries, our resident employment rate is among the highest while our resident unemployment rate has remained among the lowest. These are results which we celebrate.

These have arisen because of the policies which we have put in place over the years. By investing in ourselves and in our people, while remaining open to global talent and global businesses, we have grown the pie and created good outcomes for Singaporeans.

Ms Jessica Tan and Mr Shawn Huang asked about the tight labour market and what businesses can do to adjust to manpower challenges. I would like to reassure them that we have a suite of policies in place to support businesses.

Let me give an update on four of these policies today. These are targeted at various levels of talent within our enterprises, all the way from the intern to the CEO.

First, the Enterprise Leadership for Transformation programme (ELT). ELT is targeted at the senior leadership of our promising SMEs – the owners, the founders or successors and key members of their management. ELT supports these business leaders to achieve the next bound of growth by helping them develop their business strategies and leadership capabilities.

ELT was first announced at Committee of Supply 2020 as a three-year pilot. Since its launch in October 2020, more than 400 business leaders from 300 companies have been onboarded.

One such example is 1-Group, a homegrown lifestyle, F&B and hospitality group with over 30 brands under its portfolio. Through the ELT programme, the company sharpened its Southeast Asia internationalisation strategy. Leveraging new contacts made from an ELT market immersion trip to Vietnam, 1-Group has successfully partnered an in-market hospitality solutions company to expand into Vietnam.

To support more firms like 1-Group, I am happy to announce that the ELT programme will be extended till FY2025. This will allow more SME business leaders to benefit from the programme.

Second, the Tech@SG pilot. Launched in 2020, the Tech@SG pilot is targeted to support high-growth tech startups as part of their expansion in or foray into Singapore. Under Tech@SG, they can secure up to 10 new Employment Passes (EP) for their core team members.

The Tech@SG scheme has served Singapore well. In the past three years since its launch, over 100 companies have come onboard. These companies span across 13 different countries and across domains such as fintech, e-commerce and cybersecurity. Together, these Tech@SG companies have created more than 1,500 local jobs. This is in spite of the COVID-19 pandemic. This is a testament to Singapore's continued attractiveness to global talent.

SpeQtral is a local startup founded in 2018 that has benefited from Tech@SG. It is a spin-off from the Centre for Quantum Technologies at NUS, SpeQtral specialises in quantum key distribution. This is a nascent technology that enables users to establish secure communications networks with an additional quantum-secured encryption layer. SpeQtral came onboard as a Tech@SG firm in December 2021 and has since tapped on the programme to bring in external experts in this nascent field. At the same time, it has also hired locally to expand its footprint here in Singapore.

With the positive results from Tech@SG, I am happy to announce the mainstreaming of the Tech@SG pilot. There will be no change to the qualifying criteria to ensure selectivity. Schemes like Tech@SG must be complemented by training of local talent, which we will continue to support through schemes like the TechSkills Accelerator (TeSA) programme operated by IMDA. In time, locals will be able to take on these technology jobs.

Third, the Singapore Global Executive Programme (SGEP). This scheme is targeted at fresh and recent local graduates. This programme will support such young local talent to pursue structured career progression pathways in high-growth companies, including rotations to core functions and global attachments. I had announced this at the COS last year. I am glad to share that the programme was launched last December.

Fourth, the Global Ready Talent Programme (GRT). Launched in 2019, this programme aims to build a talent pipeline to support Singapore enterprises with their overseas expansion. It does so by co-funding local, young talent to take on both local and overseas internships.

To date, the programme has supported over 19,000 internships in over 2,500 local companies despite the disruptions brought about by COVID-19. Now that the countries across the world have reopened their borders, EnterpriseSG (ESG) is further curating the GRT to ensure it remains relevant and nimble in the post-COVID-19 new normal.

So, in summary, the four schemes I have described – the ELT, the Tech@SG, the SGEP and GRT – all these schemes will allow our enterprises to maximise their human capital at all levels – from the intern to the CEO. These enterprise-specific schemes complement the broader manpower schemes which we have in place, for example, the ONE Pass and COMPASS, and which I will give an update on in my Ministry of Manpower (MOM) COS speech tomorrow.

My hope is that this suite of policies which MTI and MOM have worked closely together will help us to unlock the human capital that Singapore requires for our next phase of growth.

To realise our Singapore Economy 2030 vision, we need to continue to invest in our collective human capital. We must be willing to learn, to imbibe, from the best by remaining open to global talent. And we need to push the boundaries and we should not be afraid to take risks.

And this brings me to my second point, which is on innovation. Ms Janet Ang and Mr Shawn Huang have asked about MTI’s efforts in developing innovation capabilities in our enterprises. In Research, Innovation and Enterprise (RIE) 2025, we are striving towards expanding the base of innovative enterprises and enabling the creation of globally competitive products and services out of Singapore.

This involves three pivotal moves. First, we are working with enterprises to strengthen their capability and capacity for market-oriented innovation. Second, we are scaling up and strengthening the Innovation and Enterprise (I&E) platforms to enable enterprises to better tap on our public research institutions and other innovation ecosystem players. Third, we are forging strong connections to major innovation hubs and key demand markets.

We have been making steady progress. As Members have heard from Deputy Prime Minister Wong in his Budget speech, under the Enterprise Innovation Scheme (EIS), tax deductions will be enhanced to support businesses to engage in R&D and innovation-related activities.

In particular, innovation conducted through our polytechnics and the Institutes of Technical Education (ITEs) will now benefit from tax deductions. The same will also apply for innovation conducted through our existing Centres of Innovation (COIs) set up in partnership with selected polytechnics and A*STAR’s SIMTech.

Previously, some of these innovation activities may not have qualified for tax deductions for R&D. This new provision will encourage our businesses, especially SMEs, to kickstart their innovation journey by tapping on the technical know-how and capabilities within these partner institutions. Hence, I look forward to more translational outcomes from such private-public collaborations.

Beyond financial support, many companies are also looking for advice and strategic direction to guide their investments in innovation. While big companies can set up distinguished Boards comprising leading industrialists and luminaries to provide such direction, many SMEs do not have such a luxury.

And that is why we launched the Innovation Advisors Programme (IAP) four years ago in 2019 and we have been refining it consistently. This programme supports companies in partnering industry veterans to develop and to bring to market differentiated product offerings.

The programme is run by IPI, which is a subsidiary of EnterpriseSG. I am happy to report that to date, IPI has onboarded 31 advisors and facilitated 88 projects under this programme.

ProfilePrint is a local agrifood tech enterprise that has benefited. ProfilePrint engaged the assistance of Innovation Advisor, Mr Phey Teck Moh, a seasoned mentor and angel investor, to help review their business model and go-to-market plans. With Mr Phey’s help, the company closed its Series A1 funding round in August last year and it added Cargill, which is one of the world’s leading global food suppliers, to its panel of strategic shareholders.

Beyond these enterprise-centric programmes, we also have broader programmes to develop the innovation and enterprise ecosystem. Last October, I was happy to launch the Technology for Enterprise Capability Upgrading, or T-Up Eagles Award.

This recognises students’ achievements and contributions to our SMEs during their work attachments under the T-Up Integrated Work Study Programme (IWSP). Now under this programme, seconded A*STAR researchers get to work closely with students from the Singapore Institute of Technology (SIT) attached to the same SME.

And since the programme’s launch about two years ago, 24 SIT students have benefitted from this mentorship. I hope this will address Prof Hoon Hian Teck’s questions on how we are developing young talent.

For mid-career professionals, we have the Innovation and Enterprise Fellowship Programme (IFP). Launched in 2020, the IFP is a 12- to 18-month training programme administered by SGInnovate and is aimed at developing local talent or Fellows.

Mid-career professionals, including Researchers, Scientists and Engineers (RSEs), who are selected as Fellows will be trained to become “ambidextrous”, familiar with both technology and business aspects in areas such as cybersecurity, robotics and biomedical sciences.

IFP has achieved positive results in the past three years. More than 90 Fellows from academia and industry have been onboarded to the IFP, with many of them joining deep-tech startups and taking up technology commercialisation roles upon graduation from the IFP.

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Dr Yvonne Koh, who holds a PhD in Microbiology, is one of the Fellows who have benefited from this programme. Under the IFP, Dr Koh joined Lightstone Singapore, which is a venture capital firm that invests in life sciences technologies and companies. The experience provided her with exposure to a global venture investment team.

After Dr Koh graduated from the IFP in November 2021, Lightstone Singapore offered her a position as an investment professional, where she continues to source and assess global investment opportunities, and also support new company creation in Singapore.

Following this successful pilot, and to support more Fellows like Dr Koh, I am happy to announce enhancements to the IFP.

We are expanding the programme to include three public sector partners, namely, the National Additive Manufacturing Innovation Cluster (NAMIC), the Experimental Drug Development Centre (EDDC) and the Diagnostics Development Hub (DxD Hub). This means an increased capacity to take on and benefit more local talent. These are significant moves that underscore our commitment to support firms in innovation.

Let me now turn to energy. Last year, I explained the various emergency measures we took to manage the energy crisis. These measures have stabilised the electricity markets for now, but this is unlikely to be the last energy crunch that we will see, as the world embarks on its energy transition.

Mr Saktiandi Supaat, Ms Mariam Jaafar and Ms Jessica Tan asked how Singapore would safeguard our energy security with increased volatility in global energy markets and advance our energy transition at the same time. MTI is adopting three key strategies to support the critical transformation needed.

First, developing new energy supply sources to diversify and decarbonise our energy supply. Second, strengthening our energy market structure so as to ensure that the market continues to function well under volatile conditions. And third, building strong international collaborations to secure our energy supply and our energy technologies.

Currently, Singapore relies on natural gas for about 95% of our power generation. We will improve the energy efficiency of new and repowered natural gas power generation units through new emission standards. This will be introduced later this year.

However, further abatement and diversification of our energy supply will need to be achieved through tapping on renewable energy both within Singapore and beyond our shores, and through the use of new low-carbon alternatives.

First, Singapore is tapping on regional power grids to access cleaner energy sources abroad. Singapore plans to import up to four gigawatt (GW) of low-carbon electricity by 2035. This will constitute around 30% of Singapore's electricity supply then.

To date, EMA has received more than 20 proposals under its Request for Proposal, or RFP, to import electricity to Singapore. EMA remains on track to meet our imports target.

Over the last two weeks, several companies have submitted their final proposals for large scale electricity imports from various countries. Projects which received support from the source countries and meet our requirements will receive EMA's conditional approval. We expect to grant the first conditional approval soon.

To prepare for the large-scale imports, EMA is also conducting smaller-scale trials. Such projects will help us learn, build confidence and pave the way for our larger scale electricity import projects.

These include the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project, which commenced on 23 June 2022. In addition, YTL Power Seraya and Tenaga Nasional Berhad Pasir Gudang Energy intend to export 100 megawatt of electricity from Malaysia to Singapore.

Last month, I witnessed their exchange of agreement ceremony with Malaysia's Minister of International Trade and Industry. We hope to see this project commence this year.

Second, MTI launched Singapore's National Hydrogen Strategy which sets out plans to develop hydrogen as a major decarbonisation pathway for our power and industry sectors, to support Singapore's commitment to achieve net-zero by 2050.

Like LNG, hydrogen can be imported from various sources around the world, which enhances our energy security and our resilience. It is also a potential alternative to fossil fuels in the maritime and aviation sectors.

A key prong of our strategy is to experiment with the use of advanced hydrogen technologies on the cusp of commercial readiness. EMA and MPA have launched an expression of interest for utilising ammonia for power generation and to support maritime bunkering needs. Since then, we have received strong interest from industry players as well as international partners.

Third, we are accelerating solar deployment as we speak, and we are deploying energy storage systems to store and dispense intermittent solar power at different times to maintain grid reliability. As of end 2022, we have deployed around 800 megawatt-peak (MWp) of solar power, compared to around 500 MWp in mid-2021. As of the first half of last year, Singapore is already one of the most solar dense cities int he world and we are on track to achieving our solar panel deployment target of at least 2 gigawatt-peak (GWp) by 2030.

Earlier this month, I also officially launched a 285-megawatt hour (MWh) energy storage system on Jurong Island, which can meet the electricity needs of around 24,000 4-room HDB households for one day, in a single discharge.

Lastly, we are exploring if other forms of low-carbon energy supply, such as nuclear and geothermal are suitable for Singapore.

Mr Abdul Samad asked what job opportunities will arise from new energy solutions and what we are doing to prepare our workforce for these jobs. New energy solutions, such as solar, energy storage systems and smart grids, will create more skilled jobs for our workforce, including Power System Integration engineers and Energy Storage System software developers.

As Ms Poh Li San has rightfully pointed out, Singapore should invest more in talent development for our energy transition.

EMA is working closely with Government agencies, institutes of higher learning (IHLs), training providers and the Union of Power and Gas Employees (UPAGE) to develop and deepen core skills required by workers for the more imminent energy transition areas, like solar energy and energy storage systems.

The new Green Skills Committee that Minister Gan mentioned will identify and develop more programmes for newer forms of energy technology, like hydrogen and carbon capture as they become ready.

Speaking in both my capacities as Second Minister for Trade and Industry and the Minister for Manpower, we are aligned. And I urge all of our workers to join these programmes to reskill and upskill in clean energy areas.

I would also like to join and echo Mr Abdul Samad in extending our acknowledgement and appreciation to our workers in the power and gas industries, who worked hard to ensure that we had uninterrupted gas and electricity supply during the COVID-19 pandemic.

Mr Abdul Samad suggested a one-time reward for power and gas workers. During the pandemic, many of our essential workers stepped forward to play their part. Our healthcare workers, in particular, served at the frontline against COVID-19.

The COVID-19 Healthcare Award announced in November 2021 was in recognition of our healthcare workers' contributions and dedication. I would encourage employers in the power and gas industries to consider the contributions of their workers and to fairly recognise and reward their workers.

The global energy market continue be turbulent in the coming years because of geopolitics and climate action. But based on what we have learnt from the recent energy crisis, we will update our regulatory approach to strengthen the foundations of our energy market.

First, to ensure that there is sufficient power generation and capacity to serve demand, the Government will call for competitive tenders for new generation capacity and we will build new capacity if there is insufficient interest from private generation companies.

Second, EMA had put in place the Standby Fuel Facility during the recent energy crisis. We will institutionalise this as a permanent feature. I hope that this will address Ms Poh Li San and Dr Lim Wee Kiak's query if Singapore has a fallback plan should there be disruptions to our energy supplies. We are also exploring ways to centrally aggregate gas procurement and obtain more secure and longer-term contracts.

Lastly, EMA intends to enhance the regulatory requirements on electricity retailers to strengthen consumer protection and the retailers' ability to withstand market volatility. EMA is seeking feedback on the proposed enhancements and plans to announce the final changes later in the year.

The energy transition is challenging, given the increased volatility in global energy markets. No one country can do it alone, and we need to work together to advance our collective interests.

Singapore has partnered with like-minded countries to support one another in our decarbonisation efforts.

Last year, we signed Memoranda of Understanding (MOUs) on energy cooperation with Indonesia, Brunei, Cambodia, Lao PDR and Vietnam. We have also signed Memoranda of Cooperation with Japan and a Green Economy Agreement with Australia.

These G2G partnerships have helped to facilitate commercial collaborations, which demonstrate the interest and viability of renewable energy co-development projects for cross-border electricity trade. Such projects are beneficial for our region. Not only will they help to unlock the region's renewable energy potential, which can serve the domestic demand of source countries, they can also catalyse economic growth, by stimulating clean energy investment flows and generating new green jobs in source countries.

To boost the viability of clean energy trade projects, Singapore is also partnering with the US on a Feasibility Study on Regional Energy Connectivity. This is part of the US' Net Zero World Initiative. The US will collaborate with Singapore and Southeast Asian partners to explain the benefits of greater connectivity, as well as assess the technical, legal, and commercial steps that we need to take to realise ASEAN's vision of a regional power grid network.

We should not forget the role that international organisations also play. They shape our understanding of the dynamism in global energy markets and they help us to seize opportunities in the energy transition.

Last year, we announced that Singapore and the IEA, or the International Energy Agency, are exploring the possibility of establishing a regional cooperation centre here in Singapore. This will help broaden IEA's outreach to the Asia-Pacific and accelerate the region's low-carbon energy transitions.

Singapore also has strong partnerships with the International Renewable Energy Agency, or IRENA. We will continue strengthen and broaden our relationship with them.

The global energy transition is a challenging but critical undertaking that the world will need to manage this existential climate crisis. MTI will work closely with our industry stakeholders and our international partners to enhance our energy resilience in a low-carbon world.

Ms Janet Ang asked how we can help businesses through this transition. I have shared at length at how we are transforming the way in which we produce electricity and energy. But managing demand is also key to achieving a more sustainable future.

There are multiple schemes such as the Energy Efficiency Fund and Energy Efficiency Grant which help our businesses to become more energy efficient. Business and individuals will have to play their part to use more energy-efficient equipment and conserve energy in their daily lives.

1.30 pm

Sir, let me conclude with a few words in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] As the Chinese saying goes, "When you are constrained, be flexible and be willing to make changes. If you change, you can find a solution, and its effects can last a long time."

Singapore lacks natural resources. Our prosperity today cannot be achieved without our proclivity to transform constraints into opportunities.

We need to address the immediate challenges of the day, but also constantly keep an eye on the future, to ensure that Singapore continues to stay relevant in this fast-changing world.

(In English) We must constantly keep an eye on the future and think and reinvent for the long term about how we can grow sustainably. Together, with all of your support, we will continue to build a better, a more resilient and an even more vibrant Singapore. [Applause.]

The Chairman: Minister of State Alvin Tan.

The Minister of State for Trade and Industry (Mr Alvin Tan): Mr Chairman, Minister Tan reminded us to keep an eye on the future. What will our economic future be like?

Earlier, both Ministers offered a glimpse by outlining our trade and enterprise strategies under our Singapore Economy 2030 vision. I will share about the other two pillars under this vision, which Mr Saktiandi Supaat and Ms Jessica Tan asked about.

Let us start with manufacturing.

Manufacturing remains the bedrock of our economy, forming its largest component. In 2022, it accounted for about 22% of GDP and 220,000 local jobs. Our established strength in manufacturing has allowed our economy to remain resilient in spite of the pandemic.

In 2021, we launched our Manufacturing 2030 vision to grow our value-added (VA) by 50% from 2020 to 2030. We have made significant progress since.

In 2022, our manufacturing VA increased by more than 15% from 2020. The sector also received a record S$17 billion in total fixed asset investment, driven primarily by investments in the semiconductor industry. We expect these projects to create more than 4,600 jobs over the next five years.

To have enough workers to fill these newly created jobs, we will partner industry to develop a strong talent pipeline. We are working with trade associations and chambers like the Singapore Precision Engineering and Technology Association (SPETA) and the Singapore Semiconductor Industry Association to offer quality internship opportunities for Institute of Technical Education (ITE) students to raise job awareness of and enhance these students' experience in the sector.

As of September last year, we have created 806 internship opportunities across 71 companies, exceeding our target of securing 200 internships across 50 companies by end 2022.

Last year, Deputy Prime Minister Heng and I, together with SPETA and the Institute for Human Resource Professionals, launched our Manufacturing Employers' Handbook, which provides companies with human capital best practices and tools to help them structure career progression pathways for their employees.

Despite a more challenging global environment, we plan to continue growing our manufacturing sector. How?

First, we will do even more to attract frontier investments here.

We remain an attractive manufacturing location for many best-in-class firms like BioNTech, which chose to locate here because of our strong fundamentals, like our pro-business environment and a strong rule of law. We will continue to strengthen our manufacturing ecosystem and toolkits to maintain our competitiveness.

Minister Gan announced earlier we will extend our Pioneer Certificate Incentive, Development and Expansion Incentive and the Investment Allowance tax incentives to end 2028. This further reinforces our commitment to strengthen incentives to attract leading edge investments here.

Prof Hoon Hian Teck also asked how we are creating the manpower required for Manufacturing 2030.

The short answer is we will attract more Singaporeans to the sector. How?

First, we piloted the Accelerated Pathways for Technicians and Assistant Engineers (Manufacturing) Grant to help selected manufacturing companies hire, train and offer career progression for ITE graduates to become proficient technicians in the sector. We will extend this pilot by another two years to March 2025 to allow even more companies to be onboarded.

Mr Liang Eng Hwa, Mr Saktiandi Supaat and Ms Jessica Tan asked about emerging sectors in Singapore and opportunities for businesses in those areas. Mr Shawn Huang is right also to highlight the potential of robotics and space.

We aim to be a frontrunner for tech-enabled manufacturing in areas like biotech and robotics while also exploring the space industry.

On biotech, our biotech sector may be nascent but we expect it to grow by 8% annually.

Ms He Ting Ru asked about the opportunities and support to further develop this sector. We are doing so in several ways.

First, nurturing our talent pipeline. A*STAR's Singapore Therapeutics Development Review (STDR) initiative and Technology for Enterprise Capability Upgrading (T-Up) programme is one such thing. Since 2003, more than 950 A*STAR research scientists and engineers have been seconded to support over 850 local SMEs in product development under T-Up. Of this pool, close to 70 of them have been seconded to 45 biotech-related companies and 16 have joined the companies full-time at the end of their T-Up projects.

One example is A*STAR scientist Dr Lionel Low, who was seconded in 2019 to Tessa Therapeutics. Dr Low has now since joined Tessa Therapeutics full-time as Director of Research and Development.

Minister Tan also announced that we are expanding our Innovation and Enterprise Fellowship Programme (IFP) to include public sector partners like the Experimental Drug Development Centre.

The second thing that we are doing is to grow our biotech venture ecosystem financing and funding. We are working with venture capitalists (VCs) to channel more investments into Singapore-based biotech startups.

In 2021 and 2022, Enterprise Singapore's SEEDS Capital invested $70 million and catalysed another $300 million from 40 private equity and VC funds into 70 deep-tech startups while Startup SG Tech extended $10 million in funding to 30 projects.

Just as our biotech sector is showing promise, we are also making strides in robotics.

Singapore has the second most robot-intensive manufacturing sector in the world, just after South Korea. Our manufacturing, construction and healthcare sectors here use robots to improve productivity, safety and quality.

In manufacturing and construction, robots can ease on-site manpower constraints. For example, construction company Gammon uses Spot, a four-legged robot built by Boston Dynamics to scan sections of mud and gravel at construction sites to check work progress.

We will strengthen our national robotics ecosystem through the National Robotics Programme (NRP). In fact, last month, Minister Tan and I celebrated NRP's sixth anniversary at Singapore University of Technology & Design (SUTD) with startups and industry players. There is great energy and promise in our robotics sector.

Our biotech and robotics solutions have applications for the silver industry too – a sector Ms Sylvia Lim asked about.

For example, Alexandra Hospital successfully trialed Florence, a robotic nursing assistant co-created with NCS to perform tasks, including taking vital signs of patients at their bedside and delivering medication and items. This frees up time for nurses to perform other value-added tasks for their patients.

Another example is MiRXES, a homegrown A*STAR spin off firm that focuses on early detection of cancer using its proprietary microRNA platform. MiRXES launched GASTROClear in 2019, the world's first approved molecular blood test for stomach cancer, which has been used by over 30,000 patients to help detect early-stage cancer before an endoscopy is prescribed. Enterprise Singapore's Scale-up SG programme helped MiRXES internationalise and expand to North and Southeast Asia in 2022.

These firms are doing good work to help address challenges in ageing societies like ours and in many parts of the world. We will continue to help them thrive in this emerging global silver industry.

We have seen how tech-enabled manufacturing solutions improve the lives in the silver industry. This also inspires us to explore new frontiers like space. We thank Mr Shawn Huang for acknowledging the space industry's growth potential. We have been gradually growing our space industry since the early 2000s.

Today, the global space industry is valued at over US$400 billion, set to increase to over US$1 trillion by 2030. In 2013, we established our national space office – the Office for Space Technology and Industry (OSTIn). OSTIn brings together players from different disciplines to build our nascent space ecosystem and develop emerging and disruptive technologies. We have good local capabilities in satellite engineering, remote sensing and satellite communications (satcom) and have launched over 15 satellites thus far.

DSO National Laboratories collaborated with OSTIn, local space research partners and international industry partners to launch our first locally developed Synthetic Aperture Radar microsatellite into space last year.

We can also apply space-based technologies to other sectors such as aviation and maritime.

Our space industry has also created attractive jobs and anchored foreign companies here. Today, we have approximately 2,000 professionals and researchers in our space sector and more than 60 local and international space companies based here.

At the Global Space and Technology Convention organised by Singapore Space and Technology Limited two weeks ago, Minister Iswaran announced that Mangata Networks, a satcom company, is establishing its maritime global headquarters here and will create at least 160 new and exciting jobs.

Our space industry is fuelled with potential. As I see our students strolling in, please come and join our space sector and join our rocket ship.

We have made good progress for Manufacturing 2030, including in biotech, robotics and space. As we programme our satnav back to Earth, let us land on Services 2030 – our plan to grow our services sector.

Mr Derrick Goh asked how we have been helping our SMEs digitalise.

Our Services 2030 vision is to grow our services sectors by making them more digital and sustainable and to anchor Singapore as a leading hub for business, lifestyle and tourism.

By 2030, we aim to entrench Singapore as a hub of firms, a hub of flows and a hub of talents.

A hub of firms – where we continue to attract multinational enterprises and large local enterprises to use Singapore as a base for their Global-Asia operations.

A hub of flows – where we strengthen our position as a global trading, financial and lifestyle hub, build on our networks of international trade agreements to connect Singapore and Southeast Asia to the world and further our digital and green economy agreements.

Finally, a hub of talents – where we build a strong Singaporean workforce and continue attracting global talent.

Let me elaborate using three sub-sectors.

First, professional services.

Minister Gan spoke of how our refreshed Professional Services Industry Transformation Map (ITM) will help our professional services firms transform so Singapore remains a hub for firms. From 2020 to 2025, we expect our professional services sector to achieve VA growth of 3% to 4% per annum, to $27 billion and create 3,800 additional PMET jobs annually for locals. To achieve this, our Professional Services ITM 2025 will focus on three areas.

First, we will strengthen Singapore's appeal as a business hub for companies to build their headquarters here.

Headquarters create meaningful jobs for Singaporeans in various areas, including corporate functions such as marketing, legal and finance and accounting. We have a pool of ready talent to provide these services.

We are already attracting leading global firms because of the strong fundamentals I mentioned earlier, but to help existing headquarters in Singapore improve their in-house corporate functions, EDB has designed two online assessment tools for marketing and also for finance and accounting. These resources help companies assess their corporate functions and recommend ways to transform job roles.

EDB's Corporate Venture Launchpad also help Singapore-based companies nurture new venture concepts here. SembCorp Industries Ltd has benefited from this programme and spun off new ventures.

Last year, we injected an additional $20 million into this scheme to onboard more firms to start new ventures.

Second, we will help our professional services SMEs become more digital. If you are a professional services SME, please continue to use our Productivity Solutions Grant and Enterprise Development Grant and platforms like IMDA's Chief Technology Officer-as-a-Service.

Third, we will help our companies create jobs and upskill our workforce to meet rising demands in sustainability.

EDB is partnering consulting and engineering services firms to set up regional sustainability Centres of Excellence. These centres will groom talent, develop sustainability expertise and drive R&D capabilities and activities for Southeast Asia.

Our Design Singapore Council has also developed the Good Design Research Initiative as well, to help designers and firms like Ginlee Studio and bioSEA design for environmental impact.

We will also help Singaporeans take on new jobs in the professional services sector by reskilling and redeploying workers through initiatives like our Career Conversion Programmes. For example, if you are looking to upskill and explore new roles in the accountancy sector, you can approach the Accountancy Careers Hub to pick up new skills and receive career guidance to advance your career within the industry.

1.45 pm

With these ITM 2025 building blocks in place, our professional services sector is looking professional and bright!

Just as our Professional Services sector is distinguishing itself globally, a vibrant tourism scene will also differentiate us from other business hubs. In the next decade, we will build our tourism sector in three ways.

First, we will continue to refresh and invest in new products and events. Our tourism sector received just over S$2 billion of new investments and reinvestments last year, even during the pandemic. This reflects strong confidence in our competitiveness as a top tourism destination and ensures we continue to have new and updated hotels, attractions and events.

We will also partner world-class event organisers and frontload our investments to build a strong leisure and business events pipeline that appeal to different interests and sectors. This year, we welcome international leisure events debuting here, such as Van Gogh: The Immersive Experience and Sneaker Con Southeast Asia; and will witness the return of top business events like Gastech Exhibition & Conference.

As SportSG announced last November, Singapore will also host the inaugural Olympic Esports Week in June. This has the potential to grow Singapore as an eSports Hub, attracting investments, creatives and talents in an emerging sector.

Second, we will continue to build our tourism businesses' tech capabilities and workforce. We will partner industry to create virtual experiences and experiment with extended and augmented reality to complement real-world offerings. Singapore Tourism Board (STB) and Gardens by the Bay are currently trialing the Lost Fairy, an augmented reality storytelling experience. Visitors at the Floral Fantasy are transported into a magical fantasy world, providing a refreshing and gamified visitor experience.

We will also continue to help our tourism sector use tech to raise their productivity. By end-March, 90 hotels, which covers about 40% of Singapore's hotel room stock would have adopted self-check-in solutions that are integrated with STB's E-Visitor Authentication system. This system uses facial recognition technology to authenticate guests' identities, verify the validity of their stay and automatically transmit relevant data to the Immigration & Checkpoints Authority (ICA). Guests will experience a more seamless check-in process with waiting time shortened by up to 70%.

We will also continue to prepare our tourism workers for post-pandemic recovery. Our Enhanced Training Support Package provided close to 60,000 training places by end-2021. When borders reopened last year, STB and NTUC's e2i launched our Tourism Careers Hub to provide career coaching and employment and training support for our tourism workers. As of end-2022, more than 500 workers were placed into our tourism sector.

Third, we have ambitions to be a globally known sustainable urban destination. Last Friday, Senior Minister Teo spoke about our industry sectoral roadmaps that guide companies in their sustainability journey, including for tourism. Ms Foo Mee Har also asked about developing sustainability roadmaps.

Last year, we launched our Hotel and Meetings, Incentives, Conferences & Exhibitions (MICE) Sustainability Roadmaps to help both these sectors build new green skills and track their carbon footprint. Tech has also played a part in greening our tourism sector. For example, Pontiac Land Group partnered a local startup under our Singapore Tourism Accelerator to pilot a user-interface platform that integrates data on energy, water, waste and carbon emissions across Pontiac Land's four properties in Singapore and helps them to monitor their sustainability efforts.

And with that, I am proud to announce that Singapore has recently been certified as a sustainable destination based on the Global Sustainable Tourism Council's Destination Criteria. What does this mean? This certification validates our policies in stewarding Singapore to become a sustainable urban destination by 2030, in line with our Singapore Green Plan 2030.

I am also happy to share that Sentosa Development Corporation will be making our Lazarus Island a light touch destination over the next three years, where visitors can experience its rustic charm while minimising their impact to biodiversity and the environment.

We will start this April, by launching Tiny Away Escape @ Lazarus Island by Big Tiny, comprising five eco-tourism accommodation units on the island. Big Tiny operates sustainably through using renewable energy, energy efficient appliances and a biodigester which converts food from waste to compost on-site within 24 hours. In the coming months, we will also launch other offerings at Lazarus Island like non-motorised water activities and also glamping. So, come visit us!

I hope our continued investment in our tourism businesses and workforce will give Members confidence that our tourism businesses are well-equipped to thrive.

Our efforts, to green our tourism sector is part of our larger plan to tackle climate change. We remain committed to achieve net zero emissions by 2050 and have taken decisive steps towards our climate goals, which brings me to our Green Economy.

Prof Koh Lian Pin asked about the transition framework for companies in emissions-intensive trade-exposed sectors. The framework aims to help our businesses transition into low-carbon operations, while mitigating the risk of carbon leakage, which could happen when companies shift operations to other jurisdictions with lower or no effective carbon prices. I would like to assure Prof Koh that the allowances will only be for a portion of companies' emissions. It will be determined based on internationally recognised efficiency benchmarks, where available; or the facilities' decarbonisation plans that are aligned with our net zero commitments.

We are engaging affected companies on details of the transition framework, including how to apply these efficiency benchmarks. We will finalise these details ahead of changes to the carbon tax regime taking place in 2024.

Ms Foo Mee Har, Ms Jessica Tan, Ms Janet Ang and Prof Koh asked how we are helping businesses transition to a low-carbon future and equipping our workforce for jobs in the green economy. Members also asked how we are helping our SMEs embark on decarbonisation, carbon accounting and sustainability reporting.

We aim to transform our economy, work with the international community to achieve our collective climate targets and remain relevant in a low-carbon future. Our Green Economy Strategy will help our businesses do so. How?

First, as we digitalise our economy, we are also greening our businesses and industries. We will extend the enhanced support under our Enterprise Development Grant (EDG) for sustainability projects, to encourage more local companies to identify and seize opportunities in the green economy. Sustainability projects will continue to receive funding support of up to 70% for three more years. Other projects under EDG will revert to a support level of up to 50% from April this year, along with the Productivity Solutions Grant and Market Readiness Assistance scheme.

Sustainability reporting is increasingly important for companies to demonstrate their sustainability performance and commitment to the environment. Consumers and investors want greater transparency through sustainability disclosures. They are more conscious of the environmental and social impact of their products and investments. Companies can start by measuring carbon emissions, which will enable them to monitor, improve and subsequently report their sustainability impact.

If you are an SME keen to measure your carbon emissions, please explore EnterpriseSG's Productivity Solutions Grant. EnterpriseSG and Infocomm Media Development Authority (IMDA) will also continue to explore ways to support more advanced solutions through the Advanced Digital Solutions scheme, which we will announce details for in the second half of 2023.

EnterpriseSG will also work with Accounting and Corporate Regulatory Authority (ACRA) and industry partners to develop programmes to help enterprises embark on sustainability reporting. We will also help businesses strengthen their knowledge on sustainability through courses and new playbooks. EnterpriseSG will develop new Enterprise Sustainability Programme (ESP) thematic courses in topics like Decarbonisation and Sustainable Finance, and expand the number of ESP Foundational Course partners. We will announce new course providers and the new courses will commence in the second quarter of this year.

To complement this, EnterpriseSG will also develop playbooks for businesses to learn more about sustainability topics and how to take steps to become more sustainable.

Ms Foo Mee Har also suggested building knowledge-sharing platforms. She would be pleased to know that EnterpriseSG will set up a sustainability website for enterprises to access such resources.

Ms Foo also suggested helping companies test-bed new ideas and experiment with new technologies. In November, we launched Green Economy Regulatory Initiative (GERI) to speed up innovation in the green economy. There will be more details there.

Mr Derrick Goh asked how we are positioning Singapore as a leading international green hub. We are building our credentials as a carbon services and trading hub. We are now home to more than 80 organisations providing carbon services – the highest concentration of service providers here in Southeast Asia. We partner other countries to develop trusted and robust international markets for carbon credits. This will increase investments, create jobs in the green economy and support global decarbonisation efforts. These efforts will make us a credible sustainability services hub, with a strong ecosystem for carbon services, green finance, sustainability reporting and professional services.

Finally, we will continue to prepare our workers for the green economy, a point Ms Mariam Jaafar raised. Minister Gan already announced the new Green Skills Committee.

Mr Chairman, in conclusion, our journey may be fraught with challenges but it is also filled with opportunities. As we write the next chapter of our economic story, we must build on our existing foundations, yet be bold enough to trailblaze new industries in this new era.

Our edge in digitalisation and sustainability will help us achieve our Manufacturing and Services 2030 visions. This will enable our businesses to capture new markets and position Singapore as the gateway to Southeast Asia, creating good jobs and opportunities for Singaporeans.

While we attract new investments here, we must also help our local and heartland enterprises compete globally. Next, Minister of State Low Yen Ling will share how we will support our enterprises to weather the economic challenges and move forward together.

The Chairman: Minister of State Low Yen Ling.

The Minister of State for Trade and Industry (Ms Low Yen Ling): Mr Chairman, Minister Gan Kim Yong and Second Minister Tan See Leng have both shared about the Enterprise 2030 strategy. The vision and the plan is to build a vibrant ecosystem of Singapore enterprises that are future-ready and globally competitive. Let me elaborate on how we will stand behind our Singapore enterprises and support them on their journey to becoming stronger and better.

Mr Shawn Huang asked about how Government has supported businesses throughout the pandemic. Throughout the crisis, the Government came up with many schemes to help businesses survive and adapt to the changing economic conditions.

First, we extended critical life support for major cost items that businesses needed to incur to stay up and running. We launched the Jobs Support Scheme (JSS) in Budget 2020 to boost wage support for employers to help them keep their local employees in those uncertain times. Members would remember, from the start of the pandemic till March 2022, the JSS paid out a total of $28.1 billion to 180,000 employers.

Second, we provided financing support to help ease the cashflow and financing constraints of businesses as they faced slowing economic growth, weaker trade and higher prices. For example, we introduced the Temporary Bridging Loan Programme (TBL), which supported $23 billion worth of loans to more than 30,500 companies.

Third, we enhanced our assistance for business transformation which was important for the survival and growth of our enterprises. Between 2020 and 2022, a total of 55,500 local companies embarked on productivity, capability development and internationalisation projects.

This year, we expect global growth to moderate amid tight financial market conditions and elevated energy prices as mentioned by Minister Gan and 2nd Minister. As a result, business costs and cashflow constraints remain top of mind for our SMEs. We understand that being able to access financing is critical for our SMEs, critical for our businesses, as Mr Shawn Huang, Mr Derrick Goh and Ms He Ting Ru have highlighted in their cuts.

I want to assure Members that MTI and our economic agencies – we will not let up our efforts to ensure that enterprises have suitable access to financing. The Enterprise Financing Scheme (EFS) launched in 2019 to support companies in their various stages of growth has aided thousands of businesses. In 2022, 12,000 businesses secured financing through Government schemes like the EFS and the Temporary Bridging Loan Programme. Ninety-nine percent of these companies were SMEs and the majority, or more than 80% of the applicants were successful in getting the funds they need.

As Deputy Prime Minister Lawrence Wong announced in his recent Budget speech, we will extend the prevailing enhancements to the various schemes under the EFS by one year, until 31 March 2024. The schemes are namely the EFS-SME Working Capital Loan, EFS-Trade Loan and EFS-Project Loan. Let me elaborate.

We will extend the current enhanced maximum loan quantum parameters of $500,000 for the EFS-SME Working Capital Loan and $10 million for the EFS-Trade Loan. For the EFS-Trade Loan, we will also maintain the current enhanced Government risk-share level at 70%. The extension of these enhancements will help our enterprises cope with higher working capital and cashflow needs, given the current economic uncertainties and supply chain pressures that has led to lengthened payment cycles.

Furthermore, we will extend the period of support for domestic construction projects under the EFS-Project Loan scheme. As the construction sector is still recovering from the pandemic, we will continue to support them to cope with the higher costs of construction materials. This will enable our construction companies to secure vital financing to carry out existing projects and secure new ones, as construction activity steadily picks up the pace towards pre-pandemic levels.

All of the enhancements that I have mentioned, the enhancement to our financing schemes will help our SMEs and businesses to cope with near-term cashflow constraints and secure necessary financing for different business needs.

The EFS-Venture Debt scheme was introduced in 2015 to help catalyse the Singapore market for venture debt, which is a form of alternative debt financing typically for high-growth startups. To expand our support to a wider range of financing tools, the Government will enhance the EFS-Venture Debt programme to include venture debt loans that is backed by RCPS, which is Redeemable Convertible Preference Shares. This will benefit startups that require more flexible loan repayment plans, including early-stage and high-growth startups in fast-expanding sectors, such as deep tech.

Mr Chairman, the COVID-19 pandemic and the start of the Ukraine-Russia war last year have led to a heightened business cost environment in many parts of the world. Domestic energy and electricity prices are likely to remain elevated in the near term, as the global energy market stays volatile.

On the back of steeper electricity and fuel costs, we launched EEG, Energy Efficiency Grant, five months ago in September 2022. This grant provides local enterprises in the Food Services, Food Manufacturing and the Retail sectors with up to 70% support to invest in energy-efficient equipment in pre-scoped categories, such as LED lighting, air conditioners and refrigerators.

I would like to assure Mr Derrick Goh that we are all committed to supporting companies across all sectors to become more energy efficient. The EEG complements our wide range of energy efficiency initiatives. For instance, the National Environment Agency (NEA)'s Energy Efficiency Fund supports businesses in the manufacturing sector, while the Building and Construction Authority (BCA)'s Green Mark Incentive Scheme for Existing Buildings 2.0 covers building owners. In addition, we have the Resource Efficiency Grant for Emissions which targets emissions-intensive facilities, such as manufacturing facilities and data centres.

On top of all these grants, we have the Energy Efficiency Technology Centre, which is a collaboration between NEA and SIT, the Singapore Institute of Technology, that help our SMEs make informed decisions on the measures they can take to improve their energy efficiency.

As Deputy Prime Minister Lawrence Wong announced in his Budget speech, we will extend EEG by one year till 31 March 2024, to help our businesses cope with higher electricity prices. This will also enable companies in their transition to a lower-carbon future. The Ministry of Sustainability and the Environment (MSE) will provide more details about the Government's plans for NEA's EEF. I want to assure all Members that we are taking a holistic, whole-of-Government approach to encourage our businesses to adopt energy-efficient practices.

I am glad to report that many SMEs in the Food Manufacturing, Food Services and Retail sector, are tapping on EEG. Since its launch five months ago, we have received more than 1,000 applications from nearly 500 companies for EEG. Amongst them is Mexipolis Pte Ltd. This is a F&B business, which used EEG to buy an energy-efficient cooking hob for their restaurant that could cut their energy cost of cooking by some 30%. Another company is food manufacturer Soltem Foods Pte Ltd, which bought energy-efficient refrigerators to reduce their power bills. I want to assure Members that MTI and all our economic agencies review the effectiveness of our various measures regularly and monitors the economic conditions closely. We will not hesitate to finetune our schemes or introduce new measures when the need arises.

I have shared the Government's plans to bolster support for enterprises in the year ahead. I would like to assure the House and Mr Derrick Goh that we are continuing to ensure that enterprises can easily identify and access the support schemes that they may require. Since 2020, the GoBusiness portal has provided our SMEs with one-stop access to more than 100 Government support schemes and information on more than 200 licences that is issued by some 30 Government agencies. So, anyone starting a business can easily incorporate their company's business using the GoBusiness portal, as well as directly apply for the licences they need, all at their fingertips.

The portal's e-Adviser feature helps the businesses to identify the relevant support schemes for their needs, from eligibility criteria for grants and loans, to tax incentives and even business solutions. Last year, 40,000 businesses benefitted from the help that GoBusiness portal offers to select and apply for the right support scheme. So, all this done at our fingertips, which translate to cost savings and time savings, which are very critical for SMEs owners.

Mr Chairman, Minister Gan spoke about the importance of taking a hard look at how companies can transform their businesses to take advantage of new growth opportunities. We strongly encourage all Singapore enterprises who are looking for support to grow their business, to scale their business, to get onto the GoBusiness.gov.sg to tap onto the available help.

In my Committee of Supply (COS) speech last year, I talked about how the heartland enterprises constitute an important fabric of our society, because they inject vibrancy into our neighbourhoods, they provide jobs and opportunities for promising local businesses to grow. In a midst of a changing consumer and enterprise landscape, heartland enterprises need to stay relevant and competitive.

To energise and support our heartland shops, we announced a four-year initiative called "Our Heartland 2025". Over the past 12 months, Our Heartlands 2025 have made great strides across three focus areas: one, deepening the digital and manpower capabilities of heartland shops; two, upgrading the capabilities of the trade associations and chambers (TACs) to better support the enterprises; and three, revitalising the heartlands to improve liveliness and attract more customers into our heartland shops, our precinct.

As Mr Derrick Goh pointed out, there still lies a great potential for heartland enterprises to innovate, digitalise and to build capabilities. The transformation of our heartlands is a multi-year effort, and we will continue to help our heartland enterprises sharpen their competitive edge and improve their skill. Let me now quickly highlight two core capabilities that the Government will help our heartland enterprises to grow this year.

Firstly, digital capabilities, I am happy to announce that we will press on with the Heartlands Go Digital 3.0, following the sustained success of the Heartlands Go Digital programme. Heartland enterprises have made significant progress to upgrade their digital capabilities since the launch of Heartlands Go Digital in October 2020.

Today, nine in 10 heartland shops across Singapore offer at least one e-payment solution. In addition, two-thirds are onboard various digital platforms, such as Google Business Profile, Carousell, Fave, Shopback and so on, to serve their customers.

Let me now cite the example, World Tea House, which is a heartland shop in Tampines that specialises in fruit tea drinks made from fresh ingredients. This shop participated in the Heartlands Go Digital programme in 2022 last year to onboard their business onto the Fave digital platform. Within just six months, World Teahouse observe an average 25% increase in a customers' spending per e-Fave transaction.

The use of Fave eCards allowed the tea house to reach out to the platform's large and younger consumer base. While many heartland enterprises are content with their current suite of digital solutions, some are ready to do even more. Heartlands Go Digital 3.0 will expand partnerships with new private sector partners and Institutes of Higher Learning (IHLs) to deepen the digital and manpower capabilities of our heartland shops across a holistic range of capability development areas. And this includes digital marketing, visual merchandising, service excellence and financial management know-how provided through business advisory services, in-shop training and group-based upgrading projects across different precincts and trades.

Second, innovative capabilities. We want to encourage more innovative shops to embark on product or business model innovations. And this will boost the revenue of heartland shops and attract more footfall to the heartlands. We will launch the Heartland Innovation and Transformation Programme to support enterprises in their journey of growth in the heartlands.

In recent years, specific initiatives, such as the Heartland Innovation Challenge and Visual Merchandising Programme, have supported many heartland enterprises. Earlier on, hon Member Ms Janet Ang highlighted SOVEG, which is a type of meatless satay and Hot SpicyMama condiments, all during lunchtime. I thought I would top it off with a gelato example. This is a local company, a gelato shop that is called Denzy Collective and they are a heartland shop.

They collaborated with Tampines West Merchants' Association (TWMA) and Temasek Polytechnic to create fresh gelato flavours sustainably. How do they do so? Using blemished fruits supplied by the merchants in Tampines West, Denzy Collective transformed these ingredients into a new, exotic flavour of gelato called Christmas Orange. And with the help of Temasek Polytechnic, the new gelato was launched with very attractive branding and marketing.

I know it is 2.00 pm, hang in there. And to let our Members savour this very refreshing innovation, we have arranged for Denzy Collective's Christmas Orange gelato to be served in the Parliament's Members Room immediately after MTI's COS.

We hope all the Members will enjoy it and continue to extend your support to all our heartland enterprises as they strive to improve, innovate and delight their customers. Mr Chairman, I have set aside two cups for you, to thank you for your chairmanship.

Building on the momentum of all these efforts, we hope to spur greater innovations and entrepreneurships in our heartlands. The Heartland Innovation and Transformation programme, or HIT for short, will help aspiring heartland entrepreneurs to test bait innovative ideas in a conducive innovation ecosystem. Through this programme, we aim to address two specific challenges that heartland enterprises continue to face: one, access to shop and retail spaces in heartland precincts to test innovative ideas; and two, access to resources for innovation.

First, we will construct and make available modular temporary spaces in mature heartland precincts. Under the HIT initiative, aspiring and innovative entrepreneurs can use these spots to test out new business ideas. We will first pilot this at Ang Mo Kio Town Centre, which we envision to be a Heartland Innovation and Entrepreneurship Town. This will complement HDB's efforts to provide access to flexible shop and retail spaces across precincts. Senior Minister of State Sim Ann will announce the details of the scheme as part of the Ministry of National Development's COS.

Second, we will provide a conducive ecosystem to build enterprise innovation capabilities and scale. This includes a range of innovation and entrepreneurship courses conducted by partners, such as IHLs and the Heartland Enterprise Centre, Singapore (HECS) to build our enterprises' know-how and knowledge. Furthermore, we will offer opportunities for heartland shopkeepers and merchants to learn from the best practices of successful entrepreneurs who are familiar or well-versed in the heartlands, and know the merchants' association and the community well.

Mr Chairman, as we broaden our support for heartland enterprises, we are also deepening partnerships with key partners to boost our drive for transformation. All over the world, the pace of digital acceleration is happening. Our enterprises must continue to adapt and transform to stay relevant and competitive.

The Government recognises that it cannot drive business transformation efforts alone. We need like-minded partners to work with us to multiply our outreach and support more enterprises. Central to this approach are our trade associations and chambers (TACs). TACs will continue to be the torchbearers for new industry initiatives and we remain committed to strengthening these partnerships with them.

2.15 pm

Several Members of Parliament, including Mr Raj Joshua Thomas and Mr Desmond Choo, asked about how we can boost the capabilities of TACs and how these organisations can take on more roles in the industry and enterprise transformation.

We have been doing this and will continue to do more.

In 2022, the Singapore Chinese Chamber of Commerce and Industry (SCCCI) launched the TAC Competency Framework and Growth Model that Mr Thomas talked about. This provides resources for TACs to identify existing gaps and the critical skills they need for their growth journey.

At the COS last year, I also announced three initiatives to strengthen our TACs' human capital and digital capabilities. I am happy to update and share that these programmes have gotten off to a good start.

For example, the next generation of TAC leaders comprising 10 TAC Fellows from eight different TACs are being groomed and developed under the TAC Fellowship Programme. As part of the six-month programme, they will co-create solutions together to address common challenges and develop ideas to capture new opportunities.

Our network of 11 SME Centres partner our TACs to uplift and support our SMEs. Last year, the SME Centres helped more than 27,000 enterprises through their business advisory services and capability building workshops.

Moving forward, we will double up our existing efforts to support our TACs in their industry development. Let me elaborate on our plans to leverage two key opportunity areas.

First, enterprise digitalisation. We will launch the Digital Transformation Programme this year. The programme will assist our SMEs in developing their digital transformation roadmap, curate suitable technology solutions and access training support to digitalise.

Through SGTech, we will intensify our bottom-up industry efforts to spur enterprise digitalisation with a "3S" framework: (a) strategy; (b) solution; and (c) skills.

This new centre represents SGTech's strong commitment to spurring enterprise digitalisation. It also builds on SGTech's past efforts like its partnership with Meta and Enterprise Singapore to help local SMEs leverage technology to transform and prepare for the post-COVID-19 economy.

The other key opportunity area that we will focus on is sustainability. The Singapore Chinese Chamber of Commerce and Industry (SCCCI), the Sustainable Energy Association of Singapore (SEAS) and SGTech formed a Sustainability Alliance last year. Moving ahead, the Alliance will kickstart initiatives to uplift the sustainability capabilities of other TACs and their members.

First, it aims to enable SMEs to start tracking their carbon emissions. In addition, SGTech will develop a guided programme for SMEs to reduce their environmental footprint. The Sustainable Energy Association of Singapore will advise on energy solutions. We encourage other TACs to join in and tap on this Sustainability Alliance.

Mr Chairman, there are many pockets of opportunities for enterprises to develop their competence, expand overseas and transform. The various initiatives helmed by our TACs are vital stepping stones to attain greater heights. We would like to spur our enterprises to take advantage of these opportunities.

On this note, the Government is also committed to deepening our partnership with the industry and TACs to enhance consumer protection. Fair trading practices and strong consumer confidence are key pillars of a healthy economy.

MTI regularly reviews our consumer protection regime to ensure that consumers' interests are safeguarded. I would like to thank President of the Consumers Association of Singapore (CASE), Mr Melvin Yong, for his useful suggestions to address consumer concerns and emerging issues in areas such as e-commerce.

As we continue to examine the current policies, we are prepared to do more to strengthen our consumer protection regime without affecting well-intentioned businesses. We will continue to work closely with our partners, including CASE, in this effort.

Mr Chairman, as we close ranks in partnership with our enterprises and our TACs, we have made steady progress on our journey to transform and to seek new growth potential. Together, we can face the challenges ahead and ride new waves of opportunity and new waves of change as one people, in partnership and in solidarity, to overcome and succeed as one.

The Chairman: Clarifications? Mr Liang Eng Hwa.

Mr Liang Eng Hwa: Thank you, Sir. Minister Gan spoke about MTI's effort to strengthen trade connectivity and support for our companies going international. Given our external developments and as part of the Resilience Measures, I think it is important to also anchor ourselves as a hub for global traders.

I would like to ask Minister Gan about Trade 2030 that he announced last year. How has that helped us grow our trade volumes and also expanded our external trade with the rest of the world?

Mr Gan Kim Yong: Mr Chairman, let me thank Mr Liang for his question.

Indeed, I talked about Trade 2030 last year. This year, I had intended to give an update, but the Chairman is very strict on guillotine times. So, I do not have the space to squeeze in —

The Chairman: Two cups of ice cream and you will get two minutes.

Mr Gan Kim Yong: So, in exchange for two cups of ice cream, he has given me two more minutes. I will use these two minutes to explain our Trade 2030 strategy.

I introduced it last year and we have made good progress. In fact, the last month, we just launched our ITM 2025 for wholesale trade. Particularly, we also have brought in several global traders, like Mr Liang pointed out, that will help us anchor ourselves in the global supply chain.

One of them is Ecopetrol, which is the largest oil company in Colombia. They have decided to set up Asia Pacific headquarters in Singapore to conduct their trade in the region. Another company from France, Sucden, which is in soft commodities – they have also set up Asia Pacific headquarters in Singapore as well as set up a new division dealing with grains and oil seeds.

I think these are interesting developments. Despite COVID-19, they have decided to expand their trade network and use Singapore as an anchor.

There are also new opportunities emerging from sustainability. Biofuels, for example. We have a Spanish company called Cepsa, which has also expanded their operation in Singapore and is looking at using Singapore as their Asia trading hub. These all work towards strengthening Singapore's position as a trading centre.

We are also encouraging our traders to not just do trade as traditional trading activities but to look at innovation, develop new products of their own so that they become the leaders in this particular field that they are specialised in.

One example is Olam Food Ingredients. This company has been working on innovation with our research institutions and tried to develop new products. They are also working with our restaurants to see how they can develop food that is more sustainable, that caters not only to the Asian palate but are also more convenient and healthier editions of the food, in line with the Healthier SG approach.

I think these are innovations that we will encouraged our traders to embark on so that they develop their own products and services and become leaders in their own field. I think through this, we will continue to grow our trading hub status.

The Chairman: Mr Saktiandi Supaat.

Mr Saktiandi Supaat: Thank you, Mr Chairman. I would like to ask the Ministry two or three clarification questions, if I can, Chairman.

The first is in regard to the Green Skills Committee that the Minister mentioned earlier. How is it different from the Jobs-Skills Integrator? Is it working in tandem? I think what would be interesting would be to note what age groups will be impacted, whether they will benefit from this as well? Because I think Minister of State Alvin Tan mentioned that there are 850 internships for ITE students. So, the question is whether there will be ITE absorption into the manufacturing sector and also into the green sector.

My second question is in regard to Minister Tan's answer. I think he elaborated about the green transition, the carbon transition, the energy transition. My question is going forward, beyond this Budget, will there be any additional spending on physical infrastructure needed for the energy transition as Singapore prepares to absorb some of this solar and other alternative energy inputs coming to Singapore going forward? What is our strategy on that front and our spending needs?

Mr Alvin Tan: I thank Mr Saktiandi for his clarifications. The Green Skills Committee (GSC), as the Minister has mentioned, will be set up by the second quarter of this year. How is it different from Jobs-Skills Integrators? Jobs-Skills Integrators will serve sectors which are a little bit more fragmented and less regulated, such as precision engineering, retail, wholesale, trade.

The GSC is different in such that the focus will be on emerging green skills. These are in areas of green growth opportunities such as smart grid technology, even for workers that are graduating from Institutes of Higher Learning (IHLs) or ITEs, for example, in electric vehicle (EV) technology. Those are very emerging technologies.

The committee will need to map this green skills development with a framework and a training roadmap and size the implementation and training needs as the economy grows in this regard.

The GSC will focus first on two green skill areas, as the Minister mentioned. First is on sustainability reporting and assurance and the second is on energy. Let me just dive very quickly into these two.

We are looking at skills on the first front – sustainability reporting, disclosures, advisory and compliance. So that is one sector, one first key area.

The second is on energy. We know that and we envision that there will be a demand for skills associated with generation storage and deployment of renewable energy, for example, battery energy storage systems design, modelling and simulation and distributed energy resources management.

So, sustainability reporting and assurance first because this is emerging and, of course, as infrastructure changes, energy as well.

The Chairman: Mr Desmond Choo. Sorry, Minister Tan.

Dr Tan See Leng: I will answer the second question. I thank the Member for his clarification. To support our energy transition, there are a couple of initiatives that we are doing.

One, obviously, is, as I have said in my speech, in terms of coming up with our energy market structure where we require the generation companies (gencos), in terms of the upgrading of CCGTs, to move to a more energy-efficient and lower emission, type of newer generation CCGTs. As a result of that we will request for proposals and interests.

The change in terms of the markets, in terms of our regulation, allows us to plant that capacity, in the event that our existing gencos do not want to participate in it.

If you talked about the kind of costing, at this particular point in time, given the fact that as a result of providing more market certainty to all of our gencos, we think that there is a higher chance of them participating in the RFP to build these new CCGTs.

On the second part of it, in terms of our resilience, given the heightened uncertainties, the volatilities in the energy market, we need to also ramp up our capacity for standby facility. For instance, we have a standby LNG storage facility to ensure that we will not in any way be compromised if there are shortages in terms of the global supply chain.

The third part is that we will also continue to invest in our grid development as well as energy storage systems and in terms of building interconnectors, when we import renewable energy from around the region.

We will be providing more insights throughout the year in successive meetings. I hope that gives you a bit of a preamble as to what is to come.

The Chairman: Mr Desmond Choo.

Mr Desmond Choo: Thank you, Mr Chairman. Just one point of clarification. I am very glad to hear that TACs have been helping our companies to digitise and be more sustainable. Can I check with Minister of State Low Yen Ling how the Ministry is helping TACs to play an advisory role to support our businesses to internationalise?

2.30 pm

Ms Low Yen Ling: Mr Chairman, I want to thank the Member, Mr Desmond Choo for his clarification. I had intended to respond to those questions that he mentioned in the cuts, but I sort of ran out speech time. So, allow me to very quickly and succinctly reply to him.

I want to assure Mr Desmond Choo and the Members that we are working hand-in-hand with our various TACs to support the growth and expansion of our Singapore enterprises overseas. For example, the Singapore Business Federation (SBF), they started the Global-Connect@SBF initiative in November 2019. And if you think about it, fortunately we started that before COVID-19 because that really helped a lot of companies to go overseas although the companies were here in Singapore.

Last year, Global-Connect@SBF advised and facilitated 2,800 SMEs in their efforts to expand overseas and helped enable 122 overseas business agreements for SMES. And under this Global-Connect@SBF, we set up three Singapore Enterprise centres, one each in Jakarta, Ho Chi Minh and Bangkok. And these centres are important one-stop shop that offers our SMEs business advisory, market information and business matching for their global growth.

I want to assure him that the Global-Connect@SBF has expanded its service offerings to help our SMEs better navigate the increasingly complex trade environment. For example, on top of advising our SMEs on how to use the Free Trade Agreement, Global-Connect@SBF will provide outreach and advise on customs compliance through workshops and Industry consultation clinics.

And with the reopening of international borders, we are certainly working hard not just in MTI but across all our economy agencies to spur more of our Singapore enterprises to take the first steps overseas to expand their presence in existing markets so that we can collectively develop a vibrant ecosystem of Singapore enterprises which are future-ready and globally competitive.

The Chairman: Mr Derrick Goh.

Mr Derrick Goh: Chairman, I thank both the Ministers and both the Ministers of State for their clear speeches. Indeed, I am encouraged to hear the continued push by MTI for SMEs to digitise.

Two quick clarifications. One is for the Minister of State's clarification on – and their assessment of the successes of the state of digitisation of our SMEs, given that there are very big ones, there are medium ones and there are small ones.

Second clarification for the Minister of State is, if there can be more proactive engagement with smaller SMEs, especially those who are keen to digitise but do not know how or where to, beyond the mere availing of portals as well as SME centres, can there be a more proactive push given that as SMEs do compete with each other too and may not be most keen to help each other in this regard.

Ms Low Yen Ling: Mr Chairman, I want to thank the Member Mr Derrick Goh for his question.

And we agree with him that in MTI and our economic agencies, we take a differentiated approach to support our companies, whether they are micro-enterprises or they are SMEs or larger local companies with the potential to become a Singapore Global Enterprise. And, for example, if I talk about the 15,000 heartland shops in all our precincts and it is really heartening that during COVID-19, they hunkered down, they worked with us and I want to say a big thank you to TACs like the Federation or Merchants Association Singapore (FMAS) that Mr Desmond Choo talked about and the Heartland Enterprise Centre Singapore (HECs) for working with us. Because they are very important opinion multipliers and like what Mr Derrick Goh mentioned, they are not only the voice of the companies but they will know the pain points and what are some of the emerging trends and opportunities.

And I touch on TACs because I always say that the TACs play a very important "ABC" role and the Government sees a lot of benefit and value in working closely with a TAC. And I think the various TAC chiefs will agree with us that in the last three years because we have to work together, bridge the communications to overcome COVID-19, the various series of heightened measures, we have now fostered a very strong working relationship with the TACs.

And the two announcements that I have mentioned, we will strengthen the nexus with SGTech, so that SGTech can also support the other TACs in facilitating and catalysing enterprise digitalisation, not just in a broadbased manner, but actually sectorial and sub-sectorial. For example, in the case of the heartland shops, we work very closely – our heartland division in Enterprise Singapore work very closely with FMAS and HECS to design the solutions that are suitable for heartland shops. And that is why we are very heartened that in less than – we launched the Heartlands Go Digital in October 2020, in less than 16 months, we saw that more than 90% of our heartland shops have at least one e-payment solution and more than two-thirds are on platforms, whether is it website, live-streaming, some of them are doing live-streaming and they are on e-commerce.

And last year, I cited Heng Foh Tong which is an herbal tea heartland shop. In the past, they relied on customers as footfall, physical footfall, but now, because they have come on board the platform, Heng Foh Tong products are sold in 10 countries. So, we are glad that we have this critical base of companies whether is it heartland shops, SMEs, larger local companies who see the benefits of going digital and now we will continue to work with them to push it further so that they can leverage on technology to scale to global markets.

The Chairman: Mr Alvin Tan.

Mr Alvin Tan: This is supplemental to Member Derrick Goh's question – SMEs that are currently new to digital technology can adapt or adopt startup digital packs under the SMEs Go Digital programme which helps SMEs to start right with foundational digital tools such as accounting or digital marketing. Mr Derrick Goh asked, about how many? Well, to date, more than 37,000 SMEs have signed up for this startup digital packs.

The second data point which is quite useful for his understanding is also a programme called Growth Digital, which helps SMEs expand into overseas markets. And SMEs can get a head start in this in going global by tapping on established B2B as well as B2C e-commerce platforms. And to date, more than 2,900 enterprises are transacting on these e-commerce platforms. We are growing this, we are helping them to digitalise and they are early indicators of success.

The Chairman: Mr Liang Eng Hwa, would you like to withdraw your amendment?

Mr Liang Eng Hwa (Bukit Panjang): Thank you, Sir. Allow me to thank Minister Gan Kim Yong, Minister Tan See Leng, Minister of State Low Yen Ling and Minister of State Alvin Tan for their super comprehensive replies and responses. I do not believe they come from ChatGPT, the responses. But we wish MTI every success in your vision 2030. So, with that, I beg leave to withdraw my amendments.

Amendment, by leave, withdrawn.

The sum of $1,708,401,500 for Head V ordered to stand part of the Main Estimates.

The sum of $7,967,036,100 for Head V ordered to stand part of the Development Estimates.