Hansard, Monday, 5 July 2021

1 Mr Leong Mun Wai asked the Minister for Manpower for each year from 2005 to 2020 under Singapore’s Free Trade Agreements with China, India, USA and Australia, how many nationals from the respective countries have entered and worked in Singapore using (i) intra-corporate transferee visas (ii) professional visas and (iii) dependant passes.

2 Mr Leong Mun Wai asked the Minister for Manpower how many nationals from China, India, USA and Australia holding Employment Passes or S Passes are currently working in companies with fewer than 10 employees.

3 Ms Hazel Poa asked the Minister for Manpower for each year from 2005 to 2020, how many (i) dependant passes and (ii) Long Term Visit Passes have been issued to relatives of nationals from China, India, USA and Australia who are Employment Pass or S Pass holders respectively.

Mr Speaker, may I have your permission to address Oral Question Nos 1 to 3, as well as Written Question Nos 19 to 24 in today's Order Paper through the Ministerial Statements to be delivered by Minister Ong Ye Kung and myself tomorrow, 6 July 2021?

Yes, please. Mr Pritam Singh, Question No 4.

4 Mr Pritam Singh asked the Prime Minister whether the Government will commit to setting up a Commission of Inquiry to review its response to COVID-19 and, if so, when will this inquiry take place.

Mr Speaker, Sir, on behalf of the Prime Minister, dealing with COVID-19 has been a major whole-of-nation exercise, for which we have mobilised all of our resources. It was an unprecedented crisis that extended beyond public health and threatened both lives and livelihoods. Countries, especially those which encountered the virus relatively early such as Singapore, had to quickly adapt our contingency plans in the midst of doing battle, to deal with the particularly severe challenges posed by this virus. Every Singaporean has had a part to play.

Our response has by no means been perfect. We adapted and improved along the way, sharing experiences with other countries as we collectively gained more knowledge of the virus and how to deal with it.

We must thoroughly analyse and learn from our experience, the entire crisis, in all its aspects, from start to finish, just as we did from SARS 17 years ago which helped us greatly in our response this time. The aim is to understand what we have done well and what we have not, so that we can do better the next time. Another novel disease that causes a global pandemic is not a matter of if, but when, and the next disease may well be even more contagious and dangerous than COVID-19. So, we will certainly undertake a comprehensive after-action review (AAR).

However, right now, our agencies remain in the thick of battle. Their resources are totally committed; they are stretched dealing with the pandemic, which is far from over. Even as we fight the current battle, we are constantly evaluating, learning, innovating and building new capabilities and capacities to stay ahead of this fast-moving virus. As a result, we are in a much safer position now than last year. But COVID-19 will not disappear soon and with new variants continuing to emerge, there could yet be new twists and turns, some perhaps for the worse, but others hopefully for the better.

We have made preparations for a long battle. But with the unprecedented speed at which effective vaccines have been developed and the pace of our vaccination programme, we can see the light at the end of the tunnel. When we have the vast majority of our population fully vaccinated, we should be able to live with the virus endemic in our population and gradually shift into a new normal, along with most of the countries in the rest of the world. There will be lessons to learn from that shift too.

But we are not in a new normal yet. Meanwhile, we are learning and adapting as we fight the virus, whether it is COVID-19 testing, contact tracing, management of dormitories, isolation procedures for foreign arrivals, or safe management measures. The full AAR will therefore have to wait until the situation has stabilised and we are out of the woods.

The purpose of the AAR is for us to learn valuable lessons to improve our response for future pandemics. We want participants in the AAR to be open and forthcoming, to be reflective and thoughtful and be candid on their experiences and decisions, to acknowledge shortcomings and where we could and should have done better, even as they analyse successes. The structure of the AAR must fit this purpose. A Commission of Inquiry, which is a quasi-judicial investigative tribunal, is not the most appropriate way to achieve this objective.

Mr Pritam Singh.

Thank you, Mr Speaker. I would like to thank the Senior Minister for his response to my Parliamentary Question (PQ) on behalf of the Prime Minister. Sir, the main impetus behind filing the question was the commitment given by the Government about 12 months ago, almost a year ago, to look back at COVID-19 and I refer to the remarks of the now Minister for Finance: "I have no doubt that we will find many things where we could have done better and many changes we should make to be better prepared next time." And I think this is in concert with what the Senior Minister has shared.

I also note that there are other countries, the United Kingdom, for example, and the state Legislature of Victoria which has already actually delivered a report on the government's handling of the pandemic. I would like to ask the Senior Minister what sort of form the AAR will take. I understood the Senior Minister when he said that there will be input from the public, but what sort of shape and form is the Government considering if it is not going to be a Commission of Inquiry?

The Senior Minister said that there is a quasi-judicial aspect to Commissions of Inquiry. That is true. But Commissions of Inquiry also involve matters of public policy. Multi-agency issues of grave public concern have also found themselves to be subject of a Commission of Inquiry as opposed to an AAR. So, just to reiterate the question: what sort of review and how can the public play a part in the review that the Government has in mind?

Mr Speaker, Sir, we have not determined the precise form in which such a review will take. But we certainly want to learn all the lessons that we have, including those which can be submitted by members of the public who have views and informed views particularly.

In my career in the Public Service, I have been the subject of, the convenor of, and participated in many inquiries of various kinds. It must suit the purpose for which we set up these inquiries or reviews for. In my experience, a Commission of Inquiry (COI) is probably best suited to look into a singular event that has occurred in a specific moment or instant in time, such as a building collapse and a major accident. But I do not think the pandemic fits well into such a situation. It is an ongoing and evolving event. It is not over yet. In fact, many lessons have already been learnt along the way, not necessarily though formal AARs or a COI, but because of actual ground experience in which the agencies have adapted and adjusted their response, both in order to be more effective but also in response to an evolving virus and evolving situations. As you can see, our testing, our ring-fencing, our safe management procedures, our procedures for incoming travellers – all have changed and adapted along the way. You can see this learning process continuing.

We want to make sure that when we reach a new normal, this process is properly documented so that we are ready for the next round, just as we did not have a COI for SARS but we learnt many valuable lessons from it which allowed us to be better prepared for COVID-19.

Mr Pritam Singh.

Thank you, Speaker, and I thank the Senior Minister. Like the original answer to the PQ, I take the Senior Minister's point. Section 3 of the Inquiries Act does say that "a Commission is suitable if an inquiry is to be conducted into any matter which in the opinion of the President be in the public welfare or public interest". I am not sure whether the AAR that the Senior Minister has in mind will be as broad-ranging as a Commission of Inquiry could potentially be but we await information from the Government in this regard.

Mr Speaker, Sir, I think the AAR will probably be more broad-ranging than the COI, which by its normal construct, will usually be defined in a very specific way. The Government intends to do a very broad-ranging AAR on all aspects because there are many aspects to this particular pandemic from which we can learn good lessons for the future.

5 Ms Foo Mee Har asked the Minister for Finance (a) how will Singapore be impacted by the landmark agreement amongst G7 nations to reform the global tax system and impose a minimum global corporate tax rate of 15%; and (b) what are the plans to mitigate adverse impact to Singapore's corporate income tax revenue.

6 Ms Jessica Tan Soon Neo asked the Minister for Finance (a) what are the implications of the G7 agreement on a global minimum corporate tax for Singapore; (b) whether Singapore’s status as a tech hub will be affected; and (c) how will the tax affect multinational corporations that currently operate in Singapore.

7 Ms Mariam Jaafar asked the Minister for Finance (a) what is the number of MNCs that currently pay less than the global minimum corporate tax rate of 15% proposed by G7; and (b) given that MNCs receive tax incentives for undertaking activities that benefit Singapore in the long run such as developing new sectors or building capabilities, whether such special tax schemes will be permissible under the proposed changes; and (c) what other levers must the Government strengthen.

Mr Speaker, with your permission, I would like to take Question Nos 5 to 7 together.

Yes, please.

Sir, since 2016, there have been concerted efforts to strengthen international cooperation in taxation matters, to stamp out harmful practices and to increase the taxes paid by multinational enterprises (MNEs). These efforts were first initiated by the Organisation for Economic Co-operation and Development (OECD) to deal with the issue of Base Erosion and Profit Shifting (BEPS) by MNEs. To ensure a wider international consensus, the discussions were subsequently broadened to include more than 130 jurisdictions through a platform called the Inclusive Framework on BEPS.

Singapore has been actively involved in these international discussions as part of the Inclusive Framework (IF). The IF has been discussing two major tax changes.

The first proposal concerns the reallocation of taxing rights of the largest and most profitable MNEs from where they conduct their substantial activities to where their customers are. This is known as Pillar One. The current proposal is that Pillar One will apply to MNE groups with global revenues above 20 billion euros and profitability above 10%.

The second proposal is the introduction of an internationally agreed minimum corporate tax rate for large MNEs, wherever they operate. This is known as Pillar Two. The G7 and IF have proposed a minimum effective tax rate of at least 15% for MNE groups with global revenues above 750 million euros.

Let me briefly explain how Pillars One and Two will likely impact Singapore.

Pillar One was intended to adapt the international tax system to new business models where large businesses sell remotely to consumers in other jurisdictions, without physical presence. Under Pillar One, some part of the profits and hence, the taxes payable of large companies with overseas operations will be reallocated to where their customers are.

To illustrate, assume a Pillar One MNE group in Singapore has a profitability of 15%. Pillar One will then reallocate a portion of the profits in excess of 10%, 5% in this case, from Singapore to be taxed in the market jurisdictions. This means that hub economies with smaller markets like Singapore will stand to lose corporate income tax revenues.

Pillar Two aims to put a floor on international corporate tax competition. Essentially, under this proposal, MNEs will be subject to the minimum effective tax rate of 15% at the MNE group level, in every jurisdiction they operate. Broadly speaking, this means that if an MNE group in Singapore is taxed at an effective rate of, say 10%, then its home jurisdiction will impose additional rules to require the group to pay an additional 5% in tax there. Pillar Two will therefore limit the effectiveness of tax incentives as a tool to encourage larger MNEs to invest in Singapore.

Ms Mariam Jaafar asked how many MNEs in Singapore currently pay less than the global minimum corporate tax rate of 15%. The current proposal, under Pillar Two, is to apply this minimum effective tax rate to MNEs that meet a certain revenue threshold, currently set at 750 million euros, as I highlighted just now. There are about 1,800 such MNE groups in Singapore that would meet this revenue criterion.

We expect that a majority of these MNE groups will have group effective tax rates below 15% in Singapore. That is because our headline corporate tax rate is 17%, close to the proposed minimum effective tax rate of 15%. Furthermore, our tax system, like most others, provides for tax reliefs to encourage various meritorious activities like capital investment, R&D or charitable donations. And for a small number of companies, there are also tax incentives for their qualifying activities subject to economic commitments.

However, at this stage, it is still too early to work out the exact impact of the tax proposals. The final number of affected MNEs, as well as the extent of the impact, depends on the design of the specific rules which are still being actively discussed at the IF. As some of the tax proposals can only be effected through a multilateral instrument, there will be a need for international consensus to be fully reached before the changes can be implemented.

So, in response to the query from Ms Foo, we will only be able to determine with a high degree of confidence what the eventual impact on Singapore's fiscal position would be, once the IF has worked through and agreed on the detailed design elements of both Pillars. The eventual impact will also depend on how companies and other governments respond to these international developments.

What we can say for certain is that when a consensus is fully reached, Singapore will adjust our corporate tax system as needed, in consultation with the industry. Any adjustments to our tax system will be guided by three principles. First, we will abide by internationally agreed standards. Second, we will safeguard our taxing rights. Third, we will seek to minimise the compliance burden for businesses.

Ultimately, the best response to these tax changes is to continue to strengthen our overall competitiveness. Over the decades, Singapore has built a solid reputation and track record as an attractive place for business and substantial economic activity. While a conducive tax environment has been helpful in attracting investments, it is not the decisive factor. Having quality infrastructure, good connectivity, a skilled workforce, an open and business-friendly regime founded on the rule of law, are all far more important factors. We must therefore double down on these competitive strengths. In particular, the Government has been investing and will continue to invest in enterprise capabilities, including innovation and digitalisation, and in the skills of our workforce.

The Minister for Trade and Industry will be elaborating further on how Singapore can continue to strengthen its position as a hub. The Monetary Authority of Singapore has also separately provided a written answer to Ms Mariam Jaafar's question on Singapore's position as an international financial centre. In short, we will continue to provide a conducive regulatory environment for businesses, especially for new and innovative activities, as well as a good ecosystem and infrastructure for such activities to scale up across the region. We will also work closely with the industry to build up capabilities and skills that will enable us to stay relevant in the face of key structural trends like digitalisation and sustainability that are transforming the financial landscape.

Mr Speaker, the latest proposals to change international corporate tax rules will not be the first or last challenge we face. The key is for us to stay agile and nimble, and respond innovatively to the key global trends affecting our economy. We must continually work hard to strengthen our value proposition, build new advantages and seek new opportunities. This way, we can ensure Singapore's continued economic success and ultimately a good future for our people.

Ms Foo Mee Har.

Thank you, Speaker. I thank the Minister for his response. I understand a lot of details are not out yet but, I guess, with the announcement, there has been a lot of interest in the industry. Whilst we expect the tax system to evolve, I would like to hear the Minister's thoughts on, for the Minister to speak a little bit more about what specific non-tax benefit could Singapore provide or enhance, in order to compensate for the loss of tax benefits, previously enjoyed by companies, so that there is some level of certainty when companies are planning.

Question two is about the carve-outs. I understand that financial services have been a carve-out from this global tax reform. Could the Minister comment on how the financial sector is being impacted including family offices and variable capital companies (VCCs)?

And last but not least, on jurisdictions that have been tax havens, without the other non-tax benefits. I would like to ask the Minister, how is Singapore positioning itself to attract companies that are expected to exit tax havens and how Singapore will attract them with other non-tax related benefits.

Mr Speaker, with regard to the question of carve-outs, as I mentioned earlier, the current proposal on the table is for regulated financial services to be carved out from Pillar One. As for Pillar Two, as I have mentioned, it applies to the larger MNEs. So, whether or not family offices and VCCs will qualify, will really depend on the facts of the case, and ultimately, what are the final criteria that are used for the definition of large MNEs. So, we will continue to monitor this closely. And as I said earlier, we will respond accordingly once the international rules are worked out and finalised.

We will respond in two ways.

Number one, we will protect our sovereign rights on taxes. And we will make sure we adjust our corporate tax system accordingly, in line with the international standards and in close consultation with businesses in Singapore, ensuring that as far as possible, we keep a low compliance burden on businesses.

Number two, we will continue to work hard at improving and enhancing our competitiveness in other areas, especially in terms of the non-tax factors that Ms Foo highlighted.

So, to Ms Foo's question, yes, this is work in progress. We have always been looking at how we can restructure, transform our economy, invest in enterprise capabilities, as well as the capabilities of our workforce. And we will work even harder at that.

Our objective is to continue to remain attractive and competitive; attractive to substantial investments and substantial economic activities to be based here. We are not trying to get companies to register in Singapore without a physical presence. That is not our intent. We want to anchor substantial activities here, with the aim of creating good jobs for Singaporeans. That must be the objective of our economic policy. It has always been so and we will continue to work hard on this front.

I think we should also be mindful and clear that with these tax changes, going forward, as a small city-state with no natural resources, with limited land, it will be that much harder for Singapore to attract investments. And that means we will have to work even harder to attract and retain investments based on these non-tax competitive factors.

Up to now EDB and our economic agencies have been very effective in bringing investments into Singapore and creating jobs for Singaporeans, but we should never take that for granted. We should never assume that these investments will just fall on our laps and they will automatically happen year after year. It will get harder, so we will need all Singaporeans to support this critical mission; and that includes everyone in this House.

And I am saying that with a reference to the upcoming debates on FTAs, because what we say, the tone of the debate does matter. If investors start to feel that Singapore is starting to become less hospitable to foreign investments and talent, they will surely look for other options and there are many compelling options everywhere in the world. And we will end up worse off.

Mr Liang Eng Hwa.

Thank you, Mr Speaker. Sir, my question is firstly on Pillar Two. I understand that the G7 countries had initially sought a minimum corporate tax rate of 21%, but have since agreed to lower it to 15%. I would like ask the Minister whether he sees this 15% effective tax rate as a number that Singapore can agree to. And if not, is there room for further negotiations or seeking further carve-outs? Or is it the case that Singapore, being a small country, will just be the price-taker?

The second question is, the Minister mentioned about Pillar One, where the location of the taxing right will be given to countries where the customers are, I want to ask how significant is this reduction in the tax base and whether that will have any fiscal impact on our Budget. For example, whether the 15% tax effective rate would be enough offset for them in the short term?

Mr Speaker, there has been already extensive discussions at the Inclusive Forum on many of these matters. And recently, 130 jurisdictions in the Inclusive Forum, including Singapore, have reached a consensus on the key parameters of the corporate tax changes. That includes the global effective minimum tax rate of 15%. But there are still many design elements and implementation details that need to be worked out, as I mentioned earlier. For example, how would the effective tax rate be determined? There are some technical details there to be resolved. Or whether there will be sectoral carve-outs, as I have mentioned.

For now, under Pillar Two, the one carve-out that is being proposed is for shipping. Why? Because really, shipping operates under a very special tax regime. Shipping has no, by definition, physical presence. It moves everywhere and to many different countries. And so, you have different kinds of taxes for shipping, like tonnage tax, that falls outside of the scope of corporate taxes. Therefore, the intent or at least the proposal on the table now is to carve out shipping from Pillar Two. But these things are fluid. They continue to be discussed at the Inclusive Forum. Singapore is an active participant in the forum and we will do our part to shape the consensus in line with our national interest and also to ensure a level playing field for everyone.

On the second question on Pillar One, yes, there will be a negative impact, because Pillar One means reallocating tax revenues for some of these large firms to where the markets are located. So, this will have certainly a direct impact on our revenues. Exactly how much, like I said, it is difficult to give any detailed estimates now when the detailed rules are still being finalised. And whether or not we will be able to make up with sufficient revenues elsewhere, that is something that we will have to work out.

I should explain why we even ended up with Pillar One. And the reason is that many jurisdictions feel that in this new digital world, digitalisation has enabled large MNEs, especially the digital companies to do well, to grow dramatically and to be able to acquire more customers in jurisdictions outside of where they operate. They can acquire customers remotely. And therefore, many of these market jurisdictions have started to unilaterally impose, what they call, digital services tax on these companies.

It is not in our interest to have a taxation system that is fragmented and to have other jurisdictions impose unilateral taxes. That is not helpful for Singapore as a small and open economy. And that is why we feel it is better that we participate actively in the Inclusive Forum and be part of the multilateral discussion to shape a set of international tax rules that can be adapted to this new business model of the digital world.

So, indeed, that is what Pillar One is about. As and when there is an agreement on Pillar One, the agreement will provide for the coordination of this new international proposal together with the removal of all digital services tax and other similar measures that have been unilaterally imposed by certain market jurisdictions. That is why we have decided we could go along with this Pillar One consensus view, so that businesses can work with one set of rules rather than have to deal with a patchwork of fragmented rules. But as I mentioned, there are still details to be worked out even under Pillar One and these are issues which we will continue to actively discuss at the Inclusive Forum.

Mr Louis Chua.

Thank you, Mr Speaker. I thank the Minister for the clarifications. I have got two further clarifications. The first is, basically, in terms of the effective corporate income tax rates here in Singapore, what are they and whether the Government has conducted any scenario analysis to assess the net impact to our income tax revenues as a result of Pillars One and Two. I understand that it is still preliminary days but we already have the key parameters. OECD, for example, has already given some sense of what it expects the global overall tax revenue impact is going to be.

The second question is in terms of the foreign MNCs who are currently paying effective tax rates of below 15%, whether the Government would consider raising the effective tax rates to be in line with this minimum of 15%. And if I look at the US IRS data, for example, based on what has been disclosed, I think the effective tax rates for these US companies do appear to be much lower than our statutory income tax rates at just about 4%, and especially given that, as the Minister said, Singapore's attractiveness is not solely based on tax incentives alone.

Mr Speaker, Mr Chua has, in fact, asked quite a detailed series of questions on our effective tax rates, not just for MNCs but for local enterprises, and quite a range of different breakdowns in a separate Parliamentary Question (PQ). So, we will provide the full answer there. Those are data that we will share.

Yes, effectively, our effective corporate tax rate is low, not just for MNCs, but for all companies, especially for SMEs in Singapore. They are low. And they are low for a reason because we want to encourage business innovation, business investments and we want to make sure that businesses can create good jobs for Singaporeans. So, with Pillar Two being in place and with the consensus around Pillar Two forming at an effective rate of 15%, we will, of course, have to start thinking about what changes and adjustments are needed with regard to our corporate tax system to be in line with international standards, as I have said earlier.

At this stage, I would just say it is premature to speculate or to talk about what these tax adjustments will be. But as I mentioned earlier, the key principle is we will preserve our sovereign tax rights, our rights to taxation, even within the international agreement, and we will work out together with businesses what adjustments and changes might be needed in our corporate tax system. Secondly, we will also, at the same time as we adjust our corporate tax system, make sure that we work even harder on non-tax factors to make sure that Singapore remains competitive and attractive to investments. That is not something we should take lightly for the reasons I have explained earlier.

Ms Jessica Tan.

I thank the Minister for elaborating on the impact of Pillar One and Pillar Two. I specifically have a follow-on question with regard to tech companies in relation to what the Minister said about the digital economy.

Given both Pillars One and Two, and the impact of that – although I know that there are still a lot of uncertainties – how can Singapore, specifically, for the tech hub status, how can we continue to be attractive because both Pillars One and Two, could have significant impact on Singapore's tech hub status.

I would ask the Minister if he could elaborate on some of the key levers we would need to strengthen. I know he talked about the whole breadth of it but what would be some of the key pillars for the tech sectors specifically, given the impact of digitalisation?

Mr Speaker, it is a very important question and I do not want to belabour the broad points because, at this stage, I think it is a little early to dive into details. The upshot of these tax changes, as I said just now, is that it will make it harder for Singapore to attract investments; there should be no doubt. So, let us be realistic about what the impact will be. It will make it harder for us to attract investments and we have to work harder, particularly, given our size, the fact that Singapore is such a small city-state, compared to so many other locations around the world which offer equally, if not more, attractive and compelling attributes.

So, whether it is for technology, whether it is for finance, whether, it is any other major investment that will now be impacted, we just have to work that much harder. Basically, in a post-Pillar One and post-Pillar Two world, the large MNCs of the world will bear a larger tax burden. That is what it comes down to, anywhere they go. Assuming Pillars One and Two are applied evenly, uniformly, around the world, they will have to bear a larger tax burden.

So, we, on our part, will therefore have to work that much harder, whether it is on upgrading of our workforce, our infrastructure, our connectivity, our overall business environment; all of these factors will, therefore, become more salient in our ability to attract and retain investments and, ultimately, with the objective of creating good jobs for Singaporeans.

8 Mr Saktiandi Supaat asked the Minister for Trade and Industry with regard to the latest G7 agreement on a global minimum corporate tax rate of 15% (a) how will this potentially impact our efforts (including the use in part of corporate tax incentives) to attract MNCs; (b) what are the fiscal and foreign investment implications for Singapore; (c) which sectors of our economy will be principally affected; and (d) what strategies will the Ministry take to find new growth industries and hubs in this new global tax environment.

Mr Speaker, as the Finance Minister has mentioned, last week, about 130 countries and jurisdictions, including Singapore, agreed to reform international taxation rules under the Base Erosion and Profit Shifting (or BEPS) 2.0 Project. Details on the final parameters, design and implementation will need to be discussed in the coming months. Therefore, there remains significant uncertainty in terms of the possible impact on Singapore and the sectors which will be most affected.

When the details have been finalised, all jurisdictions will need to adjust their tax regimes to be compliant with the new rules, or cede tax revenue to other jurisdictions. We are closely monitoring developments and have been engaging industry stakeholders to understand their needs so that we can better formulate our response. As we adjust our tax system, we will aim to minimise the compliance burden for businesses and ensure that Singapore continues to be an attractive place for business.

After all, Singapore’s competitiveness goes beyond our taxation rates. Key fundamentals such as our strategic location and international connectivity, excellent infrastructure, the rule of law and skilled workforce remain strong. However, we must not be complacent. We are, therefore, redoubling our efforts to enhance our competitiveness and improve our business environment, for example, through upgrading our Industry Transformation Maps (ITMs). We are confident that investors will continue to find Singapore a compelling place to do business, and our economy can continue to thrive in the new environment.

Mr Saktiandi Supaat.

Mr Speaker, I thank the Minister for answering my question. I have two supplementary questions. The first is a simple question: the impact of Pillar Two. Will there be a risk of existing firms moving out? And I am referring to the United States (US) Inland Revenue Service filings which indicated that Singapore's share of US firms' foreign income taxed is second highest in the world at about 7.5% after Bermuda, and which indicates that US firms' here, for example, have about 165,136 people working for them, not to mention the cascading effects of some of these US firms in terms of subsidiary employment for Singaporeans. So, my first question is: will there be risk of these US firms moving out?

The second question is whether the Ministry of Trade and Industry (MTI) is reviewing its strategies to attract multinational corporations (MNCs) in light of this change and what are those strategies? I think the Minister has mentioned briefly the non-tax factors but how much more can we improve to enhance even further those non-tax factors and to attract more firms coming in, year after year.

I thank the Member for the two important questions. Yes, indeed, US firms play a very important role in Singapore's economy. They provide significant employment and good employment to Singaporean workers. But it is not just the US firms. I think BEPS 2.0 is going to affect all countries and, therefore, it is important for us to take a holistic approach, look at the entire business environment. We are doing quite a few things to ensure that we remain competitive.

Mr Saktiandi asked whether there is a risk of firms moving out of Singapore. The risk exists and they exist today even. Companies will do their calculations and they do that almost yearly to decide whether they are going to continue to be in Singapore, to continue to invest more in Singapore or to move somewhere else. That is why we cannot take it for granted, as I mentioned, and as the Finance Minister also underscored. We need to continue to ensure that our business environment remains effective and competitive.

What are the things that MTI is looking at doing? First, we have to continue to invest in our infrastructure, to ensure that we provide a very efficient infrastructure to allow our companies to operate here in a very cost-effective way. Secondly, we need to extend our connectivity. I have entered into several Free Trade Agreements (FTAs) and we continue to sign FTAs. We are looking at the various new opportunities for us to enter into new trade agreements including in areas such as renewable energy, green and digital economy.

Over the last few weeks since I took on the job, I have been talking to our counterparts in other countries almost on a daily basis to develop new connections, to allow our companies to expand beyond the confines and the limitation of our physical size.

We also want to encourage companies to invest in productivity and upgrading, so that they can continue to be cost-effective, and there are many schemes that we have offered. I cannot detail all of them here; I am sure Members are aware there are a lot of support schemes to encourage and support companies to become more productive. Particularly, for tech companies, we have a lot of incentives and support for investment in research and development. This will anchor a knowledge-based economy, an innovation-driven economy, in Singapore. We have to do all of these in order to keep Singapore competitive.

We must remember that BEPS 2.0 is one of many threats that could affect our competitiveness and we cannot remain static. There is a Chinese saying: 逆水行舟, 不进则退. In business, it is the same. If we stop at where we are and hope that we will continue to thrive and to be vibrant, we will be in trouble. We have to constantly be on the move, look out for opportunities, continue to restructure, reorganise and reposition ourselves for new opportunities that will come our way.

9 Ms Carrie Tan asked the Minister for Culture, Community and Youth (a) what are the current efforts to build the civic engagement sector for skilled facilitators to lead conversations in the community on sensitive topics of race and religion; (b) how are suitable and effective facilitators sourced for, identified and trained; and (c) how will the tracking, evaluation and scaling of the positive effects of these conversations on social cohesion be made within the community.

10 Miss Cheng Li Hui asked the Minister for Culture, Community and Youth (a) how does the Government intend to address tensions on racial insensitivities and discrimination on social media platforms; and (b) how does the Government intend to strengthen racial and religious harmony in Singapore.

Mr Speaker, may I seek your permission to allow for the answers to Questions Nos 9 to 16 to be given first and then to address any further supplementary questions there might be collectively. These Parliamentary Questions (PQs) raise general issues concerning or affecting racial integration and various policies.

Please proceed.

Thank you, Sir. May I also seek your permission to take Questions Nos 9 and 10 together, in my answer now.

Yes.

Sir, as a multi-racial and multi-religious country, we do not tolerate any form of racial or religious discrimination. Racial discrimination sows discord amongst and between different communities and threatens the harmony that we have worked so hard over so many generations to build up.

Our multi-racialism is not perfect and there is still much that we can do to improve. Let me elaborate on our multi-pronged approach to tackle racism and racial discrimination.

First, we have an enforcement and legal framework to deal with egregious cases that undermine our racial and religious harmony. Under the Penal Code, it is an offence to commit acts that deliberately wound the racial and religious feelings of any person, that promote enmity between different racial and religious groups, or that are prejudicial to the maintenance of racial and religious harmony. The Maintenance of Religious Harmony Act (MRHA), as amended in 2019, allows the Government to respond more effectively to incidents of religious disharmony and strengthens our safeguards against foreign influence that threaten our religious harmony.

The Government does not tolerate hate speech and will investigate anyone who sows enmity between races. Just last year, an individual used a Twitter account to make racist remarks against people of different races. This included comments against Indians whilst making reference to a news article on foreign workers living in dorms contributing to the apparent high COVID-19 infection rate in Singapore. He was charged for offences of promoting enmity between different groups on grounds of religion or race under section 298A of the Penal Code.

In addition, under the Broadcasting Act, IMDA can direct Internet Content Providers to take down broadcasting material that glorifies, incites or endorses ethnic, racial or religious hatred, strife or intolerance, which is prohibited under the Internet Code of Practice.

Second, Sir, we foster social norms for respectful online behaviour and discourse. Recent events have highlighted the polarising effect of online platforms and social media, and we must guard against potential divisions. This is especially important because we can only strengthen our multiculturalism, if we treat fellow Singaporeans as partners, instead of adversaries to be confronted. To achieve this, we will require a whole-of-society partnership, with Government, industry and, of course, the community, and each of us collaborating.

For example, the Media Literacy Council (MLC) promotes responsible online behaviour by working with partners to support projects by our youth promoting the shared values of respect, responsibility, empathy and integrity; and online behaviours that demonstrate safety, responsibility and also civility.

Social media companies also play a part in managing content hosted on their platforms, by constantly improving and enforcing their policies to remove content that promotes violence against people based on race or ethnicity. For example, Facebook has a set of Community Standards, which classifies "Hate Speech" as "objectionable content". Twitter also has a similar set of policies on hateful conduct. The Government works with these social media companies to promote healthy online discourse.

The Ministry of Culture, Community and Youth (MCCY) also encourages ground-up projects that promote racial and religious harmony, including those that leverage digital and online platforms. MCCY provides funding support through its Harmony Fund and partners community organisations to organise initiatives such as the Mission:Unite Hackathon in December 2020.

Third, we foster open, meaningful and responsible conversations on race and religion. That is important. These conversations bring Singaporeans together to discuss and find common ground on issues important to us as a people, and in the process, build up mutual trust, respect and also understanding.

To support such dialogues and civic engagements, we work with stakeholders in the public, private and also people sectors to identify and equip individuals with the relevant skills, so that they can in turn create safe spaces for sensitive topics to be discussed.

Within the Public Service, we have trained and developed a sizeable pool of facilitators who are able to design and lead engagements both within the Public Service and with the wider community. An example is the on-going Emerging Stronger Conversations, which I am sure many Members have heard or participated in, which are mostly led by public officers across different Government agencies who are trained in facilitation.

Beyond the public service, community and religious groups also play a key role in encouraging constructive discussions, clarifying doubts and misconceptions, and rallying Singaporeans around our shared values to take a stand against divisive rhetoric on racial and religious issues.

Our religious and community leaders have amongst them, strong facilitation and convening capabilities. MCCY augments their efforts. For example in June, MCCY supported the Centre For Interfaith Understanding's launch of a series of public workshops that aim to discover, develop and deepen interfaith facilitators' role and expose them to cross-cutting issues such as interfaith marriages and economic inequality when discussing race and religion. So, having other segments of society come together, discussing policies and economic policies as well, but having the undertone of race and religious harmony as a backdrop.

Last month, MCCY also launched the "Create and Connect" digital media workshops where 40 participants from religious and community organisations came together to learn from technology companies on how to impactfully engage audiences on sensitive race and religion issues, and also manage complex online discussions in a constructive manner.

MCCY also supports community-driven dialogues that provide safe spaces and opportunities for open dialogue and mutual learning. MCCY's BRIDGE programme was launched in 2017 and has to-date supported over 120 such dialogues pertaining to race and religion. For example, OnePeople.sg has been organising the "Regardless of Race" dialogue series since 2019, with its most recent sixth edition in April this year. These dialogues address salient issues on racial harmony, including the impact of social media on race and religious relations.

Fourth, Sir, we are committed to enlarging the common spaces in which all Singaporeans can live, work and play together, and also share the daily lived experiences that bind us. Singapore's approach to maintaining our common space has created room for every community to enjoy our diverse cultural heritage, without asking any specific segment of community to give up its rich inheritances, culture and heritage. Over time, we have achieved a balance that all communities can accept and it has allowed us to live together in peace for more than half a century. This approach remains fundamental to tackling racism and racial discrimination, and strengthening racial and religious harmony in Singapore. And I must stress that we all have a part to play.

MCCY also works with other Government agencies and community partners to provide opportunities for Singaporeans from diverse backgrounds to have meaningful interactions with one another. So, it is not just between Government and people, but also crucially, between people and people as well. These include events organised by arts, heritage and sports organisations, the People's Association (PA) and the Inter-Racial and Religious Confidence Circles (IRCCs).

We also nurture the values of respect and harmony in our students. Within the classroom, topics on multiculturalism and the importance of racial harmony are taught in subjects like Character and Citizenship Education (CCE), History and Social Studies. As part of the refreshed 2021 CCE curriculum, teachers in secondary schools and pre-university institutions will receive specialised training so that they can also facilitate conversations, discussions, dialogues on contemporary issues, including race and religion, to hone students' ability to understand different perspectives and engender a sense of empathy and respect for one another.

Through co-curricular activities and other school experiences, students bond and interact with one another regardless of background. Learning journeys to cultural and heritage sites and the celebration of cultural festivals also help students foster and develop a stronger sense of identity, learning and also importantly, sensitivity to each other's race and religious issues.

Sir, these are just some of the Government's initiatives in the community and education domains to strengthen racial and religious harmony in Singapore. Racial harmony in Singapore is a constant work in progress and our ambition is for the bonds that bind our different communities to grow from strength to strength in the common spaces that we provide. All of us have a part to play in building a nation "regardless of race, language or religion".

We will take the supplementary questions after the political officeholders have addressed the various related questions. I call on the next political officeholder who is addressing the next set of questions.

11 Ms Raeesah Khan asked the Minister for Education (a) what are the procedures that schools and institutes of higher learning adopt to address concerns from students about racial, religious and gender discrimination arising from individuals such as staff or lecturers, curricula, or policies; (b) what are the principles guiding these procedures; (c) what steps are taken to review, update and improve on these procedures; and (d) what are the obstacles to making the public more aware of the above and how can they be overcome.

12 Dr Shahira Abdullah asked the Minister for Education (a) what avenues are available in educational institutions to ensure that educators with racist views will be flagged up at the earliest possible opportunity; and (b) whether safeguards are available to ensure that persons giving feedback do not fear victimisation or being disadvantaged especially if they choose not to do it anonymously so that they can be informed of the outcome of their feedback.

Mr Speaker, with your permission, may I take Questions Nos 11 and 12 together?

Yes, please.

Mr Speaker, our schools and Institutes of Higher Learning (IHLs) are committed to providing a supportive and safe environment for our students and staff, regardless of their race, religion or gender. They provide a common space for students to learn and live out the values of respect and harmony and build a deeper appreciation of diversity in our society. To maintain this common space, our institutions stand firmly against any form of discrimination. The importance of racial and religious harmony and respect for others, is also taught through the formal and informal curriculum.

Our institutions have clear guidelines against unprofessional and discriminatory conduct. Specifically, respect for others is an integral part of the Codes of Conduct for both students and staff in the IHLs. In particular, we expect all educators to conduct themselves to the highest standards of their professions given their position of influence over the students.

Students and staff who experience any form of discrimination should not hesitate to bring it up to their institution immediately. Feedback channels and processes for students to do so include approaching senior staff or faculty members in person, or via email channels and other formal feedback mechanisms. In schools, students are informed that they can raise any issues to their teachers or any staff member. In IHLs, information on feedback channels are broadcasted on various platforms, including institutions' websites, student handbooks and portals. Students are also informed about these feedback channels during enrolment and orientation briefings.

While students and staff can choose to remain anonymous when providing feedback or reporting any incident, we generally encourage them to identify themselves and provide their contact details so that a more thorough investigation can be conducted. Students and staff have the assurance that they will be supported and protected, and that their feedback will be handled sensitively and in strict confidence.

Where necessary, institutions may decide to implement measures to maintain campus safety and the safety of those involved in the incident. For example, institutions may issue a no-contact order between the complainant and perpetrator or temporarily suspend the perpetrator from campus while investigations are ongoing.

Once a case has been lodged, institutions take prompt action to investigate the case and provide counselling support to the affected persons. Individuals involved in the incident will be interviewed and evidence gathered, to ascertain the facts of the case. Those found to have breached the Code of Conduct will be disciplined and counselled accordingly.

Institutions will continue to strengthen their feedback processes and encourage students to speak up on any incidents of discrimination. The curricula and policies in the Ministry of Education schools and IHLs are also regularly reviewed, taking into consideration feedback from educators, students and parents, through regular engagement sessions.

Beyond efforts in schools and IHLs, parents and community groups also play a crucial role in supporting students to stand up against acts of discrimination and not be afraid to raise any issues to their respective institutions.

13 Miss Cheryl Chan Wei Ling asked the Minister for National Development (a) whether the Ethnic Integration Policy is still necessary in today’s context; and (b) if so, what steps are taken to assist minority sellers who may have difficulty in selling their HDB flats.

14 Mr Chong Kee Hiong asked the Minister for National Development in view of the increasing number of inter-racial marriages and the changing profile of our households, whether the Ministry will consider (i) reviewing the Ethnic Integration Policy (EIP) and (ii) adjusting EIP proportions for blocks and neighbourhoods.

Mr Speaker, with your permission, may I take Question Nos 13 and 14 together?

Yes, please.

Thank you, Sir. I thank the Members for their questions on the Ethnic Integration Policy (EIP). I thought it would be useful for me to first share the history and context in which it was first introduced.

When Singapore was still under British rule, the Raffles Town Plan, also known as the Jackson Plan, designated separate geographical zones for each ethnic group. Malays, Chinese, Indians and Europeans lived in different areas and apart from one another. But this segregation was not conducive to promoting interaction and integration between the races. That was our colonial history.

Given the experience as well as the circumstances that led to Singapore’s Independence in 1965, our founding fathers were determined to learn these lessons in order to build a cohesive, multiracial society. Our very existence as a nation was based on this ideal: that we would be one united people, regardless of race, language or religion.

To achieve this aspiration, the Government did not blindly paper over the differences between the ethnic groups. We also did not take a "melting-pot" approach by forcing the different races to blend or conform artificially to one uniform national culture.

Instead, we respected and celebrated our differences, worked hard to uplift every community while actively enlarging our common space, and fostering trust and understanding between the various ethnic communities.

We encouraged this through a range of policies, including public housing policy. For instance, when the Housing and Development Board (HDB) built new towns and estates to provide public housing for Singaporeans, we consciously allocated flats in such a way that every HDB block and precinct all over Singapore reflected the ethnic mix of the general population. These were for our new flats then. This was so that people of different races could interact and form bonds with one another.

While we controlled the allocation of new flats quite carefully, we did not initially place similar restrictions on resale transactions, which were first allowed in 1971. Over time, as more resale transactions took place, people sold and bought and moved, ethnic concentrations started to re-emerge in particular areas. For example, by the late 1980s, we started to observe an increasing concentration of Chinese buyers in Ang Mo Kio and Malay buyers in Bedok and Tampines. We could see that, without intervention, there would, over time, once again, be ethnic enclaves which would separate us.

That is why we introduced the EIP in 1989, for both new as well as resale flats, to ensure that public housing estates remained inclusive and diverse, even beyond initial flat allocation.

The EIP applies to all races. It caps the proportion of flats in each HDB block and neighbourhood that can be owned by households of each ethnic group. The limits are set based on the ethnic proportions in the general population, with an allowance for some local variations in each block and neighbourhood. And if you look at the EIP limits, they are actually set higher than the national demographic proportion of each ethnic group.

Mr Chong Kee Hiong pointed out the changing profile of our households. He is right. We, therefore, review the EIP limits regularly, to ensure that they are in line with national demographics so that our HDB blocks and neighbourhoods continue to reflect the multiracial character of our society.

As for inter-ethnic households, which are becoming increasingly common in our social landscape, they can choose which ethnic quota to be considered when buying a flat. This choice is then fixed until they sell the flat, to be fair to other flat owners.

Today, we have made progress in strengthening good relations among Singaporeans of all races. This is the result of the hard work put in by many generations of Singaporeans, as well as our deliberate policies and programmes that seek to actively support multiracialism, including the EIP.

But as recent incidents show, there is still more that we can and must do to combat racism. Building racial harmony is a constant work in progress.

The EIP remains an important part of this effort because, left entirely to social and market forces, ethnic concentrations will start forming in different areas again.

There are many reasons for this, even beyond instinctive preferences that people may have, to live near others from the same ethnic community. For example, family members may wish to live near each other for mutual support, that is, live near family. Or residents of certain ethnic groups may prefer neighbourhoods with a higher concentration of specific amenities and services or larger flat types. Or they may find different locations more suitable for their household’s financial situation.

Individually, these are completely understandable and reasonable preferences and very personal ones. But collectively, if we are not careful, these tendencies could, inadvertently, lead to segregation among our races.

Is the EIP still relevant today? Let us look at the facts. Today, nearly one out of every three HDB blocks, and 14% of HDB neighbourhoods, have reached one or more of the EIP limits, which means they have hit that particular ethnic limit more than the national proportion. This happens across all ethnic groups – Chinese, Malays, Indians and Others – as well as in both mature estates with older Singaporeans and newer estates with younger residents, where most residents fulfilled the Minimum Occupation Period in recent years. In some areas, like Bukit Merah, Pasir Ris and Woodlands, the limits have been reached persistently across time.

So, just imagine how much more the different ethnic groups would concentrate in different neighbourhoods, if we did away with the EIP, and how much harder it would be then to promote mixing and understanding across ethnic groups in the home environment.

Our children could grow up in neighbourhoods where they hardly see any children or any people of other races, not even in their classrooms, since most children go to pre-schools and national schools near their homes. How much harder then would it be for them to even get acquainted with different cultures from a young age – to see festivities, celebrations and mourning in the neighbourhood – not to mention to truly understand and appreciate these cultures from a very young age? And how much harder would it be for our children to correct their conscious and unconscious racial biases and learn how to live in a multicultural society?

So, to Miss Cheryl Chan’s questions, yes, the EIP remains relevant and necessary today.

Fostering real racial harmony is challenging and the EIP is one very important part of the solution because it helps to ensure inclusive and diverse neighbourhoods.

Of course, some might argue that just because we live next door to someone from a different ethnic group, culture or religion, it does not necessarily mean that we will get along with our neighbour, or learn to tolerate or understand our differences. In fact, all these incidents of friction between neighbours of different cultures have caught our attention and is part of the reason why are having this debate today. But equally, often, we do not celebrate the large number of situations when neighbours learn to live with each other, celebrate each other's festivals, mourn with each other, grieve with each other and go and learn how to live together, because they live in the same community. Others also argue that there are other ways to mix and achieve social integration – in schools, at work or during National Service.

But the EIP remains critical because so much of our lives and our children's lives revolve around our homes and our neighbourhoods. With diversity in our estates, we get to interact with our neighbours of different races almost every day – along the corridors, the void decks, playgrounds, markets, neighbourhood centres, shops, hawker centres.

And if we do not live with one another, it makes it much harder to empathise with other communities and understand the challenges that they face. And so much easier to stereotype or assume the worst of the other, the people we do not see or do not see so often. And this is a recipe for mutual mistrust and intolerance that we have seen in our early history but also repeated in cities and townships all around the world.

Indeed, we only need to look at other countries in the present day to see how this might happen. In major cities across Europe and the United States (US), for example, racial segregation is common and well-advanced. Different ethnic groups live in different enclaves. The wealthier ethnicities congregate in expensive, gentrified precincts. While ethnicities which are less well-off are excluded and stigmatised. They receive fewer opportunities and these differences get entrenched across generations.

I recently read an article on the website FiveThirtyEight analysing racial segregation in the US. It featured a tool developed by the University of Virginia which is called "The Racial Dot Map" – and you might want to check it up after this. The map plots one dot for each person on the maps of US cities, with different colours representing different ethnicities. The visualisation is quite stark. The map is colourful, but you can see distinct and clear patches of colour sharply separated from one another, with very little inter-mixing, a reflection of how multicultural but segregated the country is. The author also cites a study showing that three quarters of white Americans do not have any non-white friends. He writes, I quote, "The places we live affect not only our access to resources, but also who we meet, interact with and become friends with. The nature of segregation in the US means that we only end up seeing and learning about what our own groups experience, making it hard to understand the lives of people outside of our own group."

Similarly, after I spoke about the EIP at an overseas conference some years back, a mayor of a big city that suffered from serious racial segregation and conflict came up to me. He said he wished that his city had implemented a version of the EIP much earlier on, to foster harmony and avert the unrest that they now regularly face. But now that societal divisions have hardened along racial and ethnic lines, the EIP is not a feasible nor politically attainable option. Even talking about the idea of ensuring that different races live near one another would cause an uproar and inflame tensions even further. That is how bad the situation had become. That conversation with this mayor has stuck in my mind all these years.

In fact, in September 2016, Lord Mayor Sadiq Khan of London, said this: "The less integrated our societies are, the greater the economic and social costs we face now and in the future. Failure to integrate feeds extremism, whether in the Muslim community or the far right. It causes anxiety and fear of crime and causes mistrust between people. A laissez-faire approach to achieving social integration just does not work. There is so much that city leaders can do to ensure people of different ethnicities, faiths, culture, age groups and incomes do not just tolerate each other, but live truly interconnected lives. We need to ensure that our housing and planning laws mean we design and build integrated communities and institutions where neighbours have real reasons to come together."

And, actually, I have got many other studies that we have been following over the years – studies in Europe, the US and other cities – which affirm that integration and social diversity strengthen social cohesion and understanding.

So, the EIP continues to serve a very important function for Singapore. We cannot leave social mixing to chance and hope that it will happen by an invisible hand. It is better to intervene upstream to pre-empt the problem and to foster mutual understanding and encourage integration from the start. If we wait until after racial tensions have started to bubble to the surface and develop and become entrenched, it will become so much harder to heal those fractures and rebuild trust among different communities.

From our engagements and the feedback we have received, most Singaporeans understand and support the EIP and recognise its purpose. Based on a recent REACH survey, more than 60% of Singaporeans agreed that implementing racial quotas in public housing was an important way of promoting racial integration. Similar levels of support were seen across all races. About 30% were indifferent to this and less than 10% disagreed.

Having said that, we recognise that the EIP is an intrusive social policy, because it acts against very powerful and complex socio-economic forces that are at play in Singapore and all over the world.

And in its application on the ground, the EIP does have its rough edges and may cause difficulties for some owners looking to sell their flats. In 2020, HDB received about 500 appeals for a waiver of the EIP, which is about 2% of the 23,100 resale applications filed last year.

When the EIP limits are reached for an ethnic group, sellers from other ethnic groups are unable to sell to buyers of the constrained group. With a smaller pool of eligible buyers, sellers may have to lower their asking price or they may take longer to market and sell their flat. This happens across all races, including Chinese sellers who are affected by the non-Chinese EIP limits. But we do see more appeals from sellers from the minority races. This is because Chinese buyers form a larger proportion of the market simply from the demographic mix of society and the impact on individual non-Chinese sellers is therefore larger when the Chinese EIP limits are reached. And this data we presented in some Parliamentary Questions (PQs) earlier.

In such cases, the seller’s loss may be the buyer’s gain. A buyer from an eligible race will benefit from a lower resale price and would thus be less affected if and when they sell the flat in the future.

But this brings little comfort to affected sellers, particularly those who had bought the flat from HDB, or on the resale market before the EIP limits were reached, and yet are now caught by the EIP limits. This is the group who can be financially disadvantaged, and I understand why they feel aggrieved. They may feel it is unfair that they are personally shouldering the costs for a policy that benefits all of us in society.

Over the years, Members of Parliament on both sides of this House have raised these concerns. This is why HDB has been exercising flexibility for EIP-constrained owners, on a case-by-case basis. For instance, HDB will give the household more time to sell their flat and even waive the EIP limits if there are exceptional circumstances. In fact, the percentage of successful EIP-related appeals has risen from 14% in 2018 to 21% in 2020.

However, whenever HDB waives EIP limits to address its impact on certain households, it is mindful that this may lead to even higher imbalances in the concentrations of certain ethnic groups in some areas. So, we are studying the situation carefully and are looking at what more can be done to help affected sellers.

The EIP is by no means the perfect tool, nor the only tool to promote and ensure racial harmony. We are very conscious of the trade-offs and will keep working to smoothen its sharper edges.

But it has an essential place among the range of tools, programmes, policies and safeguards we deploy to protect and promote our racial harmony. So, let us keep in mind the larger social objective behind the EIP even as we seek to smoothen its sharper edges. We must always ensure that the places we live and grow up reflect the fabric of our society. That is how we continuously press on towards our ideal of a cohesive and multi-racial Singapore.

Ms Nadia Samdin. We are taking PQs all the way to Question No 16.

15 Ms Nadia Ahmad Samdin asked the Minister for National Development with regard to Project DIAN@M3 which helps Malay families in public rental flats to achieve home ownership, how will these efforts (i) complement existing efforts by HDB’s Home Ownership Support Team (HST) to avoid duplication and (ii) be resourced to achieve intended outcomes of integrating assets towards enhancing home ownership of the Malay/Muslim community.

Mr Speaker, uplifting lower-income and vulnerable families, including supporting families staying in rental flats to attain and regain home ownership, is a whole-of-society effort.

On the Government’s part, we have a suite of housing grants and priority schemes to ensure that public housing continues to be affordable and accessible to all Singaporeans. We have also enhanced our measures to provide additional support to families staying in rental flats in recent years. In addition to generous housing grants, families in public rental can receive one-to-one guidance from the Housing and Development Board's (HDB’s) Home Ownership Support Team (HST) as they work towards buying a flat.

Within the Malay/Muslim community, the M3 network has various programmes that complement the Government’s initiatives in supporting lower-income and vulnerable families. Project DIAN@M³ aims to provide more effective and integrated support for Malay/Muslim families staying in rental flats by connecting them to the wide range of national and community programmes for education, employment, social support and health.

Project DIAN@M³, which focuses on Malay/Muslim families, will focus on the following aspects.

First, we want to improve inter-generational mobility by giving more attention to families with children staying in rental flats. Project DIAN@M³ will see the coordination of M³ outreach efforts with other Government programmes such as the Ministry of Social and Family Development's Community Link or ComLink, Early Childhood Development Agency’s KidSTART and Ministry of Education’s UPLIFT, including facilitating access to pre-school education and ensuring the children can attend school regularly.

Second, we want to help families staying in rental flats improve their employment outcomes and earn a stable income, so that they can work towards buying an HDB flat. This includes helping these families utilise their SkillsFuture credits and linking them up with career counselling programmes under MENDAKI SENSE. We also want to encourage more women to join and remain in the workforce. For Malay women who wish to continue working after marriage or childbirth, the Back-to-Work Women programme by MENDAKI SENSE connects them to potential employers and prepares them to take on new jobs.

Third, we will ensure that families have access to social support that can help them to grow a positive family environment. This is done through programmes such as Bersamamu and Project ARIF, which support newly wed couples for family life, maternal wellness and child development.

In terms of resourcing, Project DIAN@M³ will be led by the M³ Engagement Coordination Office (ECO) and tap on its existing resources. For example, ECO will equip volunteers reaching out to families staying in rental flats with the knowledge and skills to perform last-mile outreach. We welcome more who wish to be part of Project DIAN@M³, and partner us on this important effort. Ultimately, we hope the concerted support will enable the vulnerable families to achieve home ownership.

Mr Speaker, may I seek your consent and the general assent of Members present to move that Question Time at this day's Sitting be exempted from the provisions of Standing Order No 22(1) so as to enable the Questions for Oral Answer to continue until the completion of Question No 16, including relevant supplementary questions.

I give my consent. Does the Leader have the general assent of hon Members present to so move?

[(proc text) Hon Members indicated assent. (proc text)]

Leader, please proceed.

[(proc text) With the consent of Mr Speaker, and the general assent of Members present, (proc text)]

[(proc text) Question put, and agreed to. (proc text)]

[(proc text) Resolved, that notwithstanding Standing Order No 22(1), Questions for Oral Answers set down on the Order Paper for today to continue until the completion of Question No 16 and including relevant supplementary questions. – [Ms Indranee Rajah]. (proc text)]

Dr Shahira Abdullah, Question No 16.

16 Dr Shahira Abdullah asked the Minister for Social and Family Development and Minister-in-charge of Muslim Affairs (a) what is the current take-up rate by Malay/Muslims of the national financial and estate planning programmes available; (b) what are the current initiatives available to educate Malay/Muslims on permissible methods of investments and estate planning; and (c) what are the avenues for them to seek clarification or enquire about such financial or estate planning methods.

Mr Speaker, MoneySENSE is our national financial education programme that seeks to raise Singaporeans' financial literacy. Under MoneySense, there are various initiatives, resources and tools to help Singaporeans make prudent decisions related to their savings, housing purchase, investments and retirement planning.

This is done in two ways. First, MoneySENSE's website and social media channels provide free bite-sized information, starter packs and financial tools on financial planning. Second, MoneySENSE offers free financial talks and workshops through the Institute for Financial Literacy (IFL). Since March this year, the IFL has been conducting periodic "Ask-Me-Anything" Facebook Live sessions, where individuals can ask trained finance professionals about topics such as estate planning and digital tools for financial planning.

In addition, MoneySENSE collaborates with various partners to reach out and provide financial education to Singaporeans at different stages of their lives. For example, MoneySENSE works with the Ministry of Social and Family Development to incorporate financial planning topics in the marriage preparation programmes. This includes Muslim couples attending the Cinta Abadi Marriage Preparation Programme, where they will learn how to plan ahead by making Central Provident Fund (CPF) nominations and the Lasting Power of Attorney.

Community initiatives supplement these national programmes to further strengthen support for the Malay/Muslim community, including newly wed couples and young families.

MENDAKI SENSE’s Program Bijak Belanja engages young and low-income families to empower them with financial management skills. The workshop is delivered in Malay and covers practical day-to-day management of family expenses. Topics such as home ownership, basic investment and management of inheritance are also covered in the programme. Over the last two and a half years, more than 600 participants have benefited from MENDAKI SENSE's Program Bijak Belanja.

As part of the M3 initiative, the Naib Kadi or solemnisers will provide marital guidance to newly wed couples through the Bersamamu programme, so that they have a good start and build a strong foundation to their marriage. Where required, the Naib Kadis will also refer couples to available community and national resources including financial support programmes.

Financial planning courses will also be offered to newly wed couples and young Muslim families under Temasek Foundation's programme called "Achieving Resilient and Inspiring Families" or Project ARIF. Majlis Ugama Islam Singapura (MUIS) is in discussion with MoneySENSE to incorporate financial planning components into this programme, which is expected to be implemented next year.

Religious guidance is also another way provided to the community on matters related to financial and estate planning tools. MUIS has conducted seminars and talks on managing inheritance and organised several Continuous Professional Education or CPE training programmes on “Wealth and Estate Planning” for our asatizah. A free guidebook on the Islamic Law of Inheritance or what we call Faraidh, covering the financial and estate planning tools that can be practised by Muslims within Singapore’s context, is also accessible online. The guidebook contains a helpful list of Frequently Asked Questions (FAQs) on managing inheritance.

In addition, MUIS has issued religious rulings or fatwas to guide the community in their estate planning and decision making.

For example, the Hibah Special Needs Trust Company (SNTC) Fatwa permits trusts to be made for disabled dependents to ensure their future well-being when there is no longer a surviving caregiver.

Another one, the Joint Tenancy Fatwa permits the surviving joint tenant to have full ownership of the property, without the need for a transfer of ownership and being subjected to distribution of inheritance according to Islamic law.

And third, the CPF Nomination fatwa recognises the permissibility of the CPF nomination instrument. Muslims can choose the CPF instrument or distribute their wealth according to faraidh, or exercise both options together.

In 2012, MUIS also set up the "Wakaf Ilmu", a voluntary charitable endowment for Muslims to come forward to do planned giving. The revenue generated through the investment of the Wakaf in capital-guaranteed instruments and properties is channelled towards supporting Islamic education in Singapore.

Mr Pritam Singh.

Thank you, Mr Speaker. I thank the Leader for extending the time for Members to ask supplementary questions. My question is directed to the Minister for National Development. First and foremost, I thank the Minister for that very nuanced exposition of the Ethnic Integration Policy (EIP). I think it has been the most nuanced reply that I have heard from a Government Minister on the EIP, considering on the one hand the realities of racial integration and other policies that can assist; and on the other, the fact that there are people who actually pay a price for the EIP.

I have three supplementary questions.

The first pertains to the request for waivers. This has been on the up, from 2017 to 2019. I understand the numbers were around 1,850 for the three years: 25% from the Malay community, 16% from the Chinese community and 59% from the Indian and other communities. The numbers actually cascade lower in the years before.

My question is: for the EIP limit for the Indian and other communities, which was at 59%, when the EIP limit overall was actually reviewed in 2010, the EIP limit for that category was 10% and 13% at the neighbourhood and block level, and that was increased to 12% and 15% respectively. My question is: in view of the large number of EIP appeals continuing to come from this community and a suggestion made in 2010 by the then-Minister for National Development that there would be a review around 2020, has this review been undertaken and what are the new EIP limits, if any?

The second question is a question for information. In 1989, when EIP was introduced, 28% of the neighbourhoods had already reached the established EIP guidelines on the start date of the EIP. Over the years, this has fallen but there is no real clarity about why this has fallen. I am specifically referring to the number of new neighbourhoods that have also come about. So, the percentage can be very difficult to understand. For example, in Kaki Bukit and Aljunied GRC, the neighbourhood level numbers for the Malay community are still, I believe, beyond the EIP limits. And there is nothing untoward about race relations in Kaki Bukit. And I think this will be replicated in other parts of Singapore.

So, to this end, is the Government prepared to share details on the breakdown by ethnic groups in all HDB neighbourhoods, both new and old, on an annual basis from 1989? If it is, then, we will file the question.

Finally, in response to a Parliamentary Question (PQ) I filed in 2013, HDB shared that it had reviewed the EIP limits for rental flats; and administratively, it adds up to 10% for the block limits for HDB rental flats. Would HDB consider a similar approach for all flats and also exercise greater flexibility at the neighbourhood level as a means of loosening the EIP criteria as a compromise, or even remove precinct and block quotas in favour of a larger area of coverage?

This is in view of the rising number of EIP waiver requests over the last few years, Singapore's changing demographic profile and for policy equity considerations towards communities that are adversely affected by the EIP.

I thank the Leader of the Opposition for his three questions.

First, on the number of appeals from households from Indian or other ethnic origins, whether the review is ongoing, it continues to be so. We look at the proportions of various ethnic groups over the years and we make adjustments, where necessary.

In 1989 versus 2020, the second question. Here is the data. In 1989, when we introduced the EIP, 28% of neighbourhoods had reached one or more EIP limits. So, 125 neighbourhoods then; 35 neighbourhoods reached one or more limits. In June this year, out of 173 neighbourhoods – because we have been building our towns and increasing the number of neighbourhoods – 14% have breached one or more ethnic limits. That is 24 neighbourhoods. In 1989, 35 neighbourhoods out of 125 and in June 2021, 24 out of 173.

So, more neighbourhoods as a whole in Singapore but the number of neighbourhoods hitting one or more EIP limits has come down, not just in proportionate terms but in absolute numbers.