Hansard, Tuesday, 5 July 2022

Order. On behalf of hon Members, I would like to extend a warm welcome to the Honourable Tan Sri Azhar Azizan Harun, Speaker of the House of Representatives, Parliament of Malaysia, and his delegation, who are present in our Gallery. [Applause.]

1 Mr Seah Kian Peng asked the Minister for Culture, Community and Youth what changes are in store for the public and sporting community following the takeover of the Singapore Sports Hub by Sport Singapore.

Mdm Deputy Speaker, may I have your permission to have Question No 1 taken as part of the Ministerial Statement to be delivered by Minister for Culture, Community and Youth Edwin Tong at a Sitting in August 2022, as he is still COVID-positive this afternoon.

Okay. Mr Ang Wei Neng, next question.

2 Mr Ang Wei Neng asked the Minister for Health in light of the recent rise of COVID-19 infections in Singapore, especially with the increase in the Omicron subvariants infection in the community, what steps will the Ministry take to (i) reduce the infection rate and (ii) encourage seniors to take their second COVID-19 booster shot.

3 Mr Yip Hon Weng asked the Minister for Health (a) whether our healthcare settings are adequately equipped to handle the next COVID-19 wave expected in July or August 2022; and (b) whether the Ministry can provide an update on the redesign of COVID-19 community treatment facilities.

Mdm Deputy Speaker, with your permission, may I address Question Nos 2 and 3 together? And in my reply, I will also cover written Question Nos 43 and 21 filed by Ms He Ting Ru and Mr Yip Hon Weng on the topic of COVID-19, filed for 4 and 5 July respectively, please.

Please go ahead.

Thank you. Mr Ang Wei Neng asked how we will reduce infection rates of the Omicron subvariant transmission. We anticipated this wave when we learnt about the subvariants BA.4 and BA.5, which have a significant growth advantage over BA.

2. This wave, however, arrived slightly earlier than the July and August timeframe that we expected.

That is why we have maintained the indoor masking requirement even when cases were low and stable, in order to moderate the infection rate when this new wave arrives. The high vaccination coverage that we have will also temper the size of the wave. To reduce the infection rate further, all of us can play our part: stay at home when we do not feel well, test ourselves regularly, especially if we are meeting people who are vulnerable, or if we attend big meetings or events, such as before coming to Parliament.

And if we still want to reduce the infection rate even further, more stringent safe management measures (SMMs) will need to be implemented. And that means reintroducing things like group sizes, capacity limits and masking outdoors. As the Minister for Health, I can never say we will rule out these steps.

We cannot rule out these steps when we are hit with a serious infection wave but, as far as possible, we should avoid them, especially if we are reasonably confident that our hospital capacity can hold up and that we are determined to live with COVID-19 and continue our journey of endemicity.

For this current wave, our assessment is that it will not be as severe as the Omicron wave we experienced earlier this year. This is because many more of us have gained stronger immunity either through booster shots or recovery from infections. This will significantly impede the circulation and transmission of the BA.4 and BA.5 viruses.

In South Africa, the second Omicron wave, driven by these two subvariants, was approximately one-third of the peak of the previous Omicron wave. Every country’s experience will be different and unique, but we have good reason to believe that this will be a smaller wave than the last. Today is Tuesday. Tuesday is always the day when cases spike. We should expect at the end of today case numbers of over 12,000. This is a tad higher than the same time last week, which was over 11,000, 10% more than last week.

So, there are indications that we are near the peak, if not at the peak. And we should be relieved that the number this week did not double from last week. Otherwise, we will be at 24,000 or 22,000 this week.

The key is to ensure that hospital capacity is not overly stressed. And here, we have been relying on two strategies that I will go through today: first, ensure high vaccination and booster coverage so that as many people as possible are protected from severe illnesses, if they are infected; second, ensure that our healthcare institutions and facilities are prepared and able to ramp up capacity, should there be increased admissions. These strategies continue to be relevant for this current wave.

Let me talk about the first point, in response to Mr Ang Wei Neng and Mr Yip Hon Weng’s questions. The most important is for everyone who is eligible to take their first booster or their third shot. After several mutations, we now need three shots of vaccines to properly protect ourselves against the Omicron variant. The vaccines were developed in the early days, the wild type – or Alpha and Beta – when you need only two shots. With more mutations, we now need three shots.

There are about 60,000 seniors aged 60 and above who have not taken their first booster or third shot. This number has come down from last week, when Deputy Prime Minister Lawrence Wong and I announced that there were 70,000. It has now come down to 60,000. So, they are coming forward, which is a good thing. But we urge all our seniors who have not taken your booster shot, your third shot, to do so quickly because it makes a huge difference whether you will fall severely sick if infected.

We have also recommended since March that vulnerable individuals should take a second booster, or your fourth shot. This includes all persons aged 80 and above, those living in aged care facilities or those with underlying illnesses and are vulnerable.

In recent months, we have stepped up our efforts to remind seniors to do so. We made regular announcements and have been progressively sending out SMS notifications and reminders to eligible individuals. They can walk into any Joint Testing and Vaccination Centre or participating Public Health Preparedness Clinic (PHPCs) or polyclinic to receive their second booster dose. Alternatively, individuals can also book an appointment using their notification SMS.

Since 27 June this year, we have also been sending out mobile vaccination teams (MVTs) to our heartlands to make it even more convenient for our seniors to get vaccinated and boosted. We will cover a total of 60 sites. Last week, we planned for 50. We are going to increase it. Now we will cover 60 sites.

Staff and volunteers from our partners, People’s Association and Silver Generation Office, are also reaching out to our seniors through house visits and engagement dialogues to address many of the queries that our seniors may have. I also know that many Members of this House have been reaching out, talking to seniors and engaging them. Thank you very much for doing so.

Persons who are recommended to receive the second booster under prevailing recommendations should proceed to do so, even if you have contracted COVID-19 previously. Ideally, an individual should wait 90 days after infection to take your second booster. It will help the booster work better. So, wait 90 days and take your booster. But if you are in a hurry for whatever reasons, we will offer the second booster at least 28 days after your infection. So, please tell your residents, "If you have been infected, it does not mean you are exempted from the booster". All of us respond differently. Some of us hardly have any response. So, to be safe, take your booster shot.

The second prong of our strategy is to augment and optimise our healthcare capacity. While current international and local evidence show that severity of the Omicron subvariants is not worse, compared to that of the earlier Omicron strains, our hospitals, GPs and other healthcare institutions are on standby to bolster their capacity to prepare for future waves.

Our hospitals remain ready to ramp up dedicated ICU and isolation bed capacity should there be an increase in the number of COVID-19 patients who require hospitalisation. Actually, there is and they are already doing so and are now very busy.

We have also maintained sufficient beds in our COVID-19 Treatment Facilities, or CTFs, to manage serious cases that do not need hospital care. We have recently consolidated our CTFs from about 2,000-over beds, to about 1,300 beds, but with a higher manning ratio. This will make it easier to transfer patients from acute hospitals to CTFs without a significant drop in level of care. They are now about 25% occupied.

Our GPs continue to take care of COVID-19 cases within the community. Nursing homes are equipped to manage lower risk cases within their facilities. To help reduce risk of developing severe disease and hospitalisation, COVID-19 therapeutics, such as oral antivirals, for example, Paxlovid, are made more readily available in primary care and nursing home settings as early treatment, and pre-exposure prophylaxis is available in hospital outpatient settings for at-risk populations. As of 30 June, all polyclinics and 103 participating PHPCs can prescribe oral antivirals to clinically-eligible patients in the community.

With these measures, the vast majority of cases are managed outside of hospitals, which is appropriate, given the high level of vaccination in our population.

However, our public hospitals continue to face high demand from non-COVID-19 patients, what we call the "business as usual" (BAU) patients. Over time, we hope more of our CTFs can be multi-purpose isolation and treatment facilities for both COVID-19 and non-COVID-19 patients. We have already reconfigured one of our CTFs at Sengkang Community Hospital into this new model and we will explore converting other CTFs.

Finally, Ms He Ting Ru asked about healthcare subsidies related to COVID-19 pandemic. As at end FY2021, the Government has spent about $730 million and $220 million on subsidising inpatient and outpatient treatments for COVID-19 respectively.

Since February 2020, we have progressively stood up more than 1,000 PHPCs. Alongside our polyclinics, PHPCs play critical roles in providing Government-subsidised swabs, COVID-19 vaccinations and oral antivirals. We did not reduce the number of PHPCs earlier because we anticipated a new wave of infection, which did happen. We are now in the middle of this new wave and it will be inappropriate to stand down PHPCs at this juncture. This is in response to Ms He Ting Ru's question.

In conclusion, Singapore has been weathering the COVID-19 pandemic through a comprehensive approach. While we have assessed that there is no need to tighten SMMs for now, we urge everyone to play our part to take the necessary precautions, exercise individual and social responsibility to keep infection rates low, support our healthcare workers and healthcare institutions to weather through this wave.

Mr Ang Wei Neng.

Thank you, Mdm Deputy Speaker. I also thank the Minister for the very comprehensive reply. Can I ask the Minister what is the percentage of the recent COVID-19 infections that are caused by the two subvariants BA.4 and BA.5 and whether MOH is considering sourcing Moderna and Pfizer-BioNtech's updated COVID-19 booster shots that can better target the Omicron subvariants?

Thank you. Of all infections now, the latest number is about 50% are the BA.4 or BA.5 – mostly BA.5 – subvariants. It has been doubling every week. It started with 3%; then 5%; then 8%; then 16%; then 30% last week and50% this week. By next week, I would expect it to be 70%, 80%. It is clearly a more dominant subvariant, compared to BA.2.

Pfizer-BioNTech and Moderna, as the Member pointed out, are, indeed developing bivariant vaccines, which means these target two viruses: the original wild type that started in Wuhan as well as the Omicron variant.

Early data does show that these bivariant vaccines elicit a stronger immunity response in individuals who have taken them but it is very early days. We will continue to study the risks and benefits of using such a bivariant vaccine, how to apply it in Singapore. As of now, our contracts with both pharmaceutical companies do allow us to accept shipment and implement them when ready, probably by end of the year, if they are approved, the data shows it is alright and we receive the shipment.

But – I should add the very important "but" – do not wait for this bivariant vaccine and hold back taking your booster. We have 60,000 seniors, and also those with health conditions, they are vulnerable. If you have not taken your first booster, you need to take it now. And if you are 80 years old and above, living in an aged care facility and vulnerable, you do need to take your second booster now. The current booster, the current formulation works very well in preventing you from falling very sick. So, do not delay taking your booster.

Mr Yip Hon Weng.

Thank you, Mdm Deputy Speaker. I thank the Minister for his reply. I have two supplementary questions. First, it was previously reported that there was a wave of manpower leaving the public healthcare sector. Have we been able to hire new staff to make up the shortfall? Is it enough for the next wave?

Second, the number of hospitalised COVID-19 cases has increased over the last three weeks. Will there be a cutting back of elective surgeries in our hospitals on the horizon, due to the COVID-19 situation?

Let me answer the second question first. The answer is yes. The number of hospitalisation cases has reached almost 700 now. So, it has increased quite significantly. This is as compared to the height of the Omicron variant wave earlier this year, where we have about 1,700 hospitalisation cases. Now, it is close to 700.

At that time, we cut back business-as-usual (BAU) surgeries by 15%. We have now started to trigger some cut-back of BAU, mostly electives, and it is at about 4%. So, about 700 beds, 4% cutbacks in BAU, compared to the height of the Omicron variant, 1,700 beds, 15% cut.

As I have mentioned earlier, from today's number, we have reason to believe the wave should be near its peak and I hope, from here, things will be better.

Manpower, indeed, is a challenge. The current attrition rate is comparable to what we had experienced in 2019. In February, there was a slight spike after bonuses have been received. But, otherwise, in the latest number, month-on-month, it is comparable to what we experienced in 2019, pre-COVID-19.

Having said that, it is increasingly difficult to hold on to and to recruit foreign nurses, because, with COVID-19 being a global pandemic, the hiring of nurses is a matter of international competition. The good thing is that, locally, young people's perception of the nursing career is, by and large, a positive one. I am very thankful, actually, that, in MOH and healthcare, we have our fair share of talent. And when Nanyang Polytechnic, Ngee Ann Polytechnic or SIT open up their courses, it is always oversubscribed, lots of competition. People cannot get in and they have come to us to appeal to get into nursing courses. Mid-career conversions also have a healthy pipeline.

But our cohort size is limited. Our healthcare demand is growing. So, therefore, we must be able to accept that, over time, we have to recruit more foreign nurses from different sources, be able to take them in, train them and, over time, recognising that there is international competition, be able to review their pay and pay them competitively. The good ones, over time, should be able to become part of our community and become PRs, live with their family here, go to the local schools.

This is the only way for us, to not just weather through this wave, but, also as our population gets older, the size of our healthcare workforce will have to increase and we have to tap on both a strong local pipeline, as well as foreign recruitment.

The following question stood in the name of Mr Seah Kian Peng –

4 To ask the Minister for Defence (a) whether the Ministry intends to hold a national dialogue on expectations of national athletes serving their National Service (NS); and (b) whether there will be a review of the policy regarding such athletes and their NS obligations.

5 Mr Leong Mun Wai asked the Minister for Defence (a) whether the Government will relax the eligibility criteria for National Service (NS) deferment for young male Singaporeans who have the potential to accomplish significant successes in the sports and arts fields; and (b) whether the Government will consider deferring NS for young male Singaporeans who have the potential to accomplish significant successes in fields other than sports and arts.

Mr Seah Kian Peng. Not here. Mr Leong Mun Wai.

Question No 4, please.

Mdm Deputy Speaker, may I please take Question Nos 4 and 5 together?

Please proceed.

This year, we commemorate 55 years of National Service (NS). Singapore remains one of the few countries where NS enjoys high levels of public support. How high, you might ask. Well, every year, we take polls, similar to other questions asked by other Government agencies. In 2021, 96% of Singaporeans polled affirmed that NS is critical for the defence and security of our country. Let me tell you, 96%, even for our country, is highly unusual. There are very few questions that you can get above 85%, let alone 90% or 95%.

Today, more than one million have served NS. Each year, every young male citizen and Permanent Resident (PR) puts his personal commitment into action by enlisting into SAF or Home Team for full-time NS.

We have had this high support of NS for many years now and I want to make clear to Members of this House that this strong support that Singapore enjoys is an exception and not the norm, compared to other countries with military conscription.

If you study the global landscape of countries that have mandatory national service, compared to when we first started it 50-odd years ago, the list of countries has shrunk significantly. I have spoken in this House about the Baltic states which gave up national service, only to wish today that they did not. But not only in terms of just countries that have managed to keep their national service, but many countries were forced to cut their national service commitments for a variety of negative reasons.

So, it would be a serious mistake if we take that affirmation we receive today from Singaporeans for NS, that we take it for granted, or think it came by happenstance. On the contrary, this strong support, why it is that we have been able to keep such high levels of national support, there is one key reason.

We have held, unequivocally, the fundamental principles of universality and equity for NS. What does that mean? At its core, it means that all male Singaporeans and PRs who are fit and liable to serve, are conscripted for full-time National Service, as required by the Enlistment Act and not at a time of their choosing.

Further, during the two years that they serve NS, all personal goals are put aside and placed subservient to the higher duty to defend Singapore. It is a national commitment of the highest order and one that we all take very seriously. So much so, that for defaulters who reneged on their liability, our Courts have sentenced them to jail.

Let me quote from a 2017 High Court judgment: "In order to ensure Singapore's national security, every male Singaporean must serve National Service and at the time that he is required under the [Enlistment] Act, without regard to his personal convenience and considerations." I emphasise, "without regard to his personal convenience and considerations".

"When a person refuses to serve National Service at the time that he is required to and instead returns to serve at a time of his own choosing, or worse, at an age when he can no longer serve, his actions strike at the very core of the principles of national security, universality and equity."

These are strong words that underpin this collective and deep commitment to uphold NS, with just as strong a punishment for defaulters, who are sentenced to jail for choosing to do NS when and how they like.

Juxtapose that with those who ask for deferment, disruption, to come at a time of their choosing and to pursue their personal goals if they have sporting or arts talents. How do we rationalise this disparity?

We can only understand it because we apply very strict enforcement while, on the other hand, to those who must enlist for NS, we provide deferments and disruptions for any reason, sparingly, justified adequately and implemented openly. Otherwise, the system fails. If you are so harsh, as the main core of your policy, then you have to be very, very careful that your disruptions and deferments are sparing, justified openly and adequately.

Each appeal for deferment and disruption from sports and arts talent must, therefore, pass a very high bar. Each request is assessed on its own merit, in consultation with MCCY, taking into consideration the applicant's past achievements and potential to excel in international competitions and bring national glory.

We allow deferments and disruptions for arts and sports talents when there is a higher goal of national glory. But this deferment or disruption is not a licence to do away with your NS obligations. That must still be maintained. So, even when granted, there is no abdication of NS duties. And we have to ensure that the applicant's NS duties are taken seriously and that he must be trained to be competent in his assigned vocation. This will include periods like BMT, specialists and commanders' courses, and his unit's key operations, which the applicant must fulfil as part of his NS duties, even if he is granted deferment and disruption.

Now, even with these strict criteria, I must inform the House that not all Singaporeans support deferment or disruption for sportsmen. I quote a letter published in The Straits Times in May of this year, quote: "Let us not set the precedent by letting individuals call for a dialogue for the benefit of a privileged few. Medals can bring glory to Singapore but it is more important to have people with commitment to serve National Service for Singapore's peace and security. All Singaporean sportsmen should know that if there is no Singapore, there is no sport to talk about."

I leave you to decide whether you agree with the views. I am quoting to tell you that there are Singaporeans, even despite the strict application of deferments and disruptions, do not agree with it.

MINDEF also receives letters from Singaporeans from time to time, questioning the fairness when deferred sportsmen receive financial rewards through endorsements, while others had to serve their NS as required. They asked if this was compatible with the assurance given that deferments or disruptions should not be for personal gain, but national glory.

I cite these criticisms to show that even when sparingly applied, deferments and disruptions can have a pernicious effect – to cause invidious comparisons that some are given preferential treatment and are not performing their NS duties.

MINDEF reiterates that all NS men must perform their duties, and their short-term disruptions or leave for sportsmen to train for and compete in international competitions are only allowed outside critical NS periods. And those who have benefited from these provisions in the most recent SEA Games include paddler CPL (NS) Koen Pang, hurdler CPT (Dr) Ang Chen Xiang and triathlete OCT Luke Chua, apart from the swimmers that you have read about.

Long-term deferments from full-time NS, such as those mentioned by Members, are exceptional, only for those who have potential to win medals at top-tier international competitions like the Olympic Games. And on this basis, swimmers Joseph Schooling and Quah Zheng Wen were granted eight years' and five years' deferment respectively for the 2016 and 2020 Olympics. [Please refer to "Clarification by Minister for Defence", Official Report, 5 July 2022, Vol 95, Issue No 64, Corrections by Written Statements section.]

From time to time, MINDEF convenes review committees to address these and other NS issues as top-down initiatives. And you will remember that the last NS Review Committee was just held and completed from 2020 to 2022. And I have reported on the recommendations of that review and the implementation to this House. But there is also space for ground-up dialogues. When the next review of NS policies is convened, MINDEF will incorporate views across the spectrum of supporters and detractors of deferments and disruptions for sports and arts talent.

After 55 years, I think we do have strong agreement on the common principles of NS – which is, everyone, regardless of talent or status, must fulfil their NS obligations as a first priority and all personal pursuits must be secondary to this during their full-time NS. And based on this understanding, for sporting talents who bring national glory to Singapore, we can and have allowed limited deferments and disruptions, but without compromising their NS obligations.

I am proud that our national athletes understand and accept this duty of NS. None of them has asked to be exempted from NS duties, including those who trained hard and participated in recent regional and international events. They understand that everyone must fulfil their NS duties, even if you are a sporting or art talent.

I also know that our national sportsmen want to do well in both – fulfil their NS duties and also win medals for Singapore; at least some of them. Some have achieved it, but it is not easy to attain and we must not set unrealistic expectations on all of them. However, for those who want to pursue both goals, MINDEF is prepared to allow more to disrupt to train and compete in international competitions during their full-time NS. This is on the understanding that they fulfil the full period required after their disruption and also perform their NS duties satisfactorily while in NS. Thank you, Mdm Deputy Speaker.

Mr Leong Mun Wai.

Deputy Speaker, first of all, I thank the Minister for the clarification. I have two additional questions to ask.

One, from what the Minister has said, we have policies in place for deferment for sportsmen and performing arts Singaporeans who can perform at the competitive and world level. But I think based on the reaction and feedback of the athletes recently that we read in the papers, there seems to be still insufficient leeway given. Just now, the Minister did mention a little bit about —

Madam, I have answered the question quite adequately for the Member. I suggest he does not make another speech.

Yes. Mr Leong, can you just ask your question?

Okay, can I ask the Minister again to confirm that he will look into further relaxation for athletes who want to perform better in their —

Madam, can I answer that question?

Yes, please.

Madam, I have gone to great lengths answering the basis of our deferments and disruptions. And I think my answer speaks for itself. Thank you.

Okay, I thank the Minister for that.

Point of Order, Madam —

Mr Leong, do you wish to ask the question?

I have asked the first question. So, I will ask my second question.

Okay, please do so.

My second question is: while the Minister has said that personal development should be secondary to National Service, I think as our society becomes more sophisticated, there is also a need —

Point of order, Mdm Deputy Speaker. Is this a further point or a clarification?

He is asking a question, so let him do it. Mr Leong, please get to your question.

Yes, please allow me. So, there is also a need for us to give more room for our talents to develop. And the situation we have now today —

Mr Leong, please ask your question.

Yes, we have a situation now today, that while we are hindering the development of our sports and arts talents by not granting them enough deferment in some cases, there are also a lot of citizens by registration that are not performing —

Mdm Deputy Speaker, I do not hear a clarification.

Mr Leong, I am going to ask you one more time. Please ask your question. Otherwise, please take your seat.

I thought I am asking the question.

Well, you are making a lot of statements. I have not heard a question from you.

Okay, so, let me ask the question again. Is it fair that while we are hindering the development of our talents by not granting them deferment, citizens by registration are also not doing NS?

Minister.

Mdm Deputy Speaker, that is an utter mischaracterisation —

Mr Leong, you may take your seat.

— that citizens by registration are not doing their National Service. I think he has filed a separate question and I think he can read the reply.

Mr Leong, please take a seat now. Minister has answered your question.

No, I asked a question and the Minister said that he is not answering the question.

Your question is not related to the Parliamentary Question you have filed. So, please take a seat.

Okay, thank you.

Dr Tan Wu Meng.

6 Dr Tan Wu Meng asked the Minister for Manpower (a) since January 2021, how many food and goods delivery platform workers have died from accidents in the course of their work; (b) whether the Ministry will mandate delivery platforms to report non-fatal job-related injuries and near-misses involving platform workers; and (c) whether the Ministry will consider tracking the compensation and support provided to families of delivery platform workers who have died or suffered serious injuries during work.

7 Dr Tan Wu Meng asked the Minister for Manpower whether the Ministry will consider requiring delivery platform firms to provide baseline compensation commensurate with the Work Injury Compensation Act, especially when a delivery worker has been seriously injured or died on the job.

Mdm Deputy Speaker, may I take Question Nos 6 and 7 together, please?

Please proceed.

Since January 2021, there have been five fatal work-related traffic accidents involving food and goods delivery platform workers. The Workplace Safety and Health Council is working with platform companies to review work processes to enhance the safety of platform workers on the road to prevent accidents. More details will be shared when ready.

In parallel, the Advisory Committee on Platform Workers is looking at strengthening financial protection in case of work injury for delivery persons, private hire car drivers and taxi drivers. The Advisory Committee has been engaging platform companies and platform workers on the provision of financial protection to platform workers who are injured at work. Such protection is provided currently to employees under the Work Injury Compensation Act. The implementation of such a work injury financial protection framework would require the mandatory reporting of work injuries to ensure platform workers receive the necessary compensation.

Dr Tan Wu Meng.

I thank the Senior Minister of State for his answer. I have a number of Clementi residents who work as delivery riders. They and their families, as well as some of their customers, are troubled every time a delivery rider dies on the job.

I have filed two Parliamentary Questions (PQs) and I hope Mdm Deputy Speaker will allow me three supplementary questions.

First, can the Senior Minister of State confirm that the Work Injury Compensation Act (WICA) policy intent is to cover persons on flexible working arrangements and, if so, why not cover flexible workers in the gig economy?

Second, does the Senior Minister of State agree that there is policy space to improve protection for these delivery riders, to close what may be a perceived policy lacuna, to ensure a fairer outcome when a delivery rider dies on the job, working for a gig platform?

Thirdly, does the Senior Minister of State also agree that this policy improvement has broader implications for workplace safety in Singapore? For example, what happens if, tomorrow, a marine, manufacturing or construction company decides to gazette their Singaporean workers as self-employed or independent contractors? They would need protections, too.

In summary, Mdm Deputy Speaker, as one resident said, "No company should ever be allowed to send the message that when a worker dies, it is 'you die, your problem'." Because if a worker dies on the job, it is everyone's problem.

Mdm Deputy Speaker, I thank the Member for his three clarifications. Indeed, the issues he raised are also issues that the Advisory Committee on Platform Workers has been deliberating on.

Certainly, every death at work is one death too many. We have been working very closely with employers, including platform companies, to make sure that some of these safety measures at work are looked into. As I have said in my main reply, the Workplace Safety and Health Workgroup is looking at this and will announce more measures when ready.

The Member's first question on why is it that WICA is applicable for flexible work arrangements but not for workers who are working flexibly as gig workers. The underlying reason is because gig workers, by definition, are self-employed persons and self-employed persons are not covered under the Employment Act.

Having said that, the Advisory Committee, having consulted widely, is looking at this issue from the perspective that self-employed workers in the gig economy may be subject to management controls by the algorithms in the platforms, in which case, they are somewhat a little bit more employee-like. And, therefore, we are looking closely to see whether WICA can be applied also to gig workers, to provide them a lot more financial protection when they are injured in terms of their work.

The Advisory Committee is also taking a look at the principle of a gig worker, if he is injured at work providing services to people, but what if the nature of work is similar to another worker doing delivery work as an employee. In that sense, in principle, there should be no differentiation whether the person's life is worth more or less, just because he is being engaged in a different form of employment.

By providing some form of equal principle in terms of protection using WICA, we hope to actually cover some of the vulnerabilities of this segment of workers, to make sure that if they are injured or suffered a death in the course of their work, some financial compensation that is commensurate with the kind of work they do, will be provided for them as well.

The Member's third question on what happens if companies were to reclassify employees as gig workers and therefore, attempting to circumvent some of the benefits or rights that employees enjoy. I think, in this case, there is no single test that is able to be used to check whether a worker has been reclassified. What is important is to look at the nature of the engagement between the company and the worker. For example, if the company, by the nature of the work that this person is doing, has to provide a workplace, has to provide equipment, has to provide the kind of jobs to be given to this worker and there is an expectation for the worker to perform – certain KPIs, for example – in that case, that relationship is more akin to an employer-employee relationship. The company would then be expected to provide employee benefits to this worker under the Employment Act.

It does not matter whether this person is a full-timer or a part-timer or whether, in the contract, the company claims that this person is self-employed. So, in adjudicating such disputes, we will look at the nature of the engagement and the relationship between the worker and the company, to make a judgement.

Workers who take on any employment with any company should look closely at the terms of contractual agreement they sign with the company before they actually engage with that company. If they are not clear in their terms of employment, they can seek clarification with the Tripartite Alliance for Dispute Management (TADM) to make sure that they understand the terms of the employment and what they are signing up for.

This is the approach that MOM will take. There is no one-size-fits-all test to be sure whether the engagement is a contract for service or a contract of service. We look at the relationship of the engagement.

Mr Pritam Singh.

Thank you, Deputy Speaker. Just a quick question. When the Senior Minister of State announced the formation of the Advisory Committee last September to look at savings of gig workers and the injury framework, the Senior Minister of State, I believe, also announced that the report of the committee would be ready in the second half of this year. Is the committee on track to release its report shortly?

Madam, the committee is still proceeding with its work and we do hope to finish the work towards the end of the year. Like I said, the work is a complex one because it involves discussing with many different stakeholders.

The workspace for platform workers is a very diverse one. There are different types of archetypes and profiles of people who are engaged in platform work. Platform companies also serve a diverse segment of consumers. So, I hope Members will give us the space and the time to continue to engage widely and discuss with the stakeholders.

8 Dr Lim Wee Kiak asked the Minister for Health regarding exceptional cases where patients urgently require drugs that are not within HSA’s approved list (a) how can the Ministry assist these patients who require non-standard treatment options to qualify for claims under the current health insurance policy; (b) whether the Ministry will consider setting up a national body where medical experts can be swiftly mobilised to consider and approve these requests; and (c) how often does the list of approved drugs get updated to keep pace with medical advances.

9 Mr Yip Hon Weng asked the Minister for Health (a) how many cancer patients will be affected by the new policy that limits insurance coverage for outpatient cancer drug treatments; (b) what is the recourse for patients who do not respond to these drugs; and (c) how often will the list of drugs be reviewed to ensure that it stays abreast with medical developments, especially new and rare cancers.

Mdm Deputy Speaker, with your permission, may I address Question Nos 8 and 9 together, and also Question No 71 for oral answer and Question No 41 for written answer filed by Mr Gerald Giam for the Sitting on 4 July, please?

Please proceed.

The current claim limit that is applied to all types of cancer drugs gives pharmaceutical companies little or no reason to lower prices and takes away the Government’s negotiating power. This has resulted in an unsustainable rise of cancer drug prices. If left unchecked, cancer drugs will, eventually, be unaffordable for the majority of cancer patients.

The changes, focusing MediShield Life and Integrated Shield Plans (IPs) to cover a Cancer Drug List (CDL) of clinically-proven and more cost-effective cancer drug treatments, improve affordability in two ways.

First, it provides the incentive for pharmaceutical companies to price their drugs more reasonably so as to benefit from financing coverage. Since we announced the changes in 2021, we have managed to secure an average price reduction of 30%. For some cancer drugs, the price reduction achieved was over 60%. The lower prices have made more cancer drugs cost-effective, enabling 66 more cancer drugs to be listed for subsidy.

Second, nudging utilisation of cancer drugs towards proven and cost-effective care will ensure that treatment costs for the broad majority do not rise unsustainably as a result of liberal use of very expensive and novel cancer drugs. These changes will benefit thousands of patients and improve affordability of more cancer drugs for all Singaporeans.

The CDL is extensive. We already have a panel of experts, comprising senior public and private oncologists and haematologists across various specialisations, who recommend new treatments for inclusion into CDL. This panel has approved treatments that cover multiple lines of therapy, beyond first line treatment, as well as rare cancer treatments to CDL.

This has allowed us to include around 50 more treatments into CDL since it was announced in August 2021. The current CDL covers some 90% of treatments used in the public sector and is updated every four months to keep up with medical advancements and latest clinical evidence.

However, we note that there could be exceptions where patients do not respond to treatments on CDL and their doctors may exercise clinical discretion to prescribe non-CDL treatments based on evidence of benefit. In these cases, doctors must be prepared to justify their clinical decisions to patients and their colleagues. Doctors must also counsel the patient on its risks, efficacy and costs so that the patient may make an informed choice. Some patients may still be covered for such non-CDL treatments by their private insurance, such as riders or critical illness plans.

In this transitional period, MOH will put in place measures for the small number of exceptional cancer patients who require non-CDL treatments and are affected by the policy changes. Private patients who have difficulty affording their bills may opt to be transferred to subsidised care at public healthcare institutions. Once patients are in subsidised care, they can benefit from more affordable drugs and medical fees, as well as access a range of financial assistance, such as MediFund. All patients can also appeal to use more MediSave.

Dr Lim Wee Kiak.

I would like to thank the Senior Parliamentary Secretary for the reply. I would like to ask, since we know that once the policy is changed and companies can drop the drug price by as much as 60%, is this not proof of profiteering? What actions are taken against this company for profiteering?

My second supplementary question is on patients who have rare cancers and are requiring those drugs which are not on the list currently. Is there a mechanism for them to appeal for them to be added on to the ad hoc list? And what is the timeframe for that?

I thank the Member for the question. Actually, the whole intent of this is to make sure that cancer drug prices are lowered and the best safeguard against profiteering is competition. In this regard, the Agency for Care Effectiveness (ACE) uses the established Health Technology Assessments to evaluate the relative value of new drugs, compared to existing standards of care. In parallel, ACE also conducts value-based pricing negotiations to ensure drug prices are competitive.

So, the financing changes that we made have been a major step to incentivise drug companies to price drugs competitively so that their drugs would be eligible for subsidies, MSHL and IPs. And because of this, we have seen the promising results that I mentioned earlier.

In respect of the Member's concern with regard to profiteering, actually, the Competition and Consumers Commission of Singapore also has levers to investigate all reports of anti-competitive behaviour and will take action against instances of anti-competitiveness.

The Member has also asked about the process and I would like to take some time to explain the assessments made by ACE I mentioned earlier. ACE assesses the clinical and cost effectiveness, using published methodologies that are in line with international best practices. And it draws on clinical, epidemiological and health economic data, compare the incremental costs and incremental improvements in health benefits of the treatment relative to the existing standard of care.

As part of this process, ACE consults MOH's Oncology Drugs Sub-Committee comprising local clinical experts from the public and private sectors to ascertain the clinical value of medicines and evaluation and the appropriate use of cancer therapies based on clinical evidence.

The Member also asked about the timing. Actually, the process has been put up on ACE's website. Drug companies that wish to participate in this process would be able to time their applications accordingly. The key process deadlines have been put up online and it usually takes about five months from submission until the funding decision. Funding implementation, typically, occurs within four to six months after a funding decision has been made. But with timely evidence submission, high quality of clinical evidence and reasonable pricing proposals from the pharmaceutical companies, these will help to expedite it.

Since January 2021, ACE has also established a new process in consultation with the pharmaceutical industry to enable cancer treatments to be evaluated for subsidy and MediShield Life, in parallel with HSA's regulatory approval process. Under this process, companies will be responsible for providing evidence submission to ACE, in parallel with HSA's regulatory approval process. All these would be done in tandem. This will bring funding decisions upstream, close to the point of market entry. So, they can do it ahead of time. By the time it comes in, we would already have allowed for it to be put in. This minimises the time gap between HSA registration and inclusion into the drugs list. I hope this addresses the Member's questions.

Mr Yip Hon Weng.

I thank the Senior Parliamentary Secretary for her reply. I have two supplementary questions.

First, how does MOH ensure that insurers do not shortchange policyholders who have been dutifully paying their dues and what recourse do policyholders have to appeal against decisions from insurers?

Second, are there guidelines on the premiums that insurers charge and what is the oversight on this? While patients are allowed to change insurers, many, often, have little choice in changing insurers due to the coverage of existing conditions and risk loading.

Actually, there is an existing regulatory oversight. MOH and MAS work closely together in exercising regulatory oversight over Integrated Shield Plan (IP) insurers. IP insurers have to seek approval from MOH for any changes in terms and conditions and MAS will take action against insurers if they do not pay claims in accordance with the policy terms and conditions that they have agreed to or if there is any unfair handling of claims.

IP premiums are set, reviewed and adjusted by insurers based on commercial and actuarial considerations. Insurers may adjust premiums, taking into account the impact of the changes and their own claims experience and other factors. So, insurers have an incentive to help keep premiums competitive to attract and retain their policyholders. So, we hope all these changes, in the long run, will help to moderate premium increases.

I also realised that I have not really addressed Dr Lim Wee Kiak's question about how patients can appeal for drugs to be considered for inclusion in CDL. They can refer the drug to ACE for ACE to make that assessment. We also note that, in the process where there are private patients, there is that opportunity for them to have direct referral to the public health institutions and this is where the assessment can also be made in respect of the appropriate treatment. There will also be subsidies available to that patient.

Mr Gerald Giam.

Thank you, Mdm Deputy Speaker. I am not sure if my question on the introduction of a National Cancer Care Appeals Board was answered. I understand from the ACE website, which the Senior Parliamentary Secretary just referred to, that it takes about 10 to 11 months from the time the pharmaceutical firms submit their pre-submission form to ACE to the time the Drug Advisory Committee (DAC) meets. However, for individual cancer patients, for whom time is of the essence, anything more than one week may be too long to wait for a decision on a drug subsidy approval. Can we, therefore, have a National Cancer Care Appeals Board which can make rigorous yet speedy decisions to subsidise drugs for these patients to get the life-saving drugs that they need? DAC can then take the necessary time to review the drug for inclusion into the Cancer Drug List to benefit patients at the national level.

Secondly, has MOH modelled out how many patients per year will be adversely affected by these changes to the insurance schemes and how much in cost savings are expected and what is the price in human lives that MOH is prepared to accept in order to achieve these cost savings?

I thank the Member for the question. First off, we need to appreciate that when doctors actually make recommendations for treatment, it has to be on the basis of evidence. All new and existing patients should be properly advised of the proven efficacy, side effects and costs of the available treatment options, including the financial implications of receiving a treatment that is not on CDL at the earliest opportunity.

So, we appreciate that by creating this drug list, there may be some patients who may require drugs outside the drug list and may face difficulties. This could include patients who already have tried drugs on CDL and found them ineffective for patients with contraindications to the drugs on the cancer list. But there needs to be evidence of efficacy of the prescribed drug outside CDL. I just wanted to make that clear.

In respect of those patients on a case-by-case basis, because what happens is that we have provided this lever where there is, actually, a direct referral to the public healthcare institutions (PHIs). They can, therefore, get discretionary funding that is available to them, thereby getting treatment at a far lower cost. It is through this referral that the doctors in the PHIs will then be able to assess the appropriate treatment that is meant for the patient.

The other question is related to the number. The number of patients who will be affected by the cancer drug treatment changes is actually constantly fluctuating. As patients drop in and out of treatments and, given the ongoing work, we are, actually, expanding the treatments on CDL.

Nonetheless, we have looked at this and CDL actually covers around 90% of cancer drug treatments used in PHIs. And we have already said that, if they face difficulty and require non-CDL treatments, if they face difficulty affording the drugs, they can be referred to PHIs and they can get discretionary financial assistance.

I know this is something that is challenging for patients who are facing these situations. But we need to look at the bigger picture and, that is, to reduce the ever-increasing drug prices. With the moves that we have made, we have seen a reduction and this is something that we need to continue with. We have to help those who are not able to be covered under the list as much as we can. We also then have to monitor the process as we go along to see and ensure that, in the long run, it will actually benefit more Singaporeans when all the drug prices can be moderated and are lowered because there is an incentive for the pharmaceutical companies to lower their prices.

Ms Ng Ling Ling.

Thank you, Mdm Deputy Speaker. I want to thank Senior Parliamentary Secretary Rahayu Mahzam for her replies and explaining the ACE process on how cancer drugs are evaluated, negotiated, because bringing the prices down really helps our Singaporeans. I wanted to ask whether MOH will consider extending the negotiated price – or maybe more of a clarification – whether the negotiated price is also extended to benefit the private healthcare providers. This is because ACE does tap on a committee that comprises public and private oncologists and, as parliamentarians, we would all know of a resident or someone we love who has cancer and is battling cancer and seeking private healthcare for reasons that we all understand, because they want to get well. So, I just wanted a clarification whether that negotiated price also benefits our private healthcare providers to help our Singaporeans battling cancer.

I thank the Member for the question. The challenge is, private clinics have varied business models and pricing arrangements. So, the feasibility of applying negotiated drug prices to the private sector really depends on whether price controls can be introduced to ensure cost-savings are passed on to the patients. This is also subject to the agreement by the drug companies. This is something that will require further study. We will take this back and look into it and have extensive engagements with the industry.

10 Mr Zhulkarnain Abdul Rahim asked the Minister for Home Affairs (a) whether there are adequate safeguards in place when the Police interview young suspects; and (b) whether the Ministry can provide an update on the review of the Appropriate Adult Scheme for Young Suspects (AAYS).

The Police interview suspects to find out what happened. It is not unusual that some suspects may be less than forthcoming during interviews. Interviewers have to assess the situation and decide on the questions to be asked. It is accepted that young suspects may require more support during interviews. Thus, as far as possible, the Police will interview young suspects in a Police station, away from their school or place of employment.

Should interviews need to be conducted at schools or places of employment, the Police will avoid drawing unnecessary attention or causing embarrassment to the young suspect. For instance, the Police may appear in plainclothes and use unmarked vehicles.

Young suspects are interviewed by the Police in the presence of an independent and trained volunteer under the Appropriate Adult Scheme for Young Suspects (AAYS). The current age threshold of AAYS is 16. Thus, Appropriate Adults (AAs) will be activated for all suspects under 16.

From April 2023, we will be increasing the age threshold to include 16-year-olds and 17-year-olds and will target to complete the expansion by October 2023. This can only be done when the number of AA volunteers is increased and we are now working to build up the AA volunteer pool.

The Police will notify parents on the arrest and investigation of young suspects at the earliest time possible, unless doing so could jeopardise investigations.

Mr Zhulkarnain Abdul Rahim.

Thank you, Mdm Deputy Speaker. I am grateful to the Minister of State for the explanation. Back in November 2021, I asked a Parliamentary Question on young suspects and the measures. I am heartened that the AAYS age threshold would be increased from 16 to 17, come October 2023. I have a question on the limited pool of AAs and how we can perhaps increase it. Would the Ministry consider, by default, having parents as AAs?

Secondly, in terms of training of AAs, whether we can look into enhancing their training, especially with the soon-to-be-established Public Defender's Office (PDO), where the rights of young suspects can further be briefed by PDO, or AAs can be further trained by PDO in the future.

I thank the Member for his supplementary questions. AA is a neutral and independent party who provides emotional support to the interviewees and facilitates communication. So, AA would thus need to be an independent person. We are definitely looking to increase the number of volunteers in the scheme. The Member had suggested parents. The parents of the suspects may have conflict of interest, or may be perceived to have a conflict of interest. So, we will not allow parents of the suspects themselves to be the AA in those circumstances. But where there are parents who want to volunteer as an AA to suspects who are not related to them, then, obviously, this is something that we would encourage.

With regard to training, currently, the volunteers, the AAs, go through structured training. They undergo a one-day training session which is conducted by the Singapore Children's Society. And the training is supported by the Association of Criminal Lawyers of Singapore, the Law Society of Singapore and the Attorney General's Chambers.

On the point about whether or not we should involve PDO, currently, where the suspects are concerned, we use a pamphlet of rights to inform all suspects of their rights prior to interviews. And the pamphlet is available to all Police stations. They are in very noticeable locations, in prominent areas, and this helps to standardise the way that suspects are informed of their rights during the investigation process.

Where suspects want to further obtain legal assistance or advice on their rights, this can be done through PDO or their own lawyers at various points of the investigation process, except that the lawyer will not be permitted to attend during the interview. So, I would just like to assure the Member that there is structured training made available to volunteers, the AAs, and that the young suspects will have access to help should they require it during all points of investigation.

11 Dr Lim Wee Kiak asked the Minister for Health with regard to the unprecedented spread of the monkeypox virus (a) what measures are in place to detect the disease at Singapore’s borders; (b) should the monkeypox virus spread to Singapore, what other measures will be activated, in addition to contact tracing and quarantine; and (c) as some symptoms of the monkeypox virus infection are similar to those of COVID-19 and dengue infections, whether guidelines will be provided to doctors and the public on how to stay vigilant for symptoms of this disease.

12 Dr Lim Wee Kiak asked the Minister for Health whether there is information on which demographic is more vulnerable to critical illnesses caused by the monkeypox virus.

13 Ms Ng Ling Ling asked the Minister for Health in light of emerging communicable diseases, such as monkeypox and tuberculosis (a) how is the Ministry planning to step up preventive measures to control the spread of such infectious diseases within the population; and (b) whether the Ministry will consider encouraging limited vaccination for the more vulnerable groups, such as frontline staff and elderly residents.

14 Dr Wan Rizal asked the Minister for Health (a) whether the Ministry can provide an update on the prevalence of monkeypox; and (b) what are the Ministry’s plans to (i) mitigate the spread of the virus and (ii) educate the community on its risk factors and prevention.

Mdm Deputy Speaker, may I have your permission to take Question Nos 11 to 14, please?

Yes.

Madam, the issues raised in these four Parliamentary Questions (PQs) were answered in the combined answer that was provided yesterday which has been circulated to Members. But I am happy to take any supplementary questions that Members have today.

Any questions? Ms Joan Pereira.

Thank you, Mdm Deputy Speaker. May I know what are the measures to prevent monkeypox from spreading and whether the Ministry would consider encouraging smallpox vaccination as a preventive measure, as they are thought to be about 85% effective against monkeypox infection?

Madam, as explained in the answer yesterday, hygiene measures, contact tracing of close contacts – all of which rest upon early detection and diagnosis – are the key measures to prevent the spread of monkeypox, which is a self-limiting illness, where patients recover and it largely does not cause serious illness.

Also, the issue of the smallpox vaccine was addressed in the answer yesterday. It is up to 85% effective in preventing monkeypox, but has significant side effects. And for the general population, the risks of complications outweigh the benefits because the general population is at low risk of being infected. So, we would reinforce personal responsibility to avoid high-risk activities, especially when symptomatic, and practising good personal hygiene, all of which remain very effective at reducing the risk of transmission in the general population.

Dr Lim Wee Kiak.

Monkeypox has been endemic in Congo and certain parts of Africa. But what is the main factor responsible for this very elusive viral disease starting to spread to Europe as well as, now, to Asia? Although the current risk assessment by MOH of monkeypox is that it is still low to the general public, with the ongoing transmission, is there a risk that this virus may mutate into something more like its own cousin, smallpox, which had resulted in higher morbidity as well as mortality?

Last of all, how is MOH preparing for this? Is smallpox vaccination now available in Singapore? If not, when will it be made available, especially to vulnerable groups as well as healthcare workers who are dealing with this disease?

Mdm Deputy Speaker, I thank the Member for the questions. With respect to what is now the main factor for the spread, I would point out that it is spreading very slowly. This is not COVID-19. There was a total of 3,411 cases, I think, the last time WHO reported on this around the world in 49 countries. We only had one case here in Singapore.

The main reason for why it spreads to certain individuals is a combination of age as well as prolonged and extensive physical contact. Would it mutate like any virus? The Member would be aware that there is always a possibility for mutation. These are not things that can be predicted ahead of time.

How are we preparing for this? The surveillance around emerging infectious diseases within our healthcare system applies to a variety of diseases and would apply to monkeypox as well.

Smallpox vaccination is available in Singapore and can be used, for example, for healthcare workers who are at high risk or laboratory personnel who are handling such pathogens.

Mr Zhulkarnain Abdul Rahim.

Thank you, Mdm Deputy Speaker. I filed a PQ yesterday and it was answered in respect of the monkeypox situation. Just to clarify, in the answer, the Senior Minister of State mentioned that a small percentage of those can fall seriously ill, and 99% of the cases were men and have been self-identified as men who have sex with men. That is the data from the current multi-country outbreak indicated in Europe. So, my question is, given the risk factors involved, what would be the advisory and efforts for us to reach out to groups of the community that are more susceptible than others?

Mdm Deputy Speaker, I thank the Member for his question. There is no current evidence to suggest that the disease is sexually transmitted. And as I have mentioned earlier, it is prolonged and extensive physical contact. So, while the reported population does appear to be disproportionately men, and men who self-identify as men having sex with men, there is no specific advice for that community over and above the general advice around not coming into contact with persons who are demonstrating the signs of infection, taking appropriate steps yourself if you have signs of the infection and seeking medical care, isolating yourself to prevent further spread, and then participating in the contact tracing process.

As with all similar diseases, the personal responsibility around hygiene and your own state of health continues to apply and is extraordinarily important in preventing further spread of this disease.

15 Ms Nadia Ahmad Samdin asked the Minister for Health with regard to the recommended strategy by the Interagency Taskforce on Mental Health and Well-being (a) whether the Government will consider elderly mental health as a separate pillar given the increasing proportion and vulnerability of the demographic; and (b) what outcomes and indicators are being set for the work of the Taskforce.

16 Dr Wan Rizal asked the Minister for Health whether the Ministry can provide an update on the Interagency Taskforce on Mental Health and Well-being, especially on its plans to improve mental health literacy among citizens and create an inclusive society for persons with mental health conditions.

17 Ms Tin Pei Ling asked the Minister for Health (a) what recourse is available to caregivers of elderly care recipients when the latter exhibit self-harm or aggressive behaviours which require emergency interventions; (b) whether the restructured hospitals, including the Institute of Mental Health, are equipped to handle these cases; and (c) how can geriatricians and social service agencies play a role in such case management.

Mdm Deputy Speaker, may I have your permission to address Question Nos 15 to 17 in the Order Paper and written Parliamentary Questions (PQs) filed by Mr Christopher de Souza1,2 for the Sitting on or after 6 July please?

Yes, please proceed.

Madam, the Interagency Taskforce on Mental Health and Well-being has conducted a review of existing mental health and well-being programmes and developed preliminary recommendations to support the mental health needs of all members of society, including youths and seniors. The task force's recommendations are aimed at creating a caring and inclusive society, where all can seek help and be supported to achieve mental health and well-being, and can participate meaningfully in our society.

The task force is currently embarking on a consultation exercise from 30 May 2022 to 7 August 2022 to seek the views of the public on its preliminary recommendations. The findings from the public consultation will enable the task force to refine the recommendations and develop a national strategy on mental health and well-being. Following this, indicators will be developed to measure the implementation progress and effectiveness of the strategy.

The task force has proposed 12 preliminary recommendations in three focus areas. The first focus area is improving accessibility, coordination and quality of mental health services. The second is strengthening of services and support for youths' mental well-being. And the third is improving workplace well-being measures and employment support.

Some of the recommendations include designating first-stop touchpoints for easier wayfinding of mental health services, standardising process and systems between social and healthcare providers for better coordination of care and equipping frontline service providers with the relevant mental health knowledge and competencies to support their clients.

For our youths, we want to promote the positive use of technology and social media and propose to develop a parents' toolbox to enable parents to better support their children's socioemotional well-being.

At the workplace, we propose to improve mental well-being support systems and work-life harmony strategies and equip employers with knowledge on supporting persons with mental health needs.

In addition, there is a need to improve access to vocational training and increase job opportunities for persons with mental health conditions.

To promote mental health awareness and literacy in the population, the Health Promotion Board (HPB) launched the national campaign in October 2021 titled "It’s OKAY to Reach Out". The campaign aims to normalise discussions about and increase understanding of mental health issues. The campaign encourages us to reach out for help and, where possible, reach out to provide help. The campaign includes community dialogue sessions, activity-based workshops and educational webinars where participants learn more about mental well-being and equip themselves with practical coping tips as well as how to reach out to seek support and support others.

To complement this national campaign, HPB also rolled out MindSG, an online portal featuring resources curated by mental health experts to provide Singaporeans with credible, reliable and convenient access to important relevant content. HPB will be launching the second instalment of the "It’s OKAY to Reach Out" national campaign in the coming months.

There are existing mental health services to cater to the needs of persons with mental health conditions and their caregivers. Caregivers of elderly care recipients, in particular, those who exhibit self-harm or aggressive behaviours, can call the Institute of Mental Health (IMH)'s 24-hour Mental Health Helpline at 6389 2222 to seek help in managing crisis situations. Where necessary, IMH will also make home visits to provide crisis interventions.

When the acute psychiatric condition is stabilised, the elderly care recipients may be referred for follow-up at the outpatient clinics at the restructured hospitals where their care would be overseen by healthcare professionals trained in mental health, including psycho-geriatricians.

In the community, the Agency for Integrated Care (AIC) has worked with social service agencies to set up community intervention teams which can provide further support for these elderly care recipients through psychosocial therapeutic intervention and counselling.

Ms Nadia Ahmad Samdin.

Thank you very much. I have two supplementary questions. The first is on my question about the focus on the elderly. I am very appreciative of the three focus areas as well as the 12 recommendations that we are seeking consultations on. However, in 2020, we saw the highest number of elderly suicides since 1991. While in 2021, the number has gone down slightly, it remains to be seen what the future might hold.

In any case, the vocabulary around elderly mental health is much less socialised. Many still consider it very taboo and I think —

Ms Nadia Ahmad Samdin, please ask your question.

Yes. Sorry. So, my question is, will the task force consider focusing, as a special focus area, on the elderly's mental health and their caregivers as well?

The second part is, I appreciate focus area 1, but I think we need to be realistic that in order to have better access, quality and coordination of these services, we also need to have more resources because AIC and other agencies tend to be really overstretched. All the good work that is done in support —

Ms Nadia Ahmad Samdin, ask your question, please.

Does the task force plan on providing more manpower and resources, other than just raising literacy and providing education?

I thank the Member for her questions. Mdm Deputy Speaker, if I may address the second one first. The task force is not planning only on raising literacy and providing education. We are looking at the entire strategy and the way in which we approach the deployment of resources, training of professionals, referral of clients across the ecosystem as well as the relationship between the healthcare and social care parts of our mental health infrastructure.

Within that space, there will be a need to look at the allocation of resources and the deployment of personnel. But I think we have to start at getting the strategy and systems in place first. Then, the task force will move on to other subtasks following on from that. Indeed, it is important to consider the needs of and support for the elderly who have mental health illnesses and those of their caregivers.

I would make three broad points.

The first is that for the seniors' mental health, we need to look at it a little bit differently partly because they often have concomitant, associated chronic health conditions. Both need to be dealt with together, holistically. So, it is a combined mental and health approach. That is what the professionals have been doing already.

Which is the second point, that is, that there are resources that are available, there are professionals working in this space. I mentioned the psycho-geriatricians and the other teams in my earlier answer. Another example would be the "Live Well, Age Well" programme, which is funded by MOH and jointly implemented by HPB and the People's Association, to augment existing seniors' programmes with a focus on mental well-being. More than 13,000 unique seniors participated in the programme in 2021.

The third point is that some of the efforts that we are making around the larger strategy of mental health will directly improve access to, and services for, the elderly, for example, the extent to which we are looking at the community care providers to bring some of these services closer to home, including, for example, eldercare centres.

Dr Wan Rizal.

Thank you, Mdm Deputy Speaker. I thank the Senior Minister of State for sharing the recommendations.

I hear the efforts by the interagency task force in reaching out and getting this. My question is, for those who are not reaching out, are there plans to increase these nodes or networks to allow them to be, in a way, screened or detected, so that we can prevent issues in terms of mental health?

Mdm Deputy Speaker, yes, we do want to increase the awareness of the need for mental health screening among the healthcare professionals and social care professionals that are working in this space, as well as to provide them with tools to do the screening and then, the onward referral. So, that is very much part of our strategy.

Ms Tin Pei Ling.

I thank the Senior Minister of State. I would like to ask about IMH, which is usually the first port of call for the elderly exhibiting self-harm and aggressive behaviours, possibly induced by certain types of dementia, for example. Caregivers are often at a loss. Apart from calling the hotline for remote assistance, sometimes, they will choose to go to IMH. I would like to ask whether there have been instances where they had to be turned away or is the capacity at IMH sufficient to deal with such cases?

Related to that, sometimes, caregivers may feel that it is more expeditious to send the elderly to a nearby restructured hospital because, if there is self-harm, there may be personal danger. They may feel that it is safer to send the elderly to those settings. So, are restructured hospitals equipped to support such instances?

Madam, I thank the Member for the questions. The issue of dealing with an elderly patient who has a mental health condition and who then has a caregiver requiring assistance to deal with that situation, there is not a single solution – just as there is not a single archetype or a single set of challenges.

Indeed, the helpline is there for advice as well as to coordinate onward referral. Indeed, the family, the caregiver, can bring the senior to IMH if that is where they think the mental health condition is best dealt with and they can bring them to the restructured hospitals which are also equipped to deal with vulnerable persons, persons who are entirely dependent and people with acute mental health conditions deteriorating. The restructured hospitals and their emergency departments are equipped.

At the beginning, the Member talked about IMH being the first port of call. One of the things that we are looking at within the task force is to perhaps shift that perception that IMH has to both be the first port of call as well as the only port of call. I hope that is not what she was characterising the situation as.

We really do need a wider surface area, a wider spread of nodes, networks, the community organisations, the healthcare community as well as the social care community to participate in that response to support the mental health needs of our seniors. That is part of what the task force is going to try and do.

18 Ms Joan Pereira asked the Minister for Trade and Industry whether the Government will consider setting up a cooperative to supply petrol to help moderate the costs of fuel.

19 Mr Don Wee asked the Minister for Trade and Industry whether the Ministry will regulate petrol and diesel pump prices in view of their escalating prices amid record profits for oil companies.

Mdm Deputy Speaker, can I have your permission to take Question Nos 18 and 19 together?

Please proceed.

Global crude oil prices have risen significantly, driven by higher demand as economies reopen following the pandemic as well as constrained supplies due to sanctions against Russia and under-investment in fossil fuel production over the years. Fuel prices in Singapore have also risen in tandem.

In response to Ms Joan Pereira's question, retail pump operators, including cooperatives, which wish to supply fuel to independent motorists will need to operate at sites that are suitable for such purpose, including the need to comply with prevailing environmental, fire safety and other requirements. Such sites are identified and then allocated via competitive tender from time to time. So, a cooperative may not be able to offer lower pump prices unless they can secure lower-cost supplies.

In response to Mr Don Wee's question, regulating or capping petrol or diesel pump prices will distort the market and serve to benefit car owners, especially those who consume more, who may include more well-to-do users. It will also reduce the incentive for Singaporeans to switch to more energy-efficient modes of transport.

Instead, the Government's approach is to ensure that we have a competitive fuel retail market.

I want to assure all Members and the House that the Competition and Consumer Commission of Singapore (CCCS) monitors the fuel market closely and will not hesitate to investigate the practices of the retail operators. We will take firm enforcement actions against any anti-competitive behaviour.

I would also like to encourage motorists to make good use of the Fuel Kaki website, developed by the Consumers Association of Singapore (CASE), to compare the effective price of petrol and diesel across retailers, including the various discounts and rebates being offered.

In addition, the Government is also providing targeted assistance to the groups hardest hit by rising fuel costs.

Last month, Deputy Prime Minister Lawrence Wong announced support measures for self-employed persons whose livelihoods depend on their vehicles. Eligible taxi main hirers and private hire car drivers will receive a one-off relief of $150 next month. Drivers of combi buses and limousines who are members of the National Private Hire Vehicle Association, as well as delivery drivers and delivery motorcycle riders who are members of the National Delivery Champions Association can apply for a one-off cash relief of up to $300 next month under the NTUC U FSE Relief Scheme 2022.

The Government will review the fuel retail market to determine if there are other ways to alleviate the pressure on fuel prices. We will continue to monitor the situation and will not hesitate to provide more assistance if required.

Mr Don Wee.

Mdm Deputy Speaker, I am glad to know that MTI sees the need for a review of the fuel retail market. May I know what are the aims of this review and how will the review ensure that the fuel prices are representative of the global competitive fuel market?

I want to thank the Member, Mr Don Wee, for his two supplementary questions.

The MTI review will cover how the global developments as well as the practices of our fuel retail operators have led to the pricing trends seen so far. To support this study, CCCS has gotten in touch with the retail fuel operators for data on the fuel price movements.

I want to use this opportunity to assure everyone in the House that the Government continues to ensure that we have a conducive and also competitive business environment where consumers have options, choices and are able to enjoy competitive prices.

At the same time, we will also maintain our efforts to make sure there is price transparency for our consumers. For instance, the Fuel Kaki website not only helps consumers to compare prices among the fuel retailers but also allows them to estimate the effective price per litre that they pay, after factoring in loyalty programmes and promotions.

If the findings of the review suggest that there are ways to improve the fuel retail market, I want to assure the Member that the Government is, certainly, open to consider all measures that could enhance the effectiveness of the fuel retail market. Rest assured that the Government is committed to ensuring a competitive fuel retail market.

[Pursuant to Standing Order No 22(3), written answers to questions not reached by the end of Question Time are reproduced in the Appendix, unless Members had asked for questions standing in their names to be postponed to a later Sitting day or withdrawn.]

[(proc text) Order for Second Reading read. (proc text)]

Deputy Prime Minister and Minister for Finance.

Mdm Deputy Speaker, on behalf of the Deputy Prime Minister and Minister for Finance, I beg to move, "That the Bill be now read a Second time."

The Stamp Duties (Amendment) Bill 2022 introduces the Additional Conveyance Duties for Trust, or ACD (Trust), and imposes stamp duty in relation to the renunciation of interest by a beneficial owner in a residential property that is held on a trust.

If passed by Parliament, the amendments in the Bill will take effect on 10 May 2022, that is, one day after the First Reading of the Bill. As the Bill amendments are market-sensitive, this approach brings the Bill into effect the day after its introduction.

Before I go through the key amendments in the Bill, let me explain the rationale for the changes.

Today, residential properties can be acquired directly or via equity interests, including unlisted shares, in Property Holding Entities, or PHEs. These refer to entities whose primary tangible assets are residential properties in Singapore.

Direct acquisitions of residential property are subject to Buyer's Stamp Duty, or BSD, and, where applicable, Additional Buyer's Stamp Duty or ABSD.

Acquisitions of unlisted shares in PHEs are subject to share duty of 0.2%, based on the purchase price or the value of the shares. Such acquisitions may also be subject to ACD, if the acquirer is a significant owner of the PHE or becomes one after the acquisition. A significant owner is a person who beneficially owns at least 50% of the equity interests or voting power in the PHE.

ACD was introduced in 2017 to address the stamp duty rate differential that previously existed between the direct acquisition or disposal of residential properties and the acquisition or disposal of equity interests in PHEs. ABSD and ACD thus operate together to promote a stable and sustainable residential property market in Singapore.

Madam, previously, when a residential property was transferred into a living trust with no identifiable beneficial owner of the property at the time of transfer, ABSD did not apply.

As trusts are complex instruments and serve diverse purposes, the Government carefully studied the issue before deciding on how transfers of residential properties into trusts would be treated. We then introduced Additional Buyer's Stamp Duty for Trust, or ABSD (Trust), on 8 May 2022, which took effect on 9 May 2022.

ACD (Trust) follows from the introduction of ABSD (Trust). With ACD (Trust), ACD may apply when equity interests in a PHE are transferred into a living trust, regardless of whether there is an identifiable beneficial owner of those interests at the time of transfer.

These changes ensure similar stamp duty treatment for transfers of residential property or equity interests in a PHE, whether acquired directly or through a trust.

If an Institution of a Public Character, or IPC, is the sole beneficial owner of the residential property or equity interests in a PHE transferred into the trust, among other conditions, the IPC can apply for a remission of ABSD (Trust) or ACD (Trust). Today, donations of immovable property or unlisted shares to IPCs qualify for stamp duty remission.

Let me elaborate on ACD (Trust), which is, primarily, provided for under clause 5 of the Bill.

To determine whether ACD (Trust) applies to the acquisition of equity interests in a PHE that are to be held on a trust for beneficiaries who are not identifiable beneficial owners, we will consider the equity interests in the PHE that are to be held by the trustee of the trust for those beneficiaries.

This consideration is only of the portion of interests to be held on trust for those beneficiaries. For example, if the trustee is to hold 10% equity interests in a PHE for identifiable beneficial owners and another 5% for other beneficiaries who are not identifiable beneficial owners, only the 5% equity interests will be considered to be held by the trustee for the purpose of determining whether ACD (Trust) applies. ACD (Trust) will apply in such a case only if the trustee is a significant owner with at least 50% equity interests or voting power in the PHE or becomes one after the acquisition.

In determining the trustee's significant ownership status, the equity interests that are beneficially owned by the trustee's associates will be treated as beneficially owned by the trustee. A treatment for associates already exists in the ACD regime to cover arrangements under which individual buyers act in concert to purchase equity interests, with the objective of avoiding ACD. Examples of associates include parents, children, spouses and associated companies.

In assessing whether an identifiable beneficial owner of equity interests in a PHE is a significant owner of the PHE, the interests beneficially owned by the beneficial owner and the beneficial owner's associates will be considered.

In the instance where a trustee holds equity interests for a beneficiary who is not an identifiable beneficial owner of those interests at the time of their transfer into the trust, such a beneficiary is considered an associate of the trustee in determining whether the trustee is a significant owner of the PHE. This definition of associates will be provided for in subsidiary legislation.

If ACD (Trust) applies, the trustee will be liable to pay ACD (Trust) at the prevailing ACD rates of up to 44% for buyers, comprising 40% ABSD and up to 4% BSD.

ACD (Trust) may also apply if the trustee, being a significant owner of a PHE, disposes of the trustee's equity interests that were held on trust for a beneficiary who is not an identifiable beneficial owner. If the trustee disposes of the equity interests within three years after acquiring them, the trustee will be liable to pay ACD at the prevailing ACD rate of 12% for sellers, equivalent to the highest Seller's Stamp Duty, or SSD, rate.

In addition, where the trustee transfers equity interests to a beneficiary of the trust who was not an identifiable beneficial owner of those interests at the time they were transferred into the trust, the beneficiary will be liable to pay the prevailing ACD for buyers if the beneficiary is a significant owner or becomes one after the transfer. Clause 3 of the Bill provides for this.

Next, clause 4 of the Bill introduces a new section 22C which imposes a statutory duty on the original beneficial owner of a trust residential property who renounces his or her interest in the property, such that this interest reverts to the settlor of the trust. The original beneficial owner is one who beneficially owns the property at the time it is transferred into the trust.

The original beneficial owner must give a written notice of the renunciation to the settlor and to the Commissioner of Stamp Duties within a specified period. If he or she fails to do so, and the Commissioner becomes aware of this, for example, through IRAS' regular audit, the Commissioner may give the notice to the original beneficial owner and the settlor instead. For his or her failure to give notice, the original beneficial owner will be liable, on conviction, to a fine not exceeding $1,000.

The notice, whether given by the original beneficial owner or the Commissioner, will be chargeable with stamp duty. Specifically, the settlor will be liable to pay BSD and, where applicable, ABSD. If the interest in the trust residential property is renounced within three years after the original beneficial owner first has beneficial ownership of the interest, the original beneficial owner will also be liable to pay SSD.

For any duty paid late or not paid, the original beneficial owner or the settlor will have to pay a penalty of up to four times the duty payable, which is the penalty under the current Stamp Duties Act.

This treatment for the renunciation of interest by an original beneficial owner will ensure that where the beneficial ownership of a trust residential property reverts to the settlor, the settlor would have to pay stamp duty, similar to if he or she had acquired the property directly.

Clauses 8 and 9 make transitional provisions to modify the application of the Bill to matters occurring between 10 May 2022 and the date the amending Act is published in the Gazette. On that, Mdm Deputy Speaker, I beg to move.

[(proc text) Question proposed. (proc text)]

Madam, this Bill introduces Additional Conveyance Duties for Trust (ACD (Trust)) and stamp duty treatment for the renunciation of interest in residential property held on trust. This will harmonise the stamp duty treatment for equity interests held in trust.

ACD (Trust), along with the introduction of Additional Buyer's Stamp Duty (ABSD) for transfer of residential property into a living trust – ABSD (Trust) – will help to raise tax revenues and go towards stabilising the property market.

I have two short clarifications to raise on this Bill.

First, in determining whether a grantee or grantor is a significant owner of a property holding entity, the new section 23 will take into account equity interests held by an associate of the grantor or grantee.

IRAS has provided on its website guidance on who is to be deemed an associate. This includes parties with an agreement or arrangement, whether oral, written, expressed, implied, to act together to acquire, hold or dispose of equity interest in, or to exercise votes.

Determining the existence of an oral or implied agreement or arrangement is a very fact-specific exercise that can be very time- and resource-consuming. It does not seem practical for IRAS to be undertaking such an assessment for every transaction. Can the Senior Minister of State clarify under what circumstances will IRAS undertake the process to determine the existence of any oral or implied agreement or arrangement?

Second, my clarification has to do with the related changes to the ABSD regime. The new ABSD (Trust) will only apply to instruments executed on or after 9 May 2022. It is not intended to apply retrospectively. There may be a case of a discretionary trust with no identifiable beneficial trust that was set up before 9 May 2022 where action was subsequently taken after 9 May 2022 to appoint assets to an identifiable beneficiary or to distribute assets to any identifiable beneficiary.

Can the Senior Minister of State clarify if the documents which arise after 9 May 2022 for such a trust is stampable under the new ABSD (Trust) regime? Madam, notwithstanding these short clarifications, I stand in support of the Bill.

Mdm Deputy Speaker, I would like, first, to declare my interest as an analyst looking at the real estate sector.

Mdm Deputy Speaker, when I first came across the term "stamp duties", I thought to myself, "that is a very expensive piece of stamp, compared to the 20- to 30-cent ones we stick on envelopes!" The second discovery was that, much to my disappointment, there was no physical adhesive stamp involved and all documents chargeable for stamp duty are "stamped" electronically or through the e-stamping system.

Most adult Singaporeans would have encountered, or rather, paid stamp duties at various points in their life, most commonly, when buying property. And, indeed, stamp duty is a tax on dutiable documents relating to any immovable property in Singapore and any stock or shares. These include the sale and purchase of property, lease or rental of property, mortgage of property and shares and shares transfers.

Beyond a revenue collection tool, stamp duty has also evolved to play a significant role as a macro-prudential tool to address risks in the property sector, especially in the past decade or so. This is the case not just in Singapore, but also in other jurisdictions, such as Hong Kong and Australia, as well.

From a simple Buyer's Stamp Duty, or BSD, this has now evolved to include Additional Buyer's Stamp Duty, or ABSD, and Seller's Stamp Duty, or SSD, for certain classes of property, such as residential and industrial properties. The differentiated rates of stamp duty have also been adjusted ever so frequently, most recently, in the December 2021 round of cooling measures where Singapore Citizens and Permanent Residents (PRs) buying their second and subsequent property and all foreigners and entities saw raised ABSD rates of 5% to 15%.

Nonetheless, as a tax that is levied on the market values of leases, properties and shares, stamp duty receipts are affected by the stage of the market cycle and, more importantly, should grow over time, in tandem with inflation. From around $1.26 billion in FY2000, stamp duty receipts have grown to $3.28 billion in FY2010 and $3.9 billion in FY2020. What is most impressive about this revenue source is that this growth over the past decade or so is despite the smaller Government Land Sales programme and a lower level of property market transactions today.

More recently, stamp duty receipts in FY2021 have turned out to be higher than what was initially projected by the Government, from an initial estimate of $4.25 billion in Budget 2021 to the revised estimate of $6.45 billion as of Budget 2022, to actual receipts of $6.76 billion, which, I believe, is a record high.

So, the positive surprise to stamp duty receipts worked out to be about $2.5 billion or 59% higher, as compared to what was initially budgeted for in Budget 2021. For FY2022, stamp duty receipts are expected to remain robust at $5.24 billion.

More broadly, I have also observed that actual operating revenue collections for FY2021 have turned out to be higher, as compared to what was initially budgeted for in Budget 2021 and even the revised estimate as of Budget 2022 announced earlier this year. Overall, operating revenues worked out to be $82.5 billion for FY2021, $5.8 billion higher, compared to $76.6 billion as initially budgeted for in Budget 2021 and $2.1 billion higher than the revised estimate of $80.4 billion as of Budget 2022.

This would already be more than sufficient to cover the $1.5 billion support package announced on 21 June. So, I do agree with the Government that there need not be a further draw from the reserves, as the package can simply be funded from the better-than-expected fiscal outturn in FY2021.

In fact, it also appears that while FY2021 operating revenues are higher by about $2.1 billion compared to the revised estimate presented earlier this year, both operating and development expenditures are lower by a combined $3.6 billion, which, I understand, is due to lower-than-budgeted spending on COVID-19 response measures as the Omicron variant turned out less severe than expected.

Combining higher revenues and lower expenses would mean that the Government's primary deficit improved by $5.7 billion, which, again, is more than sufficient to cover the recent $1.5 billion package. So, I do hope that the Government will stand ready to support Singaporeans should inflation and macroeconomic conditions deteriorate from hereon.

Returning to the proposed amendments to the Stamp Duty Act, I note that this Bill introduces the Additional Conveyance Duties for Trust and the stamp duty treatment for renunciation of interest in residential property that is held on a trust. MOF's announcement of the ACD (Trust) follows closely the announcement on the introduction of the ABSD (Trust) on 8 May 2022, which, I recognise, plugs a gap in the existing ABSD and ACD regimes.

I am reminded of a news article I read in The Business Times late last year, which reported that a certain crypto billionaire – well, at least back then – was at an early stage of buying a S$48.8 million Good Class Bungalow (GCB) as trustee for his nearly three-year-old child. This transaction apparently closed in March this year, but I wonder if headlines, such as this, prompted MOF to undertake a review of the ABSD regime?

More broadly, the practice of purchasing residential properties via trusts has been well documented since the implementation of the ABSD regime about a decade ago.

Not having to pay ABSD for what would have been a multiple property purchase, but with no access to financing were the key features of such purchases, in what some would call a loophole, albeit a well-publicised one.

While I recognise that this was born out of a periodic policy review, will the Minister shed light on what were the considerations and why is the gap only closed now and not years ago? What were the number and dollar value of such transactions which have made use of this gap in the ABSD regime, and was there a material increase in such transactions which prompted the MOF review?

That said, I view this development with a glass-half-full lens and it could even be seen as a form of wealth tax which has a targeted and narrow scope. With concerns that residential property prices have continued to be firm despite the December cooling measures and amid rising interest rate concerns, was the implementation of the ABSD and ACD (Trusts) meant to achieve a signalling effect to the market, particularly amid news just last month of how an individual acquired 20 units at Canninghill Piers, a luxury condominium along the Singapore River, for over S$85 million, despite the recently raised ABSD rates for foreigners in December last year?

With the introduction of ACD (Trust), as included in the Bill, I recognise that this will go hand in hand with the policy intent of ABSD (Trust), of which I am supportive. I am again reminded of news from yesteryears, when ACD itself first came into effect in March 2017. Unbeknownst to many, stamp duties on the transfer of shares in a company are only levied on net asset values, and at a mere 0.2%, significantly lower in rate and tax base, as compared to buyers' stamp duties and ABSD levied on the value of the residential properties themselves. Back then, there were several bulk sales of properties by developers via the sale of property holding entities, to avoid extension charges under the qualifying certificate, or QC, conditions for not completing the sale of all residential properties by certain deadlines. This loophole was, subsequently, closed with the introduction of ACD.

While I recognise the policy intent of QC and ABSD in ensuring developers do not hoard inventory, the current ABSD remission rules for developers, in particular, cause greater cyclicality in the residential market, arguably, as it imposes harsh ABSD penalties for failing to complete the sale of all residential units within the prescribed period. This would apply, regardless of whether the project has 2,000, 200 or 20 units to begin with, and could even have discouraged developers from triggering for what would have been our first master developer site in Kampong Bugis. As part of its periodic policy review, is MOF looking at reviewing the ABSD remission conditions for property developers to ensure greater stability in the property market?

Finally, I read with interest recent news in Australia, which highlighted that New South Wales is planning to give first-time home buyers a choice of not paying for upfront stamp duty but to replace this with an annual property tax which is paid over a period of time instead.

Stamp duties represent a not insignificant upfront cost for home buyers even in Singapore. Using the median resale price of a 4-room HDB flat in Sengkang of $510,000, stamp duties would amount to $9,900. While this may not mean much in percentage terms as compared to the price of the flat, in absolute terms, assuming one saves $500 a month, stamp duties could represent close to 20 months' worth of savings. Again, as part of a periodic policy review, would the Government consider such a move in reducing upfront property purchase costs, particularly with continuing momentum in increasing HDB resale prices, which are now up by a worrying 19% in the last 18 months alone? Notwithstanding my clarifications, I support the Bill.

Mdm Deputy Speaker, I support the Bill. However, the Government should have introduced this Bill at least 10 years ago, perhaps around 2011, when the Additional Buyers' Stamp Duty (ABSD) was introduced. We are disappointed that the Government has allowed loopholes in the ABSD scheme to be left open and exploited by some rich buyers of properties for so long.

We ask the Government to tell us the number and value of properties transferred to living trusts since the introduction of ABSD in 2011. And are there any properties being sold to realise a profit while under a living trust without paying the ABSD?

Given Singapore already has a tax regime that favours the rich, such tax loopholes are inexcusable and should be dealt with strictly. Thus, we propose two amendments to this new Bill.

Firstly, to apply this Bill retrospectively to all properties transferred to living trusts since the introduction of ABSD in 2011 and the ABSD be collected retrospectively, based on the ABSD rates at the time of the purchase.

Secondly, the ABSD should be charged at the point of transfer from now on, only to be refunded after the settler has passed away. This will eliminate the trouble of having to determine whether the living trust is genuine or not.

Mdm Deputy Speaker, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] Deputy Speaker, I support the Bill to levy stamp duty on living trusts. However, the Government should have introduced this Bill at least 10 years ago, around 2011, when the Additional Buyer Stamp Duty (ABSD) was introduced.

We are disappointed that the Government has allowed loopholes in ABSD to be left open and exploited by some rich buyers of properties for so long.

We ask the Government to tell us the number and value of properties transferred to living trusts since the introduction of ABSD in 2011. And are there any properties being sold to realise a profit while under a living trust without paying ABSD?

Given Singapore already has a tax regime that favours the rich, such tax loopholes are inexcusable and should be dealt with strictly. Thus, we propose two amendments to this new Bill. Firstly, to apply this new Bill retrospectively to all properties transferred to living trusts since the introduction of ABSD in 2011 and ABSD should be collected retrospectively, based on ABSD rates at the time of the purchases.

Secondly, ABSD should be charged at the point of transfer from now on, only to be refunded after the settlor has passed away. This will eliminate the trouble of having to determine whether the living trust is genuine or not.

Deputy Speaker, I support the Bill and propose that a thorough review of property market policies be conducted by the Government before Singaporeans are further disadvantaged.

(In English): Mdm Deputy Speaker, I support the Bill and propose that a more thorough review of the property market policies be conducted by the Government before Singaporeans are further disadvantaged.

Order. I propose to take a break now and I suspend the Sitting and will take the Chair at 3.50 pm.

Sitting accordingly suspended

at 3.30 pm until 3.50 pm.

Sitting resumed at 3.50 pm.

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

[(proc text) Debate resumed. (proc text)]

Order. Mr Don Wee.

Mdm Deputy Speaker, I declare that I am working with a Singaporean bank and I am a council member of the Institute of Singapore Chartered Accountants, but I do not handle any client.

I rise in support of the Bill. I am in favour of applying the Additional Buyer’s Stamp Duty (ABSD) of 35% on any transfer of residential property into a living trust, even if there is no identifiable beneficial owner at the point of transfer. As such trusts are instruments only available to the ultra-high-net-worth individuals who can afford to pay for the properties in cash, it is all the more important that we close the loopholes which may be exploited by such buyers to avoid paying ABSD.

Similarly, the introduction of the Additional Conveyance Duties (ACD) for Trust and the stamp duty treatment for renunciation of interest in residential property that is held on a trust, are welcomed, particularly during this period of widening income equality. I agree with the Ministry that such measures are necessary to promote an equitable and sustainable residential property market, where the high-net-worth individuals should not have a particular advantage in avoiding taxes which other property buyers would have to pay.

I have some questions.

Firstly, as the amendments only apply to instruments executed from 9 May 2022, what about a pre-existing trust if a trustee subsequently appoints assets to an identifiable beneficiary or distributes assets to any identifiable beneficiary?

Secondly, would the amendments apply to trusts incorporated overseas, for example, in a tax haven like British Virgin Islands? Investors may seek to transfer ownership of properties into such trusts to avoid the duties.

Since ABSD was introduced in December 2011, the Government has reviewed and raised the rates, to ensure a stable residential property market. Government has also made refinements, including introducing ACD, to ensure that the policies meet the objectives. However, based on feedback that we hear from time to time, the interest to find ways to avoid such duties will remain and even grow stronger. What will MOF do to ensure that ABSD and ACD will not be easily avoided? Mdm Deputy Speaker, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mdm Deputy Speaker, how much more are these stamp duties expected to contribute to our tax revenues? Lastly, may I ask the Minister what is the expected impact on Singapore as a wealth management hub? Would these changes reduce Singapore’s appeal to the ultra-high-net-worth group?

Senior Minister of State Chee Hong Tat.

Mdm Deputy Speaker, I thank Members Mr Louis Ng, Mr Louis Chua, Mr Leong Mun Wai and Mr Don Wee for speaking on the Bill and giving their support for the proposed amendments. Let me address their queries.

Madam, ABSD (Trust) is applicable if the residential property is transferred into a living trust on or after 9 May 2022. This applies for both pre-existing trusts and new trusts created on or after 9 May 2022. Living trusts are trusts that come into existence during the lifetime of the person who created it.

Mr Louis Ng and Mr Don Wee have asked whether ABSD (Trust) applies where: the transfer of residential property into a living trust took place before 9 May 2022, which is the effective date of ABSD (Trust); and there is a subsequent appointment or distribution of the property to a beneficiary of the trust on or after 9 May 2022.

Since the transfer of residential property took place before 9 May 2022, ABSD (Trust) does not apply, including to a subsequent distribution of the property by the trustee to a beneficiary of the trust on or after 9 May 2022.

Madam, Mr Louis Chua and Mr Leong Mun Wai asked why ABSD (Trust) and ACD (Trust) were not introduced earlier. Before the introduction of ABSD (Trust), transfers of residential property into a trust with an identifiable beneficial owner are subject to ABSD. So, the situation is not entirely as what Mr Louis Chua described and certainly not what Mr Leong Mun Wai said in his speech.

ABSD collected for transfers into trusts where there is an identifiable beneficial owner of the property was not separately tracked before 9 May 2022. It was instead accounted for according to the profile of the identifiable beneficial owner. So, we look at the profile of the beneficial identifiable owner to determine what is the ABSD that is due.

As I have explained in my Second Reading speech, ABSD would not apply before 9 May 2022 for trusts which do not have an identifiable beneficial owner. And this is what the proposed changes for ABSD (Trust) and ACD (Trust) seek to address – to ensure that ABSD and ACD continue to remain relevant as property market cooling measures, irrespective of whether trusts are used or not.

Trusts can be set up for different reasons, including for non-tax purposes, such as to provide for charitable giving. They can involve highly complex arrangements. Given the diversity and complexity of trust instruments, we decided to study the proposed changes carefully and do a thorough review, so that we could achieve our policy objectives while avoiding unintended consequences.

I am glad that all the Members who have spoken agree with the proposed changes. This will allow us to move forward to apply the new changes with effect from 9 May in the manner which I described earlier. [Please refer to "Clarification by Senior Minister of State for Finance", Official Reports, 5 July 2022, Vol 95, Issue No 64, Corrections by Written Statements section.]

It is important for us to also remember that when we implement some of these changes, we also have to bear in mind how they will fit in with our overall system of governance and rule of law. Mr Leong Mun Wai mentioned that we should – if I heard him correctly – retrospectively apply some of these changes to previous transfers, previous transactions. I think it would not be fair or appropriate for us to do that – to apply these changes retrospectively – because this will undermine the rule of law and it would also affect the confidence that the public and businesses have in the certainty that Singapore offers.

Mr Leong Mun Wai also mentioned whether we could refund ABSD only when the creator of the trust or the settler has died, again, if I heard him correctly. Madam, we collect fully, upfront, at the point of transfer of the property into the trust. That is what we would do. So, we actually collect the full amount upfront and we only refund when certain conditions are met, and you would have to apply. So, this, actually, is even better than what Mr Leong Mun Wai mentioned, which is to only refund when the creator or the settler has passed away.

Importantly, Madam, we also have to take a look at what is our overall tax and transfer system. So, I do not agree with what Mr Leong Mun Wai said that our tax and transfer system benefit the rich. That is not true.

Overall, our tax and transfer system is fair and progressive and, in fact, the Government has been raising asset-related taxes repeatedly. We did this in Budget 2010, 2013, 2018 and, more recently, in 2022. In Budget 2015 and Budget 2022, we also raised the income tax for higher income earners.

So, overall, our system of taxes and benefits is a fair and progressive one. It is one where everyone contributes but those who have more will pay more, contribute more than what they receive in terms of benefits. It is a fair and progressive system.

Madam, Mr Louis Ng asked about how IRAS determines the existence of an associate relationship between parties with an oral or implied agreement or arrangement to acquire, hold or dispose of equity interests or to exercise votes in a property holding entity. The associate relationship Mr Louis Ng refers to is part of the current definition of "associates" under the existing ACD regime and it is not an amendment that is being proposed in this Bill.

I had earlier explained that where a trustee holds equity interests for a beneficiary who is not an identifiable beneficial owner of those interests at the time of their transfer into the trust, such a beneficiary is considered an associate of the trustee in determining whether the trustee is a significant owner of the PHE. And this definition of associates will be provided for in subsidiary legislation.

Let me briefly explain how IRAS will determine the existence of an oral or implied agreement or arrangement.

Today, if ACD is payable, the grantee or grantor is required to stamp the instrument and submit to IRAS a copy of the instrument and supporting documents.

These supporting documents include a declaration of associates and the equity interests in the PHE that they beneficially own. And this includes associates who are parties with an oral or implied agreement or arrangement.

IRAS will conduct a thorough assessment of the documents submitted, including verifying the existence of any oral or implied agreement or arrangement, using a risk-based approach. For instance, IRAS may interview the parties involved.

Madam, the large majority of our taxpayers comply with stamp duty requirements. We have stringent enforcement in Singapore and there are stiff penalties for tax evasion, whether on stamp duties or other taxes. So, for people who are thinking of circumventing the rules, please do not, because there will be a price to pay when you are caught.

Mr Don Wee asked how much more the new stamp duties are expected to contribute to Government revenue. Mr Louis Chua also alluded to this in his speech.

ABSD (Trust), ACD (Trust) and the imposition of stamp duty on the renunciation of a trust property, are not intended to be wealth taxes or revenue-raising measures. Rather, they are part of our residential property market cooling measures.

We are unable to determine at this juncture the revenue that will be raised from ABSD (Trust), ACD (Trust) and the stamp duty on the renunciation of a trust property as this depends on the extent to which individuals will transfer a property or equity interests in PHEs into living trusts in future.

Mr Don Wee has asked whether the amendments would apply to a trust created overseas.

These amendments are applicable to two groups of instruments. First, an instrument executed in Singapore. Second, an instrument executed outside of Singapore, relating to a property situated in Singapore and received in Singapore. So, this is regardless of whether the trust is created locally or overseas.

Mr Louis Chua asked whether MOF is reviewing the ABSD remission conditions for housing developers.

Madam, the Ministry answered a Parliamentary Question on this in November 2021 and our position remains the same. The three- and five-year deadlines for non-licensed and licensed developers to sell their developments remain relevant to ensure a timely sale of such units to the market instead of keeping them for future sale for possibly higher prices. The deadlines also encourage developers to bid for residential land prudently. The vast majority of developers are able to meet these deadlines.

Mr Louis Chua also asked if the Government would consider a move similar to what was done in New South Wales, Australia, to replace the upfront stamp duty with an annual property tax for first-time home buyers who purchase properties below a certain amount. In this case, it was A$1.5 million.

According to reports from the New South Wales government, the home ownership rate had declined for each generation since the baby boomers. For example, 60% of people born between 1942 and 1951 owned homes by age 25 to 34. This dropped by 15 percentage points to 45% for those born 1982 to 1991.

So, the context in Singapore is different. Our home ownership rates remain high. About 90% of Singaporean families own their own homes. And there is no ABSD for Singaporeans who are buying their first residential property.

Importantly, we have good quality public housing which caters to the housing needs of the large majority of our first-time buyers. With subsidies and grants and with mortgage financing provided by HDB, our public housing – HDB flats – remains affordable for first-time home buyers. Close to 90% of first-timer families who bought their flats this year service their housing loans fully using CPF, with no cash payments.

So, it is important for us to bear in mind the differences in our context and our situation when we consider whether we want to adopt ideas and practices from overseas jurisdictions. Their policies are designed to tackle their challenges, which may not be the same as what we face in Singapore.

Finally, Mr Don Wee asked about the expected impact on Singapore as a wealth management hub.

ABSD or ACD already apply to purchases of residential properties in Singapore or transfers of equity interests in property holding entities, as part of our property market cooling measures. The proposed amendments in this Bill are to ensure a fair and consistent tax treatment when such purchases or transfers are made through trusts.

We do not expect ABSD (Trust), ACD (Trust) and the imposition of stamp duty on the renunciation of a trust property to affect Singapore's position as a wealth management hub. Mdm Deputy Speaker, I beg to move.

Any clarifications? Mr Leong Mun Wai.

Mdm Deputy Speaker, thank you. And I thank the Senior Minister of State for replying to my questions. I would like to make two clarifications.

One is, my understanding is that, in the past, before 9 May 2022, ABSD is not collected from trusts that do not have identifiable beneficiaries. If that is the case, if my understanding is right, can I have the number of trusts that have taken advantage of this ABSD loophole? If the number is available, I would like to have it. If not, another time will do.

Secondly, with regard to my point about Singapore being a place that favours the rich, of course, it can be a matter of opinion. But I would like to ask the Senior Minister of State if he has the following characteristics inside the tax system, does he consider it favouring the rich or not.

One, no estate duty.

Two, low personal income taxes, even at 22% or 24% after the revision this year, after the Budget. The effective income tax is actually lower than that. Of course, if you are very rich, you have an income of $5 million, you may be very close to the 24%. But our sliding income tax structure means that the effective tax rate is actually lower than the highest income tax rate. So, generally, our personal income tax is very low.

Third, no capital gains tax.

Fourth, no tax on interest, one layer of tax on dividends only, which is quite extraordinary, compared to other countries.

So, with all these, can we still say that our system is one that favours the rich?

Senior Minister of State.

Thank you, Mdm Deputy Speaker.

Madam, we do not have data on the number of property transfers that had taken place through trust where there is no identifiable beneficiary owner before 9 May 2022. But as I have said earlier in my response, I thank Members for their support. If Parliament approves this Bill, with the amendments, moving forward, this is something that, therefore, we will be able to track, we will be able to impose, to ensure that ABSD and ACD are collected, whether it is done directly or through trusts.

I do not wish to veer into a separate debate about the tax system in general because this debate today is on the Second Reading of the Stamp Duties (Amendment) Bill. So, we will focus on the contents of the Bill.

But maybe, just to reiterate, to assure Mr Leong Mun Wai and also Members of the House, that if you look at our tax and benefits system as a whole, and rather than pick and choose individual items, if you consider the tax and benefits system as a whole, where taxes are paid, benefits are given, reallocations are done, Singapore's system is one which is fair and progressive. Why? Because everybody contributes, but those who earn more, those who have more, will contribute more. Those who have less, those who are more vulnerable, the lower-income, they will receive more benefits and more help. That, to me, is what a fair and just society is about.

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

[(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)]

[(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mr Chee Hong Tat]. (proc text)]

[(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]

[(proc text) Resolved, "That at its rising today, Parliament do stand adjourned to a date to be fixed. – [Ms Indranee Rajah]. (proc text)]

ADJOURNMENT MOTION

Mdm Deputy Speaker, I beg to move, "That Parliament do now adjourn."

[(proc text) Question proposed. (proc text)]

Mdm Deputy Speaker, I wish to speak today on how macroeconomic policy can and should play a role in addressing our cost of living challenges.

As Members on both sides of this House are aware, the state of inflation in Singapore is not good. Since the start of the year, inflation in the prices faced by consumers has averaged 4.9%. This is more than double the rate of 2.3% in 2021. It is also close to double the average since our nation's Independence.

The pain of this rising cost of living is even more keenly felt by the average household and small business.

Food inflation is up to 4.5%, more than three times higher than last year. While news headlines and my mother's constant reminders focus on costly chicken and the threat to what most would consider our national dish, chicken rice, prices of all kinds of meat are up almost 6%. Eggs are about 30% pricier and even those choosing a healthier diet face vegetables that are 5% more expensive.

Another area where prices have shot up is energy. I am certain I am not the only Member here who has received irate emails from residents who have expressed shock and dismay at their utilities bills. Small wonder. Electricity is up 20% – dearer than it was a year ago – and gas, more than 10%. This not only means that more of us have to think twice before turning the air conditioner on; it also means that our small businesses, already operating on lower sales because of the pandemic, face even thinner margins.

With fuel prices up by a quarter, it is unsurprising that transportation is now more expensive, with price rises in the teens, compared to a year ago. This is not affecting just those who have the luxury of owning cars or getting on planes for the holidays. Public transportation costs are up more than 7%. For families that rely on the occasional taxi or private hire car (PHC) to get their kids to school when they are running late, this option has become that much more difficult.

When the prices of what we eat, getting to work and keeping our homes and businesses running are all rising rapidly, this is not an inflation problem any longer. It is a cost of living crisis. It is, therefore, incumbent on policymakers to do what they can to alleviate the pain felt by the people.

To be clear, the drivers of inflation are multifaceted. A significant part of inflation is global in nature. For example, the prices of commodities, such as food and energy, have climbed higher since the middle of last year. The war in Ukraine fed further uncertainty and led to spikes in the prices of wheat, corn and sunflower oil.

Supply chain pressures, not just in China, where the administration's stubborn adherence to a zero-COVID policy has led to rolling lockdowns, but also globally, have meant more upward pressure on prices for the rest of us.

Tight labour markets worldwide have seen wages add their own powerful contribution to the inflation mix.

At first glance, such imported inflation looks like something beyond our control since we are a small open economy and price taker in global markets. But it is incorrect to insist that inflation must be a storm, that we simply need a lull time to pass.

The experience of advanced economies that are around a half-year ahead of us in confronting the price dragon suggests that inflation may, like the last drunk uninvited guest at a party, hang around longer than we would like or appreciate. Their central banks have already abandoned rhetoric that the phenomenon is transitory. None other than our own MAS has pointed out that only a third of the increase in core inflation is due to external sources, with about half due to domestic drivers.

With the source of inflation emanating domestically, it behooves us to act locally. There are genuine consequences for failing to act. In addition to the real cost borne by various segments of the population, refraining from decisive action now could allow inflation to become even more entrenched in expectations of our households and businesses. This runs the risk that inflation becomes more permanent than temporary.

The role of macroeconomic policy is to stabilise the economy. While the Government has announced a suite of measures in an off-Budget fiscal package, I believe more can be done at this juncture from a big picture perspective.

In most economies, the first line of defence against inflation is the central bank. But as explained yesterday by Deputy Prime Minister Lawrence Wong, our nation's central bank, the Monetary Authority of Singapore (MAS), does not operate as a traditional central bank relying on short-term interest rates to manage price pressures. Instead, it subordinates the policy rate to exchange rate considerations consistent with our open economy and considerable exposure to international trade and financial flows.

Regardless of whether one agrees with this approach – I, for one, do – it is also well understood that, having adopted such a target, we can no longer control inflation via traditional interest rate hikes. But, thankfully, this does not mean that there are no other tools in MAS' toolkit. One strategy, developed in recent decades, is to intervene in markets for financial assets.

Some of us may be familiar with the process of quantitative easing, or QE. The central bank makes large-scale asset purchases to keep long-term interest rates low. The objective of QE is to stimulate the economy in the face of interest rates that are close to zero. Over the past decade, QE was applied by major developed economies' central banks, such as the Bank of Japan, the Bank of England, the European Central Bank and the US Federal Reserve, with some success.

Quantitative tightening, or QT, is essentially the opposite. Central banks would intervene in markets to sell longer-term government bonds. This will beat down their prices and, conversely, raise their yield. Thus, even though MAS does not directly seek to increase the Singapore cash rate – currently at 0.7% – it could, nonetheless, influence interest rates for Government bonds maturing 10 years or later.

Whether via QT or other means, it strikes me as eminently reasonable that MAS attempts to elevate such long rates so that the real interest rate – that is, the interest rate, net of inflation – would no longer be negative, as it currently is. This would represent a genuine tightening of monetary conditions, which is what is necessary to contain inflation.

Of course, the most direct approach to controlling inflation in the context of our current policy framework is to have MAS target a stronger Singapore dollar.

Madam, I appreciate that the legislature is seldom a place for in-depth discussion about as esoteric a topic as the appropriate level of the exchange rate. I am also keenly sensitive to how MAS operates best when left with relative free rein over how they conduct the more technical elements of monetary and exchange rate policy.

That said, as I shared with this House earlier this year, while the execution of policies is, indeed, best left to experts, the choice of what policy we pursue falls appropriately within the domain of politicians, who are best positioned to debate the relative merits or trade-offs that affect the welfare of the people we represent.

It is with this in mind that I am broaching the issue of our exchange rate.

I believe that we can do more to strengthen the Singapore dollar. This will reduce the cost of imported goods and services. Since much of what we consume is imported, a strong Singapore dollar can, in turn, lower domestic inflation as well.

As Minister of State Alvin Tan shared with this House two months ago and again yesterday, MAS is aware of this and had already tightened monetary policy thrice since October last year. But it is unclear how much this effort to strengthen the Singapore dollar has succeeded. This is because, of the three moves, only the most recent one was sufficiently aggressive, involving an adjustment of not just the slope but also the midpoint of the policy band, while the other two were more limited.

Ultimately, the proof is in the pudding. On 14 October, the day of the first MAS announcement, the exchange rate between the US and Singapore dollar was 1.

35. As of mid-June, after three separate efforts, this was 1.40 – getting close to 4% weaker than when the exercise first started.

There are many reasons why this may be the case, not least because the US dollar has been exceptionally strong, even compared to other currencies. But the reality is that the Singapore dollar is, today, weaker in terms of the currency that global commodities like oil, gas and agricultural products are priced in, which is the US dollar. This translates into higher prices here as higher import prices pass through into domestic inflation.

The efforts of MAS are demonstrably too tentative. What is worse is that we will risk falling behind the curve even further as the Federal Reserve recently moved to hike interest rates more aggressively, which will further fuel appreciation of the US dollar unless we act more aggressively ourselves.

Sure, such a policy will entail winners and losers. We would be concerned about what the effects of a strong exchange rate could mean for exports. But there are reasons to believe that currency appreciation need not be that problematic in our modern Singapore economy.

We should not forget that our entrepreneurial model and natural resource scarcity mean that our producers often import raw materials and other intermediate inputs to production, which all benefit from a stronger Singapore dollar. Our economy is also less reliant on manufacturing than before. Indeed, a number of our tradeable services in finance, information and communications technology (ICT) and professional services have pricing power, which allows them to be more resilient to exchange rate fluctuations.

By the same token, capital inflows may also remain unaffected by currency appreciation and could even potentially increase. After all, multinationals based here can manage their foreign exchange rate risk through hedging as long as plans for doing so are telegraphed in advance.

In the long run, a stronger currency may provide the impetus for our local firms to finally upgrade their operations to reflect higher productivity and quality rather than competing solely on low prices and cost-cutting.

There are, of course, reasons for caution on this front. Even casual students of international economic history will have encountered the Plaza Accord, an agreement struck between then leading nations to intervene in currency markets to strengthen the Japanese yen and the German Deutsche Mark relative to the US dollar. The result was a success but some observers have argued that the concerted intervention set in motion the Japanese real estate and stock market bubble and the economy's subsequent Lost Decade.

We do not want that here, but even so, there is ample evidence that we can afford more strengthening of the Singapore dollar.

Standard metrics for comparing the under- and over-valuation of our currency suggest that the Singapore dollar is, indeed, significantly undervalued. There is latent demand for the Singapore dollar as an attractive safe haven currency in these tumultuous times.

Hence, paradoxically, we may not even need to spend that much to prop up our currency. It may be as simple as ceasing interventions that restrain our exchange rate and allowing foreign exchange markets to work more efficiently. This is a luxury that precious few countries can afford but one that we can leverage now.

These monetary and exchange rate moves should occur alongside fiscal policy. I would suggest three general principles that guide our thinking on this matter.

First, we should subscribe to the general principle of being timely, targeted and temporary. I have already outlined why support is needed now. So, it is timely, given how a souring of the global economic environment means that we must rely less on global growth tailwinds to support our economy. Targeting specific groups and keeping the policy temporary will also minimise the budgetary footprint at a time when we have already drawn liberally from our reserves and the economy is on track towards a self-sustaining recovery.

Second, our fiscal balances should not be building up excess surpluses at this time. This means that increased revenues resulting from higher collections of various taxes and duties should, as far as possible, be rebated back to citizens. This ensures that our Government does not enjoy a windfall gain, while our citizens suffer.

Finally, it is important that we avoid the temptation to index economy-wide wages to inflation. While tempting, since it automates the process of wage adjustment to rising inflation, the experience of emerging markets in the 1980s and 1990s is a testament that this well-meaning policy can end up institutionalising inflation.

While the package announced last month by MOF is based on three somewhat different philosophies, it also embeds some of the principles that I have mentioned of being temporary and targeted and relying on better than expected fiscal outturns from the prior fiscal year. But we can probably do more.

Revenue for the previous fiscal year, FY 2021, was $74.8 billion – $13.4 billion higher than the fiscal year 2020 and $7.1 billion more than two years ago, before the pandemic. The jump in property stamp duty alone was $6.8 billion even as personal and corporate income taxes have fully recovered. Yet, the announced package only amounts to $1.5 billion – a fraction of this revenue increase.

One important example of policy that follows these principles is to make adjustments for Singaporeans on fixed incomes.

For such people, inflation can be devastating. An elderly person spending $20 a day may now only be able to buy one prata instead of two for breakfast, may be forced to skip their afternoon tea or order two instead of three items of "cai png".

What is worse is that this diminished consumption will be with them for the rest of their lives even when inflation has returned to normal rates, because elevated prices do not automatically come back down even when inflation disappears. Inflation of 3% above the historical average would mean that their retirement funds now buy 3% less. In practical terms, this means adjustments for those that rely on ComCare and CPF.

We have to remind ourselves that while financial markets can and do adjust returns to reflect higher inflation, this is not the case for those locked into a fixed income stream.

For retirees, CPF returns have remained unchanged thus far, even as higher prices mean that whatever these retirees have set aside in savings will now buy less. For Comcare, the announced increase for Long-Term Assistance is surely welcome, but it is unclear why a comparable degree of support is not extended for short- and medium-term assistance, since inflation hits both types of households in much the same way. I believe that Comcare assistance should be permanently and universally increased, by a margin that reflects the excess inflation experienced by families for this year.

I also believe that we can roll out a temporary increase in CPF interest rates of around two percentage points for a six-month period, consistent with the increase in inflation. This can be funded by the returns paid on Special Singapore Government Securities, or SSGS. The higher returns on SSGS can, in turn, be made up from higher nominal returns that would accrue from financial assets that are marked to market.

Macroeconomic policies are often viewed as blunt instruments: they affect the economy on the aggregate; and hence, we may be concerned that pushing these levers may be too disruptive for an economy that is already on a tentative road to recovery.

On the contrary, my contention is that it is precisely because the effects of macro policy are wide ranging that we wish to consider applying such tools at this time.

For starters, a number of the policies that I discussed associated with interest and exchange rates, have the benefit of being fast to implement. Budgetary measures take time to draw up and disburse. In contrast, interest and exchange rate policies can be rolled out once the decision has been made.

Moreover, the suggestions I made are complementary in nature. The monetary measures deployed to cool inflation are contractionary, as they should be, by design. To limit the risk of derailing a still-fragile economy and recovery, we should offset this effect with fiscal measures that are modestly expansionary. The Government’s support package is consistent with this, but this risks being unwound by the impending GST hike.

Instead, what we want is a macro policy stance that is broadly neutral, which is what is appropriate for our economy at this stage of the business cycle. Put another way, we want to downshift and tap on the brakes to contain inflation, but pumping on a wee bit of gas with limited government spending that helps keep the engine from stalling.

Mdm Deputy Speaker, I appreciate that much of this speech has been relatively technical and we all want to go home. To some extent, this is inevitable; the nature of macroeconomic policymaking is often technical in nature. Nevertheless, it is possible to summarise my main suggestions in a few sentences.

Strengthen the Singapore dollar, because a strong currency makes the stuff we import cheaper. Buy long bonds, because this will dampen speculative investment and keep a lid on asset prices. [Please refer to "Personal Explanation", Official Report, 12 September 2022, Vol 95, Issue 67, Personal Explanation section.]

Spend to support those among us that are hurting most for a temporary period and finance this by rebating any windfall tax gains. But avoid wage indexation at all costs.

We need to battle inflation proactively and we have the tools to do so. Let us use them.

Minister of State Alvin Tan.

Mdm Deputy Speaker, I thank the Member for tabling today's Motion. I will respond to the Motion in two parts. I will start by addressing the macro picture, before zooming in to the micro picture.

A hallmark of our Government since Independence has been our ability to look long term. We see the big picture, the macro picture. This includes assessing the world and the winds of change, as well as identifying the trends, opportunities and challenges for Singapore.

In this House yesterday, I shared our economic outlook for Singapore, including our GDP growth and inflation projections. For the sake of brevity in this response, I shall not repeat those details and Members can refer to my speech yesterday. What I would like to focus on in my response is how we have planned for and laid foundations for the long term.

First, we maintain a stable macroeconomic environment so that businesses and households can make economic decisions with confidence. And a core tenet is our exchange rate-centred monetary policy which has helped us manage inflation.

During this period of rising inflationary pressures, MAS has pre-emptively tightened monetary policy since October last year, as the Member has observed. This longstanding policy has directly helped dampen imported inflation.

How? To Assoc Prof Jamus Lim's point on food prices, as well as energy prices, let me dive deeper. For global food prices, while global food commodity prices increased by an average of 25.4% year-on-year over the first five months of 2022, domestic food prices increased by an average of 3.6% year-on-year over the same period. So, 25.4% versus 3.6%.

On energy prices, likewise, even as global energy prices rose by 27.5%, energy-related components in Singapore's Consumer Price Index, which includes the cost of electricity, gas and petrol, increased by 13.6% year-on-year between January and May. So, 27.5% versus 13.6%.

Second, we continue to build our trade links to the world, to diversify our sources of imports and exports, even as the world is experiencing a retreat of globalisation. We concluded the world's largest Free Trade Agreement (FTA), the Regional Comprehensive Economic Partnership Agreement (RCEP), in November 2020, and are part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). We have also signed the Pacific Alliance-Singapore Free Trade Agreement (PASFTA) in January and are on track to conclude an FTA with Mercosur.

We have also signed Digital Economy Agreements (DEAs), Digital Economy Partnership Agreements (DEPAs) and are in the process of negotiating a green economy agreement with Australia.

These trade agreements help us to diversify our imports, open markets for our businesses and future-proof our economy.

Third, we continue to stay open and connected to the world and to innovation, investments and talent. And despite the challenges posed by the COVID-19 pandemic, we attracted S$11.8 billion in Fixed Asset Investments (FAI) last year. We have secured significant investments, for example, Sanofi has committed to setting up a €400 million vaccine production facility in Singapore.

These inbound investments create good jobs for Singaporeans, make our economy vibrant and competitive and prepare us for the next pandemic – long term. Overall, strong growth will support job creation, wage growth and help address inflationary pressures.

So, as we continue to plan and execute our macro and strategic plans, we also keep our eye firmly on the micro – the ground picture. So, we plan and execute the macro, but we also keep our eye firmly on what is happening on the ground. It is reflected in how we navigated Singapore through the COVID-19 crisis and support Singaporeans and local businesses during this period of rising costs.

During the height of COVID-19, we committed close to S$100 billion over the last two years, part of it to support businesses hit by COVID-19 restrictions. In particular, our Jobs Support Scheme (JSS), which provided wage subsidies to employers to help them retain workers, saved 165,000 local jobs between March and December 2020.

We also rolled out initiatives, such as our SingapoRediscovers Vouchers (SRVs) for our embattled tourism sector. Collectively, about $300 million in vouchers and out-of-pocket payments were generated through SRV transactions. This provided crucial support to our local tourism business.

In anticipation of higher prices, we rolled out support for Singaporeans in Budget 2022, including the Jobs and Business Support Package, to help businesses and workers, as well as the Household Support Package to help households with their daily needs. And to help Singaporeans cope with rising inflationary pressures, we also brought forward the implementation of some of the measures, including our CDC Vouchers and Small Business Recovery Grant (SBRG).

The additional S$1.5 billion support package Deputy Prime Minister Lawrence Wong announced on 21 June provides immediate and targeted relief to lower-income and vulnerable Singaporeans, who are disproportionately affected by higher prices.

The measures included in the package also help our local companies transform and cope with rising energy costs by becoming more energy-efficient. It also provides targeted relief for specific groups, such as self-employed persons, who depend on their vehicles for their livelihoods and, hence, are more adversely affected by energy cost increases. These include taxi drivers and delivery riders.

Overall, we designed the package to avoid stoking further inflationary pressures and distorting price signals, while being, as the Member suggested, fiscally responsible and sustainable. And as Deputy Prime Minister Lawrence Wong said yesterday, if the situation worsens significantly, we would be prepared to do more.

Let me turn to some of the specific issues raised by Assoc Prof Jamus Lim in his speech. On MAS' monetary policy response to inflation, more specifically, we need to recognise that the global nature of the price pressures we are facing is affecting all of our trading partners. The sharp pick-up of inflation of food and oil prices since Q4 last year, principally, reflects the effects of serious disruptions of global supply due to the Ukraine-Russia conflict.

So, it is inevitable, as the Member had mentioned, that some of these prices will affect our economy. Many Singaporeans do accept that the situation requires some adjustments to the high prices. Given the circumstances, I will explain a few points below.

MAS, using its monetary policy, has strengthened the exchange rate by at least 5% on an annualised basis, which has kept domestic food inflation, for example, to one-fifth of global food inflation thus far.

How MAS decides on the extent of its tightening of the exchange rate takes many different factors into account. Foremost is the fact that a strengthening exchange rate cannot fully offset global prices without causing immediate negative consequences on growth and, therefore, the labour market.

Indeed, this is precisely the reason why many advanced central banks are guarded in the speed and also the extent to which they will hike interest rates. This monetary policy action, in and of itself, has attendant spillover effects that we must all take into account in a very uncertain, dynamic and also challenging economic environment.

Therefore, a judicious blend of tight monetary policy and targeted supportive fiscal policy, carefully calibrated, is most appropriate. In fact, the Member mentioned that the fiscal policy must be timely, targeted and temporary in rebating back fiscal upsides. That is what we have precisely done with the S$1.5 billion support package.

If you look at it, the combined Budgets of 2020/2021, together with monetary policy decisions – both fiscal and monetary policy together – supported Singapore's GDP growth by about one percentage point in 2021 and prevented the deterioration of the unemployment rate by four percentage points, even as the combined expansionary monetary macroeconomic policy responses were non-inflationary.

At this juncture, the current round of combined fiscal and monetary policy responses is expected to contain medium-term inflation, without significant loss of output or inadvertently adding further to the underlying tightness in the economy.

On indexing financial assistance payments to inflation, I would just like to say that the Government regularly reviews our schemes to take into account needs and affordability. And inflation is one of the many factors taken into consideration.

Mdm Deputy Speaker, allow me to sum up. I have responded to the Member's Motion by articulating our Government's macro and micro approaches. We plan and execute for the long term and, at the same time, continue to have the dexterity to zoom in into the details that matter on the ground to Singaporeans and Singaporean businesses.

Indeed, the livelihoods of our people are not a theoretical exercise to us. Rather, we focus on strong job creation and wage growth as the best ways to help Singaporeans tide over these immediate difficult times and ensure that we have sufficient resources to tackle the long-term challenges.

The mindset and bias towards action have allowed us to weather storms and seize opportunities throughout our history. That is the hallmark of our Government. This is our commitment to Singapore and we will continue to do our utmost to deliver on this commitment, especially in these challenging times.

Order. The time allowed for the proceedings has expired. I adjourn the House pursuant to the Standing Order. Order.

[(proc text) The Question having been proposed at 4.14 pm and the Debate having continued for half an hour, Mdm Deputy Speaker adjourned the House without question put, pursuant to the Standing Order. (proc text)]

Adjourned accordingly at 4.45 pm.

20 Mr Gan Thiam Poh asked the Minister for Manpower (a) whether there are any commissioned studies to assess whether the CPF Basic Retirement Sum sufficiently provides for the minimum retirement adequacy of seniors and to provide a decent quality of life; (b) whether the Government is considering the need to define specific adequacy goals to meet seniors’ needs; and (c) whether there are any long-term plans, in terms of policies, to achieve the desired outcomes for our seniors.

21 Mr Chua Kheng Wee Louis asked the Minister for Manpower (a) how is the 3.5% annual increase in the CPF Basic Retirement Sum (BRS) for each cohort turning age 55 from 2023 to 2027 determined; (b) what are the factors that have contributed to the raised annual increase from 3% to 3.5%; and (c) what are the long-term inflation assumptions used in the BRS annual increments.

In 2014, the Government set up a CPF Advisory Panel to study possible enhancements to the CPF system. The Panel was led by Prof Tan Chorh Chuan and comprised academics, financial industry practitioners and community representatives. The Panel was asked to recommend how the CPF system could better cater for the varied interests and needs of members. Some members wanted the ability to withdraw more CPF savings as a lumpsum, some wanted higher monthly payouts in retirement and some wanted monthly payouts that increase over time.

The Panel affirmed that the priority is for the CPF to focus on what is needed for members to receive lifelong payouts that cover a basic level of retirement expenses. For this purpose, the Panel took reference from the lower-middle retiree household expenditure and factored in long-term inflation as well as some increase in the standard of living in setting the Basic Retirement Sum or BRS.

The same factors were considered in setting the annual increase in BRS at 3.5% for members turning 55 in 2023 to 2027. These members experienced strong GDP growth during their working years. They were among the first to benefit from a mature and well-established CPF system, consistently high employment rates and strong wage growth.

The latest BRS adjustments translate to higher monthly payouts to help these members tackle the rise in expenses due to long-term inflation and higher standards of living. The BRS payout will rise to close to $1,000 per month for the cohort turning 55 in 2027, up from close to $850 per month for the 2021 cohort.

Members can receive larger payouts if they set aside more CPF savings for retirement. A member who turns 55 in 2027 and is on the CPF LIFE Standard Plan can receive close to $1,850 per month, for life, by setting aside the Full Retirement Sum, and close to $2,700 per month, for life, by setting aside the Enhanced Retirement Sum. Members can also choose the CPF LIFE Escalating Plan, which starts with lower payouts but will see payouts increase by 2% every year.

On retirement adequacy goals for seniors, it is important to note that seniors are likely to have a combination of means to fund their retirement, of which, CPF is a component. The others include private savings, family support and housing monetisation, such as the Lease Buyback Scheme and Silver Housing Bonus Scheme. Nonetheless, BRS attainment is one indicator for basic retirement adequacy. Eight in 10 active CPF members turning 55 in 2027 are expected to have enough savings to receive at least the BRS payout, up from 67% in 2021.

The Government introduced the Matched Retirement Savings Scheme in 2021 to incentivise members and their loved ones to top up the Retirement Account of eligible members who have yet to meet the prevailing Basic Retirement Sum. For seniors who require further support to meet their retirement needs, targeted assistance is available. For example, eligible seniors receive up to $900 a quarter to boost their retirement income under the Silver Support scheme.

We will continue to help seniors strengthen their retirement adequacy by enabling them to earn more and save more. In particular, the Tripartite Workgroup on Older Workers laid out a long-term roadmap to raise the retirement and re-employment ages and increase CPF contribution rates for older workers. This provides flexibility for seniors who want to work longer to do so and enables seniors to save more while they work. We will continue to review our policies to help Singaporeans strengthen their retirement adequacy.

22 Assoc Prof Jamus Jerome Lim asked the Minister for National Development (a) whether there are household density considerations associated with the location of commercial and coffee shop spaces within HDB developments; and (b) if so, what are these conditions for (i) mature and (ii) new housing developments.

23 Mr Sharael Taha asked the Minister for National Development with the trend of increased transacted prices of coffee shops (a) what measures will be put in place to ensure that the high transaction cost for coffee shops is not passed on to consumers; and (b) how will the Government ensure that the neighbourhood coffee shops continue to provide affordable food to residents.

24 Mr Shawn Huang Wei Zhong asked the Minister for National Development (a) whether the Ministry tracks (i) the transacted prices of suburban coffee shops against the prices of HDB flats and the median income of individuals staying within the same area and (ii) the average rental price per square foot of stalls in suburban coffee shops against the median price of a cup of coffee sold in these coffee shops; (b) if so, what is the data for the past 20 years; and (c) what are the measures taken to ensure affordability of food and drinks sold in suburban coffee shops.

There are, presently, over 770 HDB coffee shops in Singapore. Some of these coffee shops are sold and are, hence, privately-owned, while the rest are rented out by HDB. The two coffee shops in Yishun and Tampines that were recently transacted at around $40 million each are amongst 400 coffee shops which had been sold by HDB in the 1990s. The intent had then been to encourage private sector ownership in running these coffee shops. Such privately-owned HDB coffee shops are now transacted on the open market on a willing-buyer-willing-seller basis. Some buyers may be bullish about units at certain locations and are, hence, willing to pay a higher resale price. The two coffee shops in Yishun and Tampines are also large, with many stalls. However, such transaction prices are a minority. Since 2010, 70% of resale transactions of sold coffee shops were at below $10 million. Resale volume is also fairly low, with an average of 15 transactions per year since 2010.

We are mindful of the need to ensure that residents have access to affordable cooked food options, and of the potential impact of such transactions and have, therefore, put in place various measures over the years. One key measure is to ensure a good supply of coffee shops in every HDB estate and town, so that there is healthy competition. These coffee shops can also be run by social enterprises, for example, NTUC Foodfare, to help keep food prices low.

The market for F&B is highly competitive, especially in our heartlands. For example, the two coffee shops in Tampines and Yishun are within neighbourhood centres that have five and seven coffee shops respectively within a 400-metre radius, and residents, hence, have a choice of affordable food options there.

Another example is the coffee shop at Bukit Batok St 11 that was sold at $31 million in 2015. Today, residents in that area have the choice of six other coffee shops within the vicinity. Despite the transacted price, it has been observed that food prices at the Bukit Batok St 11 coffee shop are marginally higher, by 10 cents to 20 cents, and a cup of coffee is the same price, as compared to other nearby coffee shops.

HDB plans the provision of coffee shops and other commercial amenities in new housing developments carefully, taking into account the number of dwelling units within the development as well as surrounding developments. The same approach is adopted for new housing developments in both mature and younger HDB towns. HDB also considers the residents' ease of access to amenities by surveying the availability of existing commercial facilities in the vicinity. Most residents can access commercial facilities, such as shops and coffee shops, within 400 metres' walking distance or a five- to 10-minute walk from their blocks.

HDB completed 34 new coffee shops in the last four years and continues to build new ones to serve new HDB developments. Another 30 coffee shops will be completed in the next four years. Aside from coffee shops, we also have over a hundred hawker centres in Singapore and the Government is building more. Four new centres will begin operations this year, with another seven being planned or under construction.

Ultimately, consumers must be given the choice to go elsewhere. This applies to stallholders as well. If the rents set by coffee shop owners are too high, stallholders could move to other eating establishments, resulting in vacant stalls and holding costs for the owners.

Since 1998, HDB no longer sells coffee shops and only rents them out. In 2018, HDB introduced Price-Quality tenders, with 50% of points assigned to the Quality of the operator, which includes aspects, such as the availability of budget meals, good track record and community initiatives. Operators who successfully tender for HDB coffee shops, typically, provide budget food options at every stall, with these priced at around $3. The rentals under Price-Quality tenders are also lower and more sustainable than under pure price-bidding tenders.

Coffee shops and food centres play an important social role in our HDB towns and estates, as they not only provide a convenient option for cooked food and drinks for residents, but also serve as key community hubs for families and friends to bond and connect over food and drinks. As such, HDB regularly monitors the resale market for HDB coffeeshops, as well as the prices of food sold in both sold and rental coffee shops and will not hesitate to review its policies to address affordability concerns where necessary.

27 Dr Wan Rizal asked the Minister for Culture, Community and Youth whether the Ministry can provide an update on the Youth Mental Well-being Network, especially on its plans to expand to a broader network to tackle mental health issues across a broader range of population segments.

Recognising that mental well-being is one of the top issues that youths face, we started the Youth Mental Well-being Network in 2020 to bring partners together to develop ideas and solutions to improve our youths’ mental well-being.

Since then, more than 1,500 individuals, comprising youths, parents, caregivers and mental health professionals have started more than 20 ground-up projects to support youth mental well-being.

For example, MCCY and the National Youth Council (NYC) are partnering members of the Youth Mental Well-being Network, like Campus Psy and Young NTUC, to run peer support network programmes.

But we also recognise that the issue of mental well-being goes beyond youths, as the pandemic experience has made clear. Therefore, we will expand the network beyond youths to benefit the wider population and achieve greater impact.

The expanded network is part of the broader national effort under the Interagency Taskforce on Mental Health and Well-being.

Minister of State Alvin Tan will be chairing the network with support from Minister of State Sun Xueling and Senior Parliamentary Secretary Rahayu Mahzam.

In the coming months, the Network will bring together key stakeholders to learn from one another, collaborate and take action on issues identified by the Interagency Taskforce on Mental Health and Well-being. We aim to strengthen whole-of-society partnerships and citizen action, to achieve a caring and inclusive society where all can seek help and be supported to achieve mental health and well-being.

More details will be shared on the focus areas of the expanded network, when ready.

28 Mr Edward Chia Bing Hui asked the Minister for Trade and Industry in view of the feedback on the manpower crunch in the hospitality and food and beverage sectors, what is the Ministry’s assessment on (i) the impact to customer satisfaction or service standards and (ii) the overall impact on our reputation as a business and travel destination.

Singapore’s reputation as a business and travel destination continues to be strong. When compared to nine key competitor cities, Singapore is still among the top travel destinations for both leisure and business travellers, according to Singapore Tourism Board's (STB) February 2022 Brand Health Survey of Singapore’s top 15 markets. There is a robust pipeline of business and leisure events lined up in Singapore for the rest of 2022. These include the FIND – Design Fair Asia Congress, Food & Hotel Asia and the Formula 1 Singapore Grand Prix.

We understand that businesses in the hospitality and F&B sectors are facing challenges as demand surges with the resumption of movement and activities post-COVID-19. To supplement the tight domestic labour market, we have moved quickly to reopen borders for foreign workers to meet the sectors’ needs.

At the same time, we encourage businesses to continue to press on with their efforts in digitalisation and job redesign, as well as raising productivity. This can help them maintain or improve their quality and standards of service. We will continue to work with the hospitality and F&B industries to help them transform so that they not only serve local customers well, but will also welcome back our overseas visitors with quality service, products and experiences.

29 Mr Alex Yam asked the Minister for Defence (a) whether the recent Shangri-La Dialogue has achieved its objectives; (b) how will the geopolitical tensions that remain between the United States and China affect Singapore; and (c) whether the forum continues to remain useful and relevant for participating countries.

The Member’s question has been addressed in my written reply to Question No 53 circulated on 4 July 2022. The Member may refer to that reply. [Please refer to “Key Takeaways from Recent Shangri-La Dialogue Regarding Geopolitical Dynamics and Maintenance of Peaceful Relations in Asia”, Official Report, 4 July 2022, Vol 63, Issue No 63, Written Answers to Questions for Oral Answer Not Answered by End of Question Time section.]

30 Dr Tan Wu Meng asked the Minister for Education regarding the Ministry’s proposed expansion of the POSB Smart Buddy programme for students across all Primary schools by 2025 (a) whether studies have been conducted on the short- and long-term impact of early exposure of children to e-payment transactions in children, (i) with existing experience with physical currency, such as coins and (ii) without prior experience of physical currency; and (b) if so, what are the results of these studies.

MOE has partnered DBS to set up e-payment infrastructure in all schools by 2025. This will provide the option of cashless transactions in our school canteens and bookshops. Those who prefer cashless payments can use their School Smart Card and EZ-Link cards or sign up for the POSB Smart Buddy Programme, which is optional. Those who prefer cash payments can continue to do so, as we will keep this option available.

MOE conducted a study with pilot Primary schools in 2018 on the POSB Smart Buddy Programme. The majority of schools provided positive feedback on how students have responded to using cashless payments. They found that students demonstrated the "ability to track spending" and that they had "learned to save". This indicates that students can develop good financial habits, whether using cash or cashless payment.

Whether payment is done by physical cash or digital money, it is important that young children learn about the value of money, spending wisely and managing their money prudently. Allowing our students an option of cashless payment in schools where it can be done in more controlled settings, would not only help to develop good financial habits but also better prepare them for a world where contactless transactions are becoming more prevalent. MOE will continue to monitor how students respond to cashless payment in schools and provide them with the necessary guidance to develop good financial literacy.

31 Ms Foo Mee Har asked the Minister for National Development in light of the high transaction prices of coffee shops in suburban areas with corresponding hikes in stall rentals, how will the Government ensure that stallholders and coffee shops in the neighbourhoods are able to continue to provide affordable food and beverage to residents.