Speech by 2M Indranee Rajah at the OrangeTee Business Conference 2022
Apr 21, 2022
Introduction
Good afternoon. Thank you for inviting me to join you at the OrangeTee & Tie Business Conference today.
Getting through COVID-19
I would like to start off by painting the bigger picture so that all of you would get a sense of what we are doing, as a government and as a country, and know where we are heading together. The pandemic had been a long hard fight for us, but we have come through – our fatality rates are low, we have one of the highest vaccination rates in the world and the majority did not experience very severe symptoms. This was possible only because of the strong cooperation and support of everyone in Singapore, yourselves included, complying with our public health measures, trusting the government, and keeping faith with one another.
As a result, we have been able to ease COVID-19 restrictions, and move towards living with endemic COVID-19 without fear.
Post-Pandemic Recovery
With the onset of Covid, our economy took a battering. We took decisive steps to deal with this, committing close to $100 billion to support Singaporeans and businesses through the uncertainties of COVID-19 over the past two years. We all persevered through the difficult period and we were all able to start this year on a positive note – our economy has rebounded strongly from our worst recession since independence.
2022 will be a year of transition as the economy recovers and we reopen our borders. We are going to push on with our strategy of creating good jobs for Singaporeans and upskilling our workers so that we can take advantage of growth opportunities.
At the same time, we are taking steps to get our economic engines firing again. We must remain open and connected to the global economy so that business can take off.
We will also need foreigners who can complement our workforce and bring in skills that we either do not have, or do not have in sufficient numbers. However, so that Singaporeans’ interests are protected and that the right balance is maintained, we will implement the Complementarity Assessment Framework (COMPASS), to ensure our foreign workforce is of diverse and of high-quality. We also updated the EP and S Pass qualifying salaries, to ensure that foreigners are not being hired simply because it is cheaper to do so than hiring local employees.
So in short, the strategy is that we want to make sure Singaporeans are employed, have good opportunities, and to the extent that we bring in foreigners, it is to complement our own workforce and to create opportunities for all.
High Inflation & Cost of Living
At the same time, as we all know, we are currently contending with inflation and rising cost of living. We are not the only ones experiencing this. It is a worldwide phenomenon, driven by rising energy prices and global supply chain issue and now exacerbated by foreign conflicts which may be protracted.
The Government is very mindful about this concern and we have taken proactive steps to support households and businesses. This includes the substantial Household Support Package which was announced in Budget 2022, and this comprises CDC Vouchers, U-Save and S&CC rebates and CDA top-ups. We also have the COVID-19 Recovery Grant for businesses.
Greater Progressivity in our Tax System
In recent years, there have been concerns about growing inequality. We have taken various measures to address this. This includes making our tax system more progressive and redistributing from those who have more to those who have less.
GST
One in four, or 25%, of our population is going to be aged 65 and above by 2030 – that’s how quicky our population is aging. To meet our anticipated healthcare costs as well as other important needs, we have announced an increase in the GST rate. However, being mindful of the current costs issues, we have delayed the start date to 1 Jan 2023, and provided substantial financial assistance in the form of the $6.6b Assurance Package. The effect of this package is that the impact of the GST increase will be deferred for 5 years for the majority of Singaporeans and 10 years for the lower-income.
Property Tax increase
Property tax is our principal means of taxing wealth. It taxes the wealth in the form of property ownership in Singapore. In Budget 2022, we raised the property tax rates for non-owner-occupied residential properties and owner-occupied residential properties with annual value in excess of $30,000.
This is to make the system more progressive. The increase in progressivity of the property tax system helps to ensure that we have a fair and progressive system of taxes and transfers in Singapore. Those with more will contribute more taxes than the benefits they receive. Those with less will still contribute, but a lesser amount, and in turn, they will receive more benefits.
Property Cooling Measures
The Government has been monitoring the property market, and in December 2021, we introduced a set of cooling measures to tamper the demand for housing, alongside measures to boost supply for home-seekers.
Professionals like yourselves, in the sector, would understand that the measures were implemented in view of clear upward market momentum in both the private residential and the HDB resale markets. If this was left unchecked, prices would run ahead of economic fundamentals. Coupled with expected increases in interest rates as major central banks look to tighten monetary policy, property buyers may be faced with a significant increase in debt servicing cost.
We will continue to closely monitor the market, with a view to promote a stable and sustainable property market.
Keeping Public Housing Inclusive
In Singapore, public housing is more than just about a physical place to live. It has, since independence, also been a key to building cohesive and inclusive communities.
You are all familiar with the Ethnic Integration Policy (EIP). The EIP sets limits on the proportion of flats in each HDB block and neighbourhood that can be occupied by households from every ethnic group.
This is to ensure that we are not only multi-racial but integrated, where Singaporeans from all walks of life to interact with one another in our neighbourhoods, schools, hawker centres, other common spaces, and of course, in our housing estates.
At the same time, we are mindful that with the EIP, some flat owners may face genuine difficulties in selling their flats when the EIP limits are reached. We had previously put in place some assistance measures, such as giving these flat owners more time to sell their flats.
In March this year, we took another step to smoothen the rough edges of the EIP. HDB will buy back flats from EIP-constrained homeowners who face genuine difficulties selling their flat on a case-by-case basis, regardless of which ethnic group they belong to.
This decision requires significant resources to implement. Nevertheless, we felt it was important to do this as a matter of principle and values. We maintain the EIP policy because it benefits the whole society - it helps us to be integrated and inclusive. At the same time, we recognise that it affects some harder than most. So we should take on the costs of this policy collectively, rather than leaving some to bear a disproportionate share of the impact.
Tackling Climate Change and Sustainably
Climate change is another topic on people’s minds. The Government’s is committed to tackling this and moving ahead to a more sustainable future. In 2021, the Government launched the Singapore Green Plan 2030. The idea is to advance Singapore’s national agenda on sustainable development.
Under the Green Plan’s Energy Reset pillar, we aim to make our buildings, HDB towns, and districts more sustainable.
The HDB Green Towns Programme aims to bring sustainable living to HDB residents, and to reduce energy consumption by 15% by 2030. These include solar panels on the rooftops of HDB blocks, Light-Emitting Surfaces for the HDB block signages, even new paints that can reduce ambient temperature.
Industry’s Transformation
Let me now touch on issues relevant to your sector. The key disruptor for estate agents is technology. As such, transforming the real estate agency industry is more critical than ever. I am heartened that the industry, as a whole, has already embarked on this transformation journey and made good progress since the launch of the Real Estate Industry Transformation Map, RE ITM in short, in 2018.
The Digitalised Property Transaction Workgroup (DPTWG) chaired by the Council for Estate Agencies (CEA) has introduced enablers such as APIs (Application Programming Interfaces), and standard contract templates and checklists for residential rental transactions as well as private residential resale transactions.
Property agencies and agents can save time and effort in documentation and due diligence checks, and will be able to track the progress of property transactions real-time. I urge all property agencies to start preparing early for the future of electronic contracting.
CEA has published the complete residential property transaction records of property agents on its Public Register from September 2021, as part of the Transaction Records Initiative. This initiative empowers consumers to make a more informed choice when choosing a property agent to represent them.
I would like to thank OrangeTee & Tie for being a member of the workgroup that co-developed the Guide on Best Practices for Consumer Ratings of Property Agents and adopting these best practices for your Property Agents Review platform. This is a positive step towards ensuring that consumers remain satisfied with the services of your property agents.
I am also glad that OrangeTee & Tie remains one of the frontrunners in terms of Proptech development and is committed to elevate the professionalism and productivity of your property agents. Early this year, OrangeTee & Tie formed a new Business Technology Team to drive the agency’s digital strategies and to roll out more Proptech tools to support your agents. One example would be the new feature in OrangeTee & Tie’s Agent App called RenTapp – a tenancy management system that will help agents to manage rental dues and generate market analytics and condition reports.
The digitalisation efforts over the years have enabled the industry to remain resilient during the COVID-19 pandemic. Property agents were able to adapt quickly by moving to virtual viewings to keep yourselves and your clients safe. This, from what I understand, is now going to be part of a new norm. So you will be able to have more tools at your disposal. However, while the industry has made great strides, technological innovations are continually changing consumers’ preferences and lifestyles, and estate agencies and agents cannot afford to rest on your laurels.
RE ITM 2025
In the coming months, CEA will be refreshing the RE ITM, taking into consideration feedback received from industry consultations. The intention is to build on the momentum of and gains from the ongoing transformation in the industry to better anticipate and meet consumers’ needs so that the industry as a whole will be better placed to continue providing professional and value-added services.
To accomplish this, agents must have a good knowledge of property-related regulations and policies to better advise your clients. CEA will be working with the industry under Project FOCUS to address common breaches of agents and enhance property agencies’ supervision on their agents. The idea behind this is to help to improve consumer trust in the industry, which will benefit all stakeholders, including real estate agents.
Next, we will continue to work with agencies to leverage technology to provide digital and seamless property transactions from start to end.
An area which the Government is working on with industry partners is the Alliance for Action (AfA) on Accurate Property Listings, which seeks to develop a digital platform to eliminate duplicate and dummy listings on online property portals. While allowing for faster and more accurate online searches of properties, it also offers an additional safeguard against fake listings, thereby benefitting not only property consumers but agents as well.
You must continue to sharpen your skills and critical competencies to ensure that property agents keep abreast of industry trends and equip themselves with skills that are relevant and useful. CEA has embarked on Project ADEPT (Advancing and Enhancing Professionalism and Training), a joint study with the industry to enhance the entire CPD ecosystem to equip property agents with the necessary knowledge and skillsets for the future economy.
Recently, there have been reports about scammers impersonating property agents to commit fraud against unsuspecting consumers. I urge you and your agents to educate your clients on the importance of verifying the property agent’s identity against the CEA Public Register before transacting with the person so that they can protect themselves from being scammed.
As trusted advisors to your clients, it is also important that you continue to provide them with accurate information, balanced advice, value-added services, and most importantly, act in their best interests.
Conclusion
In conclusion, let me say that the transformation of the industry requires the commitment, cooperation and strong support of stakeholders like yourselves. I would like to thank OrangeTee & Tie for your contribution as members of the AfA initiative and Project ADEPT. This is very much in line with the Singapore Together Approach.
We will continue to work with you to transform the industry for the benefit of all Singaporeans. I look forward to your continued support as we embark on more new initiatives in the future. Thank you very much.