Remarks by Minister for Transport and Second Minister for Finance Mr Chee Hong Tat at the Singapore Shipping Association 2024 Lunar New Year Lo-Hei Cocktail

Ms Caroline Yang, President, Singapore Shipping Association,

Your Excellencies,

Sisters and brothers from the Labour Movement,

Ladies and gentlemen,

1.     新年快乐!  I am delighted to be celebrating the Lunar New Year with all of you this evening!  Let me start by wishing everyone a happy, healthy and prosperous Year of the Dragon – 龙凤呈祥，龙马精神，龙腾虎跃，龙年行大运!

A Successful 2023

2.     I agree with Caroline that 2023 was indeed a good year for Maritime Singapore. 

3.     Our strong showing would not have been possible without the hard work and contributions of each and every one of you, as well as the strong tripartite collaboration and trust that our maritime community has built up over the years between the Government, the industry and our unions. 

Outlook for 2024

4.     As I shared at Singapore Maritime Foundation’s New Year Conversations last month, we are cautiously optimistic about Maritime Singapore’s prospects this year.  The seas around us remain calm for the moment, but we need to carefully monitor the dark clouds ahead and prepare ourselves in case a storm is heading our way.

a.     Singapore’s economy is expected to grow between 1 to 3% in 2024, better than the 1.1% growth in 2023.  But much will depend on the external environment, as Singapore is a small and open economy. 

b.     Global economic growth slowed in 2023, and the outlook for 2024 remains uncertain given weak consumer sentiments and high interest rates in the major economies.

c.     Geopolitical developments have also been affecting supply chains.  An example is the attacks on merchant vessels in the Red Sea, which have impacted shipping routes, strained capacity, and affected schedule reliability and port operations around the world. 

Supporting the Industry

5.     Some of these developments are beyond our direct control, we can only ride the waves when they come.  But there are areas we can work on together, to make things better for Maritime Singapore, for all of us, and prepare ourselves for the challenges ahead. 

6.     MOT and MPA will continue to work closely with the industry and our unions, to invest in growing areas such as digitalisation and decarbonisation to secure our long-term competitiveness, and also to address our companies’ concerns on rising business costs and manpower constraints. 

7.     On costs, there are some unavoidable elements that are either due to global inflation or reflect near-term supply constraints in our domestic market due to the disruptions caused by COVID-19. There are also cost increases which are the result of Government policies, such as the implementation of the Progressive Wage Model to uplift the earnings of our lower-wage workers and reduce income inequality in Singapore.  It is the right thing to do, but at the same time, it would have an impact on business costs. To cushion the impact on businesses, the Government has given transitional funding support to companies through the Progressive Wage Credit Scheme. 

8.     Another area which we can help to lower business costs is by reviewing our rules and processes, to make them smarter, better and faster.  We can look for ways to reduce compliance costs and improve operational efficiency.  It is a form of productivity improvement, and all tripartite partners can contribute to this effort and share the cost and time savings achieved. 

a.     I shared at the SMF New Year Conversations that from 1 April 2024, MPA will waive the need for security deposits and banker’s guarantees for billing parties with lower credit risk.  This move is expected to benefit about 80% of MPA’s existing billing parties, including many small-and-medium enterprises, and improve businesses’ cashflow by more than $20 million each year. 

b.     The move to digital bunkering can also help to reduce compliance costs and improve productivity, saving the bunkering industry up to 40,000 man-days per year.  To support companies in this transition, MPA has worked with other government agencies to make available funding support of up to 50% of eligible costs for early adopters of digital bunkering solutions, and up to 90% salary support for manpower reskilling.  MPA has also been actively engaging companies to guide the industry through the transition, and will continue to support companies and workers in this process.  This is a journey; we may not see the outcomes immediately, but we know this is the right direction to go. Once we are able to get most companies to adopt digital bunkering, the ecosystem as a whole can become better, smarter and faster.

c.     There are further areas we can review and improve, together with all of you.  To make our rules and processes more productive and more pro-business – save time, save costs, save effort for our companies and workers.  Please continue to share with us your concerns and pain-points, as well as your feedback and suggestions.  My colleagues from MOT and MPA will be very happy to hear your feedback. I can’t promise that we can resolve all the pain-points, but in the areas that we can, in partnership with all of you, we can make a positive difference. These rule changes and process improvements will all add up, and translate to time and cost savings to all of us.

d.     I have told my colleagues from MOT and our Statutory Boards to make this a priority area for our Ministry, as I believe these are practical ways to tap on our tripartite partnerships and work together to achieve win-win outcomes for everyone. 

9.     Besides business costs, we also understand that talent attraction and retention has been a growing challenge for our companies, especially for certain specialised and technical jobs such as seafarers and superintendents. 

10.    Building on the wide range of manpower development initiatives available, MPA and SMF are exploring setting up a joint office, to lead this effort and work even more closely with maritime companies and our unions to attract, retain and develop our maritime workforce.  I will share more about these plans during our Committee of Supply in early March, and also during the Singapore Maritime Week in April. 

Conclusion

11.    In conclusion, our maritime sector has done well over the years because, first, many of you in the industry have provided us with valuable feedback to allow us to make continuous improvements over the years. Please keep the feedback coming, and continue to work with us. We are not done building and growing our maritime sector.

12.    Second, it was because of our strong tripartite collaboration in tackling the challenges facing our industry.  A clear example was what we did together during COVID-19, when we came up with crew change arrangements quickly, because there was strong trust and partnership in our ecosystem. I hope this gives us the confidence that even for things that may seem challenging and difficult to achieve, we have a strong tripartite partnership that would give us the conditions to be able to innovate together, take risks together, and push through boundaries together. We must continue with this trusted partnership, which is one of our key competitive advantages for Maritime Singapore to thrive and succeed. 

13.    I wish everyone good health, good fortune, and a very happy Lunar New Year!  Thank you.