People may have racial preferences, and that in itself is not racism, said Home Affairs and Law Minister K. Shanmugam yesterday.
But if they bring it out into the public sphere and impose it on others, then it crosses the line, he added.
"You should call it out, you should frown against it, and you should take action if it breaches the law. Because it is cancerous, it is divisive, and it undermines the values of our society," he said.
He was speaking on the Singapore Today programme on radio station CNA938, following a recent spate of racial incidents.
Last Saturday, polytechnic lecturer Tan Boon Lee, 60, lashed out at an interracial couple in Orchard Road and said Indian men should not be "preying on Chinese girls".
Business owner Dave Parkash, 26, and his girlfriend, Ms Jacqueline Ho, 27, the target of the comments, filmed the encounter and later posted the video on Facebook.
The open display of racist behaviour, among several other recent incidents, has sparked criticism and debate. Asked by the radio presenters if racial harmony is under threat in Singapore, Mr Shanmugam said he did not think so.
"Name me a society where there is no racism which is multiracial," he said, adding Singapore has made tremendous progress in building racial harmony and is better than most other multiracial societies.
He noted that Singapore's leaders have always recognised the existence of racism here, whether in the form of deep racial fault lines, outright racism, or even overt racial preferences, and stressed that the key is in mitigating it.
"Many of the Government's policies proceed by accepting that there is both racial preference, as well as racism, and how do we mitigate that to make sure that meritocracy works, and that people of all races have fair opportunities," he added.
The incident involving Mr Parkash and Ms Ho, which is being investigated by the police, has also sparked discussion about whether Singapore's longstanding CMIO - Chinese-Malay-Indian-Others - classification framework may be an issue.
Asked what role the Government plays in safeguarding religious harmony, Mr Shanmugam said: "It's not a subtraction from Singaporeans to say, "I'm an Indian", "I'm a Chinese", "I'm a Malay", or sub-identities. Those are extremely important. They give us our cultural ballast. We are what we are."
But he said there was a need to build on the common identity even as people recognise, accept and emphasise their individual identities.
"We need to have that common vision to say, look, we want to build a system based on justice, equality, meritocracy, and where everyone can feel equal, and everyone can feel protected. The Government has a huge role in articulating that vision and being fair," he added, noting that this requires effort from society, people and institutions as well.
The minister noted that some people have criticised the Government for investigating those who respond to racist behaviour with racist remarks of their own. He said: "These sentiments are somewhat hypocritical... You don't respond to what you say is racism by your own racist remarks, by being racist yourself. So, we call that out."
He added if the Government lets it slide when an Indian or Malay person responds to racism by a Chinese person with racist remarks of their own, then the next time the tables are turned, the Government may find itself constrained when it wants to take action.
Some commentators have suggested that racist language, when employed as satire by minority races to call out the majority race, should not be treated as racism.
Said the minister: "Rule of law means the law applies to all - majority and minority - equally. Have we applied the law fairly? Do people believe that we are applying the law fairly? Across all races, is everyone protected? If they believe that, then people will say I accept the operation of the law."
Mr Shanmugam added that while the recent incidents should not be over-dramatised as signalling a breakdown in racial harmony, they have led him to question if the country is still heading in the right, "positive" direction.
"Are we sure that we are progressing in the right direction?" he said. "So it's a direction that I am concerned about."
Asked whether social media has made things worse, he said such incidents have happened but had not had as much publicity in the past.
"We must also accept that things are different now. People, and racial sensitivities, are also heightened, and there have been more in-your-face incidents," he added.
"I am not quite able to say that's only because of social media."