Prime Minister (PM) Lawrence Wong delivered his Budget Singapore 2025 speech, titled Onward Together for a Better Tomorrow, noting the “remarkable journey” since Singapore’s independence, but also that a new “global contest” has begun with economic and trade barriers.
Despite that, Singapore will redouble efforts to grow its economy, even as it grew by more than 4% in 2024, he said.
“It will be hard to achieve the same level of growth as 2024, but if we can secure an average of 2-3% growth per annum over the next decade, we will be able to create better jobs and opportunities, and improve standards of living for all Singaporeans.”
To achieve this, PM Wong said the government will continue to uphold these fundamentals to help equip our workers and employers in the current global climate, and advance our growth frontier by :
- Maintaining sound monetary and fiscal policies;
- Harnessing market forces to drive efficiency and innovation;
- Staying open to people and ideas to strengthen capabilities; and
- Deepening tripartite partnership as a cornerstone of economic stability.
He added: “At the same time, our approach and strategy must adapt to changing circumstances.
“At this stage of development, we can no longer compete on cost alone. Instead, we must differentiate ourselves by producing high-value solutions for the world.”
As such, to help local workers and companies stay competitive, Budget 2025 will emphasise on development of:
- Technology and innovation;
- Singapore’s enterprise ecosystem; and
- Infrastructure investments amidst resource constraints.
PM Wong shared a belief that while Singapore may not operate on the same level as larger countries such as the United States, we do have strengths in some industries.
Singapore’s new generation of local tech companies such as Grab, Sea and Razer have established themselves as regional or industry leaders.
He also highlighted how Singapore supplies more than 10% of chips and produces one-fifth of semiconductor equipment worldwide, making it a key player in the semiconductor industry. It also makes more than 80% of the world’s DNA chips, which are unlocking new frontiers in life sciences.
Besides being a key node for the broader life sciences sectors, Singapore is also a major producer of advanced medical devices.
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Tech and AI will need Singaporean workers to embrace lifelong learning
Rapid technological advances, especially in artificial intelligence (AI), will transform workplaces and jobs, PM Wong said, especially with tools such as ChatGPT, and the rapidly expanding ecosystem of AI models.
He stressed the importance of equipping workers with the skills to stay competitive and relevant, and said the government will invest heavily in lifelong learning for Singaporeans, and strengthen SkillsFuture as a key pillar in its social compact.
In 2024, the SkillsFuture Level-Up Programme was introduced to support mid-career Singaporeans in acquiring new skills. Under this programme, all Singaporeans aged 40 and above received $4,000 in SkillsFuture Credit.
From March, participants of selected full-time courses can apply for a training allowance of up to $3,000 per month, PM Wong said.
Each worker can receive up to 24 months worth of allowance or up to $72,000.
PM Wong empathised that while some Singaporeans prefer to work while upskilling part-time, they still incurred training-related expenses such as books and transport.
As such, from Budget 2025, workers who fall under this category could receive a training allowance of $300 a month from early 2026.
More details will be shared by the Education Minister for Education at the Committee of Supply.
Enhanced upskilling support for lower-wage workers
The government will boost support for lower-wage workers, who will benefit from early upskilling, PM Wong says.
“Currently, the Workfare Skills Support Scheme is designed primarily to support short courses that are completed over a few days,” said PM Wong.
“But lower-wage workers stand to benefit more from longer-form courses that provide more substantial reskilling and upskilling.”
He said that an enhanced tier of support under the scheme will be introduced and this will be modelled after the SkillsFuture Level-Up Programme.
More details will be shared by the Manpower Minister at the Committee of Supply.
Strengthening support for those who lost jobs; more localised job matching
Workers who have lost jobs will receive support to get back on their feet as a new SkillsFuture Jobseeker Support scheme will kick off from April 2025, PM Wong said.
The scheme will provide financial support of up to $6,000 over six months to give workers assurance as they undergo training or search for jobs.
Career matching services arrangements will also increase, PM Wong added.
For example, localised job matching — for jobseekers who prefer workplaces near their homes — will be expanded to all Community Development Councils across Singapore.
For enterprises and employers
PM Wong acknowledged businesses are also affected by higher prices, as rent and labour costs edge up.
As such, Budget 2025 includes a 50% corporate income tax rebate. For non-profitable companies that may not benefit from this rebate, every active company that employed at least one local employee last year will be provided with a minimum benefit of $2,000, capped at $40,000 per company.
Besides the tax rebate, the government will also play a bigger role in co-funding the wage increases of lower-wage workers through the Progressive Wage Credit Scheme (PWCS).
The government will now co-fund wage increases by 40% in 2025, and by 20% in 2026, instead of the original 30% and 15% respectively.
Furthermore, the government will strengthen its enterprise ecosystem, PM Wong added, with more support given to enterprises to scale up, execute their growth plans and compete on a global stage.
In particular, Budget 2025 will extend the deadlines of support schemes for internationalisation and mergers and acquisitions.
New grants and redesigned SkillsFuture Enterprise credits for local employers to help transform their workforce
A new SkillsFuture Workforce Development Grant will be introduced to help companies restructure, transform and upgrade their workforce, revealed PM Wong.
This will bring together existing schemes by WorkForce Singapore and SkillsFuture Singapore, and simplify the application process for companies.
The new grant will also provide higher funding support of up to 70% for job redesign activities, he added.
The SkillsFuture Enterprise Credit will be also redesigned to make it more accessible for companies, PM Wong said.
The scheme, which helps employers defray out-of-pocket costs for enterprise and workforce transformation, is currently paid on a reimbursement basis.
“The revamped credit will operate like an online wallet,” PM Wong added.
“Companies can easily check how much credit they have. They will be able to use the credits to immediately offset out-of-pocket costs for eligible workforce transformation initiatives and courses, rather than do so on a reimbursement basis.”
Those with at least three resident employees will also get $10,000 in redesigned credit, which will be available in the second half of 2026.
Meanwhile, the current credit, which is due to expire in June 2025, will be extended till then.
Local employers to get wage offsets to hire senior workers
The Senior Employment Credit (SEC) will be extended by one year to end-2026, providing wage offsets for employers who hire Singaporean seniors aged 60 and over earning less than $4,000 a month.
The qualifying age for the highest SEC wage support tier will also be raised to 69 years old with effect from 18 February 2025, instead of the current age of 68.
The government will also reimburse companies up to 7% of the wages paid to workers aged 69 and above.
In addition, Budget 2025 will increase the CPF contribution rates for those aged above 55 to 65 by 1.5% in 2026. It will also continue to provide the CPF Transition Offset to employers for another year, to cover half of the increase in employer contributions for 2026.
This allows senior workers can build up their retirement savings, and businesses will get continued support from the government to cushion the impact on business cost.
The Ministry of Manpower will also convene a Tripartite Workgroup on senior employment later in 2025. It will take on a longer-term review of senior employment policies to improve the employability of seniors and increase the availability of jobs that better suit their needs, PM Wong said.
Giving ex-offenders a chance to get their careers back on track
To encourage more employers to hire ex-offenders, the government will extend the Uplifting Employment Credit to end-2028.
Introduced at Budget 2023, it supports employers when they hire ex-offenders by providing a wage offset.
PM Wong revealed that in 2024, it supported close to 700 employers in hiring more than 1,500 ex-offenders.
Enabling Employment Credit to be extended to help with hiring of people with disabilities
PM Wong revealed the government is looking into career pathways for people with disabilities transitioning to work life who may need more support to build their work readiness and adjust to an employment setting.
Employers who may be concerned about the costs and efforts required to redesign jobs and adapt their workplaces for people with disabilities will be provided with more support.
The Enabling Employment Credit will be extended to end-2028 to offset the wages of people with disabilities.
$3 billion top-up to National Productivity Fund
The National Productivity Fund (NPF) will be topped up with an additional $3 billion as part of Budget 2025.
Singapore must anchor more high-quality investments to enhance its technology and innovation engines, said PM Wong.
The fact is multinational enterprises have leverage and options to invest elsewhere, and that is why governments everywhere are still spending a lot of money to attract investments.
“We cannot afford to outbid the major economies. But we will need to set aside sufficient resources to maximise our competitive strengths,” said PM Wong.
Investment in research and development (R&D) infrastructure
More money will be poured into maintaining Singapore’s cutting edge in its R&D infrastructure, and the government will refresh its public biosciences and medtech research infrastructure in the greater one-north area, PM Wong said.
“This will provide state-of-the-art facilities, promote collaboration within our research community, and enable faster translation of research into commercial solutions,” he said.
In the semiconductor space, a new national semiconductor R&D fabrication facility will be developed. This will provide industry-grade tools for researchers and industry partners to prototype and test new innovations, PM Wong added.
These developments will cost about $1 billion.
Companies that undertake R&D and innovation in partnership with other stakeholders will also get support.
The government will also develop a new national semiconductor research and development fabrication facility.
This will provide industry-grade tools for researchers and industry partners to prototype and test new semiconductor innovations.
Up to $150 million to help enterprises use AI
PM Wong said up to $150 million will be set aside for a new Enterprise Compute Initiative that helps businesses harness artificial intelligence (AI) more effectively.
The initiative will support enterprises that need AI solutions tailored to their needs and integrated into their business processes and systems.
Under the initiative, eligible enterprises will partner major cloud service providers to access AI tools and computing power and expert consultancy services.
New $1 billion fund for high-growth local enterprises
Globally, there has been an emergence of a private credit market, which offers innovative financing solutions to enterprises, PM Wong revealed.
But few of these funds focus on Asia, much less Singapore-based enterprises.
As such, Budget 2025 will introduce a new $1 billion Private Credit Growth Fund.
The fund will provide more financing options for high-growth local enterprises, PM Wong said, adding that the Minister for Trade and Industry (MTI) will elaborate at the upcoming Committee for Supply.
PM Wong concluded: “Budget 2025 sets out clear plans for us to continue this journey with confidence.”
“The road ahead will not be without challenges, but I am confident our best days lie ahead of us.”
“Together, we can keep Singapore an evergreen oasis of stability, hope, and opportunity for all. Let us move onward together for a better tomorrow!”
(Image Credits: MDDI)
