The government never makes unfunded promises that it cannot see through, said Prime Minister (PM) and Minister for Finance Lawrence Wong.
Nor will we borrow funds from somewhere else, kick the can down the road and leave behind a growing burden for the next generation, he added.
This level of responsibility and foresight extends to all aspects of governance. It is also what makes Budget 2025 sustainable, inclusive and bold.
Sustainable growth to keep up with future spending
The PAP government has always taken a long-term view of how it can grow its revenue sustainably. In Singapore, that means never putting all our eggs into one basket.
Illustrating this point during the Budget debate, MP Foo Mee Har (West Coast GRC) shared how an over-reliance on land sales in Hong Kong has forced their government into a ballooning deficit in the last few years due to the market downturn.
PM Wong reiterated the point about Hong Kong, reminding us that situations can change quickly and that a healthy fiscal position is not guaranteed.
“Our fiscal strength is a vital source of competitive advantage in these turbulent times…(it) will enable us to protect Singaporeans when it matters,” said PM Wong.
For that reason, the government is determined to ensure that Singapore can continue to grow its finances and keep up with future expenditures.
So far, Singapore has relied on a mix of progressive taxation and investment returns to fund public spending.
Corporate taxes, in particular, have provided a significant share of revenue as Singapore remains a competitive business hub. However, current global tensions will impact our open trade and business-friendly environment, and a boon on corporate taxes cannot be relied upon for long-term planning.
To address this, Budget 2025 aims to help Singapore maintain its competitive edge as a global hub. This year, the government will commit up to $150 million to the new Enterprise Compute Initiative to help businesses adopt AI solutions. It will also provide a $5bn top-up to the Changi Airport Development Fund to ensure our aviation sector remains at the top of its game.
“We make these proactive moves because we want to ensure Singapore remains a reliable and trusted partner in global trade and commerce,” said PM Wong.
And yet, none of this on its own is enough to sustain a competitive economy. The most important aspect of our economy is our people.
As such, Budget 2025 has taken a proactive approach to encourage lifelong learning and workforce transformation. From 2026, workers in selected full and part-time courses can receive a $300 monthly allowance. The government will also provide up to 70% of funding to support companies in job redesign.
“When we invest in and protect and equip our workers throughout life, our entire nation prospers,” said MP Patrick Tay (Pioneer SMC) in support of Budget 2025.
An inclusive Budget for all Singaporeans
The second hallmark that defines Budget 2025 is its inclusive nature. Year after year, the Budget seeks to uplift the most vulnerable groups in our society. This year is no exception.
To improve social mobility, the government has increased the rates of ComCare Assistance and the Fresh Start Housing Scheme to help more families living in rental flats own a home.
Furthermore, in line with the Enabling Masterplan 2030, the government will expand financial support for PwDs. Beginning next year, PwDs will be eligible for a dollar-to-dollar matching grant for cash top-ups to their CPF accounts and a special needs trust fund set up by their caregivers.
By MOF estimates, the bottom quintile of households receives $4 in benefits for every dollar of tax paid. Only the top quintile of income earners receives less benefits, or 30 cents, for every dollar of tax paid.
“This is what our system has achieved…a fair and progressive tax and redistribution system, anchored on our values of a fair and just society,” said PM Wong.
But ultimately, what makes Budget 2025 truly inclusive is that it is indeed a budget for all Singaporeans.
The $600 SG60 vouchers and $800 CDC vouchers, given to every Singaporean and household, will help alleviate some of the cost pressures. So will the $400 climate vouchers, which is now been extended to private property households.
The rationale behind such transfers sums up what Budget 2025, and the ones before it, strives to be. That is, while the government will provide more support to those with less, all Singaporeans can rest assured that they, too, will benefit from the nation’s progress.
Bold ideas for an uncertain future
In the end, Budget 2025 does not only tackle immediate challenges. It is also a Budget for the future.
A case in point is the $5bn top-up allocated to the Coastal and Flood Protection Fund and the Future Energy Fund.
It is how Singapore uses its financial strength to look 50 years ahead and develop bold and innovative solutions to address the twin challenges of climate change and energy security.
“This year’s Budget paves the way for us to chart Singapore’s next lap – to navigate uncertainties with gumption and strength, to address immediate challenges decisively, and to secure our long-term future with confidence,” said PM Wong as he concluded the Budget debate (28 Feb).
Sustainable, inclusive and bold. These characteristics sum up the essence of Budget 2025. Striking a balance between addressing today’s needs and pre-empting the problems in the future, Budget 2025 is what we need to secure a better tomorrow.
