How Singapore is supporting businesses and workers amidst global uncertainties: PM Wong's Budget 2025 Debate round-up speech

Prime Minister and Minister for Finance Lawrence Wong also addressed two other major concerns, such as whether Singapore has become overly conservative in its fiscal projections and plans, especially in light of the country’s surplus position.

Earlier in February, Prime Minister Lawrence Wong delivered his Budget speech and shared some of the ways he hopes to defray the concerns of Singaporeans through:

• Supporting businesses in alleviating cost pressures
• Supporting employees 
• Supporting persons with disabilities 

In his Budget debate round-up speech on 28 February 2025 (Friday), PM Wong addressed three main issues:

• How is the Government supporting businesses and workers to navigate Singapore’s new economic reality?
• How is the Government helping its people cope with the strains and stressors of life?  
• Is Singapore overly conservative in its fiscal projections and plans?  

Here is a rundown of what he shared during his speech:

How should Singapore navigate its new economic reality?

Navigating global challenges

PM Wong highlighted that the global system is undergoing significant change. The multilateral trading system is weakening due to rising protectionism and unilateral measures, with countries increasingly focused on defence and security. This shift has led to zero-sum competition rather than win-win cooperation.

“All these will disadvantage small and open economies like Singapore,” PM Wong stressed.

While major powers claim to avoid conflict, they are preparing for it, PM Wong added, acknowledging the need for a robust industrial base.

“In particular, the Western countries feel they are at a disadvantage. And it’s not difficult to see why.

“Twenty years ago, China accounted for about 9% of global manufacturing output. Now, it accounts for one-third of global manufacturing output. That’s more than the next three countries – the US, Japan, and Germany – put together. China alone,” the Prime Minister highlighted.

To stay competitive, Singapore is strengthening productivity, infrastructure, and innovation. These efforts are aimed at creating better jobs and opportunities for Singaporeans. PM Wong also noted that heightened scrutiny on high-tech activities is expected as key technology players seek to control proprietary innovations.

While Singapore does not enforce unilateral export controls, it will address concerns proactively to remain a trusted and reliable global trade hub. In today’s fragmented world, staying open is more important than ever, PM Wong affirmed.

Helping firms transform

Another key point PM Wong emphasised was the need for continued productivity improvements in Singapore’s economy, citing that while the island’s “labour productivity has been growing at around 2% per annum over the past decade from 2014 to 2024”, domestic-oriented sectors still have room for improvement.

He acknowledged SMEs’ concerns over high business costs but stressed that factors such as land, energy, and labour costs are shaped by economic realities. He added that wage increases must also align with productivity gains, citing the Progressive Wage Model as a form of structured upskilling that is benefitting Singaporeans in the long term.

To help firms adapt, the Government is offering corporate income tax rebates, co-funding wage increases under the Progressive Wage Credit Scheme and reviewing regulations to cut compliance costs. More importantly, Singapore is focused on helping companies consolidate, restructure, and transform. Adding to this point, PM Wong cited Phoon Huat’s evolution from a single shop to a multi-channel business as an example of successful transformation through e-commerce and innovation.

New initiatives, such as the SkillsFuture Workforce Development Grant, the refreshed SkillsFuture Enterprise Credit, and Enterprise Compute Initiative, as PM Wong highlighted, were introduced in response to industry feedback. He also mentioned ongoing efforts to increase SME awareness and accessibility to support schemes, assuring that additional funding would be made available if needed.

Beyond SME support, Singapore is developing a “pipeline of promising enterprises”, some of which he noted will “eventually grow to become global companies of the future”, with multinational corporations playing a role in enterprise growth. Partnerships between local firms and MNEs can open new market opportunities, while global entrepreneurs and homegrown businesses continue to drive innovation.

Additionally, Singapore’s enterprise ecosystem has strengthened over the years, but further transformation is needed to stay competitive.

“So on the whole, if you look at our enterprise ecosystem today compared to 15 years ago, I would say things have improved considerably. But there’s still much more we need to do, and we will press on with our efforts.”

Creating good jobs

PM Wong addressed the need for firms to transform amid constant industry changes, recognising the impact on jobs and workers’ concerns.

“With constant industry transformation, we can expect more churn in workplaces – existing jobs will be re-designed and new jobs will be created,” he stressed.

The Government supports this effort by strengthening SkillsFuture, introducing initiatives like the SkillsFuture Level-Up Programme and the Jobseeker Support Scheme. Additional measures include developing Singaporean corporate leaders and enhancing senior worker employment.

PM Wong acknowledged that transformation is challenging but assures that resources will continue to be allocated to help firms restructure, innovate, and create better job opportunities for Singaporeans.

“The Government will do more to better support Singaporeans, young and old, to better equip everyone for the changes in our economy.”

Support for Singaporeans as they cope with the stresses and strains of life

PM Wong addressed concerns about cost-of-living pressures, emphasising that inflation was primarily driven by global factors, not the GST increase. He pointed out that CPI inflation actually moderated from 6.1% in 2022 to 2.4% in 2024.

Acknowledging ongoing cost pressures, he highlighted temporary relief measures such as CDC Vouchers and the SG60 surplus sharing package but stressed that "these are temporary help measures; they are not long-term solutions."

PM Wong reiterated that the Government’s priority is ensuring Singaporeans achieve higher real incomes through a strong economy and productivity gains. He affirms, "A much larger part of our spending is in structural programmes – especially to equip and empower Singaporeans; through education, skills training, skills upgrading, job training, and the significant moves we are making on SkillsFuture.

“All this will ensure Singaporeans do not just receive help, but are able to stand on their own feet and seize better opportunities for themselves and thrive in a rapidly changing world."

He also emphasised ongoing efforts under Forward Singapore to strengthen social support systems, covering education, retirement, healthcare, and housing, ensuring that "no one is left to fend for themselves in Singapore” and to provide more support for the disadvantaged and vulnerable groups, as well as provide greater assurance to Singaporeans across every life stage on their basic needs.

Other ways that PM Wong shared that the Government is building a strong and sustainable social support system in Singapore are as follows:

• Balancing economic and social considerations
  • Proper pricing of resources to ensure sustainable policies.
  • Government subsidies targeted for affordability, such as HDB housing.
• Sustainable housing policies
  • BTO flat prices aligned with median income growth, not market spikes.
  • Government absorbs housing subsidies to maintain affordability.
  • Cooling measures (ABSD hikes, land sales) to stabilise property markets.
• Progressive strengthening of social policies
  • Universal access to education, CPF for retirement, and government healthcare subsidies.
  • Workfare for lower-wage workers, Silver Support for vulnerable seniors, and SkillsFuture for lifelong learning.
  • CPF ensures self-funded retirement with government-backed interest rates.
• Retirement adequacy & CPF enhancements
  • CPF ensures self-funded retirement with government-backed interest rates.
  • Extra support through Workfare, Progressive Wages, and the Majulah Package.
  • ITE Progression Award to uplift wage trajectories of ITE graduates.
• Ensuring fiscal sustainability
  • Close monitoring of property and social spending to prevent financial strain.
  • Review of CPF investment schemes to balance returns and risk.
• Future-ready social compact
  • Adjusting policies to meet evolving needs (e.g., support for second-timers and singles in housing).
  • Continued enhancements to retirement schemes in response to increased life expectancy.

PM Wong also elaborated on how the Government is hoping to ensure no Singaporean is left behind:

Support for families 

• MPs emphasised the need for financial and leave support for families.
• Suggestions on improving leave arrangements were widely discussed.

Inclusive hiring & employment support 

• Calls for better employment opportunities for persons with disabilities. 
• A comprehensive study on post-18 pathways for people with disabilities is underway.

Support for seniors 

• Focus on helping seniors age well and stay engaged. 
• Ongoing initiatives and Budget allocations to support elderly care. 

Caregiver support 

• Recognising diverse caregiving arrangements within families. 
• Financial and non-financial support for caregivers, including an enhanced Home Caregiving Grant. 
• Continued review of caregiver support policies. 

Means testing & social support 

• MPs raised concerns about improving means testing criteria. 
• Discussions on income-based and wealth-based assessments for fairer eligibility. 

Support for specific groups 

• Calls for better support for freelancers, agency workers, and working mothers. 
• Advocacy for mental health awareness and accessibility. 
• Ensuring inclusivity in arts and sports. 

Ongoing public engagement 

• Commitment to engaging Singaporeans through citizen panels and participatory platforms. 
• Willingness to explain when certain proposals cannot be implemented. 

Government's commitment to social spending

• Social spending exceeds spending on the economy and security combined. 
• Expectation of increased spending due to an ageing population and healthcare needs. 

Shared responsibility in social support 

• Government efforts must be complemented by community involvement. 
• Increased support for charities and social service agencies. 
• Emphasis on mindset shifts: 
  • Encouraging healthy lifestyles to manage healthcare costs. 
  • Promoting lifelong learning through SkillsFuture initiatives. 

Strengthening the social compact 

• Forward Singapore aims to foster a united, inclusive society. 
• Encouraging shared responsibility to support and uplift all Singaporeans. 

Are we overly conservative in our fiscal projections and plans?

Addressing the final issue, PM Wong focused on Singapore's fiscal projections, conservative budgeting approach, and the necessity of tax increases, particularly the GST hike. The government defends its approach, emphasising responsible financial planning, long-term stability, and the need to secure funding for future expenditures like healthcare and infrastructure.

The unexpected surplus in FY2024 and FY2025 attributed to stronger-than-expected economic performance and increased corporate tax collections. Despite the concern and raised queries on the need for tax increases, the Government argued that without them, deficits would have emerged. Instead, PM Wong assured that it maintains that surplus funds will be reinvested for Singapore’s future needs, ensuring fiscal sustainability.

To conclude, PM Wong shared:

“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. It is a Budget put together by Singaporeans, with Singaporeans, for all Singaporeans.”

Lead image / Parliament's YouTube

Infographics / MOF Singapore