Singapore's New Budget: A Path to Economic Resilience and Sustainability

Singapore is set to deliver its first budget under its new prime minister, marking a significant shift in fiscal policy and a commitment to economic resilience and sustainability. The budget, expected to be announced in February 2025, is poised to address the challenges posed by an aging population and workforce, while fostering growth and competitiveness. Here's what to expect from the upcoming budget.



Addressing the Aging Population and Workforce

The new budget is expected to introduce measures aimed at supporting the aging population and workforce, ensuring that Singapore remains competitive in the global economy. Key initiatives include:

1. SkillsFuture Enhancement: The SkillsFuture initiative will be enhanced to support younger Singaporeans with more comprehensive upskilling programs. This will help the workforce adapt to changing job demands and maintain competitiveness in the global economy (Maybank, 2025).
2. Large Families Support Scheme: Details of a new Large Families support scheme will be unveiled, targeting large families and the "sandwiched" groups with both elderly and child dependents. This scheme aims to provide financial assistance and support for these groups, helping to alleviate the burden of caring for multiple generations (Maybank, 2025).
3. Child Development (CDA) and Edusave Account Top-ups: The budget may include top-ups to Child Development (CDA) and Edusave Accounts to help cover children's education expenses. This will support families with young children and encourage investment in their future (Maybank, 2025).
4. Medisave Top-ups: The budget may also include Medisave top-ups to help defray the cost of medical care for the elderly. This will provide financial support for seniors and help ensure they have access to necessary healthcare services (Maybank, 2025).

Fostering Economic Growth and Competitiveness

The new budget is expected to focus on improving economic competitiveness and supporting various sectors. Key areas likely to receive increased or decreased funding include:

1. Increased Funding:
* SkillsFuture: Enhanced to support younger Singaporeans with comprehensive upskilling programs.
* Large Families Support Scheme: Details of a new scheme to support large families and "sandwiched" groups.
* Rebates for Corporate Tax and Property Tax: Given the stronger-than-expected fiscal revenue in FY2024, rebates for corporate tax and property tax on commercial and industrial properties are expected. This will provide relief to businesses, encouraging investment and growth (Maybank, 2025).
* Infrastructure and Public Transport: Increased funding for infrastructure projects and public transport, enhancing connectivity and efficiency (KPMG in Singapore x SID SG Budget 2025 Proposal).
2. Decreased Funding or No Mention:
* Cooling Measures or Wealth Tax: The government is not expected to announce new cooling measures or wealth taxes in the new budget, as they will wait to see the impact of increased housing supply on prices (Maybank, 2025).
* En Bloc Rules: While there may be a relaxation of en bloc rules to revive en bloc sales and rejuvenate older projects, this is not expected to significantly impact the budget (Maybank, 2025).

The new budget is expected to provide a comprehensive roadmap for Singapore's economic resilience and sustainability, addressing the challenges posed by an aging population and workforce while fostering growth and competitiveness. By investing in human capital, infrastructure, and targeted support for vulnerable groups, the new prime minister aims to secure Singapore's position as a leading global economy.