Budget 2024: In S$131.4b 'Forward SG Budget', DPM Wong unveils first steps towards achieving 4G team's 'ambitious agenda'
Deputy Prime Minister Lawrence Wong in Parliament on Feb 16, 2024.
SINGAPORE — In what is expected to be his last Budget statement before he takes on the top job, Deputy Prime Minister Lawrence Wong gave Singaporeans a first look at how he plans to turn his team's "ambitious agenda" into reality, particularly with significant investments into helping workers retrain and bounce back from setbacks.
Mr Wong, who is also Finance Minister and is slated to take over Prime Minister Lee Hsien Loong’s role by November, termed this year's Budget the "first instalment" of the Forward Singapore (Forward SG) programmes.
Forward SG was a 16-month-long feedback exercise that canvassed the views of more than 200,000 Singaporeans and culminated in a report in October last year that serves as a road map for how the Government, under the fourth generation (4G) of Singapore's political leaders, aims to help Singaporeans fulfil their hopes and dreams in an inclusive society.
Tellingly, the Budget, which came some three months later, shared the same theme as the Forward SG road map: Building Our Shared Future Together.
"We have an ambitious agenda to achieve these shared goals," Mr Wong said.
"We have major plans to unfold over the coming years. Some are ready to be implemented now, others will require more time to study or to work out the implementation details."
In a speech that lasted more than 1.5 hours on Friday (Feb 16), Mr Wong outlined how this year's projected S$131.4 billion budget — comparable to last year’s S$130.8 billion — will go towards creating this shared future, which he noted is marked with a great sense of uncertainty.
"The international environment has darkened dramatically," he said, adding that the world is more fragmented and violent than ever.
“Through Forward SG, we aim to give more assurance to help Singaporeans navigate the uncertainties in today’s world, strengthen our sense of cohesion and solidarity, and keep our society together."
Beyond a S$1.9 billion enhancement to the Assurance Package to provide Singaporeans with short-term support to cope with cost-of-living pressures, Mr Wong also announced numerous initiatives and plans aimed at making longer-term shifts in society.
In a Facebook post on Friday evening, Prime Minister Lee Hsien Loong said that the measures, shaped as they were by the Forward SG exercise, seek to secure a fairer and brighter future for all Singaporeans.
"I hope the Budget will benefit everyone in one way or another, and reassure Singaporeans in an increasingly troubled world," he wrote.
EQUIPPING WORKERS FOR A WORLD IN FLUX
A central tenet of the Forward SG road map, to better support mid-career workers, was made concrete in this year's Budget with the announcement of significant investments that will help these individuals keep their skills sharp for a changing economic landscape.
All Singaporeans aged 40 and above will receive a S$4,000 top-up in SkillsFuture credits, and if they are enrolled in selected full-time courses, they can receive up to S$3,000 a month as training allowance.
In a world where rapid technological advancements will put jobs in constant flux, the Government will have to invest in its workers so that they may harness new technologies and realise their full potential, Mr Wong said.
Another significant move came in the form of a promise: The Government will soon launch a financial support scheme for workers who have been retrenched.
The decision represents a big shift for Singapore, as the Government has long resisted unemployment benefits, believing that such support might reduce people's motivation to find work.
However, on Friday, Mr Wong said that such support is necessary because technological changes will bring about more churn in the economy.
"Even when the economy as a whole is doing well, some businesses or even some industries may be suffering. In fact, it is not possible to have an economy that is dynamic and growing without failures and losses."
In some sectors, firms will have to let go of people, while in other sectors, new and better jobs will be created, he noted.
"We have to accept this reality, but it doesn’t mean we should be indifferent to the suffering caused when firms lay off workers."
ENSURING NO ONE IS LEFT BEHIND
Indeed, inclusivity — another key tenet of the Forward SG road map — was core to Mr Wong's speech, as he stressed that economic growth must and can go hand-in-hand with social mobility and support.
“By creating more paths towards equality and mobility, we also put ourselves in a better position for continued growth… In other words, a strong economy and a strong society to reinforce each other,” he said.
He added that his team embarked on the Forward SG exercise because he did not want Singapore to succumb to the harsh inequality seen in many parts of the world.
And so, in this year's Budget, he announced more measures to narrow the wage gap and "uplift" lower-wage workers.
One such initiative will grant Institute of Technical Education (ITE) graduates aged 30 and below a S$5,000 top-up to their Post-Secondary Education Account if they enrol in a diploma programme, and another S$10,000 top-up to their Central Provident Fund Ordinary Account if they attain their diploma.
To improve social mobility, Mr Wong announced more customised support for lower-income families with young children, with a new enhanced ComLink Progress package, where adults in the family can receive up to S$600 every quarter of the year, among other benefits.
“We will strengthen our system of risk pooling and social support, so that Singaporeans can be better assured through every life stage, and better equipped to bounce back from every setback,” Mr Wong said.
GROWTH, BUT NOT AT ALL COSTS
As he unveiled all the support schemes to nurture a more caring and inclusive society, Mr Wong did not mince words when it came to talking about the importance of economic growth, saying that the Government "makes no apology for pursuing growth".
"In past years, some had suggested that Singapore should slow down and not grow so quickly. Indeed, this was what happened last year — our economy grew by just about 1 per cent."
If the country were to experience similarly slow growth for several years in a row, "we will be in trouble", he warned.
"We will have no chance of improving our collective well-being. Singaporeans’ living standards will be dented. We will not be able to afford the social services we need. Lower-income workers and families will be hit the hardest."
To be clear, Mr Wong said that Singapore is not gunning for growth at all costs. After all, there is a limit to how fast the economy can grow due to the tighter constraints in land, labour and carbon.
Yet, growth at an average of 2 pr cent to 3 per cent each year over the next decade is possible by focusing on productivity and innovation, he added.
To that end, he announced various measures to attract high-quality and high-value investments into Singapore, including a new Refundable Investment Credit, which is a tax credit with a refundable cash feature.
This will support high-value and substantive economic activities, including the setting up or expansion of manufacturing facilities, new innovation and research-and-development activities, as well as activities that support the economy's green transition.
He also said that there would be significant investments to boost important sectors in Singapore's economy, including more than S$1 billion to be pumped into artificial intelligence talent and industry development.
BUILDING A 'STRONGER CULTURE OF GIVING'
Focusing back on the family, Mr Wong then spoke of the measures to boost retirement adequacy for seniors, support young couples waiting for their first home and help low-income families, especially those with young children.
He added that his team will look to fortify Singaporeans’ sense of resilience, solidarity and unity.
One way to do this would be through the arts and sports, and the Government will invest S$100 million over the next four years on Our SG Arts Plan, which aims to make the arts more accessible to all Singaporeans.
There will be a S$20 million top-up for the One Team Singapore Fund, which provides dollar-for-dollar matching for donations to Team Singapore athletes.
And to assist Singaporeans doing good for others outside of the country, there will be a new Overseas Humanitarian Assistance Tax Deduction Scheme, which will provide 100 per cent tax deductions for cash donations made towards designated charities for overseas emergencies.
“A stronger culture of giving will bind us closer together and make us a more caring and gracious society," he said.
Many countries find it hard to execute bold and long-term plans to adapt to the changing world but Singapore is uniquely positioned to succeed, Mr Wong added.
"We are able to do so because our fiscal position is healthy and sustainable, our Government has the trust of Singaporeans, our people are united and our social compact is strong."
