Budget 2024: In S$131.4b 'Forward SG Budget', DPM Wong unveils first steps towards achieving 4G team's 'ambitious agenda'

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.

In fact 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 over 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 of Singapore's political leaders (4G), aims to help Singaporeans fulfil their hopes and dreams in an inclusive society.

Tellingly, the Budget, which comes some three months later, shares 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, adding: "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 over one-and-a-half hours on Friday (Feb 16), Mr Wong outlined how this year's projected S$131.4 billion (US$97.5 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 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 announced a slew of initiatives and plans aimed at making longer-term shifts in society.

In a Facebook post on Friday evening, Mr Lee said 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 into helping 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 each month as training allowance, Mr Wong announced. 

In a world where rapid technological advancements will put jobs in constant flux, the government will have to invest in its workers so they can harness new technologies and realise their full potential, he said.

Another significant move came in the form of a promise: Mr Wong said the government will soon launch a financial support scheme for those who have been retrenched. 

The decision represents a big shift for Singapore, as the government has long resisted unemployment benefits, believing such support might reduce individuals’ motivation to find work.

But on Friday Mr Wong said such support is necessary as 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. 

Mr Wong said 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 a further S$10,000 top-up to their Central Provident Fund (CPF) ordinary account if they attain their diploma. 

To improve social mobility, Mr Wong also 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, 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,” said Mr Wong. 

GROWTH, BUT NOT AT ALL COSTS

Even as he unveiled a slew of 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 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," he noted.

But if the Republic were to experience similarly slow growth for several years in a row, "we will be in trouble", he added.

"We will have no chance of improving our collective wellbeing. 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 Singapore is not gunning for growth at all costs. After all, there is a limit to how fast Singapore can grow due to the tighter constraints it faces in land, labour and carbon. 

But growth at an average of 2 to 3 per cent each year over the next decade is possible through focusing on productivity and innovation, he said.

To that end, he announced various measures to attract high-quality and high-value investments into Singapore, including a new Refundable Investment Credit, 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 and activities that support the economy's green transition.

He also announced significant investments to boost important sectors in Singapore's economy, including over S$1 billion into artificial intelligence talent and industry development.

BUILDING A HOME TO BE PROUD OF

Focusing back on the family, Mr Wong announced a slew of 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 also look to fortify Singaporeans’ sense of resilience, solidarity and unity. 

One way to do this is through the arts and sports, he said, announcing an investment of S$100 million over the next four years on Our SG Arts Plan, which aims to make the arts more accessible to all Singaporeans, and a S$20 million top up for the One Team Singapore Fund.

This fund provides dollar-for-dollar matching for donations to Team Singapore athletes. 

And to assist Singaporeans doing good for those overseas, Mr Wong introduced a 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.

Mr Wong said many countries find it hard to implement bold and long-term plans to adapt to the changing world but Singapore is uniquely positioned to succeed.

"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."

This article was originally published in TODAY.