Budget 2025: S$5 billion top-up to Changi Airport Development Fund among measures to grow Singapore economy

SINGAPORE: A S$5 billion top-up to a fund to develop Changi Airport and a S$3 billion boost to improve productivity are among new measures to grow Singapore's economy. 

Singapore cannot afford to outbid major economies and will need to set aside sufficient resources to maximise its competitive strengths, said Prime Minister Lawrence Wong during his Budget 2025 speech in parliament on Tuesday (Feb 18).

He announced a S$3 billion (US$2.2 billion) top-up to the National Productivity Fund, which was established in 2010 to support initiatives to improve productivity and train workers. This follows a S$2 billion top-up in Budget 2024 and a S$4 billion top-up in Budget 2023. 

There will also be more investments in research and development (R&D) to the tune of about S$1 billion. 

These include a new national semiconductor R&D fabrication facility and a refresh of the public biosciences and medtech research infrastructure in the greater one-north area in Singapore's southwest.

Mr Wong, who is also finance minister, described R&D efforts as crucial in powering “innovation and technology engines”. 

The government has consistently invested about 1 per cent of Singapore’s gross domestic product annually in R&D over the last 20 years, he said. 

SUPPORT FOR LOCAL

Mr Wong also noted feedback on the Singapore Stock Exchange not being attractive, even for companies focused mainly on Singapore or Southeast Asia. 

An Equities Market Review Group was set up to work on this, and has developed its first set of measures which Mr Wong has accepted.

The recommendations include tax incentives for Singapore-based companies and fund managers that choose to list in Singapore and grow their economic activities here. 

A tax incentive for fund managers which invest substantially in Singapore-listed equities will also be introduced. This is to encourage more investment in Singapore’s capital markets. 

More support will also be provided for enterprises to scale up and compete on the global stage. 

To help companies adopt artificial intelligence solutions, up to S$150 million will be set aside for a new Enterprise Compute Initiative. Under this scheme, eligible firms will be partnered with major cloud service providers to access AI tools and computing power, as well as expert consultancy services. 

As part of efforts to support mergers and acquisitions, a scheme - allowing Singapore companies to make a qualifying acquisition of the ordinary shares of another company to claim tax benefits - will be extended to Dec 31, 2030. It was originally scheduled to lapse after Dec 31 this year.

Singapore's Economic Development Board also plans to launch a Global Founder Programme later this year, to encourage multinational entrepreneurs to anchor and grow more ventures in the country.

Mr Wong also noted the global emergence of a private credit market offering innovative financing solutions to enterprises. But few of these private credit funds focus on Asia or Singapore-based enterprises. 

As such, a new S$1 billion Private Credit Growth Fund will be introduced to provide more financing options for high-growth local enterprises. 

SUPPORT FOR CHANGI

In the area of connectivity, the completion of Changi Airport’s Terminal 5 will expand the airport’s capacity by more than 50 per cent, and ensure Singapore remains a “critical gateway for global travel and trade”, said Mr Wong. 

To ensure sufficient resources to develop Singapore's air hub, the Changi Airport Development Fund will be topped up by S$5 billion. 

With the President’s concurrence, the government will also provide a guarantee to Changi Airport Group. 

“This will help to lower the cost of borrowings needed to develop Terminal 5 and supporting infrastructure in Changi East,” said Mr Wong.