Budget 2025 debate: MPs discuss GST hike, support for families, caregivers and seniors

SINGAPORE: Members of Parliament (MPs) on Wednesday (Feb 26) discussed extensively the impact of the Goods and Services Tax (GST) hike, as well as government support for families and the labour force.

A total of 28 MPs and Nominated MPs spoke on day one of the Budget debate, which lasted about seven hours. 

The debate kicked off on Wednesday and is expected to last until Friday. More than 50 MPs are expected to speak before Prime Minister Lawrence Wong wraps up. 

Mr Wong, who is also the finance minister, delivered his Budget speech on Feb 18. He unveiled measures including new schemes for large families with more than three children, an SG60 package, as well as support for mid-career workers.

Political observers said this year's Budget is more generous than previous ones in election years, such as in 2020 and 2015.

They described it as a "feel-good" Budget that will sweeten the ground for the upcoming General Election, which must be held by November.  

Singapore citizens aged 21 and above will receive cash vouchers of up to S$800 (US$600) each to mark the country's 60th birthday and Mr Wong also announced personal income tax rebates and a baby gift for newborns this year. 

He also unveiled a range of measures to grow Singapore’s economy, including a S$5 billion top-up to the Changi Airport Development Fund and up to S$150 million for a new Enterprise Compute Initiative.

GST HIKE SPARKS DEBATE

Leader of the Opposition and Workers’ Party (WP) chief Pritam Singh criticised the government for its decision to proceed with the GST hike given the country's "exceedingly healthy" fiscal position.

The government has projected a fiscal surplus of S$6.8 billion for the 2025 financial year. For FY2024, the surplus was revised from an original estimate of S$778 million to S$6.4 billion.

Non-Constituency MP and Progress Singapore Party (PSP) chief Hazel Poa echoed Mr Singh's sentiments, arguing that the GST increase has contributed to the higher cost of living in Singapore.

“Let us also not forget that larger surpluses that go into the reserves mean bigger cost burdens on taxpayers when the government collects more than is needed to spend on public programmes,” she said. 

MP Foo Mee Har (PAP-West Coast) said questions about whether the GST increase could have been delayed was “20/20 hindsight”. The unexpected surplus was primarily due to strong corporate income tax revenue, she added. 

It is prudent to maintain “fiscal dry powder” to respond to unexpected economic shocks, said Ms Foo. 

She also criticised proposals from WP and PSP to fund recurring expenses through land sales. 

“Had we followed this path, Singapore could be facing the same fiscal vulnerabilities as Hong Kong today,” said Ms Foo, adding that Singapore’s approach is more stable and forward looking. 

SUPPORTING FAMILIES AMID DECLINING BIRTH RATE

MP Lim Biow Chuan (PAP-Mountbatten) welcomed the financial support for large families but questioned its effectiveness in encouraging couples to have more children.

If this is the scheme's goal, the government must "go back to the drawing board" to understand why many couples are not having children.

Singaporeans lead lives that are stressful and they need to redefine success, said Mr Lim. 

Adding that he has received emails from ministers late at night, he pointed out: “If the entire civil service were to follow the lead of their ministers, then sadly, all of us will have a stressful life.” 

He urged the government to review the culture of working long and stressful hours and conduct a “thorough study” on whether better lifestyles would allow Singaporeans to consider having bigger families. 

In 2023, Singapore’s resident total fertility rate dropped below 1.0 for the first time.

The PSP believes that the Large Families Scheme will not raise the total fertility rate, said Ms Poa. 

Instead, Singapore needs structural changes that will incentivise employers to be more family friendly and to create better work-life balance, she added. 

The number of public holidays has remained unchanged since 1968, when the government reduced the total from 16 to 11 to “improve Singapore’s competitiveness”, she noted. 

Now that Singapore faces “new problems” that affect families, she proposed increasing the number of public holidays from 11 to 14, with one additional holiday for each of the three major races in Singapore. 

MP Louis Ng (PAP-Nee Soon) asked for a review of Singapore’s paid annual leave policy, where the minimum entitlement is seven days per year.

Annual leave helps to build a Singapore made for families and is good for mental health, he said, highlighting that lower-income workers tend to have fewer days of paid annual leave. 

“The ability to rest and take care of our loved ones should not be a luxury. Our lower-income workers deserve more days of annual leave,” he said.

MP Hany Soh (PAP-Marsiling-Yew Tee) said the financial assistance under the Large Families Scheme is good, but it is not enough to offer support just to families with three or more children.

“To encourage young couples to start and grow their families, I believe we must address a broader range of needs,” she said, outlining five key areas of fertility support, more guidance for first-time parents, caregiving networks, flexible work arrangements and support for working mothers.

HELP FOR CAREGIVERS AND SENIORS

Several MPs also asked for more support for caregivers and to address the needs in Singapore’s ageing society. 

MP Yip Hon Weng (PAP-Yio Chu Kang) and MP Joan Pereira (PAP-Tanjong Pagar) welcomed the increase in the Home Caregiving Grant, which will go up from S$400 to S$600 a month for eligible households, but said more can be done.

Ms Pereira said some people take care of their elderly parents despite not staying with them, and asked if the parents can be included in the per capita household income calculation in such cases so that the families may be eligible for extra financial support.

Mr Yip said more structural support is needed. He suggested that a co-working hub be set up for caregivers to work remotely or upskill while their loved ones receive care.

More funding could also be given to caregivers to gain professional certification in areas such as dementia care, physiotherapy and mental health support.

For seniors, Mr Yip called on the government to do more so they can age in place, suggesting a retrofit fund for blocks without direct lift access.

Acknowledging that there are concerns about cost effectiveness and technical constraints, he said: “I have to ask - are these considerations more important than the daily hardship faced by our seniors?”

Mr Yip also asked the government to tackle ageism in hiring and to redesign workplaces to be inclusive of older workers.

He said that seniors gave their best years to Singapore and built homes, industries and institutions.

“This is the Singapore they built. This is the Singapore we must now build for them,” he said.

The Budget debate will continue on Thursday.