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As Singapore faces a complex global landscape, the 2025 Budget seeks to strike a balance between addressing immediate cost-of-living concerns and laying the groundwork for long-term economic resilience. With a moderate economic outlook and targeted support measures, the government aims to help Singaporeans adjust to new price realities while fostering confidence in the future.
Economic Context: Growth Amid Uncertainty
Singapore's economy grew by 4.4% in 2024, with the median income of resident workers rising 3.4% above inflation, bringing income inequality to its lowest level since 2000. Looking ahead to 2025, the outlook is more moderate, with growth projected at 1% to 3% and inflation expected to average 1.5% to 2.5%.
While Singapore has bounced back strongly from the Covid-19 pandemic, Prime Minister Wong notes that greater global uncertainty lies ahead, particularly due to intensifying US-China competition which will have ripple effects on other nations. However, he emphasises that despite these global challenges, Singapore stands in a far stronger position today than it did 60 years ago.
Key Measures
Direct Support for Households
- $800 CDC vouchers per household ($500 in May 2025, $300 in Jan 2026)
- U-Save rebates up to $760 for HDB households
- $500 LifeSG credits for children aged 12 and below
- $500 Edusave/PSEA top-ups for ages 13-20
- Increased ComCare assistance rates for lower-income households
- Climate vouchers increased to $400 for HDB households
- Climate vouchers now extended to private property owners.
Business Support
- 50% corporate income tax rebate (capped at $40,000)
- Minimum $2,000 tax benefit for companies with at least one local employee in 2024
- Higher wage co-funding through Progressive Wage Credit Scheme in 2025 and 2026
- New $1 billion Private Credit Growth Fund for high-growth enterprises
- Up to $150 million for Enterprise Compute Initiative to boost AI adoption
- Extended Senior Employment Credit till 2026
- $200 million additional funding for NTUC's Company Training Committee Grant
Infrastructure & Development
- $5 billion top-up to Changi Airport Development Fund
- $5 billion for Future Energy Fund
- $3 billion added to National Productivity Fund
- $1 billion for semiconductor R&D facility and one-north infrastructure
- $5 billion for Coastal and Flood Protection Fund
- New city campus for SUSS; The Singapore Universities Trust will be extended by 10 years to support fundraising for newer autonomous universities
Energy & Sustainability
- Active exploration of nuclear power, focusing on small modular reactors
- Target: One-third of electricity from imports by 2035
- New Heavy Vehicle Zero Emissions Scheme
- Electric Vehicle Charger Grant for heavy vehicles
- New road tax for electric heavy vehicles from 2026
- Climate vouchers increased to $400, extended to private property owners
Employment & Skills
- Training allowance up to $3,000/month for full-time courses
- $300/month for part-time upskilling from 2026
- New SkillsFuture Workforce Development Grant with up to 70% funding support for job redesign
- $10,000 SkillsFuture Enterprise Credit for eligible employers
- SkillsFuture Jobseeker Support: Up to $6,000 over 6 months
- Enhanced support for lower-wage workers through Workfare Skills Support
- CPF contribution rate increase by 1.5% for workers aged 55-65 from 2026
- Extended Senior Employment Credit till 2026
Read more at www.singaporebudget.gov.sg
While the global economic environment remains challenging, the 2025 Budget reflects the government’s commitment to supporting Singaporeans through these uncertain times. By addressing immediate cost-of-living pressures and investing in long-term social and economic resilience, the Budget aims to instill a sense of confidence and stability.
As Deputy Prime Minister and Finance Minister Lawrence Wong noted, “We are adjusting to new price realities, but we are doing so with a clear plan and a degree of confidence. Together, we will navigate these challenges and emerge stronger.”
The Singapore Budget 2025 aims to strike a careful balance between immediate relief and forward-looking investments. With targeted support for households, enhanced social safety nets, and measures to boost confidence, the government is laying the groundwork for a more resilient and inclusive future. As Singaporeans adapt to new economic realities, these measures provide both a cushion and a springboard for growth.
Stay tuned to The Financial Coconut for more in-depth analysis and updates on how the 2025 Budget will impact you and your family.
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