Saturday, 19 April 2025

3 takeaways from Singapore leaders’ blockbuster foreign policy speeches

Major speeches by PM Lawrence Wong and SM Lee Hsien Loong offer a clear-eyed view on global transition and commitment to multilateralism, and link political stability to diplomatic strength.
By Bhavan Jaipragas, The Straits Times, 19 Apr 2025

If this were a routine April – not the tense run-up to what could be a bruising general election – the back-to-back heavyweight foreign policy speeches from Singapore’s top two political leaders would still have those who watch the Republic closely sitting up and taking notice.

Singapore’s friends and partners near and far are surely watching for clues about how the long-time stewards of this city-state – resource-poor and smaller than New York City – intend to navigate the accelerating decline of the world order under which it has risen to become one of the world’s wealthiest, most stable societies with the ability to underwrite its own defence.

For that purpose, the speeches – first by Senior Minister Lee Hsien Loong in a dialogue with union leaders on April 14, and then by Prime Minister Lawrence Wong at the S. Rajaratnam Lecture on April 16 – offer, between them, as complete a picture as practicable to a public audience on the ruling PAP’s view of geopolitics and its foreign policy approach.


Both addresses, along with Mr Wong’s speech at the April 17 PAP manifesto launch – which also touched on the state of the world – are meaty enough to be studied from various angles.

For me, three important observations stand out.

Govt’s clear-eyed perspective

First, it is quite clear that Singapore’s leadership rejects a simplistic reading of the global landscape. Despite Washington’s current erraticity under President Donald Trump – with sweeping tariffs announced then suspended, threats of sectoral tariffs, and adamance that America will no longer be the world’s policeman – the Singapore Government does not view this as a neat pendulum swing of power.


My interpretation of Mr Wong and Mr Lee’s remarks is unambiguous: the establishment firmly rejects the notion that the crumbling of the US-led global rules-based order automatically crowns China as the new leader, or that we can expect a comfortable multipolar balance, with China and other powers harmoniously filling the vacuum.

This stands in contrast to certain domestic voices that have begun flirting with a more optimistic view – that Singapore and other Asian nations might actually benefit from this geopolitical disarray, that there is some inherently benign quality to what they claim is an organised multipolar order taking shape.


The perspective championed by countries like India, particularly through its erudite Foreign Minister S. Jaishankar, who has voiced considerable optimism about a new multipolar world order – arguing that “the virtues of the old world order are exaggerated” – has gained notable traction here in Singapore.

Yet what works for a middle power like India cannot be transplanted to Singapore’s context. For a small trade-reliant nation thoroughly integrated into the world economy – and critically dependent on both China and the US – adopting such a view borders on the foolhardy.


Mr Lee’s speech crystallises this reality.

Even as America retreats from its global policeman role, there remains firm bipartisan consensus among its political elite that China represents a “pacing challenge”.

Consequently, American policymakers “are trying very hard to stay ahead of China and to prevent China from overtaking them”. This intensifying great-power competition will inevitably inflict collateral damage on trade-reliant countries like Singapore.


The speeches offer no comforting illusions that whatever emerges from this messy transition will necessarily benefit us.

The Prime Minister’s assessment is sobering in its clarity: Mr Wong noted that “nobody can tell” what world order we are transitioning towards, even though we know that transition is under way.

Indeed, even as we witness daily evidence of transformation through market turbulence and policy pronouncements from Washington – met with counter-responses from other capitals – there remains simply too much uncertainty. We cannot predict global conditions one month from now, let alone a year ahead or by the end of Mr Trump’s term in January 2029.


Mr Wong put it like this: “America is stepping back from its traditional role as the guarantor of order and the world’s policeman. But neither China nor any other country is willing – or able to – fill the vacuum.”

He added: “So nations are turning inward, prioritising their own narrow interests. The once-rising tide of global cooperation that defined the past decades is giving way to one of growing competition and distrust. And as a result, the world is becoming more fragmented and disorderly.”

Maintaining the global commons

Much ink has been spilt on why this changing world order is detrimental to a small city-state like Singapore. In essence, when the rule of law gives way to the law of the jungle – where big powers dominate and equal treatment becomes a thing of the past – the voices of smaller nations are inevitably silenced.

Our interests become perilously easy to trample. After all, why would global heavyweights concern themselves with Singapore’s welfare when no binding framework compels them to?


Mr Lee illustrated this reality while discussing the Trump administration’s abandonment of the decades-old Most Favoured Nation trading principle – which requires non-discrimination among World Trade Organisation members – in favour of reciprocal tariffs.

This shift, he suggested, reflects a fundamentally transactional world view that prizes “win-lose” outcomes where raw power determines results.

“Why not we treat this one-on-one, like arm wrestling. Let’s see who has got more biceps, who has got a stronger arm, and we will see who is stronger. We will get more that way,” Mr Lee said, capturing the essence of this Trumpian approach to international relations.

Yet Singapore’s response to this troubling landscape constitutes the second major takeaway from these speeches – particularly from Mr Wong’s lecture.


Rather than merely lamenting the erosion of the stable, rules-based global system from which it has benefited profoundly, Singapore’s foreign policy establishment recognises the challenge and is responding to it.

The contrast is striking: while America is reportedly slashing the State Department’s budget by nearly 50 per cent, shuttering numerous diplomatic missions, decimating its diplomatic corps, and withdrawing funding from virtually all international organisations, including the United Nations, Singapore is moving deliberately in the opposite direction, strengthening its international engagement.

Crucially, Singapore does not stand alone in this endeavour. It has cultivated a network of like-minded partners, equally committed to preserving multilateral frameworks and international law – laying essential groundwork for whatever more stable global order might eventually emerge.

These efforts may appear technical or esoteric to casual observers, but they represent the painstaking work of nations committed to enhancing global cooperation rather than undermining it.

Mr Wong highlighted several concrete initiatives: Singapore’s leadership role, through Ambassador Rena Lee, in guiding UN negotiations on the High Seas Treaty on biodiversity; the creation of the Financing Asia’s Transition Partnership, a blended finance platform designed to channel private capital towards Asia’s decarbonisation efforts; and the establishment of a specialised Development Partnership Unit within the Ministry of Foreign Affairs to coordinate assistance to developing nations and deepen international collaborations.


Mr Wong also noted how Singapore is simultaneously reinforcing Asean integration, working to forge closer cooperation with the grouping and other multilateral blocs such as the European Union, while expanding its global footprint bilaterally as well – with plans to establish new diplomatic missions in Africa and Latin America in the coming years.

Collectively, these initiatives send a powerful message: even as the world’s pre-eminent power retreats from the very international architecture it once championed, Singapore remains steadfastly committed to building consensus and pursuing mutual benefit through cooperation.

Goldilocks problem

Third on my list of takeaways from the speeches – more for Singaporean voters to ponder than for outside observers parsing the Republic’s geopolitical worldview – is what Mr Lee articulated in the last part of his address.

For close observers of the Senior Minister’s major political speeches, his argument here will have a familiar ring: in essence, that Singapore’s global influence and ability to navigate complex geopolitical waters requires a strong government.

Put more directly, that the PAP’s dominance in politics over the past six decades isn’t merely fortuitous, or good to have, but is in fact a strategic necessity.

In previous addresses, Mr Lee has likened this to a Garden of Eden situation – once single-party dominance erodes, the positive outcomes so prized by Singaporeans that flow from it cannot be regained.


In his April 14 speech, he put it plainly regarding the implications for the conduct of foreign policy: “You need to have a good government, an effective government, a strong government, in order to take care of Singapore. And it has to be strong domestically, in order to be strong internationally.”

Importantly, Mr Lee did not argue against the existence of opposition – quite the contrary. He acknowledged that the opposition has a legitimate role in Singapore’s democratic system and that opposition MPs will always have a place in Parliament. However, he drew a clear line: “But if voters keep on electing more opposition MPs, even when the Government is doing a good job, then beyond a point, it must weaken the Government’s ability to govern, to form the best possible team for Singapore and to run this country the way Singaporeans have come to expect.”


Mr Lee raised the spectre that a weakened government could see foreign counter-parties question the staying power of the incumbent administration and the sitting prime minister, and temper their expectations – and commitments to Singapore – accordingly.

Here, then, lies one of the main areas of contestation likely to emerge during the coming election campaign: this view, one could say the orthodox PAP perspective, that a larger opposition presence could undermine Singapore’s foreign policy effectiveness, versus the perspective of serious, electable opposition parties – particularly the Workers’ Party – that greater political diversity serves the long-term national interest and need not compromise Singapore’s unified international stance.


Much as the messages from Mr Lee and Mr Wong this week have been sobering yet confidence-inspiring regarding foreign policy stewardship, this final point raises a profound question for voters on May 3: whether they will opt for a thinner or thicker opposition bench.

A Goldilocks problem with high stakes now rests in the hands of Singapore’s electorate.

Saturday, 12 April 2025

Healthcare financing in Singapore: Healthcare spending could hit $30 billion a year by 2030 says Health Minister Ong Ye Kung

The Price of Good Health
Healthcare that is affordable, accessible and high quality comes at a price. Salma Khalik finds out how Singapore is striking the right balance.
The Straits Times, 10 Apr 2025

Spending on healthcare in Singapore could soon become the single biggest item in the Government’s coffers, said Health Minister Ong Ye Kung, as he assured Singaporeans that their basic healthcare needs will continue to be affordable.

In 2025, the Government has set aside $20.9 billion for health, second only to spending on defence, which has a budget of $23.4 billion.

Citing the trajectory of government healthcare expenditure, which had gone up from $9 billion in 2015, the year he joined politics, to $18 billion in 2024, Mr Ong predicted that by 2030, it would likely be close to $30 billion a year.

A lot of the money will go towards building more facilities, including new hospitals, nursing homes and community care centres, and for manpower costs.

But a substantial portion will be spent on subsidies to keep costs down for patients.

“We can make it affordable to the patient, but there’s no doubt that with an older population, healthcare expenditure, whether by the Government or nationally, is going to go up,” he told The Straits Times in an exclusive interview.

Older people not only tend to get sick more frequently, but they are also more sick and stay longer in hospitals as many have more than one medical condition.

Mr Ong said: “You’re seeing a lot more older patients coming in, not because of very severe diseases, but due to infections. Because they are old, there is underlying illness after Covid-19. They are more frail and one infection is all it takes for them to be in the ICU (intensive care unit).”

As a result, the average length of stay in public hospitals has gone up, from 6.1 days in 2019 to seven days by 2022. This represents a 15 per cent increase in patient load, he added. While this trend worries him, Mr Ong is confident that the quality of healthcare for patients in the future will not suffer as a result of the higher demand.


Even as the quality of healthcare here has been getting better over the years, with advances in medical science and technology, he said the Government will continue to enhance the definition of basic healthcare, which it has always promised will remain affordable. As an example, he pointed to the announcement that from October, MediShield Life will start covering treatments using cell, tissue and gene therapy products.

These are individualised treatments tailored to a person’s specific medical problem, some of which were previously untreatable. As each treatment is designed and produced for a specific patient, the cost is high.

The move marks an “inflection point” for basic healthcare here, said Mr Ong. In spite of the high cost, he said “we decided that this is the way to go” because today, if there is an available treatment, people expect to have access to it.

“At some point, that becomes people’s expectation. So we have to start embracing this,” he said.

This is one reason why a large part of government expenditure will go towards subsidising healthcare costs. People will also have to share in the cost of better care, largely with insurance and their MediSave funds, Mr Ong said.

The good news is that the Government is unlikely to need to raise taxes to pay for the higher healthcare expenditure, he added.

Said Mr Ong: “We expect our GDP (gross domestic product) to grow. So long as the Singapore economy grows, tax receipts will go up. And a big part of it, a significant part of it in future, will be for healthcare.”

Thursday, 13 March 2025

GE2025 electoral boundaries announced: 15 SMCs and 18 GRCs

Extensive changes to electoral boundaries due to population shifts; number of MPs raised from 93 to 97
By Linette Lai, The Straits Times, 12 Mar 2025

Major changes ahead of Singapore’s next general election will see the creation of one more group representation constituency and an additional single-seat ward, bringing the total to 18 GRCs and 15 single-member constituencies.

The number of elected MPs will increase to 97, up from 93 now.

The revisions will see electoral boundaries change in 22 out of the current 31 constituencies.

The release of the Electoral Boundaries Review Committee (EBRC) report on March 11 marks a major step on the road to the next general election, which is expected to be held in the first half of 2025.

Explaining its recommendations, the EBRC said in its report that voter numbers have grown significantly in Pasir Ris-Punggol, Sembawang and Tampines GRCs, as well as the single seats of Hong Kah North and Potong Pasir.

This is largely due to population shifts and new housing developments in these areas, it said. Voter numbers in each of these constituencies have increased by more than 10,000 since GE2020.


Revisions to electoral boundaries in these areas had knock-on effects on boundaries in some surrounding constituencies, the EBRC said.

With the latest changes, the number of four-member GRCs will grow from six to eight, while the number of five-member GRCs will go down from 11 to 10.

One key change is the creation of a new four-member Punggol GRC. It will take in Punggol West SMC and parts of Pasir Ris-Punggol GRC, which will shrink into a new four-member Pasir Ris-Changi GRC.


Five SMCs have been taken off the map, while six new ones have been added. The single seats removed are: Bukit Batok, Hong Kah North, MacPherson, Punggol West and Yuhua.

The new SMCs have mostly been carved out of existing GRCs. They are: Bukit Gombak, Jalan Kayu, Jurong Central, Queenstown, Sembawang West and Tampines Changkat.

Three polling districts in Tampines West, east of Bedok Reservoir, have been moved from the opposition-held Aljunied GRC to Tampines GRC.

Sengkang GRC, which is also held by the Workers’ Party, is among nine constituencies to see no changes to electoral boundaries. The other eight are Bishan-Toa Payoh, Jalan Besar, Marsiling-Yew Tee and Nee Soon GRCs; as well as Bukit Panjang, Hougang, Marymount and Pioneer SMCs.

An estimated 2,753,226 voters will head to the polls in 2025, an increase of 101,791 from GE2020.

The EBRC submitted its report to Prime Minister Lawrence Wong on March 7. Its recommendations have been accepted by the Government, the Elections Department (ELD) said on March 11.

Significant changes have been made in the east and west of Singapore, where the fiercest electoral battles are expected to be fought.

In the east, the new Pasir Ris-Changi GRC will be formed by merging parts of Pasir Ris-Punggol and East Coast GRCs.

East Coast remains a five-member GRC. However, it will take in 15 polling districts from Marine Parade GRC – mostly flats in Chai Chee and private estates in Siglap. The constituency was hotly contested by the People’s Action Party and WP in 2020, with the ruling party eventually winning 53.39 per cent of the vote.

A new five-member Marine Parade-Braddell Heights GRC will absorb the single seat of MacPherson. It will take in two polling districts from Potong Pasir, where many new flats have been built in the Bidadari area, and parts of the existing Marine Parade GRC and Mountbatten SMC.

In the west, the new five-member West Coast-Jurong West GRC will take in estates from neighbouring Jurong West and Taman Jurong, which are in Jurong GRC.

Estates in Dover and Telok Blangah, which are part of the existing West Coast GRC, will be absorbed into Tanjong Pagar GRC. West Coast GRC saw the closest fight in 2020, when the PAP won with 51.69 per cent of the vote against the Progress Singapore Party.

Meanwhile, a new five-member Jurong East-Bukit Batok GRC will take in polling districts from the existing Jurong GRC, as well as parts of three SMCs which have been taken off the map – Bukit Batok, Hong Kah North and Yuhua.


The EBRC, made up of five senior civil servants, was formed seven weeks ago on Jan 22. It was directed to keep the average size of GRCs, the proportion of MPs elected from SMCs, and the average ratio of electors to elected MPs, about the same.

The average number of MPs in each GRC will be 4.56, down from 4.65. In the coming general election, there will be approximately 28,384 voters per MP, compared with 28,510 now.

And about 15.5 per cent of MPs will be elected from single-seat wards, compared with 15.1 per cent at the last election.

The next big step will be when Parliament is dissolved and the Writ of Election issued. The writ sets out a date for Nomination Day, when candidates confirm the constituencies in which they will stand.

Nomination Day will likely be followed by the minimum nine-day campaign period and Cooling-off Day – when campaigning is banned – before Polling Day.

In the past four general elections, the time between the release of the EBRC report and Polling Day has ranged from two to four months.

In a Facebook post, PM Wong acknowledged that the report had been submitted.

“The next milestone will be to update and certify the Registers of Electors, before the elections are called later,” he said.

Political observers noted that it is the first time in several decades that the EBRC has laid out reasons for its decisions. Past reports since the 1990s have typically set out boundary changes with little explanation.

The committee may have done so in response to calls for greater transparency on how it works, they suggested.


In a statement, the PAP said its branches and activists will make the “necessary adjustments” to prepare for the general election.

“Meanwhile, residents can continue to seek assistance from their existing PAP branches,” it added.

Party branches will continue to listen to residents’ feedback, understand their needs, and act on their behalf to improve their communities, it said.

Saturday, 1 March 2025

GST hike did not ‘turbocharge’ inflation, says PM Lawrence Wong as he acknowledges cost-of-living concerns

This Government will always uphold fiscal responsibility, says PM Lawrence Wong
By Wong Pei Ting, The Straits Times, 1 Mar 2025

The PAP Government will never take risks with Singaporeans’ lives and their future – this means ensuring that it keeps public finances healthy year after year and spending within its means, said Prime Minister Lawrence Wong.


PM Wong also cautioned against attempts to portray a healthy surplus as somehow detrimental to Singaporeans as he addressed criticism from opposition MPs about poor budget marksmanship.

“Let’s try not to put a wedge between the Government and the people... A strong fiscal position for Singapore is not at the expense of Singaporeans,” he said. “In fact, it benefits Singaporeans in so many ways, because we are able to invest more in Singaporeans.”

In an hour-long speech wrapping up the Budget debate on Feb 28, he also responded to the opposition’s suggestion that the Government had raised the goods and services tax earlier than it needed to, given an expected surplus of $6.4 billion for financial year 2024, compared with the $778 million that had earlier been projected.

Singapore is in a strong fiscal position today precisely because it took the necessary steps early in this term of government to raise revenues ahead of expected structural spending needs as the population ages, said PM Wong.


While the Republic was fighting the Covid-19 pandemic, it could already foresee spending needs going up on the horizon.

“This was 2020, 2021 – we had no way of knowing when the pandemic would end, how the virus would mutate, how many more new waves of infection would we face, how many more restrictions we have to impose, and how much deeper a fiscal hole we would end up with,” PM Wong said.

The authorities made the decision to proceed with the GST increase in Budget 2022, accompanied by enhancements to a package to delay the increase for most Singaporean households, when there were signs that the economy had stabilised.


“We must ask ourselves, do we want short-term populism or long-term stability?” PM Wong asked. “Do we want to kick the can down the road or take the hard but necessary decisions?”

With the GST increase in place, the Government has the additional revenues – mostly from those who are better off, foreigners and tourists – that it needs to improve healthcare infrastructure and take better care of seniors, he said.

Were it not for the GST hike, and unexpected upsides in corporate income tax collections, FY2024 would have ended in deficit, as would projections for FY2025, he added.

“That would have meant less funding for essential services, less support for our seniors and fewer resources to invest in our future,” he said.

“Basically, Singapore and Singaporeans would have ended up in a much weaker position.”


PM Wong refuted Leader of the Opposition and Workers’ Party (WP) chief Pritam Singh’s proposition that the GST hike had “turbocharged” inflation.

As Singapore is a small and open economy, inflation was driven primarily by global factors, such as war and supply chain disruptions, said the Prime Minister.

In the two years when GST was raised, price increases actually moderated, from 6.1 per cent in 2022 to 4.8 per cent in 2023 and 2.4 per cent in 2024, he pointed out.


He noted that in most countries, poor budget marksmanship refers to when governments severely overestimate revenue collections and underestimate expenditures.

This results in unfunded promises that a country cannot keep, because there is not enough money. Alternatively, it borrows to meet these commitments, thereby leaving a growing burden for the next generation.

This is not the case in Singapore, as the Republic practises responsible and prudent budgeting, PM Wong said.


Earlier in the debate, Mr Singh had called the Government’s fiscal projections “so unpredictable, but somehow always so healthy when elections have to be called”.

This point was echoed by Progress Singapore Party (PSP) Non-Constituency MP Leong Mun Wai, who said that “so much pain” had been inflicted on Singaporeans by the decision to raise GST in 2023 and 2024.

PM Wong said that, ultimately, it was not a matter of marksmanship, but a question of right or wrong fiscal principles.

“The WP and the PSP may think that we are being overly cautious in our projections, but this Government will never take risks with Singaporeans’ lives and future,” he said.

This includes raising revenues should new spending needs arise, he added.


On the charge by opposition MPs that the Government had been relying on temporary measures such as vouchers to deal with cost pressures instead of making structural reforms, PM Wong said that cost-of-living support and the SG60 package accounted for just 5 per cent of the Budget.

A far larger part of government spending is in structural programmes such as SkillsFuture to empower Singaporeans through skills and job training, he said.

“This will ensure Singaporeans do not just receive help, but are able to stand on their own feet and seize better opportunities for themselves and thrive in a rapidly changing world,” he said.


Objectively speaking, this has helped Singaporean households across different income levels achieve higher real income growth in the past decade than countries like the United States and Japan, he added.

For instance, the bottom 20 per cent of households here saw their wages rise 3.6 per cent per annum between 2013 and 2023, compared with 2.1 per cent in the US and minus 1.6 per cent in Japan.

Singapore’s fiscal approach has also stood it in good stead – while many countries use their tax revenues to service interest payments, the Republic instead receives an annual boost from its investment returns.

“Countries that have this luxury of investment returns are the ones that are endowed with oil and gas or some other natural resources – they have been blessed by the heavens with these endowments,” PM Wong said.

‘We have nothing, and yet we are in this position. It is truly unique, and it is a Singapore miracle.”

Singapore’s fiscal strength is a vital source of competitive advantage in these turbulent times, which look likely to get worse, said PM Wong.

He flagged the ongoing wars in Europe and the Middle East, and the possibility of conflict in Asia.

Today’s environment means global responses to these threats will sadly not be as well coordinated or effective as before, he added.

“But in Singapore, we know that if such shocks were to arise, we have the ability to respond swiftly to them, like we did during Covid-19,” he said.

“Our reserves and our fiscal strength will enable us to protect Singaporeans when it matters, and to turn adversity into opportunity.”

In a Facebook post in the evening, Senior Minister Lee Hsien Loong said Singapore must continue to spend prudently, so that it can tackle and recover from future challenges swiftly, as it did with Covid-19.

Reflecting on SG60 – the country’s 60th year of independence – SM Lee said the country’s strong fiscal footing has been built through the careful stewardship of the earlier generations. He said: “It gives us confidence to move forward sustainably, so that future generations can enjoy the fruits of Singapore’s progress.”

PM Wong said the Government’s approach has also achieved outcomes that reflect Singapore’s values as a society – one that is fair, prudent and progressive, where the better off contribute more to lift up those with less.

For instance, the bottom quintile of households receives $4 in benefits for every dollar of tax paid, while the top quintile of income earners receives 30 cents.

“There is no fiscal system in the world that can deliver perfect precision and equity. But I think we have found an approach in Singapore that works for us,” he said. “It’s not perfect, but we continue to make it better.”


At the end of the day, PM Wong said, Singaporeans will decide whether they prefer a government that underestimates needs and spends more from the reserves, leaving the country weaker, or one that steadfastly upholds fiscal responsibility and discipline so that current and future generations have the resources to handle unexpected challenges.

“We will continue to do our best to convince Singaporeans that ours is the right approach. It has served us well these last 60 years, and it will continue to keep Singapore on the right track in the years ahead,” he said.

Saturday, 22 February 2025

Singapore Budget 2025: Onward Together for a Better Tomorrow

PM Lawrence Wong unveils bumper SG60 Budget for all Singaporeans
By Goh Yan Han, The Straits Times, 19 Feb 2025

Every Singaporean will receive something from Budget 2025, from vouchers for all adults to personal income tax rebates, as part of an SG60 package.

Prime Minister Lawrence Wong on Feb 18 unveiled what he termed “a Budget for all Singaporeans”, which includes expanding existing schemes to benefit more citizens and greater support for seniors as well as the vulnerable.

He also set out measures to grow Singapore’s economy, help workers upskill and meet its green targets.

The broad suite of measures announced tally up to a record $143.1 billion, an increase from the $134.2 billion spent in the 2024 financial year.

This is about 18.7 per cent of Singapore’s gross domestic product, and is in line with projected trends for government spending that is expected to reach about 20 per cent of GDP by 2030.

The moves are financed by changes to the tax system made earlier in this parliamentary term that put Singapore “on a stronger fiscal footing”, and larger-than-expected revenue collections.


Corporate income tax collections were more than expected in the 2024 financial year. This is now the single largest contributor to total government revenue, higher than the Net Investment Returns Contribution (NIRC), said PM Wong as he set out the Government’s fiscal position. The NIRC refers to the returns on investments of Singapore’s reserves.

He expects a surplus of $6.8 billion, or 0.9 per cent of GDP, for the 2025 financial year.

“When Singapore thrives, every citizen benefits,” said PM Wong, who is also Finance Minister.

“Every Singaporean is supported from birth to old age, with more support given to those with less. No one is left behind.”


PM Wong said the Budget was “shaped together with all Singaporeans”. It lays out the second instalment of plans on the Forward Singapore agenda, which seeks to keep society strong and united.

He noted that Singapore has to navigate a turbulent external environment, with the US and China locked in a fierce contest for global supremacy. Despite the global uncertainties, the Republic can look ahead with a degree of confidence as it is far stronger than it was 60 years ago, he added.

Noting that 2025 marks the country’s 60th year of independence, PM Wong said: “It has been a remarkable journey, reflecting the grit and resilience of generations of Singaporeans in building our nation.”


Something for all Singaporeans

He announced a new SG60 package to recognise the contributions of all Singaporeans and share the benefits of the nation’s progress.

In July, all Singaporeans aged 21 to 59 will receive $600 in SG60 vouchers, while those aged 60 and above will get $800. These vouchers, amounting to about $2 billion, will function like the CDC ones.

Under the package, individuals will also get a 60 per cent personal income tax rebate, capped at $200, for the 2025 year of assessment.

All Singaporean babies born this year will get an SG60 Baby Gift, PM Wong added, among other measures in the package.


The hotly anticipated Budget, which comes ahead of an upcoming general election widely expected by mid-year, also tackles top-of-mind issues for Singaporeans such as cost-of-living pressures and job insecurity.


To alleviate rising costs, PM Wong announced another $800 of CDC vouchers for all Singaporean households, totalling about $1 billion. The first $500 will be given out in May 2025, while the remaining $300 will be issued in January 2026.

He also announced more utility rebates and credits for families with children to defray household expenses.


While inflation is expected to ease further in 2025, PM Wong acknowledged that Singaporeans are still adjusting to new price realities. “We will continue to provide support for as long as needed, within our means,” he said.


To help parents who have or plan to have three or more children, PM Wong detailed a new Large Families Scheme.

The scheme will disburse $16,000 to such families for each third and subsequent child born from Feb 18, and help to cover pre-school and healthcare expenses, as well as household spending.


PM Wong also announced that several schemes will be extended to private property owners, including the climate vouchers programme that all Housing Board households can currently tap to buy energy- and water-efficient household appliances.

HDB households will get an additional $100, on top of the $300 they received last year, while households in private properties will get $400 in climate vouchers.

The Enhancement for Active Seniors (EASE) scheme that provides subsidised senior-friendly fittings and installations in HDB households will be extended to private property households up to 2028, said PM Wong.


Supporting workers, securing the future

While the Government has taken measures to mitigate the impact of rising costs, the best way in the longer term to adjust to higher prices is to grow the economy and increase productivity, he said.

Dedicating a significant portion of his Budget speech to new moves to grow the economy, he announced more funding for research and development and a new $1 billion fund to provide more financing options for high-growth local enterprises.

At the same time, workers must be equipped with the skills needed to stay competitive and relevant, said PM Wong.


He said that the SkillsFuture Level-Up Programme, announced in 2024 to support mid-career Singaporeans who are upskilling full-time, will also be extended to part-time training.

The Workfare Skills Support scheme, which currently covers short courses for lower-wage workers, will have an enhanced tier of support that covers longer-form courses, he added.

The Prime Minister also outlined measures to support more vulnerable groups of workers, including older workers, former offenders looking to reintegrate into society, and people with disabilities.


PM Wong said the Budget also lays the groundwork for the country to become stronger and more resilient.

It includes measures to tackle climate change, like a $5 billion top-up to the Coastal and Flood Protection Fund. The fund covers long-term plans such as land reclamation for Long Island and structures like sea walls and tidal gates.


Singapore will need to have its own domestic sources of clean power to ensure greater energy resilience, PM Wong said, adding that the country will study the potential deployment of nuclear power and take further steps to systematically build up capabilities in this area.

Apart from plans to access more sources of clean energy, the Government will accelerate efforts to decarbonise the transport sector, he said.

It will roll out a new emissions scheme and electric charging grant to incentivise the purchase of clean energy variants of heavy vehicles. Adoption of such vehicles has been slower compared with that of electric and hybrid cars.


Singapore will continue to improve its public transport system, said PM Wong, noting that $60 billion will be invested in this decade to grow and renew the rail network.

“We are continuing to study how our rail network can be expanded,” he added.


Concluding his speech, PM Wong said Singaporeans have to brace themselves for new challenges in the next phase of nation building.

The country has confronted tough external circumstances repeatedly over the past six decades, and “we can draw confidence from what we have been through together”, he added.


At every turn, Singaporeans have chosen determination over despair, innovation over stagnation, and solidarity over division, said PM Wong.

“Budget 2025 sets out clear plans for us to continue this journey with confidence.”








Sunday, 9 February 2025

CPF system geared to meet retirement needs as people live longer: PM Lawrence Wong

In an interview with Lianhe Zaobao, Prime Minister Lawrence Wong discussed how the system has evolved and how the Government will continue supporting the housing, healthcare and retirement needs of Singaporeans throughout different stages in their lives. Here is an edited extract of his interview.
The Straits Times, 8 Feb 2025

Zaobao: What makes the CPF (Central Provident Fund) system unique, and how has it helped our CPF members?

PM Wong: Our CPF system has been improved and enhanced over many years and decades. The system we have today is very different from the one that we started with, or even the one that was in place 20 or 30 years ago. And there are several unique features in our system.

In some countries, they have what you call a defined benefit scheme. So when a person retires, they get a defined payout after retirement, and that funding is supported by taxpayers. It sounds very attractive, but it can be difficult to sustain because with a rapidly ageing population, it means that there will be fewer taxpayers to support a rapidly growing pool of seniors. And then the burden continues to grow, which is why commentators looking at some of these pension systems describe it as a pension time bomb. And there are no very good solutions. People are just kicking the can down the road.

In some other countries, they do not have comprehensive support for individuals, and they ask the individuals to rely more on their own efforts to save and look after their own retirement. But that is also not ideal because then the burden on the individual is considerable. So, our system is unique because it brings together different stakeholders, individuals, employers and the Government. We all do our part, and it reflects our social compact in Singapore.


We want to help one another, and it means, within our CPF system, the individual contributes, saves part of their income every month into their CPF account. Employer pays CPF, but the Government also does its part. We run the entire system for CPF, we provide guaranteed risk-free interest rates on CPF savings. And importantly, we provide additional support for the more disadvantaged and vulnerable groups in different ways, and by all parties coming together, we have a CPF system that can look after individuals’ retirement, housing and healthcare. And that’s also quite unique.

While the system is primarily designed for retirement, it is a system that has also enabled Singaporeans to take care of their own healthcare needs. They can use their MediSave for hospital bills and also for payments of their insurance premiums. As they start work and they want to set up a family, they can use their CPF for housing. Eventually, when they retire, they have CPF Life to take care of their retirement needs. So this is how we have over the years improved and enhanced considerably our CPF system. It is now a critical pillar in our social safety net. But of course, while it is a good system today, we are not resting on our laurels. We will continue to improve and enhance it, and make sure it remains a critical plank in our social security system, and can meet the current and future needs of all Singaporeans.


ZB: PM, you talked about Singaporeans living longer, so this means that they will need more funds for their retirement years. Some are worried that they may not have enough to support their golden years. How is the Government responding to this?

PM Wong: This is an issue that many countries are grappling with, especially those with rapidly ageing populations. And there are no easy answers. Because as the population ages and you have more seniors to look after, then whatever funds you have for retirement must stretch out for a much longer period.

The challenge is how do you look after people who are living longer? And in the end, the answer is that you need more funding. But the big question is who pays for the funding? We have been grappling with this issue for some time because we could see the trends. Even 20, 30 years ago, we could already see the trends. And we have been grappling with this.


When Singapore started out in the 1960s as an independent country, our average life expectancy was about 60-plus. People retired in their 50s, and they just needed to look after about 10 years of retirement. Nowadays, average life expectancy is around 85. And if you drill into the data, you have more and more people who are living beyond 90, even beyond 100. Our number of centenarians is growing rapidly. So when you retire, you have quite a long period of retirement to look after and to ensure that you have enough funds for your retirement years. What is the answer, then? How do we help everyone ensure that they have peace of mind during retirement?

I think there are two parts to it. One is we have to be prepared to stay employed and work longer. And that’s why we have been talking about raising the retirement age and the re-employment age for some time. Today, our retirement age is 63, the re-employment age is 68, which means employers must be prepared to offer the seniors a re-employment contract to work up to 68. And we have shared that we plan to raise this to 65 and 70 by 2030.

But we also know that it’s not easy for people, for older workers, to stay employed. And so we are not leaving Singaporeans to fend for themselves. It’s one major reason why we are investing so much in SkillsFuture, and we want to make sure that we continue to reskill and upskill our older workers, give them a substantial injection of new skills so that they can stay competitive and relevant.

And of course, all of us must start to change our mindsets and attitudes. Because in the past, it was very simple. Study, work – and often the work involves one career, one job – and then they retire. I think with longer lifespans, we have to be prepared for studying, but you are in fact going to continue learning throughout life, and your work will have multiple phases. Even if it’s one industry, you may have different kinds of job responsibilities, and very often it will be different industries, different seasons, different second, third acts in life, before you eventually retire. And SkillsFuture is there to support Singaporeans through these different phases. That’s one important way in which we help.


The second way we help is when someone retires, for example at 65, you want to ensure that their retirement savings can go on throughout their lifetime no matter how long they live. So we have CPF Life, which we implemented some time back, and this provides an annuity payout for the individual’s lifetime. And if you have your Basic Retirement Sum at 55 in 2025, by the time you are 65, you should be able to get a CPF Life payout of around $900 a month on the Standard Plan (in 2035). If you are able to work in a job that pays more, and you accumulate the Full Retirement Sum, the payout will be higher at around $1,700 a month (in 2035).

So it’s a scheme that allows you to design payouts, provide some flexibility. You can decide how much you want to save, and you can design the payouts to suit your own lifestyle and needs. What we want to do is to assure every Singaporean that so long as you make the effort, you work consistently throughout your lifetime – it doesn’t mean that you have to work every single year, but as long as you put in consistent work, and if you start young – by the time you get old and you want to retire, you should have enough protection through the CPF system to provide for your retirement. That’s our assurance to all Singaporeans.