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.”

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.