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A redesigned SkillsFuture Enterprise Credit will see the availability of $10,000 for eligible companies from the second half of 2026, to offset out-of-pocket costs for eligible workforce transformation initiatives.
- Report by Priya Sunil & Umairah Nasir, with inputs from Colette Wong & Sarah Gideon.
Singapore’s Prime Minister and Minister for Finance, Lawrence Wong delivered the Budget 2025 statement in Parliament earlier today (Tuesday, 18 February 2025).
PM Wong stated that the country had rebounded strongly from the COVID-19 pandemic, ending the previous year on solid ground. He highlighted that the economy grew by 4.4% as inflation eased, and wage increases outpaced inflation, with the median income of resident workers rising by 3.4% in real terms. He also noted that income inequality, after government taxes and transfers, reached its lowest level since 2000. While this momentum was promising, he cautioned that rising global uncertainty and downside risks remained.
Addressing geopolitical tensions, PM Wong observed that the US-China tensions continued to intensify, with both nations prioritising economic and technological dominance. While direct conflict was unlikely, he pointed out that both sides were taking assertive measures that could disrupt established international norms. He warned that this ongoing contest would have global ripple effects, including on Singapore.
Looking ahead, Singapore's projected economic growth stands at 1–3%, with inflation expected to range between 1.5–2.5%. Despite uncertainties, PM Wong reassured that Singapore was in a far stronger position than it was 60 years ago, citing a well-diversified economy, a highly skilled workforce, a strong SAF, and a robust diplomatic network. He also emphasised the importance of a shared national identity, shaped by generations of Singaporeans, in strengthening the country’s unity and resilience.
To that effect, he described Budget 2025 as a continuation of previous efforts to address immediate challenges while securing Singapore’s future. He explained that the Budget, shaped through the Forward Singapore agenda, reflects citizens' aspirations and aimed to support a strong and united society. Key focus areas included managing cost pressures, driving economic growth, upskilling workers, building a sustainable city, fostering inclusivity, and strengthening national cohesion.
For employers and HR leaders, HRO has compiled the below guide on the major announcements that are expected to impact manpower planning. Some of the several support measures include:
- An enhancement to the Progressive Wage Credit Scheme.
- A new Enterprise Compute Initiative to help enterprises leverage AI more effectively in their transformation journey.
- The introduction of a SkillsFuture Workforce Development Grant with up to 70% funding support for job redesign.
Note: All currencies in this report refer to Singapore dollars (SGD).
Support for businesses in alleviating cost pressures
PM Wong acknowledged that higher prices today not just affect households, but also impact businesses — many of whom are grappling with increased costs of rent and labour.
To support businesses in tackling these pressures, PM Wong introduced a 50% corporate income tax rebate for Year of Assessment 2025. Every active company that employed at least one local employee in 2024 will be provided a minimum benefit of $2,000; the total benefit that each company will receive will be capped at $40,000.
Next, in support of businesses that are committed to uplifting the wages of their lower-wage workers, PM Wong said the government will continue to share the responsibility with employers. Taking into account feedback from employers, the PM will enhance the Progressive Wage Credit Scheme by increasing the government's co-funding levels for wage increases:
- from 30% in 2025 to 40% in 2026, and
- from 15% in 2026 to 20% in 2027.
PM Wong said: "The measures we have taken in recent years and are taking in this Budget will help to mitigate the impact of rising costs, but in the longer term, the best way to adjust to higher prices is to grow the economy and increase productivity so that all Singaporeans can enjoy higher real incomes and better standards of living."
Third, in efforts to enhance Singapore's technology and innovations engines, the government will provide a $3bn top-up to the National Productivity Fund, as well as invest $1bn in the country's R&D infrastructure.
The fourth and fifth rounds of support include strengthening the enterprise ecosystem, and investing in infrastructure:
- Strengthening the enterprise ecosystem:
- The government will extend support schemes for internationalisaion, as well as mergers and acquisitions.
- Up to $150mn will be provided for the new Enterprise Compute Initiative. Under this initiative, eligible enterprises will be partnered with major cloud service providers to access AI tools and computing power, as well as expert consultancy services, which will help enterprises leverage AI more effectively in their transformation journey.
- Acknowledging that companies need capital to execute their growth plans, PM Wong introduced a $1bn Private Credit Growth Fund. This will provide more financing options for high-growth local enterprises, and the Minister for Trade and Industry will elaborate at the Committee of Supply.
- Investing in infrastructure:
- A $5bn top-up will be provided to the Changi Airport Development Fund, in a bid to ensure sufficient resources to develop Singapore's air hub, a key pillar of connectivity.
- The government will provide another $5bn to the Future Energy Fund.
Support for employees
With an aim to continue supporting the development of workers and ensure that Singaporeans are equipped with the skills needed to stay competitive and relevant in the workforce, this year's Budget will see deeper focus on lifelong learning, workforce transformation, and support for workers.
First, to encourage lifelong learning, PM Wong has announced the following:
- As part of the SkillsFuture Level-Up Programme for Singaporeans aged 40 and above, the government will provide $300 monthly training allowance from early 2026, for enrollment in selected part-time courses.
- The government will also enhance the Workfare Skills Support initiative from early next year, to provide monthly allowance for lower-wage workers aged 30 and above, who enroll in selected part-time and full-time courses.
Second, to support workforce transformation, the government will:
- Introduce a SkillsFuture Workforce Development Grant with up to 70% funding support for job redesign.
- A redesigned SkillsFuture Enterprise Credit will see the availability of $10,000 for eligible companies from the second half of 2026, to offset out-of-pocket costs for eligible workforce transformation initiatives.
- Finally, an additional $200mn will be committed to NTUC's Company Training Committee Grant to help more companies transform and upskill their workers.
Third, to strengthen employment support, PM Wong shared:
- The CPF Transition Offset will continue to support employers for another year, covering half of the increase in employer contributions for 2026.
- The government will extend the Senior Employment Credit to 2026, in efforts to offset wages for employers who hire senior workers.
- The Uplifting Employment Credit will be extended to 2028, to offset wages for hiring ex-offenders.
Support for persons with disabilities
A major part of the Forward Singapore agenda is to nurture a more caring and inclusive society, PM Wong highlighted — one where every Singaporean feels valued and supported, regardless of age, ability and circumstance.
Thus, Budget 2025 will see greater support for families, seniors, vulnerable families, and persons with disabilities (PWDs).
Zooming in to support for PWDs, PM Wong shared:
- The Enabling Employment Credit will be extended to 2028, to offset wages for employers who hire PWDs.
- The government will provide higher subsidy rates for adult disability services, covering more households.
- The Matched Retirement Savings Scheme will be extended to Singaporeans of all ages, who have disabilities.
- The government will step up efforts by SG Enable and the Special Needs Trust Company (SNPC) to encourage families to plan ahead for their child's future care needs. To support ongoing efforts, there will soon be a Matching grant for top-ups by lower- and middle-income caregivers with a trust account, of up to $10,000.
Excerpts: Other key announcements as part of Budget 2025:
SG60 initiatives
As Singapore celebrates 60 this year, PM Wong shared several initiatives that will take place to:
- Recognise Singaporeans’ contributions and sharing the benefits of the nation’s progress, and
- Strengthen the national identity and community bonds.
These include:
SG60 Package
- Singaporeans aged 21 and up will receive special SG60 Vouchers in July 2025.
- Those aged 21-59 will receive S$600, while those aged 60 and above will get $800.
- There will also be 60% Personal Income Tax Rebate for YA 2025 for all tax residents, capped to $200.
- SG60 Baby Gift for all Singaporean babies born in 2025.
National identity and community bonds
- $100 SG60 ActiveSG credit top up in June 2025 for all ActiveSG members.
- $100 SG Culture Pass credits in September 2025 for all Singaporeans 18 and above.
- Singaporeans aged 18 & above will get S$100 in credits to attend local arts & heritage activities.
- $100mn top up and five-year extension to Cultural Matching Fund.
- $250mn SG Gives matching grant
- $270mn top-up and three-year extension to Tote Board's Enhanced Fund-Raising Programme
- $60mn over five years for Self-Help Groups
- $600 rental support for each stall in hawker centres and markets, managed by the government and government-appointed operators
- Up to $1bn over the next 20-30 years to upgrade & build hawker centres
Key tax changes that took place over the past year
- The GST increase helps fund rising healthcare costs for a growing senior population.
- The Assurance Package cushions the impact, with permanent GST vouchers ensuring lower-income households pay a lower effective GST rate.
- Property tax rates increased for higher-value homes and non-owner-occupied properties.
- Rebates (up to 20% in 2025, capped at $1,000) were provided, ensuring lower taxes for all HDB owner-occupiers and over 90% of private residential property owner-occupiers.
Overall financial stance
According to PM Wong, Singapore expects a fiscal surplus of $6.4bn (0.9% of GDP) and a similar outlook for the following year. However, long-term government revenue remains uncertain, especially with fluctuating corporate tax collections and global tax changes.
While the new domestic top-up tax from 2027 may increase revenue, it depends on Singapore’s attractiveness to businesses.
At the same time, government spending is rising—from 15% to 18% of GDP—and could reach 20% due to aging demographics and economic challenges. Careful fiscal management is crucial to ensure sustainability.
Lead image / Screenshot of PM Wong's speech, PM Wong's YouTube channel
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