Overview: A Surplus-Focused Election Year

Singapore’s Budget 2025, titled “Onward Together for a Better Tomorrow,” was unveiled by Prime Minister Lawrence Wong on February 18, 2025. The budget exceeded expectations by projecting a fiscal surplus of 0.9% of GDP for FY25, despite being an election year. Crafted to enhance social resilience, reduce inequality, and foster unity, the budget also celebrates Singapore’s 60th year of independence (SG60) with various special handouts and initiatives. The surplus positions Singapore to weather potential global economic slowdowns while maintaining fiscal flexibility.

Generous Handouts for Households

In response to rising living costs, the government introduced several measures to support households:

• Cash Handouts: Each household will receive S\$800 in CDC vouchers and utility rebates of up to S\$760.
• Child Benefits: Families will receive S\$500 LifeSG credits for each Singaporean child aged 12 and below. Those aged 13 to 20 will receive a S\$500 top-up to their Edusave or Post-Secondary Education Accounts.
• Large Families Scheme: A new initiative to promote higher birth rates, including a S\$5,000 increase in the Child Development Account First Step Grant for third and subsequent children, and S\$5,000 Large Family MediSave Grants for mothers.
• ComCare Assistance Scheme: Enhanced rates to better support lower-income households.
• Ex-Gratia Payments: Increased monthly Singapore Allowance for pensioners from S\$350 to S\$390.

SG60: Celebrating 60 Years of Independence

The SG60 package aims to share the nation’s progress with its citizens through special benefits:

• S\$600 in SG60 vouchers for Singaporeans aged 21 and above, with an additional S\$200 for those aged 60 and above.
• A 60% Personal Income Tax Rebate, capped at S\$200.
• The SG60 Baby Gift for babies born in 2025.
• A S\$100 SG Culture Pass for citizens aged 18 and above, redeemable for arts and heritage activities.
• Rental support of S\$600 for hawker and market stallholders.
• S\$100 ActiveSG credits for all members to promote sports and wellness.

Boosting Businesses and Economic Growth

To support businesses and stimulate economic growth, the government announced the following:

• Corporate Income Tax Rebate: A 50% rebate, capped at S\$40,000, with a minimum benefit of S\$2,000 for eligible companies.
• Progressive Wage Credit Scheme: Enhanced co-funding for wage increases, with rates rising by 10 percentage points in 2025 and 5 percentage points in 2026.
• National Productivity Fund: A S\$3 billion boost to promote investments in productivity.
• R&D Investments: S\$1 billion allocated to refresh public biosciences and medtech research infrastructure and develop a national semiconductor R&D facility.
• Enterprise Compute Initiative: A S\$150 million program to integrate AI solutions into business processes.
• Private Credit Growth Fund: A S\$1 billion fund to increase financing options for high-growth local enterprises.
• Changi Airport Development Fund: A S\$5 billion top-up to support airport infrastructure, along with guarantees to lower borrowing costs.
• Future Energy Fund: Another S\$5 billion to enhance clean energy infrastructure and security.

Equipping Workers for the Future

To ensure a skilled and future-ready workforce, the government has introduced several initiatives:

• SkillsFuture Enhancements: Up to S\$3,000 per month in training allowances for selected full-time courses, capped at 24 months.
• Workfare Skills Support: New tiers of support for lower-wage workers.
• SkillsFuture Enterprise Credit: A redesigned program offering S\$10,000 in credit to companies with at least three resident employees.
• Senior Employment Credit: Extended to end-2026, providing wage offsets for employers hiring seniors aged 60 and above.
• CPF Contribution Rates: A 1.5 percentage point increase for workers aged 55 to 65 starting January 2026.
• Uplifting Employment Credit: Extended to end-2028 to support hiring of ex-offenders.

Building a Sustainable and Inclusive City

The government emphasized sustainability and inclusivity with new measures:

• Heavy Vehicle Zero Emissions Scheme: Introduced alongside an Electric Heavy Vehicle Charger Grant.
• Coastal and Flood Protection Fund: A S\$5 billion top-up to enhance climate resilience.
• Climate-Friendly Households Program: Additional S\$100 worth of vouchers for eligible households.
• Fresh Start Housing Scheme: Increased grants from S\$50,000 to S\$75,000 for second-timer families in public rental flats.
• Childcare Fee Caps: Reduced caps to S\$610 for Anchor Operator centers and S\$650 for Partner Operator centers.
• Matched MediSave Scheme: A five-year program offering dollar-for-dollar matching grants up to S\$1,000 annually for MediSave top-ups.
• Long-Term Care Services: Increased subsidies for residential, home, and community care services by up to 15 percentage points.
• Enabling Employment Credit: Extended to end-2028 to support hiring of persons with disabilities.

Projected Surplus and Macroeconomic Outlook

The Ministry of Finance forecasts an overall fiscal surplus of 0.9% of GDP, driven by higher-than-expected Corporate Income Tax collections, which are projected to account for 4.1% of GDP in FY25. Net Investment Returns remain a key revenue source. The budget positions Singapore to adopt expansionary policies if global economic conditions deteriorate. Despite external uncertainties, the government maintains a GDP growth forecast of 2.5% for 2025.

Conclusion

Singapore’s Budget 2025 underscores a balanced approach to addressing immediate social needs, fostering long-term economic growth, and celebrating the nation’s progress. With a focus on inclusivity, sustainability, and resilience, the budget sets the stage for a stronger and more united Singapore.