Singapore's Budget 2025, recently unveiled by Prime Minister Lawrence Wong on 18 February, offers a positive but realistic take on the nation’s outlook. Key priorities include supporting Singaporeans as they face rising costs-of-living, investing in the nation's healthcare and defence sectors, and driving continued economic growth. While recognising both imminent and long-term challenges, the Budget is an earnest attempt at balancing the needs of all Singaporeans, maintaining a neutral standing on the global stage while reinforcing leadership across key industries, as well as investing strategically in building a vibrant and resilient future.
Our experts at the Lee Kuan Yew School of Public Policy (LKYSPP) weigh in:
Tackling key priorities, short and long-term goals
“This Budget balances between catering to the
current needs of households — whether it’s cost of living, education, healthcare — and our long-term economic needs, such as restructuring, training, jobs redesign, and our elderly population. There is substantial financial support for citizens, but at the same time the budget made significant investments into our future energy and economic needs.
Some of the key priorities that were taken into consideration when designing Budget 2025 would have included short-term priorities, such as high costs of living and elder care, as well as longer-term priorities, such as economic and digital transformation, our future energy needs, and boosting fertility rates.
To address more immediate needs, CDC vouchers are dispersed in a staggered way, so that households have regular access to funds for their day-to-day expenses. It also helps that these vouchers relieve the cost of daily necessities — supermarkets, neighbourhood shops, for example — and will go a long way throughout the year in helping alleviate rising household costs.
As Prime Minister Wong mentioned, the longer-term solution is the availability of jobs and having a vibrant economy. So, we see some of the other measures which relate to SkillsFuture, restructuring the economy and supporting enterprises. These things will help bolster incomes and economic activities more so than short-term cash incentives. But the two work hand in hand: one alleviates short-term pressures; the other one would position the workers and households for longer-term sustainability.
Looking ahead, the budget surplus may provide some wiggle room for the kinds of measures that the government can afford to roll out. But, the competing needs of different sectors and across various layers of society will become more urgent over time, whether it’s families, elderly, people with disabilities or businesses. So, there will be a lot of needs to satisfy with the finite resources we’ve got.”
- Dr Woo Jun Jie, Senior Lecturer
Lifting productivity curve to mitigate ageing population
“The balance that the government is trying to strike with this year's Budget is the long-term issues that confront Singapore, such as an
ageing population. In a few years, we will be a super-aged society just like those in South Korea and Japan, which means one in five Singaporeans will be 65 years and above by 2030. We know productivity will decrease as the population ages, but the national productivity schemes the government intends to implement could unleash what we call the ‘third demographic dividend’.
The first demographic dividend is when you have a lot of young people, so economic growth happens very quickly and is catalytic. The second demographic dividend happens when, as people grow older, the population starts to save, resulting in the accrual of a lot of savings for the country.
Somehow the perception is that an ageing population means the country is in decline, but I don't think so. If we can lift the population’s productivity, we will likely see a ‘third demographic dividend’, which means everyone, regardless of age, is going to be valued for how productive they are. They're going to play a role in society not just for paid work, but also for unpaid work. Studies have shown that if older adults are very actively engaged, it leads to better lives — and that could flatten the healthcare cost. Here, I think the government is trying to lift the productivity curve to buffer against an ageing population, and ensure our economy remains productive.”
- Dr Reuben Ng, Assistant Professor
Positioning care and inclusion
“Budget 2025 has been framed as a ballast against the threat of a ‘fragmented and troubled world’, to borrow words from PM Wong’s speech. What stands out to me is how care and inclusiveness are explicitly highlighted as priorities in the Budget, with several initiatives targeted at improving support for lower-income families and seniors.
Against a global landscape where right-wing forces have been pushing to scrub goals of inclusion, equity, and social protection from state agendas — we see this playing out in the United States right now — this budget’s bold commitment offers me hope that this Budget, and future Budgets, will demonstrate the importance, and viability, of state-led initiatives to protect vulnerable populations.”
- Dr Tan Shin Bin, Assistant Professor
Strengthening business resilience
“The slew of initiatives aims to augment and empower across the business value chain. From a research and development (R&D) perspective, its S$1 billion investment is against our Research, Innovation and Enterprise plan for 2025 and 2030, where billions of dollars have been invested into R&D. So, that's really the upstream portion; we are creating the scientific discoveries for application. If I were doing business today in Singapore, I would be concerned about the current risky environment, but I might also be very thrilled about the opportunities, empowered by these measures.”
- Dr Reuben Ng, Assistant Professor
Moving towards sustainable support
“Years from now, we may look back on this year's Budget as the moment when Singapore abandoned its habitual aversion to giving away cash, and instead made large-scale, unconditional cash transfers a
regular arm of social policy. Whether it is because the upcoming General Election has forced policymakers to focus on present public concerns, or because the emergency Budgets of the pandemic years have helped to de-stigmatise cash handouts, we will never know. The upside, hopefully, is that we can approach discussions of financial support for poorer households with a more open mind in the future.
The danger of one-off cash transfers, if it becomes a policy habit, is that it may create unsustainable public expectations without improving long-term economic security. That's why we must look away from the media headlines and look towards the parts of the Budget that talk about housing affordability, employment opportunity, wage adequacy, health and social services, retirement needs and support for caregivers. Those are the things that define a better life and enable a more hopeful future.”
- Dr Ng Kok Hoe, Senior Research Fellow, Head of Case Insights Unit & Social Inclusion Project