Singapore’s Budget for 2024 comes at a particularly pivotal time in the country’s history, as it anticipates a transition in political leadership. It is also the first instalment of measures to be rolled out after the
Forward Singapore Exercise, which reflects the new leadership’s intention to balance traditional policymaking against calls for systemic change.
On 20 February 2024, the Lee Kuan Yew School of Public Policy convened a panel of three speakers to discuss the implications of Singapore’s Budget 2024. Led by Senior Research Fellow, Head of the Social Inclusion Project and Case Insights Unit
Dr Ng Kok Hoe, the panel comprised the host of The Financial Coconut podcast
Mr Reggie Koh, the Director of Advocacy, Research and Communications at AWARE
Ms Sugidha Nithiananthan, and the President of Singapore Youth for Climate Action (SYCA)
Ms Terese Teoh.
What is unprecedented about Budget 2024?
According to the panellists, Budget 2024 represents a departure from short-term policymaking by linking initiatives to the Forward Singapore exercise. While it indicates a clear shift towards more progressive policymaking, that shift is uneven and there are areas where more attention needs to be paid.
The most striking feature of Budget 2024 is its use of language, which Ms Sugidha argued suggested a “tacit acceptance and understanding” of the social and economic inequality in the country. She said that a GINI coefficient of “0.433 is really not a good indicator of (Singapore) having good income equality”. The references to an “education arms race” also suggest an acknowledgement of structural issues in Singapore’s meritocratic system.
Inequality and social mobility
Budget 2024 took clear steps towards building an inclusive society and a sustainable economy. About S$56.1 billion (US$42.1 billion) or 43 per cent of the S$131.4 billion (US$98.6 billion) dollar-budget
was allocated to social spending, and about S$6 billion (US$4.5 billion) was dedicated to enabling Singaporeans to upgrade their skills and take on higher-value jobs. For instance, the
SkillsFuture Mid-Career Support Package provides course fees, subsidies and training allowances for mid-career workers.
Budget 2024 also took action towards addressing inequality and improving social mobility in Singapore. The enhanced
Workfare Income Supplement Scheme, higher subsidies for healthcare and education, and increased social safety net measures will provide greater support for lower-income groups.
Ms Sugidha said that all these increases in support are signs that the government is “recognising that all such families need help.” She also expressed hope about
the improvements made for people who need
Comlink+, a scheme supporting lower-income families with children residing in public rental flats to make progress towards stability, self-reliance and social mobility, or the 3 ‘S’.
Ms Sugidha noted that “adding the element of coaching, mentoring, has the potential to make a big difference for low-income families to help them plan their lives and get themselves moving towards better education for the children, home ownership, among others.” She added: “These are the things that can be key elements to work towards breaking the inequality cycle.”
Hits and misses
However, the panellists agreed that accessibility to these subsidies and allowances could be improved, especially for marginalised groups of people. Mr Koh used the SkillsFuture expansion scheme as an example, observing that the scheme did not target degree holders, or those who were earning an extremely low income.
He stated that the scheme had a very specific target group, those “in the middle…maybe they've been working for many years in an SME, they work very hard, but their wage never kept up because of the (type of) industry.” He argued that the scheme would be “a hard sell and it will still be a hard sell for a while,” noting that the training allowance would be barely sufficient for those who have more financial commitments.
Expanding the social safety net
While Budget 2024 extends several measures to support lower-income families, accessibility is the next frontier in ensuring that these subsidies and grants reach the people who need them.
Ms Sugidha noted that low-income households continue to have difficulty accessing subsidies like those for childcare and education, and argued that these subsidies by themselves were not good enough, and they need to be “easy to navigate so that their children won't end up not going to school when the year starts because they still haven't figured out how to get these subsidies”.
She cited how Community Development Council (CDC) vouchers were another example of subsidies that were not made accessible enough. Recounting the experiences of someone AWARE worked with, referred to as “Jane”, she told of how the latter had rented a room but missed out on several tranches of CDC vouchers because she thought they were given only to each Singaporean residential unit, when they are in fact distributed to each economic unit.
The importance of being sustainable?
Budget 2024 marked the first time that environmental sustainability was highlighted as a key national priority. There were measures announced to transition Singapore to a low-carbon future, including the import of low-carbon electricity, the establishment of a carbon tax, implementation of incentives for businesses to adopt energy-efficient technologies, and research funding for green technologies like renewable energy and electric vehicles.
Ms Teoh observed the need to strike a balance between economic growth and being a sustainable economy. With regards to Singapore’s
installation of a second liquefied natural gas (LPG) generator, she posed a key question, “Is there actually going to be an induced demand that arises because we
invest in the infrastructure…or is there really a demand that justifies investing in the infrastructure in the first place?”
While these measures signal the government's commitment to tackling climate change in line with the Paris Agreement, Ms Teoh said there remained much room for improvement in hitting targets the government had pledged to work towards. She raised the Global Methane Pledge as an example, which was made by Singapore to
reduce methane levels by 30 per cent, as compared to that in 2020, during the 28th meeting of the Conference of the Parties (COP 28) in November 2023.
Ms Teoh cautioned that Singapore was almost certainly going to exceed this limit, and noted that the Climate Action Tracker had reported that there had been “no follow ups on this target in the latest Nationally Determined Contribution, which is a climate progress report that Singapore submitted to the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat.”
Ms Teoh noted that bolder policies like a moratorium on new petrol vehicle sales may be needed to achieve carbon neutrality by 2050, and that Singapore is drifting away from reaching that target with its latest moves in the sector.
Whose ‘shared future’ are we building?
Dr Ng observed that the lack of care towards people working in “construction, domestic care work, is deeply disappointing”. He added: “You cannot create a more caring society while completely omitting a group that is part of and contributes to your society. You are either a caring society or you are not.”
Echoing this view, Ms Sugidha, cited an Oxfam study that showed the
statistic of unpaid care and domestic work totalled S$14.5 trillion (US$10.8 trillion) globally, three times the size of the global tech industry.
She noted the need for a caregiver grant, “for people who step away from work to take care of caregiving responsibilities, give them a grant that takes care of a cash component, the CPF component, according to what workers in this caregiving industry earn.” She added: “That would be a fair way of paying out for people who are doing work that we need in a fast-greying society.”
Embracing change, maintaining focus on economic progress
Balancing idealism with realism, Singapore embraces change while avoiding radical disruption to the workflow of traditional policymaking in the country. There is clear retention of focus on economic competitiveness and growth, but there is also more attention to fostering a more equitable society.
While deeper reforms are still needed to substantively address inequality and protect the most vulnerable members of society, Dr Ng closed the session with this food for thought: “If a welfare state is a state that takes good care of its people's social needs, then…we ought to be a good welfare state, a sustainable and good welfare state.”