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Budget 2025: Making Cents of it All!
- Tan Ding Rui, Lan Sin Yu, and Bryan Pak
- 2 days ago
- 9 min read
Introduction
Against a backdrop of turbulent geopolitics, economic uncertainty, and the intensifying threat of climate change, Budget 2025 demonstrates the Government's commitment to navigating today’s challenges while building a strong foundation for future progress.
Budget 2025 focused on several key concerns impacting Singaporeans, namely:
Empowering Singaporeans financially;
Business workforce transformations; and
Environmental sustainability.
So what exactly does this year’s Budget entail? In this Policy Explainer, we will summarise the key pointers of Budget 2025, as well as a brief history and introduction of the Singapore Budget!
What Is The Singapore Budget All About?
The Singapore Budget is an economic blueprint that outlines the financial focus of the Government for the fiscal year ahead. Thus, it reflects the Government’s economic and social priorities in the coming year.
Stages of the Budget-Making Process
Owing to the participatory nature of the Budget formulation process, the Government undergoes several rounds of consultations and parliamentary approvals, placing a strong emphasis on public input and collaborative decision-making. This also includes citizen engagement for information transparency in Budget 2025.
Budget Planning: Planning for the Budget commences, usually in the previous fiscal year.
Pre-Budget Engagement: Discussions and dialogue sessions are held to refine the scope of the annual Budget.
Release of Budget Statement: The Minister of Finance will issue a Budget Statement to inform Singaporeans of the Budget.
Budget Debate: Parliamentary debates by Members of Parliament (MPs) commence, gathering feedback over the proposals.
Committee of Supply: A Committee of Supply will be formed according to each Ministry, allowing MPs to scrutinise the wording of the Budget.
Voting: Once passed by Parliament, the Supply Bill ensures that the Budget is approved, authorising the Government to spend the allocated funds where necessary.
Post-Budget Dialogue: The Budget Process ends with a Post-Budget Dialogue conducted by grassroots organisations for Singaporeans to express their views on the Budget by agencies like REACH.
For more information on the Budget-making process, check out MAJU’s previous Explainer which goes into further details.
What Are The Key Trends In The Past Five Iterations Of The Singapore Budget?
In 2022 and 2021, the COVID-19 Pandemic dictated priorities for the Singapore Government. Nonetheless, we can infer from the past five years that the Budget has revolved around several critical areas of concern, namely:
Economic restructuring and business growth;
Strengthening social support systems for the vulnerable;
Investing in environmentally sustainable infrastructure; and
Future readiness amidst global uncertainty.
Introduction of Budget 2025
Singapore’s Budget 2025, titled “Onward Together, for a Better Future Tomorrow” was officially announced on 18 February 2025 by Prime Minister and Minister for Finance Lawrence Wong. Fundamentally, Budget 2025 aims to tackle several key concerns. It covers issues like the rise in cost-of-living, the need to cultivate a pro-business environment, and fueling the green transition to combat climate change.
Empowering Singaporeans, Families And Seniors Financially
Vouchers and Credits for Singaporeans
To celebrate SG60 and to recognise the contributions of Singaporeans in nation building, the Government has given all Singaporeans aged 21 and above S$600 in SG60 vouchers, with seniors aged 60 and above receiving S$800 in SG60 vouchers. These SG60 vouchers can be used at all shops that accept Community Development Council (CDC) vouchers to defray the rising living expenses of all Singaporeans.
According to the 2021 Population Survey on the Arts conducted by the National Arts Council, there was a decline in overall arts attendance from 87 per cent in 2019 to 79 per cent in 2021. This indicates a trend of declining engagement with the local arts and culture scene in Singapore.
The SG Culture Pass was designed to encourage Singaporeans to participate in arts and heritage activities. It provides all Singapore citizens aged 18 and above with S$100 worth of credits, to cover the cost of tickets for arts and heritage events. This aims to encourage more Singaporeans to participate in such activities to revive and actively engage with our local arts scene.
Large Families Scheme
In Singapore, the cost of raising a single child is extremely high, let alone having multiple children. According to Channel NewsAsia, families will have to set aside S$350,000 to raise a child to adulthood. Financial initiatives thus seek to provide financial security for couples considering expanding their families but find themselves deterred by the high costs of raising a family.
Despite 2024 being the Year of the Dragon, which historically spurs higher birth rates, Singapore’s total fertility rate fell to a historic low of 0.97 in 2024. This is especially concerning for Singapore as it will exacerbate the problem of a shrinking workforce. To counter this, the Government has introduced the Large Families Scheme, which is available to families for each third and subsequent child.
Firstly, there will be a S$5,000 increase in the Child Development Account (CDA) First Step Grant. Next, S$1,000 LifeSG credits will be distributed every year to families during the years that the third or subsequent child turns one to six. These can be used to cover the cost of essentials like preschool and healthcare expenses, allowing the family to save some money and spend it in other areas. Lastly, there will also be a new S$5,000 Large Family MediSave Grant, which will be deposited into the mother’s MediSave account. This can be used to cover the mother’s healthcare costs and even those of other dependents.
Matched MediSave Scheme for Seniors
In 2021, the Government launched the Matched Retirement Savings Scheme to help senior citizens with lower savings to save for future healthcare costs. This encourages seniors to deposit into their CPF Retirement Account (RA), with joint support from the Government in order to save up for retirement. From 2025, the age cap of 70 is no longer applicable; seniors aged 55 and above can receive up to S$2,000 in matching government grants for Retirement Account top-ups.
Additionally, with the increasing costs of healthcare due to Singapore’s rapidly ageing population; medical insurance costs in Singapore are projected to further increase by 12 per cent in 2025. To combat this, the Singapore Government is introducing a five-year Matched MediSave Scheme for low-income senior citizens aged 55 to 70 years old. This scheme complements the aforementioned Matched Retirement Savings Scheme. For every dollar of voluntary top-ups to their MediSave accounts, the Government will provide a dollar-for-dollar matching grant of up to S$1,000 per year. It is anticipated that these contributions from the Government will support this vulnerable group.
Strengthening Businesses & Workforce Resilience
Corporate Support: Easing Costs and Driving Growth
To help businesses manage rising operational costs, the Government is offering a 50 per cent corporate income tax rebate. Furthermore, active companies employing at least one local worker in 2024 will receive a minimum benefit of S$2,000, with the rebate capped at S$40,000 per company.
These measures will provide direct financial relief, particularly benefitting small and medium enterprises (SMEs) that may face tighter profit margins. Reducing tax burdens on businesses signals the Singapore Government’s willingness to support enterprise growth and encourage investment in operations, innovation and workforce development.
Additionally, this relief promotes local employment by creating more opportunities for Singaporeans to secure meaningful and stable jobs. More Singaporeans stand to benefit from employment that offers career progression and skill development. Such industries include semiconductor manufacturing, artificial intelligence and pharmaceuticals.
Critically, this fosters a workplace that is not only resilient but also equipped with relevant industry expertise, enhancing long-term employability. Moreover, by prioritising local talent, workers can expect greater job security and reduced risk of displacement. This aligns with the Government’s long-term vision of an inclusive and resilient economy as locals can secure stable employment.
Industry Support
With a global shift towards a green economy, alongside Singapore’s push towards energy security, the Government is increasing funding for future energy solutions through a S$5 billion injection for the Future Energy Fund. This funding encourages businesses to develop and adopt sustainable energy technologies, aligning with Singapore’s long-term climate goals while ensuring energy security and cost efficiency. By investing in green infrastructure, businesses end up lowering operational costs by consuming fewer resources, leading to significant cost savings.
To further strengthen business competitiveness and drive long-term economic growth, the Government has supplemented the National Productivity Fund by an additional S$3 billion. The National Productivity Fund was first introduced in 2010 to support businesses in boosting productivity, driving innovation, and upgrading their workforce. The additional top-up reflects the Government’s continued commitment to strengthening industry capabilities and ensuring long-term economic resilience. For instance, companies can leverage the fund to integrate robotics, AI and data analytics into their operations, allowing for faster and more precise decision-making.
The Global Founder Programme was also launched during Budget 2025. It provides up-and-coming entrepreneurs with funding support and improved access to talent, with the aim of promoting start-up relocation and expansion in Singapore. Startups in cutting-edge industries such as fintech, biotech, artificial intelligence and sustainability will receive assistance to accelerate their growth. Beyond benefitting startups, the Global Founder Programme enhances Singapore’s long-term competitiveness in the innovation landscape. With strong government backing and a dynamic business environment, the programme cements Singapore’s status as a premier destination for ambitious entrepreneurs looking to scale their businesses globally.
Supporting Employee Upskilling and Inclusive Hiring
As part of Budget 2025, the Government is strengthening support for employee upskilling and inclusive hiring. One such initiative is an increase in Progressive Wage Credit Scheme Co-Funding Support. The scheme was first introduced in Budget 2022, with the aim of uplifting lower-wage workers and promoting equitable wages. The rise in co-funding levels highlights the Government’s continued commitment to supporting wage growth while easing cost pressures on businesses. In that sense, not only do workers receive higher wages from government top-ups into their GIRO accounts, businesses also benefit from cash incentives for payroll wages, making it easier to attract and retain workers without compromising profitability.
To provide greater support for mid-career workers looking to upgrade their skills and transition into new roles, the Government introduced the SkillsFuture Level-Up Programme. With industry shifts and an aging population, many mid-career workers face employment related challenges such as retrenchment due to automation and AI. Many are also deterred by the financial barriers to upskilling and subsequently, career progression challenges.
The SkillsFuture Level-Up Programme consists of qualification and training programs, allowing mid-career Singaporeans to remain up-to-date with modern developments, and facilitate career switches. Additionally, mid-career training allowances are provided for job-related training, subsidising costs and encouraging the habit of lifelong learning.
Encouraging Inclusive Hiring
As part of Budget 2025, the Government has extended two wage support schemes: the Senior Employment Credit and the Uplifting Employment Credit. These measures aim to encourage businesses to hire and retain senior workers and ex-offenders respectively, promoting a more inclusive and resilient workforce.
As some businesses may be hesitant to hire senior employees due to concerns about productivity and wage costs, the Senior Employment Credit provides wage offsets to employers who hire Singaporeans aged 60 and above. By reducing the cost of employing seniors, businesses are encouraged to tap into their wealth of experience, ensuring they remain valued contributors to the workforce.
Likewise, ex-offenders often face difficulties finding stable employment due to limited job opportunities and societal stigma. As such, the Uplifting Employment Credit similarly provides wage offsets to businesses that hire ex-offenders, helping them reintegrate into society through meaningful employment. Not only do businesses receive financial initiatives for following fairer employment practices, ex-offenders also gain stable jobs, reducing the risk of reoffending and improving social reintegration.
Building A Sustainable City
S$5 Billion top-up for Coastal & Flood Protection Fund
The Coastal & Flood Protection Fund was originally established in 2020 to protect Singapore from rising sea levels while enhancing flood resilience.
One flagship project is the development of Long Island, which may become Singapore’s 18th reservoir. The proposal involves the reclamation of three tracts of land extending from Marina East to Tanah Merah. Similar to the design concept of Marina Barrage, a large tidal gate and pumping station will be built in between to control the water level and reduce flood risks in the East Coast area. In addition to coastal protection, the Long Island is also expected to provide amenities for watersports and recreation and space for industrial facilities to operate.
Electric Heavy Vehicle Adoption
Budget 2025 prioritises decarbonising the transport sector, which contributes to a substantial 15 per cent of national emissions. Of concern are heavy vehicles, which account for 22 per cent of registered vehicles. To accelerate the shift to electric heavy vehicles, the Government is implementing a dual-pronged approach, consisting of the Heavy Vehicle Zero Emissions Scheme and Electric Heavy Vehicle Charger Grant.
The Heavy Vehicle Zero Emissions Scheme comes in the form of financial incentives that can offset a portion of the initial investment in purchasing electric heavy vehicles. Consequently, this would help to speed up the transition from diesel vehicles to clean-energy electric heavy vehicles by making the switch more economically feasible.
Another feature of the electric heavy vehicle adoption strategy is the provision of electric charging infrastructure. To support the development of electric charging infrastructure, the Electric Heavy Vehicle Charging Grant provides co-funding for the installation of EV charging infrastructures. This grant aims to enhance the accessibility and convenience of electric charging options for heavy vehicles, easing the transition.
Climate Vouchers Scheme
The Climate Voucher Scheme, which is under the Climate Friendly Households Programme, aims to empower Singaporean households to participate in climate action. These vouchers are designed to supplement the costs of household appliances that are borne by consumers. This is a core concern, since energy-efficient appliances, despite their long-term utility bill savings, often carry a higher upfront price tag.
Families living in private properties will be eligible for S$400 in climate vouchers. Families in HDBs are entitled to an additional S$100 top-up to offset the expenses for energy-efficient appliances. This approach directly addresses the financial considerations that deter individuals from switching to more energy-efficient appliances. Consequently, the programme encourages the population to play an active role in reducing Singapore's carbon footprint.
Conclusion
As Prime Minister Wong mentioned, “It is a Budget for the future - tackling immediate challenges while laying the groundwork for a stronger, more resilient tomorrow.”
Moving forward, Budget 2025 represents the Government’s robust commitment to balancing present needs while charting a course for the future. With continuous planning and refinement, this ensures that Singaporeans can build a resilient, inclusive, and prosperous Singapore for generations to come.
This Policy Explainer was written by members of MAJU. MAJU is a ground-up, fully youth-led organisation dedicated to empowering Singaporean youths in policy discourse and co-creation.
By promoting constructive dialogue and serving as a bridge between youths and the Government, we hope to drive the keMAJUan (progress!) of Singapore.
The citations to our Policy Explainers can be found in the PDF appended to this webpage.
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