The Government is setting an economic growth trajectory of 2 to 3 per cent per annum for the next decade. To achieve this level of growth, Deputy Prime Minister Lawrence Wong emphasised the importance of productivity and value creation in Singapore’s future.
Mr Wong said this in his budget debate round-up speech on 28 February 2024.
“The best way to deal with inflation is for businesses and wages to grow in real terms, and to achieve that, we need better economic growth.
“Only a few countries at our stage of development have been able to sustain such high productivity growth. It requires a continual transformation of our economy,” said Mr Wong.
He added that while firms must learn new ways to do business, workers must also learn new skills to contribute effectively and embrace new technologies.
Mr Wong also further elaborated on how Budget 2024 is focused on helping workers train and upskill while assisting businesses to cushion the cost increase associated with transformation and increased wages.
Following the announcement of the SkillsFuture Level-Up Programme during Mr Wong’s Budget Statement on 16 February 2024, many Members of Parliament proposed additional ways to bolster the efficacy of the SkillsFuture system.
NTUC Assistant Secretary-General Desmond Choo spoke of reducing the qualifying age for the SkillsFuture credits – currently set at 25 – to encourage more workers to embark on their upskilling journey at a younger age.
Mr Wong said that while he appreciated the strong support and interest in the SkillsFuture system, he felt much could be learned from implementing the level-up programme.
“We will make this first move. We will consider all your feedback and suggestions and how to further fine-tune and enhance the scheme as we gain more experience over time,” he said.
In pursuing better social equity and mobility, Mr Wong reiterated that the budget will help soften the impact of wage increases for businesses.
“We are raising the wages for lower-wage workers. I'm sure everyone supports this, but it will mean higher costs initially for businesses, especially SMEs.
“And that's why the Government is doing more in this budget to co-fund the increase,” he said.
Mr Wong acknowledged NTUC Deputy Secretary-General Heng Chee How’s appreciation for increasing CPF contributions for older workers, but also recognised that it would spell higher costs for businesses.
“Again, this will lead to higher costs for businesses, but the government will offset half the increase in employer contributions for 2025,” he said.
In the end, Mr Wong said that it is the Government’s prerogative to ensure that the CPF system provides for the basic retirement needs of all Singaporeans – as long as they consistently work and contribute to their CPF.
He said: “This year's budget is the first step in advancing our forward Singapore agenda. We want to refresh our social compact to unite our society in this troubled world.
“We want to build a better Singapore not just for a few, but for all Singaporeans.”
