News analysis
An election Budget? Maybe not in the way you think
Sign up now: Get ST's newsletters delivered to your inbox
PM Lawrence Wong unveiled a bonanza of vouchers, credits, tax rebates and top-ups for Singaporeans on Feb 18.
ILLUSTRATION: CHNG CHOON HIONG, ADOBE STOCK
Follow topic:
SINGAPORE - There is little doubt Budget 2025 is an election Budget.
After all, we are in an election year, with the constitutional deadline to go to the polls in November.
Of course, Budgets are dubbed election Budgets not just because they happen to fall in an election year.
The phrase is bandied about whenever there are goodies galore, and Prime Minister Lawrence Wong on Feb 18 unveiled a bonanza of vouchers, credits, tax rebates and top-ups for Singaporeans.
To celebrate Singapore’s 60th year of independence, he introduced an SG60 package
Every Singaporean household will get an additional $800 in CDC vouchers
“We will continue to provide support for as long as needed, within our means,” PM Wong said, adding that inflation in Singapore has already come down and is expected to ease further.
These two voucher schemes alone will cost the Government about $3 billion.
In addition, there will be a 60 per cent personal income tax rebate capped at $200 for Year of Assessment 2025, designed to benefit those who earn less, as well as SG Culture Pass credits and ActiveSG credits for people to pay for cultural and sporting pursuits.
Children will also benefit, in the form of $500 in LifeSG Credits for the younger ones
Even Singaporeans living in private property will get more this year. For the first time, they, too, will get climate vouchers worth $400.
It is a Budget that truly lives up to the tagline of a “Budget for all Singaporeans”.
Such largesse is often viewed with suspicion, drawing refrains of “election Budget”. The implication is that the goodies will result in a better showing at the voting booth.
But this connection is perhaps too simplistic, given that voters are motivated by different concerns. If past Budgets in election years are any guide, Budget goodies have not always resulted in better outcomes at the polls for the ruling party.
In the 2011 Budget, for instance, up to $800 in growth dividends was handed out to every Singaporean. The general election that year was when the PAP lost a group representation constituency for the first time.
It is perhaps also an overly cynical view of the Government, since the extra money given out at such end-of-term Budgets has more to do with prudent husbandry and cumulative surpluses.
Under the Constitution, the Government has to balance the Budget over its full term. It already knows it will end the 2024 financial year with a surplus of $6.4 billion, and expects to end the 2025 financial year with an even bigger surplus of $6.8 billion.
Surpluses earned in one term of government cannot be carried over to the new term of government, which means the Government can afford to be more generous and give back some of the extras to Singaporeans.
But a focus on just the hongbao and handouts would be missing the wood for the trees.
For the Budget goes beyond appealing to individual interests, to ensuring that Singapore can lay the groundwork for a better future.
To this end, PM Wong also announced measures to tip the balance in Singapore’s favour and overcome challenges.
Bold moves were made in this Budget to enhance Singapore’s enterprise ecosystem. A Global Founder Programme will be launched later this year to encourage experienced entrepreneurs to anchor and start new ventures in Singapore.
There is also the new Enterprise Compute Initiative that will put in up to $150 million to help businesses access computing power so they can leverage artificial intelligence to transform.
On the infrastructure front, another $5 billion will be set aside
Looking further ahead, PM Wong also announced measures to protect Singapore against climate risks such as coastal flooding and to improve energy resilience through studying the potential deployment of nuclear energy here, among other things. The Coastal and Flood Protection Fund and the Future Energy Fund will each receive a $5 billion top-up.
There are also concrete steps taken to further strengthen the social support system, such as higher subsidies for long-term care services for seniors and for adult disability services.
Although PM Wong, who has been Finance Minister since 2021, has announced three other Budgets previously, this one has added significance.
It is his first as both Prime Minister and Finance Minister, and the moves unveiled will further make concrete the vision – first painted in the Forward Singapore exercise he led – of a nation that is dynamic, caring and inclusive, where people have good jobs, and where no one is left behind.
As PM Wong said, the 2025 Budget incorporates the aspirations and views of Singaporeans.
So, while the goodies will be welcomed by those dealing with cost-of-living pressures and other immediate concerns, this Budget is much more than that.
As a Budget for all Singaporeans, it goes beyond immediate gratification and prepares the ground for longer-term goals.
And that may just be what an election Budget calls for.
