Budget 2025 to see 9.6% rise in ministries’ expenditure
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The 2025 Budget also included measures to encourage economic growth and sustainability, and nurture an inclusive society.
PHOTO: ST FILE
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SINGAPORE - Prime Minister Lawrence Wong on Feb 18 unveiled a bumper Budget providing additional support for Singaporeans to tackle the uncertainties ahead.
PM Wong, who is also Finance Minister, announced a $143.1 billion Budget to tackle cost pressures and equip workers throughout life. Budget 2025 also included measures to encourage economic growth and sustainability, and nurture an inclusive society.
It is expected to be an increase in expenditure of 6.6 per cent from the 2024 Budget, with all Singaporeans expected to benefit. This includes $123.8 billion in expenditure by the various ministries, a 9.6 per cent increase from ministries’ spending in financial year (FY) 2024.
Expenditure by the Health Ministry is expected to surge by $2.9 billion, or 16.3 per cent year over year, mainly due to higher support for public healthcare institutions, implementation of Age Well SG programmes, higher operating costs with new and expanding healthcare institutions, as well as the construction of major healthcare facilities.
Defence Ministry expenditure is expected to increase by $2.6 billion, or 12.4 per cent, as the Government accelerates projects such as the NS Square, a facility for large-scale events and the National Day Parade.
Special transfers to households are estimated to add up to $3.4 billion in Budget 2025. A total of around $2 billion for SG60 vouchers,
Special transfers to businesses are estimated to be $300 million, mainly from a corporate income tax rebate cash grant.
The Changi Airport Development Fund,
The National Productivity Fund
To fund these measures, corporate income tax collections are estimated to increase by $1.8 billion, or 5.8 per cent, to $32.7 billion due to strong economic growth in 2024. Personal income tax collections are projected to rise by $1.3 billion, or 6.7 per cent, to $20.2 billion due to strong nominal wage growth in 2024. Goods and services tax collections are expected to increase by $1.1 billion, or 5.5 per cent, to $21.7 billion from growth in private consumption. Collections from other taxes, which include the foreign worker levy and water conservation tax, are also expected to rise.
As a whole, PM Wong expects to end FY2024 with a surplus of $6.4 billion, or 0.9 per cent of gross domestic product (GDP). The surplus is much higher than the $800 million initially projected for the year, and reverses a deficit of $2.6 billion in FY2023.
PM Wong is expecting another surplus, amounting to $6.8 billion, in FY2025.
“Meanwhile, we are certain that expenditure will continue to rise. Government spending has been rising steadily over the years from about 15 per cent of GDP to about 18 per cent,” said PM Wong, adding that spending could go up to 20 per cent of GDP by around 2030.
“With growing global uncertainties and the need to invest more in our workers and better support our rapidly ageing population, there will be added pressure to raise spending – possibly at a pace that exceeds previous increases,” said PM Wong, noting that the Government will spend responsibly and ensure resources are allocated effectively.
“Ultimately, we will always ensure that all Singaporeans benefit from the nation’s progress.”
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