Everybody’s Budget; everybody’s birthday, again

Coming just a few weeks after renri (the seventh day of Chinese New Year), the Chinese celebration of the day humans were created, the SG60 Budget feels like it’s everybody’s birthday again.

In his 2025 Budget speech, Finance Minister Lawrence Wong, who is also prime minister, said it was a “Budget for all Singaporeans”. From SG60 Vouchers to the Large Families Scheme and 50 per cent corporate tax rebates – there was indeed something for everyone.

Many business owners will undoubtedly appreciate such a carefully crafted Budget that enhances our technology and innovation engines, while providing respite from cost pressures.

This Budget also saw the government’s resolve to take bold steps to address future risks by exploring the usage of nuclear energy as an alternative sustainable energy source and investing in another new Changi terminal. Such large endeavours require significant capital.

With PM Wong mentioning that expenditure could reach an unprecedented 20 per cent of gross domestic product by 2030, a sense of prudency over the next few years needs to be observed. How can we ensure that the budgetary measures are well adopted to create the desired economic and productivity growth?

In Budget 2025, the government issued a redesigned S$10,000 SkillsFuture Enterprise Credit (SFEC) that will be more “accessible”. Furthermore, SFEC will now operate on a pre-paid credit scheme instead of on a reimbursement basis.

While this does address awareness and cashflow concerns, it does not address other reasons for not signing up to the SFEC such as manpower shortages to attend upskilling courses and relevance of the training.

In order for upskilling to be effective, companies also need to make additional investment in new equipment and digital solutions, which the government addresses through the Productivity Solutions Grant (PSG). Under the PSG, eligible enterprises can receive a sum of up to S$30,000 of co-funding to automate existing processes through IT solutions and equipment. In this day and age, S$30,000, the equivalent of 12 laptops, does not go very far.

Rather than a broad-based approach with something for everyone, perhaps a more targeted and customised approach is needed. In some ways, by spreading the support wide, the amounts promised are not substantial enough to move the dial and produce a worthwhile productivity uplift. Instead, larger sums dispersed in a more selective way, over a longer period of time, may be necessary. A longer phased grant programme also forces companies to make long-term plans about continuous development and upskilling.

Within the joint recommendations from our Singapore Business Federation-PwC Budget 2025 proposal, of which some were announced in the Budget speech, the “Queen Bees” initiative may prove useful. Under this initiative, more established businesses, being the “Queen Bees”, and the public sector can promote and drive other businesses in their supply chain towards basic digital adoptions such e-procurement or e-invoicing. This can cause a powerful knock-on effect so that a critical mass of businesses ends up benefiting from the cost efficiency and productivity gains. After identifying the “Queen Bees”, the government can provide them with larger sums of assistance over a longer period of time.

From a company’s perspective, businesses need to be proactive and not kick the proverbial can down the road. Government support can only help to an extent. Ultimately, businesses need to be in good health to use these support measures to their fullest potential.

Singapore’s 2025 Budget strikes a delicate balance between ambition and prudence. Bold bets on nuclear energy, infrastructure expansion, and digitalisation signal a forward-looking agenda. Yet, success also hinges on more targeted and sustained investments that yield meaningful productivity gains. Businesses must rise to the occasion, adopting a long-term mindset and capitalising on available support to reinvent themselves.

By fostering deeper partnerships between the public sector and industry leaders, Singapore can unlock a powerful ripple effect of innovation and growth for the next 60 years and beyond.

The writer is Tax Leader of PwC Singapore.