Amid global economic headwinds, supply chain imbalance, the Ukraine war and layoffs, Mr. Lawrence Wong, Minister of Finance, unveiled the Singapore Budget 2023 to foster economic growth and drive the nation forward in a new era.
Singapore is a financial capital and transport hub that is often seen as a bellwether of global growth. Anchored in political stability, pro-business policies and transparent public institutions, the Budget 2023 aims to benefit both the economic and social front to help local businesses transform and innovate, equip workers, strengthen national resilience and enable lower-to middle-income families cope with the higher costs of living.
In summary, Budget 2023 focuses on three thrusts to address the challenges in the future economy.
1. Growing the economy
With economic competition getting more challenging across the world, the National Productivity Fund (NPF) will receive $4 billion to attract multinational investments. The fund was established in 2010 to support a wide range of measures for businesses to improve productivity and upskill workers. With the current budget, NPF’s scope will expand to include investment promotion in growth sectors, including banking and finance, global trading and in key manufacturing segments including electronics, chemicals and biomedical science.
As a leading international financial center and trading hub with access to seaports, the city-state aims to attract more MNEs to anchor their regional or even their global operations and headquarters in Singapore. This will help build new capabilities, develop key industries, and create jobs for Singaporeans.
Mr. Wong said: “The geopolitical context has shifted greatly. Great power contestation has intensified, most notably between the US and China. More and more MNEs are looking to re-shore, on-shore, or near-shore–that is relocating factories and offices to places where they are less likely to get caught in geo-strategic crossfires.”
The government introduced a new Enterprise Innovation Scheme to enhance the tax deductions where a super deduction of 400% will be granted on five key activities in the innovation value chain, R&D conducted in Singapore, registration and acquisition of intellectual property rights and training.
As part of the Forward Singapore exercise and SkillsFuture ecosystem, the new budget prioritized support for displaced workers and improved pathways to better jobs while ensuring that training translates into good employment outcomes.
Technology service providers like HCLTech welcomed the new schemes like Enterprise Innovation Scheme, Singapore Global Enterprises initiative and Jobs-Skills Integrators program. With its presence in Singapore for over three decades, HCLTech has been helping enterprises such as the Singapore Town Council implement customer relationship management and finance systems and integrate its processes across the island. It was also involved in SMRT Corporation’s first SAP implementation (systems, applications and products).
These new initiatives by the government will enable innovation-led economic growth, upskilling and reskilling the workforce and building a more resilient nation in the challenging times ahead. HCLTech was recently named a top employer in 25 countries, including Singapore, this year by the prestigious Top Employers Institute for its people-centric HR practices.
Ramachandran Sundararajan, Chief People Officer, HCLTech said: “Our fundamental belief that great ideas can come from anyone has helped us maintain a culture of diversity and inclusion. This empowers our 220,000+ employees to consistently find their spark and supercharge progress for not only themselves and their own careers, but also for our clients across industries to help drive their technology transformation and modernization.”
Strengthen social compact
Significant resources will be invested in four key areas: strengthening families, tackling inequality, social mobility and providing better care for a rapidly ageing population. Families are eligible to get subsidies for buying homes with the Enhanced CPF Housing Grant and the Proximity Housing Grant.
Working parents will receive measures including the Baby Bonus Scheme, significant preschool and education subsidies, and tax benefits like the Parenthood Tax Rebate and Working Mother’s Child Relief. The government has also doubled the Government-Paid Paternity Leave from two weeks to four weeks for eligible working fathers of Singaporean children born on or after 1 January 2024. Lower-income families will receive additional support to help achieve stability, self-reliance and social mobility.
Being one of the fastest-ageing nations, the government will increase the resources dedicated to supporting seniors. The ElderCare Fund received an additional $500 million to support means-tested subsidies for seniors who need home-based, center-based, or institutional care, while MediFund is received $1.5 billion to strengthen the safety net for lower-income individuals and seniors facing financial difficulties with their medical bills, supplementing the government subsidies, MediShield Life and MediSave.
Building a resilient nation
To build a more resilient Singapore, the government will invest in better crisis management by tapping into the capabilities of the private and people sector in responding to future crises. The government will continue to diversify critical supplies, review stockpiling strategies and insurance cost to ensure greater resilience.
Actions are being taken against the larger existential threat of global warming and climate change. The government has accelerated the low-carbon transition for Singapore to achieve net zero emissions by 2050. To provide a stronger price signal and impetus to reduce the carbon footprint, the carbon tax has been raised.
Efforts are being made to harvest solar energy, transition to cleaner energy sources like hydrogen and work with neighboring countries to develop regional power grids.
In short, the Budget 2023 reflects the principle behind the theme ‘Moving forward in a new era’ with a focus on building economic and social resilience. In the minister’s words: “we are reminded that every citizen and every sector of society has a part to play in ensuring Singapore’s security and defending our way of life. Indeed, our efforts to strengthen our overall resilience must reflect the values that motivate us as a people and as a nation.”
