Singaporean Deputy Prime Minister Lawrence Wong has delivered the city-state's 2024 Budget Speech, which centered on helping Singaporean households augment their living needs through cash subsidies and vouchers, as well as investing in artificial intelligence (AI).
Wong - who also serves as the country's Finance Minister - was poised to take over from long-time Prime Minister Lee Hsien Loong, who was projected to step down by November "if all goes well," Bloomberg reported.
Singapore's GDP grew by 2.2% in the fourth quarter of 2023, compared to 1% in the third, with the year's final GDP reading clocking at 1.1%.
The island nation projected itself to have a 1% to 3% growth outlook for 2024.
However, issues such as the wealth gap of its citizens, GST, cost of living, and the country's poor fertility rate complicate its superior economic status across the ASEAN bloc.
Wong: SG in 'Balanced' Fiscal Position
In his speech to parliament, Wong said that Singapore would expect a budget surplus of nearly SG$800 million ($594 million), which meant that the country's 2023 budget deficit widened more than expected.
The government's expenditure was also set to increase SG$111.8 billion ($83.05 billion) - SG$4.9 billion ($3.64 billion) or 4.6% higher than the revised 2023 figure, national broadcaster Mediacorp reported.
Singapore has a constitutional requirement for the government of the day to maintain a balanced budget over each parliamentary term, which meant that it could not run a deficit at the end of its term.
The next general elections are scheduled for November 2025, with the ruling People's Action Party (PAP) expected to prolong its tenure in government ever since the Republic of Singapore was established in 1965 after it was kicked out of the Federation of Malaysia.
"For 2024, the outlook is mixed," Wong told MPs. "Budget 2024 is, therefore, about taking concrete steps to build our shared future together."
Budget 2024 Highlights
Wong announced that the city-state would increase support for households and companies as Singapore continued to grapple with inflation and the effects of the COVID-19 pandemic.
The government would also provide more vouchers and cash handouts to Singaporean households, as well as rebates for utility bills through its Assurance Package, which is designed to help households cope with rising costs. It would cost the country an additional SG$1.9 billion ($1.41 billion).
Wong separately announced that there would be a 50% personal income tax rebate for 2024, costing the government an additional SG$350 million ($260 million).
"Let me assure everyone, we will always have your backs," he assured the public in the televised speech.
Singapore-based companies would also get a 50% corporate income tax rebate capped at SG$40,000 ($29,720) to alleviate increasing business costs through the Enterprise Support Package worth SG$1.3 billion ($97 million). Cash payouts of at least SG$2,000 ($1,490) would also be given to companies who hired at least one local employee in 2023, but Wong did not specify if it was separate or included in the corporate rebate.
"The enhanced Assurance Package and the Enterprise Support Package will provide some near-term relief to Singaporean households and firms," Wong added. "These are needed during this period when inflation, while moderating, remains on the high side."
The designated successor to Lee further reported that Singapore's headline inflation in December stood at 3.7%, a steady fall since its peak of 7.5% recorded in September 2022.
Core inflation - which strips out prices of accommodation and private transport - is expected to slow to an average of 2.5% to 3.5% in 2024, the Monetary Authority of Singapore projected.
To tackle Singapore's financial woes, Wong said the country still needed to attract investments, announcing the Refundable Investment Credit scheme for companies that make sizable investments in the country in key areas that would benefit the whole island.
Other measures to boost the Singaporean economy include lowering the age of providing a support boost for citizens to around the 50s, investments in AI, sustainable energy, affordable housing, and skill development.
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