Budget 2024 > Latest > Commentary
Mr Derrick Goh (Nee Soon): Mr Speaker, Sir, Budget 2024 is significant. It is the first Budget dedicated towards the goals of ForwardSG, where Singaporeans collectively shape the next chapters on the way forward for our country. Although the world we live in is more complex and uncertain, I am confident that we can forge ahead with resilience and optimism. To this end, there are four key themes on this year’s Budget and plans that I wish to highlight. One, sustaining fiscal and economic strength amid challenges and improving three key trends relating to (a) accelerating local businesses’ growth in the new economy; (b) thriving in a digital age; and (c) enhancing social resilience and empathy.
Singapore entered 2024 into a global landscape that is bleaker and more complex than prior years. Geopolitical tensions also remain heightened. The Russian-Ukraine war persists, along with a new crisis in the Middle East. China’s economy remains soft, while Japan and the UK just entered into a technical recession with two quarters of declining growth. While some bright spots include the surprising strength of the US economy, the flipside is that the interest rate decline has not yet happened and is expected to be higher for slightly longer.
Such realities underscore the need for Singapore to remain united, supported by discipline and foresight in our Government’s fiscal policies. I am, therefore, pleased that Budget 2024 is generous and, importantly, holistic. To me, the projected balanced fiscal position signals continued prudence, while providing relief for immediate cost-of-living challenges and supporting longer-term capabilities, such as the upskilling of Singaporeans and business transformation.
Recognising the longer-term need to fund our future, I supported the GST increase in prior debates but requested more help for residents to cushion against higher inflation. Hence, I am heartened that our Government has continued to follow through on its commitment to support our people with the further enhancement of the Assurance Package. Many residents I engaged over the Lunar New Year celebrations, including those at private condominiums, have expressed appreciation for the support.
Sir, we must not take for granted our fiscal and economic strength, which has allowed us the capacity to navigate uncertainties better than other countries. Budget 2024 plans for a long-run GDP target growth of 2% to 3%, given Singapore’s mature economy. As last year’s growth was low at 1.1%, along with an outlook that remains challenging, can the Deputy Prime Minister share his thoughts on the sources and drivers of the factors supporting this more optimistic long-term growth forecast and how we can better achieve this target?
To sustain economic strength, our businesses must be able to seize opportunities as they come. Yet, they repeatedly highlight labour and talent shortages, and this is also echoed by the Singapore Business Federation (SBF), that contrasts against the reality of continued low birth rates that are below replacement levels and jobs that are unattractive to our citizens. How may Forward SG ethos apply so that the pursuit of economic growth, which may require more talents and foreign labour, that is not at all costs?
While Government revenue in FY2023 was overall better than expected, I note that GST collections were $1 billion lower than estimated due to weaker imports. Should this continue, can the Deputy Prime Minister assure Singaporeans that other sources of revenue remain robust to support future expenditures and that there will be no further GST hikes in the foreseeable future?
The expected top-up of funds is $20.4 billion in FY2024. This follows from $24.3 billion in FY2023. The Deputy Prime Minister had explained last year that a considerable number of these funds were drawdown funds, where spending is certain to fulfil commitments today and on an ongoing basis. Can the Deputy Prime Minister clarify the time horizons for the utilisation of these funds to benefit Singaporeans? As the FY2022 figure was much lower at $6.3 billion, can the Deputy Prime Minister also share if he expects such higher levels of funding and if the run-rate going forward will be at these higher levels?
I now turn to focus on accelerating the growth of our local businesses and SMEs, as they are the backbone of Singapore’s economy. Some business owners say that they face “cost of survival” pressures, in tandem with the high cost-of-living pressures faced by individuals. I, therefore, welcome the Budget’s support measures that bolster near-term resilience, such as the 50% corporate income tax rebate, as well as the newly introduced and generous $2,000 cash payout for non-profitable firms with at least one employee under the Enterprise Support Package. Enhancements to the Enterprise Financing Scheme are also noteworthy.
Notably, the Budget has avoided more populist moves by going beyond handouts to encourage SMEs to transform for the longer term. Businesses are, by nature, economic entities which transform the use of limited resource to produce goods and services that the market demands. Those who can do so are better off and thrive in this new digital and green economy. As such, I am glad to learn of the enhanced initiatives, such as allowing SMEs from more sectors to benefit from green loans and the Energy Efficiency Grant. This is consistent with my suggestion at last year’s COS debate for Government support to be more inclusive on transformational initiatives.
Another key thrust of Budget 2024 is the SkillsFuture Level-Up Programme. This is a decisive push for mid-career workers to upskill and reskill, so that they can contribute in higher-value jobs and more exciting roles, in line with the broader transformational agenda.
Crucially, for SkillsFuture to be attractive, a mindset shift is also required by SMEs to see beyond the potential short-term constraints like time-off given for staff development; and, more importantly, to complement the programme by investing in training and job redesign for the longer term. This will be a win-win situation for SMEs and their employees.
Yet, while much is touted for SMEs to venture beyond their comfort zones, the fact is that transformation is challenging, especially in a high-cost environment, because the payback is uncertain and, often, not immediate. As such, more funding from the Budget, by itself, is insufficient. As most SMEs lack a dedicated strategy or training department, targeted facilitation is needed to guide them on how to effectively leverage Government support for meaningful transformation, so that they can learn by doing to build up expertise over time.
As the key nexus between the Government and SMEs in driving engagement and advisory, there is scope to improve the execution and effectiveness of SME centres and even trade associations and chambers (TACs) to support this agenda. I will elaborate on this at the Ministry of Trade and Industry’s COS debate.
Sir, I will now turn to thriving in a digital age. Singapore has made significant strides in our progress towards becoming a Smart Nation. But as the technology space is ever-evolving rapidly, so must our efforts.
So, I am heartened that Budget 2024 supports our National AI Strategy 2.0, in advocating for Singaporeans to see AI as a friend to increase productivity and enrich lives, instead of a foe that threatens livelihoods. As is always said, AI will not replace humans, but the person using AI will.
On the international stage, we are well-positioned to have an outsized influence on the responsible development of AI, amidst bigger global powers competing for AI leadership. These are opportunities that Singapore must capture to stay relevant. Yet, while we pursue opportunities in AI and other frontier technologies on one end, we must have the right foundations in place, manage risks well and leave no one behind on the other.
As it is said, the art of progress is to preserve order amid changes and to preserve change amid order. While a myriad of services, such as healthcare, postal and transportation, continue to be refreshed by new technologies, with a “digital-first, but not digital-only approach”, it is crucial for the pace of change to be well-ordered, thoughtful and empathetic, especially for our senior residents and vulnerable communities.
A digital society must also be reliable and secure for our residents and businesses to truly thrive within. As we mature as a digitalised nation, organisations must step up their service resiliency and recoverability, with more robust contingency and crisis management plans. As more systems become interconnected and interdependent, especially those in Government agencies that we rely on daily, greater IT-related and cybersecurity risks could have systemic impacts across our society and economy.
We will need to continue doubling down on multi-stakeholder efforts to bridge the digital divide, as well as to manage the risks in this journey. The Public Accounts Committee, which I am a member of, has also highlighted these key points in its recent report. I hope more will be done in this area to frame future actions and public expectations.
With digitalisation, scams have increased and surged. From the Anti-Scam Command to the ScamShield app and the Online Criminal Harms Act, the Ministry of Home Affairs (MHA) has been relentless in its fight against the scourge of scams. This has helped to keep losses flat at $650 million last year. Nonetheless, the amount is still significant and cases have soared by 46% to an unprecedented 46,000 cases!
I had previously emphasised the importance of an “all-hands-on-deck” approach by stakeholders in the ecosystem and would like to recognise the combined efforts of MHA, the Monetary Authority of Singapore (MAS), banks and telcos, in reducing phishing scams and swiftly introducing measures to counter malware scams.
But that said, scams are most prevalent and increasing in areas, such as jobs, e-commerce and fake friend scams, where they exploit victims’ emotions and psychology, for them to willingly part with their money. Our agencies must be even more agile and responsive to combat scams with private sector and international partners. As this has been a key issue impacting public safety and trust and which my residents are concerned about, I hope to hear more targeted measures in this area.
Sir, lastly, I will touch on enhancing our social resilience and empathy.
Youths form a crucial part of our society and are the Singapore’s future. The trend of drug abuse by youths is therefore worrying, as the Central Narcotics Bureau (CNB) reported more than half of new abusers arrested last year were below the age of 30. More concerning is that this trend extends from previous years, amid a backdrop of more permissive attitudes towards cannabis globally, as well as the continued emergence of new psychoactive substances and increasingly rampant use of vaporisers.
The formation of an Inter-Ministry Committee on Drug Prevention for Youths in 2023 was a good move. I look forward to its plans to curb this alarming trend.
Key to our social fabric too, is community cohesion. Regrettably, the issue of noise has continued to cause friction in our neighbourhoods, with monthly complaints in last year averaging over 2,000 cases, more than five times higher than pre-pandemic levels.
I spoke on this issue at prior debates and understand work is still ongoing to establish a new unit dedicated to tackle protracted noise disputes and to enhance the current regime where mediation is voluntary. While I look forward to an update on its progress and measures, I urge for all Singaporeans, aided by our agencies, to exercise restraint and empathy, so that we can continue building cohesive and resilient communities.
Sir, I will now conclude. Singapore, like other countries, faces similar pressures like cost of living, on top of more unique challenges as a small island-state dependent on an open economy, amid a trying global environment.
Yet, we have always been able to navigate obstacles better than others to emerge stronger. Thanks to good governance and financial strength accumulated from our reserves and its prudent use along with the diligence of those who came before us. I am glad that Budget 2024 did not succumb to populist and unsustainable initiatives. Budget 2024 is underpinned by fundamentals that is principled, disciplined and pragmatic.
While there are challenges ahead, I have no doubt we can surmount them in the uniquely Singapore way, as one united people. Budget 2024 has been a fitting first instalment to realise the Forward SG goals. I support the Budget and I am confident it will enable Singapore and Singaporeans to forge ahead with resilience and optimism, towards a shared future together.
Watch the speech here.