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Highlights from Singapore's 2024 Budget Statement impacting employers and HR leaders

Highlights from Singapore's 2024 Budget Statement impacting employers and HR leaders

All Singaporeans aged 40 and above will get a top-up in SkillsFuture Credit of $4,000, while those impacted by layoffs can look towards a temporary financial support scheme. Report by Arina Sofiah and Aditi Sharma Kalra.  

Singapore’s Deputy Prime Minister and Minister for Finance, Lawrence Wong has delivered the Budget 2024 statement in Parliament earlier today, 16 February 2024.  

Noting that “for 2024, the outlook is mixed”, he stated the growth in the major economies is still expected to remain resilient, and that global inflationary pressures are expected to recede further. However, existing geopolitical conflicts may lead to disruptions in global energy markets and supply chains. 

In Singapore specifically, while inflation started to moderate in 2023, economic growth also slowed. As a result, real incomes declined. 

While the situation is expected to improve this year ahead, DPM acknowledges that there are uncertainties. 

“Budget 2024 is therefore about taking concrete steps to build our shared future together,” DPM Wong stated. This includes measures to tackle immediate challenges for households and business; pursuing better jobs and better growth; equipping workers for life; creating more paths for equality and mobility; and providing more assurance for families and seniors. 

For employers and HR leaders, HRO has compiled the below guide on the major announcements that are expected to impact manpower planning. Some of the several support measures include: 

  • All Singaporeans aged 40 and above will get a top-up in SkillsFuture Credit of $4,000.
  • Co-funding support for employers who raise the wages of lower-wage workers will increase to a maximum of 50%.
  • A temporary financial support scheme will be introduced for Singaporeans impacted by layoffs.
  • An additional $600 in CDC Vouchers will be handed out for all Singaporean households.
  • More efforts will be made to work with leading companies to set up their AI Centres of Excellence locally.

Scroll below for details on each of the above initiatives, and more highlights from Singapore’s 2024 Budget statement.  

Note: All currencies in this report refer to Singapore dollars (SGD). 

Enhanced support for continuous skills upgrading 

Acknowledging the importance of continuous skills upgrading throughout life, DPM Wong recognised there is more to be done in this area. Particularly, a challenge remains when it comes to workers taking time off from work to attend training courses over an extended period.  

To this end, DPM Wong has announced the launch of the new SkillsFuture Level-Up Programme to better support mid-career workers. 

#1 SkillsFuture Credit top-up 

As part of the new programme, all Singaporeans aged 40 and above will get a top-up of S$4,000 in their SkillsFuture Credit from May 2024. 

While the existing basic tier of $500 in SkillsFuture Credit can used for a wide range of courses, the top-up credit will be more targeted in scope. This enhancement is to be used for selected training programmes with better employability outcomes. This includes: 

  • part-time and full-time diploma programmes,  
  • post-diploma programmes,  
  • undergraduate programmes,  
  • courses for the Progressive Wage Model sectors.  

#2 Additional subsidies for full-time diplomas 

All Singaporeans aged 40 and above will be provided with subsidies to pursue another full-time diploma at polytechnics, ITE, and Arts Institutions from Academic Year 2025 onwards.   

Further elaborating on the subsidy, DPM Wong has clarified that even individuals who have graduated from an Institution of Higher Learning as a young person may come back again after turning 40 to do a full-time diploma at subsidised rates.  

#3 Monthly training allowance  

Singaporeans aged 40 and above who enrol in selected full-time courses will be provided with a monthly training allowance equivalent to 50% of their average income over the latest available 12-month period (capped at $3,000 per month). 

To note, individuals can receive up to 24 months of training allowance throughout their lifetime. 

#4 Upskilling efforts for young ITE graduates 

A new ITE Progression Award has been announced to support ITE graduates in their upskilling efforts – not only to excel in a profession they have trained in, but also to get onto a better career and wage trajectory.  

There will be two parts to the Award: 

  • First, a $5,000 top-up to the Post-Secondary Education Accounts of ITE graduates will be made when they enrol in a diploma programme. This will help to offset the costs of obtaining a diploma. 
  • Second, when these students attain their diplomas, a further $10,000 top-up will be made to their CPF Ordinary Accounts. This, DPM Wong said, will give them a head-start in purchasing a home or saving for retirement. 

Measures to reduce wage gaps 

Sharing Singapore’s progress in uplifting lower-wage workers, and reducing disparities in wages, DPM Wong shared that income inequality, as measured by the Gini coefficient, has declined to its lowest level over two decades. He then spoke about making adjustments to Workfare and the Progressive Wage Model to ensure they continue delivering results, i.e. upliftment of lower-wage workers.  

#1 Enhancements to Workfare Income Supplement (WIS) scheme 

The WIS scheme was introduced in 2007 as a permanent feature of Singapore's social security system. To this scheme, DPM Wong announced the following changes from 2025: 

  • Increase in the qualifying income cap from $2,500 to $3,000, with a view to cover lower-wage workers, even as their wages grow. 
  • Raise the amount of Workfare payouts – With this, lower-wage senior workers will qualify for a maximum annual payout of $4,900, up from $4,200 today. 

#2 Reviewing the LQS to keep pace with wage growth 

The Local Qualifying Salary (LQS), which determines the number of local employees who can be used to calculate a firm’s Work Permit and S Pass quota entitlement, will be raised. 

As such, the LQS for full-time workers will be raised from $1,400 to $1,600 from this year. The minimum hourly rate will be increased from $9 to $10.50 per hour. 

What this implies for employers is that, all local employees at companies that hire foreign workers must be paid at least the LQS. 

#3 Support for employers who raise the wages of lower-wage workers 

The Progressive Wage Credit Scheme (or PWCS) was launched in 2022, with the aim for the Government to co-fund employers on their wage increases for lower-wage workers. 

Citing employers’ concerns about rising business costs, DPM Wong announced that the co-funding levels for this year, will be increased from a maximum of 30%, to a maximum of 50%. 

Further, the PWCS wage ceiling will go up in 2025 from $2,500 to $3,000, in tandem with the increase in the qualifying income cap for Workfare. 

These enhancements will entail a top up of the PWCS Fund by $1bn. 

Enhancing support for local businesses

To support local enterprises in their development, Singapore is helping these businesses partner with multinational enterprises (or MNEs) based locally. This, DPM Wong, highlighted is being done in the following ways: 

#1 Helping local firms plug into the global supply chain 

Currently, the Partnerships for Capability Transformation (or PACT) scheme supports collaborations between larger companies and SMEs, in the areas of supplier development and co-innovation.  

Building off this, DPM Wong has announced that Singapore will be enhancing the PACT scheme to support partnerships in more areas – namely capability training, internationalisation, and corporate venturing.  

This enhancement will help firms plug into global supply chains, compete in markets abroad, and grow to become industry leaders. 

#2 Enhancing the Enterprise Financing Scheme 

Recognising that businesses need help to manage rising costs, DPM Wong has introduced an Enterprise Support Package, which will provide $1.3bn in support to companies. Under this initiative, the Enterprise Financing Scheme will be enhanced to help Singapore enterprises with their financing needs.  

The maximum working capital loan quantum will therefore be permanently raised to $500,000. The enhanced maximum trade loan quantum will also be extended to 31 March 2025. 

#3 Becoming sustainability-ready for a competitive edge 

In this day, it is crucial for firms to embrace sustainability to maintain a competitive advantage — many MNEs are looking to reduce their carbon footprint and are expecting suppliers to do the same. 

“In other words, to play in the MNE value chain, our own companies must be ‘sustainability-ready’.” 

To this end, DPM Wong has announced more support for green loans under the enhanced Enterprise Financing Scheme and will be expanding its scope to help more SMEs adopt green solutions.  

In tandem, Singapore will also be extending the Energy Efficiency Grant to more sectors. This was initially introduced in 2022 for companies in the food services, food manufacturing, and retail sectors. Under this enhancement, the grant will be available to more sectors including manufacturing, construction, maritime, and data centres and their users.  

#4 Top-ups for National Productivity Fund 

Beyond anchoring new investments, DPM Wong emphasised the importance of building on the nation’s existing strengths, and upgrading the sectors where Singapore has competitive advantages. 

To support this and other investment promotion efforts, DPM Wong has announced a top-up of $2bn to the National Productivity Fund this year. 

More funds will also be set aside for R&D to push the frontiers of innovation across the entire economy. Initially launched in 2020, the Research, Innovation and Enterprise 2025 (or RIE2025) plan will receive a further $3bn in investments.  

#5 National AI Strategy 2.0 to invest in emerging technology 

To leverage emerging technology, Singapore has set out the National AI Strategy 2.0.  

In support of this strategy and to further catalyse AI activities, DPM Wong has announced that more than $1bn will be invested over the next five years into AI compute, talent, and industry development. 

Part of the investment will be used to ensure that Singapore can secure access to the advanced chips that are crucial to AI development and deployment. More efforts will also be placed into working with leading companies in Singapore and around the world to set up their AI Centres of Excellence locally.  

Temporary support for those impacted by layoffs 

Acknowledging that technological changes bring about churn in the economy, DPM Wong clarified that it is, in fact, not possible to have an economy that is dynamic and growing without failures and losses. “In some sectors, firms will have to let go of people, while in other sectors, new and better jobs will be created,” he noted.  

While this may be the reality, he stated that those impacted by layoffs, i.e. the involuntarily unemployed, often feel the pressure to rush into the first available job they find, even if the new job may not always be a good fit. "But displaced workers may not have the time to train or search for new jobs, especially when they are already straining to make ends meet.” 

With this thought process laid out, DPM Wong has a temporary financial support scheme will be introduced for the involuntarily unemployed, while they undergo training or look for better-fit jobs. 

The design for this scheme, he said, will be done carefully, in terms of the quantum of support and the conditionalities that come with the support. This will be with an aim to avoid the pitfalls other countries have experienced when they introduced unemployment benefits. 

On the timeline for launch, the Finance Minister said the parameters for the scheme are being worked out and more details will be provided later this year. 

Measures to tackle inflation and cost of living increases 

With the objective to combat the surge in prices and cost of living, DPM Wong announced further enhancements to the Assurance Package, after the last enhancement came as recently as September 2023.  

To further support households in Singapore, the following measures will be undertaken: 

  • An additional $600 in CDC Vouchers will be handed out for all Singaporean households. The first $300 will be disbursed in end-June this year, and the remaining $300 will be disbursed in January 2025. 
  • A Cost-of-Living Special Payment of between $200 and $400 in cash will be provided to adult Singaporeans with Assessable Income of up to $100,000, and who do not own more than one property. 
  • Additional one-off U-Save rebates will be given to help HDB households cope with increases in their utility bills. In total, eligible HDB households can expect to receive two-and-a-half times the amount of regular U-Save rebates, or up to $950, in FY2024. This will cover about four months of utility bills for those living in 3- and 4- room flats. 
  • An additional one-off Service and Conservancy Charges (or S&CC) Rebate for HDB flats will be made. Together with the regular S&CC rebates, eligible HDB households will receive up to four months of such rebates in FY2024. 

Altogether, the additional support under the Assurance Package will cost $1.9bn.  

In addition to the Assurance Package, the GST Voucher Fund will be topped up by $6bn, with a view to defray GST expenses for lower- and middle-income households through the GST Voucher scheme. 

Lead image / Ministry of Communications and Information Youtube

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