Budget 2025: A strategic blueprint for a new era

By Lee Sze Yeng, Managing Partner, KPMG in Singapore and Ajay Kumar Sanganeria, Partner, Head of Tax, KPMG in Singapore

Singapore’s ability to thrive lies in its deliberate anticipation of global shifts and decisive action. Prime Minister and Minister for Finance Lawrence Wong’s Budget 2025 sets forth a compelling vision for Singapore’s next chapter—one anchored in creating value, nurturing leadership and positioning the country as a gold standard in global innovation, sustainability and enterprise excellence.

With intensifying global competition for talent, advancements in technology and the complexities of addressing climate challenges, Singapore must differentiate itself by producing high-value solutions that command attention on the world stage. Budget 2025 provides the blueprint to achieve this vision, focusing on technology and innovation, enterprise ecosystem development, infrastructure resilience and sustainability.

Singapore’s future competitiveness depends on its ability to innovate and adapt, making technology a focal point of Budget 2025. The allocation of S$150 million to the Enterprise Compute Initiative aims to help businesses integrate artificial intelligence (AI) into their operations at scale, while S$1 billion for new research and development facilities for bio-medical and  semiconductor sectors underscore the government’s commitment to creating an environment of continuous innovation.

Further enhancing Singapore’s status as a premier financial and innovation hub, the S$1 billion Private Credit Growth Fund and new tax incentives for revitalising capital markets aim to address long-standing challenges regarding the appeal of the Singapore Exchange (SGX) as a listing platform. These incentives explicitly target Singapore-based companies choosing to list on the SGX, as well as fund managers that launch and manage funds that invest significantly in SGX-listed equities. By creating pathways for local high-potential companies to thrive, Singapore hopes to inject more liquidity into its equities market and address feedback that the SGX lacks competitiveness for listings, even among Southeast Asia-focused firms. While more details are pending, this initiative signals a bold step to solidify Singapore’s position as a financial gateway for regional and global enterprises.

At the same time, initiatives such as top-ups to the National Productivity Fund and the launch of the Global Founder Programme aim to attract entrepreneurial talent to establish and grow ventures in Singapore, ensuring continued relevance in the post-BEPS era, while the 50 percent corporate income tax rebate and a variety of cash grants will offer short-term relief from rising costs.

Singapore’s unique reputation as a “testbed for innovation” gives it a distinct edge, but sustaining and extending this advantage requires businesses to harness opportunities on offer. The government’s investments are a critical launchpad; however, it is up to enterprises—large and small—to drive transformation and create measurable value. 

Innovation is only as successful as the people driving it. To ensure Singapore remains resilient and competitive, Budget 2025 prioritises workforce development and leadership capacity-building. The new SkillsFuture Workforce Development Grant and redesigned SkillsFuture Enterprise Credit are structured to support employers in upskilling their workers, particularly critical as industries face accelerating technological change.

The emphasis on equipping employees with advanced technical skills demonstrates foresight, but Budget 2025 goes further by focusing on leadership. Enhanced schemes for promising Singaporean leaders include opportunities to learn from global best practices and effectively prepare for the challenges of the future.

These measures send a clear signal—Singapore is not just building structures; it is architecting a workforce and leadership pool capable of driving the country’s transformation. However, tracking leadership outcomes and fostering an ecosystem of continuous learning and evaluation will be critical to realising this goal.

As Singapore moves forward, its leaders will play a crucial role in preparing the nation’s workforce to tackle future challenges with agility and creativity. Their influence will also be vital in cultivating a talent pool equipped with the necessary skills and a steadfast commitment to excellence to meet emerging demands effectively.

Sustainability remains another vital lever of competitive advantage. While global progress on climate initiatives has slowed, Singapore is doubling down on its commitment to achieving its decarbonisation targets. A S$5 billion injection into the Future Energy Fund signals the government’s intent to explore advanced solutions like nuclear power, while continuing to lead in green technology and innovation.

Helping businesses balance the energy demands of future technologies while supporting “hard-to-abate” industries like aviation, heavy industry, and maritime transport in their decarbonisation efforts remains a key challenge. As the world faces growing economic fragmentation—where markets and trade relations become more segmented—Singapore has an opportunity to lead by mobilising capital and aligning regional initiatives towards sustainable, net-zero objectives.

Singapore’s long-term prosperity hinges on its ability to not only address emerging challenges but also establish itself as a gold standard for high-value solutions that the world seeks to emulate. Budget 2025 has laid the groundwork for this vision, with robust structures designed to drive advancements in technology, innovation, enterprise development and talent growth. Its success, however, will require collaborative efforts from the government, businesses and individuals to transform these plans into tangible outcomes. The message is clear: while the foundation is set, businesses must lead by upskilling their workforce, driving innovation, and building value-adding partnerships for sustainable growth.