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As Singapore approaches its sixth decade of nationhood, it has achieved much, but faces significant challenges, including geopolitical tensions, technological disruptions, rising inequality and slowing social mobility, rapidly ageing population, and climate change (see Macro Insights Weekly: Singapore at 59). Prime Minister (PM) Lawrence Wong’s inaugural National Day Rally (NDR) speech on August 18 continues the multi-year implementation of the Forward Singapore (Forward SG) roadmap, spearheaded by the 4G leadership, to refresh Singapore’s social compact and chart its next chapter (see Forward Singapore: A roadmap towards resilience). The NDR focussed on four key areas: the economy and jobs, families, housing, and education, which will position Singapore for inclusive economic growth. Various policy initiatives have been outlined, and we expect further details to be released over the coming months, including during next year’s Budget 2025. The speech also mentioned prudence, suggesting that long-held fundamentals like fiscal responsibility will be upheld as initiatives are rolled out.

Economy and jobs: Maintaining competitiveness

PM Wong placed the economy and jobs at the forefront of his NDR English speech. In our view, his commitment that the government will simplify and ease business regulations is likely to bolster Singapore’s already strong economic competitiveness. While details will emerge following a government review, this signals a proactive approach to navigating the increasingly uncertain and challenging global economic landscape. The government aims to solidify Singapore’s position as a trusted and vibrant global business hub by ensuring a business-friendly environment. Having reclaimed the top spot in IMD World Competitiveness Ranking in 2024 from 4^th place last year, these efforts will continue to attract foreign investments and reduce the regulatory burden on small and medium enterprises.

Ensuring the competitiveness of Singaporean workers and their ability to rebound from unemployment setback was also a key priority in the NDR speech. The SkillsFuture Jobseeker Support Scheme, a long-awaited announcement, is a bold and carefully designed social safety net for involuntarily unemployed lower- and middle-income Singaporean workers. Lower- and middle-income mature workers, who face lower re-entry rates to the workforce six months post-retrenchment and who are part of the sandwiched generation, should also be a key beneficiary, in our view. By including the criteria for involuntarily unemployed workers to go for training, career coaching, and job matching services, these put the responsibility on workers to retrain and reskill to return to the workforce in order to obtain the temporary financial support of SGD6,000 over a period of up to six months.

Families: Boosting birth rate

PM Wong also emphasised family support in his NDR speech by enhancing mandatory government-paid parental leave, which also aims to recalibrate parenting duties and attitudes. While the extension of mandatory paternity leave to four weeks was not surprising, the 10 more weeks of leave for new parents mark a strong push to reverse Singapore’s falling and low fertility rate. This will grant parents 50% more leaves than they now have.

With Singapore’s labour market tight but easing, the two-phase implementation of the extra 10 weeks of parental leave (six weeks from April 2025 and 10 weeks from April 2026), and the minimum notice period of four weeks before the leave consumption will provide businesses with some room to adjust and adapt to manpower requirements in 2025, before the full impact is being felt from 2026. However, this could still add to businesses’ operational challenges.

Housing: Ensuring affordability and accessibility

Housing affordability and accessibility was also a key theme in PM Wong’s NDR speech. He reaffirmed the Ministry of National Development (MND)’s commitment to launching 100,000 new Housing and Development (HDB) flats from 2021 to 2025. This initiative will likely exceed 80,000 units by December, with all 100,000 new units delivered by next year. We expect this ongoing supply pipeline to sustain domestic construction output growth momentum, particularly in the public sector segment, in the coming quarters.

Furthermore, the government intends to enhance housing accessibility through two measures. First, it will extend priority access to Build-to-Order flats to singles and their parents living together or nearby from mid-2025. Second, it will raise the Enhanced CPF Housing Grant for the lower-income.

Education: Increasing learning opportunities

Education has been a cornerstone of Singapore’s remarkable transformation, as highlighted in the Forward SG report, and the NDR’s announcements aim to expand learning opportunities to maximise students’ potential. Policies include updating the Gifted Education Programme (GEP) so that each primary school will offer its own programmes to stretch students in their areas of strength and interest, while allowing them to remain in their schools. Also, more students who excel in their mother tongue will be eligible to study higher mother tongue in secondary schools, in a push to nurture proficiency in bilingualism.


To read the full report, click here to Download the PDF. 

Chua Han Teng, CFA

Economist - Asean

[email protected]

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