43. Sir, this Budget is about building our capabilities and seizing new opportunities in a new era of global development.
44. The geopolitical context has shifted significantly. Great power contestation has intensified, most notably between the US and China. And this has profound implications for the world.
45. For the last three decades since the end of the Cold War, the world has benefited from global economic integration. Countries everywhere embraced openness in global commerce. Multinational
Enterprises, or MNEs, developed their supply chains based on the most cost-efficient configurations around the world.
a. But now, businesses are re-organising themselves to account for once-unimaginable tail risks, including geopolitical risks.
b. More and more MNEs are looking to re-shore, on-shore, or near-shore – that is, relocating factories and offices to places where they are less likely to get caught up in geo-strategic
crossfires.
46. Governments in the developed world are also embracing more muscular industrial policies. Despite their macro-economic policies being generally accommodative over the past decade, growth
in many of these advanced economies has been sluggish. Incomes of middle-earners have stagnated and unemployment rates are high. They are therefore looking for ways to rebuild their manufacturing capabilities and create
jobs for their people.
47. The US in particular is determined to establish a clear technological lead over China, especially in critical industries like semi-conductors and green energy. It has banned the flow of
high-end chips and chipmaking to China, and is engaging its allies around the world to do the same. China in turn is investing in its own “little giants” to achieve technological self-reliance. We are seeing
a huge contest for leadership in key technologies, which is likely to escalate with time.
48. All this is setting off a dangerous dynamic towards greater economic nationalism and protectionism around the world.
a. Governments are stumping out more aggressive support, in the form of tax breaks and subsidies, to anchor “strategic” industries.
b. The major powers increasingly view economic matters through the lens of national security. Sanctions, investment prohibitions, and export controls are just some of the tools that
they are using to safeguard national security.
49. In short, we must expect to see greater contestation and fragmentation in the global economy. Countries are thinking less about mutual benefit and interdependence, and more about national
gain and security. An era of zero-sum thinking has begun. It will be a world that is less hospitable to small economies like Singapore, which have long thrived on an open, rules-based multilateral system.
50. We therefore cannot assume that we can continue to be successful by doing the same things as we have in the past. We will need to adjust to this new era, reposition our economy, and refresh
our social compact for the future.
51. This is not the first time that we have had to adapt to changes in the world. And it will certainly not be the last.
a. We have done it many times before, through many crises.
b. And each time, we emerged with a stronger economy and a more united people.
c. And I am confident we will do it again.
52. The key to our success is the trust we have in one another, and our solidarity and unity as a nation. This year marks the 100th anniversary of the birth of Mr Lee Kuan Yew.
I remember reading what he had said in 1967, soon after the turbulent period of Singapore’s independence. He said, and I quote: “There is tranquillity, poise and confidence in Singapore. And it is a confidence born out of the knowledge that there are very few problems which we cannot overcome… [for] our people’s natural industry and talent will continue to blossom and flourish and generate prosperity for all.”
53. Indeed, there are very few problems we cannot overcome when we apply ourselves as one people. It is up to us to overcome the problems we face, to improve on what we have today, and to
build the Singapore we want for tomorrow. This is why I am glad that many Singaporeans have stepped forward to join us in the Forward Singapore exercise, sharing with us their aspirations and concerns, and joining hands
and hearts to create our new social compact together.
54. Our engagements so far have affirmed the shared purpose and values that underpin our social compact. We aspire to be a fairer and more inclusive society, and a kinder and more gracious
Singapore – one where we value one another for who we are, share the responsibility of supporting each other, and uphold our sense of identity in a harmonious, multi-racial, and multi-religious nation.
55. To achieve these shared aspirations, the Government is pursuing new strategies in a few key areas:
a. How we can continue to uplift the wages of those at the lower end of the income distribution, and sustain real income growth for workers in the broad middle.
b. How we can support workers, especially those who are displaced, with a better system of reskilling and upskilling, so that they can be re-trained and placed into new jobs, and bounce
back from setbacks in life.
c. How we can give everyone opportunities throughout their lives to uplift themselves, so that the circumstances of birth will not determine how far they go, and we can keep social
mobility alive and well in Singapore.
d. And how we can better look after our growing number of seniors – not just their medical and retirement needs, but also their care and living arrangements, so that they can
age in place with grace, dignity, and security.
56. These are important but complex issues which require further exploration. We aim to complete the Forward Singapore exercise in the second half of this year. It is not just a matter of
having the Government do more to provide greater assurance and support. We will make changes and intervene boldly where there is a need to do so. But government actions must reinforce the values of personal effort,
responsibility for the family, and mutual support in the community. These are values that keep our society strong and enable our people to stand with pride and contribute to society. At the same time, we must ensure
that any additional spending can be funded and sustained well into the future, so that we do what is right not just for today, but also for future generations.
57. That said, there are several pressing issues that have emerged in our conversations, which we will address in this Budget. We know that long wait times for new flats and rising resale
home prices are key concerns for many young Singaporeans. We had a long discussion and debate on this in Parliament. We also want to help parents better balance their work and family commitments, and look after their
children. So, we will move sooner on specific measures to support young married couples, and create a more conducive environment for families.
58. The Budget this year is therefore part of a broader exercise to chart our new way forward together, and it is centred on three key thrusts to secure our future in a new era.
a. We will grow our economy, equip our workers, and provide a fuller range of opportunities for everyone to advance in life.
b. We will strengthen our social compact and provide better support for families, seniors, and vulnerable groups.
c. And we will build up our collective resilience so that we are able to bounce back strengthened from external shocks and setbacks.