E. Creating More Paths Towards Equality And Mobility
74. In many developed countries, rising inequality and slowing mobility have fractured cohesion, and deeply divided their peoples. These can create similar pressures here.
75. Indeed, we embarked on the Forward Singapore exercise because we do not want to succumb to the kind of harsh inequality we see in so many parts of the world. By creating more paths towards equality and mobility, we also put ourselves in a better position for continued growth – in other words, a strong economy and a strong society reinforce each other.
76. But tackling inequality is often easier said than done. Ideas on how to do so are frequently replete with unintended consequences. Simple handouts and blunt measures do not solve poverty. This is why Singapore has continually paved our own way since the beginning. We carefully study the experiences of others. We take note of where they have succeeded and failed. We introduce significant innovations that work for us, our ethos, our society. This is the Singapore way.
Reducing Wage Gaps
77. Over the last decade, we have made progress in uplifting lower-wage workers, and reducing disparities in wages. Our income inequality, as measured by the Gini coefficient, has declined to its lowest level over two decades.
78. Workfare and Progressive Wages are our key strategies to uplift our lower-wage workers. These strategies are working. I will make several adjustments to ensure they continue to deliver results. (See Annex E-1.)
79.First, I will enhance the Workfare Income Supplement scheme from next year.
a. I will raise the qualifying income cap from $2,500 to $3,000. This ensures that we continue to cover lower-wage workers, even as their wages grow.
b. I will also raise Workfare payouts. Lower-wage senior workers will qualify for a maximum annual payout of $4,900, from $4,200 today.
80.Second, I will raise the Local Qualifying Salary (or the LQS). All local employees at companies that hire foreign workers must be paid at least the LQS.
a.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.
b. This increase ensures we keep pace with wage growth.
81.Third, I will provide more support for employerswho raise the wages oftheir lower-wage workers.
a. In 2022, I introduced the Progressive Wage Credit Scheme (or the PWCS), where the Government co-funds the wage increase of lower-wage workers with employers.
b. I know employers are concerned with rising business costs in today’s economy. And so the Government will do its part to help. I will raise the co-funding levels for this year, from a maximum of 30%, to a maximum of 50%.
c. I will also raise the PWCS wage ceiling from $2,500 to $3,000 in 2025, in tandem with the increase in the qualifying income cap for Workfare.
d. And to provide for these enhancements, I will topup the PWCS Fund by $1 billion.
82. Besides uplifting lower-wage workers, we also want to improve wages across different professions. There will always be differences in wages in any society. But too large a gap creates unhealthy levels of anxiety and stress. Parents and children may get caught up in an education arms race, or may feel pressured to prioritise careers only in a few traditional fields, instead of focusing on their individual strengths and talents.
83. In fact, the vast majority of Singaporeans in the Forward Singapore engagements welcome broader definitions of success. We want more diverse pathways so that every individual can strive to be the best possible version of themselves. This also means we must accord greater value to those who are skilled in technical hands-on abilities, as well as those with the social and empathetic traits to excel in service jobs. In particular, the wages and career prospects of our ITE graduates should not be too far below their Polytechnic- and University-going peers.
84. I recently met some recent ITE graduates. I was inspired by their personal stories, and their enthusiasm to deepen the skills they have acquired at ITE.
85. One of them, Matthew Francis Thanarajoo, graduated from ITE in 2021 with a Higher Nitec in Mechatronics.
a. He is now pursuing a Diploma in Mechatronics at Temasek Polytechnic, and honing his skills in automation and robotics.
b. These experiences have equipped him with confidence to pursue his aspirations in engineering. He will be representing Singapore at the WorldSkills competition later this year in France, and we wish him the very best.
86. We want to encourage and support more young ITE graduates in their upskilling efforts, so they can excel in a profession they have trained in, and get themselves onto a better career and wage trajectory. I will therefore provide more support for ITE graduates aged 30 and below through a new ITE Progression Award.
87. There are two parts to the Award:
a.First, I will provide a $5,000 top-up to the Post-Secondary Education Accounts of ITE graduates when they enrol in a diploma programme. This will help to offset the costs of obtaining a diploma.
b.Second, when these students attain their diplomas, I will provide a further $10,000 top-up to their CPF Ordinary Accounts. This will give them a head-start in purchasing a home or saving for retirement.
c. Sir, this new Award is a significant investment in our ITE graduates. It represents our continuing commitment to uplift them, and to better equip them in their journey of lifelong learning.
Advancing Social Mobility
88. Besides tackling inequality, we must also uphold social mobility. And up to now, Singapore has fared better than other advanced economies. But we must continue to pay special attention to children from less well-off families, to ensure they have access to full and fair opportunities early in life.
89. Many of these families are already taking steps to build better lives for themselves, but they may find it hard to sustain progress. We know that they often face complex challenges, such as marital stress, existing debts, or even motivation or self-confidence issues.
90. Under the enhanced ComLink (or ComLink+), we are providing more customised support for these families. We are getting family coaches and volunteer befrienders to work directly with these families. They will jointly develop action plans to improve their life circumstances, and the coaches will provide additional support to the families, so as to encourage and motivate them towards their goals.
a. The additional support will be rolled out in the form of ComLink+ Progress Packages. And this is yet another major innovation in our social policy landscape. (See Annex E-2.)
b. For example, adults in the family can each receive payouts of up to $600 every quarter, through a combination of cash and CPF, if they secure a job and stay employed.
c. Those who make voluntary contributions to their CPF will receive matching grants from the Government to grow their savings faster. This, combined with existing schemes like the Fresh Start Housing Scheme, will help these families buy their own homes.
d. We will also partner with corporates and community groups to implement the ComLink+ Progress Packages. The donors can provide additional financial support to these families, and contribute in other ways, like befriending and mentoring, to help them get back on their feet again.
91. Sir, in this Budget, we are taking further steps to ensure that all Singaporeans have opportunities to take on work they find meaningful and fulfilling, build on their talents, give their best, and be rewarded fairly for it. This is how we keep the Singapore Dream alive and well for all our people.
92. The Government will do our part. But I want to emphasise that it is not just about the Government doing more. We also need our employers, community groups, as well as families and individuals themselves, to step up. Together, we can and we will build – a fairer, a more equal, and a more inclusive Singapore.