Budget 2024: enterprise related highlights (part 2)

Photo by Mikhail Nilov

In Budget 2024, which comes after a difficult year and anticipates the challenging global situation ahead, the government continues its efforts to develop local enterprises, equip workers for life, and also create pathways for equity and mobility.

Developing local enterprises

Minister Wong reaffirmed the commitment to continue investing and strengthening local enterprise, including helping smaller firms harness technology through pre-approved solutions, many tailored to the needs of specific industries. This enables the SMEs to “plug and play” and quickly achieve greater efficiencies and productivity gains.

More customised support is also being provided to help these companies scale up internationally, as well as make local SMEs attractive partners for MNEs based here. To this end, the Partnerships for Capability Transformation (or PACT) scheme which supports collaborations between larger companies and SMEs, in the  areas of supplier development and co-innovation, will be enhanced to support partnerships in more areas including capability training, internationalisation, and  corporate venturing.

There will also be support for SMEs to meet sustainability goals important to MNEs. The enhanced support for green loans under the Enterprise Financing Scheme will be expanded to help more of our SMEs adopt green solutions.

The Energy Efficiency Grant will also be enhanced. Introduced in 2022 for companies in the Food Services, Food Manufacturing, and Retail sectors, it will be extended to include more sectors including Manufacturing, Construction, Maritime, and Data Centres and their users. Beyond pre-approved energy-efficient solutions supported under the Grant, there will be additional support for companies with more ambitious plans to reduce their emissions.

Equipping workers for life

Minister Wong reiterated the need to invest even more in our human capital, help workers refresh and update their skills, and learn how to harness new technologies more effectively. To this end, a new SkillsFuture Level-Up programme will be introduced to support mid-career workers.

All Singaporeans aged 40 and above will receive a top-up in SkillsFuture Credit of $4,000 in May 2025. This top up will be more targeted in scope, with its usage confined to selected training programmes with better employability outcomes.

This includes part-time and full-time diploma, post-diploma, undergraduate programmes, as well as courses for the Progressive Wage Model sectors, in order to have participants taking up these programmes to be assured of better employment outcomes after they have completed their training.

There will also be subsidies to all Singaporeans aged 40 and above to pursue another full-time diploma at our Polytechnics, ITE, and Arts Institutions from Academic Year 2025 onwards, and a monthly training allowance to Singaporeans aged 40 and above who enrol in selected full-time courses. This training allowance will be equivalent to 50% of one’s average income over the latest available 12-month period, and will be capped at $3,000 per month. Every individual can receive up to 24 months of such a training allowance throughout their lifetime.

According to Sujith Abraham, Senior Vice President and General Manager, ASEAN for Salesforce, “the extension of SkillsFuture Enterprise Credit and the introduction of the new SkillsFuture Level-Up Programme for mid-career workers will ensure inclusivity and accessibility for the entire workforce.

“Today, our studies show lack of training is preventing 38% of Singapore workers from using gen AI more at work. This skills gap will only grow wider with time, as the profile of jobs will augment as AI becomes more pervasive. These incentives will encourage workers to upskill themselves in areas such as digitisation and AI to help Singapore develop a future ready workforce. Upskilling is a task and responsibility for the entire ecosystem.

Creating more paths towards equality and mobility

Recognising the importance of tackling inequality, the government will continue with its working strategies of Workfare and Progressive Wages.

The Workfare Income Supplement scheme will be enhanced, with the  qualifying income cap raised from $2,500 to $3,000. This ensures that we continue to cover lower- wage workers, even as their wages grow. Workfare payouts will also be raised. Lower-wage senior workers will qualify for a maximum annual payout of $4,900, from $4,200 today.

The Local Qualifying Salary (or the LQS) will also be raised. All  local employees at companies that hire foreign workers must be paid at least the LQS. 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. This increase ensures we keep pace with wage growth.

Support for employers who raise the  wages of their lower-wage workers will be increased. Regarding the Progressive Wage Credit Scheme (or the PWCS), where the Government co-funds the wage increase of lower-wage workers with employers, the co-funding levels for this year will be raised  from a maximum of 30%, to a maximum of 50%.

The PWCS wage ceiling will also be raised from $2,500 to $3,000 in 2025, in tandem with the increase in the qualifying income cap for Workfare. The PWCS Fund will be topped up by $1 billion.

Minister Wong reminded that Singapore will only reap the full benefits if everyone – government, employers, workers, and unions – leans forward to truly deepen a culture of lifelong learning and skills mastery. The support provided will also benefit those in between jobs.