Budget Measures Align with Industry Needs, Driving Sustainability, Innovation, and Workforce Development
Singapore, 19 February 2025 – IN Diplomacy Editor-in-Chief, Ms. Nomita Dhar, met with Mr. Lennon Tan, President of the Singapore Manufacturing Federation (SMF), to discuss potential collaborations and the federation’s initiatives.
The Singapore Manufacturing Federation (SMF) has welcomed Budget 2025 as a well-balanced and forward-thinking blueprint that not only addresses the immediate challenges facing the manufacturing sector but also charts a clear path for sustainable long-term growth and global competitiveness. Mr. Lennon Tan, SMF President, said “Budget 2025 is a well-balanced and generous budget that addresses both immediate economic challenges and long-term industry growth. The Singapore Manufacturing Federation (SMF) welcomes the government’s continued commitment to fostering innovation, sustainability, and workforce transformation—key pillars that will drive our sector forward. The measures announced provide much-needed cost relief while equipping businesses with the tools to scale, compete globally, and transition towards Industry 5.0. This budget is a strategic step towards ensuring that Singapore remains a global manufacturing hub.”
Short-Term Impact – Stabilising Operations Amid Economic Volatility Budget 2025 delivers targeted measures to alleviate near-term financial strain on manufacturers. The introduction of a 50% Corporate Income Tax Rebate, capped at $40,000, provides immediate liquidity relief for businesses contending with elevated energy costs and supply chain disruptions. Complementing this, enhanced co-funding under the Progressive Wage Credit Scheme in 2025 and 2026 mitigates wage inflation pressures, enabling firms to retain skilled workers while managing operational expenses.
Workforce readiness is prioritised through the SkillsFuture Workforce Development Grant, which offers up to 70% funding for job redesign initiatives in automation, robotics, and digitalisation. This initiative empowers manufacturers to reskill employees efficiently, aligning workforce capabilities with Industry 4.0 demands. Concurrently, the CPF Transition Offset alleviates manpower cost transitions by covering half the increase in employer CPF contributions for senior workers aged 55 to 65, fostering intergenerational workforce continuity.
SMF also welcomes the redesigned SkillsFuture Enterprise Credit, which significantly streamlines the reimbursement process by reducing administrative burdens.
“This budget emphasizes Singapore’s commitment to future-proofing our workforce,” said CEO Dennis Mark. “By investing in advanced skills and simplifying the training credit system, the government is making it easier for enterprises to adapt to new technologies and enhance productivity.”
Medium-Term Impact – Driving Innovation, Sustainability, and Digital Transformation Looking ahead to the medium term, the budget places a strong emphasis on fostering innovation and sustainability, which are vital for transitioning to Industry 5.0.
The $3 billion top-up to the National Productivity Fund, along with the launch of a national semiconductor R&D facility, underscores the government’s commitment to building a robust innovation ecosystem. These investments are expected to drive technological breakthroughs and support manufacturers in developing cutting-edge products and processes, thereby securing Singapore’s position in high-value markets.
The newly launched Enterprise Compute Initiative, backed by $150 million, supports small and medium enterprises (SMEs) in adopting AI solutions that could assist in predictive maintenance, quality control, and supply chain optimisation. This initiative aligns with the Global Founder Programme, designed to nurture entrepreneurial ventures in advanced manufacturing technologies, fostering a pipeline of homegrown innovators.
Complementing these innovation measures is the $5 billion Future Energy Fund and a suite of clean energy incentives designed to accelerate the adoption of renewable energy and sustainable practices. This not only helps manufacturers reduce their carbon footprint but also aligns with SMF’s longstanding green transition wishlist, ensuring that our manufacturing sector is both environmentally responsible and economically competitive.
Long-Term Impact – Anchoring Global Leadership and Workforce Agility
Budget 2025 lays a strong foundation for Singapore’s long-term competitiveness by anchoring high-value investments in key sectors such as semiconductors, biopharmaceuticals, and advanced materials. These investments position Singapore as a global leader in innovation-driven manufacturing while creating new opportunities for manufacturers to expand their capabilities and tap into international markets.
Workforce resilience remains central to manufacturing transformation efforts under Budget 2025. Lifelong employability initiatives under SkillsFuture, combined with leadership development programmes, will ensure that our workforce remains agile and future-ready, able to meet the demands of an ever-evolving technological landscape.
Additionally, enterprise growth is supported through the newly introduced $1 billion Private Credit Growth Fund, which provides patient capital for high-growth local enterprises with longer investment horizons. This fund ensures that promising manufacturers have access to resources needed to scale sustainably while competing on an international stage.
In conclusion, Budget 2025 demonstrates a comprehensive commitment to bolstering Singapore’s manufacturing sector by addressing immediate cost pressures while also investing in the long-term capabilities of the industry. By balancing short-term relief with strategic medium- and long-term investments in innovation, sustainability, digital transformation, and workforce development, this budget equips manufacturers with the tools needed to thrive in an increasingly competitive global market. Mr. Christanto Suryadarma, Chairman of SMF’s Electrical, Electronics & Allied Industries Industry Group, said “We welcome and support the government’s proactive measures outlined in Budget 2025 to strengthen the enterprise ecosystem.” As Singapore commemorates its 60th year of independence, the manufacturing sector stands poised to drive the next phase of economic growth. SMF pledges to work closely with stakeholders to translate Budget measures into actionable outcomes, ensuring Singapore remains a beacon of advanced manufacturing excellence in an era of geopolitical and climatic uncertainty.
Source: SMF
