Lawrence Wong used his first major policy speech since becoming Singapore’s prime minister to dish out new social benefits for citizens, while pledging to simplify compliance and regulatory processes to trim business costs.
The new measures include added paternity benefits and a new training allowance of up to $3,000 per month if Singaporeans take time off from work to study full-time, he said in a National Day Rally address on Sunday, They also include temporary unemployment support of up to $6,000 over a period of up to six months.
“We’ve seen what happens in other countries when the broad middle falls behind,” Wong said. “The center does not hold. Societies begin to fracture and collapse.”
The address is Wong’s first since taking over the top job from Lee Hsien Loong in May, and comes ahead of a general election that must be held by November 2025. The ruling People’s Action Party had previously resolved to allow the 51-year-old Wong to lead the charge at the next polls as it seeks a mandate that would extend an uninterrupted run in power since independence in 1965.
Singapore needs a government that is both “prudent and bold,” he said evoking the nation’s first Prime Minister Lee Kuan Yew.
The temporary financial aid for retrenched workers focuses on helping lower- and middle-income workers, Wong said. It comes after the city-state had long resisted the idea of unemployment benefits, instead focusing on incentives designed to keep Singaporeans in the workforce. The resident unemployment rate was about 2.7% in the second quarter.
“Some countries have unemployment insurance, but the experience has not always been positive because after getting a generous benefit the person may find it more attractive to stay unemployed than to go back to work,” Wong said. “But we also know that losing a job is a major setback, which can seriously destabilize workers and their families, and we have to do something to lessen the strain on those who are affected.”
The economy is forecast to expand between 2% and 3% this year owing to resilient external demand. Second-quarter growth was driven by the finance and insurance, and information and communications sectors. The prime minister pledged this month to “redouble efforts” to strengthen social safety nets for the most vulnerable citizens.
That was followed with an announcement that more than 2.4 million Singaporeans would receive a cash payment of $200 to $400 in September as part of the budget passed earlier this year.
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Wong, who has also served as finance minister since 2021, views addressing persistently high living costs faced by Singaporeans as a top priority and pledged to cushion the impact of inflation. One major source of anxiety is housing after the pandemic grounded construction to a halt, leading to a shortage of new units.
On Sunday, Wong announced the government would increase a grant designed to help lower-income couples get their first homes and would expand housing options for seniors. A backlog in public housing will be cleared by early next year, he said.
The government will also make paternity leave mandatory from April next year and provide parents with additional shared leave so they can have more time with their babies in the early months.
“With general elections due to take place no later than November next year, it was important for Wong to make sure that people felt like their concerns are being addressed and that they could trust him and his team to do what is best for the country in these trying times,” said Nydia Ngiow, managing director at strategic business consultancy BowerGroupAsia.
