DPM Heng Swee Keat at the Debate on the Budget Statement in Parliament (Feb 2025)

Mr Speaker sir, I rise in support of the Budget. 

Budget 2025 is a Budget for all Singaporeans. It provides immediate support for families and businesses amidst cost pressures, while advancing our growth frontier for the future.  

This focus on tackling immediate challenges while positioning Singapore for the long-term has been a focus of this Government and has served Singapore well.

Welcoming SG60 from a position of strength

This year, we celebrate SG60. We have much to celebrate. 

From a fledging nation with limited resources, we have built a thriving economy, a cohesive society, and a liveable city for our people.

Our people are living longer and healthier lives, in affordable and vibrant estates. 

Our workers enjoy good jobs and rising wages in a modern economy. 

Our students learn and excel, and adults continue learning all their life.

As we enjoy the SG60 package in this Budget, let us express our gratitude for the hard work and sacrifices of earlier generations of Singaporeans, and for their support for political leaders to forge a path forward, to uplift all.

Responding to a rapidly changing global landscape

While we have done well over the last 60 years, changes will accelerate in the years ahead. 

PM delivered the Budget Statement in a world that is moving towards a multipolar economic order.

Domestic politics in many countries are more polarised and fragmented, making rational policy making harder. 

Global political and security dynamics, and trade and investment flows, are shifting rapidly. 

Climate and demographic change are the warp and weft weaving inexorable impact on the future of humankind. 

Advances in science and technology are transforming our economies. Imagine, the smart phones in our pockets today have more compute power than the Apollo 11 module that took the first man to the moon! 

Game-changing technologies like artificial intelligence, quantum computing, satellite communications, robotics, biotechnology, autonomous vehicles and nuclear fusion are advancing rapidly. All this will change how we work and live.

As Chairman, I have been working with my teams at the National Research Foundation and Future Economy Advisory Panel to stay on the pulse of these seismic movements. 

How can we ride these changes to create a better future for Singaporeans? 

Now, we must stay creative and find opportunities in adversity and in times of major changes to emerge stronger, just as we did during the Asian Financial crisis, Global Financial Crisis and more recently through COVID-19.

We must also invest in creating our future. So, let me suggest three areas. 

We must continue to transform Singapore’s Economy

First, we must press on with our economic transformation. 

At the last Budget debate, I outlined our latest phase of economic transformation, starting with the formation of the Future Economy Council in 2017.

Last year, we launched a report to take stock of our efforts. 

Between 2016 and 2023, Singapore’s labour productivity grew by 2.1% per annum. And this puts us among the top 3 of a group of small, advanced economies with similar population, size and GDP.

Now, our workers and businesses have all benefited. I thank leaders in our business sector, unions, Trade Associations and Chambers (TACs), and academia who have lent your support and expertise. 

But change is inherently difficult, particularly when faced with near term head winds. 

Fewer companies, facing geopolitical uncertainties and higher costs, are launching transformation projects. 

But we must press on, to create new value-add, and stay competitive. 

So, even as businesses make full use of the Corporate Income Tax rebate and Progressive Wage Credit at this Budget to manage immediate cost pressures, I urge them to also make the best use of the measures such as the Enterprise Compute Initiative and the redesigned SkillsFuture Enterprise Credit to transform.

Let us build on the partnerships and structures we have established to support each other. 

Whether through tripartite platforms like NTUC’s Company Training Committees, or private-public partnership platforms like the Alliance for Action on Business Competitiveness led by MTI and the SBF, we will go further in our transformation journey by working together.

Improving lives through science, technology, and innovation 

Now, I have spoken on pressing on with transformation. The second area is to continue to invest and double down on our investments in Research, Innovation, and Enterprise (RIE). 

Science, technology and innovation are advancing at an accelerated pace.

These advances will reshape and disrupt industries, changing the competitive dynamics, and transforming our lives and our societies. The recent buzz over AI, new generation of chips and 5G/6G communication is just the beginning.

Given the critical value of technology and innovation, strategic and economic strengths of nations and of companies will depend on who can make the breakthroughs and retain their lead. 

The stakes have never been higher, and that is why Great Power rivalry is intensifying. 

But around the world, enough players believe in collaboration, to tackle common challenges shared by humanity.  

So, we must continue to position Singapore as a trusted and neutral Global-Asia node of technology, innovation and enterprise, where like-minded partners come together to collaborate. 

Our investments in RIE will not only support our economic transformation, but also benefit our people, directly and indirectly. For example: AI and robotics will automate routine tasks – augmenting our declining workforce and improving the quality of jobs; the science of learning, which explores how we learn, and the use of AI learning tools, can allow us to personalise learning for each student and worker; Our National Precision Medicine Programme seeks to personalise treatments based on our genetic make-up; Geriatric science, such as that being studied at the Queenstown Health District, seeks to keep our ageing population healthy and active for longer; Low carbon fuels and smart cities allow us to make best use of our limited land size, while reducing our carbon emissions.

Over the years, we have invested around 1% of GDP annually to support RIE activities, with S$28 billion committed for the current RIE 2025 plan.

Unlike R&D in a private company, the benefits from these public research expenditures accrue to the whole economy and society. Unfortunately, we are seeing a worrying trend where some governments are making cuts in these areas as they do not fully understand their value, risking great damage to themselves in the long-term.

Members including Ms Jessica Tan and Mr Pritam Singh have asked what progress looks like? Now, let me give a few examples.

Our RIE spending has supported our research talent and raised the quality of research in Singapore. Singapore’s Field-Weighted Citation Impact (FWCI), a measure of research impact, grew from 1.29 in 2010, to 1.52 in 2022, which is 52% above the global average.

Our universities, research institutes and academic medical centres are well-regarded globally. NUS and NTU are ranked among the Top 5 universities in Asia.

MNCs, SMEs and start-ups alike partner with our research ecosystem to develop new products and services through platforms like company R&D centres, over 20 corporate labs and Centres of Innovation.

Indeed, as Members have raised, innovation is key! Our agencies organise renowned innovation platforms such as the Singapore Week of Innovation and Technology, and the Singapore Fintech Festival. The percentage of GDP contributed by firms with R&D activities grew, from 14.8% in 2012 to 23.6% in 2022. Now, our RIE investments support entrepreneurship and incubation programmes in our universities, which generate a pipeline of start-ups. In fact, the Global Start-up Ecosystem Index Report 2024 ranks Singapore 1st in Asia and 7th globally.

Sir, I put forth that over the years, our RIE investments have supported economic growth, created good jobs and improved lives for Singaporeans!

Mr Neil Parekh also asked, what else will we do?

RIE 2030 – 2 New Initiatives

We will finalise our investments from 2026 to 2030 later this year but let me share two major new initiatives that we are working on for RIE2030.

Applied AI

The first initiative is Applied AI. Mr Henry Kwek made a good speech on the importance of AI yesterday. Our first initiative on Applied AI includes applying AI to major use cases in priority sectors such as healthcare, education, finance, advanced manufacturing, connectivity, logistics and transport.

We have started on this. In October last year, we launched a $120 million AI for Science initiative, to support researchers in leveraging AI to accelerate discoveries in fields such as advanced materials and biomedical sciences.

Applied AI sits at the intersection of AI and domain knowledge. Building on the strong domain expertise of our practitioners and researchers in healthcare, education, finance, engineering and many others, we will invest more in developing “bilingual” scientific talent – researchers who can bridge between AI technologies and domain expertise. 

RIE Flagships and RIE Grand Challenges

The second new initiative is the development of new large-scale, cross-cutting R&D programmes called Flagships and Grand Challenges to achieve greater impact.

“RIE Flagships” will push for value creation in key economic sectors, and “RIE Grand Challenges” will address national strategic priorities.

These Flagships and Grand Challenges will pull together relevant research and translational capabilities across our universities, A*STAR and other research institutes, public agencies, and private sector players, to form a suite of purposefully coordinated and synergistic programmes.

The linkages between research, translation and commercialisation will be tightened, to advance key economic areas, produce new products and companies, and address real-world needs and problems.

I am pleased that work has started to scope and design these initiatives: the first Grand Challenge proposes to address the opportunities and challenges of Healthy and Successful Longevity; and the first Flagship will be focused on advancing our semiconductor and microelectronics R&D. 

We will announce more details later.

Even as we do these, we must remember that while Singapore’s research investments are significant, it is a small fraction of global R&D spending. So we must work with like-minded partners from the region and around the world to achieve synergy. Just as an illustration, our investments are S$28 billion over the five years. The US alone in one year was US$923 billion, and China was US$812 billion. And even as a percentage of their GDP, they are far higher. So, we have to work with like-minded partners from the region and around the world to achieve synergy.

Beyond achieving impact for Singapore, we must contribute to addressing global challenges – as these are faced by everyone. Hence, as part our positioning as a Global-Asia Node, we will step up our international partnerships in the coming years. 

While we launch new initiatives, we will continue to invest in basic research, to develop talent in our universities, and in upgrading our research infrastructure. In addition to what PM announced in the Budget, we will also invest in new data and compute capabilities. 

Supporting innovation through facilitative regulations and deep talent

I have spoken on economic transformation and investing in research. To capture the value of our research, the third area is to strengthen our innovation and enterprise ecosystem.

We are off to a good start, with Singapore ranked number one in three reports: The IMD World Competitiveness Ranking, the IMD World Digital Competitiveness Ranking, and the WIPO Global Innovation Index.

To remain competitive, we must continue to maintain our outward orientation.

Companies invest in Singapore not just for our market, but as the gateway to the region. Singapore has served this role well in our last 60 years.

Today, Asia accounts for over half of the world’s population and about 40% of global GDP. The projected medium term growth rates of 4-5% is double that of the G7 developed nations.

As the future economy will be driven by technology and innovation, to stay relevant, Singapore must position ourselves as a 21st century Living Laboratory, or Living Lab, where companies and innovators test new solutions and then scale them up to the region and the world. We can serve as a springboard for companies to venture to a new future, to a wider world market.

In this regard, our regulatory agencies play an important role. They need to fulfil their mandates to regulate safely and effectively, while staying on top of changes, and facilitating new ideas and innovation. 

For example, MAS has embraced its dual mandate to supervise and develop the financial sector, and is pushing the frontier in new areas such as digital and sustainable finance; SFA is the first in the world to approve cultivated meat for commercial sale; and LTA is facilitating trials of Autonomous Vehicles to transport goods and keep our public roads clean.

So I trust that our regulatory agencies will continue to build up the capabilities and the mindset to facilitate innovation while managing risks.

Talent is another key pillar of our innovation strategy. The Government is committed to helping every Singaporean achieve his or her potential.

When I was Education Minister, we launched an Applied Learning Programme to interest the young in science and technology.

Earlier on, I supported Mr Philip Yeo, then Chairman of A*STAR, to send promising young Singaporeans to the top universities in the world under the A*STAR scholarships. To date, almost 1,400 have completed their studies and returned, where they contribute to cutting-edge work in our research institutes and uplift our companies’ R&D capabilities. 

In the coming years, I encourage more Singaporeans to develop “bilingual” fluency in the languages of business and in science and technology. Make full use of this Budget enhancements to build new skills.

At the same time, we must also welcome the best from around the world to be here. Just as steel sharpens steel, strong minds sharpen each other!

Indeed, EDB plans to launch a Global Founder Programme to attract more experienced global founders to grow impactful new ventures from Singapore. 

Growing up in a diverse multicultural society, Singaporeans are well-placed to serve as bridges to connect ideas and talents across the world.

Together, we can learn from the best, work with the best, and build a better home for future generations.

Mr Speaker Sir, let me now say a few words in Mandarin.

今年新加坡独立60年（SG60），是我国的一个重要里程碑。60年来，国人和政府齐心协力，一起克服了重重困难，共同创造了令人瞩目的经济奇迹，打造了一个多元化的和谐社会。

然而，在国际局势不稳定，大国之间博弈、贸易保护主义加剧等因素的笼罩下，我们要如何继续保持新加坡经济发展的势头、为国人创造更美好的未来呢？

科学、技术和创新正在加速发展，对各国的战略实力和经济发展有深远的影响。在各国想要在这些领域优先取得突破，并保持领先地位的情况下，形成了相互竞争的局势。

同时，在全球各国其实还有许多科研人员，愿意与他国科研人员合作，一起应对我们所共同面对的挑战。

所以，我们将继续发展新加坡的研究、创新及企业( RIE )生态系统，并加强国际联系与合作，巩固新加坡作为一个中立、可信赖的全球-亚洲枢纽的地位 。

这样，新加坡能够和国际伙伴紧密合作，一同应对人口老化、对抗大流行病等方面的共同科学挑战。

有鉴于此，我们正在探讨“RIE旗舰项目”、以及“RIE大挑战”计划，分别在选定的经济领域，还有国家战略优先领域，推动多方合作项目。

国家研究基金会和相关部门，将在较迟时候，公布更多详情。

此外，我们还得继续推动经济转型，以更好地应对变化的全球局势。

我们从2017年制定产业转型蓝图（ITMs），推动了经济和企业转型。在这期间，我国的劳动生产力，还有国人的工资都提高了。

我了解，转型工作并不容易，不是一朝一夕就能看到成果的。但是，转型对企业的长期发展至关重要。所以，我鼓励企业善用预算案里的措施，继续进行转型工作。

同时，国人也必须不断自我提升，学习新技能，与时俱进，加强就业保障。

我理解国人对人工智能和数码科技迅速发展，感到担忧。

我在东海岸选区走动时，就会有居民问我，“副总理，你觉得人工智能（AI）会取代人类吗？”

其实，在大概30年前，我们也有过同样的担忧，担心电脑科技发达会取代人类。事实上，我们学会了如何善用电脑科技，简化了许多繁琐的工作，让我们大大地提高生产力，取得了更高质量的经济增长，国人的工资也大幅度提高了。

所以，我们要以积极的角度看待人工智能和数码科技，学习如何利用这些最新的科技，来驱动我们未来的发展。

我吁请国人，利用“技能创前程进阶计划”（SkillsFuture Level-Up Programme）和其他补助计划，来进行技能培训。

议长先生，我国能有今天的成就，是政府和几代国人辛勤付出、风雨同舟，几经艰难，才建立起来的。

今年的财政预算案以 “齐心前进、迈向未来”作为主题，十分贴切。它提醒我们，必须延续新加坡人一向来不屈不挠、精益求精的态度，才能确保新加坡在未来的60年里，继续繁荣、继续绽放异彩！

我很肯定，只要政府和国人继续团结一心，迎难而上，我们就能谱写“新加坡故事”的下一个辉煌篇章！

Conclusion

Before I conclude, allow me a brief reflection on SG60. 

A decade ago, I was chairing the SG50 Steering Committee, where we engaged with Singaporeans to express their love and hopes for Singapore. I was inspired and humbled by the hardy spirit of our pioneers and the dynamism of our youths.

I was then working on my first Budget, and thinking hard about how to support Singaporeans to ride the waves of changes to come.

Even 10 years ago, at SG50, we knew big changes would come. We invested - our resources, our hopes and energies in building a resilient nation. We never imagined we would be hit by a global pandemic that defined a generation, yet we pulled together, and pulled through.

Our Singapore that celebrates SG60 this year is a tougher, stronger, and also kinder and more compassionate Singapore than the one that celebrated SG50. 

As I look forward to SG70 and beyond, my wish is for us to continue to invest in all Singaporeans, young and old. 

Let us invest in enabling our seniors who have done so much for the progress of Singapore to enjoy healthy, fulfilled and productive longevity. 

Let us invest in our young to develop their full potential, to develop uniquely human skills and competences, to thrive in a world of AI, robotics and other technological advances. 

In particular, let us continue to invest our time and energy to continue deepening our multi-racial, multi-religious, multi-cultural society. If we can forge our path forward, our youths today will serve as valuable bridge-builders, connecting ideas and talent across the world, to solve pressing challenges facing humanity. 

In a world heading towards greater contest and fragmentation, amid rapid advances in science, technology and innovation, Singaporeans can play a valuable part as bridge-builders and connectors.

And Singapore can be a trusted and neutral Global-Asia Node, of Technology, Innovation and Enterprise.

Together, we can learn from the best, work with the best, and build a better home for future generations.

I trust colleagues in the House, and all Singaporeans, will support this call as we celebrate SG60 and grow towards the future.

Thank you.