Singapore Prime Minister Lawrence Wong has introduced unemployment benefits as part of a slate of first-time or expanded welfare programs as the new leader seeks to bolster the ruling party ahead of national elections.
In his first major speech since taking office three months ago, Wong said on Sunday the city-state will provide temporary unemployment support of as much as S$6,000 (158,000 baht).
The move is a notable departure for a government that has long resisted creating the kind of unemployment insurance programme more commonly seen in other high-income nations. Wong’s predecessor, former prime minister Lee Hsien Loong, encapsulated that approach in 2020, when he said “the best unemployment insurance is, in fact, the assurance of another job.”
“Some countries have unemployment insurance, but the experience has not always been positive because after getting a generous benefit, the person might find it more attractive to stay unemployed than to go back to work,” Wong said in his National Day Rally address on Sunday.
But Wong signalled the government is willing to take a new tack.
“Losing a job is a major setback, which can seriously destabilise workers and their families and we have to do something to lessen the strain on those who are affected,” Wong said. “So we will help you get through the setback and bounce back stronger. But you must do your part too!”
Wong also announced training and increased housing grants and mandatory paternity leave in what he previously said was an effort designed to help Singaporeans deal with broad change across industries and high living costs.
The speech comes as the 51-year-old readies to lead the People’s Action Party into the next election, which must be held by November 2025 but could come much sooner. The vote will be the first since the PAP had its worst-ever showing in 2020 — despite winning 89% of parliamentary seats — owing in part to concerns about the economy and a youth cohort that’s more open to seeing a bigger role for the opposition in government.
Since being tapped for Singapore’s top job two years ago, Wong has sought to project a sense of continuity with Lee — the son of the nation’s founder, Lee Kuan Yew — while nodding to the pressures the island’s citizens increasingly feel. With the cost of living ranked as the top concern among Singaporeans, Wong has pledged to boost safety nets and re-skilling programs as part of a strategy focusing on income and wealth inequality.
“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.
As finance minister, Wong pitched a budget this year that included S$5 billion for measures including cash payouts and tax breaks, a figure that will reach nearly S$40 billion by the end of the decade. Those programmes were extended during his speech on Sunday, including with training allowances of up to S$3,000 a month, increased public housing grants for lower-income groups and mandatory paternity leave starting April 2025.
“The whole subtext was really that this is a society in which everyone can thrive,” said Eugene Tan, a law professor at Singapore Management University. “This is his first and last National Day Rally before the general election so it’s really about burnishing the credentials of the People’s Action Party government.”
For all the moves to reinforce the economy, the trade-reliant nation of nearly 6 million still faces considerable risks. Recent talks about a US recession has added to worries about weakening demand in a world already grappling with geopolitical tensions and China’s uneven recovery.
During his speech, Wong promised a business-friendly environment and pledged to keep the regulatory burden to a minimum. He briefly touched on geopolitical issues facing the region, reiterating caution over the intensifying rivalry between the United States and China, two of Singapore’s biggest trade and investment partners.
GDP forecast
The government said this month that it expects the island’s economy to expand between 2% and 3% this year, narrowing its forecast on a resilient external demand outlook.
Part of Wong’s effort to protect Singaporeans is balancing its workforce between local and foreign employees, another issue that featured prominently during the last election. Starting next year, the government will raise the qualifying monthly salary for foreigners seeking an employment pass to at least S$5,600, a figure that goes up to at least S$6,200 in the financial services sector. The rule also applies to pass renewals.
To survive, Singapore needs a government that is both “prudent and bold,” the premier said, evoking Lee Kuan Yew. “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.”