SINGAPORE – Some businesses here have given the thumbs up to SkillsFuture measures announced in the Budget on Feb 16, with a handful, including foreign investors, already seeing opportunities to reskill and train employees in emerging technologies, particularly in artificial intelligence (AI).

Unveiled by Deputy Prime Minister Lawrence Wong in Parliament, Singapore’s 2024 Budget includes a host of benefits aimed at upskilling middle-aged workers and enabling them to return to school to pursue new career paths.

Businesses keen on implementing technologies such as AI have been quick to identify this as an avenue to reskill staff, and hire from what they expect could soon be a wider tech talent pool.

Others hope programmes relevant to more traditional industries such as manufacturing will be available.

In the Budget, DPM Wong announced a new SkillsFuture Level-Up programme, which includes a $4,000 SkillsFuture Credit top-up for all Singaporeans aged 40 and above. To be given in May, this sum can be used to enrol in selected training courses that will enhance employability.

Subsidies will also be given to all Singaporeans aged 40 and above to pursue another full-time diploma at a local polytechnic, the Institute of Technical Education (ITE) or arts institutions from academic year 2025.

A monthly training allowance of up to $3,000 a month will be given to those who enrol in selected full-time courses for up to 24 months.

Benefits will also be given to younger workers. To encourage ITE graduates aged 30 and below to upskill, their Post-Secondary Education Account will be topped up by $5,000 when they enrol in a diploma course. They will also get a $10,000 top-up to their Central Provident Fund Ordinary Account after they complete the course.

While such measures supporting the reskilling of local workers were expected, they surprised some economists with their magnitude.

UOB associate economist Jester Koh said: “While we expected measures to help mid-career workers upskill and acquire knowledge, especially in the areas of digitalisation, artificial intelligence and the green transition, the magnitude of the support… underscores the importance of lifelong learning and equipping workers with new and relevant skills in an uncertain environment, thereby enhancing productivity in the workplace.”

Mr Lee Tiong Heng, global investment and innovation incentives leader at professional services firm Deloitte South-east Asia, noted that the $4,000 SkillsFuture Credit top-up is a generous and significant enhancement to the SkillsFuture programme.

“The Government is sending a strong message that individuals should take personal responsibility to upgrade themselves, to make their skills and knowledge relevant in the new economy,” he added.

DPM Wong also revealed that the Government will be investing more than $1 billion over the next five years in AI computing capacity, talent and industry development.

Said Mr Sujith Abraham, general manager in Asean for US software company Salesforce: “With AI taking a front seat across businesses and for the economy’s success, a right-skilled workforce is critical.”

According to Salesforce, a lack of training is preventing 38 per cent of Singapore workers from using generative AI more at work.

“This skills gap will only grow wider with time, as the profile of jobs will become more complex as AI becomes more pervasive,” he said.

Mr Jonathan Dixon, managing director at Cloudflare in Asia-Pacific, Japan and China, said the cloud company is encouraged by the Government’s increased human capital investments in nascent technologies as well as helping workers refresh their skills to stay competitive.

“AI is going to be an integral part of doing business going forward, and the technology has the potential to create new jobs and augment existing ones,” he noted.

“The SkillsFuture enhancements announced in the Budget will enable workers to upskill and take on roles in demand, such as those in AI and cyber security.”

Apart from acquiring new skills in AI, businesses in sectors like manufacturing are hoping the SkillsFuture Level-Up programme will include courses relevant to their industries.

Mr Dennis Mark, chief executive of the Singapore Manufacturing Federation, said manufacturing businesses are looking forward to programmes that equip workers with much-needed skills in the sector and complement its existing courses in business advisory and advanced manufacturing.

He noted, though, that such programmes will increase costs for manufacturers.

While measures were announced to cushion the impact of rising costs, “we hope more light will be shed” at the upcoming debates in Parliament on ministry budgets over how business costs can be further mitigated, he said.

Some employers face higher wage costs after DPM Wong announced that the local qualifying salary (LQS) for full-time workers will be raised from $1,400 to $1,600 in 2024.

The minimum hourly rate will also be increased, from $9 to $10.50 an hour.

The LQS is the minimum salary that companies hiring foreign workers are required to pay their local workers, and the number of local workers paid the LQS is then used to compute the company’s foreign worker quota entitlement.

Mr Panneer Selvam, a tax leader for EY Asean, said the higher LQS will impact companies’ operating costs and access to foreign manpower, but added that the Government also recognises the pressures that companies will face.

As part of Budget measures to support employers who raise the wages of their lower-wage workers, DPM Wong also raised co-funding levels from a maximum of 30 per cent to a maximum of 50 per cent.

Under the existing Progressive Wage Credit Scheme, the Government co-funds the wage increase of lower-wage workers with employers.