In the months leading up to Lee taking over as Singapore's third Prime Minister in 2004, he was already signalling reforms in some key areas, including ceding more space to the private and people sectors. Of the government's role, he said in a speech: "Nanny should not look after everything all the time".[12]
On 12 August 2004, Lee succeeded Goh Chok Tong as Prime Minister and relinquished his chairmanship of the Monetary Authority of Singapore to Goh Chok Tong. Lee was sworn in by Chief Justice Yong Pung How at the Istana.
Lee made his maiden National Day Rally on 12 August 2004. In his speech, Lee initiated the policy of the "Five-day work week", a plan that would remove a half-working day on Saturday. The plan took effect on 1 January 2005.
Lee also proposed two-month paid maternity leave for mothers of newborn children and financial incentives to mothers who give birth to a fourth child. These policies were initiated in response to the declining birth rate that Singapore has experienced in recent years.
In November 2004, Lee sparked a national debate when he revealed a proposal to build two Integrated Resorts (IRs) which are holiday resorts with casinos. In April 2005, despite some opposition expressed by the public, Lee announced the decision to approve the proposal. The two IRs were built in Marina Bay and Sentosa. To limit the negative social impact of casino gambling, Lee suggested that safeguards be implemented, such as prohibiting minors from entering the casinos and charging a S$100 entrance fee for Singaporeans and permanent residents or S$2000 for a year-long entrance fee.