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Preparing for longer term challenges
- The Government will set aside resources through specific funds for major future needs, including critical infrastructure investments for energy transition and coastal protection.
- Further top ups to the relevant funds to support the development of Changi Airport, as well as longer-term economic strategies will be made.
- Both revenues and expenditures are expected to continue rising. The government will manage this increase carefully, ensuring that spending remains supported by revenues and consistent with the objective of maintaining a balanced budget over the medium term.
PM Wong said Singapore cannot afford to be “mere spectators”, urging citizens to be active participants who look out for one another, strengthen social bonds, and contribute to a nation that belongs to all.
He said this conviction underpins Budget 2026, which is designed to support Singaporeans in the present, prepare society for the future, and equip the country to navigate a changed world with confidence.
PM Wong concluded: “Together, we will secure a stronger, fairer and brighter future for all.”
Spending needs will grow
- External relations and security: Need to invest more in expanding our overseas partnerships and in building up deeper capabilities to keep Singapore safe and prepared for emerging threats.
- Economic front: Many other countries are rolling out generous incentives to reshore and onshore major investments. We must update and strengthen our investment promotion toolkit.
- Social needs: The Government anticipated higher spending for healthcare and provided for it through the GST rate increase. Further, assurance needs to be bolstered for families, social mobility, and retirement adequacy.
Measures to maintain fiscal responsibility
- Adjustment in vehicle taxes:
- Car buyers are to be taxed through the additional registration fee to encourage timely renewal of the vehicle so it is safer and less polluted.
- Lowering of the PARF (preferential additional registration fee) rebate cap from $60,000 to $30,000 and this will apply to all cars registered with Certificates of Entitlement obtained when the next bidding starts.
- All tobacco products will see a 20% increase in excise duty.
- Corporate income tax collections: For FY 2026, PM Wong expect a smaller surplus of SGD$8.5bn or 1% of GDP.
Volunteering and acts of kindness
- 250% tax deductions for qualifying donations to institutions of the public character, for Institutions of a Public Character (IPCs) and eligible institutions.
- This scheme will be extended for another three years, until 2029.
- Corporate volunteering scheme will provide four 50% tax deductions when employees volunteer or are supported by IPCs.
Renewing and strengthening bonds
PM Wong reminded all Singaporeans to cherish and embrace our distinct cultures and heritage, even as we continue to build common ground, and the shared identity that unites the nation.
Arts
- The Malay Heritage Centre, he said, will open later this year.
- Work will be done with the Singapore Chinese Cultural Centre to expand its reach and engagement.
- The Indian Heritage Centre has just marked its 10th anniversary, and we will provide further support to enhance its outreach and programming.
Sports
- Continue to roll out the sports facilities Master Plan so that Singaporeans can more easily access affordable and quality sports facilities in Punggol, Farrer Park, Tengah, and many more.
Carbon tax trajectory
- Carbon tax has just been raised to $45 per ton for this year and next, and the plan is to reach $50 to $80 per ton by 2030.
- Meanwhile, energy efficiency grants and support for green loans under the Enterprise Financing Scheme have been extended.
Addressing cybersecurity challenges
- Efforts already undertaken to detect, disrupt and fend off many attacks: Established the Cyber Security Agency, built expertise within the Home Team Science and Technology Agency (HTX), and stood up the digital and intelligence service in the SAF.
- Cybersecurity posture will continue to be improved by deepening capabilities, improving coordination across agencies, and better safeguarding the most critical systems.
- PM Wong also said that private sector companies to play a critical role in delivering essential services, and their systems are likewise vulnerable. Thus, partnerships with the industry will be deepened.
- Expect to keep defence spending at about 3% of GDP.
Cost of living support for Singaporeans
- A Cost-of-Living Special Payment, comprising $200-$400 in cash, will be given to Singaporean adults who earn up to $100,000 in assessable income and do not own more than one property.
- Another $500 in CDC vouchers will be disbursed for all Singaporean households in January 2027. Half of these can be used at participating supermarkets, and the other half can be used at participating heartland merchants and hawkers.
Support for persons with disabilities (PWDs) and the elderly
More support will be provided to seniors so they can age with dignity, security and peace of mind.
- CareShield Life has been recently to provide higher payouts.
- Increased CareShield Life subsidies to help cushion the impact of the higher premiums.
- The Government will top up the long-term care support fund by S$400mn to fund the additional subsidies with longer lifespans.
For the elderly, support will be given to uplift those with limited means, alongside the Majulah package which supports young seniors as they approach retirement.
- A CPF top up of up to S$1,500 for Singaporeans aged 50 and above, and with CPF retirement savings below the basic retirement sum. Those with lower balances will receive larger top ups.
- The next step of planned CPF contribution rate increases for senior workers will commence in 2027 to help older workers build up their retirement savings.
Support for lower-income families
The ComLink+ scheme aims to uplift lower-income families with children towards stability, self-reliance and social mobility (3S). To this effect:
- A new payout of $500 per quarter will be granted for all ComLink+ families who make a commitment to work with family coaches and take active steps to make progress.
- Second, additional payouts that families receive when they make concrete progress in their goals of maintaining stable employment and good preschool attendance for their children will be enhanced.
- Third, more of these payouts will be given in cash while continuing to set aside money in their CPF accounts.
Families and caregiving
- For the large family scheme, which supports families who have or aspire to have three or more children; for every third or subsequent child, up to $16,000 will be provided in additional benefits.
- Another S$500 in Child Life SG credits to families will be granted this year, for each Singaporean child age 12 and below.
- Efforts will be made to keep preschool and student care affordable through:
- Reduced preschool fee caps and increased subsidies.
- Lower- and middle-income families also receive means tested subsidies.
- These will be enhanced further from the start of next year, whereby the monthly household income threshold will be raised to S$15,000, thus benefitting more than 60,000 families.
- The monthly household income threshold for student health fee assistance will also be pegged at $6,500 so that all families can qualify.
Foreign workforce policies
PM Wong stated that foreign worker polices will have to be refined to reflect evolving conditions. Thus, he will be implementing the following:
- The employment pass (EP) minimum qualifying salary for new applicants will be increased from S$5,600 to S$6,000 from January 2027.
- For the financial services sector, which has higher salary norms, the minimum qualifying EP salary will be raised from $6,200 to $6,600.
- The qualifying salaries for older EP applicants will be raised in tandem for renewal applications. These changes will apply a year later, in 2028, to give businesses more time to adjust.
- Likewise, the qualifying salaries for S Pass holders will be increased from January 2027 from $3,300 to $3,600.
- For S Pass applicants in the financial services sector, qualifying salaries will be raised from $3,800 to $4,000.
- Qualifying salaries for older S plus applicants will be raised in tandem with renewal applications, which will come into effect one year later, from 2028.
Support for senior workers
To help seniors to continue to contribute meaningfully, PM Wong listed the following:
- Help will be provided for supporting them in refreshing their skills.
- Employers will be equipped to design age-friendly jobs and multi-generational workplaces.
- The Senior Employment Credit will be extended to end 2027 to support employers who continue to employ senior workers.
Skills upliftment across the workforce
Systems of learning must work more seamlessly together, said PM Wong, as he announced the following areas of developmental support:
- The Economic Strategy Review (ESR) committee had recommended that the Government review how it organises Jobs and Skills support for Singaporeans.
- As such, SkillsFuture Singapore (SSG) and Workforce Singapore (WSG) will be merged into a new statutory board, jointly overseen by Ministry of Education (MOE) and Ministry of Manpower (MOM). The idea is the create a one-stop platform for skills training, career guidance, and job matching services for workers and job seekers.
- For employers, this means support will be more integrated, covering workforce planning, job redesign, hiring and workforce development.
- For employees, this should mean better career planning, skills acquisitions, and job matching and transitions.
Support for lower workers, including lower-wage workers
“Every Singaporean, regardless of where they start in life, should have a fair chance to pursue their aspirations and realise their full potential,” said PM Wong.
As such, he announced the following measures to strengthen support for lower-wage workers.
- The local qualifying salary, or LQS, which is the minimum salary that local employers must pay to local employees in firms that hire foreign workers, will be increased from $1,600 to S$1,800.
- The Progressive Wage Credit Scheme (PWCS) will be extended for two more years to 2028.
- The PWCS co-funding support for this year will increase from 20% to 30%.
- From next year, the minimum wage increase to qualify for PWCS support will be raised from S$100 to S$200 to better reward firms that invest in their workers.
- The basic tier of the scheme will be enhanced, and the hourly allowance for workers who upgrade their skills will be increased.
Protect workers amid AI transformation
- Singaporeans will be provided help on acquiring new skills and adapt to new roles where they can use AI as a tool to be more productive.
- Where jobs are impacted, PM Wong assured that the transitions will be managed carefully and the Government will work closely with NTUC and the unions to help workers move into new areas and opportunities.
- Workers will be taught to give away routine tasks to AI so they can focus their time and energy on higher value activities – work that, PM Wong said, requires judgment, creativity, and human insight, that cannot be replaced by machines.
- He encouraged Singaporeans to learn and pick up AI related skills, given that tools like ChatGPT or Gemini are widely available and easy to use.
- The SkillsFuture website will be redesigned to make AI learning pathways clearer and easier to access so that Singaporeans can quickly find courses.
- Singaporeans who take up selected AI training courses will gain six months of free access to premium AI tools.
Apart from workers, the next generation, i.e. students, will also be better prepared, as AI literacy for students will be strengthened across all institutes of higher learning (IHLs).
Harnessing technology with focus on AI
On the topic of AI, PM Wong said: "If harnessed well, AI will be a strategic advantage for Singapore. It can help us overcome our structural constraints, our limited natural resources, rapidly aging population, and tight labour market."
He stressed on ensuring AI is used strategically for Singapore using a two-pronged approach:
- Invest deliberately and with discipline, not by simply following what others do, but by playing to Singapore's threats.
- Go beyond individual pilots and isolated experiments. Organise at the national level, and move with speed and scale.
To this effect, PM Wong announced that a National AI Council will be established, which he will chair to provide strategic direction. Further, AI missions will be launched in four sectors to focus on transformation: Advanced manufacturing, connectivity, finance and healthcare.
For organisations, PM Wong announced the following support measures in scaling AI:
- Champions of AI programme: This will support firms that want to use AI to comprehensively transform their business. Support will be tailored to each company and will include enterprise transformation and workforce training.
- Strengthened support for all enterprises, especially SMEs: Built on the enterprise innovation scheme which provides businesses with 400% tax deductions on qualifying expenditures in activities like R&D, innovation, and capability development >> Enhanced support will include AI expenditures as a qualifying activity for the years of assessment, 2027, and 2028, capped at S$50,000 per year of assessment.
- Existing support schemes such as Productivity Solutions Grant will be strengthened.
- A pilot initiative, called Lorong AI will be set up, which will be a dedicated co-working space that serves as a convening hub for the AI community.
Strong pipeline of high-quality companies
- EDB will step up efforts to attract high growth companies with the potential to become future industry leaders, as Singapore can potentially be a hub from where they can grow and expand.
- Focus will be on enabling companies of all sizes and at every stage of growth to access the capital and partnerships they need to succeed, while creating opportunities for Singaporeans to secure good jobs and grow their careers.
Growth through globalisation
PM Wong has highlighted the need for Singapore to adapt and connect differently in a changed global environment: "We need to be connected to the world, trading with others and integrating ourselves into global flows."
- For Singapore to stay open and connect globally, new forms of cooperation with fast growing markets will be forged, including in Latin America, Africa, and the Middle East.
- Companies will be provided support to internationalise, with up to 70% funding for small and medium enterprises (SMEs), and up to 50% funding for non SMEs.
- Market readiness assistance grant will be enhanced: To support companies not just to access new markets, but also deepen activities in existing overseas markets.
- Under the double tax deduction for internationalisation scheme, companies automatically enjoy a 200% tax deduction for selected qualifying activities capped at S$150,000.
Avenues for economic growth
- 40% corporate income tax rebate will be provided in the 2026 year of assessment.
- Every active company that employed at least one local employee last year will receive a minimum benefit of S$1,500 – the total benefit will be capped at S$30,000 per company.
"Growth itself is not enough. Growth must translate into good jobs and rising incomes for Singaporeans,” PM Wong has stated.
Later in the speech, he also talked about Ministry of Finance's (MOF) recent paper on income growth inequality and social mobility, which shows that over the past decade, the nation has made good progress with broad based wage increases and smaller income gaps.
Budget opening
PM Lawrence Wong has opened the Budget speech, noting that the resilience of the global economy, combined with Singapore's economic strength, has resulted in better-than-expected growth of 5%. Strong external demand has boosted key industry clusters, including electronics and biomedical manufacturing.
Some of the positive momentum will continue into this year, but amidst heightened global uncertainties, Singapore can expect a more moderate outlook for 2026. Growth is, therefore, projected at 2-4%, with inflation at 1-2%.
Further, we understand that Budget 2026 will focus on:
1. Refreshed economic strategy
2. Harnessing artificial intelligence as a strategic advantage
3. Building a resilient and skilled workforce
4. Giving families more support and greater assurance
5. Protecting our security and sustainability, and renew and strengthen our Singapore spirit.
Lawrence Wong, Singapore’s Prime Minister and Minister for Finance, will present the #SGBudget2026 speech for Financial Year 2026 in Parliament today (Thursday, 12 February 2025) at 3:30pm.
Human Resources Online will share real-time updates as they happen. Follow our live coverage here, and look out for the highlights article in our daily e-newsletters.
As the nation awaits the speech, check out our pre-Budget coverage to see what HR and business leaders had on their wishlist for Singapore Budget 2026.
- Singapore Budget 2026: HR and business leaders share their manpower wishlist
- Budget 2026 wishlist: Why unlocking Singapore’s latent workforce must be the next manpower priority
- Report by Umairah Nasir & Aditi Sharma Kalra
Lead image / PM Wong Facebook
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