Singapore Budget 2026: A Full Agenda for a Changed World

At around 3.30pm, Prime Minister and Finance Minister Lawrence Wong delivered his first Budget of the new government term — and the first in what he called Singapore’s “post-SG60 phase”.

If Budget 2025 was framed as “a Budget for all Singaporeans”, Budget 2026 is something different.

It is a Budget shaped by:

• A more fractured global order
• Slower and more uncertain growth
• Rapid technological disruption (hello, AI 🤖)
• Rising security and climate pressures

Yet, despite the turbulence, Singapore ended 2025 strong with GDP growth at 5%, beating the earlier estimate.

Here’s what matters and what it means for you.

A More Dangerous, Fragmented World

The Prime Minister set the tone early: the world order that underpinned decades of stability is under strain.

For nearly 80 years, a US-led global system supported open markets and cooperation. That era is shifting. Trade flows are becoming selective. Partnerships are more strategic. Geopolitics is tense.

Yet Singapore ended 2025 with:

• 5% GDP growth
• Strong external demand
• A healthy labour market
• Inflation easing to 1–2% range for 2026

Growth for 2026 is projected at 2–4%.

The message? The global environment is tougher but Singapore enters it from a position of strength.

Support for Businesses

40% Corporate Income Tax Rebate

Businesses will receive a 40% corporate income tax rebate for YA2026, capped at S$30,000, with a minimum benefit of S$1,500 for qualifying firms

This is short-term relief amid cost pressures, not a structural tax cut.

S$1 Billion Boost for Startups

The government will inject S$1 billion into the Startup SG Equity scheme to support growth-stage firms — not just early-stage startups 

In addition:

• Second S$1.5B tranche for the Anchor Fund
• S$1.5B top-up to the Financial Sector Development Fund
• Higher internationalisation grant caps
• Enhanced Enterprise Financing Scheme

The goal: deepen capital markets and anchor high-growth firms here. 

Singapore is doubling down on becoming a growth capital hub.

The National AI Push

AI is not just another tech buzzword in Budget 2026. It is framed as a national strategy.

National AI Missions

Singapore will launch sector-focused AI Missions in:

• Advanced manufacturing
• Connectivity
• Finance
• Healthcare

A new National AI Council, chaired by PM Wong, will coordinate efforts.

AI Support for Companies

• AI expenses added under Enterprise Innovation Scheme (400% deduction cap at S$50,000)
• Expanded Productivity Solutions Grant for AI-enabled solutions
• New “Champions of AI” programme

This signals deep structural transformation, not surface-level adoption.

AI for Workers and Individuals

AI anxiety was acknowledged directly.

The government will:

• Build practical AI skills in professions like accountancy and law
• Redesign the SkillsFuture website for clearer AI learning pathways
• Provide 6 months of free premium AI tool access for selected course participants

This is one of the more forward-looking moves in this Budget.

Workers & Wages

Local Qualifying Salary

Raised from S$1,600 → S$1,800

Progressive Wage Support

• PWCS co-funding raised from 20% to 30%
• Extended to 2028

Employment Pass (EP) Changes

Minimum EP salary:

• From S$5,600 → S$6,000 (Jan 2027)
• Financial sector: S$6,200 → S$6,600

S Pass minimum:

• From S$3,300 → S$3,600

This tightens foreign manpower policy while reinforcing a Singapore core.

Families & Cost of Living

Child LifeSG Credits

Additional S$500 per child aged 12 and below

Preschool & Student Care Subsidies

Income ceilings raised:

• Preschool: S$15,000
• Student Care: S$6,500

Over 60,000 families benefit.

ComLink+ Enhancements

Eligible families can receive up to ~S$10,000 per year in cash and CPF top-ups. Support is more targeted and milestone-based.

Seniors & Retirement

CPF Top-Up

Singaporeans aged 50+ with CPF savings below the Basic Retirement Sum will receive up to S$1,500 top-up

Long-Term Care Support

• S$400M top-up to Long-Term Care Support Fund

New CPF Investment Scheme (2028)

A voluntary life-cycle investment option:

• Higher equity exposure when young
• Automatic shift to safer assets near retirement

Low fees. Limited providers. Government support to kick-start.

Cash, Rebates & Vouchers

Eligible Singaporeans can expect:

• S$200–S$400 Cost-of-Living cash payment
• Up to S$570 in U-Save rebates
• S$500 CDC vouchers in Jan 2027

Broad-based relief continues, though more targeted than past milestone years.

Security & Defence

Security-related spending is expected to rise.

Currently:

• Defence spending ~ 3% of GDP
• Prepared to increase if necessary

Focus areas:

• Countering unmanned aerial threats
• Strengthening cybersecurity
• Safeguarding critical infrastructure

The global conflict environment is the most intense since WWII; 61 armed conflicts globally in 2024.

Climate & Energy

Carbon tax remains a key pillar:

• S$45 per tonne now
• Target S$50–S$80 by 2030 (lower end possible depending on global developments)

Singapore:

• Hit 2GW solar target early
• Now aiming for 3GW by 2030
• Importing low-carbon electricity
• Exploring hydrogen, geothermal, civilian nuclear

Climate action continues, but calibrated carefully to remain competitive.

Fiscal Position

FY2025:

• S$15.1B surplus (1.9% of GDP)

FY2026:

• S$8.5B surplus (1% of GDP)

Spending will rise across:

• Security
• Economic competitiveness
• Social needs
• Long-term infrastructure (including Changi Airport)

Revenue will also rise, especially from corporate tax and BEPS Pillar Two implementation.

Read more at www.singaporebudget.gov.sg

Stay tuned to The Financial Coconut for more in-depth analysis and updates on how the 2026 Budget will impact you and your family.