Budget 2026: 11 highlights from PM Wong’s speech

In his Budget 2026 speech in Parliament, PM Wong laid out plans to tackle a range of issues, from cost-of-living concerns to helping Singapore businesses expand overseas.

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Vanessa Paige Chelvan

and

Joyce Teo

SINGAPORE – Prime Minister and Finance Minister Lawrence Wong outlined the Government’s expenditure plans for the year on Feb 12.

In his Budget 2026 speech in Parliament, PM Wong laid out plans to tackle a range of issues, from cost-of-living concerns to helping Singapore businesses expand overseas.

Budget 2026 lays the groundwork for how Singapore will navigate its next phase of development, said PM Wong.

His speech covered six areas: refreshing Singapore’s economic strategy, harnessing artificial intelligence (AI), building a more resilient and skilled workforce, supporting families, protecting Singapore’s security and sustainability, as well as strengthening the Singapore spirit.

Here is an overview of the biggest announcements of Budget 2026:

1. Cash, CDC vouchers to ease cost-of-living pressures

Although inflation has eased, many Singaporeans continue to feel cost pressures. To help them cope, PM Wong said a Cost-of-Living Special Payment of $200 to $400 – in cash – will be disbursed in 2026.

Singaporean adults with an assessable income of up to $100,000 and who own no more than one property will be eligible.

There will also be additional U-Save rebates to offset utility bills. Eligible households will receive 1½ times the regular U-Save amount, or up to $570, this fiscal year, he said.

In addition, all 1.4 million Singaporean households will receive $500 in CDC vouchers in January 2027.

2. $500 in Child LifeSG Credits; higher income ceiling for pre-school and student care subsidies

To help parents with the cost of raising children, PM Wong announced an additional $500 in Child LifeSG Credits for each Singaporean child aged 12 and below. First unveiled in Budget 2025, the credits help defray daily household expenses.

The payout will be disbursed in July for children aged one to 12, and in April 2027 for those born in 2026.

To keep pre-school and student care affordable, the Government will raise the monthly household income eligibility threshold for pre-school subsidies from $12,000 to $15,000, benefiting more than 60,000 families.

The income ceiling for student care subsidies will also be raised from $4,500 to $6,500 starting 2027.

Lower-income families under the ComLink+ scheme will receive a new quarterly payout of $500 if they commit to working with family coaches.

Additional milestone payouts for maintaining stable employment and children’s pre-school attendance will also be enhanced, with more disbursed in cash to meet families’ immediate needs, PM Wong said.

3. Enabling seniors to age well via CPF top-up

To boost retirement support, a CPF top-up of up to $1,500 will be provided to Singaporeans aged 50 and older whose retirement savings fall below the Basic Retirement Sum of $110,200 as at Dec 31, 2025.

Individuals with lower CPF balances will receive larger top-ups, Mr Wong said.

CPF contribution rates will rise by 1.5 percentage points in 2027 for workers aged over 55 and up to 60, and by 1 percentage point for those aged over 60 and up to 65 to boost retirement adequacy.

Employers will get a CPF Transition Offset to cover half the increase in employer contributions for 2027.

PM Wong said the Government is looking at how to help individuals who wish to grow their savings, especially those with a longer runway to retirement.

While life-cycle investment products already exist, the fees are traditionally high. Hence, the Government will help develop such products under a new investment scheme for CPF members, which will offer more affordable fees.

4. More support for lower-wage, mid-career workers

To support lower-wage workers, the Government will raise the local qualifying salary for full-time local employees in companies that hire foreign workers from $1,600 to $1,800, starting July.

To help businesses with costs, co-funding support for the Progressive Wage Credit Scheme will be raised to 30 per cent in 2026, up from 20 per cent. The scheme, which co-funds wage increases for lower-wage workers, will also be extended by two more years, until 2028.

The authorities will also raise the minimum wage increase required to qualify for the scheme from $100 to $200, from 2027, to better encourage and reward the companies that invest in their workers, PM Wong said.

As a Tripartite Workgroup on Senior Employment explores ways to support senior workers in 2026, the Government will extend the Senior Employment Credit until the end of 2027 to support employers who continue to employ senior workers.

5. Qualifying salaries for EP, S Pass raised; work permit levies adjusted

PM Wong said the Government will update Singapore’s foreign workforce policies to reflect evolving economic conditions.

Starting January 2027, the minimum qualifying salary for new Employment Pass (EP) applicants will be raised from $5,600 to $6,000.

Qualifying salaries for S Pass holders will also increase to $3,600 from January 2027, up from $3,300. In the financial services sector, the threshold will rise from $3,800 to $4,000.

The revised salary criteria will apply to new applicants from Jan 1, 2027, and to renewals from Jan 1, 2028.

Work permit levies will also be adjusted. Levies for basic skilled workers in the marine and process sectors will be raised by $100 and $150, respectively.

The current three-tier levy structure for the manufacturing and services sectors will be streamlined to a two-tier system. At present, companies face progressively higher costs across three tiers, depending on the proportion of foreign workers in the company.

These levy changes will take effect from 2028.

6. Harnessing AI

To help Singapore harness AI to overcome the country’s limited natural resources, rapidly ageing population and tight labour market, PM Wong said he will chair a National AI Council that will be set up to drive the national AI agenda.

Singapore will launch national AI missions to drive AI-led transformation in key sectors of the economy, specifically advanced manufacturing, transport connectivity, finance and healthcare.

To support firms keen to use AI to comprehensively transform their businesses, a new Champions of AI programme will be established to provide support tailored to each company.

The Enterprise Innovation Scheme will also be expanded to include AI expenditures as a qualifying activity for the years of assessment 2027 and 2028, capped at $50,000 per year.

To help every firm access tools to work smarter and compete more effectively, a wider range of digital and AI-enabled solutions will be supported under the Productivity Solutions Grant, the Prime Minister said. The grant helps Singapore companies improve productivity and automate processes.

The Government will also redesign the SkillsFuture website to help Singaporeans quickly find courses that match their work needs and proficiency levels, and provide six months of free access to premium AI tools for those who take up selected AI training courses.

7. Boosting support for businesses

To ease business costs, PM Wong announced a 40 per cent corporate income tax rebate for the year of assessment 2026.

Every active company that employed at least one local worker in 2025 will receive a minimum benefit of $1,500. It will be capped at $30,000 per company.

To support international expansion, grant support for overseas growth will be enhanced to up to 70 per cent for small and medium-sized companies (SMEs), and up to 50 per cent for non-SMEs.

The Market Readiness Assistance grant will be strengthened to help companies enter and deepen their presence in overseas markets. The grant helps companies expand into new markets overseas by defraying the costs of overseas market promotion, business development and set-up.

To improve access to growth capital, there will be a $1 billion top-up to the Startup SG Equity scheme, and it will be expanded to cover growth-stage companies. The scheme is designed to encourage private sector investment in Singapore-based technology start-ups that hold intellectual property and possess global market potential.

A second $1.5 billion tranche will go to the Anchor Fund, which supports high-growth companies by providing the capital and expertise necessary to anchor their public listings on the Singapore Exchange.

Another $1.5 billion will be set aside to expand the Equity Market Development Programme to strengthen Singapore’s fund management industry and boost investor participation in local equities.

8. Charting a sustainable future

In addition to the immediate challenges facing Singapore, the growing impact of climate change must also be addressed. Although this is primarily a long-term concern, the consequences of altered weather patterns are already becoming noticeable, PM Wong said.

To help companies invest in energy-efficient and sustainable solutions, the Government will extend its Energy Efficiency Grant by a year, until March 31, 2027, to help co-fund investments in energy-efficient equipment.

9. $50m fund to support ground-up community initiatives

To support Singaporeans who launch ground-up initiatives to meet community needs, PM Wong announced a new $50 million SG Partnerships Fund, offering tiered support, including grants of up to $1 million for larger, multi-year projects.

The Government will also extend the 250 per cent tax deduction for qualifying donations to Institutions of a Public Character and other eligible institutions for three years, from Jan 1, 2027, to Dec 31, 2029.

Plans are under way to strengthen cultural and heritage institutions such as the Malay Heritage Centre, Singapore Chinese Cultural Centre and Indian Heritage Centre.

The Government will also continue rolling out the Sports Facilities Master Plan to improve access to affordable, quality sports facilities, he said.

10. Workforce Singapore, SkillsFuture Singapore to merge

To strengthen the integration of Singapore’s job skills ecosystem, Workforce Singapore and SkillsFuture Singapore will merge into a new statutory board, jointly overseen by the Ministry of Manpower and the Ministry of Education.

This new agency will be a “one-stop shop” for skills training, career guidance and job matching services, said PM Wong.

This move will better position Singapore to align future skills with future job demands, delivering more seamless end-to-end career and employment services for Singaporean workers, according to a joint statement from the ministries.

A single agency overseeing jobs and skills will allow Singapore to respond faster and more effectively to changes in the fast-evolving economy and labour market, it said.

11. Cost of cigarettes up, special rebate for cars slashed

Cigarettes, cigars and other tobacco products

will now cost more

, following a 20 per cent increase in tobacco excise duty, which takes effect immediately.

This means that the average price of a 20-stick packet will increase from about $15.60 to $17.74. The move is to discourage the consumption of such products, said PM Wong.

The Prime Minister also announced a significant reduction in the Preferential Additional Registration Fee rebate, which is the amount car owners receive for deregistering their vehicles before the 10-year mark.

With this change, the maximum rebate a car owner can receive will be halved from $60,000 to $30,000.

The changes will take effect from the next certificate of entitlement bidding exercise, which closes on Feb 20. The move reflects the Government’s shift away from encouraging early deregistration of cars, as cleaner electric vehicles become more common.

Vanessa Paige Chelvan is a correspondent at The Straits Times. She writes about all things transport and pens the occasional commentary.

Joyce Teo is senior health correspondent at The Straits Times and the host of ST podcast series Health Check.

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