Budget 2026: MPs debate if $15.1b surplus is ammunition for the future or ‘unnecessary hoarding’
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Members of Parliament debated the larger-than-expected surplus on the first day of the Budget debate.
ST PHOTO: GIN TAY
SINGAPORE - A larger-than-expected surplus of $15.1 billion
PAP MPs on Feb 24 held that a sizeable Budget surplus is insurance in an increasingly volatile world, while those from the Workers’ Party questioned the need for what they called an “unnecessary hoarding of funds”.
In total, 31 MPs raised questions on topics such as the national artificial intelligence push and support for small businesses, in a wide-ranging debate where disagreements mainly centred around the Budget surplus.
Singapore’s Budget surplus of $15.1 billion was more than double the $6.8 billion that the Government earlier estimated. It was one of the largest surpluses in recent history and equal to 1.9 per cent of the country’s gross domestic product (GDP).
In his Budget speech on Feb 12
Mr Saktiandi Supaat (Bishan-Toa Payoh GRC), who chairs the Government Parliamentary Committee for Finance and Trade and Industry, opened the debate by noting that the surplus reflects, in part, the volatility of the global environment.
“Some of my residents in Toa Payoh have asked me why are there not more goodies, especially when we had a Budget surplus,” he said.
While this is an understandable question, unexpected developments such as geopolitical tensions or trade disruptions can quickly affect growth and revenue, he added.
“It is therefore prudent that we channel today’s windfall towards strengthening resilience for tomorrow, rather than locking in spending that may not be sustainable,” Mr Saktiandi said. “We must also not make the mistake of assuming that the profit cycles will always remain in Singapore’s favour.”
WP MPs call for greater accountability
Speaking second, WP chief Pritam Singh called for more clarity on how such surpluses will be spent, given that the Government is starting its new term with “what may be the greatest fiscal surplus any PAP government has seen in decades”.
He also noted that the expected $8 billion surplus for the 2026 financial year exceeds the $2 billion to $3 billion in additional revenue that the goods and services tax (GST) hikes of 2023 and 2024 were meant to generate.
In addition, corporate tax collections are also expected to rise for FY2027, he said.
“There will be significant public interest in how these surpluses are ultimately deployed, especially given the pressures of an ageing population and the persistent concern over inequality,” said Mr Singh.
Mr Singh (Aljunied GRC) also called for more accountability on the outcomes of previous Budget announcements, such as the $40 billion Forward Singapore package
This package was intended to strengthen Singapore’s social safety nets. But there has been no well-publicised tracking of cumulative spending since then, he said.
He pointed out that $37 billion was recently committed
“Yet there was no comprehensive report on how the previous $25 billion was used – how many jobs were created for Singaporeans, where outcomes met their objectives, where they fell short, or even whether it is simply too early to tell,” Mr Singh said.
“The Government should be conscious of the public cynicism and detachment that grows when Singaporeans cannot see a clear accounting of how public funds are being used and communicated, for ease of understanding and what results have been achieved,” he said.
WP MP Gerald Giam (Aljunied GRC) noted that the Government points to the volatility of tax revenue as a reason for the gap between estimated and revised figures, but said this consistent underestimation raises questions of whether the Government is “unnecessarily hoarding funds”.
He also asked about the Government’s tax strategy, especially its decision to raise the GST rate in 2023 and 2024
“Unnecessary taxation drains liquidity from households up front, creating a dependency on government handouts rather than fostering genuine financial independence,” he said.
Mr Giam added that true prudence is not just about amassing “vast fiscal buffers”, but about balancing future security with Singaporeans’ current needs.
PAP MPs say surpluses are necessary buffers
Several PAP MPs defended the Government’s fiscal strategy, saying that Singapore’s surpluses help it navigate a volatile world.
“Our buffers are not excesses – they are strategic insurance, they safeguard our sovereignty, resilience and freedom of action,” said Mr Yip Hon Weng (Yio Chu Kang).
He added that fiscal resilience is a “strategic capability”, saying: “It ensures we are not forced into decisions by constraint. It preserves our strategic autonomy when circumstances demand it.”
Mr Alex Yam (Marsiling-Yew Tee GRC) also said such surpluses give Singapore more “ammunition” to face an uncertain world.
“When the world is uncertain, when great power rivalry intensifies, when supply chains and financial systems can shift overnight, a surplus is not a luxury – it is insurance,” Mr Yam said in Mandarin.
“If the next storm arrives, we will not need to borrow in haste, raise taxes suddenly or cut social support,” he added.
Distribute surpluses, give households assurance, say MPs
Other MPs suggested that Budget surpluses be distributed to Singaporeans.
For example, CDC vouchers can be repositioned as a social dividend as they play a useful role in the social support system and “can be sized according to need”, said Nominated MP and public policy academic Terence Ho.
The Government can determine the size of the dividend each year depending on prevailing fiscal and economic conditions, he added.
“For instance, more can be given when inflation is high and cost of living pressures are elevated, and when more fiscal resources are available,” he said, adding that an annual sum given to citizens signifies that they have a stake in the country and its collective wealth.
Mr Shawn Loh (Jalan Besar GRC) also suggested that any fiscal surpluses above 2 per cent of GDP should be given back to Singaporeans in the following year.
This could be done by giving out extra CDC vouchers, making universal CPF top-ups, or having rebates for services such as transport and utilities, he said.
“We should assure Singaporeans that when Singapore does well, all Singaporeans will benefit,” he added.
Mr Yip also suggested that the Government can signal stability by avoiding further tax increases in the near term.
“I recognise that the Government will, when necessary, need to raise revenue, but where new measures are introduced, they should be calibrated carefully and remain progressive,” he said.
He added: “Revenue adjustments should be designed with cost pressures firmly in mind.”
