Snap Insight: Budget 2026 offers some stability in a changed world

SINGAPORE: Singaporeans are no strangers to speeches that warn of uncertainty and external forces beyond our control, of choppy waters ahead or of dark clouds looming on the horizon. 

So when Prime Minister Lawrence Wong delivered his Budget 2026 speech in parliament on Thursday (Feb 12), against the backdrop of destabilising forces in the world, it was perhaps unsurprising that the Budget was itself unsurprising.

Mr Wong said that this was “the first step” in refreshing Singapore’s strategies as it looks to survive and thrive in an increasingly changed world.

To some observers, what Mr Wong laid out may look like a comparatively small step – with more in the way of extending and continuing existing policies and measures than sweeping changes.

BUDGETS DO NOT FUNCTION IN ISOLATION

Mercurial weather means the currents driving geopolitics and the global economy are unpredictable or unclear. This is not traditionally an environment that favours excessively bold moves.

It is also an established characteristic of Singapore’s national budgets that they do not function in isolation, year to year, but rather build one upon the other, to create consistency and stability for citizens, local businesses and foreign investors alike.

This was also the first Budget in this current term of government under Mr Wong, who is also Finance Minister, and his fourth-generation team of leaders.

Still, it mapped out clearly the government’s priorities in the year ahead.

STABILITY AND REASSURANCE

A familiar pattern emerges on closer look. 

An artificial intelligence (AI) revolution is poised to sweep across the world, but many still feel unsure about whether to see it an opportunity or a threat. The government announced a raft of measures that shows it recognises its role in helping Singapore and Singaporeans to ride the wave and deal with its effects.

These include national-level initiatives like the new National AI Council, to be chaired by Mr Wong, and a Champions of AI programme to support companies in their transformation beyond small-scale adoption. At the individual level, those who invest in taking up AI training courses will also gain access to premium AI tools.

In supporting businesses, a 40 per cent rebate on corporate income tax, capped at S$30,000, would help companies manage cost pressures and stay competitive.

To ensure Singaporeans “remain firmly at the centre of our workforce and our policies”, while still staying open to skills and expertise needed to strengthen the economy, Mr Wong also announced that minimum qualifying salaries for Employment Pass (EP) and S Pass holders will be raised.

Budget 2026 also mapped out how the government will continue to focus on the creation of good jobs and rising incomes for Singaporeans, which would be the concern for many facing what is expected to be a cautious hiring market in the coming year.

The continued provision of credits, rebates and CDC vouchers signalled an intention to ensure that households and citizens, especially the less privileged, would be provided with assistance to deal with the threat of rising costs and economic uncertainty.

TIME WILL TELL

As with all government policies, time will eventually tell if Budget 2026 is able to meet its objectives as events play out at home and abroad in the months ahead.

But what’s important is that the Budget is clear-eyed on the potential challenges ahead, and has concrete measures aimed at preparing Singapore and Singaporeans for them.

Taken in its entirety, this year’s Budget is justifiably cautious, given what Mr Wong describes as a “more fragmented and dangerous world”. 

But it also cleaves close to guiding policy principles that have served the country well in the past, even as the strategies change to address newly emerging threats and challenges.

It will hopefully form a stable anchor for Singapore in turbulent waters.

Nicholas Fang is founder and managing director of strategic consultancy Black Dot. He is a former journalist and Nominated Member of Parliament.