The big picture: Behind Singapore’s last 12 Budgets

Budget season is well underway in Singapore.

For many living here, the annual Budget is closely watched for what the Government is giving to people - whether in cash, credits, or targeted support schemes.

There are wider ramifications to how Singapore’s finances are spent beyond the individual, however.

These include how it supports its ageing population, the infrastructure developments planned and defence spend in light of an increasingly fractured global environment.

All this and more are set to come under the spotlight as Parliament debates Prime Minister Lawrence Wong's Budget 2026.

As lawmakers prepare to scrutinise the proposals, CNA TODAY examines the trends and patterns across the past decade of Budget reports.

Government spending almost doubled over the decade

Every year, a Budget is unveiled to provide an estimate of the government's planned expenditure for the fiscal year. The estimate is updated and revised a year later, with the actual spending tabulated after two years.

Singapore’s Budgets have gotten bigger in the past 12 years.

The estimated total spending of Budget 2026 was S$159.06 billion, comprising about S$137.3 billion in expenditure and $21.7 billion in special transfers.

This year’s Budget was larger than FY2020’s, when an unprecedented five budgets were unveiled and totalled S$137.2 billion as the nation battled the COVID-19 pandemic.

It is also more than twice as much as the S$77.8 billion spent in FY2015.

Beyond the macro-level look at overall spend, we zoomed in on key takeaways to see where our taxpayers’ money is going, and how the government is raising the funds needed for the increased expenditure.

Last year, Mr Wong announced S$2 billion worth of SG60 vouchers, and S$1 billion of further CDC vouchers to alleviate growing cost of living pressures.

The sum of special transfers to households and businesses – which comprise one-off payments such as cash vouchers, utility bill rebates and top-ups to savings accounts among others – increased for three consecutive years, from S$2.7 billion FY2022 to an estimated S$3.8 billion in FY2025.

In the past decade, FY2020 – when the COVID-19 pandemic was at its height – was the year in which the government spent the most on special transfers to households and businesses. The sum totalled S$33.5 billion that year.

Before Budget 2026 was announced, experts whom CNA TODAY spoke to said they expected the government to continue providing such support in the form of vouchers, but that this wouldn’t mean handouts will automatically grow larger or become a permanent spending component in each Budget.

Indeed, as it turned out, while special transfers to households and businesses for FY2026 remained significant at an estimated S$2.84 billion, the amount was smaller than in the previous Budget, reversing the trajectory of the past three years.

Social spending refers to money spent for the ministries responsible for:

• Health
• Education
• National development
• Social and family development
• Sustainability and the environment
• Culture, community and youth

Some portion of spending from the ministries of Manpower and Digital Development and Information fall under this category too.

Traditionally, social spending accounts for 40 to 50 per cent of the Budget, with a median of about 46.3 per cent since FY2002.

After a peak in FY2020 at 51.5 per cent due to COVID-19, it has remained stable and high – between 49.4 per cent and 49.6 per cent – for five consecutive Budgets, indicating a continued emphasis on social spending.

While remaining high in FY2026, social spending is making up about 47.9 per cent of the estimated total expenditure.

Given how Singapore's Budget has almost doubled in the past decade, this means that social spending has also increased accordingly.

In FY2015, spending on social development stood at S$31.3 billion.

Ten years on, revised estimated social spending for FY2025 was almost double that, at S$61.02 billion. Estimated social spending for this year is growing further to S$65.8 billion.

Within this, the largest sums of funds were allocated to the Health Ministry – S$20.4 billion in FY2025 (revised estimates) and S$22.5 billion for this financial year (estimated).

Experts agreed that the key driver underlying this growing spend is the need to care for Singapore's ageing population.

Recent years have seen large injections of funds that go into national initiatives like Age Well SG, which helps seniors age actively within their communities, and Healthier SG, which focuses on preventative health.

Singapore's ageing population will cause some shifts in taxes too.

As the base of working individuals here shrinks, there will be an increased reliance on other forms of revenue, such as taxes on wealth, said Mr Harvey Koenig, partner and co-head of BEPS COE, KPMG in Singapore.

In his Budget 2022 speech, Mr Wong stated that wealth taxes are an important part of our tax system.

On top of generating revenue, such taxes help reduce social inequalities and are needed to build a fairer society, he said.

That year, he introduced measures that could be considered "proxy wealth taxes", said Mr Ajay Kumar Sanganeria, partner and head of tax at KPMG in Singapore.

These were:

• Higher property tax rate
• Higher individual tax rate for top income earners
• New Additional Registration Fee tier for luxury cars

Budgets 2018 and 2023 also saw a significant increase in stamp duty rates, especially on higher-value residential properties.

Ten years ago during Budget 2016, then-Finance Minister Heng Swee Keat said productivity growth had remained "relatively flat" since 2013.

"We must keep working on this," he had said.

Fast forward to 2025 and productivity remained high on the agenda.

Mr Wong said in his Budget last year that increasing productivity, alongside economic growth, is the "best way" to adjust to the impact of rising prices.

He backed up his statement by announcing a S$3 billion top-up into the National Productivity Fund.

Top-ups and transfers into productivity-related funds are not new though, and have continued to grow, especially in recent years.

This pattern is consistent with a policy emphasis on human capital as a central driver of productivity growth, said Assistant Professor Chua Yeow Hwee of Nanyang Technological University.

"Higher spending from skills and lifelong learning funds reflects where implementation is taking place. Workforce transformation is delivered through continuous training and reskilling programmes, which naturally require more regular disbursements," he said.

Combined annual spending from the Skills Development Fund and the Lifelong Learning Endowment Fund continued growing and crossed the billion-dollar figure for the first time to S$1.33 billion (revised estimates) in 2025 and S$1.25 billion (estimated) this year.

Notably, expenditure from the National Productivity Fund jumped to S$3.98 billion last year (revised estimates) and S$3.02 billion (estimated) this year.

This jump came after Mr Wong announced in 2025 an expansion of the fund's purpose to drive investment in specific sectors in Singapore.

Explaining the significance of expanding the fund's scope, Asst Prof Chua said: "Productivity policy has broadened beyond traditional firm-level upgrading and training, to include frontier capabilities such as advanced technology adoption, artificial intelligence and strategic sector development."

Singapore has invested substantially in artificial intelligence (AI) over the past decade. As early as 2019, the nation launched a National AI strategy to deepen AI adoption across key sectors with an initial funding of over S$500 million.

But the initiatives outlined in Budget 2026 are the most significant yet, experts said, and signals just how seriously Singapore wants AI embedded into its economy.

These initiatives include:

• Providing 6 months of free access to premium AI tools for Singaporeans who take selected AI training courses
• Scaling Lorong AI – a dedicated co-working space that serves as a convening hub for the AI community – to a larger AI park at One-North.
• Expanding the Enterprise Innovation Scheme, which provides businesses with 400 per cent tax deductions on qualifying expenditures in activities like research and development, innovation, to include AI expenditures as a qualifying activity in Years of Assessment 2027 and 2028.* Expanding the Productivity Solutions Grant (PSG) to include a wider range of AI and AI-enabled tools.

Mr Kwek So Cheer, digital solutions partner at PwC Singapore, said the list of AI tools covered by grants like the PSG have to be refreshed regularly given the pace of technological advancement.

But moves such as providing free access to premium AI tools are a significant step towards accelerating the nation’s transition into an AI‑enabled economy, noted Ms Parul Munshi APAC Workforce Leader and Partner, PwC South East Asia Consulting.

“By giving Singaporeans hands‑on exposure to advanced models… they can practise, experiment and truly apply what they learn, becoming AI‑fluent rather than AI‑dependent,” she said.

"This is exactly the kind of practical capability building that will strengthen employability and position Singapore as a global testbed for responsible and efficient AI integration."

The government has sharpened its focus on the country’s green transition by pushing for net-zero initiatives, raising the carbon tax and investing in climate-resilient infrastructure, noted KPMG's Mr Sanganeria.

In fact, Singapore was the first Southeast Asian country to introduce a carbon tax in 2019.

That came after then-Prime Minister Lee Hsien Loong stressed the importance of the issue by calling climate change defences “life and death matters”.

Singapore subsequently announced a new coastal and flood protection fund to guard against rising sea levels in Budget 2020.

This fund was further expanded in 2025 with an additional S$5 billion top-up.

Additionally, in Budget 2022, the Government announced that it would issue S$35 billion in public sector green bonds by 2030 to fund core projects like water and waste treatment.

These measures are important as Singapore is particularly vulnerable to rising sea levels and other impacts of climate change, said Mr Koenig of KPMG.

He also said the government would do well to include progressive carbon taxes to reward decarbonisation, and establish performance-based pathways for large emitters, for example.

"It is crucial for the country to strengthen measures that promote climate resilience and advance the green transition."

In his Budget speech this year, Mr Wong described the carbon tax as "a key pillar" in Singapore's climate strategy, noting that it is already having an impact.

Moving forward, Singapore needs to calibrate its moves in order to be a responsible global citizen while not putting itself at a competitive disadvantage relative to other countries, he added.

Singapore will therefore assess its carbon tax trajectory carefully beyond 2027, said Mr Wong.