PM Wong's Budget 2026 in summary: AI, supporting workers, vouchers & helping businesses

Prime Minister and Minister for Finance Lawrence Wong delivered this year's budget statement in Parliament on Feb. 12, 2026.

Introducing the budget, PM Wong recognised that the U.S.-led multilateral order was now over and Singapore can neither rest on its laurels nor wait for things to get better if it is to continue to do well.

Budget 2026, which took into account the Economic Strategy Review's key recommendations, is the "first step" to secure our future in a changed world, he said.

So, here's what this first step, in the form of a S$154.69 billion budget, entails.

Growth, jobs and AI

"Our ambition is to secure growth at the higher end of the two per cent to three per cent range over the next decade," PM Wong said, adding that this growth must translate into good jobs and rising incomes.

At the core of the plan to realise this ambition is AI.

If harnessed well, AI will be a strategic advantage for Singapore and will help overcome structural constraints, such as an ageing population and a tight labour market, PM Wong explained.

"To do this, we must invest deliberately and with discipline," he said, adding that Singapore's advantage lies in deploying AI "effectively, responsibly and at speed."

To coordinate this national AI push, Singapore will now establish a new AI council, chaired by PM Wong himself.

National AI missions will be launched to drive AI-led transformations in advanced manufacturing, connectivity, finance and healthcare.

Business support schemes, such as the Enterprise Innovation Scheme and the Productivity Support Grant, will be expanded to include AI and AI-related activities.

Keen workers will get a redesigned SkillsFuture website to discover AI courses, and those who sign up for selected AI training courses will now get six months of free access to premium AI tools.

"Singapore will not be passive in the face of rapid changes around us. We will adapt. We will compete, and we will continue moving forward with confidence," PM Wong declared.

Vouchers

While Budget 2026 looks ahead and invests heavily in AI-driven transformation, it also acknowledges that cost-of-living pressures are not entirely in our rearview.

Eligible Singaporeans will receive S$200 to S$400 cash in a Cost-of-Living Special Payment in September 2026.

They will also receive up to S$570 in U-Save rebates in the 2026 financial year to help with utilities expenses.

In January 2027, all Singaporean households will receive S$500 in CDC vouchers.

Supporting families

Families and aspiring parents will continue to receive support from the government.

Singaporean children who are aged 12 and below in 2026 will receive S$500 in Child LifeSG credits.

The monthly household income eligibility threshold for preschool and student care subsidies will also be adjusted.

New investment option for CPF

Budget 2026 will also provide an option for Singaporeans to grow their CPF sums via a life-cycle investment product option.

CPF members who are aged 50 and above and have CPF retirement savings below the basic retirement sum will also receive a top-up of up to S$1,500.

SkillsFuture and Workforce Singapore to merge

To better help workers develop new skills and plan out their careers, SkillsFuture and Workforce Singapore will be merged into a new agency under the Ministry of Education and the Ministry of Manpower.

This new agency will be a one-stop shop for skills training, career guidance and job-matching services for workers and jobseekers.

This comes after the ESR committee recommended a review of how job and skills support is provided to workers.

Adjusting employment policies

Budget 2026 will also make adjustments to lower-wage worker support and employment policies.

The Local Qualifying Salary, which sets the minimum salary for local employees in firms that hire foreign workers, will be raised to S$1,800 from S$1,600.

The minimum qualifying salaries for new Employment Pass (EP) and S Pass applicants will also be raised.

Helping businesses

The Budget also endeavours to help start-ups flourish in Singapore, establish leadership in key growth sectors and help businesses expand abroad.

SMEs going international will now get up to 70 per cent of support on eligible costs, while non-SMEs will receive up to 50 per cent.

The Market Readiness Assistance grant will also be enhanced to support companies endeavouring to deepen activities in existing overseas markets.

S$37 billion will be invested under the Research, Innovation and Enterprise (RIE2030) plan.

Another S$1 billion will be set aside to enhance the Startup SG Equity, a government start-up co-investment scheme, and expand its scope to cover growth-stage companies.

Tobacco excise duty increase

A 20 per cent increase in tobacco excise duty was announced during the Budget statement, effective Feb. 12, 2026.

The Preferential Additional Registration Fee (PARF) rebate on PARF-eligible vehicles will also be reduced by 45 percentage points to account for the fact that electric vehicles, which are less pollutive, are becoming more common.

PARF rebates were introduced to encourage the early deregistration of old vehicles so that the vehicle pollution is safer and less polluting.

Singapore's security

Budget 2026 will continue to see defence spending remain at around three per cent of Singapore's GDP.

However, PM Wong noted that Singapore is prepared to spend more if needed, in the face of evolving threats and the nature of warfare.

'We First' society

In line with the government's "We First" ethos, Budget 2026 will continue to promote local culture and heritage and a culture of giving.

A S$50 million SG Partnerships Fund will be launched to catalyse ground-up initiatives.

Tax deductions of 250 per cent for qualifying donations and the Corporate Volunteer Scheme will also be extended until Dec. 31, 2029.

Nation-building not the work of a few: PM Wong

Wrapping up his Budget statement, PM Wong said that nation-building has "never been the work of a few, or of one generation alone."

"We must be active participants — looking out for one another, strengthening our social bonds, and contributing to a Singapore that belongs to all of us," he said, adding that this conviction underpins Budget 2026.

"It is a Budget to support Singaporeans today, prepare our society for tomorrow, and enable us to navigate this changed world with confidence," PM Wong concluded.

Top image via Mothership