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.

SINGAPORE: Rebates for scrapping cars before 10 years will be reduced and the cap lowered, given the growing prevalence of electric vehicles (EVs), Prime Minister Lawrence Wong announced on Thursday (Feb 12).

The government provides a Preferential Additional Registration Fee (PARF) rebate for cars that are deregistered before their 10th year. This will be reduced by 45 percentage points.

The current cap of S$60,000 (US$47,590) will also be cut to S$30,000. 

This will apply to all cars registered in the next Certificate of Entitlement (COE) exercise, which begins on Feb 16.

Mr Wong made the announcement in the Budget statement on Thursday. 

He said: “Electric vehicles are less pollutive than conventional petrol cars. As EVs become more common, the need to encourage early deregistration through the PARF rebate is reduced.”

EVs made up 45 per cent of new car registrations and 7.4 per cent of the overall car population in Singapore in 2025, up from 34 per cent and 4 per cent respectively in 2024.

HOW ARE THE NUMBERS CRUNCHED?

When a car is registered in Singapore, drivers have to pay an Additional Registration Fee (ARF), which is a percentage of the vehicle’s open market value.

The PARF rebate is calculated as a percentage of the ARF paid and tiered based on the age of the vehicle at deregistration.

For instance, a car that is currently deregistered before it is five years old will get 75 per cent of the ARF paid.

Under the revised rebate amount, that will be 30 per cent.

Cars of more than 10 years have no PARF value. 

The Land Transport Authority (LTA) on Thursday gave the example of a car with an open market value of S$100,000.

Under the existing structure, the ARF paid is S$200,000. If the car is deregistered between five and six years old, the PARF is currently 70 per cent of the ARF, or S$140,000 - but the cap means the owner gets S$60,000.

Under the revised structure, the PARF is 25 per cent, or S$50,000 - but the new cap means the owner gets S$30,000.

For cars that do not need a COE for registration, such as taxis, the revised PARF rebate schedule and cap of S$30,000 will apply to those that are registered on or after Feb 13.

The revised PARF rebate schedule and cap do not apply to vehicles that are not eligible for PARF rebates, such as classic and vintage cars, as well as vehicles that have been laid-up.

SINGAPORE: The government will raise tobacco excise duty by 20 per cent across all tobacco products with effect from Thursday (Feb 12) to discourage smoking, Prime Minister Lawrence Wong said in his Budget 2026 speech.

Excise duty is levied on goods manufactured in or imported into Singapore.

Duties on cigars, such as cheroots, cigarillos, cigarettes and other manufactured tobacco products will rise from 49.1 cents (US$0.39) per stick to 58.9 cents per stick.

Duties on other smokeless tobacco and beedies will increase from S$378 per kg to S$454 per kg.

Duties on unmanufactured and cut tobacco, as well as other tobacco refuse products, will rise from S$446 per kg to S$535 per kg.

The excise duty on tobacco products has been progressively raised over the years, by 10 per cent in 2018 and by 15 per cent in 2023.

Measures aimed at discouraging tobacco use have also been rolled out over the years, including mandating standardised packaging and enhanced graphic health warnings for all tobacco sold in Singapore.

Since July 2022, smoking has been prohibited in all public parks, selected water sites and 10 recreational beaches.

Singapore's smoking rate has been falling over the years.

According to the National Population Health Survey 2024 conducted by the Ministry of Health, 8.8 per cent of Singapore residents smoked daily in 2023. This fell to 8.4 per cent in 2024, reaching an all-time low.

SINGAPORE: Budget season is here again.

Against a backdrop of global uncertainty and what Prime Minister Lawrence Wong described as a more fragmented and dangerous world, this year's Budget focused on strengthening Singapore's resilience while supporting workers and households.

From cash payouts to CPF changes and free access to AI tools, here are seven key takeaways from this year’s Budget.

A CASH PAYOUT – AND MORE CDC VOUCHERS

There's another round of support for households.

Singaporean adults earning up to S$100,000 (US$79,000) in assessable income, and who do not own more than one property, will receive a one-off cost-of-living cash payment of between S$200 and S$400.

The payout will be disbursed in September and is expected to benefit about 2.4 million people.

Eligible HDB households will also receive enhanced U-Save rebates. For the 2026 financial year, they will get 1.5 times the usual amount – up to S$570 – to help offset utilities bills.

And yes, more CDC vouchers are coming.

All Singaporean households will receive S$500 in CDC vouchers in January 2027, half of which can be used at participating supermarkets and the rest at participating heartland merchants and hawkers. They will be valid until Dec 31, 2027.

MORE CHILD LIFESG CREDITS

Families with young children are getting a boost, too.

In July, families will receive S$500 in Child LifeSG credits for each Singaporean child aged 12 and below. For babies born in 2026, the credits will be given out in April next year.

The credits can be accessed via the LifeSG app and used at physical and online merchants that accept PayNow UEN QR or NETS QR.

They can help with everyday expenses like groceries, utilities and pharmacy items – the sort of regular costs that add up.

A NEW CPF INVESTMENT OPTION

If you’ve ever looked at your CPF and wondered how to grow it – but don’t want to actively manage investments – a new option is coming.

From 2028, the CPF Board will introduce a new voluntary scheme offering low-cost, diversified life-cycle investment products.

These products automatically adjust the investment mix over time, shifting towards less risky assets as members approach a target date, such as retirement.

The CPF Board will work with two to three selected providers, keeping choices simple rather than overwhelming.

HIGHER SALARY THRESHOLDS FOR EP, S PASS HOLDERS

Minimum qualifying salaries for Employment Pass (EP) and S Pass holders will be raised.

From January next year, the minimum qualifying salary for EP holders will be raised from S$5,600 to S$6,000. In the financial services sector, which has higher salary norms, it will rise from S$6,200 to S$6,600.

For S Pass holders, the minimum will go up from S$3,300 to S$3,600. In financial services, it will increase to S$4,000.

These changes apply to new applications from Jan 1, and to renewal applications from Jan 1, 2028.

FREE ACCESS TO PREMIUM AI TOOLS

Singaporeans who take up selected AI training courses will get six months of free access to premium AI tools.

The idea is simple: Learning should translate into practice. Since advanced AI models typically require paid subscriptions, this gives people the chance to experiment and apply what they’ve picked up.

INCREASE IN TOBACCO EXCISE DUTY

Smokers will pay more for cigarettes.

All tobacco products will be hit with a 20 per cent increase in excise duty starting Feb 12.

This is part of the government’s efforts to discourage the consumption of such products. 

LESS REBATES FOR SCRAPPING CARS EARLIER

Car owners will receive lower rebates when they deregister their vehicles, as the Preferential Additional Registration Fee (PARF) rebate will be reduced by 45 percentage points.

PARF was introduced to encourage people to replace older cars earlier, helping to reduce emissions. 

However, with electric vehicles becoming more common, Mr Wong said there is now less need to encourage people to deregister their cars earlier. 

The maximum rebate you will receive will also be reduced from S$60,000 to S$30,000.

The changes apply to new cars registered with Certificate of Entitlement (COEs) from the next bidding exercise, which begins on Feb 16. 

SINGAPORE: Singapore’s budget surplus for the 2025 financial year is now expected to come in at S$15.1 billion (US$12 billion), more than double the earlier estimate of S$6.8 billion.

Prime Minister and Finance Minister Lawrence Wong said in his Budget speech on Thursday (Feb 12) that the stronger position was partly driven by better-than-expected economic performance, highlighting the increase in corporate income tax collections. 

The revised operating revenue for the financial year 2025 is S$130.9 billion, about 6.6 per cent higher than previous estimates.

Corporate income tax collections, a key contributor, were revised up to S$35.2 billion, about S$2.6 billion more than initially expected.

“Based on the latest estimates, we expect corporate income tax collections to increase further in (the financial year) 2025,” said Mr Wong. The financial year 2025 ends on Mar 31, 2026.

Asset-related revenue collections were also higher than expected, driven by strong demand for private vehicles and properties, he said.

The government collected S$8.7 billion in Certificate of Entitlement (COE) premiums - around S$2 billion more than anticipated. Stamp duty collections were also revised upwards.

Total expenditure was slightly higher than expected, at S$124.5 billion.

Higher development spending by the Ministry of Transport - mainly for rail development and expansion - contributed to the increase. 

Expenditure by the Ministry of Home Affairs also rose, while the Ministry of Health and the Ministry of Trade and Industry (MTI) spent less than expected.

Taking into account ministry expenditure, special transfers and factoring in the impact of the Significant Infrastructure Government Loan Act, the revised size of the Budget for 2025 is S$143.3 billion, or 17.9 per cent of GDP.

FINANCIAL YEAR 2026 IN NUMBERS

For the 2026 financial year, the government expects the size of the Budget to increase to S$154.7 billion, an increase of 8 per cent from the revised figure for 2025.

Ministry expenditure is expected to reach S$137.3 billion, up 10.3 per cent from 2025’s spending.

The largest increase is expected to come from MTI, which will see development expenditure jump S$4.3 billion to hit S$9.2 billion. This is mainly due to initiatives to enhance Singapore’s economic competitiveness in an uncertain global environment.

Operating expenditure for the Ministry of Health is also expected to increase S$1.6 billion to S$20 billion, because of higher grants to public healthcare institutions and enhancements to long-term care subsidies and schemes.

On the revenue side, operating revenue is projected to grow to S$134.8 billion, an increase of 3 per cent from the revised 2025 figure.

The Ministry of Finance said this is due to higher collections expected from corporate income tax, personal income tax, goods and services tax, COE premiums and motor vehicle taxes.

Corporate income tax collections are expected to increase by S$2.5 billion due to strong economic growth last year.

The net investment returns contribution (NIRC) is expected to bring in S$28.5 billion - S$0.95 billion higher than the revised 2025 figure.

Overall, the fiscal position for the financial year 2026 is estimated to be S$8.5 billion, smaller than the surplus reported for 2025.

SPENDING NEEDS SET TO GROW

Looking ahead, Mr Wong said Singapore’s public finances remain sound despite growing needs.

On the revenue side, corporate tax revenues are expected to rise further from FY2027 when Singapore implements the 15 per cent minimum effective tax rate for large multinational enterprises under the global BEPS framework, or Base Erosion and Profit Shifting.

At the same time, expenditure is set to increase across several fronts.

More will be spent on security and external relations, including strengthening overseas partnerships and building capabilities to keep Singapore safe.

Economic spending is likely to remain elevated as the government updates its investment promotion tools to stay competitive.

Social spending will also increase to strengthen support for families, boost social mobility and enhance retirement adequacy.

The government will manage the increase in revenues and expenditure carefully, ensuring that spending is supported by collections, to maintain a balanced budget in the medium term.

“Our sound public finances give us the ability to act decisively and to invest where it matters most,” said Mr Wong. 

Many other countries are constrained by debt and deficit pressures, and are forced into difficult trade-offs, but Singapore begins this term of government on a firm fiscal footing, he said.

“We are therefore able to invest meaningfully and responsibly in policies and programmes that benefit all Singaporeans – now and in the years ahead.”

SINGAPORE: A new S$50 million SG Partnerships Fund will be launched to support ground-up initiatives and help them build sustained capabilities and impact, Prime Minister and Finance Minister Lawrence Wong announced on Thursday (Feb 12).

The fund will provide differentiated tiers of funding over varying time frames, including grants of up to S$1 million (US$790,000) for larger, multi-year projects, said Mr Wong in his Budget 2026 speech.

The move follows feedback on enhancing the existing Our Singapore Fund, which since 2016 has supported more than 800 projects spanning community-building, sports, and municipal and digital readiness initiatives. Last year alone, it received over 250 applications.

"We have heard feedback on how the fund can be improved – including the need for larger grant amounts, longer funding horizons and broader eligibility," said Mr Wong.

He cited the example of a fire safety awareness initiative by two siblings – seven-year-old Kaizen and nine-year-old Kay – who designed a poster and worked with Nee Soon Town Council to display it at HDB lift lobbies. They also organised a visit to Yishun Fire Station with other children and their families, where they presented care packs and handmade gifts to officers on duty.

“It's a wonderful example that shows anyone, no matter how young, can step up to make a difference,” Mr Wong said.

The next round of Youth Panels will also be launched later this year, giving young Singaporeans further opportunities to work with the government on issues that matter to them. More details will be shared by Acting Minister for Culture, Community and Youth David Neo during his ministry’s Budget debate.

EXTENSION OF 250% TAX DEDUCTIONS

Separately, individuals and businesses will continue to receive 250 per cent tax deductions for qualifying donations to Institutions of a Public Character (IPCs) until the end of 2029.

The enhanced deduction scheme, first introduced in 2009, had been due to expire at the end of this year.

The Corporate Volunteer Scheme, which offers 250 per cent tax deductions when employees volunteer or are seconded to IPCs, will likewise be extended until end-2029.

Mr Wong said that “giving, volunteering and everyday acts of kindness” showcase Singaporeans’ efforts in nurturing a strong sense of solidarity.

“These actions break down barriers, draw us closer and remind us that we are all in this together. They form the foundation of a ‘We First’ society,” he said.

Beyond financial donations, volunteering time and skills is equally important, he added.

“This spirit of giving can be strengthened when companies make it easier for their employees to serve the community,” he said.

BOOST FOR CULTURE, HERITAGE AND SPORT

Mr Wong said Singapore’s greatest strength lies not just in its policies and plans, but in the spirit of its people.

“Time and again, we have defied the odds – not by chance, but by standing together as one people, especially in our most testing moments, whether it be separation or financial crises or the current geopolitical uncertainties,” he said.

As other societies become more divided, Singapore must continue investing in the bonds that unite its people, he added.

The arts and heritage sector plays a vital role in this effort. “Our cultural and heritage institutions embody this approach – celebrating the richness of each community, while expressing our distinctive Singaporean identity,” said Mr Wong.

“Multiculturalism is a defining part of our identity. We cherish and embrace our distinct cultural traditions and heritage, even as we continue to build common ground and a shared identity that unites us as Singaporeans.”

The revamped Malay Heritage Centre will reopen later this year, and the government will work with the Singapore Chinese Cultural Centre to expand its reach and engagement. The Indian Heritage Centre, which just marked its 10th anniversary, will also receive further support to enhance its outreach and programming, he said.

Sport is another unifying force, Mr Wong said. “Through sport, we learn resilience, teamwork, and the determination to press on even when the odds are stacked against us,” he said.

The Sports Facilities Master Plan will continue to be rolled out, with new facilities opening in Punggol, Toa Payoh, Farrer Park and Tengah, alongside revamped sports centres in Hougang and Queenstown.

The Dual-Use Scheme, which allows the public to access sports facilities in schools, will be expanded. More inclusive sports programming will also be introduced to encourage participation across ages and abilities.

SINGAPORE: A Cost-of-Living special payment of between S$200 (US$158) and S$400 will be given to eligible Singaporeans, along with S$500 in Community Development Council (CDC) vouchers to help with living expenses, Prime Minister Lawrence Wong said on Thursday (Feb 12).

"The government will continue to do whatever is necessary to help Singaporeans manage cost pressures - for as long as it is needed," Mr Wong said in his Budget 2026 speech.

“Although inflation has eased in recent years, we know that many Singaporeans still face anxieties and pressures.”

The Cost-of-Living special payment is a one-off cash payout for Singaporeans aged 21 and above in 2026, who earn up to S$100,000 in assessable income and who do not own more than one property. They must also reside in Singapore. 

The amount received will be determined by assessable income and the annual value of their residence.

The special payment scheme is expected to benefit around 2.4 million Singaporeans, with payments to be disbursed in September.

CDC vouchers, which will be split equally for spending at participating hawkers, heartland merchants and supermarkets, will be disbursed in January 2027 and will be valid until the end of that year.

The vouchers will benefit about 1.4 million Singaporean households.

The CDC Vouchers Scheme was launched in June 2020 and January 2021 to help lower-income households defray their cost of living, and to support hawkers and heartland merchants affected by the COVID-19 pandemic.

Since Budget 2021, the vouchers have been given out every year and to all Singaporean households. 

In the last three tranches, households received S$300 in January 2025, S$500 in May 2025 and S$300 in January 2026. The latest vouchers this year will expire on Dec 31, 2026.

ADDITIONAL REBATES

Eligible Singaporean households living in Housing and Development Board (HDB) flats and whose members do not own more than one property, will receive 1.5 times the amount of regular GST Voucher (GSTV)-U-Save in the 2026 financial year. 

The additional U-Save will help households with their utility expenses and cushion the impact of higher utility bills due to an increase in the carbon tax, the Ministry of Finance said. 

In total, eligible HDB households will receive up to S$570 in U-Save rebates in the 2026 financial year.

This will cover about five months of utility expenses for those living in one- and two-room flats, and about two months of utility expenses for those living in three- or four-room flats.

If the flat is partially rented out or not rented out, there must be at least one Singaporean owner or occupier in the household to be eligible for U-Save. For flats that are entirely rented out, there must be at least one Singaporean tenant. 

The Budget 2026 U-Save and regular GSTV-U-Save will benefit more than 1 million Singaporean households.

Budget 2026 U-Save will be credited to eligible households' utilities accounts with SP Services together with the regular GSTV-U-Save in April 2026 and July 2026.

Mr Wong said that the government will continue to review and enhance the social support system across housing, education, healthcare and retirement, and for different groups of people.

“We will keep working at this, steadily and responsibly, so that Singapore remains an inclusive and united society, and a place that we are all proud to call home,” said the prime minister.

SINGAPORE: Singapore will maintain its current defence budget at 3 per cent of gross domestic product, but this could change if circumstances call for it, Prime Minister Lawrence Wong said on Thursday (Feb 12).

Delivering this year’s national budget, Mr Wong, who is also Finance Minister, said sustaining investments in security is critical amid a more fragmented and dangerous world.

“For now, we expect to keep defence spending at around 3 per cent of GDP. But we are prepared to spend more if the need arises,” he said.

He added that national security extends beyond the Ministry of Defence and includes investments in the protection of critical infrastructure and the work of the Home Team.

“Taken together, we expect overall security-related expenditures to rise in the coming years – to keep Singapore safe and secure in a far more complex threat environment.”

RISING SECURITY RISKS

Mr Wong said the world has become more dangerous in recent years. In 2024, there were 61 state-based armed conflicts worldwide – the highest number recorded since World War II, he said.

“These conflicts are not confined to distant regions. Closer to home, we witnessed one of the most serious armed clashes involving ASEAN member states in years,” said Mr Wong, citing the Thailand-Cambodia military confrontation.

Calling these developments “deeply troubling”, Mr Wong said they reflect a “shrinking space for negotiation, a greater willingness to use force, and a higher risk of miscalculation, with consequences that can easily spill across borders”.

He reiterated that no one will come to Singapore’s rescue in a crisis and that the country is responsible for its own defence and survival.

Recent conflicts have underscored how the nature of warfare is changing, particularly with the widespread use of unmanned systems, he said. Drones are now used not only for surveillance, but also for precision strikes, electronic warfare and coordinated operations.

“We will study these developments carefully and invest decisively in capabilities that are essential to Singapore's defence. This includes strengthening our ability to deploy, counter, and operate alongside unmanned systems across all domains,” said Mr Wong.

The digital domain has also become increasingly contested, with a sharp rise in cyberattacks by state-sponsored and non-state actors. These range from scams targeting individuals to highly sophisticated attacks on critical information systems.

“Singapore is an attractive target. We have faced attacks from malicious cyber actors, including hostile information campaigns and deliberate attempts to undermine our national security,” said the prime minister.

Singapore has strengthened its defences over the years by establishing agencies such as the Cyber Security Agency, the Home Team Science and Technology Agency and the SAF’s Digital and Intelligence Service, he said.

“But the threat landscape continues to evolve, with attacks becoming more frequent, more coordinated and more sophisticated,” he said.

“We will therefore continue to strengthen our cybersecurity posture by deepening capabilities, improving coordination across agencies and better safeguarding our most critical systems.”

"A TIME OF PROFOUND GLOBAL CHANGE"

In what was his first Budget speech for the current term of government, Mr Wong said Singapore is entering its post-SG60 phase "at a time of profound global change".

He said the international order that had underpinned global stability and economic cooperation for nearly eight decades is weakening.

“It underwrote global security, championed open markets, and helped form the institutions and rules that enabled shared prosperity across the world – including here in Asia. That era has now come to an end.”

The US is reassessing and undoing part of that system, setting aside trade rules and bypassing global institutions, making long-standing norms less reliable, said Mr Wong. This has weakened the multilateral system and driven more states towards unilateral action.

The guardrails that once helped manage disputes and tensions are also eroding, leading to a more contested, fragmented and dangerous world, said Mr Wong.

While last year’s US Liberation Day tariffs were expected to trigger a sharp global slowdown, Mr Wong said “our worst fears did not materialise” as firms adjusted quickly by front-loading production and imports.

The impact of the tariffs was also reduced by subsequent trade deals and shifts in global supply chains, he said. Growth in the major economies held up, supported in part by strong investment in Al-related activities.

“In short, despite mounting stresses, the global economy proved more resilient than anticipated, and the international system continued to function,” said Mr Wong.

“This year, however, we may not be so fortunate. Events in just the first month of 2026 have already been of exceptional scale and consequence. They have increased geopolitical tensions worldwide.

“As pressures build and the margin for error narrows, the resilience of the global system will be tested far more severely.”

WEAKENING OF GLOBAL ECONOMY

Mr Wong also pointed to “clear and growing signs of fragility in the global economy”.

“Rising public debt in many major economies will strain financial stability, and weigh on longer-term growth prospects. At the same time, heightened risk-taking in financial markets has pushed up asset valuations, leaving them vulnerable to abrupt corrections,” he said.

Such corrections could dampen confidence and spill over into real economic activity, he added.

These developments have direct implications for Singapore. Although the economy grew by a stronger-than-expected 5 per cent in 2025, a more moderate outlook is expected this year.

“Growth is therefore projected at 2 per cent to 4 per cent; with inflation at 1 per cent to 2 per cent,” he said.

Still, Mr Wong said Singapore can move forward with confidence.

“Over the decades, we have systematically strengthened our economic foundations – deepening capabilities, investing in our people, and reshaping our industries as technologies evolve,” he said.

“We have built a reputation as a reliable and trusted hub – stable, secure, and well-governed - qualities that businesses and investors have come to value highly, more so now than before, precisely because the world has become more fractured and uncertain.”

However, he cautioned against complacency. “In a profoundly changed world, standing still is not an option. We cannot wait for conditions to turn more favourable. Nor can we fall back on strategies designed for a previous era.”

Budget 2026 is therefore the first step in refreshing Singapore’s strategies and strengthening its social compact to secure the country’s future in a changed world, he added.

SINGAPORE: Lower-income families under the ComLink+ scheme will receive greater support, including more cash payouts, Prime Minister Lawrence Wong announced on Thursday (Feb 12).

Under enhancements to the ComLink+ Progress Packages, families who commit to working with family coaches and “take active steps to make progress” will receive S$500 (US$396) per quarter.

Families also stand to receive additional payouts when they make concrete progress in their goals of maintaining stable employment and good preschool attendance for their children.

A larger portion of the payouts will be given in cash, while continuing to set aside funds in their Central Provident Fund (CPF) accounts.

“This will help families meet immediate needs, while also building their longer-term financial security,” Mr Wong said.

With the enhancements, a ComLink+ family with two children can receive around S$10,000 per year in cash and CPF top-ups, while their children are in preschool.

The changes will take effect from the third quarter of this year.

ComLink+ Progress Packages provide financial top-ups to recognise and supplement the efforts of families who work with their family coaches and Family Service Centre case workers towards long-term goals in four key areas - preschool education, employment, debt clearance and saving for home ownership.

“These are more than financial assistance; they are a form of social contract where family coaches work with families to set clear goals – like securing a stable job, saving towards a home, or ensuring their children enrol in and attend preschool regularly,” said Mr Wong.

He added that the government will continue to help lower-income families, especially those with young children, move towards greater stability, self-reliance and social mobility.

SINGAPORE: Central Provident Fund (CPF) members will have the option of putting their funds into a new CPF life-cycle investment scheme when it is introduced in 2028.

The new scheme was announced by Prime Minister Lawrence Wong in the Budget 2026 statement on Thursday (Feb 12).

According to the Ministry of Manpower (MOM) and CPF Board, the scheme will offer simplified, low-cost and diversified life-cycle investment products.

Life-cycle investments automatically rebalance investors' portfolios towards less risky assets as they approach a target date, such as retirement age.

"Today, the CPF system provides stable, risk-free interest rates to help Singaporeans grow their savings for retirement," said MOM and the CPF Board in a joint press release.

The existing CPF Investment Scheme (CPFIS) gives members the option of investing CPF savings in a wide range of instruments.

The new scheme will complement the existing system by catering to long-term investors who are willing to take some risk, but may have less expertise in navigating the CPFIS offerings or prefer not to actively manage their investments, they said.

It is meant for investors who want to stay invested for the long term, such as 20 years, and ride out market cycles.

In his Budget speech, Mr Wong noted that some CPF members are prepared to take more risk to generate potentially higher returns.

“But experience shows that most people do not do well picking and trading individual stocks,” he said.

“For retail investors, a more sensible approach is broad and diversified exposure through low-cost funds.”

Even then, risks remain as some may invest when markets are high and retire during a downturn, when they need their savings most, said Mr Wong, who is also the finance minister.

He said this was why the CPF Advisory Panel earlier recommended the Lifetime Retirement Investment Scheme, which was accepted by the government in 2016.

Mr Wong said the government had studied the panel’s recommendation carefully.

“Currently, such life-cycle investment products are available in the market, but they have traditionally come with high fees,” he said.

“Rather than leave this entirely to the market, the government will help shape and develop such products under a new scheme for CPF members.”

He added that the government will strengthen efforts to help Singaporeans understand whether this option is suitable for them, particularly younger members with a long runway to retirement who can better ride out short-term market fluctuations.

HOW THE SCHEME WORKS

Participation in the new life-cycle investment scheme will be voluntary, like the CPFIS.

The CPF Board will work with two to three commercial product providers to offer curated options to simplify decision-making for investors.

“This is essentially a life-cycle investment approach, with a predefined glide path to retirement,” said Mr Wong.

“In other words, members take on more risk, with greater exposure to equities when they are younger, and their investments are automatically rebalanced towards safer assets as they approach retirement.”

The assets will be liquidated in phases by the target date, for example, when the investor turns 65 and becomes eligible for CPF payouts.

This is to calibrate the investment risk that CPF members are exposed to at different stages of life and mitigate the risk of exiting during a downturn.

Upon liquidation, the investment sale proceeds will be transferred to the CPF member’s Retirement Account up to the full retirement sum. Any remaining proceeds will be transferred to the Ordinary Account.

The funds in the Retirement Account can then be used to join the CPF Life annuity scheme when the member decides to start receiving monthly payouts, and can help boost the payouts.

All-in fees for the scheme, including total expense ratio fees, wrap fees and distribution costs, will be capped to keep costs low for investors.

From March, the CPF Board will engage the industry on the product specifications and invite expressions of interest. It will work with independent investment consultants to evaluate applications.

Selected providers are expected to be announced in the first half of 2027, and this will be followed by the scheme's launch in the first half of 2028.

In response to CNA's queries, the CPF Board said there will be no age limit for joining the scheme.

But those who are farther away from retirement are more likely to benefit from the higher potential returns of equity exposure in their younger years and their ability to ride out market cycles, it said.

On expected returns, the providers will be required to provide details that include illustrative returns matching the products' risk profiles.

“In general, potential returns on investments should be commensurate with the risk of the underlying assets,” said the CPF Board.

Asked how low adoption may affect the scheme, the board said investors can benefit from economies of scale as the CPF savings invested under this new scheme can tap on existing commercial underlying funds.

As for whether investors can opt out before the full investment term, the CPF Board said they are encouraged to stay invested for the longer term to benefit from the scheme.

WHY NOW?

Last month, Manpower Minister Tan See Leng said the ministry was in the final stages of studying how to further support CPF members' retirement planning with products that would "strike the right balance between risk and return".

MOM and the CPF Board said on Thursday that market developments have made it timely to introduce life-cycle investment products to CPF members.

"Technological advancements and the advent of digital investment platforms may enable commercial providers to offer these products at more affordable costs," they said.

"Based on market studies, life-cycle investment products show potential to achieve good returns over a long-term horizon, with increasing adoption of such products internationally in recent years."

MOM and the CPF Board reiterated that all investment products carry investment risk, and that returns are subject to market conditions.

They also added that while products under the new scheme will be provided and managed by commercial product providers, the government is prepared to provide "some time-limited support to kick-start the new scheme".

STRONGER RETIREMENT SUPPORT

Mr Wong also announced further steps to strengthen retirement support for Singaporeans.

There will be a CPF top-up of up to S$1,500 (US$1,200) for Singaporeans aged 50 and above who have CPF retirement savings below the basic retirement sum. Those with lower balances will receive larger top-ups.

Mr Wong also said that the government will proceed in 2027 with the next increase in CPF contribution rates for workers aged above 55 to 65.

The government previously announced in 2019 that CPF contribution rates would be raised gradually for workers aged above 55 to 70. The target rate has already been reached for workers aged above 65 to 70.

Workers who are above 55 to 60 currently have a CPF contribution rate of 34 per cent. This will rise to 35.5 per cent in 2027.

To do this, the employer’s contribution rate will increase by 0.5 percentage points to 16.5 per cent, and the employee’s contribution rate will increase by 1 percentage point to 19 per cent.

The target for this age group is to reach a CPF contribution rate of 37 per cent by around 2030.

Workers who are above 60 to 65 currently have a CPF contribution rate of 25 per cent. This will rise to 26 per cent in 2027, reaching the target for this age group.

This will be done by increasing both the employer’s and employee's contribution rates by 0.5 percentage points to 13 per cent.

Employers will get a one-year CPF Transition Offset to mitigate the rise in business costs. This will be equivalent to half of the 2027 increase in employer contribution rates for every Singaporean and permanent resident employee aged above 55 to 65.

Mr Wong also announced a S$400 million top-up to the Long-Term Care Support Fund for additional subsidies to cushion the impact of higher premiums under Careshield Life.

The national disability insurance scheme is providing higher payouts from 2026.

SINGAPORE: Families will receive an additional S$500 (US$396) in Child LifeSG credits for each Singaporean child aged 12 and below, Prime Minister Lawrence Wong announced on Thursday (Feb 12).

The move is part of a broader set of measures aimed at giving families “more support and greater assurance”, Mr Wong said during his Budget 2026 speech in parliament.

“Many young couples hope to become parents. We want to create the right conditions, so they feel confident and ready to start a family,” he said.

“The decision to get married and have children is deeply personal. But for those who wish to take the step, the government will do more to support them along the way.”

The credits will be accessible via the LifeSG application, and can be spent at physical or online merchants which accept payments via PayNow UEN QR or NETS QR.

The credits for children born between 2014 and 2025 will be disbursed in July this year. Disbursement for children born this year is scheduled for April 2027.

This marks the second consecutive Budget in which S$500 in Child LifeSG credits will be issued.

Last year, the credits were disbursed in July for children born between 2013 and 2024. Disbursement for children born in 2025 is scheduled for April this year.

MORE SUPPORT FOR PRESCHOOL AND STUDENT CARE

On Thursday, Mr Wong also announced that the monthly household income threshold for means-tested preschool subsidies will be raised to S$15,000, up from S$12,000. This will kick in from the start of next year.

Eligible parents, including those who previously qualified, can also receive more in infant care and childcare subsidies, he said.

To strengthen support for student care, the government will raise the monthly household income threshold for Student Care Fee Assistance from S$4,500 to S$6,500, allowing more families to qualify.

These enhancements are expected to benefit more than 60,000 families with children in preschools, as well as around 13,000 students and their families in student care centres registered with the Ministry of Social and Family Development.

The government has progressively expanded support for families in recent years.

At last year’s Budget, Mr Wong introduced the Large Families Scheme to support married couples who have or aspire to have three or more children. The scheme provides up to S$16,000 in additional benefits for every third or subsequent child born from Feb 18, 2025.

Then, it was also announced that Singaporean children aged 13 to 16 will get S$500 in top-ups to their Edusave accounts, while those aged 17 to 20 will get an additional S$500 in their Post-Secondary Education accounts.

“One of the biggest concerns for young couples is the cost of raising a family,” Mr Wong said on Thursday.

“Over successive Budgets, we have strengthened support to help parents manage these expenses.”