Singapore Budget 2026 sets record spending with national AI push and broader support package
Singapore will provide more support for firms to stay competitive and launch a nationwide push to tap artificial intelligence (AI), as Prime Minister Lawrence Wong laid out plans to navigate a more uncertain global environment in his Budget speech on Feb 12.
Unveiling a record S$154.7 billion Budget, Wong said the Government will refresh strategies to strengthen the economy while continuing to support households facing cost pressures. The Budget includes new measures for businesses, workers and students to build AI capabilities, alongside enhancements to schemes for lower-wage, mid-career and older workers, and additional payouts to lower-income families.
Government spending for the financial year is projected to be S$11.4 billion higher than the previous year and equivalent to 18.4 per cent of gross domestic product, moving closer to longer-term expectations of public spending reaching about 20 per cent of GDP by 2030.
Singapore Budget 2026 drives a national push to use AI
Wong devoted a major section of the Budget statement to positioning AI as a strategic advantage for Singapore, framing it as a key lever for productivity and competitiveness.
A National AI Council will be set up to steer adoption and deployment across the economy, with Wong chairing the body. Priority areas cited in the Budget include key sectors such as manufacturing, finance, connectivity and healthcare.
More support for firms to transform and stay competitive
The Budget includes fresh support to help companies redesign processes and jobs as they integrate AI into operations.
The Enterprise Innovation Scheme will be expanded to recognise qualifying AI-related expenditure for Years of Assessment 2027 and 2028, within a capped amount per year. The Productivity Solutions Grant will also be broadened to include a wider range of AI-enabled solutions, to help smaller firms adopt tools more quickly.
Wong said the Government’s approach will include targeted programmes to help businesses undertake end-to-end transformation, including changes to systems, processes and workforce skills.
Help for households and lower-income families amid cost pressures
Alongside the economic measures, the Budget sets out additional support for families and individuals.
Wong announced further enhancements to schemes for lower-wage and mid-career workers, as well as additional payouts to lower-income families. CDC vouchers were also included among measures aimed at easing day-to-day cost pressures for households.
Foreign worker policy updates tighten requirements and raise levies
Wong also announced changes to foreign worker policies, with the Government raising minimum qualifying salaries for skilled foreign workers and increasing levies for basic-skilled work permit holders in certain sectors.
From January 2027, the minimum qualifying salary for new Employment Pass applicants will rise to S$6,000, with a higher threshold for the financial services sector rising to S$6,600. The minimum qualifying salary for S Pass holders will also increase from January 2027.
For basic-skilled work permit holders, levies will rise in selected sectors, including the marine and process industries. Separately, the Local Qualifying Salary — which sets the minimum pay level for local employees in firms that hire foreign workers — will be raised to S$1,800 in 2026.
The Government said the adjustments are intended to keep Singaporeans at the centre of the workforce while Singapore remains open to skills and talent that strengthen the economy.
Budget size reflects rising spending needs and a shifting global outlook
Wong described the coming years as more volatile, citing heightened geopolitical tensions, cyber risks and climate-related uncertainties, and said Singapore must invest to remain resilient and competitive.
The Budget measures announced on Feb 12 will be implemented progressively across 2026 and 2027, with details to be issued by the respective agencies for each scheme and policy change
