Lawrence Wong
Singapore
“Sir, we will provide more information. I see the value of getting Ministries to put out more information, to share more about how their resources are being used and what outcomes they have achieved.”
“Sir, I agree fully with Mr Azhar that human capacity, human capital is critical. In fact, I would say the long-term potential of Singapore, how far we go really depends on us being able to maximise our human potential. That is key and that is why we have long invested in education. And it is not just about the investments.”
“Sir, we have been maintaining that commitment of 1% for some time now. I do not think it is about saying that we just have to do more and spend more. As many have highlighted, we want to ensure good outcomes from our R&D spending as well. So, we will continue if the outcomes are good.”
“This has never been the case. Temasek, when it started, was always very clear about its mandate from the very beginning – commercial, not doing national service, focused on commercial outcomes.”
“Sir, the MOF economists when they look at fiscal projections use Government's forecast of the economy, which is also published. We would typically use the mid-point of the range and then, of course, because these are in nominal terms, you have to factor for that. And the projections are done on those basis.”
“Sir, I was relieved that Mr Loh said he only has one question, but he asked the most difficult question. To answer the question, we will continue to monitor cost of living across all segments of society.”
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“Once you make the DRC for F&B looser, you can be sure there will be many F&B foreign workers in Singapore doing non-F&B jobs.”
“Once you make the DRC for F&B lower, you can be sure there will be many F&B foreign workers in Singapore doing non-F&B jobs. [Please refer to "Debate on Annual Budget Statement", Official Report, 26 February 2026, Vol 96, Issue 20, Budget section.] [(proc text) Written statement by Mr Lawrence Wong circulated with the leave of the Speaker, in accordance with Standing Order No 29(5). (proc text)] I wish to make the following factual correction to my reply given following the Round-Up Speech during the Debate on the Annual Budget Statement at the Sitting of 26 February 2026. My reply should read as follows:”
“Sir, the short answer is yes, we will certainly help our young seniors. We know that at that mid-career level if you are made redundant, getting back into the workforce can be more challenging. At that level, wage increases also may not be as high because there is a certain life-cycle to wages. Wage increases tend to be higher when you are younger and then, after a while, it starts to plateau off. So, they will face more pressure too. So, we are mindful. That is why we have already put in place schemes, like Level-Up for those above 40. And we will continue to see how we can strengthen support for mid-career, young seniors. And with the merger of SSG and WSG, I am sure we can do more. There are many, many good ideas put forward by Members for many different segments: young seniors, retirees, disadvantaged groups. We want to do more for everyone. I wish I had a wand, a magic solution that can solve every problem and take care of every group overnight. But the realities of life are not like that. Policies take time, new schemes take resources and importantly, let us be very mindful, we are able to talk about all of these things and all the good things we can do because our economy has done well, because we have good growth and now, we are in a position with the resources to act decisively. If these foundations are not present, we would be scrambling, we would be having a very different conversation. So, let us also be mindful of the fundamentals – keep growth, keep our economy growing, keep on ensuring a dynamic vibrant economy, good growth and generate the resources we need in order to take care of all the different segments of society. 2.57 pm”
“Sir, I was relieved that Mr Loh said he only has one question, but he asked the most difficult question. To answer the question, we will continue to monitor cost of living across all segments of society. We are very mindful that retirees will face potentially the biggest concerns because they do not have incomes, they will not benefit from wage increases and the cost-of-living pressures would be felt more acutely by this segment. And so our assurance to them is that we are watching out for them, we will take care of our retirees. But at the same time, we will also take care of all Singaporeans, to make sure that we help wages go up, we help retirees who do not have wage increases ease their cost pressures across different areas. And everyone, everyone in Singapore can truly benefit from the nation's progress.”
“Sir, I agree fully with Mr Azhar that human capacity, human capital is critical. In fact, I would say the long-term potential of Singapore, how far we go really depends on us being able to maximise our human potential. That is key and that is why we have long invested in education. And it is not just about the investments. It is about updating our system so that at the school and tertiary levels, we help prepare our students well for new industries of the future. But even that alone is not enough because, as Mr Azhar highlighted, the technology is changing so quickly. Whatever you have learned in school or from tertiary levels of education may very well need a refresh and an update a few years later after you graduate. And that is again why we are investing significantly in SkillsFuture and we have made it a key pillar in our social compact. So, we are mindful of all of these concerns – of the need to prepare our people well for the future and we will continue to invest heavily in every Singaporean.”
“Sir, the MOF economists when they look at fiscal projections use Government's forecast of the economy, which is also published. We would typically use the mid-point of the range and then, of course, because these are in nominal terms, you have to factor for that. And the projections are done on those basis. There is a well-defined methodology used by many governments to project revenue, which often are tied to incomes. There is a certain buoyancy estimate of how buoyant the revenue is when incomes rise so the GDP is the most critical assumption in many revenue projections. The estimates are what they are. Why have we seen more revenue upsides than downsides over the years? Perhaps, there is a simple explanation to this – which is that we have consistently performed better than expected. We should welcome that. [Applause.]”
“Sir, the concerns that the Member had raised on education are indeed on our agenda. In fact, many Members spoke about education during the debate. I did not really touch on it as a topic in the round-up speech, but we have this as one of the key items on our agenda for this term of Government, looking at how we can especially help disadvantaged groups level up in our education system, focusing on those with less resources, those with different start points, making sure that more support is given to them, but at the same time addressing the other concern too, which many Members spoke about – the concerns about high-stakes exams, the anxiety about the arms race that parents and students are feeling. So, that is on our agenda. That is something we are looking at. Other concerns that I think Members raised in this House during the debate, for example, around digital screen time – Ms He Ting Ru talked about that, others too. Access to social media for children, that is also on our agenda. So, there are things that we are reviewing. Like I said, I cannot cover every single topic in a Budget or in a round-up speech, but these are things and priorities that we are looking at and we will have future occasions to address them.”
“So, our approach, as Minister Indranee will share during the COS, will not – of course, marriage, procreation, parenthood within Singapore is important, but also other areas, like adoption, as well as immigration will come in as well.”
“Sir, on intermediaries, it is an area we are looking at. No easy answers now because when it comes to providing IT solutions that are AI-enabled, that is quite straightforward. But when you talk about intermediaries who truly understand what it means to transform an enterprise using AI, in fact, there are very few. I mentioned this in my Budget speech, even the leading companies are grappling with this and looking at ways to do this better. So, it is an area where we ourselves are looking to build capabilities and expertise and identifying experts who can help us and not just help us as in help the Government, but help the intermediaries within our economy, who can in turn help our businesses, especially our SMEs. Second, on jobless growth and the concerns that vulnerable groups may have. We are very mindful of these concerns. That is why we have progressively strengthened our social support system. We have put in place Jobseeker Support, we are strengthening SkillsFuture and we will continue to monitor this segment very closely and the impact that AI may have on vulnerable and disadvantaged workers, on seniors. We will continually review and strengthen our support mechanisms. Third, on the TFR and whether there are other ways in which we can encourage or we can maintain our Singaporean core, whether it is through adoption or immigration. Yes, indeed, we will have a multi-faceted approach. Mr Foo Cexiang gave a very good speech yesterday on adoption procedures and how it can be very complex and frustrating for parents who would like to adopt. I think it is something that certainly we would want to take a closer look at to see how we can streamline.”
“This has never been the case. Temasek, when it started, was always very clear about its mandate from the very beginning – commercial, not doing national service, focused on commercial outcomes. If there are things that the Government wants to do and Temasek thinks it is useful to do from a commercial point of view, then, yes, we can partner Temasek to do so. There are many instances even till today, including some of the equity funds which are done with a co-investment approach with Temasek, not because we forced Temasek to do these as national undertakings but because they see commercial value in growing enterprises and growing the enterprise ecosystem, and in achieving and securing better long-term returns for their portfolio. This has been consistently the approach from the start and that is the same approach we will continue with Temasek going forward.”
“Sir, as far as the outcomes of R&D are concerned, we track a whole range of outcomes. It is not just on the basis of a company getting IPO success. There are outcomes with regard to jobs created. There are outcomes with regard to the spillovers to local industries and the SMEs that support our MNEs doing research here. There are outcomes to the wider economy and incomes that are raised. There are outcomes with regards to business expenditure on R&D, which we have talked about just now. So, it is not just a narrow focus on a single measure of success but a wide range of different indicators. For the research part, mind you, which is also important because we do not only want commercialisation success, we also want to anchor strong basic research. That scientific base is important. It is also tracked with another set of different indicators, like publications, which we also track. So, there are a wider range of outcomes we track in terms of our R&D spending. That is why I said just now that the views that Mr Tiong had highlighted were rather one-sided. I do agree with Mr Tiong though, about what he said about the broad principle that sometimes the system can be risk-averse, that there are ways to do more in terms of value capture. There is no disagreement, in principle, in terms of that direction. We want to encourage more private innovation. We want to encourage more of an enterprise-building approach, in terms of how we grow our economy rather than just focus on specific individual grant schemes. There is scope to have less fragmentation. These are things we are already doing and will continue to do. On the question of an investment bank approach. Well, I would also disagree with him that this has changed with the chief executive officer in Temasek.”
“Sir, we have been maintaining that commitment of 1% for some time now. I do not think it is about saying that we just have to do more and spend more. As many have highlighted, we want to ensure good outcomes from our R&D spending as well. So, we will continue if the outcomes are good. If we are getting good results, we are able to get good projects, certainly, we will be prepared to put more into Government R&D. But we also do not just track what the Government spends. We want Government spending to catalyse more business R&D. So, the other measure, aside from GERD is BERD or the business expenditure on R&D, which is commonly tracked as well. And we are heartened that on the business side, private sector R&D in Singapore has also gone up, corresponding or together with Government spending on R&D. That bodes well for the future because that means that the private sector, too, is seeing the benefits of investing more in R&D and investing for the future.”
“Sir, I recognise the anxieties of our drivers. In fact, when I had the dialogue with union leaders, this was surfaced as well. The assurance I gave then and I give now is that we will manage this very carefully. We already have very close engagement with the unions and drivers, and as we introduce these new technologies, we will pace the transition in a way that ensures that we are also able to retrain workers if jobs are impacted and make sure that the transition and the introduction of technologies do not adversely impact our workers. We want workers to benefit from new technologies.”
“Sir, on the first question, yes, we give our assurance to all businesses. We are all in this together. Whatever uncertainty and volatility we may face, the Government will certainly be there to walk with our businesses and our workers to navigate the changes ahead of us. We are not out of the woods yet. The situation was better than expected last year, but there is new uncertainty now. And I think uncertainty and volatility will now be the norm anyway. So, we will continue to work closely with our businesses and workers, and also as part of our tripartite system. On the frontier industries and the fact that they are energy intensive, it is a cause for concern. I think Mr Dennis Tan had also spoken about this. We are trying our best to manage this and the solution for us at the end of the day is to accelerate our efforts on decarbonisation to be able to harness even more clean energy sources than the limited sources we have today. That is key. The new sources may not materialise in the short term. We are working on multiple fronts, including importing clean energy from outside Singapore, pursuing ideas like hydrogen, as well as civilian nuclear energy. But we are going full steam ahead on all of these areas so that we can find clean energy sources for ourselves that are reliable, sustainable, competitive, and that will help drive the industries of the future.”
“I would say we have always tried to be ambitious. We have pushed the boundary each time in terms of the moves we made. And in this coming review we will be even more ambitious. Can we set targets? Name me a country which has succeeded on a sustained basis. These are very complex. This is a trend that is happening around the world. It is not just about economics. If money can solve the problem, I will put the money down and solve the problem. But it is not just an economic issue, it is far more complex than that. Countries have spent far more than us and have not been able to achieve a meaningful, sustained improvement in their TFR. So, we will try. We are not giving up. We will be more ambitious. And Minister Indranee at the COS debate will share more about how we can try to engender a whole-of-society reset around marriage and procreation. We will give it our best efforts. [Applause.] Just a quick point that my colleague just highlighted to me when Mr Singh talked about the RIE reports and what have been published. In fact, someone alerted me that there are additional reports, beyond what Mr Singh had shared. At the office, the National Research Foundation has put out more information already. But in any case, as I said, our commitment, whatever the baseline is today, we will do more.”
“Sir, I thank Mr Chua for his clarification on the first point about the Government relying on one-off ad hoc measures. I hope we can banish this forever in this House. Because we do not rely only on one-off ad hoc measures. We have some, yes, 5% of the Budget. How is that an over reliance? We have much more allocation of resources on longer-term and structural schemes. And will there continue to be some one-off measures? Yes, we will, from time to time, it is not mutually exclusive. But the weight of our fiscal moves are really on the longer-term and structural schemes. The emphasis is in that direction. And it is not just a mindset issue, it is not just a policy issue. You can look at it from a resource issue: 95% allocated there; clearly, the emphasis is in these areas and the reviews will be done from time to time. As I mentioned just now, policy changes, policy reviews, take some time. We take in suggestions. Some suggestions we may not be able to do, and we explain our position, and there will be differences of views. But there will be suggestions which we think are good and we will consider them carefully. And in time to come, we will make the changes. For the suggestions that Mr Chua had put forward on personal income tax, we will take them, as I had mentioned to Mr Saktiandi, together with other suggestions that Members have given as part of our regular fiscal reviews. That also goes to timeline. The Occasional Paper that we are putting out will be done by next year, but the fiscal reviews that we do on the policy front, that happens on a regular basis. There is no specific timeline for this because we are always on a continuing basis, reviewing and updating our policies. On TFR and measures, will we be more ambitious?”
“Sir, as the Member has highlighted, returns to growth accrue to capital or labour. There is a lot of concern that with AI you will see a disproportionate shift of returns to capital, and labour will suffer. We are, as I said in my speech, I did not highlight that in such terms, but that is the risk we are very much alive to. And if the trends in the marketplace globally are moving in that direction, well, we will have to consider what additional levers, what steps to take, how we ensure that workers benefit from growth. That is our commitment. We will try our very best to have AI develop in such a way that is pro-worker that enhances human skills and expertise. And at the end of the day we will have levers also, through SkillsFuture, through transfers, through a whole range of different means, to make sure that growth in Singapore is balanced and Singaporeans will benefit. Not just capital owners, not just the companies that push out AI tools. Singaporeans will always benefit from growth in Singapore. On the question around our openness to using fiscal space and resources for growth, yes, of course we are. We will always want to grow the pie, because that is what our future is about. We have to be at the frontier. We have to keep on expanding the pie for all to benefit. Our investments in R&D are very much in that direction. With AI and all the moves we talked about in AI, we will also allocate more resources to pushing the frontier, so that we can continually expand opportunities, jobs and better incomes for Singaporeans.”
“Sir, as I have mentioned, in instances where the Government is a landlord or where we do have some control over rentals – hawker centres, HDB rentals, JTC rentals – we already do so and will continue to finetune our framework.”
“Sir, on the three questions. First, yes, we will provide the economic assumptions underpinning our fiscal projections. Second, on the climate transition, we will continue to provide more information on both our mitigation, as well as our adaptation plans, because we are moving on both. On the mitigation, it is really about pushing for decarbonisation and doing more in terms of clean energy, and there will be opportunities in due course to share more. On adaptation, it is really about protecting Singapore against rising sea levels, and we will also find opportunities to share more about these plans. We have already started to set aside resources for these two areas of work, which will require a lot of additional investments, so we are already setting aside funds for that. Thirdly, on the personal income tax thresholds, as I said just now, we will take on board these suggestions as part of our regular fiscal reviews. I would also just want to mention again, on the point that Assoc Prof Jamus Lim talked about rental. While I gave a macro picture about the overall rental rates, as I mentioned in my speech just now, I do recognise averages may not capture every single experience. There will be instances where rental renewals end up with sharp increases. We know that this happens, but the interventions and the way we help will have to take into account the different considerations. We do not think rental caps will work, but for example, if we understand better a particular situation where there has been very sharp increase in rental for that location, it could be a supply source shortage, there could be specific circumstances linked to that area. Then we will have to study and consider what appropriate interventions might work for such circumstances.”
“But as I mentioned, where there are ways in which we can extend some flexibilities to businesses, like on the source of workers, we will consider doing so.”
“Sir, on rentals, as I mentioned just now in my speech, at the macro level, we have not seen rental rates spiking up. In fact, as I mentioned just now, at the macro level, rental rates have moved in line with economic fundamentals – lower than GDP growth, lower than inflation rates. There may be localised issues, localised shortages, or a particular area, very popular, that kinds of things, these things can happen. I am not saying they do not. There will always be a distribution of rental increases. But overall, the situation remains stable, so we do not envisage imposing rental caps, particularly since at the macro level, the situation remains stable. In fact, the experiences of jurisdiction everywhere when they impose such rental caps has been not so positive. Because you end up with inadvertent consequences and you do not always achieve the objectives that you had wanted to do, which was to ensure competitive rentals. On foreign worker levies and DRCs for the F&B industry, they are part of services. The DRC is lower than construction, but we prefer not to carve out something separate for F&B, because it is really very hard to distinguish between F&B as a service and the other service industries. Once you make the DRC for F&B lower, you can be sure there will be many F&B foreign workers in Singapore doing non-F&B jobs. [Please refer to "Clarification by Prime Minister and Minister for Finance", Official Report, 26 February 2026, Vol 96, Issue 20, Correction By Written Statement section.] And it is very hard to monitor. It is very hard to enforce because they are all service-related. So, we rather keep services DRC as a whole, where it is.”
“So, the revenue upside is more assured, in terms of the domestic top-up tax, but at the same time, we are very likely to also have to spend more on the economic front to stay competitive.”
“Sir, we were more cautious in the initial years because there was no certainty how BEPS would evolve, and remember there was Pillar One and Pillar Two. Pillar One was targeted at jurisdictions like us, hub economies – where there was a move to shift profits away from hub economies. So, we were concerned about revenue loss under Pillar One. Pillar Two was about a minimum tax rate across the board. And that would give upsides to revenue, but we were not sure at that time whether Pillar Two would be implemented. Today, Pillar One has not taken off. So, the downside risk has come down, at least for now. It may be resurrected later on, but Pillar One has not been implemented. It is not on the agenda for now. Pillar Two has had broad-based consensus and therefore, jurisdiction after jurisdiction have been implementing their version of a domestic top-up tax, and we have too. That certainly will provide revenue upsides. But it does not change our broader assessment that even with the revenue upsides, we will have to spend more and we will have to find ways to strengthen our investment promotion toolkit, because notwithstanding the minimum corporate tax of 15%, which was supposed to give governments more negotiating power over the MNEs, the reality is MNEs still have considerable negotiating power. And governments everywhere want to attract these strategic investments to their own countries. And they are continuing, notwithstanding a minimum corporate tax of 15% to offer other generous incentives, which are considered BEPS-compliant. So, they are spending more, they are offering a whole range of different incentives to reshore or to attract strategic investments like that. That is what the competitive landscape is today. That is the reality of the competitive landscape.”
“Sir, we will provide more information. I see the value of getting Ministries to put out more information, to share more about how their resources are being used and what outcomes they have achieved. And so, as I have committed in this Budget, or in the speech just now, we are getting Ministries to do more, certainly in the area of RIE as well. More information and hopefully, that will encourage people, Singaporeans, to also look at the information and have a better understanding of what we have achieved. For example, in the debate just now, I heard Mr Kenneth Tiong talk about the outcomes of our R&D spending. We may have different views. I think that was rather one-sided, in talking about how poorly we have performed in terms of R&D spending and what outcomes we have achieved. But hopefully, with more information, we can have a more holistic appreciation of the various outcomes we have achieved. We are not complacent, we are always looking at ways to do better. We acknowledge that. But having the information to provide more informed debate is always something we would encourage.”
“They are the result of decades of hard choices made by generations of Singaporeans. This Budget builds on that strong foundation. It is a collective commitment that we will do what it takes to thrive in a more demanding world, that we will stand together when pressures mount and we will continue pushing forward to seize new opportunities on the horizon. The world may be more uncertain, but we are prepared. We are united. And together, we will shape our own destiny and secure a brighter future for every Singaporean. [Applause.] 2.01 pm”
“That sets out the key outcome indicators across major policy areas and allows the public to track our progress over time. We will continue to review the indicators in the report and ensure they are relevant and useful. It is not static. We continually look at refreshing and updating this document. Ministries on their own also conduct detailed reviews of major spending programmes to assess effectiveness and outcomes. I will ask all Ministries to provide clearer and more accessible information on major initiatives, so that Singaporeans can better understand how public resources are used and what results they achieve. Mr Speaker, let me conclude. I have outlined our strategies to secure our future together in this changed world. I thank Members of this House for your support for the direction we must now take. This next phase will not be easy. The economic headwinds remain. The geopolitical environment is becoming more contested. The major powers are competing more intensely. They may say they are not asking others to choose sides. But in reality, they are using the full range of tools – from economic leverage to regulatory controls and technology restrictions – to advance their interests. Others may be subtle – seeking to influence opinions, shape narratives, or even sow division among our people. We must be clear-eyed about these realities. But we have faced difficult external environments before. We have navigated uncertainty, preserved our sovereignty and independence, and emerged stronger because we remained one united people and acted with resolve. And we enter this new era with considerable strengths. A strong economy. A cohesive society. Sound public finances. These are not accidental achievements.”
“And in Singapore's case, revenue includes significant investment income from our reserves, not just taxes collected from businesses and households. So, if you exclude Net Investment Returns Contribution (NIRC), expenditure exceeds revenue. In other words, we are putting money back into the economy, not draining money from businesses and households. In fact, our Budgets in both 2025 and 2026 have been expansionary, with significant support for households and businesses. More importantly, we should look at who pays the tax and who benefits from the transfers. And on that score, the picture is clear. For every dollar of tax paid by the top quintile, they receive 20 cents in benefits. That is the top income quintile. Pay a dollar in tax, you get 20 cents in benefits. In contrast, the middle quintile receives around $2 in benefits. A dollar of tax, you can get back more, $2 in benefits. And the bottom quintile gets $7 in benefits. In other words, those who are better able to contribute, are the ones who generally pay more in taxes. We use that revenue to strengthen our social compact and provide greater support to those who need it most. Mr Speaker, our fiscal system is fair, progressive and sustainable. It is pro-worker, pro-enterprise and pro-Singapore. [Applause.] Let me conclude on a final point around accountability. I agree in-principle with the many comments and suggestions that Members have made, including Mr Pritam Singh, Dr Haresh Singaraju and Mr Yip Hon Weng, asking for more information to ensure fiscal accountability and value for money in Government spending. We want to do that. We want to ensure that. This is why we have been publishing the Singapore Public Sector Outcomes Review biennially since 2010.”
“But a word of caution is in order. Because in today's fast-changing world, assumptions can quickly become outdated. The forward projections serve as a guide and will have to be continually updated. Ultimately, what matters most is maintaining fiscal discipline, together with the agility and nimbleness to respond swiftly as circumstances change. Let me turn to specific points on our tax system. Ms Diana Pang asked about the timing of the changes to the Preferential Additional Registration Fee rebate. We implemented the vehicle tax changes immediately to prevent a rush-to-market. That has long been our practice for property and motor-vehicle-related taxes. The changes are announced and then applied immediately to ensure market stability and fairness. A number of questions has been raised on this particular issue, and the Ministry of Transport will address them separately. Mr Saktiandi and Mr Louis Chua shared their views on the personal income tax regime. When taken together with our progressive tax rates, tax reliefs and rebates, currently about one in three resident workers pay no personal income tax. Among those who do, about eight in 10 have an effective tax rate of less than 6%. We will consider these suggestions around the personal income tax as part of our regular fiscal reviews. There was a debate yesterday about what it means to run a fiscal surplus. Does a fiscal surplus mean that the Government is taking more from the economy and leaving households and businesses to bear a deficit? This is an oversimplified and inaccurate characterisation of how our fiscal system works. A surplus simply means that in a year, revenue exceeds expenditure.”
“We have also strengthened our national priorities by investing in our social support system – enhancing our connectivity, security and economic resilience. For this FY2026 Budget, expenditure is at 18.4% of GDP. As I said just now, it is the largest Budget on record. Earlier, MOF had projected that Government spending could reach 20% of GDP by 2030. But if you look at the trends, since emerging from COVID-19, expenditure has grown by an average of $10 billion every year. And we expect our needs to rise even more for the coming years, in this term of Government. So, Government spending is likely to exceed 20% of GDP well before 2030. In light of our fiscal position, Mr Shawn Loh had asked if the Government can commit to not making further major revenue moves. At this juncture, if circumstances remain broadly stable and without any further major revenue moves, we expect our fiscal position during this term of Government to remain healthy. We have already said that there will be no further GST increases until at least 2030. Aside from the GST, we continue to review our tax system regularly as part of prudent fiscal management. We will make revenue adjustments only when necessary – to fund structural spending needs or to achieve clear policy objectives like strengthening progressivity or addressing externalities. These are difficult decisions. Any tax change, I should say any tax increase, is a difficult decision. We take them only after careful study and full consideration of the impact on households and businesses. MOF had earlier published medium-term fiscal projections up to 2030. With updated revenue and expenditure developments, these projections will need to be refreshed. So, we will publish updated medium-term projections extending to 2035 by next year.”
“But it does not include cybersecurity spending beyond MINDEF. And we do need to spend more on cybersecurity outside of the MINDEF family. The Ministry of Digital Development and Information, and the Cyber Security Agency, for example, will have to invest more. We will have to harden our critical information infrastructure, like our grids and our power system, against cyber threats. That is why I said in the Budget that security spending will rise in the coming years. In short, our aim is not to run high surpluses for the rest of this term of Government, something that Mr Liang Eng Hwa asked about. Our objective is a balanced Budget over the term of Government. And that is clear from our historical records. Mr Xie Yao Quan very helpfully gave a speech yesterday outlining the historical data. And if you look at the past years, we have had balanced Budgets in many years – balanced meaning within a range of plus/minus 0.5% of GDP, in terms of the overall fiscal balance. We have had years of surpluses, we have had good years, but we have also had years of deficits. But on the whole, we plan for a balanced Budget over the term of Government. If there are revenue upsides, when there are revenue upsides, we will deploy these to meet our growing needs. Mr Shawn Loh suggested giving back surpluses above 2% of GDP to all Singaporeans. But in practice, we actually do not wait to cross a mechanical threshold like that. Whenever there are revenue upsides, we have shared some of the gains with Singaporeans. Last year, we used that to fund the SG60 package. This year, we channelled them towards CPF top-ups and the Cost-of-Living Special Payment.”
“We made the hard call and that is why we can act with confidence today. [Applause.] Next, let me turn to our medium-term revenue and expenditure outlook. We are expecting structural revenue increases from Financial Year 2027. That is when the first revenue collections from the BEPS Top-Up Taxes come in. Based on the strong corporate tax collections so far – and that is pre top-up taxes – our initial sense is that the further increase from the top-up taxes could be significant. We will continue to firm up our estimates over the coming months as we get more up-to-date data on how firms are performing and adjusting their plans. Since the BEPS revenue is coming, some may ask, well, how about rolling back the GST? Again, the GST increase was introduced to fund rising structural healthcare expenditure for an ageing population. These spending needs are permanent and will continue to grow. They should be supported by a stable and reliable revenue base. At the same time, as I have shared in the Budget, Government spending is rising in many other areas, aside from healthcare – for social needs, economic competitiveness, our energy transition, security and infrastructure. The additional corporate tax revenues will strengthen our fiscal position and support these growing needs. But they do not replace the structural role of the GST and especially what we have done to fund permanent and rising healthcare costs. In fact, expenditure pressures are already evident. Take the example of defence spending. I mentioned that the Ministry of Defence's (MINDEF's) budget of 3% would be where it is for now and that the budget includes spending on cybersecurity by MINDEF and the Singapore Armed Forces (SAF), something Mr Giam asked about.”
“But I assure everyone in this House and Singaporeans that our approach has been and will be responsible and professional. A further insinuation is that the PAP Government deliberately painted a "doom and gloom" picture for electoral advantage. Let us consider the facts and the context. Actually, after the US Liberation Day tariffs, there was widespread uncertainty across the world, not just in Singapore. At that time, how many analysts projected 5% growth for Singapore in 2025? I do not recall any. The reason why things did not turn out as badly as we feared was partly due to factors beyond our control, but also partly because of the decisive steps we took. Deputy Prime Minister Gan and the team moved quickly, engaging the US to safeguard our core interests, deepening links with other countries, forging new agreements that sustained investor confidence. Our agencies, our businesses and our workers adapted swiftly and worked tirelessly through a very uncertain period. Their efforts deserve recognition. [Applause.] Let us not belittle these contributions just to score a political point. The fact that we are in a better position today than our projections is something we should all welcome. It is good news for Singapore and Singaporeans. [Applause.] Imagine if we had chosen differently. If we did not raise GST and had instead hoped for revenue upsides. And then the economic situation did not turn out so well. We would be having a very different debate today. We would be scrambling to close fiscal gaps. We would be responding from weakness. But because we made the difficult yet responsible decision, because we chose responsibility over convenience, we are now in a position of strength. Sir, we did not gamble with Singapore's future.”
“It was due to GDP growth outperforming expectations in 2024 and 2025, as well as better-than-expected contributions from multinational enterprises (MNEs) in a few key sectors. And this brings us to the issue of fiscal marksmanship – Mr Alex Yam, Mr Gerald Giam, Mr Louis Chua and Mr Xie Yao Quan touched on this. We have debated this before in the House. It is perhaps, my favourite topic, because I have shared before that I started work in the Ministry of Finance (MOF) doing precisely this – fiscal projections. And as I have explained, our forecast deviations are within a reasonable range – comparable to other advanced economies. Within this range of variation, revenues in recent years have indeed come in above projections. Is it because we were overly conservative? The short answer is, no. Our projections are prepared by the MOF economists using the best available data at the start of each financial year, including GDP growth assumptions at that time. But for a small open economy, like Singapore, growth outcomes can diverge significantly from forecasts, as global conditions evolve, Because we are so dependent on the external environment, forecasting Singapore's GDP growth is like forecasting the world's GDP growth; which is very, very difficult to do. Likewise, revenues from property transactions or Certificate of Entitlement (COE) premiums are inherently difficult to predict. Can you tell what the next year's property prices will be? What next year's COE premiums will fetch? It is very hard to do. In the case of COEs, we increased the quotas. Yet the premiums continued to rise with sustained demand. That explains the increase in revenue from Licences and Permits, which Mr Gerald Giam asked about. So, forecasting in such an environment will never be exact.”
“We did not agree with that proposal, because the NIRC framework was carefully designed to safeguard intergenerational equity. If we increase the cap to 60%, that can ease immediate pressures. But it will weaken fiscal discipline, reduce our buffer for future shocks and it will shift a heavier burden onto the next generation. In the end, the GST was the only broad-based and sustainable option to fund rising healthcare needs, while preserving our reserves framework. But even as we raised the GST, we also made sure we mitigated the impact on Singaporeans. We delayed the effective tax increase for the majority of Singaporean households, by at least five years. We enhanced the permanent GST voucher to further defray the tax paid by lower- and middle-income households. After accounting for these measures, the majority of GST collections are and will continue to be, from higher-income households, tourists and foreigners. In other words, we secured stable funding for healthcare while cushioning the impact of the increase for most Singaporean households. Could we have relied instead on Corporate Income Tax collections? But remember, back in 2022, when we made the decision on the GST, there was no sign that Corporate Income Tax collections would rise so significantly. At that time, the discussions on Base Erosion and Profit Shifting (BEPS) were still evolving. The eventual outcomes and their revenue implications were far from certain. It would not have been responsible to fund permanent healthcare commitments using revenue sources that were uncertain and can yet dry up. Corporate Income Tax collections only started rising towards the end of FY2023 and have stayed elevated until now. This outcome was not anticipated.”
“Let us first look at the global context. Since the start of this decade, countries have been tested in ways few could have anticipated. Many advanced economies are now carrying record high levels of public debt. And as debt rises, so will borrowing costs. Over time, this constrains fiscal flexibility and weakens longer-term growth potential for these economies. Against this backdrop, Singapore's strong fiscal position is a strategic advantage. Many Members spoke about our fiscal position and public finances, including Mr Ang Wei Neng, Ms Valerie Lee and Mr Xie Yao Quan. I am glad they see our healthy fiscal position as a strength; a source of strength. Given the surplus we have generated, in FY2025 and also the ones that we expect in FY2026, Mr Gerald Giam have asked whether the Goods and Services Tax (GST) hike should be re-evaluated. But let us consider the facts. At the beginning of this decade, we knew that healthcare spending would rise sharply in line with our rapidly ageing population. This was structural, not cyclical. And healthcare was not the only area where spending pressures were increasing. We had estimated that healthcare alone would require additional funding of 0.6% to 1.2% of GDP and this would happen in the second half of this decade, which we are in right now. That is a significant and permanent increase. The question was how to fund this. We studied a range of options. We raised property taxes and motor vehicle taxes for luxury cars. We have increased the top marginal personal income tax rates. But these moves were still not sufficient to close the structural funding gap. The WP had suggested raising the maximum Net Investment Returns Contribution (NIRC) we can use in the Annual Budget from 50% to 60%.”
“It is not unique to Singapore. It is happening across all advanced and high-income economies. So, we really should have some humility about this because no country has truly succeeded on a sustained basis to reverse this decline. Members offered practical suggestions around housing, cost pressures and the affordability of raising children. Some also asked for more work flexibility and leave provisions, so that parents can be present in their children's formative years. In fact, we have taken significant steps on both fronts recently. We have enhanced shared parental leave. And with the Large Families Scheme, parents can now receive up to $48,000 for their third or fourth child, and even more for the fifth or subsequent child. As a result of the recent enhancements, our expenditure on marriage and parenthood initiatives has increased – from $4 billion in FY2020 to $7 billion in this Budget. But we will not stop here. We have not given up. We will not give up. [Applause.] We are already planning for the next tranche of measures to strengthen support for families. And there will be an opportunity to discuss this at the COS debate and the Minister in the Prime Minister's Office will share more at that occasion. Sir, this Government will continue to provide stronger assurance for Singaporeans at every stage of life. We will do this in a coherent and deliberate way – strengthening individual responsibility, reinforcing collective support and preserving long-term sustainability. We will continue to strengthen our social compact and ensure Singapore remains a society where every citizen can progress with confidence. Let me move on to the third question – is our fiscal strategy fit for immediate challenges and is it positioning us well for the future?”
“Mr Abdul Muhaimin asked about this particular issue of ComLink+. Let me just touch on it briefly. There are, today, about 11,000 families on ComLink+, most are in rental housing. There are around 14,000 eligible families living in rental flats. We have approached them, but some chose not to come onboard ComLink+ or could not be contacted. With the enhancements to ComLink+, we will redouble our efforts to reach out to them and with stronger community support, we hope more of them will come onboard the scheme. And we will also extend ComLink+ to lower-income families beyond the rental blocks. Members have also offered many other suggestions to further strengthen our community and social support system. Many suggestions have been offered. For example, in healthcare delivery and integration with social support. Members, like Dr Choo Pei Ling, Mr Dennis Tan, Miss Rachel Ong and Dr Hamid Razak, just now spoke about this. Suggestions around housing and neighbourhood rejuvenation – Mr Ang Wei Neng and Ms Joan Pereira touched on that. More support for the arts, culture and community initiatives – Ms Elysa Chen and Assoc Prof Kenneth Goh mentioned that in their speeches, as well as suggestions to review the income thresholds for the Jobseeker Support Scheme (JSS), which Mr Ng Chee Meng and Mr Patrick Tay had advocated. We will study these suggestions carefully. In particular, the JSS was launched only recently, about a year ago. So, we will review the scheme and its parameters once we have more experience. Many Members also asked for more support for families, especially for parents and would-be parents. Mr Foo Cexiang, Ms Hany Soh, Mr Shawn Loh, Ms Eileen Chong, Mr Gabriel Lam and others have highlighted this concern. Indeed, our falling TFR is a serious concern.”
“For CPFIS-SA investors, the results were even more sobering – around three in four made 4% or less per annum. In other words, they underperformed the SA rate, which is risk free. So, the reality is that we all talk about investments. Such a wonderful thing. But investing and earning consistently good returns is not that easy. That is why we took some time to study how to implement a low-cost investment option within the CPF – it has to be simple, low-cost and effective. There are commercial lifecycle products available in the market, but up till now, the take-up has been limited, partly due to the high fees, which can go up to as much as 2%. But in recent years, the market has matured. More players have entered. Digital platforms have helped to lower costs. That is why we now believe it is possible to offer well-diversified life-cycle products at lower fees. The CPF Board will be engaging the industry next month to call for expressions of interest. There is still a lot of work to be done – designing the scheme, the specific parameters that several Members talked about, building the IT system and ensuring a smooth and seamless user experience. The CPF Board is working towards rolling out the scheme in the first half of 2028, but if we can do this earlier, we will. Beyond retirement, we have and will continue to strengthen support across life stages. We have initiated major moves as part of Forward Singapore. In public housing, through the new HDB classification system of Standard, Plus and Prime flats. In healthcare, through Healthier SG and Age Well SG. We have made SkillsFuture a key pillar of our social compact and we are strengthening this further. We have introduced the SkillsFuture Jobseeker Support Scheme and we have enhanced ComCare and ComLink+.”
“We redistribute resources to those with greater needs. And we complement that with heavy investments in human capital – early childhood education; quality schooling and tertiary education; as well as lifelong learning through SkillsFuture. Upward mobility remains central to our social compact. Because here in Singapore, your starting point should never determine your finishing position. [Applause.] Several Members also spoke about retirement. Mr Saktiandi Supaat has been championing this for many Budgets. Ms Poh Li San also mentioned this in the debate. And in this Budget, we are indeed strengthening our CPF system because Singaporeans are living longer and we want them to retire with confidence and peace of mind. Our CPF system rests on sound and sustainable principles. Each member saves for his or her own retirement. But we do not leave individuals to fend for themselves. We boost those with lower balances through Silver Support, the Majulah Package and periodic CPF top-ups. And we continue to review the parameters of these schemes. That keeps our system fiscally sustainable, while ensuring that those with less get more support. The CPF provides, as Members would know, risk-free returns of 2.5% on the Ordinary Account (OA) and 4% on the Special Account (SA), with extra interest of 1% to 2%. Members who wish to invest their savings for potentially higher returns can do so, today, through the CPF Investment Scheme (CPFIS). But the experience with the CPFIS has been mixed. From 2016 to 2024, while a majority of CPFIS-OA investors earned above 2.5% per annum, only about half achieved returns of more than 4%; this is for OA. In other words, many would have been better off topping up their CPF SA and earning the guaranteed 4% return.”
“Through housing grants, homeownership and CPF top-ups, we enable lower-income households to accumulate assets in Singapore. Today, households in the lowest quintile have average net wealth of nearly $300,000 – that is a meaningful foundation. Mr Saktiandi and Assoc Prof Terence Ho suggested additional asset-based transfers. I think someone called it a "Singapore Dividend" or other forms of putting together the measures that we do to help Singaporeans build assets. In fact, this is the approach that the Government has long taken. We focus not just on income support, but on enabling Singaporeans to accumulate assets, because asset ownership gives families a concrete stake in our nation's success and allows them to share directly in Singapore's progress. We do this through a range of different mechanisms like the CDA, Edusave, Post-Secondary Education Account, through CPF and our housing policies and most recently, we introduced the Institute of Technical Education (ITE) Progression Award which incorporates an element of CPF top-ups. We will continue to strengthen pathways for Singaporeans to build savings and assets. We also have progressive taxes on wealth, through our property and vehicle taxes. We will continue to study ways to moderate excessive wealth concentration – carefully and responsibly. But redistribution has limits. It is very easy to say, "Let's tax the rich more!" But capital and talent are mobile and if we rely solely on ever-higher taxes for this segment, eventually, the broad middle will also have to shoulder the burden. And we risk undermining competitiveness, enterprise and job creation. Redistribution alone cannot build a strong and resilient society. So, our approach is balanced. We keep taxes moderate but progressive.”
“Targeted support for specific groups requires means-testing, And we use different indicators to means-test. The two key ones are the AV of dwellings and PCHI. Quite a number of Members in this debate, including Mr Alex Yeo, Ms Jessica Tan, Mr Gerald Giam, Ms Sylvia Lim just now, Mr Edward Chia suggested reviewing these indicators. I suppose if you were to take a step back, most of us would agree that support should be given to households with less income and less wealth. No one would dispute that. How to measure income and wealth is the challenge. AV and PCHI are practical and effective indicators. But no measure is perfect and we will continue refining our criteria, especially when it comes to support for seniors. Cost pressures can also feel sharper due to inequality. Because of inequality, comparisons intensify. Social stresses grow. Encouragingly in Singapore, income inequality has narrowed compared to a decade ago. Lower- and middle-income workers have seen faster real income growth than those at the top. Without this inclusive growth, I have no doubt that the cost pressures that we are feeling on the ground would have been far worse. We have achieved good outcomes. But we will continue to press on. And in this Budget, we are raising the Local Qualifying Salary as well as enhancing and extending the Progressive Wage Credit Scheme. Several Members, Mr Patrick Tay, Mr Melvin Yong and Mr Sanjeev Tiwari, suggested further steps to support lower-wage and vulnerable workers. We will study your suggestions carefully – balancing wage increases with sustainable productivity improvements. We are also paying close attention to wealth inequality. We have begun publishing the data and will track this more systematically. But we are not starting from a weak base.”
“We pursue broad-based wage growth. But wage increases have to be supported by skills upgrading and productivity improvements. And at the same time, the Government bears a substantial share of the costs of essential services, through subsidies and transfers, with more support for lower- and middle-income households. Overall, this balance has delivered good and affordable services to Singaporeans at a sustainable cost. But we know that this is still a work in progress. The macro data may be reassuring. But as many Members have highlighted, the lived realities differ from household to household and the circumstances vary for specific segments. Different families face different pressure points. For example, there are larger families with more children and they will face greater cost burdens, as Mr Pritam Singh and Mr David Hoe have highlighted. Mr Singh suggested adjusting the CDC vouchers. That could be one way to help them. But we will continue to explore other measures to help those with larger families. There are also families caring for seniors or children, and especially those sandwiched with both. Ms Yeo Wan Ling, Ms Jessica Tan and Ms Nadia Ahmad Samdin highlighted their concerns. And in fact, we already provide more for them in the Budget, in every Budget, including in this year's Budget. There are families with members who have special needs. Prof Kenneth Poon and Ms Hazlina Abdul Halim highlighted their concerns. And caregivers too need to be supported, as Mr Cai Yinzhou and Ms He Ting Ru highlighted. In recent Budgets, including this one, we have strengthened support for all of these groups. And we will continue to do so, and will consider the suggestions that Members have made.”
“That reflects our rapidly ageing population because as you get older, you will tend to spend more on healthcare, and that is why we provide significant and growing subsidies for healthcare services and for our national health insurance premiums. It is also why we have taken steps to rein in overly generous private riders and other practices that drive up medical inflation, especially in the private sector. And we will continue to ensure that healthcare remains affordable in Singapore. No Singaporean will be denied the healthcare they need because of an inability to pay. That is our assurance. [Applause.] Another reason for concerns about cost is that inflation for some frequently consumed services, especially F&B, has risen faster than general inflation. Food consumption may form a smaller share of income which I mentioned just now. But we experience the higher prices each time we order something, or we dine out and the psychological impact is immediate and visible. The domestic services, be it healthcare or F&B, are labour-intensive. We want wages for Singaporeans in these sectors to rise. But when wages rise, costs also increase. And that is the fundamental tension every economy must manage. Some countries choose to suppress service wages to keep prices low. But then this traps a segment of workers in low-paying jobs. It is not what we want to do. Others, like the European economies, have taken a different path. Wages in the services sector are high. You go to any European country, you will know they are paid very well. But that leads to higher prices overall and a heavier cost burden, which in turn has to be supported by a larger welfare state, financed by taxpayers. There is no free lunch. Someone has got to pay this. So, Singapore is forging our own path.”
“The remaining 95%, the overwhelming share, is for longer-term and structural schemes. And in this Budget, we enhanced preschool and student care subsidies, as well as ComLink+ to support families with children. Total social spending has increased this year. It has not gone down. We are providing more help for Singaporeans. Our approach is not just to cushion costs because the durable solution to cost pressures is steady, sustainable wage increases. Mr Shawn Loh highlighted concerns that a decreasing proportion of Singaporeans benefit from economic growth. He highlighted the concerns among seniors and, indeed, one group that will face greater impact is retirees because they are not working and that is why we provide more for them in the Budget. But when we look at data at both the household and the individual worker levels – household and workers – in fact, incomes have risen faster than inflation over the past decade, across the entire income distribution. So, real incomes have gone up for both households and for workers across the entire income distribution. We also look at household expenditures. Spending has increased in dollar terms, but expenditure as a share of income – that has either remained stable or fallen, across the income distribution as well. Meaning Singaporeans generally are spending less as a share of their incomes even if their spending has gone up in dollar terms. In particular, the share of household income spent on essentials, like food, public transport and education, has declined across all income quintiles. There is one exception – that is, healthcare. Singaporeans are spending a larger share of their income on healthcare and health insurance.”
“We must first understand why affordability and cost concerns have surfaced – not just in Singapore, but across many economies around the world. After COVID-19 and the war in Ukraine, inflation surged globally. In Singapore, it rose to more than 6% in 2022 and it has since come down to 0.9% last year. Inflation has moderated, but price levels remain higher than before and that is what households are experiencing. To cushion the spike, we provided more than $10 billion through the Assurance Package. Some have observed that the transfers in this year's Budget are smaller than last year. But in fact, support in this Budget remains substantial and broader in scope: we are providing CDC Vouchers, cash support, utilities rebates, Child LifeSG credits and CPF top-ups for seniors. What does this mean? A middle-income household with young children receives about $2,800, after you tote up all the different items. A lower-income household with young children – about $5,000. And a retired elderly couple – about $7,600. Essentially, we give more to those with greater needs and we give more to seniors, especially our retirees, as they are not working and have to cope with higher prices on fixed incomes. These are meaningful sums and they are on top of substantial, broad-based subsidies for essentials, like education, healthcare and housing, as well as targeted support for lower-income families and workers. Mr Louis Chua said the Government’s primary response has been to rely on one-off and ad hoc handouts. He said that last year. I had clarified the matter then. But regrettably, he has repeated this false claim again this year. Because the facts are only about 5% of our overall Budget is for one-off measures – that was so in FY2025 and it is so in FY2026.”
“We will work closely with our tripartite partners, especially NTUC, to realise these shared goals. [Applause.] What does this mean in practical terms? For example, as we develop Champions of AI and implement our national AI Missions, we will not only just help companies transform. We will capture value in Singapore; we will pay close attention to how these companies apply AI; and, importantly, guide them to use AI to enhance human skills and expertise. Take aviation maintenance. Machines and AI can perform many functions. But skilled technicians remain essential and AI can help them make better diagnoses and perform their work more cost effectively. Achieving all this will not be easy. Every sector is different, and how they use AI and the impact on workers in each sector will vary and that is why we are coordinating all of these efforts through the national AI Council, aligning industry transformation and workforce upgrading to ensure that AI uplifts our workers. That is our assurance and that is why our strategy going ahead is clear. We will not have jobless growth in Singapore. [Applause.] We will exploit AI to grow the economy, and we will ensure that growth translates into good jobs and better wages. That is how we give every Singaporean confidence to progress in the future. Next, let me touch on cost pressures. We achieved better than expected growth of 5% last year. Yet, as many Members have highlighted, including Ms Hazlina Abdul Halim, Mr Saktiandi Supaat, amongst others, Singaporeans continue to feel cost-of-living pressures. The data may show improvement. But lived experience and realities do matter. So, the question is this: what more must we do to ease cost pressures and ensure every Singaporean can continue to progress?”
“They are already happening today. For now, our labour market remains resilient. The proportion of permanent employees has risen to a record high of nearly 91%, with gains across most sectors. Vacancies continue to outnumber jobseekers and over 40% of openings are entry-level professionals, managers, executives and technicians (PMET) roles, indicating still healthy demand for young graduates. So, thus far, the evidence does not point to widespread displacement. But as many Members have highlighted, there are emerging pressures and we recognise that. We cannot rely only on today's data. We must prepare for tomorrow. I mentioned earlier that the historical experience with major technological waves is that ultimately more jobs are created than lost. That has been so in the past. But there is no economic law that says this will always happen or that this will happen in the future. Indeed, many are concerned that this time may be different. Because AI is more powerful, advancing faster and affecting a wider range of occupations. And many Members raised important concerns, for example, that companies may lean too heavily on AI and invest less in worker training. That more workers could be displaced and the older ones will find it harder to re-enter the workforce. And that entry level jobs, the first rung of career ladders, may be hollowed out. We are alert to these risks and we will act early to prevent such outcomes from taking hold in Singapore. We will invest more deliberately and more systematically in our people. In that regard, I agree with NTUC Secretary-General Mr Ng Chee Meng's three calls: to empower every worker to be AI-ready; to strengthen support and safeguards for workers; and to strengthen the Labour Movement's ability to protect and uplift PMEs.”
“And many Members spoke about this, including the National Trades Union Congress (NTUC) Secretary-General Ng Chee Meng, Mr Desmond Tan, Mr Desmond Choo, Dr Charlene Chen, Mr Darryl David, Ms Lee Hui Ying, Ms Mariam Jaafar, Mr Andre Low and Assoc Prof Jamus Lim. Many also shared about the anxieties that workers and fresh graduates are feeling. These concerns are real. And we must, and we will, take them seriously. Historically, every major technological wave has displaced some jobs but also created new ones. Computers displaced stenographers and typists but created new professions in ICT, in finance and services. And over time, productivity gains expanded opportunities for workers. Indeed, what we have seen in Singapore so far is that AI can augment jobs and help workers achieve more, even as it automates certain tasks. Take the example of Ms Angeline Tan, who works at Nanyang Incorporated, a local event infrastructure company. Her company adopted an AI chatbot to handle customer enquiries. Instead of being displaced, she stepped up. She became a Chatbot Manager, assuming responsibility for auditing the system's responses and ensuring its accuracy. But she did not stop there. She upgraded her skills further. And today, she is an AI Tech Lead in her company, overseeing the implementation of AI tools, improving workflows and taking on more creative responsibilities. And that is the pathway we want to encourage – workers moving up the value chain. AI can also make our workplaces more inclusive. Robots can handle physically demanding tasks. For example, they can support seniors and persons with disabilities. Ms Denise Phua and Mr Sharael Taha spoke about this, and we will step up efforts in this area too. These are not theoretical possibilities.”
“SMEs that redesign jobs and transform their operations can offer higher wages and more meaningful opportunities to attract and retain Singaporeans. Many SMEs have done so successfully, including those in retail and F&B. Enterprise Singapore and the Singapore Productivity Centre recently did a deep dive into F&B establishments in Singapore. The findings were reported in the media and they are very instructive because F&B establishments that benchmark themselves with productivity standards and knew that they were lower than the benchmarks could find practical and useful ways to raise their productivity. And when they did do so, they have generally done better. I mentioned HarriAnns on Budget Day as one example. Other companies have done so too – restructured, transformed, digitalised and even expanded abroad. And we want to encourage many more SMEs to take that path. Let me cite another example. Poh Heng Jewellery. It was founded in 1948 as a small shop on North Bridge Road. Over the decades, it grew into a household name. A few years ago, the company embarked on a serious transformation. It strengthened its management. It embraced e-commerce. And with Government support, it is developing AI tools to analyse customer data and shopping behaviour, so as to enable more personalised product recommendations. And it now employs 150 people and is making plans to expand into ASEAN. These examples show that even traditional industries can reinvent themselves and in doing so, create better opportunities for Singaporeans. Another powerful force reshaping our economy is AI.”
“That is the right thing to do – to uplift incomes, strengthen dignity in work and narrow wage gaps. And at the same time, to support businesses through the transition, we introduced the Progressive Wage Credit Scheme and, in this Budget, we are enhancing the Scheme and extending it for another two years. That reflects our consistent approach to uplift workers while supporting firms to adjust. Mr Mark Lee asked for more leeway for SMEs to hire foreign workers. We cannot relax the Dependency Ratio Ceiling (DRC). Doing so will encourage excessive reliance on foreign manpower and weaken our Singaporean core. But we will consider calibrated ways to provide more flexibility, like expanding the sources from which businesses can hire Work Permit holders, for certain types of occupations where genuine shortages exist. We will continue to strike the right balance – sufficient flexibility for businesses without undermining Singaporean workforce development. Ultimately, the sustainable path forward is productivity improvement and business transformation. And many Members spoke about this. We know that SMEs need more support to embark on such transformation. Several Members, including Ms Cassandra Lee, Mr Lee Hong Chuang and Mr Henry Kwek, have offered suggestions on what more we can do. Mr Mark Lee also highlighted the need to strengthen management capabilities, and he and several other MPs, including Mr Liang Eng Hwa and Mr Victor Lye, spoke about the importance of internationalisation. These are all useful feedback and suggestions, and the Government will continue to take them onboard, study them and lean forward to enable our SMEs to innovate, upgrade and internationalise.”