Debate on Annual Budget Statement

Order read for Resumption of Debate on Question [12 February 2026] [1st Allotted Day],

"That Parliament approves the financial policy of the Government for the financial year 1 April 2026 to 31 March 2027." – [Prime Minister and Minister for Finance].

Question again proposed.

Mr Speaker: Mr Saktiandi Supaat.

11.32 am

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Speaker, I would like to begin by expressing my support for the broad thrust of Budget 2026, delivered by Prime Minister Lawrence Wong.

This Budget reflects fiscal discipline, strategic foresight and a continued commitment to strengthen our social compact in a more uncertain and fragmented world. It balances long-term investment with immediate support for Singaporeans and businesses. At the same time, in a mature economy like ours, the central question is no longer simply gross domestic product (GDP) growth. What matters is whether growth translates into mobility, fairness and confidence across generations.

Increasingly, confidence means this: first, can I sustain my earning power? Can my children do better than me? And can I retire with dignity?

I will address this life-cycle economic security of Singaporeans in three parts today.

But Mr Speaker, before that, however, it is important to note that we are navigating a changed and uncertain world. Geopolitical shifts are reshaping global trade and weakening the international order we have long relied on. At the same time, technological advances, particularly in AI, will profoundly reshape how we work, learn and live.

It is therefore heartening that the Government is taking decisive steps to invest for the long term. We see this clearly in the Budget, with development expenditure rising faster than operating revenue and expenditure. This reflects a deliberate choice to strengthen long-term capabilities. But this also raises an important point.

Some of my residents in Toa Payoh have asked me, "Why are there not more 'goodies', especially when we had a budget surplus of $15.1 billion in 2025?"

Mr Speaker, this is an understandable question. But the surplus reflects, in part, the volatility of the global environment. Unexpected developments, whether geopolitical tensions or trade disruptions, can quickly affect growth and revenue. While we performed better than expected in 2025, as our economy grew 5% beyond our expectations and multinational companies (MNCs) here did well and paid higher than expected corporate income tax, we cannot assume that such conditions will persist. In fact, latest developments in the past week out of the United States (US) with the new prevailing 15% global tariff and the risk of war in the Middle East adds to unanticipated volatility.

Beyond the immediate tariff impact, the deeper concern is the increasing unpredictability of global trade rules and how it could eventually impact global inflation, growth and business sentiment going forward. Globally, beyond the uncertainty of potential refunds, companies must now navigate the specific country- and sector-specific incidences of new import duties. For Singapore, there is still the risk of the semiconductor and pharmaceutical sectors being imposed tariffs.

So, it is therefore prudent that we channel today’s windfall towards strengthening resilience for tomorrow, rather than locking in spending that may not be sustainable. We must also not make the mistake of assuming that the profit cycles will always remain in Singapore's favour.

Mr Speaker, at the same time, we must remain grounded in the realities faced by Singaporeans. I am certain our People’s Action Party (PAP) Members of Parliament (MPs) are aware of the pain points on the ground and will be sharing their views and concerns in this Budget debate today and over the next few days.

In preparing for this debate, the Government Parliamentary Committee (GPC) for Finance and Trade and Industry have engaged widely through, for example, the PAP Policy Forum (PPF), resource panel discussions and industry engagements. I would like to thank the PPF team for facilitating these engagements, which included more than 100 participants in focus groups and over 1,000 survey respondents.

The message is clear. Cost of living remains the top concern. Healthcare affordability, job security and retirement adequacy follow closely behind.

From my ground engagements, additional concerns have surfaced: rising business costs for small and medium enterprises (SMEs), higher foreign manpower costs, housing affordability for future and current generations, AI-related job anxieties for all ages, including young job seekers, and dealing with carbon transition costs, and pressures from an ageing population – as our society ages and, in general, live longer, concerns about a comfortable life as one gets older comes with the accompanying concerns.

Singaporeans are not only concerned about growth in the abstract. They are concerned about whether growth translates into real improvements in purchasing power and economic activity. Mr Speaker, in Malay, please.

(In Malay): Mr Speaker, the cost of living has gone up sharply in the past five years, not only due to COVID-19, but also because of global supply chain disruptions and an inclination towards narrower views of national interests.

Smal business leaders remain cautiously optimistic, but are still concerned about structural cost pressures, rising foreign manpower costs and uneven gains from growth. While these factors are partly external in nature, that is scant consolation for ordinary Singaporeans. The fact is that every dollar is now yielding progressively diminishing returns.

This concern also overlaps with the issue of retirement adequacy – which I will touch on later. If we are to ensure that Singaporeans can retire with confidence, we must mitigate cost of living pressures on a structural level.

One of the main expenses for households and retirees is food. As a visible example, the price of a bowl of mee siam or mee soto has gone up from around $2.00 to $2.50 and now around $4.00 in many places today. This is a 50% to 100% increase in less than 10 years!

This puts direct pressure on households, especially low-income groups and retirees.

In the food and beverage sector, it is imperative for us to strengthen transparency in rental arrangements and assess subletting practices, so that they do not contribute to unreasonable increases in food prices. Additionally, healthcare costs remain a major concern. In the long term, we need to ensure that the healthcare system remains affordable and inclusive.

That being said, we must also recognise the Government's efforts. As we have seen over the past five years, the Government will not shy away from providing comprehensive transfer packages, such as GST offsets, to cushion the impact for Singaporeans and especially our lower-income households.

Structurally, we have also enhanced schemes like MediShield, introduced jobseeker relief scheme and made the GST Voucher Scheme permanent, in order to give peace of mind to households who need help with their expenses. In addition to structural support, Budget 2026 continues the trend of providing one-off temporary support – in the form of the Cost-of-Living Special Payment, CDC vouchers and utilities rebates – when our fiscal position allows us to do so.

(In English): Mr Speaker, I will now continue in English. The Ministry of Finance (MOF) Occasional Paper shows that Singapore has made real progress – real incomes have grown across deciles, and after taxes and transfers, inequality has declined. These are important achievements.

But two structural realities remain. Wealth inequality is higher than income inequality and relative mobility may moderate as our economy matures. This is not a crisis, but it is a structural signal. If we take a longer-term view, including insights from economists like Thomas Piketty, the challenge is that wealth compounds faster than wages. And wealth generates optionality: the ability to take risks, invest in education, support transitions and access opportunities. Over time, opportunity can become linked to starting point.

Mr Speaker, we must therefore continue strengthening start-line equality. We have made good progress through schemes, such as KidSTART and ComLink+. The next step is to sharpen outcomes. We can consider publishing clearer mobility indicators, such as school readiness, attendance and literacy. Publishing, I mean.

We should also strengthen our efforts in terms of access for lower-income youths through internships, mentoring and enrichment opportunities. Strengthening, I mean. We already have done so. But because mobility is not only about grades; it is about access.

Mr Speaker, if wealth compounding is structural, we must broaden capital participation. The new Central Provident Fund (CPF) life-cycle investment scheme mentioned in Budget 2026 is a step in the right direction. As this is rolled out, it will be important to ensure: first, simplicity; second, strong default options; third, low fees; and fourth, safeguards against behavioural risks.

Mr Speaker, we already have strong support across the life-cycle, from the Child Development Account to Edusave and the Post-Secondary Education Account, as well as SkillsFuture. These are important foundations. The next step is whether we can connect and strengthen them within a more explicit life-cycle mobility framework, with a modest asset-building element that compounds over time.

Other countries have explored similar approaches. For example, Canada’s education savings system uses government top-ups, including targeted support for lower-income families, to help build education assets over time. This principle is clear – to broaden access through compounding, while keeping support progressive and fiscally disciplined.

In our context, we can consider a Singapore Opportunity Account framework: a modest starting stake, progressive top-ups for lower-income households, a safe, low-cost investment structure, and restricted uses, such as education, skills upgrading, housing support enhancements or CPF top-ups.

This is not redistribution. It is structured participation in asset-building.

Let me illustrate briefly. A student from a lower-income household may have the ability to pursue a specialised course or industry attachment but lack the financial buffer. Such an account could support these opportunities. Later in life, the same individual may wish to transition into a growth sector. The account could support reskilling. And at key life stages, it could support housing stability or CPF top-ups. In this way, we are not just supporting income. We are enabling mobility across the life-cycle.

Mr Speaker, this can be implemented without significant new fiscal burden. By integrating existing schemes, targeting support and using capped matching with long-term investment and possibly private sector involvement, we can achieve more impact per dollar. This is an area where further study could strengthen how we design mobility-enhancing policies going forward.

Mr Speaker, let me turn now to one specific area of our tax structure: the exemption of the first $20,000 of chargeable income. This framework was introduced in Budget 2002 to cushion lower- and middle-income Singaporeans as we shifted towards indirect taxation. But that was more than two decades ago. Since then, median incomes have more than doubled, the Goods and Services Tax (GST) has increased and cost structures have shifted materially. Yet the threshold has remained unchanged.

In real terms, its value has eroded. As incomes rise while thresholds remain static, bracket creep occurs quietly. More lower- and middle-income earners enter the tax base, not because they are significantly better off but because the system has not been recalibrated.

Mr Speaker, the case here is not for tax cuts. It is for calibration. A phased adjustment, for example, to $25,000 or $30,000, would: first, provide meaningful relief to lower- and middle-income groups; second, help them retain more savings and potentially asset-building; and third, restore structural fairness without undermining progressivity.

In this way, we strengthen progressivity while maintaining fiscal discipline.

As our revenue mix has shifted more towards indirect taxes, it is reasonable to ensure that the lower-end of our income tax structure remains appropriately calibrated.

So, I hope the Ministry could consider reviewing whether the $20,000 exemption threshold remains aligned with its original purpose, given more than two decades of structural wage growth, higher reliance on indirect taxation and evolving cost of living realities.

Mr Speaker, third, I would like to address the retirement adequacy of Singaporeans, as I have done since the Budget 2022 debate. I am glad and grateful for the Prime Minister's continued focus on the issue. Among other things, the Government-supported increase in our seniors' CPF contribution rates and the top-up for seniors who have lower CPF balances will boost the nest eggs for our seniors to retire and age with dignity.

These must be seen alongside the other moves that we have made in recent years to help Singaporeans grow their retirement funds, such as the Silver Support and the Matched Retirement Savings Scheme (MRSS). My question is, what is the Government's assessment on whether the MRSS has been successful in achieving its outcomes? Will the MRSS be continued or even expanded to encourage family members and even husbands, to top up their elders' or homemaker wives' CPF balances and take advantage of dollar-for-dollar matching? And whether the Government also review the Silver Support qualifying thresholds as our seniors live longer and deplete their earlier resources under their conditions currently?

The new and exciting announcement is the planned option for CPF members to invest their funds in a Lifetime Retirement Investment Scheme. But as CPF introduces low-cost life-cycle investment products, behavioural design becomes critical. The default structure matters more than choice. If CPF members are nudged into life-cycle funds, those funds must: first, automatically de-risk; second, be globally diversified; third, have strict fee caps; and lastly, include switching safeguards.

The question I have is, will the new CPF life-cycle products include automatic glide-path de-risking, internationally benchmarked fee caps and behavioural safeguards, and what are the terms of reference that have already been given to the CPF Board?

Mr Speaker, finally, another small but significant step we can take is to better define what retirement adequacy should look like. This is because Singaporeans see their CPF balances, but many residents that I have spoken to do not understand what "adequacy" means.

As investment choice expands, volatility risk increases. This makes it more important for every Singaporean to be able to be clear on what is "adequate" for himself or herself.

I recognise that there are inherent difficulties with such a definition. Among other things, it is no longer clear at what age an average Singaporean should retire and as human beings, we can never be sure how long more we will live after retirement. However, can CPF provide scenario-based projections, including downside stress scenarios, to strengthen confidence among Singaporeans that they can adequately provide for themselves after retirement?

Mr Speaker, Sir, Budget 2026 is directionally sound. It directs fiscal discipline. It invests in long-term capability. It strengthens our social compact.

Our task now is refinement – to ensure that our fiscal strength translates into sustained mobility for Singaporeans, for pushing for greater start-line equality, for broadening capital participation, calibrating fairness. At the same time, we must take care of Singaporeans' later years by strengthening work longevity and ensuring that seniors can retire with dignity.

If we do these well, through Budget 2026 and future Budgets, this will not only support Singaporeans through today's pressures. It will also reinforce confidence in the Singapore model itself – a model where growth, fairness and mobility move in tandem. Mr Speaker, I support Budget 2026. [Applause.]

Mr Speaker: Mr Pritam Singh.

11.50 am

Mr Pritam Singh (Aljunied): Mr Speaker, my speech titled, "Taking Care of Our Own," will cover three issues. First, I will speak on the broader geostrategic environment and its implications for Singapore; secondly, I will discuss the point made by Deputy Prime Minister Gan Kim Yong over the Economic Strategy Review's mid-term update that GDP growth may not translate into jobs for Singaporeans, before discussing the Budget announcements pertaining to AI skills upgrading and opportunities for our workers. Finally, I will speak about the fiscal position and call for more cost of living support measures for low- and middle-income Singaporeans and for families with children.

The spectre of the Liberation Day tariffs loomed large over Singapore in April last year. The People's Action Party (PAP) Government dissolved Parliament just days after the Trump administration's announcement.

The political timing of the general elections was calculated to put the PAP in the most advantageous position, with tariff uncertainty serving as a rallying call for voters to back the tried-and-tested. Since then, however, there has been remarkably little information of the sectoral tariffs and their actual impact on Singapore. Despite the doom and gloom surrounding the Liberation Day tariffs, this PAP Government begins its new term with what may be the greatest fiscal surplus any PAP Government has seen in decades.

The Trump administration has determined that the United States (US) must re-jig, reset and, in some cases, dismantled key pillars of the international system that delivered decades of peace and relative stability in the Asia Pacific. But the US, nonetheless, retains deep influence in the region through its military and economic ties with friends and allies – Singapore, Malaysia, the Philippines, South Korea, Australia, India, Japan and others.

Trump or no Trump, these links will continue to take significant priority and shape the strategic calculations of countries across the region. And as the US moves towards a more confrontational posture with China, temperatures in the Asia Pacific have risen and they look set to continue rising. The comprehensive electoral victory of Japanese Prime Minister Sanae Takaichi and the growing domestic political appetite for a more normalised diplomatic and military posture suggest that Japan's pacifist constitution, held for around 80 years, will finally be set aside. The prospect of Japan or even South Korea acquiring nuclear weapons to counterbalance China and North Korea, is now closer to a probability and not merely a possibility.

The increased militaristic signature reflects a regional circumstance unfamiliar to many middle-aged Singaporeans and it remains a source of concern for them. Closer to home, recent hostilities between the Association of Southeast Asian Nations (ASEAN) neighbours – Thailand and Cambodia – remind us that regional fraternity and camaraderie do not guarantee peace dividends.

The heightened security environment will keep the Government fully occupied. But for Singapore, the challenge is not just about managing foreign policy, it is what these developments mean at home for our society and our cohesion.

Prime Minister Wong's remarks on the back of Prime Minister Takaichi's comments about Japan's interest in Taiwan's security in November 2025 are a case in point. A notable number of online voices in Hong Kong and China, including some Singaporeans, raised concern that the Prime Minister's comments were insensitive towards Chinese sentiments. This points to something we must address directly – more needs to be done to engage Singaporeans, new immigrants and citizens of all races alike in an interactive and open conversation about our national interests. Without that, the phrase "national interest" risks becoming a shorthand to shut down a conversation rather than to start one. We are a multiracial, multicultural society, not proportioned equally with a growing stock of new immigrants, whose loyalties understandably will take time to root.

In this context, building resilience in our psychological defence is more urgent than ever. The Workers' Party (WP) in Parliament, reflecting the political diversity of our people, looks forward to playing a positive role in strengthening that sense of home and our unity as one people. I have ended my last two Budget speeches with a call to support our men and women in uniform.

It appears that our cyber defence agencies have already tasted combat in their virtual trenches, even if that domain remains shrouded in operational secrecy. As in previous Budgets, Singaporeans will know there is non-partisan support for the defence-related priorities in this Budget. That consensus remains clear and it holds.

Uncharacteristically, one of the most politically significant statements this year to date did not come from the Budget, but from the Deputy Prime Minister Gan at his January media interview on the mid-term update of the Economic Strategy Review. The Deputy Prime Minister observed that GDP growth may no longer translate into jobs for Singapore.

What this does is to put every job-related policy, initiative and scheme announced by this Government into sharper perspective than ever before. For each more so than before, Singaporeans deserve a well-publicised and detailed report card, one that distinguishes rhetoric about promises kept with measurable outcomes subject to Parliamentary and public scrutiny.

The Deputy Prime Minister Gan's remarks on GDP growth also call into question whether three of the four national bonus components, partly used to determine total Ministerial salaries, remain fit-for-purpose. If the Progressive Wage Model is driving income gains for the lowest 20th percentile rather than productivity, how far should it constitute a criterion of the national bonus for the Ministers? Is the unemployment rate among Singaporeans still the right measure or has under-employment among Singaporeans become a more telling and fairer gauge to assess how much bonus Ministers ought to receive? And if GDP growth will no longer reliably create good jobs for Singaporeans, should it remain in the Ministerial bonus formula at all?

Arising from this year's Budget initiatives, I would argue that the national bonus should be anchored to one objective outcome: good jobs for Singaporeans in the age of AI.

AI dominated this year's Budget, the first of this term of Government. Yet more than three years after Chat GPT changed the world, AI remains an enigma for much of our workforce and many of our businesses. I will make two sub-points.

First, the Budget speaks of employing AI to facilitate end-to-end business transformation. This is an ambitious ask. Multinational companies (MNCs) and companies, like DBS and Grab, have the resources to experiment, to sandbox ideas and even to absorb failure. SMEs are not necessarily in the same position. For some of them, navigating AI to improve productivity is not just challenging; it can feel impossible. I look forward to the actionable strategies from the Ministry of Trade and Industry (MTI) on the Champions of AI programme and specifically, how SMEs will benefit from it.

On AI-related subsidies through the Productivity Solutions Grant and other initiatives, such as the Enterprise Innovation Scheme, clear standards and requirements must be established before grants and subsidies are paid out. AI-related grants and subsidies must be ringfenced for truly transformative productivity gains, so that these taxpayers' subsidies are not gamed or abused. Singaporeans would remember the Productivity and Innovation Credit (PIC) scheme of yesteryear and how some individuals and businesses exploited it. Promoters helped to set up shell or dormant companies solely to claim PIC benefits with false documentation or listing phantom employees to meet qualifying conditions. Other reports questioned how many genuine research and development (R&D) breakthroughs were operationalised for businesses through the PIC scheme and whether they moved the productivity needle in proportion to the subsidies that were paid out.

We cannot repeat that mistake with taxpayer money with this latest productivity push through AI-related subsidies.

For workers, the redesign of the SkillsFuture website to make AI learning pathways clearer is a welcome step. At an overarching and strategic level, the AI Council must take a special interest in ensuring that AI-related outcomes are scoped properly. Because done right, this raises Singaporean businesses and workers to higher productivity.

My second point covers the phrase used by the Prime Minister, "Because we take care of our own." That was arguably to me the most significant line in the entire Budget speech when it came to AI's impact on workers. Last week, both CNA and The Straits Times ran a Financial Times opinion piece by Sarah O'Connor in the online and print mediums, respectively, titled "We have to stop calling some jobs 'low-skilled'".

She wrote that, nobody – not your teachers, not your parents, not even the Organisation for Economic Cooperation and Development's (OECD's) head of skills analysis – knows which skills will be most valuable tomorrow. If that is daunting for our students and parents, one can imagine how it feels for a mid-career worker worrying about the next mortgage payment and their family while trying to retrain for a world that appears to constantly shift beneath their feet.

There is an age-old problem that manifests itself – workers take up courses, earn new certificates and qualifications, but still find jobs hard to come by. Compounded with that now, is the requirement to master AI.

With the merger of Workforce Singapore (WSG) and SkillsFuture Singapore (SSG) into one agency, there is an opportunity to improve one-stop support for our workers, especially for those who have been retrenched or displaced, steering them towards areas of real opportunity, not just available courses.

I note the Ministry of Culture, Community and Youth (MCCY) Minister's comments about greater public sector involvement in supporting job placement for workers at a media interview on the mid-term update of the Economic Strategy Review some weeks back. I welcome that and look forward to seeing developments in this area.

On that note, the Ministry of Manpower (MOM) should present a report card on the Jobs-Skills Integrator initiative announced at Budget 2023. These integrators were supposed to bridge the gap between industry needs, training providers and workers. To my knowledge, Parliament has not received a full account of how many workers have benefited, what the shortcomings have been or how this initiative will evolve. That account is overdue. To round-up this section, I wish the Government, our businesses and our union leaders and workers every success in the undertaking of making AI work for Singapore and to create good jobs for Singaporeans.

Mr Speaker, no Opposition response to the Budget is complete without an assessment of past announcements and a call for a report card on their success or shortcomings. Singapore's Budgets are rarely standalone exercises. Take the Forward Singapore (Forward SG) exercise. At Budget 2024, the Government announced plans to spend $40 billion on Forward SG initiatives through 2030, with $5 billion committed at that inaugural Budget. To my knowledge, there has been no well publicised tracking of cumulative spending since then.

On that same note, this year's Budget revealed that the next cycle of the Research, Innovation and Enterprise (RIE) 2030 plan stands to be funded to the tune of $37 billion, up from $25 billion in the previous cycle from 2021 to 2025. Yet, there was no comprehensive report on how the previous $25 billion was used, how many jobs were created for Singaporeans, where outcomes met their objectives, where they fell short or even whether it is simply too early to tell. There is real value in reporting such outcomes publicly, at minimum, through an occasional paper at the close of each RIE cycle.

Such transparency allows MPs on both sides of this House to fulfil their duty in scrutinising public expenditure as part of their responsibilities as MPs. It gives our people, and our youth in particular, a clearer picture of the opportunities ahead and helps attract the best minds to Singapore. There is much work still to be done in demonstrating how efficaciously taxpayer dollars have been spent.

Across most Budgets, there is a lack of easy-to-rack outcomes on the headlines that have been announced. The Government should be conscious of the public cynicism and detachment that grows when Singaporeans cannot see a clear accounting of how public funds are being used and communicated for ease of understanding and what results have been achieved. That is not good for Singapore and it sits in contradiction with the participatory spirit that Forward SG was meant to embody.

I will speak further on this sub-point during the MOM's Committee of Supply (COS) debate, with specific reference to the Progressive Wage Credit Scheme (PWCS), a scheme that was due to end, but has since been extended in this year's Budget.

On the fiscal position, the Government begins this term on a firm footing, with a surplus of $15 billion for FY2025, an $8 billion surplus expected for FY2026, with potentially more anticipated as corporate tax collections are expected to rise from FY2027. These surpluses already far exceed the two to three billion or thereabouts, in additional revenue that the GST hikes of 2023 and 2024 were supposed to generate. There will be significant public interest in how these surpluses are ultimately deployed, especially given the pressures of an ageing population and the persistent concern over inequality.

Before I turn to address some specific measures in the Budget, it is worth noting the results of the National Trades Union Congress' (NTUC's) own 2026 Survey of Economic Sentiments released last month. The findings are instructive. The top concern cited by 37% of workers was wages not keeping up with the cost of living. The second was having enough savings for retirement, at 28%. Job security came in third at 19%, followed by caregiving demands at 9%, and concerns about AI disruption at 6%. These are not abstract anxieties. They are the lived concerns of working Singaporeans and they should shape how we evaluate what this Budget delivers. I believe more should be done to assuage cost-of-living concerns of Singaporean workers and families.

On cost of living, this Budget introduces yet another tranche of Community Development Council (CDC) vouchers. Singaporeans can be forgiven for treating the scheme as a permanent one. It was not originally conceived as such when CDC vouchers were set at $100 per household. With another $500 tranche to be dispersed in 2027, the time has come to refine the CDC Vouchers Scheme to better help Singaporean families.

Currently, the vouchers are distributed on a per household basis, regardless of household size. That is not equitable. A household of two individuals receives the same as a household of five. I propose a simple and targeted adjustment. Retain the $500 base for all households of three members or fewer. For owner-occupied households with more than three members, provide an additional $150 per person. Based on the average Singapore household size of 3.06 persons in 2025, this is a modest and practical refinement, one that better reflects the actual cost-of-living burden larger families carry.

On families with children, this Budget raises the monthly household income threshold for student care fee assistance to $6,500. I welcome the expansion in reach, but I ask the Government to also review the subsidy calculation framework in favour of greater subsidies as it reviews this sector.

Before the Budget announcement, there were 11 subsidy tiers for households earning between $1,500 and less, and $4,500. The top tier provides a 98% subsidy up to $295 per month. The lowest provides just 20%, or $59. This can be simplified further, starting at the new Local Qualifying Salary figure of $1,800 and below, with perhaps two to three additional tiers to better support parents with school-going children, with the lowest tier receiving at least a 50% subsidy.

Alternatively, the preschool subsidy framework provides all qualifying families with a meaningful base subsidy regardless of income, with additional support determined by income. That design is both simpler and more reassuring to families navigating the system. I ask the Government to consider a similar approach for student care subsidies. The redistributive cost is relatively modest, especially when we consider our chronically low total fertility rate (TFR), but the impact on families and their confidence that the system is always working for them would give the reassurance of a more generous helping hand.

In conclusion, this Budget was delivered against a backdrop of genuine uncertainty, a shifting global order, the disruption of AI and the anxieties of working Singaporeans who worry about whether their wages, their savings and their children's future will keep up, to say nothing of the continued relevance of some jobs, particularly entry-level ones. In this context, taking care of our own represents one standard by which all Government policies will be unpacked, measured and scrutinised by the WP in this term of government. Mr Speaker, the WP supports Budget 2026.

Mr Speaker: Mr Alex Yam.

12.09 pm

Mr Alex Yam (Marsiling-Yew Tee): Mr Speaker, in Mandarin, please.

(In Mandarin): Mr Speaker, the past few years have not been calm for the world. We have just emerged from the pandemic, yet global recovery has been hesitant. Businesses have had to reorganise their supply chains and families have had to readjust the rhythms of daily life.

Just as many thought we were entering a new phase of stability, global politics suddenly shifted gears and circumstances changed rapidly. Some commentators have even described this as a kind of "gangster-style" logic in international conduct. Rules have become negotiable. Agreements can be signed and just as easily overturned.

The United State Supreme Court struck down the tariff measures, and shortly thereafter, a new 15% tariff was announced on all countries, friends and foe alike. This is not the textbook version of globalisation. It is a more direct and raw contest of power. Great power politics has returned. US-China competition continues to intensify. The Middle East remains tense, with the shadow of Iran still looming. Small and middle powers are increasingly pressured to declare positions and choose sides.

When large waves crash against the shore, small boats feel the impact first.

Singapore is not a bystander. We are a small and open economy. When storms arise, we are among the first to feel them. But amidst the storms, what ships fear most is not only the external waves, but also internal friction. Unity cannot be merely a slogan; it is the prerequisite for maintaining strategic resolve in a complex world. Therefore, in such a world, this Budget is not merely about numerical balance, but national assurance.

After the Budget Statement, over the past few days, I have heard some interesting comments. When the Government runs a deficit, it is criticised as fiscally irresponsible. When it runs a surplus, it is said to have miscalculated.

It is like a person who brings an umbrella and is mocked for being excessive, and yet if he does not bring one and gets drenched, he is mocked for being foolish. National finances are not month-end accounts. They are an intergenerational responsibility.

In recent years, our Budgets have not only met fiscal targets, we have won a larger battle. Because today, we have a surplus. Therefore, We have more "ammunition" to face the storms ahead. A surplus does not mean over-taxation. It means that in an uncertain world, we planned using conservative assumptions and reality has turned out better than expected.

If we had planned using optimistic assumptions instead, and subsequently found ourselves unable to pay for healthcare, ageing, and security, who would bear the cost?

Not the accountants. Not the commentators. It is the people. As the ancient saying goes: "One survives in adversity and perishes in comfort." When a budget aims to be "just enough", it often ends up being "slightly short". In such a world, we must build strength and prepare in advance.

Before troops move, provisions must be ready. The bow must be fully drawn, and the arrows well supplied. Only then can we act effectively when the need arises.

We must clarify a basic principle: GST is a long-term structural revenue source. A fiscal surplus is largely cyclical. Long-term responsibilities cannot be funded by short-term fortune. Ageing does not disappear with economic cycles. Healthcare spending does not fluctuate simply because one year is strong and another is weak.

Using cyclical revenue to fund permanent obligations is like using your bonus to pay a mortgage. Of course, no one says they enjoy paying taxes. But what would truly be unfair is not adjusting tax policy today, it would be having to raise taxes suddenly during a downturn tomorrow. The real question is not whether we can spend more in any particular year, but whether we can support Singaporeans sustainably over the coming decades.

Singapore's fiscal philosophy has always been simple: Plan early. Act prudently. Share gains when conditions allow. This is not poor marksmanship. It is long-range targeting. When conditions turn out better than expected, the Government returns support to citizens through various packages. That is precisely the meaning of preparedness.

As an ancient text puts it: "Digging a well when thirsty is inferior to preparing before the rain." We would rather be called conservative today than be forced into hurried tax increases tomorrow. When the world is uncertain, when great power rivalry intensifies, when supply chains and financial systems can shift overnight, a surplus is not a luxury. It is insurance.

If the next storm arrives, we will not need to borrow in haste, raise taxes suddenly, or cut social support.

That is true fiscal responsibility. Let me say candidly: A fiscal surplus does not mean people feel no pressure. Residents do not speak to us about macroeconomic indicators. They speak about daily life. They worry about: (a) Whether AI will replace their jobs; (b) Whether prices will continue to rise; (c) Whether shop rentals will increase again; and (d) Whether families can sustain expenses over the long term.

These concerns are real. Therefore, a Budget must be macro-sound and micro-relevant.

In the North West District, we run Little Steps @ North West, supporting families participating in KidSTART. Children aged zero to six receive $500 in annual support, with additional essentials provided in partnership with businesses.

From early childhood education to parent-child bonding and nutrition, we walk step by step with families. This is not a large-scale subsidy. It is a long-term investment. These measures may not be large in scale, but they are concrete. The meaning of policy lies not only in national figures, but in the small sigh of relief in everyday life.

A Budget is not merely a fiscal document. It paints a picture of the society we want. Let me use a New Year metaphor: the Yusheng. Yesterday was the 7th day of the Lunar New Year, we all did Lohei.

The fish represents the economic foundation. If the fish is not fresh, nothing else matters. AI adoption, enterprise transformation, and industry upgrading ensure that the fish remains fresh. And may our Budgets always have surplus. The shredded vegetables represent skills and education. Future security comes from adaptable capabilities, not fixed positions. Peanuts and sesame represent social support. Support for families, seniors and the vulnerable ensures that society can move forward together over the long term. This is no small matter.

The sauce represents our We-First spirit. Not "What do I get?" But "How far can we go together?" Each ingredient alone seems ordinary. But combined together, they create the flavour of the New Year. Fiscal discipline is like the golden crackers simple in appearance, yet holding the entire structure together.

Coming to the earlier topic, as great power rivalry intensifies and international law and trade rules come under strain, small and middle powers must cooperate more closely. Singapore has a responsibility to strengthen ties with other middle powers, uphold the multilateral system, and stabilise trade networks. When rules are challenged, we must stand up to defend them. This too is part of the purpose of the Budget’s support for diplomacy and international engagement.

Singapore has never grown amidst an environment of certainty. Our independence was uncertain. Financial crises were uncertain. The pandemic was uncertain. Yet each time, we relied on two things: resilience and unity. When the next wave rises, we will have the resources, societal trust and capable people. As long as we continue to move forward together, Singapore will continue to rise!

Today is the 8th Day of the Lunar New Year, I wish for favourable weather and good harvests and peace and prosperity for the country and its people.

(In English): Mr Speaker, I support the Budget.

Mr Speaker: Mr Vikram Nair.

12.20 pm

Mr Vikram Nair (Sembawang): Mr Speaker, I support this Budget. This Budget covers a great many areas and as in previous years, supports Singaporeans in a range of thoughtful ways: providing support for young families who wish to have children, working adults who need support to get better jobs, seniors to have better healthcare and quality of life in their later years and businesses as they cope with a range of disruptions.

These are all welcome measures and are possible because of Singapore’s strong fiscal position, thanks to decades of prudent financial management by successive generations of leaders.

In my speech though, I wish to focus on one area that troubles me most – the breakdown of the international world order that provided a stable backdrop for Singapore’s success since Independence.

For decades, an international rules-based order grounded in international law has underpinned global peace and prosperity. For small states like Singapore, this framework better ensured that sovereignty was respected, disputes are resolved peacefully and trade flowed freely. It gives small states like Singapore a measure of protection in a world which may otherwise have been dominated by power politics. Over the years, Singapore has consistently advocated for a rules-based multilateral system and respect for international law.

However, the global environment is rapidly evolving. We are witnessing heightened geopolitical rivalry, economic fragmentation and a growing willingness by some states to prioritise what they believe to be national interests over collective commitments. While international law remains indispensable, we must also be realistic and prepare for a world in which non-compliance is going to be more common and where major powers may not always abide by either the letter or the spirit of international commitments.

Recent events underscore this reality. Russia’s invasion of Ukraine represents a clear violation of the United Nations (UN) Charter and the principle of territorial integrity. In the Middle East, the conflict triggered by Hamas’ attacks on Israel on and the subsequent war in Gaza have intensified regional instability and humanitarian crises and the findings of breaches of international law. In our own region, tensions in the South China Sea continue to test the strength of international maritime law.

The most dramatic changes in the last two years have probably been the position of the US. The main concern last year was the imposition of tariffs on allies and competitors alike. This year, the capture of the Venezuelan President was contrary to the peremptory norms against the use of force. The US plans to take Greenland put it on a collision course with its European allies and threatened to fracture the North Atlantic Treaty Organization (NATO), especially when it appeared that the US was considering the use of force to take Greenland in its earlier statements.

Together, these statements suggest that while international law remains vital, compliance can no longer be assumed or taken for granted. For small countries like Singapore, it is especially important for us to stay vigilant and prepared to deal with emerging threats and challenges.

During the Budget debate in 2022, I said that we need to remain committed to defence spending even during times of peace, and while there will be many demands for our spending and it will always be tempting to say we should cut defence spending in times of peace, that will be a mistake. I also said that we must continue to maintain and build good and deep relations as well as mutually beneficial economic and defence ties with as many countries as possible.

I remain firmly of that view. In this connection, I welcome the Government’s continued commitment to invest in Singapore’s defence, including physical warfare capabilities as well as cyber defence and counter-terrorism capabilities. A credible and technologically advanced defence force remains the bedrock of our sovereignty.

Beyond its defence capabilities, however, Singapore has very sensibly also adopted the strategy of diversifying its foreign relationships and defence relationships. On the security front, we maintain strong and longstanding defence ties with the US, including close training and operational cooperation. At the same time, we engage constructively with other nations, including China and ASEAN partners.

As for economic trade, Singapore currently has 28 Free Trade Agreements spanning Asia, Europe and the Americas. We are part of major regional agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), which bind countries to common standards and open markets. These agreements provide multiple avenues for growth and reduce over-dependence on any one market. They also signal Singapore’s continued commitment to open, rules-based trade despite global protectionist trends.

Going forward, we must continue to champion international law and multilateralism while widening and deepening our network of partnerships. I wish to make the following observations.

First, while we continue to advocate multilateralism, it is equally important to recognise that many international institutions were established in an era where great powers were more willing to cooperate consistently within established frameworks. Today, the legitimacy and effectiveness of these institutions are increasingly being challenged due to divergent national interests and competition.

Consider the United Nations. Although the UN Charter remains the foundational framework for international peace and security, the UN Security Council has been hampered by geopolitical divisions. When permanent members are in conflict or have opposing interests, collective action can be difficult to achieve. Collective action under the UN banner has not been possible in most of the conflicts today.

For a small nation like Singapore, we must recognise that when large powers do not cooperate within multilateral fora, the system becomes weaker and the norms which such international institutions uphold become more vulnerable. Small states have the most to lose when rules are eroded.

This leads me to my second observation which is about minilateralism. As the World Economic Forum puts it, minilateralism typically involves small groups of countries or organisations collaborating to solve shared problems. While multilateral institutions remain essential, and we must continue to support them, smaller groupings of like-minded states can move faster and more pragmatically when progress stalls at the global levels through smaller agreements.

Singapore has already demonstrated this approach. For example, in the digital domain, Singapore has pioneered the Digital Economy Agreements with trusted partners to establish common rules on cross-border data flows, cybersecurity and digital trade. Such agreements help shape global norms and position Singapore as a trusted digital hub.

Going forward, Singapore can continue to champion issue-based coalitions in areas such as green and sustainable finance, carbon markets and emerging technologies. Such coalitions complement and not replace the broader multilateral system.

Third, as a small nation, it is important that Singapore strengthen its capacity in emerging domains of competition.

Today, security is multi-dimensional and extends well beyond conventional military threats. Strategic contest between nations increasingly play out in domains such as cyberspace, artificial intelligence, quantum technologies, space assets and the resilience of critical infrastructure. For example, cyberattacks can disrupt essential services including power generation and banking. Disinformation can erode social cohesion.

Singapore must therefore invest decisively in these emerging domains. Strengthening cyber defence capabilities, enhancing digital resilience across both public and private sectors, and building trusted AI governance frameworks which will be essential and which is envisioned by this Budget. By doing so, we not only protect ourselves but also enhance our relevance in the international arena.

Fourth, Singapore is in a unique position to play a bridging role in the new world order. In a world of intensifying major power rivalry, countries that can maintain credibility across divides become increasingly valuable. Singapore has long cultivated a reputation as a consistent, honest and trusted partner. We maintain strong defence and economic ties with the US, engage constructively with China, and remain firmly anchored in ASEAN. This balanced posture allows us to facilitate dialogue. Our consistency and credibility are our strategic assets.

12.30 pm

Singapore’s role is not to choose sides in power competition. It is to maintain open channels with all while remaining firmly grounded in principles of sovereignty, peaceful dispute resolution, open trade and international law.

This means we must speak clearly when rules are violated, but avoid rhetoric which will unnecessarily escalate tensions. We must continue to deepen ties broadly, so that no single relationship defines our position in international relations.

Mr Speaker, while we cannot control the direction of the global order, our preparedness to navigate the global order is within our control. By combining principle with pragmatism, and openness with resilience, Singapore can continue to thrive, even in a more uncertain world.

12.31 pm

Mr Kwek Hian Chuan Henry (Kebun Baru): Mr Speaker, over Chinese New Year, I spoke with residents in Kebun Baru about the Budget and the year ahead. What struck me about this year was how central AI has become in my conversation to them. Young graduates told me that good entry-level jobs and internships are now harder to come as companies re-organise themselves around AI.

A young academic volunteer told me a story he wanted to build a simple application. He got a quote from a local IT service company for $70,000 to build the application. He got frustrated, hired somebody from Vietnam at $10 per hour, and spent the weekend to build that same application using AI agents.

I also spoke to a tech savvy SME entrepreneur who spent his breaks in between Chinese New Year house visits, building, orchestrating AI agents to automate many parts his back-office for his SME.

I met an accountant in her 50s, after watching a clip on the robotic wushu performance, turned to her family and asked, "What happens to my job?"

And I met an investor who told me that correlation between Nasdaq and AI is now very close. He would notice a big drop in one segment of the Nasdaq stock market and that usually comes after Anthropic introduces a new part, a new module, a new feature in the systems.

So, our people have sensed that AI has matured quickly and is now reshaping lives in ways that felt theoretical just a year ago.

Prime Minister Wong has decisively centered our Budget on AI, outlining a bold vision for Singapore in a changed, AI-charged world. I want to build on this vision by speaking on three areas where I believe we can move even faster: how the Government itself builds digital services with the world's leading AI firms helping us, how we can accelerate the IT service industry, and how we ensure our SME support reach more layers of our enterprise base.

First, how can the Government build more digital services with the world's leading AI companies' support.

Today, I believe that the Government e-services are still largely procured through traditional IT methods – where AI, if used at all, is bolted on rather than embedded from the outset. AI-centric development is fundamentally different: AI is integral to design, coding, testing and continuous improvement process. Services are faster to build, cheaper to maintain and adaptive rather than ageing between upgrade cycles.

I propose that this becomes the default methodology for all new Government services and to scale it as a whole-of-Government over time.

And we should not build this alone. Over 60 companies, including Google and Microsoft, have established AI Centres of Excellence here. These firms should not only help Singapore enterprises adopt AI; they should also be co-developing our AI-centric stacked deck itself, building together with the Public Service.

This is how we build a sovereign national AI system – something I spoke about in the last Budget debate – not from scratch at prohibitive cost, but through structured co-development with the world’s best, on our terms, anchored in our values. When the Government is merely a customer, our leverage is limited. When the Government is a sophisticated co-development partner – bringing deep domain knowledge expertise of public service delivery and regulatory complexity – we deepen their commitment to Singapore and build internal capability that stays here.

Beyond our own services, Government should revive the spirit of the Industry Transformation Maps (ITMs) with an AI-centric lens – working together with Prime Minister Wong’s four AI Mission sectors to identify common problems solvable through AI across different sectors and building shared solutions together with the industry.

Next, how we accelerate the IT services industry. Singapore's IT services industry – the firms that actually deliver technology projects across the public and private sectors – may not be adopting AI-centric development fast enough. These firms are the delivery layers between AI strategy and real world outcomes. If they do not transform, the strategy stays on paper.

This is not a talent problem. Our tech workers are ready – curious, hungry and well-educated. The bottleneck could be structural inertia within the IT services firms, compounded by the complexity of making AI-centric development enterprise-grade.Large companies have found it easier to continue with familiar methods while adding AI as a cosmetic layer.

Therefore, I propose a phased mandate: Government IT contracts should progressively require AI-centric development methods. New projects first, legacy contracts given longer runways and a clear three-to-five-year transition pathway.

This is not without precedent – we mandated Building Information Modeling (BIM) adoption in the construction industry and we can transform that. When the Singapore Government becomes the driver of demand, industry follows.

Alongside the mandate, the Government should also transfer its frameworks and playbooks to polytechnics, universities and IT service firms. And over time, Singapore's AI-centric methodology will not just become a public sector asset but something that will drive industry capability.

Third, our SME support can be more differentiated. When it comes to AI, two groups are ready to move, and they need different support.

The first group are SMEs led by founders with strong technology backgrounds like the SME entrepreneur I mentioned about – programming using AI agents over Chinese New Year. For these founders, the barriers to scale have collapsed. They understand understand AI and can now grow at speeds previously requiring the capital and headcount of a much larger enterprise.

Yet our bespoke innovation grants have traditionally been reserved for larger companies. And I urge the Government to open these grants to tech-capable SMEs – these are Singapore's next generation of high-tech growth.

The second group are conventional SMEs that need help adopting AI in day-to-day operations. Here, Prime Minister Wong's expanded Productivity Solutions Grant (PSG) is the right instrument. But the approved vendor list today are very traditional tech companies. Over time, there will be a growing tier of AI-centric firms delivering accounting, payroll, marketing services or products. I hope the Government can consider actively onboarding these firms as PSG-approved vendors, and co-fund the transition cost, so that conventional SMEs can access them quickly.

Taken altogether, some will argue that the AI levels the playing field against Singapore. In a narrow sense, they are right – a talented developer anywhere, armed with enough AI tools and call code credits, can generate entire applications overnight. On a pure cost, we were never going to win this race. But this is the wrong race to run.

The Economic Development Board (EDB) has long described Singapore's value proposition as Trust, Knowledge and Connectivity. AI-centric development does not erode this advantage – it amplifies them.

On trust: in an AI-centric world, where AI agents transact and AI systems make decisions, trust becomes the most precious commodity in the digital economy. Businesses will site AI operations where they trust the legal framework and the Government behind them and Singapore has spent decades building exactly this trust.

On knowledge: the tacit knowledge – the kind that cannot be Googled or prompted – lives in the relationships and expertise of the people based here. AI can accelerate the application of our knowledge.

On connectivity: we have at least seven distinct global hubs – aviation, shipping, regional headquarters, advanced manufacturing, biotech, chemicals, electronics, and finance – co-located on 700 square kilometres.

The collaboration density, between the hubs themselves and the world they connect to, is something no amount of digital connectivity can replicate. In an AI-centric economy, where the most valuable innovations emerge at the intersection of industries, this co-location is a profound and durable.

If we move fast enough, if we adopt AI-centric development in Government, bring our IT services industry with us, and equip many layers of our SME industry, AI gives us the chance to not just manage our constraints but re-invent our economy on foundations that took decades to build, and that no competitor can replicate overnight.

Mr Speaker, let me now speak briefly on our Public Service Media. The advantages I have described – Trust, Knowledge and Connectivity – do not sustain themselves. They require institutions to uphold them.

Sometime ago, I had a chat with our Minister Josephine who leads Ministry of Digital Development and Information (MDDI), she describes our Public Service Media (PSM) as Singapore's truth infrastructure. I would go further than that. I would say that our PSM are not just Singapore's truth infrastructure but also our trust infrastructure.

The Straits Times has a place in the hearts of most of our people. Zaobao is already the most respected international Chinese-language outlet globally. CNA commands with credibility far beyond our shores and with strategic investment, The Business Times could become the Financial Times of Southeast Asia.

In an age of AI-generated disinformation, they stand between our people and a manipulated information space.

I urge the Government to make sure that they are adequately and sustainably funded, and that our media professionals find a compelling future in them. Because our media is a source of our trust, and is a key voice of our soft power.

My last point is about a home for every family. A nation's ambition is not only credible if people feel secure in the most basic of things and I commend the Ministry of National Development (MND) for continuing to build housing quickly.

There is one group that I would like to speak up for today, which is the sandwiched-class families with decent incomes who could comfortably service a mortgage but cannot secure loans from banks and Housing and Development Board (HDB).

Their incomes are too high for public rental, and Parenthood Provisional Housing Scheme (PPHS) requires a waiting Build-To-Order (BTO). They are left paying high rental rates, with no clear pathways of getting their roof over their heads somewhere.

I understand that this group have a lot of complexities and it is not due to any one source of difficulty that they face, but I hope the Government can consider a targeted programme, like how we invented Fresh Start for people in rental estate but the targeted programme helps this group that I mentioned with some of the following features: selective offering of HDB loans, Government-backed mortgage guarantees with maybe a bank like DBS, a structured pathway for BTOs where demonstrated income stability unlocks eligibility, or access to long-term affordable rental while they rebuild credit.

The gap is real, and these families deserve a pathway.

Let me conclude. Mr Speaker, Budget 2026 reminds me of the many Budget discussions and debates we had during COVID. Then, the rest of the world were dealing with COVID. But our Budget not just helped us deal with COVID but also prepared Singapore to emerge stronger together from COVID.

Today, just look at the headlines. The world, and even the major powers, are bogged down by geopolitical conflict, internal disputes and disarrays, and trade or even economic wars. In marked contrast, here in this Parliament, we are discussing a future forward Budget that not just responds to a changed world but also prepare ourselves to emerge stronger together in this AI-charged world. Therefore, Mr Speaker, this Budget deserves our full support.

12.43 pm

Mr Gerald Giam Yean Song (Aljunied): Mr Speaker, the 2026 Budget Statement arrives at the moment of profound transformation. Globally, we are navigating tectonic shifts in security, trade and technology, while domestically our workforce is feeling the weight of disruption alongside continuing cost of living pressures.

The Prime Minister describes our current fiscal position as fortunate, citing a revised FY2025 overall fiscal position that has resulted in a surplus of $15.1 billion. This is attributed largely to the fund-loading of investments and a significant revenue surge.

Yet for many Singaporeans and local small businesses, this success feels distant. More than 2,400 retail food establishments closed last year. Youths under 30 are experiencing unemployment rates, almost double the national average.

As the Association of Small-and-Medium Enterprises (ASME) highlighted, we are witnessing a two-speed economy despite positive aggregate macro-economic data, local SMEs find themselves squeezed by a perfect storm of rising and operating costs and weaker domestic demand.

ASME pointed to a productivity and contribution imbalance: large enterprises contribute 74% of the nation's nominal value-added even though they employed just 30% of the national workforce; in contrast, micro and small enterprises contribute only 11% of the value-added despite employing 45% of the national workforce. This revealed a staggering labour productivity gap. Since wage growth is only sustainable when backed by productivity, when micro and small enterprises are stuck in a low productivity second speed, it becomes supremely challenging for them to offer the competitive salaries needed to combat the rising cost of living.

Furthermore, as we look toward a future shaped by rapid AI integration and automation, we must confront the risk of structural jobless growth where corporate profits and GDP continue to growth much faster than the labour market. We must put our huge fiscal surpluses to use to support and empower the workers and sectors that find themselves stuck in this slow growth track. It is only by doing so that we can secure the necessary social licence for continued high growth strategies in elite sectors. When the average Singaporean sees tangible structural benefits from these outsized gains, rather than rising inequality, it fosters the public trust and political consensus required to maintain our open and competitive economic model.

The House should examine the Government's recurring pattern of overly conservative fiscal projections. The revised FY2025 surplus of $15.1 billion is more than doubled the original estimate of $6.81 billion. This $8.26 billion discrepancy is not an isolated incident. It is part of a trend where projected deficits regularly transform into healthy surpluses. While the Government points to the volatility of tax revenue, this consistent underestimation raises fundamental questions of whether the Government is unnecessarily hoarding funds. We need more accurate forecasting that ensures our nation's abundance, benefits current generations as much as future generations.

This fiscal abundance also raises questions about the Government's tax strategies. With surpluses of well over $1 billion in all but one of the last five years, totalling $22 billion, should we re-evaluate the necessity of the GST hike? The Government said that the GST hike was meant to fund the increased healthcare spending in an ageing society. But the Ministry of Health's (MOH's) revised FY2025 Operating Expenditure was $305 million lower as estimated, mainly due to lower than projecting funding needs for public healthcare institutions. Will the Government be revising its projections for future increases in healthcare expenditure?

True prudence is not just about amassing vast fiscal buffers. This is about balancing future security with the current needs of our people. Unnecessary taxation drains liquidity from households upfront, creating a dependency on Government handouts, rather than fostering genuine financial independence. Furthermore, it acts as a handbrake on economic growth by constraining household spending.

In 2025, vehicle quota premium collections were 31% overestimates, reaching $8.66 billion. The Certificate of Entitlement (COE) was a primary driver of our massive surplus and the Government expects even more next year, projecting $9.42 billion in revenue.

I am concerned that the Government may be reliant on high vehicle costs to anchor its fiscal position. This could create a perverse incentive to allow the COE to remain high and result inertia against necessary reforms to the COE system, which my hon friend Assoc Prof Jamus Lim, the Member of Parliament for Sengkang had called for in his Adjournment Motion last September.

There are other significant revenue spikes that I seek clarification from the Minister.

Revenue from licences and permits has searched by $2.08 billion, a 29% increase from the original estimate to the revised FY2025 figure of $9.23 billion. According to MOF's analysis of revenue and expenditure 2026, the transition to the new Singapore Public Sector Chart of Accounts makes year-on-year comparison for this item not meaningful due to changes in scope. However, this accounting reclassification alone does not explain why the Government collected $2 billion more than it told the House that it would just a year ago. Can the Minister clarify what specific licences or permits drove this increase and whether this represents a permanent increase in a regulatory burden, borne by our households and businesses?

While reclassification of the FY2025 figures is promised for FY2027, was there some difficulty in providing it in this year so that Parliament could probably track spending changes for this debate? Without a clear bridge between the old and new systems, there is a risk of losing oversight of expenditure growth.

Turning to technology, our AI roadmap must look beyond white-collar co-pilots. To ensure an inclusive social compact, we must deploy physical AI for blue-collar workers in manufacturing and logistics, for example. This could include tools like wearable haptic sensors that alert workers to ergonomic risks to prevent long-term injury or collaborative robots, to assist with heavy lifting on the factory floor.

Furthermore, AI can be a powerful tool for blue-collar workers who may struggle with English Language constraints. It can translate vernacular dictation into professional English documentation in real time, allowing workers to focus on their technical expertise rather than linguistic hurdles. These tools enable productivity gains that lead to enhance wages and reduce physical strain for those on the front lines. AI should be an equaliser that elevates technical mastery, not a wish that separates our workforce.

The Government has also allowed 400% tax deductions on AI expenses. I propose that these should include corporate AI subscriptions to give workers access to corporate AI tools to improve their daily productivity while keeping company data secure. Giving every worker a digital assistant should be a baseline goal for our nation that aspires to be an AI leader. This ensures that the benefits of the technology are shared by employee and employer alike.

Regarding our social safety net, a gap remains for the sandwiched generation, which falls just outside existing means testing thresholds. We need a more holistic means testing model that looks not just at gross income alone but disposable income after essential expenses are deducted. For example, a household earning $9,000 with special needs children or elderly parents requiring chronic care, may be functionally less wealthy than a household earning $3,000 with no such burdens.

Furthermore, I urge a shift towards individual base assessments for our seniors to better protect their dignity. No senior should ever be forced to plead with an estranged adult child for financial support simply because that child's income is bundled into the per capita household income calculation. When subsidies are tied to the disclosure of a child's salary, we leave vulnerable seniors at the mercy of strained family dynamics. Our social safety net should be anchored more to a senior's individual income instead of their children's, to ensure they receive the care and support that they need.

The Ministry of Trade and Industry's (MTI) development expenditures is estimated to double to $9.24 billion in FY2026, which is an increase of $4.32 billion in a single year. While the Government says this increase is mainly due to initiatives to enhance Singapore's economic competitiveness in an uncertain global environment, can the Minister shed more light on a specific milestone this money is expected to achieve? For comparison, the entire development budget for the Ministry of Social and Family Development (MSF) is a mere fraction of this, at just $260 million.

There seems to be a disconnect between the Government's own risk assessment and its fiscal response. The Budget Statement identifies significant risks from an AI benefits reassessment and global trade tensions. Yet, the fiscal impulse of Budget 2026 is only 0.6% of GDP. This stance appears rather passive. If the risk of job displacement and investment decline is as real as the Government acknowledges, our fiscal injection should be more robust and proactive, particularly when we are riding on a huge surplus from the previous year. We should be building more buffers for our workers now rather than reacting after the displacement begins.

Finally, on the matter of security, the Prime Minister stated that defence spending will remain at 3% of GDP. Can I ask if this includes the cybersecurity budgets across the Government, including those under the Cyber Security Agency for the protection of critical information infrastructure? With the rise of in sophisticated cyberattacks and hostile information campaigns, it is essential to know the true allocation of security resources.

Mr Speaker, a budget is more than just a balance sheet. It is a statement of our national values and priorities. We cannot be a nation that celebrates multibillion dollar surpluses while our middle-income families are squeezed, our seniors fear being a financial burden on their children and our workers worry about a digital future that feels out of reach. Let us build a social compact that does not just manage growth but shares it fairly and transparently. We should measure our success not by the absolute size of our reserves, but by the security, dignity and peace of mind of every Singaporean. Sir, I support the Budget. [Applause.]

Mr Speaker: Mr Victor Lye.

12.56 pm

Mr Victor Lye (Ang Mo Kio): Mr Speaker, I rise in support of Budget 2026. I will speak about Singapore as a networked economy with trust as our new factor of production.

Economists have studied the classic factors of production, land, labour, capital and later adding entrepreneurship in the 1800s. In this uncertain fragmenting world and AI acceleration, I see a new factor of production – trust.

Trust is intangible. Yet, it behaves like infrastructure. Trust enables flows – capital, data, talent, goods, decisions. Trust increases resilience to shocks. Trust is the reliability premium that allows counterparties to transact, coordinate and commit to actions at scale, even in the face of uncertainty. For Singapore, as a small city-state, this is and should be our competitive advantage.

In 1965, our population was a mere 1.9 million. Today, as a first world nation, we have 3.7 million Singaporeans, 4.2 million if we include Permanent Residents (PRs). Singapore is small. Compare this to Tokyo, a city, 37 million people; Delhi, 36 million people; Shanghai, 21 million people; London, 10 million people; New York, eight million people – you get the picture. Even Kuala Lumpur (KL) and many of our Asian capitals/cities have a few times multiple, more people than Singapore. Large countries within hinterlands can rely on internal markets, domestic, resources, national industrial stacks.

Singapore has no hinterland. Instead, our hinterland must be how deeply we connect to the rest of the world. I see Singapore therefore as a networked economy, where trust becomes the connective tissue that allows a small node like Singapore to orchestrate value across a much larger space. To be a successful networked economy in this globally fragmented and accelerating AI world, trust becomes our factor of production, our competitive advantage.

Budget 2026 identifies four AI missions – finance, health, advanced manufacturing and connectivity. Seen through the lens of trust, these missions are strategic growth pathways.

In finance, AI can position Singapore as the world's most trusted digital custodian enabling secure asset verification, counterparty validation and trusted trading ecosystems. In health, Singapore can be a trusted hub for clinical trials, diagnostics and genomic innovation. In advanced manufacturing, by anchoring intellectual property with trust, Singapore can embed itself in high value global supply chains. Lastly, connectivity. For example, as a port, we cannot just compete by the number of boxes we move. We must use AI to pivot from moving boxes to become trusted coordinator, the operating system that optimises flows across ports, even across geopolitical boundaries.

Mr Speaker, ultimately, Budget 2026 AI Missions must translate into real benefits for our people. When we are the trusted node in supply chains, essential good for Singaporeans continue to flow even during crises. We can create trust-centric jobs, coordinating systems, validating data, ensuring digital security. In an AI driven world, Singaporeans can become that human layer of trust, providing empathy and compassion, on top of credibility and judgement which AI cannot.

Trust can be our new fact of production, our competitive advantage for a small city state, a network economy. Budget 2026 begins this journey. I propose three areas for consideration.

One, institutionalise trust infrastructure. Why not develop regulatory sandboxes where AI innovations are tested and centered in Singapore using our trusted governance frameworks? In this way, Singapore exports trusted governance alongside technology.

Two, create global trust credentials to enable not just Singaporeans or Singapore firms but also foreign companies and professionals to carry trusted Singapore verified credentials, demonstrating compliance, skills and experience.

Three, develop trusted connectivity standards in sectors important to Singapore such as maritime, aviation and digital trade. Singapore can develop trusted coordination standards. Stewardship of such standards creates relevance and trust for others to deal with us Singapore.

Mr Speaker, as a small city state, Singapore cannot out bill the large countries. We cannot outnumber the world. With the fragmenting world and AI acceleration, we can however, be that beacon of trust for the world as a networked economy.

When the world asks: "Who can we work with?", "Who can we rely on?", "Who can coordinate these critical systems for the world?", let the answer be Singapore. Sir, I support Budget 2026.

Mr Speaker: Mr Yip Hon Weng.

1.03 pm

Mr Yip Hon Weng (Yio Chu Kang): Mr Speaker sir, I declare that I work in a global investment firm looking at human capital ecosystem strategies. In my work, I have seen how capital relocates amidst volatility, how labour markets adjust when technology shifts, and how nations either manage transition wisely or struggle when they do not.

My reaction to Budget 2026 is this: Singapore’s budget surplus reflects global volatility and our strategic credibility. In a fractured world, capital flows toward stability, predictability and the rule of law. That is a vote of confidence for Singapore.

I welcome the Government’s steady fiscal discipline. At a time when many countries wrestle with debts and deficits, Singapore’s prudence is an asset. It gives us room to act, credibility to lead and options in uncertainty. But volatility-driven gains are not permanent gains. Cyclical surpluses are not structural revenues.

In a more dangerous world, fiscal strength is national defence. Our buffers are not excesses, they are strategic insurance. They safeguard our sovereignty, resilience and freedom of action.

As Chair of the Defence and Foreign Affairs GPC, I say this with conviction: fiscal resilience is strategic capability. It ensures we are not forced into decisions by constraints. It preserves our strategic autonomy when circumstances demand it.

At the same time, given the current surplus position, perhaps we can signal stability by avoiding further tax increases in the near term. I recognise that Government will, when necessary, need to raise revenue. But where new measures are introduced, they should be calibrated carefully and remain progressive. Perhaps there should be no additional effective burden on lower-income households and revenue adjustments should be designed with cost pressures firmly in mind.

This is not to question earlier fiscal decisions. It is simply to say: where space exists, we should use it to cushion households and strengthen trust. Because trust in fiscal policy underpins trust in everything else.

And trust must also underpin our AI transition. The AI transformation is not theoretical. It is structural, it is global, and it is accelerating.

Recent analysis from technologists observing the frontier makes this clear. Model performance is not merely improving incrementally, it is compounding. Tasks that required research teams a year ago can now be done in weeks. Tasks that required weeks can now be done in hours. What appears gradual suddenly crosses a threshold and becomes transformational.

AI is no longer assisting humans at the edges. AI is helping to build the next AI. Engineers use AI to write code, debug systems, test approaches and accelerate research cycles. But the recent AI coding revolution does not stop at engineers and programmers, because code is essentially logic and workflow. And it is enterprise logic and workflow that is the fundamental basis of many knowledge jobs. This means that AI's ability to generate code and write software autonomously could eventually have greater implications on all knowledge workers, not just programmers.

When improvements accelerate the next round of improvements, change does not move in a straight line. It begins to move like a wave.

Last week, I met a young Singaporean named Amir outside a tuition centre in Yio Chu Kang. He was waiting for his sister. In his hand was a neatly printed curriculum vitae (CV). Three pages. Strong verbs. Clean formatting. I asked whether he had hired a professional writer. He laughed and said, “No, I used an AI tool to help me. It rewrote my CV. It drafted cover letters. It even suggested interview answers.” Then he paused. “But if AI can write my CV better than I can,” he said quietly, “what happens when it can do my job better than me?” He was not dramatic, he was also not angry. He was simply uncertain. That uncertainty is what many Singaporeans feel.

The International Monetary Fund (IMF) estimates roughly 40% of jobs globally are exposed to AI. In advanced economies, exposure approaches 60%. Goldman Sachs estimates generative AI could affect work equivalent to 300 million full-time roles. These are not alarmist numbers. These are structural signals.

Stanford Prof Erik Brynjolfsson recently argued that the long-awaited AI productivity take-off may now be visible. In the US, payroll growth was revised downward by over 400,000 jobs even as GDP grew 3.7% in the fourth quarter. Output held steady while labour input declined. That is the hallmark of productivity growth.

Productivity rose about 2.7% in 2025, nearly double the previous decade’s pace. First comes investment, then reorganisation, then, if we get it right, harvest. But harvest is uneven. Some firms adapt faster, some sectors benefit earlier, others face displacement sooner. And here is the elephant in the room. Mid-career workers are already feeling automation’s pressure. The accountant whose reconciliation tasks are automated, the marketing manager whose drafting work is compressed into minutes, the operations executive whose reporting is replaced by dashboards.

These are not statistics. These are parents, caregivers and Singaporeans with responsibilities. They want to remain useful, valued and respected in their work.

Productivity can rise even as some workers experience displacement. Our task is not to deny disruption. It is to govern it. Allow me to group my proposals into three themes.

First, Mr Speaker Sir, measure what matters. AI Missions deserve praise, but alongside ambition, we need measurable labour outcomes. What three to five key performance indicators (KPIs) will be published annually that are explicitly job linked? For example, net new roles created, wage uplift achieved, time to redeployment, share of SMEs scaling AI beyond pilots. If this transformation is national, its scorecard must be national and human.

AI Champions must not become theatre. What is the gating bar? It should include data readiness, genuine process redesign, measurable productivity gains and meaningful workforce upgrading. And if firms cannot demonstrate transformation beyond pilot projects within a defined period, support should be reviewed and if necessary, withdrawn.

Second, Mr Speaker, Sir, protect pathways. Globally, the first wave is not mass layoffs but junior tasks disappearing: drafting, summarising, first-pass analysis. Will AI Mission partners redesign entry-level pathways so that young Singaporeans still get a real first job, real mentorship and real responsibility, even as AI takes over routine tasks?

The future belongs to “AI conductors”, not merely “AI users”. Our juniors must learn to curate, steer and verify AI outputs. The competitive advantage is not pressing “generate.” It is about asking the right questions and judging the answers. If we lose the first job pathway, and if our juniors never get the chance to learn how to be "AI conductors", we lose the future workforce.

For mid-career Singaporeans, the fear is not only unemployment, but stagnation and even decline. Will AI support be conditional on job redesign and wage progression commitments? If gains flow only to the margins and management, social cohesion erodes. Six months of premium AI tools must not become tokenism. Access is not mastery. How will we measure demonstrable skill acquisition through portfolios, assessed projects and recognised credentials Workers need employability, not just exposure.

Third, Mr Speaker, Sir, build shared capability and trust. Do SMEs have sufficient compute and infrastructure? Will we provide shared credits, secure data environments and reference architectures so that they can compete responsibly? Without shared capability, we risk an AI divide.

In regulatory sandboxes, who bears the liability? When AI affects hiring or evaluation, what is the audit framework? Speed without accountability breeds backlash. And how do we remain trusted without slowing deployment?

What is the AI Council’s explicit speed-with-safety model? This should include: tiered risk categories, standardised evaluation, fast-track approvals for low-risk use. Trust must not become friction. Speed must not become recklessness.

Will the Government lead by example? Will the public sector pair AI adoption with systematic job redesign and publish measurable outcomes?

In conclusion, Mr Speaker, Sir, two centuries ago, in the English Midlands, groups of skilled textile workers gathered at night. They broke into mills and smashed the mechanical looms, the industrial weaving machines that automated the production of cloth, because they believed those machines would destroy their livelihoods. These workers came to be known as the Luddites. They were not ignorant men. They were craftsmen, fathers and providers who feared that mechanisation would render their skills obsolete.

History remembers them as opponents of progress. But here is the twist. The looms did not destroy prosperity, they transformed it. Industrialisation was painful and disruptive, but the societies that adapted built new industries, new skills and eventually a broader middle class.

The lesson is not that technological change is painless. It is that refusing to prepare does not preserve dignity, preparing does. AI is technological change. It is not to be feared. It is not to be ignored. It is to be governed.

But AI moves at digital speed. The Luddites had decades. We may only have years, perhaps only months. History also warns us that when ownership concentrates and meaningful work disappears, inequality hardens. If AI disruption results in productive assets concentrated in a few hands while working people are excluded from opportunity, social strain follows.

But that outcome is not inevitable. Every major technological disruption has also created renewal. AI can expand opportunity if directed wisely. That means preparing our workforce today. It means equipping our workforce tomorrow. It means being prepared to recalibrate policy as the technology evolves.

The future will remain uncertain. But this Government does not sugar-coat reality. The PAP has never shied away from harsh truths. We will be honest about the challenges on the ground. We will be honest that some jobs will change. We will be honest that some roles will disappear. And we will be honest that the transition will not be easy.

But we will also be clear about this: we are here to walk with Singaporeans through the tough times.

Let me return to Amir. When I saw him again, he had enrolled in a course. He was no longer asking what AI could do for him. He was asking what he could become.

“The tool is not the point,” his instructor told him. “Learning how to think is the point.”

“I realised,” Amir said, “that I needed to level up.”

Mr Speaker, that is the future we must design. Not a future where workers are discarded. Not a future where productivity rises but trust falls. But a future where productivity funds mobility and automation finances upgrading.

If we prepare honestly, govern wisely and act courageously, Singapore will not merely endure this wave of change. We will rise with it. If we get this right, Singapore will not merely adopt AI. We will guide it. We will shape it. We will humanise it. And together, we will shape the future of Singapore. Thank you and I support the Budget.

Mr Speaker: Assoc Prof Terence Ho.

1.17 pm

Assoc Prof Terence Ho (Nominated Member): Mr Speaker, thank you for the opportunity to join the debate. I would first like to congratulate the Prime Minister and his team on the forward looking and comprehensive Budget that speaks to the wide-ranging needs of our economy and society. I will make some broad remarks on the Government's fiscal position and spending and use the rest of my speech to outline four priorities that I believe are critical for Singapore's future.

As many have observed, what stood out in this year's Budget statement is the sizeable surplus that the Government is expecting for FY2025, and the positive fiscal outlook in FY2026 and beyond. Looking around the world today, a strong fiscal position is both rare and enviable. Fiscal strength allows for policy optionality and gives confidence that the Government has the resources to carry out its policy agenda.

As a public policy academic, I often speak to visiting delegations of public officials from other countries. Many are eager to learn how Singapore has accumulated reserves and achieved such a healthy fiscal position, and they want to learn how their countries too can strengthen the public finances.

However, the accumulation of our reserves was more or less unique to our circumstances, enabled by a confluence of historical factors as Singapore successfully rode the early wave of globalisation. This is not easily replicable by other countries today, nor can the Singapore Government expect to run large surpluses every year as spending needs grow.

The question then is how the Government can best deploy the fiscal resources at its disposal today. Should the Government set them aside for a rainy day by replenishing the reserves, earning financial returns in anticipation of future spending needs and exigencies, or should we invest in our earning capacity – in infrastructure capabilities and human capital? Or should we strengthen social support dealing with the challenges we face here and now, which is so important for a sense of assurance and solidarity as a nation?

We must, of course, do all these. The question is one of balance and I think there is a judicious mix of each in this year's Budget, which will allow us to address immediate challenges while positioning Singapore well for the future.

Singapore is doing fairly well as a nation. As an optimist, I am inclined to see the glass is half full rather than half empty. One could even say that for Singapore, the glass is more than half full. But even if the glass is, say, three quarters full, we cannot be complacent as the shortfall represents Singaporeans who are struggling or insecure. Gaps matter even in a nation that is doing well overall because social cohesion depends not on averages but on those at the margins.

What we do to support fellow citizens could determine whether we remain a cohesive society or become one that is divided along socio-economic lines. As a nation, we need to address the gaps with boldness and urgency, and the willingness to transcend existing policy paradigms, because of the scale of the challenges we face, spanning the costs of living, wealth disparities, workforce disruption and population ageing.

I will touch on four areas I think need our attention and resources. They form the acronym "FEAT" – "F" for future readiness, "E" for empowerment, "A" for assurance and "T" for togetherness. These priorities are mutually reinforcing. Future readiness creates opportunities. Empowerment enables Singaporeans to seize these opportunities. Assurance provides the confidence to navigate change and Togetherness sustains the trust that underpins our shared progress.

Let me begin with future readiness.

This year's Budget focuses on frontier technologies, notably how Singapore can build a competitive, AI-enabled economy. We are strengthening our security against new threats, expanding our infrastructure capacity ahead of time and building capabilities in areas such as nuclear energy, to give us more options.

In an uncertain world, adaptation matters more than prediction. This is important, not just at the national level but also for organisations and individuals. I am glad that firms will receive support to use AI to transform their business through the new Champions of AI programme and will also be able to tap the enhanced Enterprise Innovation Scheme and the Productivity Solutions Grant. I look forward to more details of these schemes.

How firms rework business processes will be critical, whether they use AI to augment or to replace human contribution. There is a need to support firms in building capabilities for human-centric job redesign. Fundamentally, too, we will need to redesign jobs so that the jobs in demand are also the jobs that Singaporeans aspire to do. I will elaborate on this at the MOM COS debate.

Ultimately, preparing for the future is an individual responsibility as well. It requires a growth mindset. We are not defined by our PSLE score or "O" level grades, but by our willingness to learn throughout life.

Last year, I took part in an SG60 commemorative book project entitled "Redefining Singapore". One of the contributors to the book, Mr Mohammad Saleem, overcame a troubled youth to become the founder of a social enterprise that provides life coaching. Drawing on his own life experiences, Mr Saleem contributed one of the best chapters of the book. It was deeply inspiring and beautifully written. In both his writing and speaking, Mr Saleem stands out, even among the many eminent contributors to the book. His life story is a testament to the potential that is in each of us and how far we can go if we keep learning and improving ourselves.

The second priority I would like to highlight is to empower Singaporeans to pursue excellence. Singapore is where it is today because generations of Singaporeans gave of their best, pursuing excellence in what they did. While we are more comfortable and affluent today, we cannot afford to lose this drive for excellence and, along with it, our society's dynamism and verve. Affluence does not mean we grow soft as a people. Instead, we should think of our resources as an enabler, a springboard to greater achievement.

I am not referring to excellence that is narrowly defined, nor am I asserting that the pursuit of excellence should be at the expense of physical or mental well-being. In fact, our society ought to have a place for some who run faster and others who prefer a slower pace, recognising that people at different stages of life and career will have different priorities.

But as a society, we need a critical mass of highly motivated people with the hunger and drive to succeed. This is not about hyper-competition but about setting high standards for ourselves, not being satisfied with the status quo but pushing the boundaries of possibility, often through collaboration with others.

I know a teenager who constantly challenges his own limits, whether it is learning mathematics, programming, playing music or learning to juggle. Whenever he has mastered something, he was always on to the next target. His intrinsic motivation stems from curiosity, challenge and purpose, rather than extrinsic rewards. I hope this kind of spirit will be pervasive among our youths. We must encourage and empower Singaporeans to be the best each of us can be, whether in creative, sporting or academic pursuits, or in serving the community.

In sharing about Singapore's social policy with visitors, I often describe Singapore as a social investment state, where social policy is geared towards education and skills development to enable people to earn a good living. This includes significant investment in our national schools and preschools, as well as in lifelong learning.

Despite these efforts, we know the playing field is not level. Children from affluent families have access to private tuition and enrichment programmes spanning both academic and non-academic domains. The question is whether, as a society, we can provide even more resources and opportunities for children from lower-income or disadvantaged households. The idea is not to fuel an education arms race, but to expand equitable access to programmes that are truly helpful in nurturing passion and potential.

One possibility is to liberalise the use of Edusave to cover high-quality, non-school-based enrichment activities. To narrow the opportunity gap, the Government could provide children from lower-income families with additional support via the Child Development or Edusave accounts – in other words, make Government contributions to these accounts progressive. Donors could also be encouraged to top up the accounts of less well-off children identified by schools or community organisations with matching funding from the Government in the spirit of a "we first" society.

It is important to provide opportunities, not just during the schooling years, but also into working life and it is not just the Government's responsibility. I know the chief executive officer of a private equity firm who, instead of only hiring top graduates from brand name universities, makes it a point to give opportunities to those from modest family backgrounds and less well-known institutions. A number of those he has recruited and mentored have gone on to become successful investment professionals. Their success illustrates how opportunity, mentoring and the willingness to look beyond credentials can unlock potential that might otherwise remain untapped.

Empowerment enables social mobility and is vital for a fair society. There is also tremendous benefit to society when more have the opportunity to fully realise their potential.

Next, I will talk about strengthening assurance and social inclusion. Singapore is an expensive city, but it must never become an excluding one. The cost of living will always be high because land is scarce and incomes generally high. Prices are high because of supply and demand. Many shops and eateries set prices according to what most Singaporeans can afford. We must therefore ensure that those who are less well-off are not excluded from mainstream life in Singapore, for instance, by having to forgo social gatherings because they feel they cannot afford to pay for a meal or a shared activity.

The past two decades have seen many groundbreaking policy innovations to strengthen social support and assurance, but we must go further because there is still an assurance gap for many Singaporeans. The aim must be for citizens to feel a greater sense of financial assurance. This is necessary for our social compact, so that we can face challenges together with confidence. It is also a pre-requisite for public support for Singapore to remain an open economy.

There are many ways to strengthen assurance and support, but each comes with trade-offs. If the Government holds down prices or rents, this may distort price signals and reduce market efficiency. If the Government mandates high wage floors, this may raise business costs and crimp employment. The Government could provide more direct support to the less well-off via social transfers, but this would incur fiscal costs and may affect incentives to work.

This is not to suggest that we do nothing but rather to highlight that strengthening assurance inevitably involves trade-offs. Greater support may entail fiscal costs or modest efficiency losses but the society that provides confidence and dignity to its citizens is ultimately more resilient and cohesive.

I have three suggestions for social policy.

The first is to reframe or reposition CDC vouchers. Singaporeans are, by now, very familiar with CDC vouchers, which we have received yearly since 2021. If I am not wrong, the value of CDC vouchers, SG60 vouchers and LifeSG credits announced in last year's Budget amounted to over $3 billion. However, the vouchers also appear to some as mere band aid for the cost of living, something that is neither sustainable nor targeted.

I take a different view. I see a useful role for vouchers and credits in our social support system, complementing structural or permanent transfers, such as the Workfare Income Supplement, Silver Support Scheme, the GST voucher, along with healthcare and housing subsidies. The advantage of vouchers is that they can be sized according to needs. For instance, more can be given when inflation is high and cost of living pressures are elevated, and when more fiscal resources are available, I believe that with a reframing, the role of the vouchers would be better appreciated by Singaporeans as a form of support that is anchored in the shared ownership of Singapore's success. The vouchers and credits could be repositioned as a social dividend, an annual sum given to citizens that signifies that they have a stake in the country and its collective wealth.

The Government can determine the size of the dividend it declares each year, depending on prevailing fiscal and economic conditions. The dividend should be universal and progressive, meaning that everyone receives something, while the less well-off receive more. A social dividend would be a form of social support that compliments the structural transfers, is flexible in size and sends a clear message of solidarity and inclusion. This reframing would shift the narrative from short-term relief to shared participation and in national progress.

The second suggestion is to give low-income households part of the social dividend in income-generating assets and securities, beyond just cash and vouchers. The Government has already adopted various forms of asset-based social policy. These include the CPF system to build up savings, the home ownership policy that has given most Singaporeans valuable housing equity and periodic CPF top-ups for those with less retirement savings.

The Government could consider broadening the types of transfers to include income-generating assets, such as mutual funds. This could be designed so that recipients would not be allowed to sell these assets within a certain vesting period and can earn a stream of income from them over time. Asset-based transfers can strengthen financial resilience and foster a shift in mindset, from short-term spending to long-term wealth building and stewardship. Provided they are carefully designed to manage market risk and complexity, such measures offer a complementary pathway to narrow wealth gaps and broaden participation in asset ownership.

Third, we need a sharper focus on affordability as a policy objective vital to social inclusion. There are already affordability indicators for public housing, such as the ratio of new flat prices to incomes; and for healthcare, the share of out-of-pocket expenditure in total health spending. We could likewise track the percentage of households whose expenditure on food, utilities and other essential goods and services exceeds a certain proportion of their income.

Publishing a concise set of indicators covering housing, healthcare and essential consumption would deepen public understanding of cost pressures, and support evidence-based adjustments when needed. It is particularly important that low-income Singaporeans have sufficient consumption choices, so that they can participate fully in society. It is worth thinking about how this, too, can be tracked as an indicator of how inclusive our society is.

Finally, the "T" in "FEAT" stands for togetherness. This, I believe, will be the single most important determinants of Singapore's future. Togetherness is not merely a sentiment, but the culture and practice of respect, trust and shared responsibility within society.

As a small nation at a time of geopolitical flux, we cannot afford to be divided along partisan lines, ideology or any other societal fault lines. Often, such division starts with disrespect and then progress to denigrating those whose views or practices are different from ours. And very soon, people cannot work with one another on the basis of ideology, politics or worldview, and once the genie is out of the bottle, it is very hard to put it back in.

If Singapore gets mired in partisan battles or culture wars like what we observe in other countries, we could win our individual battles but lose the war. Our fiercest fights would be with one another rather than against external threats.

Suppose in a hypothetical country, two-thirds of the population support a party or ideology and one-third support a rival, and suppose in the extreme, the two sides spend all the time and resources trying to negate the efforts of the other side. The net strength of this hypothetical country would be two-thirds minus one-third, but if the country is united, then it is two-thirds plus one-third, or perhaps even more than the sum of its parts.

As Singaporeans, we must recognise and affirm that there is more that we have in common than what divides us. We must do everything we can to nurture a strong middle ground of citizens who are fair-minded and respectful towards one another, a middle ground that is not reflexive, but reflective in our approach to affairs in the public square.

Particularly at this time of severe geopolitical turbulence, Singaporeans must close ranks if we are to survive and prosper, and not be swept away by external tides. If we succeed in doing so, we will truly be an exceptional society. And this, I believe, would be the greatest competitive advantage for Singapore in a world of deeply divided societies.

Mr Speaker, to conclude, a budget reflects the values and priorities of a society. Ultimately, what matters most is how we care for the vulnerable among us, how we relate to people whose views are different from ours and how we equip future generations with confidence and opportunity. Success will depend not only on policies and spending, but on the collective actions of citizens and stakeholders. It is up to each of us, as Singaporeans, to exercise agency and influence to help mould our shared future.

If together, we can achieve the FEAT of future readiness, empowerment, assurance and togetherness, I believe Singapore will continue to flourish as a resilient, cohesive and exceptional nation. In my view, this Budget is a step forward in this direction, though we have much further to go. For this reason, I support the Budget. [Applause.]

Mr Speaker: Mr David Hoe.

1.35 pm

Mr David Hoe (Jurong East-Bukit Batok): Mr Speaker, I am speaking in support of Budget 2026 because it strengthens assurance for Singaporeans and also invest in our future.

In this response, I will cover broadly on three issues. The first is on the perceived support to parenthood; second, is on closing the opportunities gap; and third, it is a whole-of-Government approach in how we can tackle the first two issues that I have just mentioned.

First, if we are serious about encouraging parenthood, we must reshape the lived experiences of parents or potential parents, which shapes perceptions of support given. To be clear, Budget 2026 takes meaningful steps in the right direction, such as Child LifeSG Credits, raising of income thresholds for preschool subsidies and student care support, and others.

All these follow comprehensive steps taken over the past few years to support parents and families, including significant enhancements to parental leave, the Large Families Scheme and many others. But we have to be candid at where we now stand. Our TFR in 2024 remains at a historical low of 0.97. While we all hope that the Government's efforts over the past years would have improved our TFR, in my conversations with parents and also my residents, the current realities makes me doubtful whether this could significantly change in 2026.

My point here is this: we have done a lot to encourage Singaporeans to have children for the past decade. But with the historical low of 0.97, it suggests to me that we may not have been effective in shifting the needle. I propose the shift from doing "more" in an aggregate manner to doing "better". Allow me to propose some solutions regarding on how we can overcome such barriers and constraints, drawing from the conversations with young parents and also my resident.

I will cluster them into three "S" – first, spaces; second, stress; and third, support.

The first "S" pertains to space and housing. Singapore is land scarce and we have to use space efficiently. Over time, HDB flats have become more compact and this is part of our reality today. But if we are serious about encouraging parents to have children and supporting large families, we should make it easier for families planning to have children or more children to secure homes that are conducively sized for them.

You see, if we want couples to start thinking about children early, the flats that they choose can influence their decision. One idea is they can select a "room to grow" flat, where it mimics a larger format of HDB units, in what I may call "jumbo BTO flats", and these are thoughtfully designed for modern family needs where some of our families rely on domestic helpers.

For example, such flats could include layouts with extra bedroom separate from the main living quarters that can accommodate domestic helpers and better soundproofing so that children can play, sleep or study without the entire household being disrupted.

If I were to push this idea slightly further, such flats could be priced similar to smaller-sized units through additional subsidies, but with clear conditions. For example, eligibility to apply for such units could be linked to couples committing to have two or more children within the first five to seven years of Minimum Occupation Period (MOP) after key collection. If they do not meet such conditions, then there should be a clear and fair "down-sizing" pathways with subsidy clawbacks. Let me be clear here – we should be reasonable in exceptions, for example, if medical, fertility or relationship issues arises.

I will be frank here, I do not think that we have really tried a "bigger home for bigger families" housing scheme that ties bigger flats and extra subsidies to having more children, so I think that the idea needs to be tested. I think it is worth studying this idea. At least, it addresses the concern of adequate space if a family is considering having more children and will certainly give them a good nudge in their decision-making before they get married.

A second idea is to give families more flexibility to upgrade their larger flats when a new child arrives and relax the existing rules on flat applications within MOP.

I am sure many of us, as MPs, have received such requests and what I am about to share is not uncommon. Basically, some families already live in smaller HDB flats, and they find that space becomes too tight after having their second or third child. In such a case, we should consider activating more flexible pathways for them to move to larger flats. For instance, reducing or suspending MOP if couples are expecting or have additional children during that period; and even concurrently "resetting" their eligibility to apply for larger BTOs and for them to accord higher priority in the application process.

Of course, these details should be thoroughly considered and debated, but the broader point is this: we should be prepared to use policy design to signal that we are ready and willing to reduce the structural and financial hoops for families to jump if they want to secure bigger and more comfortable living spaces, if they want to raise more children.

The second "S" pertains to mobility and commuting stress. We rightly pursue a car-lite vision, and as a member of the Ministry of Sustainability and the Environment (MSE) GPC, I support this as it certainly goes a long way in reducing our collective carbon footprint. But families are not abstract units. They navigate daily routines and logistics and arrangements. For larger families, private mobility has economies of scale and can reduce stress.

On economies of scale, this is especially so when larger families have to send multiple children to childcare and school each day, and they would like to spare their household from waking up early just to catch public transport.

As a father to two, I know this reality myself, because every time I bring my children out, it is not just "bringing my children out", it is bringing out a stroller, a bag with diapers, milk, spare clothes, wet wipes, snacks and things that I would only realise what to bring after a spill, an accident, a tantrum or a sudden fever.

When you do this while navigating public transport, every transfer is a stress multiplier. So against this backdrop, we should consider how we can support families with children to address these realities by providing commuting offsets, such as, another idea, private transport vouchers or even substantial family subsidies for large families for private vehicles.

Let me move to the third "S", which is on support. During my PAP Clementi market visit on Valentine's Day, a parent pulled me aside to raise a concern, and I have heard repeatedly from many parents – childcare leave. If one person raises this issue, to me, it is a data point. But when different parents raise the same issue independently, it is a signal.

The parent's concern is straightforward. Today, parents get six days of paid childcare leave, per child, when their child is six years old or younger, but only two days of extended childcare leave when the child is between seven to twelve.

This is how it looks like in real life today, primary school children still fall sick and it is rarely a one-day occasion, and they still have medical appointments to go to, and there can be occasional school disruptions such as Home-Based Learning. And for parents with two children or more, the odds of staying home at short notice is actually quite likely. When leave runs out, that same parent told me, she has to take unpaid leave a few times.

Our current support environment for parents, hence, may not feel supportive. It then raises a fair question whether the current structure remains fit for purpose. The principle is this: we should keep childcare leave provisions under periodic review, answering the question whether they match the current work and family realities today. For example, instead of a sharp step-down in leave provisions once a child turns seven, we could keep the overall number of childcare leave capped at six days per parent, but allow families to use this portion of their leave flexibly across a wider age band or redesigning the entitlement so it tapers off gradually, instead of a sharp drop, from seven to two. We should also study whether parents with more children should have a modestly higher cap.

Another aspect of support is accessibility to play. We often say this: we do not want our children glued to their phones and I agree. But in many new BTO estates, the alternatives are limited or not age-appropriate for older children. If we want parents to feel supported, then our living environment must make it easy for children to burn their energy safely and meaningfully.

This is where agencies can work together to convert unutilised spaces, such as multi-storey car parks, into sheltered play and sports areas.

Mr Speaker, I have raised this question through a Parliamentary Question before, and my fellow Member Mr Ng Chee Meng also asked the same thing for his residents. I am glad that the Government's position has shifted from just simply stating constraints to saying that it is now being studied.

But you see, families need clarity. I still get occasional queries from parents of primary school-going children in Clementi Peaks and I cannot keep tell them that the Government is still studying, because they want to know a definite timeline. So, I urge relevant agencies to share the outcome and timeline of this study soon.

On this note, I also want to say that I welcome the expansion of the Dual-Use Scheme so that families can access school facilities conveniently. But just as importantly, we should review pricing and access rules so that these spaces do not just become "available in theory" but out of reach in practice for lower-income households.

Mr Speaker, I raise these parenthood points because they connect directly to my next point about opportunity.

The release of MOF's Occasional Paper noted that incomes have risen and income inequality has moderated. These are important achievements. But I worry something that is not said explicitly: even if incomes rise, is the opportunity gap widening and is access to opportunities becoming harder? Because many opportunities today cost money, time and prior knowledge of their existence. Families with more resources can buy enrichment, exposure and networks.

As we, as a country, continue to invest in growth and skills, we must keep our promise of social mobility alive. Specifically, I will address two "As" here – awareness of opportunities, and access to opportunities.

Let me first touch on the awareness of opportunities. As we push into new growth areas and an AI-enabled economy, the first barrier, in my opinion, is not about capability; but it is about clarity. In emerging industries, such as AI, quantum, advanced manufacturing and biomedical sciences, many people opt out early simply because they lack exposure. They do not know what the work actually looks like, what the entry routes are, what are the pathways or what skills are really required there.

But those with stronger networks can ask someone, get an introduction and hear early about internships or externships. And those without networks often find out late or, maybe, not at all.

Put simply: awareness is uneven and it can become a hidden advantage. So, beyond simply just redesigning a website, we should treat awareness as a policy lever. I hope the new statutory board of the merger between WSG and SSG will reach out to students and workers without strong industry networks.

I will elaborate more on this during the COS debates.

The second "A" refers to access to opportunities. I have said in my maiden speech that aspirations are shaped by experience, and experiences are shaped by access. That is why, previously, I have mentioned the idea of a means-tested "Curiosity Credits," which is a simple idea that regardless of any family background, every child should have the budget to be able to allow them to discover their interests and strengths by having the opportunity to try things, like songwriting, playing a musical instrument, robotics, sports – and the list goes on. Because today, such experiences come with a price tag.

Higher family incomes can pay, and families with stronger networks hear about opportunities earlier and get better guidance on what to try. Lower-income families often cannot.

Before and since raising this idea, I have seen smaller-scale pilots illustrating how this can work, especially for children from lower-income households. The principle is straightforward: access to discovery should not be a privilege but it should be part of how we keep social mobility alive and real.

Beyond children and our growing years, allow me to segue into SkillsFuture too. We should also have this "try before you buy" a bigger part of our opportunity system. SkillsFuture can consider creating a low-cost or subsidised "taster" lessons or courses and micro-attachments in new industries, so Singaporeans can experience the nature of the work before committing time and money into a full course.

At this point, I just want to take a step back and submit that we should, as a country, continue to be anchored in meritocracy. But we also must be hard-nosed in recognising that meritocracy, over time, may also accumulate and compound advantages across generations. That is why we should be open to bolder measures and widen genuine access at formative stages, especially throughout education, which I will expand a bit more on this in the COS debates.

Mr Speaker, I want to conclude that the need for whole-of-Government approach to tackle the issues that I have mentioned earlier – parenthood and inequality are wicked challenges. The solution does not sit nicely in one agency, neither does the outcome rarely take the form of a voucher or a subsidy.

Taken in isolation, let me submit to everyone that many ideas that I just raised today run against the Ministry's baseline mandate. Because transport agencies will rightly push for a car-lite vision; housing agencies will manage land scarcity and affordability; and fiscal agencies will rightly guard anything against these benefits becoming permanent.

That is why we need a whole-of-Government approach only when there is a central agency that sets an overarching objective, deliberate trade-offs, compel design and serve system-wide goals. I make this point because it links back to family and opportunities. When system runs coherently, residents experience less friction.

Mr Speaker, Budget 2026 reflects a continued commitment of supporting families and investing in our children, and I welcome the concrete measures to strengthen affordability and support families with greater needs. But the trends we face, especially on fertility and the risk of widening opportunity gaps, I ask for something more: a sharper willingness to reshape lived experience through whole-of-Government approach, not just in flagship policies, but also in the everyday systems that determines friction, time and stress in residents' lives. I support the Budget.

Mr Speaker: Dr Neo Kok Beng.

1.52 pm

Dr Neo Kok Beng (Nominated Member): Mr Speaker, Sir, I would like to declare that I am a technology entrepreneur and I have a studio that creates and invest in technology-based venture, such as engineering, aerospace and medical devices. My speech today is going to focus on three main areas.

The first area is a vibrant economy; followed by an active caring society; followed by the last topic, which is a resilient nation.

On to vibrant economy. Singapore transformed itself from the third world to the first world over the last 60 years, from a labour-intensive industry to a very much technology-intensive economy. How did we do it? What is the secret recipe? What are the systems of governance that enabled us to do so? Those are questions eagerly sought by participants of the Science, Technology and Innovation Policy class, while I was associate faculty at the Harvard Kennedy School. Those answers probably will not be able or to solve our current economic situation going forward as we have entered into more advanced technology, more pioneering efforts and therefore, we probably have to switch our strategy, change our secret sauces or what is the new formula?

I was in conversation with Dr Paul Romer, who is the former World Bank chief economist and also the Nobel Laureate for Economics 2018. Romer is well known for his endogenous growth theory, otherwise known as the new growth theory. That probably points a good direction for us. The endogenous growth theory, conceptually, is very simple – matters over things. What are matters? Simply, they can be just factors of production – land, labour and capital.

Land, labour and capital have their limits. The more you use the land, it suffers from the loss of diminishing returns. It has scarcity. So, if we pursued these areas, how much land reclamation can we do, how many foreign labours can we import into this country – so there is always a limit, so that is matters.

Now things – matters and things are the same – but ideas are very different. Ideas are ingenuity created by human beings. So, ideas generally can be classified as intellectual properties (IPs). So, patents, you came out with ideas, you filed a patent, what happens? You can reuse, reuse and reuse it again. There is abundance against scarcity. The more you use the patents, the more you generate production, the higher the productivity and therefore, it is not the law of diminishing returns. It is actually the law of increasing returns.

If we go along this formula, or this road, then, possibly, the GDP growth will be limitless or unlimited. Of course, subject to Utopia constraints.

So, where are we now? Singapore rolled out its five-yearly science and technology plans from 1991 to 2010, spending about $25 billion over the years to build up our R&D capabilities, infrastructure and manpower. This year, 2026 to 2030, or what we call the RIE 2030, is allocated $37 billion.

This is actually a very far-sighted move, because we have to move ourselves from research to innovation and enterprise.

With this amount of money that spans over the last 15 years, what have we achieved? Well, it is not easy to measure because R&D is uncertain and of course, if you are doing biomedical applications, it could be 20 years or 30 years before you see any results. However, a simpler way to analyse this situation is to use the Global Innovation Index (GII) conducted by the World Intellectual Property Office (WIPO). We use it as a reference – GII ranking. For Singapore, what is our ranking in 2025? We are ranked number five and that sounds very good, right? Well, the ranking has two parts. Innovation input and innovation output. So, innovation input is on infrastructure, the Government actions, especially the R&D dollars. We are number one. Okay, we pat ourselves on that. We really invest in R&D. But innovation output – which is the licensings, the trademarks and all the other IPs that we file for commercialisation, we are number nine.

Innovation input number one; innovation output number nine. Is it really equitable? Are we, after 15 years or 20 years of R&D, still ranked number nine, which is not comparable with the amount of innovation input, or R&D dollars, we put into it.

So, how do we measure the commercialisations of IPs? Firstly, what is the research and R&D intensity? How many IPs have we generated based on the R&D dollars? Secondly, how many such patents or trademarks or copyrights are commercialised within the last five years? That could be a factor for us to judge.

Remember, patents are perishable goods. A patent only has a 20-years lifetime and from the date of filing. So, if we file today, it does not mean we have the rights of it until that is awarded which is two years down the road, but the clock starts counting. So, we should quickly get it into the market or commercialise it. If after five years, that piece of patent is not commercialised, it is probably going to be obsolete very soon. And if it is obsoleted, then what is the point of filing the patent in the first place because patent is really, really expensive.

So, maybe we could consider that if, given a number of "X" years, if the patent is not filed or commercialised by our research institutes or universities, we might want to consider treating it as a public good and licence to any Singaporean companies or Singaporean individuals who want to use the patent for any other innovation purposes, free.

Let me move on to another topic – which is how to grow and anchor technology ventures in Singapore. The National University of Singapore (NUS) started technology commercialisation in the year 2000, when I was an adjunct faculty. And in 2019, we started the Graduate Research Innovation Programme (GRIP). I designed the programme for the teaching part and I was a chief instructor. I am glad that it has progressed to become the National GRIP. I am no more the teacher.

During the first phase, we had churned out a lot of companies, about 250 of them. I can observe that they are good firms, they have lots of support through the Singapore tech ecosystems. So, the seeding and angel funding are not an issue. The issue then is how we bring them to commercialisation or early commercialisation, because there is a mismatch of expectations. Why? When you move on from the seeding stage to pre-commercialisation or the pilot stage, you need more funding and the funding has to come from the venture capital market. And the venture capitalists are looking at returns at maybe three years down the road and if there is no liquidity event, then they will just hold on. And now, you have a mismatch: one is moving and needs money; one is waiting to see. So, it is a chicken and egg issue.

So, how do we resolve this issue? I think that the recent example might point us a way. MetaOptics skipped Series A funding and goes directly to an initial public offering (IPO) on Catalist. And the Minister of State Dinesh was there to witness, with the gong.

So, we use this as a reference or the pilot point for us to say, "Hey, why not we create a special path for technology ventures?" Special listing rules for technology ventures that allow them, with criteria listed by the exchange, the sponsors and maybe a group of wise old men, meaning people who have done technology ventures before, to determine whether they are suitable for such acceleration programme, fast track, or we can call it, in Singapore style, through-train.

On Catalist, this is something that it is possible for us to explore and make these companies anchor in Singapore. Because if they grow to a point that they are ready for IPO, what would they choose? Catalist? No, likely overseas, where the market capitalisations or the valuation is much higher. So, this is something that we really have to grapple with and anchor them early in Singapore.

If you look at the Hong Kong Stock Exchange, the HKEX already has a special pathway for specialist technology companies, but this is of a bigger scale. I am proposing that we have an innovation within our Catalist for smaller market valuation companies.

Let me move on to a caring society. I am very saddened whenever I read in The Straits Times that seniors die in their homes and nobody knows about it. It was reported in The Straits Times that 33 seniors died alone in 2025, undetected. I am a kampong boy. I grew up not in a zinc roof house. I lived and grew up in an attap roof house. I think in our so-called categorisation of HDB, it would probably be a three-room for attap roof, and then zinc roof is a five-room.

We knew all our neighbours. We walked into our neighbour's house and slept on the floor – there is no couch – anytime we want. That is the kampong spirit of understanding and looking after each other. We have talked so much about kampong spirit. We have block parties. Did we really actually achieved the type of kampong spirit?

So, block parties – you live on the 14th floor, I live on the third floor. Are we that close? The closest people are the persons living here and there – your neighbours, your immediate neighbours, who can look after you if they really understand you. I do not really have a solution for this because times are different. Maybe we should have, instead of block parties, potluck among the three neighbours together to understand each other, to know each other and to take care of each other and to actively look out for each other. Not just care for each other but actively caring for each other. How to do it? I do not have a solution, but maybe a CDC voucher can help to let them have some potluck together among the three families, next to each other.

One topic that I am personally involved in is fostering. And we are very sad, very concerned in our fostering community over the Megan Khung case. My colleague here was the chair of the investigation committee.

In late 2024, we have 600 foster families and currently, in my house I have three foster kids. These 600 foster families support more than 500 children. It is actually not sufficient. But we think that there should be more plans, more awareness activities, more incentives to encourage more people to become foster parents. How are we going to do it? I think I will explain later in the COS.

One of my colleagues mentioned that the Singapore TFR has dropped to 0.97. What does it mean? It means that our population will halve in 30 years' time, that is what it means. And therefore, it is an existential issue. We know all the problems – we basically do not have enough space, marry late, have a career and all the kinds of issues.

I want to give a proposal: it is that for existing families who do not have kids, should we nudge them a little bit more? How to nudge them? Maybe we should consider for the first-born, we have free childcare and infant care. Because for the rest, we already have existing systems of subsidies and also the Baby Bonus. But to nudge them on to having the first kid, when you have the first kid, then the joy of parenting and the confidence of bringing them up all comes into picture. And when you have your first kid, then when you see them grow up, you will look at them and then say, "Oh, maybe we should have another one to keep him or her company."

So, let us try out something that shifts the point of TFR a little bit – not to two, not to 1.5, but maybe bring it above one. Mr Speaker, that is what I would like to comment on today and I support the Motion.

Mr Speaker: Ms Gho Sze Kee.

2.09 pm

Ms Gho Sze Kee (Mountbatten): Mr Speaker, I would like to start by sharing a Mandarin saying: “居安思危”. Literally, it means to think of dangers when you are dwelling in safety. It is a good reminder for us to always be mindful of future storms and adversities even when we are in peaceful and prosperous times.

I wanted to share this with the House because I think that it is a fitting framework for this year’s Budget. It also encapsulates the thinking of the PAP Government very well. One of the hallmarks of the PAP Government is fiscal prudence, thinking far ahead, always with an eye to the challenges of tomorrow. It is this and good governance that got us to where we are today. We must not forget this discipline, for it is our strength and has enabled us to ride through many previous storms together.

But the world around us is changing. As the Prime Minister noted in his Budget opening, the old international order that enabled our current prosperity is fading away. The global balance of power, trade patterns and economic structures are all shifting. Geopolitical tensions, technological disruption and climate risks are no longer distant concerns, but challenges that directly affect Singapore. We simply cannot ignore them.

Against this backdrop, Singapore too, is changing. Our demographics are shifting. We are maturing as an economy and aging as a society. Social and healthcare needs are increasing. Infrastructure must be maintained and renewed. We need to prepare our people and economy for the disruptions ahead.

The demands on our Budget will only grow in the years to come. At the same time, our fiscal levers face real constraints. Today, our revenue rests mainly on two pillars: taxes and statutory collections, and our Net Investment Returns Contributions (NIRC). These two revenue taps have served us well but they are not unlimited.

We cannot raise taxes indiscriminately without imposing social and economic costs. Our economy cannot sustain high growth indefinitely. And our investment returns are subject to market cycles, global shocks and other uncertainties. To me, the key challenges for our Budget is not how and where we can spend more money, but how we can grow more revenue taps.

I would like to share my thoughts on this.

Sir, the Government has committed to make our R&D efforts a key pillar of our efforts to remake our economy and maintain our competitiveness. With the Research, Innovation and Enterprise (RIE) 2030 Plan, Singapore commits significant resources to strengthen our capabilities in research and innovation frontiers.

But this is not a recent undertaking. Over the years, we have invested heavily in research, development, building world-class universities, research institutes and labs, translational platforms, incubators and funding mechanisms. These efforts have created an environment that nurtures and supports startups and anchor global companies here. These investments have borne much fruit, creating jobs, strengthening our economy and positioning Singapore as a knowledge-based hub.

Today, Singapore is the second most competitive and the fifth most innovative economy globally. Sir, Singapore’s R&D ecosystem already generates world-class IP. Startups emerging from these ecosystems often attract global venture funding. Yet Singapore’s sovereign stake in these successes is typically modest.

The primary goals of our R&D and innovation framework have been to spur economic activity, create high value jobs and anchor industries. In that, we have been very successful. But direct fiscal returns, in the form of Government equity stakes, licensing of IP, or long-term sovereign income, while they exist, have always been a secondary objective and remain small.

Yet as public R&D spending grows, I wonder if we may be missing an opportunity to capture a more deliberate share of the upside? Is there more direct value that we can capture? By taking a different approach, could we enhance public returns while continuing to nurture private sector dynamism?

I would like to take Taiwan Semiconductor Manufacturing Company (TSMC) as an example. TSMC was spun off from a Taiwanese government research institute as a joint venture with international partners. Today, it is the world’s second most valuable semiconductor company with a valuation about three times the size of Singapore’s GDP. The Taiwanese Government remains the single biggest shareholder and TSMC returns more than one billion dollars annually to the Taiwanese Government. This demonstrates that R&D efforts can create spin-offs that deliver substantial long-term sovereign value.

In contrast, I looked up two success stories listed in the RIE 2030 brochure: Advance Micro Foundries (AMF) and Mirxes. I discovered that we no longer have any shares in AMF, while in the case of Mirxes, Singapore's first biomedical unicorn, EDB International now holds a less than 2% stake after it was floated, ironically, on the Hong Kong Stock Exchange.

Let me be clear. This is not about turning Singapore into a Government-run innovation economy. The private sector must remain the primary driver of innovation and entrepreneurship. Nor am I suggesting that the Government has been careless in deploying funds. I understand that our vehicles, such as SG Growth Capital and SGInnovate, have a different mandates. They operate primarily as catalyst investors, as opposed to being wholly focused on shareholder returns, like Temasek Holdings.

What I am proposing is a tweaking of our approach. When taxpayer funds absorb the early-stage risks of spin-offs and start-ups from our RIE ecosystem, we can also ensure that we share more meaningfully in the direct upsides. We want to retain a more tangible and meaningful share in the ventures that we help build. This means evolving the roles of these Government vehicles from being purely catalyst investors, which seek an exit to move into the next big thing, to becoming strategic partners and long-term shareholders.

However, we should have no illusions that this will produce quick returns. It will require generational thinking. The returns would only be substantial only if we can grow a few more unicorns. But if we succeed, we will do more than just create high-value jobs or strengthen our global relevance. We will generate enduring national value, create a new and sustainable revenue tap and provide long-term economic benefits for our future generations.

Sir, I would like to share some thoughts on divisions and equitable outcomes.

The Occasional Paper on Income Growth, Inequality and Social Mobility Trends in Singapore, released not long ago by MOF, underscores both our achievements and our vulnerabilities. We continue to do well in most areas relative to other developed countries. Our social policies, public housing framework and so on have helped keep inequality in check and supported upward mobility. But the paper also highlights pressure points that we must not ignore.

Our system operates under meritocratic principles. But meritocracy, if left alone, can create entrenched privilege and inequitable outcomes.

Our education system is the single greatest equaliser in our meritocratic society. It is here that meritocracy must be most staunchly defended, because it is here that privilege and divisions will strike first and, I think, strike the hardest. We must ensure that our educational pathways, especially at the starting points, remain fair and equitable.

Sir, our education system is very much admired around the world for its outcomes. We have built in different pathways to success into the system. Over the years we have also introduced broader definitions of merit, to recognise diverse strengths and reduce the over-reliance on exam scores.

And we have many examples of successes of the system in this House. There are Members of this House who grew up in very unprivileged circumstances, studied hard, won scholarships and did very well for themselves. And there are those who faltered at different stages of their educational journey, picked themselves up and came back fighting, succeeded in their goals. These are classic underdog success stories of our meritocratic system, and we should be proud of all of them. But we must be careful here. We must look not only at individual success stories, but at broader trends. A few inspiring examples do not automatically mean that outcomes are as equitable for everyone.

And generational privilege is already happening. Parents with higher disposable incomes are better positioned to invest in their children's development, whether through extra tuition and enrichment classes. These advantages give children from more affluent backgrounds a head start over their peers.

And under the Direct School Admission (DSA) scheme, designed with the best of intentions, is not immune. Many fork out large sums for private lessons in sports, music and coding, all carefully curated to maximise their children's chances in the DSA exercise. There are now coaching academies tailored for entry to the Gifted Education Programme (GEP) and aptitude tests of specific schools for maths, science and technology DSA. I was surprised to discover that there are even coaches for DSA-oriented leadership development, entrepreneurship and portfolio preparation. Every single lacuna has been filled.

What this all means is the DSA scheme is now just an uneven battleground in the education arms race, where those with the advantage of parental resources enjoy a leg up over their less privileged peers.

Sir, I can understand that DSA is meant to recognize a diversity of talents, create alternative pathways and to break away from over-reliance on exam scores. But we cannot ignore the unintended negative consequences of the DSA in its current form.

A little while back, I posted a set of oral Parliamentary questions, to see how DSA and affiliation admissions intersect and what it means for non-affiliated students who are unable to DSA in. These were motivated by direct feedback from the ground. I heard that some popular brand name schools only had a few places left after DSA and affiliated admissions, and the children who had made the cut-off points at some of these schools had to fight for a small number of remaining places. Some were balloted out despite meeting the even more stringent cut-off points for non-affiliated students.

Personally, I think that the arguments for DSA are sound and there are valid reasons for it to continue in some form. However, I certainly do not think it should continue in its current form and there are certainly things that we can change structurally to ensure a more equitable system.

One of the suggestions I made to Ministry of Education (MOE) in my supplementary question, was to ask MOE to consider setting aside a separate, hard quota for non-affiliated and non-DSA students. It is unfair for these students to find themselves crowded out from the race for a particular school even before they get to the starting line. This will preserve an open pathway to some popular schools for them and I think it will be at least a good interim measure.

I am glad to note that MOE will study my suggestion, and that the Ministry is taking a look at the DSA scheme as part of a more comprehensive review. I look forward to the outcome.

Sir, as life, as we all know, is inherently unfair. We cannot promise equal outcomes for everyone. But what we can and must do is to ensure equal opportunity and equal pathways to everyone. This is the promise of equality as enshrined in our Pledge and the essence of our meritocracy. Singapore was built on this simple but powerful promise.

Now, meritocracy requires active maintenance in this imperfect world, and we must be prepared to review, recalibrate and, where necessary, restrain policies that bring about negative outcomes. This is especially so in education, because this is where the trajectory of a life is first shaped.

Sir, I support the Budget.

Mr Speaker: Mr Mark Lee.

2.24 pm

Mr Mark Lee (Nominated Member): Mr Speaker, earlier this year, Parliament recognised chess as a sport in Singapore. Chess rewards foresight and discipline. It punishes hesitation.

Budget 2026 reflects that mindset. It is not a defensive Budget. It is a positioning Budget.

Let us first acknowledge the board we are playing on. Externally, the world economy is becoming more fragmented and less predictable. Tariff shocks, supply chain re-routing and geopolitical alignment pressures are shortening planning processes and horizons for businesses.

At home, Singapore's total fertility rate remains around 0.97, our median age exceeds 42, labour force growth will slow structurally over the coming decade. At the same time, remuneration per worker rose by about 3.4%, with wage growth outpacing productivity in several labour-intensive domestic sectors.

Budget 2026 recognises these shifts. The business community welcome the measures to mitigate rising business costs – including the 40% Corporate Income Tax (CIT) rebate, expanded internationalisation support, enhanced enterprise financing and the expansion of the Productivity Solutions Grant (PSG).

The direction is correct. But execution at scale will determine whether this repositioning succeeds.

Take productivity. Budget 2026 elevates AI as a national priority to boost productivity. The Prime Minister will chair a new National AI Council to drive the agenda, and specific sectors have been identified for coordinated AI transformation. This sectoral focus is appropriate. But enabling transformation for SMEs will be the real test. Most SMEs do not lack awareness. They lack integration capacity.

AI implementation is expensive – not just software, but data restructuring, cybersecurity, workforce redesign, up-skilling costs of workers and managerial capability. Big firms have both the talent and financial muscle to spread this fixed cost. SMEs often cannot – if transformation succeeds, gains are gradual; if it fails, losses are immediate.

Through the Champions of AI programme, expanded Enterprise Innovation Scheme (EIS) for AI expenditure and broader PSG support, Budget 2026 seeks to change the risk equation. That is welcome.

But execution hinges also on clarity. The definition of "qualifying AI expenditure" must be unambiguous. If not, SMEs will misjudge eligibility, misallocate resources and struggle to justify bundled AI costs embedded in broader systems. Without precision, we risk entrenching a two-speed economy – where large firms execute full transformation while SMEs are left with isolated tools and superficial adoption.

In sectors, such as logistics, F&B, facilities management and manufacturing, robotics may deliver more immediate productivity gains than abstract AI tools. The rapid deployment of advanced robotics and humanoid systems in China is already reshaping production economics.

However, the cost equation is misaligned. Robotics requires high upfront capital and long payback periods, while labour remains the cheaper short-term substitute. As long as that remains true, firms will default to hiring than automating.

If we want AI and robotics to meaningfully raise productivity and preserve competitiveness, the investment signal must decisively shift behaviour at scale. That suggests a different incentive logic – one that first reduces risk at the point of adoption, and then rewards firms that deliver measurable productivity gains.

In practical terms, that could include accelerated capital allowances for robotics to improve early-stage cashflow, green-linked automation incentives where AI deployment also reduces energy intensity, and co-investment platforms or shared automation hubs to lower entry barriers for SMEs.

Can the Government, therefore, consider layering outcome-linked incentives on top of entry support? Where firms demonstrate sustained productivity improvements – whether through higher output per worker, value-add per employee or reduced energy intensity – enhanced rebates or credits, potentially up to 90% of qualifying outlay, could reinforce genuine transformation.

But technology is only half the equation. Management capability is the multiplier. Without structured managerial uplift, AI support will concentrate in already capable firms and widen the competitive gap.

Can the Government consider working with the Singapore Business Federation (SBF), Singapore National Employers Federation (SNEF) and other trade associations to strengthen sector-specific management upgrading programmes tied directly to AI integration, job redesign and workforce planning? If we professionalise transformation management, adoption will become more even and less risky.

I now turn to manpower and labour.

Recent increases in qualifying salary thresholds and adjustments to Local Qualifying Salary reflect a legitimate objective: strengthening the Singaporean core and reinforcing the social compact. Businesses understand and support that principle. However, in SBF's latest National Business Survey, 63% of firms continue to cite manpower costs as a top challenge.

On the Employment Pass front, higher thresholds raise the cost of specialised expertise, particularly for multinational firms considering Singapore as a regional headquarters (HQ) or Centre of Excellence. Combined with elevated rental and operating costs, this can influence marginal location decisions. We have already seen instances of HQ relocations with downstream job losses, and these signals warrant close attention.

On the S Pass front, domestic sectors, such as food and beverage (F&B) and retail operate on thin margins and face immediate pressure. Qualifying salaries are intended to nudge productivity upgrading, but many firms in these sectors have already digitalised and streamlined operations.

In sectors where productivity headroom is structurally limited, further cost escalation leaves little room to adjust. Firms are effectively left with two options: raise prices, affecting consumers and cost of living, or compress operations, reducing service levels and employment scale. That is the economic reality we must acknowledge.

At the same time, there are narratives suggesting future excess manpower in some service sectors. Yet, on the ground, many businesses remain acutely short of workers for operational and frontline roles. Backend productivity gains do not eliminate the need for human service at the front-end.

As such, where productivity headroom is limited and local supply gaps persist, would the Government consider a more granular, sector-calibrated approach, whether through refinement of the Non-Traditional Source Occupation List or conditional flexibility mechanisms tied to demonstrated upgrading efforts?

Mr Speaker, when margin compression becomes structural, firms cannot absorb it indefinitely. If adjustment is delayed until distress becomes acute, closures are sharper and workers more exposed.

Sector-level mapping can identify fragmented industries where consolidation strengthens resilience. Structured advisory support for mergers and joint ventures, as proposed in SBF's Budget recommendations, can help SMEs scale non-organically before financial stress escalates. Strategic consolidation can be treated as repositioning and not failure.

At the same time, worker transitions must remain swift and credible. As structural cost pressures and technological change increase the frequency of adjustment, we should approach procedural changes carefully.

Retrenchment incidence remains below the long-term average and re-entry rates remain relatively strong. Most employers comply with the existing five-day notification requirement. In that context, before introducing additional procedural rigidity, such as mandatory advance retrenchment notification, we should ask whether shorter timelines would materially improve worker outcomes, or whether they may instead constrain firms during critical restructuring periods.

Businesses do not take retrenchment decisions lightly. Most exhaust every option to stabilise operations before acting. The more constructive question is how to enable early and more orderly adjustment.

Confidential early engagement channels could allow firms to signal emerging restructuring risks while recovery efforts are still ongoing, enabling agencies to prepare redeployment support without compromising commercial sensitivity. The objective should be responsible restructuring, preserving business viability while safeguarding workers through timely and effective support.

Mr Speaker, if labour supply is structurally tight, senior employment must be treated as a core component of our labour strategy. The extension of the Senior Employment Credit is welcome. However, wage offsets alone do not address the operational realities employers face. Older workers often require role redesign, modular reskilling and workplace adjustments to remain productive over a longer career horizon. SMEs, in particular, face volatility in medical and insurance costs as their workforce ages. If unmanaged, these uncertainties can become deterrents to hiring and retention.

If we want businesses to employ seniors with confidence, can the Government examine whether pooled insurance mechanisms, calibrated risk-sharing arrangements and structured workplace redesign support can reduce that uncertainty? I had previously suggested that senior and special needs employment be more directly linked to dependency ratio ceiling adjustments. It may also be timely to revisit whether such alignment can better incentivise inclusive workforce participation while maintaining overall labour discipline.

Let me turn to innovation. If Singapore is to move ahead of structural tightening, we cannot rely solely on cost efficiency alone. We must strengthen value creation. That requires accelerating commercialisation of IP, particularly among SMEs. Large firms often have internal R&D pipelines. SMEs do not. We should therefore consider enhancing schemes that embed scientists and research talent directly within SMEs, not only as affordable project-based consultants, but through structured industry attachments that can shorten the path from lab to market.

At the same time, IP financing remains underdeveloped. Many SMEs hold valuable IP but lack access to financing instruments that recognise intangible asset value. There may be merit in strengthening state-backed risk-sharing measures to catalyse IP-backed financing, reducing collateral constraints and encouraging financial institutions to participate more actively in this space.

And finally, internationalisation. If Budget 2026 is a positioning Budget, then internationalisation is one of its most important instruments. The Government has taken important steps: enhanced Market Readiness Assistance (MRA) support of up to 70% for SMEs, the raised Double Tax Deduction for Internationalisation (DTDi) cap to $400,000 and expanded Enterprise Financing Scheme (EFS) limits materially reduce the financial burden of overseas expansion. For companies prepared to reposition and compete regionally or globally, these measures are helpful.

However, emerging markets across Southeast Asia, the Middle East, Africa and Latin America offer growth, but they also carry higher political, regulatory and receivables risk. While existing financing schemes provide access to capital, the binding constraint for many SMEs is working capital resilience in higher-risk markets.

Would the Government therefore consider calibrating risk-sharing mechanisms more explicitly by market risk, for example, enhanced trade credit coverage or working capital guarantees in markets where the opportunity is real, but the uncertainty deters participation?

Scale is the second constraint. Many overseas projects are too large or complex for individual SMEs. Procurement frameworks favour size, track record and integrated capability. If we want our firms to compete meaningfully, we must move beyond supporting individual expansion towards structured collaboration.

Schemes, such as MRA and EFS, could be adapted to provide explicit incentives for consortium-led bids, enabling firms to "hunt as a pack" and pool complementary strengths to pursue opportunities that no single company could realistically secure alone.

And as firms from Northeast Asia and Europe increasingly view Singapore as a gateway into Southeast Asia, we must ask whether our ecosystem has sufficient regional fluency, multilingual advisory capability, regulatory expertise, deep local partnerships, to anchor these flows here. If we want to capture these investment and trade flows, we must strengthen not just financing, but market intelligence and in-market advisory platforms, working closely with trade associations and chambers.

Mr Speaker, Garry Kasparov, one of the world's greatest Grandmaster of Chess, once said, "The point of modern chess is not to wait for mistakes. It is to force your opponent to make one."

Budget 2026 recognises that Singapore cannot afford to wait, especially in an increasingly uncertain and volatile world. It gives us the tools and sets the direction. But forcing the move forward cannot be done by Government alone. Businesses must invest, not delay. Management must redesign, not defend the past. Workers must upskill and not stand still.

In a structurally tighter Singapore, hesitation is not caution. It is decline. If we take the offensive with discipline and conviction, we will not merely respond to structural change. We will shape it. For these reasons, I support the Budget.

2.41 pm

Mr Speaker: Before I call the next Member, I have an announcement to make.

Debate resumed.

Mr Speaker: Senior Parliamentary Secretary, Shawn Huang.

The Senior Parliamentary Secretary to the Minister for Finance and Minister for Manpower (Mr Shawn Huang Wei Zhong): Mr Speaker, there is an old Teochew saying that our grandparents' generation will know well, "Buay chang, buay chu, jiak chor hu pee". Sell the field, sell the land, just to eat the pomfret's nose.

If you are under the age of 40, you might think and hear that it sounds financially irresponsible. Why would anyone liquidate their assets for a slice of seafood? Our elders were not being reckless. They were being profound.

It was never about the fish. It was about the immeasurable value of a family reunited. It was about the sacred act of ensuring that once a year, during the reunion dinner, the family table was abundant. To look at a pomfret on the plate was to see sacrifices made manifest. It was a constant, delicious reminder, that to provide for those you love, you must be willing to give up everything that we have. That same spirit sits on our dining tables, usually unnoticed. I am speaking about the rooster bowl.

For those of us who grew up in the 1950s, 1960s, 1970s and 1980s, this bowl needs no introduction. It is the chipped ceramic plate at the hawker centre, the bowl that held our grandmother's curry. For families and generations who seldom tasted meat, the printed rooster was more than a decoration. It was a vassal of hope. It was a promise. The rooster crows and is first to rise. To see that image on the bowl was to be reminded that prosperity comes from hard work, from the rising with the sun, from the toiling while others sleep.

It served a dual purpose. First, it reminded us of the taste of a delicious meal and the labour needed to put meat on the table. But second and more importantly, it reminded us of home. And the focus required to feed a family, meant that we understood, viscerally, that there were those who have even less.

Why did this design resonate so deeply in our region? The Hokkien word for "rooster" sounds like the word for "family" or "home." So, every time you held that bowl, you were not just holding ceramic, you were holding a piece of linguistic heritage. You were holding "home."

But let us be clear about the context of those meals. Back then, meals were simple, often eaten in haste. Many of our forefathers were coolies and labourers, trishaw riders and factory workers. They were paid by the bag, by the piece, by the hour. Lunchtime was downtime and downtime meant less money for the family. So, they ate quickly.

In some traditions, the chopsticks and the spoon are seen as a complete set. They represented a life of fullness, of balance. And that is why, in some funeral rituals, you only see chopsticks provided. The spoon is absent because the completeness of life is gone.

Despite this superstition, there was a harsher reality. To eat without a spoon was a sign of a hard life. It meant you were so poor, or so rushed, that you had to shovel food into your mouth with just a pair of chopsticks. There was no grace, no leisure. Our Pioneers ate at roadside carts, standing up, backs against the wall, shovelling rice because the next lorry was waiting to be unloaded.

It was the pioneering spirit distilled into a meal. Every mouthful was a reminder, "This is why we do what we do. This is why we sacrifice."

I want you to wonder with me for a moment. These bowls, so iconic to our childhoods, were not made in Singapore. They were designed by Hakka and Teochews craftsmen in Guangdong and produced in places like Chaoshan in China and Lampang in Thailand, in the 1950s. War, migration and geology dictated their origin.

So, why did we not make them here? Why did we import our family symbols?

Because the clay we had here was not the same. It was not the white kaolin clay suitable for the snowy white porcelain of the rooster bowl. Our geology was different. What we had was stoneware clay, rich in iron and silica. You couldn't make a delicate, translucent bowl out of it, but you could make something indestructible. You could make the dragon jars, People call it "Leng An”, “Giam Chai Ang” or “Geng” the massive ceramic water jars that sat in our bathrooms and kitchens before modern plumbing.

Everyone of my generation remembers there was no instant heated water. It was the cold showers, the plastic ladle, the heavy ceramic jar. If you were lucky, someone had boiled water and poured it into the jar to warm it up.

This leads us to the ground beneath our feet. If you have ever seen the earth turned over at a construction site in Jurong or at Redhill, you will notice it is not brown. It is a deep, organic red. And sometimes, purple.

Singapore’s climate, as we know, high heat, heavy rainfall, is a chemical factory. Over a millennia, rainwater filters through the ground, washing away soluble minerals, the soft stuff, like silica and magnesium. What gets left behind are the, hardier, less soluble minerals, iron and aluminium. When iron is exposed to oxygen, it rusts. It turns into iron oxide. That is why our soil is red.

When that clay is fired at 1,200 degrees Celsius, the iron acts as a pigment. With less oxygen, it turns grey or blue. With more oxygen, it turns toasty brown or deep red. It bleeds into the glaze.

We did not have the fine clay, found elsewhere. We had iron-rich, rugged earth. And from that rugged earth, we forged an iron-willed, rugged people.

As our Founding Prime Minister Mr Lee Kuan Yew famously said, we must have that iron. That iron is not just in our soil. It is in our collective spirit, the character, the mettle, the verve in every Singaporean and in every Singaporean family. It is in our stories.

Recently, I was moved by a project by our reowned local ceramist Kim Whye Kee who made 100 such ceramic bowls with the Pomfret motif and our famous film director Royston Tan who filmed 100 dinners with 100 families. Through their lens, we see the joys, the struggles of each family, each diverse, different phases in life. Each making the best out of the clay. We see the iron in them.

Among them, three struck the deepest chord in me. We all have a view of the perfect family dinner. For some, it is the TCS Channel 8 drama version. Everyone gathered around a round table, laughing, passing dishes. But for most of us, dinner is a time of reflection, of worry, of joy and of challenge.

The first story is of Amin Iskak and Azizah Binte Ahmad. After more than 50 years of marriage, they still sit side by side. Age has slowed them down, but they are never alone. Their children visit often, despite busy schedules. They cook, they lay out the dishes. To the children, they are blessings. Family remains the priority.

The second story is of Lee Changloong and his family. Life moves fast. Between tuition and work, time is scarce. Many a times, dinner happens in the car, parked by the roadside, with takeaway containers balanced on their laps. They only have 30 minutes. The world slows down. They talk, they laugh. Home is wherever they are together.

The third story is of Chen Zhiming. He knows that time is not something to take for granted. Living with a condition that will gradually limit his mobility, one day he will lose his ability to move. Every meal with family, is an extraordinary experience, one to be cherished.

These stories are not anomalies. They are the Singapore Spirit, they are the iron which we forged and build together. As the Malay saying goes, “Bukit sama didaki, lurah sama dituruni.” Hills we climb together, valleys we descend together. rain or shine, we must support these families. This is our collective identity. That is what sets us apart.

This spirit of sacrifice, of saving for the future, extends beyond the family table to the nation. It takes a lifetime to build a family. It takes effort, determination, risk and sacrifice to build a better life for tomorrow. It takes incredible forward planning, and further sacrifice over generations, for our children to be secure.

"前人种树，后人乘凉". The hardships of one generation lead to the comforts of the next.

We are thankful for the past generations of what some might call "less-than-accurate fiscal marksmanship" for the prudence, the discipline, the refusal to spend everything we had. Because of that, when COVID-19 struck, we were able to draw on 20 years of surpluses. That prudence, that stewardship, that iron-will to save for a rainy day, that is the dragon jar of our nation that held water when the well ran dry.

So, why am I telling you about clay and jars and bowls and family dinners?

I think of the three "kia" that make Singapore successful: "kiasu" (怕输), the fear of losing, which drives us to prepare; "kiasi" (怕死), the fear of death, which makes us value safety, life and respect for others; and "kiabo" (怕没) the fear of not having enough, which drives us to work hard and save for the future. These are not negative traits. They are our pioneering spirit, forged by unique circumstances. We should never shy away from that. We must be proud. It is this trailblazing spirit that lets us stand tall. We are forged, not born.

It is a stark reminder for our current and future generations. We fear our worst fate is to drift into a culture that is frivolous, thinking that we have arrived with easy effort. Even with a rich inheritance, we must develop our own abilities and keep the pioneering spirit alive, and to remain united against all odds, however complex the external environment may be.

As we grow in success, as we grow in stature, we must always remember our roots. And in Malay, we say “Ikut resmi padi, makin berisi makin tunduk.” Like the padi stalk, the more fruitful we are, the more we bow our heads. We bow our heads because we remember there are more who are less fortunate. There are youth who need the guidance of the wise, and there are wise who need the renewed spirit of the youthful. May we embrace one another and give collectively.

We never had the fine white clay. But we forged ourselves. We may be dusty, we may be earthly. But in each of us, forged by fire, there is that iron-will in all of us. Majulah Singapura. [Applause.]

Mr Speaker: Ms Eileen Chong.

Ms Eileen Chong Pei Shan (Non-Constituency Member): Mr Speaker, in Mandarin, please.

(In Mandarin): Mr Speaker, today, I would like to explore a question that we deeply care about, from a young person’s perspective: "What does it mean to live well in Singapore?"

This question seems simple, but it is profound. Living well is not just about high income, big houses or rapid economic growth. Living well is more about whether we have time and energy to be with families and whether we have space to explore and grow. Today, I would like to share three indicators for living well.

First, time – a resource that money cannot buy. One of the major focuses of this Budget is artificial intelligence (AI). I support Singapore in keeping pace with the times and embracing AI. Yet while productivity has improved with the adoption of AI tools at work, workload has increased instead of decreased. International research is beginning to confirm this.

The adoption of AI tools has not only failed to reduce the employees' workload, but made them busier instead. This is because the adoption of AI tools has accelerated the pace of work, expanded their scope of work and lengthened their working hours.

I cite this example, hoping that while we embrace AI, we also do not forget to face the potential risk that AI brings. The risk is not merely that AI eliminates some jobs, but that it leads to job intensification, resulting in workplace burn-out. Singapore may find ourselves in this situation if we pursued AI adoption without relevant guardrails.

I urge the Government and Singaporeans to consider not only how AI can help us improve productivity, but also think about how we can leverage emerging technology like AI to reclaim more time that we can spend with family and friends.

Second, presence – something that cannot be achieved even with time, but without energy.

A topic I often discuss with friends my age and young Tampines residents is that whether to have children. The biggest consideration is rarely money, but whether we will be an exhausted parent who is physically present but emotionally absent.

We all hope to have sufficient time and energy to good parents who can provide our children with high quality companionship. The 2021 Marriage and Parenthood Survey results shows that while over 90% of married Singaporeans want to have two or more children. In reality however, more than half only have one child or none at all.

Mr Speaker, I support the series of measures introduced in this year's Budget to reduce the burden on Singaporean families. At the same time, I also hope the Government will also provide a complementary set of policies, including childcare leave based on number of children, introducing paid caregiving leave and upgrading Flexible Work Arrangements guidelines to enforceable legislation. This will allow more Singaporeans to have time and energy to be with family and friends.

Third, is space for exploration, which complements time and energy. While AI can become a substitute for many things, it cannot replace personal experience and judgement. This is why we should give the younger generation more space to explore and grow, stimulating their imagination and sense of purpose. I suggest further reducing emphasis on examinations, such as by piloting a 10-year through-train programme from primary to secondary school, allowing students to choose whether to take the Primary School Leaving Examination (PSLE). Rather than spending more than a year preparing for written exams, we should focus more on cultivating children's empathy, curiosity, creativity and sense of purpose during the critical adolescent period. It is these difficult to measure qualities that will make young Singaporeans shine in the AI era.

Mr Speaker, I support this year's Budget. Singapore must sail against the currents. If we do not advance, we will fall back. We must continue to develop and maintain our competitiveness.

However, at the same time, I hope that we do not forget that the basis of a prosperous nation is a people who live good lives. Lives where they have time to be with family. Lives where they have energy to grow their families and accompany their children as they grow. Lives where there is space for exploration so each generation can live better than the previous one.

Next, I will share my observations and suggestions in English.

(In English): Speaker, I rise today to offer a complementary perspective as a young millennial Singaporean. For many of us, the question we want an answer to is not whether Singapore is competitive. It is whether Singapore is still a place where we can live well. I wrote this speech in an attempt to answer one question that I believe is core for Singapore, as we chart our next phase: "What does it mean to live well in Singapore?"

In his Budget speech, the Prime Minister spoke of growth, innovation and resilience. These are important, but a good life is not only built on GDP per capita or AI adoption rates. It is built on time – time for the people we love. It is built on presence – the ability to be there for our families and communities. And it is built on space – space for Singaporeans to grow, to explore and to become themselves.

Budget 2026 already speaks extensively to Singapore's competitiveness. So, today, I would like to speak about Singapore's liveability, because for my generation, these are not one and the same thing.

Mr Speaker, let me start with time. A significant portion of the Prime Minister's Budget speech was devoted to AI. Indeed, AI will reshape how we work, how businesses compete and how public services are delivered. I support the ambition to harness AI as a strategic advantage, but I also want to acknowledge something that many Singaporeans feel but few are saying out loud – that AI fatigue is real. It is the feeling that no matter how fast we learn, the ground is always shifting beneath us. It is the worry that tools meant to make us more productive to make our lives easier are actually leaving us with more to do. This is not just anecdotal.

A recent Harvard Business Review article shared the findings from an ongoing study which tracks how generative AI changed work habits at a US-based technology company with more than 200 staff over eight months. The findings were striking. The adoption of AI tools did not reduce workload. They consistently intensified it.

AI accelerated tasks, which raised the expectation for speed, which deepened reliance on AI, which expanded the scope of work, which further increased the density and volume of work for each employee. The researchers warned that what looks like higher productivity in the short run can mask silent workload creep and growing cognitive strains as employees juggle multiple AI-enabled work streams and tasks. Over time, it will become harder to differentiate between genuine productivity gains and unsustainable intensity.

For employees, the cumulative effect is fatigue and burn-out. This matters for Singapore, especially as we call on more Singaporeans to embrace AI at work. The evidence suggests that the risk is not only job displacement, but also job intensification. The risk is not that AI replaces us, though it will replace some jobs, but that it makes us run faster on the same treadmill. AI adoption without guardrails will not give Singaporeans their time back. It may take more of it away.

I urge the Government and all Singaporeans to think about not just how AI can make us more productive, but also about how it can give us our time back. Singapore's average full-time working week stands at nearly 44 hours, not including unpaid overtime work. This is among the highest in a developed world. Sixty-one percent of Singaporean employees report feeling exhausted. Burnout cost the Singapore economy an estimated $15.7 billion annually in lost productivity.

Mr Speaker, productivity gains do not automatically become human gains. Without deliberate policy choices, they tend to remain employer gains. If AI can automate routine tasks, what comes next should not only be what additional tasks can be added to an employee's plate at work. Perhaps it is that they leave the office on time most days to have dinner with their families and not only on quarterly "Eat With Your Family" day.

Last year, the Prime Minister spoke of building a "we first" society – a society where we look out for each other, volunteer and contribute. I support this vision, but realising it requires something that money cannot buy – time. A "we first" society needs people who have the time and energy to show up for each other – and I hope this will be one of the design goals of our national AI strategy and not an afterthought.

This brings me to presence, which requires both time and energy. I want to share tidbits from conversations with friends, peers and young Tampines residents about growing our families, about having a child or having another one. These conversations rarely begin with money.

They begin with a pause, sometimes a sigh and then almost always a shared concern that we cannot be the parents that we want to be – present, engaged, patient, even after a long day at work – instead of giving in to screen time because we are exhausted and need a moment of peace.

The Government's own data reflects this. The 2021 Marriage and Parenthood Survey shows that over 90% of married Singaporeans want to have two or more children. The reality, however, is that over half of these married Singaporeans had only one or no children. Our TFR has since plunged below one, holding steady at 0.97 since 2023. This gap between aspiration and reality is not a gap in desire. It is a gap in enabling conditions. Young Singaporeans today are not overwhelmed because we do not try hard enough. We are overwhelmed because we are encouraged to get married, to have children, to remain in the workforce, to upskill, to embrace AI, to volunteer and to care for our ageing parents so they can age in place. Yet policies and workplace culture have not fully caught up.

Budget 2026 contains welcome measures for families, ranging from additional child Life SG credits, enhanced preschool subsidies and extended means-testing support. Such financial measures matter and we also need a supplementary set of policies to complement them, focused on giving Singaporeans back the time and energy to actually build a family and parent with presence, patience and joy.

This is why at the upcoming Committee of Supply debate, I will be putting forward proposals on per child childcare leave, paid caregiving leave and having actual enforceable flexible work arrangement policies rather than guidelines. These will help us to better support Singaporean families as they grow and age and, hopefully, lead to higher fertility and stronger family outcomes.

And finally, Mr Speaker, I would like to speak about space. I have spoken about time and how the economy consumes it. I have also spoken about presence and how families need it. Now I want to talk about something that connects the two – whether our system leaves ample space for our people, especially our youths, to grow, explore and become themselves.

Let me start with our young. The Budget speaks of the importance of strengthening AI literacy and ensuring that young Singaporeans develop rigorous foundations, so they use AI wisely and not as a shortcut. I agree and would like to ask, what are rigorous foundations in a world where AI can generate code, analyse large datasets and even compose music?

Surely, the competitive advantage is no longer what we know, but who we are – our capacity for empathy; for creativity that comes from lived experience and not pattern recognition; our ability to sit with uncertainty and not be consumed by anxiety; and our willingness to try something difficult, fail and try again.

I welcome the long overdue comprehensive review of our education system. If AI is going to change the nature of work, then surely it must also change what we value in education. And changing what we value, requires changing how we measure. Singaporean families collectively spent $1.8 billion on private tuition in 2023. This is up 64% from a decade ago. This is not parental access. It is a rational response to a system that sorts early and sorts sharply. The PSLE, for all of its merits in maintaining a set of standards, should not be defining a child's sense of self-worth at an age where they should be discovering who they are and what they care about. I am not calling for us to abandon the bell curve.

I am calling for a rethink of how we use it. Rather than competitive grading and sorting, we should use it as a diagnostic tool to track a child's progress over time, identify specific learning needs and celebrate their growth. When access to opportunities is too tightly tied to early academic performance, those of us who take longer to find our footing may find some doors closing before we have even had a chance to knock.

This space in our education system should be complemented by space in our economy. I welcome the Budget's emphasis on lifelong learning.

Lifelong learning for youths of today may also mean lifelong experimentation – the freedom and space to pursue different paths, combine different strengths and to build a working life that reflects who we are and not just what the market demands of us at the present.

Some of our youths are already doing this. They are building portfolio careers, combining roles, projects and pursuits that do not fit neatly into a single job title. This is not a collection of side hustles. It is a reimagining of work that values flexibility, autonomy and personal growth. It reflects the very qualities we say we want in our workforce – adaptability, entrepreneurial thinking and a willingness to take calculated risks.

I look forward to hearing more about the mandate of the new Statutory Board formed by the merger of WSG and SSG. I hope it will build complementary and updated frameworks for career development and ensure labour protection and skill certification to accommodate diverse work arrangements, while safeguarding longer-term income security and career progression.

To conclude, Mr Speaker, I am for growth, I am for staying competitive, I am for the adoption of AI. Singapore must remain economically vibrant, strategically relevant and globally connected.

Budget 2026 is titled "Securing our Future in a Changed World". I support this aspiration and I humbly suggest that securing our future is not only about securing our competitiveness. It is about securing the conditions for a good life; a life of time for the people we love, a life where we can be present for our children, our parents and our communities; a life within our space in our schools, in our workplaces and in our neighbourhoods, for people to grow into who they are meant to become.

For six decades, we have built a culture that equates progress with movement. It has made many of us, including myself, feel guilty when we are still, because if we are not striving, then, surely, we must be falling behind. Perhaps this explains why the Pace of Life project conducted by Prof Richard Wiseman found that we are some of the fastest pedestrians in the world.

Well, sometimes progress is indeed about moving forward, but sometimes, as I have learnt after leaving my first job at 31, progress is about floating, catching our breath, looking around, noticing things that we would have otherwise missed when we are rushing from point A to point B. I believe Singaporeans are ready for a conversation about what we are willing to prioritise to build a Singapore that is both successful and sustainable.

I hope the Government will be brave enough to measure what matters most; to trust Singaporeans with flexibility, with dignity and with a little more space to breathe and to be human. Mr Speaker, I support the Budget with the observations I have made.

Mr Speaker: Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 3.30 pm.

Sitting accordingly suspended

at 3.11 pm until 3.30 pm.

Sitting resumed at 3.30 pm.

[Deputy Speaker (Mr Christopher de Souza) in the Chair]

Debate on Annual Budget Statement

Debate resumed.

Mr Deputy Speaker: Order. Mr Jackson Lam.

3.30 pm

Mr Jackson Lam (Nee Soon): Mr Deputy Speaker, Sir, Budget 2026 comes at a time of real change. The world around us is becoming more fragmented, more contested and less predictable. Last year, our economy grew by 5%, which gives us confidence. But this year's projected growth of 2% to 4% reminds us that external headwinds are real and likely to persist.

In this environment, resilience cannot exist only in our fiscal numbers or economic forecasts. It must be felt on the ground, by our seniors, our hawkers and our SMEs. Today, I will focus on these three pillars of grounded resilience.

First, I will touch on our seniors. Singapore's ageing population is no longer something we talk about as a future issue. It is already our present reality. We should celebrate the fact that we are living longer. Longer life expectancy reflects the strength of our healthcare system and our social policies. But living longer must also mean living with security and with purpose. If seniors feel uncertain or anxious about their future, that anxiety does not remain isolated. It affects families and ultimately, it affects society as a whole.

Budget 2026 takes important steps. CPF top-ups and higher contribution rates strengthen retirement adequacy. The Long-Term Care Support Fund reinforces CareShield Life. The Senior Employment Credit and the Tripartite Workgroup on Senior Employment encourage businesses to continue hiring and retaining older workers. All these are meaningful moves. As life expectancy rises, retirement itself is changing. Many seniors today are healthy, experienced and still eager to contribute.

So, the question we should ask ourselves is: are our systems ready for multi-stage careers? We could pilot structured second-career pathways in sectors where labour demand remains strong – healthcare support, community care, logistics coordination, SME administration – these pathways can combine modular training, job redesign and clear placement opportunities for workers aged 55 and above.

Digital skills are another key area. While SkillsFuture is broadbased, some older workers may benefit from shorter, very practical modules directly tied to specific job roles. A clearly identified "Senior Skills Track" could lower psychological barriers and encourage more to step forward.

We should also recognise that information today can feel fragmented. Employment support, CPF matters, healthcare schemes and long-term care arrangements sits across different platforms. A more consolidated, senior-focused interface – even if it is simply a navigational layer – would go a long way in improving clarity and confidence.

Ultimately, supporting seniors is not just about financial adequacy. It is about dignity, contribution and about sustaining inter-generational trust. And that trust strengthens us, especially in uncertain times.

Next, I will touch on our hawkers. When we talk about hawkers, we often speak of heritage and culture, and rightly so. But we must also remember: hawkers are small business owners operating on very tight margins. At the same time, hawker centres are shared community spaces, places where Singaporeans from all walks of life gather.

In a fragmented world, such shared spaces matter even more. Yet, rising rental pressures, volatile input costs and manpower constraints are placing real strain on many stallholders. If costs continue to outpace revenues, the risk is not just about business closures. We risk weakening a layer of our social fabric.

Resilience here means balance. Transparency helps build trust. Publishing periodic rental sustainability indicators, even at an aggregate level, can reassure hawkers and the public that rental frameworks remain aligned with operating realities.

On digitalisation, grants are available, but adoption is not just about funding. It requires practical guidance. Structured advisory support, perhaps expanded through hawker associations, can help stallholders with cost control, inventory management and digital payments, that will improve productivity without losing authenticity.

Succession is another important area. Pairing retiring hawkers with aspiring entrants through structured mentorship and phased handovers could preserve know-how while reducing entry risks for newcomers. Supporting hawkers is not just about economics. It is about preserving everyday infrastructure that holds our communities together.

Next, I will touch on our SMEs. Our SMEs are central to our economy. They create jobs, anchor supply chains and generate domestic value. But today, they face a dual challenge – geopolitical uncertainty and rapid technological change. Budget 2026 strengthens financing schemes, internationalisation support and AI-related incentives. These are necessary steps.

However, for many SMEs, the issue is no longer awareness. Most business owners know AI matters. The real challenge is execution. Where do they begin? How much should they invest? How do they assess the risks?

Resilience in this context requires structured enablement. Sector-specific AI playbooks, developed with trade associations, could provide practical, step-by-step roadmaps tailored to industries such as logistics, retail, professional services and F&B. Shared advisory models within industry clusters could allow SMEs to access transformation expertise without bearing the full cost alone.

We could also streamline grant processes through pre-approved solution bundles for common transformation projects that will reduce friction and speed up adoption. In some cases, SMEs within the same sector could even pool resources to invest in shared AI tools or digital infrastructure – that will achieve scale without overstretching their balance sheets. Global uncertainty should not lead to hesitation. If SMEs upgrade decisively, they strengthen both employment resilience and long-term competitiveness.

Mr Deputy Speaker, Sir, resilience must be layered. For seniors, it means inclusion and participation. For hawkers, it means sustainable viability. For SMEs, it means execution capability. Macroeconomic stability gives us room to act. But societal resilience determines whether that stability lasts.

If we strengthen participation for seniors, sustainability for hawkers and capability for SMEs, we build resilience that is both economic and social. In a changed and uncertain world, that layered strength will determine whether Singapore simply adapts or continues to lead. Mr Deputy Speaker, I support the Budget.

Mr Deputy Speaker: Ms Mariam Jaafar.

3.39 pm

Ms Mariam Jaafar (Sembawang): Mr Deputy Speaker, I first declare my interest as Managing Director and Senior Partner of a management consulting firm that does work in the space of AI.

Sir, I have spoken on AI several times in this House. In the Budget 2024 debate, I proposed three principles: first, AI strategy must be driven from the centre with direct oversight from the Prime Minister; second, we should focus on high value, sector-specific deployments, at scale; and third, that trust and governance will be our differentiator in a world racing ahead with AI.

I am encouraged to see these principles reflected in Budget 2026: in the National AI Council chaired by the Prime Minister; in the AI Missions across advanced manufacturing, connectivity, healthcare and finance; and in the stronger enterprise incentives including the Champions of AI and SME grants, and the emphasis on deeper AI literacy, governance and responsible deployment. This shows that rigorous debate in this House matters.

But Sir, the context has shifted – again. Two shifts now demand our attention. The first is a technological shift. The second, an organisational shift.

The technological shift, from tool to operator. Three years ago, the world was captivated by generative AI (GenAI). Today, the frontier is agentic AI. Agentic systems do not just predict or generate content. They reason. They break down goals into tasks. They execute multi-step tasks. They collaborate with other agents. They act, with bounded autonomy, and they improve through iteration.

In other words, agents will not just assist work. They will organise it. They will not just recommend decisions. They will execute them. AI is moving from tool to operator.

For Singapore, this matters. We are a small, open economy with no natural resources and limited land. Our resident labour force is already declining. Productivity growth, therefore, must come from expanding capability. We cannot compete on scale or spend, but we compete on coordination, trust, governance and execution.

We may not build the largest frontier models or global AI platforms. But we can build the most trusted agentic systems and applications – AI that is safe, accountable and designed for real industries.

With agentic AI, we can multiply cognitive capacity at national scale. This is not hypothetical. A leading bank in Singapore is already deploying Agentic AI to deliver what it calls "bionic" wealth management. AI Agents now conduct real time portfolio assessments, recommend personalised offerings and send tailored outreach material, all in seconds. This frees the Relationship Manager to focus on judgement, relationships and strategy. That is the opportunity: AI handling complexity at speed, while humans exercise wisdom.

By 2028, my firm estimates that Agentic AI will double its share of AI-driven value creation, from 17% today to 29%, outpacing traditional AI and GenAI.

So, the question is not whether Singapore will use AI – we will. The question is where the value will sit? If the core systems are all designed elsewhere, the standards are all written elsewhere, we may use AI extensively, but see much of the value be captured elsewhere. We will optimise workflows, but not own the intellectual property. We will upgrade processes, but remain dependent on other people's roadmaps. Our workers may use AI, but the highest value jobs will sit elsewhere.

But if we build capability here, design systems here, govern standards here, then higher value work, higher productivity and higher wages will sit here. Sir, this is the real cost-of-living strategy. Every Budget, we discuss vouchers, rebates and support packages. These measures matter. They make a real difference to my Woodlands residents and to other Singaporeans. But they are temporary reliefs. They help families cope with this year's prices. But what determines whether families truly get ahead, in the years ahead, is not vouchers, but jobs and wages. And this is about ensuring that our Singaporean families' incomes rise faster than prices.

Small states do not get many opportunities to lead and to shape global frameworks. This may be one of those moments. True strategic advantage requires building sovereign capability. Leadership in the core systems that AI runs on; interoperability and audit standards; governance frameworks that are trusted internationally.

We can do more than deploy. We can create. We can disrupt. Our AI Missions must, therefore, be more than transformation roadmaps. They must be innovation engines – living laboratories for multi-agent systems, safety standards and human-in-the-loop designs. We should have open R&D agendas, cross sector labs and build cross border innovation models, partnering with global AI platforms, AI startups and talent.

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Where might this matter most? I would look to sectors where, one, we already have strong data infrastructure; two, trust and regulation matter; and three, coordination complexity is high and the value of intelligent coordination is high. These sectors present opportunities to design, govern, deploy and export agentic AI solutions and governance frameworks.

In finance, think autonomous compliance agents, real-time regulatory reporting and cross-border risk management. Exportable "RegTech agents" that embed Singapore's regulatory philosophy – transparent, rules based, trusted – cementing our position as a global finance hub.

In healthcare, hospital workflow optimisation, preventive health monitoring, care-coordination agents. With one of the fastest-ageing populations in Asia, we can become a testbed for systems that reduce administrative burden on clinicians and support community nurses and caregivers and export these solutions to other ageing societies.

In logistics and connectivity, orchestration agents that dynamically optimise supply chains, predict congestion or autonomous trade documentation agents. It will make the world's busiest port also the world's most intelligent port.

In urban systems and sustainability, our Smart Nation Infrastructure provides rich datasets. If we can demonstrate an AI-managed city that is safe, efficient and trusted, Singapore becomes a living export showroom.

These are not tools. They are sector-wide operating systems – generating intellectual property, productivity gains and exportable capability.

But this requires ambition and capital. AI transformation, agentic or not, is costly and capital intensive. It requires compute, system integration, workflow redesign, cybersecurity, governance infrastructure and workforce re-training. It will take years, not months, and it cannot run on annual budgeting cycles.

If we expect our Champions of AI to redesign operating models over multiple years, then support and financial backing must also be structured and multi-year, tied to measurable productivity outcomes and anchored by accountable leadership at the chief executive officer (CEO) and Board level.

Champions of AI must not just be showcases that inspire. They must be multipliers. They should publish playbooks, host cross-sector learning, mentor SMEs and bring along their supply chains and share implementation frameworks. Because the true measure of a Champion is not how far ahead it moves but how many others it pulls forward.

I talk now about the organisational shift – from pyramid to diamond.

Sir, the most disruptive shift is not technological. It is organisational. For over a century, organisations have been shaped like pyramids. Few decision-makers at the top; a broad based of individual contributors, executing day to day operations; and layers of middle management, coordinating work.

Agentic AI collapses layers of execution. What emerges is a diamond-shaped organisation. A narrower base, where AI agents handle routine work; a strong, skilled middle, responsible for supervising, designing and orchestrating of fleets of intelligent systems; and a strategic apex focused on judgement and direction.

Not every sector will move at the same pace. Construction or patient-facing healthcare roles will evolve more slowly. But in fields, like software development, marketing and customer service, the change will come sooner than you know it.

This has serious workforce implications.

First, we must prepare Singaporeans for the middle of that diamond. In a diamond-shaped organisation, the middle layer becomes more important, not less. They must not only demonstrate AI literacy; they must master AI supervision and orchestration. They must be able to frame problems, direct AI agents, curate inputs, validate outputs, apply domain judgement and ethical reasoning.

Tool access is necessary, but not enough. So, we must teach Singaporeans not just how to use AI but how to think with AI, to challenge it and to govern it. This means serious investments in mid-career reskilling and professional certifications in AI supervision and AI operations, mentorship and applied learning and building a culture of collaboration with AI. Not humans versus AI; but humans with AI.

At the same time, entry-level jobs may narrow in sectors adopting the diamond-shaped organisation. We must act early and create meaningful pathways into work for graduates and tertiary students. Mandatory AI literacy modules across Institutes of Technical Education, polytechnics and universities, structured apprenticeships and externships when they are still in school, when they work directly alongside seasoned professionals and AI systems and curricula that develop critical thinking, problem-solving, functional skills, ethics, systems thinking and domain knowledge necessary to progress quickly into mid-level roles.

This flows down into lower education. If we train our children to memorise, AI will outpace them. If we train our children to question, to synthesise, to exercise judgement, AI will be their multiplier.

Exams must reward reasoning – not recall. Because in the age of agentic AI, the scarce resource is not information. It is wisdom.

Second, we must modernise our human resources (HR) in career frameworks.

In a diamond-shaped organisation, progression may no longer mean managing ever larger teams of people, but larger and more complex fleets of AI agents. Performance systems must recognise those who deploy AI effectively to increase output, accuracy and quality or to create new value.

If we fail to modernise our institutional frameworks, we risk stagnation – not because Singaporeans cannot adapt, but because our institutions did not.

Inclusion – multiplication without division.

There is a risk we must confront directly. AI is a national multiplier. But multipliers widen gaps unless access is equal. If higher-income households deploy AI to accelerate learning, entrepreneurship and career progression while lower-income households lack access, capability and confidence, inequality will compound.

Inclusion cannot be an afterthought.

AI literacy cannot stop at universities, polytechnics, schools or corporate reskilling. It must reach my most vulnerable Woodlands residents and across Singapore, who are already navigating multiple stressors in life. We must recognise the effort and responsibility our residents already show in working, learning and caregiving. AI must amplify that effort.

Here ComLink+ provides a blueprint. The model includes case workers, customised action plans, milestone-based incentives and long-term engagement.

That architecture is actually what AI inclusion requires. AI literacy cannot be delivered as a one-off workshops. It must be coached, contextualised and sustained.

Today, ComLink+ supports families with goals around employment, and education. We can introduce AI Capability Milestones, such as when the parent completes foundational AI literacy module; when a child demonstrates safe and effective use of AI for schoolwork; or when a family sets up supervised AI tools for job search or for their home-based business.

Supported by AI coaches, we ensure every Singaporean has the skills to supervise AI; the tools to deploy AI; the confidence to question AI; and ultimately, equal access to opportunities in AI. That is the type of inclusion that ensures national multiplication, not division.

From ambition to outcomes.

Sir, this AI agenda is ambitious. As we pursue this agenda, will the Government commit to tracking and releasing annual value creation, productivity and wage uplift outcomes attributable to AI adoption across key sectors alongside data on jobs displaced by AI? And if our AI strategy does not translate into higher wages and better opportunities for all Singaporeans, will we recalibrate our approach to ensure the value created by AI accrues meaningfully to Singaporean workers and families?

In conclusion, Mr Deputy Speaker, Singapore has always thrived by thinking ahead, moving decisively and building trust. Agentic AI is another defining moment. It is not simply a new technology. It is a redesign of how value is created and how organisations function.

Now, we must build a nation that does not merely use AI but orchestrates it. If we get this right, agentic AI will not replace Singaporeans. It will multiply our capabilities.

For a small nation, multiplication is not optional. It is how we remain sovereign, how we remain competitive, how we remain extraordinary. In the age of agentic AI, those who orchestrate will shape the future. Those who merely operate will follow it. Singapore must orchestrate. I support the Budget.

Mr Deputy Speaker: Mr Dennis Tan.

3.56 pm

Mr Dennis Tan Lip Fong (Hougang): Mr Deputy Speaker, Budget 2026 sets an ambitious AI trajectory. But we must ensure our green transition is not sidelined by its energy demands. Resilience requires addressing the inherent trade-offs of such growth.

Building on my previous Budget speeches, I will also be speaking on other pertinent aspects of green transition and healthcare issues.

AI push. The Prime Minister's announcement of the formation of a National AI Council and the launch of sector-specific AI missions signal a clear intent to move toward Government-supported application of AI in sectors that are key to Singapore's economy and society. However, as we double down on this AI push with tax deductions and the new One North AI Park, we must not lose sight of the unseen costs.

During the Committee of Supply debate for the Prime Minister's Office last year, I raised a cut specifically on the staggering increase in energy and carbon use that comes with generative AI. I cautioned then that an indiscriminate rush to integrate large-scale models for every minor task is a luxury our carbon-constrained nation cannot afford.

While the Government has introduced the Green Data Centre Road Map, the current pace of AI adoption may risk outstripping our efficiency gains. We are seeing a rebound effect, where more efficient hardware is being used as a rationale for allowing exponentially higher usage. It is not enough to have green data centres if the AI models running within them are fundamentally wasteful.

Alongside infrastructure, efficiency standards, like the power usage effectiveness (PUE) target of 1.25 in the Infocomm Media Development Authority's (IMDA's) latest Data Centre – Call for Application (DC-CFA2), which will also require software level accountability ensuring that the AI Solutions receiving Government funding, including those under the enhanced Enterprise Innovation Scheme prioritise small AI and task-specific models that require a fraction of the energy of general purpose large language models (LLMs).

We must not be the target for the migration of inefficient workloads to regions with fewer software level environmental regulations. We must also mandate transparency for the software that consumes energy.

Just as importantly, I am concerned that recent move to allow more data centre construction will enable data centres to outcompete households and smaller businesses in Singapore in electricity purchases with the majority of our low carbon electricity import projects still in early development. Green electrons continue to be in short supply in Singapore, over the next few years.

On one hand, households and small businesses may not benefit from the greening of the grid remaining exposed to the virality of the global gas market at a time of geopolitical unrest. On the other hand, Singapore's latest data centre requirements are relatively lax compared to other advanced states.

While Ireland requires data centres to be active partners in grid reliability through 100% on-site, backup capacity and 80% renewable matching, our current DC-CFA2 framework only targets 50% green energy, leaving a significant gap that our national grid and, by extension, the ordinary taxpayer must bridge.

If data centre developers want to benefit from Singapore's strategic location, they should also play their part in supporting grid reliability and the development of further renewable electricity capacity. And while I do accept that the Government has taken steps to accelerate the expansion of renewable electricity availability in Singapore, setting up the Future Energy Fund and the Singapore Energy Interconnections, the roadmap still needs to be clearer.

True leadership in AI is not about the number of AI champions we can produce but about how sustainably we can grow this sector. If we are to achieve our net-zero 2050 commitments, the National AI Council must bridge the gap between digital ambition and environmental reality. We need more than just incentives. We need a clear regulatory framework that mandates energy disclosures for large-scale AI developers, like the European Union (EU) which will begin mandating energy disclosures for large AI developers by August this year.

As I stated in my Prime Minister's Office cut last year, by being an early adopter of carbon-conscious AI regulations, Singapore can turn our resource constraints into a competitive advantage, exporting sustainable AI expertise to a world that is increasingly waking up to the ecological cause of the global AI race.

Mr Deputy Speaker, like in my Budget debate speeches over the last few years, I next touch on green transition. I have consistently argued that Singapore's green transition must be more than a collection of ambitious targets. It must be transparent, inclusive and socially just process.

Mr Deputy Speaker, I welcome the Prime Minister's focus on chartering a sustainable future and his candid assessment of the climate challenges that Singapore faces. I am particularly heartened by his firm commitment that despite global trends, retreating from climate action is not an option for our own nation.

Last month, I asked the Minister for Sustainability and the Environment about our plans to submit a National Adaptation Plan (NAP) to the United Nation's Framework Convention on Climate Change. I thank the Minister for her reply, noting that the inaugural NAP will be published in 2027 and will incorporate the Belem adaption indicators adopted at COP30. The Belem outcome was a pivotal moment, highlighting that that adaption is not just about engineering. It is about people.

While our current strategy addresses coastal and heat resilience, I urge the Government to more explicitly integrate the Belem pillars of biodiversity and poverty and livelihoods into our national climate framework. Our current focus on infrastructure must be matched by a commitment to the social and ecological dimensions of the climate crisis.

In Belem, the Mutirao Decision emphasised that climate action must be people-centred. We need a plan that tracks not just the height of our sea walls, but the resilience of our homes against the urban heat island effect, including but not limited to challenges of rising cooling costs.

This leads me to the urgent need to protect our biodiversity. As I argued in my Adjournment Motion last month, we must fundamentally rethink how we justify the trade-offs between development and the preservation of our existing green spaces. We must plan for the resilience of our homes against the urban heat island effect, including rising cooling costs. This requires us to value existing green forested sites as strategic green belts, even if they are not original primary forests and have been subject to previous development. This requires a more transparent approach to land use that recognises the inherent climate value of our natural ecosystems. It is strategically superior to preserve existing green belts for heat mitigation, such as the Serangoon River Forest, than to rely on artificial parks. I call on Ministry of National Development (MND) to institutionalise mandatory functional assessment for all forested sites before any developments to protect these vital assets and will elaborate on this at the COS.

Two, adjust transition for Singapore's petrochemical industry. A balanced transition must also be just.

Mr Deputy Speaker, the sale of Shell's assets now known as the Aster Energy and Chemicals Park raises serious long-term questions regarding our serious transition plans. We need clarity on whether the current owners' lease includes mandatory decarbonisation milestones to prevent Bukom from becoming a carbon haven where emissions are simply offloaded to new entities rather than reduced.

Beyond infrastructure, we must also address the human costs. In October 2025, ExxonMobil announced it would retrench up to 500 workers in Singapore by 2027. What specific retraining support is being provided to these hundreds of workers affected by such structural shifts? If we can find $500 million to finance regional green infrastructure via the Financing Asia's Transition Partnership fund, I am sure we can also find the resources to ensure no Singaporean worker is left behind.

I call for the establishment of a dedicated just transition fund to assist, not just the 500 workers laid off, but to help all workers in the petrochemical industry in the coming years who may be affected as we transition away from fossil fuels, including providing specific guidance in transiting to different industry or jobs.

Three, electrification of land transport. Next, we must apply this same rigour to land transport. Prime Minister announced in his Budget speech that Preferential Additional Registration Fee (PARF) rebates have now been lowered by 45% across the board and the maximum rebate has been reduced from $60,000 to $30,000. Industry observers have said that this is likely to dampen industry demand for non-EVs, as this will increase the depreciation of non-EV cars while EVs are unlikely to be affected.

Mr Deputy Speaker, while the change in PARF rebates may help to nudge car sales for EVs, the EY 2025 Mobility Consumer Index found that 42% of Singaporean buyers cite battery replacement cost as a primary reason they are shifting back to petrol or hybrid vehicles. Prior to the recent PARF announcement, the resale cliff has been a growing risk. As of 1 January 2026, the Early Adoption Incentive (EEAI) rebate cap has dropped to $7,500 and used EVs are taking longer to sell than Internal Combustion Engine (ICE) cars, resulting in the decline of EVs' resale value. I urge the Government to study consumer concerns about EV battery longevity and replacement costs and consider how to strengthen consumer confidence in this area.

Mr Deputy Speaker, our 2040 goal for 100% cleaner energy vehicle is at-risk of becoming a two-speed transition. While electric cars have increased despite having their own issues, motorcycle adoption remains stuck at a mere 0.2%. Will the Ministry consider upfront purchase incentive for motorcycles to bridge this gap? Furthermore, the $40,000 incentive under the Heavy Vehicles Zero Emissions Scheme, launched on 1 January 2026 may remain under-utilised unless we can move faster on shortlisted hydrogen pilots or permanent battery swap licences to support our delivery community and logistics sector.

Mr Deputy Speaker, we cannot hit 2040 targets with a slow charged mindset. A transition is only green if it does not leave our workers or our residents in the raid. Our people need a transition that is fair, funded and fundamentally just.

Mr Deputy Speaker, I need speak on healthcare. I spoke about the overlooked issue of dental care in our healthcare system in my Budget debate speech last year and I welcomed the announcement during the Ministry of Health's (MOH's) COS debate for higher dental subsidies and flexi-Medisave use for patients aged 60 and above for root canal treatments and permanent crowns at Community Health Assist Scheme (CHAS) clinics and public healthcare institutions last year. But I still hope more can be done.

A recent longitudinal study by the Centre for Ageing, Research and Education at Duke-NUS Medical School revealed that nearly one-third of our seniors have not seen a dentist in over five years. Assoc Prof Rahul Malhotra noted, many visit only when they have a problem but missing the window for prevention. Poor oral health, such as untreated tooth decay, gum disease, ill-fitting dentures or tooth loss, has important consequences. Dr Eugene Tang, President of Singapore Dental Association opined in a recent letter to The Straits Times that it can affect chewing ability and nutrition, leading to unintended weight loss, reduce muscle strength and increased frailty. According to NHG Health, the proportion at-risk of malnutrition among hospital patients aged 65 and above rose from three in 10 in 2022 to four in 10 in 2024.

Preventive care is the heart of healthy ageing. Yet, dental care remains excluded from our national preventive scheme – Healthier SG. For the third time in this House, I call for dental care to be integrated into Healthier SG. We must treat oral health as a basic pillar of well-being, not an optional extra.

Healthier SG connects us to a family doctor clinic. They will help manage our chronic diseases and monitors our health habits and carries out preventive care that can help us stay healthy and active. The same is needed for preventive care for good oral health. And to better care for our seniors, we must also prioritise improving affordability and accessibility of preventive care for oral health.

Affordability of dental care remains an issue for many Singaporeans. Notwithstanding the higher subsidies and MediSave use for tooth saving treatments, we must address the subsidy gap for complex cases. Currently, patients referred to tertiary institutions, like the National Dental Centre for complicated procedures, often due to pre-existing frailty, find themselves ineligible for the same Pioneer Generation CHAS subsidies they will receive at the polyclinic.

My hon friend, Aljunied group representation constituency (GRC) Member, Kenneth Leong's recent Parliamentary Question, asked about extending subsidies for complex denture cases that had to be referred to a tertiary institution. A letter to the Straits Times' Forum Page by Mr Stephen Tan described a similar situation where his 83-year-old mother's teeth extraction had to be done at the National Dental Centre satellite clinic at Changi General Hospital due to fear of complications. But she was denied PG or CHAS subsidies for the procedure. I urge the Ministry to harmonise these subsidies so that our seniors are not financially, penalised because their dental-related medical needs require a hospital setting.

Finally, we must address the rising anxiety over Integrated Shield plan premiums. From April 2026, new Integrated Plan (IP) riders will no longer cover deductibles and co-payment caps will rise $6,000. While intended to curb over consumption and rightly so, this shift, combined with rising premiums may drive many to abandon private healthcare, potentially overwhelming our public search capacity. For many seniors with pre-existing conditions, retaining an IP is not a luxury. It is a necessity for timely treatment. Yet, many find it frustrating that their hard-earned MediSave savings are locked once they hit the basic healthcare sum. At age 65, any excess is moved by \default to the Retirement Account. While this boosts monthly payout, it does not help with the lump sum nature of annual insurance premiums which can reach several thousand dollars.

Therefore, will the CPF Board consider allowing CPF members who have me their Basic Healthcare Sum to retain a portion of excess funds in their Ordinary Account or a dedicated insurance sub-account. This will allow them to withdraw funds specifically for IP premiums. By helping Singaporeans maintain their private insurance, we moderate the demand on our public system, ensuring national healthcare delivery remains sustainable for all. Mr Deputy Speaker, in Mandarin, please.

(In Mandarin): Mr Deputy Speaker, the Budget proposes to accelerate the development of artificial intelligence (AI), establish a national AI Council and launch multiple industry AI programmes.

I support this direction of technological development. However, I already raised during the Committee of Supply (COS) debate for the Prime Minister's Office last year that the energy consumption and carbon emission of generative AI are growing very rapidly.

Can we talk about green transition on one hand whilst underestimating the urgency of this programme on the other? Although the Government has launched a Green Data Centre Roadmap and set energy saving targets, if overall usage continues to expand, the so-called efficiency improvements may very well be offset by rebound effects.

Therefore, in terms of enterprise innovation grants, we should encourage the development of more energy-efficient, "Small AI" and task-specific models rather than uniformly using large general-purpose models across the board. We cannot become a destination for high energy workload transfers. We should require large AI companies to disclose energy data to protect the interests of the national grid and taxpayers. Whilst promoting digital transformation, we must also care for seniors with lower digital capabilities to ensure that they are not left behind in this wave of AI development

Mr Deputy Speaker, I support this Budget.

(In English): Mr Deputy Speaker, let me round up my speech.

We cannot achieve our 2040 and 2050 targets with a slow-charged mindset that ignores the practical realities of our people, whether we are discussing the carbon footprints of AI, the hurdles of EV adoption or the fundamental right to affordable dental care, the common thread is clear. A transition is only green if it is also just. Notwithstanding my concerns and clarifications, I support the Budget.

Mr Deputy Speaker: Prof Kenneth Poon.

4.15 pm

Prof Kenneth Poon (Nominated Member): Mr Deputy Speaker, I would like to begin by expressing my appreciation for the measures announced in this year’s Budget. Important steps have been taken to support Singaporeans through ongoing global uncertainties while continuing to invest in our long-term economic resilience and social well-being. I support this Budget and its emphasis on strengthening opportunities, supporting families and enabling Singaporeans at different life stages to progress with confidence. My remarks today are, therefore, offered in the spirit of constructive support.

As we consider the spirit of a “we first” society, it may be useful to examine not only what support is provided but how policy initiatives shape the capacity of Singaporeans to participate meaningfully in shared institutions, such as schools, workplaces and community networks across the life course. Research in human development suggests that positive long-term outcomes are influenced not only by access to programmes, but by the extent to which individuals remain embedded in common social institutions through key transitions in life, such as entry into post-secondary education and employment.

From this perspective, I would like to offer four questions that may serve as a lens for considering how initiatives within this Budget strengthen Singapore’s social foundations over time.

First, does the initiative enable participation in common social life or does it primarily deliver services within specialised settings? While specialised supports are often necessary for competence-building and protection, their long-term effectiveness depends on whether they ultimately scaffold participation in everyday life. The question, therefore, is not whether specialised supports are needed, but how they connect individuals back into common settings over time.

Second, do our institutional arrangements connect people across life domains or do they channel them into separate tracks? Life course research suggests that systems which bridge education, employment, healthcare and family life are more often able to sustain continuity in developmental pathways. In contrast, fragmented or categorised service structures may inadvertently introduce discontinuities that may constrain participation or mobility across transitions.

Third, how is responsibility distributed across society? Many policies provide valuable programmes, but the coordination of care, the navigation of services and the sustaining of participation are often undertaken by families or professionals. An approach that places disproportionate reliance on a single individual increases the likelihood of cumulative strain and, over time, heightens the risk of stress and burn-out. Correspondingly, it is important to consider whether those involved are adequately supported.

Finally, are communities enabled to act as responsible partners with a meaningful voice in shaping the institutions in which they participate in or are they positioned mainly as beneficiaries? Evidence from co-production and community development suggests that outcomes are strengthened when families and communities are engaged, not only as recipients of services but as partners in institutional design and delivery, thereby supporting sustained engagement and reducing risks of disengagement over time.

Taken together, these questions invite us to consider how policy investments can influence participation trajectories over life stages and particularly at transition points. So, I will consider this across four areas: firstly, persons with disabilities and their caregivers; secondly, vulnerable young children; thirdly, youth development and fourthly, families navigating complex needs.

First, people with disabilities. I welcome the continued support in this Budget for persons with disabilities and their caregivers, including the top-up to the Long-Term Care Support Fund and the planned expansion of Day Activity Centre (DAC) capacity. For many families, one of the most significant transitions occurs when their child exits the formal education system at about 18 years of age. This transition often entails a loss of structured routines, peer networks and community participation, while families navigate a new landscape of adult services.

As the capacity of DACs expands, it may be helpful to consider how transition pathways connect individuals across education, employment and community life. Anchoring transition supports within community-based employment partnerships, shared-use facilities or neighbourhood organisations can help ensure that the specialised supports continue to scaffold participation in everyday institutional life over time.

Next, vulnerable young children. The Budget continues to strengthen affordability and access to the preschool sector, and these are important steps at ensuring no child is left behind. At the same time, developmental vulnerability is often closely intertwined with family stressors, such as housing instability or caregiver fatigue.

In this regard, we may wish to consider how our resourcing for programmes in early childhood connects families across domains of daily life. Strengthening linkages between preschools and services that support families may enable caregivers, not only to access programmes, but to sustain the support of their child or children's development within the home and community environments in which the children spend most of their time.

On youth development, this Budget makes important investments in traineeships, skills development and employment pathways. From a developmental perspective, youth transitions are not only about access to opportunity but about participation in the institutions and communities they will inherit.

Platforms, such as Youth Panels, may therefore be understood not only as consultative mechanisms but as opportunities for co-production that can strengthen engagement, persistence and alignment between institutions and the developmental needs of young persons.

Finally, on strengthening families. Recent enhancements in parental leave, housing support and healthcare initiatives are significant steps towards reducing financial strain and enabling family stability.

Families often serve as primary coordinators across education, employment, healthcare and community systems, particularly during transitions, such as school-to-work or caregiving. Policies that empower families, not only as recipients of services, but as partners in navigating institutional supports can help sustain participation and reduce discontinuities between transitions.

Mr Deputy Speaker, this Budget helps to shape the conditions under which Singaporeans remain connected to one another across schools, workplaces, families and neighbourhoods. When our investments enable individuals to remain embedded in shared institutions across life stages, they strengthen not only individual outcomes but our collective capacity to act in times of uncertainty and change.

In that sense, the effectiveness of this Budget lies not only in terms of the opportunities it creates but in the extent to which it enables Singaporeans to participate, contribute and remain connected over time. This way, it lays the foundation for a "we first" society grounded in shared responsibility and common purpose. And for these reasons, I support the Budget.

Mr Speaker: Dr Charlene Chen.

4.26 pm

Dr Charlene Chen (Tampines): Mr Speaker, as I reflected on this year’s Budget, I asked myself a simple question. If our goal is not just to get through the next year, but to thrive for the long term, what should an ideal Budget prioritise?

One word came to mind – productivity. But not productivity in the narrow sense of GDP or output. True productivity is about enabling people to realise their full potential – our young, our mid-career workers, our seniors who continue to contribute and our persons with disabilities who deserve full opportunity to do so.

Singapore has no natural resources. We rely entirely on our people – their skills, resilience, values and unity. If we want to stay competitive and cohesive, we must invest in enabling every Singaporean to reach their potential. Productivity is not about squeezing more from people. It is about helping people grow.

Even in a more uncertain world, we are fortunate to discuss this from a position of fiscal strength. With surpluses last year and this year, we have the capacity to invest prudently and strategically in our people.

In every Budget, there are two responsibilities: to provide support and to invest. Support reduces inequality and ensures no one is left behind. Investment unlocks potential, because if people cannot reach their potential, the economy cannot either.

Let me begin with young Singaporeans. They have clear aspirations: good jobs, affordable housing, meaningful careers, stable paths to marriage and family and lives with purpose. At my Meet-the-People Sessions, housing concerns often surface. Decisions about flats are tied to life decisions – marriage, career stability and family planning. This was also reflected in the PAP Policy Forum’s Pre-Budget Survey. About 60% of over 1,000 respondents cited daily costs as their top concern and nearly one in five highlighted housing pressures. Many also flagged family-raising as a major worry. When cost pressures weigh heavily, aspirations become cautious.

On employment, nearly half of 433 respondents cited lack of career progression as their biggest challenge and more than one in four mentioned underemployment. This shows that the issue is not simply job creation but whether jobs enable growth. For long-term productivity, young people must see credible and coordinated pathways ahead. This means continued investment in strong school-to-work transitions, better skills-job matching, predictable housing supply, mid-career mobility support, and accessible lifelong learning frameworks.

Structure matters. When aspirations are supported by stable pathways in jobs, housing and skills, people can plan confidently. And when they plan confidently, they commit to families, careers and to Singapore. But our youth are not just beneficiaries of policy, they want to contribute. When they feel trusted and supported, they step forward.

Supporting aspirations is just part of the equation. We are raising a generation that is capable but also under pressure. They face academic competition, social comparison fueled by technology, economic uncertainties and rapid AI-driven change.

Over 100,000 Singaporeans took AI-related courses last year – a positive sign. But readiness remains uneven. One in five survey respondents felt unprepared for AI-related shifts in their industry and nearly half said they lacked sufficient training due to time constraints or difficulty finding relevant programmes. The focus group's discussions reinforced this, highlighting weak training-to-job linkages and skills mismatches as persistent concerns.

Access to courses is not the same as confidence, training enrolment is not the same as career stability. As we embrace artificial intelligence, we must also not neglect another "AI" – actual intelligence. Technology is a tool. Our people must know how to use it, but also how to question it. We must nurture judgment, empathy, critical thinking and moral reasoning.

In my maiden speech, I spoke about the paradoxes of technology: tools that can connect can also isolate; convenience can erode capability. AI presents a similar paradox. If we let machines think for us without strengthening our own thinking, we risk weakening the qualities that make us adaptable and innovative. In my classrooms, I see bright young students already worried about burnout before their careers begin. They are not lacking ambition. They are asking whether they can keep up without losing themselves.

If productivity depends on human capacity, resilience must be part of our economic strategy. We must invest in school-based mental health support, workplace mental wellness frameworks, community sports and physical activity, curriculum that builds emotional regulation and bounce-back ability, soft skills that help navigate setbacks. These measures matter for students, mid-career workers adapting to change and seniors staying engaged. A burnt-out population cannot be a productive one. Resilience is not a side issue; it is the foundation of sustainable growth.

Managing pressure is not only about coping, it is also about shaping social norms. If success is defined narrowly by grades, pay or title, we risk creating pressure and weakening cohesion. We need a broader, healthier definition. Success is living up to your potential. Success is purposeful contribution. Success is knowing your work – whether in business, arts, sports or service – matters to your community.

Our identity as Singaporeans must embrace the diversity of talent through culture and arts, sports and teamwork, academic and technical excellence, entrepreneurship and service. When young people see that there are many legitimate ways to contribute, they feel seen; and when they feel seen, they step forward.

This is why continued investment in youth engagement, culture, arts, sports and community initiatives matter. These are not peripheral. They build belonging, shape identity and strengthen a "we first" mindset. Inclusive progress must be designed. Ability exists across society. Opportunity must too. When people feel included, they contribute with confidence. And when they feel part of something larger, they act differently.

I have seen this spirit of agency in Tampines. Vareck Ng, a young resident, co-founded a volunteer initiative to improve safety for active mobility users, both walkers and cyclists. After residents raised concerns about near-misses, I brought these to him and a group of advocates. Together, we identified problem spots and worked with the Land Transport Authority's (LTA's) Active Mobility Team to improve safety. He did not wait for someone else. He stepped forward, organised others and worked constructively with the authorities. That is youth agency in action. That is Team Singapore. Mr Deputy Speaker, in Mandarin, please.

(In Mandarin): An ideal budget does not just help us to get through this year but lays the foundation of Singapore's long-term development. Singapore has no natural resources; our greatest resource is our people. When young people have stable jobs and affordable housing, they can plan their lives with peace of mind and start families and careers. When middle-aged workers receive support during transitions, they can continue to contribute their experience and skills. When seniors feel respected and needed, they can remain active and continue participating in society.

If a society makes its people feel that they are not being left behind, they will be more confident and willing to dedicate themselves to the country. This is what we call "Team Singapore." Investing in people is investing in Singapore's future.

(In English): Mr Deputy Speaker, AI can multiply our advantage but only if it strengthens people, not sidelines them. If we invest only in machines, we may grow output. But if we invest in people, we grow a nation.

When people feel supported in their aspirations, equipped to manage pressure and confident that success is defined fairly, they do not disengage. They step forward. They start families. They build businesses. They lead community projects. They improve neighbourhoods. They carry forward the values that built Singapore.

Sustainability is not only about fiscal discipline. It is about ensuring the next generation is resilient, capable, inclusive and united. The most important investment in this Budget is not in technology alone. It is in our people across every generation, especially those who will carry Singapore forward. Because when our people realise their potential, Singapore realises hers.

Mr Deputy Speaker: Minister of State Jasmin Lau.

4.39 pm

The Minister of State for Digital Development and Information, and Education (Ms Jasmin Lau): Mr Deputy Speaker, first I want to wish everybody "新年快乐" and Happy Ramadan to everybody who is celebrating.

Many of us find it hard to picture what the world will look like in the years to come. There is the geopolitics, a world that feels less stable, less predictable and less governed by rules that we can rely on. And then there is AI, which, in some ways, feels even more unsettling because it is not happening out there in some distant theatre, it is happening all around us. In the classrooms that our children will enter, in the industries that Singapore has spent decades building.

My husband and I wanted to protect our two children from online content. They are still very young, so we decided to try and stop giving them screentime sometime last year. I told them that Prime Minister Lawrence Wong said "Screentime is bad." They looked a little bit confused, and it was tough for us for two weeks, but since then they hardly ask for screens anymore.

But I know that this artificial safety will not last. They will grow older. They will become curious. They will have friends or classmates who will tell them about the fun and exciting AI content online. They may learn about the companion AI tools. They will need to differentiate between content generated by humans versus AI and they may ask: "what is the point of striving to learn and becoming good at something if AI can do it so much faster?"

All of this can feel very frightening whether we have kids or not.

My speech today has no new announcements. My fellow colleagues may share some of them during the Committee of Supply debates, but there is no new list of programmes that you will hear from me. Instead, I wanted to try to address three hard questions. What is really changing, what will not change and what must we do together?

So, first, what is really changing?

Let me not sugarcoat this. AI is here, AI is not arriving, AI is not five years away, but it is already reshaping industries, changing how some tasks are being done and it is moving faster than most forecasts predicted even three years ago.

What AI does best today and will get better at doing tomorrow is work that is repetitive, rule-based or data heavy. Processing, summarising, triaging. These are not special tasks. Machines can now do these tasks faster at lower cost and often with greater consistency than humans and this performance gap will continue to widen and not narrow.

So, when young Singaporeans tell me that they worry that what they are learning today in school will be obsolete by the time they graduate, I do not brush that aside. They are reading the situation clearly. Many are already encountering this as they start to apply for jobs. And when workers in their forties and fifties tell me they have spent twenty years building expertise in a domain but now worry that AI is helping junior colleagues close that gap much faster. I do not tell them that their concern is misplaced because all of their anxieties are rational. But what matters more is what we do with it.

I asked AI to give me an analogy of itself. It suggested the following with very nice elaborations for each suggestion. Bicycle, electricity, calculator, turbo engine, all of these sound very useful. Then I asked it, give me the scary analogies. AI suggested fire, pandoras box, trojan horse, puppet master, among others.

The range of answers in itself is telling, because that is exactly the question we have not yet settled as a society. What is AI to us? What is our relationship with AI and who gets to decide?

We know that AI can give us significant economic edge and amplifies the abilities of our people, but we have to carefully define our relationship with AI as individuals and as a society and we can only do so if we first get to know AI.

We need to first understand what it is, what it is capable of. We must understand the motivations of the people behind it. We must understand the risks and the invisible dangers that it can come with, and understand how vulnerable you can be to it, even if you think you are the most educated person in the room. Singapore's job and this includes my job, is to make sure that we as humans remain in control of how AI is used and not let it dictate our values.

Now, what will not change? A world where everything is changing feels unsettling. But there are some things that will not change. What will not change, is the value of genuine relationships. Relationships that build trust and deep human connection. In my dialogues with young Singaporeans, many can see clearly how AI makes their lives more convenient. But when I ask them, "What you do with the time freed up?", they pause. Some will murmur, "Sleep", some say, "League of Legends", and a few say they will spend more time with their families. But the pause is telling.

Convenience is not the same as connection. The things that make a life feel worth living – being known and loved by a real human, building something and celebrating achievements with other people, showing up for people when it is hard – AI cannot replicate these. And the more automated our world becomes, the more these human connections and capacities will define what differentiates us from the machines.

What will also not change is the need for human accountability. And accountability means developing AI governance frameworks that are robust and ethical. It means being more transparent with citizens about how AI is being used in Government services and allowing them to still connect with human Public Service officers, if they need to. Accountability also means recognising the risks and dangers of AI, developing regulatory frameworks on what AI content should be disallowed for certain audiences and making sure there is a clear chain of accountability.

AI can process, but it cannot be held responsible on its own. AI can generate lots of options, but it cannot own the consequences. We will still need humans: for ethics; for creativity and imagination; and for the ability to look someone else in the eye and say, "I take responsibility for this."

So, what do we do? We are not starting from scratch. Our education system has consistently produced people who can learn and relearn, not just people who know things. We have a population that takes education seriously, that invests in their children. Our people are discerning and curious about the latest technologies available.

More than half a million Singaporeans used their SkillsFuture credits last year. Mid-career workers are reskilling, not just because they are told to, but because the system makes it practical and financially accessible. We will build on this and guide Singaporeans towards the capabilities and qualities that AI cannot replicate.

And tripartism. In Singapore, we have a labour union that is aware of the impact of AI on workers and already putting together plans to make sure that we are ready for the workforce disruptions.

So, we are starting from a good position. But we need more people to learn about AI and learn how to use AI, and not just observe to see which way things settle. Moving, building and doing, does not mean rushing or speeding. It means getting started and moving at a pace most suitable for ourselves. And whether you are an employer, a worker, a student, a teacher or a parent, the mission is to turn your anxiety into action. And over time, into confidence and mastery.

For our businesses, especially our SMEs, who form the backbone of our economy, you do not need to have all the answers before you begin. We heard in our Economic Strategy Review committee consultations that many SMEs feel they cannot afford to be guinea pigs. They tell me: "Jasmin, you want us to be early adopters, but we do not want to be the first movers." They have personal experiences of trying out new technologies and then realising that the technologies became outdated too fast. And they are right to be cautious.

We will create lower risk, structured ways for our SMEs to experiment. The hackathons and collaborations between students, SMEs and business leaders over the past year were not just photo opportunities. In those sessions, our SMEs got access to low-cost AI prototyping. The students gained domain experience and learnt about real problems that businesses deal with on a daily basis. Business leaders spotted talent they then went on to hire. We will systematise this, to ensure that more SMEs and students benefit.

We are also refining our funding schemes. When IT adoption was the main challenge, the barrier was set-up cost, so we subsidised set-up costs. Today, an early-stage AI prototype can be built in just a few hours. So, the barrier now is capability and workflow redesign. Our funding support will shift accordingly towards implementation, business process redesign, reskilling and the much harder work of changing how an organisation actually operates.

We will make sure we are accountable. But we must also make sure that our SMEs, most of whom are genuine and often already tight on resources, we must make sure they do not get turned away too early by onerous and cumbersome paperwork.

These are all ideas that our Economic Strategy Review Committee 2 on Technology and Innovation will continue to work on in the months ahead. I would like to take this chance to thank my co-chair, Senior Parliamentary Secretary Goh Hanyan, and all our committee Members for their time and thoughtful contributions. And we are encouraged that the Prime Minister had mention many of our recommendations in his Budget Speech.

For our young people, economic resilience begins long before workforce entry. It begins in how children and students learn to think. As a parent, I am often tempted to help my children find the answers instantly, when they begin to struggle. Sometimes, we see this as our way of protecting and teaching our children. But when answers become instant, the more deliberate we must be in protecting the struggle. Because it is in the struggle of making mistakes, trying again, finally breaking through – that real learning happens and confidence grows.

We want more young Singaporeans to learn about AI. Not just learn how to use it, but learn about it. Not just to do their homework in routine and repetitive ways, but to create new value for themselves and others. And to actively decide when not to use AI.

A student asked me recently, whether I use AI. I said yes, often, especially for research, summarising articles or preparing speeches. But recently, I tried to build my first web app. It is called "Family Fun Time", and it is designed to give me one activity a night to do with my kids. The activity must be dinosaur-themed; take less than 15 minutes; and should not require any equipment. Over time, based on my rating for every activity, it will give me customised suggestions. Yesterday's activity was about dinosaurs' feelings and letting the kids suggest what to do when their favourite dinosaurs are scared, hungry, lonely, happy or angry.

Unfortunately, I only get to try it with them tonight, because I had to work on this speech last night. The real fun and the real learning does not come from the app or from AI. It comes from the minutes we share as a family, the conversations and laughter, and correcting each other's silly responses to our dinosaur's feelings. I did not know it was now so easy to build an app, until I had tried it myself. Only in doing, trying and experimenting, will we find out the value of AI and shape our own relationship with it. And only in doing, trying and experimenting, will we find out the real value of ourselves as humans and understand what AI cannot and should not replace.

In the years ahead, as AI continues to evolve, we will need to review what education means for our children. AI will force us to sharpen the focus of education on what truly matters – judgement, values and the ability to work with AI rather than compete with it.

How do we teach our children about AI, in particular its limits, biases and blind spots?

How do we balance the weightage of our education to emphasise character and social development?

Beyond content recall, what higher order thinking do we want to equip our children with?

How do we help them understand the value of problem definition and design?

How do we help them sharpen their judgement skills, especially in uncertain situations?

These are all areas that we will be working on, so that our children grow up confident that they remain the master of AI – and not the other way around.

In closing, let me be direct about what I believe. AI is here and its possibilities are endless. This matters, because it means AI can improve the lives of our people. But this journey, no doubt, will cause much disruption. Because we feel the fears, because we feel the anxieties, we must find a way forward that keeps our people together.

Most importantly, we must always be in control of AI. Not the other way around. We must intentionally decide what AI should be used for, even if it nudges us to think otherwise. This is how we can build not just a smarter economy, but a wiser and a more confident society, ready for the journey ahead. [Applause.]

Mr Deputy Speaker: Ms Valerie Lee.

4.57 pm

Ms Valerie Lee (Pasir Ris-Changi): Mr Deputy Speaker, Sir, before I begin, I would like to declare that I am employed by a Singapore-listed energy company. Mr Deputy Speaker, Sir, I rise in support of this Budget.

Much has been said about huge surpluses and some have asked whether we may have set aside more than was necessary and that we aimed poorly and overshot. These perspectives are understandable, particularly when many needs remain pressing. However, I would suggest that the surplus can also be seen in another light.

To me, it reflects prudence and discipline. When the world is becoming more contested, when supply chains fracture and the guardrails that once managed international disputes and tensions are eroding, it is better to discover we have more than expected than to discover that we have too little. In uncertain times, a surplus is not a mistake; it is a buffer.

Hence, for those who disagree – we were perhaps not looking at the same target; as our bullseye will never be pure numerical accuracy, but rather, overall fiscal and social resilience. But I think what we all agree on is that a surplus should not sit idle. It must be deployed deliberately to improve the lives of our people today and to fortify Singapore against the uncertainties of tomorrow.

With that, Sir, allow me to frame my speech around three "S": first, supporting the "Sandwich Generation"; second, securing a sustainable future; and standing with every Singaporean.

Sir, the middle-income Singaporean, especially those caring for both children and ageing parents, working and paying the bills at the same time, they carry a unique burden that is worsened by smaller family sizes, fewer siblings share the load, and longer life expectancies.

As far back as 2019, NTUC Income research reported that 94% of parents surveyed revealed that they were currently pressured between having to financially support their growing children and their ageing parents. The majority of these parents also believed that their children and grandchildren would continue to be caught in this "sandwich generation" trap. These working caregivers are already stretched and require more support.

The Government has provided broad-based support and I welcome measures, such as the additional $500 in Child LifeSG Credits in this year's Budget. However, many of our structural family schemes are still designed to provide additional benefits only from the third child onwards. For example, the Large Families Scheme focuses its enhanced support on the third child and beyond.

5.00 pm

While these schemes are valuable, we should also be mindful that the pressures of raising a family do not increase in neat steps, as the first two children already place significant demands on household resources. As such, we should consider stepping up our support even for smaller families especially for middle-income families who do not qualify for the highest tiers of assistance, but who feel the squeeze most acutely.

Support must also extend to eldercare.

As the Prime Minister has rightly acknowledged, we must help our seniors age with dignity, security and peace of mind. We should remember that caregiving is not only about subsidies and CPF top-ups, important as they may be. It is also about setting aside time and nurturing a supportive ecosystem of care.

A perfect example of this would be the work done by the Agency for Integrated Care (AIC). In just under a year of serving my Pasir Ris-Changi residents, I have had many great experiences with partnering them in solving some of my elderly residents' challenges with healthcare and daily living, which always brings much relief to their family members.

Many families have had complex cases resolved, from navigating care placement to assessing subsidies. We should continue strengthening AIC and find ways to make their good work even better. In this regard, eldercare leave also deserves further study. Just as we recognise childcare responsibilities, we must acknowledge that accompanying an elderly parent to a specialist appointment or arranging post-hospital care, is not discretionary – for many, it is duty.

On the childcare front, I will speak more extensively during the Committee of Supply debates. But I wish to express concern, especially with regard to the cost of outpatient paediatric care. Even for relatively routine visits, expenses do add up quickly for families with young children. There may be room to review fee benchmarks or expand support frameworks.

Last but not least, support can also come in ways that seem unrelated at first glance – such as transport.

When we enhance bus frequencies, add more bus services, extend mass rapid transit (MRT) lines and build sheltered walkways, we are not just improving infrastructure. We are returning time.

Ten minutes saved on a commute is 10 minutes with a child before bedtime or 10 minutes more to check in on an elderly parent. For the sandwiched generation, time is the scarcest resource, and they will need all the support they can get.

Sir, on climate policy, I agree with the Government's position. Retreating from action is not an option. It is tempting – especially amid global backsliding – to slow down. But climate risks will not slow down for us. Rising sea levels will not pause while we debate in this Chamber.

The investments we make today may not be fully appreciated now, but decades from today, our children will understand why we made them.

On carbon pricing, Singapore already has the highest carbon tax in Asia. So, I welcome the Prime Minister's pragmatic stance that the rate will likely settle at the lower end of the $50 to $80 per tonne band by 2030. This reflects realism – balancing competitiveness with climate responsibility.

But beyond pricing, perhaps more can be done. Instead of viewing it merely as tax, we can perhaps more explicitly ringfence or mandate that a meaningful portion be reinvested by companies into low-carbon technologies, energy efficiency and innovation, and not have all these funds be centrally managed.

This ensures the price mechanism translates directly into transformation. This will also help boost survival rates of energy intensive sectors which are also critical to our economy and yet reduce the carbon emission intensity of their operations.

On solar energy, we achieved our two gigawatts peak target ahead of time – an impressive feat. The revised targets to three gigawatts peak by 2030 are welcome. But it is also time we pivot to examine the broader ecosystem. These include examining whether our grid connection timelines are fast enough, whether we have skilled manpower in solar engineering and maintenance and how we progress our transition into a green workforce.

Regional power imports are also critical and more government-to-government arrangements and government-to-business arrangements may be necessary. The Government must ensure that imports are sustainable, reliable and defendable. And for this reason, the Government must not leave long-term energy security to the whims of market forces.

I also welcome diversification of our energy mix in geothermal, hydrogen systems and even advanced nuclear technology.

But public acceptance for these will be key. Public education must begin early and be transparent. Conviction must accompany ambition.

Diversifying our energy mix – through natural gas, solar, regional power imports, low-carbon solutions and potentially nuclear energy – is paramount to the survival and resilience of Singapore.

Yet this transformation cannot be driven by market forces alone. It requires a deeper and more deliberate partnership between Government and industry.

We must establish enabling regulations, dedicated funding mechanisms and a robust ecosystem of technology providers, project developers and reliable baseload off takers. These foundational elements are essential to give investors and operators the confidence to commit to long-term energy infrastructure.

Given the significant development risks and long gestation periods associated with such infrastructure projects, the Government could also work closely with industry from the outset to address potential barriers and mitigate critical risks before they become insurmountable obstacles.

When the stability of our economy and the daily lives of our citizens depend on the future of our energy system, we cannot rely solely on commercial market dynamics.

To secure a sustainable future is no simple feat. We will need to work on aligning policy, workforce, infrastructure, businesses and public trust. A coordinated national effort is not optional – it is imperative.

Finally, Sir, we must stand with every Singaporean – including those whose numbers are small, whose voices are quieter, but whose needs are real. There are residents in areas with limited bus services, such as parts of Flora estate and Upper Changi – the last residential estate in the north-eastern part of the country. Connectivity shapes opportunity and so, we should continue refining route design to better serve such pockets.

There are families with special needs children who face a cliff at age 18, when school-based structures fall away. Transitions must be smoother.

As our population greys, there are seniors asking for safer pedestrian paths and more pedestrian-only zones. We should consider designing walkability and safety not for the average 30-year-old, but for the 75-year-old with slower reflexes.

There are private property owners subject to a 15-month wait-out period before purchasing resale HDB flats even when they may have legitimate reasons for needing to right-size quickly.

There are the SMEs that employ 70% of our workforce yet struggle even as we push ahead with AI adoption and digital transformation. Individually small, collectively, they form the backbone of our economy.

Mr Deputy Speaker, Sir, allow me some lines in Mandarin.

(In Mandarin): Similarly, the residents and businesses on Pulau Ubin pay electricity bills that are far higher than ordinary household users on the mainland. They may be few in number, but they are Singaporeans just like us and their problems equally deserve our attention and concern.

(In English): Each group may not represent a majority. But together, they represent Singapore.

Mr Deputy Speaker, Sir, a surplus gives us strength, but strength must be channelled with purpose. It is my hope that in this Budget and beyond, we will commit to supporting the sandwich generation – those holding up both the past and the future; securing a sustainable future – for ourselves and our children; standing with every Singaporean – especially those whose voices are softer.

And that is what this Budget must ultimately build. Thank you, Sir, and I support the Budget.

Mr Deputy Speaker: Ms Denise Phua.

5.08 pm

Ms Denise Phua Lay Peng (Jalan Besar): Mr Deputy Speaker, Sir, I support Budget 2026.

What stood out most to me in Budget 2026 is this – artificial intelligence (AI) is no longer peripheral to Singapore's plans. It is central to our economic strategy and our future competitiveness. AI is here and now. It is reshaping industries, redefining work and influencing the resilience of nations. Singapore must move decisively, but we must also move wisely.

[Mr Speaker in the Chair]

Today, I wish to speak on AI adoption without regret, about bringing everyone along, about AI's profound implications – especially for our SMEs, our workers, particularly those who are vulnerable and, ultimately, our social compact.

Because AI is not just a technology story. It is a societal one. If we are not careful, AI transformation could become a story of the few who benefit – while the many may absorb the disruption.

Our task, therefore, is clear. How do we pursue AI adoption without regret and bring everyone along?

AI is reshaping the real economy – not just the digital one. By the real economy, I mean the industries that make, move and deliver goods and services, where most Singaporeans work. This is not just another wave of automation. Singapore has automated before – in factories, ports and back offices. But this time is different. Machines are no longer just executing instructions. They are sensing, they are learning, they are adapting and making decisions.

AI is becoming embodied.

We are already seeing AI-driven "lights-out" or what they call dark factories operating 24/7 with minimal human presence. These systems optimise production in real time, detect faults, predict breakdowns and adjust workflows autonomously. In some sectors, robots are even assembling other robots.

Beyond manufacturing, AI-powered machines are entering everyday services – cooking and serving food, packing goods, moving inventory, assisting nurses, guiding seniors, even conducting therapeutic and counselling functions. This is automation with cognition.

Across Japan, South Korea, China, Denmark, Germany and many others, such systems are being deployed at scale in logistics, healthcare, food services and manufacturing – precisely the sectors where many of our Singapore SMEs operate and where many of our older and lower-wage workers – Singaporeans – earn their living.

That is why this shift is more consequential than past mechanisation. Singapore is a high-cost, labour-scarce economy. Automation was already necessary. But AI-driven automation accelerates change because it does not just replace muscle – it begins to learn and replicate judgment.

So, the question is not whether AI reshapes Singapore. The question is whether we will shape this transformation deliberately – upgrading our firms, our companies, our businesses and uplifting our workers – or risk allowing intelligent systems to outpace our preparedness.

Let me turn to our SMEs.

Sir, if we are serious about bringing everyone along, then SMEs cannot be an afterthought. They make up 99% of our enterprises and employ 70% of our workforce. They are the economy.

Budget 2026 places AI at the centre of our strategy. But on the ground, many business owners are still unsure what this means for survival – not just growth. The numbers are sobering. In 2024, only 14.5% of SMEs adopted AI – up from 4.2% the year before. Now, that is progress, but still fewer than one in six. Meanwhile, adoption amongst the larger firms surged from 44% to 62.5%.

Some firms are sprinting. Many are walking. Too many have not even started.

And the SMEs are already under strain we know. They quoted – we had many talks – our GPC for Finance and GPC for Trade and Industry – with our resource panel, the Singapore Business Federation, PAP Public Policy Forum and many business associations. We know that the SMEs are already under strain: rising costs, manpower shortages, thin margins, rapid technological shifts and intensifying regional competition. AI is not arriving gently for them. It is arriving on top of these pressures. These sentiments are common from the conversations we heard.

But let us be clear. For many SMEs, and I am not talking about those who are in that quadrant, where they are unwilling and unable, but for many of the rest, the issue is not willingness. Surveys consistently show SMEs want to adopt AI. But they adopt AI when three things are clear: "What works for my sector and me? Who can help me implement? And how do I pay for it?"

AI, as we know, is not plug-and-play. It does require clean data, disciplined processes, systems integration and leadership commitment. It requires job redesign, worker re-training. Without these foundations, adoption becomes cosmetic – chatbots at the front desk, dashboards in the office – but no real productivity gain.

If that happens, we will digitise inefficiency. And if we do not intervene properly, the risk is not just slower adoption. The risk is structural divergence. Large firms with capital and technical depth will accelerate. Smaller firms will struggle. Productivity gaps will widen and wage growth will stagnate for many.

Some SMEs will exit but let us be honest: not every SME exit is a failure of policy. In a high-cost, AI-driven economy, some business models will no longer be viable. But firms should not fail because support was too generic, too fragmented or too distant from operational reality.

Government must enable. SMEs must step up. Transformation requires effort on both sides. AI adoption demands leadership focus, workflow discipline and real investment. It is difficult, but standing still is harder. That is why broad encouragement and broad grants waiting to be taken up are no longer enough. We need precision support, not broad measures.

Let me propose three moves for a start.

Move one, a national SME AI readiness scan. Many SMEs do not know where they stand, so let us introduce a credible, simple national diagnostic tool that classifies firms into foundational, emerging or advanced stages of AI-readiness.

Support must be tailored to readiness. Foundational firms need help in cleaning up data, fixing workflows. Advanced firms need integration and scaling support. So let us stop this one-size-fit-all grants. Start targeted transformation pathways.

Move two, Government-funded AI coaches for the SMEs. SMEs do not need some more webinars or seminars. They need embedded, time-bound advisors who can help to clean and structure data, redesign workflows, implement AI properly, measure productivity gains. Hands-on implementation support, not just funding, will separate the serious adopters from superficial users.

Move three, strengthen the intermediaries. Many SMEs rely on trusted intermediaries: the SBF, NTUC, SME Centres, Enterprise Singapore, trade associations and chambers, academia with practical experiences. If we expect these intermediaries to guide thousands of firms through AI transformation, then we must also equip them with deeper technical capabilities, diagnostic tools and specialist talent and funding. Empower the multipliers and impact scales across the ecosystem.

The goal is not to push every SME into complex AI systems overnight. The goal is disciplined, intentional transformation. If we get this right, AI becomes a renewal engine for SMEs. If we get it wrong, then we create a two-speed economy, not because help was absent but because execution lacked precision. Execution determines survival and survival determines jobs.

Next, on jobs. If SMEs must transform to survive, then workers must also transform to survive, to remain relevant. And we know that not all workers begin from the same starting point. Sir, at the heart of this AI transition is one deeply human question: what happens to our people’s jobs? Because technology may move at digital speed. But families move at human speed. And the disruption we face is not one-dimensional. It is two-front.

On the first front: operational and blue-collar roles, warehousing, logistics, F&B kitchens, security, cleaning, basic inspection work. AI-driven optimisation and robotics are already reducing repetitive tasks. Scheduling is automated, we know. Inventory is predicted. Machines inspect defect sometimes faster, in fact a lot of times faster than humans.

The risk is not only displacement, it is also intensification – tighter monitoring, algorithmic targets, more precarious contracts. That is on the first front, the blue-collar jobs.

On the second front: white-collar and cognitive work. GenAI already now drafts reports, writes speeches, prepares marketing copies and plans, business plans, summarises legal documents, produces financial models and writes code. Entry-level roles – internships, junior analysts, first-rung executive jobs – are increasingly augmented or partially absorbed.

The doomsday scenario is not robots overnight. It is a broken ladder. If entry-level roles shrink, then fewer young people will get their first break. If mid-career workers are benchmarked against software, then wage growth stagnates. And if the gains concentrate among those who own and control AI, while others bear the disruption, then productivity gains will not feel like shared progress.

Next, on the vulnerable. Sir, not everyone pivots at the same speed. For seniors, lower-wage workers, persons with disabilities, the risks are sharper.

Lower-wage workers often perform routine-intensive tasks, the easiest to automate. Older workers, many of them struggle with rapid digital transitions, especially if training is overly theoretical or classroom-based. Persons with disabilities face a dual risk: one, displacement in routine roles, and exclusion if new systems are not accessible by design. Without deliberate intervention, these groups will fall behind first and inequality will widen.

At the same time, of course, we must not jump – I think the Prime Minister always advices me at the lunch table – we must not jump to doomsday conclusions. AI can create more jobs and expand work. Nvidia’s CEO founder Jensen Huang has pointed out that in areas like radiology, AI did not replace doctors, it helped them read scans faster, which meant more patients could be treated and demand actually grew.

We see similar effects in other sectors. As AI systems expand, we need engineers, technicians and operators to build and run data centres. As companies automate, they also need people to maintain robotics systems and supervise AI tools.

The lesson is clear: AI can remove routine tasks and expand human capacity, but only if we design AI adoption intentionally. And that requires policy discipline. The discipline to protect workers before displacement happens.

Budget 2026 already strengthens wage support, raising the Local Qualifying Salary, enhancing the Progressive Wage Credit Scheme and continuing the Progressive Wage approach. We must now apply similar discipline to AI transition. Some of the solutions lie upstream in education reform and serious mid-career upgrading. I will return to that during COS. But even as we strengthen the pipeline, we must also confront the immediate labour-market transitions already underway.

Let me suggest five moves to do this.

Move number one, a national early warning and mobility system. Let us shift from reactive retraining to proactive planning. Using job-task analytics and sector data, we should try to identify roles with high automation risk, identify them early, and try to intervene before displacement occurs. This means advance job redesign before automation, training that begins before tasks disappear, clear pathways into adjacent or emerging roles. Transitions are painful when sudden, but they are more manageable when anticipated. So, a national early warning and mobility system.

Move number two, make workforce plans mandatory for major AI support.

Sir, if a firm receives significant AI incentives or intermediary agency support, there should be a workforce transition roadmap. What tasks will be automated? What human roles remain accountable? Which workers will be redeployed or upgraded? And how will wages be supported during transition? Productivity gains must not come at the expense of worker displacement without a plan. Enterprise transformation and worker transition must be linked.

Move three, redesign entry-level pathways. Where AI threatens junior roles, we must redesign and not remove entry points. Support structured apprenticeships, meaningful internships and supervised AI-assisted roles. Programmes such as Enterprise Singapore’s Global Ready Talent scheme show how structured internships can build capability. But internships and these other schemes must evolve. Young workers should learn to supervise AI systems, validate AI outputs, interpret analytics, exercise judgment beyond machine outputs. AI should become a co-pilot, not a substitute. Protecting the first rung of a job ladder protects mobility.

Move four, on building concrete job pathways for seniors and persons with disabilities. Sir, we must move beyond general statements about inclusion or plans or declarations. For seniors, physical AI can reduce strain and extend employability. Robotic lifting aids in logistics, autonomous carts in healthcare, AI-assisted scheduling to reduce cognitive load. Pair this with modular, bite-sized digital training delivered at workplaces, not just classrooms, and wage support during transition for seniors.

For persons with disabilities, we should expand supported employment into AI-adjacent roles: AI system monitoring and quality assurance, data labelling and validation with assistive tools, accessibility testing of AI systems, digital customer service roles using adaptive interfaces. And to make this real, NTUC, for example, should intensify outreach to unionised sectors undergoing automation. SG Enable and the National Council of Social Service (NCSS) should develop AI-readiness toolkits specifically for disability-inclusive employers and job clusters. Disability organisations and charities should be funded to train job coaches in AI-augmented workflows. Enterprise grants should include accessibility compliance requirements. Inclusion cannot rely on goodwill alone. It must be systemically built-in.

And finally, move five: on strengthening intermediaries and social service agencies (SSAs). Sir, if AI is to be whole-of-society, then SSAs cannot be left behind. Many SSAs supporting low-income families, seniors, elderly residents and persons with disabilities face rising demand and manpower strain yet they also often lack AI capability: the technical capacity, the budget and the data governance expertise needed for that.

Budget 2026 should create an “AI for good fund” to build an “SSA AI Backbone” comprising centralised AI tools for SSAs, shared data governance frameworks, volunteer AI professionals embedded in agencies, a vetted AI solutions marketplace.

Mr Speaker: Ms Phua, you have a minute left.

Ms Denise Phua Lay Peng: When SSAs become AI-enabled, the most vulnerable of us benefit.

In conclusion Sir, Budget 2026 sets an ambitious direction: AI ecosystems, SkillsFuture strengthening, innovation hubs such as Lorong AI and the future AI Park at one-north. Ambition is necessary, but it is execution that determines whether progress is shared.

AI adoption must be deep not cosmetic, worker-centred, inclusive by design, accessible to SMEs and supportive of the vulnerable. If we get this right, Singapore will not merely adopt AI. We will prove that a nation can move fast in this space and still move together. That, is AI adoption without regret, bringing everyone along. Sir, I support the Budget.

Mr Speaker: And you just made it with 10 seconds; do not cut it so fine next time. Ms Jessica Tan.

5.29 pm

Ms Jessica Tan Soon Neo (East Coast): Mr Speaker, Budget 2026 comes at a time when Singaporeans are navigating a world that is more competitive, more digital and more uncertain. In moments like this, what matters most is whether our people feel they can keep moving forward to find good jobs, support their families and plan confidently for the future.

Budget 2026 refreshes our economic strategy with ambition and discipline. We cannot compete on size, but we can lead in trust, excellence and speed. The Budget rightly zeroes in on our global growth clusters where Singapore can lead in semiconductors and advanced manufacturing; biomedical sciences; green energy and the hydrogen economy; digital trust, cybersecurity and AI; and future finance and logistics.

These are not new bets. They build on years of capability development. Singapore today produces 10% of chips globally and 20% of semiconductor equipment. We are a regional leader in enabling green transition, with Southeast Asia’s first carbon tax and a national hydrogen strategy. In AI governance and digital trust, frameworks, like the AI Verify and our Digital Economy Agreements, place us as a global reference point.

The Budget strengthens this foundation by encouraging high value segments of global value chains, sustaining long term R&D through RIE2030 and supporting growth capital. These moves ensure that Singapore remains relevant in a volatile world.

But strategies must translate into outcomes, especially for SMEs. Many may still struggle to navigate schemes or put together a growth plan. A “human in the loop” advisory model for SMEs scaling overseas or entering deep tech could complement GoBusiness, helping firms access support quickly and confidently.

On AI, acceleration must go hand in hand with clear governance, integration support, change management help and strong cybersecurity. I will speak more on enterprise AI readiness during the Ministry of Digital Development and Information (MDDI) COS debate.

On workforce Readiness. Economic ambition only matters when it translates into better jobs and livelihood for Singaporeans.

The Budget’s National AI Missions, the National AI Council and the Champions of AI programme signal Singapore’s commitment to being a trusted global hub for AI.

But to ensure workers benefit from this transformation, we must align AI missions with workforce pathways, scale employer led training and apprenticeships, expand modular, employer recognised micro credentials that enable quicker redeployment, and strengthen HR capabilities so enterprises can manage workforce transformation. I will speak more about the critical role of HR in accelerating enterprise transformation during the MOM COS debate.

For our mid‑career and senior workers, the measures in the Budget will help workers through the disruption and changes. With rapid shifts in the job market, many of my residents have expressed anxiety about finding new employment after their short-term employment contracts end or following retrenchment. Matured PMEs worry about staying employable.

Tripartite partners and Enterprise Singapore have stressed the importance of faster, dignified support when workers are displaced. But we can still do more to shorten unemployment transitions further by providing earlier notifications to placement hubs; sector specific placement packs with skills mapping, bridging courses and job fairs; as well as streamlined access to training and employment support. I will dive deeper into the topic of career health and employability of matured PMEs in the MOM COS debate.

We must ensure that our refreshed economic strategy is matched by a workforce that is resilient, ready and able to seize the opportunities ahead, and this matters whether they are just starting out or making a mid-career transition.

Let me talk about families. Growth alone is not enough. For the sandwiched class, the question is: can my family cope? Will my children and parents be cared for? Budget 2026 takes meaningful steps in providing for higher preschool subsidies, expanded student care support and enhanced long-term care subsidies.

These will definitely ease cost pressures temporarily, but gaps remain for families who are asset rich but cash poor, especially with the rising caregiving costs. A more nuanced means testing approach for eldercare, one that recognises liquidity constraints, will prevent families from being priced out of essential care.

Why is this important? Because by 2030, one in four Singaporeans will be aged 65 or above. Care needs are rising and so is the emotional and financial load on mid career caregivers who must work, upskill and care for both young and the elderly in their families.

While real progress has been made in building up our care ecosystem – and I must stress this, there has been a lot of progress in our care ecosystem – but families still experience the system as fragmented. Information sits across multiple portals and agencies. And we should consider piloting integrated family support hubs that coordinate childcare, eldercare, respite services and employment assistance, providing a one stop touchpoint for families for case management, streamlining subsidy applications and help in navigating complex systems.

Caregiving is not only a financial load. It is a time load and a well-being load.

Employers have a role to play as well. Incentives for caregiving friendly workplace policies, such as caregiving leave, flexible hours and phased return-to-work schemes, would encourage more companies to adopt practices that keep caregivers employed and productive. Expanding daycare and short notice respite capacity will give caregivers the breathing space they need to work, train, rest or respond to emergencies.

Mr Speaker, a common thread runs through my speech – strategy only matters when implementation delivers impact. Budget 2026 charts the right course with focused investments, responsible AI adoption, a responsive skills system and deeper support for families. Our next task is to make these measures simple to access, aligned with employer needs and meaningful for Singaporeans on the ground.

I support Budget 2026 for the clarity of the strategies to take Singapore forward. I call for continued focus on simplifying access, strengthening partnerships and building community level support ecosystems.

Mr Speaker: Mr Lee Hong Chuan.

5.38 pm

Mr Lee Hong Chuang (Jurong East-Bukit Batok): Mr Speaker, I rise to support Budget 2026. Before I begin my speech in Mandarin, I would like to express my sincere appreciation to several groups and platforms that provided valuable opportunities for me, and our MOF and MTI GPCs Members, led by Chairman Mr Saktiandi Supaat and Vice Chairman Mr Edward Chia, together with Mr Shawn Loh, Ms Tin Pei Ling, Ms Denise Phua, Mr Victor Lye and Mr Ng Shi Xuan and myself to better understand ground sentiment ahead of the announcements of the FY2026 Budget by Prime Minister and Finance Minister, Mr Lawrence Wong, and during this ongoing Budget debate since this morning and for the next few days.

These are not in any particular order. One, our very own GPC resource panel comprise almost 20 to 30 businessmen running their own business. Two, SBF. Three, Singapore Malay Chamber Communities and Industry. Four, the Institution of Singapore Chartered Accountants Roundtable. Five, PAP Policy Forum Group. Six, SkillsFrontier Solutions under Human Capital Singapore. Seven, the Society of Modern Management of Singapore. Eight, tour guides and representatives from the tourism sector, among others.

This engagement brought together business leader, professionals, trade associations and frontline practitioners, enabling us to gain a more comprehensive understanding of the challenges faced by enterprise and businesses. We had candid discussions on cost pressures, manpower constraints, digital transformation, skills upgrading and strengthening Singapore's competitiveness in an increasingly uncertain global environment. Such open and constructive dialogues are critical in ensuring that our policy remain grounded, responsive and forward looking.

The insights and feedback shared have been invaluable in shaping our perspectives as we consider measures that support businesses, uplift workers and position Singapore for sustainable and inclusive growth. Mr Speaker, in Mandarin, please.

(In Mandarin): Mr Speaker, this year's Budget was not formulated in a stable environment. Recently, the global economy has been unstable, relations between countries remain complex, supply chain is restructuring and technological advancement is reshaping many industries. For an open economy like Singapore, these developments are realities we face everyday.

As the old saying goes, "prepare ahead for a rainy day." When the environment is uncertain, it is even more important to secure our foundations. In an uncertain world, Singapore's most important assets are not its size, but our capability and our credibility. The focus of this Budget is not only to provide immediate support but also to ensure that we preserve national stability, capabilities and long-term sustainability amidst changes. I would like to touch on five areas.

First, the dual pressures on businesses, survival and upgrading. I have regular engagements with businesses. Yesterday morning, I had a discussion with them. They did not talk about macroeconomic figures but very concrete realities. Some SME owners have told me that the pressure of doing business today does not come from a single direction but from multiple fronts at once and they feel overwhelmed.

On one hand, they must control operating costs and safeguard cash flow. On the other hand, they must invest in system upgrades and capability building or risk gradually losing competitiveness. One SME owner describes it as "repairing the road while running". Business cannot stop. Yet, the road must still be fixed. Everyday, they must make difficult decisions.

They often ask, interest rates are so elevated, should they invest now? Manpower is already tight. If employees go for training, who will do the work? With the market conditions still unclear, if they switch systems or adopt AI and the results are unsatisfactory, what then? What if the staff do not know how to use, and work becomes slower? Too many questions.

These concerns do not reflect an unwillingness to upgrade. Rather, there have been many businesses that cannot afford the cost of trial and error.

The Budget proposes corporate income tax rebate, enhancements to Enterprise Financing Schemes and higher support levels for overseas expansion. These measures can alleviate stress for businesses. But the important thing is that businesses must have the confidence to take the first step. If policies are clear and consistent, businesses will be willing to upgrade with peace of mind.

Secondly, AI, hype and prudence. Everybody is talking about AI nowadays. During the New Year, many people use AI to make New Year's greetings and short videos, and people find it very interesting. Society's acceptance of new technology has also clearly increased.

However, when businesses seriously consider adopting AI solutions, the situation becomes more complex. There are now many AI service providers in the market, but the price can be very high. Some businesses worry that there may be a case of using AI for the sake of using AI. The goal of our policy is to raise productivity and not to inflate business cost. As the saying goes, "haste makes waste". AI development is a long-term trend and will not see immediate effect. The key is whether technology can truly help companies' daily operation.

Businesses are most concerned about whether AI can reduce repetitive administrative processes, improve customer response efficiency, optimise inventory and data management and enhance training effectiveness. For SMEs, the true value of technology is not for display but in actual integration.

Therefore, in promoting AI adoption, I think there are three things that we have to focus on. First, let businesses understand clearly the cost and effect, increasing transparency; Second, tiered support to prevent SMEs from bearing excessive cost burdens. Third, ensure that subsidy structures encourage capability building rather than simply stimulating procurement. Third, subsidies are to encourage capacity building, not just to buy systems.

The third area. Enterprise upgrading is not the result of a single policy but of an entire system. Investment direction, enterprise capability building, skills transformation, financing support and the institutional environment are different gears within it. If one gear turns too quickly while others cannot move in sync, then friction arises.

For example, if industries upgrade rapidly but local enterprises are unprepared, opportunities cannot be translated into value. If technological adoption advances quickly but workforce skills do not keep pace, productivity may suffer. If policy support exists but the process is too complicated, deterring companies from applying, then the tools will fail to achieve their purpose.

Thus, the key lies not in the strength of individual policies, but in the depth of coordination and the pace of implementation. Only when the system operates smoothly can upgrading be steady and sustainable.

Fourthly, I want to talk about fiscal space and long-term responsibility. Although we have surplus now, but we cannot just look at one year.

A fiscal surplus provides a buffer for the nation, but fiscal planning has never been merely about annual balance. Population ageing, rising healthcare expenditure, climate adaptation investments and technological transformation require long-term spending. Supporting enterprise upgrading and safeguarding social stability also requires resources. Hence, fiscal discipline is very important. We have to provide for today, as well as tomorrow.

As a saying goes, "Store grain against famine". This is not conservatism, it is preserving choices for the future. Fiscal prudence is a commitment across generations.

Fifthly, helping our enterprises to go overseas. In today's international environment, overseas expansion presents both opportunity and risk. Different regulations, market volatility and geopolitical factors can influence our businesses. A stable diplomatic network provides businesses with predictability and trust. ASEAN remains an important region. Links with Europe and other major economies create diversified market opportunities for our enterprises. When our local enterprises create jobs and provide professional services abroad, they also strengthen Singapore's reputation. Diplomacy creates space; businesses create value. The two reinforce each other.

Mr Speaker, in uncertain times, the essence of governance lies not in speed but in direction. The direction must be correct. Businesses are under pressures. Workers must upgrade. Our fiscal policy must balance present needs and future responsibilities. Diplomacy must safeguard stability and space. "Steady steps carry us far." So long as we maintain a long-term perspective and continuously refine implementation, Singapore will remain stable and competitive in a complex environment.

(In English): Mr Speaker, artificial intelligence presents real opportunities, but adoption must remain disciplined, transparent and grounded in productivity gains rather than short-term momentum or inflated solution pricing. The focus should be on measurable business value, clear evaluation and tiered support so that SMEs can adopt effectively without excessive burden.

Recently, I have received feedback from several SME owners. They acknowledged that AI is the way forward and recognise the need to embrace it in order to remain competitive. However, one SME shared with me that when he approached an AI vendor to explore solutions for his business, he was quoted a six-figure sum, a significant investment that many smaller enterprises would understandably find daunting.

Interestingly, when he was later invited to serve as a judge for the AI for All Hackathon organised by Manus AI in collaboration with the Nanyang Technological University, he took the opportunity to present the same problem statements to participant students. To his surprise, the students were able to propose multiple variable solutions that address about 70% of his business needs. This experience demonstrated not only the capability of our students but also the untapped potential for cost-effective and collaborative approaches on AI adoption.

This raised an important question. Beyond providing grants for SMEs to engage IT vendors, can we also foster stronger partnership between SMEs and our universities and polytechnics? Perhaps, there is scope to support structural collaboration platforms where students can work on real-world business challenges as part of their coursework or innovation programmes. Such partnerships could lower adoption costs for SMEs, provide practical learning opportunities for students and accelerate AI diffusion across our economics in a more inclusive and sustainable manner.

Perhaps, this could be a meaningful starting point for both SMEs and students. SMEs would not need to shoulder the full burden of high AI implementation costs upfront while students would gain valuable exposure to real-world business challenges even before graduation. Such collaborations would allow students to apply their knowledge in practical settings, sharpen their problem-solving skills and better understand industry needs. At the same time, SMEs could benefit from fresh perspectives, innovative ideas and prototype solutions that can be further refined and skilled. This creates a win-win ecosystem, one that supports enterprise transformation while strengthening workforce readiness. After all, most students will one day become an employee or a worker, and we know every worker matters.

In this regard, could we also encourage NTUC to explore playing a facilitated role in building such bridge or linkages. NTUC's strong networks with companies and workers and their AI strategy could help bridge SMEs with Institutions of Higher Learning, ensuring that training, innovation and job readiness efforts are better aligned with industry transformation needs.

Mr Speaker, fiscal prudence remains essential to preserve long-term policy space, especially amid demographic shifts, healthcare pressures and climate adaptation needs. International connectivity also remains critical. Stable external networks create opportunity space for our enterprises to expand overseas and create value. With steady direction and disciplined implementation, Singapore will remain resilient and competitive in an uncertain world. Mr Speaker, I support Budget 2026.

Mr Speaker: Mr Shawn Loh.

5.54 pm

Mr Shawn Loh (Jalan Besar): Mr Speaker, notwithstanding the speaking time budget of 20 minutes, I endeavour to utilise less time and, therefore, run a speaking time budget surplus.

Mr Speaker, I support the Budget. Before I begin, I declare my interest as Group Managing Director of Commonwealth Capital Group. We are a Singapore Global Enterprise operating a conglomerate of businesses. Like all other companies, our business decisions are influenced by the Government's strategies and its policies.

My views today are shaped by the numerous interactions I have had during this Budget season. My colleague, Mr Lee Hong Chuang, spoke about this in quite a lot of detail.

The GPC for Finance, led by Mr Saktiandi Supaat, engaged widely, far more than in previous terms. We are grateful for the time taken by more than 1,000 PAP activists to participate in the PAP Policy Forum's surveys and focus group discussions. The business community, including the Singapore Business Federation and other trade associations, also shared their perspectives with us. We even had a resource panel of experts across industries that provided more insights. I particularly enjoyed the candid conversations on the Budget with our residents from Jalan Besar and Whampoa, during house visits and through policy dialogue.

Mr Speaker, I will share my views on three matters: one, the extra money the Government has; two, the critical problems that remain unsolved for Singapore; and three, how we can use this extra money to address these problems before they become even more difficult to resolve.

The elephant in the room, which many Members have spoken about, is our fiscal surplus. It is a large elephant! It is the all-time-largest in absolute terms, at $15 billion for the past financial year. Mr Pritam Singh also noted this. But because our economy keeps growing, it is more appropriate to look at the fiscal surplus as a percentage of GDP. Even by this measure, at 1.9%, it is substantial. But it is not the largest in recent years. Around 10 years ago in 2017, our surplus was at 2.3% of GDP.

The fact that we have a surplus is not surprising. But what is surprising is how large the surplus is and why it is so. Zooming out, the multi-year picture is that corporate income tax collections have been far higher after COVID-19. A pleasant surprise was the surge in business profitability, leading to a windfall budget surplus from corporate taxes. A rule of thumb that fiscal planners used to have is that corporate income tax would be around 3% of GDP. But it has now gone above 4%. That is a significant sum, around $10 billion more. I am sure that MOF is already updating this planning assumption for future years.

This is a reflection of an increase in the "Singapore premium", the premium of stability and security that Singapore offers in a more unpredictable and dangerous world, a premium from trust, to borrow Mr Victor Lye's words. It is a direct result of past Budgets, which invested in economic infrastructure as well as long-term security infrastructure, from national defence to cybersecurity.

In the past, then-Deputy Prime Minister Tharman used to say that economic policy is part of social policy. Well, in this changed world, it is increasingly clear that security policy is part of economic policy. Our defence spending is consistently around 3% of GDP, more than many North Atlantic Treaty Organization (NATO) countries and more than South Korea. We do not say this enough. But credit should be given to all Singaporeans who supported a Government that spent a consistently large sum on defence during peacetime. Mr Vikram Nair also pointed this out. A short-termist and insecure Government would have taken a more popular approach to redirect security spending to more direct social benefits.

That said, fiscal planning will enter a period of higher uncertainty next year as the impact of the domestic top-up tax and other BEPS-related measures kick in. Once the domestic top-up tax commences next year, we should probably see a short-term bump in revenues. But how long this lasts will be incredibly uncertain, as these measures will impair our competitiveness over time. To that end, I take a different view from Mr Gerald Giam on being less conservative with fiscal projections. As it gets harder to predict revenues, it is better to find ourselves in a budget surplus position than struggling to reduce budget deficits, which many other countries are facing.

With the large surplus this year and potentially over the next few years, we should then ask ourselves: how should we use this extra money to improve the lives of Singaporeans and address long-term problems before they become more intractable?

A good way to think of our problems that remain unsolved is to consider what Singapore would look like, if Government policies stayed the same and if current trends continued.

Mr Speaker, there are three that I see. In the next five years, there will be fewer Singaporeans feeling the direct benefit of economic growth. In the next ten years, there will be fewer Singaporeans feeling that they are part of one cohesive society, if wealth inequality continues to worsen. And in the next 20 years, there will simply be fewer Singaporeans, if we do not address our declining birth rates.

Today, many Singaporeans already feel that the headline economic numbers do not gel with their lived experiences. I see this in Jalan Besar and Whampoa, especially amongst our seniors who have retired many years ago. And increasingly, with our younger residents who are looking for jobs. As well as those who are retrenched, some of whom are under 40.

The economy grew by 5% last year. Inflation was below one percent. So, by all measures of the hard data, Singapore has done really well. But the question is: do you feel that your standard of living has improved by 5% compared to the year before? Do businesses feel that they have done 5% better? I reckon that many would say no. These economic figures seem theoretical, and the trickle-down effect that we had hoped for, has for some indeed, been just a trickle.

The likely reason is that the direct benefits of economic growth are captured by a decreasing proportion of Singaporeans who are earning higher wages in sectors that are globally competitive. For the growing number of retirees who do not earn salaries, economic growth may only mean higher prices. For workers who are used to working in the same company for a long time, economic growth may only mean a greater sense of job risk amidst technological disruptions.

To make matters more complicated for this generation, wealth inequality will also be an issue. A modest level of wealth inequality is not in itself a bad thing. It incentivises and rewards capability and effort. This is the meritocratic approach that has made Singapore successful and uplifted generations of Singaporeans. However, there are concerns that birth circumstances are increasingly determining life outcomes.

It is of course natural for parents to want the best for their children, and to spend time, money and effort to give their children advantages in an increasingly competitive world. But this parental help must not be determinative. All Singaporeans must continue to be able to aspire to success and to a better life, regardless of the situation they were born into. I see a need to systematically lean against the natural tendency in any economy for wealth inequality to become entrenched across generations – so that Singapore remains home for all, hope for all. We are not too late to address this.

And finally, beyond our current generation, our falling birth rates are the existential crisis that we will face. At current levels of fertility and without immigration, the number of Singaporeans will more than halve in each generation. By SG100, without immigration, our citizen population could even revert to the same size as when we first became independent.

So, how should we use this extra money to address these problems? First, we can strengthen our redistribution schemes. We can do better to uplift Singaporeans today and assure them that any unexpected fiscal surpluses will be shared with all.

Elderly poverty should be eradicated, especially for the generations that grew up in a less developed Singapore and without the lifelong support of retirement policies that are in place today. I continue to advocate for Silver Support payouts to be increased and for the highest tier of Silver Support to be given to seniors above the age of 80 or 85 who live in HDB flats. Our Government policies should embody the value of taking care of our most elderly such as the oldest five percent of Singaporeans.

We should assure Singaporeans that when Singapore does well, all Singaporeans will benefit. This can be achieved through a longer-term commitment from the Government on a surplus sharing mechanism. For example, any fiscal surpluses above two percent of GDP should be given back to all Singaporeans in the following year through extra CDC vouchers. Or if there are concerns that CDC vouchers may increase inflation, we could do so through universal CPF top-ups or other rebates for Government services such as transport and utilities. This is similar to the social dividend mentioned by Prof Terence Ho.

And to provide more assurance, some of our temporary support measures can be made more permanent, or at least longer-term. After all, as Milton Friedman famously said, “Nothing is more permanent than a temporary government programme”.

Second, companies should be the conduit to provide a greater sense of assurance to workers, amidst greater disruption. No amount of Government hand-outs is as good as giving a leg-up through jobs. Companies are the platforms and partners for the Government to achieve its policy goals. Support given to employers to do so should be greater and for longer.

The Progressive Wage Credit Scheme and other short-term support measures are but band-aids for companies, many of whom have been taking the hit year after year after year with escalating manpower costs, in part driven by Government policy. And in the words of another famous person, Taylor Swift: "band-aids don’t fix bullet holes".

We should now give Singaporean workers the confidence that the Government has their back and anyone who is earnestly looking for a job for a while will be strongly supported by the Government through a more ambitious jobseeker place-then-train programme. For example, the Government could give all employers time-limited salary support to hire any jobseeker who has been actively looking for a job for at least six months, regardless of age.

Third, we should decisively address our existential issue of low birth rates. Parenthood is a deeply personal decision and the joys of bringing up children can never be quantified in dollar terms. But that should not mean that the Government stops trying to remove economic barriers to having children. This remains part of the enabling environment that Ms Eileen Chong and Mr David Hoe mentioned. I believe that we can promise Singaporeans that the basic costs of child raising should never be a barrier to having children.

The LifeSG credits for families are a small move in the right direction, but with the fiscal resources at our disposal, we can do more. First, basic childcare, infant care and student care should be free. Period. This is conceptually no different to how we provide all Singaporeans with basic education today. I urge the Government to think of childcare and preschool as a public good.

Second, LifeSG credits can be systematically given to all parents with children up to 16 years old and should be sized to cover more of the basic out-of-pocket costs of child raising. Although my own four children have outgrown their toddler phase, parents in our Whampoa community often remind me about the costs of milk powder, diapers and doctor visits.

Fourth and finally, amidst continued cost of living anxieties, the fiscal surplus should give the Government more confidence to assure Singaporeans that it would not take major revenue raising moves up to 2035, barring any material adverse circumstances. Thus far, it has only said that it would not raise GST until 2030. Surely the Government can do better than that.

That is not to say that the Government’s tax policy should be constrained. Taxes are not only for raising revenues, but for reflecting our values and for signalling what is important for society. We should continue to use tax policies to achieve other objectives, such as reducing wealth inequality. This can be achieved by making our property tax system more progressive, by being more aggressive with taxes for investment properties and by imposing progressive stamp duties on properties at the point of inheritance. But that is another speech for another day.

In conclusion, Mr Speaker, I urge the Government to continue working towards two complementary objectives. One, being fiscally prudent and conservative. Ensuring that we do not tax more than we need to spend. And if there are surprises in our fiscal projections, it is better to be surprised by a surplus and never by a deficit. Two, spending wisely and decisively to improve the inclusive Singapore that we know and that we love, and that all of us in this House fight for. This means doing right by our seniors, our families and our workers. And keeping the Singapore dream alive, not just for this generation but for future generations to come.

Mr Speaker, I have run a slight budget surplus on the time budget, and I support the National Budget and thank the civil servants in MOF and other Ministries for their hard work that always continues.

Mr Speaker: Mr Giam, you have a clarification to ask? Go ahead.

6.11 pm

Mr Gerald Giam Yean Song: Sir, I thank Mr Loh for listening to my speech. I think I heard him say that he takes a different view about my approach to conservative estimates and suggested that it is better to have a surplus than a deficit. Is he suggesting that I was asking for Singapore to run budget deficits?

Mr Speaker: Mr Loh.

Mr Shawn Loh: I thank Mr Giam for the clarification. My takeaway from his speech was that Mr Giam was suggesting that we run less conservative fiscal projections. My suggestion and my view is that we should still be conservative with our fiscal projections. And twined with my idea that if we run unexpected budget surpluses, we should have that as a systematic surplus sharing mechanism in the next year with all Singaporeans. Thank you to the Member.

Mr Speaker: Mr Giam.

Mr Gerald Giam Yean Song: I thank Mr Loh for clarifying. Actually, I think we are on the same page. I do believe that we should run a small surplus whenever possible, but that is different from running a surplus that is $8.29 billion more than what was estimated. And I think he himself suggested that surpluses over two percent should be given back the following year. I have no disagreement with that, as long as it is put to good use.

What I was focusing more on was our budget marksmanship. Or perhaps, the lack thereof. I think overly conservative budgeting is actually inaccurate budgeting and something we should avoid.

Mr Speaker: Mr Loh, you wish to respond? Go ahead.

Mr Shawn Loh: I thank Mr Giam for the clarification. In fact, in the last financial year we did not run a budget surplus of more than two percent. So, it was only 1.9%. But I think we agree that if it is above 2%, he agrees with my suggestion that we can redistribute that to all Singaporeans, so thank you.

Mr Speaker: Ms Cassandra Lee.

6.13 pm

Ms Cassandra Lee (West Coast-Jurong West): Mr Speaker, I first declare my interest as a legal counsel with an accounting firm. Sir, I support this Budget because it recognises the present realities and prepares Singaporeans for the next wave of transformation.

In my speech, I want to focus on two areas: our efforts to support Singaporean workers and businesses in embracing and thriving in an AI-enabled economy; and our efforts to support Singaporeans to build not just careers, but also families, to be able to care for their families so that Singapore is Made For Families.

First, on an AI-enabled economy. According to MOM's report on the Labour Force in Singapore 2025, 64% of our employed residents are in Professional, Managerial, Executive, and Technical (PMET) roles. Many of these roles are knowledge-intensive and involve analysis, coordination and decision-making – areas where AI is increasingly being deployed to augment how work is done.

AI is already reshaping white-collar jobs, with greater emphasis being placed on judgement, adaptability and higher-order skills. Singapore’s workforce is highly exposed to AI due to the large share of such roles in our economy. This means that a significant proportion of our workforce will be impacted by AI in the form of job redesign, changing skill requirements and evolving career pathways. I hope we can look into the following three areas as we try to stay ahead of the AI curve.

First, on youth and the alignment between AI education and enterprise AI adoption. In the recent AI Festival Asia 2026, and a pre-Budget dialogue organised by young PAP, the youths have called for greater alignment between AI education and enterprise AI adoption.

Singapore has made strong investments in AI education and skills development. At the same time, the pace of AI adoption across enterprises, especially SMEs, remains uneven. SMEs may find it harder to attract and retain young talent if they are unable to offer comparable opportunities. If this gap persists, young Singaporeans entering the workforce may gravitate towards firms that can offer AI-enabled roles, many of which are better-resourced global companies.

We would not want this to create a structural pull of talent away from local enterprises over time. SMEs form the backbone of Singapore’s economy. I hope that we can look into aligning career pathways across how we train our youths for the AI economy and how our enterprises adopt AI, so that working in Singapore remains competitive and accessible across firms of different sizes.

Second, mid-career workers, particularly PMETs and professionals, face a different set of challenges. AI will reshape professions by changing how work is performed, how roles are defined and how value is created. In particular, the expansion of the TechSkills Accelerator to the accountancy and legal professions presents opportunities by strengthening capability-building in these sectors, which are facing ongoing talent and retention challenges.

The core value of lawyers and accountants lies in judgement, contextual understanding and accountability. These capabilities underpin trust in these professions and remain central even as AI tools are introduced and implemented. They cannot be replaced by AI.

In a more fragmented global environment, where partnerships are increasingly strategic and selective, the ability of Singaporean lawyers and accountants to build trust, navigate cultural contexts and sustain relationships remains critical. This is especially given the nature of these professions, which are cross-jurisdictional in many respects, and which must account for different regulatory regimes and cultural practices and norms in different countries. These are inherently human skills which cannot be replaced by AI.

But AI can assist lawyers and accountants in their tasks. I hope that we direct the assistance to help lawyers and accountants to work more efficiently and improve their overall work output, so that they can focus on honing the core skills of the profession.

That said, we must recognise and be cognisant of the fact that mid-career lawyers and accountants are not AI-natives. They did not grow up with AI and using AI effectively may not come naturally to them.

We must, therefore, be cautious about the impact of AI on our mid-career professionals. When we consider job redesigns, we should ensure that the redesigned jobs are suitable and allow the professional to maximise their strengths and value. As roles evolve, we also need to guide transitions in a way that preserves the professional standards and identity. In adopting and implementing AI, we must not lose sight of the core functions of the professions. And when we consider AI training and reskilling, we need to approach this in a way which is accessible and which works for these mid-career professionals.

I suggest that we do not stop at encouraging firms to take up AI technology and for employees to train themselves on AI technology. Firms and employees will adopt this at different speeds, and will vary in how they perceive the necessity, the convenience and the reliability of AI implementation and training. There needs to be thought at a sector level on how to redesign jobs, so the industry can be uplifted together.

At the same time, a not insignificant group also warrants attention: accountants and lawyers embedded within enterprises – i.e., in-house accountants and legal counsel. These in-house professionals are central to governance, compliance and strategic decision-making within companies. Their ability to work effectively with AI will directly influence how enterprises adopt AI across functions. Supporting them in their adoption of AI will also strengthen Singapore's attractiveness to foreign companies looking to hire Singaporeans or to set up headquarters in Singapore.

These in-house legal counsels and accountants may not be fully reached by initiatives targeted at law firms and accounting practices. It is, therefore, important that AI training, tools and support frameworks extend to such in-house professionals. Supporting this group will strengthen enterprise capabilities more broadly and enable the profession to better capture the opportunities presented by AI.

Third, in supporting our local SMEs in their adoption of AI, we may need to reassess the current method of support. Without the deep pockets and resources of larger firms, how can micro- and small SMEs also ride on the train of transformation? The newly announced Champions of AI programme will go some way to support this by tailoring support to each company, including enterprise transformation and workforce training.

I hope that the Government will consider the Champions of AI programme alongside the more established schemes, such as the Enterprise Innovation Scheme and the Productivity Solutions Grant to marry the two for micro- and small SMEs, who often face their own unique sets of constraints on cashflows, cost, implementation expertise and change management. AI adoption for micro- and small SMEs at scales and speeds comfortable for them, will give them the confidence needed for sustainable and more permanent adoption of AI.

Sir, AI will be the defining driver of economic transformation. Our task is to ensure that education, workforce transitions and enterprise adoption move in step, so that opportunities are more broadly shared and our economy remains cohesive and competitive.

But at the core, our economy is about families – every job supports a home. I support the Government's investment in Singapore families. I have previously spoken about what I called the "Singapore Puzzle" – Singapore's challenge lies in figuring out how we might remain competitive in a fast-changing world, while staying anchored to the values, our communities and the aspirations of our people. This is reflected in whether Singaporeans feel able to build their careers while, at the same time, starting and/or supporting their families.

For many, these aspirations are clear: a meaningful job, a stable family life and a confidence that effort will lead to progress. One area that warrants closer attention is how workplaces support Singaporeans in managing family responsibilities alongside work. These needs arise across different life stages: parents raising young children; working adults caring for ageing parents; and families navigating periods where additional time and flexibility are needed.

These are part of everyday life for many Singaporeans. Despite stronger policies, take-up of family related workplace support across employers and employees remain uneven, reflecting the continued influence of workplace expectations and culture on employees' confidence to take time for family responsibilities. Many continue to navigate tensions between career demands and caregiving.

MOM and NTUC have been working with their partners on this front to set clearer norms for flexible work arrangements, to help enterprises understand how to structure return-to-work pathways and job design that accommodates caregiving responsibilities, through tripartite guidelines and programmes with industry partners.

Alongside these structural measures, day-to-day workplace HR practices are also critical. How managers respond when an employee announces pregnancy, how performance is assessed for employees returning from maternity or paternity leave and how urgent caregiving needs are handled – these are practical decisions that determine whether employees can remain engaged at work.

When these situations are handled well, employees are more likely to remain in their roles, continue progressing in their careers and contribute consistently over time. When they are not, the outcome may be that employers lose talent, with employees leaving and exiting the workforce or disengaging at key stages of their careers to fulfill caregiving responsibilities. Young Singaporeans who otherwise desire to start their own families may also be discouraged from doing so in fear that their careers will suffer.

The difference lies in how workplaces interpret and respond to these moments, and how managers are equipped to communicate with care, make balanced decisions and plan for continuity without placing undue strain on teams.

I hope that the Government can work with the industry partners, such as the tripartite Institute for Human Resource Professionals, to shape HR practices and standards across industries to place greater emphasis on consistent and fair implementation of family-friendly workplace practices.

These are operational and human considerations that sit alongside policy. How they are addressed will shape whether workplace support translates into sustained participation, stronger teams and continued productivity.

In conclusion, Mr Speaker, young Singaporeans have grown up in a different Singapore – one with more opportunities, greater exposure and higher expectations of what a good life can be. They seek to build meaningful careers, achieve stability and have the confidence to plan for their future. Our policies should support these aspirations.

At the same time, sustaining these outcomes requires a careful balancing of choices. Economic growth, workforce strength and social cohesion are shaped by how we participate in the economy, how responsibilities are shared and how we respond to changing demographic realities. As a society, we must continue to make adjustments, whether in the way we organise work, support families or remain open and connected to the world.

These adjustments require collective understanding and shared responsibility. Young Singaporeans are part of this. Many are already stepping forward, building their careers, supporting their families and contributing in different ways. As expectations evolve, so, too, will the ways in which individuals, employers and the Government respond.

A system that is aligned across education, workplaces and support structures, gives individuals the space to make decisions with confidence and to contribute meaningfully over time. This is how we can strengthen both opportunity and resilience in Singapore. I support the Budget.

Mr Speaker: Mr Darryl David.

6.27 pm

Mr Darryl David (Ang Mo Kio): Mr Speaker, Sir, at the risk of stating the obvious, AI is reshaping the world at a mind-blowing pace. Our young people will graduate into a workforce where AI is embedded across industries and everyday tasks – from the workplaces they will enter, to the problems they will solve, the challenges they will face and the opportunities that they will seize.

For them, AI will not be optional; it will be the new normal. The World Economic Forum estimates that by 2030, AI and related technologies could displace 92 million jobs, while creating 170 million new roles, reflecting a profound structural shift in how work is done. This will certainly have an impact on the older workers too.

This context, AI is not merely a technological shift; it will define the economic and social landscape of the future. However, as the Prime Minister said in his Budget speech, and I quote: "AI is a powerful tool; but it is still a tool." Tools do not determine outcomes – people do. The question before us is not whether AI will transform our economy, but whether Singaporeans are equipped to harness it confidently, responsibly and effectively.

Research commissioned by Amazon Web Services (AWS) on AI adoption and skills in Singapore found that nearly 94% of employers expect their employees to be AI-driven by 2028, yet, 74% report difficulty finding the AI talent they need, highlighting a clear skills gap between demand and supply.

So, used well, AI can amplify human capability and creativity; used uncritically, it can weaken judgement and erode independent thinking. Our responsibility is to ensure that Singaporeans, especially our youths, are equipped not only to access AI, but to understand it, question it and use it responsibly. The same AWS research also showed that 91% of Generation Z in Singapore want to acquire AI skills, underscoring both the urgency and willingness of our youths to embrace this transformation.

Sir, Budget 2026 rightly emphasises harnessing AI as a strategic advantage to build a resilient and skilled workforce. Such efforts must begin early in schools where habits are formed and competencies are developed and I will speak more on education and AI during the Committee of Supply debate.

Today, I would like to focus on a more foundational, more fundamental enabler with regard to the whole issue of AI – ensuring that every student has equitable access to the digital hardware and competencies required before they can even begin to start understanding AI and how to meaningfully leverage it.

Sir, before we can talk about mastering AI software and advanced tools, we must ensure that every student starts from the same baseline. AI readiness depends on digital readiness. Without reliable access to personal computing devices, for example, students cannot build foundational skills or experiment with digital tools in ways that will allow them to engage meaningfully with AI later.

Sir, digital inequality today will translate into opportunity gaps tomorrow. Students who lack access to devices risk falling behind in learning, developing fewer self-directed learning habits and having reduced confidence in tackling technology-based tasks. But conversely, equitable access to devices provides every student with the ability to explore, learn and innovate.

Singapore has already taken a decisive step by providing Personal Learning Devices (PLDs) to all secondary students. Introduced progressively from 2020 and fully implemented by the end of 2021, these devices were integrated with the national e-learning platform, the Student Learning Space (SLS), and was supported by financial assistance schemes to ensure that no student – no secondary school student – was left behind.

Sir, in previous speeches, including the one I made during the Budget debate in 2024, I advocated extending PLDs to primary school students on the basis that early access cultivates digital fluency and supports equitable learning opportunities. Today, as Singapore increasingly positions itself as an AI-ready nation, this principle remains essential.

I wish to repeat my call to explore providing similar opportunities for our younger learners. Extending PLDs to primary school students would equip them with the tools to access digital content, develop computational skills and build confidence in navigating technology from an early age.

Such access would lay the groundwork for future AI literacy, ensuring that all students – all students – regardless of background, can engage fully with digital and AI-enabled learning. I am unsure of the progress MOE has made in introducing PLDs at the primary school level since my last advocacy and would, therefore, like to request for an update on any developments on how we can best equip our younger learners for the demands of a digital and AI-driven future.

In the meantime, Sir, let me reiterate again how providing PLDs to primary school students would bring multiple benefits. By ensuring that every child has access to a common device, we prevent unequal access to technology and strengthen social mobility. No student would be disadvantaged by relying on shared or outdated devices, reinforcing meritocracy in a digital age.

Early exposure to personal devices also allows schools to guide students in responsible use, cyber wellness and structured engagement with digital platforms. Habits formed in primary school are enduring and introducing these practices early can set the stage for lifelong literacy.

The ownership of a PLD encourages students to take greater responsibility for their own learning. It fosters curiosity, self-directed exploration and the confidence to engage with online educational resources. With AI increasingly embedded in learning platforms, these early habits will prepare students to adapt and thrive as technology becomes a key part of their education.

Aligning this initiative with the objectives of Budget 2026, providing standardised PLDs to primary students is not merely an educational reform. It is a strategic investment in Singapore's future human capital. It strengthens the foundation for a digitally fluent, AI-ready workforce that will support our nation's long-term competitiveness.

The framework for secondary school PLDs, including procurement and financial assistance mechanisms, provides a blueprint for extending this policy to primary students. A phased rollout, like the approach used for secondary schools, would allow careful implementation and adjustment, ensuring that all primary school students can benefit from this opportunity.

In short, Mr Speaker, MOE has done it before. They had done it very well – the secondary school students. I see no reason why we cannot extend this scheme further upstream to our primary school learners. It can only bring about benefits.

In conclusion, Sir, I like to say that providing every primary student with a PLD is not an end, but a step to prepare Singaporeans for a future in which AI is increasingly integrated into workplaces and daily life.

As Singapore's EdTech Masterplan 2030 reflects, strengthening students' digital literacy and technological skills is a national priority to, "prepare students for a technology transformed world". So, access to appropriate hardware ensures that all students – all students – regardless of background, can engage effectively with emerging digital tools.

This aligns with Budget 2026, which highlights harnessing AI as a strategic advantage to build a resilient and skilled workforce. True resilience begins in our classrooms, long before students enter the workforce. Equipping them therefore with the tools – the hardware tools – and competencies to navigate technology confidently nurtures a generation capable of leveraging AI responsibly and creatively, rather than simply using it passively.

In this way, equitable access to PLDs in primary schools is not merely an educational measure, but a strategic investment in Singapore's long-term human capital and technological competitiveness.

On this note, I would like to renew my call to the Government to make that decision to extend PLDs to primary school students. By taking this step, we are not only strengthening the foundation for AI literacy but also preparing our youth for an AI-driven future.

Thank you, Sir. I support the Budget.

Mr Speaker: Ms Lee Hui Ying.

6.37 pm

Ms Lee Hui Ying (Nee Soon): Mr Speaker, Sir, ending 2025 with a 5% growth despite global headwinds is a significant achievement. Yet, for many, this feels less like a triumph but more like a collective sigh of relief. Amidst such uncertainty, Singaporeans often feel torn between the safety of the conventional route and the risk of forging their own path. However, in this age of disruption, we cannot afford to choose one over the other.

Success today requires a marriage of intentional strategy and individual passion. AI-ready, job-ready, future-ready, but are Singaporeans ready? How can we support every Singaporean to not just survive the waves but navigate them with purpose?

First, navigating the job market. In the labour market, it remains uncertain. Our young graduates have always been viewed as a highly employable group, due to their ability to perform quickly as they learn on-the-job. However, the ground is shifting as companies hire for highest productivity at lower cost, experience becomes the differentiator from day one. While most students complete internships, many find that these stints lack the technical depth or clear conversion pathways needed to secure a full-time role in a competitive market.

How can the Ministry of Manpower and the Ministry of Trade and Industry actively create and recreate job opportunities in response to these shifts?

The Government introduced the Graduate Industry Traineeships Programme last year. In addition to financial services and information and communications, traineeships should be expanded to include the newly announced focus sectors in Singapore's AI strategy – advanced manufacturing, connectivity and even healthcare – as well as people-centric industries, such as social services sectors and retail.

Supporting start-ups to hire local graduates would also enable these workers to take ownership while providing start-ups with the much-needed pairs of hands, while aligning with the strategic focus on supporting high-growth companies.

Also on jobs, our construction sector continues to face significant cost and manpower pressures. Policies must be carefully calibrated to support both workforce transformation and business sustainability. With the increase in minimum qualifying salaries for S Pass holders, a more sector-based and skills-focused approach may be needed for construction, where structural manpower shortages persist and margins are unhealthily eroded. Salary benchmarks should better reflect skills, experience and job responsibilities, rather than relying heavily on age tiers alone. This will help firms manage workforce costs responsibly, while continuing to support fair wages. I will speak more on this during the COS debate.

Second, navigating the AI world. Given the prevalence of GenAI, teaching our students to fluently converse with these models has become a non-negotiable for the future. However, students risk letting ChatGPT fill in the blanks for them at the expense of their own development and losing critical thinking.

AI cannot just be a buzzword. How do we create an environment where students are innovators and creators of AI and use GenAI as a tool and not a crutch? I suggest we look to current initiatives tackling general technology use for inspiration. Recently, the National University of Singapore (NUS) college held its first "Touch Grass Week", named after an online term for disconnecting from technology and stepping into the outside world. During that one week, students used pen and paper or went 24 hours screen-free without using technology to complete their assignments. Similarly, students should be required to submit initial drafts or brainstorms on pen and paper for peer, teacher review, which encourages them to think critically before using GenAI as a sounding board or editor.

Let our young be innovators, be creators, not users, of AI. Harnessing AI to facilitate students' education looks different at every stage. In pre-tertiary education, AI's best use case might be critiquing a PSLE composition; in tertiary education, it might be supporting a literature review; in internships, it might be turning an admin task from a day's work to an hour's work through automation.

While MOE has already provided parents and students with general resources on GenAI and EdTech, students would also benefit from a guideline on specific GenAI use cases across educational levels and subjects. Our youth are and have always rose to the challenges of this generation. We need to provide platforms, define pathways and envision possibilities in partnership with them, giving them room to become our future changemakers.

Third, navigating back to the workforce for returning parents, many of whom are our senior youths. Whether due to personal circumstances or a desire to focus on their children's early years, some parents choose to take a break from work. When these parents return, they face an uphill battle to re-integrate themselves back into the workforce, especially if they have taken a long break due to multiple children or even waiting to help their children prepare for the PSLE. They re-enter a workplace with new tools and skills needed, their networks having moved on and a short runway to prove themselves again. This could be daunting enough to put them off returning altogether and we lose out to their valuable experience and productivity.

As we push forward with our plans to build leadership in growth sectors, falling behind for these parents is even more likely. We can help them find balance. To make the best choice between time for their children and the ability to return to their careers. Trade-offs will exist, but it will be a waste if parents feel the door is closed once they slow down for a few years.

One starting point is to double down on SkillsFuture for these parents. Having a dedicated set of courses targeted at returning parents, with course requirements and schedules built around those with caregiving responsibilities.

Flexi-work arrangements should become a mainstream feature of good jobs – not an exception, but an integral part of how we attract, retain and empower workers across every life stage. This includes encouraging employers to offer flexible hours, part-time professional roles and phased return-to-work options, so parents can rebuild their careers while meeting caregiving roles. When we enable parents to return with confidence and dignity, we not only strengthen families – we also retain valuable skills, experience and talent in our workforce.

Mr Speaker, in Mandarin, please.

(In Mandarin): Fourth, to assist our seniors in employment, Singapore will enter a super-aged society this year. Our seniors are not only a group that needs support, but have also become an important pillar of the workforce.

The life experience and seasoned wisdom that our seniors have are difficult for AI to replicate. They are the most reliable defence against the AI hallucinations. Young employees may reply on models' output, but the better-tested seniors possess the intuition to spot errors and this is their unique advantage.

Last year, the Alliance for Action on Empowering Multi-Stage Careers for Mature Workers (AfA-EMW) launched a pilot programme, collaborating with various parties to jointly create solutions for retraining, alternative employment models and progressive retirement. While this is a positive start, we should also care for those seniors who prefer a low commitment but high impact work. I suggest establishing a matching service, such as connecting industry veterans with small and medium enterprises (SMEs) to serve as consultants or subject matter experts or trainers.

The Japanese refer to the marginalised senior employees as Madogiwa-zoku. But I see is a more positive vision. These senior professionals can sit by the window and provide guidance and mentorship to the younger generation. Quality ageing is not only about financial security, but also about providing our seniors with a space where they can live with dignity and purpose for many years.

(In English): Mr Speaker, Sir, as Singapore stands at the edge of these historic inflection points, from the AI disruption to the transition into a super-aged society, we must remember, above all, our people are here to stay. And it is only in a place that feels like home, which offers both the stability of purpose and the promise of progress, that we bring out the best in our people. When Singaporeans feel they have found their place, they will, in return, bring the best of themselves to shape the future of this country. With that, I support the Budget.

Mr Speaker: Order.

Debate resumed.

Mr Speaker: Mr Edward Chia.

6.48 pm

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Mr Speaker, in my speech today, I will focus on three areas: first, strengthening support for our seniors and young families; second, addressing workers' and employers' anxieties amid economic transformation; and third, positioning preventive and precision healthcare as a strategic pillar for our next phase of growth.

As an MP for Holland-Bukit Timah GRC in Zhenghua division, I speak on behalf of my residents. Over recent months, many have approached me during my Meet-the-People Sessions and community engagements to share their concerns. I would like to bring their voices into this debate.

Young families in Zhenghua are not only raising children. They are also caring for ageing parents. The so-called "sandwiched generation" is feeling pressure from both ends. While this Budget provides important support measures, I would like to highlight one area where residents have experienced unintended consequences – the Silver Support Scheme.

The scheme is well-intentioned and has benefited many seniors. However, I have received appeals from residents whose Silver Support payments were reduced or ceased due to changes in per capita household income.

Two scenarios arise frequently. First, when adult children begin working, even in modest-paying jobs, their parents' Silver Support may be reduced despite no improvement in the seniors' own retirement adequacy. Second, when elderly parents move in with their children, the household per capita income (HPCI) rises, potentially reducing eligibility.

In effect, families sometimes feel unintentionally discouraged from living together. Seniors worry about becoming a burden, while younger families struggle to balance caregiving responsibilities.

I respectfully suggest reviewing whether HPCI remains the most appropriate metric and whether greater emphasis could be placed on assessing seniors' individual retirement adequacy. Supporting seniors ultimately strengthens young families by easing intergenerational pressures.

Mr Speaker, beyond household concerns, I would like to address worker and employer anxieties amid rapid economic transformation.

AI and digitalisation are reshaping industries. Workers want to stay relevant but must also maintain income stability for their families. At the same time, businesses want to transform but struggle to find skilled manpower. This is a gap we must bridge.

Employers, especially SMEs, continue to face significant cost pressures, particularly manpower costs and, for businesses located in dense areas, rising rents. Recent announcements, such as increases in S Pass qualifying salary and Local Qualifying Salary, while aligned with broader workforce objectives, have direct cost implications for SMEs that rely on foreign workers to complement their local workforce.

Importantly, such cost increases do not remain isolated at the firm level. They flow through the wider enterprise ecosystem. Many manpower-intensive services, such as cleaning, stewarding, security and facilities management, operate as outsourced functions supporting larger enterprises. As labour costs rise, these service providers inevitably pass through higher costs, leading to increased operating expenses across the value chain. Larger enterprises may therefore face higher facilities management or operational costs even when they are not directly affected by manpower policy adjustments. The impact is systemic and felt across the broader business environment.

Many SME employers recognise the need to transform, leverage AI to improve productivity and seize new opportunities. However, some feel that they are currently treading water, needing to keep their heads above water before they are in a position to fully pursue transformation.

SMEs employ seven out of 10 workers in Singapore. When SMEs transform, the entire economy transforms. Supporting SMEs is therefore not only about helping individual firms. It is about accelerating nationwide productivity growth.

I welcome the merger of SSG and WSG. Integrated workforce transformation is essential. The Career Conversion Programme (CCP) has been an effective bridge. For the man on the street, this means a worker can switch into a new role while still receiving a fair wage to pay bills and support their family. Employers are supported through wage subsidies while the worker undergoes training and is still building productivity. Today, wage support can reach up to 70%, and up to 90% for eligible workers aged 40 and above.

Given that the MOM's budget has increased this year, there is an opportunity to further strengthen such schemes.

As technological disruption accelerates, the duration and flexibility of CCP support may warrant review. Digital and AI-related roles often require longer adaptation periods. I suggest reviewing overall budget allocation, support duration flexibility and awareness among employers, particularly SMEs, many of whom may not fully understand the available support.

Mr Speaker, AI is a key theme of this Budget. I am heartened that the Government has introduced the Champions of AI programmme and tax deductions on AI expenditures. However, many SMEs need support not just in funding but in literacy and practical adoption. There needs to be faster diffusion of relevant AI tools, clear use cases that SMEs can realistically implement. SME Centres play a pivotal role in building awareness and guiding adoption. So, may I ask the Prime Minister what expanded role SME Centres will play in accelerating AI adoption? How are advisors being upskilled to guide businesses effectively?

Mr Speaker, I now turn to preventive and precision healthcare as a strategic growth pillar. Healthcare represents both a social imperative and an economic opportunity. Historically, healthcare systems have focused on treating illness after it occurs. Today, advances in AI, genomics and precision diagnostics allow us to shift upstream, toward prevention, early detection and health optimisation.

Singapore is uniquely positioned to lead this transition. We already possess a strategic advantage in high-quality longitudinal population health data, supported by trusted governance frameworks and secure platforms such as TRUST. Importantly, our multi-ethnic population provides nuanced genomic and health insights across diverse Asian ancestries, creating datasets that are both scientifically rich and regionally relevant. This differentiates Singapore from Western-centric datasets and positions us to develop preventive health innovations tailored for Asia.

Building on these strengths, we could consider establishing a dedicated Preventive Health Data Sandbox, a secure environment where approved enterprises and research institutions validate AI-driven diagnostic and risk prediction models using structured national datasets. Such a platform would move beyond research into regulatory-grade validation, positioning Singapore as a trusted global hub for testing, certification and scaling preventive health technologies. In tandem, a national certification framework for preventive AI algorithms could strengthen international credibility, enabling solutions validated here to be deployed across the region.

Singapore is already taking important steps through research, innovation and enterprise investments and initiatives such as subsidised Familial Hypercholesterolaemia genetic screening with MediSave support. These efforts demonstrate how precision medicine can shift healthcare toward earlier intervention. Preventive approaches can also address demographic challenges. For example, earlier fertility screening and intervention could help individuals make informed decisions sooner, potentially improving fertility outcomes and contributing positively to our Total Fertility Rate.

Population-level data and AI analytics will be foundational to this shift. With advances in AI, we can analyse complex health data more quickly and affordably, significantly expanding diagnostic capability. To fully harness this potential, we must also strengthen diagnostic infrastructure, increasing access to testing facilities, genomic screening and AI-assisted diagnostics.

Beyond healthcare delivery, preventive and precision medicine present a new economic frontier. Singapore is well-positioned to mobilise blended capital, as foundations, philanthropies and family offices increasingly prioritise investments in wellness, longevity and population health. By aligning public investment, private capital with scientific innovation, we can scale new enterprises while improving societal outcomes.

The global wellness and preventive health economy is expanding rapidly. Rather than viewing wellness as a lifestyle sector, Singapore can develop exportable intellectual property and scalable health optimisation solutions. By combining our strengths in biomedical science, AI and diagnostics, local enterprises can create globally deployable preventive health platforms, personalised analytics tools and healthspan solutions.

This approach creates new business opportunities, generates good jobs for Singaporeans and positions Singapore as a global hub for healthspan optimisation.

Mr Speaker, at its heart, this Budget is about assurance in a time of change. For seniors, we must ensure support schemes reflect individual realities and preserve family unity. For young families, we must ease caregiving pressures. For workers and employers, we must provide practical pathways that enable confident transformation.

By investing in preventive and precision healthcare powered by AI and strengthened through blended capital, we can build an economy that improves lives while creating new job opportunities for Singaporeans.

Budget 2026 lays strong foundations. With thoughtful refinements and bold execution, we can ensure that the next phase of our development benefits every Singaporean. Mr Speaker, Sir, I support this Budget.

Mr Speaker: Mr Ang Wei Neng.

6.59 pm

Mr Ang Wei Neng (West Coast-Jurong West): Mr Speaker, Sir, in Mandarin, please.

(In Mandarin): Mr Speaker, a Budget surplus of $15.1 billion is likely the largest in absolute terms since 1965. However, it is not a failure of marksmanship. It is a testament to fiscal discipline, strong revenue performance and a resilient economy. It is, in fact, a happy problem.

Some argue that every dollar of surplus should be locked away in reserves. Prudence is important. But prudence must serve people and solve their current problems.

Even if we were to place the entire $15.1 billion into the reserves, it would still not fully offset the roughly $40 billion drawn during COVID-19 to protect jobs and livelihoods. We built our economy by drawing on past reserves during the pandemic and that was the right decision. Now, with a surplus early in the term, we have both the responsibility and the opportunity to calibrate wisely.

Given the global geopolitical tensions and economic volatility, I support setting aside about half of the surplus as strategic reserves, in the event that there might be economic crisis in the next few three or four years, so that it can be used to stimulate the economy and support Singaporeans. But the remaining half should be used in a targeted manner to enhance our people's welfare, particularly the vulnerable groups. Hence, I have the following suggestions:

First, invest in AI. Artificial Intelligence will reshape industries and the speed will be faster than many workers can adapt. We should provide heavy subsidy to AI and digital training for Singaporeans earning below the median wage or blue CHAS card holders to avoid the digital divide from becoming an income divide. If we do not uplift them now, the digital divide will become an income divide. For students, I recommend that the Government provide free or heavily subsidised access to paid AI tools for all students from upper primary to university levels. This would enable students to learn AI knowledge more deeply and systematically. More importantly, narrow the gap between low-income and high-income families in accessing these expensive paid AI tools, thereby creating a level playing field. Such investment is not merely expenditure, but economic defence.

Second, improve ageing estates that is more than 30 years old. These flats require more than cosmetic upgrades. Residents need practical improvements: covered linkways, water leakage solutions, wheelchair-friendly access, safer walkways and better first- and last-mile connectivity. I suggest that we significantly enhance funding for CIPC, the Neighbourhood Renewal Programme and Estate Upgrading Programme under MND as well as first and last mile infrastructure scheme under LTA. These are not luxuries, they are dignity-enhancing investments for seniors and families.

Third is to ease the cost-of-living pressures. Many families have benefitted from the CDC vouchers. The 2% GST increase will yield an estimated $3 to $4 billion annually. This will help to offset the effect of higher cost-of-living after the Covid-19 pandemic, as well as the goods and services tax (GST) increases. Prime Minister Wong announced that the Government will continue to distribute $500 CDC vouchers to Singaporean households in January 2026. The distribution of CDC vouchers not only help households deal with daily cost increases but also support heartland businesses.

There is feedback that the public are concerned with the issue of fairness. Currently, a single household and household with 8 members will get the same amount of CDC vouchers. Although it embodies the universal principle, families with more members will have higher daily expenses in food, transport and childcare. Hence, the same amount does not mean equality here.

I will like to suggest that the Government distribute an extra $200 CDC vouchers to Singaporeans over 21 years old. This will more accurately reflect the needs of families, especially for middle and low-income families. At the same time, this measure will continue to promote local consumption and support neighbourhood business development. Through such arrangements, we affirm a simple yet important principle, where the nation achieves development success, the people of Singapore must tangibly feel these results in their daily lives.

Fourthly, we should thoroughly resolve the issue of residents being unable to access lifts on the same floor. Currently, approximately 100 HDB blocks still do not have direct lift access to every floor due to high costs. Many residents were still mobile and valued privacy when they purchased their flats over 30 years ago. Now, as they age and have mobility issues, they still need to climb stairs daily to access lifts, which is very arduous. I hope the Government will address this issue seriously and even if the costs are higher, we should still consider building additional lifts so that all HDB blocks can have lift access on the same floor. The civilisation of a society is reflected in how we treat our elderly.

Fifth, better care for persons with special needs. Over the past decade, we have made significant progress in strengthening our special education system. With the Ministry of Education's continued investment, many students with special needs are able to receive structured support, life skills education and vocational training before the age of 18. These efforts have brought hope and dignity to many families.

However, when these young people graduate and are unable to find or maintain employment, many quietly disappear from the system. They remain at home, gradually becoming isolated from society. Overtime, their social skills decline, their confidence weakens and their life goals gradually become unclear. Behind them are their caregivers, often aging parents. And these parents bear increasingly heavy emotional, physical and financial burdens.

Currently, support for adults with special needs remains limited. Opportunities for continuous vocational training, skills retraining, or reintegrating into the workforce after experiencing setbacks are still insufficient. I witnessed this firsthand when working with family of Purple Heart in Nanyang. This is a grassroots organisation that supports persons with special needs and their caregivers. Their struggles are real. Their love is unwavering, but their resources are increasingly strained.

For those who cannot work and require long term sheltered care, day activity centres or structured support, the challenges are even more severe. For these families, the issue is no longer about opportunities, but about dignity, stability and peace of mind for the future.

Therefore, I hereby call upon the Government to consider allocating dedicated resources to establish a special needs foundation. This foundation could fund long-term projects, research and community support to, where possible, help adults with special needs, maintain employability and stay connected with society and provide empathetic and structured care for those with special needs who cannot work. The value of a society lies not in how it treats the strong, but in how it supports the vulnerable.

Let us walk along persons with special needs, not only during their childhood but throughout their entire lives.

Mr Speaker, a surplus is not merely a number on a balance sheet. It represents the collective sacrifices made by workers, businesses and families during difficult times through paying taxes, adapting to GST increases and tightening their belts. Let us save prudently. Let us also spend purposefully to enhance resilience, support vulnerable groups and build a more inclusive Singapore. Fiscal strength should translate into social strength. Only in this way can the surplus truly benefit Singaporeans.

7.10 pm

Mr Speaker: Second Minster for Finance.