PM Lawrence Wong's full Budget 2026 speech

PM Lawrence Wong's Budget 2026 speech put AI at the centre. He set up a new National AI Council, chairing it himself, and launched four national AI missions in advanced manufacturing; connectivity and logistics; finance; and healthcare. Over 60 firms now run AI centres of excellence in Singapore. A new AI Champions programme supports firms aiming for end-to-end transformation. The Productivity Solutions Grant expands to cover AI solutions, and the Enterprise Innovation Scheme adds AI spending to its 400% tax deduction (capped at S$50,000 per year of assessment for YA 2027 and 2028). RIE 2030 commits S$37 billion over five years.

On the labour side, SkillsFuture Singapore and Workforce Singapore merge into a single statutory board overseen jointly by MOE and MOM. Employment Pass minimum salaries rise from S$5,600 to S$6,000 in 2027 (S$6,200 to S$6,600 in finance), SPass from S$3,300 to S$3,600 (S$3,800 to S$4,000 in finance). The local qualifying salary rises from S$1,600 to S$1,800. The Progressive Wage Credit Scheme co-payment ratio rises from 20% to 30% and extends two years to 2028.

On retirement, CPF will launch a lifecycle investment scheme with two to three low-fee providers picked by the CPF Board, letting younger members take more risk earlier without high fees or scam exposure. Other highlights: a 40% corporate tax rebate capped at S$30,000 per company; six months of free premium AI-tool access for SkillsFuture trainees; another S$500 in CDC vouchers; the 2030 solar target raised from 2GWp to 3GWp; civil-nuclear cooperation underway with the US and France; and the BEPS Pillar Two top-up tax kicking in from 2027.

Caption language: en · Fetched: 2026-05-02

Mr. Speaker, I move that parliament approves the financial policy of the government for the financial year 1st April 2026 to 31st March 2027. This is our first budget in this new term of government. It comes as we enter a post SG60 phase in our nation building journey. We begin this next phase at a time of profound global change. For nearly eight decades, the world benefited from an international order that supported econ stability and economic cooperation. The system rested in large part on the leadership of the United States. It underwrote global security, champion open markets, and helped form the institutions and rules that enabled shared prosperity across the world, including here in Asia. That era has now come to an end. The US is reassessing and in some areas undoing key elements of the very system it once helped to build.

Trade rules that were once promoted are being set aside. Global institutions are being bypassed and longstanding norms are becoming less reliable. The cumulative effect is a weakening of the multilateral system. Countries everywhere have less confidence that common rules will protect their interests. As a result, more states are resorting to unilateral action and some are becoming emboldened to do so. At the same time, the guard rails that once managed disputes and tensions are eroding. And so, the world is becoming more contested, more fragmented, and ultimately more dangerous. Against this backdrop, last year there was widespread expectation that the US Liberation Day tariffs would trigger a sharp global slowdown. Unfortunately, our worst fears did not materialize.

Many firms adjusted quickly, frontloading production and imports to get ahead of the tariff measures. Subsequent trade deals together with shifts in global supply chains helped to reduce the actual impact of the tariffs. As a result, growth in the major economies held up supported in part by strong investment in AI related activities. In short, despite mounting stresses, the global economy proved more resilient than anticipated and the international system continued to function. This year, however, we may not be so fortunate. Events in just the first month of 2026 have already been of exceptional scale and consequence. They have increased geopolitical tensions worldwide. As pressures build and the margin for error narrows, the resilience of the global system will be tested far more severely.

There are also clear and growing signs of fragility in the global economy. Rising public debt in many major economies will strain financial stability and weigh on longerterm growth prospects. At the same time, heightened risk-taking in financial markets has pushed up asset valuations, leaving them vulnerable to abrupt corrupt corrections, and any such adjustment would dampen confidence and spill over into real economic activity. These external developments have a direct bearing on us. Last year, the resilience of the global economy combined with our own economic strength resulted in better than expected growth of 5%. Strong external demand boosted key industry clusters including electronics and biomedical manufacturing and these gains generated spillover across the broader economy.

Some of the positive momentum will continue into this year, but amidst heightened global uncertainties, we expect a more moderate outlook for 2026. Growth is therefore projected at 2 to 4% with inflation at 1 to 2%. Despite these uncertainties, we can move forward with confidence. Confidence grounded in fundamentals. Over the decades, we have systematically strengthened our economic foundations, deepening capabilities, investing in our people, and reshaping our industries as technologies evolve. We have built a reputation as a reliable and trusted hub, stable, secure, and well-governed, qualities that businesses and investors have come to value highly, more so now than before, precisely because the world has become more fractured and uncertain. All these give Singapore an important and tangible competitive advantage.

But past success alone will not carry us forward. In a profoundly changed world, standing still is not an option. We cannot wait for conditions to turn more favorable. Nor can we fall back on strategies designed for a previous era. We therefore have a full agenda in this term of government to refresh our strategies and strengthen our social compact. Budget 2026 is the first step in this effort to secure our future in a changed world. It lays the groundwork for how we will navigate our next phase of development together as one people. In this budget, we will advance our refreshed economic strategy, harness artificial intelligence as a strategic advantage, build a resilient and skilled workforce, give families more support and greater assurance, protect our security and sustainability, and renew and strengthen our Singapore spirit.

And I will touch on each of these in turn. While our economy did well last year, some businesses continue to face cost pressures and operating challenges. We will support our businesses and help them stay competitive. I will provide a 40% corporate income tax rebate in the year of assessment 2026. Every active company that employed at least one local employee last year will receive a minimum benefit of $1,500. The total benefit for each company will be capped at $30,000. This will provide short-term relief as we press on with our restructuring and transformation efforts. Growth will be harder in this changed world. We must aim higher, move faster, and be prepared to take calculated risk. This is why the government convened the economic strategy review.

The ESR committee shared their midterm update last month and we will move decisively to act on their recommendations. Our ambition is to secure growth at the higher end of the 2 to 3% range over the next decade. But growth itself is not enough. Growth must translate into good jobs and rising incomes for Singaporeans. And let me share how we will achieve this. First, we must adapt and connect differently in a changed global environment. Some countries are turning inward, seeking to reduce their external dependence. But for Singapore, that is not an option. To prosper, we still need to be connected to the world, trading with others and integrating ourselves into global flows. Importantly, globalization has not ended. No country can succeed on its own.

Most major products still depend on the global division of labor, combining expertise and materials from many countries and on access to global markets to achieve scale. This fundamental reality has not changed. What has changed is globalization as we knew it. Economic flows are becoming more selective, partnerships more strategic, and resilience now matters as much as efficiency. So Singapore must adjust to these new patterns, staying open but connecting in smarter, more diversified and more resilient ways. And that's why we are forging new forms of cooperation with partners who share our commitment. Last year we launched a future of investment and trade partnership, bringing together like-minded partners to cooperate in areas like technology, trade facilitation, and supply chain resilience.

This month, the EU Singapore digital trade agreement entered into force, a landmark agreement with robust rules for digital trade. And later this year, we will sign a firstofits-kind agreement on trade in essential supplies with New Zealand to ensure the continuity of critical trade flows between our two countries in times of crisis. We will also step up engagement with fast growing markets including in Latin America, Africa and the Middle East. We will establish new embassies and strengthen our diplomatic and economic presence on the ground to take a better advantage of emerging opportunities in these regions. Closer to home, we are working with our neighbors to deepen regional integration. This includes cooperating on projects like the Johor Singapore special economic zone and the Batam Bintan and Karimoon free trade zones in Indonesia.

In short, we will redouble our efforts to diversify globally and to integrate regionally. But connectivity alone is not enough. It must translate into rail opportunities that our businesses can capture and seize. Many companies, many Singapore companies are already doing this. One example is Rotary Engineering. It started in 1972 offering electrical installation services to oil refineries and prochemical plants here in Singapore, but it did not confine itself to our domestic market. Over time, it built a leading presence in Southeast Asia, delivering energy infrastructure services. and now it's venturing further a field and deepening its presence in the Middle East. But doing business overseas is not easy, especially for smaller firms. Companies face unfamiliar regulations, different business practices, and intense local competition.

And so we will do more to support companies as they venture abroad. We will enhance the support levels for grant schemes that support companies to internationalize up to 70% for small and medium enterprises ormemes and up to 50% for nonmemes. We will also enhance a market readiness assistance grant to support companies not just to access new markets but to deepen activities in existing overseas markets as well. Under the double tax deduction for internationalization scheme, companies automatically enjoy a 200% tax deduction for selected qualifying activities capped at $150,000. We will allow more qualifying activities to be eligible for such automatic tax deduction claims and raise the cap to $400,000. We will enhance the enterprise financing scheme by increasing the maximum loan quantum for trade and fixed asset loans.

This will give companies more flexibility to cater to their different financing needs. And we will also provide more support for companies pursuing significant overseas ventures that require higher capital outlay. And the Minister for Trade and Industry will share more about these changes at the committee of supply. Second, we will build build leadership in key growth clusters and that means anchoring critical segments of global value chains here in Singapore, especially activities with high knowledge content and strong spillovers. Our goal is not just to host such activities but to shape how these industries develop and where they create value. We are already doing this in some areas like semiconductors. A key frontier in semiconductors is advanced packaging. Despite what the name suggests, advanced packaging.

This is highly complex and technologically demanding. Traditionally, faster chips have been built by packing more transistors onto a single chip. But this is becoming more costly and we are approaching physical limits. As a result, attention has shifted to advanced packaging which integrates multiple chips into a single package using highly precise manufacturing technologies and this delivers higher better performance and energy efficiency. As Singapore began investing in advanced packaging R&D more than two decades ago, well before it became a global priority and these investments are now bearing fruit. They are one reason why major semiconductor companies continue to invest heavily in Singapore, not just in manufacturing but also in R&D, innovation and supply chain partnerships.

We see a similar pattern in other key industries like aerospace and biomedical science. Technology is the critical enabler underpinning our strategy to build leadership in these clusters. Singapore must be a place where frontier technologies are developed, tested and commercialized. And that's why we will invest $ 37 billion under the research innovation and enterprise or RI 2030 plan. This reflects our sustained commitment to research and innovation amounting to around 1% of GDP each year. At the same time, we must be realistic. In absolute dollars, our public R&D spending will always be modest compared to the sums deployed by much larger economies. We cannot outspend them.

Instead, our investments must be disciplined, focused, and strategic, directed at areas where Singapore has clear strengths and where our efforts can make a real difference. And there is potential in emerging areas like decarbonization solutions and quantum technology. In quantum for example, we made an early and deliberate bet. In 2007, we established the center for quantum technologies at N US. Much of quantum research then was still theoretical, but we invested patiently in building foundational capabilities believing that these would one day translate into transformative applications. That foresight is paying off. Today, quantum computing is moving rapidly from theory to reality with far-reaching implications across many fields.

The major technology players are investing heavily in capabilities to build commercial scale quantum computers and Singapore is attracting some of the best. Quantum, one of the world's leading quantum computer companies, has established operations here and will be hosting its latest quantum computer in Singapore, making us the first country outside America to host this system. This will give our researchers and companies, including a few homegrown startups, direct access to cutting edge quantum compute and opportunities to work on meaningful projects. We are also attracting top global talent and partnerships. Nobel laurate professor John Martinez, a pioneer in superconducting systems, co-founded a quantum computing startup which is collaborating with our researchers at AAR and N US.

They are developing novel components to advance the performance of quantum computers using state-of-the-art semiconductor processes. They chose Singapore because of the unique combination of our strengths in advanced manufacturing, semiconductors, and frontier quantum research. These examples show how we can build leadership in key growth areas and shape where innovation and value creation take place. In doing so, we strengthen Singapore's strategic resilience and relevance while creating more jobs and better opportunities for Singaporeans. Third, we will strengthen our enterprise ecosystem. Enterprise funding is a key part of this ecosystem. Over many years, we have worked steadily to strengthen this area. In venture and seed funding, we have made good progress.

Compared to a decade ago, it is now much easier for startups to access early stage capital. But many firms continue to face challenges at the growth stage. This is not unique to Singapore. Globally, growth stage capital has tightened. As a result, many firms in especially in deep tech find it harder to raise the larger and longerterm funding that's needed to scale. We will therefore do more to catalyze growth capital in Singapore. Under the startup SG equity scheme, the government provides initial capital to catalyze and crowd in private funding for promising startups. To date, the scheme has focused mainly on early stage funding. We will now go further. I will set aside $1 billion to enhance startup SG equity and expand its scope to cover growth stage companies.

Uh beyond this, we will take a more systemic approach to strengthening our growth capital ecosystem. We will convene a new work group led by Minister Chiongt working closely with the industry to develop strategies to position Singapore as a leading center for growth capital. When enterprises are ready to list, we want them to see Singapore as their listing venue of choice. We had earlier set up the anchor fund to attract and anchor highquality listings and we are now seeing encouraging signs of renewed listing activity on the SGX. I will therefore launch a second 1. 5 billion tranch of the anchor fund. As with the first tranch, this will be a co-investment between the government and Tamasi. We will also continue to strengthen our broader equities market.

Last year, MAS launched the equity market development program to develop our fund management industry and increase investor participation in Singapore equities. Industry response has been encouraging. MAS has allocated close to 4 billion to nine asset managers. To build on this momentum, I will expand the program with a $ 1. 5 billion topup to the financial sector development fund. At the same time, we are implementing the other recommendations of the equities market review group. This includes streamlining listing rules and requirements to make it easier for high growth companies to go public and establishing a dual listing bridge connecting the SGX and NASDAQ. These measures will enhance the depth and vibrancy of our public equities market and provide more pathways for enterprises to grow and scale from Singapore.

Deep and vibrant markets are one part of the equation. We must also ensure a strong pipeline of highquality companies that choose to build, grow, and anchor themselves in Singapore. Some will be locally grown enterprises. Others will be promising enterprises from abroad. EDB has traditionally focused its investment promotion efforts on multinational enterprises. Going forward, it will step up efforts to attract high growth companies with the potential to become future industry leaders. By anchoring such companies early, we can build new engines of growth and capture greater value for our economy as these enterprises grow and expand from Singapore. This comprehensive approach from nurturing homegrown startups to catalyzing private capital and attracting promising global companies will strengthen our enterprise ecosystem.

It will enable companies of all sizes and at every stage of growth to access the capital and partnerships they need to succeed. And importantly, this will create more opportunities for Singaporeans to secure good jobs and grow their careers. In a changed world, a decisive factor for success will be how we harness new technologies and foremost amongst them artificial intelligence. AI is advancing at remarkable speed. We are reaching a stage where systems can write their own code and improve through iterative learning. The potential is immense to raise productivity, unlock new discoveries, and transform lives in ways that we are only beginning to understand. But with this promise comes deep, deep concerns. Workers worry that AI will displace jobs. Societies worry about misinformation, bias, and the ethical use of powerful technologies.

These anxieties are real and we must confront them squarely. But fear cannot be Singapore's response. If we allow uncertainty to paralyze us, we will fall behind in a world that is moving rapidly ahead. So, we must act with clarity and resolve. AI is a powerful tool, but it is still a tool. It must serve our national interest and our people. We will define how AI is developed and used in Singapore. We will set clear rules to ensure it is applied responsibly and safely. And we will ensure that its benefits are shared widely across society. Harnessed well, AI will be a strategic advantage for Singapore. It can help us overcome our structural constraints, our limited natural resources, rapidly aging population, and tight labor market.

To do this, we must invest deliberately and with discipline, not by simply following what others do, but by playing to Singapore's strengths. Our advantage does not lie in building the largest frontier models. It lies in deploying AI effectively, responsibly, and at speed. Singapore can be a trusted hub where companies and researchers come together to develop, test, and deploy impactful AI solutions and do so faster and more coherently than many larger countries. This is already happening today. More than 60 firms, including Google and Microsoft, have set up AI centers of excellence here. And these investments have created a growing number of good jobs for Singaporeans in AI research, engineering, and deployment. But to fully realize AI's potential, we must go beyond individual pilots and isolated experiments.

We must organize at a national level and move with speed and scale. We will therefore launch a new set of national AI missions. These missions will drive AIEL transformation in key sectors of our economy and push the boundaries of what is possible for Singapore and for the world. We will focus on four sectors. Advanced manufacturing, connectivity, finance and healthcare. For example, in advanced manufacturing, we aim to accelerate innovation and build best-in-class factories that can compete globally. In connectivity and logistics, AI can help to automate airport and seapport operations, move goods more efficiently, and strengthen Singapore's position as a leading global hub. These are not abstract aspirations. Each AI mission will be anchored in clear objectives and tangible outcomes. Delivering this will require us to work differently.

We will review regulations and create sandboxes so that companies can test AI innovation safely and responsibly within the government. We will better align our R&D regulatory and investment promotion efforts so that agencies act in concert and pull in the same direction. All this will require a coordinated national effort. We will therefore establish a new national AI council which I will chair to provide strategic direction and to drive Singapore's AI agenda. For AI to truly transform our economy, companies must also adopt it comprehensively. Many firms say they are using AI but end to end transformation with AI is very demanding. It requires organizing data, rebuilding systems, redesigning processes and jobs and retraining workers. Even the major global companies are grappling with this.

But those that succeed will gain a decisive competitive advantage. A few leading Singapore companies like DBS and Grab are already moving decisively on AI transformation. We want to encourage more to do so. So we will launch a new champions of AI program to support firms with the ambition to use AI to comprehensively transform their business. Support will be tailored to each company and will include enterprise transformation and workforce training. And as these companies succeed, they will set benchmarks for their industries and inspire others to follow. Beyond this, we will strengthen support for all enterprises, especially ourmemes, so they adopt AI and benefit from it in practical ways.

We will build on the enterprise innovation scheme which provides businesses with 400% tax deductions on qualifying expenditures in activities like R&D, innovation, and capability development. We will expand the scheme to include AI expenditures as a qualifying activity for the years of assessment 2027 and 2028 capped at $50,000 per year of assessment. We will also strengthen our existing support schemes. The productivity solutions grant or PSG already helps companies to adopt digital solutions. Increasingly these solutions will be AI enabled. Take HarryS an FM company known for its freshlymade nonquay. It began in the 1940s started by Madame Chanong and later grew into a stall at Tyongaru Food Center and in the 1980s her son took over the business.

Today the third generation runs the company and it has expanded to eight cafes across Singapore. With support from the PSG, it adopted an AI enabled restaurant management system to automate ordering and billing and streamline operations, serving customers faster and growing its revenues in the process. We will expand the PSG to support a wider range of digital and AI enabled solutions so that every firm, regardless of size, can access tools that help them work smarter and compete more effectively. To build a vibrant AI enabled economy, it helps to have a focal point, one that brings together AI founders, practitioners, researchers, and innovators and catalyzes more collaborations and interactions. We have started a pilot initiative called Lurong AI. It's a dedicated co-working space that serves as a convening hub for our AI community.

We will build on this pilot and establish a larger AI park at one north. This will be a new cluster to catalyze ideas, forge collaborations, and translate AI initiatives into practical solutions for businesses and public services. Just as we support enterprises, we must do the same and more for our workers. AI will change how we work. Some task will be automated. New roles will emerge. Many existing jobs will evolve. I know this creates real anxiety for workers. The pace of change can be unsettling, especially when livelihoods are at stake. But we will not allow technological change to come at the expense of our workers. We will press ahead with AI because we must. At the same time, we will put in place strong support to help our workers adapt and progress because we will take care of our own.

The government will stand with our workers throughout this transition. No one will have to navigate the changes alone. We will help Singaporeans acquire new skills, adapt to new roles, and use AI as a tool to be more productive and effective at work. Where jobs are impacted, we will manage the transitions carefully and work closely with NTU and our unions to help workers move into new areas and opportunities. Our commitment is clear. Every Singaporean who is willing to adapt and learn will continue to secure a good job and make a good living here in Singapore. To succeed in this new reality, we must prepare both our future workforce and those already working today. For the next generation, we will strengthen AI literacy for students across all our institutes of higher learning.

But just as importantly, our IHLS will continue to emphasize strong foundations so that students learn to use AI wisely, not as a shortcut, and are equipped with rigorous thinking and deep disciplinary skills. At the workplace, we will help workers use AI to take over routine task so that they can focus their time and energy on higher value activities. Work that requires judgment, creativity, and human insight and that cannot be replaced by machines. Take accountancy as an example. Today, accountants can use AI to automate large parts of data consolidation, preparation, and bootkeeping. But this allows them to move up the value chain, spending more time on client advisory, forensic work, and complex analysis where professional expertise and trust matter most.

To support workers through this transition, we will help them build practical AI capabilities. And because AI is already reshaping many forms of white collar and cognitive work, we will start with the accountancy and legal professions and progressively extend this to other fields. Beyond these specific sectors, every Singaporean can take the initiative to learn and pick up AI related skills. Today, many AI chatboards like Chat GPT or Gemini are widely available and easy to use. For many, they are just smarter versions of a search engine. But there's much more to AI than just doing a search. With the right guidance and prompts, these tools can do a lot more. Helping users analyze information, generate ideas, and solve problems. Using AI well requires learning, practice, and the right support.

There is already a wide range of AI related courses on the skills future website from fully online options to part-time and full-time programs. But we know it's not always easy to navigate the options and identify what is most relevant. So, we will redesign the skills future website to make AI learning pathways clearer and easier to access so that Singaporeans can quickly find causes that match their work needs and proficiency levels. Learning must go beyond theory. It must translate into hands-on applications. While most AI tools are free at a basic level, access to more advanced models requires a paid subscription. To further encourage learning, we will provide Singaporeans who take up selected AI training courses 6 months of free access to premium AI tools. This will allow them to practice, experiment, and apply what they have learned.

Several ministries MDDI, MOE, MOM and MTI are involved in these crosscutting efforts and the ministers will provide more details at the committee of supply. Sir, Singapore will not be passive in the face of rapid changes around us. We will adapt, we will compete, and we will continue to move forward with confidence. By harnessing AI as a strategic advantage, we will shape our own future and secure our place in this changed world. Singaporeans and especially our workers are at the center of everything we do. Ultimately, what matters is not just the policies we announce, but the outcomes they deliver in people's lives. And that is why we track results carefully and assess whether our efforts are making a real difference. Earlier this week, MOF released an occasional paper on income growth, inequality, and social mobility trends.

It shows that over the past decade, we have made good progress with broad-based wage increases and smaller income gaps. These improvements did not happen by chance. Left entirely to market forces, they would not have occurred on their own. Indeed, in many advanced economies, as growth slows, inequality becomes more entrenched. Singapore faces these same underlying pressures. That is why the government has and will continue to lean against these trends and strive to ensure that the fruits of growth are shared widely and fairly. Every Singaporean, regardless of where they start in life, should have a fair chance to pursue their aspirations and realize their full potential. So, in this budget, we will continue to strengthen support for lower wage workers.

The local qualifying salary or LQS sets the minimum salary that local employers must local employees must be paid in firms that hire foreign workers. We will raise the LQS for full-time local employees from $1,600 to $1,800. To help businesses defay some of the cost, we will enhance the progressive wage credit scheme or the PWCS. We will raise the PWCS co-unding support for this year from 20% to 30%. We will also extend the PWCS for two more years to 2028. And from next year, we will raise the minimum wage increase to qualify for PWCS support from $100 to $200. This will better encourage and reward the firms that invest in their workers. These measures build on the progressive wage model or the PWM which we have developed together with NTU and our tripartite partners.

The PWM goes beyond a simple flat minimum wage and instead links pay increases to skills, productivity, and career progression, and it is delivering results. We will also continue to strengthen training support for the PWM. Last year, I announced additional support under the workfare skills support for workers who take up long- form training causes. We will go further to enhance the basic tier of the scheme and increase the hourly allowance for workers who upgrade their skills. We will also do more to support lifelong learning for all Singaporeans through Skills Future. When we first started Skills Future more than a decade ago, the training landscape looked very different. At that time, our IHLS were still largely focused on pre-employment training, but we knew this was no longer sufficient.

And that's why we set up Skills Future Singapore in 2016 under the Ministry of Education to embed lifelong learning within our education system. Today, we have achieved this objective. working adults at all stages of their careers can access a wide range of high quality training options under across our IHLS. All our autonomous universities polytenics and it have internalized lifelong learning as part of their mission. For example, N US and NTU our two largest universities have made lifelong learning an integral part of how they organize their teaching and learning. They offer flexible pathways for alumni and adult learners to take modular courses, earn stackable credits, and progressively build this into recognized qualifications. Singaporeans too are increasingly embracing lifelong learning.

Last year, more than 600,000 individuals took up training with Skills Future support offered by IHLS and private training providers. While skills future Singapore underee focused on skills training, we also had work force Singapore under MOM to engage employers and help job seekers find jobs. Over the years, we have worked to strengthen coordination between these two agencies. But and in an era of faster technological change and more frequent job transitions, stronger alignment is needed and our systems must work more seamlessly together. Hence, the ESR committee had recommended that the government review how we organize jobs and skills support for Singaporeans. We have carefully considered this recommendation and will take a decisive step forward.

We will merge Skills Future Singapore and Workforce Singapore into a new statutory board jointly overseen bye and M. This new agency will be a one-stop shop for skills training, career guidance, and job matching services for workers and job seekers. That means support will be more seamless from career planning to skills acquisitions and job matching and transitions. For employers, the support will be more integrated, covering workforce planning, job redesign, hiring and workforce development. The Minister for Education and the Minister for Manpower will share more at the committee of supply. This goes beyond making an organizational change. It is about continually strengthening our system of lifelong learning and career support so Singaporeans can adapt, grow, and realize their full potential.

In a world where change is constant, we must remain a society that never stops learning and never stops striving to do better. We are also strengthening support for specific segments of our workforce. In 2024, we launched the skills future levelup program to help mid-career workers undergo a skills reboot. The takeup has been encouraging. Over 60,000 Singaporeans aged 40 and above have already benefited from substantial training causes. Mr. Jeffrey Low is one of the many adult learners who has benefited from the program. After 18 years as an air steward, he was keen to reskill and pursue new opportunities aligned to his interests. So he enrolled in the digital product management course at the Singapore Institute of Technology. Most of his course fees were offset by skills future subsidies and credits.

He also received a mid-career training allowance during the three-month course which helped support his daily expenses while he trained. So now Jeffrey is doing well in the new role as a duty terminal manager with Changi Airport Group. We will continue to enhance the level up program from next month. The mid-career training allowance will be expanded to those who take up part-time training, not just full-time but also part-time training. And we will also expand coverage to include more industry relevant causes. Another important group is our senior workers. We will support our seniors so they can continue to contribute meaningfully. This includes helping them plan ahead for their later stage careers and supporting them in refreshing their skills. We will also equip employers to design age friendly jobs and multigenerational workplaces.

MO has convened a tripartite work group on senior employment to study these issues comprehensively. Their their recommendations will be released later this year. In the meantime, we will extend the senior employment credit to N 2027 to support employers who continue to employ senior workers. As we create better jobs and upskill Singaporeans, we must also remain open to global skills and talent. Foreign professionals and workers strengthen our teams, transfer knowledge, and enable companies to grow. And this in turn creates more and better opportunities for Singaporeans. At the same time, we will continue to ensure that our foreign workforce complements a strong Singaporean core. In line with this approach, we will refine and update our foreign worker policies to reflect evolving conditions.

We will raise the employment pass or EP minimum qualifying salary for new applicants from $5,600 to $6,000 from January 2027. This maintains the quality of the EP holders as local wages rise. For the financial services sector, which has higher salary norms, we will raise the minimum qualifying salary from $6,200 to $6,600. The qualifying salaries for older EP applicants will be raised in tandem. For renewal applications, the changes will apply a year later in 2028 to give businesses more time to adjust. Likewise, we will raise the qualifying salaries for SPASSh holders. From January 2027, the minimum qualifying salary for new SPASS applicants will be raised from $3,300 to $3,600. And for the financial services sector, this will be raised from $3,800 to $4,000.

Qualifying salaries for older SPASS applicants will be raised in tandem with renewal applications affected one year later from 2028. We will also adjust work permit levies for the marine and process sectors. Levies for basic skilled workers will be raised by $100 and $150 respectively. For the manufacturing and services sectors, we will simplify the current tier levy structure and the details are in the annex to the budget to give businesses time to adjust. These changes will take effect from 2028 and the minister for manpower will share more at the committee of supply. The wide range of workforce measures I've outlined reflects Singapore's overall approach to stay open to skills and expertise that strengthen our economy while ensuring that Singaporeans remain firmly at the center of our workforce and our policies.

We will help Singaporeans adapt to change with confidence, move across career transitions with assurance, and build meaningful and fulfilling careers. Sir, families are the bedrock of society and the first line of support for every individual. Through Forward Singapore, we have made significant moves in recent years to support Singaporeans and their families. from parents to seniors, caregivers, and persons with disabilities. We have also ramped up the supply of HDB flats to ensure that public housing remains accessible and affordable for couples and families. In this budget, we will make further moves to give families more support and greater assurance. Many young couples hope to become parents. We want to create the right conditions so they feel confident and ready to start a family.

The decision to get married and have children is deeply personal. But for those who wish to take the step, the government will do more to support them along the way. One of the biggest concerns for young couples is the cost of raising a family. Over successive budgets, we have strengthened support to help parents manage these expenses. For example, we introduced a large family scheme to support families who have or aspire to have three or more children. For every third or subsequent child, the scheme will provide up to $16,000 in additional benefits. At last year's budget, we announced $500 in child life SG credits for each Singapore Singaporean child age 12 and below to help their parents defay the day-to-day household expenses.

This year, we will provide another $500 in child life SG credits to families for each Singaporean child age 12 and below. We will continue to keep preschool and student care affordable to support the critical early years of a child's development. Over the years, we have reduced preschool fee caps and increased subsidies. Today, child care fees for dualincome families are comparable to primary school and afterchool student care fees. Lower and middle inome families also receive means tested subsidies which further reduce out-ofpocket expenses. We will enhance these further from the start of next year. We will extend means tested preschool subsidies to more families by raising the monthly household income threshold to $15,000. This will benefit more than 60,000 families.

Eligible parents, including those who previously qualify, can also receive more in infant care and child care subsidies. We will also strengthen support for student care. We will raise the monthly household income threshold for student care fee assistance to $6,500 so that more families can qualify. And beyond these enhancement, we are undertaking a holistic review of the student care sector to study how to better meet the caregiving needs of families with primary school age children. We will continue to help lower income families, especially those with young children, move towards greater stability, self-reliance, and social mobility. We take a family centric approach to support such families.

Under COML Link Plus, each family is paired with a dedicated family coach who works with them to develop personalized action plans and to coordinate support to recognize and reinforce the family's own efforts. We introduced progress packages. These are more than financial assistance. They are a form of social contract where family coaches work with their families to set clear goals like securing a stable job, saving towards a home or ensuring their children enroll in and attend preschool regularly. And when these milestones are achieved, the families receive additional payouts. Take Madame Hurul and Mr. Huffis for example. They had taken important steps on their own to stabilize their finances. What they needed was sustained guidance and support to keep moving forward.

With support from their family coach and through their own hard work, they have made good progress over the past year. And through the progress packages, their financial circumstances have improved and they are now closer to securing their own four room HDB flat. Coming plus is built around closed and sustained support for families. It relies on dedicated family coaches, case workers from family services center and volunteer befrienders who work directly with families to help them make steady progress. Over time, we have strengthened our capabilities on the ground and we are now ready to enhance the Comlink Plus progress packages. Uh first we will provide a new payout of $500 per quarter for all comling plus families who make a commitment to work with family coaches and take active steps to make progress.

Second, we will enhance the additional payouts that families receive when they make concrete progress in their goals of maintaining stable employment and good preschool attendance for their children. Third, we will provide more of these payouts in cash while continuing to set aside monies in their CPF accounts. This will help families meet immediate needs while also building their longerterm financial security. With these enhancements, a family with two children under COML link plus can receive around $10,000 per year in cash and CPF topups while their children are in preschool. And we hope this will provide them with the necessary support to stabilize their finances and secure a better life for themselves and their children.

The Minister for Social and Family Development will provide more details of these changes at the committee of supply. We will also do more for persons with disabilities as well as their families and caregivers. Minister of State Gpein is leading a task force to review how we can provide more meaningful support at different life stages for persons with disabilities and their families. This includes expanding capacity in community-based facilities, keeping services affordable, and supporting graduates of special education schools to secure meaningful employment and live well in the community. We look forward to the recommendations of the task force. Strengthening support for persons with disabilities is a key priority for the government and a shared responsibility for all of us.

So the government stands ready to set aside additional resources to advance these efforts. As our population ages, we will also provide more support for our seniors so they can age with dignity, security, and peace of mind. Uh we recently enhanced cash shield life to provide higher payouts, giving seniors greater assurance against long-term care cost. We also increased cash shield life premium subsidies to help cushion the impact of the higher premiums. I will top up the long-term care support fund by $400 million to fund the additional subsidies. With longer lifespans, retirement adequacy is another major concern for many Singaporeans. Our aim is clear. Singaporeans who work and contribute to CPF consistently should be able to meet their basic retirement needs with confidence.

And over the years, we have enhanced the CPF system to achieve this. We introduced silver support to uplift seniors with less means and the modula package to give additional assurance to our young seniors as they approach retirement. In this budget, we will take further steps to strengthen retirement supports. First, we will provide a CPF top up of up to $1,500 for Singaporeans aged 50 and above and with CPF retirement savings below the basic retirement sum. Those with lower balances will receive larger topups so that support is targeted at where it is most needed. Second, we will proceed with the next step of plan CPF contribution rate increases for senior workers in 2027. This will help older workers build up their retirement savings in their later working years.

The government will also continue to provide the CPF transition offset to employers, covering half of the increase in employer contributions for 2027. Third, we will offer more investment options for CPF members who wish to grow their savings further. Today, the CPF system provides stable risk-free interest rates to help Singaporeans build up their retirement nest egg. With the extra interest that CPF offers, CPF members can earn up to 6% peranom risk-free on their CPF balances. Some CPF members, especially those with a longer runway to retirement, are prepared to take more risk to generate potentially higher returns. But experience shows that most people do not do well picking and trading individual stocks. It is very hard to beat the market consistently.

For retail investors, a more sensible approach is broad and diversified exposure through lowcost funds. But even then, risk remain because some may invest when the markets are high and retire during a downturn precisely when they need their savings. And that's why the CPF advisory panel earlier recommended introducing a lifetime retirement investment scheme. This is essentially a life cycle investment approach with a predefined glide path to retirement. In other words, members take on more risk with greater exposure to equities when they are younger and their investments are automatically rebalanced towards safer assets as they approach retirement. We studied this recommendation carefully. Currently such life cycle investment products are available in the market but they have traditionally come with high fees.

So rather than leave this entirely to the market, the government will help shape and develop such products under a new scheme for CPF members. Later this year, CPF board will engage the industry and invite expressions of interest from potential providers. A key requirement will be that the fees are kept low. We will select two to three credible providers to keep choices simple for members. The government will also be prepared in principle to provide some timelmited support to kickstart the scheme. Participation in the new investment scheme will be voluntary. CPF members can choose whether to opt in. At the same time, we will strengthen efforts to help members understand whether this option is suitable for them.

In particular, for members who are younger and have a longer runway to retirement and who can better ride out short-term market fluctuations. I've set out the broad framework today, but there are still many details to work out and MOM and CPF board will share more when ready. The government will continue to do whatever is necessary to help Singaporeans manage cost pressures for as long as it is needed. Although inflation has eased in recent years, we know that many Singaporeans still face anxieties and pressures. So, we will continue to provide additional support this year. First, I will provide a cost of living special payment comprising $200 to $400 in cash to Singaporean adults earning up to $100,000 in accessible income and who do not own more than one property.

Second, there will be additional Usafe rebates to help households with their utilities expenses. Eligible HDB households will receive 1. 5 times the regular amount of USAF rebates or up to $570 this financial year. Third, I will provide another $500 in CDC vouchers. This will be for all Singaporean households in January 2027. Similar to previous rounds of CDC vouchers, half can be used at participating supermarkets while the other half can be used at participating heartland merchants and hawkers. Mr. Speaker, we will continue to review and enhance our social support system across education, housing, health care and retirement and for different groups be it families, parents, seniors, persons with disabilities or caregivers.

We will keep working at this steadily and responsibly so that Singapore remains an inclusive and united society and a place that we are all proud to call home. Next, let me touch on our security challenges as well as our longerterm sustainability concerns. The world has never been free of conflict, but in recent years, it has become more dangerous. In 2024 alone, there were 61 state-based armed conflicts worldwide, the highest number recorded since the Second World War. The conflicts are not confined to distant regions. Closer to home, we witnessed one of the most serious armed clashes involving ASEAN member states in years. A long-standing border dispute between Cambodia and Thailand escalated into an open military confrontation. Drones, rocket launchers, and even fighter jets were deployed.

Civilians were wounded, displayed, and lives were lost. These developments are deeply troubling. They reflect a shrinking space for negotiation, a greater willingness to use force, and a higher risk of miscalculation with consequences that can easily spill across borders. History has taught us a hard lesson. No one will come to our rescue if Singapore faces a crisis. We alone are responsible for our defense and survival. And that's why we must stay vigilant and be prepared for a wider range of security challenges and threats. Since independence, we have invested steadily to safeguard Singapore's peace and stability that's allowed us to adopt new technologies and build credible and strong capabilities in both the SAF and the home team. The recent conflicts we see around us underscored how the nature of warfare is changing.

Unmanned area systems are now a common feature of modern conflict. They are used not only for surveillance, but also for precision strikes, electronic warfare, and coordinated operations. Drones are cheaper, more accessible, and increasingly sophisticated, allowing even smaller actors to project force in new ways. We will study these developments carefully. We will invest decisively in capabilities that are essential to Singapore's defense. And that includes strengthening our ability to deploy, counter, and operate alongside unmanned systems across all domains. Beyond the physical battlefield, the digital domain has emerged as an increasingly contested arena. We are seeing a sharp rise in attacks by both state sponsored and non-state actors in cyber space.

They range from scams targeting individuals to highly sophisticated attacks on critical information systems. Singapore is an attractive target. We have faced attacks from malicious cyber actors including hostile information campaigns and deliberate attempts to undermine our national security. Over the years, we have strengthened our defenses. We established the cyber security agency, built expertise within the home team science and technology agency, and stood up the digital and intelligence service in the SEF. These efforts have enabled us to detect, disrupt, and fan off many attacks. But the threat landscape continues to evolve with attacks becoming more frequent, more coordinated, and more sophisticated.

We will therefore continue to strengthen our cyber security posture by deepening capabilities, improving coordination across agencies, and better safeguarding our most critical systems. It is also no longer sufficient to defend government systems alone. Many private sector companies play a critical role in delivering essential services and their systems are likewise vulnerable. The attackers often exploit smaller or less protected companies as weak links to gain access to larger systems and cause widespread disruption. Yet, many companies lack the resources or the expertise to deal with these advanced cyber threats. So, we will deepen partnerships with industry, especially owners of critical information systems to improve our preparedness and strengthen our collective cyber defense.

All this underscores the importance of sustained investments in our security. For now, we expect to keep defense spending at about 3% of GDP. But we are prepared to spend more if the need arises. Importantly, our security effort goes beyond Mindaf alone. It also includes investments in the security of our critical infrastructure and in the home team. Taken together, we expect overall security related expendure expenditures to rise in the coming years to keep Singapore safe and secure in a far more complex threat environment. Beyond immediate security threats, we must also confront a longerterm challenge to Singapore, and that's the growing impact of climate change. We are already feeling its effects. higher temperatures, heavier rainfall, and more frequent extreme weather events.

Unfortunately, global momentum on climate action has slowed. At the 30th conference of the parties in Brazil last November, countries were unable to agree on concrete decarbonization road mapaps. At around the same time last year, the International Maritime Organization delayed adoption of its net zero framework because member states could not reach consensus. Some governments are scaling back their climate ambitions. But for Singapore, retreating from action is not an option. We will continue to do our part not only to address climate risk but also to secure our longerterm resilience and competitiveness. A key pillar of our climate strategy is the carbon tax. It sends a clear price signal to encourage to encourage emissions reductions. This is already having an impact.

Firms are investing more in lowcarbon solutions and improving energy efficiency. We had earlier announced our carbon tax trajectory for this decade. The tax has just been raised to $45 per ton for this year and next. And the plan is to reach $50 to $80 per ton by 2030. For HDB households, the additional Usafe rebates that I highlighted earlier will help to cushion the impact of the carbon tax. For businesses, we will extend the energy efficiency grant and support for green loans under the enterprise financing scheme. This will help firms invest in energy efficient and sustainable solutions. While Singapore will continue to contribute responsibly to climate action, we recognize that our actions alone cannot determine global outcomes.

We will therefore calibrate our moves cautiously, doing our part to reduce emissions as a responsible global citizen while taking into account what other countries are doing in order not to put ourselves at a competitive disadvantage. So beyond 2027, we are assessing Singapore's carbon tax trajectory carefully in light of international developments. Singapore already has the highest carbon tax rate in the whole of Asia. If global climate momentum continues to weaken, we may need to position ourselves towards the lower end of the $50 to $80 per ton range by 2030. Looking further ahead, our path to net zero will depend heavily on technological breakthroughs and sustained international cooperation. Without these, it will be increasingly difficult for a small resource country like Singapore to move further on our own.

The progress of our transition to net zero may therefore be uneven, but our efforts will be credible, forward-looking, and aligned with global realities. And even amidst these uncertainties, we continue to make concrete progress. For example, on clean energy, our sustained push to expand solar deployment is delivering results. We have reached our 2030 solar deployment target of 2 gawatt peak ahead of schedule. We will therefore raise the target to 3 gawatt peak by 2030. Beyond that, we will continue to maximize solar deployment across all viable surfaces and progressively set more ambitious targets further into the future. We are also advancing plans to import lowcarbon electricity from the region. They are at various stages of de development.

While not all will materialize, those that do will help to reduce our carbon footprint and strengthen our energy resilience. Importantly, we are actively pursuing possibilities to further diversify our energy mix. Be it through hydrogen, geothermal energy or civilian nuclear power. We are building up capabilities in nuclear energy to be able to assess its safety and viability for Singapore. We have initiated cooperation with the US and France and are discussing similar arrangements with other partners like South Korea. In transport, we remain committed to achieving 100% cleaner vehicles by 2040. Incentives are in place to encourage early adoption of electric vehicles and charging infrastructure is being expanded nationwide. We are also greening our aviation and maritime sectors.

In aviation, we are supporting demand for sustainable aviation fuel with a target of 1% sustainable fuel use for flights departing Singapore this year. In shipping, we are partnering industry to develop a lowcarbon ammonia bunkering solution on Jurong Island. If successful, Singapore will be amongst the first countries in the world to supply ammonia commercially as a fuel for international shipping. Sir, the years ahead will be beset by uncertainties from geopolitical tensions to cyber threats and climate risk. We will face these challenges squarely and overcome them one by one. And that's how we will move forward steadily and decisively to build a safer and more sustainable home for generations to come. Singapore's greatest strength lies not just in our policies and plans, but in the spirit of our people.

Time and again, we have defied the odds, not by chance, but by standing together as one people, especially in our most testing moments, whether it be separation or financial crisis or the current geopolitical uncertainties. Around the world, we see growing polarization and a tendency for groups to turn on each other. Many societies are becoming more divided and more ungovernable. We cannot let this happen in Singapore. And so in this budget, we will continue to invest in renewing and strengthening the bonds that bind us. Our shared bonds are strong today, but they were not formed overnight nor by chance. They were built patiently and deliberately generation after generation. Our arts and heritage play a vital role in this journey.

They help us understand where we came from, express who we are today, and imagine who we we can become as a people. Multiculturalism is a defining part of our identity. We cherish and embrace our distinct cultural traditions and heritage even as we continue to build common ground and a shared identity that unites us as Singaporeans. Our cultural and heritage institutions embody this approach, celebrating the richness of each community while expressing our distinctive Singaporean identity. We will continue to strengthen these institutions. We will open the revamp Malay Heritage Center later this year. We will work with the Singapore Chinese Cultural Center to expand its reach and engagement. The Indian Heritage Center just marked its 10th anniversary and we will provide further support to enhance its outreach and programming.

Sport is another powerful force that brings Singaporeans together. Through sport, we learn resilience, teamwork, and the determination to press on even when the odds are stacked against us. We will continue to roll out the sports facilities master plan so that Singaporeans can more easily access affordable and quality sports facilities. In the coming years, we will open the new Pongol Regional Sports Center, the Topayo Integrated Development Sport facilities in Farah Park and Tonga as well as revamp sport centers in Hawang and Queentown. We will also expand the dual use scheme so that Singaporeans can conveniently access sports facilities in schools. And we will complement these facilities with more sports programming, bringing Singaporeans of all ages and abilities together through shared participation.

On the foundation of our shared bonds, we must continue to nurture a strong sense of solidarity. We see this in giving, volunteering, and everyday acts of kindness. These actions break down barriers, draw us closer, and remind us that we are all in this together. They form the foundation of a we first society. The government will do our part to encourage and support this. Today we provide 250% tax deductions for qualifying donations to institutions of a public character or IPC's and eligible institutions. We will extend this scheme for another three years until end 2029. Beyond financial contributions, many Singaporeans give something equally valuable, their time and skills through volunteering. This spirit of giving can be strengthened when companies make it easier for their employees to serve the community.

And that's why MCCY and the National Council of Social Service have been working closely with professional groups and industry bodies to encourage businesses to integrate giving, volunteering, and socially responsible practices into their operations. To support these efforts, the government earlier introduced a corporate volunteer scheme which provides 250% tax deductions when employees volunteer or are secounded to IPC's. We will extend this corporate volunteer scheme for another 3 years until end 2029. Singaporeans also contribute by starting groundup initiatives to meet community needs. The government supports such efforts through the Our Singapore fund. Since its introduction in 2016, the fund has supported over 800 groundup projects from community building and sports to municipal and digital readiness initiatives.

One example is Little Hands Big Hearts SG. It's an initiative by Kaizen and Kay, aged seven and nine, together with their parents to involve others in monthly community service projects. Their first project focused on fire safety awareness. They designed a poster and worked with the Nissun Town Council to display it at HDB lift lobbies. They also brought other children and their families to visit Isun Fire Station where they presented care packs and handmade gifts to the officers on duty. They have more projects in the pipeline from a beach cleanup and support for seniors to donating school supplies to children and writing appreciation cards to our migrant workers. It's a wonderful example that shows anyone, no matter how young, can step up to make a difference. Last year alone, the our Singapore fund received more than 250 applications.

At the same time, we've heard feedback on how the fund can be improved, including the need for larger grant amounts, longer funding horizons, and broader eligibility. So, we will launch a new $50 million SG partnerships fund. This is to catalyze groundup initiatives and help them build sustained capabilities and impact. The new fund will provide differentiated tiers of funding over different time frames, including grants of up to $1 million for larger multi-year projects. We will also continue to partner our youth and open up more avenues for them to shape Singapore's future. Youth panels have enabled young Singaporeans to work with the government on issues that matter to them. In the first round, 120 youths contributed across four panels.

We will launch a next round of youth panels later this year, enabling more young people to step forward and make a difference. The acting minister for culture, community, and youth will share more details on these initiatives at the committee of supply. Sir, our forefathers understood that Singapore's success will ultimately depend on unity, not just shared prosperity, but also shared responsibility. This conviction is captured in our pledge which begins with we and affirms that we are one united people. That sense of togetherness has carried us through uncertainty and brought us this far. If we continue to invest in one another, strengthening our bonds, looking out for those around us, and putting the common good first, we can face the future with confidence and build a Singapore that endures and thrives.

Now, let me touch on our fiscal position. Our prudent fiscal approach remains one of Singapore's core strengths. We manage our public finances with discipline and care, ensuring that revenues are sufficient to meet expenditures and that every dollar is used responsibly for the benefit of both present and future generations. The changes we made in the last term of government have put Singapore on a healthy and sound fiscal footing. We have a tax and transfer system that is fair, progressive, and anchored on shared responsibility. And that gives us the capability and the confidence to move forward. This year I will adjust vehicle taxes. Currently tax car buyers are taxed through the additional registration fee to encourage timely renewal of the vehicle population so that it is safer and less pollutive.

We provide a preferential additional registration fee or path rebate for cars dregistered by their 10 fear. This is sized as a percentage of the additional registration fee paid. Electric vehicles are less pollutive than conventional petrol cars and as EVs become more common, the need to encourage early dregistration through path rebate is reduced. Therefore, I will reduce the path rebate by 45 percentage points. I will also lower the path rebate cap from $60,000 to $30,000. And this will apply to all cars registered with certificates of entitlement obtained from the next bidding exercise. Next, to encourage discourage to discourage the consumption of tobacco products, I will implement a 20% increase in tobacco excise duty across all tobacco products with effect from today. The details of these tax changes are in the NX.

So, let me summarize our fiscal position for financial year 2025. We expect higher revenues. This is partly due to the better than expected economic performance which I shared earlier. Another key driver is the increase in our corporate income tax collections. In financial year 2024, corporate income tax contributed 4% of GDP and that was significantly higher than in past years. I talked about this in our last budget. Based on the latest estimates, we expect corporate income tax collections to increase further in FY 2025. We also saw higher asset related revenue collections such as vehicle quota premiums and stamp duty driven by strong demand for private vehicles and properties. Therefore, I expect to end FY2025 with a surplus of 15. 1 billion or 1. 9% of GDP. For FY 2026, I expect a smaller surplus of $ 8. 5 billion or 1% of GDP.

Our approach remains to keep the budget balanced over time and across the ups and downs of the economic cycle. Looking beyond this budget, our public finances remain sound and resilient. On the revenue side, we will proceed with the implementation of the topup tax under pillar 2 of BPS. This will raise the effective tax rate for large multinational enterprises operating in Singapore to 15%. So, we expect higher corporate tax collections from FY 2027 onwards. At the same time, our spending needs will grow across multiple fronts. First, on external relations and security, we will need to invest more in expanding our overseas partnerships and in building up deeper capabilities to keep Singapore safe and prepared for emerging threats.

Second, on the economic front, even with the beeps initiative, many other countries are rolling out generous incentives to reshore and onshore major investments. That is the reality of today's competitive landscape. To remain attractive and stay in the game, we must update and strengthen our investment promotion toolkit. And that's one reason why MTI's expenditure has risen sharply in this budget and why it is likely to remain elevated in the years ahead. Third, on social needs, we had anticipated higher spending for health care and provided for it through the GST rate increase. But health care is not the only social need we must address. We also need to strengthen assurance for families, enhance social mobility, and boost retirement adequacy so that Singaporeans can face each stage of life with confidence and peace of mind.

And finally, we must prepare for longerterm challenges. We have set aside resources through specific funds for major future needs, including critical infrastructure investments for our energy transition and coastal protection. And in this budget, we will make further top-ups to the relevant funds to support the development of Changi Airport as well as our longerterm economic strategies. We therefore expect both revenues and expenditures to continue rising. The government will manage this increase carefully, ensuring that spending remains supported by revenues and consistent with our objective of maintaining a balanced budget over the medium term. Sir, our sound public finances give us the ability to act decisively and to invest where it matters most.

This puts Singapore in a very different position from many other countries where governments are constrained by debt and deficit pressures and forced into difficult tradeoffs over what to cut. In contrast, we begin this term of government in Singapore on a firm fiscal footing. We are therefore able to invest meaningfully and responsibly in policies and programs that benefit all Singaporeans now and in the years ahead. Mr. Speaker, Singapore has come a long way from its humble and tumultuous beginnings. I recently visited an exhibition at the National Gallery organized by the founders memorial. It takes us back to Singapore in the 1950s to the 70s and traces how our pioneers forged a shared identity amid diversity and uncertainty.

One display revisits the Anika Ragam Raky or the people's cultural concerts organized by the then Ministry of Culture shortly after we attain self-government. At one of these concerts, Mr. Lee Kwanu addressed the crowd and described Singaporeans as quote not mere spectators but active participants in building a nation that belonged to all. Indeed, Singapore has come so far only because generations of Singaporeans stepped forward. They took responsibility, contributed what they could, and did their part to shape our collective future. That same spirit is alive today, especially amongst our youths. Take for example Auni Noanti Mohamad Zurimi. Auni discovered her passion for volunteering at 15. Together with four friends, she started a nonprofit called Youth Can Do It.

It connects youths with volunteer opportunities across different organizations via Telegram. Now 19 and studying medical biotechnology at Tamasic Poly, she continues to volunteer regularly with her friends, tutoring primary school students from disadvantaged families and cleaning the homes of senior citizens. There's also Shantini, daughter of Subramanyam. From a young age, Shantini helped care for her brother who has cerebral policy and relies on a motorized wheelchair. And that experience instilled in her a deep commitment to serve others. At just 11, she began volunteering at the Sri Narayana Mission Nursing Home. Today at 23 and studying nursing at N US, she leads the operations for project caring hearts, a volunteer initiative that supports paliative patients through befriending programs and community outreach.

Then there is Joseph Dan Kaihing. He first became active in community service while studying electrical engineering at IT College West, volunteering with the hardware network. Two years ago, he joined a nonprofit group as a volunteer to teach migrant workers digital skills. Now 19 and a computer engineering student at Singapore Poly, he remains deeply committed to this cause. Driven by his belief that migrant workers who have contributed so much to Singapore's development also deserve opportunities to upskill and progress. These stories differ in form, but they are united in spirit. They remind us that nation building has never been the work of a few or of one generation alone. It is the cumulative effort of ordinary Singaporeans. Singaporeans who choose in their own ways to step forward and make a difference.

Today, this sense of shared responsibility matters more than ever. We cannot afford to be mere spectators. We must be active participants looking out for one another, strengthening our social bonds and contributing to a Singapore that belongs to all of us. This is the conviction that underpins budget 2026. It is a budget to support Singaporeans today, prepare our society for tomorrow, and enable us to navigate this changed world with confidence. Together, we will secure a stronger, fairer, and brighter future for all. Mr. Speaker, I beg to move.