PAP MPs believe Budget 2026 demonstrates fiscal discipline. This budget surplus will help Singapore navigate an increasingly volatile world and address long-term challenges.
During the budget debate on Feb 24, PAP MPs cited rising global uncertainty from geopolitical tensions. They urged prudence in spending regarding the unexpected $15 billion surplus for the 2025 financial year.
In his Budget speech on Feb 12, Prime Minister and Finance Minister Lawrence Wong said that this surplus was driven by a better-than-expected economic performance – the economy grew 5 per cent – as well as an increase in tax collections.
Saktiandi Supaat (Bishan-Toa Payoh GRC), who chairs the Government Parliamentary Committee for Finance and Trade and Industry, noted that residents had asked him why there were not more “goodies” considering the Budget surplus.
While this is an understandable question, unexpected developments such as geopolitical tensions or trade disruptions can quickly affect growth and revenue, he added.
“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,” Mr Saktiandi said. “We must also not make the mistake of assuming that the profit cycles will always remain in Singapore’s favour.”
Yip Hon Weng (Yio Chu Kang SMC), Chair of the Defence and Foreign Affairs GPC, said that Singapore’s prudence was an asset as it gave the country options to act in times of uncertainty.
“In a more dangerous world, fiscal strength is national defence. Our buffers are not excesses. They are strategic insurance,” he said. “It ensures we are not forced into decisions by constraint. It preserves our strategic autonomy when circumstances demand it.”
Alex Yam (Marsiling-Yew Tee GRC), who chairs the GPC for Culture, Community and Youth, also said such surpluses give Singapore more “ammunition” to face an uncertain world.
“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,” Mr Yam said in Mandarin.
“If the next storm arrives, we will not need to borrow in haste, raise taxes suddenly or cut social support,” he added.
Singapore announced a significant $15.1 billion budget surplus for FY2025, driven by higher-than-expected corporate taxes and strong economic growth.
GST revenue differs from fiscal surplus: Alex Yam
Some people have questioned government’s need to raise the Goods and Services Tax, in light of surpluses.
Mr Yam clarified that GST serves as a long-term structural revenue source, which differs from a fiscal surplus that is largely cyclical. He emphasised that the government cannot fund long-term responsibilities with short-term windfalls.
“Using cyclical revenue to fund permanent obligations is akin to using one’s bonus to pay a housing mortgage,” he said. “Singapore’s fiscal philosophy has always been simple: plan early, act prudently, and share gains when conditions allow.”
Surpluses can be used to better support S’poreans, say MPs
Shawn Loh (Jalan Besar GRC) proposed a surplus sharing mechanism that would return any fiscal surpluses above 2 per cent of GDP to Singaporeans the following year.
He suggested several ways to distribute these funds: issuing extra CDC vouchers, making universal CPF top-ups, or providing rebates for services such as transport and utilities services.
“We should assure Singaporeans that when Singapore does well, all Singaporeans will benefit,” he added.
Mr Saktiandi proposed raising the income tax threshold for tax exemptions from $20,000 to $25,000 or $30,000, citing rising median incomes as justification.
Singapore’s median monthly household income rose 6.8 per cent last year to $12,446, up from $11,558 the previous year, adjusted for inflation.
“More low- and middle-income earners enter the tax base not because they are significantly better off, but because the system has not been recalibrated,” Mr Saktiandi said. He added that this change would provide meaningful relief to low- and middle- income groups.
Mr Yip Hon Weng proposed that the Government can signal stability by avoiding further tax increases in the near term.
“I recognise that the Government will, when necessary, need to raise revenue, but where new measures are introduced, they should be calibrated carefully and remain progressive,” he said.
He added that revenue adjustments should account for cost pressures.
PAP MPs call for more support for workers
During the budget debate on Feb 24 and 25, PAP MPs called for greater support for workers in Singapore.
Jessica Tan (East Coast GRC) advocated for faster and dignified support for displaced workers.
“Given the rapid changes, many of my residents have shared their anxieties in finding jobs after their employment is being disrupted after completing their contract or being retrenched,” she said. “Mid-career and senior workers worry about staying employable.”
She outlined ways to shorten unemployment periods. They include earlier notifications to placement hubs, sector-specific placement packs with skills mapping, bridging courses and job fairs, and streamlined access to training and employment support.
Mr Shawn Loh suggested that the government provide a more ambitious jobseeker place-then-train programme. Under this programme, the government would give all employers time-limited salary support to hire any jobseeker who has been actively looking for a job for at least 6 months, regardless of age.
“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…,” he said.
Edward Chia: SME centres can play larger role in accelerating AI adoption
Artificial intelligence has been a key theme in this year’s Budget. Edward Chia (Holland-Bukit Timah GRC), Deputy-Chairperson of the Finance and Trade and Industry GPC, said that many small medium enterprises need support not just in funding but in literacy and practical adoption. Heproposed that SME Centres could play an expanded role in accelerating AI adoption.
“There needs to be faster diffusion of relevant AI tools — clear use cases that SMEs can realistically implement. SME centres play a critical role in cascading schemes, building awareness and guiding adoption,” he said.
“How are SME Centre advisors and consultants themselves being upskilled in AI to support businesses effectively?”
