12 February 2026
The Singapore National Employers Federation (SNEF) welcomes the support in Budget 2026 to help companies internationalise and harness Artificial Intelligence (AI), but we are cautious about increasing business costs that may affect our economic competitiveness.
Enabling Businesses to Thrive Locally and Internationally
2. SNEF’s 2025 survey1 showed that about 3 in 4 employers surveyed expect to face uncertain business prospects in 2026, and were planning for hiring freezes and wage moderation this year. Therefore, SNEF is heartened that the Government recognises that businesses continue to face cost pressures and operating challenges even though the economy performed well last year. In our Budget 2026 recommendations, we called on the Government to provide continued broad-based cost relief. Thus, the 40% Corporate Income Tax (CIT) rebate for the Year of Assessment (YA) 2026 announced in the Budget will be much appreciated, particularly by businesses with cashflow needs.
3. SNEF appreciates the enhanced support from the Government to help businesses internationalise through the increase in funding levels and enhancements to the Market Readiness Assistance Grant. Employers, especially SMEs, will be able to navigate an increasingly fragmented global economy with more confidence. SNEF is also encouraged by the Government’s plan to set aside $1 billion to enhance the Startup SG Equity scheme to enable the growth of promising startups as this will keep the business scene vibrant and ensure we build a strong enterprise ecosystem.
Harnessing Artificial Intelligence as a Strategic Advantage
4. In our Budget 2026 feedback, SNEF called for greater support for digital transformation and AI adoption. We applaud the Government’s plan to establish a National AI Council to provide strategic direction and drive the country’s AI agenda. SNEF stands ready to contribute to the work of the Council to drive greater adoption of AI within firms.
5. SNEF is also encouraged by the Government’s measures to help employers transition confidently to an AI-enabled economy and overcome the cost constraints and skills gaps, in particular for SMEs. SNEF welcomes the expansion of the Enterprise Innovation Scheme to include AI expenditures as a qualifying activity for YA2027 and YA2028, as well as the broader scope of the Productivity Solutions Grant to support a wider range of digital and AI-enabled solutions. These measures will help defray implementation costs and improve access to ready-to-deploy solutions.
6. SNEF understands the anxieties surrounding AI’s impact on jobs and appreciates Government’s commitment to job redesign, upskilling and reskilling to help workers progress towards higher-value roles. We support the focus on strengthening sector-specific AI capabilities, starting with accountancy and legal professions, and building broad-based AI literacy for students and working adults through provision of six months’ free access to premium AI tools after training. These efforts will empower Singapore’s workforce to thrive in an AI-enabled economy. Singapore’s AI push at the national level would be our key strategic advantage when employers and employees move in concert to take the AI journey forward.
Managing Cost Pressures on Employers
7. SNEF supports the increase in Local Qualifying Salary as a means of uplifting lower-wage workers in Singapore. This is an extension of our work under the Progressive Wage Model (PWM), where tripartite partners have worked closely to negotiate meaningful and sustainable wage growth for lower-wage workers. To help employers defray part of the cost of raising wages for lower-wage workers, we appreciate the extension of the Progressive Wage Credit Scheme (PWCS) and the higher co-funding levels. This is aligned with SNEF’s Budget 2026 recommendations.
8. However, we note that the revised qualifying criteria requiring a minimum wage increase of $200 instead of $100 may limit the scheme’s reach. For sectors such as retail, PWM wage increments are $100-plus per month and will therefore not qualify for the enhanced PWCS support. We request that the Government consider a tiered scheme where wage increases of between $100 to $200 continue to get some level of support.
9. We recognise that adjustments to the Employment Pass and S Pass qualifying salaries and selected Work Permit levies are intended to maintain a high-quality and complementary foreign workforce. However, we expect that many employers will be concerned about the cumulative impact on business costs. We hope the Government will review prevailing economic conditions closer to implementation and consider the implementation timing accordingly. We would also like to reiterate our request for the Government to consider additional flexibilities for employers with progressive employment practices or sector-differentiated flexibilities where appropriate.
Collaborating with New Statutory Board in Workforce Transformation
10. SNEF recognises the increasing need for skills training to translate into job outcomes for Singaporeans and supports the merger of Workforce Singapore and SkillsFuture Singapore to integrate the jobs and skills ecosystem. SNEF looks forward to working closely with the new Statutory Board to deliver more industry-relevant courses to support employers’ workforce transformation and the career health of their employees.
Conclusion
11. Budget 2026 presents a set of balanced and forward-looking proposals to secure Singapore’s future, especially in providing short-term cost pressure reliefs while incentivising employers to continue transforming their business, invest in their people and build a complementary foreign workforce. It has incorporated several key recommendations from SNEF’s earlier Budget recommendations to alleviate costs on employers such as the extension of PWCS, Senior Employment Credit and CPF Transition Offset co-funding. Singapore is also well placed to harness AI as a strategic advantage, and we will play our part to support employers to seize opportunities and drive productivity growth through the adoption of AI. We also look forward to the Committee of Supply Debates for greater clarity on the policy details.
– End –
About Singapore National Employers Federation
The Singapore National Employers Federation (SNEF) is a trade union of employers. Our mission is to advance tripartism and enhance labour market flexibility to enable employers to implement responsible employment practices for sustainable growth. SNEF has a membership of nearly 4,000 companies with around 876,000 employees. For more information, please visit www.snef.org.sg.
