While spending has risen in dollar terms, Singaporeans are also spending less on essentials such as food, public transport and education across all income quintiles, he added.<\/p>\n
But the lived experience of higher costs does matter, said PM Wong, who noted that while inflation caused by the Covid-19 pandemic and the war in Ukraine has moderated, price levels remain high<\/a>.<\/p>\n For instance, food consumption forms a smaller share of income, but high prices are experienced each time one dines out. \u201cThe psychological impact is immediate and visible,\u201d he acknowledged.<\/p>\n To cushion the spike in inflation, the Government provided more than $10 billion through the Assurance Package<\/a>.<\/p>\n Budget 2026 also saw more help given to seniors<\/a>, who have to cope with higher prices on fixed incomes, said PM Wong.<\/p>\n A retired elderly couple will get about $7,600 in social transfers from the Budget, while a lower-income household with young children will get about $5,000.<\/p>\n This is on top of substantial, broad-based subsidies and targeted support for lower-income families, PM Wong said as he rebutted Mr Louis Chua\u2019s (Sengkang GRC) charge that the Government\u2019s primary response has been to rely on one-off handouts.<\/p>\n \u201cHe said that last year, and I had clarified the matter,\u201d said PM Wong. \u201cBut regrettably, he has repeated this false claim again.\u201d<\/p>\n The fact is that only about 5 per cent of the overall Budget is for one-off measures, which was also the case in Budget 2025, said the Prime Minister.<\/p>\n Another driver of costs is manpower, and PM Wong acknowledged that labour costs have indeed risen in recent years.<\/p>\n This was partly due to structural factors such as an ageing population and tighter labour supply, but also the outcome of policies such as the Progressive Wage Model to raise wages at the bottom.<\/p>\n PM Wong said that is the right thing to do, as it narrows wage gaps and strengthens dignity in work. But when wages rise, costs also increase, and that is the fundamental tension every economy must manage.<\/p>\n Some countries suppress service wages to keep prices low, but this traps a segment of workers in low-paying jobs, he noted.<\/p>\n On the other hand, others such as European countries have high wages, but that leads to higher prices, which in turn has to be supported by a large welfare state.<\/p>\n Singapore is forging its own path, pursuing broad-based wage growth where wage increases are supported by skills upgrading and productivity improvements.<\/p>\n At the same time, the Government bears a substantial share of the cost of essential services through subsidies and transfers, with more support for lower- and middle-income households, added PM Wong.<\/p>\n \u201cOverall, this balance has delivered good and affordable services to Singaporeans, at a sustainable cost,\u201d he said.<\/p>\n PM Wong noted that the one category where household expenditure has gone up as a share of income is healthcare, which reflects Singapore\u2019s ageing population.<\/p>\n This is why the Government has provided significant and growing subsidies for healthcare services and for national health insurance premiums, while also taking steps to rein in overly generous private riders and other practices that drive up medical inflation, he said.<\/p>\n \u201cWe will continue to ensure that healthcare remains affordable in Singapore,\u201d he said. \u201cNo Singaporean will be denied the healthcare they need because of an inability to pay. That is our assurance.\u201d<\/p>\n Noting that members such as Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) and Nominated MP Terence Ho had suggested additional asset-based transfers, the Prime Minister said this has been the approach the Government has long taken.<\/p>\n It has done so using mechanisms such as Edusave, the Central Provident Fund and housing policies to enable Singaporeans to accumulate assets, which gives them a concrete stake in the nation\u2019s success, said PM Wong.<\/p>\n Singapore also has progressive taxes on wealth, such as on properties and vehicles, and the Government will continue to study ways to moderate excessive wealth concentration.<\/p>\n But redistribution has its limits, as capital and talent are mobile. Redistribution alone also cannot build a strong and resilient society, said PM Wong.<\/p>\n \u201cIf we rely solely on ever, ever higher taxes, eventually, the broad middle will also have to shoulder the burden,\u201d he said.<\/p>\n Instead, Singapore complements it with heavy investments in human capital \u2013 through early childhood education, quality schooling and lifelong learning.<\/p>\n \u201cUpward mobility remains central to our social compact,\u201d he said. \u201cBecause here in Singapore, your starting point should never determine your finishing position.\u201d<\/p>\n Source: The Straits Times \u00a9 SPH Media Limited. Permission required for reproduction<\/a><\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/02\/b644f9769f10b85c75af4cdca1b3536a.jpeg\"\/)
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