Budget 2026 debate: PM Wong defends fiscal projections, GST hike amid back-to-back surpluses

“For a small open economy, like Singapore, growth outcomes can diverge significantly from forecasts as global conditions evolve. Because we are so dependent on the external environment, forecasting Singapore’s GDP growth is like forecasting the world’s GDP growth, which is very, very difficult to do,” he said.

Revenues from property transactions or Certificate of Entitlement premiums are inherently difficult to predict, he added.

“But I assure everyone in this House and Singaporeans that our approach has been and will be responsible and professional,” he said.

NOT DOOM AND GLOOM

In his speech, Mr Wong also addressed an insinuation that the People’s Action Party government “deliberately painted a doom and gloom picture for electoral advantage”.

WP chief Pritam Singh had in his Budget debate speech taken aim at the timing of the last General Election, saying it was called shortly after global trade tensions flared.

“The political timing of the General Election was calculated to put the PAP in the most advantageous position, with tariff uncertainty serving as a rallying call for voters to back the tried and tested,” Mr Singh had said.

Mr Wong said that after the US Liberation Day tariffs, there was widespread uncertainty across the world, and the government had to move quickly.

“How many analysts projected 5 per cent growth for Singapore in 2025? I don’t recall any. The reason why things did not turn out as badly as we feared was partly due to factors beyond our control, but also partly because of the decisive steps we took,” he said.

Efforts to engage the US to safeguard Singapore’s core interests, deepen links with other countries, and forge new agreements that sustain investor confidence deserve recognition, said Mr Wong.

“So let us not belittle these contributions just to score a political point. The fact that we are in a better position today than our projections is something we should all welcome. It’s good news for Singapore and Singaporeans,” said Mr Wong.

He said that if the government had chosen back then not to raise GST and hoped for revenue upsides, and the economic situation then did not turn out well, “we would be having a very different debate today”.

“We will be scrambling to close fiscal gaps. We will be responding from weakness. But because we made the difficult yet responsible decision, because we chose responsibility over convenience, we are now in a position of strength,” he said.