FY2026 MOF Committee of Supply Debate Speech by Second Minister for Finance Ms Indranee Rajah

A.          INTRODUCTION – CREATING A BETTER SINGAPORE THROUGH FINANCE

A1.      Mr Chairman, I thank the members for their cuts.

A2.      Mr Chairman, sound public finance is not just about balanced budgets, fiscal rules and safeguards. For us, it is something more, and that is captured in MOF’s motto which is: to create a better Singapore through finance.

A3.      Nothing gets done without finance. The flip side of this is that public finance has to be handled with great care and responsibility, because how it is used determines how the country moves forward and how the lives of Singaporeans can be improved.

A4.      Hence, let me touch on the principles that underpin our approach to public finance.

a.   First, fiscal prudence and sustainability. We must spend wisely and within our means. This is not only to meet current needs, but also to maximise our fiscal space to seize new opportunities for growth, and have the ability to deal with future challenges or crises;

b.   Second, value for money. Every public dollar represents the hard work of our people, that has been entrusted to the Government to use for the national good. We will continue to achieve more and deliver better outcomes for Singaporeans and Singapore;

c.   Third, finance as a catalyst. Public funding should do more than fill gaps – it should drive new directions, accelerate growth, and unlock momentum. Our goal is for finance to enable impact, and catalyse innovation and transformation.

B.          ENSURING FISCAL PRUDENCE AND SUSTAINABILITY

B1.      We are in a position of fiscal strength today, because of decades of careful stewardship and forward fiscal planning.

B2.      I agree with Mr Lee Hong Chuang that our fiscal decisions today should preserve sufficient buffers and policy flexibility for future generations.

B3.      We regularly review our tax system to strengthen our revenue base to meet rising needs, while ensuring that the system remains progressive. Our tax system is supplemented by the NIRC framework that allows part of our investment returns to be taken into the annual budget in a sustainable way. Taken together, our fiscal system strikes a balance between supporting short-term needs, and growing our reserves in line with the economy to provide a steady stream of income over the long term, as well as acting as a buffer against future shocks.

B4.      As the Prime Minister has mentioned in the Budget debate, our revenue upsides have been used to address both our current and future needs. In addition to permanent schemes, we have provided significant one-off support to Singaporeans in the past few years to deal with cost-of-living pressures, and also funded investments across many areas ranging from social needs to our economy. As announced in Budget 2026, these include additional support for companies, especially our small and medium enterprises (SMEs), to internationalise and build AI capabilities. 

B5.      Ultimately, our revenue and expenditure considerations are anchored on fiscal responsibility. MOF remains committed in ensuring that our current and future needs can be met in a fiscally sound and sustainable manner.

B6.      I thank Mr Edward Chia for his suggestions on stronger shared support to help our Statutory Boards achieve better returns for their reserves.

B7.      Statutory Boards may hold some reserves to support their capital investment and working capital needs. MOF reviews the financial positions of Statutory Boards to prevent excessive build-up of reserves.

B8.      Where Statutory Boards have reserves, they invest their reserves in accordance with their liquidity needs and risk appetites.

B9.      The Accountant-General’s Department (AGD) has developed schemes to allow Statutory Boards to enjoy economies of scale and easier access to appointed fund managers and investment consultants through AGD’s Demand Aggregation Programme. We will continue to review ways to enhance our central support.

C.          DELIVERING VALUE-FOR-MONEY OUTCOMES

C1.      Mr Saktiandi Supaat asked how MOF strengthens programme evaluation, and scrutiny over high-value projects. These processes continue to be key in delivering better, value-for-money outcomes.

C2.      First, we work with agencies on programme evaluation and review. Agencies are required to map how interventions and underlying assumptions translate to the desired outcomes.  Agencies are also required to develop evaluation plans with indicators that track implementation, outcomes, and costs.  Besides enabling systematic tracking through these metrics, the evaluation plans specify clear milestone-based reporting. These help us to understand whether a programme is achieving its objectives, whether improvements are needed, and facilitates resource decisions.

C3.      Mr Saktiandi Supaat also asked if there have been reviews that allow us to re-allocate resources dynamically. As our operating environment changes, MOF works with agencies to redesign programmes and pivot resources to new priorities when appropriate.

a.   The Enterprise Workforce Transformation Package (EWTP) is one example. Technological advancements are increasingly transforming business models and jobs. We saw a need to encourage companies to undertake enterprise and workforce transformation in tandem. However, the support for workforce transformation programmes could be better coordinated and the utilisation of initiatives such as the SkillsFuture Enterprise Credit, or SFEC, improved.

b.   We worked closely with MOM, MOE and MTI to review our existing programmes, and announced the key changes in Budget 2025. This included the SkillsFuture Workforce Development Grant (WDG) that consolidates workforce transformation schemes under a single application channel to provide more holistic support to companies. Under the WDG, we will also provide more support for job redesign. We also worked with MOM to redesign the SFEC to make it easier for companies to use the credits and strengthen incentives for companies to upskill their employees.

C4.      For high-value projects, MOF applies an additional layer of scrutiny across the whole of Government to evaluate their worthiness and cost-effectiveness.

C5.      Specialised committees support the review of big-ticket information and communications technology and smart system (ICT&SS) and cybersecurity projects. Under the Gateway Process, larger-scale and more complex infrastructure projects are reviewed by MOF and the Development Projects Advisory Panel, or DPAP. These committees include independent third parties, such as industry practitioners and experts, with deep technical expertise.

C6.      In 2025, Government agencies, working together with MOF and DPAP, were able to achieve a total cost avoidance of at least $1.4 billion in development costs.

C7.      The Gateway Process remains an integral part of how we ensure value-for-money. As part of our efforts to continuously improve, MOF has recently streamlined the Gateway Process to speed up project approvals while retaining the rigour that has helped us achieve value for money.

D.          USING FINANCE AS A CATALYST FOR INNOVATION AND TRANSFORMATION

D1.      Mr Saktiandi Supaat also aptly spoke about the role of finance as a catalyst.

D2.      Mr Chairman, MOF uses public finance to catalyse growth and innovation. In every Budget, we deploy our fiscal resources strategically to drive effective change – we have invested heavily to build Singaporeans’ long-term capabilities, through lifelong learning and the adoption of artificial intelligence, as well as strengthened our enterprise ecosystem.

D3.      MOF will continue to develop new solutions, working in partnership with the community and businesses, to address current and future challenges.

D4.      An example is how Tote Board supports community-driven innovations in social services, health and community care.

D5.      Last year, we announced the third tranche of the Tote Board’s Enabling Lives Initiative, or ELI, Grant, to support innovation for the disability sector.

D6.      Working with SG Enable, the first grant call has seen a diverse slate of proposals receiving support, ranging from community and independent living initiatives, to training and employment programmes for persons with disabilities.

E.           PROPERTY TAX

E1.      Mr Kenneth Tiong raised a cut on property tax valuation. As I understand it, he is suggesting that the valuation of an owner-occupied residential property for property tax purposes should be derived differently from non-owner-occupied property. His proposal is that while valuation of properties that are rented out should be using Annual Value, or AV, which is based on rental transactions, owner-occupied properties should instead be based on “capital value” derived from sale transactions.

E2.      That would not be an appropriate approach. One should adopt the same valuation basis for all residential properties, regardless of whether it is owner-occupied, rented out or vacant. That is so that there is a common yardstick to assess properties for property tax purposes.

E3.      Having regard to the need for a common yardstick, the real question is whether one should use rental data for all residential properties or sales data for all residential properties. It is not a question of using AV for rental properties, and capital value for owner-occupied properties. So, on this, the use of rental data to determine AV keeps property taxes, which are assessed annually, more stable and predictable for homeowners.           

a.   This is because there are more rental transactions than sale transactions, which provides a more accurate and stable picture of comparable properties to determine the valuation of a given property.

b.   Rents are also generally less volatile and subject to less variability compared to sale prices, as the rents are locked in by the lease agreements over a period of time, and hence they are less impacted by market sentiments and the property cycle.

E4.      So, just because a neighbour may have a better or more nicely developed home that commands a higher rental or AV, does not mean that the neighbour who has a simpler home will have the same AV. Because, obviously, when valuing, adjustments will have to be made to take into account the necessary attributes.

E5.      Next, it is also important to distinguish between the valuation and the property tax rate in the determination of property tax payable.

E6.      While the valuation for all residential properties is determined using a common yardstick, we can and do apply different property tax rates for owner-occupied and non-owner-occupied properties. As a concession to owner-occupied properties, property tax rates for owner-occupied properties are lower compared to non-owner-occupied properties. From time to time, we also provide one-off property tax rebates for owner-occupied properties to help cushion the impact of the property tax.

E7.      This means that the retiree is also not taxed as if he is a landlord while the neighbourhood gentrifies. In any case, shifting to capital value as the basis for property tax assessment does not necessarily lower the assessment. The fact of the matter is that when a neighbourhood is revitalised, the attractiveness of the retiree’s property would increase, and one can expect both rent and sale prices to increase, i.e. both the AV and the capital value will go up.                      

E8.      Mr Kenneth Tiong also cited the use of sales data for sale of State Land. Sales data is appropriate for use where there is a sale of land or property, as sales data would be more directly relevant. This includes the sale of State Land to HDB for public housing development. For AV, rental data is more appropriate for the reasons explained earlier.

F.           CONCLUSION

F1.       Mr Chairman, we are stewards of our reserves, assets, and resources. As Singaporeans, it is our collective responsibility to make the best use of our resources for ourselves and for future generations, just as the previous generations did for us. Let us create a better Singapore through finance together.