Budget 2026: Reconciling National Success with Malay/Muslim Economic Realities

Despite Singapore being one of the highest-ranking nations with a competitive economy,¹ a survey conducted by ADP Research (2025) revealed that in 2024, 60% of employed Singaporeans were living paycheck to paycheck.² This was higher than other countries in the region including China, Japan, and Indonesia, and above the Asia-Pacific average of 48%. This was also higher than the percentage of Singaporean consumers who lived paycheck to paycheck, at 53%, back in 2021.³

Singaporeans are increasingly struggling with the cost of living. Against this backdrop, the Budget 2026 aims to provide financial relief to Singaporeans by balancing immediate support with long-term solutions like investments in artificial intelligence (AI) and research under the RIE2030 plan. This year’s Budget marks a clear pivot from Budget 2025, which was focused on stabilising the economy and cushioning businesses and households from high economic demands. In contrast, Budget 2026 emphasises a targeted strategy centred on AI-driven growth, upskilling, and structural resilience.⁴

This article focuses on three out of the six strategies outlined by Prime Minister (PM) Lawrence Wong – career-focused economic wellbeing, Cost-of-Living assurance package vouchers, and AI – and their implications for the Malay/Muslim community in Singapore.

Economic Wellbeing of Malays

In his speech, PM Wong referenced an Occasional Paper released by the Ministry of Finance (MOF) in the same month, February 2026, which revealed insights into Singapore’s progress with inequality, income growth, and social mobility over the past decade. The paper reported that the Gini coefficient based on employment income dropped from 0.409 in 2015 to 0.359 in 2025 after taxes and transfers, underscoring a narrowing inequality gap in the nation.⁵

Despite this, the reality within the Malay/Muslim community appears to differ. According to Census 2020 data, Malays were concentrated in low-income roles with salaries at less than $1,500 a month, while just 23.6% earned above $10,000 – roughly 16.3% lower than the national average.⁶ This highlights a persistent racial income disparity where Malays are overrepresented in lower income jobs and underrepresented in higher income jobs.

In terms of social mobility, the Occasional Paper highlighted that intergenerational progress is evident in most Singaporean families – a high percentage of children earned more than their fathers.⁷ This is consistent with a study conducted by Centre for Research on Islamic and Malay Affairs (RIMA) (2026) on intergenerational mobility within the Malay community. Findings showed that most respondents (90.1%) held Professionals, Managers, Executives & Technicians (PMET) positions than their parents (56.8%) and grandparents (37.8%).⁸ Many (73.4%) also reported that they perceived their financial status to be much better or better than their parents at the same age.

With regard to the drivers of social mobility, both the MOF Occasional Paper and the RIMA study highlighted the imperative role of education. However, while Malays today have attained significant educational mobility in comparison to their parents and grandparents, it was also revealed that Malays still face barriers in attaining social mobility. This included early and compounded financial constraints, structural barriers, gender norms, knowledge deficits on educational pathways or scholarships, and lower returns on educational investments as compared to other Singaporeans.⁹ Therefore, heartening national statistics may not necessarily reflect the full reality of the Malay/Muslim community on the ground – signalling that more concerted efforts need to be made to narrow the gap.

Rising Costs & Cost of Living Concerns

Over the past few Budgets, the government has paired Community Development Council (CDC) vouchers for each household with a Cost-of-Living Special Payment of S$200 to S$400 for eligible adult Singaporeans. In 2025, this came in the form of SG60 vouchers as part of Singapore’s 60^th anniversary celebrations, that encourages spending at local merchants.¹⁰ This blend of cash and voucher-based relief aims to ease everyday expenses, addressing both immediate household needs and broader economic objectives.

How do we make sense of these continued measures despite the claim in Budget 2026 that inflation has eased in recent years? What does it mean for Singaporeans that the median monthly household income surpassed $12,000 in 2025,¹¹ and yet these disbursements are still deemed important and sometimes even necessary for residents to get by?

According to a commentary by Dr Clara Lee, a research fellow at the Institute of Policy Studies Social Lab, cost-of-living anxieties persist because the effects of inflation rarely fall back. While there is a drop in inflation, it does not “undo the cumulative increases of previous years”.¹² Rather, it means that prices are rising slower, and households would still feel the effects of inflation in their consumption. As such, even when economic indicators improve, Singaporeans may still feel the financial strain, as perceptions often lag behind these measures. Lower-income households would continue to benefit significantly from such government transfers, ensuring broader access to essential goods and services.

Additionally, demographic characteristics such as larger household sizes and lower median household income often observed in Malay households as reported in Census 2020,¹³ imply that targeted support remains important for maintaining equitable household well-being across communities. It is also worth noting that the CDC vouchers, despite being announced in the 2026 Budget, will only reach households in January 2027, which could signal a gradual scaling back of such support.

Implications of Artificial Intelligence

Echoing his 2025 National Day Address, PM Wong emphasised the importance of learning AI-related skills and encouraged responsible AI use through government initiatives such as SkillsFuture courses. While acknowledging the worries that Singaporeans had regarding job displacements by AI, as well as misinformation, bias, and the ethical use of such technologies, he urged Singaporeans to respond with resilience rather than fear.

Still, these statements may not adequately address the deeper structural and long-term implications that widespread AI adoption may bring. It is clear that this model of responsible AI usage cannot be extended to every layperson who uses AI tools. According to Milieu Insight (2025), 80% of Singaporeans use generative AI to assist them in daily tasks like searching for information and planning activities.¹⁴ In comparison, the Ministry of Education (2026) revealed that only 105,000 individuals participated in AI-related courses by SkillsFuture in 2025.¹⁵ Although not directly comparable, this suggests that AI users who may not have the interest or ability to take up formal training to learn responsible AI use greatly outnumbers those who do participate in AI-related courses.

That is not to say that there have not been efforts to increase widespread AI literacy among Singaporeans. In the Budget 2026 speech, PM Wong referenced a pilot initiative called Lorong AI, which is a community hub that democratises AI knowledge through community, peer learning, rapid knowledge transfer, and practical application, with the aim of making AI uptake a little less daunting. The term ‘lorong’ itself is an homage to the Malay term for ‘alley’ or ‘lane’, in an attempt to ground something as foreign and new as AI into something more familiar, friendly, and accessible. Lorong AI, launched in early 2025, saw programme attendees who were largely practitioners (60%), while the remaining were “AI-curious”.¹⁶

While these efforts are commendable, they mainly target those who are interested or already in the field. With a wide national shift towards AI, there is an urgent need to ensure more widespread AI literacy to avoid a widening divide between those who can navigate AI technologies and those who are unable to, which may ultimately undermine social cohesion. Consequently, the National AI council, helmed by PM Wong, must account for individuals who risk being left behind in this transition.

AI and Islam

An oft-overlooked implication of this move towards AI concerns its intersection with religious ethics and values. Kannike and Fahm (2025) asserted that while Islam places high importance on principles like justice and accountability, AI-driven technologies and surveillance like predictive analysis may invade the principle of amanah (trust) as it collects personal data without explicit user consent.¹⁷ Without clearly communicated ethical guidelines, users are then exposed to the risk of privacy violation and data mining.

A paper by the Research Programme in the Study of Muslim Communities of Success (RPCS) (2024) provides a local lens with regard to the usage of AI in religious decision-making, arguing that generative AI lacks niyyah (intention), accountability, and religious authority, and therefore must remain a secondary tool where the outputs are backed by other traditional sources.¹⁸ Another concern was the risk of using unreliable and secular sources to answer religious questions posed by users, thereby propagating misinformation. These religious ethical concerns may extend to the broader Muslim masses who use AI tools for everyday tasks. Without proper verification and literacy skills, users are exposed to the same vulnerabilities posed by these tools and a violation of Islamic principles like amanah and privacy.

In addition, environmentalists have raised sustainability concerns posed by AI, positing that data centres require large amounts of raw materials while producing substantial electronic waste and greenhouse gases – issues that will only continue to worsen as AI use increases.¹⁹ This directly contravenes Islam’s warning against harm on earth, urging humans to maintain peace and ecological balance: “And do not cause corruption upon the earth after its reformation” (Quran 7:56).²⁰ A khutbah, or religious Friday sermon, by the Islamic Religious Council of Singapore (MUIS) in 2025 addressed this issue, stating that “[…] a significant amount of water and energy is used to cool AI servers. Yet, we find ourselves using it frequently without much thought.” ²¹ The sermon reminded Muslims that the environment also pays a price with frequent AI use, and as the khalifah or stewards of the Earth, we can be more mindful in our use of digital technology and “strive to regain our independence by reducing our reliance on it”.

Besides physical environmental harm, AI has perpetuated “digital corruption” that violates human trust and security, both of which violate Islamic principles.²² While the proliferation of AI cannot be stopped, it is both the users and developers’ responsibility to use and produce AI in an ethical and sustainable manner. This was echoed by panelists in a fireside chat on AI among the Malay/Muslim community held by AMP Singapore, a non-profit organisation serving the Muslim community.²³

Additionally, Budget 2025 had affirmed the government’s commitment to a green and sustainable Singapore by introducing initiatives by targeting a reduction of carbon dioxide emissions to 45 – 50 million tonnes by 2035 and achieving 100% cleaner energy vehicles by 2040.²⁴ The shift towards AI-driven growth in Budget 2026 presents new environmental demands that may not be fully reconciled with those goals. Addressing these implications would ensure that technological growth remains aligned with Singapore’s long-term climate objectives, and to ensure consistency with previous Budget speeches.

Concluding Thoughts 

Budget 2026 aims to create a more resilient Singapore, including through AI and accompanied structural growth. To ensure that this transition is effective across all sectors of society, national strategies must account for specific socio-economic and ethical considerations of the Malay/Muslim community. While national statistics may show overall progress, the community’s distinct income patterns and household structures necessitate a targeted approach to both financial relief and technological upskilling. Additionally, integrating Islamic ethical principles regarding accountability into AI frameworks can enhance community confidence in new technologies. Ultimately, the effectiveness of this budget will depend on its ability to turn national AI and economic strategies into accessible opportunities for every segment of the Singaporean population.

The article was updated on 18 May 2026 to clarify data on Malay households.

1. EDB Singapore. (2020). Singapore retains top spot as world’s most competitive economy. https://www.edb.gov.sg/en/business-insights/insights/singapore-retains-top-spot-as-world-s-most-competitive-economy.html ↩︎
2. Shan, L. Y. (2025). In one of the world’s most expensive cities, more workers are living paycheck to paycheck. Consumer News and Business Channel. https://www.cnbc.com/2025/08/14/singapore-savings-more-singaporeans-living-paycheck-to-paycheck-cost-of-living.html ↩︎
3. L’Hostis, A. (2021). Where do Singaporean consumers stand on the financial well-being spectrum?. Forrester. https://www.forrester.com/blogs/where-do-singaporean-consumers-stand-on-the-financial-well-being-spectrum/ ↩︎
4. Ministry of Finance. (2026). Budget 2026: Securing Our Future Together in a Changed World.  https://www.singaporebudget.gov.sg/budget-speech/budget-statement/a-introduction#Introduction ↩︎
5. Ministry of Finance. (2026). Income Growth, Inequality, and Social Mobility Trends in Singapore: Ministry of Finance Occasional Paper. Singapore. ↩︎
6. Centre for Research on Islamic and Malay Affairs (RIMA). (2026). Intergenerational Mobility of the Malay Community in Singapore. [Unpublished report] Singapore: Centre for Research on Islamic and Malay Affairs (RIMA). ↩︎
7. Ministry of Finance. (2026). ↩︎
8. Centre for Research on Islamic and Malay Affairs (RIMA). (2026). ↩︎
9. Ibid. ↩︎
10. Tan, A. (2025). Budget 2025 seen benefiting banks, retail, new energy, AI, underpinning SGX. The Straits Times. https://www.straitstimes.com/business/singapore-budget-2025-seen-benefiting-banks-retail-new-energy-ai-underpinning-sgx. ↩︎
11. Tan, T. (2026). Median household income in Singapore in 2025 crosses $12,000 mark for the first time. The Straits Times. https://www.straitstimes.com/singapore/median-household-income-crosses-12000-mark-for-first-time-in-2025 ↩︎
12. Lee, C. (2026). Commentary: Budget 2026 – why CDC vouchers are still given in a time of economic recovery. Channel News Asia. https://www.channelnewsasia.com/commentary/cdc-voucher-budget-2026-singapore-cost-living-support-5930371 ↩︎
13. SingStat. (2020). Census 2020. https://www.singstat.gov.sg/-/media/files/publications/cop2020/sr2/findings2.pdf ↩︎
14. Sofia, N. (2025). 80% of Singaporeans use AI daily but few trust it for finance or mental health, survey finds. Tech EDT. https://www.techedt.com/80-of-singaporeans-use-ai-daily-but-few-trust-it-for-finance-or-mental-health-survey-finds#google_vignette ↩︎
15. Ministry of Education (2026). Take-Up Rate of Skillsfuture-Supported AI-Related Training Course. https://www.moe.gov.sg/news/parliamentary-replies/20260203-take-up-rate-of-skillsfuture-supported-ai-related-training-course ↩︎
16. Koh, S. (2026). Lorong AI: Collaborative hub sets blueprint for Singapore’s future AI park in one-north. The Straits Times. https://www.straitstimes.com/tech/lorong-ai-the-blueprint-for-singapores-future-ai-park-in-one-north ↩︎
17. Kannike, U. M. M. & Fahm, A. O. (2025). Exploring the Ethical Governance of Artificial Intelligence from an Islamic Ethical Perspective. Jurnal Fiqh, 22(1), 134-161. ↩︎
18. McGrail, J. (2024). AI, Authority, and Intention in Religious Decision Making. Insights and Perspectives. Singapore: Research Programme in the Study of Muslim Communities of Success (RPCS). ↩︎
19. United Nations Environment Programme. (2025). AI has an environmental problem. Here’s what the world can do about that. https://www.unep.org/news-and-stories/story/ai-has-environmental-problem-heres-what-world-can-do-about ↩︎
20. Rafikov, I. (2025). Advanced AI and the Moral Challenge: An Islamic Perspective. 
    Maqasid. https://maqasid.org/blog/advanced-ai-and-the-moral-challenge-an-islamic-perspective/ ↩︎
21. MUIS. (2025). Our duty as Khalifah on Earth.
     https://www.muis.gov.sg/resources/khutbah-and-religious-advice/khutbah/our-duty-as-khalifah-on-earth-/ ↩︎
22. Rafikov, I. (2025). ↩︎
23. Sanep, S. (2026). “Kopi with AI” AMP Perkasa Karyawan Muda Muslim Manfaatkan AI, Rangsang Pembangunan Kerjaya. BERITA Mediacorp. 
    https://berita.mediacorp.sg/singapura/kopi-ai-amp-perkasa-karyawan-muda-muslim-manfaatkan-ai-rangsang-pembangunan-kerjaya-1003846  ↩︎
24. Ministry of Finance. (2025). Budget 2025: Onward Together for a Better Tomorrow 
    https://www.mof.gov.sg/budget-archives/budget-2025/ ↩︎