SBF warns of ‘AI divide’ as Budget 2026 boosts missions

Business group backs National AI Missions as Wong chairs new AI Council.

The Singapore Business Federation stated that approximately 60% of its Budget 2026 recommendations, submitted in collaboration with PwC Singapore, were accepted by the government, whilst warning of an “AI divide” in which larger firms accelerate, and smaller businesses struggle to keep pace.

SBF said Budget 2026 is a “forward-looking and pragmatic roadmap” to strengthen competitiveness and Singapore’s hub status, as it looks ahead to Singapore’s ASEAN chairmanship in 2027.

On AI, SBF welcomed the National AI Missions and the formation of a National AI Council, saying this signals a shift from pilot projects to sector-wide transformation.

It said it will work with tripartite partners and trade associations to translate national objectives into sector-specific pathways.

SBF also welcomed the government’s adoption of its recommendations to enhance the Productivity Solutions Grant and implement sectoral AI pathfinder programmes, which it said would help SMEs diffuse AI and upskill workers.

On internationalisation, SBF welcomed enhanced internationalisation grants, improvements to the Market Readiness Assistance scheme, expansion of the Double Tax Deduction for Internationalisation, and enhancements to the Enterprise Financing Scheme, stating that these measures should help firms enter new markets and pursue cross-border opportunities.

On wages and manpower, SBF backed enhancements to the Progressive Wage Credit Scheme to help defray increases in the Local Qualifying Salary, whilst saying manpower-intensive sectors still need access to foreign talent to transform effectively.

On carbon policy and capital, SBF welcomed what it called a calibrated approach to carbon pricing and an adjustment to the carbon tax trajectory, citing its earlier recommendation to lower the upper target for 2028 to 2030 from $80 to $50 per tonne, and welcomed the extension of the Energy Efficiency Grant and enhanced green financing support.

It also welcomed expansion of initiatives such as Startup SG Equity, whilst calling for more work to uplift financial literacy so firms better understand how to use support schemes.

Separately, Veeam Software said the Budget’s AI push, including a PM-chaired National AI Council and sector missions spanning advanced manufacturing, connectivity, and logistics, signals AI is becoming part of national competitiveness.

Meanwhile, Cloudera said scaling AI will depend on stronger data foundations, especially in regulated sectors handling distributed data across cloud, on-prem, and edge environments.

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