Every year, the Singapore Budget provides guidance on where our country is heading. Some measures sound technical and distant. Others will quickly change the way businesses operate, and may also affect how much we pay as consumers or earn as workers.
In this article, we look at several sectors that could feel the biggest impact from Budget 2026: the automobile industry, marine, F&B, construction and finance.
#1 Automobile Industry
Let us start with the most immediate and most visible impact. The automobile industry.
Today, when you buy a car in Singapore, you already pay a hefty Additional Registration Fee (ARF). To encourage owners to scrap their cars before they get too old and more pollutive, the government offers a Preferential Additional Registration Fee (PARF) rebate if you deregister your car by its 10th year. This rebate is calculated as a percentage of the ARF paid, subject to a cap.
Under Budget 2026, the PARF rebate will be reduced by a whopping 45 percentage points. Additionally, the rebate cap will be reduced from $60,000 to $30,000. This applies to cars registered with Certificates of Entitlement from the next bidding exercise onwards.
Put simply, the amount you can recover when scrapping your car will be much smaller.
Why does this matter?
When people decide whether they can “afford” a car, they do not only look at the sticker price. They also factor in how much they can get back after 10 years. With a lower rebate, the effective long-term cost of owning a car increases.
Even if COE prices and car prices remain the same, the net cost of ownership has increased. Over time, this could dampen demand slightly, or at least force buyers to think harder before committing.
#2 Marine Sector
The marine industry relies heavily on foreign manpower, across both rank-and-file roles and professional positions. Budget 2026 introduces several changes that will raise labour costs.
- The minimum qualifying salary for new Employment Pass applicants will increase from $5,600 to $6,000 in 2027.
- For S Pass holders, it will rise from $3,300 to $3,600.
- Work Permit levies for basic-skilled marine workers will go up by $100.
From a policy perspective, the direction is consistent. The Government wants to ensure foreign workers complement a strong Singaporean core. From a business perspective, however, this means higher operating costs.
Marine firms operate in a global, price-sensitive environment. When labour costs increase, companies typically have four options: absorb the cost, pass it on to clients, automate more processes, or restructure operations by reducing headcount.
Consumers may not feel the impact immediately. But the marine sector supports shipping, offshore engineering and energy-related services. Over time, higher costs here can have subtle effects.
#3 F&B and Construction
F&B and construction face a similar challenge, but with even thinner margins.
Both sectors rely significantly on foreign workers. With higher S Pass qualifying salaries and adjustments to Work Permit levies, manpower costs will inevitably rise. At the same time, the increase in the Local Qualifying Salary (LQS) requires employers to pay their lowest-wage local workers higher wages.
In principle, raising wages at the lower end is positive. It improves livelihoods and narrows income gaps.
However, small restaurant owners, hawkers, and contractors are already facing high rents, rising ingredient costs, and volatile material prices. For them, these manpower changes impose an additional layer of pressure.
In the F&B sector, businesses may respond by reducing staff, increasing productivity, or adjusting menu prices. In construction, contractors may seek higher project bids or invest more in automation and prefabrication.
The trade-off is straightforward: higher wages for workers, but tighter margins and possibly higher prices for everyone else.
#4 Finance
The finance sector faces two shifts.
First, minimum qualifying salaries will rise again. For Employment Pass holders in financial services, the threshold increases from $6,200 to $6,600. For S Pass holders, it goes from $3,800 to $4,000.
For banks, asset managers and fintech firms, this raises the cost of hiring foreign professionals. The likely outcome is a stronger emphasis on developing local talent, and being more selective about overseas hires.
Second, finance is one of four sectors identified for national AI Missions. This signals something more structural. The Government is not just encouraging AI adoption. It is actively supporting transformation at a sector-wide level.
For finance professionals, the implication is practical. With the proliferation of AI, technical knowledge alone may no longer be sufficient. The ability to work effectively with AI tools could become a baseline expectation in the future.
Read Also: Singapore Budget 2026: 5 Announcements That Will Benefit Everyday Singaporeans Financially
