After the spending frenzy comes the reality

At just about this time last year (2006), we were inundated with dizzying and mind-numbing headlines after headlines (like the Straits Times headlines on the right) of billion dollar handouts & hundred-million dollar “5-year” upgrading plans, along with reports of how the economy is doing so well that recently, Minister of Manpower Ng Eng Hen told students at NUS that the “opportunities are mindboggling“.

Yet, here we are – one year later – being told by the government that they need to raise the GST (Goods & Services Tax) in order to help the lower income earners. (It makes you wonder who those ‘mindboggling opportunities’ are for, doesn’t it?)

Before we go into the issue of the GST, there are a few questions which we should be asking ourselves with regards to current govt spending.

1. Are we spending in the right areas?

2. Are all of the spending necessary?

3. Where is the money for all those upgrading promises going to come from?

The answer to the 3^rd question above perhaps can be found in what the Senior Minister himself said just days ago. “We’ll look at the sums later on”, he was quoted as saying, referring to the Workfare scheme.

Perhaps they did not know where all those money for the upgrading programmes was going to come from either?

The spending frenzy

Mega Upgrading Plans

Lets recap some of the mindboggling amounts that were declared, just before the 2006 May elections and in recent times, to get a sense of the ‘spending habits’ of the govt:

Chua Chu Kang $57m

Potong Pasir (offered) $80m

Bukit Panjang $93m

Hougang (offered) $100m

Aljunied $160m

Tampines $330m

Ang Mo Kio $500m

East Coast $500m

Jalan Besar $517m

Marine Parade $565m

Sembawang $570m

Jurong Town $661m

Pasir Ris/Punggol $950m

In other areas:

$1b Lift Upgrading programme

Progress Package $2.6b

“$1b help for low-wage earners”

$435m SMU new City Campus

$322m Republic Polytechnic new Woodlands Campus

$370m new ITE College East Campus

Temasek $6.2B purchase of 96.12% stake in Thai telecom giant Shin Corp

PSA unsuccessful bid of $10.7B for P & O British shipping giant

DBS’ $10.7b unsuccessful bid for majority stake in Korea Exchange Bank

NTUC HQ Building in New Downtown $400m 32-storey glass tower

$500,000 – People’s Association’s “Image Revamp”

$7m “Glory for the Nation” project

$208 million new Supreme Court Bldg

$250,000 image-survey to find out what people think of the Land Transport Authority

$40m per year to maintain the Esplanade

A reported $1billion for the Changi Prison Complex Redevelopment

Now, I am not against all of these programmes or plans but I am certainly against some of them. $400,000 to rename Marina Bay? $200,000 to relocate a tree?

Raising GST is the only ‘viable’ option?

Yet, we are being told that raising the GST is the only ‘viable’ option. (Read Hri Kumar’s entry in the P65 blog. He said as much.) But what is even more worrisome is SM Goh’s statement as reported by CNA here:

“And we find that it’s better for us to raise GST, not just for the programmes, but for anything we want to spend more on – education, for example.” (Link)

Read it again: “Not just for the programmes” (like workfare, I presume) but also for ‘ANYTHING’ that they want to spend on.

What does that mean? It simply means that GST is the new tool which will fund ‘anything’ that they want to embark on from now on.

Does that not worry you? Has the govt lost its way?

A viable alternative

Hri Kumar asks for ‘viable’ alternatives. Well, one of the obvious alternatives is to re-look govt spending. There are questions that need to be asked, such as:

1. Do we really need all those multi-billion dollar upgrading packages? Are our flats so run-down that we can’t do without them – or at least scale them down?

2. How much wastage is there in govt spending?

3. In light of SM Goh’s statement, is it true then that the govt had no idea how they were going to fund the programmes they announced – and thus, the GST is the easy way out?

To say that raising the GST is to ‘help the poorer Singaporeans” or to ‘tilt the advantage’ in their favour is just political propaganda dressing. The more substantive alternative, before we even consider raising the GST, is to take a look at current programmes – and the money being dished out for them.

Lavish, wasteful govt spending not new

Lavish, wasteful, unnecessary spending by the govt is not something new or surprising. Even Ex-MP of the PAP Tan Soo Khoon highlighted this a few years ago in his rather famous parliamentary speech – dubbed the “Seven Wonders Of Singapore” speech – where he criticized govt spending on unnecessary or lavish buildings which are competing to see “which can be better than the Four Seasons Hotel”.

And from the lists above, we must wonder if the same careless, care-free mindset has set in again within the government.

The real “Wonder”, in my opinion, is that although the govt is lamenting that they do not have enough money to fund the programmes they want to embark on (despite being able to promise billions of dollars worth of upgrading during general elections time), they are also contemplating raising the salaries of civil servants, and hence ministers’ salaries as well!

Increasing ministers’ salaries and GST?

In fact, going by what some ministers have said (or hinted), increase in ministers’ salaries is a done deal. Once declared, there’s no way the govt will make a u-turn, that much we can be sure.

What the ministers and the govt as a whole should be looking at is whether we have our priorities right. Whether waste is rampant in govt spending, whether the programmes or plans are necessary – and how we can curtail or shelve some of these plans in order to re-direct the funds to more necessary areas.

Raising the GST on the pretext of helping the poor just does not cut it, if we do not also look at present govt spending.

For if you do not even bat an eyelid while dishing out $500,000 just to ‘revamp’ the People’s Association ‘image’, how can you look singaporeans in the eyes and ask for more money?

For how do you justify – morally – an increase in ministers’ salary & promising billions of dollars in upgrading programmes, and at the same time tell the people that you do not have enough money to help the poor?

Has the government got its priorities right?