Screengrab from Straits Times video.

GST hike: Damned if they do, damned if they don’t

by Augustine Low

The government thought it was being clever in announcing the impending GST hike early. The calculus: by giving Singaporeans at least three years’ heads-up, they would have time to bite the bullet and brace themselves for a GST increase to 9%.

But all of a sudden, Malaysia’s Barisan Nasional lost power after 61 years and the new coalition government has already swiftly kept its promise to abolish the mightily unpopular 6% GST by first cutting GST rate to 0% which will be subsequently replaced by its previous Sales and Service Tax.

And let’s throw into the mix the promise by the Workers’ Party to make the GST hike a hot topic for the next general elections.

So what does the government do? If they press on and declare that the GST hike must go ahead as planned, it could spell a bit of trouble for them at the polls because Singaporeans, by and large, remain unconvinced of the necessity for the GST hike.

There are those who say the Malaysian tsunami will never cross over to Singapore, but you can never be too sure. There were also many who predicted that the Opposition coalition would never topple Barisan Nasional.

Among them was Bilahari Kausikan, Singapore’s former Permanent Secretary for Foreign Affairs and Ambassador-at-Large. In a commentary for The Straits Times on Oct 6 2015, Bilahari wrote with his usual swagger:

“Pakatan Harapan – a coalition of the DAP, Keadilan and a minor breakaway faction from PAS, is a forlorn hope (pun intended).”

Bilahari’s prediction-cum-declaration in bold is intended.

The Singapore government could always backtrack and refrain from implementing the GST hike. But it risks losing credibility if it does so – it has said time and again that it does not shy away from tough decisions and the day that it caves in because of public sentiment, it would forgo its responsibility to Singaporeans.

It’s a sort of catch-22 – where circumstances converge to present the ultimate dilemma.

When asked if Malaysia’s move on GST will make it harder for the Singapore Government to sell the GST hike to Singaporeans, Prime Minister Lee Hsien Loong said to media, “You have to work very hard to make sure you have a very good case to be able to explain to voters why you are doing this, what you are using the money for and to persuade them that you know what you are doing and they can trust you. Then you must implement it well to make sure that it goes in smoothly. That the burden is carried fairly,”

We shall stay tuned to see how the government works itself out of the situation.

Meanwhile, Singaporeans have to be mindful that they can call the shots on this one because under the proposed timeframe, the GST hike will only be implemented after the next general elections.

Augustine Low is a proud but concerned citizen. Voicing independent, unplugged opinion is his contribution to citizen engagement.