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PM Lee said PAP mad to raise GST in GE2015 but now says they’re giving notice for raising GST

On Sat (19 May), PM Lee rushed to KL and managed to talk to the new Malaysian PM Mahathir for half an hour. PM Lee went to KL to personally congratulate Dr Mahathir Bin Mohamad for his coalition’s historic win at the recent Malaysian GE14.

After the meeting, PM Lee was interviewed by reporters. When asked if Malaysia’s move to abolish the GST would make it harder for Singapore government to sell its GST hike to Singaporeans, PM Lee said that the circumstances are different.

PM Lee stressed that his Government is taking the planned GST hike “very seriously”.

“We’ve given a lot of notice. I think there’s time to explain and there’s time to work out how exactly we will make sure that Singaporeans are given the right support in order to be able to live with the new tax,” he said.

PM Lee at GE 2015: PAP mad to raise taxes if got strong mandate

During the election campaigning at Singapore’s GE 2015, PM Lee also “gave notice” that it would not raise taxes if the PAP won with a strong mandate. He rubbished claims that PAP would reverse policies if they garnered strong votes. He said his government “did not play such games with voters”.

At the time, he was referring to WP’s comments that PAP could change “its mind anytime”. WP had raised the possibility of an increase in GST if PAP won with a strong mandate.

PM Lee said during GE 2015, “I think it’s a strange psychology to think that this is a government which is only dying to do bad things to people… Do we look like that?”

He added that PAP would be “mad” to raise taxes just because it had garnered a certain percentage of the votes.

“Raising, adjusting taxes is a very big decision. You consider it carefully, you discuss it thoroughly, and you do it only when you absolutely have to,” he said.

“What will make you need to raise GST? Profligate spending and irresponsible, unsustainable plans. That is what will hurt and require you to raise taxes and GST.”

As things turned out, PAP did win with a very strong mandate in 2015 – it garnered some 70% of popular votes.

Thereafter, during the budget debate early this year, it announced that it would be raising the GST from the current 7 to 9% after 2020, although technically speaking, PAP did not raise GST during its current term of government but aims to do so in the next term, with the assumption that it will surely win in the next GE.

It has been further noted that the announcement to raise GST came on the back of huge surpluses generated in FY2016 (surplus $5.2 billion) and FY2017 (surplus of $9.6 billion).

In fact, looking at historical data, out of the last 21 years (FY1997 to FY2017), Singapore registered 15 years of operating surpluses vs 6 years of operating deficits.

If government land sales were to be thrown in, in accordance with IMF way of calculating fiscal surpluses or deficits, it would be 21 vs 0 – 21 years of solid surpluses for Singapore.

But PM Lee would still want to raise GST in any case. His father once told civil servant Ngiam Tong Dow years ago, “What’s wrong with collecting more money?”