The Merdeka Generation Package, which has been described as an 'election gimmick', will not be paid for by a future hike in the goods and services tax (GST) said Trade and Industry Minister Chan Chun Sing at a Chinese New Year dinner for Tanjong Pagar GRC and Radin Mas SMC at Safra Mount Faber.
Addressing concerns from young people on how the government intends to fund the new Merdeka Generation Package, Mr Chan gave assurances that funds for the multi-billion dollar package will be set aside by this term of government.
He said every term of government has to make sure it earns its keep, and in the first two to three years, it works very hard to carefully manage the Budget and grow the economy.
The package was first announced by PM Lee in his 2018 National Day Rally speech. He had coined the term 'Merdeka Generation' to refer to approximately 500,000 Singaporeans born in the 1950s.
The Merdeka Package, which will benefit Singaporeans born in 1949 or earlier who missed out on the Pioneer Generation Package but obtained citizenship by 1996. Like the earlier papckage, this one will help Singaporeans with their medical expenses as they enter retirement. This includes subsidies for outpatient care, Medisave top-ups, MediShielf Life premium subsidies and payouts for long-term care – but in a smaller amount than the Pioneer Generation Package.
Mr Chan added that the “rule in the Singapore system is that no government can make – or should make – empty promises on behalf of a future government”.
"If we decide to have the Merdeka Generation Package... then it is the responsibility of this term of government to harness its resources to put them into a fund, to make sure that this burden is not passed on to the next government or future governments." Revenue from the two-point GST increase - to take place some time between 2021 and 2025 - is not funding the package, he added.
Details of the Merdeka Generation Package will be announced on 18 Feb during the Budget statement.
On the side note, the pending General Election is widely believed to be held within this year.