Instead of raising the Goods and Services Tax (GST) rate, the ruling People’s Action Party (PAP) government should utilise less burdensome measures for Singaporeans, said entrepreneur and Singapore Democratic Party (SDP) member Alfred Tan at the party’s pre-election rally last Sat (19 Oct) at Hong Lim Park.
Criticising the Government’s move to increase the GST by two per cent despite having “a proud record of eye-popping surpluses”, Mr Tan said that there are other “effective” tools to increase government revenue – in the event that “money is really needed” – such as income tax, stamp duty and estate duty.
“All the Finance Minister would say is that generally, future spending will increase, and therefore country needed more money. He tried to blame increasing healthcare [costs] and an ageing population, but never talked about ways to reduce wasteful spending and investment losses his government had been accumulating,” he charged.
Tiered GST system possibly better, more “compassionate” solution than raising tax rate: Alfred Tan
Highlighting that the SDP has been proposing an exemption from the GST for essential items such as foodstuffs, healthcare and educational materials, Mr Tan also advocated giving struggling families “some relief” from the GST through lower contribution.
Those who are able to purchase luxury items, he added, can offer to pay more GST for such items “that we occasionally reward ourselves with”, such as jewellery, high-performance cars and hotel stays.
“What is another S$20,000 to the person buying his S$1mil Rolls Royce or Bentley? In contrast, S$20 of GST for milk and rice for a family on a S$1,000 monthly salary is a lot,” said Mr Tan.
“What about his family’s childcare, healthcare, transportation, utilities, food and other necessities of life? Is this too complex for such a well-resourced government?
“The Government prides itself on creating the country’s complex healthcare finance system. Is a tiered GST system too difficult?” He questioned.
Finance Minister Heng Swee Keat in Parliament earlier this year addressed the issue of implementing a tiered GST system.
Responding to PAP Member of Parliament (MP) Saktiandi Supaat’s suggestion for a tiered GST system based on the nature of goods and services in order to lower the tax burden on lower-income households, Mr Heng said that it is tricky to assess whether a good is a “necessity”.
“Take bread, for example. There are the white, and wholemeal loaves that you can find at supermarkets, but there are also loaves sold at artisan bakeries. On top of that, there are so many other types of bread – floss buns, baguettes, kaya toast at your coffeeshop. Where do we draw the line?” He added.
Thus, as an alternative, Mr Heng said that the Government will still opt to implement a “flat GST rate, while providing structural offsets through the GST Voucher scheme”.
“This is a permanent scheme to provide more help to lower-income households and seniors. It is also more targeted, as those who need help most get it directly,” he said, noting that the GST Voucher scheme is “an addition to other schemes and programmes to help the less well-off”.
Govt’s move to make “everybody pay for everything” a sign of “not putting people at the centre of its policies”: Alfred Tan
In his speech on Sat, Mr Tan criticised the Government’s decision to carry out the GST Voucher scheme.
“The present government prefers to instead hand out GST vouchers whenever it feels like it, just to remind you of your dependency and their generosity and care. Surely Singaporeans deserves better than that?
“This government decides to make the work easy for themselves by asking everybody to pay for everything. That is what I mean by not putting people at the centre of its policies,” Mr Tan added.
Mr Tan also argued that instead of worrying about the possibility of inflation going up by two percent and “causing further hardships” for struggling Singaporean families, Mr Heng instead reportedly claimed in Parliament that raising the GST will increase Singapore’s Gross Domestic Product (GDP) by 0.7 per cent.
“Since our Ministers use GDP growth to determine how much they earn, isn’t that a clever way for them to increase their salaries? Inflating the GDP with your wallets, so that they can pay more to themselves,” He retorted.
S’pore in need of alternative voices in Parliament, ruling party MPs will still vote for Bills “along party lines”: Alfred Tan
Mr Tan, who has loosely indicated in his speech that he will be taking part in the upcoming General Election, also stressed the need to have alternative voices in Parliament who will not only speak up against potentially less than ideal policies, but who will also vote against them when necessary for the benefit of Singaporeans.
“We now have an overwhelmingly dominant [ruling] party in Parliament, with minuscule opposition voices trying to be heard in a politically hostile environment,” he said.
Consequently, the ruling PAP “does not readily entertain” voices advocating alternative policies after over five decades of running Singapore, said Mr Tan.
“Do we hear robust debate? Or [do] we hear only one voice … A voice determined to ignore the wishes of the people?” He added.
Citing the issue of the GST hike in Parliament earlier this year, during which a total of 55 MPs rose to speak on the matter, Mr Tan said that “nothing is going to change” despite the seemingly robust debate that took place.
“If your representative is of the same party as the government, and even though he may voice your concerns on your behalf, your elected MP may still be voting along party lines,” he said, adding: “Do you think a PAP MP will vote against a PAP-sponsored Bill?”
“You need more alternative voices in Parliament, so that your concerns can be heard.
“Let SDP speak up for you. Let SDP vote for you when we are in Parliament,” urged Mr Tan.
Sat’s pre-election rally was the first time Mr Tan had openly suggested the possibility of contesting in the next GE.
“After years of running successful businesses, I was looking forward to enjoying the fruits of my labour. But life is more than working hard and enjoying these results.
“It is about making sure that society cares for the least of us, for the weak and voiceless. It is about leaving behind us a society that is stronger and ready for the future. And that is why I have decided to step up and contribute towards the progress of democracy,” said Mr Tan.