In response to Budget 2020, Singapore Democratic Party’s (SDP) chairman Dr Paul Tambyah said that the budget was “full of little tweaks and complex schemes but short on bold moves” to curb major challenges that Singaporeans are facing.
He added that the People’s Action Party (PAP) government planned to give many vouchers and rebates to the people, but this will only provide temporary assistance to those who are affected by global economic factors.
“On day to day matters, we were hoping that there would be some indication that the government had finally started listening to the people. We had hoped that there would be recognition of some of the real problems that local Singapore citizen professionals, managers, engineers and technicians face as they form a growing proportion of all Singaporeans who are retrenched,” he explained in a video posted on the Party’s YouTube page.
He added, “Unfortunately, the budget was full of little tweaks and complex schemes but short on bold moves to address the challenges that face all Singaporeans.”
Dr Tambyah also expressed disappointment over the decision to retain the Goods and Service Tax (GST) at 7 percent next year.
Deputy Prime Minister Heng Swee Keat, who delivered the country’s Budget yesterday (18 February) at Parliament, announced that the GST rate will remain at 7 percent next year due to current economic conditions, adding that the Government will eventually increase the rate by 2025.
He explained that the GST hike will still take place by 2025 as Singapore “will not be able to put off the increase indefinitely”.
Mr Heng added that Singapore would require recurrent sources of revenue to fund recurrent spending needs in the medium term.
In response to this, SDP said that it is disappointed that the Government decided to go ahead with its plan to increase the GST rate.
“The highly regressive GST which makes the poor pay a far higher proportion of their incomes in taxes than the wealthy is only deferred for one year. This means that the GST rise to 9% could well come in right after the elections, perhaps in the year 2022,” said Dr Tambyah.
The SDP’s chairman also pointed out that the Budget did not “promise to rein in the rises in bus fares, water and electricity charges, school bus fees and all the other costs which burden Singaporeans”.
Call off plan to hike GST
In the video, Alfred Tan, entrepreneur and member of SDP, also voiced out his views on what the country’s economy actually needs.
He opined that raising GST in the next couple of years is “foolish”, and urges the Government to put an end to its plan of increasing GST rate.
“This outbreak (COVID-19) will surely impact us and the world economically and socially, with its effects possibly felt right through the next few years. We call on the government to stop looking at increasing the regressive GST,” Mr Tan said.
He noted that Singapore don’t even need the GST Voucher Fund if the Government analyses the GST system properly.
“The government collects more than $11 billion in GST, which affects everybody no matter how old or how poor you are. And yet, it set up the GST Voucher Fund which has been paying out about $800 million a year, a paltry 7% of what it collects from the GST, to help out the low-income households and the elderly,” Mr Tan noted.
Instead of this, SDP proposes that the current GST system be changed to something that has “zero-rated basic food, necessities and healthcare”. This will be beneficial to those who are less fortunate and vulnerable as they will not need to spend more cash unnecessarily.
Implement retrenchment insurance
Given the current unstable economic situation, there are high chances that Singaporean workers may lose their jobs suddenly, and this is why it is the best time to “implement retrenchment insurance”, SDP said.
As such, it suggested to apply its RESTART Scheme, which looks at giving payouts to retrenched employees for 18 months upon retrenchment.
They said in the video:
The retrenchment insurance such as the one the SDP proposes will help the Singapore employee tide through this temporary but personally devastating crisis. Specifically, the SDP proposes the RESTART scheme, or Re-Employment Scheme and Temporary Assistance for the ReTrenched, which works like this:
- If a worker is retrenched, RESTART pays him/her 75% of last drawn salary for the first 6 months, 50% for the second 6 months, and 25% for the final 6 months.
- The payout stops once the individual is re-employed; or 18 months after the retrenchment. and
- The payout is capped at the prevailing median wage.
Spend carefully with good discipline
SDP also noted that there plenty ways to make sure that Singapore’s “budget is balanced and funded”.
Apart from thinking to re-implement estate duty on large estates and capital gain tax, SDP suggested to increase the “arbitrary 50% utilisation” of Singapore’s Net Investment Returns Contribution (NIRC).
The Party also stated that the Government should not waste more money on “useless projects and unnecessary expenditure” like building more malls, T5 airport, Founders’ Memorial and more.
Mr Tan pointed out that what the people of Singapore want is to have more money in their hands and not for the Government to take everything away from them.
“Singaporeans want the government to leave a little more cash in our hands and not take everything away from us. As seen from the AGO reports year after year we don’t need a government that overspends time and again, ignoring good prudence and corporate governance practices” Mr Tan said.
He added, “If the government is more prudent and careful in its spending, we will not need so much money in the first place, as presented in the budget. Responsible corporations demand discipline and plan the appropriate budget according to their means.”
“If our government cannot handle such discipline, perhaps they should not try to justify their salaries by comparing themselves with the best of our industry and corporate leaders,” he said.
As a conclusion, Dr Tambyah said that Singaporeans don’t want handouts, but rather a “level playing field”.
Therefore, he said that if SDP gets to secure seats in Parliament in the next General Election, the Party will “work hard to build a democratic Singapore based on justice and equality”.