While speaking in Parliament during the Budget debate on Friday (28 February), Workers’ Party (WP) chief Pritam Singh urges the Government to disclose the projections on revenue and expenditure to the public so they can weigh the need for a GST hike.
Mr Singh also emphasised the opposition party’s stand against the GST increase.
Deputy Prime Minsiter Heng Swee Keat announced in his 2018 Budget speech that the GST percentage in Singapore will be increased to 9 percent anytime between 2021 and 2025, in order to amplify the country’s growing recurrent spending, especially in the healthcare industry.
However, in this year’s Budget presentation held earlier this month, Mr Heng, who is also the Finance Minister, revealed that the Government had decided to postpone its plan to increase the GST rate until after 2021. This was done after it reviewed the revenue and expenditure projections.
During the initial announcement of a GST hike in 2018, WP had opposed the idea on the basis of a lack of information about different revenue streams, among other things, Mr Singh noted.
But, Mr Heng’s explanation at that time was “one did not need to have information on everything to make a decision on anything”, Mr Singh explained.
Looking at the Government’s move to not raise the GST next year, Mr Singh pointed out that “it is obvious that the Government relies on revenue and expenditure projections to make this decision”.
He asked, “Would the Government make public these projections so that Singaporeans can critically evaluate the necessity of a GST hike?”
He added, “I believe this openness would contribute to a more substantive conversation and understanding of our fiscal trade-offs. This can only advance and mature conversations that take place in Singapore.”
The WP chief went on to state that the party’s position on this matter has not changed at all.
“We cannot support the GST hike, especially since the tax is to be raised in advance and before the Government projections have been put to this House,” Mr Singh said.
Despite the offsets given, Mr Singh thinks that the GST is a regressive tax that will badly impact the low and middle-income retirees seniors as they would be forced to spend sparingly, given that the offsets do not last for a long time for the middle class.
Lack of transparency on reserves
Separately, Mr Singh also brought up a point that the support package given to help the economy due to the COVID-19 outbreak was not taken from the country’s reserves, which is different from the support package distributed during the global financial crisis about a decade ago.
As such, Mr Singh questioned the lack of transparency on the reserves and asserted that an earlier reply from Mr Heng about why the dollar value of the reserves cannot be made public remained “unsatisfactory”, given that it is possible that the same argument could be applied to a majority of other democratic societies who err on the side of fiscal scrutiny and accountability.
Mr Singh also raised a point that media reports have revealed that Singaporeans want a deeper discussion on the reserves.
“These calls for greater transparency are not out of place and they will continue in years to come. They run in parallel with the Singapore Together spirit, with Singaporeans taking ownership, exploring fiscal solutions, seeking to co-create not just today’s Singapore, but a sustainable and equitable tomorrow that future generations of Singaporeans will inherit,” he said.
Upon hearing what Mr Singh said in Parliament, many netizens explained in the Facebook pages of TODAY and Channel News Asia that they agree with Mr Singh’s call for more transparency on the Government’s projections on revenue and expenditure so that the people can judge for themselves the need for a GST hike.
They explained that all ministers’ job to ask for the numbers and data to evaluate and see if GST hike is actually necessary.
Facebook user J Muthu opined that GST hike should not be implemented at all. He added, “The public should be made aware of the return from the earlier investments both foreign and local before any talk of a raise of a gst rate. Quite simply, the government should be accountable in showing it’s return on monies – obtained from it’s peoples – used to make investments especially overseas and it’s yield and performance.”
Echoing the same sentiment, others voiced out that GST should not be increased since Singapore claims to be a “rich” country. Kelvin Yee said that, “GST should be tiered based where basic necessities such as rice should not have GST imposed while luxury goods should have a much higher GST.”
However, Mark Leong believes that GST hike is needed for the short term, but not in the long run because “revenue from GST will stagnate or decrease population growth”.