Workers’ Party (WP) Member of Parliament (MP) Jamus Lim took to Facebook on Monday (3 May) to share an analogy that illustrates the Government’s poor reasoning on the need for goods and services tax (GST) hike.
In his post, Dr Lim said that “sometimes messages are best told as a parable”, and went on to pen down a story about a very rich man, which symbolises the Government.
In his narration, the MP said that the rich man, addressed as uncle, does not like to spend “unnecessarily” and had inherited a large house and a lot of money. He is also a successful businessman and passively collects dividends and rental income from his multiple properties.
Dr Lim wrote:
“He even rents houses to his relatives at a ‘family’ rate! But what if this uncle starts raising all his tenants’ rent every year, including that of his extended family? “Times are bad,“ he explains. “I need to set aside more money for my children. “But times are bad for me, too,” you protest. “No worries lah!” is his stoic response. “When I die, your children will also get a share of the inheritance. Family sure take care of family one! Blood is thicker than water!”
He added, “It’s easy to see how uncle is going from responsible saving to zealous over-saving. He may even be becoming stingy, instead of just frugal. This depends on your point of view.”
The Sengkang GRC Member of Parliament also went on to express that the “balance between wealth and non-material comforts is a personal choice”, and that how much the government should save or spend is a decision that the society needs to make together.
This is because one person’s idea of being thrifty and responsible may be different from others.
“Sometimes people claim that other family members want to withdraw all their savings just to buy a new sports car. But maybe they need to withdraw their savings because their house is falling apart and their kids are malnourished. Yet, uncle is still asking them to tighten their belts!”
As such, Dr Lim noted that the right thing for the “Uncle” Government to do is to raise the rent just for his expensive properties and not for all his properties.
“Why doesn’t Uncle look at different ways to increase his income or fund his spendings?” he questioned.
Given this, Dr Lim highlighted his party’s stance of opposing a GST hike as it believes that there are other ways for Singapore to tap on revenues in order to minimise economic hardship for the general public.
He also pointed out some of the suggestions made by WP for revenue generation in Parliament, which include increasing the Net Investment Returns Contributions (NIRC) from 50 per cent to 60 per cent, tapping on a portion of land sales, increasing duties on sales of high-end properties or introduce a modest wealth tax.
For those who say that these methods can use up the country’s reserves, Dr Lim explained that it does not.
“We advocate a slower rate of reserve accumulation, not a drawdown. This means that there will be fewer new cookies going into the jar, but the total number of cookies in the jar still keeps growing… By growing the reserves at a slower rate, we ease the demands and hardships on our current population, while still creating sufficient capacity to support future needs,” he explained.
The MP also noted that WP believes in spending on areas like healthcare and that this is the main reason why Singaporeans have been saving their money in the first place.
“Our forefathers had scrimped and saved in their youth so that they could enjoy an easier retirement. They also did so, so that they wouldn’t be a burden on future generations. Yet, now we are saying that we cannot afford to take care of them without also raising taxes, without making things harder today, because we also need to take care of the needs of our future generations.
“Just like that rich uncle with multiple properties and multi-million dollar investments who still keeps raising your rent,” the MP concluded.