Singapore – The opposition Progress Singapore Party has questioned the basis of specific key points in the 2020 Budget, such as the postponement of the GST increase.
On Tuesday (Feb 18), Deputy Prime Minister and Minister of Finance Heng Swee Keat announced the 2020 Budget in Parliament. The PSP response included suggestions to increase the current Budget of support packages for households and families affected by the Covid-19 outbreak.
“We are of the view that a more sizable budget should be allocated to households to cope with the Covid-19 crises as opposed to the current $1.6 billion allocated to the people and households,” the party said. It believes additional relief should be given to “cover the loss of income” that many Singaporeans have experienced because of the outbreak.
“We propose another one to two billion to be allocated to households to cope with Covid-19 crises and economic slowdown,” said Mr Leong Mun Wai, PSP Assistant Secretary-General.
Goodie bag Budget
The party commented on the “goodie bag” characteristic of the expansionary measures being handed out in different forms. It noted that it is difficult for people to understand how much they are getting and hence depriving the economy of an immediate confidence boost.
“We are of the view that long-term measures are always better than short-term goodies because the former facilitate better planning by the people and enterprises.”
No GST hike for five years
As for the postponement of the Goods & Services Tax (GST) increase, the party acknowledged the Government’s consideration of the request, even if it is for only one year. However, it advised “against a further rise in the GST or any other fees, at least in the next five years”. The reason for such a request lies on the basis for the need to increase the GST in the first place.
Given that the Government cannot give a definite timeline as to when the GST increases will take place (only that it will still be needed by 2025), PSP questioned the rationale for the $6 billion Assurance Package which will be set aside in the GST Voucher Fund in this year’s Budget.
Furthermore, the party questioned the Government’s initial plan to “necessarily raise the GST from 7 per cent to 9 per cent” before the Covid-19 outbreak. Despite the current economic difficulties, a $6.4 billion support package is feasible “without resorting to draw down from reserves”. “This showed that the increase in GST was actually not necessary,” it said.
Stronger push to be more manpower-lean
The party also responded to the Budget 2020 announcement that the foreign worker quota for S Pass workers in the construction, marine shipyard and process sectors will be cut. It welcomed this move but said the effect of foreign workers on the Singapore job market should be given more attention than just reducing the S Pass sub-Dependency Ratio Ceiling (DRC) for a few industries.
Read the full statement here.
The Progress Singapore Party thanked the Government for taking into consideration the feedback from voices such as theirs in drafting the 2020 Budget. /TISG