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In Parliament on Monday (Nov 7), WP MP Jamus Lim (Sengkang GRC) spoke about the impending Goods and Services Tax hike, which raises the GST from 7 per cent to 8 per cent from Jan 1, 2023, and from 8 per cent to 9 per cent from Jan 1, 2024, calling it “irresponsible” and saying that it should be postponed.
“Imagine a doubling of inflation from our current, already unbearable levels,” he said, adding that “While Singaporeans accept that inflation is very much a global phenomenon, the reality is that inflation has inadvertently become a tax on our people.”
The points Assoc Prof Lim made were praised by former GIC economist Yeoh Lam Keong in a Facebook post the next day.
Mr Yeoh called the Sengkang GRC MP’s points “excellent,” adding that the GST hike “seems completely unnecessary at the moment” because of the “$30 bn structural fiscal surplus that we have not even begun to publicly delineate clear big spending plans for.”
Mr Yeoh also cited the country’s reserves which are “growing very strongly at the rate of $50-$100 bn a year for the next 5-10 years because of our structural balance of payments surpluses and are thus likely to yield much higher NIRC revenues over the medium to longer term when such spending is most needed.”
“There’s a fair chance that we might not need the GST increase at all!” he added.
The ex-GIC economist also mentioned that “All this is compared to the relatively modest $3.5bn a year yielded by our proposed 2% GST increase”.
He ended his post by opining that “in the light of this why raise the GST at this potentially most inappropriate and inopportune moment? The government has yet to make even a moderately convincing case for raising the GST near term either in parliament or out of it IMHO.”
Assoc Prof Lim, whose speech may be viewed in full here, mentioned that many of the residents he spoke to lately have voiced concerns over higher prices, which he reiterated in a Facebook post the next day.
Those he has spoken to have voiced concerns that it will be hard to cope with higher living costs, and made the case for greater assistance for the middle class.
“Even if official inflation for necessities like food may seem reasonably contained at 7 percent, the lived experience of someone who faces sticker shock when prices appear to have doubled at their cai png stall.
This divergence between posted prices and the official inflation rate is due to the fact that everyone’s true inflation rate is going to be different.
If you tend to eat out—and consume a lot more chicken or mutton or eggs in your diet—you’d feel the pinch a great deal more than vegetarians that cook at home. Similarly, if you rely on private hires or taxis to get to your routine medical appointments or pick your kids up from their grandparents’, the sting from higher prices for these services will hit you harder than if you are a regular user of public transport.
The government has helped mainly lower-income groups out with various voucher and payout schemes. Depending on your lifestyle, this may or may not have made up for the spike in prices due to inflation. But I feel that additional relief to help middle-class folks cope with higher prices of daily necessities will not only be welcome, but is sorely needed. #SengkangGRC“