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GST hike is the “sole reason” why WP did not vote YES to pass Budget 2018




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Budget 2018 was passed in Parliament today, with 89 MPs voting for it and eight MPs voting against it. All 8 MPs who voted against the budget are from the only opposition party presently in Parliament, the Workers’ Party (WP).

WP secretary-general Low Thia Khiang was not present for the vote.

The party explained in a statement on its website that the impending GST hike is the “sole reason” why it did not support this year’s budget:

“The Workers’ Party MPs voted “no” to the motion that Parliament “approves the financial policy of the Government for the financial year 1st April 2018 to 31st March 2019” for the sole reason that WP is unable to support the announcement of a GST hike from 7% to 9% in 2021-2025 at this point in time.
“We support the Government’s budget strategy and measures for the coming Financial Year, as presented to Parliament. However, the future GST hike is an announcement and not a budget measure. We are unable to support the announcement for three reasons:
“1. the lack of clarity on long-term projected Government income and spending;
2. the lack of consideration of alternative revenue streams and whether there is scope for the reserves to better support and invest in Singaporeans;
3. the lack in details on the effect of the future GST hike on low-income and middle-income Singaporeans and the Government’s permanent GST offset packages.
“We asked the Government to consider other options for raising revenue to meet increased spending. These options included raising the NIRC cap and using a small, capped fraction of land sales proceeds for Budgets. However, the latter was brushed off by the Government.
“WP MPs intended to vote “yes” on the budget measures for the Financial Year 2018/2019. However, Minister Heng insisted that voting “yes” would mean WP supports the announced GST hike in the next term of Government in 2021-2025 and called for a division. It is unreasonable for us to vote for a drastic future tax hike that will financially affect Singaporeans based on inadequate information and justifications on the need for the hike. We therefore voted NO.”

Earlier today, the Finance Minister berated the WP’s views on the GST hike. He added: “I hope that when the elections come around, the Workers’ Party will not turn around and use the GST to distract people from the longer-term issues that we face.”

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Wrapping up the budget debate, Heng reiterated that Singapore’s future cannot be secured through “episodic windfalls” like the exceptional budget surplus of $9.6 billion from FY2017: “If we are fortunate to have these occasional windfalls, we should do the responsible thing and save most of it for future needs. We should not plan for our future in the hope that markets will always continue to move in Singapore’s favour.”

Heng elaborated that the government will instead finance Singapore’s needs by raising taxes, borrowing or drawing on reserves: “Each of these methods serves a purpose; each involves risks and trade-offs. We have decided on our approach only after deep and serious study – firstly of our spending needs, followed by the options available to fund them.”

The Minister added that the decision to hike taxes was not one that was taken lightly: “Not just because raising taxes is unpopular, but because the Government should as far as possible avoid taking people’s hard-earned money and deciding on their behalf how the money should be spent, unless it has to do so for critical social, economic or national needs.”

He further defended the tax increase as one that will be a “responsible” way to manage spending: “Looking ahead, we have needs that occur year after year. The responsible way for us to fund such spending is to raise taxes.”

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