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Jamus Lim uses parable of ‘saving and spending’ to explain why we should not have a GST hike

Govt can tap other revenue sources to minimise hardship for Singaporeans




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Singapore — Workers’ Party MP Jamus Lim argues Singapore should not have a Goods and Services Tax (GST) hike and tells a story to explain why.

Sometimes messages are best told as parable. The practice is as old as recorded history; sharing stories to convey…

Posted by Jamus Lim on Monday, 3 May 2021

The story, he says, is a parable — a story with a moral — about a rich uncle who doesn’t like to spend money. The uncle has inherited a large house and a lot of money, is the ‘towkay’ (big boss) of successful businesses, and collects dividends and rental income from his multiple properties. 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,” the family protests. “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!”

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MP Lim comments: “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.

“Just as the balance between wealth and non-material comforts is a personal choice, how much a government should spend or save is a difficult decision that society will need to decide on together. Everyone’s idea of thrift and responsibility is different.

“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!

“Since times are hard, isn’t it better for uncle to raise the rents of his more expensive properties, instead of ALL his properties? Especially if this could hurt his relatives. Why doesn’t uncle look at different ways to increase his income or fund his spending?” asks MP Lim.

He says the Workers’ Party is against a GST hike because it believes there are more revenue sources that Singapore can tap to minimise economic hardship for the average Singaporean.

The solutions include:

1. Raising the Net Investment Returns Contributions (NIRC) from 50% to 60%;
2. Tapping a portion of land sales;
3. Raising duties on sales of high-end properties;
4. Introducing a modest wealth tax.

The Workers’ Party is not advocating using up the reserves. “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.”

MP Lim adds: “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.”

He argues against the proposed GST hike from 7 per cent to 9 per cent, due to take place between 2022 and 2025.

Calling for a GST hike, he says, is being “Just like that rich uncle with multiple properties and multi-million dollar investments, who still keeps raising your rent.”.

Denise Teh is an intern at The Independent SG. /TISGFollow us on Social Media

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