SINGAPORE: In Parliament on Wednesday (Feb 26), Leader of the Opposition Pritam Singh criticized the Goods and Services Tax (GST) hikes over the past two years, calling them a “poor” decision that helped “turbocharge” inflation.
In his speech, Mr Singh, the Workers’ Party leader, acknowledged the giveaways announced by Prime Minister Lawrence Wong in the Budget statement last week but questioned whether they were sufficient, given the “lived reality of Singaporeans”, who have been grappling with higher living costs.
“Life is very tough for the Singapore that is in the heartland. Concerns over jobs, prices, housing costs, and opportunities continue for many Singaporeans and their households. The numerous vouchers will give us help for a little while, but not for long. After all, no GST offset package lasts forever,” he said.
Mr Singh also pointed out how healthy Singapore’s fiscal situation appears to be, adding this raises the question of whether the GST hike was necessary. As imported inflation led to higher prices in Singapore, he argued that “there was no need for the PAP government to add fuel to the fire” and increase inflation further by increasing the GST, which went up by one percentage point in 2023 and another in 2024, going from 7% to 9%.
The Leader of the Opposition added that even if the first tranche of the increase had been necessary, there had been “ample policy space to delay” the second increase amid high inflation rates.
“Why the PAP went headlong and headstrong into raising GST, and thereby turbocharging inflation further, is something only the PAP itself can answer to Singaporeans for,” he said.
“As every Singaporean knows, a 1% rise in GST does not lead to a 1% rise in the cost of a cup of coffee. Increases are incremental as we have experienced in our purchases from the local shop or weekly supermarket trip that cost a good 30% to 40% more for Singaporeans since the GST was hiked in an inflationary environment never seen before in decades,” he added.
“The decision to go ahead with a GST hike with inflation raging was poor. We have seen Assurance packages and CDC vouchers dished out to cushion the GST blow for many Singaporeans, but when these handouts stop, as they eventually will, the 9% GST will remain,” he added. /TISG
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