The Goods and Services Tax (Amendment) Bill was passed in Parliament on Nov 7, despite dissent from opposition MPs. In effect, the GST will go up 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. And yet, the alternatives put forth by The Workers’ Party to the GST hike are still being discussed online.
On Nov 15, a letter was published on the Chinese-language news site zaobao.com.sg from a person by the name of Mr Lim, who appeared to believe that WP’s policy proposals would “raid” the reserves and leave the next generation of Singaporeans “impoverished and indebted.” A rebuttal to this letter written by WP MP Jamus Lim (Sengkang GRC), an Associate Professor of Economics at ESSEC Business School, published three days later. “Slowing the rate of accumulation of reserves can hardly be called taking from it,” wrote the MP.
And on Monday (Nov 21), Senior Minister of State for Finance Chee Hong Tat offered a rebuttal to Assoc Prof Lim’s rebuttal, with another piece published in Zaobao as well as a Facebook post. Mr Chee appeared to agree with the Zaobao letter-writer. In his post, he called the assertions of Assoc Prof Lim and the other WP MPs “inaccurate”.
He noted WP’s proposals to use more of Singapore’s reserves as an alternative to the GST hike but wrote that “The Government now uses up to 50% of the investment returns from our Past Reserves as revenues for the annual budget. We have already explained that this revenue stream will only keep pace with economic growth over the medium to longer-term.”
However, the country’s spending needs, particularly for healthcare, “are rising well above GDP growth,” Mr Chee added. He also said that the WP is “mistaken” in its claims that “there is no harm spending more from our reserves or investment returns.”
Should “our forefathers” have carried out these proposals, and spent more of Singapore’s reserves, this would have meant “20% less in investment returns today” and an even higher GST hike “in order to close the funding gap and to ensure sufficient resources to look after our growing number of seniors,” he wrote.
The Senior Minister of State ended his post by writing, “Putting aside theoretical arguments, the practical implications of the WP’s proposals are clear. If we were to adopt their proposals, we will leave behind less resources for our children and grandchildren in the future. Surely this cannot be a responsible thing to do, especially as we enter a world with greater uncertainties and challenges ahead of us.”