The Singapore Democratic Party (SDP) was the first opposition parties to comment on Budget 2018, which was delivered by Finance Minister Heng Swee Keat yesterday.
Slamming this year’s budget speech as one “laden with cheap gimmicks and full of wayang,” the SDP criticised the GST hike and the SG Bonus, among the other items that were unveiled during the speech. In a statement on its website, the party added:
“Singaporeans will continue to be lashed with this grotesque financial burden which will only become heavier in the years ahead. The myriad of taxes will further fatten already bloated government coffers at the expense of the people who are struggling with retrenchments, a shrinking job market, and burgeoning household debt.”
Read the party’s full statement here:
If ever there was a budget laden with cheap gimmicks and full of wayang, this one is it.
Finance Minister Heng Swee Keat announced an ‘ang pow’ of up to $300 for every individual. The giveaway amounts to $700 million. This is against a collection of a surplus of $9.6 billion last year.
In other words, the government is giving back to taxpayers 7 cents for every excess dollar it collected in taxes and fees. For the government, this is a wonderful scheme.
The government had forecast that it would collect only a surplus of $1.9 billion but ended up with $9.6 billion instead – more than five times the originally estimated amount.
Such an absurdly discrepant amount reflects poorly on the Minister’s judgment, planning and execution of the country’s fiscal system. The hantam buta strategy of tax collection has resulted in the PAP wildly over-collecting from citizens.
To prevent an outcry of why it collected so much more revenue than it needed, the government tries to placate and distract Singaporeans by announcing the ang pow gimmick.
GST increase in 2021
The PAP is also hoping that the giveaway will distract the public from its announcement to hike the GST in 2021. It insults the intelligence of Singaporeans who can see that the return of a couple of hundred dollars in the form of an ang pow is a one-time deal compared to the permanent increase of the GST from 7% to 9%.
But why increase the GST only in 2021? As Finance Minister, how can Mr Heng foretell what’s going to happen a full three years from now when he couldn’t even estimate the budget surplus correctly from last year?
This move must be seen in the context of his predecessor, Mr Tharman Shanmugaratnam, who promised at the last GE in 2015 that the GST will not be raised this term. To avoid embarrassing Mr Tharman, Mr Heng decided that the GST would be raised only after this term which will end in 2020.
Taxes through other means
This, however, does not mean that the government cannot collect – or has not collected – more revenue in the meantime. In the past couple of years, the authorities have collected money through a slew of price increases: the water fee hike of 30%, carpark charge increase of 27%, upping of ERP rates, jacking up of electricity and gas tariffs, etc, which all contributed to the humongous $9.6 billion budget surplus. Singaporeans see through this wayang.
And the PAP isn’t stopping there. It has announced that it will introduce GST on e-services as well as impose a carbon tax. Both of these will lead to businesses passing the added cost to Singaporeans. In addition, the government will raise the levy for employers of domestic helpers who do not qualify for levy concessions.
What all this boils down to is that Singaporeans will continue to be lashed with this grotesque financial burden which will only become heavier in the years ahead. The myriad of taxes will further fatten already bloated government coffers at the expense of the people who are struggling with retrenchments, a shrinking job market, and burgeoning household debt.
This will be felt most acutely by the lower- and middle-income groups. Such an outcome is hardly surprising as the PAP has always sought to protect the rich – a class to which its ministers belong.
Budget 2018 is no exception.