Singapore – On Mar 16, the Singapore Democratic Party (SDP) launched their first policy on lowering the cost of living.
Titled “A Better Life For All: Lowering the Cost of Living In Singapore”, the policy is a 10-point plan geared towards making living in Singapore more affordable.
SDP chief Chee Soon Juan spoke at the party headquarters in Ang Mo Kio and cited two 2015 speeches by Prime Minister Lee Hsien Loong and Deputy Prime Minister Tharman Shanmugaratnam as a reference for their cause.
“Despite PM Lee’s to “work with you to solve problems like the cost of living” during the GE in 2015, the PAP and government increased, or intends to increase, prices on a slew of items including water, carpark, sugar, electricity, GST, etc.,” said the SDP chief.
An SDP press release notes that since 2015, the government had collected nearly S$20 billion in budget surpluses.
Also highlighted was DPM Tharman’s Budget 2015 speech stating that the increased spending was adequately funded for until 2020.
The rising costs of living in Singapore continue to be a central concern for its people.
“We were only the 97th most expensive place in 1997 according to the Economist
Intelligence Unit’s global survey. In a span of less than 20 years, we rose to become
the most expensive city in the world by 2014, and we have claimed that dubious
honour for five years straight since,” stated the SDP in their policy.
Proposed 10-point plan
- Cut ministerial pay to fund assistance schemes for the poor
The first proposition to balance the rising cost of living is to reduce ministerial salaries. The potential savings gleaned from this step are to be channelled to fund a scheme that provides financial assistance to Singapore’s poorest.
The SDP has given a formula which, if implemented, would result in the PM’s salary being lowered from S$2.2 million per year to about S$0.67 million a year.
From the entire cabinet, the savings from the pay reduction are computed to be about S$10 million to S$12 million a year.
The political party quoted PM Lee in the 2015 General Elections, “Let us be prepared to buckle, work even sacrifice,” and urged the ministers to “lead by example, not more exhortations.”
- Raise income tax rate for the top 1 percent
The SDP proposes to re-introduce the 28 percent tax bracket for the top one percent earners, just like how it was up to 2007 when Singapore’s highest personal income tax rate was lowered from 28 to 20 percent.
The SDP is expecting this increase to yield approximately S$300 million in government revenue which would help provide further financial support for low-income households.
- Ensure revenue neutral budgets
Another point in the policy to lower the cost of living is for the government to collect taxes based only on the amount the country needs. For this, the SDP is holding DPM Tharman accountable to the statement that the government has all its spending needs until 2020, meaning taxes, fees, and other charges should not be raised.
- Scrap GST for essential items, raise GST for luxury goods
The SDP is proposing that basic food items and other necessities such as medical treatment, and school supplies are not to be subject to the GST as a means to protect poorer households. To balance the resulting revenue decrease, the GST rate for luxury items should be increased to 10 percent or more.
“Presently, a poor family buying medicine or school textbooks is taxed at the same rate as a wealthy one buying a branded handbag worth thousands of dollars,” said the SDP.
- Legislate minimum wage
The legislation of minimum wage ensures low-imcome workers are protected from exploitation. It also promotes fair and sustainable economic growth, and helps reduce income inequality, and demand for foreign workers.
- Reinstate estate duty
The SDP proposes the re-implementation of the estate duty tax that was abolished in 2008. They noted that even PAP MPs are calling for the reinstatement of wealth and inheritance taxes.
- Reduce healthcare costs
The SDP is suggesting a replacement of the MediSave, MediShield, and MediFund schemes with a single-payer system to reduce the burden of health care costs.
“A main feature of our policy is the provision of universal care which ensures that the elderly poor and those without income are not left behind,” said the SDP policy.
- Lower HDB prices
HDB flats are becoming more unaffordable for Singaporeans, with the use of CPF savings to fund flats which leaves retirees with little to live on during their retirement. The SDP, therefore, suggests the Non-Open Market (NOM) flats be sold at cost (minus land cost) and not allowed to be sold on the open market.
- Return CPF savings
The party emphasised the difficulties the elderly are experiencing through the Retirement Sum Scheme and proposes to abolish it entirely plus have the funds returned at the age of 55.
“An “opt-in” clause could be introduced for members who wish to have their CPF funds retained and returned in instalments,” mentioned the policy.
- Stop profligate public spending
The SDP sees it essential to have an “effective opposition presence in Parliament” to examine and question the government’s expenditures.
The policy stated that “Our alternative ideas are guided by our belief that it is the people who should take the lead in driving the economy (as opposed to the current state-run affair through Temasek-owned companies) and who should have the predominant voice in how their wages are taxed and CPF savings used.”
“With this alternative policy on the cost of living, the SDP aims to change such a political arrangement and return the power to the people and, in the process, make living in this country more affordable and less stressful – in other words, a better life for all,” added the SDP.
Read the full policy A Better Life for All: Keeping the Cost of Living in Singapore Affordable here.