GE 2015: On the campaign trail

WP policy proposals won't lead to deficit: Leon Perera

The Workers' Party (WP) has defended the feasibility of its policy proposals, following Deputy Prime Minister Tharman Shanmugaratnam's warning to voters that some opposition parties talk only about what their promised governments will give with one hand, without talking about what they must take with the other.

"We certainly did consider the Budget impact of the proposals that we've put forward," East Coast GRC candidate Leon Perera (above) told reporters at a walkabout yesterday.

"The net effects of our proposals are not in any way fiscally irresponsible. They will not lead to a deficit and we will not touch the reserves."

Mr Perera explained that his party's manifesto includes many "Budget-neutral" measures, such as a minimum wage.

Some proposals involve more government spending and are "Bud-get-negative", but these are partially offset by other "Budget-positive" policies, such as the suggestion to tier tax rates above the current top income tax level of $320,000.

The WP's calculations account for the fact that the Government does generate a Budget surplus of "a few billion dollars" in a typical year. They also take into account an estimated injection of $3 billion to $4 billion per year from Temasek Holdings, under a new spending rule announced earlier this year, said Mr Perera.

He was speaking at Bedok South Block 16 market in East Coast GRC, which he is contesting together with three teammates.

The night before, Mr Tharman at a People's Action Party rally had cautioned against the "myth" of "egalitarian systems" that opposition parties had been touting in their speeches .

He noted that the size of the pie is limited, and many governments have struggled to redistribute income in a fair way.

He said: "Every government has to take taxes from people with one hand and give benefits with another hand. The question is, who pays and who benefits?"

With opposition parties campaigning on a platform of increased social spending, Mr Tharman also pointed out that the middle class often bears the greatest burden in countries that offer "free or close to free" healthcare and education.

A version of this article appeared in the print edition of The Straits Times on September 07, 2015, with the headline 'WP policy proposals won't lead to deficit: Leon Perera'. Print Edition | Subscribe