Budget 2018 debate

Heng raps WP for 'dishonest and irresponsible' stand on GST hike

The proposed GST hike from 7 per cent to 9 per cent is expected to kick in some time from 2021 to 2025. Over the three-day Budget debate this week, MPs, including those from the WP, had suggested alternatives to the GST hike.
The proposed GST hike from 7 per cent to 9 per cent is expected to kick in some time from 2021 to 2025. Over the three-day Budget debate this week, MPs, including those from the WP, had suggested alternatives to the GST hike.PHOTO: LIN ZHAOWEI FOR THE STRAITS TIMES

It is "dishonest and irresponsible" for the Workers' Party (WP) to fall back on "politically expedient options" that may not solve Singapore's longer-term challenges.

Finance Minister Heng Swee Keat levelled this criticism at the opposition party, adding that it should "come clean to the people", in a speech rounding up the Budget debate yesterday.

He said WP assistant secretary-general Pritam Singh's suggestions to boost revenues were "distractions" and not viable alternatives to the proposed goods and services tax (GST) hike from 7 per cent to 9 per cent, which is expected to kick in some time from 2021 to 2025.

Over the three-day Budget debate this week, MPs, including those from the WP, had suggested alternatives to the GST hike.

Mr Singh (Aljunied GRC) had asked on Tuesday if the Government would consider using land sales to boost revenue and if there could be an increase in the Net Investment Returns Contributions framework spending cap of 50 per cent.

Mr Heng noted that the WP MP also asked if Singapore could rely on GST on imported services. But Mr Heng said the yield is small, at less than $100 million, and businesses affected are primarily financial institutions and residential property developers which do not get full refunds for GST incurred.

He said Mr Singh "cannot be serious". "He even suggested that through our Smart Nation efforts, we can increase tax collection from self-employed hawkers and taxi drivers," said Mr Heng.

On Mr Singh's suggestion to raise the 50 per cent cap temporarily to fund infrastructure spending, Mr Heng said this would be dipping into the reserves while claiming to put the money back later.

He added that while WP MPs had asked for more to be done, they did not ask to cut back on Budget measures."I think the Workers' Party should come clean to the people," he said. "Do (they) want the Government to increase healthcare or social spending... If yes, how do they propose to pay for the increase?"

Mr Heng also said he was glad that WP leader Low Thia Khiang (Aljunied GRC), who had dedicated the bulk of his 11-minute speech to China's rise, "appreciates our longer-term challenges, and the significance in positioning Singapore as a Global-Asia node".

But he said he was "puzzled" by how Mr Low characterised the GST debate as a "distraction" and said he would rather debate this at election rallies. Mr Heng said he hopes that "when the elections come around, (the WP) will not turn around and use the GST to distract people from the longer-term issues that we face".

A version of this article appeared in the print edition of The Straits Times on March 02, 2018, with the headline 'Heng raps WP for 'dishonest and irresponsible' stand on GST hike'. Print Edition | Subscribe