Finance Minister Heng Swee Keat has asked Workers' Party chairman Sylvia Lim if she would apologise and withdraw her allegation that the Government deferred the goods and services tax (GST) hike because it was trapped by earlier statements it made about having enough funds.
He said the Government had consistently said it has enough money for its current term of office, but would need to raise revenue beyond that to pay for increased spending, especially on healthcare.
In a statement issued yesterday, he said: "Now that Ms Lim has had an opportunity to check the record, will she withdraw her allegation, as an honourable MP should, and apologise to the House? Or does she still hold she has carte blanche to raise any and every suspicion, rumour or falsehood in Parliament, and continue to insist on them regardless of the facts?"
Ms Lim's claims during the Budget debate on Thursday sparked a heated exchange between her and Home Affairs and Law Minister K. Shanmugam.
This was after she said it was her suspicion that in the run-up to the Budget debate, "there were some test balloons being floated out about the fact that the Government needs to raise revenue".
She added: "The public seized on the fact that DPM Tharman and perhaps other leaders had earlier said that the Government has enough money for the decade. So, the public pointed out that, 'Hey, you know, is this a contradiction?'
"I rather suspect myself that the Government is stuck with that announcement. Otherwise, you know, if their announcement had not been made, perhaps we would be debating a GST hike today," she said in Parliament.
The Government had consistently said it has enough money for its current term of office, but beyond that, it needed to provide for increased expenditure, especially on healthcare, with increased taxes.
The Prime Minister first mentioned the need for the tax increase in his 2013 National Day Rally speech. The Minister for Finance had reiterated this in his 2017 Budget Statement, and did so again at a constituency function a few months later. The Prime Minister spoke again of the likelihood of a tax increase last November.
Taking all these statements together, two things are clear: One, that there is no need to raise taxes for the current term. But two, there is a need to raise taxes for the future. There were no test balloons.
Significantly, Mr Low Thia Khiang himself had demanded of Mr Heng during the 2017 Committee of Supply debate: 'If the minister is indeed considering an increase in GST before the end of the decade, I hope he can be upfront with Singaporeans now so that they are not blindsided by the Government as they were with the sudden 30 per cent increase in water price.' This is precisely what the Government has now done by announcing the forthcoming GST increase early.
FINANCE MINISTER HENG SWEE KEAT
She was referring to a statement by Deputy Prime Minister Tharman Shanmugaratnam, who said in 2015 when he was finance minister that the revenue measures the Government had already undertaken would provide sufficiently for increased spending planned until the end of the decade.
Rebutting Ms Lim on Thursday, Mr Shanmugam set out the timeline of comments from government leaders on the need to increase taxes, to show they had been consistent on the matter. As early as 2013, they flagged the need to raise taxes in the future, even though there was no need for more revenue in the current term of government.
Mr Heng took up this point in his statement. He said that Prime Minister Lee Hsien Loong mentioned the need for a tax increase during the National Day Rally in 2013.
After this, Mr Heng himself spoke of the likelihood of a tax increase at the 2017 Budget debate and a constituency event a few months later.
Then last November, PM Lee reiterated the need for taxes to rise.
Mr Heng said: "Taking all these statements together, two things are clear: One, that there is no need to raise taxes for the current term. But two, there is a need to raise taxes for the future. There were no test balloons."
He added that Ms Lim was "in effect accusing the Government of being untruthful when it says that it had planned ahead, and that its proposal to raise the GST between 2021 and 2025 was the result of such planning".
Noting that Ms Lim had said in Parliament that her statement was based on "suspicion", Mr Heng said the facts on the issue were public.
The Ministry of Finance had set out the facts in a letter to The Straits Times' Forum Page on Wednesday, he said, adding that he and Mr Shanmugam had also now done so.
Mr Heng said: "The Government had consistently said it has enough money for its current term of office, but beyond that, it needed to provide for increased expenditure, especially on healthcare, with increased taxes."
He said MPs were "entitled to raise suspicions in Parliament, if they honestly believed them, but honest belief requires factual basis".
"And when clear factual replies have been given, an honourable MP should either refute them with further facts, or acknowledge them and withdraw their allegations, especially if the allegations had insinuated lack of candour or wrongdoing on the part of the Government."
He also pointed out that WP chief Low Thia Khiang asked the Government to be upfront with Singaporeans if it was planning a GST hike.
During the 2017 debate on the spending plans of ministries, Mr Low had said: "If the minister is indeed considering an increase in GST before the end of the decade, I hope he can be upfront with Singaporeans now so that they are not blindsided by the Government as they were with the sudden 30 per cent increase in water price."
Referring to Mr Low's remarks, Mr Heng said: "This is precisely what the Government has now done by announcing the forthcoming GST increase early."
Mr Heng said in his Feb 19 Budget Statement that GST would go up by 2 percentage points to 9 per cent some time between 2021 and 2025. WP MPs voted against the Budget on Thursday, saying they did so solely because they could not support the GST increase.