Budget 2018 debate

Is Budget vote a vote for tax hike?

This year’s Budget and the GST hike are separate issues, says Ms Sylvia Lim.
This year’s Budget and the GST hike are separate issues, says Ms Sylvia Lim.

Parliament yesterday saw one of its most intense Budget debates in recent years, when People's Action Party ministers faced off against Workers' Party MPs. For the first time since 1986, all WP MPs present voted against the Budget. Below are three themes that emerged during the 40-minute exchange.

The Workers' Party (WP) had planned to vote to approve this year's Budget, even as it made plain it did not support the planned hike in the goods and services tax (GST).

The two are separate issues, WP chairman Sylvia Lim (Aljunied GRC) argued yesterday.

After all, she said, the GST hike is happening only at an undetermined time between 2021 and 2025 and is not part of this year's Budget measures.

Finance Minister Heng Swee Keat countered, however, that the Budget presented the Government's overall financial policy.

"This debate is a debate on the financial policy of the Government, and I have articulated in this Budget the financial policy of the Government, (which) includes the policy to raise GST in the coming years, between 2021 and 2025," he said.

He then asked for a division - for MPs to vote through a device at their seats instead of by the usual voice vote. The result: 89 MPs said "yes" while eight MPs - all from the WP - said "no".

The WP has nine MPs in Parliament, but secretary-general Low Thia Khiang (Aljunied GRC) was not present during the vote.

It was an unexpected turn of events - probably even for the WP itself.

  • 8 Number of MPs who voted "no" against the Budget. They were all from the Workers' Party.

Ms Lim had said during her exchange with Mr Heng that it was the WP's intention "to support the Budget when the vote is called". However, this should not be mistaken as support for the announcement of some possible GST hike in a later Budget, she added.

She noted that the Government had not yet determined when the GST hike would kick in, as that would depend on economic conditions, spending needs and the buoyancy of Singapore's tax revenues.

"Fair enough," she said. "Similarly, I don't think we will be in a position to take a stand on that until the information is available at the relevant point in time, so I think it is ridiculous for the Government to expect us as a responsible party to support something where all the information is still not available and we don't have a crystal ball."

Mr Heng argued, however, that the WP's stance amounted to one in which it "must know ev-erything" before deciding on anything.

"I think if I had taken that approach, if previous finance ministers had taken that approach, that I must know every item of expenditure before I can support you, before I know how much to raise, we would have been in serious deficit long, long ago."

During the Budget debate on Wednesday, Mr Low had argued that the announcement of the GST hike was premature and "an unnecessary distraction" from the overall vision articulated in the Budget.

Instead of focusing on the important strategies needed to take Singapore into the future, the debate has ended up being more about the GST hike, he said.

Mr Heng yesterday countered in his debate with Ms Lim: "Now, this is a real distraction because if the WP truly believes that all the things that you and your members have advocated - spend more on this, spend more on these groups, spend more on others, you will agree that all these will require new revenue measures."

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A version of this article appeared in the print edition of The Straits Times on March 02, 2018, with the headline 'Is Budget vote a vote for tax hike?'. Print Edition | Subscribe