Budget 2018 debate

MPs want burden of GST hike to be eased for vulnerable groups

Some MPs are concerned over whether the GST hike that is to take place between 2021 and 2025 will become an excuse for profiteering, with Ms Lee Bee Wah seeking the formation of a task force to ensure that businesses do not use the GST increase to ex
Some MPs are concerned over whether the GST hike that is to take place between 2021 and 2025 will become an excuse for profiteering, with Ms Lee Bee Wah seeking the formation of a task force to ensure that businesses do not use the GST increase to exploit consumers.ST PHOTO: KUA CHEE SIONG

The 2 percentage point increase in the goods and services tax (GST) to 9 per cent is to take place at a point between 2021 and 2025, but some MPs are already asking the Government if more could be done to ease the burden on vulnerable groups.

Several also asked if the hike could be postponed, should the economy do better than expected.

The groups that concern them most are the low income, retirees and small businesses, and their plight was among the top issues dwelt on during the parliamentary debate on Budget 2018.

Among the 28 MPs who spoke at yesterday's sitting, at least 10 touched on GST-related issues.

Ms Foo Mee Har (West Coast GRC) stressed the importance of helping the less well-off.

She wants the lower-and middle-income households as well as seniors to get more help to cope with the higher cost of living.

Also, the GST offset package that will accompany the rise should explain how it makes up for the higher GST the family will pay, she said.

 

"It must do a better job to assure Singaporeans the GST increase will be implemented in a progressive manner, and that the authorities will moderate the impact of this increase on those who struggle to make ends meet," she added.

Mr Henry Kwek (Nee Soon GRC) called for more active help for retired seniors, especially in monetising their assets to cope with their living expenses.

Dr Lim Wee Kiak (Sembawang GRC) and Nominated MP Thomas Chua worried about the GST impact on business. Dr Lim wondered especially how it would affect tourism and Singapore's competitive edge.

Mr Chua said small retailers worried that "consumers will swarm into Malaysia, particularly Johor Baru, to shop for daily products".

It may become severe from 2024, when the Singapore-Johor Rapid Transit System link starts operating, he added.

But the bigger concern is whether the hike will become an excuse for profiteering, said Ms Lee Bee Wah (Nee Soon GRC) and Mr Lim Biow Chuan (Mountbatten).

Ms Lee wanted a task force formed to ensure that businesses do not use the GST rise to exploit consumers.

Mr Lim noted a Committee Against Profiteering was set up previously to combat such actions and asked if a similar group would be formed before the next hike.

Mr Chong Kee Hiong (Bishan-Toa Payoh GRC) asked if the increase would be postponed beyond the projected timeframe if the economy did better than expected.

Such a move would be unlikely, Finance Minister Heng Swee Keat had said in a Straits Times interview last week.

Mr Chong also asked if the GDP contribution from large infrastructure projects would help cut the reliance on future GST increases to raise revenue. "We also have to consider if we should set a ceiling on our GST rate in the future," he added.

 
A version of this article appeared in the print edition of The Straits Times on February 28, 2018, with the headline 'MPs want burden of GST hike to be eased for vulnerable groups'. Print Edition | Subscribe