SINGAPORE - The Workers' Party should "come clean to the people" when making suggestions on government spending, said Finance Minister Heng Swee Keat in his round-up Budget speech on Thursday (March 1).
Mr Heng said it was "dishonest and irresponsible" to fall back on "politically expedient options" that may not solve Singapore's longer-term challenges.
Commenting on WP assistant secretary-general Pritam Singh's alternative suggestions to boost revenues, Mr Heng called these "distractions" and added that they are not viable alternatives to the proposed goods and services tax (GST) increase.
The GST hike from 7 per cent to 9 per cent, announced in Mr Heng's Budget speech last week, is expected to kick in sometime from 2021 to 2025.
Over the three-day Budget debate, various MPs, including those from the WP, had suggested alternatives to the GST. Some also asked if the increase could be delayed if the economy does better than expected.
In particular, Mr Singh (Aljunied GRC) had asked on Tuesday if the Government would consider using land sales to boost revenue, and if there could be a slight increase in the Net Investment Returns Contributions (NIRC) framework spending cap of 50 per cent.
Mr Heng noted that the WP MP asked too if Singapore could rely on GST on imported services. But Mr Heng said that 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 for procurements for their businesses.
Referring to Mr Singh, Mr Heng said: "He even suggested that through our Smart Nation efforts, we can increase tax collection from self-employed hawkers and taxi-drivers".
Mr Singh cannot be serious, said Mr Heng.
"Any serious-minded person will appreciate that not one of these (suggestions) is a viable alternative to a GST increase. They are distractions."
Responding later, Mr Singh said he disagreed with Mr Heng's statement that the suggestions were "dishonest", citing that the NIRC is becoming an increasing source of revenue.
Mr Heng agreed that more money is being drawn from NIRC contributions, which is why more diverse sources of revenue are needed.
On Mr Singh's suggestion to increase the 50 per cent cap temporarily to fund infrastructure spending, Mr Heng added that this would be another way to dip into the reserves while claiming to put the money back later.
Noting that WP did not support the GST hike, Mr Heng said: "If we were to do this, future generations of Singaporeans could easily end up in serious deficit."
He added that while WP MPs had asked for more to be done, they did not ask to cut back on any specific item.
Non-Constituency MP Daniel Goh suggested giving Silver Support to those living in large flats and Mr Dennis Tan, also a Non-Constituency MP, asked the Government to enhance elderly care efforts.
"It is easy to ask for more, but not a single one of the MPs, except Mr Pritam Singh, even mentioned what it would cost, nor how to fund it," said Mr Heng.
"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 said he was glad that Mr Low Thia Khiang (Aljunied GRC) "appreciates our longer-term challenges, and the significance in positioning Singapore as a Global-Asia node".
Mr Low had dedicated the bulk of his 11-minute speech on Wednesday to China's rise.
However, Mr Heng said he was puzzled by how Mr Low had characterised the GST debate as a "distraction", saying that he would rather debate this at election rallies.
Mr Heng said he hopes that "when the elections come around, (Mr Low) will not turn around and use the GST to distract people from the longer term issues that we face".
In response, Ms Sylvia Lim (Aljunied GRC) said Mr Low's point was that announcing the GST hike now distracts the debate from other measures implemented in the Budget, as it takes place in the future.
On the WP's position not to raise the GST, she said WP intends to support this year's Budget, but it is "ridiculous" to expect a responsible party to support something when "not all the information is available".
She added that WP's support of Budget 2018 "should not be mistaken as our support for a GST hike in a later Budget".
All eight WP MPs in the House on Thursday eventually voted "No" to the Budget. Mr Low was absent and did not vote.
Ms Lim also argued that land sales include leases, but Mr Heng countered that most of the Government's land sales are of long leases, from 30 to 99 years.
"If you are rigorous about it, you really ought to be spending no more than 1 per cent of land sale proceeds," he said.
