SINGAPORE - Trust is the key factor that determines whether citizens will accept unpopular decisons that Governments have to make, said Prime Minister Lee Hsien Loong.
He highlighted the importance of maintaining trust, at a time when the fourth generation of leaders take up a bigger role in running the country - from overseeing their own portfolios and projects, explaining their ideas to Singaporeans, to implementing policies and making them work.
He pointed to the introduction of the Goods and Services Tax in Malaysia, and how it became a hot-button issue during the recent general election there.
The former administration had defended the tax as being a necessary source of revenue, PM Lee noted on Wednesday (May 16) during the debate on the President's Address.
But ultimately, voters rejected its explanations and instead swung to Pakatan Harapan, the opposition coalition of parties led by Dr Mahathir Mohamad, which vowed to abolish the GST within 100 days of coming to power.
They did so not because of the economic merits or demerits of the GST, as from an economic point of view the GST is better than the sales tax that it replaced, PM Lee said.
"But politically, Malaysians linked the GST with other complaints they had with the previous government... and they said: No, I don't accept this."
PM Lee added: "Does that mean that no government should ever raise taxes? Alas, that's not the real world. From time to time the country will need to spend more - on healthcare, on defence, on education, or something else."
There is no choice but to raise taxes if revenues are not enough, he said. And the government has to convince the population that it is raising taxes for the right reasons.
"Whether the voters accept that will depend not just on the arguments, but also crucially on whether they trust the government," PM Lee said.
In his Budget speech this year, Finance Minister Heng Swee Keat had announced that the Government will raise GST from 7 per cent to 9 per cent some time between 2021 and 2025.
PM Lee on Wednesday noted that governing means having to do difficult things from time to time, when they become necessary.
He added: "Leadership means you have to explain, persuade, and convince people that we know what we are doing, and we are doing it for good reason. That is the way to maintain people's trust, and trust is critical."