GST to be raised to 7%: Baby Lee
By Lee Foong Ming, Channel NewsAsia
Posted: 13 November 2006 1832 hrs

SINGAPORE: The Goods and Services Tax will be increased to 7 percent, up from 5 percent presently.

This was announced by Prime Minister Lee Hsien Loong in Parliament on Monday but when exactly will be decided later.

Speaking in Malay, Mandarin and English, Mr Lee explained that the hike is necessary to finance the enhanced social safety nets, needed to help the lower income group, and he emphasised that the offset package will more than counter the rise in GST.

While Singapore’s current model to tackle the widening income gap is sound, Mr Lee said the government will take on 2 approaches to deal with the new environment – to strengthen the safety nets and tilt the balance in favour of the lower-income groups who do not benefit from the fruits of economic growth.

To do this, government spending will have to go up. The government now spends some 15 percent of its GDP – one of the lowest in the world.

“This is inevitable over the next 5 to 10 years – infrastructure investments will cost money – R&D is to cost $5b over the next 5 years; as medical technology improves, people age and more will go to hospital to get more treatment so spending is bound to go up. As we tilt the playing field across the board, the lower income will be getting another boost not just once in awhile. Therefore its better to start building resources now so that when we spend more,” said Mr Lee.

To finance this, indirect taxes or the Goods & Services Tax will have to go up.

“It will give us precious extra resources to implement social programmes like Workfare later on. Our aim is to help the lower income groups and the elderly, not to increase their burdens. When we implement the GST increase, it’s not just the GST increase, it’s the package which will fully offset the impact of the GST increase and begin to strengthen the social safety nets and tilt the balance in favour of the low income groups – we will not just raise the GST but we will have a comprehensive offset package,” said Mr Lee.

This package will be weighted more to the middle and the low income groups, especially the elderly, and it will more than offset the GST increase.

“It is not just an offset package to deal with the GST. It is a whole set of measures which we are taking in order to tilt the playing field in favour of the lower income group, which is what we have to add and tally in the balance, and my purpose is to help the lower income group. For the middle income, it will be generally about ok; for the higher income, I think the higher income should end up paying more overall. It’s part of being one society. I’m not going to tax 15% on income tax, I’m not going to tax 25% from GST the way the Scandanavians do, but I have to make the adjustments of 2% which I think is fair and I think Singaporeans will support,” said Mr Lee.

Mr Lee explained that it is better to do the increase now when the economy is doing well, rather than wait till later.

This will give the government time to see how this adjustment can be managed, and to cope better with the unknown forces of globalisation over the next 5 to 7 years.

More details of the GST increase will be announced on 15 February 2007, which is Budget Day.

Another change will be the amending of the Constitution to allow the government to tap the capital gains received from investing the national reserves. – CNA /dt

Happy with your Christmas Present for 2006, Singapore?

And this is the funniest part of all: ‘the hike is necessary to finance the enhanced social safety nets, needed to help the lower income group, and he emphasised that the offset package will more than counter the rise in GST.’

Touching huh? Weeping yet at the immense kindness Baby Lee has shown to the less fortunate of this country? Raising your hopes that when you reach old age there’s a safety net for you?

Just WHAT kriffing safety nets? The kind which even in death wouldn’t qualify or the kind in which a camel will sooner navigate a pinhole before you will even qualify for a single cent of it?

A lot of asslickers will probably buy this bullshit and think 2% more is ‘sup sup sway’ and not 威力无穷… but keep this up and we 不能不穷！！

For the 66.6% of kriffing cipets who voted Tali-PAP: 此恩此德，俺没齿难忘！！