Cost of Living Concerns: WP MP Louis Chua Calls for Delay in GST Hike

SINGAPORE: Addressing Parliament, Workers’ Party MP Louis Chua (Sengkang GRC) called for a postponement of the planned Goods and Services Tax (GST) hike scheduled to raise GST from 8% to 9% on January 1, 2024. Chua highlighted the rising cost of living, which he says is threatening the quality of life for many Singaporeans, as well as the government’s stronger-than-expected financial position this year.

Chua pointed to record high revenues from corporate income tax, personal income tax, and GST as indications that the government’s finances are robust enough to delay the tax increase. “It’s difficult not to sense a strong imbalance here,” he remarked, explaining that rising costs are a common complaint among residents in his constituency.

Citing the World Economic Forum Global Risks Report 2023, Chua emphasized that the global cost of living crisis ranks as the top risk over the next two years, driven by inflation and concerns over food and energy supplies. While Singapore’s inflation rate has eased recently, it remains at 4%, above the 1-2% range that Singaporeans had grown accustomed to.

Outlining specific cost increases impacting residents, he noted that electricity prices are up 3.7%, gas prices have risen by 2.3%, and public transport fares are set to increase by 7% next year, with more fare hikes likely in the future. Car ownership costs have also surged, with Certificate of Entitlement (COE) prices reaching new records, as have fuel prices.

Chua questioned whether the GST hike could be postponed given the government’s projected GST revenue increase of S$2.9 billion for this year alone. “With government revenues exceeding projections, is it that challenging to hold off on the next phase of the GST increase?” he asked, leaving Singaporeans to “draw their own conclusions.”