Shortly after Deputy Prime Minister (DPM) Lawrence Wong opened the second reading of the Goods and Services Tax (Amendment) Bill by announcing a S$1.4
Shortly after Deputy Prime Minister (DPM) Lawrence Wong opened the second reading of the Goods and Services Tax (Amendment) Bill by announcing a S$1.4 billion boost to the Assurance Package, more than 15 Members of Parliament (MPs) debated the proposed GST hike in Parliament on Nov. 7.
A key theme in their speeches: Is the GST hike the right move or an irresponsible one?
Louis Chua, MP for Sengkang GRC from the Workers’ Party, voiced his opposition, questioning the urgency of increasing the GST from 7% to 8% in 2023, and by another 1% in 2024. He noted that Singapore’s core inflation hit a 14-year high of 5.3% in September, asking whether the GST hike might worsen inflation and further increase the cost of living. Chua likened the situation to scoring an “own goal” in football when already down by several points.
DPM Wong, addressing concerns, shared that the government will top up the Assurance Package by S$1.4 billion, bringing it to S$8 billion, to help Singaporeans adjust to the hike. He added that more details would be revealed in the 2023 Budget. However, Chua warned that low- to middle-income households could face long-term impacts once the temporary benefits of the Assurance Package wear off, emphasizing, “Assurance packages are temporary, while a GST hike is forever.”
Sengkang GRC MP Jamus Lim called for essential goods and services to be temporarily exempted from the GST hike, labeling the increase as “irresponsible” given the uncertain inflation outlook. He stressed that essentials have been subject to the greatest price volatility and argued that targeted relief is necessary to support families.
On the other hand, PAP MP Saktiandi Supaat (Bishan-Toa Payoh) expressed confidence that the government would enhance the Assurance Package if economic conditions worsened but sought clarification from Wong on whether the hike would proceed in such a scenario. Saktiandi also highlighted the benefits of GST as a broad-based tax, which even applies to tourists.
MP Liang Eng Hwa (PAP-Bukit Panjang) supported the hike, emphasizing the need for higher revenue to fund increasing expenditures in healthcare, education, and social support. He praised the GST system for its “uniqueness” in offsetting the impact on lower-income groups, while placing the burden on higher spenders.
Wrapping up the debate, DPM Wong reiterated that despite inflationary pressures, the economy has recovered, and resident unemployment rates are back to pre-pandemic levels. He highlighted the ongoing support measures, such as the GST Voucher scheme, which permanently helps lower- and middle-income households.
Wong stressed the need for sustainable solutions over politically convenient measures, saying, “We will not just go for politically expedient measures that may very well end up being unviable or unsustainable. Instead, we focus our efforts on designing effective policies to benefit all Singaporeans.”
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