The debate over the Goods and Services Tax (GST) and the use of reserves continues beyond parliament, as Senior Minister of State for Finance Chee Hong Tat and Workers’ Party (WP) Member of Parliament (MP) Jamus Lim wrote forum letters in Chinese media Lianhe Zaobao.
The Government recently passed a GST (Amendment) bill to increase the GST to 8 per cent in 2023, and to 9 per cent in 2024, from the current 7 per cent, in Parliament on Nov. 7, after an intense debate.
Lim’s letter sought to clarify that the alternatives to the GST hike that he had raised in Parliament would not indebt future generations.
Chee’s letter rebutted Lim, saying that WP’s suggestion would leave less resources for the future generations.
Lim rebuts Zaobao forum letter
On Nov. 15, a writer claimed that the alternatives to the GST hike that Lim had raised in Parliament would indebt and harm future generations.
In his “rebuttal” published on the same platform on Nov. 18, Lim said the writer had misunderstood his and WP’s suggestions.
He argued that contrary to the writer’s belief, WP’s alternatives to the GST hike would not leave the future generation impoverished and indebted.
Lim stressed that increasing the Net Investment Returns Contribution (NIRC) by 10 per cent to 60 per cent was just one of the options that WP had suggested for the government to increase their revenue.
He referenced how the government adjusted the NIRC to its current level of 50 per cent in 2008, to make his point that doing so would not reduce Singapore’s future reserves in an irresponsible manner.
Lim also clarified that WP’s suggestion to slow the rate of growth of the national reserves does not equate to taking from or “raiding” the reserves.
He furthered in a related Facebook post on Nov. 20 that an increase in government spending will benefit future generations, as the monies go towards “important public expenditure needs” that will pay off in the future.
Chee Hong Tat rebuts Lim’s rebuttal
Chee weighed in on Lim’s response to the Lianhe Zaobao forum letter in a Facebook post on Nov. 21.
He rebutted Lim’s claims, saying that the basic premise behind Lim and the WP’s suggestion was to “use more of [Singapore’s] past reserves”.
Chee cited the “spending more of the investment returns from our reserves or using more proceeds from land sales” as examples of using the past reserves.
“The WP claims that there is no harm spending more from our reserves or investment returns. But they are mistaken,” Chee said.
He said that if the past generations had spent more of Singapore’s reserves, as WP had suggested, the GST would potentially have to increase to a higher rate of say 11 per cent to “close the funding gap”.
Chee added that WP’s suggestions would also leave less resources for the future generations, which he said “cannot be a responsible thing to do” given the uncertainties and challenges that lay ahead.
The Government passed a bill to increase the GST to 8 per cent in 2023, and to 9 per cent in 2024 in Parliament on Nov. 7.
The opposition MPs who were present, including Lim, recorded their dissent.
Lim participated in the GST debate in parliament and spoke about WP’s opposition to the GST increase.
He also engaged in a number of parliamentary clarifications with Deputy Prime Minister Lawrence Wong and PAP MP Sitoh Yih Pin.
Chee was also involved in the GST debate in parliament.
He rebutted Progress Singapore Party’s Leong Mun Wai’s analogy opposing GST hike, saying filial piety and the taking care of elderly is a virtue.
Top image screenshot from video by Ministry of Communications and Information/YouTube