Singapore Media Watch

Friday, November 17, 2006

Your views: To PM Lee: The needy will hold you to it to re-distribute some $1.6b yearly from GST hike

Attached is copy of news article of 13 Nov 2006 taken from CNA on the primary justification for the GST to be increased from 5% to 7%.

(Read )

I note the noble efforts of the PAP government to "help the lower income group".

However, I sincerely hope that it is not just NATO ("No Action Talk Only") in the government's sincerity to help this lot.

To show its sincerity in walking the talk, I would expect to see the following in the coming years (actually, should be annually as a matter of fact) on how these lower income group are to be helped:

1. First, project how much will be generated with the GST increase - eg the 2% rise will generate an increase of some $1.6 billion to be distributed to this lower income group that needs help (assuming annual GST of $4b before the increase?);

2. Next, identify who are these citizens who need help (eg. those earning below $1000 per month or households having total income less than $2000 per month?);

3. How many of these are there? (eg if the bottom 20% households earn less than $2000 pm, then there should be about 200,000 eligible households that qualify if there are some 1,000,000 households in total);

4. Based on the above, a simplistic calculation will mean each household will receive some $8,000 per year ($1,600,000,000 divided by 200,000 households).

(Note: These figures are for illustration only as the government is in a better position to come up with the exact figures on how the resultant 2% GST increase will be distributed back to the needy.)

Remember, the government must be transparent on how the increased GST is to be spent to help the lower income group (as its justification for the increase) as I believe most of the affected Singaporeans have no problem in extending help to the needy.

And remember that this must be an on-going annual exercise unless the GST is reduced back to 5% in the future (which I honestly believe will not happen).



  • I was initially naive and thought the government would debate over this 2% hike but apparently, it has already be casted in iron. Looks like we just have to bite our lips and go on with life.

    However, for the lower income who will bear the brunt of this GST hike, I believe your proposal makes sense and help to blunt their anger. Best if the government can already lay out the plan now for all to see...

    Without proof that this 2% hike is indeed serving its purpose, skeptics will always sneer and wonder where all the money went. There is $500,000 to proof that Singaporeans are indeed willing to help the needy (How much of them came from the high income, I wonder ? I have to admit though that I too did not contribute)

    It matches the government's plan to be more transparent as well.

    By Anonymous Anonymous, at 10:59 AM  

  • Dun think the PM will see this letter...

    Even if does, somehow in the end of the day there will be an excuse that the 2% is used on some form of spending.. And they may relate it to "helping lower income grp",

    But directly, we dun receive the full 2%....

    Seems to me that the 2% goes to recover the cost of SHin Corp deal

    By Blogger ZHU_GE_LIANG_PLAY_CS, at 5:46 PM  

  • hello
    PAP's idea of helping the poor is to tax the poor and give to the poor. whats so hard about that?

    By Blogger Gpaddington, at 8:46 PM  

  • Why is it necessary to increase the GST? Given the impression to the general public and the outside world, Singapore is a wealthy state in SEA. Yet, we see reports of govt-linked corporations are making millions $ profits and the billions $ reserve but still the costs of living, medical services and basic essentials are keep going up and now the GST....just an excuse to help the poor. No wage increase! If Singapore is so wealthy, why the increase of GST, we see wastage of public fund spent e.g. renaming of the Marine front, promoting the millions $ smile..etc. why don't these fund channel to the needy. I wonder? Maybe the govt is run out of fund, million $ is "peanuts".

    By Anonymous Anonymous, at 7:24 AM  

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