Today in his Budget round-up speech, DPM Lawrence Wong claimed that I uttered an “outright falsehood” in my Budget speech when I said that middle-class Singaporeans are being over-taxed. I rejected that allegation and challenged him to prove that he was not pulling wool over the eyes of Singaporeans.
DPM Wong claimed that middle-class Singaporeans are not over-taxed because the tax-benefit and tax-income ratios in Singapore are low compared to other countries. However, when I asked whether BTO subsidies and land cost are taken into the equation, he ignored my question and I was not given another opportunity to press for an answer.
The HDB transfers about $3 to $4 billion in land cost from public housing into the Reserves each year. Part of this is paid by the price that Singaporeans pay for BTO flats, and the rest is paid by a Government grant to the HDB, which is covered through taxes. The land cost that is paid by Singaporeans via HDB flat prices is not counted as a direct tax paid by Singaporeans, but the various HDB grants and subsidies can be considered social transfers which are benefits for Singaporeans. This gives the impression that the tax-benefit and tax-income ratios look favourable for middle-class Singaporeans compared to the middle-class in other countries, even though Singaporeans are actually suffering under high land costs.
DPM Wong also took issue with my point that top-ups to the various endowment and trust funds are another form of hoarding fiscal resources. He claimed that there is no fiscal slack because many of the funds will be spent in the present, not the future, and hence, we need to raise GST and other taxes. But the fact is all these funds (except for the Development, Contingency and Government Securities Fund) have outstanding assets of more than $80 billion as of FY2021/22, and the annual net decrease in the funds in FY2021/22 was less than 5% of the total funds. These funds will only be used for the benefit of Singaporeans over the next twenty years.
So while the Government claims that it is spending the NIRC for Singaporeans in the present, it did not really do that. Although the Government’s effort to collect more and spend less seems financially prudent, in this time of economic uncertainty, the Government should invest in social programs and services that would provide much-needed relief to those who are struggling. 𝗪𝗵𝗮𝘁 𝗶𝘀 𝗲𝘃𝗲𝗻 𝗺𝗼𝗿𝗲 𝗶𝗻𝘀𝗶𝗱𝗶𝗼𝘂𝘀 𝗶𝘀 𝘁𝗵𝗮𝘁 𝘄𝗵𝗶𝗹𝗲 𝗶𝘁 𝗶𝘀 𝗵𝗼𝗮𝗿𝗱𝗶𝗻𝗴 𝗮𝗹𝗹 𝘁𝗵𝗲𝘀𝗲 𝗿𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀, 𝘁𝗵𝗲 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗽𝘂𝘀𝗵𝗲𝗱 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗮𝘅 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲𝘀 𝗹𝗶𝗸𝗲 𝘁𝗵𝗲 𝗚𝗦𝗧 𝘄𝗵𝗶𝗰𝗵 𝗮𝗳𝗳𝗲𝗰𝘁 𝗺𝗶𝗱𝗱𝗹𝗲-𝗰𝗹𝗮𝘀𝘀 𝗦𝗶𝗻𝗴𝗮𝗽𝗼𝗿𝗲𝗮𝗻𝘀.
Finally, the Government once again accused the PSP of “raiding the reserves” with our Affordable Homes Scheme (AHS) proposal. This is of course, a baseless allegation because the fiscal resources required to implement the AHS is tiny, relative to the NIRC, and would not require a draw down on the reserves.
I also asked the DPM how the AHS, which guarantees every Singaporean of every generation an affordable HDB flat, is less equitable than the current BTO system, where Singaporeans will have to worry about increasingly higher BTO prices. Regrettably, the DPM sidestepped my question.
The overwhelming advantage of the AHS vis-a-vis the BTO system should be apparent to Singaporeans. The Government is now fearmongering that AHS would cause a crash of the resale market. I have already repeatedly shared my reasons on why it will not happen. If the Government was really prepared to consider our proposals, it could implement other policies simultaneously that will reduce or eradicate the price risk. One way is to disclose the compensation provided under VERS for existing flats, which the Government has refused to disclose any details on, despite being asked repeatedly by Opposition MPs.
It is clear that despite the calls by the Prime Minister that a credible Opposition should be able to put forward alternative policy ideas and proposals, this Government is not even debating those ideas and proposals constructively and in good faith in Parliament.
Singaporeans must send a clear message to the Government that this is not what they want.
Singaporeans deserve better.
For Country For People.