Every year, the Budget and Committee of Supply debates are the most important sessions in Parliament. The Budget Debate will take place first followed by the COS debates. In my first experience of this year’s Budget Debate which was spread over 3 days from 24 Feb to 26 Feb, I felt that the time allotted was insufficient to allow for a thorough debate especially on the alternative views.
There are at least a few more important clarifications like the ones below that I would like to make in order to present a fuller picture to Singaporeans.
𝗦𝗶𝗻𝗴𝗮𝗽𝗼𝗿𝗲’𝘀 𝗙𝗶𝘀𝗰𝗮𝗹 𝗥𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀
1. If NIR or Net Investment Return is at $39.2B, why did DPM Heng strongly refute my claim that there is no lack of fiscal resources in the foreseeable future. If the entire NIR is used in the budget, it will more than cover our basic deficit of $31B and gives a surplus of $8.2B for FY2021. Under the professional management of MAS, GIC and Temasek, our total financial assets of $𝟭.𝟯𝟱𝗧 should be able to earn the same level of NIR consistently in the long term even after taking into account the short-term financial market volatility.
2. Even without the NIR, the total financial assets will continue increasing because of two factors: (1) our land sale revenue of about $𝟭𝟬𝗕 to $𝟭𝟱𝗕 a year ($𝟭𝟭.𝟮𝗕 for FY2021) and (2) the further accumulation of foreign reserves from our large capital account surplus. Recent experience has shown that regional uncertainties has triggered even more capital inflow into our country.
𝗥𝗲𝘃𝗶𝗲𝘄𝗶𝗻𝗴 𝗼𝘂𝗿 𝗘𝘅𝗽𝗲𝗻𝗱𝗶𝘁𝘂𝗿𝗲
3. I would also like to ask him if the expenditure side of the budget could be reviewed to suit a different socio-economic structure post-Covid. For example, if there are fewer foreigners, can we slow down on some of our infrastructural and housing developmental expenditures.
4. It is also puzzling to me that the more than 𝟮.𝟮 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 foreigners residing in our country did not contribute enough tax revenue to relieve us from having to bear more tax increases. Are a substantial portion of the foreigners not productive and hence not paying taxes? Or maybe the additional infrastructural developments to house the foreigners costs more than the taxes they pay? If the foreigners are not net fiscal revenue contributors, then expenditure increases cannot be blamed solely on the increase in social expenditure for Singaporeans.
𝗙𝗿𝗲𝗲𝘇𝗶𝗻𝗴 𝗧𝗮𝘅 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲𝘀
5. With the NIR revenues and possibility of expenditure cuts especially as the Covid pandemic tapers off, where is the urgency to raise taxes? Even if tax increases are necessary, is it justifiable to single out GST as the only viable source of tax increase?
6. Despite DPM Heng’s rebuttal on the viability of raising other taxes like the additional stamp duty on property transactions and wealth taxes and so on, further debate with more concrete data is called for. His arguments on the other taxes are debatable but the regressive nature of GST is undeniable.
7. Is it fair to impose further tax burdens on the middle-income and lower income Singaporeans when they already have little or no ability to pay, never mind about how many times benefits they get relative to the taxes they pay? The support given to cushion GST is only planned to last for between 5 to 10 years, but the GST hike is 𝗽𝗲𝗿𝗺𝗮𝗻𝗲𝗻𝘁.
8. I would like to ask what is the long term target rate for the GST? The 2% hike to 𝟵% 𝗚𝗦𝗧 will only increase fiscal revenue by about 𝟯% and that will definitely 𝗻𝗼𝘁 be enough to pay for all the spending increase that they are purporting. If there are more hikes, the burden to the middle-class Singaporeans will get heavier and heavier, where is the end?
𝗟𝗲𝘃𝗲𝗹𝗹𝗶𝗻𝗴 𝘁𝗵𝗲 𝗣𝗹𝗮𝘆𝗶𝗻𝗴 𝗙𝗶𝗲𝗹𝗱
9. The PSP is 100% for an open Singapore because no one in their right mind will think that Singapore can survive or operate as a closed economy. But we also think that a rebalancing of the local-foreign worker mix is urgently needed to address the many problems affecting Singaporeans who are below the top quintile. Both Minister Ong and Minister of State Gan 𝙙𝙞𝙙 𝙣𝙤𝙩 𝙖𝙣𝙨𝙬𝙚𝙧 my point that it is 𝗻𝗼𝘁 a level-playing field for Singaporean workers because foreign workers do not need to contribute to CPF.
In conclusion, we urge the Government to allot more time to the Budget debates in the future. We believe that it is important to deliberate the issues in more depth for the Singaporeans to understand our financial position better.