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 yearโs 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.
๐ฆ๐ถ๐ป๐ด๐ฎ๐ฝ๐ผ๐ฟ๐ฒโ๐ ๐๐ถ๐๐ฐ๐ฎ๐น ๐ฅ๐ฒ๐๐ผ๐๐ฟ๐ฐ๐ฒ๐
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 $๐ญ.๐ฏ๐ฑ๐ง 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 $๐ญ๐ฌ๐ to $๐ญ๐ฑ๐ a year ($๐ญ๐ญ.๐ฎ๐ 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.
๐ฅ๐ฒ๐๐ถ๐ฒ๐๐ถ๐ป๐ด ๐ผ๐๐ฟ ๐๐ ๐ฝ๐ฒ๐ป๐ฑ๐ถ๐๐๐ฟ๐ฒ
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 ๐ฎ.๐ฎ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป 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.
๐๐ฟ๐ฒ๐ฒ๐๐ถ๐ป๐ด ๐ง๐ฎ๐ ๐๐ป๐ฐ๐ฟ๐ฒ๐ฎ๐๐ฒ๐
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 Hengโs 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 ๐ฝ๐ฒ๐ฟ๐บ๐ฎ๐ป๐ฒ๐ป๐.
8. I would like to ask what is the long term target rate for the GST? The 2% hike to ๐ต% ๐๐ฆ๐ง will only increase fiscal revenue by about ๐ฏ% and that will definitely ๐ป๐ผ๐ 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?
๐๐ฒ๐๐ฒ๐น๐น๐ถ๐ป๐ด ๐๐ต๐ฒ ๐ฃ๐น๐ฎ๐๐ถ๐ป๐ด ๐๐ถ๐ฒ๐น๐ฑ
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 ๐๐๐ ๐ฃ๐ค๐ฉ ๐๐ฃ๐จ๐ฌ๐๐ง my point that it is ๐ป๐ผ๐ 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.
