Finance Minister Can’t Confirm $1.4 Trillion Reserves?

Today we come to the end of the Budget and Committee of Supply sittings that typically span over a month from February to March in Parliament each year. As it was widely anticipated to be a GST-budget dominated debate, Hazel and I had from the beginning set our sights on 3 main reasons why the GST hike is not necessary nor desirable.

The first message is to highlight to Singaporeans that the Government is sitting on a huge pile of reserves which is constantly generating substantial revenue, enough to fund future healthcare expenditure. It is a matter of opinion whether one should tap on it, but we must first let Singaporeans know decidedly that the reserves (which is growing) and the unutilized revenues are there. Again, I hope that the Minister can confirm this in Parliament.

It is disappointing to note that the Second Finance Minister, Ms Indranee Rajah, repeatedly avoided confirming the $1.4 trillion figure (video below) while accepting that if that was the figure published by a Government agency, then it should be correct. The Government reported $1.4 trillion of financial assets (which forms part of our national reserves) in the Government Financial Statements Report for financial year-end 31 March 2021 (pictures below). This report is published by the Ministry of Finance and not the Monetary Authority of Singapore.

The second message from us is for this Government to cut back on expenditure. We questioned the bluntness of the ‘Job Support Scheme’ that inadvertently compensated profitable companies. We also questioned the rationale of privatizing profits and socializing losses in the case of SPH Media Trust. However, the replies to these queries were neither clear nor convincing. We will continue to pursue these matters in future sittings.

The third message is to look for alternate sources of revenue other than the GST. Singaporeans are already paying numerous indirect taxes and they come as a heavy burden to low-income Singaporeans as well as the middle-class. However, there is an option for higher direct taxes on the rich (top 10%) and the corporates. The debate on personal income tax and corporate tax is incomplete and Hazel and I will pursue this further.

We would at the least expect the Finance Minister to give Singaporeans a clear picture of how the GST burden is distributed. He should state clearly the additional GST that is to be paid by the top 20%, middle 60%, bottom 20% and foreigners, rather than deflecting the question by using an unconvincing histogram chart.

There appears to be a common thread in that the Finance Minister does not confirm the GST burden, and avoids the debate on personal and corporate income tax; the Second Finance Minister does not confirm the $1.4 trillion figure; and the Manpower Minister does not give a straightforward answer to the job problem.

In the interest of a more robust debate we hope we will get more direct answers from the Ministers in the future.

Thank you all of you for following Budget 2022.

Singaporeans deserve better.

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