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Second Finance Minister Tharman Shanmugaratnam has rebutted arguments by Opposition MPs that there is no need to raise the Goods and Services Tax just yet simply because other sources of revenue are in the pipeline.
Summing up the Budget debate on Thursday, he said this was not the way a responsible government conducts its fiscal policy.
In the last two days, the three Opposition parliamentarians had argued against the GST hike.
To fund programmes for lower income Singaporeans and to take the country forward, Non-Constituency MP Sylvia Lim suggested using gambling revenue which she said could come up to $1.5 billion to $3.8 billion each year.
But to get this amount of taxes, Mr Tharman said the two integrated resorts need to generate combined gaming revenues of S$15 billion to S$33 billion.
Mr Tharman said: "I don't know whether she really believes this. But to put it in perspective for her, all the casinos in Las Vegas put together they earn $10 billion a year in gaming revenues. So our $15 to $38 billion which she hopes we will get from the two resorts...means that our two integrated resorts must produce 1.5 to 4 times the gaming revenues of the whole of Las Vegas."
Like Mr Low Thia Khiang and Ms Lim, Potong Pasir MP Chiam See Tong had also advocated using revenue from land sales.
However, Mr Tharman explained that proceeds from the sale of land on short leases are indeed treated as operating revenues for spending purposes.
For longer leases, the proceeds go into the reserves, but there they earn income that's drawn for spending, as part of the Net Investment Income.
Mr Tharman added: "There is another reason why we should avoid linking land sales directly to government revenues. If we do that, we open ourselves to the danger of subsequent governments being motivated to sustain a property boom."
The Opposition had also suggested the government wait for the corporate income taxes to grow and use revenues from personal income taxes and stamp duties since they have increased sharply last year.
To this, Mr Tharman replied that the government hopes that with improved competitiveness and growth, corporate taxes will continue to grow well.
But that does not mean corporate taxes will increase as a percentage of GDP.
The Second Finance Minister said both Mr Low Thia Khiang and Ms Sylvia Lim wanted the government to take the easy way out by waiting for future revenues to materialise when there is a bonanza in gaming revenues and corporate taxes increase faster than GDP.
Mr Tharman said: "Then we find out that we run out of revenues and are desperate, we raise GST. That's not the way a responsible government conducts its fiscal policy. We make no apologies for the fact that we anticipate Singapore's future needs, prepare ourselves to meet them and go forward from a position of strength. That is the way we have done it and how we must continue to do it, go forward with confidence, not uncertainty." - CNA/ch
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