| |
| |
![]() |
| |
|
| |
|
| |
|
SINGAPORE: Wrapping up a two-and-a-half day Budget debate on Wednesday, Finance Minister Tharman Shanmugaratnam said this year's Budget is one that has its sights set firmly on longer term growth and building social resilience, while giving out immediate short-term benefits.
He also announced that the one-year freeze on government fees, which kicked in last July, will be extended till the end of 2008.
This will include fees charged on all government-provided services such as school fees, ITE and polytechnic fees, charges in public car parks, and all licence fees.
However, regulatory charges such as those in the transport sector and the development charges in the property market will not be frozen because they must continue to serve the purpose of regulating demand.
The one-year freeze was implemented when the GST rate was raised from 5 to 7 percent last year.
Over the past few days, MPs have asked if the GST hike was too much, too soon, bearing in mind that in the end, the government had ended up with a S$6.4 billion surplus.
Stoutly defending the move, Mr Tharman said the hike did not contribute to the surplus and it was still needed not just for social expenditure, but also for infrastructural investments.
In fact, he said the S$1.4 billion collection from the additional 2 percentage points was equal to the GST offsets and Workfare Income Supplement paid out in FY 2007 alone.
He said: "The last thing we should do is to wait until there is an economic downturn, households are facing financial difficulties, and the government faces declining revenues before we raise the GST because then, we would be unable to provide a full offset to Singaporeans."
He added that there is also no guarantee that surpluses – which allow for more long-term social spending on medical and educational needs for example – will always occur.
Mr Tharman also noted that the bottom 60 percent of all resident households contributed less than 25 percent of total GST collected. This is because high-income Singaporeans, as well as tourists and foreigners, account for the bulk of GST collections.
On why there is such a large disparity between the deficit projected for last year and the large surplus that eventually resulted, Mr Tharman said estimates were based on the reality of the time, not optimistic assumptions.
And while it would improve on its "budget marksmanship", he stressed the government does not set soft targets just so that it could exceed them.
The finance minister also roundly rejected MP Inderjit Singh's view that a "grow-at-all-costs" policy had overheated the economy and worsened the income divide.
Mr Tharman stressed that growth is volatile and that one has to take advantage of the situation when times are good and go for growth as that will make Singapore more competitive in the long term.
"The significant opportunities come in cycles – chemical crackers, once every seven to eight years. When they are ready to invest and we say no, they'll go elsewhere. If we miss them, we miss the whole cycle," he said.
On the issue of costs, Mr Tharman said while inflation is causing immediate concern, it is not a crisis as people still have jobs.
He added that while immediate and targeted help is there for the less well off, the real issue is not about more handouts but how to keep economy going in the long term to help all Singaporeans.
Mr Tharman said: "Our basic philosophy has been and must remain what Mr Zaqy Mohamad, Mr Zainul Abidin Rasheed, Dr Lily Neo, Ms Lee Bee Wah, Mrs Josephine Teo and Dr Lim Wee Kiak expressed – we must keep alive the incentive for every Singaporean to strive and maximise opportunities to do better for themselves and their families."
This philosophy, he concluded, would keep Singapore going through the good years and the bad.
Get the Finance Minister's speech here
- CNA/so
|
