Monday, November 13, 2006

GST: Why is our Country Increasing them again?

In the 1st Parliament Session after the GE 2006, with the confidence of being backed by 66.6% of the population, PM Lee Hsien Loong has announced that the GST will be increased to 7% to better help Singapore's Poor in the increasingly Globalised World.

It is of my extremely biased view that the increase of GST will not likely be used to improve the lives of the Poor, as the Singapore Government is paranoid towards any policy that hints of welfarism in any slightest sense.

The Government may speak of having just dished out the Progress Package early this year, but I am inclined to believe that it is nothing but an Election Carrot designed to lure swing voters. Thus I am thinking of some alternative reasons as for why the Government is increasing the GST.

The uses of TAX as defined by Wikipedia:

Used to carry out functions such as

enforcement of law and public order,
protection of property,
economic infrastructure — roads, legal tender, enforcement of contracts, etc.,
public works,
social engineering,
the operation of government itself

To fund welfare and public services, such as

education systems,
health care systems,
pensions for the elderly,
unemployment benefits
energy, water and waste management systems,
public transportation.

I shall now substract the following out of the above, with explations given.

Health Care Systems - Don't we have Medisave, where the people put in their own monies, not Government Subsided?

Elderly Pension - CPF is taken from the people, thus the Government do not need to pay a cent to the people

Unemployment Benefits - With such stringent schemes to make sure nobody can cheat the system, surely there can't be that many sucessful applicants?

Energy, Water and Waste Management Systems - The Energy and Waste Management are Privatised a long time ago. Meaning they aren't Government concerns. So they only have Water to worry about.
Public Transportation - With SMRT and SBS Transit being private Companies and the ever increasing fare hikes, I don't believe the Government actually had to subsidise for Transportation Costs.

Running only 8 out of the 12 Services stated in above, it is thus a wonder that the GST still needs to be increased.

I wonder if the following are the reasons for increasing the GST...

To recover hidden costs lost over foreign invesments? (Like Shin Corp?)
To ensure that the Progress Package can be given every year, due to the extra monies collected form the citizens. (FIFO, but it does make the Government look good)
To finance the Increasing Operation Costs of Daily Government Operations (Due to World Class Salaries, otherwise the civil servants will get corrupt)
To improve on the Baby-Bonus Schemes (Increasing costs of Social Engineering)
Or all of the above?


redbean said...

hi abao,

i am still very hopeful that the gst progress package will benefit me. all of you don't be so negative can or not?

you got a nice blog here.

Anonymous said...


i think abao's reasoning is sound. So what if government spending is 15% of GDP? Do we know the actual costs versus the spending?

in the longer run, the poor will pay more tax on GST than the benefits the gahmen returns.

redbean said...

i agree. abao's reasoning is sound. and yours too. in the long run, for returning a little, they got to keep everything forever.

this is just like the one or 3 mth rebate for conservancy fee etc. after that, just continue paying.

we will see how long can this trick apply before something happens.