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GE2015: Tharman debunks opposition "myths", reiterates Singapore's new path

Saturday, September 5, 2015 - 23:14

[SINGAPORE] Singapore has started a new path, and it is doing so from a position of strength, Finance Minister Tharman Shanmugaratnam said on Saturday night at the People's Action Party (PAP) rally at Petir Road.

He also called on Singaporeans to see through the false promises made by opposition parties in the current general election campaign, and recognise the burden these would impose on the average Singaporean.

"We have started on a new path for our country, a path that gives great optimism for all Singaporeans," said Mr Tharman, who is leading the PAP team contesting in Jurong GRC.

"This is a path we start on from a position of strength, not a position of despair," he said. "We start off with reserves, not debts." And it is also a strength that Singapore has a society where people can come together, despite their differences.

The government started shifting its policies about 10 years ago, to create opportunities for everyone and to do more for the vulnerable and those who need more help, he said, noting that changing environments required policy adjustments.

"We have more to do, we are not a perfect country, we are not a perfect government," Mr Tharman said. "We are honest, we say what the challenges are. We are quite straight about it, we are quite straight about possible solutions...we are straight about how we fund our solutions."

"This is what good government is about, telling everyone upfront where the money is coming from, who is going to pay, who is going to benefit."

Giving examples, the minister said the government is spending 50 per cent more on weaker children in primary school than on the average child to help ensure social mobility; it is tackling equality in the workforce in a way that will not cause workers to lose their jobs.

Taking aim at some of the proposals made by opposition parties, Mr Tharman said: "Please be clear about them and see through promises that are false promises."

There is "no way" governments can give something to everyone without raising taxes for the middle income groups, he pointed out. As well, "you cannot do it by just by taxing the top one per cent, that is a bluff" - the very rich have the means to move their money around.

Citing countries like France, Germany and the UK, Mr Tharman said the middle class pays very high taxes for everyone to get something.

In France, the income tax for the average worker is 15 per cent (in Singapore, it is close to zero). Added to the VAT general sales tax of 20 per cent (apart from discounts for some items), the average person in France pays well over 20 per cent of income in taxes to the government. That's apart from payroll taxes, which helps to fund the French healthcare system.

If that is to be the case in Singapore, it would mean the average worker here, who earns S$3,800 every month, would be paying S$850 in taxes each month.

"The question is who pays, who benefits?" Mr Tharman said, noting that the rich also benefit in some other systems.

Most pay some tax in Singapore, mostly through the goods and services tax. But in Singapore, for every one dollar in taxes the middle income pays, the family gets back S$2 in subsidies, especially after the latest Budget. In comparison, in Finland and the UK, the average family gets back S$1.30 and S$1.40, respectively, for every one dollar paid in taxes.

At the bottom 10 per cent in Singapore, a family receives S$6 in subsidies for every dollar of tax paid. And at the top 10 per cent, each dollar of tax paid will only yield 20 cents in subsidies.

"That's what I call a fair system," Mr Tharman said.

He said the government has been preparing for increased social spending. It is already utilising up to 50 per cent of net investment returns as allowed under the Constitution, and has taken steps to ensure it has enough set aside for the next five years - to the tune of S$4 billion a year - to meet higher spending demands.

He chided the opposition, for not only avoiding talking about the higher taxes that will result from their proposals, but for suggesting that the government would raise taxes after the election.

"That is just cheap, that is just cheap," he said. "We have been upfront, we have raised the revenue we need for the next five years. This is what responsible politics has to be about."

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