‘Irresponsible’ not to raise GST as spending needs rise sharply: PM Lee

IT WOULD be irresponsible for the government not to raise the Goods and Services Tax (GST) even though that would be a politically expedient move, because Singapore’s healthcare and social spending is increasing sharply, said Prime Minister Lee Hsien Loong in his National Day Rally speech on Sunday (Aug 21).

But he assured Singaporeans that the government will provide support, such as the S$6.6 billion Assurance Package, which will continue be disbursed “after March next year”. The first Assurance Package cash payout will be made in December 2022. (see *Amendment note)

In his Mandarin speech, PM Lee addressed concerns over the rising cost of living and the steps that the government is taking to better support households.

“We understand your anxiety. Therefore the government has taken steps and is doing everything necessary to help Singaporeans,” he said. “The government will continue to monitor the situation. If necessary, we will definitely provide more support for Singaporeans.”

The Assurance Package was first introduced by then-Finance Minister Heng Swee Keat in 2020 to offset the GST increase, which will go up from the current 7 per cent to 9 per cent in 2 stages — one percentage point each time on Jan 1, 2023 and Jan 1, 2024.

Deputy Prime Minister Lawrence Wong later announced in his maiden Budget speech in February that the package will be topped up by S$640 million to reach S$6.6 billion, and complemented by a beefed-up permanent GST Voucher scheme.

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Last month, Wong announced a further S$1.5 billion support package targeted at providing immediate relief to lower-income and more vulnerable groups.

Separately, PM Lee also gave an update on the Community Development Council (CDC) vouchers scheme — another initiative that benefits all families to help defray some of their daily expenses.

More than 18,000 heartland merchants, hawkers and coffeeshop stalls have already enrolled in the scheme, with consumers spending close to S$180 million worth of vouchers so far. The next tranche of vouchers will be distributed in January 2023, said PM Lee.

“(S$180 million) is quite a sizeable amount. The CDC voucher scheme is an example of how we can utilise our resources in a focused and effective way to ease our people’s burdens,” he said.

Click here for the full list of stories from the National Day Rally 2022.

*Amendment note: An earlier version of this story stated that the Assurance Package would be disbursed “after March”. The Ministry of Finance clarified that the first cash payout will be made in December 2022.