Daily Lessons from Life 20 February 2018 - More on Sgp Budget...

1st of all, good to get the Std Chart robber repatriated to Sgp to face trial by agreeing not to cane him if found guilty.

Get him here 1st. Then ... Hahahah!!

"GST hike not the only option considered for raising revenue: Indranee

SINGAPORE: The increase in goods and services tax (GST) was not the only option considered for raising revenue, but it is the most sustainable source of income over the long-term, said Senior Minister of State for Finance and Law Indranee Rajah.

“There are a few other things we have explored as well … But GST is the one that will give you, over the long term, a sustained revenue of sufficient amount that will take care of our expenditure needs, for healthcare, infrastructure, security and education,” Ms Indranee said on Tuesday (Feb 20) on 938NOW’s Talkback call-in programme.

Calling the changes that Singapore faces “unprecedented”, Ms Indranee highlighted the country’s greying demographic, saying that “the number of people who are getting older, in the next five to 15 years, is not something that Singapore has seen before”.

Ms Indranee acknowledged the impact of the GST on low-income groups, but she also explained to a caller why it was not feasible to exempt some basic goods and services from the tax.

“Let's just take rice, for example. Rice is eaten by not only the low income, but also the high income. So if let's say we exempt rice, then you're also exempting the high income from paying GST on rice. And then, do you say you'll have GST only on white rice and not on brown rice? How about organic rice? So, firstly, it's going to be very difficult to administer. But if you say you'll exempt all rice, actually, given that the higher income are the ones who can afford to buy more, they are likely to benefit more,” she said.

Another listener asked if the government would consider bringing back the estate duty - or taxes collected on wealth inherited after an individual’s death - which was abolished in February 2008.

Ms Indranee added that the government also decided against having a wealth tax, because it wants Singapore to be a place for wealth management.

A luxury tax was another form of wealth tax that the finance ministry had considered, but eventually decided not to adopt, partly because it would not have brought in enough revenue.

When asked why the government decided to give out the SG Bonus, considering the projected increased expenditures in the near term, Ms Indranee said that it was because of the government’s commitment to share part of the surplus from this financial year’s Budget.

This comes after Singapore’s revised Budget position for FY2017 showed a surplus of S$9.61 billion, helped by exceptional contributions from Statutory Boards and higher-than-expected Stamp Duty.

The SG Bonus will cost the government S$700 million. 

“The surplus was more than expected, about S$9.6 billion in total … We've set aside S$5 billion for infrastructure, and put that into the Rail Fund. Another S$2 billion, we've set aside for ElderShield ... Then, we’ve got extra, we must share. We must share it with Singaporeans, and that's part of our commitment as the government,” Ms Indranee said."

SMOS Indranee will do well to explain better when facing the media.

1. GST is sustainable - Yes it is. Yet the last time the government raised it to 7%, it did say it is the highest it will go. Yes?

Anyway, by giving almost 3 years before raising it (fr 2021-2025), there is still a chance it may not be required or politically unworkable!!

2. On GST Exemptions on "essential" items. e.g. like rice as an example by her - it is easier to collect the money FIRST n then give GST Vouncgers to the truly needy. Or better still, give in advance based on income level to conserve cash.

3. Mindset change - wealthy folks will buy n eat more rice is ridiculous unless they r rich but not wise as eating rice is unhealthy!!

More aged people don't necessarily means MORE SPENDING as "less is more" re foods n drinks while healthcare will be covered by insurance n healthy living by those currently age 45+. For the Pioneer Generation, the PG Package already covered it. The Silver Generation MUST NOT FOLLOW THE SAME unless everyone adopts SMOS Indranee's mindset of: older means more expenditures!!

4. estate duty - it is too simplistic to say the middle class will suffer more IF we believe it is important to re-distribute "old wealth". We can set the limit to Sgd10m before the estate duty kicks in or even to Sgd50-100m!! In this way, it helps as we still get some estate duty fr the rich!!

5. luxury tax - there will always be people who r luxury goods consumers, hopefully truly can afford them. So, saying it does not bring in a lot of money is silly!! Each scrap counts when the nation needs money RIGHT?

6. SG Bonus - this comes about as the REVISED FY2017 Budget has 5x the originally expected surplus! A good thing. Yet it shows the government does not know what it is doing when planning the Budget!! 

So, give Sgd0.7B out of the surplus of Sgd9.6B.  With 5B to the Rail Infra Fund n 2B for Medishieldlife premium!! Fine n well.

Will be interesting to find out HOW MUCH fr which stat boards? e.g. LTA besides the stamp duty fr "booming higher priced properties transactions n land sales"?

7. higher revenue fr stamp duty - this "pleasant surprise" reveals that despite the government's efforts to try to "cool the market", the market kicked the government's chin In!! It will be nice to know HOW MUCH comes fr the public housing (subsidised n resales) n the private housing sectors.

Ok, I will STOP here in response to SMOS Indranee's responses in the 938Now Talkback show.