Responding to a question on whether the GST rate of seven per cent would be raised after the coming General Election, as was the case in 2006, PM Lee said: “I very much doubt that, unless we go wild in our spending plans and of course we’ll run out of money and then you’ll have to raise the GST. But if we have prudent budgets and we’re careful in our plans and if we grow the economy, I think we should be in good shape.”— CNA Report, Question Time with the Prime Minister, 11 Apr 11.
1. I won’t rule out raising GST. (That’s already a big faux pas– any western newspaper would already have a headline that screams: “PM does not rule out raising GST after election!”)
2. GST will be raised if we have no economic growth (I assume the PAP will not propose “wild” budgets)
Coming from a former Finance Minister with a Double First in Mathematics, this assertion is just plain unbelievable! And what’s more incredible is that the 12 “panelists” didn’t nail him for it.
First, if the economy tanks, the last thing you wanna do is raise taxes, especially consumption taxes! Did PM Lee forget his Economics 101?
Second, one does not raise GST willy-nilly, GST is a relatively permanent fixture! it’s not something we raise when the economy slows down and lower when the economy grows!
A decision to raise or lower GST cannot be made on the basis of one year’s GDP or even two; it is a relatively permanent decision that will have a significant and lasting impact on ALL economic activity in Singapore.
What an irresponsible statement from the PM!
Last, no govt shld ever talk about raising GST until it has exhausted all sources of revenues, and cut all wasteful and unnecessary govt spending. How can raising GST be the first option whenever the Budget needs balancing? PM Lee should work on the bloated cost of govt before even talking about raising GST. That must be the last resort, not the first option.
Again, no one challenged him on this point.
From the above, I can only conclude that (a) the 12 panelists were chosen for their inability to ask questions; (b) the PAP’s economic theory says taxes can and should be raised during an economic slowdown; (c) PM Lee lives in a world of his own where raising GST is the first weapon of choice and not the weapon of last resort.
I’m not voting PAP, no matter what!