Photo of Heng Swee Keat from Straits Times

In a state media interview with Straits Times as a propaganda to alleviate public discontent at the GST increase yesterday (Feb 22), Finance Minister Heng Swee Keat said that his favourite phrase is “Money Not Enough”, which is why he is raising the GST to 9%:

“That Jack Neo’s lovely movie Money Not Enough was a phrase that I used in many of my meetings. For instance our revenue growth will be difficult because if you look at the tax changes around the world, in fact it’s in the other direction. So you find countries are looking at reducing corporate taxes and all that and this will have a ripple effect throughout the world and so we have to continue to monitor this very carefully. And, again, looking at the various projections we think that we are okay for up to 2020 but we will certainly be short. We’ll face a deficit or we will not enough revenue to do what that we need to do between 2021 and 2025.”

Deliberately misleading his criticisms, Minister Heng Swee Keat linked GST revenue directly to expenditures on the ageing population:

“Well, I believe that, first, Singaporeans will appreciate that I speak plainly about this and set out these issues clearly and we can debate whether there is a need for us to take better care of our elderly and so on. I’m happy to debate that.”

The PAP Minister is also insistent on having the 2% GST increase, regardless if there is a higher surplus:

“I’ll be very happy if that happens but I will caution that it is unlikely because the existing taxes will have to be extremely buoyant and the growth will have to be very, very high in order for us to be able to come up with that extra revenue to meet the expected rise in expenditure.”

On his Budget’s proposal to borrow money from statutory boards, Minister Heng Swee Keat said that Singapore used to borrow money during the 1960s and 1970s, and so Singaporeans should accept landing the country in debt like before:

“You’re indeed correct that HDB, LTA and all that are already borrowing. But what is the change? I think the change is in two areas. One is the scale of the borrowing because when we look at projects whether it’s Changi Airport, whether it’s Cross Island Line, the High-Speed Rail, the scale of borrowing is going to be significantly higher. And have we borrowed for major infrastructure projects in the past? Yes, we had. In the earlier years of our development, we borrowed from a variety of sources including multilateral development banks like the World Bank, Asian Development Bank and so on to fund some of these major long-term infrastructure developments. But as our economy grew and the tax collection was strong, we stopped borrowing some time in the mid 1980s for our major infrastructure projects. And now we are coming back to another major spike in our infrastructure needs. And therefore we will have to think about how to do this in a way that is fiscally sustainable and we’ll have to structure the projects very carefully to do this, and at the same time do our best to lower the financing cost.”

Finance Minister Heng Swee Keat also hit out at his critics, saying that he is very sad to hear that people are saying the government is wasting money:

“If people feel that these are profligate spending then I will be very sad…First of all, I hope that Singaporeans appreciate that the expenditure trends that we are talking about… are the right ways to spend. I mentioned healthcare, security, education, lifelong learning and so on. If we think that all those are unnecessary expenditure, then all that we need to do to balance it is just to cut all those expenditure, or not provide for an increase.”

The PAP Minister also openly lied in his interview saying that he limited the growth of the ministries’ budget. According to the official Budget expenditures figures, some ministries like Transport (52.6%), PMO (15.6%) and Trade (18.2%) saw double digit growth rate, while Health budget was reduced instead:

“And in fact I’m squeezing all our ministries very hard by limiting their budget growth factor. In fact, some ministries, especially the smaller ones, are complaining that it’s getting harder and harder to manage.”