Photo of Heng Swee Keat from Yahoo

Finance Minister Heng Swee Keat today (Mar 1) spoke in Parliament saying that the 2% GST is insufficient and hinted that he will raise taxes further:

“The 2 percentage-point GST increase will not fully cover Singapore’s expenditure needs, but only make the fiscal gap more manageable.”

The Finance Minister also said that he will make sure companies do not raise prices beyond the amount of GST increase. The naive proposal is aimed to control inflation and a “Committee Against Profiteering” would be set up to check market prices:

“The Government is prepared to convene a Committee Against Profiteering to ensure businesses do not use the GST hike as an excuse to raise prices beyond the increased tax.”

The PAP Minister also refused to seek alternative sources to fund government spending like the Terminal 5, and gave a motherhood statement:

“Each generation should strive to pay for its own spending through sustainable means, instead of drawing down more than is prudent from the reserves or by borrowing and passing on the cost of current spending to future generations…We cannot fund our plans to secure Singapore’s future on the basis of episodic windfalls. If we are fortunate to have these occasional windfalls, we should do the responsible thing and save most of it for future needs.”

Minister Heng Swee Keat then praised himself for being honest and upfront for announcing the GST increase:

“By announcing the GST increase early, he said the Government is being honest and upfront about national needs, and setting out what needs to be done. We are giving ample notice to citizens and businesses that we will need to raise GST. I hope that it helps everyone to understand our shared challenges in coming years.”