Collective approach, not ‘Robin Hood Budget’: Tharman

SINGAPORE — While some have described it as a “Robin Hood Budget”, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam yesterday sought to dispel that impression, saying it is not a government strategy to tax the rich more to finance social spending especially for the needy.

Speaking at a television forum on Budget 2015 that was unveiled on Monday, Mr Tharman brought up the notion of collective responsibility several times. During the forum, Mr Tharman addressed questions on the Budget measures from the public and from a panel comprising Nanyang Technological University economist Walter Theseira, Centre for Seniors executive director Lim Sia Hoe, Singapore Furniture Industries Council president Ernie Koh and Alcon Singapore Manufacturing general manager Mark Chua.

He said that while government spending will increase over the next five years, the bulk of the spending are for the common interest and not one particular group, such as the poor. “And someone needs to pay for it. We all pay for it,” said Mr Tharman.

He added: “Most people pay for it by GST (Goods and Services Tax). But those who are better off also pay for it through their property taxes, which are higher than others, and income tax. So, everyone pays ... for the common good but the rich pay more and the poor get some benefits in the system, and that is fair.”

He reiterated the importance of a “collective approach” when discussing taxes and the obligations of society. “This is our society … We need to take collective responsibility. If someone needs help, the Government should do its job, I will contribute to the Government so it can do its job,” he said.

Among other things, Mr Tharman also addressed concerns that a higher Central Provident Fund salary ceiling would reduce the take-home pay of middle-income workers. He pointed out that, as a whole, the middle-income segment have seen their earnings rise substantially over the past decade. He added: “The net effect of raising the salary ceiling isn’t very much different for the individual, because he is putting money into his Ordinary Account and taking it out to pay his mortgage. The net effect is the employers paying more.”

Meanwhile, Standard & Poor’s Rating Services (S&P) issued an unsolicited AAA rating on Singapore following the Budget statement.

The ratings agency said the Budget “shows the strength of the government’s institutional and governance effectiveness”, and would keep Singapore’s credit strong despite its ageing population. XUE JIANYUE