Higher taxes inevitable, and Govt will explain ahead of hikes where money is going to: PM Lee

SINGAPORE - Reiterating that it is a matter of when and not if taxes will be raised, Prime Minister Lee Hsien Loong said that "well before the time comes", the Government will explain to Singaporeans what the money is needed for and show how it will benefit the young and old. 

He was speaking at the People's Action Party (PAP) convention on Sunday (Nov 19), where he touched on the PAP government's priorities when Parliament reconvenes after it is prorogued following the Budget next year. 

Apart from investments in infrastructure and the economy, the government will incur heavy spending on social services and safety nets, including healthcare.

These expenditures are necessary, Mr Lee stressed. "They are a vote of confidence in Singapore's future," said Mr Lee. "Just as our forefathers saved and invested to build what we, the current generation, are enjoying today, so too we must plant trees so that our sons and daughters, and their sons and daughters, can enjoy the shade."

However, the investments and social spending are costly and "we have to make sure that we can afford them", said Mr Lee, reiterating that the government has to plan ahead. 

While there is enough revenue for this current term of government, its spending has been going up, and it must rise further in the future, Mr Lee noted.

The Government must "stretch our dollars, and make every dollar count", he said.

Referring to Finance Minister Heng Swee Keat's comments during his Budget speech in February, Mr Lee said Mr Heng was right in saying that it was a matter of time when taxes need to be increased to fund the growing spending needs.

During the Budget speech, Mr Heng pointed out that the government's annual healthcare spending over the past five years has more than doubled to around S$10 billion in the 2016 financial year with enhanced subsidies and expanded services. This will continue to rise as Singapore’s population ages, he said.

The projected doubling of the MRT network is also expected to cost more than S$20 billion over the next five years, along with the new Terminal 5 at Changi Airport which will cost “tens of billions of dollars”, said Mr Heng.