Support package to ‘cushion impact’ of impending GST hike to be announced in Budget 2020: DPM Heng

SINGAPORE — A support package to cushion the impact of the impending Goods and Services Tax (GST) hike will be announced at the Budget next year, said Deputy Prime Minister Heng Swee Keat on Sunday (Nov 10).

Mr Heng made the announcement during a speech at a People’s Action Party (PAP) convention, which he described as possibly “the last party gathering before the next General Election”.

He said that the GST Voucher is a permanent scheme to help seniors and low-income households cope with the tax hike.

“At next year’s Budget, I will provide more details of the GST support package. This will cushion the impact of the increase, for all Singaporean households,” he said at a gathering of about 2,500 PAP activists at the PAP65 Awards and Convention at the Singapore Expo. The conference was held to mark the 65th anniversary of the PAP’s founding in 1954.

“More will be given to those with less, because this is fair.”

The Government had given such support packages each time it raised the GST, but this time it has announced it in advance, Mr Heng said.

However, he added that the support package is not an “election goodie”, and that it will only be given when the GST is increased next term.

While the Government has yet to decide on the exact timing of the planned GST hike, which is from 7 per cent to 9 per cent, Mr Heng had earlier said that it would take effect some time between 2021 and 2025.

Still, Mr Heng — who is expected to succeed Prime Minister Lee Hsien Loong when he steps down — acknowledged that “some unhappiness will remain” even with the support package.

Thus, he urged his comrades to “help explain” the rationale for the GST increase to Singaporeans.

“Like generations before us, we are taking a bit of pain for the good of our children, and generations to come.”

Prime Minister Lee, in a later speech during the convention, said that the early announcement of the support package is also to make sure that the opposition cannot “stir” up the issue.

“You can be sure that they will try,” he said.

He pointed out that former Workers’ Party chief Low Thia Khiang had, during last year’s Budget debate, asked why the PAP was talking about the GST hike when it has yet to take effect.

Mr Lee said that his party builds trust by being upfront and frank with Singaporeans.

“Few governments in the world tell you before an election that they plan to raise taxes,” he said.

He could have “kicked the can down the road” and left this to the future PM and his team, said Mr Lee, but the PAP had to do “the right and responsible thing” by explaining why the GST increase is unavoidable and giving advance notice.

UNCERTAIN GLOBAL ENVIRONMENT

Besides announcing the support package, Mr Heng also spoke on the challenges for Singapore amid an uncertain global environment.

Among others, he said that the US-China trade war is “hurting everyone”.

“I know many are worried, last quarter, we narrowly avoided a technical recession. We are watching our economy vigilantly, he said.

“We must not fear, we have the plan and resources to take action if needed. More importantly, even as we navigate these turbulent waters, we must also keep an eye on what lies further ahead,” said Mr Heng.

He noted that societies around the world are facing widening inequality, growing divides between generations, and deeper political polarisation made worse by social media.

Singapore is not immune to these, and has ridden through previous crises such as the Asian Financial Crisis in 1997 and Global Financial Crisis in 2008 well, said Mr Heng.

MAINTAINING TRUST AND INTEGRITY

Mr Heng also stressed to his comrades that the 4G leadership is committed to serve with integrity and uphold trust.

"The 4G is committed to working with our people. We are ready to win their trust. But to earn our privilege to lead, Singaporeans must trust that the members of the PAP, the 4G leadership especially, are men and women of integrity,” he said.

This was why he had tabled a motion in Parliament on the governance of the Aljunied-Hougang Town Council earlier in the week, said Mr Heng.

“Some supporters felt that we should not move this motion as it could be misunderstood. But in this case, we were convinced that it would be wrong for us to keep silent,” he said.

“The issues were very serious. They called into question the integrity of elected officials,” Mr Heng added.

Spelling out his rationale for tabling the motion, Mr Heng said that “as the party in power, it is our responsibility to ensure the integrity of the system in Singapore”.

He added: “We must and have taken a clear stand on this matter of principle.”

“As PAP activists, the motion should be a solemn reminder that we set an even higher bar for ourselves, and Singaporeans will expect no less.”

Stating that the party’s convention may be the last party gathering before the next General Election, Mr Heng said: “Singaporeans will judge us not simply by what we say during the campaign period. They will look at what we have done over the last five years. They will look at our legacy over the last 65 years.”