So, the amendment of the GST bill is proceeding through the parliament, meaning the hike is just around the corner. And, I know, we've been through this topic many times already. We've heard it all from politicians (both PAP and opposition) arguing for and against the GST hike to 9%.
But is there an independent way a sideline observer can consider everything and determine whether the increase is really necessary?
Most people, after all, are no experts on economics. We can barely manage our household budgets so how could laymen really judge whether a bump in taxes is important ahead of issues that are - allegedly - going to be faced 5-10-20 years from now?
And if you don't trust politicians why would you trust some random (and, gasp!, foreign!) blogger on the internet, like me? Similarly, how could you believe some renegade "activists" who moved to Taiwan, pretending to report "independent" news about Singapore?
We all have our biases but if you were able able to subdue them for a minute, could you evaluate the decision dispassionately? I believe you can - and here's how.
Forget about all of the arguments, ageing society, ballooning healthcare costs, all of the figures, all of the handouts, vouchers etc.
Instead, I would encourage you to think about the political context and things we all know for certain (regardless of sympathies):
1️⃣ GST increase is an unpopular move. NOBODY likes when their taxes are being raised - there's no denying that. People who like PAP will somewhat grudgingly accept it as necessary, while those who hate it will grandstand and scream "SEE, WE TOLD YOU!". I think we can all agree on that.
2️⃣ There is a broadly shared sentiment that PAP is somewhat weakening politically, particularly after losing Sengkang in 2020. That, again, is an observation shared not only by the most optimistic oppies but also many wary PAP supporters, who see it as a possible threat to the government in the future elections.
3️⃣ On top of that, the ruling party is facing a difficult transition in leadership, with Lawrence Wong waiting take the reins over from Lee Hsien Loong ahead of another GE, due just 3 years from now (and only one year after the full 9% GST is going to kick in). He was probably the best candidate out of all of the frontrunners but hardly an ideal one - again, even PAP supporters will agree.
To sum up - politically PAP has every incentive to avoid a controversial tax hike at this point in time.
In fact, the pandemic and the ensuing inflation crisis are the perfect excuses that it could use to walk back the increase without losing face, while telling everyone just how much it cares about the nation etc.
"Circumstances have changed, we're delaying the GST increase until the situation calms down." - would anybody protest or see it as admission of an error or defeat?
Not only would it help PAP score points with many voters but also deprive the opposition of ammunition. What would WP and others do then? Suddenly talk how GST should be raised after all?
And yet PAP hasn't done that.
Instead, despite these enormously inconvenient circumstances, it plows on, even as inflation is inflicting pain on everyone.
Do you seriously think the ruling party is on a suicide mission? Do you believe it wants to lose more constituencies and let more opposition MPs into the parliament after the next GE? Do you think it wants to kick off the tenure of the new Prime Minister with controversy and maybe even political defeat at the polls?
If, given all of these circumstances, the people who are - objectively speaking - pretty decent at their jobs (even if you don't like them, come on) keep saying: "we have to increase the GST to stave off a future crisis of public finances", do you seriously think they don't have good enough reasons for it?
Critics like to accuse PAP of ignoring people's needs, being elitist, self-serving and power-hungry. And yet all that it has done on GST is only hurting it politically. If it was really so self-serving it would have used the opportunity to eject, delay and score a PR win with the voters.
We may not see or understand all numbers behind the decision but we certainly can understand what would be politically expedient in this situation (particularly for a party facing headwinds).
It just so happens that it's the exact opposite of what the PAP government is doing.
Ask yourself: would it really do it if there was no better way or it wasn't absolutely necessary?
