So far, the only alternatives to the impending GST hike in Singapore are based on taking money from somewhere else. But what if there was one that didn't require any new taxes or draining the reserves?
In fact, what I'm about to point to is one of the bedrocks of Singapore's success and prosperity over the past half a century. It's been tried, tested and proved itself to be very effective.
Immigration :)
We know that the reason for the increase of GST is the growing cost of healthcare due to ageing of the society, which is a result of declining fertility.
In other words - Singapore is facing cost pressures because it does not have enough people.
Now, even if Singaporean families started having more babies, it's unlikely that the fertility rate would reach the replacement rate of 2.1 children per woman (it's 1.1 currently).
Secondly, even if, by some miracle, this replacement rate was reached, it would take another 20 to 30 years for these new children to grow up and become working adults, contributing to the local economy and government budget.
Not to mention that, in order to achieve this, Singaporean families would have to spend a lot of time and money raising them.
But if all that the country needs is more people - preferably qualified, talented, tax-paying adults - why not simply import them from abroad?
They don't have to be raised, they can enter the economy immediately, making good money, paying their income taxes and consuming goods and services with a 7% GST rate.
It is more reliable too, because while you don't know how well children will turn out, you can quite well determine who has good enough qualifications that are required by local employers.
You can also calibrate the number of individuals admitted each year to match the necessary replacement rates in the society. I don't think Singapore would have any problems reaching the required quota either, given how attractive it is as a place to live and how many would want to move here.
Isn't it funny that all of the anti-immigrant complainers have actually directly contributed to the GST hike they will have to bear from now on? And, of course, today they are complaining about the higher tax.
Which was perfectly avoidable, as we can see :)
