Govt didn't decide on GST hike till after polls
SM Goh says the increase is to help fund Workfare Bonus
By Li Xueying
ABU DHABI - CHATTER in Singapore may be that the People's Action Party (PAP) Government deliberately waited until after the General Election to announce unpopular policies.
But the idea of raising the goods and services tax (GST) was thought of only after the General Election ended last May, Senior Minister Goh Chok Tong said yesterday when explaining the politics of the GST increase.
'I will tell you quite candidly and honestly, during election time, the idea of (increasing) GST had not come in yet.
'Because we just thought, we have got to do the Workfare Bonus, we will look at the sums later on,' he told Singapore reporters here in an interview to wrap up his nine-day trip to Morocco and Abu Dhabi.
News of the GST increase - from 5 per cent to 7 per cent - was announced in November, six months after the General Election.
The reason for the increase is to help pay for the Government's plan to spend more on the lower-income group.
Details of the GST increase and offset package will be announced on Budget Day on Feb 15.
As for the PAP's tendency to wait until after winning elections before announcing unpopular policies, SM Goh said: 'That is not quite wrong. That is politics.'
He cited how a party in Australia, during an election some years ago, campaigned for a rise in the GST. 'And that party lost,' he said with a laugh.
The PAP, on the other hand, had campaigned during the General Election on what it would do for Singapore, he said.
Helping the needy was one of its key platforms and to do so, the Workfare Bonus for lower-income workers later became a permanent feature of the social safety net.
This bonus was introduced last year in the Progress Package given for the first time to Singaporeans, who started receiving the money on the weekend before the May 6 polls.
About 300,000 Singaporeans had qualified for the bonus then, and the total payout was more than $137 million.
'If the opposition had asked us, how do you intend to raise the funds to support your Workfare Bonus, then of course the PAP will have to answer,' said SM Goh.
He added: 'If we have enough, we won't raise the GST; if we don't have enough, we raise the GST.'
SM Goh then went on to explain how the PAP does battle at election time.
During the campaign, 'you concentrate on what you want to do - the positive parts'.
'After the election, you got to translate your pledge into reality. Therefore, you have to give Workfare bonuses, and you therefore come up with proposals to raise funds.'
The GST increase will also pay for 'anything we want to spend more on, education, for example'.
'That is very important. Invest more in the people, invest more in the elderly - all these require funds,' he said.
The need for 'painful' policies to finance these programmes is something that 'every Singaporean' knows, he said.
'And in five years, the pain must produce good results, and everybody will say that the pain was worth it. And if the pain is not worth it, we will lose more support at the election.
'But every time, the pain was worth it. That is the beauty of working with Singaporeans. A lot of complaints, but at the end of the day, they understand.'
SM Goh declined to give details of the offset package to compensate those affected by the planned GST increase.
But when asked about the political impact of the hike, he said: 'The biggest impact we hope will be the positive side - how we will use the GST.
'What you do with the funds that you have managed to raise through the increase, whether 1 or 2 per cent, that is more important.
'The benefits must outweigh the increase in prices.'
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