Goods and Services Tax (GST) was first introduced in Singapore on April 1, 1994 at 3%. Recently, there had been a proposed increase in GST,from the original 5% to 7%.
I believed this policy for GST increase is in conjunction with Singapore principle of pragmatism as it provide a source of revenue for Government to implement far reaching reforms and improvements to Singapore. The proposed GST increase was needed to help the lower income group and there will be a offset package,well to literally offset the GST hike for the lower income group.Or that is according to the Government.
The speech by Prime Minister Lee Hsien Loong some time ago spoke about in order to finance social programmes like Workfare, the Goods & Services Tax will have to go up. This in turns allow the government to fully help offset the GST increase for the lower income families and the elderly so as not to burden them to pay more. This which in my humble opinion, is kind of ironic as you increase the GST so as to help the poor people offset the increase. I mean it is like I punch you so that I could say sorry for punching you. Well, of course the increase in GST is not only for the offset package , it also to help increase the government spending to aid the economy and to keep up with time. All this require much more from the government coffers and where else to get from but the money government collected from GST. Hence, the steep rise.
To sidetrack a little.Most newspaper would state the hike as from 5% to 7 % and most people reading the newspaper or other form of mass media would think of the hike as a increase in a mere 2%.However being a good maths student i did some simple calculations in my head and found out the hike increase is actually more of like 200% . Thus we actually going to pay for more than we actually know. To think, most people are already complaining at what they thought as a increase in 2%.
Back to topic. Anyway, amid the protests about the steep rise, government still went ahead and the impeding raise in GST have now become a solid fact. This show the determination of our sensible government in doing what is the best for the future of Singapore even when the whole world are against it. Which is good in a way. Most people wanted the GST hike to be done gradually, in phases. In which the government declines to do so. I personally agree as increasing the GST slowly will allow some vendors to jack up their prices and like what PM Lee Hisen Long said is better to increase now when the economy is doing well. This give the government time to see how it could be managed, and to cope better with the forces of globalisation over the next few years. I believe this follow the principles of pragmatism and forward looking as the government look at the whole big picture and did not let the few complaints affect it decision,being practical.Secondly,the hike change is also in view of recent strong competition from neighbouring countries which give envidence of the principles of being forward looking.
In conclusion i support the hike as it have many benefits like helping the low income families with more new packages so that they will not be poor anymore and being able to build more facilities for the ageing population. Also, to keep up with time, and remain competitive amid the developing countries, more infrastructure and technology need to be in place which could only be done by increasing government revenue or specifically, the GST. Most importantly, it aid our economy. Yes, it might be a tad too steep too increase so much at one time but if not now then when?
