Workers' Party's proposals will add to the burden of the next generation21 Nov 2022
I refer to the 18 Nov letter by Assoc Prof Jamus Lim, refuting Mr Lin Wenqing.
Unfortunately, A/P Jamus Lim has continued to repeat the inaccurate assertions made by him and his colleagues in Parliament.
The Workers’ Party has come up with several proposals as alternatives to the GST increase, such as spending more of the investment returns from our reserves or using more proceeds from land sales to fund current expenditure. The basic premise behind these proposals is to use more of our Past Reserves.
The Government now uses up to 50% of the investment returns from our Past Reserves as revenues for the annual budget. We have already explained that this revenue stream will only keep pace with economic growth over the medium to longer-term. But our public spending needs, especially in the area of healthcare, are rising well above GDP growth.
The WP claims that there is no harm spending more from our reserves or investment returns. But they are mistaken.
Imagine what would have happened if our forefathers had done what the WP proposed. Let’s say they had spent more of our reserves in previous years, and left us with 20% less in investment returns today. Then the GST would have to increase to a higher rate of 11% rather than 9%, in order to close the funding gap and to ensure sufficient resources to look after our growing number of seniors.
So the implications of the WP’s proposals are clear. If we were to adopt their proposals, we will leave behind less resources for our children and grandchildren in the future. Surely this cannot be a responsible thing to do, especially as we enter a world with greater uncertainties and challenges ahead of us.
Chee Hong Tat
Senior Minister of State for Finance and Senior Minister of State for Transport