The 2022 Budget’s broad-based tax approach is the strongest signal yet that the government is determined to keep Singapore as an inclusive and fair society.
Every Singaporean has a stake in Singapore, every Singaporean has a stake in each other, regardless of race, language, religion, or income bracket.
Singapore is not new to the organising principle of inclusiveness, having spent much of our first two decades as an independent country building the foundation and fighting for an inclusive multi-racial society. This was long before DEI (Diversity, Equity, Inclusion) was inserted into popular lexicon.
While this effort remains a work in progress, the principles of justice and equality are deeply ingrained in many parts of our inner workings, and how the PAP government designs our social policies, which also extends to our monetary and budgetary policies.
In designing the tax policies for Budget 2022, the PAP government is aware that there would be political dividends in placing an inordinate, unfair burden on any one group, especially a minority group. Without mincing words, the easy and soft target here is the rich and wealthy. It is tempting, and easy, to pronounce “let’s tax the rich more!” in place of a broad-based tax such as the GST.
What must be clarified is that Budget 2022 is already designed in a way that the upper income folks pay more than the rest. On the 2nd day of the Budget Debate, Manpower Minister Tan See Leng repeated (twice in one breath) what he described as the mantra for the Budget 2022: “The well-off will pay more and receive less. The less well-off will pay less and receive more.” The measures include raising income taxes on the top earners, raising property taxes on higher valued properties, and raising the additional registration fees (ARF) for luxury cars.
What we have taken great pains to avoid is take a simplistic revenue approach that puts a squeeze on anyone who is doing well or better. Doing so will most likely hurt those from the middle income upwards. It is also deeply unfair and goes against the spirit of inclusivity.
An inclusive outcome is not achieved via a tax system where the bulk or all the burden is borne by a small group of people at the top end. It will cause social division and erode social cohesion if only a small group of people pay more taxes all the time, while the rest simply get to piggy-back on their contributions to enjoy more benefits.
To create a more equal and inclusive society, a broad-based tax like the GST is necessary. It makes a direct link between our demands as voters and our responsibilities as citizens. Break that link and we encourage irresponsible lobbying and playing to the gallery. Someone else will pay for the good things in life. Why not demand more?
That is how the PAP government has designed the system – on the principle of collective responsibility. Everyone contributes towards the cost of delivering services, and everyone benefits from these services, but to different degrees. Those with greater means bear a higher burden, and they draw less on Government support, but they still enjoy some benefits from the Government.
Those with fewer means carry a lighter share, but they still contribute something, and in return they receive more benefits from the Government – more than what they put in, and certainly more than the better-off. In this way we all do our part to help ourselves and one another, and we strengthen the trust that binds us together as a society.
This is a fair and inclusive system.
Cover photo: MSF Facebook page and MOF.