ICYMI, Members of Parliament of the People’s Action Party took Opposition MPs to task during the robust debate on Budget 2024 which recently concluded. Here are seven issues which our MPs called out the Opposition.
#1: Workers Party MP Jamus Lim asked Deputy Prime Minister Lawrence Wong if he still believed that the timing of raising Goods and Services Tax (GST) was justified given that it would likely have contributed to domestic inflation.
DPM Wong said the impact of the GST increase is “once-off” and not permanent. It is not the key driver behind Singapore’s inflation spike, he said. The GST was raised to 9 per cent this year from 8 per cent last year.
The Government has deferred the impact of the GST increase on most Singaporeans, especially the lower-income groups, by more than five years through the Assurance Package to help Singaporeans to cope with cost-of-living pressures, he added.
DPM Wong threw the question back at A/P Lim, “If we had not done it at the time we did, when will be a good time to do it? And if we were to do it this year or next year, will the Opposition therefore support it? I seriously doubt so.”
He added: “So, I think our approach is, let us do it correctly. Let us do it in good time, put in place, make sure that our fiscal system remains sound and always ensure that we have sufficient revenues to cover our spending.”
#2 Progress Singapore Party Non-Constituency MP Leong Mun Wai urged the Government to employ more permanent schemes rather than temporary handouts during every annual Budget.
DPM Wong said the government does not see this as either-or choice, employing both solutions. This was particularly true the past two years as inflation increased and temporary relief measures were necessary.
“Mr Leong seems to suggest that handouts breed dependencies, but permanent schemes do not breed dependencies. But a poorly designed permanent scheme will breed dependencies permanently, forever. Is that not worse?” he said.
On structural schemes that are not temporary, DPM Wong added: “We continue to fine-tune them to make sure that they are designed well, so that we are providing all the support and assurance we need while also upholding our key ethos of individual responsibility and self-reliance, and avoiding dependency and entitlement.”
#3 NCMP Leong Mun Wai claiming that Workfare Income Supplement (WIS) scheme would create a “handout mentality”. Instead, PSP advocated for a minimum living wage of $2,200 a month
Vikram Nair (Sembawang GRC) disagreed with PSP’s position. arguing the two-pronged model the PAP Government has proposed is better than PSP’s model.
“What the Government has instead done is a two-pronged approach. For those industries with profits to sustain higher wages, the PWM is being rolled out and this is better than a minimum wage because it guarantees not only a minimum wage, but wage increments for lower-wage workers,” he said.
A structural issue in the job market, he noted, is stagnating wages for lower-income levels compared to higher-income levels. To address this, the Government rolled out the progressive wage model (PWM) and Workfare Income Supplement (WIS) scheme. PWM is a wage structure that increases wages through skills upgrading and productivity improvements. WIS tops up salaries for lower-income workers. Both schemes expanded this year to cover more workers.
For workers whose wages remain low, or those industries or jobs not part of PWM, Mr Nair noted the WIS will kick in to provide an income supplement. “WIS does not impose a burden on employers but meets employee’s need for higher wages. I believe this two-pronged model is better than the model proposed by the PSP,” he said.
#4 Leader of Opposition Pritam Singh on how the Government should be even more forthcoming with information to allow Opposition to make better decisions on the budget
Muralli Pillai (Bukit Batok SMC) described LO’s argument as a “red herring” as there is “already sufficient information available”.
LO had referred to a media report saying that some economists had also made the point about lack of information being forthcoming from the Government.
Based on what DPM Wong has shared during the budget statement, Mr Pillai noted the NIRC amount – an important part for Budget planning – can be estimated. The variance of the operating revenue and the expenditure is also known. MPs could ask questions on the statement of accounts which is subject to scrutiny of the Estimates Committee.
“I would say that there is no real obstacle for anyone of us in this House to articulate holistically why more money or more resources should be spent for a particular policy imperative,” he added.
#5 WP MP Louis Chua hopes introducing refundable investment credit does not undermine the spirit of implementing the global BEPS 2.0 framework and that additional tax revenues from BEPS 2.0 will not be returned to MNEs through other means
Sharael Taha (Pasir Ris-Punggol GRC) questioned Mr Chua’s position on attracting foreign investments to Singapore, which seemed to suggest limiting the tools the government could use.
Acknowledging the difficulty of attracting foreign investments, Mr Sharael was glad the government introduced a refundable investment tax credit to attract high-quality investments this year.
“Mr Chua mentioned not going against the spirit of BEPS 2.0. But I worry if philosophically, he is comfortable limiting the capability of the tools we have to attract investments?” he asked.
From 2025, Singapore’s corporate tax system will reflect recommendations from the second pillar of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS 2.0). This means introducing a minimum 15 per cent effective tax rate for MNEs with annual group revenues over 750 million euros.
Mr Sharael added: “Attracting investment to Singapore will continuously be more challenging and we want to equip ourselves with the full disposal of tools to attract good investments to create good jobs for our people.”
#6 NCMP Hazel Poa asking if the $10,000 Central Provident Fund (CPF) top-up in the Institute of Technical Education (ITE) Progression Award creates differentiated treatment of polytechnic graduates
Xie Yao Quan (Jurong GRC) noted that it was fair for the Government to provide financial support to ITE graduates who later obtain a diploma, helping to close the pay gap with diploma graduates.
He pointed out that the starting pay for an ITE graduate is around $8,000 less than that of a diploma graduate annually. The gap in Central Provident Fund Ordinary Account contributions alone is around $1,500 per year, he said.
The $10,000 CPF Award therefore helps diploma graduates with an ITE background narrow the gap – equivalent to the first six years of their working lives – in terms of CPF Ordinary Account contributions, Mr Xie explained.
“The Award helps them to catch up with their counterparts in terms of saving for a HDB flat. I think this is patently fair. It is the right thing to do. And I am glad that the Government has taken the bold and decisive step to do it, “he remarked.
In response to further clarifications from Ms Poa, Mr Xie added that helping ITE graduates before they turn 30 is important because “intervening early in our young graduates’ working lives” gives them the support as early as possible, helping to narrow the gap as soon as possible.
#7 WP MP Sylvia Lim called on the Government to do more to tackle ageism in the workplace.
Christopher de Souza (Holland-Bukit Timah GRC) briefly crossed swords with Ms Lim on the second day of the Budget debate.
He said: “If there is ageism, as I have seen and tried humbly to the best of my ability to bridge, we should (address it). But we shouldn’t throw the baby out with the bathwater.”
Mr De Souza pointed to government initiatives to support older workers. These include a raft of measures for seniors to age actively. MPs also help residents find jobs.
“… if you look at all the fiscal measures, and the grind and the work of the MPs on the ground, I think we do have a chance of a winning formula for our seniors,” he said.
After the 2020 General Election, Prime Minister Lee Hsien Loong challenged opposition MPs to propose their own ideas to be examined and debated beyond merely criticising government proposals. He also urged PAP MPs to raise their game and prepare for sharper questioning. No doubt, PM Lee’s message is coming through.
