WP chief Low Thia Khiang responds to Budget 2011

This is the speech by Workers’ Party secretary-general and MP for Hougang Low Thia Khiang, on the first day of the debate in Parliament on Budget 2011.

This is the speech by Workers’ Party secretary-general and MP for Hougang Low Thia Khiang, on the first day of the debate in Parliament on Budget 2011.

(Video credit: Channel NewsAsia)

Budget 2011 is seen by many Singaporeans as a pre-election ‘sweetener’ designed to win back the hearts and minds of people disempowered by 46 years of PAP rule. The Growth Policy adopted by the Government in recent years has left a hardworking nation disillusioned with its own identity, values and quality of life.

The global recovery has helped Singapore greatly. The Finance Minister has called 2010 an exceptional year. We ended the year with an exceptionally high GDP growth.

The exceptional year also saw the number of locally born residents dipping to just 57.3 per cent of the population. This has caused some of our young men to lament that they no longer know what they are defending any more.

The year also ended with aspiring home seekers grappling with a 14.1 per cent rise in HDB prices and older Singaporeans worrying about retirement and rising medical costs.

Looking ahead, the new decade did not start off well either. Singaporean students attending our universities in 2011 will have to contend with a 4 to 6 per cent rise in tuition fees, all in the name of making the distinction between Singaporeans and PRs sharper.

While the economic outlook for Singapore is positive this year, almost every basic necessity is expected to cost more moving forward. From food to utilities, rental to childcare, lower- and middle-income Singaporeans will bear the brunt of the rising cost of living.

Most Singaporeans are already resigned to paying more for public transport despite the unexpected move by the Public Transport Council to defer the 2011 Fare Review Exercise to the end of the year, after the election is over.

The immediate threat that can derail the momentum of our economic growth is Inflation. Singapore’s inflation has just hit a two-year high in January. Food prices, healthcare and education costs have gone up by 2.8 to 3.8 per cent. With oil prices hovering around the $100 mark, Singaporeans can expect to pay more for many essential items and services this year.

Therefore, I am of the view that the 2011 Budget should do more to tackle inflation from every possible angle as it is going to be a concern for everyone. There is a need for a concerted effort to address the rising cost of living at the fundamental level, which is to control the price increase of essential items like food, transportation, education and healthcare.

Using rebates and subsidies to fight inflation can only ease the hardship in the interim. Permanent programmes like the Public Assistance (PA) scheme take a long time to catch up with inflation. The PA amount took 2 years to finally reach $400 a month in this budget.

At this point, I must state that it is a blessing to Singapore that many charitable organisations like Lions Club and Food from the Heart are willing to help needy residents beyond what the government is doing. However, inflation bites all sectors of the society. Middle-income families are hard-hit too. Many of them suffer in silence under a mountain of levies and price hikes.

Thus, without tackling the rising cost of living at the fundamental level, the election year Growth Dividends would evaporate fast.

The GST is at the centre of everything we consume. I urge the government to seriously consider reducing the GST to help all sectors of the society cope with a projected slower growth and high inflation expected.

The Minister for Finance told this house in 2007 that the government was shifting towards indirect taxation as a source of revenue when it raised GST from 5 to 7 per cent then. When GST was increased in 2003 and 2004, its percentage share of the total tax revenue went up to 14.9 per cent in 2005. In this year’s Budget, GST is projected to contribute 19.5 per cent of the total tax revenue. As you can see, the GST’s share of the tax revenue has gone up 30 per cent since 2005.

If the government is shifting from direct to indirect taxation, we should see the share of direct tax, specifically Personal Income Tax, come down over the years. In 2007, Personal Income Tax constituted 15.5 per cent of the total tax revenue. In the 2011 Budget Estimates, this share is expected to go up to 16.1 per cent. How can the Government justify the increase in GST when there is hardly any shift from direct to indirect taxation as a source of revenue?

Therefore, the Workers’ Party calls upon the Government to reduce the GST rate by 2 percentage point from the current 7 per cent. Although, this will shave $2.4 billion from the estimated receipt for FY2011, if we discount the one-off election year Growth Dividend of $1.55 billion, the shortfall in receipt is $0.85 billion. The shortfall in revenue can be balanced by trimming the budgets of some bloated ministries. The shortfall may also be compensated by an increase in consumption stimulated by a lower GST rate and the expected increase in tourist receipts from the two fully operational IRs.

The Workers’ Party has also called for a waiver of GST on basic necessities for a long time. I hope the Government will consider the proposal seriously.

Next, the Foreign Domestic Worker (FDW) Levy, like the Radio and Television Licence Fee, is fast losing its relevance too.

Hiring a domestic helper is no longer a luxury like in the past because of our changing life style. Families with two working parents will need a helper to take care of their young children. Although subsidized infant care is an option, most parents would prefer a domestic helper to look after their babies under the supervision of their aged parents at home.

Furthermore, in our ageing society, domestic helpers can be trained to provide some basic care for our elderly and disabled. These helpers will complement our long-term care objectives and ease the demand for nursing homes.

I am not aware of Singaporeans who want to work as stay-in domestic helpers. Yet, such help is important to many working class families. The FDW levy should be removed permanently. A saving of $170 to $265 a month will ease the financial burden of families with children and aged parents significantly. It will also somewhat mitigate the rising cost of employing a domestic helper since foreign governments supplying such labour are demanding a higher salary for their citizens.

The removal of this levy may even nudge couples to think about having more babies since getting a domestic helper has become more affordable.

The key thrust of this year’s Budget is to strengthen our economy and society for the future. It promises to grow incomes for all Singaporeans by 30 per cent in real terms over this decade.

Out of curiosity, I looked up the salaries in the Budget to estimate how much a 30 per cent increase would work out for all Singaporeans. One group of employees did enjoy a 30 per cent rise in salary last year. The estimated salary for Political Appointments for FY2010 was $58.3 million. This salary was revised to $75.7 million or about 30 per cent more. This increase took only a year to materialise. Unfortunately, the incomes of Singaporeans do not grow 30 per cent just like that.

It is a lot harder for the salaries for Singaporeans to grow because foreign workers are always willing to work for less. I really hope to see we succeed in growing the income of low wage workers through the road of productivity growth.

The Workers’ Party recognises the contributions of foreigners to the economic vibrancy of our nation and the need for foreign expertise in certain fields. However, the reason for admitting foreigners into our country should be to enhance the quality of life of Singaporeans.

There must be sufficient opportunities for Singaporeans to earn a decent living and to advance careers in our own country. Employers should give priority to hiring Singaporeans. Foreign workers should primarily be employed in positions Singaporeans are unable to fill. Until that happens, increasing the incomes of all Singaporeans by 30 per cent is going to be a tough thing to do.

I have questioned the effectiveness of the Foreign Workers’ Levy in controlling the number of foreign workers in Singapore. The latest increase in levy may dampen the demand for such workers in the short term but once the increase is priced into the foreign workers’ salaries, the situation is likely to return to status quo.

The strong recovery has brought the unemployment rate down to the levels seen in early 2008, before the crisis, but no one can tell if Singaporeans have benefitted much from the 14.5 per cent GDP growth last year.

Are there more Singaporeans employed now than in the pre-crisis days? Will Singaporeans get the lion’s share of the 21,300 new skilled jobs mentioned by the Finance Minister when the investment projects are fully realized? What about the 35,000 Integrated Resort (IRs) jobs that the Prime Minister mentioned in this House in 2005? How many of these jobs went to Singaporeans now the two IRs are operational?

The PM has announced in 2009 and 2010 that the Government will make the distinction between Singaporeans and PRs sharper. Unfortunately, the Ministry of Manpower does not believe that this distinction is necessary when it comes to reporting employment data. MOM has never made a distinction between Singaporean citizens and Permanent Residents in its labour force report.

Is the distinction important? The answer is ‘Yes’. It tells Singaporeans that more jobs did go to them. It tells Singaporeans that distinction between PRs and them goes beyond a mere difference in fees charged for education and healthcare. It tells Singaporeans that jobs are indeed created and reserved for them.

I am sure this house did not forget that Singaporeans did not even enjoy any significant fee advantage in education and healthcare when compared to PRs as recent as five years ago. So let’s make the distinction clearer. Let Singaporeans know more jobs did go to them in 2010 and more are reserved for them in the next decade. This is the true spirit of Singaporeans first.

In conclusion, sir, the Budget this year has done one thing right. It has prudently put back into Past Reserves the $4.0 billion that the government took in 2009.

The Finance Minister has said no less than 5 times in the budget statement that the government can do and will do more to help our society. Therefore, I urge the government to do more to reduce the rising cost of living and the burden of supporting a family in Singapore.

We also need to start working on reversing our low fertility rate urgently. This Budget has fallen short in encouraging couples to procreate. Increasing our fertility rate has to remain a top priority despite most of the efforts initiated by the government has failed so far. Taking the easy way out to boost our population by importing foreigners is counterproductive.

As this may be one of the last sittings of Parliament before it is dissolved, I wish all Singaporeans well. I also wish to see a first world parliament in the making when we reconvene in this house after the coming General Election.

Source: http://wp.sg/2011/02/budget-speech-2011-by-mr-low-thia-khiang/

Author: Gerald Giam

Gerald Giam is the Member of Parliament for Aljunied GRC. He is a member of the Workers' Party of Singapore. The opinions expressed on this page are his alone.

14 thoughts on “WP chief Low Thia Khiang responds to Budget 2011”

  1. Wow his spoken English has improved tremendously ! What more can I say, you got my vote Mr. Low T. K. Move in to AMK GRC please ! I have passed the word around as now you are a credible opponent sir !

  2. Yes it was a good speech. I hope the WP do well in the elections.

    Hmmmm.. Has the WP come up with an alternative budget? It needs to have an alternative to the one presented by the party in power.

  3. Yep ! Agree. Good speech.

    I hope he will seriously improve his English quicker and be able to rebut some of the ministers idiotic speeches.

    Now I understand why sometimes he seems slow in rebutting them.

    Good show, WP !

    Slow and steady wins the race. WP is on the way to getting more seats in the parliament.

  4. Well said. Unfortunately, the knee jerk rebuttals have shown that the PAP only understands force and are not interested in a reasoned discussion in good faith. Toss many of these white shirts out of Parliament with your votes and replace them with opposition members. Only then will the PAP realize that they govern only with our consent.

  5. You have my family’s and all my friends’ votes. The PAP have been around too long and have gone soft and complacent.

  6. This Should Make You Puke

    While the whole wide world braces for the impact of price increases in oil, food and commodities. Minister Thaman has proposed the change for “recruitment of an additional staff officer to support the work of the Council of Presidential Advisers and a butler manager to meet increased demand for butler services, and the high variable payments on account of a strong economic growth”. We know from Tom Plate’s recent book on Lee Kuan Yew that he has two staff just to provide hot towels for his aching bones, but are there so many butlers there in the Istana that they need a “butler manager” to supervise the servants? It’s bad enough to read of “higher variable payments”, Tharman also uses the term ‘”ad hoc spending”. Does the national budget also have a YOG styled “other costs” accounting entry?
    Tharman tried to downplay the gross abuse of public funds by saying that the total expenditure for the “Civil List for the President of the Republic of Singapore” will be the same as the revised 2010 figure of $11,605,000. What he did not say to the public is that the original 2010 figure was $10,354,700. Why and when was the number “revised” by $1,250,300 to $11,605,000? Just in time for the 2011 budget?
    By the way, while sky rocketing COEs are threatening the affordability of cars for those who need to drive for work purposes, these guys have also decided that the president needs a new office car. Are we even on the same planet?

    The amounts given below are correct before yesterday’s announcement of an increase in President Nathan’s salary
    Top 30 Highest Paid Politicians in the World (Information obtained from the internet)
    Clean sweep by tiny Singapore to be in the Guinness Book of Records!
    Top 30 highest paid politicians in the world and they are all from Singapore.
    (All amounts exclude bonuses.)
    1. Elected President SR Nathan – S$3.9 million.
    2. Prime Minister Lee Hsien Loong – S$3.8 million.
    3. Minister Mentor Lee Kuan Yew – S$3.5 million.
    4. Senior Minister Goh Chok Thong – S$3.5 million.
    5. Senior Minister Prof Jayakumar – S$3.2 million.
    6. DPM & Home Affairs Minister Wong Kan Seng – S$2.9 million.
    7. DPM & Defence Minister Teo Chee Hean – $2.9 million.
    8. Foreign Affairs Minister George Yeo – S$2.8 million.
    9. National Development Minister Mah Bow Tan – S$2.7 million.
    10. PMO Minister Lim Boon Heng – S$2.7 million.
    11. Trade and Industry Minister Lim Hng Kiang – S$2.7 million.
    12. PMO Minister Lim Swee Say – S$2.6 million.
    13. Environment Minister & Muslim Affairs Minister Dr Yaccob Ibrahim – S$2.6 million.
    14. Health Minister Khaw Boon Wan – S$2.6 million.
    15. Finance Minister S Tharman – S$2.6 million.
    16. Education Minister & 2nd Minister for Defence Dr Ng Eng Hen – S$2.6 million.
    17. Community Development Youth and Sports Minister – Dr Vivian Balakrishnan – S$2.5 million.
    18. Transport Minister & 2nd Minister for Foreign Affairs Raymond Lim Siang Kiat – S$2.5 million.
    19. Law Minister & 2nd Minister for Home Affairs K Shanmugam – S$2.4 million.
    20. Manpower Minister Gan Kim Yong – S$2.2 million.
    21. PMO Minister Lim Hwee Hwa – S$2.2 million.
    22. Acting ICA Minister – Lui Tuck Yew – S$2.0 million.
    23 to 30 = Senior Ministers of State and Ministers of State – each getting between S$1.8 million to S$1.5 million.
    Compared to other Countries’ Leaders:
    Donald Tsang Yum-Kuen – Hong Kong (S$716k)
    Barack Obama – United States (S$555k)
    Nicolas Sarkozy – France (S$441k)
    Angela Merkel – Germany (S$420k)
    Gordon Brown – UK (S$387k)
    Taro Aso – Japan (S$337k) Total of all 6: S$2,856,000

    In other words, even our one DPM has higher salary than all of the above leaders combined !!
    Means our DPMs are more able than all the leaders from the 6 biggest world economies combined. We must be thankful to have such talent !!!!

  7. Many people felt disappointed after going to mr low rally, all only talks of criticisms of the PAP and no concrete plans and proposals at all, throughout his 10++ mins of talk, no plans to layout, no difficulties of building the GRC or SMC, all just criticism, can i ask if us voters can trust him???? I dont think so!

  8. Criticism is not check and balance at all! Please put in more efforts, much much more efforts to show your committment level and not just empty talks

    See a good government is not easy to come by, if WP is into government how will you compare to the PAP? Will you produce a EVEN BETTER government and plans than the PAP? What then can I ask that your salary by, How, WHat are your plans? You cannot just give empty talks and point to others’ and just talk criticisms? How do you expect people of Singapore to give you a full mandate in this way? We are not convinced! Show your leadership, your efforts, your details, so far WE see None at ALL! A good talker, presentator does not equate to a good deliverer for the People of Singapore, just a good talker thats all!

  9. What working resolution will you produce for Singaporeans, its easy to critise, even my grandmother can do that, but to do REAL work and deliver to the people of Singapore is Not easy at All!

  10. Osama bin Laden is dead/killed, Obama US president announces!!!

    A warning sign to Singapore’s extremists!!!!!!

  11. First break the political monopoly. Then we can get down to business. The PAP has openly stated its intentions to use YOUR money in ways that benefit only the PAP. See MM’s comments on who the PAP takes care of first.

    Do you think the PAP has done its best for Singapore? Their priority list has the PAP first, then Singapore, and even then not all of Singapore, only those deemed to be of “elite” caliber. The rest can scrape out a living however they can.

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