You see! The GST spin is working!

If you need proof that the government’s spin is working, look no further than the Straits Times Forum page!

Nov 21, 2006
‘No’ to minimum wage, ‘ Yes’ to GST hike

I REFER to the proposed GST increase from 5 to 7 per cent, to provide for those who are poor. There is indeed a pressing need to help lower-income Singaporeans caught in the globalisation tide.

Being a small-business owner, I can attest to this. I have many employees who earn less than $1,000 in basic salary and are the sole breadwinners (One such staff member hails from a family of 11). It is heart-rending hearing them bemoan the cost of living, utility bills, household expenses, etc. Much as I would like to pay them more, it is not possible to do so without affecting cost and the business’ survival.

The minimum-wage argument is not tenable. Should employers be forced to pay a minimum wage, many like myself would choose either not to hire because we cannot afford it, or not to set up shop in Singapore. This will result in lesser employment.

I am glad the Government has heeded the call to take care of the lower-income. Workfare is unique to Singapore and is a far better principle than welfare. Under workfare, hardworking Singaporeans are given a chance to level up whereas welfare destroys all incentive to work.

It will take some time for Singaporeans to accept the GST increase. I urge everyone to take a measured and rational approach and to support it as it is designed primarily to help poorer fellow citizens. In order to make the reason for the GST hike more persuasive, I suggest the Prime Minister gives a full account of the two-point increase by Budget 2007 – what is the exact dollar value and how much of each dollar will go into workfare.

Theodore Yeo Guan Huat

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.

5 thoughts on “You see! The GST spin is working!”

  1. Politicians have to put a spin to sell their policies right? (I’m making them sound like insurance agents, right down to the part where they think they know what’s good for you).

    However, this ST forum letter just expresses what Mr Theodore Yeo felt. I don’t think he was brainwashed, if you get what I mean. If you meant that the ST forum editor picked this of all letters, then I agree, it’s a further part of the spin.

  2. I think the idea of exempting basic goods and necessities is a sound one. No doubt implementation would be more troublesome than a flat tax across the board, but this more than offsets the need for whatever aid packages that the govt have to come up with.

    The other thing is GST is not an income distribution tool. This hike will not only further widen the divide between the poor and the rich, it will impact the middle income greatly and really the only benefactors are the top 10-20% quantile earners and of course govt coffers.

  3. Gerald,

    This is EXACTLY how the KTM thinks. MW is a lousy idea. Dunno what spin you are talking about. In fact, the KTM is quite surpised at the lack of spin by the Garmen. The Garmen could seriously have dun a much better job preparing the ground than to let the PM drop this bombshell at the opening of Parliament. :-P

    Problem with Singaporeans is that they all think like employees, which is why we have lack of entrepreneurial spirit. :-)

  4. Fabian – The writer, like the rest of us, has every right to express what he thinks. I just found it quite amusing how he states from the outset that he supports the GST hike because it will provide for the poor, then goes on a long explanation of why we need to help the poor, without questioning the logic of a regressive consumption tax. I don’t think he’s brainwashed. It appears (from a Google search) that he’s a lawyer. He probably has some other reasons for supporting the hike.

    I guess you’re right that the real spin lies in ST cherry picking letters favourable to the govt to show that S’poreans support the hike.

    Anon – I would prefer offset packages for the poor/lower-middle incom than exemptions on essential items. One, because exemptions will also benefit the rich and, two, because it would be costly to administer. But the offsets should not be given in one lump sum just before elections. Remember the queues at ATMs just after the Progress Package was deposited? If people withdraw it and use it to splurge on non-essential items, then it defeats the purpose of an offset package. Also, the offsets should as permanent as the GST hike.

    KTM – I agree that the spin isn’t crafted as well as it could be. I’ve got this feeling the govt is trying to gauge ground reaction before making the final decision at the Budget in Feb.

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