According to Finance Minister Heng Swee Keat, the GST hike (announced last year in 2018), is necessary to support expenses in areas such as healthcare, security, and pre-school education.
This was said in response to MP Foo Mee Har, reported Channel NewsAsia, who suggested postponing the GST hike for as long as possible. Ms Foo suggested that the funds set aside this term were sufficient, along with borrowing for future infrastructural projects.
“I appreciate Ms Foo’s suggestion to delay this. Let me assure her and Members of this House that the decision to raise GST was not made lightly. As the Government, it is our responsibility to anticipate, and plan ahead for future needs. When doing so, we need to distinguish between one-off factors, and underlying structural increases,” said Mr Heng.
According to him, it is expected that S$6.1 billion is going to be spent in 2019 for patients’ bill subsidies alone.
GST is a significant source of tax revenue. For the 2017 financial year, GST collections are estimated at S$11.25 billion, about 16 per cent of the Government’s estimated operating revenue of S$69.45 billion.
Mr Heng has also mentioned that Singapore’s fiscal reserves must be maintained as the importance of a ‘rainy-day’ fund should not be underestimated, allowing Singapore to overcome any potential crises and deter attacks. As such, it looks like the GST hike is set to stay.