SINGAPORE – Parliament debated Prime Minister and Finance Minister Lawrence Wong’s Budget statement on Feb 26, with 28 MPs speaking.
The topics they covered ranged from the timing of the goods and services tax (GST) hike, to cost of living concerns and the effectiveness of government spending.
The House sits again on Feb 27 for day two of the three-day debate.
Timing of GST hike
The necessity of raising the GST in the last two years was questioned by Leader of the Opposition and Workers’ Party (WP) chief Pritam Singh, who slammed it as a poor decision amid Singapore’s “exceedingly healthy fiscal position”.
He was rebutted by several MPs, who said the budget surpluses were testament to the Government’s prudent financial management, which has allowed it to provide substantial support to Singaporeans while still saving for the future.
Opening the Budget debate, Mr Singh noted that even after giving out CDC and SG60 vouchers, the budget surplus for 2024 had been revised “massively upwards” from $778 million to $6.4 billion, and that the overall surplus from this term of government is set to hit $14.3 billion.
This has led many Singaporeans to question the need for higher GST, he said. GST was raised from 7 per cent to 9 per cent in two stages, in 2023 and 2024.
“Why the PAP went headlong and headstrong into raising GST, and thereby turbocharging inflation further, is something only the PAP itself can answer to Singaporeans for,” he said.
That authorities had projected deficits in 2021 and 2022 but instead had surpluses showed poor fiscal marksmanship, and if this continued could lead to cynicism when future tax increases are needed, he added.
“Singaporeans would not be out of place to ask – why is there a need to collect so much money when the Government’s fiscal projections are so unpredictable, but somehow always so healthy when elections have to be called?” he said.
This sentiment was echoed by Progress Singapore Party (PSP) chief and Non-Constituency MP Hazel Poa, who said the Government could have reformed the corporate tax regime instead of raising GST.
She said more surpluses going into the reserves mean bigger cost burdens on taxpayers, given that the Government collects more than is needed to pay for public programmes.
But Mr Liang Eng Hwa (Bukit Panjang) and Ms Foo Mee Har (West Coast GRC) said being able to sustain significant public spending while also saving for rainy days is what sets Singapore apart.
Many governments would find this to be an almost impossible task, said Mr Liang. Ms Foo said this was only possible through years of strategic adjustments to Singapore’s tax system to ensure a resilient and diversified revenue base.
Both MPs pointed to Hong Kong’s reliance on land sales to raise revenues. When the property market weakened, it led to ballooning deficits, and authorities there had to make painful trade-offs.
Noting that the WP and PSP had advocated a similar approach of using land sales revenue to help fund recurrent spending, Ms Foo said: “Had we followed this path, Singapore could be facing the same fiscal vulnerabilities as Hong Kong today. Instead, we chose a more stable and forward-looking approach.”
Mr Liang said it was understandable that the large surpluses would spark questions about whether the GST rate had been raised prematurely.
But he noted that the GST increase would be delayed by at least five years for the majority of Singapore households by the Assurance Package, introduced in Budget 2020 and subsequently enhanced.
Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) said inflation had gone up in Singapore, as it did in all other countries, due to the war in Ukraine and resulting supply chain disruptions. Even so, it was not as high in Singapore as in many other countries.
He pointed to an earlier parliamentary response by the Ministry of Trade and Industry (MTI), which said the GST increase was estimated to have contributed slightly less than 1 percentage point to core inflation.
Other contributors to inflation were high electricity and gas tariffs due to increased oil prices, and higher production costs, MTI had said in February 2024.
“Inflation being impacted by GST, being turbo-charged, may not be a fair point in general,” he said.
Cost of living still an issue
CDC vouchers and cash handouts have not been enough to ease anxiety about the cost of living, MPs said.
Several MPs spoke of these measures as a temporary “band-aid”, calling for the Government to put in place more structural support.
The prices of groceries and hawker food are a common grouse among residents, even though they get CDC vouchers and cash payouts through the Assurance Package, said Mr Lim Biow Chuan (Mountbatten).
“For residents in the middle-income squeeze, they simply have to tighten their belts as they get much less help from the government schemes,” he said.
Mr Singh (Aljunied GRC) added: “The numerous vouchers will give us help for a little while, but not for long. After all, no GST offset package lasts forever.”
The WP chief also noted that Prime Minister and Finance Minister Lawrence Wong had laid out optimistic top-line statistics for 2024 in his Budget speech.
These include 4.4 per cent economic growth, wage increases that outpaced easing inflation, the median income of resident workers rising by 3.4 per cent above inflation and income inequality being at its lowest since 2000.
“But for many, the lived reality of Singaporeans over the last 12-odd months does not correspond with the bright summary revealed by these numbers,” he said.
Mr Singh said inflation has led many Singaporeans to make regular trips across the border, where they can save 30 per cent or more on basic goods. With the Johor Bahru-Singapore Rapid Transit System starting operations in 2026, local businesses will have to review how much business they can expect to get from local customers, he added.
Associate Professor Jamus Lim (Sengkang GRC) said annual real basic wages have failed to keep pace with rising costs.
Salaries should rise and the Government should expedite this adjustment, he added. This would include ensuring that National Wages Council guidelines are more widely adopted, having employers and employees contribute a similar percentage to CPF and instituting a statutory minimum wage.
“Restoring the real purchasing power of wages is a sure-fire way to help working Singaporeans cope with sky-high costs of living,” he said.
Tracking outcomes of public spending
Several MPs also emphasised the need to track the outcomes of government programmes.
Noting that total public expenditure has almost doubled in nominal terms compared with a decade ago, Mr Singh repeated his call for an independent parliamentary budget office to ensure more accountability and transparency in how tax dollars are used.
The WP chief noted that his suggestion, first made at the Budget debate in 2021, had been “roundly rejected” by the Government.
Yet in light of unpredictable fiscal projections by the Government, such an institution would also benefit the Government, he argued.
Two MPs also sought greater scrutiny of the SkillsFuture Credit scheme.
Noting how only about a quarter of eligible Singaporeans have used their one-off SkillsFuture Credit top-up of $500 – due to expire at end-2025 – Mr Saktiandi asked if the Government had done any studies to look into why some Singaporeans are not using the training benefits.
Mr Darryl David (Ang Mo Kio GRC) wanted to know the extent to which SkillsFuture courses have translated into job growth, career transitions and higher wages, and whether SkillsFuture Singapore has conducted audits to find out.
Mr Saktiandi and Ms Ng Ling Ling (Ang Mo Kio GRC) also asked if the Government tracked the effectiveness of the Uplifting Employment Credit and the Enabling Employment Credit in helping former offenders and people with disabilities to stay employed, and whether there was more granular data on their job progression.
Families and leave provisions
Give large families priority access to large flats and build bigger ones, MPs suggested. They said such structural changes would go beyond the monetary support offered under the new Large Families Scheme, and help such families with family planning.
Mr Vikram Nair (Sembawang GRC) called for a new pipeline of larger format flats, such as jumbo flats, for multi-generational families. Such families may not require individual bedrooms only for their children as they get older, but also potentially for a domestic helper.
“I understand that the reason for holding back on development of larger flat types in recent years has been that there did not seem to be much demand for them amongst first-time buyers,” he said.
“But I think it’s also important for us to consider not just first-time buyers – such as young couples – but also older, middle-aged couples, who have higher incomes but are also likely to have larger families and extended families to care for.”
Mr Liang and Mr Gan Thiam Poh (Ang Mo Kio GRC) also asked if the Housing Board can give large families priority for bigger flats.
MPs also called for more government-mandated leave and public holidays, which would help Singaporeans with childcare responsibilities and overall work-life balance.
Dr Wan Rizal (Jalan Besar GRC) suggested that parents get more childcare leave, on top of the planned increase in shared parental leave to 30 weeks.
“Childcare leave and parental leave serve different purposes, addressing different needs at different stages of a child’s development, (where) many parents highlight practical difficulties, especially when children take turns falling ill,” he said.
Mr Louis Ng (Nee Soon GRC) also called for a review of the minimum paid annual leave entitlement of seven days. This entitlement has not been reviewed in 57 years.
“We do not have to lose productivity and competitiveness when we increase annual leave,” he said, adding that changes in this area would particularly benefit lower income workers.
And Ms Poa proposed increasing the number of public holidays from 11 to 14.
This could be done by adding one additional holiday for each of the three major races in Singapore, she said.
Housing suggestions
Two MPs proposed solutions for seniors living in HDB flats without direct lift access.
For instance, owners of “segmented” units could be allowed to sell them back to HDB at market value, and given priority for Build-to-Order flats, said Mr Ang Wei Neng (West Coast GRC).
Such flats could also be leased to workers instead of being resold, he said.
Segmented blocks are designed for greater privacy, with two units sharing a common floor landing, or segment. Mr Ang said there are around 2,000 segmented units across 140 blocks in Singapore.
Mr Yip Hon Weng (Yio Chu Kang) also proposed a new fund to explore compact lift solutions for blocks without direct lift access.
He also spoke on the Lift Access Housing Grant for those who live in blocks that are ineligible for the HDB’s lift upgrading programme. The grant aims to offset the cost of buying a new or resale flat with direct lift access.
“Moving is expensive. It is disruptive. And for many, it means leaving behind a home filled with decades of memories,” he said.
Mr Henry Kwek (Kebun Baru) also hit out at a PSP proposal to exclude land costs from the upfront price of new flats, saying this would put downward pressure on resale values.
“A sudden depreciation in housing prices or rental values would mean less financial security for seniors looking to right-size or lease out their flats to support their retirement,” he said.
He added that Singapore should strive to keep housing affordable for young families and first-time buyers without destabilising the savings and retirement plans of existing homeowners.
PSP’s Ms Poa said her party’s scheme is intended to keep housing more affordable and designed in a way that will not “crush the resale market”.
She said HDB resale prices have increased by 50 per cent since the last general election despite several rounds of cooling measures.
“Does (Mr Kwek) not think that the resale market needs some dampening?” she asked.
Better support for persons with disabilities
MPs cheered the additional support in Budget 2025 for persons with disabilities, but made suggestions for a more inclusive Singapore.
Nominated MP Ong Hua Han sketched out two areas that can be made more inclusive for people with disabilities: the arts and sports.
Mr Ong called for performances here to be made more accessible for those with mobility challenges or sensory disabilities.
For instance, he highlighted how some local theatre companies like Wild Rice and the Singapore Repertory Theatre have selected showings that make accommodations, such as sign language interpretation and audio descriptions.
For sports, he suggested renaming the Disability Sports Master Plan (DSMP) – a multimillion-dollar initiative supporting impactful, community-driven disability sports programmes – to the Inclusive Sports Masterplan.
Such a rebrand would send a clear message that sports should be for everyone, and that the general public has a role to play in fostering a truly inclusive society, he said.
NMP Razwana Begum called for a more inclusive education system, such as for teachers in mainstream schools to be trained to provide effective support to students with special needs.
Mr Ang suggested that the authorities consider providing caregivers of people with special needs a quarterly grant of $200, which would be a meaningful gesture of recognition that will also help ease such families’ financial burden.
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