Thursday, November 16, 2006

Killing You Softly

There is something seriously wrong in Singapore. We have Ministers who are justifying the proposed GST hike with utterly pathetic reasons. The following headline from CNA sums it up :

Proposed GST rise helps lower-income group and grows economy

This is a line that screams contradiction. When GST rises, everything in Singapore rises. Your kopi-o will go up by ten or twenty cents. Your chicken rice goes up by fifty cents. Your groceries which are already bought on the cheap at Sheng Siong will go up. Public transport companies are already raising fares. In short, the cost of living in Singapore will go up. Oh, but we are not suppose to talk about rising costs of living according to MICA. It costs you your job if you write about this. Unless you are responsible and have a solution. So this is the solution. Raise GST to help Singaporeans who are affected by rising costs of living. So this is the great solution which citizens cannot come up with. And in truth it is a staggering solution. How can mere mortals come up with a solution to help Singaporeans hit by rising costs by raising a general consumption tax?

Lets not be sarcastic, nor do we make fun of this solution. Lets just say that this solution screws the lower income group. It does not help them at all. The truthful headline should be that the proposed GST hike hopes to stimulate the economy and then, hopefully help the lower income group. That is approximating the truth of the situation. There is no guarantee the lower-income group will be helped, but through the spin-offs of the fare hike, benefits will trickle to the lower income. However, going by the track record of a failed "many hands approach" and the continued vulgarisation of the word "welfare", the GST hike will most likely not help the lower income group. It screws them again.

The reasoning is that costs of living goes up but this increase will be offset by packages and more jobs, lower personal taxes etc. But very simply put, the Government is raising prices first, which the citizens bear the brunt in the short-term and forever-term, which are then returned to the citizens in the longer-term. Hopefully the returns will be greater. But it just does not make sense. Especially for the lower income group where the short term is the only term. Thye may not even make it to the long term where the supposed benefits of this GST hike will materialise. And even if materialised, the benefits may be in sectors of the economy or sectors of society which the lower income are not in.

But the benefits will be manifest. We can bet on it. The benefits of this GST hike will be magically manifest in 2010 or 2011. A couple of months or weeks before the GE. Suddenly, the State will give their hand-outs. Promise is fulfilled. To help all Singaporeans. When its just a sweetener to buy votes. And singaporeans will then forget that they funded their own GE progress package through acceptance of these hikes.
Raising the cost of living will help the lower income group. It is ridiculous, this reasoning. On the same page, we have NTUC Fairprice promising to help low wage workers by cushioning the impact of the GST hike.

NTUC promises help for low-wage workers to cushion proposed GST hike

On the one hand, the GST hike is supposed to help the lower income. But at the same breath, we are told by our trusted media that there will be help to cushion the impact of the GST hike. But the hike is suppose to help? We are used to such ScrewSpeak. Innured to such contradictions. We just accept these. And our politicians get away with this.

Quote of the Day --

"He was a spry, suave and very precise general who knew the circumference of the equator and always wrote 'enhanced' when he meant 'increased.'" -- Joseph Heller Catch-22


Anonymous fckfashion said...

GST is regressive in nature. Meaning the poor is being taxed to be given to the poorer. This is really dumb but nowhere near this classic where, yours truely takes the cake; GST hike was to help the poor and hey presto comes ntuc saying, "we'll help cushion the impact".

Only uniquely singapore, people buy such lame stories, er I mean the 66.6%

5:14 AM  
Anonymous Anonymous said...

Mmmm.... unfortunately, I have a bad feeling most Singaporeans either buy into their argument (w/o thinking) or just feel that they cannot stop it they just dont bother and take it in their stride.

This society is really warped.

6:16 AM  
Blogger prettyplace said...

Warped it is in every sense....
the reason to increase might be like what xeno boy said...give a slight jump the economy...all the lies about taking care of the poor is bullshit..we know
or people won't be jumping on train tracks....

There might be another reason hoodwink us....

There was another comment ...a new well
to lay hands on the capital gains of the reserve...mmmm this is the part we must never miss....

As it is...who buys what...who sells what to and from the GLC's and Temasek is so secretive ...or perhaps sensitive...they say...

Now what happens to Capital gains/losses..if there are going to be transactions...and monies paid in the Bahamas.....
I am just speculating nonetheless...but it is plausible...

7:52 AM  
Anonymous Anonymous said...

here's another quote: In the long term, everyone is dead. How do we get to enjoy the long term "benefits" of a GST hike if we cannot even survive past the short term effects of being squeezed dry? It feels like they're squeezing blood from stones.

8:06 PM  
Anonymous Rowen said...

Taxes now,
Benefits PAP MPS immediately
If there are Key Performance Index on the MPs and that is in the amount of money they can squeeze for the fruit of singaporean, FTs and everyone in singapore.

The following would be great performers. Indirect taxes

1) COE, hey it is a piece of paper and it generates a lot of money from vehicle owners.

2) taxation on entertainment and food due to publicity done by singapore tourism board.

3) ERP road pricing system, Hey it is easy to monitor and you get money in advance due to cashcard system.

4) GST. everyone would pay it.

Where are the benefits?

Well in the MPs bonuses and pockets.

Just 2 cents worth of taxes.....

8:38 PM  
Anonymous Anonymous said...

Looks like NTUC is anti-government. It is thwarting the government's initiative to help the poor!

They should be urging all workers to spend like no tomorrow to help the poor....

9:42 PM  
Anonymous vesance said...

Temasek looks like some kinda elite hedge fund.

Peasants should just go for the Index option really.

Or visit Omaha to gain some wisdom. LOL.

1:12 AM  
Anonymous Anonymous said...

this is not even funny!!!!
this is the most ridiculous thing i ahve ever heard.
GST increase to help the poor by making them poorer and killing them and that will away their pain!!!
Oh MY god i cannot believe this!!
everything is on the rise, Singpost even raised postage rates!!
But let us admit this fact that no economy in the world has kept prices constant. But what should be done is:
1. we should shield the poor and the elderly.
2. have something called a minimum wage.
and other safety nets that help the unfortunate.
but to me it seems that we do not care abt the people we claim to care abt.

11:19 PM  
Anonymous Anonymous said...

and they killed off Mr Brown for saying what is REALLY happening now.

Such is life in Singapore.

12:16 AM  
Anonymous Anonymous said...

hey XB
i totally agree with you on this matter that this GSt hike will hit the lower segment of the society and it will raise the cost of living.
but can you mention one economy who has prices constant?
maybe north korea....
prices cannot be kept constant, neighbours like India and china are giving our "little red dot" a very hard time. this world is very competitive, if singapore does not make itself attractive for investment, jobs and/or companies will simply move to india or china. Singapore is creating a robust R&D environment and developing other key industries which (lets hope) will give jobs to our children.
Singapore has no natural resources and the government needs money to do all these things.
BUT what should be done is the lower income and elderly should be cushioned, the government should not forget these people.
people keep saying that that singapore's personal taxes are still lower than other industrialised nations...true,...but those nations also have a good welfare system in place...and additonal help from the governmen is available and in many of those countries healthcare and education are free.
the solution is not to lower the GST but to protect those who might get adversely affected by the have other safety nets and have an extensive system that gives the unfortunate a fair chance.

8:49 PM  
Anonymous Anonymous said...

Somewhere sandwiched in the speech was a very crucial point, which is being overlooked. Yes, the poor oops.. the lower imcome group will get help, for the rich is peanuts..but the middle income or the majority..I repeat "should be okay" that was the message. Go interpret.

12:18 AM  
Anonymous Anonymous said...

we are excellent "complainers"
all here we are doing is complaining. It is darn easy to complain.
can anyone thing of a possible solutions.....h

6:34 PM  
Blogger Collector said...

"can anyone thing of a possible solutions":
Shoot the bastards before they kill us off.

6:24 PM  
Anonymous Anonymous said...

For those residing in Singapore...(this was sent to me by an ex-auditor)

Example 1
In 2006, if after rebates etc and your net taxable income is $60,000, the income tax you need to pay is $2,700 (8.75%). If you spend $800 a month on needed goods and services, the GST paid for 5% will be $480 Total=$3,180 in
Tax paid.

In 2007, if after rebates etc and your net taxable income is $60,000, the income tax you need to pay is $2,600 (8.50%). If you spend $800 a month on needed goods and services, the GST paid for 7% will be $672 Total=$3,272 in
Tax paid.

From $3,180 to $3,272, the effective increase is 2.89%.

Example 2
In 2006, if after rebates etc and your net taxable income is $400,000, the income tax you need to pay is $61,650 (21%). If you spend $4,000 a month on needed goods and services, the GST paid for 5% will be $2,400 Total=$64,050 in Tax paid.

In 2007, if after rebates etc and your net taxable income is $400,000, the income tax you need to pay is $58,700 (20%). If you spend $4,000 a month on needed goods and services, the GST paid for 7% will be $3,360 Total=$62,060 in Tax paid.

From $64,050 to $62,060, the effective decrease is -3.11%.

Example 3
In 2006, if after rebates etc and your net taxable income is $25,000, the income tax you need to pay is $187.50 (3.75%). If you spend $800 a month on needed goods and services, the GST paid for 5% will be $480 Total=$667.50
in Tax paid.

In 2007, if after rebates etc and your net taxable income is $25,000, the income tax you need to pay is $175 (3.5%). If you spend $800 a month on needed goods and services, the GST paid for 7% will be $672 Total=$847 in
Tax paid.

From $667.50 to $847, the effective increase is 26.89%.

The fact is: The poorer you are the more the GST is going to make you poorer

6:34 PM  
Anonymous Anonymous said...

Ridiculous. How long would a package of $200 - $500 (estimated) help the poor in the long run? With that amount in increased GST, the poor is poorer. How humane is that? PAP is being more ridiculous after every election. I'd vote for anyone but them for as long as i live.

3:35 AM  
Anonymous Sakit hati said...

I like the way the PAP orchestrated this thru Parliament. First, the post 65 MPs came out after the MRT death occured and championed the cause of their poor constituents. They said the help packages were confusing and dumbfounding even to them. After much animated debate, the PM came out with a magical solution - raise the GST by 2% and then take the money to help the poor. We all get screwed first, the poorer we are, the harder we are screwed. Then, God only knows when the benefits (more than a billion will be gotten after the 2% rise) will come back to the poor. We just sit and twitch our fingers and come to accept it after a short period of time. Then life is normal again and the PAP knows this. 66.6% continue to vote them so we all just take it in our strides.

7:31 PM  
Anonymous Anonymous said...

"can anyone thing of a solution?",unquote. The problem makers should be the one to solve it. After all those four decades of administration and we are still facing mounting problems, you want the layman to provide solution on behalf of them?

6:41 AM  

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