Singapore Prime Minister and Finance Minister Lawrence Wong spoke in Parliament today on Singapore Budget 2025, as part of the ongoing parliamentary debate following the budget presentation last week.
PM Wong began by saying that while he could not cover all the questions raised by MPs in his speech today, he had heard everyone. However, during the course of his address, he responded directly to the criticism of Workers’ Party leader and Leader of the Opposition in Singapore Parliament Pritam Singh, who called Singapore Government measures “poor fiscal marksmanship” and questioned the need for GST hikes, blaming the tax increase for fanning the “flames of inflation”.
Singh had said in his February 26 parliamentary address, “Why the [People’s Action Party] went headlong and headstrong into raising GST, and thereby turbo-charging inflation further, is something only the PAP itself can answer to Singaporeans for.”
PM Wong countered today, “Let’s be clear, as a small and open economy, our inflation was driven primarily by global factors: wars, supply chain disruptions, and rising energy costs.”
He said that prices had been going up globally even before the GST rate hikes, and that the country’s central bank, the Monetary Authority of Singapore (MAS), had assessed that “the effect of the GST increase on inflation would be transitory”.
“Indeed, that was the case,” said PM Wong, citing some Consumer Price Index (CPI) figures between 2022 and 2024. He illustrated that even as GST was increased by 1 percentage point each in January 2023 and January 2024, the CPI inflation in Singapore went down from 6.1 per cent in 2022 to 4.8 per cent in 2023 and 2.4 per cent in 2024.
“Where is the turbo-charging?” asked PM Wong with some feeling, after showing that even as GST rates went up in Singapore, CPI inflation went down.
Then he said, “Look, I know elections are approaching, but this [parliamentary] chamber is not an election rally. Let’s not get carried away… and [let’s] have a debate based on facts.”
The “fact” was, he added, that inflation had eased in both Singapore and around the world, but cost pressure concerns remained. He said that “headline economic indicators are positive but sentiments are poor” even in many other advanced economies.
There is a reason for the negative vibes. It is not just about feelings and sentiment. It is because price levels remain high, even though inflation has eased. And these create real pressures. And it takes time for people to adjust to these new price realities.
Lawrence Wong, Singapore Prime Minister and Finance Minister
With an understanding of these concerns, the Singapore Government had continued to provide “temporary help measures through the CDC vouchers and other measures”, said the prime minister.
The key plan in the “one-off SG60 surplus sharing package” was also in the form of vouchers, so that it could provide “some relief on the cost front”, he said, reiterating that the Singapore Government would continue to give “cost-of-living support for as long as needed, and within our means”.
