Even as the Singapore Budget 2025 makes provisions for financial support to help people deal with inflation, Workers’ Party leader and Leader of the Opposition in Singapore Parliament Pritam Singh has fired a salvo at what he calls the “poor fiscal marksmanship” of the Singapore Government.
Speaking in Parliament on February 26, addressing the Singapore Budget 2025 presented by Prime Minister and Finance Lawrence Wong last week, Pritam Singh criticised the Singapore Government’s decision to raise the Goods and Services Tax (GST) in 2023 and 2024, stating that these moves had fanned the “flames of inflation”. The country’s “exceedingly healthy fiscal position” made the GST hikes unnecessary, he said.
Pritam Singh, who was convicted last week (a day before the Singapore Budget) of two charges of lying to a parliamentary committee, was able to retain his Parliament seat (Aljunied GRC) and his eligibility to contest the Singapore general elections to be held in 2025, as his penalty for each charge did not reach the disqualification cut-off.
The Indian-origin Leader of the Opposition, in his speech yesterday, divided his reply “to this second Forward Singapore budget” in three parts. The first part (“The Big Picture”) went over what the future holds for Singapore, from aviation and maritime trade to nuclear power and climate change.
In the second and main part of his speech (“Budget 2025”), Pritam Singh began by saying, “Coming on the cusp of general elections, that Budget 2025 would be an election budget, was not a surprise. The PM and Finance Minister and Senior Minister Lee Hsien Loong had set the stage by providing numerous assurances that cost-of-living concerns would be addressed.”
Stating that “the concerns on the ground about cost-of-living are known to all in this House”, Singh analysed the use of CDC vouchers in Singapore to offset inflation.
We started the first budget of this [Singapore] Government’s term in 2021 with the disbursement of CDC vouchers worth SGD 100. Today, the vouchers are at SGD 800. Cost increases have hurt people from across all segments of society.
Workers’ Party leader Pritam Singh
The Opposition leader said that the “broad statistics for 2024” that Lawrence Wong had referred to in his Budget 2025 speech, such as “4.4 per cent growth, inflation continuing to ease, wage increases outpacing inflation, median income of resident workers rising by 3.4 per cent above inflation, and income inequality being at its lowest since 2000”, did not necessarily mean economic benefits for all.
“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,” said Singh.
Life is very tough for the Singapore that is in the heartland. Concerns over jobs, prices, housing costs, and opportunities continue for many Singaporeans and their households. The numerous vouchers will give us help for a little while, but not for long. After all, no GST offset package lasts forever.
Workers’ Party leader Pritam Singh
Cutting between the past, present and future of the Singapore economy, Singh spoke of a development that he indicated could mean an existential crisis for many Singapore businesses — that is the 2026 launch of the Johor Bahru-Singapore Rapid Transit System.
Singh said that the people of Singapore were already going to Johor Bahru to get goods and services at lower prices. When the Rapid Transit System began, “many businesses [in Singapore] will have to seriously review how far they can expect Singaporean or other local customers to continue patronising them”, said the Workers’ Party leader.
Why was GST raised in 2023 and 2024?
In the third part (“Fiscal Situation”) of his speech, targeting “the Government’s budget marksmanship”, Singh said, “Apart from the goodies that were expected in this Budget, it was the fiscal position at the end of the term which raised many eyebrows. The Government’s exceedingly healthy fiscal position has led many Singaporeans to question why the GST rate had to be raised in 2023 and 2024.”
Figures cited by Singh on the fiscal surplus of Singapore showed that in 2024, the originally estimated surplus of SGD 778 million was later “revised massively upwards” to SGD 6.4 billion. For 2025, the projected fiscal surplus is SGD 6.8 billion.
Taking into account earlier financial years’ estimated deficits that finally turned into a surplus, Singh said, “The overall surplus for fiscal years 2021 to 2025 or this term of government is set to hit SGD 14.3 billion.”
The healthy fiscal situation “has led many to question the necessity of raising GST”, said Singh, adding, “The [Workers’ Party] has raised this matter on numerous occasions in this House, even participating actively to consider alternative levers of revenue in the budget debate of 2023.”
Even as imported inflation contributes to price rises locally, there was no need for the PAP Government to add fuel to the fire and fan the flames of inflation further with a GST rise. Even if a decision was made to raise it in 2023, there was ample policy space to delay the second increase in 2024 when the country was in the thick of inflation.
Workers’ Party leader Pritam Singh
Analysing how increase in GST rates led to an increase in the cost of living, Singh said, “Why the PAP went headlong and headstrong into raising GST, and thereby turbo-charging inflation further, is something only the PAP itself can answer to Singaporeans for.”
He illustrated, “As every Singaporean knows, a 1 per cent rise in GST does not lead to a 1 per cent rise in the cost of a cup of coffee. Increases are incremental, as we have experienced in how purchases from the local shop or weekly supermarket trip have cost a good 30 to 40 per cent more for Singaporeans since GST was hiked in an inflationary environment never seen before in decades.”
The Opposition leader told Parliament that “when these handouts stop” — meaning Assurance packages and CDC vouchers — “the 9 per cent GST will remain” and might even be increased.
“The Government has shown poor fiscal marksmanship in trying to match Singapore’s expenditure needs with revenue,” said Singh.
Criticising the “budgeting accuracy”, the Workers’ Party leader said, “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?”
