singapore parliament

SDA Statement on Budget 2021

The SDA is disappointed with the measures announced in Budget 2021.

With incomes stagnating, rising under-employment, and surging cost of living, these measures will put a further strain on Singaporeans.

(1) Trickle-down effects of the petrol tax hike on average Singaporeans

Petrol tax has been hiked by up to 23 percent. This is up from the last hike in 2015, when the tax rose by 45 percent.

This tax hike will increase the price of goods and services for average Singaporeans due to higher transport costs at every point of the business supply chain, further worsening the impact of rising cost of living.

At a time when many Singaporeans are turning to delivery and private transport jobs to tide over the Covid-19 pandemic, the increased tax will also result in a drop in their income.

It is a double-blow for Singaporeans who are struggling to find work and perform such jobs as a temporary alternative.

If companies and these workers do not suffer the cost increase themselves, commuters will be the ones who will suffer.

(2) GST on low-value imported goods squeezes the working and middle classes tighter

The government’s statement that levying GST on all low-value imports is aimed at helping local businesses stay “competitive” is farcical.

Especially, when the consistent key complaint of businesses is the sky-rocketing cost of rent.

The price increase borne by consumers due to GST is simply not enough to cover localised overheads for businesses to improve competitiveness.

Rather, levying GST on low-value imports hurts small-medium enterprises that rely on low-level import-export trade.

And worse, it further squeezes middle and working class Singaporeans who are looking for cheaper overseas purchases to tackle the spiralling cost of living.

All this, while the government enriches its own coffers.

(3) Rebates are temporary, but tax increases last forever

The government has given Singaporeans a “chicken wing” in the form of road tax and GST rebates.

But this is simply a short-term band-aid.

The tax increases will last into the future, burning a bigger hole in the average Singaporean’s pocket for many years to come.

Recall CareShield life – a policy forced on Singaporeans, that we have been forced to pay for, despite the government never giving sufficient broad practical justification as to its efficacy and benefit to Singaporeans.

Once implemented, the effects of such policies last a lifetime, and burden generations to come.

(4) Killing the environment while claiming to protect nature

The government has maintained that carbon tax is an attempt to protect the environment.

Yet, at the same time, there has been systematic clearance of what’s left of Singapore’s green spaces. From the Clementi forest region, to the Pasir Ris forest region, and now Dover.

And, while developed nations like the UK and Sweden have committed to reducing greenhouse gas emissions under the Paris Agreement on climate change, Singapore has instead allowed for net increase in emissions until the year 2030.

This begs the question – is the government committed to environmental protection, or are its initiatives engineered to earn more revenue from the public?

(5) Is this a government Singaporeans can trust in times of crisis?

The government has couched the tough Budget 2021 measures as necessary for the benefit of all Singaporeans.

But this is also a government that has fallen short on its commitment to Singaporeans.

During the 2009 global financial crisis, employers’ contribution rates to workers’ CPF was slashed from 25 percent to 10 percent.

The reason given was it was necessary at that time to keep wages competitive, and Singaporeans had to bite the bullet.

It has been 12 years, and that employers’ rate of CPF contribution has never been reinstated in full – it now stands at 17 percent.

The government asks that Singaporeans bite the bullet now to tide over the pandemic, but the SDA shares the sentiment of the many Singaporeans we have spoken to – we have no confidence that what Singaporeans have given up will ever be returned to us in full in the future.

(6) Who benefits? A matter of social justice

It is natural for Singaporeans to question whether the sacrifices we make today to tide over the Covid-19 pandemic are justified.

In other words, who is benefiting from our hard-earned tax monies – the rich or the average Singaporean?

Following the government’s S$110 million grant to SBS Transit, the privately-held transport operator posted a net profit of S$79 million despite the pandemic, and even went on to pay dividends to shareholders.

The company would have gone on to make a steep net loss in FY2020 without the government grant.

Meanwhile, complaints abound from small-businesses owners about the difficulties they face in claiming government grants.

While calling on Singaporeans to sacrifice for the collective good, there must be a clear account of where the benefits of our sacrifice has gone to.

This is in the interest of social justice.

In Conclusion

The SDA reiterates its disappointment at the measures announced in Budget 2021.

We believe these measures hurt the average Singaporean consumer, workers, and small-business owners struggling to make a living.

In times of crisis, the government should stand on the side of the people, and not on the side of profits.

SDA Chairman’s Office

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