The move to raise the Goods and Services Tax (GST) in three to seven years' time will help fund increasing Government spending arising largely from an ageing population, said Prime Minister Lee Hsien Loong on Sunday (Mar 4).
Speaking at an annual Chinese New Year celebration dinner for his ward at Ang Mo Kio GRC, Mr Lee also called on residents to support the Government’s plans to increase healthcare spending, as well as raise GST in time to come.
“Our children are not yet voting, our grandchildren may not yet be born, but their lives and future depend on us acting on their behalf, making wise and far-sighted decisions that protect their interests,” said Mr Lee, who called the impending tax hike a “prudent and responsible long-term approach”.
He added that the Government has thought over its options carefully, such as drawing more from the reserves, before deciding to raise taxes.
“The ageing society and healthcare is not a rainy day, it is an every-day-need-money day, a long-term trend. We are ageing, we will need to spend more on healthcare every year, year after year, for many years to come. If we use the reserves for something we need money for every day, we will find there will be no more money when we need it,” said Mr Lee.
He also touched on the timing of the announcement of the GST hike, an issue that has come up in Parliament in recent weeks, and reiterated that announcing it now is the responsible and honest thing for the Government to do.
“We do not need the money yet, but we can see the trends clearly and we know we will need the money by the next decade. We have to plan ahead, work out how we will get what we need to spend and announce it early now so that people will know. This way, people can plan ahead and understand why the tax increase is necessary and justified,” said Mr Lee.
About 2,500 residents attended the annual Teck Ghee Chinese New Year celebration dinner at Ang Mo Kio.