Wednesday, February 27, 2008

What is your problem, Sylvia Lim?

See what happens when you let one of these opposition members into parliament. Now you understand why it is important to stop them from entering parliament and making baseless, irrational and unreasonable assertions and insinuations. NCMP Sylvia Lim is out to mislead the public with her speech in parliament during the budget debate. Her remarks are not honest mistakes but deliberate attempts to undermine the credibility of our esteemed govt.

If you have no time to read the speech, here are the most harmful parts:

"I think it is quite clear that the government has chosen to raise the GST from 5 to 7% last July without compelling reasons, and this increase has compounded the inflation pressures on the people."

Our esteemed PM Lee has already said the GST hike is to help the poor. Isn't that a compelling enough reason to hike the GST?! Given Sylvia is from the Worker's Party which claims it is concerned about the poor, can't she see that the GST helps the poor and removing the GST will hurt the poor.

"Adding on another 2% on a higher base price has increased the cost of some items by more than 20%. Only very few people’s incomes have risen by 20% since last year."

We should be glad that our elites and ministers have received pay hikes of more than 20%, preventing a painful sacrifice by them that is caused by inflation. Does it matter at all for ordinary citizens that prices have increased? Probably not! Our leaders have already come up with innovative solutions to beat the price hikes. Eat at hawker center instead of restaurant. Take bus instead of taxi. Buy Sunny1 bread instead of Gardiner and so on. Our brilliant leaders have already found the solution for inflation for the ordinary folks so it doesn't matter if their wages have not risen 20% to catch up with inflation. Inflation can be solved by substitution.

"he other reasons cited were the hike in GST, and the revision of annual values of HDB flats. Both these reasons were not external but were the government’s policies."

Is Sylvia trying to blame the PAP govt policies for inflation? Oh come on, this is so ridiculous. The PAP govt has already explained the need for these price hikes. Raising taxi fare is to help Singaporeans by improving the availability of taxis. Revising the HDB prices upwards will help to shorten the HDB queues. GST is to help the poor. ERP hike is to smoothen traffic during peak hours. All the price hikes by the govt is done for the benefit of Singaporeans. The PAP has the interest of ordinary citizens close to its heart it is doing everything it can to help them.

“Singapore’s budgetary accounting system is among the most conservative in the world, as the fiscal balance is obtained by subtracting both operating and development expenditure from the government’s operating revenue alone."

What is wrong with that? Having surplus is a happy thing for the PAP govt. We should be happy for our govt when they make a surplus. Many people doing back of envelop calculations believe that CPF Life will also generate a surplus for the govt. Surpluses are a good thing - they help to fund investments in troubled banks, investments in troubled childcare businesses, and so on. ...Singaporeans get to work harder and longer as they service their mortgages for the most expensive public housing in the world while generating a surplus for HDB. Surpluses help to motivate Singaporeans to work harder and not become lazy.
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NCMP Sy
lvia Lim's Speech in Parliament

Mr Speaker Sir,

In last year’s Budget debate, the Workers’ Party was criticised for asking the question of whether the GST hike of 2% was needed in the first place. We had highlighted that, according to the government’s own estimates for FY 07, there would be enough alternative sources of revenue to fund the additional social spending of $2 - 4 billion per year.

At last year’s Budget debate, I had pointed out that based on the government’s estimates for FY 07, increases were already projected in personal income tax and statutory board contributions. I noted that it was also likely that stamp duty collections would rise due to recovery of the property market. The prospect of the Constitutional amendment to broaden the definition of Net Investment Income (”NII”) would also yield additional funds. I had asked if the corporate tax cut would result in revenue loss of $700 m as the government claimed, because the experience elsewhere showed that such cuts “paid for themselves” as they were stimulative in nature, resulting in more business activity which would yield higher tax collections. The question of whether land sales should be included as revenue to fund expenditure was also raised.

In short, the indications were already there last year that the GST hike was probably not needed.

Today, we see that the government estimates can hardly be called “estimates”! The government coffers are bulging at an estimated $6.4b surpluses, revised from a deficit of $0.7b projected last year. That’s off by more than $7b. Indeed, commentators have noted that the surplus estimate of $6.4b is still a provisional figure, which will only be finalised after FY 07 ends, after Mar 08. There is expectation that the surplus will “almost certainly” be more than that. This is because the government has provided for a large deficit for the final quarter of FY 07, which in their view is probably an over-provision. (BT 16-17 Feb 08, PK Basu). It should be noted that the overall budget surplus was achieved without the benefit of the broadened NII definition which is still not ready. Neither does it include land sales, which in FY 2007 is a whopping $10.5b.

Leaving aside the higher than projected GST collections, significant under-projections were seen in Corporate Income Tax, Personal Income Tax, Statutory Board Contributions, Asset Taxes and Stamp Duty. Without the additional 2% GST, conservatively, the surplus would still have been about $4b.

In a Citigroup report released on 28 Jan 08 (ST 29 Jan 08), Citigroup economist Kit Wei Zheng noted euphemistically that “the fiscal year 2007 assumptions were overly conservative”. He went further: “In hindsight, the GST hike may have been unnecessary or could have been delayed or staggered…the GST hike has contributed to the unexpected bulge in government revenues, while exacerbating inflation pressures”. Finally, Mr Kit expected that the government would probably not reverse the GST hike in any way “as it would be tantamount to admission of a mistake”.

Both the Prime Minister and the Finance Minister have cited 3 reasons for the rising inflation. Global price hikes in food and oil was only one of the 3 reasons. The other reasons cited were the hike in GST, and the revision of annual values of HDB flats. Both these reasons were not external but were the government’s policies.

Sir, with prices of food, transport and other essentials rising, Singaporeans have found that the addition of increased GST has had exponential effects. Adding on another 2% on a higher base price has increased the cost of some items by more than 20%. Only very few people’s incomes have risen by 20% since last year.

Going forward, should GST be at 7% in the coming years? We must assess whether there is a need and the impact on the people. Here, we come again to the government’s budgeting policies and practices.

For FY08, the government has once again projected a deficit of about $0.8b. In a commentary in the Business Times Weekend Edition 16-17 Feb 08, Chief Economist at Daiwa Institute of Research (Singapore), PK Basu, wrote a Commentary entitled: “Deficit Next Year? Just Don’t Bet On It”. It was observed that “Singapore’s budgetary accounting system is among the most conservative in the world, as the fiscal balance is obtained by subtracting both operating and development expenditure from the government’s operating revenue alone. The government’s ample investment income is not counted as government revenue, (though) in recent years (it has made) a “small concession” by using up to 50% of investment income to fund special transfers”. The writer also notes that since the government is starting FY 08 with a larger surplus as a base, next year’s fiscal balance will also be stronger, assuming budgeted increases in revenue and expenditure. Coming back to his initial question of whether there would actually be a deficit in FY 2008, he writes: “A betting man could do worse than place a large wager on actual revenues comfortably exceeding the Budget’s projections next year too!”

I note that there are signs that the government expects the economy to still do well in FY 2008. It has projected increases in statutory board contributions and personal income tax. It has even projected an increase in corporate tax collections, when the cut in corporate tax would have kicked in. It also expects strong collections from land sales, projecting land sale receipts to be nearly $10b.

Sir, I think it is quite clear that the government has chosen to raise the GST from 5 to 7% last July without compelling reasons, and this increase has compounded the inflation pressures on the people. Given that the increase was not necessary, the government should do the following to alleviate the suffering of the people:

a)Reverse the GST rate back to 5%.
b)Additionally, since food inflation is exceptionally high, zero-rate GST on essential food as other countries have done.

If the government did these, the people would appreciate it. They would be better off than having to live with ever increasing prices, long after the one-off giveaways have been spent.



17 comments:

Anonymous said...

Your post is brillant in its sarcasm around the PAP and its lack of understanding of anyone that makes less than S$300k a year and the lack of real political debate in Singapore because the government owns all media.

Anonymous said...

wouldn't it be great if she becomes the prime minister?

all expense reduce by 2% or more instead of all the peanut rebates.

Anonymous said...

No wonder they are terrified of a few more opposition members in Parliament. They will need a few more talented ministers to fix them.

Anonymous said...

Despite all the talk about "golden era" and how great things are, one gets the feeling that many things are getting out of control ..... unravelling ?

Anonymous said...

Before LKY came into power, when he was the opposition, he spoke highly of democratic principles, against abuses of the government, perhaps as eloquently than any opposition figures now could. Then what happened?

So don't trust politicians based on their rhetorics.

Trust rather the system, the principle of democracy which is very simple : checks and balances are needed for any government to prevent abuse of power.

For this reason, I have and shall vote for the opposition because I believe in restoring the checks and balances which had been compromised by PAP over its long period of rule.

One Indian political analyst once wrote about his country's politics: "Voters always look up to this and that political candidate and see all the good side of them. But once they are elected, their defects begin to show. Voters become disappointed and look for better leaders, only to go through the same cycle again."

I asked a mainland Chinese what their people think of their politicians. He answered thus: "In every country, the masses and politicians are always 'Yi ke ren, yi ke nian' , meaning they are always 'face-off ".

When I look around the world I cannot help agreeing somewhat with the 2 aforesaid views.

To put it in another way, politicians are ultimately what they are because of institutional checks and balances OR the lack of them.

People should vote for the opposition not so much they happen to think they are better than PAP but rather because they need to recapture their political power back from PAP, to take control their own destiny, they need to restore checks and balances to PAP and hence they need to vote in more opposition candidates.

What is really important is that the voters begin to see themselves in the rightful position of being the ultimate BOSS of this nation.

You see if one says a particular opposition party or candidates are such credible people, there are also others who will disagree. And obviously PAP has the advantage here because it can boast that it has over 4 decades of track record in governance while the opposiition has none.

So the opposition should not worry that they have not enough highly-qualified people to stand for elections. Worry instead that the people still do not understand what it means to take control over their lives and to be the master of the nation, to disallow PAP to manipulate them and abuse its power.

The idea that PAP or LKY is boss is still very entrenched and this understanding must be completely reversed. If anyone laughs at this proposition, then this itself betrays the depth of the real problem facing this country.

It is not a case of opposition versus PAP but rather people versus PAP.

Anonymous said...

To some extent, you can tell from your own heart which politicians have the heart for the people or not.

Sylvia Lim, Banzai.

Lee Kuan Yew, Lee Hsien Loong and Crony, stink eternally.

Anonymous said...

if i remember correctly, lky himself said that one will never be able to vote the government out...

wonder why makes him say so.... is there something we don know?

it's not about voting any more...

yamizi said...

But whatever Sylvia had suggested, most probably won't happen one what.

Onlooker said...

Her problem is that she see the real problem.
The target GST rate is 10% if anyone remembers.
But where did the money go.
Now is the same situation face by president Ong Teng Cheong when he asked for the whereabout of you know.
he got stoned walled.
but now that is happening in a larger scale where the populace is asking the same question.
We got ignored and ridiculed.and Distracted(lapse in security after budget announcement).What perfect timing.

Anonymous said...

According to ST frontpage news (27 Feb), Hongkong is expecting a budget surplus of S$20b of which S$7b will likely to be given back to the people. The latter figure represents 35% of the budget surplus.

In Singapore PAP reports a budget surplus of S$6.5b but is only giving back S$865M or 13% to the people.

Yet the said ST report gave a odd sycophantic slant to it by saying that the Hongkong govt needs to follow PAP's example by giving out goodies in the form of cash.

Yeah sure, every country in the world has to learn from PAP, especially on how to suck the blood out of its own people so that it can walk with the big boys - the big banks of the West, to make speeches to their Congress and be called the "wise old man of the East" and be extolled as a true democracy and a corruption-free country, a shining exception in otherwise corrupt Asia.

Please don't make the toes of Singaporeans laugh. Wake up from your ego-trip, PAP!

No matter how much you try, you are just a running dog to them. Tis why you were forced into Citibank only to lose S$1 billion in one short month.

black feline said...

what's YOUR problem??????????????

Anonymous said...

all of you not happy with PAP right? don't just complain, start your own propangada. educate yr family & friend and get more support to thrown them out of power. if all of us do it by our small ways and keep the momentum going, next election, out they go.provide election is not rigged by them, keep yr finger cross.

Anonymous said...

By next election the goalpost will probably be moved again, maybe a 8 men GRC or more redrawing of boundaries. Don't worry, they know the tricks.

21st dec 2012 said...

black feline @ 1.51am

What ails you!!!!!!!!
What ails Peeky the cat who got stage fright and bit the policeman so hard!

Anonymous said...

"According to ST frontpage news (27 Feb), Hongkong is expecting a budget surplus of S$20b of which S$7b will likely to be given back to the people. The latter figure represents 35% of the budget surplus.

In Singapore PAP reports a budget surplus of S$6.5b but is only giving back S$865M or 13% to the people."

Anon, you are only half way there.
Why do you think the gov is announcing the surplus now instead of few months later ?

Surprise ! Because a even more excessive surplus is on the way from the property profit that is $10 billions dollars ! Even more enormous than crappy surplus after deduction from Temasek and GLC.

Listen to Sylvia Lim's speech from www.onlinecitizen.com, and you find out why.

The hong kong budget already included the property tax which means that budget surplus is less bizarre than Singapore.

Obviously the gov choose to announce the surplus now is to reduce the impact. Which will create greater uproar ?
6.4 billions versus > 16.4 billions
and 16.4 billions is more than 20 times offway forecast !

Remember property profit is just one area of surplus, other surplus from exotic tax will be announced as well but in piecewise manner.

In fact, they will downplay the surplus by offloading majority of surplus into Temasek and GLC as how much they offload remain secretive and intransparent.

Anonymous said...

Sylvia Lim's problem is that the majority Singaporeans are cowardy, Kiasi.

It just takes a vote to kick out the dogs.

If not, you continue to get huge dose of bad governance, like this sicking you lots of $$$$$, then "out of faked concern" for you, return pitiful some $$ to you.

yamizi said...

But now it seems that the news focus on the escaped terrorist in suspect and forgot about the whole surplus of the budget already.