
A sales executive taking stocks of Mattel toys of the shelves

3B '07 ENGLISH ONLINE READING PORTFOLIO =/
Pub Date: 05/02/2007 Pub: ST Page: H6
Day: MondayEdition: FIRST
Headline: GST hike needed for growth: ministers
By: KRIST BOO
Page Heading: HOME Source: SPH
Mah Bow Tan to give details next week on how it will help build S’pore’sinfrastructure
NATIONAL Development Minister Mah Bow Tan intends to sketch out next week howpart of the revenue from the impending goods and services tax (GST) hike willgo towards building Singapore’s new roads, bridges and other keyinfrastructure.Speaking to reporters before entering a closed-door GST dialogue withgrassroots leaders yesterday, Mr Mah reiterated the Government’s stand that the2 percentage point tax hike will also boost education, health care andinfrastructure, besides being used to give low-wage workers a leg up.On his next week’s announcement, he said: “I am going to talk about some of thethings we need to do in order to put Singapore in a position to capitalise onthe opportunities in the future.”The 5 per cent tax is scheduled to be raised to 7 per cent after Feb15, whenthe Finance Ministry unveils the new national Budget.Mr Mah was not the only minister out on the ground to drive home the “GST hikefor future growth” message.At another community event, Defence Minister Teo Chee Hean told reporters thatSingaporeans should not think of the tax as “just a (fund) transfer exercise”.It is an opportunity to move Singapore into a more competitive spot.The extra GST revenue will add $1.5 billion to Singapore’s coffers annually.Part of that would fund, for example, education, health care, transportationand a more attractive business tax structure designed to lure investments.Mr Teo said: “It’s not just a matter of transfers, but how to grow the pie, sothat we can be more prosperous.”Both ministers stressed that the Government will cushion the impact of theincrease.Rebates and reliefs will be handed out to lessen the hike pain on the lower andmiddle income groups.With the income gap widening in Singapore, there is “a greater sense ofanxiety” among the low-salaried in this round of GST hike compared to the lastone – a staggered increase – in 2003, Mr Mah conceded.The Government’s plan is that through education, children of low-income workerswould later go on to higher-salaried jobs.Through job re-training, low-wage workers would step into better payingpositions.“All these things require resources,” he pointed out.Closing the doors to low-wage foreign workers, or imposing a minimum wage,would not work, and the Government has explained why, he said.Some of the GST revenue will be channelled into health care, a pressing issuewith Singapore’s ageing population.As of now, many Singaporeans do not have enough funds in their public healthinsurance account, Medisave.The Government wants to “incentivise” this group, some of them self-employed,to top up their accounts, he said.There have been calls to keep basic necessities exempted from the hike, butthat would not be feasible.Mr Mah said: “The moment you exempt something from the hike, you have a hardtime trying to draw the line.”Instead of exempting the less well-off from spending more, the answer is to“supplement their income”, he said.
ADDITIONAL REPORTINGBY CHUA HIAN HOU