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SINGAPORE: At the People’s Action Party (PAP) rally in Yishun Stadium on April 29, Law and Home Affairs Minister K. Shanmugam sent a strong message — the GST hike, although much disliked, was inevitable. Shanmugam cautioned that spiralling healthcare prices call for logical funding as he talked about the impending demographic shift, where one-third of the city-state’s population will be 65 or older by 2030.
The Goods and Services Tax (GST) was increased from 7% to 9% over two years, an act that triggered piercing condemnation from opposition groups. Shanmugam refuted proposals to cut GST and disputed suggestions to tap more into reserves. According to the minister, while these are politically appealing, they were economically risky: “When people tell you that you can spend without having to pay… your children’s future will go down.”
Who bears the GST burden?
Politicians and election contenders belonging to the opposition, such as the Workers’ Party (WP), Progress Singapore Party (PSP), and the Singapore Democratic Party (SDP), have criticised the tax increase as untimely, inconvenient, and have castigated average citizens. But Shanmugam reasoned, claiming that much of the tax is shouldered by the top 20% of earners and immigrants.
More passionately, he contended that the GST system is fundamentally advanced when matched with government backing. “The majority of Singaporean households will get more money from the government than they will pay in GST for five years,” he said, adding that the lower-income families can collect enough to balance ten years’ worth of GST.
Detractors are sceptical and political opponents remain unimpressed, as they call for basic changes to lessen cost-of-living burdens, but Shanmugam was unyielding – “Never fear… as long as you are prepared to work, the Government will take care of you.”
Bracing for economic headwinds
Shanmugam depicted a moderate image of Singapore’s economic vulnerability in a changing global scenario. Alluding to US tariffs and unpredictable geopolitical indicators, he cautioned that ambiguity is the new standard — “You and I cannot say what’s going to happen… but we can prepare.”
In an optimistic tone, he cited current consultations between Deputy Prime Minister Gan Kim Yong and US Secretary of Commerce Howard Lutnick, discussions intended at safeguarding jobs and access to AI technology. “If we can find a solution, it saves jobs. It saves businesses,” Shanmugam said, articulating confidence that Gan can stay in the government after the election.
As the PAP presents a new team in Nee Soon GRC, Shanmugam’s rally speech set the tone for a crusade that balances tough realities with pledges of stability, betting the party’s reliability and trustworthiness on its capacity to survive economic tempests and political cyclones, both national and worldwide.
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