GST hike necessary to address rising costs, says Shanmugam

But Govt will take care of residents, he says, as healthcare expenses rise, population ages

- Anjali Raguraman

The goods and services tax (GST) hike was a necessary move to address rising healthcare expenses and an ageing population, Law and Home Affairs Minister K. Shanmugam said on April 29.

Speaking at a PAP rally for Nee Soon GRC at Yishun Stadium, Mr Shanmugam pointed out that, by 2030, those aged 65 and older would make up a third of the population.

He said: "Healthcare costs are going up. Who is going to pay for them? How are we going to pay for them?"

The GST hike — which was raised from 7 per cent to 9 per cent over two years, in 2023 and 2024 — has been a hot-button issue in this general election.

Opposition parties have been critical of the move, and have sought accountability for the timing and need for its implementation. The WP, PSP and Singapore Democratic Party have called for a reduction of the GST to 7 per cent or less to alleviate cost-of-living pressures.

Mr Shanmugam challenged such rhetoric and suggestions that the Government could tap more of the investment returns from Singapore's reserves, instead of raising taxes.

"When people tell you you can spend without having to pay for something, in a few years, your future, your children's future and the country's future will go down," he said.

He pointed out that the top 20 per cent of earners and foreigners pay most of the GST.