Thursday, November 16, 2006

The hardship of a Singaporean

Just when the economy is humming steadily and a beautiful picture is being painted for the future of Singaporeans, PM Lee had to drop an unexpected bomb on us by releasing news of a further 2% increase in the GST to a alarmingly high percentage of 7% probably next year. And the rationale? To channel greater funds to help the lower income families. While the cited reason seems at first sight to be flawed and it doesn't take an economist to realise that GST is a regressive tax, thus affecting lower income families to a larger extent, further looking into the issue will lend some credibility to the policy. The lower echelon of the society who has a weaker purchasing power tend not to spend their disposable income on goods that are considered too luxury and since the necessities of everyday life can be spared partly from the GST, eg in NTUC, I have a strong contention that the bulk of the burden brought about by the GST will inevitably fall on the middle income families, which I sadly belong to. Avoidance of the GST will see less visits to restaurants like Swensons, Cafe Cartel and the likes, till then, enjoy while we still can.

scribbled at 9:43 PM