Cost of living concerns go 'far beyond' GST: PM Wong

SINGAPORE: Singaporeans' concerns over the rising cost of living go "far beyond" the Goods and Services Tax (GST), said Prime Minister Lawrence Wong on Monday (Mar 3).

"I know that for many Singaporeans, the biggest concern is the cost of living and understandably so. Prices have gone up, and it is tough for many families," Mr Wong said in a YouTube video titled Tackling Cost Pressures.

"Some wonder if the GST increase had made things worse. But let’s be honest, the reality is that what we are facing goes far beyond the GST."

The video comes days after the Budget debate, during which cost of living concerns were brought up.

Workers’ Party (WP) chief Pritam Singh had on the first day of the debate questioned the government’s move to raise the GST and “thereby turbocharging inflation”.

In his Budget round-up speech last week, Mr Wong debunked Mr Singh's claim, noting that external factors were the primary drivers of inflation in Singapore, and in the two years that the GST was increased, inflation according to the Consumer Price Index actually fell.

Mr Wong said in the video that inflation has surged due to wars and supply chain disruptions globally, with no country spared.

"We feel the pressures here in Singapore too, especially as a small and open economy. After all, we import almost everything we consume.

"Remember at the beginning of this decade, we were still in the thick of battle, fighting COVID-19," Mr Wong said, adding that it was a "time of great uncertainty" as they did not know how long the pandemic would last, how the virus would mutate and how many new waves of infections Singapore would face.

He said: "Our finances were stretched; we had gone to the President five times to use past reserves."

"We were not sure if we would have enough resources to recover from COVID, create jobs for our people, and look after our seniors. We did not know how deep a fiscal hole we would end up with."

Mr Wong added that at the same time, they knew healthcare spending increased each year, especially with Singapore's "rapidly ageing population".

"It was not an easy choice, but we knew we had to act responsibly," he said.

"That is why when the economy showed signs of stabilising, we decided to proceed with the GST increase."

But Mr Wong also pointed out that the Assurance Package was also rolled out to "effectively delay the impact of the GST increase" for most Singaporeans, adding that the package was enhanced over the years to "further cushion the impact" on the cost of living.

"In this Budget, we have provided additional measures to further ease cost pressures; including a special SG60 package with more help for every Singaporean," he said.

"We will keep doing what is necessary to help Singaporeans through these difficult times and for as long as it is needed."