ChannelNewsAsia kept playing the video clip over and over on national television, of Finance Minister Tharman Shanmugaratnam rebutting Opposition leader Low Thia Khiang's contention that the Goods and Services Tax is hurting the lower-income group. Altogether now, let's say it one more time, GST is a regressive tax.
While Tharman got his knickers in a twist trying desperately to avoid using the "R" word, he could only get so far as to declare that, "on its own, the GST is a flat tax" and "not a progressive tax". Oh, he did throw in the colourful graphs and stuff about "Grow and Share package" and "special transfers to help the lower- and middle-income groups", one time exercises that seem to crop up only in an election year. The "GST plus" invention - workfare and the other schemes - can hardly be of solace to the Ah Soh who collects cardboard and empty cans for threadbare subsistence. Tharman chose to ignore the fact that the GST millstone is there for all perpetuity, once PM Lee Hsien Loong hiked it from 5% to 7% at one go. The combobulation of after measures following the implementation only serve to confirm the short comings of poor decision making.
The genius of Low's counter argument is in it's simplicity, "Why you first of all tax the low-income family and give him offset package?" Indeed, would you let someone cut your finger so he can give you a free band-aid?
To illustrate that the rich contribute to the bulk of the GST receipts, Tharman coughed up the statistic that the GST paid by the lower-income group - up to the 60th percentile - formed about 16 per cent of all GST collected. Big deal. We know the GST for a $45 cut of porterhouse steak at Morton's is several times the GST on a $3.50 plate of chicken rice. So is the $133,000+ monthly pay check (for someone in Tharman's tax bracket) several times more than the $2,000 per month some families are surviving on in First World Singapore. What Tharman and people of that ilk fail to comprehend is that the poor can seldom afford to eat out in the first place. For them, survival is affordable rice, cooking oil, salt and sugar. Exactly why Low made the call for the Finance Minister to reduce GST from 7 to 5 per cent and to waive the tax for basic necessities. As Confucius would say, "Life is really simple, but we (they) insist on making it complicated."