When the Hougang MP called for a cut in the GST from 7% to 5% in March 2011 to help people cope with inflation, Christopher de Souza (Holland-Bukit Timah GRC) deflected the sting with the qualifier, "High income earners, we know, consume more and therefore pay higher GST." He was arguing that what affects poverty and fairness is not the impact of any particular tax, but the impact of the tax system as a whole.
Even Thaman Shanmugaratnam, then the Second Finance Minister, had admitted that the GST “on its own is a regressive tax as it takes up a bigger portion of a lower-income person’s wages compared to that of a high income earner ”, but “GST plus other schemes will not be regressive”. The only problem with this caveat is that the GST is permanent, while the “other schemes” are temporary and have a finite lifespan.
That could explain the introduction of the new "permanent" GST Voucher (GSTV) Scheme in Budget 2012, a move that is supposedly intended to "help them (lower income families) to bear daily and medical cost, quite apart from topping up their income through workfare and improving the subsidies".
2.1 million adults are supposed to receive $440 million budgetted for the GSTV Scheme, in cash or CPF top ups. Up to $340 million in GSTV-Cash will be paid to elligible Singaporeans on Aug 1, each recipient will be getting $250 in GST-Cash. Another $100 million in GST-Medisave be used to top up by $450 the CPF accounts of elderly Singaporeans aged 65 and above living in HDB flats or private properties of Annual Value (AV) not exceeding $20,000. Those retired elderly with no fixed income staying at such residences will be getting zilch. Nada. Big fat zero. To receive financial relief from the regressive GST, they will have to downgrade from their comfortable abode to a hovel.
Typical of all government handouts, not all the monies budgetted will be distributed. Only those who have signed up by July 18 will be receiving notification in the mail, others have up to December 31 to sign up for their 2012 GSTV payout. The elderly folks who are illiterate, or have diminished mental faculties due to aging or other reasons, are bound to miss the boat.
But $1 billion was definitely spent on the Gardens by the Bay. Mah Bow Tan, the guy who blew $400,000 to rename Marina Bay to Marina Bay, must have made sure of that. After all, it's not like he was spending his own money. You can also bet GST will be levied on the admission charges to the Cooled Conservatory and Skyway. Those who can't afford to be included in the air-conditioned climes will have to watch in envy at the Outdoor Gardens, sweating their guts out in the heat and humidity. This has to be one of the many exceptions to the "inclusive society" illusion.