Raising Government Revenue after 2016

Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam told Parliament on 1 March 2012 that the Government would have to find new ways to raise revenues after 2016.

He did not say why he thought 2016 was likely to be a watershed year.  It appears the need for new sources of revenues will not arise before 2016.

Budget 2012 — Memorable Quotes

Benefits for the not-so-wealthy

[I]n the last 5 years, the transfers we provided to the low-income group — net of the taxes that they pay, which is basically GST — amounted to [19 per cent] of their incomes.  This is a significant increase from the previous 5 years...  [O]ver a lifetime for a low-income household... for every dollar that the low-income household pays in taxes, they get back [$4.25] in [permanent] benefits.  A whole set of benefits add up to this — which includes Workfare, housing grants, and means-tested healthcare and education subsidies.

Tharman Shanmugaratnam (1 Mar 2012)

For the middle income family that owns a car... they get back about 80 cents [in lifetime permanent benefits] for every dollar in taxes paid.  Without car ownership, they could get back $1.50 in [lifetime permanent] benefits for every dollar in taxes paid.

Tharman Shanmugaratnam (1 Mar 2012)

Affordability of HDB flats

[O]ur enhanced housing grants for lower income families are such that a family with a monthly income of as low as $1,000 can now purchase a small flat.  98 per cent of our younger cohorts, those who are below 35, earn at least $1,000 of income a month.  A family that earns a bit more, say $1,500, can purchase a medium-sized flat.

Tharman Shanmugaratnam (1 Mar 2012)

Budget 2012 — Concerns About Rising GST Voucher Expectations

Now that the GST Voucher scheme will be made permanent, some people — tax consultants, economists and academics, all of whom who are probably upper- and middle-income individuals — have expressed concerns that the GST Voucher recipients will expect more ("GST Voucher Seen as Better Than Exemption", The Business Times 28 February 2012).

The GST rate was increased in three steps from 3 per cent in 2003 to 7 per cent in 2007.