The main goal for GST is to provide our beloved grandparents and parents the healthcare they will increasingly need.
As our grandparents and parents retire, Singapore’s labour force participation rate is expected to decline and, with it, income and spending.
While social welfare for Singapore’s elderly people has grown greatly in line with her aging population, the insurance premiums have failed to catch up. They get increasingly expensive and out of reach for some groups of people, resulting in a widening of the insurance premium-social welfare gap. This gap, for now, can be closed by Singapore’s relatively healthy tax revenues. Imagine though, what if Singapore were to have massive debt issues instead? Singapore would find it tedious to maintain this welfare system for the aged in the long term.
Everyone will grow old.
- In 2020, 15% of Singaporeans is aged 65 and above
- In 2030, 25% of Singaporeans will be aged 65 and above.
The higher the aging population, the higher the healthcare costs incurred since visits to the doctors will become more frequent. The Singapore government cannot leave the aging population in the lurch but to take care of them. Since the workforce participation rate in Singapore is still relatively strong and the economy stable for the past few years, GST increase cannot be avoided. The increase is necessary in order to look after our grandparents, parents and ourselves better when we grow old.
Watch the video of Second Minister of Finance, Ms Indranee Rajah’s Interview with Class 95: https://www.facebook.com/Class95FM/videos/208163783665147/