SINGAPORE - As Singapore's social spending increases, it will have to make hard decisions on who should receive assistance in order to keep public spending lean and targeted at those who are truly needy, said Mr Murali Pillai (Bukit Batok).
He was among MPs who spoke during the Budget debate on Tuesday (March 1) about recently announced tax changes and funding of Singapore's social programmes.
He expressed support for the Government's decision to raise taxes at the top end, such as on personal income for the top 1.2 per cent of earners, high-end property and luxury cars.
Requiring those with more to contribute more in taxes to fund social programmes to help those who are marginalised keeps the nation's social compact strong, he said.
"Such contributions by the wealthier amongst us will also serve as an investment, not just for the future for the less fortunate, but also for their own continued economic well-being and growth.
"After all, the strength of our social compact provides the foundation of our economic growth. In this way, their businesses and wealth will continue to grow, in a society that is stable and fair, and where each man feels he has a place," the PAP backbencher said.
Mr Murali noted calls among people who own private landed properties but who have no steady income asking for government support - a point raised on Monday by MPs such as Mr Chong Kee Hiong (Bishan-Toa Payoh GRC) and Non-Constituency MP Leong Mun Wai.
In the Assurance Package, a person who owns a single private landed property but does not earn any income can receive up to $1,600 over five years, and this along with other measures would allow them to receive more than five times the goods and services tax (GST) they would pay in a year.
"The reality, however, is that with the landed property prices as they are, these persons can actually well afford to fund their own expenses through readily available reverse mortgages from banks which allow them to live comfortably in their homes until the end of their lives," Mr Murali pointed out.
Thereafter, their homes may be sold and the proceeds applied against loans extended by the bank, he added.
"It is not easy to make these arguments to people who feel very strongly about their properties but we must, on behalf of a society where more than 90 per cent live in flats, push back against such claims."
Dr Lim Wee Kiak (Sembawang GRC) called for a more progressive property tax, stating that there is room for more adjustment, especially on top-end properties such as good class bungalows (GCBs).
He pointed out that given how annual value is calculated and Singapore's property tax system, the property tax levied on GCBs is comparatively lower than condominiums on a per square foot basis.
In his speech, he also asked the Government for data on the total tax collected from residential housing, and the proportions by housing type.
Meanwhile, Ms Mariam Jaafar (Sembawang GRC) suggested a permanent growth dividend, tied to gross domestic product growth or budget surplus, to give every Singaporean an additional stake in the nation's economic progress.
She noted that similar one-off payments were made previously, such as the SG Bonus in 2018, while the Solidarity Payment in Budget 2020 inspired unity among Singaporeans, even if they eventually donated their payouts.
This reinforces that Singaporeans win and lose as a team, and also provides an additional way to enhance financial security and mitigate inequality for those whose fortunes do not reflect the nation's success, Ms Mariam added.
