Updated 29 Dec: Since this article has been featured on Tomorrow.sg, I figure that soon there will be lots of comments lambasting me for making such a controversial “suggestion” that Singaporeans take the 1.5% increase in GST for free transport. Please read my clarification and think about it before deciding to ‘blast’ me =).
To clarify – I think my writing style must be very poor, because my original intent was to point out with a pinch of sarcasm that public officers should not make remarks that are not well thought out and could be misunderstood by the public. Or at least they should only make statements that are well-supported by facts. But some readers misunderstood me and thought I am a stupid blogger who don’t understand the full impact of such a suggestion.
Think about it – Is it an economically proven fact that a 1.5% increase in GST can support a free public transport system, or was it just a “casual remark” by Minister Lim in addressing Singaporeans concerns over the cost of public transport? I do not think that a 1.5% increase would give us free transport. It’s too good a deal, I think, for public transport users (many who cannot afford buying cars and like myself, do not spend that much for a 1.5% GST increase to be of too much impact compared to the money we spend on public transport).
If that can be done, then would a 10% increase in GST give us all free HDB housing? It is not as simple as that. And I do not think that there is a direct correlation between GST increase and the cost of transport (as much as Minister Lim don’t think there is a direct correlation between transport fares and oil prices).
So just to see what kind of responses it would invoke, I posed the so-called “challenge” that Singaporeans ask for this to be implemented – knowing full well that it cannot and will never happen.
I personally feel that the bigger issue is, as public officers whose comments would be published in the papers for all Singaporeans to see, Ministers should make it clearly know whether what they are saying are supported by rigorous analysis or are just casual, unqualified examples.
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The money still must come from somewhere, right? It is about a 1.5 percentage point increase of your GST. So, now it is 7%. You want it to be free, do you want the GST to go up to 8.5% to run a completely free bus and train system?
Transport Minister Raymond Lim responding to queries on public transport fares
Hey, I would love it (and I’m sure many Singaporeans would agree with me) if I can get free public transport by paying 1.5% extra GST! I wouldn’t even mind paying 2% more!
Since Minister Lim was able to make that statement so confidently, there must be some level of confidence that the Government can implement such a system! The Singapore Government is so clean and transparent, it won’t lie to Singaporeans, will it?
So if SIngaporeans are willing to accept a GST hike of 1.5%, we can get free public transport? That’s an awesome deal. As an undergraduate, I estimate that I spend less than $10k a year. 1.5% comes to just $150… for a year of transportation. Wow. I don’t even mind paying 3% more in GST!
On the other hand, if it is true that by increasing GST by 1.5% the Government can offer free public transport, then that means the transport operators must be OVERCHARGING to make obscene profits through offering a public service.
Maybe we should start a petition to collect 1 million signatures to raise the GST so we all can get free public transport?
Singaporeans should urge the Government to offer what it’s spokesperson (Minister Lim) had so confidently challenged us to accept – increase GST by 1.5%, and offer free public transport. If it cannot be done, then Minister Lim should be held accountable for making the unqualified statement.
Again, the Singapore Government always prides itself on being a credible government… so it should be responsible for the statements that it’s high-ranking officer made, right?
Let me guess what would be the probable outcomes:
1. Someone comes out to defend that statement, saying it was just an ‘example’ of how we should not expect fare subsidies or cuts without any cost to us. 1.5% GST hike for free public transport? Wishful thinking!
2. Singaporeans’ hoohaa over this matter would be ignored by the government till the matter dies a natural death – when most Singaporeans’ interests over it dies down due to the lack of response from the government.
No related posts.
[...] – mrbrown: So now our transport fares are not linked to oil prices – This lush garden within: Raise GST by 1.5 percent to provide free public transport please – The Singapore Enquirer: CHRONOLOGY OF FARE ADJUSTMENTS (1990-2008) – My sketchbook: Raymond Lim [...]
I hate to say this but this suggestion reeks of the typical mentality of a Singapore student – only can think inside the box
You mean you will forever only spend less than S$10k/year?
GST is a progressive tax – the more you spend, the more you pay…
The next time you buy a car, buy a house and even a LCD TV, tell me if you will feel the pinch of an extra 1.5%?
Ask your parents if they will thank you for the higher GST or not?
And what guarantee is there that they won’t abolish the scheme after a couple of years but keep GST at those lofty levels because they deem it too “inconvenient” to rejig all the cash registers etc etc
Singapore also has a very big base of migrant workers (including “foreign talent”)…do we also want to pay for their “free” transport as well?
I think that the challenge presented in the article is an interesting one – can the honorable Minister match action to his words and provide free transport for the whole of Singapore by raising the GST by 1.5%?
Why is the thought of free transportation so attractive that one might consider volunteering for an extra 1.5% tax on all spending?
Perhaps the cost of transportation for some Singaporeans are so high, that they look upon the 1.5% raise as a much lesser evil compared to the cost of transportation, which have been increasing in both good times and bad, whether the oil price goes up or whether the oil prices go down.
Or maybe the times are so bad, that most Singaporeans might find that the money they have for spending has shrunk so much that a 1.5% tax on the remainder is a lesser amount that the cost of our transportation.
xtrocious –> well, not sure if you’re a singaporean student yourself or an ex-student singaporean… but, you don’t seem to get the whole idea of it do you?
your response reeks of the typical mentality of a high income earner. You must be earning a darn good income if you think 1.5% is a lot of tax to pay for free transportation.
The issue here is about ministers making statements like this that are poorly substantiated in attempts to brush off Singaporeans’ concerns about high costs of public transport in bad times (especially when fare hikes had been substantiated by oil price hikes and now the Thai govt is also reducing bus fares as a result of lower oil prices).
1.5%… well, as a student surviving on well less than 10k a year, 1.5% is just $150. Perhaps when I graduate I can afford a lifestyle of 20k a month (that’s high considering a fresh grad’s salary). Then 1.5% will be $300. That’s still a good deal at $25 a month for transport.
Considering many people easily spend $60 – $100 a month on transport, this comes up to $720 – $1200 a year. One has to spend $48k – $80k a year to make that not worthwhile. FYI, the majority of Singaporeans don’t earn that much.
“The next time you buy a car, buy a house and even a LCD TV, tell me if you will feel the pinch of an extra 1.5%?”
Then again, for somebody who can afford to spend on these, what is 1.5% more to them?
“Ask your parents if they will thank you for the higher GST or not?”
I think my retiree mom (my dad passed away already thank you) would thank me if my suggestion of increasing GST for free transport gets implemented. Sorry to disappoint you. Lol. In fact, anybody who spend less than $50k a year would probably be glad.
“And what guarantee is there that they won’t abolish the scheme after a couple of years but keep GST at those lofty levels because they deem it too “inconvenient” to rejig all the cash registers etc etc”
I guarantee GST wont come down or pigs will fly. Actually, GST at 8.5% is not really lofty level. You should see the taxes that people elsewhere pay. What’s more important is that the tax level is justified. For e.g. in Canada we know that tax is really high but so are their welfare amd healthcare schemes. And for the scheme to be abolished, there must be a good reason. Otherwise Singaporeans would eventually vote the ruling party out since they are not trustworthy.
“Singapore also has a very big base of migrant workers (including “foreign talent”)…do we also want to pay for their “free” transport as well?”
As for implementation. Well, your response really reeks of one-sided argument. Heard of something called ‘bus pass with photo ID?’ In fact, we should make non-Singaporeans pay more to cross-subsidize Singaporeans, just like in our education system (Although they only really pay slightly more).
AC –> do you take public transport yourself?
For e.g.: for a person who lives in Jurong and works as a sales executive in Orchard Rd shop, bus + MRT fare each way is about $2 one-way after “rebates”. Both ways would be $4. 26 working days a month (6 day work week) = $104 a month.
Salary = $1000 a month. At savings rate of 10% (how to save 10% a month on a salary of $1000?), $900 a month expenditure. 1.5% of that = $13.50. Wow. Pay 1.5% more GST, Save $90 on transport. Good deal, no?
Seriously I doubt this statement will become valid. It’s just another example of words spiting of frustration, just to brush off the public’s feedback on rising transportation cost.
That being said, it still a double-edge sword, what will happen to the car owners? Should they be getting discounted road tax?
If public transport turns free, trains will run rampant with banglas & chinarians, no doubt about that. Trains are crowded enough already. The results will be disastrous if it were to be made free. On the other hand, rather than offering free transport (which is highly unlikely anyway), why not do away with GST? Everyone wins.
this 1.5% gst for free transportation is a worthwhile idea to push for. no free transport for non citizens is a must. for pr, maybe a lower rate.
the whole concept has many benefits. citizenship has its privileges. the rich can afford to pay a bit more in gst or they are encouraged to take public transport to cut down on traffic congestion. isn’t that what the govt was trying to encourage all this while?
free transportation will improve social life for all as well as for businesses. people can start to visit each other or see the beautiful country that we have instead of trying to save on transportation or cannot afford to travel.
i praise raymond lim for his bold suggestion. lets petition for it.
I think the writer is calling
Raymond lim’s bluff. If he can throw a challenge, then we should
accept it and see whether he or the
govt will eat their words
Sincerely, i do think tat 1.5% for free transport is actually Valid. The writers arguement do stand. For low income pple, this will actually prove to be much better in a lot of sense. (Since low income likely won’t spend too much)
But, could we just stop and think for a moment, tat while everyone is debating about this, wat other information is slipping by?
Budget Surplus of GST 2% Increase?
Standards of Free Public Transport?
1.5% only 1.2B?
Look beyond the surface pls.
Once again, to the writer. I do agree tat 1.5% GST is less than Transport Cost per mth for most pple.
how do you plan to implement such a system? GST is the only tax I can think of that foreigners (workers, students, etc not stopover tourists) pay. So by extension, the free transport *must* be offered to them, right? So now you need to implement some discriminatory system to tell taxpayers and non-taxpayers apart. I don’t want, nor need to bring my bloody IRAS forms along when taking the bus. Then you have people who don’t take public transport at all. As some commenter above pointed out: does that then mean that the extra 1.5% entitles them to a discount on their road tax?
“That’s an awesome deal. As an undergraduate, I estimate that I spend less than $10k a year. 1.5% comes to just $150… for a year of transportation. Wow. I don’t even mind paying 3% more in GST!” Typical shortsighted thinking. Businesses, too, pay GST. The monthly GST overhead for large entities is easily far larger than your measly annual expenditure of 10k. What benefits, then, do they get out of it? This also reduces our overall viability in an already competitive business climate.
Also, perhaps this answers your question as to how 1.5% seems to be enough to cover free public transportation.
In brief, in case you still don’t understand: Not everyone spends 10K a year.
Just in case pple misunderstand. I do not mind taxing rich pple to pay for the poor. So tax the business. Then MNCs will all run away. Bring their companies to set up in India, China, etc. Tax the rich pple. Then there won’t be ferraris or maseratis or watever flashy cars in SG to bang pple liao. Never noe when it will be me lying on the road lo. Then SG will fall.
Truthfully, i really really do not mind tat at all.
I’m not joking. lol
“I think the writer is calling Raymond lim’s bluff. If he can throw a challenge, then we should accept it and see whether he or the govt will eat their words”
leo guessed correctly what my intent was – the point is about the statements that public officers make – if a minister makes such a statement, he/she should be able to stand by it.
They have the responsibility to convey accurate and valid information to Singaporeans, and if they are just making unqualified illustrations, they should make it clear to avoid misunderstanding.
Mmmm… I typed that last comment before noticing you had posted an edit.
Ok, given that you aren’t actually calling for the implementation of this scheme, my point to you now would be that the statement may not be entirely untrue.
Not only individuals pay GST. Many corporate entities will end up bearing the burden of this perk. So as I see it, your argument that the minister is bullshitting only holds if *every* tax-paying entity spends < 10K like you.
The minister’s argument is that a 1.5% increase in GST would equate to $1.2b in revenue which equates to the amount of money it takes to run the public transport system in a year.
I am not sure what he meant by that. If it means just the operating costs, then a 1.5% GST hike would NOT subsidise free transport. Because the transport providers would need capital.
Look at this article about a similar system in a Belgium city, where people have to pay 21% tax on goods and services to enjoy free transport. As the writer points out, if it’s such a good idea, there will be far more than just 1 city with such a system: http://anonymousxwrites.blogspot.com/2008/12/free-public-transport-singapore-zal.html
According to this paper by Singstats:
http://www.singstat.gov.sg/pubn/papers/economy/op-b10.pdf
(Sorry couldn’t find anything more recent)
In 1995, total tourist shopping expenditure* was 3.047 *billion* (Page 1). That’s just tourist spending in the retail sector. Locals aren’t even in the picture yet. assuming half of them file for tax rebates on significant purchases, that’s about 1.5 billion in taxable spending.
1.5% of that gives you 22.5 million… pretty sizable if you ask me.
And again, this is by tourists. Half of them. In 1995.
to xtrocious:
xtrocious: “I hate to say this but this suggestion reeks of the typical mentality of a Singapore student – only can think inside the box”
At82: Pls back up your claim…
xtrocious: “You mean you will forever only spend less than S$10k/year?”
At82: You mean many S’porean can spend say, S$60k/yr?? Which means the increase in GST will work to be an extra S$900/yr or S$75/month? S$75 per month seem for free public transport seem like a great deal to me.
xtrocious: “GST is a progressive tax – the more you spend, the more you pay…
The next time you buy a car, buy a house and even a LCD TV, tell me if you will feel the pinch of an extra 1.5%?”
At82: Well, at least I know the $ will go to somewhere that will contribute to the society and not be used to buying some failing banks. So why not?
“Ask your parents if they will thank you for the higher GST or not?”
at82: What makes you think they won’t when they found out the they are effectively going to pay less than S$75/month for unlimited public transport?
“And what guarantee is there that they won’t abolish the scheme after a couple of years but keep GST at those lofty levels because they deem it too “inconvenient” to rejig all the cash registers etc etc”
at82: And what makes you think that they won’t just do it anyway even there is no free public transport?
“Singapore also has a very big base of migrant workers (including “foreign talent”)…do we also want to pay for their “free” transport as well?”
at82: Why can’t the govt just issue concession card for unlimited rides only to pink ic holders…? It can be made as a card with Photo id and IC no. and even thumbprint if deemed necessary… I wonder who is not thinking out of the box….
I was also very surprised when I read the minister’s statements – I would gladly pay an additional 1.5% for free public transport. It would be good because the needy will pay less for public transport. I think that public transport is more of a necessity than a luxury, most of the time walking is not an option. There would also be cost savings in terms of fare collection systems. I don’t get why many people are saying that tourists/foreign workers should have to pay for the public transport – surely they pay GST here too? And the free transport would encourage tourists to visit. How much public transport would they use anyway? If the cost is an issue, we can simply the number of rides, say to 5 per person a day.
It may seem like a good idea, but don’t think it’ll work out well. Firstly, it’ll be unfair to everyone who doesn’t take public transport (people who drive, for example).
Secondly, because of the first point, many people who previously drive, will now take public transport, so buses/MRT will become much more crowded than before.
Thirdly, since the profits of the bus/MRT companies are now guaranteed, they may not do anything to solve the second problem, worsening it.
That said, with the current level of GST, or probably 10% GST which I predict will be the case in a couple of years time (maybe after the next general election?), we still won’t get public transport.
Wow, people didn’t get the point of your article even after your elaborated with a disclaimer/preface. Now, you will have to add a foreword I think, hahaha.
I believe many readers are clouded by emotion and hence miss the essence of your article. Nevertheless, there will be many others who do ‘get it’ too, so don’t be discouraged, cheers!
Raising GST has far more implications than to your own pocket. An increase in GST means that it would cost more for an MNC to produce goods in Singapore. 1.5% increase to the cost of producing a product is quite substantial, considering that in manufacturing, even a $0.01 increase in the price of a part can affect the bottom line by quite a lot.
What does this mean? MNCs will either need to eat the cost or pass the cost down to consumers. Or they can simply move their business across the causeway or even to China. Many MNCs in Singapore are at the brink of moving their business out of Singapore already. This could be the final straw for them to pull the trigger and make that move.
For some reason, I think this is just “talk”, and nothing will happen. It is just to complex to make it happen financially and logistically. Think about it. The transport companies are already privatized. How would the government decide how to reimburse these private entities? How would free transport work? Will ticketing go away? If that goes away, how do the transport companies collect statistics and figure out transport frequencies, peak periods, where people are going to, etc? Without statistics, you can’t optimize the system. I don’t know how the system works in the other country. I guess you really need to think out of the box to make it work.
I guess most of our sore points with the government is that they keep boasting about this surplus money we have in billions, but instead of “giving the money back to the people”, we end up paying for projects and they end up keeping the profits and continue to boast about more surplus. I think we already have enough surplus for free transportation. Why is there a need to raise GST by another 1.5%? They just need to find a way to cut costs (eg, exorbitant pay).
This is a good topic to debate on.