So on Thursday, March 1, the Budget debates concluded and were passed with a ruling-party majority (the Workers' Party [WP] MPs present voted "No" because of the GST hike, explained in this story).
This would've been an otherwise non-event that takes place every year — because we have a budget, and by extension budget debate, every year — except that following an exchange between Aljunied GRC MP Sylvia Lim and Finance Minister Heng Swee Keat, Law and Home Affairs Minister K Shanmugam decided to enter the fray.
And when Shanmugam meets Lim in Parliament, you’re almost guaranteed fiery debate.
Here's what happened earlier
But before we get to this exciting debate segment, we should tell you what preceded it to set the context. Minister Heng had just finished his Budget round-up speech, and the Workers' Party Chairman rose to make a few follow-up points.
These, in summary, included these two key points:
1. Responding to Heng's criticism of the WP MP speeches in the Budget debate.
Low Thia Khiang, in his speech, said announcing the future GST hike is a distraction to this year's budget, which highlighted otherwise important things for our country's future. Heng interpreted this, together with other WP MP speeches that carried suggestions for other means of obtaining the required revenue, as distractions in themselves, labelling them as "dishonest and irresponsible".
Lim said Low's point is not that the government should conceal the decision to hike the GST until after the next election — or closer to the next election — but that Heng should have announced the impending hike separately from the Budget, since doing so now has made everyone focus on it in the Budget debate when it "isn't even a Budget measure".
2. Sharing her suspicion that the government was "stuck" with its pronouncement that it will not need to raise GST for the rest of this decade.
This is the point Lim made that would end up triggering Shanmugam to rise and challenge her. Lim noted that "the government itself is not definitive about when this (the GST hike) is going to happen", and then pointed out her view that "in the run-up to the Budget discussion", there were "test balloons" floated about the government's need to raise revenue.
The "balloons" she was referring to likely included PM Lee Hsien Loong's People's Action Party convention speech in mid-November last year, where he said
"For this current term of government, we have enough revenue, but our spending needs to grow so HSK was right when he said raising taxes is not a matter of whether but when."
What "in the run-up to the Budget discussion" may now come into question, though, considering that Heng did mention in his 2017 Budget speech that "we have to raise revenues through new taxes or raised tax rates", and as early as in 2013, PM Lee said at his National Day Rally:
"The risks are there. We have to realise this, we have to be prepared to pay for this, whether by raising taxes, whether by raising taxes or cutting back on other spending."
(You can hear them actually saying it in this nifty video we put together:)But we digress. Lim mentioned these "test balloons" and then continued, saying that the public remembered clearly that DPM Tharman said in his really memorable 2015 Bukit Panjang election rally that the government will not need to raise taxes in this term, and then questioned if there was a contradiction here, because of Heng's announcement of an impending hike now.
Here's what she went on to say:
"And I rather suspect myself that the government is stuck with that announcement — otherwise, you know, if that announcement had not been made, perhaps we would be debating a GST hike today."
She also said that in view of Heng saying the government has to look at "prevailing... economic conditions and also our needs at the time", similarly, WP's MPs will not be able to take a stand on whether or not to support the hike until more information is available (with regard to how it will be spent, how much is projected to be raised and such).
"And related to that I should clarify in case anybody misunderstands that it is our intention to support the budget when the vote is called, but this should not be mistaken as a support for this announcement of some possible GST hike in a later budget. Should not be mistaken as such."
So to this point Lim made, Heng responded to state that he still thinks it is distracting for the WP MPs to question the timing of the government's announcement of the impending GST hike — in particular, Low's suggestion that it may have been better to mention it at a time closer to the next election, where it can be debated in rallies — asking the question of where better for this issue to be constructively debated than in Parliament, and in the Budget debates?
"Do you want to be constructive and say in any election we talk about serious things about how we are going to protect Singapore, how are we going to position Singapore for the future, how we are going to create a better life for all Singaporeans, rather than to seize on issues that will make people unhappy and say oh dear the government is going to tax you and all that, and therefore, you know, this is a bad move."
Enter Minister Shanmugam
This would've ended without much incident as a civil, if pointed, exchange between Lim and Heng. But, as we mentioned, Minister Shanmugam raised his hand, and Speaker of Parliament Tan Chuan-Jin called on him to speak.
Here's the transcript of the exchange in full:
K Shanmugam (KS): Can I seek a clarification from Ms Lim. She said there was a trial balloon -- PM spoke last year and because of the public reaction, the government backed down but was stuck with this announcement and therefore this announcement has been made of a future GST increase. But can I invite her to agree that that's a thoroughly hypocritical and dishonest statement? And typical of the statements she makes in this House?
Let me explain. Would Ms Lim agree that Prime Minister first talked about a tax increase during the National Day Rally? I think it was in 2013. And that the Finance Minister talked about the tax increase in the budget last year, a year ago? And the Prime Minister when he spoke about the likelihood of a tax increase late last year referenced to the Finance Minister's statement earlier in the year. Does she not know all these facts? And if one with some common sense puts those facts together with another set of facts — which is that Deputy Prime Minister Tharman and the Prime Minister had said that the government has enough funds for this term — you put those two sets of government positions together, is it not absolutely clear that
a) we don't need money for this term, and
b) we will need to raise taxes for the future?
Given that, the positions have been consistent, and Ms Lim will also know that for example when we first talked about GST it was mentioned in 1986 but came into force much later. I believe in 2004. 94, I'm sorry. 1994.
So given those sets of facts, would Ms Lim be prepared to withdraw the very serious allegation she makes that the government announces something late last year, trial balloon, public react, we quickly back down but we are stuck, basically make the accusation that the government is behaving willy-nilly, dishonestly? And if she will not withdraw those baseless suggestions, will she set out what the facts are for making the suggestion, whether she still stands by the suggestion and repeats it? Thank you sir.
Sylvia Lim (SL): Thank you Mr Speaker. I'd like to thank the Law Minister for his questions, and I can understand why he wants to accuse me of various things because he probably was not happy about past debates where I had disagreed with some of his legislative changes, and you know in typical fashion he always accuses me of dishonesty when as far as I'm concerned I acted honestly. Well sir, the basis for my statement was that it is my belief that the announcements by the government earlier on that they had enough revenues for this term of government had now tied their hands as to when the GST increase can kick in.
And of course one can look at the principles that our government uses for budgeting, which are typically very conservative, and we've heard the Finance Minister also talk about the fact that we must be prepared for all contingencies, so if those announcements had not been made, we may be facing a GST increase in this budget statement.
Now as to the chronology of events that the minister recited, I do not have them on hand, I have to go back and check to be fair to him, but this is my honest belief.
And then, this happened:
KS: Assuming the facts are as I had set them out, would you agree the suggestions are baseless and are you prepared to withdraw that this government behaved dishonestly?
SL: Sir, I never said that the government behaved dishonestly. I said that the government is stuck with the announcement that they have enough money for the decade.
KS: No, no no. The implication based on what you said is that a trial balloon was floated, with the obvious intention that a tax increase was going to be announced now, but because of the public reaction being so severe the government has backtracked and has changed its mind and has announced it as a future tax increase. Isn't that what you are saying?
And if that's not what you're saying, please say so clearly.
SL: Sir, I clearly said it was my suspicion. I clearly said that, you can check the Hansard...
KS: (Stands up) So we are..
SL: (continues) ...and it's my honest suspicion, so am I not entitled to have a view?
Speaker of Parliament Tan Chuan-Jin (TCJ): (cuts in) Uh, if members can wait till I call them. Minister Shan.
KS: So... we now have that confirmation that there was a suspicion. now does Ms Lim agree that it doesn't accord with the standards of a First World Parliament and honest debate for someone to come here and start talking about "This is my suspicion. I cannot back it up. It's contrary to all the facts. In fact I haven't checked the facts now that you recount the facts, I'll go back and check, but I have my suspicions." Would she agree that that is contrary to the standards of a first world parliament?
And secondly I'm not the only one to accuse Ms Lim of dishonesty. I think the phrase, a Latin phrase, will be ringing in her mind. "Suppreso veri, suggestio falsi" (translation: the suppression of truth is the same as suggesting a falsehood — i.e. if you don't tell the full truth, it's pretty much lying). Somebody very eminent, a high court judge, said that about Ms Lim. Thank you.
TCJ: Ms Lim. For sure we don't have translators for Latin.
SL: Speaker Sir, as far as I know there is such a thing as parliamentary privilege. And if I recall earlier debates, even PAP MPs were encouraged to come to the house to convey even rumours so that the government has the opportunity to refute them. this is the value of this chamber. And I do not agree with the minister that I am somehow not up to the standards and of course, you know, this is what we as MPs have to do to get clarity on matters of public interest. Of course the government can rebut our speeches robustly, that's fine, but I don't think I'm disentitled to come to parliament to advance honestly-held beliefs or suspicions.
TCJ: Within limits.
And at this juncture, Minister Heng asks to speak, and Speaker Tan calls on him to do so.
Finance Minister Heng Swee Keat: Now Mr Speaker, thank you. I want to thank my colleague Minister Shanmugam for reminding me that I have not answered this part of Ms Lim's question.
Now, Ms Lim says that you know, you are saying this on suspicion. And I believe Ms Lim is a lawyer, and also a police officer before. So... I too have been a police officer before, so we know that the first thing that when we have a suspicion is to go out and interview witnesses as part of our investigation.
Now I want to present myself as your witness. Because I have been working on this ever since I became Finance Minister, and I want to confirm that the statement made by Deputy Prime Minister Tharman that we have enough revenues till this term of government is correct. We have done all our projections and that is an accurate and truthful statement. In fact, if you were to look at circumstantial evidence, why did I not set a timeline for that? And I said it depends on the prevailing economic conditions, it depends on a number of factors that I will continue to carefully monitor, and that we must not get distracted with one-off events, one-off surpluses. I made that very clear in my statement. And if indeed we were so short won't it be the logical thing to say let's do it now and find some ways to do it? We did not. And I said that it is between 2021 and 2025.
So I think having told you that I've been working on this ever since I became Finance Minister to look at all our revenue projections and expenditure projections again, and discuss with the Prime Minister and Deputy Prime Ministers, that that statement is correct. It is an honest assessment of our position which remains accurate till today and that is why I did not have to do a GST increase now, in this budget. So it was not a case of floating any trial balloon.
And if you remember that I said it at the last Budget, that we have to look for revenue measures, I said it again at a constituency visit at Cairnhill-Moulmein a few months after that. And then the Prime Minister said it in November last year.
So on the basis of all the evidence that I am offering, will Ms Lim withdraw your comment?
SL: Sir I've listened to the Finance Minister's response. I still feel that there is nothing wrong with what I have said, but I have noted his answer.
So that's what happened. If you'd like to watch this playing out on video, you can do so here:
Top photo collage adapted via screenshots from Gov.sg YouTube video