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Budget 2022 stood out for its "decisive and bold moves" to tackle three deep-seated issues head-on, MP Liang Eng Hwa told Parliament on Monday (Feb 28), the first day of the debate on the 2022 Budget statement.

The three issues highlighted by the Bukit Panjang SMC MP include a widening income and wealth inequality gap, stagnation or very slow wage growth for lower-wage workers, as well as the climate change crisis and how to "manage the pace and tradeoff to pivot to a low or net-zero carbon society".

Liang also noted that the Budget statement speech had given the meaning of social compact – an "underpinning core value" of many government policies – a more "refreshed and tangible feel".

Steepened progressivity of tax structure

Liang touched on changes to Singapore's tax structure, which included an increase in wealth and property taxes.

He also talked about the staggered increase in GST, beginning from 2023.

Liang noted the "massive upsize" S$6.6 billion Assurance Package would be dispensed to "cushion the impact of the GST increase".

"The GST increase and the upsize assurance package put together actually further enhance the overall progressivity of our tax structure."

Liang says, "this is because the assurance package will have more than adequate payoffs and rebates to cover at least five years of additional GST expenses for the majority of Singaporean households, and about 10 years for the lower-income households."

He also said that "the higher income and the wealthier will pay more GST" due to the increase, as they "tend to be" bigger spenders and consumers.

To decarbonise Singapore

Regarding efforts to decarbonise Singapore, Liang said he applauded the "bold moves" by the government.

However, he says that there will be significant cost implications to businesses and households with the coming series of carbon taxes.

Liang said he welcomed the clarification by the Finance Minister that the "government does not expect to derive additional revenue from the carbon tax levy".

Liang ended by saying Singapore has to move forward with a clear mind and that he supported the budget:

"We need to have a clear mind how we intend to charge the way forward, but at the same time, we also need to have a clear mind how we can find the means to pay for these new ways. Budget 2022 strengthened the foundations of our long term funding plan, which is sustainable and fair, and opens up further exciting possibilities ahead for Singaporeans and Singapore."

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Top image via Gov.sg YouTube