PAP Sitoh Yih Pin & WP Leon Perera & Jamus Lim argue intensely over GST hike & NIRC ratio

In his response, Sitoh reiterated several times that for a small country like Singapore, “saving is a virtue”.

Faris Alfiq | November 08, 2022, 03:43 PM

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The debate surrounding the amendment Bill to raise GST rate drew fierce assertions from both sides of the House on Nov. 7.

Members of Parliament (MP) from the ruling People’s Action Party (PAP) stood in support of the Bill while opposition members from the Workers’ Party (WP) and Progress Singapore Party (PSP) voiced their dissent over the matter.

Notably, an eight-minute fiery exchange between PAP MP, Sitoh Yih Pin, and WP MPs Leon Perera and Jamus Lim took place.

The intense exchange went back-and-forth from Sitoh to Perera twice, before involving Sitoh and Lim thrice, before returning to Sitoh and Leon again.

Sitoh vs Perera: No pain, no gain?

In reference to Sitoh’s speech which described WP’s proposal as “analgesic and anaesthetic”, Perera asked whether the support package is also an anaesthetic and if Sitoh believed that it is better to have pain (with the increase in GST), because “no pain, no gain”?

With much conviction, Sitoh replied that he does not see how the support packages “can be no pain”.

“The support packages are meant to help our fellow citizens get over this period,” Sitoh added.

Even as the Government is raising the GST during this inflationary climate, Sitoh clarified that GST is also a consumption tax as it is charged when one spends.

Perera stood and said that from his understanding of Sitoh’s answer, “measures to ameliorate the negative impact of GST on the population are, in a way, sort of kicking the can down the road or somehow dishonest because actually, the population should feel the pain”.

In that light, he added that the Government “allow the population to experience more pain”.

Claiming that Perera was “putting very serious words” into his mouth, Sitoh replied that what he was saying was that everyone is going through difficult times.

He added that he did not say the assistance packages are not helpful.

“In fact, they are very helpful and the Government is targeting it at the people who need it most,” Sitoh clarified, and reiterated that “I did not say we deserve to go through this pain”.

“But what I'm saying is that in these turbulent times of calamity, we have to bond together as a nation and we have to go through this together.”

Sitoh vs Lim: NIRC savings-to-spending ratio?

WP MP for Sengkang GRC Jamus Lim stood and said that he always thought that “academics were the only ones to conceive of unrealistic scenarios” but was “shocked” to hear Sitoh say that there is no such thing as "oversaving".

“If we take this argument to its own logical extreme, why don't we simply just lower our NIRC ceiling to 0 per cent and not tap the NIRC at all?” Lim questioned.

“Let me put it another way, if we think that there is no such thing as oversaving, is he saying that the Government of 2008, having tapped a lower percentage, actually undersaved?”

Lim then asked Sitoh to provide empirically verifiable evidence that they did so.

“If you were to play back the tape, I said for a small country like Singapore, don’t talk about oversaving,” Sitoh replied.

“I'm reminded of 1997 during the Asian financial crisis, remember? The countries around us, their currencies all collapsed,” he added.

Sitoh went on to assert that for a small country like Singapore, “saving is a virtue and we should continue to save”.

Lim pressed further that the Government back in 2008 seemed to have increased the NIRC from 10 per cent to about 50 per cent but it was not on record.

Sitoh then dismissed Lim as he said that the issue was not about the NIRC as he believes that the WP agrees with the system.

The issue is the savings-to-spending ratio of the NIRC, which currently stands at 50-50, Sitoh said.

“If using 50 per cent of the NIRC is not enough, there is a mechanism for the Government to tap the reserves with the President, so I think our system works perfectly well,” he added.

Sitoh vs Perera again: Is saving a virtue?

Perera stood again to clarify Sitoh’s position, that “there can be no such thing, in theory by definition, as oversaving for a small country like Singapore”.

“I don’t think we should grouse about oversaving,” Sitoh said in response to Perera.

“I was responding to Mr Jamus Lim’s speech. And I say it again. For a small country like Singapore, with a limited population with no natural resources, saving is a virtue,” he added.

Perera felt that his question, which he believed required a yes-no reply, has not been answered by Sitoh.

He repeated his answers that for a small country like Singapore, savings must be a virtue.

“As far as we can, we can continue to save not just for future generations, but for a rainy day,” he said, and pointing back to the question to Leon whether he believed saving is a virtue or we should stop saving.

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Top images screenshot from MCI/YouTube