Raising GST not an 'easy choice' but govt had to act responsibly: PM Wong

The increase in Goods and Service Tax (GST) was not "an easy choice" for the Singapore government, but it had to "act responsibly", said Prime Minister and Minister for Finance Lawrence Wong.

As such, the government proceeded with the GST increase while rolling out the assurance package to "effectively delay" its impact for the "vast majority of Singaporeans", added PM Wong.

Over the years, the package was also further enhanced to "cushion the impact on cost of living", such as during PM Wong's 2025 Budget statement, when he launched the SG60 package, amongst others.

As part of the SG60 package, Singaporeans aged 21 and above will receive S$600 in vouchers each, while those aged 60 and above will receive S$800 in vouchers each.

These SG60 vouchers will be disbursed on top of the S$800 Community Development Council (CDC) vouchers that Singaporean households will receive in two tranches: S$500 in May 2025 and S$300 in January 2026.

Cost of living 'biggest concern' for many S'poreans

PM Wong was speaking in a video titled "Tackling Cost Pressures", in which he shared his reflections after wrapping up the Budget debate in Parliament on Feb. 28, 2025.

According to him, the government rolled out various support measures in this year's Budget because it understands that "the biggest concern" for many Singaporeans is the cost of living.

"Prices have gone up, and it is tough for many families. You feel it when you buy groceries, pay your bills, and manage your daily expenses," stated PM Wong.

PM Wong also responded to the claim that "GST increase had made things worse", saying:

"But let's be honest, the reality is that what we are facing goes far beyond the GST. Around the world, inflation had surged because of wars and supply chain disruptions.

No country has been spared. We feel the pressures here in Singapore, too, especially as a small and open economy. After all, we import almost everything we consume."

GST hike came after S'pore's battle with Covid-19 pandemic

In the video, PM Wong also highlighted Singapore's battle with the Covid-19 pandemic as one of the factors that contributed to the government's decision to increase the GST.

He recounted:

"It was a time of great uncertainty — we did not know how long the pandemic would last; how the virus would mutate; how many new waves of infection would hit us.

Our finances were stretched; we had gone to the President five times to use past reserves.

We weren't sure if we would have enough resources to recover from Covid-19, create jobs for our people, and look after our seniors. We didn't know how deep a fiscal hole we would end up with.

At the same time, we knew that healthcare spending was rising year after year, and would continue to increase because of our rapidly ageing population."

Hence, to garner resources for the country to bounce back from the pandemic, the government proceeded with increasing the GST "when the economy showed signs of stabilising", said PM Wong.

He offered a similar explanation during his closing speech on the Budget debate on Feb. 28, in which he stated his government "will never take risks with Singaporeans' lives and futures".

Government to 'keep doing what is necessary' to help Singaporeans tackle challenges ahead

Looking ahead, PM Wong said that the government will "keep doing what is necessary to help Singaporeans through these difficult times and for as long as it is needed".

"We will ensure we have the resources to tackle the challenges ahead. That includes taking better care of our seniors and gearing up for a bumpier ride in the coming years, as the world becomes more dangerous, turbulent, and unpredictable", he added.

According to PM Wong, the government made this commitment because "this is who we are as Singaporeans":

"We look out for one another, we overcome challenges together, and we do everything we can to keep our Singapore miracle going, generation after generation."

Top image via Prime Minister's Office