by greatknowledge on Thu Feb 28, 2008 9:28 am
SINGAPORE: Wrapping up a two-and-a-half day Budget debate on Wednesday, Finance Minister Tharman Shanmugaratnam said this year's Budget is one that has its sights set firmly on longer term growth and building social resilience, while giving out immediate short-term benefits.
He also announced that the one-year freeze on government fees, which kicked in last July, will be extended till the end of 2008.
This will include fees charged on all government-provided services such as school fees, ITE and polytechnic fees, charges in public car parks, and all licence fees.
However, regulatory charges such as those in the transport sector and the development charges in the property market will not be frozen because they must continue to serve the purpose of regulating demand.
The one-year freeze was implemented when the GST rate was raised from 5 to 7 percent last year.
Over the past few days, MPs have asked if the GST hike was too much, too soon, bearing in mind that in the end, the government had ended up with a S$6.4 billion surplus.
Stoutly defending the move, Mr Tharman said the hike did not contribute to the surplus and it was still needed not just for social expenditure, but also for infrastructural investments.
In fact, he said the S$1.4 billion collection from the additional 2 percentage points was equal to the GST offsets and Workfare Income Supplement paid out in FY 2007 alone.
He said: "The last thing we should do is to wait until there is an economic downturn, households are facing financial difficulties, and the government faces declining revenues before we raise the GST because then, we would be unable to provide a full offset to Singaporeans."
He added that there is also no guarantee that surpluses
