Budget: 587,200 lower-income workers worry about GST hike?

gst-voucher

How many lower-income workers may be worrying about the impending GST hike?

I refer to the article “Singapore Budget 2018: Lower-income groups worry about GST hike” ( Straits Times, Feb 20).

It states that “With the impending goods and services tax (GST) hike, Mr Tony Teng, 43, worries about his young family’s growing expenses.

The ambulance driver supports his one-year-old daughter, pregnant wife and elderly parents on a $1,800 monthly salary.

Lower-income families like Mr Teng’s are among groups who could be hit hardest when the GST goes up from 7 per cent to 9 per cent some time between 2021 and 2025.”

So, how many lower-income resident workers are there like Mr Teng who earns less than $1,800?

According to the Yearbook of Manpower Statistics 2017 – there were 587,200 employed residents with gross monthly income (including employee CPF contribution) less than $2,000.

After deducting the typical 20 per cent employee CPF contribution – does it mean that the take-home disposable income may be less than $1,600?

As to “Others, like cleaner Paul Thanabal, 64, question the logic of having to pay more for daily spending on necessities, to fund social policies that will take time to reach low-income households.

The sole breadwinner for his family of three earns $750 a month, and receives a monthly $120 Workfare supplement. His diabetes treatments are also fully subsidised by a government hospital.

“I know these policies cost money, but many of us are already living day-to-day. Every dollar that comes in is spent on necessities,” said Mr Thanabal, who lives in a two-room rental flat” – how many lower-income resident workers are there like Mr Paul Thanabal who earns less than $750?.

According to the Yearbook of Manpower Statistics 2017 – there were 157,500 employed residents with gross monthly income (including employee CPF contribution) less than $1,000.

After deducting the typical 20 per cent employee CPF contribution – does it mean that the take-home disposable income is less than $800?

“Academics and experts noted that the lower-income groups will feel the pinch more from a GST increase.”

Leong Sze Hian

About the Author

Leong
Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.