Ms Hazel Poa (Non-Constituency Member): Mr Chairman, I echo the call by the Workers’ Party to exempt basic essentials from GST.
To prevent the rich from also benefiting from such exemptions, we can set the price threshold. NTUC FairPrice house-brand rice sells for $1.40 per kilogram. We can, therefore, exempt rice that sells for, say, under $2 per kilogram from GST. This way, we prevent luxury goods from being included in the exemption.
The Finance Minister said that additional cost would be incurred for having multi-tiered GST. Can the Finance Minister let us know how much cost is involved here? If we believe that, in principle, basic necessities should be exempted to help the lower-income households, then, as Minister Vivian Balakrishnan said two days ago when talking about the Ukraine war, we must be prepared to pay the cost for what we believe in.
Also, what does the Finance Minister expect the GST rate to be in 2030? Can the Finance Minister also share with us how much the effective corporate tax rate would have to be raised by to generate the same revenue as a 2% hike in GST? The Finance Minister said earlier in his round-up speech that my example on land sales is simplistic because land sales will not stay stagnant every year. I wish to clarify that this is only an assumption made for the purpose of simplifying the illustration of the revenue stream. Varying land sales each year would result in a varying revenue stream but would, in no way, invalidate the model. I am sure the Finance Minister is able to extrapolate from that illustration what are the variations that would result from a varying land sale.
Singapore will not be pressured to sell more land in order to generate more revenue in bad times. This is because the revenue for each year is the accumulation of land sales over many years in the past and the latest year’s land sale would have a small impact on the revenue. For example, suppose Year 10 is a recessionary year and land sale is only $50 instead of $100, then revenue generated from the land sale in Year 10 is $2.50 instead of $5. However, revenue from previous years’ land sales remains unchanged so that the total revenue for the year is $47.5 instead of $50. A 50% drop in land sale proceeds results in only a 5% drop in revenue because it is cushioned by the land sales in earlier years. Conversely, any attempt to sell more land in any particular year would also have limited impact on the revenue for the year since it is spread out over many years. It is, therefore, a rather stable revenue stream.
Lastly, can I seek confirmation from the Finance Minister that under the current arrangement of HDB buying land from SLA, that the same piece of land acquired at low cost by the Government in the past will be sold repeatedly to HDB at the prevailing land price? By “repeatedly”, I mean when the lease ends. And does the same apply to JTC with respect to industrial land?