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Labour MPs on GST Bill: Invest in Our Workers in the Long Run to Protect Them Against Inflation

NTUC Assistant Secretary-General Desmond Choo and NTUC Director Yeo Wan Ling call for longer term measures to help Singaporeans cope with rising cost of living.
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By Ian Tan Hanhonn 07 Nov 2022
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NTUC Assistant Secretary-General Desmond Choo and NTUC U Women and Family Director Yeo Wan Ling supported the Government’s motion to progressively increase the goods and services tax (GST) but urged for more to be done to help Singaporeans battle inflation.

They voiced the concerns following the second reading of the GST (Amendment) Bill in Parliament by Deputy Prime Minister Lawrence Wong on 7 November 2022.

The Bill has since been passed.

“We cannot rely on special packages indefinitely; the lasting solution is we must keep wages growing ahead of inflation, sustainably,” said Mr Choo.

His sentiments were seconded by Ms Yeo, who said: “We can choose to look on and rue rising prices like sitting ducks or match the rising cost of living with increased productivity and fortified wages undergirded by the equitable and sustainable gains sharing.”

They also called for continued support by the Government to help improve business and worker productivity as a long-term solution to help protect Singaporeans against rising costs from inflation or increases to the GST.

GST (Amendment) Bill

Following the amendment, the GST will increase from 7 to 8 per cent in January 2023, and from 8 to 9 per cent in January 2024.

In his speech, Mr Wong explained that the GST system is a multi-tiered system, where lower-income households pay a much lower effective rate than higher-income households.

He added that the $8 billion Assurance Package by the Government will offset most additional GST expenses for most Singaporean households for at least another five years, and around 10 years for lower-income households.

Support packages aside, Mr Choo noted that only by driving workers’ productivity and improving their wages can Singapore truly protect its people from inflationary pressures.

He said: “We need to ensure that there is continued investment in companies and workers so that our economy is vibrant and productive.

“Only when businesses do well, can our workers enjoy sustainable wage gains.”

Training is Essential

To help businesses thrive and workers earn more, Mr Choo hopes that businesses will capitalise on technology to increase their productivity,  and the Government continues to invest in upgrading initiatives such as the SkillsFuture movement.

He urged businesses, particularly small- and medium-sized enterprises, to work with NTUC to set up Company Training Committees (CTCs). He added that CTCs can “foster and engender transformation at the firm level” and assist businesses to use innovation and technology move up the value chain.

“Workers can be more productive as a result,” he said.

Mr Choo added that it can be tempting to reduce training costs in these times, but this can be counterproductive in the long run.

“Training is essential to help our workers get those better jobs and better pay… These are longer-term investments in our workforce that will reap longer-term benefits,” he said.

Better Support for Small Companies and Freelancers

In view of the impending rise in GST, Ms Yeo expressed her concerns for small, non-GST registered businesses and freelancers.

She explained that while established corporations have elaborate pricing models to capture profits during volatile economic climates, many small businesses are unable to charge GST and claim GST costs.

Ms Yeo elaborated: “As their suppliers pass the increasing costs of goods down to these small business owners in light of the rising GST rates, small business owners can, at best, apologetically raise their prices, or at worst, absorb these costs out of their pockets to their personal detriment.

“This dilemma is one unique to small business owners in Singapore and need not be one we put them through if we pull the right policy levers.”

Touching on self-employed workers such as taxi drivers and private hire drivers, she raised concern about how the GST increase could affect their daily takings and livelihoods.

“Our drivers being price takers, and individually not earning enough to be GST registered,” she said.

She called for the Government to provide better support levers for these groups of workers and proposed an annual allowance for the purchase of goods necessary for daily operating costs.

NTUC Will Help Manage Cost of Living

While the increase in GST will inevitably bring up the cost of living in Singapore, both Mr Choo and Ms Yeo emphasised that the Labour Movement will do its part to help.

Ms Yeo said that the Labour Movement will help seniors and other Singaporeans to “stretch their dollar” through its social enterprises with measures such as grocery discounts at NTUC FairPrice stores, tailored policies from NTUC Income and affordable meal options at Kopitiam outlets.

Mr Choo added that NTUC FairPrice has just announced that it will be offering discounts on 500 essential items for the first six months of 2023 – even before the passing of the Bill.

He said that NTUC and its social enterprises will persist in their collective mission to moderate the cost of living.

“Our social enterprises face the same cost pressures as any other business, and we face the same cost increases in logistics, manpower and goods. But we will persist in our mission.”