I REFER to media reports that there will be no government fee increases for one year after the proposed Goods and Services Tax (GST) hike kicks in.
This promise was made by the second finance minister.
The government will also continue to absorb the GST for education and subsidised healthcare services.
What is the point of freezing government fees, when they can go up before or one year after the GST increase?
What is there to prevent government agencies from raising fees higher one year after, to account for not being able to raise them the previous year?
GST increases are permanent, whereas offset packages have been one-off, so is not the one year freeze now also a one-off?
Instead of freezing fees for one year, shouldn't fees be pegged to not just go up, but down also, depending on each government agency's revenue, costs and profits?
In this connection, I would like to suggest that every government agency be subject to independent scrutiny as to the basis and justification for increases.
The role of independent directors has been the subject of much media attention and debate recently, particularly in the context of protecting the interests of minority shareholders.
So, in a sense, similarly, shouldn't there be some 'independent directors' to look out for the interests of the poor when GST goes up?
In the past, although GST was absorbed for subsidised healthcare services, the fees for subsidised as well as non-subsidised healthcare services were raised.
So, the net effect is increased healthcare costs for Singaporeans.
Since May, almost all the increases have been non-government fees, such as electricity, taxi fares, electronic road pricing (ERP), higher food prices due to food centres upgrading, bus and MRT fares, university fees, postage, etc.
All these - as well as other goods and services - are expected to increase to pass on the GST increase to consumers, as has happened in the previous GST increases.
So, any one year freeze in government fees, may be dwarfed by increases by the private sector.
I think Singaporeans may want to know more detailed and concrete assurances of how the government plans to cushion the impact of the GST increase, on an on-going basis, rather than just one-off measures.
Leong Sze Hian
First Published in the Business Times Letters column - 05 Dec 2006
