PUBLISHED ONFebruary 27, 2025 8:35 AMByBhavya RawatThe increase in Certificate of Entitlement (COE) prices and Goods and Services Tax (GST) reflect the financial pressures faced by Singaporeans, said Workers' Party (WP) chair Sylvia Lim on Thursday (Feb 27).
Speaking in Parliament on the second day of the Budget debate, Lim referred to the Ministry of Finance's budget forecasting for this year as "notably inaccurate".
The Government had projected a surplus of $0.78 billion for the Financial Year (FY) 2024 during the 2024 Budget statement. However, revised figures revealed an $8 billion increase in total operating revenue, rising from the estimated $108.6 billion to $116.6 billion.
"To put this into perspective: $8 billion equates to $8,000 million — a substantial underestimation," said Lim.
The WP chairwoman questioned why the projected surplus of $0.78 billion was reiterated by PM Wong while responding to a Parliamentary Question from WP MP Louis Chua in September last year.
She asked: "Was there an awareness at that point of the significant deviation from projections? If so, should an updated estimate have been provided? If not, why was this discrepancy not identified earlier?"
Lim also highlighted that while PM Wong attributed the unexpected revenue surge primarily to higher Corporate Income Tax (CIT) collections, they only account for less than $3 billion of the increase.
According to her, the remaining $5 billion-plus over-collections includes significant rises in Vehicle Quota Premiums or COEs by nearly $1.9 billion and GST by $1.2 billion.
Additional increased contributions came from statutory boards, stamp duties and personal income taxes, Lim added.
She explained that while external factors contribute to inflation, it is important to recognise that COE and GST are outcomes of domestic policies.
"Escalating costs of essential items, such as food, are particularly concerning," Lim continued, quoting PM Wong's Budget 2025 statement which spoke of Singaporeans having to "tighten their belts, rethink spending habits, or make difficult trade-offs" to cope with rising costs.
"Offering ad hoc vouchers and handouts in response to the cost of living may come across as missing the wood for the trees," she said.
Similar concerns were raised on the first day of the Budget debates by WP chief Pritam Singh, who stated that the various vouchers to be disbursed as part of Budget 2025 will help Singaporeans for a while — but not in the long term.
During her speech, Lim also said that current measures suggest that Singaporeans can only manage expenses with the aid of vouchers, subsidies, and grants.
She cited various support measures for utilities, housing as well as childcare and education as examples.
Referencing then-DPM Wong's 2023 Budget statement on how the "Singapore dream" is no longer to attain the "5Cs" (cash, car, credit card, condominium, and country club), but about fulfilment, meaning and purpose in life, Lim asked: "Could it be that the 5Cs simply hold no relevance today as they are no longer attainable to many?"
The WP chair also spoke about the challenges faced by certain groups, particularly homemakers whose financial security requires attention.
She highlighted the plight of vulnerable homemakers in divorce scenarios, proposing a policy change that will require their consent to exclude them from their spouse's CPF nominations.
"Such a measure would acknowledge CPF funds as shared assets within a marriage and ensure that both parties are aware of and agree to the distribution plans," she said.
Lim concluded by stating that she intends to raise this issue during the Committee of Supply debates for the Ministry of Manpower.
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