It was a rather dull evening at work last night, mindless and quite an endless bore that was punctuated by the announcement by the prime minister that the Goods and Services Tax (GST) would increase from the current 5% to a future 7%.
When the GST was introduced in 1994, we made a ruckus about the prices of our purchases going up but largely accepted it because we knew that in order for the direct taxes to be kept low, the country had to draw revenue from the indirect taxes. Besides, 3% sounded like a teeny tiny amount and in the daily scheme of my then life (where probably nothing I bought went above $20), it would not have mattered much.
When it increased to 5% in 2004, the amount was still barely tolerable. The very clever monetary payments dished out to us sweetened the deal and most of us were able to move on without making much of a fuss.
But now that I am a fully-employed worker, the increase has gotten me hot and bothered.
From God knows when on, everything that I buy will cost 2% more. Factor in inflation that has been pegged at between 1 to 2%, and the fact that the company that I work in gave pay raises of 3% on average this year and you can see why this additional 2% is such a worrying figure on my financial health.
Besides, the boyfriend and I have placed our names in line for a spanking new pad which costs a huge bomb in comparison to the average new flats that are served up to the masses. If we become the lucky residents of that apartment which costs approximately $400,000 and has a first option fee of 5% in cash, based on my current pay scheme, the cost of purchasing and furnishing that flat would probably kill the both of us before we even get to live in it.
The PM said, “Our aim is to help the lower income groups and the elderly, not to increase their burdens…This package will be weighted more to the middle and the low income groups, especially the elderly, and it will more than offset the GST increase….for the middle income, it will be generally about ok.”
Why increase the only tax that the lower income groups have to pay if your aim is to help them? They would feel the pinch more, in the long run, the 2% would cost a higher proportion of their pay more than those who belong in the higher income bracket.
How about the middle income groups? Why would people like my family be okay? I have a retiree mother who depends on her daughters’ monthly contributions to survive. I earn precious little as compared to my peers. We have a flat of our own and possess computers, televisions and DVD players, things that make us “middle income”. Would the additional 2% be a financial drain? You bet, especially since the sista and I are planning to start our own families soon.
This just does not make any sense to me, even with the promise of a lucrative, helpful package. Here in Singapore, we see why the rich get richer and the poor get poorer. Maybe Popartgirl and I should, as discussed during our extremely agitated and annoyed MSN conversation last night, and move our asses down to China where things cost less, we can wear PJs out (hence save money on clothes) and roast the duck we rear in our backyard for food.