“[The finance minister] Heng Swee Keat was right when he said raising taxes is not a matter of whether, but when,” Lee told the People’s Action Party convention.
Heng, during his budget speech earlier this year, said spending on health care and infrastructure would rise rapidly, and spoke of the need for new or higher taxes.
At the time, Heng said “we have to plan ahead, explain to Singaporeans what the money is needed for, and how the money we earn and we spend will benefit everyone, young and old”.
Lee was speaking as, for a third quarter, Singapore’s economy appeared to grow at a faster pace than expected by private-sector economists.
Economists told Channel NewsAsia that they expected estimated growth of 4.7 per cent to 5.1 per cent to be announced this week: above the advanced GDP figure of 4.6 per cent and the second quarter’s 2.9-per-cent increase.
The prime minister told the convention that spending on the economy, infrastructure and social security was a necessary vote of confidence in the Lion City’s future.
Lee, the world leader with the highest official pay of US$1.7 million a year, said citizens must “plant trees in order that our sons and daughters, and their sons and daughters, will be able to enjoy the shade”.
A rise in the goods and services tax is expected after it was last raised in 2007 by two percentage points to 7 per cent.
UOB economist Francis Tan said it was the second-largest generator of government revenue, after corporate and personal income tax.
Lee also referred to the disputed island of Pedra Branca to the east of Singapore.
“We thought the issue was permanently settled long ago because in 2008 the International Court of Justice made a ruling, final, that awarded Pedra Blanca to Singapore. But almost a decade later, the Malaysians have gone to the ICJ again and are asking the court to reinterpret and to revise the judgment,” Lee told the convention.
He also accused Indonesia of encroaching on Singaporean airspace.
Lee hailed the city-state’s good relations with Indonesia but said its “politicians have been talking about ‘taking back their airspace from Singapore’. Actually, this is not about Indonesia’s airspace.”
Prime Minister Lee Hsien Loong. Picture credit: Wikimedia