Yahoo! Answer: Are the GST credits enough to help you cope with the GST increase?

[RoRK]

With respect to everyone getting a better education, while sounding like a panacea for all economic troubles, it actually won't solve the problem of how to assist lower-wage earners.

I provide you with an analogy -
You have an empty bottle - this is your infrastructure; your economy

Bro emp... that was what you should have looked into - all 4 lines and not just the last two, above.

I was referring to peeps thinking that education will solve any society's socio-economic problems.

Sky jiuce was used to represent an entire population that is made up of all less educated and champange to symbolize an entire population that is made up of all highly educated.

Using only one of the above liquids, whatever you pour into the economy, the bottle, there will be a number, large or small, that will fall into the bottom of the economy.

My point is that even with a society/country with equally educated people, highly educated or less educated, there will be a group that will fall towards the bottom of the bottle.

And I went on to a wee bit about those that will not get into the bottle or those that somwhow fall out of the bottle due to natural human hardships such as deaths, injury, disability and also a wee bit when mother nature somehow manages to poke, make a hole into the bottle - to the detriment of almost everyone - RoRK was talking about natural disasters.

And the repercussions from inflation can and should be looked at in a manner similar to natural disasters

Hope things are now clearer.

Bestest!
RoRK

 

[THOA]

I must say that the discussions in this thread has turned to be very insightful and fulfilling. Hope it doesn't degrade to nonsense.

Anyway...

there are singaporeans who dial in and donate, but a majority of them needs to watch a charity show and oftentimes its not on their initiative. its not creating a relationship of dependency, but developing ppl to give back.

Agreed. On the hindsight, it goes to show how powerful the media can be in bringing out the best in Singaporeans. But does the best of us only happen when the media comes into play? I think a long term approach to having a society of awareness and empathy is more effective, but how is that gonna be done? We are more and more becoming into individuals rather than a mass. We only experience the hardship of another via electronic media and means. Alarmingly, the real world has been condensed into a flat screen.

It becomes more alarming when the people who are suppose to represent the people gather the same sense of the real Singapore through the same flat screen, instead of really knowing what an elderly cleaner, a disabled or even a Bangladeshi construction worker experience every single day.

The elderly cleaner works to live a normal last few years of his life, but the inflation is making things hard for him to have the proper medical care and basic living necessities. The disabled witnessed the price of taxi fares skyrocketing, but having little alternative for transportation, he takes the taxi anyway. The Bangladeshi worker, already facing discrimination and thankless hard labour, now finds himself having a harder time to eat a proper meal, when already a huge bulk of his meagre income has been sent to his family back home.

This scenarios, they are not mere fabricated characters. They reflect very real people, right here in Singapore. Are they even getting the GST offset?

Perhaps any further offer of ideas on how to improve the situation might help, especially to the group that would need all the help they can get.

 

[soft]

There are many avenue to get help. The problem is, most who need the help do not know where to go.

Some time back, I was involved in community work, what we try to do is to find residents who need help and matchmake them to appropriate agency who can help them.

 

[rottenramone]

OK, let me clarify that my previous post was answering to SOFT's post and refers to our social compact and developing a more philanthropic spirit. This thread should be more about GST credits.

But to the ppl who says the govt isn't helping them enough by giving money, i say you could vote otherwise in the next election. The Workers' Party gives a sensible alternative viewpoint in their "New Poor" article, but I also hope to see an action plan as well.

http://www.wp.org.sg/news/hammer_online/01_new_poor.htm

 

[shinobi]

there seems to be a hideous premise that our government is extremely benevolent and compassionate, and they help the poor and needy out of sympathy.

i can ASSURE you, do not test the mercy of the government.

the only reason why the government would want to help those at the bottom of the barrel is due to the social ills of POVERTY.

this is because there is a correlation between poverty and things like crime, support for opposition parties, increased social burden etc.

so with that in mind, i believe we are discussing GST credits and GST increase. that is government policy. so it baffles me to find people discussing things like charity, because charity has nothing to do with government policy. charity is conducted on the basis of volunteerism or pro bono publico. charity is not a topic that appears in parliament because it does not make sense for parliament to impose it on the people. i believe when we say "the government donating" we are actually referring to the individuals, or members of parliament, and not the entity. because the entity is actually a representative of us, the people.

and now going back to the topic, the GST credits were never meant to help cope with the GST increase. the government will NEVER give out monies meant for our well-being in a form of a lump-sum. CPF is a fine example. and if they sincerely wanted to compensate us per se, what's the point of raising the GST in the first place?

 

[RoRK]

Wah! Why so fast gotch forget that LHL said that the GST increment (5% to 7%) was to help the poor and the elderly? Gotch GST credits to offset GST mah. If not enough then ask for more. Oso must ask where the programmes to help the poor and elderly.

Every society gotch poor and elderly regardless of what society and the economy does. You educate all oso the result will have poor and elderly. You educate many, oso will have poor and elderly. All gotch no education, oso the result will be some poor and elderly.

So how lidat?

 

[hifi_killer]

Are we exaggerating the effects of the gst hike with the stories of the struggles of the less affluent? As far as know, the 2% increase in GST did NOT (or rather ,significantly) affect the prices of daily necessities, inflation was due to other factors and was set to take place with our without the GST hike. The GST hike was meant to hurt upper income groups more than the lower income groups because of the higher propensity to spend. So, it will tend to have a redistributive effect on income.

GST credits, from a consumer point of view, will never be enough. We can either wait for more money to drop from the sky or learn to deal with it.These GST credits, enough or not, to me its just a political tool.

And the thing about elderly dependents isnt it the responsibility of their children to take care of them?

 

[THOA]

I thought this thread is dead...

Are we exaggerating? Perhaps. But in the first place, the last thing they NEED is a GST hike, with or without inflation. As I mentioned, 7% of a pre-inflated price is different from 7% of an inflated price. The question is, are those increments being given out based on the pre-inflation trends or after?

The GST hike was meant to hurt upper income groups more than the lower income groups because of the higher propensity to spend... or so may be the intention. But it can backlash: for the majority of time, you are paying more for a better education, life and opportunities. If you can afford it, why not? Because you know, in the end you get ahead faster, higher and better, than those who just had the basics of education, life and opportunities.

So, in the end, those who struggle with just the basics get left further behind. It has become a vicious cycle: those who can afford will be able to afford more, those who can't get left behind.

There are those who whine about it, saying the GST increments is not enough to off set the expenditures, cos 4 of their children got piano lesson, newborn need a certain kind of baby formula etc. Heck, who doesn't want free money, although in the end all that "hong bao" as the governing powers like to term it, ends up going back to the government, and THEN some. Some people could afford to live with that.

Unfortunately, the ones who couldn't, can barely afford a personal computer, much less surf the internet, to voice these concerns of theirs. Not that they have no choices at all; they have their channels to voice through social and welfare organisations, grassroot commitees and even the occasional meet and greet sessions with the MPs. But socially and psychologically, they got categorised into the "low-income" group, which the only solution will be to give them free standard education, free standard medicals, and just enough money to spend on the basics. Again, I have to reiterate: the Basics.

They still need to pay tax via GST. Imagine that.

And now for something totally stupid: Post number 1000. Woot! Heh.

 

[ac]

btw mendaki contributions and other contribs that are automatically deducted from your paycheck are not compulsory.

Also i'm with shinobi.

The bit that really sucks. I mean it really makes my blood boil, are the increases in pay of the ministers. It's like they took a page out of robert kiyosaki and paid themselves first. Public office is not meant to operate that way.

The reality is, the gst credits are to offset the GST increases, not inflation. And the reason it is in the form of payouts rather than a withholding of increases, is that ultimately the govt realises that pricepoints are downwardly sticky, and they would rather it go up. The offsets are just to make it go down easier. Everyone will be happy for a short while, before getting shafted by another increase. It's also interesting to note that other countries, are also following our lead of allowing increases but using payoffs as well. It's always easier to rescind the payouts than to modify the rates downwards.

The govt is also geared towards a top down flowing of money policy. It's really entrenched, which is why you'll always find that the lower/mid income people always gets screwed.

james, remember how we all had a thread on inflation? Now do you see that there really is inflation and it affects everyone?

However, i'd like to point out how there's this really annoying trend of consumerism. Buy more gear, eat at a nice place, etc. For the younger folk that read soft, just remember that most of the people who do that, have their own income. You do not need to eat at pastamania everyday, dine at waraku, or get a H20 effects thingamajig, or a korg radias, or go to the swee lee sale thinking you can flip your purchases if you don't like it, or pay for an overseas mixing engineer because it'll get more street cred.

The more money you spend on stuff you don't need, the higher inflation is going to go. By the time you have to pay for yourself, you'll find things are a going to be a lot less rosier.

 

[shinobi]

it doesn't make sense for the GST increase to help the lower income group. remember that GST stands for GOODS AND SERVICES tax.

The GST hike was meant to hurt upper income groups more than the lower income groups because of the higher propensity to spend... or so may be the intention.

the lower income group has a higher propensity to consume. that's because they NEED to spend what little they earn and can't afford to save. so for illustration lets say that the lower income earners spend 90% of their income and save 10%

the higher income group has a lower propensity to consume. it's not as if i eat 10 bags of rice a day just because i am rich and can afford it. but exaggeration aside, higher income earners can afford to set aside more for savings. then lets say they spend 60% of their income and save 40%

the government taxes because they think that higher income earner should not be saving money. they believe that money should be spent so that the economy can grow (or inflate). because the government (is supposed to) spends all the money that it collects in taxes, be it immediately (govt spending) or in the future (investment).

it is clear that the poor are getting the shit deal. as it is prices are increasing. GST will be magnified as it will be a factor of prices. the government gives out a lump-sum subsidy to compensate the poor. what is the message here? the message is "if you can't afford it, lower your standard of living"

the government seems to have some grand masterplan as to why they are increasing taxes, delaying CPF payments, and increasing CPF minimum sum ($106,000)- methods of capital accumulation. my guess is that they predict that the local economy is going to come crashing down, and they need the money to rescue it, to be heroes

 

[shinobi]

btw mendaki contributions and other contribs that are automatically deducted from your paycheck are not compulsory.

on a side note, i am against these kinds of contributions because i don't believe that malays should be helping malays, chinese help chinese, indians help indians, singapore sports council help foreigners. i believe that singaporeans should help singaporeans. but zakat is a different matter

 

[RoRK]

on a side note, i am against these kinds of contributions because i don't believe that malays should be helping malays, chinese help chinese, indians help indians, singapore sports council help foreigners. i believe that singaporeans should help singaporeans. but zakat is a different matter

Who the heck is going to help RoRK!

 

[empihsrow]

the government seems to have some grand masterplan as to why they are increasing taxes, delaying CPF payments, and increasing CPF minimum sum ($106,000)- methods of capital accumulation. my guess is that they predict that the local economy is going to come crashing down, and they need the money to rescue it, to be heroes

I sense a conspiracy. Hmmm, the government never reveals the reason why they are doing it. What can we actually say? And to think that our CPF and taxes go into GIC.

I seriously think GST offsets are bullshit at the end of the day. Who the hell actually gains from them? I just think it's a move to make the government look more attractive and caring. I mean, give a thought about it. GST is part and parcel of our expensive lives and we face GST everyday.

How much can the offsets do or help?

To think about it, I feel pretty sad for the middle and low income group.

 

[THOA]

it doesn't make sense for the GST increase to help the lower income group. remember that GST stands for GOODS AND SERVICES tax.

The GST hike was meant to hurt upper income groups more than the lower income groups because of the higher propensity to spend... or so may be the intention.

I would like to clarify that I was actually quoting from Hifi:

The GST hike was meant to hurt upper income groups more than the lower income groups because of the higher propensity to spend. So, it will tend to have a redistributive effect on income.

I must say, though, that my true sentiments actually echoes more to Shinobi's.

 

[THOA]

Who the heck is going to help RoRK!

Softies should help Softies :mrgreen:

 

[hifi_killer]

the higher income groups DO have a greater propensity to consume than the lower income groups. However, they have a lower average and marginal propensity to consume.
GST affects the prices of different goods in varying degree, if you noticed, basic necessities are hardly affected, luxury good on the other hand have seen a substantial price hike.
SO it is still very much debatable that the higher income groups pay proportionately more gst.

Taxes have a deflationary effect on the economy, not inflation, what govt decides to do with the tax revenue on the other hand is a totally different matter. We are experiencing inflation, increasing taxes would serve curb the inflationary pressures for most cases, but NOT this because the inflation we are experiencing is largely due to external factors on the supply side, not a demand-led inflation.

now back to GST.
I believe the lower income group get more from the government than the amount of taxes they pay, inessence they are paying negative tax.
Medical schemes, education subsidies, financial assistance, the lower income groups stand to gain most of these, and where to the funds come from? tax.

the rationale for the gst hike,
"It will give us precious extra resources to implement social programmes like Workfare later on. Our aim is to help the lower income groups and the elderly, not to increase their burdens. When we implement the GST increase, it's not just the GST increase, it's the package which will fully offset the impact of the GST increase and begin to strengthen the social safety nets and tilt the balance in favour of the low income groups - we will not just raise the GST but we will have a comprehensive offset package,It is not just an offset package to deal with the GST. It is a whole set of measures which we are taking in order to tilt the playing field in favour of the lower income group, which is what we have to add and tally in the balance, and my purpose is to help the lower income group. For the middle income, it will be generally about ok; for the higher income, I think the higher income should end up paying more overall. It's part of being one society. I'm not going to tax 15% on income tax, I'm not going to tax 25% from GST the way the Scandanavians do, but I have to make the adjustments of 2% which I think is fair and I think Singaporeans will support", Mr LHL

Of course, knowing you guys ,there will be some of you who will question his genuine intentions.

 

[THOA]

You know, it's all good that you have every bit of faith that you do on the government. I personally respect that, as I am sure alot of people do as well.

But some of us choose to question because we do not want see one side of anything. We weigh things out with what we know, what we see as logical and what we believe in within ourselves. And from that we come up with our own conclusion.

Whether or not we are going to question the intention of our Minister Mentor, that is for us to conclude from what we see and understand. We are the people that the government is managing. And as such, we are exercising our power to speak our thoughts about the way they are managing. We have the power to vote: we give them that power to manage us, and we can also take that away.

Can you imagine if we were to hold our grieviances to ourselves? That will give the government the illusion that we are totally fine with the way things are. And when the election comes and suddenly the power shifts to someone else, and they are caught offguard, would they acknowledge the fairness of the result or cry foul simply because "the people didn't complain, so we thought everything is fine"?

Back to the topic, there are two ways to have that "precious extra resources to implement social programmes": get more money from the people, or have the country spend less. Right now, the method is leaning heavily on the former. We, the people, especially the ones who are in the low and low-mid income are finding it hard to cope with that. So how about looking into cutting the country's expenditure?

 

[empihsrow]

We are the people that the government is managing. And as such, we are exercising our power to speak our thoughts about the way they are managing. We have the power to vote: we give them that power to manage us, and we can also take that away.

We are not in the US. This will never happen in Singapore. Democracy is never the way to go here.

I agree with THOA. Seriously, the government should really look into cutting down the expenditures. I mean, look at the IR, the Flyer, the plans for a vibrant night city, etc. We don't even know how well they will turn out to be eventually!

Let's save money. When you spend less, the burden gets smaller.

Such a simple concept and the government can't understand.

 

[THOA]

We are not in the US. This will never happen in Singapore. Democracy is never the way to go here.

As the saying goes, "Never say never".

Also, people would argue that those expenditures are "investments", money spent to make more money, to make the country rich (but some of the people poor *cough*).

I will SUPPORT expenditures invested on R&D that can CUT COST eg alternative energy, sustainable local food resource, sustainable water, education beyond the standards, that even the poor can afford, say, piano lessons for example, medical etc. These are useful investments which really benefit the people. And if Singapore were to find something it can patent, and eventually sell to the other nations, it will help the economy of this country as well.

We are always trying to put ourselves in the global map. So far the method to attract people to come here, and there are still people who think we are part of China! So why not look into something can push Singapore out?

 

[empihsrow]

Geez, I'll be waiting for the day to come.

I have never totally believed in the credibility of those investments which our government have countlessly laid. Are they really providing us a reliable source of income? Or perhaps somewhere or somehow, things are getting twisted?

Mmmmhmmm, as far as it's concerned, researching for alternate energy sources will never be part of Singapore's long term plan. You have to notice that our government had merged seven islands together. They will DIE without petrol.

Is there even a need to market more of Singapore? I believe many people are kind of sick of hearing that Singapore is doing this and that. Cos I am. =/