Deputy Prime Minister and Finance Minister Lawrence Wong stated on February 28, 2024, that there will be no additional increases in the Goods and Services Tax (GST) until 2030. This announcement was made during a debate on the Budget in Parliament, where Wong emphasized that the recent two percentage point GST hike, raising the rate from 7% to 9% between January 2023 and January 2024, was designed to close the funding gap between government revenue and expenditure until 2030.

In response to a query from Progress Singapore Party Non-Constituency MP Hazel Poa regarding the potential need for further GST hikes, Wong reassured that the current adjustments were sufficient to maintain fiscal soundness up to 2030. The revenue generated from this GST increase is earmarked for Singapore’s medium-term needs, particularly in healthcare and social services.

Wong highlighted that government spending is projected to rise to 19% to 20% of gross domestic product (GDP) from 2026 to 2030, potentially surpassing 20% by FY 2030. He noted that the Ministry of Finance will continually update fiscal projections to ensure appropriate adjustments can be made as needed.

When addressing concerns about the inflationary impact of the GST increase, Workers’ Party MP Jamus Lim questioned the timing of the hike. Wong acknowledged that while the GST hike does contribute to a one-time increase in prices, it is not a persistent inflationary driver. He pointed out that the broader inflationary trends are global, affecting Singapore as well, but have since begun to stabilize.

Wong defended the government’s approach, stating that if the GST increase had been postponed, it would have created uncertainty regarding when would be an appropriate time to implement it. He underscored the need for prudent fiscal management to ensure a robust economic framework for future generations.

In discussing calls from opposition MPs to utilize past reserves for current spending, Wong warned that doing so would diminish future fiscal sustainability. He stressed the importance of maintaining a sound fiscal system, unlike many advanced economies facing rising debts and deficits.

Wong urged a commitment to fiscal prudence and cautioned against “fiscal fantasies” in policy discussions. He reiterated the People’s Action Party’s longstanding dedication to fiscal responsibility, emphasizing the need for forward-thinking governance.

In his closing remarks, Wong challenged opposition parties to present their fiscal philosophies to the electorate, suggesting that the upcoming elections could be a platform for discussing different approaches to the management of national reserves and fiscal policy.