“With an increase in labour supply brought by Workfare, the highly elastic supply curve means that the employers are unlikely to reduce wages of their workers but the additional employment created is likely to be small.” What kind of deviant
economic explanation rubbish is this? This is a shift in labor supply, mind you. And it has been the case of Singapore all along. Since there is no minimum labor wages, it can only drop.
A lot of labor resources overseas are unemployed or underemployed. To introduce them into a system like Singapore without a mean wage setting depresses wages. Fly by night economics is the thing in the Singapore Parliament. This is reminiscent of the days, when some economic professor could argue without blinking that HDB apartments were worth the higher prices as they accorded a better view, like into somebody’s house, which you could get a free peep show and report to the police of exhibitionism afterwards – what a win-win scenario. LOL.

With high-handed talk of government genorisity, should Singaporeans even be making $500 a month? That is less pay than working at Macdonald’s as a part-time staff 24*7,8 hours a day.
In Hong Kong, the overall average daily wage was HK$311 for the workers at craftsmen and operatives levels in the manufacturing sector. That is far higher than the peanuts paid in Singapore.

Singapore has yet to ratify the ILO’s 1958 (No.111)legislation against all forms of employment discrimination. Out of 180 member states, 140 have ratified in 2000.

If we look at the top 20 most expensive cities in the world, Singapore is one of the few countries with 1st world GDP per capita, claiming to be first world at the lower end while carrying the advanced developing economy status, without minimum social welfare protection.

The offical inflation rate is not reflective of the price inflation of daily products which Singaporeans purchase. Perhaps there is a chasm in definition of what constiutes necessities between million dollar MPs and the low income community of Singapore.

I see no point in the government engaging in a poor presentation of economic data. Our students in tertiary institutions do much better.

Also, what is the non-assigned expenditure of the poor which is shockingly higher than the wealthy in percentage expenditure?

1) The bulk of the GST increase goes into financing income tax cuts, though social spending has been held as the main reason since PM Lee sounded the increase in November.

2) If the labour supply curve for the lower-end workers is not highly elastic, why do we not see more of wage increases during the current boom years, rather than employment increases to foreigners?

The key is the government tweaks access to foreign labour according to the economy to keep labour cost low.

3) The GST exemption has to cover a significant portion of the poor’s expenditure so that it will minimise the erosion of the purchase power of the poor by further GST increases.

Another key is to distinguish between luxury and basic goods, eg cosmetic procedures vs basic health care.

The definition of ‘rich’ refers to the highest 20% household income group only, as commonly used in discussion on income distribution in Singapore.

While the statement that the GST was increased to fund social spending is somewhat questionable, your statement is questionable FOR THE EXACT SAME REASON.

“Singapore labour supply for the lower-end workers is highly elastic given the liberal foreign worker policy”

This is another bogus statement. The labour supply for lower-end workers is not highly elastic. Quotas are imposed by MOM. One of the complaints by employers is precisely about the quotas and restrictions.

“(Tharman) said that the GST collected by the Government on essentials comes mainly from the high-income group and foreigners”.

I think Tharman is right. If the poor is only 20% of the population then 80% comes from the rest.

Nobody was proposing exemption from “non-cooked food, fuel & utilities, public road transport, education & stationary, and health care”. Was anyone? People were proposing exemption essentials like rice and sugar. Exemption so many items will be very costly because you will lose substantial revenue from the rich folks. We do want to tax nose jobs BTW. :-)

You may wish to check on your facts. There are serious issues with this analysis. :-(

As long as Singapore’s GNP is more than GDP and that the foreign MNCs are bigger complenent, it makes more sense to increase the consumption tax and distribute it more to its citizens and not to have any exmptions.

What is forgotten within the arguments is that unlike other countries, such offsets are only for its citizens and not unlike others which is meant for all tax residents.
This is even more striking in Singapore considering the number of FDWs,EPs,WPs and FWs as well as the large tourism and MICE numbers which will be greater once the new IRs come in.

Regards