GE2025: GST hike was implemented with ‘great care’, opposition ignored facts to maximise votes, says PM Wong (2025)

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SINGAPORE - Great care was taken in implementing the goods and services tax (GST) hike so that Singaporeans who are less well off pay less than the 9 per cent rate, said Prime Minister Lawrence Wong.

He said on April 28 that the Government explained in Parliament “with data and the facts” why additional revenues were needed to take care of the rising number of seniors, and how support was enhanced in tandem to keep the system fair and progressive.

“The opposition had no counter to this in Parliament. But then when elections come, they conveniently choose to ignore all this,” he said at his first Fullerton rally as prime minister.

“Why? Because, politically, they know it’s to their advantage to make this an issue, to stir up unhappiness, just to maximise their votes.”

The permanent GST vouchers ensure that lower- and middle-income Singaporeans pay less than the headline GST rate, PM Wong noted.

“Who pays the full rate? Three groups: foreigners, tourists and higher-income families,” he said.

“The opposition wants these three groups to pay a lower rate. Would you? I wouldn’t.

“I think it’s fair and right for them to pay the full rate, but for lower- and middle-income Singaporeans, we protect you, we shield you... and that means you pay an effectively lower GST rate. That’s how our GST system works.”

The GST was raised from 7 per cent to 9 per cent over two years, in 2023 and 2024. The hike has been the focal point of criticism by many opposition parties in the campaign leading up to the May 3 polls, with the WP, PSP and Singapore Democratic Party calling for a rollback to 7 per cent or less to alleviate cost-of-living pressures.

PM Wong said the opposition wants to blame cost pressures on the Government, and on the GST, but that inflation was largely imported owing to overseas conflicts and global supply chain disruptions.

“We’ve dealt with this through sound monetary policies, and it’s working because inflation here has been coming down faster than in many other places.”

If the PAP government had taken the easy way out and delayed the GST increase, public finances would be weaker, said PM Wong, with insufficient resources to take care of Singapore’s seniors, and to support Singaporeans amid this economic storm.

He reiterated that the support package in the Budget is not a one-off, and that the Government will provide the help for as long as it is needed.

“Why is it that I can give you this assurance now? It’s only because we made the tough and responsible decisions earlier to ensure that we have sound public finances,” he said.

“And that’s why today we can confront the challenges ahead with confidence. We have the resources to support you, we have the resources to steer Singapore safely through this crisis.”

PM Wong also took aim at opposition parties’ proposals for a minimum wage, such as the PSP’s call for a universal minimum wage of $2,250.

The PAP also wants to uplift lower-wage workers, and the Workfare scheme and Progressive Wage Model are showing results, he said. But the opposition wants an across-the-board minimum wage by law, he noted.

He said that while it sounds good on paper, costs for companies will rise if it is implemented, and these can be recovered only by raising prices for what they sell to Singaporeans.

“How does this solve cost-of-living pressures?” he asked. “It will only make things worse.”

Companies may also cut back on hiring lower-wage workers, who would become more expensive, with the result being more unemployment among those who are least able to cope, he added.

“These are things the opposition will never acknowledge. Their manifestos may have many details – a long wish list. But are they feasible? Are they viable? Are they sustainable?” he asked.

“If something sounds too good to be true, it probably is too good to be true. There is no such thing as a free lunch.”

Despite the economic uncertainties, PM Wong said there are opportunities that Singapore can benefit from, such as through companies that are seeking to reconfigure their supply chains and looking for a trusted base to invest in Asia.

But this will require a major restructuring of the economy, which will have to be carefully managed. Experienced hands will be needed to steer Singapore through it, PM Wong said.

“The new jobs will be different from the ones that we have today, and so we will also invest significantly in Singaporeans – to help you reskill, upskill; to help you prepare yourselves well for these new opportunities,” he said.

He asked new graduates not to fear, as the Government will step up career counselling and job matching, and help them secure apprenticeships and traineeships.

Those already in the workforce will get a substantial injection of skills through the SkillsFuture system, which will continue to be improved so that it becomes easier to find suitable courses that can lead to better jobs.

And for Singaporeans who are retrenched, PM Wong said the Government will be there to help them bounce back.

He said the SkillsFuture Jobseeker Support scheme launched earlier in April is better than unemployment insurance as it providesnot just payouts, but also coaching and job training.

“If there are more retrenchments, there will be a safety net to help you and support you... We will continue to fine-tune it, improve it and make sure that every Singaporean is well taken care of,” he said.

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