Our general principle is to preserve and grow our assets.

Selling land converts land (physical assets) into land sale proceeds (financial assets).

If we simply spend the proceeds, we are eating into our wealth.

Instead, we preserve and grow the assets by investing land sale proceeds as part of our reserves and earn income on it.

• This income is part of NIRC.
  
  

We spend 50% of the income and keep the remaining 50% for future generations.

Hence, land sale proceeds are indirectly flowed back through NIRC.

In short, we make our land work for us by generating annual income.

Government will continue to absorb GST on publicly subsidised education and healthcare.

For healthcare, absorbing GST helps lower- to middle-income Singaporeans who are subsidised patients at public health institutions.

Link to image for an example on subsidy to defray GST expenses on a polyclinic receipt.

We will keep the cost of living affordable and manageable.

1. Enhance GST Voucher Scheme

Permanent GST Voucher scheme will be enhanced when the GST is increased. This will help lower-income Singaporeans and seniors.

Assistance is given in the form of:

• Cash for those with lower income.

• MediSave top-ups for most elderly aged 65 and above.

• U-Save for eligible HDB households to directly offset utilities expenses.
  
  

2. GST Offset Package

We will have a GST Offset package to help you adjust to the GST increase.

Lower- and middle-groups, and seniors will get more help.

Link DPM's speech on 10 Nov 2019.

3. Government will continue to absorb GST on publicly funded education and healthcare.

4. Continued targeted support.

Apart from the GST Offset package, we will continue to provide targeted support for different segments of Singaporeans.

Link to list of schemes .

Link to list of schemes (graph).

Government has thoroughly studied our spending trends and different ways to raise revenues to fund our plans.

Based on this, the Government has concluded that it needs to raise GST sometime in the period from 2021 to 2025.

It is prudent to raise taxes in good time, and not only when our resources become strained.

When deciding on the exact timing of the GST increase, we will carefully assess the state of the economy, trends in expenditure and revenues.

Just as the decision to raise GST was not made lightly, the Government will also exercise care in deciding when to do this.

• When we last raised GST in July 2007, most businesses did not raise prices beyond the GST increase.
  

• Committee Against GST Profiteering (CAP) was formed to look into complaints of profiteering.
  

• Similarly, when GST is raised to 9%, we expect business not to exploit this to raise prices.
  

• We will convene the Committee this time too, to make sure this does not happen.

As a responsible government:

• We think and plan ahead to ensure Singaporeans needs are met.

• We know healthcare and other social spending will increase with our ageing population.

• Should not wait until the last minute and surprise Singaporeans. Need to inform Singaporeans ahead of time.

• Better to be upfront and honest with our people now so they can prepare and make arrangements.

• It is the right and proper thing to do.

It is unsustainable to borrow to meet recurrent spending, like healthcare or other social spending.

• If we keep borrowing every year, this means debt for our children and grandchildren.
  

Borrowing is more suitable for financing major long-term infrastructure projects because:

• The completed projects will benefit current and future generations.

We already tax high-income earners and wealth.

For income, we increased the top marginal Personal Income Tax (PIT) rates for higher-income earners in Budget 2015, from 20% to 22%.

• For now, PIT rates are reasonable to keep us attractive, given the intense global competition for talent.

We will continue to review our rates regularly.

For property, we:

• Increased property tax rates for vacant or rented residential properties in Budget 2013.

• Increased top marginal Buyers Stamp Duty (BSD) rate for higher-value residential properties in Budget 2018.