http://www.sgpolitics.net/?p=573
The government has always claimed that abolishing GST for essential items such as food is unwise because it would benefit the wealthier households more as they spend more money on such items as compared to poorer households.
However, we should be looking in percentage rather than in absolute value terms.
Food, housing and utility bills make up a larger percentage of the household expenditure for poorer families. According to a Department of Statistics report, food expenditure, for example, currently makes up 30 per cent of the budget for a household in the bottom 20 per cent income bracket, but just 17 per cent for a family in the top 20 per cent income bracket (ST, “Poor worry about food”, 26 Aug).
Basic items are also costing more for poorer families than richer ones. Food prices rose 8.1 per cent in the first six months of the year for poor households, higher than the 7.5 per cent experienced by rich families. Similarly, housing costs, which include the electricity bill, for the poor jumped 11.6 per cent, against 9.9 per cent for the rich.
Overall, the consumer price index (CPI) for poor households rose an average of 7.4 per cent in the first six months of the year, above the national mean of 7.1 per cent and the 6.9 per cent faced by richer families.
The government has consistently turned a blind eye to the fact that the poor are hardest hit by inflation, even though their own Department of Statistics lays bare the plain facts for all to see.
One-off Budget handouts are insufficient to help the lower income, especially given that a significant amount goes into Post-Secondary Education Accounts (PSEA) for the children as well as Medisave Accounts, and are thus unavailable for day-to-day use.
Rather, more comprehensive and sustainable plans should be put in place to help the poor and lower income, including putting Singaporeans first in job search, instituting a minimum wage, and abolishing GST for essential items.
The government has always claimed that abolishing GST for essential items such as food is unwise because it would benefit the wealthier households more as they spend more money on such items as compared to poorer households.
However, we should be looking in percentage rather than in absolute value terms.
Food, housing and utility bills make up a larger percentage of the household expenditure for poorer families. According to a Department of Statistics report, food expenditure, for example, currently makes up 30 per cent of the budget for a household in the bottom 20 per cent income bracket, but just 17 per cent for a family in the top 20 per cent income bracket (ST, “Poor worry about food”, 26 Aug).
Basic items are also costing more for poorer families than richer ones. Food prices rose 8.1 per cent in the first six months of the year for poor households, higher than the 7.5 per cent experienced by rich families. Similarly, housing costs, which include the electricity bill, for the poor jumped 11.6 per cent, against 9.9 per cent for the rich.
Overall, the consumer price index (CPI) for poor households rose an average of 7.4 per cent in the first six months of the year, above the national mean of 7.1 per cent and the 6.9 per cent faced by richer families.
The government has consistently turned a blind eye to the fact that the poor are hardest hit by inflation, even though their own Department of Statistics lays bare the plain facts for all to see.
One-off Budget handouts are insufficient to help the lower income, especially given that a significant amount goes into Post-Secondary Education Accounts (PSEA) for the children as well as Medisave Accounts, and are thus unavailable for day-to-day use.
Rather, more comprehensive and sustainable plans should be put in place to help the poor and lower income, including putting Singaporeans first in job search, instituting a minimum wage, and abolishing GST for essential items.
:p 
