Han Fook Kwang Softens the Ground for Unnecessary and Regressive Tax Increases

Han Fook Kwang (Photo: ST)

A couple of days ago the State Times published an article by Han Fook Kwang titled “Time to introduce a wealth tax in Singapore?“.  Han was formerly the Political Editor of the State Times so he probably has an ISD background specialising in propaganda. These days his title is Editor-At-Large, meaning that he is a roving apologist for the PAP, like Undereducated-Idiot-At-Large, Bilahari Kausikan, or Ambassador-At-Large Chan Heng Chee. He produced, along with Warren Fernandez and Sumiko Tan, LKY: The Man and His Ideas which should have been a very slim volume indeed but like Singapore’s fake GDP was puffed up to grandiosity.

In his article Han asks the rhetorical question, why does the Government need to raise taxes when its coffers should be running over, and answers it in the condescending way the PAP and their minions deal with this question.  They treat Singaporeans as children who do not need a good reason so they  say something like we need to save for a rainy day. As I have stated frequently this does not make sense. Here Han says that expenditures on healthcare and infrastructure are going up. Yet it was only a few years ago that Tharman, who was the Finance Minister then, set aside $8 billion for the Pioneer Generation Package even though the extra additional spending was only around $400 million p.a. Medishield is currently in massive surplus.

The Government is also lying when it says additional revenues are needed to finance infrastructure. Tax revenues are used to finance capital expenditure on projects which should then appear on the Government’s balance sheet of assets and liabilities which it is required to publish every year with the Budget statement. Instead the expenditures disappear into a black hole. A good case in point is Terminal 5 at Changi Airport which my old Cambridge classmate and second class degree holder Heng Swee Keat allocated $5 billion for in the last Budget. Current revenues help to fund the development of Changi Airport but the dividends paid by Changi Airport Group disappear, presumably into the reserves where they cannot be used.

The Government surplus is running at around $30 billion p.a. and the General Government, which includes statutory boards and agencies but  probably does not include our sovereign wealth funds unless they pay dividends to MOF, is several billion dollars greater. I say probably because the PAP Government, with its usual fondness for hiding facts from its citizens, does not define what entities are or are not included.

What makes this all the more ludicrous is that future generations will undoubtedly be far richer than the current generation and therefore there is absolutely no need to save as much. Tim Harford wrote an article in the FT recently (“Why I predict we will be wealthier in the future“) where he made the modest prediction that in a hundred years time we will be five times richer than we are today. He used as the basis for this prediction Keynes’ prediction in 1930 that in a century’s time we would be eight times richer, Economic Possibilities for Our Grandchildren. Not only that but new technologies will give us access to new goods and services that we can only dream of today.

Of course the PAP has never believed in the need to postpone instant gratification for its leaders who have always ensured they are paid many times what they would be able to earn in the private sector and that their wives and family members secure plum jobs in the bloated state sector. Ho Ching’s remuneration continues to be a state secret and anyone who leaks details of the hundreds of millions she has earned will face prosecution under the Official Secrets Act.

To distract attention from this milking of the state sector by the Familee and their cronies and to provide cover for utterly unnecessary and regressive tax increases the PAP has taken to mouthing Orwellian slogans about how they are promoting “inclusive growth”. Han in his role as PAP apologist talks about new taxes to address growing income inequality. This is rich when Singapore has no tax on foreign income, no capital gains taxes, no taxes on interest or dividends, no  capital gains tax and has a huge tax break for working mothers to encourage graduate, whom LKY assumed would mostly be Chinese, to have more children. A few years ago Tharman put up the top rate of income tax by a token 2% but it remains only about half the level in other developed countries including the US which also has state and local taxes. The real tax increase will be in regressive GST, to 9 or 10%, but a sop will be thrown to our socialist civil society activists in the form of a token plugging of one among the many loopholes our elites use to avoid their fair share of tax. Heng Swee Keat will then earn the kind of foolish accolades that used to be showered on Tharman as a true man of the people. Being of an acceptable skin colour, Heng will then become the next seat-warmer PM after Holy Goh while the ground is prepared for Li Hongyi to take over.

Han also deliberately misleads about the level of tax in relation to GDP to argue that Singaporeans are lightly taxed While level of tax revenue to GDP appears low at 13.9% in comparison to levels of 34% in OECD countries, including fees and other revenues raises this to nearly 16%. Given that the Singapore Government owns 79% of the land and the state sector generates up to 50% of GDP this figure of 16% grossly understates the Government’s control of economic resources. In addition, Singapore, like Ireland (which has a low tax to GDP ratio of about 23%), has a vastly inflated GDP driven by MNC tax avoidance strategies. This tax-avoidance driven economic activity is only routed through Singapore because it pays little or no tax. Once these factors are accounted for, Singapore’s true tax to private sector and normalised GDP is probably at least the OECD average.

So do not be surprised if the next Budget has a big hike in GST accompanied by a few token populist sops. You have only have yourselves to blame for allowing the PAP to treat you like children.

 

Kenneth Jeyaretnam

* The author blogs at https://kenjeyaretnam.com/.

 

 

 

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12 Responses to “Han Fook Kwang Softens the Ground for Unnecessary and Regressive Tax Increases”

  • patriot of Temesak:

    What else is NEW Ken, a second class degree will come up with 2nd from the arse like our IOC pretender trying to be President of IOC…

    The base of the Pyramid will always pay for all the Perks @ The Peak

    Not enough??? bring in the desperate but NOT 1st class FTs and FWs with a Levy of average $700 per month…that will fill the coffers lah!!!

    The People??? what People??? same way answered by The PrataPresident about the Singaporean culture? “What Culture???”

    Singapore is for ALL… those who Pay & Pay and for the Creeps & Parasites to Collect & Collect

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  • pap selected INDIAN president:

    actually pap MFs in the states times can write all the BS they want.

    we don’t care.

    once in a while if we chance upon a free copy we take a glance. otherwise we don’t miss any of their BS. out of sight out of mind. anyway with INTERNET we don’t need to entertain any of these pap MFs. we are just waiting for the states times to kaput just like NOL kaput.

    it has been many years. not entertaining pap MFs in the states times we have just lived fine. nothing is lost. nothing is missed.

    SO pap MFs can apologize for pap this way or that way. we just don’t care. since we know they are BS after all.

    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
    maybe if pap MFs write about how pap selected INDIAN as malay president and thus cheated citizens, perhaps, we may read. otherwise NOT.
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

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  • PAP is BEST:

    This one is good thing, means we have money pay them billions. Pay them billions make SG great again, talk to Donald Trump then got face.

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  • Neo:

    You will get the dafts and lesser mortals telling you that the parents knows what is best for children. So it is ok.

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  • HarderTruths:

    I am enjoying watching the 70% become willing slaves.

    “I laugh at your pain.”
    Mojo-Jojo

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  • LIONS:

    there are now many impoverished sgs,a huge number from former PME type.

    if the PAP LEE AH LONG N HIS TAX CUNTroller think the ONLWY WAY TO CONTINUE COLLECTING MORE $$$ is from the COMMON SGS,they are gonna fcuk more poor sgs to the poverty fringe.

    first,you rob common sgs’s jobs abd give them to fake FTs.
    then,the FTs send their money home n you want to make jobless sgs bear the ‘COST’ OF YOUR DAFT POLICY/POLICIES???

    LEE AH LONG,YOU STILL GRIN N THINK YOU ARE FIT FOR DUTY AS PM?

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  • Excellent KJ:

    KJ has a damn good understanding of the government reserving all the monies into the black hole reserve.

    If only the 70% can understand. They are all believing in the “true news” nonsense.

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  • we are in pain:

    While many may argue that without LKY undemocratic approach, SG may not make its way from third world to 1st.

    Yet, it is precisely this LKY approach, that SG has turned out to be the problematic society it is today. In short, LKY and the PAP he created, build up this mountain of problems.

    Watch this video which many missed which showed the unjust and the dirt

    https://www.youtube.com/watch?v=WmvXraKR5mc

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  • But PAP needs to buy votes:

    Kenneth forgets that PAP needs to raise more funds because it has to pay more to buy votes because it has failed to improve the lives of Singaporeans since LHL became PM.

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  • bbc:

    i think it is possible also that the govt has been building reserve relentlessly with the intention such that in future it becomes so large as to be able to generate so huge a passive income from the accumulated reserve that it becomes possible to sustain all Singaporeans with quality standard of living even with diminished productive economic activities. I think this is definitely a plausible goal. Thereby Singaporeans would be the first people to live on this planet’s first Utopia. Of course, one must be on guard against the Ying side of it: a dystopia.

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  • Just TAX the peasants more!:

    Excellent KJ:
    KJ has a damn good understanding of the government reserving all the monies into the black hole reserve.

    If only the 70% can understand. They are all believing in the “true news” nonsense.

    Once you understand someone, his moves can be predicted. If you understand their modus operandi, they are naked.

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  • oxygen:

    @ bbc

    EVEN IF YOU FANTASIZED UTOPIA comes to miraculous fruition (if dumb gambling addiction in the global financial casino does not clean us bankrupt), the inheritance will most likely NOT go to the pioneer generation or their children generation. IT WILL ALL GO TO THE NEW MIGRANTS AND THEIR CHILDREN – no thanks to PAPpys population recycling economics of recycling vote base from native peasants to newly-minted peasantry of gong-cha-cha ( Dunning-Kruger too stupid to even begin to discover they are stupid to impossibility of PAPpys deceptions) new migrants.

    So, pardon me, I worry more about your myopia and PAPpys’ cunning dystopia of peasantry.

    bbc: i think it is possible also that the govt has been building reserve relentlessly with the intention such that in future it becomes so large as to be able to generate so huge a passive income from the accumulated reserve that it becomes possible to sustain all Singaporeans with quality standard of living even with diminished productive economic activities. I think this is definitely a plausible goal. Thereby Singaporeans would be the first people to live on this planet’s first Utopia. Of course, one must be on guard against the Ying side of it: a dystopia.

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