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Reason Y GST cannot be lowered.....
By Gabriel Chen Dec 8, 2009
'Leaders must have the conviction to push through what needs to be done, rather than what is politically expedient or populist.'
LEADERS must have the conviction to do what is right and not what is popular, even if it costs them political points, said Deputy Prime Minister Wong Kan Seng yesterday.
He told a leadership forum that a crisis may give leaders the platform and momentum to drive difficult reforms, but such tough measures become harder to pursue once the economy rallies.
Businesses and employees would be reluctant to see the withdrawal of temporary support measures put in place during the downturn, and they might also be wary of moves to tighten credit and strengthen corporate governance.
'In such a situation, leaders must have the conviction to push through what needs to be done, rather than what is politically expedient or populist,' Mr Wong said.
He cited a range of populist measures that the Government avoided during the recession - decisions that did earn some criticism from some groups and observers.
There were calls to temporarily cut the goods and services tax (GST) and Central Providend Fund (CPF) contribution rate for employers - 'appealing arguments which we thoroughly assessed and ultimately rejected', he said.
The belief was that a lower GST rate would boost consumer spending, while payroll costs would fall with a cut to the employer CPF contribution rate.
Mr Wong explained yesterday why the Government did not heed both calls.
He said the fundamental problem during the recession was not one of wage competitiveness, but a slump in global demand. So cutting the employer CPF contribution rate would not have been appropriate.
'An across-the-board cut in wages was not warranted,' he said, adding that the Government's $4.5 billion Jobs Credit scheme provided employers with temporary relief on wage costs.
On the calls for slashing the GST rate, Mr Wong said such a move might actually raise business costs, as companies would have to change their systems to adjust to a new GST rate.
He was speaking at the fifth Asia Economic Summit yesterday, an event that brings together leading strategic thinkers, government officials and corporate chiefs to brainstorm and discuss the strategic challenges that Asia faces and the prospects ahead.
Other speakers included Penang Chief Minister Lim Guan Eng; Mr Joseph Tan, Credit Suisse's Asian chief economist for private banking; and Mr Wei Jianguo, secretary-general of the China Centre for International Economic Exchanges.
Mr Lim said the unipolar world, dominated by the United States, has given way to a global economy that is becoming more multipolar in nature.
Meanwhile, Mr Wei urged leaders to strengthen regional cooperation, actively explore a new growth model, protect the environment and achieve stable long-t:s13:erm development.
Wat an excellent excuse!
'Leaders must have the conviction to push through what needs to be done, rather than what is politically expedient or populist.'
LEADERS must have the conviction to do what is right and not what is popular, even if it costs them political points, said Deputy Prime Minister Wong Kan Seng yesterday.
He told a leadership forum that a crisis may give leaders the platform and momentum to drive difficult reforms, but such tough measures become harder to pursue once the economy rallies.
Businesses and employees would be reluctant to see the withdrawal of temporary support measures put in place during the downturn, and they might also be wary of moves to tighten credit and strengthen corporate governance.
'In such a situation, leaders must have the conviction to push through what needs to be done, rather than what is politically expedient or populist,' Mr Wong said.
He cited a range of populist measures that the Government avoided during the recession - decisions that did earn some criticism from some groups and observers.
There were calls to temporarily cut the goods and services tax (GST) and Central Providend Fund (CPF) contribution rate for employers - 'appealing arguments which we thoroughly assessed and ultimately rejected', he said.
The belief was that a lower GST rate would boost consumer spending, while payroll costs would fall with a cut to the employer CPF contribution rate.
Mr Wong explained yesterday why the Government did not heed both calls.
He said the fundamental problem during the recession was not one of wage competitiveness, but a slump in global demand. So cutting the employer CPF contribution rate would not have been appropriate.
'An across-the-board cut in wages was not warranted,' he said, adding that the Government's $4.5 billion Jobs Credit scheme provided employers with temporary relief on wage costs.
On the calls for slashing the GST rate, Mr Wong said such a move might actually raise business costs, as companies would have to change their systems to adjust to a new GST rate.
He was speaking at the fifth Asia Economic Summit yesterday, an event that brings together leading strategic thinkers, government officials and corporate chiefs to brainstorm and discuss the strategic challenges that Asia faces and the prospects ahead.
Other speakers included Penang Chief Minister Lim Guan Eng; Mr Joseph Tan, Credit Suisse's Asian chief economist for private banking; and Mr Wei Jianguo, secretary-general of the China Centre for International Economic Exchanges.
Mr Lim said the unipolar world, dominated by the United States, has given way to a global economy that is becoming more multipolar in nature.
Meanwhile, Mr Wei urged leaders to strengthen regional cooperation, actively explore a new growth model, protect the environment and achieve stable long-t:s13:erm development.
Wat an excellent excuse!
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