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08 Apr 2019
Ministry of Finance
Suggestion View - 329
Remove unproductive and wasteful practices

There are many government practices that add to the cost of doing business. Eventually, these costs will be reflected in the prices that are paid by consumers. They increase the cost of living. Singapore already has the highest cost of living in the world for several years. 

A large part of the high cost of living is the cost of property. I will not deal with this matter here. I will deal with it separately.

I will deal with the government practices that I consider to be unproductive and wasteful. Here are some of them:

a) There are different types of subsidies available to citizens, i.e Pioneer generation, Merdeka generation, CHAS (different color cards), means testing at polyclinics and public hospitals. The different schemes impose a burden on the provider and on the patient to provide evidence. Where a different card is issued for each benefit, the problem arise when the patient does not bring the card.

b) There are different levels of subsidies for infant and child care. Parents have to provide document evidence of income level and other requirements. 

c) Different households are given different amounts of GST vouchers or utility vouchers. Many people do not understand what are their entitlements.

d) The collection and accounting for GST and claiming of refunds for GST inputs add a heavy cost to businesses.

Many administrative and servicing staff have to be employed by businesses to handle these schemes. They add to the cost of doing business.

What can be done to remove the unproductive and wasteful practices?

a) Provide the same benefit to all citizens for health care, infant care, child care, education and other benefits, regardless of income level. If the government need the higher income earners to contribute more towards the revenue, increase the rate of income tax for high income earners.

b) The same benefit can be provided to non-citizen residents but they can be required to contribute a monthly levy for these benefits. Many of the foreign workers already contribute to this levy. It can be imposed on the foreign workers that are now exempt from the levy.

c) Abolish GST to bring down the cost of living and prices paid by consumers. The reduction in prices will be more than the rate of GST as businesses will be freed from the administrative cost of GST. 

It is possible for the government to balance the budget through these measures by increasing income tax paid by high income earners (say those earning more than $250,000) and asking employment pass holders to pay a levy.

By removing the unproductive and wasteful practices, we can reduce our cost of living and the cost of doing business. We can put our workers towards productive work and be a more competitive economy.

Tan Kin Lian

 


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