Friday, July 25, 2008

Is PAP government FOR the People?

I am terribly shocked by PAP's inconsistency in its economic policy; or rather, the consistency in its approach to take care of the rich, powerful elites and capitalists rather than the people at large.

Let us examine the strategic economic thinking of the PAP government so far:

1) GST is indisputable a regressive tax and in Singapore's context, PAP government has increased GST from 3% to 5% and 7% while it reduces personal income taxes for those companies and rich tax paying residents. The timing of the increase of GST from 5% to 7% is very bad as it coincides with a rapid increase of oil prices as well as food prices. When critics are questioning about PAP's untimely increment of GST, they defended it just like a matter of fact.

2) When the people on the street are suffering from high inflation and requested PAP government to do something about it, PAP government has just brush it off by simply saying, " Its market froces". However, if PAP really believes in "market forces", then they should let the market determine the prices of petrol and diesel, without imposing hefty taxes on them. While places like Hong Kong has started to waive diesel tax to reduce fuel-induced inflation to all products and services, PAP has refused to do so.

3) However, when it comes to wages, PAP does not see it as inappropriate to intervene to suppress wages by making remarks like "pay rise will increase inflation"! When PAP critics are pressuring them to do something about the high inflation, they brush it off by saying the inflation is "imported" and they could hardly do anything to it (in fact, there are things they could do like waiving diesel tax). But when it comes to bargaining for wage increase for workers so that they could cope with rising cost of living, they turn around and say this will be a source of inflation!

4) Ironically, PAP ministers themselves have just increased their own pay by double digits but now, they see it inappropriate for workers to have their pay increase!

5) While the PAP government puts the responsibility of worsening the inflation on workers, they have never said anything about those landlords who are increasing commercial rentals in leaps and bounds! In fact, commercial rentals are one of the main source of inflation as their increases are llike minister's pay, double digits growth! Have PAP shown any concern about the run away commercial rental as the source of inflationary pressure? The PAP government has every means to control sky rocket rental as many of its GLCs are key landlords in Singapore.

6) Again, PAP government is more concerned about whether public transport companies can be profitable or not by allowing fare increases in spite of record profits for these companies partly due to past fare increases, rather than considering such fare increase could be a source of inflationary pressures!

7) To add salt to injury, while they view higher wages as a source of inflation, they refuse to see that the latest introduction of MORE ERPs and rise in ERP charges will worsen the inflation to the middle class!

8) All in all, it is really shocking to see how PAP government talk from one end of the logic to the other end of ill logic which contradicts themselves. It is really simple to conclude that the PAP government is least concerned about the impact of high inflation on the middle lower class workers at all. They are more concerned about their own GLCs, namely the public transport companies, commercial landlords and their own pay rather than the people's hardship amidst the high inflation pressure.

9) Any suggestion to them to reduce inflationary pressure that will result in the government or its GLCs making less money, all has been brushed off as "against market principles". But when we ask them to remove those taxes and fiscal distortions due to government policies, they would give ridiculous explainations like "reducing petrol/diesel tax" will make prices HIGHER! I guess PAP could come up with their own Economic Theory to substantiate such ridiculous views!

10) The only plausible options for the PAP government is to make workers the sacrificial lambs to fight high inflation. This is basically because by suppressing wages for the workers, it cost them nothing but benefits their GLCs!

11) This is the STINGY GOVERNMENT that refuses to reduce petrol/diesel tax, refuse to reduce GST, refuse to intervene in rental hikes within its power, refuse to curb public transport fare increase in view of record profits by these companies, refuse to hold back ERP increases, refuse to reduce but instead increasing their own pay while asking SINGAPOREANS to make sacrifices to curb inflationary pressure!

This is a government that totally lacks empathy of the workers in facing high inflationary pressure. This is a government that is only concerned about their own pay, their GLCs and capitalists interests. This is a government that will not make any sacrifices for the people by reducing taxes that added to the inflationary pressure. This is the government that would be very quick to ask the people to make sacrifices to curb inflation while they either do not want to do anything themselves or that they continue to add on to the inflationary pressure!

And it is really ironic when we see the enormous amount of money in tens of billions of dollars being utilized by the PAP government investment arms to rescue other countries' banks and suffering billions of dollars of losses, very little has been spent on the priorities to help Singaporeans to fight inflationary pressures!

In terms of healthcare, PAP government has announced the deferment of the hospital construction in the west in view of the high cost of construction. My question is, while it is ok for the government to suffer huge losses in trying to be the messiah of western banks, why would the healthcare priority of Singaporeans be compromised?

I was told that the healthcare cost is rising in government polyclinics and hospitals to an unbelievable level. One of my friend has found out that making an appointment to government polyclinics, waiting for months to do a ear wax cleaning is actually more expensive than doing it in a private clinic!

And while the PAP government see wage increase for the people is a source of inflation, it did not see that by imposing means testing for healthcare would actually create a big inflationary pressure on the people's essential healthcare needs!

Is this a government FOR the people?

I really doubt so. I hope Singaporeans, via this very experience of hardship partly imposed by the PAP government policy directions, would see clearly that this PAP government has totally lost touch with the people. If Singapore is to continue to be ruled by these elites who hardly empathize with Singaporeans at large, we will be walking down the slippery road of extreme capitalism. This would mean that the middle class squeeze will worsen and the income disparity will be widen. Most of us will become just a digit slave to the whole elitist system. Is this what you want for your children? I don't.

Goh Meng Seng