SINGAPORE: Voters may hear about many “tempting” and “appealing” proposals to manage cost-of-living pressures during the General Election, but Prime Minister Lawrence Wong on Tuesday (Apr 22) warned that not all of these are sound and could put public finances and the economy at risk.

“If they weaken our public finances, the burden will fall on our children. If we mismanage the economy, investors will lose confidence and our incomes will suffer.

“Then we won’t have the resources to sustain permanent schemes – or even to provide temporary relief,” he said in a four-minute video message that was put up on his social media accounts on the eve of Nomination Day. 

Wednesday marks the start of a nine-day campaign period before Singaporeans head to the polls on May 3.

In his message, the prime minister also outlined the various support measures and plans that have been put in place by the government, as well as how it has managed the economy. 

“The government’s approach is prudent and responsible – especially crucial in these uncertain times. I will not gamble with your lives or your future,” he said.

“We will always support you, stand with you, and go all out to secure a brighter future for you.”

Political parties have been unveiling their manifestos in the run-up to Nomination Day, with many proposing various ways to tackle rising costs.  

The Goods and Services Tax (GST) featured in the manifestos of the Workers’ Party (WP), Progress Singapore Party (PSP) and the Singapore Democratic Party (SDP). 

In a section on the cost of living, the WP proposed alternative revenue channels to GST. It described its proposals as "less regressive revenue options" which would be "sufficient to close the gap in anticipated increases in health and aged care costs".

The PSP called for a rollback of the GST to address rising costs. It recommended reducing it from 9 per cent back to 7 per cent as well as exempting essential items like rice and milk formula from the tax. 

Meanwhile, the SDP called for a reduction in the GST and to eliminate it for essentials, such as food and medicine. 

Red Dot United (RDU) proposed the establishment of a “Citizen’s Dividend”, described in its manifesto as an “unconditional cash transfer” that would serve as a financial safety net for all Singaporeans.

MANAGE ECONOMY PRUDENTLY AND RESPONSIBLY

In his message on Tuesday night, Mr Wong said that cost-of-living pressures are “a real concern”, noting that other countries are also facing a similar situation due to the wars in Europe and the Middle East, global supply chain disruptions, as well as tariffs and trade wars. 

He noted that the government had already seen some of these challenges coming earlier in the year.

“That is why I announced a comprehensive support package in the Budget. They include (Community Development Council) and SG60 vouchers, cash payouts, LifeSG credits, U-Save rebates, and more,” he said, adding that a typical family of four with two young children can receive around S$5,000 in support this financial year.

Mr Wong said that the measures will be rolled out in the coming months, with the CDC vouchers in May, SG60 vouchers in July, Child LifeSG credits from July onwards and U-Save rebates in July and October. 

“So nearly every month, you can expect something,” he said, adding that the government is also monitoring the situation closely.

“And if conditions worsen, we will step up the support. And beyond this year, we will continue the help for as long as it is needed.”

He said the government was able to extend such help because the People’s Action Party (PAP) government has long managed its economy well and will continue to do so. 

“Our public finances are healthy and strong. Many other countries borrow heavily, and pay interest on their loans. We do not. We have reserves, which we invest, and all Singaporeans benefit from the investment income generated.

“So at a time when other governments are looking for ways to trim spending or to cut benefits, we are able to deliver more support and enhance social safety nets for everyone.”

He highlighted how the bulk of the government’s social spending is for permanent programmes, and also noted that its social spending is rising – becoming the largest item in the Budget, surpassing defence. 

“That is how we provide real, sustained support to help every Singaporean with the cost of living, and at every stage of life,” he said. 

He also said that the best way to manage cost pressures is to keep incomes rising, and rising faster than inflation. 

“For this to continue, our economy must keep growing. So we must manage it prudently and responsibly,” he added.