When an increase in taxes does not result in a better standard of living, the PAP has failed

The Straits Times reported (20 Feb) that cabbies find diesel duty hike too sudden and rebates too low.

The unhappy response from our cabbies to the 100% hike in diesel tax underlies the sour feelings of the general public to Finance Minister Heng Swee Keat’s Budget 2019 announcement in Parliament on Feb 18.

The sudden diesel tax hike was like a big bombshell that had fallen on the taxi-drivers’ community. For them, the pain seems to be particularly sharp and unbearable.

Cabby Henry Tay said “his running costs will likely rise by $4 to $5 a day and the rebate taxi firms will pass on to drivers will not be sufficient.” He added that this was akin to: “You give me a deep cut, and then pass me some candy for the pain.”

This aptly describes how the Finance Minister has been practising when comes to introducing higher or new taxes and levies. Bits and pieces of subsidies and rebates for limited duration were dished out to help citizens tie over the initial period of hardship but they are left carrying the unwanted baby for a long time to come.

Ask any man in the street and he will tell you that a tax hike from 10 cents to 20 cents per litre on diesel price will invariably add to business cost for all sectors of the economy and push up cost of living. The people who finally bear the brunt of the diesel tax increase will be those at the end of the food-chain – taxi drivers, transport operators of commercial vehicles and consumers.

The chairman of Prime motor group Mr. Neo Nam Heng confirmed the dilemma taxi drivers will face with the diesel tax hike: “the tax hike will be felt most keenly by cabbies, the impact is quite great, and that two-shift drivers will see their daily cost rising by as much as $6 a day, versus around $2 in refund from the company.”

As usual, the government deploys the Straits Times to put out a good narrative: Senior transport correspondent Christopher Tan reported in his article (“Diesel duty hike’s impact on public transport fares expected to be minimal”; 20 Feb) by quoting Associate Prof Walter Theseira from the Singapore University of Social Sciences and an NMP in the present Parliament.

His opinion is based on the fact that “the excise duty hike is less than 10% of retail diesel prices and the energy index is only 10% of the fare formula.” Furthermore, “the energy is split between electricity prices and diesel cost, and this further dilutes the impact of the increase in duty.”

Thus, there is little risk of pushing up transport fares. However, the second article avoided the gripes of the cabbies on the diesel tax hike.

A10-cent hike in duty translates to revenue of $30 million a year base 300 million litres of diesel consumption in 2017, a fall from around 360 million litres in 2013. It is going to be a big extraction of money from the taxi drivers and business operators of diesel-driven vehicles.

Let me bring readers back to 2015 when the then Finance Minister and DPM Tharman suddenly introduced a petrol hike of 40% on petrol pump prices, at a time when oil prices were falling globally. This decision denied all motorists the benefit of falling oil prices and petrol pump prices etched up.

The fanciful justification given by Mr Tharman was “to encourage less car usage and reduce carbon emission. That petrol hike yielded $177 million a year in additional revenue in exchange for a one-time road tax rebates for motorists and motorcyclists.

This time in 2019, the rationale for the diesel tax hike is to combat air pollution. Diesel cars on the roads are bad for our health. Mr Baey Yam Keng said: “While the tax hike on diesel has affected businesses and cabbies, the move will help discourage usage of fuel and create a better and healthier living environment.” (Straits Times; 28 Feb)

To curb air pollution, the obvious solution is to control and reduce the growth of the car population. Since the introduction of COEs in 1990, the car population really did not decrease much until recently. Hence, severe traffic congestions along CTE and other expressways is a common sight and a daily experience for all motorists.

If diesel vehicles are unhealthy for our living environment, the Ministry of Transport could have restricted the import of such types of vehicles a long time ago instead of slapping on a 100% diesel tax suddenly. Where is the forward thinking and planning ability of our finance ministers?

In Parliament’s present session when the the diesel tax hike was raised, PAP MP Ang Hin Kee – who is the National Taxi Association (NTA) Advisor – was reported to say after the sitting “that he hoped more taxi firms would take up Mr Baey’s call to support cabbies.”

He did not ask any questions or raise any objections to the diesel tax hike which cabbies would expect him to do (or at least there was no report of him speaking up for the cabbies in Parliament).

What is the purpose of appointing a PAP MP as Advisor to NTA if he does not speak up for the cabbies in Parliament?

In the same vein, a new association, the National Private Hire Vehicles Association has been set up with NTUC’s assistance and also headed by Mr Ang Hin Kee. With Mr Ang in control of both associations, he has full control of this employment sector.

By now, the citizenry knows too well that often, the rationale put forward by the Finance Minister to justify higher levies or new taxes are not the real reasons. If the country is in real need for more revenue for any meaningful community projects, the citizens would support wholeheartedly like in the early era of PAP rule.

But not now, because there is a total lost of trust and faith in the rationale or justifications put up by the Finance Minister. When the justifications did not meet reality, like the COEs did not improve the traffic situations because car population was not systematically reduced since 1990, no Finance Ministry official has ever given an explanation.

In 2018, a surplus of $9.6 billion is expected. Yet, the citizens are expected to contribute even more to the government coffers. Carbon taxes are going to kick in this year and all businesses and HDB households are likely to be impacted. The government will rip the citizenry of nearly $1 billion from carbon tax for the first five years.

The hard truth: as the citizens are all fixed with the burden of higher taxes over the long term and a spiraling cost of living in Singapore, the PAP ministers continue to call for their support and trust in their ability and foresight to plan and prepare the country for the future.

Never the twain shall meet.

 

Kok Meng Cheang

 

 

 

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13 Responses to “When an increase in taxes does not result in a better standard of living, the PAP has failed”

  • RDB:

    Son men with power never will speak the truth. Because they all have fork tongues, especially when tn\hey are in power and government voted in relentlessly by dumb ass jackasses repeatedly.

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  • TL Tan:

    The headline is misleading. It is wrong to judge the policy effectiveness based on a single issue (diesel tax) and only at a point in time. It is necessary to consider the overall tax policy over the decades. On this count, the government’s fiscal policy has been very effective. Mutinationals or all stripes and talented people all over the world have been attracted to Singapore. We have been able to fund a world class education system, high quality healthcare, good public housing, well-connected transport system, all with relatively low tax rates. This has been possible because the overall tax policy has been very targeted. The writer has to look at the big picture.

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  • Bapak:

    How many diesel driven taxi drivers voted for PAP?
    How many will vote them again?
    Interesting to know, isn’t it?

    Those who voted them, please SHUT THE F UP!

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  • LIONS:

    Increase in taxes will increase financial burden of those who have NO INCOME if such tax revenue comes from G$T N OTHER RIDICULOUS LEVIE$ on BASICS like food,housing n MEDICAL.
    Oredy,many aged sgs prefer to take their own lives rather than burden their financially-strapped children who have to feed their own kids?

    TAX THE RICH MORE N NOT GRANTING BABY BONUSES N OTHER SOCIAL BENEFIT$ FOR THESE SELFISH RICH likr squandering $100 million plus over ONE BLA$TING F1 WEEK-END that also add to CARBON EMISSION N NOISE POLLUTION N INCONVENIENCE THE PUBLIC?
    BABY BONUS GIVEN TO HIGH INCOME EARNERS IS JUST MORALLY WRONG!
    GIVE TO THOSE WHO NEED MORE LIKE LOWER INCOME WORKERS WHO ARE AFRAID TO START FAMILIES.
    THE RICH WILL WANT MORE KIDS TO INHERIT THEIR ILL-GITTEN WEALTH YA?
    WHY WORRY THEY WONT PRODUCE BABUE$$$?

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  • Bobo:

    There’s always a way to strike a balance. When taxi company adjust the fare meter higher, all Taxi drivers smile coz their income increase. The happiness did not last long when PAP came up with plan B, i.e. to up diesel price. Now Taxi drivers turned sour again. When drivers all KPKBing again, taxi meter fare will have to adjust higher and higher. For sure taxi driver will say on TV that it is very normal to have lesser passengers in the first few weeks, but after that, passengers will become immune to it again.

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  • Dont kpkb anymo, just VTO:

    BUDGET 2019 is total crap crap crap.
    Miws’ brains have become too corrupted by crap$$$
    Pay them mil$alaries to come up with such crap?

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  • Taleban:

    quote “This time in 2019, the rationale for the diesel tax hike is to combat air pollution.” unquote
    I thought all diesel engines on the road conform to EURO IV or V or VI or whatever emission standard.
    The exhaust is cleaner.
    Maybe all the additional tax collected should go into a research to develop a make in Singapore diesel engine without exhaust.

    Another reason for transport fare increment. Fuel price went up. Huat ahhh

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  • Alternative Media:

    But most cabbies voted them. No use complaining. Now they have no power to oppose anything.

    Serves them right.

    For every stupid action , there is an equal and opposite tight slap recoil.

    Newton’s Law of Thermodynamics has never been proven wrong.

    For every ACTION PARTY,
    There is an Equal And ALTERNATIVE PARTY.

    ©Copyright by Alternative Media 2019-Eternity

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  • The Educated Dafts:

    Taleban:
    quote “This time in 2019, the rationale for the diesel tax hike is to combat air pollution.” unquote
    I thought all diesel engines on the road conform to EURO IV or V or VI or whatever emission standard.
    The exhaust is cleaner.
    Maybe all the additional tax collected should go into a research to develop a make in Singapore diesel engine without exhaust.

    Another reason for transport fare increment. Fuel price went up. Huat ahhh

    By now you should already know that any reason given by PAP is just a Wayang reason, a reason for reason sake, like a GP paper. For you to dwell on the whatever reason given by PAP is stupid and futile.

    The increase in living cost is not addressed, the burden of high living cost is not addressed.
    You should ask what happened to all the money collected in the past.
    Why the prices rise in Singapore when globally the prices are falling?
    Why a cataract operation cost $12,000 in Singapore public hospital where a Private hospital cataract operation in some advanced countries only cost $2,500?
    Why is the public health system profiteering at the expense of proper affordable healthcare for citizens?
    You should ask whyere is the CPF money, how much is left in reserves, why CPF money is being held back.
    You should ask why the HDB has zero value while the land prices continue to escalate. You should ask if the HDB asset enhancement is a lie by PAP?

    There are so many questions to ask and so many answers needed, why the dafts are not asking?

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  • rukidding:

    With all these tax increases,..gst, diesel..etc…it may end up as having “not much differnce” if we pay 40% flat tax at end of each year.

    Infact, if we were to “accept” 40% tax and also like any other countries that does that BUT provide welfare for unemplpyed,….we could probably end up “with a Better deal”.

    So,…these Pimps could be trying to “trick” us again !

    Do be aware !

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  • HarderTruths:

    Taxes go into left pocket.
    CPF HDB ERP and MOH into right pocket.

    But the money disappears from there!!
    Where does it go?

    The MIW say “Just accept it. This is the Will Of Heaven”.

    I think they look more like Devils.

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  • be it petrol or diesel:

    //To curb air pollution, the obvious solution is to control and reduce the growth of the car population. Since the introduction of COEs in 1990, the car population really did not decrease much until recently. Hence, severe traffic congestions along CTE and other expressways is a common sight and a daily experience for all motorists.//

    exactly. the effect would be faster rather than piecemeal taxes which will still allow people (businesses) to still use it (with higher costs becos of taxes) and high possibility of passing costs to consumers (if businesses and hence inflating prices) and yet still does not solve the problem (or the pollution will still continue or reduce with very slow rate).

    the problem with pollution (be it petrol or diesel) is becos of white idiots open-leg policy (6.9 or 10m), more people translate to more commuting needs (which means more vehicles on the roads and more costs (very high costs as more roads and rail lines need to be build to spread the crowd).

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  • Still too many are ignorant:

    Good point by the author.

    Other than cost of living and tax,
    We need to focus more on HDB HIP , VERS AND SERS.

    There are many Singaporeans yet to experience this nightmare and the issue of how to fund the second round of HIP aka VERS where by then the flats will be at least 60 years old and at this age are the old residents able to pay for the upgrading and the flat would be unwanted if left say 15 years or less.

    Who want to buy? Even if buy, guess how much will it be worth in the market? How much losses the flat lease owner will incur ? Asset Appreciation scheme? Where is wooden goh ?

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