With an estimated more than $1 trillion reserves, there is no justification for another GST tax hike.
That PAP has insisted on raising GST by 2% after GE2020 has raised concerns about the state of our reserves. This is because a $1 trillion reserves generating net/expected real returns of 4% amounts to $40 billion.
(Excluding $10 to $20 billion in annual addition from land sales revenue as well as billions in CPF returns confiscated.)
Currently, only $16 billion NIRC is used to supplement government revenue. It is rather ridiculous that PAP has resorted to increasing GST rate to raise less than $4 billion in revenue when another source of revenue is available.
Even if NIRC is increased to 70%, reserves will still continue to increase and PAP’s doomsday scenario will not pan out.
Something is amiss and it’s possible that:
– Our actual reserves is much less than the estimated “more than $1 trillion”
– PAP is covering up huge investment losses.
Without suing people till their pants drop, the government could put a stop to public speculation with more transparency.
Or is there really a black hole in our reserves as many have suspected for years?