SINGAPORE: In his speech at the Budget debate in Parliament on Tuesday (Feb 24), Workers’ Party MP Gerald Giam (Aljunied) noted the strength of Singapore’s fiscal position as evidenced by a surplus of S$15.1 billion.
However, he added that this prosperity is not being felt by many Singaporeans, including those who own local small businesses, and he said that the surplus could be used to support them.
Given the size of surpluses over the past few years, the MP also said that the necessity of raising the Goods & Services Tax (GST) should also be re-examined.
Mr Giam called the phenomenon of high surplus, which is mostly due to large enterprises, while many struggle, a “two-speed economy,” as described by the Association of Small and Medium Enterprises (ASME). He cited the 2,400 food establishments that shut down in 2025 and young people under the age of 30 experiencing unemployment rates nearly double the national average
“Local SMEs find themselves squeezed by a perfect storm of rising operating costs and weaker domestic demand. ASME pointed to a productivity and contribution imbalance: Large enterprises contribute 74 per cent of the nation’s nominal value-added, even though they employ just 30 per cent of the national workforce. In contrast, micro and small enterprises contribute only 11 per cent of the value-added, despite employing 45 per cent of the national workforce,” he said.
This labour productivity gap has caught smaller businesses in a low-productivity “second speed” and has made it more difficult for them to offer their employees the kind of salaries that are needed for people to cope with higher living costs.
Adding to the situation are AI integration and automation, he said. Mr Giam then went on to warn that this could lead to “jobless growth,” where GDP and corporate profits increase faster than wages and job growth.
The MP therefore called for the use of fiscal surpluses to support workers and SMEs, especially those who are stuck in slow growth, as “it is only by doing so that we can secure the necessary social licence for continued high-growth strategies in elite sectors.
When the average Singaporean sees tangible, structural benefits from these outsized gains rather than rising inequality, it fosters the public trust and political consensus required to maintain our open and competitive economic model.”
As for the GST, which went from 7 to 8 per cent on Jan 1, 2023, and from 8 to 9 per cent on Jan 1, 2024, Mr Giam said that surpluses over the past five years have totaled more than S$22 billion and have been over more than S$1 billion in four out of the past five years.
“We should re-evaluate the necessity of the GST hike. The government said that the GST hike was meant to fund increased healthcare spending in an ageing society. But the Ministry of Health’s revised FY2025 operating expenditure was $305 million lower than estimated, mainly due to lower-than-projected funding needs for public healthcare institutions,” he said.
The MP further asked if the government would revise its projections for future increases in healthcare expenditures, underlining how unnecessary taxation affects households not only through directly decreasing liquidity, but also making them dependent on government handouts rather than fostering genuine financial independence.
“Furthermore, it acts as a handbrake on economic growth by constraining household spending,” he added.
His speech may be found in full here. /TISG
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