Rise in petrol duties ‘ill-timed’ with electric vehicles not yet a viable option, says Pritam Singh

SINGAPORE: Workers’ Party chief Pritam Singh called a petrol duties hike on Budget day an “ill-timed bolt from the blue” and urged the Government to consider a phased approach to such tax increases, in his Budget debate speech on Wednesday (Feb 24).

As Leader of the Opposition, Mr Singh was the first to speak out of 60 Members of Parliament slated over three days to debate on the Budget delivered by Deputy Prime Minister Heng Swee Keat on Feb 16.

He pointed out that a petrol duty increase of 15 cents per litre kicked in immediately after it was announced on Feb 16, but electric vehicles (EVs) are still not a viable option for most Singaporeans.

While acknowledging that the move towards more environmentally friendly vehicles is a central plank of Singapore’s Green Plan, he said that there was “much frustration and unhappiness on the ground” over the timing of the hike.

“Many Singaporeans are asking: Why do petrol duties go up immediately all at one go? Did DPM consider a phased and gradual increase of the petrol duties in step with the availability of EVs as a realistic consumer choice and a rise in their numbers on the roads in the years to come?” he asked.

He added that this hike is likely to overlap in timing with an upcoming increase in Goods & Services Tax (GST), which could put more pressure on middle-class Singaporeans. 

READ: Budget 2021: GST hike to happen between 2022 and 2025

The GST hike is expected sometime from 2022 to 2025, but Mr Singh said he expects it to happen by 2023, “well before" the next General Election.

“For middle class Singaporeans or the sandwiched class who do not qualify for the full extent of GST subsidies in particular, and for whom EVs may not be a compelling option in the short term, the next few years may well precipitate added cost of living pressures,” he said.

“I acknowledge the rebates (Mr Heng) has announced alongside the petrol duty hike … Even so, I urge the Government to review this Budget announcement and implement a more thoughtfully phased increase of the petrol duty in proportion to the actual growth of EV usage on the roads.”

He added: “The rebates proposed can be given out in a similarly phased manner. Such a move will be fairer for road users as compared to the minister's current plan, which is also implicitly contingent on a large number of EV charging points becoming available in 12 months’ time, when the subsidies end.”

CLARITY ON S$24B FOR WORKERS

In his speech, Mr Singh also urged greater scrutiny of the use of Budget funds, a review of the wages of frontline workers and questioned the need for Community Development Councils or CDCs.

Mr Singh asked Mr Heng, who is also the Coordinating Minister for Economic Policies and Finance Minister, for more clarity on the use of S$24 billion set aside to transform businesses and workers over the next three years. 

The funds will cover a range of industry grants, financing schemes for firms, and training initiatives for workers and job seekers.

READ: Budget 2021: S$24 billion to transform businesses and workers over next three years

“How does the Government plan to release information and account for the tangible and intangible outcomes of the monies spent on these multi-year initiatives?” he asked.

He said that he was surprised at the relatively low number of about 970 Singaporeans helped by the Capability Transfer Programme, which co-funds the salary and training of trainers and local trainees, and asked for more details on the results of the scheme.

He also asked for more information to be released in the jobs situation reports issued by the Government, in particular the salary ranges and ages of those successfully placed in jobs. 

“The effectiveness of the Government measures should be readily determinable. Without such scrutiny, a perception may crystallise of large sums of money being deployed to address an issue for which effectiveness is hard to establish,” he said.

INDEPENDENT BUDGET OFFICE

Asking for greater scrutiny of use of Budget funds in general, Mr Singh suggested the setting up of an independent parliamentary Budget office to examine the Government's Budget. 

“It would be in step with DPM Heng's call for fiscal prudence and add an important element of public accountability and transparency in light of the massive drawdown of reserves to fight COVID-19,” he said.

Singapore is planning to draw on its reserves for a second year running, for up to a total of S$53.7 billion over FY2020 and FY2021 to fund support schemes amid the COVID-19 pandemic.

READ: Budget 2021: Expected deficit of S$11 billion; Government to draw on reserves for 2nd straight year

Mr Singh said that an announcement that the salaries of healthcare workers would be raised was a “high point” for him in the Budget and asked for more to be done.

“Healthcare workers deserve their raise. I would urge the Government to look at reviewing the wages of other frontliners, and particularly essential workers like our waste disposal workers, transport workers, and many others who proved indispensable in this COVID-19 fight," he said.

He also urged the Government to look “more deeply” into experience on the ground of low-income families living in rental flats.

Citing a study which found that without Government transfers, the median income from work in these households fell about 70 per cent post-COVID-19, he asked if authorities could assess how the pandemic has affected low-income households and their employment prospects.

“Moving forward, the disbursement of additional assistance … targeted at households in public rental units should be seriously considered through the course of this financial year,” he said.

MAKE SURE CDC VOUCHERS BENEFIT HEARTLAND SHOPS

Mr Singh also touched on the CDC vouchers that will be issued to all Singapore households, suggesting that the scheme should be designed to benefit heartland shops and not supermarket chains.

In the Budget, Mr Heng had promised S$100 CDC vouchers for all Singaporean households to be used at heartland shops and hawker centres. The vouchers are to thank Singaporeans for their “discipline” in observing COVID-19 safety measures, and to help local merchants and hawkers affected by these measures, Mr Heng had said.

Mr Singh asked the Deputy Prime Minister to clarify whether the vouchers could be used at supermarkets like FairPrice and Sheng Siong.

READ: Budget 2021 - S$900 million Household Support Package to help families with expenses

“I would suggest that the current scheme be focused solely on heartland shops and hawkers  … If the major supermarket chains are involved, the scheme could effectively mirror a cash top-up,” he said.

The Aljunied GRC MP then questioned the relevance of the CDCs and having full-time mayors for them, saying that they have come into the spotlight following the 2020 General Election.

“Many Singaporeans are of the view that the salaries of mayors are outrageous, principally because they are not perceived to be commensurate with a mayor's roles and functions,” he said. 

“Other Singaporeans are of the view that the CDCs' functions can be carried out by other existing entities.”

READ: Emerging stronger from COVID-19 crisis the focus of Budget 2021

He asked why the CDCs are the implementing agency of the voucher scheme when it appears that other bodies like the Citizen’s Consultative Committees are “even more closely connected to the ground”.

“It would appear to me as if the Government is trying to find some way to make the CDCs relevant in view of the relative absence in the public mindshare,” said Mr Singh.

In his conclusion, he reiterated that the relevance of institutions whose roles and functions overlap with other State agencies should be reconsidered, as part of a closer scrutiny of government expenditure.

“With a tighter fiscal environment in the years ahead, as stressed by DPM Heng over many speeches, closer scrutiny of expenditure should not be seen one-dimensionally as political one-upmanship, but as an administrative necessity,” he said.