Basket.

On November 14th, it was announced that the Goods and Services Tax would go up to 7%, with a consumate decrease in the corporate tax. Just over a week later, headline news for the Straits Times was that civil servants would get larger year-end bonuses. Just a couple of days or so after that, today, the headline of the Straits Times reads "CIVIL SERVICE SALARIES LIKELY TO GO UP".

It seems that the government is going for broke. Just half a year after an election win in May, such eyebrow-raising news comes through with such impeccable timing, almost as if deliberately calculated to raise the ire of the lower-middle income grouping.

The reasons outlined for such essential measures? Singapore needs the extra money for economic and social development, including aiding, ironically, the lower-middle income group that will most feel the pinch of this projected 40% increase in the government's main source of indirect taxation. As for lowering the corporate tax rate, this is being done to maintain our economic competitiveness on a global level.

But just as the government aims to bring up revenue, it seems it is aiming to spend more as well - on civil service bonuses and salaries. How do these two aims square?

Apparently, the government believes that (to quote from the Straits Times) it "must keep its wages competitive to retain and recruit talent."

"Competitive"... "maintain our competitiveness..." It's not a new government line. Far from it - it's the same old tired excuse they have been using for years. Hey, if you want to oppress the people with unreasonable finincial burdens while showing them just how much inequity there can be in society, at least be a little creative with your snivelling excuses, how about that? It'll make the news a bit more entertaining to read if nothing else.

But anyway, let us examine the spuriousness of the government's claims.

Where taxation is concerned, the Singapore government has all along stressed the importance of indirect taxes (GST), while keeping direct taxes (eg income tax) relatively low. It is true that Singapore has one of the lowest income tax rates in the world, and what is it is based on the progressive tax system. The highest marginal rate is a mere 20% of taxable income, as compared to countries like the Netherlands (52%) or Sweden (32%, thereabouts). On paper it sounds impressive - but what one must consider is that Sweden is a welfare state, with cradle-to-grave benefits for citizens. Singapore does not even have a framework of a welfare state and only a weak semblance of a welfare system in general.

That's just putting into perspective the oft-trumpeted claim, technically true, that Singapore has one of the lowest income tax rates in the world.

And so Singapore concentrates on indirect taxation. But raises in the GST are a relatively recent phenomenon. Introduced in 1994, it stayed at 3% until January 1, 2003, when it went up to 4% and then January 1, 2004, when it went up to 5%. Now, a mere three years hence, it is slated to go up to 7%. Why this spate of increases in just four years, when the rate had stayed stable for nearly a decade from its inception?

I can only hypothesize. Perhaps the government realised what a bonanza they were missing out upon, especially as per capita consumption went up and up during the 1990s and in the wake of recovery from the disastrous 1997 Asian Financial Crisis. Perhaps they are now belatedly trying to make up for a "lost decade" in tax revenues, knowing that they can push GST up and up and still proclaim to the world that our income tax rates are among the lowest on the planet.

Who knows? In any case it is obvious who this is going to hit the hardest, because GST affects virtually everything you buy, from daily necessities to the rarest luxuries. To add insult to injury, it would seem, the government sonorously proclaims that it is raising GST to help the very income group the increase is going to affect the most. Really, you can't get better at screwing people over than that. But the government is, unbelievably; at the same time as they announced the GST increase, they announced that the corporate tax rate was to go down.

The corporate tax rate, one can deduce from the very sound of it, is primarily a tax on the rich, on vast multinational corporations that come and invest here. By raising GST, a tax that affects everyone but particularly the lower-middle income grouping, and lowering coporate tax, a tax primarily paid by the wealthy, is the government not effectively robbing the poor to give to the rich?

To be sure, there is sound economic justification for the government's move. Singapore faces an uncertain economic future. With no hinterland, an ageing population and increasing competition from her ever-growing and developing neighbours, it is an increasing struggle for Singapore to remain relevant in the international economy. One way, indeed, is to lower corporate taxes, to make us more attractive to foreign investors.

Yet a move such as that smacks of desperation, and the situation is not desperate. Singapore has already managed to convert much of its economy from manufacturing to services, with 39% of the labour force involved in providing services as compared to 18% involved in manufacturing. With most of our neighbours still in the economic "takeoff" stage, reliant on manufacturing industries and even primary exports (oil, gas, et al) for growth, Singapore is already partly ahead. Indeed, we may laugh at the government's "hub" efforts (biomedical hub, financial hub etc), but it is a genuine attempt to play to our strengths and ensure our continued economic viability. In any case, we still have unique advantages over our neighbours - such as an excellent geographical position, a well-established and highly-regarded port (which competitors such as Johor's Port of Tanjung Pelepas have signally failed to equal), a highly-educated workforce (at least relative to our neighbours) and an extremely low rate of official corruption. Our competitors will take years if not decades to overcome these.

But back to GST, which is far more likely to personally affect you, me and all those around us. A raise may well not be completely unjustified, but a 40% raise borders on the ridiculous - and a 40% raise just two years after the previous increment is outrageous. Our reserves need filling, they say. That's complete nonsense, because Singapore has reserves of US$119 billion, or S$197 billion. It is an enormous sum, and it is added to every year because the government has consistently refused to run budget deficits. Here's a thought: why not, instead of running vast surpluses year after year, run a deficit instead to help out the lower-middle income grouping? Or perhaps dip into our reserves, if you don't want to do that. We have more than enough. If the government was really concerned for the welfare of our less well-off, that is what they would do, instead of black-humouredly making them pay for their own Progress Package.

Even such insults and injuries, it seems, were not sufficient. The government has to pour salt onto the wounds by announcing, within two days of each other, that civil servants would receive larger bonuses this year and that their salaries would be likely to go up. The justification is, again, competitiveness. Apparently the government is afraid that it will have trouble recruiting enough of the best and brightest to run Singapore. I think, there is little chance of that happening, and anyone who reads this would be able to attest to that. The hordes clamouring for various government scholarships every year - do you think there'll ever come a time when there won't be hordes clamouring for government scholarships? The civil service is attractive enough currently - stable job, good income, good chances of promotion so long as you don't fuck up badly, or don't let anyone find out if you do. I'll like it. In fact, I'm already in it. Why do we need to push up salaries and bonuses and turn an already money-faced society yet more mercenary? Why do we have to pile up the burden on those who can already barely afford it while those who can by a street get even more assurance that they can?

Resources are limited, and every government has faced the dilemma between economic viability and social welfare. It's an ongoing battle to balance the two, but it seems that the Singapore government has decided firmly to go for the former. "Let them eat cake", our leaders seem to be telling the people. But how long will the people be content to suffer imaginary cake?

I think we know the answer, sadly.