Saturday, December 12, 2009

Cutting GST will increase business cost in SGP!!

From: bear
Date: Sat, 12 Dec 2009 17:43:34 -0800 (PST)
Local: Sun, Dec 13 2009 9:43 am
Subject: Re: DPM Wong: Cutting GST will increase business cost in SGP!!

They can come up with such twisted logic to justify their policies.

On Dec 13, 3:31 am, Masturbating Myself
> By Gabriel Chen Dec 8, 2009

> 'Leaders must have the conviction to push through what needs to be
> done, rather than what is politically expedient or populist.'

> LEADERS must have the conviction to do what is right and not what is
> popular, even if it costs them political points, said Deputy Prime
> Minister Wong Kan Seng yesterday.

> He told a leadership forum that a crisis may give leaders the platform
> and momentum to drive difficult reforms, but such tough measures
> become harder to pursue once the economy rallies.

> Businesses and employees would be reluctant to see the withdrawal of
> temporary support measures put in place during the downturn, and they
> might also be wary of moves to tighten credit and strengthen corporate
> governance.

> 'In such a situation, leaders must have the conviction to push through
> what needs to be done, rather than what is politically expedient or
> populist,' Mr Wong said.

> He cited a range of populist measures that the Government avoided
> during the recession - decisions that did earn some criticism from
> some groups and observers.

> There were calls to temporarily cut the goods and services tax (GST)
> and Central Providend Fund (CPF) contribution rate for employers -
> 'appealing arguments which we thoroughly assessed and ultimately
> rejected', he said.

> The belief was that a lower GST rate would boost consumer spending,
> while payroll costs would fall with a cut to the employer CPF
> contribution rate.

> Mr Wong explained yesterday why the Government did not heed both
> calls.

> He said the fundamental problem during the recession was not one of
> wage competitiveness, but a slump in global demand. So cutting the
> employer CPF contribution rate would not have been appropriate.

> 'An across-the-board cut in wages was not warranted,' he said, adding
> that the Government's $4.5 billion Jobs Credit scheme provided
> employers with temporary relief on wage costs.

> On the calls for slashing the GST rate, Mr Wong said such a move might
> actually raise business costs, as companies would have to change their
> systems to adjust to a new GST rate.
> He was speaking at the fifth Asia Economic Summit yesterday, an event
> that brings together leading strategic thinkers, government officials
> and corporate chiefs to brainstorm and discuss the strategic
> challenges that Asia faces and the prospects ahead.

> Other speakers included Penang Chief Minister Lim Guan Eng; Mr Joseph
> Tan, Credit Suisse's Asian chief economist for private banking; and Mr
> Wei Jianguo, secretary-general of the China Centre for International
> Economic Exchanges.

> Mr Lim said the unipolar world, dominated by the United States, has
> given way to a global economy that is becoming more multipolar in
> nature.

> Meanwhile, Mr Wei urged leaders to strengthen regional cooperation,
> actively explore a new growth model, protect the environment and
> achieve stable long-term development.

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