Don't compare S'pore living costs to
Sydney's
I REFER to the letter "S'pore not that pricey" (my paper, July
28).
I don't think it is fair to compare Singapore to Sydney.
First of all, Australia has a minimum-wage policy. At McDonald's
restaurants there, for example, one can, depending on one's age,
earn up to $12 an hour, compared to $5 or less in Singapore. My
point is that the Australian standard of living corresponds to the
income its people earn.
Singapore may seem less pricey because, in general, people here
earn less, compared to Australians.
Regarding the comparisons of food prices, I must point out that
food portions there are so huge that a serving can easily be shared
by two people who are not used to the generous helpings.
Similarly, a loaf of bread there may be more expensive, but it
is "supersized".
Furthermore, rice is not a staple of the Australian diet, so it
is pricier there. Likewise, pasta is more expensive in Singapore as
it is not a staple here.
On the other hand, dairy products in Australia are so much
cheaper, with chocolates and ice cream costing at least 30 per cent
less.
The letter-writer said that many foreigners want to settle in
Singapore. Likewise, it is also a known fact that there are many
Singaporeans who want to settle in Australia, although not
necessarily in Sydney, because of its high rentals.
Mr Alvin Aw
As per my observation.
Not forgetting that Australia's GST (VAT) is
discriminatory, they exempt certain basic necessities like food,
medication and textbooks.
Whereas Singapore adopts a non-discriminatory stance, tax
everything and anything. So that they can help the poor. 
The lame reasoning being, it's difficult to implement a
discriminatory GST. Other countries like the UK and Australia have
been doing it eons ago, they don't find it difficult, but Singapore
finds it difficult. We must lag some administrative efficiency.
Another lame reasoning, the rich also eats rice, by excluding it
would mean the rich escape being tax. But the cost to the rich is
pittance, whereas the cost to the poor is grave. e.g. Rich making
$50,000 per month, a 5kg bag of rice $13.00 and a GST of
$0.91. The GST of $0.91 only represents 0.001% of the rich folk's
income. Whereas to a person making $1,500, this would represent
0.061% of a poor person's income or 61 times that of a rich man's
income.
Another lame reasoning behind implementing GST for basic
necessities like food, these basic food products are used by
restaurants which rich folks go to. The GST payable by a restaurant
is the difference between it's input tax (what he incurred during
purchase) and output tax (what he charges to his customers).
Therefore, for a restaurant buying their raw
ingredients at $100, incurs a GST of $7 (input tax). The
restaurant sells their final food product at $1,000, the GST
charged to customer is $70 (output tax). The net amount payable to
IRAS would be $63 ($70 - $7). Not forgetting that the initial
amount of GST $7 was charged by another supplier to this
restaurant, so it is effectively in the pockets of the IRAS. The
total GST tax pocketed by IRAS is $70.
If basic food commodities was exempted GST, therefore the raw
ingredients purchased by the restaurant would be $100 (no GST, no
input tax). The final product that the restaurant charges is
$1,000, so the GST charged to customer is $70. Since there was no
input tax, then no deductions of input tax was made and the final
GST of $70 is paid to IRAS.
Whether IRAS charges GST for basic necessities or otherwise, the
net effect to IRAS would still be the same, in both circumstances
$70 of GST is collected by IRAS.
By not charging GST for basic foodstuff sold in supermarkets
would mean, that the poor would be better off by not having to
another 7%, thereby stretching the value of their dollar.
But their premise is, GST is to help the poor,
to what effect is left to the thinking abilities of the
audience.
