Wealth taxes to tackle inequality, more support for families and seniors: MPs on Day 2 of Budget debate

As the House sat on Feb 25 for a second day of debate on the Budget statement, MPs on both sides of the aisle called on the Government to tackle inequality through asset taxes.

They also raised issues such as better support for families given Singapore’s falling total fertility rate, as well as improving the lives of seniors in a super-aged society.

In all, 26 parliamentarians spoke.

The House sits again on Feb 26, when Prime Minister and Finance Minister Lawrence Wong will wrap up the debate.

Tackling wealth inequality

Several MPs referred to a report on wealth and inequality put out by the Finance Ministry (MOF) just ahead of Budget Day, which found that wealth inequality is higher than income inequality in Singapore.

But WP MP Louis Chua (Sengkang GRC) pointed out that measures to tackle this issue were missing from this year’s Budget.

“I believe the deepest divisions in our society today are not based on race, language or religion, but based on socio-economic status, which is closely tied to wealth inequality,” said Mr Chua.

He noted that data in the MOF occasional paper also showed a “gradual moderation” in social mobility as the Republic’s economy matures.

He said robust measures must be put in place to address wealth disparities, suggesting that the Government reinstate the tax on a property’s net annual value, scrapped in 2010, as well as estate duty, as these would be aimed at the “truly wealthy”.

Estate duty was abolished in 2008 because middle- and upper-middle-income groups were disproportionately affected, while the wealthy were able to avoid the duty through tax planning.

He also suggested that Singapore explore non-traditional wealth tax models like those in Switzerland, which have a lump-sum taxation based on lifestyle expenditure or a multiple of living expenses.

“This approach could be explored to ensure that those who benefit most from Singapore’s security and conducive environment contribute their fair share, even if their declared income or assets are difficult to fully ascertain,” he said.

Pushing back against the argument that such taxes might lead to capital flight, Mr Chua added: “We cannot allow the middle class, who are rooted here, to bear the disproportionate burden due to fears that the ultra-wealthy might withdraw their capital and leave.”

PAP MP Xie Yao Quan (Jurong Central) also called on the Government to raise asset taxes to meet future spending needs, saying: “To my mind, we need to look at taxing assets more – much more. In effect, increasing wealth taxes significantly.”

Mr Xie suggested that the Government aim to raise property tax collections to 1.2 per cent of gross domestic product in the long term and “focus on the top tier of residential properties”.

He said stamp duty should be more progressive in the long term, suggesting a new tier for residential properties above $5 million, at a marginal rate of 15 per cent – 2.5 times the current top marginal rate.

This echoed Mr Shawn Loh’s (Jalan Besar GRC) call on day one of the debate for Singapore to make the property tax system more progressive.

Workers’ Party MP Gerald Giam (Aljunied GRC) then asked Mr Xie if doing so would mean less need in the future to increase regressive taxes, such as the Goods and Services Tax (GST).

Mr Xie replied that a “whole mix” of revenue strategies is needed to meet Singapore’s long-term spending needs.

Supporting parents and families

With Singapore’s total fertility rate standing at less than half the replacement rate, other MPs suggested policy changes to encourage people to choose parenthood.

Changes that would help include adjusting childcare leave proportionately to the number of children and enhancing flexible work arrangements (FWAs), said Ms Nadia Samdin (Ang Mo Kio GRC).

These would go beyond monetary support like LifeSG credits and CDC vouchers, as well as policy changes like the additional 10 weeks of shared parental leave, said Ms Nadia, who had a son recently.

She called these policy tweaks and changing mindsets “the invisible infrastructure of fertility”, adding: “When parents trust the system, there is less anxiety about parenthood, and there may be a greater willingness to give it a go.”

Mr Foo Cexiang (Tanjong Pagar GRC) called for the Government to extend support measures to all children, including those of unwed parents.

“Our policies across the Government systematically disadvantage these children, right from birth, as it penalises their unmarried parent who looks after them,” he said.

For example, such a parent does not receive the Baby Bonus cash gift of $11,000, nor can they claim the Parenthood Tax Rebate of $5,000 to $20,000.

Mr Foo said he does not believe any Singaporean would decide to have a child without getting married, just because the Government allows them to benefit as married parents do.

He suggested that adoption leave be increased, and said all children should have access to affordable childcare and after-school care, regardless of whether or not their mothers are working.

Workplaces too require cultural shifts, said NTUC assistant secretary-general Yeo Wan Ling (Punggol GRC), adding that there should be less stigma around workplaces accepting flexible work arrangements.

Referencing surveys conducted by NTUC, Ms Yeo noted that flexibility is the top-most consideration for women to stay in or return to the workplace.

“But what worries them more is whether in asking for FWAs, they would be ‘marked’ by their organisations, and even if they managed to get their FWA approved,” she said.

Tackling anxieties of seniors

The concerns of seniors – including “young seniors” in their 50s and 60s – were also raised in Parliament, with Ms Poh Li San (Sembawang West) speaking on the growing proportion of “young seniors” who she said are at risk of slipping into the lower-middle income group given economic shifts.

This group may not be able to “rise above this employment black hole on their own” and risk becoming a “lost generation” that will have to depend on the state for support, she said.

She proposed measures to help them stay employable and prepare their retirement nest eggs. These include raising CPF contribution rates and interest rates for the Ordinary and Special Accounts; co-funding compulsory retraining or reskilling every 10 years from as early as age 30; as well as encouraging a mindset shift to pursue a healthy working life and lifestyle.

Ms Rachel Ong (Tanjong Pagar GRC) had more targeted concerns over senior-friendly design in the digital space.

While Singapore’s Smart Nation push has brought many benefits, it has also given rise to “digital anxiety” among seniors, many of whom still struggle with basic SMS instructions and links, noted Ms Ong.

She described “the two-minute OTP race”, where a senior receives a notification containing a one-time password that must be keyed in within a set amount of time.

“It means searching for their glasses, unlocking their phones, searching screens and trying to read an English message within a time limit,” she said.

“For the institution, it’s one notification, but for our seniors, it can feel like an emotional roller coaster,” she added.

She recommended fallbacks such as a direct phone line to a real person in automated messages, and simplified government apps, with clear mother tongue options.

Calls for HDB improvements, population data

MPs also brought up issues relating to Singapore’s infrastructure and built environment.

Ms Joan Pereira (Tanjong Pagar GRC) asked the Government to consider adding another round of the Home Improvement Programme (HIP) beyond twice in 99 years, pointing out that some blocks have more issues than others.

Under the HIP, flats are shortlisted for upgrades based on their age. A poll is held among residents, and upgrading works proceed only if at least 75 per cent of Singaporeans living in the blocks vote in favour of them.

Having to pay for constant repairs puts a strain on residents’ finances, especially the elderly and families with lower incomes, said Ms Pereira.

This echoed a call by Mr Ang Wei Neng (West Coast-Jurong West GRC) on the first day of the Budget debate, when he asked the Government for senior-friendly improvements in estates over age 30, and to expand lift access to all Housing Board flats.

As at May 2025, 99 per cent of all HDB blocks had direct lift access.

WP MP He Ting Ru (Sengkang GRC) asked the Government to consider releasing population projections for each region in Singapore.

It is fair for residents in high-density estates – such as her constituency – to seek clarity on the maximum population allowable in the city-state, and how it plans to deal with that number, she said.

Ms He noted that Singapore’s total population is likely to be “significantly” below 6.9 million by 2030, according to the annual Population in Brief report by the National Population and Talent Division of the Prime Minister’s Office and its partner agencies.

But this “fails to assuage concerns that residents have about what they can expect their daily lives would be like in five, 10, or even more years from now,” she said.

Releasing that information will help Singaporeans advocate more meaningfully for urban-related well-being issues such as access to nature and blue spaces, she said.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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