The Goods and Services Tax (GST) in Singapore shall be increased to 8% in 2023 and to 9% in 2024. In relation, the Singapore government has introduced the Assurance Package in 2022 and further enhanced it in 2023, so as to help Singaporeans cushion the impact of this specific 2-stage GST hike. The Assurance Package consists of several components, namely AP Cash payouts, AP Seniors Bonus payouts, AP U-Save rebates, AP MediSave top-ups and AP Community Development Council vouchers.

The approach of levying a flat GST rate across the board actually imposes more burden on low-income people than high-income people and reduces social equity. Therefore, the Assurance Package seeks to provide more financial relief to low-income people than high-income people, in hope to mitigate this issue.

Please address the following:

The Singapore government has claimed that the Assurance Package can offset about 10 years of additional GST expenses incurred by Singaporeans living in 1-room to 3-room HDB flats, due to this specific 2-stage GST hike. Do you agree with such a claim? Justify your stand, with the support from mathematical basis and quantitative evidence.