Finance Minister Tharman Shanmugaratnam on Wednesday defended the Budget for fiscal year 2008 as he wrapped up the three-day parliamentary debate.

Responding to MPs' comments that raising the Goods and Services Tax (GST) last year was a mistake, he stressed that the GST was not a revenue generating measure for 2007.

In fact, the minister said, the GST increase was revenue neutral.

Mr Tharman said this amount was matched with what was paid out in the GST Offset package.

The GST hike also enabled the Government to roll out the Workfare Income Supplement (WIS) scheme, which is a permanent initiative to help low-wage workers.

Increasing the GST, said the finance minister, also enabled the Government to to reduce corprate income tax.

In any case, Mr Tharman pointed out that it's essential to put in place a stronger revenue structure in good years to fund increased expenditure, especially in the area of healthcare, continuing education and training.

On whether the Government is giving back too little to Singapoereans given the huge budget surplus of $6.4 billion, Mr Tharman sought to put this figure in perspective.

He said the amount is not large by historical standards, relative to the size of Singapre's economy.

The surplus also marks a turnaround in the deficit Singapore suffered in the 1990s.

In fact, contrary to some MPs' comments that Singapore's growth did little to benefit low income Singaporeans, Mr Tharman pointed out that the Government had in fact given back to its people.

He gave this example.

Given an expected inflation of between 4.5 and 5.5 percent this year, a two-room household with retirees will see their total spending go up by $650 a year.

But they will get around $3,100 from the Budget surplus package and in GST offsets.

About 40 MPs spoke up during the Budget Debate.