By Yasmine Yahya, Senior Political Correspondent, The Straits Times, 10 Oct 2018
Singapore may not spend as much as other countries on healthcare and education, but the outcomes it achieves in these areas are significant, and better than most.
Social and Family Development Minister Desmond Lee made this point yesterday when he refuted a report which criticised Singapore for being "one of the worst-performing countries in the world at tackling inequality".
The Commitment to Reducing Inequality Index 2018, compiled by non-profit organisations Oxfam and Development Finance International, ranked Singapore 149th out of 157 countries - below Ethiopia and Afghanistan, and above Bhutan and Haiti.
The index measured each country's commitment to reducing inequality by looking at its social spending, tax policies and labour rights.
The report said Singapore's tax system was the worst in the world at tackling inequality because it "undertaxes wealthy individuals and corporations". The personal income tax rate for top earners here is 22 per cent, while corporate tax is 17 per cent, both of which are too low, the report argued.
Mr Lee responded: "Yes, the income tax burden on Singaporeans is low. And almost half the population do not pay any income tax.
"Yet, they benefit more than proportionately from the high quality of infrastructure and social support that the state provides."
He argued that while the report assumes high taxation and high public expenditure reflect commitment to combating inequality, it is more important to look at the outcomes achieved.
Social and Family Development Minister Desmond Lee made this point yesterday when he refuted a report which criticised Singapore for being "one of the worst-performing countries in the world at tackling inequality".
The Commitment to Reducing Inequality Index 2018, compiled by non-profit organisations Oxfam and Development Finance International, ranked Singapore 149th out of 157 countries - below Ethiopia and Afghanistan, and above Bhutan and Haiti.
The index measured each country's commitment to reducing inequality by looking at its social spending, tax policies and labour rights.
The report said Singapore's tax system was the worst in the world at tackling inequality because it "undertaxes wealthy individuals and corporations". The personal income tax rate for top earners here is 22 per cent, while corporate tax is 17 per cent, both of which are too low, the report argued.
Mr Lee responded: "Yes, the income tax burden on Singaporeans is low. And almost half the population do not pay any income tax.
"Yet, they benefit more than proportionately from the high quality of infrastructure and social support that the state provides."
He argued that while the report assumes high taxation and high public expenditure reflect commitment to combating inequality, it is more important to look at the outcomes achieved.
"We set out to achieve real outcomes for our people - good health, education, jobs and housing - rather than satisfy a collection of ideologically driven indicators."
For example, 90 per cent of Singaporeans own their homes, and even among the poorest 10 per cent of households, 84 per cent own their homes, he said. "No other country comes close," he added.
The Oxfam report criticised Singapore for spending "well below countries such as South Korea and Thailand" on healthcare, education and social protection.
Responding, Mr Lee noted that despite the low amount, the Economist Intelligence Unit ranks Singapore second in the world for healthcare outcomes, and the World Health Organisation ranks the Republic's healthcare system sixth in the world.
Similarly, in education, Mr Lee noted that Singapore's students consistently outperform others in international rankings.
While Singapore does not have a minimum wage - another point of criticism - Mr Lee said it does have income support for low-income workers, generous schemes for worker training and a progressive wage model for certain low-wage jobs.
Both lower-income and median households here have experienced faster income growth over the last decade than those in most countries, he added.
"That we achieved all of this with lower taxes and lower spending than most countries is to Singapore's credit rather than discredit."
The report also criticised what it called Singapore's "harmful tax practices", such as tax incentives for companies that develop intellectual property, or firms that make investments in the maritime or finance sectors. It said such incentives help corporations evade taxes.
CIMB Private Bank economist Song Seng Wun, however, pointed out that these incentives help draw substantial economic activity and investments into Singapore.
"These tax policies are meant to promote economic development and promote Singapore as a hub in areas such as finance and logistics, which in turn creates jobs," he said.
The report recommended that all countries develop national inequality action plans, which should be funded by increasing progressive taxation and clamping down on exemptions and tax dodging.
"These tax policies are meant to promote economic development and promote Singapore as a hub in areas such as finance and logistics, which in turn creates jobs," he said.
The report recommended that all countries develop national inequality action plans, which should be funded by increasing progressive taxation and clamping down on exemptions and tax dodging.
Response To Oxfam's CRI Index 2018
In Oxfam's view, Singapore's biggest failing is our tax rates, which are not punitive enough. The top income tax rate is only 22 per cent, the report says.
Yes, the income tax burden on Singaporeans is low. And almost half the population do not pay any income tax. Yet they benefit more than proportionately from the high quality of infrastructure and social support that the state provides.
The Report assumes that high taxation and high public expenditure reflects commitment to combating inequality. We think it is more important to look at the outcomes achieved, instead. The Report itself recognises this limitation.
90 per cent of Singaporeans own their homes. Even among the poorest 10 per cent of households, 84 per cent own their homes. No other country comes close.
We spend only 4.6 per cent of our GDP on healthcare, Oxfam notes. But look at the outcomes. The Economist Intelligence Unit ranks us 2nd in the world for healthcare outcomes and the World Health Organisation ranks our healthcare system 6th. Life expectancy at birth is much longer than Britain or the United States, and infant mortality among the lowest in the world.
In education, our students consistently outperform others in international rankings. In the Programme for International Student Assessment (PISA), our 15-year-olds rank first for mathematics, science and reading, and our students from the poorest families perform significantly better than their counterparts in OECD countries.
We do not have a minimum wage, but we have income support for low income workers, generous schemes for worker upskilling and a progressive wage model for certain low wage jobs. Both lower income and median households have experienced faster income growth over the last decade than most countries at similar income levels.
That we achieved all of this with lower taxes and lower spending than most countries is to Singapore's credit rather than discredit. We set out to achieve real outcomes for our people - good health, education, jobs and housing -- rather than satisfy a collection of ideologically driven indicators.
DESMOND LEE
MINISTER FOR SOCIAL AND FAMILY DEVELOPMENT
9 Oct 2018
In Oxfam's view, Singapore's biggest failing is our tax rates, which are not punitive enough. The top income tax rate is only 22 per cent, the report says.
Yes, the income tax burden on Singaporeans is low. And almost half the population do not pay any income tax. Yet they benefit more than proportionately from the high quality of infrastructure and social support that the state provides.
The Report assumes that high taxation and high public expenditure reflects commitment to combating inequality. We think it is more important to look at the outcomes achieved, instead. The Report itself recognises this limitation.
90 per cent of Singaporeans own their homes. Even among the poorest 10 per cent of households, 84 per cent own their homes. No other country comes close.
We spend only 4.6 per cent of our GDP on healthcare, Oxfam notes. But look at the outcomes. The Economist Intelligence Unit ranks us 2nd in the world for healthcare outcomes and the World Health Organisation ranks our healthcare system 6th. Life expectancy at birth is much longer than Britain or the United States, and infant mortality among the lowest in the world.
In education, our students consistently outperform others in international rankings. In the Programme for International Student Assessment (PISA), our 15-year-olds rank first for mathematics, science and reading, and our students from the poorest families perform significantly better than their counterparts in OECD countries.
We do not have a minimum wage, but we have income support for low income workers, generous schemes for worker upskilling and a progressive wage model for certain low wage jobs. Both lower income and median households have experienced faster income growth over the last decade than most countries at similar income levels.
That we achieved all of this with lower taxes and lower spending than most countries is to Singapore's credit rather than discredit. We set out to achieve real outcomes for our people - good health, education, jobs and housing -- rather than satisfy a collection of ideologically driven indicators.
DESMOND LEE
MINISTER FOR SOCIAL AND FAMILY DEVELOPMENT
9 Oct 2018
* Heng Swee Keat slams Oxfam report on inequality, saying outcomes matter
By Nur Asyiqin Mohamad Salleh, The Straits Times, 13 Oct 2018
NUSA DUA (Bali) • Outcomes, not measures of input, are what matters, Finance Minister Heng Swee Keat said yesterday, in a sharp criticism of the way a report arrived at its conclusion that Singapore was among the 10 worst-performing countries at tackling the gap between the rich and the poor.
"Since resources are limited, it is very important that we can achieve good outcomes with the required inputs and not to wrongly measure inputs, and then treat it as outcomes," Mr Heng told reporters in Bali yesterday. "That is a completely wrong analysis."
The Commitment to Reducing Inequality Index, compiled by non-profit organisations Oxfam and Development Finance International, ranked Singapore 149th out of 157 countries, saying it spends well below countries such as South Korea and Thailand on healthcare, education and social protection.
"I am very disappointed to read the Oxfam report," the minister said. "I had a very good discussion with World Bank president Jim (Yong Kim), and Jim made a very important point in yesterday's forum that it is important for us to focus on outcome and not input."
While Singapore fared dismally in the Oxfam report, it clinched the top spot in the World Bank's inaugural Human Capital Index launched on Thursday, which ranks countries according to how well they are developing their human capital.
The Oxfam report, Mr Heng said, "erroneously measured" performance by the amount of money the public sector spent.
Mr Heng, who is here for the Group of 20 Finance Ministers and Central Bank Governors Meeting and the annual meetings of the International Monetary Fund and World Bank, added that the World Bank, with its new index, hopes that countries will learn from one another how to achieve better outcomes.
"I am glad Singapore has done well. We must not rest on our laurels. We must continue to upgrade," he said. "But at the same time, we will be happy to share the lessons we have learnt over the years."
On the recent market turmoil, Mr Heng, who chairs Singapore's Future Economy Council, said that while the country needs to monitor the global situation carefully, Singapore must also "not let up in our effort in restructuring our economy, retraining our people, encouraging enterprises to develop deeper corporate capabilities so that they can compete much more effectively around the world".
The council is implementing the 23 industry transformation maps.
He noted that technological advances have given rise to new areas of growth as well. "We must plan for or think about how best we can ride on these new opportunities and prepare... our companies, people and regulatory agencies," he said.
Mr Heng also commented on a new Singapore-Indonesia deal for a US$10 billion (S$13.8 billion) local currency swap and US dollar repurchase agreement, saying it can be concluded "pretty soon".
He added: "We hope that our expression of confidence can help to stabilise the market."
Asked about leadership succession, Mr Heng said the younger fourth-generation (4G) ministers work very closely together and are "looking at a number of things we need to do for Singapore".
"So, I think our focus should not just be on succession," he said.
"Our focus should be on the agenda going forward, what is it we need to do in Singapore to ensure it remains stable and prosperous, and that we provide good opportunities for our people in various realms, whether it is education, healthcare or public housing."
The 4G team will discuss these topics in greater detail in the months to come, he added.
"I would like to assure Singaporeans that we are working very well together as a team," Mr Heng said.
The Commitment to Reducing Inequality Index 2018: Singapore in bottom 10 of Oxfam index on efforts to tackle inequality
Oxfam, DFI urge countries to do more to tackle inequality
The Straits Times, 9 Oct 2018
Oxfam, DFI urge countries to do more to tackle inequality
The Straits Times, 9 Oct 2018
The Commitment to Reducing Inequality (CRI) Index, compiled by developmental charity Oxfam and non-profit research group Development Finance International (DFI), ranks 157 governments across the world based on the extent to which they are tackling the growing gap between rich and poor in three key policy areas - social spending on public services such as education and health, progressive taxation and labour rights.
Oxfam and DFI said in the report, released on Tuesday (Oct 9), that inequality is a growing crisis that is undermining social and economic progress and the fight against poverty.
Denmark topped the index, followed by Germany and Finland.
Japan, the top-ranking Asian country, came in 11th.
The report lauded President Moon Jae-in of South Korea, which came in 56th overall, for showing commitment to tackling inequality in the country in the past year by raising tax on the richest earners, boosting spending for the poor and dramatically raising the minimum wage.
It also cited other countries that have made taken strong steps to tackle inequality in the past year.
Ethiopia, although at 131st place, now has the sixth highest level of education spending in the world. Chile, at 35th, increased its rate of corporation tax and Indonesia, at 90th, has increased its minimum wage and its spending on health, the report noted.
"These positive actions shame those governments that are failing their people," it added.
"Nigeria remains at the bottom of the CRI Index, failing the poorest people, despite its president claiming to care about inequality. Hungary has halved its corporation tax rate, and violations of labour rights have increased."
Nigeria is ranked 157th while Hungary is 29th.
It added that in Brazil, which ranked 39th, social spending has been frozen for 20 years. The report also noted that United States President Donald Trump has slashed corporation tax in the US - which took 23rd place - in what it called "one of the biggest giveaways to the 1 per cent in history".
Singapore came in 149th place - among the bottom 10 countries.
One reason, for this, Oxfam and DFI said, is because Singapore has what it called a number of "harmful tax practices". It cited among them corporate tax incentives for intellectual property development, the maritime sector, financial sector and global trading.
The report claimed such incentives "enable tax dodging" and affect the ability of other countries to collect corporate taxes.
The Singapore Government has previously maintained that the Republic's tax policies are designed to support substantive economic activities in order to create skilled jobs and build new and enduring capabilities in Singapore, and that it does not condone any tax evasion activities by corporations or wealthy individuals.
Oxfam and DFI added that although the Republic increased its personal income tax rate for top earners by 2 percentage points, the new maximum rate of 22 per cent remains very low.
Among other things, the report also chided Singapore for not having equal pay or non-discrimination laws for women. It said the Republic's laws on both rape and sexual harassment are inadequate, and noted that there is no minimum wage, except for cleaners and security guards.
The report recommended that all countries should develop national inequality action plans, which should be funded by increasing progressive taxation and clamping down on exemptions and tax dodging.
"Countries must also respect union rights and make women's rights at work comprehensive, and they should raise minimum wages to living wages."
Quality of spending more important than quantity
The Oxfam report that criticised Singapore for being "one of the worst-performing countries in the world at tackling inequality" overlooked an important point (S'pore refutes criticism over tackling inequality; Oct 10).
What is important is the quality of spending, and not the quantity.
Education and healthcare spending were among the top expenditures in Singapore's Budget this year. And, as Social and Family Development Minister Desmond Lee pointed out, Singapore is ranked second in the world for healthcare outcomes and sixth for its healthcare system.
Our low tax and meritocratic education system have raised our gross domestic product per capita from US$500 a year in 1965 to more than US$52,000 (S$71,800) a year today.
Singapore has refused to emulate the European model of a welfare state, where people turn to the government for handouts and pensions. Instead, we promote self-reliance.
Singaporeans save to take care of their needs through the Central Provident Fund. Such savings have enabled 90 per cent of the population to be home owners.
Similarly, our system of Medisave helps to ensure that Singaporeans have money set aside for their healthcare needs.
And while there is no such thing as equal healthcare, we have embraced a system of fair and practical healthcare, where people can choose either basic or premium healthcare depending on their income.
Singapore is also vigilant in ensuring that one generation will not bankrupt future generations by selfishly living beyond its means.
While the issue of inequality is a subject for serious discussion and debate, the solution to curbing it does not lie in creating a system where people get accustomed to a government providing for them.
If Singapore is among the worst in tackling inequality, why then do we rarely see people living on the streets and begging?
If there was such destitution, then that would mean that something has gone wrong with our society and that our nation has failed its people.
Cheng Choon Fei
ST Forum, 12 Oct 2018
Among other things, the report also chided Singapore for not having equal pay or non-discrimination laws for women. It said the Republic's laws on both rape and sexual harassment are inadequate, and noted that there is no minimum wage, except for cleaners and security guards.
The report recommended that all countries should develop national inequality action plans, which should be funded by increasing progressive taxation and clamping down on exemptions and tax dodging.
"Countries must also respect union rights and make women's rights at work comprehensive, and they should raise minimum wages to living wages."
Quality of spending more important than quantity
The Oxfam report that criticised Singapore for being "one of the worst-performing countries in the world at tackling inequality" overlooked an important point (S'pore refutes criticism over tackling inequality; Oct 10).
What is important is the quality of spending, and not the quantity.
Education and healthcare spending were among the top expenditures in Singapore's Budget this year. And, as Social and Family Development Minister Desmond Lee pointed out, Singapore is ranked second in the world for healthcare outcomes and sixth for its healthcare system.
Our low tax and meritocratic education system have raised our gross domestic product per capita from US$500 a year in 1965 to more than US$52,000 (S$71,800) a year today.
Singapore has refused to emulate the European model of a welfare state, where people turn to the government for handouts and pensions. Instead, we promote self-reliance.
Singaporeans save to take care of their needs through the Central Provident Fund. Such savings have enabled 90 per cent of the population to be home owners.
Similarly, our system of Medisave helps to ensure that Singaporeans have money set aside for their healthcare needs.
And while there is no such thing as equal healthcare, we have embraced a system of fair and practical healthcare, where people can choose either basic or premium healthcare depending on their income.
Singapore is also vigilant in ensuring that one generation will not bankrupt future generations by selfishly living beyond its means.
While the issue of inequality is a subject for serious discussion and debate, the solution to curbing it does not lie in creating a system where people get accustomed to a government providing for them.
If Singapore is among the worst in tackling inequality, why then do we rarely see people living on the streets and begging?
If there was such destitution, then that would mean that something has gone wrong with our society and that our nation has failed its people.
Cheng Choon Fei
ST Forum, 12 Oct 2018
How unequal is Singapore society if all have access to good, basic facilities?
It was baffling to read the report by developmental charity Oxfam, which ranked Singapore among the worst in tackling inequality (Oxfam, DFI urge countries to do more to tackle inequality; Oct 9).
Prior to Singapore's independence in 1965, many of the people here lived in slums. Unemployment and homelessness were rife, and crimes of all kinds were common.
Today, public housing has replaced the slums, and people live in homes with running water, electricity and modern sanitation.
Massive programmes have been implemented to train people and create jobs, which have helped people sustain their new lifestyles.
All Singaporeans, whether rich or poor, can simply walk or take the public transport to cinemas and shops, or to enjoy the finest food in public foodcourts. All pay the same prices and walk through the same entrances and exits.
Women can walk on the streets without fear, even late at night. Women also enjoy equal opportunities to men.
So if Singaporeans have access to all these facilities regardless of their social status, where then is the inequality here?
If one were to argue that equality means that all must be able to have access to education, food, transportation, housing and medical care, then I would say that Singapore is one of the most equal countries in the world.
Ong Soon Leong
ST Forum, 12 Oct 2018
Fighting inequality: focus on outcomes
The Straits Times, 15 Oct 2018
Two international reports that appeared back to back shine entirely different kinds of light on inequality in Singapore. Non-profit organisations Oxfam and Development Finance International chastised Singapore for being "one of the worst-performing countries in the world at tackling inequality", ranking it 149th out of 157 countries. However, the World Bank has selected Singapore as the best place for developing human capital among 157 economies that include South Korea, Japan, Hong Kong, Finland and Ireland. The Oxfam report said Singapore undertaxed wealthy individuals and corporations, and spent well below countries such as South Korea and Thailand on healthcare, education and social protection.
Its use of government spending as a measure is in contrast to that of the World Bank, which commended Singapore on investing in its human capital, which will allow children born today to fulfil 88 per cent of their potential to be productive when they turn 18, should they get a full education and enjoy good health. By focusing on certain core national areas of expenditure, Oxfam also obscures Singapore's spending in other fields, predominantly housing and healthcare and the outcomes achieved there: 90 per cent of Singaporeans own their homes, and even among the poorest 10 per cent of households, 84 per cent own their homes; healthcare outcomes here are rated highly internationally.
Consistent investment in those areas over the years helped build the overall social infrastructure that determines economic outcomes which, in turn, helped ameliorate inequality to a great degree. The World Bank captures this aspect of Singapore well by emphasising its holistic development of human capital, and by recognising that, as resources are limited, it is important to achieve good outcomes. The Singapore Story is about the way in which the country has sought to create a sustainable basis for economic growth and social cohesion since independence. That basis has been underlined in recent years of slower growth by support for low-income workers, schemes for training, and a progressive wage model for some low-wage jobs. Singapore has striven to do more with less rather than throw money after public goods.
Obviously, there is always more that can be done to deal with worrying issues such as inequality. Hence, social inclusivity must remain key to Singapore's resilience. As the country matures economically and demographically, policies will have to focus more closely on beginning earlier and existing till later in an individual's life trajectory. Pre-school education will need greater attention to equip children for the demands of the education system, while active ageing will help seniors live healthier and more fulfilling lives. Singapore should be able to deliver those outcomes.
Related
Singapore tops World Bank Human Capital Index 2018
It was baffling to read the report by developmental charity Oxfam, which ranked Singapore among the worst in tackling inequality (Oxfam, DFI urge countries to do more to tackle inequality; Oct 9).
Prior to Singapore's independence in 1965, many of the people here lived in slums. Unemployment and homelessness were rife, and crimes of all kinds were common.
Today, public housing has replaced the slums, and people live in homes with running water, electricity and modern sanitation.
Massive programmes have been implemented to train people and create jobs, which have helped people sustain their new lifestyles.
All Singaporeans, whether rich or poor, can simply walk or take the public transport to cinemas and shops, or to enjoy the finest food in public foodcourts. All pay the same prices and walk through the same entrances and exits.
Women can walk on the streets without fear, even late at night. Women also enjoy equal opportunities to men.
So if Singaporeans have access to all these facilities regardless of their social status, where then is the inequality here?
If one were to argue that equality means that all must be able to have access to education, food, transportation, housing and medical care, then I would say that Singapore is one of the most equal countries in the world.
Ong Soon Leong
ST Forum, 12 Oct 2018
Fighting inequality: focus on outcomes
The Straits Times, 15 Oct 2018
Two international reports that appeared back to back shine entirely different kinds of light on inequality in Singapore. Non-profit organisations Oxfam and Development Finance International chastised Singapore for being "one of the worst-performing countries in the world at tackling inequality", ranking it 149th out of 157 countries. However, the World Bank has selected Singapore as the best place for developing human capital among 157 economies that include South Korea, Japan, Hong Kong, Finland and Ireland. The Oxfam report said Singapore undertaxed wealthy individuals and corporations, and spent well below countries such as South Korea and Thailand on healthcare, education and social protection.
Its use of government spending as a measure is in contrast to that of the World Bank, which commended Singapore on investing in its human capital, which will allow children born today to fulfil 88 per cent of their potential to be productive when they turn 18, should they get a full education and enjoy good health. By focusing on certain core national areas of expenditure, Oxfam also obscures Singapore's spending in other fields, predominantly housing and healthcare and the outcomes achieved there: 90 per cent of Singaporeans own their homes, and even among the poorest 10 per cent of households, 84 per cent own their homes; healthcare outcomes here are rated highly internationally.
Consistent investment in those areas over the years helped build the overall social infrastructure that determines economic outcomes which, in turn, helped ameliorate inequality to a great degree. The World Bank captures this aspect of Singapore well by emphasising its holistic development of human capital, and by recognising that, as resources are limited, it is important to achieve good outcomes. The Singapore Story is about the way in which the country has sought to create a sustainable basis for economic growth and social cohesion since independence. That basis has been underlined in recent years of slower growth by support for low-income workers, schemes for training, and a progressive wage model for some low-wage jobs. Singapore has striven to do more with less rather than throw money after public goods.
Obviously, there is always more that can be done to deal with worrying issues such as inequality. Hence, social inclusivity must remain key to Singapore's resilience. As the country matures economically and demographically, policies will have to focus more closely on beginning earlier and existing till later in an individual's life trajectory. Pre-school education will need greater attention to equip children for the demands of the education system, while active ageing will help seniors live healthier and more fulfilling lives. Singapore should be able to deliver those outcomes.
Related
Singapore tops World Bank Human Capital Index 2018
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