I refer to the article “Singapore must not become a ‘yardstick society’: Chan Chun Sing” (Channel NewsAsia, Jan 23).
Singapore’s subsidy system
It states that “Mr Chan then related how he questioned Singapore’s subsidy system when he first became a minister. “It used to be that we gave every child the same subsidy. I asked, ‘Why is this so? Is this the best way?'” he said. “A S$3 subsidy to someone who earns S$10,000 is a rounding error. A S$300 subsidy to someone who earns S$10,000 is a rounding error, but for someone who earns S$1,000, it makes a significant difference.”
Whilst we are on the subject of “subsidies” in Singapore – let’s take a deeper look at arguably, how they work.
ES sent me a 5 March 1987 Straits Times (page 10) article “Ministerial statement on higher fees for NUS, NTI”.
Tuition fee only $1,200 in 1986/87?
According to the article, the tuition fees at NUS in 1986/87 for non-Medicine courses was $1,200, and $1,300 for Medicine.
The tuition fees for AY2015/2016 at NUS is now $7,950, $9,350, $12,400 and $25,400, for Arts & Social Science, Business, Law and Medicine, respectively.
Increase of as much as 11% p.a.?
This translates into an annualised increase of about 6.7, 7.3, 8.4 and 11.1 per cent respectively, for the 29 years from 1986/87 to 2015.
Versus 1.9% inflation?
In contrast, inflation for the 28 years from 1986 to 2014, was only about 1.9 per cent per annum.
Versus only 1.4% Govt spending per student?
The article also said “Government was spending each year $14,400 to educate a student at the university level”. Now, Government Recurrent Expenditure on Education per Student for University was $21,779 in 2014/15.
So, does this mean that “Government spending each year to educate a student at the university level”, only increased by an annualised rate of about 1.4 per cent over the 29 years, from 1986 to 2015?
Versus huge Budget surpluses?
Why did we accumulate billions of dollars of Budget surpluses almost every year, over the years, and spent so much less on university students, relative to tuition fees increase?
In this connection, according to the Department of Statistics Monthly Digest of Statistics October 2015 – we had a cash Budget surplus under IMF fiscal reporting guidelines of $25.3 billion in FY2013 as well as FY2012.
Versus 6.7% p.a. GDP growth?
Moreover, GDP growth was about 6.7 per cent per annum, over the 28 years, from 1986 to 2014.
Why wasn’t GDP growth translated into more spending on university students?
No tuition grant?
Now what may be particularly interesting is that there appears to be no mention of any tuition grant in 1986/87.
Today, the tuition grant may be about $21,100 per year, as the tuition fees before grants is $29,050.
Tuition increased 11.6% p.a.?
So, if we factor in today ‘s tuition grant, does it mean that gross tuition fees may have ballooned at an annualised rate of about 11.6 per cent, from $1,200 in 1986/87 to $29,050 (tuition fee $7,950 + tuition grant $21,100) now in 2015?
Tuition grant like HDB Market Subsidy?
Or could it be that the tuition grant may be akin to the HDB Market Subsidy Pricing policy, which calls the price for new HDB flats as a “subsidised” price? – “Subsidised” tuition fee after the tuition fee grant?
By the way, when was the concept of “tuition grant” or HDB “market subsidy” introduced?
Leong Sze Hian
