TR Emeritus

Jan 20, 2013

http://www.tremeritus.com/2014/01/20/public-education-spending-4-3-less-than-gdp-growth/

I refer to the article “President Tony Tan: Strong defence needed” (TR Emeritus, Jan 19).

Defense spending consumes 20% of the Budget?

It states that “In last year’s budget for FY2013, a total of S$12.34 billion (USD 9.7 billion) was allocated to MINDEF [Link].

Comparing with some of the regional countries, Singapore spends the biggest defence dollar in the region. Information from the Stockholm International Peace Research Institute (SIPRI) reveals [Link]:

In terms of defence spending as a percentage of GDP, Singapore is also ahead of those of regional countries:

My first thought when I read the above was – is our high defense spending done at the expense of other areas?

Education spending?

If we ask Singaporeans as to what in their view is arguably, the most important aspect of their lives – many may say that it is education – their own education and the education of their children.

Well, our Budget expenditure for education, at $11.6 billion is the second highest item of expenditure – $0.7 billion less than defence.

Next, I looked at how much our spending in education has increased. From 2002 to 2013, it increased from $6.8 to $11.6 billion.

On a per capita basis, using the resident population of 3.38 and 3.84 in 2002 and 2013, respectively – it is $2,008 and $3,026 per capita spending on education, respectively.

1.5% real growth in education spending? 

This is an increase of 51% or about 3.8 per annum. However, since inflation increased by about 28% from 2001 (CPI 88.4) to 2012 (CPI 113.1) (2013 CPI is not available yet), or about 2.3% per annum – does it mean that the real growth in education spending was about 1.5% per annum.

But GDP growth was about 86.7% from 2001 ($163 billion) to 2002 ($305 billion) (2013 GDP is not available yet), or about 5.8% per annum.

Real education spending growth 4.3% less than GDP growth?

So, why is it that the real increase in education spending is about 4.3% (GDP 5.8 -education 1.5%) less than GDP growth in the last 11 years or so?

Are there any other countries in the world that spend so much less on education spending relative to GDP growth?

Perhaps the above may be one of the possible reasons why Singaporeans are now being told that a tertiary education may not be so important after all.

Leong Sze Hian

Leong Sze Hian is the Past President of the Society of Financial Service Professionals, an alumnus of Harvard University, Wharton Fellow, SEACeM Fellow and an author of 4 books. He is frequently quoted in the media. He has also been invited to speak more than 100 times in 25 countries on 5 continents. He has served as Honorary Consul of Jamaica, Chairman of the Institute of Administrative Management, and founding advisor to the Financial Planning Associations of Brunei and Indonesia. He has 3 Masters, 2 Bachelors degrees and 13 professional qualifications. He blogs at www.leongszehian.com.