We refer to the article “Median household income rose to $7,870 last year, inequality down” (Straits Times, Feb 19).

Govt transfers reduce the Gini?

It states that “If government transfers and taxes are taken into account, the Gini coefficient for 2013 would be 0.412.

On average, households got $3,444 in transfers such as GST Vouchers and Medisave top-ups per household member.

More in transfers than income from work?

But those in the smallest flats got the most. Households in one- and two-room Housing Board flats received more in transfers than they earned from work.

Their annual income from work per household member was $8,264. compared to the $8,631 in transfers per household member.”

Got improve your “quality of life” or not?

One often used evaluation criteria on Government Transfers and taxes, is to look at whether people experience an increase in their quality of life.


For example, how can the entire Workfare payout be counted as a Government transfer, when the bulk of it is to the CPF and not in cash. Does a transfer to your CPF Special or Medisave accounts improve your “quality of life”?

Rebates on utilities, rental and S & CC?

Do “Rebates on utilities, rental and service and conservancy charges” really improve your “quality of life”, when such charges may increase more than the rebates?

Post-secondary education account?

Do “Post-secondary education account top-ups and matching grants” really improve your “quality of life”, when much of it may only be used in the future, when fees may have risen such that they simply “eat up” the amounts credited to the accounts now?

CPF Deferment and CPF Life Bonus?

Do “CPF Deferment Bonus from 2008 onwards, CPF Life Bonus and Voluntary Deferment Bonus from 2009 onwards” really improve your “quality of life”, when such sums may arguably only reach your pockets as cash in your very advanced years, arguably after your own CPF funds have been exhausted?

Property tax rebates?

Do “property tax rebates” really improve your “quality of life”, when the increase in property tax may be more than the rebates?

In this connection, I would like to also refer to the article “Progressivity ‘not for its own sake’” (Straits Times, Mar 8).

Tax system helps Singaporeans have better lives?

It states that “The true test of Singapore’s tax system is not how progressive it looks, but how it actually helps Singaporeans have better lives”.

“Taxes” that are Uniquely Singapore?

I think the problem with the debate as to whether lower and middle-income Singaporeans pay relatively less taxes and get more benefits in return, may be that Singapore may arguably be unique in some of the ways in which we define taxes, or rather what are not taxes, and what constitutes benefits, compared to other countries.

CPF tax?

For example, paying just 2.5 per cent interest on the CPF Ordinary Account, may be considered as the mother of all taxes, since historically, some of our CPF funds may have contributed to Temasek’s 16 per cent per annum returns in the last 39 years, and the Government Investment Government’s (GIC) about six per cent per annum returns in US$ over the last 20 years or so.

Are there any other countries in the world that pay such a low interest on the people’s pension funds?

HDB tax?

Which other countries in the world makes so much money on its public housing by linking ever rising prices to market prices, instead of the costs of building them?

Is this not like another “indirect’ tax on Singaporeans?

Healthcare tax?

With public healthcare spending at about 1.4 per cent of GDP in the last fiscal year, which is one of the lowest in the world, isn’t the about 67 per cent of private healthcare spending against the about 33 per cent of public healthcare spending, in an environment of relentless rising healthcare costs, like another ‘indirect” tax?

Other advanced countries may appear to have higher taxes, but the “indirect” taxes described above, would be absent or have minimal impact on the cash-flows and out-of-pocket ecpenses of its citizens.

Benefits that are Uniquely Singapore?

Much of what we count as benefits may not be so, in other countries.

Healthcare subsidies?

For example, how can our up to 80 per cent healthcare subsidies be a benefit, when the lower-income end up paying our so called “subsidised” healthcare fees that are even higher than Hong Kong and Malaysia’s “unsubsidised” public healthcare fees?

HDB subsidies?

How can HDB housing grants be a benefit, when the prices of HDB flats invariably rise more than the increase in the grants over the years?

Also, if one downgrades or upgrade to a BTO flat, a cash resale levy (versus the housing grant which is CPF) has to be paid. This may be akin to a deferred tax on what was previously counted as a Government transfer.

Property tax progressivity?

As to “While the Budget announced last month (2013) increased the progressivity of the tax system by raising taxes on the wealthy on property”, is it not somewhat contradictory in progressivity, to have raised the property tax of 3-room HDB flats arguably, by as much as 222 per cent. (“HDB rentals up 10%, but property tax up 118%?“, Nov 27, 2012)

CPF Medisave top-ups are benefits?

How can CPF Medisave top-ups be counted as a benefit, when most of it may be consumed by rising healthcare costs? In other countries, healthcare affordability may be maintained such that there may be no need for “top-ups”.

Better lives = world’s unhappiest people?

Perhaps a good indicator of “The true test of Singapore’s tax system is not how progressive it looks, but how it actually helps Singaporeans have better lives”, is the article “Singaporeans unhappiest people in the world: poll” (xinmsn News, Dec 20, 2012), which said that “So apparently we’re not just “emotionless”, we’re the world’s unhappiest lot as well”.

Raising incomes is best strategy?

With regard to the article “Best aid strategy for middle-income is rising incomes: DPM” (Straits Times, Mar 8), this consistent rhetoric over the years don’t seem to match the statistics that the estimated real median wage growth per annum in the 1990s was about 16 times more than the last 12 years or so. (“Real wage growth p.a. in 1990s was 16 times more than last 12 years?“, Mar 5)

Reduce charges is “benefits”?

As to “would save $730 from tax rebates and $530 through special transfers and other changes, such as a reduction in the maid levy”, since the maid levy is like a tax, how can lowering it for certain families be counted as a benefit? Like this, we can keep increasing all kinds of charges and taxes, and then when we reduce them – count them as benefits – benefits may then appear to be rising all the time!

Uniquely Singapore!

Roy Ngerng and Leong Sze Hian

About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.