MSF Inequality paper: Full of ‘rubbish’?

Marina Bay, Singapore – Photo: Leonid Yaitsky via Flickr, used under Creative Commons License (By 2.0)Marina Bay, Singapore – Photo: Leonid Yaitsky via Flickr, used under Creative Commons License (By 2.0)

Why do we continue to be in denial that inequality is high in Singapore?

I refer to the article “Singapore system has done better than other countries in improving social mobility: MSF paper” (Straits Times, Nov 1).

It states that ” The Singapore system is not perfect in improving the lives of the low-income and vulnerable families, but it has performed better than most countries, said the Ministry of Social and Family Development (MSF) in a first-of-its kind report released on Thursday (Nov 1).”

As to “In an occasional paper that illustrates the efforts and the progress Singapore has made in improving social mobility, the ministry said many of its measures have worked well in boosting progress and social mobility” – the fact that this is “a first-of-its kind report”, may arguably be quite telling – that we have been ‘sleeping’ or ‘in denial’ until the recent release of the Inequality Index which ranked Singapore, 149th out of 157th countries.

We may arguably, still be ‘in denial’ as every statement from a member of Government and every government ministry have been to defend ourselves, against the report.

In this connection, “dismissing suggestions that the recent move to set up a taskforce to help children from disadvantaged families was reactive in nature, Second Minister for Education Indranee Rajah stressed on Thursday (Nov 1) that the Government had recognised the problem of inequality early on” (“Taskforce to help children from disadvantaged families not a reactive move, says Indranee‘, Today, Nov 1) – may arguably, be so obvious – if the setting up of the task force is not reactive – why is it that such a task force has never been done before?

With regard to “”But the same measures now bring new challenges that we need to address, to ensure that stratification is not enshrined and social mobility continues to be spurred,” it added.

“But we must not forget that trade-offs are unavoidable in social policy, and all too often good intentions have led to counterproductive results” – let’s look at some of the trade-offs.

In this regard, and in respect of “Still, when it comes to educational progress, the results are encouraging, according to the 31-page paper released by MSF.

For example, nine in 10 students from the bottom 20 per cent of households by income made it to post-secondary education today, up from five in 10 students 15 years ago” – this is the trend in practically every country in the world.

I wonder if one can find any country in the world that has not progressed in this area, in the last 15 years.

As to “And 15-year-olds here from disadvantaged backgrounds have performed consistently better, in areas such as maths and science, than those of similar backgrounds in other developed countries, going by the Programme for International Student Assessment (Pisa) test” – the fallacy of this is that what really matters, arguably, may be the difference between the “lower” and “higher” students in a country (Singapore), and not the difference between the “lower” students in two different countries (Singapore versus other countries).

With regard to “Education is among several areas highlighted in the paper, which also lists government schemes and policies in employment, home ownership, and healthcare to improve the lot of the vulnerables.

It said the employment rates for Singaporeans and permanent residents have also risen in the past decade, especially for the older workers. For workers aged 65 and older, the employment rate rose from 14.4 per cent in 2007 to 25.8 per cent last year” – why is there always selective disclosure of the jobs’ data, year after year for so long?

For example, since the data can be disclosed for including and excluding Foreign Domestic Workers (FDW), and the unemployment data into Singaporeans, PRs and foreigners – there is absolutely no reason why the data cannot be broken down for the employment growth to Singaporeans, PRs and foreigners?

In respect of “The Workfare Income Supplement (WIS) has been one of the most effective schemes in getting people, especially the older workers, to work, the report noted. The WIS scheme encourages low-wage workers to work, by providing Central Provident Fund top-ups and cash supplements. For example, a 60-year-old earning $1,200 a month gets $300 more through the WIS” – do we not realise that we have the lowest 10th and 20th percentile wages (excluding employer CPF contribution) among all the developed countries in the world?

As to ‘Home ownership is another area Singapore can be proud of.

Some 87 per cent of Singaporeans in the bottom 20 per cent by resident household income own their homes, which is significantly higher than in other cities” – what’s the point of a very high home ownership rate when HDB prices start to decline when they are more than 40 years old, until zero at the end of the 99-year lease – wiping out all the CPF and cash used for the HDB flat?

With regard to “Besides, aided by significant housing grants and affordable prices of flats, more poor families are moving out of heavily subsidised rental flats to become home owners.

There were about 500 such families in 2013 and this doubled to almost 1,000 households last year. The numbers applying for a rental flat have also fallen by 44 per cent in the same time period (between 2013 and 2017)” – isn’t the increase in the number of 1 and 2-room HDB flats a better measure?

In this connection, “The stock of 1- and 2-room HDB rental flats was cut from a peak of 135,000 units in 1982 to a low of just 46,000 units in 2008″  – does the fact that rental flats have increased to about 60,000 now, indicate that we may now have more lower-income Singaporeans who cannot afford to buy HDB flats – and thus have to rent under HDB’s rental scheme – given that the number of such flats have increased by about 18,000 or 43 per cent, from 42,000 in 2007 to about 60,000 now?

In respect of “The Gini coefficient after taxes and transfers, a measure of income inequality, has declined from 0.439 in 2007 to 0.401 in 2017. The lower the score, the more equal a society is.

Using the Organisation for Economic Cooperation and Development method, Singapore’s Gini coefficient, before taxes and transfers, dipped from 0.438 in 2007 to in 2017. After taxes and transfers, the decrease is from 0.388 in 2007 to 0.356 in 2017.

Mr Leonard Lim, research associate at the Institute of Policy Studies, pointed out that Singapore’s Gini coefficient, after taxes and transfers, is lower or comparable to developed countries like the United States – a testament to the Government’s efforts to redistribute income” – While the Gini coefficient for Singapore seems to be lower than New York, London and Hong Kong, much of the “transfers” may not be disposable income that can be used.

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.