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Uniquely Singapore: Charity – F1 or F9? Helping the poor?

Posted by theonlinecitizen on November 22, 2007

By Leong Sze Hian

After watching the Cancer Charity Show, my friend’s sister, a 50 plus housewife, was so depressed, that she jumped from the 10th floor of her HDB flat, the day after the show.

As I watched elderly sick Singaporeans pleading during the show, that they have no money for medical treatment, medicine, and one lady who said that she did not even have 10 cents, the first thought that came into my mind, was isn’t there Medifund to help those who cannot pay for medical fees and Comcare to help the poor ?

Since the reason given for raising the GST, was to help the poor, and the hike has already been implemented on 1 July, why do we keep hearing of pleas for help from the sick and the needy ?

I would like to suggest that a detailed breakdown be given of what and how the estimated $ 1.5 billion from the GST hike will be used to help the poor.

Too much resources for fund raising?

According to a ChannelNewsAsia report:
“Fifteen groups sharing different religious faiths came together as one on Sunday to raise funds in a big way for community projects in Aljunied GRC.

At the community bonding carnival in Hougang, each of the groups, including the Singapore Buddhist Lodge and Jamiyah Singapore, set up a stall either selling food or organising games for residents.

A maximum of S$350,000 in tickets was sold and the proceeds will go towards new facilities for the GRC’s Bedok Reservoir-Punggol division. The carnival is the first in a series of fund-raisers involving the religious groups in the constituency.

Beneficiaries include the 19-year-old Punggol Community Club – expected to cost millions to refurbish – a Dragon Boat House at Bedok Reservoir Park and a kidney dialysis centre.”

Are we directing too much resouces in our fund raisng activities for “new facilities for the GRC”, refurbishing a Community Club, Dragon Boat House, etc, at the expense of funds for the needy?

All of the above manifestations may be attributed to the root cause of the problem, which is the widening income gap.

The ever-widening income gap

In this connection, I refer to the article “Bigger but unequal pay gains seen for ‘08” (BT, Nov 19).

It states that “Manual workers, again at the bottom of the payout scale, are likely to get a merit raise of 3.7 per cent in 2008, compared to 3 per cent in 2007”.

With increasing inflation expected to hit 4.5 per cent by 2008, the median wage increase for manual workers may in effect be a negative increase in wages in real items. This may further contribute to the widening income gap, which was one of three major challenges facing Singapore as highlighted by Senior Minister Goh Chok Tong recently.

In this connection, according to the Reuters news report “Singapore’s economic boom widens income gap” of 9 November, “the proportion of Singapore residents earning less than S$1,000 (US$690) a month rose to 18 percent last year, from 16 percent in 2002, central bank data released late last month show… and Singapore’s Gini coefficient, a measure of income inequality, has worsened from 42.5 in 1998 to 47.2 in 2006, and is now in league with the Philippines (46.1) and Guatemala (48.3), and worse than China (44.7), data from Singapore’s Household Survey and the World Bank show”.

I refer also to media reports that Taiwan is becoming an M-shaped society because of the widening income gap, and that the number of Singapore millionaires could soar to 29,000 by 2011.

Last year, the top 20 per cent of Taiwanese households earned six times more than the bottom 20 per cent.

In contrast, using data from the Department of Statistics’ Key Household Income Trends 2006, the top 20 per cent of households in Singapore, earned about 12 times more than the bottom 20 per cent, based on the “Average Monthly Income from Work Per Household Member Among Employed Households by Decile”.

Does the above mean that the income gap is about 6 times more than the Taiwanese ?

In Taiwan, the average household at the top earned $ 82,300 (NT $ 1.82 million), whereas it was $ 13,700 (NT $ 304,000) for the average household at the bottom.

In comparison, Singapore’s top decile by average monthly per household member was $ 83,880, versus $ 3,600 for the bottom decile.

From the above, if we assume three members per household, the top earned $ 251,640 and the bottom $ 10,800.

So does it mean that we earn about 205 per cent more at the top, and about 21 per cent less at the bottom, when compared to the Taiwanese, on this basis ?

(Note : As the household income data is not given in decile format, I have used the per capita household income data in the above analysis. This analysis has been quite difficult because of the selective availability of data for different time periods.)

Helping the poor?

In Taiwan, some $ 11.3 billion (NT $ 250 billion) was handed out to the poor in assistance schemes that included monthly subsidies of up to $ 270 (NT $ 6,000) for the elderly.

In Singapore, about 3,000 destitutes get $ 290 a month in welfare. How much do the elderly poor in Singapore get a month ?

Since the reason given for raising GST was to help the poor, how much was spent last year helping the poor, and how much will be spent this year following the GST increase ?

As a point of comparison, Singapore’s per capita Gross National Income was $ 45,353 in 2006, compared to Taiwan’s, estimated to be about $ 42,000.

The poor in Taiwan pay $ 18 (NT $ 400) a month for a 36-sq-m rental flat.

In Singapore, a 1-room HDB rental flat starts at $ 44.50 ($ 26 rental plus $ 18.50 Service and Conservancy Charges) for households earning not more that $ 800 a month. Those earning more pay higher rentals.

In view of the above comparative statistics, I would like to suggest that we review some of our policies like the extra 1 per cent interest on the first $ 60,000 of CPF, because the poor may stand to gain less relative to the rich, as they may have lower CPF balances. The $ 700 million that the extra 1 per cent will cost, may be better directed to the poor instead.

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13 Responses to “Uniquely Singapore: Charity – F1 or F9? Helping the poor?”

  1. James Chia said

    I feel the government prefers footing the bill for tangible things like new facilities to helping the needy. The facilities constructed will be there forever. It acts like a permanent publicity for the government to show to us that they are doing a lot of things to improve our lives. Helping the poor is, however, a more subtle deed with limited publicity value. The poor will not walk around in t-shirts with slogan telling everyone the government has helped them.

  2. xtrocious said

    Hi Mr Leong,

    just a couple of clarifications on your excellent article…

    You said

    In Taiwan, the average household at the top earned $ 82,300 (NT $ 1.82 million), whereas it was $ 13,700 (NT $ 304,000) for the average household at the bottom.

    In comparison, Singapore’s top decile by average monthly per household member was $ 83,880, versus $ 3,600 for the bottom decile.

    The numbers look a bit high for a monthly number, especially at the bottom decile, when GCK himself once said that Singaporeans who earned S$3200 per month is considered “well off” or something to that effect.

    I suspect the numbers are annual average wages.

    Secondly, you said

    From the above, if we assume three members per household, the top earned $ 251,640 and the bottom $ 10,800.

    So does it mean that we earn about 205 per cent more at the top, and about 21 per cent less at the bottom, when compared to the Taiwanese, on this basis ?

    I am not sure how you got 205% for the top because if I assumed correctly, you basically divided ($251,640-$246,900)/$246,900, but that gave me just 1.9%.

    Cheers

    Xtrocious

  3. Gary Teoh said

    Government said increase GST is to help the poor, but how come we still notice yearly the charity shows to beg for donation,Is it the government’s help to the poor isn’t enough ? It is correct we dont need this 1% in CPF increase, it is better to channel the money to help the poor

  4. Eddie Loh said

    The poor includes our super talent MPs and Ministers who will turn to corruption if their salary is not increased by certain %tage. So it is better to pay them the market rate otherwise all will leave for private sector.

    What is left of Singapore then? All our women will become foreign talents i.e. domestic maid in foreign countries. Better don’t play play as our government is always right in her decisions. Even if it turn out wrong, the problem still lies with the common peasants who lack helicopter vision.

  5. Leong Sze Hian said

    Hi Xtrocious

    Yes, I think you are right, it should be the annual, not monthly figure – thanks very much for pointing out my error

    The 205% is derived by $83,880 x 3 persons per household = $251,640 divided by $82,300 = 3.05 (205%)

    Cheers

    Leong Sze Hian

  6. Daniel said

    PM Lee’s said “Singapore opposed sanctions against Myanmar, saying they only serve to hurt the impoverished people of Myanmar”. However, it seems ironics when we know that they don’t even really care about their own poor people. Huh,..Is he talking nonsense ?

  7. meesiam maihum said

    We all know that the reason for increasing the GST to 7% is not really to ‘help the poor’ but to offset the corporate tax reduction which the MM has already admitted. It is incredible that LHL would use such a lame excuse for raising GST.

  8. James Michael said

    Isn’t it suprising to see there are beggars in Spore,i mean if the govt is concerned about helping poor people,where does all the money go to?Increase GST,prices go up,who’s benefitting from all these?The rich will become richer,the poor will be poorer!After all,we call ourselves a first-world,first class country,sounds more like nation with paupers & peasants!

  9. Gary Teoh said

    I think singapore advanced too fast,until so many people suffer because of first world economy.The middle income will be affected most

  10. xtrocious said

    Hi Mr Leong

    no worries…

    just curious on this bit as well…

    The 205% is derived by $83,880 x 3 persons per household = $251,640 divided by $82,300 = 3.05 (205%)

    Erm, why is the numerator multipled by 3 and not the denominator?

    Anyway, I believe a better representation of household may just consist of 2 working adults, as opposed to 3 in your example…

    Cheers

    Xtrocious

  11. xtrocious said

    Hi Mr Leong

    My bad – I just noticed that Taiwan’s data is per household whereas Singapore’s one is per household member…

    Cheers

    Xtrocious

  12. Leong Sze Hian said

    Hi Xtroxious

    I used 3 members because I understand that the average no. of members per household in Singapore is 3.6

    Cheers

    Leong Sze Hian

  13. xtrocious said

    Thanks Mr Leong

    Just splitting hairs but IMHO I think the richer families tend to be smaller and they tend to live away from their parents…

    Besides, it would be quite difficult to imagine having 3 high income earners in a family – for their offspring to earn above S$80k per year, he/she must be around 35? That would put the parents are 60 or older.

    Cheers

    Xtrocious

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