~ By Roy Ngerng ~
At the Economic Society Singapore (ESS) Annual Dinner 2012, Prime Minister (PM) Lee said “I do not believe Singaporeans would be willing to pay the taxes that Scandinavians pay, or that our economy could be competitive at such heavy tax rates.” I do not debate the economic soundness of having low tax rates to increase competitiveness, based on perceived lower costs.
However if we were to look at the wages of low wage earners, which Tommy Koh had shared previously, even after deducting personal income tax and Value Added Tax/GST, low wage workers in Singapore earn substantially much less than those in countries with high taxes. The assumption that higher taxes will result in lower disposable incomes is thus flawed. When comparing the cost of living ranking, Singapore ranked 8th globally in 2011, which suggests an even higher burden on the lower wage workers to survive on their low wages.
As PM Lee had pointed out, Singaporeans would not be willing to pay higher taxes, as would most people not, given a choice. But the Nordics have worked out that even with higher taxes, their standard of living does not decrease, and their disposable income is still manageable as their governments have offset the higher taxes. In Singapore’s case, the government has championed low taxes but suppressed wages as well, with the reasoning that our taxes are low and thus low wages. But clearly, the wages of low wage workers are in no way comparable and thus the considerably lower standard of living. The question we have to ask ourselves is, is this humane?
PM Lee had pointed out that Singapore’s GDP per capita is ranked 11th worldwide at $50,123. However, what he does not mention is our ranking in the Gini Index is 30th in the world our ranking in the Gini Index is 30th in the world. This means Singapore’s wealth is unevenly distributed and concentrated among the higher income groups. In comparison, the Nordic countries have one of the fairest income distributions in the world. In the same 2011 report by Global MetroMonitor, Singapore is ranked at the bottom of 200 countries, with the lowest change in income of -8.9%, compared to the previous year.
If our government’s argument is that we should not follow the Nordic model of social welfare because it is unsustainable, the statistics clearly show otherwise. Not only are the wages of our lower income workers (after tax deductions) lower, their GDP per capita is similarly lower, the inflation rate higher and the income inequality wider. If it is indeed the case that the social welfare model is not a desirable, then the Nordic countries should perform less admirably than they are doing. But their humane approach has obviously reaped benefits for their people with more equality. Is our government’s principle of meritocracy one that actually benefits citizens as a whole, or does it perpetuate inequality because of the association between meritocracy and higher incomes? The bigger question is, has the government chosen to adopt the Nordic model when it pertains to economic growth but ignored the social aspects of their model? The Nordic countries have shown that you can have a high standard of living with a high standard of economic well-being and social development – they are not mutually exclusive. Why the over-zealous attitude towards economic dynamism at the expense of social, mental and emotional well-being?
I am not suggesting that my government is doing a bad job. In fact I sincerely appreciate how our government has managed to improve our standard of living since Singapore gained independence. It is very easy for Singaporeans to travel abroad and understand how the corruption and crime that reeks in other countries is not replicated in Singapore.
What I am interested in though, is how the government can treat Singaporeans with a different mind-set. PM Lee said, “Our approach has been firstly, to promote enterprise and create wealth and jobs, rather than merely redistribute a smaller pie. Secondly, to foster social cohesion, by investing in every child and helping all Singaporeans equip themselves for good jobs and own their homes. Thirdly, to encourage self-reliance… saving for one’s future, rather than a sense of entitlement.” I do not think that many Singaporeans would dispute this as it has served us well. PM Lee added, “every society has to strike a balance between individual rewards and social equity and thus the targeted interventions to benefit the lower income earners.” Again, I do not dispute this.
But I would like our government to be less fixated on quantitative economic aspects and look at our qualitative social and psychological well-being. The growth achieved in the early years of nation-building required Singaporeans to be focused on economic growth and so education was geared primarily for that purpose. Priority was given to those who chose the sciences and mathematics because this it would spearhead economic growth. But look at where this has taken us as a society, as people; the focus on personal income generation, so as to increase national wealth, has inevitably resulted in people pursuing self-motivated goals. We have become more self-centred with our kiasu (afraid to lose out) attitude, pushing ahead at the expense of others. Is it any wonder that we complain that our young people show little respect and care for others, or that more traffic accidents happen on the roads because drivers deem they have the right of way over others? Is it any wonder why drivers and cyclists are constantly at loggerheads because each party feels they have the right of way? Is it any wonder that we choose to discriminate against people of other nationalities or object to having elderly care centres in our estates?
This is further compounded by Singaporeans feeling that they are unable to speak out about policies or social issues that matter to them. The effective policies of the government’s early approaches to Singapore has created a fear towards responding to political and social issues and even though the climate has changed, Singaporeans have yet to learn the skills to critique effectively on issues, because we have been told not to. We have been socially engineered to not have an opinion on things that matter and the government knows this. Because we lack passion for what we believe in, we lack the creativity to find solutions to manage them. Is it any wonder then that Singaporeans have developed complaining as a skill to deal with issues, instead of finding solutions? Complaining has evolved to become our tool of expression, which does not put us at risk, but gives us an outlet to vent our unhappiness. But we have seen the effects of complaining. We can see on any forum or discussion pages that complaints have tend to veer towards managing our internal fears. But are we able to look at each issue that occurs broadly so as to understand how to manage them and how to manage our attitudes towards them?
Have we taken “self-reliance” a bit too far, PM Lee?
I want to clarify that I am not asking for the government to provide quantitative social welfare benefits, at the expense of economic growth. What I hope is that we can look at Singaporeans, not only as economic nodes of production, but also as humans in our own right. Our government has stated time and again, people are the main and strongest resource of Singapore. However, how do we understand people as resources? It is not enough just to equip us with “good jobs and (to) own (our homes)”. Allow us to grow emotionally and psychologically, enable us to manage ourselves. When we give lower wage workers a low wage, what are we saying to them – You fulfil an economic role of little significance towards the economy and we do not value you as a human, thus we pay you what you deserve, a human of little value. But is this right? When Singaporeans complain, they get angry and perpetuate this anger. Is this what we want? The drive for self-preservation creates an anger that can motivate us towards being steadfastly focused on increasing economic growth, but at what expense?
PM Lee said, “only when citizens accept the political system as legitimate, and economic order as fair, will they give the Government the mandate to run Singapore in their best interests. And only with this mandate can the Government do the best for Singapore and all of us.” But it works both ways. What if Singaporeans do not think you are working for our best interests? What if our best interests is not the same as the government defines it? What if, after 46 years of independence, our best interests have changed? It does not mean we take, what the government has done over the years to bring us here, for granted. It means that we have shared in the progress with the government and we hope that our government will keep progressing with us.
Singaporeans are unhappy. Why? On the surface, it might seem that we are unhappy because of rising costs, incomes that have not kept up with inflation and higher housing costs. These are real issues – and the verdict is out as to whether the government is responding quickly and adequately. What is not so obvious is that Singaporeans could be unhappy because we feel that our basic rights as humans are undermined. I want to live, I want to be human. I want to be happy, not by having lots of money but knowing at the end of the day, I have done something that gives me a genuine sense of achievement.
For this to happen, Singaporeans should no longer treated just as economic nodes of production. Trust us to be passionate about issues and allow us to speak up without fear or favour. Trust that even with this passion, Singapore will not derail from economic growth because we strongly believe in what we do, that ultimately, we want the country to grow. Trust and work together with us to make Singapore truly our home. If you fear we cannot critique intelligently, teach us. Only by working together with your fellow Singaporeans will we believe the mandate given to you is one that is of our best interests.