What the Budget means for a lower-income Singaporean?

By Leong Sze Hian

My name is John (not my real name). I am a 33 year old Singaporean worker earning $750 a month.

Disposable income drop?
Before the budget announcement, my take-home pay, after my 16 per cent employee CPF contribution was $630.

After the budget’s changes, with the eventual full restoration of my employee CPF contribution rate from 16 to 20 per cent, my take-home pay will be reduced by $30 to just $600.

To me, $30 less a month may make it even much harder for me to make ends meet.

How many low-income workers?

In this connection, according to the article “Leveling the playing field for workers” (Sunday Times, Dec 9) -

“It is no coincidence that most local low-wage workers toil in industries that depend on foreign migrants.

As of earlier this year, there were around 110,000 locals who earned less than $1,000 a month – excluding employer’s CPF contributions – despite working full-time, though their numbers have dwindled in the past two years. Some, like cleaners, have quietly battled both rising costs of living and falling wages.”

If there are about 110,000 locals working full-time who earn less than $1,000, how many workers including part-time workers earning about $750 and are below age 35 are there – who may be adversely affected by the CPF restoration, like me?

Not old enough to get Workfare?

I don’t qualify for Workfare because I am not 35 years old or older.

Not old enough to get Medisave top-up?

I don’t get the GSTV Medisave Special Payment, as I am not 65 years or older.

Don’t earn enough to pay income tax?

The Income Tax rebate does not apply to me as I don’t earn enough to pay income tax.

Wage Credit Scheme means pay increase?

I doubt as to whether my employer will increase my pay by much, due to the 40 per cent subsidy under the Wage Credit Scheme, as I and most of my fellow workers are paid more or less on a hourly basis.

More or less GST Offset?

As to the GSTV Cash Special Payment of $250, it seems to be in totality even less than the GST Offset package when it was first implemented in 2007. (“GST Offset much lower now for lower-income?“, Dec 31)

Why give less under the GSTV scheme compared to the original GST Offset package, and then give apparently more now under the budget announcement, which in totality may still be less than the original GST Offset package?

Negative real median income growth?

With regard to the real household income per member (including employer CPF contributions) of Singaporean-headed households with at least one employed person, increasing cumulatively by 10.2 per cent or 1.96 per cent per annum from 2007 to 2012, it may be of little meaning to me as my pay has not been catching up with inflation. Also, why is it that the real median income growth (excluding employer CPF contributions) was negative in 2012, 2011, 2009 and 2008, and only 0.5 per cent in 2010?.

$600,000 lifetime benefits?

As to “In total, over a lifetime, a young low-income couple with two children can expect to receive more than $600,000 in benefits in real terms (2013 dollars)”, with my low pay, I doubt if I will ever be able to find a spouse.

I understand that in the advanced countries (and I have been told that Singapore is an advanced country), basic social services like healthcare, education, etc, and decent wages that provide a reasonable standard of living, don’t get counted as “$600,000 in benefits”!

So, the budget statement’s rhetoric that it is for a more inclusive society, may mean very little to me, and others like me.

(Note: John is a fictional character)