By Leong Sze Hian
I refer to the article “Handouts for the poor top $100m mark” (Sunday Times, Oct 20).
An increase of 45% in ComCare and helped 33,266 families and individuals?
It states that the social assistance payments to the poor have crossed the $100 million mark for the first time to reach $102.4 million in the last financial year ending in March, representing a nearly 45 per cent jump from the previous year, more than double the $44.5million given out five years ago.
“The money came from the Community Care (ComCare) Endowment Fund, set up by the Government in 2005 to help needy families get back on their feet. Overall, 33,266 families and individuals were helped last year, up from 19,072 five years ago.”
6 articles in 1 day on helping the poor?
There were a total of 6 articles in the special report in one day in one newspaper – To portray how much more we were spending and helping the poor?
Average help of $64 monthly per person?
By dividing $102.4 million by 33,266 families and individuals, we get the figure for each assistance payment to be about $257 a month. So, does it mean that the average financial assistance was about $257 a month?
Since as I understand it – most of the recipients were families – if we assume an average family of 4 persons – does it mean that the average assistance per family member per month was only about $64?
Only 0.03% of GDP spending?
At $102.4 million, I estimate that ComCare’s spending is only about 0.03 per cent of GDP – probably the lowest in the world in relative terms. Even on a per capita basis, we may also be one of the lowest in the world.
This is not a typo error – it is less than 0.1 per cent of GDP.
What it is in comparison with European countries?
I was in Austria, Germany and other European countries, and understand that the average income tax and value added tax, are about 35 and 12 per cent, respectively.
Despite such relatively high taxes, the European countries are generally struggling with Budget deficits. The primary reason, other than the economic slowdown, is that they generally have good social benefits – almost free universal healthcare, pensions, social welfare, free education, childcare, unemployment benefits, etc.
Whilst Singapore has relatively lower income taxes and GST, at up to the maximum rate of 20 per cent and 7 per cent, respectively – we have very high indirect taxes like COE, ERP, domestic maid levy, water conservation tax, property tax, etc.
Also, from a cash flow perspective, in a sense, our CPF may be like a very high tax of up to 36 per cent of income – as the ratio of contributions to withdrawals in a year is about 2.2.
In other words, for every $2.20 contributions, only $1 was withdrawn in a year.
And the Government had use of the “excess” CPF over the years and in return only paid us as low as 2.5 per cent interest.
Moreover, much of the withdrawals may be used to pay for (highly priced for profit) HDB flats and mortgage payments for about $38.4 billion of outstanding HDB mortgage financing loans.
On a relative basis, the problem with Singapore’s social benefit system may be that although we pay a lot (like taxes in Europe) from a cash flow perspective, but we spend very little – such as ComCare’s 0.03 per cent of GDP.
Spend $0 on healthcare, CPF and HDB?
In contrast, the European countries, generally, on a relative basis have high taxes and spend a lot on social benefits.
So, in the final analysis, we may have to question as to why on a cash flow basis, we pay so much and get so little back via-a-vis other developed countries?
Huge Budget surpluses?
The outcomes of our “over-taxed” (over-paying cash flows) and “under-paid benefits” may be our $32.1 billion Budget surplus last year and about $187 billion over the last 7 years or so, if we use IMF fiscal reporting standards.
So, instead of the never ending calls for Singaporeans to donate and help poorer Singaporeans (“Getting people to give more of their time and money to those in need”, Straits Times, Oct 20) – perhaps we should first walk the talk in having the Government to spend first on those in need.