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Researcher and author says budget not committed to reduce income inequality

by Vincent Low

The Head of Sociology at Nanyang Technological University (NTU), Prof Teo You Yenn, published an opinion piece on ST yesterday (23 Feb).

Her article, 'The economy as a means to an end, not an end in itself', talks about the urgent problem of income and wealth inequality facing Singapore today.

"As a sociologist, I have been thinking a lot about the urgent problem of income and wealth inequality in Singapore. I have seen others - social workers, teachers, academics, activists, artists, parents - similarly concerned," she said.

Prof Teo also noted, "People in Singapore are confronted not by a single city but a bifurcated one - for some, a global city, with numerous consumption choices; for others, a space of insecurity and uncertainty, where life feels both precarious and stagnant,"

Singapore ranked 86 out of 152 countries in terms of "Commitment to Reducing Inequality"

Prof Teo said that comparative studies like the recent World Inequality Report or the Commitment to Reducing Inequality Index have shown that countries that have done better in managing inequality and distributing wealth, are countries where state policies have systematically and strategically mitigated the exploitative tendencies of market forces and tried to reduce the capture and monopolisation of resources by a small group.

In the Commitment to Reducing Inequality Index, for example, it points to the significant roles states play in distributing a nation's wealth such that everyone can reap the rewards of development.

Screenshot of the Commitment to Reducing Inequality Index

In this index, Singapore is ranked 86 out of 152 countries because its social spending as a proportion of overall spending is low compared to other countries with similar capabilities for spending. Such as how Singapore's tax structure does not also sufficiently redistribute wealth generated to the broad population and labour policies afford limited leverage to low and middle-income workers vis-a-vis employers when it comes to wage conditions.

In the recent budget announcements for example, Prof Teo thinks that the increase in Buyer's Stamp Duty, an enhanced GST Voucher scheme, or the SG Bonus, do not go far enough in committing to reduce income and wealth inequalities.

"For example, the SG Bonus, which gives $100 to $300 for each adult Singaporean, is equivalent to between just $1.90 and $5.80 per week, for one year," Prof Teo quipped.

Policies governing distribution of goods should reduce market inequalities and not compound them

Prof Teo also thinks that Singapore as a society must change the market orientation that currently dominates the welfare regime.

"Adequately meeting everyone's needs - for housing, healthcare, education, work-life balance, long-term security - will require shifts away from the current model, where wage-earning capabilities are the precondition for access to all these things," she said.

Inequalities in wages should also not map onto public goods. For example, lower income during a life course should not, result in reduced access to basic healthcare.

She added, "Policies governing the distribution of these goods should reduce market inequalities, not replicate or compound them."

And finally, Prof Teo hopes that Singapore's policy regimes will foster not just individual values but also shared ones.

Though Singapore is now a very wealthy country, it ranks highly as one of the most unequal when compared with other wealthy countries such as in terms of GINI co-efficient. In other words, wealth is not trickling down to the majority of Singaporeans and is stuck with the privileged small minority.

Prof Teo You Yenn is the author of  "This Is What Inequality Looks Like" published by Ethos Books. Her book covers the experience of being low-income in contemporary Singapore and also illustrates how individuals' experiences are linked to structural conditions of inequality.