Minister of State for National Development, Desmond Lee (image - YouTube channel)

Desmond Lee forgets about substantial private contributions that help achieve top outcomes

The Straits Times published an article today (‘Singapore refutes Oxfam report on its performance in tackling inequality‘, 10 Oct), reporting that Social and Family Development Minister Desmond Lee had refuted the recent Oxfam report on Singapore ranked as one of the 10 worst countries in showing commitments to reduce inequality.

The Commitment to Reducing Inequality Index, compiled by non-profit organisations Oxfam and Development Finance International, ranked Singapore 149th out of 157 countries – below Ethiopia and Afghanistan.

Minister Lee told Singapore’s mainstream media yesterday (9 Oct) that Singapore may not spend as much as other countries on healthcare and education, but the outcomes it achieves in these areas are significant, and better than most countries.

In other words, by his statement, Minister Lee has essentially confirmed 2 things about Singapore:

  • Singapore is extremely poor in tackling inequality
  • Singapore does not spend much on healthcare and education

The Oxfam report also commented that Singapore “undertaxes wealthy individuals and corporations”. Indeed, income tax for top earners in Singapore is only 22 per cent, comparing with Australia’s 45%. And of course, top earners in Singapore would include the government ministers, high-ranking civil servants and top executives of GLCs in Singapore too.

Minister Lee side-stepped the question on top earners not being taxed enough by saying, “Yes, the income tax burden on Singaporeans is low. And almost half the population do not pay any income tax”.

“Yet, they benefit more than proportionately from the high quality of infrastructure and social support that the state provides,” he added.

Looking at outcomes achieved

Minister Lee also said that it is more important to look at the outcomes achieved in Singapore.

“We set out to achieve real outcomes for our people – good health, education, jobs and housing – rather than satisfy a collection of ideologically driven indicators,” he said.

The Oxfam report also criticised Singapore for spending “well below countries such as South Korea and Thailand” on healthcare, education and social protection.

Minister Lee replied that despite spending less on healthcare compared to other countries, he noted that the Economist Intelligence Unit (EIU) has ranked Singapore second in the world for healthcare outcomes while the World Health Organisation (WHO) ranked Singapore’s healthcare system sixth best in the world.

Similarly, in education, he noted that Singapore’s students consistently outperform others in international rankings.

“That we achieved all of this with lower taxes and lower spending than most countries is to Singapore’s credit rather than discredit,” he said.

Minister Lee forgets that private individuals are footing the bulk of the bill

While it’s true that the Singapore government is not spending more than other countries especially in healthcare and yet able to achieve one of the best healthcare systems in the world, what Minister Lee forgot to say is that Singaporeans themselves are actually footing the majority of the hospital bills.

In 2013, after netizens on social media pointed out that the Singapore government’s share of healthcare spending had been minuscule languishing at 30+ per cent when OECD countries were spending like 70-80 per cent on average, Health Minister Gan Kim Yong finally relented and announced:

“The first major shift is to increase Government’s share of national (health) spending, to provide Singaporeans with greater assurance that care will remain affordable and accessible.

Government spending will not only rise in tandem with the increase in national healthcare spending. We will in fact take on a greater share of national spending, from the current one-third to about 40 percent and possibly even further, depending on various factors such as demographics, and our ability to manage healthcare costs and target our subsidies. This will help to reduce the impact of rising healthcare costs on Singaporeans, especially the lower- and middle-income Singaporeans.”

That is to say, Minister Gan “generously” announced that the government’s share of total health spending would increase a tinge higher from 30+ to 40 per cent. This is of course, still significantly lower than the OECD’s average of 70-80 per cent and confirms that Singaporeans are actually the ones footing the majority of the total healthcare expenses.

And in education, Minister Lee also forgot to mention that Singapore’s private tuition industry actually amounts to $1 billion a year. In other words, Singaporean students have been consistently outperform others in international rankings with the extra help from large scale private tuition paid for by their parents. Everyday, Singaporeans are struggling to make a living to provide a better life for their kids and themselves.

Hence, Minister Lee, who is incidentally the son of former Cabinet Minister Lee Yoke Suan, should not take for granted of the substantial financial contributions from individual Singaporean families to achieve those exceptional outcomes he mentioned.