Social & Family Development Minister Desmond Lee responded to the recently released ‘Commitment to Reducing Inequality Index 2018’ released by Oxfam that ranked Singapore 149 out of 157 countries around the world in terms of efforts to reduce inequality, placing it below countries like Afghanistan, Ethiopia and Bangladesh.
Mr Lee strongly refutes the claim that Singapore is among the worst countries in the world in its commitment to reduce inequality, saying that it is more important to also look at the outcomes Singapore has achieved, something that the Oxfam report fails to take into consideration.
According to the Index, the main reason Singapore ranked so poorly was due to its abysmal ranking on tax policies. Oxfam had indicated that Singapore has a number of harmful tax practices and personal income tax for the highest earners remain very low at only 22%. This, combined with the country’s low level of social public spending, is what contributed to Singapore slipping down the ranks.
Mr Max Lawson, Oxfam’s head of policy on inequality, said “The index measures policies in place to reduce inequality. So if a poor country is nevertheless taking clear steps to reduce inequality, they are rewarded in this index. Equally, if a rich country, like Singapore, has poor policies in place, they will be marked down. These policies include spending, tax, and labour rights.”
However, Mr Lee noted that though almost half the population does not pay income tax, Singaporeans benefit from a high quality of infrastructure and social support provided by the state. Mr Lee pointed out that Singapore had been ranked second by the Economist Intelligence Unit and sixth by the World Health Organisation in health outcomes globally and that the country’s residents have a higher life expectancy compared to the US and among the lowest infant mortality rates in the world.
“The report assumes that high taxation and high public expenditure reflects commitment to combatting inequality. We think it is more important to look at the outcomes achieved, instead. The report itself recognises this limitation.”
The Oxfam report had also criticised the absence of a minimum wage in Singapore. To this, Mr Lee said that Singapore has in place income support for low-income workers and various schemes in place for worker upskilling and a progressive wage model for certain low-wage jobs. He added that both lower-income and median households in Singapore have experience faster income growth over the last decade than most countries.
Adding to his litany of Singapore’s achievements, Mr Lee also pointed out that no other country comes close to the Lion City in terms of home ownership, with 90% of Singaporeans owning homes. And even for the poorest 10% of households, about 84% own their own homes.
He said, "That we achieved all of this with lower taxes and lower spending than most countries is to Singapore's credit rather than discredit."
“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 added.
Though Oxfam has acknowledge the limitations the analysis, specifically stating that there’s no substitute for context-specific knowledge, it also still iterates that the index provides a strong foundation to gauge a government’s commitment to tackle inequality.
However, Mr Lee said that the index was not well-suited for the challenges faced in Singapore and ultimately, "doesn't produce a measure that correlates well with the living reality of Singaporeans, who know that inequality is a problem here, but is not characterised by the poverty and absolute deprivation seen in many countries of similar ‘rank'".