In an interview with state media Straits Times yesterday (Jan 31), Deputy Prime Minister Tharman Shanmugaratnam defended Singapore’s extreme income inequality. When compared to OECD nations, Singapore have the second-worst GINI coefficient at 0.463. Without providing any statistics, DPM Tharman claimed that government policies like Workfare, Progressive Wage Model and SkillsFuture have maintained inequality in Singapore:
“It’s in the last decade that you see a decisive shift, a deliberate tilt, towards tempering the inequalities of life and ensuring the lower-income group keeps pace with the whole society as it moves up. With such moves, social expenditure – which covers healthcare, education and social and family development, among others – ballooned to about $34 billion in 2016, from $12.7 billion a decade earlier. Last year, it comprised $37.8 billion – half of total government spending.”
However when fact-checked by NUS economist Chia Ngee Choon, the professor pointed out that the bottom 20 percent has always suffered lower income growth when compared to the rich:
“The 2005 Household Expenditure Survey showed that while average income for households rose 1.1 per cent annually from 1998 to 2003, those in the bottom 20 per cent saw their incomes fall 3.2 per cent a year in the same period.”
Again without providing any example, Minister Tharman then claimed that it is natural to have income inequality in mature societies:
“As societies become more settled and class divisions firm up, one’s starting advantage becomes a lasting advantage. It’s true in every mature society, and the same can happen to us.”
In 2015, a BBC journalist questioned Minister Tharman if Singapore believed in a notion of a safety net for those who fall between the cracks of a successful economy. The Minister took the solemn as a joke and frivolously responded: “I believe in the notion of a trampoline.”
Minister Tharman then said that the “Singapore approach” is that income growth is personal responsibility and not the government’s duty:
“It is about helping people with a difficult start discover their own strengths – whether it is by helping them stay in work with Workfare, building their skills or helping them own their homes. This strengthens personal responsibility, and strengthens the sense of pride people get from contributing to their own lives and to society. That, I think, is the crucial social ethic that we’ve got to maintain. That is the Singapore approach, it can be done, and we’ve got to make sure that we sustain that into the future.”
When asked for clarifications on his comments on the “Singapore approach”, Minister Tharman said that a social safety net is not the government’s responsibility:
“It does not mean that people have equal options. Instead, a trampoline refers also to support from community networks: teachers, parents’ support groups, friends and peers who help galvanise people with a spirit of aspiration. This, together with government help will become a major intervention – will help people take personal responsibility.”