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The Singapore system aims to help everyone stand on their own two feet: but there are no perpetual free lunches

PUBLISHED : Friday, 31 August, 2018, 9:32pm
UPDATED : Friday, 31 August, 2018, 9:46pm

I refer to Ms Judith Huang’s association of a Singapore government that is heavily invested in the provision of housing, education, health care, utilities, transport and other services with “neoliberal” economic practices (“In a Singapore full of crazy rich foreigners, inequality is becoming ingrained”, August 23).

These services have long been treated as avenues for the authorities to redistribute wealth to the less fortunate. Low-income earners in Singapore get S$4 in benefits for every S$1 they pay in tax, with the other end of the income spectrum receiving less than what they contribute.

While income tax is capped at 22 per cent for the highest earners, about half of Singaporean workers pay nothing, with the rest paying one of the lowest rates in the world via a progressive taxation system: the top 20 per cent contribute to about 80 per cent of the state’s income tax coffers.

Despite this disparity in net contributions, excluding those via the goods and services tax, the vast majority in this segment do not qualify for subsidised public housing – including those with condominium facilities – as these are reserved for Singaporean citizens with a household income of up to S$14,000 (HK$80,000) a month.

For the many families who do, it is common for some to upgrade to private property by capitalising on the average equity of about S$200,000 from the sale of their flat, after living in it for the requisite five years.

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In fact, after taking into account all forms of social transfers, the wealth gap in Singapore, as measured by the Gini coefficient, has fallen in recent years, not widened, as Ms Huang asserts.

Seen in the aforementioned context, it is clear that the issue of “inequality” must be addressed with far more equanimity and holism than what she is bargaining for.

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Today, there are more avenues for the low-income population to seek an extra leg-up in the Lion City.

But those who are able must also do their part to get out of their predicament and stand on their own two feet over the long term. This is only fair and just to the taxpayers who have helped them foot their bills during their time of need, ahead of growing competition for finite resources with an ageing society.

Singaporeans should not be under any illusion the “Singapore brand premium” is inelastic to the costs of living and doing business in the country. There is no such thing as a perpetual free lunch.

John Chan, Singapore