I've posted the following article by Tan Kin Lian in another
thread, and these are things our 'big hearted goverment' can do,
but refuses to.. for fear of losing money.
So, they've now accumulated much wealth... but is anyone
benefitting? Basically, are people cared for in the REAL sense?
Answer is a Flat No.
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Giving equal access to social benefits
4 June 2008
Tan Kin Lian
A Government needs to collect sufficient tax to pay the expenses
of running the country and to provide the social benefits to its
citizens.
The tax should be collected fairly from the citizens. Those with
higher incomes should pay more tax. A high income earner should pay
more tax willingly. It is better to earn more and pay more tax,
rather than be in the opposite situation.
After paying a higher amount of tax, the high income earner
should be entitled to the same social benefits as other citizens.
They do not expect to receive more social benefits, but they should
not be given less.
I am against means testing for subsidized health care. I believe
that all citizens should be entitled to education, safety, security
and the other benefits of living in Singapore, including access to
subsidized health care.
We should avoid the requirement for people to provide proof and
be labeled as “poor” in order to receive subsidized health care. It
is best that this type of classification be avoided.
Type of Housing
The Government now distributes budget surpluses to the citizens
in some years, based on income tax level or type of housing.
I prefer the distribution to be made equally to all citizens or
be based on objective criteria such as age or number of members in
the family.
There is some inequity in distributing the benefits based on
type of housing. Some retirees have little or no income, but live
in private properties bought at a low price many years ago. Some
live in the private property as tenants, not owners. These people
are not as well-off as the owners.
We also have the cases where the residents of HDB flats own
expensive cars and are quite wealthy. They enjoy the higher payouts
based on their type of housing.
It may be argued by the proponents of the current method of
distribution that the percentage of odd cases (i.e. those who
receive more or less than they should be entitled to) is small.
Nonetheless, it is better to avoid this anomaly entirely.
Types of taxes
I prefer a system of taxation where more revenue is collected
from income tax. Those who earn more, pay more tax.
In recent years, there has been a move to shift taxation from
income tax to consumption tax, which is known as goods and services
tax (GST) in Singapore. GST has increased the cost of living for
everyone and has hit the lower income people hardest.
I hope that the GST will not be increased further from the
current level. If possible, it should be reduced to 5 percent or
lower. If more tax revenue is required, it can be collected from
income tax, property tax and other sources.
Minimum Wage
I recent years, the low wage earners in Singapore are hit hard
from two sources – lower wages due to competition from the influx
of foreign workers and a higher cost of living.
It is time for us to consider the need for all workers to be
given a minimum wage that will allow them to earn enough for a hard
day’s work to maintain a basic standard of living for the family. A
lower minimum wage can apply for foreign workers, but as the
foreign worker’s levy is deducted, their net wage will be
lower.
A minimum wage will raise the operating cost for some
businesses. The business can still be made competitive through
lower rents, levies and a lower profit margin (but still attractive
to the investor). If wages are raised to the minimum, it is likely
that there is less demand for business premises. This will lead to
lower rentals that will offset the higher wages.
Foreign Investments
The low corporate tax strategy is aimed at attracting foreign
investments into Singapore. We should examine some of its negative
impact.
I observe that some foreign investors set up businesses in
Singapore but depend heavily on low cost foreign workers. These
businesses create few jobs for Singaporeans. They create a high
social cost – depressed wages of local workers, congestion in
housing and public transport and changes to the social fabric.
We have also attracted many wealthy foreigners to bring large
sums of money into Singapore. They increase the prices of private
property to levels that are not affordable to most citizens.
Low interest rate
Even the money brought into Singapore by foreign investors has a
negative impact on Singaporeans. They cause interest rate to be at
a low level, among the lowest in the world. The low interest rate
means less interest income on the savings of Singaporeans,
especially the retired persons. The low interest rate makes it
difficult for them to have a sufficient income to meet the cost of
living.
Conclusion
Our past economic strategy has contributed to the economic
success of Singapore. They have also contributed to social
problems. Some of these problems have not been understood or
analysed.
I believe that a system of higher corporate and income taxes,
and lower consumption tax (i.e. GST) may be more beneficial to
citizens and permanent residents living in Singapore.
We also need to review the current policy on “means testing” and
also the manner of distributing budget surpluses based on type of
housing. I prefer a system of equal access to the social benefits.
I hope that these issues can now be considered.