Real outcomes in Singapore suggests inequality index is flawed: MSF
Minister Desmond Lee on Oxfam's findings: It is more important to look at the outcomes achieved
Singapore sets out to achieve real outcomes rather than satisfy ideologically driven indicators, Mr Desmond Lee, Minister for Social and Family Development, said yesterday, in a rebuttal after an index ranked the Republic 149 out of 157 nations on efforts to reduce inequality.
Refuting a report by international development charity Oxfam and non-profit research group Development Finance International, Mr Lee said the Commitment to Reducing Inequality (CRI) Index 2018, released yesterday, assumes that high taxation and high public spending reflect a commitment to combating inequality.
"We think it is more important to look at the outcomes achieved instead," the minister said. "The report itself recognises this limitation."
Singapore was placed one rung above Laos (150), the lowest-ranked Asean nation, with Japan the highest-ranked Asian nation in 11th spot.
Denmark topped the index.
In a press release issued alongside the CRI index, Oxfam's head of inequality policy Max Lawson said Singapore could tackle inequality at home by spending more, strengthening labour rights and enacting anti-discrimination laws.
It could also set an example by ending harmful tax practices that provide a haven for tax avoidance and evasion, he said.
Singapore came in last when ranked on progressive tax policy, one of three key areas that was measured.
Mr Lee acknowledged Singaporeans had a low income tax burden but benefited more than proportionately from the high quality of infrastructure and social support.
He cited the fact that 90 per cent of Singaporeans own their homes and among the poorest 10 per cent of households, 84 per cent are home owners.
"No other country comes close," the minister added.
He also cited Singapore's performance in international rankings for education and healthcare, like the Programme for International Student Assessment (Pisa), in response to criticism of Singapore's relatively low social spending, and also highlighted the income growth experienced by lower income and median households over the last decade.
Said the minister: "That we achieved all of this with lower taxes and lower spending than most countries is to Singapore's credit rather than discredit."
Analysts The New Paper spoke to agreed that while Singapore was not perfect, the CRI Index did not fully look at other efforts to close the inequality gap.
Citing policies such as the Silver Support Scheme, National University of Singapore economist Sumit Agarwal said there were many programmes that redistribute wealth that were not taken into account.
Sociologist Tan Ern Ser said poverty exists in Singapore and more could be done to give support on rainy days, but the issue is a multi-dimensional one.
He said: "Things can look bad from one side of the equation, but we should also look at the welfare delivery part."
For Singapore Management University law don Eugene Tan, the report's methodology was simplistic and prescriptive.
That it did not look at policy outcomes was a glaring omission that compromised its objectivity, he noted.
He said: "The report puts every country through a cookie cutter, but what works for Denmark may not be suitable for Singapore."
What the CRI index looks at
Developed by Oxfam and Development Finance International (DFI), the Commitment to Reducing Inequality (CRI) Index 2018 ranks the commitment of governments to close the wealth gap by looking at three key policy areas:
- Social spending on public services, such as health, education and social protection;
- Progressive tax policies;
- Higher wages for ordinary workers and labour rights.
In the 76-page report, Oxfam and DFI said they believe inequality is a product of policy choices and the CRI index looks to hold governments accountable, while improving data collection.
It was first introduced last year, with Singapore coming in at 86th. This year's edition adds new indicators.
The report lists the following reasons for why Singapore ranked so low this year:
- Singapore has a number of harmful tax practices, including corporate tax incentives for intellectual property development, international traders and the finance and maritime sectors.
- Singapore's maximum personal income tax rate remains low at 22 per cent, despite a rate increase for top earners of 2 percentage points.
- Singapore's public social spending is relatively low, making up only 39 per cent of its budget, behind South Korea and Thailand at 50 per cent.
- Singapore has no equal pay or non-discrimination laws for women, its laws on rape and sexual harassment are inadequate and there is no minimum wage except for cleaners and security guards.