The Straits Times on Saturday, 13 July 2013, carried an article, “Slower pace of life comes with trade-off, says Shanmugam“, which said that Law and Foreign Minister K. Shanmugam had spoken at a forum at the National University of the night of Friday, 12 July 2013.
The Straits Times reported that Shanmugam had “painted a stark picture of the scale of challenges facing the country”, saying that “there is also a fiscal challenge as public spending already outstrips revenue from taxes in this year’s Budget.” It also reported that, “The only reason there is no actual deficit is the income stream from the reserves built up over many years.”
But what The Straits Times did not report on and that Shanmugam did not say is that Singapore also has the lowest public spending among the developed countries, even as Singapore is the richest country by GDP per capita, has the highest reserves per capita in the world, and that GIC and Temasek Holdings, which manage our reserves, are the 8th and 11th largest sovereign wealth funds in the world.
If we are starting on a very low base – with the lowest public spending among the developed countries, and we have more than adequate resources to provide for the people, why is the government choosing to paint a “stark picture” instead of simply providing for the people?
The Straits Times also reported that, “as the proportion of senior citizens grows, they will hold more votes and could potentially push politicians to spend more to benefit their age group.” Why does the government choose to paint the elderly as snarky, painful pests who want to feed on the system?
What The Straits Times had also not reported is that the situation is actually very dire and bleak for the elderly in Singapore. Among the low-income jobs, the majority of these workers are the elderly. For the elderly in these low-income jobs, this means that they have been earning low wages for several decades. This is highly problematic, because first, for the low-wage workers, their real wages have dropped over the past decade. Second, for low-wage workers, they see their wages drop over their lifetime. This means that low-wage workers and our elderly face a double-whammy where their wages simply cannot sustain the pace of growth of the cost of living in Singapore. Add to that, in 2005, 62% of the elderly had said that they needed work because they needed the money. Fast forward to 2013, the proportion of elderly who might need to work because they do not have enough savings would have possibly grown to 80%.
And why is this the case? Several studies have shown that Singapore’s retirement funds – our CPF – are actually the lowest among the developed countries compared, and even lower than countries such as Malaysia, Philippines and Indonesia.
What The Straits Times and Shanmugam had not acknowledged and said is this – Singapore has the lowest public spending among the developed countries, and because Singaporeans also receive the lowest wages among the developed countries and we have the lowest purchasing power because of relatively much higher prices, by the time we retire, we have the smallest retirement funds that this creates a lot of burden for the elderly in Singapore. Add to that the increasing healthcare costs and the lowest government expenditure on our healthcare bills, the elderly simply cannot afford to get sick with meagre savings and retirement funds, and cannot afford to stop working.
The Straits Times had also reported that, “Such trends will affect the amount of taxes today’s young will have to pay in future.” The Today newspaper had carried a report, “MediShield: Young people willing to pay higher premium“, on 12 July 2013, which said that, “Three quarters of the respondents, or 38 out of 50 (of 50 respondents???), said they are willing to pay more so that the elderly — and themselves eventually — pay less.” But what had not been said in all of these? With the lowest public spending among the developed countries and the highest reserves per capita and one of the largest sovereign wealth funds in the world, can the government afford to do a lot more to intervene, before the people are forced to pay from their own pockets, from real wages which have remained stagnant and which had not caught up with inflation?
It is highly unacceptable when the government refuses to acknowledge that with the lowest public spending among the developed countries and with one of the highest reserves and the highest reserves per capita in the world, that the government can do a lot more for the people. The picture isn’t stark if the government takes on the responsibility which it has not been taking for more than the past decade.
The government needs to increase the interest rate for CPF and Medisave and Medishield payouts, at least for the low-income earners and the elderly. The government needs to increase public spending for the low-income and the elderly – if they are not willing to impose a minimum wage to uplift the wages of these workers. And the government needs to significantly increase the proportion of the government’s expenditure on our healthcare bills. Other governments with a similar GDP per capita are already forking out 80% for the healthcare bills where our government is only forking out slightly more than 30%.
Before we even have to ask the people to dig from their own pockets, which have not grown, the government should look at the mirror and repeat what they are saying to the people to themselves. If the government can afford to pay itself high salaries which have shot through the roof, then it has no right to claim that the situation is “stark” when the people are paying them such exorbitant salaries precisely because they are supposed to fix the problems. The people have given the government enough solutions and if the government is not willing to act on these solutions, then this government doesn’t deserve to be paid such ridiculously high salaries.