Budget 2014: Three Things We Missed About The Budget

Budget 2014 was announced last week. But there are 3 things that you might not know.

(1) Education: Expenditure Drops In 2014 & Singapore Government Still Spends The Least Among High-Income Countries

In 2013, the Singapore government had spent only 3.1% of GDP on education – this means that the Singapore government is still spending the lowest as compared to the other high-income countries. In fact, on average, high-income countries would spend about 6.5% of GDP on education. This means that the Singapore government spends only less than half of what it should on education.

Not only that, the government has been consistently spending too little on education over the past few years. But yet things weren’t always the case – in 2001 and 2002, the government was willing to spend 4.1% on education. In fact, in 1987, the government had spent already 4% and they had even said that, “the government’s goal for the 1990s was to increase spending to 6 percent of GDP“. However, not only did this not materialise today, the government is spending a paltry 3.1% on education – the lowest in the world and an embarrassment as compared to what a country of our stature should be spending.

I had previously written about how resources in the Singapore schools are very unequally distributed where according to the PISA ranking, “advantaged schools (in Singapore) are more likely to have more or better resources“.

It was also reported earlier this month that even though 4 top schools were going to have their “funding trimmed”, 6 top schools would actually receive “additional funding”, which means more funding for top schools.

Which is why it is perplexing why there is a reduction in the government expenditure for education from $11.6 in 2013 to $11.5 in 2014 – if the expenditure is reduced, and top schools are receiving more funding, does this mean that the schools which are not “top schools” would actually receive lesser funding? Now, note that this comes on top of the additional $300 million which the government had announced under Budget 2014 for higher financial assistance for kindergartens and the $147 million for higher bursaries.

Yet, even with the “additional” financial assistance, the government expenditure on education went down. How is this even possible?

This does remind us of what Vice-Principal of Jurong West Secondary School Pushparani Nadarajah had said that, “How many of our leaders and top officers who say that every school is a good school put their children in ordinary schools near their home? (Only) until they actually do so are parents going to buy (it).

Indeed, does the government itself believe that “every school is a good school”?

In 2014, the Singapore government is expected to spend $11.5 billion on education. If the government were to spend on par with what a high-income country should be spending – of 6.5%, it should be spending $24 billion. Even if the government were to spend the target that they had set in the 1980s of 6%, they should still be spending $22 billion.

Slide1

This would be more than enough to provide free education to all Singaporeans across all educational levels.

Not only that, I had written that Singapore continues to have too many students in our classrooms – we have the highest class sizes and the highest as compared to the high-income countries, we have only 30% of each cohort of our students who are able to receive a university education, as compared to 60% in another high-income country and Singaporeans pay the second highest university fees in the world.

If the Singapore government would do what its responsibility entail and spend accordingly, Singaporeans would be able to receive a more equitable education (where all schools are truly equal), where more schools can be built and teachers trained so that classes sizes can be made smaller, our students would receive more attention and there would be more workload taken off the stress of our teachers, and where more Singaporeans would be able to receive university education. In fact, as said, if the government spends what it should, all Singaporeans would be able to receive free education.

However, why is this not happening – is it because the government is spending way too little on education, as compared to what it should?

What signal is the government giving to Singaporeans on our education? That Singaporeans don’t deserve to have higher education? Why had the National Development Minister Khaw Boon Wan said that, “If (Singaporeans) cannot find jobs, what is the point? You own a degree, but so what? That you can’t eat it.” And why did Minister for Social and Family Development Chan Chun Sing also said that, “It’s not the degree or the diploma… that is most important.

Not only that, Leong Sze Hian had calculated that “the total surplus for just 2 of our 6 public universities – NUS and NTU is $451 million“. This surplus would enable all Singapore university undergraduates to receive free education!

So, on top of the under-expenditure by the government, how much more surpluses are stuffed into the different public agencies which is not transferred back but if were to, would allow Singaporeans to receive a more heavily-subsidised education?

(2) Healthcare: Singapore Government Still Spends Lowest Among High-Income Countries

Next, in 2013, the Singapore government had spent only 1.5% of GDP on health.

Again, when you compare this with other high-income countries, these countries would spend an average of 8%. This means that what the Singapore government is spending is way off the mark. Not only that, the 1.5% that the Singapore government is spending puts us as one of the lowest in the world!

What this means is that because of the low government expenditure on health, for Singaporeans, we have to spend more out-of-pocket for healthcare. In fact, when paying for health, Singaporeans have to spend more than 60% on healthcare from our own savings – which means that Singaporeans have to spend the most out of own pockets, as compared to any citizen in any other high-income country. In fact, Singaporeans also have to spend more than the citizens in the other Asian Tigers economies and developing countries, such as Malaysia, Thailand and Indonesia! And not only that, we have to spend as much as what a citizen in a Third World Country would spend – do we have a GDP that looks First World, but a livelihood that is actually Third World?

The government has said that it had planned to increase its expenditure on health to 40% but even if it does so, this would still not be enough. The average that a high-income country should be spending should be 70%. Thus even with the 40% expenditure, this would still not solve the problem – Singaporeans would still have to pay high amounts out of our own pockets and poorer Singaporeans would still be left out of the system. Clearly, for a high-income country where prices are one of the highest in the world, it’s simply not enough to make Singaporeans pay for healthcare mostly by ourselves on our stagnant wages as there simply isn’t enough financial bandwidth left for us to do that.

I had written that according to the World Health Organisation (WHO), high out-of-pocket expenditure on healthcare poses significant challenges, such that there is “restricted physical and financial access by the poor” and the healthcare system becomes “extremely inequitable”.

Indeed, is this what is happening in Singapore now, where the low- and middle-income Singaporeans are not able to access healthcare adequately? In fact, it’s often heard nowadays that because Singaporeans are not able to foot their medical bills, they had to resort to selling their homes. Not only that, we are starting to hear of Singaporeans who have killed themselves because they are worried that they are not able to pay their medical bills. Worker’s Party’s Gerald Giam had also spoke about how 2,400 Singaporeans had to pay $10,000 for their medical bills in just one yearJust yesterday, it was reported that “some kidney patients refuse treatment and choose to die”. Leong Sze Hian had estimated that, “thousands of (Singaporeans) may literally have died“. 

On top of that, we are hearing of how hospitals are too crowded as there aren’t enough facilities for Singaporeans to use, while the population had exploded. Not only that, Singapore continues to have the lowest number of doctors, nurses and hospital beds per 10,000 population.

What this means is that Singapore simply doesn’t have enough hospitals, doctors and nurses to cater to the overpopulation. On top of that, Singaporeans are made to pay more and more out of our own meagre and wages, even as our real wages have even dropped, as Leong Sze Hian had calculated. This has resulted in the overcrowding and long waiting times at the hospitals and polyclinics, and it has also resulted in low- and lower-middle-income Singaporeans who thus have limited access to healthcare in Singapore – so much so that it’s now often heard that “it’s cheaper to die than go to a hospital in Singapore”, and we now know it’s true – that people are choosing to die rather than seek medical treatment. Is this even humane or moral? And the government allows this to happen?

But isn’t healthcare a basic good that every citizen should be guaranteed?

In fact, have things gotten so bad that the government thus has to increase subsidies for Singaporeans in Budget 2014? As someone had questioned (I can’t locate the article), if healthcare was affordable in the first place, would the government have had to increase subsidies for healthcare and make a big deal out of it?

And as Leong Sze Hian and I have also analysed, even as the government announced increased subsidies for healthcare, they have at the same time made Singaporeans contribute another 1% into our CPF Medisave contributions – this 1% increase would give them another $860 million, which would be twice as high as the $471 million that they would give us – so in the end, is the government playing more of its responsibilities anyway? Or is the Singapore government playing us out?

Which means that since we have to pay more than they do anyway, we still lose more. And the government still earns!

Not only that, for the Medisave contributions that we have paid, we won’t be able to see it come back anyway – the Medisave that Singaporeans have paid have gone on to accumulate at least $60 billion. Of which, only 1.3% is used. There is still another more than 98% that is left inside unused, which is not returned to Singaporeans.

So, what this means is that the government might increase the Medisave contribution rates, supposedly to allow us to have more to use for healthcare, but in reality, most of that money is going to be stuck inside anyway and we wouldn’t be able to use it – because of how low the Medisave Withdrawal Limits are and the limited uses of our Medisave.

Currently, the Singapore government spends only 1.5% of GDP on health. But if the government were to spend what it should be spending, it should be spending 8%. So instead of the $7.1 billion that it would be spending, the government should be spending $37.9 billion. This would be more than enough to cover for all the $13 billion health expenditure in Singapore in a year, build several more hospitals to increase the bed capacity, train more doctors and nurses so there would be more manpower and resources and waiting times would be shortened.

As it is, not only are there not enough doctors in Singapore, the government is also not training enough doctors for our healthcare system – Singapore has one of the lowest medical graduates per 100,000 population.

Slide2

Thus the embarrassingly low government expenditure on health can be seen to have attributed to the deteriorating health facilities in Singapore and the lack of access for healthcare for a large pool of low- and middle-income Singaporeans.

The government’s unwillingness to provide more funds for Singaporeans is the direct cause of death for many Singaporeans who have thus opted to die – but can this be reflected in the death certificate: Death by government’s shirking its responsibility? Where is the government’s compassion? This is supposedly a First World country that we are talking about, mind you. Why are Singaporeans dying as if we are living in a Third World country, or perhaps we are but we just don’t realise it?

In other high-income countries, their citizens would need to only pay a maximum cap to access healthcare services in their countries. However, in Singapore there is no cap on how much Singaporeans pay. Yet, there is a cap as to how much the government would pay us. As such, it is not surprising thus that medical bills for Singaporeans can run into the thousands – this is hardly seen in another high-income countries. At the same time, so has the government’s surplus grown, at the expense of us accumulating higher debt.

So, you can see that when it comes to healthcare, instead of the government subsidising Singaporeans to provide us with a public good that all Singaporeans should have access to, Singaporeans are subsidising the government so that the government can continue to keep their costs low for health expenditure. Then what happens to Singaporeans? We are made to pay the most out of our own pockets for healthcare and many Singaporeans are thus left out in the cold and cannot access healthcare adequately.

But why is it that the government has tons of surplus but the citizens are in debt? Do you think this is the right way to run the country?

(3) Largest Increase In Budget for Ministry of Culture, Community And Youth

Actually, what surprised me was that the even as the health budget had increased and the education budget had dropped, the greatest increase in the Budget actually came from the Ministry of Culture, Community And Youth (MCCY) – the expenditure rose to become the third largest expenditure under Social Development.

The expenditure rose by 125% in 2012 and 45% in 2013 to $2 billion!

Slide3

But where is this money going?

Note that when the MCCY was formed, it was “established to focus on building a cohesive and vibrant society, and deepening the sense of identity and belonging to the nation“.

In 2015, Singapore would be “celebrating the 50th birthday”. The Programme Office which will be spearheading this “birthday” is the MCCY. So, is this where the money is going to?

Already, in 2012, it would cost $17.2 million to stage the National Day Parade. And the Youth Olympic Games had ran into $387 million.

In fact, as part of the 50th anniversary, Channel NewsAsia will be producing 30 hours of documentaries. But the documentaries have already been panned for being “biased” and “a sad piece of substandard journalism that ignores relevant, critical information through omission”. It was said that, “The government’s view was of course well-represented … (but) the official old story were cut out”.

This reminds me of how China had wanted to introduce “Chinese national education in Hong Kong schools” but this was met with protests of 90,000 people in Hong Kong. In fact, the people in Hong Kong has challenged the propaganda by saying, “It’s very different from what national education should be based on: historical facts. Patriotism can’t be taught.” They had also preferred that if their government had “done something wrong you must admit it, or people will be suspicious.” In fact, enforced learning doesn’t bode well for the longevity of the nation as “Learning more about China (and Singapore) is necessary, but we need to make the education neutral, so pupils can build their own stances on issues.”

Unfortunately, it’s unlikely that Singaporeans would rise up and challenge such propaganda and historical distortions – we have allowed ourselves to be used to be talked down to. Even in Hong Kong, it is said that, “We’re definitely against spoon-feeding pupils. What we want is to nurture politically literate citizens with critical, inquiring minds.” However, what of Singapore?

Would I want to see what I pay into tax be used to fund such half-truths and propaganda by the PAP government? Not really.

I would rather see my tax being channelled to understand the real history of Singapore and what really happened in Singapore.

I would rather like to know that in Project Coldstore in 1963, that “the Barisan and the other detainees of Operation Coldstore (were not) part of a communist conspiracy” that the PAP had claimed them to be and that “Special Branch and the ISD did not (and) does not have any evidence that the Operation Coldstore detainees were engaged in any communist conspiracy” but arrested them anyway. In fact, Lee Kuan Yew “had wanted to include a further 15 of his political opponents onto the list to be detained”.

In fact 2011 Presidential Election candidate Tan Jee Say had quoted that, “While Lee … continued to push their case for detentions, Selkirk (UK Commissioner in Singapore) continued to affirm that ‘there is no important new evidence of subversive activity on which arrests at this juncture  can be justified. We could not substantiate a charge that they are planning to use violence. In the absence of specific evidence of subversion the arrests would be construed as an attempt by HMG to stifle legitimate opposition.'” and has challenged President Tony Tan to use his “moral authority” to “put things right”.

This is the 50th anniversary that I would rather remember. Not a half-baked 50th birthday which is meant to whitewash the history of Singapore, to paint it according to the likes of the PAP government but deny the existence of other histories and truths. Not knowing our history will one day put us in a vulnerable position where if the same situation in the past was repeated, we won’t be able to fall back onto history to guide us. This is the unfortunate outcome of being controlled by an over-self-protective PAP government which doesn’t have the confidence and integrity to stand up to its truths and misdoings questioned.

Should the $604 million increase in the Budget for Culture, Community and Youth be used by the government to further the PAP’s legitimacy and its want (not right) to rule? Should the PAP continue to have such unfettered power to use our money – the money that we pay into taxes – to be used at their whims and fancy? Mind you, we are paying taxes to allow the monies to be channelled back to Singaporeans for the betterment of our lives and our welfare – not for the PAP to over-glorify themselves and paint the picture that they want of themselves, over the real histories of our country.

(4) Budget 2014: Still Misplaced Priorities And Singaporeans Left Hanging

Indeed, Budget 2014 goes on to show how there are still much misplaced priorities by the current government in its current expenditure and how there is still severe underspending in the areas that require the most investments –  education and healthcare.

Finally, you might be thinking – if the expenditure on education and health forms the largest bulk of the government’s expenditure and the government is still spending too little, does it mean that overall, the Singapore government is spending too little? Well, indeed, you are right – the Singapore government, at 17% of GDP, spends the lowest public expenditure among the high-income countries.

Then, the next question is – if so much of the GDP is not being spent, then where is it going? Well, where else, except to wages and profits? And yet, if wages are not increasing, then the only obvious answer is that most of our GDP is going into profits. The thing is this – if the GDP goes into wages, it goes back to you. If the GDP goes into taxes, it gets redistributed back to you. But if the GDP goes into profits – then it goes only into a few people’s pockets.

But how much GDP should the government be spending, you ask? Currently, the government would spend about 17% of GDP. If the government should spend on par with its responsibility as a high income country, this means that the government should be spending 45% of GDP. This means that there is another $92 billion that the government should be spending, but isn’t spending. On top of the $29 billion that Leong Sze Hian had estimated into undeclared surplus, this would mean that there is a lost expenditure of $121 billion that the government is spending but isn’t spending.

If you look at how much more the government should be spending for education and health, the government should be spending an additional $10.5 billion on education and $30.4 billion on health – this means that the lost expenditure would be able to more than adequately pay for these expenditure of $40.9 billion, and still have more than enough to redistribute to protect Singaporeans who have fallen into unemployment or who should retire. No Singaporeans would have to die because they cannot afford healthcare. All Singaporeans would have a chance at receiving higher education and our ministers won’t need to encourage us not to aspire to do so, simply because they want to save on their expenses.

Slide4

Even if the government were to just cover for this additional $40.9 billion, this would only represent 29% of GDP – still the lowest among the high-income countries, yet the government would be able to adequately protect all Singaporeans. So why isn’t the government doing so, or willing to do so?

What this means is that there is billions of lost government revenue which has been channelled into profits and undeclared surpluses which should have been channelled back to Singaporeans but have disappeared off the record books – then where is our money going?

Now, do you understand why the rich in Singapore remain so rich and the poor in Singapore remain so poor? Now, do you know why the richest 20% earns as much income as the poorest 80% of us in Singapore? It’s not by nature’s design that Singapore is so unequal. It is because of the government’s precise engineering that allows the rich (and themselves) to siphon off most of the GDP to themselves, and leave the rest for the rest of us to fight over.

Any wonder why the competition and stress in Singapore is so high, and the fear to lose is so high? It’s not because it’s natural – it was all planned.

It’s a wonder why we choose to fight among ourselves over the little bits that they choose to give us, instead of fight against them to get back the bits that we should be getting back, but has been siphoned off by them. Yet, we remain silent and oppressed, believing that we should accept our fates because we haven’t been hardworking enough.

When you work the longest hours in the world and earn the lowest wages among the high-income countries, you haven’t not been hardworking enough. You are overworked! So what are you going to do now? Are you still going to fight among yourselves or redirect your attention wisely?

What say you? It’s all up to you now.

11 comments

  1. Tan CS

    hi Roy,
    just a small comment. I noticed that you keep saying that our government did not spent enough as compared with the HIGHER income countries in the of GDP%. This seems to be misleading because out of the 186 countries, Singapore rank No. 9 in terms of least spending of GDP. The lowest spending countries are Bangladesh, Madagascar and Philippines – their governments all spent 16% of their GDP, and we are just a bit more than them – 17.1%! Even Malaysia and Indonesia are spending 60%. Brunie spend 50%.Therefore, our government actually spend far too little on Singaporean’s welfare as compare with ALMOST ALL the countries in the world, regardless rich or poor!

    • Roy Ngerng

      Hi, thanks for pointing out.

      The government is spending like a Third World country but pays themselves like a First World country.

      Has Singapore ever become a First World country?

      I hope the rest of Singaporeans realise we are actually degenerating now, before it’s too late.

  2. D

    SG government has inflated GDP through various dubious economic policies. Eg import of cheap foreign labour. Since GDP is inflated, I believe that any statistic derived from GDP is … dubious. So while gov spending on healthcare as a %age of total spending on healthcare is a valid thing to talk about and compare with other countries, gov spending on healthcare as a %age of GDP is not a fair comparison – since other countries haven’t inflated their underlying GDP numbers. Thoughts?

    • Roy Ngerng

      Hi, I agree. The use of GDP as a comparison was to allow Singaporeans to gain some perspective into how much is not being spent.

      However, the unique scenario in Singapore is that there is undeclared surplus – and as Mr Leong has calculated, this was $36 billion in 2012 and an estimated $29 billion last year. So, this is the first stash of cash.

      Also, as written, it was also found by Mr Leong that that our public institutions such as the hospitals and universities run surpluses. This also includes the town councils, for example.

      Finally, our CPF runs a massive balance, on our payments which are hardly channelled back.

      Add these all together and even as we do not increase taxes, we would have A LOT.

      This would be more than enough to cover for our expenditure to protect Singaporeans every year.

      The problem now is there’s undeclared surplus, surpluses which are hidden and an inefficient use of our CPF monies which are not channelled back to us.

      Just these would allow us to protect Singaporeans adequately.

      However – research has also shown that if a people don’t trust their government, they are less likely to trust the government with their monies.

      The thing here in Singapore is – the money is already taken away from Singaporeans and placed in different compartments – what we need is a government which would be transparent, to lay it out and say – here is where all the money is. Now, I’m going to be accountable and transfer them back to you.

      This is what we need in a (new) government.

      The solution is there. Question is, how do we get the political will in place?

  3. lost

    As I take it from this article, if there is sufficient budget surplus fund these schemes. The increase in tax for tobacco and liquor is just for more revenue ?

    • Roy Ngerng

      Hello,

      You are right. It’s more revenue.

      Their modus operandi, it would seem, would be to always collect more to “earn”, rather than to properly redistribute.

      If you look at the broader picture, Singaporeans are not paid the wages we should be paid in accordance with the cost of living. Also, the interest that is not returned on our CPF is a tax we are paying.

      All in, there are other areas which we are undercut on, even prior to us paying tax, which is a built-in automatic reduction of our monies and more revenue for them.

    • Johnson

      Tobacco & liquor tax were are raised to give the impression that now the government has increased spending, they need to get more money from other means to fund it.

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