Last Saturday, I gave a talk on the income inequality in Singapore. I shared how the income inequality in Singapore was actually going down in the first 20 years of Singapore, under the Old Guards. However, from the mid-1990s onwards, income inequality started to clearly shoot up.
Income inequality in Singapore has occurred because of the low wages and highest social security CPF contribution rate in the world that Singaporeans have to pay on one end, but the highest salaries and lowest taxes that the high-income earners get among the developed countries, on the other end. On top of that, the PAP government spends the least on social protection expenditure on Singaporeans, yet expect Singaporeans to pay the most out of our own pockets for these basic necessities, such as healthcare, education and retirement, but also make us pay high indirect taxes and also earn high profits for themselves. As a result of the low government expenditure on social protection, this has resulted in social problems such as Singaporeans becoming more self-centred and less trusting. The prisoner rate in Singapore is also the second highest among the developed countries and Singapore also has one of the lowest social mobilities. Singaporeans also have to thus work the longest hours in the world so as to be able to make ends meet.
The high income inequality has also resulted in slower economic growth in Singapore.
The income inequality in Singapore really started being exacerbated from the mid-1980s, when Lee Kuan Yew got Rothschild in to advice on the GIC in 1981. Thereafter, the PAP changed its constitution in 1982 to remove the objective of abolishing income inequalities. In its place, the PAP wanted Singaporeans to be “self-reliant”. But from then on, it started creating policies such as the CPF Minimum Sum, Medisave and MediShield, as well as to decrease CPF interest rates, and increase public flat prices and university tuition fees, so as to make money off Singaporeans.
The income inequality in Singapore is thus single-handedly created by the PAP. This has resulted in more than half of Singaporeans being unhappy with the policies.
In the talk, I also show how the tax structure in Singapore benefits the rich, as well as the PAP among them, and how CPF is really a tax and is not your money.
Towards the end of the talk, I also list down some solutions that other top economists in the world have proposed, to reduce income inequality and promote economic growth, and thereby encourage domestic growth, and also what you can do to stop the scourge that the PAP has done to Singapore.
Watch the video for the talk, and the facts and statistics to see how the income inequality that the PAP has created has become detrimental to Singapore’s future. I spoke a bit too fast at the talk, my apologies!