Review and Publish Results of Government's Measures to Reduce Socio-economic Inequality

6 Mr Leon Perera asked the Minister for Finance whether the Ministry will regularly review the Government's commitment to reduce socio-economic inequality and publish the results of such reviews in light of recent findings from a study by Oxfam and Development Finance International that ranks Singapore in 86th placing in the world in this regard.

The Senior Minister of State for Finance (Ms Indranee Rajah) (for the Minister for Finance): Mr Speaker, the Government is concerned about inequality and takes serious efforts to address it. Our concern underpins the design of many of our policies and schemes.

Our key strategy for tackling inequality is to ensure that all Singaporeans, especially those who are less well off, are able to access good opportunities, earn higher incomes and enjoy a higher standard of living. We do this by providing the necessary support to our citizens at various stages of life, with more support going to the disadvantaged and vulnerable groups.

We invest heavily in education so that every child, regardless of socio-economic background, can have access to a good education and develop to his full potential. A child who attends primary and secondary school receives around $11,000 in educational subsidies per year. Children from lower-income families receive even more support through the Ministry of Education's Financial Assistance Scheme and bursaries. Students with more needs receive additional support through various support programmes. These ensure that we preserve social mobility for our next generation.

For workers, we introduced the SkillsFuture movement to support skills upgrading so that they can take on better jobs. We also have the Progressive Wage Model to help lower-wage workers upskill and earn better wages, and Workfare to supplement their income. We have seen encouraging results so far. In the last five years, incomes of lower-wage workers have grown in tandem with median income growth.

For those in their silver years, we have introduced the Silver Support Scheme to provide additional support to seniors who have low incomes through life and have little family support.

Our means-tested health and long-term care subsidies also ensure that those with lower income receive more assistance, while the Goods and Services Tax Voucher scheme supports lower-income families with their day-to-day expenses.

All these schemes add up to a system that is highly progressive. All in all, low-income households receive almost $4 of benefits for every dollar of tax paid, while the middle-income households receive almost $2 for every dollar of tax paid.

Mr Perera referred to the ranking by Oxfam and Development Finance International. The rankings were based on the absolute amount of social spending, with the assumption that the higher the level of spending, the better will be the situation, regardless of whether the spending leads to effective outcomes. The authors have acknowledged the limitations of their study in representing the different circumstances of individual countries. This is the case for Singapore, where we target our subsidies and assistance to those who are more needy. This focused approach to reducing inequality enables us to keep our tax burden low while ensuring our social expenditure is prudent, fair and progressive.

Our approach has served us well so far. We have kept inequality in check, even as income gaps widen elsewhere. Our Gini coefficient has moderated over the last five years. Our people have also seen good income growth with the lower income seeing their real per capita household income grow by close to 20% over the last five years.

Such indicators are published every year in the Key Household Income Trends report by the Department of Statistics, and every two years in the biennial Singapore Public Sector Outcomes Review (SPOR) by the Ministry of Finance. The Government has been and remains committed to addressing inequality.

Mr Speaker: Mr Leon Perera.

Mr Leon Perera (Non-Constituency Member): I thank the Senior Minister of State for the detailed and comprehensive answer. I have two supplementary questions.

Firstly, in light of the fact that our Gini coefficient, which the Senior Minister of State alluded to, is still among the highest among developed countries in the world, and given the fact that even though the Gini coefficient refers to inequality of outcomes and the inequality of outcomes can impact inequality of opportunity, how confident is the Government that it is keeping abreast of international best practices in the field of ameliorating and mitigating inequality of opportunity? This is a field where I think the policy is evolving worldwide; there are different innovations. So, how confident is the Government that it is being done?

And to link to that, my second question would be: would the Government consider publishing at regular intervals a report which measures the state of equality of opportunity, looking at indicators – not just the indicators that the Senior Minister of State mentioned like absolute incomes – but also measures like social mobility which are more infrequently measured at the current point. Could the Government consider that kind of regular measurement publication and public debate on this issue, given the importance of the issue and how it cuts across so many other areas of policy?

Ms Indranee Rajah: Mr Speaker, our approach on this matter has not been to say that once in every few years, we will do a review and do a check and see where we are on social mobility. For this Government, our entire approach and, in fact, the raison d'être on which Singapore was founded on in 1965, was really to be a place where everybody can progress.

In fact, if we look at the proclamation of Singapore's Independence, it said that this would be a country founded on the principles of liberty and justice, and ever seeking the welfare and happiness of her people in a more just and equal society.

What that means is that from Day 1, this Government is committed to the progress of its people, and that includes reducing the gap among people who have unequal situations. That is the reason why every year, during Budget, we review what we can do better. It is part of each Ministry's duty and responsibility to see where the gaps are. The report is actually, as I indicated earlier, shown in the SPOR report. We also publish the socio-economic indicators and outcomes every year in the Key Household Income Trends report by the Department of Statistics.

So, in other words, this is not something we do every five years or every 10 years. It is part and parcel of the day-to-day work of the Ministries, and we look at it every Budget as well. Occasionally, we may have bigger reviews but it is really something that is done each and every day of the Ministries' work.