Should we have welfare for Singaporeans?

Welfare for Singaporeans is one common narrative that many opposition parties have been rooting for.

Tharman Shanmugaratnam recently spoke out against proposals for minimum wage, handouts and universal free healthcare, by highlighting that eventually these goodies result in the middle class paying more taxes.

 

  1. Is the PAP against welfare for Singaporeans?

Welfare, in the PAP’s eyes, is giving money to a citizen WITHOUT properly deciding if this citizen needs it or deserves it. The PAP’s principle is that the government’s reserves should be spent with due diligence, and not spent freely without consideration towards the burden future generations have to bear if the spending is unsustainable.

In layman speak: DON’T SPEND TILL YOU PUT YOUR KIDS IN DEBT. SPEND WISELY.

 

  1. Does that mean Singaporeans don’t get any help from government?

In contrast, Tharman says Singaporean middle class gets $2 back for every $1 they give to government, compared to UK ($1.40) and Finland ($1.30). In Singapore, the poor get $6 back compared to the rich ($0.20).

 

  1. Do the middle income in Singapore get any help?

For the median income worker earning about $3,800 a month, Tharman says he gets back in education and healthcare subsidies. We found a graphic from Budget 2015 which sums up what middle income families get ON TOP of existing subsidies and transfers.

Budget 2015 Help for middle income families

 

Source: Singapore Budget 2015

In Singapore, those who have children or elderly to take care of will receive more help.

 

  1. Aren’t these subsidies and transfers considered welfare since it’s help from the government?

Welfare, in its traditional definition, is money given by the government to those unable to support themselves. However, it is often abused by those who are capable of supporting themselves but choose to remain unemployed, which burdens the rest of the citizens.

The Singapore government hence takes a different approach, helping those who help themselves.

For the low income who work, they get Workfare. For mothers who work, they get working mum benefits. Even grandparents who don’t work but take care of the grandchildren, their working children can claim tax reliefs. NS Men and wives get tax reliefs.

There are people who cannot work for various reasons, and if the government assesses that they didn’t work because of “no choice”, there is Chan Chun Sing’s Kueh Lapis assistance (Google “Multiple Lines Of Assistance”).

multiple-poverty-lines-singapore

 

Source: MSF

So whatever the government gives back to the people, it has been thought out and allocated according to whether the person needs it or deserves it, even if they are able to support themselves. This is not welfare.

Hence the PAP freaks out whenever handouts or welfare is mentioned, because harping on welfare is the easy way out to win votes without considering the financial future of Singapore’s children.

 

  1. Why can’t we just tax the rich and businesses more so that the middle income can get more subsidies?

If you tax the rich more, they will just deposit their money elsewhere or move overseas to work.

If you tax businesses more, they will move overseas to cheaper countries who allow them to import as many foreign talent as they want.

 

  1. What are the other sources of income for the Singapore government?

Besides income tax, property tax and corporate tax, the Singapore government also earns revenue through GST (but you don’t want that to increase right?) and investments (which fluctutates based on global markets).

So if the middle class gets more handouts, eventually Singaporeans will have to pay for it via higher taxes. Is this what you really want?

 

 

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Adrianna Tan

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