Under The Angsana Tree: Singapore in bottom 10 of countries tackling inequality

Update 21 Apr 2020

What is Ho Ching's Salary then? If $99m is FALSE then what is the Truth?.....

Global index reveals governments split between fighting and fueling inequality

Nigeria and Singapore are among a group of governments that are fueling inequality, according to a newly released edition of the Commitment to Reducing Inequality Index developed by Oxfam and Development Finance International.

The Index ranks 157 countries on their policies on social spending, tax, and labor rights - three areas the organizations say are critical to reducing inequality. It found a clear divergence between governments such as the Republic of Korea, Indonesia, and Georgia that are taking positive steps to reduce the gap between rich and poor, and governments that are making it worse. However, all countries, even those at the top, could be doing much more. The Index comes ahead this week’s meeting of finance ministers, central bank governors, and other economic leaders at the World Bank and International Monetary Fund Annual Meeting in Bali, Indonesia.

The Index shows:

Singapore is now in the bottom 10 countries in the world at tackling inequality ranks 149, despite being among the world’s wealthiest nations. This ranking is, in large part, due in part to a new indicator on the extent to which a country’s policies enable corporate tax dodging. It also has no minimum wage to its workers, except for cleaners and security guards.
Nigeria ranks last for the second year in a row due to low social spending, worsening labor rights violations, and poor tax collection. The ranking reflects the well-being of the country’s population: one in 10 children die before their fifth birthday.

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The Commitment to Reducing Inequality Index 2018

Table 2: CRI Index ranking out of 157 countries – the 10 countries at the bottom of the Index

Singapore is now in the bottom 10 countries in the world in terms of reducing inequality. This is partly because of the introduction of the new indicator on harmful tax practices, because Singapore has a number of these. It has increased its personal income tax (PIT) by 2%, but the maximum rate remains a very low at 22% for the highest earners. Apart from tax, its low score is also due to a relatively low level of public social spending – only 39% of the budget goes to education, health and social protection combined (way behind South Korea and Thailand at 50%). On labour, it has no equal pay or non-discrimination laws for women; its laws on both rape and sexual harassment are inadequate; and there is no minimum wage, except for cleaners and security guards.

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Singapore ranked as one of the 10 worst countries in tackling inequality

A crowd in Singapore

Singapore is one of the worst performing countries in the world at tackling inequality, according to a newly released edition of the Commitment to Reducing Inequality Index developed by Oxfam and Development Finance International.

The index, which ranks 157 countries on their policies on social spending, tax, and labor rights is being published ahead of this week’s meeting of finance ministers and other economic leaders at the World Bank and International Monetary Fund Annual Meeting in Bali, Indonesia.

Singapore ranks 149 out of 157 countries despite being one of the world’s wealthiest nations. It is one of only three high-income countries in the bottom 50. The report says that the government's poor performance across the three indicators considered critical to tackling inequality is fueling inequality in the country.

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Singapore ranked in bottom 10 out of 157 countries for efforts to reduce inequality

Being a country that strives to be first/biggest/best in all we do, the fact that we’re near the bottom of this list is probably something that’s hard to swallow for our nation’s leaders. On The Commitment to Reducing Inequality Index 2018, which is a global ranking of governments based on their efforts in tackling the gap between the rich and the poor, Singapore came in at the low, low place of 149.

Singapore plummeted 63 places from its 86th position last year, falling below Southeast Asian countries like Myanmar (#138), Cambodia (#121), Vietnam (#99), Indonesia (#90), Malaysia (#75), and Thailand (#74). Out of 157 countries, we were positioned just below Bangladesh and above Laos, which was followed by Madagascar, Bhutan, Sierra Leone, Chad, Haiti, and Uzbekistan, with Nigeria coming in last. At the top of the index, Denmark took first spot, followed by Germany, Finland, Austria, Norway, Belgium, Sweden, France, Iceland, and Luxembourg. Representing our region, Japan was the only Asian country in the top 15, coming in at 11th place.

The annual list is compiled by Oxfam, a UK-based charity organization that fights poverty, and it’s put together based on factors like social spending on health, education and social protection, wages and labor rights, and progressive taxation, where corporations and the rich are taxed more to redistribute resources in society.

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A report says Singapore is one of the worst at tackling inequality – here’s why

S'pore is among the bottom for tackling inequality, Oxfam’s report says. Pixabay

In particular, the report highlighted Singapore’s low tax rates – which cost the economy “hundreds of billions of dollars” that could be used instead to tackle inequality. It said the country had a number of “harmful tax practices”, such as capping the maximum rate for personal income tax at a “very low at 22% for the highest earners”.

Other factors contributing to Singapore’s poor showing were what the report identified as low spending on education health and social protection – despite being among the wealthiest countries in the world. Just 39% of Singapore’s budget goes to education, health and social protection combined, compared to countries like South Korea and Thailand, which dedicated half their national budgets to social spending, the report said.

Oxfam also said that Singapore lacks a minimum wage, and non-discrimination and equal pay laws for women at the workplace.

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Singapore in bottom 10 of countries tackling inequality: Oxfam index

Nigeria, Singapore & India are among countries fuelling the gap between the super-rich and poor, aid agency Oxfam said on Tuesday as it launched an index spotlighting those nations doing least to bridge the divide.

South Korea, Georgia and Indonesia were among countries praised for trying to reduce inequality, through policies on social spending, tax & labour rights.

Oxfam said inequality had reached crisis levels, with the richest 1% of the global population nabbing four fifths of wealth created between mid-2016 and mid-2017, while the poorest half saw no increase in wealth.

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Singapore worse than Bangladesh at tackling inequality

Elderly people in Singapore especially struggle with the rising cost of living. Many collect recyclables to sell in order to make ends meet. Source: Roslan Rahman/AFP

SINGAPORE is in the bottom 10 worst countries in the world at tackling inequality and fairly taxing corporations. According to a new study, the developed city-state was beaten in the rankings by third-world countries like Bangladesh, Afghanistan, and Burundi – one of the world’s poorest nations.

The report from Oxfam and Development Finance International details how Singapore’s ability to care for it’s most vulnerable has deteriorated over the last year due to a focus on harmful tax practices which Singapore espouses.

In fact, Singapore is the worst in the world when it comes to tax, due in part to its failure to appropriately tax the richest in the country. While the government has increased the personal income tax by two percent, the maximum bracket for the highest earners is still only 22 percent.

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Singapore in bottom 10 of Oxfam index on efforts to tackle inequality

S'pore ranked 149 in an Oxfam index of 157 countries based on efforts to tackle the gap between the rich & poor

The Commitment to Reducing Inequality (CRI) Index 2018 was released by the global developmental charity agency on Tuesday (Oct 9).

Singapore ranked ahead of 8 countries, including Nigeria (157) and Bhutan (152), but below the likes of Myanmar (138), Timor-Leste (132) & Vietnam (99).

Singapore ranked 86 in the agency’s 2017 CRI Index, with Oxfam partly attributing this year’s sharp drop to the introduction of a new indicator on "harmful tax practices". Singapore "has a number of these", it said, citing tax incentives such as those for the maritime and financial sectors and a global trader programme.

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Singapore refutes Oxfam report on its performance in tackling inequality

The Oxfam report criticised Singapore for spending "well below countries such as South Korea & Thailand" on healthcare, education and social protection. FOTO: ST FILE

The Republic may not spend as much as other countries on healthcare and education, but the outcomes it achieves in these areas are significant, & better than most.

Social & Family Development Minister Desmond Lee made this point on Tuesday (Oct 9) when he refuted a report which criticised Singapore for being "one of the worst-performing countries in the world at tackling inequality".

The Commitment to Reducing Inequality Index, compiled by non-profit organisations Oxfam and Development Finance International, ranked Singapore 149th out of 157 countries - below Ethiopia and Afghanistan, and above Bhutan & Haiti.

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Real outcomes in Singapore suggests inequality index is flawed: MSF

Among the poorest 10% of Singapore households, 84 per cent are home owners, according to the Ministry of Social and Family Development. TNP FILE FOTO

Developed by Oxfam and Development Finance International (DFI), the Commitment to Reducing Inequality (CRI) Index 2018 ranks the commitment of governments to close the wealth gap by looking at 3 key policy areas:

Social spending on public services, such as health, education and social protection
Progressive tax policies
Higher wages for ordinary workers and labour rights.

In the 76-page report, Oxfam and DFI said they believe inequality is a product of policy choices and the CRI index looks to hold governments accountable, while improving data collection.

It was first introduced last year, with Singapore coming in at 86th. This year's edition adds new indicators. The report lists the following reasons for why Singapore ranked so low this year:

Singapore has a number of harmful tax practices, including corporate tax incentives for intellectual property development, international traders and the finance and maritime sectors.
Singapore's maximum personal income tax rate remains low at 22%, despite a rate increase for top earners of 2 percentage points.
Singapore's public social spending is relatively low, making up only 39% of its budget, behind South Korea and Thailand at 50%.
Singapore has no equal pay or non-discrimination laws for women, its laws on rape and sexual harassment are inadequate and there is no minimum wage except for cleaners and security guards.

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Oxfam rejects Singapore defense of low taxes

A view of the central business district in Singapore May 24, 2018. REUTERS/Edgar Su

Oxfam on Wednesday rejected Singapore’s defense of its low taxes after the NGO ranked the wealthy city state among the 10 worst-offending countries in fuelling inequality with its low-tax regime.

Oxfam’s Commitment to Reducing Inequality (CRI) index ranked Singapore 149th of 157, below Afghanistan, Algeria, and Cambodia, and marginally higher than Haiti, Nigeria and Sierra Leone. The index assesses social spending, taxation and labor policies. It ranked Denmark, Germany and Finland as the top three.

Oxfam’s head of inequality policy, Max Lawson, said the impact of Singapore’s tax policy went beyond its borders, serving as a tax haven for the rich and big corporations. "Singapore’s harmful tax practices mean that they are eroding the revenue of other countries in the region and globally, revenues that those countries could be investing in schools and hospitals,” Lawson told Reuters.

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2 S’poreans & a minister explain inherent problems with Oxfam report on S’pore’s inequality efforts

There’s a report from the American branch of a UK-based charity called Oxfam that ranked Singapore at the bottom 10 out of 157 countries in terms of its commitment to reduce inequality,

On Tuesday evening, the Minister for Social and Family Development Desmond Lee responded with a statement that said, in summary, the following:

That the Oxfam index assumes that high taxation means a high commitment to reducing inequality, and Singapore’s taxation is low (almost half the population doesn’t pay tax), but that same half benefit “more than proportionately” from the infrastructure and social support provided by the state.
That no other country comes close to Singapore in terms of home ownership — among the poorest 10 per cent of Singaporeans, 84 per cent own their own homes, far above any other country.
That we spend very little (4.6 per cent) on healthcare, Oxfam points out, but the Economist Intelligence Unit ranks us number two in the world for healthcare outcomes, and the World Health Organisation ranks our system 6th in the world. Our life expectancy at birth is also longer than that of Britain and the U.S., and our infant mortality is among the world’s lowest.
That even though we don’t have a minimum wage, there are schemes that support lower-income workers, and a progressive wage model for cleaners and security guards, for instance. He also adds that our lower and median-income households saw faster wage increments over the past decade than similarly-paid households in other countries.

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Singapore Fares Poorly On Tackling Inequality

The city-state is one of the few remaining countries with no universal minimum wage, noted Oxfam

With Singapore ranked among the bottom 10 countries globally on tackling inequality, Oxfam International has urged the city-state’s policymakers to increase social spending, strengthen labour rights and enact anti-discrimination laws, reported the Business Times.

Out of the 157 countries studied by Oxfam, Singapore was listed at 149. The index looks at three factors – the social spending of a country on public services such as health, education and social protection.

Oxfam noted that Singapore fares poorly as its combined spending on health, education and social protection is “well-below” countries like Thailand and South Korea, which spend 50 percent of their budget in the said areas. The city-state is also one of the few remaining countries with no universal minimum wage, it added.

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Social class divide among Singaporeans

Surprise surprise, there’s a social class divide in Singapore

Forget race. Forget religion. A survey by the Institute of Policy Studies (IPS) found that the social class divide among Singaporeans is more apparent than it seems. The survey found private housing dwellers tend to mix with people living in the same housing type, instead of those in public flats. On average, someone who stays in private housing has ties with 3.05 people who live in private housing and only 2.6 people who live in public housing. In comparison, on average, someone who stays in public housing has ties with 4.3 people who live in public housing and only 0.8 in private housing.

It’s not just housing. The survey also found that people who go to “elite” tend to socialise with those who went to similar schools. On average, someone who went to an elite school has ties with 2.7 people who also went to “elite” schools, and 2.1 people who went to a “non-elite” school. In comparison, on average, someone who went to a “non-elite” school has ties with 3.9 people who went to “non-elite” school and only 0.8 people who went to an “elite” school.

In short, the survey shows that there is a very strong tendency for people of the same social class to flock together. Dr Vincent Chua, one of the researchers behind the survey said: “Even if you give people equal opportunities, they will still gravitate to hang out with their own kind. So we have to think of ways to disrupt this. People like to be with people like themselves”

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5. 73 per cent of Singapore’s wealth is owned by the wealthiest 20 per cent.

This is based on an estimate of Singapore’s wealth distribution by Credit Suisse, as there is no official statistics on how wealth is distributed here. The bottom 20% owns 1% of the overall wealth.

But the wealthiest 20% are not homogeneously wealthy. Dr Ong pointed out that looking at 20% of people at a time is a broad measure.

“For example, within the top 20%, you have the one-percenters who are multi-billionaires and fly around on private jets, “ she said. “And you have people like you and me who are earning a decent living but we're still taking out mortgages for our homes.”

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Full Coverage:

Why Singapore gives top priority to fighting income inequality