Oxfam’s Commitment to Reducing Inequality Index 2018 ranked Singapore 149 out of 157 countries, dropping 63 spots from its 86th ranking last year. Oxfam accused Singapore of having many “harmful tax practices”, including extremely low personal income tax rates, of 22%, for the highest earners and encouraging the rich to avoid or evade taxes, resulting in countries collecting far less tax which can be used to tackle inequality. Also, Oxfam claims that Singapore’s public social spending on education, health and social protection is relatively low (39% of our budget whereas other countries use almost half of theirs) as well as having weak labour and gender laws.
However, Social and Family Development Minister Desmond Lee defended Singapore by explaining that its tax rates are competitive due to fiscal prudence and a diversified tax base. This allows Singapore to “support substantive economic activities” which is especially important for a resource-poor country heavily reliant on being a free trade hub. Almost half of the population does not even need to pay income tax, and most own their own homes. Despite having lower social spending, Singapore has one of the best infrastructure, healthcare and education systems worldwide. Lower-income households have also experienced comparatively faster income growth over the last decade. Thus, he emphasises that “it is more important to look at the outcomes achieved” rather than these shaky indicators.
Why is this significant?
With recent conversations about whether Singapore really is a meritocracy, this report further undermines the efforts of the Singapore government to address inequality such as doubling its pre-school sector spending and supporting low-wage workers. Although Oxfam’s report may seem problematic as it assumes that high taxation and public expenditure equates to combating inequality, it serves as a timely reminder that class divide and elitism remain deeply entrenched in our society. More steps need to be taken to provide a discrimination-free home for all Singaporeans.