Higher taxes on the rich and being more open to using our national reserves: MP Seah Kian Peng goes On the Record

Higher taxes on the rich and being more open to using our national reserves: MP Seah Kian Peng goes On the Record

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Seah Kian Peng is MP for Marine Parade GRC and Group CEO of supermarket chain, NTUC FairPrice. (Photo: Facebook / Seah Kian Peng)

SINGAPORE: To the casual observer, Member of Parliament for Marine Parade GRC, Seah Kian Peng looks like an archetypal party man.

He joined politics in 2006 as a People’s Action Party candidate and his placid, good-natured demeanour could lead one to think that he routinely toes the party line.

However, upon closer scrutiny, one would realise that he has no qualms about speaking up against policies and urging the Government to effect more meaningful change.

More recently, Mr Seah’s speech in Parliament last month asking the Government to consider factors beyond economics when designing policy certainly caught the attention of many Singaporeans.

While acknowledging that the economic reasoning that the Government has applied to public policies has “stood us in good stead”, he emphasised the need “to make more room for the lexicon of morality, duty, relationships and trust”.

As an example to illustrate his point, he cited a controversial decision by the Ministry of Education to ensure that teachers pay for parking at school premises.

Teachers, he pointed out, pay for Children’s Day treats, and surprises for children, “all these things which cost them no small amount of money and yet whose value transcends price”, so why should the authorities be calculative when it comes to the parking issue.

As he sits before me, he emphasises that he is against thinking about any policy, not just this one, through purely an “economic lens”.

But when I ask him which other policies he thinks need to be looked at differently today and going forward, he seems to be at a loss.

“I must admit that right now, I can’t think of any immediately.”

But his track record proves his sentiment is genuine to some extent.

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To listen to the full interview, click here.

“WHY ARE WE DOING ALL THESE THINGS? WHO ARE WE DOING IT FOR?”

For instance, he spent years fighting for paternity leave so that fathers could be more involved in parenting, even if it involved the Government having to fund such leave.

“I became an MP in 2006. At that point there was no paternity leave at all. I remember raising it in six Committee of Supply debates. This was under the purview of the Ministry of Manpower. Each time, they said they were not ready yet and they needed to balance it out with employers’ concerns.”

Eventually, his call was heeded and paternity leave was gradually introduced. Today, fathers are granted two weeks of paid paternity leave funded by the Government.

In addition, working fathers can share up to four weeks of their wives’ 16 weeks of government-paid maternity leave. 

"I think fathers have an important role to play and if it means we must spend money to help them play a more active role, we should."

On this issue, he acknowledges there are still problems as studies show that in spite of being entitled to such leave, fathers are wary of taking time off due to anxiety that their employers will not take kindly to them being absent from work.

“I guess the practical day-to-day challenges overwhelm most of us. So, the need for all of us to step back and ask ourselves, why are we doing all these things? Who are we doing it for?”

On this, he feels the Government, being the largest employer in Singapore, can "take a greater lead and set an example for other companies".

He reiterates that even what Singapore has today took many years to achieve.

I ask if he ever feels frustrated when the Government is slow to act.

“Many big things start small and if one has strong convictions, we should not let up.  I certainly believe there are enough MPs with differing viewpoints and who are prepared to give their ideas and suggestions to ministers for their consideration. 

“At the same time, I must admit it is also easier to be an MP and make speeches than to be a minister and actually make real changes and to face the consequences for good or for bad. But I have the resolve and attitude of wanting to try and not to live a life of regrets.”

Over the years, he has also spoken up for more assistance for unmarried single mothers.

In 2016, the Ministry for Social and Family Development finally announced that the Government is ready to extend the full 16-week maternity leave accorded to married mothers, to single mothers as well.

Their children also now have access to a Child Development Account, a savings scheme to help pay for childcare and healthcare costs.

MPs and women’s rights groups spent years campaigning for this and other benefits.

Mr Seah feels even more can be done to address their needs.


Unmarried mothers still do not get the Baby Bonus cash gift and parenthood tax rebates that even widows and divorcees, receive. When it comes to housing, they have to wait until they turn 35 to buy an HDB flat under the singles scheme.

“The challenges of raising children by themselves is already hard enough. But they have to still think about something as basic as housing. So on our part as a Government, how can we help?”

The Government has traditionally been cautious about equalising benefits for this group as it says doing so could send out the wrong signals.  A common argument is that such a move might be seen as condoning having children out of wedlock.

“Frankly, I don’t believe in this. But even if as a result, one or two people start thinking along those lines, so be it. We shouldn’t stop ourselves from helping people just because we fear a small group could end up abusing a policy.”

This concept should apply to every policy, he says, including to how much help should be given to the low-income in society and how even means-testing to assess a person’s eligibility for assistance is conducted.

I put it to him that some have described means-testing as being overly intrusive, to the point that it discourages even the genuinely needy from seeking help.

Then there are others who claim that it is not granular enough.

“I have people telling me that just because a person lives in a three-room flat, it doesn’t mean they are poor. They can actually be very wealthy and we should scrutinise more to make sure we don’t give them rebates. It is always difficult in policy-making and it’s about striking the right balance. You also do not want to spend an inordinate amount of resources or time to administer some of these schemes. Of course, we need to make exceptions when the general proxies like housing and income are proven to be inaccurate in particular cases.”

He urges social service agencies to take a more “human” approach to those who are truly in need. 

“We should not formulate policies just to make sure that one person doesn't break the system. You end up inconveniencing the 99.9 per cent of us who are not intending to break it.  Put yourself in the beneficiary or the applicants’ shoes. For many, it’s not easy to ask for help.”

HIGHER TAXES ON THE RICH

As we continue talking, he acknowledges that while he wants even greater social spending on various groups in Singapore in order to narrow inequality and increase social mobility, it’s going to cost. The economic aspect cannot be divorced from the equation entirely.

“We need to look out for the lower-income group to the extent of being deliberate in giving more help. I’m all for more progressive taxes on the top income earners. Those who have made it really ought to find ways to help others because they start life and their children start life already disadvantaged. We need to help them move up in terms of social mobility. We shouldn’t be shy about it,” he says.

For example, over the years, he has suggested the Government reconsider how scholarships are awarded. The rich should get “nominal” ones which recognise their results but come with no money. The money should be awarded instead to other deserving students from less privileged backgrounds.

He has also suggested households that own more than one car pay markedly higher additional taxes on their second and subsequent vehicles.

However, when I ask whether he thinks capital gains and wealth taxes should be introduced, he hesitates.

“The rich can afford to pay higher taxes but also, you cannot make the poor, rich by making the rich, poor. So I’m not sure about that. But I believe that in terms of luxury taxes and even income tax, more can be done.”

He thinks we should “get away from overly comparing ourselves with Hong Kong” where the tax rates are generally lower.

“Once we are fixated with that, it means the ability for us to adjust some of the taxes is very limited. We need to be competitive and we should.  But as with all things, we need to look at issues holistically. There are many factors that investors would take into account - tax rates are just one such factor. But on many other factors - environmental, social, security, infrastructure, many of my friends tell me Singapore compares very favourably against Hong Kong."

When it comes to specifics though, I'm sceptical about how bold he really is, so I ask him which countries Singapore should compare itself against instead and how much he thinks income tax on the highest income earners should increase by.

On this, he is non-committal.

“The Minister for Finance will be better-placed to pin the right numbers. The key is that for corporate tax, I think there is room for it to be adjusted upwards and the same for personal income tax for the top earners.

“I do pay quite a lot of taxes myself but I think it’s something we must be willing to do. When you have more, you should give more.”

Over the years, among other things, he has urged the Government to review the quantum of Public Assistance to the needy more regularly in order to keep pace with the cost of living.

But he clearly has an idea of what would be considered going overboard when it comes to taxes and social spending.

“I was on a business trip in Copenhagen in Denmark. So I was talking to my Danish friend. He told me the income tax goes up to almost 60 per cent and their equivalent of Goods and Services Tax (GST) was 25 per cent. He said it’s okay because at the same time they have universal education and healthcare, but the difference between employment benefits and minimum wage is not very wide, so in his opinion, the incentive to work wasn’t quite there.”

I remark that at this point, he seems to be echoing the Government's narrative on this issue even though more liberal analysts have said Scandinavian countries such as Denmark could be a model for Singapore. 

"It's about balance," he says with a laugh.

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"Those who have made it really ought to find ways to help others... We need to help them move up in terms of social mobility. We shouldn’t be shy about it," says Seah Kian Peng. (Photo: Facebook / Seah Kian Peng)

GST HIKE MAY STILL BE NECESSARY

While he feels the rich can afford to be taxed more, I wonder what his stance is on the impending GST hike announced in this year’s Budget. It is set to increase from 7 per cent to 9 per cent sometime between 2021 and 2025.

Would this be necessary if corporate taxes and income taxes on top earners were to be increased?

“Even if taxes on the top earners go up, we must remember that the demands on social spending are also going to go up quite a lot. Nobody likes a tax increase, but we have to be objective. We will be investing much more going forward - in our nursing homes, hospitals, roads and education. So a GST hike might be needed, but the Finance Minister has given a range. So if things work out, we may not have to increase GST so soon.”

While he acknowledges several times during our interview that he falls in the category of a high-income earner and therefore would be taxed more if his ideas materialise, he also reminds me that part of the reason he is able to empathise with the lower income is because of his own circumstances as he was growing up.

“I won’t say I’m a socialist but I’m a bit more, left-of-centre.”

A HARD CHILDHOOD

It's partly because he still remembers what living through financial hardship was like.

He often had to make hard choices, he says. On certain days, it meant choosing between a bus ride or having a meal.

His father was a line worker in a printing firm and his mother, a housewife who took on sewing gigs to make ends meet.

He went to a neighbourhood primary school along with his three siblings. Thereafter, they all made it to top schools such as Raffles Institution and Raffles Girls’ School.

A Colombo Plan scholarship allowed him to study at the University of New South Wales in Australia.

While there, he learnt an important life lesson. 

"In Australia, every profession is respected. You could be a bricklayer and do it well and proudly and you can make a living. Whichever profession they were in, they felt dignified."

Singapore has some way to go in that regard, he says. 

He welcomes the Progressive Wage Model to elevate the status of low-income workers, but says that each of us needs to do more to instil a sense of respect for the work they do. 

"In a country like Australia, almost every student will do part-time work of some sort during school holidays. They could be working in a supermarket, in a restaurant. They might also do part-time work during the school year. And this is regardless of their socio-economic background. This builds a certain sense of resilience, it builds a certain sense of appreciation. Whereas in Singapore, well-off parents will tell their children to spend their  time studying or doing something else."

He too, took on odd jobs including as a painter and kitchen helper during university vacations. 

Mr Seah credits his success throughout school to the people around him. 

“We received help from different groups of people. Our relatives chipped in to help us get by. I was also appreciative of the clan associations that gave us a few bursary awards. What stayed with me was the fact that whenever we are in the position to help others, we should. We were fortunate to grow up in a time when social inequality was less stark and the rate of social mobility was higher because economic growth was swifter. Things are different now. Aside from taxes, we should also make charitable contributions when we can. 

“Suffice to say it is a significant portion of my MP allowance and salary that I give. We all contribute in different ways - time and money and for those who are in a position to do both, it is a real privilege and blessing.” 

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"Let’s also not lose sight of the importance and the need to address short-term issues,” says Seah Kian Peng. (Photo: Facebook / Seah Kian Peng)

USING SINGAPORE’S RESERVES

I raise another issue that he has alluded to in the past – that the Government is sometimes too far-sighted in policy planning and does not do enough in terms of taking care of short-term problems affecting citizens.

To tackle these, he has suggested being open to dipping into our national reserves, but “for the right reasons”.

“We are worried about whether Singapore survives 10 years from now, 20 years from now. Those are important things because we always want to make sure that the next generation inherits a functioning ship, not a broken ship. I think those are the good things but it’s about striking a balance. Let’s also not lose sight of the importance and the need to address short-term issues.”

But what does he consider “the right reasons” to dip into the reserves?

He cites how the Government invested S$1.1 billion in the Bus Service Enhancement Programme in 2012 to ease crowding on buses.

“That’s one short-term issue that can be considered a “right reason”. We don’t always only have to talk about our 10-year plan to beef up the MRT network and such things.”

However, what would qualify as "the right reason" in today's context? He isn't able to narrow it down to anything specific. 

“I think the economic clouds, the uncertainties and a lot of restructuring is taking place, creating a lot of anxiety amongst particularly the PMETs and the older groups of Singaporeans - the fear of being displaced, the fear of not being able to find a job after they’re laid off or just going through the future jobs. Are they able to hack it? I think these are the things which we need to certainly keep an eye out for.”

However, he acknowledges that through programmes such as SkillsFuture, the Government is doing something on that front and that at this point, there is no pressing need to use the country’s reserves.

“No one is able to predict with certainty what’s going to come, but I think the preparedness to act decisively is important. If it means having to go into the reserves, I think we must. There’s no sacred cow. It must be an option that’s on the table.”

NOT SHYING AWAY FROM CHALLENGES

Even though he fervently believes in continuing to make a difference in the policy landscape, when asked about the highlights of his political career so far, he goes all the way back to 2010 when he was challenged by then Community Development, Youth and Sports Minister Vivian Balakrishnan to come up with amendments to the Maintenance of Parents Act.

Mr Seah had highlighted a sharp increase in the number of parents filing applications with the Tribunal for the Maintenance of Parents and had suggested that the Commissioner of the tribunal be given more powers to obtain data on the whereabouts and financial status of children who were not supporting their parents.

“I’m not the type to shy away from a challenge, so when the minister asked me to work on it, I accepted it.”

He was a first-term MP at the time and made legislative history as the first PAP MP to propose a Bill in 36 years. 

To help him with the process, he assembled a workgroup comprising three Nominated Members of Parliament and seven MPs.  

Ultimately, the amendments to the Act included compulsory mediation for parents who want to claim financial support from their children before they can go to the tribunal.

Also, the tribunal's commissioner now has access to government databases, like CPF and tax records, to help track down children and assess their ability to support their parents.

I remark this sounds intrusive and ask why he feels so strongly about legislating filial piety.

“All things said and done, they are your parents, so I think no matter what the parents have done to the children, they are still your parents.”

What about in cases where children don’t want to contribute to parents whom they deemed have failed them or abused them?

“That’s a real concern which was why in the end, we said we need to try reconciliation first, hence mediation. If there are cases where reconciliation cannot happen, then we take those reasons into account and we don’t force it.

“There are also cases where the children are really unable to support financially and we don’t force that either. But I feel we have to try.”

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“For me, it’s just about deciding what kind of society we want," says Seah Kian Peng. (Photo: Facebook / Seah Kian Peng)

WHAT KIND OF SOCIETY DO WE WANT?

I ask him if this is merely designed to ensure that the state doesn’t have to provide support for needy elderly.

“For me, it’s just about deciding what kind of society we want. Filial piety is important. Neither do we want a situation where people easily pass the buck to the state. But if you really can’t, the state will still step in.”

Indeed when it comes to family-related issues, he has made several headlines.

In 2013, then National Development Minister Khaw Boon Wan called him the "father" of the Parenthood Priority Scheme which gives housing priority to young couples with children.

Mr Seah had suggested it three years before that.

His own relationship with his family is dear to him. His father passed away last year at the age of 88.

Towards the end of his life, Mr Seah would help him shave and cut his toe nails.  

He is quick to point out that his brother, two sisters and wife were very involved in looking after his dad too.

Today, his mother has dementia.

“That presents another set of issues but again, I’m fortunate that I have my siblings, my wife, helping out in caregiving.”

This is partly why he feels more needs to be done to help caregivers especially in terms of affordable professional nursing and care services and caregiver leave.

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Seah Kian Peng is also Group CEO of NTUC FairPrice. (Photo: Seah Kian Peng)

SOCIAL RESPONSIBILITY IN BUSINESS

Aside from policy issues, I realise we need to talk about business as, in addition to his role as MP, Mr Seah is Group CEO of NTUC FairPrice, the supermarket chain first set up by the National Trades Union Congress in 1973 to moderate the cost of living.

He admits that while it has a focus on social responsibility, it also has to keep an eye on profits.

“It’s a very difficult thing to do, to balance the two. It is not binary or mutually exclusive. For us, doing well allows us to do more good for the community.”

FairPrice has become a “multi-format” chain. For instance, in addition to FairPrice supermarkets for the masses, there are also FairPrice Finest stores catering to customers who can afford more upscale groceries.

I wonder what he would say to customers who feel FairPrice products can afford to be cheaper.

“We try and we want to do more. Our scorecard is a balanced one. It requires us to do well on our social mission, but also on our financials so that we can continue to fulfill our social mission. We are here to stay and help our customers through difficult times as well. For example, when GST was first introduced, we absorbed it for a period of time.”

In recent years, he admits that competition is stiff especially with e-commerce retailers entering the market.

“Frankly, it’s all evolving at a much faster pace than I thought. We are the incumbent and it is the curse of many incumbent leaders that it is much easier to become complacent. Today, we are going bigger on data analytics and this is allowing us to be able to serve our customers better. If I could unwind the clock, I would have done all this a lot earlier and invested even more. But it’s not too late.”

Ultimately, he wants to be remembered for making a mark in both the business and political spheres as “someone who helped”.

“I want to be remembered for having done good for the organisation and to let people see that the team puts in effort for society at large. In politics, I get a lot of satisfaction when I’ve made a difference to an individual. When someone comes up to me and says, 'Mr Seah, you’ve helped improve my life.' I think that’s good enough.”

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