Wealth tax, scrap secondary school streaming: MPs suggest measures to tackle inequality, social stratification
SINGAPORE: Getting the rich to pay more taxes, giving vulnerable groups better employment opportunities, and slaying the “sacred cow” of streaming in secondary schools.
These were some suggestions Members of Parliament (MP) put forward to tackle inequality in the areas of income and employment, and social stratification in education during the second day of the Budget debate on Wednesday (Feb 27).
MP for Fengshan SMC Cheryl Chan said Singapore has “done well” when it comes to distributing resources equitably, as its system is built on meritocracy, a fair and progressive tax system, and a redistribution of wealth which focuses on social outcomes.
But over the last decade, there is evidence that the increase in wealth inequality has become greater than income inequality, she said.
“Those with the wealth are not only on a better footing to accumulate more, they have even better access to resources that helps preserve their wealth,” she said.
With that, Ms Chan asked if there was a possibility of introducing a net wealth tax and inheritance tax for ultra-high net worth individuals, who make up 1 to 2 per cent of society.
“In the spirit of giving and sharing, will the ultra-high net worth individuals be willing to share more of their wealth to uplift the vulnerable and less privileged communities?” she asked.
While Ms Chan acknowledged that subsidies like the Silver Support Scheme as well as GST and transport vouchers help lower-income groups defray basic living expenses, she said consumption taxes indirectly raises the general cost of living.
“In order to maintain fiscal prudence, we need new revenue sources to sustain the many programs that may have a long tail in the years ahead,” she added.
Ms Chan also encouraged the top and middle tiers of the economy to pay more for the services of the lower-income groups.
“The employers too have a fair share to play in this as they balance their profits, re-invest in the workers and give the workers a decent wage to begin with,” she said. “It is not how large or small the action is, but what we are willing to do and to what extent to effect the change.”
While Ms Chan said the current Progressive Wage Model and Workfare Income Supplementary Scheme help raise the wages of lower-income individuals, she questioned if such schemes are sufficient in today’s context to meet their needs.
“I feel that to effectively make a difference that impacts and uplifts the lower percentile group, in particular those with young families, giving them access to resources - especially a decent living wage, so that each worker at the end of the month would have more to spare - is actually more critical,” she stated.
Still, Aljunied GRC MP Sylvia Lim said “compensatory policies in the form of social safety nets” remain necessary to “cushion citizens who face disruption and are unable to fit into different industries immediately or perhaps unable to catch up at all”.
For example, the Adapt and Grow initiative - which was designed to help Singaporeans affected by economic slowdown and restructuring - has helped more than 76,000 job seekers find new employment from 2016 to 2018.
“While the numbers seem impressive, it would be useful to know whether these job seekers who switched industries had comparable remuneration or had pay cuts, and how many could not find new employment even though they tried to sign up for the initiative,” Ms Lim said.
HELP THE VULNERABLE
Beyond the lower-income group, MP for Ang Mo Kio GRC Intan Azura Mokhtar urged the Government to help other vulnerable groups like those with special needs and mental health challenges.
“These two groups of individuals continue to face stigmatisation and challenges in their effort to be like everyone else and in leading a life as normal as possible,” she said, adding that they need time and space to adjust to their work environments and commitments.
Dr Intan suggested including these groups under the Special Employment Credit (SEC) and Additional SEC, which support employers and raise the employability of older Singaporeans.
Business owners or employers can get support in the form of tax reliefs or wage support to allow for flexi-work arrangements, she added, noting that this can provide better employment opportunities for the groups to work from home at a pace they are comfortable with.
“Being gainfully employed is a start in helping those with special needs or with mental health challenges live independently like many others, and it accords sufficient opportunities to develop that much-needed self-belief and self-dignity,” Dr Intan said.
Aljunied MP Ms Lim also referred to low-income household residents who have taken up jobs in the gig economy as members of the “vulnerable workforce”.
Some have told her they need the flexibility of time to attend to frequent family issues, she said, but do not have paid help or family support, and thus find it difficult to take time off regular work to attend to personal matters.
“It is well known that gig economy jobs come with hardly any employee benefits, such as paid leave or bonuses, and do not attract CPF contributions,” Ms Lim added, although she noted that the Government is looking to improve terms and conditions for gig workers.
Besides what employers can do, Dr Intan said society needs to be more accepting of people with different abilities, whether as employers, co-workers or neighbours.
“Our personal acceptance paves the way for more of those among us who are considered vulnerable individuals, to have a place in our society, be independent and have that opportunity to lead a life that is as normal as possible,” she added.
ABOLISH SECONDARY SCHOOL STREAMING
This inclusivity should also extend to the education system, MP for Nee Soon GRC Louis Ng said, as “it is surely just as important” that high and low-income children learn, play and mix with one another.
However, Mr Ng said streaming in secondary schools might prevent social mixing and harden social stratification, as he urged the Government to eliminate this practice.
“I know that streaming is a sacred cow and this practice has existed for many decades. Members will know that I don’t like to cull animals, but it really is time to slay this sacred cow,” he said.
“I am sure streaming was not meant to divide our nation by socioeconomic status, but we now see that streaming does contribute to it.”
READ: Government needs to recognise trade-off that comes from streaming students in secondary school: Ong Ye Kung
For instance, Mr Ng said students in the Normal streams tend to have a lower socioeconomic status than those from the Express streams.
He pointed to statistics which show that students from the Normal streams make up a higher percentage of those who live in public rental flats, as well as those who get help from the Ministry of Education’s (MOE) Financial Assistance Scheme.
“Indeed, for some students there is strong stigma associated to being in the Normal stream,” Mr Ng said, citing a research paper which highlighted that Normal (Technical) or EM3 students are perceived as stupid.
In addition, Mr Ng said it is difficult for students in the Normal streams to move to the Express stream. Each year, 530 Normal (Technical) students transfer to the Normal (Academic) stream, and of this figure, only 10 to 20 eventually move on to the Express stream.
This stratification continues further up the education ladder, Mr Ng said, noting that over the past three years, most Normal (Technical) graduates finish their studies in the Institute of Technical Education (ITE), earning a lower starting pay than their peers who graduate from university.
“Why do students from the Normal streams struggle to move to the Express stream?” Mr Ng asked. “One reason could be the psychological barriers that streaming imposes on Normal-stream students.”
In contrast, Mr Ng said like in primary schools, Subject-Based Banding has been expanded to all secondary schools to benefit more students, attracting support from teachers and parents.
Currently, Subject-Based Banding allows suitable students to take specific subjects at a higher academic level starting from Secondary 1. For example, a student in the Normal (Academic) stream could take some subjects at Express level.
“So what is stopping us from abolishing streaming in secondary schools?” Mr Ng questioned. “What is stopping us from preventing this kind of social stratification?
While Mr Ng admitted that there will be inequality in Singapore’s education system as everybody is not the same, he said “our students are not stupid and should not feel that they are or face that kind of stigma”.
“Every school is a good school and now let’s make every class a good class,” he added.