By Chanel Morgan
Prospects for the lowest income earners in Singapore look to be getting even tougher. Without an official poverty line, and being the third richest country in the world, shouldn’t we strive to be a more charitable nation?
Our country is home to the highest percentage of millionaires. According to an MOF report in 2012, the top 1% of taxable income earners in Singapore are taxed an average of $0.7 million per year.
The rich are getting richer, with the number of income earners within the top 1%, rising from 29,524 in 2009, to 32,285 in 2012.
Since the IRAS only requires declarations on taxable income, non-taxable income – such as capital gains – need not be reported.
CPF statistics in 2011 illustrated that over 259,000 earn less than $1,000 a month, with 458,000 Singaporeans earning less than $1,500 a month. Even if a portion of these individuals include part-time workers or national service men, the evidence is enough to suggest that the number of Singaporeans struggling to make ends meet reaches well into the thousands.
It is globally known that addressing income inequality is the first step in reducing ‘poverty’ – both are intrinsically linked. Even though there are distributional policies on the government’s agenda to curb the poverty depth and severity, the hard truth is that in essence, the refusal to adopt a welfare oriented system is good for growth, but not so good for poverty.
Relative poverty dilemma
Consider the one-room apartments subsidized by the government – at times, these apartments house an entire family in a space of 30 square metres. The public housing statistics of 2008 revealed that one third of these families living in one-room flats do not earn any income; and despite the numerous religious, civil and non-profit organizations presently in the works, some of these low-income families are simply not eligible for assistance.
The most vulnerable in the poverty equation however, are those who are most often left out of sight. It is the children of lower-income families who are at high risk of suffering from the adverse impacts of poverty. As cited by the University of Queensland, Australia, “children experiencing family poverty at any developmental stage in their early life course have reduced levels of cognitive development”.
The only way to ensure every youth is entitled to a decent upbringing is to target Singapore’s problem of high inequality before it gets worse.
Finding a way out
One solution to minimize the income gap is for Singapore’s wealthiest individuals to espouse a philanthropic campaign similar to ‘The Giving Pledge’; a campaign organized and launched in 2010 by the world’s richest men, Warren Buffett and Bill Gates.
It all started when the world’s no. 82 Russian billionaire, Vladimir Potanin, advised Gates on his ability to persuade the world’s richest to donate, noting that Gates should “try and move this initiative from American soil”, making this “a real international initiative.’ Since 2010, the number of pledges has now grown to 114 signatories.
The Buffett-Gates initiative is based on billionaires making a moral pledge to donate their fortunes to charity within their lifetime or after death.
Recent signatories include New York based real estate magnate Stephen Ross, hedge fund manager Paul E Singer and the world’s youngest self-made female billionaire Sara Blakely; their charitable commitments can be seen at www.thegivingpledge.org, together with commitments made by other billionaires worldwide.
If Singapore were to launch a similar campaign which required the extremely wealthy to make contributions to a fund that specifically helped the poor, we would have to avoid creating a philanthropic culture led primarily through government patronage. Ultimately, people should be driven to give of their own will, to their desired charities and should be doing so from the heart, just like the Buffett-Gates initiative.
The Russian exemplar
Perhaps Singapore’s rich should take a lesson or two from Potanin, who decided to act on the fact that “The gap between the poor and the rich is so huge”. He understood his actions would not guarantee a radical change in attitudes, but that it would unquestionably encourage others to do the same.
Determined to get away from the reputation of being profligate spenders who bought yachts every few days, Potanin led the way for his fellow countrymen to give to charity. He was the first Russian billionaire to sign up for the Giving Pledge, promising half his wealth – worth US$12.3 billion, as of 8 August – to philanthropic causes.
Going through data gathered from Russia’s 15 wealthiest billionaires, and from annual reports published by their companies and charitable organizations, Bloomberg News recently confirmed that interest in philanthropy among Russia’s richest is increasing.
Between 1 January 2010 and 31 December 2012, 15 Russian billionaires who offered documentation to Bloomberg donated a grand total of US$1.64 billion to charitable projects.
The total worth of Russia’s 15 richest men –they’re all men – was a whopping US$155 billion as of 8 Aug, which is roughly 8% of Russia’s economy; this meant that the 15 philanthropists who provided the data had given away roughly 1% of their aggregated fortunes during the three-year period.
All it could take is just one of Singapore’s wealthiest moguls to set the benchmark of moral precept, influencing others to get on the bandwagon. After all, many would agree that the path to happiness is to lead by good example. If we can promote a similar initiative of true philanthropy in Singapore, there’s no saying what Singapore cannot do.
Chanel Morgan is pursuing her Mass Communications Degree from Murdoch University.