Minister Lee commented that the CRI inequality index, which changed its key indicators to tax practices, public social spending and labor and gender rights, equates high taxation and high public spending to combating inequality.
“We think it is more important to look at the outcomes achieved instead,” said Minister Lee. “The report itself recognises this limitation.”
The 2018 CRI index noted the following reasons for Singapore’s low 2018 ranking:
1) Singapore has a number of harmful tax practices, including corporate tax incentives for intellectual property development, international traders and the finance and maritime sectors.
2) Singapore’s maximum personal income tax rate remains low at 22 percent, despite a rate increase for top earners of 2 percentage points.
3) Singapore’s public social spending on education and health is relatively low, making up only 39 percent of its budget, behind South Korea and Thailand at 50 percent.
4) 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.
Denmark, Germany and Finland were the countries who ranked highest, while Japan was in 11th place, the highest-ranking Asian nation on the CRI index.
Singapore and Laos were the lowest-ranked ASEAN nations on the CRI index, in 149th and 150th places respectively, with Singapore coming in last place when ranked on progressive tax policies.
Minister Lee defended Singapore, saying that while Singaporeans’ income taxes are low, the benefits they receive from high quality of infrastructure and social support are disproportionately larger.
According to Minister Lee, 90 percent of Singaporeans own their homes, and even among the poorest 10 percent of households, 84 percent are home owners.
“No other country comes close,” the minister added proudly.
In response to criticism of Singapore’s relatively low social spending, which is another key indicator on the CRI inequality index, Minister Lee cited Singapore’s performance in international rankings for education and healthcare, like the Programme for International Student Assessment (PISA). He also made a point of the income growth experienced by lower income and median households over the last decade.
“That we achieved all of this with lower taxes and lower spending than most countries is to Singapore’s credit rather than discredit,” said Minister Lee.
Oxfam’s head of inequality policy Max Lawson issued several statements on Singapore in a press release that was published with the CRI index. Lawson cited that ways that Singapore could tackle inequality at home – spending more, strengthening its labor rights and putting anti-discrimination laws in place.
Analysts at The New Paper commented that the CRI index did not study all of Singapore’s efforts to bridge the inequality gap, as Singapore has other policies and programs in place that redistribute wealth.
According to Singapore Management University law don Eugene Tan, the methodology used by the CRI index was “simplistic and prescriptive”. That the report did not look at policy outcomes was a glaring omission that compromised its objectivity, said Tan.
“The report puts every country through a cookie cutter, but what works for Denmark may not be suitable for Singapore,” noted Tan.
Minister Lee will continue to defend Singapore’s reputation and cite all the efforts the city-state is doing to bridge the inequality gap.