Today at breakfast, I could see the shock on the face of one of the company technicians as he read the Strait Times. Today's front page shows the income distribution in Singapore....."How can people live on $280 per month in Singapore, everything is so expensive!", he asked. This technician is from China and obviously does know how efficient Singaporeans are when it comes to living expenses.
Once again the PAP govt has achieved new high for the GINI index. Our GINI index has risen from 0.468 to 0.472. It would have been higher if not for the progress package given out last year just before the elections to boost lower incomes by a few tens of dollars. When it comes to the GINI index only Singapore can beat Singapore.
The PAP has been extremely humble when it comes to taking credit our world beating income distribution and the high GINI index - they keep saying it is due by globalisation and it has little to do with them. No the income distribution has everything to do with the PAP which showed so much wisdom in embracing globalisation. There is really no need for the PAP to be so humble because they are primarily responsible for what has happened, through their policies:
1. Foreign labor policy. No govt in the world has allowed the import of so many workers into their economy. There are now 800,000 foreign workers in Singapore. With an expanded supply of workers, employers don't even consider those over 40s or older workers.
2. Rising costs. Business cost consists of several components including rents, utilities & labor. What is important is total cost. If rents is raised, business would be willing to pay workers less to keep the total cost manageable. The PAP govt is the biggest landlord and controls many cost components like utilities etc. ...you don't see utilities going down so something else has to come down - wages.
3. Power to the PAP. There is no people power among the low income no voice to speak for them and little influence over policy decisions such as reduction of CPF, benefits, no minimum income laws etc.
4. Pay rise for the PAP govt and President Nathan. Our President has been working extremely hard, his pay was increased by a hundred thousand to $2.6M. Somehow this will also help raise the GINI index.
5. Tax cuts for corporations & high income earners and GST increase for low income earners. Our tax structure has become more regressive (some day digressive) in the past decade as the PAP believes that our corporations & rich individuals need more financial help than the poor. Our corporate profits are now at an all time high relative to the GDP and the PAP wants to cut corporate tax to make it even higher!
The PAP's effort has once again bore fruit. ..when it comes to the GINI index we are way ahead of all our economic competitors. We don't have to worry about them because they are giving welfare to the poor such as Hong Kong. In Singapore, welfare is still a dirty word. Thanks to the PAP, we can expect more record breaking GINI indices in the future.